Exhibit 10.01


     

    EXHIBIT
      10.01

     

     

    2004
      LONG-TERM INCENTIVE COMPENSATION PLAN

     

    (As
      approved by shareholders on November 3, 2005)

     

    


     

    ARTICLE
      1—GENERAL PROVISIONS

     

    1.1 Establishment
      of Plan.
      Cree,
      Inc., a North Carolina corporation (the “Company”), hereby establishes an
      incentive compensation plan to be known as the “Cree, Inc. 2004 Long-Term
      Incentive Compensation Plan” (the “Plan”), as set forth in this
      document.

     

    1.2 Purpose
      of Plan.
      The
      objectives of the Plan are to (i) attract and retain employees for the Company
      and its affiliates and directors of the Company by providing competitive
      compensation opportunities; (ii) provide incentives to those individuals who
      contribute significantly to the long-term performance and growth of the Company
      and its affiliates; and (iii) align the long-term financial interests of
      employees and directors with those of the Company’s shareholders.

     

    1.3 Types
      of Awards.
      Awards
      under the Plan may be made to Eligible Participants who are employees in the
      form of (i) Incentive Stock Options, (ii) Nonqualified Stock Options, (iii)
      Stock Appreciation Rights, (iv) Restricted Stock, (v) Stock Units, (vi)
      Performance Units, or any combination of these. Awards under the Plan may be
      made to Eligible Participants who are Outside Directors in the form of (i)
      Nonqualified Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
      Stock, (iv) Stock Units, or any combination of these, subject to and in
      accordance with Section 4.2 and Article 10.

     

    1.4 Effective
      Date.
      The
      Plan became effective upon approval of the Plan by the Company’s shareholders on
      November 4, 2004, and the date of such approval is referred to herein as the
      “Effective Date.”

     

    1.5 Predecessor
      Plan.
      Upon
      approval of the Plan by the shareholders of the Company, no further grants
      may
      be made under the Cree, Inc. Amended and Restated Equity Compensation Plan
      (the
“Predecessor Plan”).

     

    ARTICLE
      2—DEFINITIONS

     

    Except
      where the context otherwise indicates, the following definitions
      apply:

     

    2.1. “Award
      Agreement” means the written agreement, whether in printed or electronic form,
      between the Company and a Participant, evidencing an Award granted to the
      Participant under the Plan. The Award Agreement may be in the form of a master
      agreement between an Eligible Participant and the Company with respect to all
      or
      any types of Awards supplemented, with respect to a particular Award, by a
      notice of award issued by the Company.

     

    2.2. “Award”
      means an award granted to a Participant under the Plan that is an Option, Stock
      Appreciation Right, Restricted Stock, Stock Unit, Performance Unit or
      combination of these.

     

    2.3. “Board”
      means the Board of Directors of the Company.

     

    2.4. “Cause”
      means, unless provided otherwise in the Award Agreement: any conduct amounting
      to fraud, dishonesty, willful misconduct, negligence, significant activities
      materially harmful to the reputation of the Company or an Employer,
      insubordination or conviction of a felony or a crime involving moral turpitude,
      all as determined by the Committee in good faith, including but not limited
      to
      (as determined by the Committee in good faith), (i) Participant’s breach of any
      agreement between Participant and an Employer, (ii) Participant’s intentional or
      negligent failure to perform a reasonably requested directive or assignment
      or
      to perform his duties to the Employer substantially in accordance with the
      Employer’s operating and personnel policies and procedures generally applicable
      to all of its employees, or (iii) Participant’s misappropriation or attempted
      misappropriation of any of the Employer’s funds or property.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    2.5. “Code”
      means the Internal Revenue Code of 1986, as now in effect or as hereafter
      amended. All citations to sections of the Code are to such sections as they
      may
      from time to time be amended or renumbered.

     

    2.6. “Committee”
      means the committee appointed by the Board to administer this Plan pursuant
      to
      Article 3.

     

    2.7. “Company”
      means Cree, Inc., a North Carolina corporation, and its successors and
      assigns.

     

    2.8. “Disability”
      means, with respect to any Incentive Stock Option, disability as determined
      under Section 22(e)(3) of the Code, and with respect to any other Award, unless
      provided otherwise in the Award Agreement, (i) with respect to a Participant
      who
      is eligible to participate in the Employer’s program of long-term disability
      insurance, if any, a condition with respect to which the Participant is entitled
      to commence benefits under such program of long-term disability insurance and
      which results in Termination of Employment of the Participant, and (ii) with
      respect to any Participant (including a Participant who is eligible to
      participate in the Employer’s program of long-term disability insurance, if
      any), a disability as determined under procedures established by the Committee
      or in any Award.

     

    2.9. “Effective
      Date” shall have the meaning ascribed to such term in Section 1.4
      hereof.

     

    2.10. “Eligible
      Participant” means any employee of the Employer and any Outside Director,
      subject to such limitations as may be provided by the Code, the Exchange Act
      or
      the Committee, as shall be determined by the Committee.

     

    2.11. “Employer”
      means the Company and any corporation or entity in which the Company owns or
      controls, directly or indirectly, fifty percent (50%) or more of the voting
      power or economic interests of such corporation or entity.

     

    2.12. “Exchange
      Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter
      amended. All citations to sections of the Exchange Act or rules thereunder
      are
      to such sections or rules as they may from time to time be amended or
      renumbered.

     

    2.13. “Fair
      Market Value” means the fair market value of a Share, as determined in good
      faith by the Committee; provided, however, that unless otherwise directed by
      the
      Committee:

     

    (a)
      if
      the Shares are listed for trading on a national securities exchange, Fair Market
      Value on any date shall be the last sale price reported for the Shares on such
      exchange on such date or, if no sale was reported on such date, on the last
      date
      preceding such date on which a sale was reported;

     

    (b)
      if
      the Shares are listed for trading on The Nasdaq Stock Market and have been
      designated as a National Market System (“NMS”) security, Fair Market Value on
      any date shall be the last sale price reported for the Shares on such system
      during the regular trading session on such date or on the last day preceding
      such date on which a sale was reported during the regular trading
      session;

     

    (c)
      if
      the Shares are listed for trading on The Nasdaq Stock Market and have not been
      designated a NMS Security, Fair Market Value on any date shall be the average
      of
      the highest bid and lowest asked prices of the Shares on such system during
      the
      regular trading session on such date or on the last day preceding such date
      on
      which a sale was reported during the regular trading session; or

     

    (d)
      if
      (a), (b) and (c) do not apply, on the basis of the good faith determination
      of
      the Committee.

