Document:

ex10_a.htm

 

First Amendment to 

Credit Agreement

 

This First Amendment to Credit Agreement is dated as of January 10, 2012 (this “Amendment”), among CTS Corporation, an Indiana corporation (the “Borrower”), the guarantors party hereto, the financial institutions listed on the signature pages hereof as Lenders and BMO Harris Bank N.A. (f/k/a Harris N.A.), as administrative agent (in such capacity, the “Administrative Agent”).

 

Preliminary Statements

 

A.The Borrower, the guarantors party thereto (the “Guarantors”), the financial institutions party thereto as Lenders, and the Administrative Agent have heretofore entered into that certain Credit Agreement dated as of November 18, 2010 (the “Credit Agreement”); and

 

B.The Borrower has asked the Lenders and the Administrative Agent to amend certain covenants, revise the Applicable Margin, increase the maximum amount to which the Commitments may be increased, increase the aggregate Revolving Credit Commitments and to make certain other amendments to the Credit Agreement as set forth herein and the Lenders and the Administrative Agent are willing to do so on the terms and conditions set forth in this Amendment.

 

Now, Therefore, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Article I

 

Definitions

 

Section 1.1 Use of Defined Terms.  Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in the Credit Agreement shall have such meanings when used in this Amendment.

 

Article II

 

Amendments

 

Section 2.1 Section 1.15 of the Credit Agreement is hereby amended by deleting the amount “$200,000,000” appearing therein and inserting in its place the amount “$300,000,000”.

 

Section 2.2 Section 5.1 of the Credit Agreement is hereby amended by (i) amending the defined terms “Applicable Margin” and “Revolving Credit Termination Date” in their entirety and as so amended to read as set forth below and (ii) inserting new defined terms “First Amendment” and “First Amendment Effective Date” as set forth below in their proper alphabetical order:

 

  

  

  

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and the commitment fees and letter of credit fees payable under Section 2.1 hereof until the first Pricing Date (defined below), the rates per annum shown opposite Level II below, and, thereafter, from one Pricing Date to the next Pricing Date means the applicable margin determined in accordance with the following schedule:

	
Level

	
Leverage Ratio for Such Pricing Date

	
Applicable Margin for Base Rate Loans and Reimbursement Obligations shall be:

	
Applicable Margin for Eurodollar Loans and Letter of credit Fee Shall Be:

	
Applicable Margin for Commitment

Fee Shall Be:

	
VI

	
Greater than or equal to 3.0 to 1.0

	
1.25%

	
2.25%

	
0.45%

	
V

	
Less than 3.0 to 1.0, but greater than or equal to 2.5 to 1.0

	
1.00%

	
2.00%

	
0.40%

	
IV

	
Less than 2.5 to 1.0, but greater than or equal to 2.0 to 1.0

	
0.75%

	
1.75%

	
0.35%

	
III

	
Less than 2.0 to 1.0 but greater than or equal to 1.5 to 1.0

	
0.50%

	
1.50%

	
0.30%

	
II

	
Less than 1.5 to 1.0 but greater than or equal to 1.0 to 1.0

	
0.25%

	
1.25%

	
0.25%

	
I

	
Less than 1.0 to 1.0

	
0.00%

	
1.00%

	
0.20%

 

For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of the Borrower ending on or after December 31, 2010, the date on which the Administrative Agent is in receipt of the Borrower’s most recent financial statements (and, in the case of the year-end financial statements, audit report) for the fiscal quarter then ended, pursuant to Section 8.5 hereof.  The Applicable Margin shall be established based on the Leverage Ratio for the most recently completed fiscal quarter and the Applicable Margin established on a Pricing Date shall remain in effect until the next Pricing Date.  If the Borrower has not delivered its financial statements by the date such financial statements (and, in the case of the year-end financial statements, audit report) are required to be delivered under Section 8.5 hereof, until such financial statements and audit report are delivered, the Applicable Margin shall be the highest Applicable Margin (i.e., the Leverage Ratio shall be deemed to be greater than 3.0 to 1.0).  If the Borrower subsequently delivers such financial statements before the next Pricing Date, the Applicable Margin established by such late delivered financial statements shall take effect from the date of delivery until the next Pricing Date.  In all other circumstances, the Applicable Margin established by such financial statements shall be in effect from the Pricing Date that occurs immediately after the end of the fiscal quarter covered by such financial statements until the next Pricing Date.  Each determination of the Applicable Margin made by the Administrative Agent in accordance with the foregoing shall be conclusive and binding on the Borrower and the Lenders if reasonably determined.

