EXHIBIT 10 (ff)

DRAFT Dated August 4, 2004
SUBJECT TO REVIEW BY LEGAL COUNSEL

Regis Corporation

2004 Long Term Incentive Plan

(REGIS CORPORATION LOGO) [c88053c8805300.gif]

 

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TABLE OF CONTENTS

              Page
ARTICLE I            ESTABLISHMENT AND PURPOSE
    1  
1.1 Establishment
    1  
1.2 Purpose
    1  
ARTICLE II           DEFINITIONS
    1  
2.1 Affiliate
    1  
2.2 Agreement
    1  
2.3 Award
    1  
2.4 Beneficiary
    1  
2.5 Board of Directors or Board
    1  
2.6 Cause
    2  
2.7 Change in Control
    2  
2.8 Code
    2  
2.9 Commission
    2  
2.10 Committee
    2  
2.11 Common Stock
    3  
2.12 Company
    3  
2.13 Covered Employees
    3  
2.14 Disability
    3  
2.15 Effective Date
    3  
2.16 Exchange Act
    3  
2.17 Exercise Price
    3  
2.18 Fair Market Value
    3  
2.19 Grant Date
    4  
2.20 Incentive Stock Option
    4  
2.21 Non-Qualified Stock Option
    4  
2.22 Option Period
    4  
2.23 Participant
    4  
2.24 Performance Unit
    4  
2.25 Plan
    4  
2.26 Representative
    4  
2.27 Restricted Stock
    5  
2.28 Rule 16b-3
    5  
2.29 Stock Appreciate Right
    5  
2.30 Stock Option or Option
    5  
2.31 Termination of Employment
    5  
ARTICLE III           ADMINISTRATION
    6  
3.1 Committee Structure and Actions
    6  
3.2 Committee Authority
    6  

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              Page
ARTICLE IV           SHARES SUBJECT TO PLAN
    7  
4.1 Number of Shares
    7  
4.2 Release of Shares
    7  
4.3 Restrictions on Shares
    8  
4.4 Shareholder Rights
    8  
4.5 Effect of Certain Changes
    8  
ARTICLE V            ELIGIBILITY
    9  
5.1 Eligibility
    9  
ARTICLE VI           STOCK OPTIONS
    9  
6.1 General
    9  
6.2 Grant
    9  
6.3 Terms and Conditions
    9  
6.4 Termination by Reason of Death
    10  
6.5 Termination by Reason of Disability
    11  
6.6 Other Termination
    11  
ARTICLE VII          STOCK APPRECIATION RIGHTS
    11  
7.1 General
    11  
7.2 Grant
    11  
7.3 Terms and Conditions
    11  
ARTICLE VIII         RESTRICTED STOCK
    12  
8.1 General
    12  
8.2 Grant, Awards and Certificates
    12  
8.3 Terms and Conditions
    13  
ARTICLE IX            PERFORMANCE AWARDS
    14  
9.1 General
    14  
9.2 Earning Performance Unit Awards
    14  
9.3 Termination of Employment Due to Death, Disability or Retirement or at the
Request of the Company without Cause
    14  
9.4 Nontransferability
    14  
9.5 Election to Defer
    14  
ARTICLE X            CHANGE IN CONTROL PROVISIONS
    15  
10.1 Impact of Event
    15  
10.2 Additional Discretion
    15  

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              Page
ARTICLE XI             PROVISIONS APPLICABLE TO SHARES ACQUIRED UNDER THIS PLAN
    15  
11.1 No Company Obligation
    15  
ARTICLE XII            MISCELLANEOUS
    15  
12.1 Amendments and Termination
    15  
12.2 Unfunded Status of Plan
    16  
12.3 Provisions Relating to Internal Revenue Code Section 162(m)
    16  
12.4 No Additional Obligation
    18  
12.5 Withholding
    18  
12.6 Controlling Law
    18  
12.7 Offset
    18  
12.8 Nontransferability; Beneficiaries
    18  
12.9 Gross-Up for Excise Tax
    19  
12.10 No Rights with Respect to Continuance of Employment
    19  
12.11 Awards in Substitution for Awards Granted by Other Corporations
    19  
12.12 Foreign Alternatives
    20  
12.13 Delivery of Stock Certificates
    20  
12.14 Headings
    20  
12.15 Severability
    20  
12.16 Successors and Assigns
    20  
12.17 Entire Agreement
    20  

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REGIS CORPORATION
2004 LONG TERM INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE

     1.1 Establishment. The Regis Corporation 2004 Long Term Incentive Plan
(“Plan”) is hereby established by Regis Corporation (“Company”), effective as of
the Effective Date.

     1.2 Purposes. The purpose of the Plan is to foster and promote the
long-term financial success of the Company and materially increase shareholder
value by motivating performance through incentive compensation. The Plan also is
intended to encourage Participant ownership in the Company, attract and retain
talent, and enable Participants to participate in the long-term growth and
financial success of the Company. The Plan and the grant of Awards thereunder
are expressly conditioned upon the Plan’s approval by the shareholders of the
Company.

ARTICLE II

DEFINITIONS

     For purposes of the Plan, the following terms are defined as set forth
below:

     2.1 “Affiliate” means any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated association or other entity (other than the Company) that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company.

     2.2 “Agreement” means any agreement entered into pursuant to the Plan by
which an Award is granted to a Participant

     2.3 “Award” means any Stock Option, Stock Appreciation Right, Restricted
Stock or Performance Unit granted to a Participant under the Plan. Awards shall
be subject to the terms and conditions of the Plan and shall be evidenced by an
Agreement containing such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall deem desirable.

     2.4 “Beneficiary” means any person or other entity, which has been
designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the compensation, specified
under the Plan to the extent permitted. If there is no designated beneficiary,
then the term means any person or other entity entitled by will or the laws of
descent and distribution to receive such compensation.

     2.5 “Board of Directors” or “Board” means the Board of Directors of the
Company.

