Document:

Exhibit 10.1

 

	
  

  	
  FIELDSTONE
  INVESTMENT CORPORATION

  
	
   

  	
  11000 BROKEN LAND PARKWAY, SUITE 600

  
	
   

  	
  COLUMBIA, MARYLAND 21044

  
	
  February
  14, 2006

  	
  TELEPHONE (410) 772 7211 FACSIMILE (443) 367 2060

  

 

Mr. Nayan V. Kisnadwala

401 Red Clay Drive

Kennett Square, Pennsylvania 19348

 

Re:                     Proposed
Employment Terms

 

Dear Nayan:

 

This letter sets forth the proposed terms of your employment by
Fieldstone Investment Corporation (“Fieldstone”). As we have discussed, we are
excited about the prospect of working together with you to continue to build
Fieldstone’s residential mortgage business and investment portfolio. You will
be a key member of our senior management team, and we look forward to working
with you to build the long term value of Fieldstone.

 

1.                                      scope
of responsibility:

 

a)                                      you
will be the Chief Financial Officer for Fieldstone and will be responsible for:

 

i)                                         balance
sheet, liquidity and cash management

 

ii)                                      all
financial reporting, planning and budgeting for Fieldstone and its affiliates

 

iii)                                   SEC,
Tax, REIT and regulatory accounting and reporting

 

iv)                                  Corporate
capital markets transactions, including analysis and execution

 

v)                                     Operations
and financial reporting controls, including compliance with the requirements of
the Sarbanes-Oxley Act

 

vi)                                  Investor
Relations, and preparation of materials and presentations to investors,
underwriters and rating agencies

 

vii)                               Other
management responsibilities, including participation in senior management
committees regarding capital markets, credit and resource allocations

 

b)                                     your
title will be Executive Vice President, Chief Financial Officer

 

c)                                      you
will report to the President of Fieldstone

 

2.                                      compensation:
you will receive:

 

a)                                      a
base salary of $32,916.68 per month, payable semi-monthly

 

b)                                     you
will be eligible to earn current-year annual incentive compensation upon
achieving incentive goals agreed in writing with the President of Fieldstone
and approved by the Compensation Committee of the Board of Directors of
Fieldstone, payable within 90 days following the end of the year; for 2006, the
targeted incentive compensation available to you will be:

 

i)                                         up
to 100% of your base salary, based on the achievement of a combination of Net
Income targets for Fieldstone and Critical Objectives for you and your staff, and

 

ii)                                      up
to an additional 75% of your base salary if Fieldstone exceeds its targeted Net
Income and achieves the maximum Net Income targets established by the Board of
Directors, in its discretion

 

iii)                                   for
2006 only, you will receive a bonus of at least $355,500 under Fieldstone’s
Executive Incentive Compensation plan, regardless of Fieldstone’s results,
provided you remain an officer of Fieldstone in good standing through March 31,
2007 and you achieve a rating of at least 

 

 

“meets expectations” on your personal
Critical Objectives for 2006 under that plan

 

c)                                      you
will receive the following award of restricted shares within ten days of the
commencement of your employment with Fieldstone, subject to the terms of the
Fieldstone Investment Corporation Equity Incentive Plan:

 

	
   

  	
   

  	
  shares

  	
   

  	
  price

  	
   

  	
  vest

  	
   

  	
  vest%

  	
   

  
	
  i)              Restricted Shares

  	
   

  	
  45,000

  	
   

  	
  $

  	
  0

  	
   

  	
  4 yrs

  	
   

  	
  25%/yr

  	
   

  
											

 

d)                                     you
will receive within ten days of the commencement of your employment with
Fieldstone the following grants as your 2006 awards of long term equity based
compensation, subject to the terms of the Fieldstone Investment Corporation
Equity Incentive Plan (future annual awards will be determined in the
discretion of the Compensation Committee of the Board of Directors):

 

	
   

  	
   

  	
  shares

  	
   

  	
  price

  	
   

  	
  vest

  	
   

  	
  vest%

  	
   

  
	
  ii)             Options w/ DERs

  	
   

  	
  15,000

  	
   

  	
  mkt price*

  	
   

  	
  4 yrs

  	
   

  	
  100% @ yr 4

  	
   

  
	
  iii)            Performance Shares

  	
   

  	
  7,500

  	
   

  	
  $

  	
  0

  	
   

  	
  2 yr +

  	
   

  	
  perf. period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2 yr

  	
   

  	
  vest period

  	
   

  
											

 

*                 the
market price will be the end of day closing price on the day your employment
with Fieldstone commences

 

e)                                      you
will be eligible to participate in the future in Fieldstone’s long-term
incentive plans for senior managers, on terms as may be approved by the Board
of Directors of Fieldstone in its discretion

 

f)                                        the
Fieldstone Investment Corporation Equity Incentive Plan includes terms that
provide that the restricted shares, earned performance shares and options will
vest upon the consummation of change of control events, as defined in the Plan

 

3.                                      additional
reimbursement:

 

a)                                      Fieldstone
will reimburse you for reasonable and customary business expenses incurred by
you during the course of business

 

b)                                     you
will receive $150 per month toward your cellular telephone expenses

 

c)                                      if
you move to Maryland prior to September 30, 2006 while you remain an employee
of Fieldstone, you will be reimbursed for your reasonable out of pocket relocation
expenses, up to a total of $75,000, based on your actual expenditures,
including amounts relative to sales commissions, recording and title insurance
fees on your new house, temporary housing and moving expenses in connection
with your relocation to Maryland

 

4.                                      benefits:
subject to the terms outlined in Fieldstone’s Employee Handbook, Fieldstone
currently offers the following package of benefits:

 

a)                                      standard
health and dental plans

 

b)                                     life
and disability insurance, subject to qualification

 

c)                                      defined
contribution or savings plan, as possible under the tax rules, after your third
month of employment, including a 401(k) plan; currently, Fieldstone matches
100% of the contributions made by employees to the 401(k) plan, up to 6% of
their respective annual compensation or up to such other amount allowed under
the applicable laws and regulations

 

d)                                     four
weeks’ paid vacation each calendar year, pro rated for partial years

 

e)                                      if
your position with Fieldstone is terminated by Fieldstone other than for cause prior
to December 31, 2006, you will receive a severance payment equal to your

 

2

 

annual base
salary, payable within 30 days following the termination of your employment

 

f)                                        if
your employment with Fieldstone is terminated other than for cause in
connection with a change of control of Fieldstone following December 31, 2006, and
within one year following the change of control, you will receive as extended
severance compensation two years’ severance, paid at your annual base salary,
paid in a single lump sum payment, subject to any delay in payment required by
section 409A of the Internal Revenue Code

 

5.                                      additional
terms:

 

a)                                      you
will begin work for Fieldstone on or before February 16, 2006

 

b)                                     you
will work in Fieldstone’s office in Columbia, Maryland

 

c)                                      you
will devote your full time efforts to making Fieldstone successful, and you
will avoid any action or behavior that is detrimental to Fieldstone

 

d)                                     you
will hold all information and materials relating to the business plans,
customers and financial results of Fieldstone, its customers or affiliates of
any of them in strictest confidence

 

e)                                      your
continued employment and your compensation are subject to verification of the
information provided by you to Fieldstone on your employment application

 

f)                                        you
will be subject to the terms of employment outlined in Fieldstone’s Employee
Handbook, as that may be amended from time to time, including the provision
that you will be an “at will” employee of Fieldstone (as are all other
employees) and this letter shall in no way be deemed to constitute an
employment contract

 

g)                                     you
agree not to solicit or aid in the solicitation of Fieldstone’s employees for a
period of two years following the date of any termination of your employment
with Fieldstone

 

h)                                     the
terms of this letter are revoked automatically if you do not return an executed
copy of this letter to me on or before February
16, 2006

 

If you have any questions regarding the above please call me at (410)
772 7211 or, if you would like a further explanation of the benefits, please
contact Jeanie Arnold at (410) 772 3188.

 

I trust the foregoing represents your understanding of the terms that
we have discussed. I am excited about our opportunity and the prospect of
working with you. I look forward to talking with you soon and to working
together in the future.

 

	
  Sincerely,

  	
  ACKNOWLEDGED AND AGREED:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Michael J. Sonnenfeld

  	
   

  	
  /s/ Mr. Nayan V. Kisnadwala

  	
   

  
	
  Michael J. Sonnenfeld

  	
  Mr. Nayan V. Kisnadwala

  
	
   

  	
   

  
	
  President

  	
   

  
	
   

  	
  2/14/06

  	
   

  
	
  cc:

  	
  Jonathan E. Michael

  	
  Date

  
	
  Jeffrey R. Springer

  	
   

  
					

 

3Exhibit 4.2

 

IMMUCOR, INC.

