EXHIBIT 10.1

 

 

 

 

 

 

 

LSI INDUSTRIES INC.

 

AMENDED AND RESTATED

 

2012 STOCK INCENTIVE PLAN

 

AS OF NOVEMBER 17, 2016

 

 

 

 

 
 

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TABLE OF CONTENTS

 

1.

Purposes

1

     

2.

Definitions

1

     

3.

Administration of the Plan

5

 

(a)

Authority of Committee

5

 

(b)

Binding Authority

6

 

(c)

Delegation of Authority

6

       

4.

Eligibility

7

     

5.

Common Shares Subject to the Plan

7

 

(a)

Authorized Number of Common Shares

7

 

(b)

Share Counting

7

 

(c)

Award Limitations

8

 

(d)

Shares to be Delivered

8

       

6.

Awards to Participants

8

 

(a)

Stock Options

8

 

(b)

Stock Appreciation Rights

10

 

(c)

Restricted Shares and Restricted Share Units

11

 

(d)

Performance-Based Exception

13

 

(e)

Unrestricted Share Awards

14

 

(f)

Deferred Shares

14

 

(g)

Deferred Share Units

14

       

7.

Deferred Payment

15

     

8.

Dilution and Other Adjustments

15

     

9.

Change in Control

15

     

10.

Termination

16

 

(a)

Termination by Death, Disability, or Retirement

16

 

(b)

Termination for Cause

16

 

(c)

Other Terminations

16

 

(d)

Limitation for ISOs

16

 

(e)

Transfers and Leaves of Absence

16

       

11.

Recoupment or Recovery Policy

17

     

12.

Miscellaneous Provisions

17

 

(a)

Rights as a Shareholder

17

 

(b)

No Loans

17

 

(c)

Assignment or Transfer

17

 

 
 

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(d)

Withholding Taxes

17

 

(e)

No Rights to Awards

18

 

(f)

Beneficiary Designation

18

 

(g)

Fractional Shares

18

 

(h)

Unfunded Plan

18

 

(i)

Severability

18

 

(j)

Limitation of Liability

18

 

(k)

Successors

18

 

(l)

Code Section 409A Compliance

19

       

13.

Effective Date, Amendments, Governing Law and Plan Termination

19

 

(a)

Effective Date

19

 

(b)

Amendments

19

 

(c)

Governing Law

20

 

(d)

Plan Termination

20

 

 
 

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LSI INDUSTRIES INC.
AMENDED AND RESTATED

2012 STOCK INCENTIVE PLAN

AS OF NOVEMBER 17, 2016

 

 

1.

Purposes

 

The purposes of the Plan are to provide long-term incentives to those persons
with significant responsibility for the success and growth of the Company, to
align the interests of such persons with those of the Company’s shareholders, to
assist the Company in recruiting, retaining and motivating employees, directors
and consultants on a competitive basis and to link compensation to performance.

 

2.

Definitions

 

For purposes of the Plan, the following capitalized terms shall have the
meanings specified below:

 

(a)     “Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange
Act.

 

(b)     “Award” means a grant of Stock Options, Stock Appreciation Rights,
Restricted Shares, Restricted Share Units, unrestricted Common Shares, Deferred
Shares or Deferred Share Units or any or all of them, to a Participant.

 

(c)     “Award Agreement” means an agreement, either in written or electronic
format, between the Company and a Participant setting forth the terms and
conditions of an Award granted to the Participant.

 

(d)     “Beneficial Owner” has the meaning given in Rule 13d-3 under the
Exchange Act.

 

(e)     “Board” means the Board of Directors of the Company.

 

(f)     “Cause” means with respect to any Participant, unless otherwise provided
in the applicable Award Agreement, (i) the Participant’s conviction or
misappropriation of money or other property or conviction of a felony, or a
guilty plea or plea of nolo contendere by Participant with respect to a felony,
(ii) conduct by the Participant that is in competition with the Company, conduct
by a Participant that breaches the Participant’s duty of loyalty to the Company
or a Participant’s willful misconduct, any of which materially injures the
Company, (iii) a willful and material breach by the Participant of his or her
obligations under any agreement entered into between the Participant and the
Company that materially injures the Company, or (iv) the Participant’s failure
to substantially perform his or her duties with the Company (other than by
reason of the Participant’s Disability) For Participants subject to Section 16
of the Exchange Act, the determination of whether any conduct, action or failure
to act constitutes “Cause” shall be made by the Committee in its sole
discretion.

 

 
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(g)     “Change in Control” means the occurrence of any of the following events:

 

(i)     Any Person (including a “group” as defined in Section 14(d) of the
Exchange Act) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing more than 25% of the combined voting
power of the Company’s then-outstanding securities; provided, however, that no
Change of Control shall be deemed to have occurred as a result of a change in
ownership percentage resulting solely from an acquisition of securities by the
Company;

 

(ii)     During any one year period, individuals who at the beginning of such
period constitute the Board and any new director whose election to the Board or
nomination for election by the Company’s shareholders was approved by a vote of
at least two−thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved cease for any reason to constitute at least
a majority of the Board;

 

(iii)     A reorganization, merger or consolidation of the Company in each case,
unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the Beneficial Owners
of the Company’s outstanding voting securities immediately prior thereto
beneficially own, directly or indirectly, more than 75% of the combined voting
power of the Company’s then-outstanding voting securities entitled to vote
generally in the election of directors resulting from such reorganization,
merger or consolidation in substantially the same proportions as their ownership
immediately prior to such reorganization, merger or consolidation of the
outstanding voting securities of the Company; or

 

(iv)     A liquidation, dissolution, sale or other disposition of all or
substantially all of the assets of the Company (other than in a transaction in
which all or substantially all of the individuals and entities who were the
Beneficial Owners of the Company’s outstanding voting securities immediately
prior to such sale or other disposition beneficially own, directly or
indirectly, substantially all of the combined voting power of the Company’s
then-outstanding voting securities entitled to vote generally in the election of
directors of the acquiror of such assets (either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such sale or other disposition).

 

Notwithstanding anything herein to the contrary, and only to the extent that an
Award is subject to Code Section 409A and payment of the Award pursuant to the
application of the definition of “Change in Control” above would cause such
Award not to otherwise comply with Code Section 409A, payment of an Award may
occur upon a Change in Control only to the extent that the event constitutes a
“change in the ownership or effective control” of the Company or a “change in
the ownership of a substantial portion of the assets” of the Company under Code
Section 409A.

