Exhibit 10.1 - 2003 Stock Option Plan




Exhibit 10.1








THE KELLER MANUFACTURING COMPANY, INC.



2003

STOCK OPTION PLAN 





              The Keller Manufacturing
Company, Inc. (the "Company") hereby adopts this 2003 Stock Option Plan (the
"Plan").





Section 1 — PURPOSE 




             The Company adopted the
Plan to, among other things, (a) increase the profitability and growth of the
Company; (b) provide competitive compensation while obtaining the benefits of
tax deferral; (c) attract and retain exceptional personnel and encourage
excellence in the performance of individual responsibilities; and (d) motivate
key employees to contribute to the Company’s success.




Section 2 — DEFINITIONS 



        For
purposes of the Plan, the following terms shall have the meanings below unless the context
clearly indicates otherwise:




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




        2.2        
“Change of Control” of the Company shall mean (i) the
acquisition of the power to direct, or cause the direction of, the management
and policies of the Company by a person (not previously possessing such power),
acting alone or in conjunction with others, whether through the ownership of
Stock, by contract or otherwise, or (ii) the acquisition, directly or
indirectly, of the power to vote 50% or more of the outstanding Stock, by any
person or by two or more persons acting together, except an acquisition from the
Company or an acquisition by the Company, the Company’s management, or by a
Company sponsored employee benefit plan, or (iii) the business of the Company is
disposed of pursuant to a partial or complete liquidation, sale of assets, or
otherwise; or (iv) during any period of two consecutive years, individuals who,
at the beginning of such period, constituted the Board of Directors cease, for
any reason, to constitute at least a majority thereof, unless the election or
nomination of election for each new Director was approved by the vote of at
least two-thirds of the Directors in office at the beginning of the period. For
purposes of this Section 2.2, the term “person” means a natural
person, corporation, limited liability company, partnership, joint venture,
trust, government or instrumentality of the government, and customary agreements
with or between underwriters and selling group members with respect to a bona
fide public offering of the Stock or any other class of common stock of the
Company shall be disregarded.











        2.3        
“Chairman” shall mean the Chairman of the Committee.




        2.4         “Code”
shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.




        2.5        
“Committee” shall mean the Compensation Committee appointed by the
Board from time to time pursuant to Section 4.1, which shall administer the
Plan. In the event of any Committee action with regard to Options held by or an
Option grant to a member of the Committee, that member shall abstain from such
action.




        2.6        
“Director” means a voting member of the Board, excluding any
person who serves solely in an advisory capacity or as a director emeritus.




        2.7        
“Disability” shall mean a permanent disability within the meaning
of Section 22(e) of the Code.




        2.8        
“Eligible Person” means an Employee who is eligible to be
granted an Option under the Plan.




        2.9        
“Employees” shall mean an employee of the Company or any of its
Subsidiaries who has been designated by the Committee, under the criteria in
Section 5, as eligible to participate in the Plan.




        2.10        
“Fair Market Value” shall mean, as of any date, the
fair market value of Stock determined as follows:



     
                
        (i)       
          If the Stock is listed on any established stock exchange or a national market
          system including without limitation the National Market of the National
          Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”)
          System, or the over-the-counter market as quoted by the National Quotation
          Bureau Incorporated, or any similar successor organization, its Fair Market
          Value shall be the closing sales price for such stock (or the closing bid, if no
          sales were reported, or, if no bids or sales that day, the average of the prior
          five days), as quoted on such system or exchange, or, if quoted on more than
          one, the average of those quoted; or



     
                
        (ii)       
          In the absence of an established market for the Stock as described in (i) above,
          the Fair Market Value thereof shall be the price which the Committee, acting in
          good faith, determines through any reasonable valuation method that a share of
          Stock might change hands between a willing buyer and a willing seller, neither
          being under any compulsion to buy or to sell and both having reasonable
          knowledge of the relevant facts.




