Prepared by MerrillDirect





EXHIBIT 10.1


PAPER WAREHOUSE, INC.


1997 STOCK OPTION AND COMPENSATION PLAN

(AS AMENDED AND RESTATED AS OF JUNE 12, 2001)


 


	1.	Purpose.  The purpose of the 1997 Stock Option and
  Compensation Plan, as amended and restated as of June 12, 2001 (the “Plan”)
  of Paper Warehouse, Inc. (the “Company”) is to increase shareholder value and
  to advance the interests of the Company by furnishing a variety of economic
  incentives (“Incentives”) designed to attract, retain and motivate employees.  Incentives may consist of opportunities to
  purchase or receive shares of Common Stock, $.03 par value, of the Company
  (“Common Stock”), monetary payments or both on terms determined under this
  Plan.  The Plan shall constitute an
  amendment and restatement of the Company’s existing 1997 Stock Option and
  Compensation Plan, as amended and restated as of June 11, 1999 (the “1999
  Restatement”) and the Company’s 1997 Stock Option and Compensation Plan (the
  “Original 1997 Plan”, with the 1999 Restatement and the Original 1997 Plan
  collectively referred to as the “Former Plans”) and as such shall supersede
  and replace the Former Plans.  The
  Former Plans shall be deemed outstanding, however, only to the extent
  necessary to determine the terms and conditions of any such offers to
  purchase the Company’s Common Stock or other rights previously granted under
  the Former Plans.
	 	 	 	 
	2.	Administration.  The Plan shall be administered by the
  compensation committee (the “Committee”) of the Board of Directors of the
  Company.  The Committee shall consist of
  not less than two directors of the Company and shall be appointed from time
  to time by the Board of Directors of the Company.  Each member of the Committee shall be a non-employee director
  within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934
  (“Non-Employee Directors”), and the regulations promulgated thereunder (the
  “1934 Act”).  The Board of Directors
  of the Company may from time to time appoint members of the Committee in
  substitution for, or in addition to, members previously appointed, and may
  fill vacancies, however caused, in the Committee.  The Committee shall select one of its members as its chairman
  and shall hold its meetings at such times and places as it shall deem
  advisable.  A majority of the
  Committee’s members shall constitute a quorum.  All action of the Committee shall be taken by the majority of
  its members.  Any action may be taken
  by a written instrument signed by majority of the members and actions so
  taken shall be fully effective as if it had been made by a majority vote at a
  meeting duly called and held.  The
  Committee may appoint a secretary, shall keep minutes of its meetings and
  shall make such rules and regulations for the conduct of its business as it
  shall deem advisable.  The Committee
  shall have complete authority to award Incentives under the Plan, to
  interpret the Plan, and to make any other determination which it believes
  necessary and advisable for the proper administration of the Plan.  The Committee’s decisions and matters
  relating to the Plan shall be final and conclusive on the Company and its
  participants.
	 	 
	3.	Eligible
  Employees.  Participants (including, officers,
  non-employee directors, consultants and independent contractors) shall become
  eligible to receive Incentives under the Plan when designated by the
  Committee.  Employees may be
  designated individually or by groups or categories (for example, by pay
  grade) as the Committee deems appropriate. 
  Participation by officers of the Company and any performance
  objectives relating to such officers must be approved by the Committee.  Participation by others and any
  performance objectives relating to others may be approved by groups or
  categories (for example, by pay grade) and authority to designate participants
  who are not officers and to set or modify such targets may be delegated.
	 	 	 	 
	4.	Types
  of Incentives.  Incentives under the Plan may be granted
  in any one or a combination of the following forms:  (a) incentive stock options and non-statutory stock options
  (section 6); (b) stock appreciation rights (“SARs”) (section 7); (c) stock
  awards (section 8); (d) restricted stock (section 8); (e) performance shares
  (section 9); and (f) cash awards (section 10).
	 	 	 	 
	5.	Shares
  Subject to the Plan.
	 	 	 	 
	 	5.1.	Number
  of Shares.  Subject to adjustment as provided in
  Section 11.6, the number of shares of Common Stock which may be issued under
  the Plan shall not exceed 666,667 shares of Common Stock.
	 	 	 	 