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     2.6 “Cause” means, for purposes of determining whether and when a
Participant has incurred a Termination of Employment for Cause, any act or
omission which permits the Company to terminate the written agreement or
arrangement between the Participant and the Company or an Affiliate for “cause”
as defined in such agreement or arrangement, or in the event there is no such
agreement or arrangement or the agreement or arrangement does not define the
term “Cause,” then “Cause” means the Participant’s intentional participation in
illegal conduct which (i) is materially and directly detrimental to the
financial interests of the Company or an Affiliate and (ii) results in the
Participant’s conviction of a felony.

     2.7 “Change in Control” means the first to occur of any of the following
events:

     (1) the acquisition by any “person,” as that term is used in Sections 13(d)
and 14(d) of the Exchange Act of “beneficial ownership,” as defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of 20% or more of the
shares of the Company’s capital stock;

     (2) the first day on which less than two-thirds of the total membership of
the Board of Directors shall be Continuing Directors (as that term is defined in
Article VII of the Company’s Articles of Incorporation);

     (3) the approval by the shareholders of the Company of a merger, share
exchange, or consolidation of the Company (a “Transaction”), other than a
Transaction which would result in the Voting Stock of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the Voting Stock of the Company or such surviving
entity immediately after such Transaction; or

     (4) the approval by the shareholders of the Company of a complete
liquidation of the Company or a sale or disposition of all or substantially all
the assets of the Company.

     2.8 “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and any successor, along with related rules, regulations and
interpretations.

     2.9 “Commission” means the Securities and Exchange Commission or any
successor thereto.

     2.10 “Committee” means the committee of the Board responsible for granting
Awards under the Plan, which shall initially be the Compensation Committee of
the Board, until such time as the Board may designate a different committee. The
Committee shall consist solely of two or more directors, each of whom is a
“Non-Employee Director” within the meaning of Rule 16b-3 and each of whom is
also an “outside director” under Section 162(m) of the Code. In addition, each
member of the Committee must be an “independent director” as determined under
the corporate governance rules of the New York Stock Exchange, as amended from
time to time.

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     2.11 “Common Stock” means the shares of the Company’s common stock, $0.05
par value, whether presently or hereafter issued, and any other stock or
security resulting from adjustment thereof as described hereinafter, or the
common stock of any successor to the Company which is designated for the purpose
of the Plan.

     2.12 “Company” means Regis Corporation, a Minnesota corporation, and
includes any successor or assignee corporation or corporations into which the
Company may be merged, changed or consolidated; any corporation for whose
securities the securities of the Company shall be exchanged; and any assignee of
or successor to substantially all of the assets of the Company.

     2.13 “Covered Employee” means a Participant who is a “covered employee”
within the meaning of Section 162(m) of the Code.

     2.14 “Disability” means a mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of the
Company or an Affiliate, or if there is no such plan or the Participant is not
covered by such a plan or the Participant is not an employee of the Company or
an Affiliate, a mental or physical illness that renders a Participant totally
and permanently incapable of performing the Participant’s duties for the Company
or an Affiliate. Notwithstanding the foregoing, a Disability shall not qualify
under this Plan if it is the result of (i) a willfully self-inflicted injury or
willfully self-induced sickness; or (ii) an injury or disease contracted,
suffered, or incurred while participating in a criminal offense. The
determination of Disability for purposes of this Plan shall be made by the
Committee and shall not be construed to be an admission of disability for any
other purpose.

     2.15 “Effective Date” means May 26, 2004, subject to shareholder approval
at the Company’s annual meeting of shareholders on October 28, 2004.

     2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     2.17 “Exercise Price” means the price at which the Common Stock may be
purchased under an Option or may be obtained under a Stock Appreciation Right.
In no event may the Exercise Price per share of Common Stock covered by an
Option, or the Exercise Price of a Stock Appreciation Right, be reduced through
the technique commonly known as “repricing.”

     2.18 “Fair Market Value” means the value of one share of Common Stock,
determined pursuant to the applicable method described below, without regard to
whether the Common Stock is restricted or represents a minority interest:

     (1) if the Common Stock is listed on a securities exchange or quoted on The
Nasdaq Stock Market (“Nasdaq”), the closing price of a share of Common Stock on
the relevant date (or, if such date is not a business day or a day on which
quotations are reported, then on the immediately preceding date on which
quotations were reported), as reported by the principal national exchange on
which such shares are traded (in the case of an exchange) or by Nasdaq, as the
case may be;

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     (2) if the Common Stock is not listed on a national securities exchange or
quoted on Nasdaq, but is actively traded in the over-the-counter market, the
average of the closing bid and asked prices for a share of the Common Stock on
the relevant date (or, if such date is not a business day or a day on which
quotations are reported, then on the immediately preceding date on which
quotations were reported), or the most recent preceding date for which such
quotations are reported; and

     (3) if, on the relevant date, the Common Stock is not publicly traded or
reported as described in (a) or (b) above, the value determined in good faith by
the Board as of the last day of the Company’s most recently ended fiscal year
(except as otherwise provided herein or in an Agreement), based on an annual
valuation of the Company from a review of the Company’s financial statements (or
such other approach deemed appropriate) prepared by an independent valuation or
auditing firm selected by the Board.

     2.19 Grant Date” means the date as of which an Award is granted pursuant to
the Plan.

     2.20 “Incentive Stock Option” means any Stock Option intended to be and
designated as an “incentive stock option” within the meaning of Section 422 of
the Code. Members of the Board who are not otherwise employees of the Company do
not qualify for Incentive Stock Options.

     2.21 “Non-Qualified Stock Option” means an Option to purchase Common Stock
in the Company granted under the Plan, the taxation of which is pursuant to
Section 83 of the Code.

     2.22 “Option Period” means the period during which the Option shall be
exercisable in accordance with an Agreement and Article VI.

     2.23 “Participant” means a person who satisfies the eligibility conditions
of Article V and to whom an Award has been granted by the Committee under the
Plan. In the event that a Representative is appointed for a Participant, then
the term “Participant” shall mean such appointed Representative. Notwithstanding
the appointment of a Representative, the term “Termination of Employment” shall
mean the Termination of Employment of the Participant.

