Document:

Non-binding Letter of Intent

 Exhibit 10.1 
  
 

 
  
 PO BOX 3761 
 LAFAYETTE, LA 70502 
 Office: 337-896-6664
     Fax: 337-896-6655 
  
 September 9, 2005 

 
 Mr. Robert H. Rhyne Jr. 
 Mr. Brent Trauth 
 Preheat, Inc. 
 4730 Highway 90 E 
 Broussard, Louisiana 70518 
  
 Dear Sirs: 
  
 This letter (“Letter of Intent”), when agreed to and accepted by you for the purposes provided herein, shall evidence our respective intentions
to proceed with negotiations, in good faith, with the objective of moving forward toward the execution of a definitive agreement (the “Common Stock Purchase Agreement”) providing for the acquisition by OMNI Energy Services Corp. or its
assignee (the “Purchaser”) from 100% of the shareholders of Preheat, Inc. (hereinafter referred to as the “Sellers”) of all of the issued and outstanding capital stock of Preheat, Inc. (collectively referred to herein as
“Preheat”) free and clear of all liens, claims and encumbrances, which is engaged in the business of oilfield equipment rentals, wellhead installations, preheating services, stress relieving services, and environmental maintenance
services. 
  
 It is understood that this Letter of Intent is not
intended to constitute a binding agreement by and between Purchaser and Sellers to enter into the Common Stock Purchase Agreement, and no liability or obligation of any nature whatsoever is intended to be created hereunder, except as expressly set
forth in this Letter of Intent. Purchaser and Sellers hereby agree to use their reasonable best efforts to negotiate, in good faith, the Common Stock Purchase Agreement as soon as practicable and within the time frame provided herein. This Letter of
Intent does not contain all matters on which agreement must be reached in order to consummate the transactions contemplated herein, as it is intended solely as an outline of certain material terms. 
  
 The transactions contemplated in this Letter of Intent and the Common Stock
Purchase Agreement are subject in all respects to the following terms and conditions: 
  
 1. Purchase of Stock by Purchaser; Purchase Price; Consideration. 
  
 a. Purchaser shall acquire 100% of the issued and outstanding common stock of Preheat from Sellers (it being represented and warranted by Sellers by
signing this letter that the capital stock of Preheat consists only of common stock) free and clear of all liens, claims and encumbrances. Adequate provisions for federal and state income taxes on taxable income through the date of Closing shall be
estimated by Preheat, and sufficient cash shall be on hand at the date of Closing to pay such taxes. In addition to the amount estimated for federal and state income taxes as discussed above, there shall be sufficient cash and working capital on
hand at Closing to allow Preheat to continue to operate in the 

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ordinary course of business consistent with past practices without the injection of cash from the Purchaser. The amount of working capital to be on
hand at the date of Closing shall be mutually agreed upon by the Sellers and Purchaser but in no event shall the amount of working capital on hand at closing be less than the amount of working capital as set forth on the Preheat balance sheet as of
June 30, 2005 provided by Sellers to Purchaser (see Exhibit 1). 
  
 b. Unless otherwise agreed to by both parties, the consideration shall be TWENTY-TWO MILLION FIVE HUNDRED THOUSAND Dollars ($22,500,000) plus certain assumed long-term debt set forth below to be paid and/or assumed in the following manner:

  

	 	(i)	SIXTEEN MILLION Dollars ($16,000,000), payable by cashier’s check or by wire transfer, at Closing; 

  

	 	(ii)	TWO MILLION FIVE HUNDRED THOUSAND Dollars ($2,500,000) payable at Closing in common stock of Purchaser issued at a per share amount equal to the average closing sale price of the
Purchaser’s common shares for the ten (10) consecutive trading days prior to closing (“Issue Share Price”); 

  

