LIBERTY MEDIA CORP /DE/
EX-10.17
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<TYPE>EX-10.17
<SEQUENCE>4
<FILENAME>a2105530zex-10_17.txt
<DESCRIPTION>EX-10.17
<TEXT>
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                                                                   EXHIBIT 10.17

                            LIBERTY MEDIA CORPORATION
                    2002 NONEMPLOYEE DIRECTOR INCENTIVE PLAN

                                    ARTICLE I

                                 PURPOSE OF PLAN

         1.1      PURPOSE. The purpose of the Plan is to provide a method
whereby eligible Nonemployee Directors of the Company may be awarded additional
remuneration for services rendered and encouraged to invest in capital stock of
the Company, thereby increasing their proprietary interest in the Company's
businesses and increasing their personal interest in the continued success and
progress of the Company. The Plan is also intended to aid in attracting Persons
of exceptional ability to become Nonemployee Directors of the Company.

                                   ARTICLE II

                                   DEFINITIONS

         2.1      CERTAIN DEFINED TERMS. Capitalized terms not defined elsewhere
in the Plan shall have the following meanings (whether used in the singular or
plural):

                  "Affiliate" of the Company means any corporation, partnership,
         or other business association that, directly or indirectly, through one
         or more intermediaries, controls, is controlled by, or is under common
         control with the Company.

                  "Agreement" means a stock option agreement, stock appreciation
         rights agreement, restricted shares agreement, stock units agreement,
         or an agreement evidencing more than one type of Award, specified in
         Section 11.5, as any such Agreement may be supplemented or amended from
         time to time.

                  "Approved Transaction" means any transaction in which the
         Board (or, if approval of the Board is not required as a matter of law,
         the stockholders of the Company) shall approve (i) any consolidation or
         merger of the Company, or binding share exchange, pursuant to which
         shares of Common Stock of the Company would be changed or converted
         into or exchanged for cash, securities, or other property, other than
         any such transaction in which the common stockholders of the Company
         immediately prior to such transaction have the same proportionate
         ownership of the Common Stock of, and voting power with respect to, the
         surviving corporation immediately after such transaction, (ii) any
         merger, consolidation, or binding share exchange to which the Company
         is a party as a result of which the Persons who are common stockholders
         of the Company immediately prior thereto have less than a majority of
         the combined voting power of the outstanding capital stock of the
         Company ordinarily (and apart from the rights accruing under special
         circumstances) having the right to vote in the election of directors
         immediately following such merger, consolidation, or binding share
         exchange, (iii) the adoption of any plan or proposal for the
         liquidation or dissolution of the

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         Company, or (iv) any sale, lease, exchange, or other transfer (in one
         transaction or a series of related transactions) of all, or
         substantially all, of the assets of the Company.

                  "Award" means a grant of Options, SARs, Restricted Shares,
         Stock Units and/or cash under this Plan.

                  "Board" means the Board of Directors of the Company.

                  "Board Change" means, during any period of two consecutive
         years, individuals who at the beginning of such period constituted the
         entire Board cease for any reason to constitute a majority thereof
         unless the election, or the nomination for election, of each new
         director was approved by a vote of at least two-thirds of the directors
         then still in office who were directors at the beginning of the period.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time, or any successor statute or statutes thereto.
         Reference to any specific Code section shall include any successor
         section.

                  "Common Stock" means each or any (as the context may require)
         series of the Company's common stock.

                  "Company" means Liberty Media Corporation, a Delaware
         corporation.

                  "Control Purchase" means any transaction (or series of related
         transactions) in which (i) any person (as such term is defined in
         Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation, or
         other entity (other than the Company, any Subsidiary of the Company, or
         any employee benefit plan sponsored by the Company or any Subsidiary of
         the Company) shall purchase any Common Stock of the Company (or
         securities convertible into Common Stock of the Company) for cash,
         securities, or any other consideration pursuant to a tender offer or
         exchange offer, without the prior consent of the Board, or (ii) any
         person (as such term is so defined), corporation, or other entity
         (other than the Company, any Subsidiary of the Company, any employee
         benefit plan sponsored by the Company, or any Subsidiary of the Company
         or any Exempt Person (as defined below)) shall become the "beneficial
         owner" (as such term is defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of the Company representing 20%
         or more of the combined voting power of the then outstanding securities
         of the Company ordinarily (and apart from the rights accruing under
         special circumstances) having the right to vote in the election of
         directors (calculated as provided in Rule 13d-3(d) under the Exchange
         Act in the case of rights to acquire the Company's securities), other
         than in a transaction (or series of related transactions) approved by
         the Board. For purposes of this definition, "Exempt Person" means each
         of (a) the Chairman of the Board, the President and each of the
         directors of the Company as of August 10, 2001, and (b) the respective
         family members, estates, and heirs of each of the Persons referred to
         in clause (a) above and any trust or other investment vehicle for the
         primary benefit of any of such Persons or their respective family
         members or heirs. As used with

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         respect to any Person, the term "family member" means the spouse,
         siblings and lineal descendants of such Person.

                  "Director Compensation" means the annual retainer and meeting
         fees, and any other regular cash compensation payable by the Company to
         a Nonemployee Director for service on the Board.

                  "Disability" means the inability to engage in any substantial
         gainful activity by reason of any medically determinable physical or
         mental impairment which can be expected to result in death or which has
         lasted or can be expected to last for a continuous period of not less
         than 12 months.

                  "Dividend Equivalents" means, with respect to Restricted
         Shares to be issued at the end of the Restriction Period, to the extent
         specified by the Board only, an amount equal to all dividends and other
         distributions (or the economic equivalent thereof) which are payable to
         stockholders of record during the Restriction Period on a like number
         and kind of shares of Common Stock.

                  "Domestic Relations Order" means a domestic relations order as
         defined by the Code or Title I of the Employee Retirement Income
         Security Act, or the rules thereunder.

                  "Effective Date" means the date on which the Plan is approved
         by the shareholders of the Company.

