r8kex102aip.htm


    EXHIBIT
10.2                            



    


    


    


    


    


    


    


    


    


    


    


    
 

    


    HNI
CORPORATION

    ANNUAL
INCENTIVE PLAN

    


    


    


    


     

     

     

     

     

    
 

    


    


    


    


    


    As
Amended and Restated Effective February 17, 2010

    (subject
to shareholder approval for certain provisions)


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    HNI
CORPORATION

    ANNUAL INCENTIVE PLAN

                            


    


    I.           AMENDMENT AND
RESTATEMENT

     

    1.1           Amendment
and Restatement.  HNI Corporation, an Iowa corporation (the
"Corporation"), established this HNI Corporation Annual Incentive Plan
(previously called the "HNI Corporation Executive Bonus Plan") (the "Plan),
effective May 1, 1974.  The Corporation has amended and restated the
Plan from time to time, most recently effective January 1, 2005.  The
Corporation hereby again amends and restates the Plan, effective February 17,
2010 (the "Restatement Date"), to accomplish certain changes in its form and
operation.  Certain changes made to the Plan pursuant to this
restatement are subject to shareholder approval, as described in Section
1.3.

     

    1.2           Purpose.  The
purpose of the Plan is to encourage a consistently high standard of excellence
and continued employment by certain designated key executives and employees of
the Corporation and its Subsidiaries.

     

    1.3           Application
of the Plan.  The terms of the Plan, as amended and restated
herein, apply to Performance Awards for Performance Periods beginning on or
after the Restatement Date.  Notwithstanding the foregoing, certain
changes made to the Plan by this restatement are subject to, and dependent upon,
shareholder approval.  These changes are those made to the definition
of "Performance Measures," as described in Section 2.1(m) (termed "Qualifying
Factors" and "Profit Achievement Factors" in the version of the Plan in effect
prior to the Restatement Date) and to the dollar limit set forth in Section 4.1
(from $2,000,000 to $4,000,000).  The changes to the definition of
"Performance Measures" shall not apply until the shareholders of the Corporation
approve these changes at their first annual meeting that occurs after the
Restatement Date.  Prior to that date, or if the shareholders do not
approve the changes, the terms of the Plan defining "Qualifying Factors" and
"Profit Achievement Factors," as in effect prior to the Restatement Date, shall
continue to apply.  If the shareholders of the Corporation do not
approve the restated Plan on the date of their first annual meeting that occurs
after the Restatement Date, then the $2,000,000 dollar limit shall continue to
apply.

     

    II.           DEFINITIONS, GENDER AND
NUMBER

    


    2.1           Definitions.  Whenever
used in the Plan, the following terms shall have the meaning set forth below
and, when the defined meaning is intended, the term is capitalized:

     

    (a)           "Award" means an incentive
award granted under the Plan pursuant to Article 4.

    


    (b)           "Board" means the Board of
Directors of the Corporation.

    


    (c)           "Change in Control"
means:


    
      
         


      

      
        1 


        
          

        

      

       

    

    


    (i)           the
acquisition by any individual, entity or group (with the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in
Control:  (I) any acquisition directly from the Corporation; (II) any
acquisition by the Corporation; (III) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation; or (IV) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (iii) of this paragraph; or

    


    (ii)           individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
during a 12-month period for any reason to constitute a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or

    


    (iii)           consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Corporation (a "Business
Combination"), in each case, unless, following such Business
Combination:  (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, 50% or more of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
Directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Corporation Voting Securities; (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of the


    
      
         


      

      
        2 


        
          

        

      

      
         


      

    


    combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business
Combination; and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination, if such change in the members of the Board was not indorsed by a
majority of the members of the Incumbent Board.


    (d)           "Chief Executive Officer"
means the Chief Executive Officer of the Corporation.

    


    (e)           "Chief Financial Officer"
means the Chief Financial Officer of the Corporation.

