Exhibit 10.21

 

 

 

 

 

 

MARTEN TRANSPORT, LTD.

2015 EQUITY INCENTIVE PLAN

 

 

 

 

 

 
 

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Table of Contents 

 

 

    Page            

1.

Purpose of Plan

1 2. Definitions 1 3. Plan Administration 6 4. Shares Available for Issuance 7
5. Participation 9 6. Options 10 7. Stock Appreciation Rights 12 8. Restricted
Stock Awards and Restricted Stock Units 13 9. Performance Awards 14 10. Stock
Bonuses 15 11. Other Stock-Based Awards 15 12. Dividend Equivalents 16 13.
Performance Measures 16 14. Effect of Termination of Employment or Other Service
19 15. Payment of Withholding Taxes 22 16. Change in Control 23 17. Rights of
Eligible Recipients and Participants; Transferability 25 18. Securities Law and
Other Restrictions 26 19. Deferred Compensation; Compliance with Section 409A 26
20. Amendment, Modification and Termination 27 21. Effective Date and Duration
of the Plan  28 22. Miscellaneous 28

 

 
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MARTEN TRANSPORT, LTD.

2015 EQUITY INCENTIVE PLAN

 

 

1.     Purpose of Plan.

 

The purpose of the Marten Transport, Ltd. 2015 Equity Incentive Plan (this
“Plan”) is to advance the interests of Marten Transport, Ltd. (the “Company”)
and its stockholders by enabling the Company and its Subsidiaries to attract and
retain qualified individuals to perform services for the Company and its
Subsidiaries, providing incentive compensation for such individuals that is
linked to the growth and profitability of the Company and increases in
stockholder value, and aligning the interests of such individuals with the
interests of its stockholder through opportunities for equity participation in
the Company.

 

2.     Definitions.

 

The following terms will have the meanings set forth below, unless the context
clearly otherwise requires. Terms defined elsewhere in the Plan will have the
same meaning throughout the Plan.

 

2.1     “Annual Award Limit” or “Annual Awards Limits” have the meaning set
forth in Section 4.3.

 

2.2     “Board” means the Board of Directors of the Company.

 

2.3     “Broker Exercise Notice” means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares of Common Stock or loan a
sufficient amount of money to pay all or a portion of the exercise price of the
Option and/or any related withholding tax obligations and remit such sums to the
Company and directs the Company to deliver shares of Common Stock to be issued
upon such exercise directly to such broker or dealer or their nominee.

 

2.4     “Cause” means “cause” as defined in any employment or other agreement or
policy applicable to the Participant, or if no such agreement or policy exists,
will mean (a) dishonesty, fraud, misrepresentation, embezzlement or deliberate
injury or attempted injury, in each case related to the Company or any
Subsidiary, (b) any unlawful or criminal activity of a serious nature, (c) any
intentional and deliberate breach of a duty or duties that, individually or in
the aggregate, are material in relation to the Participant’s overall duties, (d)
any material breach by a Participant of any employment, service, consulting,
confidentiality, assignment of inventions, non-compete or non-solicitation
agreement entered into with the Company or any Subsidiary, or any action by a
Participant that the Committee, in its sole discretion, determines to be
injurious, detrimental, prejudicial or adverse to the interests of the Company
or any Subsidiary, including: (i) disclosing confidential information of the
Company or any Subsidiary to any person not authorized by the Company or
Subsidiary to receive it, (ii) engaging, directly or indirectly, in any
commercial activity that in the judgment of the Committee competes with the
business of the Company or any Subsidiary or (iii) interfering with the
relationships of the Company or any Subsidiary and their respective employees,
independent contractors, customers, prospective customers and vendors.

 

2.5     “Change in Control” means an event described in Section 16.1 of the
Plan; provided, however, if payment under an Incentive Award that is subject to
Section 409A of the Code is triggered by a Change in Control, the term Change in
Control will mean a change in the ownership or effective control of the Company,
or in the ownership of a substantial portion of the assets of the Company, as
such term is defined in Section 409A of the Code.

 

 
 

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2.6     “Code” means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code in the Plan will be deemed to include a
reference to any applicable rules and regulations thereunder and any successor
or amended section of the Code.

 

2.7     “Committee” means the group of individuals administering the Plan, as
provided in Section 3 of the Plan.

 

2.8     “Common Stock” means the common stock of the Company, par value $0.01
per share, or the number and kind of shares of stock or other securities into
which such Common Stock may be changed in accordance with Section 4.3 of the
Plan.

 

2.9     “Company” means Marten Transport, Ltd., a Delaware corporation, and any
successor thereto as provided in Section 22.6 of the Plan.

 

2.10     “Covered Employee” means any Employee who is or may become a “Covered
Employee,” as defined in Section 162(m) of the Code, and who is designated,
either as an individual Employee or class of Employees, by the Committee within
the shorter of: (a) ninety (90) days after the beginning of any Performance
Period, or (b) twenty-five percent (25%) of any Performance Period has elapsed,
as a “Covered Employee” under this Plan for such applicable Performance Period.

 

2.11     “Consultant” means a person engaged to provide consulting or advisory
services (other than as an Employee or a Director) to the Company or any
Subsidiary that: (a) are not in connection with the offer and sale of the
Company’s securities in a capital raising transaction and (b) do not directly or
indirectly promote or maintain a market for the Company’s securities.

 

2.12     “Director” means a member of the Board.

 

2.13     “Disability” means the disability of the Participant such as would
entitle the Participant to receive disability income benefits pursuant to the
long-term disability plan of the Company or Subsidiary then covering the
Participant or, if no such plan exists or is applicable to the Participant, the
permanent and total disability of the Participant within the meaning of Section
22(e)(3) of the Code; provided, however, that if distribution of an Incentive
Award subject to Section 409A of the Code is triggered by an Eligible
Recipient’s Disability, such term will mean that the Eligible Recipient is
disabled as defined by Section 409A of the Code and the regulations and rulings
issued thereunder.

 

2.14      “Effective Date” means May 12, 2015 or such later date as the Plan is
initially approved by the Company’s stockholders.

 

2.15     “Eligible Recipients” means (a) for the purposes of granting Incentive
Stock Options, all Employees and (b) for the purposes of granting Non-Statutory
Stock Options and other Incentive Awards, means all Employees, Directors and
Consultants.

 

 
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2.16     “Employee” means any individual performing services for the Company or
a Subsidiary and designated as an employee of the Company or a Subsidiary on the
payroll records thereof. An Employee will not include any individual during any
period he or she is classified or treated by the Company or Subsidiary as an
independent contractor, a consultant, or any employee of an employment,
consulting or temporary agency or any other entity other than the Company or
Subsidiary, without regard to whether such individual is subsequently determined
to have been, or is subsequently retroactively reclassified as a common-law
employee of the Company or Subsidiary during such period. An individual will not
cease to be an Employee in the case of: (a) any leave of absence approved by the
Company, or (b) transfers between locations of the Company or between the
Company or any Subsidiaries. For purposes of Incentive Stock Options, no such
leave may exceed ninety (90) days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company or a Subsidiary, as applicable, is not
so guaranteed, then three (3) months following the ninety-first (91st) day of
such leave, any Incentive Stock Option held by a Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax purposes as a
Non-Statutory Stock Option. Neither service as a Director nor payment of a
Director’s fee by the Company will be sufficient to constitute “employment” by
the Company.

 

2.17     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
Any reference to a section of the Exchange Act in the Plan will be deemed to
include a reference to any applicable rules and regulations thereunder and any
successor or amended section of the Exchange Act.

 

2.18     “Fair Market Value” means, with respect to the Common Stock, as of any
date: (a) the closing sale price of the Common Stock as of such date at the end
of the regular trading session, as reported by The NASDAQ Stock Market, The New
York Stock Exchange, The American Stock Exchange or any national securities
exchange on which the Common Stock is then listed (or, if no shares were traded
on such date, as of the next preceding date on which there was such a trade); or
(b) if the Common Stock is not so listed, admitted to unlisted trading
privileges, or reported on any national securities exchange, the closing sale
price as of such date at the end of the regular trading session, as reported by
OTC Bulletin Board or the OTC Markets Group Inc. or other comparable service
(or, if no shares were traded or quoted on such date, as of the next preceding
date on which there was such a trade or quote); or (c) if the Common Stock is
not so listed or reported, such price as the Committee determines in good faith,
in the exercise of its reasonable discretion, and consistent with the definition
of “fair market value” under Section 409A of the Code and in conformity with
generally accepted accounting principles in the United States. If determined by
the Committee, such determination will be final, conclusive and binding for all
purposes and on all persons, including the Company, the stockholders of the
Company, the Participants and their respective heirs and other
successors-in-interest. No member of the Committee will be liable for any
determination regarding the fair market value of the Common Stock that is made
in good faith.

 

2.19     “Full Value Award” means an Incentive Award other than in the form of
an Option or Stock Appreciation Right, and which is settled by the issuance of
shares of Common Stock.

 

2.20     “Grant Date” means the date an Incentive Award is granted to a
Participant pursuant to the Plan and as determined pursuant to Section 5 of the
Plan.

 

2.21     “Incentive Award” means an Option, Stock Appreciation Right, Restricted
Stock Award, Restricted Stock Unit, Performance Award, Stock Bonus or Other
Stock-Based Award granted to an Eligible Recipient pursuant to the Plan.

 

2.22     “Incentive Award Agreement” means either: (a) a written or electronic
(as provided in Section 21.8) agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Incentive
Award granted under the Plan, including any amendment or modification thereof,
or (b) a written or electronic (as provided in Section 22.8) statement issued by
the Company to a Participant describing the terms and provisions of such an
Incentive Award, including any amendment or modification thereof. The Committee
may provide for the use of electronic, internet or other non-paper Incentive
Award Agreements, and the use of electronic, internet or other non-paper means
for the acceptance thereof and actions thereunder by a Participant.

 

 
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2.23     “Incentive Stock Option” means a right to purchase shares of Common
Stock granted to an Employee pursuant to Section 6 of the Plan that is
designated as and intended to meet the requirements of an “incentive stock
option” within the meaning of Section 422 of the Code.

 

2.24     “Non-Statutory Stock Option” means a right to purchase shares of Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that is
not intended to meet the requirements of or does not qualify as an Incentive
Stock Option.

 

2.25     “Option” means an Incentive Stock Option or a Non-Statutory Stock
Option.

 

2.26     “Other Stock-Based Award” means an equity-based or equity-related
Incentive Award not otherwise described by the terms of the Plan, granted
pursuant to Section 11 of the Plan.

 

2.27     “Participant” means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.

