Document:

s8exhibit41.htm

    Exhibit 4.1

     

    TECHNOLOGY
RESEARCH CORPORATION

    AMENDED
AND RESTATED

    2000
LONG TERM INCENTIVE PLAN

    

    SECTION
1

    GENERAL

     

    1.1           
Purpose.  The
Technology Research Corporation Amended and Restated 2000 Long Term Incentive
Plan (the “Plan”) has
been established, subject to the approval of stockholders, by Technology
Research Corporation (the “Company”) to (i) attract and
retain key management employees who are expected to make significant
contributions to the success of the Company; (ii) motivate such key employees,
by means of appropriate incentives, to achieve the Company’s long-range goals;
(iii) provide incentive compensation opportunities to key employees and
consultants that are competitive with those of other similar companies; (iv)
provide incentive awards to its directors; and (v) further align such key
employees’ and directors’ interests with those of the Company’s other
shareholders and thereby promote the long-term financial interests of the
Company, including the growth in value of the Company’s equity and enhancement
of long-term shareholder return.  Unless otherwise defined herein, all
capitalized terms are defined in Section 7 herein.

     

    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 Employees or Eligible
Directors, or certain designated consultants, those persons who will be granted
one or more Awards under the Plan and thereby become “Participants” or a “Participant” in the
Plan.  The Company may also designate any employee or consultant of a
Company subsidiary as eligible to be a Participant in the Plan.  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 each Participant.  Awards may be granted as alternatives to
or replacement of awards outstanding under the Plan, or any other plan or
arrangement of the Company or a Related Company (including a plan or arrangement
of a business or entity, all or a portion of which is acquired by the Company or
a Related Company).

     

    1.3           Name of
Plan.  The name of this
Plan shall be known as the Technology Research Corporation Amended and Restated
2000 Long Term Incentive Plan.

     

    1.4           Administration.  The
Plan shall be administered by the Committee, which shall be composed exclusively
of independent non-employee directors appointed by the Board.  The
Board may, at any time and at its complete discretion, remove any member of the
Committee and may fill any vacancy in the Committee.

     

    The Committee shall have full authority
to interpret the Plan; determine eligibility for and grant Awards; determine
what type or combination of types of Awards may be granted; determine the
numbers of Shares covered by each Award; determine, modify or waive the terms
and conditions of any Award (which need not be identical); prescribe forms,
rules and procedures (which it may modify or waive); provide Awards to employees
of subsidiary corporations or non-U.S. citizens that are employed by the Company
or a Related Company; determine whether, to what extent and under what
circumstances Awards may be settled, paid or exercised in cash, shares, other
securities, other Awards, or other property, or cancelled, forfeited or
suspended; determine whether a transaction or event should be treated as a
Change of Control, as well as the effect of a Change of Control; and otherwise
do all things necessary to implement the Plan.  Notwithstanding the
preceding sentence, all Awards made to non-employee directors shall be
authorized by the Board.

     

    1.5           Award
Modifications.  The Committee may modify, change, amend or
cancel any Award to correct an administrative error or in recognition of unusual
or nonrecurring events affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan. The Committee may also
temporarily suspend Awards pursuant to any blackout period that it deems
necessary or advisable in its sole discretion, to comply with tax and securities
laws and to comply with changes of law and accounting standards. The Board may
also correct any defect, omission or inconsistency in the Plan or in any Award
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective, and the full Board may exercise any of the Committee’s
authority under the Plan.

     

    In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m),
the Board may modify the terms of the Plan or may create one or more subplans,
in each case on such terms as it deems necessary or appropriate; provided,
however, that no such action by the Board shall increase the total number of
Shares issuable hereunder.

     

    1.6           Procedures.  The
Committee may act by a majority of its members then in office.  It
also may allocate responsibilities and powers among its members to the extent
permitted by applicable law and the listing standards of the Nasdaq Stock
Market.

     

    1.7           Delegation
of Certain Responsibilities.  The Committee may, subject to the
terms of the Plan and applicable law, appoint such agents as it deems necessary
or advisable for the proper administration of the Plan under this Section 1,
provided, however, that except as provided below, the Committee may not delegate
its authority to grant Awards under the Plan or to correct errors, omissions or
inconsistencies in the Plan.  The Committee may delegate to the
Company’s Chief Executive Officer and/or to other officers of the Company its
authority under this Section 1, provided that such delegation shall not extend
to the grant of Awards or the exercise of discretion with respect to Awards to
Participants who, at the time of such action, are (a) “covered employees” within
the meaning of Section 162(m) of the Code or (b) officers of the Company or its
subsidiaries who are subject to the reporting requirements of Section 16(a) of
the Exchange Act.  All authority delegated by the Committee under this
Section 1 shall be exercised in accordance with the provisions of the Plan and
any guidelines for the exercise of such authority that may from time to time be
established by the Committee.

     

    1.8           Award
Agreements.  The terms and conditions of each Award, as
determined by the Committee, shall be set forth in a written Award agreement,
which shall be delivered to the Participant receiving such Award as promptly as
is reasonably practicable following the grant of such Award.  The
Award’s effectiveness will not be dependent on any signature unless specifically
so provided in the Award agreement.  Awards may include a vesting
period.  However, vesting may accelerate in the event of a Change of
Control, death, Disability or retirement or other event, as specified in the
Award agreement.  The Company makes no representation or warranty that
any Award granted under the Plan is exempt or complies with Section 409A of the
Code and makes no undertakings to ensure or preclude that Section 409A will
apply to any Awards.

     

    1.9           Conditions
on Awards.  The Committee shall have the discretion with
respect to any Award granted under the Plan to establish upon its grant
conditions under which (i) the Award may be later forfeited, canceled,
rescinded, suspended, withheld or otherwise limited or restricted; or (ii) gains
realized by the grantee in connection with an Award or an Award’s exercise may
be recovered, provided that such conditions and their consequences
are:

     

    (a)           clearly
set forth in the grant agreement or other grant document; and

     

    (b)           fully
compliant with applicable laws.

     

    The Committee shall also be authorized
to impose conditions that include, without limitation, requiring that the
awardee refrain from undertaking actions which constitute a conflict of interest
with the Company, or are prejudicial to the Company’s interests, or are in
violation of any non-compete agreement or obligation, any confidentiality
agreement or obligation, the Company’s applicable policies, its code of ethics
(as in effect from time to time), or the terms and conditions of employment
under an applicable employment or contractor agreement.

     

    The Committee shall also be authorized
to impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any shares of common stock issued as
a result of or under an Award, including, without limitation, (i) restrictions
under an insider trading policy and (ii) restrictions as to the use of a
specified brokerage firm for such resales or other transfers.

     

    1.10           Effect of
Committee’s Decision.  All
determinations, interpretations and constructions made by the Committee in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

     

    1.11           Non-exclusivity
of this Plan.  This Plan shall
not limit the power of the Company or any Related Company to adopt other
incentive arrangements including, for example, the grant or issuance of stock
options, stock or other equity-based rights under other plans or compensation
arrangements approved by the Company.

     

    1.12           Unfunded
Plan. This Plan
shall be unfunded.  Although bookkeeping accounts may be established
with respect to Participants, any such accounts will be used merely as a
convenience.  The Company shall not be required to segregate any
assets on account of this Plan, the grant of Awards, or the issuance of
Shares.  The Company shall not be deemed to be a trustee of stock or
cash to be awarded under this Plan.  Any obligations of the Company to
any Participant shall be based solely upon contracts entered into under this
Plan, such as Award agreements.  No such obligations shall be deemed
to be secured by any pledge or other encumbrance on any assets of the
Company.  Neither the Company nor the Committee shall be required to
give any security or bond for the performance of any such
obligations.

     

    SECTION
2

    OPTIONS

     

    2.1           Definitions.  The
grant of an “Option”
entitles the Participant to purchase Shares at an exercise price established by
the Committee.  Options granted under the Plan may be either Incentive
Stock Options or Non-Qualified Stock Options, as determined in the discretion of
the Committee.  An “Incentive Stock Option” is an
Option that is intended to satisfy the requirements applicable to an “incentive
stock option” described in Section 422(b) of the Code.  A “Non-Qualified Option” 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.

