Document:

EXHIBIT 10.2

 

FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND WAIVER

 

THIS FIRST
AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND WAIVER (this “Amendment”),
dated as of March 15, 2006, is entered into between GB RETAIL FUNDING, LLC
(“Lender”), on the one hand, and GARDENBURGER, INC., an Oregon
corporation (“Borrower”), on the other.

 

RECITALS

 

A.                                   The
Borrower and the Lender are parties to a Credit and Security Agreement dated as
of November 22, 2005 (as amended, supplemented, restated and modified from
time to time, the “Credit Agreement”). Capitalized terms used in these
recitals have the meanings given to them in the Credit Agreement unless
otherwise specified.

 

B.                                     The
following Events of Default have occurred and are continuing under the Credit
Agreement: (a) an Event of Default due to the resignation of James W.
Linford from the position of Chief Operating Officer of the Borrower, which
resignation constitutes a Change of Control under the Credit Agreement in
violation of Section 7.1(c) thereof, and (b) an Event of Default
due to the Borrower’s failure to achieve, when measured for the test period
beginning December 31, 2005 through February 24, 2006, the minimum
Net Cash Flow required by Section 6.2(b) of the Credit Agreement in
violation of Section 7.1(b) thereof (collectively, the “Known
Existing Defaults”).

 

C.                                     The
Borrower has requested that the Lender waive the Known Existing Defaults and
amend the Credit Agreement on the terms and conditions set forth herein.

 

D.                                    The
Borrower is entering into this Amendment with the understanding and agreement
that, except as specifically provided herein, none of the Lender’s rights or
remedies as set forth in the Credit Agreement is being waived or modified by
the terms of this Amendment.

 

AMENDMENT

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.                                       Defined
Terms. Capitalized terms used in this Amendment which are defined in the
Credit Agreement shall have the same meanings as defined therein, unless
otherwise defined herein.

 

2.                                       Amendment
to Credit Agreement.

 

(a)                                  Section 6.2(b) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

 

“(b)                           Minimum Net Cash Flow. The Borrower
will achieve, for the test periods set forth below, Net Cash Flow in an amount
not less than the amount set forth below:

 

	
  Test Period

  	
   

  	
  Minimum Net Cash Flow

  	
   

  
	
  10/01/05 through 12/02/05

  	
   

  	
  $

  	
  (900,000

  	
  )

  
	
  10/29/05 through 12/30/05

  	
   

  	
  $

  	
  (600,000

  	
  )

  
	
  12/03/05 through 01/27/06

  	
   

  	
  $

  	
  (1,800,000

  	
  )

  
	
  12/31/05 through 02/24/06

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  01/28/06 through 03/31/06

  	
   

  	
  $

  	
  (742,000

  	
  )

  
	
  02/25/06 through 04/28/06

  	
   

  	
  $

  	
  (1,356,000

  	
  )

  
	
  04/01/06 through 06/02/06

  	
   

  	
  $

  	
  (524,000

  	
  )

  
	
  04/29/06 through 06/30/06

  	
   

  	
  $

  	
  (408,000

  	
  )

  
	
  06/03/06 through 07/28/06

  	
   

  	
  $

  	
  65,000”

  	
   

  

 

(b) Section 6.2(c) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

“(c)                            Minimum Gross Sales. The Borrower
will achieve, for each period described below, gross sales of not less than the
amount set forth for each such period:

 

	
  Period

  	
   

  	
  Minimum Gross Sales

  	
   

  
	
  10/01/05 through 10/31/05

  	
   

  	
  $

  	
  3,600,000

  	
   

  
	
  11/01/05 through 11/30/05

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  12/01/05 through 12/31/05

  	
   

  	
  $

  	
  3,600,000

  	
   

  
	
  01/01/06 through 01/31/06

  	
   

  	
  $

  	
  4,300,000

  	
   

  
	
  02/01/06 through 02/28/06

  	
   

  	
  $

  	
  3,900,000

  	
   

  
	
  03/01/06 through 03/31/06

  	
   

  	
  $

  	
  4,300,000

  	
   

  
	
  04/01/06 through 04/30/06

  	
   

  	
  $

  	
  4,350,000

  	
   

  
	
  05/01/06 through 05/31/06

  	
   

  	
  $

  	
  5,650,000

  	
   

