Document:

ex10_1.htm

    EXHIBIT
10.1

    

    

    DOLLAR
TREE, INC.

    2003
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

    

    1. PLAN
ADMINISTRATION AND ELIGIBILITY.

    

         1.1.   PURPOSE.
The purpose of the Dollar Tree, Inc. (the "Company") 2003 Non-Employee Director
Stock Option Plan (the "Plan") is to advance the interests of the Company and
its shareholders by attracting and retaining the highest quality of experienced
persons as Non-Employee Directors and to further align the interests of the
Non-Employee Directors with the interests of the Company's
shareholders.

    

         1.2.   ADMINISTRATION.
The award of Options under the Plan shall be as described in Section 3. The Plan
shall be administered, construed and interpreted by the Board of Directors of
the Company. Pursuant to such authorization, the Board of Directors shall have
the responsibility for carrying out the terms of the Plan, including but not
limited to prescribe the form of the agreement applicable to evidence the award
of Options under the Plan, to construe the Plan, to determine all questions
arising under the Plan, and to adopt and amend rules and regulations for the
administration of the Plan as it may deem desirable. To the extent permitted
under the securities laws applicable to compensation plans including, without
limitation, the requirements of Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or under the Internal Revenue Code of
1986, as amended (the "Code"), a committee of the Board of Directors, or a
subcommittee of any committee, may exercise the discretion granted to the Board
under the Plan, provided that the composition of such committee or subcommittee
shall satisfy the requirements of Rule 16b-3 under the Exchange Act, or any
successor rule or regulation. The Board of Directors may also designate a plan
administrator to manage the record keeping and other routine administrative
duties under the Plan.

    

         1.3.   PARTICIPATION
IN THE PLAN. Individuals who, as of the day following each year's annual meeting
date ("Eligibility Date"), are directors of the Company and who are not
employees of the Company or any of its subsidiaries, are eligible to receive
grants of options in accordance with Section 3.1 of this Plan ("Eligible
Directors"). Grant awards to any Eligible Director who was an employee of the
company or any of its subsidiaries at any time during the same calendar year as
the Eligibility Date shall be at the discretion of the Board.

    

    2. STOCK
SUBJECT TO THE PLAN.

    

         2.1.   NUMBER
OF SHARES. The maximum number of shares of the Company's $0.01 par value Common
Stock ("Common Stock" or "Shares") which may be issued pursuant to options
granted under this Plan shall be 500,000 Shares, subject to adjustment as
provided in Section 4.4.

    

         2.2.   NON-EXERCISED
SHARES. If any outstanding option under this Plan for any reason expires or is
forfeited or terminated without having been exercised in full, the Shares
allocable to the unexercised portion of the option shall again become available
for issuance under options granted pursuant to this Plan.

    

         2.3.   SHARE
ISSUANCE. Upon the exercise of an option, the Company may issue new Shares or
reissue Shares previously repurchased by or on behalf of the
Company.

    

         2.4.   GENERAL
RESTRICTIONS. Delivery of Shares under the Plan shall be subject to the
following:

    

                (a)
Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any Shares under the Plan or make any other distribution of
benefits under the Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any securities
exchange or similar entity.

    

                (b)
To the extent that the Plan provides for issuance of stock certificates to
reflect the issuance of Shares, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

    

         2.5.   TAX
WITHHOLDING. The Board may condition the delivery of any shares or other
benefits under the Plan on satisfaction of any applicable withholding
obligations. The Board, in its discretion, and subject to such requirements as
the Board may impose prior to the occurrence of such withholding, may permit
such withholding obligations to be satisfied through cash payment by the
participant, through the surrender of Shares which the Participant already owns,
or through the surrender of Shares to which the participant is otherwise
entitled under the Plan.

    

    3.
OPTIONS.

    

         3.1.   OPTION
GRANT DATES. Unless otherwise determined by the Board, and subject to
shareholder approval, as may be required by law, options shall be granted
automatically to each Eligible Director on the business day following each
year's annual meeting date (the "Grant Date"). Any non-employee director first
elected as a director after the Eligibility Date but before the next annual
meeting shall be granted an option as the Board shall determine in its sole
discretion, but in any case covering no more than twice the number of shares
granted to Eligible Directors on the most recent Grant Date. The Grant Date for
an option granted to a newly elected director hereunder shall be the date of
such director's election to the Board, and the Option Price of such option shall
be determined as of such Grant Date.

    

         3.2.   OPTION
PRICE. The purchase price per share for the Shares covered by each option shall
be the closing sale price on the Grant Date (the "Option Price") for a share of
Common Stock as reported on the principal exchange or market on which the Common
Stock is then listed or admitted to trading, or, if the Common Stock is not then
so listed, as determined in good faith by the Board. Repricing of options after
the date of grant shall not be permitted.

    

         3.3.   NUMBER
OF OPTION SHARES. The number of Shares subject to options ranted to each
participating director on each Grant Date shall be 9,000; provided however that
the Board of Directors may reduce this amount or adopt a formula to determine
the number of Shares subject to options to be granted, provided however that the
number of such Shares may not be increased over 9,000 without shareholder
approval. Options which may be granted to participating directors pursuant to
this Section 3 are in addition to any Options which may be issued to such
directors in lieu of annual fee payments pursuant to other applicable Company
plans.