     

    2.2           Exercise
Price.  The “Exercise Price” of each Option
granted under the Plan shall be established by the Committee at the time the
Option is granted and shall not be less than ONE HUNDRED PERCENT (100%) of the
Fair Market Value of a Share as of the Pricing Date.  For purposes of
the preceding sentence, the “Pricing Date” shall be the
date on which the Option is granted, except that the Committee may provide that:
(i) the Pricing Date is the date on which the recipient is hired or promoted (or
similar event) if the grant of the Option occurs not more than ninety (90) days
after the date of such hiring, promotion or other event; and (ii) if an Option
is granted in tandem with, or in substitution for, an outstanding Award, the
Pricing Date shall be the date of grant of such outstanding Award.  In
the case of any optionholder owning more than ten percent of the voting power of
all classes of stock of the Company, any Incentive Stock Option must include an
exercise price not less than ONE HUNDRED TEN PERCENT (110%) of the Fair Market
Value of the Shares on the Pricing Date).  In no event may any Option
granted under the Plan be amended, other than pursuant to Section 4.2, to
decrease the exercise price thereof, be cancelled in conjunction with the grant
of any new Option or Award with a lower exercise price, or otherwise be subject
to any action that would be treated, for accounting purposes, as a “repricing”
of such Option, unless such amendment, cancellation, or action is approved by
the stockholders of the Company.

     

    2.3           Expiration
Date.  The “Expiration Date” with respect
to an Option means the date the Option is deemed to expire, as determined by the
Committee at the time of the grant; provided, however, that the Expiration Date
with respect to any Option shall not be later than the earliest to occur
of:

     

    (a)           the
ten-year anniversary of the date on which the Option is granted;

     

    (b)           if
the Participant’s date of termination occurs by reason of death or Disability,
the one-year anniversary of such date of termination;

     

    (c)           if
the Participant’s date of termination occurs by reason of retirement, the
three-year anniversary of such date of termination;

     

    (d)           if
the Participant’s date of termination occurs for reasons other than retirement,
death or Disability, the 90-day anniversary of such date of termination;
subject, however, to the terms of the applicable option agreement approved by
the Committee;

     

    (e)           if
the Participant dies while the Option is otherwise exercisable, the Expiration
Date may be later than the dates set forth above, provided that it is not later
than the first anniversary of the date of death.  Notwithstanding the
foregoing provisions of this subsection 2.3, the Committee shall be authorized
to extend the Expiration Date for any non-qualified stock options granted under
the Plan; subject, however, to the terms of the applicable option agreement
approved by the Committee.

     

    2.4           Settlement
of Award.  The distribution of Shares following exercise of an
Option shall be subject to such conditions, restrictions and contingencies as
the Committee may establish.

     

    2.5           Other
Restrictions.  Incentive Stock
Options and Non-Qualified Stock Options may be granted under the Plan in such
numbers and on such terms and conditions as the Committee shall determine,
provided that such options shall comply with and be subject to the following
terms and conditions:

     

    (a)           Annual
Grant Limitation.  No Participant shall be granted an Incentive
Stock Option to the extent that the aggregate Fair Market Value of Shares made
subject to such option (determined as of the date such option is granted) which
are exercisable for the first time by an option holder during any one calendar
year exceeds the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000), or such other
limit as may be set by applicable law (the “Limitation
Amount”).  Incentive Stock Options granted under the Plan and
all other plans of the Company or affiliated entity shall be aggregated for
purposes of determining whether the Limitation Amount has been
exceeded.  The Committee may impose such conditions as it deems
appropriate on an Incentive Stock Option to ensure that the foregoing
requirement is met.  If any Incentive Stock Options that are granted
under the Plan have an aggregate Fair Market Value that exceeds the Limitation
Amount, the excess Options (according to the order in which they were granted)
will be treated as Non-Qualified Stock Options to the extent permitted by
law.

     

    (b)           Option
Agreement.  Options granted under the Plan shall be evidenced
by a written option agreement stating the number of Shares capable of being
purchased upon its exercise and otherwise in such form as the Committee may
periodically approve and containing such terms and conditions, including the
period of exercise and whether in installments or otherwise, as shall be
contained therein, which need not be the same for all options.

     

    (c)           Date of
Grant.  Subject to Section 2.2 above, the date on which an
option grant is approved by the Committee shall be considered the date on which
such option is granted (the “Date of Grant”), and shall be
reflected in the option agreement.  All options under this Plan shall
be granted within 10 years of the date this Amended and Restated Plan is
adopted.

     

    (d)           Option
Exercise.  All options granted under the Plan become
exercisable at such times and in such installments (which may be cumulative) as
the Committee shall provide in the terms of each individual
option.  All Options that have become exercisable from time to time
may be exercised in whole or in part in accordance with the terms of the
applicable option agreement; provided, however, that the Committee shall be
authorized to require that any partial exercise be with respect to a minimum
number of Shares.

     

    (e)           Forfeiture
or Exercise of Option.  In the event that a Participant ceases
employment with the Company due to retirement, death, Disability or any other
reason, all options shall be forfeited or exercised, as follows:

     

    (1)           In
the event of a Participant’s termination of employment for reasons other than
retirement, cause, death or Disability, any options that are not vested shall be
forfeited in accordance with the terms of each Option Agreement and any Vested
Option shall be exercised before the 90-day anniversary of the date of
termination (or such period of exercise that the terms of the applicable option
agreement may permit).

     

    (2)           Upon
the Disability of a Participant, the Participant’s Vested Options shall be
exercisable within one year (or such shorter period as the Code or the period of
exercise that the terms of the applicable Option Agreement may permit) of the
Participant’s date of Disability.  Any non-vested Options will
continue to be eligible to vest as scheduled during the period the Participant
remains disabled and may be exercised at any time within the one year period
after the vesting date.

     

    (3)           If
the Participant dies while in the employment of the Company, the Participant’s
estate, personal representative, or designated beneficiary shall have the right
to exercise such Vested Options within one year of the Participant’s death (or
such shorter period as the Code or period of exercise that the terms of the
applicable option agreement may permit).

     

    (4)           Upon
the retirement of a Participant, the Participant’s Vested Options shall be
exercisable within three years (or such shorter period as the Code or period of
exercise that the terms of the applicable option agreement may permit) of the
Participant’s date of retirement.

     

    (5)           Upon
the termination of a Participant for “cause”, as defined in the applicable
Option Agreement, all Options will terminate.

     

    (f)           Mechanics
of Exercise.  A person entitled to exercise any portion of an
option granted under the Plan may exercise the same at any time, either in whole
or in part, by delivering written notice of exercise to the office of the
Secretary of the Company or to such other location as may be designated by the
Committee, specifying therein the number of Shares with respect to which the
option is being exercised, which notice shall be accompanied by payment in full
of the purchase price of the Shares being acquired.  If any adjustment
has been effected so as to establish a right by an optionholder to acquire a
fractional share, such fraction shall be rounded upward to the next whole
number.

     

    (g)           Payment
of Exercise Price.  The Committee may determine, in its sole
discretion, the required or permitted forms of payment, subject to the
following: (i) payment may be made wholly or partly in cash; (ii) through the
delivery of Shares which have a fair market value equal to the exercise price,
provided that such shares have been held by the Participant for such period, if
any, as may be required from time to time by the Committee in order to satisfy
applicable generally accepted accounting principles; (iii) by delivery of an
unconditional and irrevocable undertaking by a third party to deliver promptly
to the Company sufficient funds to pay the exercise price and any tax
withholding resulting from such exercise through a “cashless exercise”
arrangement which permits the Participant to simultaneously exercise an option
and sell the Shares thereby acquired and enable the third party to use the
proceeds from such sale as payment for the exercise price of such option to the
extent permitted by law; (iv) the withholding of Shares otherwise receivable
upon settlement of the Award in payment of the exercise price, plus the amount
of any withholding taxes, thereby issuing the Participant the net amount of
Shares after such deductions; or (v) by any combination of the foregoing
permissible forms of payment.

     

    In no
event shall a promissory note or other form of deferred consideration constitute
a permissible form of payment.  If the Company extends or arranges for
the extension of credit to a Participant under a cashless exercise procedure, no
officer or director may participate in that cashless exercise
procedure.

     

    (h)           Investment
Purpose.  Unless the Committee chooses to register or qualify
the Shares under the Securities Act of 1933, as amended (the “Act”), each option is granted
on the express condition that the purchase of Shares upon an exercise thereof
shall be made for investment purposes only and not with a view to their resale
or further distribution unless such Shares, at the time of their issuance and
delivery, are registered under the Act, or, alternatively, at some time
following such issuance their resale is determined by counsel for the Company to
be exempt from the registration requirements of the Act and of any other
applicable law, regulation or ruling.  Any Shares so registered shall
be promptly listed with each securities exchange through which any class of the
Company’s capital stock or other securities are traded.

