exhibit10-28.htm


    EXHIBIT
10.28

    


    PEOPLES
BANCORP INC. ANNUAL REPORT ON FORM 10-K

    FOR
FISCAL YEAR ENDED DECEMBER 31, 2008

    


    PEOPLES
BANCORP INC.

    


    Amended
and Restated

    


    2006
Equity Plan

    


    THIS PLAN was adopted on the 9th day of
February, 2006, by the Board and approved by the shareholders of the Company on
April 13, 2006. Section 12.1 of this Plan was amended by the Board on June 8,
2006.  Section 5.7(b) of this Plan was amended by the Board on
February 8, 2007.  This Plan is hereby amended and restated effective
December 11, 2008.

    


    ARTICLE
I

    


    PURPOSE
AND EFFECTIVE DATE

    


    1.1           PURPOSE. The purpose of the
Plan is to provide financial incentives for selected Employees, Advisors and
Non-Employee Directors, thereby promoting the long-term growth and financial
success of the Company by (a) attracting and retaining Employees, Advisors and
Non-Employee Directors of outstanding ability, (b) strengthening the Company's
capability to develop, maintain, and direct a competent management team, (c)
providing an effective means for selected Employees, Advisor and Non-Employee
Directors to acquire and maintain ownership of Company Stock, (d) motivating
Employees to achieve long-range Performance Goals and objectives, and (e)
providing incentive compensation opportunities competitive with peer financial
institution holding companies.

    


    1.2           EFFECTIVE DATE AND EXPIRATION OF
PLAN. The Plan originally became effective on April 13,
2006.  Unless earlier terminated by the Board pursuant to Section
12.2, the Plan shall terminate on the tenth anniversary of its Effective Date.
No Award shall be made pursuant to the Plan after its termination date, but
Awards made prior to the termination date may extend beyond that date.
Notwithstanding the foregoing, no Incentive Stock Options may be granted after
February 8, 2017.

    


    ARTICLE
II

    


    DEFINITIONS

    


           The
following words and phrases, as used in the Plan, shall have the meanings set
forth in this section. When applying these definitions and any other word, term
or phrase used in this Plan, the form of any word, term or phrase will include
any and all of its other forms.

    


    2.1           ADVISORS means any advisor who
renders bona fide services to the Company and/or one or more of the Subsidiaries
as an advisory or marketing board member and who is neither an Employee nor a
director of the Company or any Subsidiary; provided that the services rendered
are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    2.2           AWARD means, individually or
collectively, any Option, SAR, Restricted Stock, Restricted Performance Stock,
unrestricted Company Stock or Performance Unit Award.

    


    2.3           AWARD AGREEMENT means the
written agreement between the Company and each Participant that describes the
terms and conditions of each Award. If there is a conflict between the terms of
the Plan and the Award Agreement, the terms of the Plan will
govern.

    


    2.4           BOARD means the Board of
Directors of the Company.

    


    2.5           CAUSE with respect to any
Participant, means: (a) Gross negligence or gross neglect of duties; or (b)
Commission of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Participant's employment or service, as the case may be,
with the Company or any of its Subsidiaries; or (c) Fraud, disloyalty,
dishonesty or willful violation of any law or significant Company policy
committed in connection with the Participant's employment or provision of
services, as the case may be; or (d) Issuance of an order for removal of the
Participant by any agency which regulates the activities of the Company or any
of its Subsidiaries.

    


    Any determination of "Cause" under this
Plan shall be made by the Committee in its sole discretion.

    


    2.6           COMPANY means Peoples Bancorp
Inc., an Ohio corporation.

    


    2.7           COMPANY DIRECTOR means a
non-employee member of the Board.

    


    2.8           COMPANY STOCK means the
Company's common shares, without par value per share.

    


    2.9           CODE means the Internal
Revenue Code of 1986, as amended or superseded after the Effective Date, and any
applicable rulings or regulations issued thereunder.

    


    2.10         COMMITTEE means the
Compensation Committee of the Board or a subcommittee thereof.

    


    2.11         DISABILITY means: (a) with
respect to an Incentive Stock Option, "disabled" within the meaning of Section
22(e)(3) of the Code; (b) with respect to any Award subject to Section 409A of
the Code, "disabled" as defined under Section 409A of the Code; and (c) with
respect to any Award not described in subsections (a) and (b) of this Section
2.11, a long-term disability as defined by the Company's or Subsidiary's group
disability insurance plan, or any successor plan that is applicable to such
Participant at the time of his or her Termination.

    


    
      
        
        

      

      
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    2.12           EFFECTIVE DATE means April 13,
2006, the date on which the Plan was approved by the shareholders of the
Company.

    


    2.13           EMPLOYEE means any person who,
on any applicable date, is a common law employee of the Company or any
Subsidiary. A worker who is classified as other than a common law employee but
who is subsequently reclassified as a common law employee of the Company or any
Subsidiary for any reason and on any basis will be treated as a common law
employee only from the date that reclassification occurs and will not
retroactively be reclassified as an Employee for any purpose of this
Plan.

    


    2.14           EXCHANGE ACT means the
Securities Exchange Act of 1934, as amended.

    


    2.15           EXERCISE PRICE means the
amount, if any, that a Participant must pay to exercise an Award (other than an
Option).

    


    2.16           FAIR MARKET VALUE means, as of
any specified date, an amount equal to the reported closing price on the
specified date of a share of Company Stock on NASDAQ or any other established
stock exchange or quotation system on which the Company Stock is then listed or
traded or, if no shares of Company Stock have been traded on such date, the
closing price of a share of Company Stock on NASDAQ or such other established
stock exchange or quotation system as reported on the first day prior thereto on
which shares of Company Stock were so traded. If the preceding sentence does not
apply, Fair Market Value shall be determined: (a) with respect to Nonqualified
Stock Options and SARs, by the Committee through the reasonable application of a
reasonable valuation method, taking into account all information material to the
value of the Company, that satisfies the requirements of Treasury Regulation §
1.409A-1(b)(5); and (b) with respect to any other Awards, in good faith by the
Committee using other reasonable means.

