Document:

Exhibit 10.17

 

Marten
Transport, Ltd.

Named
Executive Officers’ Compensation Summary

 

On May 6, 2008, the company’s Compensation Committee approved an
approximately 3.5% increase to the base salary for the company’s named
executive officers listed below, retroactive to April 1, 2008.  Effective April 1, 2008, the following
executive officers are scheduled to receive the following annual base salaries
in the listed positions:

 

	
  Name and Position as of May 6, 2008

  	
   

  	
  Base Salary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Randolph L. Marten

  	
   

  	
   

  	
   

  
	
  (Chairman, President and Chief Executive
  Officer)

  	
   

  	
  $

  	
  491,625

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robert G. Smith

  	
   

  	
   

  	
   

  
	
  (Chief Operating Officer)

  	
   

  	
  $

  	
  247,883

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Timothy P. Nash

  	
   

  	
   

  	
   

  
	
  (Executive Vice President of Sales and
  Marketing)

  	
   

  	
  $

  	
  247,883

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  James J. Hinnendael

  	
   

  	
   

  	
   

  
	
  (Chief Financial Officer)

  	
   

  	
  $

  	
  195,615

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John H. Turner

  	
   

  	
   

  	
   

  
	
  (Vice President of Sales)

  	
   

  	
  $

  	
  181,125Exhibit 10.5

 

June 30,
2008

 

VIA HAND DELIVERY

Mr. Edwin
E. Hightower, Jr.

 

RE:       Appointment as SVP and
Chief Legal Officer

 

Dear
Mr. Hightower:

 

We
are very pleased to confirm our conversations with respect to your appointment
to the position of Senior Vice President and Chief Legal Officer, effective July 1,
2008.  In this position, you will
continue to report directly to me, and will be responsible for the following
primary duties:

 

Managing
in-house legal practice, including the provision of legal advice to all
internal clients on legal matters;

 

Advising
Executive Committee and Board on legal issues affecting company operations or
implications of various proposed courses of conduct;

 

Managing
outside counsel relationships (to augment internal attorneys as needed), as
well as engagement of lobbyists (as may be necessary);

 

Setting,
in coordination with the Executive Committee and Board, legal policy for the
company;

 

Acting
as Board Secretary;

 

Acting
as Chief Compliance Officer, heading fraud prevention and detection activities;

 

Acting
as Plan fiduciary on all benefits plans, including the 401(k) plans; and,

 

Other
duties as assigned.

 

Base Salary:

 

$300,000
per year payable in equal installments of approximately $11,538.46 on the
Company’s normal bi-weekly payroll schedule.

 

Cash  Bonus:

 

You
will participate in the Company’s cash bonus program for executives that will
provide a target bonus amount equivalent to 50% of base salary at threshold,
66.7% at target and 100% at superior, calculated on the base salary actually
paid to you during a calendar year.  For
2008, your cash bonus will be calculated 6 months at current bonus eligibility
level (30% of base salary at target, per the Vice President compensation plan)
and 6 months under the cash bonus program for executives, as described, above.

 

 

The
actual amount of any award, either more or less, will be based, in part, on an
evaluation of your individual performance and contribution, as well as the
overall financial performance of the Company. 
Of course, all bonus payments and compensation decisions regarding
executives are subject to final approval by the Board or a duly authorized
Committee thereof.

 

Any
cash bonus payable pursuant to this paragraph shall be paid no later than the
15th day of the third month following the end of the Company’s first
taxable year in which the bonus is no longer subject to a “substantial risk of
forfeiture” (within the meaning of Treasury Regulation § 1.409A-1(d)).

 

Stock Options:

 

You
will be eligible to participate in the Company’s special equity incentive plan,
effective as of the date of your promotion. 
Any future equity awards will be at the discretion of the Board or a
duly authorized Committee thereof.

 

General Severance:

 

Your
current general severance agreement with the Company (as set forth exclusively
in a letter to you from Garry Welch dated February 12, 2008) is superceded
and replaced in its entirety with the following, effective as of the date of
your promotion:

 

In
the event your employment is involuntarily terminated by the Company for any
reason other than for “Cause” and provided you execute a full and complete
general release of all employment-related claims, if any, against the Company,
the Company will pay you the sum of one times your annual base salary, as in
effect at the time of your termination. 
Such sum shall be paid to you in twenty-six (26) equal payments on the
Company’s regular bi-weekly payroll cycle over the twelve (12) month period
immediately following the termination of your employment, except as otherwise
provided below.  In addition, during the
twelve (12) month period immediately following the termination of your
employment, you may continue to participate in the health and dental plans
provided to you as of the date of termination at the same level and in the same
manner as if your employment had not terminated.  If the terms of any benefit plan referred to
in this section do not permit your continued participation, then the Company
will arrange for other coverage provided substantially similar coverage at no
additional cost to you.

 

For
the purposes of this Agreement, “Cause” means (i) your willful and
continued  failure to
perform substantially your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness) or (ii) the
willful engaging by you in illegal conduct or gross misconduct which is
demonstrably and materially injurious to the Company or its affiliates.

 

Notwithstanding
the foregoing, if you are a “specified employee” (within the meaning of
Treasury Regulation § 1.409A-1(i)) of the Company, then to the 

 

2

 

extent
(if any) the cash severance amounts otherwise payable to you under this section
for the first six (6) months after your termination of employment exceed
two (2) times the lesser of (a) your annualized compensation based on
your annual rate of pay for the calendar year preceding the calendar year in
which your termination of employment occurs (as adjusted in accordance with
Treasury Regulation § 1.409A-1(b)(9)(iii)(A)(1)) or (b) the compensation
limit in effect under Internal Revenue Code § 401(a)(17) for the calendar year
in which such termination occurs, such excess amount shall be paid on the first
business day of the Company that is six (6) months and one (1) day
after your termination of employment. 
For purposes of this section, no termination of employment shall be
treated as having occurred for severance purposes unless such termination
qualifies as a “separation from service” under Internal Revenue Code § 409A.

 

All
other terms and conditions of your employment, including your Change in Control
Severance Agreement, remain in full force and effect.

 

Please
let us know whether you accept these general terms of your promotion, by
signing in the space provided below, and returning a copy to my attention.

 

Edwin,
we believe that your appointment to the position of Senior Vice President and
Chief Legal Officer provides an excellent opportunity for you to continue to
contribute to our strong leadership team and share in the direct responsibility
for the ongoing success of an exciting, challenging, and growing company.

 

 

	
   

  	
  Kindest
  regards,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GEVITY
  HR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  \s\
  Michael Lavington

  
	
   

  	
  Michael
  Lavington

  
	
   

  	
  Chairman
  and CEO-designate

  

 

 

	
  Agreed
  to and Accepted by:

  	
   

  
	
   

  	
   

  
	
  \s\
  Edwin E. Hightower, Jr.

  	
   

  
	
  Edwin
  E. Hightower, Jr.

  	
   

  
	
   

  	
   

  
	
  Date:
  July 1, 2008

  	
   

  

 

3Exhibit 10.1

 

RES-CARE, INC.

 

2005 OMNIBUS INCENTIVE COMPENSATION PLAN

(as amended effective June 27, 2008)

 

                Res-Care, Inc. hereby
establishes an omnibus incentive compensation plan for the benefit of its
employees and directors, as set forth below.

 

Section 1 — PURPOSE

 

The
Company adopts this compensation program for certain key employees and
directors to (a) increase the profitability and growth of the Company, (b) provide
competitive compensation, (c) attract and retain exceptional personnel and
encourage excellence in the performance of individual responsibilities, and (d) motivate
key employees and directors to contribute to the Company’s success.