        2.11        
“Incentive Stock Option” shall mean an option to
purchase Stock granted under Section 6 of the Plan which is designated by the Committee as
an Incentive Stock Option and is intended to meet the requirements of Section 422 of the
Code.







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        2.12        
“Named Executive” means any individual who, on the last day of the
Company’s fiscal year, is the chief executive officer of the Company (or is acting in
such capacity) or among the four most highly compensated officers of the Company (other
than the chief executive officer). Such officer status shall be determined pursuant to the
executive compensation disclosure rules under the Securities Exchange Act of 1934 (the
“Exchange Act”).




        2.13        
“Nonqualified Stock Option” shall mean an option to
purchase Stock granted under Section 6 of the Plan which is not intended to be an
Incentive Stock Option.




        2.14        
“Option” shall mean an Incentive Stock Option or a Nonqualified
Stock Option.




        2.15        
“Option Period” shall mean the period from the date of the
grant of an Option to the date when the period for exercise of an Option expires
as stated in the terms of the Stock Option Agreement.




        2.16        
“Optionee” shall mean an Employee who has been granted an Option
to purchase shares of Stock under the provisions of the Plan.





        2.17        
“Plan” shall mean The Keller Manufacturing Company, Inc. 2003
Stock Option Plan.




        2.18        
“Reporting Person” means an Officer, Director, or greater than 10%
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is
required to file reports pursuant to Rule 16a-3 under the Exchange Act.




        2.19        
“Retirement” shall mean Termination of Employment with the Company
or any of its Subsidiaries after attaining age 65 (or earlier with the Company’s or
the Subsidiary’s consent).




        2.20        
“Stock” shall mean the Company’s voting common stock of no
par value per share.




        2.21        
“Stock Option Agreement” shall mean an agreement or
certificate between an Optionee and the Company covering the specific terms and conditions
of an Option.




        2.22        
“Subsidiary” or “Subsidiaries” shall mean
any corporation which at the time qualifies as a subsidiary of the Company under the
definition of “subsidiary corporation” in Section 424(f) of the Code.




        2.23        
“Termination” shall be deemed to have occurred at the close of business
on the last day on which an Employee is carried as an active employee on the records of
the Company or any of its Subsidiaries. The Committee shall determine whether an
authorized leave of absence, or other absence on military or government service,
constitutes severance of the employment relationship between the Company or a Subsidiary
and the Employee.







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Section 3 — STOCK SUBJECT TO THE PLAN 




        3.1        
Authorized Stock.        Subject to adjustment as provided in this Section, the
aggregate number of shares of Stock subject to an Option under the Plan shall be 585,000
shares of Stock. Stock delivered under the Plan may consist, in whole or in part, of
authorized and unissued shares or shares acquired on the public market or from
shareholders upon such terms as the Board deems appropriate for reserve in connection with
exercises hereunder.




        3.2        
Effect of Expirations.         If any Option granted under the Plan expires
or terminates without exercise, the Stock no longer subject to such Option shall be
available to be re-awarded under the Plan.




