Document:

Exhibit
10.25

 

ORIGINAL
FOR EXECUTION

APPROVED VICE
PRESIDENT HUMAN RESOURCES

EFFECTIVE JANUARY
1, 2005

 

CONOCOPHILLIPS

EXECUTIVE SEVERANCE PLAN

 

(Amended and Restated Effective
as of January 1, 2005)

 

Effective October 1, 2004, the Company adopted this the
ConocoPhillips Executive Severance Plan (the “Plan”) for the benefit of certain
employees of the Company and its subsidiaries. This amendment and restatement
of the Plan shall be effective January 1, 2005. Any Eligible Employee (as
defined below) having a Severance Date (as defined below) prior to January 1,
2005, shall have benefits under this Plan determined in accordance with the
provisions of this Plan as they existed prior to this amendment and restatement.
Any Eligible Employee (as defined below) having a Severance Date (as defined
below) on or after January 1, 2005, shall have benefits under this Plan
determined in accordance with the provisions of this Plan pursuant to this
amendment and restatement. All capitalized terms used herein are defined in
Section 1 hereof. This Plan is intended to be a plan maintained primarily
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees, within the meaning of Title I
of the Employee Retirement Income Security Act of 1974, as amended and shall be
interpreted in a manner consistent with such intention.

 

SECTION 1.                                DEFINITIONS. As
hereinafter used:

 

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

 

1.2                                 “Cause”
means (i) the willful and continued failure by the Eligible Employee to
substantially perform the Eligible Employee’s duties with the Employer (other
than any such failure resulting from the Eligible Employee’s incapacity due to
physical or mental illness), or (ii) the willful engaging, not in good
faith, by the Eligible Employee in conduct which is demonstrably injurious to
the Company or any of its subsidiaries, monetarily or otherwise.

 

1.3                                 “Code”
means the Internal Revenue Code of 1986, as it may be amended from time to
time.

 

1.4                                 “Company”
means ConocoPhillips or any successors thereto.

 

1.5                                 “Credited
Compensation” of a Severed Employee means the aggregate of the Severed Employee’s
annual base salary plus his or her annual incentive compensation, each as
further described below. For purposes of this definition, (a) annual base
salary shall be determined immediately prior to the Severance Date and
(b) annual incentive compensation shall be deemed to equal the Severed
Employee’s most recently established target (determined at one hundred percent
of target) for annual incentive compensation for such employee prior to such
employee’s Severance Date 

 

1

 

pursuant to the Variable Cash Incentive Program or its successor
program maintained by the Employer.

 

1.6                                 “Effective
Date” means, as applicable, the date first stated above as the original
effective date of this Plan or the effective date of this Plan as amended and
restated.

 

1.7                                 “Eligible
Employee” means any employee that is a Tier 1 Employee or a Tier 2
Employee, other than those employees who are listed on Exhibit B.

 

1.8                                 “Employer”
means the Company or any of its subsidiaries.

 

1.9                                 “Person”
means any individual, firm, corporation, partnership, association, trust,
unincorporated organization, or other entity.

 

1.10                           “Plan”
means the ConocoPhillips Executive Severance Plan, as set forth herein, as it
may be amended from time to time.

 

1.11                           “Plan
Administrator” means the person or persons appointed from time to time by the
Board, which appointment may be revoked at any time by the Board.

 

1.12                           “Retirement
Plans” means the ConocoPhillips Retirement Plan and the ConocoPhillips Key
Employee Supplemental Retirement Plan.

 

1.13                           “Severance”
means the termination of an Eligible Employee’s employment with the
Employer by the Employer other than for Cause. An Eligible Employee will
not be considered to have incurred a Severance if his employment is
discontinued by reason of the Eligible Employee’s death or a physical or mental
condition causing such Eligible Employee’s inability to substantially perform
his duties with the Employer and entitling him or her to benefits under any
long-term sick pay or disability income policy
or program of the Employer. Furthermore, an Eligible Employee will not be
considered to have incurred a Severance if employment with the Employer is
discontinued after the Eligible Employee has been offered employment with
another employer that has purchased a subsidiary or division of the Company or
all or substantially all of the assets of an a subsidiary or division of the
Company and the offer of employment from the other employer is at the same or
greater salary and the same or greater target bonus as the Eligible Employee
has at that time from the Employer. Still further, an Eligible Employee will
not be considered to have incurred a Severance if employment with the Employer
is discontinued and the Eligible Employee is also eligible for payments under
the ConocoPhillips Key Employee Change in Control Severance Plan, effective
October 1, 2004, or as subsequently amended, or under the Conoco Inc. Key
Employee Severance Plan, as amended and restated effective October 1, 2001, and
as subsequently amended.

 

1.14                           “Severance
Date” means the date on which an Eligible Employee incurs a Severance.

 

1.15                           “Severance
Pay” means the payment determined pursuant to Section 2.1 hereof.

 

1.16                           “Severed
Employee” means an Eligible Employee who has incurred a Severance.

 

2

 

1.17                           “Tier
1 Employee” means any employee of the Employer who is in salary grade 26 or
above (under the salary grade schedule of the Company on the Effective Date,
with appropriate adjustment for any subsequent change in such salary grade
schedule) on the Severance Date.

 

1.18                           “Tier
2 Employee” means any employee of the Employer, other than a Tier 1 Employee,
who is in salary grade 23 or above (under the salary grade schedule of the
Company on the Effective Date, with appropriate adjustment for any subsequent
change in such salary grade schedule) on the Severance Date.

 

SECTION 2.                                BENEFITS.

 

2.1                                 Subject
to Section 2.7, each Severed Employee shall be entitled to receive
Severance Pay equal to the sum of the amounts determined under Sections 2.1(a),
(b), and (c). Furthermore, for purposes of Employer compensation plans,
programs, and arrangements, each Severed Employee shall be considered to have
been laid off by the Employer.

 

(a)                                  The
amount that is the Severed Employee’s Credited Compensation, multiplied by
(i) 2, in the case of a Tier 1 Employee or (ii) 1.5 in the case
of a Tier 2 Employee.

 

(b)                                 The
amount that is the present value, determined as of the Severed Employee’s
Severance Date, of the increase in benefits under the Retirement Plans that
would result if the Severed Employee was credited with the following number of
additional years of age and service under the Retirement Plans:  (i) 2, in the case of a Tier 1
Employee or (ii) 1.5, in the case of a Tier 2 Employee. Present value
shall be determined based on the assumptions utilized under the ConocoPhillips
Retirement Plan for purposes of determining contributions under Code Section
412 for the most recently completed plan year.

 

(c)                                  The
amount that is equal to either (i) or (ii), as applicable, plus either (iii) or
(iv), as applicable, plus (v), if applicable, plus (vi), if applicable:

 

(i)                                     If the Severed Employee was enrolled in
company-sponsored medical coverage on the Severance Date, an amount equal to 6
times the difference between the COBRA participant contribution rate and the
active employee contribution rate, each as of the Severance Date, for the type
of coverage in which the Tier 2 Employee was enrolled.

 

(ii)                                  If
the Severed Employee was not enrolled in company-sponsored medical coverage on
the Severance Date, an amount equal to 18 times the difference between the
COBRA participant contribution rate and the active employee contribution rate,
each as of the Severance Date, for PPO medical coverage.

