Document:

ex10-2.htm

    
      

    

    
      Exhibit
10.2

       

    

    AMENDMENT
NO. 3 TO

    REVOLVING
CREDIT AGREEMENT

    

    This
AMENDMENT NO. 3 TO REVOLVING
CREDIT AGREEMENT, dated as of October 29, 2008 (this “Amendment”), is by
and among KAMAN
CORPORATION, a Connecticut corporation (the “Company”), certain
Subsidiaries of the Company party hereto pursuant to Section 1.13 of the
Credit Agreement (each a “Designated Borrower”
and together with the Company, the “Borrowers” and, each
a “Borrower”),
the various financial institutions as are or may become parties hereto
(collectively, the “Banks”), THE BANK OF NOVA SCOTIA
(“Scotia Bank”)
and BANK OF AMERICA, N.A.
(“Bank of
America”), as the Co-Administrative Agents (individually, a “Co-Administrative
Agent” and collectively, the “Co-Administrative
Agents”) for the Banks, and Bank of America as the Administrator for the
Banks (the “Administrator”).

     

    WHEREAS, the Borrowers, the
Co-Administrative Agents, the Banks and the Administrator are parties to a
certain Revolving Credit Agreement, dated as of August 5, 2005 (as amended and
in effect from time to time, the “Credit
Agreement”);

     

    WHEREAS, the Company has
advised the Co-Administrative Agents and the Banks that the Borrowers desire to
amend certain provisions of the Credit Agreement as provided more fully herein
below; and

     

    WHEREAS, the requisite Banks
have agreed to make such amendments subject to the satisfaction of the
conditions set forth herein.

     

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

     

    §1.  Defined
Terms. Terms
not otherwise defined herein which are defined in the Credit Agreement shall
have the same respective meanings herein as therein.

     

    §2.  Amendments
to the Credit Agreement.  Subject to the conditions precedent
set forth in Section
3 below, the Credit Agreement shall be amended as follows:

    

    (a)           Section 1.7(a)(i) of
the Credit Agreement is hereby amended by inserting the following proviso at the
end thereof:

    

    “provided, that the
Base Rate shall at all times be greater than or equal to the Eurocurrency Rate
for a one month Interest Period as quoted on such date plus the Applicable
Margin on such date (the “Total Eurocurrency Interest
Rate”) and, at any time the Base Rate is less than the Total Eurcurrency
Interest Rate, such Loan shall bear interest at the Total Eurocurrency Interest
Rate.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           Section 1.17(c) of
the Credit Agreement is hereby amended by inserting the following proviso at the
end thereof:

    

    “provided, that if the
Base Rate does not adequately and fairly reflect the cost to such Banks of
funding such Loan, upon the request of the Administrator, the Administrator and
the Majority Banks, shall negotiate in good faith with the Borrowers to reach
agreement on the interest rate for such Loan, taking into account the cost to
such Banks of funding such Loan.”

    

    (c)           Section 5.3 of the
Credit Agreement is hereby amended by amending and restating the proviso therein
to read as follows:

    

    “provided, that (i)
each Subsidiary may guarantee the Obligations of the Company and each other
Obligor hereunder and under each other Credit Document pursuant to a Domestic
Subsidiary Guarantee, (ii) each Subsidiary may guarantee the Obligations (as
defined in the Term Loan Credit Agreement) of the Borrowers under the Term Loan
Credit Agreement and (iii) the Company may guarantee Indebtedness of its
Subsidiaries, so long as the aggregate amount of all Indebtedness so guaranteed,
when totaled with all Consolidated Total Indebtedness, without duplication (if
not already included therein) shall not result in a violation of any of the
financial covenants herein or in any other Event of Default
hereunder.  

     

    (d)           Section 5.13 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

    

    “Section
5.13. Limitations on Transfers to
Foreign Subsidiaries.  Notwithstanding any provision herein to
the contrary, in no event shall the sum of (a) the principal amount of all
Loans, together with accrued and unpaid interest, provided to Borrowers that are
Foreign Subsidiaries, plus (b) the
principal amount of all loans under the Term Loan Credit Agreement, together
with accrued and unpaid interest, outstanding to Borrowers that are Foreign
Subsidiaries, plus (c) the face
amount of all Letters of Credit issued and outstanding for the account of
Foreign Subsidiaries, plus (d) Contingent
Liabilities of Domestic Subsidiaries for the benefit of Foreign Subsidiaries
incurred after the Effective Date, plus (e) Investments
of the Company and Domestic Subsidiaries in Foreign Subsidiaries (including
intercompany loans) made after the Effective Date, exceed $15,000,000 in the
aggregate at any one time outstanding.”

    

    (e)           Article V of the
Credit Agreement is hereby amended by inserting the following new Section 5.14 at the
end of such Article:

    

    “Section 5.14. Most Favored
Lender.  Agree to, with or for
the benefit of the holder(s) of any Indebtedness of, or commitments to provide
loans to, the Company or any of its Subsidiaries under the Term Loan Credit
Agreement (or any refinancing or replacement thereof), any financial or
restrictive covenants or events of default which are more restrictive than, or
in addition to, the financial or negative covenants or Events of Default
contained in this Agreement, or the granting of security, unless the Obligors
have entered into an agreement with the Banks, in form and substance reasonably
satisfactory to the Banks, whereby such financial or negative covenants or
events of default or provisions regarding security are added to this
Agreement. In addition, if any
provisions of the Term Loan Credit Agreement are updated (including to be
consistent with current practices), the Company will allow this Agreement to be
modified or supplemented on similar terms.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)           Section 7.1(f) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

    

    “(f)           (i) any “Event of Default” shall occur under the Term
Loan Credit Agreement, as the same is in effect from time to time or (ii)
any obligation of the Company or any Subsidiary for the payment of
Indebtedness in excess of Five Million Dollars ($5,000,000), individually or in
the aggregate, (A) becomes or is declared
to be due and payable prior to the stated maturity thereof as a result of a
default by the Company or any Subsidiary, (B) is not paid when due or within any grace
period for the payment thereof, or (C) is
evidenced or secured by an agreement pursuant to which there shall occur any
default in the performance or observance of any other term, condition or
agreement if the effect of such default is to cause or permit the holder or
holders of such obligation to cause such obligation to become due prior to its
stated maturity;”

     

    (g)           Section 9.7 of the
Credit Agreement is hereby amended by:

    

    (i)           inserting
the following new definition in appropriate alphabetical order:

    

    ““Term Loan Credit
Agreement” means that certain Term Loan Credit Agreement, dated as of
October 29, 2008 among the Company, certain Subsidiaries of the Company from
time to time party thereto, the Co-Administrative Agents, the Administrator and
certain financial institutions party thereto, as the same shall be amended,
supplemented or otherwise modified as of the date hereof.”

    

    (ii)           amending
and restating the definition of “Domestic Subsidiary” in its entirety as
follows:

    

    ““Domestic Subsidiary”
means a Subsidiary organized under the laws of the United States or any state
thereof.  For all purposes herein, the UK Subsidiary shall be treated
as a Domestic Subsidiary Guarantor.”

    

    §3.  Conditions
to Effectiveness.  This Amendment shall be deemed to be
effective as of the date hereof, subject to the satisfaction of the following
conditions precedent:

     

       
(a) receipt by the Co-Administrative Agents of a counterpart
signature page to this Amendment duly executed and delivered by the Borrowers,
the Co-Administrative Agents and the requisite Banks;

     

    (b) receipt
by the Co-Administrative Agents of a Domestic Subsidiary Guarantee duly executed
and delivered by Kaman UK Holdings Limited (“UK Subsidiary”) and
Industrial Rubber & Mechanics, Inc. (“PR
Subsidiary”);

     

    (c) receipt
by the Co-Administrative Agents of an opinion addressed to the Banks, the
Administrator and each of the Co-Administrative Agents, in a form satisfactory
to each of the Co-Administrative Agents from Skadden Arps, Slate, Meagher &
Flom LLP, special English counsel to the Company;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d) receipt
by the Co-Administrative Agents of certified copies of (i) all corporate action
taken by the UK Subsidiary and the PR Subsidiary to authorize the execution,
delivery and performance of the Domestic Subsidiary Guarantee and (ii) all the
UK Subsidiary’s and the PR Subsidiary’s Governing Documents;

     

    (e) receipt
by the Co-Administrative Agents of a Term Loan Credit Agreement duly executed
and delivered by the Company, the Co-Administrative Agents, the Administrator
and the various financial institutions party thereto; and

     

    (f) receipt
by the Co-Administrative Agents of such other documents as the Co-Administrative
Agents, for the benefit of the Banks and the Co-Administrative Agents, may
reasonably request.

