AMENDED AND RESTATED 1989 LONG TERM INCENTIVE PLAN OF BARNETT BANKS, INC. I. GENERAL 1.1 Purpose of the Plan The Amended and Restated 1989 Long Term Incentive Plan (the "Plan") of Barnett Banks, Inc. (the "Company") is intended to advance the best interests of the Company and its subsidiaries by providing key employees who have substantial responsibility for corporate management and growth with additional incentives through the grant of options to purchase shares of common stock, $2.00 par value, of the Company (the "Common Stock"), restricted stock, stock appreciation rights and performance units, thereby increasing the personal stake of such key employees in the continued success and growth of the Company and encouraging them to remain In the employ of the Company. 1.2 Administration of the Plan The Plan shall be administered by the Executive Compensation and Management Development Committee or other designated committee (the "Committee") of the Board of Directors of the Company which shall consist solely of two or more directors meeting the definition of outside directors under Proposed Treasury Regulation Section 1.162-27(e)(3) in effect as of December 31, 1993 and the definition of a disinterested person under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Members of the Committee are not eligible to participate In the Plan. No one shall become a member of the Committee who has received a grant or award under the Plan within one year prior to the date of his or her proposed appointment to the Committee. The Committee shall have full and final authority in its discretion to interpret conclusively the provisions of the Plan as it may deem advisable; to adopt such rules and regulations for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan. The Committee shall meet once each fiscal year, and at such additional times as it may determine or at the request of the chief executive officer of the Company, to designate the eligible employees, if any, to be granted awards under the Plan and the type and amount of such awards and the time when awards will be granted. No such designation by the Committee shall be effective as a grant of an award under the Plan until approved by the Board of Directors of the Company; provided, however, that the Board of Directors may empower the Committee to grant such awards without approval by the Board of Directors. All awards granted under the Plan shall be on the terms and subject to the conditions hereinafter provided. 1.3 Eligible Participants Key employees, including officers of the Company and its subsidiaries, shall be eligible to participate in the Plan. Any employee receiving an award under this Plan is hereinafter referred to as a "Participant". Directors who are not employees of the Company or its subsidiaries shall not be eligible to participate in the Plan. 1.4 Grants Under the Plan Grants under the Plan may be in the form of Incentive Stock Options (as described in Article II), Executive Stock Options (as described in Article III), Restricted Stock (as described in Article IV, Stock Appreciation Rights (as described in Article V), Performance Units (as described in Article VI) or any combination thereof. 1.5 Other Compensation Programs The adoption of the Plan contemplates the continuation of any existing incentive compensation plan of the Company and in no way limits or is limited by the operation, administration or amendment of any such plan. The existence and terms of the Plan shall not limit the authority of the Board of Directors in compensating employees of the Company in such other forms and amounts as it may determine from time to time. 1.6 Limitations on Grants The aggregate number of shares of Common Stock and restricted stock, including but not limited to shares reserved for issuance pursuant to the exercise of options, which may be granted or issued under the terms of the Plan may not exceed 7,500,000 shares. The maximum number of shares of Common Stock chat may be subject to grants under the Plan to a Participant may not exceed 100,000 shares of Common Stock per fiscal year of the Company. Whenever any outstanding grant or portion thereof expires, is canceled or forfeited or is otherwise terminated for any reason without having been exercised, vested or payment having been made in respect of the entire grant, the Common Stock allocable to the expired, forfeited, canceled or otherwise terminated portion of the grant may again be the subject of further grants hereunder. Notwithstanding the foregoing, the number of shares of Common Stock available for grunts at any time under the Plan shall be reduced to such lesser amount as may be required pursuant to the methods of calculation necessary so that the exemptions provided pursuant to Rule 16b-3 under the Exchange Act will continue to be available for transactions involving all current and future grants. In addition, during the period that any grants remain outstanding under the Plan, the Committee may make good faith adjustments with respect to the number of shares of Common Stock attributable to such grants for purposes of calculating the maximum number of shares of Common Stock available for the granting of future grants under the Plan, provided chat following such adjustments the exemptions provided pursuant to Rule 16b-3 under the Exchange Act will continue to be available for transactions involving all current and future grants. 2 II. INCENTIVE STOCK OPTIONS 2.1 Terms and Conditions Subject to the following provisions in this Article II, all Incentive Stock Options shall be in such form and upon such terms and conditions as the Committee, in its discretion, may from time to time determine. 2.2 Qualified Stock Options Incentive Stock Options shall, at the time of grant, be in such form and upon such terms and conditions as may be required in order that such options will constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 2.3 Option Price The option price per share shall be at least the Fair Market Value (as defined in Section 7.13 of this Plan) of the Common Stock on the date the Incentive Stock Option is granted. 