Document:

Exhibit
10.4

AMENDED AND
RESTATED REVOLVING LOAN

PROMISSORY NOTE

March 14, 2007

This Amended and Restated Revolving Loan Promissory Note (hereinafter
sometimes referred to as “this Promissory Note”) is an amendment and
restatement of, and evidences the indebtedness evidenced by, the Revolving
Line of Credit Promissory Note dated June 30, 2004 payable by Borrower to
the order of Texas State Bank, a Texas banking corporation, which Revolving
Line of Credit Promissory Note has been assigned to the Lender named below and
is hereby amended and restated to read in its entirety as hereinafter set
forth, effective on and as of March 14, 2007.

	
  Promise to Pay:

  	
  For value received, The Wornick Company, a Delaware
  corporation, promises to pay to the order of Lender the sum of $15,000,000
  or, if less, the aggregate amount advanced by Lender to the Borrower as the
  “Revolving Loan” under the Loan Agreement hereinafter referred to that
  remains unpaid, on the Maturity Date, together with interest on the unpaid
  balance of such amount, in lawful money of the United States of America, in
  accordance with all the terms, conditions and covenants set forth
  below.  Capitalized terms in this Promissory Note not otherwise defined
  herein shall have the meaning assigned such terms in that certain Loan
  Agreement, dated as of June 30, 2004, by and among Lender (as assignee of
  Texas State Bank, a Texas banking corporation), Borrower, Right Away
  Management Corporation, a Delaware corporation, The Wornick Company Right Away
  Division, a Delaware corporation, and The Wornick Company Right Away
  Division, L.P., a Delaware limited partnership (as amended from time to time,
  the “Loan Agreement”).

  
	
   

  	
   

  
	
  Borrower:

  	
  The Wornick Company, a Delaware corporation.

  
	
   

  	
   

  
	
  Borrower’s Address for Notice:

  	
   

  
	
   

  	
   

  
	
   

  	
  The Wornick Company

  
	
   

  	
  Attention: Larry L. Rose

  
	
   

  	
  President and CEO

  
	
   

  	
  4700 Creek Road

  
	
   

  	
  Cincinnati, Ohio 45242

  
	
   

  	
  Fax: (513) 791-4148

  
	
   

  	
   

  
	
   

  	
  With copy to: Robert B. McKeon

  
	
   

  	
  Veritas Capital Management II, L.L.C.

  
	
   

  	
  660 Madison Avenue

  

 

 

	
  

  	
  New York, New York 10021

  
	
   

  	
  Fax: (212) 688-9411

  
	
   

  	
   

  
	
  Lender:

  	
  DDJ Total Return Loan Fund, L.P.

  
	
   

  	
   

  
	
  Lender’s Address and Transfer Instructions for
  Payments:

  
	
   

  	
   

  
	
   

  	
  Wire transfer instructions:

  
	
   

  	
   

  
	
   

  	
  LaSalle Bank N.A. — Chicago

  
	
   

  	
  ABA 071000505

  
	
   

  	
  Acct:  722224.2

  
	
   

  	
  Acct Name:  LaSalle Trust/DDJ Total Return Loan
  Fund LP

  
	
   

  	
  Attn:  Greg Myers

  
	
   

  	
  (312) 904-0283

  
	
   

  	
   

  
	
   

  	
  Address for physical deliveries:

  
	
   

  	
   

  
	
   

  	
  LaSalle Bank NA

  
	
   

  	
  CDO Trust Services

  
	
   

  	
  Attn:  Greg Myers

  
	
   

  	
  135 South LaSalle

  
	
   

  	
  Suite 1625

  
	
   

  	
  Chicago, IL  60603

  
	
   

  	
  Account Name:  DDJ Total Return Loan Fund, L.P.

  
	
   

  	
  A/C: 722224.2

  
	
   

  	
   

  
	
  Principal Amount:

  	
  Fifteen Million and 00/100 Dollars ($15,000,000.00).

  
	
   

  	
   

  
	
  Interest Rate:

  	
  The rate per annum equal to Three Month LIBOR plus
  7.65%. If at any time Lender determines that (i) adequate and reasonable
  means do not exist for ascertaining Three Month LIBOR or (ii) as a result of
  any change in the law it is unlawful or impossible for Lender to make or
  maintain a rate of interest determined by reference to Three Month LIBOR;
  then in each case Lender shall give notice thereof to Borrower as promptly as
  practicable thereafter and, until Lender notifies Borrower that the
  circumstances giving rise to such notice no longer exist, the Interest Rate
  shall be a rate per annum equal to the Prime Rate plus 5.75%.

  
	
   

  	
   

  
	
  Default Interest Rate:

  	
  The Interest Rate otherwise in effect plus 2% per
  annum based on the actual number of days elapsed over a 360 day year.

  
	
   

  	
   

  
	
  Make-Whole Premium:

  	
  In connection with any
  termination, in whole or in part, of the Revolving Loan Commitment, the
  excess of (1) the present value of all scheduled payments of principal and/or
  interest in respect of this Promissory Note which, but for such Revolving

  

 

 2
 

 

	
  

  	
  Loan Commitment termination, would be required to be
  made following the date of the proposed termination in accordance with the
  terms hereof (assuming the outstanding principal amount of the Revolving Loan
  immediately prior to such termination was $15,000,000 and such amount remained
  outstanding until the Maturity Date), determined by discounting (on a
  semi-annual basis) the amount of such payment (or portion thereof) from the
  date such payment would be required to be made at a rate which is equal to
  0.50% over the Treasury Constant Yield at such time, and assuming that the
  Interest Rate in effect at the time of determination of the Make-Whole
  Premium remains in effect, over (2) 100% of the Revolving Loan Commitment
  subject to such termination. If the Make Whole Premium as calculated pursuant
  to the above provisions of this definition would not be a positive number,
  the Make Whole Premium is zero.