 

Section 2 — DEFINITIONS

 

For
purposes of the Plan, the following terms shall have the meanings below unless
the context clearly indicates otherwise:

 

                2.1           “Award” means an
Incentive Stock Option, a Nonqualified Stock Option, a Stock Appreciation
Right, a Restricted Stock Award, Restricted Stock Unit, Cash Dividend Right,
Dividend Unit Right, Other Incentive Award or a Performance Award granted under
the Plan.

 

                2.2           “Award Agreement”
shall mean a certificate of grant or, if there are promises required of the
recipient of an Award, a written agreement, in such form as the Committee
prescribes from time to time, setting forth the terms and conditions of an
Award.

 

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

 

                2.4           “Cash Dividend Right”
means a contingent right, granted in tandem with a specific Restricted Stock
Unit Award, to receive an amount in cash equal to the cash distributions made
by the Company with respect to a share of Stock during the period such Award is
outstanding.

 

                2.5           “Change of Control”
means (i) an event or series of events which have the effect of any “person”
as such term is used in Section 13(d) and 14(d) of the Exchange
Act, other than any trustee or other fiduciary holding securities of the
Company under any employee benefit plan of the Company, becoming the “beneficial
owner” as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding capital stock; (ii) any
merger, consolidation, share exchange, recapitalization or other transaction in
which any person becomes the beneficial owner of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding capital stock; (iii) the persons who were 

 

 

 

Directors
immediately before a transaction shall cease to constitute a majority of the
Board of the Company or any successor to the Company; (iv) the business of
the Company is disposed of pursuant to a partial or complete liquidation, sale
of assets, or otherwise.  Provided,
however, that the Committee may provide in an Award Agreement that it believes
will constitute “deferred compensation” pursuant to Code Section 409A,
that  “Change in Control” for purposes of
the subject Award will have the meaning given in guidance from the Internal
Revenue Service construing that term for purposes of allowable triggers for
payment of deferred compensation.

 

                2.6           “Code” means the
Internal Revenue Code of 1986, as amended from time to time, and the Treasury
regulations promulgated thereunder.

 

                2.7           “Committee”
shall, for purposes of Plan administration and interpretation,  mean the Executive Compensation Committee of
the Board, except that, (i) with respect to the terms of and grants of
Awards to non-employee Directors, the Corporate Governance and Nominating
Committee of the Board shall make decisions, (ii) the entire Board may act
to grant any Awards in lieu of the Executive Compensation Committee or the
Corporate Governance and Nominating Committee, and, (iii) except with
respect to Awards to Named Executives, grant authority may be delegated to the
Chief Executive Officer of the Company. 
If at any time the Executive Compensation Committee does not consisting
of two or more members of the Board, each of whom is both a “non-employee
director” and an “outside director,” another committee shall be designated by
the Board.  For purposes of this Section,
(A) “outside director” means a Director of the Company who either (i) (a) is
not a current employee of the Company or an “affiliated corporation” (within
the meaning of Treasury Regulations promulgated under Code Section 162(m)),
(b) is not a former employee of the Company or an “affiliated corporation”
who still receives compensation for prior services (other than benefits under a
tax-qualified retirement plan), or was not an employee during any prior period
within the time defined under Exchange Act rules or the rules of any
stock exchange on which the Stock is then traded, (c) was not an officer
of the Company or an “affiliated corporation” at any time, and (d) does
not currently receive remuneration from the Company or an “affiliated
corporation,” either directly or indirectly, in any capacity other than as a
Director, or (ii) is otherwise considered an “outside director” for
purposes of Code Section 162(m); and (B) “non-employee director”
means a Director of the Company who (i) is not a current Employee or
officer of the Company or its parent or a subsidiary, (ii) does not
receive compensation (directly or indirectly) from the Company or its parent or
a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), (iii) does not possess an interest in
any other transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and (iv) is not engaged in a business relationship as to
which disclosure would be required under Item 404(b) of Regulation S-K.

 

                2.8           “Company” shall
mean Res-Care, Inc. and its successors.

 

                2.9           “Director” means
a voting member of the Board, excluding any person who serves solely in an
advisory capacity or as a director emeritus.

 

                2.10         “Disability”
means permanent disability within the meaning of Section 22(e)(3) of
the Code.

 

2

 

                2.11         “Dividend Unit Right”
means a contingent right, granted in tandem with a specific Restricted Stock
Unit Award, to have an additional number of Restricted Stock Units credited to
a Participant in respect of the Award equal to the whole number of shares of
Stock that could be purchased at Fair Market Value with the amount of each cash
distribution made by the Company with respect to a share of Stock during the
period such Award is outstanding.

 

                2.12         “Effective Date”
shall have the meaning set forth in Section 18.

 

                2.13         “Employee” means
an employee of the Company or a Subsidiary.

 

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

 

                2.15         “Fair Market Value”
means, as of any Grant Date, closing sale price of a share of Stock as reported
on the Nasdaq National Market, or if no such reported sale of the Stock shall
have occurred on such date, on the next preceding date on which there was a
reported sale.  If there shall be any
material alteration in the present system of reporting sale prices of the
Stock, or if the Stock shall no longer be listed on the Nasdaq National Market,
the Fair Market Value of a share of Stock, as of a Grant Date, shall be
determined by such method as shall be determined in good faith by the
Committee.

 

                2.16         “Full Value Award”
means any Award under which a Participant may be issued shares of Stock without
the Participant tendering consideration therefor in the form of Stock or cash
at least equal to the Fair Market Value at the Grant Date of the Stock issuable
upon exercise or maturity of the Award.

 

                2.17         “Grant Date”
means, with respect to an Award, the date on which the Committee approves the
grant of an Award pursuant to Section 4.4, or such later date as is
determined and explicitly specified in an Award Agreement.

 

                2.18         “Incentive Stock Option”
means an option to purchase Stock granted under Section 6 of the Plan that
is designated by the Committee as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code.

 

                2.19         “Named Executive”
means any individual who, on the last day of the Company’s fiscal year, is the
chief executive officer of the Company (or is acting in such capacity) or among
the four most highly compensated officers of the Company (other than the chief
executive officer), and any other person for whom executive compensation
disclosure is required under the Exchange Act or for whom short-term trading
reports are required under Section 16(a) of the Exchange Act.

 

                2.20         “Nonqualified Stock Option”
means an option to purchase Stock granted under Section 6 of the Plan that
is not intended to be an Incentive Stock Option.

 

                2.21         “Other Incentive Award”
means an incentive award granted to a Participant pursuant to Section 12.

 

3

 

                2.22         “Option” means
an Incentive Stock Option or a Nonqualified Stock Option.

 

                2.23         “Option Period”
means the period from the Grant Date of an Option to the date the period for
exercise of the Option expires (which date might be determined based on the
condition that certain performance measures be attained) as stated in the Award
Agreement.

 

                2.24         “Parent” means a
“parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code, or any successor provision.

 

                2.25         “Participant”
means an Employee or Director who has been granted an Award under the Plan.

 

                2.26         “Performance Award”
means an Award granted pursuant to Section 11 under which, upon the
satisfaction of predetermined performance measures, cash, shares of Stock, or a
combination thereof is paid to the Participant.

 

                2.27         “Plan” means
this Res-Care, Inc. 2005 Omnibus Incentive Compensation Plan.

 

                2.28         “Restriction Period”
means the period of time from the Grant Date of a Restricted Stock Award or
Restricted Stock Unit to the date when the restrictions placed on the Award in
the Award Agreement lapse.

 

                2.29         “Restricted Stock Award”
or “Restricted Stock” means Stock which is
granted under Section 9 of the Plan, subject to a Restriction Period
and/or condition which, if not satisfied, may result in the complete or partial
forfeiture of such Stock.