 

2.28     “Performance Award” means a right granted to an Eligible Recipient
pursuant to Section 9 of the Plan to receive an amount of cash, a number of
shares of Common Stock, or a combination of both, contingent upon and the value
of which at the time it is payable is determined as a function of the extent of
the achievement of specified performance objectives during a specified period. A
Performance Award is also commonly referred to as a “performance unit” or
“performance share.”

 

2.29     “Performance-Based Compensation” means compensation under an Incentive
Award that is intended to satisfy the requirements of Section 162(m) of the Code
for certain performance-based compensation paid to Covered Employees.
Notwithstanding the foregoing, nothing in this Plan will be construed to mean
that an Incentive Award which does not satisfy the requirements for
performance-based compensation under Section 162(m) of the Code does not
constitute performance-based compensation for other purposes, including Section
409A of the Code.

 

2.30     “Performance Goals” mean with respect to any applicable Incentive
Award, one or more targets, goals or levels of attainment required to be
achieved in terms of the specified Performance Measures during the specified
Performance Period, as set forth in the related Incentive Award Agreement.

 

2.31     “Performance Measure Element” has the meaning set forth in Section 13.1
of this Plan.

 

2.32     “Performance Measures” mean: (a) with respect to any Incentive Award
intended to qualify as Performance-Based Compensation, any one or more of the
measures described in Section 13.1 of this Plan on which the Performance Goals
are based and which measures are approved by the Company’s stockholders pursuant
to this Plan in order to qualify Incentive Awards as Performance-Based
Compensation; and (b) with respect to any other Incentive Award, any performance
measures as determined by the Committee in its sole discretion and set forth in
the applicable Incentive Award Agreement for purposes of determining the
applicable Performance Goal.

 

2.33     “Performance Period” means the period of time, as determined by the
Committee, during which the Performance Goals must be met in order to determine
the degree of payout or vesting with respect to an Incentive Award.

 

2.34     “Previously Acquired Shares” means shares of Common Stock that are
already owned by the Participant or, with respect to any Incentive Award, that
are to be issued to the Participant upon the grant, exercise, vesting or
settlement of such Incentive Award.

 

 
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2.35     “Restricted Stock Award” means an award of shares of Common Stock
granted to an Eligible Recipient pursuant to Section 8 of the Plan that is
subject to restrictions on transferability and a risk of forfeiture.

 

2.36     “Restricted Stock Unit” means an award denominated in shares of Common
Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan to
receive an amount of cash, a number of shares of Common Stock, or a combination
of both, contingent upon the achievement of specified performance objectives or
that the Participant remain in the continuous employment or service with the
Company for a certain period or other conditions.

 

2.37     “Retirement” means unless otherwise defined in the Incentive Award
Agreement or in a written employment, services or other agreement between the
Participant and the Company or a Subsidiary, means “Retirement” as defined from
time to time for purposes of the Plan by the Committee or by the Company’s chief
human resources officer or other person performing that function or, if not so
defined, means voluntary termination of employment or service by the Participant
on or after the date the Participant reaches age fifty-five (55) with the
present intention to leave the Company’s industry or to leave the general
workforce and completion of at least ten (10) years of continuous service with
the Company or a Subsidiary.

 

2.38     “Securities Act” means the Securities Act of 1933, as amended. Any
reference to a section of the Securities Act in the Plan will be deemed to
include a reference to any applicable rules and regulations thereunder and any
successor or amended section of the Securities Act.

 

2.39     “Stock Appreciation Right” means a right granted to an Eligible
Recipient pursuant to Section 7 of the Plan to receive a payment from the
Company, in the form of shares of Common Stock, cash or a combination of both,
equal to the difference between the Fair Market Value of one or more shares of
Common Stock and a specified exercise price of such shares.

 

2.40     “Stock Bonus” means an award of shares of Common Stock granted to an
Eligible Recipient pursuant to Section 10 of the Plan.

 

2.41     “Subsidiary” means any entity that is directly or indirectly controlled
by the Company or any entity in which the Company has a significant equity
interest, as determined by the Committee, provided the Company has a
“controlling interest” in the Subsidiary as defined in Treas. Reg. Sec.
1.409A-1(b)(5)(iii)(E)(1).

 

2.42     “Tax Date” means the date any withholding tax obligation arises under
the Code for a Participant with respect to an Incentive Award.

 

 
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3.     Plan Administration.

 

3.1     The Committee. The Plan will be administered by the Board or by a
committee of the Board. So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are “non-employee directors” within the meaning of Rule 16b-3 under the
Exchange Act, who are “independent directors” as required by the Listing Rules
of The NASDAQ Stock Market (or other applicable exchange or market on which the
Company’s Common Stock may be traded or quoted), and who are “outside directors”
within the meaning of Section 162(m) of the Code. Such a committee, if
established, will act by majority approval of the members (but may also take
action by the written consent of all of the members of such committee), and a
majority of the members of such a committee will constitute a quorum. As used in
the Plan, “Committee” will refer to the Board or to such a committee, if
established.

 

3.2     Authority of the Committee. In accordance with and subject to the
provisions of the Plan, the Committee will have the authority to determine all
provisions of Incentive Awards as the Committee may deem necessary or desirable
and as consistent with the terms of the Plan, including the following: (a) the
Eligible Recipients to be selected as Participants; (b) the nature and extent of
the Incentive Awards to be made to each Participant (including the number of
shares of Common Stock to be subject to each Incentive Award, any exercise
price, the manner in which Incentive Awards will vest or become exercisable and
whether Incentive Awards will be granted in tandem with other Incentive Awards)
and the form of Incentive Award Agreement; (c) the time or times when Incentive
Awards will be granted; (d) the duration of each Incentive Award; and (e) the
restrictions and other conditions to which the payment or vesting of Incentive
Awards may be subject. In addition, the Committee will have the authority to:
(i) interpret, administer, reconcile any inconsistency in, correct any defect in
and/or supply any omission in the Plan and any instrument or agreement relating
to, or Incentive Award granted under, the Plan; (ii) establish, amend, suspend
or waive any rules and regulations and appoint such agents as the Committee may
deem appropriate for the proper administration of the Plan; and (iii) make any
other determination and take any other action that the Committee may deem
necessary or desirable for the administration of the Plan. In addition, the
Committee will have the authority under the Plan in its sole discretion to pay
the economic value of any Incentive Award in the form of cash, Common Stock or
any combination of both. The Committee may exercise its duties, power and
authority under the Plan in its sole discretion without the consent of any
Participant or other party, unless the Plan specifically provides otherwise. The
Committee will not be obligated to treat Participants or Eligible Recipients
uniformly, and determinations made under the Plan may be made by the Committee
selectively among Participants or Eligible Recipients, whether or not such
Participants and Eligible Recipients are similarly situated. Each determination,
interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan will be final, conclusive and binding for all purposes
and on all persons, and no member of the Committee will be liable for any action
or determination made in good faith with respect to the Plan or any Incentive
Award granted under the Plan.

 

3.3     Delegation. Except to the extent prohibited by applicable law or the
applicable rules and regulations of any securities exchange or inter-dealer
quotation system on which the securities of the Company are listed or traded,
the Committee may allocate all or any portion of its responsibilities and powers
to any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at any time. Without
limiting the generality of the foregoing and to the extent consistent with the
applicable corporate law of the Company’s jurisdiction of incorporation, the
Committee may, by resolution, authorize one or more Directors or one or more
officers of the Company to do one or both of the following on the same basis as
can the Committee: (a) designate Eligible Recipients to be recipients of
Incentive Awards pursuant to the Plan; and (b) determine the size of any such
Incentive Awards; provided, however, that (x) the Committee will not delegate
such responsibilities to any such Director(s) or officer(s) for any Incentive
Awards granted to an Eligible Recipient who is subject to the reporting and
liability provisions of Section 16 under the Exchange Act or whose compensation
in the Company’s fiscal year in which the Incentive Award is expected to be
deductible may be subject to the limits on deductible compensation pursuant to
Section 162(m) of the Code; (y) the resolution providing such authorization will
set forth the type of Incentive Awards and total number of each type of
Incentive Awards such Director(s) or officer(s) may grant; and (z) such
Director(s) or officer(s) will report periodically to the Committee regarding
the nature and scope of the Incentive Awards granted pursuant to the authority
delegated.

 

 
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3.4     No Re-Pricing. Notwithstanding any other provision of the Plan other
than Section 4.3, the Committee may not, without prior approval of the Company’s
stockholders, seek to effect any re-pricing of any previously granted,
“underwater” Option or Stock Appreciation Right by: (a) amending or modifying
the terms of the Option or Stock Appreciation Right to lower the exercise price;
(b) canceling the underwater Option or Stock Appreciation Right in exchange for
(i) cash; (ii) replacement Options or Stock Appreciation Rights having a lower
exercise price; or (iii) other Incentive Awards; or (c) repurchasing the
underwater Options or Stock Appreciation Rights and granting new Incentive
Awards under the Plan. For purposes of this Section 3.4, Options and Stock
Appreciation Rights will be deemed to be “underwater” at any time when the Fair
Market Value of the Common Stock is less than the exercise price of the Option
or Stock Appreciation Right.

 

3.5     Participants Based Outside the United States. In addition to the
authority of the Committee under Section 3.2 of the Plan and notwithstanding any
other provision of the Plan, the Committee may, in its sole discretion, amend
the terms of the Plan or Incentive Awards with respect to Participants resident
outside of the United States or employed by a non-U.S. Subsidiary in order to
comply with local legal requirements, to otherwise protect the Company’s or
Subsidiary’s interests, or to meet objectives of the Plan, and may, where
appropriate, establish one or more sub-plans (including the adoption of any
required rules and regulations) for the purposes of qualifying for preferred tax
treatment under foreign tax laws. The Committee will have no authority, however,
to take action pursuant to this Section 3.5 of the Plan: (a) to reserve shares
or grant Incentive Awards in excess of the limitations provided in Section 4.1
of the Plan; (b) to effect any re-pricing in violation of Section 3.4 of the
Plan; (c) to grant Options or Stock Appreciation Rights having an exercise price
less than 100% of the Fair Market Value of one share of Common Stock on the
Grant Date in violation of Section 6.3 or 7.3 of the Plan, as the case may be;
or (d) for which stockholder approval would then be required pursuant to Section
422 of the Code or the Listing Rules of The NASDAQ Stock Market (or other
applicable exchange or market on which the Company’s Common Stock may be traded
or quoted).