2.4 Term of Option The term of an Incentive Stock Option shall not exceed ten (10) years from the date of grant. 2.5 Payment Payment for shares for which an Incentive Stock Option is exercised shall be made in such manner and at such time or times as shall be provided by the Committee at the time of grant, in cash, in Common Stock, including Restricted Stock, through the surrender of stock options or stock appreciation rights, or any combination thereof. 2.6 Exercise of Option Incentive Stock Options shall be exercisable in whole or in part after completion of such periods of service as the Committee shall specify when granting the options; provided however, that in the absence of any Committee specification to the contrary, and subject to Sections 2.7 and 2.8 of this Article II, fifty percent (50%) of the shares subject to the Incentive Stock Option shall have been earned and the Incentive Stock Option shall become exercisable with respect to such shares on the third anniversary of the date of grant of the Incentive Stock Option. On each of the next two anniversaries of the date of the grant, an additional twenty-five percent (25%) of the shares subject to the Incentive Stock Option shall have been earned and the Incentive Stock Option shall become exercisable with respect to such shares. In no event, however, and notwithstanding Sections 2.7 and 2.8 of this Article II, shall an Incentive Stock Option be exercised after the expiration of ten (10) years from the date of grant. 3 2.7 Termination of Employment A Participant's Incentive Stock Options shall expire three months after the termination of the Participant's employment for any reason other than death, disability (as determined by the Committee) or retirement (under the applicable retirement program of the Company or one of its subsidiaries or as otherwise determined by the Committee), and shall be limited to the shares of Common Stock which could have been purchased by the Participant at the date of termination of employment. 2.8 Termination of Employment by Reason of Death, Disability or Retirement Upon the termination of a Participant's employment by reason of death, disability, or normal retirement within the meaning of the applicable retirement plan or thereafter, Incentive Stock Options held at the termination date by such Participant shall be exercisable, irrespective of whether the options were fully exercisable in accordance with Section 2.6 on that date. The Participant's Incentive Stock Options shall expire unless exercised within one year from the date of such termination. In the case of termination of a Participant's employment (1) with at least 20 years of employment or (2) by reason of early retirement within the meaning of the applicable retirement plan, Incentive Stock Options which may be exercised shall be limited to the shares which could have been purchased by the Participant at the date of such early retirement, except that the Committee, in its discretion, may waive the vesting requirements of Section 2.6. The Participant's Incentive Stock Options shall expire unless exercised within one year from the date of such termination. The Committee may, at any time on or before the termination of the exercise period of the Participant's Incentive Stock Options, extend the exercise period if the Participant's employment is terminated for a reason specified in Section 2.8. If so extended, the term of the exercise period shall expire on the date specified by the Committee, which date shall be no later than the date which is sixty (60) months following the date of the Participant's termination of employment. If such extension could adversely affect the Participant's federal income tax treatment of the Incentive Stock Option at the time of extension or exercise, the extension shall only be made with the consent of the Participant. In no event may the term of an Incentive Stock Option, including extensions, exceed the term set forth in Section 2.4. 2.9 Special Rule for 10 Percent Shareholders If, at the time an Incentive Stock Option is granted, a Participant owns stock representing more than 10 percent of the total combined voting power of all classes of stock of the Company or any of its subsidiaries, then the terms of the Incentive Stock Option shall specify that the option price shall at the time of grant be at least 110 percent of the Fair Market Value of the stock subject to the option and such option shall not be exercisable after the expiration of five (5) years from the date such option is granted. 2.10 Notice of Disposition If a Participant makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of a share or shares of Common Stock issued to such Participant pursuant to the exercise of an Incentive Stock Option within the two-year period commencing on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such share or shares to the Participant pursuant to such exercise, the Participant shall, within ten 4 (10) days of such disposition, notify the Company thereof by delivery of written notice to the Company as its principal executive office. 2.11 Acceleration Event Notwithstanding anything herein to the contrary, if an Acceleration Event (as defined in Section 7.14) has occurred, then all of the shares subject to the Incentive Stock Option shall immediately become earned and the Incentive Stock Option shall become exercisable with respect to such shares on the date such Acceleration Event occurred. III. EXECUTIVE STOCK OPTIONS 3.1 Terms and Conditions of Options Subject to the following provisions, all Executive Stock Options shall be in such form and upon such terms and conditions as the Committee, in its discretion, may from time to time determine. 