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                                  EXHIBIT 4.23

                    AGREEMENT AS TO EXPENSES AND LIABILITIES

         THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is
made as of ___________, between SEMCO Energy, Inc., a Michigan corporation (the
"Corporation"), and SEMCO Capital Trust I, a Delaware business trust (the
"Trust").

         WHEREAS, the Trust intends to issue its Trust Common Securities (the
"Trust Common Securities") to the Corporation and to issue and sell SEMCO
Capital Trust I ____ % Trust Preferred Securities (the "Trust Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of _______, as the same may be amended from time to time (the "Trust
Agreement") and acquire Series ____% Subordinated Debentures due _________ (the
"Subordinated Debentures") from the Corporation; and

         WHEREAS, the Corporation is the issuer of the Subordinated Debentures.

         NOW, THEREFORE, in consideration of the purchase by each holder of the
Trust Securities, which purchase the Corporation hereby agrees shall benefit the
Corporation and which purchase the Corporation acknowledges will be made in
reliance upon the execution and delivery of this Agreement, the Corporation and
the Trust hereby agree as follows:

                                    ARTICLE I

         Section 1.01. Guarantee by the Corporation. Subject to the terms and
conditions hereof, the Corporation hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment, when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any indebtedness, expenses or liabilities of
the Trust, other than obligations of the Trust to pay to holders of any Trust
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Trust Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.

     Section 1.02. Term of Agreement. This Agreement shall terminate and be of
no further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be effective
or shall be reinstated, as the case may be, if at any time any holder of Trust
Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Trust Preferred Securities, under any Obligation, under the Trust
Guarantee Agreement dated the date hereof by the Corporation and Bank One Trust
Company, National Association, as guarantee trustee, or under this Agreement for
any reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.

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         Section 1.03. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.

         Section 1.04. No Impairment. The obligations, covenants, agreements and
duties of the Corporation under this Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

         (a)   the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;

         (b)   any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or

         (c)   the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Trust or any of the assets of
the Trust.

         There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, the Corporation with respect to the happening of any of
the foregoing.

         Section 1.05. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation and the Corporation waives any right or remedy
to require that any action be brought against the Trust or any other person or
entity before proceeding against the Corporation.

                                   ARTICLE II

         Section 2.01. Binding Effect. All guarantees and agreements contained
in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.

         Section 2.02. Amendment. So long as there remains any Beneficiary or
any Trust Preferred Securities are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such Beneficiary or to the holders
of the Trust Preferred Securities.

         Section 2.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), or by registered or certified mail, addressed as follows
(and if so given, shall be deemed given when mailed), to-wit:

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      SEMCO Capital Trust I
      c/o SEMCO Energy, Inc.
      405 Water Street
      Port Huron, Michigan 48061-5026
      Facsimile No.: (810) 989-4098
      Attention: Edric R. Mason, Jr.

      SEMCO Energy, Inc.
      405 Water Street
      Port Huron, Michigan 48061-5026
      Facsimile No.: (810) 989-4098
      Attention: Sherry L. Abbott

         Section 2.04. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.

         THIS AGREEMENT is executed as of the date and year first above written.

                               SEMCO ENERGY, INC.

                               By:
                                  ----------------------------------------------
                                 Name:
                                 Title:
                                       -----------------------------------------

                               SEMCO CAPITAL TRUST I

                               By:
                                  ----------------------------------------------
                                  Sebastian Coppola, as Administrative Trustee

                               By:
                                  ----------------------------------------------
                                  Edric R. Mason, Jr., as Administrative Trustee<PAGE>   1
                                                                   EXHIBIT 10.11

                                 TOM BROWN, INC.

                          1999 LONG TERM INCENTIVE PLAN

                                   I. PURPOSE

         The purpose of the TOM BROWN, INC. 1999 LONG TERM INCENTIVE PLAN (the
"Plan") is to provide a means through which TOM BROWN, INC., a Delaware
corporation (the "Company"), and its subsidiaries may attract able persons to
serve as directors, consultants, or advisors or to enter the employ of the
Company and its affiliates and to provide a means whereby those individuals upon
whom the responsibilities of the successful administration and management of the
Company and its affiliates rest, and whose present and potential contributions
to the welfare of the Company and its affiliates are of importance, can acquire
and maintain stock ownership, thereby strengthening their concern for the
welfare of the Company and its affiliates. A further purpose of the Plan is to
provide such individuals with additional incentive and reward opportunities
designed to enhance the profitable growth of the Company and its affiliates.
Accordingly, the Plan provides for granting Incentive Stock Options, options
that do not constitute Incentive Stock Options, Restricted Stock Awards,
Performance Awards, and Incentive Awards, or any combination of the foregoing,
as is best suited to the circumstances of the particular Employee, consultant,
advisor, or director as provided herein.

