ITEM 10.1. OMEGA FINANCIAL CORPORATION 2006 EQUITY INCENTIVE PLAN OMEGA FINANCIAL CORPORATION 2006 EQUITY INCENTIVE PLAN1. Purposes The purposes of the Omega Financial Corporation 2006 Equity IncentivePlan (the “Plan”) are to (i) promote the long-term retention of employees ofOmega Financial Corporation (“Omega”), and its current and future subsidiaries(collectively, the “Company”), directors of the Company and other persons whoare in a position to make significant contributions to the success of theCompany; (ii) further reward these employees, directors and other persons fortheir contributions to the Company’s growth and expansion; (iii) provideadditional incentive to these employees, directors and other persons to continueto make similar contributions in the future; and (iv) to further align theinterests of these employees, directors and other persons with those of Omega’sshareholders. These purposes will be achieved by granting to such employees andother persons, in accordance with the provisions of this Plan, Options, StockAppreciation Rights, Restricted Stock or Unrestricted Stock, Deferred Stock,Restricted Stock Units or Performance Awards, for shares of Omega’s commonstock, par value $5.00 per share (“Common Stock”), or combinations thereof(collectively, “Awards”). As of the Effective Date of the Plan, no additional grants will be madeunder the Company’s 1996 Employee Stock Option Plan and 2004 Stock Option Planfor Non-Employee Directors (collectively, the “Old Plans”). Outstanding grantsunder the Old Plans will continue to be governed by their terms under the OldPlans.2. Aggregate Number of Awards 2.1 Shares Subject to the Plan and Maximum Awards. The aggregate numberof shares of Common Stock for which Awards may be granted under the Plan shallbe 500,000 shares of Common Stock; provided, however, that such share reserveshall be increased from time to time by a number of shares equal to the numberof shares of Common Stock that are issuable pursuant to option grantsoutstanding under the Old Plans as of the Effective Date (“Existing Options”)that but for the termination and/or suspension of the Old Plans, would otherwisehave reverted to the share reserve of the Old Plans pursuant to the termsthereof as a result of the expiration, termination, cancellation or forfeitureof such options. As of the Effective Date, there were 541,738 Existing Optionsoutstanding. Such maximum numbers of shares are subject to adjustment inaccordance with Section 2.6. Treasury shares, reacquired shares (includingshares of Common Stock purchased in the open market) and unissued shares ofCommon Stock may be used for purposes of the Plan, at Omega’s sole discretion.No fractional shares of Common Stock shall be delivered under the Plan. 2.2 Section 162(m) Limits. The maximum number of shares of Stock forwhich Stock Options may be granted to any person in any fiscal year is 50,000shares and the maximum number of shares of Stock subject to SARs granted to anyperson in any fiscal year is 10,000 shares. The maximum number of shares subjectto other Awards granted to any person in any fiscal year is 25,000 shares. Theforegoing provisions will be construed in a manner consistent with Section162(m) of the Internal Revenue Code (the “Code”). 2.3 Reversion of Shares to the Share Reserve. Shares of Common Stockthat were issuable pursuant to an Award that has terminated but with respect towhich such Award had not been exercised and shares of Common Stock that areissued pursuant to an Award but that are subsequently forfeited shall beavailable for future Awards under the Plan and shall not count toward themaximum number of shares of Common Stock that may be issued under the Plan asset forth in Section 2.1. 2.4 Shares Used to Pay Exercise Price and Taxes. If a Participant paysthe exercise price of an Option by surrendering previously owned shares ofCommon Stock, as may be permitted by the Compensation Committee (“Committee”) ofthe Board of Directors (“Board”) of Omega, and/or arranges to have theappropriate number of shares of Common Stock otherwise issuable upon exercisewithheld by the Company to cover the withholding tax liability associated withthe Option exercise, the surrendered shares of Common Stock and shares of CommonStock used to pay taxes shall not count towards the maximum number of shares ofCommon Stock that may be issued under the Plan as set forth in Section 2.1. If aParticipant, as permitted by the Committee, arranges to have an appropriatenumber of shares of a Stock Award withheld by the Company to cover thewithholding tax liability associated with such Stock Award, the shares of CommonStock used to pay taxes shall not count towards the maximum number of shares ofCommon Stock that may be issued under the Plan as set forth in Section 2.1. 2.5 Other Items Not Included in Allocation. The maximum number ofshares of Common Stock that may be issued under the Plan as set forth in Section2.1 shall not be affected by (i) the payment in cash of dividends or dividendequivalents in connection with outstanding Awards; (ii) the granting or paymentof stock-denominated Awards which by their terms may be settled only in cash; or(iii) Awards that are granted through the assumption of, or in substitution for,outstanding awards previously granted to individuals who have become employeesas a result of a merger, consolidation, or acquisition or other corporatetransaction involving the Company. 2.6 Adjustments. In the event of any stock dividend, stock split,combination or exchange of equity securities, merger, consolidation,recapitalization, reorganization, divestiture or other distribution (other thanordinary cash dividends) of assets to shareholders, or any other event affectingthe Common Stock that the Committee deems, in its sole discretion, to be similarcircumstances, the Committee may make such adjustments as it may deemappropriate, in its discretion, to: (i) the maximum number of shares of CommonStock that may be issued under the Plan as set forth in Section 2.1 or for anytype of Award as set forth in Section 5.1, Section 5.2 and Section 5.3; (ii) themaximum number of shares of Common Stock that may be granted to any singleindividual pursuant to Section 2.1; (iii) the number or kind of shares subjectto an Award; (iv) the Exercise Price applicable to an Award; (v) any measure ofperformance that relates to an Award in order to reflect such change in theCommon Stock; and/or (vi) any other affected terms of any equity-based Award.The Committee may also make such adjustments to take into account materialchanges in law or in accounting practices or principles, mergers,consolidations, acquisitions, dispositions or similar corporate transactions, orany other event, as the Committee may determine in its sole discretion. 2.7 Par Value. Notwithstanding anything herein to the contrary, if aParticipant is required by applicable law to pay the par value of the CommonStock subject to an Award, such payment may be made in any form permitted byapplicable law, including services performed or contracted to be performed, inthe sole discretion of the Committee.3. Participation 3.1 Eligible Persons. All current and future employees of the Company,including officers (“Employees”), all directors of the Company (includingdirectors who are Employees and directors who are not Employees) and all otherpersons who are not Employees or directors who, in the opinion of the Committee,are in a position to make a significant contribution to the success of theCompany, shall be eligible to receive Awards under the Plan (each, a”Participant”). No eligible Employee, director or other person shall have anyright to receive an Award except as expressly provided in the Plan. 3.2 Considerations to Participation. The Participants who shallactually receive Awards under the Plan shall be determined by the Committee inits sole discretion. In making such determinations, the Committee shall considerthe positions and responsibilities of eligible Employees and other persons,their past performance and contributions to the Company’s growth and expansion,the value of their services to the Company, the difficulty of finding qualifiedreplacements, and such other factors as the Committee deems pertinent in itssole discretion. 