Exhibit 10.34


    Exhibit
      10.34

     

    INTERACTIVE
      INTELLIGENCE, INC.

    2006
      EQUITY INCENTIVE PLAN

     

    	1.  	
            Establishment,
              Objectives and Duration.

          


     

    (a)  Establishment
      of the Plan.
      Interactive Intelligence, Inc. hereby establishes the 2006 Equity Incentive
      Plan
      (“Plan”). The Plan is effective upon its approval by the Company’s shareholders
      at the 2006 Annual Meeting (“Effective Date”).

     

    (b)  Objectives
      of the Plan.
      The
      Plan’s objectives are to attract and retain the best available personnel for
      positions of substantial responsibility, to provide additional incentives to
      Participants, and to optimize the profitability and growth of the Company
      through incentives that are consistent with the Company’s goals and that link
      Participants’ personal interests to those of the Company’s
      shareholders.

     

    (c)  Duration
      of the Plan.
      No
      Award may be granted under the Plan after the day immediately preceding the
      10th
      anniversary of the Effective Date. The Plan will remain in effect with respect
      to outstanding Awards until no Awards remain outstanding.

     

    	2.  	
            Definitions.
              As
              used in the Plan, the following definitions will
              apply:

          


     

    (a)  “Affiliate”
means
      any “parent corporation” or “subsidiary corporation” of the Company, as those
      terms are defined, respectively, in Code Sections 424(e) and (f).

     

    (b)  “Applicable
      Law”
means
      the legal requirements relating to stock incentive plans, if any, under
      applicable provisions of federal securities laws, state corporate and securities
      laws, the rules and regulations of any governing governmental agencies, the
      Code, and the rules of any applicable stock exchange or national market
      system.

     

    (c)  “Award”
means,
      individually or collectively, Nonqualified Stock Options, Incentive Stock
      Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
      Performance Shares, Performance Units, and Other Stock-Based Awards granted
      under the Plan.

     

    (d)  “Award
      Agreement”
means
      an agreement entered into by the Company and a Participant setting forth the
      terms and provisions applicable to an Award.

     

    (e)  “Board”
means
      the Board of Directors of the Company.

     

    (f)  “Cashless
      Exercise”
means,
      to the extent permitted by Applicable Law, a program approved by the Committee
      in which payment of the applicable Exercise Price of an Option may be made
      all
      or in part by delivery (on a form prescribed by the Committee) of an irrevocable
      direction to a securities broker to sell Shares and to deliver all or part
      of
      the sale proceeds to the Company in payment of the aggregate Exercise Price
      and,
      if applicable, the amount necessary to satisfy the Company’s withholding
      obligations at the minimum statutory withholding rates, including, but not
      limited to, U.S. federal and state income taxes, payroll taxes, and foreign
      taxes, if applicable.

     


    
      
         

         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (g)  “Cause”
means,
      unless that term or an equivalent term is otherwise defined with respect to
      an
      Award by the Participant's Award Agreement or by a written contract of
      employment or service, any of the following: (i) the Participant's theft,
      dishonesty, willful misconduct, breach of fiduciary duty for personal profit,
      or
      falsification of any Company documents or records; (ii) the Participant's
      material failure to abide by the Company's code of conduct or other policies
      (including, without limitation, policies relating to confidentiality and
      reasonable workplace conduct); (iii) the Participant's unauthorized use,
      misappropriation, destruction or diversion of any tangible or intangible asset
      or corporate opportunity of the Company (including, without limitation, the
      Participant's improper use or disclosure of the Company's confidential or
      proprietary information); (iv) any intentional act by the Participant that
      has a
      material detrimental effect on the Company's reputation or business; (v) any
      material breach by the Participant of any employment, service, consulting,
      non-disclosure, non-competition, non-solicitation or other similar agreement
      between the Participant and the Company, which breach is not cured pursuant
      to
      the terms of the applicable agreement; or (vi) the Participant's conviction
      (including any plea of guilty or nolo contendere) of any criminal act involving
      fraud, dishonesty, misappropriation or moral turpitude, or that impairs the
      Participant's ability to perform his or her duties with the
      Company.

     

    (h)  “Change
      in Control”
means
      the occurrence of one or more of the following:

     

    (i)  The
      acquisition by any “person” (as such term is used in Sections 13(d) and 14(d) of
      the Exchange Act of the “beneficial ownership” (as defined in Rule 13d-3
      promulgated under the Exchange Act), directly or indirectly, of securities
      of
      the Company representing fifty (50%) percent or more of (A) the then outstanding
      shares of common stock of the Company, or (B) the combined voting power of
      the
      Company’s then outstanding voting securities; provided, however, that the
      following acquisitions will not constitute a Change in Control: (I) any
      acquisition directly from the Company (excluding
      an acquisition by virtue of the exercise of a conversion privilege),
      (II) any acquisition by the Company, or (III) any acquisition by any
      employee benefit plan (or related trust) sponsored or maintained by the Company
      or any entity controlled by the Company;

     

    (ii)  The
      Company is party to a merger or consolidation, or series of related
      transactions, that results in the voting securities of the Company outstanding
      immediately prior thereto failing to continue to represent (either by remaining
      outstanding or by being converted into voting securities of the surviving
      entity), directly or indirectly, at least fifty
      (50%) percent of the combined voting power of the voting securities of the
      Company or such surviving entity outstanding immediately after such merger
      or
      consolidation; 

     

    (iii)  the
      sale
      or disposition of all or substantially all of the Company’s assets, or
      consummation of any transaction, or series of related transactions, having
      similar effect (other than to a Subsidiary);

     

    (iv)  A
      change
      in the composition of the Board within any consecutive two-year period, as
      a
      result of which fewer than a majority of the directors are Incumbent Directors;
      or

     

    (v)  The
      liquidation or dissolution of the Company.

     

    Notwithstanding
      any other provision of the Plan, with respect to any provision or feature of
      the
      Plan that constitutes or provides for a deferred compensation plan subject
      to
      Code Section 409A, no event or transaction will constitute a Change in
      Control unless it is a change in control within the meaning of Code Section
      409A. 

     

    (i)  “Code”
means
      the Internal Revenue Code of 1986, as amended, and its interpretive
      regulations.

     

    (j)  “Committee”
means
      the Committee, as specified in Section 3(a), appointed by the Board to
      administer the Plan; provided, however, that, where appropriate, “Committee”
also means (i) the Board, which, pursuant to Section 3(b), administers the
      Plan
      with respect to Non-Employee Directors; and (ii) any delegate of the Committee
      that, pursuant to Section 3(d), has the authority to grant Awards to
      Participants who are not subject to Section 16(b) of the Exchange Act and who
      are not (and are not anticipated to be during the term of the Award) “covered
      employees” under Code Section 162(m).

     

    (k)  “Company”
means
      Interactive Intelligence, Inc., an Indiana corporation, and any successor
      thereto as provided in Section 23.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (l)  “Continuous
      Service”
means
      an Employee’s provision of services in any capacity to the Company or any
      Affiliate that is not interrupted or terminated. Continuous Service will not
      be
      considered interrupted in the case of (i) any leave of absence approved by
      the Company or (ii) transfers between locations of the Company or between
      the Company, any Affiliate, or any successor. A leave of absence approved by
      the
      Company may include medical leave, military leave, or any other personal leave
      approved by an authorized Company representative. For purposes of Incentive
      Stock Options, no such leave may exceed 90 days, unless reemployment upon
      expiration of the leave is guaranteed by statute or contract.

     

    (m)  “Disability”
means
      the inability to engage in any substantial gainful activity by reason of any
      medically determinable physical or mental impairment that can be expected to
      result in death or can be expected to last for a period of not less than 12
      months.

     

    (n)  “Dividend”
means
      a
      dividend declared and paid on Shares subject to an Award.

     

    (o)  “Employee”
means
      any employee of the Company or an Affiliate.

     

    (p)  “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    (q)  “Exercise
      Price”
means
      the price at which a Participant may purchase a Share pursuant to an
      Option.

     

    (r)  “Fair
      Market Value”
means,
      as of any date, the value of a Share determined as follows:

     

    (i)  Where
      a
      public market exists for the Share, the Fair Market Value will be (A) the
      closing sales price for a Share for the last market trading day prior to the
      time of the determination (or, if no sales were reported on that date, on the
      last trading date on which sales were reported) on the New York Stock Exchange,
      the Nasdaq National Market or the principal securities exchange on which the
      Share is listed for trading, whichever is applicable, or (B) if the Share
      is not traded on any such exchange or national market system, the average of
      the
      closing bid and asked prices of a Share on the Nasdaq Small Cap Market, in
      each
      case, as reported in The Wall Street Journal or such other source as the
      Committee deems reliable; or

     

    (ii)  In
      the
      absence of an established market for the Share of the type described above,
      the
      Committee will determine the Share’s
      Fair
      Market Value in good faith using a reasonable valuation methodology, and that
      determination will be conclusive and binding on all persons.

