Exhibit 10.145

                                  TIFFANY & CO.
                          2005 EMPLOYEE INCENTIVE PLAN

                                    Section 1
                                     General

     1.1 Purpose.  The 2005 Tiffany & Co.  Employee  Incentive Plan (the "Plan")
has been established by Tiffany & Co., a Delaware  corporation,  (the "Company")
to (i) attract and retain employees;  (ii) motivate  Participants to achieve the
Company's  operating and  strategic  goals by means of  appropriate  incentives;
(iii) provide  incentive  compensation  opportunities  that are competitive with
those of other  companies  competing with the Company and its Related  Companies
for employees;  and (iv) further link Participants'  interests with those of the
Company's other stockholders through compensation that is based on the Company's
Common Stock, thereby promoting the long-term financial interests of the Company
and its  Related  Companies,  including  the  growth  in value of the  Company's
stockholders'  equity and the enhancement of long-term  returns to the Company's
stockholders.

     1.2  Participation.  Subject to the terms and  conditions of the Plan,  the
Committee shall, from time to time,  determine and designate from among Eligible
Individuals those persons who will be granted one or more Awards under the Plan.
Eligible  Individuals who are granted Awards become  "Participants" in the Plan.
In the  discretion  of the  Committee,  a  Participant  may be granted any Award
permitted  under  the  provisions  of the  Plan,  and more than one Award may be
granted to a  Participant.  Awards need not be identical but shall be subject to
the  terms  and  conditions  specified  in the  Plan.  Subject  to the  last two
sentences of subsection 2.2 of the Plan,  Awards may be granted as  alternatives
to or in replacement for awards outstanding under the Plan, or any other plan or
arrangement of the Company or a Related Company (including a plan or arrangement
of a business or entity, all or a portion of which is acquired by the Company or
a Related Company).

     1.3  Operation,   Administration,   and  Definitions.   The  operation  and
administration  of the Plan,  including the Awards made under the Plan, shall be
subject  to  the   provisions   of  Section  4  (relating   to   operation   and
administration).  Initially  capitalized terms used in the Plan shall be defined
as set forth in the Plan (including in the definitional  provisions of Section 7
of the Plan).

     1.4 Amendment to Prior Plan. If this Plan becomes  effective on approval by
the Company's stockholders,  as provided for in Section 4.1 below, the Company's
1998 Employee  Incentive  Plan (the "1998 Plan") shall be deemed amended so that
no further  Awards  shall be made under the 1998 Plan on or after the  Effective
Date of this Plan, although the 1998 Plan shall remain in effect with respect to
Awards made under the 1998 Plan prior to the Effective Date of this Plan.



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                                    Section 2
                                Options and SARs

     2.1 Definitions.

     (a)  The grant of an "Option"  entitles the  Participant to purchase Shares
          at an Exercise Price  established by the  Committee.  Options  granted
          under  this  Section  2 may  be  either  Incentive  Stock  Options  or
          Non-Qualified  Stock  Options,  as determined in the discretion of the
          Committee.  An "Incentive  Stock Option" is an Option that is intended
          to satisfy the requirements  applicable to an "incentive stock option"
          described in section 422(b) of the Code. A  "Non-Qualified  Option" is
          an Option that is not intended to be an  "incentive  stock  option" as
          that term is described in section 422(b) of the Code.

     (b)  The  grant of a stock  appreciation  right  (an  "SAR")  entitles  the
          Participant  to  receive,  in cash or Shares,  value equal to all or a
          portion of the excess of: (a) Fair Market Value of a specified  number
          of  Shares  at the  time  of  exercise,  over  (b) an  Exercise  Price
          established by the Committee.

     2.2 Exercise Price.  The per-Share  "Exercise Price" of each Option and SAR
granted under this Section 2 shall be  established  by the Committee or shall be
determined by a formula  established  by the Committee at the time the Option or
SAR is granted;  except that the  Exercise  Price shall not be less than 100% of
the Fair Market  Value of a Share as of the Pricing  Date.  For  purposes of the
preceding sentence,  the "Pricing Date" shall be the date on which the Option or
SAR is  granted  unless  the  Option  or SAR is  granted  on a date on which the
principal exchange on which the Shares are then listed or admitted to trading is
closed for trading,  in which case the  "Pricing  Date" shall be the most recent
date on which such  exchange  was open for  trading  prior to such  grant  date;
except that the Committee may provide that:  (i) the Pricing Date is the date on
which the recipient is hired or promoted (or similar event), if the grant of the
Option  or SAR  occurs  not more  than 90 days  after  the date of such  hiring,
promotion  or other  event;  and (ii) if an Option or SAR is  granted  in tandem
with, or in substitution for, an outstanding Award, the Pricing Date is the date
of grant of such outstanding Award. Except as provided in subsection 4.2(c), the
Exercise Price of any Option or SAR may not be decreased  after the grant of the
Award.  Neither  an Option nor an SAR may be  surrendered  as  consideration  in
exchange for a new Award with a lower Exercise Price.