  
	
   

  	
   

  
	
  Treasury Constant Yield:

  	
  The arithmetic mean of the rates published as
  “Treasury Constant Maturities” as of 11:00 a.m. eastern standard time for the
  five Business Days preceding the date of termination the Revolving Loan
  Commitment, in whole or in part, as shown on the USD screen of the Bloomberg
  service, or if such service is not available, the Telerate service, or if
  neither the Bloomberg nor the Telerate service are available, under Section
  504 in the weekly statistical release designated H.15(519) (or any successor
  publication) published by the Board of Governors of the Federal Reserve
  System, for “On the Run” U.S. Treasury obligations corresponding to the
  period of time between such termination of the Revolving Loan Commitment and
  the Maturity Date; if no such maturity shall so exactly correspond, yields
  for the two most closely corresponding published maturities shall be
  calculated pursuant to the foregoing sentence and the Treasury Constant Yield
  shall be interpolated or extrapolated (as applicable) from such yields on a
  straight-line basis (rounding, in the case of relevant periods, to the
  nearest month).

  
	
   

  	
   

  
	
  Maturity Date:

  	
  June 30, 2011.

  
	
   

  	
   

  
	
  Prime Rate:

  	
  A per annum interest rate equal to the “Prime Rate”
  as published each day by The Wall Street Journal in its “Money Rates”
  section, and if more than one such rate is published, then the highest such
  rate. On any day when The Wall Street Journal is not published or a
  Prime Rate is not published under the Money Rates section thereof, then
  the Prime Rate published for the preceding publication date of The Wall
  Street Journal shall apply. Should the method of establishing the Prime
  Rate, or the publication of such Prime Rate, cease or be abolished, then the
  Prime Rate used for the balance of

  

 

 3
 

 

	
  

  	
  the term of this Promissory Note, if necessary,
  shall be that interest rate, established, adopted or used by The Bank of New York
  as its prime or base interest rate.

  
	
   

  	
   

  
	
  Three Month LIBOR:

  	
  The London Interbank Offered Rate for an interest
  period of three (3) months published in The Wall Street Journal. If
  more than one such rate is published, the highest of such rates shall apply.
  If such rate is not published in The Wall Street Journal on any
  applicable date of determination, Three Month LIBOR shall be determined by
  the Lender on any commercially reasonable basis selected by it. The Three
  Month LIBOR shall be determined as of the date hereof and thereafter, on the
  first day of each fiscal quarter and, once determined shall remain in effect
  until the first day of the next fiscal quarter.

  

 

Redemption
Fee:

On the date of termination
of the Revolving Loan Commitment (whether
as a result of the occurrence of the Maturity Date, the termination of the Loan
Agreement by mutual agreement of Lender and Borrower, or otherwise),
whether in whole or in part, Borrower shall pay to Lender a redemption fee in
an amount equal to 2.00% of the Deemed Revolving Loan Prepayment.  Such redemption fee shall be in addition to
the commitment termination fee payable pursuant to subsection (c) under “Payment
Terms” below. For purposes hereof, “Revolving Loan Commitment” means the
commitment of the Lender, subject to the terms of the Loan Agreement, to make
Advances to Borrower up to a maximum aggregate amount of $15,000,000 and “Deemed
Revolving Loan Prepayment” means $15,000,000 or, if such termination of the
Revolving Loan Commitment is a termination in part rather than in whole, the
amount of the portion of the Revolving Loan Commitment so terminated.

Payment
Terms:

(a)           Interest. Interest, computed at the Interest Rate
on the unpaid balance of the Principal Amount from time to time outstanding,
shall be due and payable monthly in arrears on the last day of each calendar
month, beginning March 31, 2007,
and monthly thereafter until the Maturity Date, when all accrued, but unpaid,
interest shall be due and payable. 
Interest shall also be payable on the date of any prepayment of the
Revolving Loan, to the extent accrued on the amount prepaid.

(b)           Principal. The entire unpaid Principal Amount owing
on this Promissory Note shall be due and payable on the Maturity Date.  In addition, if at any time the outstanding
principal amount of the Revolving Loan exceeds the Revolving Loan Commitment,
Borrower shall notify Lender of such fact and prepay the Revolving Loan in the
amount of such excess within one (1) Business Day following such occurrence.

(c)           Commitment Termination Fee. On the date of any
termination of the Revolving Loan Commitment (whether as a result of the
occurrence of the Maturity Date, the termination of the Loan Agreement by
mutual agreement of Lender and Borrower, or otherwise), whether in whole or in
part, Borrower shall pay to Lender, in addition to any

 4
 

 

other amounts payable in
connection therewith, a commitment termination fee equal in amount to (x) if
such Revolving Loan Commitment termination occurs on or before March 31, 2010,
the Make-Whole Premium, (y) if such Revolving Loan Commitment termination
occurs after March 31, 2010, the product of (A) the Deemed Revolving Loan
Prepayment (as defined under “Redemption Fee” above) multiplied by (B) the
applicable termination fee percentage set forth below as in effect when the
Revolving Loan Commitment termination occurs:

	
  Period during which Revolving Loan
  Commitment Termination Occurs

  	
   

  	
  Applicable Termination Fee Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2010 through
  March 31, 2011

  	
   

  	
  8.00

  	
  %

  
	
  From and after April 1, 2011

  	
   

  	
  0

  	
  %

  

 

Such commitment termination
fee shall be in addition to the redemption fee payable under the section
entitled “Redemption Fee” above.

Interest Provisions:

(a)           Rate: The Principal Amount of this Promissory Note
shall bear interest for each day at a rate per annum equal to the Interest
Rate.

(b)           Maximum Lawful Rate: The term “Maximum Lawful Rate”
means the maximum lawful contractual rate of interest, and the term “Maximum
Lawful Amount” means the maximum lawful contractual amount of interest, that are
permissible and nonusurious under applicable state or federal law for the type
of loan evidenced by this Promissory Note and the other Loan Documents.

(c)           Usury Disclaimer:  All agreements between
Lender and Borrower, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by
reason of demand for payment or acceleration of the maturity hereof or any
other circumstance whatsoever, shall the interest contracted for, charged or
received by Lender exceed the Maximum Lawful Amount. If, from any circumstance
whatsoever, interest would otherwise be payable to Lender in excess of the
Maximum Lawful Amount, the interest payable to Lender shall be reduced to the
Maximum Lawful Amount; and if from any circumstance Lender shall ever receive
any interest in excess of the Maximum Lawful Amount, an amount equal to any
excessive interest shall be applied to the reduction of the Principal Amount
and not to the payment of interest, or if such excessive interest exceeds the
unpaid Principal Amount such excess shall be refunded to Borrower. All interest
paid or agreed to be paid to Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full period until payment in full of the Principal Amount (including the period
of any renewal or extension hereof) so that the interest hereon for such full
period shall not exceed the Maximum Lawful Amount. For purposes of this
paragraph, the term interest shall include all considerations and amounts that
constitute interest under applicable usury law. This paragraph shall control
all agreements between Borrower and Lender.

