exv10w1





Exhibit
10.1


SPARTON CORPORATION

2010 LONG-TERM STOCK OPTION INCENTIVE PLAN




SECTION 1

PURPOSE




     The purpose of Sparton Corporation’s 2010 Long-Term Incentive Plan is to align the interests
of employees and directors of the Corporation selected to receive awards with those of stockholders
by rewarding long term decision-making and actions for the betterment of the Corporation. 
Accordingly, Eligible Individuals may receive Awards of Options, Stock Appreciation Rights,
Restricted Stock or Restricted Stock Units, Performance Awards and Other Stock-Based Awards
including grants of Shares.  Equity-based compensation assists in the attraction and retention of
qualified employees and directors, and provides them with additional incentive to devote their best
efforts to pursue and sustain the Corporation’s superior long-term performance.  This enhances the
value of the Corporation for the benefit of its stockholders.



SECTION 2

DEFINITIONS




     A. “Affiliate” means (i) any corporation, partnership, joint venture or other entity that is
controlled by the Corporation, whether directly or indirectly, and (ii) any corporation,
partnership, joint venture or other entity in which the Corporation has a significant equity
interest, as determined by the Committee; provided, however, that with respect to an Award of an
Incentive Stock Option and an Award that is subject to Code Section 409A, the term “Affiliate”
shall refer solely to a Subsidiary.



     B. “Aggregated Plan” means all agreements, methods, programs, and other arrangements sponsored
by the Corporation that would be aggregated with this Plan under Section 1.409A-1(c) of the
Regulations.



     C. “Award” means an Option, a Stock Appreciation Right, a Share of Restricted Stock, a
Restricted Stock Unit, a Performance Award, including a Qualified Performance-Based Award, or an
Other Stock-Based Award pursuant to the Plan.  Each Award shall be evidenced by an Award Agreement.



     D. “Award Agreement” means a written agreement, in a form approved by the Committee, which
sets forth the terms and conditions of an Award, including, but not limited to, the Performance
Period and/or Restriction Period, as appropriate.  Agreements shall be subject to the express terms
and conditions set forth herein, and to such other terms and conditions not inconsistent with the
Plan as the Committee shall deem appropriate.



     E. “Award Recipient” means an Eligible Individual who has been granted an Award under the Plan
and has entered into an Award Agreement evidencing the grant of such Award or otherwise accepted
the terms of an Award Agreement, including by electronic acceptance or acknowledgement.



 









 





     F. “Beneficiary” means any person(s) designated by an Award Recipient on a beneficiary
designation form submitted to the Plan Administrator, or, if no form has been submitted, any
person(s) entitled to receive any amounts owing to such Award Recipient under this Plan upon his or
her death by reason of having been named in the Award Recipient’s will or trust agreement or having
qualified as a taker of the Award Recipient’s property under the laws of intestacy.  If an Award
Recipient authorizes any person, in writing, to exercise such individual’s Options or Stock
Appreciation Rights following the Award Recipient’s death, the term “Beneficiary” shall include any
person in whose favor such Options or Stock Appreciation Rights are exercised by the person
authorized to exercise the Options or Stock Appreciation Rights.



     G. “Board” means the Board of Directors of the Corporation.



     H. “Cause” means (1) conviction of the Award Recipient for committing a felony under Federal
law or the law of the state in which such action occurred, (2) dishonesty in the course of
fulfilling the Award Recipient’s employment duties, (3) willful and deliberate failure on the part
of the Award Recipient to perform his or her employment duties in any material respect, or
(4) before a Change of Control, such other events as shall be determined by the Committee.  Before
a Change of Control, the Committee shall, unless otherwise provided in an Individual Agreement with
the Award Recipient, have the sole discretion to determine whether “Cause” exists, and its
determination shall be final.



     I. “Change of Control” shall have the meaning set forth in Exhibit A to this Plan.



     J. “Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.



     K. “Committee” means the Compensation Committee of the Board or such other committee of the
Board as the Board may from time to time designate, which, with respect to the establishment of
Performance Measures, shall be composed solely of not less than two outside directors (as described
under Regulations Section 1.162-27(e)(3)), and shall be appointed by and serve at the pleasure of
the Board.



     L. “Corporation” means Sparton Corporation, an Ohio corporation, and its successors and
assigns.



     M. “Date of Grant” means the effective date of an Award granted by the Committee to an Award
Recipient.



     N. “Disabled” or “Disability” means “Totally Disabled” (or any derivation of such term) within
the meaning of the Long-Term Disability Plan of Sparton Corporation, or if there is no such plan,
“Disability” as determined by the Committee.  However, with respect to the rules relating to
Incentive Stock Options, the term “Disabled” shall mean disabled as that term is utilized in
Sections 422 and 22(e)(3) of the Code, or any successor Code provisions relating to



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ISOs.  Furthermore, with respect to Awards subject to Section 409A of the Code, “Disabled”
shall not have either of the prior meanings, but shall mean an Award Recipient’s inability to
engage in any substantial gainful activity due to a medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months.



     O. “Disaffiliation” means a Subsidiary’s or Affiliate’s ceasing to be a Subsidiary or
Affiliate for any reason (including, without limitation, as a result of a public offering, or a
spinoff or sale by the Corporation, of the stock of the Subsidiary or Affiliate) or a sale of a
division of the Corporation and its Affiliates.



     P. “Eligible Individual” means any officers, employees and members of the Board of Directors
of the Corporation and any officers, employees and directors of its Subsidiaries or Affiliates, and
prospective officers and employees who have accepted offers of employment from the Corporation or
its Subsidiaries or Affiliates.  Notwithstanding the foregoing, an Eligible Individual for purposes
of receipt of the grant of an ISO shall be limited to those individuals who are eligible to receive
ISOs under rules set forth in the Code and applicable regulations.



     Q. “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     R. “Fair Market Value” means the closing price of a Share on the New York Stock Exchange; if,
however, there is no trading of Shares on the date in question, then the closing price of the
Shares as so reported, on the last preceding trading day shall instead be used to determine Fair
Market Value.  If Fair Market Value for any date in question cannot be determined as provided
above, Fair Market Value shall be determined by the Committee in its good faith discretion based on
a reasonable valuation method in accordance with the Regulations and applicable guidance
promulgated under Code Section 409A.



     S. “Incentive Stock Option” or “ISO Award” means an Option granted pursuant to the Plan that
is designated in the applicable Award Agreement as an “incentive stock option” within the meaning
of Section 422 of the Code, and that in fact so qualifies.



     T. “Nonqualified Stock Option” or “NQSO Award” means an Option granted  pursuant to the Plan
that is not intended to be, or does not qualify as, an Incentive Stock Option.



