Document:

Exhibit 10(i)

 

The rights and remedies of Ronald D. Ordway under this
instrument are subject to the terms and conditions of those certain Debt
Subordination Agreements dated as of June 28, 2006 among Ronald D. Ordway,
Video Display Corporation,
its subsidiaries and each of  RBC
Centura Bank and Regions Bank, as each may be amended from time to time, each
of which is incorporated herein by specific reference thereto to the same
extent as if fully set forth herein.

 

SUBORDINATED NOTE AGREEMENT

$6,000,000.00

 

	
  State of Georgia

  	
  )

  	
  , 2006

  
	
   

  	
  )

  	
   

  
	
  County of Dekalb

  	
  )

  	
   

  

 

FOR VALUE RECEIVED, the
undersigned, Video Display Corporation promises to pay to the order of Ronald
D. Ordway (together with any holder hereof, the “Holder”) at any such place the
principal sum of Six Million and No/100 Dollars ($6,000,000.00) plus all
accrued and unpaid interest on the unpaid balance of such principal amount, at
the rate of interest and in installments as described below.

 

Principal
and interest shall be due and payable on the first day of each month,
commencing August 1, 2006, in consecutive monthly installments in an
amount equal to the sum of (i) all then accrued and unpaid interest, plus (ii) a
principal payment in the amount of $33,333.33. 
The entire unpaid principal amount hereof, together with accrued and
unpaid interest thereon and all other amounts payable hereunder shall be due
and payable on July 1, 2021.

 

Interest on the unpaid
balance hereof shall accrue at an annual rate (computed on the basis of actual
days elapsed over a 360 day year) equal to the prime rate plus one percent (1.00
%) which interest shall be paid monthly until expiration of the Note. The prime
rate for purposes of this Note shall be determined on a month to month basis,
using the consensus prime rate published by the Wall Street Journal effective
on the first day of each such month.

 

The
rights and remedies of Ronald D. Ordway under this instrument are subject to
the terms and conditions of that certain Debt Subordination Agreement dated as
of June 28, 2006 between Ronald D. Ordway, RBC Centura Bank and Regions Bank, as it may be amended from time to time, which is incorporated herein
by specific reference thereto to the same extent as if fully set forth herein.

 

The undersigned shall
have the right to repay the indebtedness represented by this Note in whole or
in part without premium or penalty.

 

The Holder is hereby
granted a lien on all assets of Video Display Corporation subordinated only to
those liens filed by Centura Bank and Regions Bank.

 

This Note supercedes any
and all demand notes outstanding between the lender, Ronald D. Ordway and the
borrower, Video Display Corporation.

 

This Note is executed
under the hand and seal of the undersigned on the date first above written.

 

 

	
   

  	
  BY:

  	
  VIDEO DISPLAY CORPORATION

  
	
   

  	
   

  	
   Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael D.
  Boyd

  	
   

  
	
   

  	
   

  	
  Michael
  D. Boyd

  
	
   

  	
   

  	
  Chief
  Financial OfficerExhibit 4.1

MERIT MEDICAL SYSTEMS, INC.

2006 LONG-TERM INCENTIVE PLAN

Merit Medical Systems, Inc. (the “Company”), a
Utah corporation, hereby establishes and adopts the following 2006 Long-Term
Incentive Plan (the “Plan”) effective as of the date specified in Section 13.13
below.

1.             PURPOSE
OF THE PLAN

The purpose of the Plan is to assist the Company and
its Subsidiaries in attracting and retaining selected individuals to serve as
directors, employees, consultants and/or advisors of the Company who are expected
to contribute to the Company’s success and to achieve long-term objectives
which will inure to the benefit of all stockholders of the Company through the
additional incentives inherent in the Awards hereunder.

2.                                      DEFINITIONS

2.1.         “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award, Other Stock Unit Award or any other right, interest or
option relating to Shares or other property (including cash) granted pursuant
to the provisions of the Plan.

2.2.         “Award
Agreement” shall mean any written agreement, contract or other
instrument or document evidencing any Award granted by the Committee hereunder,
including through an electronic medium.

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

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

2.5.         “Committee”
shall mean the Compensation Committee of the Board, consisting of no fewer than
two Directors, each of whom is (i) a “Non-Employee Director” within the
meaning of Rule 16b-3 of the Exchange Act; (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and (iii) an
“independent director” for purpose of the rules and regulations of the
NASDAQ Stock Market (or such other principal securities market on which the
Shares are traded).

2.6.         “Covered
Employee” shall mean an employee of the Company who is a “covered
employee” within the meaning of Section 162(m) of the Code.

2.7.         “Director”
shall mean a non-employee member of the Board.

2.8.         “Dividend
Equivalents” shall have the meaning set forth in Section 12.5.

 

 

2.9.         “Employee”
shall mean any employee of the Company or any Subsidiary and any prospective
employee conditioned upon, and effective not earlier than, such person’s
becoming an employee of the Company or any Subsidiary. Solely for purposes of
the Plan, an Employee shall also mean any consultant or advisor who provides
services to the Company or any Subsidiary, so long as such person (i) renders
bona fide services that are not in connection with the offer and sale of the
Company’s securities in a capital-raising transaction and (ii) does
not directly or indirectly promote or maintain a market for the Company’s
securities.

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

2.11.       “Fair
Market Value” shall mean, with respect to any property other than
Shares, the market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee. The Fair
Market Value of Shares as of any date shall be the per Share average of the
high and low trading prices of the Shares as reported on the NASDAQ Stock
Market on that date (or if there were no reported prices on such date, on the
last preceding date on which the prices were reported) or, if the Company is
not then listed on the NASDAQ Stock Market, on such other principal securities
exchange on which the Shares are traded, and if the Company is not listed on
the NASDAQ Stock Market or any other securities exchange, the Fair Market Value
of Shares shall be determined by the Committee in its sole discretion using
appropriate criteria.