    


    2.17           FISCAL YEAR means the fiscal
year of the Company, which is the 52- or 53-week period ending on December
31.

    


    2.18           INCENTIVE STOCK OPTION means
an option within the meaning of Section 422 of the Code.

    


    2.19           NON-EMPLOYEE DIRECTOR means
either a Company Director or a Subsidiary Director.

    


    2.20           NONQUALIFIED STOCK OPTION
means an option granted under the Plan other than an Incentive Stock
Option.

    


    2.21           OPTION means either a
Nonqualified Stock Option or an Incentive Stock Option to purchase Company
Stock.

    


    2.22           OPTION PRICE means the price
at which Company Stock may be purchased under an Option.

    


    
      
        
        

      

      
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    2.23           PARTICIPANT means an Employee,
an Advisor or a Non-Employee Director to whom an Award has been made under the
Plan.

    


    2.24           PERFORMANCE GOALS means goals
established by the Committee pursuant to Section 4.5.

    


    2.25           PERFORMANCE PERIOD means a
period of time over which performance is measured.

    


    2.26           PERFORMANCE UNIT means the
unit of measure determined under Article IX by which is expressed the value of a
Performance Unit Award.

    


    2.27           PERFORMANCE UNIT AWARD means
an Award granted under Article IX.

    


    2.28           PERSONAL REPRESENTATIVE means
the person or persons who, upon the death, Disability, or incompetency of a
Participant, shall have acquired, by will or by the laws of descent and
distribution or by other legal proceedings, the right to exercise an Option or
SAR or the right to any Restricted Stock Award or Performance Unit Award
theretofore granted or made to such Participant.

    


    2.29           PLAN means the Peoples Bancorp
Inc. Amended and Restated 2006 Equity Plan.

    


    2.30           PREDECESSOR PLANS means the
Peoples Bancorp Inc. 2002 Stock Option Plan, as amended, the Peoples Bancorp
Inc. 1998 Stock Option Plan, the Peoples Bancorp Inc. 1995 Stock Option Plan and
the Amended and Restated Peoples Bancorp Inc. 1993 Stock Option
Plan.

    


    2.31           RESTRICTED PERFORMANCE STOCK
means Company Stock subject to Performance Goals.

    


    2.32           RESTRICTED STOCK means Company
Stock subject to the terms and conditions provided in Article VI and including
Restricted Performance Stock.

    


    2.33           RESTRICTED STOCK AWARD means
an Award granted under Article VI.

    


    2.34           RESTRICTION PERIOD means a
period of time determined under Section 6.2 during which Restricted Stock is
subject to the terms and conditions provided in Section 6.3.

    


    2.35           RETIREMENT means any normal or
early retirement by a Participant pursuant to the terms of any pension plan or
policy of the Company or any Subsidiary that is applicable to such Participant
at the time of the Participant's Termination.

    


    2.36           SAR means a stock appreciation
right granted under Section 5.7.

    


    2.37           SHAREHOLDERS mean the
shareholders of the Company.

    


    
      
        
        

      

      
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    2.38           SUBSIDIARY means any
corporation or other entity that is under common control with the Company, as
determined under Sections 414(b) and (c) of the Code, but modified as permitted
by Section 409A of the Code.

    


    2.39           SUBSIDIARY DIRECTOR means a
non-employee member of the board of directors of a Subsidiary who is not also a
Company Director.

    


    2.40           TERMINATION means a
"separation from service" as defined under Section 409A of the
Code.

    


    ARTICLE
III

    


    ADMINISTRATION

    


    3.1           COMMITTEE TO ADMINISTER. The
Plan shall be administered by the Committee, in accordance with its Charter, as
adopted from time to time by the Board; provided, however, that the Board has
the authority to grant Awards to Company Directors.

    


    3.2           
POWERS OF
COMMITTEE.

    


    (a)           The
Committee and the Board shall have full power and authority to interpret and
administer the Plan and to establish and amend rules and regulations for its
administration. Any action or decision by the Board or the Committee shall be
final, binding and conclusive with respect to the interpretation of the Plan and
any Award made under it.

    


    (b)           Subject
to the provisions of the Plan, the Committee or the Board, as the case may be,
shall have authority, in its discretion, to determine those Employees, Advisors
and Non-Employee Directors who shall receive an Award; the time or times when
such Award shall be made; the vesting schedule, if any, for the Award; and the
type of Award to be granted, the number of shares of Company Stock to be subject
to each Option and Restricted Stock Award, the value of each Performance Unit
and all other terms and conditions of any Award.

    


    (c)           The
Committee or the Board, as the case may be, shall determine and set forth in an
Award Agreement the terms of each Award, including such terms, restrictions, and
provisions as shall be necessary to cause certain Options to qualify as
Incentive Stock Options. The Committee or the Board, as the case may be, may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Award Agreement, in such manner and to the extent the Committee
or the Board, as appropriate, shall determine in order to carry out the purposes
of the Plan. The Committee or the Board, as the case may be, may, in its
discretion, accelerate (i) the date on which any Option or SAR may be exercised,
(ii) the date of termination of the restrictions applicable to a Restricted
Stock Award, or (iii) the end of a Performance Period under a Performance Unit
Award, if the Committee or the Board, as appropriate, determines that to do so
will be in the best interests of the Company and the Participants in the
Plan.

     

    
      
        
        

      

      
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    ARTICLE
IV

    


    AWARDS

    


    4.1           AWARDS. Awards under the Plan
shall consist of Incentive Stock Options, Nonqualified Stock Options, SARs,
Restricted Stock, Restricted Performance Stock, unrestricted Company Stock and
Performance Units.  All Awards shall be subject to the terms and
conditions of the Plan and to such other terms and conditions consistent with
the Plan as the Committee or the Board, as the case may be, deems
appropriate.  Awards under a particular section of the Plan need not
be uniform and Awards under two or more sections may be combined in one Award
Agreement. Any combination of Awards may be granted at one time and on more than
one occasion to the same Employee, Advisor or Non-Employee Director. Awards of
Performance Units and Restricted Performance Stock shall be earned solely upon
attainment of Performance Goals and the Committee shall have no discretion to
increase such Awards.

