Document:

ONSOURCE CORPORATION

2002 EQUITY INCENTIVE PLAN

INTRODUCTION

          On March 15, 2002, the Board of Directors adopted this 2002 Equity Incentive Plan (the "Plan") which Plan was approved by the Stockholders on March 18, 2002.

1.          PURPOSES 

	 	
(a)
	
The purpose of the Plan is to provide a means by which selected Employees and Directors of and Consultants to the Company and its Affiliates may be given an opportunity to benefit from increases in value of the common stock of the Company ("Common Stock") through the granting of (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to purchase restricted stock, and (v) stock appreciation rights, all as defined below. 

	 	
(b)
	
The Company, by means of the Plan, seeks to retain the services of persons who are now Employees, Directors or Consultants, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates. 

	 	
(c)
	
The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to which responsibility for administration of the Plan has been delegated pursuant to subsection 3(c), be either (i) Options granted pursuant to Section 6 or 7 hereof, including Incentive Stock Options and Nonstatutory Stock Options, or (ii) stock bonuses or rights to purchase restricted stock granted pursuant to Section 8 hereof, or (iii) stock appreciation rights granted pursuant to Section 9 hereof.  All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and a separate certificate or certificates will be issued for shares purchased on exercise of each type of Option. 

2          DEFINITIONS

	 	
(a)
	
"AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. 

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

	 	
(c)
	
"CODE" means the Internal Revenue Code of 1986, as amended. 

	 	
(d)
	
"COMMITTEE" means a Committee appointed by the Board in accordance with subsection 3(c) of the Plan. 

	 	
(e)
	
"COMPANY" means ONSOURCE CORPORATION.

	 	
(f)
	
"CONCURRENT STOCK APPRECIATION RIGHT" OR "CONCURRENT RIGHT" means a right granted pursuant to subsection 9(b)(2) of the Plan. 

	 	
(g)
	
"CONSULTANT" means any person, including an advisor, engaged by the Company or an Affiliate to render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only a director's fee by the Company or who are not compensated by the Company for their services as Directors. 

	 	
(h)
	
"CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means the employment or relationship as a Director or Consultant is not interrupted or terminated.  The Board, in its sole discretion, may determine whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of:  (i) any leave of absence approved by the Board, including sick leave, military leave, or any other personal leave; or (ii) transfers between locations of the Company or between the Company, Affiliates or their successors. 

	 	
(i)
	
"DIRECTOR" means a member of the Board. 

	 	
(j)
	
"EMPLOYEE" means any person, including Officers and Directors, employed by the Company or any Affiliate of the Company.  Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. 

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

	 	
(l)
	
"FAIR MARKET VALUE" means, as of any date, the value of the Common Stock of the Company determined as follows: 

	 	 	
(1)
	
If the Common Stock is listed on any established stock exchange, or traded on the OTC Electronic Bulletin Board, the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in Common Stock) on the last market trading day prior to the day of determination, as reported in the Wall Street Journal or such other source as the Board deems reliable; 

	 	 	
(2)
	
In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board. 

	 	
(m)
	
"INCENTIVE STOCK OPTION" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

	 	
(n)
	
"INDEPENDENT STOCK APPRECIATION RIGHT" means a right granted pursuant to subsection 9(b)(3) of the Plan. 

	 	
(o)
	
"NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act of 1933 ("Regulation S-K"), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3. 

	 	
(p)
	
"NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as an Incentive Stock Option. 

	 	
(q)
	
"OFFICER" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 

	 	
(r)
	
"OPTION" means a stock option granted pursuant to the Plan. 

	 	
(s)
	
"OPTION AGREEMENT" means a written agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 

	 	
(t)
	
"OPTIONEE" means a person to whom an Option is granted pursuant to the Plan. 

	 	
(u)
	
"OUTSIDE DIRECTOR" means a Director who either (i) is not a current employee of the Company or an "affiliated corporation" (within the meaning of Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time, and is not currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director, or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code. 

	 	
(v)
	
"PLAN" means this ONSOURCE CORPORATION 2002 Equity Incentive Plan. 

	 	
(w)
	
"RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor to Rule   16b-3, as in effect when discretion is being exercised with respect to the Plan. 

	 	
(x)
	
"STOCK APPRECIATION RIGHT" means any of the various types of rights which may be granted under Section 9 of the Plan. 

	 	
(y)
	
"STOCK AWARD" means any right granted under the Plan, including any Option, any stock bonus, and any right to purchase restricted stock. 

	 	
(z)
	
"STOCK AWARD AGREEMENT" means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant.  Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

	 	
(aa)
	
"TANDEM STOCK APPRECIATION RIGHT" OR "TANDEM RIGHT" means a right granted pursuant to subsection 9(b)(1) of the Plan. 

3.          ADMINISTRATION

	 	
(a)
	
The Plan shall be administered by the Board unless and until the Board delegates administration to a Committee, as provided in subsection 3(c). 

	 	
(b)
	
The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 

	 	 	
(1)
	
To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; whether a Stock Award will be an Incentive Stock Option, a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock, a Stock Appreciation Right, or a combination of the foregoing; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock pursuant to a Stock Award; whether a person shall be permitted to receive stock upon exercise of an Independent Stock Appreciation Right; and the number of shares with respect to which a Stock Award shall be granted to each such person. 

	 	 	
(2)
	
To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 

	 	 	
(3)
	
To amend the Plan or a Stock Award as provided in Section 15. 

	 	 	
(4)
	
Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan. 

	 	
(c)
	
The Board may delegate administration of the Plan to a committee or committees ("Committee") of one or more members of the Board.  In the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Code Section 162(m), or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3.  If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board (and references in this Plan to the Board shall thereafter be to the Committee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. 

4.          SHARES SUBJECT TO THE PLAN

	 	
(a)
	
Subject to the provisions of Section 13 relating to adjustments upon changes in stock, the stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate two hundred thousand (200,000) shares of Common Stock (determined without giving effect to any stock split that may be made in anticipation of the Company's initial public offering of the Common Stock).  If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full (or vested in the case of Restricted Stock), the stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan.  Shares subject to Stock Appreciation Rights exercised in accordance with Section 9 of the Plan shall not be available for subsequent issuance under the Plan. 

	 	
(b)
	
The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 

5.          ELIGIBILITY

	 	
(a)
	
Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees.  Stock Awards other than Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees, Directors or Consultants. 