     

    (s)  “Freestanding
      SAR”
means
      a
      SAR that is granted independently of any Options, as described in
      Section 8.

     

    (t)  “Incentive
      Stock Option”
or
      “ISO”
means
      an Option intended to qualify as an incentive stock option within the meaning
      of
      Code Section 422.

     

    (u)  “Incumbent
      Directors”
means
      directors who either (i) were directors of the Company as of the Effective
      Date
      of this Plan, or (ii) are elected, or nominated for election, to the Board
      with
      the affirmative votes of a least a majority of those directors whose election
      or
      nomination was not in connection with an actual or threatened proxy contest
      related to the election of directors to the Company.

     

    (v)  “Non-Employee
      Director”
means
      any individual who is a member of the Board of Directors of the Company or
      an
      Affiliate and who is not an Employee.

     

    (w)  “Nonqualified
      Stock Option”
means
      an Option that is not intended to meet the requirements of Code
      Section 422.

     

    (x)  “Option”
means
      an Incentive Stock Option or a Nonqualified Stock Option granted under the
      Plan,
      as described in Section 7.

     

    (y)  “Other
      Stock-Based Award”
means
      a
      Share-based or Share-related Award granted pursuant to
      Section 13.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (z)  “Participant”
means
      a
      current or former Employee, Non-Employee Director, consultant of the Company
      or
      any other individual who the Committee selects (or selected) to receive an
      Award.

     

    (aa)  “Performance-Based
      Exception”
means
      the performance-based exception from the tax deductibility limitations of Code
      Section 162(m).

     

    (bb)  “Performance
      Measure”
means
      any performance goal that the Committee, in its discretion, may select from
      among any of the following performance goals: total shareholder return, stock
      price, net customer sales, volume, gross profit, gross margin, operating profit,
      operating margin, earnings from continuing operations before income taxes,
      earnings from continuing operations, earnings per share from continuing
      operations, net operating profit after tax, net earnings, net earnings per
      share, return on assets, return on investment, return on equity, return on
      invested capital, cost of capital, average capital employed, cash flow, cash
      flow from operations, working capital, working capital as a percentage of net
      customer sales, asset growth, asset turnover, market share, orders received,
      days sales outstanding and operating unit results.

     

    (cc)  “Performance
      Period”
means
      the period during which a Performance Measure or other performance goal must
      be
      met.

     

    (dd)  “Performance
      Share”
means
      an Award granted to a Participant pursuant to Section 11.

     

    (ee)  “Performance
      Unit”
means
      an Award granted to a Participant pursuant to Section 12.

     

    (ff)  “Period
      of Restriction”
means
      the period during which Restricted Stock, Restricted Stock Units or Other
      Stock-Based Awards are subject to a substantial risk of forfeiture and are
      not
      transferable, as provided in Sections 9, 10 and 13.

     

    (gg)  “Plan”
means
      this Interactive Intelligence, Inc. 2006 Equity Incentive Plan, as amended
      from
      time to time.

     

    (hh)  “Prior
      Plans”
means
      the Interactive Intelligence, Inc. 1999 Stock Option and Incentive Plan and
      the
      Interactive Intelligence, Inc. Outside Directors Stock Option Plan.

     

    (ii)  “Restricted
      Stock”
means
      an Award granted to a Participant pursuant to Section 9.

     

    (jj)  “Restricted
      Stock Units”
means
      an Award granted to a Participant pursuant to Section 10.

     

    (kk)  “Retirement”
means,
      with respect to an Employee, termination of employment after attaining age
      65,
      or such other age as the Company specifies in its written policies.

     

    (ll)  “SEC”
means
      the United States Securities and Exchange Commission.

     

    (mm)  “Section”
means,
      except where used in direct reference to a provision of the Code or the Exchange
      Act, a provision of this Plan. 

     

    (nn)  “Share”
means
      a
      share of the Company’s common stock, par value $0.01 per share, subject to
      adjustment pursuant to Section 18.

     

    (oo)  “Stock
      Appreciation Right”
or
      “SAR”
means
      an Award granted to a Participant, either alone or in connection with a related
      Option, pursuant to Section 8.

     

    (pp)  “Subsidiary”
means
      any corporation in which the Company owns, directly or indirectly, at least
      50%
      of the total combined voting power of all classes of stock, or any other entity
      (including, but not limited to, limited liability companies, partnerships and
      joint ventures) in which the Company owns, directly or indirectly, at least
      50%
      of the combined equity.

     

    (qq)  “Subsidiary
      Disposition”
means
      the disposition by the Company of its equity holdings in any Subsidiary effected
      by a merger or consolidation involving that Subsidiary, the sale of all or
      substantially all of the assets of that Subsidiary, or the Company’s sale or
      distribution of substantially all of the outstanding capital stock of that
      Subsidiary.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (rr)  “Tandem
      SAR”
means
      a
      SAR that is granted in connection with a related Option, as described in
      Section 8.

     

    (ss)  “Voting
      Securities”
means
      voting securities of the Company entitled to vote generally in the election
      of
      directors.

     

    	3.  	
            Administration
              of the Plan. 

          


     

    (a)  The
      Committee.
      The
      Plan will be administered by the Compensation and Stock Option Committee of
      the
      Board or such other committee (“Committee”) as the Board selects consisting of
      two or more members of the Board each of whom is intended to be a “non-employee
      director” within the meaning of Rule 16b-3 (or any successor rule) of the
      Exchange Act, an “outside director” under regulations promulgated under Code
      Section 162(m), and an “independent director” under Nasdaq Stock Market or other
      applicable exchange listing standards. The members of the Committee will be
      appointed from time to time by, and will serve at the discretion of, the
      Board.

     

    (b)  Board
      as the Committee.
      Notwithstanding subsection (a) above, the Board will constitute the Committee
      and administer the Plan with respect to Non-Employee Directors, determine the
      terms of Awards, and their related Award Agreements, to Non-Employee Directors,
      and grant Awards to Non-Employee Directors.

     

    (c)  Authority
      of the Committee.
      Subject
      to Applicable Law and the Plan’s provisions, and except as the Board may provide
      otherwise, the Committee will have full, final and discretionary authority
      to
      take all actions it determines necessary to administer the Plan, including,
      without limitation, the following actions:

     

    (i)  select
      the individuals to whom Awards may from time to time be granted under the
      Plan;

     

    (ii)  determine
      whether and to what extent Awards are granted under the Plan;

     

    (iii)  determine
      the size, type, terms, and conditions of any Awards granted under the
      Plan;

     

    (iv)  approve
      forms of Award Agreements for use under the Plan;

     

    (v)  establish
      Performance Measures or other performance goals for any Performance Period
      and
      determine whether those goals were satisfied;

     

    (vi)  amend
      the
      terms of any outstanding Award granted under the Plan in the event of a
      Participant’s termination of employment or service or in the event of a Change
      in Control, provided that, except as otherwise provided in Section 19, no
      such amendment will reduce the Exercise Price of outstanding Options or the
      grant price of outstanding SARs without the approval of the shareholders of
      the
      Company, and provided further, that any amendment that would adversely affect
      the Participant’s rights under an outstanding Award will not be made without the
      Participant’s written consent;

     

    (vii)  construe
      and interpret the terms of the Plan and any Award Agreement entered into under
      the Plan, and decide all questions of fact arising in the application of the
      Plan and any Award Agreement; and

     

    (viii)  take
      such
      other action, not inconsistent with the Plan’s terms, as the Committee deems
      appropriate. 

     

    (d)  Delegation
      of Authority.
      As
      permitted by Applicable Law, the Committee may delegate, to one or more officers
      of the Company, its authority, including the power and authority to make Awards
      to Participants who are not subject to Section 16(b) of the Exchange Act and
      who
      are not (and are not anticipated to be during the term of the Award) “covered
      employees” under Code Section 162(m), pursuant to such conditions and
      limitations as the Committee may establish. The Committee may delegate authority
      pursuant to this provision only by resolution or other valid action it reflects
      in writing.

