ex10_1.htm


    
      

    

    Exhibit
10.1

    
      


       

      EMPLOYMENT
AGREEMENT

       

       

      This
Employment Agreement (“Agreement”), dated as
of November 3, 2009 is by and between M. Philip Romney (“Executive”) and
SeaBright Insurance Company, an Illinois domiciled insurance company (“Employer”), a wholly
owned subsidiary of SeaBright Insurance Holdings, Inc., a Delaware corporation
(“Holdings”)
and is effective retroactively to October 31, 2004.

       

      WHEREAS,
Employer hired Executive on October 31, 2004, as Vice President- Finance of
Employer and Principal Accounting Officer of Employer;

       

      WHEREAS
Executive continues in his position of Vice President- Finance and Principal
Accounting Officer of Employer without change or interruption; and

       

      WHEREAS,
Executive has requested to add the terms and conditions of this Agreement to his
existing offer letter terms with Employer and Employer is willing to accede to
this request;

       

      NOW
THEREFORE, in consideration of the foregoing recitals, which shall constitute a
part of this Agreement, and of the mutual promises contained herein, and
intending to be legally bound, the parties agree as follows:

       

      1.     
       PERIOD OF
EMPLOYMENT.  Employer has employed Executive from October 31,
2004 to render services to Holdings as a Vice President-Finance and Principal
Accounting Officer of Employer for the period (the “Period of
Employment”) commencing on October 31, 2004, the effective date of this
Agreement, and ending on the date upon which the Period of Employment is
terminated in accordance with Section 4, to render
services to Employer in the position of Vice President-Finance and Principal
Accounting Officer, with the duties and responsibilities described in Section
2.

       

      2.        
    POSITION AND
RESPONSIBILITIES.

       

      (a)           Position.  Executive
accepts employment with Employer as Vice President- Finance and Principal
Accounting Officer and shall perform all services appropriate to those
positions, as well as such other services as may be assigned by
Employer.  Executive shall devote his best efforts and full-time
attention to the performance of his duties.  Executive shall be
subject to the direction of Employer, which shall retain full control of the
means and methods by which he performs the above services and of the place(s) at
which all services are rendered.  Executive shall be expected to
travel if necessary or advisable in order to meet the obligations of his
position.

       

      (b)           Other
Activity.  Except upon the prior written consent of Employer,
Executive (during the Period of Employment) shall not (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is competitive with Employer, creates a conflict of interest
with Employer, or otherwise interferes with the business of Employer or any
Affiliate (and shall immediately cease any such ongoing activity that becomes so
competitive, begins to create such a conflict or begins to interfere with the
business of Employer or any Affiliate).  An “Affiliate” shall mean
any person or entity that directly or indirectly controls, is controlled by, or
is under common control with Employer.

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      3.         
   COMPENSATION AND
BENEFITS.

       

      (a)           Salary.  In
consideration of the services to be rendered under this Agreement, Employer
shall pay Executive per year (“Base Salary”) of
$155,000 as of October 31, 2004, adjusted on April 1, 2005 to $159,643 for
the period April 1, 2005 through March 31, 2006; and $167,625 for the period
April 1, 2006 through March 31, 2007; and $187,625 for the period April 1, 2007
through March 31, 2008; and $196,000 for the period April 1, 2008 through March
31, 2009; and $200,900 per year thereafter, payable in regular installments in
accordance with Employer’s general payroll policies for salaried employees, in
effect from time to time.  All compensation and comparable payments to
be paid to Executive under this Agreement shall be less all applicable
withholdings required by law.  Executive’s Base Salary will be
reviewed for market and performance adjustments within ninety (90) days of the
beginning of each calendar year during the Period of Employment by Employer’s or
Holdings’ Board of Directors (the “Board”) and may be
adjusted after such review in the Board’s sole discretion.

       

      (b)           Bonus.  Executive
will be eligible to receive an annual bonus in a target amount equal to 40% of
his Base Salary for each calendar year during the Period of Employment based
upon achievement by Executive and achievement by Employer of performance
criteria and other goals established by the Board (after consultation with
Employer) on an annual basis prior to the commencement of each calendar year or
as soon as reasonably practicable thereafter.  The bonus payable in
respect of any given year during the Period of Employment shall be paid within
thirty (30) days following the delivery of Employer’s annual audited statutory
financial statements for such year.  Executive must be employed by
Employer on the last day of the calendar year for which any bonus relates in
order to receive any such bonus hereunder.  The target amount of
Executive’s bonus as set forth above will be reviewed for market and performance
adjustments within sixty-five (65) days of the beginning of each calendar year
during the Period of Employment by the Board and may be adjusted after such
review in the Board’s sole discretion.

       

      (c)           Benefits.  Executive
shall be entitled to vacation leave in accordance with Employer’s standard
policies for salaried employees, in effect from time to time.  As
Executive becomes eligible, he shall have the right to participate in and to
receive benefits from all present and future benefit plans specified in
Employer’s policies and generally made available to salaried employees of
Employer from time to time.  The amount and extent of benefits to
which Executive is entitled shall be governed by the specific benefit plan, as
amended.  Executive also shall be entitled to any benefits or
compensation tied to termination as described in Section
4.  Employer reserves the ability, in its sole discretion, to
adjust benefits provided to Executive in connection with the adjustment of
benefits to salaried employees.  No statement concerning benefits or
compensation to which Executive is entitled shall alter in any way the term of
this Agreement, any renewal thereof, or its termination.

       

      (d)           Expenses.  Employer
shall reimburse Executive for reasonable travel and other business expenses
incurred by Executive in the performance of his duties, subject to reasonable
documentation thereof and in accordance with Employer’s policies in effect from
time to time.

       

      (e)           Stock Options and Restricted
Stock.  Employer granted Executive an option to acquire 7,650,
1,875, 4,000, 4,750, and 3,670 shares of Common Stock, effective January 20,
2006, March 17, 2006, March 28, 2007, March 27, 2008, and March 27, 2009
respectively, on the terms and conditions pursuant to a Stock Option Grant
Agreement, and pursuant to the Company’s 2005 Long-Term Equity Incentive Plan
(the “2005
Plan”) which, as amended and restated as of April 3, 2007, is attached to
and incorporated into this Agreement as Exhibit B.  Employer
also granted Executive 5,625 restricted shares of common stock effective March
17, 2006, 12,000 restricted shares of common stock effective March 27, 2007,
14,250 restricted shares of common stock effective March 27, 2008 and 11,011
restricted shares of common stock effective March 27, 2009, on the terms and
conditions set forth in Exhibit
B.  In connection with such grants, Executive executed and
delivered to Holdings counterparts to the Stock Option Grant Agreement, in form
and substance as set forth in Exhibit B attached
hereto, entered into by and among Holdings and all of its stock
optionees.

       

      
        
           


        

        
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      (f)           Withholding.  Any
and all payments made pursuant to this Agreement shall be subject to all
withholding required in accordance with applicable federal, state or local
law.

       

      4.         
   TERMINATION OF
EMPLOYMENT.

       

      (a)           By Employer Without
Cause.  At any time, Employer may terminate Executive without
Cause (as defined below), effective as of the date specified in a written notice
from Employer to Executive.  Employer may discipline or demote
Executive with or without Cause and with or without prior
notice.  Employer may discipline, demote, or dismiss Executive as
provided in this Section 4
notwithstanding anything to the contrary contained in or arising from any
statements, policies or practices of Employer relating to the employment,
discipline, or termination of its employees.  If Executive’s
employment with Employer is terminated by Employer without Cause, Executive
shall be entitled to continue to receive his Base Salary payable in regular
installments as special severance payments from the date of termination for a
period of twelve (12) months thereafter, or until Executive obtains other
employment (but with it being understood that Executive shall be under no duty
to seek alternative employment during the Severance Period), whichever first
occurs (the “Severance
Period”), if and only if Executive has executed and delivered to Employer
the General Release substantially in form and substance as set forth in Exhibit A attached
hereto and only so long as Executive has not revoked or breached the provisions
of the General Release or breached the provisions of this Agreement or any
Ancillary Agreement (as defined below) and does not apply for unemployment
compensation chargeable to Employer during the Severance Period, and Executive
shall not be entitled to any other salary, compensation or benefits after
termination of the Period of Employment, except as specifically provided for in
Employer’s employee benefit plans or as otherwise expressly required by
applicable law (such as COBRA).  Notwithstanding anything to the
contrary contained in this Section 4(a), in the event Executive breaches the
provisions of this Agreement or any Ancillary Agreement, the severance amounts
payable by Employer under this Section 4(a) shall not terminate unless and until
more than ten (10) days have elapsed from and after the date written notice of
such breach has been delivered to Executive without such breach having been
cured during such 10-day period.

       

      (b)           By Employer For
Cause.  At any time, and without prior notice (except as
otherwise provided in the definition of Cause set forth below), Employer may
terminate Executive for Cause.  Employer shall pay Executive all
compensation then due and owing; thereafter, all of Employer’s obligations under
this Agreement shall cease.  Termination shall be for “Cause” if Executive:
(i) is continuously inattentive to his lawful duties after at least one written
notice has been provided to Executive and Executive has failed to cure the same
within a 30-day period thereafter; (ii) reports to work under the influence of
alcohol or illegal drugs, or uses illegal drugs (whether or not at the
workplace) or engages in other conduct causing the Employer substantial public
disgrace or disrepute or economic harm; (iii) breaches his duty of loyalty to
Employer or engages in any acts of dishonesty or fraud with respect to Employer
or any of its business relations; (iv) is convicted of felony or any crime
involving dishonesty, breach of trust, or physical or emotional harm to any
person (or enters a plea of guilty or nolo contendere with respect
thereto); (v) breaches any material term of this Agreement, any Ancillary
Agreement or any other agreement between Executive and Employer or any of its
Affiliates and such breach (if capable of cure) is not cured within thirty (30)
days following written notice thereof from Employer or (vi) is terminated for
substandard performance.  For purposes of this Agreement, “substandard
performance” shall be defined as willful refusal to perform or substantial
disregard of duties properly assigned by Employer or its
Affiliates.  The Board shall give Executive written notice of the
Board’s concern over Executive’s performance, and Executive shall have thirty
(30) days to prepare for a meeting with the Board, at which time Executive may
present any information on market competitive conditions and any other factors
bearing on his and Employer’s performance.  After consideration of
these and such other factors as the Board may deem relevant, if a majority of
the Board determines in good faith that Employer’s future performance would be
best served by a change in management, the Board may terminate Executive’s
employment for “substandard performance” following the expiration of such 30-day
period.