     

    For
      purposes of subsection (a) above, if the Shares are traded on more than one
      national securities exchange then the following exchange shall be referenced
      to
      determine Fair Market Value: (i) the New York Stock Exchange if the Shares
      are
      then traded on such exchange and (ii) otherwise such other exchange on which
      Shares are traded as may be designated by the Committee. 


    
      
        
        

      

      
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    2.14. “Incentive
      Stock Option” or “ISO” means an Option granted to an Eligible Participant under
      Article 5 of the Plan which meets the requirements of Section 422 of the
      Code.

     

    2.15. “Insider”
      shall mean an individual who is, on the relevant date, subject to the reporting
      requirements of Section 16(a) of the Exchange Act.

     

    2.16. “Nonqualified
      Stock Option” or “NQSO” means an Option granted to an Eligible Participant under
      Article 5 of the Plan that does not meet the requirements of Section 422 of
      the
      Code.

     

    2.17. “Option”
      means an Incentive Stock Option or a Nonqualified Stock Option. An Option shall
      be designated in the applicable Award Agreement as either an Incentive Stock
      Option or a Nonqualified Stock Option, and in the absence of such designation,
      shall be treated as a Nonqualified Stock Option.

     

    2.18. “Option
      Price” means the price at which a Participant may purchase a Share pursuant to
      an Option.

     

    2.19. “Outside
      Director” means a member of the Board who is not an employee of the Company or
      any other Employer.

     

    2.20. “Participant”
      means an Eligible Participant to whom an Award has been granted.

     

    2.21. “Payment
      Date” shall have the meaning set forth in Section 5.6 of the Plan.

     

    2.22. “Performance
      Unit” means an Award under Article 8 of the Plan that has a value set by the
      Committee (or that is determined by reference to a valuation formula specified
      by the Committee), which value may be paid to the Participant by delivery of
      such property as the Committee shall determine, including without limitation,
      cash or Shares, or any combination thereof, upon achievement of such performance
      objectives during the relevant performance period as the Committee shall
      establish at the time of such Award or thereafter, but not later than the time
      permitted by Section 162(m) of the Code in the case of Awards intended to comply
      with Section 162(m) of the Code.

     

    2.23. “Plan”
      means the Cree, Inc. 2004 Long-Term Incentive Compensation Plan, as amended
      from
      time to time.

     

    2.24. “Restricted
      Stock” means an Award of Shares under Article 7 of the Plan, which Shares are
      issued with such restriction(s) as the Committee, in its sole discretion, may
      impose, including without limitation, any restriction on the right to retain
      such Shares, to sell, transfer, pledge or assign such Shares, to vote such
      Shares, and/or to receive any cash dividends with respect to such Shares, which
      restrictions may lapse separately or in combination at such time or times,
      in
      installments or otherwise, as the Committee may deem appropriate.

     

    2.25. “Restriction
      Period” means the period commencing on the date an Award of Restricted Stock or
      Stock Units is granted and ending on such date as the Committee shall
      determine.

     

    2.26. “Retirement”
      means, unless provided otherwise in the Award Agreement, termination of
      employment other than for Cause after a Participant has reached the age of
      55
      years and has completed at least five years of service (full-time or full-time
      equivalent).

     

    2.27. “Share”
      means one share of common stock, par value $0.00125 per share, of the Company,
      as such Share may be adjusted pursuant to the provisions of Section 4.3 of
      the
      Plan.

     

    2.28. “Stock
      Appreciation Right” or “SAR” means an Award granted under Article 6 which
      provides for an amount payable in Shares and/or cash, as determined by the
      Committee, equal to the excess of the Fair Market Value of a Share on the day
      the Stock Appreciation Right is exercised over the specified purchase
      price.


    
      
        
        

      

      
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    2.29. “Stock
      Unit” means an Award under Article 7 of the Plan that is valued by reference to
      a Share, which value may be paid to the Participant by delivery of such property
      as the Committee shall determine, including without limitation, cash or Shares,
      or any combination thereof, and that has such restriction(s) as the Committee,
      in its sole discretion, may impose, including without limitation, any
      restriction on the right to retain such Awards, to sell, transfer, pledge or
      assign such Awards, and/or to receive any cash dividend equivalents with respect
      to such Awards, which restrictions may lapse separately or in combination at
      such time or times, in installments or otherwise, as the Committee may deem
      appropriate.

     

    2.30. “Termination
      of Employment” means, unless provided otherwise in the Award Agreement, the
      discontinuance of employment of a Participant with the Employer for any reason,
      whether voluntary or involuntary. The determination of whether a Participant
      has
      discontinued employment shall be made by the Committee in its sole
      discretion.

     

    ARTICLE
      3—ADMINISTRATION

     

    3.1 Composition
      of Committee.
      This
      Plan shall be administered by the Committee. The Committee shall consist of
      two
      or more Outside Directors who shall be appointed by the Board. The Board shall
      fill vacancies on the Committee and may from time to time remove or add members
      of the Committee. The Board, in its sole discretion, may exercise any authority
      of the Committee under this Plan in lieu of the Committee’s exercise thereof and
      in such instances references herein to the Committee shall refer to the Board
      of
      Directors. Unless the Board directs otherwise, the Compensation Committee of
      the
      Board shall serve as the Committee.

     

    3.2 Authority
      of the Committee.

     

    (a)
      The
      Committee shall have the exclusive right to interpret, construe and administer
      the Plan, to select the persons who are eligible to receive an Award, and to
      act
      in all matters pertaining to the granting of an Award and the contents of the
      Award Agreement evidencing the Award, including without limitation, the
      determination of the number of Options, Stock Appreciation Rights, Restricted
      Stock, Stock Units or Performance Units subject to an Award and the form, terms,
      conditions and duration of each Award, and any amendment thereof consistent
      with
      the provisions of the Plan, except that Awards to Outside Directors must also
      be
      approved by the Board. The Committee may adopt such rules, regulations and
      procedures of general application for the administration of this Plan as it
      deems appropriate. The Committee may correct any defect, supply any omission
      or
      reconcile any inconsistency in the Plan or any Award Agreement in the manner
      and
      to the extent it shall deem desirable to carry it into effect.

     

    (b)
      The
      Committee shall have the discretion to determine the effect upon an Award and
      upon an individual’s status as an employee under the Plan (including whether a
      Participant shall be deemed to have experienced a Termination of Employment
      or
      other change in status) and upon the vesting, expiration or forfeiture of an
      Award in the case of (i) any individual who is employed by an entity that ceases
      to qualify as an Employer, (ii) any leave of absence approved by the Employer,
      (iii) any transfer between locations of employment with the Employer or between
      Employers, (iv) any change in the Participant’s status from an employee to a
      consultant or member of the Board of Directors, or vice versa, and (v) any
      employee who, at the request of the Employer or the Company, becomes employed
      by
      any partnership, joint venture, corporation or other entity not meeting the
      requirements of an Employer.