    


    (f)           "Code" means the Internal
Revenue Code of 1986, as amended, and any regulations promulgated
thereunder.

    


    (g)           "Committee" means the
Committee designated by the Board, consisting of two or more members of the
Board, each of whom shall be:  (i) a "non-employee director" within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934; and (ii) an
"outside director" within the meaning of Section 162(m) of the
Code.

    


    (h)           "Corporation" means HNI
Corporation, an Iowa corporation.

    


    (i)           "Disability or Disabled," with
respect to a Participant, means that the Participant satisfies the requirements
to receive long-term disability benefits under the Corporation-sponsored group
long-term disability plan in which the Participant participates without regard
to any waiting periods, or that the Participant has been determined by the
Social Security Administration to be eligible to receive Social Security
disability benefits.  A Participant shall not be considered to be
Disabled unless the Participant furnishes proof of the Disability to the
Corporation in such form and manner as the Corporation may require.

    


    (j)           "Earned Performance Award"
means the Award, if any, payable to a Participant at the end of the Performance
Period.

    


    (k)           "162(m) Employee," for a
Performance Period, means a "covered employee" of the Corporation within the
meaning of Section 162(m)(3), or any subsequent authority, for the Performance
Period, or any individual whom the Committee in its judgment determines is
likely to be a "covered employee" for the Performance Period.

    


    (l)           "Fiscal Year" means the
Corporation's fiscal year.


    
      
         


      

      
        3 


        
          

        

      

      
         


      

    


    (m)           "Operating Unit" means either:
(i) the Corporation as a whole; (ii) an individual Subsidiary, division, store,
or other business unit of the Corporation; or (iii) a grouping of business units
that employs the individuals that have been approved to participate in the Plan
by the Board.

    


    (n)           "Participant," for any
Performance Period, means a person who is designated by the Board to receive
benefits under the Plan for such Performance Period who is at the time an
officer, executive, or other employee of the Corporation or any one or more of
its Subsidiaries, or who has agreed to commence serving in any such
capacity.

    


    (o)           "Performance Measure" means
performance goals or goals established for the Operating Unit, division or other
business unit of an Operating Unit, or any of them, for each Performance Period,
in each case as established pursuant to Section 5.  A Performance
Measure may take into account such criteria as the Board determines to be
appropriate.

    


    Notwithstanding the preceding sentence,
in the case of a 162(m) Employee, the Performance Measure shall be based
exclusively on one or more of the following corporate-wide or Subsidiary,
division, or Operating Unit financial measures:  (1) pre-tax profit or
after-tax gross profit, (2) operating income, (3) operating profit, (4) earnings
before interest, taxes, depreciation, and amortization, (5) income before taxes,
(6) net income, (7) revenue, (8) cash flow, (9) return on invested capital, (10)
return on net assets, (11) pre-tax or after tax profit margin,  (12)
pre-tax or after-tax profit growth, (13) revenue growth, (14) stock price, and
(15) economic profit.  In the sole discretion of the Committee, the
Committee may amend or adjust the Performance Measures or other terms and
conditions of an outstanding Award in recognition of unusual or nonrecurring
events affecting the Corporation or its financial statements or changes in law
or accounting principles.  Each goal described above may be expressed
on an absolute or relative basis, may be based on or otherwise employ
comparisons based on current internal targets, the past performance of the
Corporation (including the performance of one or more Subsidiaries, divisions,
or Operating Units) or the past or current performance of other companies, and
in the case of earnings-based measures, may use or employ comparisons relating
to capital (including, but limited to, the cost of capital), shareholders'
equity and/or shares outstanding, or to assets or net assets.