 

(iii)                               If the Severed Employee was enrolled in company-sponsored dental
coverage on the Severance Date, an amount equal to 6 times the difference
between the COBRA participant contribution rate and the active employee
contribution rate, each as of the Severance Date, for the type of coverage in
which the Tier 2 Employee was enrolled.

 

(iv)                              If
the Severed Employee was not enrolled in company-sponsored dental coverage on
the Severance Date, an amount equal to 18 times the difference 

 

3

 

between the COBRA participant contribution rate and
the active employee contribution rate, each as of the Severance Date, for
dental coverage (using the CP dental option coverage).

 

(v)                                 In
the case of a Tier 1 Employee, an amount equal to the sum of 6 times the COBRA
participant contribution rate, as of the Severance Date, for PPO medical
coverage plus 6 times the COBRA participant contribution rate, as of the
Severance Date, for dental coverage (using the CP dental option coverage).

 

(vi)                              If
any persons qualified as eligible dependents of the Severed Employee under the
applicable company-sponsored medical or dental coverage in which the Severed
Employee was enrolled on the Severance Date, an amount equal to the sum of the
differences, for each such eligible dependent, between the COBRA eligible
dependent contribution rate and the eligible dependent contribution rate for
eligible dependents of active employees, each as of the Severance Date, for the
medical and/or dental coverage in which the Severed Employee was enrolled on
the Severance Date, as applicable, times the factor set forth in the applicable
Section 2.1(c)(i) or (ii), (c)(iii) or (iv), and (c)(v); provided, that if the
Severed Employee was not enrolled for medical or dental coverage, then the
eligibility and amount for each dependent shall be determined as if the Severed
Employee had been enrolled in the PPO medical coverage or dental coverage
(using the CP dental option coverage), as applicable, on the Severance Date.

 

2.2                                 Subject
to Section 2.7, Severance Pay (as well as any amount payable pursuant to Section
2.4 hereof) shall be paid to an eligible Severed Employee in a lump sum as soon
a practicable after the Severance Date.

 

2.3                                 Subject to Section 2.7, for a period of (a) 24
months, in the case of a Tier 1 Employee or (b) 18 months, in the case of a
Tier 2 Employee, beginning the first of the month following the termination of
active employee benefits, the Company shall arrange to provide the Severed
Employee and his eligible dependents certain benefits, as enumerated below,
similar to those the Severed Employee and his eligible dependents had
immediately prior to the Severed Employee’s Severance Date. These benefits will
be provided at no greater cost to the Severed Employee than active employee
rates for the plan year of coverage provided the benefits continue to be
offered by the Company to active employees and the Severed Employee and his
eligible dependents meet the same eligibility criteria for the benefits as an
active employee and dependents of an active employee. Depending on coverages
prior to the Severed Employee’s Severance Date, these benefits could include
the following, but do not include any other benefits offered by the Company:
Life Insurance, which includes Basic, Executive Basic, Supplemental, and
Dependent Life; and Personal Accident Insurance. Severed employees may also
continue Long Term Care and Executive Life directly through the vendor to be
paid for by the Severed Employee. Nothing herein shall prevent a Severed
Employee or eligible dependents of a Severed Employee from electing to receive
COBRA continuation coverage of health benefits subject to COBRA, in accordance
with the applicable provisions of the law and the applicable plans. While as an
active 

 

4

 

employee the Severed Employee may have been able to make employee
contributions or pay premiums for certain coverage through a pre-tax salary
reduction arrangement, that will not continue after the Severed Employee’s
Severance Date. The cost of these benefits will not be adjusted to reflect that
the Severed Employee’s cost will no longer be pre-tax. All other active
employee benefits, not specifically mentioned above, are excluded, although if
any of the benefits specifically mentioned above are replaced with a similar
benefit after the Severed Employee’s Severance Date, such replacement benefits
are to be considered as mentioned specifically above even though their names,
terms, and conditions may have been changed. Such benefits shall not be
provided (except to the extent as may be required by law) during any period
when the Severed Employee is eligible to receive such benefits from another
employer or from an Employer or if the Severed Employee has resumed working for
an Employer. The Severed Employee is obligated to inform the Company when or if
they become eligible to receive such benefits from another employer.

 

2.4                                 Each
Severed Employee shall be entitled to receive the employee’s full salary
through the Severance Date and, subject to Section 2.7 but notwithstanding
any provision of the Company’s Variable Cash Incentive Program or similar
annual bonus incentive plan to the contrary, a cash lump sum amount equal to a
pro rata portion to the Severance Date of the aggregate value of the annual
incentive compensation award to such Severed Employee for the then uncompleted
fiscal year under such plan, such aggregate value being deemed to equal the
Severed Employee’s most recently established target (determined at one hundred
percent of target) for annual incentive compensation for such employee prior to
such employee’s Severance Date pursuant to the Variable Cash Incentive Program
(or similar annual bonus incentive plan) or its successor program maintained by
the Employer.

 

2.5                                 Each
party to any dispute concerning this Plan shall be responsible for that party’s
own legal fees and expenses; provided, however, that the arbitrator appointed
pursuant to Section 3.2 of this Plan may award reasonable legal fees and
expenses to an Eligible Employee if the arbitrator determines that the Company’s
denial of the claim of the Eligible Employee was not reasonable.

 

2.6                                 The
Company shall be entitled to withhold and/or to cause to be withheld from
amounts to be paid to the Severed Employee hereunder any federal, state, or
local withholding or other taxes or charges which it is from time to time
required to withhold.

 

2.7                                 No
Severed Employee shall be eligible to receive Severance Pay or other benefits
under the Plan unless he or she first executes a written release substantially
in the form attached as Exhibit A hereto (or, if the Severed Employee was
not a United States employee, a similar release which is in accordance with the
applicable laws in the relevant jurisdiction) and, to the extent such release is revocable by its terms, only if the
Severed Employee does not revoke it, and unless he or she also, at the request
of the Company, executes a written agreement not to compete with the Company,
with such terms and conditions as may be proposed by the Company at the time.

 

5

 

SECTION 3.                                PLAN ADMINISTRATION.

 

3.1                                 The
Plan Administrator shall administer the Plan and may interpret the Plan,
prescribe, amend, and rescind rules and regulations under the Plan and make all
other determinations necessary or advisable for the administration of the Plan,
subject to the provisions of the Plan. The Plan Administrator shall have
absolute discretion and authority in carrying out its responsibilities, and all
interpretations of the Plan, determinations of eligibility under the Plan,
determinations to grant or deny benefits under the Plan, or findings of fact or
resolutions related to the Plan and its administration that are made by the
Plan Administrator shall be binding, final, and conclusive on all parties.

 

3.2                                 In
the event of a claim by an Eligible Employee as to the amount or timing of any
payment or benefit, such Eligible Employee shall present the reason for his or
her claim in writing to the Plan Administrator. The Plan Administrator shall,
within 14 days after receipt of such written claim, send a written notification
to the Eligible Employee as to its disposition. Except as provided in the
preceding portion of this Section 3.2, all disputes under this Plan shall
be settled exclusively by binding arbitration in Houston, Texas, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator’s award in any court having jurisdiction.

 

3.3                                 The
Plan Administrator may delegate any of its duties hereunder to such person or
persons from time to time as it may designate.