    
      
        
        

      

      
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    (c)
      All
      actions, determinations and decisions of the Committee made or taken pursuant
      to
      grants of authority under the Plan or with respect to any questions arising
      in
      connection with the administration and interpretation of the Plan, including
      the
      severability of any and all of the provisions thereof, shall be conclusive,
      final and binding upon all parties, including the Company, its shareholders,
      Participants, Eligible Participants and their estates, beneficiaries and
      successors. The Committee shall consider such factors as it deems relevant
      to
      making or taking such actions, determinations and decisions including, without
      limitation, the recommendations or advice of any director, officer or employee
      of the Company and such attorneys, consultants and accountants as it may select.
      A Participant or other holder of an Award may contest an action, determination
      or decision by the Committee with respect to such person or Award only on the
      grounds that such action, determination or decision was arbitrary or capricious
      or was unlawful, and any review of such action, determination or decision shall
      be limited to determining whether the Committee’s decision or action was
      arbitrary or capricious or was unlawful.

     

    3.3 Rules
      for Foreign Jurisdictions.
      Notwithstanding anything in the Plan to the contrary, the Committee may, in
      its
      sole discretion, amend or vary the terms of the Plan in order to conform such
      terms with the requirements of each non-U.S. jurisdiction where an Eligible
      Participant is located or to meet the goals and objectives of the Plan;
      establish one or more sub-plans for these purposes; and establish administrative
      rules and procedures to facilitate the operation of the Plan in such non-U.S.
      jurisdictions. For purposes of clarity, the terms and conditions contained
      herein which are subject to variation in a non-U.S. jurisdiction shall be
      reflected in a written addendum to the Plan for each Employer of a Participant
      located in such non-U.S. jurisdiction.

     

    3.4 Delegation
      of Authority.
      The
      Committee may, at any time and from time to time, to the extent permitted by
      law
      and the Company’s Bylaws and subject to the applicable rules of any securities
      exchange or quotation or trading system on which Shares are traded, delegate
      to
      one or more members of the Committee or executive officers of the Company any
      or
      all of its authority under Section 3.2 and 3.3, except that the Committee may
      not delegate such authority with respect to Awards to members of the Board
      or to
      executive officers of the Company. The Committee may delegate the administration
      of the Plan to an officer or officers of the Company, and such administrator(s)
      may have the authority to execute and distribute Award Agreements or other
      documents relating to Awards granted by the Committee under the Plan, to
      maintain records relating to the grant, vesting, exercise, forfeiture or
      expiration of Awards, to process or oversee the issuance of Shares upon the
      exercise, vesting and/or settlement of an Award, to interpret the terms of
      Awards and to take such other actions as the Committee may specify, provided
      that the actions and interpretations of any such administrator shall be subject
      to review and approval, disapproval or modification by the
      Committee.

     

    3.5 Award
      Agreements.
      Each
      Award granted under the Plan shall be evidenced by an Award Agreement. Each
      Award Agreement shall be subject to and incorporate, by reference or otherwise,
      the applicable terms and conditions of the Plan, and any other terms and
      conditions, not inconsistent with the Plan, as may be directed by the Committee,
      including without limitation, provisions related to the consequences of
      Termination of Employment. A copy of such document shall be provided to the
      Participant, and the Committee may, but need not, require that the Participant
      sign a copy of the Award Agreement or otherwise confirm the Participant’s
      acceptance of the provisions of the Award Agreement. The Participant shall
      in
      any event be deemed to have accepted the provisions of an Award Agreement
      delivered to the Participant with respect to an Award by exercising the Award
      or
      receiving any benefits thereunder.

     

    3.6 Indemnification.
      In
      addition to such other rights of indemnification as they may have as directors
      or as members of the Committee, the members of the Committee and any persons
      acting on its behalf pursuant to authority delegated by the Committee shall
      be
      indemnified by the Company against reasonable expenses, including attorneys’
      fees, actually and necessarily incurred in connection with the defense of any
      action, suit or proceeding, or in connection with any appeal therein, to which
      they or any of them may be a party by reason of any action taken or failure
      to
      act under or in connection with the Plan or any Award granted thereunder, and
      against all amounts paid by them in settlement thereof, provided such settlement
      is approved by independent legal counsel selected by the Company, or paid by
      them in satisfaction of a judgment in any such action, suit or proceeding,
      except as to matters as to which the person seeking indemnification has been
      negligent or engaged in misconduct in the performance of his or her duties;
      provided, that within sixty (60) days after institution of any such action,
      suit
      or proceeding, the person seeking indemnification shall in writing offer the
      Company the opportunity, at its own expense, to handle and defend the
      same.


    
      
        
        

      

      
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    ARTICLE
      4—SHARES SUBJECT TO THE PLAN

     

    4.1 Aggregate
      Limits.

     

    (a)
      Subject to adjustment as provided in Section 4.3, the aggregate number of Shares
      which may be issued pursuant to Awards under this Plan is (i) 3,200,000 plus
      (ii) the number of Shares which, immediately prior to the Effective Date, were
      authorized for issuance under the Predecessor Plan and are not thereafter used
      for awards under the Predecessor Plan. Shares described in clause (ii) above
      include Shares which, immediately prior to the Effective Date, were authorized
      for issuance under the Predecessor Plan and either (x) were not subject to
      then
      outstanding awards or (y) were subject to then outstanding awards that
      subsequently expire, are canceled or otherwise terminate unexercised for any
      reason.

     

    (b)
      Subject to adjustment as provided in Section 4.3, no more than an aggregate
      of
      1,000,000 Shares authorized by subsection (a) may be issued pursuant to Awards
      of Restricted Stock, Stock Units or Performance Units.

     

    (c)
      If
      for any reason any Shares awarded or subject to purchase under this Plan are
      not
      delivered or purchased, or are reacquired by the Company, for reasons including,
      but not limited to, a forfeiture of Restricted Stock or a Stock Unit or the
      termination, expiration or cancellation of an Option, Stock Appreciation Right
      or Performance Unit, such Shares (“Returned Shares”) shall again be available
      for issuance pursuant to an Award under the Plan. The determination of the
      number of issued Shares that again become available for issuance with respect
      to
      grants of Incentive Stock Options pursuant to this Section 4.1 shall be made
      in
      accordance with the requirements of Treas. Reg. section
      1.422-2(b)(3).

