**Exhibit 10.4**

**JAGGED PEAK, INC.**

**2000 STOCK INCENTIVE PLAN**

 

The purpose of this Jagged Peak,Inc. 2000 Stock Incentive Plan is to promote the growth and profitability of JAGGED PEAK, INC. (the “Corporation”) by providing officers, directors, key employees and consultants of the Corporation with additional incentives to achievelong-term corporate objectives, to assist the Corporation in attracting and retaining officers, directors, key employees and consultants of outstanding competence, and to provide such individuals with an opportunity to acquire an equity interest inthe Corporation. 

The 2000 Stock Incentive Plan has been approved by the Board of Directors effective as of August 22, 2000. 

 

The following terms shall havethe meanings shown: 

2.1 “Board of Directors” shall mean the Board of Directors of the Corporation. 

2.2 “Change of Control” shall mean any event described in Section 7.1. 

2.3 “Code” shall mean the Internal Revenue Code of 1986, as the same shall be amended from time to time. 

2.4 “Committee” shall mean the Board of Directors, or, if the Board of Directors has delegated its authority to administer the Plan to acommittee pursuant to Section XI, such committee as the Board may have designated. The members of this Committee may, at the Board of Director’s discretion, include persons who are not members of the Board. 

2.5 “Compensation Committee” shall mean the Compensation Committee of the Board of Directors, as provided for in Section 3.2 of the Plan. Allpersons appointed to be members of the Compensation Committee shall be directors who qualify as “Non-Employee Directors” within the meaning of Rule 16b-3 and “outside directors” within the meaning of Code Section 162(m) and allIRS regulations promulgated thereunder. 

2.6 “Common Stock” shall mean the common stock, par value $.001 per share, of theCorporation, except as provided in Section 9.2 of the Plan. 

2.7 “Consultant” shall mean any individual who performs valuableservices for the Corporation (or any Subsidiary) on a regular and on-going basis who is not an employee of the Corporation. 

2.8 “Dateof Grant” shall mean the date specified by the Committee on which a grant of Options, SARs or Performance Shares, or a grant or sale of Restricted Shares shall become effective, which shall not be earlier than the date on which the Committeetakes action with respect thereto. 

2.9 “Fair Market Value” shall mean the fair market value of a share of Common Stock asdetermined by the Board of Directors in good faith and as reflected in the minutes of the Board. In the event that the Corporation undertakes a public offering of Common Stock or the Common Stock otherwise is listed for trading on a nationalsecurities exchange or a national automated quotation system, then thereafter the Fair Market Value shall be determined by reference to the average of the closing price quotations, or, if none, the average of the bid and asked prices, reported withrespect to the sale of Common Stock over a period of up to ten (10) trading days preceding the date of grant. 

2.10 “ISOs” shallmean stock options granted by the Corporation which are intended to qualify as incentive stock options under Section 422 of the Code. 

2.11“Management Objectives” shall mean the achievement of performance objectives established by the Committee pursuant to this Plan for Participants who have received grants of Performance Shares or, when so determined by the Board ofDirectors, shares of Restricted Stock. One or more of the following business criteria for the Corporation, on a consolidated basis, and/or specified subsidiaries or business units of the Corporation (except with respect to the total shareholderreturn and earnings per share criteria), shall be used exclusively by the Committee in establishing performance objectives: (1) total shareholder return; (2) such total shareholder return as compared to total return (on a comparable basis) of apublicly available index such as, but not limited to, the Standard & Poor’s 500 Stock Index; (3) net income; (4) pretax earnings; (5) earnings before interest expense, taxes, depreciation and amortization; (6) pretax operating earningsafter interest expense and before bonuses, service fees, and extraordinary or special items; (7) operating margin; (8) earnings per share; (9) return on equity; (10) return on capital; (11) return on investment; (12) operating earnings; (13) workingcapital or inventory; and (14) ratio of debt to shareholders’ equity. One or more of the foregoing business criteria shall also be exclusively used in establishing performance objectives for grants that are intended to qualify as“performance-based compensation” under Code Section 162(m). 

2.12 “Named Executive Officer” shall mean theCorporation’s President and the four highest compensated officers (other than the President), as determined pursuant to the executive compensation disclosure rules under the Securities Exchange Act of 1934. 

2.13 “Nonemployee Director” shall mean a member of the Board of Directors who is not an employee or Consultant of the Corporation. 

2.14 “Nonstatutory Options” shall mean stock options which are not intended to qualify as ISOs. 

2.15 “Option Agreement” shall mean a written agreement between the Corporation and a Participant who has been granted Options under this Plan.

