Document:

2007 Stock Option and Incentive Plan

    Exhibit
      10.1

     

     

    LSB
      FINANCIAL CORP.

    2007
      STOCK OPTION AND INCENTIVE PLAN

     

     

    1. Plan
      Purpose.  The
      purpose of the Plan is (i) to align the personal interests of Plan Participants
      with those of the shareholders of the Company, (ii) to encourage key individuals
      to accept or continue employment or service with the Company and its
      subsidiaries, and (iii) to furnish incentive to such key individuals to improve
      operations and increase profits by providing such key individuals the
      opportunity to acquire Common Stock of the Company or to receive monetary
      payments based on the value of such Common Stock. It is intended that certain
      Awards granted under the Plan will qualify as performance-based compensation
      within the meaning of Section 162(m) of the Code, to the extent
      applicable.

     

    2. Definitions. 
      The
      following definitions are applicable to the Plan.

     

    “Affiliate”
      — means any “parent corporation” or “subsidiary corporation” of the Company as
      such terms are defined in Section 424(e) and (f), respectively, of the
      Code.

     

    “Award”
—
      means the grant by the Committee of Incentive Stock Options, Non-Qualified
      Stock
      Options, Unrestricted Stock, Restricted Stock, Performance Shares, Performance
      Units, Stock Appreciation Rights or any combination thereof, as provided in
      the
      Plan.

     

    “Board”
—
      means the Board of Directors of the Company.

     

    “Change
      in Control” — means each of the events specified in the following clauses
      (i) through (iii): (i) any third “person” (including a group), as
      defined in Section 13(d)(3) of the Exchange Act shall, after the date of
      the adoption of the Plan by the Board, first become the beneficial owner of
      shares of the Company with respect to which 25% or more of the total number
      of
      votes for the election of the Board of Directors of the Company may be cast,
      (ii) as a result of, or in connection with, any cash tender offer, exchange
      offer, merger or other business combination, sale of assets or contested
      election, or combination of the foregoing, the persons who were directors of
      the
      Company shall cease to constitute a majority of the Board of Directors of the
      Company or (iii) the shareholders of the Company shall approve an agreement
      providing either for a transaction in which the Company will cease to be an
      independent publicly owned entity or for a sale or other disposition of all
      or
      substantially all the assets of the Company; provided, however, that the
      occurrence of any of such events shall not be deemed a Change in Control if,
      prior to such occurrence, a resolution specifically providing that such
      occurrence shall not constitute a Change in Control under the Plan shall have
      been adopted by at least a majority of the Board of Directors of the Company.
      

     

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

     

    “Committee”
      — means the Committee referred to in Section 3 hereof. 

     

    “Company”
      — means LSB Financial Corp., an Indiana corporation. 

     

    “Continuous
      Service” — means, in the case of an Employee, the absence of any interruption or
      termination of service as an Employee of the Company or an Affiliate; and in
      the
      case of an individual who is not an Employee, the absence of any interruption
      or
      termination of the service relationship between the individual and the Company
      or an Affiliate. Service shall not be considered interrupted in the case of
      sick
      leave, military leave or any other leave of absence approved by the Company
      or
      in the case of any transfer between the Company and an Affiliate or any
      successor to the Company. 

     

    “Director”
      — means any individual who is a member of the Board or who is serving as a
      Director Emeritus of the Company or any Affiliate. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Disability”
      — means, with respect to a Participant, a medically determinable physical or
      mental impairment that can be expected to result in death or to last for a
      continuous period of not less than 12 months and that entitles the Participant
      to income replacement benefits under the Company’s disability plan.

     

    “Employee”
      — means any person, including an officer, who is employed by the Company or any
      Affiliate. 

     

    “Exchange
      Act” — means the Securities Exchange Act of 1934, as amended. 

     

    “Exercise
      Price” — means the price per Share at which the Shares subject to an Option may
      be purchased upon exercise of such Option. 

     

    “Incentive
      Stock Option” — means an option to purchase Shares granted by the Committee
      pursuant to the terms of the Plan that is intended to qualify under
      Section 422 of the Code. 

     

    “Market
      Value” — means the last reported sale price on the date in question (or, if
      there is no reported sale on such date, on the last preceding date on which
      any
      reported sale occurred) of one Share on the principal exchange on which the
      Shares are listed for trading, or if the Shares are not listed for trading
      on
      any exchange, the mean between the closing high bid and low asked quotations
      of
      one Share on the date in question as reported by NASDAQ or any similar system
      then in use, or, if no such quotations are available, the fair market value
      on
      such date of one Share as the Committee shall determine. 

     

    “Non-Qualified
      Stock Option” — means an option to purchase Shares granted by the Committee
      pursuant to the terms of the Plan, which option is not intended to qualify
      under
      Section 422 of the Code. 

     

    “Option”
      — means an Incentive Stock Option or a Non-Qualified Stock Option. 

