Exhibit 10.2

 

FEATHERLITE, INC.

2004 EQUITY INCENTIVE PLAN

 

SECTION 1.

DEFINITIONS

 

As used herein, the following terms shall have the meanings indicated below:

 

(a) “Affiliates” shall mean a Parent or Subsidiary of the Company.

 

(b) “Committee” shall mean a Committee of two or more directors who shall be
appointed by and serve at the pleasure of the Board. If the Company’s securities
are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, then, to the extent necessary for compliance with Rule 16b-3, or any
successor provision, each of the members of the Committee shall be a
“non-employee director.” Solely for purposes of this Section 1(a), “non-employee
director” shall have the same meaning as set forth in Rule 16b-3, or any
successor provision, as then in effect, of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.

 

(c) The “Company” shall mean Featherlite, Inc., a Minnesota corporation.

 

(d) “Fair Market Value” as of any date shall mean (i) if such stock is listed on
the Nasdaq National Market, Nasdaq SmallCap Market, or an established stock
exchange, the price of such stock at the close of the regular trading session of
such market or exchange on such date, as reported by The Wall Street Journal or
a comparable reporting service, or, if no sale of such stock shall have occurred
on such date, on the next preceding day on which there was a sale of stock; (ii)
if such stock is not so listed on the Nasdaq National Market, Nasdaq SmallCap
Market, or an established stock exchange, the average of the closing “bid” and
“asked” prices quoted by the OTC Bulletin Board, the National Quotation Bureau,
or any comparable reporting service on such date or, if there are no quoted
“bid” and “asked” prices on such date, on the next preceding date for which
there are such quotes; or (iii) if such stock is not publicly traded as of such
date, the per share value as determined by the Board, or the Committee, in its
sole discretion by applying principles of valuation with respect to the
Company’s Common Stock.

 

(e) The “Internal Revenue Code” is the Internal Revenue Code of 1986, as amended
from time to time.

 

(f) The “Participant” means (i) an employee of the Company or any Subsidiary to
whom an incentive stock option has been granted pursuant to Section 9, (ii) a
consultant or advisor to or director, employee or officer of the Company or any
Subsidiary to whom a nonqualified stock option has been granted pursuant to
Section 10, or (iii) a consultant or advisor to, or director, employee or
officer of the Company or any Subsidiary to whom a stock award has been granted
pursuant to Section 17.

 

(g) “Parent” shall mean any corporation which owns, directly or indirectly in an
unbroken chain, fifty percent (50%) or more of the total voting power of the
Company’s outstanding stock.

 

(h) The “Plan” means the Featherlite, Inc. 2004 Equity Incentive Plan, as
amended from time to time, including the form of Option and Award Agreements as
they may be modified by the Board from time to time.

 

(i) “Stock” shall mean Common Stock of the Company (subject to adjustment as
described in Section 12) reserved for incentive and nonqualified stock options
and stock awards pursuant to this Plan.

 

(j) A “Subsidiary” shall mean any corporation of which fifty percent (50%) or
more of the total voting power of outstanding stock is owned, directly or
indirectly in an unbroken chain, by the Company.

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SECTION 2.

PURPOSE

 

The purpose of the Plan is to promote the success of the Company and its
Subsidiaries by facilitating the employment and retention of competent personnel
and by furnishing incentive to officers, directors, employees, consultants, and
advisors upon whose efforts the success of the Company and its Subsidiaries will
depend to a large degree.

 

It is the intention of the Company to carry out the Plan through the granting of
stock options which will qualify as “incentive stock options” under the
provisions of Section 422 of the Internal Revenue Code, or any successor
provision, pursuant to Section 9 of this Plan, through the granting of
“nonqualified” stock options pursuant to Section 10 of this Plan, and through
the granting of stock awards pursuant to Section 17 of this Plan. Adoption of
this Plan shall be and is expressly subject to the condition of approval by the
shareholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board of Directors.

