Document:

EX-10.3

Exhibit
10.3

AMENDMENT TO THE

MYERS INDUSTRIES, INC.

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

DAVID B. KNOWLES

     Amendment to the Myers Industries, Inc. Executive Supplemental Retirement Plan (the “Plan”),
is entered into as of the 19th day of June, 2009, by and between Myers Industries, Inc. (the
“Employer”) and David B. Knowles (the “Executive”).

     WHEREAS, the Employer established the Plan, effective January 1, 1997;

     WHEREAS, the Executive is a Participant in the Plan;

     WHEREAS, pursuant to Section 10.7 of the Plan, the Employer may amend or modify any provision
of the Plan as to any particular Participant (as defined in the Plan) by agreement with such
Participant, provided that such agreement is in writing, is executed by both the Employer and the
Participant, and is filed with the Plan records;

     WHEREAS, the Employer wants to amend certain provisions of the Plan as to the Executive in
order to comply with Internal Revenue Code (“Code”) Section 409A and to effect certain other
changes as contemplated by the terms of the Employment Agreement between Myers Industries, Inc. and
the Executive dated June 19, 2009; and

     WHEREAS, this Amendment shall apply only to the Executive and not to any other Participants.

     NOW, THEREFORE, the Plan is hereby amended effective June 19, 2009 as to the Executive as
follows:

	 	1.	 	Section 2.4 of the Plan shall be amended in its entirety to read as follows:
	 
	 	 	 	“Section 2.4 The term “Benefit Amount” shall mean $75,000.”
	 
	 	2.	 	Section 2.20 of the Plan shall be amended in its entirety to read as follows:
	 
	 	 	 	“Section 2.20 The term “Retirement Date” shall mean the first day of the month
coinciding with or immediately following the month in which the Participant
terminates employment.”
	 
	 	3.	 	Article II of the Plan shall be amended by the addition of the following new
Section 2.23 at the end thereof:
	 
	 	 	 	“Section 2.23 The term “Specified Employee” shall mean a Participant who:

 

 

	 	(a)	 	owns more than five percent (5%) of the stock of the Employer or any
member of the Employer’s controlled group;
	 
	 	(b)	 	owns more than one percent (1%) of the stock of the Employer and has
compensation from the employer in excess of $150,000 per year; or
	 
	 	(c)	 	is an officer of the Employer with compensation in excess of $145,000
per year.”

	 	4.	 	Section 4.4 of the Plan shall be amended by replacing the paragraph following
the table with the following:
	 
	 	 	 	“Subject to Section 5.2, such Supplemental Vested Pension shall be paid monthly,
commencing on the later of the Participant’s Retirement Date or attainment of age
fifty-five (55), and continuing on the same day of each month thereafter until such
time as the Participant has received one hundred and twenty (120) monthly payments,
provided, however, that such Supplemental Vested Pension shall be further reduced by
multiplying the amount that would otherwise be payable to him on his Normal
Retirement Date, by the percentage determined from the table set forth in Section
4.2, based upon his attained age as of the date that such Supplemental Vested Pension
commences.
	 
	 	5.	 	Article V of the Plan shall be amended in its entirety to read as follows:
	 
	 	 	 	“Section 5.1 A Participant’s Supplemental Pension payable under Section 4.1
(Supplemental Normal Retirement Pension), Section 4.2 (Supplemental Early Retirement
Pension), or Section 4.3 (Supplemental Late Retirement Pension) shall be paid monthly
commencing on the Participant’s Retirement Date and continuing on the same day of
each month thereafter until such time as the Participant has received one hundred and
twenty (120) monthly payments. A Participant’s Supplemental Vested Pension payable
under Section 4.4 shall be paid as described in Section 4.4.
	 
	 	 	 	Section 5.2 Notwithstanding anything contained herein to the contrary, any payment
of a Participant’s Supplemental Pension pursuant to Sections 4.1, 4.2, 4.3, 4.4, or
Article VII, to a Participant who is a Specified Employee upon separation from
service will commence not earlier than the date that is six (6) months following the
date the Participant separates from service, or, if earlier, his date of death.”
	 
	 	6.	 	Section 6.2 of the Plan is hereby amended in its entirety to read as follows:
	 
	 	 	 	“Section 6.2 If a Participant dies prior to his Retirement Date, the Participant’s
Beneficiary shall be entitled to receive a Death Benefit equal to one hundred percent
(100%) of the Supplemental Pension that the Participant would have been eligible to
receive if he had retired on the day before his death. Such Death Benefit shall be
calculated under Section 4.1, if the Participant’s death occurs on or after his
Normal Retirement Date, and under Section 4.2, if the Participant’s death occurs on
or after the date that the Participant would be eligible to elect Early Retirement
but prior to his Normal Retirement Date. If the Participant’s death occurs prior to
his attainment of age 55, the death benefit provided under this Section 6.2 shall be
determined under Section 4.4 as if the Participant had attained
age 55 on the day before his
death, and had commenced receiving a Supplemental Vested Pension as of such date.
Such Death Benefit shall be paid to the Participant’s Beneficiary, in accordance with
the provisions of Section 5.1, except that it shall commence on the first day of the
second month following the month in which the Participant’s death occurs.”

 

 

	 	7.	 	Article VII of the Plan shall be amended in its entirety to read as follows:
	 
	 	 	 	“Subject to the provisions of Article XI, if a Participant is determined to be
Disabled prior to his Normal Retirement Date, the Participant shall be entitled to
receive a Supplemental Normal Retirement Pension calculated pursuant to Section 4.1,
and payable upon separation from service at the times specified in Section 5.1.
Notwithstanding the preceding sentence, if the Participant is a Specified Employee at
the time he separates from service, any payment made pursuant to this Article VII
shall not commence earlier than the date that is six (6) months following the date
the Participant separates from service, or, if earlier, his date of death.”
	 
	 	8.	 	Article X of the Plan shall be amended by the addition of the following new
Section 10.13 at the end thereof:
	 
	 	 	 	“Section 10.13 Notwithstanding anything in this Plan to the contrary, the Employer
shall have the right, subject to the Participant’s consent (which shall not be
unreasonably withheld), to amend the Plan without any additional consideration to the
affected Participant to the extent necessary to avoid penalties arising under Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), even if the
amendment reduces, restricts or eliminates the benefits or rights of the Participant
or his Beneficiary under the Plan. Any amendment under this Section 10.13 shall
otherwise be consistent with the intent of this Plan.”

     All other provisions of the Plan are unchanged and shall continue in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of
the date first written above.

	 	 	 	 	 
	 	“EMPLOYER”

MYERS INDUSTRIES, INC.

 	 
	 	/s/ John C. Orr
 	 
	 	By:  John C. Orr 	 
	 	 	 
	 
	 	“EXECUTIVE”

DAVID B. KNOWLES

 	 
	 	/s/ David B. Knowlesex10_1.htm

    Exhibit
10.1

     

    KRISPY
KREME DOUGHNUTS, INC.

     

    2000
STOCK INCENTIVE PLAN

     

    (AMENDED
AS OF JUNE 16, 2009)

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                                                                             
TABLE OF
CONTENTS                                                                 Page

     

    
      	
              ARTICLE
      1.

            	
              ESTABLISHMENT,
      PURPOSE, AND DURATION

            	
              1

            
	
              1.1

            	
              Establishment
      of the Plan

            	
              1

            
	
              1.2

            	
              Purpose
      of the Plan

            	
              1

            
	
              1.3

            	
              Duration
      of the Plan

            	
              1

            
	
              ARTICLE
      2.

            	
              DEFINITIONS

            	
              1

            
	
              ARTICLE
      3.