       

      
        
           


        

        
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      (c)           Voluntary Termination by
Executive.  At any time, Executive may terminate his employment
for any reason, with or without cause, by providing Employer at least thirty
(30) days’ advance written notice.  Employer shall have the option, in
its complete discretion, to make Executive’s termination effective at any time
prior to the end of such notice period.  On the date of such
termination, Employer shall pay Executive all compensation then due and owing
through such date; and, thereafter, all of Employer’s obligations under this
Agreement shall cease.

       

      (d)           Termination Upon Death or
Permanent Disability.  Executive’s employment with Employer
shall also terminate upon Executive’s death or permanent mental or physical
disability or other incapacity (as determined by the Board in its good faith
judgment).  Upon any such termination, Employer shall pay Executive
(or Executive’s estate or legal representative or guardian) all compensation
then due and owing; thereafter, all of Employer’s obligations under this
Agreement shall cease.

       

      (e)           Termination of
Compensation.  Except as otherwise expressly provided herein,
all of Executive’s rights to salary, bonuses, employee benefits and other
compensation hereunder which would have accrued or become payable after the
termination or expiration of the Period of Employment shall cease upon such
termination or expiration, other than those expressly required under applicable
law (such as COBRA).

       

      (f)           Termination
Obligations.

       

      (i)  Executive
agrees that all property, including, without limitation, all equipment, tangible
Proprietary Information (as defined below), documents, books, records, reports,
notes, contracts, lists, computer disks (and other computer-generated files and
data), and copies thereof, created on any medium and furnished to, obtained by,
or prepared by Executive in the course of or incident to his employment, belongs
to Employer and shall be returned promptly to Employer upon termination of the
Period of Employment.

       

      (ii)  All
employee and other benefits to which Executive is otherwise entitled shall cease
upon Executive’s termination, unless explicitly continued either under this
Agreement or under any specific written policy or benefit plan of
Employer.

       

      (iii)  Upon
termination of the Period of Employment, Executive shall be deemed to have
resigned from all offices and directorships then held with Employer or any
Affiliate.

       

      
        
           


        

        
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      (iv)  The
representations and warranties contained in this Agreement and Executive’s
obligations under this Section 4(f) shall
survive the termination of the Period of Employment and the expiration of this
Agreement.

       

      (g)  For
sixty (60) days following any termination of the Period of Employment, Executive
shall cooperate in a reasonable manner with Employer in all matters relating to
the winding up of pending work on behalf of Employer and the orderly transfer of
work to other employees of Employer.  At all times following any
termination of the Period of Employment, Executive shall also cooperate in the
defense of any action brought by any third party against Employer that relates
in any way to Executive’s acts or omissions while employed by Employer; provided that
Employer shall reimburse Executive for his reasonable out-of-pocket expenses
after being provided with reasonable documentation of such
expenses.

       

      5.      
      NONSOLICITATION.  Executive
acknowledges that he is familiar with the trade secrets of Employer and its
Affiliates and with other proprietary information concerning Employer and its
Affiliates, including, without limitation, all (a) inventions, technology and
research and development of Employer and its Affiliates, (b) customers and
suppliers and customer and supplier lists of Employer and its Affiliates, (c)
products and services of Employer and its Affiliates (including, without
limitation, those under development) and related costs and pricing structures,
(d) accounting and business methods and practices of Employer and its Affiliates
and (e) similar and related proprietary information of Employer and its
Affiliates.  During the period commencing with the Effective Date and
ending twelve (12) months after the date of termination of Executive’s
employment with Employer (the “Restriction Period”),
Executive shall not (i) induce or attempt to induce any employee of Employer or
any of its Affiliates to leave the employ of Employer or such Affiliate, or in
any way interfere with the relationship between Employer or any of its
Affiliates and any employee thereof, (ii) hire directly or through another
entity any person who was an employee of Employer or any of its Affiliates at
any time during the Restriction Period, or (iii) call on, solicit or service any
customer, supplier, licensee, licensor or other business relation of Employer or
any of its Affiliates in order to induce or attempt to induce such person or
entity to cease doing business with Employer or any such Affiliate or in any way
materially interfere with the relationship between any such customer, supplier,
licensee, licensor or business relation and Employer or any of its Affiliates
(including, without limitation, making any negative statements or communications
concerning Employer or any of its Affiliates).

       

      6.         
   NONDISCLOSURE AND NONUSE OF
PROPRIETARY INFORMATION.

       

      (a)  Executive
shall not disclose or use at any time, either during his employment with
Employer or thereafter, any Proprietary Information (as defined below) of which
Executive is or becomes aware, whether or not such information is developed by
him, except to the extent that such disclosure or use is directly related to and
required by Executive’s performance of duties assigned to Executive by
Employer.  Executive shall take all appropriate steps to safeguard
Proprietary Information and to protect it against disclosure, misuse, espionage,
loss and theft.  The foregoing shall not, however, prohibit disclosure
by Executive of Proprietary Information that has been published in a form
generally available to the public prior to the date Executive proposes to
disclose such information.  Information shall not be deemed to have
been published merely because individual portions of the information have been
separately published, but only if all material features comprising such
information have been published in combination.

       

      
        
           


        

        
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      (b)  As
used in this Agreement, the term “Proprietary
Information” means all information of a confidential or proprietary
nature (whether or not specifically labeled or identified as “confidential”), in
any form or medium, that relates to or results from the business, historical or
projected financial results, products, services or research or development of
Employer or its Affiliates or their respective suppliers, distributors,
customers, independent contractors or other business
relations.  Proprietary Information includes, but is not limited to,
the following:  (i) internal business information (including, without
limitation, historical and projected financial information and budgets and
information relating to strategic and staffing plans and practices, business,
training, marketing, promotional and sales plans and practices, cost, rate and
pricing structures and accounting and business  methods); (ii)
identities of, individual requirements of, specific contractual arrangements
with, and information about, Employer’s and its Affiliates’ suppliers,
distributors, customers, independent contractors or other business relations and
their confidential information; (iii) trade secrets, technology, know-how,
compilations of data and analyses, techniques, systems, formulae, research,
records, reports, manuals, flow charts, documentation, models, data and data
bases relating thereto; (iv) computer software, including, without limitation,
operating systems, applications and program listings; (v) inventions,
innovations, ideas, devices, improvements, developments, methods, processes,
designs, analyses, drawings, photographs, reports and all similar or related
information (whether or not patentable and whether or not reduced to practice);
(vi) copyrightable works; (vii) intellectual property of every kind and
description; and (viii) all similar and related information in whatever
form.

       

      7.             EMPLOYER’S OWNERSHIP OF
INTELLECTUAL PROPERTY.

       

      (a)  In
the event that Executive during the term of his employment by Employer
generates, authors, conceives, develops, acquires, makes, reduces to practice or
contributes to any idea, discovery, trade secret, invention, innovation,
improvement, development, method of doing business, process, program, design,
analysis, drawing, report, data, software, firmware, logo, device, method,
product or any similar or related information (whether or not patentable or
reduced to practice or comprising Proprietary Information), any copyrightable
work (whether or not comprising Proprietary Information) or any other form of
Proprietary Information (collectively, “Intellectual
Property”), Executive acknowledges that such Intellectual Property is and
shall be the exclusive property of Employer.  Any copyrightable work
prepared in whole or in part by Executive shall be deemed “a work made for hire”
to the maximum extent permitted under Section 201(b) of the 1976 Copyright Act
as amended, and Employer shall own all of the rights comprised in the copyright
therein.  Without limiting the generality of the foregoing, Executive
hereby assigns his entire right, title and
interest in and to all Intellectual Property to Employer.  Executive
shall promptly and fully disclose all Intellectual Property to Employer and
shall cooperate with Employer to protect Employer’s interests in and rights to
such Intellectual Property (including, without limitation, providing reasonable
assistance in securing patent protection and copyright registrations and
executing all documents as reasonably requested by Employer, whether such
requests occur prior to or after termination of Executive’s employment with
Employer).

       

      (b)  Notwithstanding
the foregoing, however, Employer shall not own and Executive shall have no
obligation to assign to Employer any invention otherwise falling within the
definition of Intellectual Property for which no equipment, supplies, facility,
or trade secret information of Employer was used and that was developed entirely
on Executive’s own time, unless:  (i) such Intellectual Property
relates (A) to Employer’s business or (B) to their actual or demonstrably
anticipated research or development, or (ii) the Intellectual Property results
from any work performed by him for them under this
Agreement.  Executive has identified and described in detail on an
attachment hereto initialed by each of the undersigned party’s or their
authorized representatives, all Intellectual Property that is or was owned by
him or was written, discovered, made, conceived or first reduced to practice by
him alone or jointly with another person prior to his employment under this
Agreement.  If no such Intellectual Property is listed, Executive
represents to Employer that he does not now nor has he ever owned, nor has he
made, any such Intellectual Property.

       

      
        
           


        

        
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      8.      
      ARBITRATION.

       

      (a)  Arbitrable
Claims.  To the fullest extent permitted by law, all disputes
between Executive (and his attorneys, successors, and assigns) and Employer (and
its Affiliates, shareholders, directors, officers, employees, agents,
successors, attorneys, and assigns) of any kind whatsoever, including, without
limitation, all disputes relating in any manner to the employment or termination
of Executive, and all disputes arising under this Agreement (“Arbitrable Claims”)
shall be resolved by arbitration.  All persons and entities specified
in the preceding sentence (other than Employer and Executive) shall be
considered third-party beneficiaries of the rights and obligations created by
this Section on Arbitration.  Arbitrable Claims shall include, but are
not limited to, contract (express or implied) and tort claims of all kinds, as
well as all claims based on any federal, state, or local law, statute, or
regulation, excepting only claims under applicable workers’ compensation law and
unemployment insurance claims.  By way of example and not in
limitation of the foregoing, Arbitrable Claims shall include (to the fullest
extent permitted by law) any claims arising under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the Rev. Code of Washington Sections 49.45.010 et seq. and
49.60.010 et seq., as well as any claims asserting wrongful termination,
harassment, breach of contract, breach of the covenant of good faith and fair
dealing, negligent or intentional infliction of emotional distress, negligent or
intentional misrepresentation, negligent or intentional interference with
contract or prospective economic advantage, defamation, invasion of privacy, and
claims related to disability.