                                 II. DEFINITIONS

         The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:

         (a) "AFFILIATE" means any corporation, partnership, limited liability
company or partnership, association, trust or other organization which, directly
or indirectly, controls, is controlled by, or is under common control with, the
Company. For purposes of the preceding sentence, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any entity or organization, shall mean the
possession, directly or indirectly, of the power (i) to vote more than 50% of
the securities having ordinary voting power for the election of directors of the
controlled entity or organization, or (ii) to direct or cause the direction of
the management and policies of the controlled entity or organization, whether
through the ownership of voting securities or by contract or otherwise.

         (b) "AWARD" means, individually or collectively, any Option, Restricted
Stock Award, Performance Award or Incentive Award.

         (c) "BOARD" means the Board of Directors of the Company.

         (d) "CODE" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.

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         (e) "COMMITTEE" means a committee of the Board that is selected by the
Board as provided in Paragraph IV(a).

         (f) "COMMON STOCK" means the common stock, par value $0.10 per share,
of the Company, or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph XI.

         (g) "COMPANY" means Tom Brown, Inc., a Delaware corporation.

         (h) "CONSULTANT" means any person who is not an Employee and who is
providing advisory or consulting services to the Company or any Affiliate.

         (i) "DIRECTOR" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.

         (j) "EMPLOYEE" means any person (including a Director) in an employment
relationship with the Company or any Affiliate.

         (k) "FAIR MARKET VALUE" means, as of any specified date, the mean of
the high and low sales prices of the Common Stock reported on the stock exchange
composite tape on that date, or, if no prices are reported on that date, on the
last preceding date on which such prices of the Common Stock are so reported. In
the event Common Stock is not publicly traded at the time a determination of its
value is required to be made hereunder, the determination of its fair market
value shall be made by the Committee in such manner as it deems appropriate.

         (l) "HOLDER" means an Employee, Consultant, or Director who has been
granted an Award.

         (m) "IMMEDIATE FAMILY" means, with respect to a Holder, the Holder's
spouse, children, or grandchildren (including adopted and stepchildren and
grandchildren).

         (n) "INCENTIVE AWARD" means an Award granted under Paragraph X of the
Plan.

         (o) "INCENTIVE AWARD AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Incentive Award.

         (p) "INCENTIVE STOCK OPTION" means an incentive stock option within the
meaning of section 422 of the Code.

         (q) "1934 ACT" means the Securities Exchange Act of 1934, as amended.

         (r) "OPTION" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Options that
do not constitute Incentive Stock Options to purchase Common Stock.

         (s) "OPTION AGREEMENT" means a written agreement between the Company
and a Holder with respect to an Option.

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         (t) "PERFORMANCE AWARD" means an Award granted under Paragraph IX of
the Plan.

         (u) "PERFORMANCE AWARD AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Performance Award.

         (v) "PLAN" means the Tom Brown, Inc. 1999 Long Term Incentive Plan, as
amended from time to time.

         (w) "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

         (x) "RESTRICTED STOCK AWARD" means an Award granted under Paragraph
VIII of the Plan.

         (y) "RULE 16B-3" means SEC Rule 16b-3 promulgated under the 1934 Act,
as such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.

         (z) "STOCK APPRECIATION RIGHT" shall have the meaning assigned to such
term in Paragraph VII(d) of the Plan.

                  III. EFFECTIVE DATE AND DURATION OF THE PLAN

         The Plan shall become effective upon the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company within
twelve months thereafter. Notwithstanding any provision in the Plan, no Option
shall be exercisable and no Award shall vest or become satisfiable prior to such
stockholder approval. No further Awards may be granted under the Plan after ten
years from the date the Plan is adopted by the Board. The Plan shall remain in
effect (at least for the purpose of governing outstanding Awards) until all
Option Awards granted under the Plan have been exercised or expired, all
Restricted Stock Awards granted under the Plan have vested or been forfeited,
and all Performance Awards and Incentive Awards have been satisfied or have
terminated.