 

SECTION 3.

EFFECTIVE DATE OF PLAN

 

The effective date of the Plan is the date it is adopted by the Board of
Directors, subject to approval by the shareholders of the Company as required in
Section 2.

 

SECTION 4.

ADMINISTRATION

 

The Plan shall be administered by the Board of Directors of the Company
(hereinafter referred to as the “Board”) or by a Committee which may be
appointed by the Board from time to time to administer the Plan (collectively
referred to as the “Administrator”). The Administrator shall have all of the
powers vested in it under the provisions of the Plan, including but not limited
to exclusive authority (where applicable and within the limitations described
herein) to determine, in its sole discretion, whether an incentive stock option,
nonqualified stock option or stock award shall be granted, the individuals to
whom, and the time or times at which, options and awards shall be granted, the
number of shares subject to each option or award, the option price, and terms
and conditions of each option or award. The Administrator shall have full power
and authority to administer and interpret the Plan, to make and amend rules,
regulations and guidelines for administering the Plan, to prescribe the form and
conditions of the respective stock option and stock award agreements (which may
vary from Participant to Participant) evidencing each option or award and to
make all other determinations necessary or advisable for the administration of
the Plan. The Administrator’s interpretation of the Plan, and all actions taken
and determinations made by the Administrator pursuant to the power vested in it
hereunder, shall be conclusive and binding on all parties concerned.

 

No member of the Board or the Committee shall be liable for any action taken or
determination made in good faith in connection with the administration of the
Plan. In the event the Board appoints a Committee as provided hereunder, any
action of the Committee with respect to the administration of the Plan shall be
taken pursuant to a majority vote of the Committee members or pursuant to the
written resolution of all Committee members.

 

SECTION 5.

PARTICIPANTS

 

The Administrator shall from time to time, at its discretion and without
approval of the shareholders, designate those employees to whom incentive stock
options shall be granted pursuant to Section 9 of the Plan; those employees,
officers, directors, consultants and advisors of the Company or of any
Subsidiary to whom nonqualified stock options shall be granted pursuant to
Section 10 of the Plan; and those employees, officers, directors, consultants
and advisors of the Company or any Subsidiary to whom stock awards shall be
granted pursuant to Section 17 of the Plan; provided, however, that consultants
or advisors shall not be eligible to receive stock options or stock awards
hereunder unless such consultant or advisor renders bona fide services to the
Company or Subsidiary and such services are not in connection with the offer or
sale of securities in a capital raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities. The
Administrator may grant additional incentive stock options, nonqualified stock
options and stock awards under this Plan to some or all Participants then
holding options or awards or may grant options and awards solely or partially to
new Participants. In designating Participants, the Administrator shall also
determine the number of shares to be optioned or awarded to each such
Participant. The Administrator may from time to time designate individuals as
being ineligible to participate in the Plan.

 

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SECTION 6.

STOCK

 

The Stock to be optioned or awarded under this Plan shall consist of authorized
but unissued shares of Stock.                                         
(            ) shares of Stock shall be reserved and available for stock options
and stock awards under the Plan; provided, however, that the total number of
shares of Stock reserved for options and stock awards under this Plan shall be
subject to adjustment as provided in Section 12 of the Plan. In the event (i)
any portion of an outstanding stock option or stock award under the Plan for any
reason expires, (ii) any portion of an outstanding stock option is terminated
prior to the exercise of such option, or (iii) any portion of a stock award is
terminated prior to the lapsing of any risks of forfeiture on such stock, the
shares of Stock allocable to such portion of the option or award shall continue
to be reserved for stock options and stock awards under the Plan and may be
optioned or awarded hereunder.

 

SECTION 7.

