Document:

Exhibit

UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION

	
			
	 
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	In the Matter of
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	File No. 191-0074

	Aaron's Inc.,
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	a corporation.
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AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission (“Commission”) has initiated an investigation of certain acts and practices of Aaron’s Inc. (“Aaron’s” or “Proposed Respondent”), Rent- A-Center, Inc., and Buddy’s Newco, LLC. The Commission’s Bureau of Competition has prepared a draft administrative complaint (“Draft Complaint”). The Bureau of Competition and Proposed Respondent enter into this Agreement Containing Consent Order (“Consent Agreement”) to cease and desist from engaging in such anticompetitive practices to resolve the allegations in the Draft Complaint through a proposed Decision and Order (“Decision and Order”), both of which are attached, to present to the Commission.

IT IS HEREBY AGREED by and between Proposed Respondent, by its duly authorized officers and attorneys, and counsel for the Commission that:

		
	1.
	Proposed Respondent Aaron’s, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Georgia, with its headquarters and principal place of business located at 400 Galleria Parkway SE, Suite 300, Atlanta, Georgia.

		
	2.
	Proposed Respondent admits all the jurisdictional facts set forth in the Draft Complaint.

		
	3.
	Proposed Respondent waives:

		
	a.
	any further procedural steps;

		
	b.
	the requirement that the Decision and Order contain a statement of findings of fact and conclusions of law;

		
	c.
	all rights to seek judicial review or otherwise to challenge or contest the validity of the Decision and Order entered pursuant to this Consent Agreement; and

		
	d.
	any claim under the Equal Access to Justice Act.

		
	4.
	This Consent Agreement is for settlement purposes only and does not constitute an admission by Proposed Respondent that the law has been violated as alleged in the 

Draft Complaint, or that the facts as alleged in the Draft Complaint, other than jurisdictional facts, are true.

		
	5.
	Proposed Respondent shall submit an initial compliance report, pursuant to Commission Rule 2.33, 16 C.F.R. § 2.33, no later than 60 days after the date on which Proposed Respondent executes this Consent Agreement and subsequent compliance reports every 30 days thereafter until the Decision and Order becomes final. After the Decision and Order becomes final, the reporting obligations contained in the Decision and Order shall control and the reporting obligations under this Consent Agreement shall cease. Each compliance report shall set forth in detail the manner in which Proposed Respondent has complied, has prepared to comply, is complying, and will comply with the Consent Agreement and the Decision and Order. Proposed Respondent shall provide sufficient information and documentation to enable the Commission to determine independently whether Proposed Respondent is in compliance with the Consent Agreement and the Decision and Order.

		
	6.
	Each compliance report submitted pursuant to Paragraph 5 shall be verified in the manner set forth in 28 U.S.C. § 1746 by the Chief Executive Officer or another officer or employee specifically authorized to perform this function. Commission Rule 2.41(a), 16 C.F.R. § 2.41(a), requires that the Commission receive an original and 2 copies of each compliance report. Proposed Respondent shall file a paper original of each compliance report with the Secretary of the Commission and electronic copies of each compliance report with the Secretary at ElectronicFilings@ftc.gov, and with the Compliance Division at bccompliance@ftc.gov. In addition, Proposed Respondent shall provide a copy of each compliance report to the Monitor, if one has been appointed pursuant to the Decision and Order.

		
	7.
	This Consent Agreement, and any compliance reports filed pursuant to this Consent Agreement, shall not become part of the public record of the proceeding unless and until the Commission accepts the Consent Agreement. If the Commission accepts this Consent Agreement, the Commission will place it, together with the Draft Complaint, the proposed Decision and Order, an explanation of the provisions of the proposed Decision and Order, and any other information that may help interested persons understand the order on the public record for the receipt of comments for 30 days.

		
	8.
	If the Commission accepts this Consent Agreement, the Commission may, without further notice to Proposed Respondent: (a) issue and serve its Complaint (in such form as the circumstances may require), and (b) issue and serve its Decision and Order containing injunctive relief in disposition of the

proceeding. Further, at any time before the Commission issues and serves its Decision and Order, the Commission may withdraw its acceptance of this Consent Agreement pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. §
2.34. If the Commission withdraws its acceptance of this Consent Agreement, the Commission will notify Proposed Respondent and take other actions it considers appropriate.

		
	9.
	The Decision and Order shall become final upon service. Delivery of the Complaint and the Decision and Order to Proposed Respondent by any means provided in Commission Rule 4.4(a), 16 C.F.R. § 4.4(a), or by delivery to United States counsel for Proposed Respondent identified in this Consent Agreement, shall constitute 

service to Proposed Respondent. Proposed Respondent waives any rights it may have to any other manner of service. Proposed Respondent also waives any rights it may otherwise have to service of any appendices attached or incorporated by reference into the Decision and Order, if Proposed Respondent is already in possession of such appendices, and agrees that it is bound to comply with and will comply with the Decision and Order to the same extent as if it had been served with copies of the appendices.

		
	10.
	The Complaint may be used in construing the terms of the Decision and Order and no agreement, understanding, representation, or interpretation not contained in the Decision and Order or the Consent Agreement may be used to vary or contradict the terms of the Decision and Order.