     

    “Participant”
      — means any individual selected by the Committee to receive an Award.

     

    “Performance
      Criteria” — means any of the following areas of performance of the Company, or
      any Affiliate, as determined under generally accepted accounting principles
      or
      as reported by the Company: (i) earnings per share; (ii) return on
      equity; (iii) return on assets; (iv) operating income; (v) market
      value per share; (vi) EBITDA; (vii) cash flow; (viii) net income
      (before or after taxes); (ix) revenues; (x) cost reduction goals;
      (xi) market share; (xii) total return to shareholders;
      (xiii) improvements in the Company’s credit quality as measured by changes
      to the Company’s allowance for loan losses, the ratio of the allowance for loan
      losses to total loans, net of unearned income, or the ratio of net charge-offs
      to average loans, net of unearned income; (xiv) fee income; (xv) net
      interest income; (xvi) growth in loans; and (xvii) growth in
      deposits.

     

    “Performance
      Goal” — means if the Performance Shares, Performance Units or Restricted Stock
      is intended to comply with Code Section 162(m), an objectively determinable
      performance goal established by the Committee with respect to a given award
      of
      Performance Shares, Performance Units or Restricted Stock that is based on
      one
      or more Performance Criteria and if the Performance Shares, Performance Units
      or
      Restricted Stock are not intended to comply with Code Section 162(m) any
      performance goal established by the Committee based on any performance criteria.
      

     

    “Performance
      Cycle” — means the period of time, designated by the Committee, over which
      Performance Shares or Performance Units may be earned. 

     

    “Performance
      Shares” — means Shares awarded pursuant to Section 12 of the Plan.

     

    “Performance
      Unit” — means an Award granted to a Participant pursuant to Section 12 of
      the Plan. 

     

    “Plan”
—
      means this 2007 Stock Option and Incentive Plan of the Company. 

     

    “Reorganization”
      — means the liquidation or dissolution of the Company or any merger,
      consolidation or combination of the Company (other than a merger, consolidation
      or combination in 

    
      
        
        

      

      
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    which
      the
      Company is the continuing entity and which does not result in the outstanding
      Shares being converted into or exchanged for different securities, cash or
      other
      property or any combination thereof). 

     

    “Restricted
      Period” — means the period of time selected by the Committee for the purpose of
      determining when restrictions are in effect under Section 10 hereof with
      respect to Restricted Stock awarded under the Plan. 

     

    “Restricted
      Stock” — means Shares which have been contingently awarded to a Participant by
      the Committee subject to the restrictions referred to in Section 10 hereof,
      so long as such restrictions are in effect. 

     

    “Retirement”
      — means, with respect to a Participant, the termination of the Participant’s
      status as an Employee, for any reason other than death, after having attained
      age 65. 

     

    “Securities
      Act” — means the Securities Act of 1933, as amended. 

     

    “Shares”
      — means the Common Stock, par value $0.01 per share, of the Company.

     

    “Stock
      Appreciation Rights” — means an Award granted to a Participant pursuant to
      Section 11 the Plan. 

     

    “Unrestricted
      Stock” — means Shares awarded to a Participant by the Committee without any
      restrictions. 

     

    3. Administration. 
      The
      Plan
      shall be administered by a Committee consisting of two or more members of the
      Board, each of whom shall be a “non-employee director” as provided under Rule
      16b-3 of the Exchange Act, and an “outside director” as provided under Code
      Section 162(m). The members of the Committee shall be appointed by the
      Board. Except as limited by the express provisions of the Plan, the Committee
      shall have sole and complete authority and discretion to (a) select Participants
      and grant Awards; (b) determine the number of Shares to be subject to types
      of Awards generally, as well as to individual Awards granted under the Plan;
      (c) determine the terms and conditions upon which Awards shall be granted
      under the Plan; (d) prescribe the form and terms of instruments evidencing
      such grants; (e) establish from time to time procedures and regulations for
      the administration of the Plan; (f) interpret the Plan; and (g) make
      all determinations deemed necessary or advisable for the administration of
      the
      Plan. The Committee shall, without limitation, have authority to accelerate
      the
      vesting of Awards made hereunder and to make amendments or modifications of
      the
      terms and conditions (including exercisability of the Awards) relating to the
      effect of termination of employment or service of the Participant.

     

    A
      majority of the Committee shall constitute a quorum, and the acts of a majority
      of the members present at any meeting at which a quorum is present, or acts
      approved in writing by all members of the Committee without a meeting, shall
      be
      acts of the Committee. All determinations and decisions made by the Committee
      pursuant to the provisions of the Plan shall be final, conclusive, and binding
      on all persons, and shall be given the maximum deference permitted by law.
      

