Document:

Unassociated Document

    Employment
      Agreement

    By
      And Between

    World
      Acceptance Corporation

    And

    Mark
      C. Roland

     

     

     

     

     

     

     

     

    Effective

    May
      21, 2007

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EMPLOYMENT
      AGREEMENT

    

    This
      Agreement is effective as of May 21, 2007, by and between World Acceptance
      Corporation (the "Company"), a South Carolina corporation and Mark C. Roland
      (the "Executive").

    

    The
      Compensation Committee of the Board of the Company (the "Committee"), acting
      on
      behalf of and pursuant to authority granted by the Board of Directors of the
      Company (the “Board”) at its meeting on May 21, 2007, determined that it would
      be in the best interests of the Company and its shareholders to retain the
      services of the Executive for the Period of Employment (as defined in Section
      III 3.1 below) and upon the terms provided in this Agreement. The Executive
      is
      willing to be employed by the Company on a full time basis for said Period
      of
      Employment and upon such other terms and conditions as provided in this
      Agreement.

    

    In
      consideration of the mutual covenants and promises contained in this Agreement,
      the parties hereby agree as follows:

    

    

    SECTION
      I

    

    EMPLOYMENT

    

    The
      Company agrees to employ the Executive and the Executive agrees to be employed
      by the Company, for the Period of Employment, and based upon the other terms
      and
      conditions provided in the Agreement.

    

    

    SECTION
      II

    

    POSITION
      AND RESPONSIBILITIES

    

    The
      Executive agrees to serve as the Company's President and Chief Operating Officer
      and to be responsible for the duties and responsibilities traditionally
      attributed to such position, reporting to the Chief Executive Officer during
      the
      Period of Employment. The Executive agrees to serve as a member of the Board.
      The Executive also agrees to continue to serve during the Period of Employment
      as an Officer and Director of any subsidiary, affiliate, or parent corporation
      ("Affiliates") of the Company which the Chief Executive Officer feels is
      appropriate. 

    

    
      
        
        

      

      
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    SECTION
      III

    

    TERMS
      AND DUTIES

    

    3.1 Period
      of Employment

    

    For
      purposes of this Agreement, the Period of Employment will commence on May 21,
      2007 and shall continue for a period of three (3) years, subject to extension
      or
      termination as provided in this Agreement. At the end of the three year period
      commencing from the effective date of this Agreement, the Board shall review
      the
      performance of the Executive, and this Agreement shall be deemed to be approved
      and extended automatically for an additional one (1) year period on the same
      terms and conditions, unless either the Company or the Executive gives contrary
      written notice to the other no less than ninety (90) days prior to the date
      on
      which this Agreement would otherwise be extended. At the end of each subsequent
      one year term, the Board shall review the performance of the Executive, and
      this
      Agreement shall be deemed to be approved and extended automatically for an
      additional one (1) year period on the same terms and conditions, unless either
      the Company or the Executive gives contrary written notice to the other no
      less
      than ninety (90) days prior to the date on which this Agreement would otherwise
      be extended. Non-renewal shall be deemed a termination of employment as of
      the
      end of the Period of Employment. Non-renewal by the Company shall be subject
      to
      the severance provisions set forth in Section VIII.8.1, and non-renewal by
      the
      Executive shall be subject to the severance provisions of Section
      VIII.8.3.

    

    3.2 Duties

    

    During
      the Period of Employment and except for illness, incapacity and reasonable
      vacation and holiday periods, the Executive shall devote all of his business
      time, attention and skill exclusively to the business and affairs of the Company
      and its Affiliates. The Executive will not engage in any other business
      activity, and will perform faithfully the duties which may be assigned to him
      from time to time by the Chief Executive Officer of the Company. Notwithstanding
      the above, nothing in this Agreement shall preclude the Executive from devoting
      time during reasonable periods required for:

    

    
      	 	
              3.2i.

            	
              Serving,
                with prior approval of the Board of the Company, as a Director or
                member
                of a committee or organization involving no actual or potential conflict
                of interest with the Company;

            

    

    

    
      	 	
              3.2.ii.

            	
              Delivering
                lectures and fulfilling speaking
                engagements;

            

    

    

    
      	 	
              3.2.iii.

            	
              Engaging
                in charitable and community activities;
                or

            

    

    

    
      	 	
              3.2.iv.

            	
              Investing
                his personal assets in investments or business entities in such form
                or
                manner that will not violate this Agreement or require services on
                the
                part of the Executive in the operation of affairs of the business
                entities
                in which those investments are made. These activities will be allowed
                as
                long as they do not materially affect or interfere with the performance
                of
                the Executive's duties and obligations to the
                Company.

            

    

    

    

    
      
        
        

      

      
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    SECTION
      IV

    

    COMPENSATION,
      BENEFITS, AND PERQUISITES

    

    For
      all
      services rendered by the Executive in any capacity during the Period of
      Employment, including services as an Executive, Officer, Director or Committee
      Member, the Executive shall be compensated as follows:

    

    4.1 BASE
      SALARY

    

    The
      Company shall pay the Executive a fixed base salary ("Base Salary") at such
      annual rate as the Compensation Committee deems appropriate; provided, however,
      that the Base Salary may not be less than $233,200.00 per year. Increases in
      Base Salary, once granted by the Committee, shall not be subject to reduction.
      Base Salary shall be payable according to the customary payroll practices of
      the
      Company. In no event shall Base Salary be payable less frequently than once
      per
      calendar month.

    

    4.2 ANNUAL
      INCENTIVE AWARDS

    

    The
      Company may, in its sole discretion, pay the Executive annual cash incentive
      compensation payments. At the beginning of each fiscal year, the Board or
      Committee may establish appropriate criteria for making such payments following
      the end of such fiscal year.

    

    4.3 LONG-TERM
      INCENTIVE AWARDS

    

    The
      Company may, in its sole discretion, pay the Executive long-term incentive
      compensation payments. The Committee may establish appropriate criteria for
      making such payments following the end of the performance period. Payments
      may,
      at the discretion of the Committee, take the form of cash, restricted stock
      and,
      stock options; provided, however, that any grants of restricted stock or stock
      options must also be approved in advance by the Company's Compensation and
      Stock
      Option Committee, which administers the Company's stock option plans. The intent
      of such long-term incentive compensation awards is to motivate the achievement
      of longer range and strategic goals. The Company agrees to enhance awards when
      goals are achieved and exceeded in recognition of the intent of this
      plan.

    

    4.4 BENEFITS
      AND PERQUISITES

    

    4.4.i Salaried
      Employee Benefits

    

    Executive
      will be entitled to participate in all compensation and employee benefit plans
      and programs and receive all benefits and perquisites for which any salaried
      employee of the Company is eligible under any plan or program now or later
      established by the Company for salaried employees. The Executive will
      participate to the extent permissible under the terms and provisions of such
      plans or programs. Nothing in this Agreement will preclude the Company from
      amending or terminating any of the plans or programs applicable to salaried
      employees as long as such amendment or termination is applicable to all
      similarly situated salaried employees.

    

    
      
        
        

      

      
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    4.4.ii Supplemental
      Benefits

    

    The
      Company also will provide long-term disability insurance which provides a
      benefit to the Executive of 60% of the Executive's Base Salary in effect at
      the
      time of disability.

    

    In
      the
      event a group long-term disability benefit is provided by the Company for which
      the Executive becomes eligible, the Executive's long-term disability benefits
      under this Agreement will be offset by the benefits payable under the group
      policy such that combined long-term disability benefits payable under the two
      plans do not exceed 60% of the Executive's then current Base
      Salary.

    

    Executive
      will be entitled to participate in the World Acceptance Corporation Supplemental
      Income Plan (SERP) in accordance with the terms of that plan.