		
	11.
	By signing this Consent Agreement, Proposed Respondent represents and warrants that:

		
	a.
	it can fulfill all the terms of and accomplish the full relief contemplated by the Decision and Order including, among other things, effectuating all required divestitures, assignments and transfers, and obtaining any necessary approvals from governmental authorities, leaseholders, and other third parties to effectuate the divestitures, assignments, and transfers; and

		
	b.
	all parents, subsidiaries, affiliates, and successors necessary to effectuate the full relief contemplated by this Consent Agreement and the Decision and Order are parties to this Consent Agreement and are bound as if they had signed this Consent Agreement and were made parties to this proceeding, or are within the control of parties to this Consent Agreement and the Decision and Order, or will be after the acquisition.

		
	12.
	Proposed Respondent has read the Draft Complaint and the proposed Decision and Order. Proposed Respondent agrees to comply with the terms of the proposed Decision and Order from the date it signs this Consent Agreement. Proposed

Respondent understands that once the Commission has issued the Decision and Order, it will be required to file one or more compliance reports setting forth in detail the manner in which it has complied, has prepared to comply, is complying, and will comply with the Decision and Order. When final, the Decision and Order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time as provided by statute for other orders. Proposed Respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the Decision and Order.

	
		
	AARON’S INC.

/s/ John W. Robinson

By: John W. Robinson III
President and Chief Executive Officer Aaron’s Inc.

Dated:  August 9, 2019

/s/ Norman Armstrong, Jr. 

Norman Armstrong, Jr. King & Spalding LLP Counsel for Aaron’s Inc.

Dated:  August 9, 2019
	FEDERAL TRADE COMMISSION

/s/ Joseph A. Lipinsky 

By: Joseph A. Lipinsky Attorney
Northwest Region

/s/ Tina Kondo 

Tina Kondo Assistant Director Northwest Region

/s/ Charles Harwood 

Charles Harwood Director Northwest Region

/s/ Ian R. Conner 

Ian R. Conner Deputy Director
Bureau of Competition

UNITED STATES OF AMERICA 
BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS:    Joseph J. Simons, Chairman
Noah Joshua Phillips Rohit Chopra
Rebecca Kelly Slaughter Christine S. Wilson

	
			
	 
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	In the Matter of
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	Docket No. C-

	Aaron's Inc.,
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	a corporation.
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DECISION AND ORDER

The Federal Trade Commission (“Commission”), having initiated an investigation of certain acts and practices of Aaron’s Inc. (“Respondent”), Rent-A-Center, Inc., and Buddy’s Newco, LLC, and Respondent having been furnished thereafter with a copy of the draft Complaint that counsel for the Commission proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge Respondent with violations of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and

Respondent, its attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Order (“Consent Agreement”), containing an admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondent that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and

The Commission having thereafter considered the matter and having determined it had reason to believe that Respondent has violated the said Act, and that a Complaint should issue stating its charges in that respect, and having accepted the executed Consent Agreement and placed such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby makes the following jurisdictional findings and issues the following Decision and Order (“Order”):

		
	1.
	Respondent Aaron’s Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Georgia, with its headquarters and principal place of business located at 400 Galleria Parkway SE, Suite 300, Atlanta, Georgia 30339.

		
	2.
	The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondent, and the proceeding is in the public interest.

ORDER 
I.
IT IS HEREBY ORDERED that, as used in this Order, the following definitions shall
apply:

		
	A.
	“Aaron’s” or “Respondent” means Aaron’s Inc., its directors, officers, partners, employees, agents, representatives, successors, and assigns; and the joint ventures, subsidiaries, partnerships, divisions, groups, and affiliates controlled by Aaron’s Inc., and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

		
	B.
	“Buddy’s” means Buddy’s Newco, LLC, d/b/a Buddy’s Home Furnishings, is a limited liability company organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its principal address at 4705 S. Apopka Vineland Road, Suite 206, Orlando, Florida 32819.

		
	C.
	“RAC” means Rent-A-Center, Inc., a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its principal address at 5501 Headquarters Drive, Plano, Texas 75024.

		
	D.
	“Commission” means the Federal Trade Commission.

		
	E.
	“Aaron’s Franchisee” means a Third Party business owner who operates a RTO Retail Center under the Aaron’s corporate trademark or associated brands.

		
	F.
	“Antitrust Laws” means the Federal Trade Commission Act, as amended, 15 U.S.C. § 41 et seq., the Sherman Act, 15 U.S.C. § 1 et seq., and the Clayton Act, 15 U.S.C. § 12 et seq.

		
	G.
	“Board Member” means a member of the board of directors or board of managers for a specified entity.

		
	H.
	“Competitor” means any Third Party that, directly or through a subsidiary, owns operates, or is a franchisor of, one or more RTO Retail Centers in the United States, including Buddy’s and RAC.

		
	I.
	“Consent Agreement” means the Agreement Containing Consent Order.

		
	J.
	“Consumer Rental Contracts” means contracts that provide a consumer with a consumer good through a leasing arrangement that terminates when the consumer acquires ownership or the lessor takes repossession of the consumer good. Consumer Rental Contracts are also referred to as rent-to-own contracts, rental purchase agreements, and lease-to-own agreements.

