EXHIBIT 10.30

 

SPX CORPORATION
1997 NON-EMPLOYEE DIRECTORS’
COMPENSATION PLAN

 

Table of Contents

 

SECTION 1.

ESTABLISHMENT, PURPOSES AND RESTATEMENT DATE OF PLAN

1

1.1

Establishment

1

1.2

Purposes

1

1.3

Restatement Date

1

 

 

 

SECTION 2.

DEFINITIONS

2

 

 

 

SECTION 3.

ELIGIBILITY

4

 

 

 

SECTION 4.

SHARES OF COMMON STOCK AVAILABLE

5

4.1

Number

5

4.2

Unused Stock

5

4.3

Adjustment in Capitalization

5

 

 

 

SECTION 5.

DEFERRED ACCOUNT

6

5.1

Deferred Account

6

5.2

Conversion of Retirement Plan Benefit

6

5.3

Investment of Account

6

5.4

Dividends

6

5.5

Nontransferability

7

 

 

 

SECTION 6.

DISTRIBUTION OF ACCOUNT

8

6.1

Cessation of Directorship; Attainment of Age 70

8

6.2

Death

8

 

 

 

SECTION 7.

DIRECTOR OPTIONS

9

7.1

Grant and Eligibility

9

7.2

Director Option Agreement

9

7.3

Tax Status

9

7.4

Director Option Price and Payment

9

7.5

Vesting and Duration of Director Options

9

 

 

 

SECTION 8.

CASH PAYMENT

10

8.1

EVA Amounts

10

8.2

Director Fee Amounts

10

 

 

 

SECTION 9.

EFFECT OF CHANGE IN CONTROL

12

 

i

 

9.1

Change in Control

12

9.1A

409A Change in Control

13

9.2

Effect of Change in Control

14

 

 

 

SECTION 10.

AMENDMENT AND TERMINATION

15

 

 

 

SECTION 11.

MISCELLANEOUS

16

11.1

Rights of Directors

16

11.2

Funding Not Required

16

11.3

Indemnification

16

11.4

Requirements of Law

16

11.5

Governing Law

17

11.6

Administration

17

11.7

Tax Withholding

17

11.8

Construction

17

 

ii

 

SECTION 1.  ESTABLISHMENT, PURPOSES AND RESTATEMENT DATE OF PLAN

 

1.1                                 Establishment.  SPX Corporation, a Delaware
corporation, established the “SPX CORPORATION 1997 NON-EMPLOYEE DIRECTORS’
COMPENSATION PLAN” (the “Plan”) effective as of February 26, 1997.

 

1.2                                 Purposes.  In conjunction with the SPX
Corporation 2005 Non-Employee Directors’ Compensation Plan, the purpose of the
Plan is to advance the interests of the Company and its shareholders by
providing a compensation program for Non-Employee Directors.  By thus
compensating Non-Employee Directors, the Company seeks to attract, retain,
compensate and motivate those highly competent individuals whose judgment,
initiative, leadership, and efforts are important to the continued success of
the Company.

 

1.3                                 Restatement Date.  The Plan is hereby
amended and restated effective as of December 17, 2008.

 

 

SECTION 2.  DEFINITIONS

 

As used herein, the following terms shall have the meanings hereinafter set
forth:

 

(A)                                  “ANNUAL MEETING” MEANS THE ANNUAL MEETING
OF THE SHAREHOLDERS OF THE COMPANY.

 

(B)                                 “CASH PAYMENT” MEANS THE (I) CASH AMOUNT
PAYABLE TO A NON-EMPLOYEE DIRECTOR PURSUANT TO SECTION 8 BELOW AND
(II) EFFECTIVE FOR CALENDAR YEARS AFTER DECEMBER 31, 2008, ANY LEAD DIRECTOR FEE
PAYMENTS THAT A NON-EMPLOYEE DIRECTOR MAY OTHERWISE BE ENTITLED TO.

 

(C)                                  “BOARD” MEANS THE BOARD OF DIRECTORS OF THE
COMPANY.

 

(D)                                 “CODE” MEANS THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.  REFERENCES TO ANY SECTION OF THE CODE SHALL INCLUDE ANY
SUCCESSOR PROVISION THERETO AND APPLICABLE REGULATIONS OR GUIDANCE THEREUNDER.

 

(E)                                  “COMMON STOCK” OR “SHARE” MEANS THE COMMON
STOCK, PAR VALUE $10.00 PER SHARE, OF THE COMPANY OR SUCH OTHER CLASS OF SHARES
OR OTHER SECURITIES AS MAY BE APPLICABLE PURSUANT TO THE PROVISIONS OF
SUBSECTION 4.3.