     U. “Option” means a Nonqualified Stock Option or an Incentive Stock Option granted pursuant to
Section 6(A) of the Plan.



     V. “Other Stock-Based Award” means any right granted under Section 6(F) of the Plan.



     W. “Performance Award” means any Award, including a Qualified Performance-Based Award, granted
pursuant to Section 6(E) of the Plan.



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     X. “Performance Measures” means the performance goals established by the Committee and
relating to a Performance Period in connection with the grant of an Award.  In the case of any
Qualified Performance-Based Award, such goals shall be (i) based on the attainment of specified
levels of one or more of the following measures (a) earnings per share, (b) return measures
(including, but not limited to, return on assets, equity or sales), (c) net income (before or after
taxes), (d) cash flow (including, but not limited to, operating cash flow and free cash flow),
(e) cash flow return on investments, which equals net cash flows divided by owner’s equity,
(f) earnings before or after taxes, interest, depreciation and/or amortization, (g) internal rate
of return or increase in net present value, (h) gross revenues, (i) gross margins or (j) stock
price (including, but not limited to, growth measures and total stockholder return) and (ii) set by
the Committee within the time period prescribed by Section 162(m) of the Code.  Performance
Measures may be absolute in their terms or measured against or in relationship to other companies
comparably, similarly or otherwise situated and may be based on or adjusted for any other objective
goals, events, or occurrences established by the Committee for a Performance Period.  Such
Performance Measures may be particular to a line of business, Subsidiary or other unit or may be
based on the performance of the Corporation generally.  Such Performance Measures may cover the
Performance Period(s) as specified by the Committee.  Performance Measures may be adjusted by the
Committee in its sole discretion to eliminate the unbudgeted effects of charges for restructurings,
charges for discontinued operations, charges for extraordinary items and other unusual or
non-recurring items of loss or expense, merger related charges, cumulative effect of accounting
changes, the unbudgeted financial impact of any acquisition or divestiture made during the
applicable Performance Period, and any direct or indirect change in the Federal corporate tax rate
affecting the Performance Period, each as defined by generally accepted accounting principles and
identified in the audited financial statements, notes to the audited financial statements,
management’s discussion and analysis or other Corporation filings with the Securities and Exchange
Commission



     Y. “Performance Period” means the period designated by the Committee during which the
Performance Measures applicable to an Award shall be measured.  The Performance Period shall be
established at or before the time of the grant of the Award, and the length of any Performance
Period shall be within the discretion of the Committee.



     Z. “Plan” means the Sparton Corporation 2010 Long-Term Incentive Plan, as may be amended from
time to time.



     AA. “Qualified Performance-Based Award” means an Award intended to qualify for the
Section 162(m) Exemption, as provided in Section 7.



     BB. “Regulations” means the Treasury Regulations promulgated under the Code.



     CC. “Restriction Period” means the period designated by the Committee during which Shares of a
Restricted Stock Award remain forfeitable or a Restricted Stock Unit Award is subject to vesting
requirements.



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     DD. “Restricted Stock” or “Restricted Stock Award” means an award of Shares pursuant to
Section 6(C) of the Plan subject to the terms, conditions and such restrictions as may be
determined by the Committee and set forth in the applicable Award Agreement.  Shares of Restricted
Stock shall constitute issued and outstanding Shares for all corporate purposes.



     EE. “Restricted Stock Units” or “Restricted Stock Unit Award” means an Award granted pursuant
to Section 6(D) of the Plan denominated in Shares subject to the terms, conditions and restrictions
determined by the Committee and set forth in the applicable Award Agreement.



     FF. “Retirement” means, unless otherwise provided in an Award Agreement or determined by the
Committee, an Award Recipient’s Termination of Employment (or with respect to Awards subject to
Code Section 409A, an Award Recipient’s Separation from Service) at or after age 65 or after
attainment of both age 55 and ten (10) years of continuous service with the Corporation and
Affiliates.



     GG. “Section 162(m) Exemption” means the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code.



     HH. “Separation from Service” means, with respect to any Award that is subject to Code
Section 409A, the date on which the Corporation and the Award Recipient reasonably anticipate a
permanent reduction in the level of bona fide services performed by the Award Recipient for the
Corporation or any Affiliate to 20% or less of the average level of bona fide services performed by
the Award Recipient for the Corporation or any Affiliate (whether as an employee or an independent
contractor) in the immediately preceding thirty-six (36) months (or the full period of service to
the Corporation and any Affiliate if the Award Recipient has been providing services to the
Corporation and its Affiliates for less than thirty-six (36) months).  The determination of whether
a Separation from Service has occurred shall be made by the Plan Administrator in accordance with
the provisions of Code Section 409A and the Regulations promulgated thereunder.



     II. “Share” means a share of common stock, $1.25 par value, of the Corporation or such other
securities or property as may become subject to Awards pursuant to an adjustment made under
Section 3(C) of the Plan.



     JJ. “Specified Employee” means a key employee of the Corporation as defined in Code
Section 416(i) without regard to paragraph (5) thereof.  The determination of whether an Award
Recipient is a Specified Employee shall be made by the Committee as of the specified employee
identification date adopted by the Corporation in accordance with the provisions of Code
Section 409A and the Regulations promulgated thereunder.



     KK. “Stock Appreciation Right” or “SAR Award” means a right granted under Section 6(B) of the
Plan.



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     LL. “Subsidiary” means any entity (other than the Corporation) in an unbroken chain of
entities beginning with the Corporation, provided each entity (other than the last entity) in the
unbroken chain owns, at the time of the determination, ownership interests possessing fifty percent
(50%) or more of the total combined voting power of all classes of ownership interests in one of
the other entities in such chain; provided, however, with respect to any Award that is an Incentive
Stock Option, the term “Subsidiary” shall refer solely to an entity that is taxed under Federal tax
law as a corporation.



     MM. “Tax Withholding Date” shall mean the earliest date the obligation to withhold tax with
respect to an Award arises.



     NN. “Term” means the maximum period during which an Option or Stock Appreciation Right may
remain outstanding (subject to earlier termination upon Termination of Employment or otherwise) as
specified in the applicable Award Agreement or, to the extent not specified in the Award Agreement,
as provided in the Plan.



     OO. “Termination of Employment” means the termination of the applicable Award Recipient’s
employment or service as a director with the Corporation and any of its Affiliates.  An Award
Recipient employed by an Affiliate or a division of the Corporation or any of its Affiliates shall
be deemed to incur a Termination of Employment if, as a result of a Disaffiliation, such Affiliate
or division ceases to be an Affiliate or division, as the case may be, and the Award Recipient does
not immediately thereafter become an employee or director of the Corporation or an Affiliate. 
Neither a temporary absence because of illness, vacation or leave of absence nor a transfer among
the Corporation and its Affiliates shall be considered a Termination of Employment.



SECTION 3

STOCK SUBJECT TO THE PLAN




     A. Plan Maximums.  The maximum number of Shares that may be delivered pursuant to Awards under
the Plan shall be One Million (1,000,000). Shares subject to an Award under the Plan may be
authorized and unissued Shares or treasury Shares.