  
	
  06/01/06 through 06/30/06

  	
   

  	
  $

  	
  5,100,000

  	
   

  
	
  07/01/06 through 07/31/06

  	
   

  	
  $

  	
  5,100,000”

  	
   

  

 

(c)                                  Section 6.2(d) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

“(d)                           Minimum Net Sales. In the event that
the Borrower fails to achieve the minimum gross sales required by Section 6.2(c) for
any period set forth above, the Borrower will achieve, for the period set forth
below ending on the same end date as the period for which the Borrower failed
such minimum gross sales covenant, cumulative Net Sales of not less than the
amount set forth for the period ending on such date set forth below:

 

	
  Period

  	
   

  	
  Minimum Net Sales

  	
   

  
	
  10/01/05 through 10/31/05

  	
   

  	
  $

  	
  3,100,000

  	
   

  
	
  10/01/05 through 11/30/05

  	
   

  	
  $

  	
  5,700,000

  	
   

  
	
  10/01/05 through 12/31/05

  	
   

  	
  $

  	
  8,600,000

  	
   

  
	
  10/01/05 through 01/31/06

  	
   

  	
  $

  	
  12,100,000

  	
   

  
	
  10/01/05 through 02/28/06

  	
   

  	
  $

  	
  15,500,000

  	
   

  
	
  10/01/05 through 03/31/06

  	
   

  	
  $

  	
  18,200,000

  	
   

  
	
  10/01/05 through 04/30/06

  	
   

  	
  $

  	
  21,500,000

  	
   

  
	
  10/01/05 through 05/31/06

  	
   

  	
  $

  	
  25,800,000

  	
   

  
	
  10/01/05 through 06/30/06

  	
   

  	
  $

  	
  29,900,000

  	
   

  
	
  10/01/05 through 07/31/06

  	
   

  	
  $

  	
  34,400,000”

  	
   

  

 

2

 

3.                                       Waiver
of Known Existing Defaults. The Lender hereby waives enforcement of its
rights against the Borrower arising from the Known Existing Defaults. This
waiver shall be effective only for the specific defaults comprising the Known
Existing Defaults, and in no event shall this waiver be deemed to be a waiver
of enforcement of the Lender’s rights with respect to any other Defaults or
Events of Default now existing or hereafter arising. Nothing contained in this
Amendment nor any communications between the Borrower and the Lender shall be a
waiver of any rights or remedies the Lender has or may have against the
Borrower, except as specifically provided herein. Except as specifically
provided herein, the Lender hereby reserves and preserves all of its rights and
remedies against the Borrower under the Credit Agreement and the other Loan
Documents.

 

4.                                       Release; Covenant Not to Sue.

 

(a)                                                          The Borrower hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing (each a “Released Party”), from any and all claims,
demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or
otherwise, which the Borrower has had, now has or has made claim to have
against any such person for or by reason of any act, omission, matter, cause or
thing whatsoever arising from the beginning of time to and including the date
of this Amendment, whether such claims, demands and causes of action are
matured or unmatured or known or unknown. It is the intention of the Borrower
in providing this release that the same shall be effective as a bar to each and
every claim, demand and cause of action specified, and in furtherance of this
intention it waives and relinquishes all rights and benefits under Section 1542
of the Civil Code of the State of California, which provides:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”

 

(b)                                                         The
Borrower acknowledges that it may hereafter discover facts different from
or in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agree that this instrument shall be
and remain effective in all respects notwithstanding any such differences or
additional facts. The Borrower understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the
provisions of such release.

 

3

 

(c)                                                          The
Borrower, on behalf of itself and its successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably, covenants
and agrees with and in favor of each Released Party above that it will not sue
(at law, in equity, in any regulatory proceeding or otherwise) any Released
Party on the basis of any claim released, remised and discharged by Borrower
pursuant to the above release. If the Borrower or any of its successors,
assigns or other legal representations violates the foregoing covenant, the
Borrower, for itself and its successors, assigns and legal representatives,
agrees to pay, in addition to such other damages as any Released Party may sustain
as a result of such violation, all attorneys’ fees and costs incurred by such
Released Party as a result of such violation.