     

    (i)           Legal
Conditions on Delivery of Shares.  The Company will not be
obligated to deliver any Shares pursuant to the Plan or to remove any
restrictions from Shares previously delivered under the Plan until the Company’s
counsel has approved all legal matters in connection with the issuance and
delivery of such Shares; if the Company’s Shares are at the time of delivery
listed on any stock exchange or national market system, the Shares to be
delivered have been listed or authorized to be listed on such exchange or system
upon official notice of issuance; and all conditions of the Award have been
satisfied or waived.  If the sale of Shares has not been registered
under the Act, the Company may require, as a condition to exercise of the Award,
such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act.  The Company may require
that any certificates evidencing Shares issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such
Shares.

     

    (j)           Acceleration.  The
Committee shall be authorized to accelerate the exercise date of all or any part
of the options granted to a Participant under the Plan.

     

    (k)           Vesting
and Exercisability.  Except as otherwise provided herein, all
Options shall be vested and exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Committee and set forth
in the Option Agreement.

     

    SECTION
3

    OTHER STOCK
AWARDS

     

    3.1           Definition.  Shares
of “restricted stock” are actual Shares issued to a Participant, evidenced by
registration in the name of the Participant and shall reference the terms,
conditions, and restrictions applicable to such Award.

     

    3.2           Restricted
Stock Awards.  Each Stock Award or grant of restricted stock
shall be subject to such conditions, restrictions and contingencies as the
Committee shall determine.  These may include minimum vesting or
service requirements, the achievement of certain Performance Measures, or a
combination of continued service and performance vesting
criteria.  The Committee may designate a single goal criterion or
multiple goal standard  for performance measurement purposes, with the
measurement based on individual or Company performance as compared with that of
competitive companies, all at the discretion of the Committee.  Each
such grant or sale may constitute an immediate transfer of the ownership of
common shares to the participant in consideration of the performance of
services, entitling such participant to voting, dividend and other ownership
rights, but subject to the substantial risk of forfeiture and restrictions on
transfer hereinafter referred to.

     

    3.3           Other
Terms and Conditions for Stock Awards.  If determined by the
Committee, any Shares granted to a Participant under a Stock Award shall be
represented by a registration in the name of the Participant; provided, however,
that:

     

    (a)           the
Participant shall not be entitled to delivery of the stock certificate until any
applicable vesting period during which certain restrictions established by the
Committee shall have expired;

     

    (b)           the
Company may either issue Shares subject to such restrictive legends and/or
stop-transfer instructions as it deems appropriate or provide for retention of
custody of the Shares during the applicable restriction period or vesting period
imposed by the Committee under an Award;

     

    (c)           the
Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the Shares during the applicable restriction period or vesting
period, except that it may be transferred by assignment by the Participant to
the extent provided in the applicable stock award agreement;

     

    (d)           a
breach of the terms and conditions established by the Committee with respect to
the Stock Award shall cause a forfeiture of the Stock Award, and any dividends
withheld thereon;

     

    (e)           notwithstanding
the foregoing, the Committee may provide in the applicable Award that no Shares
be issued until the vesting or restriction period has lapsed and further
determine whether the Shares will be issued in escrow and/or be legended and
subject to restrictions including the forfeiture of all or a part of the
Shares;

     

    (f)           Each
such grant will provide that the Stock Award covered by such grant or sale will
be subject to a “substantial risk of forfeiture” within the meaning of Section
83 of the Code for a period of not less than one year to be determined by the
Committee at the date of grant and may provide for the earlier lapse of such
substantial risk of forfeiture in the event of a Change of Control;

     

    (g)           Each
such grant will provide that during the period for which such substantial risk
of forfeiture is to continue, the transferability of the Stock Award will be
prohibited or restricted in the manner and to the extent prescribed by the
Committee at the date of grant (which restrictions may include, without
limitation, rights of repurchase or first refusal in the Company or provisions
subjecting the Stock Award to a continuing substantial risk of forfeiture in the
hands of any transferee);

     

    (h)           Any
Stock Award may specify management objectives that, if achieved, will result in
termination or early termination of the restrictions applicable to such Stock
Award.  Each grant may specify in respect of such management
objectives a minimum acceptable level of achievement and may set forth a formula
for determining the number of shares on which restrictions will terminate if
performance is at or above the minimum level, but fails short of full
achievement of the specified management objectives;

     

    (i)           Any
such grant may require that any or all dividends or other distributions paid
thereon during the period of such restrictions be automatically deferred and
reinvested in additional Shares, which may be subject to the same restrictions
as the underlying award; and

     

    (j)           Each
grant of restricted stock will be evidenced by an evidence of award and will
contain such terms and provisions, consistent with this Plan, as the Committee
may approve.  Unless otherwise directed by the Committee, all
certificates representing shares of restricted stock will be held in custody by
the Company until all restrictions thereon will have lapsed, together with a
stock power or powers executed by the Participant in whose name such
certificates are registered, endorsed in blank and covering such
Shares.

     

    3.4           Payment
for Stock Award.  A Participant shall not be required to make
any payment for a Stock Award unless the Committee so requires.

     

    3.5           Forfeiture
Provisions.  In the event that a Participant terminates
employment before the vesting period or restriction period has been met or has
lapsed in accordance with the terms of an Award, such Stock Award will be
forfeited; provided, however, that the Committee may provide for the proration
or full payout of a Stock Award in the event of:

     

    (a)           a
termination of employment because of normal retirement;

     

    (b)           consent
of the Committee;

     

    (c)           death;

     

    (d)           total
and permanent Disability, as determined by the Committee; or

     

    (e)           a
Change of Control, all subject to any other conditions as the Committee may
determine or provide in an applicable Stock Award agreement.

     

    3.6           Acceleration.  The
Committee shall have the discretionary power to accelerate the date on which
restrictions lapse with respect to any Stock Award that has been outstanding for
at least one year.

     

    3.7           Performance
Shares.  The Committee may
also authorize the granting of Performance Shares that will become payable to a
Participant upon achievement of specified management objectives.  Each
such grant may utilize any or all of the authorizations, and will be subject to
all of the requirements, contained in the following provisions:

     

    (a)           Number of
Shares.  Each grant will
specify the number of Performance Shares to which it pertains, which number may
be subject to adjustment to reflect changes in compensation or other factors;
provided, however, that no such adjustment will be made in the case of a
Participant where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code.

     

    (b)           Performance
Period.  The performance
period with respect to each Performance Share will be such period of time (not
less than two years), commencing with the date of grant as will be determined by
the Committee at the time of grant which may be subject to earlier lapse or
other modifications in the event of a Change of Control.

     

    (c)           Performance
Measures.  Any grant of
Performance Shares will specify management objectives which, if achieved, will
result in payment or early payment of the award, and each grant may specify in
respect of such specified management objectives a minimum acceptable level of
achievement and will set forth a formula for determining the number of
Performance Shares that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified management
objectives.  The grant of Performance Shares will specify that, before
the Performance Shares will be earned and paid, the Committee must certify that
the management objectives have been satisfied.

     

    (d)           Payment
of Award.  Each grant will
specify the time and manner of payment of Performance Shares that have been
granted.  Any grant may specify that the amount payable with respect
thereto may be paid by the Company in cash, in common shares or in any
combination thereof and may either grant to the Participant or retain in the
Committee the right to elect among those alternatives.

     

    (e)           Maximum
Award.  Any grant of
Performance Shares may specify that the amount payable with respect thereto may
not exceed a maximum specified by the Committee on the date of
grant.

     

    (f)           Dividend
Payments.  The Committee
may, at or after the date of grant of Performance Shares, provide for the
payment of dividend equivalents to the holder thereof on either a current or
deferred or contingent basis, either in cash or in additional
Shares.

     

    (g)           Award
Agreement.  Each grant of
Performance Shares will be evidenced by an award and will contain such other
terms and provisions, consistent with this Plan, as the Committee may
approve.