 

(F)                                    “COMPANY” MEANS SPX CORPORATION, A
DELAWARE CORPORATION.

 

(G)                                 “DEFERRED MUTUAL FUND UNIT” MEANS THE
EQUIVALENT OF ONE SHARE OF A RESPECTIVE MUTUAL FUND OR OTHER SECURITY DESIGNATED
BY THE BOARD FOR PURPOSES OF MEASURING THE VALUE OF AN ACCOUNT ESTABLISHED
PURSUANT TO SECTION 5 OF THE PLAN.

 

(H)                                 “DIRECTOR OPTIONS” MEANS OPTIONS GRANTED
HEREUNDER TO NON-EMPLOYEE DIRECTORS.

 

(I)                                     “DIVIDEND DATE” MEANS WITH RESPECT TO
THE MUTUAL FUND OR OTHER SECURITIES UNDERLYING A DEFERRED MUTUAL FUND UNIT, THE
PAYMENT DATE OF ANY DIVIDEND DECLARED ON SUCH MUTUAL FUND OR SECURITIES.

 

(J)                                     “ESTABLISHMENT DATE” MEANS FEBRUARY 26,
1997, THE DATE ON WHICH THE PLAN WAS APPROVED BY THE BOARD, AND WHICH PLAN WAS
APPROVED BY THE COMPANY’S SHAREHOLDERS AT THE 1997 ANNUAL MEETING.

 

(K)                                  “EVA PLAN” MEANS THE SPX CORPORATION EVA
INCENTIVE COMPENSATION PLAN.

 

(L)                                     “EVA PLAN BONUS MULTIPLE” MEANS, AS TO
ANY CALENDAR YEAR, THE AGGREGATE AMOUNT OF THE DECLARED BONUSES (AS SUCH TERM IS
DEFINED IN THE EVA PLAN) FOR THE COMPANY’S CHIEF EXECUTIVE OFFICER WITH RESPECT
TO THE CALENDAR YEAR, DIVIDED BY THE TARGET BONUS (AS SUCH TERM IS DEFINED IN
THE EVA PLAN) AMOUNT OF THE CHIEF EXECUTIVE OFFICER FOR THE CALENDAR YEAR.

 

2

 

(M)                               “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.  REFERENCES TO ANY SECTION OF THE EXCHANGE ACT SHALL
INCLUDE ANY SUCCESSOR PROVISION THERETO AND APPLICABLE REGULATIONS OR GUIDANCE
THEREUNDER.

 

(N)                                 “FAIR MARKET VALUE” MEANS, AS TO ANY DATE,
THE CLOSING PRICE OF A SHARE OF COMMON STOCK AS REPORTED IN THE “NYSE-COMPOSITE
TRANSACTIONS” SECTION OF THE MIDWEST EDITION OF THE WALL STREET JOURNAL FOR SUCH
DATE OR, IF NO PRICES ARE QUOTED FOR SUCH DATE, ON THE NEXT PRECEDING DATE ON
WHICH SUCH PRICES OF COMMON STOCK ARE SO QUOTED.

 

(O)                                 “GRANT DATE” MEANS, WITH RESPECT TO EACH
INDIVIDUAL WHO IS A NON-EMPLOYEE DIRECTOR ON OR AFTER THE ESTABLISHMENT DATE,
EACH OF THE ESTABLISHMENT DATE, JANUARY 15, 1998, AND JANUARY 15, 1999, AND SUCH
OTHER DATES THEREAFTER AS THE BOARD MAY ESTABLISH.  WITH RESPECT TO ANY
INDIVIDUAL WHO FIRST BECOMES A NON-EMPLOYEE DIRECTOR AFTER THE ESTABLISHMENT
DATE AND PRIOR TO JANUARY 15, 1999, THE DATE THE INDIVIDUAL FIRST BECOMES A
NON-EMPLOYEE DIRECTOR SHALL ALSO BE A GRANT DATE.

 

(P)                                 “NON-EMPLOYEE DIRECTOR” MEANS ANY PERSON WHO
IS A MEMBER OF THE BOARD AND WHO IS NOT, AS OF THE DATE OF AN AWARD UNDER THE
PLAN, AN EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.

 

(Q)                                 “RETIREMENT PLAN” MEANS THE SPX CORPORATION
DIRECTORS’ RETIREMENT PLAN.

 

(R)                                    “RETIREMENT PLAN CONVERSION DATE” MEANS
THE DATE OF THE 1997 ANNUAL MEETING.

 

3

 

SECTION 3.  ELIGIBILITY

 

Each Non-Employee Director as of the Establishment Date and each person who
becomes a Non-Employee Director after the Establishment Date shall be eligible
to participate in the Plan.