 

                2.30         “Restricted Stock Unit”
means an Award granted pursuant to Section 10 under which, upon the lapse
of predetermined restrictions, shares of Stock are issued to the Participant.

 

                2.31         “Stock” means
the Company’s voting common stock of no par value per share, or such other
securities into which the Stock may be converted, by merger or otherwise.

 

                2.32         “Stock Appreciation Right”
or “SAR” means a Stock Appreciation Right
granted under Section 7 of the Plan.

 

                2.33         “Subsidiary”
means any corporation which at the time qualifies as a subsidiary of the
Company under the definition of “subsidiary corporation” in Section 424(f) of
the Code.

 

                2.34         “Termination of Employment”
or “Service” shall be deemed to have
occurred at the close of business on the last day on which an Employee is
carried as an active employee on the records of the Company or any Parent or
Subsidiary.  With respect to a Director,
it shall be deemed to occur on a Director’s cessation of service on the board
of directors of both the Company and any Parent or Subsidiary.  The Committee shall determine whether an authorized
leave of absence, or other absence on military or government service,
constitutes severance of 

 

4

 

the
Employee’s employment relationship.  No
termination shall be deemed to occur if (i) the Participant is a Director
who becomes an Employee, or (ii) the Participant is an Employee who
becomes a Director, except in the latter case Incentive Stock Options shall
become Nonqualified Stock Options if not exercised within the time period
following employment termination provided for in Section 8.

 

Section 3 — STOCK SUBJECT TO THE PLAN

 

                3.1           Available Stock.

 

                                (a)           Subject to adjustment as provided in Section 3.2
and as provided in Section 3.1(c), the aggregate number of shares of Stock
that may be issued pursuant to Awards under the Plan, and the maximum number of
shares that may be issued pursuant to Incentive Stock Option Awards, shall be (i) 3,000,000
shares (including 1,000,000 shares originally authorized upon the Effective
Date of the Plan), plus (ii) no more than 213,760 shares of Stock
remaining available for issuance as of the Effective Date of the Plan under the
Company’s 2000 Stock Option and Incentive Compensation Plan and 2000
Nonemployee Directors Stock Ownership Incentive Plan (the “Prior Plans”), plus (iii) any
share subject to an award previously granted under a Prior Plan which is
forfeited, cancelled, terminated, expires or lapses for any reason without the
issuance of shares pursuant to the award, which cannot occur with respect to
more than 2,264,776 shares subject to outstanding awards as of the Effective
Date of the Plan, or, in total, no more than 5,478,536 shares.  When adopted by the Company’s shareholders,
this Plan shall amend the Prior Plans to immediately terminate the right to
make additional grants under the Prior Plans.

 

                                (b)           The maximum number of shares of Stock
that may be subject to all Awards granted under the Plan to any one Participant
during a calendar year is 500,000 from the total set forth in subparagraph (a) above,
or $1,000,000 for cash-based Awards, plus the unused amount of this per-person
Award limit from the prior fiscal years as to any particular individual.

 

                                (c)           The maximum number of shares of Stock
that may be subject to issuance under Awards that are Full Value Awards shall
be 3,275,000 shares of Stock.

 

                3.2           Changes in Capitalization.   In the
event of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, share combination, or other
change in the corporate structure of the Company affecting the number of shares
of Stock or the kind of shares or securities issuable upon exercise of an
Option or payment of another Award, and subject to Section 14.1, an
appropriate and proportionate adjustment shall be made by the Committee in the
number and kind of shares which may be delivered under the Plan, and in the
number and kind of or price of shares subject to outstanding Awards; provided
that the number of shares subject to an Award shall always be a whole number.  Any adjustment of an Incentive Stock Option
under this Section shall be made in such a manner so as not to constitute
a “modification” within the meaning of Section 424(h) of the Code and
adjustments on other Awards shall be made in a manner consistent with that
Section, as if it applied to non-Incentive Stock Options as well so as not to
trigger issues under Code Section 409A. 
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or 

 

5

 

securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Stock subject to an Award.

 

                3.3           Adjustments for Awards.   The
Committee shall have sole discretion to determine the manner in which shares of
Stock available for grant of Awards under the Plan are counted.  Without limiting the discretion of the
Committee under this Section 3.3, unless otherwise determined by the
Committee, the following rules shall apply for the purpose of determining
the number of shares of Stock available for grant of Awards under the Plan:

 

                                (a)           The grant of Options, Restricted
Stock. Performance Awards or other Incentive Awards to be settled in Stock
shall initially reduce the number of shares of Stock available for grant of
Awards under the Plan by the number of shares of Stock subject to such an
Award, and that number shall remain unavailable (even after exercise or
maturity of that Award), except as provided in (c) or (d) below.

 

                                (b)           The grant of SARs that may be paid or
settled only in Stock shall reduce the number of shares available for grant of
Awards under the Plan by the number of shares subject to such an Award;
provided, however, that upon the exercise of SARs, the excess of the number of
shares of Stock with respect to which the Award is exercised over the number of
shares of Stock issued upon exercise of the Award shall again be available for
grant of Awards under the Plan.

 

                                (c)           If any Award referred to in Sections
3.3(a) or (b), is wholly or partly canceled or forfeited, or terminates,
expires or lapses, for any reason, the number of shares with respect to which
the Award can no longer be exercised or realized by the Participant shall again
be available for grant of Awards under the Plan.

 

                                (d)           If previously acquired shares of
Stock are used to pay the exercise price of an Award, the number of shares
available for grant of Awards under the Plan shall be increased by the number of
shares delivered as payment of such exercise price.  If previously acquired shares of Stock are
used to pay withholding taxes payable upon exercise, vesting or payment of an
Award, or shares of Stock that would be acquired upon exercise, vesting or payment
of an Award are withheld to pay withholding taxes payable upon exercise,
vesting or payment of such Award, the number of shares available for grant of
Awards under the Plan shall be increased by the number of shares delivered or
withheld as payment of such withholding taxes.

 

Section 4 — ADMINISTRATION

 

                4.1           Committee Governance.   Except with
respect to other parties to whom Section 2.7 gives the power to make
specific Awards hereunder, the Plan shall be administered by the Executive
Compensation Committee.  Any Committee
acting hereunder shall select one of its members as the chairperson of the
Committee and shall hold meetings at such times and places as it may
determine.  The Committee may appoint a
secretary and, subject to the provisions of the Plan and to policies determined
by the Board, may make such rules and regulations for the conduct of its
business as it shall deem advisable. 
Written action of the 

 

6

 

Committee
may be taken unanimously by its members, and actions so taken shall be fully
effective as if taken by a vote of a majority of the members at a meeting duly
called and held.  A majority of Committee
members shall constitute a quorum for purposes of meeting.  The act of a majority of the members present
at any meeting for which there is a quorum shall be a valid act of the
Committee.

 

                4.2           Committee to Interpret Plan.   Subject
to the provisions of the Plan, the Executive Compensation Committee shall have
sole power to (i) construe and interpret the Plan; (ii) establish,
amend or waive rules and regulations for its administration; (iii) determine
and accelerate the exercisability of any Award or the termination of any
Restriction Period; (iv) correct inconsistencies in the Plan or in any Award
Agreement, or any other instrument relating to an Award; and (v) subject
to the provisions of Section 15, amend the terms and conditions of any
Award to the extent such terms and conditions are within the discretion of the
Committee as provided in the Plan. 
Notwithstanding the foregoing, no action of the Committee may, without
the consent of the person or persons entitled to exercise any outstanding
Award, adversely affect the rights of such person or persons.  All constructions of this Plan shall be made
in a manner the Committee believes consistent with Awards under the Plan not
constituting “deferred compensation” within the meaning of Section 409A of
the Code or to comply with that Code Section’s requirements, and with respect
to Incentive Stock Options, consistent with the Code and Regulations governing
the preservation of their tax treatment. 
Constructions, interpretations and rules for administration of the
Plan by the entire Board shall take precedence over and control any
construction or interpretation by the Committee, and the Board shall attempt to
reconcile any such constructions, interpretations or administrative procedures
that will have application to more than one class of Participant.

