Exhibit 10.6

 

2005 Nonemployee Directors’

Restricted Stock Plan

 

Huttig Building Products, Inc.

 

Effective March 15, 2005

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Contents

 

Article 1.

  

Establishment, Purpose, and Duration

   1

Article 2.

  

Definitions

   1

Article 3.

  

Administration

   4

Article 4.

  

Shares Subject to the Plan and Maximum Awards

   4

Article 5.

  

Eligibility and Participation

   5

Article 6.

  

Restricted Stock and Restricted Stock Units

   5

Article 7.

  

Beneficiary Designation

   7

Article 8.

  

No Right of Nomination

   7

Article 9.

  

Change in Control

   7

Article 10.

  

Amendment, Modification, Suspension, and Termination

   8

Article 11.

  

Successors

   8

Article 12.

  

General Provisions

   8

Article 13.

  

Legal Construction

   9

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Huttig Building Products, Inc.

2005 Nonemployee Directors’ Restricted Stock Plan

 

Article 1. Establishment, Purpose, and Duration

 

1.1 Establishment of the Plan. Huttig Building Products, Inc., a Delaware
corporation (hereinafter referred to as the “Company”), establishes an incentive
compensation plan to be known as the Huttig Building Products, Inc. 2005
Nonemployee Directors’ Restricted Stock Plan (hereinafter referred to as the
“Plan”), as set forth in this document. The Plan permits the grant of Restricted
Stock and Restricted Stock Units. The Plan shall become effective on the date of
its approval by the Board of Directors (the “Effective Date”), subject to the
approval of the Plan by the stockholders of the Company, and shall remain in
effect as provided in Section 1.3 hereof.

 

1.2 Purpose of the Plan. The purpose of the Plan is to promote the achievement
of long-term objectives of the Company by linking the personal interests of the
Participants to those of the Company’s stockholders, and to attract and retain
Nonemployee Directors of outstanding competence.

 

1.3 Duration of the Plan. The Plan shall commence as of the Effective Date, as
described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Committee or the Board of Directors to amend or terminate the Plan
at any time pursuant to Article 10 herein, for a period of ten (10) years from
the Effective Date. After the Plan is terminated, no Awards may be granted but
Awards previously granted shall remain outstanding in accordance with their
applicable terms and conditions and the Plan’s terms and conditions.

 

Article 2. Definitions

 

Whenever used in the Plan, the following terms shall have the meaning set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized.

 

  2.1 “Affiliate” shall mean any corporation or other entity (including, but not
limited to, a partnership or a limited liability company) that is affiliated
with the Company through stock or equity ownership or otherwise, and is
designated as an Affiliate for purposes of the Plan by the Committee.

 

  2.2 “Award” means, individually or collectively, a grant under this Plan of
Restricted Stock or Restricted Stock Units, in each case subject to the terms of
the Plan

 

  2.3 “Award Agreement” means an agreement entered into by and between the
Company and a Nonemployee Director setting forth the terms and provisions
applicable to an Award, including any amendment or modification thereof, granted
under this Plan.

 

  2.4 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

 

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

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  2.6 “Change in Control” of the Company means, and shall be deemed to have
occurred upon, the first to occur of any of the following events after the
Effective Date: (a) the first purchase of shares pursuant to a tender offer or
exchange offer (other than a tender offer or exchange offer by the Company) for
all or part of the Shares or any securities convertible into such Shares, (b)
the receipt by the Company of a Schedule 13D or other advice indicating that a
person is the “beneficial owner” (as that term is defined in Rule 13d-3 under
the Exchange Act) of 20% or more of the Shares calculated as provided in
paragraph (d) of said Rule 13d-3, (c) the date of consummation of any merger,
reorganization, consolidation, share exchange, transfer of assets or other
transaction having similar effect involving the Company (“Business Transaction”)
in which the Company will not be the continuing or surviving corporation or
pursuant to which Shares would be converted into cash, securities or other
property, other than a Business Transaction in which the holders of the Shares
immediately prior to the Business Transaction would own more than 50% of the
common stock of the surviving corporation immediately after the Business
Transaction, (d) the date of consummation of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the Company, (e) the adoption of any plan or
proposal for the liquidation (but not a partial liquidation) or dissolution of
the Company, or (f) the date upon which the individuals who constitute the Board
as of the Effective Date (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to such date whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company) shall, for purposes of this Plan, be considered as
though such person were a member of the Incumbent Board.

