Exhibit 10.2

 

FEI COMPANY

1995 STOCK INCENTIVE PLAN, AS AMENDED

 

As amended effective October 19, 2005

 

1.             Purpose. The purpose of this Stock Incentive Plan (the “Plan”) is
to enable FEI Company (the “Company”) to attract and retain the services of
(1) selected employees, officers and directors of the Company or of any
subsidiary of the Company and (2) selected nonemployee agents, consultants,
advisors, persons involved in the sale or distribution of the Company’s products
and independent contractors of the Company or any subsidiary.

 

2.             Shares Subject to the Plan. Subject to adjustment as provided
below and in paragraph 14, the shares to be offered under the Plan shall consist
of Common Stock of the Company, and the total number of shares of Common Stock
that may be issued under the Plan shall not exceed 8,000,0000 shares.  The
shares issued under the Plan may be authorized and unissued shares or reacquired
shares.  If an option, stock appreciation right, restricted stock unit or
performance unit granted under the Plan expires, terminates or is canceled, the
unissued shares subject to such option, stock appreciation right, restricted
stock unit or performance unit shall again be available under the Plan.  If
shares sold or awarded as a bonus under the Plan are forfeited to the Company or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan.

 

3.             Effective Date and Duration of Plan.

 

(a)           Effective Date.  The Plan shall become effective as of April 21,
1995.  No option, stock appreciation right, restricted stock unit or performance
unit granted under the Plan shall become exercisable, however, until the Plan is
approved by the affirmative vote of the holders of a majority of the shares of
Common Stock represented at a shareholders meeting at which a quorum is present
and any such awards under the Plan prior to such approval shall be conditioned
on and subject to such approval.  Subject to this limitation, options, stock
appreciation rights, restricted stock units and performance units may be granted
and shares may be awarded as bonuses or sold under the Plan at any time after
the effective date and before termination of the Plan.

 

(b)           Duration.  The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
such shares have lapsed.  The Board of Directors may suspend or terminate the
Plan at any time except with respect to options, performance units, restricted
stock units and shares subject to restrictions then outstanding under the Plan. 
Termination shall not affect any outstanding options, any right of the Company
to repurchase shares or the forfeitability of shares issued under the Plan.

 

4.             Administration.

 

(a)           Board of Directors.  The Plan shall be administered by the Board
of Directors of the Company, which shall determine and designate from time to
time the individuals to whom awards shall be made, the amount of the awards and
the other terms and conditions of the awards.  Subject to the provisions of the
Plan, the Board of Directors may from time to time adopt and amend rules and
regulations relating to administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the

 

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Plan.  The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive.  The
Board of Directors may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any related agreement in the manner and to
the extent it shall deem expedient to carry the Plan into effect, and it shall
be the sole and final judge of such expediency.

 

(b)           Committee.  The Board of Directors may delegate to a committee of
the Board of Directors or specified officers of the Company, or both
(the ”Committee”) any or all authority for administration of the Plan.  If
authority is delegated to a Committee, all references to the Board of Directors
in the Plan shall mean and relate to the Committee except (i) as otherwise
provided by the Board of Directors, (ii) that only the Board of Directors may
amend or terminate the Plan as provided in paragraphs 3 and 15 and (iii) that a
Committee including officers of the Company shall not be permitted to grant
options to persons who are officers of the Company.

 

5.             Types of Awards; Eligibility.  The Board of Directors may, from
time to time, take the following action, separately or in combination, under the
Plan:  (i) grant Incentive Stock Options, as defined in section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), as provided in
paragraphs 6(a) and 6(b); (ii) grant options other than Incentive Stock Options
(“Non-Statutory Stock Options”) as provided in paragraphs 6(a) and 6(c);
(iii) award stock bonuses as provided in paragraph 7; (iv) sell shares subject
to restrictions as provided in paragraph 8; (v) grant stock appreciation rights
as provided in paragraph 9; (vi) grant cash bonus rights as provided in
paragraph 10; (vii) grant performance units as provided in paragraph 11;
(viii) grant foreign qualified awards as provided in paragraph 12; and
(ix) grant restricted stock units as provided in paragraph 13.  Any such awards
may be made to employees, including employees who are officers or directors, and
to other individuals described in paragraph 1 who the Board of Directors
believes have made or will make an important contribution to the Company or any
subsidiary of the Company; provided, however, that only employees of the Company
shall be eligible to receive Incentive Stock Options under the Plan.  The Board
of Directors shall select the individuals to whom awards shall be made and shall
specify the action taken with respect to each individual to whom an award is
made.  At the discretion of the Board of Directors, an individual may be given
an election to surrender an award in exchange for the grant of a new award.  No
employee may be granted options or stock appreciation rights under the Plan for
more than an aggregate of 200,000 shares of Common Stock in connection with the
hiring of the employee or 250,000 shares of Common Stock otherwise in each
calendar year thereafter.