     

    §4.  Representations
and Warranties.  Each Borrower hereby represents and warrants
to the Banks as follows:

     

    (a) Representation and
Warranties in the Credit Agreement.  The representations and
warranties of the Borrowers contained in the Credit Agreement were true and
correct in all material respects as of the date when made and continue to be
true and correct in all material respects on the date hereof, except to the
extent of changes resulting from transactions or events contemplated or
permitted by the Credit Agreement and the other Credit Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse to the Borrowers, or to the extent that such
representations and warranties relate expressly to an earlier date.

     

    (b)           Ratification,
Etc.  Except as expressly amended or waived hereby, the Credit
Agreement, the other Credit Documents and all documents, instruments and
agreements related thereto, are hereby ratified and confirmed in all respects
and shall continue in full force and effect.  The Credit Agreement,
together with this Amendment, shall be read and construed as a single
agreement.  All references in the Credit Documents to the Credit
Agreement or any other Credit Document shall hereafter refer to the Credit
Agreement or any other Credit Document as amended hereby.

     

    (c) Authority,
Etc.  The execution and delivery by the Borrowers of this
Amendment and the performance by each Borrower of all of its agreements and
obligations under the Credit Agreement and the other Credit Documents as amended
hereby are within the corporate authority of each Borrower and have been duly
authorized by all necessary corporate action on the part of such
Borrower.

     

    (d) Enforceability of
Obligations.  This Amendment and the Credit Agreement and the
other Credit Documents as amended hereby constitute the legal, valid and binding
obligations of each Borrower enforceable against each Borrower in accordance
with their terms, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of, creditors’ rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e) No
Default.  No Default or Event of Default has occurred and is
continuing.

     

    §5.  No Other
Amendments.  Except as expressly provided in this Amendment,
all of the terms and conditions of the Credit Agreement and the other Credit
Documents remain in full force and effect, including, but not limited to, the
Consent to Revolving Credit Agreement, dated as of May 15, 2008, by and among
the Borrowers, the Banks signatory thereto, the Co-Administrative Agents and the
Administrator.  Nothing contained in this Amendment shall in any way
prejudice, impair or effect any rights or remedies of any Bank or the Borrowers
under the Credit Agreement or the other Credit Documents.

     

    §6.  Execution
in Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, but which together
shall constitute one instrument.

     

    §7.  Expenses.  Pursuant
to Section 10.1
of the Credit Agreement, all costs and expenses incurred or sustained by the
Co-Administrative Agents in connection with this Amendment, including the fees
and disbursements of legal counsel for the Co-Administrative Agents in
producing, reproducing and negotiating the Amendment, will be for the account of
the Company whether or not this Amendment is consummated.

     

    §8.  Miscellaneous.  THIS
AMENDMENT SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK AND SHALL BE CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PROVISIONS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW). The captions in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as a sealed instrument as of the
date first above written.

    

    
      
        
          	 
      	
                  KAMAN
      CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name: 
      Robert M. Garneau

                
	 
      	
                  Title:   
      Executive Vice President and

                
	 
      	
                  Chief
      Financial Officer

                

        

      

    

    
 

    

    
      
        
          	 
      	
                  RWG
      FRANKENJURA-INDUSTRIE

                  FLUGWERLAGER
      GMBH

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name: 
      Robert M. Garneau

                
	 
      	
                  Title:  
       Prokurist

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          	 
      	
                  BANK
      OF AMERICA, N.A.,

                  as
      a Co-Administrative Agent and the Administrator

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Kenneth
      S. Struglia

                
	 
      	
                  Name:  Kenneth
      S. Struglia

                
	 
      	
                  Title:    Managing
      Director

                

        

      

    

    
 

    

    
      
        
          	 
      	
                  BANK
      OF AMERICA, N.A.,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Kenneth
      S. Struglia

                
	 
      	
                  Name:  Kenneth
      S. Struglia

                
	 
      	
                  Title:    Managing
      Director

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  THE
      BANK OF NOVA SCOTIA,

                  as
      a Co-Administrative Agent

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Todd
      Meller

                
	 
      	
                  Name:  Todd
      Meller

                
	 
      	
                  Title:    Managing
      Director

                

        

      

    

    

    

    

    
      
        
          	 
      	
                  THE
      BANK OF NOVA SCOTIA,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Todd
      Meller

                
	 
      	
                  Name:  Todd
      Meller

                
	 
      	
                  Title:   Managing
      Director

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  JPMORGAN
      CHASE BANK, N.A.,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Peter
      M. Killea

                
	 
      	
                  Name:  Peter
      M. Killea

                
	 
      	
                  Title:   Vice
      Presient

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  KEYBANK
      NATIONAL ASSOCIATION,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Suzannah
      Harris

                
	 
      	
                  Name:  Suzannah
      Harris

                
	 
      	
                  Title:   Vice
      President

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  RBS
      CITIZENS, N.A.,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Jeffrey
      C. Lynch

                
	 
      	
                  Name:  Jeffrey
      C. Lynch

                
	 
      	
                  Title:   SVP

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  WEBSTER BANK NATIONAL
      ASSOCIATION,

                  as
      a Bank

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Stephen
      Corcorran

                
	 
      	
                  Name:  Stephen
      Corcorran

                
	 
      	
                  Title:   Senior
      Vice President

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONSENT
OF GUARANTORS

    

    

    Each of the undersigned hereby
acknowledges and consents to Amendment No. 3 to Credit Agreement, dated as of
October 29, 2008, and agrees that the Domestic Subsidiary Guarantee, dated as of
August 5, 2005, executed by such Person in favor of each of the Bank Parties (as
defined therein), and all of the other Credit Documents to which such Person is
a party remain in full force and effect, and such Person confirms and ratifies
all of its obligations thereunder.

    

    
      
        
          	 
      	
                  KAMAN
      AEROSPACE GROUP, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

    
 

    

    
      
        
          
            	 
      	
                    KAMAN
      INDUSTRIAL

                      TECHNOLOGIES
      CORPORATION

                  
	 
      	 
      	 
      
	 
      	
                    By:  

                  	
                    /s/ Robert M.
      Garneau

                  
	 
      	
                    Name:  Robert
      M. Garneau

                  
	 
      	
                    Title:  Vice
      President and
Treasurer

                  

          

        

      

    

    

    

    

    
      
        
          	 
      	
                  KAMAN
      AEROSPACE CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

    
      
        
           

           

           

          
            	 
      	
                    KAMAN
      AEROSPACE

                    INTERNATIONAL
      CORPORATION

                  
	 
      	 
      	 
      
	 
      	
                    By:  

                  	
                    /s/ Robert M.
      Garneau

                  
	 
      	
                    Name:  Robert
      M. Garneau

                  
	 
      	
                    Title:  Vice
      President and Treasurer

                  

          

        

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            	 
      	
                    KAMATICS
      CORPORATION

                  
	 
      	 
      	 
      
	 
      	
                    By:  

                  	
                    /s/ Robert M.
      Garneau

                  
	 
      	
                    Name:  Robert
      M. Garneau

                  
	 
      	
                    Title:  Vice
      President and
Treasurer

                  

          

        

      

    

    

    

    

    
      
        
          	 
      	
                  KAMAN
      X CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

     

    

    

    
      
        
          	 
      	
                  K-MAX
      CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

     

    

    
      
        
          	 
      	
                  KAMAN
      PLASTICFAB GROUP, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

    

    

    

    
      
        
          	 
      	
                  PLASTIC
      FABICATING COMPANY, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

    

    

    

    
      
        
          	 
      	
                  KAMAN
      PRECISON PRODUCTS, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurer

                

        

      

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      
        
          	 
      	
                  INDUSTRIAL
      SUPPLY CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:  

                	
                  /s/ Robert M.
      Garneau

                
	 
      	
                  Name:  Robert
      M. Garneau

                
	 
      	
                  Title:  Vice
      President and Treasurerex10-ai.htm

    
      

    
Exhibit 10(a)(i)

    KAMAN
CORPORATION

    2003 STOCK INCENTIVE
PLAN

    

    Effective
November 1, 2003

    

    (As
Amended through September 23, 2008)

    

    1. Purpose.  This
Plan is designed to (a) give directors, officers and key employees of the
Corporation and other persons an expanded opportunity to acquire stock in the
Corporation or receive other long-term incentive remuneration in order that they
may better participate in the Corporation’s growth and be motivated to remain
with the Corporation and promote its further development and success and (b)
better align total compensation of executives of the Corporation with
shareholder interests through Long-Term Performance Awards subject to specific
performance criteria.  The Plan includes the continuation of certain
predecessor plans.

    

    2. Definitions.  The
following terms shall have the meanings given below unless the context otherwise
requires:

    

    
      (a)  “Act”
means the Securities Exchange Act of 1934, as amended.