 

(d)                                                         Notwithstanding
the foregoing, the Lender agrees that this Amendment does not release or
otherwise affect any of the Lender’s obligations or commitments under the Exit
Financing Commitment Letter attached to the Credit Agreement as Exhibit D.

 

5.                                       No
Other Changes. Except as explicitly amended by this Amendment, all of the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall apply to any Advance or Letter of Credit thereunder.

 

6.                                       Effectiveness
of this Amendment. The Lender must have received the following items, in form and
content acceptable to the Lender, before this Amendment is effective and before
the Lender is required to extend any credit to the Borrower as provided for by
this Amendment:

 

(a)                                  Amendment.
This Amendment fully executed in a sufficient number of counterparts for
distribution to the Lender and the Borrower.

 

(b)                                 Waiver
Fee. A non-refundable waiver fee in the amount of Fifteen Thousand Dollars
($15,000), which fee is fully earned as of and due and payable on the date
hereof.

 

(c)                                  Court
Approval. Evidence, in form and substance satisfactory to the Lender,
that this Amendment has been approved by the Bankruptcy Court.

 

(d)                                 Representations
and Warranties. The representations and warranties set forth herein and in
the Credit Agreement must be true and correct.

 

(e)                                  Other
Required Documentation. All other documents and legal matters in connection
with the transaction contemplated by this Amendment shall have been delivered
or executed or recorded and shall be in form and substance satisfactory to
Lender.

 

7.                                       Representations
and Warranties. The Borrower represents and warrants as follows:

 

(a)                                  Authority.
The Borrower has the requisite corporate power and authority to execute and
deliver this Amendment, and to perform its obligations hereunder and under
the Loan Documents (as amended or modified hereby) to which it is a party. The
execution, delivery and performance by the Borrower of this Amendment have been
duly approved by all necessary corporate action, have received all necessary
governmental

 

4

 

approval, if any, and do
not contravene any law or any contractual restrictions binding on Borrower. No
other corporate proceedings are necessary to consummate such transactions.

 

(b)                                 Enforceability.
This Amendment has been duly executed and delivered by Borrower. This Amendment
and each Loan Document (as amended or modified hereby) is the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, and is in full force and effect.

 

(c)                                  Representations
and Warranties. The representations and warranties contained in each Loan
Document (other than any such representations or warranties that, by their
terms, are specifically made as of a date other than the date hereof) are
correct on and as of the date hereof as though made on and as of the date
hereof.

 

(d)                                 No
Default. After giving effect to this Amendment, no event has occurred and
is continuing that constitutes an Event of Default, and by entering into this
Amendment, other than as expressly set forth herein, Lender is not waiving and
shall not be deemed to have waived any Event of Default that may exist.

 

8.                                       Choice
of Law. The validity of this Amendment, its construction, interpretation
and enforcement, and the rights of the parties hereunder, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of New York governing contracts entered into and wholly performed in that
State.

 

9.                                       Counterparts.
This Amendment may be executed in any number of counterparts and by different
parties and separate counterparts, each of which when so executed and
delivered, shall be deemed an original, and all of which, when taken together,
shall constitute one and the same instrument. Delivery of an executed counterpart of
a signature page to this Amendment by telefacsimile shall be effective as
delivery of a manually executed counterpart of this Amendment.

 

10.                                 Reference
to and Effect on the Loan Documents.

 

(a)                                  Upon
and after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereof” or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as modified and amended hereby.

 

(b)                                 Except
as specifically amended above, the Credit Agreement and all other Loan
Documents, remain unchanged, each is and shall continue to be in full force and
effect, and each is hereby in all respects ratified and confirmed and
constitutes the legal, valid, binding and enforceable obligations of Borrower
to Lender without defense, offset, claim or contribution.

 

(c)                                  Except
as provided herein, the execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Lender under any
of the Loan Documents or constitute a waiver of any provision of any of the
Loan

 

5

 

Documents.

 

(d)                                 To
the extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Credit
Agreement after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Credit Agreement as modified or amended hereby.

 

11.                                 No
Waiver. Except as expressly provided herein, the execution of this
Amendment and acceptance of any documents related hereto shall not be deemed to
be a waiver of any under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of this
Amendment.

 

12.                                 Ratification.
Borrower hereby restates, ratifies and reaffirms each and every term and
condition set forth in the Credit Agreement as amended hereby and in the Loan
Documents effective as of the date hereof.