     B. Rules for Calculating Shares Delivered.  Any Shares covered by an Award that has been
granted shall be counted as used under the Plan as of the Date of Grant.  To the extent that any
Award is forfeited, or any Option or Stock Appreciation Right terminates, expires or lapses without
being exercised, the Shares subject to such Awards not delivered as a result thereof shall again be
available for Awards under the Plan.  The following Shares, however, may not again be made
available for issuance in respect of Awards under this Plan: (i) Shares not issued or delivered as
a result of the net settlement of an outstanding Stock Appreciation Right; (ii) Shares used to pay
the exercise price or withholding taxes related to an outstanding Award; or (iii) Shares
repurchased by the Corporation on the open market with the proceeds of an Option exercise price to
settle an Option.



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     C. Adjustment Provision.  In the event of (i) a stock dividend, stock split, reverse stock
split, share combination, or recapitalization or similar event affecting the capital structure of
the Corporation (each, a “Share Change”), or (ii) a merger, consolidation, acquisition of property
or shares, separation, spinoff, reorganization, stock rights offering, liquidation, Disaffiliation,
or similar event affecting the Corporation or any of its Subsidiaries (each, a “Corporate
Transaction”), the Committee or the Board shall make appropriate substitutions or adjustments to
(A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery
under the Plan, (B) the maximum limitation set forth in Section 3(A)  upon certain types of Awards
and upon the grants to individuals of certain types of Awards, (C) the number and kind of Shares or
other securities subject to outstanding Awards, and (D) the exercise price of outstanding Options
and Stock Appreciation Rights, provided that the aggregate exercise price or aggregate grant price
of the Options or Stock Appreciation Rights is not less than the aggregate exercise price or
aggregate grant price before the Corporate Transaction.  In the case of Corporate Transactions,
such adjustments may include, without limitation, (1) the cancellation of outstanding Awards in
exchange for payments of cash, property or a combination thereof having an aggregate value equal to
the value of such Awards, as determined by the Committee or the Board in its sole discretion (it
being understood that in the case of a Corporate Transaction with respect to which stockholders of
Common Stock receive consideration other than publicly traded equity securities of the ultimate
surviving entity, any such determination by the Committee that the value of an Option or Stock
Appreciation Right shall for this purpose be deemed to equal the excess, if any, of the value of
the consideration being paid for each Share pursuant to such Corporate Transaction over the
exercise price of such Option or Stock Appreciation Right shall conclusively be deemed valid);
(2) the substitution of other property (including, without limitation, cash or other securities of
the Corporation and securities of entities other than the Corporation) for the Shares subject to
outstanding Awards; and (3) in connection with any Disaffiliation, arranging for the assumption of
Awards, or replacement of Awards with new awards based on other property or other securities
(including, without limitation, other securities of the Corporation and securities of entities
other than the Corporation), by the affected Subsidiary, Affiliate, or division or by the entity
that controls such Subsidiary, Affiliate, or division following such Disaffiliation (as well as any
corresponding adjustments to Awards that remain based upon Corporation securities).  Any such
adjustments shall be made in a manner that (i) with respect to Awards that are not considered to be
deferred compensation within the meaning of Section 409A of the Code as of immediately prior to
such adjustment, would not cause such Awards to become deferred compensation subject to
Section 409A of the Code and (ii) with respect to Awards that are considered deferred compensation
within the meaning of Section 409A of the Code, would not cause such Awards to be non-compliant
with the requirements of Section 409A of the Code.



SECTION 4

ADMINISTRATION




     A. Committee.  The Plan shall be administered by the Committee.  In addition to any implied
powers and duties that may be needed to carry out the provisions of the Plan, the Committee shall
have all the powers vested in it by the terms of the Plan, including the following authority, with
approval of the Board the Committee may: select Eligible Individuals; make



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Awards; and determine the type, size, terms and timing of Awards (which need not be uniform).
The Committee may also accelerate the vesting of Awards, including upon the occurrence of a Change
of Control of the Corporation or an Award Recipient’s Termination of Employment; prescribe the form
of the Award Agreement; modify, amend or adjust the terms and conditions of any Award, subject to
Sections 7 and 10; adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; interpret the terms and provisions
of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto); and
make any other determinations it believes necessary or advisable in connection with the
administration of the Plan; correct any defect, supply any omission or reconcile any inconsistency
in the Plan or in any Award Agreement; establish any “blackout” period that the Committee in its
sole discretion deems necessary or advisable; and otherwise administer the Plan.



     B. Procedures.  Determinations of the Committee shall be made by a majority vote of its
members at a meeting at which a quorum is present or pursuant to a unanimous written consent of its
members.  A majority of the members of the Committee shall constitute a quorum.   Subject to
Section 7(D), any authority granted to the Committee may also be exercised by the full Board.  To
the extent that any permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.  The Committee may authorize any one or more of its
members, or any officer of the Corporation, to execute and deliver documents on behalf of the
Committee.



Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the
Committee may (i) allocate all or any portion of its responsibilities and powers to any one or more
of its members and/or (ii) delegate all or any part of its responsibilities and powers to any
person or persons selected by it, provided that, the Committee may not delegate its
responsibilities and powers if such delegation would cause an Award made to an individual subject
to Section 16 of the Exchange Act not to qualify for an exemption from Section 16(b) of the
Exchange Act or cause an Award intended to be a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m) Exemption.  Any such allocation or delegation
may be revoked by the Committee at any time.



All decisions made by the Committee (or any person or persons to whom the Committee has allocated
or delegated all or any portion of its responsibilities and powers in accordance with this Plan)
shall be final and binding on all persons, including the Corporation, its Affiliates, Subsidiaries,
stockholders, Eligible Individuals, Award Recipients, Beneficiaries and other interested parties.



     C. Discretion of the Committee.  Subject to Section 6(G), any determination made by the
Committee or by an appropriately delegated officer pursuant to delegated authority under the
provisions of the Plan with respect to any Award shall be made in the sole discretion of the
Committee or such delegate at the time of the grant of the Award or, unless in contravention of any
express term of the Plan, at any time thereafter.  All decisions made by the Committee or any
appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Corporation, Award Recipients and Eligible Individuals.



