Exhibit 10.1

Dakota Plains Holdings, Inc.

2011 EQUITY INCENTIVE PLAN

1.          Purpose. The purpose of the Dakota Plains Holdings, Inc. 2011 Equity
Incentive Plan (the “Plan”) is to help attract and retain the best available
people for positions of responsibility with the Company, to provide additional
incentives to them and align their interests with those of the Company’s
shareholders, and to thereby promote the Company’s long-term business success.

2.          Definitions. In this Plan, the following definitions will apply.

          (a)          “Affiliate” means any corporation that is a Subsidiary or
Parent of the Company.

          (b)          “Agreement” means the written or electronic agreement
containing the terms and conditions applicable to an Award granted under the
Plan. An Agreement is subject to the terms and conditions of the Plan.

          (c)          “Award” means the grant of a compensatory award under the
Plan in the form of an Option, Stock Appreciation Rights, Restricted Stock,
Stock Units, an Other Stock-Based Award or a Cash Incentive Award.

          (d)          “Board” means the Board of Directors of the Company.

          (e)          “Cash Incentive Award” means an Award described in
Section 11 of the Plan.

          (f)          “Cause” means what the term is expressly defined to mean
in a then-effective written agreement (including an Agreement) between a
Participant and the Company or any Affiliate or, in the absence of any such
then-effective agreement or definition, means a Participant’s (i) failure or
refusal to perform satisfactorily the duties reasonably required of the
Participant by the Company (other than by reason of Disability); (ii) material
violation of any law, rule, regulation, court order or regulatory directive
(other than traffic violations, misdemeanors or other minor offenses); (iii)
material breach of any Company code of conduct, of any agreement with the
Company or any Affiliate or of any nondisclosure, non-solicitation,
non-competition or similar obligation owed to the Company or any Affiliate; (iv)
engaging in any act or practice that involves personal dishonesty on the part of
the Participant or demonstrates a willful and continuing disregard for the best
interests of the Company and its Affiliates; or (v) engaging in conduct that
would be reasonably expected to harm or bring disrepute to the Company, any of
its Affiliates, or any of their customers, employees or vendors.

          (g)          “Change in Control” means one of the following:

                    (1)          An Exchange Act Person becomes the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of
the Company representing more than 50% of the combined voting power of the
Company’s then outstanding Voting Securities, except that the following will not
constitute a Change in Control:

                                        (A)          any acquisition of
securities of the Company by an Exchange Act Person directly or indirectly from
the Company for the purpose of providing financing to the Company;

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                                        (B)          any formation of a Group
consisting solely of beneficial owners of the Company’s Voting Securities as of
the effective date of this Plan; or

                                        (C)          any Exchange Act Person
becomes the beneficial owner of more than 50% of the combined voting power of
the Company’s outstanding Voting Securities as the result of any repurchase or
other acquisition by the Company of its Voting Securities;

If, however, an Exchange Act Person or Group referenced in clause (A), (B) or
(C) above acquires beneficial ownership of additional Company Voting Securities
after initially becoming the beneficial owner of more than 50% of the combined
voting power of the Company’s outstanding Voting Securities by one of the means
described in those clauses, then a Change in Control shall be deemed to have
occurred.

                    (2)          Individuals who are Continuing Directors cease
for any reason to constitute a majority of the members of the Board.

                    (3)          The consummation of a Corporate Transaction
unless, immediately following such Corporate Transaction, all or substantially
all of the individuals and entities who were the beneficial owners of the
outstanding Company Voting Securities immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, more than 50% of the
combined voting power of the then outstanding Voting Securities of the of the
surviving or acquiring entity (or its Parent) resulting from such Corporate
Transaction in substantially the same proportions as their ownership,
immediately before such Corporate Transaction, of the outstanding Company Voting
Securities.

Notwithstanding the foregoing, to the extent that any Award constitutes a
deferral of compensation subject to Code Section 409A, and if that Award
provides for a change in the time or form of payment upon a Change in Control,
then no Change in Control shall be deemed to have occurred upon an event
described in Section 2(g) unless the event would also constitute a change in
ownership or effective control of, or a change in the ownership of a substantial
portion of the assets of, the Company under Code Section 409A.

          (h)          “Code” means the Internal Revenue Code of 1986, as
amended and in effect from time to time, and the regulations promulgated
thereunder.

          (i)          “Committee” means two or more Non-Employee Directors
designated by the Board to administer the Plan under Section 3, each member of
which shall (i) satisfy the independence requirements for independent directors
and members of compensation committees as set forth from time to time in the
Listing Rules of the NYSE Amex Equities Market, (ii) be a non-employee director
within the meaning of Exchange Act Rule 16b-3, and (iii) be an outside director
for purposes of Code Section 162(m).

          (j)          “Company” means Dakota Plains Holdings, Inc., a Nevada
corporation, or any successor thereto.

          (k)          “Continuing Director” means an individual (A) who is, as
of the effective date of the Plan, a director of the Company, or (B) who is
elected as a director of the Company subsequent to the effective date of the
Plan and whose initial election, or nomination for initial election by the
Company’s shareholders, was approved by at least a majority of the then
Continuing Directors, but excluding, for purposes of this clause (B), any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest.

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          (l)          “Corporate Transaction” means a reorganization, merger or
consolidation of the Company, or a sale or other disposition (in one or a series
of transactions) of all or substantially all of the assets of the Company.

          (m)          “Disability” means “total and permanent disability”
within the meaning of Code Section 22(e)(3).

          (n)          “Employee” means an employee of the Company or an
Affiliate.

          (o)          “Exchange Act” means the Securities Exchange Act of 1934,
as amended and in effect from time to time.

          (p)          “Exchange Act Person” means any natural person, entity or
Group other than (i) the Company or any Subsidiary of the Company; (ii) any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliate; (iii) an underwriter temporarily holding securities in
connection with a registered public offering of such securities; or (iv) an
entity whose Voting Securities are beneficially owned by the beneficial owners
of the Company’s Voting securities in substantially the same proportions as
their beneficial ownership of the Company’s Voting Securities.

          (q)          “Fair Market Value” means the fair market value of a
Share determined as follows:

                    (1)          If the Shares are readily tradable on an
established securities market (as determined under Code Section 409A), then Fair
Market Value will be the closing sales price for a Share on the principal
securities market on which it trades on the date for which it is being
determined, or if no sale of Shares occurred on that date, on the next preceding
date on which a sale of Shares occurred, as reported in The Wall Street Journal
or such other source as the Committee deems reliable; or

                    (2)          If the Shares are not then readily tradable on
an established securities market (as determined under Code Section 409A), then
Fair Market Value will be determined by the Committee as the result of a
reasonable application of a reasonable valuation method that satisfies the
requirements of Code Section 409A.

          (r)          “Full Value Award” means an Award other than an Option
Award, Stock Appreciation Rights Award or Cash Incentive Award.