 

“First Amendment” means the First Amendment to Credit Agreement dated as of January 10, 2012 by and among the Borrower, the Guarantors, the Lenders and the Administrative Agent.

 

“First Amendment Effective Date” means the date upon which the First Amendment became effective pursuant to its terms.

 

“Revolving Credit Termination Date” means January 10, 2017.

 

Section 2.3 The defined term “Adjusted EBITDA” appearing in Section 5.1 of the Credit Agreement is hereby amended by deleting the phrase “Closing Date” appearing in clause (b) thereof and inserting in its place the phrase “First Amendment Effective Date.”

 

Section 2.4. Section 5.1 is hereby further amended by deleting clause (d) of the definition of “Permitted Acquisition” and inserting in its place the following:

 

(d)for any Acquired Business with its primary operations outside the United States, the Total Consideration for such Acquired Business does not exceed $75,000,000 and, when taken together with the Total Consideration for all Acquired Businesses with their primary operations outside the United States of America acquired from the Closing Date, does not exceed in the aggregate $150,000,000.

 

Section 2.5. Schedule I to the Credit Agreement is hereby amended in its entirety and as so amended shall read as set forth as Schedule I to this Amendment.

 

Section 2.6. Immediately upon the effectiveness of this Amendment each Lender agrees to make such purchases and sales of interests in the Revolving Loans, Swing Loans and L/C Obligations outstanding on the such date between themselves so that each Lender is then holding its Revolver Percentage of outstanding Revolving Loans and risk participation interests in outstanding Swing Loans and L/C Obligations based on their Revolving Credit Commitment as in effect after giving effect to this Amendment (such purchases and sales shall be arranged through the Administrative Agent and each Lender hereby agrees to execute such further instruments and documents, if any, as the Administrative Agent may reasonably request in connection therewith).

 

Section 2.7. The Administrative Agent hereby designates Wells Fargo Bank, N.A., as Documentation Agent.

 

Article III

 

Representations And Warranties

 

Section 3.1  Credit Agreement Representations.  In order to induce the Lenders and the Administrative Agent to enter into this Amendment, the Borrower hereby reaffirms, as of the date hereof, its representations and warranties contained in Section 6 of the Credit Agreement and additionally represents and warrants to the Administrative Agent and each Lender (a) that no Default or Event of Default has occurred and is continuing and (b) as set forth in this Article III.

 

Section 3.2  Due Authorization, Non-Contravention, etc.  The execution, delivery and performance by the Borrower and each Guarantor of this Amendment are within the Borrower’s and such Guarantor’s powers, have been duly authorized by all necessary corporate action, and do not:

 

(a)contravene either the Borrower’s or any Guarantor’s constituent documents;

 

(b)contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting the Borrower or any Guarantor; or

 

(c)result in, or require the creation or imposition of, any Lien on any of the Borrower’s or any Guarantor’s properties.

 

Section 3.3 Government Approval, Regulation, etc.  No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower or any Guarantor of this Amendment.

 

Section 3.4 Validity, etc.  This Amendment constitutes the legal, valid and binding obligation of the Borrower and each Guarantor enforceable in accordance with its terms.

 

Article IV

 

Conditions Precedent

 

Section 4.1 Effectiveness.  The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

 

(i)The Borrower, the Guarantors, the Administrative Agent, and all the Lenders shall have executed and delivered this Amendment;

 

(ii)The Administrative Agent shall have received certified copies of resolutions of the boards of directors (or equivalent governing body) of the Borrower and each Guarantor authorizing the execution and delivery of this Amendment and indicating the authorized signers of this Amendment and the specimen signatures of such signers;

 

(iii)the Administrative Agent shall have received copies of the Borrower’s and each Guarantor’s articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Assistant Secretary;

 

(iv)the Administrative Agent shall have received copies of the certificates of good standing for the Borrower and each Guarantor (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of its incorporation or organization;

 

(v)The Administrative Agent shall have received an opinion of counsel to the Borrower and each Guarantor in form acceptable to the Administrative Agent and covering such matters relating to the transactions contemplated hereby as the Administrative Agent may request;

 