 

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2.16 “Option Price” shall mean, with respect to any Option (or related SAR), the amountdesignated in a Participant’s Option Agreement as the price per share he or she will be required to pay to exercise the Option and acquire the shares subject to such Option. 

2.17 “Option” shall mean any rights to purchase shares of Common Stock granted pursuant to Article IV of this Plan, including both ISOs andNonstatutory Options. 

2.18 “Participant” shall mean any current or former employee, Consultant or director of the Corporation orany of its Subsidiaries who has been granted Options, SARs, Restricted Stock or Performance Shares under the terms of this Plan. 

2.19“Performance Period” shall mean, in respect of a Performance Share, a period of time established pursuant to Article VIII of this Plan within which the Management Objectives relating thereto are to be achieved. 

2.20 “Performance Share” shall mean a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to ArticleVIII of this Plan. 

2.21 “Plan” shall mean this Jagged Peak, Inc. 2000 Stock Incentive Plan, as the same may be amended from timeto time. 

2.22 “Reload Option Rights” shall mean the right to have additional Options automatically granted to the Participantupon the exercise of his or her Options, as granted pursuant to Section 4.5 of this Plan. 

2.23 “Restricted Stock” shall meanshares of Common Stock that are issued to eligible officers, directors, key employees or Consultants and made subject to restrictions in accordance with Article VI of the Plan. 

2.24 “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under Section 16 of the Securities Exchange Act.

2.25 “SARs” shall mean stock appreciation rights granted pursuant to Article V of the Plan. 

2.26 “Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as the same may be amended from time to time. 

2.27 “Subsidiary” shall mean any corporation which, on the date of determination, qualifies as a subsidiary corporation of the Corporationunder Section 425(f) of the Code. 

2.28 “Ten Percent Shareholder” shall mean any Participant who at the time an ISO is grantedowns (within the meaning of Section 425(d) of the Code) more than ten percent of the voting power of all classes of stock of the Corporation. 

 

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**III.****Eligibility.**
3.1 Participation. TheBoard of Directors (or any Committee to whom the Board may delegate this authority) may grant Options, SARs and/or awards of Restricted Stock or Performance Shares under this Plan to any officer, key employee or Consultant of the Corporation or itsSubsidiaries. The Corporation may also grant Options and/or awards of Restricted Stock to any director of the Corporation, subject to the restrictions in Section 3.3. In granting such awards and determining their form and amount, the Board ofDirectors or Committee shall give consideration to the functions and responsibilities of the individual, his or her potential contributions to profitability and sound growth of the Corporation and such other factors as the Board of Directors or theCommittee may, in its discretion, deem relevant. 

3.2 Named Executive Officers. Notwithstanding Section 3.1 or any other provisionsof this Plan, for any time at which the Corporation is subject to the reporting requirements of the Securities Exchange Act, any officer who is a Named Executive Officer shall not be granted Options, SARs or awards of Restricted Stock or PerformanceShares unless the grant has been approved by the Compensation Committee. 

3.3 Directors. Members of the Board of Directors who areofficers of the Corporation or Consultants shall be eligible for Options or other awards under this Plan on the same terms as other officers or Consultants. Other members of the Board of Directors shall be eligible for Options or Restricted Stockawards only to the extent specified in such general policy on compensation of Nonemployee Directors as may be established by the Board of Directors. 

 
**IV.****Options.**
4.1 Terms and Conditions.The Board of Directors or the Committee may, in its sole discretion, from time to time grant Options to any officer, director, key employee or Consultant of the Corporation. The grant of an Option to an eligible officer, director, employee orConsultant shall be evidenced by a written Option Agreement in substantially the form approved by the Committee. Such Option shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent withthe terms of this Plan, as the Committee (or, in the case of a Named Executive Officer, the Compensation Committee) may deem appropriate. 

(a) Shares Covered. The Committee shall, in its discretion, determine the number of shares of Common Stock to be covered by the Options granted to any Participant. The maximum number of shares of Common Stockwith respect to which Options may be granted to any employee or Consultant during any one calendar year is 100,000 shares. 

(b) Exercise Period. The term of each Option shall be for such period as the Committee shall determine, but for not more than ten years from the Date of Grant thereof. The Committee shall also have the discretion to determine wheneach Option granted hereunder shall become exercisable, and to prescribe any vesting schedule limiting the exercisability of such Options as it may deem appropriate. 

 

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(c) Option Price. The Option Price payable for the shares of Common Stock coveredby any Option shall be determined by the Committee, but shall in no event be less than the par value of Common Stock. The Option Price for ISOs shall not be less than the Fair Market Value of one share of Common Stock on the Date of Grant. TheOption Price for Nonstatutory Options may be less than the Fair Market Value of Common Stock on the Date of Grant only if the Committee determines that special circumstances warrant a lower exercise price. 