 

3.4                                 The
Plan Administrator is empowered, on behalf of the Plan, to engage accountants,
legal counsel, and such other personnel as it deems necessary or advisable to
assist it in the performance of its duties under the Plan. The functions of any
such persons engaged by the Plan Administrator shall be limited to the
specified services and duties for which they are engaged, and such persons
shall have no other duties, obligations or responsibilities under the Plan. Such
persons shall exercise no discretionary authority or discretionary control
respecting the management of the Plan. All reasonable expenses thereof shall be
borne by the Employer.

 

SECTION 4.                                DURATION; AMENDMENT;
AND TERMINATION.

 

4.1                                 This
Plan shall be effective on the Effective Date. This Plan shall continue in
effect unless and until it is terminated as provided in Section 4.2.

 

4.2                                 This
Plan may be amended from time to time during its term by the Company acting
through its Board of Directors or, to the extent authorized by the Board of
Directors, its officers. The Company may, by action of its Board of Directors,
terminate this Plan at any time.

 

6

 

SECTION 5.                                GENERAL PROVISIONS.

 

5.1                                 Except
as otherwise provided herein or by law, no right or interest of any Eligible
Employee under the Plan shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including without
limitation by execution, levy, garnishment, attachment, pledge, or in any
manner; no attempted assignment or transfer thereof shall be effective; and no
right or interest of any Eligible Employee under the Plan shall be liable for,
or subject to, any obligation or liability of such Eligible Employee. When a
payment is due under this Plan to a Severed Employee who is unable to care for
his or her affairs, payment may be made directly to his or her legal guardian
or personal representative.

 

5.2                                 If
any Employer is obligated by law or by contract to pay severance pay, a
termination indemnity, notice pay, or the like, to a Severed Employee, or if
any Employer is obligated by law to provide advance notice of separation (“Notice
Period”) to a Severed Employee, then any Severance Pay hereunder to such
Severed Employee shall be reduced by the amount of any such severance pay,
termination indemnity, notice pay, or the like, as applicable, and by the
amount of any compensation received during any Notice Period. This provision
specifically includes any payments or obligations under the ConocoPhillips
Severance Pay Plan, as effective March 13, 2004, and as subsequently amended. Furthermore,
if an Eligible Employee has willful and bad faith conduct demonstrably
injurious to Company or its subsidiaries, monetarily or otherwise, after
receiving Severance Pay, the Company may offset an amount equal to such
Severance Pay against any other amounts due from other plans or programs,
unless otherwise required by law.

 

5.3                                 Neither
the establishment of the Plan, nor any modification thereof, nor the creation
of any fund, trust, or account, nor the payment of any benefits shall be
construed as giving any Eligible Employee, or any person whomsoever, the right
to be retained in the service of the Employer, and all Eligible Employees shall
remain subject to discharge to the same extent as if the Plan had never been
adopted.

 

5.4                                 If
any provision of this Plan shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof,
and this Plan shall be construed and enforced as if such provisions had not
been included.

 

5.5                                 This
Plan shall be binding upon the heirs, executors, administrators, successors,
and assigns of the parties, including each Eligible Employee, present and
future, and any successor to the Employer.

 

5.6                                 The
headings and captions herein are provided for reference and convenience only,
shall not be considered part of the Plan, and shall not be employed in the
construction of the Plan.

 

5.7                                 The
Plan shall not be funded. No Eligible Employee shall have any right to, or
interest in, any assets of any Employer that may be applied by the Employer to
the payment of benefits or other rights under this Plan.

 

7

 

5.8                                 Any
notice or other communication required or permitted pursuant to the terms
hereof shall have been duly given when delivered or mailed by United States
Mail, first-class, postage prepaid, addressed to the intended recipient at his,
her or its last known address.

 

5.9                                 This
Plan shall be construed and enforced according to the laws of the State of
Delaware.

 

 

	
  CONOCOPHILLIPS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Carin S. Knickel

  	
   

  	
   

  	
  Dated:

  	
  December 20, 2005

  	
   

  
	
  Carin S. Knickel

  	
   

  	
   

  	
   

  
	
  Vice President,
  Human Resources

  	
   

  	
   

  	
   

  
							

 

8

 

Exhibit A

 

WAIVER AND RELEASE OF
CLAIMS

 

In consideration of, and subject to, the payments to
be made to me by ConocoPhillips, a Delaware corporation (the “Company”) or any
of its subsidiaries, pursuant to the ConocoPhillips Executive Severance Plan
(the “Plan”), which I acknowledge that I would not otherwise be entitled to
receive, I hereby waive any claims I may have for employment or re-employment
by the Company or any subsidiary or parent of the Company after the date
hereof, and I further agree to and do release and forever discharge the Company
or any subsidiary or parent of the Company, and their respective past and
present officers, directors, shareholders, employees, and agents from any and
all claims and causes of action, known or unknown, arising out of or relating
to my employment with the Company or any subsidiary or parent of the Company,
or the termination thereof, including, but not limited to, wrongful discharge,
breach of contract, tort, fraud, the Civil Rights Acts, Age Discrimination in
Employment Act, Employee Retirement Income Security Act, Americans with
Disabilities Act, or any other federal, state, or local legislation or common
law relating to employment or discrimination in employment or otherwise.

 

Notwithstanding the foregoing or any other provision
hereof, nothing in this Waiver and Release of Claims shall adversely affect
(i) my rights under the Plan; (ii) my rights to benefits other than
severance benefits under plans, programs, and arrangements of the Company or
any subsidiary or parent of the Company which are accrued but unpaid as of the
date of my termination; or (iii) my rights to indemnification under any
indemnification agreement, applicable law and the certificates of incorporation
and bylaws of the Company and any subsidiary or parent of the Company, and my
rights under any director’s and officers’ liability insurance policy covering
me.

 

I acknowledge that I have signed this Waiver and
Release of Claims voluntarily, knowingly, of my own free will and without
reservation or duress and that no promises or representations have been made to
me by any person to induce me to do so other than the promise of payment set
forth in the first paragraph above and the Company’s acknowledgement of my
rights reserved under the second paragraph above.

 

 

	
  Signature:

  	
   

  	
   

  	
  Dated:

  	
   

  

 

9EXHIBIT 10i

 

HNI CORPORATION

STOCK-BASED COMPENSATION PLAN

 

(ADOPTED MAY 9, 1995.  AMENDED AND RESTATED

MAY 13, 1997.   AMENDED FEBRUARY 10, 1999,

NOVEMBER 10, 2000 AND DECEMBER 31,
2005.)

 

I. 
INTRODUCTION

 

1.1                               Purposes.  The purposes of the 1995 Stock-Based
Compensation Plan (the “Plan”)  of HNI
Corporation (the “Company”), and its subsidiaries from time to time
(individually a “Subsidiary” and collectively the Subsidiaries”) are (i) to
align the interests of the Company’s shareholders and the recipients of awards
under this Plan by increasing the proprietary interest of such recipients in
the Company’s growth and success, (ii) to advance the interests of the
Company by attracting and retaining officers and other key employees and
well-qualified persons who are not officers or employees of the Company for
service as directors of the Company and (iii) to motivate such employees
and Non-Employee Directors to act in the long-term best interests of the
Company’s shareholders.  For purposes of
this Plan, references to employment by the Company shall also mean employment
by a Subsidiary.

 

1.2                               Certain
Definitions.

 

“Agreement”
shall mean the written agreement evidencing an award hereunder between the
Company and the recipient of such award.

