Stock-Based Compensation Plan


    EXHIBIT
      10.1                    


    
 

    HNI
      CORPORATION

    STOCK-BASED
      COMPENSATION PLAN

    


    (ADOPTED
      MAY 9, 1995. AMENDED AND RESTATED 

    MAY
      13, 1997. AMENDED FEBRUARY 10, 1999, 

    NOVEMBER
      10, 2000, DECEMBER 31, 2005, and AUGUST 8, 2006.)

    


    


    I.
      INTRODUCTION

    


    1.1  Purposes.
      The
      purposes of the 1995 Stock-Based Compensation Plan (the "Plan") of HNI
      Corporation (the "Corporation"), and its subsidiaries from time to time
      (individually a "Subsidiary" and collectively the Subsidiaries") are (i) to
      align the interests of the Corporation's shareholders and the recipients of
      awards under this Plan by increasing the proprietary interest of such recipients
      in the Corporation's growth and success, (ii) to advance the interests of the
      Corporation by attracting and retaining officers and other key employees and
      well-qualified persons who are not officers or employees of the Corporation
      for
      service as directors of the Corporation and (iii) to motivate such employees
      and
      Non-Employee Directors to act in the long-term best interests of the
      Corporation's shareholders. For purposes of this Plan, references to employment
      by the Corporation shall also mean employment by a Subsidiary.

    


    1.2 Certain
      Definitions.

    


    "Agreement"
      shall
      mean the written agreement evidencing an award hereunder between the Corporation
      and the recipient of such award.

    


    "Board"
      shall
      mean the Board of Directors of the Corporation.

    


    "Bonus
      Stock"
      shall
      mean shares of Common Stock which are not subject to a Restriction Period or
      Performance Measures.

    


    "Bonus
      Stock Award"
      shall
      mean an award of Bonus Stock under this Plan.

    


    "Change
      in Control"
      shall
      have the meaning set forth in Section 6.8(b).

    


    "Code"
      shall
      mean the Internal Revenue Code of 1986, as amended.

    


    "Committee"
      shall
      mean the Committee designated by the Board, consisting of three or more members
      of the Board, each of whom shall be (i) a "Non-Employee Director" within the
      meaning of Rule 16b-3 under the Exchange Act and (ii) an "outside director"
      within the meaning of Section 162(m) of the Code.

    


    "Common
      Stock"
      shall
      mean the common stock, $1.00 par value, of the Corporation.

    


    "Corporation"
      has the
      meaning specified in Section 1.1.

    


    "Deferral
      Period"
      shall
      mean the period of time during which Deferred Shares are subject to deferral
      limitations under Section 3.4 of this Plan.

    


    "Deferred
      Shares"
      shall
      mean an award made pursuant of Section 3.4 of this Plan of the right to receive
      Common Shares at the end of a specified Deferral Period.

    


    "Deferred
      Share Award"
      shall
      mean an award of Deferred Shares under the Plan.

    


    "Disability"
      shall
      mean the inability of the holder of an award to perform substantially such
      holder's duties and responsibilities for a continuous period of at least six
      months, as determined solely by the Committee.

     

    "ERISA"
      shall
      mean the Employee Retirement Income Security Act of 1974, as
      amended.

    


          "Exchange
      Act"
      shall
      mean the Securities Exchange Act of 1934, as amended.

    


    "Fair
      Market Value"
      shall
      mean the average of the high and low transaction prices]
      of a
      share of Common Stock as reported on the New York Stock Exchange on the date
      as
      of which such value is being determined, or, if there shall be no reported
      transactions for such date, on the next preceding date for which transactions
      were reported; provided, however, that if Fair Market Value for any date cannot
      be so determined, Fair Market Value shall be determined by the Committee by
      whatever means or method as the Committee, in the good faith exercise of its
      discretion, shall at such time deem appropriate. 

    


    "Free-Standing
      SAR"
      shall
      mean an SAR which is not issued in tandem with, or by reference to, an option,
      which entitles the holder thereof to receive, upon exercise, shares of Common
      Stock (which may be Restricted Stock), cash or a combination thereof with an
      aggregate value equal to the excess of the Fair Market Value of one share of
      Common Stock on the date of exercise over the base price of such SAR, multiplied
      by the number of such SARs which are exercised.

    


    "Immediate
      Family"
      shall
      mean any spouse, child, stepchild, or adopted child.

    


    "Incentive
      Stock Option"
      shall
      mean an option to purchase shares of Common Stock that meets the requirements
      of
      Section 422 of the Code, or any successor provision, which is intended by the
      Committee to constitute an incentive stock option. 

    


    "Incumbent
      Board"
      shall
      have the meaning set forth in Section 6.8(b)(2) hereof.

    


    "Non-Employee
      Director"
      shall
      mean except as applied to the definition of Committee, any director of the
      Corporation who is not an officer or employee of the Corporation or any
      Subsidiary.

    


    "Non-Statutory
      Stock Option"
      shall
      mean a stock option which is not an Incentive Stock Option.

    


    "Performance
      Measures"
      shall
      mean the criteria and objectives established by the Committee, which shall
      be
      satisfied or met (i) as a condition to the exercisability of all or a portion
      of
      an option or SAR, (ii) as a condition to the grant of a Stock Award or (iii)
      during the applicable Restriction Period or Performance Period as a condition
      to
      the holder's receipt, in the case of a Restricted Stock Award, of the shares
      of
      Common Stock subject to such award, or, in the case of a Performance Share
      Award, of payment with respect to such award. Such criteria and objectives
      may
      include, but are not limited to, the attainment by a share of Common Stock
      of a
      specified Fair Market Value for a specified period of time, earnings per share,
      return to stockholders (including dividends), return on equity, earnings of
      the
      Corporation, revenues, market share, cash flow or cost reduction goals, or
      any
      combination of the foregoing and any other criteria and objectives established
      by the Committee. In the sole discretion of the Committee, the Committee may
      amend or adjust the Performance Measures or other terms and conditions of an
      outstanding award in recognition of unusual or nonrecurring events affecting
      the
      Corporation or its financial statements or changes in law or accounting
      principles.