(d) Exercise of Options. A Participant may exercise his or her Options from time to time by written notice to the Corporation ofhis or her intent to exercise the Options with respect to a specified number of shares. The specified number of shares will be issued and transferred to the Participant upon receipt by the Corporation of (i) such notice and (ii) payment in full forsuch shares, and (iii) receipt of any payments required to satisfy the Corporation’s tax withholding obligations pursuant to Section 10.2. 

(e) Payment of Option Price Upon Exercise. Each Option Agreement shall provide that the Option Price for the shares with respect to which an Option is exercised may be paid to the Corporation at the time ofexercise, in the form of (i) cash, (ii) delivery to the Corporation of whole shares of Common Stock already owned by the Participant, valued at their Fair Market Value on the day immediately preceding the date of exercise, (iii) at the discretion ofthe Corporation, a promissory note secured by a pledge of the shares of Common Stock, or (iv) a combination of any of the above equal to the Option Price for the shares. 

(f) Cashless Exercises. If the Common Stock is traded on a stock exchange or other public market, the Corporation may permit theParticipant to exercise an Option by delivery of a signed, irrevocable notice of exercise, accompanied by payment in full of the Option Price by the Participant’s stockbroker and an irrevocable instruction to the Corporation to deliver theshares of Common Stock issuable upon exercise of the Option promptly to the Participant’s stockbroker for the Participant’s account, provided that at the time of such exercise, such exercise would not subject the Participant to liabilityunder Section 16(b) of the Securities Exchange Act, or would be exempt pursuant to Rule 16b-3 or any other exemption from such liability. 

4.2 Effect of Termination of Employment, Retirement, Disability or Death. 

(a) If a Participant’semployment (or other relationship, in the case of a Consultant or director) is involuntarily terminated by the Corporation with or without cause, or is terminated by the Participant without the Corporation’s express consent, for any reasonother than retirement, disability or death, his or her Options shall terminate upon the date of the termination, unless the Committee decides in its sole discretion, to waive this termination and amend the Participant’s Option Agreement to soprovide. 

(b) Any Option Agreement may, in the Committee’s sole discretion, include such provisions as the Committeedeems advisable with respect to the Participant’s right to exercise the Option subsequent to retirement or other termination with the consent of the Corporation, or subsequent to termination of the Participant’s employment by reason oftotal and permanent disability (within the meaning of Section 22(e)(3) of the Code); provided, that, in no event shall any Option be exercisable after the fixed termination date set forth in the Participant’s Option 

 

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Agreement pursuant to Section 4.1(b); and further provided that no ISO shall be exercisable at any time subsequent to the expiration of the period ofthree (3) months from the date of retirement, or the period of twelve (12) months from the date of termination of the Participant’s employment (or other relationship with the Corporation) by reason of total and permanent disability, as the casemay be. 

(c) Any Option Agreement may, in the Committee’s sole discretion, provide that, in the event the Participantdies while in the employ of the Corporation (or while serving as an active Consultant), or while he or she has the right to exercise his or her Options under the preceding Section 4.2(b), the Option may be exercised (to the extent it had becomeexercisable prior to the time of the Participant’s death), during such period of up to one year after the date of the Participant’s death as the Board of Directors deems to be appropriate, by the personal representative of theParticipant’s estate, or by the person or persons to whom the Options shall have been transferred by will or by the laws of descent and distribution. 

4.3 Designation of Options as Incentive Stock Options. The Committee may, in its discretion, specify that any Options granted to a Participant who is an employee of the Corporation or a Subsidiary shall be ISOsqualifying under Code Section 422. Each Option Agreement which provides for the grant of ISOs shall designate that such Options are intended to qualify as ISOs. Each provision of the Plan and of each Option Agreement relating to an Option designatedas an ISO shall be construed so that such Option qualifies as an ISO, and any provision that cannot be so construed shall be disregarded. 

Any Options granted under this Plan which are designated as ISOs shall comply with the following terms: 

(a) The aggregate Fair Market Value (determined at the time an ISO is granted) of the shares of Common Stock (together with all other stock of the Corporation and all stock of any Parent or Subsidiary) with respect towhich the ISOs may first become exercisable by an individual Participant during any calendar year, under all stock option plans of the Corporation (or of any Subsidiaries) shall not exceed $100,000. To the extent this limitation would otherwise beexceeded, the Option shall be deemed to consist of an ISO for the maximum number of shares which may be covered by ISOs pursuant to the preceding sentence, and a Nonstatutory Option for the remaining shares subject to the Option. 