 

6.             Option Grants.

 

(a)           General Rules Relating to Options.

 

(i)            Terms of Grant.  The Board of Directors may grant options under
the Plan.  With respect to each option grant, the Board of Directors shall
determine the number of shares subject to the option, the option price, the
period of the option, the time or times at which the option may be exercised and
whether the option is an Incentive Stock Option or a Non-Statutory Stock
Option.  At the time of the grant of an option or at any time thereafter, the
Board of Directors may provide that an optionee who exercised an option with
Common Stock of the Company shall automatically receive a new option to purchase
additional shares equal to the number of shares surrendered and may specify the
terms and conditions of such new options.

 

(ii)           Exercise of Options.  Except as provided in
paragraph 6(a) (iv) or as determined by the Board of Directors, no option
granted under the Plan may be exercised unless at the time of

 

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such exercise the optionee is employed by or in the service of the Company or
any subsidiary of the Company and shall have been so employed or provided such
service continuously since the date such option was granted.  Absence on leave
or on account of illness or disability under rules established by the Board of
Directors shall not, however, be deemed an interruption of employment or service
for this purpose.  Unless otherwise determined by the Board of Directors,
vesting of options shall not continue during an absence on leave (including an
extended illness) or on account of disability.  Except as provided in
paragraphs 6(a) (iv) and 14, options granted under the Plan may be exercised
from time to time over the period stated in each option in such amounts and at
such times as shall be prescribed by the Board of Directors, provided that
options shall not be exercised for fractional shares.  Unless otherwise
determined by the Board of Directors, if the optionee does not exercise an
option in any one year with respect to the full number of shares to which the
optionee is entitled in that year, the optionee’s rights shall be cumulative and
the optionee may purchase those shares in any subsequent year during the term of
the option.

 

(iii)          Nontransferability.  Each Incentive Stock Option and, unless
otherwise determined by the Board of Directors, each other option granted under
the Plan by its terms shall be nonassignable and nontransferable by the
optionee, either voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of the optionee’s
domicile at the time of death.

 

(iv)          Termination of Employment or Service.

 

(A)          General Rule.  Unless otherwise determined by the Board of
Directors, in the event the employment or service of the optionee with the
Company or a subsidiary terminates for any reason other than because of physical
disability or death as provided in subparagraphs 6(a)(iv)(B) and (C), the option
may be exercised at any time prior to the expiration date of the option or the
expiration of 30 days after the date of such termination, whichever is the
shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.

 

(B)           Termination Because of Total Disability.  Unless otherwise
determined by the Board of Directors, in the event of the termination of
employment or service because of total disability, the option may be exercised
at any time prior to the expiration date of the option or the expiration of
12 months after the date of such termination, whichever is the shorter period,
but only if and to the extent the optionee was entitled to exercise the option
at the date of such termination.  The term “total disability” means a medically
determinable mental or physical impairment which is expected to result in death
or which has lasted or is expected to last for a continuous period of 12 months
or more and which causes the optionee to be unable, in the opinion of the
Company and two independent physicians, to perform his or her duties as an
employee, director, officer or consultant of the Company and to be engaged in
any substantial gainful activity.  Total disability shall be deemed to have
occurred on the first day after the Company and the two independent physicians
have furnished their opinion of total disability to the Company.

 

(C)           Termination Because of Death.  Unless otherwise determined by the
Board of Directors, in the event of the death of an optionee while employed by
or providing service to the Company or a subsidiary, the option may be exercised
at any time prior to the expiration date of the option or the expiration of 12
months after the date of death, whichever is the shorter period, for any portion
of the option exercisable as of the date of death and any outstanding unvested
portion of the option, which shall become fully vested and immediately
exercisable as of the date of death, and only by the person or persons to whom
such optionee’s rights under the option shall pass by the optionee’s will or by
the laws of descent and distribution of the state or country of domicile at the
time of death.

