**Exhibit 10.1**

 

**AIRNETSYSTEMS, INC.**

**2004 STOCKINCENTIVE PLAN**

**[Reflectsamendments through June 4, 2004]**

 

**1.00        PURPOSE**

 

ThisPlan is intended to foster and promote the long-term financial success of theCompany and to materially increase shareholder value **[1]** by providingEmployees and Eligible Directors an opportunity to acquire an ownershipinterest in the Company, and **[2]** enabling the Company to attractand retain the services of outstanding Employees and Eligible Directors uponwhose judgment, interest and special efforts the successful conduct of theCompany’s business is largely dependent.

 

**2.00**        **DEFINITIONS**

 

Whenused in this Plan, the following terms have the meanings given to them in thisSection 2.00 unless another meaning is expressly provided elsewhere inthis Plan or clearly required by the context. When applying these definitions, the form of any term or word willinclude any of its other forms.

 

**2.01**        **Act.**  The Securities Exchange Act of 1934, asamended.

 

**2.02        AffiliatedSAR.**  An SAR thatis granted in conjunction with an Option and which is always deemed to havebeen exercised at the same time that the related Option is exercised.  The deemed exercise of an Affiliated SARwill not reduce the number of shares of Stock subject to the related Option,except to the extent of the exercise of the related Option.

 

**2.03        AnnualMeeting.**  The annual meeting of the Company’sshareholders.

 

**2.04        Award.**  AnyIncentive Stock Option, Nonstatutory Stock Option, Restricted Stock,Performance Share, Performance Unit or SAR granted under the Plan.  During any single Plan Year, no Participantmay be granted Options affecting more than 200,000****shares of Stock (adjusted asprovided in Section 5.03), Restricted Stock affecting more than 200,000 sharesof Stock (adjusted as provided in Section 5.03), Performance Shares affectingmore than 200,000 shares of Stock (adjusted as provided in Section 5.03),Performance Units affecting more than 200,000 shares of Stock (adjusted asprovided in Section 5.03) and SARs affecting more than 200,000 shares of Stock(adjusted as provided in Section 5.03), including Options, Restricted Stock,Performance Shares, Performance Units and SARs that are cancelled [or deemed tohave been cancelled under Treas. Reg. §1.162-27(e)(2)(vi)(B)] during the PlanYear granted.  Any Right to Purchase orany shares of Stock issued pursuant to Section 10.00 of this Plan will notconstitute an “Award.”

 

**2.05        AwardAgreement. **The written agreement between the Company andeach Participant that describes the terms and conditions of each Award.

 

**2.06**        **Beneficiary.**  The person a Member designates to receive(or exercise) any Plan benefits (or rights) that are unpaid (or unexercised)when he or she dies.  A Beneficiary maybe designated only by following the procedures described in Section 14.02;neither the Company nor the Committee is required to infer a Beneficiary fromany other source.

 

**2.07**        **Board.**  The Company’s Board of Directors.

 

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**2.08        CashAccount.**  An account established for each Participantwho elects to participate in an Offering to which amounts withheld throughpayroll deductions will be credited to purchase shares of Stock under theprovisions of Section 10.00.

 

**2.09        Cause.** Unless the Committee specifies otherwise in the Award Agreement, withrespect to any Participant:

 

**[1]          **Willful failure to substantially perform hisor her duties as an Employee (for reasons other than physical or mentalillness) or a director after reasonable notice to the Participant of thatfailure;

 

**[2]          **Misconduct that materially injures the Companyor any Subsidiary;

 

**[3]          **Conviction of, or entering into a plea of *nolocontendere* to, a felony; or

 

**[4]          **Breach of any written covenant or agreementwith the Company or any Subsidiary, including the terms of this Plan.

 

**2.10**        **Code.**  The Internal Revenue Code of 1986, asamended, and any regulations issued under the Code and any applicable rulingsissued under the Code.

 

**2.11**        **Committee.**

 

**[1]          **In the case of Awards to Directors, the Board;or

 

**[2]          **In the case of all other Awards and forpurposes of Section 10.00 of this Plan, the Board’s Compensation Committeewhich also constitutes a “compensation committee” within the meaning of Treas.Reg. §1.162-27(c)(4).  The CompensationCommittee will be comprised of at least three individuals **[a]** each of whom is **[i] **anoutside director, as defined in Treas. Reg. §1.162-27(e)(3)(i) and **[ii] **a“non-employee” director within the meaning of Rule 16b-3 under the Act and **[iii]**an “independent director” as that term is defined in the corporate governancerules of the national securities exchange or other recognized market orquotation system upon or through which the Stock is then listed or traded and **[b]** noneof whom may receive remuneration from the Company or any Subsidiary in anycapacity other than as a director, except as permitted under Treas. Reg.§1.162-27(e)(3)(ii).

 

**2.12**        **Company.**  AirNet Systems, Inc., an Ohio corporation,and any and all successors to it.

 

**2.13        DirectorOption.**  A Nonstatutory Stock Option granted to anEligible Director under Section 6.05.

 

**2.14**        **Disability.**  Unless the Committee specifies otherwise inany applicable Award Agreement:

 

**[1]**           Withrespect to any Award (other than an Incentive Stock Option) or any Right toPurchase, the Participant’s inability to perform his or her normal duties for aperiod of at least six months due to a physical or mental infirmity; or

 

**[2]          **With respect to an Incentive Stock Option, asdefined in Code §22(e)(3).

 

**2.15**        **EffectiveDate. **The date this Plan isapproved by the Company’s shareholders.

 

**2.16        EligibleDirector. **An individual who, on an applicable Grant Date**[1]** isan elected member of the Board (or has been appointed to the Board to fill anunexpired term and will continue to serve at the expiration of that term onlyif elected by the Company’s shareholders) and **[2] **is not anEmployee.  For purposes of applying thisdefinition, an Eligible Director’s status will be determined as of the GrantDate applicable to each affected Award.

 

**2.17        Employee.**  Anyindividual who, on an applicable Grant Date, is a common law employee of theCompany or any Subsidiary.  A worker whois classified as other than a common law employee but who is subsequentlyreclassified as a common law employee of the Company or any Subsidiary for anyreason

 

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and on any basis will betreated as a common law employee only from the date of that determination andwill not retroactively be reclassified as an Employee for any purpose of thisPlan.

 

**2.18        ExercisePrice.**  Theprice at which a Member may exercise an Award.

 

**2.19**        **Fair MarketValue. **The value of oneshare of Stock on any relevant date, determined under the following rules:

 

**[1]**           Ifthe Stock is traded on a national securities exchange or other recognizedmarket or quotation system, the reported “closing price” on the relevant date,if it is a trading day; otherwise, on the next trading day;

 

**[2]**           Ifthe Stock is traded over-the-counter with no reported closing price, the meanbetween the lowest bid and the highest asked prices on that quotation system onthe relevant date if it is a trading day; otherwise, on the next trading day;or

 

**[3]**           Ifneither Section 2.19[1] nor Section 2.19[2] applies, the fair market value asdetermined by the Committee in good faith.