(d)           Interest After Default:  All past due
installments of interest on this Promissory Note, and the unpaid balance of the
Principal Amount during the existence of any

 5
 

 

Default (including from and
after the occurrence of the Maturity Date), shall bear interest at a per annum
rate equal to the lesser of (i) the Default Interest Rate stated above and (ii)
the Maximum Lawful Rate.

Revolving Loan:

(a)           Indebtedness and Liens: This Promissory Note shall
evidence the Revolving Loan made under the Loan Agreement.  This
Promissory Note and all Loan Documents securing it and the liens and security
interests thereunder with respect to the Collateral shall remain in effect
until this Promissory Note is formally terminated in writing, and this
Promissory Note and such other Loan Documents, and liens and security interests
shall not otherwise be terminated by payment of all or any part of the
indebtedness hereby represented.  This Promissory Note is subject to and
is made pursuant to the terms of the Loan Agreement and the other Loan
Documents.

(b)           Evidence of Amount Outstanding: The books and
records of Lender relating to this Promissory Note will be evidence of the
amounts advanced, paid and owing hereunder.

Default Provisions:

(a)           Event of Default:  The occurrence of any Event
of Default under the Loan Agreement shall constitute an Event of Default
hereunder.

(b)           Remedies for an Event of Default:  If an Event of Default exists and is
continuing, Lender may, without notice or demand, declare the entire unpaid
Principal Amount and all accrued but unpaid interest thereon at once due and
payable, and exercise all rights and remedies available to Lender under the
Loan Documents and under applicable law, including but not limited to the
Uniform Commercial Code as in effect in any applicable jurisdiction.

(d)           Waiver by Borrower: Except as provided in this
Promissory Note, Borrower and all other parties liable for this Promissory Note
waive demand, presentment for payment, notice of nonpayment, protest, notice of
protest, grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and diligence in collection.

(e)           Non-Waiver by Lender: Any previous extension of
time, forbearance, failure to pursue some remedy, or acceptance of partial
payment by Lender, before or after maturity, does not constitute a waiver by
Lender of the existence of any Event of Default nor of its right to strictly
enforce the collection of this Promissory Note according to its terms.

(f)            Other Remedies Not Required: Lender shall not be
required to first file suit, exhaust all remedies, or enforce its rights
against any security in order to enforce payment of this Promissory Note.

(g)           Joint and Several Liability: The Borrower and all
of the other parties liable for the payment of this Promissory Note, such as
guarantors, endorsers, and sureties, are jointly and severally liable for the
payment of this Promissory Note.

 6
 

 

(h)           Attorney’s Fees: If Lender requires the services of
an attorney to enforce the payment of this Promissory Note or the performance
of the other Loan Documents, or if this Promissory Note is collected through
any lawsuit, probate, bankruptcy, or other judicial proceeding, Borrower agrees
to pay Lender an amount equal to its reasonable attorney’s fees and other
collection costs. This provision shall be limited by any applicable statutory
restrictions relating to the collection of attorney’s fees.

Miscellaneous Provisions:

(a)           Collateral: This Promissory Note is secured by a
lien and security interest in all the Collateral.

(b)           Application of Payments: All payments on the
indebtedness evidenced by this Promissory Note and by any documents securing or
governing this Promissory Note, other than regularly scheduled payments, shall
be applied to such indebtedness in such order and manner as Lender may from
time to time determine in its absolute discretion.

(c)           Reserved.

(d)           Subsequent Holder: All references to Lender in this
Promissory Note shall also refer to any subsequent owner or holder of this
Promissory Note by transfer, assignment, endorsement or otherwise.

(e)           Transfer or Participation:  Borrower
acknowledges and agrees that Lender may, from time to time, transfer or sell
this Promissory Note to one or more transferees or participants. Borrower
authorizes Lender to disseminate any information it has pertaining to the loan
evidenced by this Promissory Note, including, without limitation, credit
information on Borrower, any of its principals and any guarantor of this
Promissory Note, to any such transferee or participant or prospective
transferee or participant.

(f)            Set-Off: Borrower agrees that Lender may exercise
Lender’s right of set-off to pay all or any part of the outstanding Principal
Amount and accrued interest, costs, attorney’s fees, and advances owed on this
Promissory Note against any obligation Lender may have, now or hereafter, to
pay money, securities or other property to Borrower. This includes, without
limitation:

(i)            any deposit account balance, securities account balance
or certificate of deposit balance (whether matured or unmatured) Borrower has
with Lender, whether general, special, time, savings, checking or NOW account;

(ii)           any money owing to Borrower on an item presented to Lender
or in Lender’s possession for collection or exchange; and

(iii)          any repurchase agreement or any other non-deposit
obligation or credit in Borrower’s favor.

Lender’s right of set-off may be exercised upon
Borrower’s default:

(i)            without prior demand or notice;

 7
 

 

(ii)           without regard to the existence or value of any Collateral
securing this Promissory Note; and

(iii)          without regard to the number or creditworthiness of any
other persons who have agreed to pay this Promissory Note.

Lender will not be liable
for dishonor of a check or other request for payment where there are
insufficient funds in the account (or other obligation) to pay such request
because of Lender’s exercise of Lender’s right of set-off. Borrower agrees to
indemnify and hold Lender harmless from any person’s claims and the costs and
expenses, including without limitation, attorneys’ fees, incurred as a result
of such claims or arising as the result of Lender’s exercise of Lender’s right
of set-off.

