Exhibit 10.2

Adopted by Board: June 15, 2004

Readopted by Board: July 7, 2004

Approved by Stockholders: July 7, 2004

Amended and Restated: June 3, 2009

QC HOLDINGS, INC.

2004 EQUITY INCENTIVE PLAN

(Amended and Restated, Effective June 3, 2009)

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page ARTICLE I    PURPOSE    1

Section 1.1

   Purpose    1

Section 1.2

   Establishment    1 ARTICLE II    DEFINITIONS    1 ARTICLE III   
ADMINISTRATION    4

Section 3.1

   Administration by Committee    4

Section 3.2

   Committee to Make Rules and Interpret Plan    5

Section 3.3

   Committee Members Ineligible    5 ARTICLE IV    GRANT OF AWARDS; SHARES    6

Section 4.1

   Committee to Grant Awards    6

Section 4.2

   Six-Month Holding Period    6 ARTICLE V    ELIGIBILITY    7 ARTICLE VI   
STOCK OPTIONS    7

Section 6.1

   Grant of Options    7

Section 6.2

   Conditions of Options    7

Section 6.3

   Options to Non-Employee Directors    9 ARTICLE VII    STOCK APPRECIATION
RIGHTS    10

Section 7.1

   Grant of SARs    10

Section 7.2

   Terms and Conditions of Tandem SARs    10

Section 7.3

   Terms and Conditions of Freestanding SARs    10

Section 7.4

   Deemed Exercise    10

Section 7.5

   Additional Terms and Conditions    10

Section 7.6

   Exercise of SARs    11

 

i

--------------------------------------------------------------------------------

ARTICLE VIII    PERFORMANCE SHARE AWARD    11

Section 8.1

   Grant of Performance Share Awards    11

Section 8.2

   Conditions of Performance Share Awards    11 ARTICLE IX    RESTRICTED STOCK
AWARDS    13

Section 9.1

   Grant of Restricted Stock Awards    13

Section 9.2

   Conditions of Restricted Stock Awards    13 ARTICLE X    CASH BONUS    13

Section 10.1

   Grant of Cash Bonus    13

Section 10.2

   Conditions of Cash Bonus    14 ARTICLE XI    OTHER INCENTIVE AWARDS    14

Section 11.1

   Grant of Other Incentive Awards    14

Section 11.2

   Conditions of Other Incentive Awards    14 ARTICLE XII    NON-EMPLOYEE
DIRECTOR AWARDS    15 ARTICLE XIII    STOCK ADJUSTMENTS    15

Section 13.1

   Adjustment of Shares Available; Recapitalization    15 ARTICLE XIV    GENERAL
   16

Section 14.1

   Amendment or Termination of Plan    16

Section 14.2

   Dividends and Dividend Equivalents    16

Section 14.3

   Termination of Employment    16

Section 14.4

   Nonassignability    16

Section 14.5

   Withholding Taxes    17

Section 14.6

   Change of Control    17

Section 14.7

   Forfeiture    17

Section 14.8

   Amendments to Awards    17

Section 14.9

   Regulatory Approval and Listings    18

 

ii

--------------------------------------------------------------------------------

Section 14.10    Right to Continued Employment or other Relationship    18
Section 14.11    Beneficiaries    18 Section 14.12    Indemnification    18
Section 14.13    Reliance on Reports    19 Section 14.14    Relationship to
Other Benefits    19 Section 14.15    Expenses    19 Section 14.16   
Construction    19 Section 14.17    Governing Law    19 Section 14.18    Legal
Compliance    19 Section 14.19    Awards Subject to Code Section 162(m)    19
Section 14.20    Nonexlusivity of the Plan    21

 

iii

--------------------------------------------------------------------------------

ARTICLE I

PURPOSE

Section 1.1 Purpose. The QC Holdings, Inc. 2004 Equity Incentive Plan (the
“Plan”) is intended as an incentive and to encourage stock ownership by certain
employees and other persons associated with QC Holdings, Inc., a Kansas
corporation (the “Corporation”), so that they may acquire or increase their
proprietary interest in the success of the Corporation, and to encourage them to
remain in the employ of, or continue their relationship with, the Corporation.
In addition, the Plan is intended to enable the Corporation to retain and
attract personnel of the highest caliber, who by their position, ability and
diligence are able to make important contributions to the Corporation’s success.

A further purpose of the Plan is to provide such persons with additional
incentive and reward opportunities designed to enhance the profitable growth of
the Corporation. So that the appropriate incentive can be provided, the Plan
provides for granting “Options”, “Stock Appreciation Rights”, “Restricted Stock
Awards”, “Cash Bonus Awards”, “Performance Share Awards”, and “Other Incentive
Awards” (all preceding terms defined below) to employees of and certain other
persons associated with the Corporation and its Subsidiaries on the terms and
subject to the conditions set forth in the Plan.

Section 1.2 Establishment. The Plan is effective as of June 15, 2004 (the
“Effective Date”), and subject to the provisions of Section 14.1, “Awards” (term
defined below) may be made as provided herein for a period of 10 years after
such date.

The Plan shall be approved by the holders of a majority of the outstanding
shares of “Common Stock” (term defined below), which approval must occur within
the period ending 12 months after the date the Plan is adopted by the “Board”
(term defined below). Pending such approval by the stockholders, Awards under
the Plan may be granted to persons who are, or within the preceding six months
have been, “Insider Participants” (term defined below), but no such Awards may
be exercised or transferred prior to receipt of stockholder approval. If
stockholder approval is not obtained within such 12-month period, all such
Awards shall be void.

The Plan shall continue in effect until all matters relating to the payment of
Awards and administration of the Plan have been settled.

ARTICLE II

DEFINITIONS

“Award” means, individually, collectively or in tandem, any Option, Stock
Appreciation Right, Restricted Stock Award, Performance Share Award, Cash Bonus,
or Other Incentive Award granted under the Plan to an Eligible Person by the
Committee pursuant to such terms, conditions, restrictions, and limitations, if
any, as the Committee may establish by the Award Notice or otherwise.

“Award Notice” means any written instrument that establishes the terms,
conditions, restrictions, and limitations applicable to an Award in addition to
those established by the Plan and by the Committee’s exercise of its
administrative powers.

 

1

--------------------------------------------------------------------------------

“Board” means the Board of Directors of the Corporation.

“Cash Bonus” means an Award granted under Article X of the Plan.

