Exhibit 10.70
 
BUILDING MATERIALS HOLDING CORPORATION
 
Severance Plan for Certain Executive Officers,
Senior Management and Key Employees of the
Company and its Subsidiaries
 
This Severance Plan (the "Plan") was adopted by the Board of Directors of BMC
West Corporation, a Delaware corporation, on July 20, 1993 and was assumed by
Building Materials Holding Corporation, a Delaware corporation (together with
its predecessor, the "Company") as of September 23, 1997, for the benefit of
certain executive officers, senior management and key employees of the Company
and its Subsidiaries. The Plan, as amended and restated, was confirmed by the
Board of Directors on February 17, 2000, May 7, 2003, May 3, 2004, May 1, 2006
and June 28, 2006.
 
1. Purpose
 
The Company, on behalf of itself and its stockholders, desires to continue to
attract and retain well-qualified executive and key personnel who are an
integral part of the management of the Company, such as the Designated
Employees, and to assure itself of continuity of management. The principal
purposes of the Plan are to (i) provide an incentive to the Designated Employees
to remain in the employ of the Company, notwithstanding any uncertainty and job
insecurity which may be created by an actual or prospective Change in Control,
(ii) encourage the Designated Employees' full attention and dedication to the
Company currently and in the event of any actual or prospective Change in
Control, and (iii) provide an incentive for the Designated Employees to be
objective concerning any potential Change in Control and to fully support any
Change in Control transaction approved by the Board of Directors.
 
2. Definitions
 
Terms not otherwise defined in the Plan shall have the meanings set forth in
this Section 2.
 
(a) Cash Compensation. "Cash Compensation" shall mean the sum of (i) the higher
of the Designated Employee's annual base salary (x) at the time the Notice of
Termination provided for in Section 4(c) of the Plan is given or (y) immediately
prior to a Change in Control, and (ii) an amount equal to the highest cash bonus
paid to the Designated Employee under the Company's bonus program for any of
such prior three years, and (iii) the highest amount contributed as a Company
matching or profit-sharing contribution on behalf of the Designated Employee
under the Company's 401(k) plan (or any successor plan) for any of the three
fiscal years immediately preceding the year in which the Date of Termination
occurs, and (iv) the highest amount allocated or accrued (whether or not funded)
as a Company contribution on behalf of the Designated Employee under the
Company's supplemental executive retirement plan (or any successor plan) for any
of the three fiscal years immediately preceding the year in which the Date of
Termination occurs.
 
(b) Cause. For purposes of the Plan and any agreements entered into pursuant to
the Plan only, "Cause" shall mean: (i) the conviction by a court of competent
jurisdiction of, or entry of a plea of guilty or of no contest to, any felony
involving moral turpitude of dishonesty, (ii) a willful dereliction of duty or
intentional and malicious conduct contrary to the best interests of the Company
or its business if such dereliction of duty or misconduct is not corrected
within thirty (30) days after written notice thereof from the Company, or (iii)
a refusal to perform reasonable services customarily performed by such
Designated Employee (other than by reason of a Disability) if such refusal is
not corrected within thirty (30) days after written notice thereof from the
Company; provided, however, that the Designated Employee shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to the Designated Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Company's Board of Directors at a meeting of the Board called and held for the
purpose (after reasonable notice to the Designated Employee and an opportunity
for the Designated Employee, together with the Designated Employee's counsel, to
be heard before the Board), finding that in the good faith opinion of the Board
the Designated Employee was guilty of the conduct set forth above and specifying
the particulars thereof in detail. Notwithstanding the foregoing, the Designated
Employee shall have the right to contest his termination for Cause (for purposes
of this Agreement) by arbitration in accordance with the provisions of the Plan.
 