If any such money,
securities or other property is also owned by some other person who has not
agreed to pay this Promissory Note (such as another depositor on a joint
account) Lender’s right of set-off will extend to the amount which could be
withdrawn or paid directly to Borrower on Borrower’s request, endorsement or
instruction alone. In addition, where Borrower may obtain payment from Lender
only with the endorsement or consent of someone who has not agreed to pay this
Promissory Note, Lender’s right of set-off will extend to Borrower’s interest
in the obligation. Lender’s right of set-off will not apply to an account or
other obligation if it clearly appears that Borrower’s rights in the obligation
are solely as a fiduciary for another or to an account, which by its nature and
applicable law (for example an IRA or other tax deferred retirement account),
must be exempt from the claims of creditors. Borrower hereby appoints Lender as
Borrower’s attorney-in-fact and authorizes Lender to redeem or obtain payment
of any certificate of deposit in which Borrower has an interest in order to
exercise Lender’s right of set-off. Such authorization applies to any
certificate of deposit even if not matured. Borrower further authorizes Lender
to withhold any early withdrawal penalty without liability against Lender in
the event such penalty is applicable as a result of Lender’s set-off against a
certificate of deposit prior to its maturity.

(g)           Successors and Assigns: The provisions of this
Promissory Note shall be binding upon and for the benefit of the successors,
assigns, heirs, executors and administrators of Lender and Borrower.  Borrower may not assign any of its rights or
delegate any of its obligations under this Promissory Note (or any part
thereof).

(h)           Other Parties Liable:  All promises, waivers,
agreements and conditions applicable to Borrower shall likewise be applicable
to and binding upon any other parties primarily or secondarily liable for the
payment of this Promissory Note, including all guarantors, endorsers and
sureties.

(i)            Modifications: Any modifications agreed to by
Lender relating to the release of liability of any of the parties primarily or
secondarily liable for the payment of this Promissory Note, or relating to the
release, substitution, or subordination of all or part of the security for this
Promissory Note, shall in no way constitute a release of liability with respect
to the other parties or security not covered by such modification.

(j)            Borrower’s Address for Notice:  All notices
required to be sent by Lender to Borrower shall be sent by United States Mail,
postage prepaid, to Borrower’s Address for

 8
 

 

Notice stated on the first
page of this Promissory Note, until Lender shall receive written notification
from Borrower of a new address for notice.

(k)           Lender’s Address for Payment: All sums payable by
Borrower to Lender shall be paid at Lender’s Address for Payment stated on the
first page of this Promissory Note, until Lender shall notify Borrower of a new
address for payment.

(1)           CHOICE OF LAW AND VENUE;
JURY TRIAL WAIVER.

(i)            THIS PROMISSORY
NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST
LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAY AT LENDER’S
OPTION BE INSTITUTED IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK OR, AT
THE LENDER’S OPTION, IN THE COURTS OF ANY OTHER JURISDICTION WHERE THE LENDER
ELECTS TO BRING SUCH SUIT, ACTION OR PROCEEDING OR WHERE ANY COLLATERAL MAY BE
FOUND, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE BORROWER AND EACH
SUBSIDIARY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE
BORROWER AT THE BORROWER’S ADDRESS FOR NOTICES SET FORTH IN OR DETERMINED
PURSUANT TO SECTION 12.01 OF THE LOAN AGREEMENT.

(ii)           BORROWER AND LENDER
EACH HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS PROMISSORY NOTE, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.  BORROWER REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS
PROMISSORY NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(m)          Time of Essence: Time is of the essence in Borrower’s
performance of all duties and obligations imposed by this Promissory Note.

 9
 

 

(n)           Business Use: Borrower represents and warrants to
Lender that the proceeds of this Promissory Note will be used solely for the purposes
permitted in the Loan Agreement.

	
  

  	
  THE WORNICK COMPANY, a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry L.
  Rose

  	
   

  
	
   

  	
   

  	
  Name: Larry L. Rose

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Wornick Company 

  
	
   

  	
   

  	
  Attention: Larry L. Rose 

  
	
   

  	
   

  	
  President and CEO 

  
	
   

  	
   

  	
  4700 Creek Road 

  
	
   

  	
   

  	
  Cincinnati, Ohio 45242

  

 

 10Exhibit 10.18

DEFERRED COMPENSATION PLAN

Allied Motion
Technologies Inc., a Colorado corporation (the “Company”) hereby establishes
the Allied Motion Technologies Inc. Deferred
Compensation Plan  (the “Plan”), effective as
of January 1, 2006.

The purposes of the Plan are
(1) to provide eligible key employees with the opportunity to defer the receipt
of certain compensation otherwise payable to them, and (2) to permit such
eligible key employees to participate in the success of the Company by
providing them with the opportunity to earn additional, performance based
compensation.

1.             Definitions.

The following definitions
shall apply for the purposes of the Plan:

1.01         “Account” means the bookkeeping account
established for each Participant under this Plan, as further described in Section
7.

1.02         “Appropriate Form” means a written or
electronic election or other form prescribed by the Board for use in connection
with this Plan.  The Board may modify,
update or replace any Appropriate Form, on a prospective basis, at any time,
and the new or modified form shall take effect with respect to each Participant
as soon as it is furnished to such Participant.

1.03         “Beneficiary” means a person or trust entitled
to receive payment under this Plan on account of the death of a Participant.

1.04         “Board” or “Board of Directors” means
the Board of Directors of the Company or, where applicable, any Committee of
the Board to which authority with respect to any matter relating to this Plan
is delegated.

1.05         “Bonus” means any bonus payable to a Participant
by the Company under the Employee Incentive Bonus Plan, or any other bonus plan
for the benefit of the Participants that is approved by the Board.

1.06         A “Change of Control”, for purposes of
the Plan, shall be defined in the manner set forth in Section 409A of the Code
and the Treasury Regulations thereunder.

1.07         “Code” means the Internal Revenue Code
of 1986, as amended.

1.08         “Deferral” means a portion of a
Participant’s Salary or Bonus which is deferred pursuant to Section 3.02 and credited
to the Participant’s Account in accordance with Section 3.03.

1.09         “Deferral Election” means each
Participant’s written election to defer the receipt of Salary or Bonus in
accordance with Section 3.02.

 

 

1.10         “Disabled” means suffering from any
mental or physical condition, other than use of alcohol or illegal use of drugs
or narcotics, which renders a Participant unable to perform substantially all
of the duties and services for the Company required of the Participant in a
satisfactory manner for 120 consecutive days, or 180 days during any 12-month
period.