 

**2.20        FreestandingSAR.**  An SARthat is not associated with an Option and is granted under Section 9.00.

 

**2.21        Grant Date.**  The date an Award is granted to aParticipant.

 

**2.22**        **KeyEmployee.**  Any Employee who,on any applicable Grant Date, is performing services the Committee concludesare essential to the Company’s business success and to whom the Committee hasgranted an Award.

 

**2.23        Member. **Each Participant and Terminated Participant to whom an Award has beengranted, which Award has not expired under the terms of the Award Agreement oras provided in Section 11.00 and each Participant to whom Rights to Purchasehave been granted, which Rights to Purchase have not been exercised orterminated as provided in Section 10.00.

 

**2.24        NonstatutoryStock Option.**  Any Option granted under Section 6.00 thatis not an Incentive Stock Option.

 

**2.25        Offering.**  Anopportunity provided by the Committee to purchase shares of Stock under theprovisions of Section 10.00.  Offeringsmay be consecutive or concurrent, as determined by the Committee.  The Committee will designate the maximumnumber of shares of Stock that may be purchased under each Offering.  Shares of Stock not sold under one Offeringmay be offered again in any subsequent Offering.

 

**2.26        OfferingEffective Date.**  The first business day of the monthdesignated by the Committee as the start of the Offering Period applicable toan Offering.

 

**2.27        OfferingPeriod.**  The duration of an Offering, as designatedby the Committee.  The Offering Periodfor any Offering will not exceed 12 months.

 

**2.28**        **Option.**  The right granted under the Plan to purchasea share of Stock at a stated price for a specified period of time.  An Option may be either **[1]** an Incentive StockOption or **[2]** aNonstatutory Stock Option.

 

**2.29**        **Participant.**  Any Key Employee or Eligible Director whohas not Terminated.  In addition, forpurposes of Section 10.00, the term “Participant” will include any Employee whohas satisfied the requirements of Section 10.00 to acquire shares of Stockunder this Plan.

 

**2.30        PerformanceGoal.**  The conditions that must be met before a KeyEmployee will earn a Performance Share or a Performance Unit or, if theCommittee so determines, the conditions that must be met before a Key Employeeor an Eligible Director will earn shares of Restricted Stock.

 

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**2.31        PerformancePeriod.**  The period over which the Committee willdetermine if applicable Performance Goals have been met; provided such periodin any event will be at least one year.

 

**2.32        PerformanceShare.**  An Award granted under Section 8.00, whichis paid in Stock.

 

**2.33        PerformanceUnit.**  An Award granted under Section 8.00, whichis paid in cash.

 

**2.34**        **Plan.**  The AirNet Systems, Inc. 2004 StockIncentive Plan.

 

**2.35        PlanYear.**  The Company’s fiscal year.

 

**2.36        RestrictedStock.**  An Award granted under Section 7.00.

 

**2.37        RestrictionPeriod.**  The period over which the Committee willdetermine if a Key Employee or an Eligible Director has met the conditions,including, without limitation, Performance Goals, placed on Restricted Stock;provided such period will in any event be at least one year and provided,further, that if the conditions are time-based, such conditions will provide forvesting no sooner than ratably over a period of at least five years.

 

**2.38        Retirement.** Unless the Committee specifies otherwise in any applicable AwardAgreement, the date:

 

**[1]**           AKey Employee Terminates on or after the earliest of **[a]** reaching age 62 andcompleting at least five years of service as an Employee or**[b]** reaching age 55 andcompleting at least 10 years of service as an Employee or **[c]**satisfying such otherrequirements as to age and years of service as an Employee as the Committeespecifies in any applicable Award Agreement; or

 

**[2]**           AnEligible Director Terminates as a Board member after having been a Board memberfor at least one full one-year term.

 

Forpurposes of applying this definition, a Participant’s status as a Key Employeeor an Eligible Director will be determined as of the Grant Date applicable tothe affected Award.

 

**2.39        Rightto Purchase.**  An option to purchase shares of Stockgranted to a Participant who elects to participate in an Offering under theprovisions of Section 10.00.  A Right toPurchase granted for an Offering will terminate following the close of businesson the Right to Purchase Date for that Offering to the extent that such Rightto Purchase is not exercised on such Right to Purchase Date.

 

**2.40        Rightto Purchase Date.**  The last business day of an Offering Periodto purchase shares of Stock under the provisions of Section 10.00.

 

**2.41        SEC.**  TheSecurities and Exchange Commission or any successor thereto, including thestaff thereof.

 

**2.42        ShareAccount.**  An account established for each Participantin an Offering who exercises a Right to Purchase under Section 10.00.  A Participant’s Share Account will becredited with the number of shares of Stock purchased on each Right to PurchaseDate and debited for the number of shares of Stock withdrawn by the Participantafter such date.

 

**2.43**        **Stock.**  The common shares, $0.01 par value, of theCompany.

 

**2.44        StockAppreciation Right (or “SAR”).**  An Award granted under Section9.00 that is a Tandem SAR, an Affiliated SAR or a Freestanding SAR.

 

**2.45        Subsidiary.**  Anycorporation, partnership or other form of unincorporated entity of which theCompany owns, directly or indirectly, 50 percent or more of the total combinedvoting power of all classes of stock, if the entity is a corporation; or of thecapital or profits interest, if the entity is a partnership or another form ofunincorporated entity.

 

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**2.46        TandemSAR.**  An SAR that is associated with an Option andwhich expires when that Option expires or is exercised, as described in Section9.00.

** **

**2.47        Termination or Terminated. **Unless the Committeespecifies otherwise in any applicable Award Agreement, **[1] **cessation of theemployee-employer relationship between an Employee and the Company and allSubsidiaries for any reason or **[2]** cessation of an EligibleDirector’s service on the Board (and the boards of directors of allSubsidiaries) for any reason.

 

**3.00        PARTICIPATION**

 

**3.01        Termsof Participation.**

 

**[1]          **Consistent with the terms of the Plan, andsubject to Section 6.05, the Committee will:

 

**[a]**           Decide****whichEmployees and Eligible Directors may become Participants;

 

**[b]**           Decidewhich Participants will be granted Awards;

 

**[c]**           Identifythe type of Award to be granted to each Participant;

 

**[d]          **Identify the terms and conditions imposed onany Awards granted;

 

**[e]          **Identify the procedures through which an Awardmay be exercised;

 

**[f]           **Identify the circumstances under which theCompany may cancel an Award or reacquire any Award or shares of Stock acquiredthrough an Award;

 

**[g]          **Determine whether, to what extent and underwhat circumstances cash, shares of Stock, other securities, other Awards, otherproperty and other amounts payable with respect to an Award will be deferredeither automatically or at the election of the holder thereof or of theCommittee; and

 

**[h]          **Impose any other terms and conditions theCommittee believes are appropriate and necessary to implement the purpose ofthis Plan.

 

**[2]          **The Committee may establish different termsand conditions:

 

**[a]**           Foreach type of Award;

 

**[b]**           ForParticipants receiving the same type of Award; and

 

**[c]**           Forthe same Participant for each Award the Participant receives, whether or notthose Awards are granted at different times.

