NN Exhibit 4.3


    
      

    


    EXHIBIT
      4.3

    


    NN,
      INC.

    2005
      STOCK INCENTIVE PLAN

     

    ARTICLE
      I  ESTABLISHMENT,
      OBJECTIVES, AND DURATION

     

    1.1  Establishment.
      NN,
      Inc., a Delaware corporation (the “Company”), hereby establishes an incentive
      compensation plan to be known as the “NN, Inc. 2005 Stock Incentive Plan” (the
“Plan”), as set forth in this document. The Plan permits the grant of
      Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
      Restricted Stock, Restricted Stock Units, Performance Shares, Stock Awards,
      Cash-Based Awards, and Annual Incentive Awards. This Plan is intended to replace
      the “NN, Inc. Stock Incentive Plan” which was adopted March 2, 1994, and
      expired March 2, 2004. 

     

    Subject
      to approval by the Company’s stockholders, this Plan shall become effective as
      of May 18, 2005 (the “Effective Date”) and shall remain in effect as provided in
      Section 1.3 hereof.

     

    1.2  Objectives
      of the Plan.
      The
      purpose of the Plan is to promote the interests of the Company and its
      stockholders by strengthening the Company’s ability to attract, motivate and
      retain Employees, consultants, advisors and Directors of the Company and its
      Subsidiaries and Affiliates upon whose judgment, initiative and efforts the
      financial success and growth of the business of the Company largely depend,
      and
      to provide an additional incentive for such individuals through stock ownership
      and other rights that promote and recognize the financial success and growth
      of
      the Company.

     

    1.3  Duration
      of the Plan.
      The
      Plan shall commence as of the Effective Date, as described in Section 1.1
      hereof, and shall remain in effect, subject to the right of the Board of
      Directors to amend or terminate the Plan at any time pursuant to
      Article XVII hereof, until all Shares subject to it shall have been
      purchased or acquired according to the Plan’s provisions. Notwithstanding the
      foregoing, in no event shall Incentive Stock Options be awarded to Participants
      following the tenth anniversary of the Effective Date of this Plan unless and
      until the stockholders of the Company re-approve the adoption of this Plan
      prior
      to such date.

     

    ARTICLE
      II  DEFINITIONS

     

    Whenever
      used in the Plan, the following terms shall have the meanings set forth below,
      and when the meaning is intended, the initial letter of the word shall be
      capitalized:

     

    2.1  “Affiliate”
      shall
      have the meaning ascribed to such term in Rule 12b-2 of the General Rules
      and Regulations of the Exchange Act.

     

    2.2  “Award”
      means,
      individually or collectively, a grant under this Plan of Nonqualified Stock
      Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
      Restricted Stock Units, Performance Shares, or Stock Awards.

     

    2.3  “Award
      Agreement”
      means
      either (i) an agreement entered into by the Company and a Participant setting
      forth the terms and provisions applicable to an Award granted under this Plan,
      or (ii) a statement issued by the Company to a Participant describing the terms
      and provisions of such Award.

     

    2.4  “Beneficial
      Owner”
      or
“Beneficial
      Ownership”
      shall
      have the meaning ascribed to such term in Rule 13d-3 of the General Rules and
      Regulations under the Exchange Act.

     

    2.5  “Board”
      or
“Board
      of Directors”
      means
      the Board of Directors of the Company.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2.6  “Change
      in Control”
      of the
      Company shall be deemed to have occurred as of the first day that any one or
      more of the following conditions shall have been satisfied:

     

     (a)  Any
      Person is or becomes the Beneficial Owner, directly or indirectly, of securities
      of the Company (not including in the securities beneficially owned by such
      Person any securities acquired directly from the Company or its Affiliates,
      other than in connection with the acquisition by the Company or its Affiliates
      of a business) representing more than fifty percent (50%) of either the then
      outstanding Shares or the combined voting power of the Company’s then
      outstanding securities; or

     

    (b)  The
      consummation of an agreement in which the Company agrees to merge or consolidate
      with any other entity, other than (i) a merger or consolidation which would
      result in the voting securities of the Company then outstanding immediately
      prior to such merger or consolidation continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity or any parent thereof), in combination with the ownership
      of
      any trustee or other fiduciary holding securities under an employee benefit
      plan
      of the Company, more than fifty percent (50%) of the combined voting power
      of
      the voting securities of the Company or such surviving entity or any parent
      thereof outstanding immediately after such merger or consolidation; or (ii)
      a
      merger or consolidation effected to implement a recapitalization of the Company
      (or similar transaction) in which no Person is or becomes the Beneficial Owner,
      directly or indirectly, of securities of the Company (not including in the
      securities beneficially owned by such Person any securities acquired directly
      from the Company or its Affiliates, other than in connection with the
      acquisition by the Company or its Affiliates of a business) representing more
      than fifty percent (50%) of either the then outstanding Shares of the Company
      or
      the combined voting power of the Company’s then outstanding securities;
      or

     

    (c)  The
      consummation of (i) a plan of complete liquidation or dissolution of the
      Company; or (ii) an agreement for the sale or disposition by the Company of
      all
      or substantially all of the Company’s assets, other than a sale or disposition
      by the Company of all or substantially all of the Company’s assets to an entity,
      more than fifty percent (50%) of the combined voting power of the voting
      securities of which are owned by Persons in substantially the same proportions
      as their ownership of the Company immediately prior to such sale or disposition;
      or

     

    (d)  The
      adoption of a resolution by the Board to the effect that any Person has acquired
      effective control of the business and affairs of the Company.

     

    Notwithstanding
      the foregoing, a Change in Control shall not be deemed to have occurred if
      there
      is consummated any transaction or series of integrated transactions immediately
      following which the record holders of the voting securities of the Company
      immediately prior to such transaction or series of transactions continue to
      have
      substantially the same proportionate ownership in an entity which owns all
      or
      substantially all of the assets of the company immediately following such
      transaction or series of transactions. Moreover, a Change in Control will not
      be
      deemed to have occurred by reason of a distribution of the voting securities
      of
      any of the Company’s Subsidiaries to the stockholders of the Company, or by
      means of an initial public offering of such securities.

     

    2.7  “Code”
      means
      the Internal Revenue Code of 1986, as amended from time to time.

     

    2.8  “Committee”
      means
      any committee appointed by the Board to administer Awards, as specified in
      Article III herein.

     

    2.9  “Company”
      means
      NN, Inc., a Delaware corporation, and any successor thereto as provided in
      Article XIX herein.