(b) The Option Price payable upon the exercise of an ISO shall not be less than the Fair Market Value of a share of Common Stock on theDate of Grant. 

(c) In the case of an ISO granted to a Participant who is a Ten Percent Shareholder, the period of theOption shall not exceed five years from the Date of Grant, and the Option Price shall not be less than 110 percent of the Fair Market Value of Common Stock on the Date of Grant. 

(d) No ISO granted under this Plan shall be assignable or transferable by the Participant, except by will or by the laws of descent anddistribution. During the life of the Participant, any ISO shall be exercisable only by the Participant. 

 

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4.4 Authority to Waive Restrictions on Exercisability. The Board of Directors may, in itsdiscretion, determine at any time that all or any portion of the Options granted to one or more Participants under the Plan shall, notwithstanding any restrictions on exercisability imposed pursuant to Section 4.1(b), become immediately exercisablein full. The Committee may make such further adjustments to the terms of such Options as it may deem necessary or appropriate in connection therewith, including amending the Option Agreement to recognize that all or a portion of the Options nolonger qualify as ISOs under Section 4.3. 

4.5 Non-Assignability. Options granted under this Plan shall generally not be assignableor transferable by the Participant, except by will or by the laws of descent and distribution, or as described in the next paragraph. Notwithstanding the foregoing, the Committee may, in its discretion, permit a Participant to transfer all or aportion of his or her Options to members of his or her immediate family, to trusts for the benefit of members of his immediate family, or to family partnerships in which immediate family members are the only partners, provided that the Participantmay receive no consideration for such transfers, and that such Options shall still be subject to termination in accordance with Section 4.2 above in the hands of the transferee. 

4.6 Reload Options. The Committee may, in its discretion, also grant a Participant Reload Option Rights with respect to his or her Options. If aParticipant has been granted Reload Option Rights with respect to Options, and then exercises his or her Options by paying the Option Price by delivering previously owned shares of Common Stock, as authorized under Section 4.1(e) above, theParticipant shall automatically be granted additional Options on the same terms for the number of shares delivered to pay such Option Price; provided, however, that the term of any Reload Option shall not extend beyond the term of the Optionoriginally exercised. 

 
**V.****Stock Appreciation Rights.**
5.1 Grant ofSARs. Subject to Sections 3.2 and 3.3, the Committee may, in its discretion, from time to time grant stock appreciation rights to a Participant in connection with Options granted under this Plan. Participants granted SARs shall be entitled toreceive upon exercise thereof, in cash or Common Stock as provided in Section 5.3(c), the difference between the Fair Market Value of the Common Stock on the day preceding the exercise date and the Option Price of the underlying Option. SARs may begranted with respect to all or part of the Common Stock under a particular Option, except as otherwise expressly provided herein. 

5.2Tandem Options. SARs issued in tandem with Options shall entitle the Participant holding the related Option, upon exercise, in whole or in part, of the SARs, to receive payment in the amount and form determined pursuant to Section 5.3(c).SARs may be exercised only to the extent that the related Option has not been exercised. The exercise of SARs shall result in a pro rata surrender of the related Option to the extent that the SARs have been exercised. 

5.3 Terms and Conditions. The grant of SARs shall be evidenced by including provisions with respect to such SARs in the Participant’s OptionAgreement in a form approved by the Committee. Such SARs shall be subject to the following express terms and conditions and to such other terms and conditions, not inconsistent with the terms of the Plan, which the Committee 

 

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(or, in the case of a Named Executive Officer, the Compensation Committee) may deem appropriate. 

(a) SARs shall be exercisable at such time or times and to the extent, but only to the extent, that the Option to which they relate shallbe exercisable. 

(b) SARs (and any Option related thereto) shall in no event be exercisable during the first six monthsafter the date of grant and such rights shall not be transferable other than by will or by the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant. 

(c) Upon exercise of SARs, the Participant shall be entitled to receive an amount equal in value to the difference between the OptionPrice and the Fair Market Value per share of Common Stock on the day preceding the exercise date, multiplied by the number of shares in respect of which the SARs shall have been exercised. Such amount shall be paid in the form of (i) cash, (ii)shares of Common Stock with a Fair Market Value on the day preceding the exercise date equal to such amount, or (iii) a combination of cash and shares of Common Stock, all as determined by the Board of Directors. 

(d) In no event shall an SAR be exercisable at a time when the Option Price of the underlying Option is greater than the Fair Market Valueof the shares subject to the related Option. 

