Document:

Exhibit 10.1

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT
AGREEMENT

AND
CONSENT OF GUARANTORS

This SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT OF AGENT AND LENDERS (this
“Amendment”) is dated as of November 29, 2004, and entered into by and
among FLEETWOOD ENTERPRISES, INC. (“Fleetwood”), FLEETWOOD HOLDINGS INC. (“Holdings”) and its
Subsidiaries listed on the signature pages hereof (collectively, “FMC”),
FLEETWOOD RETAIL CORP. (“Retail”)
and its Subsidiaries listed on the signature pages hereof (collectively, “FRC”),
the banks and other financial institutions signatory hereto that are parties as
Lenders to the Credit Agreement referred to below (the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent and
collateral agent (in such capacity, the “Agent”) for the Lenders.

Recitals

Whereas, Fleetwood, the Borrowers, the Lenders, and the Agent
have entered into that certain Amended and Restated Credit Agreement dated as
of May 14, 2004, as amended by that certain First Amendment to Credit Agreement
and Consent of Guarantors dated as of June 4, 2004 (as amended, amended and
restated, extended, supplemented or otherwise modified from time to time, the “Credit
Agreement”).  Any terms defined in the Credit Agreement and
not defined in this Amendment are used herein as defined in the Credit
Agreement;

Whereas, Fleetwood desires to provide one or more unsecured
guaranties of certain obligations of FVC, Inc. (“FVC”) owing to Persons that have acquired a
franchise as further set forth in any Franchise Agreement (as defined in the
Credit Agreement, as amended hereby) (the “Franchisee Guaranty”);

Whereas, Fleetwood desires to provide an
unsecured guaranty of certain obligations of FVC owing to Resort Condominiums
International, LLC (“RCI”) in respect of payment for fees
rendered (the “RCI Guaranty”); subject to a cap of $1,000,000;

Whereas, Fleetwood desires to provide an unsecured guaranty of
certain obligations of FRC owing to the landlord under that certain lease,
dated on or about the date hereof, by and between FRC and Caroline
Partners, Ltd. (the “Texas Landlord
Guaranty”);
subject to a cap of $2,500,000;

Whereas, the Borrowers have requested of the Majority Lenders
and the Agent certain amendments to the Credit Agreement in respect of the
Franchise Guaranty, the RCI Guaranty and the Texas Landlord Guaranty
(collectively, the “Proposed Guaranties”);

Whereas, Fleetwood intends to create and designate a new
Excluded Subsidiary: FV Management, Inc. (“FV Management”);

 

1

 

Whereas, Fleetwood intends to create a new Subsidiary:
Fleetwood Housing International, Inc. (“Fleetwood Housing International,
Inc.”);

Whereas, Fleetwood intends to create a new Subsidiary:
Fleetwood Retail Corp. of Michigan (“Fleetwood Retail Corp. of Michigan”
and, together with FV Management and Fleetwood Retail Corp. of Michigan, the “New
Subsidiaries”);

Whereas, the Credit Agreement provides that “[w]ithout the
prior written consent of the Agent and Majority Lenders, Fleetwood shall not,
directly or indirectly, organize, create, acquire or permit to exist any
Subsidiary other (i) than those listed on Schedule 6.5, as the same
may be amended from time to time with the consent of the Agent (not to be
unreasonably withheld) and (ii) Inactive Subsidiaries;”

Whereas, the Credit Agreement provides that “[i]f Fleetwood
forms any new Subsidiary that is not an Excluded Subsidiary or if any Inactive
Subsidiary becomes an active Subsidiary which owns assets in excess of $250,000
or has revenues in excess of $1,000,000 in any Fiscal Year, the Borrowers shall
cause such Subsidiary to either become an FMC Borrower or FRC Borrower
hereunder by delivering a counterpart to this Agreement and to each other Loan
Document to which an FMC Borrower or an FRC Borrower, as the case may be, is a
party or become a Guarantor by delivering a counterpart to the Subsidiary
Guaranty and to each other Loan Document to which a Guarantor which is a
Subsidiary is a party, together with such evidences of authority, opinions and
other documents and instruments as the Agent may reasonably request; provided
that no such Subsidiary may become an FRC Borrower or an FMC Borrower without
the prior written consent of the Required Lenders;”

Whereas, Fleetwood has requested of the Agent certain consents
and approvals under the Credit Agreement with respect to the formation of the
new subsidiaries;

Whereas, the Majority Lenders have
given their express written consent to the Agent to grant the consents and approvals referred to
herein, subject to the terms and conditions hereof;

Whereas, the Agent and the Majority Lenders are willing to
give the consents and approvals requested by the Loan Parties, on the terms and
conditions set forth in this Consent; and

Whereas, the Agent has the authority to sign for and on
behalf of the Majority Lenders;

Now Therefore, in consideration of the premises and the
mutual agreements set forth herein, Fleetwood, the Borrowers, the Majority
Lenders, and the Agent agree as follows:

1.     AMENDMENTS TO CREDIT
AGREEMENT.  Subject to the
conditions and upon the terms set forth in this Amendment and in reliance on
the representations and warranties of Fleetwood and the Borrowers set forth in
this Amendment, the Credit Agreement is hereby amended as follows:

 

2

 

1.1   Amendments to Section 7.12 of the Credit Agreement.

(a)           The word “and” is hereby deleted from
after the semicolon appearing at the end of clause (h) thereof.

(b)           Clause (i) thereof is hereby renumbered
clause (l).

(c)           The following clauses (i) through (k)
are hereby inserted after clause (h) thereof and prior to clause (l) thereof:

“(i)
Fleetwood’s unsecured guaranty of the Franchisee Obligations pursuant to one or
more Franchisee Guaranties, provided that
Fleetwood shall give notice of any claim upon any such guaranty if the amount
of any such past or present claim or claims, in the aggregate, exceeds
$5,000,000; (j) Fleetwood’s unsecured guaranty of up to $1,000,000 of the RCI
Obligations, provided that
Fleetwood shall give notice of any claim by RCI upon such guaranty; (k)
Fleetwood’s unsecured guaranty of up to $2,500,000 of the Texas Landlord
Obligations; and “.

1.2   Amendment to Section 7.20 of the Credit Agreement.  Section 7.20 is deleted and replaced with the
following language:

“7.20  New
Subsidiaries.  Without the prior
written consent of the Agent, Fleetwood shall not, directly or indirectly,
organize, create, acquire or permit to exist any subsidiary other (i) than
those listed on Schedule 6.5, as the same may be amended from time to time with
the consent of the Agent (not to be unreasonably withheld) and (ii) Inactive
Subsidiaries.”