 

13.                                 Estoppel.
To induce Lender to enter into this Amendment and to continue to make advances
to Borrower under the Credit Agreement, Borrower hereby acknowledges and agrees
that, after giving effect to this Amendment, as of the date hereof, there
exists no Event of Default and no right of offset, defense, counterclaim or
objection in favor of Borrower as against Lender with respect to the
Obligations.

 

14.                                 Costs
and Expenses. The Borrower hereby reaffirms its agreement under the Credit
Agreement to pay or reimburse the Lender on demand for all costs and expenses
incurred by the Lender in connection with the Credit Agreement, the Loan
Documents and all other documents contemplated thereby, including without
limitation all reasonable fees and disbursements of legal counsel. Without
limiting the generality of the foregoing, the Borrower specifically agrees to
pay all reasonable fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to
the Borrower under the Credit Agreement, or apply the proceeds of any loan, for
the purpose of paying any such fees, disbursements, costs and expenses.

 

[Remainder of page intentionally blank.]

 

6

 

IN WITNESS
WHEREOF, the parties have entered into this Amendment as of the date first
above written.

 

	
  “BORROWER”

  	
  “LENDER”

  
	
   

  	
   

  
	
  GARDENBURGER, INC.,

  	
  GB RETAIL FUNDING, LLC,
  a Delaware

  
	
  an Oregon corporation

  	
  limited liability
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Scott C. Wallace

  	
   

  	
  By:

  	
  /s/ Lawrence E. Klaff

  	
   

  
	
  Name: Scott C. Wallace

  	
  Name:

  	
  Lawrence E. Klaff

  
	
  Title: President and CEO

  	
  Title:

  	
  Principal and Managing Director

  
							

 

 

Acknowledged and consented to as of the date first written above.

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, acting through its Wells

Fargo Business Credit operating division,

as the Working Capital Facility Lender under

the Intercreditor Agreement

 

	
  By:

  	
  /s/ Harry L. Joe

  	
   

  
	
  Name:

  	
  Harry L. Joe

  
	
  Title:

  	
  Vice President

  
				

 

7Exhibit 10.1

 

KANBAY
INTERNATIONAL, INC.

2006
GLOBAL LEADERSHIP BONUS PLAN

 

Kanbay
International, Inc. (the “Company”) has adopted the Kanbay
International, Inc. 2006 Global Leadership Bonus Plan (the “Plan”) to provide
for the payment of performance bonuses to certain global leadership executives
of the Company and its Affiliates in consideration of their efforts during the 2006
fiscal year (January 1, 2006 to December 31, 2006). The purpose of the Plan is
to align the goals of those Executives participating in the Plan with the
business goals and objectives of the Company, to provide these Executives with
financial incentives to attain those goals and objectives and to reward these
Executives for meeting their Performance Targets.

 

1.                                      DEFINITIONS

 

For purposes of the Plan,
the following terms shall have the following definitions:

 

1.1                                 “Affiliate”
means any corporation or other business entity, or predecessor of such entity,
if any, that is a parent or subsidiary of the Company, including ownership of
50% or more of the voting or profits interests of the corporation or other
business entity.

 

1.2                                 “Base
Salary” means an Executive’s annual base salary rate for the 2006 fiscal year.

 

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

 

1.4                                 “Bonus
Schedule” means the bonus acknowledgement schedule provided to an Executive
that sets forth the Performance Bonus that the Executive is eligible to earn
under the Plan and the Performance Targets applicable to such Performance
Bonus.

 

1.5                                 “Cause” has the meaning set forth in
any employment, consulting, or other written agreement between the Executive
and the Company or an Affiliate. If there is no employment, consulting, or
other written agreement between the Executive and the Company or an Affiliate,
or if such agreement does not define “Cause,” then “Cause” will have the
meaning specified by the Committee in connection with the grant of any
Performance Bonus; provided, that if the Committee does not so specify, “Cause”
will mean the Executive’s:

 

(a)                                  willful
neglect of or continued failure to substantially perform, in any material
respect, his or her duties (as assigned to the Executive from time to time) or
obligations (including a violation of policy) to the Company or an Affiliate
other than any such failure resulting from his or her incapacity due to
physical or mental illness;

 

(b)                                 commission
of a willful act (including, without limitation, a dishonest or fraudulent act)
or a grossly negligent act, or the willful or grossly negligent omission to act
that is intended to cause, causes or is reasonably likely to cause material
harm to the Company or an Affiliate, monetarily, reputationally or otherwise;

 

(c)                                  commission
or conviction of, or plea of nolo contendere
to, any felony or any crime or offense involving dishonesty or fraud or that is
significantly injurious to the Company or an Affiliate, monetarily,
reputationally or otherwise; or

 

 

(d)                                 abuse
of illegal drugs or other controlled substances or habitual intoxication.