 

  2.7 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto. For purposes of the Plan, references to
sections of the Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar provision.

 

  2.8 “Committee means the Organization and Compensation Committee of the Board
or a subcommittee thereof, or any other committee designated by the Board to
administer this Plan. The members of the Committee shall be appointed from time
to time by and shall serve at the discretion of the Board. If the Committee does
not exist or cannot function for any reason, the Board may take any action under
the Plan that would otherwise be the responsibility of the Committee.

 

  2.9 “Company” means Huttig Building Products, Inc., a Delaware corporation,
and any successor thereto as provided in Article 11 herein.

 

  2.10 “Director” means any individual who is a member of the Board of Directors
of the Company.

 

  2.11 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.

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  2.12 “Fair Market Value” or “FMV” means a price that is based on the opening,
closing, actual, high, low, or average selling prices of a Share reported on the
New York Stock Exchange (“NYSE”) or other established stock exchange (or
exchanges) on the applicable date, the preceding trading day, the next
succeeding trading day, or an average of trading days, as determined by the
Committee in its discretion. Unless the Committee determines otherwise, if the
Shares are traded over the counter at the time a determination of its Fair
Market Value is required to be made hereunder, its Fair Market Value shall be
deemed to be equal to the average between the reported high and low, closing bid
and asked, or opening and closing prices of a Share on the most recent date on
which Shares were publicly traded. In the event Shares are not publicly
determined at the time a determination of their value is required to be made
hereunder, the determination of their Fair Market Value shall be made by the
Committee in such manner as it deems appropriate. Such definition(s) of FMV
shall be specified in each Award Agreement and may differ depending on whether
FMV is in reference to the grant, exercise, vesting, settlement, or payout of an
Award.

 

  2.13 “Insider” shall mean an individual who is, on the relevant date, an
officer, or Director of the Company, or a more than ten percent (10%) Beneficial
Owner of any class of the Company’s equity securities that is registered
pursuant to Section 12 of the Exchange Act, as determined by the Board in
accordance with Section 16 of the Exchange Act.

 

  2.14 “Nonemployee Director” means a Director who is not an employee of the
Company.

 

  2.15 “Participant” means a Nonemployee Director who has been selected to
receive an Award or who has an outstanding Award granted under the Plan.

 

  2.16 “Period of Restriction” means the period when Awards are subject to a
substantial risk of forfeiture based on the passage of time and/or upon the
occurrence of other events as determined by the Committee, in its discretion, as
provided in Article 6.

 

  2.17 “Person” shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” as provided in Section 13(d) thereof.

 

  2.18 “Plan” means the Huttig Building Products, Inc. 2005 Nonemployee
Directors’ Restricted Stock Plan, as it maybe amended from time to time.

 

  2.19 “Plan Year” means the calendar year.

 

  2.20 “Restricted Stock” means an Award granted to a Participant pursuant to
Article 6.

 

  2.21 “Restricted Stock Unit” means an Award granted to a Participant pursuant
to Article 6, except no Shares are actually awarded to the Participant on the
date of grant.

 

  2.22 “Share” means a share of common stock of the Company, $.01 par value per
share.

 

  2.23 “Subsidiary” means any corporation or other entity, whether domestic or
foreign, in which the Company has or obtains, directly or indirectly, a
proprietary interest of more than fifty percent (50%) by reason of stock
ownership or otherwise.

 

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Article 3. Administration

 

3.1 General. The Committee shall be responsible for administering the Plan,
subject to this Article 3 and the other provisions of the Plan. The Committee
may employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an Employee, and the Committee, the Company, and its officers
and Directors shall be entitled to rely upon the advice, opinions, or valuations
of any such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.

 

3.2 Authority of the Committee. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of the Plan and any
Award Agreement or other agreement or document ancillary to or in connection
with the Plan, to determine eligibility for Awards and to adopt such rules,
regulations, and guidelines for administering the Plan as the Committee may deem
necessary or proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and conditions,
including the terms and conditions set forth in Award Agreements, and, subject
to Article 10, adopting modifications and amendments to the Plan or any Award
Agreement, including without limitation, any that are necessary to comply with
the laws of the countries and other jurisdictions in which the Company, its
Affiliates, and/or its Subsidiaries operate.