            	
              ADMINISTRATION

            	
              5

            
	
              3.1

            	
              The
      Committee

            	
              5

            
	
              3.2

            	
              Authority
      of the Committee

            	
              5

            
	
              3.3

            	
              Decisions
      Binding

            	
              5

            
	
              3.4

            	
              Employees
      in Foreign Countries

            	
              5

            
	
              3.5

            	
              No
      Option or SAR Repricing Without Shareholder Approval

            	
              5

            
	
              ARTICLE
      4.

            	
              SHARES
      SUBJECT TO THE PLAN

            	
              6

            
	
              4.1

            	
              Number
      of Shares

            	
              6

            
	
              4.2

            	
              Other
      Plan Limits

            	
              6

            
	
              4.3

            	
              Nonexclusivity
      of the Plan

            	
              6

            
	
              4.4

            	
              Adjustments
      in Authorized Shares

            	
              6

            
	
              ARTICLE
      5.

            	
              ELIGIBILITY
      AND PARTICIPATION

            	
              6

            
	
              ARTICLE
      6.

            	
              STOCK
      OPTIONS

            	
              7

            
	
              6.1

            	
              Grant
      of Options

            	
              7

            
	
              6.2

            	
              Agreement

            	
              7

            
	
              6.3

            	
              Option
      Price

            	
              7

            
	
              6.4

            	
              Duration
      of Options

            	
              7

            
	
              6.5

            	
              Exercise
      of Options

            	
              7

            
	
              6.6

            	
              Payment

            	
              8

            
	
              6.7

            	
              Transferability

            	
              8

            
	
              6.8

            	
              Shareholder
      Rights

            	
              9

            
	
              ARTICLE
      7.

            	
              STOCK
      APPRECIATION RIGHTS

            	
              9

            
	
              7.1

            	
              Grants
      of SARs

            	
              9

            
	
              7.2

            	
              Duration
      of SARs

            	
              9

            
	
              7.3

            	
              Exercise
      of SAR

            	
              9

            
	
              7.4

            	
              Determination
      of Payment of Cash and/or Common Stock Upon Exercise of
SAR

            	
              9

            
	
              7.5

            	
              Nontransferability

            	
              10

            
	
              7.6

            	
              Shareholder
      Rights

            	
              10

            
	
              ARTICLE
      8.

            	
              RESTRICTED
      STOCK; STOCK AWARDS

            	
              10

            
	
              8.1

            	
              Grants

            	
              10

            
	
              8.2

            	
              Restricted
      Period; Lapse of Restrictions

            	
              10

            
	
              8.3

            	
              Rights
      of Holder; Limitations Thereon

            	
              11

            
	
              8.4

            	
              Delivery
      of Unrestricted Shares

            	
              11

            
	
              8.5

            	
              Nonassignability
      of Restricted Stock

            	
              12

            
	
              ARTICLE
      9.

            	
              PERFORMANCE
      UNIT AWARDS

            	
              12

            
	
              9.1

            	
              Award

            	
              12

            
	
              9.2

            	
              Earning
      the Award

            	
              12

            
	
              9.3

            	
              Payment

            	
              12

            
	
              9.4

            	
              Shareholder
      Rights

            	
              12

            
	
              ARTICLE
      10.

            	
              BENEFICIARY
      DESIGNATION

            	
              13

            
	
              ARTICLE
      11.

            	
              DEFERRALS

            	
              13

            
	
              ARTICLE
      12.

            	
              RIGHTS
      OF PARTICIPANTS

            	
              13

            
	
              12.1

            	
              Employment

            	
              13

            
	
              12.2

            	
              Participation

            	
              13

            
	
              ARTICLE
      13.

            	
              CHANGE
      IN CONTROL

            	
              13

            
	
              13.1

            	
              Definition

            	
              13

            
	
              ARTICLE
      14.

            	
              AMENDMENT,
      MODIFICATION AND TERMINATION

            	
              14

            
	
              14.1

            	
              Amendment,
      Modification and Termination

            	
              14

            
	
              14.2

            	
              Awards
      Previously Granted

            	
              15

            
	
              14.3

            	
              Compliance
      With Code Section 162(m)

            	
              15

            
	
              ARTICLE
      15.

            	
              WITHHOLDING

            	
              15

            
	
              15.1

            	
              Tax
      Withholding

            	
              15

            
	
              15.2

            	
              Share
      Withholding

            	
              15

            
	
              ARTICLE
      16.

            	
              INDEMNIFICATION

            	
              15

            
	
              ARTICLE
      17.

            	
              SUCCESSORS

            	
              16

            
	
              ARTICLE
      18.

            	
              LEGAL
      CONSTRUCTION

            	
              16

            
	
              18.1

            	
              Gender
      and Number

            	
              16

            
	
              18.2

            	
              Severability

            	
              16

            
	
              18.3

            	
              Requirements
      of Law

            	
              16

            
	
              18.4

            	
              Regulatory
      Approvals and Listing

            	
              16

            
	
              18.5

            	
              Securities
      Law Compliance

            	
              16

            
	
              18.6

            	
              Governing
      Law

            	
              17

            
	
              18.7

            	
              Section
      409A

            	
              17

            

    

    

    

    
      
        
           

        

         

      

      
        -i-

        
          

        

      

      
         

      

    

    KRISPY
KREME DOUGHNUTS, INC.

     

    2000
STOCK INCENTIVE PLAN

     

    ARTICLE
1.  
ESTABLISHMENT,
PURPOSE, AND DURATION

     

    1.1  Establishment of the
Plan.  Krispy
Kreme Doughnuts, Inc., a North Carolina corporation (hereinafter referred to as
the “Company”), hereby establishes a stock option and incentive award plan known
as the “Krispy Kreme Doughnuts, Inc. 2000 Stock Incentive Plan” (the “Plan”), as
set forth in this document.  The Plan permits the grant of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock, Stock Awards,
Performance Unit Awards and Stock Appreciation Rights.

     

    The Plan
shall become effective on July 1, 2000 (the “Effective Date”), having been
approved by the Board of Directors on June 6, 2000, and shall remain in effect
as provided in Section 1.3.  This Plan reflects all amendments and
stock splits through and including June 16, 2009.

     

    1.2  Purpose of the
Plan.  The
purposes of the Plan are to promote greater stock ownership in the Company by
Employees, Directors, consultants, or other persons who perform services for the
Company and its Parent, Subsidiaries, and affiliates (the “Participants”); to
more closely link the personal interests of Participants to those of the
Company’s shareholders; and to provide flexibility to the Company in its ability
to motivate, attract and retain the services of Participants upon whose
judgment, interest and special effort the successful conduct of its operation
largely depends.

     

    1.3  Duration of the
Plan.  The Plan
shall commence on the Effective Date, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 14, until the day prior to the twelfth (12th) anniversary of
the Effective Date.

     

    ARTICLE
2. 
DEFINITIONS

     

    Whenever
used in the Plan, the following terms shall have the meanings set forth
below:

     

    
      	
              (a)  

            	
              “Agreement”
      means an agreement entered into by each Participant and the Company,
      setting forth the terms and provisions applicable to Awards granted to
      Participants under this Plan.

            

    

     

    
      	
              (b)  

            	
              “Award” means,
      individually or collectively, a grant under this Plan of Incentive Stock
      Options, Nonqualified Stock Options, Restricted Stock, Stock Awards,
      Performance Unit Awards or Stock Appreciation
  Rights.

            

    

     

    
      	
              (c)  

            	
              “Beneficial
      Owner” or “Beneficial
      Ownership” shall have the meaning ascribed to such term in Rule
      13d-3 of the General Rules and Regulations under the Exchange
      Act.