“Change of Control Event” means each of the following:

(a) A change in stockholder ownership of the Corporation, whereby a person or
company, or a group of affiliated persons or companies, acquires from a person
or company, other than the Corporation, a sufficiently large block of Common
Stock, which, when voted together with the shares of Common Stock of all other
stockholders of the Corporation whose proxies or written consents are solicited
by such person, company or group without the benefit of a management-supported
proxy statement at any meeting of the stockholders of the Corporation, would
enable such person or company or group of affiliated persons or companies to
elect a majority of the members of the Board; provided, however, that such a
change in stockholder ownership of the Corporation shall not be deemed to be a
Change of Control Event if, prior to such change in stockholder ownership, such
person or company or group of affiliated persons or companies owned a
sufficiently large block of Common Stock that when voted together with the
shares of Common Stock of all other stockholders of the Corporation whose
proxies or written consents are solicited by such person, company or group
without the benefit of a management-supported proxy statement at any meeting of
the stockholders of the Corporation, would enable such person or company or
group of affiliated persons or companies to elect a majority of the members of
the Board;

(b) A merger or consolidation of the Corporation with and into another company,
other than with or into a wholly-owned Subsidiary of the Corporation, where the
Corporation is not the surviving company; or the Corporation is the surviving
company and the members of the Board immediately prior to the merger or
consolidation do not constitute a majority of the board of directors of the
surviving company after the merger or consolidation;

(c) The sale of all or substantially all of the assets of the Corporation; or

(d) Any other kind of a corporate reorganization or takeover where the
Corporation is not the surviving company; or the Corporation is the surviving
company and the members of the Board immediately prior to the reorganization do
not constitute a majority of the board of directors of the surviving company.

Notwithstanding the above, any increase in shares of Common Stock of the
Corporation owned by the Corporation, or any wholly-owned subsidiary thereof,
shall not constitute a Change of Control Event. With respect to the events
described in subparagraphs (b), (c) and (d) above, the Change of Control Event
shall be deemed to occur on the later of the transaction described in such
subparagraph or a stockholder vote approving such a transaction.

 

2

--------------------------------------------------------------------------------

“Code” means the Internal Revenue Code of 1986. Reference in the Plan to any
section of the Code shall be deemed to include any amendments or successor
provisions to such section and any regulations under such section.

“Committee” means the Compensation Committee of the Board, or such other
committee designated by the Board, authorized to administer the Plan under
Article III hereof. The Committee shall consist of not less than two members,
each of whom is, a “Non-Employee Director” within the meaning of Rule 16b-3
promulgated under Section 16 of the Exchange Act (defined below) and an “outside
director” within the meaning of Code Section 162(m) and the regulations
promulgated thereunder.

“Common Stock” means the common stock, par value $.01 per share, of the
Corporation, and after substitution such other stock as shall be substituted
therefor as provided in Article XIII.

“Date of Grant” means the date on which the granting of an Award is authorized
by the Committee or such later date as may be specified by the Committee in such
authorization.

“Director Award” means any Award granted to a Non-Employee Director pursuant to
Article XII.

“Director Options” means non-qualified Options awarded under Section 6.3.

“Eligible Person” means any employee of the Corporation, any employee of any
Subsidiary or affiliate of the Corporation, any consultant or independent
contractor to the Corporation or any Subsidiary or affiliate of the Corporation,
or any Non-Employee Director.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means (a) during any such time as the Common Stock is not
listed upon an established stock exchange or the Nasdaq National or SmallCap
Markets, the fair market value dollar amount per share determined by the Board,
in good faith; or (b) during such time as the Common Stock is listed upon an
established stock exchange or exchanges or the Nasdaq National or SmallCap
Markets, the reported closing price, or in the case of a listing on the Nasdaq
SmallCap Market the reported last price, of the Common Stock on such stock
exchange or exchanges or markets on the day for which such value is to be
determined, or if no sale of the Common Stock shall have been made on any stock
exchange or the Nasdaq National or SmallCap Markets that day, on the next
preceding day on which there was a sale of such Common Stock.

“Incentive Stock Option” means an Option within the meaning of Section 422 of
the Code.

“Insider Participant” means a Participant who is, or within the preceding six
months was, subject to the provisions of Section 16 of the Exchange Act.

“Non-Employee Director” has the meaning designated under Rule 16b-3(b)(3)(i) of
the Exchange Act.

 

3

--------------------------------------------------------------------------------

“Option” means an Award granted under Article VI of the Plan and includes both
non-qualified options and Incentive Stock Options.

“Other Incentive Award” means an Award granted under Article XI of the Plan.

“Participant” means an Eligible Person of the Corporation or a Subsidiary to
whom an Award has been granted by the Committee under the Plan.

“Performance Share Award” means an Award granted under Article VIII of the Plan.

“Plan” means the QC Holdings, Inc. 2004 Equity Incentive Plan.

“Restricted Stock Award” means an Award granted under Article IX of the Plan.

“Stock Appreciation Right” or “SAR” means an Award granted under Article VII of
the Plan.

“Subsidiary” means any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

ARTICLE III

ADMINISTRATION

Section 3.1 Administration by Committee. The Committee shall administer the
Plan. Unless otherwise provided in the bylaws of the Corporation, the Committee
Charter or the resolutions adopted from time to time by the Board establishing
the Committee, the Board may from time to time remove members from, or add
members to, the Committee. Vacancies on the Committee, howsoever caused, shall
be filled by the Board. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it may determine.
A majority of the Committee shall constitute a quorum and the acts of a majority
of the members present at any meeting at which a quorum is present or acts
reduced to or approved in writing by a majority of the members of the Committee
shall be the valid acts of the Committee.

Subject to the provisions of the Plan, the Committee shall have exclusive power
to:

(a) Select the Eligible Persons to participate in the Plan.

(b) Determine the time or times when Awards will be made.

(c) Determine the form of an Award, whether a Stock Option, a SAR, a Restricted
Stock Award, a Performance Share Award, a Cash Bonus, or Other Incentive Award
established by the Committee in accordance with Article XI below, the number of
shares of Common Stock subject to the Award or with reference to which the Award
is determined, all the terms, conditions (including performance requirements),
restrictions and limitations, if any, of an Award, including the exercise price,
if applicable, the time and conditions of exercise or vesting, and the terms of
any Award Notice, which may include the waiver or, with the consent of the Award
recipient, amendment of prior terms and conditions or acceleration or early
vesting or payment of an Award under certain circumstances determined by the
Committee.

 

4

--------------------------------------------------------------------------------

(d) Determine whether Awards will be granted singly, in combination or in
tandem.

(e) Grant waivers of Plan terms, conditions, restrictions, and limitations.