    

    4.5
      AUTOMOBILE

    

    The
      Company will provide an automobile (including maintenance and insurance expense)
      of a value commensurate with his position for use by the Executive in accordance
      with the Company Car Policy.

    

    

    SECTION
      V

    

    BUSINESS
      EXPENSES

    

    The
      Company will reimburse the Executive for all reasonable travel, entertainment,
      business and other expenses incurred by the Executive in connection with the
      performance of his duties and obligations under this Agreement.

    

    

    SECTION
      VI

    

    DISABILITY

    

    6.1 In
      the
      event the Executive during the Period of Employment is unable to perform with
      or
      without accommodation his duties as set forth in Section III.3.2 for reasons
      of
      physical or mental incapacity, the Company will continue to pay the Executive
      in
      accordance with the compensation provisions of this Agreement during the period
      of his disability. However, in the event the Executive is disabled for a
      continuous period of ninety (90) days or more, the Company may terminate the
      employment of the Executive pursuant to this Agreement, and make payments to
      the
      Executive under the terms of the long-term disability provisions of this
      Agreement. In the event the Company terminates the employment of the Executive
      pursuant to this Section VI, the Company will have no further compensation
      obligations to the Executive, except for earned but unpaid Base Salary, annual
      incentive compensation payment, if any, pro rated to the Date of Termination
      of
      employment and any benefits payable under the SERP. 

    

    
      
        
        

      

      
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    6.2 During
      the period the Executive is receiving either regular compensation or disability
      payments as described in this Agreement, and as long as he is physically and
      mentally able to do so, the Executive will furnish information and assistance
      to
      the Company and from time to time will make himself available to the Company
      to
      undertake assignments consistent with his prior position with the Company and
      his physical and mental health. During the disability period, the Executive
      is
      responsible for reporting directly to the Board. If the Company fails to make
      a
      payment or provide a benefit required as part of the Agreement, the Executive's
      obligation to fulfill information and assistance will end.

    

    6.3 The
      term
      "disability" will have the same meaning as under the disability benefits to
      be
      provided pursuant to this Agreement, or such group disability plan as may be
      in
      effect for similarly situated employees at that time. In the event the
      definition of disability is not consistent, the definition contained in the
      plan
      document of such group plan shall control.

    

    

    SECTION
      VII

    

    DEATH

    

    In
      the
      event of the death of the Executive during the Period of Employment, the
      Company's obligation to make payments under this Agreement shall cease as of
      the
      date of death, except for Base Salary through the end of the Company's normal
      payroll period and any earned but unpaid annual incentive compensation payments
      prorated to the date of death. The Executive's designated beneficiary will
      be
      entitled to receive the proceeds of any life or other insurance or other death
      benefit programs provided in this Agreement, including the SERP according to
      the
      terms and conditions of that Plan.

    

    

    SECTION
      VIII

    

    EFFECT
      OF TERMINATION OF EMPLOYMENT

    

    Except
      as
      otherwise set forth in Sections VI, VII and IX:

    

    8.1 If
      the
      Executive's employment terminates, due to either a Without Cause Termination
      or
      a Constructive Discharge, as hereafter defined in this Agreement, the Company
      will pay the Executive, or in the event of his death, his beneficiary or
      beneficiaries, 

    

    
      
        
        

      

      
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    8.1.i in
      a lump
      sum in cash within 30 days after the Date of Termination the aggregate of the
      following amounts:

    

    A.  the
      sum
      of (1) the Executive’s accrued Annual Base Salary and any accrued vacation
      pay through the Date of Termination, (2) the Executive’s business expenses
      that have not been reimbursed by the Company as of the Date of Termination
      that
      were incurred by the Executive prior to the Date of Termination in accordance
      with the applicable Company policy, and (3) the Executive’s Annual Bonus earned
      for the fiscal year immediately preceding the fiscal year in which the Date
      of
      Termination occurs if such bonus has not been paid as of the Date of Termination
      (“Accrued Compensation”); and

    

    B.  the
      product of (1) the average annual bonus paid to the Executive in respect of
      the
      three final years prior to the Date of Termination (“Reference Bonus”), and (2)
      a fraction, the numerator of which is the number of days from April 1 in the
      fiscal year in which the Date of Termination occurs through the Date of
      Termination, and the denominator of which is 365 (the “Pro Rata Bonus”);
      and

    

    8.1.ii the
      Company shall pay to the Executive as severance an amount equal to the product
      of (1) two and (2) the sum of (x) the Executive’s Annual Base Salary and (y) the
      Reference Bonus, such sum to be paid in 24 equal monthly installments in
      accordance with the Company’s normal payroll policies; and

    

    8.1.iii 
      any
      stock options and other equity incentives shall vest and become immediately
      exercisable, as the case may be and all vested stock options held by the
      Executive shall be exercisable for a period of one year, but not beyond the
      original expiration of their term (“Equity Benefits”)

    

    8.1.iv for
      two
      years after the Date of Termination, or until such time that the Executive
      becomes employed by another company that offers similar benefits and is eligible
      for such benefits, the Company shall continue to provide to the Executive and
      his eligible dependents the health, welfare and other benefits specified in
      Section IV.4.4 above as if the Executive remained an active employee of the
      Company. Subject to the provision of health benefits as provided below, such
      benefits will be provided to Executive only to the extent such benefits may
      be
      provided to Executive on a non-taxable basis. If the health benefits provided
      to
      the Executive are considered taxable benefits, such health benefits will be
      provided to Executive for the lesser of the applicable maximum coverage period
      under the COBRA health care continuation rules or two years. If the Company
      is
      unable to provide the coverage indicated above due to plan limitations, it
      will
      make two years of payments to the Executive equal to the premiums in effect
      at
      the time of termination. (“Welfare and Fringe Benefits”);

    

    8.2 If
      the
      Executive's employment terminates due to a Termination for Cause, as hereinafter
      defined, the Company will pay to the Executive the Accrued Compensation defined
      in Section VIII.1.i.A. No other payments will be made and the Company will
      not
      be obligated to provide any other benefits to or on behalf of the
      Executive.

    

    
      
        
        

      

      
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    8.3 If
      Executive resigns from employment with the Company or gives notice of
      non-renewal in accordance with Section III.3.1 hereof, the Company will pay
      the
      Accrued Compensation defined in Section VIII.1.i.A. No other payments will
      be
      made and the Company will not be obligated to provide any other benefits to
      or
      on behalf of the Executive except any benefits payable under the
      SERP.

    

    8.4 Except
      as
      otherwise expressly provided in this Agreement and except for any long-term
      incentive payments to which Executive is entitled, upon termination of the
      Executive's employment hereunder, the Company's obligation to make payments
      or
      provide benefits under this Agreement will cease.

    

    

    SECTION
      IX

    

    DEFINITIONS

    

    For
      this
      Agreement, the following terms have the following meanings:

    

    9.1 Termination
      for Cause means termination of the Executive's employment by the Company, by
      written notice to the Executive, specifying the event relied upon for such
      termination, due to (i.) the Participant's gross misconduct in respect of his
      duties for the Company or any conduct which has resulted or is likely to result
      in damage to the Company’s reputation, (ii.) conviction for a felony, (iii.)
      knowing and intentional failure to comply with applicable laws with respect
      to
      the execution of the Company's business operations, (iv.) theft, fraud,
      embezzlement, dishonesty or other conduct which has resulted or is likely to
      result in material economic damage to the Company or any of its Affiliates,
      or
      (v.) substantial dependence on or addiction to alcohol or use of drugs except
      those legally prescribed by and administered pursuant to the directions of
      a
      practitioner licensed to do so under the laws of the state or country of
      licensure.

