ex10_1.htm


    EXHIBIT
10.1

    


    


     

    DOLLAR
TREE, INC.

    2004
EXECUTIVE OFFICER EQUITY PLAN

     

     

    ARTICLE 1

    GENERAL

     

     

                Section
1.1. Purpose.
The Dollar Tree, Inc. 2004 Executive Officer Equity Plan (the “Plan”) has been
established by Dollar Tree, Inc. (the “Company”) to (i) attract and retain
highly qualified executives eligible to participate in the Plan; (ii) motivate
Participants, by means of appropriate incentives, to achieve long-range goals;
(iii) provide incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further identify Participants’
interests with those of the Company’s other shareholders through compensation
that is based on the Company’s common stock; and thereby promote the long-term
financial interest of the Company and the Member Companies, including the growth
in value of the Company’s equity and enhancement of long-term shareholder
return.

     

     

    Section
1.2. Participation.
Subject to the terms and conditions of the Plan, the Committee shall determine
and designate, from time to time, from among the Eligible Recipients (including
transferees of Eligible Recipients to the extent the transfer is permitted by
the Plan and the applicable Award Agreement), those persons who will be granted
one or more Awards under the Plan, and thereby become “Participants” in the
Plan.

     

     

    Section 1.3. Operation, Administration,
and Definitions. The operation and administration of the Plan, including
the Awards made under the Plan, shall be subject to the provisions of Article 4
(relating to operation and administration). Capitalized terms in the Plan shall
be defined as set forth in the Plan (including the definition provisions of
Section 8 of the Plan).

     

     

    ARTICLE 2

    OPTIONS
AND SARS

     

     

    Section
2.1. Definitions.

     

     

    (a)        
The grant of an “Option” entitles the Participant to purchase shares of Stock at
an Exercise Price established by the Committee. Any Option granted under this
Article 2 may be either an incentive stock option (an “ISO”) or a nonqualified
option (an “NQO”), as determined in the discretion of the Committee. An “ISO” is
an Option that is intended to satisfy the requirements applicable to an
“incentive stock option” described in section 422(b) of the Code. An “NQO” is an
Option that is not intended to be an “incentive stock option” as that term is
described in section 422(b) of the Code.

     

     

    (b)       
A stock appreciation right (an “SAR”) entitles the Participant to receive, in
cash or Stock (as determined in accordance with Section 2.5), value equal to (or
otherwise based on) the excess of: (a) the Fair Market Value of a specified
number of shares of Stock at the time of exercise; over (b) an Exercise Price
established by the Committee. The Committee may limit the amount that can be
received when a SAR is exercised.

     

     

    Section
2.2. Exercise
Price. The “Exercise Price” of each Option and SAR granted under this
Article 2 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option or SAR is granted;
except that the Exercise Price shall not be less than 100% of the Fair Market
Value of a share of Stock on the date of grant (or, if greater, the par value of
a share of Stock). Repricing of Options and SAR Awards granted under this
Article 2 after the date of grant shall not be permitted.

     

     

    Section
2.3. Exercise.
An Option and an SAR shall be exercisable in accordance with such terms and
conditions and during such periods as may be established by the
Committee.

     

     

    Section
2.4. Payment of Option
Exercise Price. The payment of the Exercise Price of an Option granted
under this Article 2 shall be subject to the following:

     

     

    (a)       
Subject to the following provisions of this Section 2.4, the full Exercise Price
for shares of Stock purchased upon the exercise of any Option shall be paid at
the time of such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in paragraph 2.4(c), payment may be made
as soon as practicable after the exercise).

     

     

    (b)       
The Exercise Price shall be payable in cash or by tendering, by either actual
delivery of shares or by attestation, already-owned shares of Stock acceptable
to the Committee, and valued at Fair Market Value as of the day of exercise, or
in any combination thereof, as determined by the Committee.

     

     

    (c)       
The Committee may permit a Participant to elect to pay the Exercise Price upon
the exercise of an Option by irrevocably authorizing a third party to sell
shares of Stock (or a sufficient portion of the shares) acquired upon exercise
of the Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding resulting from such
exercise.

     

     

    Section
2.5. Settlement of
Award. Settlement of Options and SARs is subject to Section
4.7.

