Exhibit 10.1


 


AIRNET
SYSTEMS, INC.


2004 STOCK
INCENTIVE PLAN


[Reflects
amendments through June 4, 2004]


 


1.00        PURPOSE


 


This
Plan is intended to foster and promote the long-term financial success of the
Company and to materially increase shareholder value [1] by providing
Employees and Eligible Directors an opportunity to acquire an ownership
interest in the Company, and [2] enabling the Company to attract
and retain the services of outstanding Employees and Eligible Directors upon
whose judgment, interest and special efforts the successful conduct of the
Company’s business is largely dependent.


 


2.00        DEFINITIONS


 


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


 


2.01        Act.  The Securities Exchange Act of 1934, as
amended.


 


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


 


2.03        Annual
Meeting.  The annual meeting of the Company’s
shareholders.


 


2.04        Award.  Any
Incentive Stock Option, Nonstatutory Stock Option, Restricted Stock,
Performance Share, Performance Unit or SAR granted under the Plan.  During any single Plan Year, no Participant
may be granted Options affecting more than 200,000  shares of Stock (adjusted as
provided in Section 5.03), Restricted Stock affecting more than 200,000 shares
of Stock (adjusted as provided in Section 5.03), Performance Shares affecting
more than 200,000 shares of Stock (adjusted as provided in Section 5.03),
Performance Units affecting more than 200,000 shares of Stock (adjusted as
provided in Section 5.03) and SARs affecting more than 200,000 shares of Stock
(adjusted as provided in Section 5.03), including Options, Restricted Stock,
Performance Shares, Performance Units and SARs that are cancelled [or deemed to
have been cancelled under Treas. Reg. §1.162-27(e)(2)(vi)(B)] during the Plan
Year granted.  Any Right to Purchase or
any shares of Stock issued pursuant to Section 10.00 of this Plan will not
constitute an “Award.”


 


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


 


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


 


2.07        Board.  The Company’s Board of Directors.


 


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2.08        Cash
Account.  An account established for each Participant
who elects to participate in an Offering to which amounts withheld through
payroll deductions will be credited to purchase shares of Stock under the
provisions of Section 10.00.


 


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


 


[1]           Willful failure to substantially perform his
or her duties as an Employee (for reasons other than physical or mental
illness) or a director after reasonable notice to the Participant of that
failure;


 


[2]           Misconduct that materially injures the Company
or any Subsidiary;


 


[3]           Conviction of, or entering into a plea of nolo
contendere to, a felony; or


 


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


 


2.10        Code.  The Internal Revenue Code of 1986, as
amended, and any regulations issued under the Code and any applicable rulings
issued under the Code.


 


2.11        Committee.


 


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


 


[2]           In the case of all other Awards and for
purposes of Section 10.00 of this Plan, the Board’s Compensation Committee
which also constitutes a “compensation committee” within the meaning of Treas.
Reg. §1.162-27(c)(4).  The Compensation
Committee will be comprised of at least three individuals [a] each of whom is [i] an
outside director, as defined in Treas. Reg. §1.162-27(e)(3)(i) and [ii] a
“non-employee” director within the meaning of Rule 16b-3 under the Act and [iii]
an “independent director” as that term is defined in the corporate governance
rules of the national securities exchange or other recognized market or
quotation system upon or through which the Stock is then listed or traded and [b] none
of whom may receive remuneration from the Company or any Subsidiary in any
capacity other than as a director, except as permitted under Treas. Reg.
§1.162-27(e)(3)(ii).


 


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


 


2.13        Director
Option.  A Nonstatutory Stock Option granted to an
Eligible Director under Section 6.05.


 


2.14        Disability.  Unless the Committee specifies otherwise in
any applicable Award Agreement:


 


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


 


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


 


2.15        Effective
Date.  The date this Plan is
approved by the Company’s shareholders.


 


2.16        Eligible
Director.  An individual who, on an applicable Grant Date
[1] is
an elected member of the Board (or has been appointed to the Board to fill an
unexpired term and will continue to serve at the expiration of that term only
if elected by the Company’s shareholders) and [2] is not an
Employee.  For purposes of applying this
definition, an Eligible Director’s status will be determined as of the Grant
Date applicable to each affected Award.


 


2.17        Employee.  Any
individual who, on an applicable Grant Date, is a common law employee of the
Company or any Subsidiary.  A worker who
is classified as other than a common law employee but who is subsequently
reclassified as a common law employee of the Company or any Subsidiary for any
reason


 


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


 


2.18        Exercise
Price.  The
price at which a Member may exercise an Award.


 


2.19        Fair Market
Value.  The value of one
share of Stock on any relevant date, determined under the following rules:


 


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


 


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


 


[3]           If
neither Section 2.19[1] nor Section 2.19[2] applies, the fair market value as
determined by the Committee in good faith.