     

    (e)  Effect
      of Committee’s Decision.
      The
      Committee’s decisions, determinations and interpretations will be final, binding
      and conclusive on all persons, including the Company, its Subsidiaries,
      Employees, Non-Employee Directors, consultants, other Participants and their
      estates and beneficiaries.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	4.  	
            Shares
              Subject to the Plan; Effect of Grants; Individual Limits.
              

          


     

    (a)  Number
      of Shares Available for Grants.
      Subject
      to adjustment as provided in Section 18, the maximum number of Shares that
      may be issued pursuant to Awards under the Plan shall be (i) 1,250,000 Shares,
      plus
      (ii) up
      to 320,000 Shares available for issuance under the Prior Plans, as previously
      approved by the shareholders of the Company, as of the Effective Date, but
      that
      are not underlying any outstanding stock options or other awards under the
      Prior
      Plans as of the Effective Date, plus
      (iii)
      any Shares allocable to outstanding stock options or other awards under the
      Prior Plans as of the Effective Date to the extent that on or after the
      Effective Date such stock options or other awards expire, are forfeited or
      otherwise terminate unexercised; provided, however, that in no event shall
      the
      maximum number of Shares issued pursuant to Awards under the Plan exceed
      4,950,933 Shares (which is the sum of 1,250,000 Shares set forth above, plus
      the
      number of Shares available for issuance under the Prior Plans as of the
      Effective Date, plus the aggregate number of shares subject to
      options
      previously granted and outstanding under the Prior Plans as of the
      Effective
      Date).
      From and after the Effective Date, no further grants or awards shall be made
      under the Prior Plans; however, grants or awards made under the Prior Plans
      before the Effective Date shall continue in effect in accordance with their
      terms.

     

    (b)  Limit
      on Awards of Incentive Stock Options.
      Subject
      to adjustment as provided in Section 18, the maximum aggregate number of
      Shares that may be delivered in connection with Incentive Stock Options under
      the Plan will not exceed 1,500,000 Shares.

     

    (c)  Limits
      on Awards to Individual Participants.
      Subject
      to adjustment as provided in Section 18, the following rules will apply
      with respect to Awards to individual Participants:

     

    (i)  Total
      Limit:
      The
      maximum aggregate number of Shares that can be granted to any one Participant
      in
      a particular calendar year pursuant to any and all Awards is 100,000
      Shares.

     

    (ii)  Incentive
      Stock Options:
      The
      maximum aggregate number of Shares with respect to which Incentive Stock Options
      may be granted in any particular calendar year to any one Participant is 100,000
      Shares.

     

    (iii)  Restricted
      Stock and Restricted Stock Units:
      The
      maximum aggregate number of Shares of Restricted Stock and Shares with respect
      to which Restricted Stock Units may be granted in a particular calendar year
      to
      any one Participant is 50,000 Shares.

     

    (iv)  Performance
      Shares and Performance Units:
      The
      maximum aggregate number of Performance Shares that may be granted in a
      particular calendar year to any one Participant is 50,000 Shares, and the
      maximum aggregate compensation that can be paid pursuant to Performance Units
      awarded in any one calendar year to any one Participant is $250,000
      or a number of Shares having an aggregate Fair Market Value not in excess of
      that amount. 

     

    (d)  Forfeited
      Shares.
      If
      Awards are forfeited or terminated for any reason before being exercised, fully
      vested, or settled, then the Shares underlying those Awards will cease to count
      against the limitations in subsections (a) and (b) and will become available
      for
      Awards under the Plan. 

     

    (e)  Shares
      for Withholding Obligations.
      Any
      Shares subject to any Award that are withheld or otherwise not issued upon
      exercise of any Award to satisfy the Participant’s withholding obligations or in
      payment of any subscription price or the Exercise Price, and Shares subject
      to
      an Award (or any portion of an Award) that is settled in cash in lieu of
      settlement in Shares, will reduce the number of Shares available for grant
      under
      the limitations in subsections (a) and (b).

     

    (f)  Awards
      Settled in Cash.
      Awards
      valued by reference to Shares that may be settled in equivalent cash value
      will
      count against the limitations in this Section 4 to the same extent as if settled
      in Shares.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	5.  	
            Eligibility
              and Participation. 

          


     

    (a)  Eligibility.
      Employees, Non-Employee Directors, consultants of the Company and other
      individuals are eligible to participate in the Plan.

     

    (b)  Actual
      Participation.
      Subject
      to the provisions of the Plan, the Committee may, from time to time, select
      from
      all eligible Employees, Non-Employee Directors, consultants of the Company
      and
      other individuals those to whom Awards will be granted and will determine the
      nature and amount of each Award.

     

    (c)  Service
      as an Employee.
      For
      purposes of an Employee's participation in the Plan, and the interpretation
      of
      the Plan's provisions, no event will constitute a termination of employment
      unless the event is a termination of Continuous Service.

     

    	6.  	
            Types
              of Awards. 

          


     

    (a)  Type
      of Awards.
      Awards
      under the Plan may be in the form of Options (both Nonqualified Stock Options
      and/or Incentive Stock Options), SARs, Restricted Stock, Restricted Stock Units,
      Performance Shares, Performance Units and Other Stock-Based Awards.

     

    (b)  Designation
      of Award.
      Each
      Award will be designated in the Award Agreement. 

     

    	7.  	
            Options.
              

          


     

    (a)  Grant
      of Options.
      Subject
      to the terms and provisions of the Plan, Options may be granted to Participants
      in such number and upon such terms, and at any time and from time to time,
      as
      the Committee determines.

     

    (b)  Award
      Agreement.
      Each
      Option grant will be evidenced by an Award Agreement that specifies the Exercise
      Price, the duration of the Option, the number of Shares to which the Option
      pertains, the Option vesting schedule, and such other provisions as the
      Committee determines including, without limitation, repurchase provisions,
      rights of first refusal, forfeiture provisions, form of payment (cash, Shares,
      or other consideration) upon settlement of the Award, and payment contingencies.
      The Award Agreement will also specify whether the Option is intended to be
      an
      Incentive Stock Option or a Nonqualified Stock Option. Options that are intended
      to be Incentive Stock Options will be subject to the limitations set forth
      in
      Code Section 422 and will be subject to Section 7(m). 

     

    (c)  Exercise
      Price.
      Except
      for Options adjusted pursuant to Section 18 and replacement Options granted
      in connection with a merger, acquisition, reorganization or similar transaction,
      the Exercise Price of each Option will not be less than 100% of the Fair Market
      Value of a Share on the date the Option is granted. However, in the case of
      an
      Incentive Stock Option granted to a Participant who, at the time the Option
      is
      granted, owns stock representing more than 10% of the voting power of all
      classes of stock of the Company or any Affiliate, the Exercise Price of the
      Option will not be less than 110% of the Fair Market Value of a Share on the
      date the Option is granted. 

     

    (d)  Term
      of Options.
      The
      term of an Option granted under the Plan will be determined by the Committee,
      in
      its sole discretion; provided, however, that the term will not exceed ten
      (10) years.
      However, in the case of an Incentive Stock Option granted to a Participant
      who,
      at the time the Option is granted, owns stock representing more than 10% of
      the
      voting power of all classes of stock of the Company or any Affiliate, the term
      of the Incentive Stock Option will be five (5) years from the date of grant
      or such shorter term as may be provided in the Award Agreement. 

     

    (e)  Vesting
      of Options.
      Options
      granted under this Section 7 will be exercisable at such times (based on
      the passage of time or the achievement of performance goals) and be subject
      to
      such restrictions and conditions as set forth in the Award Agreement, which
      need
      not be the same for each grant or for each Participant.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (f)  Exercise
      of Options.
      Options
      granted under this Section 7 will be exercised by the delivery of a written
      notice to the Company, setting forth the number of Shares with respect to which
      the Option is to be exercised and specifying the method of payment for the
      Exercise Price. An Option’s Exercise Price will be payable to the Company:


     

    (i)  in
      cash
      or its equivalent;

     

    (ii)  by
      tendering (either actually or constructively by attestation) Shares having
      an
      aggregate Fair Market Value at the time of exercise equal to the Exercise Price,
      provided that the Committee may, in its sole discretion, require that Shares
      tendered for payment have been previously held by the Participant for a minimum
      duration;

     

    (iii)  in
      any
      other manner then permitted by the Committee (including Cashless Exercise);
      or


     

    (iv)  by
      a
      combination of any of the permitted methods of payment in subsections (i),
      (ii),
      and (iii) above. 

     

    The
      Committee may limit any method of payment, other than that specified under
      (i),
      for administrative convenience, to comply with Applicable Law or for any other
      reason it deems appropriate.