 

                4.3           Liability; Indemnification.   No member of
the Committee, nor any person to whom it has delegated authority, shall be
personally liable for any action, interpretation or determination made in good
faith with respect to the Plan or Awards granted hereunder, and each member of
the Committee (or delegatee of the Committee) shall be fully indemnified and
protected by the Company with respect to any liability he may incur with
respect to any such action, interpretation or determination, to the maximum
extent permitted by applicable law.

 

                4.4           Selection of Participants.   The
Committee as defined in Section 2.7 shall have the authority to grant
Awards from time to time to such Employees and Directors as may be selected by
it in its sole discretion.  The grants
shall not be deemed made, nor the Fair Market Value of the underlying shares of
Stock of an Award (if necessary) determined, until (i) a Committee written
action is unanimously signed, or (ii) a Committee resolution is duly
adopted at a meeting called in conformance with the rules governing the
Committee’s operation, or (iii) where the authority to serve as the
Committee rests with the CEO, when any paper or electronic writing by the CEO
listing the material terms of the grants (i.e., at least the names of
Participants and amount and type of Awards to be granted to each), is delivered
to another officer for purposes of directing the prompt preparation of Award
Agreements.

 

                4.5           Decisions Binding.   All
determinations and decisions made by the Committee pursuant to the Plan,
including factual determinations, shall be final, conclusive and binding on all
persons, including the Company, its Subsidiaries, its shareholders,
Participants and their estates and assignees.

 

7

 

                4.6           Award Agreements.   Each Award under
the Plan shall be evidenced by an Award Agreement which shall be signed by the
Chairman or Secretary of the Committee or by an officer of the Company
authorized by the Committee, and shall contain such terms and conditions as may
be approved by the Committee, which need not be the same in all cases.  Any Award Agreement may be supplemented or
amended in writing from time to time as approved by the Committee, provided
that the terms of the Agreement as amended or supplemented, as well as the
terms of the original Award Agreement, are not inconsistent with the provisions
of the Plan.  An Employee who receives an
Award under the Plan shall not, with respect to the Award, be deemed to have
become a Participant, or to have any rights with respect to the Award, unless
and until the Award Agreement has been signed by the Chairman or Secretary of
the Committee or by an officer of the Company authorized by the Committee and,
if required by its terms, by the Employee and delivered to the Committee or its
designee, and the Employee has otherwise complied with the applicable terms and
conditions of the Award.  The Committee
may condition any Award upon the agreement by the Participant to such
confidentiality, non-competition, and non-solicitation covenants as the
Committee deems appropriate.

 

                4.7           Administration With Respect To Named Executives.   The
per-share exercise price of an Option granted to a Named Executive shall, like
all other Options hereunder, be no less than 100% of the Fair Market Value per
share on the Grant Date and such Option shall thereby qualify as
performance-based compensation under Section 162(m) of the Code.  With respect to other Awards granted to Named
Executives, the Plan may (but need not) be administered so as to permit such
Awards to qualify as performance-based compensation under Section 162(m) of
the Code.

 

Section 5 — AWARDS UNDER THE PLAN

 

                Subject to the limitations of
the Plan, the Committee may in its sole and absolute discretion grant Awards in
such numbers, upon such terms and at such times as the Committee shall
determine.  Directors and Employees who
are expected to contribute substantially to the growth and profitability of the
Company or a Subsidiary are eligible for selection by the Committee under Section 4.4
to receive Awards.

 

Section 6 — STOCK OPTIONS

 

                6.1           Grant.   Both Incentive Stock
Options and Nonqualified Stock Options may be granted under the Plan.  If an Option is designated as an Incentive
Stock Option but does not qualify as such under Section 422 of the Code,
the Option (or portion thereof) shall be treated as a Nonqualified Stock
Option, and governed by Section 83 of the Code.  All Options granted under the Plan shall be
evidenced by an Award Agreement in such form as the Committee may from time to
time approve.  All Options are subject to
the terms and conditions of this Section 6 and such additional terms and
conditions contained in the Award Agreement, which need not be the same in each
case, not inconsistent with the provisions of the Plan, as the Committee finds
desirable.

 

8

 

 

                6.2           Exercise Price. 
The exercise price per share of Stock covered by an Option shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Stock on the Grant Date.  If
an Incentive Stock Option is granted to a person who on the Grant Date owns
(within the meaning of Section 424 of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of the Company
or any Subsidiary, the exercise price shall be at least 110% of the Fair Market
Value of the Stock on the Grant Date.

 

                6.3           Option Period. 
The Option Period shall be determined by the Committee, and unless
otherwise specifically provided in the Award Agreement, no Option shall be
exercisable later than ten years from the Grant Date.  No Incentive Stock Option shall be
exercisable later than ten years from the Grant Date, provided that in the case
of an Employee who on the Grant Date owns or is deemed to own (within the
meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary,
the Incentive Stock Option shall not be exercisable later than five years from
the Grant Date.  Options may expire prior
to the end of the Option Period due to the Participant’s Termination of
Employment as provided in Section 8, or in accordance with any provision
of the Award Agreement.  No Option may be
exercised at any time unless the Option is valid and outstanding.

 

                6.4           Limitation on Amount of Incentive Stock Options.  The aggregate Fair Market Value (determined
as of each Option Grant Date) of Stock with respect to which a Participant’s
Incentive Stock Options are exercisable for the first time during any calendar
year (under this and all other stock option plans of the Company and any
Subsidiary) shall not exceed $100,000. 
Options or portions of Options exercisable as a result of acceleration
under Section 11.2 in excess of the $100,000 limit described herein shall
be treated as Nonqualified Stock Options for tax purposes, in accordance with
the first-grant ordering rules of Treas. Reg. § 1.422-4.

 

                6.5           Transferability of Options.  Except as otherwise provided in this Section 6.5,
no Option shall be transferable by a Participant otherwise than by will or the
laws of descent and distribution, and an Option shall be exercisable, during
the Participant’s lifetime, only by the Participant (or, in the event of the
Participant’s legal incapacity or incompetency, the Participant’s guardian or
legal representative).  The Committee may
in an Award Agreement allow a Participant, subject to any restrictions under Section 16(b) of
the Exchange Act, to transfer all or part of a Nonqualified Stock Option to (i) the
Participant’s spouse or lineal descendants (“Immediate Family Members”), (ii) trusts
for the exclusive benefit of the Participant and/or his Immediate Family
Members, or (iii) a partnership or limited liability company in which the
Participant and/or his Immediate Family Members are the only partners or
members, as applicable.  Such transfer
may be made by a Participant only if there is no consideration for the
transfer, and subsequent transfers of any Option shall be prohibited other than
in accordance with this Section 6.5 and by will or the laws of descent and
distribution.  Following a transfer of an
Option, the Option shall continue to be subject to the same terms and
conditions as were applicable immediately before the transfer, and Termination
of Employment or Service, retirement, Disability, satisfaction of service
requirements or performance objectives, and other conditions to exercise of an
Option shall be applied with respect to the original Participant.  However, for purposes of exercising the
Option, the term Participant shall refer to the transferee.  In addition, for purposes of the death
benefit provisions of Section 8, the Participant’s 

 

9

 

Representative
shall be deemed to refer to the transferee, the personal representative of the
transferee’s estate, or after final settlement of the transferee’s estate, the
successor or successors entitled thereto by law.