    

         3.4.   PERIOD
OF OPTION. Unless otherwise determined by the Board, Options shall vest and
become exercisable immediately, subject to the provisions of the Plan. The
options will expire ten years after the Grant Date or three years after the date
the Non-employee Director is no longer a director of the Company, whichever
occurs earlier.

    

         3.5.   DIRECTOR
TERMINATIONS. In the event that a Director's service on the Board ceases due to
death, disability or retirement, all outstanding options then held by the
Director shall remain exercisable for a period of three years following the
cessation of service. Except as otherwise provided by the Board, in the event
that a Director's service on the Board ceases due to resignation, or other
voluntary removal, vested and exercisable shares shall remain exercisable for a
period of one year following the cessation of service. In any event, if a
Director is involuntarily removed for breach of duty, dishonesty or any other
cause, all vested and exercisable shares of options awarded under this plan are
immediately forfeit.

    

         3.6.   WRITTEN
DOCUMENTATION. Each grant of an option under this Plan shall be evidenced in
writing, which shall comply with and be subject to the terms and conditions
contained in this Plan.

    

         3.7.   NON-STATUTORY
STOCK OPTIONS. Options granted under this Plan shall not be entitled to special
tax treatment under Section 422A of the Internal Revenue Code of
1986.

    

         3.8.   EXERCISE
OF OPTIONS. Options may be exercised only by written notice to the secretary of
the Company and payment of the exercise price in (i) cash, (ii) Shares, or (iii)
delivery of an irrevocable written notice instructing the Company to deliver the
Shares being purchased to a broker, who may be selected by the Company, subject
to the broker's written guarantee to deliver cash to the Company, in each case
equal to the full consideration of the Option Price for the Shares which are
being exercised and any required tax withholding. Options

    may be
exercised in whole or in part. The Board may impose other restrictions or
requirements on the permissible method of exercise.

    

         3.9.   OPTIONS
NOT TRANSFERABLE. Except as otherwise permitted by the Board, each option
granted under this Plan shall not be transferable by the optionee other than by
will or by the laws of descent and distribution. However, subject to Board
approval, the Board may provide that all or a portion of an Option may be
granted to an optionee upon terms that permit transfer of the Option in a form
and manner determined by the Board. Any person to whom an Option is transferred
pursuant to this Section 3.9 shall agree in writing to be bound by the terms of
the Plan and the stock option agreement for such Option as if such transferee
had been an original signatory thereto, and to execute and/or deliver to the
Board any documents as may be requested by the Board from time to
time.

    

    3.10.  EXERCISE
BY REPRESENTATIVE FOLLOWING DEATH OF DIRECTOR. A director, by written notice to
the Company, may designate one or more persons (and from time to time change
such designation), including his or her legal representative, who, by reason of
the director's death, shall acquire the right to exercise all or a portion of an
option granted under this Plan. Any exercise by a representative shall be
subject to the provisions of this Plan.

    

    4.
GENERAL PROVISIONS.

    

         4.1    EFFECTIVE
DATE OF THIS PLAN. This Plan is effective July 1, 2003 (the “Effective Date”)
and the shareholders of Dollar Tree Stores, Inc. approved the Plan on June 19,
2003.

    

         4.2    DURATION
OF THIS PLAN. This Plan shall remain in effect until all Shares subject to
option grants have been purchased or all unexercised options have expired.
Notwithstanding the foregoing, no options may be granted pursuant to this Plan
on or after the 10th anniversary of this Plan's effective date.

    

         4.3    AMENDMENT
OF THIS PLAN. The Board of Directors may suspend or discontinue this Plan or
revise or amend it in any respect, provided, however, that, without approval of
the Company's shareholders, no revision or amendment shall (i) change the total
number of Shares subject to this Plan (except as provided in Section 4.4), (ii)
change the designation of the class of directors eligible to participate in the
Plan, (iii) change the exercise price of the options, or (iv) materially
increase the benefits accruing to participants under or the cost of this Plan to
the Company. Moreover, in no event may Plan provisions be amended more than once
every 6 months, other than to comport with changes in the Internal Revenue Code,
the Employee Retirement Income Security Act, or the rules and regulations
thereunder. No amendment, modification, or termination of this Plan shall in any
manner adversely affect the rights of any director holding options granted under
this Plan without his or her consent.

