10-Q: Quarterly report pursuant to Section 13 or 15(d)

OMEGA HEALTHCARE INVESTORS, INC.
2000 STOCK INCENTIVE PLAN

(AMENDED AS OF JANUARY 1, 2001)






OMEGA HEALTHCARE INVESTORS, INC.

2000 STOCK INCENTIVE PLAN

TABLE OF CONTENTS


SECTION 1. DEFINITIONS........................................................1

1.1 DEFINITIONS...........................................................1

SECTION 2 THE STOCK INCENTIVE PLAN............................................5

2.1 PURPOSE OF THE PLAN...................................................5
2.2 STOCK SUBJECT TO THE PLAN.............................................5
2.3 ADMINISTRATION OF THE PLAN............................................5
2.4 ELIGIBILITY AND LIMITS................................................5
2.5 NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS.............................5

SECTION 3 TERMS OF STOCK INCENTIVES...........................................6

3.1 TERMS AND CONDITIONS OF ALL STOCK INCENTIVES..........................6
3.2 TERMS AND CONDITIONS OF OPTIONS.......................................7
a. Option Price..........................................................7
b. Option Term...........................................................7
c. Payment...............................................................8
d. Conditions to the Exercise of an Option...............................8
e. Termination of Incentive Stock Option.................................8
f. Special Provisions for Certain Substitute Options.....................9
3.3 TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.....................9
a. Settlement............................................................9
b. Conditions to Exercise................................................9
3.4 TERMS AND CONDITIONS OF STOCK AWARDS..................................9
3.5 TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS...................10
a. Payment..............................................................10
b. Conditions To Payment................................................10
3.6 TERMS AND CONDITIONS OF PERFORMANCE UNIT AWARDS......................10
a. Payment..............................................................10
b. Conditions To Payment................................................10
3.7 TERMS AND CONDITIONS OF PHANTOM SHARES...............................11
a. Payment..............................................................11
b. Conditions to Payment................................................11
3.8 TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT...................11

SECTION 4 RESTRICTIONS ON STOCK..............................................11

4.1 ESCROW OF SHARES.....................................................11
4.2 RESTRICTIONS ON TRANSFER.............................................12

SECTION 5 GENERAL PROVISIONS.................................................12

5.1 WITHHOLDING..........................................................12
5.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.......................12
5.3 CASH AWARDS..........................................................13
5.4 COMPLIANCE WITH CODE.................................................13
5.5 RIGHT TO TERMINATE EMPLOYMENT........................................13
5.6 NON-ALIENATION OF BENEFITS...........................................14
5.7 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS.................14
5.8 LISTING AND LEGAL COMPLIANCE.........................................14
5.9 TERMINATION AND AMENDMENT OF THE PLAN................................14
5.10 STOCKHOLDER APPROVAL.................................................14
5.11 CHOICE OF LAW........................................................15
5.12 EFFECTIVE DATE OF PLAN...............................................15


OMEGA HEALTHCARE INVESTORS, INC.

2000 STOCK INCENTIVE PLAN

SECTION 1. DEFINITIONS

1.1 Definitions. Whenever used herein, the masculine pronoun will be deemed
to include the feminine, and the singular to include the plural, unless the
context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:

(a) "Affiliate" means:

(1) Any Subsidiary or Parent,

(2) An entity that directly or through one or more intermediaries
controls, is controlled by, or is under common control with the Company, as
determined by the Company, or

(3) Any entity in which the Company has such a significant interest
that the Company determines it should be deemed an "Affiliate", as
determined in the sole discretion of the Company.

(b) "Board of Directors" means the board of directors of the Company.

(c) "Code" means the Internal Revenue Code of 1986, as amended.

(d) "Committee" means the Compensation Committee of the Board of Directors.

(e) "Company" means Omega Healthcare Investors, Inc., a Maryland
corporation.

(f) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of the Company for
the Participant. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or, if the determination of Disability relates to
an Incentive Stock Option, Disability means that condition described in Code
Section 22(e)(3), as amended from time to time. In the event of a dispute, the
determination of Disability will be made by the Committee and will be supported
by advice of a physician competent in the area to which such Disability relates.

(g) "Dividend Equivalent Rights" means certain rights to receive cash
payments as described in Section 3.5.