		
	K.
	“Executive Team” means Board Members, CEO, President, Executive Vice President, and General Counsel of Respondent, and all employees of Respondent in a senior management position with decision-making authority over Respondent’s business operations.

		
	L.
	“Non-Competition Agreement” means any agreement or covenant not to operate an RTO Retail 

Center within a specified geographic area for a specified period.

		
	M.
	“Third Party” means any natural person, partnership, corporation, association, trust, joint venture, or other business or legal entity other than Respondent.

		
	N.
	“Reciprocal Purchase Agreement” means a contingent agreement or series of contingent agreements through which Respondent or an Aaron’s Franchisee agrees to close a RTO Retail Center and sell its Consumer Rental Contracts to a Competitor or its franchisee, and that Competitor or its franchisee agrees to close a different RTO Retail Center and sell its Consumer Rental Contracts to Respondent or an Aaron’s Franchisee.

		
	O.
	“RTO Retail Center” means a store with a physical location that primarily offers consumer goods through Consumer Rental Contracts.

II.

IT IS FURTHER ORDERED that:

		
	A.
	Respondent shall not, directly or indirectly, enter into, solicit, invite, facilitate, or enable any Third Party to enter into, a Reciprocal Purchase Agreement.

		
	B.
	Respondent shall not enforce, in whole or part, any Non-Competition Agreement that was part of, or contingent on, a Reciprocal Purchase Agreement.

		
	C.
	In any future franchise agreement or any renewal of an existing franchise agreement, Respondent shall specifically prohibit the Aaron’s Franchisee from entering into a Reciprocal Purchase Agreement with a Third Party.

III.

IT IS FURTHER ORDERED that no employee, officer, Board Member or other representative of Respondent shall serve as a Board Member or officer for a Competitor and Respondent shall not permit any employee, officer, Board Member or other representative of a Competitor to serve as a Board Member for Respondent.

IV.

IT IS FURTHER ORDERED that Respondent shall establish and maintain an antitrust compliance program that sets forth the policies and procedures Respondent has implemented to comply with the Order and the Antitrust Laws. The antitrust compliance program shall include:

		
	A.
	Designation and retention of an antitrust compliance officer, who may be an existing employee of Respondent, to supervise the design, maintenance, and operation of the program;

		
	B.
	Training the Executive Team regarding Respondent’s obligations under this Order and the Antitrust Laws:

		
	1.
	Within 30 days after this Order becomes final,

		
	2.
	At least annually during the term of the Order, and

		
	3.
	Within 30 days of when an individual first becomes a member of the Executive Team;

		
	C.
	Policies and procedures for employees and representatives of Respondent to ask questions about, and report violations of, this Order and the Antitrust Laws confidentially and without fear of retaliation of any kind;

		
	D.
	Policies and procedures for disciplining employees and representatives of Respondent for failure to comply with this Order and the Antitrust Laws; and

Retention of documents and records sufficient to record Respondent’s compliance with its obligations under this Paragraph IV of this Order, including but not limited to records showing that employees and representatives of Respondent have received all trainings required under this Order during the preceding 2 years.

V.

IT IS FURTHER ORDERED that Respondent shall file verified written reports (“compliance reports”) in accordance with the following:

		
	A.
	Respondent shall submit:

		
	1.
	An interim compliance report 60 days after the Order is issued;

		
	2.
	Annual compliance reports each year on the anniversary of entry of the Order for a period of ten (10) years; and

		
	3.
	Additional compliance reports as the Commission or its staff may request;

		
	B.
	Each compliance report shall set forth in detail the manner and form in which Respondent intends to comply, is complying, and has complied with this Order. Each compliance report shall contain sufficient information and documentation to enable the Commission to determine independently whether Respondent is complying with the Order. Conclusory statements that Respondent has complied with its obligations under the Order are insufficient. Respondent shall include in its reports, among other information or documentation that may be necessary to demonstrate compliance:

		
	1.
	The identity and job title of the antitrust compliance officer;

		
	2.
	A description of how Respondent is complying with Paragraph II.B of the Order with respect to each Reciprocal Purchase Agreement in existence prior to the date of this Order and include, if applicable, any amendments, appendices, exhibits, schedules and modifications made thereto; and

		
	3.
	With each annual compliance report, provide an electronic Excel spreadsheet listing each RTO Retail Center for which either 1) Respondent or an Aaron’s Franchisee sold the RTO Retail Center’s Consumer Rental Contracts to a Competitor or franchisee of a Competitor, or 2) Respondent or an Aaron’s Franchisee acquired the RTO Retail Center’s Consumer Rental Contracts of a Competitor or franchisee of a Competitor and provide the following information regarding each listed RTO Retail Center:

		
	a.
	Whether Respondent or an Aaron’s Franchisee acquired or sold Consumer Rental Contracts and the identity of the affiliated RTO Retail Center;

		
	b.
	The address of the RTO Retail Center;

		
	c.
	The name of all other parties to the transaction, and if another party was a franchisee, the name of the franchisor of that party;

		
	d.
	Whether Respondent or an Aaron’s Franchisee has entered into a Non-

Competition Agreement in connection with the transaction; and

		
	e.
	A short summary of the relevant terms of the transaction including, but not limited to: (i) the purchase price and/or valuation of assets; (ii) the closing date of the transaction; and (iii) if Respondent or an Aaron’s Franchisee acquired or sold Consumer Rental Contracts from multiple RTO Retail Centers in the same transaction, the addresses of the other RTO Retail Centers.