 

                6.6           Exercise.  An
Option may be exercised, so long as it is valid and outstanding, from time to
time in part or as a whole, subject to any limitations with respect to the
number of shares for which the Option may be exercised at a particular time and
to such other conditions (e.g., exercise could be conditioned on
performance) as the Committee in its discretion may specify upon granting the
Option or as otherwise provided in this Section 6.

 

                6.7           Method of Exercise. 
To exercise an Option, the Participant or the other person(s) entitled
to exercise the Option shall deliver to the Committee (i) a written notice
of exercise in such form as the Committee may prescribe, specifying the number
of full shares to be purchased; (ii) payment in full of the exercise price
in accordance with Section 6.8; and (iii) in the case of Nonqualified
Stock Options, any required withholding taxes as provided in Section 17.  No shares of Stock shall be issued unless the
Participant has fully complied with the provisions of this Section 6.7.

 

                6.8           Payment of Exercise Price.  To the extent provided in the Award Agreement
for an Option and subject to the rules of Section 16 of the Exchange
Act and any exchange on which the Stock is traded at any relevant time, payment
of the exercise price may be made (i) in cash; (ii) in shares of
Stock (based on the Fair Market Value of the Stock on the date the Option is
exercised) owned by the Participant (or jointly by the Participant and his
spouse) for at least six months (12 months in the case of Shares acquired by
exercise of an Incentive Stock Option) evidenced by negotiable certificates or
by a written attestation of ownership and consent to issuance; (iii) if
specifically allowed in the Award Agreement, by a written election to have the
Company retain that number of shares of Stock subject to the Option having an
aggregate Fair Market Value equal to the aggregate exercise price of the Option,
provided that for Incentive Stock Options, this right must be granted by the
Committee at the time the Option is granted and may not be added in any
modification of the Award Agreement; or (iv) by any combination
thereof.  Notwithstanding the preceding
sentence, any such right to exercise by delivering already owned shares or by
retaining shares of Stock subject to the Option shall be void from its
inception if such right is deemed to be a feature allowing deferral of
compensation with the meaning of Section 409A of the Code that would
eliminate the Option’s status as exempt from the deferred compensation rules of
that Section.  If permitted in the Award
Agreement, Restricted Stock (valued as if it were not subject to restrictions
on transfer or possibilities of forfeiture) issued to the Participant may be
tendered as payment of the exercise price of an Option.  If Restricted Stock is tendered as the
exercise price of an Option, a number of shares of Stock issued on exercise of
such Option, equal to the number of shares of Restricted Stock tendered as
consideration thereof, shall be subject to the same restrictions as the
Restricted Stock so tendered and shall be held by the secretary of the Company
pursuant to Section 9.1.  Any
surrender by a person subject to the reporting requirement of Section 16(b) of
the Exchange Act of previously owned shares of Stock to satisfy tax withholding
obligations arising upon exercise of an Option or SAR must comply with the
applicable provisions of Rule 16b-3 under the Exchange Act.

 

10

 

Section 7 — STOCK APPRECIATION RIGHTS

 

                7.1           Grant.  All
Stock Appreciation Rights (“SARs”) granted under the Plan shall be evidenced by
an Award Agreement in such form as the Committee may from time to time
approve.  All SARs are subject to the
terms and conditions of this Section 7 and such additional terms and
conditions contained in the Award Agreement, which need not be the same in each
case, not inconsistent with the Plan, as the Committee finds desirable.

 

                7.2           Exercise Price. 
The exercise price per share of Stock subject to an SAR shall be
specified in the Award Agreement and determined by the Committee at the time of
grant, but the exercise price shall not be less than Fair Market Value of the
Stock on the Grant Date.

 

                7.3           Exercise Period. 
The exercise period shall be determined by the Committee, and unless
otherwise specified in the Award Agreement, no SAR shall be exercisable later
than ten years from the Grant Date.  No
SAR may be exercised at any time unless such SAR is valid and outstanding as
provided in this Section 7.

 

                7.4           Nontransferability. 
No SAR shall be transferable other than by will or by the laws of
descent and distribution, and SARs shall be exercisable, during the Participant’s
lifetime, only by the Participant (or, in the event of the Participant’s legal
incapacity or incompetency, the Participant’s guardian or legal
representative).

 

7.5           Exercise.  An SAR may be exercised, so long as it is
valid and outstanding, from time to time in part or as a whole, subject to any
limitations with respect to the number of shares for which the SAR may be
exercised at a particular time and to such other conditions (e.g.,
exercise could be conditioned on performance) as the Committee in its
discretion may specify upon granting the SAR or as otherwise provided in this Section 7.

 

7.6           Method of Exercise.  To exercise an SAR, the Participant or the
other person(s) entitled to exercise the SAR shall give written notice of
exercise to the Committee, specifying the number of full shares with respect to
which the SAR is being exercised.

 

7.7           Payment Upon Exercise.  Upon the exercise of an SAR, a Participant
shall be entitled to receive an amount of cash (subject to the SARs terms
complying with Section 16.1 hereof) or whole shares of Stock equal to the
amount by which the then Fair Market Value of one share of Stock exceeds the
exercise price per share specified in the Award Agreement, multiplied by the
number of shares with respect to which the SAR is exercised.  No fractional shares of Stock will be issued
upon the exercise of an SAR.  If the
calculation of the number of shares of Stock to be issued upon the exercise of
an SAR results in fractional shares, then the number of shares of Stock will be
rounded up to the nearest whole share of Stock. 
The number of shares of Stock to be delivered to the Participant upon
exercise of an SAR shall be based on the Fair Market Value of the Stock on the
date of exercise.

 

11

 

Section 8 — LIMITATIONS ON EXERCISE AFTER TERMINATION OF 

EMPLOYMENT OR SERVICE

 

                8.1           Exercise after Termination.  After a Participant’s Termination of
Employment or Service, an Award may be exercised or may mature only to the
extent that the Award was exercisable immediately before the Termination of
Employment or Service, but in no event after the expiration date of the Award
as specified in the Award Agreement. 
Except to the extent that shorter or longer periods are provided in the
Award Agreement, a Participant’s right to exercise or receive the unrestricted
value of an Award upon Termination of Employment or Service shall terminate:

 

                                (a)           At the expiration of one year in the
event of Disability of the Participant;

 

                                (b)           At the expiration of one year after
the Participant’s death if the Participant’s Termination of Employment or
Service occurs by reason of death, any Award exercised or realized under this
subparagraph (b) may be exercised by the legal representative of the
estate of the Participant or by the person or persons who acquire the right to
exercise such Award by bequest or inheritance; or

 

                                (c)           No later than three months after the
Participant’s Termination of Employment or Service for any reason other than
those described in (a) and (b) above or termination for “Cause” as
described in Section 8.2.

 

                8.2           Termination for Cause.  Unless an Award agreement provides to the
contrary,. if the Committee determines that an Employee’s employment has been
terminated for Cause, the Employee shall forfeit any and all unexercised Awards
and all Awards having performance conditions not yet met or restrictions that
have not lapsed, immediately upon the Termination of Employment.  For purposes of this Plan, “Cause” shall have
the definition set forth in the employment agreement between the Company and
the Employee, if any; otherwise, “Cause” shall mean the Employee’s (i) willful
failure to substantially perform such Employee’s duties on behalf of the
Company, (ii) repeated gross negligence in performing such Optionee’s
duties, (iii) illegal conduct in performing such Employee’s duties, (iv) willful
and improper actions contrary to the Company’s interest, (v) repeated
refusal to comply with the reasonable and lawful instructions of management of
the company, or (vi) violation of the obligations imposed on the Employee
under any confidentiality or solicitation covenants to which the Employee is
bound under the terms of the Stock Option Agreement or otherwise.