                  "Equity Security" shall have the meaning ascribed to such term
         in Section 3(a)(11) of the Exchange Act, and an equity security of an
         issuer shall have the meaning ascribed thereto in Rule 16a-1
         promulgated under the Exchange Act, or any successor Rule.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended from time to time, or any successor statute or statutes
         thereto. Reference to any specific Exchange Act section shall include
         any successor section.

                  "Fair Market Value" of a share of any series of Common Stock
         on any day means the last sale price (or, if no last sale price is
         reported, the average of the high bid and low asked prices) for a share
         of such series of Common Stock on such day (or, if such day is not a
         trading day, on the next preceding trading day) as reported on the
         consolidated transaction reporting system for the principal national
         securities exchange on which shares of such series of Common Stock are
         listed on such day or if such shares are not then listed on a national
         securities exchange, then as reported on Nasdaq or, if such shares are
         not then listed or quoted on Nasdaq, then as quoted by the National
         Quotation Bureau Incorporated. If for any day the Fair Market Value of
         a share of the applicable series of Common Stock is not determinable by
         any of the foregoing means, then the Fair Market Value for such day
         shall be determined in good faith by the Board on the basis of such
         quotations and other considerations as the Board deems appropriate.

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                  "Free Standing SAR" has the meaning ascribed thereto in
         Section 7.1.

                  "Holder" means a Person who has received an Award under this
         Plan.

                  "Nasdaq" means The Nasdaq Stock Market.

                  "Nonemployee Director" means an individual who is a member of
         the Board and who is not an employee of the Company or any Subsidiary.

                  "Nonqualified Stock Option" means a stock option granted under
         Article VI.

                  "Option" means a Nonqualified Stock Option.

                  "Person" means an individual, corporation, limited liability
         company, partnership, trust, incorporated or unincorporated
         association, joint venture or other entity of any kind.

                  "Plan" means this Liberty Media Corporation 2002 Nonemployee
         Director Incentive Plan.

                  "Restricted Shares" means shares of any series of Common Stock
         or the right to receive shares of any specified series of Common Stock,
         as the case may be, awarded pursuant to Article VIII.

                  "Restriction Period" means a period of time beginning on the
         date of each Award of Restricted Shares and ending on the Vesting Date
         with respect to such Award.

                  "Retained Distribution" has the meaning ascribed thereto in
         Section 8.3.

                  "SARs" means stock appreciation rights, awarded pursuant to
         Article VII, with respect to shares of any specified series of Common
         Stock.

                  "Stock Unit Awards" has the meaning ascribed thereto in
         Section 9.1.

                  "Subsidiary" of a Person means any present or future
         subsidiary (as defined in Section 424(f) of the Code) of such Person or
         any business entity in which such Person owns, directly or indirectly,
         50% or more of the voting, capital, or profits interests. An entity
         shall be deemed a subsidiary of a Person for purposes of this
         definition only for such periods as the requisite ownership or control
         relationship is maintained.

                  "Tandem SARs" has the meaning ascribed thereto in Section 7.1.

                  "Vesting Date," with respect to any Restricted Shares awarded
         hereunder, means the date on which such Restricted Shares cease to be
         subject to a risk of forfeiture, as designated in or determined in
         accordance with the Agreement with respect to such award of Restricted
         Shares pursuant to Article VIII. If more than one Vesting Date is
         designated for an award of Restricted Shares, reference in the Plan to
         a Vesting Date in

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         respect of such Award shall be deemed to refer to each part of such
         Award and the Vesting Date for such part.

                                   ARTICLE III

                                 ADMINISTRATION

         3.1      ADMINISTRATION. The Plan shall be administered by the Board,
provided that it may delegate to employees of the Company certain administrative
or ministerial duties in carrying out the purposes of the Plan.

         3.2      POWERS. The Board shall have full power and authority to grant
to eligible Persons Options under Article VI of the Plan, SARs under Article VII
of the Plan, Restricted Shares under Article VIII of the Plan, and/or Stock
Units under Article IX of the Plan, to determine the terms and conditions (which
need not be identical) of all Awards so granted, to interpret the provisions of
the Plan and any Agreements relating to Awards granted under the Plan, and to
supervise the administration of the Plan. The Board in making an Award may
provide for the granting or issuance of additional, replacement, or alternative
Awards upon the occurrence of specified events, including the exercise of the
original Award. The Board shall have sole authority in the selection of Persons
to whom Awards may be granted under the Plan and in the determination of the
timing, pricing, and amount of any such Award, subject only to the express
provisions of the Plan. In making determinations hereunder, the Board may take
into account such factors as the Board in its discretion deems relevant.

         3.3      INTERPRETATION. The Board is authorized, subject to the
provisions of the Plan, to establish, amend, and rescind such rules and
regulations as it deems necessary or advisable for the proper administration of
the Plan and to take such other action in connection with or in relation to the
Plan as it deems necessary or advisable. Each action and determination made or
taken pursuant to the Plan by the Board, including any interpretation or
construction of the Plan, shall be final and conclusive for all purposes and
upon all Persons. No member of the Board shall be liable for any action or
determination made or taken by him or the Board in good faith with respect to
the Plan.

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                                   ARTICLE IV

                           SHARES SUBJECT TO THE PLAN

         4.1      NUMBER OF SHARES. Subject to the provisions of this Article
IV, the maximum number of shares of Common Stock (i) which may be issued in lieu
of Director Compensation pursuant to Section 10.1 and (ii) with respect to which
Awards may be granted during the term of the Plan shall be 5 million shares.
Shares of Common Stock will be made available from the authorized but unissued
shares of the Company or from shares reacquired by the Company, including shares
purchased in the open market. The shares of Common Stock subject to (i) any
Award granted under the Plan that shall expire, terminate or be annulled for any
reason without having been exercised (or considered to have been exercised as
provided in Section 7.2), (ii) any Award of any SARs granted under the Plan that
shall be exercised for cash, and (iii) any Award of Restricted Shares or Stock
Units that shall be forfeited prior to becoming vested (provided that the Holder
received no benefits of ownership of such Restricted Shares or Stock Units other
than voting rights and the accumulation of Retained Distributions and unpaid
Dividend Equivalents that are likewise forfeited) shall again be available for
purposes of the Plan.