 

4.     Shares Available for Issuance.

 

4.1     Maximum Number of Shares Available; Certain Restrictions on Awards.
Subject to adjustment as provided in Section 4.3 of the Plan, the maximum number
of shares of Common Stock that will be available for issuance under the Plan
will be the sum of:

 

(a)     800,000 shares;

 

(b)     the number of shares issued or Incentive Awards granted under the Plan
in connection with the settlement, assumption or substitution of outstanding
awards or obligations to grant future awards as a condition of the Company
and/or any Subsidiary(ies) acquiring, merging or consolidating with another
entity; and

 

 
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(c)     the number of shares that are unallocated and available for grant under
a stock plan assumed by the Company or any Subsidiary(ies) in connection with
the merger, consolidation, or acquisition of another entity by the Company
and/or any of its Subsidiaries, based on the applicable exchange ratio and other
transaction terms, but only to the extent that such shares may be utilized by
the Company or its Subsidiaries following the transaction pursuant to the rules
and regulations of The NASDAQ Stock Market (or other applicable exchange or
market on which the Company’s Common Stock may be traded or quoted).

 

The shares available for issuance under the Plan may, at the election of the
Committee, be either treasury shares or shares authorized but unissued, and, if
treasury shares are used, all references in the Plan to the issuance of shares
will, for corporate law purposes, be deemed to mean the transfer of shares from
treasury.

 

Notwithstanding any other provisions of the Plan to the contrary, (i) no more
than 250,000 shares of Common Stock may be issued pursuant to the exercise of
Incentive Stock Options granted under the Plan; and (ii) no more than 325,000
shares of Common Stock may be issued or issuable under the Plan in connection
with the grant of Full Value Awards. All of the foregoing share limits are
subject, in each case, to adjustment as provided in Section 4.3 of the Plan.
Incentive Stock Options issued as a result of the Company’s assumption or
substitution of like awards issued by any acquired, merged or consolidated
entity pursuant to applicable provisions of the Code will not count towards the
limit in clause (i).

 

The maximum aggregate number of shares of Common Stock subject to a non-employee
Director Incentive Award to any one non-employee Director in any one Plan Year
may not exceed 20,000; provided, that such limit shall not apply to any election
of a non-employee Director to receive shares of Common Stock in lieu of all or a
portion of any annual Board, chair and other retainers and any meeting fees
otherwise payable in cash.

 

4.2     Accounting for Incentive Awards. Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Incentive Awards will be
applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan. All shares so subtracted from the amount
available under the Plan with respect to an Incentive Award that lapses,
expires, is forfeited (including issued shares forfeited under a Restricted
Stock Award) or for any reason is terminated unexercised or unvested or is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan; provided,
however, that the full number of shares of Common Stock subject to a Stock
Appreciation Right granted that is settled by the issuance of shares of Common
Stock will be counted against the shares of Common Stock authorized for issuance
under the Plan, regardless of the number of shares actually issued upon
settlement of such Stock Appreciation Right. Furthermore, any shares of Common
Stock withheld to satisfy tax withholding obligations on Incentive Awards issued
under the Plan, any shares of Common Stock withheld to pay the exercise price of
Incentive Awards under the Plan and any shares of Common Stock not issued or
delivered as a result of the “net exercise” of an outstanding Option pursuant to
Section 6.5 of the Plan or settlement of a Stock Appreciation Right in shares of
Common Stock pursuant to Section 7.7 of the Plan will be counted against the
shares of Common Stock authorized for issuance under the Plan and will not be
available again for grant under the Plan. Any shares of Common Stock repurchased
by the Company on the open market using the proceeds from the exercise of an
Incentive Award will not increase the number of shares available for future
grant of Incentive Awards. Any shares of Common Stock related to Incentive
Awards under the Plan that terminate by expiration, forfeiture, cancellation or
otherwise without the issuance of shares of Common Stock, or are settled in cash
in lieu of shares, or are exchanged with the Committee’s permission, prior to
the issuance of shares, for Incentive Awards not involving shares, will be
available again for grant under the Plan.

 

 
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4.3     Annual Award Limits. The following limits, as adjusted pursuant to
Section 4.4, will apply to grants of Incentive Awards unless the Committee
specifically determines at the time of grant that an Incentive Award is not
intended to qualify as Performance-Based Compensation under this Plan:

 

(a)     The maximum aggregate number of shares of Common Stock subject to
Options and Stock Appreciation Rights granted to any one Participant in any one
Plan Year will be 100,000 shares.

 

(b)     The maximum aggregate number of shares of Common Stock subject to
Restricted Stock Awards and Restricted Stock Units granted to any one
Participant in any one Plan Year will be 100,000 shares.

 

(c)     The maximum aggregate dollar amount or number of shares of Common Stock
granted with respect to Performance Awards to any one Participant in any one
Plan Year may not exceed $2,500,000 or 100,000 shares, determined as of the date
of payout.

 

(d)     The maximum aggregate dollar amount granted or number of shares of
Common Stock with respect to Other Cash-Based Awards to any one Participant in
any one Plan Year may not exceed $2,500,000 or 100,000 shares, determined as of
the date of payout.

 

(e)     The maximum aggregate amount of shares of Common Stock granted with
respect to Stock Bonuses to any one Participant in any one Plan Year may not
exceed 100,000 shares, determined as of the date of payout

 

4.4     Adjustments to Shares and Incentive Awards.

 

(a)     In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or extraordinary dividend
(including a spin-off) or any other similar change in the corporate structure or
shares of the Company, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation) will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other property (including
cash) available for issuance or payment under the Plan, including the sub-limits
set forth in Section 4.1 of the Plan and the Annual Award Limitations in Section
4.3, and, in order to prevent dilution or enlargement of the rights of
Participants, (a) the number and kind of securities or other property (including
cash) subject to outstanding Incentive Awards, and (b) the exercise price of
outstanding Incentive Awards. The determination of the Committee as to the
foregoing adjustments, if any, will be final, conclusive and binding on
Participants under the Plan.

 

(b)     Notwithstanding anything else in the Plan to the contrary, without
affecting the number of shares of Common Stock reserved or available under the
Plan, including the sub-limits in Section 4.1 of the Plan and the Annual Award
Limitations in Section 4.3, the Committee may authorize the issuance or
assumption of benefits under the Plan in connection with any merger,
consolidation, acquisition of property or stock or reorganization upon such
terms and conditions as it may deem appropriate, subject to compliance with the
rules under Sections 422, 424 and 409A of the Code, as and where applicable.

 

 
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5.     Participation.

 

Participants in the Plan will be those Eligible Recipients who, in the judgment
of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of objectives of the Company or its Subsidiaries.
Eligible Recipients may be granted from time to time one or more Incentive
Awards, singly or in combination or in tandem with other Incentive Awards, as
may be determined by the Committee in its sole discretion. Incentive Awards will
be deemed to be granted as of the date specified in the grant resolution of the
Committee, which date will be the Grant Date of any related Incentive Award
Agreement with the Participant.

 

6.     Options.

 

6.1     Grant. An Eligible Recipient may be granted one or more Options under
the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion. The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
An Option will be an Incentive Stock Option only if the Eligible Recipient
receiving the Option is an Employee. To the extent that any Incentive Stock
Option (or portion thereof) granted under the Plan ceases for any reason to
qualify as an “incentive stock option” for purposes of Section 422 of the Code,
such Incentive Stock Option (or portion thereof) will continue to be outstanding
for purposes of the Plan but will thereafter be deemed to be a Non-Statutory
Stock Option. Options may be granted to an Eligible Recipient for services
provided to a Subsidiary only if, with respect to such Eligible Recipient, the
underlying shares of Common Stock constitute “service recipient stock” within
the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii).

 

6.2     Incentive Award Agreement. Each Option grant will be evidenced by an
Incentive Award Agreement that will specify the exercise price of the Option,
the maximum duration of the Option, the number of shares of Common Stock to
which the Option pertains, the conditions upon which an Option will become
vested and exercisable, and such other provisions as the Committee will
determine which are not inconsistent with the terms of the Plan. The Incentive
Award Agreement also will specify whether the Option is intended to be an
Incentive Stock Option or a Non-Statutory Stock Option.

 

6.3     Exercise Price. The per share price to be paid by a Participant upon
exercise of an Option granted pursuant to this Section 6 will be determined by
the Committee in its sole discretion at the time of the Option grant; provided,
however, that such price will not be less than 100% of the Fair Market Value of
one share of Common Stock on the date of grant (or 110% of the Fair Market Value
of one share of Common Stock on the date of grant of an Incentive Stock Option
if, at the time the Incentive Stock Option is granted, the Participant owns,
directly or indirectly, more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary corporation of the
Company). Notwithstanding the foregoing, to the extent that Options are granted
under the Plan as a result of the Company’s assumption or substitution of
options issued by any acquired, merged or consolidated entity, the exercise
price for such Options will be the price determined by the Committee pursuant to
the conversion terms applicable to the transaction.

 

6.4     Exercisability and Duration. An Option will become exercisable at such
times and in such installments and upon such terms and conditions as may be
determined by the Committee in its sole discretion at the time of grant,
including (a) the achievement of one or more specified performance objectives;
and/or that (b) the Participant remain in the continuous employment or service
with the Company or a Subsidiary for a certain period; provided, however, that
no Option may be exercisable after ten (10) years from the Grant Date (five
years from the Grant Date in the case of an Incentive Stock Option if, at the
time the Incentive Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company).
Notwithstanding the foregoing, if the Option (other than in the case of an
Incentive Stock Option) would expire at a time when trading in the shares of
Common Stock is prohibited by the Company’s insider trading policy (or
Company-imposed “blackout period”), then the term of the Option will be
automatically extended until the thirtieth (30th) day following the expiration
of such prohibition or if the exercise of an Option that is exercisable in
accordance with its terms is otherwise prevented by the provisions of Section 18
of the Plan, then the Option will remain exercisable until thirty (30) days
after the date such exercise first would no longer be prevented by such
provisions, but in any event no later than the expiration date of such Option.

 

 
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6.5     Payment of Exercise Price.

 

(a)     The total purchase price of the shares of Common Stock to be purchased
upon exercise of an Option must be paid entirely in cash (including check, bank
draft or money order); provided, however, that the Committee, in its sole
discretion and upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by (i) tender of a Broker
Exercise Notice; (ii) tender, either by actual delivery or attestation as to
ownership, of Previously Acquired Shares that are acceptable to the Committee;
(iii) a “net exercise” of the Option (as further described in paragraph (b),
below); (iv) a combination of such methods; or (v) any other method approved or
accepted by the Committee in its sole discretion.