 

(h)     “Code” means the Internal Revenue Code of 1986, as amended, and any
rules, regulations or guidance promulgated thereunder. Any reference to the Code
or a section thereof shall also refer to any successor Code or section.

 

(i)     “Committee” means a committee appointed by the Board consisting of at
least three members of the Board, all meeting the definitions of “outside
director” set forth in Code Section 162(m), “independent director” set forth in
The Nasdaq Stock Market rules, and “non-employee director” set forth in Rule
16b-3 of the Exchange Act, or any successor definitions adopted for a similar
purpose by the Internal Revenue Service, any national securities exchange on
which the Common Shares are listed or the Securities and Exchange Commission.

 

 
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(j)     “Common Share” or “Common Shares” means one or more of the common
shares, without par value, of the Company.

 

(k)     “Company” means LSI Industries Inc., a corporation organized under the
laws of the State of Ohio, its subsidiaries, divisions and affiliated
businesses.

 

(l)     “Date of Grant” means the date on which the Committee authorizes the
grant of an Award or such later date as may be specified by the Committee in
such authorization.

 

(m)     “Deferred Share” means a right to receive Common Shares awarded under
Section 6(f) upon the terms and conditions set forth in the respective Award
Agreement granting the Award.

 

(n)     “Deferred Share Unit” means a right to receive Common Shares awarded
under Section 6(g) upon the terms and conditions set forth in the respective
Award Agreement granting the Award.

 

(o)     “Disability” means a Participant’s physical or mental incapacity
resulting from personal injury, disease, illness or other condition which (i)
prevents him or her from performing his or her duties for the Company, as
determined by the Committee or its designee, and (ii) results in his or her
termination of employment or service with the Company. The Committee may
substitute a different definition for the term “Disability” in its discretion as
it deems appropriate.

 

(p)     “Effective Date” has the meaning set forth in Section 13(a).

 

(q)     “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and any rules, regulations, schedules or guidance promulgated thereunder. Any
reference to the Exchange Act or a section thereof shall also refer to any
successor Exchange Act or section.

 

(r)      “Exercise Price” means the purchase price of a Common Share covered by
a Stock Option or SAR, as applicable.

 

(s)     “Fair Market Value” on any date means the closing price of the Common
Shares as reported on The Nasdaq Stock Market or, if applicable, any other
national securities exchange on which the Common Shares are principally traded,
or, if there were no sales of Common Shares on such date, then on the
immediately preceding date on which there were any sales of Common Shares. If
the Common Shares cease to be traded on a national securities exchange, the Fair
Market Value shall be determined pursuant to a reasonable valuation method
prescribed by the Committee. In the case of an ISO (or Tandem SAR), Fair Market
Value shall be determined by the Committee in accordance with Code Section 422.
For Awards intended to be exempt from Code Section 409A, Fair Market Value shall
be determined by the Committee in accordance with Code Section 409A.

 

 
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(t)     “Full-Value Award” means Restricted Shares, Restricted Share Units,
unrestricted Common Shares, Deferred Shares or Deferred Share Units.

 

(u)     “Fungible Share Ratio” has the meaning set forth in Section 5(b)(i).

 

(v)     “ISO” means an Incentive Stock Option satisfying the requirements of
Code Section 422 and designated as an ISO by the Committee.

 

(w)     “Minimum Vesting Requirement” has the meaning set forth in Section
6(a)(i)

 

(x)     “Non-Employee Director” means a member of the Board who is not an
employee of the Company.

 

(y)     “NQSO” means a non-qualified Stock Option that does not satisfy the
requirements of Code Section 422 or that is not designated as an ISO by the
Committee.

 

(z)     “Participant” means a person eligible to receive an Award under the
Plan, as set forth in Section 4, and designated by the Committee to receive an
Award subject to the conditions set forth in the Plan and any Award Agreement.

 

(aa)     “Performance-Based Exception” means the performance-based exception to
the deductibility limitations of Code Section 162(m), as set forth in Code
Section 162(m)(4)(C) and applicable Treasury Department regulations thereunder.

 

(bb)     “Performance Goals” means the goals established by the Committee, as
described in Section 6(d)(ii).

 

(cc)     “Performance Measures” means the criteria set out in Section 6(d)(iii)
that may be used by the Committee as the basis for a Performance Goal.

 

(dd)     “Performance Period” means the period established by the Committee
during which the achievement of Performance Goals is assessed in order to
determine whether and to what extent an Award that is conditioned on attaining
Performance Goals has been earned.

 

(ee)     “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, except that such term shall not include (i) the Company or any of
its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities or (iv) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of Company securities.

 

(ff)     “Plan” means the LSI Industries Inc. Amended and Restated 2012 Stock
Incentive Plan as of November 17, 2016, as amended and restated from time to
time.

 

(gg)     “Prior Plan” means the LSI Industries Inc. 2003 Equity Compensation
Plan, as amended and restated.

 

 
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(hh)     “Restricted Shares” means Common Shares that are subject to
restrictions, as described in Section 6(c).

 

(ii)     “Restricted Share Units” means a right, as described in Section 6(c),
denominated in Common Shares to receive an amount, payable in either cash,
Common Shares, Restricted Shares, or a combination thereof, equal to the value
of a specified number of Common Shares.

 

(jj)     “Restriction Period” means, with respect to any Full-Value Award, the
period during which any risk of forfeiture or other restrictions set by the
Committee, including performance restrictions, remain in effect until such time
as they have lapsed under the terms and conditions of the Full-Value Award or as
otherwise determined by the Committee, including the Performance Period for
Full-Value Awards intended to qualify for the Performance-Based Exception.

 

(kk)     “Retirement” means retirement with the Company at or after age 65 or at
or after the later of age 55 and ten years of service.

 

(ll)     “Securities Act” means the Securities Act of 1933, as amended, and any
rules, regulations, schedules or guidance promulgated thereunder. Any reference
to the Securities Act or a section thereof shall also refer to any successor
Securities Act or section.

 

(mm)     “Stock Appreciation Right” or “SAR” means the right, as described in
Section 6(b), to receive a payment equal to the excess of the Fair Market Value
of a Common Share on the date the SAR is exercised over the Exercise Price
established for that SAR at the time of grant, multiplied by the number of
Common Shares with respect to which the SAR is exercised.

 

(nn)     “Stock Option” means the right, as described in Section 6(a), to
purchase Common Shares at a specified price for a specified period of time.
Stock Options include ISOs and NQSOs.