2005 LONG TERM INCENTIVE PLAN

 

ARTICLE I

 

ESTABLISHMENT, PURPOSE
AND TERM 

 

1.1                                                         Establishment. The Immucor, Inc. 2005 Long Term
Incentive Plan (“Plan”) is hereby established by Immucor, Inc. (“Company”),
effective as of the Effective Date. Subject to Section 13.1, Awards may be
granted as provided herein for the term of the Plan.

 

1.2                                                         Purposes. The purposes of the Plan are to foster and promote
the long-term financial success of the Company and materially increase
shareholder value by motivating performance through incentive compensation. The
Plan also is intended to encourage Participant ownership in the Company,
attract and retain talent, and enable Participants to participate in the
long-term growth and financial success of the Company.  In addition, the Plan provides the ability to
make Awards linked to the profitability of the Company’s businesses and
increases in shareholder value.

 

1.3                                 Term. The term of the Plan shall extend from the Effective
Date until the tenth anniversary thereof. 
No additional Awards shall be made after the expiration of such term,
but outstanding awards shall be administered in accordance with the provisions
thereof.  The Plan shall continue in
effect until all matters relating to the settlement of Awards and
administration of the Plan have been completed.

 

ARTICLE II

 

DEFINITIONS 

 

For purposes of the Plan,
the following terms are defined as set forth below:

 

2.1                                 “Affiliate” means any individual,
corporation, partnership, association, limited liability company, joint-stock
company, trust, unincorporated association or other entity (other than the
Company) that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under 
control with, the Company.

 

2.2                                 “Agreement” means any agreement
entered into pursuant to the Plan by which an Award is granted to a
Participant.

 

2.3                                 “Award” means any Stock Option,
Stock Appreciation Right, Restricted Stock, Deferred Stock or Performance Award
granted to a Participant under the Plan. Awards shall be subject to the terms
and conditions of the Plan and shall be evidenced by an Agreement containing
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall deem desirable.

 

2.4                                 “Beneficiary” means any person or
other entity, which has been designated by a Participant in his or her most
recent written beneficiary designation filed with the Committee to receive the
compensation, specified under the Plan to the extent permitted. If there is no
designated beneficiary, then the term means any person or other entity entitled
by will or the laws of descent and distribution to receive such compensation.

 

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

 

2.6                                 “Cause” means, for purposes of
determining whether and when a Participant has incurred a Termination of
Employment for Cause, any act or omission which permits the Company to
terminate the written agreement or arrangement between the Participant and the
Company or an Affiliate for “cause” as defined in such agreement or
arrangement, or in the event there is no such agreement or arrangement or the
agreement or arrangement does not define the term “Cause,” then “Cause” means:
(1) the conviction of a Participant for

 

 

committing a felony under federal law or the law of
the state in which such action occurred; (2) dishonesty in the course of
fulfilling the Participant’s employment duties; (3) willful and deliberate
failure on the part of the Participant to perform his or her employment duties
in any material respect; or (4) such other meaning as may be specified with
respect to any particular Award or in any employment or other agreement entered
into at or before the time the Award is granted (or, with the consent of the
Participant, after such time). 
Notwithstanding the foregoing, a Participant may not be terminated for
Cause unless and until there shall have been delivered to the Participant a
copy of a notice specifying the nature of the grounds for such termination. The
notice also shall afford the Participant with the opportunity, together with
the Participant’s counsel, to be heard regarding the existence of Cause. The
Participant shall have thirty (30) days to correct the acts or omissions
complained of, if correctable.

 

2.7                                 “Change in Control” means:

 

(1)                                the acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of
either (a) the then-outstanding shares of Stock (the “Outstanding Company
Shares”) or (b) the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”) of the Company (the “Outstanding Company Voting
Securities”); provided that, for purposes of this definition, the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company; (ii) any acquisition by the Company; and (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its affiliates;

 

(2)                                individuals who, as of the day after the
Effective Date, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’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 occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;

 

(3)                                consummation of a merger or consolidation
involving the Company or a sale or other disposition of all or substantially
all of the assets of the Company (each, a “Business Combination”), in
each case unless, following such Business Combination, all or substantially all
of the individuals and entities that were the beneficial owners of the
Outstanding Company Shares immediately prior to such Business Combination
beneficially own, directly or indirectly, either (a) more than fifty percent
(50%) of the Outstanding Company Voting Securities immediately following the
consummation of the Business Combination or (b) in the event the Business
Combination results in another corporation (“New Parent Corporation”)
owning the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries, more than fifty percent (50%) of
the Outstanding Voting Securities of the New Parent Corporation; or

 

(4)                                approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company.

 

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

 

2.9                                 “Commission” means the Securities
and Exchange Commission or any successor thereto.

 

2.10                           “Committee” means the committee of
the Board responsible for granting and administering Awards under the Plan,
which initially shall be the Committee of the Board, until such time as the
Board may designate another committee. The Committee shall consist solely of
two or more directors and each member of the Committee shall be a “non-employee
director” within the meaning of Rule 16b-3 and also an “outside director”

 

2

 

under Section 162(m) of the Code. In addition, each
member of the Compensation Committee shall satisfy any independence or other
corporate governance standards imposed by The Nasdaq National Market or other
securities market on which the Stock shall be listed from time to time.

 

2.11                           “Company” means Immucor, Inc., a
Georgia corporation, and includes any successor or assignee corporation or
corporations into which the Company may be merged, changed or consolidated; any
corporation for whose securities the securities of the Company shall be
exchanged; and any assignee of or successor to substantially all of the assets
of the Company. Wherever the context of the Plan so admits or requires,
“Company” also means “Affiliate.”

 

2.12                           “Covered Employee” means a
Participant who is a “covered employee” within the meaning of Section 162(m) of
the Code.

 

2.13                           “Deferred Stock” means a right
granted to a Participant under Section 9.1 hereof to receive Stock at the end
of a specified deferral period.

 

2.14                           “Disability” means:

 

(1)                                with respect to Incentive Stock Options,
as that term is defined in Code Section 22(e)(3);

 

(2)                                with respect to an Award that is not
subject to Code Section 409A (other than an Incentive Stock Option), a physical
or mental condition that, for more than six consecutive months, renders a
Participant incapable, with reasonable accommodation, of performing his or her
assigned duties on a full-time basis; or

 

(3)                                with respect to any Award (that is not an
Incentive Stock Option) that is subject to Code Section 409A, as that term is
defined under Code Section 409A.

 

The determination of Disability for purposes of this
Plan shall not be construed to be an admission of disability for any other
purpose.

 

2.15                           “Effective Date” means the date
that the Plan is approved by the Company’s shareholders.

 

2.16                           “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

2.17                           “Exercise Price” means the price
that a Participant must pay to exercise an Award or the amount upon which the
value of an Award is based.

 

2.18                           “Fair Market Value” means, as of
any given date, the closing market price on The Nasdaq National Market or such
other public trading market on which the stock is traded on that date.  If there is no regular public trading market
for such Stock, the Fair Market Value of the Stock shall be determined by the
Committee in good faith.  In each Fair
Market Value shall be determined without regard to whether the Stock is
restricted or represents a minority interest.

 

2.19                           “Grant Date” means the date as of
which an Award is granted pursuant to the Plan. In no event may the Grant Date
be earlier than the Effective Date.

 

2.20                           “Incentive Stock Option” means any
Option that is intended to be, is designated as, and actually qualifies as, an
“incentive stock option” within the meaning of Section 422 of the Code.

 

2.21                           “Non-Qualified Stock Option” means
a Stock Option that is not an Incentive Stock Option.

 

2.22                           “Option Period” means the period
during which the Option shall be exercisable in accordance with an Agreement and
Article VI.

 

3

 

2.23                           “Participant” means a person who
satisfies the eligibility conditions of Article V and to whom an Award has been
granted by the Committee under the Plan. 
In the event that a Representative is appointed for a Participant, then
the term “Participant” shall mean such appointed Representative.
Notwithstanding the appointment of a Representative, the term “Termination of
Employment” shall mean the Termination of Employment of the Participant.

 

2.24                           “Performance Award” means an Award
consisting of Performance Shares, Performance Units or other Award described in
Article X that is dependent upon the achievement of Performance Goals.