     2.24 “Performance Unit” shall have the meaning set forth in Section 9.1
hereof.

     2.25 “Plan” means the Regis Corporation 2004 Long Term Incentive Plan, as
herein set forth and as may be amended from time to time.

     2.26 “Representative” means (a) the person or entity acting as the executor
or administrator of a Participant’s estate pursuant to the last will and
testament of a Participant or pursuant to the laws of the jurisdiction in which
the Participant had the Participant’s primary residence at the date of the
Participant’s death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant’s death; or
(d) the person to whom an Award has been

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permissibly transferred; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law and
recognized by the Committee.

     2.27 “Restricted Stock” means Common Stock granted to a Participant under
Section 8.1 hereof and which is subject to certain restrictions and to a risk of
forfeiture or repurchase by the Company.

     2.28 “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Commission under
Section 16 of the Exchange Act.

     2.29 “Stock Appreciation Right” means a right granted under Article VII.

     2.30 “Stock Option” or “Option” means a right, granted to a Participant
under Section 6.1 hereof, to purchase Common Stock at a specified price during
specified time periods.

     2.31 “Termination of Employment” means the occurrence of any act or event
whether pursuant to an employment agreement or otherwise that actually or
effectively causes or results in the person’s ceasing, for whatever reason, to
be any and all of an officer or employee of the Company or of any Affiliate, or
to be any and all of an officer or employee of any entity that provides services
to the Company or an Affiliate, including, without limitation, death,
Disability, dismissal, severance at the election of the Participant, retirement,
or severance as a result of the discontinuance, liquidation, sale or transfer by
the Company or its Affiliates of a business owned or operated by the Company or
its Affiliates. With respect to any person who is not an employee with respect
to the Company or an Affiliate (such as a non-employee member of the Board), the
Agreement shall establish what act or event shall constitute a Termination of
Employment for purposes of the Plan. A Termination of Employment shall occur
with respect to an employee who is employed by an Affiliate if the Affiliate
shall cease to be an Affiliate and the Participant shall not immediately
thereafter become an employee of the Company or an Affiliate.

     In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.

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ARTICLE III

ADMINISTRATION

     3.1 Committee Structure and Actions. The Plan shall be administered by the
Committee in accordance with the rules and responsibilities of the Committee.

     3.2 Committee Authority. Subject to the terms of the Plan, the Committee
shall have the authority:

     (1) to select those persons to whom Awards may be granted from time to
time;

     (2) to determine whether and to what extent Awards are to be granted
hereunder;

     (3) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;

     (4) to determine the terms and conditions of any Award granted hereunder,
provided that the Exercise Price of any Option or Stock Appreciation Right shall
not be less than the Fair Market Value per share as of the Grant Date;

     (5) to adjust the terms and conditions, at any time or from time to time,
of any Award, subject to the limitations of Section 12.1;

     (6) to determine to what extent and under what circumstances shares of
Common Stock and other amounts payable with respect to an Award shall be
deferred;

     (7) to provide for the forms of Agreement to be utilized in connection with
this Plan;

     (8) to determine what legal requirements are applicable to the Plan,
Awards, and the issuance of Common Stock, and to require of a Participant that
appropriate action be taken with respect to such requirements;

     (9) to cancel, with the consent of the Participant or as otherwise provided
in the Plan or an Agreement, outstanding Awards;

     (10) to require as a condition of the exercise of an Award or the issuance
or transfer of a certificate (or other representation of title) of Common Stock,
the withholding from a Participant of the amount of any taxes as may be
necessary in order for the Company or any other employer to obtain a deduction
or as may be otherwise required by law;

     (11) to determine whether and with what effect an individual has incurred a
Termination of Employment;

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     (12) to determine the restrictions or limitations on the transfer of Common
Stock;

     (13) to determine whether an Award is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the terms of an
Agreement;

     (14) to determine the permissible methods of Award exercise and payment
within the terms and conditions of the Plan and the particular Agreement;

     (15) to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of this Plan; and

     (16) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.

     The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Agreement) and to otherwise
supervise the administration of the Plan. The Committee’s policies and
procedures may differ with respect to Awards granted at different times and may
differ with respect to a Participant from time to time, or with respect to
different Participants at the same or different times.

     Any determination made by the Committee pursuant to the provisions of the
Plan shall be made in its sole discretion, and in the case of any determination
relating to an Award may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
Participants. Any determination shall not be subject to de novo review if
challenged in court.

ARTICLE IV

SHARES SUBJECT TO PLAN

     4.1 Number of Shares. Subject to the adjustment under Section 4.5, the
total number of Common Stock reserved and available for distribution pursuant to
Awards under the Plan shall be [2,500,000] shares of Common Stock which are
hereby authorized for issuance on the Effective Date. Such shares may consist,
in whole or in part, of authorized and unissued shares or shares acquired from a
third party.

     4.2 Release of Shares. Subject to Section 4.1, the Committee shall have
full authority to determine the number of shares of Common Stock available for
Awards, and in its discretion may include (without limitation) as available for
distribution any shares of Common Stock that have ceased to be subject to an
Award; any shares of Common Stock subject to any Award that have been previously
forfeited; any shares under an Award that otherwise terminates without issuance
of Common Stock being made to a Participant; or any shares of Common Stock that
are

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received by the Company in connection with the exercise of an Award, including
the satisfaction of any tax liability or tax withholding obligation. Any shares
that are available immediately prior to the termination of the Plan, or any
shares of Common Stock returned to the Company for any reason subsequent to the
termination of the Plan, may be transferred to a successor plan.