		
	C.
	Respondent shall verify each compliance report in the manner set forth in 28 U.S.C.

§ 1746 by the Chief Executive Officer or another officer or employee specifically authorized to perform this function. Respondent shall submit an original and 2 copies of each compliance report as required by Commission Rule 2.41(a), 16 C.F.R. § 2.41(a), including a paper original submitted to the Secretary of the Commission and electronic copies to the Secretary at ElectronicFilings@ftc.gov and to the Compliance Division at bccompliance@ftc.gov. In addition, Respondent shall provide a copy of each compliance report to the Monitor if the Commission has appointed one in this matter.

VI.

IT IS FURTHER ORDERED that Respondent shall notify the Commission at least 30 days prior to:

		
	A.
	The proposed dissolution of Aaron’s Inc.;

		
	B.
	The proposed acquisition, merger, or consolidation of Aaron’s Inc; or

		
	C.
	Any other change in Respondent including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance obligations arising out of this Order.

VII.

IT IS FURTHER ORDERED that, for purposes of determining or securing compliance with this Order, and subject to any legally recognized privilege, upon written request and five (5) days’ notice to the relevant Respondent, made to its principal place of business as identified in this Order, registered office of its United States subsidiary, or its headquarters office, the notified Respondent shall, without restraint or interference, permit any duly authorized representative of the Commission:

		
	A.
	Access, during business office hours of the Respondent and in the presence of counsel, to all facilities and access to inspect and copy all business and other records and all documentary 

material and electronically stored information as defined in Commission

Rules 2.7(a)(1) and (2), 16 C.F.R. § 2.7(a)(1) and (2), in the possession or under the control of the Respondent related to compliance with this Order, which copying services shall be provided by the Respondent at the request of the authorized representative of the Commission and at the expense of the Respondent; and

		
	B.
	To interview officers, directors, or employees of the Respondent, who may have counsel present, regarding such matters.

VIII.

IT IS FURTHER ORDERED that in connection with any legal proceeding brought by the Commission against Buddy’s or RAC alleging that Respondent or an Aaron’s Franchisee entered illegal Reciprocal Purchase Agreements, Respondent shall:

		
	A.
	Agree to service of process of all Commission subpoenas issued under Rule 3.34 of the Commission Rules of Practice, 16 C.F.R. ¶ 3.34; and

		
	B.
	Negotiate in good faith with the Commission to provide a declaration, affidavit, and/or sponsoring witness, if necessary, to establish the authenticity and admissibility of any documents and/or data that Respondent produces or has produced to the Commission.

IX.

IT IS FINALLY ORDERED that this Order shall terminate 20 years from the date it is
issued.

By the Commission.

April J. Tabor Acting Secretary

SEAL:
ISSUED:Document

EXHIBIT 10.4

FRANKLIN ELECTRIC CO., INC.
NONEMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN
(As Amended and Restated December 13, 2019)

TABLE OF CONTENTS
Page

Article I - Introduction .................................................................................................................................................................... 1
Article II - Shares Subject to the Plan ............................................................................................................................................. 1
Article III - Director Compensation ................................................................................................................................................ 1
Article IV - Deferral Elections ........................................................................................................................................................ 2
Article V - Participant Accounts ..................................................................................................................................................... 3
Article VI - Distribution of Accounts ............................................................................................................................................. 4
Article VII - Administration of the Plan ......................................................................................................................................... 6
Article VIII - Amendment or Termination ...................................................................................................................................... 7
Article IX - General Provisions ....................................................................................................................................................... 8

-i-

FRANKLIN ELECTRIC CO., INC.
NONEMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN

Article I -Introduction

Franklin Electric Co., Inc., an Indiana corporation (the “Company”), maintains the Nonemployee Directors’ Deferred Compensation Plan (the “Plan”) for members of its Board of Directors (the “Board”) who are not employees of the Company or an affiliate of the Company (the “Nonemployee Directors”). The Plan was initially effective as of February 11, 2000, amended as of April 28, 2006, amended as of February 19, 2010, amended as of April 1, 2011 and is hereby amended and restated as of December 13, 2019.

Article II -Shares Subject to the Plan

2.1 Number of Shares.   Subject to adjustment as provided in Section 2.2 herein, the total number of shares of common stock of the Company (“Common Stock”) available for issuance under the Plan shall be 100,000 shares. Such shares of Common Stock may be either authorized but unissued, reacquired or a combination thereof.

2.2 Adjustment.   Any increase in the number of outstanding shares of Common Stock occurring through stock splits or stock dividends after the adoption of the Plan shall be reflected proportionately in an increase in the aggregate number of shares of Common Stock then available for issuance under the Plan. Any fractional shares of Common Stock resulting from such adjustments shall be eliminated. If changes in capitalization other than those considered above shall occur, the Board shall make such adjustment in the number and class of shares of Common Stock which may thereafter be issued, as the Board in its discretion may consider appropriate, and all such adjustments shall be conclusive upon all persons.