 


2.20        Freestanding
SAR.  An SAR
that is not associated with an Option and is granted under Section 9.00.


 


2.21        Grant Date.  The date an Award is granted to a
Participant.


 


2.22        Key
Employee.  Any Employee who,
on any applicable Grant Date, is performing services the Committee concludes
are essential to the Company’s business success and to whom the Committee has
granted an Award.


 


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


 


2.24        Nonstatutory
Stock Option.  Any Option granted under Section 6.00 that
is not an Incentive Stock Option.


 


2.25        Offering.  An
opportunity provided by the Committee to purchase shares of Stock under the
provisions of Section 10.00.  Offerings
may be consecutive or concurrent, as determined by the Committee.  The Committee will designate the maximum
number of shares of Stock that may be purchased under each Offering.  Shares of Stock not sold under one Offering
may be offered again in any subsequent Offering.


 


2.26        Offering
Effective Date.  The first business day of the month
designated by the Committee as the start of the Offering Period applicable to
an Offering.


 


2.27        Offering
Period.  The duration of an Offering, as designated
by the Committee.  The Offering Period
for any Offering will not exceed 12 months.


 


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


 


2.29        Participant.  Any Key Employee or Eligible Director who
has not Terminated.  In addition, for
purposes of Section 10.00, the term “Participant” will include any Employee who
has satisfied the requirements of Section 10.00 to acquire shares of Stock
under this Plan.


 


2.30        Performance
Goal.  The conditions that must be met before a Key
Employee will earn a Performance Share or a Performance Unit or, if the
Committee so determines, the conditions that must be met before a Key Employee
or an Eligible Director will earn shares of Restricted Stock.


 


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2.31        Performance
Period.  The period over which the Committee will
determine if applicable Performance Goals have been met; provided such period
in any event will be at least one year.


 


2.32        Performance
Share.  An Award granted under Section 8.00, which
is paid in Stock.


 


2.33        Performance
Unit.  An Award granted under Section 8.00, which
is paid in cash.


 


2.34        Plan.  The AirNet Systems, Inc. 2004 Stock
Incentive Plan.


 


2.35        Plan
Year.  The Company’s fiscal year.


 


2.36        Restricted
Stock.  An Award granted under Section 7.00.


 


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


 


2.38        Retirement. 
Unless the Committee specifies otherwise in any applicable Award
Agreement, the date:


 


[1]           A
Key Employee Terminates on or after the earliest of [a] reaching age 62 and
completing at least five years of service as an Employee or [b] reaching age 55 and
completing at least 10 years of service as an Employee or [c] satisfying such other
requirements as to age and years of service as an Employee as the Committee
specifies in any applicable Award Agreement; or


 


[2]           An
Eligible Director Terminates as a Board member after having been a Board member
for at least one full one-year term.


 


For
purposes of applying this definition, a Participant’s status as a Key Employee
or an Eligible Director will be determined as of the Grant Date applicable to
the affected Award.


 


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


 


2.40        Right
to Purchase Date.  The last business day of an Offering Period
to purchase shares of Stock under the provisions of Section 10.00.


 


2.41        SEC.  The
Securities and Exchange Commission or any successor thereto, including the
staff thereof.


 


2.42        Share
Account.  An account established for each Participant
in an Offering who exercises a Right to Purchase under Section 10.00.  A Participant’s Share Account will be
credited with the number of shares of Stock purchased on each Right to Purchase
Date and debited for the number of shares of Stock withdrawn by the Participant
after such date.


 


2.43        Stock.  The common shares, $0.01 par value, of the
Company.


 


2.44        Stock
Appreciation Right (or “SAR”).  An Award granted under Section
9.00 that is a Tandem SAR, an Affiliated SAR or a Freestanding SAR.


 


2.45        Subsidiary.  Any
corporation, partnership or other form of unincorporated entity of which the
Company owns, directly or indirectly, 50 percent or more of the total combined
voting power of all classes of stock, if the entity is a corporation; or of the
capital or profits interest, if the entity is a partnership or another form of
unincorporated entity.


 


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2.46        Tandem
SAR.  An SAR that is associated with an Option and
which expires when that Option expires or is exercised, as described in Section
9.00.


 


2.47        Termination or Terminated.  Unless the Committee
specifies otherwise in any applicable Award Agreement, [1] cessation of the
employee-employer relationship between an Employee and the Company and all
Subsidiaries for any reason or [2] cessation of an Eligible
Director’s service on the Board (and the boards of directors of all
Subsidiaries) for any reason.


 


3.00        PARTICIPATION


 


3.01        Terms
of Participation.


 


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


 


[a]           Decide  which
Employees and Eligible Directors may become Participants;


 


[b]           Decide
which Participants will be granted Awards;


 


[c]           Identify
the type of Award to be granted to each Participant;


 


[d]           Identify the terms and conditions imposed on
any Awards granted;


 


[e]           Identify the procedures through which an Award
may be exercised;


 


[f]            Identify the circumstances under which the
Company may cancel an Award or reacquire any Award or shares of Stock acquired
through an Award;


 


[g]           Determine whether, to what extent and under
what circumstances cash, shares of Stock, other securities, other Awards, other
property and other amounts payable with respect to an Award will be deferred
either automatically or at the election of the holder thereof or of the
Committee; and


 


[h]           Impose any other terms and conditions the
Committee believes are appropriate and necessary to implement the purpose of
this Plan.