     4.3 Restrictions on Shares. Common Stock issued upon exercise of an Award
shall be subject to the terms and conditions specified herein and to such other
terms, conditions and restrictions as the Committee in its discretion may
determine or provide in the Award Agreement. The Company shall not be required
to issue or deliver any certificates for Common Stock, cash or other property
prior to (i) the completion of any registration or qualification of such shares
under federal, state or other law, or any ruling or regulation of any government
body which the Committee determines to be necessary or advisable; and (ii) the
satisfaction of any applicable withholding obligation in order for the Company
or an Affiliate to obtain a deduction or discharge its legal obligation with
respect to the exercise of an Award. The Company may cause any certificate (or
other representation of title) for any shares of Common Stock to be delivered to
be properly marked with a legend or other notation reflecting the limitations on
transfer of such Common Stock as provided in this Plan or as the Committee may
otherwise require. The Committee may require any person exercising an Award to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the Common Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.

     4.4 Shareholder Rights. No person shall have any rights of a shareholder as
to Common Stock subject to an Award until, after proper exercise of the Award or
other action required, such shares shall have been recorded on the Company’s
official shareholder records as having been issued and transferred. Upon
exercise of the Award or any portion thereof, the Company will have a reasonable
period in which to issue and transfer the shares, and the Participant will not
be treated as a shareholder for any purpose whatsoever prior to such issuance
and transfer. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such shares are recorded as issued
and transferred in the Company’s official shareholder records, except as
provided herein or in an Agreement.

     4.5 Effect of Certain Changes. In the event of any Company share dividend,
share split, combination or exchange of shares, recapitalization or other change
in the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company shareholders other than a normal cash dividend),
reorganization, rights offering, a partial or complete liquidation, or any other
corporate transaction, Company share offering or event involving the Company and
having an effect similar to any of the foregoing, then the Committee may adjust
or substitute, as the case may be, the number of Common Stock available for
Awards under the Plan, the number of shares of Common Stock covered by
outstanding Awards, the exercise price per share of outstanding Awards, and any
other characteristics or terms of the Awards as the Committee may deem necessary
or appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated by rounding to the next lower whole number of
shares with appropriate payment for such fractional share as shall reasonably be
determined by the Committee.

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ARTICLE V

ELIGIBILITY

     5.1 Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those persons
who are common law employees of the Company or any Affiliate, non-employee
members of the Board, or other individuals selected by the Committee. Of those
persons described in the preceding sentence, the Committee may, from time to
time, select persons to be granted Awards and shall determine the terms and
conditions with respect thereto. In making any such selection and in determining
the form of the Award, the Committee shall give consideration to such factors
deemed appropriate by the Committee.

ARTICLE VI

STOCK OPTIONS

     6.1 General. The Committee shall have authority to grant Options under the
Plan at any time or from time to time. An Option shall entitle the Participant
to receive Common Stock upon exercise of such Option, subject to the
Participant’s satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements) including, without
limitation, payment of the Option Price.

     6.2 Grant. The grant of an Option shall occur as of the Grant Date
determined by the Committee. Stock Options may be granted alone or in connection
with other Awards. An Award of Options shall be evidenced by, and subject to the
terms of, an Agreement. Only a person who is a common-law employee of the
Company, any parent corporation of the Company, or a subsidiary (as such terms
are defined in Section 424 of the Code) on the date of grant shall be eligible
to be granted an Incentive Stock Option. To the extent that any Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.

     6.3 Terms and Conditions. Options shall be subject to such terms and
conditions as shall be determined by the Committee, including the following:

     (1) Exercise Price. The Exercise Price per share shall not be less than the
Fair Market Value per share as of the Grant Date. If an Option is intended to
qualify as an Incentive Stock Option, the Exercise Price per share shall be not
less than the Fair Market Value per share on the Grant Date. If an Option is
intended to qualify as an Incentive Stock Option is granted to an individual who
owns or who is deemed to own shares possessing more than ten percent (10%) of
the combined voting power of all classes of share of the Company, a corporation
which is a parent corporation of the Company, or any subsidiary of

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the Company (each as defined in Section 424 of the Code), the Exercise Price per
share shall not be less than one hundred ten percent (110%) of such Fair Market
Value per share (a “10% Owner”).

     (2) Option Period. The Option Period of each Option shall be fixed by the
Committee, provided that no Option shall be exercisable more than ten (10) years
after the date the Option is granted. In the case of an Incentive Stock Option
granted to a 10% Owner, the Option Period shall not exceed five (5) years. No
Option which is intended to be an Incentive Stock Option shall be granted more
than ten (10) years from the date the Plan is adopted by the Company or the date
the Plan is approved by the shareholders of the Company, whichever is earlier.

     (3) Exercisability. Subject to Section 10.1 and the terms set by the
Committee, Options shall be exercisable at the rate of twenty percent (20%) of
the total number of shares as of each anniversary of the Grant Date. In
addition, the Committee may at any time accelerate the exercisability of all or
part of any Option. If the Committee intends that an Option be able to qualify
as an Incentive Stock Option, the Committee may, in its discretion, provide that
the aggregate Fair Market Value (determined at the date of grant of the Option)
of the Common Stock as to which such Incentive Stock Option which is exercisable
for the first time during any calendar year shall not exceed $100,000.

     (4) Method of Exercise. Subject to the provisions of this Article VI and
the Agreement, a Participant may exercise Options, in whole or in part, during
the Option Period by giving written notice of exercise on a form provided by the
Committee to the Company specifying the number of shares of Common Stock subject
to the Option to be purchased. Such notice shall be accompanied by payment in
full of the purchase price by cash or certified check or such other form of
payment as the Company may accept. If permitted by the Committee, payment in
full or in part may also be made by (i) delivering Common Stock already owned by
the Participant having a total Fair Market Value on the date of such delivery
equal to the Option Price; (ii) the delivery of cash by a broker-dealer as a
“cashless” exercise, provided such method of payment may not be used by a
director or executive officer of the Company to the extent it would violate the
Sarbanes-Oxley Act of 2002; or (iii) any combination of the foregoing.

     (5) Non-transferability of Options. No Option shall be sold, assigned,
margined, transferred, encumbered, conveyed, gifted, alienated, hypothecated,
pledged, or otherwise disposed of, other than by will or by the laws of descent
and distribution, and all Options shall be exercisable during the Participant’s
lifetime only by the Participant.