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     D. Cancellation or Suspension of Awards.  The Committee may cancel all or any portion of any
Award, whether or not vested or deferred, as set forth below in this Section 4(D).  Upon
cancellation, the Award Recipient shall forfeit the Award and any benefits attributable to such
canceled Award or portion thereof.  The Committee may cancel an Award if, in its sole discretion,
the Committee determines in good faith that the Award Recipient has done any of the following: 
(i) committed a felony; (ii) committed fraud; (iii) embezzled; (iv) disclosed confidential
information or trade secrets; (v) was terminated for Cause; (vi) engaged in any activity in
competition with the business of the Corporation or any Subsidiary or Affiliate of the Corporation;
or (vii) engaged in conduct that adversely affected the Corporation.  The Director Corporate Human
Resources, or such other person designated from time to time by the Chief Executive Officer of the
Corporation (the “Delegate”), shall have the power and authority to suspend all or any portion of
any Award if the Delegate makes in good faith the determination described in the preceding
sentence.  Any such suspension of an Award shall remain in effect until the suspension shall be
presented to and acted on by the Committee at its next meeting. 



SECTION 5

ELIGIBILITY



Awards may only be made to Eligible Individuals.




SECTION 6

AWARDS




     A. Options.  The Committee may grant Options to Eligible Individuals in accordance with the
provisions of this subsection subject to such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine to be appropriate.




     1. Exercise Price.  The exercise price per Share of an Option shall be determined by
the Committee; provided, however, that such exercise price shall not be less than 100% of
the Fair Market Value of a Share on the Date of Grant of such Option, and such exercise
price may not be decreased during the Term of the Option except pursuant to an adjustment in
accordance with Section 3(C).




     2. Option Term.  The Term of each Option shall be fixed by the Committee and the
maximum Term of each Option shall be ten (10) years.




     3. Time and Manner of Exercise.  The Committee shall determine the time or times at
which an Option may be exercised, and the manner in which (including, without limitation,
cash, Shares, other securities, other Awards or other property, or any combination thereof,
having a Fair Market Value on the exercise date equal to the relevant exercise price)
payment of the exercise price with respect thereto may be made, or deemed to have been
made.  The Committee may authorize the use of any form of “cashless” exercise of an Option
that is legally permissible.



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     4. Employment Status.  Except as provided in paragraphs (a) through (d) below or as may
otherwise be provided by the Committee (either at the time of grant of an Option or
thereafter), an Award Recipient’s Options and Stock Appreciation Rights shall be immediately
forfeited upon his or her Termination of Employment.




     a. Retirement.  An Award Recipient’s Retirement shall not affect any Option
outstanding as of the Termination of Employment due to Retirement other than those
granted in the calendar year of Retirement.  All Options outstanding as of the
Termination of Employment due to Retirement other than those granted in the calendar
year of such Termination of Employment shall continue to vest pursuant to the
vesting schedule applicable to such Options, and any vested Options outstanding as
of the Termination of Employment due to Retirement (including any ISO held by an
Award Recipient who is not Disabled) shall continue in full force and effect for the
remainder of the Term of the Option.  All Options granted in the calendar year of
Termination of Employment due to Retirement that have not otherwise vested as of
such termination shall terminate upon the date of Retirement.




     b. Disability.  Upon the cessation of the Award Recipient’s employment or
service as a director due to Disability, any Option held by such individual that was
exercisable immediately before the Termination of Employment due to Disability shall
continue to be exercisable until the earlier of (i) the third anniversary of the
Award Recipient’s Termination of Employment (or, in the case of any ISO held by an
Award Recipient who is Disabled, the first anniversary of the Award Recipient’s
Termination of Employment) and (ii) the expiration of the Term of the Option.




     c. Death.  Upon the Award Recipient’s death (whether during his or her
employment or service as a director with the Corporation or an Affiliate or during
any otherwise applicable post-termination exercise period, which in the case of an
ISO, shall not exceed three (3) months), any Option held by such individual that was
exercisable immediately before the Termination of Employment shall continue to be
exercisable by the Beneficiary(ies) of the decedent, until the earlier of (i) the
first anniversary of the date of the Award Recipient’s death and (ii) the expiration
of the Term of the Option.




     d. Other Terminations of Employment.  Upon the Award Recipient’s Termination of
Employment for any reason other than Retirement, Disability, death or for Cause, any
Option held by such individual that was exercisable immediately before the
Termination of Employment shall continue to be exercisable until the earlier of
(i) the expiration of the three-month period following the Award Recipient’s
Termination of Employment and (ii) the expiration of the Term of the Option.



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     e. Extension or Reduction of Exercise Period.  In any of the foregoing
circumstances, subject to Section 8, the Committee may extend or shorten the
exercise period, but may not extend any such period beyond the Term of the Option as
originally established (or, insofar as this paragraph relates to Stock Appreciation
Rights, the Term of the SAR Award as originally established).  Further, with respect
to ISOs, as a condition of any such extension, the holder shall be required to
deliver to the Corporation a release which provides that such individual will hold
the Corporation and/or Affiliates harmless with respect to any adverse tax
consequences the individual may suffer by reason of any such extension.



     B. Stock Appreciation Right Awards.  The Committee may grant Stock Appreciation Rights to
Eligible Individuals in accordance with the provisions of this subsection subject to such
additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee
shall determine to be appropriate.  The Term of each SAR Award shall be fixed by the Committee and
the maximum Term of each SAR Award shall be ten (10) years.  A Stock Appreciation Right granted
under the Plan shall confer on the Award Recipient a right to receive upon exercise thereof the
excess (if any) of (i) the Fair Market Value of one Share on the date of exercise over (ii) the
grant price of the Stock Appreciation Right Award as specified by the Committee, which price shall
not be less than 100% of the Fair Market Value of one Share on the Date of Grant of the Stock
Appreciation Right.  Subject to the terms of the Plan, the Committee shall determine the grant
price, Term, manner of exercise, dates of exercise, methods of settlement (cash, Shares or a
combination thereof) and any other terms and conditions of any SAR Award.  The Committee may impose
such conditions or restrictions on the exercise of any SAR Award as it may deem appropriate. 
Except as otherwise provided by the Committee or in an Award Agreement, any SAR Award must be
exercised during the period of the Award Recipient’s employment or service as a director with the
Corporation or Affiliate, provided that the provisions of Section 6(A)(4)(a)-(e) hereof shall apply
for purposes of determining the exercise period in the event of the Award Recipient’s Retirement,
Disability, death or other Termination of Employment.



     C. Restricted Stock Awards.  The Committee may make Restricted Stock Awards to Eligible
Individuals in accordance with the provisions of this subsection subject to such additional terms
and conditions not inconsistent with the provisions of the Plan as the Committee shall determine to
be appropriate.




     1. Nature of Restrictions.  Restricted Stock Awards shall be subject to such
restrictions, including Performance Measures, as the Committee may impose (including,
without limitation, any limitation on the right to vote a Share of Restricted Stock or the
right to receive any dividend or other right or property with respect thereto), which
restrictions may lapse separately or in combination at such time or times, in such
installments or otherwise as the Committee may deem appropriate.  Subject to the Committee’s
authority under Section 6(C)(3) below, the minimum Restriction Period with respect to a
Restricted Stock Award that is subject to restrictions that are Performance Measures shall
be one (1) year, and the minimum Restriction Period with



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respect to a Restricted Stock Award that is subject to restrictions that are not
Performance Measures shall be three (3) years.  The Committee may, as of the Date of Grant,
designate an Award of Restricted Stock that is subject to Performance Measures as a
Qualified Performance-Based Award.