 

Unless otherwise defined
in the Executive’s employment or other agreement, an act or omission is “willful”
for this purpose if it was knowingly done, or knowingly omitted to be done, by
the Executive not in good faith and without reasonable belief that the act or
omission was in the best interest of the Company. The Committee has the
discretion, in other circumstances, to determine in good faith, from all the
facts and circumstances reasonably available to it, whether an Executive who is
under investigation for, or has been charged with, a crime will be deemed to
have committed it for purposes of this Plan.

 

1.6                                 “Change
in Control” means the occurrence of any one or more of the following:

 

(a)                                  Any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act), including a “group” (as defined in Section
13(d)(3) of the Exchange Act), other than (i) the Company, (ii) any
wholly-owned subsidiary of the Company, or (iii) any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Affiliate, becomes
a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company having fifty percent (50%)
or more of the combined voting power of the then-outstanding securities of the
Company that may be cast for the election of directors of the Company (other
than as a result of an issuance of securities initiated by the Company in the
ordinary course of business) (the “Company Voting Securities”); provided,
however, that the event described in this Section 1.6(a) shall not be deemed to
be a Change in Control by virtue of any underwriter temporarily holding
securities pursuant to an offering of such securities;

 

(b)                                 During
any period of two consecutive years, individuals who at the beginning of any
such period constitute the Board (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of the Board, unless the election, or
the nomination for election by the stockholders of the Company, of each new
director of the Company during such period was approved by a vote of at least
two-thirds of the Incumbent Directors then still in office;

 

(c)                                  As
the result of, or in connection with, any cash tender or exchange offer, merger
or other business combination, sale of all or substantially all of the assets
or contested election, or any combination of the foregoing transactions, less
than a majority of the combined voting power of the then-outstanding securities
of the Company or any successor corporation or entity entitled to vote
generally in the election of the directors of the Company or such other
corporation or entity after such transaction is held in the aggregate by the
holders of the securities of the Company entitled to vote generally in the
election of directors of the Company immediately prior to such transaction; or

 

(d)                                 The
stockholders of the Company approve a plan of complete liquidation of the
Company.

 

2

 

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

 

Further notwithstanding the foregoing, unless a majority of the
Incumbent Directors determines otherwise, no Change in Control shall be deemed
to have occurred with respect to a particular Executive if the Change in
Control results from actions or events in which such Executive is a participant
in a capacity other than solely as an officer, employee or director of the
Company or an Affiliate.

 

1.7                                 “Committee”
means the Compensation Committee of the Board that is responsible for setting
Performance Targets, certifying that such targets have been met under the Plan
and the administration of the Plan.

 

1.8                                 “Company”
means Kanbay International, Inc., a Delaware corporation, and any successor
thereto.

 

1.9                                 “Disability”
has the meaning set forth in any employment, consulting, or other written
agreement between the Executive and the Company or an Affiliate. If there is no
employment, consulting, or other written agreement between the Executive and
the Company or an Affiliate, or if such agreement does not define “Disability,”
then “Disability” will mean (a) long-term disability as defined under the
long-term disability plan of the Company or an Affiliate that covers that
Executive, (b) if the Executive is not covered by such a long-term disability
plan, disability as defined for purposes of eligibility for a disability award
under the U.S. Social Security Act, or (c) if the Executive is not covered by a
long-term disability plan or the U.S. Social Security Act, the Committee shall
determine whether the Executive has incurred a Disability, in its sole
discretion.

 

1.10                           “Executive”
means the global leadership executive selected by the Committee to participate
in this Plan.

 

1.11                           “Performance
Bonus” means the additional cash remuneration payable to an Executive pursuant
to the Plan.