    

         4.4    CHANGES
IN SHARES. To prevent the dilution or enlargement of benefits or potential
benefits intended to be made available under the Plan, in the event of any
corporate transaction or event such as a stock dividend, recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, spin-off,
combination or other similar corporate transaction or event affecting the Common
Stock with respect to which Options have been or may be issued under the Plan
(any such transaction or event, a “Transaction”), then the Board shall, in such
manner as the Board deems equitable:  (A) make a proportionate
adjustment in 1) the maximum number and type of securities as to which Options
may be granted under this Plan, 2) the number and type of securities subject to
outstanding Options, 3) the grant or exercise price with respect to any such
Options, and 4) the per individual limitations on the number of securities that
may be awarded under the Plan (any such adjustment, an “Antidilution
Adjustment”); provided, in each case, that with respect to all Options, no such
adjustment shall be authorized to the extent that such adjustment violates the
provisions of Treasury Regulation 1.424-1 and Section 409A of the Code or any
successor provisions; and the number of shares of Common Stock subject to any
Options denominated in shares shall always be a whole number; or (B) cause any
Options outstanding as of the effective date of the Transaction to be cancelled
in consideration of a cash payment or alternate equity award (whether from the
Company or another entity that is a participant in the Transaction) or a
combination thereof made to the holder of such cancelled Option substantially
equivalent in value to the fair market value of such cancelled
Option.  The determination of fair market value shall be made by the
Board, as the case may be, in their sole discretion.  Any adjustments
made hereunder shall be binding on all Holders.

    

         4.5    CHANGE
OF CONTROL. If a Change of Control of the Company shall occur, then the Board
may, in its discretion, determine that all outstanding Options shall become
fully exercisable. If the Board determines to accelerate any such outstanding
Options, then such Options shall remain vested and/or exercisable during the
remaining term thereof, regardless of whether the Director shall continue with
the Company or any Subsidiary. The Board, in its sole discretion, and without
the consent of any Director affected thereby, may determine that some or all
Directors holding outstanding Options shall receive cash settlements in exchange
for redemption of all or a part of such Options. For purposes of the Plan, the
term "Change of Control" shall mean (a) the sale, lease, exchange or other
transfer of all or substantially all of the assets of the Company (in one
transaction or in a series of related transactions) to a corporation that is not
controlled by the Company, (b) the approval by the shareholders of the Company
of any plan or proposal for the liquidation or dissolution of the Company, (c) a
successful tender offer for the Common Stock of the Company, after which
the  tendering party holds more than 30% of the issued and outstanding
Common Stock of the Company, or (d) a merger, consolidation, share exchange, or
other transaction to which the Company is a party pursuant to

    which the
holders of all of the shares of the Company outstanding prior to such
transaction do not hold, directly or indirectly, at least 70% of the outstanding
shares of the surviving company after the transaction.

    

         4.6    LIMITATION
OF RIGHTS.

    

                4.6.1   NO
RIGHT TO CONTINUE AS A DIRECTOR. Neither this Plan, nor the granting of an
option under this Plan, nor any other action taken pursuant to this Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time, or at any
particular rate of compensation.

    

                4.6.2   NO
SHAREHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have no rights as a
shareholder with respect to the Shares covered by his or her options until the
date of the issuance to him or her of a stock certificate
therefore.

    

         4.7    ASSIGNMENTS.
The rights and benefits under this Plan may not be assigned except as provided
in Sections 3.9 and 3.10.

    

         4.8    NOTICE.
Any written notice to the Company required by any of the provisions of this Plan
shall be addressed to the secretary of the Company and shall become effective
when it is received.

    

         4.9    SHAREHOLDER
APPROVAL AND REGISTRATION STATEMENT. This Plan shall be approved by the Board of
Directors and submitted to the Company's shareholders for approval. Any options
granted under this Plan prior to effectiveness of a registration statement filed
with the Securities and Exchange Commission covering the Shares to be issued
hereunder shall not be exercisable until, and are expressly conditional upon,
the effectiveness of a registration statement covering the Shares.

    

         4.10   GOVERNING
LAW. This Plan and all determinations made and actions taken pursuant hereto
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia.

    

         4.11   SEVERABILITY.
If any term or provision of this Plan or the application thereof to any person
or circumstances shall, to any extent, be invalid or unenforceable, then the
remainder of the Plan, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision hereof
shall be valid and be enforced to the fullest extent permitted by applicable
law.ex10_1.htm

    EXHIBIT
10.1

    

    

    DOLLAR
TREE, INC.

    2003 EQUITY INCENTIVE PLAN

    

    ARTICLE
I

    GENERAL

    

    Section 1.1.    PURPOSE.    The
Dollar Tree, Inc. 2003 Equity Incentive Plan (the "Plan") has been established by Dollar Tree, Inc. (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to
achieve long-range goals; (iii) provide incentive compensation
opportunities that are competitive with those of other similar companies; and
(iv) further identify Participants' interests with those of the Company's
other shareholders through compensation that is based on the Company's common
stock; and thereby promote the long-term financial interest of the Company and
the Member Companies, including the growth in value of the Company's equity and
enhancement of long-term shareholder return.

    

    Section 1.2.    PARTICIPATION.    Subject
to the terms and conditions of the Plan, the Committee shall determine and
designate, from time to time, from among the Eligible Recipients (including
transferees of Eligible Recipients to the extent the transfer is permitted by
the Plan and the applicable Award Agreement), those persons who will be granted
one or more Awards under the Plan, and thereby become "Participants" in the
Plan.

    

    Section 1.3.    OPERATION,
ADMINISTRATION, AND DEFINITIONS.    The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Article 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 8 of the
Plan).

    

    ARTICLE
2

    OPTIONS
AND SARS

    

    Section 2.1.    DEFINITIONS.    