1.11         “Discretionary Contribution” means an
unfunded contribution for the benefit of a Participant, as described in Section
6.

1.12         “Effective Date of the Plan” means January
1, 2006.

1.13         “Investment Funds” means those mutual
funds, available through Fidelity Investments, that are designated by the Board
from time to time as the investments available to measure adjustments to
Accounts, as provided in Section 7.03.

1.14         “Net Profit” means the after tax net
income of the Company for a Year, as stated in the Company’s certified
financial statements.

1.15         “Net Profit Target” means a threshold
amount of Net Profit for a Year, designated by the Board as a Performance
Criterion pursuant to Section 4.01.

1.16         “Participant” means an executive
employee of the Company who is designated by the Board as a participant in the
Plan.

1.17         “Performance Contribution” means an
unfunded contribution for the benefit of a Participant, as described in
Section 4.

1.18         “Performance Contribution Term” with
respect to any Participant means the period beginning on the Effective Date and
ending on the earlier of:

(a)           December 31, 2020;
or

(b)           December 31st of the
third calendar year which begins after the date of such Participant’s Separation
from Service; or

(c)           The date on which such
Participant

(i)            is terminated for “Cause”,
within the meaning of such Participant’s Employment Agreement with the Company,
or

(ii)           the date on which
the Participant directly or indirectly: (A) (whether as director, officer,
consultant, principal, employee, agent or otherwise) engages in or contributes
Participant’s knowledge and abilities to any business or entity in competition
with the Company; or (B) attempts in any manner to solicit from any
customer of the Company business of the type performed by the Company or
persuade any customer of the Company to cease doing business or reduce the
amount of business that such customer has customarily done with the Company.

 

 2
 

 

1.19         “Performance Criteria” means such Net
Profit Targets or other organizational criteria, the satisfaction of which is a
condition to the Participants’ earning Performance Contributions.

1.20         “Plan” means the Plan set forth herein,
as it may be amended from time to time in accordance with Section 11.01.

1.21         “Retirement” or “Retire” means any
termination of employment with the Company on or after the Effective Date of
the Plan.

1.22         “Salary” means the base salary payable
to each Participant by the Company.

1.23         “Separation from Service” means, with
respect to a Participant, such Participant’s death, retirement or other
termination of employment with the Company. 
For purposes of the Plan, such term will be interpreted and applied in a
manner consistent with Section 409A of the Code and the Treasury
regulations thereunder.

1.24         “Term” means the period of time during
which the Plan is in effect, beginning on the Effective Date of the Plan and
ending on the effective date of the Plan’s termination pursuant to Section 11.01
or 11.02.

1.25         “Year” means each calendar year during
the Term of this Plan

2.             Participation.

2.01         Commencement.  An employee of the Company will become a
Participant in the Plan upon being so designated by the Board, effective as of
such date as the Board shall designate (which may be prior to the date of such
designation).  As of the Effective Date
of the Plan, the only two Participants are Richard D. Smith and Richard S. Warzala.

2.02         Termination of Participation.  Once designated as a Participant, an
individual will continue as a Participant until all benefits to which he is
entitled under the Plan have been distributed to him.

3.             Deferrals.

3.01         Deferral of Salary or Bonus.

(a)           Each Participant may
elect to defer receipt of up to 100 percent of the Salary and any Bonus
otherwise payable to such Participant for a given Year.

(b)           A Participant may
defer an item of compensation only to the extent that the Participant is
entitled to receive such item of compensation. 
Upon electing such a Deferral, the Participant will have no further
right to such deferred compensation other than as provided under the Plan.

 

 3
 

 

3.02         Deferral Election.

(a)           To elect to defer Salary or a Bonus, each
Participant shall file a Deferral Election, on the Appropriate Form, with the Secretary
of the Company in accordance with this Section 3.02.

(b)           Except as provided
in subsection (e), an election to defer Salary for a Year shall be filed by
December 31 of the Year preceding the Year in which the election is to take
effect.  The election shall be effective
with respect to Salary payable for all payroll periods ending in the Year in
which it is effective.

(c)           Except as provided
in subsection (e), an election to defer a Bonus shall be filed before the
beginning of the Year during which the performance, on which the Bonus will be
based, is measured; provided, however, that if the Board determines that such
Bonus constitutes “performance based compensation”, within the meaning of
Section 409A(4)(B)(iii) of the Code and the Treasury Regulations thereunder,
and that the other applicable requirements of such Regulations are met with
respect to such Bonus, such election to defer may be made up until six months
before the end of the Year during which the applicable Performance criteria are
measured.

(d)           A Deferral Election
that is made prior to the due date for its filing, as herein provided, may be
rescinded, and a new election made, before such due date.  If not rescinded, an election to defer shall
become irrevocable at the expiration of the time for its filing, except as
provided in Section 3.05 (unforeseen emergency).

(e)           For the Year in
which an employee first becomes a Participant, such Participant may file a
Deferral Election with respect to Salary or Bonus paid for services performed
after the date such Deferral Election is filed, at any time thirty (30)
days after such employee first becomes a Participant.

3.03         Credit to Account.  The Company shall credit any Deferral to a “Deferral
Sub-Account” of each Participant’s Account, as described in Section 7.01,
 as of the date it would have otherwise
been paid to each Participant.

3.04         Vesting.  A Participant’s interest in his Deferral
Sub-Account shall be fully vested at all times.

3.05         Unforeseen Emergency.  Upon payment to a Participant pursuant to
Section 8.05 on account of an unforeseeable emergency, any Deferral Election such
Participant has in effect for the Year of the payment shall automatically
terminate.

4.             Performance
Contributions.

4.01         Basis of Performance Contributions;
Performance Criteria.  

(a)           For each
Year during the Performance Contribution Term, the Company will credit
Performance Contributions to the Accounts of Participants for a Year if the 

 

 4
 

 

Company achieves the
Performance Criteria for such Year, and the other terms of conditions of this
Plan are satisfied.

(b)           For the first Year of
the Plan, the Performance Criteria shall be:

(i)            A Net Profit
Target, which shall be a threshold amount of Net Profit, equal to a stated
return on investment (“ROI”), determined in the manner stated in Schedule 1
hereto; and

(ii)           A stated percentage
of the excess of (A) the Company’s Net Profit for the Year, over (B) the Net
Profit Target for such Year, determined in the manner stated in Schedule 1.