 

2.25                           “Performance Goals” mean the level
of performance established by the Committee as the Performance Goal with
respect to a Performance Measure. 
Performance Goals may vary from Performance Period to Performance Period
and from Participant to Participant and may be established on a stand-alone
basis, in tandem or in the alternative.

 

2.26                           “Performance Measure” means any of
the performance criteria set out in this Section, either alone or in any
combination, and, if not based on individual performance, on either a
consolidated or a division or business unit level, as the Committee may
determine: individual Participant financial or non-financial performance goals;
sales; cash flow; cash flow from operations; operating profit or income; net
income; operating margin; net income margin; return on net assets; economic value
added; return on total assets; return on 
equity; return on total capital; total shareholder return; revenue;
revenue growth; earnings before interest, taxes, depreciation and amortization
(“EBITDA”); EBITDA growth; basic earnings per share; diluted earnings
per share; funds from operations per share and per share growth; cash available
for distribution; cash available for distribution per share and per share
growth; share price performance on an absolute basis and relative to an index
of earnings per share or improvements in the Company’s attainment of expense
levels; or implementing or completion of critical projects. The foregoing
criteria shall have any reasonable definitions that the Committee may specify,
which may include or exclude any or all of the following items as the Committee
may specify: extraordinary, unusual or non-recurring items; effects of
accounting changes; effects of financing activities; expenses for restructuring
or productivity initiatives; other non-operating items; spending for
acquisitions; effects of divestitures; and effects of litigation activities and
settlements. Any such performance criterion or combination of such criteria may
apply to the Participant’s Award opportunity in its entirety or to any
designated portion or portions of the Award opportunity, as the Committee may
specify. Unless the Committee determines otherwise for any Performance Period,
extraordinary items, such as capital gains and losses, which affect any
performance criterion applicable to the Award (including but not limited to the
criterion of net income) shall be excluded or included in determining the
extent to which the corresponding performance goal has been achieved, whichever
will produce the higher Award. In the event Code Section 162(m) or applicable
tax or other laws change to permit the Committee discretion to alter the
governing performance measures without obtaining shareholder approval of such
changes, the Committee shall have sole discretion to make such changes without
obtaining shareholder approval. 
Performance Measures may vary from Performance Period to Performance
Period and from Participant to Participant.

 

2.27                           “Performance Period” means the
time period during which a Performance Award shall be earned shall be the
“Performance Period,” and shall be at least one (1) fiscal year in length,
unless otherwise determined by the Committee. Performance Awards shall be
subject to Performance Goals which shall be established by the Committee.

 

2.28                           “Performance Unit” means a right
granted to the terms and conditions established by the Committee which is
described in Section 10.1.

 

2.29                           “Performance Share” means a right
granted to the terms and conditions established by the Committee which is
described in Section 9.1.

 

2.30                           “Plan” means the Immucor, Inc.
2005 Long Term Incentive Plan, as herein set forth and as may be amended from
time to time.

 

2.31                           “Qualified Domestic Relations Order”
has the meaning set forth in the Code or in the Employee Retirement Income
Security Act of 1974, or the rules and regulations promulgated under the Code
or such Act.

 

4

 

2.32                           “Representative” means (a) the
person or entity acting as the executor or administrator of a Participant’s
estate pursuant to the last will and testament of a Participant or pursuant to
the laws of the jurisdiction in which the Participant had the Participant’s
primary residence at the date of the Participant’s death; (b) the person or
entity acting as the guardian or temporary guardian of a Participant; (c) the
person or entity which is the Beneficiary of the Participant upon or following
the Participant’s death; or (d) any other person, if any, acting in the place
or stead of a Participant to whom an Award has been permissibly transferred
under Section 13.9; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable law and
recognized by the Committee.

 

2.33                           “Restricted Stock” means Stock
granted to a Participant under Section 8.1 hereof and which is subject to
certain restrictions and to a risk of forfeiture or repurchase by the Company.

 

2.34                           “Retirement” means retirement by
an employee of the Company or an Affiliate from active employment under an
employment agreement with any of Company or any of its Affiliates, or
termination of employment at or after age 65 under circumstances which the
Committee, in its sole discretion, deems equivalent to retirement.

 

2.35                           “Rule 16b-3” means Rule 16b-3, as
from time to time in effect and applicable to the Plan and Participants,
promulgated by the Commission under Section 16 of the Exchange Act.

 

2.36                           “Stock” means the Company’s common
stock, $0.10 par value, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described hereinafter.

 

2.37                           “Stock Appreciation Right” means a
right granted under Section 7.1.

 

2.38                           “Stock Option” or “Option”
means a right, granted to a Participant under Section 6.1 hereof, to purchase
Stock at a specified price during specified time periods.

 

2.39                           “Termination of Employment” means
the occurrence of any act or event whether pursuant to an employment agreement
or otherwise that actually or effectively causes or results in the person’s
ceasing, for whatever reason, to be an officer or employee of the Company or of
any Affiliate, including, without limitation, death, Disability, dismissal,
severance at the election of the Participant, Retirement, or severance as a
result of the discontinuance, liquidation, sale or transfer by the Company or
its Affiliates of a business owned or operated by the Company or its
Affiliates. With respect to any non-employee member of the Board, Termination
of Employment means the termination of a Participant’s status as a non-employee
director of the Board.  With respect to
any other person who is not an employee with respect to the Company or an
Affiliate, the Agreement shall establish what act or event shall constitute a
Termination of Employment for purposes of the Plan. A Termination of Employment
shall occur with respect to an employee who is employed by an Affiliate if the
Affiliate shall cease to be an Affiliate and the Participant shall not
immediately thereafter become an employee of the Company or an Affiliate.

 

In addition, certain
other terms used herein have definitions given to them in the first place in
which they are used.

 

ARTICLE III

 

ADMINISTRATION 

 

3.1                                 Committee Structure. The Plan shall be administered by the
Committee. A majority of the Committee shall constitute a quorum at any meeting
thereof (including telephone conference) and the acts of a majority of the
members present, or acts approved in writing by the entire Committee without a
meeting, shall be the acts of the Committee for purposes of this Plan. Any
member of the Committee may resign upon notice to the Board. The Board shall
have the authority to remove, replace or fill any vacancy of any member of the
Committee upon notice to the Committee and the affected member.

 

5

 

3.2                                 Committee Actions. The Committee may authorize any one or
more of its members or an officer of the Company to execute and deliver
documents on behalf of the Committee. The Committee may allocate among one or
more of its members, or may delegate to one or more of its agents, such duties
and responsibilities as it determines, provided that the Committee shall not
delegate the authority to grant Awards. A member of the Committee shall be
recused from Committee action regarding an Award granted or to be granted to
such member.

 

3.3                                 Committee Authority. Subject to applicable law, the
Company’s certificate of incorporation and by-laws or the terms of the Plan,
the Committee shall have the authority:

 

(1)                                to select those persons to whom Awards
may be granted from time to time;

 

(2)                                to determine whether and to what extent
Awards are to be granted hereunder;

 

(3)                                to determine the number of shares of
Stock to be covered by each Award granted hereunder;

 

(4)                                to determine the terms and conditions of
any Award granted hereunder (including any provisions deemed necessary or
appropriate for a “nonqualified deferred compensation plan,” as defined in Code
Section 409A(d)(1), to avoid being subject to taxation under Code Section
409A(a)(1)), provided that the Exercise Price of any Option or Stock
Appreciation Right shall not be less than the Fair Market Value per share as of
the Grant Date;

 

(5)                                to adjust the terms and conditions, at
any time or from time to time, of any Award, subject to the limitations
contained elsewhere herein, including but not limited to Sections 13.1 and
13.11;

 

(6)                                to determine to what extent and under
what circumstances Stock and other amounts payable with respect to an Award
shall be deferred, subject to compliance with the requirements of the Plan and
Code Section 409A to avoid the Award being subject to taxation under Code
section 409A(a)(1);

 

(7)                                to provide for the forms of Agreement to
be utilized in connection with this Plan;

 

(8)                                to determine what legal requirements are
applicable to the Plan, Awards, and the issuance of Stock, and to require of a
Participant that appropriate action be taken with respect to such requirements;

 

(9)                                to cancel, with the consent of the
Participant or as otherwise provided in the Plan or an Agreement, outstanding
Awards;

 

(10)                          to require as a condition of the exercise
of an Award or the issuance or transfer of a certificate (or other
representation of title) of Stock, the withholding from a Participant of the
amount of any taxes as may be necessary in order for the Company or any other
employer to obtain a deduction or as may be otherwise required by law;

 

(11)                          to determine whether and with what effect
an individual has incurred a Termination of Employment;

 

(12)                          to determine the restrictions or
limitations on the transfer of Stock;

 

(13)                          to determine whether an Award is to be
adjusted, modified or purchased, or is to become fully or partially
exercisable, under the Plan or the terms of an Agreement;

 

(14)                          to determine the permissible methods of
Award exercise and payment within the terms and conditions of the Plan and the
particular Agreement;

 

(15)                          to adopt, amend and rescind such rules
and regulations as, in its opinion, may be advisable in the administration of
this Plan;

 

6

 

(16)                          to appoint and compensate agents,
counsel, auditors or other specialists to aid it in the discharge of its
duties; and

 

(17)                          to make all other determinations which
may be necessary or advisable for the administration of the Plan.