 

**3.02        Conditionsof Participation.**  Each Participant receiving an Award agrees:

 

**[1]**                                 To sign an Award Agreement;

 

**[2]**                                 To be bound by the terms of the AwardAgreement and the Plan; and

 

**[3]**                                 To comply with other conditions imposed by theCommittee.

 

**4.00**        **ADMINISTRATION**

 

**4.01        CommitteeDuties.**  The Committee is responsible foradministering the Plan and is granted all powers appropriate and necessary toadminister the Plan.  Consistent withthe Plan’s objectives, the Committee may adopt, amend and rescind rules andregulations relating to the Plan, to the extent appropriate to protect theCompany’s interests and has complete discretion to make all other decisions

 

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(including whether aParticipant has incurred a Disability or been Terminated for Cause) necessaryor advisable for the administration and interpretation of the Plan.  Any action by the Committee will be final,binding and conclusive for all purposes and upon all persons.

 

**4.02        Delegationof Ministerial Duties.**  In its sole discretion, the Committee maydelegate any ministerial duties associated with the Plan to any individual orentity (including Employees) that it deems appropriate.

 

**4.03        AwardAgreement.**              At the time any Award is made, theCommittee will prepare and deliver an Award Agreement to each affectedParticipant.  The Award Agreement:

 

**[1]**           Willdescribe:

 

**[a]**           Thetype of Award and when and how it may be exercised;

 

**[b]**           Theeffect of exercising the Award; and

 

**[c]**           AnyExercise Price associated with each Award.

 

**[2]**           Tothe extent different from the terms of the Plan, will describe:

 

**[a]**           Anyconditions that must be met before the Award may be exercised;

 

**[b]**           Anyobjective restrictions placed on Restricted Stock, Performance Shares andPerformance Units and any performance-related conditions and Performance Goalsthat must be met before those restrictions will be released;

 

**[c]**           Whenand how an Award may be exercised; and

 

**[d]**           Anyother applicable terms and conditions affecting the Award.

 

**4.04        Restrictionon Repricing.**  Regardless of any other provision of thisPlan, neither the Company nor the Committee may “reprice” (as defined underrules adopted by the national securities exchange or other recognized market orquotation system upon or through which the Stock then is listed or traded) anyOption without the prior approval of the shareholders of the Company.

 

**5.00        STOCK SUBJECT TO PLAN**

 

**5.01**        **Number ofShares of Stock.**  Subject toSection 5.03, the number of shares of Stock available for delivery under thePlan may not be greater than 1,000,000. The shares of Stock to be delivered under the Plan may consist, in wholeor in part, of treasury Stock or authorized but unissued Stock not reserved forany other purpose.

 

**5.02**        **Cancelled,Terminated or Forfeited Awards.** Any Stock subject to an Award or Right to Purchase that, for any reason,is cancelled, terminated or otherwise settled without the issuance of any Stockor cash may again be granted under the Plan. Any Performance Share or share of Restricted Stock that has been issuedto a Participant under the Plan and is subsequently forfeited pursuant to theterms of the Plan or the applicable Award Agreement will be forfeited to andacquired by the Company as treasury Stock and may again be granted under theterms of the Plan.

 

**5.03**        **Adjustmentin Capitalization.**  If, afterthe Effective Date, there is a Stock dividend or Stock split, recapitalization(including, without limitation, the payment of an extraordinary dividend),merger, consolidation, combination, spin-off, distribution of assets toshareholders, exchange of shares, or other similar corporate change affectingStock, the Committee will appropriately adjust **[1] **the number of sharesof Stock which may be delivered under the Plan, **[2] **the number of Awardsthat may or will be issued to Participants during a Plan Year, **[3]** thenumber of shares of Stock subject to outstanding Awards (as well as anyshare-based limits imposed under this Plan), **[4] **the respectiveExercise Price, number of shares and other limitations applicable tooutstanding or subsequently issued Awards, **[5]** the number of shares of 

 

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Stock and the purchase priceper share subject to purchase under Section 10.00 of the Plan and **[6]** anyother factors, limits or terms affecting any outstanding or subsequently issuedAwards.

 

**6.00        OPTIONS**

 

**6.01**        **Grant ofOptions.**  The Committee maygrant Options to Key Employees at any time during the term of this Plan.  Options granted to Key Employees may beeither **[1]** IncentiveStock Options or **[2]** Nonstatutory Stock Options.

 

**6.02**        **OptionPrice.**  Subject toSection 6.05, each Option will bear the Exercise Price the Committeespecifies in the Award Agreement. However:

 

**[1]** In the case of an Incentive Stock Option, theExercise Price **[a]** will not be less than the Fair Market Value of ashare of Stock on the Grant Date and **[b] **will be at least 110 percent ofthe Fair Market Value of a share of Stock on the Grant Date with respect to anyIncentive Stock Options issued to a Key Employee who, on the Grant Date, owns[as defined in Code §424(d)] Stock possessing more than 10 percent of thetotal combined voting power of all classes of Stock.

 

**[2]**In the case of a Nonstatutory Stock Option,the Exercise Price will not be less than the Fair Market Value of a share ofStock on the Grant Date.

 

**6.03**        **Exercise ofOptions.**  Subject to Section11.00, Options granted to a Key Employee under Section 6.01 may beexercised at the times and subject to the restrictions and conditions(including a vesting schedule) that the Committee specifies in the AwardAgreement.  However:

 

**[1]**           AnyOption to purchase a fraction of a share of Stock will be liquidated as of thedate it arises and the Participant will be given cash equal to Fair MarketValue multiplied by the fractional share.

 

**[2]          **Unless the Committee specifies otherwise inthe Award Agreement, no Key Employee may exercise Options for fewer than thesmaller of:

 

**[a]**           100shares of Stock; or

 

**[b]**           Thefull number of shares of Stock for which Options are then exercisable.

 

**[3]**           NoOption may be exercised more than 10 years after it is granted (five years inrespect of an Incentive Stock Option, if the Key Employee owns [as defined inCode §424(d)] Stock possessing more than 10 percent of total combined votingpower of all classes of Stock on the Grant Date).

 

**6.04**        **IncentiveStock Options.** Notwithstanding anything in the Plan to the contrary:

 

**[1]**           Noprovision of this Plan relating to Incentive Stock Options will be interpreted,amended or altered, nor will any discretion or authority granted under the Planbe exercised, in a manner that is inconsistent with Code §422 or, without theconsent of any affected Member, to cause any Incentive Stock Option to fail toqualify for the federal income tax treatment afforded under Code §421;

 

**[2]          **The aggregate Fair Market Value of the Stock(determined as of the Grant Date) with respect to which Incentive Stock Optionsare exercisable for the first time by any Member during any calendar year(under all option plans of the Company and all Subsidiaries) will not exceed$100,000 [or other amount specified in Code §422(d)]; and

 

**[3]          **No Incentive Stock Option may be granted toany individual who is not an Employee on the Grant Date.

 

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**6.05        Director Options.**

** **

**[1]          **Any individual who is a newly-elected orappointed Eligible Director after the Effective Date will be granted a DirectorOption to purchase 20,000 shares of Stock on the date of such EligibleDirector’s appointment or election to the Board.  Each Director Option granted in accordance with thisSection 6.05[1] will be granted with an Exercise Price equal to the FairMarket Value of a share of Stock on the Grant Date.  Each such Director Option will vest and become exercisable withrespect to 20% of the shares of Stock covered thereby on each of the Grant Dateand the first, second, third and fourth anniversaries of the Grant Date.