 

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

 

“Bonus
Stock” shall mean shares of Common Stock which are not
subject to a Restriction Period or Performance Measures.

 

“Bonus
Stock Award” shall mean an award of Bonus Stock under
this Plan.

 

“Change
in Control” shall have the meaning set forth in Section 6.8(b).

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

“Committee”
shall mean the Committee designated by the Board, consisting of three or more
members of the Board, each of whom shall be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act and (ii) an “outside
director” within the meaning of Section 162(m) of the Code.

 

“Common
Stock” shall mean the common stock, $1.00 par value, of
the Company.

 

“Company”
has the meaning specified in Section 1.1.

 

“Deferral
Period” shall mean the period of time during which
Deferred Shares are subject to deferral limitations under Section 3.4 of
this Plan.

 

“Deferred
Shares” shall mean an award made pursuant of Section 3.4
of this Plan of the right to receive Common Shares at the end of a specified
Deferral Period.

 

“Deferred
Share Award” shall mean an award of Deferred Shares under
the Plan.

 

“Disability”
shall mean the inability of the holder of an award to perform substantially such
holder’s duties and

 

 

responsibilities for a
continuous period of at least six months, as determined solely by the
Committee.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

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

 

“Fair
Market Value” shall mean the average of the high and low
transaction prices] of a share of Common Stock as reported in the
National Association of Securities Dealers Automated Quotation National Market
System on the date as of which such value is being determined, or, if there
shall be no reported transactions for such date, on the next preceding date for
which transactions were reported; provided, however, that if Fair Market Value
for any date cannot be so determined, Fair Market Value shall be determined by
the Committee by whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.

 

“Free-Standing
SAR” shall mean an SAR which is not issued in tandem
with, or by reference to, an option, which entitles the holder thereof to
receive, upon exercise, shares of Common Stock (which may be Restricted Stock),
cash or a combination thereof with an aggregate value equal to the excess of
the Fair Market Value of one share of Common Stock on the date of exercise over
the base price of such SAR, multiplied by the number of such SARs which are
exercised.

 

“Immediate
Family” shall mean any spouse, child, stepchild, or
adopted child.

 

“Incentive
Stock Option” shall mean an option to purchase shares of
Common Stock that meets the requirements of Section 422 of the Code, or
any successor provision, which is intended by the Committee to constitute an
incentive stock option.

 

“Incumbent
Board” shall have the meaning set forth in Section 6.8(b)(2) hereof.

 

“Non-Employee
Director” shall mean except as applied to the definition
of Committee, any director of the Company who is not an officer or employee of
the Company or any Subsidiary.

 

“Non-Statutory
Stock Option” shall mean a stock option which is not an
Incentive Stock Option.

 

“Performance
Measures” shall mean, the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a
condition to the exercisability of all or a portion of an option or SAR, (ii) as
a condition to the grant of a Stock Award or (iii) during the applicable
Restriction Period or Performance Period as a condition to the holder’s
receipt, in the case of a Restricted Stock Award, of the shares of Common Stock
subject to such award, or, in the case of a Performance Share Award, of payment
with respect to such award.  Such
criteria and objectives may include, but are not limited to, the attainment by
a share of Common Stock of a specified Fair Market Value for a specified period
of time, earnings per share, return to stockholders (including dividends),
return on equity, earnings of the Company, revenues, market share, cash flow or
cost reduction goals, or any combination of the foregoing and any other
criteria and objectives established by the Committee.  In the sole discretion of the Committee, the
Committee may amend or adjust the Performance Measures or other terms and
conditions of an outstanding award in recognition of unusual or nonrecurring
events affecting the Company or its financial statements or changes in law or
accounting principles.

 

“Performance
Period” shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.

 

“Performance
Share” shall mean a right, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, to
receive one share of Common Stock, which may be Restricted Stock, or in lieu of
all or a portion thereof, the Fair Market Value of such Performance Share in
cash.

 

“Performance
Share Award” shall mean an award of Performance Shares
under this Plan.

 

“Restricted
Stock” shall mean shares of Common Stock which are
subject to a Restriction Period.

 

2

 

“Restricted
Stock Award” shall mean an award of Restricted Stock
under this Plan.

 

“Restriction
Period” shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.

 

“Retirement”
or “Retires” shall mean a Participant’s termination of
employment with the Company on or after the date that such Participant could
elect to commence a distribution under the HNI Corporation Profit-Sharing
Retirement Plan, as amended from time to time, which, as of January 1,
1999, is upon attainment of age 55.

 

“SAR”
shall mean a stock appreciation right which may be a Free-Standing SAR or a
Tandem SAR.

 

“Stock
Award” shall mean a Restricted Stock Award or a Bonus
Stock Award.

 

“Tandem
SAR” shall mean an SAR which is granted in tandem with,
or by reference to, an option (including a 

Non-Statutory Stock Option granted prior to the date of grant of the SAR),
which entitles the holder thereof to receive, upon exercise of such SAR and
surrender for cancellation of all or a portion of such option, shares of Common
Stock (which may be Restricted Stock), cash or a combination thereof with an
aggregate value equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such SAR,
multiplied by the number of shares of Common Stock subject to such option, or
portion thereof, which is surrendered.

 

“Tax
Date” shall have the meaning set forth in Section 6.5.

 

“Ten
Percent Holder” shall have the meaning set forth in Section 2.1(a).

 

1.3                               Administration.  This Plan shall be administered by the Committee.  Any one or a combination of the following
awards may be made under this Plan to eligible officers and other key employees
of the Company and its Subsidiaries:  (i) options
to purchase shares of Common Stock in the form of Incentive Stock Options or
Non-Statutory Stock Options, (ii) SARs in the form of Tandem SARs or
Free-Standing SARs, (iii) Stock Awards in the form of Restricted Stock or
Bonus Stock and (iv) Performance Shares. 
The Committee shall, subject to the terms of this Plan, select eligible
officers and other key employees for participation in this Plan and determine
the form, amount and timing of each award to such persons and, if applicable,
the number of shares of Common Stock, the number of SARs and the number of
Performance Shares subject to such an award, the exercise price or base price
associated with the award, the time and conditions of exercise or settlement of
the award and all other terms and conditions of the award, including, without
limitation, the form of the Agreement evidencing the award.  The Committee shall, subject to the terms of
this Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions with respect to
the award, such as limiting competitive employment or other activities.  All such interpretations, rules, regulations
and conditions shall be conclusive and binding on all parties.

 

The
Committee may delegate some or all of its power and authority hereunder to the
President and Chief Executive Officer or other executive officer of the Company
as the Committee deems appropriate; provided, however, that the Committee may
not delegate its power and authority with regard to (i) the grant of an
award under this Plan to any person who is a “covered employee” within the
meaning of Section 162(m) of the Code or who, in the Committee’s judgment,
is likely to be a covered employee at any time during the period an award hereunder
to such employee would be outstanding or (ii) the selection for
participation in this Plan of an officer or other person subject to Section 16
of the Exchange Act or decisions concerning the timing, pricing or amount of an
award to such an officer or other person.

 

No
member of the Board of Directors or Committee, and neither the President and
Chief Executive Officer nor any other executive officer to whom the Committee
delegates any of its power and authority hereunder, shall be liable for any act,
omission, interpretation, construction or determination made in connection with
this Plan in good faith, and the members of the Board of Directors and the
Committee and the President and Chief Executive Officer or other executive
officer shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including attorneys’ fees)
arising therefrom to the full extent permitted by law, except as otherwise may
be provided in the Company’s Articles of Incorporation, By-laws, and under any
directors’ and officers’ liability insurance that may be in effect from time to
time.

