Document:

exv10w3

 

Exhibit 10.3

SECURITY AGREEMENT

     THIS SECURITY AGREEMENT is made and entered into by and between ___whose address
is ___(“Secured Party”), and MBI FINANCIAL, INC. a Nevada corporation whose
address is 1845 Woodall Rodgers, Suite 1225, Dallas, Texas 75201 (“Debtor”).

     For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor hereby grants to Secured Party a security interest in and to the Collateral,
as herein defined, and in connection therewith the parties hereby agree as follows:

     Collateral. To secure payment of the “Indebtedness”, as herein defined, Debtor hereby
assigns, transfers and sets over to Secured Party, and grants to Secured Party, a security interest
in and to the following assets (“Collateral”): Any and all personal property assets of Debtor now
owned or hereinafter acquired, tangible and intangible, specifically including, but necessarily
limited to, all goods, equipment, inventory, general intangibles, furniture, fixtures, receivables,
contracts, accounts, claims, bank accounts, deposits, trade names, service marks, licenses and any
other items of personal property wherever located.

     Indebtedness. The term “Indebtedness” as used herein, shall mean: (a) the unpaid
principal sum, accrued and unpaid interest, and other sums payable under that certain promissory
note dated of even date herewith in the original principal amount of EIGHT HUNDRED THOUSAND AND
NO/100 DOLLARS ($800,000.00) executed by Debtor and payable to the order of Secured Party (“Note”),
which Note is guaranteed by Debtor to the extent, and only to the extent, of the Collateral
described in this Security Agreement; and (b) all rearrangements, increases, renewals and
extensions of the Note.

     Representations of Debtor. Debtor represents, warrants and agrees as follows:

     (a) No financing statement or other instrument of hypothecation covering the Collateral
or its proceeds is on file in any public office except as set forth on Schedule I hereto,
and those in favor of Secured Party; except for the security interest granted by this
Security Agreement, and those set forth on Schedule I, there is no lien, security interest
or encumbrance in or on the Collateral; and Debtor is the true and lawful owner of the
Collateral.

     (b) The Collateral will not be sold, transferred, pledged or made subject to a security
agreement without the prior written consent of Secured Party.

     (c) Debtor will sign and execute alone or with Secured Party any financing statement or
other document or procure any document, and pay all costs in connection therewith necessary
to protect the security interest under this Security Agreement against the rights or
interests of third persons.

     (d) Debtor will, at Debtor’s own expense, do, make, procure, execute and deliver all
acts, things, writings and assurances as Secured Party may at any time reasonably request to
protect, assure or enforce the interests, rights and remedies of Secured Party created by,
provided in or emanating from this Security Agreement.

     (e) Debtor will pay to Secured Party all expenses (including expenses for legal
services of every kind) of, or incidental to, the enforcement of any of the provisions of
this Security Agreement, or incidental to the enforcement, repayment or collection of any of
the Indebtedness, or any actual or attempted sale, or any exchange, enforcement, collection,
compromise or settlement of any of the Collateral or receipt of the proceeds thereof, and
for the

 

 

care of the Collateral and defending or asserting the rights and claims of the Secured
Party in respect thereof, by litigation or otherwise; and all such expenses shall be
Indebtedness within the terms of this Security Agreement.

     (f) Until such time as the Note is paid in full, the Debtor will honor the terms and
conditions of any other written agreements entered into with the Secured Party.

     Uniform Commercial Code. This Security Agreement shall constitute a valid and binding
security agreement under the Uniform Commercial Code — Secured Transactions (herein called the
“Code”) creating in favor of Secured Party, until the Indebtedness is fully paid, a second priority
security interest in and to the Collateral. Accordingly, Debtor hereby acknowledges unto Secured
Party that Secured Party shall have, in addition to any and all other rights, remedies and
recourses afforded to Secured Party under this Security Agreement or the Instruments, all rights,
remedies and recourses afforded to secured parties by the Code.

     Default by Debtor. There will be a default under this Security Agreement upon the
happening of any of the following events or conditions which is not cured within any applicable
cure periods contained in the Note or any instruments securing the Note (herein called an “Event of
Default”):

     (g) If any Indebtedness secured by this Security Agreement, either principal or
interest, is not paid when due, subject to any notice and cure provisions provided for in
the Note.

