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Exhibit 10.1

 
EMPLOYMENT AGREEMENT
 
 
This Employment Agreement (“Agreement”), dated as of November 3, 2009 is by and
between M. Philip Romney (“Executive”) and SeaBright Insurance Company, an
Illinois domiciled insurance company (“Employer”), a wholly owned subsidiary of
SeaBright Insurance Holdings, Inc., a Delaware corporation (“Holdings”) and is
effective retroactively to October 31, 2004.
 
WHEREAS, Employer hired Executive on October 31, 2004, as Vice President-
Finance of Employer and Principal Accounting Officer of Employer;
 
WHEREAS Executive continues in his position of Vice President- Finance and
Principal Accounting Officer of Employer without change or interruption; and
 
WHEREAS, Executive has requested to add the terms and conditions of this
Agreement to his existing offer letter terms with Employer and Employer is
willing to accede to this request;
 
NOW THEREFORE, in consideration of the foregoing recitals, which shall
constitute a part of this Agreement, and of the mutual promises contained
herein, and intending to be legally bound, the parties agree as follows:
 
1.             PERIOD OF EMPLOYMENT.  Employer has employed Executive from
October 31, 2004 to render services to Holdings as a Vice President-Finance and
Principal Accounting Officer of Employer for the period (the “Period of
Employment”) commencing on October 31, 2004, the effective date of this
Agreement, and ending on the date upon which the Period of Employment is
terminated in accordance with Section 4, to render services to Employer in the
position of Vice President-Finance and Principal Accounting Officer, with the
duties and responsibilities described in Section 2.
 
2.             POSITION AND RESPONSIBILITIES.
 
(a)           Position.  Executive accepts employment with Employer as Vice
President- Finance and Principal Accounting Officer and shall perform all
services appropriate to those positions, as well as such other services as may
be assigned by Employer.  Executive shall devote his best efforts and full-time
attention to the performance of his duties.  Executive shall be subject to the
direction of Employer, which shall retain full control of the means and methods
by which he performs the above services and of the place(s) at which all
services are rendered.  Executive shall be expected to travel if necessary or
advisable in order to meet the obligations of his position.
 
(b)           Other Activity.  Except upon the prior written consent of
Employer, Executive (during the Period of Employment) shall not (i) accept any
other employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is competitive with Employer, creates a conflict of interest
with Employer, or otherwise interferes with the business of Employer or any
Affiliate (and shall immediately cease any such ongoing activity that becomes so
competitive, begins to create such a conflict or begins to interfere with the
business of Employer or any Affiliate).  An “Affiliate” shall mean any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with Employer.
 
 
 

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3.             COMPENSATION AND BENEFITS.
 
(a)           Salary.  In consideration of the services to be rendered under
this Agreement, Employer shall pay Executive per year (“Base Salary”) of
$155,000 as of October 31, 2004, adjusted on April 1, 2005 to $159,643 for the
period April 1, 2005 through March 31, 2006; and $167,625 for the period April
1, 2006 through March 31, 2007; and $187,625 for the period April 1, 2007
through March 31, 2008; and $196,000 for the period April 1, 2008 through March
31, 2009; and $200,900 per year thereafter, payable in regular installments in
accordance with Employer’s general payroll policies for salaried employees, in
effect from time to time.  All compensation and comparable payments to be paid
to Executive under this Agreement shall be less all applicable withholdings
required by law.  Executive’s Base Salary will be reviewed for market and
performance adjustments within ninety (90) days of the beginning of each
calendar year during the Period of Employment by Employer’s or Holdings’ Board
of Directors (the “Board”) and may be adjusted after such review in the Board’s
sole discretion.
 
(b)           Bonus.  Executive will be eligible to receive an annual bonus in a
target amount equal to 40% of his Base Salary for each calendar year during the
Period of Employment based upon achievement by Executive and achievement by
Employer of performance criteria and other goals established by the Board (after
consultation with Employer) on an annual basis prior to the commencement of each
calendar year or as soon as reasonably practicable thereafter.  The bonus
payable in respect of any given year during the Period of Employment shall be
paid within thirty (30) days following the delivery of Employer’s annual audited
statutory financial statements for such year.  Executive must be employed by
Employer on the last day of the calendar year for which any bonus relates in
order to receive any such bonus hereunder.  The target amount of Executive’s
bonus as set forth above will be reviewed for market and performance adjustments
within sixty-five (65) days of the beginning of each calendar year during the
Period of Employment by the Board and may be adjusted after such review in the
Board’s sole discretion.
 
(c)           Benefits.  Executive shall be entitled to vacation leave in
accordance with Employer’s standard policies for salaried employees, in effect
from time to time.  As Executive becomes eligible, he shall have the right to
participate in and to receive benefits from all present and future benefit plans
specified in Employer’s policies and generally made available to salaried
employees of Employer from time to time.  The amount and extent of benefits to
which Executive is entitled shall be governed by the specific benefit plan, as
amended.  Executive also shall be entitled to any benefits or compensation tied
to termination as described in Section 4.  Employer reserves the ability, in its
sole discretion, to adjust benefits provided to Executive in connection with the
adjustment of benefits to salaried employees.  No statement concerning benefits
or compensation to which Executive is entitled shall alter in any way the term
of this Agreement, any renewal thereof, or its termination.
 
(d)           Expenses.  Employer shall reimburse Executive for reasonable
travel and other business expenses incurred by Executive in the performance of
his duties, subject to reasonable documentation thereof and in accordance with
Employer’s policies in effect from time to time.
 
(e)           Stock Options and Restricted Stock.  Employer granted Executive an
option to acquire 7,650, 1,875, 4,000, 4,750, and 3,670 shares of Common Stock,
effective January 20, 2006, March 17, 2006, March 28, 2007, March 27, 2008, and
March 27, 2009 respectively, on the terms and conditions pursuant to a Stock
Option Grant Agreement, and pursuant to the Company’s 2005 Long-Term Equity
Incentive Plan (the “2005 Plan”) which, as amended and restated as of April 3,
2007, is attached to and incorporated into this Agreement as
Exhibit B.  Employer also granted Executive 5,625 restricted shares of common
stock effective March 17, 2006, 12,000 restricted shares of common stock
effective March 27, 2007, 14,250 restricted shares of common stock effective
March 27, 2008 and 11,011 restricted shares of common stock effective March 27,
2009, on the terms and conditions set forth in Exhibit B.  In connection with
such grants, Executive executed and delivered to Holdings counterparts to the
Stock Option Grant Agreement, in form and substance as set forth in Exhibit B
attached hereto, entered into by and among Holdings and all of its stock
optionees.
 
 
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(f)           Withholding.  Any and all payments made pursuant to this Agreement
shall be subject to all withholding required in accordance with applicable
federal, state or local law.
 
4.             TERMINATION OF EMPLOYMENT.
 
(a)           By Employer Without Cause.  At any time, Employer may terminate
Executive without Cause (as defined below), effective as of the date specified
in a written notice from Employer to Executive.  Employer may discipline or
demote Executive with or without Cause and with or without prior
notice.  Employer may discipline, demote, or dismiss Executive as provided in
this Section 4 notwithstanding anything to the contrary contained in or arising
from any statements, policies or practices of Employer relating to the
employment, discipline, or termination of its employees.  If Executive’s
employment with Employer is terminated by Employer without Cause, Executive
shall be entitled to continue to receive his Base Salary payable in regular
installments as special severance payments from the date of termination for a
period of twelve (12) months thereafter, or until Executive obtains other
employment (but with it being understood that Executive shall be under no duty
to seek alternative employment during the Severance Period), whichever first
occurs (the “Severance Period”), if and only if Executive has executed and
delivered to Employer the General Release substantially in form and substance as
set forth in Exhibit A attached hereto and only so long as Executive has not
revoked or breached the provisions of the General Release or breached the
provisions of this Agreement or any Ancillary Agreement (as defined below) and
does not apply for unemployment compensation chargeable to Employer during the
Severance Period, and Executive shall not be entitled to any other salary,
compensation or benefits after termination of the Period of Employment, except
as specifically provided for in Employer’s employee benefit plans or as
otherwise expressly required by applicable law (such as COBRA).  Notwithstanding
anything to the contrary contained in this Section 4(a), in the event Executive
breaches the provisions of this Agreement or any Ancillary Agreement, the
severance amounts payable by Employer under this Section 4(a) shall not
terminate unless and until more than ten (10) days have elapsed from and after
the date written notice of such breach has been delivered to Executive without
such breach having been cured during such 10-day period.
 
(b)           By Employer For Cause.  At any time, and without prior notice
(except as otherwise provided in the definition of Cause set forth below),
Employer may terminate Executive for Cause.  Employer shall pay Executive all
compensation then due and owing; thereafter, all of Employer’s obligations under
this Agreement shall cease.  Termination shall be for “Cause” if Executive: (i)
is continuously inattentive to his lawful duties after at least one written
notice has been provided to Executive and Executive has failed to cure the same
within a 30-day period thereafter; (ii) reports to work under the influence of
alcohol or illegal drugs, or uses illegal drugs (whether or not at the
workplace) or engages in other conduct causing the Employer substantial public
disgrace or disrepute or economic harm; (iii) breaches his duty of loyalty to
Employer or engages in any acts of dishonesty or fraud with respect to Employer
or any of its business relations; (iv) is convicted of felony or any crime
involving dishonesty, breach of trust, or physical or emotional harm to any
person (or enters a plea of guilty or nolo contendere with respect thereto); (v)
breaches any material term of this Agreement, any Ancillary Agreement or any
other agreement between Executive and Employer or any of its Affiliates and such
breach (if capable of cure) is not cured within thirty (30) days following
written notice thereof from Employer or (vi) is terminated for substandard
performance.  For purposes of this Agreement, “substandard performance” shall be
defined as willful refusal to perform or substantial disregard of duties
properly assigned by Employer or its Affiliates.  The Board shall give Executive
written notice of the Board’s concern over Executive’s performance, and
Executive shall have thirty (30) days to prepare for a meeting with the Board,
at which time Executive may present any information on market competitive
conditions and any other factors bearing on his and Employer’s
performance.  After consideration of these and such other factors as the Board
may deem relevant, if a majority of the Board determines in good faith that
Employer’s future performance would be best served by a change in management,
the Board may terminate Executive’s employment for “substandard performance”
following the expiration of such 30-day period.
 