    


    4.2           ELIGIBILITY FOR AWARDS. An
Award may be made to any Employee or Advisor selected by the Committee. In
making this selection and in determining the form and amount of the Award, the
Committee may give consideration to the functions and responsibilities of the
respective Employee and/or Advisor, his or her present and potential
contributions to the success of the Company or any of its Subsidiaries, the
value of his or her services to the Company or any of its Subsidiaries, and such
other factors deemed relevant by the Committee. Non-Employee Directors are
eligible to receive Awards pursuant to Article VII.

    


    4.3           SHARES AVAILABLE UNDER THE
PLAN.

    


    (a)           The
Company Stock to be offered under the Plan pursuant to Options, SARs,
Performance Unit Awards, Restricted Performance Stock and Restricted Stock and
unrestricted Company Stock Awards must be (i) Company Stock previously issued
and outstanding and reacquired by the Company or (ii) authorized but unissued
Company Stock not reserved for any other purpose. Subject to adjustment under
Section 12.1, the number of shares of Company Stock that may be issued pursuant
to Awards under the Plan (the "Section 4.3 Limit") shall not exceed, in the
aggregate, 500,000 shares.

    


    (b)           Any
shares of Company Stock subject to Restricted Stock or unrestricted Company
Stock Awards shall not exceed 50% of the total shares available under the Plan
and the maximum number of shares of Company Stock that may be issued subject to
Incentive Stock Options is 500,000 subject to adjustment under Section 12.1. The
Section 4.3 Limit shall not have counted against it: (i) the number of shares of
Company Stock subject to an Option or any other Award which is equal to the
number of shares of Company Stock tendered by a Participant to the Company in
payment of the Option Price of such Option or the Exercise Price of such other
Award, as applicable; (ii) shares of Company Stock subject to an Award which for
any reason terminates by expiration, forfeiture, cancellation or otherwise
without having been exercised or paid; (iii) shares of Company Stock withheld
from any Award to satisfy a Participant's tax withholding obligations or, if
applicable, to pay the Option Price of an Option or the Exercise Price of any
other Award; (iv) if a SAR is settled in whole or in part by the issuance of
shares of Company Stock, the number of shares of Company Stock which represents
the difference between (A) the number of shares of Company Stock which remain
subject to such SAR on the date of such settlement and (B) the number of shares
of Company Stock actually issued upon settlement of such SAR; or (v) the number
of shares of Company Stock subject to an Option which is equal to the number of
shares of Common Stock acquired by the Company on the open market using the cash
proceeds received by the Company from the exercise of such Option; provided,
however, that such number of shares of Company Stock shall in no event be
greater than the number which is determined by dividing (A) the amount of cash
proceeds received by the Company from the Participant upon the exercise of such
Option by (B) the Fair Market Value of a share of the Company Stock on the date
of exercise of such Option.

    


    
      
        
        

      

      
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    (c)           No
awards shall be granted under any Predecessor Plan on and after April 13,
2006.

    


    4.4           LIMITATION ON AWARDS. The
maximum aggregate dollar value of, and the maximum number of shares of Company
Stock subject to, Restricted Stock and Performance Units awarded to any Employee
or Advisor with respect to a Performance Period or Restriction Period may not
exceed $500,000 and 500,000 shares of Company Stock for each Fiscal Year
included in such Performance Period or Restriction Period.

    


    The maximum number of shares of Common
Stock for which Options or SARs may be granted to any Participant in any one
Fiscal Year shall not exceed 500,000 subject to adjustment under Section
12.1.

    


    4.5         
GENERAL PERFORMANCE
GOALS.

    


    (a)           Performance
Goals relating to the payment or vesting of an Award that is intended to qualify
as "performance-based compensation" under Section 162(m) of the Code will be
comprised of one or more of the following performance criteria as the Committee
may deem appropriate:

    


    (i)      Earnings
per share (actual or targeted growth);

    


    (ii)     Net
income after capital costs;

    


    (iii)    Net
income (before or after taxes);

    


    (iv)           Return
measures (including, but not limited to, return on averageassets, risk-adjusted
return on capital, or return on average equity);

    


    (v)      Efficiency
ratio;

    


    (vi)     Full-time
equivalency control;

    


    (vii)    Stock
price (including, but not limited to, growth measures and totalshareholder
return);

    


    
      
        
        

      

      
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    (viii)   Noninterest
income compared to net interest income ratio;

    


    (ix)     Expense
targets;

    


    (x)      Operating
efficiency;

    


    (xi)     EVA(R);

    


    (xii)    Credit
quality measures;

    


    (xiii)                     Customer
satisfaction measures;

    


    (xiv)    Loan
growth;

    


    (xv)     Deposit
growth;

    


    (xvi)    Net
interest margin;

    


    (xvii)   Fee
income; and

    


    (xviii)  Operating
expense.

    


    (b)           For
any Awards not intended to qualify as "performance-based compensation" under
Section 162(m) of the Code, the Committee may establish Performance Goals based
on the performance criteria listed in Section 4.5(a) or other performance
criteria as it deems appropriate.

    


    (c)           Any
of the performance criteria listed in Section 4.5(a) may be applied solely with
reference to the Company and/or any Subsidiary or relatively between the Company
and/or any Subsidiary and one or more unrelated entities. In addition, different
performance criteria may be applied to individual Participants or to groups of
Participants and, as specified by the Committee, may be based on results
achieved (i) separately by the Company or any Subsidiary, (ii) any combination
of the Company and the Subsidiaries or (iii) any combination of business units
or divisions of the Company and the Subsidiaries.