	 	
(b)
	
No person shall be eligible for the grant of an Incentive Stock Option if, at the time of grant, such person owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant. 

6.          OPTION PROVISIONS

          Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate.  The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 

	 	
(a)
	
TERM.  No Option shall be exercisable after the expiration of ten (10) years from the date it was granted. 

	 	
(b)
	
PRICE.  The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted, and the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. 

	 	
(c)
	
CONSIDERATION.  The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised, or (ii) at the discretion of the Board or the Committee, at the time of the grant of the Option, (A) by delivery to the Company of other Common Stock of the Company, (B) according to a deferred payment or other arrangement (which may include, without limiting the generality of the foregoing, the use of other Common Stock of the Company) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C) in any other form of legal consideration that may be acceptable to the Board. 

	 	 	
In the case of any deferred payment arrangement, interest shall be payable at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.

	 	
(d)
	
TRANSFERABILITY.  An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the person to whom the Incentive Stock Option is granted only by such person.  A Nonstatutory Stock Option may be transferred to the extent provided in the Option Agreement; provided that if the Option Agreement does not expressly permit the transfer of a Nonstatutory Stock Option, the Nonstatutory Stock Option shall not be transferable except by will, by the laws of descent and distribution or pursuant to a domestic relations order satisfying the requirements of Rule 16b-3, and shall be exercisable during the lifetime of the person to whom the Option is granted only by such person or any transferee pursuant to a domestic relations order. Notwithstanding the foregoing, the person to whom the Option is granted may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option. 

	 	
(e)
	
VESTING.  The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments (which may, but need not, be equal).  The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable ("vest") with respect to some or all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was not fully exercised.  The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate.  The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised. 

	 	
(f)
	
TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR CONSULTANT. In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates (other than upon the Optionee's death or disability), the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it at the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months after the termination of the Optionee's Continuous Status as an Employee, Director or Consultant (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionee does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 

	 	
(g)
	
DISABILITY OF OPTIONEE.  In the event an Optionee's Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee's disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it at the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.  If, at the date of termination, the Optionee is not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan.  If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 

	 	
(h)
	
DEATH OF OPTIONEE.  In the event of the death of an Optionee during, or within a three-month period (or 12 month period in the case of totally disabled Optionees) after the termination of, the Optionee's Continuous Status as an Employee, Director or Consultant, the Option shall be fully vested and may be exercised by the Optionee's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionee's death pursuant to subsection 6(d), but only within the period ending on the earlier of (i) the date twelve (12) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of such Option as set forth in the Option Agreement.  If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan.  If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. 

	 	
(i)
	
EARLY EXERCISE.  The Option may, but need not, include a provision whereby the Optionee may elect at any time while an Employee, Director or Consultant to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option.  Any unvested shares so purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate. 

	 	
(j)
	
RE-LOAD OPTIONS.  Without in any way limiting the authority of the Board or Committee to make or not to make grants of Options hereunder, the Board or Committee shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionee to a further Option (a "Re-Load Option") in the event the Optionee exercises the Option evidenced by the Option agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with this Plan and the terms and conditions of the Option Agreement.  Any such Re-Load Option (i) shall be for a number of shares equal to the number of shares surrendered as part or all of the exercise price of such Option; (ii) shall have an expiration date which is the same as the expiration date of the Option the exercise of which gave rise to such Re-Load Option; and (iii) shall have an exercise price which is equal to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load Option on the date of exercise of the original Option.  Notwithstanding the foregoing, a Re-Load Option which is an Incentive Stock Option and which is granted to a 10% stockholder (as described in subsection 5(b)), shall have an exercise price which is equal to one hundred ten percent (110%) of the Fair Market Value of the stock subject to the Re-Load Option on the date of exercise of the original Option and shall have a term which is no longer than five (5) years.

	 	 	
Any such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board or Committee may designate at the time of the grant of the original Option; PROVIDED, HOWEVER, that the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred thousand dollars ($100,000) annual limitation on exercisability of Incentive Stock Options described in subsection 13(d) of the Plan and in Section 422(d) of the Code.  There shall be no Re-Load Options on a Re-Load Option.  Any such Re-Load Option shall be subject to the availability of sufficient shares under subsection 4(a) and shall be subject to such other terms and conditions as the Board or Committee may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options. 

7.          OPTION GRANTS FOR NON-EMPLOYEE DIRECTORS

          Unless otherwise explicitly provided by the Board, Non-Employee Directors shall not be eligible for any Stock Awards under the Plan other than the nonstatutory stock options provided under this Section 7 on the following terms and conditions: 

	 	
(a)
	
INITIAL GRANT FOR NON-EMPLOYEE DIRECTORS.  Each person who is a Non-Employee Director shall be granted an option to purchase a number of shares of Common Stock determined by a majority of non-participating Directors on the terms and conditions set forth herein. 

	 	
(b)
	
ANNUAL GRANT.  Following each annual meeting of the Company's stockholders occurring after the effectiveness of the initial public offering of the Common Stock, (i) each person who continuously has been a Non-Employee Director for a full year since the last annual meeting of the Company's stockholders automatically shall be granted an option to purchase a number of shares of Common Stock determined by a majority of non-participating Directors (determined without giving effect to any stock split that may be made in anticipation of the Company's  initial public offering of the Common Stock) on the terms and conditions set  forth herein, and (ii) each other person who is then a Non-Employee Director  automatically shall be granted an option to purchase, on the terms and  conditions set forth herein, the number of shares of common stock of the  Company (rounded up to the nearest whole share) determined by multiplying the number of shares determined by the Board (determined without giving  effect to any stock split that may be made in anticipation of the Company's  initial public offering of the Common Stock) by a fraction, the numerator of  which is the number of days the person continuously has been a Non-Employee  Director as of the date of such grant and the denominator of which is 365. 

	 	
(c)
	
TERM.  The term of each Non-Employee Director's option commences on the date it is granted and, unless sooner terminated as set forth herein, expires on the date ("Expiration Date") ten (10) years from the date of grant. If the Non-Employee Director's Continuous Status as an Employee, Director or Consultant terminates, the option shall terminate on the earlier of the Expiration Date or the date three (3) months following the date of termination of such Continuous Status (twelve (12) months if such termination is due to death or disability).  In any and all circumstances, a Non-Employee Director's option may be exercised following termination of his or her Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the date of termination of such status under the provisions of subsection 7(g). 