1.3   Addition to Annex A to Credit Agreement (Definitions).  The following definitions are added to Annex
A of the Credit Agreement in the appropriate alphabetical order:

“Franchisee” means any Person that shall have
acquired a franchise to operate one or more franchises
entitling such Person to sell memberships to the public in the “Fleetwood Vacation Club” as further
set forth in any Franchise Agreement.

“Franchise
Agreement” means
any agreement between FVC and any Franchisee pursuant to which such Franchisee
shall have acquired a franchise to operate one or more franchises
entitling such Person to sell vacation club memberships to the public as further set forth in any
such Franchise Agreement.; provided that the Franchise Agreement and other
documents executed by FVC in connection therewith are reasonably satisfactory
in form and substance to the Agent (it being understood that should Agent grant
its consent to a form of Franchise Agreement, such agreement may, thereafter,
be utilized by FVC with respect to entering into additional Franchisee
Agreements until the occurrence and during the continuation of any Event of
Default).

 “Franchisee Guaranty” means any unsecured guaranty of any
Franchise Obligations granted by Fleetwood to any Franchisee; provided that the documents executed by Fleetwood
in connection with such Franchisee Guaranty are reasonably

 

3

 

satisfactory in form and
substance to the Agent (it being understood that should Agent grant its consent
to a form of Franchisee Guaranty, such form may, thereafter, be utilized by
Fleetwood with respect to entering into additional Franchisee Guaranties until
the occurrence and during the continuation of any Event of Default).

“Franchisee
Obligations” means any obligations owing by FVC to any Franchisee in
connection with any Franchise Agreement.

“FVC” means FVC, Inc.

“RCI Obligations”
means any obligations of FVC owing to Resort Condominiums International, LLC,
or its affiliates in respect of payment for services rendered by Resort
Condominiums International, LLC or its affiliates, to FVC or its affiliates.

“Texas Landlord
Obligations” means the Obligations of FRC under that certain lease dated on or
about the date hereof, by and between FRC and Caroline Partners, Ltd.

2.     CONSENTS.

2.1   Consent to the Creation of
New Subsidiaries. By the execution of this Consent the Agent
hereby consents to: (i) Fleetwood’s creation of each New Subsidiary; and (ii)
the inclusion of each New Subsidiary on Schedule 6.5, which such
Schedule, together with Schedule 6.7, shall be deemed amended and
restated in the forms attached hereto as Schedules 6.5 and Schedule
6.7 (which such Schedules shall designate FV Management as an Excluded
Subsidiary); provided that the
foregoing consent is expressly subject to Section 6 hereof and further
conditioned upon FV Management: (a) not engaging in any business activities or
having any properties or liabilities other than routine administrative matters
and incurring trade payables and general and administrative expenses in the
ordinary course, (b) not incurring any Debt other than as permitted under the
foregoing clause (a), (c) not receiving the benefit of any Guaranties granted
by any Loan Party and (d) not receiving any Distributions or the proceeds of
any Restricted Investments from any Loan Party, in each case, until such time
as the Loan Parties receive the further written consent of the Agent (not to be
unreasonably withheld) and, if any such action requires the written consent of
the Majority Lenders pursuant to the terms of the Credit Agreement, the written
consent of the Majority Lenders.

3.     REPRESENTATIONS AND
WARRANTIES OF FLEETWOOD AND THE BORROWERS. 
In order to induce the Majority Lenders and the Agent to
enter into this Amendment, each of Fleetwood and each Borrower represents and
warrants to each Majority Lender and the Agent that the following statements
are true, correct and complete:

3.1   Power and Authority.  Each of the Loan Parties has all corporate
power and authority to enter into this Amendment and, as applicable, the
Consent of Guarantors attached hereto (the “Consent”), and to carry out
the transactions contemplated by, and to perform its obligations under or in
respect of, the Credit Agreement.

 

4

 

3.2   Corporate Action.  The execution and delivery of this Amendment
and the Consent and the performance of the obligations of each Loan Party under
or in respect of the Credit Agreement as amended hereby have been duly
authorized by all necessary corporate action on the part of each of the Loan
Parties.

3.3   No Conflict or Violation
or Required Consent or Approval. 
The execution and delivery of this Amendment and the Consent and the
performance of the obligations of each Credit Party under or in respect of the
Credit Agreement as amended hereby do not and will not conflict with or violate
(a) any provision of the governing documents of any Loan Party or any of its
Subsidiaries, (b) any Requirement of Law, (c) any order, judgment or
decree of any court or other governmental agency binding on any Loan Party or
any of its Subsidiaries, or (d) any indenture, agreement or instrument to which
any Loan Party or any of its Subsidiaries is a party or by which any Loan Party
or any of its Subsidiaries, or any property of any of them, is bound, and do
not and will not require any consent or approval of any Person.

3.4   Execution, Delivery and
Enforceability.  This
Amendment and the Consent have been duly executed and delivered by each Loan
Party which is a party thereto and are the legal, valid and binding obligations
of such Loan Party, enforceable in accordance with their terms, except as
enforceability may be affected by applicable bankruptcy, insolvency, and
similar proceedings affecting the rights of creditors generally, and general
principles of equity.  The Agent’s Liens
in the Collateral continue to be valid, binding and enforceable first priority
Liens which secure the Obligations.

3.5   No Default or Event of
Default.  No event has
occurred and is continuing or will result from the execution and delivery of
this Amendment or the Consent that would constitute a Default or an Event of
Default.

3.6   No Material Adverse
Effect.  No event has
occurred that has resulted, or could reasonably be expected to result, in a
Material Adverse Effect.

3.7   Representations and
Warranties.  Each of the
representations and warranties contained in the Loan Documents is and will be
true and correct in all material respects on and as of the date hereof and as
of the effective date of this Amendment, except to the extent that such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects as of such
earlier date.

4.     CONDITIONS TO
EFFECTIVENESS OF THIS AMENDMENT.  This
Amendment, and the consents and approvals contained herein, shall be effective
only if and when signed by, and when counterparts hereof shall have been
delivered to the Agent (by hand delivery, mail or telecopy) by, Fleetwood, the
Borrowers and each Majority Lender and only if and when each of the following
conditions is satisfied:

4.1   Consent of
Guarantors.  Each of the
Guarantors shall have executed and delivered to the Agent the Consent.

4.2   Delivery
of Documents.  The Agent
shall have received such documents as the Agent may reasonably request in
connection with this Consent.