    

    

    (b) “Award”
or “Awards” except where referring to a particular category of grant under the
Plan shall include Incentive Stock Options, Non-Statutory Stock Options, Stock
Appreciation Rights, Restricted Stock Awards and Long-Term Performance
Awards.

     

    (c) “Beneficial
Owner” is defined in Section 15(h)(iii)(A).

     

    (d) “Board”
means the Board of Directors of the Corporation or a Subsidiary as the context
may require.

    

    (e) “Cause”
is defined in Section 15(i)(iii).

     

    (f) “Change
in Control” is defined in Section 15(h)(iii).

    

    (g) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any
successor Code, and related rules, regulations and interpretations.

    

    (h) “Committee”
means the committee of the Board established under Section 10
hereof.

    

    (i) “Corporation”
means Kaman Corporation.

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    (j) “Covered
Employee” means a Participant whom the Committee designates, for each
Performance Period, in order to meet the Section 162(m) Exemption.

    

    (k) “Disability”
or “Disabled” means disability or disabled as defined by Code Section
22(e)(3).

    

    (l) “Effective
Date” is defined in Section 4.

    

    (m) “Eligible
Person” means any person, including a person who is not an employee of the
Corporation or a Subsidiary, or entity who satisfies all the eligibility
requirements set forth in either Section 3(a) or 3(b) hereof, excluding,
however, any member of the Committee and any alternate member of the
Committee.

    

    (n) “Fair
Market Value” of the Stock on any given date shall be the mean between the
highest and lowest quoted selling prices of the Stock in the NASDAQ Global
Market on such date. If there were no sales on the valuation date, "Fair Market
Value" shall be the closing price of the Stock in the NASDAQ Global Market on
the most recent trading day preceding the valuation date on which sales of the
Stock occurred.

    

    (o) “Federal
Income Tax Regulations” means the federal income tax regulations that implement
the Code, as they may be amended from time to time and any corresponding
successor regulations.

     

    (p) “Good
Reason” is defined in Section 15(i)(iv).

    

    (q) “Incentive
Stock Option” means a stock option qualifying under the provisions of Section
422 of the Code.

    

    (r) “Long-Term
Performance Award” means an award under Section 9(a) below.  A
Long-Term Performance Award shall permit the recipient to receive a bonus
payable in cash, stock or a combination of cash and stock (as determined by the
Committee) upon satisfaction of such performance factors as are set out in the
recipient’s individual grant.  Long-Term Performance Awards will be
based upon the achievement of Corporation, Subsidiary and/or individual
performance factors or upon such other criteria as the Committee may deem
appropriate.

    

    (s) “Merger”
means a merger, share exchange, consolidation or similar business combination
under applicable law.

    

    (t) “Non-Employee
Director” means an individual who is (i) an “outside director,” as described in
Federal Income Tax Regulations Section 1.162-27(e)(3), and (ii) an “independent
director” under the listing standards of the Nasdaq Stock Market, Inc. and also
meets the requirements of Rule 16b-3(b)(3)(i) promulgated under the Act, and any
successor to such rule.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (u) “Non-Employee
Director Participant” means an Eligible Person, who at the time of grant of an
Award is a director of the Corporation but not an employee of the Corporation or
a Subsidiary.

    

    (v) “Non-Statutory
Option” means a stock option not qualifying for incentive stock option treatment
under the provisions of Section 422 of the Code.

    

    (w) “Optionee”
means the holder of any option granted under the Plan.

    

    (x) “Participant”
means the holder of any Award granted under the Plan.

    

    (y) “Performance
Period” is defined in Section 9(a).

    (z) “Person”
is defined in Section 15(h)(iv).

    

    (aa) “Plan”
means the Kaman Corporation 2003 Stock Incentive Plan.

    

    (bb) “Predecessor
Plan” means any of the Corporation’s 1973 Stock Incentive Plan, 1983 Stock
Incentive Plan and 1993 Stock Incentive Plan.

    

    (cc) “Principal
Shareholder” means any individual owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of capital stock of the
Corporation or of any Subsidiary.

    

    (dd) “Qualified
Performance-Based Award” means (i) a Long-Term Performance Award or Restricted
Stock Award that is intended to qualify for the Section 162(m) Exemption and is
made subject to objective performance goals based on Qualified Performance
Criteria as set forth in Section 15(c), or (ii) an Option or SAR having an
exercise price equal to or greater than the Fair Market Value of the underlying
Stock as of the date it is granted.

    

    (ee) “Qualified
Performance Criteria” means one or more of the performance criteria listed in
Section 15(c) upon which performance goals for certain Qualified
Performance-Based Awards may be established by the Committee and which meet the
requirements for the Section 162(m) Exemption.

    

    (ff) “Restricted
Stock” means Stock received pursuant to a Restricted Stock Award.

    

    (gg) “Restricted
Stock Award” is defined in Section 8(a).

    

    (hh) “Retirement”
means retirement at or after 62 years of age in accordance with the terms of the
Corporation’s tax-qualified Employees’ Pension Plan.

    

    
      
        
        

      

      
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    (ii) “Section
162(m) Exemption” means the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C)
of the Code.

    

    (jj) “Section
409A” means Section 409A of the Code, and regulations promulgated
thereunder.

    

    (kk) “Stock”
or “shares” means shares of Common Stock of the Corporation.

    

    (ll) “Stock
Appreciation Right” or “Right” means a right described in Section
7.

    

    (mm) “Subsidiary”
means any corporation within the meaning of Section 424(f) of the
Code.

    

    3. Eligibility.

    

    (a) Incentive Stock
Options.  Incentive Stock Options may be granted to any
Eligible Persons who are full-time, salaried employees of the Corporation or a
Subsidiary and who in the sole opinion of the Committee are, from time to time,
responsible for the management and/or growth of all or part of the business of
the Corporation.

    

    (b) Awards Other than Incentive
Stock Options.  Awards, other than Incentive Stock Options, may
be granted to any Eligible Persons who in the sole opinion of the Committee are,
from time to time, responsible for the growth and/or the management of all or a
part of the business of the Corporation or Subsidiary.

    

    (c) Substitute
Awards.  The Committee, in its discretion, may also grant
Awards in substitution for any stock incentive awards previously granted by
companies acquired by the Corporation or one of its
Subsidiaries.  Such substitute awards may be granted on such terms and
conditions as the Committee deems appropriate in the circumstances, provided,
however, that substitute Incentive Stock Options shall be granted only in
accordance with the Code.

    

    4. Term of
Plan.  The Plan is effective on November 1, 2003 (the
“Effective Date”) and shall continue to be effective for ten (10) years
thereafter, expiring on October 31, 2013.

    

    5. Stock Subject to the
Plan.  The aggregate number of shares of Stock which may be
issued pursuant to all Awards granted under the Plan shall not exceed 2,000,000
shares of Stock, subject to adjustment as hereinafter provided in Section 11,
which shall be in addition to all shares of Stock issued or reserved for
issuance pursuant to Awards granted under any Predecessor Plan, and which may be
treasury shares or authorized but unissued shares.  In the event that
any Award under the Plan or any Predecessor Plan for any reason expires, is
terminated, forfeited, reacquired by the Corporation, or satisfied without the
issuance of Stock (except in the cases of (i) Stock otherwise issuable under an
Award but retained by the Corporation for payment of withholding taxes under
Section 15(b) hereof; (ii) Stock otherwise issuable under a stock option but for
which the Corporation has made a discretionary payment under Section 7(d) hereof
and (iii) Stock underlying any Incentive Stock Option, Non-Statutory Option, or
Stock Appreciation Right that is cancelled in connection with a repricing of the
exercise price thereunder) the shares allocable to the unexercised portion of
such Award may again be made subject to an Award under the Plan.  Any
award of a Stock Appreciation Right, to the extent that such Stock Appreciation
Right may be settled only for cash, shall not be deemed to reduce the aggregate
number of shares of Stock authorized to be issued pursuant to Awards granted
under the Plan.

    

    
      
        
        

      

      
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    6. Stock
Options.  The following terms and conditions shall apply to
each option granted under the Plan and shall be set forth in a stock option
agreement between the Corporation and the Optionee together with such other term
and conditions not inconsistent herewith as the Committee may deem appropriate
in the case of each Optionee:

    

    (a) Option
Price.  The purchase price under each Incentive Stock Option
shall be as determined by the Committee but not less than 100% of the Fair
Market Value of the shares subject to such option on the date of grant, provided
that such option price shall not be less than 110% of such Fair Market Value in
the case of any Incentive Stock Option granted to a Principal
Shareholder.  The purchase price per share of Stock deliverable upon
the exercise of a Non-Statutory Option shall be determined by the Committee, but
shall not be less than 100% of the Fair Market Value of such Stock on the date
of grant.  In no event shall the purchase price of any Stock be less
than the par value per share of such Stock.