3.3 Cancellation and Modification of Awards. In the event of a changein a Participant’s duties and responsibilities, or a transfer of the Participantto a different position, the Committee may cancel or modify any Award granted tosuch Participant or adjust the number of shares of Common Stock subject theretocommensurate with the transfer or change in responsibility, as determined by theCommittee, in its discretion, provided that no such action shall violate theprovisions of Section 5.1(b)(4), and provided further that the Committee may notmodify or cancel Awards exercisable at the time of such change in duties orresponsibilities or transfer or to which the Participant was irrevocablyentitled at the time of such change or transfer.4. Administration 4.1 Power and Authority. The Committee shall have full and exclusivepower to administer and interpret the Plan, to grant Awards and to adopt suchadministrative rules, regulations, procedures and guidelines governing the Planand the Awards as it may deem necessary in its discretion, from time to time.The Committee’s authority shall include, but not be limited to, the authorityto: (i) determine the type of Awards to be granted under the Plan; (ii) selectAward recipients and determine the extent of their participation; (iii)determine the method or formula for establishing the fair market value of theCommon Stock for various purposes under the Plan; and (iv) establish all otherterms, conditions, restrictions and limitations applicable to Awards and theshares of Common Stock issued pursuant to Awards, including, but not limited to,those relating to a Participant’s Retirement (as defined in Section 6.1(e)),death, Disability, leave of absence or termination of employment. The Committeemay accelerate or defer the vesting or payment of Awards, cancel or modifyoutstanding Awards, waive any conditions or restrictions imposed with respect toAwards or the Common Stock issued pursuant to Awards and make any and all otherinterpretations and determinations which it deems necessary with respect to theadministration of the Plan, subject to the limitations contained in Section5.1(b)(4) with respect to all Participants and subject to the provisions ofSection 162(m) of the Code with respect to “covered employees” as definedthereunder, except that the Committee may not, without the consent of the holderof an Award or unless specifically authorized by the terms of the Plan or anAward, take any action under this clause with respect to such Award if suchaction would adversely affect the rights of such holder. The Committee’sright to make any decision, interpretation or determination under the Plan shallbe in its sole and absolute discretion. 4.2 Administrators of the Plan. The Plan shall be administered by theCommittee. The Committee may delegate all or any portion of its authorityhereunder to one or more subcommittees consisting of at least one Committeemember (and references in this Plan to the “Committee” shall thereafter be tothe Committee or such subcommittees). The Committee shall be comprised of nofewer than three members, each of whom must qualify as (i) an “IndependentDirector” within the meaning of Rule 4200(a)(15) of the listing standards of theNasdaq Stock Market, Inc or any future corresponding rule; (ii) a “non-employeedirector” within the meaning of Rule 16b-3(b)(3) under the Securities ExchangeAct of 1934, as amended (the “1934 Act”), or any future corresponding rule; and(iii) an “outside director” within the meaning of the regulations promulgatedunder Section 162(m) of the Code, or any future corresponding rule, providedthat the failure of the Committee or of the Board for any reason to be composedsolely of Independent Directors, non-employee directors or outside directorsshall not prevent an Award from being considered granted under this Plan.Without limiting the generality of the foregoing, the Committee shall have theauthority to select a class of potential Award recipients and the extent oftheir participation and to delegate to an appropriate officer of the Company theauthority to determine the individual Participants and amount and nature of theAward to be issued to such Participants, subject to such criteria, limitationsand instructions as the Committee shall determine; provided, however, that noAwards shall be made pursuant to such delegation to a Participant who is aCovered Employee under Section 162(m) of the Code and/or is subject to Section16(b) of the 1934 Act. 4.3 Administration of the Plan. The Committee may adopt such rules forthe administration of the Plan as it deems necessary or advisable, in its solediscretion. For all purposes of the Plan, a majority of the members of theCommittee shall constitute a quorum, and the vote of a majority of the membersof the Committee (or written consent of all of the members) on a particularmatter shall constitute the act of the Committee on that matter. The Committeeshall have the exclusive right to construe the Plan and any Award, to settle allcontroversies regarding the Plan or any Award, to correct defects and omissionsin the Plan and in any Award, and to take such further actions as the Committeedeems necessary or advisable, in its sole discretion, to carry out the purposeand intent of the Plan. Such actions shall be final, binding and conclusive uponall parties concerned. 4.4 Liability; Indemnification. No member of the Committee shall beliable for any act or omission (whether or not negligent) taken or omitted ingood faith, or for the good faith exercise of any authority or discretiongranted in the Plan to the Committee, or for any act or omission of any othermember of the Committee. The members of the Committee shall be entitled toindemnification and reimbursement to the fullest extent provided in Omega’sarticles of incorporation, bylaws and applicable law. In the performance of itsfunctions under the Plan, the Committee shall be entitled to rely uponinformation and advice furnished by Omega’s officers, accountants, counsel andother parties the Committee deems necessary, and no member of the Committeeshall be liable for any action taken or not taken in reliance upon such advice. 4.5 Costs; Liabilities. All costs incurred in connection with theadministration and operation of the Plan shall be paid by the Company. Exceptfor the express obligations of the Company under the Plan and under Awardsgranted in accordance with the provisions of the Plan, the Company shall have noliability with respect to any Award, or to any Participant or any transferee ofshares of Common Stock from any Participant, including, but not limited to, anytaxliabilities, capital losses, or other costs or losses incurred by anyParticipant or any such transferee.5. Types of Awards 5.1 Options. (a) An Option is an Award entitling the recipient on exercisethereof to purchase Common Stock at a specified exercise price. Both “incentivestock options,” as defined in Section 422 of the Code (any Option intended toqualify as an incentive stock option is hereinafter referred to as an “ISO”),and Options that are not incentive stock options (any such Option is hereinafterreferred to as a “non-ISO”), may be granted under the Plan. ISOs shall beawarded only to Employees. The maximum amount of Options (including ISOs) thatmay be awarded under the Incentive Plan will not exceed 500,000 shares of CommonStock, plus the number of shares of Common Stock that become available as aresult of the expiration, termination, cancellation or forfeiture of ExistingOptions. (b) The exercise price of an Option shall be determined by theCommittee subject to the following: (1) The exercise price of an ISO shall not be lessthan 100% (110% in the case of an ISO granted to a ten percent or greatershareholder) of the fair market value of the Common Stock subject to the ISO,determined as of the time the Option is granted. A ten percent shareholder isany person who at the time of grant owns, directly or indirectly, or is deemedto own by reason of the attribution rules of Section 424(d) of the Code, stockpossessing more than 10% of the total combined voting power of all classes ofstock of the Company or of any of its subsidiaries. (2) The exercise price of a non-ISO shall not be lessthan 