                               IV. ADMINISTRATION

         (a) COMPOSITION OF COMMITTEE. The Plan shall be administered by a
committee of, and appointed by, the Board, and such committee shall be comprised
solely of two or more outside Directors (within the meaning of the term "outside
directors" as used in section 162(m) of the Code and applicable interpretive
authority thereunder and within the meaning of "Non-Employee Director" as
defined in Rule 16b-3).

         (b) POWERS. Subject to the express provisions of the Plan, the
Committee shall have authority, in its sole discretion, to determine which
Employees, Consultants, or Directors shall receive an Award, the time or times
when such Award shall be made, whether an Incentive Stock Option or nonqualified
Option shall be granted, and the number of shares to be subject to each Option
or Restricted Stock Award, the number of shares subject to or the value of each
Performance Award, and the value of each Incentive Award. In making such
determinations, the Committee shall take into account the nature of the services
rendered by the respective Employees, Consultants, or

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Directors, their present and potential contribution to the Company's success and
such other factors as the Committee in its sole discretion shall deem relevant.

         (c) ADDITIONAL POWERS. The Committee shall have such additional powers
as are delegated to it by the other provisions of the Plan. Subject to the
express provisions of the Plan, this shall include the power to construe the
Plan and the respective agreements executed hereunder, to prescribe rules and
regulations relating to the Plan, and to determine the terms, restrictions and
provisions of the agreement relating to each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the
Committee to cause designated Options to qualify as Incentive Stock Options, and
to make all other determinations necessary or advisable for administering the
Plan. The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any agreement relating to an Award in the
manner and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.

                V. SHARES SUBJECT TO THE PLAN; GRANT OF OPTIONS;
                        GRANT OF RESTRICTED STOCK AWARDS

         (a) SHARES SUBJECT TO THE PLAN AND AWARD LIMITS. Subject to adjustment
in the same manner as provided in Paragraph XI with respect to shares of Common
Stock subject to Options then outstanding, the aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed 2,000,000
shares. Shares shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Award. To the extent that an
Award lapses, the rights of its Holder terminate, an Award is paid in cash or an
Award is settled in a manner such that all or some of the shares of Common Stock
covered by the Award are not issued to the Holder, any shares of Common Stock
subject to such Award shall again be available for the grant of an Award under
the Plan. Notwithstanding any provision in the Plan to the contrary, the maximum
number of shares of Common Stock that may be subject to Awards granted to any
one individual during the term of the Plan may not exceed 2,000,000 shares of
Common Stock (subject to adjustment in the same manner as provided in Paragraph
XI with respect to shares of Common Stock subject to Options then outstanding)
and the maximum value of any Performance Award granted to any one individual
during any calendar year may not exceed $500,000. The limitations set forth in
the preceding sentence shall be applied in a manner which will permit
compensation generated under the Plan to constitute "performance-based"
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Options that are canceled or repriced.

         (b) GRANT OF AWARDS. The Committee may from time to time grant Awards
to one or more Employees, Consultants, or Directors determined by it to be
eligible for participation in the Plan in accordance with the terms of the Plan.

         (c) STOCK OFFERED. Subject to the limitations set forth in Paragraph
V(a), the stock to be offered pursuant to the grant of an Award may be
authorized but unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Company. Any of such shares which remain
unissued and which are not subject to outstanding Awards at the termination of
the Plan shall cease to be subject to the Plan but, until termination

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of the Plan, the Company shall at all times make available a sufficient number
of shares to meet the requirements of the Plan.

                                 VI. ELIGIBILITY

         Awards may be granted only to persons who, at the time of grant, are
Employees, Consultants, or Directors. An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive Stock Option, an Option that is not an
Incentive Stock Option, a Restricted Stock Award, a Performance Award, an
Incentive Award, or any combination thereof.

                               VII. STOCK OPTIONS

         (a) OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant.

         (b) LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable
in whole or in such installments and at such times as determined by the
Committee.