 

3

 

A
majority of the Committee shall constitute a quorum.  The acts of the Committee shall be either (i) acts
of a majority of the members of the Committee present at any meeting at which a
quorum is present or (ii) acts approved in writing by a majority of the
members of the Committee without a meeting.

 

1.4                               Eligibility.  Participants in this Plan shall consist of
such officers and other key employees of the Company and its Subsidiaries as
the Committee in its sole discretion may select from time to time.  The Committee’s selection of a person to
participate in this Plan at any time shall not require the Committee to select
such person to participate in this Plan at any other time.  

Non-Employee Directors shall be eligible to participate in this Plan in
accordance with Article V.

 

1.5                               Shares
Available.  Subject to adjustment
as provided in Section 6.7, the total number of shares of Common Stock
available for all grants of awards under this Plan on any calendar year,
shall be eighty-three hundredths of one percent (0.83%) of the outstanding and
issued Common Stock as of January 1 of such year beginning January 1,
1997, plus the number of shares of Common Stock which shall have become
available for grants of awards under this Plan in any and all prior calendar
years, but which shall not have become subject to any award granted in any
prior year.

 

Notwithstanding
the foregoing, the maximum number of shares of Common Stock available for the
grant of Incentive Stock Options shall be 2,000,000.  The maximum number of shares of Common Stock
with respect to which options or SARs or a combination thereof may be granted
during any calendar year to any person shall be 250,000, subject to adjustment
as provided in Section 6.7. 

 

II.  STOCK
OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1                               Stock
Options.  The Committee may, in
its discretion, grant options to purchase shares of Common Stock to such
eligible persons as may be selected by the Committee.  Each option, or portion thereof, that is not
an Incentive Stock Option, shall be a 

Non-Statutory Stock Option.  Each
Incentive Stock Option shall be granted within ten years of the effective date
of this Plan.  To the extent that the
aggregate Fair Market Value (determined as of the date of grant) of shares of
Common Stock with respect to which options designated as Incentive Stock
Options are exercisable for the first time by a participant during any calendar
year (under this Plan or any other plan of the Company, or any parent or
Subsidiary) exceeds the amount (currently $100,000) established by the Code,
such options shall constitute Non-Statutory Stock Options.

 

Options
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable:

 

(a)                                  Number
of Shares and Purchase Price.  The number
of shares of Common Stock subject to an option and the purchase price per share
of Common Stock purchasable upon exercise of the option shall be determined by
the Committee; provided, however, that the purchase price per share of Common
Stock purchasable upon exercise of a Non-Statutory Stock Option shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the date
of grant of such option and the purchase price per share of Common Stock
purchasable upon exercise of an Incentive Stock Option shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date of grant
of such option; provided further, that if an Incentive Stock Option shall be
granted to any person who, at the time such option is granted, owns capital
stock possessing more than ten percent of the total combined voting power of
all classes of capital stock of the Company (or of any parent or Subsidiary) (a
“Ten Percent Holder”), the purchase price per share of Common Stock shall be
the price (currently 110% of Fair Market Value) required by the Code in order
to constitute an Incentive Stock Option.

 

(b)                                 Option
Period and Exercisability.  The period
during which an option may be exercised shall be determined by the Committee;
provided, however, that no Incentive Stock Option shall be exercised later than
ten years after its date of grant; provided further, that if an Incentive Stock
Option shall be granted to a Ten Percent Holder, such option shall not be
exercised later than five years after its date of grant.  The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition
to the grant of an option or to the exercisability of all or a portion of an
option.  The Committee shall determine
whether an option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time.  An exercisable option, or portion thereof,
may be exercised only with respect to whole shares of Common Stock.

 

4

 

(c)                                  Method
of Exercise.  An option may be exercised (i) by
giving written notice to the Company specifying the number of whole shares of
Common Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company’s satisfaction) either (A) in
cash, (B) by delivery of previously owned whole shares of Common Stock
(which the optionee has held for at least six months prior to delivery of such
shares and for which the optionee has good title, free and clear of all liens
and encumbrances) having a Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable by reason of such
exercise, (C) by authorizing the Company to withhold a number of whole
shares of Common Stock which would otherwise be delivered upon exercise of the
option having a Fair Market Value, determined as of the date of exercise, equal
to the aggregate purchase price payable by reason of such exercise, provided
that the optionee attests in a manner satisfactory to the Committee that the
optionee at the time of such exercise holds and has held for at least six
months prior to such exercise an equal number of whole shares of Common Stock
and as to which the optionee has good title, free and clear of all liens and
encumbrances, (D) in cash by a broker-dealer acceptable to the Company to
whom the optionee has submitted an irrevocable notice of exercise or (E) a
combination of (A), (B) and (C), in each case to the extent set forth in
the Agreement relating to the option, (ii) if applicable, by surrendering
to the Company any Tandem SARs which are cancelled by reason of the exercise of
the option and (iii) by executing such documents as the Company may
reasonably request.  The Committee may
require that the method of making such payment be in compliance with Section 16
and the rules and regulations thereunder. 
Any fraction of a share of Common Stock which would be required to pay
such purchase price shall be disregarded and the remaining amount due shall be
paid in cash by the optionee.  No
certificate representing Common Stock shall be delivered until the full
purchase price therefor has been paid.

 

2.2                               Stock
Appreciation Rights.  The
Committee may, in its discretion, grant SARs to such eligible persons as may be
selected by the Committee.  The Agreement
relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

 

SARs
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable:

 

(a)   Number of
SARs and Base Price.  The number of SARs
subject to an award shall be determined by the Committee.  Any Tandem SAR related to an Incentive Stock
Option shall be granted at the same time that such Incentive Stock Option is
granted.  The base price of a Tandem SAR
shall be the purchase price per share of Common Stock of the related option.  The base price of a Free-Standing SAR shall
be determined by the Committee; provided, however, that such base price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on
the date of grant of such SAR.

 

(b)   Exercise
Period and Exercisability.  The Agreement
relating to an award of SARs shall specify whether such award may be settled in
shares of Common Stock (including shares of Restricted Stock) or cash or a
combination thereof.  The period for the
exercise of an SAR shall be determined by the Committee; provided, however,
that no Tandem SAR shall be exercised later than the expiration, cancellation,
forfeiture or other termination of the related option.  The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition
to the grant of an SAR or to the exercisability of all or a portion of an
SAR.  The Committee shall determine
whether an SAR may be exercised in cumulative or non-cumulative installments
and in part or in full at any time.  An
exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem
SAR, only with respect to whole shares of Common Stock and, in the case of a
Free-Standing SAR, only with respect to a whole number of SARs.  If an SAR is exercised for shares of Restricted
Stock, a certificate or certificates representing such Restricted Stock shall
be issued in accordance with Section 3.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). 
Prior to the exercise of an SAR for shares of Common Stock, including
Restricted Stock, the holder of such SAR shall have no rights as a stockholder
of the Company with respect to the shares of Common Stock subject to such SAR
and shall have rights as a stockholder of the Company in accordance with Section 6.10.