100% of the fair market value of the Common Stock subject to the non-ISO,determined as of the time the non-ISO is granted. (3) To the extent required by applicable law, theexercise price paid for Common Stock which is part of an original issue ofauthorized Common Stock shall not be less than the par value per share of theCommon Stock. (4) In no case may the Committee reduce the exerciseprice of an Option at any time after the time of grant, including by amendmentor cancellation and subsequent issuance, except in the case of an adjustment asset forth in Section 2.6(iv) or unless approved by shareholders. (5) Notwithstanding (1) and (2) above, an Option(whether an ISO or non-ISO) may be granted with an exercise price determinedaccording to the provisions of Section 424(a) of the Code, if the grant of suchOption is pursuant to a transaction described in Section 424(a) of the Code. (c) The period during which an Option may be exercised shallbe determined by the Committee, except that the period during which an Optionmay be exercised shall not exceed ten years (five years, in the case of an ISOgranted to a ten percent shareholder) from the date the Option was granted. (d) An Option shall become exercisable at such time or times,and on such terms and conditions, as the Committee may determine. The Committeemay at any time accelerate the time at which all or any part of the Option maybe exercised. Any exercise of an Option must be in writing, signed by the properperson and delivered or mailed to the Company,accompanied by (i) any documents required by the Committee and (ii) payment infull in accordance with Section 5.1(e) below for the number of shares for whichthe Option is exercised. (e) Stock purchased on exercise of an Option must be paid foras follows: (i) in cash or by check (acceptable to Omega in accordance withguidelines established for this purpose), bank draft or money order payable tothe order of Omega or (ii) if so permitted by the instrument evidencing theOption (or in the case of an Option which is not an ISO, by the Board at orafter grant of the Option), (A) through the delivery of shares of Common Stockwhich have been outstanding for at least six months (unless the Board expresslyapproves a shorter period) and which have a fair market value on the date ofexercise at least equal to the exercise price, or (B) by delivery of anunconditional and irrevocable undertaking by a broker to deliver promptly toOmega sufficient funds to pay the exercise price (including in connection with aso-called “cashless exercise” effected by such broker), or (C) by anycombination of the permissible forms of payment. (f) In the event a Participant tenders shares of Common Stockto pay the exercise price of an Option and/or arranges to have a portion of theshares otherwise issuable upon exercise withheld or sold to pay the applicablewithholding taxes, in no case may the Committee grant “reload” or “restoration”options entitling the Participant to purchase shares of Common Stock equal tothe sum of the number of such shares tendered to pay the exercise price and thenumber of shares used to pay the withholding taxes. (g) Any Employee who disposes of shares acquired upon theexercise of an ISO either (i) within two years after the date of grant of suchISO or (ii) within one year after the transfer of such shares to the Employeeshall notify the Company of such disposition and of the amount realized uponsuch disposition. 5.2 Stock Appreciation Rights. (a) A Stock Appreciation Right (“SAR”) is an Award entitlingthe recipient on its exercise to receive an amount, in cash or Common Stock or acombination thereof (such form to be determined by the Committee), determined inwhole or in part by reference to appreciation in Common Stock value. In general,a SAR entitles the Participant to receive, with respect to each share of CommonStock as to which the SAR is exercised , the excess of the share’s fair marketvalue on the date of exercise over its fair market value on the date the SAR wasgranted (“Base Amount”), except that if a SAR is granted retroactively insubstitution for an Option, the fair market value established by the Committeemay be the fair market value at the time such Option was granted. Any suchsubstitution of a SAR for an Option granted to a “covered employee” underSection 162(m) of the Code may only be made in compliance with the provisionsthereof. The maximum amount of SARS that may be awarded under the Incentive Planwill not exceed 100,000 shares of Common Stock. (b) Notwithstanding the above, the Committee may provide atthe time of grant that the amount the recipient is entitled to receive shall beadjusted upward or downward under rules established by the Committee to takeinto account the performance of the Common Stock in comparison with theperformance of other stocks or an index or indices of other stocks. TheCommittee may also grant SARs that provide that following a Change in Control ofthe Company (as defined in Section 6.2(c)) the holder of such SAR shall beentitled to receive, with respect to each share of Common Stock subject to theSAR, an amount equal to the excess of a specified value (which may include anaverage of values) for a share of Common Stock during a period preceding suchChange in Control over the fair market value of a share of Common Stock on thedate the SAR was granted. (c) SARs may be granted in tandem with, or independently of,Options granted under the Plan. A SAR granted in tandem with an Option that isnot an ISO may be granted either at or after the time the Option is granted. ASAR granted in tandem with an ISO may be granted only at the time the Option isgranted. (d) When SARs are granted in tandem with Options, thefollowing rules shall apply: (1) The SAR shall be exercisable only at such time ortimes, and to the extent, that the related Option is exercisable and shall beexercisable in accordance with the procedure required for exercise of therelated Option. (2) The SAR shall terminate and no longer beexercisable upon the termination or exercise of the related Option, except thata SAR granted with respect to less than the full number of shares covered by anOption shall not be reduced until the number of shares as to which the relatedOption has been exercised or has terminated exceeds the number of shares notcovered by the SAR. (3) The Option shall terminate and no longer beexercisable upon the exercise of the related SAR. (4) The SAR shall be transferable only with therelated Option. (5) A SAR granted in tandem with an ISO may beexercised only when the market price of the Stock subject to the Option exceedsthe exercise price of such option. (e) A SAR not granted in tandem with an Option shall becomeexercisable at such time or times, and on such terms and conditions, as theCommittee may specify. The Committee may at any time accelerate the time atwhich all or any part of the SAR may be exercised. Any exercise of anindependent SAR must be in writing, signed by the proper person and delivered ormailed to Omega, accompanied by any other documents required by the Committee. 