Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT — AMENDMENT

 

THIS AMENDMENT is
made and entered into by and between MTR Gaming Group, Inc. (“MTR” or
the “Company”, having an address of State Route 2, South, Chester, West
Virginia 26034) and John W. Bittner (“Executive”),
collectively referred to as the “Parties;” and

 

WHEREAS, the Parties entered into an employment agreement on or
about November 1, 2009 (the “employment agreement”); and

 

WHEREAS, on or about June 9, 2010 the Compensation Committee
of the Company agreed to modify the “Change in Control” provisions of Executive’s
employment agreement with the Company; and

 

NOW, THEREFORE, the Parties stipulate and agree, that until such time as a
new employment agreement is executed by the Parties, the following provisions
regarding shall take full effect and control the conduct of the parties:

 

Change in Control:  If during the Period of Employment
and at any time within twelve (12) months following a Change in Control, (i) Executive
is terminated by the Company or any resulting entity without Cause, or (ii) Executive
is not offered the position of Executive Vice President
of Finance and Accounting, and Treasurer of the Company, or an equivalent position with the resulting entity, and
Executive voluntarily terminates his employment with the Company or resulting
entity within 30 days therefrom (“Constructive Termination”), then Executive
shall be entitled to eighteen (18) months salary following the effective date
of the termination. Executive shall concurrently with such payments execute a
release in form and substance acceptable to the Company in its sole discretion
(and any revocation periods contained in such release have expired) and
Executive shall have complied with the Company’s termination procedures.

 

“Change in Control” shall mean a
change in 50% or more of the ownership or the combined voting power of the
Company’s outstanding voting securities or a sale of substantially all of the
assets of the Company.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
27 day of July, 2010.

 

 

	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ ROBERT F. GRIFFIN

  
	
   

  	
   

  	
  ROBERT F. GRIFFIN,
  PRESIDENT & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Accepted by:

  	
  /S/ JOHN W. BITTNER

  
	
   

  	
   

  	
  JOHN W. BITTNER, JR.Exhibit 10.3

 

EMPLOYMENT AGREEMENT — AMENDMENT

 

THIS AMENDMENT is
made and entered into by and between MTR Gaming Group, Inc. (“MTR” or
the “Company”, having an address of State Route 2, South, Chester, West
Virginia 26034) and Robert Norton (“Executive”),
collectively referred to as the “Parties;” and

 

WHEREAS, the Parties entered into an employment agreement on or
about May 6, 2009 (the “employment agreement”); and

 

WHEREAS, on or about June 9, 2010 the Compensation Committee
of the Company agreed to modify the “Change in Control” provisions of Executive’s
employment agreement with the Company; and

 

NOW, THEREFORE, the Parties stipulate and agree, that until such time as a
new employment agreement is executed by the Parties, the following provisions
regarding shall take full effect and control the conduct of the parties:

 

Change in
Control:  If during the Period of Employment and at any time
within twelve (12) months following a Change in Control, (i) Executive is
terminated by the Company or any resulting entity without Cause, or (ii) Executive
is not offered the position of
C.O.O. or an equivalent position with the resulting entity, and Executive
voluntarily terminates his employment with the Company or resulting entity
within 30 days therefrom (“Constructive Termination”), then Executive shall be
entitled to two years salary following the effective date of the termination.
Executive shall concurrently with such payments execute a release in form and
substance acceptable to the Company in its sole discretion (and any revocation
periods contained in such release have expired) and Executive shall have
complied with the Company’s termination procedures.

 

“Change in Control” shall mean a
change in 50% or more of the ownership or the combined voting power of the Company’s
outstanding voting securities or a sale of substantially all of the assets of
the Company.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this
27 day of July, 2010.

 

 

	
   

  	
   

  	
  MTR GAMING GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ ROBERT F. GRIFFIN

  
	
   

  	
   

  	
  ROBERT F. GRIFFIN, PRESIDENT &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Accepted by:

  	
  /S/ ROBERT J. NORTON

  
	
   

  	
   

  	
  ROBERT J. NORTONExhibit
10.4

 

MTR Gaming Group, Inc.

2010 Long Term Incentive Plan

 

1.  Purpose.  The purpose of the MTR Gaming
Group, Inc. 2010 Long Term Incentive Plan is to further align the
interests of eligible participants with those of the Company’s shareholders by
providing long-term incentive compensation opportunities tied to the
performance of the Company and its Common Stock. The Plan is intended to
advance the interests of the Company and its shareholders by attracting,
retaining and motivating key personnel upon whose judgment, initiative and
effort the successful conduct of the Company’s business is largely dependent.

 

2.  Definitions.  Wherever the following capitalized terms are
used in the Plan, they shall have the meanings specified below:

 

“Award” means an award of a Stock Option,
Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit,
Performance Award or Stock Award granted under the Plan.

 

“Award Agreement” means an agreement
entered into between the Company and a Participant setting forth the terms and
conditions of an Award granted to a Participant, as provided in
Section 15.1 hereof.

 

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

 

“Cause” shall have the meaning set
forth in Section 14.2(b) hereof.

 

“Change in Control” shall have the meaning set
forth in Section 13.2 hereof.

 

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

 

“Committee” means the Compensation
Committee of the Board, or such other committee of the Board appointed by the
Board to administer the Plan.

 

“Common Stock” means the Company’s
Class A common stock, par value $0.00001 per share.

 

“Company” means MTR Gaming
Group, Inc., a Delaware corporation.

 

“Date of Grant” means the date on which an
Award under the Plan is granted by the Committee, or such later date as the
Committee may specify to be the effective date of an Award.

 

“Effective Date” means the date the Plan is
approved by the Company’s shareholders in accordance with Section 16.1
hereof.

 

“Eligible Person” means any person who is
an employee, officer, or Non-Employee Director of the Company or any of its
Subsidiaries.

 

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

 

“Fair Market Value” means, with respect to
a share of Common Stock as of a given date, the average of the highest and
lowest sales prices per share of Common Stock on such date (or if such date is
not a trading day, then on the next preceding trading date), as reported on the
NASDAQ Stock Market or other principal exchange on which the Common Stock is
then listed, or if not so listed, “Fair Market Value” shall be such value as
determined by the Board in its discretion and, to the extent necessary, shall
be determined in a manner consistent with Section 409A of the Code and the
regulations thereunder.

 

“Incentive Stock Option” means a Stock
Option granted under Section 6 hereof that is intended to meet the
requirements of Section 422 of the Code and the regulations thereunder.

 

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“Non-Employee Director” means any member of
the Board who is not an employee of the Company.

 

“Nonqualified Stock Option” means a Stock
Option granted under Section 6 hereof that is not an Incentive Stock
Option.

 

“Participant” means any Eligible Person who
holds an outstanding Award under the Plan.

 

“Performance Award” means an Award that is
denominated by a cash amount to an Eligible Person under Section 10 hereof
and payable based upon the attainment of pre-established business and/or
individual performance goals.

 

“Plan” means the MTR Gaming
Group, Inc. Long Term Incentive Plan as set forth herein, effective as
provided in Section 16.1 hereof, and as may be amended from time to time.