         4.2      ADJUSTMENTS. If the Company subdivides its outstanding shares
of any series of Common Stock into a greater number of shares of such series of
Common Stock (by stock dividend, stock split, reclassification, or otherwise) or
combines its outstanding shares of any series of Common Stock into a smaller
number of shares of such series of Common Stock (by reverse stock split,
reclassification, or otherwise) or if the Board determines that any stock
dividend, extraordinary cash dividend, reclassification, recapitalization,
reorganization, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase such series of Common Stock, or other similar
corporate event (including mergers or consolidations other than those which
constitute Approved Transactions, adjustments with respect to which shall be
governed by Section 11.1(b)) affects any series of Common Stock so that an
adjustment is required to preserve the benefits or potential benefits intended
to be made available under this Plan, then the Board, in its sole discretion and
in such manner as the Board may deem equitable and appropriate, may make such
adjustments to any or all of (i) the number and kind of shares of stock which
thereafter may be awarded, optioned, or otherwise made subject to the benefits
contemplated by the Plan, (ii) the number and kind of shares of stock subject to
outstanding Awards, and (iii) the purchase or exercise price and the relevant
appreciation base with respect to any of the foregoing, PROVIDED, HOWEVER, that
the number of shares subject to any Award shall always be a whole number.
Notwithstanding the foregoing, if all shares of any series of Common Stock are
redeemed, then each outstanding Award shall be adjusted to substitute for the
shares of such series of Common Stock subject thereto the kind and amount of
cash, securities or other assets issued or paid in the redemption of the
equivalent number of shares of such series of Common Stock and otherwise the
terms of such Award, including, in the case of Options or similar rights, the
total exercise price, and, in the case of Free Standing SARs, the base price,
shall remain constant before and after the substitution (unless otherwise
determined by the Board and provided in the applicable Agreement). The Board
may, if deemed appropriate, provide for a cash payment to any Holder of an Award
in connection with any adjustment made pursuant to this Section 4.2.

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                                    ARTICLE V

                                   ELIGIBILITY

         5.1      GENERAL. The Persons who shall be eligible to participate in
the Plan and to receive Awards under the Plan shall, subject to Section 5.2, be
such Persons who are Nonemployee Directors as the Board shall select. Awards may
be made to Nonemployee Directors who hold or have held Awards under this Plan or
any similar or other awards under any other plan of the Company or any of its
Affiliates.

         5.2      INELIGIBILITY. No Person who is not a Nonemployee Director
shall be eligible to receive an Award.

                                   ARTICLE VI

                                  STOCK OPTIONS

         6.1      GRANT OF OPTIONS. Subject to the limitations of the Plan, the
Board shall designate from time to time those eligible Persons to be granted
Options, the time when each Option shall be granted to such eligible Persons,
the series and number of shares of Common Stock subject to such Option, and,
subject to Section 6.2, the purchase price of the shares of Common Stock subject
to such Option.

         6.2      OPTION PRICE. The price at which shares may be purchased upon
exercise of an Option shall be fixed by the Board and may be more than, less
than, or equal to the Fair Market Value of the shares of the applicable series
of Common Stock subject to the Option as of the date the Option is granted.

         6.3      TERM OF OPTIONS. Subject to the provisions of the Plan with
respect to death, retirement and termination of service, the term of each Option
shall be for such period as the Board shall determine as set forth in the
applicable Agreement.

         6.4      EXERCISE OF OPTIONS. An Option granted under the Plan shall
become (and remain) exercisable during the term of the Option to the extent
provided in the applicable Agreement and this Plan and, unless the Agreement
otherwise provides, may be exercised to the extent exercisable, in whole or in
part, at any time and from time to time during such term; PROVIDED, HOWEVER,
that subsequent to the grant of an Option, the Board, at any time before
complete termination of such Option, may accelerate the time or times at which
such Option may be exercised in whole or in part (without reducing the term of
such Option).

         6.5      MANNER OF EXERCISE.

                  (a)    FORM OF PAYMENT. An Option shall be exercised by
         written notice to the Company upon such terms and conditions as the
         Agreement may provide and in accordance with such other procedures for
         the exercise of Options as the Board may establish from time to time.
         The method or methods of payment of the purchase price for

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         the shares to be purchased upon exercise of an Option and of any
         amounts required by Section 11.9 shall be determined by the Board and
         may consist of (i) cash, (ii) check, (iii) promissory note, (iv) whole
         shares of any series of Common Stock, (v) the withholding of shares of
         the applicable series of Common Stock issuable upon such exercise of
         the Option, (vi) the delivery, together with a properly executed
         exercise notice, of irrevocable instructions to a broker to deliver
         promptly to the Company the amount of sale or loan proceeds required to
         pay the purchase price, or (vii) any combination of the foregoing
         methods of payment, or such other consideration and method of payment
         as may be permitted for the issuance of shares under the Delaware
         General Corporation Law. The permitted method or methods of payment of
         the amounts payable upon exercise of an Option, if other than in cash,
         shall be set forth in the applicable Agreement and may be subject to
         such conditions as the Board deems appropriate.

                  (b)    VALUE OF SHARES. Unless otherwise determined by the
         Board and provided in the applicable Agreement, shares of any series of
         Common Stock delivered in payment of all or any part of the amounts
         payable in connection with the exercise of an Option, and shares of any
         series of Common Stock withheld for such payment, shall be valued for
         such purpose at their Fair Market Value as of the exercise date.

                  (c)    ISSUANCE OF SHARES. The Company shall effect the
         transfer of the shares of Common Stock purchased under the Option as
         soon as practicable after the exercise thereof and payment in full of
         the purchase price therefor and of any amounts required by Section
         11.9, and within a reasonable time thereafter, such transfer shall be
         evidenced on the books of the Company. Unless otherwise determined by
         the Board and provided in the applicable Agreement, (i) no Holder or
         other Person exercising an Option shall have any of the rights of a
         stockholder of the Company with respect to shares of Common Stock
         subject to an Option granted under the Plan until due exercise and full
         payment has been made, and (ii) no adjustment shall be made for cash
         dividends or other rights for which the record date is prior to the
         date of such due exercise and full payment.