	 	5.2.	Cancellation.  To the extent that cash in lieu of shares
  of Common Stock is delivered upon the exercise of a SAR pursuant to Section
  7.4, the Company shall be deemed, for purposes of applying the limitation on
  the number of shares, to have issued the greater of the number of shares of
  Common Stock which it was entitled to issue upon such exercise or on the
  exercise of any related option.  In
  the event that a stock option or SAR granted hereunder expires or is
  terminated or canceled unexercised as to any shares of Common Stock, such
  shares may again be issued under the Plan either pursuant to stock options,
  SARs or otherwise.  In the event that
  shares of Common Stock are issued as restricted stock or pursuant to a stock
  award and thereafter are forfeited or reacquired by the Company pursuant to
  rights reserved upon issuance thereof, such forfeited and reacquired shares
  may again be issued under the Plan, either as restricted stock, pursuant to
  stock awards or otherwise.  The
  Committee may also determine to cancel, and agree to the cancellation of,
  stock options in order to make a participant eligible for the grant of a
  stock option at a lower price than the option to be canceled.
	 	 	 	 
	 	5.3.	Type
  of Common Stock.  Common Stock issued under the Plan in
  connection with stock options, SARs, performance shares, restricted stock or
  stock awards, may be authorized and unissued shares.
	 	 	 	 
	6.	Stock
  Options.  A stock option is a right to purchase
  shares of Common Stock from the Company. 
  Each stock option granted by the Committee under this Plan shall be
  subject to the following terms and conditions:
	 	 	 	 
	 	6.1.	Price.  The option price per share shall be
  determined by the Committee, subject to adjustment under Section 11.6.
	 	 	 	 
	 	6.2.	Number.  The number of shares of Common Stock
  subject to the option shall be determined by the Committee, subject to
  adjustment as provided in Section 11.6. 
  The number of shares of Common Stock subject to a stock option shall
  be reduced in the same proportion that the holder thereof exercises a SAR if
  any SAR is granted in conjunction with or related to the stock option.
	 	 	 	 
	 	6.3.	Duration
  and Time for Exercise.  Subject to earlier termination as provided
  in Section 11.4, the term of each stock option shall be determined by the
  Committee but shall not exceed ten years and one day from the date of grant.  Each stock option shall become exercisable
  at such time or times during its term as shall be determined by the Committee
  at the time of grant.  No stock option
  may be exercised during the first twelve months of its term.  Except as provided by the preceding
  sentence, the Committee may accelerate the exercisability of any stock
  option.  Subject to the foregoing and
  with the approval of the Committee, all or any part of the shares of Common
  Stock with respect to which the right to purchase has accrued may be
  purchased by the Company at the time of such accrual or at any time or times
  thereafter during the term of the option.
	 	 	 	 
	 	6.4.	Manner
  of Exercise.  A stock option may be exercised, in whole
  or in part, by giving written notice to the Company, specifying the number of
  shares of Common Stock to be purchased and accompanied by the full purchase
  price for such shares.  The option
  price shall be payable in United States dollars upon exercise of the option
  and may be paid by cash; uncertified or certified check; bank draft; by
  delivery of shares of Common Stock in payment of all or any part of the
  option price, which shares shall be valued for this purpose at the Fair
  Market Value on the date such option is exercised; by instructing the Company
  to withhold from the shares of Common Stock issuable upon exercise of the
  stock option shares of Common Stock in payment of all or any part of the
  option price, which shares shall be valued for this purpose at the Fair
  Market Value or in such other manner as may be authorized from time to time by
  the Committee.  Prior to the issuance
  of shares of Common Stock upon the exercise of a stock option, a participant
  shall have no rights as a shareholder.
	 	 	 	 
	 	6.5.	Incentive
  Stock Options.  Notwithstanding anything in the Plan to
  the contrary, the following additional provisions shall apply to the grant of
  stock options which are intended to qualify as Incentive Stock Options (as
  such term is defined in Section 422A of the Internal Revenue Code of 1986, as
  amended):
	 	 	 	 
	 	 	(a)	The
  aggregate Fair Market Value (determined as of the time the option is granted)
  of the shares of Common Stock with respect to which Incentive Stock Options
  are exercisable for the first time by any participant during any calendar
  year (under all of the Company’s plans) shall not exceed $100,000.
	 	 	 	 
	 	 	(b)	Any
  Incentive Stock Option certificate authorized under the Plan shall contain
  such other provisions as the Committee shall deem advisable, but shall in all
  events be consistent with and contain all provisions required in order to
  qualify the options as Incentive Stock Options.
	 	 	 	 