         (c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. An Incentive Stock
Option may be granted only to an individual who is employed by the Company or
any parent or subsidiary corporation (as defined in section 424 of the Code) at
the time the Option is granted. To the extent that the aggregate Fair Market
Value (determined at the time the respective Incentive Stock Option is granted)
of Common Stock with respect to which Incentive Stock Options granted after 1986
are exercisable for the first time by an individual during any calendar year
under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be
treated as Options which do not constitute Incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of a
Holder's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Holder of such determination as
soon as practicable after such determination. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such individual
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary corporation,
within the meaning of section 422(b)(6) of the Code, unless (i) at the time such
Option is granted the option price is at least 110% of the Fair Market Value of
the Common Stock subject to the Option and (ii) such Option by its terms is not
exercisable after the expiration of five years from the date of grant. An
Incentive Stock Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable during the Holder's
lifetime only by such Holder or the Holder's guardian or legal representative.

         (d) OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. Each Option Agreement shall specify the effect of
termination of (i) employment, (ii) the consulting or advisory relationship, or
(iii) membership on the Board, as applicable, on the exercisability of the
Option. An Option Agreement

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may provide for the payment of the option price, in whole or in part, by the
delivery of a number of shares of Common Stock (plus cash if necessary) having a
Fair Market Value equal to such option price. Moreover, an Option Agreement may
provide for a "cashless exercise" of the Option by establishing procedures
satisfactory to the Committee with respect thereto. Further, an Option Agreement
may provide for the surrender of the right to purchase shares under the Option
in return for a payment in cash or shares of Common Stock or a combination of
cash and shares of Common Stock equal in value to the excess of the Fair Market
Value of the shares with respect to which the right to purchase is surrendered
over the option price therefor ("Stock Appreciation Rights"), on such terms and
conditions as the Committee in its sole discretion may prescribe. In the case of
any such Stock Appreciation Right that is granted in connection with an
Incentive Stock Option, such right shall be exercisable only when the Fair
Market Value of the Common Stock exceeds the price specified therefor in the
Option or the portion thereof to be surrendered. Finally, the Committee
(concurrently with the grant of an Option or subsequent to such grant) may, in
its sole discretion, provide in an Option Agreement respecting an Option that,
if the Holder pays the Option exercise price in shares of Common Stock, upon the
date of such payment a new option shall be granted under this Plan or under
another available plan and the number of shares of Common Stock subject to such
new option shall be equal to the number of shares of Common Stock tendered in
payment (plus the number of any shares of Common Stock respecting the exercised
Option retained (not in excess of the minimum required) to satisfy any tax
withholding obligations); provided that such new option shall not be exercisable
in any event after the original term of the exercised Option. The terms and
conditions of the respective Option Agreements need not be identical.

         (e) OPTION PRICE AND PAYMENT. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee but, subject to adjustment as provided in Paragraph XI shall not be
less than the Fair Market Value of a share of Common Stock on the date such
Option is granted. The Option or portion thereof may be exercised by delivery of
an irrevocable notice of exercise to the Company, as specified by the Committee.
The purchase price of the Option or portion thereof shall be paid in full in the
manner prescribed by the Committee. Separate stock certificates shall be issued
by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
any Option that does not constitute an Incentive Stock Option.

         (f) STOCKHOLDER RIGHTS AND PRIVILEGES. The Holder shall be entitled to
all the privileges and rights of a stockholder only with respect to such shares
of Common Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Holder's name.

         (g) OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Options and Stock Appreciation Rights may be granted under
the Plan from time to time in substitution for stock options held by individuals
employed by corporations who become Employees as a result of a merger or
consolidation or other business combination of the employing corporation with
the Company or any subsidiary.