(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.

(i) "Fair Market Value" with regard to a date means:

(1) the price at which Stock shall have been sold on that date or the
last trading date prior to that date as reported by the national securities
exchange selected by the Committee on which the shares of Stock are then
actively traded or, if applicable, as reported by the NASDAQ Stock Market.

(2) if such market information is not published on a regular basis,
the price of Stock in the over-the-counter market on that date or the last
business day prior to that date as reported by the NASDAQ Stock Market or,
if not so reported, by a generally accepted reporting service.

(3) if Stock is not publicly traded, as determined in good faith by
the Committee with due consideration being given to (i) the most recent
independent appraisal of the Company, if such appraisal is not more than
twelve months old and (ii) the valuation methodology used in any such
appraisal.

For purposes of Paragraphs (1), (2), or (3) above, the Committee may use the
closing price as of the applicable date, the average of the high and low prices
as of the applicable date or for a period certain ending on such date, the price
determined at the time the transaction is processed, the tender offer price for
shares of Stock, or any other method which the Committee determines is
reasonably indicative of the fair market value.

(j) "Incentive Stock Option" means an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code.

(k) "Option" means a Non-Qualified Stock Option or an Incentive Stock
Option.

(l) "Over 10% Owner" means an individual who at the time an Incentive Stock
Option is granted owns Stock possessing more than 10% of the total combined
voting power of the Company or one of its Subsidiaries, determined by applying
the attribution rules of Code Section 424(d).

(m) "Non-Qualified Stock Option" means a stock option that is not an
Incentive Stock Option.

(n) "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, with respect to Incentive
Stock Options, at the time of the granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A Parent shall include any entity other than a
corporation to the extent permissible under Section 424(f) or regulations and
rulings thereunder.

(o) "Participant" means an individual who receives a Stock Incentive
hereunder.

(p) "Performance Goals" means the measurable performance objectives, if
any, established by the Committee for a Performance Period that are to be
achieved with respect to a Stock Incentive granted to a Participant under the
Plan. Performance Goals may be described in terms of Company-wide objectives or
in terms of objectives that are related to performance of the division,
Affiliate, department or function within the Company or an Affiliate in which
the Participant receiving the Stock Incentive is employed or on which the
Participant's efforts have the most influence. The achievement of the
Performance Goals established by the Committee for any Performance Period will
be determined without regard to the effect on such Performance Goals of any
acquisition or disposition by the Company of a trade or business, or of
substantially all of the assets of a trade or business, during the Performance
Period and without regard to any change in accounting standards by the Financial
Accounting Standards Board or any successor entity. The Performance Goals
established by the Committee for any Performance Period under the Plan will
consist of one or more of the following:

(i) earnings per share and/or growth in earnings per share in relation
to target objectives, excluding the effect of extraordinary or nonrecurring
items;

(ii) operating cash flow and/or growth in operating cash flow in
relation to target objectives;

(iii) cash available in relation to target objectives;

(iv) net income and/or growth in net income in relation to target
objectives, excluding the effect of extraordinary or nonrecurring items;

(v) revenue and/or growth in revenue in relation to target objectives;

(vi) total shareholder return (measured as the total of the
appreciation of and dividends declared on the Common Stock) in relation to
target objectives;

(vii) return on invested capital in relation to target objectives;

(viii) return on shareholder equity in relation to target objectives;

(ix) return on assets in relation to target objectives; and

(x) return on common book equity in relation to target objectives

If the Committee determines that, as a result of a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which the Company conducts its business, or any other events or
circumstances, the Performance Goals are no longer suitable, the Committee may
in its discretion modify such Performance Goals or the related minimum
acceptable level of achievement, in whole or in part, with respect to a period
as the Committee deems appropriate and equitable, except where such action would
result in the loss of the otherwise available exemption of the Stock Incentive
under Section 162(m) of the Code. In such case, the Committee will not make any
modification of the Performance Goals or minimum acceptable level of
achievement.

(q) "Performance Period" means, with respect to a Stock Incentive, a period
of time within which the Performance Goals relating to such Stock Incentive are
to be measured. The Performance Period will be established by the Committee at
the time the Stock Incentive is granted.

(r) "Performance Unit Award" refers to a performance unit award as
described in Section 3.6.