     

    (g)  Restrictions
      on Share Transferability.
      The
      Committee may impose such restrictions on any Shares acquired pursuant to the
      exercise of an Option granted under this Section 7 as it deems advisable,
      including, without limitation, restrictions under applicable federal securities
      laws, under the requirements of any stock exchange or market upon which the
      Shares are then listed and/or traded, and under any blue sky or state securities
      laws applicable to the Shares. 

     

    (h)  Termination
      for Cause.
      Upon a
      Participant’s termination of employment or service for Cause, all rights under
      any Options granted to the Participant will terminate immediately, and the
      Participant will (if the Committee, in its sole discretion, exercises its rights
      under this Section 7(h) within ten (10) days of the termination) repay to the
      Company within ten (10) days of the Committee’s written demand the amount of any
      gain the Participant had realized upon any exercise within the 90-day period
      prior to the termination of any Options.

     

    (i)  Termination
      Due to Death or Disability.
      Upon a
      Participant’s termination of employment or service due to death or Disability,
      the Participant or the Participant’s beneficiary, as the case may be, may
      exercise outstanding Options to the extent the Participant was entitled to
      exercise the Options on the date of termination, but only within the one
      (1)-year period immediately following the Participant’s termination due to death
      or Disability, and in no event after the date the Options expire in accordance
      with their terms.

     

    (j)  Other
      Terminations.
      Upon
      the termination of a Participant's employment or service by the Company without
      Cause, upon the Participant's voluntary termination of employment or service
      for
      a reason other than death or Disability, or upon the Employee’s Retirement, the
      Participant may exercise outstanding Options to the extent that the Participant
      was entitled to exercise the Options at the date of termination, but only within
      the one (1) month period immediately following the Participant’s termination,
      and in no event after the date the Options expire in accordance with their
      terms.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (k)  Forfeiture
      of Options.
      Notwithstanding subsections (i) and (j) above, a Participant or the
      Participant’s beneficiary, as the case may be, will, in connection with any and
      all terminations of employment or service, forfeit all Options the Participant
      was not entitled to exercise on the date of termination.

     

    (l)  Committee
      Discretion.
      Notwithstanding the foregoing paragraphs of this Section 7, and subject to
      paragraph (m) below, the Committee may, in its sole discretion, establish
      different terms and conditions pertaining to the effect of a Participant’s
      termination, to the extent permitted by Applicable Law.

     

    (m)  Additional
      Rules For Incentive Stock Options.

     

    (i)  Incentive
      Stock Options may be granted only to Participants who are
      Employees.

     

    (ii)  No
      Incentive Stock Option will be granted to a Participant as a result of which
      the
      aggregate Fair Market Value (determined as of the date of grant) of the Shares
      with respect to which Incentive Stock Options under Code Section 422 are
      exercisable for the first time in any calendar year under the Plan and any
      other
      stock option plans of the Company or any Affiliate, would exceed $100,000,
      determined in accordance with Code Section 422(d). This limitation will be
      applied by taking Options into account in the order in which they were
      granted.

     

    (iii)  An
      Award
      of an Incentive Stock Option may provide that the Option may be exercised not
      later than three (3) months following the Participant’s termination of
      employment with the Company and all Subsidiaries, or not later than one (1)
      year
      following death or a permanent and total disability within the meaning of Code
      Section 22(e)(3).

     

    (iv)  Notwithstanding
      any other provisions of the Plan, if for any reason any Option granted under
      the
      Plan that is intended to be an Incentive Stock Option fails to qualify as an
      Incentive Stock Option, that Option will be deemed to be a Nonqualified Stock
      Option and fully authorized and validly issued under the Plan.

     

    	8.  	
            Stock
              Appreciation Rights. 

          


     

    (a)  Grant
      of SARs.
      Subject
      to the terms and provisions of the Plan, SARs may be granted to Participants
      in
      such amounts and upon such terms, and at any time and from time to time, as
      the
      Committee determines. The Committee may grant Freestanding SARs, Tandem SARs,
      or
      any combination of these forms of SARs. 

     

    (b)  Award
      Agreement.
      Each
      SAR grant will be evidenced by an Award Agreement that specifies the number
      of
      Shares to which the SAR pertains, the grant price, the term of the SAR, and
      such
      other provisions as the Committee determines. 

     

    (c)  Grant
      Price.
      The
      grant price of a Freestanding SAR will not be less than 100% of the Fair Market
      Value of a Share on the date of grant of the SAR, and the grant price of a
      Tandem SAR will equal the Exercise Price of the related Option; provided,
      however, that these limitations will not apply to Awards that are adjusted
      pursuant to Section 18. 

     

    (d)  Term
      of SARs.
      The
      term of a SAR granted under the Plan will be determined by the Committee, in
      its
      sole discretion; provided, however, that the term will not exceed ten (10)
      years
      from the date of grant. 

     

    (e)  Exercise
      of Tandem SARs.
      A
      Tandem SAR may be exercised only with respect to the Shares for which its
      related Option is then exercisable. To the extent exercisable, Tandem SARs
      may
      be exercised for all or part of the Shares subject to the related Option. The
      exercise of all or part of a Tandem SAR will result in the forfeiture of the
      right to purchase a number of Shares under the related Option equal to the
      number of Shares with respect to which the SAR is exercised. Conversely, upon
      exercise of all or part of an Option with respect to which a Tandem SAR has
      been
      granted, an equivalent portion of the Tandem SAR will similarly be forfeited.
      

     

    Notwithstanding
      any other provision of the Plan to the contrary, with respect to a Tandem SAR
      granted in connection with an ISO: (i) the Tandem SAR will expire no later
      than the expiration of the underlying ISO; (ii) the value of the payout
      with respect to the Tandem SAR may be for no more than 100% of the difference
      between the Exercise Price of the underlying ISO and the Fair Market Value
      of
      the Shares subject to the underlying ISO at the time the Tandem SAR is
      exercised; and (iii) the Tandem SAR may be exercised only when the Fair
      Market Value of the Shares subject to the ISO exceeds the Exercise Price of
      the
      ISO.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (f)  Exercise
      of Freestanding SARs.
      Freestanding SARs may be exercised upon whatever terms and conditions the
      Committee, in its sole discretion, imposes upon them and sets forth in the
      applicable Award Agreement; provided, however, that except as otherwise provided
      upon a termination of employment or service or pursuant to Section 19 in
      the event of a Change in Control or Subsidiary Disposition, no Freestanding
      SARs
      may be exercisable prior to one (1) year from the date of grant. 

     

    (g)  Payment
      of SAR Amount.
      SARs
      granted under this Section 8 will be exercised by the delivery of a written
      notice to the Company setting forth the number of Shares with respect to which
      the SAR is to be exercised. Upon exercise of a SAR, a Participant will be
      entitled to receive payment from the Company in an amount determined by
      multiplying:

     

    (i)  the
      difference between the Fair Market Value of a Share on the date of exercise
      over
      the grant price; by

     

    (ii)  the
      number of Shares with respect to which the SAR is exercised.

     

    At
      the
      discretion of the Committee as specified in the Award Agreement, the payment
      upon SAR exercise may be in cash, in Shares of equivalent value, or in some
      combination thereof.

     

    (h)  Termination
      for Cause.
      Upon a
      Participant’s termination of employment or service for Cause, all rights under
      any SARs granted to the Participant will terminate immediately, and the
      Participant will (if the Committee, in its sole discretion, exercises its rights
      under this Section 8(h) within ten (10) days of the termination) repay to the
      Company within ten (10) days of the Committee’s written demand the amount of any
      gain the Participant had realized upon any exercise within the 90-day period
      prior to the termination of any SARs.

     

    (i)  Termination
      Due to Death or Disability.
      Upon a
      Participant’s termination of employment or service due to death or Disability,
      the Participant or the Participant’s beneficiary, as the case may be, may
      exercise outstanding SARs to the extent the Participant was entitled to exercise
      the SARs on the date of termination, but only within the one (1)-year period
      immediately following the Participant’s termination due to death or Disability,
      and in no event after the date the SARs expire in accordance with their
      terms.

     

    (j)  Other
      Terminations.
      Upon
      the termination of a Participant's employment or service by the Company without
      Cause, upon the Participant’s voluntary termination of employment or service for
      a reason other than death or Disability, or upon the Employee's Retirement,
      the
      Participant may exercise outstanding SARs to the extent that the Participant
      was
      entitled to exercise the SARs at the date of termination, but only within the
      one (1) month period immediately following the Participant’s termination, and in
      no event after the date the SARs expire in accordance with their
      terms.