	 	 	(c)	All
  Incentive Stock Options must be granted within ten years from the earlier of
  the date on which this Plan was adopted by the Board of Directors or the date
  this Plan was approved by the shareholders.
	 	 	 	 
	 	 	(d)	Unless
  sooner exercised, all Incentive Stock Options shall expire no later than 10
  years after the date of grant.
	 	 	 	 
	 	 	(e)	The
  option price for Incentive Stock Options shall be not less than the Fair
  Market Value of the Common Stock subject to the option on the date of grant.
	 	 	 	 
	 	 	(f)	No
  Incentive Stock Options shall be granted to any participant who, at the time
  such option is granted, would own (within the meaning of Section 422A of the
  Code) stock possessing more than 10% of the total combined voting power of
  all classes of stock of the employer corporation, or of its parent or
  subsidiary corporation, unless such Incentive Stock Option is granted with a
  per share price to be paid by the participant upon exercise of such option of
  not less than 110% of the Fair Market Value of one share of Common Stock on
  the date of grant and such option is not exercisable after five years from
  its date of grant.
	 	 	 	 
	7.	Stock
  Appreciation Rights.  A SAR is a right to receive, without
  payment to the Company, a number of shares of Common Stock, cash or any
  combination thereof, the amount of which is determined pursuant to the
  formula set forth in Section 7.4.  A
  SAR may be granted (a) with respect to any stock option granted under this
  Plan, either concurrently with the grant of such stock option or at such
  later time as determined by the Committee (as to all or any portion of the
  shares of Common Stock subject to the stock option), or (b) alone, without
  reference to any related stock option. 
  Each SAR granted by the Committee under this Plan shall be subject to
  the following terms and conditions:
	 	 	 	 
	 	7.1.	Number.  Each SAR granted to any participant shall
  relate to such number of shares of Common Stock as shall be determined by the
  Committee, subject to adjustment as provided in Section 11.6.  In the case of a SAR granted with respect
  to a stock option, the number of shares of Common Stock to which the SAR
  pertains shall be reduced in the same proportion that the holder of the
  option exercises the related stock option.
	 	 	 	 
	 	7.2.	Duration.  Subject to earlier termination as provided
  in Section 11.4, the term of each SAR shall be determined by the Committee
  but shall not exceed ten years and one day from the date of grant.  Unless otherwise provided by the
  Committee, each SAR shall become exercisable at such time or times, to such
  extent and upon such conditions as the stock option, if any, to which it
  relates is exercisable.  No SAR may be
  exercised during the first twelve months of its term.  Except as provided in the preceding
  sentence, the Committee may in its discretion accelerate the exercisability
  of any SAR.
	 	 	 	 
	 	7.3.	Exercise.  A SAR may be exercised, in whole or in
  part, by giving written notice to the Company, specifying the number of SARs
  which the holder wishes to exercise. 
  Upon receipt of such written notice, the Company shall, within 90 days
  thereafter, deliver to the exercising holder certificates for the shares of
  Common Stock or cash or both, as determined by the Committee, to which the
  holder is entitled pursuant to Section 7.4.
	 	 	 	 
	 	7.4.	Payment.  Subject to the right of the Committee to
  deliver cash in lieu of shares of Common Stock (which, as it pertains to
  officers and directors of the Company, shall comply with all requirements of
  the 1934 Act), the number of shares of Common Stock which shall be issuable
  upon the exercise of a SAR shall be determined by dividing:
	 	 	 	 
	 	 	(a)	the
  number of shares of Common Stock as to which the SAR is exercised multiplied
  by the amount of the appreciation in such shares (for this purpose, the
  “appreciation” shall be the amount by which the Fair Market Value of the
  shares of Common Stock subject to the SAR on the exercise date exceeds (1) in
  the case of a SAR related to a stock option, the purchase price of the shares
  of Common Stock under the stock option or (2) in the case of a SAR granted
  alone, without reference to a related stock option, an amount which shall be
  determined by the Committee at the time of grant, subject to adjustment under
  Section 11.6); by
	 	 	 	 
	 	 	(b)	the
  Fair Market Value of a share of Common Stock on the exercise date.
	 	 	 	 