 

4

 

SECTION 4.  SHARES OF COMMON STOCK AVAILABLE

 

4.1                                 Number.  The total number of shares of
Common Stock of the Company subject to issuance under the Plan, and subject to
adjustment upon occurrence of any of the events indicated in subsection 4.3, may
not exceed 75,000. The Shares to be delivered under the Plan may consist, in
whole or in part, of authorized but unissued stock or treasury stock not
reserved for any other purpose.

 

4.2                                 Unused Stock.  In the event any shares of
Common Stock that are subject to a Director Option which, for any reason,
expires, terminates or is canceled as to such shares, such shares again shall
become available for issuance under the Plan.

 

4.3                                 Adjustment in Capitalization.  In the event
of any change in the outstanding shares of Common Stock that occurs after
ratification of the Plan by the shareholders of the Company by reason of a
Common Stock dividend or split, recapitalization, merger, consolidation,
combination, exchange of shares, or other similar corporate change, the
aggregate number of shares of Common Stock subject to Director Options to be
granted or outstanding pursuant to Section 7 hereof, and/or the stated option
price, shall be appropriately adjusted by the Board, whose determination shall
be conclusive; provided, however, that fractional shares shall be rounded to the
nearest whole share.

 

5

 

SECTION 5.  DEFERRED ACCOUNT

 

5.1                                 Deferred Account.  The Company shall
establish a deferred account (an “Account”) for each current Non-Employee
Director whose benefit under the Retirement Plan is converted pursuant to
subsection 5.2 below and for any other Non-Employee Director who makes an
election to defer Cash Payments in accordance with Section 8 hereof.  The
Account may be further sub-divided by the Company in order to reflect Account
amounts that are exempt from Code Section 409A and Account amounts that are
subject to Code Section 409A.  Distributions equal to the balance credited to
the Non-Employee Director’s Account shall be made in cash in accordance with
Sections 6 or 9 hereof.  The balance of the Account is dependent on the value
per share of the mutual fund shares or other securities underlying the Deferred
Mutual Fund Units on the date of distribution, and is therefore subject to
market fluctuations in value until such distribution.

 

5.2                                 Conversion of Retirement Plan Benefit.  On
the Retirement Plan Conversion Date, the accrued benefit of each current
Non-Employee Director under the Retirement Plan shall be converted into Deferred
Mutual Fund Units in an amount equal to 115% of the present value of such
Non-Employee Director’s accrued benefit under the Retirement Plan, valued as of
January 1, 1997.  Prior to the Retirement Plan Conversion Date, each
Non-Employee Director shall make an election with respect to the conversion of
such Non-Employee Director’s vested benefit among the respective Deferred Mutual
Fund Units.  Such conversion shall be effective as of the Retirement Plan
Conversion Date and will take place based on the value of the mutual fund shares
or other securities underlying such Deferred Mutual Fund Units on such date.

 

5.3                                 Investment of Account.  A Non-Employee
Director may elect to change the mix of the Deferred Mutual Fund Units credited
to the Non-Employee Director’s Account in accordance with the administrative
procedures and rules set by the Board or Company from time to time.  Such
conversion shall be effective as of the applicable date determined according to
such procedures and will take place based on the value of the mutual fund shares
or other securities underlying the Deferred Mutual Fund Units on such date.

 

5.4                                 Dividends.  At any time a balance of
Deferred Mutual Fund Units is maintained in an Account, there shall be credited
to the Account additional Deferred Mutual Fund Units on each Dividend Date. 
Such additional number of Deferred Mutual Fund Units shall be determined by
reference to the number of mutual fund shares or other securities that would be
issued by the mutual fund or the issuer of the other securities with respect to
the reinvestment of such dividend.  In the absence of such reinvestment, the
number of such additional Deferred Mutual Fund Units shall be determined by
(i) multiplying the total number of Deferred Mutual Fund Units (including
fractional Deferred Mutual Fund Units) credited to the Account immediately prior
to the Dividend Date by the amount of the dividend per share of the underlying
mutual fund or other security and (ii) dividing the product by the Fair Market
Value per share as of such Dividend

 

6

 

Date.  Additional Deferred Mutual Fund Units shall be similarly credited on each
Dividend Date on which a balance of Deferred Mutual Fund Units is maintained in
the Account.

 

5.5                                 Nontransferability.  No Deferred Mutual Fund
Units shall be pledged, hypothecated or transferred by a Non-Employee Director
other than by will or the laws of descent and distribution.  No interest of any
person or entity in, or right to receive a benefit under, the Plan shall be
subject in any manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind; nor may such
interest or right to receive a benefit be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including claims for alimony, support,
separate maintenance and claims in bankruptcy proceedings.