 

“Prior Plans” means, collectively, the
Company’s 2000 Stock Incentive Plan, 2001 Stock Incentive Plan, 2002 Stock
Incentive Plan, 2004 Stock Incentive Plan, 2005 Stock Incentive Plan and 2007
Stock Incentive Plan.

 

“Restricted Stock Award” means a grant of
shares of Common Stock to an Eligible Person under Section 8 hereof that
are issued subject to such vesting and transfer restrictions as the Committee
shall determine, and such other conditions, as are set forth in the Plan and
the applicable Award Agreement.

 

“Restricted Stock Unit” means a grant to an
Eligible Person under Section 9 hereof representing notional unit
interests equal in value to a share of Common Stock to be paid or distributed
at such times, and subject to such conditions, as set forth in the Plan and the
applicable Award Agreement.

 

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

 

“Service” means, as applicable, a
Participant’s employment with the Company or any Subsidiary, or a Participant’s
service as a Non-Employee Director with the Company or any Subsidiary.

 

“Stock Award” means a grant of shares of
Common Stock to an Eligible Person under Section 11 hereof, which may be
free of transfer restrictions and forfeiture conditions.

 

“Stock Appreciation Right” means a grant to
an Eligible Person under Section 7 hereof entitling such Eligible Person
to receive a payment, representing the difference between the base price per
share of the right and the Fair Market Value of a share of Common Stock at such
time, and subject to such conditions, as are set forth in the Plan and the
applicable Award Agreement.

 

“Stock Option” means a grant to an Eligible
Person under Section 6 hereof to purchase shares of Common Stock at such
time and price, and subject to such conditions, as are set forth in the Plan
and the applicable Award Agreement.

 

“Subsidiary” means an entity (whether or
not incorporated) that is wholly or majority owned or controlled, directly or
indirectly, by the Company; provided,
however, that with respect to
Incentive Stock Options, the term “Subsidiary” shall include only an entity
that qualifies under Section 424(f) of the Code as a “subsidiary
corporation” with respect to the Company.

 

3. 
Administration.

 

3.1  Committee
Members.  The Plan shall be
administered by a Committee comprised of no fewer than two members of the Board
who are appointed by the Board to administer the Plan. To the extent deemed
necessary by the Board, each Committee member shall satisfy the requirements
for (i) an “independent director” under rules adopted by the NASDAQ
Stock Market, (ii) a “nonemployee

 

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director” for purposes of
such Rule 16b-3 under the Exchange Act and (iii) an “outside
director” under Section 162(m) of the Code. No member of the
Committee will be liable for any action or determination made in good faith by
the Committee with respect to the Plan or any Award thereunder.

 

3.2  Committee
Authority.  It shall be the
duty of the Committee to administer the Plan in accordance with the Plan’s
provisions. The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but
not limited to, the power to (i) determine the Eligible Persons to whom
Awards shall be granted under the Plan, (ii) determine the types of Awards
that may be granted, the time or times at which Awards may be granted, and the
number of shares of Common Stock, units or other rights subject to each Award,
(iii) prescribe the terms and conditions of all Awards,
(iv) interpret the Plan and terms of the Awards, (v) adopt rules for
the administration, interpretation and application of the Plan as are
consistent therewith, and interpret, amend or revoke any such rules,
(vi) make all determinations with respect to a Participant’s Service and
the termination of such Service for purposes of any Award, and (vii) adopt
such procedures and subplans as are necessary or appropriate to permit
participation in the Plan by Eligible Person who are foreign nationals or
employed outside of the United States. The Committee’s determinations under the
Plan need not be uniform and may be made by the Committee selectively among
Participants and Eligible Persons, whether or not such persons are similarly
situated. The Committee shall, in its discretion, consider such factors as it
deems relevant in making its interpretations, determinations and actions under
the Plan including, without limitation, the recommendations or advice of any
officer or employee of the Company or such attorneys, consultants, accountants
or other advisors as it may select. All interpretations, determinations, and
actions by the Committee shall be final, conclusive, and binding upon all
parties.

 

3.3  Delegation of
Authority.  The Committee, in
its discretion, and on such terms and conditions as it may provide, may
delegate all or any part of its authority and powers under the Plan to the
Company’s Chief Executive Officer or to a committee of officers of the Company;
provided, however, that no delegate will have the
authority to grant or amend Awards to executive officers of the Company, nor,
to grant or amend Awards that are intended to qualify as performance-based
compensation under Section 162(m) of the Code, to the extent
necessary for such qualification.

 

4.  Shares
Subject to the Plan.

 

4.1  Number of
Shares Reserved.  Subject to
adjustment as provided in Section 4.3 hereof, the total number of shares
of Common Stock that are reserved for issuance under the Plan shall be the sum
of (i) 2,511,800 (inclusive of 511,800 shares of Common Stock that remain
authorized for issuance under the Prior Plans as of the Effective Date), and
(ii) the number of shares subject to awards granted under the Prior Plans
that become canceled, expired, forfeited, surrendered, or otherwise terminated
in accordance with their terms and the applicable Prior Plan up to a maximum of
1,263,000 shares. The entire pool of shares of Common Stock available under the
Plan is available for the grant of Incentive Stock Options. Any shares of
Common Stock delivered under the Plan shall consist of authorized and unissued
shares, or treasury shares.

 

4.2  Share
Replenishment.  To the extent
that any Award under the Plan is canceled, expired, forfeited, surrendered,
settled in cash, or otherwise terminated without delivery of shares of Common
Stock to the Participant, in whole or in part, the shares of Common Stock
retained by or returned to the Company will not be deemed to have been
delivered under the Plan, and will be available for future Awards under the
Plan. Shares that are (i) withheld from an Award or separately surrendered
by the Participant in payment of the exercise or purchase price or taxes
relating to such an Award or (ii) not issued or delivered as a result of
the net settlement of an outstanding Stock Option or Stock Appreciation Right
shall be deemed to constitute delivered shares and will not be available for
future Awards under the Plan.

 

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4.3  Adjustments
and Other Corporate Changes. 
If there shall occur any change with respect to the outstanding shares
of Common Stock by reason of any recapitalization, reclassification, stock
dividend, extraordinary dividend, stock split, reverse stock split or other
distribution with respect to the shares of Common Stock, or any merger,
reorganization, consolidation, combination, spin-off, or other similar corporate
change, or any other change affecting the Common Stock, the Committee shall, in
the manner and to the extent it considers equitable to the Participants and
consistent with the terms of the Plan, cause an adjustment to be made to
(i) the maximum number and kind of shares of Common Stock provided in
Sections 4.1, 6.1, 7.1, 8.1, 9.1 and 11.1 hereof, (ii) the number and
kind of shares of Common Stock, units, or other rights subject to then
outstanding Awards, (iii) the exercise price or base price for each share
or unit or other right subject to then outstanding Awards, and (iv) any
other terms of an Award that are affected by the event. Notwithstanding the
foregoing, (a) any such adjustments shall, to the extent necessary, be
made in a manner consistent with the requirements of Section 409A of the
Code, and (b) in the case of Incentive Stock Options, any such adjustments
shall, to the extent practicable, be made in a manner consistent with the
requirements of Section 424(a) of the Code. In the event of (i) the
liquidation or dissolution of the Company, (ii) a merger in which the
Company is not the surviving corporation, or (iii) any transaction (or
series of related transactions) in which (x) more than 50% of the
outstanding Common Stock is transferred or exchanged for other consideration,
or (y) shares of Common Stock in excess of the number of shares of Common
Stock outstanding immediately preceding the transaction are issued (other than
to shareholders of the Company with respect to their shares in the Company),
then the Board, in its discretion, may provide that each Award then-outstanding
shall terminate in exchange for an equitable payment as determined by the Board
in good faith (including, without limitation, in the case of Stock Options and
Stock Appreciation rights, a cash payment to the extent of the excess, if any,
of the then-Fair Market Value of a share of Common Stock, over the exercise or
base price per share of Common Stock subject to the Award).