    

    (b) Type of
Option.  All options granted under the Plan shall be either
Incentive Stock Options or Non-Statutory Options.  All provisions of
the Plan applicable to Incentive Stock Options shall be interpreted in a manner
consistent with the provisions of, and regulations under, Section 422 of the
Code.

    

    (c) Period of Incentive Stock
Option.  Each Incentive Stock Option shall have a term not in
excess of ten (10) years from the date on which it is granted, except in the
case of any Incentive Stock Option granted to a Principal Shareholder which
shall have a term not in excess of five (5) years from the date on which it is
granted; provided that any Incentive Stock Option granted or the unexercised
portion thereof, to the extent exercisable at the time of termination of
employment, shall terminate at the close of business on the day three (3) months
following the date on which the Optionee ceases to be employed by the
Corporation or a Subsidiary unless sooner expired or unless a longer period is
provided under subsection (g) of this Section in the event of the death or
Disability of such an Optionee.

    

    (d) Period of Non-Statutory
Option.  Each Non-Statutory Option granted under the Plan shall
have a term not in excess of ten (10) years and one (1) day from the date on
which it is granted; provided that any Non-Statutory Option granted to an
employee of the Corporation or a Subsidiary or to a Non-Employee Director
Participant, or the unexercised portion thereof, shall terminate not later than
the close of business on the day three (3) months following the date on which
such employee ceases to be employed by the Corporation or a Subsidiary or the
date on which such Non-Employee Director ceases to be a director of the
Corporation, as the case may be, unless a longer period is provided under
subsection (g) of this Section in the event of the death, Disability or
Retirement of such employee or the death or Disability of such Non-Employee
Director.  Such an Optionee’s Non-Statutory Option shall be
exercisable, if at all, during such three (3) month period only to the extent
exercisable on the date such Optionee’s employment terminates or the date on
which such Optionee ceases to be a director, as the case may be.

    

    
      
        
        

      

      
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    (e) Exercise of
Option.

    

            (i) Each
option granted under the Plan shall become exercisable on such date or dates and
in such amount or amounts as the Committee shall determine.  In the
absence of any other provision by the Committee, each option granted under the
Plan shall be exercisable with respect to not more than twenty percent (20%) of
such shares subject thereto after the expiration of one (1) year following the
date of its grant, and shall be exercisable as to an additional twenty percent
(20%) of such shares after the expiration of each of the succeeding four (4)
years, on a cumulative basis, so that such option, or any unexercised portion
thereof, shall be fully exercisable after a period of five (5) years following
the date of its grant; provided, however, that in the absence of any other
provision by the Committee, each Incentive Stock Option granted to a Principal
Shareholder shall be exercisable with respect to not more than twenty-five
percent (25%) of the shares subject thereto after the expiration of one (1) year
following the date of its grant, and shall be exercisable as to an additional
twenty-five percent (25%) after the expiration of each of the succeeding three
(3) years, on a cumulative basis, so that such option, or any unexercised
portion thereof, shall be fully exercisable after a period of four (4) years
following the date of its grant.

    

            (ii) The
Committee, in its sole discretion, may, from time to time and at any time,
accelerate the vesting provisions of any outstanding option, subject, in the
case of Incentive Stock Options, to the provisions of Section (6)(i) relating to
“Limit on Incentive Options”.

    

            (iii) Notwithstanding
anything herein to the contrary, except as provided in subsection (g) of this
Section, no Optionee who was, at the time of the grant of an option, an employee
of the Corporation or a Subsidiary, may exercise such option or any part thereof
unless at the time of such exercise he or she shall be employed by the
Corporation or a Subsidiary and shall have been so employed continuously since
the date of grant of such option, excepting leaves of absence approved by the
Committee; provided that the option agreement may provide that such an Optionee
may exercise his or her option, to the extent exercisable on the date of
termination of such continuous employment, during the three (3) month period,
ending at the close of business on the day three (3) months following the
termination of such continuous employment unless such option shall have already
expired by its term.

     

    
      
        
        

      

      
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            (iv) An option
shall be exercised in accordance with the related stock option agreement by
serving written notice of exercise on the Corporation accompanied by full
payment of the purchase price in cash.  As determined by the
Committee, in its discretion, at (or, in the case of Non-Statutory Options, at
or after) the time of grant, payment in full or in part may also be made by
delivery of (i) irrevocable instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds to pay the exercise price, or
(ii) previously owned shares of Stock not then subject to restrictions under any
Corporation plan (but which may include shares the disposition of which
constitutes a disqualifying disposition for purposes of obtaining incentive
stock option treatment for federal tax purposes), or (iii) shares of Stock
otherwise receivable upon the exercise of such option; provided, however, that
in the event the Committee shall determine in any given instance that the
exercise of such option by withholding shares otherwise receivable would be
unlawful, unduly burdensome or otherwise inappropriate, the Committee may
require that such exercise be accomplished in another acceptable
manner.  For purposes of this subsection (iv), such surrendered shares
shall be valued at the closing price of the Stock in the NASDAQ Global Market on
the most recent trading day preceding the date of exercise on which sales of the
Stock occurred.

    

    (f) Transferability.  No
option granted under the Plan shall be transferable by the Optionee otherwise
than by will or by the laws of descent and distribution, and such option shall
be exercisable, during the Optionee’s lifetime, only by the
Optionee.

    

    (g) Death, Disability or
Retirement of Optionee.

    

                (i)  With
respect to Incentive Stock Options, in the event of the death or Disability of
an Optionee while in the employ of the Corporation or a Subsidiary or while
serving as a director of the Corporation, such Optionee’s Incentive Stock
Option, or the unexercised portion thereof, may be exercised within the period
of one (1) year succeeding such Optionee’s death or Disability, but in no event
later than ten (10) years (five (5) years in the case of a Principal
Shareholder) from the date the Incentive Stock Option was granted.

    

            (ii)  With
respect to Non-Statutory Options, in the event of the death, Disability or
Retirement of an Optionee while in the employ of the Corporation or a Subsidiary
or in the event of death or Disability of an Optionee while serving as a
Director of the Corporation, such Optionee’s Non-Statutory Option, or the
unexercised portion thereof, may be exercised within the period of five (5)
years succeeding such Optionee’s death, Disability or Retirement, but in no
event later than ten (10) years and one (1) day from the date the Non-Statutory
Option was granted, by the person or persons designated in the Optionee’s will
for that purpose or in the absence of any such designation, by the legal
representative of the Optionee’s estate, or by the Optionee or the Optionee’s
legal representative, as the case may be.

    

    
      
        
        

      

      
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               (iii) 
Notwithstanding anything herein to the contrary and in the absence of any
contrary provision by the Committee, during any period following termination of
employment by reason of death, Disability or Retirement, or cessation as a
director by reason of death or Disability, during which an Optionee’s Stock
Option may be exercisable as provided in either subsection (i) or (ii) above,
such Stock Option shall continue to vest in accordance with its terms and be and
become exercisable as if employment or service as a director had not
ceased.

    

    (h) Shareholder
Rights.  No Optionee shall be entitled to any rights as a
shareholder with respect to any shares subject to his or her option prior to the
date of issuance to him or her of a stock certificate representing such
shares.

    

    (i) Limit on Incentive Stock
Options.  The aggregate Fair Market Value (determined at the
time an option is granted) of shares with respect to which Incentive Stock
Options granted to an employee are exercisable for the first time by such
employee during any calendar year (under all incentive stock option plans of the
Corporation and its Subsidiaries to the extent required under the Code) shall
not exceed $100,000.

    

    (j) Notification of
Disqualifying Disposition.  Participants granted Incentive
Stock Options shall undertake, in the Incentive Stock Option agreements, as a
precondition to the granting of such option by the Corporation, to promptly
notify the Corporation in the event of a disqualifying disposition (within the
meaning of the Code) of any shares acquired pursuant to such Incentive Stock
Option agreement and provide the Corporation with all relevant information
related thereto.

    

    7. Stock Appreciation Rights;
Discretionary Payments.

    

    (a) Nature of Stock Appreciation
Right.  A Stock Appreciation Right is an Award entitling the
Participant to receive an amount in cash or shares of Stock (or forms of payment
permitted under Section 7(d) hereof) or a combination thereof, as determined by
the Committee at the time of grant, having a value equal to (or if the Committee
shall so determine at time of grant, less than) the excess of the closing price
of the Stock on the NASDAQ Global Market on the most recent trading day
preceding the date of exercise on which sales of the Stock occurred over the
Fair Market Value of a share of Stock on the date of grant (or over the option
exercise price, if the Stock Appreciation Right was granted in tandem with a
stock option) multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.

     

    (b) Grant and Exercise of Stock
Appreciation Rights.