            

    

     

    
      	
              (d)  

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

            

    

     

    
      	
              (e)  

            	
              “Cause”
      means:  (i) with respect to the Company or any Subsidiary which
      employs the Participant or for which the Participant primarily performs
      services, the commission by the Participant of an act of fraud,
      embezzlement, theft or proven dishonesty, or any other illegal act or
      practice (whether or not resulting in criminal prosecution or conviction),
      or any act or practice which the Committee shall, in good faith, deem to
      have resulted in the Participant’s becoming unbondable under the Company’s
      or the Subsidiary’s fidelity bond; (ii) the willful engaging by the
      Participant in misconduct which is deemed by the Committee, in good faith,
      to be materially injurious to the Company or any Subsidiary, monetarily or
      otherwise; or (iii) the willful and continued failure or habitual neglect
      by the Participant to perform his duties with the Company or the
      Subsidiary substantially in accordance with the operating and personnel
      policies and procedures of the Company or the Subsidiary generally
      applicable to all their employees.  For purposes of this Plan,
      no act or failure to act by the Participant shall be deemed to be
      “willful” unless done or omitted to be done by the Participant not in good
      faith and without reasonable belief that the Participant’s action or
      omission was in the best interest of the Company and/or the
      Subsidiary.  Notwithstanding the foregoing, if the Participant
      has entered into an employment agreement that is binding as of the date of
      employment termination, and if such employment agreement defines “Cause,”
      then the definition of “Cause” in such agreement shall apply to the
      Participant in this Plan.  “Cause” under either (i), (ii) or
      (iii) shall be determined by the
Committee.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (f)  

            	
              “Code” means the
      Internal Revenue Code of 1986, as amended from time to time, or any
      successor act thereto.

            

    

     

    
      	
              (g)  

            	
              “Committee”
      means (i) the committee appointed by the Board to administer the Plan with
      respect to grants of Awards, as specified in Article 3; or (ii) in the
      absence of such appointment, the Board
itself.

            

    

     

    
      	
              (h)  

            	
              “Common Stock”
      means the common stock of the Company, no par value per
    share.

            

    

     

    
      	
              (i)  

            	
              “Company” means
      Krispy Kreme Doughnuts, Inc., a North Carolina corporation, or any
      successor thereto as provided in Article
17.

            

    

     

    
      	
              (j)  

            	
              “Corresponding
      SAR” means an SAR that is granted in relation to a particular
      Option and that can be exercised only upon the surrender to the Company,
      unexercised, of that portion of the Option to which the SAR
      relates.

            

    

     

    
      	
              (k)  

            	
              “Director” means
      any individual who is a member of the Board of Directors of the
      Company.

            

    

     

    
      	
              (l)  

            	
              “Disability”
      shall mean a condition where the Participant either (i) is unable to
      engage in any substantial gainful activity by reason of any medically
      determinable physical or mental impairment which can be expected to result
      in death or can be expected to last for a continuous period of not less
      than 12 months; or (ii) is, by reason of any medically determinable
      physical or mental impairment which can be expected to result in death or
      can be expected to last for a continuous period of not less than three (3)
      months, receiving income replacement benefits for a period of not less
      than three (3) months under an accident and health plan covering employees
      of the Company.

            

    

     

    
      	
              (m)  

            	
              “Effective Date”
      shall have the meaning ascribed to such term in
      Section 1.1.

            

    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    
      	
              (n)  

            	
              “Employee” means
      any employee of the Company or any Parent, Subsidiary, or affiliate of the
      Company.  Directors who are not otherwise employed by the
      Company or a Parent, Subsidiary or affiliate of the Company are not
      considered Employees under this
Plan.

            

    

     

    
      	
              (o)  

            	
               “Exchange Act”
      means the Securities Exchange Act of 1934, as amended from time to time,
      or any successor act thereto.

            

    

     

    
      	
              (p)  

            	
              “Fair Market
      Value” shall be determined as
follows:

            

    

     

    
      	
              (i)  

            	
              If,
      on the relevant date, the Shares are traded on a national or regional
      securities exchange or on The Nasdaq National Market System (“Nasdaq”) and
      closing sale prices for the Shares are customarily quoted, on the basis of
      the closing sale price on the principal securities exchange on which the
      Shares may then be traded or, if there is no such sale on the relevant
      date, then on the last previous day on which a sale was
      reported;

            

    

     

    
      	
              (ii)  

            	
              If,
      on the relevant date, the Shares are not listed on any securities exchange
      or traded on Nasdaq, but nevertheless are publicly traded and reported on
      Nasdaq without closing sale prices for the Shares being customarily
      quoted, on the basis of the mean between the closing bid and asked
      quotations in such other over-the-counter market as reported by Nasdaq;
      but, if there are no bid and asked quotations in the over-the-counter
      market as reported by Nasdaq on that date, then the mean between the
      closing bid and asked quotations in the over-the-counter market as
      reported by Nasdaq on the immediately preceding day such bid and asked
      prices were quoted; and

            

    

     

    
      	
              (iii)  

            	
              If,
      on the relevant date, the Shares are not publicly traded as described in
      (i) or (ii), on the basis of the good faith determination of the
      Committee.

            

    

     

    
      	
              (q)  

            	
              “Incentive Stock
      Option” or “ISO” means an
      option to purchase Shares granted under Article 6 which is designated as
      an Incentive Stock Option and is intended to meet the requirements of
      Section 422 of the Code.

            

    

     

    
      	
              (r)  

            	
              “Initial Value”
      means, with respect to a Corresponding SAR, the Option Price per share of
      the related Option, and with respect to an SAR granted independently of an
      Option, the Fair Market Value of one share of Common Stock on the date of
      grant.

            

    

     

    
      	
              (s)  

            	
              “Insider” shall
      mean an Employee who is, on the relevant date, an officer or a director,
      or a beneficial owner of ten percent (10%) or more of any class of the
      Company’s equity securities that is registered pursuant to Section 12 of
      the Exchange Act or any successor provision, all as defined under Section
      16 of the Exchange Act.

            

    

     

    
      	
              (t)  

            	
              “Named Executive
      Officer” means a Participant who, as of the date of vesting and/or
      payout of an Award is one of the group of “covered employees,” as defined
      in the regulations promulgated under Code Section 162(m), or any successor
      statute.

            

    

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    
      	
              (u)  

            	
              “Nonqualified Stock
      Option” or “NQSO” means an
      option to purchase Shares granted under Article 6, and which is not
      intended or otherwise fails to meet the requirements of Code Section
      422.

            

    

     

    
      	
              (v)  

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

            

    

     

    
      	
              (w)  

            	
              “Option Price”
      means the price at which a Share may be purchased by a Participant
      pursuant to an Option, as determined by the
  Committee.

            

    

     

    
      	
              (x)  

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

            

    

     

    
      	
              (y)  

            	
              “Participant”
      means an Employee, Director, consultant or other person who performs
      services for the Company or a Parent, Subsidiary, or affiliate of the
      Company, who has been granted an Award under the Plan which is
      outstanding.

            

    

     

    
      	
              (z)  

            	
              “Performance Unit
      Award” means an Award, which, in accordance with the terms of
      Article 9 and the other provisions of the Plan and subject to an
      Agreement, will entitle the Participant, or his estate or beneficiary in
      the event of the Participant’s death, to receive cash, Common Stock or a
      combination thereof.

            

    

     

    
      	
              (aa)  

            	
              “Person” shall
      have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
      Act and used in Sections 13(d) and 14(d) thereof, including a “group” as
      defined in Section 13(d) thereof.

            

    

     

    
      	
              (bb)  

            	
              “Plan” means
      this Krispy Kreme Doughnuts, Inc. 2000 Stock Incentive Plan, including any
      amendments thereto.