     

    4.2 Individual
      Limits.

     

    (a)
      Tax
      Code Limits. Except
      to
      the extent the Committee determines that an Award shall not comply with the
      performance-based compensation provisions of Section 162(m) of the Code: (i)
      the
      aggregate number of Shares subject to Options or Stock Appreciation Rights
      granted under this Plan in any one fiscal year to any one Participant shall
      not
      exceed 300,000; (ii) the aggregate number of Shares subject to Restricted Stock
      or Stock Unit Awards granted under this Plan in any one fiscal year to any
      one
      Participant shall not exceed 100,000; and (iii) the aggregate value of
      Performance Unit Awards (valued as of the grant date) that may be granted in
      any
      one fiscal year to any one Participant shall not exceed the Fair Market Value
      of
      100,000 Shares.

     

    (b)
      Awards
      to Outside Directors. Awards
      to
      Outside Directors may be in the form of Nonqualified Stock Options, Stock
      Appreciation Rights, Restricted Stock, Stock Units or a combination thereof.
      The
      aggregate number of Shares subject to Restricted Stock or Stock Units granted
      under this Plan in any one fiscal year to any Outside Director shall not exceed
      10,000. The aggregate number of Shares subject to Awards of any type granted
      under this Plan in any one fiscal year to any Outside Director shall not exceed
      20,000.

     

    4.3 Adjustment
      of Shares.
      If any
      change in corporate capitalization, such as a stock split, reverse stock split,
      or stock dividend; or any corporate transaction such as a reorganization,
      reclassification, merger or consolidation or separation, including a spin-off,
      of the Company or sale or other disposition by the Company of all or a portion
      of its assets, any other change in the Company’s corporate structure, or any
      distribution to shareholders (other than a cash dividend) results in the
      outstanding Shares, or any securities exchanged therefor or received in their
      place, being exchanged for a different number or class of shares or other
      securities of the Company, or for shares of stock or other securities of any
      other corporation (including unpaired shares replacing paired Shares); or new,
      different or additional shares or other securities of the Company or of any
      other corporation being received by the holders of outstanding Shares; then
      equitable adjustments shall be made by the Committee, as it determines are
      necessary and appropriate, in:

     

    (a)
      the
      number of Shares that may be awarded as set forth in Section
      4.1;


    
      
        
        

      

      
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    (b)
      the
      limitations on the aggregate number of Shares that may be awarded to any one
      single Participant as set forth in Section 4.2;

     

    (c)
      the
      number and class of Shares that may be subject to an Award, and which have
      not
      been issued or transferred under an outstanding Award;

     

    (d)
      the
      Option Price under outstanding Options and the number of Shares to be
      transferred in settlement of outstanding Stock Appreciation Rights;
      and

     

    (e)
      the
      terms, conditions or restrictions of any Award and Award Agreement, including
      the price payable for the acquisition of Shares; provided, however, that all
      such adjustments made in respect of each ISO shall be accomplished so that
      such
      Option shall continue to be an incentive stock option within the meaning of
      Section 422 of the Code.

     

    ARTICLE
      5—STOCK OPTIONS

     

    5.1 Grant
      of Options.
      Subject
      to the provisions of the Plan, Options may be granted to Eligible Participants
      at any time and from time to time as shall be determined by the Committee.
      The
      Committee shall have sole discretion in determining the number of Shares subject
      to Options granted to each Participant. The Committee may grant a Participant
      ISOs, NQSOs or a combination thereof, and may vary such Awards among
      Participants; provided that only an employee may be granted ISOs.

     

    5.2 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 and such other provisions as the Committee shall determine.
      The
      Award Agreement shall further specify whether the Award is intended to be an
      ISO
      or an NQSO. Any portion of an Option that is not designated as an ISO or
      otherwise fails or is not qualified as an ISO (even if designated as an ISO)
      shall be an NQSO.

     

    5.3 Option
      Price.
      The
      Option Price for each grant of an Option shall not be less than the Fair Market
      Value of a Share on the date the Option is granted.

     

    5.4 Duration
      of Options.
      Each
      Option shall expire at such time as the Committee shall determine at the time
      of
      grant; provided, however, that no Option shall be exercisable later than the
      seventh (7th) anniversary of its grant date.

     

    5.5 Exercise
      of Options.
      Options
      granted under the Plan shall be exercisable at such times and be subject to
      such
      restrictions and conditions as the Committee shall in each instance approve,
      including conditions related to the employment of or provision of services
      by
      the Participant with the Company or any Employer, which need not be the same
      for
      each grant or for each Participant. The Committee may provide in the Award
      Agreement for automatic accelerated vesting and other rights upon the occurrence
      of such events as are specified in the Award Agreement. In addition, the
      Committee may provide in the Award Agreement for the deferral of gains related
      to an exercise or may establish a cap on the maximum earnings a Participant
      can
      realize from exercise.


    
      
        
        

      

      
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    5.6 Payment.
      Options
      shall be exercised by the delivery of written or electronic notice of exercise
      to the Company or its designated representative, setting forth the number of
      Shares with respect to which the Option is to be exercised and satisfying any
      requirements that the Committee may establish in or pursuant to the Award
      Agreement from time to time. Unless otherwise authorized by the Committee,
      no
      Shares shall be delivered, whether in certificated or uncertificated form,
      until
      the full Option Price has been paid. Full payment of the Option Price (less
      any
      amount previously received from the Participant to acquire the Option) must
      be
      made on or prior to the Payment Date, as defined below. The Option Price shall
      be payable to the Company either: (a) in cash, (b) cash equivalent approved
      by
      the Committee, (c) if approved by the Committee, by tendering previously
      acquired Shares (or delivering a certification or attestation of ownership
      of
      such Shares) having an aggregate Fair Market Value at the time of exercise
      equal
      to the total Option Price (provided that the tendered Shares must have been
      held
      by the Participant for any period required by the Committee), or (d) by a
      combination of (a), (b) or (c). The Committee also may allow cashless exercises
      as permitted under Regulation T of the Federal Reserve Board, subject to
      applicable securities law restrictions, or by any other means which the
      Committee determines to be consistent with the Plan’s purpose and applicable
      law. “Payment Date” shall mean the date on which a sale transaction in a
      cashless exercise (whether or not payment is actually made pursuant to a
      cashless exercise) would have settled in connection with the subject option
      exercise.

     

    5.7 Nontransferability
      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. Further, all ISOs granted to a Participant under the Plan shall
      be
      exercisable during his or her lifetime only by such Participant.

     

    (b)
      Nonqualified
      Stock Options.
      Except
      as otherwise provided in a Participant’s Award Agreement consistent with
      securities and other applicable laws, rules and regulations, no NQSO granted
      under this Article 5 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 5 shall be
      exercisable during his or her lifetime only by such Participant.