    


    "Performance
      Period"
      shall
      mean any period designated by the Committee during which the Performance
      Measures applicable to a Performance Share Award shall be measured.

    


    "Performance
      Share"
      shall
      mean a right, contingent upon the attainment of specified Performance Measures
      within a specified Performance Period, to receive one share of Common Stock,
      which may be Restricted Stock, or in lieu of all or a portion thereof, the
      Fair
      Market Value of such Performance Share in cash.

    


    "Performance
      Share Award"
      shall
      mean an award of Performance Shares under this Plan.

    


    "Restricted
      Stock"
      shall
      mean shares of Common Stock which are subject to a Restriction
      Period.

    


    "Restricted
      Stock Award"
      shall
      mean an award of Restricted Stock under this Plan.

    


    "Restriction
      Period"
      shall
      mean any period designated by the Committee during which the Common Stock
      subject to a Restricted Stock Award may not be sold, transferred, assigned,
      pledged, hypothecated or otherwise encumbered or disposed of, except as provided
      in this Plan or the Agreement relating to such award.

    


    "Retirement"
      or "Retires"
      shall
      mean a Participant's termination of employment with the Corporation on
after
      the
      attainment of age 65,
      or
      age
      55 with
      ten
      years of service with the Corporation. The Chief Executive Officer of the
      Corporation, in his or her discretion, may waive or reduce the ten-year service
      requirement with respect a Participant.

    


    "SAR"
      shall
      mean a stock appreciation right which may be a Free-Standing SAR or a Tandem
      SAR.

    


    "Stock
      Award"
      shall
      mean a Restricted Stock Award or a Bonus Stock Award.

    


    "Tandem
      SAR"
      shall
      mean an SAR which is granted in tandem with, or by reference to, an option
      (including a Non-Statutory Stock Option granted prior to the date of grant
      of
      the SAR), which entitles the holder thereof to receive, upon exercise of such
      SAR and surrender for cancellation of all or a portion of such option, shares
      of
      Common Stock (which may be Restricted Stock), cash or a combination thereof
      with
      an aggregate value equal to the excess of the Fair Market Value of one share
      of
      Common Stock on the date of exercise over the base price of such SAR, multiplied
      by the number of shares of Common Stock subject to such option, or portion
      thereof, which is surrendered. 

    


    "Tax
      Date"
      shall
      have the meaning set forth in Section 6.5.

    


    "Ten
      Percent Holder"
      shall
      have the meaning set forth in Section 2.1(a).

    


    1.3 Administration.
      This
      Plan shall be administered by the Committee. Any one or a combination of the
      following awards may be made under this Plan to eligible officers and other
      key
      employees of the Corporation and its Subsidiaries: (i) options to purchase
      shares of Common Stock in the form of Incentive Stock Options or Non-Statutory
      Stock Options, (ii) SARs in the form of Tandem SARs or Free-Standing SARs,
      (iii)
      Stock Awards in the form of Restricted Stock or Bonus Stock and (iv) Performance
      Shares. The Committee shall, subject to the terms of this Plan, select eligible
      officers and other key employees for participation in this Plan and determine
      the form, amount and timing of each award to such persons and, if applicable,
      the number of shares of Common Stock, the number of SARs and the number of
      Performance Shares subject to such an award, the exercise price or base price
      associated with the award, the time and conditions of exercise or settlement
      of
      the award and all other terms and conditions of the award, including, without
      limitation, the form of the Agreement evidencing the award. The Committee shall,
      subject to the terms of this Plan, interpret this Plan and the application
      thereof, establish rules and regulations it deems necessary or desirable for
      the
      administration of this Plan and may impose, incidental to the grant of an award,
      conditions with respect to the award, such as limiting competitive employment
      or
      other activities. All such interpretations, rules, regulations and conditions
      shall be conclusive and binding on all parties.

     

    The
      Committee may delegate some or all of its power and authority hereunder to
      the
      President and Chief Executive Officer or other executive officer of the
      Corporation as the Committee deems appropriate; provided, however, that the
      Committee may not delegate its power and authority with regard to (i) the grant
      of an award under this Plan to any person who is a "covered employee" within
      the
      meaning of Section 162(m) of the Code or who, in the Committee's judgment,
      is
      likely to be a covered employee at any time during the period an award hereunder
      to such employee would be outstanding or (ii) the selection for participation
      in
      this Plan of an officer or other person subject to Section 16 of the Exchange
      Act or decisions concerning the timing, pricing or amount of an award to such
      an
      officer or other person.

     

    No
      member
      of the Board of Directors or Committee, and neither the President and Chief
      Executive Officer nor any other executive officer to whom the Committee
      delegates any of its power and authority hereunder, shall be liable for any
      act,
      omission, interpretation, construction or determination made in connection
      with
      this Plan in good faith, and the members of the Board of Directors and the
      Committee and the President and Chief Executive Officer or other executive
      officer shall be entitled to indemnification and reimbursement by the
      Corporation in respect of any claim, loss, damage or expense (including
      attorneys' fees) arising therefrom to the full extent permitted by law, except
      as otherwise may be provided in the Corporation's Articles of Incorporation,
      By-laws, and under any directors' and officers' liability insurance that may
      be
      in effect from time to time.

     

    A
      majority of the Committee shall constitute a quorum.
      The acts of the Committee shall be either (i) acts of a majority of the members
      of the Committee present at any meeting at which a quorum is present or (ii)
      acts approved in writing by a majority of the members of the Committee without
      a
      meeting. 