 

The Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem
advisable, to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any Agreement) and to otherwise supervise the
administration of the Plan. The Committee’s policies and procedures may differ
with respect to Awards granted at different times and may differ with respect
to a Participant from time to time, or with respect to different Participants
at the same or different times.

 

3.4                                  Committee Determinations and Decisions. Any determination made by the Committee
pursuant to the provisions of the Plan shall be made in its sole discretion,
and in the case of any determination relating to an Award may be made at the
time of the grant of the Award or, unless in contravention of any express term
of the Plan or an Agreement, at any time thereafter. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding on
all persons, including the Company and Participants. Any determination shall
not be subject to de novo review if challenged in court.

 

ARTICLE IV

 

SHARES SUBJECT TO PLAN 

 

4.1                                 Number of Shares. Subject to the adjustment under Section
4.5, the total number of shares of Stock reserved and available for
distribution pursuant to Awards under the Plan shall be 2,400,000 shares which
are hereby authorized for issuance on the Effective Date.  Subject to the adjustment under Section 4.5, the
maximum number of shares of Stock which may be used for Awards other than Stock
Options shall be 1,200,000 shares.  The
difference between the numbers of shares of Stock described in the two
preceding sentences of this Section shall be the maximum number of shares that
may be used for grants of Incentive Stock Options.  An Award of Stock Appreciation Rights shall
reduce share for share the maximum number of shares that may be subject to an
Award of Stock Options.   Such shares may
consist, in whole or in part, of authorized and unissued shares or shares
acquired from a third party.  Upon
approval of the Plan by shareholders, any existing long-term incentive plans,
whether or not they have been approved by shareholders, will immediately cease
to be available for use for the grant of new incentive awards.

 

4.2                                 Release of Shares. Subject to Section 4.1, the Committee
shall have full authority to determine the number of shares of Stock available
for Awards. In its discretion the Committee may include (without limitation),
as available for distribution, (a) shares of Stock subject to any Award that
have been previously forfeited or (b) shares under an Award that otherwise
terminates without issuance of Stock being made to a Participant.  Any shares that are available immediately
prior to the termination of the Plan, or any shares of Stock returned to the
Company for any reason subsequent to the termination of the Plan, may be
transferred to a successor plan.

 

4.3                                 Restrictions on Shares. 
Stock issued upon exercise of an Award shall be subject to the terms and
conditions specified herein and to such other terms, conditions and
restrictions as the Committee in its discretion may determine or provide in the
Award Agreement. The Company shall not be required to issue or deliver any
certificates for  Stock, cash or other
property prior to (i) the completion of any registration or qualification of
such shares under federal, state or other law, or any ruling or regulation of
any government body which the Committee determines to be necessary or
advisable; and (ii) the satisfaction of any applicable withholding obligation
in order for the Company or an Affiliate to obtain a deduction or discharge its
legal obligation with respect to the exercise of an Award. The Company may
cause any certificate (or other representation of title) for any shares of
Stock to be delivered to be properly marked with a legend or other notation
reflecting the limitations on transfer of such Stock as provided in this Plan
or as the Committee may otherwise require. The Committee may require any person
exercising an Award to make such representations and furnish such information
as it may consider appropriate in connection

 

7

 

with the issuance or delivery of the Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.

 

4.4                                 Shareholder Rights. No person shall have any rights of a
shareholder as to Stock subject to an Award until, after proper exercise of the
Award or other action required, such shares shall have been recorded on the
Company’s official shareholder records as having been issued and transferred.
Upon exercise of the Award or any portion thereof, the Company will have a
reasonable period in which to issue and transfer the shares, and a Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance and transfer. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date such shares are recorded
as issued and transferred in the Company’s official shareholder records, except
as provided herein or in an Agreement.

 

4.5                                 Effect of Certain Corporate Changes. In the event of any share dividend,
share split, combination or exchange of shares, recapitalization or other
change in the capital structure of the Company, corporate separation or
division of the Company (including, but not limited to, a split-up, spin-off,
split-off or distribution to Company shareholders other than a normal cash
dividend), reorganization, rights offering, a partial or complete liquidation,
or any other corporate transaction, Company securities offering or event
involving the Company and having an effect similar to any of the foregoing,
then the Committee may make appropriate adjustments or substitutions as
described below in this Section. The adjustments or substitutions may relate to
the number of shares of  Stock available
for Awards under the Plan, the number of shares of  Stock covered by outstanding Awards, the
Exercise Price per share of outstanding Awards, and any other characteristics
or terms of the Awards as the Committee may deem necessary or appropriate to
reflect equitably the effects of such changes to the Participants; provided,
however, that to the extent that Code Section 409A shall apply to an Award, any
such adjustments or substitutions shall only be made to the extent that they
comply with the requirements of Code Section 409A to avoid being subject to
taxation under Code Section 409A(a)(1). Notwithstanding the foregoing other
than the limitation for an Award subject to Code Section 409A, any fractional
shares resulting from such adjustment shall be eliminated by rounding down to
the nearest whole share.

 

ARTICLE V

 

ELIGIBILITY 

 

5.1                                 Eligibility. Except as herein provided, the persons
who shall be eligible to participate in the Plan and be granted Awards shall be
those persons who are employees of, or consultants or advisors to, the Company
or any Affiliate, or non-employee members of the Board of Directors. Of those
persons described in the preceding sentence, the Committee may, from time to
time, select persons to be granted Awards and shall determine the terms and
conditions with respect thereto. In making any such selection and in
determining the form of the Award, the Committee shall give consideration to
such factors deemed appropriate by the Committee.

 

ARTICLE VI

 

STOCK OPTIONS

 

6.1                                 General. The Committee shall have authority to grant Options
under the Plan at any time or from time to time. The Committee shall consider
the potential impact of Code Section 409A on each grant of Options and, if
necessary, shall make the terms and conditions of the Options comply with the
requirements of Code Section 409A to avoid being subject to taxation under Code
Section 409A(a)(1). An Option shall entitle the Participant to receive  Stock upon exercise of such Option, subject
to the Participant’s satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements) including, without
limitation, payment of the Exercise Price.

 

6.2                                 Grant. The grant of an Option shall occur as of the Grant
Date determined by the Committee, provided that the Grant Date shall not be
earlier than the date upon which the Committee acts to grant the Option.
Options may be granted alone or in connection with other Awards. An Award of
Options shall be evidenced by, and

 

8

 

subject to the terms of, an Agreement. Only a person
who is a common-law employee of the Company, any “parent corporation” of
the Company, or a “subsidiary corporation” of the Company (each term as
defined in Section 424 of the Code) on the date of grant shall be eligible to
be granted an Incentive Stock Option. To the extent that any Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.

 

6.3                              Terms and Conditions. Options shall be subject to such terms
and conditions as shall be determined by the Committee, including and subject
to the following:

 

(1)                                  Exercise Price. The Exercise Price per share shall not
be less than the Fair Market Value per share on the Grant Date. If an Option
which is intended to qualify as an Incentive Stock Option is granted to an
individual (a “10% Owner”) who owns or who is deemed to own shares
possessing more than ten percent (10%) of the combined voting power of all
classes of shares of the Company, a parent corporation or any subsidiary
corporation (each term as defined in Section 6.2), the Exercise Price per share
shall not be less than one hundred ten percent (110%) of the Fair Market Value
per share on the Grant Date.