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(c) Change in Control. A "Change in Control" of the Company shall be deemed to
have occurred if (i) there shall be consummated (x) any consolidation, merger or
similar reorganization or other transaction involving the Company, other than a
transaction in which the holders of the Company's Common Stock immediately prior
to the transaction have the same proportionate ownership of common stock of the
Company or other surviving corporation in the transaction immediately after the
transaction, or (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the business and/or assets of the Company, or (ii) the stockholders of the
Company approve a plan or proposal for the liquidation or dissolution of the
Company, or (iii) any "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including any
group), shall become the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of thirty-five (35%) percent or more of
the Company's outstanding Common Stock, or (iv) if for any reason a majority of
the Board is not comprised of "Continuing Directors," where a "Continuing
Director" of the Corporation as of any date means a member of the Board who (x)
was a member of the Board two years prior to such date and at all times through
such date or (y) was nominated for election or elected to the Board with the
affirmative vote of at least two-thirds of the directors who were Continuing
Directors at the time of such nomination or election; provided, however, that no
individual initially elected or nominated as a director of the Corporation as a
result of an actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be a Continuing
Director.
 
(d) Code. "Code" shall refer to the Internal Revenue Code of 1986, as amended
from time to time.
 
(e) Designated Employees. "Designated Employees"' shall refer to those employees
of the Company and its Subsidiaries who are designated on Schedule A attached
hereto and incorporated herein by reference ("Schedule A"), and such other
employees of the Company and its Subsidiaries as the Board of Directors of the
Company shall designate from time to time. The Designated Employees may be
divided into certain categories for purposes of the Plan as set forth on
Schedule A.
 
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(f) Good Reason. A Designated Employee's termination of employment with the
Company shall be deemed for "Good Reason" if any of the following events occur
without the Designated Employee's express written consent and the Designated
Employee provides his Notice of Termination upon or within six months after such
event occurring:
 
(i) The assignment to the Designated Employee by the Company of duties
inconsistent with, or a substantial alteration in the nature or status of, the
Designated Employee's responsibilities immediately prior to a Change in Control
of the Company (or thereafter if such duties and responsibilities change
following a Change in Control with the Designated Employee’s consent) other than
any such alteration primarily attributable to the fact that the Company's
securities are no longer publicly traded;
 
(ii) A reduction by the Company in the Designated Employee's annual base salary
or annual cash bonus opportunity as in effect on the date of a Change in Control
of the Company or as in effect thereafter if such base salary and/or bonus
opportunity has been increased;
 
(iii) Any failure by the Company to continue in effect without substantial
change any compensation, incentive, welfare or retirement benefit plan or
arrangement, as well as any plan or arrangement whereby the Designated Employee
may acquire securities of the Company or its publicly traded parent, in which
the Designated Employee is participating at the time of a Change in Control of
the Company (or any other plans providing the Designated Employee with
substantially similar benefits) (hereinafter referred to as "Benefit Plans"), or
the taking of any action by the Company which would adversely affect, either as
to the past or prospectively, the Designated Employee's participation in or
materially reduce or deprive the Designated Employee of the Designated
Employee's benefits that were provided under any such Benefit Plan at the time
of a Change in Control of the Company; unless an equitable substitute
arrangement (embodied in an ongoing substitute or alternative Benefit Plan) has
been made for the benefit of the Designated Employee with respect to the Benefit
Plan in question; provided that for purposes of the foregoing, "Benefit Plans"
shall include, but not be limited to, the Company's stock option plans, 401 (k)
plan, annual bonus plan, long-term incentive plan, or any other plan or
arrangement to receive and exercise stock options or stock appreciation rights,
supplemental pension plan, insured medical reimbursement plan, automobile
benefits, executive financial planning, group life insurance plan, personal
catastrophe liability insurance, medical, dental, accident and disability plans;
 
(iv) Relocation to any place more than 25 miles from the office regularly
occupied by the Designated Employee prior to the time of a Change in Control,
except for required travel by the Designated Employee on the Company's business
to an extent substantially consistent with the Designated Employee's business
travel obligations at the time of a Change in Control of the Company;
 