     

    3.8           Other
Awards.

     

    (a)           Discretionary
Awards.  The Committee
may, subject to limitations under applicable law, grant to any Participant such
other awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, the Company’s Shares or
factors that may influence the value of such Shares, including, without
limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Shares, purchase rights for Shares, awards with
value and payment contingent upon performance of the Company or specified
subsidiaries, affiliates or other business units thereof or any other factors
designated by the Committee, and awards valued by reference to the book value of
Shares or the value of securities of, or the performance of specified
subsidiaries or affiliates or other business units of the
Company.  The Committee shall determine the terms and conditions of
such awards.  Shares delivered pursuant to an award in the nature of a
purchase right granted under this Section 3.8 shall be purchased for such
consideration, paid for at such time, by such methods, and in such forms,
including, without limitation, cash, common shares, other awards, notes or other
property, as the Committee may determine.

     

    (b)           Cash
Awards Tied to Share Performance.  Cash awards that
are granted as a stock performance based Award, as an element of or supplement
to any other award granted under this Plan, may also be granted pursuant to this
Section of this Plan.

     

    (c)           Bonus or
Other Awards.  The Committee may
grant Shares as a bonus, or may grant other awards in lieu of obligations of the
Company or a subsidiary to pay cash or deliver other property under this Plan or
under other plans or compensatory arrangements, subject to such terms as shall
be determined by the Committee.

     

    3.9           Escrow of
Stock Certificates.  To enforce any restrictions on Award
Shares, the Committee may require their holder to deposit the certificates
representing Award Shares, with stock powers or other transfer instruments
approved by the Committee endorsed in blank, with the Company or an agent of the
Company to hold in escrow until the restrictions have lapsed or
terminated.  The Committee may also cause a legend or legends
referencing the restrictions to be placed on the certificates.

     

    SECTION
4

    OPERATION AND
ADMINISTRATION

     

    4.1           Effective
Date.   The Plan was initially approved by the Board of
Directors on March 24, 2000 and became effective upon approval of the
stockholders in August, 2000.  This Amended and Restated Plan shall be
effective as of June 24, 2008, subject to approval of the Company’s shareholders
at its 2008 annual meeting (the “Effective
Date”).  No Awards or grants may be made after the Plan
termination date of June 24, 2018, unless terminated sooner by the Company’s
Board of Directors pursuant to Section 6 herein.  Any Awards granted
prior to the date of the termination of the Plan shall remain in effect as long
as any Awards under it are outstanding; provided, however, that, to the extent
required by the Code, no Incentive Stock Options may be granted under the Plan
on a date that is more than ten years from the date the Plan is adopted or, if
earlier, the date the Plan is approved by shareholders.

     

    4.2           Limits on
Award Under the Plan.

     

    (a)           Number of
Shares.  In its amended and restated form, a maximum of five
hundred thousand (500,000) additional shares may be awarded under the Plan. The
total number of shares that are authorized and available for issuance under both
the original 2000 Long Term Incentive Plan and the Amended and Restated 2000
Long Term Incentive Plan is 1.6 million shares (1.1 million shares under the
original plan  plus 0.5 million shares under the Amended and Restated
Plan). As of June 24, 2008, subject to approval of the Company’s shareholders at
its 2008 annual meeting, a maximum of six hundred thirty six thousand five
hundred (636,500) Shares will be available for issuance and may be delivered in
satisfaction of Awards under both the original and the Amended and Restated
Plan, including the sum of one hundred thirty six thousand five hundred Shares
subject to outstanding Awards and Shares that remain available for issuance
under the original 2000 Long Term Incentive Plan.  Out of the six
hundred thirty six thousand five hundred Shares that will be available for
issuance under the Amended and Restated Plan, not more than five hundred fifty
thousand (550,000) Shares may be issued as Incentive Stock Options, subject to
adjustments provided for in Section 4.2(f) below relating to changes in the
capitalization of the Company.  No more than one hundred fifty
thousand (150,000) Shares of the Company’s common stock may be granted as
Restricted Stock Awards under the Plan.

     

    For
purposes of the Plan, Shares that have been forfeited, expired or canceled in
accordance with the terms of the applicable Award, and any Shares tendered in
satisfaction of the exercise price or withheld by the Company to satisfy tax
withholding requirements or as a net exercise payment procedure shall not be
considered to have been delivered under the Plan  and shall be
eligible for issuance under the Plan.  The number of Shares delivered
under an Award shall be determined net of any previously acquired Shares
tendered by the Participant in payment of the exercise price or of withholding
taxes.  Any Awards that are valued by reference to the Company’s
Common Stock and may be settled in equivalent cash value will count as shares
delivered to the same extent as if the Award were settled in
Shares.

     

    Any
Shares covered by an Award granted under the Plan shall not be counted as used
unless and until they are actually issued and delivered to a
Participant.  If any Shares or Awards are repurchased by the Company
prior to vesting, the Shares not acquired under such Award shall revert to and
again become available for issuance under the Plan.  Any Shares that
are issued by the Company, and any awards that are granted by, or become
obligations of, the Company, through the assumption by the Company or an
affiliate of, or in substitution for, outstanding awards previously granted by
an acquired company shall not be counted against the Shares available for
issuance under the Plan.

     

    (b)           Type of
Shares.  Shares delivered by the Company under the Plan may be
authorized but unissued Shares or previously issued Shares acquired by the
Company and held in treasury.  No fractional Shares will be delivered
under the Plan.

     

    (c)           Forfeiture
of Options.  Any Shares granted under the Plan that are
forfeited because of the failure to meet an Award contingency or condition shall
again be available for delivery pursuant to new Awards granted under the
Plan.  To the extent any Shares covered by an Award are not delivered
to a Participant or beneficiary because the Award is forfeited or canceled, such
Shares shall not be deemed to have been delivered for purposes of determining
the maximum number of Shares available for delivery under the Plan.

     

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

     

    (e)           Substitution
of Shares.  Shares delivered under the Plan in settlement,
assumption or substitution of outstanding awards (or obligations to grant future
awards) under the plans or arrangements of another entity shall not reduce the
maximum number of Shares available for delivery under the Plan, to the extent
that such settlement, assumption or substitution results from the Company or a
Related Company acquiring another entity (or an interest in another
entity).

     

    (f)           Adjustment
of Number of Shares.  In the event of a corporate transaction
involving the Company (including, without limitation, any stock dividend,
forward or reverse stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or
exchange of Shares), then (A) the number of Shares reserved for issuance under
this Plan, (B) the exercise price, base price or redemption price applicable to
outstanding Awards, and (C) the number of Shares subject to outstanding Awards
shall be proportionately adjusted, subject to any required action by the Board
or the stockholders of the Company and compliance with applicable
law.  Fractions of a Share will not be issued but will be paid in cash
at the fair market value of such fraction of a share or will be rounded down to
the nearest whole share, as determined by the Committee in its sole
discretion.  Action by the Committee may include adjustment of: (i)
the number and kind of Shares which may be delivered under the Plan; (ii) the
number and kind of Shares subject to outstanding Awards; and (iii) the exercise
price of outstanding Options; as well as any other adjustments that the
Committee determines to be equitable.

     

    The
Committee, in its sole discretion, may also make appropriate adjustments in the
terms of any Awards under the Plan to reflect or related to such changes or
distributions and to modify any other terms of outstanding Awards, including
modifications of performance goals and changes in the length of performance
periods.  Any adjustment of any Options under this Section 4.2 shall
be made in a manner so as not to constitute a modification within the meaning of
Section 424(h)(3) of the Code and regulations promulgated under Section 409A of
the Code.  The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under the
Plan.  Subject to the provisions of Section 6, without affecting the
number of Shares reserved or available hereunder, the Committee may authorize
the issuance or assumption of benefits under this Plan in connection with any
merger, consolidation, acquisition of property or stock, or reorganization upon
such terms and conditions as it may deem appropriate, subject to compliance with
the rules under Section 424 and 409A of the Code, where applicable.

     

    (g)           Vesting.  Without
limiting the generality of Section 1.4, the Committee may determine the time or
times at which an Award will vest (i.e., become free of forfeiture restrictions)
or become exercisable and the terms on which an Award requiring exercise will
remain exercisable.

     

    4.3           Limit on
Distribution.  Distribution of Shares or other amounts under
the Plan shall be subject to the following:

     

    (a)           Compliance
with Securities Laws.  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 Act, and the applicable requirements
of any securities exchange or similar entity).

     

    (b)           Issuance
Without Certificates.  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.

     

    4.4           Payment
Shares. Subject to the overall limitation on the number of Shares that
may be delivered under the Plan, the Committee may use available Shares 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 Related Company,
including the plans and arrangements of the Company or a Related Company
acquiring another entity (or an interest in another entity).