Article III -Director Compensation

3.1 Director Compensation.   The Plan permits each Nonemployee Director to make an election for each calendar year to defer receipt of any portion in increments of 10% of (a) the retainer payable to the Nonemployee Director for his or her services as a member of the Board for the fiscal year that begins in such calendar year; (b) the fees paid to the Nonemployee Director for each Board and Committee meeting attended during such calendar year; (c) the fees paid to each Nonemployee Director, if any, for services during such calendar year as Chairman of a Board Committee; and (d) the Stock Award granted to the Nonemployee Director during each such calendar year under the Franklin Electric Co., Inc. 2012 Stock Plan (or any successor equity-based plan) (the “Stock Plan”) (collectively, the “Director Compensation”). The components of Director Compensation described in Subsections (a) – (c) shall be referred to herein as the “Cash Portion” and the component of Director Compensation described in Subsection (d) shall be referred to herein as the “Stock Portion”.

3.2 Participation.   Each Nonemployee Director shall become a participant under the Plan (a “Participant”) by filing the written Election Form described in Article IV below with the Plan Administrator with respect to the deferral of the entire amount of Director Compensation payable to him or her during a calendar year.

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Article IV -Deferral Elections

4.1 Initial Election.

(a) Each Nonemployee Director may elect, on an Election Form provided by the Plan Administrator and in accordance with Section 3.1(b), to defer receipt of his or her Director Compensation payable during a calendar year until the date on which his or her service on the Board terminates for any reason. In such case, the value of such Director Compensation will be credited to the Participant Account established for him or her under the Plan pursuant to the provisions of Section 5.1 below.
(b) If a Nonemployee Director does not make an election pursuant to Subsection 4.1(a) above to defer Director Compensation payable during a calendar year, the Nonemployee Director shall receive (i) with respect to the retainer described in Subsection 3.1(a), at his or her option, either (A) a cash payment equal to such amount, or (B) a distribution of a number of full shares of Common Stock equal to the cash value of such amount divided by the Fair Market Value (as defined in Section 9.2) of a share of Common Stock on the date on which such amount is payable, and cash for any fractional shares; (ii) with respect to the fees described in Subsections 3.1(b) and (c), a cash payment equal to such amount; and (iii) with respect to the Stock Portion, the Stock Award that would otherwise be granted under the Stock Plan, in accordance with the terms of the Stock Plan. Any distribution of cash or Common Stock shall be made as soon as practicable after the date on which such Director Compensation is payable. Any distribution of Common Stock shall be evidenced by a certificate representing the applicable number of shares of Common Stock, registered in the name of the Nonemployee Director, and issued to the Nonemployee Director, provided that the Company may instead reflect the issuance of shares of Common Stock on a non-certificated basis, with the ownership of such shares by the Nonemployee Director evidenced solely by book entry in the records of the Company’s transfer agent.

4.2 Timing of Election.

(a) An Election Form effective for a calendar year shall be delivered to the Plan Administrator prior to the first day of such calendar year. An Election Form shall remain in effect for subsequent calendar years until a written notice to revise the Election Form is delivered to the Plan Administrator on or before the first day of the calendar year in which the revision is to become effective. Except as provided in Subsection 4.2(b) below, an initial Election Form or a revised Election Form shall apply only to Director Compensation otherwise payable to a Nonemployee Director after the end of the calendar year in which such initial or revised Election Form is delivered to the Plan Administrator. Any Election Form delivered by a Nonemployee Director shall be irrevocable with respect to any Director Compensation covered by the elections set forth therein. If an Election Form is not in effect for a Nonemployee Director for a calendar year, he or she shall be deemed to have elected to receive the Cash Portion of his or her Director Compensation in cash as specified in Subsection 4.1(b)(i)(A).

2

(b) Notwithstanding the provisions of Subsection 4.2(a), an election made by a Nonemployee Director in the calendar year in which he or she first becomes a Nonemployee Director may be made pursuant to an Election Form delivered to the Plan Administrator within thirty days after the date on which he or she initially becomes a Nonemployee Director, and such Election Form shall be effective with respect to Director Compensation earned from and after the date such Election Form is delivered to the Plan Administrator.

Article V -Participant Accounts

5.1 Credits to Account.

(a) A Participant’s Director Compensation deferred pursuant to Section 4.1 shall be credited to the Participant’s Account as of the date on which such payment would have been made (a “Payment Date”).

(b) The Participant shall have indicated on the Election Form to have the Cash Portion of the deferred Director Compensation credited to his or her Account invested in one of the following ways:

(i) Such dollar amount shall be held in the Cash Subaccount of the Participant’s Account and credited with interest as of the end of each calendar month at the rate in effect for such month as published by Wells Fargo for its Stable Return Fund, or a similar interest rate as determined by the Plan Administrator; or

(ii) Such dollar amount shall be held in the Stock Subaccount of the Participant’s Account and converted into a number of phantom shares of Common Stock (“Stock Units”), determined by dividing such dollar amount by the Fair Market Value of a share of Common Stock on the Payment Date. The number of Stock Units for full shares of Common Stock shall be credited to the Stock Subaccount. Any cash remaining after such conversion, together with other subsequent credits of the Cash Portion of deferred Director Compensation, shall be converted into Stock Units on the next applicable Payment Date.