 

(oo)     “Tandem SAR” means a SAR granted in tandem with a Stock Option.

 

3.

Administration of the Plan

 

(a)         Authority of Committee. The Plan shall be administered by the
Committee. Unless otherwise determined by the Board, the Compensation Committee
of the Board shall serve as the Committee. The Committee shall have all the
powers vested in it by the terms of the Plan, such powers to include the sole
and exclusive authority to (within the limitations described in the Plan):

 

(i)     select Participants to be granted Awards under the Plan and grant Awards
pursuant to the terms of the Plan;

 

(ii)     determine the type, size and terms of the Awards to be granted to each
Participant;

 

(iii)     determine the time when Awards are to be granted and any conditions
that must be satisfied before an Award is granted;

 

 
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(iv)     establish objectives and conditions for earning an Award;

 

(v)     determine all other terms and conditions, not inconsistent with the
terms of the Plan and any operative employment or other agreement, of any Award
granted under the Plan, and determine the appropriate Award Agreement evidencing
the Award;

 

(vi)     determine whether the terms, conditions, and objectives for earning an
Award have been met, including, without limitation, any such determination or
certification, as the case may be, required for compliance with Code Section
162(m);

 

(vii)     modify or waive the terms and conditions of Awards granted under the
Plan, not inconsistent with the terms of the Plan and any operative employment
or other agreement, accelerate the vesting, exercise or payment of an Award or
cancel or suspend an Award;

 

(viii)     determine whether the amount or payment of an Award should be reduced
or eliminated, and determine if, when and under what conditions payment of all
or any part of any Award may be deferred;

 

(ix)     determine the guidelines and/or procedures for the payment or exercise
of Awards;

 

(x)     determine whether any Awards granted to an employee should qualify for
the Performance-Based Exception;

 

(xi)     adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan and establish and administer any sub-plans that may
be governed by the Plan;

 

(xii)     construe, interpret, administer and implement the Plan, any Award
Agreements or related documents and correct any defect, supply an omission or
reconcile any inconsistency in or between the Plan, any Award Agreement or
related documents; and

 

(xiii)     make factual determinations with respect to the Plan and any Awards
and otherwise supervise the administration of the Plan.

 

(b)         Binding Authority. The Committee’s interpretations of the Plan, and
all actions taken and determinations made by the Committee pursuant to the
powers vested in it under the Plan, shall be conclusive and binding on all
parties, including the Company, its shareholders and all Participants.

 

(c)         Delegation of Authority. To the extent not prohibited by law or the
rules of the national securities exchange on which the Company’s Common Shares
are listed, the Committee may allocate its authority hereunder to one or more of
its members or delegate its authority hereunder to one or more Non-Employee
Directors, except that no such allocation or delegation shall be permitted with
respect to Awards intended to qualify for the Performance-Based Exception, and
may grant authority to employees of the Company to execute documents on behalf
of the Committee or to otherwise assist in the administration and operation of
the Plan. When the Committee delegates its authority hereunder to one or more
officers of the Company, it shall specify the total number of Awards that the
officer or officers may award and the terms on which any Awards may be issued,
offered or sold. In no event shall the Committee authorize any officer to
designate such officer as a recipient of any Awards.

 

 
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4.

Eligibility

 

Subject to the terms and conditions of the Plan, the Committee may select, from
all eligible persons, Participants to whom Awards shall be granted under the
Plan and shall determine the nature and amount of each Award. Eligible persons
include any of the following individuals: (i) any officer or key employee of the
Company, (ii) any consultant (as defined in the General Instructions to the Form
S-8 registration statement under the Securities Act) to the Company, and (iii)
any Non-Employee Director. All Awards shall be evidenced by an Award Agreement,
and Awards may be conditioned upon the Participant’s execution of an Award
Agreement.

 

5.

Common Shares Subject to the Plan

 

(a)        Authorized Number of Common Shares. Unless otherwise authorized by
the Company’s shareholders and subject to this Section 5 and Section 8, the
maximum aggregate number of Common Shares available for issuance under the Plan
is 4,400,000, plus (i) the number of Common Shares that, on the Effective Date,
are available to be granted under the Prior Plan but which are not then subject
to outstanding awards under the Prior Plan, and (ii) the number of Common Shares
subject to outstanding awards under the Prior Plan as of the Effective Date
which thereafter are forfeited, settled in cash or cancelled or expire. Upon the
Effective Date, the Prior Plan will terminate; provided that all outstanding
awards under the Prior Plan as of the Effective Date shall remain outstanding
and shall be administered and settled in accordance with the provisions of the
Prior Plan, as applicable. The maximum number of Common Shares available for
issuance with respect to ISOs is 4,400,000.

 

(b)        Share Counting. The following rules shall apply in determining the
number of Common Shares available for grant under the Plan:

 

(i)     The aggregate number of Common Shares available for issuance under the
Plan will be reduced by two and one-half (2.5) Common Shares for each Common
Share delivered in settlement of any Full-Value Award and one (1) Common Share
for each Common Share delivered in settlement of a Stock Option or Stock
Appreciation Right (the “Fungible Share Ratio”).

 

(ii)     To the extent that any Award is forfeited, cancelled, settled in cash,
returned to the Company for failure to satisfy vesting requirements or other
conditions of the Award or otherwise terminates without an issuance of Common
Shares being made, the maximum share limitation shall be credited pursuant to
the share counting provisions described above in Section 5(b)(i), and such
number of credited Common Shares may again be made subject to Awards under the
Plan.

 

(iii)     Any Common Shares tendered by a Participant or withheld as full or
partial payment of withholding or other taxes or as payment for the exercise or
conversion price of an Award or repurchased by the Company with Stock Option
proceeds shall not be added back to the number of Common Shares available for
issuance under the Plan. Upon exercise of a SAR, the number of Common Shares
subject to the Award that are being exercised shall be counted against the
maximum aggregate number of Common Shares that may be issued under the Plan on
the basis of one Common Share for every Common Share subject thereto, regardless
of the actual number of Common Shares used to settle the SAR upon exercise.

 

 
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(iv)     Any Common Shares underlying Awards granted through the assumption of,
or in substitution for, outstanding awards previously granted to individuals who
become employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction shall not, unless required by law or
regulation, count against the reserve of available Common Shares under the Plan.