 

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(D)          Amendment of Exercise Period Applicable to Termination.  The Board
of Directors, at the time of grant or, with respect to an option that is not an
Incentive Stock Option, at any time thereafter, may extend the 30-day and
12-month exercise periods any length of time not longer than the original
expiration date of the option, and may increase the portion of an option that is
exercisable, subject to such terms and conditions as the Board of Directors may
determine.

 

(E)           Failure to Exercise Option.  To the extent that the option of any
deceased optionee or of any optionee whose employment or service terminates is
not exercised within the applicable period, all further rights to purchase
shares pursuant to such option shall cease and terminate.

 

(v)           Purchase of Shares.  Unless the Board of Directors determines
otherwise, shares may be acquired pursuant to an option granted under the Plan
only upon receipt by the Company of notice in writing from the optionee of the
optionee’s intention to exercise, specifying the number of shares as to which
the optionee desires to exercise the option and the date on which the optionee
desires to complete the transaction, and if required in order to comply with the
Securities Act of 1933, as amended, containing a representation that it is the
optionee’s present intention to acquire the shares for investment and not with a
view to distribution.  Unless the Board of Directors determines otherwise, on or
before the date specified for completion of the purchase of shares pursuant to
an option, the optionee must have paid the Company the full purchase price of
such shares in cash (including, with the consent of the Board of Directors, cash
that may be the proceeds of a loan from the Company (provided that, with respect
to an Incentive Stock Option, such loan is approved at the time of option
grant)) or, with the consent of the Board of Directors, in whole or in part, in
Common Stock of the Company valued at fair market value, restricted stock,
performance units or other contingent awards denominated in either stock or
cash, promissory notes and other forms of consideration.  The fair market value
of Common Stock provided in payment of the purchase price shall be determined by
the Board of Directors.  If the Common Stock of the Company is not publicly
traded on the date the option is exercised, the Board of Directors may consider
any valuation methods it deems appropriate and may, but is not required to,
obtain one or more independent appraisals of the Company.  If the Common Stock
of the Company is publicly traded on the date the option is exercised, the fair
market value of Common Stock provided in payment of the purchase price shall be
the closing price of the Common Stock as reported in The Wall Street Journal on
the last trading day preceding the date the option is exercised, or such other
reported value of the Common Stock as shall be specified by the Board of
Directors.  No shares shall be issued until full payment for the shares has been
made.  With the consent of the Board of Directors (which, in the case of an
Incentive Stock Option, shall be given only at the time of option grant), an
optionee may request the Company to apply automatically the shares to be
received upon the exercise of a portion of a stock option (even though stock
certificates have not yet been issued) to satisfy the purchase price for
additional portions of the option.  Each optionee who has exercised an option
shall immediately upon notification of the amount due, if any, pay to the
Company in cash amounts necessary to satisfy any applicable federal, state and
local tax withholding requirements.  If additional withholding is or becomes
required beyond any amount deposited before delivery of the certificates, the
optionee shall pay such amount to the Company on demand.  If the optionee fails
to pay the amount demanded, the Company may withhold that amount from other
amounts payable by the Company to the optionee, including salary, subject to
applicable law.  With the consent of the Board of Directors an optionee may
satisfy this obligation, in whole or in part, by having the Company withhold
from the shares to be issued upon the exercise that number of shares that would
satisfy the withholding amount due or by delivering to the Company Common Stock
to satisfy the withholding amount.  Upon the exercise of an option, the number
of shares reserved for issuance under the Plan shall be reduced by the number of
shares issued upon exercise of the option.

 

(b)           Incentive Stock Options.  Incentive Stock Options shall be subject
to the following

 

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additional terms and conditions:

 

(i)            Limitation on Amount of Grants.  No employee may be granted
Incentive Stock Options under the Plan if the aggregate fair market value, on
the date of grant, of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by that employee during any calendar
year under the Plan and under all incentive stock option plans (within the
meaning of section 422 of the Code) of the Company or any parent or subsidiary
of the Company exceeds $100,000.

 

(ii)           Limitations on Grants to 10 Percent Shareholders.  An Incentive
Stock Option may be granted under the Plan to an employee possessing more than
10 percent of the total combined voting power of all classes of stock of the
Company or of any parent or subsidiary of the Company only if the option price
is at least 110 percent of the fair market value, as described in
paragraph 6(b)(iv), of the Common Stock subject to the option on the date it is
granted and the option by its terms is not exercisable after the expiration of
five years from the date it is granted.