(c) The Stock Portion of the deferred Director Compensation shall be held in the Stock Subaccount of the Participant’s Account and converted as of the applicable Payment Date into a number of Stock Units equal to the number of shares of Common Stock subject to the Stock Award. Any subsequent credits of the Stock Portion of deferred Director Compensation shall be converted into Stock Units on the next applicable Payment Date.

(d) Additional credits shall be made to the Stock Subaccount of a Participant’s Account in amounts equal to the cash dividends (or the fair market value of dividends paid in property other than Common Stock) that the Participant would have received had he or she been the owner on each record date of a number of shares of Common Stock equal to the number of Stock Units in his or her Stock Subaccount on such date. In the case of a dividend in Common Stock or a Common Stock split, additional credits will be made to the Stock Subaccount of a Participant’s Account of a number of Stock Units equal to the number of full shares of Common Stock that the Participant would have received had he or she been the owner on each record date of a number of shares of Common Stock equal to the number of Stock Units in his or her Stock Subaccount on such date. All dividends will be converted into Stock Units as described above on the applicable dividend payment date.

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5.2 Transfer Between Subaccounts.

(a) Except as provided in Subsection (b) below, amounts credited to a Participant’s Cash Subaccount and/or Stock Subaccount pursuant to Section 5.1 shall remain in such Subaccount until distributions occur as described in Article VI, and no Participant shall be permitted to transfer any amounts between such Subaccounts.

(b) Notwithstanding Subsection (a), a Participant may elect to transfer all or a portion of his or her Stock Subaccount to the Cash Subaccount. Such election may be made once the Stock Portion has been held in the Stock Subaccount for three full years, and in accordance with procedures established by the Plan Administrator. In such case, the Stock Subaccount will be reduced by the number of Stock Units to be transferred and the Cash Subaccount will be credited with an amount equal to the number of Stock Units transferred multiplied by the Fair Market Value of a share of Common Stock on the date of the transfer.

5.3 Accounts Maintained Until Payment.   Each Participant Account shall be maintained on the books of the Company until full payment of the balance thereof has been made to the applicable Participant (or the beneficiaries of a deceased Participant). No funds shall be set aside or earmarked for any Participant Account, which shall be purely a bookkeeping device.

Article VI -Distribution of Accounts

6.1 Distribution on Termination of Service.   Distributions of a Participant’s Account shall be made to the Participant according to one or more of the following methods as irrevocably elected by the Participant on the Election Form provided in Article IV:

(a) As a lump sum payable on a date identified on the Election Form submitted by the Participant, so long as the distribution date is at least one calendar year after the calendar year for which the election is made;

(b) In a designated number of monthly installments, not less than twelve (12) or more than one hundred twenty (120), commencing on a date identified on the Election Form submitted by the Participant, so long as the distribution commencement date is at least one calendar year after the calendar year for which the election is made. The initial monthly installment as calculated herein shall remain in effect until the end of the first year in which said installments commenced. Beginning with the first monthly installment in the second year, the monthly installment payable for each year shall be computed as of the beginning of said year based on the previous year ending balance divided by the number of remaining installment payments. Earnings determined under Article V shall accrue and be credited to the Plan as described in Article V. Any residual amounts determined after calculation of the final year’s installment payments shall be paid with the last scheduled installment payment; or

(c) In a designated number of annual installments, not less than one (1) or more than ten (10), commencing on a date identified on the Election Form submitted by the Participant, so long as the distribution commencement date is at least one calendar year after the calendar year for which the election is made. The initial monthly installment shall be computed by dividing the amount to be paid under such installment plan by the number of annual installments to be paid. Beginning with the second annual installment, the installment payable for each year shall be computed as of the beginning of said year based on the previous year ending balance divided by the number of remaining installment payments. Earnings determined under Article V shall accrue and be credited to the Plan as described in Article V. Any residual amounts determined after calculation of the final year’s installment payments shall be paid with the last scheduled installment payment.

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6.2 Form of Distribution.

(a) (i)  The balance of the Stock Subaccount of the Participant’s Account shall be distributed in shares of Common Stock or in cash as designated by the Participant (or his or her beneficiaries in the event of his or her death) by written notice delivered to the Plan Administrator prior to the applicable distribution date. If a timely designation is not received by the Plan Administrator, distribution shall be made in cash or in Common Stock as the Company shall decide.

(ii) The balance of the Cash Subaccount of the Participant’s Account shall be distributed in cash.

(b) In the event of a distribution in Common Stock, a certificate representing a number of shares of Common Stock equal to the number of Stock Units in the Participant’s Account, registered in the name of the Participant (or his or her beneficiaries), and any remaining cash in the Stock Subaccount shall be distributed to the Participant (or his or her beneficiaries). Notwithstanding the foregoing, the Company, in lieu of issuing a stock certificate, may reflect the issuance of shares of Common Stock on a non-certificated basis, with the ownership of such shares by the Participant (or his or her beneficiaries) evidenced solely by book entry in the records of the Company’s transfer agent.

(c) In the event of a cash distribution, the Participant (or his or her beneficiaries) shall receive an amount in cash equal to the aggregate of (i) the number of Stock Units in the Stock Subaccount multiplied by the Fair Market Value of a share of Common Stock on the applicable distribution date, (ii) any cash in the Stock Subaccount, and (iii) any cash in the Cash Subaccount, including interest credited for the month of January.