     

    5.8 Special
      Rules for ISOs.
      Notwithstanding the above, in no event shall any Participant who owns (within
      the meaning of Section 424(d) of the Code) stock of the Company possessing
      more
      than ten percent (10%) of the total combined voting power of all classes of
      stock of the Company be eligible to receive an ISO at an Option Price less
      than
      one hundred ten percent (110%) of the Fair Market Value of a share on the date
      the ISO is granted or be eligible to receive an ISO that is exercisable later
      than the fifth (5th) anniversary date of its grant. No Participant may be
      granted ISOs (under the Plan and all other incentive stock option plans of
      the
      Employer) which are first exercisable in any calendar year for Shares having
      an
      aggregate Fair Market Value (determined as of the date an Option is granted)
      that exceeds $100,000.

     

    ARTICLE
      6—STOCK APPRECIATION RIGHTS

     

    6.1 Grant
      of SARs.
      A Stock
      Appreciation Right may be granted to an Eligible Participant in connection
      with
      an Option granted under Article 5 of this Plan or may be granted independently
      of any Option. A Stock Appreciation Right shall entitle the holder, within
      the
      specified period, to exercise the SAR and receive in exchange a payment having
      an aggregate value equal to the amount by which the Fair Market Value of a
      Share
      exceeds the exercise price, times the number of Shares with respect to which
      the
      SAR is exercised. A SAR granted in connection with an Option (a “Tandem SAR”)
      shall entitle the holder of the related Option, within the period specified
      for
      the exercise of the Option, to surrender the unexercised Option, or a portion
      thereof, and to receive in exchange therefore a payment having an aggregate
      value equal to the amount by which the Fair Market Value of a Share exceeds
      the
      Option price per Share, times the number of Shares under the Option, or portion
      thereof, which is surrendered.


    
      
        
        

      

      
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    6.2 Tandem
      SARs.
      Each
      Tandem SAR shall be subject to the same terms and conditions as the related
      Option, including limitations on transferability, shall be exercisable only
      to
      the extent such Option is exercisable and shall terminate or lapse and cease
      to
      be exercisable when the related Option terminates or lapses. The grant of Stock
      Appreciation Rights related to ISOs must be concurrent with the grant of the
      ISOs. With respect to NQSOs, the grant either may be concurrent with the grant
      of the NQSOs, or in connection with NQSOs previously granted under Article
      5,
      which are unexercised and have not terminated or lapsed.

     

    6.3 Payment.
      The
      Committee shall have sole discretion to determine in each Award Agreement
      whether the payment with respect to the exercise of an SAR will be in the form
      of cash, Shares, or any combination thereof. If payment is to be made in Shares,
      the number of Shares shall be determined based on the Fair Market Value of
      a
      Share on the date of exercise. If the Committee elects to make full payment
      in
      Shares, no fractional Shares shall be issued and cash payments shall be made
      in
      lieu of fractional shares. The Committee shall have sole discretion to determine
      in each Award Agreement the timing of any payment made in cash or Shares, or
      a
      combination thereof, upon exercise of SARs. Payment may be made in a lump sum,
      in annual installments or may be otherwise deferred; and the Committee shall
      have sole discretion to determine in each Award Agreement whether any deferred
      payments may bear amounts equivalent to interest or cash dividends.

     

    6.4 Exercise
      Price and Exercise of SARs.
      The
      exercise price for each grant of an SAR shall not be less than the Fair Market
      Value of a Share on the date the SAR is granted. Upon exercise of an SAR, the
      number of Shares subject to exercise under any related Option shall
      automatically be reduced by the number of Shares represented by the Option
      or
      portion thereof which is surrendered.

     

    ARTICLE
      7—RESTRICTED STOCK AND STOCK UNITS

     

    7.1 Grants
      of Restricted Stock and Stock Units.
      Restricted Stock Awards and Stock Unit Awards may be made to Eligible
      Participants as an incentive for the performance of future services that the
      Committee in its sole discretion determines will contribute materially to the
      successful operation of the Employer. Subject to Section 4.2 with respect to
      grants to Outside Directors, Awards of Restricted Stock or Stock Units may
      be
      made either alone or in addition to or in tandem with other Awards granted
      under
      the Plan and may be current grants of Restricted Stock or Stock Units or
      deferred grants of Restricted Stock or Stock Units.

     

    7.2 Restricted
      Stock/Stock Unit Award Agreement.

     

    (a)
      In
      General.
      The
      Restricted Stock/Stock Unit Award Agreement shall set forth the terms of the
      Award, as determined by the Committee, including, without limitation, the
      purchase price, if any, to be paid for such Restricted Stock or Stock Unit,
      which may be more than, equal to, or less than Fair Market Value of a Share
      and
      may be zero, subject to such minimum consideration as may be required by
      applicable law; any restrictions applicable to the Restricted Stock or Stock
      Unit such as continued service or achievement of performance goals; the length
      of the Restriction Period and whether any circumstances will shorten or
      terminate the Restriction Period; and rights of the Participant during the
      Restriction Period to vote and receive dividends in the case of Restricted
      Stock, or to receive dividend equivalents in the case of Stock Units that accrue
      dividend equivalents.

     

    (b)
      Minimum
      Restriction Periods.
      All
      grants of Restricted Stock or Stock Units shall have a Restriction Period of
      at
      least three (3) years, except that (i) the Restriction Period for any Award
      may
      be shortened pursuant to the Award Agreement in connection with death,
      Disability or Retirement or pursuant to Section 14.5, (ii) Awards with
      restrictions based upon achievement of performance goals shall have a
      Restriction Period of at least one (1) year, and (iii) Awards to Outside
      Directors shall have a Restriction Period of at least one (1)
      year.


    
      
        
        

      

      
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    (c)
      Execution
      of Award Agreements.
      Notwithstanding Section 3.5, a Restricted Stock or Stock Unit Award must be
      accepted within a period of sixty (60) days, or such other period as the
      Committee may specify, by executing a Restricted Stock/Stock Unit Award
      Agreement and paying whatever price, if any, is required. The prospective
      recipient of a Restricted Stock or Stock Unit Award shall not have any rights
      with respect to such Award, unless and until such recipient has executed a
      Restricted Stock/Stock Unit Award Agreement and has delivered a fully executed
      copy thereof to the Company, and has otherwise complied with the applicable
      terms and conditions of such Award.

     

    7.3 Nontransferability.
      Except
      as otherwise provided in this Article 7 or in a Participant’s Award Agreement,
      no shares of Restricted Stock or Stock Units received by a Participant shall
      be
      sold, exchanged, transferred, pledged, assigned, hypothecated or otherwise
      disposed of during the Restriction Period or, in the case of Stock Units, either
      during or after the Restriction Period, other than by will or by the laws of
      descent and distribution. Further, except as otherwise provided in a
      Participant’s Award Agreement, a Participant’s rights under an Award of
      Restricted Stock or Stock Units shall be exercisable during the Participant’s
      lifetime only by the Participant or the Participant’s legal
      representative.