     

    4. Participants. 
      The
      Committee may select from time to time Participants in the Plan from those
      Directors, Employees or consultants of the Company or its Affiliates who, in
      the
      opinion of the Committee, have the capacity for contributing in a substantial
      measure to the successful performance of the Company or its Affiliates.

     

    5. Substitute
      Options.  In
      the
      event the Company or an Affiliate consummates a transaction described in Code
      Section 424(a), persons who become Employees or Directors on account of
      such transaction may be granted Options in substitution for Options granted
      by
      the former employer. The Committee, in its sole discretion and consistent with
      Code Section 424(a) shall determine the Exercise Price of the substitute
      Options. 

    
      
        
        

      

      
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    6. Shares
      Subject to Plan.  Subject
      to adjustment by the operation of Section 13 hereof, the maximum number of
      Shares with respect to which Awards may be made under the Plan is 81,000 Shares,
      all of which may be subject to grants of Incentive Stock Options. The number
      of
      Shares which may be granted under the Plan to any Participant during any
      calendar year of the Plan under all forms of Awards shall not exceed 12,150
      Shares. The Shares with respect to which Awards may be made under the Plan
      may
      either be authorized and unissued shares or unissued shares heretofore or
      hereafter reacquired and held as treasury shares. Any Award that expires,
      terminates or is surrendered for cancellation, or with respect to Restricted
      Shares, which is forfeited (so long as any cash dividends paid on such Shares
      are also forfeited), may be subject to new Awards under the Plan with respect
      to
      the number of Shares as to which an expiration, termination, cancellation or
      forfeiture has occurred. Additionally, Shares that are withheld by the Company
      or delivered by the Participant to the Company in order to satisfy payment
      of
      the Exercise Price or any tax withholding obligation and Shares granted pursuant
      to an Award which is subsequently settled in cash rather than Shares, may be
      subject to new Awards under the Plan. 

     

    7. General
      Terms and Conditions of Options.  The
      Committee shall have full and complete authority and discretion, except as
      expressly limited by the Plan, to grant Options and to provide the terms and
      conditions (which need not be identical among Participants) thereof. In
      particular, the Committee shall prescribe the following terms and conditions:
      (a) the Exercise Price, which shall not be less than the Market Value per
      Share on the date the Option is granted, (b) the number of Shares subject
      to, and the expiration date of, any Option, (c) the manner, time and rate
      (cumulative or otherwise) of exercise of such Option, (d) the restrictions,
      if any, to be placed upon such Option or upon Shares which may be issued upon
      exercise of such Option, (e) the conditions, if any, under which a
      Participant may transfer or assign Options, and (f) any other terms and
      conditions as the Committee, in its sole discretion, may determine. The
      Committee may, as a condition of granting any Option, require that a Participant
      agree to surrender for cancellation one or more Options previously granted
      to
      such Participant.

     

    8. Exercise
      of Options.

     

    (a) Except
      as
      provided in Section 16, an Option granted under the Plan shall be
      exercisable during the lifetime of the Participant to whom such Option was
      granted only by such Participant, and except as provided in paragraphs (c),
      (d) and (e) of this Section 8, no such Option may be exercised
      unless at the time such Participant exercises such Option, such Participant
      has
      maintained Continuous Service since the date of the grant of such Option.

     

    (b) To
      exercise an Option under the Plan, the Participant must give written notice
      to
      the Company (which shall specify the number of Shares with respect to which
      such
      Participant elects to exercise such Option) together with full payment of the
      Exercise Price. The date of exercise shall be the date on which such notice
      is
      received by the Company. Payment shall be made either (i) in cash
      (including by check, bank draft or money order), (ii) by delivering Shares
      already owned by the Participant for at least six (6) months prior to the
      date of exercise and having a Market Value on the date of exercise equal to
      part
      or all of the Exercise Price, (iii) a combination of cash and such Shares,
      (iv) if the Participant may do so in conformity with Regulation T (12 C.F.R.
§
220.3(e)(4)) without violating § 16(b) or § 16(a) of the Exchange Act, pursuant
      to a broker’s cashless exercise procedure, by delivering a properly executed
      notice together with irrevocable instructions to a broker to promptly deliver
      to
      the Company the total option price, in cash and, if desired, the amount of
      any
      taxes to be withheld from the Participant’s compensation as a result of any
      withholding tax obligation of the Company or any of its Affiliates, as specified
      in such notice, or (v) by any other means determined by the Committee in
      its sole discretion. 