5.3 Stock Awards. (a) Form of Awards. The Committee may grant Awards (“StockAwards”) which are payable in shares of Common Stock or denominated in unitsequivalent in value to shares of Common Stock or are otherwise based on orrelated to shares of Common Stock, including, but not limited to, Awards ofUnrestricted Stock, Restricted Stock, Deferred Stock and Restricted Stock Units,subject to such terms, conditions, restrictions and limitations as the Committeemay determine to be applicable to such Stock Awards, in its discretion, fromtime to time. The Committee may consider the impact of the conditions,restrictions or limitations applicable to a Stock Award, as well as thepossibility of forfeiture or cancellation, in determining the fair market valuefor purposes of determining the number of shares of Common Stock allocable to aStock Award. Without limiting the generality of the foregoing, the Committee mayissue Stock Awards to Participants in connection with management or employeestock purchase programs. The maximum amount of Stock Awards that may be awardedunder the Incentive Plan will not exceed 250,000 shares of Common Stock. (b) Unrestricted Stock. Shares of Common Stock may be used aspayment for services rendered (including any compensation that is intended toqualify as performance-based compensation for purposes of Section 162(m) of theCode), and unless otherwise determined by the Committee, no minimum vestingperiod shall apply to such shares. Any shares of Common Stock used for suchpayment shall be valued at the fair market value of such shares at the time ofpayment and shall be subject to such terms, conditions, restrictions andlimitations as shall be determined by the Committee at the time of payment. (c) Restricted Stock. A Restricted Stock Award entitles therecipient to acquire shares of Common Stock subject to the restrictionsdescribed in Section 5.3(c)(3) (“Restricted Stock”) for no consideration,nominal consideration or any higher price, all as determined by the Committee,subject to Section 2.7. (1) A Participant who is granted a Restricted StockAward shall have no rights with respect to such Award unless the Participantaccepts the Award by written instrument delivered or mailed to Omega accompaniedby payment in full of the specified purchase price, if any, of the sharescovered by the Award. Payment may be by certified or bank check or otherinstrument acceptable to the Committee. (2) A Participant who receives Restricted Stock shallhave all the rights of a shareholder with respect to such stock, includingvoting and dividend rights, subject to the restrictions described in 5.3(c)(3)and any other conditions imposed by the Committee at the time of grant. Unlessthe Committee otherwise determines, certificates evidencing shares of RestrictedStock shall remain in the possession of the Company until such shares are freeof all restrictions under the Plan. (3) Except as otherwise specifically provided by thePlan or the Award, Restricted Stock may not be sold, assigned, exchanged,pledged, gifted or otherwise disposed of, or transferred, and if a Participantsuffers a Status Change (as defined in Section 6.1) for any reason, must beoffered to Omega for purchase for the amount of cash paid for such stock, orforfeited to the Company if no cash was paid. These restrictions shall lapse atsuch time or times, and on such terms and conditions, as the Committee maydetermine. The Committee may at any time accelerate the time at which therestrictions on all or any part of the shares shall lapse. (4) Any Participant making, or required by an Awardto make, an election under Section 83(b) of the Code with respect to RestrictedStock shall deliver to Omega, within ten days of the filing of such electionwith the Internal Revenue Service, a copy of such election. (5) The Committee may, at the time any Awarddescribed in this Section 5 is granted, provide that any or all the Common Stockdelivered pursuant to the Award shall be Restricted Stock. (6) The Committee may, in its sole discretion,approve the sale to any Participant of shares of Common Stock free ofrestrictions under the Plan for a price which is not less than the par value ofthe Common Stock. (d) Deferred Stock. A Deferred Stock Award entitles therecipient to receive shares of Common Stock to be delivered in the future.Delivery of the Common Stock shall take place at such time or times, and on suchterms and conditions, as the Committee may determine. The Committee may at anytime accelerate the time at which delivery of all or any part of the CommonStock shall take place. At the time any Award described in this Section 5 isgranted, the Committee may provide that, at the time Common Stock wouldotherwise be delivered pursuant to the Award, the Participant shall insteadreceive an instrument evidencing the Participant’s right to future delivery ofDeferred Stock. Awards of Deferred Stock represent only an unfunded, unsecuredpromise to deliver shares in the future and do not give Participants any greaterrights than those of an unsecured general creditor of the Company. (e) Restricted Stock Units. A Restricted Stock Unit is anAward denominated in shares of Restricted Stock, pursuant to a formuladetermined by the Committee, which may be settled either in shares of RestrictedStock or in cash, in the discretion of the Committee, subject to such otherterms, conditions, restrictions and limitations determined by the Committee fromtime to time. 5.4 [intentionally omitted] 5.5 Performance Awards. A Performance Award entitles the recipient toreceive, with or without payment, an Award or Awards described in this Section 5(such form to be determined by the Committee) following the attainment of suchperformance goals, during such measurement period or periods, and on such otherterms and conditions, all as the Committee may determine. Performance goals maybe related to personal performance, corporate performance, group or departmentalperformance or any such other category of performance as the Committee maydetermine, including the performance goals set forth in Section 5.6(b). TheCommittee shall have the authority to determine the performance goals, theperiod or period during which performance is to be measured and all other termsand conditions applicable to the Award. 5.6 Section 162(m) Limitations. (a) If the Committee determines at the time an Award that isintended to qualify as performance-based compensation for purposes of Section162(m) of the Code is granted to a Participant that such Participant is, or maybe as of the end of the tax year for which the Company would claim a taxdeduction in connection with such Award, a “covered employee,” then this Section5.6 is applicable to such Award under such terms as the Committee shalldetermine. (b) If an Award is subject to this Section 5.6, then any grantshall be subject to the achievement of specified levels of one or more of thefollowing performance goals, unless and until the Company’s shareholders approvea change to such performance goals: operating income, net earnings, earningsbefore interest, taxes, depreciation and amortization (EBITDA), earnings beforeinterest and taxes (EBIT), net income, earnings per share, total shareholderreturn, cash flow, return on assets, return on equity, decrease in expenses,Common Stock price, price-earnings multiple, comparisons to market indices,sales growth, market share, the achievement of certain quantitatively andobjectively determinable non-financial performance measures including, but notlimited to, operational measures, growth strategies, strategic initiatives,corporate development and leadership development, and any combination of theforegoing. The performance goals shall be determined and approved by theCommittee no later than the 90th day of the applicable fiscal year. Awardssubject to this Section 5.6 may not be adjusted upward. The Committee shallretain the discretion to adjust such Awards downward. Prior to the payment ofany Award subject to this Section 5.6, the Committee shall certify in writingthat the applicable performance goal was satisfied. (c) The Committee shall have the discretion to impose suchother restrictions on Awards subject to this Section 5.6 as it may deemnecessary or appropriate to ensure that such Awards qualify as performance-basedcompensation for purposes of Section 162(m) of the Code. In the event thatapplicable tax/and or securities laws change to permit the Committee thediscretion to alter the governing performance goals without obtainingshareholder approval, the Committee shall have the sole discretion to make suchchanges without obtaining shareholder approval. In addition, in the event thatthe Committee determines that it is advisable to grant Awards, or modifyexisting Awards, that shall not qualify as performance-based compensationfor purposes of Section 162(m) of the Code, the Committee may make such grantsand modifications without satisfying the requirements of Section 162(m) of theCode. 