     

    2.10  “Covered
      Employee”
      means a
      Participant who, as of the anticipated date of vesting and/or payout of an
      Award, as applicable, is reasonably believed to be one of the group of “covered
      employees,” as defined in Code Section 162(m), or any successor statute, and the
      regulations promulgated under Code Section 162(m).

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.11  “Director”
      means
      any individual who is a member of the Board of Directors of the
      Company.

     

    2.12  “Employee”
      means
      any employee of the Company or any of its Subsidiaries or
      Affiliates.

     

    2.13  “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended from time to time, or any
      successor act thereto.

     

    2.14  “Fair
      Market Value”
      means
      with respect to a Share as of a given date, the last reported per Share sales
      price on the Nasdaq Stock Market (“Nasdaq”). If the Shares cease to be listed on
      Nasdaq, the Board shall designate an alternative method of determining the
      fair
      market value of the Shares. 

     

    2.15  “Fiscal
      Year”
      means
      the year commencing on January 1 and ending December 31.

     

    2.16  “Freestanding
      SAR”
      means an
      SAR that is granted independently of any Options, as described in Article VII
      herein.

     

    2.17  “Incentive
      Stock Option”
      or
“ISO”
      means an
      option to purchase Shares granted under Article VI herein and that is designated
      as an Incentive Stock Option and that is intended to meet the requirements
      of Code Section 422, or any successor provision.

     

    2.18  “Insider”
      shall
      mean an individual who is, on the relevant date, an officer, director, or more
      than ten percent (10%) Beneficial Owner of any class of the Company’s
      equity securities that is registered pursuant to Section 12 of the Exchange
      Act, all as determined by the Board in accordance with Section 16 of the
      Exchange Act.

     

    2.19  “Nonqualified
      Stock Option”
      or
“NQSO”
      means
      an Option that is not intended to meet the requirements of Code
      Section 422, or that otherwise does not meet such
      requirements.

     

    2.20  “Option”
      means an
      Incentive Stock Option or a Nonqualified Stock Option, as described in
      Article VI herein.

     

    2.21  “Option
      Price”
      means
      the price at which a Share may be purchased by a Participant pursuant to an
      Option.

     

    2.22  “Participant”
      means an
      Employee, Director, consultant or advisor who has been selected to receive
      an
      Award or who has an outstanding Award granted under the Plan.

     

    2.23  “Performance-Based
      Compensation”
      means an
      Award that qualifies as performance-based compensation under Code Section
      162(m).

     

    2.24  “Performance
      Measures”
      means
      measures as described in Article XI, the attainment of which may determine
      the
      degree of payout and/or vesting with respect to Awards to Covered Employees
      that
      are designated to qualify as Performance-Based Compensation.

     

    2.25  “Performance
      Period”
      means
      the period of time during which specified performance goals must be met in
      order
      to determine the degree of payout and/or vesting with respect to an
      Award.

     

    2.26  “Performance
      Share”
      means an
      Award granted to a Participant, as described in Article IX
      herein.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.27  “Period
      of Restriction”
      means
      the period when Restricted Stock or Restricted Stock Units are subject to a
      substantial risk of forfeiture (based on the passage of time, the achievement
      of
      performance goals, or upon the occurrence of other events as determined by
      the
      Board, at its discretion), as provided in Article VIII herein.

     

    2.28  “Person”
      shall
      have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
      Act and used in Sections 13(d) and 14(d) thereof, including a “group” as
      defined in Section 13(d) thereof.

     

          2.29  “Restricted
      Stock”
      means an
      Award granted to a Participant, as described in Article VIII
      herein.

     

    2.30  “Restricted
      Stock Unit”
      means an
      Award granted to a Participant, as described in Article VIII
      herein.

     

    2.31  “Shares”
      means
      the common stock of the Company, $1.00 par value per share.

     

    2.32  “Stock
      Appreciation Right”
      or
“SAR”
      means an
      Award, granted alone or in connection with a related Option, designated as
      an
      SAR, pursuant to the terms of Article VII herein.

     

    2.33  “Stock
      Award”
      means an
      Award granted to a Participant, as described in Article X herein.

     

    2.34  “Subsidiary”
      means
      any corporation, partnership, joint venture, limited liability company, or
      other
      entity (other than the Company) in an unbroken chain of entities beginning
      with
      the Company if, at the time of the granting of an Award, each of the entities
      other than the last entity in the unbroken chain owns at least fifty percent
      (50%) of the total combined voting power in one of the other entities in such
      chain.

     

    2.35  “Tandem
      SAR”
      means an
      SAR that is granted in connection with a related Option pursuant to Article
      VII
      herein, the exercise of which shall require forfeiture of the right to purchase
      a Share under the related Option (and when a Share is purchased under the
      Option, the Tandem SAR shall similarly be canceled).

     

    ARTICLE
      III  ADMINISTRATION

     

    3.1  General.
      Subject
      to the terms and conditions of the Plan, the Plan shall be administered by
      the
      Board or by the Committee which will consist of three or more persons who
      satisfy the requirements for a “non-employee director” under Rule 16b-3
      promulgated under the Exchange Act and/or the requirements for an “outside
      director” under Section 162(m) of the Code. The members of the Committee shall
      be appointed from time to time by, and shall serve at the discretion of, the
      Board. The Board may delegate to the Committee any or all of the administration
      of the Plan; provided, however, that the administration of the Plan with respect
      to Awards granted to Directors who are not Employees may not be so delegated.
      To
      the extent that the Board has delegated to the Committee any authority and
      responsibility under the Plan, all applicable references to the Board in the
      Plan shall be to the Committee.

     

    3.2  Authority
      of the Board.
      Except
      as limited by law or by the Certificate of Incorporation or Bylaws of the
      Company, and subject to the provisions herein, the Board shall have full power
      to select Employees, Directors, consultants and advisors who shall participate
      in the Plan; determine the sizes and types of Awards; determine the terms and
      conditions of Awards in a manner consistent with the Plan; construe and
      interpret the Plan and any agreement or instrument entered into under the Plan;
      and establish, amend, or waive rules and regulations for the Plan’s
      administration. Further, the Board shall make all other determinations that
      may
      be necessary or advisable for the administration of the Plan. 