            

    

     

    
      	
              (cc)  

            	
              “Restricted
      Stock” means an Award of Common Stock (or the right to receive a
      share of Common Stock in the future) granted in accordance with the terms
      of Article 8 and the other provisions of the Plan, and which is
      nontransferable and subject to a substantial risk of
      forfeiture.  Shares of Common Stock shall cease to be Restricted
      Stock when, in accordance with the terms hereof and the applicable
      Agreement, they become transferable and free of substantial risk of
      forfeiture.

            

    

     

    
      	
              (dd)  

            	
              “Retirement”
      shall mean retiring from employment with the Company or any Subsidiary on
      or after attaining age sixty five (65), or pursuant to a policy or
      agreement approved by the Board.

            

    

     

    
      	
              (ee)  

            	
              “SAR” means a
      stock appreciation right that entitles the holder to receive, with respect
      to each share of Common Stock encompassed by the exercise of such SAR, the
      amount determined by the Committee and specified in an
      Agreement.  In the absence of such specification, the holder
      shall be entitled to receive in cash, with respect to each share of Common
      Stock encompassed by the exercise of such SAR, the excess of the Fair
      Market Value on the date of exercise over the Initial
      Value.  References to “SARs” include both Corresponding SARs and
      SARs granted independently of Options, unless the context requires
      otherwise.

            

    

     

    
      	
              (ff)  

            	
              “Shares” means
      the shares of Common Stock of the Company (including any new, additional
      or different stock or securities resulting from the changes described in
      Section 4.3).

            

    

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    
      	
              (gg)  

            	
              “Stock Award”
      means a grant of Shares under Article 8 that is not generally subject to
      restrictions and pursuant to which a certificate for the Shares is
      transferred to the Employee.

            

    

     

    
      	
              (hh)  

            	
              “Subsidiary”
      means (i) in the case of an ISO, any company during any period in which it
      is a “subsidiary corporation” (as that term is defined in Code Section
      424(f)), and (ii) in the case of all other Awards, in addition to a
      “subsidiary corporation” as defined above, a partnership, limited
      liability company, joint venture or other entity in which the Company
      controls fifty percent (50%) or more of the voting power or equity
      interests.

            

    

     

    ARTICLE
3.  ADMINISTRATION

     

    3.1  The
Committee.  The Plan
shall be administered by the Compensation Committee of the Board (or a
subcommittee thereof), or by any other committee or subcommittee appointed by
the Board that is granted authority to administer the Plan.  The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors.  In the absence of
any such appointment, the Plan shall be administered by the Board.

     

    3.2  Authority of the Committee.  Subject
to the provisions of the Plan, the Committee shall have full and exclusive power
to select the Participants who shall participate in the Plan (who may change
from year to year); determine the size and types of Awards; determine the terms
and conditions of Awards in a manner consistent with the Plan (including
conditions on the exercisability of all or a part of an Option or SAR,
restrictions on transferability, vesting provisions on Restricted Stock or
Performance Unit Awards and the duration of the Awards); construe and interpret
the Plan and any agreement or instrument entered into under the Plan; establish,
amend or waive rules and regulations for the Plan’s administration; and (subject
to the provisions of Article 14) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan, including accelerating the
time any Option or SAR may be exercised and establishing different terms and
conditions relating to the effect of the termination of employment or other
services to the Company.  Further, the Committee shall make all other
determinations which may be necessary or advisable in the Committee’s opinion
for the administration of the Plan.  All expenses of administering
this Plan shall be borne by the Company.

     

    3.3  Decisions
Binding.  All
determinations and decisions made by the Committee pursuant to the provisions of
the Plan and all related orders and resolutions of the Board shall be final,
conclusive and binding on all Persons, including the Company, the shareholders,
Participants and their estates and beneficiaries.

     

    3.4  Employees in Foreign
Countries.  The
Committee shall have the authority to adopt such modifications, procedures,
appendices and subplans as may be necessary or desirable to comply with
provisions of the laws of foreign countries in which the Company or any
Subsidiary may operate to assure the viability of the benefits from Awards
granted to Employees employed in such countries and to meet the objectives of
the Plan.

     

    3.5  No Option or SAR Repricing
Without Shareholder Approval.  Except as
provided in Section 4.4 hereof relating to certain antidilution
adjustments, unless the approval of shareholders of the Company is obtained,
Options and SARs issued under the Plan shall not be amended to lower their
exercise price, Options and SARs issued under the Plan will not be exchanged for
other Options or SARs with
lower exercise prices, and no other action shall be taken with respect to
Options or SARs that would be treated as a repricing under the rules of the
principal stock exchange on which the Shares are listed.

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    ARTICLE
4. 
SHARES
SUBJECT TO THE PLAN

     

    4.1  Number of
Shares.  Subject
to adjustments under Section 4.4 below, the maximum number of Shares that may be
delivered to participants and their beneficiaries under the Plan shall be equal
to the sum of (i) 12,500,000; (ii) any Shares available for future awards under
the Company’s 1998 Stock Option Plan as of the effective date of this Plan; and
(iii) any Shares that are represented by awards granted under any prior plan of
the Company, which are forfeited, expire or are canceled without the delivery of
Shares or which result in the forfeiture of Shares back to the
Company.  In addition, any Shares delivered under the Plan or any
prior plan of the Company which are forfeited back to the Company because of the
failure to meet an award contingency or condition shall again be available for
delivery pursuant to new awards granted under the Plan.  Any Shares
covered by an award (or portion of an award) granted under the Plan or any prior
plan of the Company, which is forfeited or canceled, expires or is settled in
cash, including the settlement of tax withholding obligations using Shares,
shall be deemed not to have been delivered for purposes of determining the
maximum number of Shares available for delivery under the
Plan.  Likewise, if any stock option is exercised by tendering Shares,
either actually or by attestation, to the Company as full or partial payment for
such exercise under this Plan or any prior plan of the Company, only the number
of Shares issued net of the Shares tendered shall be deemed delivered for
purposes of determining the maximum number of Shares available for delivery
under the Plan. Further, Shares issued under the Plan through the settlement,
assumption or substitution of outstanding awards or obligations to grant future
awards as a condition of or in connection with the Company acquiring another
entity shall not reduce the maximum number of Shares available for delivery
under the Plan.

     

    4.2  Other Plan
Limits.  Subject
to adjustment under Section 4.4, the maximum number of Shares that may be issued
in connection with ISOs shall be 3,000,000.

     

    4.3  Nonexclusivity of the
Plan.  This
Plan shall not be construed as creating any limitation on the power of the Board
to adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of options and other awards otherwise than
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.

     

    4.4  Adjustments in Authorized
Shares.  In
the event of (i) any change in corporate capitalization, such as a stock split,
reverse stock split, or stock dividend; (ii) any corporate transaction to which
Code Section 424(a) applies, or (iii) such other event which in the judgment of
the Committee necessitates an adjustment, such adjustment shall be made in the
maximum number and kind of Shares which may be delivered under the Plan as set
forth in Section 4.1 above, and in the number and kind of and/or price of Shares
subject to outstanding Awards granted under the Plan or prior plan, to prevent
dilution or enlargement of rights; provided, however, that the number of Shares
subject to any Award shall always be a whole number and the Committee shall make
such adjustments as are necessary to insure Awards of whole
Shares.  Except as expressly provided herein, the issuance by the
Company of Shares of stock of any class, or securities convertible into Shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to an
outstanding Award.

