1

 
**4.****EOIP Payouts**EOIP payouts are based on the Company’s performance for three financial metrics — EBIT, Revenuesand APC Backlog. An “Incentive Pool” may or may not be created dependent on the Company’sfinancial performance pertaining to all or some of those metrics during the fiscal year. If theIncentive Pool is created, each Participant is then awarded that Participant’s designated portionof the Incentive Pool on or about March 15 in the year following the fiscal year earned. Themethodology for calculating EOIP payouts to Participants is more fully described below. Amountsshall be paid no later than the 15th day of the third month following the end of the Participant’sfirst taxable year in which the right to the payment is no longer subject to a substantial risk offorfeiture.A percentage of EBIT is set aside in an Incentive Pool with respect to each fiscal year to providefor bonus payments under this EOIP based on performance in the following three categories: (i)EBIT, (ii) Revenue and (iii) APC backlog. The percentage of EBIT that is set aside based on theCompany’s actual level attained in each of these three categories shall be determined by theCommittee after consideration of the recommendations of the Company’s Chief Executive Officer.No amounts shall be payable under this EOIP for any fiscal year unless the Company has achieved theestablished minimum threshold of EBIT for such fiscal year. Accordingly, if the Company’sfinancial performance for the fiscal year falls below the established minimum threshold of EBIT,there is no payout under the EOIP of any kind, regardless of the annual Revenue or year-end APCBacklog amounts achieved.Once the Company’s minimum threshold of EBIT is met, the percentage of EBIT set aside in theIncentive Pool rises pro rata incrementally based on actual Company performance in each of theEBIT, Revenues, and Backlog financial metrics subject to an overall Incentive Pool fundingpercentage upper limit cap, all as shown in the chart below. The payout formula for a Participantis shown in the chart below.**Executive Officer Incentive Plan Mechanics**                               Increment    Minimums Funding % Value Incremental % % CapEBIT, as defined $2,000   1.0% $500   0.188%  3.25%Revenue $75,000   0.5% $2,500   0.125%  1.50%Backlog $30,000   0.5% $2,500   0.125%  1.50%                            2.0%          6.25%**Executive Officer Plan Incentive Summary**     Title Percentage of PoolChief Executive Officer  50.0%Chief Financial Officer  25.0%EVP, Marketing & Sales  25.0%        100.0%**5.****Definitions of Key Terms**     **(a.)****APC Backlog**
2

 
For purposes of this EOIP, the term “APC Backlog” refers generally to revenue to which the Companyhas a legally binding, contractual right, and which is associated with its APC product line, andthat has not yet been recognized in the Company’s profit and loss statement, but shall be asdetermined by the Company, in its sole discretion.     **(b.)****Committee**The term “Committee” as used in this EOIP means the Compensation & Nominating Committee of theCompany’s Board of Directors or such other Committee as may from time to time succeed or performthe functions of that Committee.     **(c.)****EBIT**For purposes of this EOIP, the term “EBIT” refers generally to earnings before interest expense,taxes, profit sharing plan contributions, sales commissions and incentive pay, but shall be asdetermined by the Company, in its sole discretion, with the assistance of its accountants.     **(d.)****Revenue**For purposes of this EOIP, the term “Revenue” refers to the Company’s net sales, but shall be asdetermined by the Company, in its sole discretion.**6.****Other Conditions**     **(a.)****No Alienation of Awards**Payouts under this EOIP may not be assigned or alienated, except that payouts earned and payablemay be assigned under the laws of descent and distribution of the Participant’s domicile.     **(b.)****No Right of Employment**Neither the EOIP nor any action taken under the EOIP shall be construed, expressly or byimplication, as either giving to any Participant the right to be retained in the employ of theCompany or any affiliate, or altering or limiting the employment-at-will relationship between theCompany and any Participant.     **(c.)****Taxes, Withholding**The Company or any affiliate shall have the right to deduct from any payout under the EOIP anyapplicable federal, state or local taxes or other amounts required by applicable law, rule, orregulation to be withheld with respect to such payment.     **(d.)****Code Section 409A**The EOIP is intended to be exempt from or comply with Section 409A of the Internal Revenue Code of1986, as amended, and the regulations promulgated thereunder.**7.****Plan Administration; Effectiveness for any Fiscal Year**     **(a.)****Administration**
3

 
The EOIP shall be administered by or under the authority of the Committee which shall have the fulldiscretionary power to administer and interpret this EOIP and to establish rules for itsadministration.     **(b.)****Effectiveness**The EOIP will not be deemed effective for any fiscal year until such time, if any, as thedetermination of the EOIP EBIT, Revenues, and Backlog minimum targets and Incentive Pool fundingpercentage amounts contemplated by Paragraph 4 above have been released for communication to EOIPparticipants, which date shall be no later than March 15th of each fiscal year.**8.****Reservation of Rights, Governing Law, Contract Disclaimer****The Company reserves the right to amend or cancel the EOIP in whole or in part at any time withoutnotice. There can be no guaranty that the EOIP will be in effect in any subsequent fiscal year.The Company also reserves the right to decide all questions and issues arising under the EOIP andits decisions are final. The EOIP shall be construed in accordance with and governed by the lawsof the State of Illinois. The EOIP is a statement of the Company’s intentions and does notconstitute a guarantee that any particular EOIP payment amount will be paid. It does not create acontractual relationship or any contractually enforceable rights between the Company or its whollyowned subsidiaries and the Participant.**
4