     

    1.4 Eligibility.
      Participants in this Plan shall consist of such officers and other key employees
      of the Corporation and its Subsidiaries as the Committee in its sole discretion
      may select from time to time. The Committee's selection of a person to
      participate in this Plan at any time shall not require the Committee to select
      such person to participate in this Plan at any other time. Non-Employee
      Directors shall be eligible to participate in this Plan in accordance with
      Article V. 

    


    1.5 Shares
      Available.
      Subject
      to adjustment as provided in Section 6.7, the total number of shares of Common
      Stock available for all grants of awards under this Plan on any calendar
      year,
      shall be
      eighty-three hundredths of one percent (0.83%) of the outstanding and issued
      Common Stock as of January 1 of such year beginning January 1, 1997, plus the
      number of shares of Common Stock which shall have become available for grants
      of
      awards under this Plan in any and all prior calendar years, but which shall
      not
      have become subject to any award granted in any prior year.

     

    Notwithstanding
      the foregoing, the maximum number of shares of Common Stock available for the
      grant of Incentive Stock Options shall be 2,000,000. The maximum number of
      shares of Common Stock with respect to which options or SARs or a combination
      thereof may be granted during any calendar year to any person shall be 250,000,
      subject to adjustment as provided in Section 6.7.


    II.
      STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

    


    2.1 Stock
      Options.
      The
      Committee may, in its discretion, grant options to purchase shares of Common
      Stock to such eligible persons as may be selected by the Committee. Each option,
      or portion thereof, that is not an Incentive Stock Option, shall be a
      Non-Statutory Stock Option. Each Incentive Stock Option shall be granted within
      ten years of the effective date of this Plan. To the extent that the aggregate
      Fair Market Value (determined as of the date of grant) of shares of Common
      Stock
      with respect to which options designated as Incentive Stock Options are
      exercisable for the first time by a participant during any calendar year (under
      this Plan or any other plan of the Corporation, or any parent or Subsidiary)
      exceeds the amount (currently $100,000) established by the Code, such options
      shall constitute Non-Statutory Stock Options. 

    


    Options
      shall be subject to the following terms and conditions and shall contain such
      additional terms and conditions, not inconsistent with the terms of this Plan,
      as the Committee shall deem advisable:

    


    (a) Number
      of Shares and Purchase Price.
      The
      number of shares of Common Stock subject to an option and the purchase price
      per
      share of Common Stock purchasable upon exercise of the option shall be
      determined by the Committee; provided, however, that the purchase price per
      share of Common Stock purchasable upon exercise of a Non-Statutory Stock Option
      shall not be less than 100% of the Fair Market Value of a share of Common Stock
      on the date of grant of such option and the purchase price per share of Common
      Stock purchasable upon exercise of an Incentive Stock Option shall not be less
      than 100% of the Fair Market Value of a share of Common Stock on the date of
      grant of such option; provided further, that if an Incentive Stock Option shall
      be granted to any person who, at the time such option is granted, owns capital
      stock possessing more than ten percent of the total combined voting power of
      all
      classes of capital stock of the Corporation (or of any parent or Subsidiary)
      (a
      "Ten Percent Holder"), the purchase price per share of Common Stock shall be
      the
      price (currently 110% of Fair Market Value) required by the Code in order to
      constitute an Incentive Stock Option. 

    


    (b) Option
      Period and Exercisability.
      The
      period during which an option may be exercised shall be determined by the
      Committee; provided, however, that no Incentive Stock Option shall be exercised
      later than ten years after its date of grant; provided further, that if an
      Incentive Stock Option shall be granted to a Ten Percent Holder, such option
      shall not be exercised later than five years after its date of grant. The
      Committee may, in its discretion, establish Performance Measures which shall
      be
      satisfied or met as a condition to the grant of an option or to the
      exercisability of all or a portion of an option. The Committee shall determine
      whether an option shall become exercisable in cumulative or non-cumulative
      installments and in part or in full at any time. An exercisable option, or
      portion thereof, may be exercised only with respect to whole shares of Common
      Stock.

    


    (c) Method
      of Exercise.
      An
      option may be exercised (i) by giving written notice to the Corporation
      specifying the number of whole shares of Common Stock to be purchased and
      accompanied by payment therefor in full (or arrangement made for such payment
      to
      the Corporation's satisfaction) either (A) in cash, (B) by delivery of
      previously owned whole shares of Common Stock (which the optionee has held
      for
      at least six months prior to delivery of such shares and for which the optionee
      has good title, free and clear of all liens and encumbrances) having a Fair
      Market Value, determined as of the date of exercise, equal to the aggregate
      purchase price payable by reason of such exercise, (C) by authorizing the
      Corporation to withhold a number of whole shares of Common Stock which would
      otherwise be delivered upon exercise of the option having a Fair Market Value,
      determined as of the date of exercise, equal to the aggregate purchase price
      payable by reason of such exercise, provided that the optionee attests in a
      manner satisfactory to the Committee that the optionee at the time of such
      exercise holds and has held for at least six months prior to such exercise
      an
      equal number of whole shares of Common Stock and as to which the optionee has
      good title, free and clear of all liens and encumbrances, (D) in cash by a
      broker-dealer acceptable to the Corporation to whom the optionee has submitted
      an irrevocable notice of exercise or (E) a combination of (A), (B) and (C),
      in
      each case to the extent set forth in the Agreement relating to the option,
      (ii)
      if applicable, by surrendering to the Corporation any Tandem SARs which are
      cancelled by reason of the exercise of the option and (iii) by executing such
      documents as the Corporation may reasonably request. The Committee may require
      that the method of making such payment be in compliance with Section 16 and
      the
      rules and regulations thereunder. Any fraction of a share of Common Stock which
      would be required to pay such purchase price shall be disregarded and the
      remaining amount due shall be paid in cash by the optionee. No certificate
      representing Common Stock shall be delivered until the full purchase price
      therefor has been paid. 