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(v) Any material breach by the Company of any provision of the Plan or of any
agreement entered into pursuant to the Plan or any other material agreement
between the Company or any subsidiary and the Designated Employee; or
 
(vi) The failure by the Company or by any successor or assign of the Company
(whether by operation of law or otherwise, including any surviving company in a
merger or similar transaction involving the Company), within ten business days
following a Change in Control to deliver to the Designated Employee an agreement
expressly reaffirming its obligations under or agreeing to assume and comply
with the obligations of the Company under this Plan and any agreement entered
into with the Designated Employee pursuant to the Plan.
 
(g) Independent Director. "Independent Director" shall have the meaning ascribed
to such term in the Company's Rights Plan as initially adopted by the Board of
Directors.
 
(h) Key Employee. "Key Employee" shall have the meaning ascribed to such term in
Section 416(i) of the Code without regard to paragraph (5) thereof.
 
3. Beneficiaries
 
Each of the Designated Employees shall be a beneficiary of the Plan and entitled
to receive the Benefits set forth herein. The Company and each of the Designated
Employees will execute an agreement reiterating or incorporating the obligations
and benefits which arise from the Plan.
 
4. Termination in Connection with Change in Control
 
(a) Termination of Employment. If a Change in Control of the Company shall have
occurred while the Designated Employee is still an employee of the Company, the
Designated Employee shall be entitled to the compensation provided in Section 5
upon the subsequent termination, within three years of such Change in Control,
of the Designated Employee's employment with the Company unless such termination
is as a result of (i) the Designated Employee's death; (ii) the Designated
Employee's Disability (as defined in Section 4(b) below); (iii) the Designated
Employee's retirement in accordance with the Company's retirement policies; (iv)
the Designated Employee's termination by the Company for Cause; or (v) the
Designated Employee's decision to terminate his employment with the Company
other than for Good Reason. In addition, if, prior to a Change in Control, the
Designated Employee's employment with the Company shall be terminated other than
as a result of one of the circumstances enumerated in Section 4(a)(i) through
(v), and, within three (3) months following the date of such termination of
employment, a Change in Control shall occur, the Designated Employee shall be
entitled to the compensation provided in Section 5, determined as if the
Designated Employee’s employment had so terminated following a Change in
Control, which compensation shall be reduced by any other severance compensation
previously paid to the Designated Employee in respect of such termination of
employment.
 
(b) Disability. If, as a result of the Designated Employee's incapacity due to
physical or mental illness, the Designated Employee shall have been absent from
his duties with the Company on a full-time basis for six months and the Company
thereafter gives the Designated Employee thirty (30) day's written notice of its
intention to terminate his employment, upon the expiration of such thirty (30)
day period the Company may terminate the Designated Employee's employment for
"Disability" if the Designated Employee shall not have returned to the full-time
performance of the Designated Employee's duties.
 
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(c) Notice of Termination. Any purported termination of the Designated
Employee's employment by the Company or the Designated Employee hereunder shall
be communicated by a Notice of Termination given to the other party in
accordance with the terms of the agreement entered into pursuant to the Plan.
For purposes of the Plan and any agreement entered into pursuant hereto, a
"Notice of Termination" shall mean a written notice which shall indicate whether
or not the termination is as a result of any of the situations enumerated in
Section 4(a) above and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for asserting that the termination of
the Designated Employee's employment is or is not under the provision so
indicated.
 
(d) Date of Termination. "Date of Termination" shall mean (i) if the Designated
Employee is terminated by the Company for Disability, thirty (30) days after the
Notice of Termination is given to the Designated Employee (provided that the
Designated Employee shall not have returned to the performance of the Designated
Employee's duties on a full-time basis during such thirty (30) day period) or
(ii) if the Designated Employee's employment is terminated by the Company for
any other reason or by the Designated Employee, the date on which a Notice of
Termination is given.
 