 

(c)         Award Limitations. Subject to the adjustment provisions of Section
8:

 

(i)     The maximum aggregate number of Common Shares that may be subject to
Stock Options or SARs granted in any calendar year to any one Participant shall
be 250,000 Common Shares.

 

(ii)     The maximum aggregate number of Common Shares that may be subject to
Full-Value Awards granted in any calendar year to any one Participant shall be
50,000 Common Shares.

 

(d)         Shares to be Delivered. Common Shares to be delivered by the Company
under the Plan may consist in whole or in part of authorized but unissued shares
or treasury shares.

 

6.

Awards to Participants

 

(a)         Stock Options.

 

(i)       Grants. Subject to the terms and conditions of the Plan, Stock Options
may be granted to Participants, in such number and upon such terms and
conditions as the Committee determines, and may consist of ISOs or NQSOs. Stock
options may be granted alone or with Tandem SARs. With respect to Stock Options
granted with Tandem SARs, the exercise of either such Stock Options or Tandem
SARs will result in the simultaneous cancellation of the same number of Stock
Options or Tandem SARs, as the case may be.

 

(ii)      Minimum Vesting Requirement. Subject to the terms and conditions in
this Plan, the Committee shall not grant Stock Options that are exercisable
earlier than one year from the Date of Grant (the “Minimum Vesting
Requirement”); provided, however, the Committee shall have discretion to award
not more than five percent (5%) of the Common Shares that may be granted
pursuant to this Plan with vesting terms that do not satisfy this Minimum
Vesting Requirement.

 

(iii)     Exercise Price. The Exercise Price shall be equal to or, at the
Committee’s discretion, greater than the Fair Market Value on the date the Stock
Option is granted, unless the Stock Option was granted through the assumption
of, or in substitution for, outstanding awards previously granted to individuals
who became employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction, in which case the assumption or
substitution shall be accomplished in a manner that permits the Stock Option to
be exempt from Code Section 409A.

 

 
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(iv)     Term. The term of Stock Options shall be determined by the Committee in
its sole discretion, but in no event shall the term exceed ten years from the
Date of Grant.

 

(v)     ISO Limits. ISOs may be granted only to Participants who are employees
of the Company (or of any parent or subsidiary corporation within the meaning of
Code Section 424) on the Date of Grant, and may only be granted to an employee
who, at the time the Stock Option is granted, does not own more than ten percent
of the total combined voting power of all classes of stock of the Company (or of
any parent or subsidiary corporation within the meaning of Code Section 424),
unless (A) the Exercise Price is at least 110% percent of the Fair Market Value
on the Date of Grant, and (B) the ISO is not exercisable after five years from
the Date of Grant. The aggregate Fair Market Value of all Common Shares,
determined at the time the ISOs are granted, with respect to which ISOs are
exercisable by a Participant for the first time during any calendar year (under
all plans of the Company) shall not exceed $100,000 or such other amount as may
subsequently be specified by the Code. If such Fair Market Value exceeds the
$100,000 limit, the ISOs exceeding the limit shall be treated as NQSOs, taking
the Stock Options in the order each was granted. The terms of all ISOs shall be
consistent with and contain or be deemed to contain all provisions required to
qualify as an “incentive stock option” under Code Section 422.

 

(vi)     No Repricing. Subject to the adjustment provisions of Section 8,
without the approval of the Company’s shareholders, (A) the Exercise Price for
any outstanding Stock Option may not be decreased after the Date of Grant, (B)
no outstanding Stock Option may be surrendered to the Company as consideration
for the grant of a new Stock Option with a lower Exercise Price, and (C) no
other modifications to any outstanding Stock Option may be made that would be
treated as a “repricing” under the then applicable rules, regulations or listing
requirements adopted by the national securities exchange on which the Common
Shares are listed. Neither the Board nor the Committee shall offer a cash
buy-out of “underwater” Stock Options, and such buyouts of “underwater” Stock
Options shall be prohibited.

 

(vii)    Form of Payment. Vested Stock Options may be exercised in whole or in
part, and the Exercise Price shall be paid to the Company at the time of
exercise, subject to any applicable rules or regulations adopted by the
Committee:

 

 

(A)

to the extent permitted by applicable law, pursuant to cashless exercise
procedures that are approved by the Committee;

 

 

(B)

through the tender of unrestricted Common Shares owned by the Participant (or by
delivering a certification or attestation of ownership of such Common Shares)
valued at their Fair Market Value on the date of exercise;

 

 

(C)

in cash or its equivalent; or

 

 

(D)

by any combination of (A), (B), and (C) above.

 

 
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(viii)    No Dividends or Shareholder Rights. No dividends or dividend
equivalents may be paid on Stock Options. Except as otherwise provided herein, a
Participant shall have no rights as a holder of Common Shares covered by a Stock
Option unless and until such Common Shares have been registered to the
Participant as the owner.

 

(ix)      Other Restrictions. Stock Options may be granted subject to such terms
and conditions as the Committee determines, including, without limitation:
forfeiture conditions, transfer restrictions, restrictions based upon the
achievement of specific Performance Goals (Company-wide, divisional and/or
individual) which may be based on one or more Performance Measures, time-based
restrictions on vesting and/or restrictions under applicable federal or state
securities laws.

 

(b)         Stock Appreciation Rights.

 

(i)      Grants. Subject to the terms and provisions of the Plan, SARs may be
granted to Participants, in such number and upon such terms and conditions as
the Committee determines, and may be granted alone or as Tandem SARs. With
respect to Tandem SARs, the exercise of either such Stock Options or SARs will
result in the simultaneous cancellation of the same number of Tandem SARs or
Stock Options, as the case may be.

 

(ii)      Minimum Vesting Requirement. Subject to the terms and conditions in
this Plan, the Committee shall not grant SARs that do not satisfy the Minimum
Vesting Requirement; provided, however, the Committee shall have discretion to
award not more than five percent (5%) of the Common Shares that may be granted
pursuant to this Plan with vesting terms that do not satisfy this Minimum
Vesting Requirement.

 

(iii)     Exercise Price. The Exercise Price shall be equal to or, at the
Committee’s discretion, greater than Fair Market Value on the date the SAR is
granted, unless the SAR was granted through the assumption of, or in
substitution for, outstanding awards previously granted to individuals who
became employees of the Company as a result of a merger, consolidation,
acquisition or other corporate transaction involving the Company, in which case
the assumption or substitution shall be accomplished in a manner that permits
the SAR to be exempt from Code Section 409A.