(vi)the Administrative Agent shall have received a certificate in the form attached as Exhibit F to the Credit Agreement signed by the chief financial officer of the Borrower or another officer of the Borrower reasonably acceptable to the Administrative Agent confirming that (i) the Borrower’s Adjusted EBITDA for the twelve-month period ended October 2, 2011 is at least $45,000,000 and (ii) the Borrower’s Leverage Ratio is less than 2.0 to 1.0, calculated  for the twelve-month period ended October 2, 2011;

 

(vii)the Administrative Agent shall have received for the Borrower and its Subsidiaries audited financial statements and unaudited quarterly financial statements (including an income statement, a balance sheet, and a cash flow statement) for the prior three years through the fiscal year ended December 31, 2010, five-year projected financial statements, and a closing balance sheet adjusted to give effect to the transactions to occur on the Closing Date in form and substance acceptable to the Administrative Agent;

 

(viii)The Borrower shall have paid the fees as agreed between the Borrower and the Administrative Agent; and

 

(ix)Legal matters incident to the execution and delivery of this Amendment shall be satisfactory to the Administrative Agent and its counsel.

 

If this Amendment becomes effective, the changes in the Applicable Margin shall take effect on January 10, 2012 and on each day thereafter, but any payment of interest or fees due on or after January 10, 2012 with respect to any amounts owing for any period prior thereto shall be computed on the basis of the Applicable Margin in effect prior to such effectiveness.

 

Article V

 

Miscellaneous Provisions

 

Section 5.1 Ratification of and References to the Credit Agreement.  Except for the amendments expressly set forth above, the Credit Agreement and each other Loan Document are hereby ratified, approved and confirmed in each and every respect.  Reference to this Amendment need not be made in the Credit Agreement, the Note(s), or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.

 

Section 5.2 Headings.  The various headings of this Amendment are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

 

Section 5.3 Execution in Counterparts.  This Amendment may be executed in counterparts (and by different parties hereto on different counterparts) and by facsimile signature, each of which shall constitute an original, but all of which when taken together shall constitute a single agreement.

 

Section 5.4. No Other Amendments.  Except for the amendments expressly set forth above, the text of the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect, and the Lenders and the Administrative Agent expressly reserve the right to require strict compliance with the terms of the Credit Agreement and the other Loan Documents.

 

Section 5.5. Costs and Expenses.  The Borrower agrees to pay on demand all costs and expenses of or incurred by the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Amendment, including the fees and expenses of counsel for the Administrative Agent.

 

Section 5.5 Governing Law.  This Amendment shall be construed in accordance with and governed by the law of the State of Illinois.

 

[Remainder of Page Intentionally Left Blank]

  

  

  

 

In Witness Whereof, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

 

	
“Borrower”

 

	
CTS Corporation,

   an Indiana corporation

 

	
By:

	
/s/ Thomas A. Kroll

	
Name:

	
Thomas A. Kroll

	
Title:

	
Vice President and Chief Financial Officer

 

	
“Guarantors”

 

	
CTS Corporation,

   a Delaware corporation

 

	
By:

	
/s/ Thomas A. Kroll

	
Name:

	
Thomas A. Kroll

	
Title:

	
Vice President and Treasurer

 

	
CTS Electronic Components, Inc.

 

	
By:

	
/s/ Richard G. Cutter

	
Name:

	
Richard G. Cutter

	
Title:

	
Vice President and Secretary

 

	
Dynamics Corporation of America

 

	
By:

	
/s/ Thomas A. Kroll

	
Name:

	
Thomas A. Kroll

	
Title:

	
Vice President and Treasurer

 

 

	
LTB Investment Corporation

 

	
By:

	
/s/ Thomas A. Kroll

	
Name:

	
Thomas A. Kroll

	
Title:

	
Vice President and Treasurer

 

	
CTS Electronics Manufacturing Solutions, Inc.

 

	
By:

	
/s/ Richard G. Cutter

	
Name:

	
Richard G. Cutter

	
Title:

	
Vice President and Secretary

  

  

  

	
“Lenders”

 

	
BMO Harris Bank N.A. (f/k/a Harris N.A.), in its individual capacity as a Lender, as L/C Issuer, and as Administrative Agent

 

	
By:

	
/s/ Thad D. Rasche

	
Name:

	
Thad D. Rasche

	
Title:

	
Director

  

  

  

	
Bank of America, N.A.

