EXHIBIT 10.18

 

MARTEN TRANSPORT, LTD.

2005 STOCK INCENTIVE PLAN

 

1.             PURPOSE OF PLAN.

 

The purpose of the Marten Transport, Ltd. 2005 Stock Incentive Plan (the “Plan”)
is to advance the interests of Marten Transport, Ltd. (the “Company”) and its
stockholders by enabling the Company and its Subsidiaries to attract and retain
qualified individuals through opportunities for equity participation in the
Company, and to reward those individuals who contribute to the achievement of
the Company’ economic objectives.

 

2.             DEFINITIONS.

 

The following terms will have the meanings set forth below, unless the context
clearly otherwise requires:

 

2.1  “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

2.2  “BROKER EXERCISE NOTICE” MEANS A WRITTEN NOTICE PURSUANT TO WHICH A
PARTICIPANT, UPON EXERCISE OF AN OPTION, IRREVOCABLY INSTRUCTS A BROKER OR
DEALER TO SELL A SUFFICIENT NUMBER OF SHARES OR LOAN A SUFFICIENT AMOUNT OF
MONEY TO PAY ALL OR A PORTION OF THE EXERCISE PRICE OF THE OPTION AND/OR ANY
RELATED WITHHOLDING TAX OBLIGATIONS AND REMIT SUCH SUMS TO THE COMPANY AND
DIRECTS THE COMPANY TO DELIVER STOCK CERTIFICATES TO BE ISSUED UPON SUCH
EXERCISE DIRECTLY TO SUCH BROKER OR DEALER OR THEIR NOMINEE.

 

2.3  “CAUSE” MEANS (I) DISHONESTY, FRAUD, MISREPRESENTATION, EMBEZZLEMENT OR
DELIBERATE INJURY OR ATTEMPTED INJURY, IN EACH CASE RELATED TO THE COMPANY OR
ANY SUBSIDIARY, (II) ANY UNLAWFUL OR CRIMINAL ACTIVITY OF A SERIOUS NATURE,
(III) ANY INTENTIONAL AND DELIBERATE BREACH OF A DUTY OR DUTIES THAT,
INDIVIDUALLY OR IN THE AGGREGATE, ARE MATERIAL IN RELATION TO THE PARTICIPANT’S
OVERALL DUTIES, OR (IV) ANY MATERIAL BREACH OF ANY CONFIDENTIALITY OR NONCOMPETE
AGREEMENT ENTERED INTO WITH THE COMPANY OR ANY SUBSIDIARY.

 

2.4  “CHANGE IN CONTROL” MEANS AN EVENT DESCRIBED IN SECTION 13.1 OF THE PLAN.

 

2.5  “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

 

2.6  “COMMITTEE” MEANS THE GROUP OF INDIVIDUALS ADMINISTERING THE PLAN, AS
PROVIDED IN SECTION 3 OF THE PLAN.

 

2.7  “COMMON STOCK” MEANS THE COMMON STOCK OF THE COMPANY, PAR VALUE $0.01 PER
SHARE, OR THE NUMBER AND KIND OF SHARES OF STOCK OR OTHER SECURITIES INTO WHICH
SUCH COMMON STOCK MAY BE CHANGED IN ACCORDANCE WITH SECTION 4.3 OF THE PLAN.

 

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2.8  “DISABILITY” MEANS THE DISABILITY OF THE PARTICIPANT SUCH AS WOULD ENTITLE
THE PARTICIPANT TO RECEIVE DISABILITY INCOME BENEFITS PURSUANT TO THE LONG-TERM
DISABILITY PLAN OF THE COMPANY OR SUBSIDIARY THEN COVERING THE PARTICIPANT OR,
IF NO SUCH PLAN EXISTS OR IS APPLICABLE TO THE PARTICIPANT, THE PERMANENT AND
TOTAL DISABILITY OF THE PARTICIPANT WITHIN THE MEANING OF SECTION 22(E)(3) OF
THE CODE.

 

2.9  “EFFECTIVE DATE” MEANS MAY 3, 2005 OR SUCH LATER DATE AS THE PLAN IS
INITIALLY APPROVED BY THE COMPANY’S STOCKHOLDERS.

 

2.10  “ELIGIBLE RECIPIENTS” MEANS ALL EMPLOYEES (INCLUDING, WITHOUT LIMITATION,
OFFICERS AND DIRECTORS WHO ARE ALSO EMPLOYEES) OF THE COMPANY OR ANY SUBSIDIARY
AND ANY NON-EMPLOYEE DIRECTORS, CONSULTANTS, ADVISORS AND INDEPENDENT
CONTRACTORS OF THE COMPANY OR ANY SUBSIDIARY.

 

2.11  “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

2.12  “FAIR MARKET VALUE” MEANS, WITH RESPECT TO THE COMMON STOCK, AS OF ANY
DATE: (I) (OR, IF NO SHARES WERE TRADED OR QUOTED ON SUCH DATE, AS OF THE NEXT
PRECEDING DATE ON WHICH THERE WAS SUCH A TRADE OR QUOTE) THE CLOSING SALE PRICE
OF THE COMMON STOCK AS REPORTED ON THE NASDAQ NATIONAL MARKET SYSTEM OR ON ANY
NATIONAL EXCHANGE; OR (II) IF THE COMMON STOCK IS NOT SO LISTED, ADMITTED TO
UNLISTED TRADING PRIVILEGES, OR REPORTED ON ANY NATIONAL EXCHANGE OR ON THE
NASDAQ NATIONAL MARKET SYSTEM, THE CLOSING SALE PRICE AS OF SUCH DATE AT THE END
OF THE REGULAR TRADING SESSION, AS REPORTED BY THE NASDAQ SMALLCAP MARKET, OTC
BULLETIN BOARD, THE BULLETIN BOARD EXCHANGE (BBX) OR THE NATIONAL QUOTATION
BUREAUS, INC., OR OTHER COMPARABLE SERVICE; OR (III) IF THE COMMON STOCK IS NOT
SO LISTED OR REPORTED, SUCH PRICE AS THE COMMITTEE DETERMINES IN GOOD FAITH IN
THE EXERCISE OF ITS REASONABLE DISCRETION.

 

2.13  “INCENTIVE AWARD” MEANS AN OPTION, STOCK APPRECIATION RIGHT, RESTRICTED
STOCK AWARD, PERFORMANCE UNIT AWARD OR STOCK BONUS GRANTED TO AN ELIGIBLE
RECIPIENT PURSUANT TO THE PLAN.

 

2.14  “INCENTIVE STOCK OPTION” MEANS A RIGHT TO PURCHASE COMMON STOCK GRANTED TO
AN ELIGIBLE RECIPIENT PURSUANT TO SECTION 6 OF THE PLAN THAT QUALIFIES AS AN
“INCENTIVE STOCK OPTION” WITHIN THE MEANING OF SECTION 422 OF THE CODE.

 

2.15  “NON-STATUTORY STOCK OPTION” MEANS A RIGHT TO PURCHASE COMMON STOCK
GRANTED TO AN ELIGIBLE RECIPIENT PURSUANT TO SECTION 6 OF THE PLAN THAT DOES NOT
QUALIFY AS AN INCENTIVE STOCK OPTION.

 

2.16  “OPTION” MEANS AN INCENTIVE STOCK OPTION OR A NON-STATUTORY STOCK OPTION.

 

2.17  “PARTICIPANT” MEANS AN ELIGIBLE RECIPIENT WHO RECEIVES ONE OR MORE
INCENTIVE AWARDS UNDER THE PLAN.

 

2.18  “PERFORMANCE CRITERIA” MEANS THE PERFORMANCE CRITERIA THAT MAY BE USED BY
THE COMMITTEE IN GRANTING INCENTIVE AWARDS CONTINGENT UPON ACHIEVEMENT OF
PERFORMANCE GOALS, CONSISTING OF NET SALES, OPERATING INCOME, INCOME BEFORE
INCOME TAXES, NET INCOME, NET INCOME PER SHARE (BASIC OR DILUTED), PROFITABILITY
AS MEASURED BY RETURN RATIOS (INCLUDING RETURN ON ASSETS, RETURN

 

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on equity, return on investment and return on sales), cash flows, market share,
cost reduction goals, margins (including one or more of gross, operating and net
income margins), stock price, total return to stockholders, economic value
added, working capital and strategic plan development and implementation.  The
Committee may select one criterion or multiple criteria for measuring
performance, and the measurement may be based upon Company, Subsidiary or
business unit performance, either absolute or by relative comparison to other
companies or any other external measure of the selected criteria.

 

2.19  “PERFORMANCE UNIT AWARD” MEANS A RIGHT GRANTED TO AN ELIGIBLE RECIPIENT
PURSUANT TO SECTION 9 OF THE PLAN TO RECEIVE THE FAIR MARKET VALUE OF ONE OR
MORE SHARES OF COMMON STOCK, PAYABLE IN SHARES OF COMMON STOCK, THE PAYMENT,
ISSUANCE, RETENTION AND/OR VESTING OF WHICH IS SUBJECT TO THE SATISFACTION OF
SPECIFIED CONDITIONS WHICH MAY INCLUDE ACHIEVEMENT OF PERFORMANCE CRITERIA OR
OTHER OBJECTIVES.

 

2.20  “PREVIOUSLY ACQUIRED SHARES” MEANS SHARES OF COMMON STOCK THAT ARE ALREADY
OWNED BY THE PARTICIPANT OR, WITH RESPECT TO ANY INCENTIVE AWARD, THAT ARE TO BE
ISSUED UPON THE GRANT, EXERCISE OR VESTING OF SUCH INCENTIVE AWARD.

 

2.21  “RESTRICTED STOCK AWARD” MEANS AN AWARD OF COMMON STOCK GRANTED TO AN
ELIGIBLE RECIPIENT PURSUANT TO SECTION 8 OF THE PLAN THAT IS SUBJECT TO THE
RESTRICTIONS ON TRANSFERABILITY AND THE RISK OF FORFEITURE IMPOSED BY THE
PROVISIONS OF SUCH SECTION 8.