     

    ARTICLE
5.  ELIGIBILITY
AND PARTICIPATION

     

    Any
Director or Employee, or any independent contractor, adviser or consultant to
the Company or a Parent, Subsidiary, or affiliate of the Company shall be
eligible to receive an Award under the Plan.  In determining the
individuals to whom such an Award shall be granted and the number of Shares
which may be granted pursuant to that Award, the Committee shall take into
account the duties of the respective individual, his or her present and
potential contributions to the success of the Company or a Parent, Subsidiary,
or affiliate of the Company, and such other factors as the Committee shall deem
relevant in connection with accomplishing the purpose of the Plan.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    ARTICLE
6.  STOCK
OPTIONS

     

    6.1  Grant of
Options.  Subject
to the terms and provisions of the Plan, Options may be granted to Participants
at any time and from time to time as shall be determined by the
Committee.  The Committee shall have sole discretion in determining
the number of Shares subject to Options granted to each
Participant.  An Option may be granted with or without a Corresponding
SAR.  No Participant may be granted ISOs (under the Plan and all other
incentive stock option plans of the Company and any Parent or Subsidiary) which
are first exercisable in any calendar year for Common Stock having an aggregate
Fair Market Value (determined as of the date an Option is granted) that exceeds
One Hundred Thousand Dollars ($100,000).  The preceding annual limit
shall not apply to NQSOs.  The Committee may grant a Participant ISOs,
NQSOs or a combination thereof, and may vary such Awards among
Participants.  Subject to adjustments under the principles set forth
in Section 4.4 above, the maximum number of Shares subject to Options which can
be granted under the Plan during any calendar year to any individual is
1,000,000 Shares; provided, however, that to the extent that the maximum number
of Shares is not granted to a Participant in a calendar year, such amount may be
carried over into subsequent years.

     

    6.2  Agreement.  Each
Option grant shall be evidenced by an Agreement that shall specify the Option
Price, the duration of the Option, the number of Shares to which the Option
pertains and such other provisions as the Committee shall
determine.  The Option Agreement shall further specify whether the
Award is intended to be an ISO or an NQSO.  Any portion of an Option
that is not designated as an ISO or otherwise fails or is not qualified as an
ISO (even if designated as an ISO) shall be a NQSO.  If the Option is
granted in connection with a Corresponding SAR, the Agreement shall also specify
the terms that apply to the exercise of the Option and Corresponding
SAR.  The Committee may provide in the Option Agreement for transfer
restrictions, repurchase rights, vesting requirements and other limitations on
the Shares to be issued pursuant to the exercise of an Option.

     

    6.3  Option
Price.  The
Option Price shall not be less than one hundred percent (100%) of the Fair
Market Value of a Share on the date the Option is granted.  In no
event, however, shall any Participant who owns (within the meaning of Section
424(d) of the Code) stock of the Company possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company be
eligible to receive an ISO at an Option Price less than one hundred ten percent
(110%) of the Fair Market Value of a Share on the date the ISO is
granted.  The Committee is authorized to issue Options, whether ISOs
or NQSOs, at an Option Price in excess of the Fair Market Value on the date the
Option is granted (the so-called “Premium Price” Option) to encourage superior
performance.

     

    6.4  Duration of
Options.  Each
Option shall expire at such time as the Committee shall determine at the time of
grant; provided, however, that no Option shall be exercisable later than the
tenth (10th) anniversary date of its grant; provided, further, however, that any
ISO granted to any Participant who at such time owns (within the meaning of
Section 424(d) of the Code) stock of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, shall not be exercisable later than the fifth (5th) anniversary date of
its grant.

     

    6.5  Exercise of
Options.  Options
granted under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each instance approve,
including conditions related to the employment of or provision of services by
the Participant with the Company or any Parent, Subsidiary or other entity,
which need not be the same for each grant or for each
Participant.  Each Option shall be exercisable for such number of
Shares and at such time or times, including periodic installments, as may be
determined by the Committee at the time of the grant.  The Committee
may provide in the Agreement for automatic accelerated vesting and other rights
upon the occurrence of a Change in Control (as defined in Section 13.1) of the
Company or upon the occurrence of other events as specified in the
Agreement.  Except as otherwise provided in the Agreement and
Article 13, the right to purchase Shares that are exercisable in periodic
installments shall be cumulative so that when the right to purchase any Shares
has accrued, such Shares or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option.  The
exercise or partial exercise of either an Option or its Corresponding SAR shall
result in the termination of the other to the extent of the number of Shares
with respect to which the Option or Corresponding SAR is exercised.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    6.6  Payment.  Options
shall be exercised by the delivery of a written notice of exercise to the
Company, setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment for the Shares.  The
Option Price upon exercise of any Option shall be payable to the Company in
full, either: (a) in cash, (b) in cash equivalent approved by the Committee, (c)
if approved by the Committee, by tendering previously acquired Shares (or
delivering a certification of ownership of such Shares) having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price (provided
that the Shares which are tendered and which were acquired directly from the
Company must have been held by the Participant for a period of at least six
months unless otherwise provided by the Committee), or (d) if approved by the
Committee, by a combination of (a), (b) and (c).  The Committee also
may allow cashless exercises as permitted under Federal Reserve Board’s
Regulation T, subject to applicable securities law restrictions, or by any other
means which the Committee determines to be consistent with the Plan’s purpose
and applicable law.  The Company may, in its discretion, make a loan
to the Participant for purposes of permitting the Participant to exercise an
Option and to pay any withholding taxes in connection with the exercise of the
Option.  Such loan shall be on such terms and conditions as may be
determined by the Company.  As soon as practicable after receipt of a
written notification of exercise and full payment, the Company shall deliver to
the Participant, in the Participant’s name, Share certificates in an appropriate
amount based upon the number of Shares purchased under the Option(s), and may
place appropriate legends on the certificates representing such
Shares.

     

    6.7  Transferability.

     

    
      	
              (a)  

            	
              To Immediate Family
      and Related Entities.  A Participant may transfer an
      Option granted hereunder, including, but not limited to, transfers to
      members of his or her Immediate Family (as defined below), to one or more
      trusts for the benefit of such Immediate Family members, to one or more
      partnerships where such Immediate Family members are the only partners, or
      to one or more limited liability companies (or similar entities) where
      such Immediate Family Members are the only members or beneficial owners of
      the entity, if (i) the Participant does not receive any consideration in
      any form whatsoever for such transfer, (ii) such transfer is permitted
      under applicable tax laws, and (iii) if the Participant is an Insider,
      such transfer is permitted under Rule 16b-3 of the Exchange Act as in
      effect from time to time.  For purposes hereof, “Immediate
      Family” shall mean the Participant and the Participant’s spouse, children
      and grandchildren.

            

    

     

    
      	
              (b)  

            	
              Transfers Incident to
      Divorce.  A Participant may transfer a nonqualified stock
      option granted hereunder to a former spouse incident to such Participant’s
      divorce from the former spouse.

            

    

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    
      	
              (c)  

            	
              Conditions.  Any
      Option transferred pursuant to this Section 6.7 shall continue to be
      subject to the same terms and conditions in the hands of the transferee as
      were applicable to such Option immediately prior to the transfer
      thereof.  Any reference in any such Agreement to the employment
      by or performance of services for the Company by the Participant shall
      continue to refer to the employment of, or performance by, the
      transferring Participant.  Any Option that is granted pursuant
      to any Agreement that did not initially expressly allow the transfer of
      said Option and that has not been amended to expressly permit such
      transfer, shall not be transferable by the Participant other than by will
      or by the laws of descent and distribution and such Option thus shall be
      exercisable in the Participant’s lifetime only by the
      Participant.

            

    

     

    6.8  Shareholder
Rights.  No
Participant shall have any rights as a Shareholder with respect to Shares
subject to his Option until the issuance of such Shares to the Participant
pursuant to the exercise of such Option.