 

5.  Eligibility
and Awards.

 

5.1  Designation
of Participants.  Any Eligible
Person may be selected by the Committee to receive an Award and become a
Participant under the Plan in accordance with the Committee’s authority under
Section 3.2 hereof. In selecting Eligible Persons to be Participants, and
in determining the type and amount of Awards to be granted under the Plan, the
Committee shall consider any and all factors that it deems relevant or
appropriate.

 

5.2  Determination
of Awards.  The Committee
shall determine the terms and conditions of all Awards granted to Participants
in accordance with its authority under Section 3.2 hereof. An Award may
consist of one type of right or benefit hereunder or of two or more such rights
or benefits granted in tandem. The terms of all Awards under the Plan will be
specified by the Committee and will be set forth in individual Award Agreements
as described in Section 15.1 hereof.

 

6.  Stock
Options.

 

6.1  Grant of
Stock Options.  Stock Options
may be granted to any Eligible Person selected by the Committee, except that an
Incentive Stock Option may only be granted to an Eligible Person satisfying the
conditions of Section 6.7(a) hereof. Each Stock Option shall be
designated, in the discretion of the Committee, as an Incentive Stock Option or
as a Nonqualified Stock Option. The maximum number of shares of Common Stock
that may be subject to Stock Options granted to any Participant during any
calendar year shall be limited to 500,000 shares of Common Stock (subject to
adjustment as provided in Section 4.3 hereof). All Stock Options granted
under the Plan are intended to comply with the requirements for exemption under
Section 409A of the Code.

 

6.2  Exercise
Price.  The exercise price per
share of a Stock Option shall not be less than one hundred percent (100%) of
the Fair Market Value of a share of Common Stock on the Date of Grant.

 

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The Committee may, in its
discretion, specify an exercise price per share that is higher than the Fair
Market Value of a share of Common Stock on the Date of Grant.

 

6.3  Vesting of
Stock Options.  The Committee
shall, in its discretion, provide in an Award Agreement the time or times at
which, or the conditions upon which, a Stock Option or portion thereof shall
become vested and/or exercisable. The requirements for vesting and
exercisability of a Stock Option may be based on the continued Service of the
Participant for a specified time period (or periods), on the attainment of a
specified Performance Goal (or goals) or on such other terms and conditions as
approved by the Committee in its discretion. The Committee may accelerate the
vesting or exercisability of any Stock Option upon termination of Service under
certain circumstances, as set forth in the Award Agreement or otherwise. If the
vesting requirements of a Stock Option are not satisfied, the Award shall be
forfeited.

 

6.4  Term of Stock
Options.  The Committee shall,
in its discretion, provide in an Award Agreement the period during which a
vested Stock Option may be exercised, provided,
however, that the maximum term of
a Stock Option shall be ten (10) years from the Date of Grant. The Stock
Option of a Participant whose Service is terminated for any reason shall
terminate on the earlier of (A) the maximum term of the Stock Option or
(B) unless otherwise provided in an Award Agreement, except as otherwise
provided in Section 6.7(c) hereof with respect to Incentive Stock
Options, and except for termination for Cause (as described in
Section 14.2 hereof), the date that is one hundred eighty (180) days
following the termination of Service of the Participant.

 

6.5  Stock Option
Exercise.  Subject to such
terms and conditions as specified in an Award Agreement, a Stock Option may be
exercised in whole or in part at any time during the term thereof by notice in
the form required by the Company, together with payment of the aggregate
exercise price therefor and applicable withholding tax. Payment of the exercise
price shall be made in the manner set forth in the Award Agreement, and unless
otherwise provided by the Committee at the time of payment: (i) in cash or
by cash equivalent acceptable to the Committee, (ii) by payment in shares
of Common Stock valued at the Fair Market Value of such shares on the date of
exercise, (iii) through an open-market, broker-assisted sales transaction
pursuant to which the Company is promptly delivered the amount of proceeds
necessary to satisfy the exercise price, (iv) by a combination of the
methods described above or (v) by such other method as may be approved by
the Committee and set forth in the Award Agreement. In addition to, and at the
time of payment of the exercise price, a Stock Option shall be subject to
applicable tax withholding requirements as provided in Section 15.11
hereof.

 

6.6  Limited Transferability
of Nonqualified Stock Options. 
All Stock Options shall be nontransferable except (i) upon the
Participant’s death, in accordance with Section 15.3 hereof or
(ii) subject to prior approval by the Committee, in the case of
Nonqualified Stock Options only, for the transfer of all or part of the Stock
Option to a Participant’s “family member” (as defined for purposes of the
Form S-8 registration statement under the Securities Act), as may be
approved by the Committee, in its discretion, at the time of the proposed
transfer. The transfer of a Nonqualified Stock Option may be subject to such
terms and conditions as the Committee may, in its discretion, impose from time
to time. Subsequent transfers of a Nonqualified Stock Option shall be prohibited.

 

6.7  Additional Rules for
Incentive Stock Options.

 

(a)  Eligibility.  An Incentive Stock Option may only be granted
to an Eligible Person who is considered an employee for purposes of Treasury
Regulation §1.421-7(h) with respect to the Company or any Subsidiary that
qualifies as a “subsidiary corporation” with respect to the Company for
purposes of Section 424(f) of the Code.

 

(b)  Annual Limits.  No Incentive Stock Option shall be granted to
a Participant as a result of which the aggregate Fair Market Value (determined
as of the Date of Grant) of Common Stock with respect to which incentive stock
options under Section 422 of the Code are exercisable for the

 

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first
time in any calendar year under the Plan and any other stock option plans of
the Company or any subsidiary or parent corporation, would exceed $100,000,
determined in accordance with Section 422(d) of the Code. This
limitation shall be applied by taking stock options into account in the order in
which granted.

 

(c)  Termination of Employment.  An Award of an Incentive Stock Option may
provide that such Stock Option may be exercised not later than three
(3) months following termination of employment of the Participant with the
Company and all Subsidiaries, or not later than one (1) year following a
permanent and total disability within the meaning of Section 22(e)(3) of
the Code, as and to the extent determined by the Committee to comply with the
requirements of Section 422 of the Code.