3.2 Nonqualified Stock Options The terms of an Executive Stock Option shall, at the time of grant, provide that it will nor be treated as an incentive stock option within the meaning of Section 422 of the Code. 3.3 Option Price The option price per share shall be at least the Fair Market Value of the Common Stock on the date the Executive Stock Option is granted. 3.4 Term of Option The term of an Executive Stock Option shall not exceed ten (10) years from the date of grant. 3.5 Payment Payment for shares for which an Executive Stock Option is exercised shall be made in such manner and at such time or times as shall be provided by the Committee at the time of the grant, in cash, in Common Stock, including Restricted Stock, through the surrender of stock options or Stock Appreciation Rights, or any combination thereof, or other contingent grants which the Committee determines are consistent with the Plan's purposes and applicable law. 3.6 Exercise of Option Executive Stock Options shall be exercisable in whole or in part after completion of such periods of service as the Committee shall specify when granting the options; provided however, that in the absence of any Committee specification to the contrary, and subject to Sections 3.7 and 3.8 of this Article III, fifty percent (50%) of the shares subject to the Executive Stock Option shall have been earned 5 and the Executive Stock Option shall become exercisable with respect to such shares on the third anniversary of the date of grant of the Executive Stock Option. On each of the next two anniversaries of the date of the grant, an additional twenty-five percent (25%) of the shares subject to the Executive Stock Option shall have been earned and the Executive Stock Option shall become exercisable with respect to such shares. In no event, however, and notwithstanding Sections 3.7 and 3.8, shall an Executive Stock be exercised after the expiration of ten years (10) from the date of grant. 3.7 Termination of Employment A Participant's Executive Stock Options shall expire three months after the termination of the Participant's employment for any reason other than death, disability (as determined by the Committee) or retirement (under the applicable retirement program of the Company or one of its subsidiaries or as otherwise determined by the Committee), and shall be limited to the shares which could have been purchased by the Participant at the date of termination of employment. 3.8 Termination of Employment by Reason of Death, Disability or Retirement Upon the termination of a Participant's employment by reason of death, disability, or normal retirement within the meaning of the applicable retirement plan or thereafter, Executive Stock Options held at the termination date by such Participant shall be exercisable, irrespective of whether the options were fully exercisable in accordance with Section 3.6 on that date. The Participant's Executive Stock Options shall expire unless exercised within one year from the date of such termination. In the case of termination of a Participant's employment by reason of early retirement within the meaning of the applicable retirement plan, Executive Stock Options may be fully exercised, at any time, or from time to time, within one year from the date of early retirement, subject to limitations placed on the term of any Option by Section 3.4. The Committee may, at any time on or before the termination of the exercise period of the Participant's Executive Stock Options, extend the exercise period if the Participant's employment is terminated for a reason specified in this Section 3.8. If so extended, the term of the exercise period shall expire on the date specified by the Committee, which date shall be no later than the date which is sixty (60) months following the date of the Participant's termination of employment. In no event may the term of an Executive Stock Option, including extensions, exceed the term set forth in Section 3.4. 3.9 Acceleration Event Notwithstanding anything herein to the contrary, if an Acceleration Event has occurred, then all of the shares subject to the Executive Stock Option shall immediately become earned and the Executive Stock Option shall become exercisable with respect to such shares on the date such Acceleration Event occurred. 3.10 Supplemental Payment on Exercise of Executive Stock Options The Committee may, at any time on or before the exercise of any Executive Stock Option, provide for a supplemental payment by the Company or its subsidiaries to the Participant upon the 6 exercise of any Executive Stock Option. The amount of any such supplemental payment shall be determined by the Committee us its discretion, but shall not be greater than the lesser of: (a) the difference between the option price (as established pursuant to Section 3.3, subject to adjustment, if any, pursuant to Section 7.2) and the Fair Market Value, at the time of exercise of the option, of the shares of Common Stock acquired (the "Spread"); or (b) the Spread times a fraction the numerator of which is the maximum federal individual income tax rate payable by a Participant optionee on such Spread (at the date of exercise) and the denominator of which is 50 percent. Such supplemental payment shall be made in cash. IV. RESTRICTED STOCK GRANTS 4.1 Restrictions Restricted Stock may be granted to a Participant by the Committee under a Restricted Stock Agreement. Such agreement shall specify the number of shares granted and the conditions and terms of the restrictions. Such restrictions shall lapse for all or part of the shares granted upon satisfaction of specified Management Objectives (as defined below) within a specified Performance Period. Restricted Stock, with restrictions noted on the face of the certificates, shall be issued in the name of the Participant and deposited with the Company or its designee during the Performance Period. 