     

    3.3  Delegation
      to Officers.
      Except
      as limited by law, the Board or the Committee may authorize one or more officers
      of the Company to do one or both of the following: (i) designate Employees,
      consultants and advisors of the Company or any of its Subsidiaries to be
      recipients of Awards, and (ii) determine the size, terms and conditions of
      any
      Award; provided, however, that no such authority may be delegated with respect
      to Awards made to any Insider, Covered Employee, or Director who is not an
      Employee.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.4  Decisions
      Binding.
      All
      determinations and decisions made by the Board pursuant to the provisions of
      the
      Plan and all related orders and resolutions of the Board shall be final,
      conclusive, and binding on all persons, including the Company, its stockholders,
      Directors, Employees, Participants, and their estates and
      beneficiaries.

     

    ARTICLE
      IV  SHARES
      SUBJECT TO THE PLAN AND MAXIMUM AWARDS

     

    4.1  Number
      of Shares Available for Awards.
      Subject
      to adjustment as provided in Section 4.2 herein, the number of Shares
      hereby reserved for issuance to Participants under the Plan shall be 1,000,000
      shares in the form of Options or SARs and 300,000 shares in the form of
      Restricted Stock, Restricted Stock Units, Performance Shares, or Stock Awards.
      Subject to the limit set forth in this section 4.1 on the number of shares
      of
      Shares that may be issued in the aggregate under this Plan, the maximum number
      of Shares that may be issued pursuant to ISOs shall be 1,000,000, all of which
      may be granted to one Participant. 

     

    4.2  Unless
      determined otherwise by the Board, Shares related to Awards that are forfeited,
      terminated, expire unexercised, tendered by a Participant to the Company in
      connection with the exercise of an Award (excluding shares previously acquired
      by a Participant), shall be available for other Awards. Awards settled in cash
      rather than Shares shall not reduce the number of Shares available for issuance
      under the Plan. Shares surrendered or withheld from issuance in connection
      with
      a Participant’s payment of tax withholding liability, or settled in such other
      manner so that a portion or all of the Shares included in an Award are not
      issued to a Participant, will not increase the number of Shares available under
      the Plan. With respect to SARS, when a share-settled SAR is exercised, the
      Shares subject to a SAR Award shall be counted against the Shares available
      for
      issuance as one Share for every Share subject thereto, regardless of the number
      of Shares used to settle the SAR upon exercise. 

     

    4.3  Adjustments
      in Authorized Shares.
      In the
      event of any corporate event or transaction such as a merger, consolidation,
      reorganization, recapitalization, separation, stock dividend, stock split,
      reverse stock split, split up, spin-off, or other distribution of stock or
      property of the Company, combination of shares, exchange of shares, dividend
      in
      kind or other like change in capital structure or distribution (other than
      normal cash dividends) to stockholders of the Company, or any similar corporate
      event or transaction, the Board, in its sole discretion, in order to prevent
      dilution or enlargement of Participants’ rights under the Plan, shall substitute
      or adjust, in an equitable manner, as applicable, the number and kind of Shares
      that may be issued under the Plan, the number and kind of Shares subject to
      outstanding Awards, the exercise price applicable to outstanding Awards, the
      Award limits, the Fair Market Value of the Shares, and other value
      determinations applicable to outstanding Awards.

     

    Appropriate
      adjustments may also be made by the Board in the terms of any Awards under
      the
      Plan to reflect such changes or distributions and to modify any other terms
      of
      outstanding Awards on an equitable basis, including modifications of performance
      targets and changes in the length of Performance Periods.

     

    The
      Board
      is authorized to make adjustments to the terms and conditions of, and the
      criteria included in, Awards in recognition of unusual or nonrecurring events
      affecting the Company or the financial statements of the Company, or in response
      to changes in applicable laws, regulations, or accounting principles; provided
      that no adjustment may be made with respect to Options, Stock Appreciation
      Rights, or Awards to Covered Employees intended to constitute Performance-Based
      Compensation. The determination of the Board as to the foregoing adjustments,
      if
      any, shall be conclusive and binding on Participants under the
      Plan.

     

    ARTICLE
      V  ELIGIBILITY
      AND PARTICIPATION

     

    5.1  Eligibility.
      Persons
      eligible to participate in this Plan include Employees, Directors, consultants
      and advisors of the Company and its Affiliates and Subsidiaries.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    5.2  Actual
      Participation.
      Subject
      to the provisions of the Plan, the Board may, from time to time, select from
      all
      eligible persons, those to whom Awards shall be granted and shall determine
      the
      nature and amount of each Award. Such Awards need not be made in a uniform
      manner and may be selectively awarded among otherwise eligible persons, whether
      or not such persons are similarly situated.

     

    ARTICLE
      VI  STOCK
      OPTIONS

     

    6.1  Grant
      of Options.
      Subject
      to the terms and provisions of the Plan, Options may be granted to Participants
      in such number, and upon such terms, and at any time and from time to time
      as shall be determined by the Board, provided that ISOs shall not be granted
      to
      persons who are not Employees.

     

    6.2  Award
      Agreement.
      Each
      Option grant shall be evidenced by an Award Agreement that shall specify the
      Option Price, the duration of the Option, the number of Shares to which the
      Option pertains, the conditions upon which an Option shall become vested and
      exercisable, and such other provisions as the Board shall determine which are
      not inconsistent with the terms of the Plan. The Award Agreement also shall
      specify whether the Option is intended to be an ISO or an NQSO.

     

    6.3  Option
      Price.
      The
      Option Price for each grant of an Option under this Plan shall be as determined
      by the Board; provided, however, the Option Price shall not be less than one
      hundred percent (100%) of the Fair Market Value of the Shares on the date the
      Option is granted.

     

    6.4  Duration
      of Options.
      Each
      Option granted to a Participant shall expire at such time as the Board shall
      determine at the time of grant; provided, however, no Option shall be
      exercisable later than the tenth (10th) anniversary of its date of
      grant.

     

    6.5  Exercise
      of Options.
      Options
      granted under this Article VI shall be exercisable at such times and be
      subject to such restrictions and conditions as the Board shall in each instance
      approve, which need not be the same for each grant or for each
      Participant.

     

    6.6  Payment.
      Options
      granted under this Article VI shall be exercised by the delivery of a written
      notice of exercise to the Company, setting forth the number of Shares with
      respect to which the Option is to be exercised, accompanied by full payment
      for
      the Shares.

     

    The
      Option Price upon exercise of any Option shall be payable to the Company in
      full
      either: (a) in cash or its equivalent; (b) by tendering previously acquired
      Shares having an aggregate Fair Market Value at the time of exercise equal
      to
      the total Option Price (provided that the Shares that are tendered must have
      been held by the Participant for at least six (6) months prior to their tender
      to satisfy the Option Price or have been purchased on the open market); (c)
      by a
      combination of (a) and (b); or (d) any other method approved by the Board
      in its sole discretion at the time of grant and as set forth in the Award
      Agreement.