6.3 Distribution Upon Death.   If a Participant’s service on the Board terminates by reason of his or her death, or if he or she dies after becoming entitled to distribution hereunder, but prior to receipt of his or her entire distribution, all cash or Common Stock then distributable hereunder with respect to him or her shall be distributed to such beneficiary or beneficiaries as such Participant shall have designated by an instrument in writing last filed with the Company prior to his or her death, or in the absence of such designation or of any living beneficiary, to his or her spouse, or if not then living, to his or her then living descendants, per stirpes, or if none is then living, to the personal representative of his or her estate, in the same manner as would have been distributed to the Participant had he or she continued to live.

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6.4 Unforeseeable Emergency.   In the discretion of the Plan Administrator, and at the written request of a Participant, up to 100% of the balance in his or her Account, determined as of the last day of the calendar month prior to the date of distribution, may be distributed to the Participant in a lump sum in the case of an Unforeseeable Emergency, subject to the limitations set forth below. For purposes of this Section 6.4, an Unforeseeable Emergency is a severe financial hardship of the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a spouse or dependent (as defined in Section 152(a) of the Internal Revenue Code of 1986, as amended (the “Code”)) of the Participant, loss of the Participant’s property due to casualty or other similar, extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances constituting an Unforeseeable Emergency will depend upon the facts of each case, as determined by the Plan Administrator in its discretion, but in any case payment may not be made to the extent that such hardship is or may be relieved:

(a) through reimbursement or compensation by insurance or otherwise;

(b) by liquidation of the Participant’s assets to the extent the liquidation of such assets would not itself cause severe financial hardship; or

(c) by cessation of deferrals under the Plan.

Distribution of amounts because of an Unforeseeable Emergency shall be permitted only to the extent reasonably needed to satisfy the Unforeseeable Emergency (which may include amounts necessary to pay any Federal, state or local taxes or penalties reasonably anticipated to result from the distribution).

6.5 Distribution Limitation for Key Employees.   Notwithstanding the foregoing, if at the time of a Participant’s termination of service on the Board he or she is employed by the Company or any affiliate thereof, and is considered to be a Key Employee as defined in Code Section 409A, distribution of his or her Account shall not be made earlier than six months following the Participant’s termination of service on the Board, to the extent required by Code Section 409A.

Article VII -Administration of the Plan

7.1 Plan Administration.   The Corporate Governance Committee of the Board of Directors of the Company shall act as the Plan Administrator. The Plan Administrator shall be responsible for the general operation and administration of the Plan, and shall have such powers as are necessary to discharge its duties under the Plan, including, without limitation, the following:

(a) To construe and interpret the Plan, to decide all questions of eligibility, to determine the amount, manner and time of payment of any benefits hereunder, to prescribe rules and procedures to be followed by Participants and their beneficiaries under the Plan, and to otherwise carry out the purposes of the Plan.

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(b) To appoint or employ individuals to assist in the administration of the Plan and any other agents deemed advisable. The decisions of the Plan Administrator shall be binding and conclusive upon all Participants, beneficiaries and other persons.

7.2 Claims for Benefits.   Any Participant claiming a benefit, requesting an interpretation or ruling, or requesting information, under the Plan, shall present the request in writing to the Plan Administrator, which shall respond in writing as soon as practicable. If the claim or request is denied, the written notice of denial shall state the following:

(a) the reasons for denial, with specific reference to the Plan provisions upon which the denial is based;

(b)  a description of any additional material or information required and an explanation of why it is necessary; and

(c) an explanation of the Plan’s review procedure.

The initial notice of denial shall normally be given within 90 days after receipt of the claim. If special circumstances require an extension of time, the claimant shall be so notified and the time limit shall be 180 days. Any person whose claim or request is denied, or who has not received a response within 30 days, may request review by notice in writing to the Plan Administrator. The original decision shall be reviewed, by the Plan Administrator, which may, but shall not be required to, grant the claimant a hearing. On review, whether or not there is a hearing, the claimant may have representation, examine pertinent documents and submit issues and comments in writing. The decision on review shall ordinarily be made within 60 days. If an extension of time is required for a hearing or other special circumstances, the claimant shall be so notified and the time limit shall be extended to 120 days. The decision on review shall be in writing and shall state the reasons and the relevant Plan provisions. All decisions on review shall be final and bind all parties concerned.

Article VIII -Amendment or Termination

8.1 Authority.   The Company intends the Plan to be permanent but reserves the right to amend or terminate the Plan when, in the sole opinion of the Company, such amendment or termination is advisable. Any such amendment or termination shall be made pursuant to a resolution of the Board without further action on the part of the Company’s stockholders to the extent permitted by law, regulation or stock exchange requirements, and shall be effective as of the date of such resolution or such later date as the resolution may expressly state.

8.2 Limits.   No amendment or termination of the Plan shall (a) directly or indirectly deprive any current or former Participant or his or her beneficiaries of all or any portion of his or her Account as determined as of the effective date of such amendment or termination, or (b) directly or indirectly reduce the balance of any Account held hereunder as of the effective date of such amendment or termination. Upon termination of the Plan, distribution of balances in all Accounts shall continue to be made to Participants or their beneficiaries in the manner and at the time described in Article VI. No additional deferred Director Compensation shall be credited to the Accounts of Participants after termination of the Plan, but the Company shall continue to credit earnings, gains and losses to Accounts pursuant to Article VI until the balances of such Accounts have been fully distributed to Participants or their beneficiaries.