 
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(c)           Voluntary Termination by Executive.  At any time, Executive may
terminate his employment for any reason, with or without cause, by providing
Employer at least thirty (30) days’ advance written notice.  Employer shall have
the option, in its complete discretion, to make Executive’s termination
effective at any time prior to the end of such notice period.  On the date of
such termination, Employer shall pay Executive all compensation then due and
owing through such date; and, thereafter, all of Employer’s obligations under
this Agreement shall cease.
 
(d)           Termination Upon Death or Permanent Disability.  Executive’s
employment with Employer shall also terminate upon Executive’s death or
permanent mental or physical disability or other incapacity (as determined by
the Board in its good faith judgment).  Upon any such termination, Employer
shall pay Executive (or Executive’s estate or legal representative or guardian)
all compensation then due and owing; thereafter, all of Employer’s obligations
under this Agreement shall cease.
 
(e)           Termination of Compensation.  Except as otherwise expressly
provided herein, all of Executive’s rights to salary, bonuses, employee benefits
and other compensation hereunder which would have accrued or become payable
after the termination or expiration of the Period of Employment shall cease upon
such termination or expiration, other than those expressly required under
applicable law (such as COBRA).
 
(f)           Termination Obligations.
 
(i)  Executive agrees that all property, including, without limitation, all
equipment, tangible Proprietary Information (as defined below), documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Executive in the course of or
incident to his employment, belongs to Employer and shall be returned promptly
to Employer upon termination of the Period of Employment.
 
(ii)  All employee and other benefits to which Executive is otherwise entitled
shall cease upon Executive’s termination, unless explicitly continued either
under this Agreement or under any specific written policy or benefit plan of
Employer.
 
(iii)  Upon termination of the Period of Employment, Executive shall be deemed
to have resigned from all offices and directorships then held with Employer or
any Affiliate.
 
 
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(iv)  The representations and warranties contained in this Agreement and
Executive’s obligations under this Section 4(f) shall survive the termination of
the Period of Employment and the expiration of this Agreement.
 
(g)  For sixty (60) days following any termination of the Period of Employment,
Executive shall cooperate in a reasonable manner with Employer in all matters
relating to the winding up of pending work on behalf of Employer and the orderly
transfer of work to other employees of Employer.  At all times following any
termination of the Period of Employment, Executive shall also cooperate in the
defense of any action brought by any third party against Employer that relates
in any way to Executive’s acts or omissions while employed by Employer; provided
that Employer shall reimburse Executive for his reasonable out-of-pocket
expenses after being provided with reasonable documentation of such expenses.
 
5.             NONSOLICITATION.  Executive acknowledges that he is familiar with
the trade secrets of Employer and its Affiliates and with other proprietary
information concerning Employer and its Affiliates, including, without
limitation, all (a) inventions, technology and research and development of
Employer and its Affiliates, (b) customers and suppliers and customer and
supplier lists of Employer and its Affiliates, (c) products and services of
Employer and its Affiliates (including, without limitation, those under
development) and related costs and pricing structures, (d) accounting and
business methods and practices of Employer and its Affiliates and (e) similar
and related proprietary information of Employer and its Affiliates.  During the
period commencing with the Effective Date and ending twelve (12) months after
the date of termination of Executive’s employment with Employer (the
“Restriction Period”), Executive shall not (i) induce or attempt to induce any
employee of Employer or any of its Affiliates to leave the employ of Employer or
such Affiliate, or in any way interfere with the relationship between Employer
or any of its Affiliates and any employee thereof, (ii) hire directly or through
another entity any person who was an employee of Employer or any of its
Affiliates at any time during the Restriction Period, or (iii) call on, solicit
or service any customer, supplier, licensee, licensor or other business relation
of Employer or any of its Affiliates in order to induce or attempt to induce
such person or entity to cease doing business with Employer or any such
Affiliate or in any way materially interfere with the relationship between any
such customer, supplier, licensee, licensor or business relation and Employer or
any of its Affiliates (including, without limitation, making any negative
statements or communications concerning Employer or any of its Affiliates).
 
6.             NONDISCLOSURE AND NONUSE OF PROPRIETARY INFORMATION.
 
(a)  Executive shall not disclose or use at any time, either during his
employment with Employer or thereafter, any Proprietary Information (as defined
below) of which Executive is or becomes aware, whether or not such information
is developed by him, except to the extent that such disclosure or use is
directly related to and required by Executive’s performance of duties assigned
to Executive by Employer.  Executive shall take all appropriate steps to
safeguard Proprietary Information and to protect it against disclosure, misuse,
espionage, loss and theft.  The foregoing shall not, however, prohibit
disclosure by Executive of Proprietary Information that has been published in a
form generally available to the public prior to the date Executive proposes to
disclose such information.  Information shall not be deemed to have been
published merely because individual portions of the information have been
separately published, but only if all material features comprising such
information have been published in combination.
 
 
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(b)  As used in this Agreement, the term “Proprietary Information” means all
information of a confidential or proprietary nature (whether or not specifically
labeled or identified as “confidential”), in any form or medium, that relates to
or results from the business, historical or projected financial results,
products, services or research or development of Employer or its Affiliates or
their respective suppliers, distributors, customers, independent contractors or
other business relations.  Proprietary Information includes, but is not limited
to, the following:  (i) internal business information (including, without
limitation, historical and projected financial information and budgets and
information relating to strategic and staffing plans and practices, business,
training, marketing, promotional and sales plans and practices, cost, rate and
pricing structures and accounting and business  methods); (ii) identities of,
individual requirements of, specific contractual arrangements with, and
information about, Employer’s and its Affiliates’ suppliers, distributors,
customers, independent contractors or other business relations and their
confidential information; (iii) trade secrets, technology, know-how,
compilations of data and analyses, techniques, systems, formulae, research,
records, reports, manuals, flow charts, documentation, models, data and data
bases relating thereto; (iv) computer software, including, without limitation,
operating systems, applications and program listings; (v) inventions,
innovations, ideas, devices, improvements, developments, methods, processes,
designs, analyses, drawings, photographs, reports and all similar or related
information (whether or not patentable and whether or not reduced to practice);
(vi) copyrightable works; (vii) intellectual property of every kind and
description; and (viii) all similar and related information in whatever form.
 
7.             EMPLOYER’S OWNERSHIP OF INTELLECTUAL PROPERTY.
 
(a)  In the event that Executive during the term of his employment by Employer
generates, authors, conceives, develops, acquires, makes, reduces to practice or
contributes to any idea, discovery, trade secret, invention, innovation,
improvement, development, method of doing business, process, program, design,
analysis, drawing, report, data, software, firmware, logo, device, method,
product or any similar or related information (whether or not patentable or
reduced to practice or comprising Proprietary Information), any copyrightable
work (whether or not comprising Proprietary Information) or any other form of
Proprietary Information (collectively, “Intellectual Property”), Executive
acknowledges that such Intellectual Property is and shall be the exclusive
property of Employer.  Any copyrightable work prepared in whole or in part by
Executive shall be deemed “a work made for hire” to the maximum extent permitted
under Section 201(b) of the 1976 Copyright Act as amended, and Employer shall
own all of the rights comprised in the copyright therein.  Without limiting the
generality of the foregoing, Executive hereby assigns his entire right, title
and interest in and to all Intellectual Property to Employer.  Executive shall
promptly and fully disclose all Intellectual Property to Employer and shall
cooperate with Employer to protect Employer’s interests in and rights to such
Intellectual Property (including, without limitation, providing reasonable
assistance in securing patent protection and copyright registrations and
executing all documents as reasonably requested by Employer, whether such
requests occur prior to or after termination of Executive’s employment with
Employer).
 
(b)  Notwithstanding the foregoing, however, Employer shall not own and
Executive shall have no obligation to assign to Employer any invention otherwise
falling within the definition of Intellectual Property for which no equipment,
supplies, facility, or trade secret information of Employer was used and that
was developed entirely on Executive’s own time, unless:  (i) such Intellectual
Property relates (A) to Employer’s business or (B) to their actual or
demonstrably anticipated research or development, or (ii) the Intellectual
Property results from any work performed by him for them under this
Agreement.  Executive has identified and described in detail on an attachment
hereto initialed by each of the undersigned party’s or their authorized
representatives, all Intellectual Property that is or was owned by him or was
written, discovered, made, conceived or first reduced to practice by him alone
or jointly with another person prior to his employment under this Agreement.  If
no such Intellectual Property is listed, Executive represents to Employer that
he does not now nor has he ever owned, nor has he made, any such Intellectual
Property.
 
 
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8.             ARBITRATION.
 