(f) Accelerate the vesting, exercise, or payment of an Award or the performance
period of an Award when such action or actions would be in the best interest of
the Corporation.

(g) Correct any defect or supply appropriate text for any omission or reconcile
any inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Notice, or other instrument hereunder.

(h) Take any and all other action it deems necessary or advisable for the proper
operation or administration of the Plan.

The Committee shall also have the authority to grant Awards in replacement of
Awards previously granted under the Plan or any other executive compensation
plan of the Corporation or a Subsidiary.

Section 3.2 Committee to Make Rules and Interpret Plan. The Committee shall have
the authority, subject to the provisions of the Plan, to establish, adopt, or
revise such rules and regulations and to make all such determinations relating
to the Plan as it may deem necessary or advisable for the administration of the
Plan. The Committee’s interpretation of the Plan or any Awards granted pursuant
thereto and all decisions and determinations by the Committee with respect to
the Plan shall be final, binding, and conclusive on all parties unless otherwise
determined by the Board.

Section 3.3 Committee Members Ineligible. No Committee member shall be eligible
to participate in the Plan except to the extent set forth in Section 6.3 and
Article XII.

 

5

--------------------------------------------------------------------------------

ARTICLE IV

GRANT OF AWARDS; SHARES

SUBJECT TO THE PLAN

Section 4.1 Committee to Grant Awards. The Committee may, from time to time,
grant Awards to one or more Eligible Persons, provided, however, that:

(a) Subject to Article XIII, an aggregate of five million (5,000,000) shares of
Common Stock are hereby reserved for use in connection with Awards under the
Plan.

(b) During any calendar year, no individual may be granted Options or other
Awards under the Plan that, in the aggregate, may be settled by delivery of more
than 400,000 shares of Common Stock, subject to adjustment as provided in
Article XIII. In addition, with respect to Awards the value of which is based on
the Fair Market Value of Common Stock and that may be settled in cash (in whole
or in part), no individual may be paid during any calendar year cash amounts
relating to such Awards that exceed the greater of the Fair Market Value of the
number of shares of Common Stock set forth in the preceding sentence either at
the date of grant or at the date of settlement. This provision sets forth two
separate limitations, so that Options or other Awards that may be settled solely
by delivery of Common Stock will not operate to reduce the amount or value of
cash-only Awards, and vice versa; nevertheless, Awards that may be settled in
Common Stock or cash must not exceed either limitation.

(c) Any Awards that terminate by expiration, forfeiture, cancellation, or
otherwise without the issuance of shares of Common Stock, are settled in cash in
lieu of Common Stock, or are exchanged in the Committee’s discretion for Awards
not involving Common Stock, shall be available again for grant under the Plan,
so long as the holder of any such Award received no benefits of Common Stock
ownership (including but not limited to dividends) from the shares of Common
Stock related to such Award and provided that such Awards shall still count
towards the holder’s maximum number of shares that may be subject to Awards
during the term of the Plan as provided in paragraph (b) above. The Committee
may from time to time adopt and observe such procedures concerning the counting
of shares of Common Stock against the Plan maximum as it may deem appropriate.

(d) Common Stock delivered by the Corporation in payment of any Award under the
Plan may be authorized and unissued Common Stock or Common Stock held in the
treasury of the Corporation or may be purchased on the open market or by private
purchase.

(e) The Committee shall, in its sole discretion, determine the manner in which
fractional shares arising under the Plan shall be treated.

Section 4.2 Six-Month Holding Period. With respect to Awards granted hereunder
to any Insider Participant on or following the date six months prior to the date
on which the Corporation shall be lawfully required to register the Common Stock
pursuant to Section 12 or 15(d) of the Exchange Act, each such Award which is an
“equity security” (as that term is defined in the Exchange Act) must be held and
not transferred by such Insider Participant for a period of six months from the
Date of Grant. Nothing in this Section 4.2 shall be deemed to prohibit the
exercise of Options within the six month period following the Date of Grant, but
the shares of Common Stock received by an Insider Participant pursuant to the
exercise of an Option must be held and not transferred for a period of six
months from the Date of Grant of the Option so exercised.

 

6

--------------------------------------------------------------------------------

ARTICLE V

ELIGIBILITY

Eligible Persons shall be eligible to receive Awards under the Plan, as the
Committee shall select from time to time. Non-Employee Directors may also
participate in the Plan, but only to the extent set forth in Section 6.3 and
Article XII hereof.

Subject to the provisions of the Plan, the Committee shall, from time to time,
select from the Eligible Persons those to whom Awards shall be granted and shall
determine the type or types of Awards to be made and shall establish in the
related Award Notices the terms, conditions, restrictions and limitations, if
any, applicable to the Awards in addition to those set forth in the Plan and the
administrative rules and regulations issued by the Committee.

ARTICLE VI

STOCK OPTIONS

Section 6.1 Grant of Options. The Committee may, from time to time, subject to
the provisions of the Plan and such other terms and conditions as it may
determine, grant Options to Eligible Persons (including “reload” options
automatically granted upon the occurrence of specified exercises of options).
These Options may be Incentive Stock Options or non-qualified Options, or a
combination of each; provided, however, that Incentive Stock Options may only be
granted to employees of the Corporation or its Subsidiaries. Each grant of an
Option shall be evidenced by an Award Notice executed by the Corporation and the
Participant, and shall contain such terms and conditions and be in such form as
the Committee may from time to time approve, subject to the requirements of
Section 6.2.

Section 6.2 Conditions of Options. Each Option so granted shall be subject to
the following conditions:

(a) Exercise Price. As limited by Section 6.2(e) below, each Option shall state
the exercise price, which shall be set by the Committee in its discretion at the
Date of Grant. The exercise price shall not be subject to change or
“re-pricing,” subject to Section 13.1 below, after the Date of Grant and shall
not be less than 100% of the Fair Market Value of the Common Stock on the Date
of Grant.