	 	(iii)	FOUR MILLION Dollars ($4,000,000), payable by a Seller Note (“Seller Note Number One”). Terms of the Seller Note Number One are: (a) TWO MILLION SIX HUNDRED SIXTY-SIX
THOUSAND SIX HUNDRED SIXTY-SIX AND 66/100 Dollars ($2,666,666.66), payable by cashier’s check or by wire transfer, at the conclusion of twenty four (24) consecutive months of Sellers’ employment with Purchaser. In the event that
either Seller terminates his employment prior to the 24 month employment contract, Sellers will forfeit all rights to the remaining unpaid balance of Seller Note Number One; and (b) ONE MILLION THREE HUNDRED THIRTY-THREE THOUSAND THREE HUNDRED
THIRTY-THREE AND 34/100 Dollars ($1,333,333.34), payable by cashier’s check or by wire transfer, at the conclusion of thirty six (36) consecutive months of Sellers employment with Purchaser. In the event that either Seller terminates his
employment prior to the 36 month employment contract, Sellers will forfeit all rights to the remaining unpaid balance of Seller Note Number One. Additionally, at closing Sellers agree to deposit One Million Dollars cash or an equivalent amount of
Purchaser common stock into an escrow account to be used as an inducement to retain certain of Preheat’s key employees throughout the thirty six (36) consecutive months of Sellers’ employment period. Seller Note Number One shall be
callable at any time, at face value, by the Purchaser during the term of the note and will, at all times, be subordinate to the Purchaser’s senior lenders. Seller Note Number One shall mature 36 months from the closing date, will accrue
interest at the rate of 5% per annum and shall be convertible into the Purchaser’s common stock at the Issue Share Price, at a time, and under terms and conditions, which are negotiated by the parties. 

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	 	(iv)	Purchaser shall assume, at Closing, certain bank and other long-term debt as set forth on Sellers’ June 30, 2005 balance sheet, but in no event to exceed, $810,000 payable
to IberiaBank (Note #539494), $525,000 to IberiaBank (Note #5300099719) and $533,333 to C. Mann – Mud Savers. 

  
 2. Employment Contracts; Non-Compete Agreements. 
  

a. At the date of Closing, certain key employees of Preheat shall enter into Employment Contracts with Purchaser for not more than a three
(3) year period commencing upon the date of Closing, providing a salary and benefits (including employee stock options) comparable to other members of Purchaser’s senior management in comparable positions. The terms and provisions of those
Employment Contracts, and the salary, benefits and employee stock options, between Purchaser and key employees of Preheat shall be negotiated by Purchaser and Seller prior to Closing. 
  
 b. These key employees shall also be required to execute a non-compete agreement in which they agree not to compete in a
similar business of Purchaser. The term of the non-compete agreement shall be for a period of not less than two (2) years commencing upon the termination of their employment contract with Purchaser, and shall contain such other provisions as
shall be mutually agreed upon prior to Closing. 
  
 3.
Conditions. The Closing will be subject to the satisfaction of various conditions to be satisfied as of the date of Closing, which shall include, without limitation, the following: 
  
 a. Common Stock Purchase Agreement. Purchaser and Sellers
shall have negotiated, executed, and delivered a mutually satisfactory Common Stock Purchase Agreement and related documents which shall provide for the transactions contemplated hereby and include (without limitation): (i) representations and
warranties of Purchaser and Sellers as are mutually acceptable and customary for a transaction of the nature set forth herein; (ii) Closing conditions (including those specified herein) as are mutually acceptable; (iii) covenants pending
prior to Closing and in effect thereafter (including those specified herein) as are mutually acceptable; (iv) indemnities as are mutually acceptable, including indemnities, if any, in favor of key Preheat employees which are at least as
extensive as those which are currently in effect; and (v) forms of opinions of counsel as are mutually acceptable and customary for a transaction of the nature set forth herein. 
  
 b. Other Documents; Legal Opinions. Each other instrument contemplated by the Common Stock Purchase Agreement
shall have been executed and delivered by each signatory hereto, and the opinions of counsel shall have been delivered. 
  
 c. Corporate and Shareholder Approvals. The Common Stock Purchase Agreement and the transactions contemplated thereby shall have been
approved by the respective boards of directors of Preheat and Purchaser, the Purchaser’s senior lenders and the shareholders of Preheat. 

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 d. Consents and
Approvals. All necessary government filings and approvals relating to the transactions contemplated by this Letter of Intent and the Common Stock Purchase Agreement, and all consents and approvals of third parties necessary for the
consummation of the transactions contemplated by this Letter of Intent and the Common Stock Purchase Agreement, shall have been obtained. 
  
 e. Financial Statements. Prior to closing, Purchaser shall have received financial statements of Preheat for all of its prior fiscal years
(since inception) and monthly financial statements of Preheat for the months subsequent to the end of the most recently completed fiscal year, which shall be satisfactory to Purchaser. 
  
 f. Due Diligence. Purchaser shall have conducted the legal, environmental, business, and financial due
diligence reviews of Preheat (the “Due Diligence”) it considers necessary, the results of which shall be materially consistent with Sellers’ representations and warranties regarding such matters. 
  
 g. Conditions Precedent. The obligations of the parties to
consummate the transactions contemplated by the Common Stock Purchase Agreement shall be subject to certain conditions precedent, including, without limitation, the following: 
  
 (i) The obligation of the Purchaser to perform in accordance with the Common Stock Purchase Agreement shall be subject to
the completion of satisfactory financing arrangements required to provide the funding necessary to pay the cash portion of the consideration contemplated in Paragraph 1 herein. Preheat understands that Purchaser’s lending sources may wish to
conduct their own due diligence after September 1, 2005, and prior to closing. 
  