        3.3        
Adjustments in Authorized
Shares.        In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, share combination, or other change in the
corporate structure of the Company or any other increase or decrease in the
number of issued shares of Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of
consideration”, an appropriate and proportionate adjustment shall be made
by the Committee in the number and kind of shares which may be delivered under
the Plan, and in the number and kind of or price of shares subject to
outstanding Options; provided that the number of shares subject to any Option
shall always be a whole number. If any adjustment under this Section would
create a fractional share of Stock or a right to acquire a fractional share of
Stock, such fractional share shall be disregarded and the number of shares of
Stock reserved under this Plan and the number subject to any Options granted
under this Plan shall be the next lower number of shares of Stock, rounding all
fractions downward. Any adjustment of an Incentive Stock Option under this
Section shall be made in such a manner so as not to constitute a
“modification” within the meaning of Section 424(h) of the Code. If
the Company shall at any time merge, consolidate with or into another
corporation or association, or enter into a statutory share exchange or any
other similar transaction in which shares of Stock are converted as a matter of
law into securities and/or other property, except as provided in Section 9.8,
each Optionee will thereafter receive, upon the exercise of an Option, the
securities or property to which a holder of the number of shares of Stock then
deliverable upon the exercise of such Option would have been entitled if such
Option had been exercised immediately prior to such merger, consolidation, or
share exchange and the Company shall take such steps in connection with such
merger, consolidation or share exchange as may be necessary to assure that the
provisions of this Plan shall thereafter be applicable, as nearly as is
reasonably possible, in relation to any securities or property thereafter
deliverable upon the exercise of such Option. A merger or consolidation which
results in the receipt of part of all cash consideration by the Company’s
shareholders may, in the committee’s discretion, wholly or partly effect a
deemed exercise and payment (or lapse if the cash payable is less than the
Option’s exercise price) of an Option upon the closing of such a
transaction. A sale of all or substantially all the assets of the Company for a
consideration (apart from the assumption of obligations) consisting primarily of
securities shall be deemed a merger or consolidation for the foregoing
purposes.







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Section 4 — ADMINISTRATION 




        4.1        
Committee Governance.        This Plan shall be administered by the Committee which
shall consist of three or more Independent Directors appointed by the Board, and in a
manner that shall permit Options to qualify for the exemption set forth in Rule 16b-3
under the Exchange Act and as performance-based compensation under Section 162(m) of the
Code. The number of members of the Committee shall be determined by the Board. The Board
shall add or remove members from the Committee as it sees fit, and vacancies shall be
filled by the Board. The Committee shall select one of its members as the chairperson of
the Committee and shall hold meetings at such times and places as it may determine. The
Committee may appoint a secretary and, subject to the provisions of the Plan and to
policies determined by the Board, may make such rules and regulations for the conduct of
its business as it shall deem advisable. Written action of the Committee may be taken by a
majority of its members, and actions so taken shall be fully effective as if taken by a
vote of a majority of the members at a meeting duly called and held. A majority of
Committee members shall constitute a quorum for purposes of meeting. The act of a majority
of the members present at any meeting for which there is a quorum shall be a valid act of
the Committee.




        4.2        
Committee to Interpret
Plan.        Subject to the express
terms and conditions of the Plan, the Committee shall have sole power (i) to
construe and interpret the Plan; (ii) to establish, amend or waive rules for its
administration; (iii) to determine and accelerate the exercisability of any
Option; (iv) to correct inconsistencies in the Plan or in any Stock Option
Agreement, or any other instrument relating to an Option; and (v) subject to the
provisions of Section 8, to amend the terms and conditions of any outstanding
Option, to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan. Notwithstanding the foregoing, no action of
the Board or the Committee may, without the consent of the person or persons
entitled to exercise any outstanding Option, adversely affect the rights of such
person or persons.




        4.3        
Exculpation.        No member of
the Board or the Committee shall be liable for actions or determinations made in
good faith with respect to the Plan, or for awards under it.




        4.4        
Selection of Optionees.        The Committee
shall have the authority to grant Options from time to time to such Eligible
Persons as may be selected by it in its sole discretion.




        4.5        
Decisions Binding.        All determinations and decisions made by the Board or the
Committee pursuant to the provisions of the Plan, including factual interpretations, shall
be final, conclusive and binding on all persons, including the Company, its shareholders,
Eligible Persons, Optionees and their estates and beneficiaries.




        4.6        
Administration With Respect to Reporting Persons.        With respect to Options granted to Reporting Persons and Named Executives,
the Plan shall be administered so as to permit such Options to qualify for the exemption
set forth in Rule 16b-3 and to qualify as performance-based compensation under Section
162(m) of the Code.