         6.6      NONTRANSFERABILITY. Unless otherwise determined by the Board
and provided in the applicable Agreement, Options shall not be transferable
other than by will or the laws of descent and distribution or pursuant to a
Domestic Relations Order, and, except as otherwise required pursuant to a
Domestic Relations Order, Options may be exercised during the lifetime of the
Holder thereof only by such Holder (or his or her court-appointed legal
representative).

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                                   ARTICLE VII

                                      SARs

         7.1      GRANT OF SARs. Subject to the limitations of the Plan, SARs
may be granted by the Board to such eligible Persons in such numbers, with
respect to any specified series of Common Stock, and at such times during the
term of the Plan as the Board shall determine. A SAR may be granted to a Holder
of an Option (hereinafter called a "related Option") with respect to all or a
portion of the shares of Common Stock subject to the related Option (a "Tandem
SAR") or may be granted separately to an eligible Nonemployee Director (a "Free
Standing SAR"). Subject to the limitations of the Plan, SARs shall be
exercisable in whole or in part upon notice to the Company upon such terms and
conditions as are provided in the Agreement.

         7.2      TANDEM SARs. A Tandem SAR may be granted either concurrently
with the grant of the related Option or at any time thereafter prior to the
complete exercise, termination, expiration, or cancellation of such related
Option. Tandem SARs shall be exercisable only at the time and to the extent that
the related Option is exercisable (and may be subject to such additional
limitations on exercisability as the Agreement may provide) and in no event
after the complete termination or full exercise of the related Option. Upon the
exercise or termination of the related Option, the Tandem SARs with respect
thereto shall be canceled automatically to the extent of the number of shares of
Common Stock with respect to which the related Option was so exercised or
terminated. Subject to the limitations of the Plan, upon the exercise of a
Tandem SAR and unless otherwise determined by the Board and provided in the
applicable Agreement, (i) the Holder thereof shall be entitled to receive from
the Company, for each share of the applicable series of Common Stock with
respect to which the Tandem SAR is being exercised, consideration (in the form
determined as provided in Section 7.4) equal in value to the excess of the Fair
Market Value of a share of the applicable series of Common Stock with respect to
which the Tandem SAR was granted on the date of exercise over the related Option
purchase price per share, and (ii) the related Option with respect thereto shall
be canceled automatically to the extent of the number of shares of Common Stock
with respect to which the Tandem SAR was so exercised.

         7.3      FREE STANDING SARs. Free Standing SARs shall be exercisable at
the time, to the extent and upon the terms and conditions set forth in the
applicable Agreement. The base price of a Free Standing SAR may be more than,
less than, or equal to the Fair Market Value of the applicable series of Common
Stock with respect to which the Free Standing SAR was granted as of the date the
Free Standing SAR is granted. Subject to the limitations of the Plan, upon the
exercise of a Free Standing SAR and unless otherwise determined by the Board and
provided in the applicable Agreement, the Holder thereof shall be entitled to
receive from the Company, for each share of the applicable series of Common
Stock with respect to which the Free Standing SAR is being exercised,
consideration (in the form determined as provided in Section 7.4) equal in value
to the excess of the Fair Market Value of a share of the applicable series of
Common Stock with respect to which the Free Standing SAR was granted on the date
of exercise over the base price per share of such Free Standing SAR.

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         7.4      CONSIDERATION. The consideration to be received upon the
exercise of a SAR by the Holder shall be paid in cash, shares of the applicable
series of Common Stock with respect to which the SAR was granted (valued at Fair
Market Value on the date of exercise of such SAR), a combination of cash and
such shares of the applicable series of Common Stock or such other
consideration, in each case, as provided in the Agreement. No fractional shares
of Common Stock shall be issuable upon exercise of a SAR, and unless otherwise
provided in the applicable Agreement, the Holder will receive cash in lieu of
fractional shares. Unless the Board shall otherwise determine, to the extent a
Free Standing SAR is exercisable, it will be exercised automatically for cash on
its expiration date.

         7.5      LIMITATIONS. The applicable Agreement may provide for a limit
on the amount payable to a Holder upon exercise of SARs at any time or in the
aggregate, for a limit on the number of SARs that may be exercised by the Holder
in whole or in part for cash during any specified period, for a limit on the
time periods during which a Holder may exercise SARs, and for such other limits
on the rights of the Holder and such other terms and conditions of the SAR,
including, without limitation, a condition that the SAR may be exercised only in
accordance with rules and regulations adopted from time to time, as the Board
may determine. Unless otherwise so provided in the applicable Agreement, any
such limit relating to a Tandem SAR shall not restrict the exercisability of the
related Option. Such rules and regulations may govern the right to exercise SARs
granted prior to the adoption or amendment of such rules and regulations as well
as SARs granted thereafter.

         7.6      EXERCISE. For purposes of this Article VII, the date of
exercise of a SAR shall mean the date on which the Company shall have received
notice from the Holder of the SAR of the exercise of such SAR (unless otherwise
determined by the Board and provided in the applicable Agreement).

         7.7      NONTRANSFERABILITY. Unless otherwise determined by the Board
and provided in the applicable Agreement, (i) SARs shall not be transferable
other than by will or the laws of descent and distribution or pursuant to a
Domestic Relations Order, and (ii) except as otherwise required pursuant to a
Domestic Relations Order, SARs may be exercised during the lifetime of the
Holder thereof only by such Holder (or his or her court-appointed legal
representative).