    

    (a)   The
grant of an "Option" entitles the Participant to purchase shares of Stock at an
Exercise Price established by the Committee. Any Option granted under this
Article 2 may be either an incentive stock option (an "ISO") or a
nonqualified option (an "NQO"), as determined in the discretion of the
Committee. An "ISO" is an Option that is intended to satisfy the requirements
applicable to an "incentive stock option" described in section 422(b) of
the Code. An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the
Code.

    

    (b)   A
stock appreciation right (an "SAR") entitles the Participant to receive, in cash
or Stock (as determined in accordance with Section 2.5), value equal to (or
otherwise based on) the excess of: (a) the Fair Market Value of a specified
number of shares of Stock at the time of exercise; over (b) an Exercise
Price established by the Committee. The Committee may limit the amount that can
be received when an SAR is exercised.

    

    Section 2.2.    EXERCISE
PRICE.    The "Exercise Price" of each Option and SAR
granted under this Article 2 shall be established by the Committee or shall
be determined by a method established by the Committee at the time the Option or
SAR is granted; except that the Exercise Price shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant (or, if greater,
the par value of a share of Stock). Repricing of Options and SAR Awards granted
under this Article 2 after the date of grant shall not be
permitted.

    

    Section 2.3.    EXERCISE.    An
Option and an SAR shall be exercisable in accordance with such terms and
conditions and during such periods as may be established by the
Committee.

    

    Section 2.4.    PAYMENT
OF OPTION EXERCISE PRICE.    The payment of the Exercise
Price of an Option granted under this Article 2 shall be subject to the
following:

    

    (a)   Subject
to the following provisions of this Section 2.4, the full Exercise Price
for shares of Stock purchased upon the exercise of any Option shall be paid at
the time of such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in paragraph 2.4(c), payment may be
made as soon as practicable after the exercise).

    

    (b)   The
Exercise Price shall be payable in cash or by tendering, by either actual
delivery of shares or by attestation, already-owned shares of Stock acceptable
to the Committee, and valued at Fair Market Value as of the day of exercise, or
in any combination thereof, as determined by the Committee.

    

    (c)   The
Committee may permit a Participant to elect to pay the Exercise Price upon the
exercise of an Option by irrevocably authorizing a third party to sell shares of
Stock (or a sufficient portion of the shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire Exercise Price and any tax withholding resulting from such
exercise.

    

    Section 2.5.    SETTLEMENT
OF AWARD.    Settlement of Options and SARs is subject to
Section 4.7.

    

    ARTICLE
3

    OTHER
STOCK AWARDS

    

    Section 3.1.    DEFINITIONS.    

    

    (a)   A
"Stock Unit" Award is the grant of a right to receive shares of Stock in the
future.

    

    (b)   A
"Performance Share" Award is a grant of a right to receive shares of Stock or
Stock Units which is contingent on the achievement of performance or other
objectives during a specified period.

    

    (c)   A
"Performance Unit" Award is a grant of a right to receive a designated dollar
value amount of Stock which is contingent on the achievement of performance or
other objectives during a specified period.

    

    (d)   A
"Restricted Stock" Award is a grant of shares of Stock, and a "Restricted Stock
Unit" Award is the grant of a right to receive shares of Stock in the future,
with such shares of Stock or right to future delivery of such shares of Stock
subject to a risk of forfeiture or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as determined by
the Committee.

    

    Section 3.2.    RESTRICTIONS
ON AWARDS.    Each Stock Unit Award, Restricted Stock Award,
Restricted Stock Unit Award, Performance Share Award, and Performance Unit Award
shall be subject to the following:

    

    (a)   Any
such Award shall be subject to such conditions, restrictions and contingencies
as the Committee shall determine.

    

    (b)   The
Committee may designate whether any such Award being granted to any Participant
is intended to be "performance-based compensation" as that term is used in
section 162(m) of the Code. Any such Awards designated as intended to be
"performance-based compensation" shall be conditioned on the achievement of one
or more performance measures, to the extent required by Code
section 162(m). The performance measures that may be used by the Committee
for such Awards shall be based on the attainment of any performance goals, as
selected by the Committee, that are related to (i) sales increases
(including comparable store sales), (ii) profits and earnings (including
operating income and EBITDA), (iii) cash flow, (iv) shareholder value
or (v) financial condition or liquidity. Such goals may be stated in
absolute terms, relative to comparison companies or indices, as increases over
past time periods, as ratios (such as earnings per share), or as returns on any
of the foregoing measures over a period of time. For Awards under this
Article 3 intended to be "performance-based compensation," the grant of the
Awards and the establishment of the Performance Measures shall be made during
the period required under Code section 162(m).

    

    ARTICLE
4

    OPERATION
AND ADMINISTRATION

    

    Section 4.1.    EFFECTIVE
DATE.    The Plan is effective July 1, 2003 (the “Effective
Date”) and the shareholders of Dollar Tree Stores, Inc. approved the Plan on
June 19, 2003. The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten year anniversary of the Effective Date (except for Awards granted
pursuant to commitments entered into prior to such ten-year
anniversary).