	 	In
  lieu of issuing shares of Common Stock upon the exercise of a SAR, the
  Committee may elect to pay the holder of the SAR cash equal to the Fair
  Market Value on the exercise date of any or all of the shares which would
  otherwise be issuable.  No fractional
  shares of Common Stock shall be issued upon the exercise of a SAR; instead,
  the holder of the SAR shall be entitled to receive a cash adjustment equal to
  the same fraction of the Fair Market Value of a share of Common Stock on the
  exercise date or to purchase the portion necessary to make a whole share at
  its Fair Market Value on the date of exercise.
	 	 	 	 
	8.	Stock
  Awards and Restricted Stock.  A
  stock award consists of the transfer by the Company to a participant of
  shares of Common Stock, without other payment therefor, as additional
  compensation for services to the Company. 
  A share of restricted stock consists of shares of Common Stock which
  are sold or transferred by the Company to a participant at a price determined
  by the Committee (which price shall be at least equal to the minimum price
  required by applicable law for the issuance of a share of Common Stock) and
  subject to restrictions on their sale or other transfer by the
  participant.  The transfer of Common
  Stock pursuant to stock awards and the transfer and sale of restricted stock
  shall be subject to the following terms and conditions:
	 	 	 	 
	 	8.1.	Number
  of Shares.  The number of shares to be transferred or
  sold by the Company to a participant pursuant to a stock award or as
  restricted stock shall be determined by the Committee.
	 	 	 	 
	 	8.2.	Sale
  Price.  The Committee shall determine the price,
  if any, at which shares of restricted stock shall be sold to a participant,
  which may vary from time to time and among participants and which may be
  below the Fair Market Value of such shares of Common Stock at the date of
  sale.
	 	 	 	 
	 	8.3.	Restrictions.  All shares of restricted stock transferred
  or sold hereunder shall be subject to such restrictions as the Committee may
  determine, including, without limitation, any or all of the following:
	 	 	 	 
	 	 	(a)	a
  prohibition against the sale, transfer, pledge or other encumbrance of the
  shares of restricted stock, such prohibition to lapse at such time or times
  as the Committee shall determine (whether in annual or more frequent
  installments, at the time of the death, disability or retirement of the
  holder of such shares, or otherwise);
	 	 	 	 
	 	 	(b)	a
  requirement that the holder of shares of restricted stock forfeit, or (in the
  case of shares sold to a participant) resell back to the Company at his cost,
  all or a part of such shares in the event of termination of his employment
  during any period in which such shares are subject to restrictions;
	 	 	 	 
	 	 	(c)	such
  other conditions or restrictions as the Committee may deem advisable.
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	8.4.	Escrow.  In order to enforce the restrictions
  imposed by the Committee pursuant to Section 8.3, the participant receiving
  restricted stock shall enter into an agreement with the Company setting forth
  the conditions of the grant.  Shares
  of restricted stock shall be registered in the name of the participant and
  deposited, together with a stock power endorsed in blank, with the
  Company.  Each such certificate shall
  bear a legend in substantially the following form:
	 	 	 
	 	 	The
  transferability of this certificate and the shares of Common Stock
  represented by it are subject to the terms and conditions (including conditions
  of forfeiture) contained in the 1997 Stock Option and Compensation Plan of
  Paper Warehouse, Inc., as amended and restated as of June 12, 2001 (the
  “Company”), and an agreement entered into between the registered owner and
  the Company.  A copy of the Plan and
  the agreement is on file in the office of the secretary of the Company.	 
	 	 	 	 
	 	8.5.	End
  of Restrictions.  Subject to Section 11.5, at the end of any
  time period during which the shares of restricted stock are subject to
  forfeiture and restrictions on transfer, such shares will be delivered free
  of all restrictions to the participant or to the participant’s legal
  representative, beneficiary or heir.
	 	 	 	 
	 	8.6.	Shareholder.  Subject to the terms and conditions of the
  Plan, each participant receiving restricted stock shall have all the rights
  of a shareholder with respect to shares of stock during any period in which
  such shares are subject to forfeiture and restrictions on transfer, including
  without limitation, the right to vote such shares.  Dividends paid in cash or property other than Common Stock with
  respect to shares of restricted stock shall be paid to the participant
  currently.
	 	 	 	 