 

	
By:

	
/s/ Bijon Jalaie

	
Name:

	
Bijon Jalaie

	
Title:

	
Vice President

  

  

  

	
PNC Bank, National Association

 

	
By:

	
/s/ Chris D. Thornton

	
Name:

	
Chris D. Thornton

	
Title:

	
Senior Vice President

  

  

  

	
Wells Fargo Bank, N.A

 

	
By:

	
/s/ Martin Erschen

	
Name:

	
Martin Erschen

	
Title:

	
Vice President

  

  

  

	
The Northern Trust Company

 

	
By:

	
/s/ Mike Fornal

	
Name:

	
Mike Fornal

	
Title:

	
Vice President

 

  

  

  

Schedule 1

 

Commitments

 

	
Name of Lender

	
Revolving Credit Commitment

	
Swing Line Commitment

	
BMO Harris Bank N.A.

	
$50,000,000

	
$15,000,000

	
Bank of America, N.A.

	
$45,000,000

	  
	
Wells Fargo Bank, N.A.

	
$45,000,000

	  
	
PNC Bank, National Association

	
$35,000,000

	  
	
The Northern Trust Company

	
$25,000,000

	
                     

	
Total

	
$200,000,000

	
$15,000,000Ex. 10.1 Terms and Conditions of Stock Options awarded under the Weyerhaeuser Company 2004 Long Term Incentive Plan

Exhibit 10.1 Terms and Conditions of Stock Options awarded under the Weyerhaeuser Company 2004 Long Term Incentive Plan

WEYERHAEUSER COMPANY
2004 LONG-TERM INCENTIVE PLAN
STOCK OPTION AWARD
TERMS AND CONDITIONS
Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and these Stock Option Award Terms and Conditions, Weyerhaeuser Company has granted you an Option under its 2004 Long-Term Incentive Plan (the “Plan”) to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice.  You may decline this Grant by notifying sharon.dusek@weyerhaeuser.com within one month of the grant date.  In the event you decline this Grant, you will not be entitled to any award, benefit, or other compensation in lieu thereof.
Capitalized terms not explicitly defined in this document but defined in the Plan have the definitions given to such terms in the Plan.  The Option is granted to you as a participant in the Plan and is subject to the terms and conditions set out in the Plan.  In addition, the Option has the following terms and conditions:
1.    Vesting.  Subject to the provisions of Section 3, the Option will vest and become exercisable over a period of four years.  No part of the Option will be exercisable until the one-year anniversary of the Grant Date.  On the one-year anniversary of the Grant Date, 25% of the Option will vest and become exercisable, with an additional 25% of the Option vesting and becoming exercisable on each of the second, third and fourth anniversaries of the Grant Date, respectively.  As of the fourth anniversary of the Grant Date, 100% of the Option will be vested and exercisable.
2.    Term.  The Options will expire on the date specified in your Grant Notice, which is the tenth anniversary of the Grant Date.  Following that date, you will no longer be able to exercise the Option.  In addition, as set forth in Section 3, the Option may terminate earlier than the tenth anniversary of the Grant Date if your employment with the Company and all Related Companies ceases for any reason.  Transfer of employment between or among the Company and its subsidiaries is not considered termination of employment.  Options that are not vested before their expiration date are forfeited and without value.
3.    Termination of Employment; Death; Disability; Change in Control.  In the event of your termination of employment, death or Disability or a Change in Control, the following vesting and expiration dates will apply.
(a)Termination of Employment at Age 62.  If you terminate employment at age 62 or older and if clause (ii) in the first paragraph of Section 3(g) is not applicable, your Option will continue to vest according to the vesting schedule described above and you will be able to exercise any portion of your Option that has vested for the remaining term of the grant, up to a maximum of 10 years.

(b)Termination of Employment Due to Job Elimination.  If your employment is involuntarily terminated due to the elimination of your position with the Company or any Related Company and if clause (ii) in the first paragraph of Section 3(g) is not applicable, your Option will continue to vest for one year following your termination.  The remaining unvested portion of your 

Option as of the one-year anniversary of your termination date will be cancelled.  You will be able to exercise the vested portion of your Option within a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time.