    

    Section 4.2.    SHARES
SUBJECT TO PLAN.    The shares of Stock for which Awards may
be granted under the Plan shall be subject to the following:

    

    (a)   The
shares of Stock with respect to which Awards may be made under the Plan shall be
shares currently authorized but unissued or currently held or subsequently
acquired by the Company as treasury shares, including shares purchased in the
open market or in private transactions.

    

    (b)   Subject
to the following provisions of this Section 4.2, the maximum number of
shares of Stock that may be delivered to Participants and their beneficiaries
under the Plan shall be equal to the sum of: (i) six million (6,000,000)
shares of Stock; and (ii) any shares of Stock available for future awards
under any prior stock option or incentive plan of the Company (the "Prior
Plans") as of the Effective Date; and (iii) any shares of Stock that are
represented by awards granted under any Prior Plans which are forfeited, expire
or are canceled without delivery of shares of Stock or which result in the
forfeiture of the shares of Stock back to the Company.

    

    (c)   To
the extent provided by the Committee, any Award may be settled in cash rather
than Stock. To the extent any shares of Stock covered by an Award are not
delivered to a Participant or beneficiary because the Award is forfeited or
canceled, or the shares of Stock are not delivered because the Award is settled
in cash or used to satisfy the applicable tax withholding obligation, such
shares shall not be deemed to have been delivered for purposes of determining
the maximum number of shares of Stock available for delivery under the
Plan.

    

    (d)   If
the exercise price of any stock option granted under the Plan or any Prior Plan
is satisfied by tendering shares of Stock to the Company (by either actual
delivery or by attestation), only the number of shares of Stock issued net of
the shares of Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan.

    

    (e)   Subject
to paragraph 4.2(f), the following additional maximums are imposed under
the Plan.

    

    (i) The
maximum number of shares of Stock that may be issued by Options intended to be
ISOs shall be three hundred thousand (300,000) shares.

    

    (ii) The
maximum number of shares that may be covered by Awards granted to any one
individual pursuant to Article 2 (relating to Options and SARs) shall be
sixty thousand (60,000) shares during any one calendar year period. If an Option
is in tandem with an SAR, such that the exercise of the Option or SAR with
respect to a share of Stock cancels the tandem SAR or Option right,
respectively, with respect to such share, the tandem Option and SAR rights with
respect to each share of Stock shall be counted as covering but one share of
Stock for purposes of applying the limitations of this
paragraph (ii).

    

    (iii) The
maximum number of shares of Stock that may be issued in conjunction with Awards
granted pursuant to Article 3 (relating to Other Stock Awards) shall be one
million (1,000,000) shares.

    

    (iv) For
Stock Unit Awards, Restricted Stock Awards, Restricted Stock Unit Awards and
Performance Share Awards that are intended to be "performance-based
compensation" (as that term is used for purposes of Code section 162(m)),
no more than thirty thousand (30,000) shares of Stock may be subject to such
Awards granted to any one individual during any one calendar year period. If,
after shares have been earned, the delivery is deferred, any additional shares
attributable to dividends during the deferral period shall be
disregarded.

    

    (v) For
Performance Unit Awards that are intended to be "performance-based compensation"
(as that term is used for purposes of Code section 162(m)), no more than $150,000 may be subject to such Awards granted to any
one individual during any one calendar year period. If, after amounts have been
earned with respect to Performance Unit Awards, the delivery of such amounts is
deferred, any additional amounts attributable to earnings during the deferral
period shall be disregarded.

    

    (f)    To
prevent the dilution or enlargement of benefits or potential benefits intended
to be made available under the Plan, in the event of any corporate transaction
or event such as a stock dividend, recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, spin-off, combination or other
similar corporate transaction or event affecting the Stock with respect to which
Awards have been or may be issued under the Plan (any such transaction or event,
a “Transaction”), then the Committee shall, in such manner as the Committee
deems equitable:  (A) make a proportionate adjustment in 1) the
maximum number and type of securities as to which awards may be granted under
this Plan, 2) the number and type of securities subject to outstanding Awards,
3) the grant or exercise price with respect to any such Award, 4) the
performance targets and goals appropriate to any outstanding Awards for
Performance Shares or Performance Units, and 5) the per individual limitations
on the number of securities that may be awarded under the Plan (any such
adjustment, an “Antidilution Adjustment”); provided, in each case, that with
respect to ISOs, no such adjustment shall be authorized to the extent that such
adjustment would cause such options to violate Section 422(b) of the Code or any
successor provision; with respect to all Options, no such adjustment shall be
authorized to the extent that such adjustment violates the provisions of
Treasury Regulation 1.424-1 and Section 409A of the Code or any successor
provisions; with respect to all for Performance Shares or Performance Units, no
such adjustment shall violate the requirements applicable to Awards intended to
qualify for exemption under Section 162(m) of the Code; and the number of shares
of Stock subject to any Award denominated in shares shall always be a whole
number; or (B) cause any Award outstanding as of the effective date of the
Transaction to be cancelled in consideration of a cash payment or alternate
Award (whether from the Company or another entity that is a participant in the
Transaction) or a combination thereof made to the holder of such cancelled Award
substantially equivalent in value to the fair market value of such cancelled
Award.  The determination of fair market value shall be made by the
Committee or the Board, as the case may be, in their sole
discretion.  Any adjustments made hereunder shall be binding on all
Participants.