     

    The
      Board
      also may allow cashless exercise as permitted under the Federal Reserve Board’s
      Regulation T, subject to applicable securities law restrictions, or by any
      other means which the Board determines to be consistent with the Plan’s purpose
      and applicable law.

     

    Subject
      to any governing rules or regulations, as soon as practicable after receipt
      of a
      written notification of exercise and full payment, the Company shall deliver
      to
      the Participant, in the Participant’s name, Share certificates in an appropriate
      amount based upon the number of Shares purchased under the
      Option(s).

     

    Unless
      otherwise determined by the Board, all payments under all of the methods
      indicated above shall be paid in United States dollars.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    6.7  Termination
      of Employment/Service Relationship.
      Each
      Participant’s Award Agreement shall set forth the extent to which the
      Participant shall have the right to exercise the Option following termination
      of
      the Participant’s employment or service relationship with the Company, its
      Affiliates and/or its Subsidiaries, as the case may be. Such provisions shall
      be
      determined in the sole discretion of the Board, shall be included in the Award
      Agreement entered into with each Participant, need not be uniform among all
      Options issued pursuant to this Article VI, and may reflect distinctions based
      on the reasons for termination.

     

    6.8  Transferability
      of Options.

     

    (a)  Incentive
      Stock Options. No ISO granted under the Plan may be sold, transferred, pledged,
      assigned, or otherwise alienated or hypothecated, other than by will or by
      the
      laws of descent and distribution.

     

    (b)  Nonqualified
      Stock Options. Except as otherwise provided in a Participant’s Award Agreement,
      no NQSO granted under this Article VI may be sold, transferred, pledged,
      assigned, or otherwise alienated or hypothecated, other than by will or by
      the
      laws of descent and distribution. Further, except as otherwise provided in
      a
      Participant’s Award Agreement, all NQSOs granted to a Participant under this
      Article VI shall be exercisable during his or her lifetime only by such
      Participant.

     

    6.9  Notification
      of Disqualifying Disposition.
      If any
      Participant shall make any disposition of Shares issued pursuant to the exercise
      of an Incentive Stock Option under the circumstances described in Section 421(b)
      of the Code (relating to certain disqualifying dispositions), such Participant
      shall notify the Company of such disposition within ten (10) days
      thereof.

     

    ARTICLE
      VII  STOCK
      APPRECIATION RIGHTS

     

    7.1  Grant
      of SARs.
      Subject
      to the terms and conditions of the Plan, SARs may be granted to Participants
      at
      any time and from time to time as shall be determined by the Board. The Board
      may grant Freestanding SARs, Tandem SARs, or any combination of
      either.

     

    Subject
      to the terms and conditions of the Plan, the Board shall have complete
      discretion in determining the number of SARs granted to each Participant and,
      consistent with the provisions of the Plan, in determining the terms and
      conditions pertaining to such SARs.

     

    The
      grant
      price of a Freestanding SAR shall be no less than the Fair Market Value of
      a
      Share on the date of grant of the SAR. The grant price of Tandem SARs shall
      equal the Option Price of the related Option.

     

    7.2  SAR
      Agreement.
      Each
      SAR grant shall be evidenced by an Award Agreement that shall specify the grant
      price, the term of the SAR, and such other provisions as the Board shall
      determine.

     

    7.3  Term
      of SARs.
      The
      term of an SAR granted under the Plan shall be determined by the Board, in
      its
      sole discretion; provided, however, that no SAR shall be exercisable later
      than
      the tenth (10th) anniversary of its date of grant.

     

    7.4  Exercise
      of Freestanding SARs.
      Freestanding SARs may be exercised upon whatever terms and conditions the Board,
      in its sole discretion, imposes upon them.

     

    7.5  Exercise
      of Tandem SARs.
      Tandem
      SARs may be exercised for all or part of the Shares subject to the related
      Option upon the surrender of the right to exercise the equivalent portion of
      the
      related Option. A Tandem SAR may be exercised only with respect to the Shares
      for which its related Option is then exercisable.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    7.6  Payment
      of SAR Amount.
      Upon
      the exercise of an SAR, a Participant shall be entitled to receive payment
      from
      the Company in an amount determined by multiplying:

     

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

     

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

     

    At
      the
      discretion of the Board, the payment upon SAR exercise may be in cash, in Shares
      of equivalent value, or any combination of either. The Board’s determination
      regarding the form of SAR payout shall be set forth in the Award Agreement
      pertaining to the grant of the SAR.

     

    7.7  Termination
      of Employment/Service Relationship.
      Each
      Award Agreement shall set forth the extent to which the Participant shall have
      the right to exercise the SAR following termination of the Participant’s
      employment or service relationship with the Company, its Affiliates, and/or
      its
      Subsidiaries, as the case may be. Such provisions shall be determined in the
      sole discretion of the Board, shall be included in the Award Agreement entered
      into with Participants, need not be uniform among all SARs issued pursuant
      to
      the Plan, and may reflect distinctions based on the reasons for
      termination.

     

    7.8  Nontransferability.
      Except
      as otherwise provided in a Participant’s Award Agreement, no SAR granted under
      the Plan may be sold, transferred, pledged, assigned, or otherwise
      alienated or hypothecated, other than by will or by the laws of descent and
      distribution. Further, except as otherwise provided in a Participant’s Award
      Agreement, all SARs granted to a Participant under the Plan shall be exercisable
      during his or her lifetime only by such Participant.

     

    ARTICLE
      VIII  RESTRICTED
      STOCK AND RESTRICTED STOCK UNITS

     

    8.1  Grant
      of Restricted Stock/Units.
      Subject
      to the terms and provisions of the Plan, the Board, at any time and from time
      to
      time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
      Participants in such amounts as the Board shall determine. Restricted Stock
      Units shall be similar to Restricted Stock except that no Shares shall be
      actually awarded to the Participant on the date of grant.

     

    8.2  Restricted
      Stock Agreement.
      Each
      Restricted Stock and/or Restricted Stock Unit grant shall be evidenced by an
      Award Agreement that shall specify the Period(s) of Restriction, the number
      of
      Shares of Restricted Stock (or the number of Restricted Stock Units) granted,
      and such other provisions as the Board shall determine.