(c)           For each succeeding
Year during the Term, the Board shall designate the applicable Performance
Criteria for the Year on or before the ninetieth (90th) day of such Year, or as soon thereafter
as is practicable.

4.02         Credit to Account.  The Company shall credit any Performance
Contributions to a “Performance Contribution Sub-Account” of each Participant’s
Account, as described in Section 7.01, 
as of the date on which the amount of such Performance Contribution is
determined by the Board.

4.03         Vesting.

(a)           A Participant’s
interest in a Performance Contribution made on his behalf for a Year shall
become fully vested if he

(i)            is employed by the
Company on December 31 of such Year, or

(ii)           Retires, dies or
becomes Disabled during such Year.

(b)           If a Participant
Retires, dies or become Disabled during the Year, the Performance Contribution
shall nevertheless be computed with respect to the entire Year, and the
Participant shall be entitled to receive the entire Performance Contribution
for such Year.

5.             Benefits
Upon a Change of Control.

5.01         Calculation of Change of Control
Benefit.  

(a)           In the event of a
Change of Control with respect to the Company which occurs during the
Performance Contribution Term,  a special
benefit will be paid, at the time hereafter provided, to all Participants.  Such benefit will be equal to the sum of the
following:

                                                                  
(i)                       
An amount equal to a pro rata portion of the Performance Contribution that would
have been paid to such Participant for the Year in which 

 

 5
 

 

the Change of
Control occurs, based on the number of days in such Year which precede the
Change of Control; plus

(ii)           An amount
determined by multiplying

(A)                              the average of the
Performance Contributions for the benefit of such Participant for the preceding
three (3) years, or the number of years since the Effective Date of the Plan,
if less, by

(B)                                the
lesser of (I) three (3), or (II) the number of Years, or fractions thereof,
remaining after the date of the Change of Control until December 31, 2020.

(b)           For purposes of
computing the portion of special benefit described in clause (i), above:

(A)                              Performance
Criteria shall be measured for the period ending on the last day of the month
preceding the month that includes the effective date of the Change of Control;
and

(B)                                Extraordinary
costs arising out of the transactions that constitute the Change of Control
shall be disregarded.

5.02         Payment of Change of Control Benefit.  The Change of Control Benefit shall be determined
by the Board prior to the effective date of the Change of Control, and paid to
each Participant on the date of the Change of Control, or as soon thereafter as
is reasonably practicable, but in any case within the time prescribed in
Section 8.

6.             Discretionary Contributions.

6.01         Designation of Eligible Participants
and Other Matters.

(a)           The Board may, from
time to time, allocate additional Discretionary Contributions to one or more
Participants, in such amount(s) as the Board shall designate.  

(b)           No later than the
date on which the Board designates the Participant(s) who shall receive such Discretionary
Contributions, and the amount thereof, it shall also designate when and how
such amounts shall be distributed to the eligible Participants, from among the
options stated in Section 8.02.

6.02         Credit to Account.  The Company shall credit any Discretionary Contributions
to a “Discretionary Contribution Sub-Account” in each Participant’s Account as
of the date on which the Board makes the designations described in Section 6.01.

 

 6
 

 

6.03         Vesting.  A Participant’s interest in his Discretionary
Sub-Account shall be fully vested at all times.

7.             Participants’
Accounts.

7.01         Establishment of Accounts and
Sub-Accounts.  

(a)           The Company shall establish an
Account for each Participant on the Company’s books to which deferrals and contributions
under this Plan shall be credited.

(b)           Deferrals pursuant
to Section 3, and any adjustments thereto pursuant to Section 7.03, shall
be credited to a Deferral Sub-Account within the Account of the Participant
who makes such Deferral.  Performance
Contributions on behalf of a Participant pursuant to Section 4, and
any adjustments thereto pursuant to Section 7.03, shall be credited to a
Performance Contribution Sub-Account within the Account of such
Participant.  Discretionary Contributions
on behalf of a Participant pursuant to Section 6 and any adjustments thereto
pursuant to Section 7.03, shall be credited to a Discretionary Contribution
Sub-Account within the Account of such Participant.

7.02         Performance Contributions Subject to
Forfeiture.

(a)           Until and except to the extent that Performance
Contributions become vested in accordance with Section 4.03, the interest of
each Participant in his Performance Contribution Sub-Account is contingent only
and is subject to forfeiture as provided in Section 4.03.  

7.03         Imputed Investment Experience.  

(a)           Each Participant may
designate one or more Investment Funds in which stated portions of such
Participant’s Account shall hypothetically be invested, by completing the
Appropriate Form and following such procedures as the Board shall designate.  Each Participant may allocate his Account or
any Sub-Account among different Investment Funds in increments of 10%.  Furthermore, each Participant may change his
designation of Investment Funds once every month.  The Investment Funds so designated are
referred to herein as the “Designated Investment Funds”.  

(b)           Each month during
the period of a Participant’s participation in the Plan,  the Company shall adjust the
balance credited to each Participant’s Account to reflect the investment
performance of the Designated Investment Funds.

7.04         Accounting.  

(a)           The Company shall,
on a periodic basis, deliver to each Participant a written report of the
adjusted value of the Participant’s Account. 
The report shall separately show all Deferrals and other contributions with
respect to the Account, all 

 

 7
 

 

investment returns
with respect to each portion of the Account for which the Participant has made
an investment designation, and any payments to the Participant.

(b)           If the Company has
engaged a trustee, custodian, or brokerage firm to hold securities and other
property acquired with respect to the Account, an accounting or report by such trustee,
custodian, or brokerage firm shall be deemed to be the Company’s report for
purposes of this Plan, except to the extent the Company may inform the
Participants otherwise.

8.             Distributions.

8.01         Default Rule.  ’Except as provided in Section 8.04, a
Participant’s Discretionary Sub-Account and, unless the Participant elects
otherwise in accordance with Section 8.02, a Participant’s Deferral Sub-Account
and Performance Contribution Sub-Account shall be distributed in a lump sum
within thirty (30) days after the earliest of the following dates:

(a)           The end of the
Performance Contribution Term; or 

(b)           The effective date
of a Change of Control.