 

(c)   Method of
Exercise.  A Tandem SAR may be exercised (i) by
giving written notice to the Company specifying the number of whole SARs which
are being exercised, (ii) by surrendering to the Company any options which
are cancelled by reason of the exercise of the Tandem SAR and (iii) by
executing such documents as the Company may reasonably request.  A Free-Standing SAR may be exercised (i) by
giving written notice to the Company specifying the whole number of SARs which
are being exercised and (ii) by executing such documents as the Company
may reasonably request.

 

2.3                               Termination
of Employment.  Except as
otherwise provided in this Section 2.3 and subject to Section 6.8,
all of the

 

5

 

terms relating to the
exercise, cancellation or other disposition of an option or SAR upon a
termination of employment with the Company of the holder of such option or SAR,
as the case may be, whether by reason of retirement or other termination, shall
be determined by the Committee.  Such
determination shall be made at the time of the grant of such option or SAR, as
the case may be, and shall be specified in the Agreement relating to such
option or SAR.  Notwithstanding the
foregoing, each option or SAR granted under the Plan shall become fully vested
and nonforfeitable upon the death or Disability of the Participant awarded such
option or SAR, provided such Participant is employed by the Company on the date
of death or Disability.

 

III.  STOCK
AWARDS

 

3.1                               Stock
Awards.  The Committee may, in
its discretion, grant Stock Awards to such eligible persons as may be selected
by the Committee.  The Agreement relating
to a Stock Award shall specify whether the Stock Award is a Restricted Stock
Award or Bonus Stock Award.

 

3.2                               Terms
of Stock Awards.  Stock Awards
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable.

 

(a)                                  Number
of Shares and Other Terms.  The
number of shares of Common Stock subject to a Restricted Stock Award or Bonus
Stock Award and the Performance Measures (if any) and Restriction Period
applicable to a Restricted Stock Award shall be determined by the Committee.

 

(b)   Vesting
and Forfeiture.  The Agreement
relating to a Restricted Stock Award shall provide, in the manner determined by
the Committee, in its discretion, and subject to the provisions of this Plan,
for the vesting of the shares of Common Stock subject to such award (i) if
specified Performance Measures are satisfied or met during the specified
Restriction Period or (ii) if the holder of such award remains
continuously in the employment of the Company during the specified Restriction
Period and for the forfeiture of the shares of Common Stock subject to such
award (x) if specified Performance Measures are not satisfied or met during the
specified Restriction Period or (y) if the holder of such award does not remain
continuously in the employment of the Company during the specified Restriction
Period.

 

Bonus
Stock Awards shall not be subject to any Performance Measures or Restriction
Periods.

 

(c)   Share
Certificates.  During the Restriction
Period, a certificate or certificates representing a Restricted Stock Award may
be registered in the holder’s name and may bear a legend, in addition to any
legend which may be required pursuant to Section 6.6, indicating that the
ownership of the shares of Common Stock represented by such certificate is
subject to the restrictions, terms and conditions of this Plan and the
Agreement relating to the Restricted Stock Award.  All such certificates shall be deposited with
the Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company, which would permit
transfer to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is forfeited in
whole or in part.  Upon termination of
any applicable Restriction Period (and the satisfaction or attainment of
applicable Performance Measures), or upon the grant of a Bonus Stock Award, in
each case subject to the Company’s right to require payment of any taxes in
accordance with Section 6.5, a certificate or certificates evidencing
ownership of the requisite number of shares of Common Stock shall be delivered
to the holder of such award.

 

(d)   Rights
with Respect to Restricted Stock Awards. 
Unless otherwise set forth in the Agreement relating to a Restricted
Stock Award, and subject to the terms and conditions of a Restricted Stock
Award, the holder of such award shall have all rights as a stockholder of the
Company, including, but not limited to, voting rights, the right to receive
dividends and the right to participate in any capital adjustment applicable to
all holders of Common Stock; provided, however, that a distribution with
respect to shares of Common Stock, other than a distribution in cash, shall be
deposited with the Company and shall be subject to the same restrictions as the
shares of Common Stock with respect to which such distribution was made.

 

3.3                               Termination
of Employment.  Except as
otherwise provided in this Section 3.3 and subject to Section 6.8,
all of the terms relating to the satisfaction of Performance Measures and the
termination of the Restriction Period relating to a Restricted Stock Award, or
cancellation of or forfeiture of such Restricted Stock Award upon a termination
of employment with the Company of the holder of such Restricted Stock Award,
whether by reason of retirement or other termination, shall be set forth in the
Agreement relating to such Restricted Stock Award, except that, notwithstanding
the foregoing, each Restricted Stock

 

6

 

Award shall become fully
vested and nonforfeitable upon the death or Disability of the Participant
awarded such Restricted Stock Award, provided such Participant is employed by
the Company on the date of death or Disability.

 

3.4                               Deferred
Shares.  The Committee may also
authorize the granting or sale of Deferred Shares to Participants.  Each such grant or sale may utilize any or
all of the authorizations and shall be subject to all of the requirements
contained in the following provisions:

 

(a)                                  Each such grant or sale shall constitute
the agreement by the Company to deliver Common Stock to the Participant in the
future in consideration of the performance of services, but subject to the
fulfillment of such conditions during the Deferral Period as the Board may
specify.

 

(b)                                 Each such grant or sale may be made
without additional consideration or in consideration of a payment by such
Participant that is less than the Fair Market Value per share of Common Stock
at the date of grant.

 

(c)                                  Each such grant or sale shall be subject
to a Derferral Period of not less than 1 year, as determined by the Board at
the date of grant, and may provide for the earlier lapse or other modification
of such Deferral Period in the event of a Change in Control.

 

(d)                                 During the Deferral Period, the
Participant shall have no right to transfer any rights under his or her award
and shall have no rights of ownership in the Deferred Shares and shall have no
right to vote them, but the Committee may, at or after the date of grant,
authorize the payment of dividend equivalents on such Shares on either a
current or deferred or contingent basis, either in cash or in additional Common
Stock.

 

(e)                                  Each
grant or sale of Deferred Shares shall be evidenced by an agreement executed on
behalf of the Company by any officer and delivered to and accepted by the
Participant and shall contain such terms and provisions, consistent with this
Plan, as the Board may approve.

 

IV. 
PERFORMANCE SHARE AWARDS

 

4.1                               Performance
Share Awards.  The Committee may,
in its discretion, grant Performance Share Awards to such eligible persons as
may be selected by the Committee.

 

4.2                               Terms
of Performance Share Awards. 
Performance Share Awards shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
advisable.

 

(a)                                  Number
of Performance Shares and Performance Measures.  The number of Performance Shares subject to
any award and the Performance Measures and Performance Period applicable to
such award shall be determined by the Committee.

 

(b)                                 Vesting
and Forfeiture.  The Agreement
relating to a Performance Share Award shall provide, in the manner determined
by the Committee, in its discretion, and subject to the provisions of this
Plan, for the vesting of such award, if specified Performance Measures are
satisfied or met during the specified Performance Period, and for the
forfeiture of such award, if specified Performance Measures are not satisfied
or met during the specified Performance Period.