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                          VIII. RESTRICTED STOCK AWARDS

         (a) FORFEITURE RESTRICTIONS TO BE ESTABLISHED BY THE COMMITTEE. Shares
of Common Stock that are the subject of a Restricted Stock Award shall be
subject to restrictions on disposition by the Holder and an obligation of the
Holder to forfeit and surrender the shares to the Company under certain
circumstances (the "Forfeiture Restrictions"). The Forfeiture Restrictions shall
be determined by the Committee in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of
one or more performance measures established by the Committee that are based on
(1) the price of a share of Common Stock, (2) the Company's earnings per share,
(3) the Company's market share, (4) the market share of a business unit of the
Company designated by the Committee, (5) the Company's sales, (6) the sales of a
business unit of the Company designated by the Committee, (7) the net income
(before or after taxes) of the Company or any business unit of the Company
designated by the Committee, (8) the cash flow return on investment of the
Company or any business unit of the Company designated by the Committee, (9) the
earnings before or after interest, taxes, depreciation, and/or amortization of
the Company or any business unit of the Company designated by the Committee,
(10) the economic value added, or (11) the return on stockholders' equity
achieved by the Company, (ii) the Holder's continued employment with the Company
for a specified period of time, (iii) the occurrence of any event or the
satisfaction of any other condition specified by the Committee in its sole
discretion, or (iv) a combination of any of the foregoing. The performance
measures may be subject to adjustment for specified significant extraordinary
items or events, and may be absolute, relative to one or more other companies,
or relative to one or more indexes, and may be contingent upon future
performance of the Company or any subsidiary, division, or department thereof by
or in which the Holder is employed during the performance period. Each
Restricted Stock Award may have different Forfeiture Restrictions, in the sole
discretion of the Committee.

         (b) OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to receive dividends with respect to Common Stock subject to a Restricted
Stock Award, to vote Common Stock subject thereto and to enjoy all other
stockholder rights, except that (i) the Holder shall not be entitled to delivery
of the stock certificate until the Forfeiture Restrictions have expired, (ii)
the Company shall retain custody of the stock until the Forfeiture Restrictions
have expired, (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
have expired, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of
the Restricted Stock Award. At the time of such Award, the Committee may, in its
sole discretion, prescribe additional terms, conditions or restrictions relating
to Restricted Stock Awards, including, but not limited to, rules pertaining to
the termination of employment or service as a Consultant or Director (by
retirement, disability, death or otherwise) of a Holder prior to expiration of
the Forfeitures Restrictions. Such additional terms, conditions or restrictions
shall be set forth in a Restricted Stock Agreement made in conjunction with the
Award.

         (c) PAYMENT FOR RESTRICTED STOCK. The Committee shall determine the
amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.

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         (d) COMMITTEE'S DISCRETION TO ACCELERATE VESTING OF RESTRICTED STOCK
AWARDS. The Committee may, in its discretion and as of a date determined by the
Committee, fully vest any or all Common Stock awarded to a Holder pursuant to a
Restricted Stock Award and, upon such vesting, all restrictions applicable to
such Restricted Stock Award shall terminate as of such date. Any action by the
Committee pursuant to this Subparagraph may vary among individual Holders and
may vary among the Restricted Stock Awards held by any individual Holder.
Notwithstanding the preceding provisions of this Subparagraph, the Committee may
not take any action described in this Subparagraph with respect to a Restricted
Stock Award that has been granted to a "covered Employee" (within the meaning of
Treasury Regulation section 1.162-27(c)(2)) if such Award has been designed to
meet the exception for performance-based compensation under section 162(m) of
the Code.

         (e) RESTRICTED STOCK AGREEMENTS. At the time any Award is made under
this Paragraph VIII, the Company and the Holder shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.

                             IX. PERFORMANCE AWARDS

         (a) PERFORMANCE PERIOD. The Committee shall establish, with respect to
and at the time of each Performance Award, the number of shares of Common Stock
subject to, or the maximum value of, the Performance Award and the performance
period over which the performance applicable to the Performance Award shall be
measured.

         (b) PERFORMANCE MEASURES. A Performance Award shall be awarded to a
Holder contingent upon future performance of the Company or any subsidiary,
division, or department thereof by or in which such Holder is employed during
the performance period. The Committee shall establish the performance measures
applicable to such performance prior to the beginning of the performance period;
provided such measures may be made subject to adjustment for specified
significant extraordinary items or events. The performance measures may be
absolute, relative to one or more other companies, or relative to one or more
indexes. The performance measures established by the Committee may be based upon
(i) the price of a share of Common Stock, (ii) the Company's earnings per share,
(iii) the Company's market share, (iv) the market share of a business unit of
the Company designated by the Committee, (v) the Company's sales, (vi) the sales
of a business unit of the Company designated by the Committee, (vii) the net
income (before or after taxes) of the Company or any business unit of the
Company designated by the Committee, (viii) the cash flow return on investment
of the Company or any business unit of the Company designated by the Committee,
(ix) the earnings before or after interest, taxes, depreciation, and/or
amortization of the Company or any business unit of the Company designated by
the Committee, (x) the economic value added, (xi) the return on stockholders'
equity achieved by the Company, or (xii) a combination of any of the foregoing.
The Committee, in its sole discretion, may provide for an adjustable Performance
Award value based upon the level of achievement of performance measures.