     

    7.4 Certificates.
      Upon an
      Award of Restricted Stock to a Participant, Shares of Restricted Stock shall
      be
      registered in the Participant’s name. Certificates, if issued, may either be
      held in custody by the Company until the Restriction Period expires or until
      restrictions thereon otherwise lapse and/or be issued to the Participant and
      registered in the name of the Participant, bearing an appropriate restrictive
      legend and remaining subject to appropriate stop-transfer orders. If required
      by
      the Committee, the Participant shall deliver to the Company one or more stock
      powers endorsed in blank relating to the Restricted Stock. If and when the
      Restriction Period expires without a prior forfeiture of the Restricted Stock
      subject to such Restriction Period, unrestricted certificates for such shares
      shall be delivered to the Participant; provided, however, that the Committee
      may
      cause such legend or legends to be placed on any such certificates as it may
      deem advisable under the rules, regulations and other requirements of the
      Securities and Exchange Commission and any applicable federal or state
      law.

     

    7.5 Dividends
      and Other Distributions.
      Except
      as provided in this Article 7 or in the Award Agreement, a Participant receiving
      a Restricted Stock Award shall have, with respect to such Restricted Stock
      Award, all of the rights of a shareholder of the Company, including the right
      to
      vote the Shares to the extent, if any, such Shares possess voting rights and
      the
      right to receive any dividends; provided, however, the Committee may require
      that any dividends on such Shares of Restricted Stock shall be automatically
      deferred and reinvested in additional Restricted Stock subject to the same
      restrictions as the underlying Award, or may require that dividends and other
      distributions on Restricted Stock shall be paid to the Company for the account
      of the Participant and held pending and subject to the vesting of the applicable
      Shares. The Committee shall determine whether interest shall be paid on such
      amounts, the rate of any such interest, and the other terms applicable to such
      amounts. A Participant receiving a Stock Unit Award shall not possess voting
      rights and shall accrue dividend equivalents on such Units to the extent
      provided in the Award Agreement relating to the Award. The Committee may require
      that such dividend equivalents shall be subject to the same restrictions on
      vesting and payment as the underlying Award. In addition, with respect to Awards
      intended to qualify for the performance-based compensation provisions of Section
      162(m) of the Code, the Committee may apply any restrictions it deems
      appropriate to the payment of dividends declared with respect to Restricted
      Stock such that the dividends and/or Restricted Stock maintain eligibility
      for
      such provisions.

     

    ARTICLE
      8—PERFORMANCE UNITS

     

    8.1 Grant
      of Performance Units.
      Performance Units 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
      Committee.

     

    8.2 Value
      of Performance Units.
      Each
      Performance Unit shall have an initial value that is established by the
      Committee at the time of grant. The Committee shall set performance goals in
      its
      discretion which, depending on the extent to which they are met, will determine
      the number and/or value of Performance Units that will be paid out to the
      Participant. For purposes of this Article 8, the time period during which the
      performance goals must be met shall be called a “Performance
      Period.”


    
      
        
        

      

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

     

    8.4 Form
      and Timing of Payment of Performance Units.
      Subject
      to the terms of this Plan, the Committee, in its sole discretion, may pay earned
      Performance Units in the form of cash or in Shares (or in a combination thereof)
      that has an aggregate Fair Market Value equal to the value of the earned
      Performance Units at the close of the applicable Performance Period. Such Shares
      may be granted subject to any restrictions in the Award Agreement deemed
      appropriate by the Committee. The determination of the Committee with respect
      to
      the form and timing of payout of such Awards shall be set forth in the Award
      Agreement pertaining to the grant of the Award. Except as otherwise provided
      in
      the Participant’s Award Agreement, a Participant shall be entitled to receive
      any dividends declared with respect to earned grants of Performance Units that
      are being settled in Shares and that have not yet been distributed to the
      Participant (such dividends may be subject to the same accrual, forfeiture,
      and
      payout restrictions as apply to dividends earned with respect to Stock Units,
      as
      set forth in Section 7.5 herein). In addition, unless otherwise provided in
      the
      Participant’s Award Agreement, a Participant shall be entitled to exercise full
      voting rights with respect to such Shares.

     

    8.5 Nontransferability.
      Except
      as otherwise provided in a Participant’s Award Agreement, Performance Units 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
      9—PERFORMANCE MEASURES

     

    9.1 Approved
      Measures. Until
      the
      Committee proposes for shareholder vote and shareholders approve a change in
      the
      general performance measures set forth in this Article 9, the attainment of
      which may determine the degree of payout and/or vesting with respect to Awards
      that are intended to qualify under the performance-based compensation provisions
      of Section 162(m) of the Code, the performance measure(s) to be used for
      purposes of such Awards shall be chosen from among the following: earnings,
      earnings per share, consolidated pre-tax earnings, net earnings, operating
      income, EBIT (earnings before interest and taxes), EBITDA (earnings before
      interest, taxes, depreciation and amortization), gross margin, revenues, revenue
      growth, market value added, economic value added, return on equity, return
      on
      investment, return on assets, return on net assets, return on capital employed,
      total shareholder return, profit, economic profit, after-tax profit, pre-tax
      profit, cash flow measures, cash flow return, sales, sales volume, stock price,
      cost, and/or unit cost. The Committee can establish other performance measures
      for Awards granted to Eligible Participants that are not intended to qualify
      under the performance-based compensation provisions of Section 162(m) of the
      Code.

     

    9.2 Adjustments
      to Measures. The
      Committee shall be authorized to make adjustments in performance-based criteria
      or in the terms and conditions of other Awards in recognition of unusual or
      nonrecurring events affecting the Company or its financial statements or changes
      in applicable laws, regulations or accounting principles. In the case of Awards
      that are intended to qualify under the performance-based compensation provisions
      of Section 162(m) of the Code, such adjustments shall be made in accordance
      with
      guidelines established by the Committee at the time the performance-based Award
      is granted (or within such period thereafter as may be permissible under Section
      162(m) of the Code). The Committee shall also have the discretion to adjust
      the
      determinations of the degree of attainment of the pre-established performance
      goals; provided, however, that Awards which are designed to qualify for the
      performance-based compensation exception from the deductibility limitations
      of
      Section 162(m) of the Code, and which are held by executive officers, may not
      be
      adjusted upward (the Committee shall retain the discretion to adjust such Awards
      downward).