 


[2]           The Committee may establish different terms
and conditions:


 


[a]           For
each type of Award;


 


[b]           For
Participants receiving the same type of Award; and


 


[c]           For
the same Participant for each Award the Participant receives, whether or not
those Awards are granted at different times.


 


3.02        Conditions
of Participation.  Each Participant receiving an Award agrees:


 


[1]                                 To sign an Award Agreement;


 


[2]                                 To be bound by the terms of the Award
Agreement and the Plan; and


 


[3]                                 To comply with other conditions imposed by the
Committee.


 


4.00        ADMINISTRATION


 


4.01        Committee
Duties.  The Committee is responsible for
administering the Plan and is granted all powers appropriate and necessary to
administer the Plan.  Consistent with
the Plan’s objectives, the Committee may adopt, amend and rescind rules and
regulations relating to the Plan, to the extent appropriate to protect the
Company’s interests and has complete discretion to make all other decisions


 


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


 


4.02        Delegation
of Ministerial Duties.  In its sole discretion, the Committee may
delegate any ministerial duties associated with the Plan to any individual or
entity (including Employees) that it deems appropriate.


 


4.03        Award
Agreement.              At the time any Award is made, the
Committee will prepare and deliver an Award Agreement to each affected
Participant.  The Award Agreement:


 


[1]           Will
describe:


 


[a]           The
type of Award and when and how it may be exercised;


 


[b]           The
effect of exercising the Award; and


 


[c]           Any
Exercise Price associated with each Award.


 


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


 


[a]           Any
conditions that must be met before the Award may be exercised;


 


[b]           Any
objective restrictions placed on Restricted Stock, Performance Shares and
Performance Units and any performance-related conditions and Performance Goals
that must be met before those restrictions will be released;


 


[c]           When
and how an Award may be exercised; and


 


[d]           Any
other applicable terms and conditions affecting the Award.


 


4.04        Restriction
on Repricing.  Regardless of any other provision of this
Plan, neither the Company nor the Committee may “reprice” (as defined under
rules adopted by the national securities exchange or other recognized market or
quotation system upon or through which the Stock then is listed or traded) any
Option without the prior approval of the shareholders of the Company.


 


5.00        STOCK SUBJECT TO PLAN


 


5.01        Number of
Shares of Stock.  Subject to
Section 5.03, the number of shares of Stock available for delivery under the
Plan may not be greater than 1,000,000. 
The shares of Stock to be delivered under the Plan may consist, in whole
or in part, of treasury Stock or authorized but unissued Stock not reserved for
any other purpose.


 


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


 


5.03        Adjustment
in Capitalization.  If, after
the Effective Date, there is a Stock dividend or Stock split, recapitalization
(including, without limitation, the payment of an extraordinary dividend),
merger, consolidation, combination, spin-off, distribution of assets to
shareholders, exchange of shares, or other similar corporate change affecting
Stock, the Committee will appropriately adjust [1] the number of shares
of Stock which may be delivered under the Plan, [2] the number of Awards
that may or will be issued to Participants during a Plan Year, [3] the
number of shares of Stock subject to outstanding Awards (as well as any
share-based limits imposed under this Plan), [4] the respective
Exercise Price, number of shares and other limitations applicable to
outstanding or subsequently issued Awards, [5] the number of shares of 


 


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Stock and the purchase price
per share subject to purchase under Section 10.00 of the Plan and [6] any
other factors, limits or terms affecting any outstanding or subsequently issued
Awards.


 


6.00        OPTIONS


 


6.01        Grant of
Options.  The Committee may
grant Options to Key Employees at any time during the term of this Plan.  Options granted to Key Employees may be
either [1] Incentive
Stock Options or [2] Nonstatutory Stock Options.


 


6.02        Option
Price.  Subject to
Section 6.05, each Option will bear the Exercise Price the Committee
specifies in the Award Agreement. 
However:


 


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


 


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


 


6.03        Exercise of
Options.  Subject to Section
11.00, Options granted to a Key Employee under Section 6.01 may be
exercised at the times and subject to the restrictions and conditions
(including a vesting schedule) that the Committee specifies in the Award
Agreement.  However:


 


[1]           Any
Option to purchase a fraction of a share of Stock will be liquidated as of the
date it arises and the Participant will be given cash equal to Fair Market
Value multiplied by the fractional share.


 


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


 


[a]           100
shares of Stock; or


 


[b]           The
full number of shares of Stock for which Options are then exercisable.


 


[3]           No
Option may be exercised more than 10 years after it is granted (five years in
respect of an Incentive Stock Option, if the Key Employee owns [as defined in
Code §424(d)] Stock possessing more than 10 percent of total combined voting
power of all classes of Stock on the Grant Date).