 

7

--------------------------------------------------------------------------------

(b) Form of Payment. The exercise price of an Option may be paid (i) in cash or
by check, bank draft or money order payable to the order of the Corporation;
(ii) in shares of Common Stock that have either (I) been owned by the
Participant for more than six months and have been paid for within the meaning
of SEC Rule 144 or (II) were obtained by the Participant in the public market;
(iii) a combination of the foregoing; or (iv) such other consideration as the
Committee may deem appropriate. In addition, the Committee may allow a
Participant to utilize a broker-dealer arrangement if (A) the broker-dealer is a
member of the National Association of Securities Dealers, (B) the broker-dealer
has received from the Participant or the Corporation a fully- and duly-endorsed
agreement evidencing such Option and instructions signed by the Participant
requesting the Corporation to deliver the shares of Common Stock subject to such
Option to the broker-dealer on behalf of the Participant and specifying the
account into which such shares should be deposited, (C) adequate provision has
been made with respect to the payment of any withholding taxes due upon such
exercise, and (D) the broker-dealer and the Participant have otherwise complied
with Section 220.3(e)(4) of Regulation T, 12 CFR, Part 220 and any successor
rules and regulations applicable to such exercise (“Cashless Exercise”);
provided, however, that an Insider Participant may not elect to utilize this
arrangement within six months of the date the Option is granted (unless death or
disability occurs prior to the expiration of such six month period). The
Committee shall establish appropriate methods for accepting Common Stock,
whether restricted or unrestricted, and may impose such conditions as it deems
appropriate on the use of such Common Stock in payment of the exercise price.
Common Stock used to exercise an Option shall be valued at its then Fair Market
Value.

(c) Exercise of Options. Options granted under the Plan shall be exercisable, in
whole or in such installments and at such times, and shall expire at such time,
as shall be provided by the Committee in the Award Notice. Exercise of an Option
shall be by written notice stating the election to exercise in the form and
manner determined by the Committee and the date upon which such notice is
received by the Corporation shall be the exercise date for the Options. Every
share of Common Stock acquired through the exercise of an Option shall be deemed
to be fully paid at the time of exercise and payment of the exercise price.

(d) Other Terms and Conditions. Among other conditions that may be imposed by
the Committee, if deemed appropriate, are those relating to (i) the period or
periods and the conditions of exercisability of any Option; (ii) the minimum
periods during which Participants must be employed by the Corporation or its
Subsidiaries, or must hold Options before they may be exercised; (iii) the
minimum periods during which shares acquired upon exercise must be held before
sale or transfer shall be permitted; (iv) conditions under which such Options or
shares may be subject to forfeiture; (v) restrictions on transferability; and
(vi) the frequency of exercise or the minimum or maximum number of shares that
may be acquired at any one time.

(e) Special Restrictions Relating to Incentive Stock Options. Options issued in
the form of Incentive Stock Options shall, in addition to being subject to all
applicable terms, conditions, restrictions and limitations established by the
Committee, comply with the requirements of Section 422 of the Code (or any
successor section thereto), including, without limitation, the requirement that
the exercise price of an Incentive Stock Option not be less than 100% of the
Fair Market Value of the Common Stock on the Date of Grant (or 110% in the case
of any person who directly or by attribution owns more than ten percent of the
total combined voting power of all classes of stock of the Corporation or any
Subsidiary), the requirement that each Incentive Stock Option, unless sooner
exercised, terminated or canceled, expire no later than 10 years (or five years
in the case of any person who directly or by attribution owns more than ten
percent of the combined voting power of all classes of stock of the Corporation
or any Subsidiary) from its Date of Grant, and the requirement that the
aggregate Fair Market Value (determined on the Date of Grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under the Plan or any
other plan of the Corporation or any Subsidiary) not exceed $100,000.

 

8

--------------------------------------------------------------------------------

(f) Application of Funds. The proceeds received by the Corporation from the sale
of Stock pursuant to Options will be used for general corporate purposes.

Section 6.3 Options to Non-Employee Directors. Notwithstanding any other
provision herein, no Options shall be granted hereunder to Non-Employee
Directors other than the Director Options granted pursuant to this Section 6.3.
Director Options may be awarded at the discretion and with the approval of the
Committee. Such Director Options shall be granted at such time, in such number
and with such restrictions as determined by the Committee. Each Director Option
shall be evidenced by an Award Notice executed by the Corporation and the
Non-Employee Director, and shall include the following terms and provisions:

(a) The Option exercise price per share shall be equal to the Fair Market Value
of one share of Common Stock on the date the Director Option is granted. The
period within which each Option may be exercised shall expire ten years from the
date the option is granted (the “Option Period”), unless ended sooner due to
termination of service or death of the optionee, or if fully exercised prior to
the end of such ten year period.

(b) If the directorship of an optionee is terminated within the Option Period
for any reason other than (i) death of the optionee or (ii) on account of any
act of fraud, intentional misrepresentation, embezzlement, misappropriation, or
conversion of assets or opportunities of the Corporation or any of its
Subsidiaries, the Director Option may be exercised by the optionee, to the
extent the optionee was able to do so at the date of termination of the
directorship.

(c) If an optionee dies during the Option Period, the Director Option may be
exercised, to the extent the optionee was entitled to exercise such Option at
the date of his or her death, within one year after such death (if otherwise
within the Option Period), by the executor or the administrator of the estate of
the optionee, or by the person or persons who shall have lawfully acquired the
Director Option directly from the optionee.

(d) If the directorship of the optionee is terminated within the Option Period
for any of the reasons enumerated in Section 6.3(b)(ii), the Director Option
shall automatically terminate as of the date of termination of such
directorship.

(e) The exercise price of a Director Option may be paid: (A) in cash or by
check, bank draft or money order payable to the order of the Corporation
concurrently with the exercise of the option; (B) in shares of Common Stock that
have either (I) been owned by the Non-Employee Director for more than six months
and have been paid for within the meaning of SEC Rule 144 or (II) were obtained
by the Non-Employee Director in the public market; (C) a combination of the
foregoing; or (D) such other consideration as the Committee may deem
appropriate. In addition to the foregoing, subject to the discretion of the
Committee, any Option granted under the Plan may be exercised by Cashless
Exercise. The Committee shall establish appropriate methods for accepting Common
Stock, and may impose such conditions as it deems appropriate on the use of such
Common Stock in payment of the exercise price. Common Stock used to exercise an
Option shall be valued at its then Fair Market Value.

 

9

--------------------------------------------------------------------------------

ARTICLE VII

STOCK APPRECIATION RIGHTS

Section 7.1 Grant of SARs. Awards may be granted in the form of Stock
Appreciation Rights (SARs). A SAR may be granted in tandem with all or a portion
of a related Option under the Plan (“Tandem SARs”), or may be granted separately
(“Freestanding SARs”). A Tandem SAR may be granted either at the time of the
grant of the related Option or at any time thereafter during the term of the
Option. The grant of a SAR shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions and
be in such form as the Committee may from time to time approve, subject to the
requirements of this Article VII. In no event shall any SARs granted extend for
a period in excess of 10 years from the Date of Grant.