8.02         Election of Time and Form of Payment.  

(a)           Each Participant may
elect to have payment of his Deferral Sub-Account or Performance Contribution
Sub-Account made to him in one of the methods described in this Section 8.02
instead of in the method described in Section 8.01, subject to the requirements
stated in subsection (b) and in Section 8.03. 

(b)           To be effective with
respect to any contribution or Deferrals with respect to any Year:

(i)            An election with
respect to a Deferral must be made before the expiration of the time for filing
the Participant’s Deferral Election, as provided in Section 3.02.

(ii)           An election with
respect to a Performance Contribution must be made at least six months before
the end of the Year during which the applicable Performance Criteria are
measured.

(c)           The optional methods
are as follows:

(i)            Monthly installments over a period
of three (3) years, beginning on such date as is designated in the Participant’s
election, subject to the provisions of Section 8.03.

8.03         Changes to Payment Method.  A Participant’s election to revoke the
default payment method of Section 8.01 and to elect another payment method
under Section 8.02, or to change the payment method elected under Section 8.02,
shall be subject to the following restrictions:

 

 8
 

 

(a)           The election to
revoke or change shall not take effect until twelve (12) months after the
date it is made.

(b)           Except in the case
of an election under Section 8.05 (unforeseeable emergency), the election to
revoke or change may not provide for payment sooner than five (5) years
from the date payment would otherwise have been made or begun.

(c)           An election to
revoke or change with respect to payments scheduled to be made or begin at a
time specified by each Participant may not be made less than 12 months before
the time originally specified for payment to be made or begin.

(d)           For the purposes of
this Section 8.03, a series of installment payments shall be considered a
single payment.

8.04         Payment on Death.

(a)           Upon a Participant’s
death before the termination of his employment with the Company, the Company
shall pay the balance of the Account to each Participant’s Beneficiary or
estate, within thirty (30) days after the date of his death.

(b)           Upon a Participant’s
death after the termination of his employment with the Company, the Company
shall pay any balance of the Account to such Participant’s Beneficiary or
estate, as provided in subsection (c), in the method in effect under Section 8.01
or 8.02, as applicable.

(c)           Each Participant may
designate one or more primary and contingent Beneficiaries to receive any
amounts payable under this Plan on his death. 
The designation of Beneficiary shall be in writing, shall be made on the
Appropriate Form, shall not be effective unless filed with the Secretary of the
Company before the Participant’s death, and may be changed or revoked at any
time without notice to any beneficiary by the Participant’s filing of a
subsequent designation with the Secretary of the Company.  If a Participant designates more than one Beneficiary,
each shall share equally unless such Participant specifies a different
allocation or preference.  If any Participant
fails to designate a Beneficiary, or should no designated Beneficiary survive
him or be in existence after the Participant’s death, payment shall be made to such
Participant’s estate.

(d)           If a Beneficiary (who
is a natural person) entitled to payment should die after a Participant’s death
but before receiving payment of the entire amount payable to him, the balance
of any amounts payable shall be paid when due to the surviving Beneficiary or Beneficiaries
designated by such Participant in accordance with such Participant’s designation.  If there should be no designated Beneficiaries
surviving or in existence on the date of such Beneficiary’s death, the balance
of such payments shall be paid when due to the executor or administrator of the
last Beneficiary to die.

 

 9
 

 

8.05         Unforeseeable Emergency.

(a)           A Participant or his Beneficiary may,
in the case of an unforeseeable emergency (as defined in subsection (b)), elect
and shall be entitled to payment of an amount credited to such Participant’s
Account subject to the following conditions:

(b)           The amount payable shall
not exceed the amount reasonably necessary to satisfy the emergency need (which
may include amounts necessary to pay any Federal, State, or local income taxes
or penalties reasonably anticipated to result from the payment), taking into
account the termination of any Deferral Elections pursuant to Section 3.05.

(c)           The Company shall
not pay any amount on account of an unforeseeable emergency to the extent the
emergency is or may be relieved through reimbursement or compensation from
insurance or otherwise; or by liquidation of each Participant’s or the beneficiary’s
assets, to the extent the liquidation of such assets would not cause severe
financial hardship; or by cessation of Deferrals under this Plan.

(d)           For purposes of this
Plan, “unforeseeable emergency” means a severe financial hardship of each
Participant or his beneficiary resulting from an illness or accident of each
Participant or beneficiary or each Participant or beneficiary’s spouse or
dependent (as defined in section 152(a) of the Code); loss of each Participant’s
or beneficiary’s property due to casualty; or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
each Participant or beneficiary.  The
Company shall, in its discretion, determine whether each Participant or
beneficiary is faced with an unforeseeable emergency permitting a distribution
under this Section 8.05.  In doing so,
the Company shall refer to the definition of “unforeseeable emergency” set
forth in Treasury Regulations under Section 409A of the Code, and shall base
its determination on such definition and the relevant facts and circumstances
of each case.

8.06         Taxes.  Payments under this Plan shall be subject to
any applicable tax withholding as required under Federal, State, and local law.

9.             Source of
Payments

9.01         Unsecured Creditor.  Nothing contained in this Plan shall create a
trust or create a fiduciary relationship of any kind between the Company and each
Participant.  To the extent that any
person acquires a right to receive payments from the Company under this Plan,
such right shall be no greater than the right of any unsecured general creditor
of the Company.

9.02         Unfunded.  The Company and each Participant acknowledge
it is their intent and they agree that for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended, and for purposes of the
Code, and for all other purposes, this Plan constitutes an unfunded arrangement
maintained for the purpose of providing deferred compensation for an individual
who is a member of a select group of management or highly compensated
employees.

 

 10
 

 

10.          Prohibition
Against Assignment.

10.01       No Assignment.  Except to the extent required by law, the
right of each Participant or any beneficiary to payment of each Participant’s
interest in his Account shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of each Participant or beneficiary.

11.          Amendment
and Termination.

11.01       Action by Company.  The Company may amend or terminate this Plan
at any time by resolution of the Board of Directors, but no such amendment or
termination shall adversely affect each Participant’s rights with respect to
the amounts previously credited to his Account.