4.2 Management Objectives Restricted Stock shall be deemed to have been earned by a Participant based upon achievement of Management Objectives specified by the Committee as the time of grant. Management Objectives may be the Participant's length of service and/or specified levels of earnings, return on assets, overhead ratio, earnings per share, leverage ratio, loan loss reserve ratio, or return on equity achieved by the Company or any subsidiary, department or function of the Company in which the Participant is employed. Management Objectives relating to any particular grant of Restricted Stock need not be the same as those relating to any other grant, whether made at the same or a different time. 4.3 Performance Period The Performance Period with respect to Restricted Stock shall be the period of time within which the Management Objectives relating to that grant are to be achieved. The Committee shall determine the length of the Performance Period, which shall commence on the date of grant of Restricted Stock, and shall be at least two years. 44 Earning of Restricted Stock The Committee shall, promptly after the date on which the necessary financial or other information for a particular Performance Period becomes available, determine the extent to which the Restricted Stock to which such Performance Period relates have been earned through Participant's achievement of the relevant Management Objectives. 7 4.5 Rights as Shareholder Except as otherwise provided in this Article IV, the Participant shall have all rights as a shareholder, including dividend rights and voting rights. During the Performance Period and subject to the restrictions set forth In this Article IV, a Participant has the right to receive the dividends paid on the Common Stock at the same time and in the same amount as other shareholders of the Company; provided, however, that any dividends payable on Restricted Stock subject to Management Objectives other than length of service shall be accumulated and become payable when the Restricted Stock on which such dividends were paid shall be deemed to have been earned in accordance with Section 4.4. If the Committee determines that the Management Objectives other than length of service have not been met within the Performance Period, dividends on any such unearned Restricted Stock shall revert to the Company. 4.6 Termination of Employment If any Participant's employment has terminated prior to the end of the Performance Period and the Committee has determined that applicable Management Objectives have been achieved, the extent to which Restricted Stock shall be deemed to have been earned shall be determined by multiplying the amount of the Restricted Stock which would have been earned had the Participant's employment not been terminated by a fraction, the numerator of which is the number of full calendar months such Participant was employed during the Performance Period and the denominator of which is the total number of full calendar months in the Performance Period; provided, however, that the Committee, in its discretion, may reduce or eliminate the amount of the Restricted Stock that shall be deemed to have been earned. 4.7 Acceleration Event Notwithstanding anything herein to the contrary, if an Acceleration Event has occurred, then all restrictions on the Restricted Stock shall lapse on the date such Acceleration Event occurred. 4.8 Supplemental Payment Upon Change of Control If a Change in Control occurs, at any time on or before the conclusion of a specified Performance Period as to which Management Objectives have not yet been satisfied, notwithstanding anything herein to the contrary, a supplemental payment by the Company or its subsidiaries to the Participant shall be made in connection with the lapse of restrictions provided for in Section 4.7. The amount of any such supplemental payment shall be determined by the Committee in its discretion, but shall not be greater than the Fair Market Value, at the time of satisfaction of the Management Objectives of the shares of Common Stock acquired (the "Spread"), multiplied times a fraction the numerator of which is the maximum federal individual income tax rate payable by a Participant optionee on such Spread (at the date of exercise) and the denominator of which is 50 percent. Such supplemental payment shall be made in cash. V. STOCK APPRECIATION RIGHTS 5.1 In General The Committee may, in its discretion, either alone or in connection with the grant of an Incentive Stock Option or an Executive Stock Option (collectively referred to in this Article V as an option) grant to Participants Stock Appreciation Rights, the terms and conditions of which shall be set forth in a Stock Appreciation Rights Agreement. If granted in connection with an Option, Stock Appreciation Rights shall cover the same number of shares of Common Stock covered by the Option (or such lesser number of shares of Common Stock as the Committee may determine) and shall, except as provided in this Article V, be subject to the same terms and conditions as the related Option. 5.2 Time of Grant A Stock Appreciation Right may be granted: (a) at any time if unrelated to an Option, or (b) if related to an Option, either at the lime of grant, or at any time thereafter during the term of the Option. 