 

 

5

 

4.3   Compliance
with Obligations.  The
Loan Parties shall have complied with each of their obligations under Section
7.28(a) in respect of each New Subsidiary.

5.     EFFECTIVE DATE.  This
Amendment shall become effective on the date of the satisfaction of the
conditions set forth in Section 4.

6.     EFFECT OF AMENDMENT;
RATIFICATION.  This Amendment
is a Loan Document.  From and after the
date on which this Amendment becomes effective, all references in the Loan
Documents to the Credit Agreement shall mean the Credit Agreement as amended
hereby.  Except as expressly amended
hereby or waived herein, the Credit Agreement and the other Loan Documents,
including the Liens granted thereunder, shall remain in full force and effect,
and all terms and provisions thereof are hereby ratified and confirmed. For the
avoidance of doubt, the amendments effected hereby and consents granted herein
shall not permit FVC to engage in any activities other than those expressly previously
consented to by the Majority Lenders and the Agent, until such time as the Loan
Parties receive the further written consent of the Agent (not to be
unreasonably withheld) and, if any such action requires the written consent of
the Majority Lenders pursuant to the terms of the Credit Agreement, the written
consent of the Majority Lenders.

7.     Each of Fleetwood and the Borrowers
confirms that as amended hereby, each of the Loan Documents is in full force
and effect, and that none of the Credit Parties has any defenses, setoffs or
counterclaims to its Obligations.

8.     APPLICABLE LAW.  THE VALIDITY, INTERPRETATIONS AND
ENFORCEMENT OF THIS AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION
WITH THIS AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE GOVERNED BY THE INTERNAL LAWS AND DECISIONS OF THE STATE OF
CALIFORNIA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

9.     NO WAIVER.  The execution, delivery and
effectiveness of this Consent does not constitute a waiver of any Default or
Event of Default, amend or modify any provision of any Loan Document except as
expressly set forth herein or constitute a course of dealing or any other basis
for altering the Obligations of any Loan Party, including, without limitation, Section
7.10 (Distributions; Capital Change; Restricted Investments), Section
7.12 (Guaranties), Section 7.13 (Debt) of the Credit Agreement, and Section
7.15 (Transactions with Affiliates).

10.   COMPLETE AGREEMENT.  This Amendment sets forth the
complete agreement of the parties in respect of any amendment to any of the
provisions of any Loan Document or any waiver thereof.  The execution, delivery and effectiveness of
this Amendment do not constitute a waiver of any Default or Event of Default,
amend or modify any provision of any Loan Document except as expressly set
forth herein or constitute a course of dealing or any other basis for altering
the Obligations of any Loan Party.

11.   CAPTIONS;
COUNTERPARTS.  The catchlines and
captions herein are intended solely for convenience of reference and shall not
be used to interpret or construe the provisions hereof.  This Amendment may be executed by one or more
of the parties to this

 

6

 

Amendment on any number of separate
counterparts (including by telecopy), all of which taken together shall
constitute but one and the same instrument.

[signatures follow;
remainder of page intentionally left blank]

 

7

IN WITNESS WHEREOF, each of the undersigned has duly executed this Second
Amendment to Amended and Restated Credit Agreement as of the date set forth
above.

 

	
  FMC BORROWERS

  	
  FLEETWOOD HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF IDAHO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF NORTH CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TENNESSEE, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TEXAS, L.P.

  
	
   

  	
  By: FLEETWOOD GENERAL
  PARTNER OF TEXAS, INC., its General Partner

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF VIRGINIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF WASHINGTON, INC. 

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF PENNSYLVANIA, INC.

  

 

 

S-1

 

	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF OHIO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD FOLDING TRAILERS, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  HAUSER LAKE LUMBER OPERATION, INC.

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL LUMBER PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD GENERAL PARTNER OF TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES INVESTMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd R. Plowman

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  

 

 

S-2

 

	
   

  	
   

  
	
  FRC BORROWERS

  	
  FLEETWOOD RETAIL CORP.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF IDAHO

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF KENTUCKY

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF MISSISSIPPI

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF NORTH CAROLINA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF OREGON

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF VIRGINIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd R. Plowman

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTOR

  	
  FLEETWOOD ENTERPRISES, INC., as the Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd
  R. Plowman

  
	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer

  

 

 

S-3

 

IN WITNESS WHEREOF, each of the undersigned has duly executed this
Consent as of the date set forth above.

 

	
   

  	
  BANK OF AMERICA, N.A., as the Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John McNamara

  
	
   

  	
  Name:

  	
  John McNamara

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

S-4

 

	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith Alexander

  
	
   

  	
  Name:

  	
  Keith Alexander

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

S-5

 

	
   

  	
  WELLS FARGO FOOTHILL, INC., fka FOOTHILL CAPITAL
  CORPORATION, as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael P. Baranowski

  
	
   

  	
  Name:

  	
  Michael P. Baranowski

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

S-6

 

	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas H. Hopkins

  
	
   

  	
  Name:

  	
  Thomas H. Hopkins

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  

 

 

S-7

 

[This page intentionally
left blank]

 

 

S-8

 

CONSENT
OF GUARANTORS

Each of the undersigned is a Guarantor of the
Obligations of the FMC Borrowers and/or FRC Borrowers under the Credit
Agreement and hereby (a) consents to the foregoing Amendment,
(b) acknowledges that notwithstanding the execution and delivery of the
foregoing Amendment, the obligations of each of the undersigned Guarantors are
not impaired or affected and the Guaranties continue in full force and effect,
and (c) ratifies its Guaranty and each of the Loan Documents to which it
is a party.

IN WITNESS WHEREOF, each of the undersigned has
executed and delivered this CONSENT OF GUARANTORS as of the 29 day of November,
2004. 

	
  FMC BORROWERS

  	
  FLEETWOOD HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF IDAHO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF NORTH CAROLINA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TENNESSEE, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TEXAS, L.P.

  
	
   

  	
  By:

  	
  FLEETWOOD GENERAL PARTNER

  
	
   

  	
  OF TEXAS, INC., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF VIRGINIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF WASHINGTON,

  

 

 

S-9

 

	
   

  	
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF PENNSYLVANIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF OHIO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD FOLDING TRAILERS, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  HAUSER LAKE LUMBER OPERATION, INC.