	 	
(d)
	
PRICE.  The exercise price of each Non-Employee Director's option shall be one hundred percent (100%) of the fair market value of the stock subject to such option on the date such option is granted. 

	 	
(e)
	
CONSIDERATION.  Payment of the exercise price of each option is due in full in cash upon any exercise when the number of shares being purchased upon such exercise is less than 1,000 shares.  However, when the number of shares being purchased upon an exercise is 1,000 or more shares, the Non-Employee Director may elect to make payment of the exercise price under one of the following alternatives: 

	 	 	
 (1)
	
Payment of the exercise price per share in cash or by check at the time of exercise; or 

	 	 	
(2)
	
Provided that at the time of the exercise the Company's common stock is publicly traded and quoted regularly in the Wall Street Journal, payment by delivery of shares of common stock of the Company already owned by the optionee, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens, claims, encumbrances or security interest, which common stock shall be valued at its fair market value on the date preceding the date of exercise; or 

	 	 	
(3)
	
Payment by a combination of the methods of payment specified in Paragraphs (1) and (2) above. 

	 	 	 	
Notwithstanding the foregoing, a Non-Employee Director's option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which results in the receipt of cash (or check) by the Company prior to the issuance of shares of the Company's common stock. 

	 	
(f)
	
TRANSFERABILITY.  A Non-Employee Director's option shall not be transferable except by will or by the laws of descent and distribution, or pursuant to a domestic relations order satisfying the requirements of Rule 16b-3 and shall be exercisable during the lifetime of the Non-Employee Director only by such person (or by his guardian or legal representative) or transferee pursuant to such an order.  Notwithstanding the foregoing, a Non-Employee Director may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of the Non-Employee Director, shall thereafter be entitled to exercise the option. 

	 	
(g)
	
VESTING.  A Non-Employee Director's initial grant under Section 7(a) may, but need not become exercisable in installments over a period of years at a rate determined by the Board; provided that the optionee has, during the entire period prior to such vesting date, continuously served as a Non-Employee Director or employee of or consultant to the Company or any Affiliate, whereupon such option shall become fully exercisable in accordance with its terms with respect to that portion of the shares represented by that installment.  A Non-Employee Director's annual grant under Section 7(b) shall be fully vested at all times. 

8.          TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK

          Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate.  The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be identical, but each stock bonus or restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions as appropriate: 

	 	
(a)
	
PURCHASE PRICE.  The purchase price under each restricted stock purchase agreement shall be such amount as the Board or Committee shall determine and designate in such agreement but in no event shall the purchase price be less than eighty-five percent (85%) of the stock's Fair Market Value on the date such award is made.  Notwithstanding the foregoing, the Board or the Committee may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company for its benefit. 

	 	
(b)
	
TRANSFERABILITY.  No rights under a stock bonus or restricted stock purchase agreement shall be transferable except by will or the laws of descent and distribution or, if the agreement so provides, pursuant to a domestic relations order satisfying the requirements of Rule 16b-3, so long as stock awarded under such agreement remains subject to the terms of the agreement. 

	 	
(c)
	
CONSIDERATION.  The purchase price of stock acquired pursuant to a stock purchase agreement shall be paid either:  (i) in cash at the time of purchase; (ii) at the discretion of the Board or the Committee, according to a deferred payment or other arrangement with the person to whom the stock is sold; or (iii) in any other form of legal consideration that may be acceptable to the Board or the Committee in its discretion.  Notwithstanding the foregoing, the Board or the Committee to which administration of the Plan has been delegated may award stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit. 

	 	
(d)
	
VESTING.  Shares of stock sold or awarded under the Plan may, but need not, be subject to a repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board or the Committee. 

	 	
(e)
	
TERMINATION OF CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT.  In the event a Participant's Continuous Status as an Employee, Director or Consultant terminates, the Company may repurchase or otherwise reacquire any or all of the shares of stock held by that person which have not vested as of the date of termination under the terms of the stock bonus or restricted stock purchase agreement between the Company and such person.

9.          STOCK APPRECIATION RIGHTS

	 	
(a)
	
The Board or Committee shall have full power and authority, exercisable in its sole discretion, to grant Stock Appreciation Rights under the Plan to Employees, Directors and Consultants.  To exercise any outstanding Stock Appreciation Right, the holder must provide written notice of exercise to the Company in compliance with the provisions of the Stock Award Agreement evidencing such right.  Except as provided in subsection 5(c), no limitation shall exist on the aggregate amount of cash payments the Company may make under the Plan in connection with the exercise of a Stock Appreciation Right. 

	 	
(b)
	
Three types of Stock Appreciation Rights shall be authorized for issuance under the Plan: 

	 	 	
(1)
	
TANDEM STOCK APPRECIATION RIGHTS.  Tandem Stock Appreciation Rights will be granted appurtenant to an Option, and shall, except as specifically set forth in this Section 9, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains. Tandem Stock Appreciation Rights will require the holder to elect between the exercise of the underlying Option for shares of stock and the surrender, in whole or in part, of such Option for an appreciation distribution.  The appreciation distribution payable on the exercised Tandem Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the Option surrender) in an amount up to the excess of (A) the Fair Market Value (on the date of the Option surrender) of the number of shares of stock covered by that portion of the surrendered Option in which the Optionee is vested over (B) the aggregate exercise price payable for such vested shares. 

	 	 	
(2)
	
CONCURRENT STOCK APPRECIATION RIGHTS.  Concurrent Rights will be granted appurtenant to an Option and may apply to all or any portion of the shares of stock subject to the underlying Option and shall, except as specifically set forth in this Section 9, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains.  A Concurrent Right shall be exercised automatically at the same time the underlying Option is exercised with respect to the particular shares of stock to which the Concurrent Right pertains.  The appreciation distribution payable on an exercised Concurrent Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the exercise of the Concurrent Right) in an amount equal to such portion as shall be determined by the Board or the Committee at the time of the grant of the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Concurrent Right) of the vested shares of stock purchased under the underlying Option which have Concurrent Rights appurtenant to them over (B) the aggregate exercise price paid for such shares. 