     

    ARTICLE
7.   STOCK
APPRECIATION RIGHTS

     

             7.1  Grants of
SARs.  The
Committee shall designate Participants to whom SARs are granted, and will
specify the number of Shares of Common Stock subject to each
grant.  An SAR may be granted with or without a related
Option.  All SARs granted under this Plan shall be subject to an
Agreement in accordance with the terms of this Plan. A payment to the
Participant upon the exercise of a SAR may not be more than the difference
between the Fair Market Value of the Shares with respect to the SAR on the date
of grant and the Fair Market Value of the Shares with respect to the SAR on the
date of exercise of the SAR. The maximum number of Shares subject to SARs which
can be granted under the Plan during any calendar year to any individual is
250,000 Shares; provided, however, that to the extent that the maximum number of
Shares is not granted to a Participant in a calendar year, such amount may be
carried over into subsequent years.

     

    7.2  Duration of
SARs.  The
duration of an SAR shall be set forth in the Agreement as determined by the
Committee; provided, however, that no SAR shall be exercisable later than the
tenth (10th) anniversary date of its grant.  An SAR that is granted as
a Corresponding SAR shall have the same duration as the Option to which it
relates.  An SAR shall terminate due to the Participant’s termination
of employment at the same time as the date specified in Article 6 with respect
to Options, regardless of whether the SAR was granted in connection with the
grant of an Option.

     

    7.3  Exercise of SAR.  An
SAR may be exercised in whole at any time or in part from time to time and at
such times and in compliance with such requirements as the Committee shall
determine as set forth in the Agreement; provided, however, that a Corresponding
SAR that is related to an Incentive Stock Option may be exercised only to the
extent that the related Option is exercisable and only when the Fair Market
Value of the Shares exceeds the Option Price of the related ISO.  An
SAR granted under this Plan may be exercised with respect to any number of whole
Shares less than the full number of Shares for which the SAR could be
exercised.  A partial exercise of an SAR shall not affect the right to
exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining Shares subject to the
SAR.  The exercise of either an Option or Corresponding SAR shall
result in the termination of the other to the extent of the number of Shares
with respect to which the Option or its Corresponding SAR is
exercised.

     

    7.4  Determination of Payment of
Cash and/or Common Stock Upon Exercise of SAR.  At
the Committee’s discretion, the amount payable as a result of the exercise of an
SAR may be settled in cash, Common Stock, or a combination of cash and Common
Stock.  A fractional Share shall not be deliverable upon the exercise
of an SAR, but a cash payment shall be made in lieu thereof.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    7.5  Nontransferability.  Each
SAR granted under the Plan shall be nontransferable except by will or by the
laws of descent and distribution.  During the lifetime of the
Participant to whom the SAR is granted, the SAR may be exercised only by the
Participant.  No right or interest of a Participant in any SAR shall
be liable for, or subject to any lien, obligation or liability of such
Participant.  A Corresponding SAR shall be subject to the same
restrictions on transfer as the ISO to which it
relates.  Notwithstanding the foregoing, if the Agreement so provides,
a Participant may transfer an SAR (other than a Corresponding SAR that relates
to an Incentive Stock Option) under the same rules and conditions as are set
forth in Section 6.7.

     

    7.6  Shareholder
Rights.  No
Participant shall have any rights as a Shareholder with respect to Shares
subject to an SAR until the issuance of Shares (if any) to the Participant
pursuant to the exercise of such SAR.

     

    ARTICLE
8.   RESTRICTED STOCK; STOCK
AWARDS

     

    8.1  Grants.  The
Committee may from time to time in its discretion grant Restricted Stock and
Stock Awards to Participants and may determine the number of Shares of
Restricted Stock or Stock Awards to be granted.  The Committee shall
determine the terms and conditions of, and the amount of payment, if any, to be
made by the Participant for such Shares or Restricted Stock.  A grant
of Restricted Stock may, in addition to other conditions, require the
Participant to pay for such Shares of Restricted Stock, but the Committee may
establish a price below Fair Market Value at which the Participant can purchase
the Shares of Restricted Stock.  Each grant of Restricted Stock shall
be evidenced by an Agreement containing terms and conditions not inconsistent
with the Plan as the Committee shall determine to be appropriate in its sole
discretion.  Subject to adjustments under the principles set forth in
Section 4.4 above, the maximum number of Shares of Restricted Stock which can be
granted under the Plan during any calendar year to any individual, if such grant
is intended to comply with Code Section 162(m), is 300,000 Shares.

     

    8.2  Restricted Period; Lapse of
Restrictions.  At
the time a grant of Restricted Stock is made, the Committee shall establish a
period or periods of time (the “Restricted Period”) applicable to such grant
which, unless the Committee otherwise provides, shall not be less than three
years in the aggregate.  Subject to the other provisions of this
Article 8, at the end of the Restricted Period all restrictions shall lapse and
the Restricted Stock shall vest in the Participant.  At the time a
grant is made, the Committee may, in its discretion, prescribe conditions for
the incremental lapse of restrictions during the Restricted Period and for the
lapse or termination of restrictions upon the occurrence of other conditions in
addition to or other than the expiration of the Restricted Period with respect
to all or any portion of the Restricted Stock.  Such conditions may,
but need not, include the following:

     

    
      	
              (a)  

            	
              The
      death, Disability or Retirement of the Employee to whom Restricted Stock
      is granted, or

            

    

     

    
      	
              (b)  

            	
              The
      occurrence of a Change in Control of the
  Company.

            

    

     

    The
Committee may also, in its discretion, shorten or terminate the Restricted
Period, or waive any conditions for the lapse or termination of restrictions
with respect to all or any portion of the Restricted Stock at any time after the
date the grant is made.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    8.3  Rights of Holder;
Limitations Thereon.  Upon
a grant of Restricted Stock, a stock certificate (or certificates) representing
the number of Shares of Restricted Stock granted to the Participant may be
registered in the Participant’s name and held in custody by the Company or a
bank selected by the Committee for the Participant’s
account.  Following such registration, the Participant shall have the
rights and privileges of a Shareholder as to such Restricted Stock, including
the right to receive dividends, if and when declared by the Board of Directors,
and to vote such Restricted Stock, except that the right to receive cash
dividends shall be the right to receive such dividends either in cash currently
or by payment in Restricted Stock, as the Committee shall determine, and except
further that, the following restrictions shall apply:

     

    
      	
              (a)  

            	
              The
      Participant shall not be entitled to delivery of a certificate until the
      expiration or termination of the Restricted Period for the Shares
      represented by such certificate and the satisfaction of any and all other
      conditions prescribed by the
Committee;

            

    

     

    
      	
              (b)  

            	
              None
      of the Shares of Restricted Stock may be sold, transferred, assigned,
      pledged, or otherwise encumbered or disposed of during the Restricted
      Period and until the satisfaction of any and all other conditions
      prescribed by the Committee; and

            

    

     

    
      	
              (c)  

            	
              In
      the event of the forfeiture of any Shares of Restricted Stock, such
      forfeited Shares shall be transferred to the Company without further
      action by the Participant and shall, in accordance with Section 4.1, again
      be available for grant under the Plan.  If the Participant paid
      any amount for the Shares of Restricted Stock that are forfeited, the
      Company shall pay the Participant the lesser of the Fair Market Value of
      the Shares on the date they are forfeited or the amount paid by the
      Participant.

            

    

     

    With
respect to any Shares received as a result of adjustments under Section 4.4
hereof and any Shares received with respect to cash dividends declared on
Restricted Stock, the Participant shall have the same rights and privileges, and
be subject to the same restrictions, as are set forth in this
Article 8.