2.12.       “Freestanding
Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

2.13.       “Limitations”
shall have the meaning set forth in Section 10.5.

2.14.       “Option”
shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period
or periods as the Committee shall determine.

2.15.       “Other
Stock Unit Award” shall have the meaning set forth in Section 8.1.

2.16.       “Participant”
shall mean an Employee or Director who is selected by the Committee to receive
an Award under the Plan.

2.17.       “Payee” shall have the meaning set forth in
Section 13.1.

2.18.       “Performance
Award” shall mean any Award of Performance Shares or Performance
Units granted pursuant to Article 9.

2.19.       “Performance
Period” shall mean that period established by the Committee at the
time any Performance Award is granted or at any time thereafter during which
any performance goals specified by the Committee with respect to such Award are
to be measured.

2.20.       “Performance
Share” shall mean any grant pursuant to Article 9 of a unit
valued by reference to a designated number of Shares, which value may be paid
to the Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination thereof,
upon achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.

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2.21.       “Performance
Unit” shall mean any grant pursuant to Section 9 of a unit
valued by reference to a designated amount of property other than Shares (or
cash), which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including cash, Shares, other property, or
any combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant
or thereafter.

2.22.       “Permitted
Assignee” shall have the meaning set forth in Section 12.3.

2.23.       “Prior
Plans” shall mean the Merit Medical Systems, Inc. Amended and
Restated Stock Incentive Plan and the various “Predecessor Plans” as defined
therein.

2.24.       “Restricted
Stock” shall mean any Share issued with the restriction that the
holder may not sell, transfer, pledge or assign such Share and with such other
restrictions as the Committee in its sole discretion, may impose (including any
restriction on the right to vote such Share and the right to receive any
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may deem
appropriate.

2.25.       “Restricted
Stock Award” shall have the meaning set forth in Section 7.1.

2.26.       “Shares”
shall mean the shares of common stock, no par value, of the Company.

2.27.       “Stock
Appreciation Right” shall mean the right granted to a Participant
pursuant to Section 6.

2.28.       “Subcommittee”
shall mean a subcommittee of the Committee designated by the Committee.

2.29.       “Subsidiary”
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
Award, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.

2.30.       Substitute
Awards” shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted,
or the right or obligation to make future awards, by a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines.

2.31.       “Tandem
Stock Appreciation Right” shall have the meaning set forth in Section 6.1.

2.32.       “Vesting
Period” shall have the meaning set forth in Section 7.1.

3.             SHARES
SUBJECT TO THE PLAN

3.1          Number of Shares. (a)  Subject to
adjustment as provided in Section 12.2, a total of 1,500,000 Shares shall
be authorized for grant under the Plan. Any Shares that are subject to 

 3
 

 

 

Awards of
Options or Stock Appreciation Rights shall be counted against this limit as one
(1) Share for every one (1) Share granted. Any Shares that are
subject to Awards other than Options or Stock Appreciation Rights shall be
counted against this limit as two (2.0) Shares
for every one (1) Share granted.

(b)           If any Shares
subject to an Award are forfeited, any Options awarded under this Plan expire
unexercised, or any Award is settled for cash, the Shares shall, to the extent
of such forfeiture, expiration or cash settlement, again be available for
Awards under the Plan, subject to Section 3.1(d) below. Notwithstanding
anything to the contrary contained herein, the following Shares shall not be
added to the Shares authorized for grant under paragraph (a) of this
Section: (i) Shares tendered by the Participant or withheld by the Company
in payment of the purchase price of an Option, (ii) Shares tendered by the
Participant or withheld by the Company to satisfy any tax withholding
obligation with respect to an Award, (iii) Shares repurchased by the
Company with Option proceeds, and (iv) Shares subject to a Stock Appreciation
Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right on exercise thereof.

(c)           Substitute Awards
shall not reduce the Shares authorized for grant under the Plan or authorized
for grant to a Participant in any calendar year.

(d)           Any Shares that
again become available for grant pursuant to this Article shall be added
back as one (1) Share if such Shares were subject to Options or Stock
Appreciation Rights granted under the Plan, and as two  (2.0) Shares if such Shares were subject to
Awards other than Options or Stock Appreciation Rights granted under the Plan.

3.2.         Character
of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares purchased in
the open market or otherwise.

4.             ELIGIBILITY
AND ADMINISTRATION

4.1.         Eligibility. Any Employee or Director
shall be eligible to be selected as a Participant.

4.2.         Administration. (a) The Plan shall be
administered by the Committee. Subject to Section 4.2(c) below, the
other provisions of the Plan and such orders or resolutions not inconsistent
with the provisions of the Plan as may from time to time be adopted by the
Board, the Committee shall have full power and authority to: (i) select
the Employees and Directors to whom Awards may from time to time be granted
hereunder; (ii) determine the type or types of Awards, not inconsistent
with the provisions of the Plan, to be granted to each Participant hereunder; (iii) determine
the number of Shares to be covered by each Award granted hereunder; (iv) determine
the terms and conditions, not inconsistent with the provisions of the Plan, of
any Award granted hereunder; (v) determine whether, to what extent and
under what circumstances Awards may be settled in cash, Shares or other
property; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other property and other amounts payable with
respect to an Award made under the Plan shall be deferred either automatically
or at the election of the Participant; (vii) determine whether, to what
extent and under what circumstances any Award shall be canceled or suspended; (viii) interpret
and administer the Plan and any 

 4
 

 

 

instrument or
agreement entered into under or in connection with the Plan, including any
Award Agreement; (ix) correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent that
the Committee shall deem desirable to carry it into effect; (x) establish
such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (xi) determine whether
any Award, other than an Option or Stock Appreciation Right, will have Dividend
Equivalents; and (xii) make any other determination and take any other
action that the Committee deems necessary or desirable for administration of
the Plan.