 

(d)  Other Terms and
Conditions; Nontransferability. 
Any Incentive Stock Option granted hereunder shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan,
as are deemed necessary or desirable by the Committee, which terms, together
with the terms of the Plan, shall be intended and interpreted to cause such
Incentive Stock Option to qualify as an “incentive stock option” under
Section 422 of the Code. An Award Agreement for an Incentive Stock Option
may provide that such Stock Option shall be treated as a Nonqualified Stock
Option to the extent that certain requirements applicable to “incentive stock
options” under the Code shall not be satisfied. An Incentive Stock Option shall
by its terms be nontransferable other than by will or by the laws of descent
and distribution, and shall be exercisable during the lifetime of a Participant
only by such Participant.

 

(e)  Disqualifying
Dispositions.  If shares of
Common Stock acquired by exercise of an Incentive Stock Option are disposed of
within two (2) years following the Date of Grant or one (1) year
following the transfer of such shares to the Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Company may reasonably require.

 

6.8  Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 4.3 hereof,
without the prior approval of the Company’s shareholders, neither the Committee
nor the Board shall cause the cancellation, substitution or amendment of a
Stock Option that would have the effect of reducing the exercise price of such
a Stock Option previously granted under the Plan, or otherwise approve any
modification to such a Stock Option that would be treated as a “repricing”
under the then applicable rules, regulations or listing requirements adopted by
the NASDAQ Stock Market or other principal exchange on which the Common Stock
is then listed.

 

7.  Stock
Appreciation Rights.

 

7.1  Grant of
Stock Appreciation Rights. 
Stock Appreciation Rights may be granted to any Eligible Person selected
by the Committee. Stock Appreciation Rights may be granted on a basis that
allows for the exercise of the right by the Participant or that provides for
the automatic payment of the right upon a specified date or event. The maximum
number of shares of Common Stock that may be subject to Stock Appreciation
Rights granted to any Participant during any calendar year shall be limited to
500,000 shares of Common Stock (subject to adjustment as provided in
Section 4.3 hereof). Stock Appreciation Rights shall be non-transferable,
except as provided in Section 15.3 hereof. All Stock Appreciation Rights
granted under the Plan are intended to comply with the requirements for
exemption under Section 409A of the Code. A Stock Appreciation Right may,
in the discretion of the Committee, be granted in tandem with a Stock Option,
and in such event, shall (i) have a base price per share equal to the per
share exercise price of the Stock Option, (ii) be vested and exercisable
at the same time or times that a related Stock Option is vested and
exercisable, and (iii) expire no later than the time at which the related
Stock Option expires.

 

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7.2  Base Price.  The base price of a Stock Appreciation Right
shall not be less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock on the Date of Grant. The Committee may, in its
discretion, specify a base price per share that is higher than the Fair Market
Value of a share of Common Stock on the Date of Grant.

 

7.3  Vesting of
Stock Appreciation Rights. 
The Committee shall, in its discretion, provide in an Award Agreement
the time or times at which, or the conditions upon which, a Stock Appreciation
Right or portion thereof shall become vested and/or exercisable. The
requirements for vesting and exercisability of a Stock Appreciation Right may be
based on the continued Service of a Participant for a specified time period (or
periods), on the attainment of a specified Performance Goal (or goals) or on
such other terms and conditions as approved by the Committee in its discretion.
The Committee may accelerate the vesting or exercisability of any Stock
Appreciation Right upon termination of Service under certain circumstances as
set forth in the Award Agreement or otherwise. If the vesting requirements of a
Stock Appreciation Right are not satisfied, the Award shall be forfeited.

 

7.4  Term of Stock
Appreciation Rights.  The
Committee shall, in its discretion, provide in an Award Agreement the period
during which a vested Stock Appreciation Right may be exercisable or payable, provided, however,
that the maximum term of a Stock Appreciation Right shall be ten
(10) years from the Date of Grant. The Stock Appreciation Right of a
Participant whose Service is terminated for any reason shall terminate on the
earlier of (A) the maximum term of the Stock Appreciation Right or
(B) unless otherwise provided in an Award Agreement, and except for
termination for Cause (as described in Section 14.2 hereof), the date that
is one hundred eighty (180) days following the termination of Service of
the Participant.

 

7.5  Payment of
Stock Appreciation Rights. 
Subject to such terms and conditions as specified in an Award Agreement,
a Stock Appreciation Right will entitle the holder, upon exercise or other
payment of the Stock Appreciation Right, as applicable, to receive an amount
determined by multiplying: (i) the excess of the Fair Market Value of a
share of Common Stock on the date of exercise or payment of the Stock
Appreciation Right over the base price of such Stock Appreciation Right, by
(ii) the number of shares as to which such Stock Appreciation Right is
exercised or paid. Payment of the amount determined under the foregoing may be
made, as approved by the Committee and set forth in the Award Agreement, in
shares of Common Stock valued at their Fair Market Value on the date of
exercise or payment, in cash, or in a combination of shares of Common Stock and
cash, subject to applicable tax withholding requirements as provided in
Section 15.11 hereof.

 

7.6  Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 4.3 hereof,
without the prior approval of the Company’s shareholders, neither the Committee
nor the Board shall cause the cancellation, substitution or amendment of a
Stock Appreciation Right that would have the effect of reducing the base price
of such a Stock Appreciation Right previously granted under the Plan, or
otherwise approve any modification to such Stock Appreciation Right that would
be treated as a “repricing” under the then applicable rules, regulations or
listing requirements adopted by the NASDAQ Stock Market or other principal
exchange on which the Common Stock is then listed.

 

8.  Restricted
Stock Awards.

 

8.1  Grant of
Restricted Stock Awards.  A
Restricted Stock Award may be granted to any Eligible Person selected by the
Committee. The maximum number of shares of Common Stock that may be subject to
Restricted Stock Awards granted to a Participant during any one calendar year
shall be limited to 500,000 shares of Common Stock (subject to adjustment as
provided in Section 4.3 hereof). The Committee may require the payment by
the Participant of a specified purchase price in connection with any Restricted
Stock Award.

 

7

 

8.2  Vesting
Requirements.  The
restrictions imposed on shares granted under a Restricted Stock Award shall
lapse in accordance with the vesting requirements specified by the Committee in
the Award Agreement. The requirements for vesting of a Restricted Stock Award
may be based on the continued Service of the Participant for a specified time
period (or periods), on the attainment of a specified Performance Goal (or
goals) designed to meet the requirements for exemption under Section 162(m) of
the Code or on such other terms and conditions as approved by the Committee in
its discretion. The Committee may accelerate the vesting of a Restricted Stock
Award upon termination of Service under certain circumstances, as set forth in
the Award Agreement. If the vesting requirements of a Restricted Stock Award shall
not be satisfied, the Award shall be forfeited and the shares of Common Stock
subject to the Award shall be returned to the Company.

 

8.3  Transfer
Restrictions.  Shares granted
under any Restricted Stock Award may not be transferred, assigned or subject to
any encumbrance, pledge, or charge until all applicable restrictions are
removed or have expired, unless otherwise allowed by the Committee. Failure to
satisfy any applicable restrictions shall result in the subject shares of the
Restricted Stock Award being forfeited and returned to the Company. The
Committee may require in an Award Agreement that certificates representing the
shares granted under a Restricted Stock Award bear a legend making appropriate
reference to the restrictions imposed, and that certificates representing the
shares granted or sold under a Restricted Stock Award will remain in the
physical custody of an escrow holder until all restrictions are removed or have
expired.