 

2.22  “RETIREMENT” MEANS NORMAL OR APPROVED EARLY TERMINATION OF EMPLOYMENT OR
SERVICE PURSUANT TO AND IN ACCORDANCE WITH THE REGULAR RETIREMENT/PENSION PLAN
OR PRACTICE OF THE COMPANY OR SUBSIDIARY THEN COVERING THE PARTICIPANT, PROVIDED
THAT IF THE PARTICIPANT IS NOT COVERED BY ANY SUCH PLAN OR PRACTICE, THE
PARTICIPANT WILL BE DEEMED TO BE COVERED BY THE COMPANY’S PLAN OR PRACTICE FOR
PURPOSES OF THIS DETERMINATION.

 

2.23  “SECURITIES ACT” MEANS THE SECURITIES ACT OF 1933, AS AMENDED.

 

2.24  “STOCK APPRECIATION RIGHT” MEANS A RIGHT GRANTED TO AN ELIGIBLE RECIPIENT
PURSUANT TO SECTION 7 OF THE PLAN TO RECEIVE A PAYMENT FROM THE COMPANY IN THE
FORM OF SHARES OF COMMON STOCK, HAVING A VALUE EQUAL TO THE DIFFERENCE BETWEEN
THE FAIR MARKET VALUE OF ONE OR MORE SHARES OF COMMON STOCK AND A SPECIFIED
EXERCISE PRICE OF SUCH SHARES.

 

2.25  “STOCK BONUS” MEANS AN AWARD OF COMMON STOCK GRANTED TO AN ELIGIBLE
RECIPIENT PURSUANT TO SECTION 10 OF THE PLAN.

 

2.26  “SUBSIDIARY” MEANS ANY ENTITY THAT IS DIRECTLY OR INDIRECTLY CONTROLLED BY
THE COMPANY OR ANY ENTITY IN WHICH THE COMPANY HAS A SIGNIFICANT EQUITY
INTEREST, AS DETERMINED BY THE COMMITTEE.

 

2.27  “TAX DATE” MEANS THE DATE ANY TAX WITHHOLDING OBLIGATION ARISES UNDER THE
CODE FOR A PARTICIPANT WITH RESPECT TO AN INCENTIVE AWARD.

 

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3.             PLAN ADMINISTRATION.

 

3.1  THE COMMITTEE.  THE PLAN WILL BE ADMINISTERED BY THE BOARD OR BY A
COMMITTEE OF THE BOARD.  SO LONG AS THE COMPANY HAS A CLASS OF ITS EQUITY
SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT, ANY COMMITTEE
ADMINISTERING THE PLAN WILL CONSIST SOLELY OF TWO OR MORE MEMBERS OF THE BOARD
WHO ARE “NON-EMPLOYEE DIRECTORS” WITHIN THE MEANING OF RULE 16B-3 UNDER THE
EXCHANGE ACT, WHO ARE “INDEPENDENT” AS REQUIRED BY THE LISTING STANDARDS OF THE
NASDAQ STOCK MARKET OR ANY OTHER NATIONAL EXCHANGE THAT LISTS THE COMPANY AND
WHO ARE “OUTSIDE DIRECTORS” WITHIN THE MEANING OF SECTION 162(M) OF THE CODE.
SUCH A COMMITTEE, IF ESTABLISHED, WILL ACT BY MAJORITY APPROVAL OF THE MEMBERS
(UNANIMOUS APPROVAL WITH RESPECT TO ACTION BY WRITTEN CONSENT), AND A MAJORITY
OF THE MEMBERS OF SUCH A COMMITTEE WILL CONSTITUTE A QUORUM.  AS USED IN THE
PLAN, “COMMITTEE” WILL REFER TO THE BOARD OR TO SUCH A COMMITTEE, IF
ESTABLISHED.  TO THE EXTENT CONSISTENT WITH APPLICABLE CORPORATE LAW OF THE
COMPANY’S JURISDICTION OF INCORPORATION, THE COMMITTEE MAY DELEGATE TO ANY
OFFICERS OF THE COMPANY THE DUTIES, POWER AND AUTHORITY OF THE COMMITTEE UNDER
THE PLAN PURSUANT TO SUCH CONDITIONS OR LIMITATIONS AS THE COMMITTEE MAY
ESTABLISH; PROVIDED, HOWEVER, THAT ONLY THE COMMITTEE MAY EXERCISE SUCH DUTIES,
POWER AND AUTHORITY WITH RESPECT TO ELIGIBLE RECIPIENTS WHO ARE SUBJECT TO
SECTION 16 OF THE EXCHANGE ACT OR WHOSE COMPENSATION IN THE FISCAL YEAR MAY BE
SUBJECT TO THE LIMITS ON DEDUCTIBLE COMPENSATION PURSUANT TO SECTION 162(M) OF
THE CODE.  THE COMMITTEE MAY EXERCISE ITS DUTIES, POWER AND AUTHORITY UNDER THE
PLAN IN ITS SOLE AND ABSOLUTE DISCRETION WITHOUT THE CONSENT OF ANY PARTICIPANT
OR OTHER PARTY, UNLESS THE PLAN SPECIFICALLY PROVIDES OTHERWISE.  EACH
DETERMINATION, INTERPRETATION OR OTHER ACTION MADE OR TAKEN BY THE COMMITTEE
PURSUANT TO THE PROVISIONS OF THE PLAN WILL BE CONCLUSIVE AND BINDING FOR ALL
PURPOSES AND ON ALL PERSONS, AND NO MEMBER OF THE COMMITTEE WILL BE LIABLE FOR
ANY ACTION OR DETERMINATION MADE IN GOOD FAITH WITH RESPECT TO THE PLAN OR ANY
INCENTIVE AWARD GRANTED UNDER THE PLAN.

 

3.2  AUTHORITY OF THE COMMITTEE.

 

(A)  IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THE PLAN, THE COMMITTEE
WILL HAVE THE AUTHORITY TO DETERMINE ALL PROVISIONS OF INCENTIVE AWARDS AS THE
COMMITTEE MAY DEEM NECESSARY OR DESIRABLE AND AS CONSISTENT WITH THE TERMS OF
THE PLAN, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:  (I) THE ELIGIBLE
RECIPIENTS TO BE SELECTED AS PARTICIPANTS; (II) THE NATURE AND EXTENT OF THE
INCENTIVE AWARDS TO BE MADE TO EACH PARTICIPANT (INCLUDING THE NUMBER OF SHARES
OF COMMON STOCK TO BE SUBJECT TO EACH INCENTIVE AWARD, ANY EXERCISE PRICE, THE
MANNER IN WHICH INCENTIVE AWARDS WILL VEST OR BECOME EXERCISABLE AND THE FORM OF
WRITTEN AGREEMENT, IF ANY, EVIDENCING SUCH INCENTIVE AWARD; (III) THE TIME OR
TIMES WHEN INCENTIVE AWARDS WILL BE GRANTED; (IV) THE DURATION OF EACH INCENTIVE
AWARD; AND (V) THE RESTRICTIONS AND OTHER CONDITIONS TO WHICH THE PAYMENT OR
VESTING OF INCENTIVE AWARDS MAY BE SUBJECT; PROVIDED, HOWEVER, THAT
NOTWITHSTANDING ANY OTHER PROVISION OF THE PLAN, ANY INCENTIVE AWARD OTHER THAN
AN OPTION OR STOCK APPRECIATION RIGHT WILL NOT VEST OR BECOME PAYABLE OVER A
PERIOD OF LESS THAN THREE (3) YEARS FROM THE DATE OF GRANT, IF VESTING OR
PAYMENT IS BASED SOLELY UPON THE PASSAGE OF TIME, AND WILL HAVE A PERFORMANCE
MEASUREMENT PERIOD OF NOT LESS THAN ONE (1) YEAR, IF VESTING OR PAYMENT IS BASED
UPON SATISFACTION OF PERFORMANCE CRITERIA OR OTHER OBJECTIVES.  IN ADDITION, THE
COMMITTEE WILL HAVE THE AUTHORITY UNDER THE PLAN IN ITS SOLE DISCRETION TO PAY
THE ECONOMIC VALUE OF ANY INCENTIVE AWARD IN THE FORM OF CASH, COMMON STOCK OR
ANY COMBINATION OF BOTH; PROVIDED, HOWEVER, THAT THE COMMITTEE WILL HAVE THE
AUTHORITY TO PAY THE ECONOMIC VALUE OF ANY INCENTIVE AWARD IN CASH ONLY IF, AND

 

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TO THE EXTENT, THE EXERCISE OF SUCH RIGHT DOES NOT CAUSE AN INCENTIVE AWARD TO
BECOME SUBJECT TO SECTION 409A OF THE CODE.

 

(B)  SUBJECT TO SECTION 3.2(D), BELOW, THE COMMITTEE WILL HAVE THE AUTHORITY
UNDER THE PLAN TO AMEND OR MODIFY THE TERMS OF ANY OUTSTANDING INCENTIVE AWARD
IN ANY MANNER, INCLUDING, WITHOUT LIMITATION, THE AUTHORITY TO MODIFY THE NUMBER
OF SHARES OR OTHER TERMS AND CONDITIONS OF AN INCENTIVE AWARD, EXTEND THE TERM
OF AN INCENTIVE AWARD, ACCELERATE THE EXERCISABILITY OR VESTING OR OTHERWISE
TERMINATE ANY RESTRICTIONS RELATING TO AN INCENTIVE AWARD, ACCEPT THE SURRENDER
OF ANY OUTSTANDING INCENTIVE AWARD OR, TO THE EXTENT NOT PREVIOUSLY EXERCISED OR
VESTED, AUTHORIZE THE GRANT OF NEW INCENTIVE AWARDS IN SUBSTITUTION FOR
SURRENDERED INCENTIVE AWARDS; PROVIDED, HOWEVER, THAT THE AMENDED OR MODIFIED
TERMS ARE PERMITTED BY THE PLAN AS THEN IN EFFECT, THAT SUCH AMENDMENT DOES NOT
CAUSE AN INCENTIVE AWARD TO BECOME SUBJECT TO SECTION 409A OF THE CODE, AND THAT
ANY PARTICIPANT ADVERSELY AFFECTED BY SUCH AMENDED OR MODIFIED TERMS HAS
CONSENTED TO SUCH AMENDMENT OR MODIFICATION.