 

(iii)          Duration of Options.  Subject to paragraphs 6(a) (ii) and
6(b) (ii), Incentive Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors, except that no Incentive
Stock Option shall be exercisable after the expiration of 10 years from the date
it is granted.

 

(iv)          Option Price.  The option price per share shall be determined by
the Board of Directors at the time of grant.  Except as provided in
paragraph 6(b) (ii), the option price shall not be less than 100 percent of the
fair market value of the Common Stock covered by the Incentive Stock Option at
the date the option is granted.  The fair market value shall be determined by
the Board of Directors.  If the Common Stock of the Company is not publicly
traded on the date the option is granted, the Board of Directors may consider
any valuation methods it deems appropriate and may, but is not required to,
obtain one or more independent appraisals of the Company.  If the Common Stock
of the Company is publicly traded on the date the option is exercised, the fair
market value shall be deemed to be the closing price of the Common Stock as
reported in The Wall Street Journal on the day preceding the date the option is
granted, or, if there has been no sale on that date, on the last preceding date
on which a sale occurred or such other value of the Common Stock as shall be
specified by the Board of Directors.

 

(v)           Limitation on Time of Grant.  No Incentive Stock Option shall be
granted on or after the tenth anniversary of the effective date of the Plan.

 

(vi)          Conversion of Incentive Stock Options.  The Board of Directors may
at any time without the consent of the optionee convert an Incentive Stock
Option to a Non-Statutory Stock Option.

 

(c)           Non-Statutory Stock Options.  Non-Statutory Stock Options shall be
subject to the following terms and conditions in addition to those set forth in
Section 6(a) above:

 

(i)            Option Price.  The option price for Non-Statutory Stock Options
shall be determined by the Board of Directors at the time of grant and may be
any amount determined by the Board of Directors.

 

(ii)           Duration of Options.  Non-Statutory Stock Options granted under
the Plan shall continue in effect for the period fixed by the Board of
Directors.

 

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7.             Stock Bonuses.  The Board of Directors may award shares under the
Plan as stock bonuses.  Shares awarded as a bonus shall be subject to the terms,
conditions, and restrictions determined by the Board of Directors.  The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Board of Directors.  If shares are subject to forfeiture, all
dividends or other distributions paid by the Company with respect to the shares
shall be retained by the Company until the shares are no longer subject to
forfeiture, at which time all accumulated amounts shall be paid to the
recipient.  The Board of Directors may require the recipient to sign an
agreement as a condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to satisfy tax
withholding requirements.  The agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of
Directors.  The certificates representing the shares awarded shall bear any
legends required by the Board of Directors. The Company may require any
recipient of a stock bonus to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements.  If the recipient fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
recipient, including salary or fees for services, subject to applicable law. 
With the consent of the Board of Directors, a recipient may deliver Common Stock
to the Company to satisfy this withholding obligation.  Upon the issuance of a
stock bonus, the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued.

 

8.             Restricted Stock.  The Board of Directors may issue shares under
the Plan for such consideration (including promissory notes and services) as
determined by the Board of Directors.  Shares issued under the Plan shall be
subject to the terms, conditions and restrictions determined by the Board of
Directors.  The restrictions may include restrictions concerning
transferability, repurchase by the Company and forfeiture of the shares issued,
together with such other restrictions as may be determined by the Board of
Directors.  If shares are subject to forfeiture or repurchase by the Company,
all dividends or other distributions paid by the Company with respect to the
shares shall be retained by the Company until the shares are no longer subject
to forfeiture or repurchase, at which time all accumulated amounts shall be paid
to the recipient.  All Common Stock issued pursuant to this paragraph 8 shall be
subject to a purchase agreement, which shall be executed by the Company and the
prospective recipient of the shares prior to the delivery of certificates
representing such shares to the recipient.  The purchase agreement may contain
any terms, conditions, restrictions, representations and warranties required by
the Board of Directors.  The certificates representing the shares shall bear any
legends required by the Board of Directors.  The Company may require any
purchaser of restricted stock to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements.  If the purchaser fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
purchaser, including salary, subject to applicable law.  With the consent of the
Board of Directors, a purchaser may deliver Common Stock to the Company to
satisfy this withholding obligation.  Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued.