 

**[2]**           Onthe first business day of each Plan Year, each individual who **[a]** isthen serving as an Eligible Director and **[b]** has served for at least one fullone-year term as an Eligible Director, will be automatically granted a DirectorOption to purchase 4,000 shares of Stock with an Exercise Price equal to theFair Market Value of a share of Stock on the Grant Date.  Each such Director Option will vest andbecome exercisable with respect to 20% of the shares of Stock covered therebyon each of the Grant Date, and the first, second, third and fourth anniversariesof the Grant Date.

 

**[3]          **The Director Options granted underSections 6.05[1] and 6.05[2] will be reduced (but not below zero) by anyoptions granted for the same purpose under any other Company equity plan orprogram.

 

**[4]**           TheBoard will have the sole and complete authority to grant Director Options tothe Eligible Directors in addition to those nondiscretionary Director Optionsgranted in accordance with Sections 6.05[1] and 6.05[2]**. **The Board will have the authorityto determine the Grant Date of each such Director Option, the number of sharesof Stock covered by each such Director Option, and the date or dates when eachsuch Director Option becomes exercisable. Any Director Option granted by the Board in accordance with thisSection 6.05[4] will be granted with an Exercise Price equal to the FairMarket Value of a share of Stock on the Grant Date.

 

**[5]**           Ifan Eligible Director Terminates because of death, Disability or Retirement, theEligible Director’s Director Options will become fully vested and exercisable.

 

**[6]**           Subjectto Sections 6.05[7] and 11.00, once vested and exercisable, each DirectorOption will remain exercisable until the earlier to occur of **[a]** tenyears after the Grant Date, or **[b]** three months after the EligibleDirector Terminates (24 months if Termination is because of death, Disabilityor Retirement).

 

**[7]          **However:

 

**[a]**           AnyDirector Option to purchase a fraction of a share of Stock will be liquidatedas of the date it arises and the Eligible Director will be given cash equal toFair Market Value multiplied by the fractional share;

 

**[b]          **Unless the Committee specifies otherwise inthe Award Agreement, no Eligible Director may exercise Director Options forfewer than the smaller of:

 

**[i]**                                    100 shares of Stock; or

 

**[ii]**                                The full number of shares of Stock for whichDirector Options are then exercisable.

 

**6.06        Paymentfor Options.**  Unless the Committee specifies otherwise inthe Award Agreement, the Exercise Price associated with each Option must bepaid in cash.  However, the Committeemay, in its discretion, develop, and extend to some or all Members, proceduresthrough which Members may pay an Option’s Exercise Price, including allowing aMember to tender Stock he or she already has owned for at least six monthsbefore the exercise date, either by actual delivery of the previously ownedStock or by attestation, valued at its Fair Market Value on the exercise date,as partial or full payment of the Exercise Price.

 

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**6.07        Transferabilityof Stock.**  Unless the Committee specifiesotherwise in the Award Agreement,** **Stockacquired through an Option will be transferable, subject to applicable federalsecurities laws, the requirements of any national securities exchange or otherrecognized market or quotation system upon or through which the Stock is thenlisted or traded, or any applicable blue sky or state securities laws.

 

**7.00        RESTRICTED STOCK**

 

**7.01        Restricted Stock Grants.**  The Committee may grant Restricted Stock toKey Employees or Eligible Directors at any time during the term of thisPlan.  The Committee also will includein the Restricted Stock Award Agreement applicable restrictions, which may varybetween Key Employees and Eligible Directors, may be different each time aRestricted Stock Award is made and may be either time-based or subject to thePerformance Goals described in Section 8.02[2] or both.

 

**7.02        Transferability.**  Shares of Restricted Stock may not be sold,transferred, pledged, assigned or otherwise alienated or hypothecated until theend of the applicable Restriction Period. Restricted Stock normally will be held by the Company as escrow agentduring the Restriction Period and will be distributed as described in Section7.03.  However, at any time during theRestriction Period, the Committee may, in its sole discretion, issue RestrictedStock (provided such Restricted Stock is not subject to Performance Goals) to aKey Employee or an Eligible Director in the form of certificates containing alegend describing restrictions imposed on such Restricted Stock.

 

**7.03        Removal of Restrictions.**  As of the end of each Restriction Period:

 

**[1]          **the Committee willcertify to the Board the extent to which restrictions, including any applicablePerformance Goals, in respect of Restricted Stock granted to Key Employees havebeen met; and

 

**[2]          **the Board will determinethe extent to which restrictions, including any applicable Performance Goals,in respect of Restricted Stock granted to Eligible Directors have been met.

 

Shares of Restricted Stock will be:

 

**[a]**           Forfeited,if all restrictions, including any applicable Performance Goals, have not beenmet at the end of the Restriction Period, and again become available to begranted under the Plan; or

 

**[b]**           Releasedfrom escrow and distributed to the affected Key Employee or Eligible Director(or any restrictions imposed on the distributed certificate removed) as soon aspracticable after the last day of the Restriction Period, if all restrictions,including any applicable Performance Goals, have then been met.

 

**7.04        Rights Associated with Restricted Stock.**  During the Restriction Period:

 

**[1]**           KeyEmployees and Eligible Directors may exercise full voting rights associatedwith their Restricted Stock; and

 

**[2]**           Anydividends and other distributions paid with respect to any Restricted Stock willbe held by the Company as escrow agent during the Restriction Period.  At the end of the Restriction Period, thesedividends will be distributed to the affected Key Employee or Eligible Directoror forfeited as provided in Section 7.03 with respect to the Restricted Stockas to which they were paid.  No interestor other accretion will be credited with respect to any dividends held in thisescrow account.  If any dividends orother distributions are paid in shares of Stock, those shares will be subjectto the same restrictions on transferability and forfeitability as the shares ofRestricted Stock with respect to which they were issued.

 

**8.00.       PERFORMANCESHARES AND PERFORMANCE UNITS**

 

**8.01        Performance Shares and Performance UnitGrants.**  The Committee may grantPerformance Shares or Performance Units to Key Employees at any time during theterm of this Plan.

 

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**8.02        PerformanceCriteria.**

 

**[1]**           Foreach Performance Period, the Committee will establish the Performance Goal(s)that will be applied to determine the Performance Shares or Performance Unitsthat will be distributed at the end of the Performance Period.