 

(c)                                  Settlement
of Vested Performance Share Awards. 
The Agreement relating to a Performance Share Award (i) shall
specify whether such award may be settled in shares of Common Stock (including
shares of Restricted Stock) or cash or a combination thereof and (ii) may
specify whether the holder thereof shall be entitled to receive, on a current
or deferred basis, dividend equivalents, and, if determined by the Committee,
interest on any deferred dividend equivalents, with respect to the number of
shares of Common Stock subject to such award. 
If a Performance Share Award is settled in shares of Restricted Stock, a
certificate or certificates representing such Restricted Stock shall be issued
in accordance with Section 3.2(c) and the holder of such Restricted
Stock shall have such rights of a stockholder of the Company as determined
pursuant to Section 3.2(d).  Prior
to the settlement of a Performance Share Award in shares of Common Stock,
including Restricted Stock, the holder of such award shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject

 

7

 

to such award.

 

4.3                               Termination
of Employment.  Except as
otherwise provided in this Section 4.3 and subject to Section 6.8,
all of the terms relating to the satisfaction of Performance Measures and the
termination of the Performance Period relating to a Performance Share Award, or
cancellation of or forfeiture of such Performance Share Award upon a
termination of employment with the Company of the holder of such Performance
Share Award, whether by reason of retirement or other termination, shall be set
forth in the Agreement relating to such Performance Share Award, except that,
notwithstanding the foregoing, each Performance Share Award shall become fully
vested and nonforfeitable upon the death or Disability of the Participant
holding such Performance Share Award, provided such Participant is employed by
the Company on the date of death or Disability.

 

V. 
PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

 

5.1                               Eligibility.  Each Non-Employee Director shall be
eligible to elect to receive shares of Common Stock in accordance with this Article V.

 

5.2                               Time
and Manner of Election.  At least
6 (six) months prior to the date of any annual meeting of shareholders of the
Company during the term of this Plan, Non-Employee Directors may file with the
Committee or its designee a written election to receive shares of Common Stock
in lieu of all or a portion of such Non-Employee Director’s future annual
retainer, paid quarterly, exclusive of meeting or committee fees.  Notwithstanding the foregoing, an election
made by (i) a Non-Employee Director in respect of the annual retainer
payable for the period beginning on the date of the 1995 annual meeting of the
shareholders of the Company or (ii) an individual who becomes a
Non-Employee Director on a date less than six months prior to any annual
meeting of shareholders, shall become effective on the first business day that
is six months after the date (“Effective Date”) such Non-Employee Director
files such election, and such election shall be applicable only to the portion
of such Non-Employee Director’s annual retainer determined by multiplying such
annual retainer by a fraction, the numerator of which is the number of calendar
days from the Effective Date to and including the last day for which such
Annual Retainer is payable and the denominator is 365.  An election pursuant to this Section, once
made, shall be irrevocable in respect to the annual retainer for which made.

 

The
Shares to be issued pursuant to this Section shall be issued on each date
on which an installment of the Non-Employee Director’s annual retainer would
otherwise be payable in cash.  The number
of such shares to be issued shall be determined by dividing the amount of the
then payable installment of the annual retainer subject to an election under
this Section by the Fair Market Value of a share of Common Stock on such
date.  Any fraction of a share shall be
disregarded and the remaining amount of the annual retainer shall be paid in
cash.

 

VI.  GENERAL

 

6.1                               Effective
Date and Term of Plan.  This Plan
shall be submitted to the stockholders of the Company for approval and, if
approved by the affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the 1997 annual meeting of
stockholders, shall become effective on the date of such approval.  This Plan shall terminate 10 years after its
effective date unless terminated earlier by the Board.  Termination of this Plan shall not affect the
terms or conditions of any award granted prior to termination.

 

Awards
hereunder may be made at any time prior to the termination of this Plan,
provided that no award may be made later than 10 years after the effective date
of this Plan.  In the event that this
Plan is not approved by the stockholders of the Company, this Plan and any
awards hereunder shall be void and of no force or effect.

 

6.2                               Amendments.  The Board may amend this Plan as it shall
deem advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation including Section 162(m) of the
Code; provided, however, that no amendment shall be made without stockholder
approval if such amendment would (a) increase the maximum number of shares
of Common Stock available under this Plan (subject to Section 6.7), or (b) extend
the term of this Plan; provided further that, subject to Section 6.7.  No amendment may impair the rights of a
holder of an outstanding award without the consent of such holder.  Notwithstanding the foregoing, the Board may
condition the grant of any award or combination of awards authorized under the
Plan on the surrender or deferral by the Participant of such Participant’s
right to an award hereunder, a cash bonus, or other compensation otherwise
payable by the Company to the Participant.

 

8

 

6.3                               Agreement.  Each award under this Plan shall be evidenced
by an Agreement setting forth the terms and conditions applicable to such
award.  No award shall be valid until an
Agreement is executed by the Company and the recipient of such award and, upon
execution by each party and delivery of the Agreement to the Company, such
award shall be effective as of the effective date set forth in the Agreement.

 

6.4                               Transferability
of Stock Options, SARs and Performance Shares.

 

(a)                                  Except as set forth in Section 6.4(b) or
as otherwise determined by the Board, no option, SAR or Performance Share shall
be transferable other than (i) by will, the laws of descent and
distribution or pursuant to beneficiary designation procedures approved by the
Committee or (ii) as otherwise permitted under Rule 16b-3 under the
Exchange Act as set forth in the Agreement relating to such award.  Except to the extent permitted by the
foregoing sentence and Section 6.4(b), each option, SAR or Performance
Share may be exercised or settled during the holder’s lifetime only by the
holder or the holder’s legal representative or similar person.  Except to the extent permitted by the second
preceding sentence and Section 6.4(b), no option, SAR or Performance Share
may be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process. 
Except as provided in Section 6.4(b), upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
option, SAR or Performance Share, such award, and all rights thereunder shall
immediately become null and void.

 

(b)                                 Notwithstanding the provisions of Section 6.4(a),
option rights (other than Incentive Stock Options) shall be transferable by a
Participant, without payment of consideration therefor by the transferee, to
any one or more members of the Participant’s Immediate Family (or to one or
more trusts established solely for the benefit of one or more members of the
Participant’s Immediate Family or to one or more partnerships in which the only
partners are members of the Participant’s Immediate Family); provided, however,
that (i) no such transfer shall be effective unless reasonable prior
notice thereof is delivered to the Company and such transfer is thereafter
effected subject to the specific authorization of, and in accordance with any
terms and conditions that shall have been made applicable thereto, by the Committee
or by the Board and (ii) any such transferee shall be subject to the same
terms and conditions hereunder as the Participant.

 

6.5                               Tax
Withholding.  The Company shall
have the right to require, prior to the issuance or delivery of any shares of
Common Stock or the payment of any cash pursuant to an award made hereunder,
payment by the holder of such award of any Federal, state, local or other taxes
which may be required to be withheld or paid in connection with such award.  An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the “Tax Date”), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the
holder may satisfy any such obligation by any of the following means:  (A) a cash payment to the Company, (B) delivery
to the Company of previously owned whole shares of Common Stock (which the
holder has held for at least six months prior to the delivery of such shares
and for which the holder has good title, free and clear of all liens and
encumbrances) having an aggregate Fair Market Value, determined as of the Tax
Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing
the Company to withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax Date,
or withhold an amount of cash which would otherwise be payable to a holder,
equal to the amount necessary to satisfy any such obligation, (D) in the
case of the exercise of an option, a cash payment by a broker-dealer acceptable
to the Company to whom the optionee has submitted an irrevocable notice of
exercise or (E) any combination of (A), (B) and (C), in each case to
the extent set forth in the Agreement relating to the award; provided, however,
that the Committee shall have sole discretion to disapprove of an election
pursuant to any of clauses (B), (E) and that in the case of a holder who
is subject to Section 16 of the Exchange Act, the Company may require that
the method of satisfying such an obligation be in compliance with Section 16
and the rules and regulations thereunder. 
An Agreement may provide for shares of Common Stock to be delivered or
withheld having an aggregate Fair Market Value in excess of the minimum amount
required to be withheld, but not in excess of the amount determined by applying
the holder’s maximum marginal tax rate. Any fraction of a share of Common Stock
which would be required to satisfy such an obligation shall be disregarded and
the remaining amount due shall be paid in cash by the holder.