       

      (b)  Procedure.  Arbitration
of Arbitrable Claims shall be in accordance with the National Rules for the
Resolution of Employment Disputes of the “American Arbitration Association, as
amended (“AAA
Employment Rules”), as augmented in this
Agreement.  Arbitration shall be initiated as provided by the AAA
Employment Rules, although the written notice to the other party initiating
arbitration shall also include a statement of the claim(s) asserted and the
facts upon which the claim(s) are based.  Arbitration shall be final
and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims.  Either party may bring an action in court to
compel arbitration under this Agreement and to enforce an arbitration
award.  Otherwise, neither party shall initiate or prosecute any
lawsuit or administrative action in any way related to any Arbitrable
Claim.  Notwithstanding the foregoing, either party may, at its
option, seek injunctive relief with a federal court in the State of Washington
or state court in King County, Washington.  All arbitration hearings
under this Agreement shall be conducted in King County,
Washington.  The decision of the arbitrator shall be in writing and
shall include a statement of the essential conclusions and findings upon which
the decision is based.  THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY
HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT
LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR
ENFORECABILITY OF THE AGREEMENT TO ARBITRATE.

       

      (c)  Arbitrator Selection and
Authority.  All disputes involving Arbitrable Claims shall be
decided by a single arbitrator.  The arbitrator shall be selected by
mutual agreement of the parties within thirty (30) days of the effective date of
the notice initiating the arbitration.  If the parties cannot agree on
an arbitrator, then the complaining party shall notify the AAA and request
selection of an arbitrator in accordance with the AAA Employment
Rules.  The arbitrator shall have only such authority to award
equitable relief, damages, costs, and fees as a court would have for the
particular claim(s) asserted.  The fees of the arbitrator shall be
paid by the non-prevailing party.  If the allocation of responsibility
for payment of the arbitrator’s fees would render the obligation to arbitrate
unenforceable, the parties authorize the arbitrator to modify the allocation as
necessary to preserve enforceability.  The arbitrator shall have
exclusive authority to resolve all Arbitrable Claims, including, but not limited
to, whether any particular claim is arbitrable and whether all or any part of
this Agreement is void or unenforceable.

       

      
        
           


        

        
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      (d)           Confidentiality.  All
proceedings and all documents prepared in connection with any Arbitrable Claim
shall be confidential and, unless otherwise required by law, the subject matter
thereof shall not be disclosed to any person other than the parties to the
proceedings, their counsel, witnesses and experts, the arbitrator, and, if
involved, the court and court staff.  All documents filed with the
arbitrator or with a court shall be filed under seal.  The parties
shall stipulate to all arbitration and court orders necessary to effectuate
fully the provisions of this subsection concerning confidentiality.

       

      (e)           Continuing
Obligation.  The rights and obligations of Executive and
Employer set forth in this Section 8 shall
survive the termination of Executive’s employment and the expiration of this
Agreement.

       

      9.      
      EXECUTIVE’S
REPRESENTATIONS.  Executive hereby represents and warrants to
Employer that (i) the execution, delivery and performance of this Agreement by
Executive does not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by Employer, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.

       

      10.           NOTICES.  Any
notice or other communication under this Agreement must be in writing and shall
be effective upon delivery by hand, or three (3) business days after deposit in
the United States mail, postage prepaid, certified or registered, and addressed
to the Employer or to Executive at he corresponding address
below.  Executive shall be obligated to notify Employer in writing of
any change in his address.  Notice of change of address shall be
effective only when done in accordance with this Section.

       

      Employer’s Notice
Address:

       

      SeaBright
Insurance Company

      1501
4th
Avenue, Suite 2600

      Seattle,
WA  98101

      Attn:  Chief
Executive Officer

      Facsimile:  (206)
269-8901

      


      Executive’s Notice
Address:

       

      M. Philip
Romney

      13018
177th
Place NE

      Redmond,
WA 98052



      
        
           


        

        
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      11.           ACTION BY
EMPLOYER.  All actions required or permitted to be taken under
this Agreement by Employer, including, without limitation, exercise of
discretion, consents, waivers, and amendments to this Agreement, shall be made
and authorized only by the chief executive officer of Holdings or
Employer.

       

      12.           INTEGRATION.  This
Agreement is intended to be the final, complete, and exclusive statement of the
terms of Executive’s employment by Employer.  This Agreement
supersedes all other prior and contemporaneous agreements and statements,
whether written or oral, express or implied, pertaining in any manner to the
employment of Executive, and it may not be contradicted by evidence of any prior
or contemporaneous statements or agreements.  To the extent that the
practices, policies, or procedures of Employer, now or in the future, apply to
Executive and are consistent with the terms of this Agreement, the provisions of
this Agreement shall control.

       

      13.           AMENDMENTS;
WAIVERS.  This Agreement may not be amended except by an
instrument in writing, signed by each of the parties.  No failure to
exercise and no delay in exercising any right, remedy, or power under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power under this Agreement preclude any other
or further exercise thereof, or the exercise of any other right, remedy, or
power provided herein or by law or in equity.

       

      14.           ASSIGNMENT; SUCCESSORS AND
ASSIGNS.  Executive agrees that he will not assign, sell,
transfer, delegate, or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Agreement.  Any such purported assignment, transfer, or delegation
shall be null and void.  Nothing in this Agreement shall prevent the
consolidation of Employer with, or its merger into, any other entity, or the
sale by Employer of all or substantially all of its assets, or the assignment by
Employer of any rights or obligations under this Agreement.  Subject
to the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person or entity
other than those specifically enumerated in this Agreement.

       

      15.           SEVERABILITY.  If
any provision of this Agreement, or its application to any person, place, or
circumstance, is held by an arbitrator or a court of competent jurisdiction to
be invalid, unenforceable, or void, such provision shall be enforced to the
greatest extent permitted by law, and the remainder of this Agreement and such
provision as applied to other persons, places, and circumstances shall remain in
full force and effect.

       

      16.           ATTORNEYS’
FEES.  In any legal action, arbitration, or other proceeding
brought to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys’ fees and
costs.

       

      17.           GOVERNING
LAW.  This Agreement shall be governed by and construed in
accordance with the law of the State of Washington.

       

      18.           INTERPRETATION.  This
Agreement shall be construed as a whole, according to its fair meaning, and not
in favor of or against any party.  By way of example and not in
limitation, this Agreement shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Agreement.  Captions are used for reference purposes
only and should be ignored in the interpretation of this Agreement.

       

      
        
           


        

        
          9

          
            

          

        

        
           


        

      

      


      19.           EMPLOYEE
ACKNOWLEDGMENT.  Executive acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands this Agreement, that he is fully aware of its legal effect,
and that he has entered into it freely and voluntarily and based on his own
judgment and not on any representations or promises other than those contained
in this Agreement.

       

      20.           CODE SECTION 409A
COMPLIANCE.

      


      (a)  The
intent of the parties is that payments and benefits under this Agreement comply
with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”)
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be in compliance therewith.  To the extent that any
provision hereof is modified in order to comply with Code Section 409A, such
modification shall be made in good faith and shall, to the maximum extent
reasonably possible, maintain the original intent and economic benefit to
Executive and Employer of the applicable provision without violating the
provisions of Code Section 409A.  In no event whatsoever shall
Employer be liable for any additional tax, interest or penalty that may be
imposed on Executive by Code Section 409A or damages for failing to comply with
Code Section 409A.

      


      (b)  A
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amount or
benefit upon or following a termination of employment unless such termination is
also a “separation from service” within the meaning of Code Section 409A and,
for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like terms shall mean “separation
from service.”  Notwithstanding any other payment schedule provided
herein to the contrary, if Executive is deemed on the date of termination to be
a “specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then with regard to any payment or the provision of any benefit
that is considered “nonqualified deferred compensation” under Code Section 409A
payable on account of a “separation from service,” such payment or benefit shall
be made on the date which is the earlier of (i) the expiration of the six
(6)-month period measured from the date of Executive’s “separation from
service,” and (B) the date of Executive’s death, to the extent required under
Code Section 409A.  Upon the expiration of the foregoing delay period,
all payments and benefits delayed pursuant to this Section (whether they would
have otherwise been payable in a single sum or in installments in the absence of
such delay) shall be paid or reimbursed to Executive in a lump sum, and all
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein.

      


      (c)  To
the extent that severance payments or benefits pursuant to this Agreement are
conditioned upon the execution and delivery by Executive of a release of claims,
Executive shall forfeit all rights to such payments and benefits unless such
release is signed and delivered (and no longer subject to revocation, if
applicable) within sixty (60) days following the date of Executive’s termination
of employment.  If the foregoing release is executed and delivered and
no longer subject to revocation as provided in the preceding sentence, then the
following shall apply:


      
        
           


        

        
          10

          
            

          

        

        
           


        

      

      


      (i)  To
the extent that any such cash payment or continuing benefit to be provided is
not “nonqualified deferred compensation” for purposes of Code Section 409A, then
such payment or benefit shall commence upon the first scheduled payment date
immediately following the date that the release is executed, delivered and no
longer subject to revocation (the “Release Effective
Date”).  The first such cash payment shall include payment of
all amounts that otherwise would have been due prior to the Release Effective
Date under the terms of this Agreement applied as though such payments commenced
immediately upon Executive’s termination of employment, and any payment made
thereafter shall continue as provided herein.

      


      (ii)  To
the extent that any such cash payment or continuing benefit to be provided is
“nonqualified deferred compensation” for purposes of Code Section 409A, then
such payments or benefits shall be made or commence upon the sixtieth (60th) day
following Executive’s termination of employment.  The first such cash
payment shall include payment of all amounts that otherwise would have been due
prior thereto under the terms of this Agreement had such payments commenced
immediately upon Executive’s termination of employment, and any payment made
thereafter shall continue as provided herein.