    


    In addition to the above, performance
goals may be established for Participants on an individual basis to take into
account such criteria as the Board determines to be appropriate; provided,
however, that in the case of a 162(m) Employee, the individual Performance
Measure shall be based exclusively on one or more of the
following:  (1)  customer or member satisfaction, (2)
reduction in member turnover, (3) improved safety record, (4) integration and/or
management of acquisitions, (5) increased inventory turns, (6) productivity of
members, materials, manufacturing and/or logistics, (7) strengthen market
position (market share), (8) enhancing culture and capabilities, (9) reduction
of operating costs, (10) building a best-cost lean enterprise, (11) improving
cash flow and/or cash management, (12) developing a succession plan for key
positions, (13) improved


    
      
         


      

      
        4 


        
          

        

      

      
         


      

    


    collaboration
among corporate functions and operating units, (14) developing new products and
product extensions, (15) improving the customer buying experience, (16) expand
distribution, (17) enhance brand and image, (18) developing new market
opportunities, (19) risk management, and (20) enhancing corporate
compliance.  In the sole discretion of the Committee, the Committee
may amend or adjust the Performance Measures or other terms and conditions of an
outstanding Award in recognition of unusual or nonrecurring events affecting the
Corporation or its financial statements or changes in law or accounting
principles.  Each goal described above may be expressed on an absolute
or relative basis, may be based on or otherwise employ comparisons based on
current internal targets, the past performance of the Corporation (including the
performance of one or more Subsidiaries, divisions or Operating Units) or the
past or current performance of other companies, and in the case of
earnings-based measures, may use or employ comparisons relating to capital
(including, but limited to, the cost of capital), stockholders' equity and/or
shares outstanding, or to assets or net assets.

    


    (p)           "Performance Period" means a
Fiscal Year or such other period as may be determined by the Board or the
Committee from time to time.

    


    (q)           "Restatement Date" means
February 17, 2010.

    


    (r)           "Retirement" means the
Participant's termination of employment with the Corporation and its
Subsidiaries after the attainment of age 65, or age 55 with ten years of
service with the Corporation or a Subsidiary, provided, however, that the Chief
Executive Officer, in his or her discretion, may waive or reduce the ten-year
service requirement with respect to a Participant.  Notwithstanding
the preceding sentence, only the Committee has discretion to waive or reduce the
ten-year service requirement with respect to the Chief Executive
Officer.

    


    (s)           "Stock Plan" means the HNI
Corporation 2007 Stock-Based Compensation Plan.

    


    (t)           "Target Performance Award"
means the dollar Award established for a Participant if the Performance Measure
applicable to the Participant is achieved.

    


    (u)           "Subsidiary" means any
corporation, joint venture, partnership, limited liability company,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest and directly or indirectly owns
or controls 50 percent or more of the total combined voting or other
decision-making power.

    


    2.2           Gender
and Number.  Except as otherwise indicated by context,
masculine terminology used herein also includes the feminine and neuter, and
terms used in the singular may also include the plural.

    


     

     


    
      
         


      

      
        5 


        
          

        

      

      
         


      

    

     

     

    III.           ELIGIBILITY AND
PARTICIPATION

    


    3.1           Eligibility.  Except
as otherwise provided in this Section 3, an employee of the Corporation or one
of its Subsidiaries will become a Participant for a particular Performance
Period to the extent designated by the Board, or by the Chief Executive Officer
if the Board delegates such authority to the Chief Executive
Officer.


    3.2           Participation.  The
Corporation will:  (i) notify each eligible employee who has been
selected to participate in the Plan for a Performance Period that he or she is a
Participant in the Plan for such Performance Period; and (ii) communicate in
writing to each Participant the Target Performance Award granted to the
Participant pursuant to Article 4 and the Performance Measure applicable to such
Participant for such Performance Period pursuant to Article 5.

    


    3.3           Participation
After Commencement of Performance Period.  An employee who
first becomes eligible to participate after the beginning of a particular
Performance Period will become a Participant for such Performance Period only in
accordance with this Section 3.2.  The Board, or the Chief Executive
Officer if the Board delegates such authority to the Chief Executive Officer,
may allow participation for a portion of such Performance Period for such
employee on such terms and conditions as the Board (or the Chief Executive
Officer) may determine.