 


6.04        Incentive
Stock Options. 
Notwithstanding anything in the Plan to the contrary:


 


[1]           No
provision of this Plan relating to Incentive Stock Options will be interpreted,
amended or altered, nor will any discretion or authority granted under the Plan
be exercised, in a manner that is inconsistent with Code §422 or, without the
consent of any affected Member, to cause any Incentive Stock Option to fail to
qualify for the federal income tax treatment afforded under Code §421;


 


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


 


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


 


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6.05        Director Options.


 


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


 


[2]           On
the first business day of each Plan Year, each individual who [a] is
then serving as an Eligible Director and [b] has served for at least one full
one-year term as an Eligible Director, will be automatically granted a Director
Option to purchase 4,000 shares of Stock with an Exercise Price equal to the
Fair Market Value of a share of Stock on the Grant Date.  Each such Director Option will vest and
become exercisable with respect to 20% of the shares of Stock covered thereby
on each of the Grant Date, and the first, second, third and fourth anniversaries
of the Grant Date.


 


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


 


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


 


[5]           If
an Eligible Director Terminates because of death, Disability or Retirement, the
Eligible Director’s Director Options will become fully vested and exercisable.


 


[6]           Subject
to Sections 6.05[7] and 11.00, once vested and exercisable, each Director
Option will remain exercisable until the earlier to occur of [a] ten
years after the Grant Date, or [b] three months after the Eligible
Director Terminates (24 months if Termination is because of death, Disability
or Retirement).


 


[7]           However:


 


[a]           Any
Director Option to purchase a fraction of a share of Stock will be liquidated
as of the date it arises and the Eligible Director will be given cash equal to
Fair Market Value multiplied by the fractional share;


 


[b]           Unless the Committee specifies otherwise in
the Award Agreement, no Eligible Director may exercise Director Options for
fewer than the smaller of:


 


[i]                                    100 shares of Stock; or


 


[ii]                                The full number of shares of Stock for which
Director Options are then exercisable.


 


6.06        Payment
for Options.  Unless the Committee specifies otherwise in
the Award Agreement, the Exercise Price associated with each Option must be
paid in cash.  However, the Committee
may, in its discretion, develop, and extend to some or all Members, procedures
through which Members may pay an Option’s Exercise Price, including allowing a
Member to tender Stock he or she already has owned for at least six months
before the exercise date, either by actual delivery of the previously owned
Stock or by attestation, valued at its Fair Market Value on the exercise date,
as partial or full payment of the Exercise Price.


 


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6.07        Transferability
of Stock.  Unless the Committee specifies
otherwise in the Award Agreement,  Stock
acquired through an Option will be transferable, subject to applicable federal
securities laws, the requirements of any national securities exchange or other
recognized market or quotation system upon or through which the Stock is then
listed or traded, or any applicable blue sky or state securities laws.


 


7.00        RESTRICTED STOCK


 


7.01        Restricted Stock Grants.  The Committee may grant Restricted Stock to
Key Employees or Eligible Directors at any time during the term of this
Plan.  The Committee also will include
in the Restricted Stock Award Agreement applicable restrictions, which may vary
between Key Employees and Eligible Directors, may be different each time a
Restricted Stock Award is made and may be either time-based or subject to the
Performance Goals described in Section 8.02[2] or both.


 


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


 


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


 


[1]           the Committee will
certify to the Board the extent to which restrictions, including any applicable
Performance Goals, in respect of Restricted Stock granted to Key Employees have
been met; and


 


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


 


Shares of Restricted Stock will be:


 


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


 


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


 


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


 


[1]           Key
Employees and Eligible Directors may exercise full voting rights associated
with their Restricted Stock; and


 


[2]           Any
dividends and other distributions paid with respect to any Restricted Stock will
be held by the Company as escrow agent during the Restriction Period.  At the end of the Restriction Period, these
dividends will be distributed to the affected Key Employee or Eligible Director
or forfeited as provided in Section 7.03 with respect to the Restricted Stock
as to which they were paid.  No interest
or other accretion will be credited with respect to any dividends held in this
escrow account.  If any dividends or
other distributions are paid in shares of Stock, those shares will be subject
to the same restrictions on transferability and forfeitability as the shares of
Restricted Stock with respect to which they were issued.


 


8.00.       PERFORMANCE
SHARES AND PERFORMANCE UNITS


 


8.01        Performance Shares and Performance Unit
Grants.  The Committee may grant
Performance Shares or Performance Units to Key Employees at any time during the
term of this Plan.


 


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8.02        Performance
Criteria.