 

(iv)     Term. The term of a SAR shall be determined by the Committee in its
sole discretion, but in no event shall the term exceed ten years from the Date
of Grant; provided that, each SAR granted in tandem with a Stock Option shall
terminate upon the termination or exercise of the related Stock Option.

 

(v)      No Repricing. Subject to the adjustment provisions of Section 8,
without the approval of the Company’s shareholders, (A) the Exercise Price for
any outstanding SAR may not be decreased after the Date of Grant, (B) no
outstanding SAR may be surrendered to the Company as consideration for the grant
of a new SAR with a lower Exercise Price, and (C) no other modifications to any
outstanding SAR may be made that would be treated as a “repricing” under the
then applicable rules, regulations or listing requirements adopted by the
national securities exchange on which the Common Shares are listed. Neither the
Board nor the Committee shall offer a cash buy-out of “underwater” SARs, and
such buyouts of “underwater” SARs shall be prohibited.

 

 
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(vi)     Form of Payment. Vested SARs may be exercised in whole or in part, and
the Committee may authorize payment of a SAR in the form of cash, Common Shares
valued at its Fair Market Value on the date of the exercise or a combination
thereof, or by any other method as the Committee may determine.

 

(vii)     Tandem SARs. Tandem SARs may be exercised for all or part of the
Common Shares subject to the related Stock Option upon the surrender of the
right to exercise the equivalent portion of the related Stock Option. A Tandem
SAR may be exercised only with respect to the Common Shares for which its
related Stock Option is then exercisable. Notwithstanding any other provision of
the Plan to the contrary, with respect to a Tandem SAR granted in connection
with an ISO: (A) the Tandem SAR will expire no later than the expiration of the
underlying ISO; (B) the value of the payout with respect to the Tandem SAR may
be for no more than 100% of the excess of the Fair Market Value of the Common
Shares subject to the underlying ISO at the time the Tandem SAR is exercised
over the Exercise Price of the underlying ISO; and (C) the Tandem SAR may be
exercised only when the Fair Market Value of the Common Shares subject to the
ISO exceeds the Exercise Price of the ISO.

 

(viii)     No Dividends or Shareholder Rights. No dividends or dividend
equivalents may be paid on SARs. Except as otherwise provided herein, a
Participant shall have no rights as a holder of Common Shares covered by a SAR
unless and until such Common Shares have been registered to the Participant as
the owner.

 

(ix)      Other Restrictions. SARs may be granted subject to such terms and
conditions as the Committee determines, including, without limitation:
forfeiture conditions, transfer restrictions, restrictions based upon the
achievement of specific Performance Goals (Company-wide, divisional and/or
individual) which may be based on one or more Performance Measures, time-based
restrictions on vesting and/or restrictions under applicable federal or state
securities laws.

 

(c)          Restricted Shares and Restricted Share Units.

 

(i)       Grants. Subject to the terms and provisions of the Plan, Restricted
Shares and Restricted Share Units may be granted to Participants in such number
and upon such terms and conditions as the Committee determines. Restricted
Shares will be registered in the name of the Participant and deposited with the
Company or its agent in certificated or book-entry form.

 

(ii)      Minimum Vesting Requirement. Subject to the terms and conditions in
this Plan, the Committee shall not grant any Restricted Shares or Restricted
Share Units that become vested, unrestricted or payable, as the case may be,
earlier than as permitted by the Minimum Vesting Requirement; provided, however,
the Committee shall have discretion to award not more than five percent (5%) of
the Common Shares that may be granted pursuant to this Plan with vesting terms
that do not satisfy this Minimum Vesting Requirement.

 

 
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(iii)     Restrictions. Restricted Shares or Restricted Share Units may be
granted at no cost or at a purchase price determined by the Committee, which may
be less than the Fair Market Value, but subject to such terms and conditions as
the Committee determines, including, without limitation: forfeiture conditions,
transfer restrictions, restrictions based upon the achievement of specific
Performance Goals (Company-wide, divisional and/or individual) which may be
based on one or more Performance Measures, time-based restrictions on vesting
and/or restrictions under applicable federal or state securities laws. Subject
to Sections 9 and 10, for Awards to employees, no Restricted Shares or
Restricted Share Units conditioned upon the achievement of performance shall be
based on a Restriction Period of less than one year, and, except as may be
determined by the Committee with respect to not more than five percent (5%) of
the Common Shares that may be granted pursuant to this Plan, any Restriction
Period based solely on continued employment or service (time-based) shall be for
a minimum of three years, subject to (A) pro rata or graded vesting prior to the
expiration of such time-based Restriction Period, and (B) acceleration due to
the Participant’s death, Disability or Retirement, in each case as specified in
the applicable Award Agreement; provided that no portion of any Award of
Restricted Shares or Restricted Share Units may vest prior to the first
anniversary of the Date of Grant. To the extent the Restricted Shares or
Restricted Share Units are intended to qualify for the Performance-Based
Exception, except as may be determined by the Committee, the applicable
restrictions shall be based on the achievement of Performance Goals over a
Performance Period, as described in Section 6(d).

 

(iv)     Transfer Restrictions. During the Restriction Period, Restricted Shares
and Restricted Share Units may not be sold, assigned, transferred or otherwise
disposed of, or mortgaged, pledged or otherwise encumbered. In order to enforce
the limitations imposed upon the Restricted Shares, the Committee may (A) cause
a legend or legends to be placed on any certificates evidencing such Restricted
Shares, and/or (B) cause “stop transfer” instructions to be issued, as it deems
necessary or appropriate.

 

(v)     Dividends and Voting Rights. Unless otherwise determined by the
Committee, during the Restriction Period, Participants who hold Restricted
Shares shall have the right to receive dividends in cash or other property or
other distribution or rights in respect of the Restricted Shares and shall have
the right to vote the Restricted Shares as the record owners; provided that,
unless otherwise determined by the Committee, any dividends or other property
payable to a Participant during the Restriction Period shall be distributed to
the Participant only if and when the restrictions imposed on the applicable
Restricted Shares lapse. Unless otherwise determined by the Committee, during
the Restriction Period, Participants who hold Restricted Share Units shall be
credited with dividend equivalents in respect of such Restricted Share Units;
provided that, unless otherwise determined by the Committee, such dividend
equivalents shall be distributed (without interest) to the Participant only if
and when the restrictions imposed on the applicable Restricted Share Units
lapse. Participants shall have no other rights as a shareholder with respect to
Restricted Share Units unless otherwise determined by the Committee.
Notwithstanding the forgoing, no Restricted Shares or Restricted Share Units
intended to qualify for the Performance-Based Exception shall provide the
Participant with dividend or shareholder rights unless otherwise determined by
the Committee; provided, however, that if dividend rights are provided, any
dividends or other property otherwise payable to the Participant during the
Restriction Period with respect to such Restricted Shares or Restricted Share
Units shall accumulate and be payable only if and when the specific Performance
Goals are attained.