	 	 	
(3)
	
INDEPENDENT STOCK APPRECIATION RIGHTS.  Independent Rights will be granted independently of any Option and shall, except as specifically set forth in this Section 9, be subject to the same terms and conditions applicable to Nonstatutory Stock Options as set forth in Section 6.  They shall be denominated in share equivalents.  The appreciation distribution payable on the exercised Independent Right shall be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Independent Right) of a number of shares of Company stock equal to the number of share equivalents in which the holder is vested under such Independent Right, and with respect to which the holder is exercising the Independent Right on such date, over (B) the aggregate Fair Market Value (on the date of the grant of the Independent Right) of such number of shares of Company stock.  The appreciation distribution payable on the exercised Independent Right shall be in cash or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the exercise of the Independent Right. 

10.          CANCELLATION AND RE-GRANT OF OPTIONS

	 	
(a)
	
The Board or the Committee shall have the authority to effect, at any time and from time to time, (i) the repricing of any outstanding Options and/or any Stock Appreciation Rights under the Plan and/or (ii) with the consent of any adversely affected holders of Options and/or Stock Appreciation Rights, the cancellation of any outstanding Options and/or any  Stock Appreciation Rights under the Plan and the grant in substitution  therefor of new Options and/or Stock Appreciation Rights under the Plan covering the same or different  numbers of shares of stock, but having an exercise price per share not less  than:  eighty-five percent (85%) of the Fair Market Value for a Nonstatutory  Stock Option, one hundred percent (100%) of the Fair Market Value in the case  of an Incentive Stock Option or, in the case of an Incentive Stock Option  held by a 10% stockholder (as described in subsection 5(b)), not less than  one hundred ten percent (110%) of the Fair Market Value per share of stock on  the new grant date.  Notwithstanding the foregoing, the Board or the Committee may grant an Option and/or Stock Appreciation Right with an exercise price lower than that set forth above if such Option and/or Stock Appreciation Right is granted as part of a transaction to which section  424(a) of the Code applies. 

	 	
(b)
	
Shares subject to an Option or Stock Appreciation Right canceled under this Section 10 shall continue to be counted against the maximum award of Options and Stock Appreciation Rights permitted to be granted pursuant to the Plan.  The repricing of an Option and/or Stock Appreciation Right hereunder resulting in a reduction of the exercise price, shall be deemed to be a cancellation of the original Option and/or Stock Appreciation Right and the grant of a substitute Option and/or Stock Appreciation Right; in the event of such repricing, both the original and the substituted Options and Stock Appreciation Rights shall be counted against the maximum awards of Options and Stock Appreciation Rights permitted to be granted pursuant to the Plan, to the extent required by Section 162(m) of the Code. 

11.          COVENANTS OF THE COMPANY

	 	
(a)
	
During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of stock required to satisfy such Stock Awards. 

	 	
(b)
	
The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares under Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act of 1933, as amended (the "Securities Act") either the Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Stock Awards unless and until such authority is obtained. 

12.          USE OF PROCEEDS FROM STOCK

          Proceeds from the sale of stock pursuant to Stock Awards shall constitute general funds of the Company. 

13.          MISCELLANEOUS

	 	
(a)
	
The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest. 

	 	
(b)
	
Neither an Employee, Director nor a Consultant nor any person to whom a Stock Award is transferred in accordance with the Plan shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Stock Award unless and until such person has satisfied all requirements for exercise of the Stock Award pursuant to its terms. 

	 	
(c)
	
Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee, Consultant or other holder of Stock Awards any right to continue in the employ of the Company or any Affiliate, or to continue serving as a Consultant and Director, or shall affect the right of the Company or any Affiliate to terminate the employment of any Employee with or without notice and with or without cause, or the right to terminate the relationship of any Consultant pursuant to the terms of such Consultant's agreement with the Company or Affiliate or service as a Director pursuant to the Company's By-Laws. 

	 	
(d)
	
To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year under all plans of the Company and its Affiliates exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options. 

	 	
(e)
	
The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is transferred in accordance with the Plan, as a condition of exercising or acquiring stock under any Stock Award, (1) to give written assurances satisfactory to the Company as to such person's knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (2) to give written assurances satisfactory to the Company stating that such person is acquiring the stock subject to the Stock Award for such person's own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of the shares upon the exercise or acquisition of stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock. 

	 	
(f)
	
To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is granted may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means:  (1) tendering a cash payment; (2) authorizing the Company to withhold shares from the shares of the Common Stock otherwise issuable to the participant as a result of the exercise or acquisition of stock under the Stock Award; or (3) delivering to the Company owned and unencumbered shares of the Common Stock of the Company. 

14.          ADJUSTMENTS UPON CHANGES IN STOCK

	 	
(a)
	
If any change is made in the stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the maximum number of shares subject to award to any person during any calendar year, and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of shares and price per share of stock subject to such outstanding Stock Awards.  Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive.  (The conversion of any convertible securities of the Company shall not be treated as a "transaction not involving the receipt of consideration by the Company".) 

	 	
(b)
	
In the event of:  (1) a dissolution, liquidation or sale of substantially all of the assets of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; or (3) a reverse merger in which the Company is the surviving corporation but the shares of the Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then to the extent permitted by applicable law:  (i) any surviving corporation or an Affiliate of such surviving corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar Stock Awards for those outstanding under the Plan, or (ii) such Stock Awards shall continue in full force and effect.  In the event any surviving corporation and its Affiliates refuse to assume or continue such Stock Awards, or to substitute similar options for those outstanding under the Plan, then, with respect to Stock Awards held by persons then performing services as Employees,  Directors or Consultants, the time during which such Stock Awards may be exercised shall be accelerated and the Stock Awards terminated if not exercised prior to such event. 

15.          AMENDMENT OF THE PLAN AND STOCK AWARDS

	 	
(a)
	
The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 14 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder is necessary for the Plan to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements. 

	 	
(b)
	
The Board may in its sole discretion submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. 

	 	
(c)
	
It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Directors or Consultants with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. 

	 	
(d)
	
Rights and obligations under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing. 

	 	
(e)
	
The Board at any time, and from time to time, may amend the terms of any one or more Stock Award; provided, however, that the rights and obligations under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the person to whom the Stock Award was granted and (ii) such person consents in writing. 