 


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


 


[2]           In establishing each Participant’s Performance
Goal(s), the Committee will consider the relevance of each Participant’s
assigned duties and responsibilities to factors that preserve and increase the
Company’s value.  These factors will
include:


 


[a]           Increasing
revenues;


 


[b]           Developing  new
services and lines of revenue;


 


[c]           Reducing
operating expenses;


 


[d]           Increasing
customer satisfaction;


 


[e]           Developing
new markets and increasing the Company’s share of existing markets;


 


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


 


[g]           Managing
cash, accounts receivable, accounts payable and other current assets and
current liabilities;


 


[h]           Managing
claims against the Company, including litigation;


 


[i]            Identifying
and completing strategic acquisitions;


 


[j]            Increasing
the Company’s book value;


 


[k]           Increasing the Company’s return on
shareholders’ equity;


 


[l]            Increasing
the Company’s return on capital;


 


[m]          Increasing
the Company’s return on assets;


 


[n]           Increasing
the Company’s cash flows from operating activities;


 


[o]           Increasing
the Company’s net income; and


 


[p]           Increasing
the Company’s net income per share.


 


[3]           The
Committee will make appropriate adjustments to Performance Goals to reflect:


 


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


 


10

















 


[b]           A
substantive change in a Participant’s job description or assigned duties and
responsibilities.


 


[4]           Performance
Goals will be established and communicated to each affected Participant in an
Award Agreement no later than 90 days after the beginning of the applicable
Performance Period.


 


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


 


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


 


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


 


8.04        Rights Associated with Performance
Shares.  During the Performance
Period, and unless the Award Agreement provides otherwise:


 


[1]           Key
Employees may exercise full voting rights associated with their Performance
Shares; and


 


[2]           All
dividends and other distributions paid with respect to any Performance Shares
will be held by the Company as escrow agent during the Performance Period.  At the end of the Performance Period, these
dividends will be distributed to the Key Employees or forfeited as provided in
Section 8.03 with respect to the Performance Shares to which they relate.  No interest or other accretion will be
credited with respect to any dividends held in this escrow account.  If any dividends or other distributions are
paid in shares of Stock, those shares will be subject to the same restrictions
on transferability and forfeitability as the Performance Shares with respect to
which they were issued.


 


9.00        STOCK APPRECIATION RIGHTS


 


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


 


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


 


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


 


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


 


[3]           In the
case of a Tandem SAR, not be less than the Exercise Price of the related
Option.


 


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


 


[1]           An
Affiliated SAR will expire no later than the date the related Option expires or
is exercised;


 


11

















 


[2]           The
value of the payout with respect to the Affiliated SAR will not be more than
the Exercise Price of the related Option; and


 


[3]           An
Affiliated SAR may be exercised only if the Fair Market Value of the shares of
Stock subject to the related Option is greater than the Exercise Price of the
related Option.


 


9.04        Exercise of Freestanding SARs.  Freestanding SARs will be exercisable subject
to the terms specified in the Award Agreement.


 


9.05        Exercise of Tandem SARs.  Tandem SARs may be exercised with respect to
all or part of the shares of Stock subject to the related Option by
surrendering the right to exercise the equivalent portion of the related
Option.  A Tandem SAR may be exercised
only with respect to the shares of Stock for which its related Option is then
exercisable.  However:


 


[1]           A Tandem
SAR will expire no later than the date the related Option expires;


 


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


 


[3]           A Tandem
SAR may be exercised only if the Fair Market Value of a share of Stock subject
to the Option is greater than the Exercise Price of the related Option.


 


9.06        Settling SARs.


 


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


 


[a]           The
difference between the Fair Market Value of a share of Stock on the exercise
date and the Exercise Price, multiplied by


 


[b]           The
number of shares of Stock with respect to which the Tandem SAR or Freestanding
SAR is exercised.


 


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


 


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


 


10.00 STOCK PURCHASE PROGRAM


 


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


 


[1]           if, immediately after
such Right to Purchase is granted, such Participant would own, and/or hold
outstanding options or rights to purchase, shares of the Company or of any
Subsidiary, possessing five percent or more of the total combined voting power
or value of all classes of shares of the Company or such Subsidiary; or


 


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


 


12

















 


Five
Thousand Dollars ($25,000) of Fair Market Value of shares of Stock (determined
as of the date such Right to Purchase is granted) for each calendar year in
which such Right to Purchase is outstanding at any time.


 


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


 


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


 


10.03      Participation in Offerings. 
Except as may
be otherwise provided for herein, each Employee who is eligible for and elects
to participate in an Offering will be granted Rights to Purchase for as many
shares of Stock as the Participant may elect to purchase during that Offering,
to be paid by payroll deductions during such period.  The Committee will establish administrative rules and regulations
regarding the payroll deduction process for this Section 10.00, including,
without limitation, minimum and maximum permissible deductions; the timing for
initial elections, changes in elections and suspensions of elections during an
Offering Period; and the complete withdrawal by a Participant from an
Offering.  Amounts withheld through
payroll deductions under this Section 10.03 will be credited to each
Participant’s Cash Account.  Such
amounts will be delivered to a custodian for the Plan and held pending the
purchase of shares of Stock as described in Section 10.05.  Amounts held in a Participant’s Cash Account
will not bear interest.  If a
Participant withdraws entirely from an Offering (pursuant to rules established
by the Committee), the Participant’s Cash Account balance will not be used to
purchase shares of Stock on the Right to Purchase Date.  Instead, the portion of the Cash Account
equal to the Participant’s payroll deductions under the Plan during the
Offering Period will be refunded to the Participant without interest.  Such a Participant will not be eligible to
re-enroll in that Offering, but may resume participation on the Offering
Effective Date for the next Offering. 
In addition, the Committee may impose such other restrictions on the
right to withdraw from Offerings as it may deem appropriate.