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL LUMBER PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD GENERAL PARTNER OF TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES INVESTMENT, INC.

  

 

 

S-10

 

	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd R. Plowman

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  

 

 

S-11

 

	
  FRC BORROWERS

  	
  FLEETWOOD RETAIL CORP.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF IDAHO

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF KENTUCKY

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF MISSISSIPPI

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF NORTH CAROLINA

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF OREGON

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD RETAIL CORP. OF VIRGINIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd R. Plowman

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OTHER GUARANTORS

  	
   

  	
  FLEETWOOD ENTERPRISES, INC.

  
	
   

  	
   

  	
  FLEETWOOD CANADA LTD.

  
	
   

  	
   

  	
  FLEETWOOD INTERNATIONAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Boyd R. Plowman

  
	
   

  	
  Name:

  	
  Boyd R. Plowman

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  

 

 

S-12Exhibit 4.1

 

CARROLLTON
BANCORP

CERTIFICATE OF
OFFICER

(AMENDMENT OF
CARROLLTON BANCORP 1998 LONG-TERM INCENTIVE PLAN)

 

Barbara Broczkowski hereby certifies that:

 

1.  She is the duly elected and
acting Senior Vice President and Chief Financial Officer of Carrollton Bancorp,
a Maryland bank holding company (the “Corporation”).

 

2.  At a meeting of the board of
directors of the Corporation, the Corporation’s Board of Directors amended
Section 4(a) of the Corporation’s 1998 Long-Term Incentive Plan so that such
section shall read in its entirety as follows:

 

(a) 
SHARES AVAILABLE:  Subject to
adjustment as provided in Section 4(c), the number of Shares with respect to
which Awards may be granted under the Plan shall be 300,000.  If, after the effective date of the Plan, any
shares covered by an Award granted under the Plan, or to which such an Award
relates are forfeited, or if an Award otherwise terminates or is canceled
without the delivery of Shares or of other consideration, the Shares covered by
such Award, or to which such Award relates, or the number of Shares otherwise
counted against the aggregate number of Shares with respect to which Awards may
be granted, to the extent of any such forfeiture, termination or cancellation,
shall again be, or shall become, to the extent permissible under Rule 16b-3,
Shares with respect to which Awards may be granted.

 

Executed effective as of December 2, 2004.

 

 

	
   

  	
   

  	
  CARROLLTON BANCORP

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  : /s/ Barbara M. Broczkowski

  	
   

  
	
   

  	
  Name:

  	
  Barbara M. Broczkowski

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief Financial

  Officer

  
							

 

 

CARROLLTON BANCORP 1998 LONG-TERM INCENTIVE PLAN

 

SECTION 1. PURPOSE OF THE PLAN:

 

The Carrollton
Bancorp 1998 Long-Term Incentive Plan (the “Plan”) is intended to promote the
interest of Carrollton Bancorp (the “Company”), a Maryland corporation, by
encouraging employees of the Company, its subsidiaries, affiliated entities and
non-employee directors of the Company, but not non-employee directors of its
subsidiaries and affiliated entities, to acquire or increase their equity
interest in the Company. The Plan provides a means whereby employees and
non-employee directors may develop a sense of proprietorship and personal
involvement in the development and financial success of the Company; and,
encourage them to remain with and devote their best efforts to the business of
the Company thereby advancing the interests of the Company and its
shareholders. The Plan is also contemplated to enhance the ability of the
Company and its subsidiaries to attract and retain the services of individuals
who are essential for the growth and profitability of the Company.

 

SECTION 2. DEFINITIONS:

 

As used in the
Plan, the following terms shall have the meanings set forth below:

 

“Award” shall
mean any Option, Stock Appreciation Right, Restricted Stock, Performance Award,
Phantom Shares, Bonus Shares or Cash Award.

 

“Award
Agreement” shall mean any written agreement, contract, or other instrument or
document evidencing any Award, which may, but need not, be executed or
acknowledged by a participant.

 

“Board” shall
mean the Board of Directors of the Company.

 

“Bonus Shares”
shall mean an award of Shares granted pursuant to Section 6(e) of the Plan.

 

“Cash Award”
shall mean an award payable in cash granted pursuant to Section 6(g) of the Plan.

 

“Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time, and the
rules and regulations thereunder.

 

“Committee”
shall mean those individuals who may be designated by the Board.

 

“Employee”
shall mean any employee of the Company or an Affiliate.

 

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

“Fair Market
Value” shall mean, with respect to Shares, the closing price of a Share quoted
on the NASDAQ exchange.

 

“Incentive
Stock Option” or “ISO” shall mean an option granted under Section 6(a) of the
Plan that is intended to qualify as an “incentive stock option” under Section
422 of the Code or any successor provision thereto.

 

“Non-employee
Director” shall mean a director of the Company who is not otherwise an employee
of the Company or any Affiliate.

 

“Non-Qualified
Stock Option” shall mean an option granted under Sections 6(a) or 6(h) of the
Plan that is not intended to be an Incentive Stock Option.

 

“Option” shall
mean an Incentive Stock Option or a Non-Qualified Stock Option.

 

“Participant”
shall mean any individual granted an Award under the Plan.

 

“Performance
Award” shall mean any right granted under Section 6(d) of the Plan.

 

“Person” shall
mean individual, corporation, partnership, association, joint- stock company,
trust, incorporated organization, government or political subdivision thereof
or other entity.

 

“Phantom
Shares” shall mean an Award of the right to receive Shares issued at the end of
a restricted period which is granted pursuant to Section 6(f) of the Plan.

 

“Restricted
Period” shall mean the period established by the Committee with respect to an
Award during which the Award either remains subject to forfeiture or is not
exercisable by the Participant.

 

“Restricted
Stock” shall mean any Share, prior to the lapse of restrictions thereon,
granted under Sections 6(c) or 6(h) of the Plan.

 

“Rule 16b-3”
shall mean rule 16b-3 promulgated by the SEC under the exchange Act, or any
successor rule or regulation thereto as in effect from time to time.

 

“SEC” shall
mean the Securities and Exchange Commission or any successor thereto.

 

“Shares” or “Common
Shares” or “Common Stock” shall mean the common stock of the Company and any
such other securities or property as may become the subject of Awards of the
Plan.

 

“Stock
Appreciation Right” or “Right” shall mean any right to receive the

 

 

appreciation of shares granted
under Section 6(b) of the Plan.