      


      (d)  To
the extent that any expense reimbursement or in-kind benefit under this
Agreement constitutes “non-qualified deferred compensation” for purposes of Code
Section 409A, (i) such expense or other reimbursement hereunder shall be made on
or prior to the last day of the taxable year following the taxable year in which
such expenses were incurred by Executive, (ii) any right to reimbursement or
in-kind benefits will not be subject to liquidation or exchange for another
benefit, and (iii) no such reimbursement, expenses eligible for reimbursement,
or in-kind benefits provided in any taxable year shall in any way affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year.

      


      (e)  For
purposes of Code Section 409A, Executive’s right to receive installment payments
pursuant to this Agreement shall be treated as a right to receive a series of
separate and distinct payments.  Whenever a payment under this
Agreement specifies a payment period with reference to a number of days, the
actual date of payment within the specified period shall be within the sole
discretion of Employer.

      


      (f)  Notwithstanding
any other provision of this Agreement to the contrary, in no event shall any
payment under this Agreement  that constitutes “nonqualified deferred
compensation” for purposes of Code Section 409A be subject to offset by any
other amount unless otherwise permitted by Code Section 409A.

      


      (g)
Unless this Agreement provides a specified and objectively determinable payment
schedule to the contrary, to the extent that any payment of base salary or other
compensation is to be paid for a specified continuing period of time beyond the
date of Executive’s termination of employment in accordance with Employer’s
payroll practices (or other similar term), the payments of such base salary or
other compensation shall be made upon such schedule as in effect upon the date
of termination, but no less frequently than monthly.


      
        
           


        

        
          11

          
            

          

        

        
           


        

      

      


      (h) Any
annual bonus payable to Executive in accordance with the provisions of Section
3(b) hereof shall be paid in the calendar year following the calendar year to
which such bonus relates at the same time bonuses are paid to other senior
executive officers of Employer generally.”

       

      The
parties have duly executed this Agreement as of the date first written
above.

       

      
        	 
      	 
      	 
      
	 
      	
                M.
      PHILIP ROMNEY

              
	 
      	 
      	 
      
	 
      	
                SEABRIGHT
      INSURANCE COMPANY

              
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                John
      G. Pasqualetto

              
	 
      	 
      	
                Its:
      Chief Executive Officer

              


      

       

      
        
           


        

        
          12

          
            

          

        

        
           


          
            Exhibit
A

          

        

      

      


      GENERAL
RELEASE

       

      I,
__________________________, in consideration of and subject to the performance
by SeaBright Insurance Company, an Illinois domiciled company (together with its
subsidiaries, the “Company”), of its
obligations under the Employment Agreement, dated as of October  ____,
2009 (the “Agreement”), do
hereby release and forever discharge as of the date hereof the Company and its
affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its
affiliates and the Company’s direct or indirect owners (collectively, the “Released Parties”) to
the extent provided below.

       

      1.           I
understand that any payments or benefits paid or granted to me under Section
4(a) of the Agreement represent, in part, consideration for signing this General
Release and are not salary, wages or benefits to which I was already
entitled.  I understand and agree that I will not receive the payments
and benefits specified in Section 4(a) of the Agreement unless I execute this
General Release and do not revoke this General Release within the time period
permitted hereafter or breach this General Release.  Such payments and
benefits will not be considered compensation for purposes of any employee
benefit plan, program, policy or arrangement maintained or hereafter established
by the Company or its affiliates.  I also acknowledge and represent
that I have received all payments and benefits that I am entitled to receive (as
of the date hereof) by virtue of any employment by the Company.

       

      2.           Except
as provided in Paragraph 4 below and except for the provisions of my Employment
Agreement which expressly survive the termination of my employment with the
Company, I knowingly and voluntarily (for myself, my heirs, executors,
administrators and assigns) release and forever discharge the Company and the
other Released Parties from any and all claims, suits, controversies, actions,
causes of action, cross-claims, counterclaims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in
law and in equity, both past and present (through the date this General Release
becomes effective and enforceable) and whether known or unknown, suspected, or
claimed against the Company or any of the Released Parties which I, my spouse,
or any of my heirs, executors, administrators or assigns, may have, which arise
out of or are connected with my employment with, or my separation or termination
from, the Company (including, but not limited to, any allegation, claim or
violation, arising under:  Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment
Act of 1967, as amended (including, without limitation, the Older Workers
Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans
with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the
Worker Adjustment Retraining and Notification Act; the Employee Retirement
Income Security Act of 1974; any applicable Executive Order Programs; the Fair
Labor Standards Act; or their state and local counterparts; or under any other
federal, state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public policy,
contract or tort, or under common law; or arising under any policies, practices
or procedures of Employer; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, or defamation; or any claim for
costs, fees, or other expenses, including (without limitation) attorneys’ fees
incurred in these matters) (all of the foregoing collectively referred to herein
as the “Claims”).

       

      
        
           


        

        
          A-1

          
            

          

        

        
           


          
            Exhibit
A

          

        

      

      


      3.     
      I represent that I have made no assignment
or transfer of any right, claim, demand, cause of action, or other matter
covered by Paragraph 2 above.

       

      4.   
        I agree that this General
Release does not waive or release any rights or claims that I may have under the
Age Discrimination in Employment Act of 1967 which arise after the date I
execute this General Release.  I acknowledge and agree that my
separation from employment with the Company in compliance with the terms of the
Agreement shall not serve as the basis for any claim or action (including,
without limitation, any claim under the Age Discrimination in Employment Act of
1967).

       

      5.    
       In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every one
of the Claims hereinabove mentioned or implied.  I expressly consent
that this General Release shall be given full force and effect according to each
and all of its express terms and provisions, including, without limitation,
those relating to unknown and unsuspected Claims (notwithstanding any state
statute that expressly limits the effectiveness of a general release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied.  I acknowledge and
agree that this waiver is an essential and material term of this General Release
and that without such waiver the Company would not have agreed to the terms of
the Agreement.  I further agree that in the event I should bring a
Claim seeking damages against the Company, or in the event I should seek to
recover against the Company in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such
Claims.  I further agree that I am not aware of any pending charge or
complaint of the type described in Paragraph 2 as of the execution of this
General Release.

       

      6.    
       I represent that I am not aware of any
claim by me other than the claims that are released by this
Agreement.

       

      7.     
      I agree that neither this General Release,
nor the furnishing of the consideration for this General Release, shall be
deemed or construed at any time to be an admission by the Company, any Released
Party or myself of any improper or unlawful conduct.

       

      8.      
     I agree that I will forfeit all amounts payable by
the Company pursuant to the Agreement if I challenge the validity of this
General Release.  I also agree that if I violate this General Release
by suing the Company or the other Released Parties, I will pay all costs and
expenses of defending against the suit incurred by the Released Parties,
including (without limitation) reasonable attorneys’ fees, and return all
payments received by me pursuant to the Agreement.

       

      9.       
    I agree that this General Release is confidential and
agree not to disclose any information regarding the terms of this General
Release, except to my immediate family and any tax, legal or other counsel I
have consulted regarding the meaning or effect hereof or as required by law, and
I will instruct each of the foregoing not to disclose the same to
anyone.

       

      10.           Any
non-disclosure provision in this General Release does not prohibit or restrict
me (or my attorney) from responding to any inquiry about this General Release or
its underlying facts and circumstances by the Securities and Exchange Commission
(SEC), the National Association of Securities Dealers, Inc. (NASD), any other
self-regulatory organization or governmental entity.

       

      
        
           


        

        
          A-2

          
            

          

        

        
           


          
            Exhibit
A

          

        

      

      


      11.           I
agree to reasonably cooperate with the Company in any internal investigation or
administrative, regulatory, or judicial proceeding.  I understand and
agree that my cooperation may include, but not be limited to, making myself
available to the Company upon reasonable notice for interviews and factual
investigations; appearing at the Company’s request to give testimony without
requiring service of a subpoena or other legal process; volunteering to the
Company pertinent information; and turning over to the Company all relevant
documents which are or may come into my possession all at times and on schedules
that are reasonably consistent with my other permitted activities and
commitments.  I understand that in the event the Company asks for my
cooperation in accordance with this provision, the Company will reimburse me
solely for reasonable travel expenses, including, without limitation, lodging
and meals, upon my submission of receipts.

       

      12.           I
agree not to disparage the Company, its past and present investors, officers,
directors or employers or its affiliates and to keep all confidential and
proprietary information about the past or present business affairs of the
Company and its affiliates confidential unless a prior written release from the
Company is obtained.  I further agree that as of the date hereof, I
have returned to the Company any and all property, tangible or intangible,
relating to its business, which I possessed or had control over at any time
(including, but not limited to, company-provided credit cards, building or
office access cards, keys, computer equipment, manuals, files, documents,
records, software, customer database and other data) and that I shall not retain
any copies, compilations, extracts, excerpts, summaries or other notes of any
such manuals, files, documents, records, software, customer database or other
data.

       

      13.           Notwithstanding
anything in this General Release to the contrary, this General Release shall not
relinquish, diminish, or in any way affect any rights or claims (i) arising out
of any breach by the Company or by any Released Party of the Agreement after the
date hereof (ii) to indemnification for which I may be entitled to as a former
officer or director of the Company under their respective charter and/or bylaws
and/or other constituent documents so long as I am otherwise entitled to be
indemnified as authorized thereunder.

       

      14.           Whenever
possible, each provision of this General Release shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

       

      
        
           


        

        
          A-3

          
            

          

        

        
           


          
            Exhibit
A

          

        

      


      
        BY
SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

      

       

      
        	
                 
      

              	
                (i)

              	
                I
      HAVE READ IT CAREFULLY;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                I
      UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
      INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN
      EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF
      1964, AS AMENDED; THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH
      DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
      OF 1974, AS AMENDED;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                I
      VOLUNTARILY CONSENT TO EVERYTHING IN
IT;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                I
      HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
      HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN
      NOT TO DO SO OF MY OWN VOLITION;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                I
      HAVE HAD AT LEAST TWENTY-ONE (21) DAYS FROM THE DATE OF MY RECEIPT OF THIS
      RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON ________________, 20__, TO
      CONSIDER IT AND THE CHANGES MADE SINCE THE ________________, 20__ VERSION
      OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
      PERIOD;

              


      

       

      
        	
                 
      

              	
                (vi)

              	
                THE
      CHANGES TO THE AGREEMENT SINCE ________________, 20__ EITHER ARE NOT
      MATERIAL OR WERE MADE AT MY
REQUEST.