 

**[2]          **In establishing each Participant’s PerformanceGoal(s), the Committee will consider the relevance of each Participant’sassigned duties and responsibilities to factors that preserve and increase theCompany’s value.  These factors willinclude:

 

**[a]**           Increasingrevenues;

 

**[b]**           Developing****newservices and lines of revenue;

 

**[c]**           Reducingoperating expenses;

 

**[d]**           Increasingcustomer satisfaction;

 

**[e]**           Developingnew markets and increasing the Company’s share of existing markets;

 

**[f]**            Developingand managing relationships with regulatory and other governmental agencies;

 

**[g]**           Managingcash, accounts receivable, accounts payable and other current assets andcurrent liabilities;

 

**[h]**           Managingclaims against the Company, including litigation;

 

**[i]**            Identifyingand completing strategic acquisitions;

 

**[j]**            Increasingthe Company’s book value;

 

**[k]          **Increasing the Company’s return onshareholders’ equity;

 

**[l]**            Increasingthe Company’s return on capital;

 

**[m]**          Increasingthe Company’s return on assets;

 

**[n]**           Increasingthe Company’s cash flows from operating activities;

 

**[o]**           Increasingthe Company’s net income; and

 

**[p]**           Increasingthe Company’s net income per share.

 

**[3]**           TheCommittee will make appropriate adjustments to Performance Goals to reflect:

 

**[a]**           Theeffect on any Performance Goal of any Stock dividend or Stock split,recapitalization (including, without limitation, the payment of anextraordinary dividend), merger, consolidation, combination, spin-off,distribution of assets to shareholders, exchange of shares or similar corporatechange.  This adjustment to the PerformanceGoal will be made **[i] **to the extent the Performance Goalis based on Stock, **[ii] **as of the effective date of theevent and **[iii] **forthe Performance Period in which the event occurs.  Also, the Committee will make a similar adjustment to any portionof a Performance Goal that is not based on Stock but which is affected by anevent having an effect similar to those just described.

 

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**[b]**           Asubstantive change in a Participant’s job description or assigned duties andresponsibilities.

 

**[4]**           PerformanceGoals will be established and communicated to each affected Participant in anAward Agreement no later than 90 days after the beginning of the applicablePerformance Period.

 

**8.03        Earning Performance Shares andPerformance Units.**  As of the end of each Performance Period, theCommittee will certify to the Board the extent to which each Participant has orhas not met his or her Performance Goal. Performance Shares or PerformanceUnits will be:

 

**[1]**           Forfeited,to the extent that Performance Goals have not been met at the end of thePerformance Period, and any shares of Stock subject thereto will again becomeavailable to be granted under the Plan; or

 

**[2]**           Valuedand distributed, in a single lump sum, to the Key Employees, in the form ofcash, in respect of Performance Units, or Stock, in respect of PerformanceShares, as soon as practicable after the last day of the Performance Period, tothe extent that related Performance Goals have been met.

 

**8.04        Rights Associated with PerformanceShares. **During the PerformancePeriod, and unless the Award Agreement provides otherwise:

 

**[1]**           KeyEmployees may exercise full voting rights associated with their PerformanceShares; and

 

**[2]**           Alldividends and other distributions paid with respect to any Performance Shareswill be held by the Company as escrow agent during the Performance Period.  At the end of the Performance Period, thesedividends will be distributed to the Key Employees or forfeited as provided inSection 8.03 with respect to the Performance Shares to which they relate.  No interest or other accretion will becredited with respect to any dividends held in this escrow account.  If any dividends or other distributions arepaid in shares of Stock, those shares will be subject to the same restrictionson transferability and forfeitability as the Performance Shares with respect towhich they were issued.

 

**9.00        STOCK APPRECIATION RIGHTS**

 

**9.01        SAR Grants.**  Subject to the terms of the Plan, theCommittee may grant Affiliated SARs, Freestanding SARs and Tandem SARs (or acombination of each) to Key Employees at any time during the term of this Plan.

 

**9.02        Exercise Price.**  Unless the Committee specifies otherwise inthe Award Agreement, the Exercise Price specified in the Award Agreement will:

 

**[1]**           In thecase of an Affiliated SAR, not be less than 100 percent of the Fair MarketValue of a share of Stock on the Grant Date;

 

**[2]**           In thecase of a Freestanding SAR, not be less than 100 percent of the Fair MarketValue of a share of Stock on the Grant Date; and

 

**[3]**           In thecase of a Tandem SAR, not be less than the Exercise Price of the relatedOption.

 

**9.03        Exercise of Affiliated SARs.**  Affiliated SARs will be deemed to beexercised on the date the related Option is exercised.  However:

 

**[1]**           AnAffiliated SAR will expire no later than the date the related Option expires oris exercised;

 

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**[2]**           Thevalue of the payout with respect to the Affiliated SAR will not be more thanthe Exercise Price of the related Option; and

** **

**[3]**           AnAffiliated SAR may be exercised only if the Fair Market Value of the shares ofStock subject to the related Option is greater than the Exercise Price of therelated Option.

 

**9.04        Exercise of Freestanding SARs.**  Freestanding SARs will be exercisable subjectto the terms specified in the Award Agreement.

 

**9.05        Exercise of Tandem SARs.**  Tandem SARs may be exercised with respect toall or part of the shares of Stock subject to the related Option bysurrendering the right to exercise the equivalent portion of the relatedOption.  A Tandem SAR may be exercisedonly with respect to the shares of Stock for which its related Option is thenexercisable.  However:

 

**[1]**           A TandemSAR will expire no later than the date the related Option expires;

 

**[2]**           Thevalue of the payout with respect to the Tandem SAR will not be more than 100percent of the difference between the Exercise Price of the related Option andthe Fair Market Value of a share of Stock subject to the related Option at thetime the Tandem SAR is exercised; and

 

**[3]**           A TandemSAR may be exercised only if the Fair Market Value of a share of Stock subjectto the Option is greater than the Exercise Price of the related Option.

 

**9.06        Settling SARs.**

 

**[1]**           A Memberexercising a Tandem SAR or a Freestanding SAR will receive an amount equal to:

 

**[a]**           Thedifference between the Fair Market Value of a share of Stock on the exercisedate and the Exercise Price, multiplied by

 

**[b]**           Thenumber of shares of Stock with respect to which the Tandem SAR or FreestandingSAR is exercised.

 

**[2]**           A Memberwill not receive any cash or other amount when exercising an AffiliatedSAR.  Instead, the value of theAffiliated SAR being exercised will be applied to reduce (but not below zero)the Exercise Price of the related Option.

 

At the discretion of the Committee, the value of anyTandem SAR or Freestanding SAR being exercised will be settled in cash, sharesof Stock or any combination of both.

 

**10.00 STOCK PURCHASE PROGRAM**

 

**10.01      Eligibility.**  Each Employee whose employment with the Companyor a Subsidiary commenced prior to an Offering Effective Date will be eligibleto participate in the Offering which is applicable to such Offering EffectiveDate.  Nothing contained herein and norules and regulations prescribed by the Committee may permit or denyparticipation in any Offering contrary to the requirements of the Code(including, without limitation, Code §§ 423(b)(3), 423(b)(4) and423(b)(8)).  Nothing contained hereinand no rules and regulations prescribed by the Committee may permit anyParticipant to be granted a Right to Purchase:

 

**[1]          **if, immediately aftersuch Right to Purchase is granted, such Participant would own, and/or holdoutstanding options or rights to purchase, shares of the Company or of anySubsidiary, possessing five percent or more of the total combined voting poweror value of all classes of shares of the Company or such Subsidiary; or

 

**[2]**           whichpermits a Participant’s rights to purchase shares of Stock under all employeestock purchase plans of the Company and of its Subsidiaries to accrue at a rate which exceeds Twenty-

 

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FiveThousand Dollars ($25,000) of Fair Market Value of shares of Stock (determinedas of the date such Right to Purchase is granted) for each calendar year inwhich such Right to Purchase is outstanding at any time.