 

7

 

SECTION 6.  DISTRIBUTION OF ACCOUNT

 

6.1                                 Cessation of Directorship; Attainment of Age
70.  Upon the first to occur of the date a Non-Employee Director attains age 70
or the date the Non-Employee Director ceases to be a director of the Company for
any reason other than death, the balance of such Non-Employee Director’s Account
that is exempt from Code Section 409A shall be paid in a lump sum to the
Non-Employee Director within ninety (90) days after such date, but in no event
later than the December 31st of the calendar year in which such date occurs. 
Upon the first to occur of the date a Non-Employee Director attains age 70 or
the date the Non-Employee Director ceases to be a director of the Company for
any reason other than death, the balance of such Non-Employee Director’s Account
that is subject to Code Section 409A shall be paid in a lump sum to the
Non-Employee Director on or as soon as administratively possible after such
date, but no later than sixty (60) days after such date.

 

6.2                                 Death.  In the event of the death of a
Non-Employee Director while a director of the Company, the entire value of the
Deferred Mutual Fund Units credited to his or her Account, within sixty (60)
days of the date of the Non-Employee Director’s death, shall be paid in cash in
a lump sum to such surviving beneficiary or beneficiaries as such Non-Employee
Director may have designated by notice in writing to the Company or by will, or,
if no beneficiaries are so designated, the legal representative of such
Non-Employee Director’s estate.

 

8

 

SECTION 7.  DIRECTOR OPTIONS

 

7.1                                 Grant and Eligibility.  On each Grant Date,
Director Options for the purchase of 1,500 shares of Common Stock will be
granted to each individual who is a Non-Employee Director.

 

7.2                                 Director Option Agreement.  Each Director
Option shall be evidenced by a Director Option Agreement that shall specify the
option price, the duration of the option, the number of shares of Common Stock
to which the option pertains, and such other provisions as the Board shall
determine.

 

7.3                                 Tax Status.  Director Options shall be
options in the form of nonqualified stock options which are intended not to fall
under the provisions of Code Section 422.

 

7.4                                 Director Option Price and Payment.  The
option price of each share of Common Stock subject to a Director Option shall be
100% of the Fair Market Value on the Grant Date.  Director Options shall be
exercised by the delivery of a written notice to the Company setting forth the
number of shares of Common Stock with respect to which the option is to be
exercised, accompanied by full payment for the Shares.  Upon exercise of any
Director Option, the option price shall be payable to the Company in full either
(a) in cash or its equivalent, or (b) by tendering shares of previously acquired
Common Stock having a Fair Market Value at the time of exercise equal to the
total option price, or (c) by a combination of (a) and (b).

 

7.5                                 Vesting and Duration of Director Options. 
Each Director Option shall vest and become exercisable in full upon the first to
occur of (a) the expiration of six months after the Grant Date, unless prior
thereto the Non-Employee Director has ceased to be a director for any reason
other than death or disability, (b) the death or disability of the Non-Employee
Director, or (c) a Change in Control (as provided in Section 9 hereof).  Once
vested, Director Options shall expire upon the first to occur of the date which
is (i) three years following termination of the director’s Board membership for
any reason other than death, or (ii) one year following the date of the
Non-Employee Director’s death; provided, however, in no event may any Director
Option be exercised beyond the tenth anniversary of its Grant Date.

 

9

 

SECTION 8.  CASH PAYMENT

 

8.1                                 EVA Amounts.  With respect to service during
each calendar year (or portion thereof) on and after the Establishment Date, but
before January 1, 2005, each Non-Employee Director shall be entitled to receive
cash payments at an annual rate of $25,500 plus an amount equal to $5,000
multiplied by the EVA Plan Bonus Multiple for the calendar year.  The amount
payable to the Non-Employee Director with respect to the EVA Plan Bonus Multiple
shall be determined and paid in the same manner as bonuses are determined and
paid under the bonus reserve provisions of the EVA Plan, provided, however, that
in applying such provisions all personal performance criteria shall be deemed to
be fully satisfied and full payment of any amounts credited to the bonus reserve
shall be made at the time the Non-Employee Director ceases to be a director of
the Company for any reason.  Payment of all or a portion of the Cash Payment
provided hereunder otherwise payable to a Non-Employee Director may be deferred
as specified by a timely election filed by the Non-Employee Director with the
Company; provided, however, that such deferral election must apply to all of the
Cash Payment provided hereunder to which a Non-Employee Director may be entitled
with respect to a calendar year, to all of such Cash Payment provided hereunder
other than the portion determined by reference to the EVA Plan, or to all of the
portion determined by reference to the EVA Plan.  An election will be considered
timely with respect to 1997 if received prior to the date of the 1997 Annual
Meeting and for each calendar year thereafter if received prior to the first day
of such calendar year.  The amount of Cash Payment provided hereunder so
deferred shall be credited to an Account established pursuant to Section 5
hereof as Deferred Mutual Fund Units as provided in the Non-Employee Director’s
deferral election based on the value of the mutual fund shares or other security
underlying such Deferred Mutual Fund Units on the date the deferred Cash Payment
provided hereunder would otherwise have been made.  Such amounts shall
thereafter be subject to the provisions of Sections 5 and 6 hereof relating to
the conversion of Deferred Mutual Fund Units, dividends thereon, and
distribution thereof.  Nothing herein shall be construed to prevent the amount
payable for 2004 to the Non-Employee Director with respect to the EVA Plan Bonus
Multiple from being determined and paid in 2005.  Notwithstanding the foregoing,
effective as of June 23, 2005, the EVA bonus bank balances of the Non-Employee
Directors provided hereunder shall be converted into performance shares under
the SPX Corporation 2005 Non-Employee Directors’ Compensation Plan for such
Non-Employee Directors, and such EVA bonus bank balances shall be eliminated as
of such date.