     

    2.2 Stock
      Appreciation Rights.
      The
      Committee may, in its discretion, grant SARs to such eligible persons as may
      be
      selected by the Committee. The Agreement relating to an SAR shall specify
      whether the SAR is a Tandem SAR or a Free-Standing SAR. 

    


    SARs
      shall be subject to the following terms and conditions and shall contain such
      additional terms and conditions, not inconsistent with the terms of this Plan,
      as the Committee shall deem advisable:

    


    (a)
      Number
      of SARs and Base Price.
      The
      number of SARs subject to an award shall be determined by the Committee. Any
      Tandem SAR related to an Incentive Stock Option shall be granted at the same
      time that such Incentive Stock Option is granted. The base price of a Tandem
      SAR
      shall be the purchase price per share of Common Stock of the related option.
      The
      base price of a Free-Standing SAR shall be determined by the Committee;
      provided, however, that such base price shall not be less than 100% of the
      Fair
      Market Value of a share of Common Stock on the date of grant of such
      SAR.

    


    (b)
      Exercise
      Period and Exercisability.
      The
      Agreement relating to an award of SARs shall specify whether such award may
      be
      settled in shares of Common Stock (including shares of Restricted Stock) or
      cash
      or a combination thereof. The period for the exercise of an SAR shall be
      determined by the Committee; provided, however, that no Tandem SAR shall be
      exercised later than the expiration, cancellation, forfeiture or other
      termination of the related option. The Committee may, in its discretion,
      establish Performance Measures which shall be satisfied or met as a condition
      to
      the grant of an SAR or to the exercisability of all or a portion of an SAR.
      The
      Committee shall determine whether an SAR may be exercised in cumulative or
      non-cumulative installments and in part or in full at any time. An exercisable
      SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only
      with respect to whole shares of Common Stock and, in the case of a Free-Standing
      SAR, only with respect to a whole number of SARs. If an SAR is exercised for
      shares of Restricted Stock, a certificate or certificates representing such
      Restricted Stock shall be issued in accordance with Section 3.2(c) and the
      holder of such Restricted Stock shall have such rights of a stockholder of
      the
      Corporation as determined pursuant to Section 3.2(d). Prior to the exercise
      of
      an SAR for shares of Common Stock, including Restricted Stock, the holder of
      such SAR shall have no rights as a stockholder of the Corporation with respect
      to the shares of Common Stock subject to such SAR and shall have rights as
      a
      stockholder of the Corporation in accordance with Section 6.10. 

    


    (c)
      Method
      of Exercise.
      A
      Tandem SAR may be exercised (i) by giving written notice to the Corporation
      specifying the number of whole SARs which are being exercised, (ii) by
      surrendering to the Corporation any options which are cancelled by reason of
      the
      exercise of the Tandem SAR and (iii) by executing such documents as the
      Corporation may reasonably request. A Free-Standing SAR may be exercised (i)
      by
      giving written notice to the Corporation specifying the whole number of SARs
      which are being exercised and (ii) by executing such documents as the
      Corporation may reasonably request. 

    


    2.3 Termination
      of Employment.
      Except
      as otherwise provided in this Section 2.3 and subject to Section 6.8, all of
      the
      terms relating to the exercise, cancellation or other disposition of an option
      or SAR upon a termination of employment with the Corporation of the holder
      of
      such option or SAR, as the case may be, whether by reason of retirement or
      other
      termination, shall be determined by the Committee. Such determination shall
      be
      made at the time of the grant of such option or SAR, as the case may be, and
      shall be specified in the Agreement relating to such option or SAR.
      Notwithstanding the foregoing, each option or SAR granted under the Plan shall
      become fully vested and nonforfeitable upon the death or Disability of the
      Participant awarded such option or SAR, provided such Participant is employed
      by
      the Corporation on the date of death or Disability.

    


    


    III.
      STOCK AWARDS

    


    3.1 Stock
      Awards.
      The
      Committee may, in its discretion, grant Stock Awards to such eligible persons
      as
      may be selected by the Committee. The Agreement relating to a Stock Award shall
      specify whether the Stock Award is a Restricted Stock Award or Bonus Stock
      Award. 

    


    3.2 Terms
      of Stock Awards.
      Stock
      Awards shall be subject to the following terms and conditions and shall contain
      such additional terms and conditions, not inconsistent with the terms of this
      Plan, as the Committee shall deem advisable. 

    


    (a) Number
      of Shares and Other Terms.
      The
      number of shares of Common Stock subject to a Restricted Stock Award or Bonus
      Stock Award and the Performance Measures (if any) and Restriction Period
      applicable to a Restricted Stock Award shall be determined by the
      Committee.

    


    (b)
      Vesting
      and Forfeiture.
      The
      Agreement relating to a Restricted Stock Award shall provide, in the manner
      determined by the Committee, in its discretion, and subject to the provisions
      of
      this Plan, for the vesting of the shares of Common Stock subject to such award
      (i) if specified Performance Measures are satisfied or met during the specified
      Restriction Period or (ii) if the holder of such award remains continuously
      in
      the employment of the Corporation during the specified Restriction Period and
      for the forfeiture of the shares of Common Stock subject to such award (x)
      if
      specified Performance Measures are not satisfied or met during the specified
      Restriction Period or (y) if the holder of such award does not remain
      continuously in the employment of the Corporation during the specified
      Restriction Period. 

    


    Bonus
      Stock Awards shall not be subject to any Performance Measures or Restriction
      Periods.