16.          TERMINATION OR SUSPENSION OF THE PLAN

	 	
(a)
	
The Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shall terminate ten (10) years from the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier.  No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 

	 	
(b)
	
Rights and obligations under any Stock Award granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except with the consent of the person to whom the Stock Award was granted. 

s17.          EFFECTIVE DATE OF PLAN

          This amendment and restatement of the Plan shall become effective on the date of closing of the initial public offering pursuant to an effective registration statement covering the offer and sale of Common Stock to the public, but no Stock Awards granted under the Plan shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 

          IN WITNESS WHEREOF, the Company has executed this Plan as of the 18th day of March, 2002.

	 	
ONSOURCE CORPORATION

	
	
By:/s/ Frank L. Jennings                           

     Frank L. Jennings, President and Chief Executive 

    Officer

	 	
By:/s/ Clifford L Neuman                           

     Clifford L. Neuman, SecretaryExhibit 10.19

EMPLOYMENT AGREEMENT

This Agreement (“Agreement”) is made and entered into as of the 1st day of October, 2003 between C. David Zoba residing at 6045 Sunset Lane, Indianapolis, Indiana  46228 (“Employee”), and Galyan’s Trading Company, Inc., an Indiana corporation (“Company”).  

          1.          TERM OF EMPLOYMENT:  Subject to the terms of this Agreement, Company hereby agrees to employ Employee, and Employee hereby agrees to accept such employment, for the period beginning on the date hereof and ending at the close of business on the second anniversary of the date hereof or on such earlier date upon which this Agreement is terminated in accordance with the provisions set forth herein (the “Initial Term”). Commencing on the first anniversary of the Commencement Date, the term of this Agreement shall automatically be extended each day by one day, until a date (the “Termination Date”) which is one (1) year following the first date on which either party delivers written notice of termination to the other.  The “Term” of this Agreement shall include any automatic extensions
pursuant to the preceding sentence.

          2.          POSITION AND DUTIES:

	
  
 
  	
  
(a)
  	
  
General Duties; Performance:  At all times during the Term, Employee   shall (i) serve as General Counsel, Secretary and Executive Vice President   responsible for real estate, store planning and legal and, in such capacity,   shall perform such duties and have such responsibilities not materially   inconsistent with the foregoing as may from time to time be assigned or   delegated to him by the Chief Executive Officer of the Company (the   “CEO”).  During this period, Employee   shall diligently and conscientiously devote his full and exclusive business   time, energy and ability to his duties and the business of Company.  At all times during the Term (i) Employee   shall perform his duties faithfully and efficiently, subject to the direction   of the CEO; and (ii) Employee shall observe and comply with all directions,   policies and regulations given or promulgated by the CEO.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Non-Contravention:  Employee represents and warrants that (i)   he has the full right and authority to enter into this Agreement and to   render the services as required under this Agreement, (ii) by signing this   Agreement he is not breaching any contract or legal obligation he owes to any   third party and (iii) he is not party to any other agreement with Company or   any other party providing for the performance by him of services or, in the   case of Company and its subsidiaries, for any compensation to be paid to him.
  

          3.          COMPENSATION, BENEFITS AND EXPENSES:  During the Term, Company shall compensate Employee for his services as follows:

	
  
 
  	
  
(a)
  	
  
Salary and Expenses:  Company shall pay Employee a base salary   at an annual rate of $350,000 for the period from the date hereof through and   including January 31, 2004, $375,000 for Company’s fiscal year 2004, and   $400,000 for Company’s fiscal year 2005, in each case less standard income   and payroll tax withholding and other authorized deductions.  Such salary shall be earned and shall be   payable in regular installments in accordance with Company’s normal payroll   practices.  Employee shall also be   entitled to reimbursement for reasonable business expenses in accordance with   Company policy.
  

	
  
 
  	
  
(b)
  	
  
Health Insurance:  Employee and his dependents shall be   eligible to participate in Company’s group health plan as in effect from time   to time for employees of Company.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Bonus:  Employee shall be eligible to receive an   annual bonus in accordance with the Company’s existing bonus program, with   such bonus to be determined based on Company achieving its targeted operating   income for the applicable fiscal year (the “Target Income”) as set forth in   Company’s annual budget for such fiscal year prepared by management and   approved by the Board.  The “Target   Bonus” shall be equal to 50% of base salary and Stay Bonus (as hereinafter   defined) in each fiscal year beginning in fiscal year 2003 and may be   increased by an uncapped, additional amount of Target Bonus pursuant to the   schedule for incremental Target Bonus increases approved by the Board from   time to time.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
Vacation:  Employee shall be entitled to annual paid   vacation in accordance with Company’s policies as in effect from time to time   for similarly situated executive employees of Company, but not less than four   weeks of paid vacation per year.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Retirement Plan:  Employee shall be eligible to participate   in Company’s retirement plans applicable to Employee, in accordance with the   terms of such plans.  Employee   understands that the Board monitors such plans or arrangements and may, from   time to time, add benefits to or delete benefits from the plans or arrangements,   or modify or terminate existing plans or arrangements, provided that no such   modification or termination shall decrease the retirement benefits accrued by   the Employee prior to the modification or termination without the written   consent of the Employee.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(f)
  	
  
Stay Bonus:  So long as this Agreement   has not been terminated by Employee or by Company for Cause (as hereinafter   defined), at the end of each of fiscal year 2003, 2004 and 2005, Company   shall pay to Employee a stay bonus of $100,000 (“Stay Bonus”) in accordance   with its customary bonus payment schedule; provided, however,   that on the final day of the Term of this Agreement, if such date is other   than the last day of Company’s fiscal year, Employee shall be entitled to   receive a pro rata portion of such Stay Bonus, which shall equal $100,000   multiplied by a fraction, the numerator of which shall be the number of days   in such fiscal year prior to such date, and the denominator of which shall be   365.  The Stay Bonus shall be deemed   earned on the last day of such fiscal year so long as this Agreement has not   been terminated by Employee or by Company for Cause, or on the last day of   the Term, as
the case may be.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(g)
  	
  
Company Stock/Options.  Subject to the provisions of this Section   3(g), beginning with the 2004 fiscal year, Employee shall be eligible to   receive an annual grant of options commensurate with Employee’s position and   responsibilities (the “Annual Options”), pursuant to the Company’s 1999 Stock   Option Plan, as amended (the “Option Plan”), with an exercise price equal to   the closing price of the Common Stock on the grant date; provided, however,   Company shall not be required to issue Annual Options to Employee after such
  

2

	
  
 
  	
  
 
  	
  
time as it has discontinued the issuance of options   to other senior management employees, using instead another form of incentive   compensation, provided that Employee receives incentive compensation in the   same form as other senior management employees.  The Annual Options granted during a fiscal year shall be   granted not later than the end of the fourth full month of that fiscal year   and shall be contingent on Employee being employed by Company on the grant   date and Company having achieved its Target Income for the immediately   preceding fiscal year.  The Annual   Options shall be governed by and subject to the terms and conditions of the   Option Plan.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(h)
  	
  
Financial Planning Services:  Company shall pay for financial planning   services for Employee from the firm of Brownson, Rehmus Foxworth, and Company   and shall indemnify Employee against any incremental income tax liability   incurred as a result of Company’s payment for such services.
  