     2. Stock Certificates.  Restricted Stock Awards granted under the Plan shall be
evidenced by the issuance of a stock certificate(s), which shall be held by the
Corporation.  Such certificate(s) shall be registered in the name of the Award Recipient and
shall bear an appropriate legend which refers to the restrictions applicable to such
Restricted Stock Award.  Alternatively, shares of Restricted Stock under the Plan may be
recorded in book entry form.




     3. Forfeiture; Delivery of Shares.  Except as may be otherwise provided in an Award
Agreement, upon an Award Recipient’s Termination of Employment (as determined under criteria
established by the Committee) during the applicable Restriction Period, all Shares of
Restricted Stock shall be immediately forfeited and revert to the Corporation; provided,
however, that the Committee may waive, in whole or in part, any or all remaining
restrictions applicable to the Restricted Stock Award.  Shares comprising any Restricted
Stock Award held by the Corporation that are no longer subject to restrictions shall be
delivered to the Award Recipient (or his or her Beneficiary) promptly after the applicable
restrictions lapse or are waived.



     D. Restricted Stock Unit Awards.  The Committee may grant Awards of Restricted Stock Units to
Eligible Individuals, subject to Section 8 hereof and such other terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate. 
A Restricted Stock Unit shall represent an unfunded, unsecured right to receive one Share or cash
equal to the Fair Market Value of a Share.




     1. Nature of Restrictions.  Restricted Stock Unit Awards shall be subject to such
restrictions, including Performance Measures, as the Committee may impose, which
restrictions may lapse separately or in combination at such time or times, in such
installments or otherwise as the Committee may deem appropriate.  Subject to the Committee’s
authority under Section 6(D)(3) below, the minimum Restriction Period with respect to a
Restricted Stock Unit Award that is subject to restrictions that are Performance Measures
shall be one (1) year, and the minimum Restriction Period with respect to a Restricted Stock
Unit Award that is subject to restrictions that are not Performance Measures shall be three
(3) years.  The Committee may, as of the Date of Grant, designate an Award of Restricted
Stock as a Qualified Performance-Based Award.




     2. Rights as a Stockholder.  An Eligible Individual to whom Restricted Stock Units are
granted shall not have any rights of a stockholder of the Corporation with respect to the
Share represented by the Restricted Stock Unit Award.  If so determined by the Committee, in
its sole and absolute discretion, Restricted Stock Units may include a dividend equivalent
right, pursuant to which the Award Recipient will either receive cash amounts (either paid
currently or on a contingent basis) equivalent to the dividends and



12









 







other distributions payable with respect to the number of Shares represented by the
Restricted Stock Units, or additional Restricted Stock Units with a Fair Market Value equal
to such dividends and other distributions, as specified in the Award Agreement.  Dividend
equivalent rights that the Committee determines are subject to Section 409A of the Code
shall be paid or settled in accordance with Section 8 hereof.




     3. Forfeiture/Settlement.  Except as may be otherwise provided in an Award Agreement,
upon an Award Recipient’s Termination of Employment (as determined under criteria
established by the Committee) during the applicable Restriction Period, all Restricted Stock
Units shall be immediately forfeited; provided, however, that the Committee may waive, in
whole or in part, any or all remaining vesting requirements or restrictions applicable to
the Restricted Stock Unit Award.  Subject to Section 11(D) hereof, an Award of Restricted
Stock Units shall be settled in Shares as and when the Restricted Stock Units vest or at a
later time permitted under Section 8 hereof and specified by the Committee in the Award
Agreement.



     E. Performance Awards.  The Committee may grant Performance Awards (designated as Qualified
Performance-Based Awards or not) to Eligible Individuals in accordance with the provisions of this
Section 6(E), subject to Section 8 hereof and such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate. 
A Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares
(including, without limitation, Restricted Shares), other securities, other Awards, or other
property, and (ii) shall confer on the Award Recipient the right to receive a dollar amount or
number of Shares upon the attainment of Performance Measures during any Performance Period, as
established by the Committee.  Subject to the terms of the Plan and any applicable Award Agreement,
the Performance Measures to be achieved during any Performance Period, the length of any
Performance Period and the amount of any payment or number of Shares in respect of a Performance
Award shall be determined by the Committee.



     F. Other Stock-Based Awards.  The Committee may grant Other Stock-Based Awards to Eligible
Individuals in accordance with the provisions of this Section 6(F), subject to Section 8 hereof and
such other additional terms and conditions, including Performance Measures, not inconsistent with
the provisions of the Plan, as the Committee shall determine.  Other Stock-Based Awards may be
denominated or payable in, valued in whole or in part by reference to, or otherwise based on or
related to, Shares (including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan.



     G. General.  Except as otherwise specified in the Plan or an applicable Award Agreement, the
following provisions shall apply to Awards granted under the Plan:




     1. Consideration for Awards.  Other than the payment of the exercise price or grant
price in connection with the exercise of an Option or Stock Appreciation Right, Awards shall
be made without monetary consideration or for such minimal monetary



13









 







consideration as may be required by applicable law.  In no event may any Option or
Stock Appreciation Right granted under this Plan be amended, other than pursuant to
Section 3(C), to decrease the exercise or grant price thereof, be cancelled in conjunction
with the grant of any new Option or Stock Appreciation Right with a lower exercise or grant
price, or otherwise be subject to any action that would be treated, for accounting purposes,
as a “repricing” of such Option or Stock Appreciation Right, unless such amendment,
cancellation, or action is approved by the Corporation’s stockholders.




     2. Forms of Payment under Awards.  Subject to the terms of the Plan and of any
applicable Award Agreement, payments or transfers of Shares to be made by the Corporation or
an Affiliate upon the grant, exercise or satisfaction of an Award may be made in such form
or forms as the Committee shall determine (including, without limitation, cash, Shares,
other securities, other Awards or other property or any combination thereof), and may be
made in a single payment or transfer, or in installments, and may be made upon vesting or
such later date permitted under Section 8 hereof and specified in the applicable Award
Agreement, and, in each case, in accordance with rules and procedures established by the
Committee.  Such rules and procedures may include, without limitation, provisions for the
payment or crediting of reasonable interest on installment or deferred payments.




     3. Limits on Transfer of Awards.  No Award and no right under any such Award shall be
transferable by an Award Recipient otherwise than by will or by the laws of intestacy;
provided, however, that, an Award Recipient may, in the manner established by the Committee,
designate a Beneficiary to exercise the rights of the Award Recipient and to receive any
property distributable with respect to any Award upon the death of the Award Recipient. 
Each Award or right under any Award shall be exercisable during the Award Recipient’s
lifetime only by the Award Recipient or, if permissible under applicable law, by the Award
Recipient’s guardian or legal representative.  No Award or right under any such Award may be
pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation,
attachment or encumbrance thereof shall be void and unenforceable against the Corporation or
any Affiliate.