              


      

       

      
        	
                 
      

              	
                (vii)

              	
                I
      UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE
      TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR
      ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
  EXPIRED;

              


      

       

      
        	
                 
      

              	
                (viii)

              	
                I
      HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE
      ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT;
      AND

              


      

       

      
        	
                 
      

              	
                (ix)

              	
                I
      AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
      WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY
      AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY
  ME.

              


      

       

       

      
        	
                Signature:

              	 
      	 
      	
                Date:

              	 
      
	 
      	
                M.
      Philip Romney

              	 
      	 
      	 
      


      


      
        
           


        

        
          A-4

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      SEABRIGHT
INSURANCE HOLDINGS, INC.

      AMENDED AND RESTATED 2005
LONG-TERM EQUITY INCENTIVE PLAN

      


      1.           Purpose.

      


      This plan
shall be known as the SeaBright Insurance Holdings, Inc. Amended and Restated
2005 Long-Term Equity Incentive Plan (the "Plan").  The purpose of the
Plan shall be to promote the long-term growth and profitability of SeaBright
Insurance Holdings, Inc. (the "Company") and its Subsidiaries by (i) providing
certain directors, officers and employees of, and certain other individuals who
perform services for, the Company and its Subsidiaries with incentives to
maximize stockholder value and otherwise contribute to the success of the
Company and (ii) enabling the Company to attract, retain and reward the best
available persons for positions of responsibility.  Grants of
incentive or non-qualified stock options, restricted stock, restricted stock
units, deferred stock units, performance awards, or any combination of the
foregoing may be made under the Plan.

      


      2.           Definitions

      


      (a)           "Board
of Directors" and "Board" mean the board of directors of the
Company.

      


      (b)           "Cause"
means the occurrence of one or more of the following events:

      


      (i)           Conviction
of a felony or any crime or offense lesser than a felony involving the property
of the Company or a Subsidiary; or

      


      (ii)           Conduct
that has caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; or

      


      (iii)           Willful
refusal to perform or substantial disregard of duties properly assigned, as
determined by the Company or a Subsidiary, as the case may be; or

      


      (iv)           Breach
of duty of loyalty to the Company or a Subsidiary or other act of fraud or
dishonesty with respect to the Company or a Subsidiary.

      


      (c)           "Change
in Control" means the occurrence of one of the following events:

      


      (i)           if
any "person" or "group" as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act or any successors thereto, other than an Exempt Person, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act
or any successor thereto), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities; or


      
        
           


        

        
          B-5

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (ii)           during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board or
nomination for election by the Company's stockholders was approved by at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election was previously so approved, cease
for any reason to constitute a majority thereof; or

      


      (iii)           consummation
of a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation (A) which would result in all or a portion of the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) by which the
corporate existence of the Company is not affected and following which the
Company's chief executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or

      


      (iv)           consummation
of a plan of complete liquidation of the Company or a sale or disposition by the
Company of all or substantially all the Company's assets, other than a sale to
an Exempt Person.

      


      (d)           "Code"  means
the Internal Revenue Code of 1986, as amended.

      


      (e)           "Committee"
means the Compensation Committee of the Board, which shall consist solely of two
or more members of the Board.

      


      (f)           "Common
Stock" means the Common Stock, par value $0.01 per share, of the Company, and
any other shares into which such stock may be changed by reason of a
recapitalization, reorganization, merger, consolidation or any other change in
the corporate structure or capital stock of the Company.

      


      (g)           "Competition"
is deemed to occur if a person whose employment with the Company or its
Subsidiaries has terminated obtains a position as a full-time or part-time
employee of, as a member of the board of directors of, or as a consultant or
advisor with or to, or acquires an ownership interest in excess of 5% of, a
corporation, partnership, firm or other entity that engages in any of the
businesses of the Company or any Subsidiary with which the person was involved
in a management role at any time during his or her last five years of employment
with or other service for the Company or any Subsidiaries.

      


      (h)           "Disability"
means a disability that would entitle an eligible participant to payment of
monthly disability payments under any Company disability plan or as otherwise
determined by the Committee.

      


      (i)           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.


      
        
           


        

        
          B-6

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (j)           "Exempt
Person" means (i) Summit Master Company, LLC, Summit Partners, LLC, Summit
Partners, L.P. or any of their affiliates, (ii) any person, entity or group
under the control of any party included in clause (i), or (iii) any employee
benefit plan of the Company or a trustee or other administrator or fiduciary
holding securities under an employee benefit plan of the Company.

      


      (k)           "Family
Member" has the meaning given to such term in General Instructions A.1(a)(5) to
Form S-8 under the Securities Act of 1933, as amended, and any successor
thereto.

      


      (l)           "Fair
Market Value" of a share of Common Stock of the Company means, as of the date in
question, the officially-quoted closing selling price of the stock (or if no
selling price is quoted, the bid price) on the principal securities exchange on
which the Common Stock is then listed for trading (including for this purpose
the Nasdaq National Market) (the "Market") for the applicable trading day or, if
the Common Stock is not then listed or quoted in the Market, the Fair Market
Value shall be the fair value of the Common Stock determined in good faith by
the Board; provided, however, that when shares received upon exercise of an
option are immediately sold in the open market, the net sale price received may
be used to determine the Fair Market Value of any shares used to pay the
exercise price or applicable withholding taxes and to compute the withholding
taxes.

      


      (m)           "Incentive
Stock Option" means an option conforming to the requirements of Section 422 of
the Code and any successor thereto.

      


      (n)           "Involuntary
Termination" means (i) the participant's involuntary dismissal or discharge by
the Company or a Subsidiary or by its or their successor for reasons other than
Cause or (ii) such individual's voluntary resignation following (A) a change in
his or her position with the Company which materially reduces his or her level
of responsibility, (B) a reduction in his or her level of compensation (base
salary or any target incentive compensation) by more than ten percent or (C) a
relocation of such individual's place of employment by more than fifty (50)
miles, provided and only if such change, reduction or relocation is effected by
the Company or a Subsidiary or by its or their successor without the
participant's written consent.

      


      (o)           "Non-Employee
Director" has the meaning given to such term in Rule 16b-3 under the Exchange
Act and any successor thereto.

      


      (p)           "Non-qualified
Stock Option" means any stock option other than an Incentive Stock
Option.

      


      (q)           "Other
Company Securities" mean securities of the Company other than Common Stock,
which may include, without limitation, unbundled stock units or components
thereof, debentures, preferred stock, warrants and securities convertible into
or exchangeable for Common Stock or other property.


      
        
           


        

        
          B-7

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (r)           "Retirement"
means retirement as defined under any Company pension plan or retirement program
or termination of one's employment on retirement with the approval of the
Committee.

      


      (s)           "Subsidiary"
means a corporation or other entity of which outstanding shares or ownership
interests representing 50% or more of the combined voting power of such
corporation or other entity entitled to elect the management thereof, or such
lesser percentage as may be approved by the Committee, are owned directly or
indirectly by the Company.

      


      3.         
   Administration.  The
Plan shall be administered by the Committee; provided that the Board may, in its
discretion, at any time and from time to time, resolve to administer the Plan,
in which case the term "Committee" shall be deemed to mean the Board for all
purposes herein.  Subject to the provisions of the Plan, the Committee
shall be authorized to (i) select persons to participate in the Plan, (ii)
determine the form and substance of grants made under the Plan to each
participant, and the conditions and restrictions, if any, subject to which such
grants will be made, (iii) certify that the conditions and restrictions
applicable to any grant have been met, (iv) modify the terms of grants made
under the Plan, (v) interpret the Plan and grants made thereunder, (vi) make any
adjustments necessary or desirable in connection with grants made under the Plan
to eligible participants located outside the United States and (vii) adopt,
amend, or rescind such rules and regulations, and make such other
determinations, for carrying out the Plan as it may deem
appropriate.  Decisions of the Committee on all matters relating to
the Plan shall be in the Committee's sole discretion and shall be conclusive and
binding on all parties.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto and the rules and regulations of the principal
securities exchange on which the Common Stock is then listed for
trading.  No member of the Committee and no officer of the Company
shall be liable for any action taken or omitted to be taken by such member, by
any other member of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for such person's own
willful misconduct or as expressly provided by statute.

      


      The
expenses of the Plan shall be borne by the Company.  The Plan shall
not be required to establish any special or separate fund or make any other
segregation of assets to assume the payment of any award under the Plan, and
rights to the payment of such awards shall be no greater than the rights of the
Company's general creditors.

      


      4.       
     Shares Available for the
Plan.  Subject to adjustments as provided in Section 16 hereof,
an aggregate of one million forty seven thousand seven hundred fifty five
(1,047,755) shares of Common Stock may be issued pursuant to the Plan, plus an
automatic annual increase on the first day of each of the Company's fiscal years
beginning in 2006 and ending in 2015 equal to the lesser of (i) two percent (2%)
of the shares of Common Stock outstanding on the last day of the immediately
preceding fiscal year or (ii) such lesser number of shares of Common Stock as
determined by the Committee (collectively, the
"Shares").  Notwithstanding the foregoing, the maximum aggregate
number of Shares that may be issued pursuant to Incentive Stock Options under
the Plan shall not exceed one million forty seven thousand seven hundred fifty
five (1,047,755) (subject to adjustments as provided in Section 16 hereof), and
such number shall not be subject to annual adjustment as described in the
preceding sentence.


      
        
           


        

        
          B-8

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      Such
Shares may be in whole or in part authorized and unissued or held by the Company
as treasury shares.  If any grant under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited as to any Shares, or is
tendered or withheld as to any shares in payment of the exercise price of the
grant or the taxes payable with respect to the exercise, then such unpurchased,
forfeited, tendered or withheld Shares shall thereafter be available for further
grants under the Plan.  Without limiting the generality of the
foregoing provisions of this Section 4 or the generality of the provisions of
Sections 3, 6 or 18 or any other section of this Plan, the Committee may, at any
time or from time to time, and on such terms and conditions (that are consistent
with and not in contravention of the other provisions of this Plan) as the
Committee may, in its sole discretion, determine, enter into agreements (or take
other actions with respect to the options) for new options containing terms
(including exercise prices) more (or less) favorable than the outstanding
options.