     (h) If the Debtor shall fail to comply with any of the Debtor’s covenants or
undertakings in any agreement, instrument or other document between the Debtor and the
Secured Party, subject to any notice and cure provisions provided for therein.

     (i) If Debtor shall fail to comply with any of Debtor’s covenants or agreements herein
and such failure remains uncured for thirty (30) days after receipt of written notice from
the Secured Party.

     (j) If Debtor (i) applies for or consents to the appointment of a receiver, trustee,
custodian or liquidator of all or a substantial part of Debtor’s assets, or (ii) files a
voluntary petition in bankruptcy or fails generally to pay Debtor’s debts as such debts
become due, or (iii) makes a general assignment for the benefit of creditors, or (iv) files
a petition or answers same wherein Debtor seeks reorganization or rearrangement with
creditors or to take advantage of any insolvency law, or (v) files an answer admitting the
material allegations of a petition filed against Debtor in any bankruptcy, reorganization,
insolvency or similar proceeding.

     (k) If an order, non-appealable judgment or decree is entered by any court of competent
jurisdiction, upon the application of a creditor or otherwise, adjudicating Debtor as
bankrupt or insolvent or approving a petition seeking reorganization or appointing a
receiver, trustee or liquidator of all or any substantial part of Debtor’s assets and same
remains in effect for more than sixty (60) days.

     (l) If any warranty, representation or statement contained in this Security Agreement,
or any agreement, instrument or other document made or furnished to Secured Party by or on
behalf of Debtor in connection with this Security Agreement proves to have been false in any
material respect when made or furnished.

 

 

     Remedies.

     (a) When an Event of Default occurs, and at any time thereafter, Secured Party may
declare all or a part of the Indebtedness immediately due and payable and may proceed to
enforce payment of same and to exercise any and all of the rights and remedies provided by
the Code, as well as all other rights and remedies possessed by Secured Party under this
Security Agreement or otherwise at law or in equity. Secured Party may require Debtor to
assemble the Collateral and make it available to Secured Party at any place to be designated
by Secured Party which is reasonably convenient to both parties. For purposes of the notice
requirements of the Code, Secured Party and Debtor agree that notice given at least five (5)
days prior to the related action hereunder is reasonable. Secured Party shall be entitled to
immediate possession of the Collateral and all books and records evidencing same and shall
have authority to enter upon any premises, upon which said items may be situated, and remove
same therefrom. Expenses of retaking, holding, preparing for sale, selling, or the like
(“Collection Costs”), shall include, without limitation, Secured Party’s reasonable
attorneys’ fees and all such expenses shall be recovered by Secured Party before applying
the proceeds from the disposition of the Collateral toward the Indebtedness. To the extent
allowed by the Code, Secured Party may use Secured Party’s discretion in applying the
proceeds of any disposition of the Collateral to the Collection Costs or to the Indebtedness
and Debtor will remain liable for any deficiency remaining after such disposition. All
rights and remedies of Secured Party hereunder are cumulative and may be exercised singly or
concurrently. The exercise of any right or remedy will not be a waiver of any other.

     (b) Secured Party, in addition to the rights and remedies provided for in the preceding
subparagraph, shall have all the rights and remedies of a secured party under the Uniform
Commercial Code as adopted by the state where the Collateral is located at the date of any
such Event of Default, and Secured Party shall be entitled to all such other rights and
remedies as may now or hereafter exist at law or in equity for the collection of the
Indebtedness and the enforcement of the covenants herein and the foreclosure of the security
interest created hereby and to resort to any remedy provided hereunder or provided by the
Uniform Commercial Code as adopted in the state where the Collateral is located at the date
of an Event of Default, or by any other law of such state, shall not prevent the concurrent
or subsequent employment of any other appropriate remedy or remedies.

     (c) Secured Party may remedy any default, without waiving same, or may waive any
default without waiving any prior or subsequent default.

     Secured Party’s Rights.

     (a) This Security Agreement, Secured Party’s rights hereunder or said Indebtedness
hereby secured, may be assigned from time to time, and in any such case the assignee will be
entitled to all of the rights, privileges and remedies granted in this Security Agreement to
Secured Party.