 (ii) The obligation of the Sellers to perform in accordance with the Common Stock Purchase Agreement shall be subject to the approval by Sellers, in its sole discretion, of the Private Placement Memorandum to be
provided by Purchaser. 
  
 h. Closing; Removal of Conditions
on Purchaser’s Obligation to Close. The parties will negotiate in good faith with a view to executing the Common Stock Purchase Agreement on or before October 31, 2005. The Closing of the proposed transaction will take place
as soon thereafter as all conditions to the transaction are satisfied or waived, but not later than December 31, 2005, unless an extension is mutually agreed upon. If the Common Stock Purchase Agreement is not executed by
October 31, 2005, or such later date as the parties may agree, either party may terminate this Letter of Intent. 
  
 4. Confidentiality. The parties agree that neither will use any of the information gathered pursuant to the proposed Due Diligence
contemplated herein for any purpose other than the transaction anticipated by this Letter of Intent. Without the express written consent of all the parties hereto, each of the parties hereto agree to maintain in confidence and not disclose to any
other person the existence of this Letter of Intent, the terms of the proposed transaction or the information delivered in connection with the proposed Due Diligence, other than disclosures required to obtain the approvals for the transaction

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contemplated hereby, disclosures to those professionals, advisors and potential financing sources and their attorneys who have a need to know, or any other
disclosure required by applicable law. In the event that a party hereto is at any time requested or required (by oral questions, interrogatories, request for information or documents, subpoena or similar process) to disclose any information supplied
to it in connection with this transaction to anyone other than professionals, advisors and potential financing sources and their attorneys, such party agrees to provide the other parties prompt notice of such request so that an appropriate
protective order may be sought and/or such other parties may waive the first party’s compliance with the terms of this paragraph. The parties acknowledge that their existing Confidentiality Agreement dated July 13, 2005, shall remain in
full force and effect following the execution of this Letter of Intent. 
  
 5. Conduct of Business. Sellers agree that pending negotiation of the Common Stock Purchase Agreement, Preheat in all material aspects will operate its business only in the usual, regular and ordinary manner and in accordance
with past practice so as to maintain the goodwill it now enjoys, and to the extent consistent with such operation, it will use all reasonable efforts to preserve its present officers and employees and to preserve relationships with customers and
others having business dealings with it, including, but not limited to, paying suppliers and vendors in accordance with its usual business practices in a timely fashion. 
  
 6. Exclusivity. Preheat and the Sellers shall immediately terminate negotiations and/or marketing
efforts, if any, with others in regard to the sale of the stock of Preheat or the sale of Preheat’s business and assets. Sellers shall not, prior to December 31, 2005, in the event the Common Stock Purchase Agreement is executed on or
before October 31, 2005, solicit or initiate the submission of indications of interest, proposals, or offers from, or discuss or negotiate with any person relating to any direct or indirect acquisitions or purchase of any part of or all of the
stock of Preheat, or any part of (other than an immaterial part of ), or all of, the assets owned or to be owned by Preheat, nor will the Seller or Preheat discuss any merger, consolidation, or business combination with Preheat. Neither the Sellers
nor Preheat shall furnish to any other person any information with respect to Preheat that could be used for the purposes described in this paragraph. Sellers shall promptly notify Purchaser of any acquisition proposal received by Sellers and shall
provide Purchaser a copy (to the extent written) or description (to the extent made) of such acquisition proposal. 
  