    


    3.4           Missing
Persons.  Each Participant eligible to receive an Award shall
be obligated to keep the Corporation informed of his or her current address
until the Award has been paid to him or her.  If, after having made
reasonable efforts to do so, the Corporation is unable to locate the Participant
for purposes of making a distribution, the Award will be
forfeited.  If the missing Participant is located after the date of
the forfeiture, the Award will not be reinstated.

    


    IV.           AWARDS

     

    4.1           Earned
Performance Award.  Each eligible Participant may earn an
Earned Performance Award as hereinafter provided.  The performance of
the Operating Unit, or the Participant in the case of individual Performance
Measures, during a particular Performance Period will be measured using the
Performance Measures established for that Performance Period by the Board in
accordance with Section 5.  In the event the performance for the
Performance Period is below the minimum Performance Measure established
therefore, no Earned Performance Award will be paid to the Participant in
respect thereof.  In no event shall an Earned Performance Award exceed
$4,000,000 for any Fiscal Year.

    


    4.2           Target
Performance Award.  Each Participant shall be assigned a Target
Performance Award at the beginning of the Performance Period for the achievement
of organizational or individual Performance Measures, or a combination of the
two, as determined by the Board, during the Performance Period.  The
Target Performance Award will be expressed as a percentage of the Participant's
base pay at the time the Target Performance Award is assigned.  The
actual Award payable to a Participant at the end of the Performance Period will
be determined by applying the percentage achievement of the Performance
Measure(s) and


    
      
         


      

      
        6 


        
          

        

      

      
         


      

    


    multiplying
that result against the Target Performance Award to determine the Earned
Performance Award. 

    


    V.           PERFORMANCE
MEASURES

     

                 
 5.1           Performance
Measures.  The Board will approve for each Performance Period
the applicable Performance Measures.  Such Performance Measures may be
adjusted during a Performance Period to prevent dilution or enlargement of an
Award as a result of extraordinary events or circumstances as determined by the
Board or to exclude the effects of extraordinary, unusual or nonrecurring
events, changes in accounting principles, discontinued operations, acquisitions,
divestitures and material restructuring charges.

    


    5.2           162(m)
Employees.  Notwithstanding anything in the Plan to the
contrary, in the case of a Participant who is a 162(m) Employee, a Performance
Measure must be pre-established by the Committee, must be objective, and must
state, in terms of an objective formula or standard, the method for computing
the amount of compensation payable if the Performance Measure is
attained.  A Performance Measure is considered "pre-established" for
purposes of this paragraph if it is established in writing by the Committee no
later than 90 days after the commencement of a Performance Period, provided that
the outcome is substantially uncertain at the time the Committee actually
establishes the Performance Measure.  However, in no event will a
Performance Measure be considered to be pre-established if it is established
after 25 percent of a Performance Period has elapsed.  A Performance
Measure is considered "objective" if a third party having knowledge of the
relevant facts could determine whether the Performance Measure is
met.  A formula or standard is considered "objective" if a third party
having knowledge of the relevant performance results could calculate the amount
to be paid to the Participant.  No Award to a 162(m) Employee shall be
paid unless and until the Committee has certified that the Performance Measures
for the Performance Period have been satisfied.