 

 
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(vi)     Payment of Restricted Share Units. Restricted Share Units that become
payable in accordance with their terms and conditions shall be settled in cash,
Common Shares, Restricted Shares, or a combination thereof, as determined by the
Committee.

 

(vii)     Ownership. Restricted Shares shall be registered in the name of the
Participant on the books and records of the Company or its designee (or by one
or more physical certificates if physical certificates are issued) subject to
the applicable restrictions imposed by the Plan. At the end of the Restriction
Period that applies to Restricted Shares, the number of shares to which the
Participant is entitled shall be delivered to the Participant free and clear of
the restrictions, either in certificated or book-entry form. No Common Shares
shall be registered in the name of the Participant with respect to Restricted
Share Units, and Participants shall have no ownership interest in the Common
Shares to which the Restricted Share Units relate, unless and until payment is
made in Common Shares.

 

(viii)     Forfeiture. If a Participant who holds Restricted Shares or
Restricted Share Units fails to satisfy the restrictions, terms or conditions
applicable to the Award, except as otherwise determined by the Committee, the
Participant shall forfeit the Restricted Shares or Restricted Share Units. The
Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse; however, to the extent the
Restricted Shares or Restricted Share Units are intended to qualify for the
Performance-Based Exception, the provisions of Section 6(d)(iv) will apply.

 

(d)          Performance-Based Exception.

 

(i)       Grants. Subject to the provisions of the Plan, Full-Value Awards
granted in a manner that is intended to qualify for the Performance-Based
Exception shall be conditioned upon the achievement of Performance Goals as the
Committee shall determine, in its sole discretion.

 

(ii)      Performance Goals. Performance Goals shall be based on one or more
Performance Measures, over a Performance Period, as to be determined by the
Committee. Performance Goals shall be objective (as that term is described in
Treasury Regulations under Code Section 162(m)) and shall be established in
writing by the Committee not later than 90 days after the beginning of the
Performance Period (but in no event after 25% of the Performance Period has
elapsed), and while the outcome as to the Performance Goal is substantially
uncertain.

 

(iii)     Performance Measures. The Performance Measure(s) may be described in
terms of objectives that are related to the individual Participant or objectives
that are Company-wide or related to a subsidiary, division, department, region,
function or business unit of the Company, and shall consist of one or more or
any combination of the following criteria: cash flow, profit, revenue, stock
price, market share, sales, net income, operating income, return ratios,
earnings per share, earnings (which may include an add back for taxes, interest,
and/or depreciation and amortization), operating earnings, profit margins,
earnings per Common Share, favorable comparison to established budgets, return
on shareholders’ equity, return on assets, attainment of strategic and
operational initiatives, comparisons with various stock market indices,
reduction in costs or a combination of such factors, personal performance
measures, working capital, total assets, net assets, return on sales, return on
invested capital, gross margin, costs, shareholders’ equity, shareholder return
and/or productivity or productivity improvement. The Performance Goals based on
these Performance Measures may be expressed in absolute terms or relative to the
performance of other entities.

 

 
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(iv)     Treatment of Awards. With respect to any Full-Value Award that is
intended to qualify for the Performance-Based Exception: (A) the Committee shall
interpret the Plan and this Section 6(d) in light of Code Section 162(m), (B)
the Committee shall not amend the Full-Value Award in any way that would
adversely affect the treatment of the Full-Value Award under Code Section
162(m), and (C) such Full-Value Award and any dividends or other property
otherwise payable with respect to such Full-Value Award shall not vest or be
paid until the Committee shall first have certified in writing that the
Performance Goals have been achieved.

 

(e)     Unrestricted Share Awards.

 

Subject to the terms and provisions of the Plan, the Committee may grant awards
of unrestricted Common Shares to Participants in such number and upon such terms
and conditions as the Committee determines in recognition of outstanding
achievements or contributions by such Participants or otherwise. Unrestricted
Common Shares issued on a bonus basis may be issued for no cash consideration.

 

(f)     Deferred Shares

 

The Committee is authorized to grant Deferred Shares to any Participant. The
number of Deferred Shares shall be determined by the Committee and may (but is
not required to) be based on one or more Performance Goals or Performance
Measures, including service to the Company, as the Committee determines, in each
case on a specified date or dates or over any period or periods determined by
the Committee. Common Shares underlying a Deferred Share award which may be
subject to a vesting schedule or other conditions or criteria set by the
Committee will be issued on the vesting date(s) or date(s) that those conditions
and criteria have been satisfied, as applicable. Unless otherwise provided by
the Committee, a holder of Deferred Shares shall have no rights as a Company
shareholder with respect to such Deferred Shares until such time as the Award
has vested and any other applicable conditions and/or criteria have been
satisfied and the Common Shares underlying the Award have been issued to the
such holder.

 

(g)     Deferred Share Units

 

The Committee is authorized to grant Deferred Share Units to any Participant.
The number of Deferred Share Units shall be determined by the Committee and may
(but is not required to) be based on one or more Performance Goals or
Performance Measures, including service to the Company, as the Committee
determines, in each case on a specified date or dates or over any period or
periods determined by the Committee. Each Deferred Share Unit shall entitle the
holder thereof to receive one Common Share on the date the Deferred Share Unit
becomes vested or upon a specified settlement date thereafter (which settlement
date may (but is not required to) be the date of the holder’s termination of
service). Common Shares underlying a Deferred Share Unit award which is subject
to a vesting schedule or other conditions or criteria set by the Committee will
not be issued until on or following the date that those conditions and criteria
have been satisfied. Unless otherwise provided by the Committee, a holder of
Deferred Share Units shall have no rights as a Company shareholder with respect
to such Deferred Share Units until such time as the Award has vested and any
other applicable conditions and/or criteria have been satisfied and the Common
Shares underlying the Award have been issued to such holder.

 

 
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7.