     4. Term of Awards.  Subject to any specific provisions of the Plan, the term of each
Award shall be for such period as may be determined by the Committee.




     5. Securities Law Restrictions.  All certificates for Shares or other securities
delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to
such restrictions as the Committee may deem advisable under the Plan, or the rules,
regulations and other requirements of the Securities and Exchange Commission, the New York
Stock Exchange, any other exchange on which Shares may be eligible to be traded or any
applicable federal or state securities laws, and the Committee may cause a legend or legends
to be placed on any such certificates to make appropriate reference to such restrictions.



14









 






     6. Deferring Awards.  Under no circumstances may an Award Recipient elect to defer,
until a time or times later than the exercise of an Option or a Stock Appreciation Right or
the settlement or distribution of Shares or cash in respect of other Awards, receipt of all
or a portion of the Shares or cash subject to such Award, or dividends and dividend
equivalents payable thereon.



SECTION 7

QUALIFIED PERFORMANCE-BASED AWARDS




     A. Section 162(m) Exemption.  The provisions of this Plan are intended to ensure that all
Options and Stock Appreciation Rights granted hereunder to any Award Recipient who is or may be a
“covered employee” (within the meaning of Section 162(m)(3) of the Code) in the tax year in which
such Option or Stock Appreciation Right is expected to be deductible to the Corporation qualify for
the Section 162(m) Exemption, and all such Awards shall therefore be considered Qualified
Performance-Based Awards and this Plan shall be interpreted and operated consistent with that
intention (including, without limitation, to require that all such Awards be granted by a committee
composed solely of members who satisfy the requirements for being “outside directors” for purposes
of the Section 162(m) Exemption (“Outside Directors”)).  When granting any Award other than an
Option or Stock Appreciation Right, the Committee may designate such Award as a Qualified
Performance-Based Award, based upon a determination that (i) the recipient is or may be a “covered
employee” (within the meaning of Section 162(m)(3) of the Code) with respect to such Award, and
(ii) the Committee wishes such Award to qualify for the Section 162(m) Exemption, and the terms of
any such Award (and of the grant thereof) shall be consistent with such designation (including,
without limitation, that all such Awards be granted by a committee composed solely of Outside
Directors).



     B. Limitation on Amendment.  Each Qualified Performance-Based Award (other than an Option or
Stock Appreciation Right) shall be earned, vested and payable (as applicable) only upon the
achievement of one or more Performance Measures, together with the satisfaction of any other
conditions, such as continued employment, as the Committee may determine to be appropriate, and no
Qualified Performance-Based Award may be amended, nor may the Committee exercise any discretionary
authority it may otherwise have under this Plan with respect to a Qualified Performance-Based
Award, in any manner that would cause the Qualified Performance-Based Award to cease to qualify for
the Section 162(m) Exemption; provided, however, that (i) the Committee may provide, either in
connection with the grant of the applicable Award or by amendment thereafter, that achievement of
such Performance Measure will be waived upon the death or Disability of the Award Recipient (or
under any other circumstance with respect to which the existence of such possible waiver will not
cause the Award to fail to qualify for the Section 162(m) Exemption), and (ii) any rights to
vesting or accelerated payment on a Change of Control shall apply notwithstanding this
Section 7(B).



     C. Maximum Cash Award.  For purposes of the Section 162(m) Exemption, the maximum amount of
compensation payable with respect to an Award granted under the Plan to any Award Recipient who is
a “covered employee” (as defined in Section 162(m) of the Code) that is denominated as a dollar
amount will not exceed $5,000,000 for any calendar year.



15









 





     D. Limitation on Action by the Full Board.  The full Board shall not be permitted to exercise
authority granted to the Committee to the extent that the grant or exercise of such authority would
cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to
qualify for, the Section 162(m) Exemption.



SECTION 8

SECTION 409A OF THE CODE




     It is the intention of the Corporation that no Award shall be “deferred compensation” subject
to Section 409A of the Code, unless and to the extent that the Committee specifically determines
otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted
accordingly.  If the Committee determines that an Award is subject to Section 409A of the Code,
then the Award shall be paid or settled only upon the Award Recipient’s death, Disability, or
Separation from Service, or upon a Change of Control, or upon such date(s) or pursuant to a
schedule designated by the Committee, as specified in the applicable Award Agreement, subject to
the following provisions:




     1. Delay for Specified Employees.  Notwithstanding any provision of this Plan or the
terms of an Award Agreement to the contrary, an Award that is granted to a Specified
Employee and that is to be paid or settled upon such Specified Employee’s Separation from
Service shall not be paid or settled prior to the earlier of (i) the first day of the
seventh (7th) month following the date of such Specified Employee’s Separation from Service
or (ii) the Specified Employee’s death.




     2. Distribution in the Event of Income Inclusion Under Code Section 409A.  If an Award
fails to meet the requirements of Section 409A of the Code, the Award Recipient may receive
payment in connection with the Award before the Award would otherwise be paid, provided,
however, that the amount paid to the Award Recipient shall not exceed the lesser of: (i) the
amount payable under such Award, or (ii) the amount to be reported pursuant to Section 409A
of the Code on the applicable Form W-2 (or Form 1099) as taxable income to the Award
Recipient.




     3. Distribution Necessary to Satisfy Applicable Tax Withholding.  If the Corporation is
required to withhold amounts to pay the Award Recipient’s portion of the Federal Insurance
Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a) or 3121(v)(2) with
respect to an amount that is or will be paid to the Award Recipient under the Award before
the amount otherwise would be paid, the Committee may withhold an amount equal to the lesser
of: (i) the amount payable under such Award, or (ii) the aggregate of the FICA taxes imposed
and the income tax withholding related to such amount.




     4. Delay in Payments Subject to Code Section 162(m).  In the event the Corporation
reasonably anticipates that the payment of benefits under an Award would result in the loss
of the Corporation’s Federal income tax deduction with respect to such



16









 







payment due to the application of Code Section 162(m), the Committee may delay the
payment of all such benefits under the Award until (i) the first taxable year in which the
Corporation reasonably anticipates, or should reasonably anticipate, that if the payment
were made during such year, the deduction of such payment would not be barred by application
of Code Section 162(m) or (ii) during the period beginning with the date of the Award
Recipient’s Separation from Service (or, for Specified Employees, the date which is six
(6) months after the date of the Award Recipient’s Separation from Service) and ending on
the later of (A) the last day of the taxable year of the Corporation which includes such
date or (B) the 15th day of the third month following the date of the Award Recipient’s
Separation from Service (or, for Specified Employees, the date which is six (6) months after
the date of the Award Recipient’s Separation from Service).