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                                  ARTICLE VIII

                                RESTRICTED SHARES

         8.1      GRANT. Subject to the limitations of the Plan, the Board shall
designate those eligible Persons to be granted awards of Restricted Shares,
shall determine the time when each such Award shall be granted, shall determine
whether shares of Common Stock covered by awards of Restricted Shares will be
issued at the beginning or the end of the Restriction Period and whether
Dividend Equivalents will be paid during the Restriction Period in the event
shares of the applicable series of Common Stock are to be issued at the end of
the Restriction Period, and shall designate (or set forth the basis for
determining) the Vesting Date or Vesting Dates for each award of Restricted
Shares, and may prescribe other restrictions, terms, and conditions applicable
to the vesting of such Restricted Shares in addition to those provided in the
Plan. The Board shall determine the price, if any, to be paid by the Holder for
the Restricted Shares; PROVIDED, HOWEVER, that the issuance of Restricted Shares
shall be made for at least the minimum consideration necessary to permit such
Restricted Shares to be deemed fully paid and nonassessable. All determinations
made by the Board pursuant to this Section 8.1 shall be specified in the
Agreement.

         8.2      ISSUANCE OF RESTRICTED SHARES AT BEGINNING OF THE RESTRICTION
PERIOD. If shares of the applicable series of Common Stock are issued at the
beginning of the Restriction Period, the stock certificate or certificates
representing such Restricted Shares shall be registered in the name of the
Holder to whom such Restricted Shares shall have been awarded. During the
Restriction Period, certificates representing the Restricted Shares and any
securities constituting Retained Distributions shall bear a restrictive legend
to the effect that ownership of the Restricted Shares (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms, and conditions provided in the Plan and the
applicable Agreement. Such certificates shall remain in the custody of the
Company or its designee, and the Holder shall deposit with the custodian stock
powers or other instruments of assignment, each endorsed in blank, so as to
permit retransfer to the Company of all or any portion of the Restricted Shares
and any securities constituting Retained Distributions that shall be forfeited
or otherwise not become vested in accordance with the Plan and the applicable
Agreement.

         8.3      RESTRICTIONS. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding shares of the
applicable series of Common Stock for all corporate purposes. The Holder will
have the right to vote such Restricted Shares, to receive and retain such
dividends and distributions, as the Board may designate, paid or distributed on
such Restricted Shares, and to exercise all other rights, powers, and privileges
of a Holder of shares of the applicable series of Common Stock with respect to
such Restricted Shares; EXCEPT, THAT, unless otherwise determined by the Board
and provided in the applicable Agreement, (a) the Holder will not be entitled to
delivery of the stock certificate or certificates representing such Restricted
Shares until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived;
(b) the Company or its designee will retain custody of the stock certificate or
certificates representing the Restricted Shares during the Restriction Period as
provided in Section 8.2; (c) other than such dividends and

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distributions as the Board may designate, the Company or its designee will
retain custody of all distributions ("Retained Distributions") made or declared
with respect to the Restricted Shares (and such Retained Distributions will be
subject to the same restrictions, terms and vesting, and other conditions as are
applicable to the Restricted Shares) until such time, if ever, as the Restricted
Shares with respect to which such Retained Distributions shall have been made,
paid, or declared shall have become vested, and such Retained Distributions
shall not bear interest or be segregated in a separate account; (d) the Holder
may not sell, assign, transfer, pledge, exchange, encumber, or dispose of the
Restricted Shares or any Retained Distributions or his interest in any of them
during the Restriction Period; and (e) a breach of any restrictions, terms, or
conditions provided in the Plan or established by the Board with respect to any
Restricted Shares or Retained Distributions will cause a forfeiture of such
Restricted Shares and any Retained Distributions with respect thereto.

         8.4      ISSUANCE OF STOCK AT END OF THE RESTRICTION PERIOD. Restricted
Shares issued at the end of the Restriction Period shall not constitute issued
and outstanding shares of the applicable series of Common Stock, and the Holder
shall not have any of the rights of a stockholder with respect to the shares of
Common Stock covered by such an award of Restricted Shares, in each case until
such shares shall have been transferred to the Holder at the end of the
Restriction Period. If and to the extent that shares of Common Stock are to be
issued at the end of the Restriction Period, the Holder shall be entitled to
receive Dividend Equivalents with respect to the shares of Common Stock covered
thereby either (i) during the Restriction Period or (ii) in accordance with the
rules applicable to Retained Distributions, as the Board may specify in the
Agreement.

         8.5      CASH AWARDS. In connection with any award of Restricted
Shares, an Agreement may provide for the payment of a cash amount to the Holder
of such Restricted Shares at any time after such Restricted Shares shall have
become vested. Such cash awards shall be payable in accordance with such
additional restrictions, terms, and conditions as shall be prescribed by the
Board in the Agreement and shall be in addition to any other compensation
payments which such Holder shall be otherwise entitled or eligible to receive
from the Company.

         8.6      COMPLETION OF RESTRICTION PERIOD. On the Vesting Date with
respect to each award of Restricted Shares and the satisfaction of any other
applicable restrictions, terms, and conditions, (a) all or the applicable
portion of such Restricted Shares shall become vested, (b) any Retained
Distributions and any unpaid Dividend Equivalents with respect to such
Restricted Shares shall become vested to the extent that the Restricted Shares
related thereto shall have become vested, and (c) any cash award to be received
by the Holder with respect to such Restricted Shares shall become payable, all
in accordance with the terms of the applicable Agreement. Any such Restricted
Shares, Retained Distributions, and any unpaid Dividend Equivalents that shall
not become vested shall be forfeited to the Company, and the Holder shall not
thereafter have any rights (including dividend and voting rights) with respect
to such Restricted Shares, Retained Distributions, and any unpaid Dividend
Equivalents that shall have been so forfeited. The Board may, in its discretion,
provide that the delivery of any Restricted Shares, Retained Distributions, and
unpaid Dividend Equivalents that shall have become vested, and payment of any
cash awards that shall have become payable, shall be deferred until such date or
dates as the recipient may elect. Any election of a recipient pursuant to the
preceding

                                      -12-
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sentence shall be filed in writing with the Board in accordance with such rules
and regulations, including any deadline for the making of such an election, as
the Board may provide.