(s) "Phantom Shares" refers to the rights described in Section 3.7.

(t) "Plan" means the Omega Healthcare Investors, Inc. 2000 Stock Incentive
Plan.

(u) "Stock" means Company's common stock.

(v) "Stock Appreciation Right" means a stock appreciation right described
in Section 3.3.

(w) "Stock Award" means a stock award described in Section 3.4.

(x) "Stock Incentive Agreement" means an agreement between the Company and
a Participant or other documentation evidencing an award of a Stock Incentive.

(y) "Stock Incentive Program" means a written program established by the
Committee, pursuant to which Stock Incentives are awarded under the Plan under
uniform terms, conditions and restrictions set forth in such written program.

(z) "Stock Incentives" means, collectively, Dividend Equivalent Rights,
Incentive Stock Options, Non-Qualified Stock Options, Phantom Shares, Stock
Appreciation Rights and Stock Awards and Performance Unit Awards.

(aa) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain. A "Subsidiary" shall include any entity other than a corporation to the
extent permissible under Section 424(f) or regulations or rulings thereunder.

(bb) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company and its
Affiliates, regardless of whether severance or similar payments are made to the
Participant for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability or retirement. The
Committee will, in its absolute discretion, determine the effect of all matters
and questions relating to a Termination of Employment, including, but not by way
of limitation, the question of whether a leave of absence constitutes a
Termination of Employment.

SECTION 2 THE STOCK INCENTIVE PLAN

2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive to
officers, key employee, directors and consultants of the Company and its
Affiliates to stimulate their efforts toward the continued success of the
Company and to operate and manage the business in a manner that will provide for
the long-term growth and profitability of the Company; (b) encourage stock
ownership by officers, key employees, directors and consultants by providing
them with a means to acquire a proprietary interest in the Company, acquire
shares of Stock, or to receive compensation which is based upon appreciation in
the value of Stock; and (c) provide a means of obtaining, rewarding and
retaining officers, key personnel, directors, and consultants.

2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 5.2, three million five hundred thousand (3,500,000) shares of Stock
(the "Maximum Plan Shares") are hereby reserved exclusively for issuance upon
exercise or payment pursuant to Stock Incentives. The shares of Stock
attributable to the nonvested, unpaid, unexercised, unconverted or otherwise
unsettled portion of any Stock Incentive that is forfeited or cancelled or
expires or terminates for any reason without becoming vested, paid, exercised,
converted or otherwise settled in full will again be available for purposes of
the Plan.

2.3 Administration of The Plan. The Plan is administered by the Committee.
The Committee has full authority in its discretion to determine the officers,
key employees, directors and consultants of the Company or its Affiliates to
whom Stock Incentives will be granted and the terms and provisions of Stock
Incentives, subject to the Plan. Subject to the provisions of the Plan, the
Committee has full and conclusive authority to interpret the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the respective Stock Incentive Agreements and to make
all other determinations necessary or advisable for the proper administration of
the Plan. The Committee's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). The Committee's decisions are final and binding on all Participants.

2.4 Eligibility and Limits. Stock Incentives may be granted only to
officers, and key employees, directors, and consultants of the Company, or any
Affiliate of the Company; provided, however, that an Incentive Stock Option may
only be granted to an employee of the Company or any Subsidiary. In the case of
Incentive Stock Options, the aggregate Fair Market Value (determined as at the
date an Incentive Stock Option is granted) of stock with respect to which stock
options intended to meet the requirements of Code Section 422 become exercisable
for the first time by an individual during any calendar year under all plans of
the Company and its Subsidiaries may not exceed $100,000; provided further, that
if the limitation is exceeded, the Incentive Stock Option(s) which cause the
limitation to be exceeded will be treated as Non-Qualified Stock Option(s).

2.5 Non-Employee Director Stock Option Grants. A Non-Qualified Stock Option
with respect to 10,000 shares of stock shall be made to each non-employee
director upon his election as a non-employee director. An additional
Non-qualified Stock Option grant with respect to 1,000 shares shall be made to
each non-employee director on or after each anniversary of the initial grant.
[Amended as of January 1, 2001 to provide that the annual grant shall be made as
of January 1 of each year.] Each Stock Option granted to a non-employee director
will vest with respect to 1/3 of the grant on the first anniversary of the
grant, with respect to an additional 1/3 of the grant on the second anniversary
of the grant, and with respect to the final 1/3 on the third anniversary of the
grant; provided that a optionee will cease to vest when he or she ceases to
provide services to the Company as an Employee, Consultant, or director.