 

(C)  IN THE EVENT OF (I) ANY REORGANIZATION, MERGER, CONSOLIDATION,
RECAPITALIZATION, LIQUIDATION, RECLASSIFICATION, STOCK DIVIDEND, STOCK SPLIT,
COMBINATION OF SHARES, RIGHTS OFFERING, EXTRAORDINARY DIVIDEND OR DIVESTITURE
(INCLUDING A SPIN-OFF) OR ANY OTHER CHANGE IN CORPORATE STRUCTURE OR SHARES;
(II) ANY PURCHASE, ACQUISITION, SALE, DISPOSITION OR WRITE-DOWN OF A SIGNIFICANT
AMOUNT OF ASSETS OR A SIGNIFICANT BUSINESS; (III) ANY CHANGE IN ACCOUNTING
PRINCIPLES OR PRACTICES, TAX LAWS OR OTHER SUCH LAWS OR PROVISIONS AFFECTING
REPORTED RESULTS; (IV) ANY UNINSURED CATASTROPHIC LOSSES OR EXTRAORDINARY
NON-RECURRING ITEMS AS DESCRIBED IN ACCOUNTING PRINCIPLES BOARD OPINION NO. 30
OR IN MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL PERFORMANCE APPEARING IN
THE COMPANY’S ANNUAL REPORT TO STOCKHOLDERS FOR THE APPLICABLE YEAR; OR (V) ANY
OTHER SIMILAR CHANGE, IN EACH CASE WITH RESPECT TO THE COMPANY OR ANY OTHER
ENTITY WHOSE PERFORMANCE IS RELEVANT TO THE GRANT OR VESTING OF AN INCENTIVE
AWARD, THE COMMITTEE (OR, IF THE COMPANY IS NOT THE SURVIVING CORPORATION IN ANY
SUCH TRANSACTION, THE BOARD OF DIRECTORS OF THE SURVIVING CORPORATION) MAY,
WITHOUT THE CONSENT OF ANY AFFECTED PARTICIPANT, AMEND OR MODIFY THE VESTING
CRITERIA (INCLUDING PERFORMANCE CRITERIA) OF ANY OUTSTANDING INCENTIVE AWARD
THAT IS BASED IN WHOLE OR IN PART ON THE FINANCIAL PERFORMANCE OF THE COMPANY
(OR ANY SUBSIDIARY OR DIVISION OR OTHER SUBUNIT THEREOF) OR SUCH OTHER ENTITY SO
AS EQUITABLY TO REFLECT SUCH EVENT, WITH THE DESIRED RESULT THAT THE CRITERIA
FOR EVALUATING SUCH FINANCIAL PERFORMANCE OF THE COMPANY OR SUCH OTHER ENTITY
WILL BE SUBSTANTIALLY THE SAME (IN THE SOLE DISCRETION OF THE COMMITTEE OR THE
BOARD OF DIRECTORS OF THE SURVIVING CORPORATION) FOLLOWING SUCH EVENT AS PRIOR
TO SUCH EVENT; PROVIDED, HOWEVER, THAT THE AMENDED OR MODIFIED TERMS ARE
PERMITTED BY THE PLAN AS THEN IN EFFECT.

 

(D)  NOTWITHSTANDING ANY OTHER PROVISION OF THIS PLAN OTHER THAN SECTION 4.3,
THE COMMITTEE MAY NOT, WITHOUT PRIOR APPROVAL OF THE COMPANY’S STOCKHOLDERS,
SEEK TO EFFECT ANY RE-PRICING OF ANY PREVIOUSLY GRANTED, “UNDERWATER” OPTION
BY:  (I) AMENDING OR MODIFYING THE TERMS OF THE OPTION TO LOWER THE EXERCISE
PRICE; (II) CANCELING THE UNDERWATER OPTION AND GRANTING EITHER (A) REPLACEMENT
OPTIONS OR STOCK APPRECIATION RIGHTS HAVING A LOWER EXERCISE PRICE;
(B) RESTRICTED STOCK AWARDS; OR (C) PERFORMANCE UNIT AWARDS OR STOCK BONUSES IN
EXCHANGE; OR (III) REPURCHASING THE UNDERWATER OPTIONS AND GRANTING NEW
INCENTIVE AWARDS UNDER THIS PLAN.  FOR PURPOSES OF THIS SECTION 3.2(D), AN
OPTION WILL BE

 

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DEEMED TO BE “UNDERWATER” AT ANY TIME WHEN THE FAIR MARKET VALUE OF THE COMMON
STOCK IS LESS THAN THE EXERCISE PRICE OF THE OPTION.

 

(E)  NOTWITHSTANDING ANYTHING IN THIS PLAN TO THE CONTRARY, THE COMMITTEE WILL
NOT TAKE ANY ACTION OR EXERCISE ANY DISCRETION TO CAUSE AN INCENTIVE AWARD TO
BECOME SUBJECT TO THE REQUIREMENTS OF SECTION 409A OF THE CODE.

 

4.             SHARES AVAILABLE FOR ISSUANCE.

 

4.1  MAXIMUM NUMBER OF SHARES AVAILABLE; CERTAIN RESTRICTIONS ON AWARDS. 
SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 4.3 OF THE PLAN, THE MAXIMUM NUMBER
OF SHARES OF COMMON STOCK THAT WILL BE AVAILABLE FOR ISSUANCE UNDER THE PLAN
WILL BE 1,900,000.  NOTWITHSTANDING ANY OTHER PROVISION OF THE PLAN TO THE
CONTRARY, (I) NO PARTICIPANT IN THE PLAN MAY BE GRANTED OPTIONS AND STOCK
APPRECIATION RIGHTS RELATING TO MORE THAN 250,000 SHARES OF COMMON STOCK IN THE
AGGREGATE DURING ANY CALENDAR YEAR, (II) NO PARTICIPANT IN THE PLAN MAY BE
GRANTED INCENTIVE AWARDS (OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS)
RELATING TO MORE THAN 125,000 SHARES OF COMMON STOCK PURSUANT TO EACH TYPE OF
INCENTIVE AWARD (OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS) DURING ANY
CALENDAR YEAR, (III) NO MORE THAN AN AGGREGATE OF 500,000 SHARES OF COMMON STOCK
MAY BE ISSUED PURSUANT TO INCENTIVE AWARDS UNDER THE PLAN, OTHER THAN OPTIONS
AND STOCK APPRECIATION RIGHTS,  AND (IV) NO MORE THAN 1,900,000 SHARES OF COMMON
STOCK MAY BE ISSUED PURSUANT TO THE EXERCISE OF INCENTIVE STOCK OPTIONS GRANTED
UNDER THE PLAN, WITH THE FOREGOING SHARE LIMITS SUBJECT, IN EACH CASE, TO
ADJUSTMENT AS PROVIDED IN SECTION 4.3.  THE SHARES AVAILABLE FOR ISSUANCE UNDER
THE PLAN MAY, AT THE ELECTION OF THE COMMITTEE, BE EITHER TREASURY SHARES OR
SHARES AUTHORIZED BUT UNISSUED, AND, IF TREASURY SHARES ARE USED, ALL REFERENCES
IN THE PLAN TO THE ISSUANCE OF SHARES WILL, FOR CORPORATE LAW PURPOSES, BE
DEEMED TO MEAN THE TRANSFER OF SHARES FROM TREASURY.

 

4.2  ACCOUNTING FOR INCENTIVE AWARDS.  SHARES OF COMMON STOCK THAT ARE ISSUED
UNDER THE PLAN OR THAT ARE SUBJECT TO OUTSTANDING INCENTIVE AWARDS WILL BE
APPLIED TO REDUCE THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK REMAINING
AVAILABLE FOR ISSUANCE UNDER THE PLAN; PROVIDED, HOWEVER, THAT SHARES SUBJECT TO
AN INCENTIVE AWARD THAT LAPSES, EXPIRES, IS FORFEITED (INCLUDING ISSUED SHARES
FORFEITED UNDER A RESTRICTED STOCK AWARD) OR FOR ANY REASON IS TERMINATED
UNEXERCISED OR UNVESTED OR IS SETTLED OR PAID IN CASH OR ANY FORM OTHER THAN
SHARES OF COMMON STOCK WILL AUTOMATICALLY AGAIN BECOME AVAILABLE FOR ISSUANCE
UNDER THE PLAN.

 

4.3  ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS.  IN THE EVENT OF ANY
REORGANIZATION, MERGER, CONSOLIDATION, RECAPITALIZATION, LIQUIDATION,
RECLASSIFICATION, STOCK DIVIDEND, STOCK SPLIT, COMBINATION OF SHARES, RIGHTS
OFFERING, DIVESTITURE OR EXTRAORDINARY DIVIDEND (INCLUDING A SPIN-OFF) OR ANY
OTHER CHANGE IN THE CORPORATE STRUCTURE OR SHARES OF THE COMPANY, THE COMMITTEE
(OR, IF THE COMPANY IS NOT THE SURVIVING CORPORATION IN ANY SUCH TRANSACTION,
THE BOARD OF DIRECTORS OF THE SURVIVING CORPORATION) WILL MAKE APPROPRIATE
ADJUSTMENT (WHICH DETERMINATION WILL BE CONCLUSIVE) AS TO THE NUMBER AND KIND OF
SECURITIES OR OTHER PROPERTY (INCLUDING CASH) AVAILABLE FOR ISSUANCE OR PAYMENT
UNDER THE PLAN AND, IN ORDER TO PREVENT DILUTION OR ENLARGEMENT OF THE RIGHTS OF
PARTICIPANTS, (A) THE NUMBER AND KIND OF SECURITIES OR OTHER PROPERTY (INCLUDING
CASH) SUBJECT TO OUTSTANDING INCENTIVE AWARDS, AND (B) THE EXERCISE PRICE OF
OUTSTANDING OPTIONS AND STOCK APPRECIATION RIGHTS.

 

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5.             PARTICIPATION.