     

    8.3  Nontransferability.
      Except
      as otherwise provided in a Participant’s Award Agreement, the Shares of
      Restricted Stock and/or Restricted Stock Units granted herein may not be sold,
      transferred, pledged, assigned, or otherwise alienated or hypothecated until
      the
      end of the applicable Period of Restriction established by the Board and
      specified in the Award Agreement, or upon earlier satisfaction of any other
      conditions, as specified by the Board in its sole discretion and set forth
      in
      the Award Agreement.

     

    8.4  Other
      Restrictions.
      The
      Board shall impose such other conditions and/or restrictions on any Shares
      of
      Restricted Stock or Restricted Stock Units granted pursuant to the Plan as
      it
      may deem advisable including, without limitation, a requirement that
      Participants pay a stipulated purchase price for each Share of Restricted Stock
      or each Restricted Stock Unit, restrictions based upon the achievement of
      specific performance goals, time-based restrictions on vesting following the
      attainment of the performance goals or Performance Measures, time-based
      restrictions, and/or restrictions under applicable federal or state securities
      laws.

     

    To
      the
      extent deemed appropriate by the Board, the Company may retain the certificates
      representing Shares of Restricted Stock in the Company’s possession until such
      time as all conditions and/or restrictions applicable to such Shares have been
      satisfied or lapse.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Except
      as
      otherwise provided in a Participant’s Award Agreement, Shares of Restricted
      Stock covered by each Restricted Stock Award shall become freely transferable
      by
      the Participant after all conditions and restrictions applicable to such Shares
      have been satisfied or lapse, and Restricted Stock Units shall be paid in cash,
      Shares, or a combination of either as the Board, in its sole discretion, shall
      determine.

     

    8.5  Voting
      Rights.
      To the
      extent permitted, or required by law, as determined by the Board, Participants
      holding Shares of Restricted Stock granted hereunder may be granted the right
      to
      exercise full voting rights with respect to those Shares during the Period
      of
      Restriction. A Participant shall have no voting rights with respect to any
      Restricted Stock Units granted hereunder.

     

    8.6  Dividends
      and Other Distributions.
      During
      the Period of Restriction, Participants holding Shares of Restricted Stock
      or
      Restricted Stock Units granted hereunder may, if the Board so determines, be
      credited with dividends paid with respect to the underlying Shares or dividend
      equivalents while they are so held in a manner determined by the Board in its
      sole discretion. The Board may apply any restrictions to the dividends that
      the
      Board deems appropriate. The Board, in its sole discretion, may determine the
      form of payment of dividends or dividend equivalents, including cash, Shares,
      Restricted Stock, or Restricted Stock Units.

     

    8.7  Termination
      of Employment/Service Relationship.
      In the
      event a Participant’s employment or service relationship terminates for any
      reason, including by reason of death, disability, or retirement, all Shares
      of
      Restricted Stock and/or Restricted Stock Units shall be forfeited by the
      Participant unless determined otherwise by the Board, as set forth in the
      Participant’s Award Agreement. Any such provisions shall be determined in the
      sole discretion of the Board, shall be included in the Award Agreement entered
      into with each Participant, need not be uniform among all Shares of Restricted
      Stock or Restricted Stock Units issued pursuant to the Plan, and may reflect
      distinctions based on the reasons for termination.

     

    8.8  Section
      83(b) Election.
      The
      Board may provide in an Award Agreement that the Award of Restricted Stock
      is
      conditioned upon the Participant making or refraining from making an election
      with respect to the Award under Section 83(b) of the Code. If a Participant
      makes an election pursuant to Section 83(b) of the Code concerning a Restricted
      Stock Award, the Participant shall be required to promptly file a copy of such
      election with the Company.

     

    ARTICLE
      IX  PERFORMANCE
      SHARES

     

    9.1  Grant
      of Performance Shares.
      Subject
      to the terms of the Plan, Performance Shares may be granted to Participants
      in such amounts and upon such terms, and at any time and from time to time,
      as
      shall be determined by the Board.

     

    9.2  Value
      of Performance Shares.
      Each
      Performance Share shall have an initial value equal to the Fair Market Value
      of
      a Share on the date of grant. The Board shall set performance goals or
      Performance Measures in its discretion which, depending on the extent to which
      they are met, will determine the number and/or value of Shares that will be
      paid
      out to the Participant.

     

    9.3  Earning
      of Performance Shares.
      Subject
      to the terms of this Plan, after the applicable Performance Period has
      ended, the holder of Performance Shares shall be entitled to receive payout
      on
      the number and value of Performance Shares earned by the Participant over the
      Performance Period, to be determined as a function of the extent to which
      the corresponding performance goals or Performance Measures have been
      achieved.

     

    9.4  Form
      and Timing of Payment of Performance Shares.
      Payment
      of earned Performance Shares shall be as determined by the Board and as
      evidenced in the Award Agreement. Subject to the terms of the Plan the
      Board, in its sole discretion, may pay earned Performance Shares in the
      form of cash or in Shares (or in a combination thereof) equal to the value
      of
      the earned Performance Shares at the close of the applicable Performance Period.
      Any Shares may be granted subject to any restrictions deemed appropriate by
      the
      Board. The determination of the Board with respect to the form of payout of
      such
      Awards shall be set forth in the Award Agreement pertaining to the grant of
      the
      Award.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    9.5  Dividends
      and Other Distributions.
      At the
      discretion of the Board, Participants holding Performance Shares may be entitled
      to receive dividend equivalents with respect to dividends declared with respect
      to the Shares. Such dividends may be subject to the accrual, forfeiture, or
      payout restrictions as determined by the Board in its sole
      discretion.

     

    9.6  Termination
      of Employment/Service Relationship.
      In the
      event a Participant’s employment or service relationship terminates for any
      reason, including by reason of death, disability, or retirement, all Performance
      Shares shall be forfeited by the Participant unless determined otherwise by
      the
      Board, as set forth in the Participant’s Award Agreement. Any such provisions
      shall be determined in the sole discretion of the Board, shall be included
      in
      the Award Agreement entered into with each Participant, need not be uniform
      among all Performance Shares issued pursuant to the Plan, and may reflect
      distinctions based on the reasons for termination.

     

    9.7  Nontransferability.
      Except
      as otherwise provided in a Participant’s Award Agreement, Performance Shares may
      not be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated, other than by will or by the laws of descent and
      distribution.