	9.	Performance
  Shares.  A performance share consists of an award
  which shall be paid in shares of Common Stock, as described below.  The grant of performance share shall be
  subject to such terms and conditions as the Committee deems appropriate,
  including the following:
	 	 	 	 
	 	9.1.	Performance
  Objectives.  Each performance share will be subject to
  performance objectives for the Company or one of its operating units to be
  achieved by the end of a specified period. 
  The number of performance shares granted shall be determined by the
  Committee and may be subject to such terms and conditions as the Committee
  shall determine.  If the performance
  objectives are achieved, each participant will be paid in shares of Common
  Stock or cash.  If such objectives are
  not met, each grant of performance shares may provide for lesser payments in
  accordance with formulas established in the award.
	 	 	 	 
	 	9.2.	Not
  Shareholder.  The grant of performance shares to a
  participant shall not create any rights in such participant as a shareholder
  of the Company, until the payment of shares of Common Stock with respect to
  an award.
	 	 	 	 
	 	9.3.	No
  Adjustments.  No adjustment shall be made in performance
  shares granted on account of cash dividends which may be paid or other rights
  which may be issued to the holders of Common Stock prior to the end of any
  period for which performance objectives were established.
	 	 	 	 
	 	9.4.	Expiration
  of Performance Share.  If any participant’s employment with the
  Company is terminated for any reason other than normal retirement, death or
  disability prior to the achievement of the participant’s stated performance
  objectives, all the participant’s rights on the performance shares shall
  expire and terminate unless otherwise determined by the Committee.  In the event of termination of employment
  by reason of death, disability, or normal retirement, the Committee, in its own
  discretion, may determine what portions, if any, of the performance shares
  should be paid to the participant.
	 	 	 	 
	10.	Cash
  Awards.  A cash award consists of a monetary
  payment made by the Company to a participant as additional compensation for
  his services to the Company.  Payment
  of a cash award will normally depend on achievement of performance objectives
  by the Company or by individuals.  The
  amount of any monetary payment constituting a cash award shall be determined
  by the Committee in its sole discretion. 
  Cash awards may be subject to other terms and conditions, which may
  vary from time to time and among participants, as the Committee determines to
  be appropriate.
	 	 
	11.	General.
	 	 	 	 
	 	11.1.	Effective
  Date.  Each of the Former Plans and the Plan
  became effective upon their approval by the affirmative vote of the holders
  of a majority of the voting power of the shares of the Company’s Common Stock
  present and entitled to vote at a meeting of its shareholders.  Unless approved within one year after the
  date the Former Plans and the Plan, as applicable, were adopted by the board
  of directors, the Former Plans or the Plan, as applicable, shall not be
  effective for any purpose.  The
  effective date of the Original 1997 Plan shall also be the effective date of
  this Plan.
	 	 	 	 
	 	11.2.	Duration.  The Plan shall remain in effect until all
  Incentives granted under the Plan have either been satisfied by the issuance
  of shares of Common Stock or the payment of cash or been terminated under the
  terms of the Plan and all restrictions imposed on shares of Common Stock in
  connection with their issuance under the Plan have lapsed.  No Incentives may be granted under the
  Plan after the tenth anniversary of the date the Plan is approved by the
  shareholders of the Company.
	 	 	 	 
	 	11.3.	Non-Transferability
  of Incentives.  No stock option, unless otherwise
  permitted by the Committee in the stock option agreement of the holder, SAR,
  restricted stock or performance award may be transferred, pledged or assigned
  by the holder thereof (except, in the event of the holder’s death, by will or
  the laws of descent and distribution to the limited extent provided in the
  Plan or in the Incentive) and the Company shall not be required to recognize
  any attempted assignment of such rights by any participant.  During a participant’s lifetime, an
  Incentive may be exercised only by him or by his guardian or legal
  representative.
	 	 	 	 
	 	11.4.	Effect
  of Termination of Employment or Death.  In the event that a participant ceases to
  be an employee of the Company for any reason, including death, any Incentives
  may be exercised or shall expire at such times as may be determined by the
  Committee.
	 	 	 	 