 

9.             Stock Appreciation Rights.

 

(a)           Grant.  Stock appreciation rights may be granted under the Plan by
the Board of Directors, subject to such rules, terms, and conditions as the
Board of Directors prescribes.

 

(b)           Exercise.

 

(i)            Each stock appreciation right shall entitle the holder, upon
exercise, to receive from the Company in exchange therefore an amount equal in
value to the excess of the fair market

 

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value on the date of exercise of one share of Common Stock of the Company over
its fair market value on the date of grant (or, in the case of a stock
appreciation right granted in connection with an option, the excess of the fair
market value of one share of Common Stock of the Company over the option price
per share under the option to which the stock appreciation right relates),
multiplied by the number of shares covered by the stock appreciation right or
the option, or portion thereof, that is surrendered.  No stock appreciation
right shall be exercisable at a time that the amount determined under this
subparagraph is negative.  Payment by the Company upon exercise of a stock
appreciation right may be made in Common Stock valued at fair market value, in
cash, or partly in Common Stock and partly in cash, all as determined by the
Board of Directors.

 

(ii)           A stock appreciation right shall be exercisable only at the time
or times established by the Board of Directors.  If a stock appreciation right
is granted in connection with an option, the following rules shall apply: 
(1) the stock appreciation right shall be exercisable only to the extent and on
the same conditions that the related option could be exercised; (2) the stock
appreciation rights shall be exercisable only when the fair market value of the
stock exceeds the option price of the related option; (3) the stock appreciation
right shall be for no more than 100 percent of the excess of the fair market
value of the stock at the time of exercise over the option price; (4) upon
exercise of the stock appreciation right, the option or portion thereof to which
the stock appreciation right relates terminates; and (5) upon exercise of the
option, the related stock appreciation right or portion thereof terminates.

 

(iii)          The Board of Directors may withdraw any stock appreciation right
granted under the Plan at any time and may impose any conditions upon the
exercise of a stock appreciation right or adopt rules and regulations from time
to time affecting the rights of holders of stock appreciation rights.  Such
rules and regulations may govern the right to exercise stock appreciation rights
granted prior to adoption or amendment of such rules and regulations as well as
stock appreciation rights granted thereafter.

 

(iv)          For purposes of this paragraph 9, the fair market value of the
Common Stock shall be determined as of the date the stock appreciation right is
exercised, under the methods set forth in paragraph 6(b) (iv).

 

(v)           No fractional shares shall be issued upon exercise of a stock
appreciation right.  In lieu thereof, cash may be paid in an amount equal to the
value of the fraction or, if the Board of Directors shall determine, the number
of shares may be rounded downward to the next whole share.

 

(vi)          Each stock appreciation right granted in connection with an
Incentive Stock Option, and unless otherwise determined by the Board of
Directors, each other stock appreciation right granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder’s domicile at the time of
death, and each stock appreciation right by its terms shall be exercisable
during the holder’s lifetime only by the holder.

 

(vii)         Each participant who has exercised a stock appreciation right
shall, upon notification of the amount due, pay to the Company in cash amounts
necessary to satisfy any applicable federal, state and local tax withholding
requirements.  If the participant fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
participant including salary, subject to applicable law.  With the consent of
the Board of Directors a participant may satisfy this obligation, in whole or in
part, by having the Company withhold from any shares to be issued upon the
exercise that number of shares that would satisfy the withholding amount due or
by delivering Common Stock to the Company to satisfy the withholding amount.

 

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(viii)        Upon the exercise of a stock appreciation right for shares, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued.  Cash payments of stock appreciation rights shall not
reduce the number of shares of Common Stock reserved for issuance under the
Plan.

 

10.  Cash Bonus Rights.

 

(a)           Grant.  The Board of Directors may grant cash bonus rights under
the Plan in connection with (i) options granted or previously granted,
(ii) stock appreciation rights granted or previously granted, (iii) stock
bonuses awarded or previously awarded and (iv) shares sold or previously sold
under the Plan.  Cash bonus rights will be subject to rules, terms and
conditions as the Board of Directors may prescribe.  Unless otherwise determined
by the Board of Directors, each cash bonus right granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder’s domicile at the time of
death.  The payment of a cash bonus shall not reduce the number of shares of
Common Stock reserved for issuance under the Plan.