 

8.2                                 Director Fee Amounts.  With respect to
service during each calendar year (or portion thereof) after December 31, 2004,
but before January 1, 2007, each Non-Employee Director shall be entitled to
receive a flat fee retainer payment at an annual rate of $60,000 (prorated for
partial years of Board membership).  With respect to service during each
calendar year (or portion thereof) after December 31, 2006, each Non-Employee
Director shall be entitled to receive a flat fee retainer payment at an annual
rate of $75,000 (prorated for partial years of Board membership).  Payment of
the Cash Payment described under this Plan otherwise payable to a Non-Employee
Director may be deferred as specified by a timely election filed by the
Non-Employee Director with the Company; provided, however, no deferral will be
permitted with respect to any Cash Payment

 

10

 

that is made in a calendar year in which the Non-Employee Director is age 70 or
older at any point during such year.  Such deferral election shall be made by
December 31st of the calendar year preceding the calendar year in which such
Cash Payment would otherwise be made, and any such deferral election shall be
irrevocable after such December 31st.  The amount of Cash Payment so deferred
shall be credited to an Account established pursuant to Section 5 hereof as
Deferred Mutual Fund Units as provided in the Non-Employee Director’s deferral
election based on the value of the mutual fund shares or other security
underlying such Deferred Mutual Fund Units on the date of the deferred Cash
Payment would otherwise have been made.  Such amounts shall thereafter be
subject to the provisions of Sections 5 and 6 hereof relating to Deferred Mutual
Fund Units, dividends thereon, and distribution thereof.

 

11

 

SECTION 9.  EFFECT OF CHANGE IN CONTROL

 

9.1                                 Change in Control.  For purposes of this
Plan, a “Change in Control” shall be deemed to have occurred if:

 

(A)                                  ANY PERSON, ENTITY OR GROUP (WITHIN THE
MEANING OF SECTIONS 13(D) AND 14(D) OF THE EXCHANGE ACT), EXCLUDING, FOR THIS
PURPOSE, THE COMPANY OR ANY SUBSIDIARIES, ANY EMPLOYEE BENEFIT PLAN OF THE
COMPANY OR ITS SUBSIDIARIES WHICH ACQUIRES BENEFICIAL OWNERSHIP OF VOTING
SECURITIES OF THE COMPANY, IS OR BECOMES THE “BENEFICIAL OWNER” (AS DEFINED IN
RULE 13D-3 UNDER THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY OF SECURITIES OF THE
COMPANY REPRESENTING FIFTEEN PERCENT (15%) OR MORE OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING SECURITIES; PROVIDED, HOWEVER, THAT NO CHANGE
IN CONTROL SHALL BE DEEMED TO HAVE OCCURRED AS THE RESULT OF AN ACQUISITION OF
SECURITIES OF THE COMPANY BY THE COMPANY WHICH, BY REDUCING THE NUMBER OF VOTING
SECURITIES OUTSTANDING, INCREASES THE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP
INTEREST OF ANY PERSON TO FIFTEEN PERCENT (15%) OR MORE OF THE COMBINED VOTING
POWER OF THE COMPANY’S THEN OUTSTANDING SECURITIES, BUT ANY SUBSEQUENT INCREASE
IN THE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP INTEREST OF SUCH A PERSON IN THE
COMPANY SHALL BE DEEMED A CHANGE IN CONTROL; AND PROVIDED FURTHER THAT IF THE
BOARD OF DIRECTORS OF THE COMPANY DETERMINES IN GOOD FAITH THAT A PERSON WHO HAS
BECOME THE BENEFICIAL OWNER DIRECTLY OR INDIRECTLY OF SECURITIES OF THE COMPANY
REPRESENTING FIFTEEN PERCENT (15%) OR MORE OF THE COMBINED VOTING POWER OF THE
COMPANY’S THEN OUTSTANDING SECURITIES HAS INADVERTENTLY REACHED THAT LEVEL OF
OWNERSHIP INTEREST, AND IF SUCH PERSON DIVESTS AS PROMPTLY AS PRACTICABLE A
SUFFICIENT AMOUNT OF SECURITIES OF THE COMPANY SO THAT THE PERSON NO LONGER HAS
A DIRECT OR INDIRECT BENEFICIAL OWNERSHIP INTEREST IN FIFTEEN PERCENT (15%) OR
MORE OF THE COMBINED VOTING POWER OF THE COMPANY’S THEN OUTSTANDING SECURITIES,
THEN NO CHANGE IN CONTROL SHALL BE DEEMED TO HAVE OCCURRED; OR