     2.3 Exercise. Options and SARs shall be exercisable in accordance with such
terms and  conditions  and  during  such  periods as may be  established  by the
Committee  provided that no Option or SAR shall be exercisable  after,  and each
Option and SAR shall  become void no later than,  the tenth  (10th)  anniversary
date of the date of grant of such Option or SAR.

     2.4 Payment of Option Exercise Price.  The payment of the Exercise Price of
an Option granted under this Section 2 shall be subject to the following:



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     (a)  The Exercise Price may be paid by ordinary check or such other form of
          tender as the Committee may specify.

     (b)  If permitted by the Committee, the Exercise Price for Shares purchased
          upon  the  exercise  of an  Option  may be  paid in part or in full by
          tendering   Shares  (by  either  actual   delivery  of  Shares  or  by
          attestation,  with such Shares  valued at Fair Market  Value as of the
          date of exercise).

     (c)  The Committee  may permit a  Participant  to elect to pay the Exercise
          Price upon the  exercise  of an Option by  irrevocably  authorizing  a
          third party to sell Shares  acquired upon exercise of the Option (or a
          sufficient  portion  of  such  Shares)  and  remit  to the  Company  a
          sufficient  portion of the sale  proceeds  to pay the entire  Exercise
          Price and any tax withholding resulting from such exercise.

                                    Section 3
                               Other Stock Awards

     3.1  Definition.  A "Stock  Award"  is a grant of  Shares  or of a right to
receive Shares (or their cash equivalent or a combination of both).

     3.2 Restrictions on Stock Awards. Each Stock Award shall be subject to such
conditions,  restrictions  and  contingencies  as the Committee shall determine.
These may include  continuous  service  and/or the  achievement  of  Performance
Goals.

                                    Section 4
                          Operation and Administration

     4.1 Effective Date and Duration. Subject to approval of the stockholders of
the Company at the Company's 2005 annual meeting, the Plan shall be effective as
of May 1, 2005 (the "Effective  Date") and shall remain in effect as long as any
Awards under the Plan are outstanding;  provided, however, that, no Award may be
granted or otherwise made under the Plan after April 30, 2015.

     4.2  Shares Subject to Plan.

     (a)  (i) Subject to the following  provisions of this  subsection  4.2, the
          maximum  number of Shares that may be  delivered to  Participants  and
          their   beneficiaries   under  the  Plan   shall  be  Eleven   Million
          (11,000,000)  Shares,  provided  that such maximum shall be reduced by
          one  and 58  hundredths  (1.58)  of a Share  for  each  Share  that is
          delivered pursuant to a Stock Award.

          (ii) Any Shares  granted  under the Plan that are forfeited or fail to
          vest because of the failure to meet an Award  contingency or condition
          shall '



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          again be available for delivery  pursuant to new Awards  granted under
          the  Plan.  To the  extent  any  Shares  covered  by an Award  are not
          delivered to a Participant or a Participant's  beneficiary because the
          Award is  forfeited,  fails to vest or is canceled,  or the Shares are
          not delivered  because the Award is settled in cash, such Shares shall
          not be deemed to have been delivered for purposes of  determining  the
          maximum number of Shares available for delivery under the Plan.

          (iii) If the Exercise Price and/or tax withholding  obligation for any
          Option or any SAR to be  settled in Shares  granted  under the Plan is
          satisfied  by  tendering  Shares  to the  Company  (by  either  actual
          delivery or attestation), the number of Shares issued on such exercise
          without  offset for the number of Shares so  tendered  shall be deemed
          delivered  for purposes of  determining  the maximum  number of Shares
          available for delivery  under the Plan;  if the Exercise  Price and/or
          any tax withholding obligation for any Option or SAR granted under the
          Plan is satisfied by the Company  withholding  Shares, the full number
          of  Shares  for  which  such  Option  or SAR  was  exercised,  without
          reduction for the number of Shares withheld, shall be deemed delivered
          for purposes of determining the maximum number of Shares available for
          delivery under the Plan.