 

(b)     In the case of a “net exercise” of an Option, the Company will not
require a payment of the exercise price of the Option from the Participant but
will reduce the number of shares of Common Stock issued upon the exercise by the
largest number of whole shares that has a Fair Market Value on the exercise date
that does not exceed the aggregate exercise price for the shares exercised under
this method. Shares of Common Stock will no longer be outstanding under an
Option (and will therefore not thereafter be exercisable) following the exercise
of such Option to the extent of (i) shares used to pay the exercise price of an
Option under the “net exercise,” (ii) shares actually delivered to the
Participant as a result of such exercise and (iii) any shares withheld for
purposes of tax withholding pursuant to Section 15.1 of the Plan.

 

(c)     For purposes of such payment, Previously Acquired Shares tendered or
covered by an attestation will be valued at their Fair Market Value on the
exercise date of the Option.

 

6.6     Manner of Exercise. An Option may be exercised by a Participant in whole
or in part from time to time, subject to the conditions contained in the Plan
and in the Incentive Award Agreement evidencing such Option, by delivery in
person, by facsimile or electronic transmission or through the mail of written
notice of exercise to the Company at its principal executive office in Mondovi,
Wisconsin (or to the Company’s designee as may be established from time to time
by the Company and communicated to Participants) and by paying in full the total
exercise price for the shares of Common Stock to be purchased in accordance with
Section 6.5 of the Plan.

 

 
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7.     Stock Appreciation Rights.

 

7.1     Grant. An Eligible Recipient may be granted one or more Stock
Appreciation Rights under the Plan, and such Stock Appreciation Rights will be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as may be determined by the Committee in its sole discretion. The
Committee will have the sole discretion to determine the form in which payment
of the economic value of Stock Appreciation Rights will be made to a Participant
(i.e., cash, shares of Common Stock or any combination thereof) or to consent to
or disapprove the election by a Participant of the form of such payment. Stock
Appreciation Rights may be granted to an Eligible Recipient for services
provided to a Subsidiary only if, with respect to such Eligible Recipient, the
underlying shares of Common Stock constitute “service recipient stock” within
the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii).

 

7.2     Incentive Award Agreement. Each Stock Appreciation Right will be
evidenced by an Incentive Award Agreement that will specify the exercise price
of the Stock Appreciation Right, the term of the Stock Appreciation Right, and
such other provisions as the Committee will determine which are not inconsistent
with the terms of the Plan.

 

7.3     Exercise Price. The exercise price of a Stock Appreciation Right will be
determined by the Committee, in its sole discretion, at the Grant Date;
provided, however, that such price may not be less than 100% of the Fair Market
Value of one share of Common Stock on the Grant Date. Notwithstanding the
foregoing, to the extent that Stock Appreciation Rights are granted under the
Plan as a result of the Company’s assumption or substitution of stock
appreciation rights issued by any acquired, merged or consolidated entity, the
exercise price for such Stock Appreciation Rights will be the price determined
by the Committee pursuant to the conversion terms applicable to the transaction.

 

7.4     Exercisability and Duration. A Stock Appreciation Right will become
exercisable at such times and in such installments as may be determined by the
Committee in its sole discretion at the time of grant; provided, however, that
no Stock Appreciation Right may be exercisable after ten (10) years from its
Grant Date. Notwithstanding the foregoing, if the Stock Appreciation Right would
expire at a time when trading in the shares of Common Stock is prohibited by the
Company’s insider trading policy (or Company-imposed “blackout period”), then
the term of the Stock Appreciation Right will be automatically extended until
the thirtieth (30th) day following the expiration of such prohibition or if the
exercise of a Stock Appreciation Right that is exercisable in accordance with
its terms is otherwise prevented by the provisions of Section 18 of the Plan,
the Stock Appreciation Right will remain exercisable until thirty (30) days
after the date such exercise first would no longer be prevented by such
provisions, but in any event no later than the expiration date of such Stock
Appreciation Right.

 

7.5     Manner of Exercise. A Stock Appreciation Right will be exercised by
giving notice in the same manner as for Options, as set forth in Section 6.6 of
the Plan, subject to any other terms and conditions consistent with the other
provisions of the Plan as may be determined by the Committee in its sole
discretion.

 

7.6     Settlement. Upon the exercise of a Stock Appreciation Right, a
Participant will be entitled to receive payment from the Company in an amount
determined by multiplying:

 

(a)     The excess of the Fair Market Value of a share of Common Stock on the
date of exercise over the per share exercise price; by

 

(b)     The number of shares of Common Stock with respect to which the Stock
Appreciation Right is exercised.

 

 
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7.7     Form of Payment. Payment, if any, with respect to a Stock Appreciation
Right settled in accordance with Section 7.6 of the Plan will be made in
accordance with the terms of the applicable Incentive Award Agreement, in cash,
shares of Common Stock or a combination thereof, as the Committee determines in
its sole discretion.

 

8.     Restricted Stock Awards and Restricted Stock Units.

 

8.1     Grant. An Eligible Recipient may be granted one or more Restricted Stock
Awards or Restricted Stock Units under the Plan, and such awards will be subject
to such terms and conditions, consistent with the other provisions of the Plan,
as may be determined by the Committee in its sole discretion. Restricted Stock
Units will be similar to Restricted Stock Awards except that no shares of Common
Stock are actually awarded to the Participant on the Grant Date of the
Restricted Stock Units. Restricted Stock Units will be denominated in shares of
Common Stock but paid in cash, shares of Common Stock or a combination of cash
and shares of Common Stock as the Committee, in its sole discretion, will
determine, and as provided in the Incentive Award Agreement.

 

8.2     Incentive Award Agreement. Each Restricted Stock Award or Restricted
Stock Unit will be evidenced by an Incentive Award Agreement that will specify
the type of Incentive Award, the period(s) of restriction, the number of shares
of restricted Common Stock, or the number of Restricted Stock Units granted, and
such other provisions as the Committee will determine which are not inconsistent
with the terms of the Plan.

 

8.3     Vesting Requirements and Restrictions. The Committee will impose such
restrictions or conditions, not inconsistent with the provisions of the Plan, to
the vesting of such Restricted Stock Awards or Restricted Stock Units as it
deems appropriate, including (a) the achievement of one or more specified
performance objectives; or that (b) the Participant remain in the continuous
employment or service with the Company or a Subsidiary for a certain period. If
any vesting requirements of a Restricted Stock Award or Restricted Stock Unit
are not satisfied, the Restricted Stock Award or Restricted Stock Unit will be
forfeited and the shares of Common Stock subject to the Restricted Stock Award
will be returned to the Company and no shares of Common Stock or other
consideration will be issued with respect to the forfeited Restricted Stock
Unit. If the Participant paid any purchase price with respect to such forfeited
shares, unless otherwise provided by the Committee in the Incentive Award
Agreement evidencing the Restricted Stock Award, the Company will refund to the
Participant the lesser of (x) such purchase price and (y) the Fair Market Value
of such shares on the date of forfeiture. Notwithstanding the foregoing,
Restricted Stock Awards may in the sole discretion of the Committee be granted
without any restrictions or conditions.

 

8.4     Rights as a Shareholder. Except as provided in Sections 8.1, 8.5 and 8.6
of the Plan, upon a Participant becoming the holder of record of shares of
Common Stock issued under a Restricted Stock Award pursuant to this Section 8,
the Participant will have all voting, dividend, liquidation and other rights
with respect to such shares (other than the right to sell or transfer such
shares) as if such Participant were a holder of record of shares of unrestricted
Common Stock. A Participant will have no voting, dividend, liquidation and other
rights with respect to any shares of Common Stock underlying any Restricted
Stock Units granted hereunder unless and until the shares of Common Stock are
issued under the terms thereof and the Participant becomes the holder of record
of such shares.

 

 
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8.5     Dividends and Distributions.

 

(a)     Unless the Committee determines otherwise in its sole discretion (either
in the Incentive Award Agreement evidencing the Restricted Stock Award at the
time of grant or at any time after the grant of the Restricted Stock Award), any
dividends or distributions (other than regular quarterly cash dividends) paid
with respect to shares of Common Stock subject to the unvested portion of a
Restricted Stock Award will be subject to the same restrictions as the shares to
which such dividends or distributions relate. The Committee will determine in
its sole discretion whether any interest will be paid on such dividends or
distributions.

 

(b)     Unless the Committee determines otherwise in its sole discretion (either
in the Incentive Award Agreement evidencing the Restricted Stock Unit at the
time of grant or at any time after the grant of the Restricted Stock Unit), any
Restricted Stock Unit shall carry with it a right to “dividend equivalents” (as
defined in Section 12).

 

8.6     Enforcement of Restrictions. To enforce the restrictions referred to in
this Section 8, the Committee may place a legend on the stock certificates or
book-entry notation representing Restricted Stock Awards referring to such
restrictions and may require the Participant, until the restrictions have
lapsed, to keep any stock certificates, together with duly endorsed stock
powers, in the custody of the Company or its transfer agent, or to maintain
evidence of stock ownership, together with duly endorsed stock powers, in a
certificateless book-entry stock account with the Company’s transfer agent.
Alternatively, Restricted Stock Awards may be held in non-certificated form
pursuant to such terms and conditions as the Company may establish with its
registrar and transfer agent or any third-party administrator designated by the
Company to hold Restricted Stock Awards on behalf of Participants.

 

8.7     Lapse of Restrictions; Settlement. Except as otherwise provided in this
Section 8, shares of Common Stock underlying a Restricted Stock Award will
become freely transferable by the Participant after all conditions and
restrictions applicable to such shares have been satisfied or lapse (including
satisfaction of any applicable tax withholding obligations). Upon the vesting of
a Restricted Stock Unit, the Restricted Stock Unit will be settled, subject to
the terms and conditions of the applicable Incentive Award Agreement, (a) in
cash, based upon the Fair Market Value of the vested underlying shares of Common
Stock, (b) in shares of Common Stock or (c) a combination thereof, as provided
in the Incentive Award Agreement, except to the extent that a Participant has
properly elected to defer income that may be attributable to a Restricted Stock
Unit under a Company deferred compensation plan or arrangement.

 

8.8     Section 83(b) Election for Restricted Stock Award. If a Participant
makes an election pursuant to Section 83(b) of the Code with respect to a
Restricted Stock Award, the Participant must file, within thirty (30) days
following the Grant Date of the Restricted Stock Award, a copy of such election
with the Company and with the Internal Revenue Service, in accordance with the
regulations under Section 83 of the Code. The Committee may provide in the
Incentive Award Agreement that the Restricted Stock Award is conditioned upon
the Participant’s making or refraining from making an election with respect to
the award under Section 83(b) of the Code.

 

9.     Performance Awards.

 

9.1     Grant. An Eligible Recipient may be granted one or more Performance
Awards under the Plan, and such awards will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion, including the achievement of
one or more specified performance objectives.