     

     

    ARTICLE 3

    OTHER
STOCK AWARDS

     

     

    Section
3.1. Definitions.

     

     

    (a)       
A “Stock Unit” Award is the grant of a right to receive shares of Stock in the
future.

     

     

    (b)       
A “Performance Share” Award is a grant of a right to receive shares of Stock or
Stock Units which is contingent on the achievement of performance or other
objectives during a specified period.

     

     

    (c)       
A “Performance Unit” Award is a grant of a right to receive a designated dollar
value amount of Stock which is contingent on the achievement of performance or
other objectives during a specified period.

     

     

    (d)       
A “Restricted Stock” Award is a grant of shares of Stock, and a “Restricted
Stock Unit” Award is the grant of a right to receive shares of Stock in the
future, with such shares of Stock or right to future delivery of such shares of
Stock subject to a risk of forfeiture or other restrictions that will lapse upon
the achievement of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as determined by
the Committee.

     

     

    Section
3.2. Restrictions on
Awards. Each Stock Unit Award, Restricted Stock Award, Restricted Stock
Unit Award, Performance Share Award, and Performance Unit Award shall be subject
to the following:

     

     

    (a)       
Any such Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine.

     

     

    (b)       
The Committee may designate whether any such Award being granted to any
Participant is intended to be “performance-based compensation” as that term is
used in section 162(m) of the Code. Any such Awards designated as intended to be
“performance-based compensation” shall be conditioned on the achievement of one
or more performance measures, to the extent required by Code section 162(m). The
performance measures that may be used by the Committee for such Awards shall be
based on the attainment of any performance goals, as selected by the Committee,
that are related to (i) sales increases (including comparable store sales), (ii)
profits and earnings (including operating income and EBITDA), (iii) cash flow,
(iv) shareholder value or (v) financial condition or liquidity. Such goals may
be stated in absolute terms, relative to comparison companies or indices, as
increases over past time periods, as ratios (such as earnings per share), or as
returns on any of the foregoing measures over a period of time. For Awards under
this Article 3 intended to be “performance-based compensation,” the grant of the
Awards and the establishment of the Performance Measures shall be made during
the period required under Code section 162(m).

     

     

    ARTICLE 4

    OPERATION
AND ADMINISTRATION

     

     

    Section
4.1. Effective
Date. This Plan is effective July 1, 2004 (the “Effective Date”) and the
shareholders of Dollar Tree Stores, Inc. approved the Plan on June 17, 2004. The
Plan shall be unlimited in duration and, in the event of Plan termination, shall
remain in effect as long as any Awards under it are outstanding; provided,
however, that no Awards may be granted under the Plan after the ten year
anniversary of the Effective Date (except for Awards granted pursuant to
commitments entered into prior to such ten-year anniversary).

     

     

    Section
4.2. Shares Subject to
Plan. The shares of Stock for which Awards may be granted under the Plan
shall be subject to the following:

     

     

    (a)       
The shares of Stock with respect to which Awards may be made under the Plan
shall be shares currently authorized but unissued or currently held or
subsequently acquired by the Company as treasury shares, including shares
purchased in the open market or in private transactions.

     

     

    (b)       
Subject to the following provisions of this Section 4.2, the maximum number of
shares of Stock that may be delivered to Participants and their beneficiaries
under the Plan shall be equal to one million (1,000,000) shares of
Stock.

     

     

    (c)       
To the extent provided by the Committee, any Award may be settled in cash rather
than Stock. To the extent any shares of Stock covered by an Award are not
delivered to a Participant or beneficiary because the Award is forfeited or
canceled, or the shares of Stock are not delivered because the Award is settled
in cash or used to satisfy the applicable tax withholding obligation, such
shares shall not be deemed to have been delivered for purposes of determining
the maximum number of shares of Stock available for delivery under the
Plan.

     

     

    (d)       
If the exercise price of any stock option granted under the Plan is satisfied by
tendering shares of Stock to the Company (by either actual delivery or by
attestation), only the number of shares of Stock issued net of the shares of
Stock tendered shall be deemed delivered for purposes of determining the maximum
number of shares of Stock available for delivery under the Plan.