5.7 Section 409A of the Code. (a) Awards under the Plan are intended either to be exemptfrom or to satisfy the requirements of the rules of Section 409A of the Code andshall be construed accordingly. However, the Company shall not be liable to anyParticipant or other holder of an Award with respect to any Award-relatedadverse tax consequences arising under Section 409A or other provision of theCode. (b) To the extent that an Award under the Plan is intended tosatisfy the requirements of Section 409A of the Code and a provision of the Planor an Award agreement contravenes any Treasury regulations or other guidancepromulgated under Section 409A of the Code or could cause an Award to be subjectto the interest and additional tax under Section 409A of the Code, suchprovision of the Plan or Award shall be modified to maintain, to the maximumextent practicable, the original intent of the applicable provision withoutviolating the provisions of Section 409A of the Code. Moreover, anydiscretionary authority that the Committee may have pursuant to the Plan shallnot be applicable to an Award that is subject to Section 409A of the Code to theextent such discretionary authority would contravene Section 409A of the Code orthe Treasury regulations or other guidance promulgated thereunder. (c) Notwithstanding any provisions of this Plan or any Awardgranted hereunder to the contrary, no acceleration shall occur with respect toany Award to the extent such acceleration would cause the Plan or an Awardgranted hereunder to fail to comply with Section 409A of the Code. (d) Notwithstanding any provisions of this Plan or anyapplicable Award agreement to the contrary, no payment shall be made withrespect to any Award granted under this Plan to a “specified employee” (as suchterm is defined for purposes of Section 409A of the Code) prior to the six-monthanniversary of the employee’s separation of service to the extent such six-monthdelay in payment is required to comply with Section 409A of the Code.6. Events Affecting Outstanding Awards 6.1 Termination of Service. If a Participant who is an Employee ordirector ceases to be an Employee or director, or if there is a termination ofthe consulting, service or other relationship in respect of which a non-EmployeeParticipant was granted an Award under the Plan (such termination of employmentor other relationship referred to as a “Status Change”), the following rulesshall apply, unless otherwise determined by the Committee: (a) All Options and SARs held by the Participant at the time of such Status Change, to the extent then exercisable, shall continue to be exercisable by the Participant for a period of 90 days after the Participant’s Status Change; provided, however, that if the Status Change was due to death, Permanent Disability or Retirement, Options and SARs, to the extent then exercisable, shall continue to be exercisable by the Participant or his or her heirs, executor, administrator or other legal representative for a period of one year after the Participant’s Status Change by reason of death or Permanent Disability and for a period of five years after the Participant’s Status Change by reason of Retirement. After the expiration of such 90 day period (or one-year period in the case of death or Permanent Disability or five-year period in the event of Retirement), all such Options and SARs shall terminate. In no event, however, shall an Option or SAR remain exercisable beyond the latest date on which it could have been exercised without regard to this Section 6.1. All Options and SARs held by a participant at the time of such Status Change that are not then exercisable shall terminate upon such Status Change. (b) All Restricted Stock held by the Participant at the time of such Status Change shall be transferred to the Company (and, in the event the certificates representing such Restricted Stock are held by the Company, such Restricted Stock shall be so transferred without any further action by the Participant) in accordance with Section 5.3(c) above. (c) Any payment or benefit under a Restricted Stock Unit, Deferred Stock Award, Performance Award or other Award not specifically provided for in this Section 6.1 to which the Participant was not irrevocably entitled at the time of such Status Change shall be forfeited and the Award canceled as of the date of such Status Change. (d) “Disability” or “Permanent Disability” shall mean disability as defined in Section 22(e)(3) of the Internal Revenue Code or as otherwise determined by the Committee. (e) “Retirement” means termination of employment with or service to the Company by a Participant other than by reason of death or Permanent Disability or termination for Cause at a time when such Participant has attained age 65 (age 70 in the case of a non-employee director) or greater, or such other age as the Committee may approve. (f) Anything in this Section to the contrary notwithstanding, all Awards held by a Participant whose employment, directorship, consulting, service or other relationship with the Company was terminated for “Cause” shall, in the discretion of the Committee, terminate immediately as of the date of such Status Change. A termination by the Company of a Participant’s employment, directorship, consulting, service or other relationship with the Company shall be for “Cause” if the Committee determines that the Participant: (i) was guilty of fraud, gross negligence or willful misconduct in the performance of his or her duties for the Company, (ii) willfully and continually failed to perform substantially the Participant’s duties with the Company (other than any such failure resulting from incapacity due to Permanent Disability) after delivery of written demand for substantial performance to the Participant by the Board, the Committee or the Chief Executive Officer that specifically identified the manner in which the Board, the Committee or the Chief Executive Officer believed the Participant did not substantially perform his or her duties, (iii) breached or violated, in a material respect, any agreement between the Participant and the Company or any of the Company’s codes of conduct or corporate policies, including policy statements regarding conflicts-of-interest, insider trading or confidentiality, (iv) committed a material act of dishonesty or breach of trust, (v) acted in a manner that was inimical or injurious, in a material respect, to the business or interests of the Company, or (vi) was convicted of, or plead guilty or nolo contendere to, a felony or any other crime involving moral turpitude which subjects, or if generally known, would subject, the Company to public ridicule or embarrassment. (g) For all purposes of this Section 6.1, the employment with the Company of a Participant who is an Employee shall not be deemed to have been terminated if the Participant is transferred from Omega to a subsidiary of Omega, or vice versa, or from one subsidiary of Omega to another and, in the sole discretion of the Committee, a Status Change shall not be deemed to have occurred if, on the date that a Participant’s employment, directorship, consulting, service or other relationship with the Company terminates, such Participant has an employment, directorship, consulting, service or other relationship with the Company that, in the discretion of the Committee, would otherwise permit such Participant to receive an Award under this Plan. 6.2 Change in Control. (a) Subject to the provisions of Section 6.2(b), in the eventof a Change in Control (as defined in Section 6.2(c)), the following rules shallapply, unless otherwise expressly provided by the Committee in accordance withSection 6.2(d): (1) Each outstanding Option and SAR shallautomatically become exercisable in full upon the occurrence of such Change inControl. This provision shall not prevent an Option or SAR from becomingexercisable sooner as to Common Stock or cash that would otherwise have becomeavailable under such Option or SAR during such period. (2) Each outstanding share of Restricted Stock shallautomatically become free of all restrictions and conditions upon the occurrenceof such Change in Control. This provision shall not prevent the earlier lapse ofany restrictions or conditions on Restricted Stock that would otherwise havelapsed during such period. (3) Conditions on Restricted Stock Units, DeferredStock Awards, Performance Awards, which relate only to the passage of time andcontinued employment shall automatically terminate upon the occurrence of suchChange in Control. This provision shall not prevent the earlier lapse of anyconditions relating to the passage of time and continued employment that wouldotherwise