 

8.4  Rights as
Shareholder.  Subject to the
foregoing provisions of this Section 8 and the applicable Award Agreement,
unless otherwise determined by the Committee, the Participant shall have all
rights of a shareholder with respect to the shares granted to the Participant
under a Restricted Stock Award, including the right to vote the shares and
receive all dividends and other distributions paid or made with respect
thereto. Any Common Stock received as a stock dividend or distribution will be
subject to the same restrictions as the underlying Restricted Stock Award.

 

8.5 
Section 83(b) Election.  If a Participant makes an election pursuant
to Section 83(b) of the Code with respect to a Restricted Stock
Award, the Participant shall file, within thirty (30) days following the
Date of Grant, a copy of such election with the Company and with the Internal
Revenue Service, in accordance with the regulations under Section 83 of
the Code. The Committee may provide in an Award Agreement that the Restricted
Stock Award is conditioned upon the Participant’s making an election with
respect to the Award under Section 83(b) of the Code.

 

9.  Restricted
Stock Units.

 

9.1  Grant of
Restricted Stock Units.  A
Restricted Stock Unit may be granted to any Eligible Person selected by the
Committee. The maximum number of units that may be subject to Restricted Stock
Units granted to a Participant during any one calendar year shall be limited to
500,000 units (subject to adjustment as provided in Section 4.3 hereof).
The value of each Restricted Stock Unit is equal to the Fair Market Value of
one share of Common Stock on the applicable date or time period of
determination, as specified by the Committee. Restricted Stock Units shall be
subject to such restrictions and conditions as the Committee shall determine.

 

9.2  Vesting of
Restricted Stock Units.  On
the Date of Grant, the Committee shall, in its discretion, determine any
vesting requirements with respect to Restricted Stock Units, which shall be set
forth in the Award Agreement. The requirements for vesting of a Restricted
Stock Unit may be based on the continued Service of the Participant for a
specified time period (or periods), on the attainment of a specified
Performance Goal (or goals) designed to meet the requirements for exemption
under Section 162(m) of the Code or on such other terms and
conditions as approved by the Committee in its discretion. The Committee may
accelerate the vesting of a Restricted Stock Unit upon termination of Service
under certain circumstances, as set forth in the Award Agreement.

 

8

 

 

9.3  Payment of
Restricted Stock Units. 
Restricted Stock Units shall become payable to a Participant at the time
or times determined by the Committee and set forth in the Award Agreement,
which may be upon or following the vesting of the Award. Payment of a
Restricted Stock Unit may be made, as approved by the Committee and set forth
in the Award Agreement, in cash or in shares of Common Stock, or in a
combination thereof, subject to applicable tax withholding requirements as
provided in Section 15.11 hereof. Any cash payment of a Restricted Stock
Unit shall be made based upon the Fair Market Value of the Common Stock,
determined on such date or over such time period as determined by the Committee
in its discretion.

 

9.4  Dividend
Equivalent Rights.  Restricted
Stock Units may be granted together with a dividend equivalent right with
respect to the shares of Common Stock subject to the Award, which may be
accumulated and may be deemed reinvested in additional Restricted Stock Units
or may be accumulated in cash, as determined by the Committee in its
discretion, and will be paid at the time the underlying Restricted Stock Unit
is payable. Dividend equivalent rights shall be subject to forfeiture under the
same conditions as apply to the underlying Restricted Stock Units.

 

9.5  No Rights as
Shareholder.  The Participant
shall not have any rights as a shareholder with respect to the shares of Common
Stock subject to a Restricted Stock Unit until such time as such shares are
delivered to the Participant pursuant to the terms of the Award Agreement.

 

10.  Cash-Based
Performance Awards.

 

10.1  Grant of
Cash-Based Performance Awards. 
A Cash-Based Performance Award may be granted to any Eligible Person
selected by the Committee. The maximum amount of cash compensation that may be
paid to a Participant during any one calendar year under Cash-Based Performance
Awards shall be $1,000,000.

 

10.2  Vesting of
Cash-Based Performance Awards. 
Each Cash-Based Performance Award shall be evidenced by an Award
Agreement that shall specify the performance period, and such other terms and
conditions as the Committee, in its discretion, shall determine. Payment
amounts may be based on the achievement of specified levels of performance with
respect to a performance goal (or goals), including, if applicable, specified
threshold, target and maximum performance levels. The requirements for vesting
may also be based upon the continued Service of the Participant or on such
other conditions as determined by the Committee and set forth in an Award
Agreement. The Committee may accelerate the vesting of a Cash-Based Performance
Award upon termination of Service under certain circumstances, as set forth in
the Award Agreement.

 

10.3  Payment of
Cash-Based Performance Awards. 
Payment of Cash-Based Performance Awards will be made as soon as
practicable, but not later than sixty (60) days, after the expiration of
the applicable performance period. Payment of the Cash-Based Performance Awards
may be made in cash or in shares of Common Stock, or in a combination thereof,
subject to applicable tax withholding requirements as provided in
Section 15.11 hereof. Any payment of a Cash-Based Performance Award in
Common Stock shall be made based upon the Fair Market Value thereof.

 

11.  Stock Awards.

 

11.1  Grant of
Stock Awards.  A Stock Award
may be granted to any Eligible Person selected by the Committee. A Stock Award
may be granted for past services, in lieu of bonus or other cash compensation,
as compensation for Non-Employee Directors or for any other valid purpose as
determined by the Committee. The Committee shall determine the terms and
conditions of such Awards, and such Awards may be made without vesting
requirements. In addition, the Committee may, in connection with any Stock
Award, require the payment of a specified purchase price. The maximum number of
shares of Common Stock that may be subject to Stock Awards granted to a
Participant during any one calendar year shall be limited to 100,000 shares
(subject to adjustment as provided in Section 4.3 hereof).

 

9

 

11.2  Rights as
Shareholder.  Subject to the
foregoing provisions of this Section 11 and the applicable Award
Agreement, upon the issuance of Common Stock under a Stock Award, the
Participant shall have all rights of a shareholder with respect to the shares
of Common Stock, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto.

 

12. 
Section 162(m) Awards.

 

12.1  Awards.  Awards of Stock Options and Stock
Appreciation Rights are intended by their design pursuant to the terms of the
Plan to qualify for the performance-based compensation exception under
Section 162(m) of the Code and the regulations promulgated
thereunder. Restricted Stock Awards, Restricted Stock Units, Cash-Based
Performance Awards and Stock Awards may qualify for such exception if the
Awards are granted or become payable or vested based upon pre-established
performance goals in accordance with this Section 12.