 


10.04      Grant of Rights to Purchase. 
Rights to
Purchase with respect to shares of Stock will be granted to Participants who
elect to participate in an Offering. 
Such Rights to Purchase may be exercised on the Right to Purchase Date
applicable to the Offering.  The number
of shares of Stock subject to Rights to Purchase on each Right to Purchase Date
may not exceed the number of shares of Stock authorized for issuance during the
applicable Offering.


 


10.05      Exercise of Rights to Purchase.  Each
Right to Purchase will be exercised on the applicable Right to Purchase
Date.  Each Participant automatically
and without any act on the Participant’s part will be deemed to have exercised
a Right to Purchase on each Right to Purchase Date to purchase the number of
whole and fractional shares of Stock which the amount in his or her Cash
Account at that time is sufficient to purchase at the applicable purchase
price.  Any remaining amount credited to
a Participant’s Cash Account after such application will remain in such Participant’s
Cash Account for use in the next Offering unless withdrawn by the
Participant.  The Company will deliver
to the custodian of the Plan as soon as practicable after each Right to
Purchase Date a certificate for the total number of shares of Stock purchased
by all Participants on such Right to Purchase Date.  The custodian will allocate the proper number of shares of Stock
to the Share Account of each Participant. 
If the aggregate Cash Account balances of all Participants on any Right
to Purchase Date exceed the amount required to purchase all of the shares of
Stock subject to Rights to Purchase on that Right to Purchase Date, then the
shares of Stock subject to Rights to Purchase will be allocated pro rata among
the Participants in the proportion that the number of shares of Stock subject to
Rights to Purchase bears to the number of shares of Stock that could have been
purchased with such aggregate amount available, if an unlimited number of
shares of Stock were available for purchase. 
Any balances remaining in Participants’ Cash Accounts due to over
subscription will remain in the Participants’ Cash Accounts for use in the next
Offering unless withdrawn by the respective Participants.


 


10.06      Withdrawals
from Share Accounts and Dividend Reinvestment.  A Participant may withdraw the shares of
Stock credited to the Participant’s Share Account on a first-in-first-out
basis.  The Committee will establish
rules and regulations governing such withdrawals.  All cash dividends paid, if any, with respect


 


13

















 


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


 


10.07      Termination.  If a Participant Terminates for any reason,
including death, Disability, Retirement or other cause, his or her participation
in this Section 10.00 of the Plan will automatically and without any act
on his or her part terminate as of the date of Termination.  As soon as practicable following the
Participant’s Termination, the Company will refund to such Participant (or Beneficiary,
in the case of the Participant’s death) any amount in the Participant’s Cash
Account which constitutes payroll deductions, without interest, and the
custodian will deliver to such Participant (or Beneficiary) a share certificate
issued in the Participant’s (or Beneficiary’s) name for the number of whole
shares of Stock credited to the Participant’s Share Account through prior
Offerings.


 


10.08      Effect of
Merger or Liquidation Involving the Company. 
If the Company undergoes a merger or consolidation of the
Company or reclassification of Stock or the exchange of Stock for the
securities of another entity (other than a Subsidiary) that has acquired the
Company’s assets or which is in control [as defined in Code § 368(c)] of
an entity that has acquired the Company’s assets and the terms of the plan or
agreement are binding on all holders of Stock (except to the extent that
dissenting shareholders are entitled to relief under applicable law), then the
Committee may, in connection with any such transaction, cancel each outstanding
Right to Purchase and refund sums previously collected from Participants under
the canceled Rights to Purchase, or, in its discretion, cause each Participant
with outstanding Rights to Purchase to have his or her Rights to Purchase
exercised immediately prior to such transaction and thereby the balance of his
or her Cash Account applied to the purchase of shares of Stock at the purchase
price in effect for that Offering, which would be treated as ending with the
effective date of such transaction.  The
balances of the Cash Accounts not so applied will be refunded to the
Participants, without interest.


 


11.00      TERMINATION/BUY OUT


 


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


 


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


 


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


 


11.04      Termination for any Other Reason. 
Unless otherwise specified in the Award Agreement or subsequently, any
Awards that are outstanding when a Participant Terminates for any reason not
described in Sections 11.01 through 11.03 and which are then exercisable, or
which the Committee has, in its sole discretion, decided to make exercisable,
may be exercised at any time before the earlier of [1] the expiration date
specified in the Award Agreement or [2] three months beginning on the date
the Participant Terminates.