(a)  Arbitrable Claims.  To the fullest extent permitted by law, all disputes
between Executive (and his attorneys, successors, and assigns) and Employer (and
its Affiliates, shareholders, directors, officers, employees, agents,
successors, attorneys, and assigns) of any kind whatsoever, including, without
limitation, all disputes relating in any manner to the employment or termination
of Executive, and all disputes arising under this Agreement (“Arbitrable
Claims”) shall be resolved by arbitration.  All persons and entities specified
in the preceding sentence (other than Employer and Executive) shall be
considered third-party beneficiaries of the rights and obligations created by
this Section on Arbitration.  Arbitrable Claims shall include, but are not
limited to, contract (express or implied) and tort claims of all kinds, as well
as all claims based on any federal, state, or local law, statute, or regulation,
excepting only claims under applicable workers’ compensation law and
unemployment insurance claims.  By way of example and not in limitation of the
foregoing, Arbitrable Claims shall include (to the fullest extent permitted by
law) any claims arising under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the
Rev. Code of Washington Sections 49.45.010 et seq. and 49.60.010 et seq., as
well as any claims asserting wrongful termination, harassment, breach of
contract, breach of the covenant of good faith and fair dealing, negligent or
intentional infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract or
prospective economic advantage, defamation, invasion of privacy, and claims
related to disability.
 
(b)  Procedure.  Arbitration of Arbitrable Claims shall be in accordance with
the National Rules for the Resolution of Employment Disputes of the “American
Arbitration Association, as amended (“AAA Employment Rules”), as augmented in
this Agreement.  Arbitration shall be initiated as provided by the AAA
Employment Rules, although the written notice to the other party initiating
arbitration shall also include a statement of the claim(s) asserted and the
facts upon which the claim(s) are based.  Arbitration shall be final and binding
upon the parties and shall be the exclusive remedy for all Arbitrable
Claims.  Either party may bring an action in court to compel arbitration under
this Agreement and to enforce an arbitration award.  Otherwise, neither party
shall initiate or prosecute any lawsuit or administrative action in any way
related to any Arbitrable Claim.  Notwithstanding the foregoing, either party
may, at its option, seek injunctive relief with a federal court in the State of
Washington or state court in King County, Washington.  All arbitration hearings
under this Agreement shall be conducted in King County, Washington.  The
decision of the arbitrator shall be in writing and shall include a statement of
the essential conclusions and findings upon which the decision is based.  THE
PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO
ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO
THE MAKING, EXISTENCE, VALIDITY, OR ENFORECABILITY OF THE AGREEMENT TO
ARBITRATE.
 
(c)  Arbitrator Selection and Authority.  All disputes involving Arbitrable
Claims shall be decided by a single arbitrator.  The arbitrator shall be
selected by mutual agreement of the parties within thirty (30) days of the
effective date of the notice initiating the arbitration.  If the parties cannot
agree on an arbitrator, then the complaining party shall notify the AAA and
request selection of an arbitrator in accordance with the AAA Employment
Rules.  The arbitrator shall have only such authority to award equitable relief,
damages, costs, and fees as a court would have for the particular claim(s)
asserted.  The fees of the arbitrator shall be paid by the non-prevailing
party.  If the allocation of responsibility for payment of the arbitrator’s fees
would render the obligation to arbitrate unenforceable, the parties authorize
the arbitrator to modify the allocation as necessary to preserve
enforceability.  The arbitrator shall have exclusive authority to resolve all
Arbitrable Claims, including, but not limited to, whether any particular claim
is arbitrable and whether all or any part of this Agreement is void or
unenforceable.
 
 
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(d)           Confidentiality.  All proceedings and all documents prepared in
connection with any Arbitrable Claim shall be confidential and, unless otherwise
required by law, the subject matter thereof shall not be disclosed to any person
other than the parties to the proceedings, their counsel, witnesses and experts,
the arbitrator, and, if involved, the court and court staff.  All documents
filed with the arbitrator or with a court shall be filed under seal.  The
parties shall stipulate to all arbitration and court orders necessary to
effectuate fully the provisions of this subsection concerning confidentiality.
 
(e)           Continuing Obligation.  The rights and obligations of Executive
and Employer set forth in this Section 8 shall survive the termination of
Executive’s employment and the expiration of this Agreement.
 
9.             EXECUTIVE’S REPRESENTATIONS.  Executive hereby represents and
warrants to Employer that (i) the execution, delivery and performance of this
Agreement by Executive does not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by Employer, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
 
10.           NOTICES.  Any notice or other communication under this Agreement
must be in writing and shall be effective upon delivery by hand, or three (3)
business days after deposit in the United States mail, postage prepaid,
certified or registered, and addressed to the Employer or to Executive at he
corresponding address below.  Executive shall be obligated to notify Employer in
writing of any change in his address.  Notice of change of address shall be
effective only when done in accordance with this Section.
 
Employer’s Notice Address:
 
SeaBright Insurance Company
1501 4th Avenue, Suite 2600
Seattle, WA  98101
Attn:  Chief Executive Officer
Facsimile:  (206) 269-8901

Executive’s Notice Address:
 
M. Philip Romney
13018 177th Place NE
Redmond, WA 98052

 
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11.           ACTION BY EMPLOYER.  All actions required or permitted to be taken
under this Agreement by Employer, including, without limitation, exercise of
discretion, consents, waivers, and amendments to this Agreement, shall be made
and authorized only by the chief executive officer of Holdings or Employer.
 
12.           INTEGRATION.  This Agreement is intended to be the final,
complete, and exclusive statement of the terms of Executive’s employment by
Employer.  This Agreement supersedes all other prior and contemporaneous
agreements and statements, whether written or oral, express or implied,
pertaining in any manner to the employment of Executive, and it may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements.  To the extent that the practices, policies, or procedures of
Employer, now or in the future, apply to Executive and are consistent with the
terms of this Agreement, the provisions of this Agreement shall control.
 
13.           AMENDMENTS; WAIVERS.  This Agreement may not be amended except by
an instrument in writing, signed by each of the parties.  No failure to exercise
and no delay in exercising any right, remedy, or power under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
 
14.           ASSIGNMENT; SUCCESSORS AND ASSIGNS.  Executive agrees that he will
not assign, sell, transfer, delegate, or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement.  Any such purported assignment, transfer, or delegation
shall be null and void.  Nothing in this Agreement shall prevent the
consolidation of Employer with, or its merger into, any other entity, or the
sale by Employer of all or substantially all of its assets, or the assignment by
Employer of any rights or obligations under this Agreement.  Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective heirs, legal representatives, successors,
and permitted assigns, and shall not benefit any person or entity other than
those specifically enumerated in this Agreement.
 
15.           SEVERABILITY.  If any provision of this Agreement, or its
application to any person, place, or circumstance, is held by an arbitrator or a
court of competent jurisdiction to be invalid, unenforceable, or void, such
provision shall be enforced to the greatest extent permitted by law, and the
remainder of this Agreement and such provision as applied to other persons,
places, and circumstances shall remain in full force and effect.
 
16.           ATTORNEYS’ FEES.  In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and
costs.
 
17.           GOVERNING LAW.  This Agreement shall be governed by and construed
in accordance with the law of the State of Washington.
 
18.           INTERPRETATION.  This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party.  By way
of example and not in limitation, this Agreement shall not be construed in favor
of the party receiving a benefit nor against the party responsible for any
particular language in this Agreement.  Captions are used for reference purposes
only and should be ignored in the interpretation of this Agreement.
 
 
9

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19.           EMPLOYEE ACKNOWLEDGMENT.  Executive acknowledges that he has had
the opportunity to consult legal counsel in regard to this Agreement, that he
has read and understands this Agreement, that he is fully aware of its legal
effect, and that he has entered into it freely and voluntarily and based on his
own judgment and not on any representations or promises other than those
contained in this Agreement.
 
20.           CODE SECTION 409A COMPLIANCE.

(a)  The intent of the parties is that payments and benefits under this
Agreement comply with Internal Revenue Code Section 409A and the regulations and
guidance promulgated thereunder (collectively “Code Section 409A”) and,
accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith.  To the extent that any provision
hereof is modified in order to comply with Code Section 409A, such modification
shall be made in good faith and shall, to the maximum extent reasonably
possible, maintain the original intent and economic benefit to Executive and
Employer of the applicable provision without violating the provisions of Code
Section 409A.  In no event whatsoever shall Employer be liable for any
additional tax, interest or penalty that may be imposed on Executive by Code
Section 409A or damages for failing to comply with Code Section 409A.

(b)  A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amount or benefit upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”  Notwithstanding any other payment schedule
provided herein to the contrary, if Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment or the provision of
any benefit that is considered “nonqualified deferred compensation” under Code
Section 409A payable on account of a “separation from service,” such payment or
benefit shall be made on the date which is the earlier of (i) the expiration of
the six (6)-month period measured from the date of Executive’s “separation from
service,” and (B) the date of Executive’s death, to the extent required under
Code Section 409A.  Upon the expiration of the foregoing delay period, all
payments and benefits delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to Executive in a lump sum, and all remaining
payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.

(c)  To the extent that severance payments or benefits pursuant to this
Agreement are conditioned upon the execution and delivery by Executive of a
release of claims, Executive shall forfeit all rights to such payments and
benefits unless such release is signed and delivered (and no longer subject to
revocation, if applicable) within sixty (60) days following the date of
Executive’s termination of employment.  If the foregoing release is executed and
delivered and no longer subject to revocation as provided in the preceding
sentence, then the following shall apply:

 
10

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(i)  To the extent that any such cash payment or continuing benefit to be
provided is not “nonqualified deferred compensation” for purposes of Code
Section 409A, then such payment or benefit shall commence upon the first
scheduled payment date immediately following the date that the release is
executed, delivered and no longer subject to revocation (the “Release Effective
Date”).  The first such cash payment shall include payment of all amounts that
otherwise would have been due prior to the Release Effective Date under the
terms of this Agreement applied as though such payments commenced immediately
upon Executive’s termination of employment, and any payment made thereafter
shall continue as provided herein.