have lapsed during such period. Performance or other conditions (otherthan conditions relating only to the passage of time and continued employment)shall continue to apply unless otherwise provided in the instrument evidencingthe Awards or in any other agreement between the Participant and the Company orunless otherwise agreed to by the Committee. (b) The Committee may, in its discretion, at the time an Awardis made hereunder or at any time prior to, coincident with or after the time ofa Change in Control: (i) require the purchase and sale of any Awards for anamount of cash equal to the amount which a Participant could have obtained uponthe exercise or realization of such rights had such Awards been currentlyexercisable; (ii) make such adjustment to the Awards then outstanding as theCommittee deems appropriate to reflect such Change in Control; (iii) ifapplicable, provide that such Awards shall be cancelled upon the effectivenessof such Change of Control and converted into the right to receive the sameconsideration as shareholders are receiving in such Change of Control (net ofany exercise price and/or purchase price payable by the Participant and/or BaseAmount in the case of a SAR); and/or (iv) cause the Awards then outstanding tobe assumed, or their rights substituted therefor, by the surviving or acquiringcorporation in such Change in Control. The Committee may, in its discretion,include such further provisions and limitations in any Award Agreement as it maydeem in the best interests of the Company. (c) A “Change in Control” means: (i) the occurrence of anevent that would, if known to Omega’s management, be required to be reported byOmega as a change in control under Form 8-K pursuant to the 1934 Act; or (ii)the acquisition or receipt, in any manner, by any person (as defined forpurposes of the 1934 Act) or any group of persons acting in concert, of director indirect beneficial ownership (as defined for purposes of the 1934 Act) ofmore than 50% of the combined voting securities ordinarily having the right tovote for the election of directors of Omega; or (iii) a change in theconstituency of the Board with the result that individuals (the “IncumbentDirectors”) who are members of the Board on the Effective Date (as defined inSection 13) cease for any reason to constitute at least a majority of the Board,provided that any individual who is elected to the Board after the EffectiveDate and whose nomination for election was unanimously approved by the IncumbentDirectors shall be considered an Incumbent Director beginning on the date of hisor her election to the Board, butexcluding, for this purpose, any such individual whose initial assumption ofoffice occurs as a result of an actual or threatened election contest (asdefined for purposes of the 1934 Act) with respect to the election or removal ofdirectors or other actual or threatened solicitation of proxies or consents byor on behalf of a person other than the Board; or (iv) the sale, exchange,liquidation or other disposition of all or more than 50% of Omega’s business orassets; unless in any such case, at least a majority of the Incumbent Directorsdetermine, prior to the occurrence of such Change in Control, that no Change inControl has or will have occurred; or (v) the occurrence of a reorganization,merger, consolidation or other corporate transaction involving Omega, in eachcase, with respect to which Omega’s shareholders immediately prior to suchtransaction do not, immediately after such transaction, own more than 50% of thecombined voting securities ordinarily having the right to vote for the electionof directors of Omega or other corporation resulting from such transaction; or(vi) the approval by Omega’s shareholders of a complete liquidation ordissolution of Omega; or (vii) any similar transaction, circumstance or eventwhich the Committee determines to constitute a Change in Control. (d) The provisions (or any of them) of Section 6.2(a) shallnot apply to the extent expressly determined by at least 75% of the IncumbentDirectors at a duly convened meeting of the Board held before the occurrence ofa Change in Control. (e) Any good faith determination by the Committee as towhether a Change in Control within the meaning of this Section 6.2 has occurredshall be conclusive and binding on the Participants. (f) Compliance with Section 409A of the Code. In the case ofan Award providing for the payment of deferred compensation subject to Section409A of the Code, any payment of such deferred compensation by reason of aChange in Control shall be made only if the event constituting the Change inControl is an event described in subsection (a)(2)(A)(v) of Section 409A of theCode and Treasury regulations or other guidance thereunder and shall be paidconsistent with the requirements of Section 409A. If any deferred compensationthat would otherwise be payable by reason of a Change in Control cannot be paidby reason of the immediately preceding sentence, it shall be paid as soon aspracticable thereafter consistent with the requirements of Section 409A of theCode, as determined by the Committee. 6.3 Special Forfeiture Provisions Following a Termination ofEmployment. Notwithstanding the provisions of Section 6.1, in any instance wherethe rights of a Participant with respect to an Award extend beyond a StatusChange other than by reason of death, all of such rights shall terminate and beforfeited, if, in the determination of the Committee, the Participant, at anytime prior or subsequent to such Status Change (a) breaches or violates, in amaterial way, the terms of any agreement with the Company, including anyemployment agreement, termination agreement, confidentiality agreement,non-solicitation agreement or non-competition agreement or (b) engaged orengages in conduct that would have permitted the Company to terminate suchParticipant’s employment for “Cause” (as defined in Section 6.1(f)) if suchParticipant was still an employee of the Company.7. Grant and Acceptance of Awards 7.1 Evidence of Approval. The Committee’s approval of a grant of anAward under the Plan, including the names of Participants and the size of theAward, including the number of shares of Common Stock subject to the Award,shall be reflected in minutes of meetings held by the Committee or in writtenconsents signed by members of the Committee. Once approved by the Committee,each Award shall be evidenced by such written instrument, containing suchterms as are required by the Plan and such other terms, consistent with theprovisions of the Plan, as may be approved from time to time by the Committee. 7.2 Award Agreements. Each instrument may be in the form of agreementsto be executed by both the Participant and the Company, or certificates, lettersor similar instruments, which need not be executed by the Participant butacceptance of which shall evidence agreement to the terms thereof. The grant ofan Award shall not impose any obligation on the Participant to accept the Award. 7.3 Conditions. Except as specifically provided by the Plan or theinstrument evidencing an Award, a Participant shall not become a shareholder ofOmega until (i) the Participant makes any required payments in respect of theCommon Stock issued or issuable pursuant to the Award, (ii) the Participantfurnishes Omega with any required agreements, certificates, letters or otherinstruments, and (iii) the Participant actually receives the shares of CommonStock. Subject to any terms and conditions imposed by the Plan or the instrumentevidencing an Award, upon the occurrence of all of the conditions set forth inthe immediately preceding sentence, a Participant shall have all rights of ashareholder with respect to shares of Common Stock, including, but not limitedto, the right to vote such shares and to receive dividends and otherdistributions paid with respect to such shares. The Committee may, upon suchterms and conditions as it deems appropriate, provide that a Participant willreceive a benefit in lieu of cash dividends that would have been payable on anyand all Common Stock subject to the Participant’s Award, had such Common Stockbeen outstanding. Without limitation, the Board may provide for payment to theParticipant of amounts representing such dividends, either currently or in thefuture, or for the investment of such amounts on behalf of the Participant. 