 

(2)                                  Option Period. The Option Period of each Option shall
be fixed by the Committee, provided that no Option shall be exercisable more
than ten (10) years after the date the Option is granted. In the case of an
Incentive Stock Option granted to a 10% Owner, the Option Period shall not
exceed five (5) years from the date the Option is granted. No Option which is
intended to be an Incentive Stock Option shall be granted more than ten (10)
years from the date the Plan is adopted by the Company or the date the Plan is
approved by the shareholders of the Company, whichever is earlier.

 

(3)                                  Exercisability. Subject to Section 11.1, an Option
shall be exercisable in whole or in such installments and at such times, as
established by the Committee in an Agreement. The Committee may provide in an
Agreement for an accelerated exercise of all or part of an Option upon such
events or standards that it may determine, including one or more Performance
Measures. In addition, the Committee may at any time accelerate the
exercisability of all or part of any Option. If an Option is designated as an
Incentive Stock Option, the aggregate Fair Market Value (determined at the date
of grant of the Option) of the Stock as to which such Incentive Stock Option
which is exercisable for the first time during any calendar year (under the
Plan or any other plan of the Company or any parent corporation or subsidiary
corporation) shall not exceed $100,000.

 

(4)                                  Method of Exercise. Subject to the provisions of this
Article VI and the Agreement, a Participant may exercise Options, in whole or
in part, during the Option Period by giving written notice of exercise on a
form provided by the Committee to the Company specifying the number of shares
of Stock subject to the Option to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by cash or certified check
or such other form of payment as the Company may accept. If permitted in the applicable
Agreement, payment in full or in part may also be made by (i) delivering  Stock already owned by the Participant (for
any minimum period required by the Committee)
having a total Fair Market Value on the date of such delivery equal to the
Exercise Price; (ii) the delivery of cash by a broker-dealer as a “cashless”
exercise, provided such method of payment may not be used by an executive
officer of the Company or a member of the Board to the extent such payment
method would violate Rule 16b-3 or the Sarbanes-Oxley Act of 2002; (iii)
withholding by the Company of  Stock
subject to the Option having a total Fair Market Value as of the date of
delivery equal to the Exercise Price; or (iv) any combination of the foregoing.

 

(5)                                  Conditions for Issuance of Shares. No shares of Stock shall be issued
until full payment therefore has been made. A Participant shall have all of the
rights of a shareholder of the Company holding the class of shares that is
subject to such Option (including, if applicable, the right to vote the shares
and the right to receive dividends) when the Participant has given written
notice of exercise, has paid in full for such shares, and such shares have been
recorded on the Company’s official shareholder records as having been issued and
transferred.

 

(6)                                  Non-transferability of Options. Unless otherwise specifically provided
in an Agreement, no Option shall be sold, assigned, margined, transferred,
encumbered, conveyed, gifted, alienated,

 

9

 

hypothecated, pledged, or
otherwise disposed of, other than by will or by the laws of descent and
distribution, and all Options shall be exercisable during the Participant’s
lifetime only by the Participant; provided, however, under no circumstances may
a Participant assign, transfer, convey or otherwise dispose of an Option for
consideration unless pursuant to a Qualified Domestic Relations Order.

 

6.4                                 Termination by Reason of Death. Unless otherwise specifically provided
in an Agreement or determined by the Committee, any unexpired and unexercised
Option held by a Participant who incurs a Termination of Employment due to
death shall thereafter be fully exercisable for a period of one (1) year
immediately following the date of such death or until the expiration of the
Option Period, whichever period is the shorter. In the event of a Termination
of Employment due to death, if an Incentive Stock Option shall be exercised
after the expiration of the exercise period that applies for purposes of Code
Section 422, such Stock Option thereafter shall be treated as a Non-Qualified
Stock Option.

 

6.5                                 Termination by Reason of Disability. Unless otherwise specifically provided
in an Agreement or determined by the Committee, any unexpired and unexercised
Option held by a Participant who incurs a Termination of Employment due to
Disability shall thereafter be fully exercisable by the Participant for a
period of one (1) year immediately following the date of such Termination of
Employment or until the expiration of the Option Period, whichever period is
the shorter, and the Participant’s death at any time following such Termination
of Employment due to Disability shall not affect the foregoing  In the event of a Termination of Employment
due to Disability, if an Incentive Stock Option shall be exercised after the
expiration of the exercise period that applies for purposes of Code Section
422, such Stock Option thereafter shall be treated as a Non-Qualified Stock
Option.

 

6.6                                 Termination by Reason of Retirement. Unless otherwise specifically provided
in an Agreement or determined by the Committee, any unexpired and unexercised
Option held by a Participant who incurs a Termination of Employment due to
Retirement shall thereafter be fully exercisable by the Participant for a period
of three (3) years immediately following the date of such Termination of
Employment or until the expiration of the Option Period, whichever period is
the shorter, and the Participant’s death at any time following such Termination
of Employment due to Disability shall not affect the foregoing.  In the event of a Termination of Employment
due to Retirement, if an Incentive Stock Option shall be exercised after the
expiration of the exercise period that applies for purposes of Code Section
422, such Stock Option thereafter shall be treated as a Non-Qualified Stock
Option.

 

6.7                                 Other Termination. Unless otherwise specifically provided
in an Agreement or determined by the Committee, if a Participant incurs a
Termination of Employment that is involuntary on the part of the Participant
(but is not due to death, Disability or with Cause), any Option held by such
Participant shall thereupon terminate, except that such Option, to the extent
then exercisable, may be exercised for the lesser of the three consecutive
month period commencing with the date of such Termination of Employment or
until the expiration of the Option Period whichever period is the shorter.
Unless otherwise specifically provided in an Agreement or determined by the
Committee, if the Participant incurs a Termination of Employment for Cause or
that is voluntary on the part of the Participant (other than due to
Retirement), the Option, to the extent not previously exercised, shall
terminate one business day prior to such Termination of Employment. Unless
otherwise provided in an Agreement, the death or Disability of a Participant
after a Termination of Employment otherwise provided herein shall not extend
the time permitted to exercise an Option.

 

ARTICLE VII

 

STOCK APPRECIATION RIGHTS

 

7.1                                 General. The Committee shall have authority to grant Stock
Appreciation Rights under the Plan at any time or from time to time. Stock
Appreciation Rights may be awarded alone or in tandem with other Awards granted
under the Plan. The Committee shall consider the potential impact of Code
Section 409A on each grant of Stock Appreciation Rights and, if determined to
be necessary, shall make the terms of conditions of the Stock Appreciation
Rights comply with the requirements of Code Section 409A to avoid being subject
to taxation under Code Section 409A(a)(1). Subject to the Participant’s
satisfaction in full of any conditions, restrictions or limitations imposed in
accordance with the Plan or an Agreement, a Stock Appreciation Right shall
entitle the Participant to

 

10

 

surrender to the Company the Stock Appreciation Right
and to receive in Stock the number of shares described in Section 7.3(2).

 

7.2                              Grant. The grant of a Stock Appreciation Right shall occur
as of the Grant Date determined by the Committee. A Stock Appreciation Right
entitles a Participant to receive Stock as described in Section 7.3(2). An
Award of Stock Appreciation Rights shall be evidenced by, and subject to the
terms of an Agreement, which shall become effective upon execution by the
Participant.

 

7.3                              Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined by the Committee
and set forth in an Agreement, including (but not limited to) the following:

 

(1)                                  Period and Exercise. The term of a Stock Appreciation Right
shall be established by the Committee. A Stock Appreciation Right shall be for
such period and, subject to Section 11.1, shall be exercisable in whole or in
installments and at such times as established by the Committee in an Agreement.
The Committee may provide in an Agreement for an accelerated exercise of all or
part of a Stock Appreciation Right upon such events or standards that it may
determine, including one or more Performance Measures. In addition, the
Committee may at any time accelerate the exercisability of all or part of any
Stock Appreciation Right. Stock Appreciation Rights shall be exercised by the
Participant’s giving written notice of exercise, on a form provided by the
Committee, to the Company specifying the portion of the Stock Appreciation
Right to be exercised.

 

(2)                                  Delivery of Stock. Upon the exercise of a Stock
Appreciation Right, a Participant shall receive a number of shares of Stock
equal in value to the excess of the Fair Market Value per share of Stock over
the Exercise Price per share of Stock specified in the related Agreement,
multiplied by the number of shares in respect of which the Stock Appreciation
Right is exercised. The Exercise Price per share shall not be less than the
Fair Market Value per share on the Grant Date. The aggregate Fair Market Value
per share of Stock shall be determined as of the date of exercise of such Stock
Appreciation Right.