 

“Substitute
Award” shall mean Awards granted in assumption of, or in substitution for,
outstanding awards previously granted by (i) a company acquired by the Company
or one or more of its Affiliates, or (ii) a company with which the Company or
one or more of its Affiliates combines.

 

SECTION 3. ADMINISTRATION:

 

The Plan shall
be administered in accordance with Section 162(m) of the Code and regulations
promulgated thereunder by the Committee, which Committee shall consist of at
least three members. All members of the Committee shall be “disinterested
persons” within the meaning of Rule 16b-3 which has been adopted by the SEC
under the Exchange Act as such Rule or its equivalent is then in effect; and, “outside
directors” as defined in Section 1.162- 27(e)(3)(i) of the Code and regulations
promulgated thereunder. A majority of the committee shall constitute a quorum,
and the acts of the members of the Committee who are present at any meeting
thereof at which a quorum is present, or acts unanimously approved by the
members of the Committee in writing, shall be the acts of the Committee.
Subject to the terms of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to:

 

(i) designate
Participants;

 

(ii) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited, or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited, or suspended;

 

(iii)
determine whether, to what extent, and under what circumstances, cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election
of the holder thereof or of the Committee;

 

(iv) interpret
and administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan;

 

(v) establish,
amend, suspend, or waive such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan, all
designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive and
binding upon all Persons, including the Company, and any Affiliate, any
Participant, any holder or beneficiary of any Award, any stockholder and any
Employee.

 

 

 

SECTION 4. SHARES AVAILABLE FOR
AWARDS:

 

(a) SHARES
AVAILABLE: Subject to adjustment as provided in Section 4(c), the number of
Shares with respect to which Awards may be granted under the Plan shall be
100,000. If, after the effective date of the plan, any shares covered by an
Award granted under the Plan, or to which such an Award relates are forfeited,
or if an Award otherwise terminates or is canceled without the delivery of
Shares or of other consideration, the Shares covered by such Award, or to which
such Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be granted, to the
extent of any such forfeiture, termination or cancellation, shall again be, or
shall become, to the extent permissible under Rule 16b-3,

Shares with respect to which
Awards may be granted.

 

(b) SOURCES OF
SHARES DELIVERABLE UNDER AWARDS: Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of treasury
Shares.

 

(c)
ADJUSTMENTS: In the event that the Committee determines that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares
such that an adjustment is determined by the Committee1 to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type
of Shares (or other securities or property) with respect to which Awards may be
granted,(ii) the number and type of Shares (or other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding award; PROVIDED, in each case, that
with respect to Awards of Incentive Stock Options and Awards intended to
qualify as performance-based compensation under Section 162(m)(4)(C) of the
Code, no such adjustment shall be authorized to the extent that such authority
would cause the Plan to violate Section 422(b)(1) of the Code or would cause
such Award to fail to so qualify under Section 162(m) of the Code, as the case
may be, or any successor provisions thereto; and PROVIDED FURTHER, that the
number of Shares subject to any Award denominated in Shares shall always be a
whole number.

 

SECTION 5. ELIGIBILITY:

 

Other than
Awards granted to Non-employee Directors pursuant to Section 6(h) of the Plan,
any Employee shall be eligible to be designated a Participant.  However, no Employee may receive Options
and/or Stock Appreciation Rights during the term of the Plan that, in the
aggregate, are with respect to more than 33-1/3% of all Shares that may be made
subject to Awards under the Plan.

 

 

SECTION 6. AWARDS:

 

(a) OPTIONS:
Subject to the provisions of the Plan, the Committee shall have the authority
to determine the employees to whom Options shall be granted, the number of
shares to be covered by each Option, the purchase price therefor and the
conditions and limitations applicable to the exercise of the Option, including
the following terms and conditions and such additional terms and conditions, as
the Committee shall determine, that are not inconsistent with the provisions of
the Plan.

 

(i) EXERCISE
PRICE: The purchase price per Share purchasable under an Option shall be
determined by the Committee at the time each Option is granted.

 

(ii) TIME AND
METHOD OF EXERCISE: The Committee shall determine the time or times at which an
Option may be exercised in whole or in part, and the method or methods by
which, and the form or forms (which may include, without limitation, cash,
Shares, outstanding Awards, Shares that would otherwise be acquired upon
exercise of the Option, other securities or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the relevant
exercise price) in which payment of the exercise price with respect hereto may
be made or deemed to have been made.

 

(iii)
INCENTIVE STOCK OPTIONS: The terms of any Incentive Stock Option granted under
the Plan shall comply in all respects with the provisions of

Section 422 of the Code, or any
successor provision, and any regulations promulgated thereunder. Incentive
Stock Options may be granted only to employees and non-employee directors of
the Company, and employees of its subsidiaries, within the meaning of Section
424(f) of the Code.

 

(b) STOCK
APPRECIATION RIGHTS: Subject to the provisions of the plan, the Committee shall
have the authority to determine the Employees to whom Stock Appreciation Rights
shall be granted, the number of Shares to be covered by each Stock Appreciation
Right Award, the grant price thereof and the conditions and limitations
applicable to the exercise thereof. A Stock Appreciation Right may be granted
in tandem with another Award, in addition to another Award, or freestanding and
unrelated to another Award. A stock Appreciation Right granted in tandem with
or in addition to another Award may be granted either at the same time as such
other Award or at a later time.

 

(i) GRANT
PRICE: The grant price of a Stock Appreciation Right shall be determined by the
Committee on the date of grant.

 

(ii) OTHER
TERMS AND CONDITIONS: Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine, at or after the grant of a Stock
Appreciation Right, the term, methods of exercise, methods of settlement, and
any other terms and conditions of any Stock Appreciation Right. Any such
determination by the Committee may be changed by the Committee from time to
time and may govern the exercise of Stock Appreciation Rights granted or
exercised thereafter. The Committee may impose such conditions or restrictions
on the exercise of any Stock Appreciation Right as it shall deem appropriate.

 

 

(c) RESTRICTED
STOCK: Subject to the provisions of the Plan, the Committee shall have the
authority to determine the Employees to whom Restricted Stock shall be granted,
the number of Shares of Restricted Stock to be granted to each such
Participant, the duration of the Restricted Period during in which, and the
conditions, including the performance criteria, if any, under which, the
Restricted Stock may be forfeited to the Company, and the other terms and
conditions of such Awards.