                                   ARTICLE IX

                                   STOCK UNITS

         9.1      GRANT. In addition to granting awards of Options, SARs, and
Restricted Shares, the Board shall, subject to the limitations of the Plan, have
authority to grant to eligible Persons awards of Stock Units which may be in the
form of shares of any specified series of Common Stock or units, the value of
which is based, in whole or in part, on the Fair Market Value of the shares of
any specified series of Common Stock. Subject to the provisions of the Plan,
including any rules established pursuant to Section 9.2, awards of Stock Units
shall be subject to such terms, restrictions, conditions, vesting requirements,
and payment rules as the Board may determine in its discretion, which need not
be identical for each Award. The determinations made by the Board pursuant to
this Section 9.1 shall be specified in the applicable Agreement.

         9.2      RULES. The Board may, in its discretion, establish any or all
of the following rules for application to an Award of Stock Units:

                  (a)    Any shares of Common Stock which are part of an award
         of Stock Units may not be assigned, sold, transferred, pledged, or
         otherwise encumbered prior to the date on which the shares are issued
         or, if later, the date provided by the Board at the time of the Award.

                  (b)    Such Awards may provide for the payment of cash
         consideration by the Person to whom such Award is granted or provide
         that the Award, and any shares of Common Stock to be issued in
         connection therewith, if applicable, shall be delivered without the
         payment of cash consideration; PROVIDED, HOWEVER, that the issuance of
         any shares of Common Stock in connection with an Award of Stock Units
         shall be for at least the minimum consideration necessary to permit
         such shares to be deemed fully paid and nonassessable.

                  (c)    Awards of Stock Units may relate in whole or in part to
         performance or other criteria established by the Board at the time of
         grant.

                  (d)    Awards of Stock Units may provide for deferred payment
         schedules, vesting over a specified period of service, the payment (on
         a current or deferred basis) of dividend equivalent amounts with
         respect to the number of shares of Common Stock covered by the Award,
         and elections by the Holder to defer payment of the Award or the
         lifting of restrictions on the Award, if any.

                  (e)    In such circumstances as the Board may deem advisable,
         the Board may waive or otherwise remove, in whole or in part, any
         restrictions or limitations to which a Stock Unit Award was made
         subject at the time of grant.

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                                    ARTICLE X

                   STOCK AWARDS IN LIEU OF CASH DIRECTOR FEES

         10.1     GENERAL. Each Nonemployee Director shall have the option to
elect to receive shares of one or more series of Common Stock, as prescribed by
the Board, in lieu of all or part of the Director Compensation otherwise payable
by the Company during each calendar quarter. Subject to any applicable Purchase
Restriction as described in Section 10.3, to the extent a Nonemployee Director
has elected in writing to receive stock in lieu of Director Compensation, such
Nonemployee Director will receive shares of Common Stock on the last day of the
calendar quarter for which the Director Compensation was earned. The Director
Compensation shall be converted to a number of shares of Common Stock equal in
value to such Director Compensation based on the Fair Market Value of such
shares on the last day of the calendar quarter for which the Director
Compensation would otherwise be payable to the Nonemployee Director, with any
fractional shares paid in cash. For this purpose, if the last day of the
calendar quarter is not a trading day, then Fair Market Value shall be
determined as of the next succeeding trading day. Any shares issued in lieu of
Director Compensation shall be issued free of all restrictions except as
required by law.

         10.2     TIMING OF ELECTION. A Nonemployee Director's election pursuant
to Section 10.1 must be made no later than the 30th calendar day (or such other
day as the Board may prescribe) prior to the end of the calendar quarter to
which the election applies in accordance with the procedures established by the
Board. Once an election is made with respect to a particular calendar quarter,
it may not be withdrawn or substituted unless the Board determines, in its sole
discretion, that the withdrawal or substitution is occasioned by an
extraordinary or unanticipated event.

         10.3     ELECTION VOID DURING RESTRICTED PERIOD. If, on the date shares
would be purchased pursuant to an election under Section 10.1, there is in place
any restriction under applicable law (including, without limitation, a blackout
period under the Sarbanes-Oxley Act of 2002) or the rules of the principal
national securities exchange on which shares of the applicable series of Common
Stock are traded (a "Purchase Restriction") which would prohibit the Nonemployee
Director from making such a purchase, then such shares shall be purchased on the
first trading day following the lapse or removal of the Purchase Restriction
based on the Fair Market Value of the shares on such trading day.

         10.4     CONDITIONS. Nothing contained herein shall preclude the Board,
in its sole discretion, from imposing conditions on any election made under
Section 10.1, including, without limitation, the conditions described in Section
10.3.

                                      -14-
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                                   ARTICLE XI

                               GENERAL PROVISIONS

         11.1     ACCELERATION OF OPTIONS, SARs, RESTRICTED SHARES AND STOCK
UNITS.

                  (a)    DEATH OR DISABILITY. If a Holder's service shall
         terminate by reason of death or Disability, notwithstanding any
         contrary waiting period, installment period, vesting schedule, or
         Restriction Period in any Agreement or in the Plan, unless the
         applicable Agreement provides otherwise: (i) in the case of an Option
         or SAR, each outstanding Option or SAR granted under the Plan shall
         immediately become exercisable in full in respect of the aggregate
         number of shares covered thereby; (ii) in the case of Restricted
         Shares, the Restriction Period applicable to each such Award of
         Restricted Shares shall be deemed to have expired and all such
         Restricted Shares, any related Retained Distributions and any unpaid
         Dividend Equivalents shall become vested and any cash amounts payable
         pursuant to the applicable Agreement shall be adjusted in such manner
         as may be provided in the Agreement; and (iii) in the case of Stock
         Units, each such award of Stock Units shall become vested in full.