          (iv) Shares  delivered  under the Plan in  settlement,  assumption  or
          substitution  of  outstanding  awards (or  obligations to grant future
          awards) under the plans or  arrangements  of another  entity shall not
          reduce the maximum  number of Shares  available for delivery under the
          Plan, to the extent that such  settlement,  assumption or substitution
          occurs  as a result of the  Company  or a  Related  Company  acquiring
          another entity (or an interest in another entity).

     (b)  Subject to adjustment under paragraph 4.2(c), the following additional
          maximum  limitation is imposed under the Plan:  the aggregate  maximum
          number  of Shares  that may be issued  under  Options  intended  to be
          Incentive Stock Options shall be One Million (1,000,000) shares.

     (c)  If the outstanding  Shares are increased or decreased,  or are changed
          into or exchanged for cash,  property or a different number or kind of
          shares or securities, or if cash, property, Shares or other securities
          are distributed in respect of such outstanding  Shares, in either case
          as   a   result   of   one   or   more    mergers,    reorganizations,
          reclassifications,  recapitalizations,  stock  splits,  reverse  stock
          splits,  stock  dividends,  dividends  (other than regular,  quarterly
          dividends),  or other  distributions,  spin-offs  or the  like,  or if
          substantially  all of the property and assets of the Company are sold,
          then,  unless the terms of the  transaction  shall provide  otherwise,
          appropriate  adjustments  shall be made in the number  and/or  type of
          Shares or securities  for which Awards may thereafter be granted under
          the Plan and for  which  Awards  then  outstanding  under the Plan may
          thereafter be


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          exercised.  Any such  adjustments in outstanding  Awards shall be made
          without  changing  the  aggregate  Exercise  Price  applicable  to the
          unexercised  portions of  outstanding  Options or SARs.  The Committee
          shall make such  adjustments  to preserve  the  benefits or  potential
          benefits of the Plan and the Awards; such adjustments may include, but
          shall not be  limited  to,  adjustment  of: (i) the number and kind of
          shares which may be delivered under the Plan; (ii) the number and kind
          of shares subject to outstanding  Awards;  (iii) the Exercise Price of
          outstanding Options and SARs; (iv) the limits specified in subsections
          4.2(a)(i) and 4.2(b)  above;  and (v) any other  adjustments  that the
          Committee determines to be equitable.  No right to purchase or receive
          fractional shares shall result from any adjustment in Options, SARs or
          Stock Awards  pursuant to this paragraph  4.2(c).  In case of any such
          adjustment,  Shares subject to the Option, SAR or Stock Award shall be
          rounded up to the nearest whole Share.

     4.3 Limit on  Distribution.  Distribution  of Shares or other amounts under
the Plan shall be subject to the following:

     (a)  Notwithstanding  any other  provision of the Plan,  the Company  shall
          have no  obligation  to deliver any Shares  under the Plan or make any
          other  distribution of benefits under the Plan unless such delivery or
          distribution would comply with all applicable laws (including, without
          limitation,  the  requirements  of the Securities Act of 1933) and the
          applicable  requirements of any securities exchange or similar entity,
          and the Committee may impose such  restrictions on any Shares acquired
          pursuant to the Plan as the Committee may deem  advisable,  including,
          without  limitation,  restrictions under applicable federal securities
          laws,  under the  requirements  of any Stock  exchange  or market upon
          which such Shares are then listed  and/or  traded,  and under any blue
          sky or state  securities laws applicable to such Shares.  In the event
          that the Committee determines in its discretion that the registration,
          listing or  qualification of the Shares issuable under the Plan on any
          securities  exchange  or  under  any  applicable  law or  governmental
          regulation  is necessary as a condition to the issuance of such Shares
          under an Option or Stock  Award,  such Option or Stock Award shall not
          be   exercisable  or  exercised  in  whole  or  in  part  unless  such
          registration, listing and qualification, and any necessary consents or
          approvals have been unconditionally obtained.

     (b)  Distribution   of  Shares   under  the  Plan  may  be  effected  on  a
          non-certificated basis, to the extent not prohibited by applicable law
          or the applicable rule of any stock exchange.