Non-employee directors are not eligible for further grants of Stock
Options.


SECTION 3 TERMS OF STOCK INCENTIVES

3.1 Terms and Conditions of All Stock Incentives.

(a) The number of shares of Stock as to which a Stock Incentive may be
granted will be determined by the Committee in its sole discretion, subject
to the provisions of Section 2.2 as to the total number of shares available
for grants under the Plan and subject to the limits on Options and Stock
Appreciation Rights in the following sentence. On such date as required by
Section 162(m) of the Code and the regulations thereunder for compensation
to be treated as qualified performance based compensation, the maximum
number of shares of Stock with respect to which Options or Stock
Appreciation Rights may be granted during any one year period to any
employee may not exceed 1,100,000. If, after grant, an Option is cancelled,
the cancelled Option shall continue to be counted against the maximum
number of shares for which options may be granted to an employee as
described in this Section 3.1. If, after grant, the exercise price of an
Option is reduced or the base amount on which a Stock Appreciation Right is
calculated is reduced, the transaction shall be treated as the cancellation
of the Option or the Stock Appreciation Right, as applicable, and the grant
of a new Option or Stock Appreciation Right, as applicable. If an Option or
Stock Appreciation Right is deemed to be cancelled as described in the
preceding sentence, the Option or Stock Appreciation Right that is deemed
to be canceled and the Option or Stock Appreciation Right that is deemed to
be granted shall both be counted against the maximum number of shares for
which Options or Stock Appreciation Rights may be granted to an employee as
described in this Section 3.1.

(b) Each Stock Incentive will either be evidenced by a Stock Incentive
Agreement in such form and containing such terms, conditions and
restrictions as the Committee may determine to be appropriate, including
without limitation, Performance Goals that must be achieved as a condition
to vesting or payment of the Stock Incentive, or be made subject to the
terms of a Stock Incentive Program, containing such terms, conditions and
restrictions as the Committee may determine to be appropriate, including
without limitation, Performance Goals that must be achieved as a condition
to vesting or payment of the Stock Incentive. Each Stock Incentive
Agreement or Stock Incentive Program is subject to the terms of the Plan
and any provisions contained in the Stock Incentive Agreement or Stock
Incentive Program that are inconsistent with the Plan are null and void.

(c) The date a Stock Incentive is granted will be the date on which
the Committee has approved the terms and conditions of the Stock Incentive
and has determined the recipient of the Stock Incentive and the number of
shares covered by the Stock Incentive, and has taken all such other actions
necessary to complete the grant of the Stock Incentive.

(d) Any Stock Incentive may be granted in connection with all or any
portion of a previously or contemporaneously granted Stock Incentive.
Exercise or vesting of a Stock Incentive granted in connection with another
Stock Incentive may result in a pro rata surrender or cancellation of any
related Stock Incentive, as specified in the applicable Stock Incentive
Agreement or Stock Incentive Program.

(e) Stock Incentives are not transferable or assignable except by will
or by the laws of descent and distribution and are exercisable, during the
Participant's lifetime, only by the Participant; or in the event of the
Disability of the Participant, by the legal representative of the
Participant; or in the event of death of the Participant, by the legal
representative of the Participant's estate or if no legal representative
has been appointed, by the successor in interest determined under the
Participant's will; provided, however, that the Committee may waive any of
the provisions of this Section or provide otherwise as to any Stock
Incentives other than Incentive Stock Options.

3.2 Terms and Conditions of Options. Each Option granted under the Plan
must be evidenced by a Stock Incentive Agreement. At the time any Option is
granted, the Committee will determine whether the Option is to be an Incentive
Stock Option described in Code Section 422 or a Non-Qualified Stock Option, and
the Option must be clearly identified as to its status as an Incentive Stock
Option or a Non-Qualified Stock Option. Incentive Stock Options may only be
granted to employees of the Company or any Subsidiary. At the time any Incentive
Stock Option granted under the Plan is exercised, the Company will be entitled
to legend the certificates representing the shares of Stock purchased pursuant
to the Option to clearly identify them as representing the shares purchased upon
the exercise of an Incentive Stock Option. An Incentive Stock Option may only be
granted within ten (10) years from the earlier of the date the Plan is adopted
or approved by the Company's stockholders.