          (s)          “Good Reason” means what the term is expressly defined to
mean in a then-effective written agreement (including an Agreement) between a
Participant and the Company or any Affiliate or, in the absence of any such
then-effective agreement or definition and subject to the last sentence of this
definition, means with respect to any Participant any of the following events
that has not been consented to by the Participant:

                    (1)          A material reduction or diminution in the
Participant’s job responsibilities, authority or duties, or in the job
responsibilities, authority or duties of the supervisor to whom the Participant
is required to report, but a mere change in title alone or reassignment to a
substantially similar position will not constitute Good Reason;

                    (2)          A material reduction in the Participant’s base
compensation in the absence of a similar general reduction of the base
compensation of similarly situated Service Providers; or

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                    (3)          The relocation of the Participant’s primary
work location, on a permanent basis, to a location that is more than 50 miles
from the Participant’s primary work location immediately prior to such change.

The foregoing events will only be considered “Good Reason” for a Participant to
voluntarily resign from his or her position as Service Provider if, following
the occurrence of one or more of the foregoing events, the Participant (i)
provides written notice to the Company or its applicable Affiliate of the
event(s) constituting Good Reason within 30 days after the first occurrence of
such event(s), (ii) the Company or its applicable Affiliate fails to reasonably
cure such event(s) within 30 days after receiving such notice, and (iii) the
Participant’s termination of his or her status as a Service Provider is
effective not later than 30 days after the end of the period in which the
event(s) may be cured.

          (t)          “Grant Date” means the date on which the Committee
approves the grant of an Award under the Plan, or such later date as may be
specified by the Committee on the date the Committee approves the Award.

          (u)          “Group” means two or more persons acting as a
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities of an entity.

          (v)          “Non-Employee Director” means a member of the Board who
is not an Employee.

          (w)          “Option” means a right granted under the Plan to purchase
a specified number of Shares at a specified price during a specified period of
time. An “Incentive Stock Option” or “ISO” means any Option designated as such
and granted in accordance with the requirements of Code Section 422. A
“Non-Statutory Stock Option” means an Option other than an Incentive Stock
Option.

          (x)          “Other Stock-Based Award” means an Award described in
Section 11 of this Plan.

          (y)          “Parent” means a “parent corporation,” as defined in Code
Section 424(e).

          (z)          “Participant” means a person to whom an Award is or has
been made in accordance with the Plan.

          (aa)          “Performance-Based Compensation” means an Award to a
person who is, or is determined by the Committee to likely become, a “covered
employee” (as defined in Code Section 162(m)(3)) and that is intended to
constitute “performance-based compensation” within the meaning of Code Section
162(m)(4)(C).

          (bb)          “Plan” means this Dakota Plains Holdings, Inc. 2011
Equity Incentive Plan, as amended and in effect from time to time.

          (cc)          “Restricted Stock” means Shares issued to a Participant
that are subject to such restrictions on transfer, vesting conditions and other
restrictions or limitations as may be set forth in this Plan and the applicable
Agreement.

          (dd)          “Retirement” means any termination, other than for Cause
or due to death or Disability, of a Participant’s Service with the Company and
all of its Affiliates at or after age 65, or at or after age 60 with five or
more years of continuous Service.

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          (ee)          “Service” means the provision of services by a
Participant to the Company or any Affiliate in any Service Provider capacity. A
Service Provider’s Service shall be deemed to have terminated either upon an
actual cessation of providing services or upon the entity for which the Service
Provider provides services ceasing to be an Affiliate. Except as otherwise
provided in this Plan or any Agreement, Service shall not be deemed terminated
in the case of (i) any approved leave of absence; (ii) transfers among the
Company and any Affiliates in any Service Provider capacity; or (iii) any change
in status so long as the individual remains in the service of the Company or any
Affiliate in any Service Provider capacity.

          (ff)          “Service Provider” means an Employee, a Non-Employee
Director, or any consultant or advisor who is a natural person and who provides
services (other than in connection with (i) a capital-raising transaction or
(ii) promoting or maintaining a market in Company securities) to the Company or
any Affiliate.

          (gg)          “Share” means a share of Stock.

          (hh)          “Stock” means the common stock, par value $0.01 per
share, of the Company.

          (ii)          “Stock Appreciation Right” or “SAR” means a right
granted under the Plan to receive, in cash and/or Shares as determined by the
Committee, an amount equal to the appreciation in value of a specified number of
Shares between the Grant Date of the SAR and its exercise date.

          (jj)          “Stock Unit” means a right granted under the Plan to
receive, in cash and/or Shares as determined by the Committee, the Fair Market
Value of a Share, subject to such restrictions on transfer, vesting conditions
and other restrictions or limitations as may be set forth in this Plan and the
applicable Agreement.

          (kk)          “Subsidiary” means a “subsidiary corporation,” as
defined in Code Section 424(f), of the Company.

          (ll)          “Substitute Award” means an Award granted upon the
assumption of, or in substitution or exchange for, outstanding awards granted by
a company or other entity acquired by the Company or any Affiliate or with which
the Company or any Affiliate combines.

          (mm)          “Voting Securities” of an entity means the outstanding
securities entitled to vote generally in the election of directors (or
comparable equity interests) of such entity.

3.          Administration of the Plan.

          (a)          Administration. The authority to control and manage the
operations and administration of the Plan shall be vested in the Committee in
accordance with this Section 3.

          (b)          Scope of Authority. Subject to the terms of the Plan, the
Committee shall have the authority, in its discretion, to take such actions as
it deems necessary or advisable to administer the Plan, including:

                    (1)          determining the Service Providers to whom
Awards will be granted, the timing of each such Award, the types of Awards and
the number of Shares covered by each Award, the terms, conditions, performance
criteria, restrictions and other provisions of Awards, and the manner in which
Awards are paid or settled;

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                    (2)          cancelling or suspending an Award or the
exercisability of an Award, accelerating the vesting or extending the exercise
period of an Award, or otherwise amending the terms and conditions of any
outstanding Award, subject to the requirements of Sections 15(d) and 15(e);

                    (3)          establishing, amending or rescinding rules to
administer the Plan, interpreting the Plan and any Award or Agreement made under
the Plan, and making all other determinations necessary or desirable for the
administration of the Plan; and

                    (4)          taking such actions as are described in Section
3(c) with respect to Awards to foreign Service Providers.

          (c)          Awards to Foreign Service Providers. The Committee may
grant Awards to Service Providers who are foreign nationals, who are located
outside of the United States or who are not compensated from a payroll
maintained in the United States, or who are otherwise subject to (or could cause
the Company to be subject to) legal or regulatory requirements of countries
outside of the United States, on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Committee, be necessary or
desirable to comply with applicable foreign laws and regulatory requirements and
to promote achievement of the purposes of the Plan. In connection therewith, the
Committee may establish such subplans and modify exercise procedures and other
Plan rules and procedures to the extent such actions are deemed necessary or
desirable, and may take any other action that it deems advisable to obtain local
regulatory approvals or to comply with any necessary local governmental
regulatory exemptions.