DURATION OF PLAN

 

Incentive stock options may be granted pursuant to the Plan from time to time
during a period of ten (10) years from the effective date as defined in Section
3. Nonqualified stock options and stock awards may be granted pursuant to the
Plan from time to time after the effective date of the Plan and until the Plan
is discontinued or terminated by the Board. Any incentive stock option granted
during such ten-year period and any nonqualified stock option or stock award
granted prior to the termination of the Plan by the Board shall remain in full
force and effect until the expiration of the option or award as specified in the
written stock option or stock award agreement and shall remain subject to the
terms and conditions of this Plan.

 

SECTION 8.

PAYMENT

 

Participants may pay for shares upon exercise of stock options granted pursuant
to this Plan with cash, personal check, certified check or, if approved by the
Administrator in its sole discretion, previously-owned shares of the Company’s
Common Stock valued at such Stock’s then Fair Market Value, or such other form
of payment as may be authorized by the Administrator. The Administrator may, in
its sole discretion, limit the forms of payment available to the Participant and
may exercise such discretion any time prior to the termination of the option
granted to the Participant or upon any exercise of the option by the
Participant. “Previously-owned shares” means shares of the Company’s Common
Stock which the Participant has owned for at least six (6) months prior to the
exercise of the stock option, or for such other period of time as may be
required by generally accepted accounting principles.

 

With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.

 

SECTION 9.

TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

 

Each incentive stock option granted pursuant to this Section 9 shall be
evidenced by a written stock option agreement (the “Option Agreement”). The
Option Agreement shall be in such form as may be approved from time to time by
the Administrator and may vary from Participant to Participant; provided,
however, that each Participant and each Option Agreement shall comply with and
be subject to the following terms and conditions:

 

  (a) Number of Shares and Option Price. The Option Agreement shall state the
total number of shares covered by the incentive stock option. To the extent
required to qualify the Option as an incentive stock option under Section 422 of
the Internal Revenue Code, or any successor provision, the option price per
share shall not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock per share on the date the Administrator grants the option;
provided, however, that if a Participant owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of its Parent or any Subsidiary, the option price per share of an
incentive stock option granted to such Participant shall not be less than one
hundred ten percent (110%) of the Fair Market Value of the Common Stock per
share on the date of the grant of the option. The Administrator shall have full
authority and discretion in establishing the option price and shall be fully
protected in so doing.

 

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  (b) Term and Exercisability of Incentive Stock Option. The term during which
any incentive stock option granted under the Plan may be exercised shall be
established in each case by the Administrator. To the extent required to qualify
the Option as an incentive stock option under Section 422 of the Internal
Revenue Code, or any successor provision, in no event shall any incentive stock
option be exercisable during a term of more than ten (10) years from the date on
which it is granted; provided, however, that if a Participant owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of its Parent or any Subsidiary, the
incentive stock option granted to such Participant shall be exercisable during a
term of not more than five (5) years from the date on which it is granted. The
Option Agreement shall state when the incentive stock option becomes exercisable
and shall also state the maximum term during which the option may be exercised.
In the event an incentive stock option is exercisable immediately, the manner of
exercise of the option in the event it is not exercised in full immediately
shall be specified in the Option Agreement. The Administrator may accelerate the
exercise date of any incentive stock option granted hereunder which is not
immediately exercisable as of the date of grant.

 

  (c) Withholding. The Company or its Subsidiary shall be entitled to withhold
and deduct from future wages of the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes
attributable to the Participant’s exercise of an incentive stock option or a
“disqualifying disposition” of shares acquired through the exercise of an
incentive stock option as defined in Code Section 421(b). In the event the
Participant is required under the Option Agreement to pay the Company or
Subsidiary, or make arrangements satisfactory to the Company or Subsidiary
respecting payment of, such withholding and employment-related taxes, the
Administrator may, in its discretion and pursuant to such rules as it may adopt,
permit the Participant to satisfy such obligation, in whole or in part, by
delivering shares of the Company’s Common Stock or by electing to have the
Company withhold shares of Common Stock otherwise issuable to the Participant
having a Fair Market Value equal to the minimum required tax withholding, based
on the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from the exercise of the incentive stock option or disqualifying
disposition. In no event may the Company or any Subsidiary withhold shares
having a Fair Market Value in excess of such statutory minimum required tax
withholding. The Participant’s election to have shares withheld for this purpose
shall be made on or before the date the option is exercised or, if later, the
date that the amount of tax to be withheld is determined under applicable tax
law. Such election shall be approved by the Administrator and otherwise comply
with such rules as the Administrator may adopt to assure compliance with Rule
16b-3, or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