     (b) Upon the occurrence of an Event of Default, Secured Party may execute, sign,
endorse, transfer or deliver, in the name of Debtor, notes, checks, drafts or other
instrument for the payment of money and receipts or any other documents necessary to
evidence, perfect or realize upon the security interest and obligations created by this
Security Agreement.

     (c) At Secured Party’s option, Secured Party may, after notice to Debtor and Debtor’s
failure to do so within thirty (30) days after receipt of said notice, discharge taxes,
liens

 

 

or security interests or other encumbrances at any time levied or placed on the
Collateral, and perform or cause to be performed Debtor’s obligations under the Collateral
to maintain the same in full force and effect. Debtor agrees to reimburse Secured Party on
demand for any payment made, or expense incurred, by Secured Party pursuant to the foregoing
authorization, plus interest thereon at the rate of interest provided for in the Note.

     (d) No remedy herein conferred upon or reserved to Secured Party is intended to be or
shall be exclusive of any other remedy, but every remedy herein provided is cumulative and
is in addition to every other remedy given hereunder or in any instrument executed in
connection herewith, or now or hereafter existing at law or in equity, or by statute; and
every such right and remedy may be exercised from time to time and as often as may be deemed
expedient. No delay or omission by Secured Party to exercise any right or remedy arising
from any default will impair any such right or remedy or will be construed to be a waiver
thereof or of any such default or an acquiescence therein.

     Release of Security Interest. Upon full and complete payment of all sums owing and to
be owing by Debtor to Secured Party and the termination of any obligations of Debtor under the
Security Agreement, together with all costs incurred in connection therewith, at the request and
expense of Debtor, Secured Party will make, execute and deliver a reassignment of the properties
assigned hereby and of the monies, revenues, proceeds, benefits and payments, if any, that may be
owing upon the aforesaid Collateral to Debtor but without covenant or warranty, however, of any
kind or character, express or implied, and with the provisions that Secured Party will not be
required or called upon to refund or account for any payments properly made to Secured Party which
have been or may be properly applied to any Indebtedness secured or to be secured hereby.

     Validity of Security Interest. No security taken hereafter as security for payment of
any part or all of the Indebtedness shall impair in any manner or effect this Security Agreement;
all such present and future additional security to be considered as cumulative security. Any of the
Collateral may be released from this Security Agreement without altering, varying or diminishing in
any way the force, effect, lien, security interest or charge of this Security Agreement as to the
Collateral not expressly released, and this Agreement shall continue as a second lien, security
interest and charge on all of the Collateral not expressly released until all sums and indebtedness
secured hereby have been paid in full.

     Notices. Any notice, request or other document shall be in writing and sent by
registered or certified mail, return receipt requested, postage prepaid and addressed to the party
to be notified at the following addresses, or such other address as such party may hereafter
designate by written notice to all parties, which notice shall be effective as of the date of
posting:

     If to Lender:

If to Borrower:

MBI Mortgage, Inc.

1845 Woodall Rodgers Freeway, Suite 1225

Dallas, Texas 75201

Attention: Patrick A. McGeeney

     Texas Law. This Security Agreement and the obligations of the parties hereunder are
to be interpreted, construed and enforced in accordance with the laws of the State of Texas.

 

 

     Severability. If any provision of this Security Agreement or the application thereof
to any person or circumstance is held to be invalid or unenforceable to any extent, the remainder
of this Security Agreement and the application of such provisions to other persons or circumstances
is not to be affected thereby and is to be enforced to the full extent permitted by law.

     Successors and Assigns. This Security Agreement inures to the benefit of, and is
binding upon, Debtor and Secured Party and their respective heirs, legal representatives,
successors and assigns.

     Gender. The use of any gender herein shall include the other genders.