(ii)  To the extent that any such cash payment or continuing benefit to be
provided is “nonqualified deferred compensation” for purposes of Code Section
409A, then such payments or benefits shall be made or commence upon the sixtieth
(60th) day following Executive’s termination of employment.  The first such cash
payment shall include payment of all amounts that otherwise would have been due
prior thereto under the terms of this Agreement had such payments commenced
immediately upon Executive’s termination of employment, and any payment made
thereafter shall continue as provided herein.

(d)  To the extent that any expense reimbursement or in-kind benefit under this
Agreement constitutes “non-qualified deferred compensation” for purposes of Code
Section 409A, (i) such expense or other reimbursement hereunder shall be made on
or prior to the last day of the taxable year following the taxable year in which
such expenses were incurred by Executive, (ii) any right to reimbursement or
in-kind benefits will not be subject to liquidation or exchange for another
benefit, and (iii) no such reimbursement, expenses eligible for reimbursement,
or in-kind benefits provided in any taxable year shall in any way affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year.

(e)  For purposes of Code Section 409A, Executive’s right to receive installment
payments pursuant to this Agreement shall be treated as a right to receive a
series of separate and distinct payments.  Whenever a payment under this
Agreement specifies a payment period with reference to a number of days, the
actual date of payment within the specified period shall be within the sole
discretion of Employer.

(f)  Notwithstanding any other provision of this Agreement to the contrary, in
no event shall any payment under this Agreement  that constitutes “nonqualified
deferred compensation” for purposes of Code Section 409A be subject to offset by
any other amount unless otherwise permitted by Code Section 409A.

(g) Unless this Agreement provides a specified and objectively determinable
payment schedule to the contrary, to the extent that any payment of base salary
or other compensation is to be paid for a specified continuing period of time
beyond the date of Executive’s termination of employment in accordance with
Employer’s payroll practices (or other similar term), the payments of such base
salary or other compensation shall be made upon such schedule as in effect upon
the date of termination, but no less frequently than monthly.

 
11

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(h) Any annual bonus payable to Executive in accordance with the provisions of
Section 3(b) hereof shall be paid in the calendar year following the calendar
year to which such bonus relates at the same time bonuses are paid to other
senior executive officers of Employer generally.”
 
The parties have duly executed this Agreement as of the date first written
above.
 

       
M. PHILIP ROMNEY
       
SEABRIGHT INSURANCE COMPANY
       
By:
     
John G. Pasqualetto
   
Its: Chief Executive Officer

 
 
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Exhibit A

GENERAL RELEASE
 
I, __________________________, in consideration of and subject to the
performance by SeaBright Insurance Company, an Illinois domiciled company
(together with its subsidiaries, the “Company”), of its obligations under the
Employment Agreement, dated as of October  ____, 2009 (the “Agreement”), do
hereby release and forever discharge as of the date hereof the Company and its
affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its
affiliates and the Company’s direct or indirect owners (collectively, the
“Released Parties”) to the extent provided below.
 
1.           I understand that any payments or benefits paid or granted to me
under Section 4(a) of the Agreement represent, in part, consideration for
signing this General Release and are not salary, wages or benefits to which I
was already entitled.  I understand and agree that I will not receive the
payments and benefits specified in Section 4(a) of the Agreement unless I
execute this General Release and do not revoke this General Release within the
time period permitted hereafter or breach this General Release.  Such payments
and benefits will not be considered compensation for purposes of any employee
benefit plan, program, policy or arrangement maintained or hereafter established
by the Company or its affiliates.  I also acknowledge and represent that I have
received all payments and benefits that I am entitled to receive (as of the date
hereof) by virtue of any employment by the Company.
 
2.           Except as provided in Paragraph 4 below and except for the
provisions of my Employment Agreement which expressly survive the termination of
my employment with the Company, I knowingly and voluntarily (for myself, my
heirs, executors, administrators and assigns) release and forever discharge the
Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counterclaims, demands,
debts, compensatory damages, liquidated damages, punitive or exemplary damages,
other damages, claims for costs and attorneys’ fees, or liabilities of any
nature whatsoever in law and in equity, both past and present (through the date
this General Release becomes effective and enforceable) and whether known or
unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, which arise out of or are connected with my employment with,
or my separation or termination from, the Company (including, but not limited
to, any allegation, claim or violation, arising under:  Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including, without
limitation, the Older Workers Benefit Protection Act); the Equal Pay Act of
1963, as amended; the Americans with Disabilities Act of 1990; the Family and
Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification
Act; the Employee Retirement Income Security Act of 1974; any applicable
Executive Order Programs; the Fair Labor Standards Act; or their state and local
counterparts; or under any other federal, state or local civil or human rights
law, or under any other local, state, or federal law, regulation or ordinance;
or under any public policy, contract or tort, or under common law; or arising
under any policies, practices or procedures of Employer; or any claim for
wrongful discharge, breach of contract, infliction of emotional distress, or
defamation; or any claim for costs, fees, or other expenses, including (without
limitation) attorneys’ fees incurred in these matters) (all of the foregoing
collectively referred to herein as the “Claims”).
 
 
A-1

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Exhibit A

3.            I represent that I have made no assignment or transfer of any
right, claim, demand, cause of action, or other matter covered by Paragraph 2
above.
 
4.            I agree that this General Release does not waive or release any
rights or claims that I may have under the Age Discrimination in Employment Act
of 1967 which arise after the date I execute this General Release.  I
acknowledge and agree that my separation from employment with the Company in
compliance with the terms of the Agreement shall not serve as the basis for any
claim or action (including, without limitation, any claim under the Age
Discrimination in Employment Act of 1967).
 
5.            In signing this General Release, I acknowledge and intend that it
shall be effective as a bar to each and every one of the Claims hereinabove
mentioned or implied.  I expressly consent that this General Release shall be
given full force and effect according to each and all of its express terms and
provisions, including, without limitation, those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied.  I acknowledge and agree that this waiver is an essential
and material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement.  I further agree
that in the event I should bring a Claim seeking damages against the Company, or
in the event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve as a
complete defense to such Claims.  I further agree that I am not aware of any
pending charge or complaint of the type described in Paragraph 2 as of the
execution of this General Release.
 
6.            I represent that I am not aware of any claim by me other than the
claims that are released by this Agreement.
 
7.            I agree that neither this General Release, nor the furnishing of
the consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.
 
8.            I agree that I will forfeit all amounts payable by the Company
pursuant to the Agreement if I challenge the validity of this General
Release.  I also agree that if I violate this General Release by suing the
Company or the other Released Parties, I will pay all costs and expenses of
defending against the suit incurred by the Released Parties, including (without
limitation) reasonable attorneys’ fees, and return all payments received by me
pursuant to the Agreement.
 
9.            I agree that this General Release is confidential and agree not to
disclose any information regarding the terms of this General Release, except to
my immediate family and any tax, legal or other counsel I have consulted
regarding the meaning or effect hereof or as required by law, and I will
instruct each of the foregoing not to disclose the same to anyone.
 
10.           Any non-disclosure provision in this General Release does not
prohibit or restrict me (or my attorney) from responding to any inquiry about
this General Release or its underlying facts and circumstances by the Securities
and Exchange Commission (SEC), the National Association of Securities Dealers,
Inc. (NASD), any other self-regulatory organization or governmental entity.
 
 
A-2

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Exhibit A

11.           I agree to reasonably cooperate with the Company in any internal
investigation or administrative, regulatory, or judicial proceeding.  I
understand and agree that my cooperation may include, but not be limited to,
making myself available to the Company upon reasonable notice for interviews and
factual investigations; appearing at the Company’s request to give testimony
without requiring service of a subpoena or other legal process; volunteering to
the Company pertinent information; and turning over to the Company all relevant
documents which are or may come into my possession all at times and on schedules
that are reasonably consistent with my other permitted activities and
commitments.  I understand that in the event the Company asks for my cooperation
in accordance with this provision, the Company will reimburse me solely for
reasonable travel expenses, including, without limitation, lodging and meals,
upon my submission of receipts.
 
12.           I agree not to disparage the Company, its past and present
investors, officers, directors or employers or its affiliates and to keep all
confidential and proprietary information about the past or present business
affairs of the Company and its affiliates confidential unless a prior written
release from the Company is obtained.  I further agree that as of the date
hereof, I have returned to the Company any and all property, tangible or
intangible, relating to its business, which I possessed or had control over at
any time (including, but not limited to, company-provided credit cards, building
or office access cards, keys, computer equipment, manuals, files, documents,
records, software, customer database and other data) and that I shall not retain
any copies, compilations, extracts, excerpts, summaries or other notes of any
such manuals, files, documents, records, software, customer database or other
data.
 
13.           Notwithstanding anything in this General Release to the contrary,
this General Release shall not relinquish, diminish, or in any way affect any
rights or claims (i) arising out of any breach by the Company or by any Released
Party of the Agreement after the date hereof (ii) to indemnification for which I
may be entitled to as a former officer or director of the Company under their
respective charter and/or bylaws and/or other constituent documents so long as I
am otherwise entitled to be indemnified as authorized thereunder.
 
14.           Whenever possible, each provision of this General Release shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this General Release is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
 
 
A-3

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Exhibit A

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
 
 
(i)
I HAVE READ IT CAREFULLY;

 
 
(ii)
I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 
 
(iii)
I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 
 
(iv)
I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

 
 
(v)
I HAVE HAD AT LEAST TWENTY-ONE (21) DAYS FROM THE DATE OF MY RECEIPT OF THIS
RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON ________________, 20__, TO CONSIDER
IT AND THE CHANGES MADE SINCE THE ________________, 20__ VERSION OF THIS RELEASE
ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

 
 
(vi)
THE CHANGES TO THE AGREEMENT SINCE ________________, 20__ EITHER ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST.