 

(B)                                 DURING ANY PERIOD OF TWO (2) CONSECUTIVE
YEARS (NOT INCLUDING ANY PERIOD PRIOR TO THE ESTABLISHMENT DATE), INDIVIDUALS
WHO AT THE BEGINNING OF SUCH TWO-YEAR PERIOD CONSTITUTE THE BOARD AND ANY NEW
DIRECTOR (EXCEPT FOR A DIRECTOR DESIGNATED BY A PERSON WHO HAS ENTERED INTO AN
AGREEMENT TO EFFECT A TRANSACTION DESCRIBED ELSEWHERE IN THIS SUBSECTION 9.1)
WHOSE ELECTION BY THE BOARD OR NOMINATION FOR ELECTION BY THE COMPANY’S
SHAREHOLDERS WAS APPROVED BY A VOTE OF AT LEAST TWO-THIRDS (2/3) OF THE
DIRECTORS THEN STILL IN OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF THE
PERIOD OR WHOSE ELECTION OR NOMINATION OF ELECTION WAS PREVIOUSLY SO APPROVED,
CEASE FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY THEREOF; OR

 

(C)                                  THE SHAREHOLDERS OF THE COMPANY APPROVE A
PLAN OF COMPLETE LIQUIDATION OF THE COMPANY, AN AGREEMENT FOR THE SALE OR OTHER
DISPOSITION BY THE COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS,
OR A PLAN OF REORGANIZATION, MERGER OR CONSOLIDATION OF THE COMPANY WITH ANY
OTHER CORPORATION, EXCEPT FOR A REORGANIZATION, MERGER OR CONSOLIDATION IN WHICH
THE SECURITY OWNERS OF THE COMPANY IMMEDIATELY PRIOR TO THE REORGANIZATION,
MERGER OR CONSOLIDATION CONTINUE TO OWN AT LEAST EIGHTY-FIVE PERCENT (85%) OF
THE VOTING SECURITIES OF THE NEW (OR CONTINUING) ENTITY IMMEDIATELY AFTER SUCH
REORGANIZATION, MERGER OR CONSOLIDATION.

 

12

 

9.1A                       409A Change in Control.  For purposes of this Plan, a
“409A Change in Control” means the occurrence of any of the following events:

 

(A)                                  ANY PERSON OR GROUP ACQUIRES OWNERSHIP OF
THE COMPANY’S STOCK THAT, TOGETHER WITH STOCK HELD BY SUCH PERSON OR GROUP,
CONSTITUTES MORE THAN 50% OF THE TOTAL FAIR MARKET VALUE OR TOTAL VOTING POWER
OF THE COMPANY’S STOCK, (INCLUDING AN INCREASE IN THE PERCENTAGE OF STOCK OWNED
BY ANY PERSON OR GROUP AS A RESULT OF A TRANSACTION IN WHICH THE COMPANY
ACQUIRES ITS STOCK IN EXCHANGE FOR PROPERTY, PROVIDED THAT THE ACQUISITION OF
ADDITIONAL STOCK BY ANY PERSON OR GROUP DEEMED TO OWN MORE THAN 50% OF THE TOTAL
FAIR MARKET VALUE OR TOTAL VOTING POWER OF THE COMPANY’S STOCK ON JANUARY 1,
2005, SHALL NOT CONSTITUTE A 409A CHANGE IN CONTROL); OR

 

(B)                                 ANY PERSON OR GROUP ACQUIRES (OR HAS
ACQUIRED DURING THE 12-MONTH PERIOD ENDING ON THE DATE OF THE MOST RECENT
ACQUISITION BY SUCH PERSON OR GROUP) OWNERSHIP OF COMPANY STOCK POSSESSING 30% 
OR MORE OF THE TOTAL VOTING POWER OF COMPANY STOCK; OR