 

Section 9 — RESTRICTED STOCK AWARDS

 

                9.1           Grant.  All
Restricted Stock Awards granted under the Plan shall be evidenced by an Award
Agreement in such form as the Committee may from time to time approve.  All Restricted Stock Awards are subject to
the terms and conditions in this Section 9, and such additional terms and
conditions contained in the Award Agreement, which need not be the same in each
case, not inconsistent with the provisions of the Plan, as the Committee finds
desirable.  The Company shall issue, in
the name of each Participant who is granted a Restricted Stock Award, a
certificate for the shares of Stock granted in the Award (subject to Section 13.3),
as soon as practicable after the Grant Date. 
The Secretary of the Company shall hold such certificates for the
Participant’s benefit until the Restriction Period lapses or the Restricted
Stock is forfeited to the Company in accordance with the Award Agreement.

 

12

 

                9.2           Restriction Period. 
The Restriction Period shall be determined by the Committee, and shall
commence on the Grant Date and expire at the time specified in the Award
Agreement.  The Committee may provide in
an Award Agreement that a Restriction Period that has not otherwise expired
will expire immediately upon the retirement, death or Disability of the
Participant.  The Committee may not
retain the discretion to lengthen the restriction period, if such change in the
Restriction Period would have the effect of delaying the date on which the
Award ceases being subject to a “substantial risk of forfeiture” within the
meaning of Sections 83(b) and 409A of the Code and therefore when it is
subject to Federal income tax.  Unless
otherwise provided in the Award Agreement, in the event of a Participant’s
Termination of Employment during the Restriction Period for any reason, the
Participant’s rights to the Stock subject to the Restricted Stock Award shall
be forfeited and all such Stock shall immediately be surrendered to the
Company.

 

                9.3           Rights of Participant.  Subject to the terms and conditions of the
Award Agreement, a Participant to whom Restricted Stock has been awarded shall
have the right to receive dividends thereon during the Restricted Period, to
vote the Restricted Stock and to enjoy all other stockholder rights with
respect thereto, except that (i) the Company shall retain custody of any
certificates evidencing the Restricted Stock during the Restricted Period, and (ii) the
Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the Restricted Stock during the Restricted Period.  Any attempt by a Participant to sell,
transfer, pledge, assign or otherwise dispose of Restricted Stock shall cause
immediate forfeiture of the Award.  The
Committee may provide in an Award Agreement that dividends paid on Restricted
Stock must be reinvested in shares of Stock, which may or may not be subject to
the same Restriction Period applicable to the original Restricted Stock
Award.  In the event of any adjustment as
provided in Section 3.2 or if any securities are received as a dividend on
Restricted Stock, new or additional shares or securities shall be subject to
the same terms and conditions as the original Restricted Stock.

 

                9.4           Expiration of Restriction Period.  At the expiration of the Restriction Period,
the restrictions contained in Section 9.3 and in the Award Agreement
shall, except as otherwise specifically provided in the Award Agreement,
expire.

 

                9.5           Nontransferability. 
No Restricted Stock Award shall be transferable other than by will or
the laws of descent and distribution until any restrictions applicable to such
Award have lapsed and a certificate evidencing the Participant’s ownership of
the stock free of restrictions has been issued in accordance with Section 16.3.

 

Section 10 — RESTRICTED STOCK UNITS

 

                10.1         General.  All
Restricted Stock Units granted under the Plan shall be evidenced by an Award
Agreement in such form as the Committee may from time to time approve but at a
minimum shall contain such terms, conditions and restrictions on the Restricted
Stock Unit and the period for which they apply, which need not be the same in
each case, not inconsistent with the provisions of the Plan, as the Committee
finds desirable.  Upon the lapse of the
restrictions, the Participant shall be entitled to receive from the Company a
number of shares of Stock equal to the number of Restricted Stock Units granted
under the Award.

 

13

 

                10.2         Rights of Participant.  A Participant shall not, with respect to a
Restricted Stock Unit, have any rights as a shareholder of the Company, such as
the right to vote the shares or the right to receive dividends and other
distributions, at any time before the Participant has become the holder of
record of the Stock, except as provided in Section 10.4 below.

 

                10.3         Nontransferability. 
No Restricted Stock Unit shall be transferable other than by will or by
the laws of descent and distribution.

 

                10.4         Dividends.  The
Committee may provide in the Award Agreement for a Cash Dividend Right or a
Dividend Unit Award in tandem with the Restricted Stock Unit Award.

 

Section 11 — PERFORMANCE AWARDS

 

                11.1         Grant. 
Performance Awards may be granted based upon, payable in or otherwise
related to, in whole or in part, shares of Stock or cash, although this Plan
need not be the exclusive mechanism for grant cash-based incentive
compensation.  Performance Awards granted
under the Plan shall be evidenced by an Award Agreement in such form as the Committee
may from time to time approve but at a minimum shall set forth (i) the
amount of cash, the number of shares of Stock, or combination of both that the
Participant may receive, (ii) the performance objectives (the “Performance
Goals”), (iii) the performance period over which the performance measure
is determined (the “Performance Period”), (iv) the date on which payment
under the Award, if any, will be made, and (v) such additional terms and
conditions, which need not be the same in each case, not inconsistent with the
Plan, as the Committee finds desirable. 
The Performance Goals may include, but need not be limited to, those
established to comply with the performance criteria in Section 14 hereof.

 

                11.2         Payment.  The
Committee shall establish the method of calculating the amount of payment to be
made under a Performance Award of the Performance Goals.  After completion of a Performance Period, the
performance of the Company or the Employee will be measured against the
Performance Goals, and the Committee will determine whether all, none, or any
portion of a Performance Award will be paid.

 

                11.3         Revision of Performance Goals.  As to any Performance Award not subject to Section 13,
at any time before the end of a Performance Period, the Committee may revise
the Performance Goals if unforeseen events occur that have a substantial effect
on the performance of the Company or the Employee, and that the Committee
determines make the application of the Performance Goals unfair unless a
revision is made.

 

                11.4         Rights of Participant.  A Participant shall not, with respect to a
Performance Award under which Stock may in the future be issued, have any
rights as a shareholder of the Company, such as the right to vote the shares or
the right to receive dividends and other distributions, at any time before the
Participant has become the holder of record of the Stock, except as provided in
Section 11.6 below.

 

14

 

 

 

                11.5         Nontransferability. 
No Performance Share Award shall be transferable other than by will or
by the laws of descent and distribution.

 

                11.6         Dividends.  The
Committee may provide in the Award Agreement for a Performance Award for shares
of Stock that any dividends declared on the Stock during the Performance Period
that would have been paid with respect to such shares had they been owned by
the Participant be paid in cash or additional shares to the Participant at the
end of the Performance Period.

 

Section 12 — OTHER INCENTIVE AWARDS

 

                Other Incentive Awards may be
granted in such amounts, upon such terms and at such times as the Committee
shall determine.  Other Incentive Awards
may be granted based upon, payable in or otherwise related to, in whole or in
part, shares of Stock or cash, although this Plan need not be the exclusive
mechanism for grant cash-based incentive compensation.  Each grant of an Other Incentive Award shall
be evidenced by an Award Agreement that shall specify the amount of the Other
Incentive Award and the terms, conditions, restrictions and limitations
applicable to such Award Payment of Other Incentive Awards shall be made at
such times and in such form, which may be cash, shares of Stock or other
property (or a combination thereof), as established by the Committee, subject
to the terms of the Plan.

 

Section 13 — MINIMUM VESTING REQUIREMENTS

 

                Except with respect to a maximum
of five percent of the shares of Stock authorized in Section 3.1(a), any
Restricted Stock Award, Restricted Stock Unit, or Other Incentive Award that is
payable in shares of Stock that vest solely on the basis of a Participant’s
continued employment or service with the Company will not vest any more rapidly
than annual pro-rata vesting over a three-year period, and any Award that vests
upon the attainment of performance goals will provide for a performance period
of at least 12 months, in either case, subject to the provisions of Section 15
and the Committee’s discretion to accelerate vesting upon a Participant’s
death, Disability or retirement.