                  (b)    APPROVED TRANSACTIONS; BOARD CHANGE; CONTROL PURCHASE.
         In the event of any Approved Transaction, Board Change or Control
         Purchase, notwithstanding any contrary waiting period, installment
         period, vesting schedule, or Restriction Period in any Agreement or in
         the Plan, unless the applicable Agreement provides otherwise: (i) in
         the case of an Option or SAR, each such outstanding Option or SAR
         granted under the Plan shall become exercisable in full in respect of
         the aggregate number of shares covered thereby; (ii) in the case of
         Restricted Shares, the Restriction Period applicable to each such Award
         of Restricted Shares shall be deemed to have expired and all such
         Restricted Shares, any related Retained Distributions, and any unpaid
         Dividend Equivalents shall become vested and any cash amounts payable
         pursuant to the applicable Agreement shall be adjusted in such manner
         as may be provided in the Agreement; and (iii) in the case of Stock
         Units, each such award of Stock Units shall become vested in full, in
         each case effective upon the Board Change or Control Purchase or
         immediately prior to consummation of the Approved Transaction.
         Notwithstanding the foregoing, unless otherwise provided in the
         applicable Agreement, the Board may, in its discretion, determine that
         any or all outstanding Awards of any or all types granted pursuant to
         the Plan will not vest or become exercisable on an accelerated basis in
         connection with an Approved Transaction if effective provision has been
         made for the taking of such action which, in the opinion of the Board,
         is equitable and appropriate to substitute a new Award for such Award
         or to assume such Award and to make such new or assumed Award, as
         nearly as may be practicable, equivalent to the old Award (before
         giving effect to any acceleration of the vesting or exercisability
         thereof), taking into account, to the extent applicable, the kind and
         amount of securities, cash, or other assets into or for which the
         applicable series of Common Stock may be changed, converted, or
         exchanged in connection with the Approved Transaction.

                                      -15-
<Page>

         11.2     TERMINATION OF SERVICE.

                  (a)    GENERAL. If a Holder's service shall terminate prior to
         the complete exercise of an Option or SAR (or deemed exercise thereof,
         as provided in Section 7.2) or during the Restriction Period with
         respect to any Restricted Shares or prior to the vesting or complete
         exercise of any Stock Units, then such Option, SAR, or Stock Unit shall
         thereafter be exercisable, and the Holder's rights to any unvested
         Restricted Shares, Retained Distributions, unpaid Dividend Equivalents,
         and cash amounts and any such unvested Stock Units shall thereafter
         vest, in each case solely to the extent provided in the applicable
         Agreement; PROVIDED, HOWEVER, that, unless otherwise determined by the
         Board and provided in the applicable Agreement, (i) no Option or SAR
         may be exercised after the scheduled expiration date thereof; (ii) if
         the Holder's service terminates by reason of death or Disability, the
         Option or SAR shall remain exercisable for a period of at least one
         year following such termination (but not later than the scheduled
         expiration of such Option or SAR); and (iii) any termination of the
         Holder's service for cause will be treated in accordance with the
         provisions of Section 11.2(b).

                  (b)    TERMINATION FOR CAUSE. If a Holder's service on the
         Board shall be terminated by the Company during the Restriction Period
         with respect to any Restricted Shares, or prior to the exercise of any
         Option or SAR, or prior to the vesting or complete exercise of any
         Stock Unit for cause (for these purposes, cause shall include, but not
         be limited to, insubordination, dishonesty, incompetence, moral
         turpitude, other misconduct of any kind, and the refusal to perform his
         duties and responsibilities for any reason other than illness or
         incapacity; PROVIDED, HOWEVER, that if such termination occurs within
         12 months after an Approved Transaction or Control Purchase or Board
         Change, termination for cause shall mean only a felony conviction for
         fraud, misappropriation, or embezzlement), then, unless otherwise
         determined by the Board and provided in the applicable Agreement, (i)
         all Options and SARs and all unvested or unexercised Stock Units held
         by such Holder shall immediately terminate and (ii) such Holder's
         rights to all Restricted Shares, Retained Distributions, any unpaid
         Dividend Equivalents, and any cash awards shall be forfeited
         immediately.

         11.3     NONALIENATION OF BENEFITS. Except as set forth herein, no
right or benefit under the Plan shall be subject to anticipation, alienation,
sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign, hypothecate,
pledge, exchange, transfer, encumber or charge the same shall be void. No right
or benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities, or torts of the Person entitled to such benefits.

         11.4     WRITTEN AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a stock option agreement; each SAR shall be evidenced by a
stock appreciation rights agreement; each award of Restricted Shares shall be
evidenced by a restricted shares agreement; and each award of Stock Units shall
be evidenced by a stock units agreement, each in such form and containing such
terms and provisions not inconsistent with the provisions of the Plan as the
Board from time to time shall approve; PROVIDED, HOWEVER, that if more than one
type of Award is made to the same Holder, such Awards may be evidenced by a
single Agreement with such

                                      -16-
<Page>

Holder. Each grantee of an Option, SAR, Restricted Shares, or Stock Units shall
be notified promptly of such grant, and a written Agreement shall be promptly
executed and delivered by the Company. Any such written Agreement may contain
(but shall not be required to contain) such provisions as the Board deems
appropriate (i) to insure that the penalty provisions of Section 4999 of the
Code will not apply to any stock or cash received by the Holder from the Company
or (ii) to provide cash payments to the Holder to mitigate the impact of such
penalty provisions upon the Holder. Any such Agreement may be supplemented or
amended from time to time as approved by the Board as contemplated by Section
11.6(b).

         11.5     DESIGNATION OF BENEFICIARIES. Each Person who shall be granted
an Award under the Plan may designate a beneficiary or beneficiaries and may
change such designation from time to time by filing a written designation of
beneficiary or beneficiaries with the Board on a form to be prescribed by it,
provided that no such designation shall be effective unless so filed prior to
the death of such Person.

         11.6     TERMINATION AND AMENDMENT.

                  (a)    GENERAL. Unless the Plan shall theretofore have been
         terminated as hereinafter provided, no Awards may be made under the
         Plan on or after the tenth anniversary of the Effective Date. The Plan
         may be terminated at any time prior to the tenth anniversary of the
         Effective Date and may, from time to time, be suspended or discontinued
         or modified or amended if such action is deemed advisable by the Board.