(c)Termination of Employment for Other Reasons.  If your employment is terminated before your Option fully vests under Section 1 and none of the other provisions under Section 3 apply, any portion of your Option that is not vested under Section 1 on the date of your termination is immediately forfeited and no longer has any value.  You will be able to exercise any portion of your Option that has vested as of the date of your termination for a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time.
(d)Termination of Employment for Cause.  If your employment is terminated for Cause, then, notwithstanding anything to the contrary herein, including, but not limited to, Section 3(a), both the vested and nonvested portions of the Option will automatically expire at the time the Company or Related Company first notifies you of your termination for Cause, unless the Committee determines otherwise.  If your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, all your rights under the Option, including the right to exercise any vested portion of the Option, likewise will be suspended during the period of investigation.  In no event will such a suspension extend the remaining term of the grant, even if it is ultimately determined that you will not be terminated for Cause.  If any facts that would constitute termination for Cause are discovered after your Termination of Service, any Option you then hold may be immediately terminated by the Committee.
“Cause” means:  (i) willful and continued failure to perform substantially your duties with the Company or any Related Company after the Company or Related Company delivers to you written demand for substantial performance specifically identifying the manner in which you have not substantially performed your duties; (ii) conviction of a felony; or (iii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company or any Related Company.
(e)Termination as a result of death of the Participant.  During your lifetime, this Option may be exercised only by you.  If you die while actively employed, your Option is automatically 100% vested and your beneficiary or, if there is no named beneficiary, your personal representative may exercise the Option at any time or from time to time within a maximum of three years after your date of death, or during the remaining term of the grant if that is a shorter period of time.

(f)Termination of Employment due to Disability.  If your employment is terminated as a result of Disability while actively employed, your Option is automatically 100% vested.  You will be able to exercise the Option within a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time. 

As defined by the Company's Retirement Plan for Salaried Employees, “Disability” means “a medical condition in which a Participant is either entitled to total and permanent disability benefits under the Social Security Act or judged to be totally and permanently disabled by the Administrative Committee or any person or committee delegated by the Administrative Committee to make such determinations.” 

The Option must be exercised within three months after termination of employment for reasons other than death or Disability and one year after termination of employment due to Disability to qualify 

for the beneficial tax treatment afforded Incentive Stock Options.  

It is your responsibility to be aware of the date the Option terminates.  
(g)    Change in Control.  In the event of a Change in Control, your Option will immediately become 100% exercisable and remain exercisable for the remaining term of the grant, up to a maximum of 10 years, but only if either:  (i) the Option is not assumed, converted or replaced by the successor entity to the Company or (ii) within 24 full calendar months following the effective date of the Change in Control, your employment is either involuntarily terminated by the Company (which term includes, for purposes of this Section 3(g), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or voluntarily terminated by you for Good Reason. 
“Good Reason” means, without your express written consent, the occurrence of any one or more of the following events:
		
	i.
	a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control;

		
	ii.
	within two years following a Change in Control, the Company's requiring you to be based at a location that is at least 50 miles farther from your primary residence immediately prior to a Change in Control than is such residence from the Company's headquarters immediately prior to a Change in Control, except for required travel on the Company's business to an extent substantially consistent with your business obligations as of the Grant Date;

		
	iii.
	a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control;

		
	iv.
	a material reduction in the benefits coverage in the aggregate provided to you immediately prior to the Change in Control; provided, however, that reductions in the level of benefits coverage will not be deemed to be “Good Reason” if your overall benefits coverage is substantially consistent with the average level of benefits coverage of other executives who have positions commensurate with your position at the acquiring company; or

		
	v.
	a material reduction in your level of participation, including your target-level opportunities, in any of the Company's short- and/or long-term incentive compensation plans in which you participate as of the Grant Date (for this purpose a material reduction shall be deemed to have occurred if the aggregate “incentive opportunities” are reduced by 10% or more); or a material increase in the relative difficulty of the measures used to determine the payouts under such plans; provided, however, that reductions in the levels of participation or increase in relative difficulty of payout measures will not be deemed to be “Good Reason” if your reduced level of participation or difficulty of measures in each such program remains substantially consistent with the level of participation or difficulty of the measures of some or all other executives who have positions commensurate with your position at the acquiring company.  

In no event will your resignation be for Good Reason unless:  (A) an event set forth above has occurred and you provide the Company with written notice thereof within 30 days after you have knowledge of the occurrence or existence of such event, which notice specifically identifies the event that you believe constitutes Good Reason, and (B) the Company fails to correct the event so identified in all material respects within 30 days after receipt of such notice.