     

            (i) 
Stock
Appreciation Rights may be granted in tandem with, or independently of, any
stock option granted under the Plan.  In the case of a Stock
Appreciation Right granted in tandem with either an Incentive Stock Option or a
Non-Statutory Option, such Right may be granted only at the time of the grant of
such option.  A Stock Appreciation Right or applicable portion thereof
granted in tandem with a given stock option shall terminate and no longer be
exercisable upon the termination or exercise of the related stock option, except
that a Stock Appreciation Right granted with respect to less than the full
number of shares covered by a related stock option shall not be reduced until
the exercise or termination of the related stock option exceeds the number of
shares not covered by the Stock Appreciation Right.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

             (ii)  Each
Stock Appreciation Right granted under the Plan shall become exercisable on such
date or dates and in such amount or amounts as the Committee shall determine;
provided, however, that any Stock Appreciation Right granted in tandem with a
stock option shall be exercisable in relative proportion to and to the extent
that such related stock option is exercisable.  Except as provided in
the immediately preceding sentence, in the absence of any other provision by the
Committee, each Stock Appreciation Right granted under the Plan shall be
exercisable with respect to not more than twenty percent (20%) of such shares
subject thereto after the expiration of one (1) year following the date of its
grant, and shall be exercisable as to an additional twenty percent (20%) of such
shares after the expiration of each of the succeeding four (4) years, on a
cumulative basis, so that such Right, or any unexercised portion thereof, shall
be fully exercisable after a period of five (5) years following the date of its
grant.  The Committee, in its sole discretion, may, from time to time
and at any time, accelerate the vesting provisions of any outstanding Stock
Appreciation Right.

     

             (iii)  Notwithstanding
anything herein to the contrary, except as provided in subsections (c)(v) and
(c)(vi) of this Section, no Participant who was, at the time of the grant of a
Stock Appreciation Right, an employee of the Corporation or a Subsidiary, may
exercise such Right or any part thereof unless at the time of such exercise, he
or she shall be employed by the Corporation or a Subsidiary and shall have been
so employed continuously since the date of grant of such Right, excepting leaves
of absence approved by the Committee; provided that the Stock Appreciation Right
agreement may provide that such a Participant may exercise his or her Stock
Appreciation Right, to the extent exercisable on the date of termination of such
continuous employment, during the three (3) month period ending at the close of
business on the day three (3) months following the termination of such
continuous employment, unless such Right shall have already expired by its
terms.

     

            (iv) 
Notwithstanding
anything herein to the contrary, except as provided in subsections (c)(v) and
(c)(vi) of this Section, no Non-Employee Director Participant may exercise a
Stock Appreciation Right or part thereof unless at the time of such exercise he
or she shall be a director of the Corporation and shall have been a director of
the Corporation continuously since the date of grant of such Right excepting
leaves of absence approved by the Committee; provided that the Stock
Appreciation Right agreement may provide that such Participant may exercise his
or her Stock Appreciation Right, to the extent exercisable on the date he or she
ceased to be a director of the Corporation, during the three (3) month period
ending at the close of business on the day three (3) months following the
cessation of such continuous service as a director unless such Right shall
already have expired by its terms.

     

    
      
        
        

      

      
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         (v) 
A Stock
Appreciation Right shall be exercised in accordance with the related Stock
Appreciation Right Agreement by serving written notice of exercise on the
Corporation.

    

    (c) Terms and Conditions of
Stock Appreciation Rights.  Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined from time to time by
the Committee, subject to the following:

     

            (i) 
Stock
Appreciation Rights granted in tandem with stock options shall be exercisable
only at such time or times and to the extent that the related stock options
shall be exercisable;

     

            (ii) 
Upon the
exercise of a Stock Appreciation Right, the applicable portion of any related
stock option shall be surrendered.

     

            (iii) 
Stock
Appreciation Rights granted in tandem with a stock option shall be transferable
only with such option.  Stock Appreciation Rights shall not be
transferable otherwise than by will or the laws of descent and
distribution.  All Stock Appreciation Rights shall be exercisable
during the Participant’s lifetime only by the Participant or the Participant’s
legal representative.

     

            (iv) 
A Stock
Appreciation Right granted in tandem with a stock option may be exercised only
when the then Fair Market Value of the Stock subject to the stock option exceeds
the exercise price of such option.  A Stock Appreciation Right not
granted in tandem with a stock option may be exercised only when the then Fair
Market Value of the Stock exceeds the Fair Market Value of the Stock on the date
of grant of such Right.

     

            (v) 
Each
Stock Appreciation Right shall have a term not in excess of ten (10) years from
the date on which it is granted (ten (10) years and one (1) day in the case of a
Stock Appreciation Right granted in tandem with a Non-Statutory Option);
provided that any Stock Appreciation Right granted to (aa) an employee of the
Corporation or a Subsidiary shall terminate not later than the close of business
on the day three (3) months following the date such Participant ceases to be
employed by the Corporation or a Subsidiary, except as provided in subsection
(c)(vi) of this Section and excepting leaves of absences approved by the
Committee, and (bb) a Non-Employee Director Participant shall terminate not
later than the close of business on the day three (3) months following the date
such Participant ceases to be a director of the Corporation, except as provided
in subsection (c)(vi) of this Section.  Such a Participant’s Stock
Appreciation Right shall be exercisable, if at all, during such three (3) month
period only to the extent exercisable on the date his or her employment
terminates or the date he or she ceases to be a director, as the case may
be.

     

    
      
        
        

      

      
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             (vi) In the
event of the death, Disability or Retirement of a Participant while in the
employ of the Corporation or a Subsidiary or in the event of the death or
Disability of a Participant while serving as a director of the Corporation, his
or her Stock Appreciation Right or the unexercised portion thereof may be
exercised within the period of five (5) years succeeding his or her death,
Disability or Retirement, but in no event later than (i) ten (10) years from the
date on which it was granted (ten (10) years and one (1) day in the case of a
Stock Appreciation Right granted in tandem with a Non-Statutory Option), by the
person or persons designated in the Participant’s will for that purpose or in
the absence of any such designation, by the legal representative of his or her
estate, or by the Participant or the legal representative of the Participant, as
the case may be.  Notwithstanding anything herein to the contrary and
in the absence of any contrary provision by the Committee, during the five-year
period following termination of employment by reason of death, Disability or
Retirement, or cessation as a director by reason of death or Disability, a
Participant’s Stock Appreciation Right shall continue to vest in accordance with
its terms and be and become exercisable as if employment or service as a
director had not ceased.

    

    (d) Discretionary
Payments.  Upon the written request of an Optionee whose stock
option is not accompanied by a Stock Appreciation Right, the Committee may, in
its discretion, cancel such option if the Fair Market Value of the shares
subject to the option at the exercise date exceeds the exercise price thereof;
in that event, the Corporation shall pay to the Optionee an amount equal to the
difference between the Fair Market Value of the shares subject to the cancelled
option (determined as of the date the option is cancelled) and the exercise
price.  Such payment shall be by check or in Stock having a Fair
Market Value (determined on the date the payment is to be made) equal to the
amount of such payments or any combination thereof, as determined by the
Committee.

    

    8. Restricted
Stock.

    

    (a) Nature of Restricted Stock
Award.  A Restricted Stock Award is an Award entitling the
Participant to receive shares of Stock, subject to such conditions, including a
Corporation right during a specified period or periods to require forfeiture of
such shares upon the Participant’s termination of employment with the
Corporation or a Subsidiary or cessation as a director of the Corporation, as
the case may be, as the Committee may determine at the time of
grant.  The Committee, in its sole discretion, may, from time to time
and at any time, waive any or all restrictions and/or conditions contained in
the Restricted Stock Award agreement.  Notwithstanding anything herein
to the contrary, the Committee, in its discretion, may grant Restricted Stock
without any restrictions or conditions whatsoever.  Restricted Stock
shall be granted in respect of past services or other valid
consideration.

    

    (b) Award
Agreement.  A Participant who is granted a Restricted Stock
Award shall have no rights with respect to such Award unless the Participant
shall have accepted the Award within 60 days (or such shorter date as the
Committee may specify) following the Award date by executing and delivering to
the Corporation a Restricted Stock Award Agreement in such form as the Committee
shall determine.

    

    
      
        
        

      

      
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    (c) Rights as a
Shareholder.  Upon complying with paragraph (b) above, a
Participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability and Corporation forfeiture rights described in this Section 8
and subject to any other conditions contained in the Award
agreement.  Unless the Committee shall otherwise determine,
certificates evidencing shares of Restricted Stock shall remain in the
possession of the Corporation until such shares are free of any restrictions
under the Plan.  The Committee in its discretion may, as a
precondition of the Corporation’s obligation to issue a Restricted Stock Award,
require the Participant to execute a stock power or powers or other agreement or
instruments necessary or advisable in connection with the Corporation’s
forfeiture rights with respect to such shares.