8 5.3 Stock Appreciation Right Related to an Option (a) Exercise. Subject to Section 5.7, a Stock Appreciation Right granted in connection with an Option shall be exercisable at such time or times and only to the extent that the related Option is exercisable, and will not be transferable except to the extent the related Option may be transferable. A Stock Appreciation Right granted in connection with an Incentive Stock Option shall be exercisable only if the Fair Market Value of a share of the Common Stock on the date of exercise exceeds the purchase price specified in the related Incentive Stock Option Agreement. (b) Amount Payable. Upon the exercise of a Stock Appreciation Right related to an Option, the Participant shall be entitled to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of Common Stock on the day immediately preceding the date of exercise of such Stock Appreciation Right over the per share purchase price under the related Option, by (ii) the number of shares of Common Stock as to which such Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the Stock Appreciation Rights Agreement evidencing the Stock Appreciation Right at the time it is granted. (c) Treatment of Related Options and Stock Appreciation Rights Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in connection with an Option, the Option shall be canceled to the extent of the number of shares of Common Stock as to which the Stock Appreciation Right is exercised, and upon the exercise of an Option granted in connection with a Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the extent of the number of shares of Common Stock as to which the Option is exercised or surrendered. 5.4 Stock Appreciation Rights Unrelated to an Option (a) Terms and Conditions. The Committee may grant to Participants Stock Appreciation Rights unrelated to Options. Stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability (subject to Section 5.7), vesting and duration as the Committee shall determine, but in no event shall they have a term of greater than ten (10) years. Upon the exercise of a Stock Appreciation Right unrelated to an Option, the Participant shall be entitled to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of Common Stock on the day immediately preceding the date of exercise of such Stock Appreciation Right over the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right was granted, by (ii) the number of shares of Common Stock as to which the Stock Appreciation Right is being exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the Stock Appreciation Rights Agreement evidencing the Stock Appreciation Right at the time it is granted. (b) Termination of Employment. Stock Appreciation Rights unrelated to Options shall expire three months after the termination of the Participant's employment for any reason other than death, disability (as determined by the Committee) or retirement (under the applicable retirement program of the Company or one of its subsidiaries or as otherwise determined by the Committee), and shall be 9 limited to the Stock Appreciation Rights which could have been exercised by the Participant at the date of termination of employment; provided, however, that the Committee, in its discretion, may, within sixty (60) days from the date of such termination, reduce or eliminate the amount of the Stock Appreciation Rights that shall be deemed to have been earned. (c) Termination of Employment by Reason of Death, Disability or Retirement. Upon the termination of a Participant's employment by reason of death, disability, or normal retirement within the meaning of the applicable retirement plan or thereafter, Stock Appreciation Rights held at the termination date by such Participant shall be exercisable, irrespective of whether the Stock Appreciation Rights were fully exercisable in accordance with the Stock Appreciation Rights Agreement on that date. The Participant's Stock Appreciation Rights shall expire unless exercised within one (1) year from the date of such termination. In the case of termination of a Participant's employment by reason of early retirement within the meaning of the applicable retirement plan, Stock Appreciation Rights which may be exercised shall be limited to the Stock Appreciation Rights which could have been exercised by the Participant at the date of such early retirement, except that the Committee, in its discretion, may waive the vesting requirements of such Stock Appreciation Rights. The Participant's Stock Appreciation Rights shall expire unless exercised within one (1) year from the date of such termination. The Committee may, at any time on or before the termination of the exercise period of the Participant's Stock Appreciation Rights, extend the exercise period if the Participant's employment is terminated for a reason specified in this Section 5.4(c). If so extended, the term of the exercise period shall expire on the date specified by the Committee, which date shall be no later than the daze which is sixty (60) months following the daze of the Participant's termination of employment. In no event may the term of a Stock Appreciation Right, including extensions, exceed the term of the Stock Appreciation Right established by the Committee at the time of the grant. 5.5 Method of Exercise Stock Appreciation Rights shall be exercised by a Participant only by a written notice delivered to the Committee (in care of the Secretary of the Company) at the Company's principal executive office, specifying the number of shares of Common Stock with respect to which the Stock Appreciation Right is being exercised. If requested by the Committee, the Participant shall deliver the Stock Appreciation Rights Agreement evidencing any related Option to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Stock Appreciation Rights Agreement to the Participant. 5.6 Form of Payment Payment of the amount determined under Sections 5.3(b) or 5.4(a) may be made in the discretion of the Committee, solely in whole shares of Common Stock in a number determined at their Fair Market Value on the day immediately preceding the date of exercise of the Stock Appreciation Right, or solely in cash, or in a combination of cash and Common Stock. If the Committee determines to make full payment in Common Stock and the amount payable results in a fractional share of Common Stock, payment for the fractional share of Common Stock will be made in cash. Notwithstanding the foregoing, 10 no payment in the form of cash may be made upon the exercise of a Stock Appreciation Right to an officer of the Company or of its subsidiaries who is subject to liability under Section 16(b) of the Exchange Act, unless the exercise of such Stock Appreciation Right is made either: (a) during the period beginning on the third business day and ending on the twelfth business day following the date of release for publication of the Company's quarterly or annual statements of earnings or (b) pursuant to an irrevocable election to receive cash made at least six months prior to the exercise of such Stock Appreciation Right. 