     5. Delay for Payments in Violation of Federal Securities Laws or Other Applicable Law. 
In the event the Corporation reasonably anticipates that the payment of benefits under an
Award would violate Federal securities laws or other applicable law, the Committee may delay
the payment until the earliest date at which the Corporation reasonably anticipates that
making of such payment would not cause such violation.




     6. Delay for Insolvency or Compelling Business Reasons.  In the event the Corporation
determines that the making of any payment of benefits on the date specified under an Award
would jeopardize the ability of the Corporation to continue as a going concern, the
Committee may delay the payment of benefits until the first calendar year in which the
Corporation notifies the Committee that the payment of benefits would not have such effect.




     7. Administrative Delay in Payment.  In the case of administrative necessity, the
payment of benefits under an Award may be delayed up to the later of the last day of the
calendar year in which payment would otherwise be made or the 15th day of the third calendar
month following the date on which payment would otherwise be made.  Further, if, as a result
of events beyond the control of the Award Recipient (or following the Award Recipient’s
death, the Award Recipient’s Beneficiary), it is not administratively practicable to
calculate the amount of benefits due to the Award Recipient as of the date on which payment
would otherwise be made, the payment may be delayed until the first calendar year in which
calculation of the amount is administratively practicable.




     8. No Award Recipient Election.  Notwithstanding the foregoing provisions, if the
period during which payment of benefits under an Award will be made occurs, or will occur,
in two calendar years, the Award Recipient shall not be permitted to elect the calendar year
in which the payment shall be made.



17









 





SECTION 9

WITHHOLDING OF TAXES




     The Corporation will, if required by applicable law, withhold the minimum statutory amount of
Federal, state and/or local withholding taxes no later than the date as of which an amount first
becomes includible in the gross income of an Award Recipient for Federal, state, local or foreign
income or employment or other tax.  Unless otherwise provided in the applicable Award Agreement,
each Award Recipient may satisfy any such tax withholding obligation by any of the following means,
or by a combination of such means:  (i) a cash payment; (ii) by delivery to the Corporation of
already-owned Shares which have been held by the individual for at least six (6) months having a
Fair Market Value, as of the Tax Withholding Date, sufficient to satisfy the amount of the
withholding tax obligation arising from an exercise or vesting of an Award; (iii) by authorizing
the Corporation to withhold from the Shares otherwise issuable to the individual pursuant to the
exercise or vesting of an Award, a number of shares having a Fair Market Value, as of the Tax
Withholding Date, which will satisfy the amount of the withholding tax obligation; or (iv) by a
combination of such methods of payment.  If the amount requested is not paid, the Corporation may
refuse to satisfy the Award.  The obligations of the Corporation under the Plan shall be
conditional on such payment or arrangements, and the Corporation and its Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to
such Award Recipient.  The Committee may establish such procedures as it deems appropriate,
including making irrevocable elections, for the settlement of withholding obligations with Shares.



SECTION 10

AMENDMENT AND TERMINATION




     A. Amendments to and Termination of the Plan.  The Committee or the Board may amend, alter, or
discontinue the Plan at any time by written consent executed by its members, but no amendment,
alteration or discontinuation shall be made which would materially impair the rights of the Award
Recipients with respect to a previously granted Award without such Award Recipient’s consent,
except such an amendment made to comply with applicable law, including without limitation
Section 409A of the Code, stock exchange rules or accounting rules.  In addition, no such amendment
shall be made without the approval of the Corporation’s stockholders to the extent such approval is
required by applicable law (including Section 422 of the Code) or the listing standards of the
applicable stock exchange.



     B. Amendments to Awards.  Subject to Section 6(G)(1), the Committee may unilaterally amend the
terms of any Award theretofore granted, but no such amendment shall cause a Qualified
Performance-Based Award to cease to qualify for the Section 162(m) Exemption or, without the Award
Recipient’s consent, materially impair the rights of any Award Recipient with respect to an Award,
except such an amendment made to cause the Plan or Award to comply with applicable law, stock
exchange rules or accounting rules.  Furthermore, no amendment may be made to a NQSO Award or a SAR
Award which would cause the exercise price or the grant price (as applicable) to be less than 100%
of the Fair Market Value of one Share as of the Date of Grant except as provided in Section 3(C).



     C. Payment of Benefits Upon Termination of Plan.  Upon termination of the Plan, the
Corporation may settle any outstanding Award that is not subject to Code Section 409A as



18









 







soon as is practicable following such termination and may settle any outstanding Award that is
subject to Code Section 409A in accordance with one of the following:




     1. the termination and liquidation of the Plan within twelve (12)  months of a complete
dissolution of the Corporation taxed under Section 331 of the Code or with the approval of a
bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A); provided that the amounts deferred
under this Plan are included in the Participants’ gross incomes in the latest of the
following years (or, if earlier, the taxable year in which the amount is actually or
constructively received): (i) the calendar year in which the Plan is terminated; (ii) the
first calendar year in which the amount is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which the payment is administratively
practicable.




     2. the termination and liquidation of the Plan pursuant to irrevocable action taken by
the Committee or the Corporation within the thirty (30) days preceding or the twelve (12)
months following a Change of Control; provided that all Aggregated Plans are terminated and
liquidated with respect to each Participant that experienced the Change of Control, so that
under the terms of the termination and liquidation, all such Participants are required to
receive all amounts of deferred compensation under this Plan and any other Aggregated Plans
within twelve (12) months of the date the Committee or the Corporation irrevocably takes all
necessary action to terminate and liquidate this Plan and the Committee or the Corporation,
as the case may be, takes all necessary action to terminate and liquidate such other
Aggregated Plans;




     3. the termination and liquidation of the Plan, provided that: (i) the termination and
liquidation does not occur proximate to a downturn in the Corporation’s financial health;
(2) the Committee or the Corporation, as the case may be, terminates and liquidates all
Aggregated Plans; (3) no payments in liquidation of this Plan are made within twelve (12)
months of the date the Committee or the Corporation irrevocably takes all necessary action
to terminate and liquidate this Plan, other than payments that would be payable under the
terms of this Plan if the action to terminate and liquidate this Plan had not occurred;
(4) all payments are made within twenty four (24) months of the date on which the Committee
or the Corporation irrevocably takes all action necessary to terminate and liquidate this
Plan; and (5) the Corporation does not adopt a new Aggregated Plan at any time within three
(3) years following the date on which the Committee or the Corporation irrevocably takes all
action necessary to terminate and liquidate the Plan.