     

     

    (e)       
Subject to paragraph 4.2(f), the following additional maximums are imposed under
the Plan.

     

     

    (i)       
The maximum number of shares of Stock that may be issued by Options intended to
be ISOs shall be three hundred thousand (300,000) shares.

     

     

    (ii)       
The maximum number of shares that may be covered by Awards granted to any one
individual pursuant to Article 2 (relating to Options and SARs) shall be two
hundred thousand (200,000) shares during any one calendar year period. If an
Option is in tandem with an SAR, such that the exercise of the Option or SAR
with respect to a share of Stock cancels the tandem SAR or Option right,
respectively, with respect to such share, the tandem Option and SAR rights with
respect to each share of Stock shall be counted as covering but one share of
Stock for purposes of applying the limitations of this paragraph
(ii).

     

     

    (iii)       
The maximum number of shares of Stock that may be covered by Awards granted to
any one individual pursuant to Article 3 (relating to Other Stock Awards) shall
be one hundred thousand (100,000) shares during any one calendar year
period.

     

     

    (iv)       
For Stock Unit Awards, Restricted Stock Awards, Restricted Stock Unit Awards and
Performance Share Awards that are intended to be “performance-based
compensation” (as that term is used for purposes of Code section 162(m)), no
more than one hundred thousand (100,000) shares of Stock may be subject to such
Awards granted to any one individual during any one calendar year period. If,
after shares have been earned, the delivery is deferred, any additional shares
attributable to dividends during the deferral period shall be
disregarded.

     

     

    (v)       
For Performance Unit Awards that are intended to be performance-based
compensation” (as that term is used for purposes of Code section 162(m)), no
more than one million dollars ($1,000,000) may be subject to such Awards granted
to any one individual during any one calendar year period. If, after amounts
have been earned with respect to Performance Unit Awards, the delivery of such
amounts is deferred, any additional amounts attributable to earnings during the
deferral period shall be disregarded.

     

    (f)       
To prevent the dilution or enlargement of benefits or potential benefits
intended to be made available under the Plan, in the event of any corporate
transaction or event such as a stock dividend, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, spin-off,
combination or other similar corporate transaction or event affecting the Stock
with respect to which Awards have been or may be issued under the Plan (any such
transaction or event, a “Transaction”), then the Committee shall, in such manner
as the Committee deems equitable:  (A) make a proportionate adjustment
in 1) the maximum number and type of securities as to which awards may be
granted under this Plan, 2) the number and type of securities subject to
outstanding Awards, 3) the grant or exercise price with respect to any such
Award, 4) the performance targets and goals appropriate to any outstanding
Performance Shares or Performance Units, and 5) the per individual limitations
on the number of securities that may be awarded under the Plan (any such
adjustment, an “Antidilution Adjustment”); provided, in each case, that with
respect ISOs, no such adjustment shall be authorized to the extent that such
adjustment would cause such options to violate Section 422(b) of the Code or any
successor provision; with respect to all Options, no such adjustment shall be
authorized to the extent that such adjustment violates the provisions of
Treasury Regulation 1.424-1 and Section 409A of the Code or any successor
provisions; with respect to all Awards for Performance Shares or Performance
Units, no such adjustment shall violate the requirements applicable to Awards
intended to qualify for exemption under Section 162(m) of the Code; and the
number of shares of Stock subject to any Award denominated in shares shall
always be a whole number; or (B) cause any Award outstanding as of the effective
date of the Transaction to be cancelled in consideration of a cash payment or
alternate Award (whether from the Company or another entity that is a
participant in the Transaction) or a combination thereof made to the holder of
such cancelled Award substantially equivalent in value to the fair market value
of such cancelled Award.  The determination of fair market value shall
be made by the Committee or the Board, as the case may be, in their sole
discretion.  Any adjustments made hereunder shall be binding on all
Participants.

     

    Section
4.3. General
Restrictions. Delivery of shares of Stock or other amounts under the Plan
shall be subject to the following:

     

     

    (a)       
Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the applicable requirements of
any securities exchange or similar entity.