     Scope. Nothing herein contained will in any way limit or be construed as limiting the
right of Secured Party to collect any note, item, sum or amount secured or to be secured hereby
only out of the properties assigned hereby or out of the revenues, monies, proceeds, benefits and
payments accruing and to accrue unto Debtor, under and by virtue of said Collateral, but it is
expressly understood and provided that all such Indebtedness and amounts secured and to be secured
hereby are, and shall constitute, absolute and unconditional obligations of Debtor to pay to
Secured Party the amount provided for instruments executed in connection herewith and all
agreements with reference thereto at the time and in the manner therein specified or provided.
Debtor agrees that Debtor will, from time to time, and upon request of Secured Party, furnish
satisfactory proof that the properties assigned hereby and the revenues, monies, proceeds, benefits
and payments accruing and to accrue under said Collateral are free and clear of all lawful demands,
claims and liens of any and all persons whomsoever.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

     IN WITNESS WHEREOF, this Security Agreement is dated the                 day of June,
2007.

LENDER:

By:

	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	Name:  	 	 	 
	Title:  	 	 	 

BORROWER:

MBI FINANCIAL, INC.

	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	Name:  	 	 	 
	Title:  	 	 	 

 

 

SCHEDULE I

PERMITTED LIENS

	1.	 	First lien on all assets of Debtor in favor of Old Master Giotto Fund Ltd., a Cayman Islands
exempt company.exv10w19xby

 

Exhibit 10.19(b)

NEENAH ENTERPRISES, INC.

INCENTIVE COMPENSATION PLAN

     ACP Holding Company, which will be renamed Neenah Enterprises, Inc. (the “Company”), a
Delaware corporation, hereby establishes and adopts the following Neenah Enterprises, Inc.
Incentive Compensation Plan (the “Plan”) to provide incentive awards that are intended to qualify
as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended.

1. PURPOSES OF THE PLAN

The purposes of the Plan are to advance the interests of the Company and its stockholders and
assist the Company in attracting and retaining officers and other key employees of the Company and
its Affiliates who, because of the extent of their responsibilities can make significant
contributions to the Company’s success by their ability, industry, loyalty and exceptional
services, by providing incentives and financial rewards to such persons.

2. DEFINITIONS

     2.1. “Affiliate” shall mean any corporation, partnership or other organization of which the
Company owns or controls, directly or indirectly, not less than 50% of the total combined voting
power of all classes of stock or other equity interests.

     2.2. “Award” shall mean any amount granted to a Participant under the Plan.

     2.3. “Board” shall mean the board of directors of the Company.

     2.4. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto.

     2.5. “Committee” shall mean the Compensation Committee of the Board or any subcommittee
thereof formed by the Compensation Committee to act as the Committee hereunder. For purposes of
satisfying the requirements of Section 162(m) of the Code and the regulations thereunder, the
Committee is intended to consist solely of “outside directors” as such term is defined in Section
162(m) of the Code.

     2.6. “Disability” means any physical or mental condition of a Participant that in the opinion
of the Committee renders the Participant incapable of continuing to be an employee of the Company
and its Affiliates.

     2.7. “Participant” shall mean the Company’s Chief Executive Officer and each other officer or
key employee of the Company or any Affiliate of the of the Company selected by the Committee
pursuant to Section 4.1 to participate in this Plan.

     2.8. “Performance Criteria” shall mean net sales; revenue; revenue growth or product revenue
growth; operating income (before or after taxes); pre- or after-tax income (before or after
allocation of corporate overhead and bonus); earnings per share; net income (pre-tax or

 

 

after-tax and with adjustments as stipulated); total shareholder return; return on assets, net
assets, equity, tangible book value or capital employed; appreciation in and/or maintenance of the
price of the shares of common stock or any other publicly-traded securities of the Company; market
share; gross profits; earnings (including earnings before taxes, earnings before interest and taxes
or earnings before interest, taxes, depreciation and amortization), and adjusted versions of those
or similar measures; economic value-added models or equivalent metrics; comparisons with various
stock market indices; reductions in costs; cash flow or cash flow per share (before or after
dividends); return on capital (including return on total capital or return on invested capital);
cash flow return on investment; improvement in or attainment of expense levels or working capital
levels; operating margins, gross margins or cash margin; year-end cash; debt reductions;
stockholder equity; market share; regulatory achievements; loss ratio, expense ratio, incremental
profit contribution measurements (sales less variable costs), operational type metrics ((including
but not limited to lost time accidents, % scrap, OEE (overall equipment efficiency), man-hours per
ton, on time delivery, workers compensation claims, customer returns, etc.)), capacity utilization
metrics; and implementation, completion or attainment of measurable objectives with respect to
research, development, products or projects, production volume levels, acquisitions and
divestitures and recruiting and maintaining personnel.