 

Forpurposes of Section 10.01[1] above, the provisions of Code § 424(d) will apply in determining thestock ownership of each Participant. For purposes of Section 10.01[2] above, the provisions ofCode § 423(b)(8) will apply in determining whether a Participant’s Rightsto Purchase and other rights are permitted to accrue at a rate in excess of thepermitted rate.

 

**10.02      Purchase Price. **The purchase price for a share of Stock undereach Offering will be determined by the Committee prior to the OfferingEffective Date and will be stated as a percentage of the Fair Market Value of ashare of Stock on either the Right to Purchase Date or the Offering EffectiveDate, whichever is the lesser, but the purchase price may not be less than thelesser of 85 percent of the Fair Market Value of a share of Stock as of theOffering Effective Date or 85 percent of the Fair Market Value of a share ofStock as of the Right to Purchase Date for the Offering.

 

**10.03      Participation in Offerings. **Except as maybe otherwise provided for herein, each Employee who is eligible for and electsto participate in an Offering will be granted Rights to Purchase for as manyshares of Stock as the Participant may elect to purchase during that Offering,to be paid by payroll deductions during such period.  The Committee will establish administrative rules and regulationsregarding the payroll deduction process for this Section 10.00, including,without limitation, minimum and maximum permissible deductions; the timing forinitial elections, changes in elections and suspensions of elections during anOffering Period; and the complete withdrawal by a Participant from anOffering.  Amounts withheld throughpayroll deductions under this Section 10.03 will be credited to eachParticipant’s Cash Account.  Suchamounts will be delivered to a custodian for the Plan and held pending thepurchase of shares of Stock as described in Section 10.05.  Amounts held in a Participant’s Cash Accountwill not bear interest.  If aParticipant withdraws entirely from an Offering (pursuant to rules establishedby the Committee), the Participant’s Cash Account balance will not be used topurchase shares of Stock on the Right to Purchase Date.  Instead, the portion of the Cash Accountequal to the Participant’s payroll deductions under the Plan during theOffering Period will be refunded to the Participant without interest.  Such a Participant will not be eligible tore-enroll in that Offering, but may resume participation on the OfferingEffective Date for the next Offering. In addition, the Committee may impose such other restrictions on theright to withdraw from Offerings as it may deem appropriate.

 

**10.04      Grant of Rights to Purchase. **Rights toPurchase with respect to shares of Stock will be granted to Participants whoelect to participate in an Offering. Such Rights to Purchase may be exercised on the Right to Purchase Dateapplicable to the Offering.  The numberof shares of Stock subject to Rights to Purchase on each Right to Purchase Datemay not exceed the number of shares of Stock authorized for issuance during theapplicable Offering.

 

**10.05      Exercise of Rights to Purchase. **EachRight to Purchase will be exercised on the applicable Right to PurchaseDate.  Each Participant automaticallyand without any act on the Participant’s part will be deemed to have exerciseda Right to Purchase on each Right to Purchase Date to purchase the number ofwhole and fractional shares of Stock which the amount in his or her CashAccount at that time is sufficient to purchase at the applicable purchaseprice.  Any remaining amount credited toa Participant’s Cash Account after such application will remain in such Participant’sCash Account for use in the next Offering unless withdrawn by theParticipant.  The Company will deliverto the custodian of the Plan as soon as practicable after each Right toPurchase Date a certificate for the total number of shares of Stock purchasedby all Participants on such Right to Purchase Date.  The custodian will allocate the proper number of shares of Stockto the Share Account of each Participant. If the aggregate Cash Account balances of all Participants on any Rightto Purchase Date exceed the amount required to purchase all of the shares ofStock subject to Rights to Purchase on that Right to Purchase Date, then theshares of Stock subject to Rights to Purchase will be allocated pro rata amongthe Participants in the proportion that the number of shares of Stock subject toRights to Purchase bears to the number of shares of Stock that could have beenpurchased with such aggregate amount available, if an unlimited number ofshares of Stock were available for purchase. Any balances remaining in Participants’ Cash Accounts due to oversubscription will remain in the Participants’ Cash Accounts for use in the nextOffering unless withdrawn by the respective Participants.

 

**10.06**      **Withdrawalsfrom Share Accounts and Dividend Reinvestment.**  A Participant may withdraw the shares ofStock credited to the Participant’s Share Account on a first-in-first-outbasis.  The Committee will establishrules and regulations governing such withdrawals.  All cash dividends paid, if any, with respect

 

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to the shares of Stock creditedto a Participant’s Share Account will be added to the Participant’s CashAccount and thereby will be applied to exercise Rights to Purchase for sharesof Stock on the Right to Purchase Date next succeeding the date such cashdividends are paid by the Company.  Anelection to leave shares of Stock with the custodian will constitute anelection to apply the cash dividends with respect to such shares of Stock tothe exercise of Rights to Purchase under this Section 10.00.  Shares of Stock so purchased will be appliedto the shares of Stock credited to each Participant’s Share Account.

 

**10.07      Termination. **If a Participant Terminates for any reason,including death, Disability, Retirement or other cause, his or her participationin this Section 10.00 of the Plan will automatically and without any acton his or her part terminate as of the date of Termination.  As soon as practicable following theParticipant’s Termination, the Company will refund to such Participant (or Beneficiary,in the case of the Participant’s death) any amount in the Participant’s CashAccount which constitutes payroll deductions, without interest, and thecustodian will deliver to such Participant (or Beneficiary) a share certificateissued in the Participant’s (or Beneficiary’s) name for the number of wholeshares of Stock credited to the Participant’s Share Account through priorOfferings.

 

**10.08**      **Effect ofMerger or Liquidation Involving the Company. **If the Company undergoes a merger or consolidation of theCompany or reclassification of Stock or the exchange of Stock for thesecurities of another entity (other than a Subsidiary) that has acquired theCompany’s assets or which is in control [as defined in Code § 368(c)] ofan entity that has acquired the Company’s assets and the terms of the plan oragreement are binding on all holders of Stock (except to the extent thatdissenting shareholders are entitled to relief under applicable law), then theCommittee may, in connection with any such transaction, cancel each outstandingRight to Purchase and refund sums previously collected from Participants underthe canceled Rights to Purchase, or, in its discretion, cause each Participantwith outstanding Rights to Purchase to have his or her Rights to Purchaseexercised immediately prior to such transaction and thereby the balance of hisor her Cash Account applied to the purchase of shares of Stock at the purchaseprice in effect for that Offering, which would be treated as ending with theeffective date of such transaction.  Thebalances of the Cash Accounts not so applied will be refunded to theParticipants, without interest.

 

**11.00      TERMINATION/BUY OUT**

 

**11.01      Retirement. **Unlessotherwise specified in the Award Agreement, all Awards, that are outstanding (whetheror not then fully vested and exercisable) when a Participant Retires, willbecome fully vested and exercisable and may be exercised at any time before theearlier of **[1]** the expiration date specified in the Award Agreementor **[2]** 24months (three months in the case of Incentive Stock Options) beginning on theRetirement date (or any shorter period specified in the Award Agreement).