7.4 Payments and Deferrals. Payment of Awards may be in the form ofcash, shares of Common Stock, other Awards, or combinations thereof as theCommittee shall determine, subject to such terms, conditions, restrictions andlimitations as it may impose. The Committee may postpone the exercise of Optionsor SARs, and may require or permit Participants to elect to defer the receipt orissuance of shares of Common Stock pursuant to Awards or the settlement ofAwards in cash under such rules and procedures as it may establish, in itsdiscretion, from time to time. The Committee may adopt deferred compensationplans to permit a Participant to defer the time when such Award is recognizedfor income tax purposes. It also may provide for deferred settlements of Awardsincluding the payment or crediting of earnings on deferred amounts, or thepayment or crediting of dividend equivalents where the deferred amounts aredenominated in common share equivalents. In addition, the Committee maystipulate in an Award Agreement, either at the time of grant or by subsequentamendment, that a payment or portion of a payment of an Award be delayed in theevent that Section 162(m) of the Code (or any successor or similar provision ofthe Code) would disallow a tax deduction by the Company for all or a portion ofsuch payment. The period of any such delay in payment shall be until thepayment, or portion thereof, is tax deductible, or such earlier date as theCommittee shall determine in its discretion. 7.5 Removal of Restrictions. Notwithstanding any other provision of thePlan, the Company shall not be obligated to deliver any shares of Common Stockpursuant to the Plan or to remove any restriction from shares of Common Stockpreviously delivered under the Plan (i) until all conditions to the Award havebeen satisfied or removed, (ii) until, in the opinion of counsel to the Company,all applicable Federal and state laws and regulations have been complied with,(iii) if the outstanding Common Stock is at the time listed on any stockexchangeor included for quotation on an inter-dealer system, until the shares to bedelivered have been listed or included or authorized to be listed or included onsuch exchange or system upon official notice of notice of issuance, (iv) if itmight cause the Company to issue or sell more shares of Common Stock that theCompany is then legally entitled to issue or sell, and (v) until all other legalmatters in connection with the issuance and delivery of such shares have beenapproved by counsel to the Company. If the sale of Common Stock has not beenregistered under the Securities Act of 1933, as amended, the Company mayrequire, as a condition to exercise of an Award, such representations oragreements as counsel to the Company may consider appropriate to avoid violationof such Act and may require that the certificates evidencing such Common Stockbear an appropriate legend restricting transfer. If an Award is exercised by theParticipant’s legal representative, the Company shall be under no obligation todeliver Common Stock pursuant to such exercise until the Company is satisfied asto the authority of such representative.8. Tax Withholding The Company shall withhold from any cash payment made pursuant to anAward an amount sufficient to satisfy all Federal, state and local withholdingtax requirements (the “withholding requirements”). In the case of an Awardpursuant to which Common Stock may be delivered, the Committee shall have theright to require that the Participant or other appropriate person remit to theCompany an amount sufficient to satisfy the withholding requirements, or makeother arrangements satisfactory to the Committee with regard to suchrequirements, prior to the delivery of any Common Stock. If and to the extentthat such withholding is required, the Committee may permit a Participant orsuch other person or entity to elect at such time and in such manner as theCommittee may determine to have the Company hold back from the shares of CommonStock to be delivered, or to deliver to the Company, Common Stock having a valuecalculated to satisfy the withholding requirement. If at the time an ISO isexercised, the Committee determines that the Company could be liable forwithholding requirements with respect to a disposition of the Common Stockreceived upon exercise, the Committee may require as a condition of exercisethat the person exercising the ISO agree (i) to inform the Company promptly ofany disposition (within the meaning of Section 424(c) of the Code) of CommonStock received upon exercise, and (ii) to give such security as the Committeedeems adequate to meet the potential liability of the Company for thewithholding requirements and to augment such security from time to time in anyamount reasonably deemed necessary by the Board to preserve the adequacy of suchsecurity.9. Dividends and Dividend Equivalents The Committee may provide that Stock Awards shall earn dividends ordividend equivalents. Such dividends or dividend equivalents may be paidcurrently or may be credited to an account maintained on the books of theCompany. Any payment or crediting of dividends or dividend equivalents will besubject to such terms, conditions, restrictions and limitations as the Committeemay establish, from time to time, including reinvestment in additional shares ofCommon Stock or common share equivalents. Unless the Committee determinesotherwise, any Employee subject to the reporting requirements of Section 16(a)of the 1934 Act may not participate in dividend reinvestment programsestablished under the Plan. The Committee shall determine the Participant’srights under the Plan with respect to extraordinary dividends or distributionson the shares of Common Stock.10. Voting The Committee shall determine whether a Participant shall have theright to direct the vote of shares of Common Stock allocated to a Stock Award.If the Committee determines that an Award shall carry voting rights, the sharesallocated to such Award shall be voted by the Company’s Secretary, or such otherperson as the Committee may designate in accordance with instructions receivedfrom the Participant (unless to do so would constitute a violation of fiduciaryduties). Shares as to which no instructions are received shall be voted by theCommittee or its designee proportionately in accordance with instructionsreceived from Participants in the Plan (unless to do so would constitute aviolation of fiduciary duties).11. Unfunded Plan Unless otherwise determined by the Committee, the Plan shall beunfunded and shall not create (or be construed to create) a trust or a separatefund or funds. The Plan shall not create any fiduciary relationship between theCompany on behalf of any Participant or other person. To the extent anyParticipant holds any rights by virtue of an Award granted under the Plan, suchrights shall constitute general unsecured liabilities of the Company and shallnot confer upon any Participant any right, title, or interest in any assets ofthe Company.12. Rights as Shareholder Unless the Committee determines otherwise, a Participant shall not haveany rights as a shareholder with respect to shares of Common Stock covered by anAward until the date the Participant becomes the holder of record with respectto such shares in accordance with Section 7.3. No adjustment shall be made fordividends or other rights for which the record date is prior to such date,except as provided in Section 9.13. Effective Date and Term of Plan The effective date of this Plan (the “Effective Date”) is April 24,2006, the date on which the Plan was approved by the affirmative vote of theholders of Omega’s Common Stock. No Award shall be granted more than ten yearsafter March 27, 2006, the date the Plan was approved by the Board.14. Effect, Amendment, Suspension and Termination Unless otherwise determined by the Committee, Awards received byParticipants under the Plan shall not be deemed a part of a Participant’sregular, recurring compensation for purposes of calculating payments or benefitsunder any Company benefit plan or severance program. No Employee, director orother person shall have any claim or right to be granted