(a) Option Price. Subject to adjustment in accordance with Section 5.2
and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share of Stock purchasable under any Option must be
as set forth in the applicable Stock Incentive Agreement, but in no event
may it be less than the Fair Market Value on the date the Option is granted
with respect to an Incentive Stock Option. With respect to each grant of an
Incentive Stock Option to a Participant who is an Over 10% Owner, the
Exercise Price may not be less than 110% of the Fair Market Value on the
date the Option is granted. [Amended as of June 30, 2000]

(b) Option Term. Any Incentive Stock Option granted to a Participant
who is not an Over 10% Owner is not exercisable after the expiration of ten
(10) years after the date the Option is granted. Any Incentive Stock Option
granted to an Over 10% Owner is not exercisable after the expiration of
five (5) years after the date the Option is granted. The term of any
Non-Qualified Stock Option must be as specified in the applicable Stock
Incentive Agreement.

(c) Payment. Payment for all shares of Stock purchased pursuant to
exercise of an Option will be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement or by amendment thereto,
including, but not limited to, cash or, if the Stock Incentive Agreement
provides:

(i) by delivery to the Company of a number of shares of Stock
which have been owned by the holder for at least six (6) months prior
to the date of exercise having an aggregate Fair Market Value of not
less than the product of the Exercise Price multiplied by the number
of shares the Participant intends to purchase upon exercise of the
Option on the date of delivery;

(ii) in a cashless exercise through a broker; or

(iii) by having a number of shares of Stock withheld, the Fair
Market Value of which as of the date of exercise is sufficient to
satisfy the Exercise Price.

In its discretion, the Committee also may authorize (at the time an Option
is granted or thereafter) Company financing to assist the Participant as to
payment of the Exercise Price on such terms as may be offered by the
Committee in its discretion. Payment must be made at the time that the
Option or any part thereof is exercised, and no shares may be issued or
delivered upon exercise of an option until full payment has been made by
the Participant. The holder of an Option, as such, has none of the rights
of a stockholder.

(d) Conditions to the Exercise of an Option. Each Option granted under
the Plan is exercisable by the Participant or any other designated person,
at such time or times, or upon the occurrence of such event or events, and
in such amounts, as the Committee specifies in the Stock Incentive
Agreement; provided, however, that subsequent to the grant of an Option,
the Committee, 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, including, without limitation, upon a Change in Control as
defined in the Stock Incentive Agreement and may permit the Participant or
any other designated person to exercise the Option, or any portion thereof,
for all or part of the remaining Option term, notwithstanding any provision
of the Stock Incentive Agreement to the contrary.

(e) Termination of Incentive Stock Option. With respect to an
Incentive Stock Option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised will expire, terminate, and become unexercisable no later than
the expiration of three (3) months after the date of Termination of
Employment; provided, however, that in the case of a holder whose
Termination of Employment is due to death or Disability, one (1) year will
be substituted for such three (3) month period; provided, further that such
time limits may be exceeded by the Committee under the terms of the grant,
in which case, the Incentive Stock Option will be a Non-Qualified Option if
it is exercised after the time limits that would otherwise apply. For
purposes of this Subsection (e), Termination of Employment of the
Participant will not be deemed to have occurred if the Participant is
employed by another corporation (or a parent or subsidiary corporation of
such other corporation) which has assumed the Incentive Stock Option of the
Participant in a transaction to which Code Section 424(a) is applicable.

(f) Special Provisions for Certain Substitute Options. Notwithstanding
anything to the contrary in this Section 3.2, any Option issued in
substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in
accordance with such Code Section and the regulations thereunder and may
contain such other terms and conditions as the Committee may prescribe to
cause such substitute Option to contain as nearly as possible the same
terms and conditions (including the applicable vesting and termination
provisions) as those contained in the previously issued option being
replaced thereby.