 

(C)                                  A MAJORITY OF THE MEMBERS OF THE BOARD IS
REPLACED DURING ANY 12-MONTH PERIOD BY DIRECTORS WHOSE APPOINTMENT OR ELECTION
IS NOT ENDORSED BY A MAJORITY OF THE MEMBERS OF THE BOARD PRIOR TO THE DATE OF
THE APPOINTMENT OR ELECTION; OR

 

(D)                                 ANY PERSON OR GROUP ACQUIRES (OR HAS
ACQUIRED DURING THE 12-MONTH PERIOD ENDING ON THE DATE OF THE MOST RECENT
ACQUISITION BY SUCH PERSON OR GROUP) ASSETS FROM THE COMPANY THAT HAVE A TOTAL
GROSS FAIR MARKET VALUE EQUAL TO 40% OR MORE OF THE TOTAL GROSS FAIR MARKET
VALUE OF ALL COMPANY ASSETS IMMEDIATELY PRIOR TO SUCH ACQUISITION OR
ACQUISITIONS, PROVIDED THAT THERE IS NO 409A CHANGE IN CONTROL WHEN THE
COMPANY’S ASSETS ARE TRANSFERRED TO:

 

(1)                                  A SHAREHOLDER OF THE COMPANY (IMMEDIATELY
BEFORE THE ASSET TRANSFER) IN EXCHANGE FOR OR WITH RESPECT TO COMPANY STOCK;

 

(2)                                  AN ENTITY, 50% OR MORE OF THE TOTAL VALUE
OR VOTING POWER OF WHICH IS OWNED, DIRECTLY OR INDIRECTLY, BY THE COMPANY;

 

(3)                                  A PERSON OR GROUP THAT OWNS, DIRECTLY OR
INDIRECTLY, 50% OR MORE OF THE TOTAL VALUE OR VOTING POWER OF ALL OUTSTANDING
COMPANY STOCK; OR

 

(4)                                  AN ENTITY, AT LEAST 50% OF THE TOTAL VALUE
OR VOTING POWER OF WHICH IS OWNED, DIRECTLY OR INDIRECTLY, BY A PERSON DESCRIBED
IN PARAGRAPH (3).

 

For purposes of the above sub-paragraph (d), a person’s status is determined
immediately after the transfer of the assets.  For example, a transfer to a
corporation in which the Company has no ownership interest before the
transaction, but which is a majority-owned subsidiary of the Company after the
transaction is not a 409A Change in Control.

 

For purposes of this Section 9.1A, “Gross Fair Market Value” means the value of
assets determined without regard to any liabilities associated with such assets.

 

13

 

For purposes of this Section 9.1A, “Group” means persons acting together for the
purpose of acquiring Company stock and includes owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company.  If a person owns stock in both
the Company and another corporation that enter into a merger, consolidation
purchase or acquisition of stock, or similar transaction, such person is
considered to be part of a Group only with respect to ownership prior to the
merger or other transaction giving rise to the change and not with respect to
the ownership interest in the other corporation.  Persons will not be considered
to be acting as a Group solely because they purchase assets of the same
corporation at the same time, or as a result of the same public offering.

 

9.2                                 Effect of Change in Control. 
Notwithstanding any other provision of the Plan, if a Change in Control occurs,
then:

 

(A)                                  THE BALANCE OF ANY ACCOUNT MAINTAINED
PURSUANT TO SECTION 5 THAT IS EXEMPT FROM COVERAGE UNDER CODE SECTION 409A AND
ANY BONUS RESERVE AMOUNTS NOT YET PAID PURSUANT TO SUBSECTION 8.1 HEREOF SHALL
BE PAID IN CASH IN A LUMP SUM AS PROMPTLY AS PRACTICABLE, BUT NOT MORE THAN
THIRTY (30) DAYS FOLLOWING THE DATE OF THE CHANGE IN CONTROL; AND

 

(B)                                 THE BALANCE OF ANY ACCOUNT MAINTAINED
PURSUANT TO SECTION 5 THAT IS SUBJECT TO CODE SECTION 409A COVERAGE SHALL BE
PAID IN CASH IN A LUMP SUM ON OR AS PROMPTLY AS PRACTICABLE AFTER THE DATE OF A
409A CHANGE IN CONTROL (WHICH 409A CHANGE IN CONTROL MAY OCCUR CONCURRENTLY WITH
OR AFTER A CHANGE IN CONTROL), BUT NO LATER THAN THIRTY (30) DAYS FOLLOWING THE
DATE OF A 409A CHANGE IN CONTROL; AND

 

(C)                                  EACH DIRECTOR OPTION SHALL BECOME FULLY
VESTED AND EXERCISABLE AS OF THE DATE OF THE CHANGE IN CONTROL.