    


    (c)
      Share
      Certificates.
      During
      the Restriction Period, a certificate or certificates representing a Restricted
      Stock Award may be registered in the holder's name and may bear a legend, in
      addition to any legend which may be required pursuant to Section 6.6, indicating
      that the ownership of the shares of Common Stock represented by such certificate
      is subject to the restrictions, terms and conditions of this Plan and the
      Agreement relating to the Restricted Stock Award. All such certificates shall
      be
      deposited with the Corporation, together with stock powers or other instruments
      of assignment (including a power of attorney), each endorsed in blank with
      a
      guarantee of signature if deemed necessary or appropriate by the Corporation,
      which would permit transfer to the Corporation of all or a portion of the shares
      of Common Stock subject to the Restricted Stock Award in the event such award
      is
      forfeited in whole or in part. Upon termination of any applicable Restriction
      Period (and the satisfaction or attainment of applicable Performance Measures),
      or upon the grant of a Bonus Stock Award, in each case subject to the
      Corporation's right to require payment of any taxes in accordance with Section
      6.5, a certificate or certificates evidencing ownership of the requisite number
      of shares of Common Stock shall be delivered to the holder of such
      award.

    


    (d)
      Rights
      with Respect to Restricted Stock Awards.
      Unless
      otherwise set forth in the Agreement relating to a Restricted Stock Award,
      and
      subject to the terms and conditions of a Restricted Stock Award, the holder
      of
      such award shall have all rights as a stockholder of the Corporation, including,
      but not limited to, voting rights, the right to receive dividends and the right
      to participate in any capital adjustment applicable to all holders of Common
      Stock; provided, however, that a distribution with respect to shares of Common
      Stock, other than a distribution in cash, shall be deposited with the
      Corporation and shall be subject to the same restrictions as the shares of
      Common Stock with respect to which such distribution was made. 

     

    3.3 Termination
      of Employment.
      Except
      as
      otherwise provided in this Section 3.3 and subject to Section 6.8, all of the
      terms relating to the satisfaction of Performance Measures and the termination
      of the Restriction Period relating to a Restricted Stock Award, or cancellation
      of or forfeiture of such Restricted Stock Award upon a termination of employment
      with the Corporation of the holder of such Restricted Stock Award, whether
      by
      reason of retirement or other termination, shall be set forth in the Agreement
      relating to such Restricted Stock Award, except that, notwithstanding the
      foregoing, each Restricted Stock Award shall become fully vested and
      nonforfeitable upon the death or Disability of the Participant awarded such
      Restricted Stock Award, provided such Participant is employed by the Corporation
      on the date of death or Disability.

    


    3.4 Deferred
      Shares.
      The
      Committee may also authorize the granting or sale of Deferred Shares to
      Participants. Each such grant or sale may utilize any or all of the
      authorizations and shall be subject to all of the requirements contained in
      the
      following provisions:

    


    (a) Each
      such
      grant or sale shall constitute the agreement by the Corporation to deliver
      Common Stock to the Participant in the future in consideration of the
      performance of services, but subject to the fulfillment of such conditions
      during the Deferral Period as the Board may specify. 

    


    (b) Each
      such
      grant or sale may be made without additional consideration or in consideration
      of a payment by such Participant that is less than the Fair Market Value per
      share of Common Stock at the date of grant.

     

    (c) Each
      such
      grant or sale shall be subject to a Deferral Period of not less than 1 year,
      as
      determined by the Board at the date of grant, and may provide for the earlier
      lapse or other modification of such Deferral Period in the event of a Change
      in
      Control. 

    


    (d) During
      the Deferral Period, the Participant shall have no right to transfer any rights
      under his or her award and shall have no rights of ownership in the Deferred
      Shares and shall have no right to vote them, but the Committee may, at or after
      the date of grant, authorize the payment of dividend equivalents on such Shares
      on either a current or deferred or contingent basis, either in cash or in
      additional Common Stock.

    


    (e) Each
      grant or sale of Deferred Shares shall be evidenced by an agreement executed
      on
      behalf of the Corporation by any officer and delivered to and accepted by the
      Participant and shall contain such terms and provisions, consistent with this
      Plan, as the Board may approve.

     

    IV.
      PERFORMANCE SHARE AWARDS

    


    4.1 Performance
      Share Awards.
      The
      Committee may, in its discretion, grant Performance Share Awards to such
      eligible persons as may be selected by the Committee.

    


    4.2 Terms
      of Performance Share Awards.
      Performance Share Awards shall be subject to the following terms and conditions
      and shall contain such additional terms and conditions, not inconsistent with
      the terms of this Plan, as the Committee shall deem advisable. 

    


    (a) Number
      of Performance Shares and Performance Measures.
      The
      number of Performance Shares subject to any award and the Performance Measures
      and Performance Period applicable to such award shall be determined by the
      Committee. 

    


    (b) Vesting
      and Forfeiture.
      The
      Agreement relating to a Performance Share Award shall provide, in the manner
      determined by the Committee, in its discretion, and subject to the provisions
      of
      this Plan, for the vesting of such award, if specified Performance Measures
      are
      satisfied or met during the specified Performance Period, and for the forfeiture
      of such award, if specified Performance Measures are not satisfied or met during
      the specified Performance Period. 

    


    (c) Settlement
      of Vested Performance Share Awards.
      The
      Agreement relating to a Performance Share Award (i) shall specify whether such
      award may be settled in shares of Common Stock (including shares of Restricted
      Stock) or cash or a combination thereof and (ii) may specify whether the holder
      thereof shall be entitled to receive, on a current or deferred basis, dividend
      equivalents, and, if determined by the Committee, interest on any deferred
      dividend equivalents, with respect to the number of shares of Common Stock
      subject to such award. If a Performance Share Award is settled in shares of
      Restricted Stock, a certificate or certificates representing such Restricted
      Stock shall be issued in accordance with Section 3.2(c) and the holder of such
      Restricted Stock shall have such rights of a stockholder of the Corporation
      as
      determined pursuant to Section 3.2(d). Prior to the settlement of a Performance
      Share Award in shares of Common Stock, including Restricted Stock, the holder
      of
      such award shall have no rights as a stockholder of the Corporation with respect
      to the shares of Common Stock subject to such award.