    

    Section 4.3.    GENERAL
RESTRICTIONS.    Delivery of shares of Stock or other
amounts under the Plan shall be subject to the following:

    

    (a)   Notwithstanding
any other provision of the Plan, the Company shall have no liability to deliver
any shares of Stock under the Plan or make any other distribution of benefits
under the Plan unless such delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any securities
exchange or similar entity.

    

    (b)   To
the extent that the Plan provides for issuance of stock certificates to reflect
the issuance of shares of Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

    

    Section 4.4.    TAX
WITHHOLDING.    All distributions under the Plan are subject
to withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock which the Participant already owns, or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the
Plan.

    

    Section 4.5.    GRANT
AND USE OF AWARDS.    In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Member Company
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Member Company). Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Member Company, including the plans and
arrangements of the Company or a Member Company assumed in business
combinations.

    

    Section 4.6.    DIVIDENDS
AND DIVIDEND EQUIVALENTS.    An Award (including without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock,
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.

    

    Section 4.7.    SETTLEMENT
OF AWARDS.    The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. In lieu of issuing a fraction of a
share upon any exercise of an Award, resulting from an adjustment of the Award
pursuant to paragraph 4.2(f) of the Plan or otherwise, the Company will be
entitled to pay to the Participant an amount equal to the fair market value of
such fractional share. Satisfaction of any obligations under an Award, which is
sometimes referred to as "settlement" of the Award, may be subject to such
conditions, restrictions and contingencies as the Committee shall determine. The Committee may permit or require the
deferral of any Award payment, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of interest
or dividend equivalents, and may include converting such credits into deferred
Stock equivalents provided that such rules and procedures satisfy the
requirements of Section 409A of the Code.  No deferral is permitted
for Options or SARs. Each Member Company shall be liable for payment of cash due
under the Plan with respect to any Participant to the extent that such benefits
are attributable to the services rendered for that Member Company by the
Participant. Any disputes relating to liability of a Member Company for cash
payments shall be resolved by the Committee.

    

    Section 4.8.    TRANSFERABILITY.    Except
as otherwise permitted by the Committee,

    

    (a)   Awards
under the Plan are not transferable except as designated by the Participant by
will, by the laws of descent and distribution or by a beneficiary form filed
with the Company.

    

    (b)   Awards
may be exercised or claimed on behalf of a deceased Participant or other person
entitled to benefits under the Plan by the beneficiary of such Participant or
other person if the Company has a valid designation of such beneficiary on file,
or otherwise by the personal legal representative of such Participant or other
person.

    

    Section 4.9.    FORM
AND TIME OF ELECTIONS.    Unless otherwise specified herein,
each election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall comply with Section 409A of the Code and be in writing
filed with the Committee at such times, in such form, and subject to such
restrictions and limitations, not inconsistent with the terms of the Plan, as
the Committee shall require.

    

    Section 4.10.    AGREEMENT
WITH COMPANY.    An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not require that the Participant
sign a copy of such document. Such document is referred to in the Plan as an
"Award Agreement" regardless of whether any Participant signature is
required.

    

    Section 4.11.    ACTION
BY COMPANY OR MEMBER COMPANY.    Any action required or
permitted to be taken by the Company or any Member Company shall be by
resolution of its board of directors, or by action of one or more members of the
board (including a committee of the board) who are duly authorized to act for
the board, or (except to the extent prohibited by applicable law or applicable
rules of any stock exchange) by a duly authorized officer of such
company.

    

    Section 4.12.    GENDER
AND NUMBER.    Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

    

    Section 4.13.    LIMITATION
OF IMPLIED RIGHTS.    

    

    (a)   Neither
a Participant nor any other person shall, by reason of participation in the
Plan, acquire any right in or title to any assets, funds or property of the
Company or any Member Company whatsoever, including, without limitation, any
specific funds, assets, or other property which the Company or any Member
Company, in its sole discretion, may set aside in anticipation of a liability
under the Plan. A Participant shall have only a contractual right to the Stock
or amounts, if any, payable under the Plan, unsecured by any assets of the
Company or any Member Company, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Member Company
shall be sufficient to pay any benefits to any person.

    

    (b)   The
Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee the right to be retained in
the employ of the Company or any Member Company, nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan, no Award
under the Plan shall confer upon the holder thereof any rights as a shareholder
of the Company prior to the date on which the individual fulfills all conditions
for receipt of such rights.

    

    Section 4.14.    EVIDENCE.    Evidence
required of anyone under the Plan may be by certificate, affidavit, document or
other information which the person acting on it considers pertinent and
reliable, and signed, made or presented by the proper party or
parties.

    

     

    Section
4.15.                                 Section 409A of the
Code.  Any Award granted under this Plan shall be provided or
made in a manner and at such time, in such form and subject to such election
procedures (if any), as complies with the applicable requirements of Section
409A of the Code to avoid a plan failure described in Section 409A(a)(1),
including without limitation, deferring payment to a specified employee or until
the occurrence of a specified event described in Section 409A(a)(2) of the
Code.  Notwithstanding any other provision hereof or document
pertaining hereto, the Plan shall be so construed and interpreted to meet the
applicable requirements of Section 409A of the Code to avoid a plan failure
described in Section 409A(a)(1) of the Code.