 

3.3 Delegation. To the extent permitted under applicable law, the Committee may
delegate to one or more of its members or to one or more officers of the Company
and/or its Subsidiaries and Affiliates, or to one or more agents or advisors
such administrative duties or powers as it may deem advisable, and the Committee
or any person to whom it has delegated duties or powers as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan.

 

Article 4. Shares Subject to the Plan and Maximum Awards

 

4.1 Number of Shares Available for Awards. Subject to adjustment as provided in
Section 4.2 herein, the maximum number of Shares hereby reserved for issuance to
Participants under the Plan on or after the Effective Date (the “Share
Authorization”) shall be seventy-five thousand (75,000) Shares. Any Shares
related to Awards which terminate by forfeiture, cancellation, or otherwise
without the issuance of such Shares, are settled in cash in lieu of Shares, or
are exchanged with the Committee’s permission for Awards not involving Shares,
shall be available again for grant under the Plan. The maximum number of Shares
available for issuance under the Plan shall not be reduced to reflect any
dividends or dividend equivalents that are reinvested into additional Shares or
credited as additional Restricted Stock or Restricted Stock Units. In addition,
the Committee, in its discretion, may establish any other appropriate
methodology for calculating the number of Shares issued pursuant to the Plan.
The Shares available for issuance under the Plan may be authorized and unissued
Shares or treasury Shares.

 

4.2 Adjustments in Authorized Shares. In the event of any corporate event or
transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, stock split,
reverse stock split, split up, spin-off, or other distribution of stock or
property of the Company, combination of securities, exchange of securities,
dividend in kind, or other like change in capital structure or distribution
(other than normal cash dividends) to stockholders of the

 

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Company, or any similar corporate event or transaction, the Committee, in its
sole discretion, in order to prevent dilution or enlargement of Participants’
rights under the Plan, shall substitute or adjust, in an equitable manner, as
applicable, the number and kind of Shares that may be issued under the Plan, the
number and kind of Shares subject to outstanding Awards, and other value
determinations applicable to outstanding Awards.

 

Appropriate adjustments may also be made by the Committee in the terms of any
Awards under the Plan to reflect or related to such changes or distributions and
to modify any other terms of outstanding Awards on an equitable basis. The
determination of the Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on Participants under the Plan.

 

Subject to the provisions of Article 9 and any applicable law or regulatory
requirement, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance, assumption, substitution,
or conversion of Awards under this Plan in connection with any merger,
consolidation, acquisition of property or stock, or reorganization, upon such
terms and conditions as it may deem appropriate.

 

Article 5. Eligibility and Participation

 

5.1 Eligibility. Individuals eligible to participate in the Plan are limited to
Nonemployee Directors who are serving on the Board on the date of each scheduled
grant under the Plan.

 

5.2 Actual Participation. Subject to the provisions of the Plan, the Committee
may, from time to time, select from all eligible individuals, those individuals
to whom Awards shall be granted and shall determine, in its sole discretion, the
nature of any and all terms permissible by law, and the amount of each Award.

 

Article 6. Restricted Stock and Restricted Stock Units

 

6.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms
and provisions of the Plan, the Committee, at any time and from time to time,
may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts as the Committee shall determine. Restricted Stock
Units shall be similar to Restricted Stock except that no Shares are actually
issued to the Participant on the date of grant. Restricted Stock Units represent
the right to receive Shares in the future subject to the achievement of one or
more goals relating to the completion of service by the Participant and/or the
achievement of performance or other objectives.

 

6.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock
and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement that
shall specify the Period(s) of Restriction, the number of Shares of Restricted
Stock or the number of Restricted Stock Units granted, and such other provisions
as the Committee shall determine.

 

6.3 Transferability. Except as provided in this Article 6, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction established by the Committee and
specified in the Award Agreement (and in the case of Restricted Stock Units,
until the date of delivery or other payment), or upon earlier satisfaction of
any other conditions, as specified by the Committee, in its sole discretion, and
set forth in the Award Agreement. All rights with respect to the Restricted
Stock and/or Restricted Stock Units granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant.

 

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6.4 Other Restrictions. The Committee shall impose such other conditions and/or
restrictions on any Shares of Restricted Stock or Restricted Stock Units granted
pursuant to the Plan as it may deem advisable, including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, time-based restrictions, and/or
restrictions under applicable laws or under the requirements of any stock
exchange or market upon which such Shares are listed or traded, or holding
requirements or sale restrictions placed on the Shares by the Company upon
vesting of such Restricted Stock or Restricted Stock Units.