 
**VI.****Restricted Stock.**
6.1 Rights As AShareholder. Subject to Sections 3.2 and 3.3, the Committee may, in its discretion, grant a Participant an award consisting of shares of Restricted Stock. At the time of the award, the Committee shall cause the Corporation to deliver to theParticipant, or to a custodian or an escrow agent designated by the Board of Directors, a stock certificate or certificates for such shares of Restricted Stock, registered in the name of the Participant. The Participant shall have all the rights ofa shareholder with respect to such Restricted Stock, subject to the terms and conditions, including forfeiture or resale to such Corporation, if any, as the Committee may determine to be desirable pursuant to Section 6.3 of the Plan. The Committeemay designate the Corporation or one or more of its executive officers to act as custodian or escrow agent for the certificates. 

6.2Awards and Certificates. 

(a) A Participant granted an award of Restricted Stock shall not be deemed to have become ashareholder of the Corporation, or to have any rights with respect to such shares of Restricted Stock, until and unless such Participant shall have executed a restricted stock agreement or other instrument evidencing the award and delivered a fullyexecuted copy thereof to the Corporation and otherwise complied with the then applicable terms and conditions of such award. 

(b) When a Participant is granted shares of Restricted Stock, the Corporation shall issue a stock certificate or certificates in respect of shares of Restricted Stock. Such certificates shall be registered in the name of the Participant,and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such award substantially in the following form: 

“The transferability of the shares of stock represented by this Certificate are subject to the terms and conditions (including forfeiture) of a Restricted Stock Agreement entered into between the registered ownerand JAGGED PEAK, Inc. A copy of such Agreement is on file in the offices of the Secretary of the Corporation.” 

 

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(c) Except as may be otherwise determined by the Committee (or as required in order tosatisfy the tax withholding obligations imposed under Section 10.3 of this Plan), Participants granted awards of Restricted Stock under this Plan will not be required to make any payment or provide consideration to the Corporation other than therendering of services. 

6.3 Restrictions and Forfeitures. Restricted Stock awarded to a Participant pursuant to this Article VIshall be subject to the following restrictions and conditions: 

(a) During a period set by the Committee of not less thanone (1) year, but not more than ten (10) years, commencing with the date of an award (the “Restriction Period”), the Participant will not be permitted to sell, transfer, pledge or assign the shares of Restricted Stock awarded to him orher. Within these limits, the Committee may provide for the lapse of such restrictions in installments where deemed appropriate. 

(b) Except as provided in Section 6.3(a), the Participant shall have with respect to the Restricted Stock all of the rights of a shareholder of the Corporation, including the right to vote the shares and receive dividends and otherdistributions. 

(c) Subject to the provisions of Section 6.3(d), upon termination of the Participant’s employment withthe Corporation (or status as a Consultant) during the Restriction Period for any reason, all shares of Restricted Stock with respect to which the restrictions have not yet expired shall be forfeited to or repurchased by the Corporation. 

(d) In the event of a Participant’s retirement, permanent total disability, or death, or in cases of special circumstances, theCommittee may, in its sole discretion, when it finds that a waiver would be in the best interests of the Corporation, waive in whole or in part any or all remaining restrictions with respect to such Participant’s Restricted Stock. 

(e) Notwithstanding the other provisions of this Section 6.3, the Committee may adopt rules which would permit a gift by a Participantof shares of Restricted Stock to a spouse, child, stepchild, grandchild or to a trust the beneficiary or beneficiaries of which shall be either such a person or persons or the Participant, provided that the Restricted Stock so transferred shall besimilarly restricted. 

(f) Any attempt to dispose of shares of Restricted Stock in a manner contrary to the restrictions setforth herein shall be ineffective. 

(g) Nothing in this Section 6.3 shall preclude a Participant from exchanging anyRestricted Stock for any other shares of the Common Stock that are similarly restricted. 

 

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**VII.****Change in Control Transactions.**
7.1Change in Control. For purposes of this Plan, a “Change in Control” shall include any of the events described below: 

(a) The acquisition in one or more transactions of more than fifty percent (50%) of the Corporation’s outstanding Common Stock, or the equivalent in voting power of any class of securities of the Corporationentitled to vote in elections of directors by any corporation, or other person or group (within the meaning of Section 14(d)(2) of the Securities Exchange Act); 

(b) Any merger or consolidation of the Corporation into or with another corporation in which the Corporation is not the surviving entity,or any transfer or sale of substantially all of the assets of the Corporation or any merger or consolidation of the Corporation into or with another corporation in which the Corporation is the surviving entity and, in connection with such merger orconsolidation, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for other stock or securities of the Corporation or any other person, or cash, or any other property. 

(c) Any person, or group of persons, announces a tender offer for at least fifty percent (50%) of the Corporation’s Common Stock.