    

    9.2 Constructive
      Discharge means termination of the Executive's employment by the Company due
      to
      a failure of the Company to fulfill its obligations under this Agreement in
      any
      material respect, including any material reduction of the Executive's Base
      Salary, failure to appoint or reappoint the Executive to the office of President
      and Chief Operating Officer or other material change by the Company in the
      functions, duties or responsibilities of the position which would reduce the
      ranking or level, responsibility, importance or scope of the position. This
      would also include any assignment or reassignment by the Company of the
      Executive to a place of employment that is a material change in the geographic
      location away from the Company's present headquarters or another location in
      Greenville, South Carolina. The Executive will provide the Company written
      notice which describes the circumstances being relied on for the Constructive
      Discharge with respect to the Agreement within ninety (90) days after the event
      giving rise to the notice. The Company will have thirty (30) days to remedy
      the
      situation prior to the Termination for Constructive Discharge.

    

    
      
        
        

      

      
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    9.3 Without
      Cause Termination means termination of the Executive's employment by the Company
      other than due to death or disability and other than Termination for Cause
      and
      includes, without limitation, termination of the Executive's employment by
      the
      Company's giving notice of non-renewal in accordance with Section III.3.1
      hereof.

    

    

    SECTION
      X

    

    OTHER
      DUTIES OF THE EXECUTIVE DURING AND

    

    AFTER
      THE PERIOD OF EMPLOYMENT

    

    During
      the Period of Employment and for 24 months thereafter:

    

    10.1 The
      Executive will, with reasonable notice, furnish information as may be in his
      possession and cooperate with the Company as may reasonably be requested in
      connection with any claim or legal actions in which the Company is or may become
      a party.

    

    10.2 The
      Executive recognizes and acknowledges that all information pertaining to the
      affairs, business, clients, customers or other relationships of the Company
      is
      confidential and is a unique and valuable asset of the Company. Access to and
      knowledge of this information is essential to the performance of the Executive's
      duties under this Agreement.

    

    10.3 The
      Executive will not, except to the extent reasonably necessary in performance
      of
      the duties under this Agreement or except as required by law, give to any
      person, firm, company, corporation or governmental agency any information
      concerning the affairs, business, clients, customers or other relationships
      of
      the Company. The Executive will not make use of this type of information for
      his
      own purposes or for the benefit of any person or organization other than the
      Company. The Executive will also use his best efforts to prevent the disclosure
      of this information by others.

    

    10.4 All
      records, memoranda, etc. relating to the business of the Company whether made
      by
      the Executive or otherwise coming into his possession are confidential and
      will
      remain the property of the Company and in the Company’s possession.

    

    10.5 The
      Executive will not use his status with the Company to obtain financial benefits,
      loans, goods or services from another organization on terms that would not
      be
      available to him in the absence of his relationship with the
      Company.

    

    10.6 The
      Executive will not make any statements or perform any acts intended to advance
      the interest of any existing or prospective competitors of the Company in any
      way that will injure the interest of the Company.

    

    10.7 The
      Executive, without prior express written approval by the Board, will not
      directly or indirectly own or hold any proprietary interest in, be employed
      by,
      or receive compensation from any party engaged in the same business as the
      Company. For the purposes of this Agreement, proprietary interest means legal
      or
      equitable ownership, whether through stock holdings or otherwise of an equity
      interest in any privately owned business firm or entity or ownership of more
      than five percent (5%) of any class of equity interest in a publicly-held
      corporation.

    

    
      
        
        

      

      
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    10.8 The
      Executive, without express written approval from the Board, will not solicit
      any
      members of the then current clients of the Company or then current employees
      of
      the Company or discuss with any employee of the Company information or operation
      of any business intended to compete with the Company. Executive agrees that
      any
      obligation of the Company to make any payments to the Executive under the terms
      of this Agreement will cease upon any violation of the preceding
      paragraphs.

    

    The
      parties desire that the provisions of Section X be enforced to the fullest
      extent permissible under the laws and public policies applied in the
      jurisdictions in which enforcement is sought, and agree that the Company may
      specifically enforce the terms hereof. If any portion of Section X is judged
      to
      be invalid or unenforceable, Section X will be amended to conform to the legal
      changes so that the remainder of the Agreement remains in effect.

    

    

    SECTION
      XI

    

    EFFECTS
      OF CHANGE IN CONTROL

    

    11.1 In
      the
      event there is a Change in Control (as hereafter defined) of the ownership
      of
      the Company, the Executive may at any time immediately resign upon written
      notice to the Company. In this event, the Company will pay the Accrued
      Compensation through the Date of Termination.

    

    11.2 In
      the
      event there is a Change in Control of the Company, and the Executive's
      employment is terminated within two years of such Change in Control due to
      a
      Without Cause termination or Constructive Discharge, the Company will pay the
      Executive:

    

    11.2.i In
      the
      form of a lump sum payment of Accrued Compensation, Pro Rata Bonus and two
      times
      the sum of Base Salary plus the Reference Bonus as defined in Section 8 - except
      that the Base Salary used for calculation of the payment will be the highest
      base salary in effect between the date immediately preceding the occurrence
      of
      the Change in Control and the Executive's Date of Termination. Such amount
      will
      be paid within thirty (30) days after the Executive's Date of
      Termination.

    

    11.2.ii 
      In
      addition, any stock options and other equity incentives shall vest and become
      immediately exercisable, as the case may be and all vested stock options held
      by
      the Executive shall be exercisable for a period of one year, but not beyond
      the
      original expiration of their term.

    

    11.2.iii 
      All
      other benefits described in Section 8.1.iv of this Agreement will be continued
      in accordance with Section 8.1.iv of this Agreement. 

    

    
      
        
        

      

      
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    It
      is
      understood that, in the event that Executive is entitled to severance payments
      under this Section 11.2, then such severance payments shall be in lieu of any
      severance payments to which the Executive would be entitled under Section 8
      hereof. 

    

    In
      the
      event there is a Change in Control of the Company and the Executive's employment
      is terminated as provided in this Section 11.2 after the first anniversary
      of
      such Change in Control, the compensation otherwise payable under this Section
      11.2.i shall not be paid in a lump sum but shall be paid in the manner specified
      in Section 8 of this Agreement. 

    

    11.3 It
      is the
      intention of the parties hereto that the severance payments and other
      compensation provided for herein are reasonable compensation for Executive's
      services to the Company and shall not constitute "excess parachute payments"
      within the meaning of Section 280G of the Code and any regulations there under.
      In the event that the Company's independent accountants acting as auditors
      for
      the Company on the date of a Change in Control determine that the payments
      provided for herein constitute "excess parachute payments," then the
      compensation payable hereunder shall be reduced to the point that such
      compensation shall not qualify as "excess parachute payments." 

    

    11.4 Change
      in
      Control means a "change in ownership," a "change in effective control," or
      a
“change in the ownership of substantial assets” of a corporation as described in
      Treasury Regulations Section 1.409A-3(g)(5) (which events are collectively
      referred to herein as “Change in Control events”).

    

    
      	 	
              11.4i.

            	
              A
                "change in ownership" of the Company occurs on the date that any
                one
                person, or more than one person acting as a group, acquires ownership
                of
                stock of the corporation that, together with stock held by such person
                or
                group, constitutes more that fifty percent (50%) of the total fair
                market
                value or total voting power of the Company. However, if any one person,
                or
                more than one person acting as a group, is considered to own more
                than
                fifty percent (50%) of the total fair market value or total voting
                power
                of the stock of the Company, the acquisition of additional stock
                by the
                same person or persons is not considered to cause a change in ownership
                of
                the Company (or to cause a change in the effective control of the
                Company
                (within the meaning of paragraph (b)
                below)).