     

    (k)  Forfeiture
      of SARs.
      Notwithstanding subsections (i) and (j) above, a Participant or the
      Participant’s beneficiary, as the case may be, will, in connection with any and
      all terminations of employment or service, forfeit all outstanding SARs the
      Participant was not entitled to exercise on the date of
      termination.

     

    (l)  Committee
      Discretion.
      Notwithstanding the foregoing paragraphs of this Section 8, the Committee may,
      in its sole discretion, establish different terms and conditions pertaining
      to
      the effect of a Participant’s termination, to the extent permitted by Applicable
      Law.

     

    	9.  	
            Restricted
              Stock. 

          


     

    (a)  Grant
      of Restricted Stock.
      Subject
      to the terms and provisions of the Plan, Restricted Stock may be granted to
      Participants in such amounts and upon such terms, and at any time and from
      time
      to time, as the Committee determines. 

     

    (b)  Award
      Agreement.
      Each
      Restricted Stock grant will be evidenced by an Award Agreement that specifies
      the Period(s) of Restriction, the number of Shares of Restricted Stock granted,
      and such other provisions as the Committee determines. 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (c)  Period
      of Restriction.
      Except
      as otherwise provided in subsection (h) below, or pursuant to Section 19 in
      the event of a Change in Control or Subsidiary Disposition, any Period of
      Restriction for an Award of Restricted Stock will not be less than one (1)
      year.
      Notwithstanding Section 3(c) of this Plan, the Committee does not have the
      discretion or authority to (i) grant any Award of Restricted Stock under a
      Period of Restriction that is shorter than the minimum Period of Restriction
      in
      this subsection (c), or (ii) shorten the Period of Restriction of any
      outstanding grant of Restricted Stock.

     

    (d)  Other
      Restrictions.
      The
      Committee may impose such other conditions or restrictions on any Shares of
      Restricted Stock granted pursuant to the Plan as it may deem advisable
      including, without limitation, a requirement that Participants pay a stipulated
      purchase price for each Share of Restricted Stock, a requirement that the
      issuance of Shares of Restricted Stock be delayed, restrictions based upon
      the
      achievement of specific performance goals, additional time-based restrictions,
      or restrictions under Applicable Law or under the requirements of any stock
      exchange or market upon which the Shares are listed or traded, or holding
      requirements or sale restrictions placed on the Shares by the Company upon
      vesting of the Restricted Stock. The Company may retain in its custody any
      certificate evidencing the Shares of Restricted Stock and place on them a legend
      and institute stop-transfer orders on the Shares, and the Participant will
      be
      obligated to sign any stock power requested by the Company relating to the
      Shares to give effect to the forfeiture provisions of the Restricted
      Stock.

     

    (e)  Removal
      of Restrictions.
      Subject
      to Applicable Law, Restricted Stock will become freely transferable by the
      Participant after the last day of the applicable Period of Restriction. Once
      Restricted Stock is released from the restrictions, the Participant will be
      entitled to receive a certificate evidencing the Shares. 

     

    (f)  Voting
      Rights.
      Unless
      otherwise determined by the Committee and set forth in a Participant’s Award
      Agreement, to the extent permitted or required by Applicable Law, as determined
      by the Committee, Participants holding Shares of Restricted Stock granted under
      the Plan may exercise full voting rights with respect to those Shares during
      the
      Period of Restriction. 

     

    (g)  Dividends
      and Other Distributions.
      Except
      as otherwise provided in a Participant’s Award Agreement, during the Period of
      Restriction, Participants holding Shares of Restricted Stock will receive all
      regular cash Dividends paid with respect to all Shares while they are so held,
      and, except as otherwise determined by the Committee, all other distributions
      paid with respect to the Restricted Stock will be credited to Participants
      subject to the same restrictions on transferability and forfeitability as the
      Restricted Stock with respect to which they were paid and paid at such time
      following full vesting as are paid the Shares of Restricted Stock with respect
      to which the distributions were made. 

     

    (h)  Termination
      Due to Death or Disability.
      Except
      as otherwise determined by the Committee, upon a Participant’s termination of
      employment or service due to death or Disability: 

     

    (i)  With
      respect to an Award of Restricted Stock with a time-based Period of Restriction,
      the restrictions on the Ratable Portion of the Award will lapse, and those
      Shares will be free of restrictions and will not be forfeited. The “Ratable
      Portion” of an Award of Restricted Stock is equal to: 

     

    (a)  the
      number of Shares of Restricted Stock awarded to the Participant multiplied
      by
      the portion (expressed as a percentage) of the Restricted Period that expired
      on
      the date of the Participant’s death or Disability, reduced
      by

     

    (b)  the
      number of Shares of Restricted Stock awarded with respect to which the
      restrictions had lapsed as of the date of the Participant’s death or
      Disability.

     

    (ii)  With
      respect to an Award of Restricted Stock with a performance-based Period of
      Restriction, any unvested portion of the Award will vest on a pro rata monthly
      basis, including full credit for partial months elapsed, and will be paid
      (A) based on the level of performance achieved as of the date of the
      termination, if determinable, or (B) at the target level, if not
      determinable. The amount of the vested Award may be computed under the following
      formula: unvested number of Shares times (number of full months elapsed in
      shortest possible vesting period divided by number of full months in shortest
      possible vesting period) times percent performance level achieved immediately
      prior to the effective date of the termination of employment or
      service.

     

    (i)  Other
      Terminations of Employment.
      Immediately after a Participant’s termination of employment or service for a
      reason other than death or Disability, except as provided in Section 19 or
      as
      the Committee may otherwise determine, a Participant will forfeit all Restricted
      Stock that, at the time of termination, remains subject to the restrictions
      imposed by paragraph (c) of this Section 9. 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	10.  	
            Restricted
              Stock Units. 

          


     

    (a)  Grant
      of Restricted Stock Units.
      Subject
      to the terms and provisions of the Plan, Restricted Stock Units may be granted
      to Participants in such amounts and upon such terms, and at any time and from
      time to time, as the Committee determines. 

     

    (b)  Award
      Agreement.
      Each
      grant of Restricted Stock Units will be evidenced by an Award Agreement that
      specifies the applicable Period of Restriction, the number of Restricted Stock
      Units granted, the settlement date, and such other provisions as the Committee
      determines. 

     

    (c)  Value
      of Restricted Stock Units.
      The
      initial value of a Restricted Stock Unit will equal the Fair Market Value of
      a
      Share on the date of grant; provided, however, that this requirement will not
      apply to Awards that are adjusted pursuant to Section 18. 

     

    (d)  Period
      of Restriction.
      Except
      as otherwise provided in subsection (g) below, or pursuant to Section 19 in
      the event of a Change in Control or Subsidiary Disposition, any Period of
      Restriction for an Award of Restricted Stock Units will not be less than one
      (1)
      year. Notwithstanding Section 3(c), the Committee does not have the discretion
      or authority to (i) grant any Award of Restricted Stock Units under a Period
      of
      Restriction that is shorter than the minimum Period of Restriction in this
      subsection (d), or (ii) shorten the Period of Restriction of any outstanding
      grant of Restricted Stock Units.

     

    (e)  Form
      and Timing of Settlement.
      Except
      as otherwise provided in Section 19 or a Participant’s Award Agreement,
      settlement and payment of Restricted Stock Units will be made at a specified
      settlement date that will not be earlier than the last day of the Period of
      Restriction. The Committee, in its sole discretion as specified in the Award
      Agreement, may settle earned Restricted Stock Units by delivery of Shares or
      by
      payment in cash of an amount equal to the Fair Market Value of the Shares on
      the
      settlement date (or a combination thereof).

     

    (f)  Voting
      Rights.
      A
      Participant will not have voting rights or other rights as a shareholder with
      respect to the Shares subject to an Award of Restricted Stock Units granted
      under the Plan until the time, if at all, when the Shares are issued to the
      Participant pursuant to the terms of the applicable Award Agreement.


     

    (g)  Termination
      Due to Death or Disability.
      Except
      as otherwise determined by the Committee, upon a Participant’s termination of
      employment or service due to death or Disability: 

     

    (i)  With
      respect to an Award of Restricted Stock Units with a time-based Period of
      Restriction, the restrictions on the Ratable Portion of the Award will lapse,
      and those Restricted Stock Units will be free of restrictions and will not
      be
      forfeited. The “Ratable Portion” of an Award of Restricted Stock Units is equal
      to: 

     

    (a)  the
      number of Restricted Stock Units awarded to the Participant multiplied by the
      portion (expressed as a percentage) of the Restricted Period that expired on
      the
      date of the Participant’s death or Disability, reduced
      by

     

    (b)  the
      number of Restricted Stock Units awarded with respect to which the restrictions
      had lapsed as of the date of the Participant’s death or Disability.