an Award under thePlan. There shall be no obligation of uniformity of treatment of Employees,directors or other persons under the Plan and the terms and conditions of Awardsand the Committee’s determinations and interpretations with respect thereto neednot be the same with respect to each Participant (whether or not suchParticipants are similarly situated). Neither adoption of the Plan nor the grantof Awards to a Participant shall affect the Company’s right to grant to suchParticipant awards that are not subject to the Plan, to issue to suchParticipant Common Stock as a bonus or otherwise, or to adopt other plans orarrangements under which Common Stock may be issued to Employees or otherpersons or entities. The Committee reserves the right, at any time and from timeto time, to amend the Plan in any way, or to suspend or terminate the Plan,effective as of the date specified by the Committee when it takes suchaction, which date may be before or after the date the Committee takes suchaction; provided that any such action shall not affect any Awards granted beforethe actual date on which such action is taken by the Committee; and furtherprovided that the approval of Omega’s shareholders shall be required whenevernecessary for the Plan to continue to satisfy the conditions of Rule 16b-3 underthe 1934 Act, Section 422 of the Code with respect to the award of ISOs (unlessthe Board determines that ISOs shall no longer be granted under the Plan), anybylaw, rule or regulation of the market system or stock exchange on whichOmega’s Common Stock is then listed or admitted to trading, or any otherapplicable law, rule or regulation. Unless terminated earlier by the Board, thisPlan shall terminate on such date (which shall not be prior to March 27, 2016)as all Awards under the Plan have been exercised or shall have terminated.15. Other Provisions 15.1 Future Rights. Nothing contained in the Plan or any Award shallconfer upon any Employee or other Participant the right to continue in theemploy of, or to continue to provide service to, the Company or any affiliatedperson, or interfere in any way with the right of the Company or any affiliatedperson to terminate the employment or service of any Employee or otherParticipant for any reason. 15.2 Grant Date. Corporate action constituting an offer by Omega ofCommon Stock to any Participant under the terms of an Award shall be deemedcompleted as of the date of grant of the Award, regardless of when theinstrument, certificate, or letter evidencing the Award is actually received oraccepted by the Participant. 15.3 Transferability. None of a Participant’s rights under any Award orunder the Plan may be assigned or transferred in any manner other than by willor under the laws of descent and distribution. The foregoing shall not, however,restrict a Participant’s rights with respect to Unrestricted Stock or theoutright transfer of cash, nor shall it restrict the ability of a Participant’sheirs, estate, beneficiaries, or personal or legal representatives to enforcethe terms of the Plan with respect to Awards granted to the Participant.Notwithstanding the foregoing, at the discretion of the Committee, the terms ofan Award may permit a Participant to transfer such Award to one or more membersof the Participant’s family or to trusts, family partnerships, or other entitiesfor the benefit of the Participant and/or members of the Participant’s family tothe extent provided in such Award and permitted under the terms for use of FormS-8 promulgated under the Securities Act of 1933, as amended. 15.4 Governing Law. The Plan, and all Awards granted hereunder, shallbe governed by and construed in accordance with the laws of the Commonwealth ofPennsylvania. 15.5 Interpretation. The headings of the Sections of the Plan are forconvenience of reference only and shall not affect the interpretation of thePlan. All pronouns and similar references in the Plan shall be construed to beof such number and gender as the context requires or permits. When used in thisPlan, the words “including” and “include” shall be deemed followed by the words”without limitation.” Except as otherwise indicated, the term “person” as usedin the Plan shall include individuals, corporations, partnerships, trusts,estates, limited liability companies and partnerships and any other type ofentity. 15.6 Severability. If any provision of the Plan is determined to beunenforceable for any reason, then that provision shall be deemed to have beendeleted or modified to the extent necessary to make it enforceable, and theremaining provisions of the Plan shall be unaffected. 15.7 Notices. All notices with respect to the Plan shall be in writingand shall be hand delivered or sent by certified mail or reputable overnightdelivery service, expenses prepaid. Notices to the Company or the Committeeshall be delivered or sent to Omega’s headquarters to the attention of its ChiefFinancial Officer. Notices to any Participant or holder of shares of CommonStock issued pursuant to an Award shall be sufficient if delivered or sent tosuch person’s address as it appears in the regular records of the Company or itstransfer agent. 15.8 Prior Services. In any case that a Participant purchases CommonStock under an Award for a price equal to the par value of the Common Stock, theCommittee may determine, in its sole discretion, that such price has beensatisfied by past services rendered by the Participant. 15.9 Fair Market Value. For the purposes of the Plan and any Awardgranted hereunder, unless otherwise determined by the Committee, the term “fairmarket value” of Common Stock on a specified date shall mean the last sale pricefor one share of Common Stock on the last trading day on or before the specifieddate, as reported on the Nasdaq Stock Market, or on such other market system orstock exchange on which Omega’s Common Stock is then listed or admitted totrading, or, if the foregoing does not apply, the market value determined by theBoard. 15.10 Reduction of Payments. Unless otherwise agreed upon in writing bythe Company and a Participant, in the event that any payment, benefit ortransfer under the Plan to or for the benefit of a Participant pursuant to aChange in Control from the Company or otherwise (a “Payment”) would (i)constitute a “parachute payment” within the meaning of Section 280G of the Code,and (ii) but for this Section 15.10, be subject to the excise tax imposed bySection 4999 of the Code (the “Excise Tax”), then such Payment shall be reducedto the Reduced Amount. The “Reduced Amount” shall be either (x) the largestportion of the Payment that would result in no portion of the Payment beingsubject to the Excise Tax or (y) the largest portion, up to and including thetotal, of the Payment, whichever amount, after taking into account allapplicable federal, state and local employment taxes, income taxes, and theExcise Tax (all computed at the highest applicable marginal rate), results inthe Participant’s receipt, on an after-tax basis, of the greater amount of thePayment notwithstanding that all or some portion of the Payment may be subjectto the Excise Tax. If a reduction in payments or benefits constituting”parachute payments” is necessary so that the Payment equals the Reduced Amount,reduction shall occur in the following order unless the Participant elects inwriting a different order (provided, however, that such election shall besubject to the Company’s approval if made on or after the date on which theevent that triggers the Payment occurs): reduction of cash payments;cancellation of accelerated vesting of Awards; and reduction of employeebenefits. In the event that the acceleration of vesting of Award compensation isto be reduced, such acceleration of vesting shall be cancelled in the reverseorder of the date of grant of the Participant’s Awards unless the Participantelects in writing a different order for cancellation. 15.11 Successors and Assigns. The Plan and any applicable AwardAgreement entered into under the Plan shall be binding on all successors andassigns of a Participant, including the estate of such Participant and theexecutor, administrator or trustee of such estate, or any receiver or trustee inbankruptcy or representative of the Participant’s creditors.