      


      5.           Participation.  Participation
in the Plan shall be limited to those directors (including Non-Employee
Directors), officers (including non-employee officers) and employees of, and
other individuals performing services for, the Company and its Subsidiaries
selected by the Committee (including participants located outside the United
States).  Nothing in the Plan or in any grant thereunder shall confer
any right on a participant to continue in the service or employ as a director or
officer of or in the performance of services for the Company or a Subsidiary or
shall interfere in any way with the right of the Company or a Subsidiary to
terminate the employment or performance of services or to reduce the
compensation or responsibilities of a participant at any time.  By
accepting any award under the Plan, each participant and each person claiming
under or through him or her shall be conclusively deemed to have indicated his
or her acceptance and ratification of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.

      


      Incentive Stock Options or
Non-qualified Stock Options, restricted stock awards, restricted stock unit or
deferred stock unit awards, performance awards, or any combination thereof, may
be granted to such persons and for such number of Shares as the Committee shall
determine (such individuals to whom grants are made being sometimes herein
called "optionees" or "grantees," as the case may be).  Determinations
made by the Committee under the Plan need not be uniform and may be made
selectively among eligible individuals under the Plan, whether or not such
individuals are similarly situated.  A grant of any type made
hereunder in any one year to an eligible participant shall neither guarantee nor
preclude a further grant of that or any other type to such participant in that
year or subsequent years.

      


      6.           Incentive and Non-qualified
Options.  The Committee may from time to time grant to eligible
participants Incentive Stock Options, Non-qualified Stock Options, or any
combination thereof; provided that the Committee may grant Incentive Stock
Options only to eligible employees of the Company or its subsidiaries (as
defined for this purpose in Section 424(f) of the Code or any successor
thereto).  In any one calendar year, the Committee shall not grant to
any one participant options to purchase a number of shares of Common Stock in
excess of three hundred thousand (300,000) (as adjusted pursuant to Section 16
hereof).  The options granted shall take such form as the Committee
shall determine, subject to the following terms and conditions.


      
        
           


        

        
          B-9

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      It is the Company's intent that
Non-qualified Stock Options granted under the Plan not be classified as
Incentive Stock Options, that Incentive Stock Options be consistent with and
contain or be deemed to contain all provisions required under Section 422 of the
Code and any successor thereto, and that any ambiguities in construction be
interpreted in order to effectuate such intent.  If an Incentive Stock
Option granted under the Plan does not qualify as such for any reason, then to
the extent of such non-qualification, the stock option represented thereby shall
be regarded as a Non-qualified Stock Option duly granted under the Plan,
provided that such stock option otherwise meets the Plan's requirements for
Non-qualified Stock Options.

      


      (a)           Price.                      The
price per Share deliverable upon the exercise of each option ("exercise price")
may not be less than 100% of the Fair Market Value of a share of Common Stock as
of the date of grant of the option, and in the case of the grant of any
Incentive Stock Option to an employee who, at the time of the grant, owns more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, the exercise price may not be less than 110%
of the Fair Market Value of a share of Common Stock as of the date of grant of
the option, in each case unless otherwise permitted by Section 422 of the Code
or any successor thereto.

      


      (b)           Payment.  Options
may be exercised, in whole or in part, upon payment of the exercise price of the
Shares to be acquired. Unless otherwise determined by the Committee, payment
shall be made (i) in cash (including check, bank draft, money order or wire
transfer of immediately available funds), (ii) by delivery of outstanding shares
of Common Stock with a Fair Market Value on the date of exercise equal to the
aggregate exercise price payable with respect to the options' exercise, (iii) by
simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board or (iv) by any combination of the foregoing.

      


      In the
event a grantee elects to pay the exercise price payable with respect to an
option pursuant to clause (ii) above, (A) only a whole number of share(s) of
Common Stock (and not fractional shares of Common Stock) may be tendered in
payment, (B) such grantee must present evidence acceptable to the Company that
he or she has owned any such shares of Common Stock tendered in payment of the
exercise price (and that such tendered shares of Common Stock have not been
subject to any substantial risk of forfeiture) for at least six months prior to
the date of exercise, and (C) Common Stock must be delivered to the
Company.  Delivery for this purpose may, at the election of the
grantee, be made either by (1) physical delivery of the certificate(s) for all
such shares of Common Stock tendered in payment of the price, accompanied by
duly executed instruments of transfer in a form acceptable to the Company, or
(2) direction to the grantee's broker to transfer, by book entry, such shares of
Common Stock from a brokerage account of the grantee to a brokerage account
specified by the Company.  When payment of the exercise price is made
by delivery of Common Stock, the difference, if any, between the aggregate
exercise price payable with respect to the option being exercised and the Fair
Market Value of the shares of Common Stock tendered in payment (plus any
applicable taxes) shall be paid in cash.  No grantee may tender shares
of Common Stock having a Fair Market Value exceeding the aggregate exercise
price payable with respect to the option being exercised (plus any applicable
taxes).


      
        
           


        

        
          B-10

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (c)           Terms of
Options.  The term during which each option may be exercised
shall be determined by the Committee, but if required by the Code and except as
otherwise provided herein, no option shall be exercisable in whole or in part
more than ten years from the date it is granted, and no Incentive Stock Option
granted to an employee who at the time of the grant owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries shall be exercisable more than five years from the date it is
granted.  All rights to purchase Shares pursuant to an option shall,
unless sooner terminated, expire at the date designated by the
Committee.  The Committee shall determine the date on which each
option shall become exercisable and may provide that an option shall become
exercisable in installments.  The Shares constituting each installment
may be purchased in whole or in part at any time after such installment becomes
exercisable, subject to such minimum exercise requirements as may be designated
by the Committee.  Prior to the exercise of an option and delivery of
the Shares represented thereby, the optionee shall have no rights as a
stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).

      


      (d)           Limitations on
Grants.  If required by the Code, the aggregate Fair Market
Value (determined as of the grant date) of Shares for which an Incentive Stock
Option is exercisable for the first time during any calendar year under all
equity incentive plans of the Company and its Subsidiaries (as defined in
Section 422 of the Code or any successor thereto) may not exceed
$100,000.

      


      (e)           Termination;
Forfeiture.

      


      (i)           Death or
Disability.  If a participant ceases to be a director, officer
or employee of, or to perform other services for, the Company or any Subsidiary
due to death or Disability, all of the participant's options shall become fully
vested and exercisable and shall remain so for a period of 180 days from the
date of such death or Disability, but in no event after the expiration date of
the options; provided that the participant does not engage in Competition during
such 180-day period unless he or she received written consent to do so from the
Board or the Committee; provided further that the Board or Committee may extend
such exercise period (and related non-competition period) in its discretion, but
in no event may such extended exercise period extend beyond the expiration date
of the options.  Notwithstanding the foregoing, if the Disability
giving rise to the termination of employment is not within the meaning of
Section 22(e)(3) of the Code or any successor thereto, Incentive Stock Options
not exercised by such participant within 90 days after the date of termination
of employment will cease to qualify as Incentive Stock Options and will be
treated as Non-qualified Stock Options under the Plan if required to be so
treated under the Code.


      
        
           


        

        
          B-11

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (ii)           Retirement.  If
a participant ceases to be a director, officer or employee of, or to perform
other services for, the Company or any Subsidiary upon the occurrence of his or
her Retirement, (A) all of the participant's options that were exercisable on
the date of Retirement shall remain exercisable for, and shall otherwise
terminate at the end of, a period of 90 days after the date of Retirement, but
in no event after the expiration date of the options; provided that the
participant does not engage in Competition during such 90 day period unless he
or she receives written consent to do so from the Board or the Committee;
provided further that the Board or Committee may extend such exercise period
(and related non-competition period) in its discretion, but in no event may such
extended exercise period extend beyond the expiration date of the options, and
(B) all of the participant's options that were not exercisable on the date of
Retirement shall be forfeited immediately upon such Retirement; provided,
however, that such options may become fully vested and exercisable in the
discretion of the Committee.  Notwithstanding the foregoing, Incentive
Stock Options not exercised by such participant within 90 days after Retirement
will cease to qualify as Incentive Stock Options and will be treated as
Non-qualified Stock Options under the Plan if required to be so treated under
the Code.

      


      (iii)           Discharge for
Cause.  If a participant ceases to be a director, officer or
employee of , or to perform other services for, the Company or a Subsidiary due
to Cause, all of the participant's options shall expire and be forfeited
immediately upon such cessation, whether or not then exercisable.

      


      (iv)           Other
Termination.  Unless otherwise determined by the Committee, if a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company or a Subsidiary for any reason other than
death, Disability, Retirement or Cause, (A) all of the participant's options
that were exercisable on the date of such cessation shall remain exercisable
for, and shall otherwise terminate at the end of, a period of 30 days after the
date of such cessation, but in no event after the expiration date of the
options; provided that the participant does not engage in Competition during
such 30-day period unless he or she receives written consent to do so from the
Board or the Committee; provided further that the Board or Committee may extend
such exercise period (and related non-competition period) in its discretion, but
in no event may such extended exercise period extend beyond the expiration date
of the options, and (B) all of the participant's options that were not
exercisable on the date of such cessation shall be forfeited immediately upon
such cessation.

      


      (v)           Change in
Control.  If there is a Change in Control of the Company and a
participant is terminated from being a director, officer or employee of, or from
performing other services for the Company or a Subsidiary through an
"Involuntary Termination" effected within forty-eight (48) months following the
effective date of such Change in Control, all of participant's options shall
automatically accelerate and become fully vested and exercisable. Any option so
accelerated will remain exercisable until the earlier of (i) the expiration of
the option term or (ii) the end of a one-year period measured from the date of
the Involuntary Termination as defined herein. In addition, the Committee shall
have the authority to grant options that become fully vested and exercisable
automatically upon a Change in Control, whether or not the grantee is
subsequently terminated.