     

     

    (b)       
To the extent that the Plan provides for issuance of stock certificates to
reflect the issuance of shares of Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

     

     

    Section
4.4. Tax
Withholding. All distributions under the Plan are subject to withholding
of all applicable taxes, and the Committee may condition the delivery of any
shares or other benefits under the Plan on satisfaction of the applicable
withholding obligations. The Committee, in its discretion, and subject to such
requirements as the Committee may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be satisfied through
cash payment by the Participant, through the surrender of shares of Stock which
the Participant already owns, or through the surrender of shares of Stock to
which the Participant is otherwise entitled under the Plan.

     

     

    Section
4.5. Grant and Use of
Awards. In the discretion of the Committee, a Participant may be granted
any Award permitted under the provisions of the Plan, and more than one Award
may be granted to a Participant. Awards may be granted as alternatives to or
replacement of awards granted or outstanding under the Plan, or any other plan
or arrangement of the Company or a Member Company (including a plan or
arrangement of a business or entity, all or a portion of which is acquired by
the Company or a Member Company). Subject to the overall limitation on the
number of shares of Stock that may be delivered under the Plan, the Committee
may use available shares of Stock as the form of payment for compensation,
grants or rights earned or due under any other compensation plans or
arrangements of the Company or a Member Company, including the plans and
arrangements of the Company or a Member Company assumed in business
combinations.

     

     

    Section
4.6. Dividends and
Dividend Equivalents. An Award (including without limitation an Option or
SAR Award) may provide the Participant with the right to receive dividend
payments or dividend equivalent payments with respect to Stock subject to the
Award (both before and after the Stock subject to the Award is earned, vested,
or acquired), which payments may be either made currently or credited to an
account for the Participant, and may be settled in cash or Stock, as determined
by the Committee. Any such settlements, and any such crediting of dividends or
dividend equivalents or reinvestment in shares of Stock, may be subject to such
conditions, restrictions and contingencies as the Committee shall establish,
including the reinvestment of such credited amounts in Stock
equivalents.

     

     

    Section
4.7. Settlement of
Awards. The obligation to make payments and distributions with respect to
Awards may be satisfied through cash payments, the delivery of shares of Stock,
the granting of replacement Awards, or combination thereof as the Committee
shall determine. In lieu of issuing a fraction of a share upon any exercise of
an Award, resulting from an adjustment of the Award pursuant to paragraph 4.2(f)
of the Plan or otherwise, the Company will be entitled to pay to the Participant
an amount equal to the fair market value of such fractional share. Satisfaction
of any obligations under an Award, which is sometimes referred to as
“settlement” of the Award, may be subject to such conditions, restrictions and
contingencies as the Committee shall determine. The Committee may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest or dividend equivalents, and may include converting such credits
into deferred Stock equivalents provided that such rules and procedures satisfy
the requirements of Section 409A of the Code.  No deferral is
permitted for Options or SARs. Each Member Company shall be liable for payment
of cash due under the Plan with respect to any Participant to the extent that
such benefits are attributable to the services rendered for that Member Company
by the Participant. Any disputes relating to liability of a Member Company for
cash payments shall be resolved by the Committee.

     

     

    Section
4.8. Transferability.
Except as otherwise permitted by the Committee,

     

     

    (a)       
Awards under the Plan are not transferable except as designated by the
Participant by will, by the laws of descent and distribution or by a beneficiary
form filed with the Company.

     

     

    (b)       
Awards may be exercised or claimed on behalf of a deceased Participant or other
person entitled to benefits under the Plan by the beneficiary of such
Participant or other person if the Company has a valid designation of such
beneficiary on file, or otherwise by the personal legal representative of such
Participant or other person.

     

     

    Section
4.9. Form and Time of
Elections. Unless otherwise specified herein, each election required or
permitted to be made by any Participant or other person entitled to benefits
under the Plan, and any permitted modification, or revocation thereof, shall
comply with Section 409A of the Code and be in writing filed with the Committee
at such times, in such form, and subject to such restrictions and limitations,
not inconsistent with the terms of the Plan, as the Committee shall
require.

     

     

    Section
4.10. Agreement With
Company. An Award under the Plan shall be subject to such terms and
conditions, not inconsistent with the Plan, as the Committee shall, in its sole
discretion, prescribe. The terms and conditions of any Award to any Participant
shall be reflected in such form of written document as is determined by the
Committee. A copy of such document shall be provided to the Participant, and the
Committee may, but need not require that the Participant sign a copy of such
document. Such document is referred to in the Plan as an “Award Agreement”
regardless of whether any Participant signature is required.