3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
Appreciation Right granted under the Plan must be evidenced by a Stock Incentive
Agreement. A Stock Appreciation Right entitles the Participant to receive the
excess of (1) the Fair Market Value of a specified or determinable number of
shares of the Stock at the time of payment or exercise over (2) a specified or
determinable price which, in the case of a Stock Appreciation Right granted in
connection with an Option, may not be less than the Exercise Price for that
number of shares subject to that Option. A Stock Appreciation Right granted in
connection with a Stock Incentive may only be exercised to the extent that the
related Stock Incentive has not been exercised, paid or otherwise settled.

(a) Settlement. Upon settlement of a Stock Appreciation Right, the
Company must pay to the Participant the appreciation in cash or shares of
Stock (valued at the aggregate Fair Market Value on the date of payment or
exercise) as provided in the Stock Incentive Agreement or, in the absence
of such provision, as the Committee may determine.

(b) Conditions to Exercise. Each Stock Appreciation Right granted
under the Plan is exercisable or payable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee
specifies in the Stock Incentive Agreement; provided, however, that
subsequent to the grant of a Stock Appreciation Right, the Committee, at
any time before complete termination of such Stock Appreciation Right, may
accelerate the time or times at which such Stock Appreciation Right may be
exercised or paid in whole or in part.

3.4 Terms and Conditions of Stock Awards. The number of shares of Stock
subject to a Stock Award and restrictions or conditions on such shares, if any,
will be as the Committee determines, and the certificate for such shares will
bear evidence of any restrictions or conditions. Subsequent to the date of the
grant of the Stock Award, the Committee has the power to permit, in its
discretion, an acceleration of the expiration of an applicable restriction
period with respect to any part or all of the shares awarded to a Participant.
The Committee may require a cash payment from the Participant in an amount no
greater than the aggregate Fair Market Value of the shares of Stock awarded
determined at the date of grant in exchange for the grant of a Stock Award or
may grant a Stock Award without the requirement of a cash payment.

3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
Equivalent Right entitles the Participant to receive payments from the Company
in an amount determined by reference to any cash dividends paid on a specified
number of shares of Stock to Company stockholders of record during the period
such rights are effective. The Committee may impose such restrictions and
conditions on any Dividend Equivalent Right as the Committee in its discretion
shall determine, including the date any such right shall terminate and may
reserve the right to terminate, amend or suspend any such right at any time.

(a) Payment. Payment in respect of a Dividend Equivalent Right may be
made by the Company in cash or shares of Stock (valued at Fair Market Value
as of the date payment is owed) as provided in the Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision,
as the Committee may determine.

(b) Conditions To Payment. Each Dividend Equivalent Right granted
under the Plan is payable at such time or times, or upon the occurrence of
such event or events, and in such amounts, as the Committee specifies in
the applicable Stock Incentive Agreement or Stock Incentive Program;
provided, however, that subsequent to the grant of a Dividend Equivalent
Right, the Committee, at any time before complete termination of such
Dividend Equivalent Right, may accelerate the time or times at which such
Dividend Equivalent Right may be paid in whole or in part.

3.6 Terms and Conditions of Performance Unit Awards. A Performance Unit
Award shall entitle the Participant to receive, at a specified future date,
payment of an amount equal to all or a portion of the value of a specified or
determinable number of units (stated in terms of a designated or determinable
dollar amount per unit) granted by the Committee. At the time of the grant, the
Committee must determine the base value of each unit, the number of units
subject to a Performance Unit Award, and the Performance Goals applicable to the
determination of the ultimate payment value of the Performance Unit Award. The
Committee may provide for an alternate base value for each unit under certain
specified conditions.

(a) Payment. Payment in respect of Performance Unit Awards may be made
by the Company in cash or shares of Stock (valued at Fair Market Value as
of the date payment is owed) as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program or, in the absence of such provision,
as the Committee may determine.

(b) Conditions To Payment. Each Performance Unit Award granted under
the Plan shall be payable at such time or times, or upon the occurrence of
such event or events, and in such amounts, as the Committee shall specify
in the applicable Stock Incentive Agreement or Stock Incentive Program;
provided, however, that subsequent to the grant of a Performance Unit
Award, the Committee, at any time before complete termination of such
Performance Unit Award, may accelerate the time or times at which such
Performance Unit Award may be paid in whole or in part.