            

    

    

    
      	 	
              11.4ii

            	
              If
                the Company has not undergone a change in ownership under paragraph
                (a)
                above, a "change in effective control" of the Company occurs on the
                date
                that either:

            

    

    

    
      	 	
              (a)

            	
              Any
                one person, or more than one person acting as a group, acquires (or
                has
                acquired during the 12-month period ending on the date of the most
                recent
                acquisition by such person or persons) ownership of stock of the
                Company
                possessing 30 percent or more of the total voting power of the stock
                of
                the Company; or

            

    

    

    
      	 	
              (b)

            	
              A
                majority of members of the Company’s Board is replaced during any
                12-monthperiod by directors whose appointment or election is not
                endorsed
                by a majority of the members of the Company’s Board prior to the date of
                the appointment or election.

            

    

     

    
      
        
        

      

      
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              11.4iii

            	
              A
                "change in the ownership of substantial assets" of the Company occurs
                on
                the date that any one person, or more than one person acting as a
                group,
                acquires (or has acquired during the 12-month period ending on the
                date of
                the most recent acquisition by such person or persons) assets from
                the
                Company that have a total gross fair market value equal to or more
                than
                forty percent (40%) of the total gross fair market value of all of
                the
                assets of the Company immediately prior to such acquisition or
                acquisitions. For this purpose, gross fair market value means the
                value of
                the assets of the Company, or the value of the assets being disposed
                of,
                determined without regard to any liabilities associated with such
                assets.

            

    

    

    

    SECTION
      XII

    

    WITHHOLDING
      TAXES

    

    The
      Company may directly or indirectly withhold from any payments under this
      Agreement all federal, state, city or other taxes that shall be required to
      be
      withheld pursuant to any law or governmental regulation.

    

    

    SECTION
      XIII

    

    EFFECT
      OF PRIOR AGREEMENTS

    

    This
      Agreement contains the entire understanding between the Company and the
      Executive with respect to the subject matter and supersedes any prior Employment
      Agreement between the Company and the Executive, except that this Agreement
      shall not affect or operate to reduce any benefits or compensation inuring
      to
      the Executive of a kind elsewhere provided and not expressly provided in this
      Agreement.

    

    

    SECTION
      XIV

    

    CONSOLIDATION,
      MERGER, OR SALE OF ASSETS

    

    Nothing
      in this Agreement shall preclude the Company from consolidating or merging
      into
      or with, or transferring all or substantially all of its assets to another
      corporation or person which assumes this Agreement and all obligations and
      undertakings of the Company hereunder. Upon such a Consolidation, Merger, or
      Sale of Assets the term "the Company" as used will mean the other corporation
      and this Agreement shall continue in full force and effect.

    

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    SECTION
      XV

    

    MODIFICATION

    

    This
      Agreement may not be modified or amended except in writing signed by both
      parties. No term or condition of this Agreement will be deemed to have been
      waived except in writing by the party charged with waiver. A waiver shall
      operate only as to the specific term or condition waived and will not constitute
      a waiver for the future or act on anything other than that which is specifically
      waived.

    

    

    SECTION
      XVI

    

    COMPLIANCE
      WITH SECTION 409A

    

    Notwithstanding
      any other provisions of this Agreement, to the extent applicable, this Agreement
      is intended to comply with Internal Revenue Code Section 409A and the
      regulations (or similar guidance) there under. To the extent any provision
      of
      this Agreement is contrary to or fails to address the requirements of Code
      Section 409A, this Agreement shall be construed and administered as necessary
      to
      comply with such requirements. If the Executive is considered a "specified
      employee" (as defined in Code Section 409A and related treasury regulations)
      at
      the time of any termination of employment under Section 8.1 or Section 11.2
      of
      this Agreement, a portion of the amount payable to Executive under Section
      8.1
      or Section 11.2 shall be delayed for six (6) months following Executive's Date
      of Termination to the extent necessary to comply with the requirements of Code
      Section 409A. Any amounts payable to Executive during such six (6) month-period
      that are delayed due to the limitation in the preceding sentence shall be paid
      to Executive in a lump sum on or after the first day of the seventh
      (7th)
      month
      following Executive's Date of Termination.

    

    

    SECTION
      XVII

    

    GOVERNING
      LAW

    

    This
      Agreement has been executed and delivered in the State of South Carolina and
      its
      validity, interpretation, performance and enforcement shall be governed by
      the
      laws of that state.

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Agreement to be executed as of May 21, 2007 by its
      duly
      authorized officers and Executive has hereunto set his hand.

     

    
      	 	WORLD ACCEPTANCE
              CORPORATION
	 	 	 
	 	 	 
	 	By: 	
              /s/
                James R. Gilreath

            
	 	 	
              
                
James
                R. Gilreath, Chairman of the Compensation
                Committee

            
	 	 	 
	 	 	 
	 	 	
              /s/
                Mark C. Roland          
                                            
                (SEAL)

              Mark
                C. Roland

            

    

    

     

    

    
      
        
        

      

      
        -14-SPECTRE
      GAMING, INC.

     

    2007
      STOCK INCENTIVE PLAN

    

     

    1.  Purpose.
      The
      purpose of this 2007 Stock Incentive Plan (the “Plan”)
      of
      Spectre Gaming, Inc. (the “Company”)
      is to
      increase shareholder value and to advance the interests of the Company by
      furnishing a variety of economic incentives (collectively, “Incentives”)
      designed to attract, retain and motivate employees and officers, certain key
      consultants, and directors of the Company. Incentives may consist of
      opportunities to purchase or receive shares of Company common stock or other
      incentive awards on terms determined under this Plan.

     

    2.  Administration.
      The
      Plan shall be administered by the board of directors of the Company or by a
      stock option or compensation committee of the board of directors
      (the “Committee”).
      If at
      any time there is no stock option or compensation committee, the term
“Committee,” as used herein, shall refer to the board of directors. The
      Committee, however denominated, shall consist of not less than two Company
      directors and shall be appointed from time to time by the board of directors.
      During any such time as the Company has a class of equity securities registered
      under Section 12 of the Securities Exchange Act of 1934, each member of the
      Committee shall be (i) a “non-employee
      director” within the meaning of Rule 16b-3 of the Securities Exchange Act
      of 1934,
      and
      (ii)
      an “outside director” within the meaning of Section 162(m) of the Internal
      Revenue Code of 1986, as amended (the “Code”),
      and
      the regulations promulgated thereunder. The Committee shall have complete
      authority to award Incentives under the Plan, to interpret the Plan, and to
      make
      any other determination that it believes necessary and advisable for the proper
      administration of the Plan. The Committee’s decisions on matters relating to the
      Plan shall be final and conclusive on the Company and its
      participants.

     

    3.  Eligible
      Participants.
      Officers and employees of the Company or its subsidiaries, members of the board
      of directors, and consultants or other independent contractors who provide
      services to the Company or its subsidiaries shall be eligible to receive
      Incentives under the Plan. Participants may be designated individually or by
      groups or categories (for example, by pay grade) as the Committee deems
      appropriate. Participation by officers of the Company or its subsidiaries and
      any performance objectives relating to such officers must be approved by the
      Committee.

     

    4.  Types
      of Incentives.
      Incentives under the Plan may be granted in any one or a combination of the
      following forms: (a) incentive stock options and non-statutory stock options;
      (b) stock appreciation rights (“SARs”);
      (c)
      stock awards; (d) restricted stock and restricted stock units; and
      (e) performance awards. Payment of Incentives may be in the form of cash,
      common stock or combinations thereof as the Committee shall determine, and
      with
      such other restrictions as it may impose.