     4.4 Tax  Withholding.  Before  distribution  of Shares under the Plan,  the
Company may require the  recipient to remit to the Company an amount  sufficient
to satisfy any federal,  state or local tax withholding  requirements or, in the
discretion  of the



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Committee,  the  Company may  withhold  from the Shares to be  delivered  and/or
otherwise  issued  Shares  sufficient  to  satisfy  all or a portion of such tax
withholding  requirements.  Whenever  under the Plan  payments are to be made in
cash,  such payments may be net of an amount  sufficient to satisfy any federal,
state or local tax withholding requirements. Neither the Company nor any Related
Company  shall be liable  to a  Participant  or any  other  person as to any tax
consequence  expected,  but not realized, by any Participant or other person due
to the receipt or exercise of any Award hereunder.

     4.5 Reserved  Rights.  Subject to the  limitations of subsection 4.2 on the
number of Shares that may be delivered  under the Plan,  the Plan does not limit
the right of the  Company to use  available  Shares,  including  authorized  but
un-issued shares and treasury shares,  as the form of payment for  compensation,
grants  or  rights  earned  or  due  under  any  other   compensation  plans  or
arrangements  of the  Company  or a  Related  Company,  including  the plans and
arrangements of the Company or a Related Company acquiring another entity (or an
interest in another entity).

     4.6  Dividends  and  Dividend   Equivalents.   An  Award  may  provide  the
Participant with the right to receive dividends or dividend  equivalent payments
with  respect to Shares  which may be either  paid  currently  or credited to an
account  for the  Participant,  and  which may be  settled  in cash or Shares as
determined by the  Committee.  Any such  settlements,  and any such crediting of
dividends or dividend  equivalents or  reinvestment  in Shares may be subject to
such  conditions,   restrictions  and   contingencies  as  the  Committee  shall
establish, including reinvestment of such credited amounts in Share equivalents.

     4.7  Settlements;  Deferred  Delivery.  Awards may be settled  through cash
payments,  the  delivery of Shares,  the  granting  of  replacement  Awards,  or
combinations   thereof,  all  subject  to  such  conditions,   restrictions  and
contingencies  as the  Committee  shall  determine.  The Committee may establish
provisions for the deferred delivery of Shares upon the exercise of an Option or
SAR or receipt of a Stock  Award with the  deferral  evidenced  by use of "Stock
Units" equal in number to the number of Shares whose delivery is so deferred.  A
"Stock Unit" is a bookkeeping  entry  representing  an amount  equivalent to the
Fair Market Value of one Share.  Stock Units represent an unfunded and unsecured
obligation  of the  Company  except  as  otherwise  provided  by the  Committee.
Settlement of Stock Units upon  expiration of the deferral  period shall be made
in Shares or otherwise as determined by the Committee.  The amount of Shares, or
other  settlement  medium,  to be so distributed may be increased by an interest
factor or by dividend equivalents.  Until a Stock Unit is settled, the number of
Shares  represented  by a Stock Unit shall be subject to adjustment  pursuant to
paragraph  4.2(c).  Unless  otherwise  specified by the Committee,  any deferred
delivery  of Shares  pursuant  to an Award  shall be settled by the  delivery of
Shares no later  than the 60th day  following  the date the  person to whom such
deferred  delivery  must be made  ceases to be an  employee  of the Company or a
Related Company.

     4.8 Transferability. Unless otherwise provided by the Committee, any Option
and SAR granted  under the Plan,  and,  until  vested,  any Stock Award or other
Shares-based



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Award  granted  under the Plan,  shall by its  terms be  nontransferable  by the
Participant  otherwise  than by will,  the laws of descent and  distribution  or
pursuant to a "domestic  relations  order", as defined in the Code or Title I of
the Employee  Retirement Income Security Act or the rules thereunder,  and shall
be exercisable by, or become vested in, during the Participant's  lifetime, only
by the Participant.

     4.9 Form and Time of Elections.  Unless otherwise  specified  herein,  each
election  required or  permitted to be made by any  Participant  or other person
entitled  to  benefits  under  the  Plan,  and any  permitted  modification,  or
revocation thereof,  shall be in writing filed with the secretary of the Company
at such times, in such form, and subject to such  restrictions  and limitations,
not inconsistent with the terms of the Plan, as the Committee shall require.