 

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

 

6.             OPTIONS.

 

6.1  GRANT.  AN ELIGIBLE RECIPIENT MAY BE GRANTED ONE OR MORE OPTIONS UNDER THE
PLAN, AND SUCH OPTIONS WILL BE SUBJECT TO SUCH TERMS AND CONDITIONS, CONSISTENT
WITH THE OTHER PROVISIONS OF THE PLAN, AS MAY BE DETERMINED BY THE COMMITTEE IN
ITS SOLE DISCRETION.  THE COMMITTEE MAY DESIGNATE WHETHER AN OPTION IS TO BE
CONSIDERED AN INCENTIVE STOCK OPTION OR A NON-STATUTORY STOCK OPTION.  TO THE
EXTENT THAT ANY INCENTIVE STOCK OPTION GRANTED UNDER THE PLAN CEASES FOR ANY
REASON TO QUALIFY AS AN “INCENTIVE STOCK OPTION” FOR PURPOSES OF SECTION 422 OF
THE CODE, SUCH INCENTIVE STOCK OPTION WILL CONTINUE TO BE OUTSTANDING FOR
PURPOSES OF THE PLAN BUT WILL THEREAFTER BE DEEMED TO BE A NON-STATUTORY STOCK
OPTION.

 

6.2  EXERCISE PRICE.  THE PER SHARE PRICE TO BE PAID BY A PARTICIPANT UPON
EXERCISE OF AN OPTION WILL BE DETERMINED BY THE COMMITTEE IN ITS DISCRETION AT
THE TIME OF THE OPTION GRANT, PROVIDED THAT SUCH PRICE WILL NOT BE LESS THAN
100% OF THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE DATE OF GRANT
(110% OF THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE DATE OF GRANT
OF AN INCENTIVE STOCK OPTION IF, AT THE TIME THE INCENTIVE STOCK OPTION IS
GRANTED, THE PARTICIPANT OWNS, DIRECTLY OR INDIRECTLY, MORE THAN 10% OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF THE COMPANY OR ANY PARENT
OR SUBSIDIARY CORPORATION OF THE COMPANY).

 

6.3  EXERCISABILITY AND DURATION.  AN OPTION WILL BECOME EXERCISABLE AT SUCH
TIMES AND IN SUCH INSTALLMENTS AND UPON SUCH TERMS AND CONDITIONS AS MAY BE
DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION AT THE TIME OF GRANT
(INCLUDING WITHOUT LIMITATION (I) THE ACHIEVEMENT OF ONE OR MORE PERFORMANCE
CRITERIA; AND/OR THAT (II) THE PARTICIPANT REMAIN IN THE CONTINUOUS EMPLOY OR
SERVICE OF THE COMPANY OR A SUBSIDIARY FOR A CERTAIN PERIOD; PROVIDED, HOWEVER,
THAT NO OPTION MAY BE EXERCISABLE AFTER 10 YEARS FROM ITS DATE OF GRANT (FIVE
YEARS FROM ITS DATE OF GRANT IN THE CASE OF AN INCENTIVE OPTION IF, AT THE TIME
THE INCENTIVE STOCK OPTION IS GRANTED, THE PARTICIPANT OWNS, DIRECTLY OR
INDIRECTLY, MORE THAN 10% OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF
STOCK OF THE COMPANY OR ANY PARENT OR SUBSIDIARY CORPORATION OF THE COMPANY).

 

6.4  PAYMENT OF EXERCISE PRICE.

 

(A)  THE TOTAL PURCHASE PRICE OF THE SHARES TO BE PURCHASED UPON EXERCISE OF AN
OPTION WILL BE PAID ENTIRELY IN CASH (INCLUDING CHECK, BANK DRAFT OR MONEY
ORDER); PROVIDED, HOWEVER, THAT THE COMMITTEE, IN ITS SOLE DISCRETION AND UPON
TERMS AND CONDITIONS ESTABLISHED BY THE COMMITTEE, MAY ALLOW SUCH PAYMENTS TO BE
MADE, IN WHOLE OR IN PART, BY (I) TENDER OF A BROKER EXERCISE NOTICE; (II) BY
TENDER, OR ATTESTATION AS TO OWNERSHIP, OF PREVIOUSLY

 

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ACQUIRED SHARES THAT HAVE BEEN HELD FOR THE PERIOD OF TIME NECESSARY TO AVOID A
CHARGE TO THE COMPANY’S EARNINGS FOR FINANCIAL REPORTING PURPOSES AND THAT ARE
OTHERWISE ACCEPTABLE TO THE COMMITTEE; (III) TO THE EXTENT PERMISSIBLE UNDER
APPLICABLE LAW, BY DELIVERY OF A PROMISSORY NOTE (ON TERMS ACCEPTABLE TO THE
COMMITTEE IN ITS SOLE DISCRETION); (IV) BY A “NET EXERCISE OF THE OPTION (AS
FURTHER DESCRIBED IN PARAGRAPH (B), BELOW);  OR  (V) BY A COMBINATION OF SUCH
METHODS.

 

(B)  IN THE CASE OF A “NET EXERCISE” OF AN OPTION, THE COMPANY WILL NOT REQUIRE
A PAYMENT OF THE EXERCISE PRICE OF THE OPTION FROM THE PARTICIPANT BUT WILL
REDUCE THE NUMBER OF SHARES OF COMMON STOCK ISSUED UPON THE EXERCISE BY THE
LARGEST NUMBER OF WHOLE SHARES THAT HAS A FAIR MARKET VALUE THAT DOES NOT EXCEED
THE AGGREGATE EXERCISE PRICE FOR THE SHARES EXERCISED UNDER THIS METHOD. SHARES
OF COMMON STOCK WILL NO LONGER BE OUTSTANDING UNDER AN OPTION (AND WILL
THEREFORE NOT THEREAFTER BE EXERCISABLE) FOLLOWING THE EXERCISE OF SUCH OPTION
TO THE EXTENT OF (I) SHARES USED TO PAY THE EXERCISE PRICE OF AN OPTION UNDER
THE “NET EXERCISE,” (II) SHARES ACTUALLY DELIVERED TO THE PARTICIPANT AS A
RESULT OF SUCH EXERCISE AND (III) ANY SHARES WITHHELD FOR PURPOSES OF TAX
WITHHOLDING PURSUANT TO SECTION 12.1.

 

(C)  PREVIOUSLY ACQUIRED SHARES TENDERED OR COVERED BY AN ATTESTATION AS PAYMENT
OF AN OPTION EXERCISE PRICE WILL BE VALUED AT THEIR FAIR MARKET VALUE ON THE
EXERCISE DATE.

 

6.5  MANNER OF EXERCISE.  AN OPTION MAY BE EXERCISED BY A PARTICIPANT IN WHOLE
OR IN PART FROM TIME TO TIME, SUBJECT TO THE CONDITIONS CONTAINED IN THE PLAN
AND IN THE AGREEMENT EVIDENCING SUCH OPTION, BY DELIVERY IN PERSON, BY FACSIMILE
OR ELECTRONIC TRANSMISSION OR THROUGH THE MAIL OF WRITTEN NOTICE OF EXERCISE TO
THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE IN MONDOVI, WISCONSIN AND BY
PAYING IN FULL THE TOTAL EXERCISE PRICE FOR THE SHARES OF COMMON STOCK TO BE
PURCHASED IN ACCORDANCE WITH SECTION 6.4 OF THE PLAN.

 

7.             STOCK APPRECIATION RIGHTS.

 

7.1  GRANT.  AN ELIGIBLE RECIPIENT MAY BE GRANTED ONE OR MORE STOCK APPRECIATION
RIGHTS UNDER THE PLAN, AND SUCH STOCK APPRECIATION RIGHTS WILL BE SUBJECT TO
SUCH TERMS AND CONDITIONS, CONSISTENT WITH THE OTHER PROVISIONS OF THE PLAN, AS
MAY BE DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION.  THE PAYMENT OF THE
ECONOMIC VALUE OF STOCK APPRECIATION RIGHTS WILL BE MADE TO A PARTICIPANT IN
COMMON STOCK.

 

7.2  EXERCISE PRICE.  THE EXERCISE PRICE OF A STOCK APPRECIATION RIGHT WILL BE
DETERMINED BY THE COMMITTEE, IN ITS DISCRETION, AT THE DATE OF GRANT BUT MAY NOT
BE LESS THAN 100% OF THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE
DATE OF GRANT.

 

7.3  EXERCISABILITY AND DURATION.  A STOCK APPRECIATION RIGHT WILL BECOME
EXERCISABLE AT SUCH TIME AND IN SUCH INSTALLMENTS AS MAY BE DETERMINED BY THE
COMMITTEE IN ITS SOLE DISCRETION AT THE TIME OF GRANT; PROVIDED, HOWEVER, THAT
NO STOCK APPRECIATION RIGHT MAY BE EXERCISABLE AFTER 10 YEARS FROM ITS DATE OF
GRANT.  A STOCK APPRECIATION RIGHT WILL BE EXERCISED BY GIVING NOTICE IN THE
SAME MANNER AS FOR OPTIONS, AS SET FORTH IN SECTION 6.5 OF THE PLAN.

 

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7.4  GRANTS IN TANDEM WITH OPTIONS.  STOCK APPRECIATION RIGHTS MAY BE GRANTED
ALONE OR IN ADDITION TO OTHER INCENTIVE AWARDS, OR IN TANDEM WITH AN OPTION.  A
STOCK APPRECIATION RIGHT MAY BE ISSUED IN TANDEM WITH AN OPTION ONLY IF NEITHER
THE OPTION NOR THE STOCK APPRECIATION RIGHT IS SUBJECT TO THE REQUIREMENTS OF
SECTION 409A OF THE CODE.  A STOCK APPRECIATION RIGHT GRANTED IN TANDEM WITH AN
OPTION SHALL COVER THE SAME NUMBER OF SHARES OF COMMON STOCK AS COVERED BY THE
OPTION (OR SUCH LESSER NUMBER AS THE COMMITTEE MAY DETERMINE), SHALL BE
EXERCISABLE AT SUCH TIME OR TIMES AND ONLY TO THE EXTENT THAT THE RELATED OPTION
IS EXERCISABLE, HAVE THE SAME TERM AS THE OPTION AND SHALL HAVE AN EXERCISE
PRICE EQUAL TO THE EXERCISE PRICE FOR THE OPTION, WHICH SHALL IN NO EVENT BE
LESS THAN THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE DATE OF
GRANT.  UPON THE EXERCISE OF A STOCK APPRECIATION RIGHT GRANTED IN TANDEM WITH
AN OPTION, THE OPTION SHALL BE CANCELED AUTOMATICALLY TO THE EXTENT OF THE
NUMBER OF SHARES COVERED BY SUCH EXERCISE; CONVERSELY, UPON EXERCISE OF AN
OPTION HAVING A RELATED STOCK APPRECIATION RIGHT, THE STOCK APPRECIATION RIGHT
SHALL BE CANCELED AUTOMATICALLY TO THE EXTENT OF THE NUMBER OF SHARES COVERED BY
THE OPTION EXERCISE.