 

(b)           Cash Bonus Rights in Connection With Options.  A cash bonus right
granted in connection with an option will entitle an optionee to a cash bonus
when the related option is exercised (or terminates in connection with the
exercise of a stock appreciation right related to the option) in whole or in
part if, in the sole discretion of the Board of Directors, the bonus right will
result in a tax deduction that the Company has sufficient taxable income to
use.  If an optionee purchases shares upon exercise of an option and does not
exercise a related stock appreciation right, the amount of the bonus, if any,
shall be determined by multiplying the excess of the total fair market value of
the shares to be acquired upon the exercise over the total option price for the
shares by the applicable bonus percentage.  If the optionee exercises a related
stock appreciation right in connection with the termination of an option, the
amount of the bonus, if any, shall be determined by multiplying the total fair
market value of the shares and cash received pursuant to the exercise of the
stock appreciation right by the applicable bonus percentage.  The bonus
percentage applicable to a bonus right, including a previously granted bonus
right, may be changed from time to time at the sole discretion of the Board of
Directors but shall in no event exceed 75 percent.

 

(c)           Cash Bonus Rights in Connection With Stock Bonus.  A cash bonus
right granted in connection with a stock bonus will entitle the recipient to a
cash bonus payable when the stock bonus is awarded or restrictions, if any, to
which the stock is subject lapse.  If bonus stock awarded is subject to
restrictions and is repurchased by the Company or forfeited by the holder, the
cash bonus right granted in connection with the stock bonus shall terminate and
may not be exercised.  The amount and timing of payment of a cash bonus shall be
determined by the Board of Directors.

 

(d)           Cash Bonus Rights in Connection With Stock Purchases.  A cash
bonus right granted in connection with the purchase of stock pursuant to
paragraph 8 will entitle the recipient to a cash bonus when the shares are
purchased or restrictions, if any, to which the stock is subject lapse.  Any
cash bonus right granted in connection with shares purchased pursuant to
paragraph 8 shall terminate and may not be exercised in the event the shares are
repurchased by the Company or forfeited by the holder pursuant to applicable
restrictions.  The amount of any cash bonus to be awarded and timing of payment
of a cash bonus shall be determined by the Board of Directors.

 

(e)           Taxes.  The Company shall withhold from any cash bonus paid
pursuant to

 

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paragraph 10 the amount necessary to satisfy any applicable federal, state and
local withholding requirements.

 

11.           Performance Units.  The Board of Directors may grant performance
units consisting of monetary units which may be earned in whole or in part if
the Company achieves certain goals established by the Board of Directors over a
designated period of time, but not in any event more than 10 years.  The goals
established by the Board of Directors may include earnings per share, return on
shareholders’ equity, return on invested capital, and such other goals as may be
established by the Board of Directors.  In the event that the minimum
performance goal established by the Board of Directors is not achieved at the
conclusion of a period, no payment shall be made to the participants.  In the
event the maximum corporate goal is achieved, 100 percent of the monetary value
of the performance units shall be paid to or vested in the participants. 
Partial achievement of the maximum goal may result in a payment or vesting
corresponding to the degree of achievement as determined by the Board of
Directors.  Payment of an award earned may be in cash or in Common Stock or in a
combination of both, and may be made when earned, or vested and deferred, as the
Board of Directors determines.  Deferred awards shall earn interest on the terms
and at a rate determined by the Board of Directors.  Unless otherwise determined
by the Board of Directors, each performance unit granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder’s domicile at the time of
death.  Each participant who has been awarded a performance unit shall, upon
notification of the amount due, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax withholding requirements. 
If the participant fails to pay the amount demanded, the Company may withhold
that amount from other amounts payable by the Company to the participant,
including salary or fees for services, subject to applicable law.  With the
consent of the Board of Directors a participant may satisfy this obligation, in
whole or in part, by having the Company withhold from any shares to be issued
that number of shares that would satisfy the withholding amount due or by
delivering Common Stock to the Company to satisfy the withholding amount.  The
payment of a performance unit in cash shall not reduce the number of shares of
Common Stock reserved for issuance under the Plan.  The number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued upon payment of an award.

 

12.           Foreign Qualified Grants.  Awards under the Plan may be granted to
such officers and employees of the Company and its subsidiaries and such other
persons described in paragraph 1 residing in foreign jurisdictions as the Board
of Directors may determine from time to time.  The Board of Directors may adopt
such supplements to the Plan as may be necessary to comply with the applicable
laws of such foreign jurisdictions and to afford participants favorable
treatment under such laws; provided, however, that no award shall be granted
under any such supplement with terms which are more beneficial to the
participants than the terms permitted by the Plan.