5.7 Restrictions No Stock Appreciation Right may be exercised before the date six (6) months after the date it is granted, except that this restriction shall not apply in the event of a death or disability of the Participant occurring before the expiration of the six-month period. 5.8 Acceleration Event Notwithstanding anything contained in this Plan to the contraty, in the event of an Acceleration Event, subject to Section 5.7, all Stock Appreciation Rights shall become immediately and fully exercisable. VI. PERFORMANCE UNITS 6.1 Terms and Conditions of Grams One Performance Unit shall have a cash value equal to the Fair Market Value of one share of Common Stock. The number of Performance Units to which the Participant is entitled is based upon achievement of certain Management Objectives (as defined in Section 6.2) over a Performance Period (as defined in Section 6.3) as determined by the Committee at the time of grant and as set forth in a Performance Unit Agreement. The Performance Unit Agreement shall specify the number of Performance Units granted and the Management Objectives and applicable Performance Period. 6.2 Management Objectives Performance Units shall be deemed to have been earned by a Participant based upon fulfillment of Management Objectives specified by the Committee at the time of grant. The Management Objectives may be the Participant's length of service and/or specified levels of earnings, return on assets, leverage ratio, loan loss reserve ratio, earnings per share, overhead ratio or return on equity achieved by the Company or any subsidiary, department or function of the Company in which the Participant is employed. Management Objectives relating to any particular grant of a Restricted Stock Grant need not be the same as those relating to any other grant, whether made at the same or a different time. 6.3 Performance Period The Performance Period with respect to any Performance Unit shall be the period of time within which the Management Objectives relating to that grant are to be achieved (which shall be no less than 11 twelve (12) months). The Committee shall determine the length of the Performance Period, which shall commence on the date of grant of the Performance Units. 6.4 Earning of Grant The Committee shall, after the date on which the necessary financial or other information for a particular Performance Period becomes available, determine the extent to which the Management Objectives have been achieved prior to the expiration of the Performance Period and, if such Management Objectives have been achieved, the restrictions on such Performance Units may, in the discretion of the Committee, be deemed to have been satisfied prior to the expiration of the Performance Period. Upon the expiration of the Performance Period, if the Committee determines that the Management Objectives have not been met, the Performance Units shall revert to the Company. 6.5 Rights as Shareholder During the Performance Period and subject to the restrictions set forth this Article VI, a Participant may have the right, as determined by the Committee at the time of the grant, to receive an amount equal to the dividends paid on the Common Stock at the same time and in the same amount as other shareholders of the Company (by assuming that, for purposes of such dividend, each Performance Unit is equivalent to one share of Common Stock). 6.6 Termination of Employment If any Participant's employment has terminated prior to the end of the Performance Period, and the Committee has determined that applicable Management Objectives have been met, the extent to which Performance Units shall be deemed to have been achieved shall be determined by multiplying the amount of the Performance Units which would have been earned had the Participant's employment not been terminated by a fraction, the numerator of which is the number of full calendar months such Participant was employed during the Performance Period and the denominator of which is the total number of full calendar months in the Performance Period provided, however, the Committee, in its discretion, may, within sixty (60) days from the date of such terminatiion, reduce or eliminate the amount of the Performance Units which shall be deemed to have been earned. 6.7 Form of Payment In accordance with Section 6.4, upon the expiration of the Performance Period and the determination by the Committee that the Management Objectives established by the Committee at the time of grant of the Performance Units have been met, the Company shall distribute cash to the Participant in an amount equal to the number of Performance Units multiplied by the Fair Market Value of the Common Stock as of the date of distribution. 6.8 Acceleration Event Notwithstanding anything herein to the contrary, if an Acceleration Event has occurred, then all restrictions on the Performance Units shall be deemed to have been satisfied as of the date of the Acceleration Event, and such Performance Units shall become payable on the date such Acceleration Event occurred. 12 VII. ADDITIONAL PROVISIONS 7.1 General Restrictions Each grant under the Plan shall be subject to the requirement that if the Committee shall determine, at any time, that: (a) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or federal law, or (b) the consent or approval of any government regulatory body, or (c) an agreement by the Participant with respect to the disposition of shares of Common Stock, is necessary or desirable as a condition of, or in connection with, the granting or the issuance or purchase of shares of Common Stock thereunder, such grant may not be consummated in whole or in part unless such listing, registration qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. 