     

    (c) If
      the
      Continuous Service of a Participant is terminated for cause, or voluntarily
      by
      the Participant for any reason other than death, Disability or Retirement,
      all
      rights under any Option of such Participant shall terminate immediately upon
      such cessation of Continuous Service. If the 

    
      
        
        

      

      
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    Continuous
      Service of a Participant is terminated by reason of death, Disability or
      Retirement, such Participant may exercise such Option, but only to the extent
      such Participant was entitled to exercise such Option at the date of such
      cessation, at any time during the remaining term of such Option, or, in the
      case
      of Incentive Stock Options, during such shorter period as the Committee may
      determine and so provide in the applicable instrument or instruments evidencing
      the grant of such Option. If a Participant shall cease to maintain Continuous
      Service for any reason other than those set forth above in this paragraph
      (c) of this Section 8, such Participant may exercise such Option to
      the extent that such Participant was entitled to exercise such Option at the
      date of such cessation but only within the period of three months immediately
      succeeding such cessation of Continuous Service, and in no event after the
      expiration date of the subject Option; provided, however, that such right of
      exercise after cessation of Continuous Service shall not be available to a
      Participant if the Company otherwise determines and so provides in the
      applicable instrument or instruments evidencing the grant of such Option.

     

    (d) In
      the
      event of the death of a Participant while in the Continuous Service of the
      Company or an Affiliate, the person to whom any Option held by the Participant
      at the time of his death is transferred by will or by the laws of descent and
      distribution may exercise such Option on the same terms and conditions that
      such
      Participant was entitled to exercise such Option. Following the death of any
      Participant to whom an Option was granted under the Plan, the Committee, as
      an
      alternative means of settlement of such Option, may elect to pay to the person
      to whom such Option is transferred the amount by which the Market Value per
      Share on the date of exercise of such Option shall exceed the Exercise Price
      of
      such Option, multiplied by the number of Shares with respect to which such
      Option is properly exercised. Any such settlement of an Option shall be
      considered an exercise of such Option for all purposes of the Plan.

     

    (e) Notwithstanding
      the provisions of the foregoing paragraphs of this Section 8, the Committee
      may, in its sole discretion, establish different terms and conditions pertaining
      to the effect of the cessation of Continuous Service, to the extent permitted
      by
      applicable federal and state law.

     

    9. Incentive
      Stock Options.  Incentive
      Stock Options may be granted only to Participants who are Employees. Any
      provisions of the Plan to the contrary notwithstanding, (a) no Incentive
      Stock Option shall be granted more than ten years after the date the Plan is
      adopted by the Board of Directors of the Company and no Incentive Stock Option
      shall be exercisable more than ten years after the date such Incentive Stock
      Option is granted, (b) the Exercise Price of any Incentive Stock Option
      shall not be less than the Market Value per Share on the date such Incentive
      Stock Option is granted, (c) any Incentive Stock Option shall not be
      transferable by the Participant to whom such Incentive Stock Option is granted
      other than by will or the laws of descent and distribution and shall be
      exercisable during such Participant’s lifetime only by such Participant,
      (d) no Incentive Stock Option shall be granted which would permit a
      Participant to acquire, through the exercise of Incentive Stock Options in
      any
      calendar year, Shares or shares of any capital stock of the Company or any
      Affiliate thereof having an aggregate Market Value (determined as of the time
      any Incentive Stock Option is granted) in excess of $100,000, and (e) no
      Incentive Stock Option may be exercised more than three months after the
      Participant’s cessation of Continuous Service for any reason other than death or
      Disability. The foregoing limitation shall be determined by assuming that the
      Participant will exercise each Incentive Stock Option on the date that such
      Option first becomes exercisable. Notwithstanding the foregoing, in the case
      of
      any Participant who, at the date of grant, owns stock possessing more than
      10%
      of the total combined voting power of all classes of capital stock of the
      Company or any Affiliate, the Exercise Price of any Incentive Stock Option
      shall
      not be less than 110% of the Market Value per Share on the date such Incentive
      Stock Option is granted and such Incentive Stock Option shall not be exercisable
      more than five years after the date such Incentive Stock Option is granted.
      Notwithstanding any other provisions of the Plan, if for any reason any Option
      granted under the Plan that is intended to be an Incentive Stock Option shall
      fail to qualify as an 

    
      
        
        

      

      
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    Incentive
      Stock Option, such Option shall be deemed to be a Non-Qualified Stock Option,
      and such Option shall be deemed to be fully authorized and validly issued under
      the Plan. 

     

    10. Terms
      and Conditions of Unrestricted Stock and Restricted Stock. 
The
      Committee shall have full and complete authority, subject to the limitations
      of
      the Plan, to grant Awards of Unrestricted Stock and Restricted Stock and, in
      addition to the terms and conditions contained in paragraphs (a) through
      (e) of this Section 10, to provide such other terms and conditions
      (which need not be identical among Participants) in respect of such Awards,
      and
      the vesting thereof, as the Committee shall determine and provide in the
      agreement referred to in paragraph (d) of this Section 10. Unless the
      Committee otherwise specifically provides in the applicable instrument
      evidencing the grant of Restricted Stock, an Award of Restricted Stock will
      be
      subject to the following provisions: 

     