 

  (d) Other Provisions. The Option Agreement authorized under this Section 9
shall contain such other provisions as the Administrator shall deem advisable.
Any such Option Agreement shall contain such limitations and restrictions upon
the exercise of the option as shall be necessary to ensure that such option will
be considered an “incentive stock option” as defined in Section 422 of the
Internal Revenue Code or to conform to any change therein.

 

SECTION 10.

TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

 

Each nonqualified stock option granted pursuant to this Section 10 shall be
evidenced by a written Option Agreement. The Option Agreement shall be in such
form as may be approved from time to time by the Administrator and may vary from
Participant to Participant; provided, however, that each Participant and each
Option Agreement shall comply with and be subject to the following terms and
conditions:

 

  (a) Number of Shares and Option Price. The Option Agreement shall state the
total number of shares covered by the nonqualified stock option. Unless
otherwise determined by the Administrator, the option price per share shall be
one hundred percent (100%) of the Fair Market Value of the Common Stock per
share on the date the Administrator grants the option; provided, however, that
the option price may not be less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock per share on the date of grant.

 

  (b) Term and Exercisability of Nonqualified Stock Option. The term during
which any nonqualified stock option granted under the Plan may be exercised
shall be established in each case by the Administrator. The Option Agreement
shall state when the nonqualified stock option becomes exercisable and shall
also state the maximum term during which the option may be exercised. In the
event a nonqualified stock option is

 

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exercisable immediately, the manner of exercise of the option in the event it is
not exercised in full immediately shall be specified in the Option Agreement.
The Administrator may accelerate the exercise date of any nonqualified stock
option granted hereunder which is not immediately exercisable as of the date of
grant.

 

  (c) Withholding. The Company or its Subsidiary shall be entitled to withhold
and deduct from future wages of the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes
attributable to the Participant’s exercise of a nonqualified stock option. In
the event the Participant is required under the Option Agreement to pay the
Company or Subsidiary, or make arrangements satisfactory to the Company or
Subsidiary respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its discretion and pursuant to such rules as it may
adopt, permit the Participant to satisfy such obligation, in whole or in part,
by delivering shares of the Company’s Common Stock or by electing to have the
Company or Subsidiary withhold shares of Common Stock otherwise issuable to the
Participant having a Fair Market Value equal to the minimum required tax
withholding, based on the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to the
supplemental income resulting from the exercise of the nonqualified stock
option. In no event may the Company or any Subsidiary withhold shares having a
Fair Market Value in excess of such statutory minimum required tax withholding.
The Participant’s election to have shares withheld for this purpose shall be
made on or before the date the option is exercised or, if later, the date that
the amount of tax to be withheld is determined under applicable tax law. Such
election shall be approved by the Administrator and otherwise comply with such
rules as the Administrator may adopt to assure compliance with Rule 16b-3, or
any successor provision, as then in effect, of the General Rules and Regulations
under the Securities Exchange Act of 1934, if applicable.

 

  (d) Other Provisions. The Option Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.

 

SECTION 11.

TRANSFER OF OPTIONS

 

No incentive stock option shall be transferable, in whole or in part, by the
Participant other than by will or by the laws of descent and distribution.
During the Participant’s lifetime, the incentive stock option may be exercised
only by the Participant. If the Participant shall attempt any transfer of any
incentive stock option granted under the Plan during the Participant’s lifetime,
such transfer shall be void and the incentive stock option, to the extent not
fully exercised, shall terminate.