     

    5.  Shares
      Subject to the Plan.

     

    5.1.  Number
      of Shares.
      Subject
      to adjustment as provided in Section 10.6, the number of shares of common stock
      that may be issued under the Plan shall not exceed 8,000,000 shares. Shares
      of
      common stock that are issued under the Plan or are subject to outstanding
      Incentives will be applied to reduce the maximum number of shares of common
      stock remaining available for issuance under the Plan. Any shares of common
      stock made subject to SARs granted under this Plan shall be counted in full
      against the above share limit regardless of the number of shares of common
      stock
      actually issued upon the exercise of such SARs. The number of shares of common
      stock subject to incentive stock options is subject to the foregoing share
      limit.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.2.  Cancellation.
      To the
      extent that cash in lieu of shares of common stock is delivered upon the
      exercise of an SAR pursuant to Section 7.5, the Company shall be deemed, for
      purposes of applying the limitation on the number of shares, to have issued
      the
      greater of the number of shares of common stock that it was entitled to issue
      upon such exercise or on the exercise of any related option. In the event that
      a
      stock option or SAR granted hereunder expires or is terminated or cancelled,
      unexercised, as to any shares of common stock, such shares may again be issued
      under the Plan either pursuant to stock options, SARs or otherwise. In the
      event
      that shares of common stock are issued as restricted stock or pursuant to a
      stock award and thereafter are forfeited or reacquired by the Company pursuant
      to rights reserved upon issuance thereof, such forfeited and reacquired shares
      may again be issued under the Plan, either as restricted stock, pursuant to
      stock awards or otherwise. The Committee may also determine to cancel, and
      agree
      to the cancellation of, stock options in order to make a participant eligible
      for the grant of a stock option at a lower price than the option to be
      cancelled.

     

    5.3.  Source
      of Common Stock.
      Common
      stock issued under the Plan in connection with stock options, SARs, performance
      shares, restricted stock or stock awards, may be authorized and unissued shares
      or shares of treasury stock (if permitted by applicable law), as designated
      by
      the Committee.

     

    6.  Stock
      Options.
      A stock
      option is a right to purchase shares of Company common stock from the Company.
      Each stock option granted by the Committee under this Plan shall be subject
      to
      the following terms and conditions:

     

    6.1.  Price.
      The
      option price per share shall be determined by the Committee, subject to
      adjustment under Section 10.6.

     

    6.2.  Number.
      The
      number of shares of common stock subject to a stock option shall be determined
      by the Committee, subject to adjustment as provided in Section 10.6. The number
      of shares of common stock subject to a stock option shall be reduced in the
      same
      proportion that the holder thereof exercises a SAR if any SAR is granted in
      conjunction with or related to the stock option. Notwithstanding the foregoing,
      no person shall receive grants of stock options under the Plan that exceed
      2,500,000 shares during any one fiscal year of the Company.

     

    6.3.  Duration
      and Time for Exercise.
      Subject
      to earlier termination as provided in Section 10.4 and to the terms of any
      applicable stock option agreement between the Company and a holder, the term
      of
      each stock option shall be determined by the Committee but shall not exceed
      ten
      years from the date of grant. Each stock option shall become exercisable at
      such
      time or times during its term as shall be determined by the Committee at the
      time of grant. The Committee may accelerate the exercisability of any stock
      option. Subject to the foregoing and with the approval of the Committee, all
      or
      any part of the shares of common stock with respect to which the right to
      purchase has accrued may be purchased by the Company at the time of such accrual
      or at any time or times thereafter during the term of the option.

     

    6.4.  Manner
      of Exercise.
      Subject
      to any other terms contained in an applicable stock option agreement, a stock
      option may be exercised, in whole or in part, by giving written notice to the
      Company, specifying the number of shares of common stock to be purchased and
      accompanied by the full purchase price for such shares. The option price shall
      be payable: (a) in United States dollars upon exercise of the option and
      may be paid by cash, uncertified or certified check or bank draft; (b) at
      the discretion of the Committee, by delivery of shares of common stock in
      payment of all or any part of the option price, which shares shall be valued
      for
      this purpose at the Fair Market Value (as defined in Section 10.13) on the
      date
      such option is exercised; or (c) at the discretion of the Committee, by
      instructing the Company to withhold from the shares of common stock issuable
      upon exercise of the stock option shares of common stock in payment of all
      or
      any part of the exercise price and/or any related withholding tax obligations,
      which shares shall be valued for this purpose at the Fair Market Value or in
      such other manner as may be authorized from time to time by the Committee.
      The
      shares of common stock delivered by the participant pursuant to clause (b)
      of
      this Section 6.4 must have been held by the participant for a period of not
      less
      than six months prior to the exercise of the option, unless otherwise determined
      by the Committee. Prior to the issuance of shares of common stock upon the
      exercise of a stock option, a participant shall have no rights as a
      shareholder.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    6.5.  Incentive
      Stock Options.
      Notwithstanding anything in the Plan to the contrary, the following additional
      provisions shall apply to the grant of stock options which are intended to
      qualify as incentive stock options (as such term is defined in Section 422
      of
      the Code):

     

    (a)  The
      aggregate Fair Market Value (determined as of the time the option is granted)
      of
      the shares of common stock with respect to which incentive stock options are
      exercisable for the first time by any participant during any calendar year
      (under all of the Company’s plans) shall not exceed $100,000. The determination
      will be made by taking incentive stock options into account in the order in
      which they were granted. If such excess only applies to a portion of an
      incentive stock option, the Committee, in its discretion, will designate which
      shares will be treated as shares to be acquired upon exercise of an incentive
      stock option.

     

    (b)  Any
      incentive stock option certificate or agreement authorized under the Plan shall
      contain such other provisions as the Committee shall deem advisable, but shall
      in all events be consistent with and contain all provisions required in order
      to
      qualify the options as incentive stock options.

     

    (c)  All
      incentive stock options must be granted within ten years from the earlier of
      the
      date on which this Plan was adopted by the board of directors or the date this
      Plan was approved by the Company’s shareholders.

     

    (d)  Subject
      to paragraph (f) below, unless sooner exercised, all incentive stock options
      shall expire no later than ten years after the date of grant.

     

    (e)  Subject
      to paragraph (f) below, the option price for incentive stock options shall
      be
      not less than the Fair Market Value of the common stock subject to the option
      on
      the date of grant.

     

    (f)  If
      incentive stock options are granted to any participant who, at the time such
      option is granted, would own (within the meaning of Code Section 422) stock
      possessing more than 10% of the total combined voting power of all classes
      of
      stock of the employer corporation or of its parent or subsidiary corporation,
      (i) the option price for such incentive stock options shall be not less than
      110% of the Fair Market Value of the common stock subject to the option on
      the
      date of grant and (ii) such incentive stock options shall expire no later than
      five years after the date of grant.

     

    7.  Stock
      Appreciation Rights.
      An SAR
      is a right to receive, without payment to the Company, a number of shares of
      common stock, cash or any combination thereof (provided that, prior to the
      granting of any grant of an SAR entitling a participant to a cash payment,
      the
      Committee shall confer with legal counsel), the amount of which is determined
      pursuant to the formula set forth in Section 7.4 or 7.5, as applicable. An
      SAR
      may be granted (a) with respect to any stock option granted under this Plan,
      either concurrently with the grant of such stock option or at such later time
      as
      determined by the Committee (as to all or any portion of the shares of common
      stock subject to the stock option), or (b) alone, without reference to any
      related stock option. Each SAR granted by the Committee under this Plan shall
      be
      subject to the following terms and conditions:

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    7.1.  Number.
      Each
      SAR granted to any participant shall relate to such number of shares of common
      stock as shall be determined by the Committee, subject to adjustment as provided
      in Section 10.6. In the case of an SAR granted with respect to a stock option,
      the number of shares of common stock to which the SAR pertains shall be reduced
      in the same proportion that the holder of the option exercises the related
      stock
      option.

     

    7.2.  Duration.
      Subject
      to earlier termination as provided in Section 10.4, the term of each SAR shall
      be determined by the Committee but shall not exceed ten years and one day from
      the date of grant. Unless otherwise provided by the Committee, each SAR shall
      become exercisable at such time or times, to such extent and upon such
      conditions as the stock option, if any, to which it relates is exercisable.
      The
      Committee may in its discretion accelerate the exercisability of any
      SAR.