     6.4 Termination by Reason of Death. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to death or dies within three (3) months after a termination
described in Section 6.6, any unexpired and unexercised Option held by such
Participant shall thereafter be fully exercisable for a period of one (1) year
immediately following the date of such death or until the expiration of the
Option Period, whichever period is the shorter.

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     6.5 Termination by Reason of Disability. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Employment due to a Disability, any unexpired and unexercised Option held by
such Participant shall thereafter be fully exercisable by the Participant for a
period of one (1) year immediately following the date of such Disability or
until the expiration of the Option Period, whichever period is the shorter, and
the Participant’s death at any time following such Termination of Employment due
to Disability shall not affect the foregoing.

     6.6 Other Termination. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant incurs a Termination of Employment
that is involuntary on the part of the Participant (but is not due to death,
Disability or with Cause) or is voluntary on the part of the Participant, any
Option held by such Participant shall thereupon terminate, except that such
Option, to the extent then exercisable, may be exercised for the lesser of the
ninety (90) consecutive day period commencing with the date of such Termination
of Employment or until the expiration of the Option Period whichever period is
the shorter. If the Participant incurs a Termination of Employment for Cause,
the Option shall terminate immediately. Unless otherwise provided in an
Agreement, the death or Disability of a Participant after a Termination of
Employment otherwise provided herein shall not extend the time permitted to
exercise an Option.

ARTICLE VII

STOCK APPRECIATION RIGHTS

     7.1 General. The Committee shall have authority to grant Stock Appreciation
Rights under the Plan at any time or from time to time. Stock Appreciation
Rights may be awarded either alone or in addition to other Awards granted under
the Plan. Subject to the Participant’s satisfaction in full of any conditions,
restrictions or limitations imposed in accordance with the Plan or an Agreement,
a Stock Appreciation Right shall entitle the Participant to surrender to the
Company the Stock Appreciation Right and to be paid therefore in Common Stock
the amount described in Section 7.3(2).

     7.2 Grant. The grant of a Stock Appreciation Right shall occur as of the
Grant Date determined by the Committee. A Stock Appreciation Right entitles a
Participant to receive Common Stock as described in Section 7.3(2). An Award of
Stock Appreciation Rights shall be evidenced by, and subject to the terms of an
Agreement, which shall become effective upon execution by the Participant.

     7.3 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:

     (1) Period and Exercise. The term of a Stock Appreciation Right shall be
established by the Committee. A Stock Appreciation Right shall be for such
period and shall be exercisable at such times and to the extent provided in the
Agreement. Subject to Section 10.1 and the terms set by the Committee, Stock
Appreciation Rights shall be exercisable at the rate of twenty percent (20%) as
of each anniversary of the Grant Date. In

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addition, the Committee may at any time accelerate the exercisability of all or
part of any Stock Appreciation Right. Stock Appreciation Rights shall be
exercised by the Participant’s giving written notice of exercise on a form
provided by the Committee (if available) to the Company specifying the portion
of the Stock Appreciation Right to be exercised.

     (2) Amount. Upon the exercise of a Stock Appreciation Right, a Participant
shall be entitled to receive an amount in Common Stock equal in value to the
excess of the Fair Market Value per share of Common Stock over the Exercise
Price per share of Common Stock specified in the related Agreement, multiplied
by the number of shares in respect of which the Stock Appreciation Right is
exercised The aggregate Fair Market Value per share of Common Stock shall be
determined as of the date of exercise of such Stock Appreciation Right.

     (3) Non-transferability of Stock Appreciation Rights. Except as provided in
the Plan or in an Agreement, no Stock Appreciation Rights shall be sold,
assigned, margined, transferred, encumbered, conveyed, gifted, alienated,
hypothecated, pledged or otherwise disposed of, other than by will or the laws
of descent and distribution, and all Stock Appreciation Rights shall be
exercisable during the Participant’s life time only by the Participant.

     (4) Termination. A Stock Appreciation Right shall be forfeited or
terminated at such time as an Option would be forfeited or terminated under the
Plan, unless otherwise provided in an Agreement.

ARTICLE VIII

RESTRICTED STOCK

     8.1 General. The Committee shall have authority to grant Restricted Stock
under the Plan at any time or from time to time. The Committee shall determine
the number of shares of Restricted Stock to be awarded to any Participant, the
time or times within which such Awards may be subject to forfeiture, and any
other terms and conditions of the Awards. Each Award shall be confirmed by, and
be subject to the terms of, an Agreement which shall become effective upon
execution by the Participant.

     8.2 Grant, Awards and Certificates. The grant of an Award of Restricted
Stock shall occur as of the Grant Date determined by the Committee. Restricted
Stock may be awarded either alone or in addition to other Awards granted under
the Plan. Notwithstanding the limitations on issuance of Common Stock otherwise
provided in the Plan, each Participant receiving an Award of Restricted Stock
shall be issued a certificate (or other representation of title) in respect of
such Restricted Stock. Such certificate shall be registered in the name of such
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award as determined by the
Committee. The Committee may require that the certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed and that,

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as a condition of any Award of Restricted Stock, the Participant shall have
delivered a share power, endorsed in blank, relating to the Common Stock covered
by such Award.

     8.3 Terms and Conditions. Restricted Stock shall be subject to such terms
and conditions as shall be determined by the Committee, including the following:

     (1) Limitations on Transferability. The issue prices for Restricted Stock
shall be set by the Committee and may be zero. Subject to the provisions of the
Plan and the Agreement, during a period set by the Committee, commencing with
the date of such Award (the “Restriction Period”), the Participant shall not be
permitted to sell, assign, margin, transfer, encumber, convey, gift, alienate,
hypothecate, pledge or otherwise dispose of Restricted Stock.