 

(i) DIVIDENDS:
Dividends paid on Restricted Stock may be paid directly to the Participant, may
be subject to risk of forfeiture and/or transfer restrictions during any period
established by the Committee or sequestered and held in a bookkeeping cash
account (with or without interest) or reinvested on an immediate or deferred
basis in additional shares of Common Stock, which credit or shares may be
subject to the same restrictions as the underlying Award or such other
restrictions, all as determined by the Committee in its discretion.

 

(ii)
REGISTRATION: Any Restricted Stock may be evidenced in such manner as the
Committee shall deem appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates.  In the event any stock certificate is issued
in respect of Restricted Stock granted under the Plan, such certificate shall
be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock.

 

(iii)
FORFEITURE AND RESTRICTIONS LAPSE: Except as otherwise determined by the
Committee or the terms of the Award that granted the Restricted Stock, upon
termination of a Participant’s employment (as determined under criteria
established by the Committee) for any reason during the applicable Restricted
Period, all Restricted Stock shall be forfeited by the Participant and
re-acquired by the company. The Committee may, when it finds that a waiver
would be in the best interests of the Company and not cause such Award, if it
is intended to qualify as performance-based compensation under Section 162(m)
of the Code, to fail to so qualify under Section 162(m) of the Code, waive in
whole or in part any or all remaining restrictions with respect to such
Participant’(1)s Restricted Stock. Unrestricted shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the holder
of Restricted Stock promptly after the applicable restrictions have lapsed or
otherwise been satisfied.

 

(iv) TRANSFER
RESTRICTIONS: During the restricted Period, Restricted stock will be subject to
the limitations on transfer as provided on Section 6(c)(iii) of this plan.

 

(d)
PERFORMANCE AWARDS: The committee shall have the authority to determine the
Employees who shall receive a Performance Award, which shall be denominated as
a cash amount at the time of grant and confer on the Participant the right to
receive payment of such Award, in whole or in part, upon the achievement of
such performance goals during such performance periods as the Committee shall
establish with respect to the Award.

 

(i) TERMS AND
CONDITIONS: Subject to the Terms of the Plan and any applicable Award
Agreement, the Committee shall determine the performance goals to be achieved

 

 

during any performance period,
the length of any performance period, the amount of any Performance Award and
the amount of any payment or transfer to be made pursuant to any Performance
Award.

 

(ii) PAYMENT
OF PERFORMANCE AWARDS: Performance Awards may be paid (in cash and/or in
Shares, in the sole discretion of the Committee) in a lump sum or in
installments following the close of the performance period, in accordance with
procedures established by the committee with respect to such Award.

 

(e) BONUS
SHARES: The committee shall have the authority, in its discretion, to grant
Bonus Shares to eligible employees. Each Bonus Share shall constitute a
transfer of an unrestricted Share to the Participant, without other payment
therefor, as additional compensation for the Participant’(1)s services to the
Company.

 

(f) PHANTOM
SHARES: The Committee shall have the authority to grant Awards of Phantom
Shares to eligible Employees upon such terms and conditions as the committee
may determine.

 

(i) TERMS AND
CONDITIONS: Each Phantom Share Award shall constitute an agreement by the
company to issue or transfer a specified number of Shares or pay an amount of
cash equal to a specified number of shares, or a combination thereof to the
Participant in the future, subject to the fulfillment during the Restricted
Period of such conditions, including performance objectives, if any, as the
committee may specify at the date of grant. During the Restricted Period, the
Participant shall not have any rights of ownership in the Phantom shares and
shall not have any right to vote such shares.

 

(ii)
DIVIDENDS: Any Phantom share Award may provide that any or all dividends or
other distributions paid on shares during the Restricted Period be credited in
a cash bookkeeping account (without interest) or that equivalent additional
Phantom Shares be awarded, which account or shares may be subject to the same
restrictions as the underlying Award or such other restrictions as the
Committee may determine.

 

(g) CASH
AWARDS: The Committee shall have the authority to determine the Employees to
whom Cash Awards shall be granted, the amount, and the terms or conditions, if any,
as additional compensation for the Employee’(1)s services to the Company or its
affiliates. A Cash Award may be granted (simultaneously or subsequently)
separately or in tandem with another Award and may entitle a Participant to
receive a specified amount of cash from the company upon such other Award
becoming taxable to the Participant, which cash amount may be based on a
formula relating to the anticipated taxable

income associated with such
other Award and the payment of the cash Award.

 

(h) GRANTING
OF OPTIONS TO NON-EMPLOYEE DIRECTORS: Each Non-employee Director who serves in
such capacity on the effective date of the plan shall receive, as of such date
and without the exercise of the discretion of any person or persons, a
Non-qualified Stock Option exercisable for 300 Shares. Each Non-employee
Director who is elected or appointed to the board for the first

 

 

time after the effective date
of the Plan shall receive as of the date of his or her election or appointment
and without the exercise of the discretion of any person or persons, a
Non-Qualified Stock Option exercisable for 300 Shares (subject to adjustment in
the same manner as provided in Section 7 hereof with respect to shares subject
to Options then outstanding). As of the date of the annual meeting of the
stockholders of the Company in each year that the Plan is in effect, each
Non-employee Director who is in office immediately after such meeting and who
is not then entitled to receive an Option pursuant to the preceding provisions
of this Section 6(h) shall receive, without the exercise of the discretion of
any person or persons, a Non-Qualified Stock Option exercisable for 300 Shares
(subject to adjustment in the same manner as provided in Section 7 hereof with
respect to shares of Stock subject to Options then outstanding).

 

(i) OTHER
TERMS AND CONDITIONS: The following provisions are applicable to Options
granted pursuant to this Section 6(h):

 

A. Subject to
the following provisions, an Option granted pursuant to Section 6(h) shall
become exercisable for 33 1/3% of the Shares covered thereby on the first
anniversary of the date of grant: and thereafter, for an additional 33 1/3% of
the shares covered thereby on each of the second and third anniversaries of the
grant thereof.

 

B. The purchase
price of a Share covered under an Option granted under this Section 6(h) shall
be the Fair Market Value of a share on the date of grant.

 

C. To the
extent that the right to exercise an Option has accrued and is in effect, the
Option may be exercised in full at one time or in part from time to time by
giving written notice, signed by the optionee exercising the Option, to the
Company, stating the number of shares with respect to which the Option is being
exercised, accompanied by payment in full for such shares, which payment may be
in whole or in part in Shares of the Company already owned by said optionee,
valued at Fair Market Value; provided, however, that (i) no Option shall be
exercisable after ten (10) years from the date on which it was granted, and
(ii) there shall be no such exercise at any one time for fewer than one hundred
(100) Shares or for all of the remaining shares then purchasable by the
optionee exercising the Option, if fewer than one hundred (100) Shares.