     4.10 Award Agreements with Company;  Vesting and Acceleration of Vesting of
Awards.  At the time of an Award to a participant  under the Plan, the Committee
may require a Participant to enter into an agreement with the Company (an "Award
Agreement")  in a form  specified  by the  Committee,  agreeing to the terms and
conditions  of the  Plan  and to  such  additional  terms  and  conditions,  not
inconsistent  with the  Plan,  as the  Committee  may,  in its sole  discretion,
prescribe,  including,  but  not  limited  to,  conditions  to  the  vesting  or
exercisability  of an Award,  such as  continued  service  to the  Company  or a
Related  Company for a specified  period of time.  The  Committee may waive such
conditions to and/or accelerate  exercisability or vesting of an Option,  SAR or
Stock Award,  either  automatically  upon the  occurrence  of  specified  events
(including in  connection  with a change of control of the Company) or otherwise
in its discretion.

     4.11 Limitation of Implied Rights.

     (a)  Neither a  Participant  nor any other person  shall,  by reason of the
          Plan or any  Award  Agreement,  acquire  any  right in or title to any
          assets,  funds or  property  of the  Company  or any  Related  Company
          whatsoever, including, without limitation, any specific funds, assets,
          or other  property  which the Company or any Related  Company,  in its
          sole  discretion,  may set aside in  anticipation of a liability under
          the Plan. A  Participant  shall have only a  contractual  right to the
          Shares or amounts,  if any,  payable under the Plan,  unsecured by the
          assets of the Company or of any Related Company.  Nothing contained in
          the Plan or any Award Agreement shall  constitute a guarantee that the
          assets of such  companies  shall be  sufficient to pay any benefits to
          any person.

     (b)  Neither the Plan nor any Award Agreement  shall  constitute a contract
          of  employment,  and  selection  as a  Participant  will  not give any
          employee  the right to be retained in the employ of the Company or any
          Related Company, nor any right or claim to any benefit under the Plan,
          unless such right or claim has specifically accrued under the terms of
          the Plan or an Award.  Except as  otherwise  provided in the Plan,  no
          Award under the Plan shall confer upon the holder thereof any right as
          a stockholder of the



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          Company  prior  to the  date on  which  the  individual  fulfills  all
          conditions for receipt of such rights.

     4.12  Evidence.  Evidence  required  of  anyone  under  the  Plan may be by
certificate,  affidavit,  document or other  information which an officer of the
Company  acting on it considers  pertinent  and  reliable,  and signed,  made or
presented by the proper party or parties.

     4.13 Action by Company or Related Company. Any action required or permitted
to be taken by the Company or any Related  Company shall be by resolution of its
board of directors, or by action of one or more members of such board (including
a committee  of such board) who are duly  authorized  to act for such board,  or
(except to the extent  prohibited by applicable  law or applicable  rules of any
Stock  exchange)  by a duly  authorized  officer of the Company or such  Related
Company.

     4.14 Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

     4.15 Liability for Cash Payments.  Each Related Company shall be liable for
payment of cash due under the Plan with respect to any Participant to the extent
that such benefits are  attributable  to the services  rendered for that Related
Company by such  Participant.  Any  disputes  relating to liability of a Related
Company for cash payments shall be resolved by the Committee.

     4.16  Non-exclusivity  of the Plan. Neither the adoption of the Plan by the
Board  of  Directors  of the  Company  nor  the  submission  of the  Plan to the
stockholders  of the Company for  approval  shall be  construed  as creating any
limitations on the power of such Board of Directors or a committee of such Board
to adopt such other  incentive  arrangements  as it or they may deem  desirable,
including without limitation, the granting of restricted stock, stock options or
cash  bonuses  otherwise  than  under the  Plan,  and such  arrangements  may be
generally applicable or applicable only in specific cases.

                                    Section 5
                                    Committee

     5.1  Administration.  The authority to control and manage the operation and
administration  of the Plan shall be vested in a committee (the  "Committee") in
accordance with this Section 5.

     5.2  Selection of Committee.  The Committee  shall be selected by the Board
and shall  consist  of two or more  members  of the  Board,  each of whom  shall
qualify as "outside directors" for purposes of Section 162(m) of the Code and as
"independent" for purposes of The New York Stock Exchange Listing standards.



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     5.3 Powers of Committee.  The authority to manage and control the operation
and administration of the Plan shall be vested in the Committee,  subject to the
following:

     (a)  Subject to the  provisions of the Plan,  the  Committee  will have the
          authority and discretion to select from amongst  Eligible  Individuals
          those  persons  who  shall  receive  Awards,  to  determine  who is an
          Eligible  Individual,  to  determine  the time or time of receipt,  to
          determine the types of Awards and the number of Shares  covered by the
          Awards,  to  establish  the  terms,  conditions,   Performance  Goals,
          restrictions,   and  other   provisions   of  such  Awards  and  Award
          Agreements,  and (subject to the restrictions imposed by Section 6) to
          cancel, amend or suspend Awards. In making such Award  determinations,
          the Committee may take into account the nature of services rendered by
          the  Eligible  Individual,   the  Eligible  Individual's  present  and
          potential contribution to the Company's or a Related Company's success
          and such other factors as the Committee deems relevant.