     (2) Rights. Except as provided in Section 8.3(1), the Participant shall
have, with respect to the Restricted Stock, all of the rights of a shareholder
of the Company holding the class of Common Stock that is the subject of the
Restricted Stock, including, if applicable, the right to vote the shares and the
right to receive any cash dividends. Unless otherwise determined by the
Committee and subject to the Plan, cash dividends on Common Stock that are the
subject of the Restricted Stock shall be automatically reinvested in additional
shares of Restricted Stock, and dividends on Common Stock that are Restricted
Stock payable in Common Stock shall be paid in the form of Restricted Stock.

     (3) Criteria. Based on service, performance by the Participant or by the
Company or the Affiliate, including any division or department for which the
Participant is employed or such other factors or criteria as the Committee may
determine, the Committee may provide for the lapse of restrictions in
installments and may accelerate the vesting of all or any part of any Award and
waive the restrictions for all or any part of such Award.

     (4) Forfeiture. Unless otherwise provided in an Agreement or determined by
the Committee, if the Participant incurs a Termination of Employment due to
death or Disability during the Restriction Period, the restrictions shall lapse
and the Participant shall be fully vested in the Restricted Stock. Except to the
extent otherwise provided in the applicable Agreement and the Plan, upon a
Participant’s Termination of Employment for any reason during the Restriction
Period other than a Termination of Employment due to death or Disability, all
shares of Restricted Stock still subject to restriction shall be forfeited by
the Participant, except the Committee shall have the discretion to waive in
whole or in part any or all remaining restrictions with respect to any or all of
such Participant’s Restricted Stock.

     (5) Delivery. If a share certificate is issued in respect of Restricted
Stock, the certificate shall be registered in the name of the Participant but
shall be held by the Company for the account of the Participant until the end of
the Restricted Period. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction Period,
unlegended certificates (or other representation of title) for such shares shall
be delivered to the Participant.

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     (6) Election. A Participant may elect to further defer receipt of the
Restricted Stock for a specified period or until a specified event, subject to
the Committee’s approval and to such terms as are determined by the Committee.
Subject to any exceptions adopted by the Committee, such election must be made
one at least (1) year prior to completion of the Restriction Period.

ARTICLE IX

PERFORMANCE UNITS

     9.1 General. The Committee shall have authority to grant Performance Units
under the Plan at any time or from time to time. A Performance Unit
(“Performance Unit”) consists of the right to receive cash upon achievement of
certain goals relating to performance (“Performance Goals”) and may be awarded
either alone or in addition to other Awards granted under the Plan. The
Committee shall have complete discretion to determine the number of Performance
Units granted to each Participant. Each Performance Unit Award shall be
evidenced by, and be subject to the terms of, an Agreement which will become
effective upon execution by the Participant. The time period during which a
Performance Unit Award shall be earned shall be the “Performance Period,” and
shall be at least one (1) fiscal year in length. Performance Units may be
subject to Performance Goals which shall be established by the Committee.

     9.2 Earning Performance Unit Awards. After the applicable Performance
Period shall have ended, the Committee shall determine the extent to which the
established Performance Goals have been achieved.

     9.3 Termination of Employment Due to Death, Disability or Retirement or at
the Request of the Company without Cause. In the event of a Termination of
Employment due to death or Disability during a Performance Period, the
Participant shall receive a pro rata share of the cash award earned with respect
to the Participant’s Performance Units relating to such Performance Period.
Unless otherwise determined by the Committee, in the event that a Participant’s
employment terminates for any other reason, all Performance Units shall be
forfeited by the Participant to the Company. Distribution of earned Performance
Units may be made at the same time payments are made to Participants who did not
incur a Termination of Employment during the applicable Performance Period.

     9.4 Nontransferability. Unless otherwise provided in an Agreement,
Performance Units may not be sold, assigned, margined, transferred, encumbered,
conveyed, gifted, alienated, hypothecated, pledged, or otherwise disposed of,
other than by will or by the laws of descent and distribution.

     9.5 Election to Defer. A Participant may elect to defer receipt of the cash
award with respect to Performance Units for a specified period or until a
specified event, subject to the Committee’s approval and to such terms are
determined by the Committee. Subject to any exceptions adopted by the Committee,
such election must be made at least one (1) year prior to completion of the
Performance Period.

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ARTICLE X

CHANGE IN CONTROL PROVISIONS

     10.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary and unless otherwise provided in an Agreement, in the event of a
Change in Control:

     (1) Any Stock Options and Stock Appreciation Rights outstanding as of the
date of such Change in Control and not then exercisable shall become fully
exercisable to the full extent of the original grant;

     (2) The restrictions applicable to any Restricted Stock Awards shall lapse,
and such Restricted Stock shall become free of all restrictions and become fully
vested and transferable to the full extent of the original grant; and

     (3) Any Performance Goal or other condition with respect to any Performance
Units shall be deemed to have been satisfied in full, and such Award shall be
fully distributable.

     10.2 Additional Discretion. The Committee shall have full discretion,
notwithstanding anything herein or in an Agreement to the contrary, with respect
to an outstanding Award upon a Change in Control to provide that the securities
of another entity be substituted hereunder for the Common Stock and to make
equitable adjustment with respect thereto.

ARTICLE XI

PROVISIONS APPLICABLE TO SHARES ACQUIRED UNDER THIS PLAN

     11.1 No Company Obligation. Except to the extent required by applicable
securities laws, none of the Company, an Affiliate or the Committee shall have
any duty or obligation to affirmatively disclose material information to a
record or beneficial holder of Common Stock or an Award, and such holder shall
have no right to be advised of any material information regarding the Company or
any Affiliate at any time prior to, upon, or in connection with receipt or the
exercise or distribution of an Award. The Company makes no representation or
warranty as to the future value of the Common Stock issued or acquired in
accordance with the provisions of the Plan.