     

    4.5           Transferability.
Except as otherwise provided by the Committee, Awards under the Plan are not
transferable except as designated by the Participant by will or by the laws of
descent and distribution or pursuant to a domestic relations order entered by a
court of competent jurisdiction.  Notwithstanding anything in this
Section to the contrary, the Participant may transfer an option granted under
this Plan to or for the benefit of his or her family members (including, without
limitation, to a trust for the benefit of the Participant’s family members or to
a partnership or limited family partnership or other entity established for the
benefit of one or more members of the Participant’s family), subject to such
limits as the Committee may establish.  Each transferee shall remain
subject to all the terms and conditions applicable to the option prior to such
transfer.

     

    4.6           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
exercise an option under the Plan, and any permitted modification, or revocation
thereof, shall 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.

     

    4.7           Agreement
With Company. At the time of an Award to a Participant under the Plan,
the Committee may require a Participant to enter into an agreement with the
Company (the “Agreement”) in a form
specified by the Committee, agreeing to the terms and conditions of the Plan and
to such additional terms and conditions, not inconsistent with the Plan, as the
Committee may, in its sole discretion, prescribe.  The Committee need
not require the execution of any such agreement by a Participant in which case
acceptance of the Award by the Participant will constitute agreement to the
terms of the Award.

     

    The Committee may also choose to
document the evidence of its approval of an Award in the form of an agreement,
certificate, resolution or other type or form of writing or other evidence
approved by the Committee that sets forth the terms and conditions of the
Award.  Evidence of an Award may also be in an electronic medium and
may be limited to a notation on the books and records of the
Company.  The Company may deliver by email or other electronic means
(including posting on a web site maintained by the Company or by a third party
under contract with the Company) all documents relating to the Plan or any Award
thereunder (including without limitation, prospectuses required by the SEC) and
all other documents that the Company is required to deliver to its security
holders (including without limitation, annual reports and proxy
statements).

     

    4.8           Limitation
of Implied Rights.

     

    (a)           No
Collateral or Secured Interest.  Neither a Participant nor any
other person shall, by reason of the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Related Company whatsoever,
including, without limitation, any specific funds, assets, or other property
which the Company or any Related Company, in their sole discretion, may set
aside in anticipation of a liability under the Plan. Each Participant shall have
only a contractual right to the stock payable under the Plan, unsecured by any
assets of the Company or any Related Company. Nothing contained in the Plan
shall constitute a guarantee that the assets of such companies shall be
sufficient to pay any benefits to any person.

     

    (b)           No
Guarantee of Employment.  The Plan does not constitute a
contract of employment, and the receipt of any Award or option grant will not
give any employee the right to be retained in the employ of the Company or any
Related 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 right as a shareholder of the Company prior to the date on
which the individual fulfills all conditions for receipt of such
rights.

     

    4.9           Evidence.
Evidence required of Participant 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.

     

    4.10           Action by
Company or Related Company.  Any action required or permitted
to be taken by the Company or any Related Company shall be by resolution of its
Board, 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 the Company.

     

    4.11           Change of
Control.  Subject to the terms set forth in an applicable
option agreement or Award agreement, upon a Change of Control the Committee may,
in its discretion, revise, alter, amend or modify any option agreement or Award
in any manner it deems appropriate.  In exercising this discretion,
the Committee may accelerate vesting, lapse any restrictions or deferred
limitations, and determine whether any Performance Conditions have been met and
make such adjustments or settlements of outstanding Awards as it deems
consistent with the purposes of the Plan.  The Committee shall also
have the authority to make adjustments under any applicable Change of Control
condition as it deems appropriate and consistent with the terms of a definitive
merger or acquisition agreement.  If any Award is subject to the
provisions of Section 409A of the Code, any special provision regarding timing
or form of payment upon a Change of Control must be set forth in the Award
agreement when the Award is granted and must comply with the requirements of
Section 409A.

     

    4.12           Annual
Grant to Non-Employee Directors.  Consistent with
the terms of this Plan and as reflected in individual Award agreements, the
Committee and the Board may establish annual grant Awards or other Awards to
directors who are not employees on such terms and conditions as it determines,
including providing for director fee or retainer payments through the issuance
of Awards and establish the timing of the effectiveness of such
Awards.  Such Awards may also be made by establishing annual grants,
in such amounts as the Board may determine from time to time.  To the
extent that the Board amends, suspends or terminates such annual or periodic
grant programs for non-employee directors, no approval or consent of such
non-employee director shall be necessary to take such action with respect to
Awards that have not yet been granted.

     

    4.13           Compliance
with Code Section 409A.  Notwithstanding
any provision of this Agreement to the contrary, if one or more of the payments
or benefits received or to be received by a Participant pursuant to an Award
would constitute deferred compensation subject to Section 409A of the Code and
would cause the Participant to incur any penalty tax or interest under Section
409A of the Code or any regulations or Treasury guidance promulgated thereunder,
the Company may reform such provision to the minimum amount necessary to
maintain the original intent of the applicable provision without violating the
provisions of Section 409A of the Code; provided, however, that if no reasonably
practicable reformation would avoid the imposition of any penalty tax or
interest under Section 409A of the Code, no payment or benefit will be provided
under the Award, the Award will be deemed null, void and of no force and effect,
and the Company shall have no further obligation with respect to the Award or
the failure to issue any Shares or other compensation hereunder.

     

    SECTION
5

    COMMITTEE

     

    5.1           Administration.
The authority to control and manage the operation and administration of the Plan
shall be vested in a committee of the members of the Board who are “independent
directors”, as determined under Rule 16b-3 of the Securities Exchange Act of
1934 or any successor rule, Section 162(m) of the Code, and any rules and
regulations of the stock exchange on which the Company’s Shares are listed in
accordance with this Section 5.  The Board of Directors of the Company
has designated the Compensation Committee of the Board, comprised of not less
than three (3) members, to be responsible for administering the Plan.

     

    5.2           Selection
of Committee. The
Committee shall be selected by the Board, and shall consist of three (3) or more
independent members of the Board.

     

    5.3           Information
to be Furnished to Committee.  The Company and Related
Companies shall furnish the Committee with such data and information as may be
required for it to discharge its duties. The records of the Company and Related
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.

     

    SECTION
6

    AMENDMENT AND
TERMINATION

     

    6.1           Amendment
and Termination.  The Board may at any time amend, suspend, or
terminate this Plan.

    

    6.2           Stockholder
Approval.  The Company shall obtain the approval of the
Company’s shareholders for any amendment to this Plan if shareholder approval is
necessary or desirable to comply with any applicable law or with the
requirements applicable to the grant of Awards intended to be Incentive Stock
Options; provided, however, that the Company shall obtain shareholder approval
of any of the following:  (a) other than an increase under
Section 4.2, an increase in the Shares reserved for issuance hereunder; (b)
an expansion of the class of Participants eligible to receive Awards hereunder;
or (c) any amendment of outstanding Options that effects a repricing of such
Awards.  For Stock Awards to continue to be eligible to qualify as
“performance-based compensation” under Code Section 162(m), the Company’s
shareholders must re-approve the material terms of the performance goals
included in the Plan by the date of the first stockholder meeting that occurs in
the fifth year following the year in which the shareholders first approved the
Plan.  The Board may also, but need not, require that the Company’s
shareholders approve any other amendments to this Plan.

    

    6.3           Effect.  No
amendment, suspension, or termination of this Plan, and no modification of any
Award even in the absence of an amendment, suspension, or termination of this
Plan, shall impair any existing contractual rights of any Participant unless the
affected Participant consents to the amendment, suspension, termination, or
modification.  Notwithstanding anything herein to the contrary, no
such consent shall be required if the Committee determines, in its sole and
absolute discretion, that the amendment, suspension, termination, or
modification:  (a) is required or advisable in order for the Company,
this Plan or the Award to satisfy applicable law, to meet the requirements of
any accounting standard or to avoid any adverse accounting treatment, (b) is in
the best interests of the Company or its shareholders for any event or
transaction described in Section 4.2, or (c) is otherwise in accordance with
Section 1.5 of the Plan.

    

    The Committee may, but need not, take
the tax or accounting consequences to affected Participants into consideration
in acting under this Section 6.3.  Those decisions shall be final,
binding and conclusive.  Termination of this Plan shall not affect the
Committee’s ability to exercise the powers granted to it under this Plan with
respect to Awards granted before the termination of Shares issued under such
Awards even if those Shares are issued after the termination.