                  (b)    MODIFICATION. No termination, modification or amendment
         of the Plan may, without the consent of the Person to whom any Award
         shall theretofore have been granted, adversely affect the rights of
         such Person with respect to such Award. No modification, extension,
         renewal, or other change in any Award granted under the Plan shall be
         made after the grant of such Award, unless the same is consistent with
         the provisions of the Plan. With the consent of the Holder and subject
         to the terms and conditions of the Plan (including Section 11.6(a)),
         the Board may amend outstanding Agreements with any Holder, including,
         without limitation, any amendment which would (i) accelerate the time
         or times at which the Award may be exercised and/or (ii) extend the
         scheduled expiration date of the Award. Without limiting the generality
         of the foregoing, the Board may, but solely with the Holder's consent
         unless otherwise provided in the Agreement, agree to cancel any Award
         under the Plan and grant a new Award in substitution therefor, provided
         that the Award so substituted shall satisfy all of the requirements of
         the Plan as of the date such new Award is made. Nothing contained in
         the foregoing provisions of this Section 11.6(b) shall be construed to
         prevent the Board from providing in any Agreement that the rights of
         the Holder with respect to the Award evidenced thereby shall be subject
         to such rules and regulations as the Board may, subject to the express
         provisions of the Plan, adopt from time to time or impair the
         enforceability of any such provision.

         11.7     GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company with respect to Awards shall be subject to all applicable laws, rules,
and regulations and such approvals by any governmental agencies as may be
required, including, without limitation, the effectiveness of

                                      -17-
<Page>

any registration statement required under the Securities Act of 1933, and the
rules and regulations of any securities exchange or association on which the
Common Stock may be listed or quoted. For so long as any series of Common Stock
are registered under the Exchange Act, the Company shall use its reasonable
efforts to comply with any legal requirements (i) to maintain a registration
statement in effect under the Securities Act of 1933 with respect to all shares
of the applicable series of Common Stock that may be issued to Holders under the
Plan and (ii) to file in a timely manner all reports required to be filed by it
under the Exchange Act.

         11.8     WITHHOLDING. The Company's obligation to deliver shares of
Common Stock or pay cash in respect of any Award under the Plan shall be subject
to applicable federal, state, and local tax withholding requirements. Federal,
state, and local withholding tax due at the time of an Award, upon the exercise
of any Option or SAR or upon the vesting of, or expiration of restrictions with
respect to, Restricted Shares or Stock Units, as appropriate, may, in the
discretion of the Board, be paid in shares of the applicable series of Common
Stock already owned by the Holder or through the withholding of shares otherwise
issuable to such Holder, upon such terms and conditions (including, without
limitation, the conditions referenced in Section 6.5) as the Board shall
determine. If the Holder shall fail to pay, or make arrangements satisfactory to
the Board for the payment to the Company of, all such federal, state and local
taxes required to be withheld by the Company, then the Company shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to such Holder an amount equal to any federal, state, or local
taxes of any kind required to be withheld by the Company with respect to such
Award.

         11.9     NONEXCLUSIVITY OF THE PLAN. The adoption of the Plan by the
Board shall not be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the awarding of
stock and cash otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

         11.10    EXCLUSION FROM OTHER PLANS. By acceptance of an Award, unless
otherwise provided in the applicable Agreement, each Holder shall be deemed to
have agreed that such Award is special incentive compensation that will not be
taken into account, in any manner, as compensation or bonus in determining the
amount of any payment under any pension, retirement or other benefit plan,
program, or policy of the Company or any Subsidiary of the Company. In addition,
each beneficiary of a deceased Holder shall be deemed to have agreed that such
Award will not affect the amount of any life insurance coverage, if any,
provided by the Company on the life of the Holder which is payable to such
beneficiary under any life insurance plan of the Company or any Subsidiary of
the Company. Director Compensation elected to be received in the form of stock
in lieu of cash shall be treated as regular compensation for purposes of any
Director retirement or life insurance plan.

         11.11    UNFUNDED PLAN. Neither the Company nor any Subsidiary of the
Company shall be required to segregate any cash or any shares of Common Stock
which may at any time be represented by Awards, and the Plan shall constitute an
"unfunded" plan of the Company. Except as provided in Article VIII with respect
to Awards of Restricted Shares and except as expressly set forth in an
Agreement, no Holder shall have voting or other rights with respect to

                                      -18-
<Page>

the shares of Common Stock covered by an Award prior to the delivery of such
shares. Neither the Company nor any Subsidiary of the Company shall, by any
provisions of the Plan, be deemed to be a trustee of any shares of Common Stock
or any other property, and the liabilities of the Company to any Holder pursuant
to the Plan shall be those of a debtor pursuant to such contract obligations as
are created by or pursuant to the Plan, and shall be limited to those of a
general creditor of the Company. In its sole discretion, the Board may authorize
the creation of trusts or other arrangements to meet the obligations of the
Company under the Plan, PROVIDED, HOWEVER, that the existence of such trusts or
other arrangements is consistent with the unfunded status of the Plan.

         11.12    GOVERNING LAW. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware.

         11.13    ACCOUNTS. The delivery of any shares of Common Stock and the
payment of any amount in respect of an Award shall be for the account of the
Company or the applicable Subsidiary of the Company, as the case may be, and any
such delivery or payment shall not be made until the recipient shall have paid
or made satisfactory arrangements for the payment of any applicable withholding
taxes as provided in Section 11.8.

         11.14    LEGENDS. Each certificate evidencing shares of Common Stock
subject to an Award shall bear such legends as the Board deems necessary or
appropriate to reflect or refer to any terms, conditions, or restrictions of the
Award applicable to such shares, including, without limitation, any to the
effect that the shares represented thereby may not be disposed of unless the
Company has received an opinion of counsel, acceptable to the Company, that such
disposition will not violate any federal or state securities laws.

         11.15    COMPANY'S RIGHTS. The grant of Awards pursuant to the Plan
shall not affect in any way the right or power of the Company to make
reclassifications, reorganizations, or other changes of or to its capital or
business structure or to merge, consolidate, liquidate, sell, or otherwise
dispose of all or any part of its business or assets.

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</TEXT>
</DOCUMENT>