3.7 Terms And Conditions Of Phantom Shares. Phantom Shares shall entitle
the Participant to receive, at a specified future date, payment of an amount
equal to all or a portion of the Fair Market Value of a specified number of
shares of Stock at the end of a specified period. At the time of the grant, the
Committee will determine the factors which will govern the portion of the
phantom shares so payable, including, at the discretion of the Committee, any
performance criteria that must be satisfied as a condition to payment. Phantom
Share awards containing performance criteria may be designated as performance
share awards.

(a) Payment. Payment in respect of Phantom Shares may be made by the
Company in cash or shares of Stock (valued at Fair Market Value as of the
date payment is owed) as provided in the applicable Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision,
as the Committee may determine.

(b) Conditions to Payment. Each Phantom Share granted under the Plan
is payable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee specify in the applicable
Stock Incentive Agreement or Stock Incentive Program; provided, however,
that subsequent to the grant of a Phantom Share, the Committee, at any time
before complete termination of such Phantom Share, may accelerate the time
or times at which such Phantom Share may be paid in whole or in part.

3.8 Treatment of Awards Upon Termination of Employment. Except as otherwise
provided by Plan Section 3.2(e), any award under this Plan to a Participant who
has experienced a Termination of Employment may be cancelled, accelerated, paid
or continued, as provided in the applicable Stock Incentive Agreement or Stock
Incentive Program, or, in the absence of such provision, as the Committee may
determine. The portion of any award exercisable in the event of continuation or
the amount of any payment due under a continued award may be adjusted by the
Committee to reflect the Participant's period of service from the date of grant
through the date of the Participant's Termination of Employment or such other
factors as the Committee determines are relevant to its decision to continue the
award.

SECTION 4 RESTRICTIONS ON STOCK

4.1 Escrow of Shares. Any certificates representing the shares of Stock
issued under the Plan will be issued in the Participant's name, but, if the
applicable Stock Incentive Agreement or Stock Incentive Program so provides, the
shares of Stock will be held by a custodian designated by the Committee (the
"Custodian"). Each applicable Stock Incentive Agreement or Stock Incentive
Program providing for transfer of shares of Stock to the Custodian must appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable Stock Incentive Agreement or Stock Incentive Program, with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the Custodian for
such Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement or Stock Incentive Program. During the
period that the Custodian holds the shares subject to this Section, the
Participant is entitled to all rights, except as provided in the applicable
Stock Incentive Agreement or Stock Incentive Program, applicable to shares of
Stock not so held. Any dividends declared on shares of Stock held by the
Custodian must provide in the applicable Stock Incentive Agreement or Stock
Incentive Program, to be paid directly to the Participant or, in the
alternative, be retained by the Custodian or by the Company until the expiration
of the term specified in the applicable Stock Incentive Agreement or Stock
Incentive Program and shall then be delivered, together with any proceeds, with
the shares of Stock to the Participant or to the Company, as applicable.

4.2 Restrictions On Transfer. The Participant does not have the right to
make or permit to exist any disposition of the shares of Stock issued pursuant
to the Plan except as provided in the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program. Any disposition of the shares of Stock
issued under the Plan by the Participant not made in accordance with the Plan or
the applicable Stock Incentive Agreement or Stock Incentive Program will be
void. The Company will not recognize, or have the duty to recognize, any
disposition not made in accordance with the Plan and the applicable Stock
Incentive Agreement or Stock Incentive Program, and the shares so transferred
will continue to be bound by the Plan and the applicable Stock Incentive
Agreement or Stock Incentive Program.

SECTION 5 GENERAL PROVISIONS

5.1 Withholding. The Company must deduct from all cash distributions under
the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan or upon the vesting of any Stock Award, the
Company has the right to require the recipient to remit to the Company an amount
sufficient to satisfy any federal, state and local tax withholding requirements
prior to the delivery of any certificate or certificates for such shares or the
vesting of such Stock Award. A Participant may pay the withholding obligation in
cash, or, if the applicable Stock Incentive Agreement or Stock Incentive Program
provides, a Participant may elect to have the number of shares of Stock he is to
receive reduced by, or with respect to a Stock Award, tender back to the
Company, the smallest number of whole shares of Stock which, when multiplied by
the Fair Market Value of the shares of Stock determined as of the Tax Date
(defined below), is sufficient to satisfy federal, state and local, if any,
withholding obligation arising from exercise or payment of a Stock Incentive (a
"Withholding Election"). A Participant may make a Withholding Election only if
both of the following conditions are met:

(a) The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed
notice of Withholding Election as prescribed by the Committee; and

(b) Any Withholding Election made will be irrevocable except on six
months advance written notice delivered to the Company; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.

