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..........................................................8
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.......................................14
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. Notwithstanding
any other provision hereof, and except for adjustments to the Exercise
Price as contemplated by Section 5.2 hereof, in no event will the
Exercise Price per share of Stock purchaseable under any Option be
reduced after the date of grant of the Option and no Option may be
canceled or surrendered in exchange for an Option with a lower
Exercise Price. [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.