5. Severance Compensation upon Termination of Employment
 
If the Designated Employee's employment with the Company shall be terminated
other than as a result of one of the circumstances enumerated in Section 4(a)(i)
through (v) of the Plan, then the Company shall, subject to the execution and
non-revocation of a mutual release of claims by the Designated Employee in the
form set forth on Exhibit A hereto:
 
(i) Pay to the Designated Employee as severance pay in a lump sum, in cash, on
or before the tenth day following the Date of Termination, an amount equal to
the multiple specified on Schedule A times the Designated Employee's Cash
Compensation;
 
(ii) Arrange to provide the Designated Employee, for the period (or such shorter
period as the Designated Employee may elect) specified on Schedule A, with
health and life insurance substantially similar to those insurance benefits
which the Designated Employee is receiving immediately prior to either (A) the
Change in Control or (B) the Notice of Termination, as elected by the Designated
Employee. Benefits otherwise receivable by the Designated Employee pursuant to
this Section 5(ii) shall be reduced to the extent comparable benefits are
actually received by the Designated Employee during such specified period
following his termination (or such shorter period elected by the Designated
Employee) from a subsequent employer or through self-employment, and any such
benefits actually received by the Designated Employee shall be reported by him
to the Company;
 
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(iii) Pay to the Designated Employee a single lump sum payment, on or before the
tenth day following the Date of Termination, equal to the excess of (x) over
(y), where (x) is equal to the lump sum present value of the pension benefit
that the Designated Employee would receive under any pension plan which is or
has been maintained by the Company and in which the Designated Employee is or
was a participant (the "Pension Plan"), at his earliest benefit commencement
date under the Pension Plan computed by increasing his actual number of years of
credited service performed as of the date of his termination of employment, or,
if earlier, the termination of the Pension Plan, by the number of years
specified on Schedule A, and (y) is equal to the lump sum present value of the
pension benefit actually payable to the Designated Employee on his earliest
benefit commencement date under the Pension Plan based on the actual number of
years of credited service performed as of the Designated Employee's Date of
Termination, or, if earlier, the termination of the Pension Plan. The foregoing
lump sum present value amounts shall be computed using the actuarial factors
under the Pension Plan in effect on the Designated Employee's Date of
Termination or, if earlier, the termination of the Pension Plan;
 
(iv) Pay to the Designated Employee, on or before the tenth day following the
Date of Termination, an amount equal to the Designated Employee’s target or base
bonus opportunity for the year in which the Date of Termination occurs under the
Company’s annual cash-based incentive compensation plan, prorated by multiplying
such amount by a fraction, the numerator of which shall be the actual number of
days that have elapsed during such year prior to the Date of Termination, and
the denominator of which shall be 365; and
 
(v) Pay to the Designated Employee, on or before the tenth day following the
Date of Termination, any gross-up amounts as calculated under Section 6 of the
Plan.
 
Notwithstanding the foregoing, in the event that the multiples set forth on
Schedule A for any Designated Employee are greater than the number of full years
remaining until such Designated Employee's agreed upon retirement date or normal
retirement age of 65, the multiples shall be automatically reduced to the number
of years and/or partial years (measured by months) remaining until said
Designated Employee's retirement date. In addition, following the expiration of
the health insurance benefits continuation provided under Section 5(ii), each
Designated Employee who, at the time of his termination of employment, was an
officer of the Company shall be eligible to participate in the Company's health
care plan, either on an individual basis or family basis to include his
dependent spouse, until such time as he becomes eligible to participate in the
BMHC Retirement Health Care Plan ("Retiree Health Care Plan"), subject to such
Designated Employee's payment of one-half of the applicable COBRA premiums. If a
Designated Employee who, at the time of his termination of employment, was an
officer of the Company shall be eligible and elects to participate in the
Retiree Health Care Plan in accordance with its terms and conditions, such
Designated Employee shall only be required to pay one-half of the applicable
premium under the Retiree Health Care Plan.
 