 

No nonqualified stock option shall be transferred, except that the Administrator
may, in its sole discretion, permit the Participant to transfer any or all
nonqualified stock options to any member of the Participant’s “immediate family”
as such term is defined in Rule 16a-1(e) promulgated under the Securities
Exchange Act of 1934, or any successor provision, or to one or more trusts whose
beneficiaries are members of such Participant’s “immediate family” or
partnerships in which such family members are the only partners; provided,
however, that the Participant cannot receive any consideration for the transfer
and such transferred nonqualified stock option shall continue to be subject to
the same terms and conditions as were applicable to such nonqualified stock
option immediately prior to its transfer.

 

SECTION 12.

RECAPITALIZATION, SALE, MERGER, EXCHANGE OR LIQUIDATION

 

If, following adoption of this Plan, the Company effects an increase or decrease
in the number of shares of Common Stock in the form of a subdivision or
consolidation of shares, or the payment of a stock dividend, or effects any
other increase or decrease in the number of shares of Common Stock without
receipt of consideration by the Company, the number of shares of Option Stock
reserved under Section 6 hereof and the number of shares of Option Stock covered
by each outstanding option and stock award, and the price per share thereof,
shall be appropriately adjusted by the Board to reflect such change. Additional
shares which may be credited pursuant to such adjustment shall be subject to the
same restrictions as are applicable to the shares with respect to which the
adjustment relates.

 

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Unless otherwise provided in the Option or Award Agreement, in the event of an
acquisition of the Company through the sale of substantially all of the
Company’s assets and the consequent discontinuance of its business or through a
merger, consolidation, exchange, reorganization, reclassification, extraordinary
dividend, divestiture or liquidation of the Company (collectively referred to as
a “transaction”), the Board may provide for one or more of the following:

 

  (a) the equitable acceleration of the exercisability of any outstanding
options and the lapsing of the risks of forfeiture on any stock awards;

 

  (b) the complete termination of this Plan, the cancellation of outstanding
options not exercised prior to a date specified by the Board (which date shall
give Participants a reasonable period of time in which to exercise the options
prior to the effectiveness of such transaction), and the cancellation of any
stock awards for which the risks of forfeiture have not lapsed;

 

  (c) that Participants holding outstanding stock options shall receive, with
respect to each share of Stock subject to such options, as of the effective date
of any such transaction, cash in an amount equal to the excess of the Fair
Market Value of such Stock on the date immediately preceding the effective date
of such transaction over the option price per share of such options; provided
that the Board may, in lieu of such cash payment, distribute to such
Participants shares of stock of the Company or shares of stock of any
corporation succeeding the Company by reason of such transaction, such shares
having a value equal to the cash payment herein;

 

  (d) that Participants holding outstanding stock awards shall receive, with
respect to each share of Stock subject to such awards, as of the effective date
of any such transaction, cash in an amount equal to the Fair Market Value of
such Stock on the date immediately preceding the effective date of such
transaction; provided that the Board may, in lieu of such cash payment,
distribute to such Participants shares of stock of the Company or shares of
stock of any corporation succeeding the Company by reason of such transaction,
such shares having a value equal to the cash payment herein;

 

  (e) the continuance of the Plan with respect to the exercise of options which
were outstanding as of the date of adoption by the Board of such plan for such
transaction and provide to Participants holding such options the right to
exercise their respective options as to an equivalent number of shares of stock
of the corporation succeeding the Company by reason of such transaction; and

 

  (f) the continuance of the Plan with respect to stock awards for which the
risks of forfeiture have not lapsed as of the date of adoption by the Board of
such plan for such transaction and provide to Participants holding such awards
the right to receive an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction.