7.2 Adjustments for Changes in Capitalization In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, rights offer, liquidation, dissolution, merger, consolidation, spin-off or sale of assets, or any other change in or affecting the corporate structure or capitalization of the Company, the Board of Directors shall make such adjustments as the Committee may recommend, and as the Board of Directors in its discretion may deem appropriate, in the number and kind of shares authorized by the Plan, in the number, option price or kind of shares covered by the grants and in any outstanding grants under the Plan in order to prevent substantial dilution or enlargement thereof. 7.3 Amendments The Board of Directors may discontinue the Plan at any time, and may amend it from time to time, but no amendment, without approval by shareholders, may (a) increase the total number of shares which may be issued under the Plan, except as provided in Section 7.2 hereof, (b) change the class of employees of the Company to whom grants may be granted, or (c) cause the Plan to no longer comply with Rule 16b-3 of the Exchange Act or any other federal or state statutory or regulatory requirements. 7.4 Modification or Substitution Subject to the terms of the Plan, the Committee may modify outstanding grants under the Plan or accept the surrender of outstanding grants and make new grants in substitution for them. Notwithstanding the foregoing, no modification of any grant shall adversely alter or impair any rights or obligations of the Participant without the Participant's consent. 7.3 Cancellation of Grants Any grant under the Plan may be canceled at any time with the consent of the Participant, and a new grant may be provided to such Participant in lieu thereof. 13 7.6 Shares Subject so the Plan Shares distributed pursuant to the Plan shall be made available from authorized but unissued shares or from shares purchased or otherwise acquired by the Company for use in the Plan, as shall be determined time to time by the Committee. 7.7 Rights of a Shareholder Participants under the Plan, unless otherwise provided by the Plan, shall have no rights as shareholders by reason thereof unless and until certificates for shares of Common Stock are issued to them. 7.8 Withholding (a) The Company shall have the right to deduct from any distribution of cash or Common Stock today Participant an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld (the "Withholding Taxes") with respect to any grant under the Plan. If a Participant is to experience a taxable event in connection with the receipt of cash or shares of Common Stock pursuant to an Option exercise or payment of a grant (a "Taxable Event"), the Participant shall pay the Withholding Taxes to the Company prior to the issuance of such shares of Common Stock. In satisfaction of the obligation to pay Withholding Taxes to the Company, the Participant may make a written election (the "Tax Election"), which may be accepted or rejected in the discretion of the Committee, to have withheld a portion of the cash or shares of Common Stock then issuable to the Participant having an aggregate Fair Market Value on the day immediately preceding the date of such issuance equal to the Withholding Taxes, provided that in respect of a Participant who may be subject to liability under Section 16(b) of the Exchange Act either: (i) in the case of a Taxable Event involving an Option, grant of Restricted Stock, or Stock Appreciation Rights (A) the Tax Election is made at least six (6) months prior so the date of the Taxable Event and (B) the Tax Election is irrevocable with respect to all Taxable Events of a similar nature occurring prior to the expiration of six (6) months following a revocation of the Tax Election; or (ii) in the case of the exercise of an Option (A) the Participant makes the Tax Election at least six (6) months after the date the Option was granted, (B) the Option is exercised during the ten (10) day period beginning on the third business day and ending on the twelfth business day following the release for publication of the Company's quarterly or annual statement of sales and earnings (the "Window Period") and (C) the Tax Election is made during the Window Period in which the related Option is exercised or prior so such Window Period and subsequent to the immediately preceding Window Period; or (iii) in the case of a Taxable Event relating so the payment of any award (A) the Participant makes the Tax Election at least six (6) months after the date the Restricted Stock or Stock Appreciation Rights were granted and (B) the Tax Election is made (x) in the case of a Taxable Event occurring within a Window Period, during the Window Period in which the Taxable Event occurs, or (y) in the case of a Taxable Event not occurring within a Window Period, during the Window Period immediately preceding the Taxable Event relating so the Restricted Stock or Stock Appreciation rights. Notwithstanding the foregoing, the Committee may, by the adoption of rules or otherwise, (1) modify the provisions of this Section 7.8 as may be necessary to ensure that the Tax Elections will be exempt transactions under Section 16(b) of the Exchange Act, and (2) permit Tax Elections so be made at such other times and subject to such other conditions as the Committee determines will constitute exempt transactions under Section 16(b) of the Exchange Act. 14 (b) The Committee shall have the authority, at the time of grant of an Option, Restricted Stock, Stock Appreciation Right or Performance Unit under the Plan or at any time thereafter, to grant tax bonuses to designated Participants to be paid upon their exercise of Options or payment in respect of Restricted Stock, Stock Appreciation Rights or Performance Units granted hereunder. The amount of any such payments shall be determined by the Committee and shall not be in excess of the amount determined pursuant to Section 3.10 of the Plan (except that, with respect to Restricted Stock, Stock Appreciation Rights or Performance Units, the "Spread," for purposes of applying Section 3.10, shall be the difference between the amount paid for the Restricted Stock, Stock Appreciation Right or Performance Unit, as applicable, and the Fair Market Value of the Common Stock (or cash) distributed). The Committee shall have full authority in its absolute discretion so determine the amount of any such tax bonus (subject so the limits of Section 3.10) and the terms and conditions affecting the vesting and payment thereof. 