          4.          TERMINATION:  Employee’s employment with Company during the Term may be terminated by Company under the circumstances described in this Section 4, and subject to the provisions of Section 5:

	
  
 
  	
  
(a)
  	
  
Termination by Company for Cause:  Company may immediately terminate   Employee’s employment for Cause by giving written notice to Employee   identifying in reasonable detail the act or acts said to constitute   “Cause.”  For purposes of this   Agreement, “Cause” means Employee’s (i) intentional act of fraud,   embezzlement, theft, or other material violation of the law in connection   with or in the course of his employment, (ii) intentional illegal act that is   likely to materially injure the reputation, business, or a business   relationship of Company; (iii) intentional wrongful damage to material assets   of Company; (iv) intentional wrongful disclosure of material confidential   information of Company; (v) intentional wrongful competitive activity in   material breach of Employee’s duty of loyalty; or (vi) breach of any material   term of any stated material employment policy of Company; provided Company
has given Employee written notice of such breach, and Employee has failed to   cure such breach within ten (10) days after receipt of such notice.  For purposes of the preceding sentence, no   act, or failure to act, on the part of Employee shall be deemed “intentional”   if it was due primarily to an error in judgment or negligence, but shall be   deemed “intentional” only if done, or omitted to be done, by Employee not in   good faith and without reasonable belief that his act or omission was in or   not opposed to the best interest of Company.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Termination by Company for Other   than Cause, Death, or Disability:  Company may immediately terminate Employee’s employment for any   reason other than Cause, death, or Disability by giving ten (10) days written   notice to Employee.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Death:  Employee’s employment shall automatically   terminate upon his death.
  

3

	
  
 
  	
  
(d)
  	
  
Disability:  Employee shall not be considered in breach   of this Agreement, if he fails to perform the material duties of his   employment because of a physical or mental condition that renders him unable   to perform such services (hereafter referred to as “Disability”).  If for a continuous period of twelve (12)   months during the Term, Employee fails to perform the material duties of his   employment because of Disability, his employment shall terminate on the first   anniversary of the beginning of his Disability.  If there is any dispute as to whether Employee has a   Disability, this issue shall be settled by the opinion of an impartial   reputable physician qualified to make the determination agreed upon for the   purpose by Employee and Company, or failing such agreement within fourteen   (14) days of a written request therefor by either party to the other, by an   impartial reputable physician qualified to make the
determination who is   selected by agreement of a reputable physician selected by Company and a   reputable physician selected by Employee.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Termination by Employee for Good   Reason.  Employee   may terminate employment during the Term for “Good Reason” by delivering to   Company (i) a Preliminary Notice of Good Reason (as defined below), and (ii)   not earlier than thirty (30) days and not later than three (3) months from   the delivery of such Preliminary Notice of Good Reason, a Notice of   Termination.  For purposes of this   Agreement, “Good Reason” means (i) the assignment (without the express   written consent of Employee) to Employee of a materially lower position in   the organization in terms of his responsibility, authority and status, any   material reduction in Employee’s authority or status, or requiring Employee   to perform services not commensurate with Employee’s ability, experience and   qualifications; (ii) requiring Employee (without his consent) to relocate his   primary work location more than fifty (50) miles away from the current
 principal office of Company in Plainfield, Indiana; (iii) any reduction in   Employee’s base salary or bonus opportunity; (iv) any material breach by   Company of the terms of this Agreement; or (v) failure of any successor of   the Company to assume this Agreement; provided that “Good Reason” shall not   include (A) acts not taken in bad faith which are cured by Company in all   respects not later than twenty (20) days from the receipt by Company of a   written notice from Employee identifying in reasonable detail the act or acts   constituting “Good Reason” (a “Preliminary Notice of Good Reason”) or (B)   acts taken by Company as a result of grounds for termination of employment   for Cause pursuant to Section 4(a).  A   Preliminary Notice of Good Reason shall not, by itself, constitute a Notice   of Termination.
  

          5.          OBLIGATIONS UPON TERMINATION:

	
  
 
  	
  
(a)
  	
  
Termination by Company for Cause:  If Company terminates Employee for Cause   at any time during the Term, Employee will receive his base salary and other   compensation and benefits earned under this Agreement but not yet paid or   delivered to Employee as of the date of termination, including retirement   benefits accrued through the date of such termination and payable under the   terms of such plans, but excluding any bonus.
  

4

	
  
 
  	
  
(b)
  	
  
Termination by Company for Other   Than Cause, Disability, Death, or by Employee for Good Reason:  If Company terminates Employee’s   employment for any reason other than Cause, Disability, or death at any time   during the Term, or if Employee terminates employment for Good Reason   pursuant to Section 4(e) during the Term, Employee shall receive, subject to   the limitations set forth below, (i) his base salary and other compensation   and benefits earned under this Agreement but not yet paid or delivered to   Employee as of the date of his termination, including any bonus owed for the   immediately preceding fiscal year and retirement benefits accrued through the   date of such termination and payable under the terms of such plans, (ii) a   lump sum payment equal to Employee’s Target Bonus for the fiscal year of   termination, (iii) a lump sum equal to then-current base salary, less   standard income and payroll tax withholding and other
authorized deductions,   from the date of termination until the later of the date that is (A) the   first anniversary of the date of his termination or (B) the second   anniversary of the date hereof (such period hereafter referred to as the   “Severance Period); (iv) continued health coverage for the Severance Period,   and (vi) a lump sum equal to the benefits that absent termination of   employment would have accrued under Company’s tax-qualified and non-qualified   retirement plans (which benefits shall be deemed fully vested) until the end   of the Severance Period.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Death or Disability:   If Employee’s employment terminates pursuant to Section 4(c) or (d) as a   result of his death or Disability, Employee shall be entitled to the same   compensation as provided under Section 5(a).    In addition, Employee (or his estate) shall receive a payment (at such   time as is consistent with the administration of Company’s bonus program)   equal to a pro-rata share of the annual bonus he would have earned (as   determined in a manner consistent with Section 3(c)) based on Company’s   actual results for the fiscal year.    For purposes of the preceding sentence, Employee’s pro-rata share   shall be a fraction of the number of days in the fiscal year, the numerator   of which shall be the number of days in the fiscal year prior to Employee’s   death or termination of employment pursuant to Section 4(d) and the   denominator of which shall be 365.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
Exclusive Remedy:  Employee acknowledges that, other than the   payments described in this Section 5 and Employee’s rights under any benefit   plan of Company in which Employee participates, he shall have no other claims   against, and be entitled to no other payments from, Company or its direct or   indirect parents, subsidiaries, affiliates or related companies upon any   termination or breach by Company of this Agreement.
  