    


    4.3 Termination
      of Employment.
      Except
      as otherwise provided in this Section 4.3 and subject to Section 6.8, all of
      the
      terms relating to the satisfaction of Performance Measures and the termination
      of the Performance Period relating to a Performance Share Award, or cancellation
      of or forfeiture of such Performance Share Award upon a termination of
      employment with the Corporation of the holder of such Performance Share Award,
      whether by reason of retirement or other termination, shall be set forth in
      the
      Agreement relating to such Performance Share Award, except that, notwithstanding
      the foregoing, each Performance Share Award shall become fully vested and
      nonforfeitable upon the death or Disability of the Participant holding such
      Performance Share Award, provided such Participant is employed by the
      Corporation on the date of death or Disability.

    


    V.
      PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

    


    5.1 Eligibility.
      Each
      Non-Employee Director shall be eligible to elect to receive shares of Common
      Stock in accordance with this Article V.

    


    5.2 Time
      and Manner of Election.
      At least
      6 (six) months prior to the date of any annual meeting of shareholders of the
      Corporation during the term of this Plan, Non-Employee Directors may file with
      the Committee or its designee a written election to receive shares of Common
      Stock in lieu of all or a portion of such Non-Employee Director's future annual
      retainer, paid quarterly, exclusive of meeting or committee fees.
      Notwithstanding the foregoing, an election made by (i) a Non-Employee Director
      in respect of the annual retainer payable for the period beginning on the date
      of the 1995 annual meeting of the shareholders of the Corporation or (ii) an
      individual who becomes a Non-Employee Director on a date less than six months
      prior to any annual meeting of shareholders, shall become effective on the
      first
      business day that is six months after the date ("Effective Date") such
      Non-Employee Director files such election, and such election shall be applicable
      only to the portion of such Non-Employee Director's annual retainer determined
      by multiplying such annual retainer by a fraction, the numerator of which is
      the
      number of calendar days from the Effective Date to and including the last day
      for which such Annual Retainer is payable and the denominator is 365. An
      election pursuant to this Section, once made, shall be irrevocable in respect
      to
      the annual retainer for which made.

     

    The
      Shares to be issued pursuant to this Section shall be issued on each date on
      which an installment of the Non-Employee Director's annual retainer would
      otherwise be payable in cash. The number of such shares to be issued shall
      be
      determined by dividing the amount of the then payable installment of the annual
      retainer subject to an election under this Section by the Fair Market Value
      of a
      share of Common Stock on such date. Any fraction of a share shall be disregarded
      and the remaining amount of the annual retainer shall be paid in cash.


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    VI.
      GENERAL

    


    6.1 Effective
      Date and Term of Plan.
      This
      Plan shall be submitted to the stockholders of the Corporation for approval
      and,
      if approved by the affirmative vote of a majority of the shares of Common Stock
      present in person or represented by proxy at the 1997 annual meeting of
      stockholders, shall become effective on the date of such approval. This Plan
      shall terminate 10 years after its effective date unless terminated earlier
      by
      the Board. Termination of this Plan shall not affect the terms or conditions
      of
      any award granted prior to termination.

     

    Awards
      hereunder may be made at any time prior to the termination of this Plan,
      provided that no award may be made later than 10 years after the effective
      date
      of this Plan. In the event that this Plan is not approved by the stockholders
      of
      the Corporation, this Plan and any awards hereunder shall be void and of no
      force or effect. 

    


    6.2 Amendments.
      The
      Board may amend this Plan as it shall deem advisable, subject to any requirement
      of stockholder approval required by applicable law, rule or regulation including
      Section 162(m) of the Code; provided, however, that no amendment shall be made
      without stockholder approval if such amendment would (a) increase the maximum
      number of shares of Common Stock available under this Plan (subject to Section
      6.7), or (b) extend the term of this Plan; provided further that, subject to
      Section 6.7, no amendment may impair the rights of a holder of an outstanding
      award without the consent of such holder. Notwithstanding the foregoing, the
      Board may condition the grant of any award or combination of awards authorized
      under the Plan on the surrender or deferral by the Participant of such
      Participant's right to an award hereunder, a cash bonus, or other compensation
      otherwise payable by the Corporation to the Participant.

    


    6.3 Agreement.
      Each
      award under this Plan shall be evidenced by an Agreement setting forth the
      terms
      and conditions applicable to such award. No award shall be valid until an
      Agreement is executed by the Corporation and the recipient of such award and,
      upon execution by each party and delivery of the Agreement to the Corporation,
      such award shall be effective as of the effective date set forth in the
      Agreement.

     

    6.4 Transferability
      of Stock Options, SARs and Performance Shares.

    
      	 	
               

            


    

          
      (a) Except
      as
      set forth in Section 6.4(b) or as otherwise determined by the Board, no option,
      SAR or Performance Share shall be transferable other than (i) by will, the
      laws
      of descent and distribution or pursuant to beneficiary designation procedures
      approved by the Committee or (ii) as otherwise permitted under Rule 16b-3 under
      the Exchange Act as set forth in the Agreement relating to such award. Except
      to
      the extent permitted by the foregoing sentence and Section 6.4(b), each option,
      SAR or Performance Share may be exercised or settled during the holder's
      lifetime only by the holder or the holder's legal representative or similar
      person. Except to the extent permitted by the second preceding sentence and
      Section 6.4(b), no option, SAR or Performance Share may be sold, transferred,
      assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether
      by
      operation of law or otherwise) or be subject to execution, attachment or similar
      process. Except as provided in Section 6.4(b), upon any attempt to so sell,
      transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
      option, SAR or Performance Share, such award, and all rights thereunder shall
      immediately become null and void.