 

9.2     Incentive Award Agreement. Each Performance Award will be evidenced by
an Incentive Award Agreement that will specify the amount of cash, shares of
Common Stock or combination of both to be received by the Participant upon
payout of the Performance Award, any performance objectives upon which the
Performance Award is subject, any performance period during which any such
performance objectives must be achieved and such other provisions as the
Committee will determine which are not inconsistent with the terms of the Plan.

 

 
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9.3     Vesting. The Committee may impose such restrictions or conditions, not
inconsistent with the provisions of the Plan, to the vesting of such Performance
Awards as it deems appropriate, including the achievement of one or more
specified performance objectives.

 

9.4     Form and Timing of Performance Award Payment. Subject to the terms of
the Plan, after the applicable performance period has ended, the holder of
Performance Awards will be entitled to receive payment on the value and number
of Performance Awards earned by the Participant over the performance period, to
be determined as a function of the extent to which the corresponding performance
objectives have been achieved. Payment of earned Performance Awards will be as
determined by the Committee and as evidenced in the Incentive Award Agreement.
Subject to the terms of the Plan, the Committee, in its sole discretion, may pay
earned Performance Awards in the form of cash or in shares of Common Stock (or
in a combination thereof) equal to the value of the earned Performance Awards at
the close of the applicable performance period. Payment of any Performance Award
will be made as soon as practicable after the Committee has determined the
extent to which the applicable performance objectives have been achieved and not
later than the March 15th immediately following the end of the performance
period, or earlier than the January 1st preceding such March 15, except to the
extent that a Participant has properly elected to defer payment that may be
attributable to a Performance Award under a Company deferred compensation plan
or arrangement. The determination of the Committee with respect to the form of
payment of Performance Awards will be set forth in the Incentive Award Agreement
pertaining to the grant of the award. Any shares of Common Stock issued in
payment of earned Performance Awards may be granted subject to any restrictions
deemed appropriate by the Committee, including that the Participant remain in
the continuous employment or service with the Company or a Subsidiary for a
certain period.

 

10.     Stock Bonuses.

 

An Eligible Recipient may be granted one or more Stock Bonuses under the Plan,
and such Stock Bonuses will be subject to such terms and conditions, if any,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion, including the achievement of one or more
specified performance objectives.

 

11.     Other Stock-Based Awards.

 

11.1     Other Stock-Based Awards. Subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion, the Committee may grant Other Stock-Based
Awards not otherwise described by the terms of the Plan (including the grant or
offer for sale of unrestricted shares of Common Stock) in such amounts and
subject to such terms and conditions as the Committee will determine. Such
Incentive Awards may involve the transfer of actual shares of Common Stock to
Participants or payment in cash or otherwise of amounts based on the value of
shares of Common Stock, and may include Incentive Awards designed to comply with
or take advantage of the applicable local laws of jurisdictions other than the
United States.

 

11.2     Value of Other Stock-Based Awards. Each Other Stock-Based Award will be
expressed in terms of shares of Common Stock or units based on shares of Common
Stock, as determined by the Committee. The Committee may establish performance
objectives in its sole discretion for any Other Stock-Based Award. If the
Committee exercises its discretion to establish performance objectives for any
such Incentive Awards, the number or value of Other Stock-Based Awards that will
be paid out to the Participant will depend on the extent to which the specified
performance objectives are met.

 

 
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11.3     Payment of Other Stock-Based Awards. Payment, if any, with respect to
an Other Stock-Based Award will be made in accordance with the terms of the
Incentive Award and in cash or shares of Common Stock, as the Committee
determines, except to the extent that a Participant has properly elected to
defer payment that may be attributable to an Other Stock-Based Award under a
Company deferred compensation plan or arrangement.

 

12.     Dividend Equivalents.

 

Any Participant selected by the Committee may be granted dividend equivalents
based on the dividends declared on shares of Common Stock that are subject to
any Incentive Award, to be credited as of dividend payment dates, during the
period between the Grant Date of the Incentive Award and the date the Incentive
Award is exercised, vests, is settled or expires, as determined by the
Committee. Such dividend equivalents will be converted to cash or additional
shares of Common Stock by such formula and at such time and subject to such
limitations as may be determined by the Committee. Notwithstanding the
foregoing, the Committee may not grant dividend equivalents based on the
dividends declared on shares of Common Stock that are subject to an Option or
Stock Appreciation Right and further, no dividend or dividend equivalents will
be paid out with respect to any unvested Incentive Awards, the vesting of which
is based on the achievement of performance objectives.

 

13.     Performance Measures.

 

13.1     Performance Measure Elements. The Performance Goals upon which the
payment or vesting of an Incentive Award to a Covered Employee that is intended
to qualify as Performance-Based Compensation will be limited to one or more
specified objective Performance Measures that are based on the following
Performance Measure Elements:

 

 

i.

Sales and Revenue Measure Elements:

 

 

1.

Gross Revenue or Sales

 

2.

Net Revenue or Net Sales

 

3.

Invoiced Revenue or Sales

 

4.

Collected Revenue or Sales

 

5.

Operating Revenue

 

6.

Operating Revenue, net of fuel surcharge revenue

 

 

ii.

Expense Measure Elements:

 

 

1.

General and Administrative Expenses

 

2.

Operating Expenses

 

3.

Non-cash Expenses

 

4.

Tax Expense

 

5.

Non-operating Expenses

 

6.

Total Expenses

 

7.

Operating Expenses as a percentage of Operating Revenue

 

8.

Operating Expenses as a percentage of Operating Revenue, with both amounts net
of fuel surcharge revenue

 

 
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iii.

Profitability and Productivity Measure Elements:

 

 

1.

Gross Margin

 

2.

Net Operating Income

 

3.

EBITDA (earnings before interest, taxes, depreciation and amortization)

 

4.

EBIT (earnings before interest and taxes)

 

5.

Net Operating Income After Taxes (NOPAT)

 

6.

Net Income

 

7.

Net Cash Flows

 

8.

Net Cash Flows from Operations

 

 

iv.

Asset Utilization and Effectiveness Measure Elements:

 

 

1.

Cash

 

2.

Excess Cash

 

3.

Accounts Receivable

 

4.

Current Assets

 

5.

Working Capital

 

6.

Total Capital

 

7.

Fixed Assets

 

8.

Total Assets

 

 

v.

Debt and Equity Measure Elements:

 

 

1.

Accounts Payable

 

2.

Current Accrued Liabilities

 

3.

Total Current Liabilities

 

4.

Total Debt

 

5.

Debt Principal Payments

 

6.

Net Current Borrowings

 

7.

Credit Rating

 

8.

Retained Earnings

 

9.

Total Preferred Equity

 

10.

Total Common Equity

 

11.

Total Equity

 

 

vi.

Stockholder and Return Measure Elements:

 

 

1.

Earnings per Share (basic and diluted)

 

2.

Stock Price

 

3.

Dividends

 

4.

Shares Repurchased

 

5.

Total Return to Stockholders

 

6.

Debt Coverage Ratios

 

7.

Return on Assets

 

8.

Return on Equity

 

9.

Return on Invested Capital

 

10.

Economic Profit (for example, economic value added)

  

 
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vii.

Customer and Market Measure Elements:

 

 

1.

Customer Satisfaction

 

2.

Customer Service/Care

 

3.

Brand Awareness and Perception

 

4.

Market Share

 

 

viii.

Organizational and Employee Measure Elements:

 

 

1.

Headcount

 

2.

Employee Performance

 

3.

Employee Productivity

 

4.

Employee Engagement/Satisfaction

 

5.

Employee Turnover

 

6.

Employee Diversity

 

Any Performance Measure Element can be a Performance Measure. In addition, any
of the Performance Measure Element(s) can be used in an algebraic formula (e.g.,
averaged over a period, combined into a ratio, compared to a budget or standard,
compared to previous periods or other formulaic combinations) based on the
Performance Measure Elements to create a Performance Measure. Any Performance
Measure(s) may be used to measure the performance of the Company or Subsidiary
as a whole or any division or business unit of the Company, product or product
group, region or territory, or Subsidiary, or any combination thereof, as the
Committee may deem appropriate. Any Performance Measure(s) can be compared to
the performance of a group of comparator companies, or published or special
index that the Committee, in its sole discretion, deems appropriate, or the
Company may select any Performance Measure(s) above as compared to various stock
market indices. The Committee also has the authority to provide for accelerated
vesting of any Incentive Award based on the achievement of Performance Goals
pursuant to any Performance Measure(s) specified in this Section 13.1.

 

13.2     Establishment of Performance Goals. Any Incentive Award to a Covered
Employee that is intended to qualify as Performance-Based Compensation will be
granted, and Performance Goals for such an Incentive Award will be established,
by the Committee in writing not later than ninety (90) days after the
commencement of the Performance Period to which the Performance Goals relate, or
such other period required under Section 162(m) of the Code; provided that the
outcome is substantially uncertain at the time the Committee establishes the
Performance Goal; and provided further that in no event will a Performance Goal
be considered to be pre-established if it is established after twenty-five
percent (25%) of the Performance Period (as scheduled in good faith at the time
the Performance Goal is established) has elapsed.

 

13.3     Certification of Payment. Before any payment is made in connection with
any Incentive Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation, the Committee must certify in writing, as
reflected in the minutes, that the Performance Goals established with respect to
such Incentive Award have been achieved.

 

13.4     Evaluation of Performance. The Committee may provide in any such
Incentive Award Agreement including Performance Goals that any evaluation of
performance may include or exclude any of the following events that occurs
during a Performance Period: (a) items related to a change in accounting
principles; (b) items relating to financing activities; (c) expenses for
restructuring or productivity initiatives; (d) other non-operating items; (e)
items related to acquisitions; (f) items attributable to the business operations
of any entity acquired by the Company during the Performance Period; (g) items
related to the disposal of a business or segment of a business; (h) items
related to discontinued operations that do not qualify as a segment of a
business under applicable accounting standards; (i) items attributable to any
stock dividend, stock split, combination or exchange of stock occurring during
the Performance Period; (j) any other items of significant income or expense
which are determined to be appropriate adjustments; (k) items relating to
unusual or extraordinary corporate transactions, events or developments; (l)
items related to amortization of acquired intangible assets; (m) items that are
outside the scope of the Company’s core, on-going business activities; (n) items
related to acquired in-process research and development; (o) items relating to
changes in tax laws; (p) items relating to major licensing or partnership
arrangements; (q) items relating to asset impairment charges; (r) items relating
to gains or losses for litigation, arbitration and contractual settlements; (s)
foreign exchange gains and losses; or (t) items relating to any other unusual or
nonrecurring events or changes in applicable laws, accounting principles or
business conditions. To the extent such inclusions or exclusions affect
Incentive Awards to Covered Employees, they will be prescribed in a form that
meets the requirements of Section 162(m) of the Code for deductibility.