Deferred Payment

 

Subject to the terms of the Plan, the Committee may determine that all or a
portion of any Award to a Participant, whether it is to be paid in cash, Common
Shares or a combination thereof, shall be deferred or may, in its sole
discretion, approve deferral elections made by Participants. Deferrals shall be
for such periods and upon such terms as the Committee may determine in its sole
discretion, which terms shall comply with Code Section 409A.

 

8.

Dilution and Other Adjustments

 

In the event of any merger, reorganization, consolidation, liquidation,
recapitalization, reclassification, redesignation, stock dividend, other
distribution (whether in the form of cash, shares or otherwise), stock split,
reverse stock split, spin off, combination, repurchase or exchange of shares or
issuance of warrants or rights to purchase shares or other securities, or other
change in corporate structure affecting the Common Shares, the Committee shall
make such adjustments in the aggregate number and type of Common Shares which
may be delivered and the individual award maximums as set forth in Section 5,
the number and type of Common Shares subject to outstanding Awards and the
Exercise Price or other price of Common Shares subject to outstanding Awards
(provided the number of Common Shares subject to any Award shall always be a
whole number), as may be and to the extent determined to be appropriate and
equitable by the Committee to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan. Such adjustment
shall be conclusive and binding for all purposes of the Plan. Any such
adjustment of an ISO or SAR shall be made in compliance with Code Sections 422
and 424, and no such adjustment shall be made that would cause any Award which
is exempt from Code Section 409A or which is or becomes subject to Code Section
409A to fail to comply with the requirements of Code Section 409A.

 

9.

Change in Control

 

Notwithstanding any other provision of the Plan to the contrary, immediately
upon the occurrence of a Change in Control, the following provisions of this
Section 9 shall apply except to the extent an Award Agreement provides for a
different treatment (in which case the Award Agreement shall govern):

 

(a)     all outstanding Stock Options and SARs vest and become fully
exercisable; and

 

(b)     all Full-Value Awards become fully vested.

 

 
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10.

Termination

 

(a)       Termination by Death, Disability, or Retirement. If a Participant’s
employment by the Company terminates by reason of death, Disability or
Retirement, or in the case of an advisory relationship if such business
relationship terminates by reason of death or Disability, any Award held by such
Participant, unless otherwise determined by the Committee at grant or otherwise
interpreted pursuant to Section 12(l) hereof, shall be fully vested and may
thereafter be exercised by the Participant or by the Participant’s beneficiary
or legal representative, for a period of one year following termination of
employment, in the case of death or Disability, and 90 days in the case of
Retirement, or such longer period as the Committee may specify at or after grant
in all cases other than ISOs, or until the expiration of the stated term of such
Award, whichever period is shorter; provided that, for Full-Value Awards
intended to qualify for the Performance-Based Exception, no vesting may occur or
no distribution may be made in the case of Retirement prior to the attainment of
the Performance Goals.

 

(b)       Termination for Cause. If a Participant’s employment or service
terminates for Cause, (i) all Stock Options and SARs (or portions thereof) which
have not been exercised, whether vested or not, and (ii) all unvested Full-Value
Awards, shall immediately be forfeited upon termination, including such Awards
that are subject to performance conditions (or unearned portions thereof).

 

(c)       Other Terminations. If a Participant’s employment or service
terminates, voluntarily or involuntarily, for any reason other than death,
Disability, Retirement or Cause, (i) any vested portion of Stock Options or SARs
held by the Participant at the time of termination may be exercised for a period
of three months (or such other period as the Committee may specify at or after
the time of grant) from the termination date, or until the expiration of the
original term of the Stock Option or SAR, whichever period is shorter, (ii) no
unvested portion of any Stock Option or SAR shall become vested, including such
Awards that are subject to performance conditions (or unearned portions
thereof), and (iii) all unvested Full-Value Awards, including such Awards that
are subject to performance conditions (or unearned portions thereof), shall
immediately be forfeited upon termination.

 

(d)       Limitation for ISOs. No ISO may be exercised more than three months
following termination of employment for any reason (including Retirement) other
than death or Disability, nor more than one year following termination of
employment for the reason of death or Disability (as defined in Code Section
422), or such Award will no longer qualify as an ISO and shall thereafter be,
and receive the tax treatment applicable to, a NQSO. For this purpose, a
termination of employment is cessation of employment, under the rules applicable
to ISOs, such that no employment relationship exists between the Participant and
the Company.

 

(e)       Transfers and Leaves of Absence. The transfer of a Participant within
the Company shall not be deemed a termination of employment except as required
by Code Sections 422 and 409A, and other applicable laws. The following leaves
of absences are not deemed to be a termination of employment:

 

(i)       if approved in writing by the Company, for military service, sickness
or any other purpose approved by the Company, and the period of absence does not
exceed 90 days;

 

 
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(ii)      if in excess of 90 days, if approved in writing by the Company, but
only if the Participant’s right to reemployment is guaranteed by statute or
contract and provided that the Participant returns to work within 30 days after
the end of such absence; and

 

(iii)     subject to the restrictions of Code Section 409A and to the extent
that such discretion is permitted by law, if the Committee determines in its
discretion that the absence is not a termination of employment.

 

11.

Recoupment or Recovery Policy

 

Any Award shall be subject to forfeiture or repayment pursuant to the terms of
any applicable compensation recoupment or recovery policy adopted by the
Company, Committee or Board, as thereafter amended, including any policy adopted
to comply with the rules of any stock exchange on which the Common Shares are
traded or the Securities and Exchange Commission.

 

12.

Miscellaneous Provisions

 

(a)       Rights as a Shareholder. Except as otherwise provided herein, a
Participant shall have no rights as a shareholder with respect to Awards
hereunder, unless and until the Common Shares have been registered to the
Participant as the owner.

 

(b)       No Loans. No loans from the Company to Participants shall be permitted
in connection with the Plan.

 

(c)       Assignment or Transfer. Except as otherwise provided under the Plan,
no Award or any rights or interests therein shall be transferable other than by
will or the laws of descent and distribution. The Committee may, in its
discretion, provide that an Award (other than an ISO) is transferable without
the payment of any consideration to a Participant’s family member, subject to
such terms and conditions as the Committee may impose. For this purpose, “family
member” has the meaning given to such term in the General Instructions to the
Form S-8 registration statement under the Securities Act. All Awards shall be
exercisable, during the Participant’s lifetime, only by the Participant or a
person who is a permitted transferee pursuant to this Section 12(c). Once
awarded, the Common Shares (other than Restricted Shares) received by
Participants may be freely transferred, assigned, pledged or otherwise subjected
to lien, subject to the restrictions imposed by the Securities Act, Section 16
of the Exchange Act and the Company’s Insider Trading Policy, each as amended.