          (d)          Acts of the Committee; Delegation. A majority of the
members of the Committee shall constitute a quorum for any meeting of the
Committee, and any act of a majority of the members present at any meeting at
which a quorum is present or any act unanimously approved in writing by all
members of the Committee shall be the act of the Committee. Any such action of
the Committee shall be valid and effective even if the members of the Committee
at the time of such action are later determined not to have satisfied all of the
criteria for membership in clauses (i), (ii) and (iii) of Section 2(i). To the
extent not inconsistent with applicable law or stock exchange rules, the
Committee may delegate all or any portion of its authority under the Plan to any
one or more of its members or, as to Awards to Participants who are not subject
to Section 16 of the Exchange Act, to one or more executive officers of the
Company. The Committee may also delegate non-discretionary administrative
responsibilities in connection with the Plan to such other persons as it deems
advisable.

          (e)          Finality of Decisions. The Committee’s interpretation of
the Plan and of any Award or Agreement made under the Plan and all related
decisions or resolutions of the Board or Committee shall be final and binding on
all parties with an interest therein.

          (f)          Indemnification. Each person who is or has been a member
of the Committee or of the Board, and any other person to whom the Committee
delegates authority under the Plan, shall be indemnified by the Company, to the
maximum extent permitted by law, against liabilities and expenses imposed upon
or reasonably incurred by such person in connection with or resulting from any
claims against such person by reason of the performance of the individual’s
duties under the Plan. This right to indemnification is conditioned upon such
person providing the Company an opportunity, at the Company’s expense, to handle
and defend the claims before such person undertakes to handle and defend them on
such person’s own behalf. The Company will not be required to indemnify any
person for any amount paid in settlement of a claim unless the Company has first
consented in writing to the settlement. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to

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which such person or persons may be entitled under the Company’s Articles of
Incorporation or Bylaws, as a matter of law, or otherwise.

4.          Shares Available Under the Plan.

          (a)          Maximum Shares Available. Subject to Sections 4(b) and
(c) and to adjustment as provided in Section 12(a), the number of Shares that
may be the subject of Awards and issued under the Plan shall be 2,000,000.
Shares to be issued under the Plan shall either be authorized and unissued
Shares or treasury Shares. In determining the number of Shares to be counted
against this share reserve in connection with any Award, the following rules
shall apply:

                    (1)          Where the number of Shares subject to an Award
is variable on the Grant Date, the number of Shares to be counted against the
share reserve prior to the settlement of the Award shall be the maximum number
of Shares that could be received under that particular Award.

                    (2)          Where two or more types of Awards are granted
to a Participant in tandem with each other, such that the exercise of one type
of Award with respect to a number of Shares cancels at least an equal number of
Shares of the other, the number of Shares to be counted against the share
reserve shall be the largest number of Shares that would be counted against the
share reserve under either of the Awards.

                    (3)          Substitute Awards shall not be counted against
the share reserve, nor shall they reduce the Shares authorized for grant to a
Participant in any calendar year.

          (b)          Effect of Forfeitures and Other Actions. Any Shares
subject to an Award that is forfeited, expires, is settled for cash or otherwise
does not result in the issuance of all or a portion of the Shares subject to
such Award shall, to the extent of such forfeiture, expiration, cash settlement
or non-issuance, again become available for Awards under this Plan and
correspondingly increase the total number of Shares available for grant and
issuance under Section 4(a). For avoidance of doubt, if payment by the Company
upon the exercise of a Stock Appreciation Right is made in Shares, then the
Plan’s share reserve shall be increased in an amount equal to the difference
between the number of Shares as to which the Stock Appreciation Right was
exercised and the number of Shares actually delivered to the Participant. If (i)
any Award is exercised through the tendering of Shares (either actually or by
attestation) or by the withholding of Shares by the Company in payment of an
applicable exercise price, or (ii) any tax withholding obligations arising from
such Award are satisfied by the tendering of Shares (either actually or by
attestation) or by the withholding of Shares by the Company, then the Shares so
tendered or withheld shall again become available for Awards under this Plan and
correspondingly increase the total number of Shares available for grant and
issuance under Section 4(a).

          (c)          Effect of Plans Operated by Acquired Companies. If a
company acquired by the Company or any Subsidiary or with which the Company or
any Subsidiary combines has shares available under a pre-existing plan approved
by shareholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the Shares authorized for grant under
the Plan. Awards using such available shares shall not be made after the date
awards or grants could have been made under the terms of the pre-existing plan,
absent the acquisition or combination, and shall only be made to individuals who
were not Employees or Non-Employee Directors prior to such acquisition or
combination.

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          (d)          No Fractional Shares. Unless otherwise determined by the
Committee, the number of Shares subject to an Award shall always be a whole
number. No fractional Shares may be issued under the Plan, and in connection
with any calculation under the Plan that would otherwise result in the issuance
or withholding of a fractional Share, the number of Shares shall be rounded down
to the nearest whole Share.

          (e)          Individual Option and SAR Limit. The aggregate number of
Shares subject to Options and/or Stock Appreciation Rights granted during any
calendar year to any one Participant shall not exceed 1,000,000 Shares.

5.          Eligibility. Participation in the Plan is limited to Service
Providers. Incentive Stock Options may only be granted to Employees.

6.          General Terms of Awards.

          (a)          Award Agreement. Except for any Award that involves only
the immediate issuance of unrestricted Shares, each Award shall be evidenced by
an Agreement setting forth the number of Shares subject to the Award together
with such other terms and conditions applicable to the Award (and not
inconsistent with the Plan) as determined by the Committee. An Award will not
become effective unless acceptance of the Agreement in a manner permitted by the
Committee is received by the Company within 30 days of the date the Agreement is
delivered to the Participant. An Award to a Participant may be made singly or in
combination with any form of Award. Two types of Awards may be made in tandem
with each other such that the exercise of one type of Award with respect to a
number of Shares reduces the number of Shares subject to the related Award by at
least an equal amount.

          (b)          Vesting and Term. Each Agreement shall set forth the
period until the applicable Award is scheduled to expire (which shall not be
more than ten years from the Grant Date), and any applicable performance period.

          (c)          Transferability. Except as provided in this Section 6(c),
(i) during the lifetime of a Participant, only the Participant or the
Participant’s guardian or legal representative may exercise an Option or SAR, or
receive payment with respect to any other Award; and (ii) no Award may be sold,
assigned, transferred, exchanged or encumbered other than by will or the laws of
descent and distribution. Any attempted transfer in violation of this Section
6(c) shall be of no effect. The Committee may, however, provide in an Agreement
or otherwise that an Award (other than an Incentive Stock Option) may be
transferred pursuant to a qualified domestic relations order or may be
transferable by gift to any “family member” (as defined in General Instruction
A(5) to Form S-8 under the Securities Act of 1933) of the Participant. Any Award
held by a transferee shall continue to be subject to the same terms and
conditions that were applicable to that Award immediately before the transfer
thereof. For purposes of any provision of the Plan relating to notice to a
Participant or to acceleration or termination of an Award upon the death or
termination of employment of a Participant, the references to “Participant”
shall mean the original grantee of an Award and not any transferee.