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8.3 Stockholder Approval.   No such amendment, modification or termination of the Plan may occur without the approval of the stockholders of the Company, if stockholder approval for such amendment, modification or termination is required by the federal securities laws, any national securities exchange or system on which the Shares are then listed or reported, or a regulatory body having jurisdiction with respect thereto.

Article IX -General Provisions

9.1 Plan Unfunded.   The Plan at all times shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Company for payment of any benefits hereunder. The right of a Participant or his or her beneficiary to receive a benefit hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor a beneficiary shall have any rights in or against any specific assets of the Company. All amounts credited to Accounts shall constitute general assets of the Company.

9.2 Fair Market Value.   For all purposes of the Plan, the Fair Market Value of a share of Common Stock as of a given date shall be the consolidated closing bid price for a share of Common Stock on The NASDAQ Stock Market for the preceding trading day, or if there is no such consolidated closing bid price on the trading day preceding the given date, then on the last previous day on which a consolidated closing bid price was reported.

9.3 No Guaranty of Assets.   Nothing contained in the Plan shall constitute a guaranty by the Company, the Corporate Governance Committee, the Plan Administrator, or any other person or entity, that the assets of the Company will be sufficient to pay any benefit hereunder. No Participant or beneficiary shall have any right to receive a distribution under the Plan except in accordance with the terms of the Plan.

9.4 No Guaranty of Service.   Establishment of the Plan shall not be construed to give any Nonemployee Director the right to be retained as a member of the Board.

9.5 No Assignment.   No interest of any person or entity in, or right to receive a distribution under, the Plan, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive a distribution be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings.

9.6 Governing Law.   The Plan shall be construed and administered under the laws of the State of Indiana, except to the extent preempted by federal law.

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9.7 Incapacity of Participant.   If any person entitled to a payment under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution that is contributing toward or providing for the care and maintenance of such person. Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company, the Committee, the Plan Administrator and the Plan therefor.

9.8 Succession.   The Plan shall be continued, following a transfer or sale of assets of the Company, or following the merger or consolidation of the Company into or with any other corporation or entity, by the transferee, purchaser or successor entity, unless the Plan has been terminated by the Company pursuant to the provisions of Article VIII prior to the effective date of such transaction.

9.9 Location of Participants.   Each Participant or beneficiary shall keep the Plan Administrator informed of his or her current address. The Plan Administrator shall not be obligated to search for the whereabouts of any person. If the location of a Participant is not made known to the Plan Administrator within three years after the date on which payment of the Participant’s benefits under the Plan be made, payment may be made as though the Participant had died at the end of the three-year period. If, within one additional year after such three-year period has elapsed, or, within three years after the actual death of a Participant, the Plan Administrator is unable to locate any beneficiary of the Participant, then the Company shall have no further obligation to pay any benefit hereunder to such Participant, or beneficiary or any other person and such benefit shall be forfeited. If such Participant, or his or her beneficiary or any other person, subsequently makes a valid claim for distribution of the amount forfeited, such amount, without gains or earnings thereon, shall be distributed to such Participant or his or her beneficiary or such other person pursuant to Article VI.

9.10 No Liability.   Notwithstanding any of the preceding provisions of the Plan, none of the Company, any member of the Board, any Plan Administrator or any individual acting as an employee or agent of the Company, the Board, or the Plan Administrator, shall be liable to any Participant, former Participant, or any beneficiary or other person for any claim, loss, liability or expense incurred by such Participant, or beneficiary or other person in connection with the Plan.

9.11 Savings Clause.   Notwithstanding anything to the contrary contained in the Plan, if (a) the Internal Revenue Service prevails in a claim by it that amounts credited to a Participant’s Account, and/or earnings thereon, constitute taxable income to the Participant or his or her beneficiary for any taxable year of his, prior to the taxable year in which such credits and/or earnings are distributed to him or (b) legal counsel satisfactory to the Company, and the applicable Participant or his or her beneficiary, renders an opinion that the Internal Revenue Service would likely prevail in such a claim, the balance of such Participant’s Account shall be immediately distributed to the Participant or his or her beneficiary. For purposes of this paragraph, the Internal Revenue Service shall be deemed to have prevailed in a claim if such claim is upheld by a court of final jurisdiction, or if the Company, or a Participant or beneficiary, based upon an opinion of legal counsel satisfactory to the Company and the Participant or his or her beneficiary, fails to appeal a decision of the Internal Revenue Service, or a court of applicable jurisdiction, with respect to such claim, to an appropriate Internal Revenue Service appeals authority or to a court of higher jurisdiction, within the appropriate time period.

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9.12 Notices.   Any notice under the Plan shall be in writing, or by electronic means, and shall be received when actually delivered, or mailed postage paid as first class U.S. Mail. Notices shall be directed to the Company at its principal business office at 400 East Spring Street, Bluffton, Indiana 46714, to a Participant at the address stated in his or her Election Form, and to a beneficiary entitled to benefits at the address stated in the Participant’s beneficiary designation, or to such other addresses any party may specify by notice to the other parties.

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