 

D. Each Option
shall expire ten (10) years from the date of grant thereof, subject to earlier
termination as follows: Options, to the extent exercisable as of the date a
Non-employee Director optionee ceases to serve as a director of the Company,
must be exercised within three (3) months of such date unless such event
results from death, disability or retirement, in which case all outstanding
Options held by such Non-employee Director may be exercised in full by the
optionee, the optionee’(1)s legal representative, heir or devisee, as the case
may be, within two (2) years from the date of death, disability or retirement;
provided, however, that no such event shall extend the normal expiration date
of such Options. Options not exercisable on termination as provided above shall
be automatically canceled on termination.

 

E. Upon
exercise of the Option, delivery of a certificate for fully paid and
nonassessable shares shall be made at the corporate office of the Company to
the optionee exercising the option either at such time during ordinary business
hours after fifteen (15) days but not more than thirty (30) days from the date
of receipt of the notice by the Company as shall be designated in such

 

 

notice, or at such time, place
and manner as may be agreed upon by the Company and the optionee exercising
this Option.

 

(ii) NUMBER OF
AVAILABLE SHARES: In the event that the number of shares available for grants
under the plan is insufficient to make all grants provided for in this Section
6(h) hereby made on the applicable date, then all Non-employee Directors who
are entitled to a grant on such date shall share ratably in the number of
shares then available for grant under the Plan and shall have no right to
receive a grant with respect to the deficiencies in the number of available
shares and the grants under this Section 6(h) shall terminate.

 

(iii) RULE
16B-3 COMPLIANCE: It is intended that the Plan meet the requirements of Rule
16b-3 and that any Non-employee Director to whom a grant is made pursuant to
this Section 6(h) will not for such reason cease to be a “disinterested person”
within the meaning of Rule 16b-3 with respect to the Plan and other stock
related plans of the Company.

 

(i) GENERAL.

 

(i) AWARDS MAY
BE GRANTED SEPARATELY OR TOGETHER: Awards to Employees may, in the discretion of
the Committee, be granted either alone or in addition to, in tandem with, or in
substitution for any other Award granted under the Plan or any award granted
under any other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards or awards granted under any other
plan of the Company or any affiliate may be granted either at the same time as
or at a different time from the grant of such other Awards or awards.

 

(ii) FORMS OF
PAYMENT BY COMPANY UNDER AWARDS: Subject to the terms of the Plan and of any
applicable Award Agreement, payments or transfers to be made by the company or
an Affiliate upon the grant, exercise or payment of an Award may be made in
such form or forms as the committee shall determine, including, without
limitation, cash, Shares, other securities, other Awards or other property, or
any combination thereof, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance with rules and
procedures established by the committee. Such rules and procedures may include,
without limitation, provision for the payment or crediting of reasonable
interest on installment or deferred payments.

 

(iii) LIMITS
ON TRANSFER OF AWARDS:

 

(A) Each
Award, and each right under any Award, shall be exercisable only by the
Participant during the Participant’(1)s Lifetime, or, if permissible under
applicable law, by the Participant’(1)s guardian or legal representative or by
a transferee receiving such Award pursuant to a qualified domestic relations
order (a “QDRO”) as determined by the Committee.

 

(B) No Award
and no right under any such award may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a participant
otherwise than by will2 or by the laws of descent and distribution (or, in the
case of Restricted Stock, to the Company) or pursuant to a QDRO and any such
purported assignment, alienation, pledge,

 

 

attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate.

 

(iv) TERM OF
AWARDS: The term of each Award (other than pursuant to Section 6(h)) shall be
for such period as may be determined by the Committee; provided, that in no
event shall the term of any Award exceed a period of ten (10) years from the
date of its grant.

 

(v) SHARE
CERTIFICATES: All certificates for shares or other securities of the Company or
any Affiliate delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations and
other requirements of the SEC, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or state laws, and
the committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.

 

(vi)
CONSIDERATION FOR GRANTS: Awards may be granted for no cash consideration or
for such consideration as the Committee determines including, without
limitation, such minimal cash consideration as may be required by applicable
law.

 

(vii) DELIVERY
OF SHARES OR OTHER SECURITIES AND PAYMENT BY PARTICIPANT OF CONSIDERATION: No
Shares or other securities shall be delivered pursuant to any award until
payment in full of any amount required to be paid pursuant to the Plan or the
applicable Award Agreement is received by the Company. Such payment may be made
by such method or methods and such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities, other
Awards or other property, withholding of Shares, cashless exercise with
simultaneous sale, or any combination thereof; provided that the combined
value, as determined by the Committee, of all cash and cash equivalents and the
Fair Market Value of any such Shares or other property so tendered to the
Company, as of the Date of such tender, is at least equal to the full amount
required to be paid pursuant to the Plan of the applicable Award Agreement to
the Company.

 

(viii)
PERFORMANCE CRITERIA AND PAYMENT LIMITS: The Committee shall establish
performance goals applicable to those Awards (other than Options and Rights)
the payment of which is intended by the committee to qualify as “performance-based
compensation” as described in Section 162(m)(4)(C) of the Code. Until changed
by the Committee, the performance goals shall be based upon the attainment of
such target levels of net income,  cash
flows, acquisitions, total capitalization, total or comparative shareholder
return, assets, cost reductions and savings, return on equity, profit margin or
sales, and/or earnings per share as may be specified by the Committee. Which
factor or factors are to be used with respect to any grant, and the weight to
be accorded thereto if more than one factor is used, shall be determined by the
Committee at the time of grant. The maximum amount of compensation that may be
paid to any Participant with respect to any single Performance Award or Cash
Award in any calendar year shall be $500,000.00. With respect to any Restricted
Stock Award, Phantom Stock Award, or Cash Award granted in tandem with, and
expressed as percentage of, a share-denominated Award, which is intended to
qualify as “performance-based compensation”, the maximum payment to any
Participant with respect to such Award in any calendar year shall be an amount

 

 

(in cash and/or in shares)
equal to the Fair Market Value of the number of shares subject to such Award.