          (d)          Designation of Beneficiary. Each Participant may
designate a beneficiary or beneficiaries to exercise any Award or receive a
payment under any Award payable on or after the Participant’s death. Any such
designation shall be on a written or electronic form approved by the Committee
and shall be effective upon its receipt by the Company or an agent selected by
the Company.

          (e)          Termination of Service. Unless otherwise provided in an
Agreement, and subject to Section 12 of this Plan, if a Participant’s Service
with the Company and all of its Affiliates terminates, the

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following provisions shall apply (in all cases subject to the originally
scheduled expiration of an Option or Stock Appreciation Right, as applicable):

                    (1)          Upon termination of Service for Cause, all
unexercised Options and SARs and all unvested portions of any other outstanding
Awards shall be immediately forfeited without consideration.

                    (2)          Upon an involuntary termination of Service by
the Company or any Affiliate without Cause that does not constitute a
Retirement, any portion of an Award scheduled to vest within six months after
the date of termination shall immediately become vested (and exercisable, if
applicable), and the vested and exercisable portions of Options or SARs may be
exercised for a period of six months after the date of such termination and
shall terminate upon the expiration of such period.

                    (3)          Upon a voluntary termination of Service by the
Participant that does not constitute Retirement, the currently vested and
exercisable portions of Options and SARs may be exercised for a period of three
months after the date of such termination and shall terminate upon the
expiration of such period.

                    (4)          Upon termination of Service due to death or
Disability, any portion of an Award scheduled to vest within twelve months after
the date of termination shall immediately become vested (and exercisable, if
applicable), and the vested and exercisable portions of Options or SARs may be
exercised for a period of twelve months after the date of such termination and
shall terminate upon the expiration of such period.

                    (5)          Upon a termination of Service that constitutes
a Retirement, an Award will continue to vest for a period of twelve months after
the date of termination and any portion of the Award scheduled to vest during
that twelve month period shall vest (and become exercisable, if applicable) at
its scheduled time, and the vested and exercisable portions of Options or SARs
may be exercised during a period of fifteen months after the date of such
termination and shall terminate upon the expiration of such period.

                    (6)          Upon a termination of Service for any reason,
all unvested and unexercisable portions of any outstanding Awards (after giving
effect to any accelerated vesting specified under Subsections (2) and (4) of
this Section 6(e)) shall be immediately forfeited without consideration, except
to the extent provided in Subsection (5) of the Section 6(e).

                    (7)          If a Participant dies during the six-month
post-termination exercise period specified in Subsection (2) or (3) of this
Section 6(e), then the applicable post-termination exercise period shall be
extended to twelve months after the date of such termination.

          (f)          Rights as Shareholder. No Participant shall have any
rights as a shareholder with respect to any securities covered by an Award
unless and until the date the Participant becomes the holder of record of the
Shares, if any, to which the Award relates.

          (g)          Performance-Based Awards. Any Award may be granted as a
performance-based Award if the Committee establishes one or more measures of
corporate, Subsidiary, business unit or individual performance which must be
attained, and the performance period over which the specified performance is to
be attained, as a condition to the vesting, exercisability, lapse of
restrictions and/or settlement in cash or Shares of such Award. In connection
with any such Award, the Committee shall determine the extent to which
performance measures have been attained and other applicable terms and
conditions have been satisfied, and the degree to which vesting, exercisability,
lapse of restrictions and/or settlement in

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cash or Shares of such Award has been earned. Any performance-based Award that
is intended by the Committee to qualify as Performance-Based Compensation shall
additionally be subject to the requirements of Section 17 of this Plan. Except
as provided in Section 17 with respect to Performance-Based Compensation, the
Committee shall also have the authority to provide, in an Agreement or
otherwise, for the modification of a performance period and/or an adjustment or
waiver of the achievement of performance goals upon the occurrence of certain
events, which may include a Change of Control, a Corporate Transaction, a
recapitalization, a change in the accounting practices of the Company, or the
Participant’s death or Disability.

          (h)          Dividends and Dividend Equivalents. Any dividends or
distributions paid with respect to Shares that are subject to the unvested
portion of a Restricted Stock Award will be subject to the same restrictions as
the Shares to which such dividends or distributions relate, except for regular
cash dividends on Shares subject to the unvested portion of a Restricted Stock
Award that is subject only to service-based vesting conditions. In its
discretion, the Committee may provide in an Award Agreement for a Stock Unit
Award or an Other Stock-Based Award that the Participant will be entitled to
receive dividend equivalents on the units or other Share equivalents subject to
the Award based on dividends actually declared on outstanding Shares. The terms
of any dividend equivalents will be as set forth in the applicable Award
Agreement, including the time and form of payment and whether such dividend
equivalents will be credited with interest or deemed to be reinvested in
additional units or Share equivalents. Dividend equivalents paid with respect to
units or Share equivalents that are subject to the unvested portion of a Stock
Unit Award or an Other Stock-Based Award whose vesting is subject to the
satisfaction of specified performance objectives will be subject to the same
restrictions as the units or Share equivalents to which such dividend
equivalents relate. The Committee may, in its discretion, provide in Award
Agreements for restrictions on dividends and dividend equivalents in addition to
those specified in this Section 6(h).

7.          Stock Option Awards.

          (a)          Type and Exercise Price. The Agreement pursuant to which
an Option is granted shall specify whether the Option is an Incentive Stock
Option or a Non-Statutory Stock Option. The exercise price at which each Share
subject to an Option may be purchased shall be determined by the Committee and
set forth in the Agreement, and shall not be less than the Fair Market Value of
a Share on the Grant Date, except in the case of Substitute Awards (to the
extent consistent with Code Section 409A).

          (b)          Payment of Exercise Price. The purchase price of the
Shares with respect to which an Option is exercised shall be payable in full at
the time of exercise. The purchase price may be paid in cash or in such other
manner as the Committee may permit, including payment under a broker-assisted
sale and remittance program acceptable to the Committee or by withholding Shares
otherwise issuable to the Participant upon exercise of the Option or by delivery
to the Company of Shares (by actual delivery or attestation) already owned by
the Participant (in each case, such Shares having a Fair Market Value as of the
date the Option is exercised equal to the purchase price of the Shares being
purchased).

          (c)          Exercisability and Expiration. Each Option shall be
exercisable in whole or in part on the terms provided in the Agreement. No
Option shall be exercisable at any time after its scheduled expiration. When an
Option is no longer exercisable, it shall be deemed to have terminated.

          (d)          Incentive Stock Options.

                    (1)          An Option will constitute an Incentive Stock
Option only if the Participant receiving the Option is an Employee, and only to
the extent that (i) it is so designated in the applicable

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Agreement and (ii) the aggregate Fair Market Value (determined as of the
Option’s Grant Date) of the Shares with respect to which Incentive Stock Options
held by the Participant first become exercisable in any calendar year (under the
Plan and all other plans of the Company and its Affiliates) does not exceed
$100,000. To the extent an Option granted to a Participant exceeds this limit,
the Option shall be treated as a Non-Statutory Stock Option. The maximum number
of Shares that may be issued upon the exercise of Incentive Stock Options shall
equal the maximum number of Shares that may be the subject of Awards and issued
under the Plan as provided in the first sentence of Section 4(a).