    


    VI.           PAYMENT OF
AWARDS

    


    6.1           Time and
Form of Payment.  Subject to Sections 8 and 9, the value of the
Earned Performance Award with respect to a Performance Period will be paid on
the first day of the Corporation's March fiscal month following the end of the
Performance Period, provided the Participant is employed by the Operating Unit
as of the last day of such Performance Period.  Payment of the Earned
Performance Award shall be made in the form of cash.  However, the
Board (or to the extent such authority is delegated to the Committee, by the
Committee) may require that an Award (or portion thereof) be paid in the form of
shares of Incentive Stock granted by the Board under the Stock
Plan:  (i) at the Participant's request, in the amount indicated by
the Participant, subject to the Board (or Committee's) approval; or (ii) in the
amount of up to 50 percent of the Award in the event that the Board (or
Committee) determines, in its sole discretion, that the Participant's respective
stock ownership level under the Corporation's Executive Stock Ownership Policy
does not reflect appropriate progress toward such Participant's five-year goal
thereunder.  The number of shares of Incentive Stock to be paid shall
be determined by dividing the cash amount of the Award (or, portion thereof) by
the Fair Market Value (as determined pursuant to the Stock Plan) of a share of
the Corporation's common stock on the date the Award is paid.


    
      
         


      

      
        7 


        
          

        

      

      
         


      

    


    


    The Board
may reduce the amount of, or completely eliminate, an Earned Performance Award
otherwise payable to a Participant for a Performance Period if the Board
determines that due to the Participant's performance or behavior during or
immediately following such Performance Period the Participant should not be
entitled to the Earned Performance Award.

    


    6.2           Special
Rules for Chief Executive Officer and Chief Financial
Officer.  All Earned Performance Awards payable to the Chief
Executive Officer and Chief Financial Officer under the Plan are subject to
forfeiture as provided in Section 304 of the Sarbanes-Oxley Act of 2002, and the
implementing rules and regulations.

    


    VII.           TERMINATION OF
EMPLOYMENT

     

    7.1           Termination
Due to Death, Disability or Retirement.  If a Participant
terminates employment with the Corporation and its Subsidiaries due to death,
Disability, or Retirement occurring before the last day of a Performance Period,
the Participant's Earned Performance Award, if any, will be paid on the first
day the Corporation's March fiscal month following the end of the Performance
Period, and the value of such Award shall be equal to the product
of:  (i) the Earned Performance Award the Participant would have
received had the Participant remained employed through the end of the
Performance Period; multiplied by (ii) a fraction, the numerator of which is the
number of months in the Performance Period that occurred prior to such
termination of employment, and the denominator of which is the total number of
months in such Performance Period.  For these purposes, a Participant
will be credited with a month during a Performance Period only if he or she is
employed for at least 15 days during the month.

    


    7.2           Termination
Other than Due to Death, Disability or Retirement.  Except as
provided in Section 8, if a Participant's employment with the Corporation and
its Subsidiaries terminates for any reason other than death, Disability or
Retirement before the last day of a Performance Period, the Participant will not
be entitled to any payment or Award under the Plan unless otherwise determined
by the Board.

    


    VIII.           CHANGE IN
CONTROL

     

    In
connection with a Change in Control, the value of each Target Performance Award
shall be determined by the Board prior to the effective date of the Change in
Control, and each Participant's Target Performance Award will become payable
without proration within 30 days after such date.

    


    IX.           SALE OF OPERATING
UNIT

     

    9.1           Sale of
Subsidiary.  Except as provided in Article 8, in the event of a
Change in Control of a Subsidiary (determined by applying the "Change in
Control" definition set forth in Section 2.1(c) substituting the Subsidiary for
the Corporation) with respect to each Participant employed by such Subsidiary on
the date of the Change in Control, the value of each Award shall be determined
as of the date of the Change in Control by the Board based on the percentage
of


    
      
         


      

      
        8 


        
          

        

      

      
         


      

    


    the
Performance Measure completed as of the date of the Change in Control, the
number of months of the Performance Period completed at the date of the Change
in Control, the actual purchase price of the Subsidiary and such other factors
as the Board deems relevant in light of the circumstances of the
sale.  Payments pursuant to this Section 9 shall be made 60 days after
the date of the Change in Control.  For these purposes, a month will
be considered to have been completed at the time of the Change in Control only
if the Change in Control occurs later than the 14th day
of the month.