 7. Access. From the date of execution of this Letter of Intent, and until such time as the parties either terminate negotiations on the
Common Stock Purchase Agreement or until the Closing, Sellers and Preheat shall cooperate with Purchaser in the performance by Purchaser of its Due Diligence. Upon execution of this Letter of Intent, and until such time as the parties either
terminate negotiations on the Common Stock Purchase Agreement or until the Closing, Sellers and Preheat agree to grant to Purchaser and its authorized agents the right to inspect and audit the books and records of Preheat and to consult with those
directors, officers, key employees, attorneys, auditors, and accountants of Preheat as Sellers shall approve upon request by Purchaser, such approval not to be unreasonably withheld, concerning customary due diligence matters. Such inspections and
audits may include, for example, review and examination of Preheat’s books and records of account, tax records, records of corporate proceedings, contracts, trademarks, governmental consents, and other business activities and matters relating
to the transactions contemplated by this Letter of Intent and the Common Stock Purchase 

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Agreement. All confidential information acquired by Purchaser pursuant to this paragraph shall be held in the strictest of confidence by Purchaser and shall
not be revealed or disclosed to any third party or parties, other than to Purchaser’s professionals, advisors and potential funding sources and their attorneys, except as may be required by law. In the event the transaction should not be
consummated for any reason after execution of the Common Stock Purchase Agreement, Purchaser shall promptly, upon request of Preheat, return all such documents as it may have obtained in this process, and any and all copies of such documents. The
parties acknowledge that their existing Confidentiality Agreement dated July 13, 2005, shall remain in place following the execution of this Letter of Intent. 
  
 8. Costs and Expenses. All costs and expenses incurred in connection with the negotiation, execution, and
delivery of this Letter of Intent and the Common Stock Purchase Agreement and related agreements and the consummation of the transactions contemplated thereby shall be paid by the party incurring such costs and expenses, except that the Common Stock
Purchase Agreement shall contain a provision that, in the event of a default under the Common Stock Purchase Agreement, the defaulting party shall pay the non-defaulting party’s attorneys’ fees incurred in connection with the negotiation,
execution, and efforts toward consummation of the Common Stock Purchase Agreement. The costs and expenses incurred by the Purchaser shall include, but not be limited to, the costs and expenses of due diligence reviews and financial audits conducted
at the Purchaser’s request. Notwithstanding anything herein, the execution of this Letter of Intent does not obligate either party to enter into the Common Stock Purchase Agreement, but does obligate both to utilize their reasonable best
efforts to negotiate the terms and provisions of such an Agreement in good faith. 
  
 9. Termination. It is understood and agreed that if, despite the reasonable good faith efforts of the parties, a mutually satisfactory definitive Common Stock Purchase Agreement has not been executed on
or before October 31, 2005, Purchaser and Seller may terminate this Letter of Intent by written notice to the other without any liability; provided, however, that the obligations set forth in paragraphs 4 and 6 through 13 shall survive.

  
 10. Nature of Letter of Intent. The provisions
of paragraphs 4 through 13 hereof are intended to be binding upon the parties in accordance with their terms. With respect to all other matters set forth herein, it is understood that: (i) this Letter of Intent sets forth the intentions of the
parties to use their reasonable best efforts to negotiate, in good faith, a Common Stock Purchase Agreement and that any legal obligations with respect to such matters, including, but not limited to, the customary representations and warranties
described in paragraph 3(a), shall be only as set forth in the Common Stock Purchase Agreement when and if executed by Purchaser and Sellers, and (ii) that neither Purchaser (or any affiliate thereof) nor Sellers shall be responsible for any
claims or liability relating to the transactions contemplated hereby in the event the Common Stock Purchase Agreement is not so executed and delivered, except as expressly provided in the Letter of Intent. 
  
 11. Indemnification. The Sellers represent and warrant that the
Purchaser will not incur any liability of any kind or nature whatsoever in connection with the consummation of the acquisition of Preheat to any third party with whom the Seller or its agents have had discussions regarding the disposition of
Preheat, and the Sellers agree to indemnify, defend and hold harmless the Purchaser, its officers, directors, stockholders, lenders and affiliates from any claims by or liabilities to such third parties, including any legal or other expenses
incurred in connection with the defense of such claims. 

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 12. Governing Law. This Letter of Intent shall be governed by and construed in
accordance with the laws of the State of Louisiana, without giving effect to principles of conflicts of laws. 
  
 13. Miscellaneous. This Letter of Intent constitutes the complete understanding of the parties with respect to the matters referenced
herein, and any other agreements, contracts or understanding (whether written or oral) are superseded by the terms hereof. The rights and obligations of the parties created by this Letter of Intent shall not be assignable by either party without the
prior written consent of the other party, which will not be unreasonably withheld. Notwithstanding the foregoing, the rights and obligations of Purchaser created by this Letter of Intent shall be assignable by Purchaser without the prior written
consent of Seller only to the ultimate holding company contemplated by this agreement. This Letter of Intent may be signed in one or more counterparts, each of which taken together shall constitute one and the same agreement. 
  