     2.9. “Performance Period” shall mean the Company’s fiscal year or such other period that the
Committee, in its sole discretion, may establish, provided no Performance Period shall be more than
five years in length.

3. ELIGIBILITY AND ADMINISTRATION

     3.1. Eligibility. The individuals eligible to participate in the Plan shall be the Company’s
Chief Executive Officer and any other officer or key employee of the Company or an Affiliate
selected by the Committee to participate in the Plan (each, a “Participant”).

     3.2. Administration. (a) The Plan shall be administered by the Committee. The Committee
shall have full power and authority, subject to the provisions of the Plan and subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be
adopted by the Board, to: (i) select the Participants to whom Awards may from time to time be
granted hereunder; (ii) determine the terms and conditions, not inconsistent with the provisions of
the Plan, of each Award; (iii) determine the time when Awards will be granted and paid and the
Performance Period to which they relate; (iv) determine the performance goals for Awards for each
Participant in respect of each Performance Period based on the Performance Criteria and certify the
calculation of the amount of the Award payable to each Participant in respect of each Performance
Period; (v) determine whether payment of Awards may be deferred by Participants; (vi) interpret and
administer the Plan and any instrument or agreement entered into in connection with the Plan; (vii)
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent that the Committee shall deem desirable to carry it into effect;
(viii) establish such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (ix) make any other determination and take any other
action that the Committee deems necessary or desirable for administration of the Plan.

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     (b) Decisions of the Committee shall be final, conclusive and binding on all persons or
entities, including the Company, any Affiliate, any Participant and any person claiming any benefit
or right under an Award or under the Plan.

     (c) To the extent not inconsistent with applicable law or the rules and regulations of the
principal securities market on which the Company’s securities are listed or qualified for trading),
including the applicable provisions of Section 162(m) of the Code, the Committee may delegate to
one or more officers of the Company or a committee of officers the authority to take actions on its
behalf pursuant to the Plan.

4. AWARDS

     4.1. Performance Period; Performance Goals. Not later than the earlier of (i) 90 days after
the commencement of each fiscal year of the Company and (ii) the expiration of 25% of the
Performance Period, the Committee shall, in writing, designate one or more Performance Periods,
determine the Participants for such Performance Periods and determine the performance goals for
determining the Award for each Participant for such Performance Period(s) based on attainment of
specified levels of one or any combination of the Performance Criteria. Such performance goals may
be based solely by reference to the Company’s performance or the performance of an Affiliate,
division, business segment or business unit of the Company, or based upon the relative performance
of other companies or upon comparisons of any of the indicators of performance relative to other
companies. The Committee may also exclude charges related to an event or occurrence which the
Committee determines should appropriately be excluded, including (a) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either
not directly related to the operations of the Company or not within the reasonable control of the
Company’s management, or (c) the cumulative effects of tax or accounting changes in accordance with
generally accepted accounting principles. Such performance goals shall otherwise comply with the
requirements of, Section 162(m) of the Code, and the regulations thereunder.

     4.2. Certification. At such time as it shall determine appropriate following the conclusion
of each Performance Period, the Committee shall certify, in writing, the amount of the Award for
each Participant for such Performance Period.

     4.3. Payment of Awards. The amount of the Award actually paid to a Participant may, in the
sole discretion of the Committee, be less than the amount otherwise payable to the Participant
based on attainment of the performance goals for the Performance Period as determined in accordance
with Section 4.1. The actual amount of the Award determined by the Committee for a Performance
Period shall be paid in cash or, to the extent provided in such plan share awards under a
shareholder-approved stock plan of the Company. Payment to each Participant shall be made no later
than the fifteenth day of the third month following the end of the fiscal year of the Company in
which the applicable Performance Period ends. Payments to Participants who are employees of
Affiliates of the Company may be paid directly by such entities.