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        4.7        
Stock Option Agreements.        Each Option granted to an Eligible Person
under Section 6 of the Plan shall be evidenced by a Stock Option Agreement or a
Certificate which shall be signed as authorized by the Committee and, if it requires
covenants, representation or agreements from the Optionee as a condition to grant, by the
Optionee, and shall contain such terms and conditions as may be approved by the Committee,
which need not be the same in all cases. Any Stock Option Agreement may be supplemented or
amended in writing from time to time as approved by the Committee, provided that the terms
of such Agreements as amended or supplemented, as well as the terms of the original Stock
Option Agreement, are not inconsistent with the provisions of the Plan. The Committee may
condition any Option grant upon the agreement by the Eligible Person to such
confidentiality, non-competition and non-solicitation covenants as the Committee deems
appropriate. An Eligible Person who receives an Option under the Plan shall not, with
respect to the Option requiring his signature, be deemed to have become an Optionee, or to
have any rights with respect to the Option, unless and until the Eligible Person has
executed a Stock Option Agreement evidencing the Option and shall have delivered an
executed copy thereof to the Company, and has otherwise complied with the applicable terms
and conditions of the Option. A certificate of option grant used as a Stock Option
Agreement because the grant does not require any covenants to agreements from the Optionee
as a condition to it, may be signed as authorized by the Committee and shall be effective
upon the date so signed.




        4.8        
Limitations on Options.



                
(a)         Subject to adjustment as
provided in Section 3.3, the maximum number of shares of Stock that may be
subject to Options newly-granted under the Plan to any one Eligible Person
during any one fiscal year of the Company shall not exceed 400,000 shares. Such
limit shall not be adjusted to restore shares of Stock with respect to which the
related Option is terminated, surrendered or cancelled.



                
(b)         No part an Option may be
exercised to the extent the exercise would cause the Optionee to have
compensation from the Company and its affiliated companies for any year in
excess of $1 million and which is nondeductible by the Company and its
affiliated companies pursuant to Code Section 162(m). Any portion of an Option
not exercisable because of this limitation shall continue to be exercisable in
any subsequent year in which the exercise would not cause the loss of the
Company’s or its affiliated companies’ compensation tax deduction,
provided such exercise occurs before lapse of the Option, and otherwise complies
with the terms and conditions of the Plan and Stock Option Agreement.
Notwithstanding the foregoing, the Board may waive application of this Section
4.8 to any Optionee in its discretion.





Section 5 — ELIGIBILITY 




        Employees of the Company and any
of its Subsidiaries who are expected to contribute substantially to the growth
and profitability of the Company and its Subsidiaries are eligible for selection
by the Committee under Section 4.4 to receive Options.







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Section 6 — GRANT OF OPTIONS 




        6.1        
Grant.        Both Incentive Stock Options and Nonqualified Stock Options may be granted
under the Plan. A grant shall be deemed made on the date the Committee approves by a
requisite vote to grant the Option, unless the resolution specifically defers the grant
date to a later (but not earlier) date. If an Option is designated as an Incentive Stock
Option but does not qualify as such under Section 422 of the Code, the Option (or portion
thereof) shall be treated as a Nonqualified Stock Option, and governed by Section 83 of
the Code. All Options granted under the Plan shall be evidenced, as soon as practicable
after grant, by a Stock Option Agreement in such form as the Committee may from time to
time approve. All Options are subject to the terms and conditions of this Section 6 and
such additional terms and conditions contained in the Stock Option Agreement, which need
not be the same in each case (but not inconsistent with the provisions of the Plan) as the
Committee finds desirable.




        6.2        
Option Price.        The purchase price per share of Stock covered by an Option
shall be determined by the Committee and for Incentive Stock Options but shall not be less
than 100% of the Fair Market Value of such Stock on the date the Option is granted.
Nonqualified Options may, in the Committee’s discretion, be granted with an Option
Price of less than Fair Market value at the date of grant. An Incentive Stock Option
granted to any person who, at the time the Option is granted, owns or is deemed to own
within the meaning of Section 424(d) of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its parent or any
Subsidiary, shall have an exercise price which is at least 110% of the Fair Market Value
of the Stock subject to the Option.