5.2 Changes In Capitalization; Merger; Liquidation.

(a) The number of shares of Stock reserved for the grant of Options,
Dividend Equivalent Rights, Performance Unit Awards, Phantom Shares, Stock
Appreciation Rights and Stock Awards; the number of shares of Stock
reserved for issuance upon the exercise or payment, as applicable, of each
outstanding Option, Dividend Equivalent Right, Phantom Share and Stock
Appreciation Right and upon vesting or grant, as applicable, of each Stock
Award; the Exercise Price of each outstanding Option and the specified
number of shares of Stock to which each outstanding Dividend Equivalent
Right, Phantom Share and Stock Appreciation Right pertains must be
proportionately adjusted for any increase or decrease in the number of
issued shares of Stock resulting from a subdivision or combination of
shares or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number
of shares of Stock outstanding effected without receipt of consideration by
the Company.

(b) In the event of a merger, consolidation, reorganization,
extraordinary dividend, spin-off, sale of substantially all of the
Company's assets, other change in capital structure of the Company, tender
offer for shares of Stock, or a change in control of the Company (as
defined by the Committee in the applicable Stock Incentive Agreement) the
Committee may make such adjustments with respect to awards and take such
other action as it deems necessary or appropriate to reflect such merger,
consolidation, reorganization or tender offer, including, without
limitation, the substitution of new awards, or the adjustment of
outstanding awards, the acceleration of awards, the removal of restrictions
on outstanding awards, or the termination of outstanding awards in exchange
for the cash value determined in good faith by the Committee of the vested
and/or unvested portion of the award. Any adjustment pursuant to this
Section 5.2 may provide, in the Committee's discretion, for the elimination
without payment therefor of any fractional shares that might otherwise
become subject to any Stock Incentive, but except as set forth in this
Section may not otherwise diminish the then value of the Stock Incentive.

(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan must not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or equity
securities having preferences or priorities as to the Stock or the rights
thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other
corporate act or proceeding.

5.3 Cash Awards. The Committee may, at any time and in its discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.

5.4 Compliance With Code. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder must be construed in
such manner as to effectuate that intent.

5.5 Right to Terminate Employment. Nothing in the Plan or in any Stock
Incentive confers upon any Participant the right to continue as an employee or
officer of the Company or any of its Affiliates or affect the right of the
Company or any of its Affiliates to terminate the Participant's employment or
services at any time.

5.6 Non-Alienation of Benefits. Other than as provided herein, no benefit
under the Plan may be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge; and any attempt to do so
shall be void. No such benefit may, prior to receipt by the Participant, be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Participant.

5.7 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise deliverable under
Stock Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to a Stock Incentive, that the Participant or other recipient of a Stock
Incentive represent, in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to distribution
and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities laws. The Company
may include on certificates representing shares delivered pursuant to a Stock
Incentive such legends referring to the foregoing representations or
restrictions or any other applicable restrictions on resale as the Company, in
its discretion, shall deem appropriate.

5.8 Listing and Legal Compliance. The Committee may suspend the exercise or
payment of any Stock Incentive so long as it determines that securities exchange
listing or registration or qualification under any securities laws is required
in connection therewith and has not been completed on terms acceptable to the
Committee.

5.9 Termination and Amendment of the Plan. The Board of Directors at any
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive may adversely
affect the rights of the Participant under such Stock Incentive.

5.10 Stockholder Approval. The Plan must be submitted to the stockholders
of the Company for their approval within twelve (12) months before or after the
adoption of the Plan by the Board of Directors of the Company. If such approval
is not obtained, any Stock Incentive granted hereunder will be void.

5.11 Choice of Law. The laws of the State of Maryland shall govern the
Plan, to the extent not preempted by federal law, without reference to the
principles of conflict of laws.

5.12 Effective Date of Plan. This Plan was approved by the Board of
Directors as of June 14, 2000.