 


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


 


[1]           Forfeit
all outstanding Awards; and


 


14

















 


[2]           Forfeit
all shares of Stock or cash (including dividends held in escrow under Sections
7.04[2] and 8.04[2] acquired or received by the exercise of any Award, lapse of
any restrictions or attainment of any Performance Goals on the date of
Termination or within six months before and 24 months after Terminating,
including any amounts received under a “buy out” as described in Section 11.06.


 


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


 


[3]           Without
the Committee’s written consent, which may be withheld for any reason or for no
reason, serves (or agrees to serve) as an officer, director, consultant or
employee of any proprietorship, partnership, corporation, limited liability
company, association or other entity or becomes the owner of a business or a
member of a partnership, limited liability company, association or other entity
that competes with any portion of the Company’s (or a Subsidiary’s) business with
which the Member has been involved anytime within five years before Termination
or renders any service (including, without limitation, business consulting) to
entities that compete with any portion of the Company’s (or a Subsidiary’s)
business with which the Member has been involved anytime within five years
before Termination;


 


[4]           Refuses or fails to consult with, supply
information to or otherwise cooperate with the Company or any Subsidiary after
having been requested to do so;


 


[5]           Deliberately engages in any action that the
Committee concludes has caused substantial harm to the interests of the Company
or any Subsidiary;


 


[6]           Without
the Committee’s written consent, which may be withheld for any reason or for no
reason, on his or her own behalf or on behalf of any other person, partnership,
limited liability company, association, corporation or other entity, solicits
or in any manner attempts to influence or induce any employee of the Company or
a Subsidiary to leave the Company’s or Subsidiary’s employment or uses or
discloses to any person, partnership, limited liability company, association,
corporation or other entity any information obtained while an employee or
director of the Company or any Subsidiary concerning the names and addresses of
the Company’s and any Subsidiary’s employees;


 


[7]           Without
the Committee’s written consent, which may be withheld for any reason or for no
reason, discloses confidential and proprietary information relating to the
Company’s and its Subsidiaries’ business affairs (“Trade Secrets”), including
technical information, information about services provided and business and
marketing plans, strategies, customer information and other information
concerning the Company’s and Subsidiaries’ services, promotions, development, financing,
expansion plans, business policies and practices, salaries and benefits and
other forms of information considered by the Company to be proprietary and
confidential and in the nature of Trade Secrets;


 


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


 


[9]           Engaged
in conduct that the Committee reasonably concludes would have given rise to a
Termination for Cause had it been discovered before the Participant Terminated.


 


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


 


15

















 


However, unless otherwise
specified in the Award Agreement, no payment will be made with respect to any
Awards that are not exercisable when cancelled under this
Section 11.06.  The Company will
complete any buy out made under this Section 11.06 as soon as
administratively possible after the date of the Buy Out Notice.  At the Committee’s option, payment of the
buy out amount may be made in cash, in whole shares of Stock or partly in cash
and partly in shares of Stock.  The
number of whole shares of Stock, if any, included in the buy out amount will be
determined by dividing the amount of the payment to be made in shares of Stock
by the Fair Market Value as of the date of the Buy Out Notice.


 


12.00  MERGER, CONSOLIDATION OR SIMILAR EVENT


 


If
the Company undergoes a merger or consolidation of the Company or
reclassification of Stock or the exchange of Stock for the securities of
another entity (other than a Subsidiary) that has acquired the Company’s assets
or which is in control [as defined in Code §368(c)] of an entity that has
acquired the Company’s assets and the terms of that plan or agreement are
binding on all holders of Stock (except to the extent that dissenting
shareholders are entitled to relief under applicable law), then:  [a] all Options will become fully
exercisable and each affected Participant will receive, upon payment of the
Exercise Price, if applicable, securities or cash, or both, equal to those the
Participant would have been entitled to receive under the Plan or Award
Agreement if the Participant had already exercised the Options, [b] all
SARs will become fully exercisable, [c] all restrictions on Restricted
Stock will lapse; and [d] all Performance Goals associated
with Restricted Stock, Performance Shares or Performance Units will be deemed
to have been met and all Performance Periods accelerated.


 


13.00    AMENDMENT, MODIFICATION AND
TERMINATION OF PLAN


 


The
Board or the Committee may terminate, suspend or amend the Plan at any time
without shareholder approval except to the extent that shareholder approval is
required to satisfy applicable requirements imposed by [1] Rule 16b-3 under the
Act, or any successor rule or regulation, [2] applicable provisions of the Code
or [3] any
national securities exchange or other recognized market or quotation system
upon or through which the Company’s securities are listed or traded.  Also, no Plan amendment may [4] result
in the loss of a Committee member’s status as a “non-employee director” as
defined in Rule 16b-3 under the Act, or any successor rule or regulation, with
respect to any employee benefit plan of the Company, [5] cause the Plan to
fail to meet requirements imposed by Rule 16b-3 or [6] without the consent
of the affected Member, adversely affect any Award issued before the amendment,
modification or termination.  However,
nothing in this Section 13.00 will restrict the Committee’s right to
exercise the discretion retained in Section 11.06.