          6.          LOYALTY, NON-COMPETITION AND CONFIDENTIALITY:  In consideration of the employment provided by Company, Employee agrees with Company as follows:

	
  
 
  	
  
(a)
  	
  
Non-Competition:  Employee acknowledges that his position   will give him access to confidential and highly sensitive non-public   information of substantial importance to Company, including but not limited   to financial information, identities of distributors, contractors and vendors   utilized in Company’s business, non-public forms, contracts and other   documents used in Company’s business, 
  

5

	
  
 
  	
  
 
  	
  
trade secrets used, developed or acquired by   Company, information concerning the manner and details of Company’s   operation, organization and management, Company’s business plans and   strategies, price information, customer lists and research and development   data, and that the services he will provide to Company are unique.  During the “Non-Competition Period” as   defined in Section 6(f) hereof, Employee agrees that in addition to any other   limitation, he will not directly or indirectly engage in, as an employee,   consultant or otherwise, any business in the United States primarily engaged   in the retail sporting goods or retail sports apparel business, nor will he   accept employment, consult for, or participate, directly or indirectly, in   the ownership or management of any enterprise in the United States engaged in   such a business.  Notwithstanding the   foregoing, Employee may invest as the holder of not more than
four percent   (4%) of the outstanding shares of any corporation whose stock is listed on   any national or regional securities exchange or reported by the National   Association of Securities Dealers Automated Quotation System or any successor   thereto.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Other Employees, Customers:  Employee agrees that during the   Non-Competition Period, neither he nor any entity with which he is at the   time affiliated (and which is not affiliated with Company) shall, directly or   indirectly, hire or offer to hire or entice away or in any other manner   persuade or attempt to persuade any officer, employee, agent or customer of   Company or any of its affiliates, or any person who supplies goods or   services or licenses intangible or tangible property to Company or any of its   affiliates to discontinue his, her or its relationship with such entity.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Confidentiality:  Except in the normal and proper course of   his duties hereunder, Employee will not use for his own account or disclose   to anyone else, during or after the Term of this Agreement, any confidential   or proprietary information or material relating in the reasonable opinion of   Company to Company’s operations or businesses, including Company’s   subsidiaries, which he may obtain from Company, its subsidiaries or their   officers, directors or employees, or otherwise during or by virtue of   Employee’s employment by Company.    Confidential or proprietary information or material includes, without   limitation, the following types of information or material, both existing and   contemplated, regarding Company, its direct or indirect parents,   subsidiaries, affiliates or related companies: proprietary data processing   systems and software; corporate information, including contractual   arrangements, plans,
strategies, tactics, policies, resolutions, patent,   copyright, trademark, and tradename applications, and any litigation or   negotiations; marketing information, including sales or product plans,   strategies, methods, customers, prospects, or market research data; financial   information, including cost and performance data, debt arrangements, equity   structure, investors, and holdings; operational and scientific information,   including trade secrets, technical information, and personnel information,   including personnel lists, resumes, personnel data, organizational structure,   and performance evaluations; provided, however, that confidential or   proprietary information shall not include any information that is generally   available to the public without breach of this Agreement.
  

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(d)
  	
  
Intangible Property:  All right, title and interest of every kind   and nature whatsoever, whether now known or unknown, in and to any intangible   property, including all trade names, unregistered trademarks and service   marks, brand names, patents, copyrights, registered trademarks and service   marks and all trade secrets and confidential know-how (collectively, the   “Intangible Property”), invented, created, written, developed, furnished,   produced or disclosed by Employee in the course of rendering his services to   Company hereunder shall, as between the parties hereto, be and remain the   sole and exclusive property of Company for any and all purposes and uses   whatsoever, and Employee shall have no right, title or interest of any kind   or nature in such Intangible Property, or in or to any results or proceeds   therefrom.  Employee will, at the   request of Company, execute such assignments, certificates and other
instruments as Company may from time to time deem necessary or desirable to evidence,   establish, maintain, perfect, protect, enforce or defend its right, title and   interest in and to, any of the foregoing.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Return of Documents:  Employee agrees that all documents of any   nature pertaining to activities of Company, its direct or indirect parents,   subsidiaries, affiliates and related companies, used, prepared, or made   available to Employee in the course of rendering his services to Company   hereunder, including the information or materials covered by Sections 6(c)   and 6(d) hereof, are and shall be the property of Company or, as the case may   be, its direct or indirect parents, subsidiaries, affiliates or related   companies, and that all copies of such documents shall be surrendered to   Company whenever requested by the Company.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(f)
  	
  
Non-Competition Period:  “Non-Competition Period” means the period   beginning on the date hereof and ending on the date that is the later of (i)   the second anniversary of the date of termination of Employee’s employment   with Company and (ii) three years from the date hereof .
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(g)
  	
  
Enforcement:  Employee acknowledges that irreparable   damage would result to Company or its direct or indirect parents,   subsidiaries, affiliates or related companies if the provisions of this   Section 6 are not specifically enforced, and agrees that Company shall be   entitled to any appropriate legal, equitable, or other remedy, including   injunctive relief, in respect of any failure to comply with the provisions of   this Section 6.
  