    (a) At
      the
      time of an award of Restricted Stock, the Committee shall establish for each
      Participant a Restricted Period during which or at the expiration of which,
      the
      Shares of Restricted Stock shall vest. The vesting of Restricted Stock may
      also
      be conditioned upon the attainment of specified Performance Goals (as defined
      in
      Section 12) within specified Performance Cycles. The Committee may also
      restrict or prohibit the sale, assignment, transfer, pledge or other encumbrance
      of the Shares of Restricted Stock by the Participant during the Restricted
      Period. Except for such restrictions, and subject to paragraphs (c),
      (d) and (e) of this Section 10 and Section 13 hereof, the
      Participant as owner of such Shares shall have all the rights of a shareholder,
      including, but not limited to, the right to receive all dividends paid on such
      Shares and the right to vote such Shares. The Committee shall have the
      authority, in its discretion, to accelerate the time at which any or all of
      the
      restrictions shall lapse with respect to any Shares of Restricted Stock prior
      to
      the expiration of the Restricted Period with respect thereto, or to remove
      any
      or all of such restrictions, whenever it may determine that such action is
      appropriate by reason of changes in applicable tax or other laws or other
      changes in circumstances occurring after the commencement of such Restricted
      Period. 

     

    (b) Except
      as
      provided in Section 15 hereof, if a Participant ceases to maintain
      Continuous Service for any reason (other than death, Disability or Retirement)
      unless the Committee shall otherwise determine, all Shares of Restricted Stock
      theretofore awarded to such Participant and which at the time of such
      termination of Continuous Service are subject to the restrictions imposed by
      paragraph (a) of this Section 10 shall upon such termination of
      Continuous Service be forfeited and returned to the Company. If a Participant
      ceases to maintain Continuous Service by reason of death or Disability, then,
      unless the Committee shall determine otherwise, the restrictions with respect
      to
      the Ratable Portion (as hereinafter defined) of the Shares of Restricted Stock
      shall lapse and such Shares shall be free of restrictions and shall not be
      forfeited. The “Ratable Portion” shall be determined with respect to each
      separate Award of Restricted Stock issued and shall be equal to (i) the
      number of Shares of Restricted Stock awarded to the Participant multiplied
      by
      the portion of the Restricted Period that expired at the date of the
      Participant’s death or Disability, reduced by (ii) the number of Shares of
      Restricted Stock awarded with respect to which the restrictions had lapsed
      as of
      the date of the death or Disability of the Participant. 

     

    (c) Each
      certificate issued in respect of Shares of Restricted Stock awarded under the
      Plan shall be registered in the name of the Participant and deposited by the
      Participant, together with a stock power endorsed in blank, with the Company
      and
      shall bear the following (or a similar) legend: 

     

    “The
      transferability of this certificate and the shares of stock represented hereby
      are subject to the terms and conditions (including forfeiture) contained in
      the
      2007 Stock Option and Incentive Plan of the Corporation, and an Agreement
      entered into between the registered owner and the Corporation. Copies of such
      Plan and Agreement are on file in the office of the Secretary of the
      Corporation.” 

    
      
        
        

      

      
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    At
      the
      expiration of the restrictions imposed by paragraph (a) of this
      Section 10, the Company shall redeliver to the Participant (or where the
      relevant provision of paragraph (b) of this Section 10 applies in the case
      of a deceased Participant, to his legal representative, beneficiary or heir)
      the
      certificate(s) and stock power deposited with it and the Shares represented
      by
      such certificate(s) shall be free of the restrictions referred to in paragraph
      (a) of this Section 10. 

     

    (d) At
      the
      time of an award of Shares of Restricted Stock, the Participant shall enter
      into
      an agreement with the Company in a form specified by the Committee, agreeing
      to
      the terms and conditions of the award and containing such other matters as
      the
      Committee shall in its sole discretion determine. 

     

    (e) At
      the
      time of an award of Shares of Restricted Stock, the Committee may, in its
      discretion, determine that the payment to the Participant of dividends declared
      or paid on such Shares by the Company or a specified portion thereof, shall
      be
      deferred until the earlier to occur of (i) the lapsing of the restrictions
      imposed in accordance with paragraph (a) of this Section 10 or
      (ii) the forfeiture of such Shares under paragraph (b) of this
      Section 10, and shall be held by the Company for the account of the
      Participant until such time. In the event of such deferral, there shall be
      credited at the end of each year (or portion thereof) interest on the amount
      of
      the account at the beginning of the year at such rate per annum as the Committee
      may, in its discretion, determine. Payment of deferred dividends, together
      with
      interest accrued thereon as aforesaid, shall be made upon the earlier to occur
      of the events specified in (i) and (ii) of the immediately preceding
      sentence. 