     

    ARTICLE
      X  STOCK
      AWARDS

     

    10.1  Stock
      Awards.
      The
      Board may grant other types of equity-based or equity-related Awards (including
      the grant or offer for sale of unrestricted Shares) in such amounts and subject
      to such terms and conditions, as the Board shall determine. Such Awards may
      entail the transfer of actual Shares to Participants, or payment in cash or
      otherwise of amounts based on the value of Shares and may include, without
      limitation, Awards designed to comply with or take advantage of the applicable
      local laws of jurisdictions other than the United States.

     

    ARTICLE
      XI  PERFORMANCE
      MEASURES

     

    Unless
      and until the Board proposes for stockholder vote and the stockholders approve
      a
      change in the general Performance Measures set forth under this Article XI,
      the
      performance criteria upon which the payment or vesting of an Award to a Covered
      Employee that is intended to qualify as Performance-Based Compensation shall
      be
      limited to the following Performance Measures:

     

    (a)  Net
      earnings;

     

    (b)  Revenues;

     

    (c)  Earnings
      per share;

     

    (d)  Net
      sales
      growth;

     

    (e)  Net
      income (before or after taxes);

     

    (f)  Net
      operating profit;

     

    (g)  Return
      measures (including, but not limited to, return on assets, capital, equity,
      or
      sales);

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (h)  Cash
      flow
      (including, but not limited to, operating cash flow and free cash
      flow);

     

    (i)  Earnings
      before or after taxes, interest, depreciation and/or amortization;

     

    (j)  Internal
      rate of return or increase in net present value;

     

    (k)  Gross
      margins;

     

    (l)  Gross
      margins minus expenses;

     

    (m)  Operating
      income or margin;

     

    (n)  Share
      price (including, but not limited to, growth measures and total shareholder
      return);

     

    (o)  Working
      capital targets relating to inventory and/or accounts receivable;

     

    (p)  Comparisons
      to the performance of other companies;

     

    (q)  Level
      of
      dividends; and

     

    (r)  Units
      sold.

     

    Any
      of
      the foregoing Performance Measures may be used to measure the performance of
      the
      Company as a whole or any business unit of the Company or any combination
      thereof, as the Board may deem appropriate, or any of the above goals as
      compared to the performance of a group of comparator companies, or published
      or
      special index that the Board, in its sole discretion deems
      appropriate.

     

    Awards
      that are designed to qualify as Performance-Based Compensation, and that are
      held by Covered Employees, may not be adjusted upward. The Board shall retain
      the discretion to adjust such Awards downward.

     

    In
      the
      event that applicable tax and/or securities laws change to permit Board
      discretion to alter the governing Performance Measures without obtaining
      stockholder approval of such changes, the Board shall have sole discretion
      to
      make such changes without obtaining stockholder approval. In addition, in the
      event that the Board determines that it is advisable to grant Awards that shall
      not qualify as Performance Based Compensation, the Board may make such grants
      without satisfying the requirements of Code Section 162(m).

     

    ARTICLE
      XII  BENEFICIARY
      DESIGNATION

     

    Each
      Participant under the Plan may, from time to time, name any beneficiary or
      beneficiaries (who may be named contingently or successively) to whom any
      benefit under the Plan is to be paid in case of his or her death before he
      or
      she receives any or all of such benefit. Each such designation shall revoke
      all prior designations by the same Participant, shall be in a form prescribed
      by
      the Company, and will be effective only when filed by the Participant in writing
      with the Company during the Participant’s lifetime. In the absence of any such
      designation, benefits remaining unpaid at the Participant’s death shall be paid
      to the Participant’s estate.

     

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XIII  DEFERRALS

     

    The
      Board
      may permit or require a Participant to defer the receipt of any payment of
      cash
      or the delivery of Shares that would otherwise be due to such Participant by
      virtue of the exercise of an Option or SAR, the lapse or waiver of restrictions
      with respect to Restricted Shares, or the satisfaction of any requirements
      or
      goals with respect to Performance Shares or Stock Awards. If any such deferral
      election is required or permitted, the Board shall, in its sole discretion,
      establish rules and procedures for such payment deferrals.

     

    ARTICLE
      XIV  RIGHTS
      OF PARTICIPANTS

     

    14.1  Employment.
      Nothing
      in the Plan or an Award Agreement shall interfere with or limit in any way
      the
      right of the Company to terminate any Participant’s employment or other service
      relationship at any time, nor confer upon any Participant any right to continue
      in the capacity in which he is employed or otherwise serves the
      Company.

     

    Neither
      an Award nor any benefits arising under this Plan shall constitute part of
      an
      employment contract with the Company or any Subsidiary or Affiliate, and,
      accordingly, subject to Section 16.3, this Plan and the benefits hereunder
      may
      be terminated at any time in the sole and exclusive discretion of the Board
      without giving rise to liability on the part of the Company or any Subsidiary
      or
      Affiliate for severance payments.

     

    14.2  Participation.
      No
      person shall have the right to be selected to receive an Award under this Plan,
      or, having been so selected, to be selected to receive a future
      Award.

     

      14.3  Rights
      as a Stockholder.
      A
      Participant shall have none of the rights of a stockholder with respect to
      Shares covered by any Award until the Participant becomes the record holder
      of
      such shares.

     

    ARTICLE
      XV  CHANGE
      IN CONTROL

     

    Except
      as
      provided herein or a Participant’s Award Agreement, or unless otherwise
      prohibited under applicable laws or by the rules and regulations of any
      governing governmental agencies or national securities exchanges, in the event
      of a Change in Control:

     

    (i) Any
      and
      all Options and SARs granted hereunder shall become immediately exercisable,
       and
      shall
      remain exercisable throughout their entire term;

     

    (ii) Any
      Period of Restriction and restrictions imposed on Restricted Shares/Units shall
       lapse;
      and 

     

    (iii) The
      target payout opportunities attainable under all outstanding performance-based
       Awards
      shall be deemed to have been fully earned as of the effective date of the Change
       in
      Control and shall be paid, within thirty (30) days thereafter, pro rata to
      Participants in  cash
      or
      in Shares, as applicable, with the proration determined as a function of the
      length  of
      time
      within the Performance Period that has elapsed prior to the Change in Control,
       and
      based
      on an assumed achievement of all relevant targeted performance goals or
 Performance
      Measures.