      
        
           


        

        
          B-12

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      (f)           Forfeiture.  If
a participant exercises any of his or her options and, within one year
thereafter, either (i) is terminated from the Company or a Subsidiary for any of
the reasons specified in the definition of "Cause" set forth in Section 2(b), or
(ii) engages in Competition without having received written consent to do so
from the Board or the Committee, then the participant may, in the discretion of
the Committee, be required to pay the Company the gain represented by the
difference between the aggregate selling price of the Shares acquired upon the
options' exercise (or, if the Shares were not then sold, their aggregate Fair
Market Value on the date of exercise) and the aggregate exercise price of the
options exercised (the "Option Gain"), without regard to any subsequent increase
or decrease in the Fair Market Value of the Common Stock.  In
addition, the Company may, in its discretion, deduct from any payment of any
kind (including salary or bonus) otherwise due to any such participant an amount
equal to the Option Gain.

      


      (g)           Grant of Reload
Options.  The Committee may provide (either at the time of
grant or exercise of an option), in its discretion, for the grant to a grantee
who exercises all or any portion of an option  ("Exercised Options")
and who pays all or part of such exercise price with shares of Common Stock, of
an additional option (a "Reload Option") for a number of shares of Common Stock
equal to the sum (the "Reload Number") of the number of shares of Common Stock
tendered for the Exercised Options plus, if so provided by the Committee, the
number of shares of Common Stock, if any, tendered by the grantee in connection
with the exercise of the Exercised Options to satisfy any federal, state or
local tax withholding requirements.  The terms of each Reload Option,
including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for each
Reload Option shall be the date of exercise of the Exercised Option to which it
relates and (ii) the exercise price for each Reload Option shall be the Fair
Market Value of the Common Stock on the grant date of the Reload
Option.

      


      7.          
  [Intentionally Omitted].

      


      8.         
   Restricted
Stock.  The Committee may at any time and from time to time
grant Shares of restricted stock under the Plan to such participants and in such
amounts as it determines.  Each grant of Shares of restricted stock
shall specify the applicable restrictions on such Shares, the duration of such
restrictions (which shall be at least six months except as otherwise determined
by the Committee or provided in the third paragraph of this Section 8), and the
time or times at which such restrictions shall lapse with respect to all or a
specified number of Shares that are part of the grant.

      


      The
participant will be required to pay the Company the aggregate par value of any
Shares of restricted stock (or such larger amount as the Board may determine to
constitute capital under Section 154 of the Delaware General Corporation Law, as
amended, or any successor thereto) within ten days of the date of grant, unless
such Shares of restricted stock are treasury shares.  Unless otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under the Plan will be held in escrow by the Company on the
participant's behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power
therefor.  Except as otherwise provided by the Committee, during such
period of restriction the participant shall have all of the rights of a holder
of Common Stock, including but not limited to the rights to receive dividends
and to vote, and any stock or other securities received as a distribution with
respect to such participant's restricted stock shall be subject to the same
restrictions as then in effect for the restricted stock. Except as otherwise
provided by the Committee, if a participant ceases to be a director, officer or
employee of, or to otherwise perform services for, the Company and its
Subsidiaries due to death, Disability or Retirement during any period of
restriction, all restrictions on Shares of restricted stock granted to such
participant shall lapse.  At such time as a participant ceases to be a
director, officer or employee of, or otherwise performing services for, the
Company or its Subsidiaries for any other reason, all Shares of restricted stock
granted to such participant on which the restrictions have not lapsed shall be
immediately forfeited to the Company.


      
        
           


        

        
          B-13

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      If there
is a Change in Control of the Company and a participant is terminated from being
a director, officer or employee of, or from performing other services for the
Company or a Subsidiary through an Involuntary Termination effected within
forty-eight (48) months following the effective date of such Change in Control,
all restrictions on Shares of restricted stock granted to such participant shall
automatically lapse.  In addition, the Committee shall have the
authority to grant shares of restricted stock with respect to which all
restrictions shall lapse automatically upon a Change in Control, whether or not
the grantee is subsequently terminated.

      


      9.           Restricted Stock Units;
Deferred Stock Units.  The Committee may at any time and from
time to time grant restricted stock units under the Plan to such participants
and in such amounts as it determines.  Each grant of restricted stock
units shall specify the applicable restrictions on such units, the duration of
such restrictions (which shall be at least six months except as otherwise
determined by the Committee or provided in the third paragraph of this Section
9), and the time or times at which such restrictions shall lapse with respect to
all or a specified number of units that are part of the grant.

      


      Each
restricted stock unit shall be equivalent in value to one share of Common Stock
and shall entitle the participant to receive from the Company at the end of the
vesting period (the "Vesting Period") applicable to such unit one Share, unless
the participant elects in a timely fashion to defer the receipt of such Shares,
as provided below.  Restricted stock units may be granted without
payment of cash or consideration to the Company; provided that participants
shall be required to pay to the Company the aggregate par value of the Shares
received from the Company within ten days of the issuance of such Shares unless
such Shares are treasury shares.

      


      Except as
otherwise provided by the Committee, during the restriction period the
participant shall not have any rights as a shareholder of the Company; provided
that the participant shall have the right to receive accumulated dividends or
distributions with respect to the corresponding number of shares of Common Stock
underlying each restricted stock unit at the end of the Vesting Period, unless
such restricted stock units are converted into deferred stock units, in which
case such accumulated dividends or distributions shall be paid by the Company to
the participant at such time as the deferred stock units are converted into
Shares.


      
        
           


        

        
          B-14

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      Except as
otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any
Subsidiary due to death, Disability or Retirement during any period of
restriction, all restrictions on restricted stock units granted to such
participant shall lapse.  At such time as a participant ceases to be a
director, officer or employee of, or otherwise performing services for, the
Company or any Subsidiary for any other reason, all restricted stock units
granted to such participant on which the restrictions have not lapsed shall be
immediately forfeited to the Company.

      


      If there
is a Change in Control of the Company and a participant is terminated from being
a director, officer or employee of, or from performing other services for the
Company or a Subsidiary through an Involuntary Termination effected within
forty-eight (48) months following the effective date of such Change in Control,
all restrictions on restricted stock units granted to such participant shall
automatically lapse.  In addition, the Committee shall have the
authority to grant restricted stock units with respect to which all restrictions
shall lapse automatically upon a Change in Control, whether or not the grantee
is subsequently terminated.

      


      A
participant may elect by written notice to the Company, which notice must be
made before the later of (i) the close of the tax year preceding the year in
which the restricted stock units are granted or (ii) 30 days of first becoming
eligible to participate in the Plan (or, if earlier, the last day of the tax
year in which the participant first becomes eligible to participate in the plan)
and on or prior to the date the restricted stock units are granted, to defer the
receipt of all or a portion of the Shares due with respect to the vesting of
such restricted stock units; provided that the Committee may impose such
additional restrictions with respect to the time at which a participant may
elect to defer receipt of Shares subject to the deferral election, and any other
terms with respect to a grant of restricted stock units to the extent the
Committee deems necessary to enable the participant to defer recognition of
income with respect to such units until the Shares underlying such units are
issued or distributed to the participant.  Upon such deferral, the
restricted stock units so deferred shall be converted into deferred stock
units.  Except as provided below, delivery of Shares with respect to
deferred stock units shall be made at the end of the deferral period set forth
in the participant's deferral election notice (the "Deferral
Period").  Deferral Periods shall be no less than one year after the
vesting date of the applicable restricted stock units.

      


      Except as
otherwise provided by the Committee, during such Deferral Period the participant
shall not have any rights as a shareholder of the Company; provided that, the
participant shall have the right to receive accumulated dividends or
distributions with respect to the corresponding number of shares of Common Stock
underlying each deferred stock unit at the end of the Deferral Period when such
deferred stock units are converted into Shares.

      


      Except as
otherwise provided by the Committee, if a Participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any
Subsidiary upon his or her death prior to the end of the Deferral Period, the
participant shall receive payment in Shares in respect of such participant's
deferred stock units which would have matured or been earned at the end of such
Deferral Period as if the applicable Deferral Period had ended as of the date of
such participant's death. Except as otherwise provided by the Committee, if a
participant ceases to be a director, officer or employee of, or to otherwise
perform services for, the Company or any Subsidiary upon becoming disabled (as
defined under Section 409A(a)(2)(C) of the Code) or Retirement or for any other
reason except termination for Cause prior to the end of the Deferral Period, the
participant shall receive payment in Shares in respect of such participant's
deferred stock units at the end of the applicable Deferral Period or on such
accelerated basis as the Committee may determine, to the extent permitted by
regulations issued under Section 409A(a)(3) of the Code.


      
        
           


        

        
          B-15

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      Except as
otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any
Subsidiary due to termination for Cause such participant shall immediately
forfeit any deferred stock units which would have matured or been earned at the
end of the applicable Deferral Period.

      


      Except as
otherwise provided by the Committee, in the event of a Change in Control that
also constitutes a "change in the ownership or effective control of" the
Company, or a change in the ownership of a substantial portion of the Company's
assets (in each case as determined under regulations issued pursuant to Section
409A(a)(2)(A)(v) of the Code), a participant shall receive payment in Shares in
respect of such participant's deferred stock units which would have matured or
been earned at the end of the applicable Deferral Period as if such Deferral
Period had ended immediately prior to the Change in Control; provided, however,
that if an event that constitutes a Change in Control hereunder does not
constitute a "change in control" under Section 409A of the Code (or the
regulations promulgated thereunder), no payments with respect to the deferred
stock units shall be made under this paragraph to the extent such payments would
constitute an impermissible acceleration under Section 409A of the
Code.

      


      10.           Performance
Awards.  Performance awards may be granted to participants at
any time and from time to time as determined by the Committee.  The
Committee shall have complete discretion in determining the size and composition
of performance awards granted to a participant.  The period over which
performance is to be measured (a "performance cycle") shall commence on the date
specified by the Committee and shall end on the last day of a fiscal year
specified by the Committee.  A performance award shall be paid no
later than the 15th day of the third month following the completion of a
performance cycle.  Performance awards may include (i) specific
dollar-value target awards (ii) performance units, the value of each such unit
being determined by the Committee at the time of issuance, and/or (iii)
performance Shares, the value of each such Share being equal to the Fair Market
Value of a share of Common Stock.