11.02       Liquidation.  This Plan shall terminate automatically upon
the liquidation or dissolution of the Company. 
Subject to Section 10.03, payment of each Participant’s Account shall be
made to him or, if each Participant is deceased, his beneficiary, in a lump sum
as soon as practicable following such liquidation or dissolution.

11.03       Conformance to Section 409A.  Notwithstanding any contrary provision of
this Section 11 or Section 8:

(a)           If the termination
of a Participant’s employment with the Company does not qualify as a separation
from service, as that term is used under Section 409A of the Code, and such Participant
is not disabled, as that term is defined under Section 409A of the Code,
then payment under Section 8.01 or 8.02 shall not be made or begin before the
relevant time has elapsed after each Participant’s separation from service with
the Company.

(b)           The time or schedule
of any payment under this Plan may not be accelerated except as otherwise
provided in this Plan and then only to the extent such acceleration would not
cause this Plan to fail to meet the requirements of section 409A of the
Internal Revenue Code.

11.04       Intent To Defer Tax  The Company and each Participant intend that
this Plan meet the requirements of Section 409A of the Code for the deferral
(until payment) of the income taxation of the compensation deferrable under this
Plan, and this Plan shall be construed accordingly.  To the extent this Plan is more restrictive
than necessary to meet the requirements of Section 409A of the Code, the
Company reserves the right to amend this Plan, provided such amendment would
not cause the Plan to fail to meet those requirements.

12.          Miscellaneous.

12.01       No Contract of Employment.  Nothing contained in this Plan shall be
deemed to create a contract of continuing employment between the Company and each
Participant.

12.02       Administration.  The Board shall administer this Plan in
accordance with the Plan’s terms and shall have full power and authority
necessary or appropriate for carrying out 

 

 11
 

 

its duties.  The Board shall have the full power to
establish any rules and procedures it finds appropriate for the administration
of this Plan.  The Board may correct any
defect or reconcile any inconsistency in the Plan to the extent the Board finds
it necessary to carry out the purposes of the Plan.  The Board shall have full power and authority
to interpret the Plan and to decide all matters arising in connection with the
administration of the Plan.  In
exercising its power and authority, the Board shall have complete discretion
and its determinations shall be final.

12.03       Participant Responsible for Investment
Designations.  Neither the Company
nor the Board shall have any duty to question any investment designations of a Participant
or to make recommendations to any  Participant with respect to investment
designations.  Neither the Company nor
the Board shall be liable for any reduction in the amount credited to a Participant’s
Account that is the result of each Participant’s investment designations or a
failure of each Participant to make or change an investment designation.

Notwithstanding
any other provision of this Plan, a Participant’s investment designation shall
not be given effect if the Board in its discretion determines that such an
investment would be unlawful or impracticable if actually made by the Company.

12.04       Investment Designations upon Death,
Incapacity, or Disability.  The
provisions of this Section 12.04 shall apply notwithstanding any contrary
provisions of the Plan.

(a)           Upon a Participant’s
death, such Participant’s Beneficiary or Beneficiaries to the extent of their
interests, or, if each Participant fails to designate a Beneficiary or no Beneficiary
survives him, the executor or administrator of each Participant’s estate, shall
succeed to each Participant’s right to make investment designations with
respect to the Account, and all references to each Participant in Section 7.03
and Section 12.03 shall be interpreted as references to the Beneficiary, Beneficiaries,
executor, or administrator, as appropriate.

(b)           If, in the Board’s
opinion, each Participant or a Beneficiary entitled to make investment
designations under this Plan is under a legal disability or incapacitated in
any way so as to be unable to manage his financial affairs, and if the Board
determines that a legal representative of each Participant or his beneficiary
is authorized to make such designations on behalf of each Participant or his Beneficiary,
then such legal representative shall be considered the each Participant or
beneficiary for all purposes of Section 7.03 and Section 12.03.

(c)           If, in the situation
described in paragraph (b) (involving each Participant’s legal disability or
incapacity), the Board determines that no legal representative is authorized to
make such designations on behalf of each Participant or his beneficiary, then
neither the Board nor the Company shall be under any obligation to take any
action with respect to the investment designations in effect with respect to
the Account.  However, in such a
situation, the Board may, from time to time, in its discretion, make investment
designations on each Participant’s behalf, but only from among Investment Funds
substantially all of the assets of which are certificates of deposit or
interest bearing accounts in banks, savings banks, or savings and loan 

 

 12
 

 

associations;
obligations of the United States government and obligations guaranteed as to
principal and interest by the United States government; obligations of a state,
a territory, or a possession of the United States, or of any political subdivision
of any of the foregoing, or of the District of Columbia, and cash deposit
accounts.  Neither the Board, the Company,
nor any trustee shall be liable to each Participant, his beneficiary, or his
estate for taking no action with respect to investment designations in effect
with respect to the Account or for taking the action described in the preceding
sentence.

12.05       Waivers.  No provision of this Plan may be modified,
waived, or discharged except by an instrument in writing executed by each
Participant and an authorized officer of the Company.  A waiver by either party of any breach of, or
compliance with, any condition or provision of this Plan shall not be deemed a
waiver of similar or dissimilar provisions or conditions at the same or any
prior or subsequent time.  No agreements
or representations, oral or otherwise, with respect to the subject matter of
this Plan have been made by either party that are not expressly set forth in
this Plan.

12.06       Construction.  The validity, interpretation, construction,
and performance of this Plan shall be governed by the internal laws of the
State of Colorado, without regard to the principles of conflicts of law.

12.07       Enforceability.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity of any other provision of
this Plan, which shall remain in full force and effect.

12.08       Successors.  This Plan shall be binding on and inure to
the benefit of the Company, its successors and assigns, each Participant, and each
Participant’s heirs, executors, administrators, and legal representatives.

 

 13
 

 

Schedule 1

Determination
of Performance Criteria

For 2006, the Performance Contribution will be based
on a Net Profit Target equivalent to an 8% return on investment, with the
investment used for such determination being shareholders’ equity at the
beginning of the year adjusted for the issuance of any Company stock during the
year.

If the Company’s net profit for 2006 exceeds this Net
Profit Target amount, 25% of the excess shall be allocated evenly to Richard D.
Smith and Richard S. Warzala.

 

 14

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