 

1.12                           “Performance
Period” means the annual or quarterly period set forth in the applicable Bonus
Schedule.

 

1.13                           “Performance
Target” means any annual or quarterly quantitative objective or measurement
(including any individual, organizational or company-wide goal) that is
appropriate and relevant to the Executive for the Performance Period, as
determined by the Committee and set forth in the Bonus Schedule. Performance
Targets referring to global objectives will include performance metrics for the
Company and all Affiliates. Performance Targets referring to regional or
territory objectives will include performance metrics for the Company or its

 

3

 

Affiliates that operate in that region or territory. Performance
Targets under the Plan may include the following, all as specified in the Executive’s
Bonus Schedule:

 

(a)                                  net
earnings;

 

(b)                                 operating
earnings or income;

 

(c)                                  earnings
growth;

 

(d)                                 net
income (absolute or competitive growth rates comparative);

 

(e)                                  net
income applicable to common stock;

 

(f)                                    gross
revenue or revenue by pre-defined business segment (absolute or competitive
growth rates comparative);

 

(g)                                 revenue
backlog;

 

(h)                                 margins
realized on delivered services;

 

(i)                                     cash
flow, including operating cash flow, free cash flow, discounted cash flow
return on investment, and cash flow in excess of cost of capital;

 

(j)                                     earnings
per share of common stock;

 

(k)                                  return
on stockholders equity (absolute or peer-group comparative);

 

(l)                                     stock
price (absolute or peer-group comparative);

 

(m)                               absolute
and/or relative return on common stockholders equity;

 

(n)                                 absolute
and/or relative return on capital;

 

(o)                                 absolute
and/or relative return on assets;

 

(p)                                 economic
value added (income in excess of cost of capital);

 

(q)                                 customer
satisfaction;

 

(r)                                    expense
reduction; and

 

(s)                                  ratio
of operating expenses to operating revenues.

 

2.                                      ELIGIBILITY

 

Each Executive who
participates in this Plan will receive a Bonus Schedule that sets forth the
maximum Performance Bonus, expressed as a percentage of Executive’s Base
Salary, that he or she will be eligible to earn under the Plan. The Bonus
Schedule also will set forth the Performance Targets that have been established
by the Committee and that must be satisfied in order for the Executive to
receive his or her Performance Bonus. An Executive is not eligible to receive
any Performance Bonus under the Plan unless it is specifically mentioned in the
Bonus Schedule. Each Executive must return to the Committee an executed copy of
the Bonus Schedule to be eligible for Performance Bonuses under this Plan.

 

3.                                      PERFORMANCE
BONUSES

 

3.1                                 Amount
of Performance Bonus. The actual amount of the Performance Bonus that an
Executive receives will be based upon the attainment of the Performance Targets
set forth

 

4

 

in the Bonus Schedule. If a Performance Target is not fully and
completely achieved during the relevant Performance Period, then the applicable
Performance Bonus shall not be earned or paid.

 

3.2                                 Requirements
for Payment of Performance Bonus. An Executive will be entitled to receive
payment of the Performance Bonus for a Performance Period only if the Executive
is employed by the Company or one of its Affiliates on the date that the
Company (or Affiliate) pays the Performance Bonus for that Performance Period. Notwithstanding
the foregoing, and provided that all other terms and conditions of the Plan
have been satisfied:

 

(a)                                  if
the Executive’s employment is terminated after completion of the Performance
Period due to death, Disability or involuntary termination without Cause, the
Executive will be paid for any Performance Bonus he or she would have been paid
had he or she been employed on the date that the Company (or Affiliate) pays
the Performance Bonus for that Performance Period.

 

(b)                                 if
the Executive’s employment is terminated during a Performance Period due to
death or Disability, the Executive will be paid a portion of the Performance
Bonus he or she would have been paid had he or she been employed on the date
that the Company (or Affiliate) pays the Performance Bonus for that Performance
Period, pro rated based on the number of days elapsed during the Performance
Period before the Executive’s employment was terminated.

 

(c)                                  if
the Executive’s employment is involuntarily terminated by the Company or an
Affiliate without Cause during a Performance Period, the Committee, in its sole
discretion, may decide to pay the Executive a portion of the Performance Bonus
he or she would have been paid had he or she been employed on the date that the
Company (or Affiliate) pays the Performance Bonus for that Performance Period,
pro rated based on the number of days elapsed during the Performance Period
before the Executive’s employment was terminated.