          7.          CHANGE IN CONTROL:

                        (a)      For purposes of this Section 7, the following terms shall have the meanings set out below:

                                  (i)          “Board” means the Board of directors of the Company or successor entity described in clause (a)(ii)(C) or (D) below:

                                  (ii)         “Change in Control” means the occurrence during the Term of any of the following events: (A) any acquisition by any Person or group (as defined in the Securities and Exchange

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Act of 1934 (“Exchange Act”)) other than a Permitted Shareholder of beneficial ownership of more than the greater of (I) thirty percent (30%) of Company’s then outstanding shares of Common Stock and (II) the Common Stock held by Permitted Holders, and Incumbent Directors cease to constitute more than fifty percent (50%) of the members of the Board; (B) consummation of a merger, reorganization, consolidation, or similar transaction (any of the foregoing a “Merger”), unless the Persons who were the beneficial owners of the Common Stock immediately before such Merger are the beneficial owners, immediately after such Merger, directly or indirectly, in the aggregate, of more than sixty percent (60%) of the common stock and other voting securities of the entity resulting from such Merger in substantially the same relative proportions as their ownership of the Common Stock immediately before the Merger; (C) consummation of a sale of all or
substantially all of the assets of the Company (a “Sale”), unless the Persons who were the beneficial owners of the Common Stock, immediately before such Sale, are the beneficial owners, directly or indirectly, in the aggregate, of more than sixty percent (60%) of the common stock and other voting securities of the entity or entities that own such assets immediately after the Sale; or (D) approval by the Board or the Company shareholders of a Plan of liquidation of the Company.

                                  (iii)         “Incumbent Director” means an individual who is a member of the Board and who (i) is a member of the Board immediately before (i) the change in ownership described in Section 7(a)(ii)(A) or, (ii) if a change in the composition of the Board is made before the change in ownership described in clause (i) pursuant to an agreement with the purchasing Person or group described in Section 7(a)(ii)(A), the change pursuant to such agreement.

                                  (iv)        “Permitted Holder” means Freeman, Spogli & Co., Inc. or Limited Brands, Inc., and “Permitted Holders” means Freeman, Spogli & Co., Inc. and Limited Brands, Inc.  The term “Permitted Holder” also includes any affiliate of an entity described in the preceding sentence.

                                  (v)         “Person” means an individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, or unincorporated organization, or a governmental agency, officer, department, commission, board, bureau, or instrumentality thereof.

                        (b)           If a Change in Control shall occur on or prior to the Termination Date or such earlier date upon which this Agreement is terminated in accordance with the provisions set forth herein, Options previously granted to Employee shall become fully vested on the date of such Change in Control to the extent not already vested.

          8.          ENTIRE AGREEMENT:  This Agreement contains the entire understanding between Company and Employee concerning Employee’s employment with Company, and supersedes all prior negotiations, term sheets, and agreements between them.

          9.          MODIFICATION:   No provision of this Agreement may be amended, modified, or waived except by written agreement signed by both Company and Employee.

          10.        GOVERNING LAW:   The provisions of this Agreement shall be construed in accordance with, and governed by, the laws of the State of Indiana without regard to principles of conflict of laws.

          11.        SAVINGS CLAUSE:   If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can

8

be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.

          12.        SUCCESSORS; NO ASSIGNMENT OF AGREEMENT:  Except as otherwise provided herein, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, heirs, successors and assigns.  Employee acknowledges that his services are unique and personal.  Accordingly, Employee may not assign his rights or delegate his duties or obligations under this Agreement to any person or entity.

          13.        ADDITIONAL REPRESENTATIONS:  Employee represents and warrants to Company that he is knowledgeable and sophisticated as to business matters, including the subject matter of this Agreement, that he has read this Agreement and that he understands its terms.  Employee acknowledges that, prior to assenting to the terms of this Agreement, he had been given a reasonable time to review it, to consult with counsel of his choice, and to negotiate at arm’s-length with Company as to its contents.  Company and Employee agree that the language used in this Agreement is the language chosen by the parties to express their mutual intent, and that Employee has entered into this Agreement freely and voluntarily and without pressure or coercion from anyone.  Employee represents and warrants to Company that he is not
 bound by any agreement or subject to any restriction which would interfere with or prevent his entering into or carrying out this Agreement.

          14.        RIGHTS AND WAIVERS:  All rights and remedies of the parties hereto are separate and cumulative, and no one of them, whether exercised or not, shall be deemed to be to the exclusion of any other rights or remedies or shall be deemed to limit or prejudice any other legal or equitable rights or remedies which either of the parties hereto may have.  No party to this Agreement shall be deemed to waive any rights or remedies under this Agreement unless such waiver is in writing and signed by such party.  No delay or omission on the part of either party in exercising any right or remedy shall operate as a waiver of such right or remedy or any other rights or remedies.  A waiver on any one occasion shall not be construed as a bar to or a waiver of any right or remedy on any future occasion.

          15.        SURVIVABILITY:  The expiration or termination of this Agreement shall not operate to affect such of the provisions hereof as are expressed to remain in full force and effect notwithstanding such termination.

          16.        CAPTIONS:  The captions of this Agreement are for descriptive purposes only and are not part of the provisions hereof and shall have no force or effect.

          17.        NOTICES:  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows (or to such other party or address as Company or Employee may designate in notice duly delivered to the other pursuant to this section):

If to Employee, to him at his address set forth in the preamble hereto.
 If to Company, to it at:
 Galyan’s Trading Company, Inc.
 2437 E. Main Street
 Plainfield, Indiana  46168
 Attn: Chief Executive Officer
 With copies to:

                       Norman S. Matthews
                        650 Madison Avenue-23rd Floor
                        New York, NY  10022

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          18.        NO DUTY TO MITIGATE:  Payments due to Employee following his termination of employment are not conditioned upon Employee’s attempting to mitigate his losses by seeking other employment or taking other action, and Employee shall be under no obligation to do so.    

(Remainder of Page Intentionally Left Blank)

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IN WITNESS WHEREOF, Company and Employee, intending to be legally bound, have executed this Agreement on the day and year first above written.

	
  
EMPLOYEE:
  	
  
 
  	
  
COMPANY:
GALYAN’S TRADING COMPANY, INC.
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
By:
  	
  
/s/ C. David Zoba
  	
   
 	
  
By:
  	
  
/s/ Robert B. Mang
  	
  
 
  
	
   
  	
  

  	
   
 	
   
  	
  

  	
   
  
	
   
  	
  C. David Zoba
  	
   
  	
   
  	
  Robert B. Mang
   Chief Executive Officer
  	
   
  

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