     

     

    Section
4.11. Action by
Company or Member Company. Any action required or permitted to be taken
by the Company or any Member Company shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.

     

     

    Section
4.12. Gender and
Number. Where the context admits, words in any gender shall include any
other gender, words in the singular shall include the plural and the plural
shall include the singular.

     

     

    Section
4.13. Limitation of
Implied Rights.

     

     

    (a)       
Neither a Participant nor any other person shall, by reason of participation in
the Plan, acquire any right in or title to any assets, funds or property of the
Company or any Member Company whatsoever, including, without limitation, any
specific funds, assets, or other property which the Company or any Member
Company, in its sole discretion, may set aside in anticipation of a liability
under the Plan. A Participant shall have only a contractual right to the Stock
or amounts, if any, payable under the Plan, unsecured by any assets of the
Company or any Member Company, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Member Company
shall be sufficient to pay any benefits to any person.

     

     

    (b)       
The Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee the right to be retained in
the employ of the Company or any Member Company, nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan, no Award
under the Plan shall confer upon the holder thereof any rights as a shareholder
of the Company prior to the date on which the individual fulfills all conditions
for receipt of such rights.

     

     

    Section
4.14. Evidence.
Evidence required of anyone under the Plan may be by certificate, affidavit,
document or other information which the person acting on it considers pertinent
and reliable, and signed, made or presented by the proper party or
parties.

     

     

    Section
4.15. Section 409A of
the Code.  Any Award granted under this Plan shall be provided
or made in a manner and at such time, in such form and subject to such election
procedures (if any), as complies with the applicable requirements of Section
409A of the Code to avoid a plan failure described in Section 409A(a)(1),
including without limitation, deferring payment to a specified employee or until
the occurrence of a specified event described in Section 409A(a)(2) of the
Code.  Notwithstanding any other provision hereof or document
pertaining hereto, the Plan shall be so construed and interpreted to meet the
applicable requirements of Section 409A of the Code to avoid a plan failure
described in Section 409A(a)(1) of the Code.

     

     

    ARTICLE 5

    CHANGE
IN CONTROL

     

     

    Subject
to the provisions of paragraph 4.2(f) (relating to the adjustment of shares),
and except as otherwise provided in the Plan or the Award Agreement reflecting
the applicable Award, upon the occurrence of a Change in Control the following
provisions shall apply:

     

     

    Section
5.1 Acceleration of
Vesting. If a Change of Control of the Company shall occur, then with
respect to outstanding Awards not already vested and/or exercisable, the
Committee, in its sole discretion, may determine that:

     

     

    (a)       
All outstanding Options (regardless of whether in tandem with SARs) shall become
fully exercisable.

     

     

    (b)       
All outstanding SARs (regardless of whether in tandem with Options) shall become
fully exercisable.

     

     

    (c)       
All Stock Units, Restricted Stock, Restricted Stock Units, and Performance
Shares shall become fully vested.

     

     

    If the
Committee determines to accelerate any such outstanding Awards, then such Awards
shall remain vested and/or exercisable during the remaining term thereof,
regardless of whether the employment or other status of the Participants with
respect to which Awards have been granted shall continue with the Company or any
Member Company.

     

     

    Section
5.2 Cash
Payment. Without limiting the generality of Section 4.7, if a Change of
Control of the Company shall occur, then the Committee, in its sole discretion,
and without the consent of any Participant affected thereby, may determine that
some or all Participants holding outstanding Awards shall receive cash
settlements in exchange for redemption of all or a part of such
Awards.