7.2 Effect of Change in Control. In the event of a pending or threatened Change in Control, the Board of Directors may, in its solediscretion, take any one or more of the following actions with respect to all Participants (other than with respect to Named Executive Officers): 

(a) Accelerate the exercise dates of any outstanding Options to make all outstanding Options fully vested and exercisable; 

(b) Determine that all or any portion of the conditions associated with a Restricted Stock or Performance Share Award have been met; 

(c) Grant SARs or a cash bonus award to any of the holders of outstanding Options; 

(d) Pay cash to any or all Option holders in exchange for the cancellation of their outstanding Nonstatutory Options, SARs, or PerformanceShares; 

(e) Make any other adjustments or amendments to the Plan and outstanding Options, Restricted Stock or PerformanceShare awards and/or substitute new Options or other awards. 

With respect to any Named Executive Officer, any such action shall be effective only if it isapproved by the Compensation Committee. 

 

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**VIII. ****Performance Shares.**
Subject to Sections 3.2and 3.3, the Committee (or, in the case of Named Executive Officers, the Compensation Committee) may also, in its discretion, grant Performance Shares to a Participant, which shall become payable to the Participant upon the achievement of specifiedManagement Objectives, upon such terms and conditions as the Committee (or Compensation Committee) may determine in accordance with the following provisions: 

(a) Each such award shall specify the number of Performance Shares to which it pertains, which may be subject to adjustment to reflectchanges in compensation or other factors. 

(b) The Performance Period with respect to each Performance Share shall bedetermined by the Committee on the Date of Grant. 

(c) For each Participant’s award, the Committee shall specify theManagement Objectives that are to be achieved by the Participant, which may be described in terms of Corporation-wide objectives or in terms of objectives that are related to the performance of the individual Participant or the department orfunction within the Corporation in which the Participant is employed. These Management Objectives shall be selected by the Committee within the first ninety (90) days of the Performance Period. Management Objectives for Participants who are (or maybecome) Named Executive Officers shall be submitted for approval by the Corporation’s shareholders if the Corporation wishes to be able to treat the Performance Shares as “qualified performance-based compensation” for purposes of CodeSection 162(m). 

(d) Each Participant’s award of Performance Shares shall specify that the amount payable with respectthereto may not exceed a maximum specified by the Committee on the Date of Grant, or the number of shares of Common Stock issued with respect thereto may not exceed maximums specified by the Committee on the Date of Grant. 

(e) Each Participant’s award shall specify in respect of each of the specified Management Objectives the minimum acceptable level ofachievement below which no payment will be made, and shall set forth a formula for determining the amount of any payment to be made if performance is at or above the minimum acceptable level but falls short of full achievement of the specifiedManagement Objectives. 

(f) Each Participant’s award shall specify the time and manner of payment of Performance Sharesthat have been earned. No payment shall be made, with respect to a Named Executive Officer’s Performance Shares unless the Compensation Committee has certified in writing that the Management Objectives with respect to such Performance Shareshave been met. Any award may specify that any such amount may be paid by the Corporation in cash, shares of Common Stock or any combination thereof and may either grant to the Participant or reserve to the Committee the right to elect among thosealternatives. 

(g) The Committee (or, for Named Executive Officers, the Compensation Committee) may adjust ManagementObjectives and the related minimum acceptable level of achievement if, in the judgment of the Committee, events or transactions have occurred after the 

 

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Date of Grant that are unrelated to the performance of the Participant and result in distortion of the Management Objectives or the related minimumacceptable level of achievement. 

(h) Each Participant’s award under this Article VIII shall be evidenced by anagreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by the Participant and shall contain such terms and provisions as the Committee may determine consistent with this Plan. 

 
**IX.****Aggregate Limitation on Shares of Common Stock.**
9.1 Number of Shares of Common Stock. 

(a) Shares of Common Stock which may be issued pursuant to Options,SARs, Restricted Stock awards or Performance Share awards granted under the Plan may be either authorized and unissued shares of Common Stock or of Common Stock held by the Corporation as treasury stock. The number of shares of Common Stock reservedfor issuance under this Plan shall not exceed 500,000 shares of Common Stock, subject to such adjustments as may be made pursuant to Section 9.2. 

(b) For purposes of Section 9.1(a), upon the exercise of an Option or SAR, the number of shares of Common Stock available for future issuance under the Plan shall be reduced by the number of shares actually issued tothe Optionee, exclusive of any shares surrendered to the Corporation as payment of the Option price. 

(c) Any shares ofCommon Stock subject to an Option which for any reason is canceled, terminates unexercised or expires, except by reason of the exercise of a related SAR, shall again be available for issuance under the Plan. 

(d) In the event that any award of Restricted Stock is forfeited, canceled or surrendered for any reason, the shares of Common Stockconstituting such Restricted Stock award shall again be available for issuance under the Plan. 