 

Section 14 — SECTION 162(m) COMPENSATION

 

                14.1         Code Section 162(m) Requirements.  Notwithstanding any other provision of the
Plan, if the Committee determines, at the time a Restricted Stock Award,
Restricted Stock Unit, Performance Award or Other Incentive Award is granted to
a Participant who is, or is likely to be as of the end of the tax year in which
the Company would claim a tax deduction in connection with such Award, a Named
Executive, the Committee may provide that this Section 14 is applicable to
such Award.

 

                14.2         Performance Criteria. 
If an Award is subject to this Section 14, the distribution of
shares of Stock under the Award shall be subject to the achievement of one or
more objective performance goals established by and the satisfaction of which
is certified by, the Committee, which shall be based on the attainment of
specified levels of one of or any combination of the following “performance
criteria” for the Company as a whole or any business unit of the 

 

15

 

Company,
as reported or calculated by the Company: 
(i) revenues, (ii) earnings from operations, earnings before
or after taxes, earnings before or after interest, depreciation, amortization,
incentives service fees or extraordinary or special items; (iii) net
income or net income per share (basic or diluted); (iv) return on assets,
return on investment, return on capital, or return on equity; (v) cash
flow, free cash flow, cash flow return on investment, or net cash provided by
operations; (vi) economic value created; (vii) one or more operating
ratios; (viii) stock price, dividends or total stockholder return; (ix) the
accomplishment of mergers, acquisitions, dispositions, public offerings or similar
extraordinary business transactions, or (x) quality goals that are
objectively determinable (collectively, the “Performance Criteria”).  Such performance goals also may be based on
the achievement of specified levels of Company performance (or performance of
an applicable affiliate, division or business unit of the Company) under one or
more of the Performance Criteria described above relative to the performance of
other corporations.  Such performance
goals shall be set by the Committee over a specified performance period that
shall not be shorter than one year and otherwise within the time period
prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of
the Code, or any successor provision thereto, and the regulations thereunder.  Requirements shall be established in writing
by the Committee based on one or more performance goals as set forth in this Section 14.2
not later than 90 days after commencement of the performance period with
respect to such Award, provided that the outcome of the performance in respect
of the goals remains substantially uncertain as of such time.

 

                14.3         Adjustment of Awards. 
Notwithstanding any provision of the Plan to the contrary, with respect
to any Award that is subject to this Section 14, the Committee may adjust
downwards, but not upwards, the amount payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance goals
except in the case of the death or Disability of the Named Executive or upon a Change
in Control.

 

Section 15 — ADJUSTMENTS UPON CHANGE OF CONTROL,

OR CERTAIN OTHER TRANSACTIONS

 

                15.1         Change of Control.

 

                                (a)           Options and SARs.  The Committee, in its discretion, may provide
in an Award Agreement that each outstanding Option and SAR shall become
exercisable in full in the event of a Change of Control.  In addition, in the event of a Change of
Control, each outstanding Option and SAR shall be assumed or an equivalent
option or right shall be substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. 
Except where such discretion would be prohibited under Section 409A
of the Code, the Committee shall have the discretion to revoke or limit the
acceleration of exercisability of an Option or SAR at any time before and
within 20 business days following the date a Change of Control is approved by
the Board or otherwise occurs.  Unless
the Committee believes that cash payment would make an Option or SAR not
otherwise subject to Code Section 409A “deferred compensation” within the
meaning of that Section, which deferred compensation would not be in compliance
with Code Section 409A, a Participant may be entitled to receive, in lieu
of the exercise of any Option or SAR, a cash payment in an amount equal to the
difference between the exercise price of the Option or SAR and (A) in the
case of a tender offer or cash exchange offer, the final offer price 

 

16

 

paid
per share of Stock, multiplied by the number of shares of Stock covered by the
Option or SAR, or (B) in the case of any other Change of Control, the
aggregate Fair Market Value of the shares of Stock covered by the Option.

 

                                (b)           Restricted Stock.  The Committee, in its discretion, may provide
in an Award Agreement that in the event of a Change of Control, the Restriction
Period of any Restricted Stock Award shall lapse.

 

                                (c)           Assumption of Option or SAR.  For purposes of Section 15.1(a), an
Option or SAR shall be considered assumed if the Committee determines, at the
time of issuance of the stock or other consideration upon such Change of
Control, that the holder of the Option or SAR would be entitled to receive upon
exercise the same number and kind of shares of stock or the same amount of
property, cash or securities as the holder would have been entitled to receive
after the effective time of the transaction if the holder had been, immediately
before the effective time of the transaction, the holder of the number of
shares of Stock covered by the Option or SAR at such time (whether or not the
Option or SAR was then exercisable and after giving effect to any adjustments
in the number of Shares covered by the Option or SAR as provided in Section 3.2).  If the consideration to be received in a
Change of Control transaction is not solely common stock of the successor
corporation or its Parent, the Committee shall provide for the consideration to
be received upon exercise of the Option or SAR to be solely common stock of the
successor corporation or its Parent equal to the Fair Market Value of the
consideration per share received by holders of Stock in the transaction.

 

                15.2         Certain Distributions.  In the event of any distribution to the
Company’s shareholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Committee may, in its discretion,
appropriately adjust the exercise price covered by each outstanding Option or
SAR to reflect the effect of such distribution.

 

                15.3         Other Adjustments. 
The Committee is authorized to make, in its sole discretion and without
the consent of Participants, adjustments to the terms and conditions of, and
the criteria included in, Awards in recognition of unusual and nonrecurring
events affecting the Company, or changes of applicable laws, regulations, or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

 

Section 16 — AMENDMENTS AND TERMINATION

 

                16.1         Amendments and Termination.  The Committee or the Board may terminate,
suspend, amend or alter the Plan, but no action of the Committee may:

 

                                (a)           Impair or adversely affect the rights
of a Participant under an outstanding Award theretofore granted, without the
Participant’s consent, other than as provided in Section 3.2 or 15;

 

                                (b)           Extend the Option Period or exercise
period of an SAR, or the 

 

17

 

vesting/payment
(and taxation) date of a Performance Award or a Restricted Stock Award or Unit
beyond that originally stated in the Award Agreement, unless and until the
Committee determines that such extension does not constitute a deferral of
compensation feature that would subject the Award to the excise taxes provided
under Code Section 409A;

 

                                (c)           Decrease the price of an Option or
the base price of any SAR to less than the Fair Market Value on the date the
Award was granted; or

 

                                (d)           Without the approval of the
shareholders:

 

                                                (i)            Increase the total amount of Stock
which may be delivered under the Plan;

 

                                                (ii)           Decrease the exercise price of any
Option or SAR to less than the exercise price on the Grant Date;

 

                                                (iii)          Extend the period during which Awards
may be granted; or

 

                                                (iv)          In the case of an outstanding Award
intended to be eligible for the performance-based compensation exemption under Section 162(m) of
the Code, the Committee shall not, without the approval of a majority of the
stockholders of the Company, amend the Plan or the Award in a manner that would
adversely affect the Award’s continued eligibility for the performance-based
compensation exemption under Section 162(m) of the Code.

 

                16. 2        Conditions on Awards. 
In granting an Award, the Committee may establish any conditions that it
determines are consistent with the purposes and provisions of the Plan,
including, without limitation, a condition that the granting of an Award is
subject to the surrender for cancellation of any or all outstanding Awards held
by the Participant.