ARTICLE XII

MISCELLANEOUS

     12.1 Amendments and Termination. The Board may amend, alter, or discontinue
the Plan at any time, but no amendment, alteration or discontinuation shall be
made which would

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impair the rights of a Participant under an Award theretofore granted without
the Participant’s consent, except such an amendment (a) made to cause the Plan
to comply with applicable law or (b) made to permit the Company or an Affiliate
a tax deduction under applicable law. The Committee may amend, alter or
discontinue the terms of any Award theretofore granted, prospectively or
retroactively, on the same conditions and limitations (and exceptions to
limitations) as apply to the Board, and further subject to any approval or
limitations the Board may impose. Notwithstanding the foregoing, any material
amendments (as determined under the rules of the New York Stock Exchange, as
amended from time to time) to the Plan shall require shareholder approval.

     12.2 Unfunded Status of Plan. It is intended that the Plan be an “unfunded”
plan for incentive compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan.

     12.3 Provisions Relating to Internal Revenue Code Section 162(m). It is the
intent of the Company that Awards granted to persons who are Covered Employees
within the meaning of Section 162(m) of the Code shall constitute “qualified
performance-based compensation” satisfying the requirements of Code
Section 162(m). Accordingly, the Plan shall be administered and the provisions
of the Plan shall be interpreted in a manner consistent with Code Section
162(m). If any provision of the Plan or any Agreement relating to such an Award
does not comply or is inconsistent with the requirements of Code Section 162(m),
such provision shall be construed or deemed amended to the extent necessary to
conform to such requirements. In addition, the following provisions shall apply
to the Plan or an Award to the extent necessary to obtain a tax deduction for
the Company or an Affiliate:

     (1) Not later than the date required or permitted for “qualified
performance-based compensation” under Code Section 162(m), the Committee shall
determine the Participants who are Covered Employees who will receive Awards
that are intended as qualified performance-based compensation and the amount or
method for determining the amount of such compensation.

     (2) During any three-consecutive calendar year period, the maximum number
of shares of Common Stock for which Options and Stock Appreciation Rights, in
the aggregate, may be granted to any Participant shall not exceed [800,000]
shares. For Performance Unit Awards that are intended to be “performance-based
compensation” (as that term is used in Code Section 162(m), no more than
[$2,000,000] may be subject to such Awards granted to any Participant during any
three-consecutive calendar year period. If, after amounts have been earned with
respect to Performance Unit Awards, the payment of such amounts is deferred, any
additional amounts attributable to earnings during the deferral period shall be
disregarded for purposes of this limit.

     (3) Performance Goals. Awards may be subject to Performance Goals (as
defined in Section 9.1) which shall be measured in a specific Performance Period
(as defined in Section 9.1) established by the Committee which shall be based on
any of the following performance criteria, either alone or in any combination,
and on either a

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consolidated or business unit level, as the Committee may determine: sales; cash
flow; cash flow from operations; operating profit or income; net income;
operating margin; net income margin; return on net assets; economic value added;
return on total assets; return on common equity; return on total capital; total
shareholder return; revenue; revenue growth; earnings before interest, taxes,
depreciation and amortization (“EBITDA”); EBITDA growth; funds from operations
per share and per share growth; cash available for distribution; cash available
for distribution per share and per share growth; share price performance on an
absolute basis and relative to an index of earnings per share or improvements in
the Company’s attainment of expense levels; and implementing or completion of
critical projects. The foregoing criteria shall have any reasonable definitions
that the Committee may specify, which may include or exclude any or all of the
following items as the Committee may specify: extraordinary, unusual or
non-recurring items; effects of accounting changes; effects of financing
activities (e.g., effect on earnings per share of issuance of convertible debt
securities); expenses for restructuring or productivity initiatives; other
non-operating items; spending for acquisitions; effects of divestitures; and
effects of litigation activities and settlements. Any such performance criterion
or combination of such criteria may apply to the Participant’s Award opportunity
in its entirety or to any designated portion or portions of the Award
opportunity, as the Committee may specify. Unless the Committee determines
otherwise for any Performance Period, extraordinary items, such as capital gains
and losses, which affect any performance criterion applicable to the Award
(including but not limited to the criterion of net income) shall be excluded or
included in determining on the extent to which the corresponding performance
goal has been achieved, whichever will produce the higher Award. In the event
applicable tax or other laws change to permit the Committee discretion to alter
the governing performance measures without obtaining shareholder approval of
such changes, the Committee shall have sole discretion to make such changes
without obtaining shareholder approval.

     (4) Earning Performance Awards. After the applicable Performance Period
shall have ended, the Committee shall certify the extent to which the
established Performance Goals have been achieved. Payment with respect to
Performance Units for Covered Employees shall be a direct function of the extent
to which the Company’s Performance Goals have been achieved. A Performance Unit
Award to a Participant who is a Covered Employee shall (unless the Committee
determines otherwise) provide that in the event of the Participant’s Termination
of Employment prior to the end of the Performance Period for any reason, such
Award will be payable only (a) if the applicable Performance Goals are achieved
and (b) to the extent, if any, as the Committee shall determine.

     (5) Other Section 162(m) Provisions. In the manner required by Section
162(m) of the Code, the Committee shall, promptly after the date on which the
necessary financial and other information for a particular Performance Period
becomes available, certify the extent to which Performance Goals have been
achieved with respect to any Performance Unit Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code. The Committee
may not increase the amount of any Performance Unit Award payable to any
Participant above the amount established in

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accordance with the relevant Performance Goals with respect to any Performance
Unit Award intended to qualify as “performance-based compensation” under Section
162(m) of the Code

     12.4 No Additional Obligation. Nothing contained in the Plan shall prevent
the Company or an Affiliate from adopting other or additional compensation or
benefit arrangements for its employees.

     12.5 Withholding. No later than the date as of which an amount first
becomes includible in the gross income of the Participant for federal income tax
purposes with respect to any Award, the Participant shall pay to the Company (or
other entity identified by the Committee), or make arrangements satisfactory to
the Company or other entity identified by the Committee regarding the payment
of, any federal, state, or local taxes of any kind required by law to be
withheld with respect to such income. Unless otherwise determined by the
Committee, withholding obligations may be settled with Common Stock, including
shares of Common Stock that are part of the Award that give rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its Affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participant. Subject to approval by the
Committee, a Participant may elect to have such tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Common Stock to be issued pursuant to any Award a number of shares
with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the required statutory minimum (but no more than such
required minimum) with respect to the Company’s withholding obligation, or
(ii) transferring to the Company shares of Common Stock owned by the Participant
with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the required statutory minimum (but no more than such
required minimum) with respect to the Company’s withholding obligation.