 

13.           Restricted Stock Units.

 

(a)           Grant.  Restricted stock units may be granted at any time and from
time to time as determined by the Board of Directors.  For this purpose, a
restricted stock unit shall mean a bookkeeping entry representing an amount
equal to the fair market value of one share of Common Stock, granted pursuant to
this paragraph 13.  Each restricted stock unit represents an unfunded and
unsecured obligation of the Company.  Each restricted stock unit grant will be
evidenced by an agreement that will specify such other terms and conditions as
the Board of Directors, in its sole discretion, will determine, including all
terms, conditions, and restrictions related to the grant, the number of
restricted stock units and the form of payout, which, subject to
paragraph 13(d), may be left to the discretion of the Board of Directors.

 

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(b)           Vesting Criteria and Other Terms.  The Board of Directors will set
vesting criteria in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of restricted stock units that will
be paid out to the participant.  The Board of Directors may set vesting criteria
based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis
determined by the Board of Directors in its discretion.

 

(c)           Earning Restricted Stock Units.  Upon meeting the applicable
vesting criteria, the participant will be entitled to receive a payout as
specified in the award agreement.  Notwithstanding the foregoing, at any time
after the grant of restricted stock units, the Board of Directors, in its sole
discretion, may reduce or waive any vesting criteria that must be met to receive
a payout.

 

(d)           Form and Timing of Payment.  Payment of earned restricted stock
units will be made as soon as practicable after the date(s) set forth in the
award agreement.  The Board of Directors, in its sole discretion, may pay earned
restricted stock units in cash, shares of Common Stock, or a combination
thereof.  Shares of Common Stock represented by restricted stock units that are
fully paid in cash again will be available for grant under the Plan.

 

(e)           Cancellation.  On the date set forth in the award agreement, all
unearned restricted stock units will be forfeited to the Company.

 

(f)            Transferability.  Unless otherwise determined by the Board of
Directors, each restricted stock unit granted under the Plan by its terms shall
be nonassignable and nontransferable by the holder, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the holder’s domicile at the time of death.

 

14.           Changes in Capital Structure.

 

(a)           Stock Splits; Stock Dividends.  If the outstanding Common Stock of
the Company is hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares or dividend payable in shares,
recapitalization or reclassification appropriate adjustment shall be made by the
Board of Directors in the number and kind of shares available for grants under
the Plan.  In addition, the Board of Directors shall make appropriate adjustment
in the number and kind of shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, so that the optionee’s
proportionate interest before and after the occurrence of the event is
maintained.  Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Board of
Directors.  Any such adjustments made by the Board of Directors shall be
conclusive.

 

(b)           Mergers, Reorganizations, Etc.  In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a subsidiary is a party or
a sale of all or substantially all of the Company’s assets (each, a
“Transaction”), the Board of Directors shall, in its sole discretion and to the
extent possible under the structure of the Transaction, select one of the
following alternatives for treating outstanding options under the Plan:

 

(i)            Outstanding options shall remain in effect in accordance with
their terms.

 

(ii)           Outstanding options shall be converted into options to purchase
stock in the

 

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corporation that is the surviving or acquiring corporation in the Transaction. 
The amount, type of securities subject thereto and exercise price of the
converted options shall be determined by the Board of Directors of the Company,
taking into account the relative values of the companies involved in the
Transaction and the exchange rate, if any, used in determining shares of the
surviving corporation to be issued to holders of shares of the Company.  Unless
otherwise determined by the Board of Directors, the converted options shall be
vested only to the extent that the vesting requirements relating to options
granted hereunder have been satisfied.

 

(iii)          The Board of Directors shall provide a 30-day period prior to the
consummation of the Transaction during which outstanding options may be
exercised to the extent then exercisable, and upon the expiration of such 30-day
period, all unexercised options shall immediately terminate.  The Board of
Directors may, in its sole discretion, accelerate the exercisability of options
so that they are exercisable in full during such 30-day period.

 

(c)           Dissolution of the Company.  In the event of the dissolution of
the Company, options shall be treated in accordance with paragraph 14(b) (iii).