      


      The value
of each performance award may be fixed or it may be permitted to fluctuate based
on a performance factor (e.g., return on equity) selected by the
Committee.


      
        
           


        

        
          B-16

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      The
Committee shall establish performance goals and objectives for each performance
cycle on the basis of such criteria and objectives as the Committee may select
from time to time, including, without limitation, the performance of the
participant, the Company, one or more of its Subsidiaries or divisions or any
combination of the foregoing.  During any performance cycle, the
Committee shall have the authority to adjust the performance goals and
objectives for such cycle for such reasons as it deems equitable.

      


      The
Committee shall determine the portion of each performance award that is earned
by a participant on the basis of the Company's performance over the performance
cycle in relation to the performance goals for such cycle. The earned portion of
a performance award may be paid out in Shares, cash, Other Company Securities,
or any combination thereof, as the Committee may determine.

      


      A
participant must be a director, officer or employee of, or otherwise perform
services for, the Company or its Subsidiaries at the end of the performance
cycle in order to be entitled to payment of a performance award issued in
respect of such cycle; provided, however, that except as otherwise determined by
the Committee, if a participant ceases to be a director, officer or employee of,
or to otherwise perform services for, the Company and its Subsidiaries upon his
or her death, Retirement, or Disability prior to the end of the performance
cycle, the participant shall earn a proportionate portion of the performance
award based upon the elapsed portion of the performance cycle and the Company's
performance over that portion of such cycle. In the event of a Change in
Control, a participant shall earn no less than the portion of the performance
award that the participant would have earned if the applicable performance
cycle(s) had terminated as of the date of the Change in Control.

      


      11.           Withholding
Taxes.

      


      (a)              Participant
Election.  Unless otherwise determined by the Committee, a
participant may elect to deliver shares of Common Stock (or have the Company
withhold shares acquired upon exercise of an option or deliverable upon grant or
vesting of restricted stock, as the case may be) to satisfy, in whole or in
part, the amount the Company is required to withhold for taxes in connection
with the exercise of an option or the delivery of restricted stock upon grant or
vesting, as the case may be.  Such election must be made on or before
the date the amount of tax to be withheld is determined.  Once made,
the election shall be irrevocable.  The fair market value of the
shares to be withheld or delivered will be the Fair Market Value as of the date
the amount of tax to be withheld is determined. In the event a participant
elects to deliver or have the Company withhold shares of Common Stock pursuant
to this Section 11(a), such delivery or withholding must be made subject to the
conditions and pursuant to the procedures set forth in Section 6(b) with respect
to the delivery or withholding of Common Stock in payment of the exercise price
of options.  Shares withheld to pay withholding taxes may not exceed
the minimum statutory withholding rate.

      


      (b)              Company
Requirement.  The Company may require, as a condition to any
grant or exercise under the Plan or to the delivery of certificates for Shares
issued hereunder, that the grantee make provision for the payment to the
Company, either pursuant to Section 11(a) or this Section 11(b), of federal,
state or local taxes of any kind required by law to be withheld with respect to
any grant or delivery of Shares.  The Company, to the extent permitted
or required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or delivery of Shares under the Plan.  Shares
withheld to pay withholding taxes may not exceed the minimum statutory
withholding rate.


      
        
           


        

        
          B-17

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      12.           Written Agreement;
Vesting.  Unless the Committee determines otherwise, each
employee to whom a grant is made under the Plan shall enter into a written
agreement with the Company that shall contain such provisions, including without
limitation vesting requirements, consistent with the provisions of the Plan, as
may be approved by the Committee.  Unless the Committee determines
otherwise and except as otherwise provided in Sections 6, 7, 8, 9 and 10 in
connection with a Change in Control or certain occurrences of termination, no
grant under this Plan may be exercised, and no restrictions relating thereto may
lapse, within six months of the date such grant is made.

      


      13.           Transferability.  Unless
the Committee determines otherwise, no award granted under the Plan shall be
transferable by a participant other than by will or the laws of descent and
distribution or to a participant's Family Member by gift or a qualified domestic
relations order as defined by the Code.  Unless the Committee
determines otherwise, an option may be exercised only by the optionee or grantee
thereof; by his or her Family Member if such person has acquired the option by
gift or qualified domestic relations order; by the executor or administrator of
the estate of any of the foregoing or any person to whom the option is
transferred by will or the laws of descent and distribution; or by the guardian
or legal representative of any of the foregoing; provided that Incentive Stock
Options may be exercised by any Family Member, guardian or legal representative
only if permitted by the Code and any regulations thereunder.  All
provisions of this Plan shall in any event continue to apply to any award
granted under the Plan and transferred as permitted by this Section 13, and any
transferee of any such award shall be bound by all provisions of this Plan as
and to the same extent as the applicable original grantee.

      


      14.           Listing, Registration and
Qualification.  If the Committee determines that the listing,
registration or qualification upon any securities exchange or under any law of
Shares subject to any option, performance award, restricted stock unit, deferred
stock unit or restricted stock grant is necessary or desirable as a condition
of, or in connection with, the granting of same or the issue or purchase of
Shares thereunder, no such option may be exercised in whole or in part, no such
performance award may be paid out, and no Shares may be issued, unless such
listing, registration or qualification is effected free of any conditions not
acceptable to the Committee.

      


      15.           Transfer of
Employee.  The transfer of an employee from the Company to a
Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another
shall not be considered a termination of employment; nor shall it be considered
a termination of employment if an employee is placed on military or sick leave
or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.


      
        
           


        

        
          B-18

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      16.           Adjustments.  In
the event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, distribution of assets, or any
other change in the corporate structure or shares of the Company, the Committee
shall make such adjustment as it deems appropriate in the number and kind of
Shares or other property available for issuance under the Plan (including,
without limitation, the total number of Shares available for issuance under the
Plan pursuant to Section 4), in the number and kind of options, Shares,
restricted stock units, deferred stock units or other property covered by grants
previously made under the Plan, and in the exercise price of outstanding
options.  Any such adjustment shall be final, conclusive and binding
for all purposes of the Plan.  In the event of any merger,
consolidation or other reorganization in which the Company is not the surviving
or continuing corporation or in which a Change in Control is to occur, all of
the Company's obligations regarding awards that were granted hereunder and that
are outstanding on the date of such event shall, on such terms as may be
approved by the Committee prior to such event, be (a) canceled in exchange for
cash or other property (but, with respect to vested deferred stock units, only
if such merger, consolidation, other reorganization, or Change in Control
constitutes a "change in ownership or control" of the Company or a "change in
the ownership of a substantial portion" of the Company's assets, as determined
pursuant to regulations issued under Section 409A(a)(2)(A)(v) of the Code) or
(b) assumed by the surviving or continuing corporation.

      


      Without
limitation of the foregoing, in connection with any transaction of the type
specified by clause (iii) of the definition of a Change in Control in Section
2(c), the Committee may, in its discretion, (i) cancel any or all outstanding
options under the Plan in consideration for payment to the holders thereof of an
amount equal to the portion of the consideration that would have  been
payable to such holders pursuant to such transaction if their options had been
fully exercised immediately prior to such transaction, less the aggregate
exercise price that would have been payable therefor, or (ii) if the amount that
would have been payable to the option holders pursuant to such transaction if
their options had been fully exercised immediately prior thereto would be equal
to or less than the aggregate exercise price that would have been payable
therefor, cancel any or all such options for no consideration or payment of any
kind.  Payment of any amount payable pursuant to the preceding
sentence may be made in cash or, in the event that the consideration to be
received in such transaction includes securities or other property, in cash
and/or securities or other property in the Committee's discretion.

      


      17.           Amendment and Termination of
the Plan.  The Board of Directors or the Committee,
without  approval of the stockholders, may amend or terminate the
Plan, except that no amendment shall become effective without prior approval of
the stockholders of the Company if stockholder approval would be required by
applicable law or regulations or by any listing requirement of the principal
stock exchange on which the Common Stock is then listed.

      


      18.           Amendment or Substitution of
Awards under the Plan.  The terms of any outstanding award
under the Plan may be amended from time to time by the Committee in its
discretion in any manner that it deems appropriate, including, but not limited
to, acceleration of the date of exercise of any award and/or payments thereunder
or of the date of lapse of restrictions on Shares (but only to the extent
permitted by regulations issued under Section 409A(a)(3) of the Code); provided
that, except as otherwise provided in Section 16, no such amendment shall
adversely affect in a material manner any right of a participant under the award
without his or her written consent, and provided further that the Committee
shall not reduce the exercise price of any options awarded under the Plan
without approval of the stockholders of the Company.  The Committee
may, in its discretion, permit holders of awards under the Plan to surrender
outstanding awards in order to exercise or realize rights under other awards, or
in exchange for the grant of new awards, or require holders of awards to
surrender outstanding awards as a condition precedent to the grant of new awards
under the Plan, but only if such surrender, exercise, realization, exchange, or
grant (a) would not constitute a distribution of deferred compensation for
purposes of Section 409A(a)(3) of the Code or (b) constitutes a distribution of
deferred compensation that is permitted under regulations issued pursuant to
Section 409A(a)(3) of the Code.


      
        
           


        

        
          B-19

          
            

          

        

        
           


          
            Exhibit
B

          

        

      

      


      19.           Commencement Date;
Termination Date.  The date of commencement of the Plan shall
be the date on which the Company's Registration Statement on Form S-1 (File No.
333-119111) is declared effective by the Securities and Exchange
Commission.  Unless previously terminated upon the adoption of a
resolution of the Board terminating the Plan, the Plan shall terminate at the
close of business on the ten year anniversary of the date on which the Company's
Registration Statement on Form S-1 (File No. 333-119111) is declared effective
by the Securities and Exchange Commission.  No termination of the Plan
shall materially and adversely affect any of the rights or obligations of any
person, without his or her written consent, under any grant of options or other
incentives theretofore granted under the Plan.

      


      20.           Severability.  Whenever
possible, each provision of the Plan shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of the Plan is
held to be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of the Plan.

      


      21.           Governing
Law.  The Plan shall be governed by the corporate laws of the
State of Delaware, without giving effect to any choice of law provisions that
might otherwise refer construction or interpretation of the Plan to the
substantive law of another jurisdiction.

    

     

     

    B-20