     

    (ii)  With
      respect to an Award of Restricted Stock Units with a performance-based Period
      of
      Restriction, any unvested portion of the Award will vest on a pro rata monthly
      basis, including full credit for partial months elapsed, and will be paid
      (A) based on the level of performance achieved as of the date of the
      termination, if determinable, or (B) at the target level, if not
      determinable. The amount of the vested Award may be computed under the following
      formula: unvested number of Restricted Stock Units times (number of full months
      elapsed in shortest possible vesting period divided by number of full months
      in
      shortest possible vesting period) times percent performance level achieved
      immediately prior to the effective date of the termination of employment or
      service.

     

    (h)  Other
      Terminations of Employment.
      Upon a
      Participant’s termination of employment or service for a reason other than death
      or Disability, except as provided in Section 19 or as the Committee may
      otherwise determine, a Participant will forfeit all Restricted Stock Units
      that,
      at the time of termination, remain subject to the restrictions imposed by
      paragraph (d) of this Section 10. 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	11.  	
            Performance
              Shares. 

          


     

    (a)  Grant
      of Performance Shares.
      Subject
      to the terms and provisions of the Plan, Performance Shares may be granted
      to
      Participants in such amounts and upon such terms, and at any time and from
      time
      to time, as the Committee determines. 

     

    (b)  Award
      Agreement.
      Each
      grant of Performance Shares will be evidenced by an Award Agreement that
      specifies the applicable Performance Period(s) and performance goal(s), the
      number of Performance Shares granted, and such other provisions as the Committee
      determines; provided, however, that except as otherwise provided in a
      Participant’s Award Agreement, upon a termination of employment or service or
      pursuant to Section 19 in the event of a Change in Control or Subsidiary
      Disposition, in no case will a Performance Period be for a period of less than
      one (1) year.

     

    (c)  Value
      of Performance Shares.
      The
      initial value of a Performance Share will equal the Fair Market Value of a
      Share
      on the date of grant; provided, however, that this restriction will not apply
      to
      Awards that are adjusted pursuant to Section 18. 

     

    (d)  Form
      and Timing of Payment.
      As soon
      as practicable following the completion of the Performance Period applicable
      to
      outstanding Performance Shares, the Committee will certify in writing the extent
      to which the applicable performance goals have been attained and the resulting
      final value of the Award earned by the Participant and to be paid upon its
      settlement. As soon as practicable following the Committee’s determination and
      certification, payment will be made to each eligible Participant of the final
      value of the Performance Shares. The Committee, in its sole discretion as
      specified in the Award Agreement, may pay earned Performance Shares by delivery
      of Shares or by payment in cash of an amount equal to the Fair Market Value
      of
      the Shares (or a combination thereof).

     

    (e)  Voting
      Rights.
      A
      Participant will not have voting rights or other rights as a shareholder with
      respect to the Shares subject to an Award of Performance Shares granted under
      the Plan until the time, if at all, when the Shares are issued to the
      Participant pursuant to the terms of the applicable Award Agreement.


     

    (f)  Termination
      of Employment or Service.

     

    (i)  Except
      as
      otherwise determined by the Committee, upon a Participant’s termination of
      employment or service due to death or Disability, the Performance Shares will
      be
      paid based on a pro rata monthly basis, including full credit for partial months
      elapsed, and will be paid (A) based on the level of performance achieved as
      of the date of the termination, if determinable, or (B) at the target
      level, if not determinable. The amount of the Award to be paid may be computed
      under the following formula: total Performance Shares times (number of full
      months elapsed in shortest possible vesting period divided by number of full
      months in shortest possible vesting period) times percent performance level
      achieved immediately prior to the effective date of the termination of
      employment or service.

     

    (ii)  Except
      as
      otherwise determined by the Committee, if a Participant terminates employment
      or
      service with the Company for any reason other than death or Disability prior
      to
      the end of the Performance Period respecting an Award of Performance Shares,
      the
      Participant will forfeit any and all right to payment under the Performance
      Shares. 

     

    	12.  	
            Performance
              Units. 

          


     

    (a)  Grant
      of Performance Units.
      Subject
      to the terms and conditions of the Plan, Performance Units may be granted to
      Participants in such amounts and upon such terms, and at any time and from
      time
      to time, as the Committee determines. 

     

    (b)  Award
      Agreement.
      Each
      grant of Performance Units will be evidenced by an Award Agreement that
      specifies the number of Performance Units granted, the Performance Period(s)
      and
      performance goal(s), and such other provisions as the Committee determines;
      provided, however, that except as otherwise provided in a Participant’s Award
      Agreement upon a termination of employment or service or pursuant to
      Section 19 in the event of a Change in Control or Subsidiary Disposition,
      in no case will a Performance Period be for a period of less than one (1)
      year.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (c)  Value
      of Performance Units.
      The
      Committee will set performance goal(s) in its discretion that, depending on
      the
      extent to which they are met, will determine the number and/or value of
      Performance Units that will be paid to Participants. 

     

    (d)  Form
      and Timing of Payment.
      As soon
      as practicable following the completion of the Performance Period applicable
      to
      outstanding Performance Units, the Committee will certify in writing the extent
      to which the applicable performance goals have been attained and the resulting
      final value of the Award earned by the Participant and to be paid upon its
      settlement. As soon as practicable following the Committee’s determination and
      certification, payment will be made to each eligible Participant of the final
      value of the Performance Units. The Committee, in its sole discretion as
      specified in the Award Agreement, may pay earned Performance Units in cash
      or in
      Shares that have an aggregate Fair Market Value equal to the value of the earned
      Performance Units (or a combination thereof).

     

    (e)  Voting
      Rights.
      A
      Participant will not have voting rights or other rights as a shareholder with
      respect to the Shares subject to an Award of Performance Units granted under
      the
      Plan until such time, if at all, as Shares are issued to the Participant
      pursuant to the terms of the applicable Award Agreement.

     

    (f)  Termination
      of Employment or Service.

     

    (i)  Except
      as
      otherwise determined by the Committee, upon a Participant’s termination of
      employment or service due to death or Disability, the Performance Units will
      be
      paid based on a pro rata monthly basis, including full credit for partial months
      elapsed, and will be paid (A) based on the level of performance achieved as
      of the date of the termination, if determinable, or (B) at the target
      level, if not determinable. The amount of the Award to be paid may be computed
      under the following formula: total Performance Units times (number of full
      months elapsed in shortest possible vesting period divided by number of full
      months in shortest possible vesting period) times percent performance level
      achieved immediately prior to the effective date of the termination of
      employment or service.

     

    (ii)  Except
      as
      otherwise determined by the Committee, if a Participant terminates employment
      or
      service with the Company for any reason other than death or Disability prior
      to
      the end of the Performance Period respecting an Award of Performance Units,
      the
      Participant will forfeit any and all right to payment under the Performance
      Units.

     

    	13.  	
            Other
              Stock-Based Awards. 

          


     

    (a)  Grant.
      The
      Committee has the right to grant Other Stock-Based Awards that may include,
      without limitation, (i) the grant of Shares based on attainment of performance
      goal(s) established by the Committee, (ii) the payment of Shares as a bonus
      or
      in lieu of cash based on attainment of performance goal(s) established by the
      Committee, and (iii) the payment of Shares in lieu of cash under other Company
      incentive or bonus programs. 

     

    (b)  Period
      of Restriction.
      Except
      as otherwise provided in a Participant’s Award Agreement, upon a termination of
      employment or service or pursuant to Section 19 in the event of a Change in
      Control or Subsidiary Disposition, Other Stock-Based Awards granted pursuant
      to
      this Section 13 will have a minimum Period of Restriction of one (1) year,
      which period may, in the Committee’s discretion, lapse on a pro-rated, graded,
      or cliff basis (as specified in an Award Agreement); provided, however, that
      in
      the Committee’s discretion, up to five percent (5%) of the Shares available for
      issuance under the Plan may have a shorter Period of Restriction.
      Notwithstanding the above, an Award of payment in Shares in lieu of cash under
      other Company incentive or bonus programs will not be subject to the minimum
      Period of Restriction limitations described above and will not be applied
      against or included when calculating the 5% limitation in the previous
      sentence.

     

    (c)  Other
      Company Programs.
      Notwithstanding subsection (b) above, an Award that is payable in Shares in
      lieu
      of cash under another Company incentive or bonus program (and not this Plan)
      will not be subject to any Period of Restriction.