                    (2)          No Participant may receive an Incentive Stock
Option under the Plan if, immediately after the grant of such Award, the
Participant would own (after application of the rules contained in Code Section
424(d)) Shares possessing more than 10% of the total combined voting power of
all classes of stock of the Company or an Affiliate, unless (i) the option price
for that Incentive Stock Option is at least 110% of the Fair Market Value of the
Shares subject to that Incentive Stock Option on the Grant Date and (ii) that
Option will expire no later than five years after its Grant Date.

                    (3)          For purposes of continued Service by a
Participant who has been granted an Incentive Stock Option, no approved leave of
absence may exceed three months unless reemployment upon expiration of such
leave is provided by statute or contract. If reemployment is not so provided,
then on the date six months following the first day of such leave, any Incentive
Stock Option held by the Participant shall cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Non-Statutory Stock
Option.

                    (4)          If an Incentive Stock Option is exercised after
the expiration of the exercise periods that apply for purposes of Code Section
422, such Option shall thereafter be treated as a Non-Statutory Stock Option.

                    (5)          The Agreement covering an Incentive Stock
Option shall contain such other terms and provisions that the Committee
determines necessary to qualify the Option as an Incentive Stock Option.

8.          Stock Appreciation Rights.

          (a)          Nature of Award. An Award of Stock Appreciation Rights
shall be subject to such terms and conditions as are determined by the
Committee, and shall provide a Participant the right to receive upon exercise of
the SAR all or a portion of the excess of (i) the Fair Market Value as of the
date of exercise of the SAR of the number of Shares as to which the SAR is being
exercised, over (ii) the aggregate exercise price for such number of Shares. The
per Share exercise price for any SAR Award shall be determined by the Committee
and set forth in the applicable Agreement, and shall not be less than the Fair
Market Value of a Share on the Grant Date, except in the case of Substitute
Awards (to the extent consistent with Code Section 409A).

          (b)          Exercise of SAR. Each SAR may be exercisable in whole or
in part at the times, on the terms and in the manner provided in the Agreement.
No SAR shall be exercisable at any time after its scheduled expiration. When a
SAR is no longer exercisable, it shall be deemed to have terminated. Upon
exercise of a SAR, payment to the Participant shall be made at such time or
times as shall be provided in the Agreement in the form of cash, Shares or a
combination of cash and Shares as determined by the Committee. The Agreement may
provide for a limitation upon the amount or percentage of the total appreciation
on which payment (whether in cash and/or Shares) may be made in the event of the
exercise of a SAR.

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9.          Restricted Stock Awards.

          (a)          Vesting and Consideration. Shares subject to a Restricted
Stock Award shall be subject to vesting conditions, and the corresponding lapse
of forfeiture conditions and other restrictions, based on such factors and
occurring over such period of time as the Committee may determine in its
discretion. The Committee may provide whether any consideration other than
Services must be received by the Company or any Affiliate as a condition
precedent to the grant of a Restricted Stock Award, and may correspondingly
provide for Company reacquisition or repurchase rights if such additional
consideration has been required and some or all of a Restricted Stock Award does
not vest.

          (b)          Shares Subject to Restricted Stock Awards. Unvested
Shares subject to a Restricted Stock Award shall be evidenced by a book-entry in
the name of the Participant with the Company’s transfer agent or by one or more
Stock certificates issued in the name of the Participant. Any such Stock
certificate shall be deposited with the Company or its designee, together with
an assignment separate from the certificate, in blank, signed by the
Participant, and bear an appropriate legend referring to the restricted nature
of the Restricted Stock evidenced thereby. Any book-entry shall be subject to
transfer restrictions and accompanied by a similar legend. Upon the vesting of
Shares of Restricted Stock and the corresponding lapse of the restrictions and
forfeiture conditions, the corresponding transfer restrictions and restrictive
legend will be removed from the book-entry evidencing such Shares or the
certificate evidencing such Shares, and any such certificate shall be delivered
to the Participant. Such vested Shares may, however, remain subject to
additional restrictions as provided in Section 18(c). Except as otherwise
provided in the Plan or an applicable Agreement, a Participant with a Restricted
Stock Award shall have all the rights of a shareholder, including the right to
vote the Shares of Restricted Stock.

10.          Stock Unit Awards.

          (a)          Vesting and Consideration. A Stock Unit Award shall be
subject to vesting conditions, and the corresponding lapse of forfeiture
conditions and other restrictions, based on such factors and occurring over such
period of time as the Committee may determine in its discretion. The Committee
may provide whether any consideration other than Services must be received by
the Company or any Affiliate as a condition precedent to the settlement of a
Stock Unit Award.

          (b)          Payment of Award. Following the vesting of a Stock Unit
Award, settlement of the Award and payment to the Participant shall be made at
such time or times in the form of cash, Shares (which may themselves be
considered Restricted Stock under the Plan subject to restrictions on transfer
and forfeiture conditions) or a combination of cash and Shares as determined by
the Committee. If the Stock Unit Award is not by its terms exempt from the
requirements of Code Section 409A, then the applicable Agreement shall contain
terms and conditions intended to avoid adverse tax consequences specified in
Code Section 409A.

11.          Cash-Based and Other Stock-Based Awards.

          (a)          Cash Incentive Awards. A Cash Incentive Award shall be
considered a performance-based Award for purposes of, and subject to, Section
6(g), the payment of which shall be contingent upon the degree to which one or
more specified performance goals have been achieved over the specified
performance period. Cash Incentive Awards may be granted to any Participant in
such amounts and upon such terms and at such times as shall be determined by the
Committee, and may be denominated in units that have a dollar value established
by the Committee as of the Grant Date. Following the completion of the
applicable performance period and the vesting of a Cash Incentive Award, payment
of the settlement amount of the Award to the Participant shall be made at such
time or times in the form of cash, Shares or

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other forms of Awards under the Plan (valued for these purposes at their grant
date fair value) or a combination of cash, Shares and other forms of Awards as
determined by the Committee and specified in the applicable Agreement. If a Cash
Incentive Award is not by its terms exempt from the requirements of Code Section
409A, then the applicable Agreement shall contain terms and conditions intended
to avoid adverse tax consequences specified in Code Section 409A.

          (b)          Other Stock-Based Awards. The Committee may from time to
time grant Stock and other Awards that are valued by reference to and/or payable
in whole or in part in Shares under the Plan. The Committee, in its sole
discretion, shall determine the terms and conditions of such Awards, which shall
be consistent with the terms and purposes of the Plan. The Committee may, in its
sole discretion, direct the Company to issue Shares subject to restrictive
legends and/or stop transfer instructions that are consistent with the terms and
conditions of the Award to which the Shares relate.