 

To the extent deemed appropriate by the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company’s possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied or lapse.

 

Except as otherwise provided in this Article 6, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have
been satisfied or lapse, and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion, shall determine.

 

6.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Section 6.4, each certificate representing Shares of Restricted
Stock granted pursuant to the Plan may bear a legend such as the following or as
otherwise determined by the Committee in its sole discretion:

 

The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Huttig Building
Products, Inc. 2005 Nonemployee Directors’ Restricted Stock Plan and in the
associated Restricted Stock Award Agreement. A copy of the Plan and such
Restricted Stock Award Agreement may be obtained from Huttig Building Products,
Inc.

 

6.6 Voting Rights. Unless otherwise determined by the Committee and set forth in
a Participant’s Award Agreement, to the extent permitted or required by law, as
determined by the Committee, Participants holding Shares of Restricted Stock
granted hereunder may be granted the right to exercise full voting rights with
respect to those Shares during the Period of Restriction. A Participant shall
have no voting rights with respect to any Restricted Stock Units granted
hereunder.

 

6.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock or Restricted Stock Units
granted hereunder may, if the Committee so determines, be credited with
dividends paid with respect to the underlying Shares or dividend equivalents
while they are so held in a manner determined by the Committee, in its sole
discretion. The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The Committee, in its
sole discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, Shares, Restricted Stock, or Restricted Stock
Units.

 

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6.8 Termination of Directorship. Unless otherwise designated by the Committee,
all unvested Shares of Restricted Stock or Restricted Stock Units will be
forfeited upon termination of service from the Board for any reason.

 

6.9 Section 83(b) Election. The Committee may provide in an Award Agreement that
the Award of Restricted Stock is conditioned upon the Participant making or
refraining from making an election with respect to the Award under Section 83(b)
of the Code. If a Participant makes an election pursuant to Section 83(b) of the
Code concerning a Restricted Stock Award, the Participant shall be required to
file promptly a copy of such election with the Company.

 

Article 7. Beneficiary Designation

 

Each Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid or exercised by the
Participant’s executor, administrator, or legal representative.

 

Article 8. No Right of Nomination

 

8.1 Nomination. Nothing in the Plan shall be deemed to create any obligation on
the part of the Board to nominate any Director for reelection by the Company’s
stockholders.

 

8.2 Participation. No Participant shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award.

 

8.3 Rights as a Stockholder. Except as otherwise provided herein, a Participant
shall have none of the rights of a stockholder with respect to Shares covered by
any Award until the Participant becomes the record holder of such Shares.

 

Article 9. Change in Control

 

Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article 9 shall apply in the event of a Change in Control, unless
otherwise specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national securities
exchanges, or unless otherwise determined by the Committee in connection with
the grant of an Award as reflected in the applicable Award Agreement.

 

Upon a Change in Control, any Period of Restriction for Restricted Stock and
Restricted Stock Units granted hereunder that have not previously vested shall
end, and such Restricted Stock and Restricted Stock Units shall become fully
vested. Subject to Article 10, herein, the Committee shall have the authority to
make any modifications to the Awards as determined by the Committee to be
appropriate before the effective date of the Change in Control.

 

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Article 10. Amendment, Modification, Suspension, and Termination

 

10.1 Amendment, Modification, Suspension, and Termination. Subject to Section
10.3, the Committee or Board may, at any time and from time to time, alter,
amend, modify, suspend, or terminate the Plan and any Award Agreement in whole
or in part. No amendment of the Plan shall be made without stockholder approval
if stockholder approval is required by law, regulation, or stock exchange rule,
including, but not limited to, the Securities Exchange Act of 1934, as amended,
the Internal Revenue Code of 1986, as amended, and if applicable, the New York
Stock Exchange Listed Company Manual.

 

10.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee may make adjustments in the terms and conditions of, and
the criteria included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in Section 4.2
hereof) affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
unintended dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. The determination of the Committee
as to the foregoing adjustments, if any, shall be conclusive and binding on
Participants under the Plan.

 

10.3 Awards Previously Granted. Notwithstanding any other provision of the Plan
to the contrary (other than Section 10.4), no termination, amendment,
suspension, or modification of the Plan or an Award Agreement shall adversely
affect in any material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award.