 

SECTION 7. AMENDMENT AND
TERMINATION:

 

Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
an Award Agreement or in the Plan:

 

(a) AMENDMENTS
TO THE PLAN: The Board may amend, alter, suspend, discontinue, or terminate the
Plan without the consent of any shareholder, Participant, other holder or
beneficiary of an Award, or other Person; provided, however, that the provision
of Section 6(h) may not be amended more than once every six (6) months other
than to comply 34with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended or the rules thereunder, and; provided
further, that notwithstanding any other provision of the Plan or an Award
Agreement, without the approval of the stockholders of the Company no such
amendment, alteration, suspension,   
discontinuation, or termination shall be made that would increase the
total number of Shares available for Awards under the Plan, except as provided
in Section 4(c) of the Plan.

 

(b) AMENDMENTS
TO AWARDS: The committee may waive any conditions or rights under, amend any
terms of, or alter any Award theretofore granted (other than Awards granted
under Section 6(h)), provided no change, other than pursuant to Section 7(c),
in any Award shall reduce the benefit to Participant without the consent of
such Participant. Notwithstanding the foregoing, with respect to any Award
intended to qualify as performance-based compensation under Section 162(m) of
the Code, no adjustment shall be authorized to the extent such adjustment would
cause the Award to fail to so qualify.

 

(c) ADJUSTMENT
OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS: The
committee is hereby authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards, in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4(c) of the Plan) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in applicable
laws, regulations, or accounting principles, whenever the Committee determines
that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.  Notwithstanding the
foregoing, with respect to any Award intended to qualify as performance-based
compensation under Section 162(m) of the Code, no adjustment shall be
authorized to the extent such adjustment would cause the Award to fail to so
qualify.

 

SECTION 8. CHANGE IN CONTROL:

 

Notwithstanding
any other provision of this Plan to the contrary, in the event of a Change in
Control of the company, all outstanding awards granted more than six (6) months
prior to the date of the Change in Control automatically shall become fully
vested on such Change in Control, all restrictions, if any, with respect to
such Awards, shall lapse, and all performance criteria, if any, with respect to
such Awards shall be

 

 

deemed to have been met in
full. For purposes of this Plan, a “Change in Control” shall be deemed to
occur:

 

(i) upon the
first purchase of the Company’s common stock pursuant to a tender or exchange
offer (other than a tender or exchange offer made by the Company which is
supported by the Board),

 

(ii) upon the
approval by the company’s stockholders of a merger or consolidation, a sale or
disposition of all or substantially all of the company’(1)s assets or a plan of
liquidation or dissolution of the Company, or

 

(iii) if,
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof; unless the election or nomination for
the election by the Company’(1)s Stockholders of each new director was approved
by a vote of at least two-thirds of the directors then still in office who are
directors at the beginning of the period. 
In the event that the Company is merged or consolidated with another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification or
change of outstanding Common Stock), or if all or substantially all of the
assets of the company is acquired by any other corporation, business entity or
person (other than a sale or conveyance in which the Company continues as a
holding company of an entity or entities that conduct the business or
businesses formerly conducted by the Company), or in case of a reorganization
(other than a reorganization under the United States Bankruptcy Code) or a
liquidation of the Company, the Option shall automatically become fully-vested
upon such transaction and the Committee, or the board of directors of any
corporation assuming the obligations of the Company, shall have the power and
discretion to prescribe the exchange or conversion of the Option for options to
acquire securities of the surviving or acquiring corporation, or the payment or
distribution in respect of the outstanding Option (or the portion thereof that
is currently exercisable) in cancellation thereof.

 

SECTION 9. GENERAL PROVISIONS:

 

(a) NO RIGHTS
TO AWARDS: No Employee, Participant, or other Person shall have any claim to be
granted any Award, and there is no obligation for uniformity of treatment of
Employees, Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards need not be the same with respect

to each recipient.

 

(b)
WITHHOLDING: The Company or any Affiliate is authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant, the amount (in
cash, shares, other securities, Shares that would otherwise be issued pursuant
to such Award, other Awards or other property) of any applicable taxes payable
in respect of an Award, its exercise, the lapse of restrictions thereon, or any
payment or transfer under an Award or under the Plan and to take such other
action as may be necessary In the opinion of the Company to satisfy all
obligations for the payment of such taxes. 
With respect to any Person who is an “insider” for purposes of

 

 

Section 16(b) of the Exchange
Act, the Company may provide for automatic withholding from any Award payable
in Shares the appropriate number of Shares required to satisfy the Company’(1)s
withholding obligations, except to the extent the Award has a tandem Cash
Award, in which event withholding shall be made first from such cash Award.

 

(c) NO RIGHT
TO EMPLOYMENT: The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company orany
Affiliate. Further, the Company or an Affiliate may at any time dismiss a
participant from employment, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.

 

(d) GOVERNING
LAW: The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Maryland and applicable Federal law.

 

(e)
SEVERABILITY: If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially

altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and 6any such award shall remain in full
force and effect.

 

(f) OTHER
LAWS: The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines
that the issuance or transfer of such Shares or such other consideration might
violate any applicable law or regulation or entitle the company to recover the
same under Section 16(B) of the Exchange Act and any payment tendered to the
Company by a Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the relevant Participant,
holder or beneficiary.

 

(g) NO TRUST
OR FUND CREATED: Neither the Plan nor the Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between
the Company or any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments from the Company or
any Affiliate pursuant to an Award, such right shall be no greater than the
right of any general unsecured creditor of the company or any Affiliate.

 

(h) NO
FRACTIONAL SHARES: No Fractional Shares shall be issued or delivered pursuant
to the Plan or any Award, and the Committee shall determine whether cash, other
securities, or other property shall be paid or transferred in lieu of any
fractional Shares or whether such fractional Shares or any rights thereto shall
be canceled, terminated, or otherwise eliminated.

 

 

(i) HEADINGS:
Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any
way material or relevant to the construction or interpretation of the Plan or
any provisions thereof.

 

SECTION 10. EFFECTIVE DATE OF
THE PLAN:

 

The Plan shall
be effective as of the date of its approval by the Board, provided the Plan is
subsequently approved by the shareholders of the Company within twelve (12)
months thereafter.

 

SECTION 11. TERM OF THE PLAN:

 

No Award shall
be granted under the Plan ten (10) years after approval by the Board. However,
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award theretofore granted may, 7and the authority of the board
or the committee to amend, alter, adjust, suspend, discontinue, or terminate
any such Award or to waive any conditions or rights under any such Award shall
extend beyond such date.

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