4.    Securities Law Compliance.  Notwithstanding any other provision of this grant, you may not exercise the Option unless the Shares issuable upon exercise are registered under the Securities Act or if the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act.  The exercise of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option if the Company determines that such exercise would not be in compliance with such laws and regulations.
5.    Incentive Stock Option Qualification.  If your Option is designated as an Incentive Stock Option in your Grant Notice, all or a portion of the Option is intended to qualify as an Incentive Stock Option under federal income tax law.  However, the Company does not represent or guarantee that the Option qualifies as such.
If the Option has been designated as an Incentive Stock Option and the aggregate Fair Market Value (determined as of the grant date) of the shares of Common Stock subject to the portions of the Option and all other Incentive Stock Options you hold that first become exercisable during any calendar year exceeds $100,000, any excess portion will be treated as a Nonqualified Stock Option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for Incentive Stock Options.  In addition, a portion of the Option may be treated as a Nonqualified Stock Option if certain events cause exercisability of the Option to accelerate.  
6.    Notice of Disqualifying Disposition.  To the extent the Option has been designated as an Incentive Stock Option, to obtain certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for two years after the Grant Date and one year after the date of exercise.  If shares of stock obtained upon exercise of an Incentive Stock Option are tendered to pay the exercise price for another option less than one year after the exercise date of the Incentive Stock Option, the tender will be considered a disqualifying disposition.  You may be subject to the alternative minimum tax at the time of exercise.  You should obtain tax advice when exercising the Option and prior to the disposition of the Shares.  By accepting an Option designated as an Incentive Stock Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the date you exercise all or part of the Option or within two years from the Grant Date.
7.    Method of Exercise.  You may exercise the Option by giving notice to the Company or a brokerage firm designated or approved by the Company, in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares for which you are exercising the Option.  The notice must be accompanied by full payment of the exercise price for the number of Shares you are purchasing.  You may make this payment in any combination of the following:  (a) by cash; (b) by check acceptable to the Company; (c) by tendering (either actually or by attestation) shares of Common Stock you have owned for at least six months (if such holding period is necessary to avoid a charge to the Company's earnings); (d) to the extent permitted by law, by instructing a broker to deliver to the Company the total payment required in accordance with procedures established by the Company; or (e) by any other method permitted by the Committee.
8.    Withholding Taxes.  As a condition to the exercise of any portion of an Option, you must make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise.
9.    Option Not an Employment or Service Contract.  Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate 

your employment or other relationship at any time, with or without Cause.

10.    No Right to Damages.  You will have no right to bring a claim or to receive damages if you are required to exercise the vested portion of the Option within three years of the Termination of Service or if any portion of the Option is cancelled or expires unexercised.  The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your Termination of Service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you.
11.    Binding Effect.  The terms and conditions of this grant will inure to the benefit of the successors and assigns of the Company and be binding upon you and your beneficiaries, heirs, executors, administrators, successors and assigns.
12.    Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.  (a) The Plan is discretionary in nature and may be suspended or terminated by the Company at any time.  (b) The grant of the Option is a one-time benefit that does not create any contractual or other right to receive future grants of options, or benefits in lieu of options.  (c) All determinations with respect to any such future grants, including, but not limited to, the times when options will be granted, the number of shares subject to each option, the option price, and the time or times when each option will be exercisable, will be at the sole discretion of the Company.  (d) Your participation in the Plan is voluntary.  (e) The value of the Option is an extraordinary item of compensation that is outside the scope of your employment contract, if any.  (f) The Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.  (g) The vesting of the Option ceases upon your Termination of Service for any reason except as may otherwise be explicitly provided in the Plan, the terms and conditions of this grant, or otherwise permitted by the Committee.  (h) The future value of the Shares underlying the Option is unknown and cannot be predicted with certainty.  (i) If the Shares underlying the Option do not increase in value, the Option will have no value.
13.      Employee Data Privacy.  By receiving this award, you:  (a) authorize the Company and your employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Option and the administration of the Plan; (b) waive any data privacy rights you may have with respect to such information; and (c) authorize the Company and its agents to store and transmit such information in electronic form.
14.      Section 409A.  The Option is intended to be exempt from the requirements of section 409A of the U.S. Internal Revenue Code (“Section 409A”) and shall be interpreted, operated and administered in a manner consistent with such intention.  To the extent that the Company determines that the Option is subject to Section 409A and fails to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to unilaterally amend, restructure, terminate or replace the Option in order to cause the Option to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A.

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