 If the foregoing general terms are acceptable to you, please so indicate by
signing the enclosed duplicate original of the Letter of Intent and returning it to the undersigned. 
  
 Very truly yours, 
  

	
	 /s/ James C. Eckert

	 James C. Eckert

	 Chief Executive Officer

  
 ACCEPTED this 21st day of September, 2005. 
  
 Preheat, Inc. 
  

							
	 By:
	    	 /s/ Robert H. Rhyne, Jr

	  	By:	 	 /s/ Brent Trauth

	 	    	Robert H. Rhyne, Jr	  	 	 	Brent Trauth
				
	 Title:
	    	President	  	Title:	 	Vice President
				
	 Date:
	    	9/21/05	  	Date:	 	9/21/05Key Tronic Corporation Long-Term Incentive Plan

 EXHIBIT 10.1 
  
 KEY TRONIC CORPORATION 
  
 LONG-TERM INCENTIVE PLAN 
  
 SECTION 1. PURPOSES 
  
 The purposes of the Key Tronic Corporation (the Company) Long-Term Incentive Plan (the “Plan”) are: 
  
 (a) to enhance long-term shareholder value creation; 
  
 (b) to provide an increased incentive for eligible individuals to assert their best efforts
by conferring benefits based on improved company performance; and 
  
 (c) to
encourage such persons to remain in the service of the Company. 
  
 SECTION 2. DEFINITIONS 
  
 In the Plan: 
  
 2.1 “Award” means an issuance of performance units
whose value will be tied to specific performance measures determined by the Board upon recommendation of the Committee. 
  
 2.2 “Beneficiary” means one or more persons, trusts, estates or other entities designated by the Participant that are entitled to receive benefits under
the Plan upon the death of a Participant. The beneficiary designation last filed with the Company shall control. 
  
 2.3 “Board” means the Board of Directors of Key Tronic Corporation. 
  
 2.4 “Change in Control” shall be deemed to occur if any of the following shall occur: (A) any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than the Company, any Subsidiary or any employee benefit plan of the Company or any Subsidiary, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company’s then-outstanding securities (other than as a result of
an acquisition by any such person of securities directly from the Company); (B) the first purchase of Common Stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the Company or any Subsidiary);
(C) the approval by the Company’s stockholders of a merger or consolidation, a statutory share exchange, a sale or disposition of all or substantially all the Company’s assets or a plan of liquidation or dissolution of the Company; or
(D) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors cease for any reason to constitute at least a majority thereof, unless the election or nomination for the
election by the Company’s stockholders of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors at the beginning of the period. 
  
 2.5 “Committee” means the Compensation and Administration
Committee of the Board of Directors of Key Tronic Corporation. 

 2.6 “Company” means Key Tronic Corporation, a Washington corporation, and
its subsidiaries, either singly or together, as appropriate. 
  
 2.7
“Disability,” unless otherwise defined by the Committee from time to time for purposes of the Plan, means a period of disability during which an Eligible Employee qualifies for benefits or would
qualify for benefits under Key Tronic Corporation’s current long-term disability plan, or in the case of a Non-employee Director, means a period of disability during which such Participant, if he or she were an employee of Key Tronic
Corporation, would qualify for benefits under Key Tronic Corporation’s current long-term disability plan. 
  
 2.8 “Effective Date” means the date on which the Plan is adopted by the Board. 
  
 2.9 “Eligible Employee” means an employee of the Company who is also an officer of the Company.

  
 2.10 “Non-employee Director” means a
member of the Board of Directors of Key Tronic Corporation who is not also an employee of Key Tronic Corporation or any of its affiliates. 
  
 2.11 “Participant” means an Eligible Employee or a Non-employee Director who participates in the Plan. 
  
 2.12 “Performance Period” means the three years following the
date of the Award grant. 
  
 2.13 “Performance
Unit” means a unit whose initial value is set at $1.00 and whose future value is dependent on performance against Board-established targets. 
  

2.14 “Plan” means the Key Tronic Corporation Long-Term Incentive Plan, as it may be amended from time to time by the Board. 
  