    


    9.2           Sale of
Other Operating Unit.  Except as provided in Article 8, in the
event of the sale of all or substantially all of the assets of an Operating Unit
that is not a Subsidiary, with respect to each Participant employed by such
Operating Unit on the date of the sale and who has a separation from service
with the Corporation due to such sale, the value of each Award shall be
determined as of the date of the sale by the Board based on the percentage of
the Performance Measure completed as of the date of the sale, the number of
months of the Performance Period completed at the date of the sale, the actual
purchase price of the Operating Unit and such other factors as the Board deems
relevant in light of the circumstances of the sale.  Payments pursuant
to this Section 9.2 shall be made 60 days after the date of the separation from
service.  For these purposes, a month will be considered to have been
completed at the time of the sale only if the sale occurs later than the 14th day
of the month.

    


    X.           TRANSFERS AND CHANGE IN
RESPONSIBILITIES

     

    If a
Participant's responsibilities materially change or the Participant is
transferred during a Performance Period to another Operating Unit or to a
position that is not designated or eligible to participate in the Plan, the
Corporation may, as determined by the Board,
either:  (a) continue the Participant's participation in the Plan
and establish a new Target Performance Award and Performance Measure for the
Participant with respect to his or her new position; or (b) terminate the
Participant's participation in the Plan and, as of the date of such change or
transfer, prorate the Participant's Target Performance Award on the basis of the
ratio of the number of months of the Participant's participation during the
Performance Period to which such Target Performance Award relates to the
aggregate number of months in such Performance Period.  For these
purposes, a Participant will be considered to have participated for a month
during a Performance Period only if he or she participated for at least 15 days
during the month.  If the Participant's participation in the Plan is
not terminated pursuant to (b), above, then the Participant's Earned Performance
Award will be prorated on the basis of the number of months of service by the
Participant at each Operating Unit during the Performance Period.  For
these purposes, a Participant will be credited with a month of service at an
Operating Unit only if he or she was employed by the Operating Unit for at least
15 days during the month.   Notwithstanding any provision of the
Plan to the contrary, no such change or transfer shall change the time or form
of payment of the Earned Performance Award.

    



    
      
         


      

      
        9 


        
          

        

      

      
         


      

    


    XI.           ADMINISTRATION

     

               11.1           Administration.  The
Plan shall be administered by the Board.  In addition to the other
powers granted under the Plan, the Board shall have all powers necessary to
administer the Plan, including, without limitation, powers:

    


    (a)           to
interpret the provisions of the Plan; and

    


    (b)           to
establish rules for the administration of the Plan and to prescribe any forms
required to administer the Plan.

    


    11.2           Actions
of the Board.  The Board has total and complete discretionary
authority to determine conclusively for all parties all questions arising in the
administration of the Plan, to interpret and construe the terms of the Plan, and
to determine all questions of eligibility and status of employees and
Participants under the Plan and their interests. All determinations,
interpretations, rules and decisions of the Board including those made or
established by any person or entity to whom the Board has delegated duties,
responsibilities or authority (if made or established pursuant to such
delegation), are conclusive and binding upon all persons having or claiming to
have any interest or right under the Plan.

     

    11.3           Delegation.  The
Board or any officer or other employee of the Corporation designated by the
Board, shall have the power to delegate specific duties and responsibilities to
officers or other employees of the Corporation or other individuals or
entities.  Any delegation may be rescinded by the Board at any
time.  Each person or entity to whom a duty or responsibility has been
delegated shall be responsible for the exercise of such duty or responsibility
and shall not be responsible for any act or failure to act of any other person
or entity.

    


    11.4           Expenses.  Each
Operating Unit shall reimburse the Corporation for the amount of the Award that
is awarded and paid to Participants for services to such Operating Unit, as
determined by the Board.