    

    SECTION
7

    DEFINED
TERMS

     

    For
purposes of the Plan, the terms listed below shall be defined as
follows:

     

    (a)           Award.
The term “Award” or “Awards” shall mean any award or benefit granted to any
Participant made by the Committee under the Plan, including, without limitation,
the grant of Options or Stock Awards.  The Committee shall determine
the type or types of Awards to be made to each Participant under the Plan and
shall approve the terms and conditions governing such Awards.  Awards
may be granted singly, in compensation or in tandem so that the settlement or
payment of one automatically reduces or cancels the other.  Awards may
also be made in combination or in tandem with, in replacement of, as
alternatives to, or as the payment for, grants or rights under any other
employee or compensation plan of the Company, including the Plan of any acquired
entity.  Nothing in this Plan shall authorize the Committee to grant
an automatic reload option that provides for the automatic award of additional
stock options upon the exercise of such Awards.

     

    (b)           Board.
The term “Board” shall
mean the Board of Directors of the Company.

     

    (c)           Change of
Control.                                           Unless
otherwise modified in an applicable Award agreement, the term “Change of Control” means in
the event that:

     

    (1)          Any
person (as such term is used in Section 13 of the Securities Exchange Act of
1934 and the rules and regulations thereunder and including any affiliate or
associate of such person, as defined in Rule 12b-2 under said Act, and any
person acting in concert with such person) directly or indirectly acquires or
otherwise becomes entitled to vote more than thirty-five percent (35%) of the
voting power entitled to be cast at elections for directors (“Voting Power”) of the Company;
or

     

    (2)          There
occurs any merger or consolidation of the Company, or any sale, lease or
exchange of all or any substantial part of the consolidated assets of the
Company and its subsidiaries to any other person or, in the case of a merger or
consolidation, the holders of outstanding stock of the Company entitled to vote
in elections of directors immediately before such merger or consolidation
(excluding any affiliate) hold less than fifty percent (50%) of the Voting Power
of the survivor of such merger or consolidation or its parent; or in the case of
any such sale, lease or exchange, the Company does not own at least 50% of the
Voting Power of the acquiring entity or person; or

     

    (3)          The
election to the Board, without the approval or recommendation of the incumbent
Board, of the lesser of (i) four directors or (ii) directors constituting a
majority of the number of directors of the Company then in office.

     

    (d)           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.

     

    (e)           Committee.  The
term “Committee” shall
mean the members of the duly constituted Compensation Committee of the Company,
consisting of independent members of the Board that satisfy the provisions of
Rule 16b-3 of the Exchange Act and, if applicable, Section 162(m) of the
Code.  In the event that the Shares are listed with Nasdaq, the
Committee shall comply with applicable Nasdaq rules and listing
standards.

     

    (f)           Disability.  The
term “Disability” shall
mean, unless the Award is subject to the terms of Section 409A of the
Code,  the (i) inability of a Participant to engage in any
substantial, gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve months; or (ii) a determination of total disability by the Social
Security Administration.  In the event that the Award granted to the
Participant is subject to Section 409A of the Code, the term disability
shall have the same meaning as defined under Section 409A of the Code or any
successor provision thereto.

     

    (g)           Eligible
Employee or Eligible Director.  The term “Eligible Employee” or
“Eligible Director” shall mean any employee or director of the Company or a
Related Company that performs key services for such Company or a Related
Company.  For any incentive stock options granted under the Plan,
Eligible Employee must be deemed to be a key employee of the Company or a
Related Company.

     

    (h)           Exchange
Act.  The term “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    (i)           Fair
Market Value. For purposes of determining the “Fair Market Value” of a share
of Stock, the following rules shall apply:

     

    (1)          Listed
Stock.  If the Shares are traded on any established stock
exchange or quoted on a national market system, Fair Market Value shall be the
closing sales price for the Shares as quoted on that stock exchange or system
for the date the value is to be determined (the “Pricing Date”) as reported in
The Wall Street Journal
or a similar publication.  If no sales are reported as having occurred
on the Pricing Date, Fair Market Value shall be that closing sales price for the
last preceding trading day on which sales of Shares are reported as having
occurred.  If no sales are reported as having occurred during the five
trading days before the Pricing Date, Fair Market Value shall be the closing bid
for Shares on the Pricing Date (or on the last preceding date on which a closing
bid for the Shares was made).  If Shares are listed on multiple
exchanges or systems, Fair Market Value shall be based on sales or bid prices on
the primary exchange or system on which Shares are traded or
quoted.

     

    (2)          Stock
Quoted by Securities Dealer.  If Shares are regularly quoted by
a recognized securities dealer but selling prices are not reported on any
established stock exchange or quoted on a national market system, Fair Market
Value shall be the mean between the high bid and low asked prices on the Pricing
Date.  If no prices are quoted for the Pricing Date, Fair Market Value
shall be the mean between the high bid and low asked prices on the last
preceding trading day on which any bid and asked prices were
quoted.

     

    (3)          No
Established Market.  If Shares are not traded on any
established stock exchange or quoted on a national market system and are not
quoted by a recognized securities dealer, and unless otherwise required by
applicable law, the Committee (following guidelines established by the Board or
Committee) will determine Fair market Value in good faith using any reasonable
valuation method.  The Committee will consider the following factors,
and any others it considers significant, in determining Fair Market
Value:  (i) the price at which other securities of the Company have
been issued to purchasers other than employees, directors, or consultants; (ii)
the Company’s stockholder’s equity, prospective earning power, dividend-paying
capacity, present value of future cash flows, and value of tangible and
intangible assets, if any; and (iii) any other relevant factors, including the
economic outlook for the Company and the Company’s industry, the Company’s
position in that industry, the Company’s goodwill and other intellectual
property, and the values of securities of other businesses in the same
industry.

     

    (4)          Section
409A.  In connection with any of the foregoing, solely to the
extent necessary to avoid causing an Option or an Award (if and where
applicable) to be deemed deferred compensation within the meaning of Section
409A of the Code, the Board may deviate from such meaning and determine Fair
Market Value in such manner as it deems appropriate, reasonable and in good
faith is required to comply with Section 409A of the Code, after
consultation with counsel to the Company, but in all cases will make such
determination in a manner that is as close as possible to that set forth
herein.

     

    (j)           Participant.  The
term “Participant” means
those persons that have been granted an Option or Award by the Committee under
the terms of the Plan.

     

    (k)           Performance
Measures.  The term “Performance Measures” means
those criteria established by the Committee to measure individual or Company
performance, including relevant standards imposed to compare Company performance
against the results of comparable companies and any individually designed and
measurement standards selected by the Company.

     

    (l)           Related
Company or Related Companies. For purposes of this Agreement, the term
“Related Company” means (i) any corporation, partnership, joint venture or other
entity during any period in which it owns, directly or indirectly, at least
fifty percent (50%) of the voting power of all classes of stock of the Company
(or successor to the Company) entitled to vote; and (ii) any corporation,
partnership, joint venture or other entity during any period in which at least a
fifty percent voting or profits interest is owned, directly or indirectly, by
the Company, by any entity that is a successor to the Company, or by any entity
that is a Related Company by reason of clause (i) next above.

     

    (m)           Retirement.  The
term “Retirement” means
the age or years of service requirements established by the Committee to be used
in determining the exercisability of any Option and vesting of such
Option.

     

    (n)           Stock or
Shares. The term “Stock” or “Shares” shall mean Shares of
common stock of the Company.

     

    (o)           Stock
Award.  The term “Stock Award” is an award made
in stock or denominated in units of stock.  All or part of any Stock
Award may be subject to conditions established by the Committee, and set forth
in the Award Agreement, which may include, but is not limited to, continuous
service with the Company, achievement of specific business objectives, and other
measurement of individual, business unit, or Company performance.

     

    (p)           Vested
Option.  The term “Vested Option” means an option
that is not subject to forfeiture and may be exercised by the Participant in
accordance with its terms.  For purposes of the Plan, a Vested Option
may vest over a period of time in incremental amounts as determined on the basis
of performance measures or completion of a period of service.

     

    SECTION
8

    MISCELLANEOUS
PROVISIONS

     

    8.1           Required
Taxes.  No later than the date an amount first become
includible in gross income or is no longer subject to a substantial risk of
forfeiture with respect to any Award, Participants must pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount.  Unless otherwise determined by
the Company, withholding obligations may be settled with Common Stock, including
Common Stock that is part of the Award that gives rise to the withholding
requirement; provided, however, that not more than the legally required minimum
withholding may be settled with Common Stock.  The obligations of the
Company under the Plan and any Award agreement shall be conditional on such
payment or arrangements, and the Company and its subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to such Participant.