 

(d)           Rights Issued by Another Corporation.  The Board of Directors may
also grant options, stock appreciation rights, performance units, stock bonuses
and cash bonuses and issue restricted stock under the Plan having terms,
conditions and provisions that vary from those specified in this Plan provided
that any such awards are granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, stock bonuses, cash
bonuses, restricted stock and performance units granted, awarded or issued by
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a Transaction.

 

15.           Amendment of Plan.  The Board of Directors may at any time, and
from time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason.  Except as provided in paragraphs 6(a)(iv), 9, 10 and 14, however,
no change in an award already granted shall be made without the written consent
of the holder of such award.

 

16.           Approvals.  The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter.  The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company’s shares may then be listed, in connection with the grants
under the Plan.  The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate applicable state or federal securities laws.

 

17.           Employment and Service Rights.  Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any subsidiary or interfere in any
way with the right of the Company or any subsidiary by whom such employee is
employed to terminate such employee’s employment at any time, for any reason,
with or without cause, or to decrease such employee’s compensation or benefits,
or (ii) confer upon any person engaged by the Company any right to be retained
or employed by the Company or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Company.

 

18.           Rights as a Shareholder.  The recipient of any award under the
Plan shall have no rights as a shareholder with respect to any Common Stock
until the date of issue to the recipient of a stock certificate for

 

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such shares.  Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs
prior to the date such stock certificate is issued.

 

19.           Option Grants to Non-Employee Directors.

 

(a)           Initial Board Grants.  Each person who is Director when the Plan
is adopted or who becomes a Non-Employee Director thereafter shall be
automatically granted an option to purchase 15,000 shares of Common Stock on the
date the Plan is approved by the shareholders of the Company or when he or she
becomes a Non-Employee Director.  A “Non-Employee Director” is a director who is
not an officer or employee of the Company or any of its subsidiaries.

 

(b)           Additional Grants.  Each Non-Employee Director shall be
automatically granted an option to purchase additional shares of Common Stock in
each calendar year subsequent to the year in which such Non-Employee Director
was granted an option pursuant to paragraph 19(a), such option to be granted as
of the date of the Company’s annual meeting of shareholders held in such
calendar year, provided that the Non-Employee Director continues to serve in
such capacity as of such date.  The number of shares subject to each additional
grant shall be 7,500 shares for each Non-Employee Director.

 

(c)           Exercise Price.  The exercise price of all options granted
pursuant to this paragraph 19 shall be equal to 100 percent of the fair market
value of the Common Stock determined pursuant to paragraph 6(b) (iv).

 

(d)           Term of Option.  The term of each option granted pursuant to this
paragraph 19 shall be 10 years from the date of grant.

 

(e)           Exercisability.  Until an option expires or is terminated and
except as provided in paragraphs 19(f) and 14, an option granted under this
paragraph 19 shall be exercisable according to the following schedule:  2.78%
for each complete month of continuous service after the date of grant, rounded
up to the next full share, until fully vested.  For purposes of this paragraph
19(e), a complete month shall be deemed to be the period which starts on the day
of grant and ends on the same day of the following calendar month, so that each
successive “complete month” ends on the same day of each successive calendar
month (or, in respect of any calendar month which does not include such a day,
that “complete month” shall end on the first day of the next following calendar
month).

 

 (f)           Termination As a Director.  If an optionee ceases to be a
director of the Company for any reason, including death, the option may be
exercised at any time prior to the expiration date of the option or the
expiration of 30 days (or 12 months in the event of death) after the last day
the optionee served as a director, whichever is the shorter period, but only if
and to the extent the optionee was entitled to exercise the option as of the
last day the optionee served as a director, provided, however, that in the event
of death, any outstanding unvested portion of the option shall become fully
vested and immediately exercisable as of the date of death.

 

(g)           Nontransferability.  Each option by its terms shall be
nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the optionee’s domicile at the time of death, and each
option by its terms shall be exercisable during the optionee’s lifetime only by
the optionee.

 

(h)           Exercise of Options.  Options may be exercised upon payment of
cash or shares of

 

1

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Common Stock of the Company in accordance with paragraph 6(a) (v).

 

Adopted:          April 21, 1995

Approved by Shareholders:  May 5, 1995

 

Amendments approved by Shareholders:

 

May 15, 1996

May 15, 1997

May 21, 1998

June 10, 1999

May 18, 2000

October 18, 2001

May 16, 2002

May 15, 2003

May 20, 2004

May 19, 2005

 

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