(b)           Decisions of the
Committee shall be final, conclusive and binding on all persons or entities,
including the Company, any Participant, and any Subsidiary.  A Participant or other holder of an Award may
contest a decision or action of the Committee with respect to such person or
Award only on the grounds that such decision is arbitrary and capricious or
unlawful, and any review of such decision or action shall be limited to
determining whether the Committee’s decision or action was arbitrary and
capricious or unlawful. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.

(c)           The full Committee
may also delegate to a Subcommittee the right to grant Awards to Employees who
are not Directors or officers of the Company and the authority to take action
on behalf of the Committee pursuant to the Plan to cancel or suspend Awards to
Employees who are not Directors or officers of the Company.

(d)           Any action within
the scope of its authority by a Subcommittee under Section 4.2(d) shall
be deemed for all purposes under the Plan to have been taken by the full
Committee and references in the Plan to the Committee shall be deemed to
include the Subcommittee unless the context otherwise requires.

5.             OPTIONS

5.1.         Grant
of Options. Options may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan. Any Option shall
be subject to the terms and conditions of this Article and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable.

5.2.         Award
Agreements. All Options granted pursuant to this Article shall
be evidenced by a written Award Agreement in such form and containing such
terms and conditions as the Committee shall determine which are not
inconsistent with the provisions of the Plan. The terms of Options need not be
the same with respect to each Participant. Granting an Option pursuant to the
Plan shall impose no obligation on the recipient to exercise such Option. Any
individual who is granted an Option pursuant to this Article may hold more
than one Option granted pursuant to the Plan at the same time.

5.3.         Option
Price. Other than in connection with Substitute Awards, the option
price per each Share purchasable under any Option granted pursuant to this Article shall
not be less than 100% of the Fair Market Value of such Share on the date of
grant of such Option. Other than pursuant to Section 12.2, the Committee
shall not without the approval of the Company’s stockholders (a) lower the
option price per Share of an Option after it is granted, (b) cancel an
Option when the option price per Share exceeds the Fair Market Value of the
underlying Shares 

 5
 

 

 

in exchange
for another Award (other than in connection with  Substitute Awards), and (c) take any
other action with respect to an Option that may be treated as a repricing under
the rules and regulations of the NASDAQ Stock Market (or such other
principal securities market on which the Shares are traded).

5.4.         Option Term. The term of each Option shall
be fixed by the Committee in its sole discretion; provided that no Option shall
be exercisable after the expiration of seven (7) years from the date the
Option is granted, except in the event of death or disability.

5.5.         Exercise of Options. Vested Options
granted under the Plan shall be exercised by the Participant or by a Permitted
Assignee thereof (or by the Participant’s executors, administrators, guardian
or legal representative, as may be provided in an Award Agreement) as to all or
part of the Shares covered thereby, by the giving of written notice of exercise
to the Company or its designated agent, specifying the number of Shares to be
purchased, accompanied by payment of the full purchase price for the Shares
being purchased. Unless otherwise provided in an Award Agreement, full payment
of such purchase price shall be made at the time of exercise and shall be made (a) in
cash or cash equivalents (including certified check or bank check or wire
transfer of immediately available funds), (b) by tendering previously
acquired Shares (either actually or by attestation, valued at their then Fair
Market Value), (c) with the consent of the Committee, by delivery of other
consideration (including, where permitted by law and the Committee, other
Awards) having a Fair Market Value on the exercise date equal to the total
purchase price, (d) with the consent of the Committee, by withholding
Shares otherwise issuable in connection with the exercise of the Option, (e) through
any other method specified in an Award Agreement, or (f) any combination
of any of the foregoing. The notice of exercise, accompanied by such payment,
shall be delivered to the Company at its principal business office or such
other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such issuance.

5.6.         Form of
Settlement. In its sole discretion, the Committee may provide, at
the time of grant, that the Shares to be issued upon an Option’s exercise shall
be in the form of Restricted Stock or other similar securities, or may reserve
the right so to provide after the time of grant.

5.7.         Incentive
Stock Options. The Committee may grant Options intended to qualify
as “incentive stock options” as defined in Section 422 of the Code, to any
employee of the Company or any Subsidiary, subject to the requirements of Section 422
of the Code. Solely for the purposes of determining whether Shares are
available for the grant of “incentive stock options” under the Plan, the
maximum aggregate number of Shares with respect to which “incentive stock
options” may be issued under the Plan shall be 1,500,000 Shares.

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6.             STOCK
APPRECIATION RIGHTS

6.1.         Grant
and Exercise. The Committee may provide Stock Appreciation Rights (a) in
conjunction with all or part of any Option granted under the Plan or at any
subsequent time during the term of such Option (“Tandem Stock Appreciation
Right”), (b) in conjunction with all or part of any Award (other than an
Option) granted under the Plan or at any subsequent time during the term of
such Award, or (c) without regard to any Option or other Award (a “Freestanding
Stock Appreciation Right”), in each case upon such terms and conditions as the
Committee may establish in its sole discretion.

6.2.         Terms
and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the
following:

(a)           Upon the exercise of
a Stock Appreciation Right, the holder shall have the right to receive the
excess of (i) the Fair Market Value of one Share on the date of exercise,
over (ii) the designated based value per Share (the “Base Amount”) with
respect to the right on the date of grant (or in the case of a Tandem Stock
Appreciation Right on the date of grant of the related Option) as specified by
the Committee in its sole discretion, which Base Amount per Share, except in
the case of Substitute Awards or in connection with an adjustment provided in Section 12.2,
shall not be less than the Fair Market Value of one Share on such date of grant
of the right or the related Option, as the case may be.

(b)           Upon the exercise of
a Stock Appreciation Right, the Committee shall determine in its sole
discretion whether payment shall be made in cash, in whole Shares or other
property, or any combination thereof.

(c)           Any Tandem Stock
Appreciation Right may be granted at the same time as the related Option is
granted or at any time thereafter before exercise or expiration of such Option.