Section 7.2 Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related Option is
exercisable, and the “exercise price” of such a SAR shall be the exercise price
under the related Option. However, at no time shall a Tandem SAR be issued if
the exercise price of its related Option is less than one hundred percent
(100%) of the Fair Market Value of the Stock on the Date of Grant of the Tandem
SAR. If a related Option is exercised as to some or all of the shares covered by
the Award, the related Tandem SAR, if any, shall be canceled automatically to
the extent of the number of shares covered by the Option exercise. Upon exercise
of a Tandem SAR as to some or all of the shares covered by the Award, the
related Option shall be canceled automatically to the extent of the number of
shares covered by such exercise, and such shares shall again be eligible for a
grant in accordance with Article IV hereof, except to the extent any shares of
Common Stock are issued to settle the SAR.

Section 7.3 Terms and Conditions of Freestanding SARs. Freestanding SARs shall
be exercisable in whole or in such installments and at such times as may be
determined by the Committee. Except as limited by Section 6.2(a), the exercise
price of a Freestanding SAR shall be set by the Committee at the Date of Grant.

Section 7.4 Deemed Exercise. The Committee may provide that a SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of such SAR, if at the time the SAR by its terms remains exercisable and, if
exercised, would result in a payment to the holder of such SAR.

Section 7.5 Additional Terms and Conditions. The Committee may, by way of the
Award Notice or otherwise, determine such other terms, conditions, restrictions
and limitations, if any, of any SAR Award, provided they are not inconsistent
with the Plan. Among other conditions that may be imposed by the Committee are
those requirements imposed by Rule 16b-3 of the Exchange Act, including, without
limitation, the requirement that SARs (whether Freestanding or Tandem) granted
to a person who is, or within the preceding six months was, an Insider
Participant shall not be exercisable until the six month anniversary of the
Grant Date.

 

10

--------------------------------------------------------------------------------

Section 7.6 Exercise of SARs. A holder shall exercise his or her SARs by giving
written notice of such exercise in the form and manner determined by the
Committee, and the date upon which such written notice is received by the
Corporation shall be the exercise date for the SARs. A SAR shall entitle the
holder to receive a payment equal to the excess of the Fair Market Value of the
number of shares of Common Stock covered by the SAR on the date of exercise over
the exercise price of the SAR, multiplied by the number of shares with respect
to which the SARs relate; provided, however, that the Committee may unilaterally
limit the appreciation in value of the Common Stock attributable to the SAR at
any time prior to its exercise.

Payment of a SAR may be in cash, in shares of Common Stock or Restricted Stock,
or any combination, as the Committee shall determine. To the extent paid in
shares of Common Stock or Restricted Stock, the value of the Stock or Restricted
Stock so paid shall be the Fair Market Value of a share of Common Stock upon
exercise of the SAR.

ARTICLE VIII

PERFORMANCE SHARE AWARD

Section 8.1 Grant of Performance Share Awards. Grants of Performance Share
Awards may be made by the Committee to any Eligible Person during the term of
the Plan. Each Performance Share Award shall represent one share of Common
Stock. Each Performance Share shall be evidenced by an Award Notice. There may
be more than one award in existence at any one time for any Participant and
performance periods for separate Performance Share Awards need not be identical.

The Performance Shares will be paid out in full or in part on the basis of the
performance of the Corporation following the beginning of the Corporation’s
fiscal year in which the Performance Share Award is made as hereinafter set
forth. In determining the size of Performance Share Awards, the Committee shall
take into account a Participant’s responsibility level, performance, potential,
and cash compensation level, as well as such other considerations as it deems
appropriate. Performance Share Awards shall be deemed to have been made on
January 1 of the year in which awards are made. If any Performance Share Award
granted under the Plan shall be forfeited, canceled, or not paid out in full,
such Performance Share Award may again be granted under the Plan in accordance
with Article IV.

Section 8.2 Conditions of Performance Share Awards. A Performance Share Award
shall be subject to the following terms and conditions:

(a) Performance Share Account. Performance Share Awards shall be credited to a
Performance Share account to be maintained for each holder. Each Performance
Share Award shall be deemed to be the equivalent of one share of Common Stock of
the Corporation. A Performance Share Award under the Plan shall not entitle the
holder to any interest in or to any dividend, voting, or other rights of a
stockholder unless otherwise determined in accordance with Section 14.2. The
value of the Performance Shares in a holder’s Performance Share account at the
time of Award or the time of payment shall be the Fair Market Value at any such
time of an equivalent number of shares of the Common Stock.

 

11

--------------------------------------------------------------------------------

(b) Performance Period and Criteria. Performance Shares shall be contingent upon
the attainment during a performance period of certain performance objectives.
The length of the performance period for each Performance Share Award, the
performance objectives to be achieved during the Performance Share Award period,
and the measure of whether and to what degree such objectives have been attained
shall be conclusively determined by the Committee in the exercise of its
discretion. The Committee may revise performance objectives at such times as it
deems appropriate during the Performance Share Award period in order to take
into account or into consideration any unforeseen events or changes in
circumstances; provided, however, that any such revision which is adverse to the
holder of a Performance Share Award shall require the holder’s consent.

(c) Payment of Award. Following the end of the Performance Share Award period,
the holder of a Performance Share Award shall be entitled to receive payment of
an amount based on the achievement of the performance measures for such
Performance Share Award period. In the event that (i) the Corporation is
lawfully required to register the Common Stock pursuant to Section 12 or 15(d)
of the Exchange Act; and (ii) a recipient of a Performance Share Award is, or
within the preceding six months has been, an Insider Participant, no Performance
Share Award held by such Insider Participant shall be payable within the first
six months from the Date of Grant of such Performance Share Award. The payment
to which a holder of a Performance Share Award shall be entitled at the end of a
Performance Share Award period shall be a dollar amount equal to the Fair Market
Value of the number of shares of Common Stock equal to the number of Performance
Shares earned and payable to such holder; provided, however, that the Committee
may unilaterally limit the appreciation in value of the Common Stock
attributable to the Performance Share Award at any time prior to the end of the
Performance Share Award period.

The Committee may authorize payment of a Performance Share Award in any
combination of cash and shares of Common Stock or all in cash or all in Common
Stock, as it deems appropriate. Such shares may include any restrictions on
transfer and forfeiture provisions as the Committee, from time to time, deems
appropriate.

(d) Additional Terms and Conditions. The Committee may, by way of the Award
Notice or otherwise, determine such other terms, conditions, restrictions and
limitations, if any, of any Performance Share Award, provided they are not
inconsistent with the Plan.