 

8.             RESTRICTED STOCK AWARDS.

 

8.1  GRANT.  AN ELIGIBLE RECIPIENT MAY BE GRANTED ONE OR MORE RESTRICTED STOCK
AWARDS UNDER THE PLAN, AND SUCH RESTRICTED STOCK AWARDS WILL BE SUBJECT TO SUCH
TERMS AND CONDITIONS, CONSISTENT WITH THE OTHER PROVISIONS OF THE PLAN, AS MAY
BE DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION.  THE COMMITTEE MAY IMPOSE
SUCH RESTRICTIONS OR CONDITIONS, NOT INCONSISTENT WITH THE PROVISIONS OF THE
PLAN, TO THE VESTING OF SUCH RESTRICTED STOCK AWARDS AS IT DEEMS APPROPRIATE,
INCLUDING, WITHOUT LIMITATION, (I) THE ACHIEVEMENT OF ONE OR MORE OF PERFORMANCE
CRITERIA; AND/OR THAT (II) THE PARTICIPANT REMAIN IN THE CONTINUOUS EMPLOY OR
SERVICE OF THE COMPANY OR A SUBSIDIARY FOR A CERTAIN PERIOD, PROVIDED SUCH
RESTRICTIONS CAUSE THE RESTRICTED STOCK AWARD AND UNDERLYING COMMON STOCK TO NOT
BE INCLUDIBLE IN INCOME UNDER SECTION 83 OF THE CODE BY REASON OF THE PROPERTY
BEING NONTRANSFERABLE AND SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE WITHIN THE
MEANING OF SECTION 409A OF THE CODE.

 

8.2  RIGHTS AS A STOCKHOLDER; TRANSFERABILITY.  EXCEPT AS PROVIDED IN SECTIONS
8.1, 8.3, 8.4 AND 14.3 OF THE PLAN, A PARTICIPANT WILL HAVE ALL VOTING,
DIVIDEND, LIQUIDATION AND OTHER RIGHTS WITH RESPECT TO SHARES OF COMMON STOCK
ISSUED TO THE PARTICIPANT AS A RESTRICTED STOCK AWARD UNDER THIS SECTION 8 UPON
THE PARTICIPANT BECOMING THE HOLDER OF RECORD OF SUCH SHARES AS IF SUCH
PARTICIPANT WERE A HOLDER OF RECORD OF SHARES OF UNRESTRICTED COMMON STOCK.

 

8.3  DIVIDENDS AND DISTRIBUTIONS.  ANY DIVIDENDS OR DISTRIBUTIONS PAID OTHER
THAN IN THE FORM OF CASH WITH RESPECT TO SHARES OF COMMON STOCK SUBJECT TO THE
UNVESTED PORTION OF A RESTRICTED STOCK AWARD WILL BE SUBJECT TO THE SAME
RESTRICTIONS AS THE SHARES TO WHICH SUCH DIVIDENDS OR DISTRIBUTIONS RELATE.

 

8.4  ENFORCEMENT OF RESTRICTIONS.  TO ENFORCE THE RESTRICTIONS REFERRED TO IN
THIS SECTION 8, THE COMMITTEE MAY PLACE A LEGEND ON THE STOCK CERTIFICATES
REFERRING TO SUCH RESTRICTIONS AND MAY REQUIRE THE PARTICIPANT, UNTIL THE
RESTRICTIONS HAVE LAPSED, TO KEEP THE STOCK CERTIFICATES, TOGETHER WITH DULY
ENDORSED STOCK POWERS, IN THE CUSTODY OF THE COMPANY OR ITS TRANSFER AGENT, OR
TO MAINTAIN EVIDENCE OF STOCK OWNERSHIP, TOGETHER WITH DULY ENDORSED STOCK
POWERS, IN A CERTIFICATELESS BOOK-ENTRY STOCK ACCOUNT WITH THE COMPANY’S
TRANSFER AGENT.

 

9

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9.             PERFORMANCE UNIT AWARDS.

 

An Eligible Recipient may be granted one or more Performance Unit Awards under
the Plan, and such Performance Unit Awards will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion.  The Committee may impose
such restrictions or conditions, not inconsistent with the provisions of the
Plan, to the payment, issuance, retention and/or vesting of such
Performance Unit Awards as it deems appropriate, including, without limitation,
(i) the achievement of one or more of Performance Criteria; and/or that (ii) the
Participant remain in the continuous employ or service of the Company or a
Subsidiary for a certain period; provided, however, that in all cases payment of
a Performance Unit Award will be made to the Participant within two and one-half
months following the end of the Participant’s tax year during which receipt of
the Performance Unit Award is no longer subject to a “substantial risk of
forfeiture” within the meaning of Section 409A of the Code.

 

10.           STOCK BONUSES.

 

An Eligible Recipient may be granted one or more Stock Bonuses under the Plan,
and such Stock Bonuses will be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by the Committee. 
The Participant will have all voting, dividend, liquidation and other rights
with respect to the shares of Common Stock issued to a Participant as a Stock
Bonus under this Section 10 upon the Participant becoming the holder of record
of such shares.  The Committee may impose such restrictions or conditions, not
inconsistent with the other provisions of the Plan, to the payment, issuance,
retention and/or vesting of such Stock Bonuses and/or on the assignment or
transfer of shares of Common Stock issued pursuant to the Stock Bonus as it
deems appropriate, including, without limitation (i) the achievement of one or
more of Performance Criteria; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period; provided, however, that in all cases payment of a Stock Bonus will be
made to the Participant within two and one-half months following the end of the
Participant’s tax year during which receipt of the Stock Bonus is no longer
subject to a “substantial risk of forfeiture” within the meaning of Section 409A
of the Code.

 

11.           EFFECT OF TERMINATION OF EMPLOYMENT.  THE FOLLOWING PROVISIONS
SHALL APPLY UPON TERMINATION OF A PARTICIPANT’S EMPLOYMENT OR OTHER SERVICE WITH
THE COMPANY AND ALL SUBSIDIARIES, EXCEPT TO THE EXTENT THAT THE COMMITTEE
PROVIDES OTHERWISE IN AN AGREEMENT EVIDENCING AN INCENTIVE AWARD AT THE TIME OF
GRANT OR DETERMINES OTHERWISE PURSUANT TO SECTION 11.3.

 

11.1  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.  IN THE
EVENT A PARTICIPANT’S EMPLOYMENT OR OTHER SERVICE WITH THE COMPANY AND ALL
SUBSIDIARIES IS TERMINATED BY REASON OF DEATH, DISABILITY OR RETIREMENT:

 

(A)  ALL OUTSTANDING OPTIONS AND STOCK APPRECIATION RIGHTS THEN HELD BY THE
PARTICIPANT WILL REMAIN EXERCISABLE TO THE EXTENT EXERCISABLE AS OF SUCH
TERMINATION FOR A PERIOD OF ONE YEAR AFTER SUCH TERMINATION (BUT IN NO EVENT
AFTER THE EXPIRATION DATE OF SUCH OPTION OR STOCK APPRECIATION RIGHT);

 

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(B)  ALL OUTSTANDING RESTRICTED STOCK AWARDS THEN HELD BY THE PARTICIPANT THAT
HAVE NOT VESTED WILL BE TERMINATED AND FORFEITED; AND

 

(C)  ALL OUTSTANDING PERFORMANCE UNIT AWARDS AND STOCK BONUSES THEN HELD BY THE
PARTICIPANT THAT HAVE NOT VESTED WILL BE TERMINATED AND FORFEITED.

 

11.2  TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT. IN THE EVENT A PARTICIPANT’S EMPLOYMENT OR OTHER SERVICE IS
TERMINATED WITH THE COMPANY AND ALL SUBSIDIARIES FOR ANY REASON OTHER THAN
DEATH, DISABILITY OR RETIREMENT, OR A PARTICIPANT IS IN THE EMPLOY OR SERVICE OF
A SUBSIDIARY AND THE SUBSIDIARY CEASES TO BE A SUBSIDIARY OF THE COMPANY (UNLESS
THE PARTICIPANT CONTINUES IN THE EMPLOY OR SERVICE OF THE COMPANY OR ANOTHER
SUBSIDIARY), ALL RIGHTS OF THE PARTICIPANT UNDER THE PLAN AND ANY AGREEMENTS
EVIDENCING AN INCENTIVE AWARD WILL IMMEDIATELY TERMINATE WITHOUT NOTICE OF ANY
KIND, AND NO OPTIONS OR STOCK APPRECIATION RIGHTS THEN HELD BY THE PARTICIPANT
WILL THEREAFTER BE EXERCISABLE, ALL RESTRICTED STOCK AWARDS THEN HELD BY THE
PARTICIPANT THAT HAVE NOT VESTED WILL BE TERMINATED AND FORFEITED, AND ALL
PERFORMANCE UNIT AWARDS AND STOCK BONUSES THEN HELD BY THE PARTICIPANT WILL VEST
AND/OR CONTINUE TO VEST IN THE MANNER DETERMINED BY THE COMMITTEE AND SET FORTH
IN THE AGREEMENT EVIDENCING SUCH PERFORMANCE UNIT AWARDS OR STOCK BONUSES;
PROVIDED, HOWEVER, THAT IF SUCH TERMINATION IS DUE TO ANY REASON OTHER THAN
TERMINATION BY THE COMPANY OR ANY SUBSIDIARY FOR CAUSE AS DEFINED IN
SECTION 2.3, ALL OUTSTANDING OPTIONS AND STOCK APPRECIATION RIGHTS THEN HELD BY
SUCH PARTICIPANT WILL REMAIN EXERCISABLE TO THE EXTENT EXERCISABLE AS OF SUCH
TERMINATION FOR A PERIOD OF THREE MONTHS AFTER SUCH TERMINATION (BUT IN NO EVENT
AFTER THE EXPIRATION DATE OF ANY SUCH OPTION OR STOCK APPRECIATION RIGHT).