        6.3        
Option Period.        The Option
Period shall be determined by the Committee, and unless otherwise specifically
provided in the Stock Option Agreement, no Option shall be exercisable later
than ten years from the date of grant. Notwithstanding the foregoing, in the
case of an Optionee owning (within the meaning of Section 424(d) of the Code),
at the time an Incentive Stock Option is granted, more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary,
such Incentive Stock Option shall not be exercisable later than five years from
the date of grant. Options may expire prior to the end of the Option Period due
to the Optionee’s Termination, as provided in Section 7, or in accordance
with any provision of the Stock Option Agreement. No Option may be exercised at
any time unless such Option is valid and outstanding as provided in this
Plan.




        6.4        
Limitation on Amount of Incentive Stock Options.        
The aggregate Fair Market Value (determined as of the time the Option is
granted) of the Stock with respect to which an Optionee’s Incentive Stock
Options are exercisable for the first time during any calendar year (under this
and all other stock option plans of the Company, any Subsidiary or any parent
corporation) shall not exceed $100,000. Options or portions of Options
exercisable as a result of acceleration under Section 9.8 in excess of the
$100,000 limit described herein shall be treated as a Nonqualified Stock Option
for tax purposes.




        6.5        
Nontransferability of Options.         No Option shall be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, and such
option shall be exercisable, during the Optionee’s lifetime, only by the Optionee.







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SECTION 7 — EXERCISE OF OPTIONS 




        7.1        
Exercise.        
An Option may be exercised, so long as it is valid and outstanding, from
time to time in part or as a whole, subject to any limitations with respect to the number
of shares for which the Option may be exercised at a particular time and to such other
conditions (e.g., exercise could be conditioned on performance) as the Committee in its
discretion may specify upon granting an Option to an Eligible Person or as otherwise
provided in this Section 7.




        7.2        
Method of Exercise.        To exercise an Option, the Optionee or the other
person(s) entitled to exercise the Option shall give written notice of exercise to the
Committee, specifying the number of full shares of Stock to be purchased. Such notice
shall be accompanied by payment in full in cash for the Stock being purchased plus, in the
case of Nonqualified Stock Options, any required withholding tax as provided in Section
10. If permitted by the Committee, in its sole discretion, payment in full or in part may
be made in the form of Stock owned by the Optionee for at least 12 months evidenced by
negotiable Stock certificates registered either in the sole name of the Optionee or the
names of the Optionee and spouse (the number of Shares to based on the Fair Market Value
of the Stock on the date the Option is exercised), or by any combination of cash or shares
of Stock. No shares of Stock shall be issued unless the Optionee has fully complied with
the provisions of this Section 7.2.




        7.3        
Termination.        After an Eligible Person’s Termination, an Option may be
exercised, subject to adjustment as provided in Section 3.3 or 9.8, only with respect to
the number of shares of Stock which the Eligible Person could have acquired by an exercise
of the Option immediately before the Termination but in no event after the expiration date
of the Option as specified in the applicable Stock Option Agreement. Except to the extent
shorter or longer periods are provided in the Stock Option Agreement by the Committee, an
Employee’s right to exercise an Option shall terminate:


                
(a)         At the expiration of three
months (Incentive Stock Options) or one year (Nonqualified Stock Options) after
the Employee’s Retirement; provided, however, if an Incentive Stock Option
is not exercised after three months, it will remain exercisable until one year
following the Employee’s Retirement and be treated as a Nonqualified Stock
Option for purposes of the Plan when it is exercised; or



                
(b)         At the expiration of one
year in the event of Disability of the Employee; or



                
(c)         At the expiration of one
year after the Employee’s death if the Employee’s Termination occurs
by reason of death; any Option exercised under this subparagraph (c) may be
exercised in full by the legal representative of the estate of the Employee or
by the person or persons who acquire the right to exercise such Option by
bequest or inheritance; or







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                (d)         No later than three months
after the Employee’s Termination of Employment for any reason other than
Retirement, Disability or death.