 

12.2  Performance
Criteria.  In the case of a
Restricted Stock Award, Restricted Stock Units, Cash-Based Performance Award or
Stock Award that is intended to qualify for the performance-based compensation
exception under Section 162(m) of the Code, the performance criteria
upon which the grant, payment or vesting may be based shall be limited to one
or more of the following performance measures, which may be applied on a
Company-wide, departmental, or individual basis, or any other basis determined
by the Committee in its discretion: 1) net earnings; 2) earnings per
share; 3) dividend ratio; 4) net sales growth; 5) income or net
income (before taxes); 6) operating profit or net operating profit;
7) return measures (including, but not limited to, return on assets,
capital, equity or sales); 8) cash flow (including, but not limited to,
operating cash flow, cash from operations and free cash flow); 9) earnings
before or after taxes, interest, depreciation and/or amortization;
10) share price (including, but not limited to growth measures and total
shareholder return); 11) expense targets; 12) customer satisfaction;
13) market share; 14) economic value added; 15) the formation of
joint ventures or the completion of other corporate transactions;
16) market capitalization; 17) debt leverage (debt to capital);
18) operating income or net operating income; 19) operating margin or
profit margin; 20) return on operating revenue; 21) operating ratio;
22) integration and/or penetration of the market; and/or 23) any
combination of or a specified increase in any of the foregoing. The Committee
may adjust, change, or eliminate the performance goals or the applicable
performance period of the Award as it deems appropriate, in its discretion. The
foregoing performance measures may be determined on an absolute basis or
relative to internal goals or relative to levels attained in prior years, or
related to other companies or indices, or as ratios expressing relationships
between two or more performance measures.

 

12.3 
Section 162(m) Requirements.  For purposes of qualifying Awards as
performance-based compensation under Section 162(m) of the Code, the
performance goals shall be set by the Committee on or before the latest date
permissible to enable the Awards to so qualify. In granting such Awards, the
Committee shall (i) interpret this Plan in a manner consistent with
Section 162(m) of the Code; (ii) have no discretion to adjust
any performance goal in any way that would adversely affect the treatment of
the Award under Section 162(m) of the Code; and (iii) certify
that the performance goals applicable to the Award are met before any payment
with respect to such Award. With respect to any Awards intended to comply with
the requirements of Section 162(m) of the Code, adjustments to performance
goals shall only be made to the extent consistent with Section 162(m) of
the Code, and the Committee may appropriately adjust any evaluation of
performance under a performance goal to exclude any of the following events
that occurs during a performance period, to the extent consistent with
Section 162(m) of the Code: (i) asset write-downs,
(ii) litigation, claims, judgments or settlements, (iii) the effect
of changes in tax law, accounting principles or other such laws or provisions
affecting reported results, (iv) mergers, acquisitions and divestitures,
(v) accruals for reorganization and restructuring programs and
(vi) any extraordinary, unusual or non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s
discussion and analysis of

 

10

 

financial condition and
results of operations appearing in the Company’s Forms 10-K or 10-Q for
the applicable year. At the discretion of the Board, for purposes of compliance
with Section 162(m) of the Code, the performance goals shall be
subject to re-approval by the Company’s shareholders no later than the first
shareholder meeting that occurs in the year following the fifth (5th) anniversary of the date on
which the Plan first becomes effective.

 

13.  Change in
Control.

 

13.1  Effect of
Change in Control.  In the
event of a Change in Control, all Awards then-outstanding under the Plan shall
fully vest, and shall, as applicable, be fully exercisable as of, or paid out
on, the date of the Change in Control. With respect to any Award the vesting of
which is subject to the attainment of performance goals, upon a Change in
Control, payout of cash or securities under such Award shall be determined as
if the performance goals were achieved at the target level of performance.

 

13.2  Definition of
Change in Control.  For
purposes of the Plan, unless otherwise defined in an Award Agreement, “Change in Control” shall mean: (i) a
change in ownership of the Company under paragraph (a) below, or
(ii) a change in effective control of the Company under paragraph (b) below,
or (iii) a change in the ownership of a substantial portion of the assets
of the Company under paragraph (c) below.

 

(a)  Change in the Ownership of
the Company.  A change in the
ownership of the Company shall occur on the date that any one person, or more
than one person acting as a group (as defined in paragraph (d)), acquires
ownership of stock of the Company that, together with stock held by such person
or group, constitutes more than 50 percent of the total fair market value
or total voting power of the stock of the Company. However, if any one person
or more than one person acting as a group, is considered to own more than
50 percent of the total fair market value or total voting power of the
stock of the Company, the acquisition of additional stock by the same person or
persons is not considered to cause a change in the ownership of the Company (or
to cause a change in the effective control of the corporation (within the
meaning of paragraph (b) below)). An increase in the percentage of
stock owned by any one person, or persons acting as a group, as a result of a
transaction in which the Company acquires its stock in exchange for property
will be treated as an acquisition of stock for purposes of this section. This
paragraph (a) applies only when there is a transfer of stock of the
Company and stock in the Company remains outstanding after the transaction.

 

(b)  Change in the Effective
Control of the Company.  A
change in the effective control of the Company shall occur on the date that
either (i) any one person or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Company possessing 30 percent or more of the total voting power of the
stock of the Company; or (ii) a majority of members of the Board is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board prior to the date of
the appointment or election.

 

(c)  Change in the Ownership of
a Substantial Portion of the Company’s Assets.  A change in the ownership of a substantial
portion of the Company’s assets shall occur on the date that any one person, or
more than one person acting as a group (as defined in paragraph (d) below),
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40 percent of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets. There is no

 

11

 

Change
in Control event under this paragraph (c) when there is a transfer to
an entity that is controlled by the shareholders of the transferring
corporation immediately after the transfer. A transfer of assets by the Company
is not treated as a change in the ownership of such assets if the assets are
transferred to (i) a shareholder of the Company (immediately before the
asset transfer) in exchange for or with respect to its stock, (ii) an
entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the Company, (iii) a person, or more
than one person acting as a group, that owns, directly or indirectly,
50 percent or more of the total value or voting power of all the
outstanding stock of the Company, or (iv) an entity, at least
50 percent of the total value or voting power of which is owned, directly
or indirectly, by a person described in paragraph (d). For purposes of
this paragraph (c), a person’s status is determined immediately after the
transfer of the assets.

 

(d)  Persons Acting As a Group.  For the purposes of paragraphs (a), (b),
and (c), persons will not be considered to be acting as a group solely because
they purchase or own assets or stock of the same corporation at the same time,
or as a result of the same public offering. However, persons will be considered
to be acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of assets or stock, or similar
business transaction with the corporation. If a person, including an entity,
owns stock in both corporations that enter into a merger, consolidation,
purchase or acquisition of assets or stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation only with respect to the ownership in that corporation before the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

(e)   Each of the sub-paragraphs (a) through
(d) above shall be construed and interpreted consistent with the
requirements of Section 409A of the Code and the regulations thereunder.

 

14.  Forfeiture
Events.

 

14.1  General.  The Committee may specify in an Award
Agreement at the time of the Award that the Participant’s rights, payments and
benefits with respect to an Award shall be subject to reduction, cancellation,
forfeiture or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an
Award. Such events shall include, but shall not be limited to, termination of
Service for Cause, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by
the Participant that is materially detrimental to the business or reputation of
the Company.