     

    11. Stock
      Appreciation Rights.  The
      Committee may, in its discretion, grant Stock Appreciation Rights independently
      of or in connection with all or any part of an Option granted under the Plan.
      Each Stock Appreciation Right shall be subject to such terms and conditions
      consistent with the Plan as the Committee shall determine from time to time
      and
      as may be set forth in an Award Agreement, including the following:

     

    (a) A
      Stock
      Appreciation Right may be made part of an Option at the time of its grant.
      

     

    (b) Each
      Stock Appreciation Right will entitle the holder to elect to receive an amount
      in Shares (or, to the extent permitted under Section 24, in cash or in
      Shares, or a combination thereof, all in the sole discretion of the Committee)
      equal to 100% of the excess of: 

     

    (i) the
      Market Value per Share of the Common Stock on the date of exercise of such
      right, multiplied by the number of Shares with respect to which the right is
      being exercised, over 

     

    (ii) the
      aggregate Market Value for such number of Shares as of the date the Stock
      Appreciation Right was granted. 

     

    (c) Each
      Stock Appreciation Right connected to an Option will be exercisable at the
      time,
      in the manner and to the extent the Option to which it relates is exercisable.
      Each independent Stock Appreciation Right will be exercisable according to
      the
      terms and conditions established by the Committee in the instrument evidencing
      the Award. 

     

    (d) Upon
      the
      exercise of a Stock Appreciation Right connected to an Option, the Option (or
      portion thereof) with respect to which such right is exercised shall be
      surrendered and shall not thereafter be exercisable. Exercise of such a Stock
      Appreciation Right will reduce the number of Shares purchasable pursuant to
      the
      related Option and available for issuance under the Plan to the extent of the
      number of Shares with respect to which the right is exercised, whether or not
      any portion of the payment made upon exercise of such right is made in Common
      Stock. 

    
      
        
        

      

      
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    12. Performance
      Shares and Performance Units.

     

    (a) The
      Committee, in its sole discretion, may from time to time authorize the grant
      of
      Performance Shares and Performance Units upon the achievement of any one or
      combination of Performance Goals (which may be cumulative and/or alternative)
      within a designated Performance Cycle as may be established, in writing, by
      the
      Committee. 

     

    (b) In
      the
      case of Performance Units, the Committee shall determine the value of
      Performance Units under each Award. 

     

    (c) As
      determined in the discretion of the Committee, Performance Goals may differ
      among Participants and/or relate to performance on a Company-wide or divisional
      basis.

     

    (d) At
      such
      time as it is certified, in writing, by the Committee that the Performance
      Goals
      established by the Committee have been attained or otherwise satisfied within
      the Performance Cycle, the Committee will authorize the payment of Performance
      Shares or Performance Units in the form of cash or Shares registered in the
      name
      of the Participant, or a combination of cash and Shares, equal to the value
      of
      the Performance Shares or Performance Units at the end of the Performance Cycle.
      Payment shall be made in a lump sum following the close of the applicable
      Performance Cycle. 

     

    (e) The
      grant
      of an Award of Performance Shares or Performance Units will be evidenced by
      an
      instrument containing the terms and conditions of the Award as determined by
      the
      Committee. To the extent required under Code section 162(m), the business
      criteria under which Performance Goals are determined by the Committee will
      be
      resubmitted to shareholders for reapproval no later than the first shareholder
      meeting that occurs in the fifth year following the year in which shareholders
      previously approved the Plan. 

     

    (f) If
      the
      Participant ceases Continuous Service before the end of a Performance Cycle
      for
      any reason other than Disability, death or Retirement, the Participant will
      forfeit all rights with respect to any Performance Shares or Performance Units
      that were being earned during the Performance Cycle. The Committee, in its
      sole
      discretion, may establish guidelines providing that if a Participant ceases
      Continuous Service before the end of a Performance Cycle by reason of
      Disability, death or Retirement, the Participant will be entitled to a prorated
      payment with respect to any Performance Shares or Performance Units that were
      being earned during the Performance Cycle. 

     

    (g) If
      the
      Award of Performance Shares or Performance Units are intended to comply with
      Section 162(m) of the Code, the Committee shall take such additional actions,
      within the time periods, specified therein. 

     

    13. Adjustments
      Upon Changes in Capitalization.  In
      the
      event of any change in the outstanding Shares subsequent to the effective date
      of the Plan by reason of any reorganization, recapitalization, stock split,
      stock dividend, combination or exchange of shares, merger, consolidation or
      any
      change in the corporate structure or Shares of the Company, the maximum
      aggregate number and class of shares as to which Awards may be granted under
      the
      Plan and the number and class of shares, and the exercise price of Options,
      with
      respect to which Awards theretofore have been granted under the Plan shall
      be
      appropriately adjusted by the Committee, whose determination shall be
      conclusive. Any shares of stock or other securities received, as a result of
      any
      of the foregoing, by a Participant with respect to Restricted Stock shall be
      subject to the same restrictions and the certificate(s) or other instruments
      representing or evidencing such shares or securities shall be legended and
      deposited with the Company in the manner provided in Section 10 hereof.