    


    (b) Notwithstanding
      the provisions of Section 6.4(a), option rights (other than Incentive Stock
      Options) shall be transferable by a Participant, without payment of
      consideration therefor by the transferee, to any one or more members of the
      Participant's Immediate Family (or to one or more trusts established solely
      for
      the benefit of one or more members of the Participant's Immediate Family or
      to
      one or more partnerships in which the only partners are members of the
      Participant's Immediate Family); provided, however, that (i) no such transfer
      shall be effective unless reasonable prior notice thereof is delivered to the
      Corporation and such transfer is thereafter effected subject to the specific
      authorization of, and in accordance with any terms and conditions that shall
      have been made applicable thereto, by the Committee or by the Board and (ii)
      any
      such transferee shall be subject to the same terms and conditions hereunder
      as
      the Participant.

    


    6.5 Tax
      Withholding.
      The
      Corporation shall have the right to require, prior to the issuance or delivery
      of any shares of Common Stock or the payment of any cash pursuant to an award
      made hereunder, payment by the holder of such award of any Federal, state,
      local
      or other taxes which may be required to be withheld or paid in connection with
      such award. An Agreement may provide that (i) the Corporation shall withhold
      whole shares of Common Stock which would otherwise be delivered to a holder,
      having an aggregate Fair Market Value determined as of the date the obligation
      to withhold or pay taxes arises in connection with an award (the "Tax Date"),
      or
      withhold an amount of cash which would otherwise be payable to a holder, in
      the
      amount necessary to satisfy any such obligation or (ii) the holder may satisfy
      any such obligation by any of the following means: (A) a cash payment to the
      Corporation, (B) delivery to the Corporation of previously owned whole shares
      of
      Common Stock (which the holder has held for at least six months prior to the
      delivery of such shares and for which the holder has good title, free and clear
      of all liens and encumbrances) having an aggregate Fair Market Value, determined
      as of the Tax Date, equal to the amount necessary to satisfy any such
      obligation, (C) authorizing the Corporation to withhold whole shares of Common
      Stock which would otherwise be delivered having an aggregate Fair Market Value,
      determined as of the Tax Date, or withhold an amount of cash which would
      otherwise be payable to a holder, equal to the amount necessary to satisfy
      any
      such obligation, (D) in the case of the exercise of an option, a cash payment
      by
      a broker-dealer acceptable to the Corporation to whom the optionee has submitted
      an irrevocable notice of exercise or (E) any combination of (A), (B) and (C),
      in
      each case to the extent set forth in the Agreement relating to the award;
      provided, however, that the Committee shall have sole discretion to disapprove
      of an election pursuant to any of clauses (B), (E) and that in the case of
      a
      holder who is subject to Section 16 of the Exchange Act, the Corporation may
      require that the method of satisfying such an obligation be in compliance with
      Section 16 and the rules and regulations thereunder. An Agreement may provide
      for shares of Common Stock to be delivered or withheld having an aggregate
      Fair
      Market Value in excess of the minimum amount required to be withheld, but not
      in
      excess of the amount determined by applying the supplemental wage withholding
      rate. Any fraction of a share of Common Stock which would be required to satisfy
      such an obligation shall be disregarded and the remaining amount due shall
      be
      paid in cash by the holder. 

    


    6.6 Restrictions
      on Shares.
      Each
      award made hereunder shall be subject to the requirement that if at any time
      the
      Corporation determines that the listing, registration or qualification of the
      shares of Common Stock subject to such award upon any securities exchange or
      under any law, or the consent or approval of any governmental body, or the
      taking of any other action is necessary or desirable as a condition of, or
      in
      connection with, the delivery of shares thereunder, such shares shall not be
      delivered unless such listing, registration, qualification, consent, approval
      or
      other action shall have been effected or obtained, free of any conditions not
      acceptable to the Corporation. The Corporation may require that certificates
      evidencing shares of Common Stock delivered pursuant to any award made hereunder
      bear a legend indicating that the sale, transfer or other disposition thereof
      by
      the holder is prohibited except in compliance with the Securities Act of 1933,
      as amended, and the rules and regulations thereunder. 

    


    6.7 Adjustment.
      In the
      event of any stock split, stock dividend, recapitalization, reorganization,
      merger, consolidation, combination, exchange of shares, liquidation, spin-off
      or
      other similar change in capitalization or event, or any distribution to holders
      of Common Stock other than a regular cash dividend, the number and class of
      securities available under this Plan, the number and class of securities subject
      to each outstanding option and the purchase price per security, the terms of
      each outstanding SAR, the number and class of securities subject to each
      outstanding Stock Award or Deferred Share Award, and the terms of each
      outstanding Performance Share shall be appropriately adjusted by the Committee,
      such adjustments to be made in the case of outstanding options and SARs without
      an increase in the aggregate purchase price or base price. The decision of
      the
      Committee regarding any such adjustment shall be final, binding and conclusive.
      If any such adjustment would result in a fractional security being (i) available
      under this Plan, such fractional security shall be disregarded, or (ii) subject
      to an award under this Plan, the Corporation shall pay the holder of such award,
      in connection with the first vesting, exercise or settlement of such award,
      in
      whole or in part, occurring after such adjustment, an amount in cash determined
      by multiplying (i) the fraction of such security (rounded to the nearest
      hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on the
      vesting, exercise or settlement date over (B) the exercise or base price, if
      any, of such award, provided that any such payment shall not result in an
      impermissible acceleration under Section 409A of the Code.