9.2 Adjustments of Stock. In theevent of any change or changes in the outstanding Common Stock of the Corporation by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or any similar transaction, the Board of Directors (or,with the Board’s approval, the Committee) shall adjust the number of shares of Common Stock which may be issued under this Plan, the number of shares of Common Stock subject to Options theretofore granted under this Plan, the Option Price ofsuch Options, the number of SARs theretofore granted in conjunction with an Option, the number of shares of Restricted Stock and make any and all other adjustments deemed appropriate by the Board of Directors in such manner as the Board of Directorsor the Committee deems appropriate to prevent substantial dilution or enlargement of the rights granted to a participating employee. 

Newoption rights may be substituted for the Options granted under the Plan, or the Corporation’s duties as to Options and SARs outstanding under the Plan may be assumed by a Subsidiary, by another corporation or by a parent or subsidiary (withinthe meaning of Section 425 

 

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of the Code) of such other corporation, in connection with any merger, consolidation, acquisition, separation, reorganization, liquidation or like occurrencein which the Corporation is involved. In the event of such substitution or assumption, the term Common Stock shall thereafter include the stock of the corporation granting such new option rights or assuming the Corporation’s duties as to suchOptions or SARs. 

 
**X.****Miscellaneous.**
10.1 GeneralRestriction. Any Option, SAR, or Restricted Stock award granted under this Plan shall be subject to the requirement that, if at any time the Committee shall determine that any registration of the shares of Common Stock, or any consent orapproval of any governmental body, or any other agreement or consent, is necessary as a condition of the granting of an Option or other award, or the issuance of Common Stock in satisfaction thereof, such Common Stock will not be issued or delivereduntil such requirement is satisfied in a manner acceptable to the Committee. 

10.2 Withholding Taxes. 

(a) The Committee shall have the right to require participating employees to remit to the Corporation an amount sufficient to satisfy anyfederal, state and local withholding tax requirements prior to the delivery of any shares of Common Stock under the Plan. If a Participant sells, transfers, assigns or otherwise disposes of shares of Common Stock acquired upon the exercise of an ISOwithin two (2) years after the date on which the ISO was granted or within one (1) year after the receipt of the shares of Common Stock by the Participant, the Participant shall promptly notify the Corporation of such disposition and the Corporationshall have the right to require the Participant to remit to the Corporation the amount necessary to satisfy any federal, state and local tax withholding requirements imposed on the Corporation by reason of such disposition. 

(b) The Corporation shall have the right to withhold from payments made in cash to a Participant under the terms of the Plan, an amountsufficient to satisfy any federal, state and local withholding tax requirements imposed with respect to such cash payments. 

(c) Amounts to which the Corporation is entitled pursuant to Section 10.2(a) or (b), may be paid, at the election of the Participant and with the approval of the Committee, either (i) paid in cash, (ii) withheld from the Participant’ssalary or other compensation payable by the Corporation, including cash payments made under this Plan, or (iii) in shares of Common Stock otherwise issuable to the Participant upon exercise of an Option or SAR, that have a Fair Market Value on thedate on which the amount of tax to be withheld is determined (the “Tax Date”) not less than the minimum amount of tax the Corporation is required to withhold. A Participant’s election to have shares of Common Stock withheld that areotherwise issuable shall be in writing, shall be irrevocable upon approval by the Committee, and shall be delivered to the Corporation prior to the Tax Date with respect to the exercise of an Option or SAR. 

10.3 Tax Loans. In the discretion of the Board of Directors, the Corporation may make a loan to a Participant (i) in connection with the exerciseof an Option in an amount not to exceed the grossed up amount of any Federal and state taxes payable in connection with such exercise, for the purpose of assisting such Participant to exercise such Option, or (ii) in connection with the vesting

 

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of Restricted Stock in an amount equal to the grossed up amount of any Federal and state taxes payable as a result of such vesting. Any such loan may besecured by the related shares of Common Stock or other collateral deemed adequate by the Board of Directors and will comply in all respects with all applicable laws and regulations. The Committee may adopt policies regarding eligibility for suchloans, the maximum amounts thereof and any terms and conditions not specified in the Plan upon which such loans will be made. In no event will the interest rate be lower than the minimum rate at which the Internal Revenue Service would not imputeadditional taxable income to the Participant. 