 

 
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13.5     Adjustment of Performance Goals, Performance Periods or other Vesting
Criteria. Subject to Section 13.6, the Committee may amend or modify the vesting
criteria (including any Performance Goals, Performance Measures or Performance
Periods) of any outstanding Awards based in whole or in part on the financial
performance of the Company (or any Subsidiary or division, business unit or
other sub-unit thereof) in recognition of unusual or nonrecurring events
(including the events described in Sections 3.6 or 4.5(a) 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 this Plan. The determination of the Committee as to the foregoing
adjustments, if any, shall be final, conclusive and binding on Participants
under this Plan.

 

13.6     Adjustment of Performance-Based Compensation. Incentive Awards that are
intended to qualify as Performance-Based Compensation may not be adjusted
upward. The Committee will retain the discretion to adjust such Incentive Awards
downward, either on a formula or discretionary basis or any combination, as the
Committee determines.

 

13.7     Committee Discretion. In the event that applicable tax or securities
laws change to permit Committee discretion to alter the governing Performance
Measures without obtaining stockholder approval of such changes, the Committee
will have sole discretion to make such changes without obtaining stockholder
approval. In addition, in the event that the Committee determines that it is
advisable to grant Incentive Awards that will not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Section 162(m) of the Code and base vesting on Performance
Measures other than those set forth in Section 13.1

 

14.     Effect of Termination of Employment or Other Service.

 

14.1     Termination Due to Death, Disability or Retirement. Unless otherwise
expressly provided by the Committee in its sole discretion in an Incentive Award
Agreement, and subject to Sections 14.3, 14.4, 14.5 and 14.6 of the Plan, in the
event a Participant’s employment or other service with the Company and all
Subsidiaries is terminated by reason of death, Disability or Retirement:

 

(a)     All outstanding Options and Stock Appreciation Rights then held by the
Participant will, to the extent exercisable as of such termination, remain
exercisable in full for a period of one year after such termination (but in no
event after the expiration date of any such Option or Stock Appreciation Right).
Options and Stock Appreciation Rights not exercisable as of such termination
will be forfeited and terminate.

 

(b)     All Restricted Stock Awards then held by the Participant that have not
vested as of such termination will be terminated and forfeited; and

 

 
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(c)     All outstanding but unpaid Restricted Stock Units, Performance Awards,
Stock Bonuses and Other Stock-Based Awards then held by the Participant will be
terminated and forfeited; provided, however, that with respect to any such
Incentive Awards the vesting of which is based on the achievement of specified
performance objectives, if a Participant’s employment or other service with the
Company or any Subsidiary, as the case may be, is terminated by reason of death
or Disability prior to the end of the performance period of such Incentive
Award, but after the conclusion of a portion of the performance period (but in
no event less than one year), the Committee may, in its sole discretion, cause
shares of Common Stock to be delivered or payment made with respect to the
Participant’s Incentive Award, but only if otherwise earned for the entire
performance period and only with respect to the portion of the applicable
performance period completed at the date of such event, with proration based on
full fiscal years only and no shares to be delivered for partial fiscal years.
The Committee will consider the provisions of Sections 14.5 and 14.6 of the Plan
and will have the discretion to consider any other fact or circumstance in
making its decision as to whether to deliver such shares of Common Stock or
other payment, including whether the Participant again becomes employed.

 

14.2     Termination for Reasons Other than Death, Disability or Retirement.
Unless otherwise expressly provided by the Committee in its sole discretion in
an Incentive Award Agreement, and subject to Sections 14.3, 14.4, 14.5 and 14.6
of the Plan, in the event a Participant’s employment or other service with the
Company and all Subsidiaries is terminated for any reason other than death,
Disability or Retirement, or a Participant is in the employment or service with
a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless
the Participant continues in the employment or service with the Company or
another Subsidiary):

 

(a)     All outstanding Options and Stock Appreciation Rights then held by the
Participant will, to the extent exercisable as of such termination, remain
exercisable in full for a period of three months after such termination (but in
no event after the expiration date of any such Option or Stock Appreciation
Right). Options and Stock Appreciation Rights not exercisable as of such
termination will be forfeited and terminate;

 

(b)     All Restricted Stock Awards then held by the Participant that have not
vested as of such termination will be terminated and forfeited; and

 

(c)     All outstanding but unpaid Restricted Stock Unit, Performance Awards,
Stock Bonuses and Other Stock-Based Awards then held by the Participant will be
terminated and forfeited.

 

14.3     Modification of Rights Upon Termination. Notwithstanding the other
provisions of this Section 14, upon a Participant’s termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the Grant Date,
including following such termination), except as provided below, cause Options
or Stock Appreciation Rights (or any part thereof) then held by such Participant
to terminate, become or continue to become exercisable and/or remain exercisable
following such termination of employment or service, and Restricted Stock
Awards, Restricted Stock Units, Performance Awards, Stock Bonuses or Other
Stock-Based Awards then held by such Participant to terminate, vest, settle or
become free of restrictions and conditions to payment, as the case may be,
following such termination of employment or service, in each case in the manner
determined by the Committee; provided, however, that no Option or Stock
Appreciation Right may remain exercisable beyond its expiration date and any
such action adversely affecting any outstanding Incentive Award will not be
effective without the consent of the affected Participant (subject to the right
of the Committee to take whatever action it deems appropriate under Sections
4.3, 14.5, 14.6 and 16 of the Plan).

 

 
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14.4     Determination of Termination of Employment or Other Service.

 

(a)     The change in a Participant’s status from that of an Employee to that of
a Consultant will, for purposes of the Plan, be deemed to result in a
termination of such Participant’s employment with the Company and its
Subsidiaries, unless the Committee otherwise determines in its sole discretion.

 

(b)     The change in a Participant’s status from that of a Consultant to that
of an Employee will not, for purposes of the Plan, be deemed to result in a
termination of such Participant’s service as a Consultant, and such Participant
will thereafter be deemed to be an Employee, in which event such Participant
will be governed by the provisions of the Plan relating to termination of
employment or service (subject to paragraph (a) above).

 

(c)     Unless the Committee otherwise determines in its sole discretion, a
Participant’s employment or other service will, for purposes of the Plan, be
deemed to have terminated on the date recorded on the personnel or other records
of the Company or the Subsidiary for which the Participant provides employment
or other service, as determined by the Committee in its sole discretion based
upon such records.

 

(d)     Notwithstanding the foregoing, if payment of an Incentive Award that is
subject to Section 409A of the Code is triggered by a termination of a
Participant’s employment or other service, such termination must also constitute
a “separation from service” within the meaning of Section 409A of the Code, and
any change in employment status that constitutes a “separation from service”
under Section 409A of the Code will be treated as a termination of employment or
service, as the case may be.

 

14.5     Effect of Actions Constituting Cause. Notwithstanding anything in the
Plan to the contrary and in addition to the other rights of the Committee under
this Section 14, if a Participant is determined by the Committee, acting in its
sole discretion, to have taken any action that would constitute Cause during or
after the termination of employment or other service with the Company or a
Subsidiary, irrespective of whether such action or the Committee’s determination
occurs before or after termination of such Participant’s employment or other
service with the Company or any Subsidiary and irrespective of whether or not
the Participant was terminated as a result of such Cause, (a) all rights of the
Participant under the Plan and any Incentive Award Agreements evidencing an
Incentive Award then held by the Participant will terminate and be forfeited
without notice of any kind, and (b) the Committee in its sole discretion will
have the authority to rescind the exercise, vesting, settlement or issuance of,
or payment in respect of, any Incentive Awards of the Participant that were
exercised, vested, settled or issued, or as to which such payment was made, and
to require the Participant to pay to the Company, within ten (10) days of
receipt from the Company of notice of such rescission, any amount received or
the amount of any gain realized as a result of such rescinded exercise, vesting,
settlement, issuance or payment (including any dividends paid or other
distributions made with respect to any shares of Common Stock subject to any
Incentive Award). The Company may defer the exercise of any Option or Stock
Appreciation Right for a period of up to six (6) months after receipt of the
Participant’s written notice of exercise or the issuance of share certificates
upon the vesting of any Incentive Award for a period of up to six (6) months
after the date of such vesting in order for the Committee to make any
determination as to the existence of Cause. The Company will be entitled to
withhold and deduct from future wages of the Participant (or from other amounts
that may be due and owing to the Participant from the Company or a Subsidiary)
or make other arrangements for the collection of all amounts necessary to
satisfy such payment obligations. Unless otherwise provided by the Committee in
an applicable Incentive Award Agreement, this Section 14.5 will not apply to any
Participant following a Change in Control.

 

 
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14.6     Clawback/Forfeiture of Incentive Awards. If the Company is required to
prepare an accounting restatement due to the material noncompliance of the
Company, as a result of misconduct, with any financial reporting requirement
under the securities laws, then any Participant who is one of the individuals
subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002 will reimburse the Company for the amount of any Incentive Award received
by such individual under the Plan during the 12-month period following the first
public issuance or filing with the Securities and Exchange Commission, as the
case may be, of the financial document embodying such financial reporting
requirement. In addition, all Incentive Awards under the Plan will be subject to
forfeiture or other penalties pursuant to any applicable law, rule or regulation
and any clawback or forfeiture policy of the Company, as in effect from time to
time, and such forfeiture and/or penalty conditions or provisions as determined
by the Committee and set forth in the applicable Incentive Award Agreement.

 

15.     Payment of Withholding Taxes.

 

15.1     General Rules. The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts that may be due and owing
to the Participant from the Company or a Subsidiary), or make other arrangements
for the collection of, an amount the Company reasonably determines to be the
minimum statutory amount necessary to satisfy any and all federal, foreign,
state and local withholding and employment-related tax requirements attributable
to an Incentive Award, including, the grant, exercise, vesting or settlement of,
or payment of dividends with respect to, an Incentive Award or a disqualifying
disposition of stock received upon exercise of an Incentive Stock Option; (b)
withhold cash paid or payable or shares of Common Stock from the shares of
Common Stock issued or otherwise issuable to the Participant in connection with
an Incentive Award; or (c) require the Participant promptly to remit the amount
of such withholding to the Company before taking any action, including issuing
any shares of Common Stock or paying any cash amounts, with respect to an
Incentive Award. Shares of Common Stock issued or otherwise issuable to the
Participant in connection with an Incentive Award that gives rise to the tax
withholding obligation that are withheld for purposes of satisfying the
Participant’s withholding or employment-related tax obligation, will be valued
at their Fair Market Value on the Tax Date. When withholding for taxes is
effected under the Plan, it will be withheld only up to the minimum required tax
withholding rates or such other rate that will not trigger a negative accounting
impact on the Company.