    
      
        
        

      

      
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    9.3 Use
      of Other Measures.
      If
      changes in applicable laws or regulations permit the Committee, in the case
      of
      Awards intended to qualify under the performance-based compensation provisions
      of Section 162(m) of the Code, discretion to use performance measures other
      than
      those listed in Section 9.1 without obtaining shareholder approval of such
      changes, the Committee may make such changes without obtaining shareholder
      approval. In addition, in the event that the Committee determines that it is
      advisable to grant Awards which shall not qualify for the performance-based
      compensation exception from the deductibility limitations of Section 162(m)
      of
      the Code, the Committee may make such grants without satisfying the requirements
      of Section 162(m) of the Code.

     

    ARTICLE
      10—AWARDS TO NON-EMPLOYEE DIRECTORS

     

    An
      Outside Director may be granted one or more Awards of Nonqualified Stock
      Options, Stock Appreciation Rights, Restricted Stock, Stock Units or a
      combination thereof in any fiscal year, subject to the limitations of Section
      4.2. The number of Shares subject to such Awards, any formula pursuant to which
      such number shall be determined, the date of grant and the vesting, expiration
      and other terms applicable to such Awards shall be recommended from time to
      time
      by the Committee and approved by the Board and shall be subject to the terms
      of
      this Plan applicable to Awards in general. Outside Directors may receive Awards
      under the Plan only as provided in this Article 10.

     

    ARTICLE
      11—BENEFICIARY DESIGNATION

     

    If
      and to
      the extent permitted by the Committee, 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. If any such designation is permitted, the Committee shall, in its
      sole
      discretion, establish rules and procedures for such designations. Unless
      different rules and procedures are established by the Committee, 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 a designated representative of the Committee
      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.

     

    ARTICLE
      12—DEFERRALS

     

    The
      Committee may permit or require a Participant to defer such Participant’s
      receipt of the 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 Stock, or the satisfaction
      of any requirements or goals with respect to Stock Units. If any such deferral
      election is required or permitted, the Committee shall, in its sole discretion,
      establish rules and procedures for such deferrals, and the Committee may provide
      for such arrangements, including conversion to another form of Award that is
      available under the Plan and has equivalent value, as it deems necessary in
      order to permit the deferral of taxes in connection with such deferral by the
      Participant.

     

    ARTICLE
      13—WITHHOLDING

     

    13.1 Tax
      Withholding.
      The
      Company shall have the power and the right to deduct or withhold, or require
      a
      Participant to remit to the Company, an amount sufficient 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.
      The
      Company shall not be required to issue Shares or to recognize the disposition
      of
      such Shares until such obligations are satisfied.

     

    13.2 Share
      Withholding.
      With
      respect to withholding required upon the exercise of Options or SARs, upon
      the
      lapse of restrictions on Restricted Stock, or upon any other taxable event
      arising as a result of Awards granted hereunder, to the extent permitted or
      required by the Committee, these obligations may or shall be satisfied by having
      the Company withhold Shares having a Fair Market Value on the date the tax
      is to
      be determined equal to not more than the minimum amount of tax required to
      be
      withheld with respect to the transaction. All such elections shall be subject
      to
      any restrictions or limitations that the Committee, in its sole discretion,
      deems appropriate.


    
      
        
        

      

      
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    ARTICLE
      14—AMENDMENT AND TERMINATION

     

    14.1 Amendment
      of Plan.
      Except
      as otherwise provided in this Section 14.1, the Committee or the Board may
      at
      any time terminate or from time to time amend the Plan in whole or in part,
      but
      no such action shall adversely affect any rights or obligations with respect
      to
      any Awards previously granted under the Plan, unless the affected Participants
      consent in writing. Neither the Committee nor the Board may, without approval
      of
      the shareholders of the Company, amend the Plan to (i) materially increase
      benefits accruing to Participants under the Plan, (ii) materially increase
      the
      number of Shares which may be issued under the Plan or (iii) materially modify
      the requirements for participation in the Plan. The Company will also obtain
      the
      approval of the shareholders before amending the Plan to the extent required
      by
      Section 162(m) or Section 422 of the Code or the rules of any securities
      exchange or quotation or trading system on which Shares are traded or other
      applicable law.

     

    14.2 Amendment
      of Award; Repricing.
      The
      Committee may, at any time, amend outstanding Awards in a manner not
      inconsistent with the terms of the Plan; provided, however, that: (i) if such
      amendment is adverse to the Participant, as determined by the Committee, the
      amendment shall not be effective unless and until the Participant consents,
      in
      writing, to such amendment, except as provided in Section 14.4 or in the Award
      Agreement; and (ii) the Committee shall not have the authority to decrease
      the
      exercise price of any outstanding Option or SAR, nor award any Option or SAR
      in
      replacement of a canceled Option or SAR with a higher exercise price, except
      in
      accordance with Section 4.3 or unless such an amendment is approved by the
      shareholders of the Company. To the extent not inconsistent with the terms
      of
      the Plan and the foregoing, the Committee may, at any time, amend an outstanding
      Award Agreement in a manner that is not unfavorable to the Participant without
      the consent of such Participant.

     

    14.3 Termination
      of Plan.
      No
      Awards shall be granted under the Plan after June 28, 2009, but Awards
      theretofore granted may extend beyond that date.

     

    14.4 Cancellation
      of Awards.

     

    (a)
      The
      Committee may, in its sole discretion, provide in the Award Agreement that
      if a
      Participant engages in any “Detrimental Activity” (as defined below), the
      Committee may, notwithstanding any other provision in this Plan to the contrary,
      cancel, rescind, suspend, withhold or otherwise restrict or limit any unexpired,
      unexercised, unpaid or deferred Award as of the first date the Participant
      engages in the Detrimental Activity, unless sooner terminated by operation
      of
      another term of this Plan or any other agreement. Without limiting the
      generality of the foregoing, the Award Agreement may also provide that if the
      Participant exercises an Option or SAR, receives a Performance Unit payout,
      receives or vests in Shares under an Award or vests in or receives a payout
      under a Stock Unit at any time during the period beginning six months prior
      to
      the date the Participant first engages in Detrimental Activity and ending six
      months after the date the Participant ceases to engage in any Detrimental
      Activity, the Participant shall be required to pay to the Company the excess
      of
      the then fair market value of the Shares subject to the Award over the total
      price paid by the Participant for such Shares.