12.          Changes in Capitalization, Corporate Transactions, Change in
Control.

          (a)          Adjustments for Changes in Capitalization. In the event
of any equity restructuring (within the meaning of FASB ASC Topic 718 - Stock
Compensation) that causes the per share value of Shares to change, such as a
stock dividend, stock split, spinoff, rights offering or recapitalization
through an extraordinary dividend, the Committee shall make such adjustments as
it deems equitable and appropriate to (i) the aggregate number and kind of
Shares or other securities issued or reserved for issuance under the Plan, (ii)
the number and kind of Shares or other securities subject to outstanding Awards,
(iii) the exercise price of outstanding Options and SARs, and (iv) any maximum
limitations prescribed by the Plan with respect to certain types of Awards or
the grants to individuals of certain types of Awards. In the event of any other
change in corporate capitalization, including a merger, consolidation,
reorganization, or partial or complete liquidation of the Company, such
equitable adjustments described in the foregoing sentence may be made as
determined to be appropriate and equitable by the Committee to prevent dilution
or enlargement of rights of Participants. In either case, any such adjustment
shall be conclusive and binding for all purposes of the Plan. No adjustment
shall be made pursuant to this Section 12(a) in connection with the conversion
of any convertible securities of the Company, or in a manner that would cause
Incentive Stock Options to violate Section 422(b) of the Code or cause
an Award to be subject to adverse tax consequences under Section 409A of the
Code.

          (b)          Corporate Transactions. Unless otherwise provided in an
applicable Agreement, the following provisions shall apply to outstanding Awards
in the event of a Change in Control that involves a Corporate Transaction.

                    (1)          Continuation, Assumption or Replacement of
Awards. In the event of a Corporate Transaction, then the surviving or successor
entity (or its Parent) may continue, assume or replace Awards outstanding as of
the date of the Corporate Transaction (with such adjustments as may be required
or permitted by Sections 12(a) and 6(g)), and such Awards or replacements
therefor shall remain outstanding and be governed by their respective terms,
subject to Section 12(b)(4) below. A surviving or successor entity may elect to
continue, assume or replace only some Awards or portions of Awards. For purposes
of this Section 12(b)(1), an Award shall be considered assumed or replaced if,
in connection with the Corporate Transaction and in a manner consistent with
Code Sections 409A and 424, either (i) the contractual obligations represented
by the Award are expressly assumed by the surviving or successor entity (or its
Parent) with appropriate adjustments to the number and type of securities
subject to the Award and the exercise price thereof that preserves the intrinsic
value of the Award existing at the time of the Corporate Transaction, or (ii)
the Participant has received a comparable equity-based award that preserves the
intrinsic value of the Award existing at the time of the Corporate Transaction
and provides for a vesting or exercisability schedule that is the same as or
more favorable to the Participant.

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                    (2)          Acceleration. If and to the extent that
outstanding Awards under the Plan are not continued, assumed or replaced in
connection with a Corporate Transaction, then (i) all outstanding Options and
SARs shall become fully exercisable for such period of time prior to the
effective time of the Corporate Transaction as is deemed fair and equitable by
the Committee, and shall terminate at the effective time of the Corporate
Transaction, and (ii) all outstanding Full Value Awards shall fully vest
immediately prior to the effective time of the Corporate Transaction. The
Committee shall provide written notice of the period of accelerated
exercisability of Options and SARs to all affected Participants. The accelerated
exercisability of any Option or SAR pursuant to this Section 12(b)(2) and the
exercise of any Option or SAR whose exercisability is so accelerated shall be
conditioned upon the consummation of the Corporate Transaction, and any such
exercise shall be effective only immediately before such consummation.

                    (3)          Payment for Awards. If and to the extent that
outstanding Awards under the Plan are not continued, assumed or replaced in
connection with a Corporate Transaction, then the Committee may provide that
some or all of such outstanding Awards shall be canceled at or immediately prior
to the effective time of the Corporate Transaction in exchange for payments to
the holders as provided in this Section 12(b)(3). The Committee will not be
required to treat all Awards similarly for purposes of this Section 12(b)(3).
The payment for any Award canceled shall be in an amount equal to the
difference, if any, between (i) the fair market value (as determined in good
faith by the Committee) of the consideration that would otherwise be received in
the Corporate Transaction for the number of Shares subject to the Award, and
(ii) the aggregate exercise price (if any) for the Shares subject to such Award.
If the amount determined pursuant to clause (i) of the preceding sentence is
less than or equal to the amount determined pursuant to clause (ii) of the
preceding sentence with respect to any Award, such Award may be canceled
pursuant to this Section 12(b)(3) without payment of any kind to the affected
Participant. Payment of any amount under this Section 12(b)(3) shall be made in
such form, on such terms and subject to such conditions as the Committee
determines in its discretion, which may or may not be the same as the form,
terms and conditions applicable to payments to the Company’s shareholders in
connection with the Corporate Transaction, and may, in the Committee’s
discretion, include subjecting such payments to vesting conditions comparable to
those of the Award surrendered, subjecting such payments to escrow or holdback
terms comparable to those imposed upon the Company’s shareholders under the
Corporate Transaction, or calculating and paying the present value of payments
that would otherwise be subject to escrow or holdback terms.

                    (4)          Termination After a Corporate Transaction. If
and to the extent that Awards are continued, assumed or replaced under the
circumstances described in Section 12(b)(1), and if within 18 months after the
Corporate Transaction a Participant experiences an involuntary termination of
Service for reasons other than Cause, or voluntarily terminates his or her
Service for Good Reason, then (i) outstanding Options and SARs issued to the
Participant that are not yet fully exercisable shall immediately become
exercisable in full and shall remain exercisable for one year following the
Participant’s termination of Service, and (ii) any Full Value Awards that are
not yet fully vested shall immediately vest in full.

          (c)          Change in Control. In connection with a Change in Control
that does not involve a Corporate Transaction, the Committee may provide (in the
applicable Agreement or otherwise) for one or more of the following: (i) that
any Award shall become fully vested and exercisable upon the occurrence of the
Change in Control or upon the involuntary termination of the Participant without
Cause or the Participant’s voluntary termination for Good Reason within 18
months of the Change in Control, (ii) that any Option or SAR shall remain
exercisable during all or some specified portion of its remaining term, or (iii)
that Awards shall be canceled in exchange for payments in a manner similar to
that provided in Section 12(b)(3). The Committee will not be required to treat
all Awards similarly in such circumstances.

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          (d)          Dissolution or Liquidation. Unless otherwise provided in
an applicable Agreement, in the event the shareholders of the Company approve
the complete dissolution or liquidation of the Company, all outstanding Awards
shall vest and become fully exercisable, and will terminate immediately prior to
the consummation of any such proposed action. The Committee will notify each
Participant as soon as practicable of such accelerated vesting and
exercisability and pending termination.

 

 

13.