     

    Notwithstanding
      the foregoing, (i), (ii) and (iii) above shall not apply in the event of a
      Change in Control under paragraph (b) or (c) of Section 2.6 (relating to s
      merger or sale of assets), if the successor entity either assumes the
      outstanding Award or substitutes an equivalent award with the successor entity
      (or its parent or any subsidiary). For the purposes of this paragraph, an Award
      shall be considered assumed if, immediately following the transaction, the
      Award
      confers the right to purchase or receive, for each Share subject to the Award
      immediately prior to such transaction, equal consideration (whether stock,
      cash,
      or other securities or property) as received by holders of each Share of common
      stock held on the effective date of the transaction (and if holders of Shares
      were offered a choice of consideration, the type of consideration chosen by
      the
      holders of a majority of the outstanding Shares); provided, however, that if
      such consideration received in the transaction is not solely common stock of
      the
      successor corporation (or its parent), the Committee may, with the consent
      of
      the successor entity, provide for the consideration to be received upon the
      exercise of the Award, for each Share subject to the Award, to be cash and/or
      other securities equal in fair market value to the per share consideration
      received by holders of common stock in the merger or sale of
      assets.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XVI  AMENDMENT,
      MODIFICATION, SUSPENSION, AND TERMINATION

     

    16.1  Amendment,
      Modification, Suspension, and Termination.
      Subject
      to the terms of the Plan, the Board may at any time and from time to time,
      alter, amend, modify, suspend, or terminate the Plan in whole or in part;
      provided that no action shall be taken without the approval of the Company’s
      stockholders which would (i) except as provided in Section 4.2 hereof,
      materially increase the number of Shares which may be issued under the Plan;
      (ii) materially increase the benefits to Participants; (iii) permit the granting
      of Options at less than Fair Market Value; (iv) permit Options issued under
      the
      Plan to be repriced, replaced, or regranted through cancellation, or by lowering
      the exercise price of a previously granted Option; (v) amend the maximum number
      of Shares set forth in Section 4.1 that may be granted to a single Participant
      during any Fiscal Year; (vi) extend the duration of the Plan; (vii) expand
      the
      class of Participants eligible to participate in the Plan; (viii) expand the
      types of Awards provided under the Plan; or (ix) require stockholder approval
      under the listing standards of the Nasdaq Stock Market. 

     

    16.2  Adjustment
      of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
      Events.
      The
      Board may make adjustments in the terms and conditions of, and the criteria
      included in, Awards in recognition of unusual or nonrecurring events (including,
      without limitation, the events described in Section 4.2 hereof) affecting the
      Company or the financial statements of the Company or of changes in
      applicable laws, regulations, or accounting principles, whenever the Board
      determines that such adjustments are appropriate in order to prevent unintended
      dilution or enlargement of the benefits or potential benefits intended to be
      made available under the Plan.

     

    16.3  Awards
      Previously Granted.
      Notwithstanding any other provision of the Plan to the contrary, no termination,
      amendment, suspension, or modification of the Plan shall adversely affect
      in any material way any Award previously granted under the Plan, without
      the written consent of the Participant holding such Award.

     

    ARTICLE
      XVII  WITHHOLDING

     

    17.1  Tax
      Withholding.
      The
      Company shall have the power and the right to deduct or withhold, or require
      a
      Participant to remit to the Company, the minimum statutory amount to satisfy
      Federal, state, and local taxes, domestic or foreign, required by law or
      regulation to be withheld with respect to any taxable event arising as a result
      of this Plan.

     

    17.2  Share
      Withholding.
      With
      respect to withholding required upon the exercise of Options or SARs, upon
      the
      lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon
      any other taxable event arising as a result of Awards granted hereunder,
      Participants may elect, subject to the approval of the Board, to satisfy the
      withholding requirement, in whole or in part, by having the Company withhold
      Shares having a Fair Market Value on the date the tax is to be determined equal
      to the minimum statutory total tax that could be imposed on the transaction.
      All
      such elections shall be irrevocable, made in writing and signed by the
      Participant, and shall be subject to any restrictions or limitations that the
      Board, in its sole discretion, deems appropriate.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    ARTICLE
      XVIII  INDEMNIFICATION

     

    Each
      person who is or shall have been a member of the Committee, or of the Board,
      or
      an officer of the Company to whom authority was delegated in accordance with
      Article III shall 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 a party or in
      which
      he or she may be involved by reason of any action taken or failure to act under
      the Plan and against and from any and all amounts paid by him or her in
      settlement thereof, with the Company’s approval, or paid by him or her in
      satisfaction of any judgement in any such action, suit, or proceeding against
      him or her, provided he or she shall give the Company an opportunity, at its
      own
      expense, to handle and defend the same before he or she undertakes
      to handle and defend it on his or her own behalf, unless such loss, cost,
      liability, or expense is a result of his or her own willful misconduct or except
      as expressly provided by statute.

     

    The
      foregoing right of indemnification shall not be exclusive of any other rights
      of
      indemnification to which such persons may be entitled under the Company’s
      Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
      power that the Company may have to indemnify them or hold them
      harmless.

     

    ARTICLE
      XIX  SUCCESSORS

     

    All
      obligations of the Company under the Plan with respect to Awards granted
      hereunder shall be binding on any successor to the Company, whether the
      existence of such successor is the result of a direct or indirect purchase,
      merger, consolidation, or otherwise, of all or substantially all of the business
      and/or assets of the Company.

     

    ARTICLE
      XX  GENERAL
      PROVISIONS

     

    20.1  Forfeiture
      Events.
      The
      Board may specify in an Award Agreement that the Participant’s rights, payments
      and benefits with respect to an Award shall be subject to reduction,
      cancellation, forfeiture or recoupment upon the occurrence of certain specified
      events, in addition to any otherwise applicable vesting or performance
      conditions of an Award. Such events shall include, but shall not be limited
      to,
      termination of employment for cause, violation of material Company or Affiliate
      policies, breach of noncompetition, confidentiality or other restrictive
      covenants that may apply to the Participant, or other conduct by the Participant
      that is detrimental to the business or reputation of the Company or any
      Affiliate.

     

    20.2  Legend.
      The
      Board may require each person receiving Shares pursuant to an Award under this
      Plan to represent to and agree with the Company in writing that the Participant
      is acquiring the Shares without a view to distribution thereof. In addition,
      to
      any legend required by this Plan, the certificates for such Shares may include
      any legend which the Board deems appropriate to reflect any restrictions on
      transfer of such Shares.

     

    20.3  Gender
      and Number.
      Except
      where otherwise indicated by the context, any masculine term used herein also
      shall include the feminine; the plural shall include the singular and the
      singular shall include the plural.