     

     

    Section
5.3 Limitation on
Change in Control Payments. Notwithstanding anything in Section 5.1 or
5.2 above to the contrary, if, with respect to a Participant, the acceleration
of the exercisability and/or vesting of an Award as provided in Section 5.1 or
the payment of cash in exchange for all or part of an Award as provided in
Section 5.2 above (which acceleration or payment could be deemed a “payment”
within the meaning of Section 280G(b)(2) of the Code), together with any other
payments which such Participant has the right to receive from the Company or any
corporation which is a member of an “affiliated group” (as defined in Section
1504(a) of the Code without regard to Section 1504(b) of the Code) of which the
Company is a member, would constitute a “parachute payment” (as defined in
Section 280G(b)(2) of the Code), then the acceleration of exercisability and/or
vesting and the payments to such Participant pursuant to Sections 5.1 and 5.2
above shall be reduced to the extent or amount as, in the sole judgment of the
Committee, will result in no portion of such payments being subject to the
excise tax imposed by Section 4999 of the Code.

     

     

    ARTICLE 6

    COMMITTEE

     

     

    Section
6.1. Administration. The
authority to control and manage the operation and administration of the Plan
shall be vested in a committee (the “Committee”) in accordance with this Article
6. The Committee shall be selected by the Board, and shall consist solely of two
or more members of the Board who are not employees of the Company or any Member
Company. The Compensation Committee of the Board shall initially serve as the
Committee for purposes of the Plan. If at any time the Committee does not exist,
or for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the
Committee.

     

     

    Section
6.2. Powers of
Committee. The Committee’s administration of the Plan shall be subject to
the following:

     

     

    (a)       
Subject to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Recipients those persons who shall
receive Awards, to determine the time or times of receipt, to determine the
types of Awards and the number of shares covered by the Awards, to establish the
terms, conditions, performance criteria, restrictions, and other provisions of
such Awards, and (subject to the restrictions imposed by Article 7) to cancel or
suspend Awards.

     

     

    (b)       
To the extent that the Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.

     

     

    (c)       
The Committee will have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any Award Agreement made pursuant to the
Plan, and to make all other determinations that may be necessary or advisable
for the administration of the Plan.

     

     

    (d)       
Any interpretation of the Plan by the Committee and any decision made by it
under the Plan is final and binding on all persons.

     

     

    (e)       
In controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the articles and by
laws of the Company, and applicable state corporate law.

     

     

    Section
6.3. Delegation by
Committee. Except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and
may delegate all or any part of its responsibilities and powers to any person or
persons selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.

     

     

    Section
6.4. Information to be
Furnished to Committee. The Company and Member Companies shall furnish
the Committee with such data and information as it determines may be required
for it to discharge its duties. The records of the Company and Member Companies
as to an employee’s or Participant’s employment, termination of employment,
leave of absence, reemployment and compensation shall be conclusive on all
persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

     

     

    ARTICLE 7

    AMENDMENT
AND TERMINATION

     

     

    The Board
may, at any time, amend or terminate the Plan, provided that no amendment or
termination may, in the absence of written consent to the change by the affected
Participant (or, if the Participant is not then living, the affected
beneficiary), adversely affect the rights of any Participant or beneficiary
under any Award granted under the Plan prior to the date such amendment is
adopted by the Board; and further provided that adjustments pursuant to
paragraph 4.2(f) shall not be subject to the foregoing limitations of this
Article 7. Amendments to this Plan shall be subject to shareholder approval to
the extent such approval is required by applicable law or applicable
requirements of any securities exchange or similar entity.

     

     

    ARTICLE 8

    DEFINED
TERMS

     

     

    In
addition to the other definitions contained herein, the following definitions
shall apply:

     

     

    (a)       
Award. The term “Award” shall mean any award or benefit granted under the Plan,
including, without limitation, the grant of Options, SARs, Stock Unit Awards,
Restricted Stock Awards, Restricted Stock Unit Awards, Performance Unit Awards,
and Performance Share Awards.

     

     

    (b)       
Award Agreement. The term “Award Agreement” has the meaning assigned in Section
4.10.

     

     

    (c)       
Board. The term “Board” shall mean the Board of Directors of the
Company.

     

     

    (d)       
Change of Control. The term “Change of Control” shall mean (a) the sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company (in one transaction or in a series of related transactions) to a
corporation that is not controlled by the Company, (b) the approval by the
shareholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company, (c) a successful tender offer for the Common Stock
of the Company, after which the tendering party holds more than 30% of the
issued and outstanding Common Stock of the Company, or (d) a merger,
consolidation, share exchange, or other transaction to which the Company is a
party pursuant to which the holders of all of the shares of the Company
outstanding prior to such transaction do not hold, directly or indirectly, at
least 70% of the outstanding shares of the surviving company after the
transaction.