 

(3)                                  Non-transferability of Stock Appreciation
Rights. Except as
specifically provided in the Plan or in an Agreement, no Stock Appreciation
Rights shall be sold, assigned, margined, transferred, encumbered, conveyed,
gifted, alienated, hypothecated, pledged or otherwise disposed of, other than
by will or the laws of descent and distribution, and all Stock Appreciation
Rights shall be exercisable during the Participant’s lifetime only by the
Participant; provided, however, under no circumstances may a Participant assign
or transfer a Stock Appreciation Right for consideration unless pursuant to a
Qualified Domestic Relations Order.

 

(4)                                  Termination. A Stock Appreciation Right shall be
forfeited or terminated at such time as an Option would be forfeited or
terminated under the Plan, unless otherwise specifically provided in an
Agreement.

 

ARTICLE VIII

 

RESTRICTED STOCK 

 

8.1                              General. The Committee shall have authority to grant
Restricted Stock under the Plan at any time or from time to time. The Committee
shall consider the potential impact of Code Section 409A on each grant of
Restricted Stock and, if determined to be necessary, shall make the terms and
conditions of the Restricted Stock comply with the requirements of Code Section
409A to avoid being subject to taxation under Code Section 409A(a)(1). The
Committee shall determine the number of shares of Restricted Stock to be
awarded to any Participant, the time or times within which such Awards may be
subject to forfeiture, and any other terms and conditions of the Awards. Each
Award shall be confirmed by, and be subject to the terms of, an Agreement which
contains the applicable terms and conditions of the Award, including the rate
or times provided by the Committee for the lapse of any forfeiture restrictions
or other conditions regarding the Award. The Committee may provide in an
Agreement for an accelerated lapse of any such restrictions upon such events or
standards that it may determine, including one or more Performance Measures. In
addition, the Committee may at any time accelerate the lapse of

 

11

 

any such restrictions with respect to all or part of
any Restricted Stock. Each Award of Restricted Stock shall become effective
upon execution by the Participant of an Agreement.

 

8.2                              Grant, Awards and Certificates. The grant of an Award of Restricted
Stock shall occur as of the Grant Date determined by the Committee. Restricted
Stock may be awarded either alone or in addition to other Awards granted under
the Plan. Notwithstanding the limitations on issuance of Stock otherwise
provided in the Plan, each Participant receiving an Award of Restricted Stock
shall be issued a certificate (or other representation of title) in respect of
such Restricted Stock. Such certificate shall be registered in the name of such
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award as determined by the
Committee. The Committee may require that the certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed and that, as a condition of any Award of Restricted Stock, the
Participant shall have delivered a share power, endorsed in blank, relating to
the Stock covered by such Award.

 

8.3                              Terms and Conditions. Restricted Stock shall be subject to
such terms and conditions as shall be determined by the Committee, including
the following:

 

(1)                                  Limitations on Transferability. Subject to the provisions of the Plan
and the Agreement, during a period set by the Committee, commencing with the
date of such Award (the “Restriction Period”), the Participant shall not
be permitted to sell, assign, margin, transfer, encumber, convey, gift,
alienate, hypothecate, pledge or otherwise dispose of Restricted Stock;
provided, however, under no circumstances may a Participant assign, transfer,
convey or otherwise dispose of Restricted Stock for consideration unless
pursuant to a Qualified Domestic Relations Order.

 

(2)                                  Rights. Except as provided in Section 8.3(1) and
notwithstanding Section 4.4, the Participant shall have, with respect to the
Restricted Stock, all of the rights of a shareholder of the Company holding the
class of Stock that is the subject of the Restricted Stock, including, if
applicable, the right to vote the shares and the right to receive any
dividends. If any dividends or other distributions are paid in shares of Stock,
all such shares shall be subject to the same restrictions on transferability as
the shares of Restricted Stock with respect to which they were paid.

 

(3)                                  Criteria. As described in Section 8.1 above, the Committee may
provide in an Agreement for the lapse of restrictions in installments and may
accelerate the vesting of all or any part of any Award and waive the
restrictions for all or any part of such Award; such provisions of an Agreement
or Committee action may be based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department for which
the Participant is employed or such other factors or criteria as the Committee
may determine.

 

(4)                                  Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment due to death, Disability or Retirement during the Restriction
Period, the restrictions shall lapse and the Participant shall be fully vested
in the Restricted Stock. Except to the extent otherwise provided in the
applicable Agreement and the Plan, upon a Participant’s Termination of
Employment for any reason during the Restriction Period other than a
Termination of Employment due to death, Disability or Retirement, all shares of
Restricted Stock still subject to restriction shall be forfeited by the
Participant, except the Committee shall have the discretion to waive in whole or
in part any or all remaining restrictions with respect to any or all of such
Participant’s Restricted Stock.

 

(5)                                  Delivery. If a share certificate is issued in respect of
Restricted Stock, the certificate shall be registered in the name of the
Participant but shall be held by the Company for the account of the Participant
until the end of the Restriction Period. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, unlegended certificates (or other representation of title)
for such shares shall be delivered to the Participant.

 

12

 

ARTICLE
IX

 

DEFERRED
STOCK 

 

9.1                              General.  The Committee
shall have authority to grant an Award of Deferred Stock under the Plan at any
time or from time to time.  Deferred
Stock may be awarded either alone or in addition to other Awards granted under
the Plan.  The Committee may denominate a
Deferred Stock Award in either shares or units. 
The Committee shall consider the impact of Code Section 409A on each
grant of Deferred Stock and, if determined to be necessary, shall make the
terms and conditions of the Deferred Stock comply with the requirements of Code
409A to avoid being subject to taxation under Code Section 409A(a)(1).  The Committee shall determine the number of
shares of Deferred Stock to be awarded to any Participant, the duration of the
period (the “Deferral Period”) prior to which the Common Stock will be
delivered, and the conditions under which receipt of the Stock will be deferred
and any other terms and conditions of the Awards.  Each Deferred Stock Award shall be evidenced
by, and subject to the terms of, an Agreement, which will become effective upon
execution by the Participant.

 

9.2                              Terms and Conditions. 
Deferred Stock Awards shall be subject to such terms and conditions as
shall be determined by the Committee, including the following:

 

(1)                                  Limitations on Transferability. 
Subject to the provisions of the Plan and the Agreement, Deferred Stock
Awards may not be sold, assigned, margined, transferred, encumbered, conveyed,
gifted, alienated, hypothecated, pledged, or otherwise disposed of during the
Deferral Period; provided, however, under no circumstances may a Participant
assign, transfer, convey or otherwise dispose of a Deferred Stock Award for
consideration unless pursuant to a Qualified Domestic Relations Order.  Subject to the provisions of an Agreement, at
the expiration of the Deferral Period, the Committee shall deliver Stock to the
Participant pursuant to the Deferred Stock Award.

 

(2)                                  Rights.  Unless otherwise provided in
an Agreement, cash dividends on Deferred Stock shall be deemed to be paid and
automatically reinvested in additional shares of Deferred Stock to be delivered
with the original delivery of the Deferred Stock.

 

(3)                                  Criteria.  Based on service, performance
by the Participant or by the Company or the Affiliate, including any division
or department for which the Participant is employed, or such other factors or
criteria as the Committee may determine, the Committee may provide for the
lapse of deferral limitations in installments and may accelerate the vesting of
all or any part of any Award and waive the deferral limitations for all or any
part of such Award.

 

(4)                                  Forfeiture.  Unless otherwise provided in
an Agreement or determined by the Committee, if the Participant incurs a
Termination of Employment due to death, Disability or Retirement during the
Deferral Period, the restrictions shall lapse and the Participant shall be
fully vested in the Deferred Stock. 
Unless otherwise provided in an Agreement or determined by the
Committee, upon a Participant’s Termination of Employment for any reason during
the Deferral Period other than a Termination of Employment due to death,
Disability or Retirement, the rights to the shares still covered by the Award
shall be forfeited by the Participant, except the Committee shall have the
discretion to waive in whole or in part any or all remaining deferral
limitations with respect to any or all of such Participant’s Deferred Stock.

 

(5)                                  Election.  A Participant may elect to
further defer receipt of the Deferred Stock payable under an Award (or an
installment of an Award) for a specified time (or pursuant to a fixed schedule)
or until the occurrence of a permissible distribution event under Code Section
409A, subject to such terms and conditions determined by the Committee.  Any such election must be made no later than
the time provided by Section 409A(a)(4) of the Code, as determined by the
Committee.