Plan Participation and Service Provider Status. Status as a Service Provider
shall not be construed as a commitment that any Award will be made under the
Plan to that Service Provider or to eligible Service Providers generally.
Nothing in the Plan or in any Agreement or related documents shall confer upon
any Service Provider or Participant any right to continued Service with the
Company or any Affiliate, nor shall it interfere with or limit in any way any
right of the Company or any Affiliate to terminate the person’s Service at any
time with or without Cause or change such person’s compensation, other benefits,
job responsibilities or title.

 

 

14.

Tax Withholding. The Company or any Affiliate, as applicable, shall have the
right to (i) withhold from any cash payment under the Plan or any other
compensation owed to a Participant an amount sufficient to cover any required
withholding taxes related to the grant, vesting, exercise or settlement of an
Award, and (ii) require a Participant or other person receiving Shares under the
Plan to pay a cash amount sufficient to cover any required withholding taxes
before actual receipt of those Shares. In lieu of all or any part of a cash
payment from a person receiving Shares under the Plan, the Committee may permit
the individual to cover all or any part of the required withholdings (up to the
Participant’s minimum required tax withholding rate) through a reduction in the
number of Shares delivered or a delivery or tender to the Company of Shares held
by the Participant or other person, in each case valued in the same manner as
used in computing the withholding taxes under applicable laws.

15.          Effective Date, Duration, Amendment and Termination of the Plan.

          (a)          Effective Date. The Plan shall become effective on the
date it is approved by the Company’s shareholders, which shall be considered the
date of its adoption for purposes of Treasury Regulation §1.422-2(b)(2)(i). No
Awards shall be made under the Plan prior to its effective date. If the
Company’s shareholders fail to approve the Plan within 12 months of its approval
by the Board, the Plan shall be of no further force or effect.

          (b)          Duration of the Plan. The Plan shall remain in effect
until all Shares subject to it shall be distributed, the Plan is terminated
pursuant to Section 15(c), or the tenth anniversary of the effective date of the
Plan, whichever occurs first (the “Termination Date”). Awards made before the
Termination Date shall continue to be outstanding in accordance with their terms
unless limited in the applicable Agreements.

          (c)          Amendment and Termination of the Plan. The Board may at
any time terminate, suspend or amend the Plan. The Company shall submit any
amendment of the Plan to its shareholders for approval only to the extent
required by applicable laws or regulations or the rules of any securities
exchange on which the Shares may then be listed. No termination, suspension, or
amendment of the Plan may materially impair the rights of any Participant under
a previously granted Award without the Participant’s consent, unless such action
is necessary to comply with applicable law or stock exchange rules.

          (d)          Amendment of Awards. Subject to Section 15(e), the
Committee may unilaterally amend the terms of any Agreement previously granted,
except that no such amendment may materially impair

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the rights of any Participant under the applicable Award without the
Participant’s consent, unless such amendment is necessary to comply with
applicable law or stock exchange rules or any compensation recovery policy as
provided in Section 18(i)(3).

          (e)          No Option or SAR Repricing. Except as provided in Section
12(a), no Option or Stock Appreciation Right granted under the Plan may be
amended to decrease the exercise price thereof, be cancelled in exchange for the
grant of any new Option or Stock Appreciation Right with a lower exercise price
or any new Full Value Award, be repurchased by the Company or any Affiliate, or
otherwise be subject to any action that would be treated under accounting rules
or otherwise as a “repricing” of such Option or Stock Appreciation Right, unless
such action is first approved by the Company’s shareholders.

 

 

16.

Substitute Awards. The Committee may also grant Awards under the Plan in
substitution for, or in connection with the assumption of, existing awards
granted or issued by another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a transaction involving
a merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or an Affiliate is a party.
The terms and conditions of the Substitute Awards may vary from the terms and
conditions set forth in the Plan to the extent that the Committee at the time of
the grant may deem appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.

17.          Performance-Based Compensation.

          (a)          Designation of Awards. If the Committee determines at the
time a Full Value Award or a Cash Incentive Award is granted to a Participant
that such Participant is, or is likely to be, a “covered employee” for purposes
of Code Section 162(m) as of the end of the tax year in which the Company would
ordinarily claim a tax deduction in connection with such Award, then the
Committee may provide that this Section 17 will be applicable to such Award,
which shall be considered Performance-Based Compensation.

          (b)          Compliance with Code Section 162(m). If an Award is
subject to this Section 17, then the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement over the applicable performance period of
one or more performance goals based on one or more of the performance measures
specified in Section 17(d). The Committee will select the applicable performance
measure(s) and specify the performance goal(s) based on those performance
measures for any performance period, specify in terms of an objective formula or
standard the method for calculating the amount payable to a Participant if the
performance goal(s) are satisfied, and certify the degree to which applicable
performance goals have been satisfied and any amount payable in connection with
an Award subject to this Section 17, all within the time periods prescribed by
and consistent with the other requirements of Code Section 162(m). In specifying
the performance goals applicable to any performance period, the Committee may
provide that one or more objectively determinable adjustments shall be made to
the performance measures on which the performance goals are based, which may
include adjustments that would cause such measures to be considered “non-GAAP
financial measures” within the meaning of Rule 101 under Regulation G
promulgated by the Securities and Exchange Commission. The Committee may also
adjust performance measures for a performance period to the extent permitted by
Code Section 162(m) in connection with an event described in Section 12(a) to
prevent the dilution or enlargement of a Participant’s rights with respect to
Performance-Based Compensation. The Committee may adjust downward, but not
upward, any amount determined to be otherwise payable in connection with such an
Award. The Committee may also provide, in an Agreement or otherwise, that the
achievement of specified performance goals in connection with an Award subject
to this Section 17 may be waived upon the death or Disability of the

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Participant or under any other circumstance with respect to which the existence
of such possible waiver will not cause the Award to fail to qualify as
“performance-based compensation” under Code Section 162(m).

          (c)          Limitations. With respect to Awards of Performance-Based
Compensation, the maximum number of Shares that may be the subject of any Full
Value Awards that are denominated in Shares or Share equivalents and that are
granted to any one Participant during any calendar year shall not exceed
1,000,000 Shares (subject to adjustment as provided in Section 12(a)). The
maximum amount payable with respect to any Cash Incentive Awards and Full Value
Awards that are denominated other than in Shares or Share equivalents and that
are granted to any one Participant during any calendar year shall not exceed
$10,000,000 multiplied by the number of full or partial years in the applicable
performance period.