     

    (d)  Payment
      of Other Stock-Based Awards.
      Subject
      to Section 13(b), payment under or settlement of any such Awards will be made
      in
      such manner and at such times as the Committee determines. The Committee may
      provide that settlement of Other Stock-Based Awards will be deferred, on a
      mandatory basis or at the election of the Participant, pursuant to a deferred
      compensation plan designed to comply with Code Section 409A.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (e)  Termination
      of Employment or Service.
      The
      Committee will determine the extent to which the Participant will have the
      right
      to receive Other Stock-Based Awards following termination of the Participant’s
      employment or service with the Company and its Subsidiaries. Those provisions
      will be determined in the sole discretion of the Committee, may be included
      in
      an agreement entered into with each Participant, but need not be uniform among
      all Other Stock-Based Awards, and may reflect distinctions based on the reasons
      for termination of employment or service. 

     

    	14.  	
            Performance-Based
              Exception. 

          


     

    (a)  If
      the
      Committee intends for an Award to qualify for the Performance-Based Exception,
      it shall specify that the attainment of one or more Performance Measures will
      determine the degree of granting, vesting or payout with respect to the Award.
      The Committee may establish Performance Measures, in its discretion, on a
      corporate-wide basis or with respect to one or more business units, divisions,
      subsidiaries, business segments, functions, salary grade level, or position,
      and
      in either absolute terms or relative to the performance of one or more
      comparable companies or an index covering multiple companies.

     

    (b)  Unless
      otherwise determined by the Committee, measurement of Performance Measures
      will
      exclude the impact of charges for restructurings, discontinued operations,
      extraordinary items, and other unusual or non-recurring items, as well as the
      cumulative effects of tax or accounting changes, each as determined in
      accordance with generally accepted accounting principles or identified in the
      Company’s financial statements, notes to the financial statements, management’s
      discussion and analysis, or other filings with the SEC. 

     

    (c)  Performance
      Measures may differ for Awards granted to any one Participant or to different
      Participants. 

     

    (d)  Achievement
      of Performance Measures in respect of Awards intended to qualify under the
      Performance-Based Exception will be measured over a Performance Period specified
      in the Award Agreement, and the goals will be established not later than
      90 days after the beginning of the Performance Period or, if less than
      90 days, the number of days that is equal to 25% of the relevant
      Performance Period applicable to the Award. 

     

    (e)  The
      Committee will have the discretion to adjust the determinations of the degree
      of
      attainment of the pre-established Performance Measures; provided, however,
      that
      Awards that are designed to qualify for the Performance-Based Exception may
      not
      be adjusted upward (the Committee may, in its discretion, adjust the Awards
      downward). 

     

    	15.  	
            Transferability
              of Awards; Beneficiaries.

          


     

    (a)  Awards
      Not Transferable.
      Except
      as provided in this Section 15, Awards under the Plan will not be assignable
      or
      transferable by the Participant, except by will or by the laws of descent and
      distribution, and will not be subject in any manner to assignment, alienation,
      pledge, encumbrance or charge. During the lifetime of a Participant, an Award
      will be exercised only by the Participant or the Participant’s guardian or legal
      representative. 

     

    (b)  Death
      of Participant.
      Notwithstanding subsection (a), the Committee may provide in an Award Agreement
      that the Participant has the right to designate a beneficiary or beneficiaries
      who will be entitled to any rights, payments, or other benefits of the Award
      following the Participant’s death. In the event of the Participant’s death, the
      Participant’s beneficiary may exercise the Award, to the extent the Award
      Agreement permits, in the same manner and to the same extent that the
      Participant could have exercised the Award on the date of his of her death.
      

     

    (c)  Designation
      of Beneficiary.
      If an
      Award Agreement provides that a Participant has the right to designate a
      beneficiary or beneficiaries, the Participant must designate his or her
      beneficiary or beneficiaries in the manner the Committee prescribes in the
      Award
      Agreement. 

     

    (d)  Failure
      to Designate a Beneficiary.
      If a
      Participant’s Award Agreement allows the Participant to designate a beneficiary
      or beneficiaries of the Award, and the Participant dies without a beneficiary
      designation valid under subsection (c), the Award may be exercised, within
      the
      limits of subsection (b), by the legatee of the Award under the Participant’s
      will, by the Participant’s estate in accordance with the Participant’s will, or
      the laws of descent and distribution. 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	16.  	
            Taxes.

          


     

    Prior
      to
      the delivery of any Shares or cash pursuant to an Award, the Company has the
      right and power to deduct or withhold, or require the Participant to remit
      to
      the Company, an amount sufficient to satisfy all applicable tax withholding
      requirements. The Company may permit or require a Participant to satisfy all
      or
      part of the tax withholding obligations in connection with an Award by (a)
      having the Company withhold otherwise deliverable Shares, or (b) delivering
      to the Company Shares already owned for a period of at least six (6) months
      (or
      such longer or shorter period as may be required to avoid a charge to earnings
      for financial accounting purposes), in each case having a value equal to the
      amount to be withheld, which will not exceed the amount determined by the
      applicable minimum statutory tax withholding rate (or such other rate as will
      not result in a negative accounting impact). For these purposes, the value
      of
      the Shares to be withheld or delivered will be equal to the Fair Market Value
      as
      of the date that the taxes are required to be withheld.

     

    	17.  	
            Conditions
              Upon Issuance of Shares. 

          


     

    (a)  Shares
      will not be issued pursuant to the exercise or settlement of an Award, unless
      the exercise of the Award and the issuance and delivery of the Shares pursuant
      thereto will comply with Applicable Law. 

     

    (b)  As
      a
      condition to the exercise or settlement of an Award, the Company may require
      the
      person exercising the Award to represent and warrant at the time of any such
      exercise that the Shares are being purchased only for investment and without
      any
      present intention to sell or distribute the Shares if, in the opinion of counsel
      for the Company, such a representation is required by any Applicable Law.


     

    	18.  	
            Adjustments
              Upon Changes in
              Capitalization.

          


     

    In
      the
      event of any merger, reorganization, consolidation, recapitalization,
      liquidation, stock dividend, split-up, spin-off, stock split, reverse stock
      split, share combination, share exchange, or any change in the corporate
      structure affecting the Shares, or in the event of payment of a dividend or
      distribution to the shareholders of the Company in a form other than Shares
      (excepting normal cash dividends) or other corporate event that has a material
      effect on the Fair Market Value of the Shares, such adjustment will be made
      in
      the number and kind of Shares that may be delivered under the Plan, the
      individual limits set forth in Section 4(c), and, with respect to
      outstanding Awards, in the number and kind of Shares subject to outstanding
      Awards, the Exercise Price, grant price or other price of Shares subject to
      outstanding Awards, any performance conditions relating to Shares, the market
      price of Shares, or per-Share results, and other terms and conditions of
      outstanding Awards, as may be determined to be appropriate and equitable by
      the
      Committee, in its sole discretion, to prevent dilution or enlargement of rights;
      provided, however, that, unless otherwise determined by the Committee, the
      number of Shares subject to any Award will always be rounded down to a whole
      number. Adjustments made by the Committee pursuant to this Section 18 will
      be final, binding, and conclusive.

    


    	19.  	
            Change
              in Control, Cash-Out and Termination of Underwater Options/SARs, and
              Subsidiary Disposition.

          


     

    (a)  Change
      in Control.
      Except
      as otherwise provided in a Participant’s Award Agreement, if a Participant’s
      employment or service is involuntarily terminated, for whatever reason, at
      any
      time within twelve (12) months after a Change in Control, unless otherwise
      specifically prohibited under Applicable Law: 

     

    (i)  any
      and
      all outstanding Awards granted under the Plan with time-based vesting provisions
      will vest on a pro rata monthly basis, including full credit for partial months
      elapsed; and

     

    (ii)  any
      and
      all Awards granted under the Plan with performance-based vesting provisions
      will
      vest on a pro rata monthly basis, including full credit for partial months
      elapsed, and will be paid (A) based on the level of performance achieved as
      of the date of the termination, if determinable, or (B) at the target
      level, if not determinable. The amount of the vested Award may be computed
      under
      the following formula: total Award number of Shares times (number of full months
      elapsed in shortest possible vesting period divided by number of full months
      in
      shortest possible vesting period) times percent performance level achieved
      immediately prior to the effective date of the termination.