 

15.2     Special Rules. The Committee may, in its sole discretion and upon terms
and conditions established by the Committee, permit or require a Participant to
satisfy, in whole or in part, any withholding or employment-related tax
obligation described in Section 15.1 of the Plan by withholding shares of Common
Stock underlying an Incentive Award, by electing to tender, or by attestation as
to ownership of, Previously Acquired Shares, by delivery of a Broker Exercise
Notice or a combination of such methods. For purposes of satisfying a
Participant’s withholding or employment-related tax obligation, shares of Common
Stock withheld by the Company or Previously Acquired Shares tendered or covered
by an attestation will be valued at their Fair Market Value on the Tax Date.  

 

 
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16.     Change in Control.

 

16.1     A “Change in Control” will be deemed to have occurred if the event set
forth in any one of the following paragraphs will have occurred:

 

(a)     the sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company;

 

(b)     the approval by the stockholders of the Company of any plan or proposal
for the liquidation or dissolution of the Company;

 

 

(c)     a merger or consolidation to which the Company is a party if the
stockholders of the Company immediately prior to the effective date of such
merger or consolidation have “beneficial ownership” (as defined in Rule 13d-3
under the Exchange Act), immediately following the effective date of such merger
or consolidation, of securities of the surviving corporation representing less
than 50% of the combined voting power of the surviving corporation’s then
outstanding securities ordinarily having the right to vote at elections of
directors; or

 

(d)     any person, other than (i) the Company, (ii) any trustee or other
fiduciary holding securities under any employee benefit plan of the Company,
(iii) Randolph L. Marten or any of his affiliates, or (iv) Christine K. Marten
or any of her affiliates, becomes after the effective date of the Plan the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 50% or more of the combined voting power of the Company’s
outstanding securities ordinarily having the right to vote at elections of
directors; or

 

(e)     the Continuity Directors cease for any reason to constitute at least a
majority of the Board.

 

 
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For purposes of this Section 16, “Continuity Directors” of the Company will mean
any individuals who are members of the Board on the Effective Date and any
individual who subsequently becomes a member of the Board whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the Continuity Directors (either by specific vote or by
approval of the Company’s proxy statement in which such individual is named as a
nominee for director without objection to such nomination).

 

16.2     Acceleration of Vesting. Without limiting the authority of the
Committee under Sections 3.2 and 4.3 of the Plan, if a Change in Control of the
Company occurs, then, unless otherwise provided by the Committee in its sole
discretion either in the Incentive Award Agreement at the time of grant or at
any time after the grant of an Incentive Award:

 

(a)     all Options and Stock Appreciation Rights will become immediately
exercisable in full and will remain exercisable in accordance with their terms;

 

(b)     all outstanding Restricted Stock Awards will become immediately fully
vested and non-forfeitable;

 

(c)     all restrictions and vesting requirements applicable to any Incentive
Award based solely on the continued service of the Participant will terminate;
and

 

(d)     all Incentive Awards the vesting or payment of which are based on
specified performance objectives will vest and/or continue to vest in the manner
determined by the Committee and set forth in the agreement evidencing such
Incentive Award; provided, however, that no Incentive Award that provides for a
deferral of compensation within the meaning of Section 409A of the Code will be
cashed out upon the occurrence of a Change in Control unless the event or
circumstances constituting the Change in Control also constitute a “change in
the ownership” of the Company, a “change in the effective control” of the
Company or a “change in the ownership of a substantial portion of the assets” of
the Company, in each case as determined under Section 409A of the Code.

 

The treatment of any other Incentive Awards in the event of a Change in Control
will be as determined by the Committee in connection with the grant thereof, as
reflected in the applicable Incentive Award Agreement.

 

16.3     Alternative Treatment of Incentive Awards. In connection with a Change
in Control, the Committee in its sole discretion, either in an Incentive Award
Agreement at the time of grant of an Incentive Award or at any time after the
grant of such an Incentive Award, may determine that any or all outstanding
Incentive Awards granted under the Plan, whether or not exercisable or vested,
as the case may be, will be canceled and terminated and that in connection with
such cancellation and termination the holder of such Incentive Award will
receive for each share of Common Stock subject to such Incentive Award a cash
payment (or the delivery of shares of stock, other securities or a combination
of cash, stock and securities with a fair market value (as determined by the
Committee in good faith) equivalent to such cash payment) equal to the
difference, if any, between the consideration received by stockholders of the
Company in respect of a share of Common Stock in connection with such Change in
Control and the purchase price per share, if any, under the Incentive Award,
multiplied by the number of shares of Common Stock subject to such Incentive
Award (or in which such Incentive Award is denominated); provided that if such
product is zero ($0) or less or to the extent that the Incentive Award is not
then exercisable, the Incentive Award may be canceled and terminated without
payment therefor; provided, however, that no Incentive Award that provides for a
deferral of compensation within the meaning of Section 409A of the Code will be
cashed out upon the occurrence of a Change in Control unless payment was
specified in the Incentive Award Agreement at the time of grant and the event or
circumstances constituting the Change in Control also constitute a “change in
the ownership” of the Company, a “change in the effective control” of the
Company or a “change in the ownership of a substantial portion of the assets” of
the Company, in each case as determined under Section 409A of the Code. If any
portion of the consideration pursuant to a Change in Control may be received by
holders of shares of Common Stock on a contingent or delayed basis, the
Committee may, in its sole discretion, determine the fair market value per share
of such consideration as of the time of the Change in Control on the basis of
the Committee’s good faith estimate of the present value of the probable future
payment of such consideration. Notwithstanding the foregoing, any shares of
Common Stock issued pursuant to an Incentive Award that immediately prior to the
effectiveness of the Change in Control are subject to no further restrictions
pursuant to the Plan or an Incentive Award Agreement (other than pursuant to the
securities laws) will be deemed to be outstanding shares of Common Stock and
receive the same consideration as other outstanding shares of Common Stock in
connection with the Change in Control

 

 
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16.4     Limitation on Change in Control Payments. Notwithstanding anything in
Section 16.2 or 16.3 of the Plan to the contrary, if, with respect to a
Participant, the acceleration of the vesting of an Incentive Award as provided
in Section 16.2 of the Plan or the payment of cash in exchange for all or part
of an Incentive Award as provided in Section 16.3 of the Plan (which
acceleration or payment could be deemed a “payment” within the meaning of
Section 280G(b)(2) of the Code), together with any other “payments” that such
Participant has the right to receive from the Company or any corporation that is
a member of an “affiliated group” (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the Company is a member,
would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
Code), then the “payments” to such Participant pursuant to Section 16.2 or 16.3
of the Plan will be reduced (or acceleration of vesting eliminated) to the
largest amount as will result in no portion of such “payments” being subject to
the excise tax imposed by Section 4999 of the Code; provided, that such
reduction will be made only if the aggregate amount of the payments after such
reduction exceeds the difference between (a) the amount of such payments absent
such reduction minus (b) the aggregate amount of the excise tax imposed under
Section 4999 of the Code attributable to any such excess parachute payments; and
provided further that such payments will be reduced (or acceleration of vesting
eliminated) in the following order: (i) options with an exercise price above
fair market value that have a positive value for purposes of Section 280G of the
Code, (ii) pro rata among Incentive Awards that constitute deferred compensation
under Section 409A of the Code, and (iii) finally, among the Incentive Awards
that are not subject to Section 409A of the Code. Notwithstanding the foregoing
sentence, if a Participant is subject to a separate agreement with the Company
or an Affiliate or Subsidiary that expressly addresses the potential application
of Section 280G or 4999 of the Code, then this Section 16.4 will not apply and
any “payments” to a Participant pursuant to Section 16.2 or 16.3 of the Plan
will be treated as “payments” arising under such separate agreement; provided
such separate agreement may not modify the time or form of payments under any
Incentive Award that constitutes deferred compensation under Section 409A of the
Code if the modification would cause such Incentive Award to become subject to
the adverse tax consequences of Section 409A of the Code.

 

17.     Rights of Eligible Recipients and Participants; Transferability.

 

17.1     Employment or Service. Nothing in the Plan or an Incentive Award
Agreement will interfere with or limit in any way the right of the Company or
any Subsidiary to terminate the employment or service of any Eligible Recipient
or Participant at any time, nor confer upon any Eligible Recipient or
Participant any right to continue in the employment or other service with the
Company or any Subsidiary.

 

17.2     No Rights to Awards. No Participant or Eligible Individual will have
any claim to be granted any Incentive Award under the Plan.

 

17.3     Rights as a Stockholder. As a holder of Incentive Awards (other than
Restricted Stock Awards), a Participant will have no rights as a stockholder
unless and until such Incentive Awards are exercised for, settled or paid in the
form of, shares of Common Stock and the Participant becomes the holder of record
of such shares.

 

17.4     Restrictions on Transfer.

 

(a)     Except pursuant to testamentary will or the laws of descent and
distribution or as otherwise expressly permitted by subsections (b) and (c)
below, no right or interest of any Participant in an Incentive Award prior to
the exercise (in the case of Options or Stock Appreciation Rights) or vesting,
settlement or issuance (in the case of other Incentive Awards) of such Incentive
Award will be assignable or transferable, or subjected to any lien, during the
lifetime of the Participant, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise.

 

(b)     A Participant will be entitled to designate a beneficiary to receive an
Incentive Award upon such Participant’s death, and in the event of such
Participant’s death, payment of any amounts due under the Plan will be made to,
and exercise of any Options or Stock Appreciation Rights (to the extent
permitted pursuant to Section 14 of the Plan) may be made by, such beneficiary.
If a deceased Participant has failed to designate a beneficiary, or if a
beneficiary designated by the Participant fails to survive the Participant,
payment of any amounts due under the Plan will be made to, and exercise of any
Options or Stock Appreciation Rights (to the extent permitted pursuant to
Section 14 of the Plan) may be made by, the Participant’s legal representatives,
heirs and legatees. If a deceased Participant has designated a beneficiary and
such beneficiary survives the Participant but dies before complete payment of
all amounts due under the Plan or exercise of all exercisable Options or Stock
Appreciation Rights, then such payments will be made to, and the exercise of
such Options or Stock Appreciation Rights may be made by, the legal
representatives, heirs and legatees of the beneficiary.