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         (c) AWARDS CRITERIA. In determining the value of Performance Awards,
the Committee shall take into account a Holder's responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate. The Committee, in its sole discretion, may provide for a reduction
in the value of a Holder's Performance Award during the performance period.

         (d) PAYMENT. Following the end of the performance period, the Holder of
a Performance Award shall be entitled to receive payment of an amount not
exceeding the number of shares of Common Stock subject to or the maximum value
of the Performance Award, based on the achievement of the performance measures
for such performance period, as determined by the Committee. Payment of a
Performance Award may be made in cash, Common Stock, or a combination thereof,
as determined by the Committee. Payment shall be made in a lump sum or in
installments as prescribed by the Committee. If a Performance Award covering
shares of Common Stock is to be paid in cash, such payment shall be based on the
Fair Market Value of the Common Stock on the payment date.

         (e) TERMINATION OF AWARD. A Performance Award shall terminate if the
Holder does not remain continuously in the employ or in service as a Consultant
or Director of the Company at all times during the applicable performance
period, except as may be determined by the Committee.

         (f) PERFORMANCE AWARD AGREEMENTS. At the time any Award is made under
this Paragraph IX, the Company and the Holder shall enter into a Performance
Award Agreement setting forth each of the matters contemplated hereby, and such
additional matters as the Committee may determine to be appropriate. The terms
and provisions of the respective Performance Award Agreements need not be
identical.

                               X. INCENTIVE AWARDS

         (a) INCENTIVE AWARDS. Incentive Awards are rights to receive shares of
Common Stock (or the Fair Market Value thereof), or rights to receive an amount
equal to any appreciation or increase in the Fair Market Value of Common Stock
over a specified period of time, which vest over a period of time as established
by the Committee, without satisfaction of any performance criteria or
objectives. The Committee may, in its discretion, require payment or other
conditions of the Holder respecting any Incentive Award.

         (b) AWARD PERIOD. The Committee shall establish, with respect to and at
the time of each Incentive Award, a period over which the Award shall vest with
respect to the Holder.

         (c) AWARDS CRITERIA. In determining the value of Incentive Awards, the
Committee shall take into account a Holder's responsibility level, performance,
potential, other Awards, and such other considerations as it deems appropriate.

         (d) PAYMENT. Following the end of the vesting period for an Incentive
Award (or at such other time as the applicable Incentive Award Agreement may
provide), the Holder of an Incentive Award shall be entitled to receive payment
of an amount, not exceeding the maximum value of the Incentive Award, based on
the then vested value of the Award. Payment of an Incentive Award may

                                       9

<PAGE>   10

be made in cash, Common Stock, or a combination thereof as determined by the
Committee. Payment shall be made in a lump sum or in installments as prescribed
by the Committee. Any payment to be made in cash shall be based on the Fair
Market Value of the Common Stock on the payment date. Cash dividend equivalents
may be paid during or after the vesting period with respect to an Incentive
Award, as determined by the Committee.

         (e) TERMINATION OF AWARD. An Incentive Award shall terminate if the
Holder does not remain continuously in the employ or in service as a Consultant
or Director of the Company at all times during the applicable vesting period,
except as may be otherwise determined by the Committee.