     

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

     

    20.5  Requirements
      of Law.
      The
      granting of Awards and the issuance of Shares under the Plan shall be subject
      to
      all applicable laws, rules, and regulations, and to such approvals by any
      governmental agencies or national securities exchanges as may be required.
      The
      Company shall receive the consideration required by law for the issuance of
      Awards under the Plan.

     

    20.6  Securities
      Law Compliance.
      With
      respect to Insiders, transactions under this Plan are intended to comply with
      all applicable conditions of Rule 16b-3 or its successor under the Exchange
      Act,
      unless determined otherwise by the Board. To the extent any provision of the
      Plan or action by the Board fails to so comply, it shall be deemed null and
      void, to the extent permitted by law and deemed advisable by the Board.


     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    20.7  Restrictions
      on Share Transferability.
      The
      Board may impose such restrictions on any Shares acquired pursuant to an Award
      granted under this Plan as it may deem advisable, including, without limitation,
      restrictions under applicable federal securities laws, under the requirements
      of
      any stock exchange or market upon which such Shares are then listed
      and/or traded, and under any blue sky or state securities laws applicable
      to such Shares.

     

    20.8  Listing.
      The
      Company may use reasonable endeavors to register Shares allotted pursuant to
      the
      exercise of an Award with the United States Securities and Exchange Commission
      or to effect compliance with the registration, qualification, and listing
      requirements of any national securities laws, stock exchange, or automated
      quotation system.

     

    20.9  Delivery
      of Title.
      The
      Company shall have no obligation to issue or deliver evidence of title for
      Shares awarded under the Plan prior to:

     

    (a)  Obtaining
      any approvals from governmental agencies that the Company determines are
      necessary or advisable; and

     

    (b)  Completion
      of any registration or other qualification of the Shares under any applicable
      national or foreign law or ruling of any governmental body that the Company
      determines to be necessary or advisable.

     

    20.10  Inability
      to Obtain Authority.
      Notwithstanding any provision in this Plan to the contrary, if at any time
      the
      Company shall determine (in accordance with the provisions of the following
      sentence) that it is necessary as a condition of, or in connection with, the
      grant or exercise of any Award or the distribution of any Shares or cash under
      the Plan to (1) satisfy withholding tax or other withholding liabilities, (2)
      effect the listing, registration or qualification on any securities exchange,
      on
      any quotation system, or under any federal, state or local law, of any Shares
      otherwise deliverable in connection with such grant, exercise or distribution
      or
      (3) obtain the consent or approval of any regulatory body, then in any such
      event such grant, exercise or distribution shall not be effective unless such
      withholding, listing, registration, qualification, consent or approval shall
      have been effected or obtained free of any conditions not acceptable to the
      Company in its reasonable and good faith judgment. In seeking to effect or
      obtain any such withholding, listing, registration, qualification, consent
      or
      approval, the Company shall act with all reasonable diligence. Any such
      postponement or limitation affecting the right to exercise an Award or the
      grant
      or distribution of an Award, Shares or cash shall not extend the time within
      which the Award may be granted or exercised or the Shares or cash distributed,
      unless the Company and the Participant choose to amend the terms of the Award
      to
      provide for such an extension; and neither the Company, nor any of its Directors
      or officers shall have any obligation or liability to the Participant (or to
      a
      beneficiary) by reason of any such postponement or limitation.

     

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

     

    20.12  Employees
      Based Outside of the United States.
      Notwithstanding any provision of the Plan to the contrary, in order to comply
      with the laws in other countries in which the Company, its Affiliates, and
      its
      Subsidiaries operate or have Employees, the Board, in their sole discretion,
      shall have the power and authority to:

     

    (a)  Determine
      which Affiliates and Subsidiaries shall be covered by the Plan;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b)  Determine
      which persons outside the United States are eligible to participate in the
      Plan;

     

    (c)  Modify
      the terms and conditions of any Award granted to persons outside the United
      States to comply with applicable foreign laws;

     

    (d)  Establish
      subplans and modify exercise procedures, and other terms and procedures to
      the
      extent such actions may be necessary or advisable; and

     

    (e)  Take
      any
      action, before or after an Award is made, that it deems advisable to obtain
      approval or comply with any necessary local government regulatory exemptions
      or
      approvals.

     

    Notwithstanding
      the above, the Board may not take any actions hereunder, and no Awards shall
      be
      granted, that would violate the Exchange Act, the Code, any securities law
      or
      governing statute or any other applicable law.

     

    20.13  Noncertificated
      Shares.
      To the
      extent that the Plan provides for issuance of certificates to reflect the
      transfer of Shares, the transfer of such Shares may be effected on a
      noncertificated basis, to the extent not prohibited by applicable law or the
      rules of any stock exchange.

     

    20.14  Unfunded
      Plan.
      Participants shall have no right, title, or interest whatsoever in or to any
      investments that the Company may make to aid it in meeting its obligations
      under
      the Plan. Nothing contained in the Plan, and no action taken pursuant to its
      provisions, shall create or be construed to create a trust of any kind, or
      a
      fiduciary relationship between the Company and any Participant, beneficiary,
      legal representative or any other person. To the extent that any person acquires
      a right to receive payments from the Company under the Plan, such right shall
      be
      no greater than the right of an unsecured general creditor of the Company.
      All
      payments to be made hereunder shall be paid from the general funds of the
      Company and no special or separate fund shall be established and no segregation
      of assets shall be made to assure payment of such amounts except as expressly
      set forth in the Plan.

     

    The
      Plan
      is not intended to be subject to the Employee Retirement Income Security Act
      of
      1974.

     

    20.15  No
      Fractional Shares.
      No
      fractional Shares shall be issued or delivered pursuant to the Plan or any
      Award. The Board shall determine whether cash, or Awards, or other property
      shall be issued or paid in lieu of fractional Shares or whether such fractional
      Shares or any rights thereto shall be forfeited or otherwise
      eliminated.

     

    20.16  Governing
      Law.
      The
      Plan and each Award Agreement shall be governed by the laws of the state of
      Delaware, excluding any conflicts or choice of law rule or principle that might
      otherwise refer construction or interpretation of the Plan to the substantive
      law of another jurisdiction. Unless otherwise provided in the Award Agreement,
      recipients of an Award under the Plan are deemed to submit to the exclusive
      jurisdiction and venue of the federal or state courts of Tennessee, Washington
      County, to resolve any and all issues that may arise out of or relate to the
      Plan or any related Award Agreement.

    


     

    
      
        
        

      

      
        16