 

**11.02      Death or Disability.** Unless otherwise specified in the Award Agreement, all Awards, that areoutstanding (whether or not then fully vested and exercisable) when aParticipant Terminates because of death or Disability, will become fully vestedand exercisable and may be exercised by the Participant or the Participant’sBeneficiary at any time before the earlier of **[1]** the expiration datespecified in the Award Agreement or **[2]** 24 months (12 months in the caseof an Incentive Stock Option) beginning on the date of death or Terminationbecause of Disability (or any shorter period specified in the Award Agreement).

 

**11.03      Termination for Cause.** Unless otherwise specified in the Award Agreement, all Awards that areoutstanding (whether or not then exercisable) if a Participant Terminates forCause will be forfeited.

 

**11.04      Termination for any Other Reason.** Unless otherwise specified in the Award Agreement or subsequently, anyAwards that are outstanding when a Participant Terminates for any reason notdescribed in Sections 11.01 through 11.03 and which are then exercisable, orwhich the Committee has, in its sole discretion, decided to make exercisable,may be exercised at any time before the earlier of **[1]** the expiration datespecified in the Award Agreement or **[2]** three months beginning on the datethe Participant Terminates.

 

**11.05      Limits on Exercisability/Forfeiture ofExercised Awards.**  Regardless of any other provision of thisSection 11.00 or the Plan and unless the Committee specifies otherwise inthe Award Agreement, a Member who fails to comply with Sections 11.05[3]through [9] will:

 

**[1]**           Forfeitall outstanding Awards; and

 

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**[2]**           Forfeitall shares of Stock or cash (including dividends held in escrow under Sections7.04[2] and 8.04[2] acquired or received by the exercise of any Award, lapse ofany restrictions or attainment of any Performance Goals on the date ofTermination or within six months before and 24 months after Terminating,including any amounts received under a “buy out” as described in Section 11.06.

 

Theforfeiture described in Sections 11.05[1] and [2] will apply if the Member:

 

**[3]**           Withoutthe Committee’s written consent, which may be withheld for any reason or for noreason, serves (or agrees to serve) as an officer, director, consultant oremployee of any proprietorship, partnership, corporation, limited liabilitycompany, association or other entity or becomes the owner of a business or amember of a partnership, limited liability company, association or other entitythat competes with any portion of the Company’s (or a Subsidiary’s) business withwhich the Member has been involved anytime within five years before Terminationor renders any service (including, without limitation, business consulting) toentities that compete with any portion of the Company’s (or a Subsidiary’s)business with which the Member has been involved anytime within five yearsbefore Termination;

 

**[4]          **Refuses or fails to consult with, supplyinformation to or otherwise cooperate with the Company or any Subsidiary afterhaving been requested to do so;

 

**[5]          **Deliberately engages in any action that theCommittee concludes has caused substantial harm to the interests of the Companyor any Subsidiary;

 

**[6]**           Withoutthe Committee’s written consent, which may be withheld for any reason or for noreason, on his or her own behalf or on behalf of any other person, partnership,limited liability company, association, corporation or other entity, solicitsor in any manner attempts to influence or induce any employee of the Company ora Subsidiary to leave the Company’s or Subsidiary’s employment or uses ordiscloses to any person, partnership, limited liability company, association,corporation or other entity any information obtained while an employee ordirector of the Company or any Subsidiary concerning the names and addresses ofthe Company’s and any Subsidiary’s employees;

 

**[7]**           Withoutthe Committee’s written consent, which may be withheld for any reason or for noreason, discloses confidential and proprietary information relating to theCompany’s and its Subsidiaries’ business affairs (“Trade Secrets”), includingtechnical information, information about services provided and business andmarketing plans, strategies, customer information and other informationconcerning the Company’s and Subsidiaries’ services, promotions, development, financing,expansion plans, business policies and practices, salaries and benefits andother forms of information considered by the Company to be proprietary andconfidential and in the nature of Trade Secrets;

 

**[8]**           Failsto return all property (other than personal property), including keys, notes,memoranda, writings, lists, files, reports, customer lists, correspondence,tapes, disks, cards, surveys, maps, logs, machines, technical data, or anyother tangible property or document and any and all copies, duplicates orreproductions that have been produced by, received by or otherwise beensubmitted to the Member in the course of his or her service with the Company ora Subsidiary; or

 

**[9]**           Engagedin conduct that the Committee reasonably concludes would have given rise to aTermination for Cause had it been discovered before the Participant Terminated.

 

**11.06      Buy Out of Awards.**  At any time, the Committee, inits sole discretion and without the consent of the affected Member, may cancelany or all outstanding Awards held by that Member, whether or not exercisable,by providing to that Member written notice (“Buy Out Notice”) of its intentionto exercise the rights reserved in this Section 11.06.  If a Buy Out Notice is given, in the case ofan Option, the Company also will pay to each affected Participant thedifference between **[1]** the Fair Market Value of the Stockunderlying each exercisable Option (or portion of an Option) to be cancelledand **[2]** theExercise Price associated with each exercisable Option to be cancelled.  With respect to any Award other than anOption, the Company will pay to each affected Participant the Fair Market Valueof the Stock subject to the Award.

 

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However, unless otherwisespecified in the Award Agreement, no payment will be made with respect to anyAwards that are not exercisable when cancelled under thisSection 11.06.  The Company willcomplete any buy out made under this Section 11.06 as soon asadministratively possible after the date of the Buy Out Notice.  At the Committee’s option, payment of thebuy out amount may be made in cash, in whole shares of Stock or partly in cashand partly in shares of Stock.  Thenumber of whole shares of Stock, if any, included in the buy out amount will bedetermined by dividing the amount of the payment to be made in shares of Stockby the Fair Market Value as of the date of the Buy Out Notice.

 

**12.00  MERGER, CONSOLIDATION OR SIMILAR EVENT**

 

Ifthe Company undergoes a merger or consolidation of the Company orreclassification of Stock or the exchange of Stock for the securities ofanother entity (other than a Subsidiary) that has acquired the Company’s assetsor which is in control [as defined in Code §368(c)] of an entity that hasacquired the Company’s assets and the terms of that plan or agreement arebinding on all holders of Stock (except to the extent that dissentingshareholders are entitled to relief under applicable law), then:  **[a]** all Options will become fullyexercisable and each affected Participant will receive, upon payment of theExercise Price, if applicable, securities or cash, or both, equal to those theParticipant would have been entitled to receive under the Plan or AwardAgreement if the Participant had already exercised the Options, **[b]** allSARs will become fully exercisable, **[c]** all restrictions on RestrictedStock will lapse; and **[d] **all Performance Goals associatedwith Restricted Stock, Performance Shares or Performance Units will be deemedto have been met and all Performance Periods accelerated.

 

**13.00    AMENDMENT, MODIFICATION ANDTERMINATION OF PLAN**

 

TheBoard or the Committee may terminate, suspend or amend the Plan at any timewithout shareholder approval except to the extent that shareholder approval isrequired to satisfy applicable requirements imposed by **[1]** Rule 16b-3 under theAct, or any successor rule or regulation, **[2]** applicable provisions of the Codeor **[3]** anynational securities exchange or other recognized market or quotation systemupon or through which the Company’s securities are listed or traded.  Also, no Plan amendment may **[4]** resultin the loss of a Committee member’s status as a “non-employee director” asdefined in Rule 16b-3 under the Act, or any successor rule or regulation, withrespect to any employee benefit plan of the Company, **[5]** cause the Plan tofail to meet requirements imposed by Rule 16b-3 or **[6]** without the consentof the affected Member, adversely affect any Award issued before the amendment,modification or termination.  However,nothing in this Section 13.00 will restrict the Committee’s right toexercise the discretion retained in Section 11.06.