In addition, notwithstanding anything herein to the contrary, to the extent that
the Board of Directors of the Company determines, in its sole discretion, that
any payments or benefits to be provided hereunder to or for the benefit of a
Designated Employee who is also a Key Employee would be subject to the
additional tax imposed under Section 409A(a)(1)(B) of the Code or any other
taxes or penalties imposed under Section 409A of the Code or a successor or
comparable provision (the "Section 409A Taxes"), the commencement of such
payments and/or benefits shall be delayed until the date that is six months
following the Date of Termination or such earlier date that, as determined by
the Company, is sufficient to avoid the imposition of Section 409A Taxes (such
date is referred to herein as the "Distribution Date"). In the event that the
Board of Directors determines that the commencement of any of the benefits to be
provided under Section 5(ii) are to be delayed pursuant to the preceding
sentence, the Company shall require the Designated Employee to bear the full
cost of such benefits until the Distribution Date at which time the Company
shall reimburse the Designated Employee for all such costs. If any payments or
benefits are delayed pursuant to this paragraph, such delayed payments or
benefits, when paid or reimbursed, shall be increased by an amount equal to
interest on such payments or reimbursements for the period between the Date of
Termination and the applicable Distribution Date at a rate equal to the prime
rate in effect as of the Date of Termination plus one point (for this purpose,
the prime rate will be based on the rate published from time to time in The Wall
Street Journal).
 
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6. Gross-up Payments
 
(a) Gross-up in Benefits For "Parachute Payment". In the event that, as a result
of payments in the nature of compensation to or for the benefit of a Designated
Employee under this Plan or otherwise in connection with a Change in Control,
any state, local or federal taxing authority imposes any taxes on the Designated
Employee that would not be imposed but for the occurrence of a Change in
Control, including any excise tax under Section 4999 of the Code and any
successor or comparable provision (other than ordinary income and employment
taxes imposed on such payments), then, in addition to the benefits provided for
under Sections 5(i) through (iv) or otherwise (including Section 6(b)), the
Company (including any successor to the Company) shall pay to the Designated
Employee at the time any such amounts are paid an amount equal to the amount of
any such tax imposed or to be imposed on the Designated Employee (the amount of
any such payment, the "Parachute Tax Reimbursement"). In addition, the Company
(including any successor to the Company) shall "gross up" such Parachute Tax
Reimbursement by paying to the Designated Employee at the same time an
additional amount equal to the aggregate amount of any additional taxes (whether
income taxes, excise taxes, special taxes, additional taxes, employment taxes or
otherwise) that are or will be payable by the Designated Employee as a result of
the Parachute Tax Reimbursement being paid or payable to the Designated Employee
and/or as a result of the additional amounts paid or payable to the Designated
Employee pursuant to this sentence, such that after payment of such additional
taxes the Designated Employee shall have been paid on an after-tax basis an
amount equal to the Parachute Tax Reimbursement.
 
(b) Gross-up in Benefits For Additional Taxes under Section 409A of the Code. In
the event that, as a result of payments to or for the benefit of a Designated
Employee under this Plan, the Designated Employee is subject to the Section 409A
Taxes, then, in addition to the benefits provided for under Sections 5(i)
through (iv) or otherwise (including Section 6(a)), the Company (including any
successor to the Company) shall pay to the Designated Employee at the time any
such amounts are paid an amount equal to the amount of any such Section 409A Tax
imposed or to be imposed on the Designated Employee (the amount of any such
payment, the "Section 409A Tax Reimbursement"). In addition, the Company
(including any successor to the Company) shall "gross up" such Section 409A Tax
Reimbursement by paying to the Designated Employee at the same time an
additional amount equal to the aggregate amount of any additional taxes (whether
income taxes, excise taxes, special taxes, additional taxes, employment taxes or
otherwise) that are or will be payable by the Designated Employee as a result of
the Section 409A Tax Reimbursement being paid or payable to the Designated
Employee and/or as a result of the additional amounts paid or payable to the
Designated Employee pursuant to this sentence, such that after payment of such
additional taxes the Designated Employee shall have been paid on an after-tax
basis an amount equal to the Section 409A Tax Reimbursement.
 