 

3.3                                 Time
and Medium of Payment. An Executive’s earned Performance Bonus will be paid
in a lump sum no later than 90 days after the end of the 2006 fiscal year. The
Committee, in its discretion, may pay part or all of an Executive’s earned
Performance Bonus in shares of the Company’s common stock.

 

3.4                                 Committee
Certification. The Committee shall certify in writing, prior to payment of
any Performance Bonus hereunder to an Executive, that the Performance Targets
and any other material terms of the Plan were satisfied.

 

3.5                                 Change
in Control. If a Change in Control occurs and thereafter the Executive’s
employment is involuntarily terminated without Cause by the Company or an
Affiliate within the same fiscal year, the Executive will be paid the Executive’s
target bonus amount for all Performance Periods ending in the year in which the
Change in Control and termination occurred, as specified on the Bonus Schedule,
as if the Performance Targets had been met in full, and the Executive had been
employed on the date that the Performance Bonus was to be paid. Payment will be
made within thirty days of the Executive’s termination.

 

5

 

4.                                      GENERAL
TERMS AND CONDITIONS

 

4.1                                 Administration
by the Committee. The Committee will administer the Plan in accordance with
its terms, and will have all powers necessary to carry out the Plan’s
provisions. The Committee has full discretion to, and will, interpret the Plan
and determine all questions arising in its administration, interpretation and
application, including but not limited to questions of eligibility and the status
and rights of Executives and other persons. Any determination by the Committee
will be conclusive and binding on all persons. The Committee may delegate to
the Company’s Chief Executive Officer some or all of its authority under the
Plan, including the responsibility for setting Performance Targets (other than
with respect to himself), certifying whether such Performance Targets have been
met under the Plan, setting Performance Periods, selecting eligible executives,
and administering the Plan.

 

4.2                                 No
Assurance of Employment or Payment. Participation in the Plan does not
guarantee or imply continued employment. Except as required by applicable law,
nothing in this Plan or any Executive’s Bonus Schedule is intended to create an
employment agreement with an Executive. By participating in this Plan, the
Executive agrees that his or her employment is “at-will”, and the Executive or
the Company (or the Affiliate that employs the Executive) may terminate the
employment relationship at any time for any reason or no reason. Furthermore,
participation in the Plan does not guarantee payment of any Performance Bonus
amount.

 

4.3                                 Non-Payment
or Recovery. The Company or Affiliate may refuse to pay a Performance Bonus
or may recover a Performance Bonus previously paid if an error in the
calculation of a Performance Bonus has resulted in an overpayment to an
Executive. If an erroneous Performance Bonus payment is to be recovered, the
Executive agrees to remit payment to the Company or the Affiliate the full
amount of the monies being recovered within thirty (30) calendar days after the
date of notice from the Company. Recovery may be made by the Company or an
Affiliate at any time during and after the Executive’s employment until the
outstanding balance is satisfied in full. This Section 4.3 shall continue to be
in effect after the expiration of this Plan and/or the expiration or
termination of the Executive’s employment with the Company or its Affiliates.

 

4.4                                 Amendment
or Termination. The Company reserves the right to amend or terminate the
Plan at any time. Any such amendment or termination will be made pursuant to a
resolution of the Board.

 

4.5                                 Complete
Agreement. The
terms and conditions this Plan, together with the applicable Executive’s Bonus
Schedule, constitute the complete and exclusive statement of the understanding
between the Company, its Affiliates, and each Executive, which supersedes and
excludes all prior or contemporaneous proposals, understandings, agreements or
representations, oral or written, between the Company, its Affiliates, and each
Executive, with respect to the subject matter hereof. If there is
any conflict between the terms of the applicable Bonus Schedule and this Plan
document, the terms of this Plan document will control.

 

4.6                                 Applicable
Law. Except to the extent preempted by federal law, the Plan will be
construed and administered under the laws of the State of Illinois, without
giving effect to its conflict of laws principles.

 

6

 

4.7                                 Withholding.
The Company or an Affiliate may withhold from any payment that it is required
to make under the Plan amounts sufficient to satisfy applicable withholding
requirements under any federal, state or local law.

 

7

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