     

    7.3.  Exercise.
      An SAR
      may be exercised, in whole or in part, by giving written notice to the Company,
      specifying the number of SARs which the holder wishes to exercise. Upon receipt
      of such written notice, the Company shall, within 90 days thereafter, deliver
      to
      the exercising holder certificates for the shares of common stock or cash or
      both, as determined by the Committee, to which the holder is entitled pursuant
      to Section 7.4 or 7.5.

     

    7.4.  Payment
      in Stock.
      Subject
      to the right of the Committee to deliver cash in lieu of shares of common stock,
      the number of shares of common stock which shall be issuable upon the exercise
      of an SAR shall be determined by dividing:

     

    (a)  the
      number of shares of common stock as to which the SAR is exercised multiplied
      by
      the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares
      of common stock subject to the SAR on the exercise date exceeds (1) in the
      case
      of an SAR related to a stock option, the purchase price of the shares of common
      stock under the stock option or (2) in the case of an SAR granted alone, without
      reference to a related stock option, an amount which shall be determined by
      the
      Committee at the time of grant, subject to adjustment under Section 10.6);
      by

     

    (b)  the
      Fair
      Market Value of a share of common stock on the exercise date.

     

    No
      fractional shares of common stock shall be issued upon the exercise of an SAR;
      instead, the holder of the SAR shall be entitled to receive a cash adjustment
      equal to the same fraction of the Fair Market Value of a share of common stock
      on the exercise date or to purchase the portion necessary to make a whole share
      at its Fair Market Value on the date of exercise.

     

    7.5.  Payment
      in Cash.
      Subject
      to the limitation set forth above in the first paragraph of this Section 7,
      in
      lieu of issuing shares of common stock upon the exercise of an SAR, the
      Committee may elect to pay the holder of the SAR cash equal to the Fair Market
      Value on the exercise date of any or all of the shares which would otherwise
      be
      issuable.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    8.  Stock
      Awards, Restricted Stock and Restricted Stock Units.
      A stock
      award consists of the transfer or issuance by the Company to a participant
      of
      shares of common stock, without other payment therefor, as additional
      compensation for services to the Company. A share of restricted stock consists
      of shares of common stock which are sold, transferred or issued by the Company
      to a participant at a price, if any, determined by the Committee and subject
      to
      restrictions on their sale or other transfer by the participant. A restricted
      stock unit is a right to receive one share of common stock at a future date
      that
      has been granted subject to terms and conditions, including a risk of
      forfeiture, established by the Committee. The issuance or transfer of common
      stock pursuant to stock awards and the transfer and sale of restricted stock
      shall be subject to the following terms and conditions:

     

    8.1.  Number
      of Shares.
      The
      number of shares to be issued, transferred or sold by the Company to a
      participant pursuant to a stock award or restricted stock units or as restricted
      stock shall be determined by the Committee.

     

    8.2.  Sale
      Price.
      The
      Committee shall determine the price, if any, at which shares of restricted
      stock
      shall be sold to a participant, which may vary from time to time and among
      participants and which may be below the Fair Market Value of such shares of
      common stock at the date of sale.

     

    8.3.  Restrictions.
      All
      shares of restricted stock issued, transferred or sold hereunder shall be
      subject to such restrictions as the Committee may determine, including without
      limitation any or all of the following:

     

    (a)  a
      prohibition against the sale, transfer, pledge or other encumbrance of the
      shares of restricted stock, such prohibition to lapse at such time or times
      (or
      upon the satisfaction of other kinds of criteria) as the Committee shall
      determine (whether in annual or more frequent installments, at the time of
      the
      death, disability or retirement of the holder of such shares, or
      otherwise);

     

    (b)  a
      requirement that the holder of shares of restricted stock forfeit, or (in the
      case of shares sold to a participant) resell back to the Company at his or
      her
      cost, all or a part of such shares in the event of termination of his or her
      employment or consulting engagement during any period in which such shares
      are
      subject to restrictions; or

     

    (c)  such
      other conditions or restrictions as the Committee may deem
      advisable.

     

    8.4.  Escrow
      and Other Arrangements.
      In
      order to enforce the restrictions imposed by the Committee pursuant to Section
      8.3, the participant receiving restricted stock shall enter into an agreement
      with the Company setting forth the conditions of the grant. Shares of restricted
      stock may either be registered in the name of the participant and deposited,
      together with a stock power endorsed in blank, with the Company, or may be
      uncertificated. Each certificate, if any, representing shares of restricted
      stock shall bear a legend in substantially the following form:

     

    The
      transferability of this certificate and the shares of common stock represented
      by it are subject to the terms and conditions (including conditions of
      forfeiture) contained in the 2006 Stock Incentive Plan of Spectre Gaming, Inc.,
      and an agreement entered into between the registered owner and that company.
      Copies of the above-referenced Stock Incentive Plan and agreement are on file
      with the Company.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    8.5.  End
      of
      Restrictions.
      Subject
      to Section 10.5, at the end of any time period during which (or upon the
      satisfaction of criteria with respect to which) shares of restricted stock
      are
      subject to forfeiture and restrictions on transfer, such shares will be
      delivered free of all restrictions to the participant or to the participant’s
      legal representative, beneficiary or heir.

     

    8.6.  Rights
      of Holders of Restricted Stock.
      Subject
      to the terms and conditions of the Plan, each participant receiving restricted
      stock shall have all the rights of a shareholder with respect to shares of
      stock
      during any period in which such shares are subject to forfeiture and
      restrictions on transfer, including without limitation, the right to vote such
      shares. Dividends paid in cash or property other than common stock with respect
      to shares of restricted stock shall be paid to the participant
      currently.

     

    8.7.  Rights
      of Holders of Restricted Stock Units.
      Participants who receive restricted stock units shall have no rights as
      shareholders with respect to such restricted stock units until such time as
      share certificates for common stock are issued to the participants.

     

    9.  Performance
      Awards.
      A
      performance award is a right to either a number of shares of common stock
      (“performance shares”) or a cash amount (“performance units”) determined (in
      either case) in accordance with this Section 9 based on the extent to which
      the
      applicable performance goals are achieved. A performance award shall be of
      no
      value to a participant unless and until earned in accordance with this Section
      9.

     

    9.1.  Establishment
      of Performance Goals.
      Performance goals applicable to a performance award shall be established by
      the
      Committee in its sole discretion on or before the date of grant and not more
      than a reasonable period of time after the beginning of the relevant performance
      period. The Committee, in its sole discretion, may modify the performance goals
      if it determines that circumstances have changed and modification is required
      to
      reflect the original intent of the performance goals; provided,
      however,
      that no
      such change or modification may be made to the extent it increases the amount
      of
      compensation payable to any participant who is a “covered employee” within the
      meaning of Code Section 162(m).

     

    9.2.  Levels
      of Performance Required to Earn Performance Awards.
      At or
      about the same time that performance goals are established for a specific
      period, the Committee shall in its absolute discretion establish the percentage
      of the performance awards granted for such performance period which shall be
      earned by the participant for various levels of performance measured in relation
      to achievement of performance goals for such performance period.

     

    9.3.  Other
      Restrictions.
      The
      Committee shall determine the terms and conditions applicable to any performance
      award, which may include restrictions on the delivery of common stock payable
      in
      connection with the performance award and restrictions that could result in
      the
      future forfeiture of all or part of any common stock earned. The Committee
      may
      provide that shares of common stock issued in connection with a performance
      award be held in escrow and/or legended.

     

    9.4.  Notification
      to Participants.
      Promptly after the Committee has established or modified the performance goals
      with respect to a performance award, the participant shall be provided with
      written notice of the performance goals so established or modified.