    


    (d)           With
respect to each Performance Period, the Committee will establish the Performance
Goals in writing no later than the earlier of (i) 90 days after the beginning of
the Performance Period or (ii) expiration of 25 percent of the Performance
Period.

    


    (e)           Except
as otherwise provided in the Plan or the Award Agreement, as of the end of each
Performance Period, the Committee will certify in writing the extent to which a
Participant has or has not met the Participant's Performance Goal. To the extent
permitted under Section 162(m) of the Code, if applicable, the Committee may
disregard or offset the effect of any special charges or gains or cumulative
effect of a change in accounting in determining the attainment of Performance
Goals.

    


    
      
        
        

      

      
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    (f)           To
the extent permitted under Section 162(m) of the Code, if applicable, the
Committee shall make (i) appropriate adjustments to performance criteria to
reflect the effect on any performance criteria of any stock dividend or stock
split affecting Company Stock, recapitalization, merger, consolidation,
combination, spin-off, distribution of assets to Shareholders, exchange of
shares or similar corporate change and (ii) similar adjustments to any portion
of performance criteria that is not based on Company Stock but which is affected
by an event having an effect similar to those just described.

    


    ARTICLE
V

    


    OPTIONS
AND STOCK APPRECIATION RIGHTS

    


    5.1           AWARD OF OPTIONS. The
Committee may, from time to time, and on such terms and conditions as the
Committee may prescribe, award: (a) Incentive Stock Options, subject to Section
5.5, to any eligible Employee of the Company (or any subsidiary or parent
corporation within the meaning of Sections 424(e) and (f) of the Code); and (b)
Nonqualified Stock Options to any Employee or Advisor.

    


    5.2           PERIOD OF OPTION.

    


    (a)           An
Option granted under the Plan shall be exercisable only in accordance with the
vesting schedule approved by the Committee. The Committee may in its discretion
prescribe additional conditions, restrictions or terms on the vesting of an
Option, including the full or partial attainment of Performance Goals pursuant
to Section 4.5. After the Option vests, the Option may be exercised at any time
during the term of the Option, in whole or in installments, as specified in the
related Award Agreement. Subject to Article X and except as provided in Section
5.5, the duration of each Option shall not be more than ten years from the date
of grant.

    


    (b)           Except
as provided in Article X, a Participant may not exercise an Option unless such
Participant is then, and continually (except for sick leave, military service,
or other approved leave of absence) after the grant of the Option has been, an
Employee, Advisor, or Non-Employee Director.

    


    5.3           AWARD
AGREEMENT.  Each Option shall be evidenced by an Award
Agreement. The Award Agreement shall specify whether the Option is intended to
be an Incentive Stock Option or a Nonqualified Stock Option.

    


    5.4           OPTION PRICE, EXERCISE AND
PAYMENT.

    


    (a)           Except
as provided in Section 5.5, the Option Price of Company Stock under each Option
shall be determined by the Committee but shall be a price not less than 100
percent of the Fair Market Value of Company Stock at the date such Option is
granted.

    


    (b)           Subject
to Section 12.2, the Committee may not (i) amend an Option to reduce its Option
Price, (ii) cancel an Option and regrant an Option with a lower Option Price
than the original Option Price of the cancelled Option, or (iii) take any other
action (whether in the form of an amendment, cancellation or replacement grant)
that has the effect of "repricing" an Option, as defined under applicable NASDAQ
rules or the rules of the established stock exchange or quotation system on
which the Company Stock is then listed or traded.

    


    
      
        
        

      

      
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    (c)           Vested
Options may be exercised from time to time by giving written notice to the Chief
Financial Officer of the Company or the Secretary of the Committee, or his or
her designee, specifying the number of shares to be purchased.  The
notice of exercise shall be accompanied by payment in full of the Option Price
in cash or the Option Price may be paid in whole or in part through the transfer
to the Company of shares of Company Stock in accordance with procedures
established by the Committee from time to time. In addition, in accordance with
the rules and procedures established by the Committee for this purpose, an
Option may also be exercised through a cashless exercise procedure involving a
broker or dealer, that affords Participants the opportunity to sell immediately
some or all of the shares underlying the exercised portion of the Option in
order to generate sufficient cash to pay the Option Price and/or to satisfy
withholding tax obligations related to the Option.

    


    (d)           In
the event such Option Price is paid, in whole or in part, with shares of Company
Stock, the portion of the Option Price so paid shall be equal to the value, as
of the date of exercise of the Option, of such shares. The value of such shares
shall be equal to the number of such shares multiplied by the Fair Market Value
of such shares on the trading day coincident with the date of exercise of such
Option (or the immediately preceding trading day if the date of exercise is not
a trading day). The Company shall not issue or transfer Company Stock upon
exercise of an Option until the Option Price is fully paid.

    


    5.5           LIMITATIONS ON INCENTIVE STOCK
OPTIONS. Each provision of the Plan and each Award Agreement relating to
an Incentive Stock Option shall be construed so that each Incentive Stock Option
shall be an incentive stock option as defined in Section 422 of the Code, and
any provisions of the Award Agreement that cannot be so construed shall be
disregarded.  No Incentive Stock Option may be granted to any Employee
who, at the time of such grant, owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company (or any
subsidiary or parent corporation within the meaning of Sections 424(e) and (f)
of the Code) unless: (a) the Option Price for such Incentive Stock Option is at
least 110 percent of the Fair Market Value of a share of Company Stock on the
date the Incentive Stock Option is granted; and (b) such Incentive Stock Option
may not be exercised more than five years after it is granted. Notwithstanding
anything in the Plan to the contrary, to the extent required by the Code, the
exercise of Incentive Stock Options granted under the Plan shall be subject to
the $100,000 calendar year limit as set forth in Section 422 of the Code;
provided that, to the extent any grant exceeds such $100,000 calendar year
limit, the portion of such granted Option shall be deemed a Nonqualified Stock
Option in accordance with Section 422 of the Code.