 

13

 

ARTICLE X

 

PERFORMANCE AWARDS

 

10.1                        General. The Committee shall have authority to grant
Performance Awards under the Plan at any time or from time to time. The
Committee shall consider the impact of Code Section 409A on each grant of a
Performance Award and, if determined to be necessary, shall make the terms and
conditions of the Performance Awards comply with the requirements of Code
Section 409A to avoid being subject to taxation under Code Section 409A(a)(1).
A Performance Unit and a Performance Share each consist of the right to receive
shares of  Stock or cash, as provided in
the particular Award Agreement, upon achievement of certain Performance Goals
and may be awarded either alone or in addition to other Awards granted under
the Plan. Performance Units shall be denominated in units of value (including
dollar value of shares of Stock) and Performance Shares shall be denominated in
a number of shares of Stock.

 

The Committee shall have complete
discretion to determine the number of Performance Units and Performance Shares,
if any, granted to each Participant. Each Performance Award shall be evidenced
by, and be subject to the terms of, an Agreement which will become effective
upon execution by the Participant.

 

10.2                        Earning Performance Awards. After the applicable Performance Period
shall have ended, the Committee shall determine the extent to which the
established Performance Goals have been achieved.

 

10.3                        Termination of Employment Due to Death,
Disability or Retirement. In the event of a Termination of Employment due to death, Disability
or Retirement, during a Performance Period, the Participant shall receive,
after the expiration of the Performance Period, a pro rata share of the Performance
Awards relating to such Performance Period based upon the period of time he or
she is employed by the Company in the Performance Period. Unless otherwise
specifically provided in an Agreement or determined by the Committee, in the
event that a Participant’s employment terminates for any other reason, all
Performance Awards shall be forfeited by the Participant to the Company.
Distribution of earned Performance Awards may be made at the same time payments
are made to Participants who did not incur a Termination of Employment during
the applicable Performance Period.

 

10.4                        Nontransferability. Unless otherwise specifically provided
in an Agreement, Performance Awards may not be sold, assigned, margined,
transferred, encumbered, conveyed, gifted, alienated, hypothecated, pledged, or
otherwise disposed of, other than by will or by the laws of descent and
distribution; provided, however, under no circumstances may a Participant
assign, transfer, convey or otherwise dispose of a Performance Award for consideration
unless pursuant to a Qualified Domestic Relations Order.

 

ARTICLE XI

 

CHANGE IN CONTROL
PROVISIONS 

 

11.1                        Impact of Event. Notwithstanding any other provision of
the Plan to the contrary, other than Section 11.2, and unless otherwise
specifically provided in an Agreement, in the event of a Change in Control:

 

(1)                                  any Stock Options and Stock Appreciation
Rights outstanding as of the date of such Change in Control shall become fully
vested and exercisable to the full extent of the original grant;

 

(2)                                  the restrictions applicable to any
Restricted Stock Awards shall lapse, and such Restricted Stock shall become
free of all restrictions and become fully vested and transferable to the full
extent of the original grant;

 

(3)                                  any unvested Deferred Stock shall vest
and shall be distributed within thirty (30) days following the Change in
Control; and

 

(4)                                  any Performance Goal or other condition
with respect to any Performance Shares and Performance Units shall be deemed to
have been satisfied in full at target value, and such Award shall be fully
distributable within thirty days following the change in control.

 

11.2                        Additional Discretion. The Committee shall have full
discretion, notwithstanding anything herein or in an Agreement to the contrary,
with respect to an outstanding Award upon a Change in Control to provide that

 

14

 

the securities of another entity be substituted
hereunder for the Stock and to make equitable adjustment with respect thereto.

 

ARTICLE XII

 

PROVISIONS APPLICABLE TO
SHARES ACQUIRED UNDER THIS PLAN 

 

12.1                        No Company Obligation. Except to the extent specifically
required by applicable securities laws, none of the Company, an Affiliate or
the Committee shall have any duty or obligation to affirmatively disclose
material information to a record or beneficial holder of Stock or an Award, and
such holder shall have no right to be advised of any material information
regarding the Company or any Affiliate at any time prior to, upon, or in
connection with receipt or the exercise or distribution of an Award. The
Company makes no representation or warranty as to the future value of the Stock
issued or acquired in accordance with the provisions of the Plan.

 

ARTICLE XIII

 

MISCELLANEOUS 

 

13.1                        Amendments and Termination. The Board may amend, alter, or
discontinue the Plan at any time, but no amendment, alteration or
discontinuation shall be made which would impair the rights of a Participant
under an Award theretofore granted without the Participant’s consent.
Notwithstanding the immediately preceding sentence, an amendment may be made
without a Participant’s consent to (a) cause the Plan or an Award to comply
with applicable law (including, but not limited to, any changes needed to avoid
taxation of an Award as a “nonqualified deferred compensation plan” under Code
Section 409A) or (b) permit the Company or an Affiliate a tax deduction under
applicable law. The Committee may amend, alter or discontinue the terms of any
Award theretofore granted, prospectively or retroactively, on the same
conditions and limitations (and exceptions to limitations) as apply to the
Board, and further subject to any approval or limitations the Board may impose.
Notwithstanding the foregoing, any amendments to the Plan shall require
shareholder approval to the extent required by Federal or state law or any
regulations or rules promulgated thereunder or the rules of the national
securities exchange or market on which shares of Stock are listed.

 

13.2                        Unfunded Status of Plan. It is intended that the Plan be an
“unfunded” plan for incentive compensation. The Company may create trusts or
other arrangements to meet the obligations created under the Plan to deliver
Stock or make payments; provided, however, that the existence of such trusts or
other arrangements is consistent with the “unfunded” status of the Plan and all
property held thereunder and income thereon shall remain solely the property
and rights of the Company (without being restricted to satisfying the
obligations created under the Plan) and shall be subject to the claims of the
Company’s general creditors. The Company’s obligations created under the Plan
shall constitute a general, unsecured obligation, payable solely out of its
general assets.

 

13.3                        Provisions Relating to Internal Revenue
Code Section 162(m).
To the extent that Section 162(m) of the Code applies with respect to Awards to
Covered Employees under the Plan, the Plan shall be administered, and the
provisions of the Plan shall be interpreted, in a manner consistent with Code
Section 162(m). If any provision of the Plan or any Agreement relating to such
an Award does not comply or is inconsistent with the requirements of Code
Section 162(m), such provision shall be construed or deemed amended to the
extent necessary to conform to such applicable requirements. In addition, the
following provisions shall apply to the Plan or an Award to the extent
necessary to obtain a tax deduction for the Company or an Affiliate:

 

(1)                                  Not later than the date required or
permitted for “qualified performance-based compensation” under Code Section
162(m), the Committee shall determine the Participants who are Covered
Employees who will receive Awards that are intended as qualified
performance-based compensation and the amount or method for determining the
amount of such compensation.

 

(2)                                  During any three-consecutive calendar
year period, the maximum number of shares of Stock for which Options and Stock
Appreciation Rights, in the aggregate, may be granted to any Covered Employee
shall not exceed 200,000 shares. For Performance Awards that are intended to
constitute

 

15

 

“performance-based
compensation” (as that term is used in Code Section 162(m), no more than
$500,000 (based upon fair market value, if applicable, on the date of grant)
may be subject to such Awards granted to any Covered Employee during any
three-consecutive calendar year period. Further, for any Restricted Stock
Awards that are intended to constitute performance-based compensation, no more
than $500,000 (based upon fair market value, if applicable, on the date of
grant) may be subject to such Awards granted to any Covered Employee during any
three-consecutive calendar year period. The limitations on Awards under this
Section are subject to adjustment as provided in Section 4.5 to the extent that
needed to obtain tax deductibility under Code Section 162(m).

 

(3)                                  Earning Performance Awards. Subject to the provisions of Section
13.3(4) below, payment with respect to Performance Awards for Covered Employees
shall be a direct function of the extent to which the Company’s Performance
Goals have been achieved. A Performance Award to a Participant who is a Covered
Employee shall (unless the Committee determines otherwise) provide that in the
event of the Participant’s Termination of Employment prior to the end of the
Performance Period for any reason, such Award will be payable only (a) if the
applicable Performance Goals are achieved and (b) to the extent, if any, as the
Committee shall determine.