 

The Board may restrict the rights of or the applicability of this Section 12 to
the extent necessary to comply with Section 16(b) of the Securities Exchange Act
of 1934, the Internal Revenue Code or any other applicable law or regulation.
The grant of an option or stock award pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

 

SECTION 13.

INVESTMENT PURPOSE

 

No shares of Common Stock shall be issued pursuant to the Plan unless and until
there has been compliance, in the opinion of Company’s counsel, with all
applicable legal requirements, including without limitation, those relating to
securities laws and stock exchange listing requirements. As a condition to the
issuance of Stock to Participant, the Administrator may require Participant to
(i) represent that the shares of Stock are being acquired for investment and not
resale and to make such other representations as the Administrator shall deem
necessary or appropriate to qualify the issuance of the shares as exempt from
the Securities Act of 1933 and any other applicable securities laws, and (ii)
represent that Participant shall not dispose of the shares of Stock in violation
of the Securities Act of 1933 or any other applicable securities laws or any
company policies then in effect.

 

As a further condition to the grant of any stock option or the issuance of Stock
to Participant, Participant agrees to the following:

 

  (a) In the event the Company advises Participant that it plans an underwritten
public offering of its Common Stock in compliance with the Securities Act of
1933, as amended, and the underwriter(s) seek to impose restrictions under which
certain shareholders may not sell or contract to sell or grant any option to buy
or otherwise dispose

 

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of part or all of their stock purchase rights of the underlying Common Stock,
Participant will not, for a period not to exceed 180 days from the prospectus,
sell or contract to sell or grant an option to buy or otherwise dispose of any
stock option granted to Participant pursuant to the Plan or any of the
underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

 

  (b) In the event the Company makes any public offering of its securities and
determines in its sole discretion that it is necessary to reduce the number of
issued but unexercised stock purchase rights so as to comply with any state’s
securities or Blue Sky law limitations with respect thereto, the Board of
Directors of the Company shall have the right (i) to accelerate the
exercisability of any stock option and the date on which such option must be
exercised, provided that the Company gives Participant prior written notice of
such acceleration, and (ii) to cancel any options or portions thereof which
Participant does not exercise prior to or contemporaneously with such public
offering.

 

  (c) In the event of a transaction (as defined in Section 12 of the Plan),
Participant will comply with Rule 145 of the Securities Act of 1933 and any
other restrictions imposed under other applicable legal or accounting principles
if Participant is an “affiliate” (as defined in such applicable legal and
accounting principles) at the time of the transaction, and Participant will
execute any documents necessary to ensure compliance with such rules.

 

The Company reserves the right to place a legend on any stock certificate issued
upon the exercise of an option or upon the grant of a stock award pursuant to
the Plan to assure compliance with this Section 13.

 

SECTION 14.

RIGHTS AS A SHAREHOLDER

 

A Participant (or the Participant’s successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an incentive stock
option or nonqualified stock option until the date of the issuance of a stock
certificate evidencing such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is actually issued (except as otherwise provided in
Section 12 of the Plan).

 

SECTION 15.

AMENDMENT OF THE PLAN

 

The Board may from time to time, insofar as permitted by law, suspend or
discontinue the Plan or revise or amend it in any respect; provided, however,
that no such revision or amendment, except as is authorized in Section 12, shall
impair the terms and conditions of any stock option or stock award which is
outstanding on the date of such revision or amendment to the material detriment
of the Participant without the consent of the Participant. Notwithstanding the
foregoing, no such revision or amendment shall (i) increase the number of shares
subject to the Plan except as provided in Section 12 hereof, (ii) change the
designation of the class of employees eligible to receive stock options or stock
awards, (iii) decrease the price at which options may be granted, or (iv)
increase the benefits accruing to Participants under the Plan, without the
approval of the shareholders of the Company if such approval is required for
compliance with the requirements of any applicable law or regulation.
Furthermore, the Plan may not, without the approval of the shareholders, be
amended in any manner that will cause incentive stock options to fail to meet
the requirements of Section 422 of the Internal Revenue Code.