     

    9.5.  Measurement
      of Performance Against Performance Goals.
      The
      Committee shall, as soon as practicable after the close of a performance period,
      determine: (a) the extent to which the performance goals for such performance
      period have been achieved; and (b) the percentage of the performance awards
      earned as a result. These determinations shall be absolute and final as to
      the
      facts and conclusions therein made and be binding on all parties. Promptly
      after
      the Committee has made the foregoing determination, each participant who has
      earned performance awards shall be notified, in writing thereof. For all
      purposes of this Plan, notice shall be deemed to have been given the date action
      is taken by the Committee making the determination. Participants may not sell,
      transfer, pledge, exchange, hypothecate or otherwise dispose of all or any
      portion of their performance awards during the performance period, except that
      performance awards may be transferable by assignment by a participant to the
      extent provided in the applicable performance award agreement.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    9.6.  Treatment
      of Performance Awards Earned.
      Upon
      the Committee’s determination that a percentage of any performance awards have
      been earned for a performance period, participants to whom such earned
      performance awards have been granted and who have been (or were) in the employ
      of the Company or a subsidiary thereof continuously from the date of grant,
      subject to the exceptions set forth in Section 9.9, shall be entitled,
      subject to the other conditions of this Plan, to payment in accordance with
      the
      terms and conditions of their performance awards. Such terms and conditions
      may
      permit or require that any applicable tax withholding be deducted from the
      amount payable. Performance awards shall under no circumstances become earned
      or
      have any value whatsoever for any participant who is not in the employ of the
      Company or its subsidiaries continuously during the entire performance period
      for which such performance award was granted, except as provided in
      Section 9.9.

     

    9.7.  Distribution.
      Distributions payable pursuant to Section 9.6 above shall be made as soon
      as practicable after the Committee determines the performance awards have been
      earned unless the provisions of Section 9.8 below are applicable to a
      participant.

     

    9.8.  Deferral
      of Receipt of Performance Award Distributions.
      With
      the consent of the Committee, a participant who has been granted a performance
      award may by compliance with the then applicable procedures under the Plan
      irrevocably elect in writing to defer receipt of all or any part of any
      distribution associated with that performance award. The terms and conditions
      of
      any such deferral, including but not limited to, the period of time for, and
      form of, election; the manner and method of payout; the plan and form in which
      the deferred amount shall be held; the interest equivalent or other payment
      that
      shall accrue pending its payout; and the use and form of dividend equivalents
      in
      respect of stock-based units resulting from such deferral, shall be as
      determined by the Committee. The Committee may, at any time and from time to
      time, but prospectively only except as hereinafter provided, amend, modify,
      change, suspend or cancel any and all of the rights, procedures, mechanics
      and
      timing parameters relating to such deferrals. In addition, the Committee may,
      in
      its sole discretion, accelerate the payout of such deferrals (and any earnings
      thereon), or any portion thereof, either in a lump sum or in a series of
      payments, but under the following conditions only:

     

    (a)  the
      federal tax statutes, regulations or interpretations are amended, modified,
      or
      otherwise changed or affected in such a manner as to adversely alter or modify
      the tax effect of such deferrals; or

     

    (b)  the
      participant suffers or incurs an event that would qualify for a “withdrawal” of
      contributions that have not been accumulated for two years without adverse
      consequences on the tax status of a qualified profit-sharing or stock bonus
      plan
      under the federal tax laws applicable from time to time to such types of
      plans.

     

    
      
         

      

      
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    9.9.  Non-Disqualifying
      Termination of Employment.
      Except
      as otherwise contemplated by an Incentive agreement, the only exceptions to
      the
      requirement of continuous employment during a performance period for performance
      award distribution are termination of a participant’s employment by reason of
      death (in which event the performance award may be transferable by will or
      the
      laws of descent and distribution only to such participant's beneficiary
      designated to receive the performance award or to the participant's applicable
      legal representatives, heirs or legatees), total and permanent disability,
      with
      the consent of the Committee, normal or late retirement or early retirement,
      with the consent of the Committee, or transfer of an executive in a spin-off,
      with the consent of the Committee, occurring during the performance period
      applicable to the subject performance award. In such instance a distribution
      of
      the performance award shall be made, as of the end of the performance period,
      and 100% of the total performance award that would have been earned during
      the
      performance period shall be earned and paid out; provided,
      however,
      in a
      spin-off situation the Committee may set additional conditions, such as, without
      limiting the generality of the foregoing, continuous employment with the
      spin-off entity. If a participant's termination of employment does not meet
      the
      criteria set forth above, but the participant had at least 15 years of
      employment with the Company or a subsidiary or any combination thereof, the
      Committee may allow distribution of up to 100% of the total performance award
      for the performance period(s) in which the termination of employment occurred,
      subject to any conditions that the Committee shall determine.

     

    10.  General
      Provisions.

     

    10.1.  Effective
      Date.
      The
      Plan will become effective upon its approval by the board of directors. Unless
      approved by the shareholders within one year after the date of the Plan’s
      adoption by the board of directors, the Plan shall not be effective for the
      purpose of granting incentive stock options.

     

    10.2.  Duration.
      The
      Plan shall remain in effect until all Incentives granted under the Plan have
      either been satisfied by the issuance of shares of common stock or the payment
      of cash or been terminated under the terms of the Plan and all restrictions
      imposed on shares of common stock in connection with their issuance under the
      Plan have lapsed. No Incentives may be granted under the Plan after the tenth
      anniversary of the date the Plan is approved by the shareholders of the
      Company.

     

    10.3.  Limited
      Transferability of Incentives.
      No
      Incentive may be transferred, pledged or assigned by the holder thereof (except,
      in the event of the holder’s death, by will or the laws of descent and
      distribution to the limited extent provided in the Plan or the Incentive);
      and
      the Company shall not be required to recognize any attempted assignment of
      such
      rights by any participant. Notwithstanding the preceding sentence, the following
      transfers and exercises of stock options are permitted under this
      Plan:

     

    (a)  stock
      options may be transferred by the holder thereof to Employee’s spouse, children,
      grandchildren or parents (collectively, the “Family
      Members”),
      to
      trusts for the benefit of Family Members, or to partnerships or limited
      liability companies in which Family Members are the only partners or
      shareholders; or

     

    (b)  any
      Incentives held by a participant may be assigned by court order to the
      participant’s former spouse in connection with a dissolution of their marriage,
      but only if the Committee determines, in its sole discretion, that the order
      satisfies such requirements of a “qualified domestic relations order” as are set
      forth in paragraphs (1) through (3) of Section 414(p) of the Code, as if the
      Plan were a plan described in Code Section 401(a)(13). The federal income and
      payroll taxation of any Incentives assigned as provided in the preceding
      sentence shall be governed by the Code, Revenue Rulings 2002-22 and 2004-60
      (as
      applicable), or any other applicable guidance published by the Internal Revenue
      Service or the Department of the Treasury.

     

    
      
         

      

      
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    (c)  During
      a
      participant’s lifetime, a stock option or SAR may be exercised only by him or
      her, by his or her guardian or legal representative or by any of the transferees
      permitted by the preceding two paragraphs (a) and (b).

     

    10.4.  Effect
      of Termination or Death.
      In the
      event that a participant ceases to be an employee of or consultant to the
      Company for any reason, including death or disability, any Incentives may be
      exercised or shall expire at such times as may be determined by the Committee
      or
      as may be set out in any applicable stock option agreement.