     

    (b)
      For
      purposes of this Section, except to the extent provided otherwise in the Award
      Agreement, “Detrimental Activity” means any of the following, as determined by
      the Committee in good faith: (i) the violation of any agreement between the
      Company or any Employer and the Participant relating to the disclosure of
      confidential information or trade secrets, the solicitation of employees,
      customers, suppliers, licensees, licensors or contractors, or the performance
      of
      competitive services; (ii) conduct that constitutes Cause (as defined in Section
      2.4 above), whether or not the Participant’s employment is terminated for Cause;
      (iii) making, or causing or attempting to cause any other person to make, any
      statement, either written or oral, or conveying any information about the
      Company or any other Employer which is disparaging or which in any way reflects
      negatively upon the Company or the Employer; (iv) improperly disclosing or
      otherwise misusing any confidential information regarding the Company or any
      Employer; or (v) the refusal or failure of a Participant to provide, upon the
      request of the Company, a certification, in a form satisfactory to the Company,
      that he or she has not engaged in any activity described in clauses
      (i)-(iv).


    
      
        
        

      

      
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    14.5 Assumption
      or Acceleration of Awards.
      In the
      event of a proposed sale of all or substantially all of the assets or stock
      of
      the Company, the merger of the Company with or into another corporation such
      that shareholders of the Company immediately prior to the merger exchange their
      shares of stock in the Company for cash and/or shares of another entity or
      any
      other corporate transaction to which the Committee deems this provision
      applicable, each Award shall be assumed or an equivalent Award shall be
      substituted by the successor corporation or a parent or subsidiary of such
      successor corporation (and adjusted as appropriate), unless such successor
      corporation does not agree to assume the Award or to substitute an equivalent
      award, in which case the Committee may, in lieu of such assumption or
      substitution, provide for the Participant to have the right to exercise the
      Option or other Award as to all Shares, including Shares as to which the Option
      or other Award would not otherwise be exercisable (or with respect to Restricted
      Stock or Stock Units, provide that all restrictions shall lapse). If the
      Committee makes an Option or other Award fully exercisable in lieu of assumption
      or substitution in the event of a merger or sale of assets or stock or other
      corporate transaction, the Committee shall notify the Participant that, subject
      to rescission if the merger, sale of assets or stock or other corporate
      transaction is not successfully completed within a certain period, the Option
      or
      other Award shall be fully exercisable for a period of fifteen (15) days from
      the date of such notice (or such other period as provided by the Committee),
      and, to the extent not exercised, the Option or other Award will terminate
      upon
      the expiration of such period.

     

    ARTICLE
      15—MISCELLANEOUS PROVISIONS

     

    15.1 Restrictions
      on Shares.
      All
      certificates for Shares delivered under the Plan shall be subject to such
      stop-transfer orders and other restrictions as the Committee may deem advisable
      under the rules and regulations of the Securities and Exchange Commission,
      any
      securities exchange or quotation or trading system on which Shares are traded
      and any applicable federal, state, local or foreign laws, and the Committee
      may
      cause a legend or legends to be placed on any such certificates to make
      appropriate reference to such restrictions. In making such determination, the
      Committee may rely upon an opinion of counsel for the Company. Notwithstanding
      any other provision of the Plan, the Company shall have no liability to deliver
      any Shares under the Plan or make any other distribution of the benefits under
      the Plan unless such delivery or distribution would comply with all applicable
      laws (including, without limitation, the requirements of the Securities Act
      of
      1933), and the applicable requirements of any securities exchange or quotation
      or trading system on which Shares are traded.

     

    15.2 Rights
      of a Shareholder.
      Except
      as otherwise provided in Article 7 of the Plan and in the Restricted Stock
      Award
      Agreement, each Participant who receives an Award of Restricted Stock shall
      have
      all of the rights of a shareholder with respect to such Shares, including the
      right to vote the Shares to the extent, if any, such Shares possess voting
      rights and receive dividends and other distributions. Except as provided
      otherwise in the Plan or in an Award Agreement, no Participant shall have any
      rights as a shareholder with respect to any Shares covered by an Award prior
      to
      the date of issuance to him or her of a certificate or certificates for such
      Shares.

     

    15.3 No
      Implied Rights.
      Nothing
      in the Plan or any Award granted under the Plan shall confer upon any
      Participant any right to continue in the service of the Employer, or to serve
      as
      a member of the Board, or interfere in any way with the right of the Employer
      to
      terminate his or her employment or other service relationship at any time.
      Except to the extent approved by the Board, no Award granted under the Plan
      shall be deemed salary or compensation for the purpose of computing benefits
      under any employee benefit plan, severance program, or other arrangement of
      the
      Employer for the benefit of its employees. No Participant shall have any claim
      to an Award until it is actually granted under the Plan. To the extent that
      any
      person acquires a right to receive payments from the Company under the Plan,
      such right shall, except as otherwise provided by the Committee, be no greater
      than the right of an unsecured general creditor of the Company.

     

    15.4 Compliance
      with Laws.
      At all
      times when the Committee determines that compliance with Section 162(m) of
      the
      Code is required or desirable, all Awards granted under this Plan shall comply
      with the requirements of Section 162(m) of the Code. In addition, in the event
      that changes are made to Section 162(m) of the Code to permit greater
      flexibility with respect to any Awards under the Plan, the Committee may,
      subject to the requirements of Article 14, make any adjustments it deems
      appropriate. The Plan and the grant of Awards shall be subject to all applicable
      federal, state local and foreign laws, rules, and regulations and to such
      approvals by any government or regulatory agency as may be
      required.


    
      
        
        

      

      
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    15.5 Successors.
      The
      terms of the Plan shall be binding upon the Company, and its successors and
      assigns.

     

    15.6 Tax
      Elections.
      Each
      Participant shall give the Committee prompt written notice of any election
      made
      by such Participant under Section 83(b) of the Code or any similar provision
      thereof. Notwithstanding the preceding sentence, the Committee may condition
      any
      award on the Participant’s not making an election under Section 83(b) of the
      Code.

     

    15.7 Legal
      Construction.

     

    (a)
      Severability.
      If any
      provision of this Plan or an Award Agreement is or becomes or is deemed invalid,
      illegal or unenforceable in any jurisdiction, or would result in the Plan or
      any
      Award Agreement not complying with any law deemed applicable by the Committee,
      such provision shall be construed or deemed amended to conform to applicable
      laws or if it cannot be construed or deemed amended without, in the
      determination of the Committee, materially altering the intent of the Plan
      or
      the Award Agreement, it shall be stricken and the remainder of the Plan or
      the
      Award Agreement shall remain in full force and effect.

     

    (b)
      Gender
      and Number.
      Where
      the context permits, words in any gender shall include the other gender, words
      in the singular shall include the plural and words in the plural shall include
      the singular.

     

    (c)
      Governing
      Law.
      To the
      extent not preempted by federal law, the Plan and all Award Agreements
      hereunder, shall be construed in accordance with and governed by the substantive
      laws of the State of North Carolina.


    
      
        
        

      

      
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