 

14.2  Termination
for Cause.

 

(a)  General.  Unless otherwise provided by the Committee
and set forth in an Award Agreement, if a Participant’s Service is terminated
for Cause, such Participant’s rights, payments and benefits with respect to an
Award shall be subject to cancellation, forfeiture and/or recoupment. The
Company shall have the power to determine whether the Participant has been
terminated for Cause and the date upon which such termination for Cause occurs.
Any such determination shall be final, conclusive and binding upon the
Participant. In addition, if the Company shall reasonably determine that a
Participant has committed or may have committed any act which could constitute
the basis for a termination of such Participant’s employment for Cause, the
Committee may, subject to compliance with Section 409A of the Code and the
regulations thereunder, suspend the Participant’s rights to exercise any
option, receive any payment or vest in any right with respect to any Award
pending a determination by the Company of whether an act has been committed
which could constitute the basis for a termination for “Cause” as provided in
this Section 14.2.

 

(b)  Definition of “Cause”.  For purposes of the Plan, unless otherwise
defined in an Award Agreement, “Cause” means the Participant’s termination of
Service due to: (i) persistent neglect or

 

12

 

negligence
in the performance of the Participant’s Service duties; (ii) conviction
(including pleas of guilty or no contest) for any act of fraud,
misappropriation or embezzlement, or for any criminal offense related to the
Participant’s Service; (iii) any deliberate and material breach of
fiduciary duty to the Company or other conduct that leads to the material
damage or prejudice of the Company, or (iv) a material breach of an
essential Company policy, such as the Company’s code of conduct.

 

15.  General
Provisions.

 

15.1  Award
Agreement.  To the extent deemed
necessary by the Committee, an Award under the Plan shall be evidenced by an
Award Agreement in a written or electronic form approved by the Committee
setting forth the number of shares of Common Stock, units or other rights
subject to the Award, the exercise price, base price, or purchase price of the
Award, the time or times at which an Award will become vested, exercisable or
payable and the term of the Award. The Award Agreement may also set forth the
effect on an Award of a Change in Control or a termination of Service under
certain circumstances. The Award Agreement shall be subject to and incorporate,
by reference or otherwise, all of the applicable terms and conditions of the
Plan, and may also set forth other terms and conditions applicable to the Award
as determined by the Committee consistent with the limitations of the Plan. The
grant of an Award under the Plan shall not confer any rights upon the
Participant holding such Award other than such terms, and subject to such
conditions, as are specified in the Plan as being applicable to such type of
Award (or to all Awards) or as are expressly set forth in the Award Agreement.
An Award Agreement may be in the form of an agreement to be executed by both
the Participant and the Company (or an authorized representative of the
Company) or certificates, notices or similar instruments as approved by the
Committee. The Committee need not require the execution of an Award Agreement
by a Participant, in which case, acceptance of the Award by the Participant shall
constitute agreement by the Participant to the terms, conditions, restrictions
and limitations set forth in the Plan and the Award Agreement as well as any
administrative guidelines of the Company in effect from time to time.

 

15.2 
Determinations of Service. 
The Committee shall make all determinations relating to the Service of a
Participant with the Company or any Subsidiary in connection with an Award,
including with respect to the continuation, suspension or termination of such
Service. A Participant’s Service shall not be deemed terminated if the
Committee determines that (i) a transition of employment to service with a
partnership, joint venture or corporation not meeting the requirements of a
Subsidiary in which the Company or a Subsidiary is a party is not considered a
termination of Service, or (ii) the Participant transfers between service
as an employee and that of a Non-Employee Director (or vice versa). The
Committee may determine whether any corporate transaction, such as a sale or spin-off
of a division or subsidiary that employs a Participant, shall be deemed to
result in a termination of Service for purposes of any affected Awards, and the
Committee’s decision shall be final and binding.

 

15.3  No Assignment
or Transfer; Beneficiaries.  Except
as provided in Section 6.6 hereof, Awards under the Plan shall not be
assignable or transferable by the Participant, and shall not be subject in any
manner to assignment, alienation, pledge, encumbrance or charge.
Notwithstanding the foregoing, in the event of the death of a Participant while
employed by the Company or any of its Subsidiaries, except as otherwise
provided by the Committee in an Award Agreement, an outstanding Award may be
exercised by or shall become payable to the Participant’s beneficiary as
designated by the Participant in the manner prescribed by the Committee or, in
the absence of an authorized beneficiary designation, by the legatee or
legatees of such Award under the Participant’s last will, or by such
Participant’s executors, personal representatives or distributees of such Award
in accordance with the Participant’s will or the laws of descent and
distribution. The Committee may provide in the terms of an Award Agreement or
in any other manner prescribed by the Committee that the Participant shall have
the right to designate a beneficiary or beneficiaries who shall be entitled to
any rights, payments or other benefits specified under an Award following the
Participant’s death.

 

13

 

15.4  Deferrals of
Payment.  The Committee may,
in its discretion, permit a Participant to defer the receipt of payment of cash
or delivery of shares of Common Stock that would otherwise be due to the
Participant by virtue of the exercise of a right or the satisfaction of vesting
or other conditions with respect to an Award, provided,
however, that such discretion
shall not apply in the case of a Stock Option or Stock Appreciation Right. If
any such deferral is to be permitted by the Committee, the Committee shall
establish rules and procedures relating to such deferral in a manner
intended to comply with the requirements of Section 409A of the Code,
including, without limitation, the time when an election to defer may be made,
the time period of the deferral and the events that would result in payment of
the deferred amount, the interest or other earnings attributable to the
deferral and the method of funding, if any, attributable to the deferred
amount.

 

15.5  No Right to
Continued Service.  Nothing in
the Plan, in the grant of any Award or in any Award Agreement shall confer upon
any Eligible Person or any Participant any right to continue in the Service of
the Company or any of its Subsidiaries, or interfere in any way with the right
of the Company or any of its Subsidiaries to terminate the employment or other
service relationship of an Eligible Person or a Participant for any reason at
any time.

 

15.6  Rights as
Shareholder.  A Participant
shall have no rights as a holder of shares of Common Stock with respect to any
unissued securities covered by an Award until the date the Participant becomes
the holder of record of such securities. Except as provided in Section 4.3
hereof, no adjustment or other provision shall be made for dividends or other
shareholder rights, except to the extent that the Award Agreement provides for
dividend payments or dividend equivalent rights. The Committee may determine,
in its discretion, the manner of delivery of Common Stock to be issued under
the Plan, which may be by delivery of stock certificates, electronic account
entry into new or existing accounts or any other means as the Committee, in its
discretion, deems appropriate. The Committee may require that the stock
certificates be held in escrow by the Company for any shares of Common Stock or
cause the shares to be legended in order to comply with the securities laws or
other applicable restrictions, or should the shares of Common Stock be
represented by book or electronic account entry rather than a certificate, the
Committee may take such steps to restrict transfer of the shares of Common
Stock as the Committee considers necessary or advisable.