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7. Arbitration
 
The Company and, by accepting participation in the Plan, each Designated
Employee agree that any and all disputes or controversies arising out of or
relating to the Plan, including, without limitation, any claim of fraud, any
agreement entered into between the parties pursuant to the Plan or the general
validity or enforceability of either, shall be governed by the laws of the State
of Delaware, without giving effect to its conflict of laws provisions, and shall
be submitted to binding arbitration in accordance with the employment
arbitration rules of Judicial Arbitration and Mediation Services ("JAMS") by a
single impartial arbitrator experienced in employment law selected as follows:
if the Company and the applicable Designated Employee are unable to agree upon
an impartial arbitrator within ten (10) days of a request for arbitration, the
parties shall request a panel of employment arbitrators from JAMS and
alternative strike names until a single arbitrator remains. The arbitration
shall be conducted in the city where the Designated Employee's principal office
was maintained prior to his termination of employment, applying the laws of the
State of Delaware, and the Company and, by accepting participation in the Plan,
each Designated Employee agree to submit to the jurisdiction of the arbitrator
selected in accordance with JAMS' rules and procedures. All fees and expenses of
any arbitration, including the Designated Employee's reasonable legal fees and
costs, are to be advanced by the Company. The Company and, by accepting
participation in the Plan, each Designated Employee further agree that
arbitration as provided in this Section 7 shall be the exclusive and binding
remedy for any such dispute and will be used instead of any court action, which
is hereby expressly waived, except for any request by either party hereto for
temporary or preliminary injunctive relief pending arbitration in accordance
with applicable law, or an administrative claim with an administrative agency,
and that the award of the arbitrator, which shall include a determination based
on relative success on the merits as to whom shall bear the Designated
Employee's legal fees, shall be final and binding on both parties, and
nonappealable. The arbitrator shall have discretion to award monetary and other
damages, or no damages, and to fashion such other relief as the arbitrator deems
appropriate. The Company will be responsible for paying any filing fees and
costs of the arbitration proceeding itself (for example, arbitrators' fees,
conference room, transcripts), but, except as set forth in this Section 7, each
party shall be responsible for its own attorneys' fees. THE COMPANY AND EACH
DESIGNATED EMPLOYEE ACKNOWLEDGE AND AGREE THAT BY AGREEING TO ARBITRATE, THEY
ARE WAIVING ANY RIGHT TO BRING AN ACTION AGAINST THE OTHER IN A COURT OF LAW,
EITHER STATE OR FEDERAL, AND ARE WAIVING THE RIGHT TO HAVE CLAIMS AND DAMAGES,
IF ANY, DETERMINED BY A JURY.
 
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8. Mitigation of Damages; Effect of Plan
 
(a) The Designated Employee shall not be required to mitigate damages or the
amount of any payment provided for under the Plan by seeking other employment or
otherwise, nor shall the amount of any payment provided for under the Plan be
reduced by any compensation earned by the Designated Employee as a result of
employment by another employer or by retirement benefits after the Date of
Termination, or otherwise, except to the extent provided in Section 5(ii) above.
 
(b) The provisions of the Plan, and any payment provided for hereunder, shall
not reduce any amounts otherwise payable, or in any way diminish the Designated
Employee's then existing rights, or rights which would accrue solely as a result
of the passage of time, under any Benefit Plan, employment agreement or other
contract, plan or arrangement.
 