     

    8.4  Delivery of Unrestricted
Shares.  Upon
the expiration or termination of the Restricted Period for any Shares of
Restricted Stock and the satisfaction of any and all other conditions prescribed
by the Committee, the restrictions applicable to such Shares of Restricted Stock
shall lapse and a stock certificate for the number of Shares of Restricted Stock
with respect to which the restrictions have lapsed shall be delivered, free of
all such restrictions except any that may be imposed by law, a Shareholders’
agreement or any other agreement, to the holder of the Restricted
Stock.  The Company shall not be required to deliver any fractional
Share but will pay, in lieu thereof, the Fair Market Value (determined as of the
date the restrictions lapse) of such fractional Share to the holder
thereof.  Concurrently with the delivery of a certificate for
Restricted Stock, the holder shall be required to pay an amount necessary to
satisfy any applicable federal, state and local tax requirements as set out in
Article 15 below. Notwithstanding the foregoing, if a Participant is deemed on
the date of his or her ‘separation from service’ (within the meaning of Treas.
Reg. Section 1.409A-1(h)) with the Corporation to be a ‘specified employee’
(within the meaning of Treas. Reg. Section 1.409-1(i)), then with regard to any
payment that is considered deferred compensation under Section 409A payable on
account of a ‘separation from service’ that is required to be delayed pursuant
to Section 409(a)(2)(b) of the Code (after taking into account any applicable
exceptions to such requirement), such payment shall be made on the date that is
the earlier of (i) the expiration of the six (6)-month period measured from the
date of the Participant’s ‘separation from service;’ or (ii) the date of the
Participant’s death (the ‘Delay Period’).  Upon the expiration of the
Delay Period, all payments delayed pursuant to this Section 8.4 shall be paid to
Participant in a lump sum.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    8.5  Nonassignability of
Restricted Stock.  Unless
the Committee provides otherwise in the Agreement, no grant of, nor any right or
interest of a Participant in or to, any Restricted Stock, or in any instrument
evidencing any grant of Restricted Stock under the Plan, may be assigned,
encumbered or transferred except, in the event of the death of a Participant, by
will or the laws of descent and distribution.

     

    8.6       Payment of Stock
Awards.  Upon the grant of a Stock Award, a Shares shall be
issued to the Participant not later than March 15 of the year following the year
in which the Stock Award is granted.

     

    ARTICLE
9.   PERFORMANCE
UNIT AWARDS

     

    9.1  Award.  The
Committee may designate Participants to whom Performance Unit Awards will be
granted from time to time for no consideration and specify the number of Shares
of Common Stock covered by the Award.  Subject to adjustment under the
principles set forth in Section 4.4 above, the maximum number of Shares subject
for Performance Units which can be granted under the Plan during any calendar
year to any individual is 300,000 Shares (or the fair market value thereof). The
Committee shall set forth all of the material terms of any Performance Unit
Award in a written document that satisfies the requirements of Section 409A of
the Code, or that evidences that such Performance Unit Award does not provide
for deferred compensation subject to Section 409A of the Code.

     

    9.2  Earning the
Award.  A
Performance Unit Award, or portion thereof, will be earned, and the Participant
will be entitled to receive Common Stock, a cash payment or a combination
thereof, only upon the achievement by the Participant, the Company, or a Parent
or Subsidiary of such performance objectives as the Committee, in its
discretion, shall prescribe on the date of grant.

     

    The
Committee may in determining whether performance targets have been met adjust
the Company’s financial results to exclude the effect of unusual charges or
income items or other events, including acquisitions or dispositions of
businesses or assets, restructurings, reductions in force, currency fluctuations
or changes in accounting, which are distortive of financial results (either on a
segment or consolidated basis).  In addition, the Committee will
adjust its calculations to exclude the effect on financial results of changes in
the Code or other tax laws, or the regulations relating thereto.

     

    9.3  Payment.  In
the discretion of the Committee, the amount payable when a Performance Unit
Award is earned may be settled in cash, by the grant of Common Stock or a
combination of cash and Common Stock.  The aggregate Fair Market Value
of the Common Stock received by the Participant pursuant to a Performance Unit
Award, together with any cash paid to the Participant, shall be equal to the
aggregate Fair Market Value, on the date the Performance Units are earned, of
the number of Shares of Common Stock equal to each Performance Unit
earned.  A fractional Share will not be deliverable when a Performance
Unit Award is earned, but a cash payment will be made in lieu
thereof.

     

    9.4  Shareholder
Rights.  No
Participant shall have, as a result of receiving a Performance Unit Award, any
rights as a Shareholder until and to the extent that the Performance Units are
earned and Common Stock is transferred to such Participant.  If the
Agreement so provides, a Participant may receive a cash payment equal to the
dividends that would have been payable with respect to the number of Shares of
Common Stock covered by the Award between (a) the date that the Performance
Units are awarded and (b) the date that a transfer of Common Stock to the
Participant, cash settlement, or combination thereof is made pursuant to the
Performance Unit Award.  A Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of a Performance Unit Award or the
right to receive Common Stock thereunder other than by will or the laws of
descent and distribution.  After a Performance Unit Award is earned
and paid in Common Stock, a Participant will have all the rights of a
Shareholder with respect to the Common Stock so awarded; provided that the
restrictions of any Shareholders’ agreement or other agreement shall, if
applicable, continue to apply.

     

    
      
         

      

      
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    ARTICLE
10.   BENEFICIARY
DESIGNATION

     

    To the
extent applicable, each Participant under the Plan may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit.  Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Company and shall be effective only when filed by
the Participant, in writing, with the Company during the Participant’s
lifetime.  In the absence of any such designation, benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s
estate.  If required, the spouse of a married Participant domiciled in
a community property jurisdiction shall join in any designation of a beneficiary
or beneficiaries other than the spouse.

     

    ARTICLE
11.   DEFERRALS

     

    The
Committee may permit a Participant to defer to another plan or program such
Participant’s receipt of Shares or cash that would otherwise be due to such
Participant by virtue of any Award.  If any such deferral election is
required or permitted, the Committee shall, in its sole discretion, establish
rules and procedures for such payment deferrals.

     

    ARTICLE
12.   RIGHTS OF
PARTICIPANTS

     

    12.1  Employment.  Nothing
in the Plan shall interfere with or limit in any way the right of the Company or
a Parent, Subsidiary, or affiliate of the Company to terminate any Participant’s
employment by, or performance of services for, the Company or any Parent,
Subsidiary, or affiliate of the Company at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company or a
Parent, Subsidiary, or affiliate of the Company.  For purposes of the
Plan, transfer of employment of a Participant between the Company and any one of
its affiliates (or between affiliates) shall not be deemed a termination of
employment.

     

    12.2  Participation.  No
Employee shall have the right to be selected to receive an Award under this
Plan, or, having been so selected, to be selected to receive a future
Award.

     

    ARTICLE
13.   CHANGE IN
CONTROL

     

    13.1  Definition.  For
purposes of the Plan, a “Change in Control” means any of the following
events:

     

    
      	
               
      

            	
              (a)

            	
              The
      acquisition (other than from the Company) by any Person of Beneficial
      Ownership of fifty percent (50%) or more of the combined voting power of
      the Company’s then outstanding voting securities within a twelve
      (12)-month period; provided, however, that for purposes of this Section
      13.1, Person shall not include any person who on the date hereof owns 25%
      or more of the Company’s outstanding securities, and a Change in Control
      shall not be deemed to occur solely because fifty percent (50%) or more of
      the combined voting power of the Company’s then outstanding securities is
      acquired by (i) a trustee or other fiduciary holding securities under one
      or more employee benefit plans maintained by the Company or any of its
      subsidiaries, or (ii) any corporation, which, immediately prior to such
      acquisition, is owned directly or indirectly by the Shareholders of the
      Company in the same proportion as their ownership of stock in the Company
      immediately prior to such
acquisition.