 
 
(vii)
I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED;

 
 
(viii)
I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 
 
(ix)
I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

 
 
Signature:
   
Date:
   
M. Philip Romney
     

 
A-4

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Exhibit B

SEABRIGHT INSURANCE HOLDINGS, INC.
AMENDED AND RESTATED 2005 LONG-TERM EQUITY INCENTIVE PLAN

1.           Purpose.

This plan shall be known as the SeaBright Insurance Holdings, Inc. Amended and
Restated 2005 Long-Term Equity Incentive Plan (the "Plan").  The purpose of the
Plan shall be to promote the long-term growth and profitability of SeaBright
Insurance Holdings, Inc. (the "Company") and its Subsidiaries by (i) providing
certain directors, officers and employees of, and certain other individuals who
perform services for, the Company and its Subsidiaries with incentives to
maximize stockholder value and otherwise contribute to the success of the
Company and (ii) enabling the Company to attract, retain and reward the best
available persons for positions of responsibility.  Grants of incentive or
non-qualified stock options, restricted stock, restricted stock units, deferred
stock units, performance awards, or any combination of the foregoing may be made
under the Plan.

2.           Definitions

(a)           "Board of Directors" and "Board" mean the board of directors of
the Company.

(b)           "Cause" means the occurrence of one or more of the following
events:

(i)           Conviction of a felony or any crime or offense lesser than a
felony involving the property of the Company or a Subsidiary; or

(ii)           Conduct that has caused demonstrable and serious injury to the
Company or a Subsidiary, monetary or otherwise; or

(iii)           Willful refusal to perform or substantial disregard of duties
properly assigned, as determined by the Company or a Subsidiary, as the case may
be; or

(iv)           Breach of duty of loyalty to the Company or a Subsidiary or other
act of fraud or dishonesty with respect to the Company or a Subsidiary.

(c)           "Change in Control" means the occurrence of one of the following
events:

(i)           if any "person" or "group" as those terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successors thereto, other than an
Exempt Person, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act or any successor thereto), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or

 
B-5

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Exhibit B

(ii)           during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new directors whose
election by the Board or nomination for election by the Company's stockholders
was approved by at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof;
or

(iii)           consummation of a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation (A) which would
result in all or a portion of the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (B) by which the corporate existence of the Company is not
affected and following which the Company's chief executive officer and directors
retain their positions with the Company (and constitute at least a majority of
the Board); or

(iv)           consummation of a plan of complete liquidation of the Company or
a sale or disposition by the Company of all or substantially all the Company's
assets, other than a sale to an Exempt Person.

(d)           "Code"  means the Internal Revenue Code of 1986, as amended.

(e)           "Committee" means the Compensation Committee of the Board, which
shall consist solely of two or more members of the Board.

(f)           "Common Stock" means the Common Stock, par value $0.01 per share,
of the Company, and any other shares into which such stock may be changed by
reason of a recapitalization, reorganization, merger, consolidation or any other
change in the corporate structure or capital stock of the Company.

(g)           "Competition" is deemed to occur if a person whose employment with
the Company or its Subsidiaries has terminated obtains a position as a full-time
or part-time employee of, as a member of the board of directors of, or as a
consultant or advisor with or to, or acquires an ownership interest in excess of
5% of, a corporation, partnership, firm or other entity that engages in any of
the businesses of the Company or any Subsidiary with which the person was
involved in a management role at any time during his or her last five years of
employment with or other service for the Company or any Subsidiaries.

(h)           "Disability" means a disability that would entitle an eligible
participant to payment of monthly disability payments under any Company
disability plan or as otherwise determined by the Committee.

(i)           "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

 
B-6

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Exhibit B

(j)           "Exempt Person" means (i) Summit Master Company, LLC, Summit
Partners, LLC, Summit Partners, L.P. or any of their affiliates, (ii) any
person, entity or group under the control of any party included in clause (i),
or (iii) any employee benefit plan of the Company or a trustee or other
administrator or fiduciary holding securities under an employee benefit plan of
the Company.

(k)           "Family Member" has the meaning given to such term in General
Instructions A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended,
and any successor thereto.

(l)           "Fair Market Value" of a share of Common Stock of the Company
means, as of the date in question, the officially-quoted closing selling price
of the stock (or if no selling price is quoted, the bid price) on the principal
securities exchange on which the Common Stock is then listed for trading
(including for this purpose the Nasdaq National Market) (the "Market") for the
applicable trading day or, if the Common Stock is not then listed or quoted in
the Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board; provided, however, that when shares
received upon exercise of an option are immediately sold in the open market, the
net sale price received may be used to determine the Fair Market Value of any
shares used to pay the exercise price or applicable withholding taxes and to
compute the withholding taxes.

(m)           "Incentive Stock Option" means an option conforming to the
requirements of Section 422 of the Code and any successor thereto.

(n)           "Involuntary Termination" means (i) the participant's involuntary
dismissal or discharge by the Company or a Subsidiary or by its or their
successor for reasons other than Cause or (ii) such individual's voluntary
resignation following (A) a change in his or her position with the Company which
materially reduces his or her level of responsibility, (B) a reduction in his or
her level of compensation (base salary or any target incentive compensation) by
more than ten percent or (C) a relocation of such individual's place of
employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Company or a Subsidiary or by its or
their successor without the participant's written consent.

(o)           "Non-Employee Director" has the meaning given to such term in Rule
16b-3 under the Exchange Act and any successor thereto.

(p)           "Non-qualified Stock Option" means any stock option other than an
Incentive Stock Option.

(q)           "Other Company Securities" mean securities of the Company other
than Common Stock, which may include, without limitation, unbundled stock units
or components thereof, debentures, preferred stock, warrants and securities
convertible into or exchangeable for Common Stock or other property.

 
B-7

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Exhibit B

(r)           "Retirement" means retirement as defined under any Company pension
plan or retirement program or termination of one's employment on retirement with
the approval of the Committee.

(s)           "Subsidiary" means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

3.             Administration.  The Plan shall be administered by the Committee;
provided that the Board may, in its discretion, at any time and from time to
time, resolve to administer the Plan, in which case the term "Committee" shall
be deemed to mean the Board for all purposes herein.  Subject to the provisions
of the Plan, the Committee shall be authorized to (i) select persons to
participate in the Plan, (ii) determine the form and substance of grants made
under the Plan to each participant, and the conditions and restrictions, if any,
subject to which such grants will be made, (iii) certify that the conditions and
restrictions applicable to any grant have been met, (iv) modify the terms of
grants made under the Plan, (v) interpret the Plan and grants made thereunder,
(vi) make any adjustments necessary or desirable in connection with grants made
under the Plan to eligible participants located outside the United States and
(vii) adopt, amend, or rescind such rules and regulations, and make such other
determinations, for carrying out the Plan as it may deem appropriate.  Decisions
of the Committee on all matters relating to the Plan shall be in the Committee's
sole discretion and shall be conclusive and binding on all parties.  The
validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with applicable federal
and state laws and rules and regulations promulgated pursuant thereto and the
rules and regulations of the principal securities exchange on which the Common
Stock is then listed for trading.  No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such
member, by any other member of the Committee or by any officer of the Company in
connection with the performance of duties under the Plan, except for such
person's own willful misconduct or as expressly provided by statute.

The expenses of the Plan shall be borne by the Company.  The Plan shall not be
required to establish any special or separate fund or make any other segregation
of assets to assume the payment of any award under the Plan, and rights to the
payment of such awards shall be no greater than the rights of the Company's
general creditors.

4.             Shares Available for the Plan.  Subject to adjustments as
provided in Section 16 hereof, an aggregate of one million forty seven thousand
seven hundred fifty five (1,047,755) shares of Common Stock may be issued
pursuant to the Plan, plus an automatic annual increase on the first day of each
of the Company's fiscal years beginning in 2006 and ending in 2015 equal to the
lesser of (i) two percent (2%) of the shares of Common Stock outstanding on the
last day of the immediately preceding fiscal year or (ii) such lesser number of
shares of Common Stock as determined by the Committee (collectively, the
"Shares").  Notwithstanding the foregoing, the maximum aggregate number of
Shares that may be issued pursuant to Incentive Stock Options under the Plan
shall not exceed one million forty seven thousand seven hundred fifty five
(1,047,755) (subject to adjustments as provided in Section 16 hereof), and such
number shall not be subject to annual adjustment as described in the preceding
sentence.

 
B-8

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Exhibit B

Such Shares may be in whole or in part authorized and unissued or held by the
Company as treasury shares.  If any grant under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited as to any Shares, or is
tendered or withheld as to any shares in payment of the exercise price of the
grant or the taxes payable with respect to the exercise, then such unpurchased,
forfeited, tendered or withheld Shares shall thereafter be available for further
grants under the Plan.  Without limiting the generality of the foregoing
provisions of this Section 4 or the generality of the provisions of Sections 3,
6 or 18 or any other section of this Plan, the Committee may, at any time or
from time to time, and on such terms and conditions (that are consistent with
and not in contravention of the other provisions of this Plan) as the Committee
may, in its sole discretion, determine, enter into agreements (or take other
actions with respect to the options) for new options containing terms (including
exercise prices) more (or less) favorable than the outstanding options.

5.           Participation.  Participation in the Plan shall be limited to those
directors (including Non-Employee Directors), officers (including non-employee
officers) and employees of, and other individuals performing services for, the
Company and its Subsidiaries selected by the Committee (including participants
located outside the United States).  Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue in the service or
employ as a director or officer of or in the performance of services for the
Company or a Subsidiary or shall interfere in any way with the right of the
Company or a Subsidiary to terminate the employment or performance of services
or to reduce the compensation or responsibilities of a participant at any
time.  By accepting any award under the Plan, each participant and each person
claiming under or through him or her shall be conclusively deemed to have
indicated his or her acceptance and ratification of, and consent to, any action
taken under the Plan by the Company, the Board or the Committee.