(d)           Any Tandem Stock
Appreciation Right related to an Option may be exercised only when the related
Option would be exercisable and the Fair Market Value of the Shares subject to
the related Option exceeds the option price at which Shares can be acquired
pursuant to the Option. In addition, (i) if a Tandem Stock Appreciation
Right exists with respect to less than the full number of Shares covered by a
related Option, then an exercise or termination of such Option shall not reduce
the number of Shares to which the Tandem Stock Appreciation Right applies until
the number of Shares then exercisable under such Option equals the number of
Shares to which the Tandem Stock Appreciation Right applies, and (ii) no
Tandem Stock Appreciation Right granted under the Plan to a person then subject
to Section 16 of the Exchange Act shall be exercised during the first six (6) months
of its term for cash, except as provided in Article 11.

(e)           Any Option related
to a Tandem Stock Appreciation Right shall no longer be exercisable to the
extent the Tandem Stock Appreciation Right has been exercised.

(f)            The provisions of
Stock Appreciation Rights need not be the same with respect to each recipient.

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(g)           The Committee may
impose such other conditions or restrictions on the terms of exercise and the
exercise price of any Stock Appreciation Right, as it shall deem appropriate. Notwithstanding
the foregoing provisions of this Section 6.2(g), but subject to Section 12.2,
a Freestanding Stock Appreciation Right shall have the same terms and
conditions as Options, including (i) a Base Amount per Share not less than
Fair Market Value of a Share on the date of grant to an employee of the Company
or a Subsidiary, and (ii) a term not greater than seven (7) years. In
addition to the foregoing, but subject to Section 12.2, the Committee
shall not without approval of the Company’s stock holders (a) reduce the
Base Amount per Share under any Stock Appreciation Right after it is granted, (b) cancel
a Stock Appreciation Right when the Base Amount per Share exceeds the Fair Market
Value of the underlying Shares in exchange for another Award (other than in
connection with Substitute Awards), and (c) take any other action with
respect to a Stock Appreciation Right that may be treated as a repricing under
the rules and regulations of the NASDAQ Stock Market (or such other
principal securities market on which the Shares are traded).

(h)           The Committee may
impose such terms and conditions on Stock Appreciation Rights granted in
conjunction with any Award (other than an Option) as the Committee shall
determine in its sole discretion.

7.                                      RESTRICTED
STOCK AWARDS

7.1.         Grants. Awards of Restricted Stock may be
issued hereunder to Participants either alone or in addition to other Awards
granted under the Plan (a “Restricted Stock Award”), and such Restricted Stock
Awards shall also be available as a form of payment of Performance Awards and
other earned cash-based incentive compensation. A Restricted Stock Award shall
be subject to vesting restrictions imposed by the Committee covering a period
of time specified by the Committee (the “Vesting Period”) subject to Section 7.4
below.  The Committee has absolute
discretion to determine whether any consideration (other than services) is to
be received by the Company or any Subsidiary as a condition precedent to the
issuance of Restricted Stock.

7.2.         Award
Agreements. The terms of any Restricted Stock Award granted under
the Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The
terms of Restricted Stock Awards need not be the same with respect to each
Participant

7.3.         Rights
of Holders of Restricted Stock. Beginning on the date of grant of
the Restricted Stock Award and subject to execution of the Award Agreement, the
Participant shall become a shareholder of the Company with respect to all
Shares subject to the Award Agreement and shall have all of the rights of a
shareholder, including the right to vote such Shares and the right to receive
distributions made with respect to such Shares; provided, however, that except as otherwise provided in an
Award Agreement any Shares or any other property (other than cash) distributed
as a dividend or otherwise with respect to any Restricted Stock as to which the
restrictions have not yet lapsed shall be subject to the same restrictions as
such Restricted Stock.

7.4.         Minimum
Vesting Period. Except for certain limited situations (including the
death or disability or retirement of the Participant, or a Change in Control as
defined in Article 11), or the achievement of performance objectives,
Restricted Stock Awards subject solely to the continued service with the
Company or a Subsidiary shall have a Vesting Period of not less than 

 8
 

 

 

three (3) years
from date of grant (but permitting pro rata vesting over such time); provided
that such minimum Vesting Period shall not be applicable to (i) grants to
new hires to replace forfeited awards from a prior employer, or (ii) grants
of Restricted Stock in payment of Performance Awards and other earned
cash-based incentive compensation. Restricted Stock Awards subject to the
achievement of performance objectives shall have a vesting period of not less
than one year. Subject to the foregoing minimum Vesting Period requirements,
the Committee may, in its sole discretion and subject to the limitations
imposed under Section 162(m) of the Code and the regulations
thereunder in the case of a Restricted Stock Award intended to comply with the
performance-based exception under Code Section 162(m), waive the
forfeiture period and any other conditions set forth in any Award Agreement
subject to such terms and conditions as the Committee shall deem appropriate.

8.             OTHER STOCK UNIT AWARDS

8.1.         Grants. Other Awards of units having a
value equal to an identical number of Shares (“Other Stock Unit Awards”) may be
granted hereunder to Participants, in addition to other Awards granted under
the Plan. Other Stock Unit Awards shall also be available as a form of payment
of other Awards granted under the Plan and other earned cash-based incentive
compensation.

8.2.         Award
Agreements. The terms of Other Stock Unit Award granted under the
Plan shall be set forth in a written Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with the Plan. The
terms of such Awards need not be the same with respect to each Participant.