    

    (d) Restrictions.  Shares
of Restricted Stock may not be sold, assigned, transferred or otherwise disposed
of or pledged or otherwise encumbered.  In the event of termination of
employment of the Participant with the Corporation or a Subsidiary for any
reason, or cessation as a director of the Corporation in the case of a
Non-Employee Director Participant, such shares shall be forfeited to the
Corporation, except as set forth below:

     

            (i) The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to the attainment of performance goals and other conditions)
on which the nontransferability of the Restricted Stock and the Corporation’s
forfeiture rights with respect thereto shall lapse.  The Committee at
any time may accelerate such date or dates and otherwise waive or, subject to
Section 13, amend any conditions of the Award.

     

            (ii) Except as
may otherwise be provided in the Award agreement, in the event of termination of
a Participant with the Corporation or a Subsidiary for any reason or cessation
as a director of the Corporation for any reason, all of the Participant’s
Restricted Stock shall be forfeited to the Corporation without the necessity of
any further act by the Corporation, the Participant or the Participant’s legal
representative; provided, however, that in the event of termination of
employment by reason of death, Disability or Retirement or cessation of service
as a director of the Corporation by reason of death or Disability, all
conditions and restrictions relating to a Restricted Stock Award held by such a
Participant shall thereupon be waived and shall lapse.

     

            (iii) In the
absence of any other provision by the Committee, each Restricted Stock Award
granted to (A) an employee of the Corporation or a Subsidiary shall be subject
to forfeiture to the Corporation conditioned on the Participant’s continued
employment and (B) Non-Employee Director Participants shall be subject to
forfeiture to the Corporation conditioned on the Participant’s continued service
as a director of the Corporation, and in the case of clause (A) or (B), such
forfeiture rights shall lapse as follows:  with respect to twenty
percent (20%) of the shares subject to the Restricted Stock Award on the date
one year following the date of grant, and with respect to an additional twenty
percent (20%) of such shares after the expiration of each of the succeeding four
(4) years thereafter, on a cumulative basis, so that such Restricted Stock shall
be free of such risk of forfeiture on the date five (5) years following the date
of its grant.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    (e) Performance-Based
Award.  In the discretion of the Committee, the Corporation’s
forfeiture rights with respect to Restricted Stock award to a Covered Employee
may be based upon Qualified Performance Criteria and the Restricted Stock Award
may be designated as a Qualified Performance-Based Award.

    

    (f) Waiver, Deferral, and
Investment of Dividends.  The Restricted Stock Award agreement
may require or permit the immediate payment, waiver, deferral or investment of
dividends paid with respect to the Restricted Stock.

    

    9. Long-Term Performance
Awards.

    

    (a) Awards.  Long-Term
Performance Awards may be payable in cash, stock or a combination of cash and
stock may be granted either alone, in addition to or in tandem with other Awards
granted under the Plan and/or awards made outside of the
Plan.  Long-Term Performance Awards shall not require payment by the
recipient of any consideration for the Long-Term Performance Award or for shares
of Stock, if any, covered by such Award.  The Committee shall
determine the nature, length and starting date of any performance period (the
“Performance Period”) for each Long-Term Performance Award and shall determine
the performance and/or employment factors to be used in the determination of the
value of Long-Term Performance Awards and the extent to which such Long-Term
Performance Award may be made subject to various conditions, including vesting
or forfeiture provisions.  Long-Term Performance Awards may vary from
Participant to Participant and between groups of Participants and shall be based
upon the achievement of Corporation, Subsidiary and/or individual performance
factors or upon such other criteria as the Committee may deem
appropriate.  Performance Periods may overlap and Participants may
participate simultaneously with respect to Long-Term Performance Awards that are
subject to different Performance Periods and different performance factors and
criteria.  Long-Term Performance Awards shall be confirmed by, and be
subject to the terms of, a written Long-Term Performance Award
agreement.

    

    (b) Value of
Awards.  At the beginning of each Performance Period, the
Committee shall determine for each Long-Term Performance Award subject to such
Performance Period the range of dollar values and/or numbers or dollar values of
shares of Common Stock to be issued to the Participant at the end of the
Performance Period if and to the extent that the relevant measures of
performance for such Long-Term Performance Award are met.  Such dollar
values or numbers of shares of Common Stock may be fixed or may vary in
accordance with such performance or other criteria as may be determined by the
Committee.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    (c) Adjustment of
Awards.

     

            (i) Notwithstanding
the provisions of Section 9(a) hereof, the Committee may, after the grant of
Long-Term Performance Awards, adjust the performance factors applicable to such
Long-Term Performance Awards to take into account changes in the law or in
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to, among other things, reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships to Participants,
provided, however that the provisions of this Section 9(c) shall not apply to
Long-Term Performance Awards granted to Covered Employees or otherwise intended
to satisfy the requirements of Section 162(m) of the Code.

     

            (ii) Notwithstanding
the provisions of Section 9(a) hereof, with respect to any Long-Term Performance
Awards granted to Covered Employees or otherwise intended to satisfy the
requirements of Section 162(m) of the Code, the Committee retains the discretion
to eliminate or decrease the amount payable to a Participant with respect to any
such award.

    

    (d) Termination.

    

    
              (i) Unless otherwise
provided in the applicable Long-Term Performance Award agreement or other
applicable management agreement, if a Participant terminates his or her
employment or his or her consultancy during a Performance Period because of
death or Disability, then a prorata portion of such Long-Term Performance Award
shall be deemed fully vested and fully earned by such Participant (or his or her
estate), such portion to be determined by multiplying 100% of the target value
of such Award by a fraction the numerator of which is the number of days from
the beginning of the Performance Period to the date of such termination and the
denominator of which is the total number of days during the Performance Period.
Such earned portion shall be paid ninety (90) days following the date of such
termination.

    

    

    
              (ii) Unless otherwise
provided in the applicable Long-Term Performance Award agreement or other
applicable management agreement, if a Participant terminates his or her
employment or his or her consultancy during a Performance Period because of
Retirement, then such Participant shall continue to be entitled to a prorata
portion of any payment with respect to the Long-Term Performance Award subject
to such Performance Period in accordance with the payment terms set forth in
subsection (e) of this Section 9, determined by multiplying such payment,
calculated as if the Participant's employment or consultancy had not been
terminated, by a fraction the numerator of which is the number of days from the
beginning of the Performance Period to the date of such termination and the
denominator of which is the total number of days during the Performance
Period.

    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    
              (iii) Unless
otherwise provided in the applicable Long-Term Performance Award agreement or
other applicable management agreement, if a Participant terminates employment or
his or her consultancy during a Performance Period for any reason other than
death, Disability or Retirement, then such a Participant shall not be entitled
to any payment with respect to the Long-Term Performance Award subject to such
Performance Period, unless the Committee shall otherwise determine in its
discretion.

    

    

    (e) Form of Payment. The
earned portion of a Long-Term Performance Award shall be paid in cash between
the January 1 and September 30 of the calendar year following the close of the
applicable Performance Period, provided that the Committee may elect to pay up
to one-third (1/3) of such amount in whole shares of stock or, at the discretion
of the Committee, such earned portion may be paid in whole shares of Stock to
the extent requested by the Participant.  Any such shares of Stock
shall be valued at their Fair Market Value at the close of business on the most
recent trading day preceding the date of such payment.

    

    (f) Reservation of
Shares.  In the event that the Committee grants a Long-Term
Performance Award that is payable in cash or Stock, the Committee may (but need
not) reserve an appropriate number of shares of Stock under the Plan at the time
of grant of the Long-Term Performance Award.  If, and to the extent
that the full amount reserved is not actually paid in Stock, the shares of Stock
representing the portion of the reserve for that Long-Term Performance Award
shall again become available for award under the Plan.  If shares of
Stock are not reserved by the Committee at the time of grant, then (i) no shares
shall be deducted from the number of shares available for grant under the Plan
at that time and (ii) at the time of payment of the Long-Term Performance Award,
only the number of shares actually issued to the Participant shall be so
deducted.  If there are not a sufficient number of shares available
under the Plan for issuance to a Participant at the time of payment of a
Long-Term Performance Award, any shortfall shall be paid by the Corporation in
cash.

    

    

    10. The
Committee.

    

    (a) Administration.  The
Committee shall be a committee of not less than three (3) members of the Board
who are Non-Employee Directors, appointed by the Board.  Vacancies
occurring in membership of the Committee shall be filled by the
Board.  The Committee shall keep minutes of its
meetings.  One or more members of the Committee may participate in a
meeting of the Committee by means of conference telephone or similar
communications equipment provided all persons participating in the meeting can
hear one another.  A majority of the entire Committee shall constitute
a quorum, and the acts of a majority of the members present at or so
participating in any meeting at which a quorum is constituted shall be the acts
of the Committee.  The Committee may act without meeting by unanimous
written consent.  Absent some other provision by the Board, the power
and responsibilities of the Committee shall be vested in and assumed by the
Personnel and Compensation Committee of the Board, provided the members thereof
are all Non-Employee Directors.