 

12

--------------------------------------------------------------------------------

ARTICLE IX

RESTRICTED STOCK AWARDS

Section 9.1 Grant of Restricted Stock Awards. The Committee may grant a
Restricted Stock Award to any Eligible Person. Restricted Stock Awards shall be
awarded in such number and at such times during the term of the Plan as the
Committee shall determine. Each Restricted Stock Award may be evidenced in such
manner as the Committee deems appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates, and
by an Award Notice setting forth the terms of such Restricted Stock Award.

Section 9.2 Conditions of Restricted Stock Awards. The grant of a Restricted
Stock Award shall be subject to the following:

(a) Restriction Period. Vesting of each Restricted Stock Award shall require the
holder to remain in the employment of the Corporation or a Subsidiary for a
prescribed period (a “Restriction Period”). The Committee shall determine the
Restriction Period or Periods which shall apply to the shares of Common Stock
covered by each Restricted Stock Award or portion thereof. At the end of the
Restriction Period the restrictions imposed hereunder shall lapse with respect
to the shares of Common Stock covered by the Restricted Stock Award or portion
thereof. The Committee may, in its sole discretion, modify or accelerate the
vesting of a Restricted Stock Award under such circumstances as it deems
appropriate.

(b) Restrictions. The holder of a Restricted Stock Award may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of the shares of Common
Stock represented by the Restricted Stock Award during the applicable
Restriction Period. The Committee shall impose such other restrictions on any
shares of Common Stock covered by a Restricted Stock Award as it may deem
advisable including, without limitation, restrictions under applicable Federal
or state securities laws, and may legend the certificates representing
Restricted Stock to give appropriate notice of such restrictions.

(c) Rights as Stockholders. During any Restriction Period, the Committee may, in
its discretion, grant to the holder of a Restricted Stock Award all or any of
the rights of a stockholder with respect to said shares, including, but not by
way of limitation, the right to vote such shares and to receive dividends. If
any dividends or other distributions are paid in shares of Common Stock, all
such shares shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.

ARTICLE X

CASH BONUS

Section 10.1 Grant of Cash Bonus. The Committee may, from time to time,
determine to award cash bonus payments to an Eligible Person based upon
performance criteria established from time to time by the Committee (“Cash
Bonus”). With respect to each such Eligible Person, the bonus awarded hereunder
shall be determined in relation to such person’s level of responsibility in the
Corporation or any Subsidiary and the competitive compensation practices of
other major businesses, and such other factors as are deemed appropriate by the
Committee.

 

13

--------------------------------------------------------------------------------

Section 10.2 Conditions of Cash Bonus. An Award under this Article X shall be
subject to the following terms and conditions:

(a) Amount of Fund. The Committee, in its discretion, shall determine the amount
of the fund to be available for Cash Bonuses for any performance period.

(b) Bonuses and Performance Criteria. Cash Bonuses actually earned by and paid
to Participants will be based primarily upon achievement of such Corporation and
individual performance goals as the Committee may from time to time establish.
The Committee may also set the performance period over which the goals so
established are to be achieved.

(c) Payment of Bonus. Cash Bonuses awarded shall be made at such time as
determined by the Committee following the close of the performance period to
which such awards relate.

(d) Additional Terms and Conditions. The Committee may, by way of a written
instrument or otherwise, determine such other terms, conditions, restrictions
and limitations, if any, of any Cash Bonus, provided they are not inconsistent
with the Plan.

ARTICLE XI

OTHER INCENTIVE AWARDS

Section 11.1 Grant of Other Incentive Awards. The Committee may, in its
discretion, grant other types of awards of, or based on, Common Stock. Other
Incentive Awards are limited to awards under which Common Stock is or may in the
future be acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon such
conditions, including attainment of performance goals, as the Committee shall
determine.

Section 11.2 Conditions of Other Incentive Awards. The Committee may prescribe
limitations or conditions requiring forfeiture by the participant, or permitting
repurchase by the Corporation, of Other Incentive Awards, and may at any time,
if it determines such action to be in the best interests of the Corporation,
accelerate or waive any such limitations or conditions. Each grant of an Other
Incentive Award shall be evidenced by an Award Notice executed by the
Corporation and the Participant, and shall contain such terms and conditions and
be in such form as the Committee may from time to time approve.

Other Incentive Awards may not be sold, assigned, transferred, pledged, or
encumbered except as may be provided in the Award Notice, and in no event may be
transferred other than by will or by the laws of descent and distribution or be
exercised, during the life of the Participant, other than by the Participant or
the Participant’s guardian or legal representative.

The recipient of an Other Incentive Award will have the rights of a stockholder
only to the extent, if any, specified in the Award Notice governing such Other
Incentive Award.

 

14

--------------------------------------------------------------------------------

ARTICLE XII

NON-EMPLOYEE DIRECTOR AWARDS

Shares of restricted or unrestricted Common Stock may be awarded to Non-Employee
Directors at the discretion and with the approval of the Committee. Such Awards
shall be granted at such time, in such number and with such restrictions as
determined by the Committee. The Committee may also, in its discretion, approve
other types of Awards for Non-Employee Directors that are based on the Common
Stock, including stock appreciation rights, stock performance rights and other
incentive awards.

Each Director Award shall be evidenced by an Award Notice executed by the
Corporation and the Non-Employee Director containing the terms, conditions and
restrictions of each Director Award.

ARTICLE XIII

STOCK ADJUSTMENTS

Section 13.1 Adjustment of Shares Available; Recapitalization. If the shares of
Common Stock, as presently constituted, shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of the
Corporation or of another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, stock split, combination of
shares or otherwise), or if the number of such shares of Common Stock shall be
increased through the payment of a stock dividend, or a dividend on the shares
of Common Stock of rights or warrants to purchase securities of the Corporation
shall be made, then there shall be substituted for or added to each share
available under and subject to the Plan as provided in Article IV hereof, and
each share theretofore appropriated or thereafter subject or which may become
subject to Performance Share Awards, Options, SARs, Restricted Stock Awards,
Other Incentive Awards, Director Shares or Director Awards under the Plan, the
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock shall be so changed or for which each such
share shall be exchanged or to which each such share shall be entitled, as the
case may be. In the event there shall be any other change in the number or kind
of the outstanding shares of Common Stock, or any stock or other securities into
which the Common Stock shall have been changed or for which it shall have been
exchanged, then if the Committee shall, in its sole discretion, determine that
such change equitably requires an adjustment in the shares available under and
subject to the Plan, or in any Award theretofore granted or which may be granted
under the Plan, such adjustments shall be made in accordance with such
determination, except that no adjustment of the number of shares of Common Stock
available under the Plan or to which any Award relates that would otherwise be
required shall be made unless and until such adjustment either by itself or with
other adjustments not previously made would require an increase or decrease of
at least 1% in the number of shares of Common Stock available under the Plan or
to which any Award relates immediately prior to the making of such adjustment
(the “Minimum Adjustment”). Any adjustment representing a change of less than
such minimum amount shall be carried forward and made as soon as such adjustment
together with other adjustments required by this Section 13.1 and not previously
made would result in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Section 13.1 which otherwise would not result in a
Minimum Adjustment shall be made with respect to shares of Common Stock relating
to any Award immediately prior to exercise, payment or settlement of such Award.