     

    11.5           Indemnification
and Exculpation.  The agents, officers, directors, and
employees of the Corporation and its Subsidiaries shall be indemnified and held
harmless by the Corporation against and from any and all loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by them in connection
with or resulting from any claim, action, suit, or proceeding to which they may
be a party or in which they may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
them in settlement (with the Corporation's written approval) or paid by them in
satisfaction of a judgment in any such action, suit or
proceeding.  The foregoing provision shall not be applicable to any
person if the loss, cost, liability, or expense is due to such person's gross
negligence or willful misconduct.

     

    11.6           Powers of
Committee.  The Board may delegate all or any part of its power
and authority under the Plan to the Committee.  Notwithstanding
anything in the Plan to the contrary, however, in the case of a 162(m) Employee,
the Committee shall have sole and exclusive

     


    
      
         


      

      
        10 


        
          

        

      

      
         


      

    


    authority
to:  (a) establish the Performance Measures for such employee; (b)
determine and certify the achievement of the Performance Measures for such
employee, and (iii) make any other discretionary decision affecting such
employee.  The administration of all aspects of the Plan applicable to
Awards to 162(m) Employees is intended to comply with the exception under
Section 162(m) of Code, as amended, for qualified performance-based compensation
and shall be construed, applied and administered accordingly.

     

    XII.           AMENDMENT AND
TERMINATION

    


    The Plan
may be amended or terminated from time to time by the Board.  In the
event the Plan is terminated before the last day of a Performance Period, the
Earned Performance Award otherwise payable for such Performance Period will be
prorated on the basis of the ratio of the number of months in such Performance
Period prior to such termination to the aggregate number of months in such
Performance Period and will be paid only after the end of such Performance
Period, which will be deemed to continue until the expiration thereof as if the
Plan had not been terminated.  For these purposes, a month will be
considered to have been completed at the time of the amendment or termination
only if the amendment or termination is effective later than the 14th day
of the month.

    


    The Plan will be terminated in the
event the shareholders of the Corporation approve a complete liquidation or
dissolution of the Corporation that will be taxed under Section 331 of the
Code.  In such case, the value of each Target Performance Award shall
be determined by the Board prior to the effective date of the dissolution, and
each Participant's Target Performance Award will become payable upon such
dissolution.

     

    XIII.           WITHHOLDING

    


    The Corporation may take such action as
it deems appropriate to withhold or collect from a Participant the applicable
federal, state, local or foreign payroll, withholding, income or other taxes
that are required to be withheld or collected by the Corporation or Subsidiary
upon the payment of an Award.  The Corporation may withhold shares of
Incentive Stock paid pursuant to Article 6 having a Fair Market Value equal to
the amount necessary to satisfy the Corporation's or Subsidiary's minimum
statutory withholding requirements upon the payment of an Award from Incentive
Stock that otherwise would have been delivered to a
Participant.   The Corporation may, subject to any terms and
conditions that the Board or Committee may adopt, permit a Participant to elect
to pay all or a portion of the minimum statutory income withholding taxes
by:  (a) having the Corporation withhold shares of Incentive Stock
otherwise to be delivered upon the payment of an Award with a Fair Market Value
equal to the amount of such taxes, or (b) paying cash.  Any such
election must be made on or before the date that the amount of tax to be
withheld is determined.  For purposes hereof, "Fair Market Value"
shall have the same meaning as in the Stock Plan.

     

    XIV.           MISCELLANEOUS

     

    14.1           No Rights
to Awards.  No employee, Participant or other person shall have
any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of

     


    
      
         


      

      
        11 


        
          

        

      

      
         


      

    


    treatment
of employees, Participants or holders or beneficiaries of Awards under the
Plan.  The terms and conditions of Awards need not be the same with
respect to any Participant or with respect to different
Participants.

     

    14.2           Rights as
Stockholder.  No person shall have any right as a stockholder
of the Corporation with respect to any shares or other equity security of the
Corporation which is granted pursuant to an Award hereunder unless and until
such person becomes a stockholder of record with respect to such shares or
equity security.