 

11.3  MODIFICATION OF RIGHTS UPON TERMINATION.  NOTWITHSTANDING THE OTHER
PROVISIONS OF THIS SECTION 11, UPON A PARTICIPANT’S TERMINATION OF EMPLOYMENT OR
OTHER SERVICE WITH THE COMPANY AND ALL SUBSIDIARIES, THE COMMITTEE MAY, IN ITS
SOLE DISCRETION (WHICH MAY BE EXERCISED AT ANY TIME ON OR AFTER THE DATE OF
GRANT, INCLUDING FOLLOWING SUCH TERMINATION), EXCEPT AS PROVIDED IN CLAUSE (II),
BELOW, CAUSE OPTIONS OR STOCK APPRECIATION RIGHTS (OR ANY PART THEREOF) THEN
HELD BY SUCH PARTICIPANT TO BECOME OR CONTINUE TO TERMINATE, BECOME EXERCISABLE,
AND/OR REMAIN EXERCISABLE FOLLOWING SUCH TERMINATION OF EMPLOYMENT, AND
RESTRICTED STOCK AWARDS, PERFORMANCE UNIT AWARDS AND STOCK BONUSES THEN HELD BY
SUCH PARTICIPANT TO TERMINATE, VEST, AND/OR CONTINUE TO VEST OR BECOME FREE OF
RESTRICTIONS AND CONDITIONS TO ISSUANCE, AS THE CASE MAY BE, FOLLOWING SUCH
TERMINATION OF EMPLOYMENT, IN EACH CASE IN THE MANNER DETERMINED BY THE
COMMITTEE; PROVIDED, HOWEVER, THAT (I) NO INCENTIVE AWARD MAY REMAIN EXERCISABLE
OR CONTINUE TO VEST FOR MORE THAN TWO YEARS BEYOND THE DATE SUCH INCENTIVE AWARD
WOULD HAVE TERMINATED IF NOT FOR THE PROVISIONS OF THIS SECTION 11.3 BUT IN NO
EVENT BEYOND ITS EXPIRATION DATE; (II) ANY SUCH ACTION ADVERSELY AFFECTING ANY
OUTSTANDING INCENTIVE AWARD WILL NOT BE EFFECTIVE WITHOUT THE CONSENT OF THE
AFFECTED PARTICIPANT (SUBJECT TO THE RIGHT OF THE COMMITTEE TO TAKE WHATEVER
ACTION IT DEEMS APPROPRIATE UNDER SECTIONS 3.2(C), 4.3 AND 13 OF THE PLAN); AND
(III) ANY SUCH ACTION DOES NOT CAUSE ANY OUTSTANDING INCENTIVE AWARD TO BECOME
SUBJECT TO THE REQUIREMENTS OF SECTION 409A OF THE CODE.

 

11.4  DETERMINATION OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

 

(A)  THE CHANGE IN A PARTICIPANT’S STATUS FROM THAT OF AN EMPLOYEE OF THE
COMPANY OR ANY SUBSIDIARY TO THAT OF A NON-EMPLOYEE CONSULTANT OR ADVISOR OF THE
COMPANY OR ANY

 

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SUBSIDIARY WILL, FOR PURPOSES OF THE PLAN, BE DEEMED TO RESULT IN A TERMINATION
OF SUCH PARTICIPANT’S EMPLOYMENT WITH THE COMPANY AND ITS SUBSIDIARIES, UNLESS
THE COMMITTEE OTHERWISE DETERMINES IN ITS SOLE DISCRETION.

 

(B)  THE CHANGE IN A PARTICIPANT’S STATUS FROM THAT OF A NON-EMPLOYEE CONSULTANT
OR  ADVISOR OF THE COMPANY OR ANY SUBSIDIARY TO THAT OF AN EMPLOYEE OF THE
COMPANY OR ANY SUBSIDIARY WILL NOT, FOR PURPOSES OF THE PLAN, BE DEEMED TO
RESULT IN A TERMINATION OF SUCH PARTICIPANT’S SERVICE AS A NON-EMPLOYEE
CONSULTANT OR ADVISOR WITH THE COMPANY AND ITS SUBSIDIARIES, AND SUCH
PARTICIPANT WILL THEREAFTER BE DEEMED TO BE AN EMPLOYEE OF THE COMPANY OR ITS
SUBSIDIARIES UNTIL SUCH PARTICIPANT’S EMPLOYMENT IS TERMINATED, IN WHICH EVENT
SUCH PARTICIPANT WILL BE GOVERNED BY THE PROVISIONS OF THIS PLAN RELATING TO
TERMINATION OF EMPLOYMENT (SUBJECT TO PARAGRAPH (A), ABOVE).

 

(C)  UNLESS THE COMMITTEE OTHERWISE DETERMINES IN ITS SOLE DISCRETION, A
PARTICIPANT’S EMPLOYMENT OR OTHER SERVICE WILL, FOR PURPOSES OF THE PLAN, BE
DEEMED TO HAVE TERMINATED ON THE DATE RECORDED ON THE PERSONNEL OR OTHER RECORDS
OF THE COMPANY OR THE SUBSIDIARY FOR WHICH THE PARTICIPANT PROVIDES EMPLOYMENT
OR OTHER SERVICE, AS DETERMINED BY THE COMMITTEE IN ITS SOLE DISCRETION BASED
UPON SUCH RECORDS.

 

12.           PAYMENT OF WITHHOLDING TAXES.

 

12.1  GENERAL RULES.  THE COMPANY IS ENTITLED TO (A) WITHHOLD AND DEDUCT FROM
FUTURE WAGES OF THE PARTICIPANT (OR FROM OTHER AMOUNTS THAT MAY BE DUE AND OWING
TO THE PARTICIPANT FROM THE COMPANY OR A SUBSIDIARY), OR MAKE OTHER ARRANGEMENTS
FOR THE COLLECTION OF, ALL AMOUNTS THE COMPANY REASONABLY DETERMINES ARE LEGALLY
REQUIRED AND NECESSARY TO SATISFY ANY AND ALL FEDERAL, FOREIGN, STATE AND LOCAL
WITHHOLDING AND EMPLOYMENT-RELATED TAX REQUIREMENTS ATTRIBUTABLE TO AN INCENTIVE
AWARD, INCLUDING, WITHOUT LIMITATION, THE GRANT, EXERCISE OR VESTING OF, OR
PAYMENT OF DIVIDENDS WITH RESPECT TO, AN INCENTIVE AWARD; (B) WITHHOLD CASH PAID
OR PAYABLE OR SHARES OF COMMON STOCK FROM THE SHARES ISSUED OR OTHERWISE
ISSUABLE TO PARTICIPANT IN CONNECTION WITH AN INCENTIVE AWARD, PROVIDED SUCH
ACTION DOES NOT CAUSE THE INCENTIVE AWARD TO BECOME SUBJECT TO THE REQUIREMENTS
OF SECTION 409A OF THE CODE; OR (C) REQUIRE THE PARTICIPANT PROMPTLY TO REMIT
THE AMOUNT OF SUCH WITHHOLDING TO THE COMPANY BEFORE TAKING ANY ACTION,
INCLUDING ISSUING ANY SHARES OF COMMON STOCK, WITH RESPECT TO AN INCENTIVE
AWARD.

 

12.2  SPECIAL RULES.  THE COMMITTEE MAY, IN ITS SOLE DISCRETION AND UPON TERMS
AND CONDITIONS ESTABLISHED BY THE COMMITTEE, PERMIT OR REQUIRE A PARTICIPANT TO
SATISFY, IN WHOLE OR IN PART, ANY WITHHOLDING OR EMPLOYMENT-RELATED TAX
OBLIGATION DESCRIBED IN SECTION 12.1 OF THE PLAN BY ELECTING TO TENDER, OR BY
ATTESTATION AS TO OWNERSHIP OF, PREVIOUSLY ACQUIRED SHARES THAT HAVE BEEN HELD
FOR THE PERIOD OF TIME NECESSARY TO AVOID A CHARGE TO THE COMPANY’S EARNINGS FOR
FINANCIAL REPORTING PURPOSES AND THAT ARE OTHERWISE ACCEPTABLE TO THE COMMITTEE,
BY DELIVERY OF A BROKER EXERCISE NOTICE OR A COMBINATION OF SUCH METHODS,
PROVIDED SUCH ACTION DOES NOT CAUSE THE INCENTIVE AWARD TO BECOME SUBJECT TO THE
REQUIREMENTS OF SECTION 409A OF THE CODE.  FOR PURPOSES OF SATISFYING A
PARTICIPANT’S WITHHOLDING OR EMPLOYMENT-RELATED TAX OBLIGATION, PREVIOUSLY
ACQUIRED SHARES TENDERED OR COVERED BY AN ATTESTATION WILL BE VALUED AT THEIR
FAIR MARKET VALUE.

 

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13.           CHANGE IN CONTROL.

 

13.1  A “CHANGE IN CONTROL” SHALL BE DEEMED TO HAVE OCCURRED IF THE EVENT SET
FORTH IN ANY ONE OF THE FOLLOWING PARAGRAPHS SHALL HAVE OCCURRED:

 

(A)  THE SALE, LEASE, EXCHANGE OR OTHER TRANSFER, DIRECTLY OR INDIRECTLY, OF
SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY (IN ONE TRANSACTION OR IN A
SERIES OF RELATED TRANSACTIONS) TO A PERSON OR ENTITY THAT IS NOT CONTROLLED BY
THE COMPANY; OR

 

(B)  THE APPROVAL OF STOCKHOLDERS OF THE COMPANY OF ANY PLAN OR PROPOSAL FOR THE
LIQUIDATION OR DISSOLUTION OF THE COMPANY; OR

 

(C)  A MERGER OR CONSOLIDATION TO WHICH THE COMPANY IS A PARTY IF THE
STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF SUCH
MERGER OR CONSOLIDATION HAVE “BENEFICIAL OWNERSHIP” (AS DEFINED IN RULE 13D-3
UNDER THE EXCHANGE ACT), IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF SUCH MERGER
OR CONSOLIDATION, OF SECURITIES OF THE SURVIVING CORPORATION REPRESENTING LESS
THAN 50% OF THE COMBINED VOTING POWER OF THE SURVIVING CORPORATION’S THEN
OUTSTANDING SECURITIES ORDINARILY HAVING THE RIGHT TO VOTE AT ELECTIONS OF
DIRECTORS; OR

 

(D)  ANY PERSON, OTHER THAN (I) THE COMPANY, (II) ANY TRUSTEE OR OTHER FIDUCIARY
HOLDING SECURITIES UNDER ANY EMPLOYEE BENEFIT PLAN OF THE COMPANY,
(III) RANDOLPH L. MARTEN OR ANY OF HIS AFFILIATES, OR (IV) CHRISTINE K. MARTEN
OR ANY OF HER AFFILIATES, BECOMES AFTER THE EFFECTIVE DATE OF THE PLAN THE
“BENEFICIAL OWNER” (AS DEFINED IN RULE 13D-3 UNDER THE EXCHANGE ACT), DIRECTLY
OR INDIRECTLY, OF 50% OR MORE OF THE COMBINED VOTING POWER OF THE COMPANY’S
OUTSTANDING SECURITIES ORDINARILY HAVING THE RIGHT TO VOTE AT ELECTIONS OF
DIRECTORS.