            

    

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              Approval
      by Shareholders of the Company of (1) a merger or consolidation involving
      the Company if the Shareholders of the Company, immediately before such
      merger or consolidation do not, as a result of such merger or
      consolidation, own, directly or indirectly, more than fifty percent (50%)
      of the combined voting power of the then outstanding voting securities of
      the corporation resulting from such merger or consolidation in
      substantially the same proportion as their ownership of the combined
      voting power of the voting securities of the Company outstanding
      immediately before such merger or consolidation, or (2) a complete
      liquidation or dissolution of the Company, or (3) an agreement for the
      sale or other disposition of all or substantially all of the assets of the
      Company.

            

    

     

    
      	
               
      

            	
              (c)

            	
              A
      change in the composition of the Board such that the individuals who, as
      of the first date of such period, constitute the Board (such Board shall
      be hereinafter referred to as the “Incumbent Board”) cease
      for any reason to constitute at least a majority of the Board; provided,
      however, for purposes of this Section 13.1 that any
      individual who becomes a member of the Board during such twelve (12)-month
      whose election, or nomination for election by the Company’s Shareholders,
      was approved by a vote of at least a majority of those individuals who are
      members of the Board and who were also members of the Incumbent Board (or
      deemed to be such pursuant to this proviso) shall be considered as though
      such individual were a member of the Incumbent Board; but, provided,
      further, that any such individual whose initial assumption of office
      occurs as a result of either an actual or threatened election contest (as
      such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
      Exchange Act, including any successor to such Rule), or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other than the Board, shall not be so considered as a member of the
      Incumbent Board.

            

    

     

    ARTICLE
14.  AMENDMENT,
MODIFICATION AND TERMINATION

     

    14.1  Amendment, Modification and
Termination.  The
Board may, at any time and from time to time, alter, amend, suspend or terminate
the Plan in whole or in part; provided, that, unless approved by the holders of
a majority of the total number of Shares of the Company represented and voted at
a meeting at which a quorum is present, no amendment shall be made to the Plan
if such amendment would (a) materially modify the eligibility requirements
provided in Article 5; (b) increase the total number of Shares which may be
granted under the Plan (except as provided in Section 4.4); (c) extend the term
of the Plan; or (d) amend the Plan in any other manner which the Board, in its
discretion, determines should become effective only if approved by the
Shareholders even if such Shareholder approval is not expressly required by the
Plan or by law.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    14.2  Awards Previously
Granted.  No
termination, amendment or modification of the Plan shall adversely affect in any
material way any Award previously granted under the Plan, without the written
consent of the Participant holding such Award.  The Committee shall,
with the written consent of the Participant holding such Award, have the
authority to cancel Awards outstanding and grant replacement Awards
therefor.

     

    14.3  Compliance With Code Section
162(m).  At
all times when the Committee determines that compliance with Code Section 162(m)
is required or desired, all Awards granted under this Plan to Named Executive
Officers shall comply with the requirements of Code
Section 162(m).  In addition, in the event that changes are made
to Code Section 162(m) to permit greater flexibility with respect to any Award
or Awards under the Plan, the Committee may, subject to this Article 14, make
any adjustments it deems appropriate.

     

    The
vesting of any Restricted Stock Award granted pursuant to Section 8 above may,
and the payment of any Performance Unit granted pursuant to Section 9 above
shall, be made only upon certification by the Committee of the attainment, over
a performance period established by the Committee, of any one or more
quantifiable performance targets, which have been established by the
Committee.  Such targets may be either absolute or relative and shall
be based on earnings, earnings per share, earnings before interest, taxes and
depreciation and amortization, growth in earnings per share, achievement of
annual operating profit plans, operating profit margin, return on equity
performance, total shareholder return, stock price, system-wide sales, customer
satisfaction, store income as a percentage of sales, comparable store sales
growth, number of new store operating weeks, achievement of new store sales
standards, EBITDA, return on assets, general administrative expenses as a
percentage of revenue, or aging of accounts receivable.  The specific
performance targets for each participating executive officer shall be
established in writing by the Committee within 90 days after the commencement of
the fiscal year (or within such other time period as may be required by Section
162(m) of the Internal Revenue Code) to which the performance target
relates.  The performance target shall be established in such a manner
that a third party having knowledge of the relevant facts could determine
whether the performance goal has been met.

     

    ARTICLE
15.   WITHHOLDING

     

    15.1  Tax
Withholding.  The
Company shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy federal,
state and local taxes (including the Participant’s FICA obligation) required by
law to be withheld with respect to any taxable event arising in connection with
an Award under this Plan.

     

    15.2  Share
Withholding. 
With respect to withholding required upon the exercise of Options, or upon any
other taxable event arising as a result of Awards granted hereunder which are to
be paid in the form of Shares, Participants may elect, subject to the approval
of the Committee, to satisfy the withholding requirement, in whole or in part,
by having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which could be
imposed on the transaction.  In addition, Participants may elect,
subject to the approval of the Committee, to satisfy tax withholding
requirements by tendering Common Stock to the Company.  All elections
shall be irrevocable, made in writing, signed by the Participant, and elections
by Insiders shall additionally comply with all legal requirements applicable to
Share transactions by such Participants.

     

    ARTICLE
16.  INDEMNIFICATION

     

    Each
person who is or shall have been a member of the Committee, or the Board, shall
be indemnified and held harmless by the Company against and from any loss, cost,
liability or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan and against and from
any and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of indemnification shall be in addition
to any other rights of indemnification to which such persons may be entitled
under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    ARTICLE
17.  SUCCESSORS

     

    All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.

     

    ARTICLE
18.  LEGAL
CONSTRUCTION

     

    18.1  Gender and
Number.  Except
where otherwise indicated by the context, any masculine term used herein shall
also include the feminine; the plural shall include the singular and the
singular shall include the plural.

     

    18.2  Severability.  If
any provision of the Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.

     

    18.3  Requirements of
Law.  The
granting of Awards and the issuance of Shares under the Plan shall be subject to
all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.

     

    18.4  Regulatory Approvals and
Listing.  The
Company shall not be required to issue any certificate or certificates for
Shares under the Plan prior to (i) obtaining any approval from any governmental
agency which the Company shall, in its discretion, determine to be necessary or
advisable, (ii) the admission of such Shares to listing on any national
securities exchange or Nasdaq on which the Company’s Shares may be listed, and
(iii) the completion of any registration or other qualification of such Shares
under any state or federal law or ruling or regulation of any governmental body
which the Company shall, in its sole discretion, determine to be necessary or
advisable.

     

    To the
extent applicable, if required by the then-current Section 16 of the Exchange
Act, any “derivative security” or “equity security” offered pursuant to the Plan
to any Insider may not be sold or transferred for at least six (6) months after
the date of grant of such Award.  The terms “equity security” and
“derivative security” shall have the meanings ascribed to them in the
then-current Rule 16(a) under the Exchange Act.

     

    18.5  Securities Law
Compliance.  To
the extent applicable, with respect to Insiders, transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act.  To the extent any provisions of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Committee.

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    18.6  Governing
Law.  To
the extent not preempted by Federal law, the Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
North Carolina.

     

    18.7  Section
409A.  It
is intended that the Plan and Awards issued hereunder will comply with Section
409A of the Code (and any regulations and guidelines issued thereunder) to the
extent the Awards are subject thereto, and the Plan and such Awards shall be
interpreted on a basis consistent with such intent.  The Plan and any
Award Agreements issued thereunder may be amended in any respect deemed by the
Board or the Committee to be necessary in order to preserve compliance with
Section 409A of the Code.

     

    
      
         

      

      
        -17-

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