     

    14. Effect
      of Reorganization.  Unless
      otherwise provided by the Committee in the instrument evidencing an Award,
      Awards will be affected by a Reorganization as follows: 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (a) If
      the
      Reorganization is a dissolution or liquidation of the Company then (i) the
      restrictions of Section 9(a) on Shares of Restricted Stock shall lapse and
      (ii) each outstanding Option shall terminate, but each Participant to whom
      an Option was granted shall have the right, immediately prior to such
      dissolution or liquidation to exercise the Option in full, notwithstanding
      the
      provisions of Section 9, and the Company shall notify each Participant of
      such right within a reasonable period of time prior to any such dissolution
      or
      liquidation. 

     

    (b) If
      the
      Reorganization is a merger or consolidation, upon the effective date of such
      Reorganization (i) each Participant shall be entitled, upon exercise of an
      Option in accordance with all of the terms and conditions of the Plan, to
      receive in lieu of Shares, shares of such stock or other securities or
      consideration as the holders of Shares shall be entitled to receive pursuant
      to
      the terms of the Reorganization (the “Acquisition Consideration”);
      (ii) each holder of Restricted Stock shall receive shares of such stock or
      other securities as the holders of Shares received, which shall be subject
      to
      the restrictions set forth in Section 10(a) unless the Committee accelerates
      the
      lapse of such restrictions and the certificate(s) or other instruments
      representing or evidencing such shares or securities shall be legended and
      deposited with the Company in the manner provided in Section 10 hereof;
      (iii) each Participant will be entitled, upon exercise of a Stock
      Appreciation Right in accordance with all the terms and conditions of the Plan,
      to receive the difference between (A) the aggregate fair market value, on
      the applicable date, of the Acquisition Consideration receivable upon such
      Reorganization by a holder of the number of Shares which might have been
      obtained upon exercise of the Option to which the Stock Appreciation Right
      relates ( or any portion thereof) immediately prior to such Reorganization
      and
      (B) the aggregate Exercise Price of such Option (or portion thereof); and
      (iv) each holder of Performance Shares or Performance Units (with respect
      to Shares, if any, covered by such Award) will be entitled to receive on the
      date set forth in such Award, the Acquisition Consideration receivable upon
      such
      Reorganization by a holder of the number of Shares which are covered by such
      Award. 

     

    15. Effect
      of Change in Control.   

     

    (a) If
      the
      Continuous Service of any Participant is involuntarily terminated, for whatever
      reason, at any time within 18 months after a Change in Control, unless the
      Committee shall have otherwise provided in the instrument evidencing the Award,
      (i) any Restricted Period with respect to Restricted Stock theretofore
      awarded to such Participant shall lapse upon such termination and all Shares
      awarded as Restricted Stock shall become fully vested in the Participant to
      whom
      such Shares were awarded; and (ii) with respect to Performance Shares and
      Performance Units, the Participant shall be entitled to receive a pro rata
      payment to the same extent as if the Participant ceases Continuous Service
      by
      reason of death, Disability or Retirement under Section 12 of the Plan. In
      the event, however, of a Change in Control that does not qualify as a “change in
      control” under Code section 409A and its interpretive regulations, a Participant
      shall not receive a pro rata payment for its Performance Shares or Performance
      Units until the occurrence of a distribution event that meets Code section
      409A
      standards. 

     

    (b) If
      a
      tender offer or exchange offer for Shares (other than such an offer by the
      Company) is commenced, or if an event specified in clause (ii) or clause
      (iii) of the definition of a Change in Control contained in Section 2
      shall occur, unless the Committee shall have otherwise provided in the
      instrument evidencing the grant of an Option, all Options theretofore granted
      and not fully exercisable shall become exercisable in full upon the happening
      of
      such event and shall remain so exercisable in accordance with their terms;
      provided, however, that no Option which has previously been exercised or
      otherwise terminated shall become exercisable. 

     

    16. Assignments
      and Transfers.  Except
      as
      otherwise determined by the Committee, neither any Award nor any right or
      interest of a Participant under the Plan in any instrument evidencing any Award
      

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    under
      the
      Plan may be assigned, encumbered or transferred except, in the event of the
      death of a Participant, by will or the laws of descent and distribution.

     

    17. No
      Implied Rights.  No
      officer, Director, Employee or other person shall have a right to be selected
      as
      a Participant or, having been so selected, to be selected again as a Participant
      and no officer, Director, Employee or other person shall have any claim or
      right
      to be granted an Award under the Plan or under any other incentive or similar
      plan of the Company or any Affiliate. Neither the Plan nor any action taken
      hereunder shall be construed as giving any Employee any right to be retained
      in
      the employ of the Company or any Affiliate. 