 

**14.00      MISCELLANEOUS**

 

**14.01      Assignability.** Except as described in this Section 14.01, an Award or Right toPurchase may not be transferred except by will or the laws of descent anddistribution and, during the Member’s lifetime, may be exercised only by theMember, the Member’s guardian or legal representative.  However, with the Committee’s writtenconsent (which may be withheld for any reason or for no reason), a Member or aspecified group of Members may transfer Awards (other than Incentive StockOptions) to a revocable inter vivos trust, of which the Member is the settlor,or may transfer Awards (other than an Incentive Stock Option) to any member ofthe Member’s immediate family, any trust, whether revocable or irrevocable,established solely for the benefit of the Member’s immediate family, or anypartnership or limited liability company whose only partners or members aremembers of the Member’s immediate family (“Permissible Transferees”).  Any Award transferred to a PermissibleTransferee will continue to be subject to all of the terms and conditions thatapplied to the Award before the transfer and to any other rules prescribed bythe Committee.  A Permissible Transfereemay not retransfer an Award except by will or the laws of descent anddistribution and then only to another Permissible Transferee.

 

**14.02      Beneficiary Designation.**  EachMember may name a Beneficiary or Beneficiaries (who may be named contingentlyor successively) to receive or to exercise any vested Award that is unpaid orunexercised at the Member’s death.  Eachdesignation made will revoke all prior designations made by the same Member,must be made on a form prescribed by the Committee and will be effective onlywhen filed in writing with the Committee. If a Member has not made an effective Beneficiary designation, thedeceased Member’s Beneficiary will be his or her surviving spouse or, if none,the deceased Member’s estate.  Theidentity of a Member’s designated Beneficiary will be based only on theinformation included in the latest beneficiary designation form completed bythe Member and will not be inferred from any other evidence.

 

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**14.03      No Guarantee of Employment orParticipation.**  Nothing in the Plan may be construed as:

 

**[1]**           Interferingwith or limiting the right of the Company or any Subsidiary to Terminate anyEmployee’s employment at any time;

 

**[2]**           Conferringon any Participant any right to continue as an Employee or director of theCompany or any Subsidiary;

 

**[3]**           Guaranteeingthat any Employee will be selected to be a Key Employee; or

 

**[4]**           Guaranteeingthat any Member will receive any future Awards.

 

**14.04      Tax Withholding.**

 

**[1]**           TheCompany will withhold from other amounts owed to the Member, or require aMember to remit to the Company, an amount sufficient to satisfy federal, stateand local withholding tax requirements on any Award, exercise or cancellationof an Award or purchase of Stock.  Ifthese amounts are not to be withheld from other payments due to the Member (orif there are no other payments due to the Member), the Company will deferpayment of cash or issuance of shares of Stock until the earlier of:

 

**[a]**           30days after the settlement date; or

 

**[b]**           Thedate the Member remits the required amount.

 

**[2]**           Ifthe Member has not remitted the required amount within 30 days after thesettlement date, the Company will permanently withhold from the value of theAwards to be distributed the minimum amount required to be withheld to complywith applicable federal, state and local income, wage and employment taxes anddistribute the balance to the Member.

 

**[3]**           Inits sole discretion, which may be withheld for any reason or for no reason, theCommittee may permit a Member to elect, subject to conditions the Committeeestablishes, to reimburse the Company for this tax withholding obligationthrough one or more of the following methods:

 

**[a]**           Byhaving shares of Stock otherwise issuable under the Plan withheld by theCompany (but only to the extent of the minimum amount that must be withheld tocomply with applicable state, federal and local income, employment and wage taxlaws);

 

**[b]**           Bydelivering to the Company previously acquired shares of Stock that the Memberhas owned for at least six months;

 

**[c]**           Byremitting cash to the Company; or

 

**[d]          **By remitting a personal check immediatelypayable to the Company.

 

**14.05**      **Indemnification.**  Each individual who is or was a member ofthe Committee or of the Board will be indemnified and held harmless by theCompany against and from any loss, cost, liability or expense that may beimposed upon or reasonably incurred by him or her in connection with orresulting from any claim, action, suit or proceeding to which he or she may bemade a party or in which he or she may be involved by reason of any actiontaken or failure to take action under the Plan as a Committee member andagainst and from any and all amounts paid, with the Company’s approval, by himor her in settlement of any matter related to or arising from the Plan as aCommittee member or paid by him or her in satisfaction of any judgment in anyaction, suit or proceeding relating to or arising from the Plan against him orher as a Committee member, but only if he or she gives the Company anopportunity, at its own expense, to handle and defend the matter before he orshe undertakes to handle and defend it in his or her own behalf.  The right of indemnification described inthis Section 14.05 is not exclusive and is independent of any other rights ofindemnification to which the individual may be entitled under the Company’sorganizational documents, by contract, as a matter of law or otherwise.

 

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**14.06**      **NoLimitation on Compensation.** Nothing in the Plan is to be construed to limit the right of the Companyto establish other plans or to pay compensation to its employees or directors,in cash or property, in a manner not expressly authorized under the Plan.

 

**14.07**      **Requirementsof Law.**  The grant of Awardsand Rights to Purchase and the issuance of shares of Stock will be subject toall applicable laws, rules and regulations and to all required approvals of anygovernmental agencies or national securities exchange, market or otherquotation system.  Also, no shares ofStock will be issued under the Plan unless the Company is satisfied that theissuance of those shares of Stock will comply with applicable federal and statesecurities laws.  Certificates forshares of Stock delivered under the Plan may be subject to any stock transferorders and other restrictions that the Committee believes to be advisable underthe rules, regulations and other requirements of the SEC, any nationalsecurities exchange or other recognized market or quotation system upon orthrough which the Stock is then listed or traded, or any other applicablefederal or state securities law.  TheCommittee may cause a legend or legends to be placed on any certificates issuedunder the Plan to make appropriate reference to restrictions within the scopeof this Section 14.07.

 

**14.08**      **Term ofPlan.**  The Plan will beeffective upon its adoption by the Board and approval by the affirmative voteof the holders of a majority of the shares of voting stock present in person orrepresented by proxy at the first Annual Meeting occurring after the Boardapproves the Plan.  Subject to Section13.00, the Plan will continue until the tenth anniversary of the date it isadopted by the Board or approved by the Company’s shareholders, whichever isearliest.

 

**14.09**      **GoverningLaw.**  The Plan, and allagreements hereunder, will be construed in accordance with and governed by thelaws (other than laws governing conflicts of laws) of the United States and theState of Ohio.

 

**14.10**      **No Impact onBenefits.**  Plan Awards areincentives designed to promote the objectives described in Section 1.00.  Also, Awards are not compensation forpurposes of calculating a Member’s rights under any employee benefit plan.

 

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