    


    5.6           RIGHTS AND PRIVILEGES. A
Participant shall have no rights as a Shareholder with respect to any shares of
Company Stock covered by an Option until the issuance of such shares to the
Participant.

    


    
      
        
        

      

      
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    5.7           AWARD OF SARs.

    


    (a)           The
Committee may, from time to time, and on such terms and conditions as the
Committee may prescribe, award SARs to any Employee and/or Advisor.

    


    (b)           A
SAR shall represent the right to receive payment of an amount equal to: (i) the
amount by which the Fair Market Value of one share of Company Stock on the date
of exercise of the SAR exceeds the Exercise Price; multiplied by (ii) the number
of shares covered by the SAR.  Payment of the amount to which a
Participant is entitled upon the exercise of a SAR shall be made in cash,
Company Stock, or partly in cash and partly in Company Stock at the discretion
of the Committee. The shares shall be valued at their Fair Market Value on the
date of exercise.

    


    (c)           SARs
awarded under the Plan shall be evidenced by an Award Agreement between the
Company and the Participant.

    


    (d)           The
Committee may prescribe conditions and limitations on the exercise of any SAR.
SARs may be exercised only when the Fair Market Value of a share of Company
Stock exceeds the Exercise Price.

    


    (e)           A
SAR shall be exercisable only by written notice to the Chief Financial Officer
of the Company or the Secretary of the Committee, or his or her
designee.

    


    (f)           To
the extent not previously exercised, all SARs shall automatically be exercised
on the last trading day prior to their expiration, so long as the Fair Market
Value of a share of Company Stock exceeds the Exercise Price, unless prior to
such day the holder instructs the Chief Financial Officer or Secretary, Stock
Option Committee otherwise in writing.

    


    (g)           Subject
to Article X, each SAR shall expire on a date determined by the Committee at the
time of grant.

    


    ARTICLE
VI

    


    RESTRICTED
STOCK

    


    6.1           AWARD OF RESTRICTED STOCK. The
Committee may make a Restricted Stock Award to any Employee and/or Advisor,
subject to this Article VI and to such other terms and conditions as the
Committee may prescribe.

    


    6.2           RESTRICTION PERIOD. At the
time of making a Restricted Stock Award, the Committee shall establish the
Restriction Period applicable to such Award. The Committee may establish
different Restriction Periods from time to time and each Restricted Stock Award
may have a different Restriction Period, in the discretion of the Committee.
Restriction Periods, when established for a Restricted Stock Award, shall not be
changed except as permitted by Section 6.3.

    


    6.3           OTHER TERMS AND CONDITIONS.
Company Stock, when awarded pursuant to a Restricted Stock Award, will be
represented in a book entry account in the name of the Participant who receives
the Restricted Stock Award. The Participant shall be entitled to receive
dividends during the Restriction Period and shall have the right to vote such
Restricted Stock and shall have all other Shareholder rights, with the exception
that (i) unless otherwise provided by the Committee, if any dividends are paid
in shares of Company Stock, those shares will be subject to the same
restrictions as the shares of Restricted Stock with respect to which they were
issued, (ii) the Participant will not be entitled to delivery of any stock
certificate evidencing the Company Stock underlying the Restricted Stock Award
during the Restriction Period, (iii) the Company will retain custody of the
Restricted Stock during the Restriction Period, and (iv) a breach of a
restriction or a breach of the terms and conditions established by the Committee
pursuant to the Restricted Stock Award will cause a forfeiture of the Restricted
Stock Award. The Committee may, in addition, prescribe additional restrictions,
terms, or conditions upon or to the Restricted Stock Award including the
attainment of Performance Goals in accordance with Section 4.5.

    


    
      
        
        

      

      
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    6.4           RESTRICTED STOCK AWARD
AGREEMENT.  Each Restricted Stock Award shall be evidenced by
an Award Agreement.

    


    6.5           PAYMENT FOR RESTRICTED
STOCK.  Restricted Stock Awards may be made by the Committee
under which the Participant shall not be required to make any payment for the
Company Stock or, in the alternative, under which the Participant, as a
condition to the Restricted Stock Award, shall pay all (or any lesser amount
than all) of the Fair Market Value of the Company Stock, determined as of the
date the Restricted Stock Award is made. If the latter, such purchase price
shall be paid in cash as provided in the Award Agreement.

    


    ARTICLE
VII

    


    AWARDS
FOR NON-EMPLOYEE DIRECTORS

    


    7.1           AWARDS TO NON-EMPLOYEE
DIRECTORS. The Board shall determine all Awards to Company Directors and
the Committee shall determine all Awards to Subsidiary Directors. The Board or
the Committee, as the case may be, retains the discretionary authority to make
Awards to Non-Employee Directors and any type of Award (other than Incentive
Stock Options) may be granted to Non-Employee Directors under this Plan. All
such Awards shall be subject to the terms and conditions of the Plan and to such
other terms and conditions consistent with the Plan as the Board or the
Committee, as the case may be, deems appropriate.

    


    7.2           NO RIGHT TO CONTINUANCE AS A
DIRECTOR. None of the actions of the Company in establishing the Plan,
the actions taken by the Company, the Board, or the Committee under the Plan, or
the granting of any Award under the Plan shall be deemed (i) to create any
obligation on the part of the Board or the board of directors of the applicable
Subsidiary to nominate any Non-Employee Director for reelection or (ii) to be
evidence of any agreement or understanding, express or implied, that the
Non-Employee Director has a right to continue as a Non-Employee Director for any
period of time or at any particular rate of compensation.

    


    
      
        
        

      

      
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    ARTICLE
VIII

    


    UNRESTRICTED
COMPANY STOCK AWARDS FOR EMPLOYEES AND/OR ADVISORS

    


    8.1           The
Committee may make awards of unrestricted Company Stock to Employees and/or
Advisors on such terms and conditions as the Committee may
prescribe.