 

10.4 Amendment to Conform to Law. Notwithstanding any other provision of the
Plan to the contrary, the Board of Directors may amend the Plan or an Award
Agreement, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or an Award Agreement to any
present or future law relating to plans of this or a similar nature (including,
but not limited to, Code Section 409A), and to the administrative regulations
and rulings promulgated thereunder.

 

Article 11. Successors

 

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

 

Article 12. General Provisions

 

12.1 Forfeiture Events. The Committee may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting conditions of an Award. Such events shall include, but shall not be
limited to, violation of material Company policies, or other conduct by the
Participant that is detrimental to the business or reputation of the Company
and/or its Subsidiaries and Affiliates.

 

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12.2 Legend. The certificates for Shares may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.

 

12.3 Delivery of Title. The Company shall have no obligation to issue or deliver
evidence of title for Shares issued under the Plan prior to:

 

(a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and

 

(b) Completion of any registration or other qualification of the Shares under
any applicable national or foreign law or ruling of any governmental body that
the Company determines to be necessary or advisable.

 

12.4 Investment Representations. The Committee may require each Participant
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the Participant is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.

 

12.5 Uncertificated Shares. To the extent that the Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of such Shares may
be effected on a noncertificated basis, to the extent not prohibited by
applicable law or the rules of any stock exchange.

 

12.6 Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company and/or its Subsidiaries
and/or its Affiliates may make to aid it in meeting its obligations under the
Plan. Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and/or its Subsidiaries and/or its
Affiliates and any Participant, beneficiary, legal representative, or any other
individual. To the extent that any person acquires a right to receive payments
from the Company and/or its Subsidiaries and/or its Affiliates under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general
funds of the Company, a Subsidiary, or an Affiliate, and no special or separate
fund shall be established and no segregation of assets shall be made to assure
payment of such amounts except as expressly set forth in the Plan.

 

12.7 No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash,
Awards, or other property shall be issued or paid in lieu of fractional Shares,
or whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.

 

Article 13. Legal Construction

 

13.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

 

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13.2 Severability. In the event 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.

 

13.3 Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

 

13.4 Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

 

13.5 Securities Law Compliance. The Company may use reasonable endeavors to
register Shares allotted pursuant to the exercise of an Award with the United
States Securities and Exchange Commission or to effect compliance with the
registration, qualification, and listing requirements of any national or foreign
securities laws, stock exchange, or automated quotation system. With respect to
Insiders, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void to the extent permitted by law and
deemed advisable by the Committee.

 

13.6 No Deferred Compensation. No deferral of compensation (as defined under
Code Section 409A or guidance thereto) shall be permitted under this Plan.
However, the Committee may permit deferrals of compensation pursuant to a
separate plan or a subplan which meets the requirements of Code Section 409A and
the regulations thereunder. Additionally, to the extent any Award is subject to
Code Section 409A, notwithstanding any provision herein to the contrary, the
Plan does not permit the acceleration of the time or schedule of any
distribution related to such Award, except as permitted by Code Section 409A,
the regulations thereunder, and/or the Secretary of the United States Treasury.

 

13.7 Nonexclusivity of this Plan. The adoption of this Plan shall not be
construed as creating any limitations on the power of the Board or Committee to
adopt such other compensation arrangements as it may deem desirable for any
Participant.

 

13.8 No Constraint on Corporate Action. Nothing in this Plan shall be construed
to: (i) limit, impair, or otherwise affect the Company’s or a Subsidiary’s or an
Affiliate’s right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets; or, (ii) limit the right or power of the Company or a
Subsidiary or an Affiliate to take any action which such entity deems to be
necessary or appropriate.

 

13.9 Governing Law. The Plan and each Award Agreement shall be governed by the
laws of the state of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction. Unless otherwise provided in the
Award Agreement, recipients of an Award under the Plan are deemed to submit to
the exclusive jurisdiction and venue of the federal or state courts of Delaware,
to resolve any and all issues that may arise out of or relate to the Plan or any
related Award Agreement.

 

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13.10 Indemnification. Subject to requirements of Delaware law, each individual
who is or shall have been a member of the Board, or a Committee appointed by the
Board, or an officer of the Company to whom authority was delegated in
accordance with Article 3, shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he or she may
be involved by reason of any action taken or failure to act under this Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Company’s approval, or paid by him in satisfaction of any judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf, unless such loss, cost,
liability, or expense is a result of his own willful misconduct or except as
expressly provided by statute.

 

The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such individuals may be entitled under the
Company’s Certificate of Incorporation of Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

 

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