 

SECTION 16.

NO OBLIGATION TO EXERCISE OPTION

 

The granting of a stock option shall impose no obligation upon the Participant
to exercise such option. Further, the granting of a stock option or stock award
hereunder shall not impose upon the Company or any Subsidiary any obligation to
retain the Participant in its employ for any period.

 

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SECTION 17.

STOCK AWARDS

 

Each stock award granted pursuant to the Plan shall be evidenced by a written
stock award agreement (the “Stock Award Agreement”). The Stock Award Agreement
shall be in such form as may be approved from time to time by the Administrator
and may vary from Participant to Participant; provided, however, that each
Participant and each Stock Award Agreement shall comply with and be subject to
the following terms and conditions:

 

  (a) Number of Shares. The Stock Award Agreement shall state the total number
of shares of Stock covered by the stock award.

 

  (b) Risks of Forfeiture. The Stock Award Agreement shall set forth the risks
of forfeiture, if any, which shall apply to the shares of Stock covered by the
stock award, and shall specify the manner in which such risks of forfeiture
shall lapse. The Administrator may, in its sole discretion, modify the manner in
which such risks of forfeiture shall lapse but only with respect to those shares
of Stock which are restricted as of the effective date of the modification.

 

  (c) Issuance of Shares. The Company shall cause to be issued a stock
certificate representing such shares of Stock in the Participant’s name, and
shall deliver such certificate to the Participant; provided, however, that the
Company shall place a legend on such certificate describing the risks of
forfeiture and other transfer restrictions set forth in the Participant’s Stock
Award Agreement and providing for the cancellation and return of such
certificate if the shares of Stock subject to the stock award are forfeited.

 

  (d) Rights as Shareholder. If the Participant’s stock award is subject to any
risks of forfeiture, this Section 17(d) shall apply. Until such risks of
forfeiture have lapsed or the shares subject to such stock award have been
forfeited, the Participant shall be entitled to vote the shares of Stock
represented by such stock certificates and shall receive all dividends
attributable to such shares, but the Participant shall not have any other rights
as a shareholder with respect to such shares.

 

  (e) Withholding Taxes. The Company or its Subsidiary shall be entitled to
withhold and deduct from future wages of the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related
taxes attributable to the Participant’s stock award. In the event the
Participant is required under the Stock Award Agreement to pay the Company or
Subsidiary, or make arrangements satisfactory to the Company or Subsidiary
respecting payment of, such withholding and employment-related taxes, the
Administrator may, in its discretion and pursuant to such rules as it may adopt,
permit the Participant to satisfy such obligations, in whole or in part, by
delivering shares of Common Stock, including shares of Stock received pursuant
to a stock award on which the risks of forfeiture have lapsed. Such shares shall
have a Fair Market Value equal to the minimum required tax withholding, based on
the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from such stock award. In no event may the Participant deliver shares
having a Fair Market Value in excess of such statutory minimum required tax
withholding. The Participant’s election to deliver shares of Common Stock for
this purpose shall be made on or before the date that the amount of tax to be
withheld is determined under applicable tax law. Such election shall be approved
by the Administrator and otherwise comply with such rules as the Administrator
may adopt to assure compliance with Rule 16b-3, or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities
Exchange Act of 1934, if applicable.

 

  (f) Nontransferability. If the Participant’s stock award is subject to any
risks of forfeiture, this Section 17(f) shall apply. No such stock award shall
be transferable, in whole or in part, by the Participant, other than by will or
by the laws of descent and distribution, prior to the date the risks of
forfeiture described in the Stock Award Agreement have lapsed. If the
Participant shall attempt any transfer of such stock award granted under the
Plan prior to such date, such transfer shall be void and the stock award shall
terminate.

 

  (g) Other Provisions. The Stock Award Agreement authorized under this Section
17 shall contain such other provisions as the Administrator shall deem
advisable.

 

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