     (b)  Subject to the  provisions of the Plan,  the  Committee  will have the
          authority and discretion to determine the extent to which Awards under
          the Plan will be  structured  to  conform to the  requirements  of the
          Performance-Based  Exception and to take such action,  establish  such
          procedures,  and  impose  such  restrictions  at the time  Awards  are
          granted as the Committee  determines to be necessary or appropriate to
          conform to such requirements.

     (c)  The  Committee  will have the  authority  and  discretion to establish
          terms  and  conditions  of Awards as the  Committee  determines  to be
          necessary or  appropriate  to conform to  applicable  requirements  or
          practices of jurisdictions outside the United States.

     (d)  The Committee  will have the authority and discretion to interpret the
          Plan,  to  establish,  amend and  rescind  any  rules and  regulations
          relating to the Plan,  to determine  the terms and  provisions  of any
          Award  Agreements,  and to make all other  determinations  that may be
          necessary or advisable for the administration of the Plan.

     (e)  Any  interpretation of the Plan by the Committee and any decision made
          by the Committee under the Plan are final and binding.

     (f)  In controlling  and managing the operation and  administration  of the
          Plan,  the Committee  shall act by a majority of its then members,  by
          meeting or by writing  filed without a meeting.  The  Committee  shall
          maintain  adequate  records  concerning  the Plan and  concerning  its
          proceedings  and acts in such  form and  detail as the  Committee  may
          decide.



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     5.4 Delegation by Committee.  Except to the extent prohibited by applicable
law or the applicable rules of a Stock exchange,  the Committee may allocate all
or any  portion  of its powers  and  responsibilities  to any one or more of its
members and may delegate all or part of its  responsibilities  and powers to any
person or persons  selected  by it. Any such  allocation  or  delegation  may be
revoked by the Committee at any time.

     5.5  Information  to be  Furnished  to  Committee.  The Company and Related
Companies  shall furnish the Committee with such data and  information as may be
requested by the Committee in order to discharge its duties.  The records of the
Company and Related Companies as to an Eligible  Individual's or a Participant's
employment, consulting services, termination of employment or services, leave of
absence, reemployment and compensation shall be conclusive on all persons unless
determined  to be incorrect by the  Committee.  Participants  and other  persons
entitled to benefits  under the Plan must furnish the Committee  such  evidence,
data or information as the Committee  considers  necessary or desirable to carry
out the terms of the Plan.


                                    Section 6
                            Amendment and Termination

     6.1 Board's Right to Amend or  Terminate.  Subject to the  limitations  set
forth in this  Section 6, the Board may,  at any time,  amend or  terminate  the
Plan.

     6.2 Amendments Requiring  Stockholder  Approval.  Other than as provided in
subsection 4.2 (c) (relating to certain adjustments to shares),  the approval of
the  Company's  stockholders  shall be required  for any  amendment  which:  (i)
increases  the maximum  number of Shares that may be delivered  to  Participants
under  the Plan set forth in  subsection  4.2(a);  (ii)  increases  the  maximum
limitation  contained in Section  4.2(b);  (iii) decreases the exercise price of
any Option or SAR below the minimum provided in subsection 2.2; (iv) modifies or
eliminates the provisions  stated in the final two sentences of subsection  2.2;
(v)  increases  the maximum  term of any Option or SAR set forth in Section 2.3;
(vi) provides any Performance Measure other than those listed in Section 9.1; or
(vii) modifies or eliminates the provisions  stated in subsection 1.4.  Whenever
the  approval  of the  Company's  stockholders  is  required  pursuant  to  this
subsection 6.2, such approval shall be sufficient if obtained by a majority vote
of those  stockholders  present or represented and actually voting on the matter
at a meeting of  stockholders  duly called,  at which  meeting a majority of the
outstanding shares actually vote on such matter.