SECTION 11

MISCELLANEOUS PROVISIONS




     A. Conditions for Issuance.  The Committee may require each person purchasing or receiving
Shares pursuant to an Award to represent to and agree with the Corporation in writing that such
person is acquiring the Shares without a view to the distribution thereof.  The certificates for
such Shares may include any legend which the Committee deems appropriate to



19









 







reflect any restrictions on transfer.  Notwithstanding any other provision of the Plan or
Award Agreements made pursuant thereto, with respect to any Award other than an Award that is
subject to Code Section 409A, the Corporation shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to fulfillment of all of the following
conditions:  (i) listing or approval for listing upon notice of issuance, of such Shares on the
applicable stock exchange; (ii) any registration or other qualification of such Shares of the
Corporation under any state or Federal law or regulation, or the maintaining in effect of any such
registration or other qualification which the Committee shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval, or
permit from any state or Federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary or advisable, and, with
respect to any Award that is subject to Code Section 409A, the Corporation shall not be required to
issue or deliver any certificate or certificates for Shares under the Plan if the Corporation
reasonably anticipates that such issuance or delivery would violate applicable Federal securities
laws or other applicable law, provided the Corporation issues or delivers the Shares at the
earliest date on which the Corporation reasonably anticipates that such issuance or delivery would
not cause such violation.



     B. Additional Compensation Arrangements.  Nothing contained in the Plan shall prevent the
Corporation or any Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.  Participation in the Plan shall not affect an individual’s
eligibility to participate in any other benefit or incentive plan of the Corporation.



     C. No Contract of Employment or Rights to Awards.  The Plan shall not constitute a contract of
employment, and adoption of the Plan shall not confer upon any employee any right to continued
employment, nor shall it interfere in any way with the right of the Corporation or any Subsidiary
or Affiliate to terminate the employment of any employee at any time. No employee, director or
other person shall have any claim or right to receive an Award under the Plan.  Receipt of an Award
shall not confer upon the Award Recipient any rights of a stockholder with respect to any Shares
subject to such Award except as specifically provided in the Agreement relating to the Award.



     D. Limitation on Dividend Reinvestment and Dividend Equivalents.  Reinvestment of dividends in
additional Restricted Stock at the time of any dividend payment, and the reinvestment of dividend
equivalent rights in additional Restricted Stock Units payable in Shares shall only be permissible
if sufficient Shares are available under Section 3 for such reinvestment or payment (taking into
account then outstanding Awards).  In the event that sufficient Shares are not available, such
reinvestment of dividends and dividend equivalent rights shall be made in the form of a grant of
Restricted Stock Units equal in number to the Shares that would have been obtained by such
reinvestment and the terms of which Restricted Stock Units shall provide for settlement in cash.



     E. Subsidiary Employees.  In the case of a grant of an Award to any employee of a Subsidiary
of the Corporation, the Corporation may, if the Committee so directs, issue or transfer the Shares,
if any, covered by the Award to the Subsidiary, for such lawful consideration as the



20









 







Committee may specify, upon the condition or understanding that the Subsidiary will transfer
the Shares to the employee in accordance with the terms of the Award specified by the Committee
pursuant to the provisions of the Plan.  All Shares underlying Awards that are forfeited or
canceled shall revert to the Corporation.



     F. Governing Law and Interpretation.  The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the State of Ohio,
without reference to principles of conflict of laws, except to the extent preempted by Federal
law.  To the extent that any Award is subject to Code Section 409A, the terms of the Award
Agreement and this Plan shall be construed and interpreted in accordance with Code Section 409A and
the Regulations and interpretative guidance promulgated thereunder.  The captions of this Plan are
not part of the provisions hereof and shall have no force or effect.



     G. Foreign Employees and Foreign Law Considerations.  The Committee may grant Awards to
Eligible Individuals who are foreign nationals, who are located outside the United States or who
are not compensated from a payroll maintained in the United States, or who are otherwise subject to
(or could cause the Corporation to be subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster
and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the
Committee may make such modifications, amendments, procedures, or subplans as may be necessary or
advisable to comply with such legal or regulatory provisions.



     H. Expenses.  The expenses of the Plan shall be borne by the Corporation.



     I. Acceptance of Terms.  By accepting an Award under the Plan or payment pursuant to any
Award, each Award Recipient, legal representative and Beneficiary shall be conclusively deemed to
have indicated his or her acceptance and ratification of, and consent to, any action taken under
the Plan by the Committee or the Corporation.  A breach by any Award Recipient, his or her
Beneficiary(ies), or legal representative, of any restrictions, terms or conditions contained in
the Plan, any Award Agreement, or otherwise established by the Committee with respect to any Award
will, unless waived in whole or in part by the Committee, cause a forfeiture of such Award.



SECTION 12

EFFECTIVE AND TERMINATION




     The Plan was originally adopted and approved by the Executive Committee of the Board on
September 8, 2009, to be effective on the date of stockholder approval (the “Effective Date”).  The
Plan will terminate on the tenth (10th) anniversary of the Effective Date, unless earlier
terminated in accordance with Section 10.  Awards outstanding as of the date of termination of the
Plan shall not be affected or impaired by the termination of the Plan.





21









 






EXHIBIT A




CHANGE OF CONTROL




     A. For the purpose of this Plan, a “Change of Control” shall mean:




     1. The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Corporation (the “Outstanding Corporation Common Stock”) or (ii) the
combined voting power of the then outstanding voting securities of the Corporation entitled
to vote generally in the election of directors (the “Outstanding Corporation Voting
Securities”); provided, however, that for purposes of this subsection 1, the following
acquisitions shall not constitute a Change of Control:  (i) any acquisition directly from
the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection A.3.
of this Exhibit A; or




     2. Individuals who, as of the date hereof, constitute the Corporation’s Board of
Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Corporation’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or




     3. Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the Corporation’s assets (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the company resulting from
such Business Combination (including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of the Corporation’s
assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the
case



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may be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the
company resulting from such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the members of
the board of directors of the company resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or




     4. Approval by the Corporation’s stockholders of a complete liquidation or dissolution
of the Corporation.




B. With respect to any Award subject to Section 409A of the Code, the above definition of
“Change of Control” shall mean:




     1. any one person, or more than one person acting as a group, acquires ownership of
stock of the Corporation that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock of the
Corporation;




     2. any one person, or more than one person acting as a group, acquires (or has acquired
during any twelve (12) month period) ownership of stock of the Corporation possessing 30% or
more of the total voting power of the stock of the Corporation;




     3. a majority of the members of the Board is replaced during any twelve (12) month
period by directors whose appointment is not endorsed by a majority of the members of the
Board before the date of the appointment or election; or




     4. any one person, or more than one person acting as a group, acquires (or has acquired
during any twelve (12) month period) assets from the Corporation that have a total gross
fair market value equal to or more than 40% of the total gross fair market value of all of
the assets of the Corporation immediately before such acquisition or acquisitions. The
determination of whether a Change of Control has occurred under this Section B of Exhibit A
shall be made by the Committee in accordance with the provisions of Code Section 409A and
the Regulations promulgated thereunder.




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