 

15

--------------------------------------------------------------------------------

No fractional shares of Common Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.

ARTICLE XIV

GENERAL

Section 14.1 Amendment or Termination of Plan. The Board may suspend or
terminate the Plan at any time. In addition, the Board may, from time to time,
amend the Plan in any manner, provided, however, that any amendment to the Plan
shall require approval of the stockholders of the Corporation if, in the opinion
of counsel to the Corporation, such approval is required by any section of the
Exchange Act, any other Federal or state law or any regulations or rules
promulgated thereunder or the rules of Nasdaq (or such other exchange on which
the Common Stock is traded).

Section 14.2 Dividends and Dividend Equivalents. If an Award is granted in the
form of a Performance Share Award, Restricted Stock, or an Option, the Committee
may choose, at the time of the grant of such award or any time thereafter up to
the time of payment of such Award, to include as part of such Award an
entitlement to receive dividends or dividend equivalents subject to such terms,
conditions, restrictions, and limitations, if any, as the Committee may
establish. Dividends and dividend equivalents granted hereunder shall be paid in
such form and manner (i.e., lump sum or installments), and at such time as the
Committee shall determine. All dividends or dividend equivalents which are not
paid currently may, at the Committee’s discretion, accrue interest, be
reinvested into additional shares of Common Stock or, in the case of dividends
or dividend equivalents credited in connection with a Performance Share Award,
be credited as additional Performance Shares and paid to the Participant if and
when, and to the extent that, payment is made pursuant to such Performance Share
Award.

Section 14.3 Termination of Employment. If a Participant’s employment with the
Corporation or a Subsidiary terminates for a reason other than death,
disability, retirement, or any approved reason, all unexercised, unearned, or
unpaid Awards, including, but not by way of limitation, Awards earned, but not
yet paid, all unpaid dividends and dividend equivalents, and all interest
accrued on the foregoing shall be canceled or forfeited, as the case may be,
unless the Participant’s Award Notice provides otherwise. The Committee shall
have the authority to promulgate rules and regulations to (i) determine what
events constitute disability, retirement, or termination for an approved reason
for purposes of the Plan, and (ii) determine the treatment of a Participant
under the Plan in the event of his or her death, disability, retirement, or
termination for an approved reason. Such rules and regulations may include,
without limitation, the method, if any, for prorating a Performance Share Award,
accelerating the vesting of any Options or Restricted Stock Award, or providing
for the exercise of any unexercised Options or SARs in the event of a
Participant’s death, disability, retirement, or termination for an approved
reason.

Section 14.4 Nonassignability. No Awards shall be subject in any manner to
alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfers by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order; provided, however, that Awards (other
than Incentive Stock Options) may, if permitted by the Committee, be transferred
to one or more transferees during the lifetime of the Participant in connection
with the Participant’s estate or tax planning, and such transferees may exercise
rights thereunder in accordance with the terms thereof, but only if and to the
extent consistent with the registration of the offer and sale of Common Stock on
Form S-8, Form S-3, or such other registration form of the Securities and
Exchange Commission, if applicable, as may then be filed and effective with
respect to the Plan. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of, or to subject to execution, attachment or similar process,
any Award contrary to the provisions hereof, shall be void and ineffective,
shall give no right to any purported transferee, and may, at the sole discretion
of the Committee, result in forfeiture of the Award involved in such attempt.

 

16

--------------------------------------------------------------------------------

Section 14.5 Withholding Taxes. The Corporation shall be entitled to deduct from
any payment under the Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment or may require the Participant to pay to it such
tax prior to and as a condition of the making of such payment. In accordance
with any applicable administrative guidelines it establishes, the Committee may
allow a Participant to pay the minimum amount of taxes required by law to be
withheld from an Award by withholding from any payment of Common Stock due as a
result of such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock, having a Fair Market Value, on the date of
payment, equal to the minimum amount of such required withholding taxes
determined on the date that the amount of tax to be withheld is to be
determined; provided, however, that in the event the Participant is, or within
the preceding six months has been an Insider Participant, such an election may
not be made within six months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of such six month
period).

Section 14.6 Change of Control. Awards granted under the Plan to any Participant
may, in the discretion of the Committee, provide that (a) such Awards shall be
immediately vested, fully earned, exercisable, and, in the case of Options,
converted into SARs, as appropriate, upon a Change of Control Event, and (b) the
Corporation shall make full payment to each such Participant with respect to any
Performance Share Award, Cash Bonus or Other Incentive Award, deliver
certificates to such Participant with respect to each Restricted Stock Award,
and permit the exercise of Options or SARs, respectively, granted hereunder to
such Participant.

Section 14.7 Forfeiture. If the employment or directorship of a Participant is
terminated on account of any act of fraud, intentional misrepresentation,
embezzlement, misappropriation, or conversion of assets or opportunities of the
Corporation or any of its Subsidiaries, any Award granted hereunder, whether and
regardless of the extent to which such Award is vested, earned or exercisable,
shall automatically terminate as of the date of termination of such employment
or directorship.

Section 14.8 Amendments to Awards. Subject to the restriction on changing or
“re-pricing” the exercise price as provided in Section 6.2(a) above, the
Committee may at any time unilaterally amend the terms of any Award Notice for
any Award, whether or not presently exercisable, earned, paid or vested, to the
extent it deems appropriate; provided, however, that any such amendment which is
adverse to the Participant shall require the Participant’s consent.