                                    Section 7
                                  Defined Terms

For the  purposes  of the Plan,  the terms  listed  below  shall be  defined  as
follows:

Award. The term "Award" shall mean, individually and collectively,  any award or
benefit  granted  to  any  Participant  under  the  Plan,   including,   without
limitation, the grant of Options, SARs, Stock Awards and Other Incentive Awards.



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Award Agreement. The term "Award Agreement" is defined in subsection 4.10.

Board. The term "Board" shall mean the Board of Directors of the Company.

Code. The term "Code" shall mean the Internal  Revenue Code of 1986, as amended.
A  reference  to any  provision  of the  Code  shall  include  reference  to any
successor  provision  of the Code or of any law that is enacted  to replace  the
Code.

Eligible Individual.  The term "Eligible  Individual" shall mean any employee of
the Company or a Related  Company.  For purposes of the Plan,  the status of the
Chairman of the Board of Directors  as an employee  shall be  determined  by the
Committee.

Fair Market  Value.  For purposes of  determining  the "Fair Market  Value" of a
Share, the following rules shall apply:

          (i) If the Shares are at the time listed or admitted to trading on any
          stock  exchange,  then the Fair Market Value shall be the mean between
          the lowest and the highest  reported sales prices of the Shares on the
          date in  question  on the  principal  exchange on which the Shares are
          then  listed or admitted  to  trading.  If no reported  sale of Shares
          takes place on the date in question on the  principal  exchange,  then
          the  reported  closing  asked  price of the Shares on such date on the
          principal exchange shall be determinative of Fair Market Value.

          (ii) If the Shares are not at the time  listed or  admitted to trading
          on a stock  exchange,  the Fair Market Value shall be the mean between
          the lowest reported bid price and the highest  reported asked price of
          the Shares on the date in question in the over-the-counter  market, as
          such  prices are  reported  in a  publication  of general  circulation
          selected by the Committee and regularly  reporting the market price of
          the Shares in such market.

          (iii) If the Shares are not listed or admitted to trading on any stock
          exchange  or traded in the  over-the-counter  market,  the Fair Market
          Value shall be as determined by the Committee, acting in good faith.

Named  Executive   Employee.   The  term  "Named  Executive  Employee"  means  a
Participant  who,  as of the date of  vesting  and/or  payout  of an  Award,  as
applicable,  is one  of the  group  of  covered  employees,  as  defined  in the
regulations promulgated under Code section 162(m), or any successor statute.

Participant.  The term "Participant"  means an Eligible  Individual who has been
granted an Award under the Plan. For purposes of the  administration  of Awards,
the term  Participant  shall  also  include  a  former  employee  or any  person
(including an estate) who is a beneficiary  of a former  employee and any person
(including  any  estate) to whom an Award has been  assigned or  transferred  as
permitted by the Committee.



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Other Incentive  Award.  The term "Other  Incentive Award" means a cash award as
described in Section 8 below.

Performance-Based  Exception.  The term "Performance-Based  Exception" means the
performance-based  exception  from  the tax  deductibility  limitations  of Code
section 162(m).

Performance  Goals.  The term  "Performance  Goals" means one or more  objective
targets  measured  by the  Performance  Measure,  the  attainment  of which  may
determine the degree of payout and/or vesting with respect to Awards.

Performance  Period. The term "Performance  Period" means the time period during
which Performance Goals must be achieved with respect to an Award, as determined
by the  Committee,  but  which  period  shall  not be  shorter  than  one of the
Company's fiscal years.

Performance  Measure.  The term "Performance  Measure" refers to the performance
measures discussed in Section 9 of the Plan.

Related Companies. The term "Related Company" means

          (i) any corporation, partnership, joint venture or other entity during
          any period in which such  corporation,  partnership,  joint venture or
          other  entity owns,  directly or  indirectly,  at least fifty  percent
          (50%) of the  voting  power of all  classes  of  voting  shares of the
          Company  (or any  corporation,  partnership,  joint  venture  or other
          entity which is a successor to the Company);

          (ii) any  corporation,  partnership,  joint  venture  or other  entity
          during  any  period  in  which  the  Company   (or  any   corporation,
          partnership, joint venture or other entity which is a successor to the
          Company  or any entity  that is a Related  Company by reason of clause
          (i) next above) owns, directly or indirectly, at least a fifty percent
          (50%) voting or profits interest; or

          (iii) any  business  venture in which the  Company  has a  significant
          interest, as determined in the discretion of the Committee.

Shares.  The term "Shares" shall mean shares of the Common Stock of the Company,
$.01 par value, as presently  constituted,  subject to adjustment as provided in
paragraph 4.2(c) above.