         (f) INCENTIVE AWARD AGREEMENTS. At the time any Award is made under
this Paragraph X, the Company and the Holder shall enter into an Incentive Award
Agreement setting forth each of the matters contemplated hereby, and such
additional matters as the Committee may determine to be appropriate. The terms
and provisions of the respective Incentive Award Agreements need not be
identical

                     XI. RECAPITALIZATION OR REORGANIZATION

         (a) NO EFFECT ON RIGHT OR POWER. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's or any
subsidiary's capital structure or its business, any merger or consolidation of
the Company or any subsidiary, any issue of debt or equity securities ahead of
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company or any subsidiary or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

         (b) SUBDIVISION OR CONSOLIDATION OF SHARES; STOCK DIVIDENDS. The shares
with respect to which Awards may be granted are shares of Common Stock as
presently constituted, but if, and whenever, prior to the expiration of an Award
theretofore granted, the Company shall effect a subdivision or consolidation of
shares of Common Stock or the payment of a stock dividend on Common Stock
without receipt of consideration by the Company, the number of shares of Common
Stock with respect to which such Award may thereafter be exercised or satisfied,
as applicable (i) in the event of an increase in the number of outstanding
shares shall be proportionately increased, and the purchase price per share
shall be proportionately reduced, and (ii) in the event of a reduction in the
number of outstanding shares shall be proportionately reduced, and the purchase
price per share shall be proportionately increased. Any factional share
resulting from such adjustment shall be rounded down to the next whole share.

         (c) RECAPITALIZATIONS AND CORPORATE CHANGES. If the Company
recapitalizes, reclassifies its capital stock, or otherwise changes its capital
structure (a "recapitalization"), the number and class of shares of Common Stock
covered by an Award theretofore granted shall be adjusted so that such Award
shall thereafter cover the number and class of shares of stock and securities to
which the Holder would have been entitled pursuant to the terms of the
recapitalization

                                       10
<PAGE>   11

if, immediately prior to the recapitalization, the Holder had been the holder of
record of the number of shares of Common Stock then covered by such Award. If
(i) the Company shall not be the surviving entity in any merger or consolidation
(or survives only as a subsidiary of an entity), (ii) the Company sells, leases
or exchanges or agrees to sell, lease or exchange all or substantially all of
its assets to any other person or entity, (iii) the Company is to be dissolved
and liquidated, (iv) any person or entity, including a "group" as contemplated
by Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control
(including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company's voting stock (based upon voting power), or
(v) as a result of or in connection with a contested election of Directors, the
persons who were Directors of the Company before such election shall cease to
constitute a majority of the Board (each such event is referred to herein as a
"Corporate Change"), no later than (x) ten days after the approval by the
stockholders of the Company of such merger, consolidation, reorganization, sale,
lease or exchange of assets or dissolution or such election of Directors or (y)
thirty days after a Corporate Change of the type described in clause (iv), the
Committee, acting in its sole discretion without the consent or approval of any
Holder, shall effect one or more of the following alternatives, which
alternatives may vary among individual Holders and which may vary among Options
held by any individual Holder: (1) accelerate the time at which Options then
outstanding may be exercised so that such Options may be exercised in full for a
limited period of time on or before a specified date (before or after such
Corporate Change) fixed by the Committee, after which specified date all
unexercised Options and all rights of Holders thereunder shall terminate, (2)
require the mandatory surrender to the Company by selected Holders of some or
all of the outstanding Options held by such Holders (irrespective of whether
such Options are then exercisable under the provisions of the Plan) as of a
date, before or after such Corporate Change, specified by the Committee, in
which event the Committee shall thereupon cancel such Options and the Company
shall pay (or cause to be paid) to each Holder an amount of cash per share equal
to the excess, if any, of the amount calculated in Subparagraph (d) below (the
"Change of Control Value") of the shares subject to such Option over the
exercise price(s) under such Options for such shares, (3) make such adjustments
to Options then outstanding as the Committee deems appropriate to reflect such
Corporate Change (provided, however, that the Committee may determine in its
sole discretion that no adjustment is necessary to Options then outstanding), or
(4) provide that the number and class of shares of Common Stock covered by an
Option theretofore granted shall be adjusted so that such Option shall
thereafter cover the number and class of shares of stock or other securities or
property (including, without limitation, cash) to which the Holder would have
been entitled pursuant to the terms of the agreement of merger, consolidation or
sale of assets and dissolution if, immediately prior to such merger,
consolidation or sale of assets and dissolution, the Holder had been the holder
of record of the number of shares of Common Stock then covered by such Option.