 

(d)       Withholding Taxes. The Company shall have the right to deduct from all
Awards paid in cash to a Participant any taxes required by law to be withheld
with respect to such Awards. All statutory minimum applicable withholding taxes
arising with respect to Awards paid in Common Shares to a Participant shall be
satisfied by the Company retaining Common Shares having a Fair Market Value on
the date the tax is to be determined that is equal to the amount of such
statutory minimum applicable withholding tax (rounded, if necessary, to the next
lowest whole number of Common Shares); provided, however, that, subject to any
restrictions or limitations that the Company deems appropriate, a Participant
may elect to satisfy such statutory minimum applicable withholding tax through
cash or cash proceeds.

 

 
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(e)     No Rights to Awards. Neither the Plan nor any action taken hereunder
shall be construed as giving any person any right to be retained in the employ
or service of the Company, and the Plan shall not interfere with or limit in any
way the right of the Company to terminate any person’s employment or service at
any time. Except as set forth herein, no employee or other person shall have any
claim or right to be granted an Award under the Plan. By accepting an Award, the
Participant acknowledges and agrees that (i) the Award will be exclusively
governed by the Plan, including the right of the Company to amend or cancel the
Plan at any time without the Company incurring liability to the Participant
(except, to the extent the terms of the Award so provide, for Awards already
granted under the Plan), (ii) the Participant is not entitled to future award
grants under the Plan or any other plan, and (iii) the value of any Awards
received shall be excluded from the calculation of termination or other
severance payments or benefits.

 

(f)     Beneficiary Designation. To the extent allowed by the Committee, each
Participant under the Plan may name any beneficiary or beneficiaries to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives all of such benefit. Unless the Committee determines otherwise,
each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee and shall be
effective only when received in writing by the Company during the Participant’s
lifetime. In the absence of any such designation, benefits remaining unpaid at
the Participant’s death shall be paid to the Participant’s estate.

 

(g)     Fractional Shares. Fractional Common Shares shall not be issued or
transferred under an Award, but the Committee may direct that cash be paid in
lieu of fractional shares or may round off fractional shares, in its discretion.

 

(h)     Unfunded Plan. The Plan shall be unfunded and any benefits under the
Plan shall represent an unsecured promise to pay by the Company. With respect to
any payments not yet made to a Participant pursuant to an Award, nothing
contained in the Plan or any Award Agreement shall give the Participant any
rights that are greater than those of a general unsecured creditor of the
Company.

 

(i)     Severability. If any provision of the Plan is deemed illegal or invalid,
the illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

 

(j)     Limitation of Liability. Members of the Board and the Committee and
officers and employees of the Company who are their designees acting under the
Plan shall be fully protected in relying in good faith upon the advice of
counsel and shall incur no liability except for gross or willful misconduct in
the performance of their duties hereunder.

 

(k)     Successors. All obligations of the Company with respect to Awards
granted under the Plan shall be binding on any successor to the Company, whether
as a result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.

 

 
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(l)     Code Section 409A Compliance. Each Award granted under the Plan is
intended to be either exempt from or in compliance with the requirements of Code
Section 409A and any regulations or guidance that may be adopted thereunder,
including any transition relief available under applicable guidance. The Plan
may be amended or interpreted by the Committee as it determines appropriate in
accordance with Code Section 409A in order for the Plan and Awards to comply
with Code Section 409A. If a Participant is a “specified employee” as defined in
Code Section 409A at the time of the Participant’s separation from service with
the Company, then solely to the extent necessary to avoid the imposition of any
additional tax under Code Section 409A, the commencement of any payments or
benefits under an Award shall be deferred until the date that is six months
following the Participant’s separation from service (or such other period as
required to comply with Code Section 409A). Notwithstanding the foregoing, the
Company does not guarantee that Awards under the Plan will comply with Code
Section 409A and the Committee is under no obligation to make any changes to
Awards to cause such compliance.

 

13.

Effective Date, Amendments, Governing Law and Plan Termination

 

(a)       Effective Date. The Effective Date of the Plan is the date on which
the Company’s shareholders approve the Plan at a duly held shareholder meeting.

 

(b)       Amendments.

 

(i)      Amendment of the Plan. The Committee or the Board may at any time
terminate or amend the Plan in whole or in part, but no such action shall
materially and adversely affect any rights or obligations with respect to any
Awards granted prior to the date of such termination or amendment without the
consent of the affected Participant, except to the extent that the Committee
reasonably determines that such termination or amendment is necessary or
appropriate to comply with applicable law or the rules and regulations of any
stock exchange on which the Common Shares are traded or to preserve any intended
favorable, or avoid any unintended unfavorable, tax effects for the Company,
Plan or Participants. Notwithstanding the foregoing, unless the Company’s
shareholders shall have first approved the amendment, no amendment of the Plan
shall be effective if the amendment would: (A) increase the maximum number of
Common Shares that may be delivered under the Plan or to any one individual
(except to the extent made pursuant to Section 8 hereof), (B) extend the maximum
period during which Awards may be granted under the Plan, (C) add to the types
of awards that can be made under the Plan, (D) modify the requirements as to
eligibility for participation in the Plan, (E) permit a repricing or decrease
the Exercise Price to less than the Fair Market Value on the Date of Grant of
any Stock Option or SAR, except for adjustments made pursuant to Section 8, (F)
materially increase benefits to Participants, or (G) otherwise require
shareholder approval pursuant to the Plan or applicable law or the rules of the
principal securities exchange on which Common Shares are traded.

 

(ii)     Amendment of Awards. The Committee may amend, prospectively or
retroactively, the terms of an Award, provided that no such amendment is
inconsistent with the terms of the Plan or would materially and adversely affect
the rights of any Participant without his or her written consent.

 

 
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(c)       Governing Law. To the extent not preempted by Federal law, the Plan
and all Award Agreements are construed in accordance with and governed by the
laws of the State of Ohio. The Plan is not intended to be governed by the
Employment Retirement Income Security Act of 1974, and shall be so construed and
administered.

 

(d)       Plan Termination. No Awards shall be made under the Plan after the
tenth anniversary of the Effective Date.

 

 

Approved by Board on September 16, 2016

 

To Be Considered by Shareholders on November 17, 2016

 

 

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