    


    


    ARTICLE
IX

    


    AWARD
OF PERFORMANCE UNITS

    


    9.1           AWARD OF PERFORMANCE UNITS.
The Committee may award Performance Units to any Employee and/or Advisor. Each
Performance Unit shall represent the right of a Participant to receive an amount
equal to the value of the Performance Unit, determined in the manner established
by the Committee at the time of Award.

    


    9.2           PERFORMANCE PERIOD. At the
time of each Performance Unit Award, the Committee shall establish, with respect
to each such Award, a Performance Period during which performance shall be
measured. There may be more than one Performance Unit Award in existence at any
one time, and Performance Periods may differ.

    


    9.3           PERFORMANCE MEASURES.
Performance Units shall be awarded to a Participant and earned contingent upon
the attainment of Performance Goals in accordance with Section 4.5.

    


    9.4           PERFORMANCE UNIT VALUE. Each
Performance Unit shall have a maximum dollar value established by the Committee
at the time of the Award. Performance Units earned will be determined by the
Committee in respect of a Performance Period in relation to the degree of
attainment of Performance Goals. The measure of a Performance Unit may, in the
discretion of the Committee, be equal to the Fair Market Value of one share of
Company Stock.

    


    9.5           AWARD CRITERIA. In determining
the number of Performance Units to be granted to any Participant, the Committee
shall take into account the Participant's responsibility level, performance,
potential, cash compensation level, other incentive awards, and such other
considerations as it deems appropriate.

    


    9.6           PAYMENT.

    


    (a)           Following
the end of the applicable Performance Period, a Participant holding Performance
Units will be entitled to receive payment of an amount, not exceeding the
maximum value of the Performance Units, based on the achievement of the
Performance Goals for such Performance Period, as determined by the
Committee.

    


    (b)           Awards
may be paid in cash or stock, or any combination thereof, as determined by the
Committee. Payment shall be made in a lump sum [or in installments] and shall be
subject to such other terms and conditions as shall be determined by the
Committee.

    


    
      
        
        

      

      
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    9.7           PERFORMANCE UNIT AWARD
AGREEMENTS. Each Performance Unit Award shall be evidenced by an Award
Agreement.

    


    


    


    


    


    ARTICLE
X

    


    GENERAL
TERMINATION PROVISIONS

    


    10.1           TERMINATION. Subject to
Article XI and unless otherwise specified in the applicable Award Agreement, the
following provisions will govern the treatment of a Participant's outstanding
Awards following a Participant's Termination.

    


    (a)           If
the Participant's Termination is due to death, Disability or Retirement, all of
the Participant's outstanding Options, SARs or Restricted Stock Awards shall
become fully vested and, if applicable, exercisable. Upon the Participant's
Termination for any other reason, any Awards that are not vested and/or
exercisable on the date of such Termination will immediately terminate and be of
no further force and effect.

    


    (b)           If
the Participant Terminates for any reason other than (i) death, (ii) Disability,
(iii) Retirement or (iv) discharge for Cause, such Participant's outstanding
SARs or Options may be exercised at any time within three months after such
Termination, to the extent of the number of shares covered by such Options or
SARs which are exercisable at the date of such Termination; except that an
Option or SAR shall not be exercisable on any date beyond the expiration date of
such Option or SAR.

    


    (c)           Upon
a Termination for Cause, any Options or SARs held by the Participant (whether or
not then exercisable) shall expire and any rights thereunder shall terminate
immediately. Any non-vested Restricted Stock Awards of such Participant shall
immediately be forfeited and any rights thereunder shall terminate.

    


    (d)           Upon
a Termination due to the Participant's death, any SARs or Options that are then
exercisable may be exercised by the Participant's Personal Representative at any
time before the earlier of (i) one year after the Participant's death or (ii)
the expiration date of the Award.

    


    (e)           Upon
a Termination due to the Participant's Disability or Retirement, any SARs or
Options that are then exercisable may be exercised by the Participant at any
time before the earlier of (i) one year after the date of such Termination or
(ii) the expiration date of the Award; provided, however, that an Option which
is intended to qualify as an Incentive Stock Option will only be treated as such
to the extent it complies with the requirements of Section 422 of the
Code.

    (f)           If
a Participant who Terminates due to Retirement dies prior to exercising all of
his or her outstanding Options or SARs, then such Options or SARs may be
exercised by the Participant's Personal Representative at any time before the
earlier of (i) one year after the Participant's death or (ii) the expiration
date of the Award; provided, however, that, an Option which is intended to
qualify as an Incentive Stock Option will only be treated as such to the extent
it complies with the requirements of Section 422 of the Code.

    


    
      
        
        

      

      
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    (g)           Subject
to Article XI, a Performance Unit Award shall terminate for all purposes if the
Participant Terminates at any time during the applicable Performance Period,
except as may otherwise be determined by the Committee. In the event that a
Participant holding a Performance Unit Terminates following the end of the
applicable Performance Period but prior to full payment according to the terms
of the Performance Unit Award, the Performance Unit Award shall terminate except
when the Termination is due to death, Disability or Retirement.

    


    ARTICLE
XI

    


    CHANGE
IN CONTROL OF THE COMPANY

    


    11.1           CONTRARY PROVISIONS.
Notwithstanding anything contained in the Plan to the contrary, the provisions
of this Article XI shall govern and supersede any inconsistent terms or
provisions of the Plan.

    


    11.2           DEFINITION OF CHANGE IN
CONTROL. For purposes of this Plan, Change in Control shall mean a change
in the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company within the meaning of Section
409A of the Code.