10.4 Investment Representation. If the Committee determines that a writtenrepresentation is necessary in order to secure an exemption from registration under the Securities Act of 1933 or applicable state law, the Committee may demand that the Participant deliver to the Corporation at the time of any exercise of anyOption or SAR, or at time of the transfer of shares of Restricted Stock, any written representation that Committee determines to be necessary or appropriate for such purpose, including but not limited to a representation that the shares to be issuedare to be acquired for investment and not for resale or with a view to the distribution thereof. If the Committee makes such a demand, delivery of a written representation satisfactory to the Committee shall be a condition precedent to the right ofthe Participant to acquire such shares of Common Stock. 

10.5 No Right to Employment. Nothing in this Plan or in any agreemententered into pursuant to it shall confer upon any participating employee the right to continue in the employment of the Corporation or affect any right which the Corporation may have to terminate the employment of such participating employee.

10.6 Non-Uniform Determinations. The Committee’s determinations under this Plan (including without limitation itsdeterminations of the persons to receive Options, SARs, or awards of Restricted Stock or Performance Shares, the form, amount and timing of such awards and the terms and provisions of such awards) need not be uniform and may be made by itselectively among Participants who receive, or are eligible to receive, awards under this Plan, whether or not such Participants are similarly situated. 

10.7 No Rights as Shareholders. Participants granted Options, SARs or Performance Shares under this Plan shall have no rights as shareholders of the Corporation as applicable with respect thereto unless anduntil certificates for shares of Common Stock are issued to them. 

10.8 Transfer Restrictions. The Board of Directors may determinethat any Common Stock to be issued by the Corporation upon the exercise of Options or SARs, or in settlement of Performance Shares, shall be subject to such further restrictions upon transfer as the Board of Directors determines to be appropriate.

10.9 Fractional Shares. The Corporation shall not be required to issue any fractional Common Shares pursuant to this Plan. TheBoard of Directors may provide for the elimination of fractions or for the settlement thereof in cash. 

 

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**XI.****Administration.**
(a) ThePlan shall be administered by the Board of Directors. Notwithstanding the preceding sentence, the Board of Directors may delegate its authority with respect to Participants to a Committee consisting of such members as may be appointed by the Boardof Directors from time to time, and, if the Common Stock is publicly traded, shall delegate its authority with respect to Named Executive Officers to the Compensation Committee. Members of the Committee need not be members of the Board of Directors,and shall serve at the pleasure of the Board of Directors. 

(b) Except as provided in Section 3.2, the Board of Directors(or, in its place, the Committee) shall have the authority, in its sole discretion, from time to time: (i) to grant Options, SARs, shares of Restricted Stock or Performance Shares to officers, key employees, and Consultants of the Corporation, asprovided for in this Plan; (ii) to prescribe such limitations, restrictions and conditions upon any such awards as the Committee shall deem appropriate; (iii) to determine the periods during which Options may be exercised and to accelerate theexercisability of outstanding Options or SARs, or the vesting of Restricted Stock, as it may deem appropriate; (iv) to modify, cancel, or replace any prior Options or other awards and to amend the relevant Option Agreements or Restricted StockAgreements with the consent of the affected Participants, including amending such agreements to amend vesting schedules, extend exercise periods or increase or decrease the Option Price for Options, as it may deem to be necessary; and (v) tointerpret the Plan, to adopt, amend and rescind rules and regulations relating to the Plan, and to make all other determinations and to take all other action necessary or advisable for the implementation and administration of the Plan. With respectto any Named Executive Officer, this authority shall be transferred to the Compensation Committee, or may be exercised by the Board of Directors subject to the condition that the express approval of the Compensation Committee must be obtained.

(c) All actions taken by the Board of Directors or the Committee shall be final, conclusive and binding upon any eligibleemployee. No member of the Board of Directors or the Committee shall be liable for any action taken or decision made in good faith relating to the Plan or any award thereunder. 

 
**XII.****Amendment and Termination.**
12.1Amendment or Termination of the Plan. The Board of Directors may at any time terminate this Plan or any part thereof and may from time to time amend this Plan as it may deem advisable; provided, however the Board of Directors shall obtainshareholder approval of any amendment for which shareholder approval is required under Section 422 of the Code, or the shareholder approval requirements imposed on the Corporation by the listing rules of any stock exchange on which the Common Stockis listed, including an amendment which would (i) increase the aggregate number of shares of Common Stock which may be issued under this Plan (other than increases permitted under Section 9.2), (ii) extend the term of this Plan, or (iii) extend theperiod during which an Option may be exercised. The termination or amendment of this Plan shall not, without the consent of the employee, affect such employee’s rights under an award previously granted. 

 

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12.2 Term of Plan. Unless previously terminated pursuant to Section 11.1, the Plan shall terminateon August 22, 2010, the tenth anniversary of the date on which the Plan became effective, and no Options, SARs, or awards of Restricted Stock may be granted on or after such date. 

 

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