     

    18. Delivery
      and Registration of Stock.  The
      Company’s obligation to deliver Shares with respect to an Award shall, if the
      Committee so requests, be conditioned upon the receipt of a representation
      as to
      the investment intention of the Participant to whom such Shares are to be
      delivered, in such form as the Company shall determine to be necessary or
      advisable to comply with the provisions of the Securities Act or any other
      applicable federal or state securities law. It may be provided that any such
      representation requirement shall become inoperative upon a registration of
      the
      Shares or other action eliminating the necessity of such representation under
      the Securities Act or other securities law. The Company shall not be required
      to
      deliver any Shares under the Plan prior to (a) the admission of such shares
      to listing on any stock exchange or quotation system on which Shares may then
      be
      listed or quoted, and (b) the completion of such registration or other
      qualification of such Shares under any state or federal law, rule or regulation,
      as the Company shall determine to be necessary or advisable. 

     

    19. Withholding
      Tax.  Prior
      to
      the delivery of any Shares or cash pursuant to an Award, the Company has the
      right and power to deduct or withhold, or require the Participant to remit
      to
      the Company, an amount sufficient to satisfy all applicable tax withholding
      requirements. The Committee, in its sole discretion and pursuant to such
      procedures as it may specify from time to time, may permit or require a
      Participant to satisfy all or part of the tax withholding obligations in
      connection with an Award by (a) having the Company withhold otherwise
      deliverable Shares, or (b) delivering to the Company Shares already owned
      for a period of at least six months and having a value equal to the amount
      required to be withheld. The amount of the withholding requirement will be
      deemed to include any amount that the Committee determines, not to exceed the
      amount determined by using the maximum federal, state and local marginal income
      tax rates applicable to the Participant with respect to the Award on the date
      that the amount of tax to be withheld is to be determined for these purposes.
      For these purposes, the value of the Shares to be withheld or delivered will
      be
      equal to the Market Value as of the date that the taxes are required to be
      withheld. 

     

    20. Termination,
      Amendment and Modification of Plan.  The
      Board
      may at any time terminate, and may at any time and from time to time and in
      any
      respect amend or modify, the Plan; provided, however, that to the extent
      necessary and desirable to comply with Rule 16b-3 under the Exchange Act or
      Section 422 of the Code (or any other applicable law or regulation,
      including requirements of any stock exchange or quotation system on which the
      Shares are listed or quoted), shareholder approval of any Plan amendment shall
      be obtained in such a manner and to such a degree as is required by the
      applicable law or regulation; and provided further, that no termination,
      amendment or modification of the Plan shall in any manner adversely affect
      the
      rights of any Participant who has been granted an Award pursuant to the Plan,
      without the consent of the Participant to whom the Award was granted.

     

    21. Effective
      Date and Term of Plan.  The
      Plan
      shall become effective upon its adoption by the Board of Directors and
      shareholders of the Company and shall continue in effect for a term of ten
      years
      after the date of adoption unless sooner terminated under Section 20
      hereof. 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    22. Governing
      Law.  The
      Plan
      and Award Agreements will be construed in accordance with and governed by the
      internal laws of the State of Indiana. 

     

    23. Shareholder
      Rights.  Except
      to
      the extent provided with respect to an Award of Restricted Stock in accordance
      with Section 10, no Participant shall have any of the rights or privileges
      of a shareholder of the Company with respect to any Shares issuable pursuant
      to
      an Award unless and until certificates representing the Shares shall have been
      issued and delivered to the Participant. 

     

    24. Code
      Section 409A Standards.  The
      Plan,
      and all Awards and all instruments evidencing Awards pursuant to the Plan,
      shall
      be effected, interpreted, and applied in a manner consistent with the standards
      for nonqualified deferred compensation plans established by Section 409A of
      the
      Code and its interpretive regulations (the “Section 409A Standards”). To
      the extent that any terms of the Plan, an instrument evidencing an Award, or
      an
      Award would subject any Participant to gross income inclusion, interest, or
      additional tax pursuant to Section 409A of the Code, those terms are to
      that extent superseded by the applicable Section 409A
      Standards.

     

     

    
11Exhibit 10.1

                        Amendment to the Stock Award Plan
                        ---------------------------------

The text of Section 3.1 of the Stock Award Plan shall be amended to read as
follows:

"3.1 Number of Shares. Subject to the provisions of Paragraph 17 (relating to
adjustments upon changes in capitalization), the number of shares of Common
Stock subject at any one time to options granted under the Plan, plus the number
of shares of Common Stock theretofore issued or delivered pursuant to the
exercise of options granted under the Plan, shall not exceed 45,000,000 shares.
If and to the extent that options granted under the Plan terminate, expire or
are cancelled without having been exercised, new options may be granted under
the Plan with respect to the shares of Common Stock covered by such terminated,
expired or cancelled options; provided, that the granting and terms of such new
options shall in all respects comply with the provisions of the Plan."

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