 2.15 “Reduction-in-Force” means the elimination
of an employment position or positions due to (a) adverse business conditions of the Company or (b) a reorganization, other than a Change in Control. 
  

2.16 “Retirement,” unless otherwise defined by Key Tronic Corporation from time to time for purposes of the Plan, means
with respect to Eligible Employees, that the Participant leaves active employment after having attained age 65. 
  
 2.17 “Target Award” has the meaning set forth in Section 5.2. 
  
 SECTION 3. ADMINISTRATION 
  
 The Plan shall be administered by the Committee. Notwithstanding the foregoing, the Board
shall retain the authority to amend, suspend or terminate the Plan, approve Awards and approve performance matrices. 

 SECTION 4. ELIGIBILITY 
  
 Unless the Committee determines otherwise, Eligible Employees and Non-employee Directors are automatically eligible to participate in the
Plan, provided such individuals are Eligible Employees or Non-employee Directors prior to the actual date of the grant. 
  
 SECTION 5. PLAN PARAMETERS 
  

	5.1	Vesting 

  
 Each grant of Performance Units made under the Plan will vest at the end of three years following the date of the grant. 
  

	5.2	Determination of Target Awards 

  
 (a) For each grant, the Committee shall determine and recommend to the Board for approval Target Awards for Participants under the Plan, which Target Awards may be based
on job responsibilities or such other criteria as the Committee may in its discretion select. Except as otherwise provided in the Plan, for Eligible Employees, Target Awards shall be a number of units related to competitive market practice for
similar positions. 
  
 (b) Notwithstanding the foregoing, the Board may determine
alternative methods of setting Target Awards for future Performance Periods. 
  

	5.3	Determination of Award Value 

  
 Each Performance Unit will have a value determined by the performance matrix adopted by the Board, upon recommendation of the Committee, for the performance period
associated with the grant of units. At the end of each performance period (three years), the value of each unit awarded will be determined by the matrix. 
  
 SECTION 6. WITHHOLDING 
  
 All Awards vested and issuable under the Plan shall be issued net of all applicable withholding taxes required by applicable federal, state, local or foreign law.

  
 No awards shall be issued under the Plan until all applicable withholding
obligations are satisfied. 
  
 SECTION 7. NONASSIGNABILITY

  
 Neither the Participant nor any other person shall have any right to sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance any of the benefits provided for under this Plan. No part of the amounts payable shall, prior to actual payment, be subject to seizure
or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any other person, nor be transferable by operation of law in the event of the Participant’s or any person’s bankruptcy or
insolvency. If any Participant or Beneficiary should attempt to sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt, the amounts, if any, payable hereunder, then
such amounts shall automatically terminate unless the Board, in its discretion, upon recommendation of the Committee provides otherwise. 

 SECTION 8. CHANGE IN CONTROL 
  
 In the event of a Change in Control all unvested units shall immediately vest and be payable at two times their value determined in
accordance with Section 5.3 as of the date the Change in Control event occurs. 
  
 SECTION 9. AMENDMENT AND TERMINATION 
  

	9.1	Amendment, Suspension or Termination of Plan 

  
 The Board may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that
shareholder approval shall be obtained for any amendment to the Plan if required by applicable law or regulation. 
  

	9.2	Term of Plan 

  
 The Plan shall have no fixed expiration date. 
  
 SECTION 10. INTERPRETATION AND LIMITATION OF LIABILITY 
  

	10.1	Interpretation 

  
 The Board, upon recommendation of the Committee, shall have authority, in its discretion, to determine all matters under the Plan, including determining the size of Target Awards, whether and to what extent
Participants are entitled to Plan benefits, and all terms, conditions, restrictions and limitations, if any, of Awards. The Committee shall have authority, subject to Board approval, to interpret the Plan and the terms of any instrument thereunder
and may from time to time adopt and change rules and regulations of general application for the Plan’s administration. The interpretation of the Plan and its rules and regulations, and all actions taken and determinations made by the Board or
Committee pursuant to the Plan, shall be conclusive and binding on all parties involved or affected. The Committee may delegate ministerial duties to such of the Company’s officers as it so determines. 
  

	10.2	Limitation of Liability 

  
 No member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award issued hereunder. In addition to such
other rights of indemnification, the members of the Board shall be indemnified by the Company to the extent permitted by law against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal therein, to which any member of the Board may be a party by reason of any action taken or failure to act under or in connection with the Plan, and against all amounts paid
in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid in satisfaction of a judgment in any such action, suit or proceeding; provided, however, that within sixty days after
institution of any such action, suit or 

 
proceeding, the Board member shall, in writing, offer the Company the opportunity, at its own expense, to handle and defend the same. 
  