    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    (b) Authority of
Committee.  Subject to the provisions of the Plan, the
Committee shall have full and final authority to determine the persons to whom
Awards shall be granted, the number of shares to be subject to each Award, the
term of the Award, the vesting provisions of the Award, if any, restrictions on
the Award, if any, and the price at which the shares subject thereto may be
purchased.  The Committee is empowered, in its discretion, to modify,
extend or renew any Award theretofore granted and adopt such rules and
regulations and take such other action as it shall deem necessary or proper for
the administration of the Plan.  The Committee must certify in writing
prior to the payment of any compensation to a Covered Employee from a Qualified
Performance-Based Award that Qualified Performance Criteria were met, all in the
manner provided by Federal Income Tax Regulations Section
1.162-27(e)(5).  The Committee shall have full power and authority to
construe, interpret and administer the Plan, and the decisions of the Committee
shall be final and binding upon all interested parties.  No members of
the Committee shall be liable for any action taken or not taken or decision made
or not made in good faith relating to the Plan or any award
thereunder.

    

    11. Adjustments.  Any
limitations, restrictions or other provisions of this Plan to the contrary
notwithstanding, each Award agreement shall make such provision, if any, as the
Committee may deem appropriate for the adjustment of the terms and provisions
thereof (including, without limitation, terms and provisions relating to the
exercise price and the number and class of shares subject to the Award) in the
event of any merger, consolidation, reorganization, recapitalization, stock
dividend, divisive reorganization, issuance of rights, combination or split-up
or exchange of shares, or the like.  In the event of any merger,
consolidation, reorganization, recapitalization, stock dividend, divisive
reorganization, issuance of rights, combination or split-up or exchange of
shares, or the like, the Committee shall make an appropriate adjustment in the
number of shares authorized to be issued pursuant to the Plan.

    

    12. Awards Under Predecessor
Plans.  Awards presently outstanding which have been granted
under any Predecessor Plan shall continue to be governed and interpreted under
the terms of such plans and not by the terms hereof.

    

    13. Amendment to and Termination
of the Plan.  The Board may from time to time amend the Plan in
such way as it shall deem advisable provided the Board may not extend the
expiration date of the Plan, change the class of Eligible Persons, increase the
maximum Award term, decrease the minimum exercise price or increase the total
number of authorized shares (except in accordance with Section 10 hereof) for
which Awards may be granted.  The Board, in its discretion, may at any
time terminate the Plan prior to its expiration in accordance with Section 4
hereof.  No amendment to or termination of the Plan shall in any way
adversely affect Awards then outstanding hereunder.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    14. Status of
Plan.  Until shares pursuant to an Award or exercise thereof
are actually delivered to a Participant, a Participant shall have no rights to
or with respect to such shares greater than those of a general creditor of the
Corporation unless the Committee shall otherwise expressly determine in
connection with any Award or Awards.

    

    15. General
Provisions.

     

           (a) Other Compensation
Arrangements; No Right to Receive Awards; No Employment or Other
Rights.  Nothing contained in this Plan shall prevent the Board
from adopting other or additional capital stock based compensation arrangements,
subject to stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases.  No Eligible Person shall have any right to receive Awards
except as the Committee may determine.  The Plan does not confer upon
any employee any right to continued employment with the Corporation or a
Subsidiary or upon any director or officer of the Corporation any right to
continued service as a director or officer of the Corporation, nor does it
interfere in any way with the right of the Corporation or a Subsidiary to
terminate the employment of any of its employees or for the Corporation to
remove a director or officer with or without cause at any time.

     

            (b) Tax Withholding,
Etc.  Any obligation of the Corporation to issue shares
pursuant to the grant or exercise of any Award shall be conditioned on the
Participant having paid or made provision for payment of all applicable tax
withholding obligations, if any, satisfactory to the Committee.  The
Corporation and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant.  In the case of Non-Statutory Options, Stock Appreciation
Rights exercisable only for Stock or the lapse of restrictions or conditions
pertaining to shares of Restricted Stock, the Committee in its discretion, but
only upon the written request of a Participant exercising such an Award or
holding such Restricted Stock, may permit such Participant to satisfy federal
income tax withholding requirements occasioned by the exercise of such an Award
or the lapse of such restrictions or conditions by the surrender of shares
otherwise to be received on the exercise of such Award or with respect to which
such restrictions or conditions have lapsed.  For purposes of this
subsection (b), such surrendered shares shall be valued at the closing price of
the Stock in the NASDAQ Global Market on the most recent trading day preceding
the date of exercise on which sales of the Stock occurred.

     

            (c)  Section 162(m)
Exemption.  When granting any Long-Term Performance Award,
Restricted Stock Award, or other Award, the Committee may designate such Award
as a Qualified Performance-Based Award, based upon a determination that the
recipient is or may be a Covered Employee with respect to such Award, and the
Committee wishes such Award to qualify for the Section 162(m)
Exemption.  The payment of an Award designated as a Qualified
Performance-Based Award to an employee for any calendar year shall not exceed
$3,000,000.  The maximum number of shares underlying Options and SARs
that may be awarded to a Covered Employee for any calendar year shall not exceed
500,000 shares and their exercise price shall be the fair market value of the
shares on the date of grant.  If an Award is so designated, the
Committee shall establish performance goals for such Award (other than Options
or SARs which meet the definition of a Qualified Performance-Based Award under
Section 2(dd)) within the time period prescribed by Section 162(m) of the Code
based on one or more of the following Qualified Performance Criteria: (1)
earnings per share, (2) EBITDA (earnings before interest, taxes, depreciation
and amortization), (3) EBIT (earnings before interest and taxes), (4) economic
profit, (5) cash flow, (6) sales growth, (7) net profit before tax (8) gross
profit, (9) operating income or profit, (10) return on equity, (11) return on
assets, (12) return on capital, (13) changes in working capital, or (14)
shareholder return.  Qualified Performance Criteria may be expressed
in terms of an objective formula or standard that relates to Corporation-wide
objectives or objectives that relate to the performance of a Subsidiary or a
division, region, department or function within the Corporation of a Subsidiary,
may be absolute in their terms or measured against or in relationship to other
companies comparably, similarly or otherwise situated or other external or
internal measures and may include or exclude extraordinary charges, losses from
discontinued operations, restatements and accounting changes and other unplanned
special charges such as restructuring expenses, acquisitions, acquisition
expenses (including without limitation expenses related to goodwill and other
intangible assets), stock offerings, stock repurchases and strategic loan loss
provisions. Qualified Performance Criteria may, but need not, be based upon a
change or an increase or positive result.

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

            (d)           Restrictions on Transfers of
Shares.  Although the Corporation presently intends to register
under applicable securities laws all shares acquired or received by Participants
under the Plan, the Corporation is not required to cause such shares to be
registered under the Securities Act of 1933 or the securities laws of any
State.  Accordingly, the shares acquired or received may be
“restricted securities” as defined in Rule 144 under said Securities Act of 1933
or other rule or regulation of the Securities and Exchange
Commission.  Any certificate evidencing any such shares may bear a
legend restricting the transfer of such shares, and the recipient may be
required to assert that the shares are being acquired for his or her own account
and not with a view to the distribution thereof as a condition to the granting
or exercise of an Award.

     

            (e)           Issuance of
Shares.  Any obligation of the Corporation to issue shares
pursuant to the grant or exercise of any Award shall be conditioned on the
Corporation’s ability at nominal expense to issue such shares in compliance with
all applicable statutes, rules or regulations of any governmental
authority.  The Participant shall provide the Corporation with any
assurances or agreements which the Committee, in its sole discretion, shall deem
necessary or advisable in order that the issuance of such shares shall comply
with any such statutes, rules or regulations.

     

            (f)           Date of
Grant.  The date on which each Award under the Plan shall be
considered as having been granted shall be the date on which the award is
authorized by the Committee, unless a later date is specified by the Committee;
provided, however, in the case of options intended to qualify as Incentive Stock
Options, the date of grant shall be determined in accordance with the
Code.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

           

            (g)           Shareholder
Approval.  The material terms of any Qualified
Performance-Based Award that have not been approved by the Shareholders must be
disclosed to and approved by the Shareholders before compensation is paid to a
Covered Employee pursuant to such Award, and such compensation shall be paid to
a Covered Employee only if such material terms are approved by the Shareholders,
all in accordance with Federal Income Tax Regulations Section
1.162-27(e)(4).

     

            (h)           Change in
Control.