8.3.         Vesting.
Except for certain limited situations (including the death, disability or
retirement of the Participant, or a Change in Control as defined in Article 11),
or the achievement of performance objectives, Other Stock Unit Awards subject
solely to the continued service with the Company or any Subsidiary shall be
subject to a vesting period determined by the Committee of not less than three (3) years
from date of grant (but permitting pro rata vesting over such time); provided,
that such minimum vesting period shall not be applicable to (i) grants to
new hires to replace forfeited awards from a prior employer, or (ii) grants
of Other Stock Unit Awards in payment of Performance Awards and other earned
cash-based incentive compensation. Other Stock Unit Awards subject to the
achievement of performance objectives shall have  a vesting period of not less than one year. Subject
to the foregoing minimum vesting period requirements, the Committee may, in its
sole discretion and subject to the limitations imposed under Section 162(m) of
the Code and the regulations thereunder in the case of a Other Stock Unit Award
intended to comply with the performance-based exception under Code Section 162(m),
waive the forfeiture period and any other conditions set forth in any Award
Agreement subject to such terms and conditions as the Committee shall deem
appropriate.

8.4.         Payment.
Except as provided in Article 10 or as maybe provided in an
Award Agreement, Other Stock Unit Awards may be paid in cash, Shares, other
property, or any combination thereof, in the sole discretion of the Committee
at the time of payment. Other Stock Unit Awards may be paid in a lump sum or in
installments or, in accordance with procedures established by the Committee, on
a deferred basis subject to the requirements of Section 409A of the Code.

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9.             PERFORMANCE AWARDS

9.1.         Grants.
Performance Awards in the form of Performance Shares or Performance Units, as
determined by the Committee in its sole discretion, may be granted hereunder to
Participants, for no consideration or for such minimum consideration as may be
required by applicable law, either alone or in addition to other Awards granted
under the Plan. The performance goals
to be achieved for each Performance Period shall be conclusively determined by
the Committee and may be based upon the criteria set forth in Section 10.2.

9.2.         Award Agreements. The terms of any Performance Award granted
under the Plan shall be set forth in a written Award Agreement which shall
contain provisions determined by the Committee and not inconsistent with the
Plan, including whether such Awards shall have Dividend Equivalents. The terms
of Performance Awards need not be the same with respect to each Participant.

9.3.         Terms and Conditions. The performance
criteria to be achieved during any Performance Period and the length of the
Performance Period shall be determined by the Committee upon the grant of each
Performance Award. The amount of the Award to be distributed shall be
conclusively determined by the Committee. The vesting period of any such Award
shall not be less than one year.

9.4.         Payment. Except as provided in Article 11
or as may be provided in an Award Agreement, Performance Awards will be
distributed only after the end of the relevant Performance Period. Performance
Awards may be paid in cash, Shares, other property, or any combination thereof,
in the sole discretion of the Committee at the time of payment. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the
Committee, on a deferred basis subject to the requirements of Section 409A
of the Code.

10.          CODE SECTION 162(m) PROVISIONS

10.1.       Covered Employees. Notwithstanding any
other provision of the Plan, if the Committee determines at the time a
Restricted Stock Award, a Performance Award or an Other Stock Unit Award is
granted to a Participant who is, or is likely to be, as of the end of the tax
year in which the Company would claim a tax deduction in connection with such
Award, a Covered Employee, then the Committee may provide that this Article 10
is applicable to such Award.

10.2.       Performance Criteria.  If the Committee determines that a Restricted
Stock Award, a Performance Award or an Other Stock Unit Award is subject to
this Article 10, the lapsing of restrictions thereon and the distribution
of cash, Shares or other property pursuant thereto, as applicable, shall be
subject to the achievement of one or more objective performance goals
established by the Committee, which shall be based on the attainment of
specified levels of one or any combination of the following: gross sales, net
sales; revenue; sales growth; revenue growth; operating income; pre- or
after-tax income (before or after allocation of corporate overhead and bonus);
net earnings; earnings per share; net income; division, group or corporate
financial goals; return on equity; total shareholder return; return on assets
or net assets; attainment of strategic and operational initiatives, including
product development and

 

 10

 

 

introduction,
facility expansion and business acquisitions; appreciation in and/or
maintenance of the price of the Shares or any other publicly-traded securities
of the Company; market share; gross profits; earnings (including earnings
before taxes, earnings before interest and taxes or earnings before interest,
taxes, depreciation and amortization); economic value-added models; comparisons
with various stock market indices; reductions in costs; cash flow (before or
after dividends) cash flow per share (before or after dividends); return on
capital (including return on total capital or return on invested capital; cash
flow return on investment; improvement in or attainment of expense levels or
working capital levels; cash margins; returns on inventory; inventory turnover;
inventory management; other inventory measures; and revenue per employee. Such
performance goals also may be based solely by reference to the Company’s
performance or the performance of a Subsidiary, division, business segment or
business unit of the Company, or based upon the relative performance of other
companies or upon comparisons of any of the indicators of performance relative
to other companies. The Committee may also exclude charges related to an event
or occurrence which the Committee determines should appropriately be excluded,
including (a) reorganizations, restructurings and discontinued operations,
(b) other extraordinary non-recurring items, (c) an event either not
directly related to the operations of the Company or not within the reasonable
control of the Company’s management, or (d) the cumulative effects of tax
or accounting changes in accordance with generally accepted accounting
principles. Such performance goals shall be set by the Committee within the
time period prescribed by, and shall otherwise comply with the requirements of,
Section 162(m) of the Code, and the regulations thereunder.

10.3.       Adjustments.
Notwithstanding any provision of the Plan (other than Article 11), with
respect to any Restricted Stock, Performance Award or Other Stock Unit Award
that is subject to this Section 10, the Committee may adjust downwards,
but not upwards, the amount payable pursuant to such Award, and the Committee
may not waive the achievement of the applicable performance goals, except in
the case of the death or disability of the Participant or as otherwise
determined by the Committee in special circumstances.

10.4.       Restrictions.
The Committee shall have the power to impose such other restrictions on Awards
subject to this Article as it may deem necessary or appropriate to ensure
that such Awards satisfy all requirements for “performance-based compensation”
within the meaning of Section 162(m) of the Code.