7.9 Nonassignability Except as expressly provided in the Plan, no grant shall be transferable except by will, the laws of descent and distribution or a qualified domestic relations order ("QDRO") as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder. During the lifetime of the Participant, except as expressly provided in the Plan, grants under the Plan shall be exercisable only by such Participant or by the guardian or legal representative of such Participant or pursuant to a QDRO. 7.10 Nonuniform Determination Determinations by the Committee under the Plan (including, without limitation, determinations of the persons so receive grants, the form, amount and timing of such grants, and the terms and provisions of such grants and the agreements evidencing the same) need not be uniform and may be made by it selectively among persons who receive, or are eligible so receive, grants under the Plan, whether or not such persons are similarly situated. 7.11 No Guarantee of Employment Grants under the Plan shall not constitute an assurance of continued employment for any period. 7.12 Effective Date; Duration The Plan shall become effective as of April 20, 1994, subject so approval by shareholders at the Company's Annual Meeting of Shareholders. No grant may be given under the Plan after January 17, 1999, but grants theretofore granted may extend beyond such date. 7.13 Fair Market Value The phrase Fair Market Value on any date means the average of the high and low sales prices of the shares of Common Stock on such date on the principal national securities exchange on which such shares of Common Stock are listed or admitted to trading. If the shares of Common Stock on such date are not listed or admitted to trading, the Fair Market Value shall be the value established by the Board in good faith and, in the case of an Incentive Stock Option, in accordance with Section 422 of the Code. 15 7.14 Acceleration Event Notwithstanding anything herein to the contrary, if a Change in Control of the Company occurs or if the Committee determines in its sole discretion that an Acceleration Evens has occurred, then all Incentive Stock Options, Executive Stock Options, and Stock Appreciation Rights shall become fully exercisable and all restrictions on the Restricted Stock Grants and Performance Units shall expire as of the date such Change in Control occurred or the Committee determines than an Acceleration Event has occurred. For purposes of the Plan, an Acceleration Event includes, but is not limited to, any Change in Control of the Company, which shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: (i) any person, as defined in Section 3(a)(9) of the Securities and Exchange Act of 1934 ("Exchange Act"), as such term is modified in Sections 13(d) and 14(d) of the Exchange Act (other than (A) any employee plan established by the Company, (B) the Company or any of its affiliates (as defined in Rule 12b-2 promulgated under the Exchange Act), (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company) (a "Person"), is or becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company) representing 25% or more of the combined voting power of the Company's then outstanding voting securities; (ii) during any period of up to two consecutive years (not including any period prior to the effective date of this amendment) individuals who, at the beginning of such period, constitute the Board cease for any reason to constitute at least a majority thereof, provided that any person who becomes a director subsequent to the beginning of such period and whose nomination for election is approved by at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved (other than a director (A) whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act or (B) who was designated by a Person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii) or (iv) hereof) shall be deemed a director as of the beginning of such period; (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation (other than (A) 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 or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of any Corporation, at least 51% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the beneficial owner (as defined in clause (i) above), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company representing 25% or more of the combined voting power of the Company's then outstanding voting securities); or (iv) the stockholders 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 of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 75% of the combined voting power of the voting securities of which are owned by persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. 7.15 Potential Change of Control A "Potential Change in Control" shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: (i) the Company enters into [a definitive written] agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or (iii) any Person becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company's then outstanding securities. 7.16 Securities Laws Today All references to provisions of the federal securities laws are to such provisions as in effect on November 16, 1994 without regard to any subsequent amendments of, changes to or revocation of such provisions. 16