Section 8 — AMENDMENTS AND TERMINATION 




        8.1        
Amendments and Termination.        The Committee may terminate, suspend,
amend or alter the Plan, but no action of the Committee may:


                
(a)         Impair or adversely affect
the rights of an Optionee under an Option, without the Optionee’s consent;
or,


                
(b)         Without the approval of the
shareholders:



                        
(i)         Increase the total amount of
Stock which may be delivered under the Plan pursuant to Incentive Stock Options
or the limit in Section 4.8 on grants to individual Eligible Persons, except as
is provided in Section 3 of the Plan;



                        
(ii)         Decrease the option price
of any Incentive Stock Option to less than the option price on the date the
Option was granted;



                        
(iii)         Extend the maximum Option
Period, or



                        
(iv)         Extend the period during
which Incentive Stock Options may be granted, as specified in Section 12.





        8.2        
Conditions on Options.        In granting an Option, the Committee may
establish any conditions that it determines are consistent with the purposes and
provisions of the Plan, including, without limitation, a condition that the granting of an
Option is subject to the surrender for cancellation of any or all outstanding Options held
by the Optionee. Any new Option made under this section may contain such terms and
conditions as the Committee may determine, including an exercise price that is lower than
that of any surrendered Option.




        8.3        
Selective Amendments.        Any amendment or alteration of the Plan may be limited
to, or may exclude from its effect, particular classes of Optionees.




Section 9 — GENERAL PROVISIONS 




        9.1        
Unfunded Status of Plan.        The Plan is intended to constitute an
“unfunded” plan for incentive compensation, and the Plan is not intended to
constitute a plan subject to the provisions of the Employee Retirement Income Security Act
of 1974, as amended, and shall not extend, with respect to any payments not yet made to an
Optionee, any rights that are greater than those of a general creditor of the Company.







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        9.2        
Transfers, Leaves of Absence and Other Changes in Employment Status.        For purposes of the Plan (i) a
transfer of an Employee from the Company to a Subsidiary, or vice versa, or from one
Subsidiary to another; or (ii) a leave of absence, duly authorized in writing by the
Company or a Subsidiary, for military service or sickness, or for any other purpose
approved by the Company or a Subsidiary if the period of such leave does not exceed 90
days; or (iii) any leave of absence in excess of 90 days approved by the Company, shall
not be deemed a Termination of Employment. The Committee, in its sole discretion subject
to the terms of the Stock Option Agreement, shall determine the disposition of all Options
made under the Plan in all cases involving any substantial change in employment status
other than as specified herein.




        9.3        
Restrictions on Distribution of Stock.        Options shall
not be exercisable unless the issuance of the Stock subject to the Options is the subject
of an effective registration statement under the Securities Art of 1933, as amended, or
unless, in the opinion of counsel to the Company, the issuance would be exempt from the
registration requirements of the Securities Act of 1933, as amended.




        9.4        
Assignment Prohibited.        Subject to the provisions of the Plan and the Stock
Option Agreement, no Option shall be assigned, transferred, pledged or otherwise
encumbered by the Optionee otherwise than by will or by the laws of descent and
distribution, and such Options shall be exercisable, during the Optionee’s lifetime,
only by the Optionee. Options shall not be pledged or hypothecated in any way, and shall
not be subject to any execution, attachment, or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of an Option contrary to the
provisions of the Plan, or the levy of any process upon an Option, shall be null, void and
without effect.




        9.5        
Other Compensation Plans.        Nothing contained in the Plan shall prevent
the Company from adopting other compensation arrangements.




        9.6        
Limitation of Authority.        No person shall at any time have any right
to receive an Option hereunder and no person shall have authority to enter into an
agreement on behalf of the Company for the granting of an Option or to make any
representation or warranty with respect thereto, except as granted by the Board or the
Committee. Optionees shall have no rights in respect to any Option except as set forth in
the Plan and the applicable Stock Option Agreement.