          (d)          Performance Measures. For purposes of any Full Value
Award considered Performance-Based Compensation subject to this Section 17, the
performance measures to be utilized shall be limited to one or a combination of
two or more of the following: revenue or net sales; gross profit; operating
profit; net income; earnings before income taxes; earnings before one or more of
interest, taxes, depreciation, amortization and other adjustments; profitability
as measured by return ratios (including, but not limited to, return on assets,
return on equity, return on investment and return on revenues or gross profit)
or by the degree to which any of the foregoing earnings measures exceed a
percentage of revenues or gross profit; cash flow; market share; margins
(including one or more of gross, operating and net earnings margins); stock
price; total stockholder return; asset quality; non-performing assets; operating
assets; operating expenses; balance of cash, cash equivalents and marketable
securities; improvement in or attainment of expense levels or cost savings;
inventory levels; inventory or operating asset turnover; accounts receivable
levels (including measured in terms of days sales outstanding); economic value
added; improvement in or attainment of working capital levels; employee
retention; customer satisfaction; and implementation or completion of critical
projects; and growth in customer base. Any performance goal based on one or more
of the foregoing performance measures may, in the Committee’s discretion, be
expressed in absolute amounts, on a per share basis (basic or diluted), relative
to one or more other performance measures, as a growth rate or change from
preceding periods, or as a comparison to the performance of specified companies
or a published or special index (including stock market indices) or other
external measures, and may relate to one or any combination of Company,
Affiliate or business unit performance.

18.          Other Provisions.

          (a)          Unfunded Plan. The Plan shall be unfunded and the Company
shall not be required to segregate any assets that may at any time be
represented by Awards under the Plan. Neither the Company, its Affiliates, the
Committee, nor the Board shall be deemed to be a trustee of any amounts to be
paid under the Plan nor shall anything contained in the Plan or any action taken
pursuant to its provisions create or be construed to create a fiduciary
relationship between the Company and/or its Affiliates, and a Participant. To
the extent any person has or acquires a right to receive a payment in connection
with an Award under the Plan, this right shall be no greater than the right of
an unsecured general creditor of the Company.

          (b)          Limits of Liability. Except as may be required by law,
neither the Company nor any member of the Board or of the Committee, nor any
other person participating (including participation pursuant to a delegation of
authority under Section 3(c) of the Plan) in any determination of any question
under the Plan, or in the interpretation, administration or application of the
Plan, shall have any liability to any party for any action taken, or not taken,
in good faith under the Plan.

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          (c)          Compliance with Applicable Legal Requirements. No Shares
distributable pursuant to the Plan shall be issued and delivered unless the
issuance of the Shares complies with all applicable legal requirements,
including compliance with the provisions of applicable state and federal
securities laws, and the requirements of any securities exchanges on which the
Company’s Shares may, at the time, be listed. During any period in which the
offering and issuance of Shares under the Plan are not registered under federal
or state securities laws, Participants shall acknowledge that they are acquiring
Shares under the Plan for investment purposes and not for resale, and that
Shares may not be transferred except pursuant to an effective registration
statement under, or an exemption from the registration requirements of, such
securities laws. Any book-entry or stock certificate evidencing Shares issued
under the Plan that are subject to such securities law restrictions shall be
accompanied by or bear an appropriate restrictive legend.

          (d)          Other Benefit and Compensation Programs. Payments and
other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant’s regular, recurring
compensation for purposes of the termination, indemnity or severance pay laws of
any country or state and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan, contract or
similar arrangement provided by the Company or an Affiliate unless expressly so
provided by such other plan, contract or arrangement, or unless the Committee
expressly determines that an Award or portion of an Award should be included to
accurately reflect competitive compensation practices or to recognize that an
Award has been made in lieu of a portion of competitive cash compensation.

          (e)          Governing Law. To the extent that federal laws do not
otherwise control, the Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of Minnesota
without regard to its conflicts-of-law principles and shall be construed
accordingly.

          (f)          Severability. If any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

          (g)          Code Section 409A. It is intended that (i) all Awards of
Options, SARs and Restricted Stock under the Plan will not provide for the
deferral of compensation within the meaning of Code Section 409A and thereby be
exempt from Code Section 409A, and (ii) all other Awards under the Plan will
either not provide for the deferral of compensation within the meaning of Code
Section 409A, or will comply with the requirements of Code Section 409A, and the
Committee shall endeavor to structure Awards and administer and interpret the
Plan in accordance with this intent. The Plan and any Agreement may be
unilaterally amended by the Company in any manner deemed necessary or advisable
by the Committee or Board in order to maintain such exemption from or compliance
with Code Section 409A, and any such amendment shall conclusively be presumed to
be necessary to comply with applicable law. Notwithstanding anything to the
contrary in the Plan or any Agreement, with respect to any Award that
constitutes a deferral of compensation subject to Code Section 409A:

                    (1)          If any amount is payable under such Award upon
a termination of Service, a termination of Service will be deemed to have
occurred only at such time as the Participant has experienced a “separation from
service” as such term is defined for purposes of Code Section 409A; and

                    (2)          If any amount shall be payable with respect to
any such Award as a result of a Participant’s “separation from service” at such
time as the Participant is a “specified employee” within the meaning of Code
Section 409A, then no payment shall be made, except as permitted under Code
Section 409A, prior to the first business day after the earlier of (i) the date
that is six months after the

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Participant’s separation from Service or (ii) the Participant’s death. Unless
the Committee has adopted a specified employee identification policy as
contemplated by Code Section 409A, specified employees will be identified in
accordance with the default provisions specified under Code Section 409A.

Neither the Company, the Committee nor any other person involved with the
administration of this Plan shall in any way be responsible for ensuring the
exemption of any Award from, or compliance by any Award with, the requirements
of Code Section 409A. By accepting an Award under this Plan, each Participant
acknowledges that the Company has no duty or obligation to design or administer
the Plan or Awards granted thereunder in a manner that minimizes a Participant’s
tax liabilities, including the avoidance of any additional tax liabilities under
Code Section 409A.

          (h)          Rule 16b-3. It is intended that the Plan and all Awards
granted pursuant to it shall be administered by the Committee so as to permit
the Plan and Awards to comply with Exchange Act Rule 16b-3. If any provision of
the Plan or of any Award would otherwise frustrate or conflict with the intent
expressed in this Section 18(h), that provision to the extent possible shall be
interpreted and deemed amended in the manner determined by the Committee so as
to avoid the conflict. To the extent of any remaining irreconcilable conflict
with this intent, the provision shall be deemed void as applied to Participants
subject to Section 16 of the Exchange Act to the extent permitted by law and in
the manner deemed advisable by the Committee.

          (i)          Forfeiture and Compensation Recovery.

                    (1)          The Committee may specify in an Agreement that
the Participant’s rights, payments, and benefits with respect to an Award will
be subject to reduction, cancellation, forfeiture or recovery by the Company
upon the occurrence of certain specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award. Such events may
include termination of Service for Cause, violation of any material Company or
Affiliate policy, breach of noncompetition, non-solicitation or confidentiality
provisions that apply to the Participant, a determination that the payment of
the Award was based on an incorrect determination that financial or other
criteria were met or other conduct by the Participant that is detrimental to the
business or reputation of the Company or its Affiliates.

                    (2)          Awards and any compensation associated
therewith may be made subject to forfeiture, recovery by the Company or other
action pursuant to any compensation recovery policy adopted by the Board or the
Committee at any time, including in response to the requirements of Section 10D
of the Exchange Act and any implementing rules and regulations thereunder, or as
otherwise required by law. Any Agreement may be unilaterally amended by the
Committee to comply with any such compensation recovery policy.

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