     

    ARTICLE 5

    CHANGE
OF CONTROL

    

    Subject
to the provisions of paragraph 4.2(f) (relating to the adjustment of
shares), and except as otherwise provided in the Plan or the Award Agreement
reflecting the applicable Award, upon the occurrence of a Change of Control the
following provisions shall apply:

    

    Section 5.1.    ACCELERATION
OF VESTING.    If a Change of Control of the Company
shall occur, then with respect to outstanding Awards not already vested and/or
exercisable, the Committee, in its sole discretion, may determine
that:

    

    (a)    All
outstanding Options (regardless of whether in tandem with SARs) shall become
fully exercisable.

    

    (b)    All
outstanding SARs (regardless of whether in tandem with Options) shall become
fully exercisable.

    

    (c)    All
Stock Units, Restricted Stock, Restricted Stock Units, and Performance Shares
shall become fully vested.

    

    If the
Committee determines to accelerate any such outstanding Awards, then such Awards
shall remain vested and/or exercisable during the remaining term thereof,
regardless of whether the employment or other status of the Participants with
respect to which Awards have been granted shall continue with the Company or any
Member Company.

    

    Section 5.2.    CASH
PAYMENT.    Without limiting the generality of
Section 4.7, if a Change of Control of the Company shall occur, then the
Committee, in its sole discretion, and without the consent of any Participant
affected thereby, may determine that some or all Participants holding
outstanding Awards shall receive cash settlements in exchange for redemption of
all or a part of such Awards.

    

    Section 5.3.    LIMITATION
ON CHANGE OF CONTROL PAYMENTS.    Notwithstanding
anything in Section 5.1 or 5.2 above to the contrary, if, with respect to a
Participant, the acceleration of the exercisability and/or vesting of an Award
as provided in Section 5.1 or the payment of cash in exchange for all or
part of an Award as provided in Section 5.2 above (which acceleration or
payment could be deemed a "payment" within the meaning of
Section 280G(b)(2) of the Code), together with any other payments which
such Participant has the right to receive from the Company or any corporation
which is a member of an "affiliated group" (as defined in Section 1504(a)
of the Code without regard to Section 1504(b) of the Code) of which the
Company is a member, would constitute a "parachute payment" (as defined in
Section 280G(b)(2) of the Code), then the acceleration of exercisability
and/or vesting and the payments to such Participant pursuant to Sections 5.1 and
5.2 above shall be reduced to the extent or amount as, in the sole judgment of
the Committee, will result in no portion of such payments being subject to the
excise tax imposed by Section 4999 of the Code.

    

    ARTICLE
6

    COMMITTEE

    

    Section 6.1.    ADMINISTRATION.    The
authority to control and manage the operation and administration of the Plan
shall be vested in a committee (the "Committee") in accordance with this
Article 6. The Committee shall be selected by the Board, and shall consist
solely of two or more members of the Board who are not employees of the Company
or any Member Company. Unless otherwise determined by the Board, the
Compensation Committee of the Board shall serve as the Committee for purposes of
the Plan. If at any time the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.

    

    Section 6.2.    POWERS OF
COMMITTEE.    The Committee's administration of the
Plan shall be subject to the following:

    

    (a)    Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Recipients those persons who shall
receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of
shares covered by the Awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such Awards, and (subject to the
restrictions imposed by Article 7) to cancel or suspend
Awards.

    

    (b)    To
the extent that the Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.

    

    (c)    The
Committee will have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any Award Agreement made pursuant to the
Plan, and to make all other determinations that may be necessary or advisable
for the administration of the Plan.

    

    (d)    Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding on all persons.

    

    (e)    In
controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the articles and
by-laws of the Company, and applicable state corporate law.

    

    Section 6.3.    DELEGATION
BY COMMITTEE.    Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.

    

    Section 6.4.    INFORMATION
TO BE FURNISHED TO COMMITTEE.    The Company and
Member Companies shall furnish the Committee with such data and information as
it determines may be required for it to discharge its duties. The records of the
Company and Member Companies as to an employee's or Participant's employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Participants and
other persons entitled to benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.

    

    ARTICLE
7

    AMENDMENT
AND TERMINATION

    

    The Board
may, at any time, amend or terminate the Plan, provided that no amendment or
termination may, in the absence of written consent to the change by the affected
Participant (or, if the Participant is not then living, the affected
beneficiary), adversely affect the rights of any Participant or beneficiary
under any Award granted under the Plan prior to the date such amendment is
adopted by the Board; and further provided that adjustments pursuant to
paragraph 4.2(f) shall not be subject to the foregoing limitations of this
Article 7. Amendments to this Plan shall be subject to shareholder approval
to the extent such approval is required by applicable law or applicable
requirements of any securities exchange or similar entity.