     

     

    (e)       
Code. The term “Code” means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to any successor
provision of the Code.

     

     

    (f)       
Committee. The term “Committee” has the meaning assigned in Section
6.1.

     

     

    (g)       
Company. The term “Company” has the meaning assigned in Section
1.1.

     

     

    (h)       
Effective Date. The term “Effective Date” has the meaning assigned in Section
4.1.

     

     

    (i)       
Eligible Recipient. The term “Eligible Recipient” shall mean shall mean the
Company’s or a Member Company’s Chief Executive Officer and each other executive
officer of the Company or a Member Company that the Committee determines, in its
discretion, is or may be a “covered employee” of the Company or a Member Company
within the meaning Section 162(m) of the Code and Section 1.162-27(c)(2) of the
U.S. Treasury Department regulations promulgated thereunder. An Award may be
granted to an executive officer in connection with hiring, retention or
otherwise, prior to the date he or she first performs services for the Company
or a Member Company, provided that such Awards shall not become vested prior to
the date he or she first performs such services. An Award may also be granted to
an executive officer in connection with the conclusion of such executive
officer’s performance of services and separation from the Company or a Member
Company. The effect of discontinuity in an Eligible Recipient’s service with the
Company or a Member Company on any outstanding Award shall be at the discretion
of the Committee.

     

     

    (j)       
Exercise Price. The term “Exercise Price” has the meaning assigned in Section
2.2.

     

     

    (k)       
Fair Market Value. For purposes of determining the “Fair Market Value” of a
share of Stock as of any date, the following rules shall apply:

     

     

    (i)       
If the principal market for the Stock is a national securities exchange or the
NASDAQ Stock Market, then the “Fair Market Value” as of that date shall be the
closing sale price of the Stock on the principal exchange or market on which the
Stock is then listed or admitted to trading on such date.

     

     

    (ii)       
If sale prices are not available or if the principal market for the Stock is not
a national securities exchange and the Stock is not quoted on the Nasdaq stock
market, the average between the highest bid and lowest asked prices for the
Stock on such day as reported on the Nasdaq OTC Bulletin Board Service or by the
National Quotation Bureau, Incorporated or a comparable service.

     

     

    (iii)       
If the day is not a business day, and as a result, paragraphs (i) and (ii) next
above are inapplicable, the Fair Market Value of the Stock shall be determined
as of the next earlier business day. If paragraphs (i) and (ii) next above are
otherwise inapplicable, then the Fair Market Value of the Stock shall be
determined in good faith by the Committee.

     

     

    (l)       
ISO. The term “ISO” has the meaning assigned in Section 2.1(a).

     

     

    (m)           Member
Company. Member Company
means any “parent corporation” or “subsidiary corporation” (within the meaning
of Section 424 of the Code) of the Company, including a corporation that becomes
a Member Company after the adoption of this Plan, that the Committee designates
as a participating employer in the Plan.

     

     

    (n)       
NQO. The term “NQO” has the meaning assigned in Section 2.1(a).

     

     

    (o)       
Option. The term “Option” has the meaning assigned in Section
2.1(a).

     

     

    (p)       
Participant. The term “Participant” has the meaning assigned in Section
1.2.

     

     

    (q)       
Performance Unit. The term “Performance Unit” has the meaning assigned in
Section 3.1(c).

     

     

    (r)       
Performance Share. The term “Performance Share” has the meaning assigned in
Section 3.1(b).

     

     

    (3)       
Plan. The term “Plan” has the meaning assigned in Section 1.1.

     

     

    (t)       
Restricted Stock. The term “Restricted Stock” has the meaning assigned in
Section 3.1(d).

     

     

    (u)       
Restricted Stock Unit. The term “Restricted Stock Unit” has the meaning assigned
in Section 3.1(d).

     

     

    (v)       
SAR. The term “SAR” has the meaning assigned in Section 2.1(b).

     

     

    (w)       
Stock. The term “Stock” shall mean shares of common stock of the
Company.

     

     

    (x)       
Stock Unit. The term “Stock Unit” has the meaning assigned in Section
3.1(a).