 


14.00      MISCELLANEOUS


 


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


 


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


 


16

















 


14.03      No Guarantee of Employment or
Participation.  Nothing in the Plan may be construed as:


 


[1]           Interfering
with or limiting the right of the Company or any Subsidiary to Terminate any
Employee’s employment at any time;


 


[2]           Conferring
on any Participant any right to continue as an Employee or director of the
Company or any Subsidiary;


 


[3]           Guaranteeing
that any Employee will be selected to be a Key Employee; or


 


[4]           Guaranteeing
that any Member will receive any future Awards.


 


14.04      Tax Withholding.


 


[1]           The
Company will withhold from other amounts owed to the Member, or require a
Member to remit to the Company, an amount sufficient to satisfy federal, state
and local withholding tax requirements on any Award, exercise or cancellation
of an Award or purchase of Stock.  If
these amounts are not to be withheld from other payments due to the Member (or
if there are no other payments due to the Member), the Company will defer
payment of cash or issuance of shares of Stock until the earlier of:


 


[a]           30
days after the settlement date; or


 


[b]           The
date the Member remits the required amount.


 


[2]           If
the Member has not remitted the required amount within 30 days after the
settlement date, the Company will permanently withhold from the value of the
Awards to be distributed the minimum amount required to be withheld to comply
with applicable federal, state and local income, wage and employment taxes and
distribute the balance to the Member.


 


[3]           In
its sole discretion, which may be withheld for any reason or for no reason, the
Committee may permit a Member to elect, subject to conditions the Committee
establishes, to reimburse the Company for this tax withholding obligation
through one or more of the following methods:


 


[a]           By
having shares of Stock otherwise issuable under the Plan withheld by the
Company (but only to the extent of the minimum amount that must be withheld to
comply with applicable state, federal and local income, employment and wage tax
laws);


 


[b]           By
delivering to the Company previously acquired shares of Stock that the Member
has owned for at least six months;


 


[c]           By
remitting cash to the Company; or


 


[d]           By remitting a personal check immediately
payable to the Company.


 


14.05      Indemnification.  Each individual who is or was a member of
the Committee or of the Board will be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be
made a party or in which he or she may be involved by reason of any action
taken or failure to take action under the Plan as a Committee member and
against and from any and all amounts paid, with the Company’s approval, by him
or her in settlement of any matter related to or arising from the Plan as a
Committee member or paid by him or her in satisfaction of any judgment in any
action, suit or proceeding relating to or arising from the Plan against him or
her as a Committee member, but only if he or she gives the Company an
opportunity, at its own expense, to handle and defend the matter before he or
she undertakes to handle and defend it in his or her own behalf.  The right of indemnification described in
this Section 14.05 is not exclusive and is independent of any other rights of
indemnification to which the individual may be entitled under the Company’s
organizational documents, by contract, as a matter of law or otherwise.


 


17

















 


14.06      No
Limitation on Compensation. 
Nothing in the Plan is to be construed to limit the right of the Company
to establish other plans or to pay compensation to its employees or directors,
in cash or property, in a manner not expressly authorized under the Plan.


 


14.07      Requirements
of Law.  The grant of Awards
and Rights to Purchase and the issuance of shares of Stock will be subject to
all applicable laws, rules and regulations and to all required approvals of any
governmental agencies or national securities exchange, market or other
quotation system.  Also, no shares of
Stock will be issued under the Plan unless the Company is satisfied that the
issuance of those shares of Stock will comply with applicable federal and state
securities laws.  Certificates for
shares of Stock delivered under the Plan may be subject to any stock transfer
orders and other restrictions that the Committee believes to be advisable under
the rules, regulations and other requirements of the SEC, any national
securities exchange or other recognized market or quotation system upon or
through which the Stock is then listed or traded, or any other applicable
federal or state securities law.  The
Committee may cause a legend or legends to be placed on any certificates issued
under the Plan to make appropriate reference to restrictions within the scope
of this Section 14.07.


 


14.08      Term of
Plan.  The Plan will be
effective upon its adoption by the Board and approval by the affirmative vote
of the holders of a majority of the shares of voting stock present in person or
represented by proxy at the first Annual Meeting occurring after the Board
approves the Plan.  Subject to Section
13.00, the Plan will continue until the tenth anniversary of the date it is
adopted by the Board or approved by the Company’s shareholders, whichever is
earliest.


 


14.09      Governing
Law.  The Plan, and all
agreements hereunder, will be construed in accordance with and governed by the
laws (other than laws governing conflicts of laws) of the United States and the
State of Ohio.


 


14.10      No Impact on
Benefits.  Plan Awards are
incentives designed to promote the objectives described in Section 1.00.  Also, Awards are not compensation for
purposes of calculating a Member’s rights under any employee benefit plan.


 


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