 

(4)                                  Other Section 162(m) Provisions. In the manner required by Section
162(m) of the Code, the Committee shall, promptly after the date on which the
necessary financial and other information for a particular Performance Period
becomes available, certify the extent to which Performance Goals have been
achieved with respect to any Performance Award or Restricted Stock Award
intended to qualify as performance-based compensation under Section 162(m) of
the Code. In addition, the Committee may, in its discretion, reduce or
eliminate the amount of any Performance Award payable to any Participant, based
on such factors as the Committee may deem relevant, but the Committee may not
increase the amount of any Performance Award payable to any Participant above
the amount established in accordance with the relevant Performance Goals with
respect to any Performance Award intended to qualify as performance-based
compensation.

 

13.4                        Misconduct of a Participant.  Notwithstanding anything to the
contrary in the Plan, the Committee, in its sole discretion, may establish
procedures, at or before the time that an Award is granted (or, with the
consent of the Participant, after such time), in the applicable Award Agreement
or in a separate agreement, providing for the forfeiture or cancellation of
such Award (whether vested or unvested), or the disgorgement of gains from the
exercise, vesting or settlement of the Award, in each case to be applied if the
Participant engages in conduct detrimental to the Company. For purposes of this
Plan, conduct detrimental to the Company may include conduct that the Committee
in its sole discretion determines (a) to be injurious or prejudicial to any
interest of the Company or any of its Affiliates, or (b) to otherwise violate a
policy, procedure or rule applicable to the Participant with respect to the
Company or any of its subsidiaries, or if the Participant incurs a Termination
of Employment for Cause.

 

13.5                        No Additional Obligation. Nothing contained in the Plan shall
prevent the Company or an Affiliate from adopting other or additional
compensation or benefit arrangements for its employees.

 

13.6                        Withholding. No later than the date as of which an
amount first becomes includible in the gross income of the Participant for
federal income tax purposes with respect to any Award, the Participant shall
pay to the Company (or other entity identified by the Committee), or make
arrangements satisfactory to the Company or other entity identified by the
Committee regarding the payment of, any federal, state, or local taxes of any
kind (including any employment taxes) required by law to be withheld with
respect to such income. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its Affiliates
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participant. Subject to approval by the
Committee, a Participant may elect to have such tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of  Stock to be issued pursuant to
any Award a number of shares with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the required statutory
minimum (but no more than such required minimum) with respect to the Company’s
withholding obligation, or (ii) transferring to the Company shares of  Stock owned by the Participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the required

 

16

 

statutory minimum (but no more than such required
minimum) with respect to the Company’s withholding obligation.

 

13.7                        Controlling Law. The Plan and all Awards made and
actions taken thereunder shall be governed by and construed in accordance with
the laws of the state of Georgia (other than its law respecting choice of law).
The Plan shall be construed to comply with all applicable law and to avoid
liability to the Company, an Affiliate or a Participant. In the event of
litigation arising in connection with actions under the Plan, the parties to
such litigation shall submit to the jurisdiction of courts located in Fulton or
Gwinnett County, Georgia, or to the federal district court that encompasses
said counties.

 

13.8                        Offset. Any amounts owed to the Company or an Affiliate by
the Participant of whatever nature may be offset by the Company from the value
of any Award to be transferred to the Participant, and no Stock, cash or other
thing of value under this Plan or an Agreement shall be transferred unless and
until all disputes between the Company and the Participant have been fully and
finally resolved and the Participant has waived all claims to such against the
Company or an Affiliate.

 

13.9                        Nontransferability; Beneficiaries. Unless otherwise specifically provided
in an Agreement, no Award or Stock subject to an Award shall be assignable or
transferable by the Participant, otherwise than by will or the laws of descent
and distribution or pursuant to a beneficiary designation, and Awards shall be
exercisable during the Participant’s lifetime only by the Participant (or by
the Participant’s Representative in the event of the Participant’s incapacity);
provided, however, under no circumstances may a Participant assign or transfer
an Award or Stock subject to an Award for consideration unless pursuant to a
Qualified Domestic Relations Order. Each Participant may designate a
Beneficiary to exercise any Option or Stock Appreciation Right or receive any
Award held by the Participant at the time of the Participant’s death or to be
assigned any other Award outstanding at the time of the Participant’s death. No
Award or Stock subject to an Award shall be subject to the debts of a
Participant or Beneficiary or subject to attachment or execution or process in
any court action or proceeding unless otherwise provided in this Plan. If a
deceased Participant has named no Beneficiary, any Award held by the
Participant at the time of death shall be transferred as provided in his or her
will or by the laws of descent and distribution. Except in the case of the
holder’s incapacity, only the holder may exercise an Option or Stock
Appreciation Right.

 

13.10                  No Rights with Respect to Continuance of Employment. Nothing contained herein shall be
deemed to alter the relationship between the Company or an Affiliate and a
Participant, or the contractual relationship between a Participant and the
Company or an Affiliate if there is a written contract regarding such
relationship. Nothing contained herein shall be construed to constitute a
contract of employment between the Company or an Affiliate and a Participant.
The Company or an Affiliate and each of the Participants continue to have the
right to terminate the employment or service relationship at any time for any
reason, except as provided in a written contract. The Company or an Affiliate
shall have no obligation to retain the Participant in its employ or service as
a result of this Plan. There shall be no inference as to the length of
employment or service hereby, and the Company or an Affiliate reserves the same
rights to terminate the Participant’s employment or service as existed prior to
the individual becoming a Participant in this Plan.

 

13.11                  Limits on Repricing and Regranting of Awards. 
Notwithstanding anything else contained herein except Sections 4.5, 11.2
and 13.12 hereof, unless approved by the Company’s shareholders:  in no event may the Exercise Price per share
of Stock covered by an Option, or the Exercise Price of a Stock Appreciation
Right, be reduced, directly or indirectly, through the technique commonly known
as “repricing” or through the cancellation and regrant of such Award; and no
outstanding Award may be substituted for another type of Award.

 

13.12                  Awards in Substitution for Awards Granted by Other
Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become officers or employees of the Company or an Affiliate as
the result of a merger or consolidation of the employing corporation with the
Company or an Affiliate, or the acquisition by the Company or an Affiliate of
the assets of the employing corporation, or the acquisition by the Company or
Affiliate of the share of the employing corporation, as the result of which it
becomes an Affiliate. The terms and conditions of the Awards so granted may
vary from the terms and conditions set forth in this Plan at the time of such
grant as the Committee may deem appropriate to conform, in whole or in part, to
the provisions of the awards in substitution for which they are granted and to
ensure that the requirements imposed under Code Sections 409A and 424 are met.

 

17

 

13.13                     Delivery of Stock Certificates. To the extent the Company uses
certificates to represent shares of Stock, certificates to be delivered to
Participants under this Plan shall be deemed delivered for all purposes when
the Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the Participant, at the
Participant’s last known address on file with the Company. Any reference in
this Section or elsewhere in the Plan or an Agreement to actual stock
certificates and/or the delivery of actual stock certificates shall be deemed
satisfied by the electronic record-keeping and electronic delivery of shares of  Stock or other mechanism then utilized by the
Company and its agents for reflecting ownership of such shares.

 

13.14                     Indemnification. To the maximum extent permitted under
the Company’s Articles of Incorporation and by-laws, each person who is or
shall have been a member of the Committee, or of the Board, shall be
indemnified and held harmless by the Company against and from (a) any loss,
cost, liability or expense (including attorneys’ fees) that may be imposed upon
or reasonably incurred by him or her in connection with or resulting from any
claim, action, suit or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
this Plan or any Award Agreement, and (b) from any and all amounts paid by him or
her in settlement thereof, with the Company’s prior written approval, or paid
by him or her in satisfaction of any judgment in any such claim, action, suit
or proceeding against him or her; provided, however, that he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company’s Articles of Incorporation or by-laws, by contract, as a matter of law
or otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

 

13.15                     Severability. If any provision of this Plan shall for
any reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not effect any other provision hereby, and this Plan
shall be construed as if such invalid or unenforceable provision were omitted.

 

13.16                     Successors and Assigns. This Plan shall inure to the benefit of
and be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant’s heirs, legal representatives and
successors.

 

13.17                     Entire Agreement. This Plan and the Agreements constitute
the entire agreement with respect to the subject matter hereof and thereof,
provided that in the event of any inconsistency between the Plan and the Agreement,
the terms and conditions of this Plan shall control.

 

13.18                     Term. No Award shall be granted under the Plan after the
tenth anniversary of the Effective Date.

 

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

 

13.20                     Headings. The headings contained in this Plan are for
reference purposes only and shall not affect the meaning or interpretation of
this Plan.

 

18

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