     12.6 Controlling Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of
Minnesota (other than its law respecting choice of law). The Plan shall be
construed to comply with all applicable law and to avoid liability to the
Company, an Affiliate or a Participant.

     12.7 Offset. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the value of
any Award to be transferred to the Participant, and no Common Stock, cash or
other thing of value under this Plan or an Agreement shall be transferred unless
and until all disputes between the Company and the Participant have been fully
and finally resolved and the Participant has waived all claims to such against
the Company or an Affiliate.

     12.8 Nontransferability; Beneficiaries. No Award shall be assignable or
transferable by the Participant, otherwise than by will or the laws of descent
and distribution or pursuant to a beneficiary designation, and Awards shall be
exercisable during the Participant’s lifetime only by the Participant (or by the
Participant’s legal representatives in the event of the Participant’s
incapacity). Each Participant may designate a Beneficiary to exercise any Option
or Stock Appreciation Right or receive any Award held by the Participant at the
time of the Participant’s

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death or to be assigned any other Award outstanding at the time of the
Participant’s death. If a deceased Participant has named no Beneficiary, any
Award held by the Participant at the time of death shall be transferred as
provided in his or her will or by the laws of descent and distribution. Except
in the case of the holder’s incapacity, only the holder may exercise an Option
or Stock Appreciation Right. The Committee may permit the transfer of an Award
by a Participant to a Participant’s children, stepchildren, grandchildren,
parents, stepparents, grandparents, spouse, siblings, in-laws and persons
related by reason of legal adoption.

     12.9 Gross-Up for Excise Tax. If all or any portion of the payments and
benefits (including any acceleration of vesting) provided under this Plan,
either alone or together with other payments and benefits which a Participant
receives or is then entitled to receive from the Company or an Affiliate, would
constitute a “parachute payment” within the meaning of Section 280G of the Code,
the Company shall pay to the Participant, within ten (10) business days of the
determination that the payment would constitute a parachute payment, a tax
“gross-up” payment to the extent necessary so that the net after-tax benefit to
the Participant shall be equal to the net after-tax benefit if the excise tax
associated with the “parachute payment” were not imposed. The “net after-tax
benefit” for these purposes shall mean the sum of (i) the total amount payable
to the Participant under the Plan, plus (ii) all other payments and benefits
which the Participant receives or is then entitled to receive from the Company
or any Affiliate that would constitute a “parachute payment” within the meaning
of Section 280G of the Code, less (iii) the amount of federal income taxes
payable with respect to the foregoing calculated at the maximum marginal income
tax rate for each year in which the foregoing shall be paid to the Participant
(based upon the rate in effect for such year as set forth in the Code at the
time of the payment), less (iv) the amount of excise taxes imposed with respect
to the payments and benefits described in (i) and (ii) above by Section 4999 of
the Code. The determination on whether or not all or any portion of the payments
and benefits provided to the Participant would constitute parachute payments
shall be made by a national certified public accounting firm selected by the
Company, and such determination shall be conclusive and binding on the
Participant.

     12.10 No Rights with Respect to Continuance of Employment. Nothing
contained herein shall be deemed to alter the relationship between the Company
or an Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a
Participant. The Company or an Affiliate and each of the Participants continue
to have the right to terminate the employment or service relationship at any
time for any reason, except as provided in a written contract. The Company or an
Affiliate shall have no obligation to retain the Participant in its employ or
service as a result of this Plan. There shall be no inference as to the length
of employment or service hereby, and the Company or an Affiliate reserves the
same rights to terminate the Participant’s employment or service as existed
prior to the individual becoming a Participant in this Plan.

     12.11 Awards in Substitution for Awards Granted by Other Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become officers, directors or employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation

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with the Company or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets of the employing corporation, or the acquisition by the
Company or Affiliate of the share of the employing corporation, as the result of
which it becomes a designated employer under the Plan. The terms and conditions
of the Awards so granted may vary from the terms and conditions set forth in
this Plan at the time of such grant as the majority of the members of the
Committee may deem appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are granted.

     12.12 Foreign Alternatives. Notwithstanding the other provisions of the
Plan, in the case of any Award to any Participant who is an employee of a
foreign subsidiary or foreign branch of the Company or held by a Participant who
is in any other category specified by the Committee, the Committee may specify
that such Award shall not be represented by Common Stock or other securities but
shall be represented by rights approximately equivalent (as determined by the
Committee) to the rights that such Participant would have received if shares of
Common Stock or other securities had been issued in the name of such Participant
otherwise in accordance with the Plan (such rights being hereinafter called
“Share Equivalents”). The Share Equivalents representing any such Award may
subsequently, at the option of the Committee, be converted into cash or an
equivalent number of shares of Common Stock or other securities under such
circumstances and in such manner as the Committee may determine.

     12.13 Delivery of Stock Certificates. To the extent the Company uses
certificates to represent shares of Common Stock, certificates to be delivered
to Participants under this Plan shall be deemed delivered for all purposes when
the Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the Participant, at the
Participant’s last known address on file with the Company. Any reference in this
Section 12.13 or elsewhere in the Plan or an Agreement to actual stock
certificates and/or the delivery of actual stock certificates shall be deemed
satisfied by the electronic record-keeping and electronic delivery of shares of
Common Stock or other mechanism then utilized by the Company and its agents for
reflecting ownership of such shares.

     12.14 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.

     12.15 Severability. If any provision of this Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not effect any other provision hereby, and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.

     12.16 Successors and Assigns. This Plan shall inure to the benefit of and
be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant’s heirs, legal representatives and
successors.

     12.17 Entire Agreement. This Plan and each Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and each Agreement, the terms
and conditions of this Plan shall control.

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