 

17

--------------------------------------------------------------------------------

Section 14.9 Regulatory Approval and Listings. As soon as practicable following
the date on which the Corporation becomes subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Corporation shall use its best
efforts to file with the Securities and Exchange Commission, and keep
continuously effective and usable, a Registration Statement on Form S-8 with
respect to shares of Common Stock subject to Awards hereunder. Notwithstanding
anything contained in the Plan to the contrary, the Corporation shall have no
obligation to issue or deliver certificates representing shares of Common Stock
evidencing Restricted Stock Awards or any other Award relating to shares of
Common Stock prior to:

(a) the obtaining of any approval from, or satisfaction of any waiting period or
other condition imposed by, any governmental agency which the Committee shall,
in its sole discretion, determine to be necessary or advisable, and

(b) the completion of any registration or other qualification of said shares
under any state or Federal law or ruling of any governmental body which the
Committee shall, in its sole discretion, determine to be necessary or advisable.

Section 14.10 Right to Continued Employment or other Relationship. Participation
in the Plan shall not give any Eligible Person any right to remain in the employ
or to continue as a consultant or director of, or maintain any other
relationship with, the Corporation or any Subsidiary. The Corporation or, in the
case of a Subsidiary, the Subsidiary, reserves the right to terminate any
Eligible Person at any time. Further, the adoption of the Plan shall not be
deemed to give any Eligible Person or any other individual any right to be
selected as a Participant or to be granted an Award.

Section 14.11 Beneficiaries. Each Participant shall file with the Corporation a
written designation of one or more persons as the beneficiary (the
“Beneficiary”) who shall be entitled to receive the amount, if any, payable
under the Plan upon his death. A Participant may, from time to time, revoke or
change his Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Corporation. The last such designation
received by the Corporation shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless received
by the Corporation prior to the Participant’s death, and in no event shall be
effective as of a date prior to such receipt.

If such Beneficiary designation is not in effect at the time of a Participant’s
death, or if no designated Beneficiary survives the Participant, or such
designation conflicts with law, the payment of the amount, if any, payable under
the Plan upon his death shall be made to the Participant’s estate. If the
Corporation is in doubt as to the right of any person to receive such amount,
the Corporation may retain such amount, without liability or any interest
thereon, until the rights thereon are determined, or the Corporation may pay
such amount into any court of appropriate jurisdiction and such payment shall be
a complete discharge of the liability of the Plan, the Corporation and the
Committee therefor.

Section 14.12 Indemnification. Each person who is or shall have been a member of
the Committee or of the Board shall be indemnified and held harmless by the
Corporation against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by such
person in satisfaction of judgment in any such action, suit, or proceeding
against such person. He or she shall give the Corporation an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Corporation’s Articles or Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the Corporation may
have to indemnify or hold harmless any such person.

 

18

--------------------------------------------------------------------------------

Section 14.13 Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying or acting in good faith upon
any report made by the independent public accountants of the Corporation and its
Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself. In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken, including
the furnishing of information, or failure to act, if in good faith.

Section 14.14 Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Corporation or any
Subsidiary.

Section 14.15 Expenses. The expenses of administering the Plan shall be borne by
the Corporation subject to such allocation to its Subsidiaries as it deems
appropriate.

Section 14.16 Construction. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the
sections in the Plan are for the convenience of reference only, and in the event
of any conflict, the text of the Plan, rather than such titles or headings,
shall control.

Section 14.17 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Kansas except as superseded by
applicable Federal law.

Section 14.18 Legal Compliance. It is the intent of the Corporation that the
Plan comply in all respects with applicable provisions of Rule 16b-3 and the
Sarbanes-Oxley Act of 2002 in connection with any grant of Awards to or other
transaction by an Insider Participant. Accordingly, if, at such time, any
provision of the Plan or any Award Notice relating to an Award does not comply
with the requirements of Rule 16b-3 or the Sarbanes-Oxley Act of 2002 as then
applicable to any such transaction, such provision will be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 or the Sarbanes-Oxley Act of 2002.

Section 14.19 Awards Subject to Code Section 162(m).

(a) Performance Based Awards. Any Award to an Eligible Person who is a “covered
employee” within the meaning of Code Section 162(m), the exercisability or
settlement of which is subject to the achievement of performance goals, shall
qualify as “qualified performance-based compensation” within the meaning of Code
Section 162(m) and regulations thereunder. The performance goals for such an
Award shall consist of one or more of the business criteria set forth in
paragraph (b), below, and a targeted level or levels of performance with respect
to such criteria, as specified by the Committee in writing prior to (or, in the
event the applicable performance period is one year, within 90 days after
commencement of) the applicable performance period. Performance goals shall be
objective and shall otherwise meet the requirements of Section 162(m)(4)(C) of
the Code and regulations thereunder. Performance goals may differ for such
Awards to different Eligible Persons. The Committee shall specify the weighting
to be given to each performance goal for purposes of determining the final
amount payable with respect to any such Award or with respect to different
Awards to the same Eligible Employee. The Committee may, in its discretion,
reduce the amount of a payout otherwise to be made in connection with such an
Award, but may not exercise discretion to increase such amount. All
determinations by the Committee as to the achievement of performance goals shall
be certified in writing prior to payment under the Plan, in the form of minutes
of a meeting of the Committee or otherwise.

 

19

--------------------------------------------------------------------------------

(b) Business Criteria. Unless and until the Committee proposes for stockholder
approval and the Company’s stockholders approve a change in the general business
criteria set forth in this Section, the attainment of which may determine the
amount or vesting with respect to Awards, the business criteria to be used for
purposes of establishing performance goals for such Awards shall be selected
from among the following alternatives, each of which may be based on absolute
standards or peer industry group comparatives and may be applied at various
organizational levels (e.g., corporate, business unit, division):

 

  (i) Total stockholder return

 

  (ii) Stock price increase

 

  (iii) Return on equity

 

  (iv) Return on capital

 

  (v) Cash flow, including operating cash flows, free cash flow, discounted cash
flow return on investment, and cash flow in excess of cost of capital

 

  (vi) Economic value added

 

  (vii) Market share

 

  (viii) Client/associate satisfaction as measured by survey instruments

 

  (ix) Earnings per share

 

  (x) Revenue levels

 

  (xi) Personal performance

 

  (xii) Productivity measures

 

  (xiii) Diversification of business opportunities

 

  (xiv) Price to earnings ratio

 

  (xv) Expense ratios

 

  (xvi) Total expenditures

 

  (xvii) Completion of key projects

 

  (xviii) Employee retention

 

20

--------------------------------------------------------------------------------

(c) In the event that Code Section 162(m) or applicable tax or securities laws
change to permit Committee discretion to alter the governing performance
measures without disclosing to stockholders and obtaining stockholder approval
of such changes and without thereby exposing the Corporation to potentially
adverse tax or other legal consequences, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval.

Section 14.20 Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor any provision of the Plan will be construed as creating any
limitations on the power of the Board or the Committee to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

 

21