                                    Section 8
                             Other Incentive Awards

     8.1 Grant of Other Incentive Awards. Subject to the terms and provisions of
the Plan, Other Incentive Awards may be granted to Eligible Individuals, in such
amount,



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upon such terms, and at any time and from time to time as shall be determined by
the Committee.

     8.2 Other  Incentive Award  Agreement.  Each Other Incentive Award shall be
evidenced  by an Award  Agreement  that  shall  specify  the amount of the Other
Incentive  Award or the  means by which it will be  calculated,  the  terms  and
conditions  applicable  to such Award,  the  applicable  Performance  Period and
Performance  Goals,  if any, and such other  provisions as the  Committee  shall
determine, in all cases subject to the terms and provisions of the Plan.

     8.3  Nontransferability.  Except as  otherwise  provided in the  applicable
Award Agreement,  Other Incentive Awards may not be sold, transferred,  pledged,
assigned or otherwise alienated or hypothecated,  other than by will or the laws
of descent and distribution.

     8.4 Form and Timing of Payment of Other Incentive Awards.  Payment of Other
Incentive  Awards shall be made in cash and at such times as  established by the
Committee subject to the terms of the Plan.

                                    Section 9
                           Performance-Based Measures

     9.1 Performance  Measures.  The Performance  Measures used to determine the
attainment of Performance Goals with respect to Other Incentive Awards and Stock
Awards to Named  Executive  Employees  which are  designed  to  qualify  for the
Performance-Based  Exception shall be (A) a change in the Fair Market Value of a
Share or (B) any one or more of the  following,  as  reported  in the  Company's
Annual Report to Stockholders  which is included in the Company's  Annual Report
on Form 10-K or which  may be  mathematically  derived  from  financial  results
reported in such Annual Report, including Annual Reports made for prior years:

     (a)  the Company's consolidated net earnings;

     (b)  the Company's consolidated earnings per share on a diluted basis;

     (c)  the Company's consolidated net sales;

     (d)  net sales for any channel of distribution  (as defined in Management's
          Discussion  and  Analysis  of  Financial   Condition  and  Results  of
          Operations);

     (e)  the Company's consolidated return on average assets;

     (f)  the  Company's   consolidated  selling,   general  and  administrative
          expenses;

     (g)  the Company's consolidated earnings from operations;



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     (h)  the Company's consolidated earnings before income taxes; and

     (i)  the Company's consolidated net cash provided by operating activities.

The Committee may  appropriately  adjust any evaluation of  performance  under a
Performance  Goal to exclude any of the  following  events that occurs  during a
Performance Period: (i) asset write-downs,  (ii) litigation or claim judgment or
settlements,  (iii) the effect of changes in tax law,  accounting  principles or
other such laws or  provisions  affecting  reported  results,  (iv) accruals for
reorganization and restructuring  programs, and (v) extraordinary  non-recurring
items as  described  in  Accounting  Principles  Board  Opinion No. 30 and/or in
management's  discussion  and  analysis of  financial  condition  and results of
operations appearing in said Annual Report for the applicable year.

     9.2 Discretion to Adjust  Awards/Performance  Goals. The Committee  retains
the  discretion to adjust the  determination  of the degree of attainment of the
pre-established  Performance Goals for Awards;  provided,  however,  that Awards
which are designed to qualify for the Performance-Based Exception, and which are
held by Named Executive  Officers,  may not be subjected to an adjustment  which
would  yield  an  increased  payout,  although  the  Committee  may  retain  the
discretion to make an adjustment  which would yield a decreased  payout.  In the
event that applicable tax and/or  securities laws change to permit the Committee
discretion to alter the  governing  Performance  Measure for Awards  designed to
qualify for the Performance-Based Exception and held by Named Executive Officers
without obtaining  stockholder approval of such change, the Committee shall have
sole discretion to make such change without obtaining  stockholder  approval. In
addition,  in the event that the  Committee  determines  that it is advisable to
grant Awards  which will not qualify for the  Performance-Based  Exception,  the
Committee  may make such grants  without  satisfying  the  requirements  of Code
Section 162(m).

                                   Section 10
                                   Successors

     All  obligations of the Company under the Plan with respect to Awards shall
be binding on any  successor  to the  Company,  whether  the  existence  of such
successor is the result of a direct or indirect purchase, merger,  consolidation
or otherwise,  of all or substantially  all of the business and/or assets of the
Company.



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