     

    8.2           Designation
of Death Beneficiary.  The Committee shall establish such
procedures as it deems appropriate for a Participant to designate a beneficiary
to whom any amounts payable in the event of such Participant’s death are to be
paid or by whom any rights of such Participant may be exercised after such
Participant’s death.

     

    8.3           Governing
Law and Interpretation.  The Plan and all Awards made and
actions taken thereunder shall be governed by and construed in accordance with
the laws of the State of Florida, without reference to principles of conflict of
laws and, where applicable, the laws of the United States.  The
captions of this Plan are not part of the provisions hereof and shall no force
or effect.

     

    8.4           Foreign
Employees and Foreign Law Considerations.  The Committee may
grant Awards to Eligible Employees who are foreign nationals, who are located
outside the United States or who are not compensated from a payroll maintained
in the United States, or who are otherwise employed by a Company subsidiary or
on such terms and conditions specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable to foster and promote achievement of
the purposes of the Plan and, in furtherance of such purposes, the Committee may
make such modifications, amendments, procedures, or subplans as may be necessary
or advisable to comply with such legal or regulatory provisions.exhibit10-1.htm

    Exhibit 10.1

    
      

    

    
      

      
        

         

      

      
        EIGHTH
MODIFICATION AGREEMENT AND COVENANT WAIVER

         

        This
Eighth
Modification Agreement and Covenant Waiver (this “Agreement”) is made
as of April 1, 2009 but effective as of March 31,
2009 (the “Effective
Date”), by and between VINEYARD NATIONAL BANCORP, a California
corporation (“Borrower”) and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION (“Lender”).  Unless
otherwise set forth herein, all capitalized terms used herein shall have the
meaning given such terms in the Loan Documents (defined below).

        
 

                   WHEREAS,
in connection with a loan from Lender to Borrower in the original principal
amount of $70,000,000.00, with a current outstanding principal loan balance of
$48,300,000.00; (the “Loan”), the Borrower
executed and delivered to Lender that certain Amended and Restated Promissory
Note (“Note”)
dated March 29, 2007, that certain Loan Agreement (“Loan Agreement”),
that certain  Pledge Agreement together with Addendum to Pledge
Agreement (collectively the “Pledge”), each dated
as of March 17, 2006, that certain Modification Agreement effective as of May
11, 2006 (“First
Modification”), that certain Second Modification Agreement and Covenant
Waiver effective as of March 29, 2007 (“Second
Modification”), that certain Third Modification Agreement and Covenant
Waiver effective as of March 15, 2008 (“Third Modification”),
that certain Fourth Modification Agreement and Covenant Waiver effective as of
June 30, 2008 (“Fourth
Modification”), that certain Fifth Modification Agreement and Covenant
Waiver dated and effective as of August 29, 2008 (“Fifth
Modification”), that certain
Amendment to Fifth Modification Agreement and Covenant Waiver effective as of
September 23, 2008 (“Amendment to Fifth
Modification”), that certain Sixth Modification Agreement and Covenant
Waiver effective as of October 28, 2008 (“Sixth Modification”)
and that certain Seventh Modification
Agreement and Covenant Waiver effective as of November 28, 2008
(“Seventh Modification”)
(this Agreement, the Note, the Loan Agreement, the Pledge, the First
Modification, the Second Modification, the Third Modification, the Fourth
Modification, the Fifth Modification,  Amendment to Fifth Modification, the Sixth
Modification, the Seventh
Modification and any other documents executed by Borrower in connection with the
Loan (but expressly excluding the Letter Agreement, as defined in the Seventh Modification) are collectively herein
referred to as the “Loan
Documents”);

        
 

                   WHEREAS,
Borrower desires to extend the maturity date of the Loan through May 22, 2009;

        
 

                   WHEREAS,
Borrower has requested that Lender extend the Waivers (as defined in the Fifth
Modification and Amendment to Fifth Modification) and the Additional Waivers (as
defined in the Seventh Modification) through and including May 22, 2009 (the “Waivers”);

        
 

                   WHEREAS, subject to the terms and conditions
contained herein, Lender is willing to (i) extend the Maturity Date of the Loan
and (ii) extend the Waivers.

        
 

                   NOW,
THEREFORE, FOR MUTUAL CONSIDERATIONS, the receipt and sufficiency of which is
hereby acknowledged, the undersigned Borrower and Lender do hereby modify the
Loan Documents as follows:

        

          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        1) Capitalized
Terms.  Any capitalized term used but not defined herein shall
have the meaning ascribed to it in the Loan Documents.  All references
to the “Loan Documents” in the Loan Agreement and any of the other Loan
Documents shall include, without limitation, this Agreement and all other such
Loan Documents, as modified by this Agreement.

         

        2) Extension of Maturity Date;
Waiver. Subject to Borrower’s compliance with all representations,
warranties, covenants and agreements contained in this Agreement and all the
other Loan Documents as modified hereby:

         

        (a) Maturity
Date.  The “Maturity Date” set forth in the Loan Agreement and
elsewhere in the Loan Documents is hereby modified to mean May 22, 2009
(the “New Maturity
Date”).

         

        (b) Waivers.  Lender
hereby extends the Waivers for a period through and including the New Maturity
Date.

         

        3) Modification of the
Note.  The Note and, where applicable, the other Loan Documents
are hereby modified as follows:

         

        a. Interest
Rate.  From and after March
31, 2009 through and including the New Maturity Date, interest shall
accrue on the outstanding principal balance of the Note at a fixed annual rate
equal to the LIBOR Rate, as hereinafter defined, plus three hundred fifty (350)
basis points (LIBOR Rate + 3.50%). As used herein, the term “LIBOR Rate” refers
to the sixty (60) day London Interbank Offered Rate, as determined by Lender in
its sole (but reasonable) discretion.  The LIBOR Rate shall be
determined by Lender as of March 31, 2009
(or, if such date is not a business day, then on the next preceding business
day).  Interest shall be calculated on the basis of a 360 day year and
the actual number of calendar days elapsed.  Notwithstanding anything
else in this instrument to the contrary, in no event shall the maximum rate of
interest payable in respect to the indebtedness evidenced hereby exceed the
maximum rate of interest allowed to be charged by applicable law.

         

        b. Payment
Schedule.  Said principal and accrued interest thereon shall be
due and payable as hereinafter set forth:

         

        On the
New Maturity Date the entire outstanding principal balance of the Loan, any
accrued and unpaid interest thereon, and all incurred fees shall be due and
payable without demand.

         

        c. No New
Advances.  Borrower may not reborrow any sums repaid under the
Loan, and Lender has no obligation to advance any new loan proceeds under the
Loan.

         

        4) Conditions of Extension of
Maturity Date; Waiver.  Lender’s agreement to extend the
Maturity Date and Waivers is conditioned upon and subject to the timely
satisfaction by Borrower of each of the following conditions (collectively the
“Conditions of
Modification”):

         

        a. Correctness and
Warranties.  Except as expressly modified or waived herein, all
representations and warranties made by Borrower to Lender under this Agreement
and the other Loan Documents (including without limitation all of Borrower’s
representations and warranties set forth in Sections 3.5 and 3.9 of the Loan
Agreement) are and shall remain true and correct through and including the New
Maturity Date and payment in full of the Loan.

         

        b. No Defaults
Hereunder.  Borrower shall not breach any promise or covenant
contained in this Agreement and shall not be in default under any provision of
this Agreement or the other Loan Documents (except with respect to the Waivers,
as waived hereby).

         

        

          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        5) Termination
Events.  Each of the following shall constitute a Termination
Event and an Event of Default under this Agreement and all other Loan Documents
without any further cure or grace period, notwithstanding anything to the
contrary in the Loan Documents (each, a “Termination
Event”):

         

        a. Conditions of Modification;
Compliance.  If Borrower shall fail to comply in a timely
manner with any of the Conditions of Modification set forth above.

         

        b. Bankruptcy.  If
Borrower shall become a debtor in bankruptcy by means of either a voluntary or
involuntary petition.

         

        c. Receivership;
Insolvency.  If any kind of receivership or insolvency
proceeding is commenced by or against Borrower.

         

        6) New Maturity Date;
Acceleration of Loan.  Borrower agrees that the Loan
automatically, and without notice, shall be immediately all due and payable in
full upon the earlier of:

         

        a. New
Maturity Date; or

         

        b. The
occurrence of any Termination Event, as defined above.