9. Funding Upon Change in Control
 
(a) Immediately prior to the occurrence of a Change in Control, the Board of
Directors of the Company shall have the discretion to direct the Company to
fund, to the extent it has not done so, a sum equal to the present value on the
date of the Change in Control (determined using an interest rate equal to the
short-term applicable federal rate (with annual compounding) established under
Section 1274(d) of the Code for the month in which the Change in Control occurs)
of any amounts that are or would reasonably be expected to become payable to the
Designated Employees under the Plan (including a good faith estimate of expenses
of the trust in the event that the Company does not timely pay such expenses) by
establishing and irrevocably funding a trust for the benefit of the Designated
Employees. The trustee of such trust shall be instructed to pay out any such
amounts as and to the extent such amounts become payable in accordance with the
terms of the Plan.
 
(b) The trust established under this Section 9 shall be a grantor trust
described in Section 671 of the Code. The Company shall be solely responsible
for and shall directly pay all fees and expenses of the trust; provided,
however, in the event that the Company does not pay all of the fees and expenses
of the trust, the trustee shall have the authority to pay such fees from the
assets of the trust.
 
(c) Any payments of severance or other benefits by the trust established
pursuant to this Section 9 shall, to the extent thereof, discharge the Company’s
obligation to pay severance and other benefits under the Plan, it being the
intent of the Company that the assets in such trust be held for the purpose of
discharging any obligation of the Company to pay severance and other benefits
under the Plan.
 
(d) The trust established under this Section 9 shall not terminate until the
date on which all payments and benefits to be funded out of the trust have been
satisfied and discharged in full. Upon termination of the trust any assets
remaining in the trust shall be returned to the Company.
 
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10. Term; Amendments; No Effect on Employment Prior to Change in Control
 
(a) The Plan shall have successive two-year terms which shall be automatically
renewed unless prior to a Change in Control and prior to the applicable
automatic renewal date action is taken by the Board of Directors of the Company
to terminate the Plan effective as of a renewal date. The Plan may also be
amended from time to time by the Board of Directors of the Company; provided,
however, that such amendments (other than amendments that are (i) intended to
ensure compliance with applicable law or (ii) are favorable to the Designated
Employees) may only be adopted prior to a Change in Control and shall only be
effective on and after the applicable renewal date, in both cases unless agreed
to and approved by the Designated Employee. Notwithstanding the foregoing, the
Plan shall terminate three years from the date of a Change in Control and shall
terminate as to any Designated Employee participating in the Plan upon the
termination of the Designated Employee's employment with the Company based on
death, Disability (as defined in Section 3(b)), mandatory retirement or Cause
(as defined in Section 1(b)) or by the Designated Employee other than for Good
Reason (as defined in Section 1(e)). Termination or amendment of the Plan shall
not affect any obligation of the Company under the Plan which has accrued and is
unpaid as of the effective date of the termination or amendment. Unless and
until a Change in Control shall have occurred, a Designated Employee shall not
have any vested rights under the Plan or any agreement entered into pursuant to
the Plan.
 
(b) Nothing in the Plan or any agreement entered into pursuant to the Plan shall
confer upon the Designated Employee any right to continue in the employ of the
Company prior to a Change in Control of the Company or shall interfere with or
restrict in any way the rights of the Company, which are hereby expressly
reserved, to discharge the Designated Employee at any time prior to the date of
a Change in Control of the Company for any reason whatsoever, with or without
cause.
 
(c) Notwithstanding anything herein or in any agreement entered into pursuant to
the Plan to the contrary, the Board of Directors of the Company may, in its sole
discretion, amend the Plan (which amendment shall be effective upon its adoption
or at such other time designated by the Board of Directors) at any time prior to
a Change in Control as may be necessary to avoid the imposition of the
additional tax under Section 409A(a)(1)(B) of the Code; provided, however, that
any such amendment shall be implemented in such a manner as to preserve, to the
greatest extent possible, the terms and conditions of the Plan as in existence
immediately prior to any such amendment.
 
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