 SECTION 11. RULES GOVERNING UNITS 
  

	11.1	Determination of Unit Value 

  
 Awards for the initial grants and subsequent grants along with the matrix to be used to determine the value of each Award unit on its vesting date shall be approved by
the Board upon recommendation of the Committee. 
  

	11.2	Procedures 

  
 (a) Except as otherwise provided herein, Awards shall be issued on July 1 each year (or as soon thereafter as practicable). 
  

(b) Subject to Section 6, all Awards shall be issued net of applicable withholding taxes. 
  

	11.3	Adjustments 

  
 Notwithstanding the foregoing, the Board, upon recommendation of the Committee, may make such adjustments as the Board deems necessary or appropriate to reflect the inclusion or exclusion of any extraordinary items,
events or circumstances in order to avoid windfalls or hardships in the determination of performance with respect to performance goals. 
  
 SECTION 12. TERMINATION OF EMPLOYMENT OR SERVICES 
  

	12.1	Termination of Employment or Service for Reasons Other than Retirement, Disability, a Reduction-in-Force, Death or for Non-employee Directors, Other than by Reason of Normal
Expiration of Their Term 

  
 Subject to Section 12.2, if a
Participant’s employment as an Eligible Employee or services as a Non-employee Director terminate for any reason prior to vesting of units, and such termination is not for any reason set forth in Section 12.2, such Participant’s
participation in the Plan shall automatically terminate as of the effective date of such termination of employment or services and such individual shall not be entitled to receive any Awards or other consideration under the Plan with respect to
grants still subject to vesting, unless the Board, upon recommendation of the Committee, determines otherwise in its discretion. 
  

	12.2	Termination of Employment or Service by Reason of Retirement, Disability, a Reduction-in-Force, Death or upon the Normal Expiration of a Nonemployee Director’s Term

  
 Subject to Section 12.4, if a Participant’s
employment as an Eligible Employee or services as a Non-employee Director terminate prior to the end of a vesting period for a grant by reason of Retirement, Disability, a Reduction-in-Force, Death or, for Non-employee Directors, upon the normal
expiration of the term for which they were elected or appointed to serve, such Participant 

 
shall be entitled to retain any unvested Units which have been granted to such Participant and receive a pro rata portion of the value, if any, of any of
such Units when vested, payable at the end of the three year vesting period of each such Unit. 
  

	12.3	Forfeiture Provisions 

  
 Notwithstanding the foregoing, in the event an Eligible Employee terminates employment by reason of Retirement and, within two years immediately following such
termination, engages in any capacity in a business that is in substantial direct competition with the business of and in the geographic area served by the Company, such individual shall forfeit all right to receive any Awards still outstanding under
the Plan. The Committee’s determination of whether an individual has acted in competition with the Company shall be made in its sole discretion. 
  

	12.4	Determinations Conclusive and Binding 

  
 Any question as to whether and when there has been a termination of employment or services for purposes of the Plan and the cause of such termination shall be determined
by the Board, upon recommendation of the Committee, and the Board’s determination shall be conclusive and binding. 
  

	12.5	Waiver of Restrictions 

  
 Notwithstanding any other provision of the Plan, the Committee may recommend to the Board and the Board may, in its sole discretion, waive any of the foregoing terms,
conditions or restrictions under such circumstances and subject to such terms and conditions as the Board shall deem appropriate provided, however, no such action shall adversely affect the rights of any Participant under any Award granted prior to
such action without the Participant’s consent. 
  
 SECTION
13. GENERAL 
  

	13.1	No Right to Continued Employment/Other Relationship 

  
 Nothing in the Plan or Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the Company or limit in any way the right of the Company to terminate a Participant’s employment or other relationship at any time, with or without cause. 
  

	13.2	Successors 

  
 The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s Beneficiaries. 

	13.3	Severability 

  
 If any provision of the Plan or Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or Award,
such provision shall be stricken as to such jurisdiction, person, Award, and the remainder of the Plan and any Award shall remain in full force and effect. 
  

	13.4	Choice of Law 

  
 The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving
effect to principles of conflicts of law. 
  
 Approved by the Committee on
September 21, 2005 
  
 Approved by the Board on September 21,
2005

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