 

6.6                               Restrictions
on Shares.  Each award made
hereunder shall be subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the shares of
Common Stock subject to such award upon any securities exchange or under any
law, or the consent or approval of any governmental body, or the taking of any
other

 

9

 

action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company.  The Company may require that certificates
evidencing shares of Common Stock delivered pursuant to any award made
hereunder bear a legend indicating that the sale, transfer or other disposition
thereof by the holder is prohibited except in compliance with the Securities Act
of 1933, as amended, and the rules and regulations thereunder.

 

6.7                               Adjustment.  In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available
under this Plan, the number and class of securities subject to each outstanding
option and the purchase price per security, the terms of each outstanding SAR,
the number and class of securities subject to each outstanding Stock Award or
Deferred Share Award, and the terms of each outstanding Performance Share shall
be appropriately adjusted by the Committee, such adjustments to be made in the
case of outstanding options and SARs without an increase in the aggregate
purchase price or base price.  The
decision of the Committee regarding any such adjustment shall be final, binding
and conclusive.  If any such adjustment
would result in a fractional security being (i) available under this Plan,
such fractional security shall be disregarded, or (ii) subject to an award
under this Plan, the Company shall pay the holder of such award, in connection with
the first vesting, exercise or settlement of such award, in whole or in part,
occurring after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the Fair Market Value on the vesting, exercise or
settlement date over (B) the exercise or base price, if any, of such
award.

 

6.8                               Change
in Control.

 

(a)                                  (1)                                  Notwithstanding
any provision in this Plan or any Agreement, in the event of a Change in Control
pursuant to Section (b)(3) or (4) below in connection with which
the holders of Common Stock receive shares of common stock that are registered
under Section 12 of the Exchange Act, (i) all outstanding options and
SARS shall immediately become exercisable in full, (ii) the Restriction
Period applicable to any outstanding Restricted Stock Award shall lapse, (iii) the
Performance Period applicable to any outstanding Performance Share shall lapse,
(iv) the Performance Measures applicable to any outstanding Restricted
Stock Award (if any) and to any outstanding Performance Share shall be deemed
to be satisfied at the maximum level, (v) there shall be substituted for
each share of Common Stock available under this Plan, whether or not then
subject to an outstanding award, the number and class of shares into which each
outstanding share of Common Stock shall be converted pursuant to such Change in
Control, and (vi) the Deferral Period applicable to any Deferred Shares
shall lapse.  In the event of any such substitution,
the purchase price per share in the case of an option and the base price in the
case of an SAR shall be appropriately adjusted by the Committee, such
adjustments to be made in the case of outstanding options and SARs without an
increase in the aggregate purchase price or base price.

 

(2)                                  Notwithstanding
any provision in this Plan or any Agreement, in the event of a Change in
Control pursuant to Section (b)(1) or (2) below, or in the event
of a Change in Control pursuant to Section (b)(3) or (4) below
in connection with which the holders of Common Stock receive consideration
other than shares of common stock that are registered under Section 12 of
the Exchange Act, the Committee in its discretion may require that each
outstanding award shall be surrendered to the Company by the holder thereof,
and each such award shall immediately be cancelled by the Company, and the
holder shall receive, within ten days of the occurrence of a Change in Control
pursuant to Section (b)(1) or (2) below or within ten days of
the approval of the stockholders of the Company contemplated by Section (b)(3) or
(4) below, a cash payment from the Company in an amount equal to (i) in
the case of an option, the number of shares of Common Stock then subject to
such option, multiplied by the excess, if any, of the greater of (A) the
highest per share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place or (B) the Fair
Market Value of a share of Common Stock on the date of occurrence of the Change
in Control, over the purchase price per share of Common Stock subject to the
option, (ii) in the case of a Free-Standing SAR, the number of shares of
Common Stock then subject to such SAR, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the base price of the SAR, (iii) in the case of a
Restricted Stock Award, Performance Share Award or Deferred Share Award, the
number of shares of Common Stock or the number of Performance Shares, as the
case may be, then subject to such award, multiplied by the greater of (A) the
highest per share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place or (B) the Fair
Market Value of a share of Common

 

10

 

Stock on the date of
occurrence of the Change in Control.  In
the event of a Change in Control, each Tandem SAR shall be surrendered by the
holder thereof and shall be cancelled simultaneously with the cancellation of
the related option.  The Company may, but
is not required to, cooperate with any person who is subject to Section 16
of the Exchange Act to assure that any cash payment in accordance with the
foregoing to such person is made in compliance with Section 16 and the rules and
regulations thereunder.

 

(b)                                 “Change
in Control” shall mean:

 

(1)                                  the
acquisition by any individual, entity or group (a “Person”), including any “person”
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the “Outstanding Company Common Stock”)
or (ii) the combined voting power of the then outstanding securities of
the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); excluding, however, the following:  (A) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company),  (B) any acquisition by the Company, (C) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (3) of this Section 6.8(b);
or

 

(2)                                  individuals
who, as of the date hereof, constitute the Board of Directors (the “Incumbent
Board”) cease for any reason to constitute at least a majority of such Board;
provided, that any individual who becomes a director of the Company subsequent
to the date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or threatened
election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than
the Board shall not be deemed a member of the Incumbent Board; or

 

(3)                                  consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business Combination”),
in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50 percent of,
respectively, the then outstanding shares of Common Stock, and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially in the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20 percent or more of, respectively, the then
outstanding shares of Common Stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the incumbent Board at the time
of the execution of the initial agreement, or the action of the Board,
providing for such Business Combination; or

 

(4)                                  approval
by the stockholders of the Company of a plan of complete liquidation or
dissolution of the Company.

 

6.9                               No
Right of Participation or Employment. 
No person shall have any right to participate in this Plan.  Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company, any Subsidiary or any affiliate of the Company or affect in any manner
the right of the Company, any Subsidiary or any affiliate of the Company to
terminate the employment of any person at any time without liability hereunder.

 

11

 

6.10                        Rights
as Stockholder.  No person shall
have any right as a stockholder of the Company with respect to any shares of
Common Stock or other equity security of the Company which is subject to an
award hereunder unless and until such person becomes a stockholder of record
with respect to such shares of Common Stock or equity security.

 

6.11                        Governing
Law.  This Plan, each award
hereunder and the related Agreement, and all determinations made and actions
taken pursuant thereto, 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 Iowa
and construed in accordance therewith without giving effect to principles of
conflicts of laws.

 

6.12                        Deferral
Agreements.  The Participants may
enter into agreements which will defer the receipt of any shares of Common
Stock to be received under an award.  Any
such agreement shall require that the deferred distribution be made in shares
of Common Stock.

 

12

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