     

    (b)  Cash-Out
      and Termination of Underwater Options/SARs.
      The
      Committee may, in its sole discretion, determine that (i) all outstanding
      Options and SARs will be terminated upon the occurrence of a Change in Control
      and that each Participant will receive, with respect to each Share subject
      to
      the Options or SARs, an amount in cash equal to the excess of the consideration
      payable with respect to one Share in connection with the Change in Control
      over
      the Option Exercise Price or the SAR grant price; and (ii) Options and SARs
      outstanding as of the date of the Change in Control may be cancelled and
      terminated without payment if the consideration payable with respect to one
      Share in connection with the Change in Control is less than the Option Exercise
      Price or the SAR grant price.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    (c)  Subsidiary
      Disposition.
      The
      Committee will have the authority, exercisable either in advance of any actual
      or anticipated Subsidiary Disposition or at the time of an actual Subsidiary
      Disposition and either at the time of the grant of an Award or at any time
      while
      an Award remains outstanding, to provide for the automatic full vesting and
      exercisability of one or more outstanding unvested Awards under the Plan and
      the
      termination of restrictions on transfer and repurchase or forfeiture rights
      on
      the Awards, in connection with a Subsidiary Disposition, but only with respect
      to those Participants who are at the time engaged primarily in Continuous
      Service with the Subsidiary involved in the Subsidiary Disposition. The
      Committee also will have the authority to condition any such Award vesting
      and
      exercisability or release from limitations upon the subsequent termination
      of
      the affected Participant’s Continuous Service with that Subsidiary within a
      specified period following the effective date of the Subsidiary Disposition.
      The
      Committee may provide that any Awards so vested or released from limitations
      in
      connection with a Subsidiary Disposition, will remain fully exercisable until
      the expiration or sooner termination of the Award.

     

    	20.  	
            Amendment,
              Suspension or Termination of the
              Plan.

          


     

    (a)  Amendment,
      Modification and Termination.
      The
      Board may at any time and from time to time, alter, amend, suspend or terminate
      the Plan in whole or in part; provided, however, that no amendment that requires
      shareholder approval, as described in subsection (b) below, will be effective
      unless the amendment is approved by the requisite vote of shareholders of the
      Company entitled to vote thereon within the applicable time period.


     

    (b)  Amendments
      Requiring Shareholder Approval.
      The
      Board will seek shareholder approval of any amendment the Board determines
      would
      require shareholder approval under the applicable rules of any national
      securities exchange or other market system, and such an amendment will become
      effective only upon its approval by the Company’s shareholders. Except for
      adjustments made pursuant to Section 18, plan amendments that require
      shareholder approval include, without limitation, any amendment that would
      (i)
      increase the maximum number of Shares for which Awards may be granted under
      the
      Plan; (ii) reduce the Exercise Price of outstanding Options or the grant price
      of outstanding SARs; (iii) extend the term of the Plan or the maximum term
      of
      Options granted under the Plan; or (iv) change the class of persons eligible
      for
      grants of Awards under the Plan. Except as provided in Section 18, the
      Committee may not take any action: (1) to reprice, replace, regrant through
      cancellation or modify an outstanding Option or SAR if the effect of such action
      would be to reduce the Exercise Price of the Option or the grant price of the
      SAR; or (2) to cancel an outstanding Option or SAR having an Exercise Price
      or grant price above the then-current Fair Market Value of the Shares in
      exchange for the grant of another type of Award, without, in each case, first
      obtaining approval of the shareholders of the Company of such
      action.

     

    (c)  Adjustment
      of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
      Events.
      The
      Committee may make adjustments in the terms and conditions of, and the criteria
      included in, Awards in recognition of unusual or nonrecurring events (including,
      without limitation, the events described in Section 18) affecting the
      Company or the financial statements of the Company or of changes in Applicable
      Law, regulations, or accounting principles, whenever the Committee determines
      that such adjustments are appropriate to prevent dilution or enlargement of
      the
      benefits or potential benefits intended to be made available under the Plan.
      With respect to any Awards intended to comply with the Performance-Based
      Exception, unless otherwise determined by the Committee, any such exception
      will
      be specified at such times and in such manner as will not cause such Awards
      to
      fail to qualify under the Performance-Based Exception. 

     

    (d)  Awards
      Previously Granted.
      No
      termination, amendment or modification of the Plan or of any Award will
      adversely affect in any material way any Award previously granted under the
      Plan
      without the written consent of the Participant holding the Award, unless the
      termination, modification or amendment is required by Applicable Law and except
      as otherwise provided under the Plan. 

     

    (e)  Compliance
      with the Performance-Based Exception.
      If an
      Award is intended comply with the requirements of the Performance-Based
      Exception, the Committee may apply any restrictions it deems appropriate such
      that the Awards maintain eligibility for the Performance-Based Exception. If
      changes are made to Code Section 162(m) to permit greater flexibility with
      respect to any Award or Awards available under the Plan, the Committee may,
      subject to this Section 20, make any adjustments to the Plan or Award
      Agreements it deems appropriate. 

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    	21.  	
            Reservation
              of Shares. 

          


     

    (a)  The
      Company, during the term of the Plan, will at all times reserve and keep
      available a number of Shares sufficient to satisfy the Plan’s requirements.
      Shares issued under the Plan may be either authorized but unissued Shares,
      or
      Shares held in the Company’s treasury. 

     

    (b)  The
      inability of the Company to obtain authority from any regulatory body having
      jurisdiction, which authority is deemed by the Company’s counsel to be necessary
      to the lawful issuance and sale of any Shares hereunder, will relieve the
      Company of any liability in respect of the failure to issue or sell the Shares
      as to which the requisite authority is not obtained. 

     

    	22.  	
            Rights
              of Participants. 

          


     

    (a)  Continued
      Service.
      The
      Plan will not confer upon any Participant any right to continue employment
      or
      service with the Company, nor will it interfere in any way with his or her
      right
      or the Company’s right to terminate a Participant’s employment or service at any
      time, with or without cause. 

     

    (b)  Participant.
      No
      Employee, Non-Employee Director, consultant or other individual will have the
      right to be selected to receive an Award under the Plan, or, having been so
      selected, to be selected to receive future Awards. 

     

    	23.  	
            Successors.

          


     

    All
      obligations of the Company under the Plan and with respect to Awards will be
      binding on any successor to the Company, whether the existence of the successor
      is the result of a direct or indirect purchase, merger, consolidation, or other
      event, or a sale or disposition of all or substantially all of the business
      and/or assets of the Company, and references to the “Company” in the Plan and in
      any Award Agreements will be deemed to refer to such successors.

    


    	24.  	
            Legal
              Construction. 

          


     

    (a)  Gender,
      Number and References.
      Except
      where otherwise indicated by the context, any masculine term used in the Plan
      also will include the feminine, the plural will include the singular, and the
      singular will include the plural. Any reference in the Plan to a Section of
      the
      Plan either in the Plan or any Award Agreement or to an act or code or rule
      or
      regulation will be deemed to refer to that Section of the Plan, act, code,
      rule
      or regulation, as may be amended from time to time, or to any successor Section
      of the Plan, act, code, rule or regulation. 

     

    (b)  Severability.
      In the
      event any provision of the Plan is held illegal or invalid for any reason,
      the
      illegality or invalidity will not affect the remaining parts of the Plan, and
      the Plan will be construed and enforced as if the illegal or invalid provision
      had not been included. 

     

    (c)  Requirements
      of Law.
      The
      granting of Awards and the issuance of Shares or cash under the Plan will be
      subject to all Applicable Law and to such approvals by any governmental agencies
      or national securities exchanges as may be required. 

     

    (d)  Governing
      Law.
      To the
      extent not preempted by federal law, the Plan and all Award Agreements under
      the
      Plan will be construed in accordance with and governed by the laws of the State
      of Indiana, excluding any conflicts or choice of law rule or principle that
      might otherwise refer construction or interpretation of this Plan to the
      substantive law of another jurisdiction. 

     

    (e)  Non-Exclusive
      Plan.
      Neither
      the adoption of the Plan by the Board nor its submission to the Company’s
      shareholders for approval will be construed as creating any limitations on
      the
      power of the Board or a committee of the Board to adopt any other incentive
      arrangements it may deem desirable. 

     

    (f)  Code
      Section 409A Compliance.
      To the
      extent applicable, it is intended that this Plan and any Awards granted
      hereunder comply with the requirements of Code Section 409A and any related
      regulations or other guidance promulgated with respect to that section by the
      U.S. Department of the Treasury or the Internal Revenue Service. Any provision
      that would cause the Plan or any Award granted under the Plan to fail to satisfy
      Code Section 409A will have no force or effect until amended to comply with
      Code Section 409A, which amendment may be retroactive to the extent
      permitted by Code Section 409A.