 

15.7 
Section 409A Compliance. 
To the extent applicable, it is intended that the Plan and all Awards
hereunder comply with the requirements of Section 409A of the Code and the
regulations and other guidance issued thereunder, and that the Plan and all
Award Agreements shall be interpreted and applied by the Committee in a manner
consistent with this intent in order to avoid the imposition of any additional
tax under Section 409A of the Code. In the event that any provision of the
Plan or an Award Agreement is determined by the Committee to not comply with
the applicable requirements of Section 409A of the Code and the regulations
and other guidance issued thereunder, the Committee shall have the authority to
take such actions and to make such changes to the Plan or an Award Agreement as
the Committee deems necessary to comply with such requirements, provided that
no such action shall adversely affect any outstanding Award without the consent
of the affected Participant. No payment that constitutes deferred compensation
under Section 409A of the Code that would otherwise be made under the Plan
or an Award Agreement upon a termination of Service will be made or provided
unless and until such termination is also a “separation from service,” as
determined in accordance with Section 409A of the Code. Notwithstanding
the foregoing or anything elsewhere in the Plan or an Award Agreement to the
contrary, if a Participant is a “specified employee” as defined in
Section 409A of the Code at the time of termination of Service with
respect to an Award, then solely to the extent necessary to avoid the
imposition of any additional tax under Section 409A of the Code, the
commencement of any payments or benefits under the Award shall be deferred
until the date that is six months following the Participant’s termination of
Service (or such other period as required to comply with Section 409A). In
no event whatsoever shall the Company be

 

14

 

liable for any additional
tax, interest or penalties that may be imposed on a Participant by
Section 409A of the Code or any damages for failing to comply with
Section 409A of the Code.

 

15.8  Securities
Law Compliance.  No shares of
Common Stock will be issued or transferred pursuant to an Award unless and
until all then applicable requirements imposed by Federal and state securities
and other laws, rules and regulations and by any regulatory agencies
having jurisdiction, and by any exchanges upon which the shares of Common Stock
may be listed, have been fully met. As a condition precedent to the issuance of
shares pursuant to the grant or exercise of an Award, the Company may require
the Participant to take any reasonable action to meet such requirements. The
Committee may impose such conditions on any shares of Common Stock issuable
under the Plan as it may deem advisable, including, without limitation,
restrictions under the Securities Act, under the requirements of any exchange
upon which such shares of the same class are then listed, and under any blue
sky or other securities laws applicable to such shares. The Committee may also
require the Participant to represent and warrant at the time of issuance or
transfer that the shares of Common Stock are being acquired only for investment
purposes and without any current intention to sell or distribute such shares.

 

15.9  Non-United
States Participants and Jurisdictions.  Notwithstanding any provision in the Plan to
the contrary, in order to foster and promote achievement of the purposes of the
Plan or to comply with provisions of laws in other countries in which the
Company operates or has employees, the Committee, in its discretion, shall have
the power and authority, to the extent not inconsistent with the intent of the
Plan, to (i) determine which Eligible Persons who are foreign nationals or
who are employed outside of the United States are eligible to participate in the
Plan, (ii) modify the terms and conditions of any Awards made to such
Eligible Persons, and (iii) establish subplans and modify exercise and
payment procedures and other Award terms and procedures to the extent such
actions may be necessary or advisable to comply with any tax, securities,
regulatory or other laws of other jurisdictions with respect to Awards that may
be subject to such laws. Moreover, the Committee may approve such supplements
to or amendments, restatements or alternative versions of the Plan, not
inconsistent with the intent of the Plan, as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of the Plan
as in effect for any other purpose.

 

15.10  Substitute
Awards in Corporate Transactions. 
Nothing contained in the Plan shall be construed to limit the right of
the Committee to grant Awards under the Plan in connection with the
acquisition, whether by purchase, merger, consolidation or other corporate
transaction, of the business or assets of any corporation or other entity.
Without limiting the foregoing, the Committee may grant Awards under the Plan
to an employee or director of another corporation who becomes an Eligible
Person by reason of any such corporate transaction in substitution for awards previously
granted by such corporation or entity to such person. The terms and conditions
of the substitute Awards may vary from the terms and conditions that would
otherwise be required by the Plan solely to the extent the Committee deems
necessary for such purpose.

 

15.11  Tax
Withholding.  The Participant
shall be responsible for payment of any taxes or similar charges required by
law to be paid or withheld from an Award or an amount paid in satisfaction of
an Award. Any required withholdings shall be paid or, in the discretion of the
Committee, otherwise satisfied (including, without limitation, by reduction of
the number of shares of Common Stock subject to the Award), by the Participant
on or prior to the payment or other event that results in taxable income in
respect of an Award. The Award Agreement may specify the manner in which the
withholding obligation shall be satisfied with respect to the particular type
of Award.

 

15.12  Unfunded
Plan.  The adoption of the
Plan and any reservation of shares of Stock or cash amounts by the Company to
discharge its obligations hereunder shall not be deemed to create a trust or
other funded arrangement. Except upon the issuance of Common Stock pursuant to
an Award, any rights of a Participant under the Plan shall be those of a
general unsecured creditor of the Company,

 

15

 

and neither a Participant
nor the Participant’s permitted transferees or estate shall have any other
interest in any assets of the Company by virtue of the Plan. Notwithstanding
the foregoing, the Company shall have the right to implement or set aside funds
in a grantor trust, subject to the claims of the Company’s creditors or
otherwise, to discharge its obligations under the Plan.

 

15.13  Other Compensation
and Benefit Plans.  The
adoption of the Plan shall not affect any other share incentive or other
compensation plans in effect for the Company or any Subsidiary, nor shall the
Plan preclude the Company from establishing any other forms of share incentive
or other compensation or benefit program for employees of the Company or any
Subsidiary. The amount of any compensation deemed to be received by a
Participant pursuant to an Award shall not constitute includable compensation
for purposes of determining the amount of benefits to which a Participant is
entitled under any other compensation or benefit plan or program of the Company
or a Subsidiary, including, without limitation, under any pension or severance
benefits plan, except to the extent specifically provided by the terms of any
such plan.

 

15.14  Plan Binding
on Transferees.  The Plan
shall be binding upon the Company, its successors, transferees and assigns, and
the Participant, the Participant’s executor, administrator and permitted
transferees and beneficiaries.

 

15.15  Severability.  If any provision of the Plan or any Award
Agreement shall be determined to be illegal or unenforceable by any court of
law in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.

 

15.16  Governing
Law.  The Plan and all rights
hereunder shall be subject to and interpreted in accordance with the laws of
the State of Delaware, without reference to the principles of conflicts of
laws, and to applicable Federal securities laws.

 

16.  Term;
Amendment and Termination.

 

16.1  Term.  The Plan was adopted by the Board on
May 19, 2010, and shall be subject to approval by a majority of the votes
present in person or by proxy and entitled to vote thereon at the next duly
held meeting of the Company’s shareholders at which a quorum is present. The
Plan shall be effective as of the Effective Date and shall automatically
terminate on ten years from its adoption by the Board, unless sooner terminated
in accordance with Section 16.2 hereof.

 

16.2  Amendment and
Termination.  The Board may
from time to time and in any respect, amend, modify, suspend or terminate the
Plan. Notwithstanding the foregoing, no amendment, modification, suspension or
termination of the Plan shall adversely affect any Award theretofore granted
without the consent of the Participant or the permitted transferee of the
Award. The Board may seek the approval of any amendment, modification,
suspension or termination by the Company’s shareholders to the extent it deems
necessary or advisable in its discretion for purposes of compliance with
Section 162(m) or Section 422 of the Code, the listing
requirements of the NASDAQ Stock Market, New York Stock Exchange, or other
exchange or securities market or for any other purpose.

 

16

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