10.5.       Limitations on Grants to Individual Participants.
Subject to adjustment as provided in Section 12.2, no Participant may be
granted (i) Options or Stock Appreciation Rights during any rolling 36-month
period with respect to more than 600,000 Shares or (ii) Restricted Stock,
Performance Awards and/or Other Stock Unit Awards that are denominated in
Shares in any rolling 36-month period with respect to more than 300,000
Shares (the “Limitations”). In addition to the foregoing, the maximum dollar
value payable to any Participant in any rolling 12-month period with
respect to Performance Awards is $10,000,000. If an Award is cancelled, the
cancelled Award shall continue to be counted toward the applicable Limitations.

11.          CHANGE IN CONTROL PROVISIONS

11.1.       Impact on
Certain Awards. Award Agreements may provide that in the event of a
Change in Control of the Company (as defined in Section 11.3): (i) Options
and Stock Appreciation Rights outstanding as of the date of the Change in
Control shall be cancelled and 

 11
 

 

 

terminated without payment therefore if the Fair Market Value of one
Share as of the date of the Change in Control is less than the per Share Option
exercise price or the Base Amount per Share of the Stock Appreciation Right,
and (ii) all Performance Awards shall be considered to be earned and
payable (either in full or pro rata based on the portion of Performance Period
completed as of the date of the Change in Control), and any deferral or other
restriction shall lapse and such Performance Awards shall be immediately
settled or distributed.

11.2.       Assumption
or Substitution of Certain Awards. (a)  Unless otherwise
provided in an Award Agreement, in the event of a Change in Control of the
Company  in which the successor company
assumes or substitutes for an Option, Stock Appreciation Right, Restricted
Stock Award or Other Stock Unit Award, if a Participant’s employment with such
successor company (or a subsidiary thereof) terminates within the time period
following such Change in Control set forth in the Award Agreement and under the
circumstances specified in the Award Agreement: (i) Options and Stock
Appreciation Rights outstanding as of the date of such termination of
employment will immediately vest, become fully exercisable, and may thereafter
be exercised for a period of time set forth in the Award Agreement, (ii) restrictions
and deferral limitations on Restricted Stock shall lapse and the Restricted
Stock shall become free of all restrictions and limitations and become fully
vested, and (iii) the restrictions and deferral limitations and other
conditions applicable to any Other Stock Unit Awards or any other Awards shall
lapse, and such Other Stock Unit Awards or such other Awards shall become free
of all restrictions, limitations or conditions and become fully vested and
transferable to the full extent of the original grant. For the purposes of this
Section 11.2, an Option, Stock Appreciation Right, Restricted Stock Award
or Other Stock Unit Award shall be considered assumed or substituted for if
following the Change in Control the Award confers the right to purchase or
receive, for each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award or Other Stock Unit Award immediately prior to the
Change in Control, the consideration (whether stock, cash or other securities
or property) received in the transaction constituting a Change in Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor
company, the Committee may, with the consent of the successor company, provide
that the consideration to be received upon the exercise or vesting of an
Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit
Award, for each Share subject thereto, will be solely common stock of the
successor company substantially equal in fair market value to the per share
consideration received by holders of Shares in the transaction constituting a
Change in Control. The determination of such substantial equality of value of
consideration shall be made by the Committee in its sole discretion and its
determination shall be conclusive and binding.

(b)           Unless otherwise
provided in an Award Agreement, in the event of a Change in Control of the
Company in which the successor company does not assume or substitute for an
Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit
Award: (i) Options and Stock Appreciation Rights outstanding as of the
date of the Change in Control shall immediately vest and become fully
exercisable, (ii) restrictions and deferral limitations on Restricted Stock
shall lapse and the Restricted Stock shall become free of all restrictions and
limitations and become fully vested, and (iii) the restrictions and
deferral limitations and other conditions applicable to any Other Stock Unit
Awards or any other Awards shall lapse, and such Other Stock Unit Awards or
such other Awards shall become free of all 

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restrictions,
limitations or conditions and become fully vested and transferable to the full
extent of the original grant.

(c)           Notwithstanding any
other provision of the Plan, the Committee, in its discretion, may determine
that, upon the occurrence of a Change in Control of the Company, each Option
and Stock Appreciation Right outstanding shall terminate within a specified
number of days after notice to the Participant, and/or that each Participant
shall receive, with respect to each Share subject to such Option or Stock
Appreciation Right, an amount equal to the excess of the Fair Market Value of
such Share immediately prior to the occurrence of such Change in Control over
the exercise price per share of such Option and/or Stock Appreciation Right;
such amount to be payable in cash, in one or more kinds of stock or property
(including the stock or property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its discretion, shall determine.

11.3.       Change in
Control. For purposes of the Plan, unless otherwise provided in an
Award Agreement, Change in Control means the occurrence of any one of the
following events:

(a)           During any twenty-four
(24) month period, individuals who, as of the beginning of such period,
constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the beginning of such period whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

(b)           any “person” (as
such term is defined in the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding securities eligible to vote for
the election of the Board (the “Company Voting Securities”); provided, however,
that the event described in this paragraph (b) shall not be deemed to
be a Change in Control by virtue of any of the following
acquisitions:  (i) by the Company or any subsidiary, (ii) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any subsidiary, (iii) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) pursuant to a
Non-Qualifying Transaction, as defined in paragraph (c) below, or (v) by
any person of Voting Securities from the Company, if a majority of the
Incumbent Board approves in advance the acquisition of beneficial ownership of
50% or more of Company Voting Securities by such person;

(c)           the consummation of
a merger, consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or any of its subsidiaries that requires the
approval of the Company’s stockholders, whether for such transaction or the
issuance of securities in the transaction (a “Business Combination”),
unless immediately 

 13
 

 

 

following such
Business Combination:  (i) more than
60% of the total voting power of (A) the corporation resulting from such
Business Combination (the “Surviving Corporation”), or (B) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by shares
into which such Company Voting Securities were converted pursuant to such
Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination; (ii) no person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation), is or becomes the beneficial owner, directly or
indirectly, of 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation); and (iii) at least a
majority of the members of the board of directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving Corporation) following
the consummation of the Business Combination were Incumbent Directors at the
time of the Board’s approval of the execution of the initial agreement providing
for such Business Combination (any Business Combination which satisfies all of
the criteria specified in (i), (ii) and (iii) above shall be deemed
to be a “Non-Qualifying Transaction”);

(d)           the stockholders of
the Company approve a plan of complete liquidation or dissolution of the
Company or the consummation of a sale of all or substantially all of the
Company’s assets; or

(e)           the occurrence of
any other event that the Board determines by a duly approved resolution
constitutes a Change in Control.