    

    ARTICLE
8

    DEFINED
TERMS

    

    In
addition to the other definitions contained herein, the following definitions
shall apply:

    

    (a)    Award.
The term "Award" shall mean any award or benefit granted under the Plan,
including, without limitation, the grant of Options, SARs, Stock Unit Awards,
Restricted Stock Awards, Restricted Stock Unit Awards, Performance Unit Awards,
and Performance Share Awards.

    

    (b)    Award
Agreement. The term "Award Agreement" has the meaning assigned in
Section 4.10.

    

    (c)    Board.
The term "Board" shall mean the Board of Directors of the Company.

    

    (d)    Change
of Control. The term "Change of Control" shall mean (a) the sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company (in one transaction or in a series of related transactions) to a
corporation that is not controlled by the Company, (b) the approval by the
shareholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company, (c) a successful tender offer for the Common
Stock of the Company, after which the tendering party holds more than 30% of the
issued and outstanding Common Stock of the Company, or (d) a merger,
consolidation, share exchange, or other transaction to which the Company is a
party pursuant to which the holders of all of the shares of the Company
outstanding prior to such transaction do not hold, directly or indirectly, at
least 70% of the outstanding shares of the surviving company after the
transaction.

    

    (e)    Code.
The term "Code" means the Internal Revenue Code of 1986, as amended. A reference
to any provision of the Code shall include reference to any successor provision
of the Code.

    

    (f)    Committee.
The term "Committee" has the meaning assigned in Section 6.1.

    

    (g)    Company.
The term "Company" has the meaning assigned in Section 1.1.

    

    (h)    Effective
Date. The term "Effective Date" has the meaning assigned in
Section 4.1.

    

    (i)    Eligible
Recipient. The term "Eligible Recipient" shall mean any employee of the Company
or a Member Company and any of those consultants and independent contractors of
the Company or a Member Company who are natural persons. An Award may be granted
to an employee, consultant or independent contractor in connection with hiring,
retention or otherwise, prior to the date he or she first performs services for
the Company or the Member Companies, provided that such Awards shall not become
vested prior to the date he or she first performs such services. An Award may
also be granted to an employee, consultant or independent contractor in
connection with the conclusion of such employee, consultant or independent
contractor's performance of services and separation from the Company or its
Member Companies. The effect of discontinuity in an Eligible Recipient's service
with the Company or its Member Companies on any outstanding Award shall be at
the discretion of the Committee.

    

    (j)    Exercise
Price. The term "Exercise Price" has the meaning assigned in
Section 2.2.

    

    (k)    Fair
Market Value. For purposes of determining the "Fair Market Value" of a share of
Stock as of any date, the following rules shall apply:

    

    (i)  If
the principal market for the Stock is a national securities exchange or the
NASDAQ Stock Market, then “Fair Market Value” as of that date shall be the
closing sale price of the Stock on the principal exchange or market on which the
Stock is then listed or admitted to trading on such date.

    

    (ii) If
sale prices are not available or if the principal market for the Stock is not a
national securities exchange and the Stock is not quoted on the Nasdaq Stock
Market, the average between the highest bid and lowest asked prices for the
Stock on such day as reported on the Nasdaq OTC Bulletin Board Service or by the
National Quotation Bureau, Incorporated or a comparable service.

    

    (iii) If
the day is not a business day, and as a result, paragraphs (i) and
(ii) next above are inapplicable, the Fair Market Value of the Stock shall
be determined as of the next earlier business day. If paragraphs (i) and
(ii) next above are otherwise inapplicable, then the Fair Market Value of
the Stock shall be determined in good faith by the Committee.

    

    (l)    ISO.
The term "ISO" has the meaning assigned in Section 2.1(a).

    

    (m)  Member
Company.  Member Company
means any “parent corporation” or “subsidiary corporation” (within the meaning
of Section 424 of the Code) of the Company, including a corporation that becomes
a Member Company after the adoption of this Plan, that the Board or Committee
designates as a participating employer in the Plan

    

    (n)    NQO.
The term "NQO" has the meaning assigned in Section 2.1(a).

    

    (o)    Option.
The term "Option" has the meaning assigned in Section 2.1(a).

    

    

    (p)    Participant.
The term "Participant" has the meaning assigned in
Section 1.2.

    

    (q)    Performance
Unit. The term "Performance Unit" has the meaning assigned in
Section 3.1(c).

    

    (r)    Performance
Share. The term "Performance Share" has the meaning assigned in
Section 3.1(b).

    

    (s)    Plan.
The term "Plan" has the meaning assigned in Section 1.1.

    

    (t)    Prior
Plan. The term "Prior Plan" has the meaning assigned in
Section 4.2(b).

    

    (u)    Restricted
Stock. The term "Restricted Stock" has the meaning assigned in
Section 3.1(d).

    

    (v)    Restricted
Stock Unit. The term "Restricted Stock Unit" has the meaning assigned in
Section 3.1(d).

    

    (w)    SAR.
The term "SAR" has the meaning assigned in Section 2.1(b).

    

    (x)    Stock.
The term "Stock" shall mean shares of common stock of the Company.

    

    (y)    Stock
Unit. The term "Stock Unit" has the meaning assigned in
Section 3.1(a).

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