 

 
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(c)     Upon a Participant’s request, the Committee may, in its sole discretion,
permit a transfer of all or a portion of a Non-Statutory Stock Option, other
than for value, to such Participant’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, any person sharing such Participant’s household (other than a
tenant or employee), a trust in which any of the foregoing have more than fifty
percent of the beneficial interests, a foundation in which any of the foregoing
(or the Participant) control the management of assets, and any other entity in
which these persons (or the Participant) own more than 50% of the voting
interests. Any permitted transferee will remain subject to all the terms and
conditions applicable to the Participant prior to the transfer. A permitted
transfer may be conditioned upon such requirements as the Committee may, in its
sole discretion, determine, including, execution and/or delivery of appropriate
acknowledgements, opinion of counsel, or other documents by the transferee.

 

17.5     Non-Exclusivity of the Plan. Nothing contained in the Plan is intended
to modify or rescind any previously approved compensation plans or programs of
the Company or create any limitations on the power or authority of the Board to
adopt such additional or other compensation arrangements as the Board may deem
necessary or desirable.

 

18.     Securities Law and Other Restrictions.

 

Notwithstanding any other provision of the Plan or any Incentive Award Agreement
entered into pursuant to the Plan, the obligation of the Company to issue any
shares of Common Stock under the Plan or settle Incentive Awards in shares of
Common Stock or other consideration will be subject to all applicable law, rules
and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding the generality of the foregoing and notwithstanding
any other provision of the Plan or any Incentive Award Agreement entered into
pursuant to the Plan, the Company will not be required to issue any shares of
Common Stock under the Plan, and a Participant may not sell, assign, transfer or
otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards
granted under the Plan, unless (a) there is in effect with respect to such
shares a registration statement under the Securities Act and any applicable
securities laws of a state or foreign jurisdiction or an exemption from such
registration under the Securities Act and applicable state or foreign securities
laws, and (b) there has been obtained any other consent, approval or permit from
any other U.S. or foreign regulatory body which the Committee, in its sole
discretion, deems necessary or advisable. The Company will be under no
obligation to register for sale under the Securities Act any of the shares of
Common Stock to be offered or sold under the Plan. The Company may condition
such issuance, sale or transfer upon the receipt of any representations or
agreements from the parties involved, and the placement of any legends on
certificates representing shares of Common Stock, as may be deemed necessary or
advisable by the Company in order to comply with such securities law or other
restrictions.

 

19.     Deferred Compensation; Compliance with Section 409A.

 

19.1     General. It is intended that all Incentive Awards issued under the Plan
be administered in a manner that will comply with the requirements of Section
409A of the Code, or the requirements of an exception to Section 409A of the
Code and the Incentive Award Agreements and the Plan will be construed and
administered in a manner that is consistent with and give effect to such intent.
The Committee is authorized to adopt rules or regulations deemed necessary or
appropriate to qualify for an exception from or to comply with the requirements
of Section 409A of the Code (including any transition or grandfather rules
relating thereto).

 

 
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19.2     Compliance with 409A. Notwithstanding anything in this Section 19 or
Section 20 to the contrary, with respect to any Incentive Award subject to
Section 409A of the Code, no amendment to or payment under such Incentive Award
will be made except and only to the extent permitted under Section 409A of the
Code. If any amount is payable with respect to an Incentive Award that is
subject to Section 409A of the Code as a result of the Participant’s “separation
from service” at such time the Participant is a “specified employee” within the
meaning of Section 409A of the Code, then no payment will be made, except as
permitted under Section 409A of the Code, prior to the first business day after
the earlier of (i) the date that is six months after the Participant’s
separation from service or (ii) the Participant’s death.

 

20.     Amendment, Modification and Termination.

 

20.1     Generally. Subject to other subsections of this Section 20 and Section
3.4 of the Plan, the Board at any time may suspend or terminate the Plan (or any
portion thereof) or terminate any outstanding Incentive Award and the Committee,
at any time and from time to time, may amend the Plan or amend or modify the
terms of an outstanding Incentive Award and Incentive Award Agreement. The
Committee’s power and authority to amend or modify the terms of an outstanding
Incentive Award and Incentive Award Agreement includes the authority to modify
the number of shares of Common Stock or other terms and conditions of an
Incentive Award, extend the term of an Incentive Award, accelerate the
exercisability or vesting or otherwise terminate any restrictions relating to an
Incentive Award, accept the surrender of any outstanding Incentive Award or, to
the extent not previously exercised, settled or vested, authorize the grant of
new Incentive Awards in substitution for surrendered Incentive Awards; provided,
however that the amended or modified terms are permitted by the Plan as then in
effect and that any Participant adversely affected by such amended or modified
terms has consented to such amendment or modification.

 

20.2     Stockholder Approval. No amendments to the Plan will be effective
without approval of the Company’s stockholders if: (a) stockholder approval of
the amendment is then required pursuant to Section 422 of the Code, the rules of
the primary stock exchange or stock market on which the Common Stock is then
traded, applicable U.S. state corporate laws or regulations, applicable U.S.
federal laws or regulations, and the applicable laws of any foreign country or
jurisdiction where Incentive Awards are, or will be, granted under the Plan; or
(b) such amendment would: (i) modify Section 3.4 of the Plan; (ii) materially
increase benefits accruing to Participants; (iii) increase the aggregate number
of shares of Common Stock issued or issuable under the Plan; (iv) increase any
limitation set forth in the Plan on the number of shares of Common Stock which
may be issued or the aggregate value of Incentive Awards which may be made, in
respect of any type of Incentive Award; (v) modify the eligibility requirements
for Participants in the Plan; or (vi) reduce the minimum exercise price as set
forth in Sections 6.3 and 7.3 of the Plan.

 

20.3     Incentive Awards Previously Granted. Notwithstanding any other
provision of the Plan to the contrary, no termination, suspension or amendment
of the Plan may adversely affect any outstanding Incentive Award without the
consent of the affected Participant; provided, however, that this sentence will
not impair the right of the Committee to take whatever action it deems
appropriate under Sections 3.2, 4.3, 13, 16, 19 or 20.4 of the Plan.

 

 
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20.4     Amendments to Conform to Law. Notwithstanding any other provision of
the Plan to the contrary, the Committee may amend the Plan or an Incentive Award
Agreement, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or an Incentive Award Agreement
to any present or future law relating to plans of this or similar nature, and to
the administrative regulations and rulings promulgated thereunder. By accepting
an Incentive Award under the Plan, a Participant agrees to any amendment made
pursuant to this Section 20.4 to any Incentive Award granted under the Plan
without further consideration or action.

 

21.     Effective Date and Duration of the Plan.

 

The Plan will be effective as of the Effective Date and will terminate at
midnight May 12, 2025, and may be terminated prior to such time by Board action.
No Incentive Award will be granted after termination of the Plan but Incentive
Awards outstanding upon termination of the Plan will remain outstanding in
accordance with their applicable terms and conditions and the terms and
conditions of the Plan.

 

22.     Miscellaneous.

 

22.1     Usage. In the Plan, except where otherwise indicated by clear contrary
intention, (a) any masculine term used in the Plan also will include the
feminine, (b) the plural will include the singular, and the singular will
include the plural, (c) “including” (and with correlative meaning “include”)
means including without limiting the generality of any description preceding
such term, and (d) “or” is used in the inclusive sense of “and/or”.

 

22.2     Unfunded Plan. Participants will have no right, title or interest
whatsoever in or to any investments that the Company or its Subsidiaries 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, will create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company and any Participant, beneficiary, legal representative, or any other
individual. To the extent that any individual acquires a right to receive
payments from the Company or any Subsidiary under the Plan, such right will be
no greater than the right of an unsecured general creditor of the Company or the
Subsidiary, as the case may be. All payments to be made hereunder will be paid
from the general funds of the Company or the Subsidiary, as the case may be, and
no special or separate fund will be established and no segregation of assets
will be made to assure payment of such amounts except as expressly set forth in
the Plan.

 

22.3     Relationship to Other Benefits. No payment under the Plan will be taken
into account in determining any benefits under any pension, retirement, savings,
profit sharing, group insurance, welfare, or benefit plan of the Company or any
Subsidiary unless provided otherwise in such plan.

 

22.4     Fractional Shares. No fractional shares of Common Stock will be issued
or delivered under the Plan or any Incentive Award. The Committee will determine
whether cash, other Incentive Awards or other property will be issued or paid in
lieu of fractional shares of Common Stock or whether such fractional shares of
Common Stock or any rights thereto will be forfeited or otherwise eliminated by
rounding up or down.

 

22.5     Governing Law; Venue. Except to the extent expressly provided in the
Plan or in connection with other matters of corporate governance and authority
(all of which will be governed by the laws of the Company’s jurisdiction of
incorporation), the validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan
will be governed by and construed exclusively in accordance with the laws of the
State of Wisconsin, notwithstanding the conflicts of laws principles of any
jurisdictions. Unless otherwise provided in an Incentive Award Agreement,
recipients of an Incentive Award under the Plan are deemed to submit to the
exclusive jurisdiction and venue of the federal or state courts of the State of
Wisconsin to resolve any and all issues that may arise out of or relate to the
Plan or any related Incentive Award Agreement.

 

 
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22.6     Successors. All obligations of the Company under the Plan with respect
to Incentive Awards granted hereunder will 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 or assets of the Company.

 

22.7     Construction. Wherever possible, each provision of the Plan and any
Incentive Award Agreement evidencing an Incentive Award granted under the Plan
will be interpreted so that it is valid under the applicable law. If any
provision of the Plan or any Incentive Award Agreement evidencing an Incentive
Award granted under the Plan is to any extent invalid under the applicable law,
that provision will still be effective to the extent it remains valid. The
remainder of the Plan and the Incentive Award Agreement also will continue to be
valid, and the entire Plan and Incentive Award Agreement will continue to be
valid in other jurisdictions.

 

22.8     Delivery and Execution of Electronic Documents. To the extent permitted
by applicable law, the Company may: (a) deliver by email or other electronic
means (including posting on a Web site maintained by the Company or by a third
party under contract with the Company) all documents relating to the Plan or any
Incentive Award hereunder (including prospectuses required by the Securities and
Exchange Commission) and all other documents that the Company is required to
deliver to its security holders (including annual reports and proxy statements),
and (b) permit Participants to use electronic, internet or other non-paper means
to execute applicable Plan documents (including Incentive Award Agreements) and
take other actions under the Plan in a manner prescribed by the Committee.

 

22.9     No Representations or Warranties Regarding Tax Effect. Notwithstanding
any provision of the Plan to the contrary, the Company, its Subsidiaries, the
Board and the Committee neither represent nor warrant the tax treatment under
any federal, state, provincial, local, foreign or other laws of any Incentive
Award granted or amounts paid to any Participant under this Plan, including when
and to what extent such Incentive Award or amounts may be subject to tax,
penalties and interest.