	 	11.5.	Additional
  Condition.  Notwithstanding anything in this Plan to
  the contrary:  (a) the Company may, if
  it shall determine it necessary or desirable for any reason, at the time of
  award of any Incentive or the issuance of any shares of Common Stock pursuant
  to any Incentive, require the recipient of the Incentive, as a condition to
  the receipt thereof or to the receipt of shares of Common Stock issued
  pursuant thereto, to deliver to the Company a written representation of
  present intention to acquire the Incentive or the shares of Common Stock
  issued pursuant thereto for his own account for investment and not for
  distribution; and (b) if at any time the Company further determines, in its
  sole discretion, that the listing, registration or qualification (or any
  updating of any such document) of any Incentive or the shares of Common Stock
  issuable pursuant thereto is necessary on any securities exchange or under
  any federal or state securities or blue sky law, or that the consent or
  approval of any governmental regulatory body is necessary or desirable as a
  condition of, or in connection with the award of any Incentive, the issuance
  of shares of Common Stock pursuant thereto, or the removal of any
  restrictions imposed on such shares, such Incentive shall not be awarded or
  such shares of Common Stock shall not be issued or such restrictions shall
  not be removed, as the case may be, in whole or in part, unless such listing,
  registration, qualification, consent or approval shall have been effected or
  obtained free of any conditions not acceptable to the Company.
	 	 	 	 
	 	11.6.	Adjustment.  In the event of any merger, consolidation
  or reorganization of the Company with any other corporation or corporations,
  there shall be substituted for each of the shares of Common Stock then
  subject to the Plan, including shares subject to restrictions, options, or
  achievement of performance share objectives, the number and kind of shares of
  stock or other securities to which the holders of the shares of Common Stock
  will be entitled pursuant to the transaction.  In the event of any recapitalization, stock dividend, stock
  split, combination of shares or other change in the Common Stock, the number
  of shares of Common Stock then subject to the Plan, including shares subject
  to restrictions, options or achievements of performance shares, shall be
  adjusted in proportion to the change in outstanding shares of Common
  Stock.  In the event of any such
  adjustments, the purchase price of any option, the performance objectives of
  any Incentive, and the shares of Common Stock issuable pursuant to any
  Incentive shall be adjusted as and to the extent appropriate, in the
  discretion of the Committee, to provide participants with the same relative
  rights before and after such adjustment.
	 	 	 	 
	 	11.7.	Incentive
  Plans and Agreements.  Except in the case of stock awards or cash
  awards, the terms of each Incentive shall be stated in a plan or agreement
  approved by the Committee.  The
  Committee may also determine to enter into agreements with holders of options
  to reclassify or convert certain outstanding options, within the terms of the
  Plan, as Incentive Stock Options or as non-statutory stock options and in
  order to eliminate SARs with respect to all or part of such options and any
  other previously issued options.
	 	 	 	 
	 	11.8.	Withholding.
	 	 	 	 
	 	 	(a)	The
  Company shall have the right to withhold from any payments made under the
  Plan or to collect as a condition of payment, any taxes required by law to be
  withheld.  At any time when a
  participant is required to pay to the Company an amount required to be withheld
  under applicable income tax laws in connection with a distribution of Common
  Stock or upon exercise of an option or SAR, the participant may satisfy this
  obligation in whole or in part by electing (the “Election”) to have the
  Company withhold from the distribution shares of Common Stock having a value
  up to the amount required to be withheld. 
  The value of the shares to be withheld shall be based on the Fair
  Market Value of the Common Stock on the date that the amount of tax to be
  withheld shall be determined (“Tax Date”).
	 	 	 	 
	 	 	(b)	Each
  Election must be made prior to the Tax Date. 
  The Committee may disapprove of any Election, may suspend or terminate
  the right to make Elections, or may provide with respect to any Incentive
  that the right to make Elections shall not apply to such Incentive.  An Election is irrevocable.
	 	 	 	 
	 	 	(c)	If
  a participant is an officer or director of the Company within the meaning of
  Section 16 of the 1934 Act, then an Election is subject to the following
  additional restrictions:
	 	 	 	 
	 	 	 	(1)	No
  Election shall be effective for a Tax Date which occurs within six months of
  the grant of the award, except that this limitation shall not apply in the
  event death or disability of the participant occurs prior to the expiration
  of the six-month period.
	 	 	 	 	 
	 	 	 	(2)	The
  Election must be made either six months prior to the Tax Date or must be made
  during a period beginning on the third business day following the date of
  release for publication of the Company’s quarterly or annual summary
  statements of sales and earnings and ending on the twelfth business day
  following such date.
	 	 	 	 	 