    


    11.3           EFFECT OF CHANGE IN CONTROL ON
CERTAIN AWARDS.

    


    (a)           If
the Company is not the surviving corporation following a Change in Control, and
the surviving corporation following such Change in Control or the acquiring
corporation (such  surviving corporation or acquiring corporation is
hereinafter referred to as the "Acquiror") does not assume the outstanding
Options, SARs, Restricted Stock, Restricted Performance Stock or Performance
Units or does not substitute equivalent equity awards relating to the securities
of such Acquiror or its affiliates for such Awards, then all such Awards shall
become immediately and fully exercisable (or in the case of Restricted Stock,
fully vested and all restrictions will immediately lapse). In the case of
Restricted Performance Stock and Performance Units, the target payout
opportunities under all outstanding Awards of Restricted Performance Stock and
Performance Units shall be deemed to have been fully earned based on targeted
performance being attained as of the effective date of the Change in Control. In
addition, the Board or its designee may, in its sole discretion, provide for a
cash payment to be made to each Participant for the outstanding Restricted
Stock, Restricted Performance Stock or Performance Units upon the consummation
of the Change in Control, determined on the basis of the Fair Market Value that
would be received in such Change in Control by the holders of the Company's
securities relating to such Awards. Notwithstanding the foregoing, any Option
intended to be an Incentive Stock Option under Section 422 of the Code shall be
adjusted in a manner to preserve such status.

    


    
      
        
        

      

      
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    (b)           If
the Company is the surviving corporation following a Change in Control, or the
Acquiror assumes the outstanding Options, SARs, Restricted Stock, Restricted
Performance Stock or Performance Units or substitutes equivalent equity awards
relating to the securities of such Acquiror or its affiliates for such Awards,
then all such Awards or such substitutes therefor shall remain outstanding and
be governed by their respective terms and the provisions of the
Plan.

    


    (c)           If
(i) a Participant Terminates without Cause within twenty-four (24) months
following a Change in Control, and (ii) the Company is the surviving corporation
following such Change in Control, or the Acquiror assumes the outstanding
Options, SARs, Restricted Stock, Restricted Performance Stock or Performance
Units or substitutes equivalent equity awards relating to the securities of such
Acquiror or its affiliates for such Awards, then all outstanding Options, SARs,
Restricted Stock, Restricted Performance Stock or Performance Units shall become
immediately and fully exercisable (or in the case of Restricted Stock, fully
vested and all restrictions will immediately lapse). In the case of Restricted
Performance Stock and Performance Units, the target payout opportunities under
all outstanding Awards of Restricted Performance Stock and Performance Units
shall be deemed to have been fully earned based on targeted performance being
attained.

    


    (d)           If
(i) the employment of a Participant with the Company and its Subsidiaries is
terminated for Cause within twenty-four (24) months following a Change in
Control and (ii) the Company is the surviving corporation following such Change
in Control, or the Acquiror assumes the outstanding Options, SARs, Restricted
Stock, Restricted Performance Stock, or Performance Units or substitutes
equivalent equity awards relating to the securities of such Acquiror or its
affiliates for such Awards, then any Options or SARs of such Participant shall
expire, and any non-vested Restricted Stock, Restricted Performance Stock or
Performance Units shall be forfeited, and any rights under such Awards shall
terminate immediately.

    


    (e)           Outstanding
Options or SARs which vest in accordance with Section 11.3, may be exercised by
the Participant in accordance with Article X; provided, however, that a
Participant whose Options or SARs become exercisable in accordance with Section
11.3(c) may exercise such Options or SARs at any time within one year after such
Termination, except that an Option or SAR shall not be exercisable on any date
beyond the expiration date of such Option or SAR.

    


    In the event of a Participant's death
after such Termination, the exercise of Options and SARs shall be treated in the
same manner as determined for Retirement in Section 10.1(e).

    


    11.4           AMENDMENT OR TERMINATION. This
Article XI shall not be amended or terminated at any time if any such amendment
or termination would adversely affect the rights of any Participant under the
Plan.

    


    
      
        
        

      

      
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    ARTICLE
XII

    


    MISCELLANEOUS
PROVISIONS

    


    12.1           ADJUSTMENTS UPON CHANGES IN
STOCK. In case of any reorganization, recapitalization, reclassification,
stock split, stock dividend, distribution, combination of shares, merger,
consolidation, rights offering, or any other changes in the corporate structure
or shares of the Company, appropriate adjustments shall be made by the Committee
or the Board, as the case may be, (or if the Company is not the surviving
corporation in any such transaction, the board of directors of the surviving
corporation) in the aggregate number and kind of shares subject to the Plan, and
the number and kind of shares and the Option Price per share subject to
outstanding Options or which may be issued under outstanding Restricted Stock
Awards or pursuant to unrestricted Company Stock Awards. Appropriate adjustments
shall also be made by the Committee or the Board, as the case may be, in the
terms of any Awards under the Plan, subject to Article XI, to reflect such
changes and to modify any other terms of outstanding Awards on an equitable
basis. Any such adjustments made by the Committee or the Board pursuant to this
Section 12.1 shall be conclusive and binding for all purposes under the
Plan.  Any adjustments made pursuant to this Section 12.1 shall be
made consistent with requirements of Sections 409A of the Code, to the extent
applicable.

    


    12.2           AMENDMENT, SUSPENSION, AND
TERMINATION OF PLAN.

    


    (a)           The
Board may suspend or terminate the Plan or any portion thereof at any time, and
may amend the Plan from time to time in such respects as the Board may deem
advisable in order that any Awards thereunder shall conform to any change in
applicable laws or regulations or in any other respect the Board may deem to be
in the best interests of the Company; provided, however, that no such amendment
shall, without approval, (i) except as provided in Section 12.1, increase
the  number of shares of Company Stock which may be issued under the
Plan, (ii) expand the types of awards available to Participants under the Plan,
(iii) materially expand the class of employees and/or Advisors eligible to
participate in the Plan, (iv) materially change the method of determining the
Option Price of Options; (v) delete or limit the provision in Section 5.4
prohibiting the repricing of Options; (vi) extend the termination date of the
Plan or (vii) be made to the extent that Shareholder approval is required to
satisfy applicable law, regulation or any securities stock exchange, market or
other quotation system on or through which the Company Stock is listed or
traded. No such amendment, suspension, or termination shall materially adversely
alter or impair any outstanding Options, SARs, shares of Restricted Stock, or
Performance Units without the consent of the Participant affected
thereby.