 

13.2  ACCELERATION OF VESTING.  WITHOUT LIMITING THE AUTHORITY OF THE COMMITTEE
UNDER SECTIONS 3.2 AND 4.3 OF THE PLAN, IF A CHANGE IN CONTROL OF THE COMPANY
OCCURS, THEN, IF APPROVED BY THE COMMITTEE IN ITS SOLE DISCRETION EITHER IN AN
AGREEMENT EVIDENCING AN INCENTIVE AWARD AT THE TIME OF GRANT OR AT ANY TIME
AFTER THE GRANT OF AN INCENTIVE AWARD: (A) ALL OUTSTANDING OPTIONS AND STOCK
APPRECIATION RIGHTS WILL BECOME IMMEDIATELY EXERCISABLE IN FULL AND WILL REMAIN
EXERCISABLE IN ACCORDANCE WITH THEIR TERMS; (B) ALL OUTSTANDING RESTRICTED STOCK
AWARDS WILL BECOME IMMEDIATELY FULLY VESTED AND NON-FORFEITABLE; AND (C) ALL
OUTSTANDING PERFORMANCE UNIT AWARDS AND STOCK BONUSES THEN HELD BY THE
PARTICIPANT WILL VEST AND/OR CONTINUE TO VEST IN THE MANNER DETERMINED BY THE
COMMITTEE AND SET FORTH IN THE AGREEMENT EVIDENCING SUCH PERFORMANCE UNITS
AWARDS OR STOCK BONUSES.

 

13.3  CASH PAYMENT.  IF A CHANGE IN CONTROL OF THE COMPANY OCCURS, THEN THE
COMMITTEE, IF APPROVED BY THE COMMITTEE IN ITS SOLE DISCRETION EITHER IN AN
AGREEMENT EVIDENCING AN INCENTIVE AWARD AT THE TIME OF GRANT OR AT ANY TIME
AFTER THE GRANT OF AN INCENTIVE AWARD, AND WITHOUT THE CONSENT OF ANY
PARTICIPANT AFFECTED THEREBY, MAY DETERMINE THAT: (I) SOME OR ALL PARTICIPANTS
HOLDING OUTSTANDING OPTIONS WILL RECEIVE, WITH RESPECT TO SOME OR ALL OF THE
SHARES OF COMMON STOCK SUBJECT TO SUCH OPTIONS, AS OF THE EFFECTIVE DATE OF ANY
SUCH CHANGE IN CONTROL OF THE COMPANY, CASH IN AN AMOUNT EQUAL TO THE EXCESS OF
THE FAIR MARKET VALUE OF SUCH SHARES IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF
SUCH CHANGE IN CONTROL OF THE COMPANY OVER THE EXERCISE PRICE PER SHARE OF SUCH
OPTIONS (OR,

 

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in the event that there is no excess, that such Options will be terminated); and
(ii) some or all Participants holding Performance Unit Awards will receive, with
respect to some or all of the shares of Common Stock subject to such Performance
Unit Awards, as of the effective date of any such Change in Control of the
Company, cash in an amount equal the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control. 
Notwithstanding the foregoing provisions of this Section 13.3, the Committee may
not make a cash payment if such payment would cause the Option or Performance
Unit Award to become subject to the requirements of Section 409A of the Code.

 

13.4  LIMITATION ON CHANGE IN CONTROL PAYMENTS.  NOTWITHSTANDING ANYTHING IN
SECTION 13.2 OR 13.3 OF THE PLAN TO THE CONTRARY, IF, WITH RESPECT TO A
PARTICIPANT, THE ACCELERATION OF THE VESTING OF AN INCENTIVE AWARD AS PROVIDED
IN SECTION 13.2 OR THE PAYMENT OF CASH IN EXCHANGE FOR ALL OR PART OF AN
INCENTIVE AWARD AS PROVIDED IN SECTION 13.3 (WHICH ACCELERATION OR PAYMENT COULD
BE DEEMED A “PAYMENT” WITHIN THE MEANING OF SECTION 280G(B)(2) OF THE CODE),
TOGETHER WITH ANY OTHER “PAYMENTS” THAT SUCH PARTICIPANT HAS THE RIGHT TO
RECEIVE FROM THE COMPANY OR ANY CORPORATION THAT IS A MEMBER OF AN “AFFILIATED
GROUP” (AS DEFINED IN SECTION 1504(A) OF THE CODE WITHOUT REGARD TO
SECTION 1504(B) OF THE CODE) OF WHICH THE COMPANY IS A MEMBER, WOULD CONSTITUTE
A “PARACHUTE PAYMENT” (AS DEFINED IN SECTION 280G(B)(2) OF THE CODE), THEN THE
“PAYMENTS” TO SUCH PARTICIPANT PURSUANT TO SECTION 13.2 OR 13.3 OF THE PLAN WILL
BE REDUCED TO THE LARGEST AMOUNT AS WILL RESULT IN NO PORTION OF SUCH “PAYMENTS”
BEING SUBJECT TO THE EXCISE TAX IMPOSED BY SECTION 4999 OF THE CODE; PROVIDED,
THAT SUCH REDUCTION SHALL BE MADE ONLY IF THE AGGREGATE AMOUNT OF THE PAYMENTS
AFTER SUCH REDUCTION EXCEEDS THE DIFFERENCE BETWEEN (A) THE AMOUNT OF SUCH
PAYMENTS ABSENT SUCH REDUCTION MINUS (B) THE AGGREGATE AMOUNT OF THE EXCISE TAX
IMPOSED UNDER SECTION 4999 OF THE CODE ATTRIBUTABLE TO ANY SUCH EXCESS PARACHUTE
PAYMENTS.  NOTWITHSTANDING THE FOREGOING SENTENCE, IF A PARTICIPANT IS SUBJECT
TO A SEPARATE AGREEMENT WITH THE COMPANY OR A SUBSIDIARY THAT EXPRESSLY
ADDRESSES THE POTENTIAL APPLICATION OF SECTIONS 280G OR 4999 OF THE CODE
(INCLUDING, WITHOUT LIMITATION, THAT “PAYMENTS” UNDER SUCH AGREEMENT OR
OTHERWISE WILL BE REDUCED, THAT THE PARTICIPANT WILL HAVE THE DISCRETION TO
DETERMINE WHICH “PAYMENTS” WILL BE REDUCED, THAT SUCH “PAYMENTS” WILL NOT BE
REDUCED OR THAT SUCH “PAYMENTS” WILL BE “GROSSED UP” FOR TAX PURPOSES), THEN
THIS SECTION 13.4 WILL NOT APPLY, AND ANY “PAYMENTS” TO A PARTICIPANT PURSUANT
TO SECTION 13.2 OR 13.3 OF THE PLAN WILL BE TREATED AS “PAYMENTS” ARISING UNDER
SUCH SEPARATE AGREEMENT.

 

14.           RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

 

14.1  EMPLOYMENT OR SERVICE.  NOTHING IN THE PLAN WILL INTERFERE WITH OR LIMIT
IN ANY WAY THE RIGHT OF THE COMPANY OR ANY SUBSIDIARY TO TERMINATE THE
EMPLOYMENT OR SERVICE OF ANY ELIGIBLE RECIPIENT OR PARTICIPANT AT ANY TIME, NOR
CONFER UPON ANY ELIGIBLE RECIPIENT OR PARTICIPANT ANY RIGHT TO CONTINUE IN THE
EMPLOY OR SERVICE OF THE COMPANY OR ANY SUBSIDIARY.

 

14.2  RIGHTS AS A STOCKHOLDER.  AS A HOLDER OF INCENTIVE AWARDS (OTHER THAN
RESTRICTED STOCK AWARDS), A PARTICIPANT WILL HAVE NO RIGHTS AS A STOCKHOLDER
UNLESS AND UNTIL SUCH INCENTIVE AWARDS ARE EXERCISED FOR, OR PAID IN THE FORM
OF, SHARES OF COMMON STOCK AND THE PARTICIPANT BECOMES THE HOLDER OF RECORD OF
SUCH SHARES.  EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, NO ADJUSTMENT WILL BE
MADE FOR DIVIDENDS OR DISTRIBUTIONS WITH RESPECT TO SUCH INCENTIVE AWARDS AS TO
WHICH THERE IS A RECORD DATE PRECEDING THE DATE THE PARTICIPANT BECOMES THE
HOLDER OF RECORD OF SUCH SHARES, EXCEPT AS THE COMMITTEE MAY DETERMINE IN ITS
DISCRETION, PROVIDED SUCH ADJUSTMENT FOR DIVIDENDS OR

 

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distributions does not cause the Incentive Award to become subject to the
requirements of Section 409A of the Code.

 

14.3  RESTRICTIONS ON TRANSFER.

 

(A)  EXCEPT PURSUANT TO TESTAMENTARY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION OR AS OTHERWISE EXPRESSLY PERMITTED BY SUBSECTIONS (B) AND
(C) BELOW, NO RIGHT OR INTEREST OF ANY PARTICIPANT IN AN INCENTIVE AWARD PRIOR
TO THE EXERCISE (IN THE CASE OF OPTIONS) OR VESTING OR ISSUANCE (IN THE CASE OF
RESTRICTED STOCK AWARDS, PERFORMANCE UNIT AWARDS OR STOCK BONUSES) OF SUCH
INCENTIVE AWARD WILL BE ASSIGNABLE OR TRANSFERABLE, OR SUBJECTED TO ANY LIEN,
DURING THE LIFETIME OF THE PARTICIPANT, EITHER VOLUNTARILY OR INVOLUNTARILY,
DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW OR OTHERWISE.