 

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SECTION 10.  AMENDMENT AND TERMINATION

 

The Board, or any committee to the extent authorized by the Board, may make such
modifications to the Plan as it shall deem advisable, without further approval
of the shareholders of the Company, except the Share limitation set forth in
Section 4 cannot be increased without approval of the shareholders.  The Plan
shall continue in effect without limit unless and until the Board otherwise
determines.

 

To the extent any provision of the Plan or action by the Board or Company would
subject any Non-Employee Director to liability for interest or additional taxes
under Code Section 409A, or make any Account amounts deferred prior to
January 1, 2005 (including any gains or losses on such amounts) subject to Code
Section 409A, it will be deemed null and void, to the extent permitted by law
and deemed advisable by the Board.  It is intended that the Plan will comply
with Code Section 409A to the extent applicable, and that Account amounts
deferred prior to January 1, 2005 (including any gains or losses on such
amounts) be exempt from Code Section 409A coverage, and the Plan shall be
interpreted and construed on a basis consistent with such intent.  The Plan may
be amended in any respect deemed necessary (including retroactively) by the
Board in order to preserve compliance with Code Section 409A and to maintain
Code Section 409A exemption for the Account amounts deferred prior to January 1,
2005 (including any gains or losses on such amounts).  For purposes of this Plan
with respect to Account amounts subject to Code Section 409A, a Non-Employee
Director shall have ceased to be a director of the Company upon a “separation
from service” as defined in Code Section 409A.  The preceding shall not be
construed as a guarantee of any particular tax effect for Plan benefits.

 

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SECTION 11.  MISCELLANEOUS

 

11.1                           Rights of Directors.  Neither the Plan nor any
action taken hereunder shall be construed as giving any Non-Employee Director
any right to continue to serve as a Non-Employee Director of the Company or
otherwise to be retained in the service of the Company.

 

11.2                           Funding Not Required.  Neither a Non-Employee
Director nor any other person shall have any interest in any fund or in any
specific asset of the Company by reason of amounts credited to the Account of
such Non-Employee Director, any Cash Payments entitled to pursuant to Section 8,
or any Director Options granted to such Non-Employee Director under the Plan,
nor the right to exercise any of the rights or privileges of a shareholder with
respect to any Deferred Mutual Fund Units credited to such Account or any
granted Director Options, nor the right to receive any distribution under the
Plan except as expressly provided herein.  Distributions hereunder shall be made
from the general funds of the Company or from a grantor trust established for
purposes of assuring that funds will be available to satisfy the obligations of
the Company with respect to the Accounts, and the rights of the Director shall
be those of an unsecured general creditor of the Company.  Nothing contained in
the Plan (or any Plan communication) shall constitute a guaranty by the Company
or any other entity or person that the assets of the Company will be sufficient
to pay any benefit hereunder.

 

11.3                           Indemnification.  Each person who is or shall
have been a member of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company’s approval, or paid by him in satisfaction of any judgment in any
such action, suit or proceeding against him, provided he shall give the Company
an opportunity, at its expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, as a matter of law or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

 

11.4                           Requirements of Law.  The granting of Director
Options and the issuance of shares of Common Stock with respect to an option
exercise, shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.

 

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11.5                           Governing Law.  The Plan (including, without
limitation, any rules, regulations, determinations or decisions made by the
Board or Company relating to the Plan) shall be construed and administered
exclusively in accordance with applicable federal laws and the laws of the State
of Delaware, without regard to its conflict of laws principles.

 

11.6                           Administration.  The Board may establish such
rules and regulations with respect to the proper administration of the Plan as
it may determine, and may amend or revoke any rule or regulation so
established.  This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the Board, whose
interpretation or determination, when made in good faith, shall be conclusive
and binding.  Without limiting the foregoing, the election of any Non-Employee
Director to defer cash payments, including Cash Payments made pursuant to
Section 8, shall be made and filed in accordance with procedures and forms set
by the Board, and the timeliness of such elections shall be determined by the
Board.  Any deferral elections shall be made in accordance with the applicable
requirements of Code Section 409A.

 

11.7                           Tax Withholding.  The Company may withhold from
the distribution of any payment hereunder the amount necessary to satisfy a
Non-Employee Director’s (or beneficiary’s) federal, state and local withholding
tax requirements.

 

11.8                           Construction.  In the construction of the Plan,
the masculine shall include the feminine and the singular shall include the
plural in all cases where such meanings would be appropriate.  Any headings used
herein are included for ease of reference only, and are not to be construed so
as to alter the terms hereof.

 

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