     4.4. Commencement or Termination of Employment. If a person becomes a Participant during a
Performance Period (whether through promotion or commencement of employment) or if a person who
otherwise would have been a Participant dies, retires or is

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Disabled, or if the person’s employment is otherwise terminated, during a Performance Period
(except for cause, as determined by the Committee in its sole discretion), the Award payable to
such a Participant may, in the discretion of the Committee, be proportionately reduced based on the
period of actual employment during the applicable Performance Period.

     4.5. Maximum Award. The maximum dollar value of an Award payable to any Participant in any
12-month period is $2,500,000.

5. MISCELLANEOUS

     5.1. Amendment and Termination of the Plan. The Board may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any requirement for
stockholder approval imposed by applicable law, including Section 162(m) of the Code. No
amendments to, or termination of, the Plan shall in any way impair the rights of a Participant
under any Award previously granted without such Participant’s consent.

     5.2. Section 162(m) of the Code. Unless otherwise determined by the Committee, the provisions
of this Plan shall be administered and interpreted in accordance with Section 162(m) of the Code to
ensure the deductibility by the Company of the payment of Awards.

     5.3. Tax Withholding. The Company or an Affiliate shall have the right to make all payments
or distributions pursuant to the Plan to a Participant, net of any applicable federal, state and
local taxes required to be paid or withheld. The Company or an Affiliate shall have the right to
withhold from wages, Awards or other amounts otherwise payable to such Participant such withholding
taxes as may be required by law, or to otherwise require the Participant to pay such withholding
taxes. If the Participant shall fail to make such tax payments as are required, the Company or an
Affiliate shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other action as may be
necessary to satisfy such withholding obligations.

     5.4. Right of Discharge Reserved; Claims to Awards. Nothing in this Plan shall provide any
Participant a right to receive any Award or payment under the Plan with respect to a Performance
Period. Nothing in the Plan nor the grant of an Award hereunder shall confer upon any Participant
the right to continue in the employment of the Company or an Affiliate or affect any right that the
Company or an Affiliate may have to terminate the employment of (or to demote or to exclude from
future Awards under the Plan) any such Participant at any time for any reason. Except as
specifically provided by the Committee, the Company shall not be liable for the loss of existing or
potential profit from an Award granted in the event of the termination of employment of any
Participant. No Participant shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Participants under the Plan.

     5.5. Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company or an Affiliate, division or business unit of
the Company. Any income or gain realized pursuant to Awards under the Plan constitute a special
incentive payment to the Participant and shall not be taken into account, to the extent permissible
under applicable law, as compensation for purposes of any of the employee benefit

- 4 -

 

plans of the Company or an Affiliate except as may be determined by the Committee or by the
Board or board of directors of the applicable Affiliate.

     5.6.Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.

     5.7. Severability. If any provision of the Plan shall be held unlawful or otherwise invalid
or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a)
be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid
and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any
other provision of the Plan or part thereof, each of which shall remain in full force and effect.
If the making of any payment or the provision of any other benefit required under the Plan shall be
held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such
unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from
being made or provided under the Plan, and if the making of any payment in full or the provision of
any other benefit required under the Plan in full would be unlawful or otherwise invalid or
unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such
payment or benefit from being made or provided in part, to the extent that it would not be
unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.

     5.8. Construction. As used in the Plan, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed
by the words “without limitation.”

     5.9. Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation and deferred compensation if permitted by the Committee. With respect to
any payments not yet made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general creditor of the Company.

     5.10. Governing Law. The Plan and all determinations made and actions taken thereunder, to
the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of Delaware, without reference to principles of conflict of laws that
might result in the application of the laws of another jurisdiction, and shall be construed
accordingly.

     5.11. Effective Date of Plan. The Plan shall be effective upon its approval by the holders of
the then outstanding securities of the Company entitled to vote generally in the election of
directors. The Plan shall be null and void and of no effect if the foregoing condition is not
fulfilled. The first award under the Plan shall be for the fiscal year ending September 30, 2008.

- 5 -

 

     5.12. Captions. The captions in the Plan are for convenience of reference only, and are not
intended to narrow, limit or affect the substance or interpretation of the provisions contained
herein.

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