         (d) CHANGE OF CONTROL VALUE. For the purposes of clause (2) in
Subparagraph (c) above, the "Change of Control Value" shall equal the amount
determined in clause (i), (ii) or (iii), whichever is applicable, as follows:
(i) the per share price offered to stockholders of the Company in any such
merger, consolidation, sale of assets or dissolution transaction, (ii) the price
per share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the Fair Market Value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to

                                       11

<PAGE>   12

stockholders of the Company in any transaction described in this Subparagraph
(d) or Subparagraph (c) above consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.

         (e) OTHER CHANGES IN THE COMMON STOCK. In the event of changes in the
outstanding Common Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Paragraph XI, such Award and any agreement
evidencing such Award shall be subject to adjustment by the Committee at its
sole discretion as to the number and price of shares of Common Stock or other
consideration subject to such Award. In the event of any such change in the
outstanding Common Stock or distribution to the holders of Common Stock, the
aggregate number of shares available under the Plan and the maximum number of
shares that may be subject to Awards granted to any one individual may be
appropriately adjusted by the Committee, whose determination shall be
conclusive.

         (f) STOCKHOLDER ACTION. Any adjustment provided for in the above
Subparagraphs shall be subject to any required stockholder action.

         (g) NO ADJUSTMENTS UNLESS OTHERWISE PROVIDED. Except as hereinbefore
expressly provided, the issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not
for fair value, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.

                    XII AMENDMENT AND TERMINATION OF THE PLAN

         Subject to the last sentence of Paragraph III, the Board in its
discretion may terminate the Plan at any time. The Board shall have the right to
alter or amend the Plan or any part thereof from time to time; provided that no
change in any Award theretofore granted may be made which would impair the
rights of the Holder without the consent of the Holder, and provided, further,
that the Board may not, without approval of the stockholders, amend the Plan to
(a) increase the maximum aggregate number of shares that may be issued under the
Plan or (b) change the class of individuals eligible to receive Awards under the
Plan.

                                       12

<PAGE>   13

                               XIII MISCELLANEOUS

         (a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any
action of the Board or of the Committee shall be deemed to give an Employee,
Consultant, or Director any right to be granted an Option, a right to a
Restricted Stock Award, a right to a Performance Award or a right to an
Incentive Award, or any other rights hereunder except as may be evidenced by an
Award agreement duly executed on behalf of the Company, and then only to the
extent and on the terms and conditions expressly set forth therein. The Plan
shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of funds or assets to assure the
performance of its obligations under any Award.

         (b) NO EMPLOYMENT/MEMBERSHIP RIGHTS CONFERRED. Nothing contained in the
Plan shall (i) confer upon any Employee or Consultant any right with respect to
continuation of employment or of a consulting or advisory relationship with the
Company or any subsidiary or (ii) interfere in any way with the right of the
Company or any subsidiary to terminate his or her employment or consulting or
advisory relationship at any time. Nothing contained in the Plan shall confer
upon any Director any right with respect to continuation of membership on the
Board.

         (c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to
issue any Common Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933, as amended, and such other state and federal laws, rules
and regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules and regulations available for the
issuance and sale of such shares. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.

         (d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No Employee,
Consultant, Director, beneficiary or other person shall have any claim against
the Company or any subsidiary as a result of any such action.

         (e) RESTRICTIONS ON TRANSFER. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, (iii) with
respect to Option Awards other than Incentive Stock Options, if such transfer is
permitted in the sole discretion of the Committee, by transfer by a Holder to a
member of the Holder's Immediate Family, to a trust solely for the benefit of
the Holder and the Holder's Immediate Family, or to a partnership or limited
liability company whose only partners or shareholders are the Holder and members
of the Holder's Immediate Family, with the consent of the Committee, or (iv)
with the consent of the Committee.

                                       13

<PAGE>   14

         (f) SECTION 162(m). It is intended that the Plan comply fully with and
meet all the requirements of section 162(m) of the Code so that Options and
Performance Awards granted hereunder and, if determined by the Committee,
Restricted Stock Awards shall constitute "performance-based" compensation within
the meaning of such section. If any provision of the Plan would disqualify the
Plan or would not otherwise permit the Plan to comply with section 162(m) as so
intended, such provision shall be construed or deemed amended to conform to the
requirements or provisions of section 162(m); provided that no such construction
or amendment shall have an adverse effect on the economic value to a Holder of
any Award previously granted hereunder.

         (g) GOVERNING LAW. THE PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.

                                       14

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