Incentive Stock Options or Non-qualified Stock Options, restricted stock awards,
restricted stock unit or deferred stock unit awards, performance awards, or any
combination thereof, may be granted to such persons and for such number of
Shares as the Committee shall determine (such individuals to whom grants are
made being sometimes herein called "optionees" or "grantees," as the case may
be).  Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether
or not such individuals are similarly situated.  A grant of any type made
hereunder in any one year to an eligible participant shall neither guarantee nor
preclude a further grant of that or any other type to such participant in that
year or subsequent years.

6.           Incentive and Non-qualified Options.  The Committee may from time
to time grant to eligible participants Incentive Stock Options, Non-qualified
Stock Options, or any combination thereof; provided that the Committee may grant
Incentive Stock Options only to eligible employees of the Company or its
subsidiaries (as defined for this purpose in Section 424(f) of the Code or any
successor thereto).  In any one calendar year, the Committee shall not grant to
any one participant options to purchase a number of shares of Common Stock in
excess of three hundred thousand (300,000) (as adjusted pursuant to Section 16
hereof).  The options granted shall take such form as the Committee shall
determine, subject to the following terms and conditions.

 
B-9

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Exhibit B

It is the Company's intent that Non-qualified Stock Options granted under the
Plan not be classified as Incentive Stock Options, that Incentive Stock Options
be consistent with and contain or be deemed to contain all provisions required
under Section 422 of the Code and any successor thereto, and that any
ambiguities in construction be interpreted in order to effectuate such
intent.  If an Incentive Stock Option granted under the Plan does not qualify as
such for any reason, then to the extent of such non-qualification, the stock
option represented thereby shall be regarded as a Non-qualified Stock Option
duly granted under the Plan, provided that such stock option otherwise meets the
Plan's requirements for Non-qualified Stock Options.

(a)           Price.                      The price per Share deliverable upon
the exercise of each option ("exercise price") may not be less than 100% of the
Fair Market Value of a share of Common Stock as of the date of grant of the
option, and in the case of the grant of any Incentive Stock Option to an
employee who, at the time of the grant, owns more than 10% of the total combined
voting power of all classes of stock of the Company or any of its Subsidiaries,
the exercise price may not be less than 110% of the Fair Market Value of a share
of Common Stock as of the date of grant of the option, in each case unless
otherwise permitted by Section 422 of the Code or any successor thereto.

(b)           Payment.  Options may be exercised, in whole or in part, upon
payment of the exercise price of the Shares to be acquired. Unless otherwise
determined by the Committee, payment shall be made (i) in cash (including check,
bank draft, money order or wire transfer of immediately available funds), (ii)
by delivery of outstanding shares of Common Stock with a Fair Market Value on
the date of exercise equal to the aggregate exercise price payable with respect
to the options' exercise, (iii) by simultaneous sale through a broker reasonably
acceptable to the Committee of Shares acquired on exercise, as permitted under
Regulation T of the Federal Reserve Board or (iv) by any combination of the
foregoing.

In the event a grantee elects to pay the exercise price payable with respect to
an option pursuant to clause (ii) above, (A) only a whole number of share(s) of
Common Stock (and not fractional shares of Common Stock) may be tendered in
payment, (B) such grantee must present evidence acceptable to the Company that
he or she has owned any such shares of Common Stock tendered in payment of the
exercise price (and that such tendered shares of Common Stock have not been
subject to any substantial risk of forfeiture) for at least six months prior to
the date of exercise, and (C) Common Stock must be delivered to the
Company.  Delivery for this purpose may, at the election of the grantee, be made
either by (1) physical delivery of the certificate(s) for all such shares of
Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (2) direction to
the grantee's broker to transfer, by book entry, such shares of Common Stock
from a brokerage account of the grantee to a brokerage account specified by the
Company.  When payment of the exercise price is made by delivery of Common
Stock, the difference, if any, between the aggregate exercise price payable with
respect to the option being exercised and the Fair Market Value of the shares of
Common Stock tendered in payment (plus any applicable taxes) shall be paid in
cash.  No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised (plus any applicable taxes).

 
B-10

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Exhibit B

(c)           Terms of Options.  The term during which each option may be
exercised shall be determined by the Committee, but if required by the Code and
except as otherwise provided herein, no option shall be exercisable in whole or
in part more than ten years from the date it is granted, and no Incentive Stock
Option granted to an employee who at the time of the grant owns more than 10% of
the total combined voting power of all classes of stock of the Company or any of
its Subsidiaries shall be exercisable more than five years from the date it is
granted.  All rights to purchase Shares pursuant to an option shall, unless
sooner terminated, expire at the date designated by the Committee.  The
Committee shall determine the date on which each option shall become exercisable
and may provide that an option shall become exercisable in installments.  The
Shares constituting each installment may be purchased in whole or in part at any
time after such installment becomes exercisable, subject to such minimum
exercise requirements as may be designated by the Committee.  Prior to the
exercise of an option and delivery of the Shares represented thereby, the
optionee shall have no rights as a stockholder with respect to any Shares
covered by such outstanding option (including any dividend or voting rights).

(d)           Limitations on Grants.  If required by the Code, the aggregate
Fair Market Value (determined as of the grant date) of Shares for which an
Incentive Stock Option is exercisable for the first time during any calendar
year under all equity incentive plans of the Company and its Subsidiaries (as
defined in Section 422 of the Code or any successor thereto) may not exceed
$100,000.

(e)           Termination; Forfeiture.

(i)           Death or Disability.  If a participant ceases to be a director,
officer or employee of, or to perform other services for, the Company or any
Subsidiary due to death or Disability, all of the participant's options shall
become fully vested and exercisable and shall remain so for a period of 180 days
from the date of such death or Disability, but in no event after the expiration
date of the options; provided that the participant does not engage in
Competition during such 180-day period unless he or she received written consent
to do so from the Board or the Committee; provided further that the Board or
Committee may extend such exercise period (and related non-competition period)
in its discretion, but in no event may such extended exercise period extend
beyond the expiration date of the options.  Notwithstanding the foregoing, if
the Disability giving rise to the termination of employment is not within the
meaning of Section 22(e)(3) of the Code or any successor thereto, Incentive
Stock Options not exercised by such participant within 90 days after the date of
termination of employment will cease to qualify as Incentive Stock Options and
will be treated as Non-qualified Stock Options under the Plan if required to be
so treated under the Code.

 
B-11

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Exhibit B

(ii)           Retirement.  If a participant ceases to be a director, officer or
employee of, or to perform other services for, the Company or any Subsidiary
upon the occurrence of his or her Retirement, (A) all of the participant's
options that were exercisable on the date of Retirement shall remain exercisable
for, and shall otherwise terminate at the end of, a period of 90 days after the
date of Retirement, but in no event after the expiration date of the options;
provided that the participant does not engage in Competition during such 90 day
period unless he or she receives written consent to do so from the Board or the
Committee; provided further that the Board or Committee may extend such exercise
period (and related non-competition period) in its discretion, but in no event
may such extended exercise period extend beyond the expiration date of the
options, and (B) all of the participant's options that were not exercisable on
the date of Retirement shall be forfeited immediately upon such Retirement;
provided, however, that such options may become fully vested and exercisable in
the discretion of the Committee.  Notwithstanding the foregoing, Incentive Stock
Options not exercised by such participant within 90 days after Retirement will
cease to qualify as Incentive Stock Options and will be treated as Non-qualified
Stock Options under the Plan if required to be so treated under the Code.

(iii)           Discharge for Cause.  If a participant ceases to be a director,
officer or employee of , or to perform other services for, the Company or a
Subsidiary due to Cause, all of the participant's options shall expire and be
forfeited immediately upon such cessation, whether or not then exercisable.

(iv)           Other Termination.  Unless otherwise determined by the Committee,
if a participant ceases to be a director, officer or employee of, or to
otherwise perform services for, the Company or a Subsidiary for any reason other
than death, Disability, Retirement or Cause, (A) all of the participant's
options that were exercisable on the date of such cessation shall remain
exercisable for, and shall otherwise terminate at the end of, a period of 30
days after the date of such cessation, but in no event after the expiration date
of the options; provided that the participant does not engage in Competition
during such 30-day period unless he or she receives written consent to do so
from the Board or the Committee; provided further that the Board or Committee
may extend such exercise period (and related non-competition period) in its
discretion, but in no event may such extended exercise period extend beyond the
expiration date of the options, and (B) all of the participant's options that
were not exercisable on the date of such cessation shall be forfeited
immediately upon such cessation.

(v)           Change in Control.  If there is a Change in Control of the Company
and a participant is terminated from being a director, officer or employee of,
or from performing other services for the Company or a Subsidiary through an
"Involuntary Termination" effected within forty-eight (48) months following the
effective date of such Change in Control, all of participant's options shall
automatically accelerate and become fully vested and exercisable. Any option so
accelerated will remain exercisable until the earlier of (i) the expiration of
the option term or (ii) the end of a one-year period measured from the date of
the Involuntary Termination as defined herein. In addition, the Committee shall
have the authority to grant options that become fully vested and exercisable
automatically upon a Change in Control, whether or not the grantee is
subsequently terminated.

 
B-12

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Exhibit B

(f)           Forfeiture.  If a participant exercises any of his or her options
and, within one year thereafter, either (i) is terminated from the Company or a
Subsidiary for any of the reasons specified in the definition of "Cause" set
forth in Section 2(b), or (ii) engages in Competition without having received
written consent to do so from the Board or the Committee, then the participant
may, in the discretion of the Committee, be required to pay the Company the gain
represented by the difference between the aggregate selling price of the Shares
acquired upon the options' exercise (or, if the Shares were not then sold, their
aggregate Fair Market Value on the date of exercise) and the aggregate exercise
price of the options exercised (the "Option Gain"), without regard to any
subsequent increase or decrease in the Fair Market Value of the Common
Stock.  In addition, the Company may, in its discretion, deduct from any payment
of any kind (including salary or bonus) otherwise due to any such participant an
amount equal to the Option Gain.