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 50% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, that
if after such acquisition by the Company such person becomes the beneficial
owner of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.

 14
 

 

 

12.          GENERALLY APPLICABLE PROVISIONS

12.1.       Amendment
and Termination of the Plan. The Board may, from time to time,
alter, amend, suspend or terminate the Plan as it shall deem advisable, subject
to any requirement for stockholder approval imposed by applicable law,
including the rules and regulations of the NASDAQ Stock Market (or such
other principal securities market on which the Shares are traded) provided that
the Board may not amend the Plan in any manner that would result in
noncompliance with Rule 16b-3 of the Exchange Act; and further
provided that the Board may not, without the approval of the Company’s
stockholders, amend the Plan to (a) increase the number of Shares that may
be the subject of Awards under the Plan (except for adjustments pursuant to Section 12.2),
(b) expand the types of awards available under the Plan, (c) materially
expand the class of persons eligible to participate in the Plan, (d) amend
any provision of Section 5.3, (e) increase the maximum permissible
term of any Option specified by Section 5.4 or the maximum permissible
term of a Freestanding Stock Appreciation Right specified by Section 5.5(g),
(f) amend any provision of Section 10.5, or (g) take any action
with respect to an Option or Stock Appreciation Right that may be treated as a
repricing under the rules and regulations of the NASDAQ Stock Market (or
such other principal securities market on which the Shares are traded),
including reducing the exercise price or Base Amount (as applicable) or
exchanging an Option or Stock Appreciation Right for cash or another Award. In
addition, no amendments to, or termination of, the Plan shall in any way impair
the rights of a Participant under any Award previously granted without such
Participant’s consent.

12.2.       Adjustments. In the event of any merger,
reorganization, consolidation, recapitalization, dividend or distribution
(whether in cash, shares or other property, other than a regular cash
dividend), stock split, reverse stock split, spin-off or similar transaction or
other change in corporate structure affecting the Shares or the value thereof,
such adjustments and other substitutions shall be made to the Plan and to
Awards as the Committee, in its sole discretion, deems equitable or appropriate
taking into consideration the accounting and tax consequences, including such
adjustments in the aggregate number, class and kind of securities that may be
delivered under the Plan, the Limitations, the maximum number of Shares that
may be issued under “incentive stock options” and, in the aggregate or to any
one Participant, in the number, class, kind and option or exercise price of
securities subject to outstanding Awards granted under the Plan (including, if
the Committee deems appropriate, the substitution of similar options to
purchase the shares of, or other awards denominated in the shares of, another
company) as the Committee may determine to be appropriate in its sole discretion;
provided, however, that the number of Shares subject to any Award shall always
be a whole number.

12.3.       Transferability of Awards. Except as
provided below, and except as otherwise authorized by the Committee in an Award
Agreement, no Award and no Shares subject to Awards described in Article 8
that have not been issued or as to which any applicable restriction,
performance or deferral period has not lapsed, may be sold, assigned,
transferred, pledged or otherwise encumbered, other than by will or the laws of
descent and distribution, and such Award may be exercised during the life of
the Participant only by the Participant or the Participant’s guardian or legal
representative. Notwithstanding the foregoing if provided for in an Award
Agreement, a Participant may assign or transfer an Award with the consent of
the Committee (each transferee thereof, a “Permitted Assignee”) (a) to the
Participant’s spouse, children, or grandchildren (including any adopted step
children and grandchildren); (b) to a trust or partnership for the benefit
of one or more person referred to in clause (a); or (c) for charitable 

 15
 

 

 

donations;  provided that such
Permitted Assignee shall be bound by and subject to all of the terms and
conditions of the Plan and the Award Agreement relating to the transferred
Award and shall execute an agreement satisfactory to the Company evidencing
such obligations; and provided further that such Participant shall remain bound
by the terms and conditions of the Plan. The Company shall cooperate with any
Permitted Assignee and the Company’s transfer agent in effectuating any
transfer permitted under this Section. Any transfer of an Award or Shares in
violation of this Section 12.3 shall be null and void.

12.4.       Termination of Employment. The Committee
shall determine and set forth in each Award Agreement whether any Awards
granted in such Award Agreement will continue to be exercisable, and the terms
of such exercise, on and after the date that a Participant ceases to be
employed by or to provide services to the Company or any Subsidiary (including
as a Director), whether by reason of death, disability, voluntary or
involuntary termination of employment or services. The date of termination of a
Participant’s employment or services will be determined by the Committee, which
determination will be final.

12.5.       Deferral;
Dividend Equivalents. The
Committee shall be authorized to establish procedures pursuant to which the
payment of any Award may be deferred. Subject to the provisions of the Plan and
any Award Agreement, the recipient of an Award (including any deferred Award)
other than an Option or Stock Appreciation Right may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash,
stock or other property dividends, or cash payments in amounts equivalent to
cash, stock or other property dividends on Shares (“Dividend Equivalents”) with
respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion. The Committee may provide that such amounts
and Dividend Equivalents (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested and may provide that such amounts and
Dividend Equivalents are subject to the same vesting or performance conditions
as the underlying Award.