        9.7        
No Right to Employment.        Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board or the Committee under
the Plan or any Stock Option Agreement, or any provision of the Plan, shall be construed
as giving to any person the right to be retained as an Employee of the Company or any
Subsidiary.




        9.8        
Change of Control.        If granted by the Committee in the Stock Option
Agreement, in the event of a Change of Control, Options granted under the Plan shall
become exercisable in full whether or not otherwise exercisable at such time, and any such
Option shall remain exercisable in full thereafter until it expires pursuant to its terms.
In the event of a Change of Control, each outstanding Option may be assumed or an
equivalent option or right shall be substituted by the successor corporation or a parent
or subsidiary of such successor corporation. If such successor corporation does not agree
to assume the outstanding Options or to substitute equivalent options or rights, then each
Option, at the direction and discretion of the Committee, may (subject to such conditions,
if any, as the Committee deems appropriate under the circumstances) be cancelled
unilaterally by the Company in exchange for (a) a transfer to such Optionee of the number
of whole shares of Stock, if any, equal in Fair Market Value to the then-difference
between the exercise price of the Option and the Fair Market Value of the Stock issuable
upon the Option’s exercise, or (b) a cash payment equal in to the then-difference
between the exercise price of the Option and the Fair Market Value of the Stock issuable
upon the Option’s exercise.







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        9.9        
Option Period.        No Option granted under the Plan shall be exercisable or
payable more than 10 years from the date of grant.




        9.10        
Not a Shareholder.        The person or persons entitled to exercise, or who
have exercised, an Option shall not be entitled to any rights as a shareholder of the
Company with respect to any shares subject to the Option until such person or persons
shall have become the holder of record of such shares.




        9.11        
Headings.        The headings in this Plan have been inserted solely for convenience of
reference and shall not be considered in the interpretation or construction of this Plan.




        9.12        
Governing Law.        The validity, interpretation, construction and administration
of this Plan shall be governed by the laws of the Commonwealth of Kentucky.




Section 10 — TAXES 




        10.1        
Tax Withholding.        All Optionees shall make arrangements satisfactory to the
Committee to pay to the Company, at the time of exercise in the case of a Nonqualified
Stock Option, any federal, state or local taxes required to be withheld with respect to
such shares. If such Optionee shall fail to make such tax payments as are required, the
Company and its Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the Optionee.




        10.2        
Share Withholding.        If permitted by the Committee in the Stock Option
Agreement, the tax withholding obligation may be satisfied by the Company retaining shares
of Stock with a Fair Market Value (determined on the date the amount required to be
withheld is determined (the “Tax Date”)) equal to the minimum amount required to
be withheld. Any Stock so withheld will not be counted against the number of shares
available for issuance under Section 3.1 of the Plan. Any surrender by a Reporting Person
of previously owned Stock to satisfy tax withholding obligations arising upon exercise of
this Option must comply with the applicable provisions of Rule 16b-3. All elections by an
Optionee to have Stock withheld to satisfy tax withholding obligations shall be made in
writing in a form acceptable to the Committee and shall be subject to the following
restrictions:







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(i)       the election must be made on
or prior to the applicable Tax Date;




                     
(ii)        once made, the election
shall be irrevocable as to the Option or portion of an Option as to which the
election is made; and



                     
(iii)        all elections shall be
subject to the consent or disapproval of the Committee.




Section 11 — EFFECTIVE DATE OF PLAN 




        The Plan was adopted by the
Board on August 13, 2003 (the “Effective Date”) and grants may be made
hereunder beginning at that date; provided, however, that, if shareholder
approval is not obtained for the Plan on or before 12 months following the
Effective Date., all options hereunder shall be void and of no effect, and no
Options may be issued hereunder which allow from exercise prior to receipt of
shareholder approval.




Section 12 — TERM OF PLAN 




        Unless terminated earlier by the
Committee, no Option shall be granted under the Plan more than ten years after
the Effective Date as defined in Section 11.





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