(g)           Grant of Reload Options.  The Committee may provide (either at the
time of grant or exercise of an option), in its discretion, for the grant to a
grantee who exercises all or any portion of an option  ("Exercised Options") and
who pays all or part of such exercise price with shares of Common Stock, of an
additional option (a "Reload Option") for a number of shares of Common Stock
equal to the sum (the "Reload Number") of the number of shares of Common Stock
tendered for the Exercised Options plus, if so provided by the Committee, the
number of shares of Common Stock, if any, tendered by the grantee in connection
with the exercise of the Exercised Options to satisfy any federal, state or
local tax withholding requirements.  The terms of each Reload Option, including
the date of its expiration and the terms and conditions of its exercisability
and transferability, shall be the same as the terms of the Exercised Option to
which it relates, except that (i) the grant date for each Reload Option shall be
the date of exercise of the Exercised Option to which it relates and (ii) the
exercise price for each Reload Option shall be the Fair Market Value of the
Common Stock on the grant date of the Reload Option.

7.             [Intentionally Omitted].

8.             Restricted Stock.  The Committee may at any time and from time to
time grant Shares of restricted stock under the Plan to such participants and in
such amounts as it determines.  Each grant of Shares of restricted stock shall
specify the applicable restrictions on such Shares, the duration of such
restrictions (which shall be at least six months except as otherwise determined
by the Committee or provided in the third paragraph of this Section 8), and the
time or times at which such restrictions shall lapse with respect to all or a
specified number of Shares that are part of the grant.

The participant will be required to pay the Company the aggregate par value of
any Shares of restricted stock (or such larger amount as the Board may determine
to constitute capital under Section 154 of the Delaware General Corporation Law,
as amended, or any successor thereto) within ten days of the date of grant,
unless such Shares of restricted stock are treasury shares.  Unless otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under the Plan will be held in escrow by the Company on the
participant's behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor.  Except as
otherwise provided by the Committee, during such period of restriction the
participant shall have all of the rights of a holder of Common Stock, including
but not limited to the rights to receive dividends and to vote, and any stock or
other securities received as a distribution with respect to such participant's
restricted stock shall be subject to the same restrictions as then in effect for
the restricted stock. Except as otherwise provided by the Committee, if a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company and its Subsidiaries due to death, Disability
or Retirement during any period of restriction, all restrictions on Shares of
restricted stock granted to such participant shall lapse.  At such time as a
participant ceases to be a director, officer or employee of, or otherwise
performing services for, the Company or its Subsidiaries for any other reason,
all Shares of restricted stock granted to such participant on which the
restrictions have not lapsed shall be immediately forfeited to the Company.

 
B-13

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Exhibit B

If there is a Change in Control of the Company and a participant is terminated
from being a director, officer or employee of, or from performing other services
for the Company or a Subsidiary through an Involuntary Termination effected
within forty-eight (48) months following the effective date of such Change in
Control, all restrictions on Shares of restricted stock granted to such
participant shall automatically lapse.  In addition, the Committee shall have
the authority to grant shares of restricted stock with respect to which all
restrictions shall lapse automatically upon a Change in Control, whether or not
the grantee is subsequently terminated.

9.           Restricted Stock Units; Deferred Stock Units.  The Committee may at
any time and from time to time grant restricted stock units under the Plan to
such participants and in such amounts as it determines.  Each grant of
restricted stock units shall specify the applicable restrictions on such units,
the duration of such restrictions (which shall be at least six months except as
otherwise determined by the Committee or provided in the third paragraph of this
Section 9), and the time or times at which such restrictions shall lapse with
respect to all or a specified number of units that are part of the grant.

Each restricted stock unit shall be equivalent in value to one share of Common
Stock and shall entitle the participant to receive from the Company at the end
of the vesting period (the "Vesting Period") applicable to such unit one Share,
unless the participant elects in a timely fashion to defer the receipt of such
Shares, as provided below.  Restricted stock units may be granted without
payment of cash or consideration to the Company; provided that participants
shall be required to pay to the Company the aggregate par value of the Shares
received from the Company within ten days of the issuance of such Shares unless
such Shares are treasury shares.

Except as otherwise provided by the Committee, during the restriction period the
participant shall not have any rights as a shareholder of the Company; provided
that the participant shall have the right to receive accumulated dividends or
distributions with respect to the corresponding number of shares of Common Stock
underlying each restricted stock unit at the end of the Vesting Period, unless
such restricted stock units are converted into deferred stock units, in which
case such accumulated dividends or distributions shall be paid by the Company to
the participant at such time as the deferred stock units are converted into
Shares.

 
B-14

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Exhibit B

Except as otherwise provided by the Committee, if a participant ceases to be a
director, officer or employee of, or to otherwise perform services for, the
Company or any Subsidiary due to death, Disability or Retirement during any
period of restriction, all restrictions on restricted stock units granted to
such participant shall lapse.  At such time as a participant ceases to be a
director, officer or employee of, or otherwise performing services for, the
Company or any Subsidiary for any other reason, all restricted stock units
granted to such participant on which the restrictions have not lapsed shall be
immediately forfeited to the Company.

If there is a Change in Control of the Company and a participant is terminated
from being a director, officer or employee of, or from performing other services
for the Company or a Subsidiary through an Involuntary Termination effected
within forty-eight (48) months following the effective date of such Change in
Control, all restrictions on restricted stock units granted to such participant
shall automatically lapse.  In addition, the Committee shall have the authority
to grant restricted stock units with respect to which all restrictions shall
lapse automatically upon a Change in Control, whether or not the grantee is
subsequently terminated.

A participant may elect by written notice to the Company, which notice must be
made before the later of (i) the close of the tax year preceding the year in
which the restricted stock units are granted or (ii) 30 days of first becoming
eligible to participate in the Plan (or, if earlier, the last day of the tax
year in which the participant first becomes eligible to participate in the plan)
and on or prior to the date the restricted stock units are granted, to defer the
receipt of all or a portion of the Shares due with respect to the vesting of
such restricted stock units; provided that the Committee may impose such
additional restrictions with respect to the time at which a participant may
elect to defer receipt of Shares subject to the deferral election, and any other
terms with respect to a grant of restricted stock units to the extent the
Committee deems necessary to enable the participant to defer recognition of
income with respect to such units until the Shares underlying such units are
issued or distributed to the participant.  Upon such deferral, the restricted
stock units so deferred shall be converted into deferred stock units.  Except as
provided below, delivery of Shares with respect to deferred stock units shall be
made at the end of the deferral period set forth in the participant's deferral
election notice (the "Deferral Period").  Deferral Periods shall be no less than
one year after the vesting date of the applicable restricted stock units.

Except as otherwise provided by the Committee, during such Deferral Period the
participant shall not have any rights as a shareholder of the Company; provided
that, the participant shall have the right to receive accumulated dividends or
distributions with respect to the corresponding number of shares of Common Stock
underlying each deferred stock unit at the end of the Deferral Period when such
deferred stock units are converted into Shares.

Except as otherwise provided by the Committee, if a Participant ceases to be a
director, officer or employee of, or to otherwise perform services for, the
Company or any Subsidiary upon his or her death prior to the end of the Deferral
Period, the participant shall receive payment in Shares in respect of such
participant's deferred stock units which would have matured or been earned at
the end of such Deferral Period as if the applicable Deferral Period had ended
as of the date of such participant's death. Except as otherwise provided by the
Committee, if a participant ceases to be a director, officer or employee of, or
to otherwise perform services for, the Company or any Subsidiary upon becoming
disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement or
for any other reason except termination for Cause prior to the end of the
Deferral Period, the participant shall receive payment in Shares in respect of
such participant's deferred stock units at the end of the applicable Deferral
Period or on such accelerated basis as the Committee may determine, to the
extent permitted by regulations issued under Section 409A(a)(3) of the Code.

 
B-15

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Exhibit B

Except as otherwise provided by the Committee, if a participant ceases to be a
director, officer or employee of, or to otherwise perform services for, the
Company or any Subsidiary due to termination for Cause such participant shall
immediately forfeit any deferred stock units which would have matured or been
earned at the end of the applicable Deferral Period.

Except as otherwise provided by the Committee, in the event of a Change in
Control that also constitutes a "change in the ownership or effective control
of" the Company, or a change in the ownership of a substantial portion of the
Company's assets (in each case as determined under regulations issued pursuant
to Section 409A(a)(2)(A)(v) of the Code), a participant shall receive payment in
Shares in respect of such participant's deferred stock units which would have
matured or been earned at the end of the applicable Deferral Period as if such
Deferral Period had ended immediately prior to the Change in Control; provided,
however, that if an event that constitutes a Change in Control hereunder does
not constitute a "change in control" under Section 409A of the Code (or the
regulations promulgated thereunder), no payments with respect to the deferred
stock units shall be made under this paragraph to the extent such payments would
constitute an impermissible acceleration under Section 409A of the Code.

10.           Performance Awards.  Performance awards may be granted to
participants at any time and from time to time as determined by the
Committee.  The Committee shall have complete discretion in determining the size
and composition of performance awards granted to a participant.  The period over
which performance is to be measured (a "performance cycle") shall commence on
the date specified by the Committee and shall end on the last day of a fiscal
year specified by the Committee.  A performance award shall be paid no later
than the 15th day of the third month following the completion of a performance
cycle.  Performance awards may include (i) specific dollar-value target awards
(ii) performance units, the value of each such unit being determined by the
Committee at the time of issuance, and/or (iii) performance Shares, the value of
each such Share being equal to the Fair Market Value of a share of Common Stock.