	 	11.9.	No
  Continued Employment or Right to Corporate Assets.  No participant under the Plan shall have
  any right, because of his or her participation, to continue in the employ of
  the Company for any period of time or to any right to continue his or her
  present or any other rate of compensation. 
  Nothing contained in the Plan shall be construed as giving an
  employee, the employee’s beneficiaries or any other person any equity or
  interests of any kind in the assets of the Company or creating a trust of any
  kind or a fiduciary relationship of any kind between the Company and any such
  person.
	 	 	 	 	 
	 	11.10.	Deferral
  Permitted.  Payment of cash or distribution of any
  shares of Common Stock to which a participant is entitled under any Incentive
  shall be made as provided in the Incentive. 
  Payment may be deferred at the option of the participant if provided
  in the Incentive.
	 	 	 	 	 
	 	11.11.	Amendment
  of the Plan.  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
  Incentives under the Plan will 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 amendments to the Plan
  will be effective without approval of the shareholders of the Company if
  shareholder approval of the amendment is then required pursuant to Section 422
  of the Code or the rules of any stock exchange or NASDAQ or similar
  regulatory body.  No termination,
  suspension or amendment of the Plan may adversely affect any outstanding
  Incentive without the consent of the affected participant; provided, however,
  that this sentence will not impair the right of the Committee to take
  whatever action it deems appropriate under Sections 2, 11.6 and 11.12 of the
  Plan.
	 	 	 	 	 
	 	11.12.	Immediate
  Acceleration of Incentives. 
  Notwithstanding any provision in this Plan or in any Incentive to the
  contrary, (a) the restrictions on all shares of restricted stock award shall
  lapse immediately, (b) all outstanding options and SARs will become
  exercisable immediately, and (c) all performance shares shall be deemed to be
  met and payment made immediately, if subsequent to the date that the Plan is
  approved by the Board of Directors of the Company, any of the following
  events occur unless otherwise determined by the Board of Directors and a
  majority of the Continuing Directors (as defined below):
	 	 	 	 	 
	 	 	(1)	any
  person or group of persons becomes the beneficial owner of 30% or more of any
  equity security of the Company entitled to vote for the election of
  directors;
	 	 	 	 	 
	 	 	(2)	a
  majority of the members of the Board of Directors of the Company is replaced
  within the period of less than two years by directors not nominated and
  approved by the Board of Directors; or
	 	 	 	 
	 	 	(3)	the
  shareholders of the Company approve an agreement to merge or consolidate with
  or into another corporation or an agreement to sell or otherwise dispose of
  all or substantially all of the Company’s assets (including a plan of
  liquidation).
	 	 	 	 	 
	 	 	For
  purposes of this Section 11.12, beneficial ownership by a person or group of
  persons shall be determined in accordance with Regulation 13D (or any similar
  successor regulation) promulgated by the Securities and Exchange Commission
  pursuant to the 1934 Act.  Beneficial
  ownership of more than 30% of an equity security may be established by any
  reasonable method, but shall be presumed conclusively as to any person who
  files a Schedule 13D report with the Securities and Exchange Commission
  reporting such ownership.  If the
  restrictions and forfeitability periods are eliminated by reason of provision
  (1), the limitations of this Plan shall not become applicable again should
  the person cease to own 30% or more of any equity security of the Company.
	 	 	 	 	 
	 	 	For
  purposes of this Section 11.12, “Continuing Directors” are directors (a) who
  were in office prior to the time any of provisions (1), (2) or (3) occurred
  or any person publicly announced an intention to acquire 20% or more of any
  equity security of the Company, (b) directors in office for a period of more
  than two years, and (c) directors nominated and approved by the Continuing
  Directors.
	 	 	 	 	 
	 	11.13.	Definition
  of Fair Market Value.  For purposes of this Plan, the “Fair
  Market Value” of a share of Common Stock at a specified date shall, unless
  otherwise expressly provided in this Plan, be the amount which the Committee
  determines in good faith to be 100% of the fair market value of such a share
  as of the date in question; provided, however, that notwithstanding the
  foregoing, if such shares are listed on a U.S. securities exchange or are
  quoted on the NASDAQ National market System (“NASDAQ”), then Fair Market
  Value shall be determined by reference to the last sale price of a share of
  Common Stock on such U.S. securities exchange or NASDAQ on the applicable
  date.  If such U.S. securities
  exchange or NASDAQ is closed for trading on such date, or if the Common Stock
  does not trade on such date, then the last sale price used shall be the one
  on the date the Common Stock last traded on such U.S. securities exchange or
  NASDAQ.