    

        (i)           Subject
to the payment terms set forth in Section 15(i) below and further subject to the
terms of any individual employment or other similar agreement, upon the
occurrence of a Change in Control (as defined below) all Long-Term Performance
Awards shall be deemed fully vested and fully earned to the extent of 100% of
the target value of each such Award, and shall be paid in accordance with the
terms of subsection (i) of Section 15 of this Plan; and

    

        (ii)           
If the Participant’s employment is terminated during the thirty-six (36) month
period following a Change in Control, other than (A) by the Corporation or a
Subsidiary for Cause (as defined below), (B) by reason of death or Disability,
or (C) by the Participant without Good Reason (as defined below), then, and only
then,

    

    
                  (A) 
the
vesting periods of any and all Incentive Stock Options, Non-Statutory Options
and Stock Appreciation Rights granted and outstanding under the Plan shall
immediately be accelerated;

    

    

    
                  (B) 
the
restrictions and/or conditions applicable to any and all Restricted Stock Awards
granted and outstanding under the Plan shall immediately lapse and be of no
further force and effect;

    

     

    such that
each Participant holding any such Award shall have the immediate, fully vested,
right to purchase, receive and/or own without risk of forfeiture any Stock that
is the subject of the Award on the terms and conditions set forth in this Plan
and the particular agreement respecting such Award.

    

    (iii)           As
used herein, the term “Change in Control” means any of the following events,
provided that such event is not also a Management Buyout (as defined
below):

    

    (A)  any Person (as defined
below) is or becomes the Beneficial Owner (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Corporation representing 35%
or more of the combined voting power of the Corporation’s then outstanding
voting securities generally entitled to vote in the election of directors of the
Corporation, provided, however, that no Change in Control will be deemed to have
occurred as a result of a change in ownership percentage resulting solely from
an acquisition of securities by the Corporation or a transaction described in
clause (i) of paragraph (C) below;

    

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

        (B)  during
any period of two consecutive years, individuals who, as of the beginning of
such period constitute the Board (the “Incumbent Board”) cease to constitute at
least a majority of the Board; provided, that any person becoming a director of
the Corporation subsequent to the beginning of such period whose election, or
nomination for election by the Corporation’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is a result of an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election of
directors of the Corporation and whose appointment or election was not approved
by at least a majority of the directors of the Corporation in office immediately
before any such contest;

    

    (C)  there is consummated a
Merger of the Corporation with any other business entity, other than (i) a
Merger which would result in the securities of the Corporation generally
entitled to vote in the election of directors of the Corporation outstanding
immediately prior to such Merger continuing to represent (either by remaining
outstanding or by being converted into such securities of the surviving entity
or any parent thereof), in combination with the ownership of any trustee or
other fiduciary holding such securities under an employee benefit plan of the
Corporation or any Subsidiary at least 50% of the combined voting power of the
voting securities of the Corporation or such surviving entity or any parent
thereof outstanding immediately after such Merger, generally entitled to vote in
the election of directors of the Corporation or such surviving entity or any
parent thereof and, in the case of such surviving entity or any parent thereof,
of a class registered under Section 12 of the Act, or (ii) a Merger effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Corporation representing 35% or more of the combined voting
power of the Corporation’s then outstanding voting securities of the Corporation
generally entitled to vote in the election of directors of the Corporation;
or

    

    
                (D) (1) the stockholders of the
Corporation approve a plan of complete liquidation or dissolution of the
Corporation or there is consummated the sale or disposition by the Corporation
of all or substantially all of the Corporation’s assets, other than a sale or
disposition by the Corporation of all or substantially all of the Corporation’s
assets to an entity where the outstanding securities generally entitled to vote
in the election of directors of the Corporation immediately prior to the
transaction continue to represent (either by remaining outstanding or by being
converted into such securities of the surviving entity or any parent thereof)
50% or more of the combined voting power of the outstanding voting securities of
such entity generally entitled to vote in such entity’s election of directors
immediately after such sale and of a class registered under Section 12 of the
Act.

    

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    

    (iv)           As
used herein, the term “Person” shall have the meaning given in Section 3(a)(9)
of the Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (A) the Corporation or any of its direct or
indirect Subsidiaries, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, and (D) a
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions and with substantially the
same voting rights as their ownership and voting rights with respect to the
Corporation.

    

    (v)           As
used herein, the term “Management Buyout” means any event or transaction which
would otherwise constitute a Change in Control (a “Transaction”) if, in
connection with the Transaction, the Participant, members of the Participant’s
immediate family, and/or the “Participant’s Affiliates” (as defined below)
participate, directly or beneficially, as an equity investor in, or have the
option or right to acquire, whether or not vested, equity interests of, the
acquiring entity or any of its Affiliates (as defined in Rule 12b-2 under the
Act) (the “Acquiror”) having a percentage interest therein greater than 1%. For
purposes of the preceding sentence, a party shall not be deemed to have
participated as an equity investor in the Acquiror by virtue of (i) obtaining
beneficial ownership of any equity interest in the Acquiror as a result of the
grant to the party of an incentive compensation award under one or more
incentive plans of the Acquiror (including, but not limited to, the conversion
in connection with the Transaction of incentive compensation awards of the
Corporation into incentive compensation awards of the Acquiror), on terms and
conditions substantially equivalent to those applicable to other employees of
the Corporation at a comparable level as such party immediately prior to the
Transaction, after taking into account normal differences attributable to job
responsibilities, title and the like, or (ii) obtaining beneficial ownership of
any equity interest in the Acquiror on terms and conditions substantially
equivalent to those obtained in the Transaction by all other shareholders of the
Corporation or (iii) the party’s interests in any tax-qualified defined benefit
or defined contribution pension or retirement plan in which such party or any
family member is a participant or beneficiary. The “Participant’s Affiliates” at
any time consist of any entity in which the Participant and/or members of the
Participant’s immediate family then own, directly or beneficially, or have the
option or right to acquire, whether or not vested, greater than 10% of such
entity’s equity interests, and all then current directors and executive officers
of the Corporation who are members of any group, that also includes the
Participant, a member of the Participant’s immediate family and/or any such
entity, in which the members have agreed to act together for the purpose of
participating in the Transaction. The Participant’s immediate family consists of
the Participant’s spouse, parents, children and grandchildren.

     

    (vi)           As
used herein, the term “Cause” means (A) the willful refusal by the Participant
to perform proper responsibilities of the Participant’s position with the
Corporation or a Subsidiary, (B) a violation of law by the Participant which
adversely affects the assets, financial position or reputation of the
Corporation or a Subsidiary, or (C) a violation by the Participant of any code
of ethics, code of conduct or similar policy maintained by the Corporation or a
Subsidiary from time to time.

    

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

            (vii)           As
used herein, the term “Good Reason” means a substantial diminution in the nature
or status of the Participant’s responsibilities from those in effect immediately
prior to the Change in Control.

    
 

    (i)           Payment Following a Change
in Control.

    

    (i)  Any payment of a Long
Term Performance Award required under paragraph (i) of subsection (h) of this
Section shall be made at the time when the Award would otherwise have been
payable by its terms, provided, however, that if the Participant experiences a
separation from service, as that term is defined under Section 409A, during the
twenty-four (24) month period following a Change in Control, other than by
reason of death or Disability, the Participant shall be paid in accordance with
subsection (i)(ii) of this Section.  Solely for purposes of this
Section 15(i), a Change in Control shall not include any transaction that would
not be considered a change in the ownership or effective control of the
Corporation, or in the ownership of a substantial portion of the assets of the
Corporation, for purposes of Section 409A.

    

    (ii)           Any
payment required to be made under subsection (i)(i) of this Section on account
of the Participant’s separation from service shall be made on the date of
separation from service referred to in subsection (i) of this Section, unless
the Participant is a specified employee, as determined by the Corporation in
accordance with Section 409A, at the time of separation from service, in which
case payment will be made on the date that is six months and a day following
separation from service.

    

    (j)         Prohibition on
Assignment.The rights of Participants under this Plan are not subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of any
Participant.  No Participant shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber any of the benefits payable hereunder nor shall any of said
benefits be subject to seizure for the payment of any debts, judgments, alimony
or separate maintenance of any Participant, nor be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise.  In the event
that any Participant attempts assignment, commutation, hypothecation, transfer
or disposal of the benefits hereunder, such attempt shall be ineffective and
shall not be given effect.

    

    (k)           Intent and Interpretation.  The
Corporation intends Statutory Options, Non-Statutory Options and Stock
Appreciation Rights issued under this Plan to be exempt from Section
409A.  The Corporation intends Long Term Performance Awards issued
under this Plan to comply with Section 409A.  The Plan shall be
interpreted and administered in accordance with the foregoing statements of
intent.

    

    
      
        
           

           

        

         

      

      
        -22-

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