The value of each performance award may be fixed or it may be permitted to
fluctuate based on a performance factor (e.g., return on equity) selected by the
Committee.

 
B-16

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Exhibit B

The Committee shall establish performance goals and objectives for each
performance cycle on the basis of such criteria and objectives as the Committee
may select from time to time, including, without limitation, the performance of
the participant, the Company, one or more of its Subsidiaries or divisions or
any combination of the foregoing.  During any performance cycle, the Committee
shall have the authority to adjust the performance goals and objectives for such
cycle for such reasons as it deems equitable.

The Committee shall determine the portion of each performance award that is
earned by a participant on the basis of the Company's performance over the
performance cycle in relation to the performance goals for such cycle. The
earned portion of a performance award may be paid out in Shares, cash, Other
Company Securities, or any combination thereof, as the Committee may determine.

A participant must be a director, officer or employee of, or otherwise perform
services for, the Company or its Subsidiaries at the end of the performance
cycle in order to be entitled to payment of a performance award issued in
respect of such cycle; provided, however, that except as otherwise determined by
the Committee, if a participant ceases to be a director, officer or employee of,
or to otherwise perform services for, the Company and its Subsidiaries upon his
or her death, Retirement, or Disability prior to the end of the performance
cycle, the participant shall earn a proportionate portion of the performance
award based upon the elapsed portion of the performance cycle and the Company's
performance over that portion of such cycle. In the event of a Change in
Control, a participant shall earn no less than the portion of the performance
award that the participant would have earned if the applicable performance
cycle(s) had terminated as of the date of the Change in Control.

11.           Withholding Taxes.

(a)              Participant Election.  Unless otherwise determined by the
Committee, a participant may elect to deliver shares of Common Stock (or have
the Company withhold shares acquired upon exercise of an option or deliverable
upon grant or vesting of restricted stock, as the case may be) to satisfy, in
whole or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or the delivery of restricted stock
upon grant or vesting, as the case may be.  Such election must be made on or
before the date the amount of tax to be withheld is determined.  Once made, the
election shall be irrevocable.  The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver
or have the Company withhold shares of Common Stock pursuant to this Section
11(a), such delivery or withholding must be made subject to the conditions and
pursuant to the procedures set forth in Section 6(b) with respect to the
delivery or withholding of Common Stock in payment of the exercise price of
options.  Shares withheld to pay withholding taxes may not exceed the minimum
statutory withholding rate.

(b)              Company Requirement.  The Company may require, as a condition
to any grant or exercise under the Plan or to the delivery of certificates for
Shares issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 11(a) or this Section 11(b), of federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or delivery of Shares.  The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or delivery of Shares under the Plan.  Shares withheld to
pay withholding taxes may not exceed the minimum statutory withholding rate.

 
B-17

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Exhibit B

12.           Written Agreement; Vesting.  Unless the Committee determines
otherwise, each employee to whom a grant is made under the Plan shall enter into
a written agreement with the Company that shall contain such provisions,
including without limitation vesting requirements, consistent with the
provisions of the Plan, as may be approved by the Committee.  Unless the
Committee determines otherwise and except as otherwise provided in Sections 6,
7, 8, 9 and 10 in connection with a Change in Control or certain occurrences of
termination, no grant under this Plan may be exercised, and no restrictions
relating thereto may lapse, within six months of the date such grant is made.

13.           Transferability.  Unless the Committee determines otherwise, no
award granted under the Plan shall be transferable by a participant other than
by will or the laws of descent and distribution or to a participant's Family
Member by gift or a qualified domestic relations order as defined by the
Code.  Unless the Committee determines otherwise, an option may be exercised
only by the optionee or grantee thereof; by his or her Family Member if such
person has acquired the option by gift or qualified domestic relations order; by
the executor or administrator of the estate of any of the foregoing or any
person to whom the option is transferred by will or the laws of descent and
distribution; or by the guardian or legal representative of any of the
foregoing; provided that Incentive Stock Options may be exercised by any Family
Member, guardian or legal representative only if permitted by the Code and any
regulations thereunder.  All provisions of this Plan shall in any event continue
to apply to any award granted under the Plan and transferred as permitted by
this Section 13, and any transferee of any such award shall be bound by all
provisions of this Plan as and to the same extent as the applicable original
grantee.

14.           Listing, Registration and Qualification.  If the Committee
determines that the listing, registration or qualification upon any securities
exchange or under any law of Shares subject to any option, performance award,
restricted stock unit, deferred stock unit or restricted stock grant is
necessary or desirable as a condition of, or in connection with, the granting of
same or the issue or purchase of Shares thereunder, no such option may be
exercised in whole or in part, no such performance award may be paid out, and no
Shares may be issued, unless such listing, registration or qualification is
effected free of any conditions not acceptable to the Committee.

15.           Transfer of Employee.  The transfer of an employee from the
Company to a Subsidiary, from a Subsidiary to the Company, or from one
Subsidiary to another shall not be considered a termination of employment; nor
shall it be considered a termination of employment if an employee is placed on
military or sick leave or such other leave of absence which is considered by the
Committee as continuing intact the employment relationship.

 
B-18

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Exhibit B

16.           Adjustments.  In the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
distribution of assets, or any other change in the corporate structure or shares
of the Company, the Committee shall make such adjustment as it deems appropriate
in the number and kind of Shares or other property available for issuance under
the Plan (including, without limitation, the total number of Shares available
for issuance under the Plan pursuant to Section 4), in the number and kind of
options, Shares, restricted stock units, deferred stock units or other property
covered by grants previously made under the Plan, and in the exercise price of
outstanding options.  Any such adjustment shall be final, conclusive and binding
for all purposes of the Plan.  In the event of any merger, consolidation or
other reorganization in which the Company is not the surviving or continuing
corporation or in which a Change in Control is to occur, all of the Company's
obligations regarding awards that were granted hereunder and that are
outstanding on the date of such event shall, on such terms as may be approved by
the Committee prior to such event, be (a) canceled in exchange for cash or other
property (but, with respect to vested deferred stock units, only if such merger,
consolidation, other reorganization, or Change in Control constitutes a "change
in ownership or control" of the Company or a "change in the ownership of a
substantial portion" of the Company's assets, as determined pursuant to
regulations issued under Section 409A(a)(2)(A)(v) of the Code) or (b) assumed by
the surviving or continuing corporation.

Without limitation of the foregoing, in connection with any transaction of the
type specified by clause (iii) of the definition of a Change in Control in
Section 2(c), the Committee may, in its discretion, (i) cancel any or all
outstanding options under the Plan in consideration for payment to the holders
thereof of an amount equal to the portion of the consideration that would
have  been payable to such holders pursuant to such transaction if their options
had been fully exercised immediately prior to such transaction, less the
aggregate exercise price that would have been payable therefor, or (ii) if the
amount that would have been payable to the option holders pursuant to such
transaction if their options had been fully exercised immediately prior thereto
would be equal to or less than the aggregate exercise price that would have been
payable therefor, cancel any or all such options for no consideration or payment
of any kind.  Payment of any amount payable pursuant to the preceding sentence
may be made in cash or, in the event that the consideration to be received in
such transaction includes securities or other property, in cash and/or
securities or other property in the Committee's discretion.

17.           Amendment and Termination of the Plan.  The Board of Directors or
the Committee, without  approval of the stockholders, may amend or terminate the
Plan, except that no amendment shall become effective without prior approval of
the stockholders of the Company if stockholder approval would be required by
applicable law or regulations or by any listing requirement of the principal
stock exchange on which the Common Stock is then listed.

18.           Amendment or Substitution of Awards under the Plan.  The terms of
any outstanding award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate, including,
but not limited to, acceleration of the date of exercise of any award and/or
payments thereunder or of the date of lapse of restrictions on Shares (but only
to the extent permitted by regulations issued under Section 409A(a)(3) of the
Code); provided that, except as otherwise provided in Section 16, no such
amendment shall adversely affect in a material manner any right of a participant
under the award without his or her written consent, and provided further that
the Committee shall not reduce the exercise price of any options awarded under
the Plan without approval of the stockholders of the Company.  The Committee
may, in its discretion, permit holders of awards under the Plan to surrender
outstanding awards in order to exercise or realize rights under other awards, or
in exchange for the grant of new awards, or require holders of awards to
surrender outstanding awards as a condition precedent to the grant of new awards
under the Plan, but only if such surrender, exercise, realization, exchange, or
grant (a) would not constitute a distribution of deferred compensation for
purposes of Section 409A(a)(3) of the Code or (b) constitutes a distribution of
deferred compensation that is permitted under regulations issued pursuant to
Section 409A(a)(3) of the Code.

 
B-19

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Exhibit B

19.           Commencement Date; Termination Date.  The date of commencement of
the Plan shall be the date on which the Company's Registration Statement on Form
S-1 (File No. 333-119111) is declared effective by the Securities and Exchange
Commission.  Unless previously terminated upon the adoption of a resolution of
the Board terminating the Plan, the Plan shall terminate at the close of
business on the ten year anniversary of the date on which the Company's
Registration Statement on Form S-1 (File No. 333-119111) is declared effective
by the Securities and Exchange Commission.  No termination of the Plan shall
materially and adversely affect any of the rights or obligations of any person,
without his or her written consent, under any grant of options or other
incentives theretofore granted under the Plan.

20.           Severability.  Whenever possible, each provision of the Plan shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of the Plan.

21.           Governing Law.  The Plan shall be governed by the corporate laws
of the State of Delaware, without giving effect to any choice of law provisions
that might otherwise refer construction or interpretation of the Plan to the
substantive law of another jurisdiction.
 
 
B-20

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