13.          MISCELLANEOUS

13.1.       Tax
Withholding. The Company shall have the right to make all payments
or distributions pursuant to the Plan to a Participant (or a Permitted Assignee
thereof) (any such person, a “Payee”) net of any applicable federal, state and
local taxes required to be paid or withheld as a result of (a) the grant
of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the
delivery of Shares or cash, (d) the lapse of any restrictions in connection
with any Award or (e) any other event occurring pursuant to the Plan. The
Company or any Subsidiary shall have the right to withhold from wages or other
amounts otherwise payable to such Payee such withholding taxes as may be
required by law, or to otherwise require the Payee to pay such withholding
taxes. If the Payee shall fail to make such tax payments as are required, the
Company or its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
such Payee or to take such other action as may be necessary to satisfy such
withholding obligations. The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation for the
payment of such taxes by tendering previously acquired Shares (either actually
or by attestation, valued at their then Fair Market Value) that have been owned
for a period of at least six months (or such other period to avoid accounting
charges against the Company’s earnings), or by directing the Company to retain
Shares (up to the Participant’s minimum required tax 

 16
 

 

 

withholding rate or such other rate that will not trigger a negative
accounting impact) otherwise deliverable in connection with the Award.

13.2.       Right of
Discharge Reserved; Claims to Awards. Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any Employee or Director the
right to continue in the employment or service of the Company or any Subsidiary
or affect any right that the Company or any Subsidiary may have to terminate
the employment or service of (or to demote or to exclude from future Awards
under the Plan) any such Employee or Director at any time for any reason “at
will.”  Except as specifically provided
by the Committee, the Company shall not be liable for the loss of existing or
potential profit from an Award granted in the event of termination of an
employment or other relationship. No Employee or Participant shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Employees or Participants under the Plan.

13.3.       Prospective
Recipient. The prospective recipient of any Award under the Plan
shall not, with respect to such Award, be deemed to have become a Participant,
or to have any rights with respect to such Award, until and unless such
recipient shall have executed an agreement or other instrument evidencing the
Award and delivered a copy thereof to the Company, and otherwise complied with
the then applicable terms and conditions of the Plan and Award Agreement.

13.4.       Substitute Awards. Notwithstanding any
other provision of the Plan, the terms of Substitute Awards may vary from the
terms set forth in the Plan to the extent the Committee deems appropriate to conform,
in whole or in part, to the provisions of the awards in substitution for which
they are granted.

13.5.       Cancellation
of Award. Notwithstanding anything to the contrary contained herein,
all outstanding Awards granted to any Participant shall be canceled if the
Participant, without the consent of the Company, while employed by the Company
or any Subsidiary or after termination of such employment or service,
establishes a relationship with a competitor of the Company or any Subsidiary
or engages in activity that is in conflict with or adverse to the interest of
the Company or any Subsidiary, as determined by the Committee in its sole
discretion. The Committee may provide in an Award Agreement that if within the
time period specified in the Agreement the Participant establishes a
relationship with a competitor or engages in an activity referred to in the
preceding sentence, the Participant will forfeit any gain realized on the
vesting or exercise of the Award and must repay such gain to the Company.

13.6.       Stop
Transfer Orders. All certificates for Shares delivered under the
Plan pursuant to any Award shall be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Shares are then listed, and any applicable
federal or state securities law, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions. Any provision herein to the contrary notwithstanding, the
Company shall have no obligation to issue any Shares pursuant to an Award if
the Committee determines in good faith that such issuance would violate
applicable federal, state or foreign securities laws.

 17
 

 

 

13.7.       Nature of
Payments. All Awards made pursuant to the Plan are in consideration
of services performed or to be performed for the Company or any Subsidiary,
division or business unit of the Company. Any income or gain realized pursuant
to Awards under the Plan and any Stock Appreciation Rights constitute a special
incentive payment to the Participant and shall not be taken into account, to
the extent permissible under applicable law, as compensation for purposes of any
of the employee benefit plans of the Company or any Subsidiary except as may be
determined by the Committee or by the Board or board of directors of the
applicable Subsidiary.

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

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

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

13.11.     Unfunded
Status of the Plan. The Plan is intended to constitute an “unfunded”
plan for incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver the Shares or payments in lieu of or with respect to Awards hereunder;
provided, however, that the existence of such trusts or other arrangements is
consistent with the unfunded status of the Plan.

13.12.     Governing
Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Utah, without
reference to principles of conflict of laws, and construed accordingly.

 18
 

 

 

13.13.     Effective
Date of Plan; Termination of Plan. The Plan shall be effective on
the date of the approval of the Plan by the holders of a majority the shares
voted at a duly constituted meeting of the stockholders of the Company. The
Plan shall be null and void and of no effect if the foregoing condition is not
fulfilled and no Award shall be granted until the stockholders of the Company
approve the Plan. Awards may be granted under the Plan at any time and from
time to time following stockholder approval of the Plan until the tenth
anniversary of the effective date of the Plan, on which date the Plan will
expire except as to Awards then outstanding under the Plan. Such outstanding
Awards shall remain in effect until they have been exercised or terminated, or
have expired.

13.14.     Foreign
Employees. Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those applicable to Awards to Employees employed in
the United States as may, in the judgment of the Committee, be necessary or
desirable in order to recognize differences in local law or tax policy. The
Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for
Employees on assignments outside their home country.

13.15.     Compliance
with Section 409A of the Code. This Plan is intended to comply
and shall be administered in a manner that is intended to comply with Section 409A
of the Code and shall be construed and interpreted in accordance with such
intent. To the extent that an Award or the payment, settlement or deferral
thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with Section 409A
of the Code, including regulations or other guidance issued with respect
thereto, except as otherwise determined by the Committee. Any provision of this
Plan that would cause the grant of an Award or the payment, settlement or
deferral thereof to fail to satisfy Section 409A of the Code shall be
amended to comply with Section 409A of the Code on a timely basis, which
may be made on a retroactive basis, in accordance with regulations and other
guidance issued under Section 409A of the Code.

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

 

 19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]