    


    (b)           The
Committee may amend or modify any outstanding Options, SARs, Restricted Stock
Awards, or Performance Unit Awards in any manner to the extent that the
Committee would have had the authority under the Plan initially to award such
Options, SARs, Restricted Stock Awards, or Performance Unit Awards as so
modified or amended, including without limitation, to change the date or dates
as of which such Options or SARs may be exercised, to remove the restrictions on
shares of Restricted Stock, or to modify the manner in which Performance Units
are determined and paid.   Notwithstanding the foregoing, any
amendment or modification of an Option or SAR shall be made in accordance with
the requirements of Section 409A of the Code, to the extent
applicable.

    


    (c)           Notwithstanding
the foregoing, the Plan and any Award Agreements may be amended without any
additional consideration to affected Participants to the extent necessary to
comply with, or avoid penalties under, Section 409A of the Code, even if those
amendments reduce, restrict or eliminate rights granted prior to such
amendments.

    


    
      
        
        

      

      
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    12.3           NONUNIFORM DETERMINATIONS. The
Committee's (or, if applicable, the Board's) determinations under the Plan,
including without limitation, (a) the determination of the Employees, Advisor
and Non-Employee Directors to receive Awards, (b) the form, amount, and timing
of any Awards, (c) the terms and provisions of any Awards and (d) the Award
Agreements evidencing the same, need not be uniform and may be made by it
selectively among Employees, Advisor and/or Non-Employee Directors who receive,
or who are eligible to receive, Awards under the Plan, whether or not such
Employees, Advisors and/or Non-Employee Directors are similarly
situated.

    


    12.4           GENERAL
RESTRICTION.  Each Award under the Plan shall be subject to the
condition that, if at any time the Committee shall determine that (a) the
listing, registration, or qualification of the shares of Company Stock subject
or related thereto upon NASDAQ or any other  established stock
exchange, market or quotation system or under any state or federal law, (b) the
consent or approval of any government or regulatory body, or (c) an agreement by
the Participant with respect thereto, is necessary, then such Award shall not
become exercisable in whole or in part unless such listing, registration,
qualification, consent, approval, or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.

    


    12.5           NO RIGHT TO EMPLOYMENT. None
of the actions of the Company in establishing the Plan, the actions taken by the
Company, the Board or the Committee under the Plan, or the granting of any Award
under the Plan shall be deemed (a) to create any obligation on the part of the
Company or any Subsidiary to retain any person in the employ of, or continue the
provision of services to, the Company or any Subsidiary, or (b) to be evidence
of any agreement or understanding, express or implied, that the person has a
right to continue as an employee, or advisor for any period of time or at any
particular rate of compensation.

    


    12.6           GOVERNING LAW. The provisions
of the Plan shall take precedence over any conflicting provision contained in an
Award Agreement. All matters relating to the Plan or to Awards granted hereunder
shall be governed by and construed in accordance with the laws of the State of
Ohio without regard to the principles of conflict of laws.

    


    12.7           TRUST ARRANGEMENT. All
benefits under the Plan represent an unsecured promise to pay by the Company.
The Plan shall be unfunded and the benefits hereunder shall be paid only from
the general assets of the Company resulting in the Participants having no
greater rights than the Company's general creditors; provided, however, nothing
herein shall prevent or prohibit the Company from establishing a trust or other
arrangement for the purpose of providing for the payment of the benefits payable
under the Plan.

    


    12.8           INDEMNIFICATION OF BOARD AND
COMMITTEE. Indemnification of the members of the Board and/or the members
of the Committee shall be in accordance with the Code of Regulations of the
Company as amended by the Shareholders from time to time.

    


    
      
        
        

      

      
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    12.9           NO IMPACT ON BENEFITS. Awards
are not compensation for purposes of calculating a Participant's rights under
any employee benefit plan that does not specifically require the inclusion of
Awards in calculating benefits.

    


    12.10         BENEFICIARY DESIGNATION. Each
Participant may name a beneficiary or beneficiaries to receive or exercise any
vested Award that is unpaid or unexercised at the Participant's death. Unless
otherwise provided in the beneficiary designation, each designation will revoke
all prior designations made by the same Participant, must be made on a form
prescribed by the Committee and will be effective only when filed in writing
with the Committee. If a Participant has not made an effective beneficiary
designation, the deceased Participant's beneficiary will be the Participant's
surviving spouse or, if none, the deceased Participant's estate. The identity of
a Participant's designated beneficiary will be based only on the information
included in the latest beneficiary designation form completed by the Participant
and will not be inferred from any other evidence.

    


    12.11         TAX WITHHOLDING. The Company
shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, the minimum statutory amount to satisfy
federal, state and local taxes required by law or regulation to be withheld with
respect to any taxable event arising as a result of the Plan. With respect to
withholding required upon any taxable event arising as a result of an Award
granted hereunder, a Participant may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold shares of Company Stock having a Fair Market Value
on the date the tax is to be determined equal to the minimum statutory total tax
that could be imposed on the transaction. All such elections shall be
irrevocable, made in writing and signed by the Participant, and shall be subject
to any restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.

    


    12.12         SECTION 409A OF THE
CODE.  It is intended that this Plan comply with, or be exempt
from, Section 409A of the Code, as the case may be, and this Plan will be
interpreted, administered and operated consistent with this
intent.  Nothing herein shall be construed as an entitlement to or
guarantee of any particular tax treatment to the Executive.  None of
the Company, any Subsidiary, the Board or the Committee shall have any liability
to any person in the event this Plan fails to comply with the requirements of
Section 409A of the Code at any time.

    


    The
Company may accelerate the time or schedule of a distribution to a Participant
at any time the Plan fails to meet the requirements of Section 409A of the Code
and the regulations promulgated thereunder.  Such payment may not
exceed the amount required to be included in income as a result of the failure
to comply with the requirements of Section 409A of the Code.

     

     

    



    
      
         


      

      
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