 

(B)  A PARTICIPANT WILL BE ENTITLED TO DESIGNATE A BENEFICIARY TO RECEIVE AN
INCENTIVE AWARD UPON SUCH PARTICIPANT’S DEATH, AND IN THE EVENT OF SUCH
PARTICIPANT’S DEATH, PAYMENT OF ANY AMOUNTS DUE UNDER THE PLAN WILL BE MADE TO,
AND EXERCISE OF ANY OPTIONS (TO THE EXTENT PERMITTED PURSUANT TO SECTION 11 OF
THE PLAN) MAY BE MADE BY, SUCH BENEFICIARY.  IF A DECEASED PARTICIPANT HAS
FAILED TO DESIGNATE A BENEFICIARY, OR IF A BENEFICIARY DESIGNATED BY THE
PARTICIPANT FAILS TO SURVIVE THE PARTICIPANT, PAYMENT OF ANY AMOUNTS DUE UNDER
THE PLAN WILL BE MADE TO, AND EXERCISE OF ANY OPTIONS (TO THE EXTENT PERMITTED
PURSUANT TO SECTION 11 OF THE PLAN) MAY BE MADE BY, THE PARTICIPANT’S LEGAL
REPRESENTATIVES, HEIRS AND LEGATEES.  IF A DECEASED PARTICIPANT HAS DESIGNATED A
BENEFICIARY AND SUCH BENEFICIARY SURVIVES THE PARTICIPANT BUT DIES BEFORE
COMPLETE PAYMENT OF ALL AMOUNTS DUE UNDER THE PLAN OR EXERCISE OF ALL
EXERCISABLE OPTIONS, THEN SUCH PAYMENTS WILL BE MADE TO, AND THE EXERCISE OF
SUCH OPTIONS MAY BE MADE BY, THE LEGAL REPRESENTATIVES, HEIRS AND LEGATEES OF
THE BENEFICIARY.

 

(C)  UPON A PARTICIPANT’S REQUEST, THE COMMITTEE MAY, IN ITS SOLE DISCRETION,
PERMIT A TRANSFER OF ALL OR A PORTION OF A NON-STATUTORY STOCK OPTION, OTHER
THAN FOR VALUE, TO SUCH PARTICIPANT’S CHILD, STEPCHILD, GRANDCHILD, PARENT,
STEPPARENT, GRANDPARENT, SPOUSE, FORMER SPOUSE, SIBLING, NIECE, NEPHEW,
MOTHER-IN-LAW, FATHER-IN-LAW, SON-IN-LAW, DAUGHTER-IN-LAW, BROTHER-IN-LAW, OR
SISTER-IN-LAW, ANY PERSON SHARING SUCH PARTICIPANT’S HOUSEHOLD (OTHER THAN A
TENANT OR EMPLOYEE), A TRUST IN WHICH ANY OF THE FOREGOING HAVE MORE THAN FIFTY
PERCENT OF THE BENEFICIAL INTERESTS, A FOUNDATION IN WHICH ANY OF THE FOREGOING
(OR THE PARTICIPANT) CONTROL THE MANAGEMENT OF ASSETS, AND ANY OTHER ENTITY IN
WHICH THESE PERSONS (OR THE PARTICIPANT) OWN MORE THAN FIFTY PERCENT OF THE
VOTING INTERESTS.  ANY PERMITTED TRANSFEREE WILL REMAIN SUBJECT TO ALL THE TERMS
AND CONDITIONS APPLICABLE TO THE PARTICIPANT PRIOR TO THE TRANSFER.  A PERMITTED
TRANSFER MAY BE CONDITIONED UPON SUCH REQUIREMENTS AS THE COMMITTEE MAY, IN ITS
SOLE DISCRETION, DETERMINE, INCLUDING, BUT NOT LIMITED TO EXECUTION AND/OR
DELIVERY OF APPROPRIATE ACKNOWLEDGEMENTS, OPINION OF COUNSEL, OR OTHER DOCUMENTS
BY THE TRANSFEREE.

 

14.4  NON-EXCLUSIVITY OF THE PLAN.  NOTHING CONTAINED IN THE PLAN IS INTENDED TO
MODIFY OR RESCIND ANY PREVIOUSLY APPROVED COMPENSATION PLANS OR PROGRAMS OF THE
COMPANY OR CREATE ANY LIMITATIONS ON THE POWER OR AUTHORITY OF THE BOARD TO
ADOPT SUCH ADDITIONAL OR OTHER COMPENSATION ARRANGEMENTS AS THE BOARD MAY DEEM
NECESSARY OR DESIRABLE.

 

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15.           SECURITIES LAW AND OTHER RESTRICTIONS.

 

Notwithstanding any other provision of the Plan or any agreements entered into
pursuant to the Plan, the Company will not be required to issue any shares of
Common Stock under this Plan, and a Participant may not sell, assign, transfer
or otherwise dispose of shares of Common Stock issued pursuant to Incentive
Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable
securities laws of a state or foreign jurisdiction or an exemption from such
registration under the Securities Act and applicable state securities laws, and
(b) there has been obtained any other consent, approval or permit from any other
U.S. which the Committee, in its sole discretion, deems necessary or advisable. 
The Company may condition such issuance, sale or transfer upon the receipt of
any representations or agreements from the parties involved, and the placement
of any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.

 

16.           PERFORMANCE-BASED COMPENSATION PROVISIONS.

 

THE COMMITTEE, WHEN IT IS COMPRISED SOLELY OF TWO OR MORE OUTSIDE DIRECTORS
MEETING THE REQUIREMENTS OF SECTION 162(M) OF THE CODE (“SECTION 162(M)”), IN
ITS SOLE DISCRETION, MAY DESIGNATE WHETHER ANY INCENTIVE AWARDS ARE INTENDED TO
BE “PERFORMANCE-BASED COMPENSATION” WITHIN THE MEANING OF SECTION 162(M).  ANY
INCENTIVE AWARDS SO DESIGNATED WILL, TO THE EXTENT REQUIRED BY SECTION 162(M),
BE CONDITIONED UPON THE ACHIEVEMENT OF ONE OR MORE PERFORMANCE CRITERIA, AND
SUCH PERFORMANCE CRITERIA WILL BE ESTABLISHED BY THE COMMITTEE WITHIN THE TIME
PERIOD PRESCRIBED BY, AND WILL OTHERWISE COMPLY WITH THE REQUIREMENTS OF,
SECTION 162(M) GIVING DUE REGARD TO THE DISPARATE TREATMENT UNDER SECTION 162(M)
OF OPTIONS AND STOCK APPRECIATION RIGHTS (WHERE COMPENSATION IS DETERMINED BASED
SOLELY ON AN INCREASE IN THE VALUE OF THE UNDERLYING STOCK AFTER THE DATE OF
GRANT OR AWARD), AS COMPARED TO OTHER FORMS OF COMPENSATION, INCLUDING
RESTRICTED STOCK AWARDS, PERFORMANCE UNIT AWARDS AND STOCK BONUSES.  THE
COMMITTEE SHALL ALSO CERTIFY IN WRITING THAT SUCH PERFORMANCE CRITERIA HAVE BEEN
MET PRIOR TO PAYMENT OF COMPENSATION TO THE EXTENT REQUIRED BY SECTION 162(M).

 

17.           EXCLUSION FROM SECTION 409A OF THE CODE.

 

It is intended that the Plan and all Incentive Awards hereunder be issued and
administered in a manner that will cause such Incentive Awards to not be treated
as deferred compensation subject to the requirements of Section 409A of the
Code.  The Committee is authorized to adopt rules or regulations deemed
necessary or appropriate, and to take such other actions determined to be
reasonably necessary, to qualify for any exception or exclusion from the
requirements of Section 409A of the Code (including any transition or
grandfather rules relating thereto).

 

18.           PLAN AMENDMENT, MODIFICATION AND TERMINATION.

 

The Board may suspend or terminate the Plan or any portion thereof at any time. 
The Board may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided,

 

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however, that no such amendments to the Plan will be effective without approval
of the Company’s stockholders if: (i) stockholder approval of the amendment is
then required pursuant to Section 422 of the Code or the rules of the Nasdaq
National Market or the rules of any other national exchange that lists the
Company; or (ii) such amendment seeks to modify Section 3.2(d) hereof.  No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected Participant;
provided, however, that this sentence will not impair the right of the Committee
to take whatever action it deems appropriate under Sections 3.2(c), 4.3 and 13
of the Plan.

 

19.           EFFECTIVE DATE AND DURATION OF THE PLAN.

 

The Plan is effective as of the Effective Date.  The Plan will terminate at
midnight on the tenth (10th) anniversary of such Effective Date, and may be
terminated prior to such time by Board action.  No Incentive Award will be
granted after termination of the Plan.  Incentive Awards outstanding upon
termination of the Plan may continue to be exercised, earned or become free of
restrictions, according to their terms.

 

20.           MISCELLANEOUS.

 

20.1  GOVERNING LAW.  EXCEPT TO THE EXTENT EXPRESSLY PROVIDED HEREIN OR IN
CONNECTION WITH OTHER MATTERS OF CORPORATE GOVERNANCE AND AUTHORITY (ALL OF
WHICH SHALL BE GOVERNED BY THE LAWS OF THE COMPANY’S JURISDICTION OF
INCORPORATION), THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION AND
EFFECT OF THE PLAN AND ANY RULES, REGULATIONS AND ACTIONS RELATING TO THE PLAN
WILL BE GOVERNED BY AND CONSTRUED EXCLUSIVELY IN ACCORDANCE WITH THE LAWS OF THE
STATE OF WISCONSIN, NOTWITHSTANDING THE CONFLICTS OF LAWS PRINCIPLES OF ANY
JURISDICTIONS.

 

20.2  SUCCESSORS AND ASSIGNS.  THE PLAN WILL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE SUCCESSORS AND PERMITTED ASSIGNS OF THE COMPANY AND THE
PARTICIPANTS.

 

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