 

                16.3         No Repricing.  Except for adjustments made
pursuant to Section 3.2, the exercise price for any outstanding Option or
SAR shall not be decreased after the Grant Date, nor may any outstanding Option
or SAR be surrendered to the Company as consideration for the grant of a new
Option or SAR with a lower exercise price.

 

                16.4         No Reload Rights.  Awards shall not contain any
provision entitling the Participant to an automatic grant of additional Awards
in connection with any exercise of the original Award.

 

                16.5         Selective Amendments.  Any amendment or alteration of the Plan may
be limited to, or may exclude from its effect, particular classes of
Participants.

 

Section 17 — GENERAL PROVISIONS

 

                17.1         Section 409A Compliance.  Notwithstanding any other provision of the
Plan, any Award under the Plan that comes within the meaning of Code Section 409A’s
definition of “deferred compensation” shall be designed and granted in such a
way as to comply with that 

 

18

 

Code
Section’s election timing rules, limitation on distribution triggering events,
and must specify in the Award Agreement the time and form of payment of the
Award, subject only to delay in accordance with Code Section 409A’s
provisions, and never subject to acceleration.

 

                17.2         Issuance of Stock. 
As soon as practicable following exercise or maturity of an Award to be
satisfied in Stock, and subject to Section 17.5, the Company will deliver
to the Participant the shares of Stock acquired upon such exercise or maturity
either by (i) physical delivery of the certificate(s) for such shares
or (ii) book entry to a brokerage account of the Participant, free and
clear of any lapsed restrictions.

 

                17.3         Unfunded Status of Plan.  The Plan is intended to constitute an “unfunded”
plan for incentive compensation, and the Plan is not intended to constitute a
plan subject to the provisions of the Employee Retirement Income Security Act
of 1974, as amended, and shall not extend, with respect to any payments not yet
made to a Participant, any rights that are greater than those of a general
creditor of the Company.

 

                17.4         Transfers, Leaves of Absence and Other Changes in
Employment Status.  For purposes of
the Plan (i) a transfer of an Employee from the Company to a Subsidiary or
vice versa, or from one Subsidiary to another, or (ii) a leave of absence
not in excess of 90 days duly authorized in writing by the Company or a
Subsidiary for military service, sickness or any other purpose approved by the
Company or a Subsidiary, shall not be Termination of Employment.  The Committee, in its sole discretion subject
to the terms of the Award Agreement, shall determine the disposition of all
Awards made under the Plan in all cases involving any substantial change in
employment status other than an event described in this Section 16.3.

 

                17.5         Restrictions on Distribution of Stock.  The Committee may require Participants
receiving Stock pursuant to any Award under the Plan to represent to and agree
with the Company in writing that the Participant is acquiring the Stock for
investment without a view to distribution thereof.  No Stock shall be issued or transferred
pursuant to an Award unless the Committee determines, in its sole discretion,
that such issuance or transfer complies with all relevant provisions of law,
including but not limited to, the (i) limitations, if any, imposed in the
state of issuance or transfer, (ii) restrictions, if any, imposed by the
Securities Act of 1933, as amended, the Exchange Act, and the rules and
regulations promulgated thereunder, and (iii) requirements of any stock
exchange upon which the Stock may then be listed.  The certificates for Stock issued pursuant to
an Award may include any legend that the Committee deems appropriate to reflect
any restrictions on transfer.  The
Company shall not be obligated to register any securities covered hereby or to
take any affirmative action in order to facilitate the sale, transfer or other
disposition of Stock issued pursuant to an Award.

 

                17.6         Assignment Prohibited.  Subject to the provisions of the Plan and the
Award Agreement, no Award shall be assigned, transferred, pledged or otherwise
encumbered by the Participant otherwise than by will or by the laws of descent
and distribution, and an Award shall be exercisable, during the Participant’s
lifetime, only by the Participant. 
Awards shall not be pledged or hypothecated in any way, and shall not be
subject to any execution, attachment, or similar process.  Any attempted transfer, assignment, pledge,
hypothecation or other disposition of an Award contrary to the provisions of
the Plan, or the levy of any process upon an Award, shall be null, void and
without effect.

 

19

 

                17.7         Other Compensation Plans.  Nothing contained in the Plan shall prevent
the Company from adopting other compensation arrangements, subject to
shareholder approval if such approval is required.

 

                17.8         Limitation of Authority.  No person shall at any time have any right to
receive an Award hereunder and no person other than a duly authorized member of
the Committee or an officer of the Committee duly authorized by the Committee
shall have authority to enter into an agreement on behalf of the Company for
the granting of an Award or to make any representation or warranty with respect
thereto.  Participants shall have no
rights in respect to any Award except as set forth in the Plan and the
applicable Award Agreement.

 

                17.9         No Right to Employment.  Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board or the
Committee under the Plan or any Award Agreement, nor any provision of the Plan,
shall be construed as giving to any person the right to be retained in the
employ or service of the Company or any other entity as an employee, director
or independent contractor or to interfere in any way with the right of the
Company or any other entity to terminate any person’s service or employment at
any time.

 

                17.10       Not a Shareholder. 
The person or persons entitled to exercise, or who have exercised, an
Option or SAR shall not be entitled to any rights as a shareholder of the
Company with respect to any Stock to be issued upon such exercise until such
persons or persons shall have become the holder of record of such Stock.

 

                17.11       Severability.  If
any provision of this Plan is found 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.

 

                17.12       Headings.  The
headings in this Plan have been inserted solely for convenience of reference
and shall not be considered in the interpretation or construction of this Plan.

 

                17.13       Governing Law. 
The validity, interpretation, construction and administration of this
Plan shall be governed by the laws of the Company’s state of incorporation, as
it may change from time to time.

 

Section 18 — TAXES

 

                18.1         Tax Withholding. 
All Participants shall make arrangements satisfactory to the Committee
to pay to the Company or a Subsidiary, any federal, state or local taxes
required to be withheld with respect to an Award issued under the Plan at the
time such taxes are required to be withheld. 
If a Participant fails to make such tax payments, the Company and its
Subsidiary shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant,
including a payment related to any Award under the Plan.

 

20

 

                18.2         Share Withholding. 
If permitted by the Committee in an Award Agreement, a tax withholding
obligation may be satisfied by the Company retaining shares of Stock with a
Fair Market Value equal to the amount required to be withheld if the Committee
first determines that such a feature would not bring the Award within the
definition of deferred compensation for purposes of Section 409A of the
Code, or would comply with that Code Section.

 

                18.3         Tax Reporting. 
The Company shall reflect the exercise of any Incentive Stock Option on
an informational report as required by Section 6039 of the Code no later
than January 31st of the year following exercise.  The compensation resulting from the exercise
of a Nonqualified Stock Option or SAR, the lapse of the restrictions of a
Restricted Stock Award, or the satisfaction of the criteria of a Performance
Share Award, and related income and employment tax withholding related thereto,
shall be reported on the Employee’s W-2 Form for the year of exercise or
vesting (as the case may be) or required by the Code.

 

Section 19 — EFFECTIVE DATE OF PLAN

 

                The Plan shall be effective on
the date (the “Effective Date”) when the Board of Directors adopts the Plan,
subject to approval of the Plan by a majority of the total votes eligible to be
cast at a meeting of shareholders following adoption of the Plan by the Board
of Directors, which vote shall be taken within 12 months of the Effective
Date.  Awards may be granted before
obtaining shareholder approval of the Plan, but any such Awards shall be
contingent upon such shareholder approval being obtained and may not be exercised
before such approval.

 

Section 20 — TERM OF PLAN

 

                The Plan has no termination
date, provided that no Incentive Stock Option may be issued on or after the
tenth anniversary of the Effective Date as defined in Section 19.

 

*   *   *  
*   *

 

21

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