     

    14.3           Governing
Law.  The Plan, each Award hereunder, and all determinations
made and actions taken pursuant thereto, to the extent not otherwise governed by
the Code or the laws of the United States, shall be governed by the laws of the
State of Iowa and construed in accordance therewith without giving effect to
principles of conflicts of laws.

     

    14.4           No Limit
on Compensation Plans or Arrangements.  Nothing contained in
the Plan shall prevent the Corporation or a Subsidiary from adopting or
continuing in effect other or additional compensation plans or
arrangements.

     

    14.5           No Rights
to Employment.  The grant of an Award shall not be construed as
giving a Participant the right to be retained as an employee of the Corporation
or any Subsidiary, nor will it affect in any way the right of the Corporation or
a Subsidiary to terminate a Participant's employment at any time, with or
without cause.  In addition, the Corporation or a Subsidiary may at
any time dismiss a Participant from employment free from any liability or any
claim under the Plan, unless otherwise expressly provided in the
Plan.

     

    14.6           Severability.  If
any provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or would disqualify the Plan or any
Award under any law deemed applicable by the Board, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the Board,
materially altering the purpose or intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction or Award, and the remainder
of the Plan or any such Award shall remain in full force and
effect.

     

    14.7           No Trust
or Fund Created.  Neither the Plan
nor any Award shall create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Corporation or any Subsidiary
and a Participant or any other person.  To the extent that any person
acquires a right to receive payments from the Corporation or a Subsidiary
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Corporation or the Subsidiary.

    


    14.8           Securities
Matters.  The Corporation shall not be required to deliver any
Incentive Stock until the requirements of any federal or state securities or
other laws, rules or regulations (including the rules of any securities
exchange) as may be determined by the Corporation to be applicable are
satisfied.

     


    
      
         


      

      
        12 


        
          

        

      

      
         


      

    


    14.9           No
Fractional Shares.  No fractional shares of Stock shall be
issued or delivered pursuant to the Plan.  Any fractional share
otherwise payable under the Plan shall be settled in the form of
cash.

     

    14.10           Headings.  Headings
are given to the Articles, Sections and Subsections of the Plan solely as a
convenience to facilitate reference.  Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

    


    14.11           Nontransferability.  No
Award or other benefit payable at any time under the Plan will be subject in any
manner to alienation, sale, transfer, assignment, pledge, levy, attachment, or
encumbrance of any kind.

    


    14.12           No Other
Agreements.  The terms and conditions set forth herein
constitute the entire understanding of the Corporation, the Subsidiaries and the
Participants with respect to the matters addressed herein.

     

    14.13           Incapacity.  In
the event that any Participant is unable to care for his or her affairs because
of illness or accident, any payment due may be paid to the Participant's spouse,
parent, brother, sister, adult child, or other person deemed by the Corporation
to have incurred expenses for the care of the Participant, unless a duly
qualified guardian or other legal representative has been
appointed.

     

    14.14           Release.  Any
payment of benefits to or for the benefit of a Participant that is made in good
faith by the Corporation in accordance with the Corporation's interpretation of
its obligations hereunder, shall be in full satisfaction of all claims against
the Corporation and all Subsidiaries for benefits under the Plan to the extent
of such payment.

     

    14.15           Notices.  Any
notice permitted or required under the Plan shall be in writing and shall be
hand-delivered or sent, postage prepaid, by first class mail, or by certified or
registered mail with return receipt requested, to the Board, if to the
Corporation, or to the address last shown on the records of the Corporation, if
to a Participant.  Any such notice shall be effective as of the date
of hand-delivery or mailing.

     

    14.16           Successors.  All
obligations of the Corporation under the Plan shall be binding upon and inure to
the benefit of any successor to the Corporation, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business or assets of the
Corporation.

     

    


     

    


     


    
      
         


      

      
        13