         

                   The
entire amount of the Loan, including all accrued and unpaid interest, shall be
immediately due and payable upon the earlier to occur of the New Maturity Date
or the occurrence of any Termination Event, and Lender shall be entitled
immediately to exercise all of its rights and remedies under the Loan Documents,
all without further notice to Borrower; provided, however, that in no event
shall the occurrence of a Termination Event under Section 5.b. or 5.c. above
affect the rights and obligations of Borrower and Lender under the Letter
Agreement.

         

        7) Representations, Warranties
and Covenants.  As an inducement to Lender to enter into this
Agreement, Borrower makes the following representations, warranties and
covenants:

         

        a. Enforceability.  The
Loan, this Agreement, and all the other Loan Documents are fully enforceable,
and the Loan is not subject to any defense or counterclaim or any claim of
setoff or recoupment by Borrower.

         

        b. Representation by
Counsel.  Borrower has been represented by, or advised to
consult with, counsel in connection with the negotiation and execution of this
Agreement; this Agreement represents an arms-length transaction; and Borrower
has acted in good faith in the making of this Agreement.

        

          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        c. Consents.  The
execution and performance of this Agreement by Borrower does not and will not
violate any agreement to which Borrower is a party, and the execution and
performance of this Agreement by Borrower does not require the consent of any
third party, or if the consent of a third party is required, such consent has
been previously obtained by Borrower.

         

        d. Sale of
Assets.  Through and including the New Maturity Date, Borrower
will not dispose of any of its property outside the ordinary course of business
or as otherwise provided for in this Agreement or the Letter
Agreement.

         

        e. New
Debt.  Through and including the New Maturity Date, Borrower
will not incur any additional debt except for unsecured trade debt incurred in
the ordinary course of business without the prior written consent of Lender in
its sole and absolute discretion.

         

        f. Impairment.  Borrower
will take no action which would impair its ability to perform its obligations
hereunder or to satisfy any of the Conditions of Modification.

         

        g. Extension
Fee.  Promptly after with Borrower’s execution hereof, Borrower
shall pay Lender’s attorneys fees in connection herewith.

         

        8) Further
Assurances.  At any time and from time to time after the date
of this Agreement, at the request of Lender, Borrower shall, without further
consideration, and at Borrower’s sole expense, execute and deliver such
documents and instruments, and take such actions, as Lender may deem necessary
(a) to perfect any of Lender’s security interests or liens granted in any of the
Loan Documents, and/or (b) to carry out the purposes and intentions of this
Agreement and the Loan Documents.

         

        9) Effectiveness of the
Loan.  This Agreement shall not constitute a novation of any of
the other Loan Documents, and all the Loan Documents shall survive the execution
of this Agreement and remain in full force and effect subject only to the
Waivers as set forth herein and to any express modifications thereto as herein
provided.  The lien and security interest on the Collateral granted
pursuant to the Pledge is hereby extended, and the lien and security interest on
the Collateral shall continue to secure the remaining amounts outstanding in
respect of all indebtedness that may be due and owing pursuant to the terms of
the Loan Documents, including without limitation principal and interest on all
amounts loaned pursuant to the Note.  There are no oral
representations or assurances from Lender to Borrower which survive the
execution of this Agreement.

         

        10) Release and
Waiver.  Borrower hereby acknowledges and stipulates that it
has no claims or causes of action of any kind whatsoever against
Lender.  Borrower represents that it is entering into this Agreement
freely, and with the advice of counsel as to its legal
alternatives.  Borrower hereby releases Lender from any and all
claims, causes of action, demands and liabilities of any kind whatsoever whether
direct or indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, which Borrower has or may acquire in the future
relating in any way to any event, circumstance, action or failure to act to the
date of this Agreement.  The release by Borrower herein, together with
the other terms and provisions of this Agreement, is executed by Borrower
advisedly and without coercion or duress from Lender, Borrower having determined
that the execution of this Agreement, and all its terms and provisions are in
Borrower’s economic best interest.

        

          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        11) No Obligation to Extend; No
Waiver.  Borrower acknowledges and agrees that Lender is not
obligated and does not agree to any additional extensions of the New Maturity
Date or any further Waivers except as expressly set forth
herein.  Except as expressly provided herein as to the New Maturity
Date and the Waivers, (i) this Agreement shall not constitute a waiver by Lender
of any defaults under the Loan Documents, (ii) Lender reserves all of its rights
and remedies under the other Loan Documents, and (iii) all of the Loan Documents
are in all respects confirmed, ratified and approved and are in full force and
affect as of the date hereof.  No action or course of dealing on the
part of Lender, its officers, employees, consultants, or agents, nor any failure
or delay by Lender with respect to exercising any right, power or privilege of
Lender under the Loan Documents or this Agreement, shall operate as a waiver
thereof, except to the extent expressly provided herein.

         

        12) Costs and
Expenses.  Borrower agrees to pay on demand all out-of-pocket
costs and expenses of Lender, including the fees and out-of-pocket expenses of
counsel for Lender, in connection with the administration, enforcement, or
protection of Lender’s rights under this Agreement and/or the Note and other
Loan Documents.

         

        13) Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

         

        14) Amendments.  This
Agreement cannot be amended, rescinded, supplemented or modified except in
writings signed by the parties hereto.

         

        15) Entire
Agreement.  Subject to Section 9 above, this Agreement,
together with the Letter Agreement, contains the entire agreement of the parties
and supersedes any other discussions or agreements relating to the subject of
this Agreement.

         

        16) Time of the
Essence.                                                      TIME
IS OF THE ESSENCE OF THIS AGREEMENT.

         

        17) Counterpart Signature
Pages.  This Agreement may be executed in one or more
counterparts and may be delivered by facsimile or electronic mail, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.

         

        [Signatures
on Following Page]

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        COUNTERPART
SIGNATURE PAGE TO

        EIGHTH
MODIFICATION AGREEMENT AND COVENANT WAIVER

        

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

        

                                                                                   BORROWER:

        

        VINEYARD NATIONAL
BANCORP,

        a
California corporation

        

         

        
          	 By:	 /s/Glen
      C. Terry
	
                   

                  Name:

                	
                   

                  Glen C.
      Terry

                
	
                   

                  Title:

                	
                   

                  President and
      Chief Executive Officer

                

        

         

         

        
 

        STATE
OF  CA

        COUNTY OF
RIVERSIDE

        

                   Before
me, Elizabeth A. Reyes, Notary
Public of the state and county aforesaid, personally appeared Glen C. Tery, with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and who, upon oath, acknowledged himself to be President and Chief Executive Officer
(or other officer authorized to execute the instrument) of VINEYARD NATIONAL BANCORP, a
California corporation, the within named bargainor, and that he as
such President and Chief
Executive Officer, executed the foregoing instrument for
the purpose therein contained, by signing the name of the corporation by himself
as Glen C. Terry, President and Chief
Executive Officer

                   

         

        WITNESS
MY HAND, at office, this 1st day of April, 2009.

        

        

                                                                                   /s/ Elizabeth A.
Reyes

                                                                                   Notary
Public

        

        My
Commission Expires: 

         

        January
24, 2010

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

        COUNTERPART
SIGNATURE PAGE TO

        EIGHTH
MODIFICATION AGREEMENT AND COVENANT WAIVER

        

                   IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

        

        

                                                                        LENDER:

        

                                                                        FIRST TENNESSEE BANK
NATIONALASSOCIATION, a national
banking association

        

                                                                       

        
          
            	 By:	 /s/David
      S. Work
	
                     

                    Name:

                  	
                     

                    David S.
      Work

                  
	
                     

                    Title:

                  	
                     

                    Executive
      Vice President

                  

          

           

           

        

         

         

                                                                                                 

         

         

         

        
 

        STATE OF
TENNESSEE

        COUNTY OF
SHELBY

        

                   Before
me, G. Porter Robinson, Notary
Public of the state and county aforesaid,
personally appeared David S.
Work, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be Executive Vice
President  (or other officer authorized to execute the
instrument) of First Tennessee Bank National Association, a national banking
association, the within named bargainor, and that he as such  Executive Vice
President, executed the foregoing instrument for the purpose
therein contained, by signing the name of the national banking association by
himself as David S. Work, Executive Vice
President.

        

                   WITNESS
MY HAND, at office, this 1st day of April, 2009.

        

        

                                                                                   /s/ G. Porter
Robinson

                                                                                   Notary
Public

        

        My
Commission Expires:

        

        April
28, 2009

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