    


    6.8 Change
      in Control.

    


    (a)          (1) Notwithstanding
      any provision in this Plan or any Agreement, in the event of a Change in Control
      pursuant to Section (b)(3) or (4) below in connection with which the holders
      of
      Common Stock receive shares of common stock that are registered under Section
      12
      of the Exchange Act, (i) all outstanding options and SARS shall immediately
      become exercisable in full, (ii) the Restriction Period applicable to any
      outstanding Restricted Stock Award shall lapse, (iii) the Performance Period
      applicable to any outstanding Performance Share shall lapse, (iv) the
      Performance Measures applicable to any outstanding Restricted Stock Award (if
      any) and to any outstanding Performance Share shall be deemed to be satisfied
      at
      the maximum level, (v) there shall be substituted for each share of Common
      Stock
      available under this Plan, whether or not then subject to an outstanding award,
      the number and class of shares into which each outstanding share of Common
      Stock
      shall be converted pursuant to such Change in Control, and (vi) the Deferral
      Period applicable to any Deferred Shares shall lapse. In the event of any such
      substitution, the purchase price per share in the case of an option and the
      base
      price in the case of an SAR shall be appropriately adjusted by the Committee,
      such adjustments to be made in the case of outstanding options and SARs without
      an increase in the aggregate purchase price or base price. 

    


    (2) Notwithstanding
      any provision in this Plan or any Agreement, in the event of a Change in Control
      pursuant to Section (b)(1) or (2) below, or in the event of a Change in Control
      pursuant to Section (b)(3) or (4) below in connection with which the holders
      of
      Common Stock receive consideration other than shares of common stock that are
      registered under Section 12 of the Exchange Act, the Committee in its discretion
      may require that each outstanding award shall be surrendered to the Corporation
      by the holder thereof, and each such award shall immediately be cancelled by
      the
      Corporation, and the holder shall receive, within ten days of the occurrence
      of
      a Change in Control pursuant to Section (b)(1) or (2) below or within ten days
      of the approval of the stockholders of the Corporation contemplated by Section
      (b)(3) or (4) below, a cash payment from the Corporation in an amount equal
      to
      (i) in the case of an option, the number of shares of Common Stock then subject
      to such option, multiplied by the excess, if any, of the greater of (A) the
      highest per share price offered to stockholders of the Corporation in any
      transaction whereby the Change in Control takes place or (B) the Fair Market
      Value of a share of Common Stock on the date of occurrence of the Change in
      Control, over the purchase price per share of Common Stock subject to the
      option, (ii) in the case of a Free-Standing SAR, the number of shares of Common
      Stock then subject to such SAR, multiplied by the excess, if any, of the greater
      of (A) the highest per share price offered to stockholders of the Corporation
      in
      any transaction whereby the Change in Control takes place or (B) the Fair Market
      Value of a share of Common Stock on the date of occurrence of the Change in
      Control, over the base price of the SAR, (iii) in the case of a Restricted
      Stock
      Award, Performance Share Award or Deferred Share Award, the number of shares
      of
      Common Stock or the number of Performance Shares, as the case may be, then
      subject to such award, multiplied by the greater of (A) the highest per share
      price offered to stockholders of the Corporation in any transaction whereby
      the
      Change in Control takes place or (B) the Fair Market Value of a share of Common
      Stock on the date of occurrence of the Change in Control. In the event of a
      Change in Control, each Tandem SAR shall be surrendered by the holder thereof
      and shall be cancelled simultaneously with the cancellation of the related
      option. The Corporation may, but is not required to, cooperate with any person
      who is subject to Section 16 of the Exchange Act to assure that any cash payment
      in accordance with the foregoing to such person is made in compliance with
      Section 16 and the rules and regulations thereunder.

    


    (b) "Change
      in Control" shall mean:

    


    (i)
      the
      acquisition by any individual, entity or group (with 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 35% or more of either: (A)
      the
      then outstanding shares of common stock of the Corporation (the "Outstanding
      Corporation Common Stock"); or (B) 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 (i), the following
      acquisitions shall not constitute a Change in 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 (A), (B) and (C) of subsection (iii) of this paragraph;
      or

    


    (ii)
      individuals who, as of the date hereof, constitute the Board (the "Incumbent
      Board") cease for any reason to constitute 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 shareholders,
      was approved by a vote of 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

    


    (iii)
      consummation of a reorganization, merger or consolidation or sale or other
      disposition of all or substantially all of the assets of the Corporation (a
      "Business Combination"), in each case, unless, following such Business
      Combination: (A) 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, 50% or more
      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 corporation
      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 may
      be;
      (B) 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, 35% or more of, respectively, the then outstanding
      shares of common stock of the corporation 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 (C) at least a majority of the members
      of
      the board of directors of the corporation 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.

     

    6.9 No
      Right of Participation or Employment.
      No
      person shall have any right to participate in this Plan. Neither this Plan
      nor
      any award made hereunder shall confer upon any person any right to continued
      employment by the Corporation, any Subsidiary or any affiliate of the
      Corporation or affect in any manner the right of the Corporation, any Subsidiary
      or any affiliate of the Corporation to terminate the employment of any person
      at
      any time without liability hereunder. 

    


    6.10 Rights
      as Stockholder.
      No
      person shall have any right as a stockholder of the Corporation with respect
      to
      any shares of Common Stock or other equity security of the Corporation which
      is
      subject to an award hereunder unless and until such person becomes a stockholder
      of record with respect to such shares of Common Stock or equity
      security.

    


    6.11 Governing
      Law.
      This
      Plan, each award hereunder and the related Agreement, and all determinations
      made and actions taken pursuant thereto, to the extent not otherwise governed
      by
      the Code or the laws of the United States, shall be governed by the laws of
      the
      State of Iowa and construed in accordance therewith without giving effect to
      principles of conflicts of laws.

    


    6.12
      Deferral
      Agreements.
      The
      Participants may enter into agreements which will defer the receipt of any
      shares of Common Stock to be received under an award. Any such agreement shall
      require that the deferred distribution be made in shares of Common Stock.
      Notwithstanding anything in this Section 6.12 to the contrary, any such deferral
      shall conform to the requirements of Section 409A of the Code, and no deferral
      shall be permitted if it would result in an award losing its exemption under
      Section 409A of the Code.