     

    10.5.  Additional
      Condition.
      Notwithstanding anything in this Plan to the contrary: (a) the Company may,
      if
      it shall determine it necessary or desirable for any reason, at the time of
      award of any Incentive or the issuance of any shares of common stock pursuant
      to
      any Incentive, require the recipient of the Incentive, as a condition to the
      receipt thereof or to the receipt of shares of common stock issued pursuant
      thereto, to deliver to the Company a written representation of present intention
      to acquire the Incentive or the shares of common stock issued pursuant thereto
      for his or her own account for investment and not for distribution; and (b)
      if
      at any time the Company further determines, in its sole discretion, that the
      listing, registration or qualification (or any updating of any such document)
      of
      any Incentive or the shares of common stock issuable pursuant thereto is
      necessary on any securities exchange or under any federal or state securities
      or
      blue sky law, or that the consent or approval of any governmental regulatory
      body is necessary or desirable as a condition of, or in connection with the
      award of any Incentive, the issuance of shares of common stock pursuant thereto,
      or the removal of any restrictions imposed on such shares, such Incentive shall
      not be awarded or such shares of common stock shall not be issued or such
      restrictions shall not be removed, as the case may be, in whole or in part,
      unless such listing, registration, qualification, consent or approval shall
      have
      been effected or obtained free of any conditions not acceptable to the
      Company.

     

    10.6.  Adjustment.
      In the
      event of any recapitalization, stock dividend, stock split, combination of
      shares or other change in the common stock, the number of shares of common
      stock
      then subject to the Plan, including shares subject to restrictions, options
      or
      achievements of performance shares, shall be adjusted in proportion to the
      change in outstanding shares of common stock. In the event of any such
      adjustments, the purchase price of any option, the performance objectives of
      any
      Incentive, and the shares of common stock issuable pursuant to any Incentive
      shall be adjusted as and to the extent appropriate, in the discretion of the
      Committee, to provide participants with the same relative rights before and
      after such adjustment.

     

    10.7.  Incentive
      Plans and Agreements.
      Except
      in the case of stock awards, the terms of each Incentive shall be stated in
      a
      plan or agreement approved by the Committee. The Committee may also determine
      to
      enter into agreements with holders of options to reclassify or convert certain
      outstanding options, within the terms of the Plan, as incentive stock options
      or
      as non-statutory stock options, and in order to eliminate SARs, with respect
      to
      all or part of such options and any other previously issued
      options.

     

    10.8.  Withholding.

     

    (a)  The
      Company shall have the right to withhold from any payments made under the Plan
      or to collect as a condition of payment, any taxes required by law to be
      withheld. At any time when a participant is required to pay to the Company
      an
      amount required to be withheld under applicable income tax laws in connection
      with a distribution of common stock or upon exercise of an option or SAR, the
      participant may satisfy this obligation in whole or in part by electing (the
      “Election”)
      to
      have the Company withhold from the distribution shares of common stock having
      a
      value up to the minimum amount of withholding taxes required to be collected
      on
      the transaction. The value of the shares to be withheld shall be based on the
      Fair Market Value of the common stock on the date that the amount of tax to
      be
      withheld shall be determined (the “Tax
      Date”).

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (b)  Each
      Election must be made prior to the Tax Date. The Committee may disapprove of
      any
      Election, may suspend or terminate the right to make Elections, or may provide
      with respect to any Incentive that the right to make Elections shall not apply
      to such Incentive. An Election is irrevocable.

     

    10.9.  No
      Continued Employment, Engagement or Right to Corporate Assets.
      No
      participant under the Plan shall have any right, because of his or her
      participation, to continue in the employ of the Company for any period of time
      or to any right to continue his or her present or any other rate of
      compensation. Nothing contained in the Plan shall be construed as giving an
      employee, a consultant, such persons’ beneficiaries or any other person any
      equity or interests of any kind in the assets of the Company or creating a
      trust
      of any kind or a fiduciary relationship of any kind between the Company and
      any
      such person.

     

    10.10.  Deferral
      Permitted.
      Payment
      of cash or distribution of any shares of common stock to which a participant
      is
      entitled under any Incentive shall be made as provided in the Incentive. Payment
      may be deferred at the option of the participant if provided in the
      Incentive.

     

    10.11.  Amendment
      of the Plan.
      The
      board of directors may amend or discontinue the Plan at any time. Nevertheless,
      no such amendment or discontinuance shall adversely change or impair an
      outstanding Incentives, without the consent of the recipient-holders of such
      Incentives. Further, no such amendment shall, without approval of the Company’s
      shareholders, (a) increase the maximum number of shares of common stock which
      may be issued to all participants under the Plan, (b) change or expand the
      types
      of Incentives that may be granted under the Plan, (c) change the class of
      persons eligible to receive Incentives under the Plan, or (d) materially
      increase the benefits accruing to participants under the Plan.

     

    10.12.  Sale,
      Merger, Exchange or Liquidation.
      Unless
      otherwise provided in an agreement for an Incentive, in the event of an
      acquisition of the Company through the sale of substantially all of the
      Company’s assets or through a merger, exchange, reorganization or liquidation of
      the Company or a similar event as determined by the Committee (collectively
      a “transaction”), the Committee shall be authorized, in its sole
      discretion, to take any and all action it deems equitable under the
      circumstances, including but not limited to any one or more of the
      following:

     

    (a)  providing
      that the Plan and all Incentives shall terminate and the holders of (i) all
      outstanding vested options shall receive, in lieu of any shares of common stock
      they would be entitled to receive under such options, such stock, securities
      or
      assets, including cash, as would have been paid to such participants if their
      options had been exercised and such participant had received common stock
      immediately prior to such transaction (with appropriate adjustment for the
      exercise price, if any), (ii) performance shares and/or SARs that entitle
      the participant to receive common stock shall receive, in lieu of any shares
      of
      common stock each participant was entitled to receive as of the date of the
      transaction pursuant to the terms of such Incentive, if any, such stock,
      securities or assets, including cash, as would have been paid to such
      participant if such common stock had been issued to and held by the participant
      immediately prior to such transaction, and (iii) any Incentive under this Plan
      which does not entitle the participant to receive common stock shall be
      equitably treated as determined by the Committee;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (b)  providing
      that participants holding outstanding vested common-stock-based Incentives
      shall
      receive, with respect to each share of common stock issuable pursuant to such
      Incentives as of the effective date of any such transaction, at the
      determination of the Committee, cash, securities or other property, or any
      combination thereof, in an amount equal to the excess, if any, of the Fair
      Market Value of such common stock on a date within ten days prior to the
      effective date of such transaction over the option price or other amount owed
      by
      a participant, if any, and that such Incentives shall be cancelled, including
      the cancellation without consideration of all options that have an exercise
      price below the per share value of the consideration received by the Company
      in
      the transaction;

     

    (c)  providing
      that the Plan (or replacement plan) shall continue with respect to Incentives
      not cancelled or terminated as of the effective date of such transaction and
      provide to participants holding such Incentives the right to earn their
      respective Incentives on a substantially equivalent basis (taking into account
      the transaction and the number of shares or other equity issued by such
      successor entity) with respect to the equity of the entity succeeding the
      Company by reason of such transaction; and/or

     

    (d)  providing
      that all unvested, unearned or restricted Incentives, including but not limited
      to restricted stock for which restrictions have not lapsed as of the effective
      date of such transaction, shall be void and deemed terminated, or, in the
      alternative, for the acceleration or waiver of any vesting, earning or
      restrictions on any Incentive.

     

    The
      board
      of directors may restrict the rights of participants or the applicability of
      this Section 10.12 to the extent necessary to comply with Section 16(b) of
      the Securities Exchange Act of 1934, the Internal Revenue Code or any other
      applicable law or regulation. The grant of an Incentive award pursuant to the
      Plan shall not limit in any way the right or power of the Company to make
      adjustments, reclassifications, reorganizations or changes of its capital or
      business structure or to merge, exchange or consolidate or to dissolve,
      liquidate, sell or transfer all or any part of its business or
      assets.

     

    10.13.  Definition
      of Fair Market Value.
      For
      purposes of this Plan, the “Fair
      Market Value”
of
      a
      share of common stock at a specified date shall, unless otherwise expressly
      provided in this Plan, be the amount which the Committee or the board of
      directors determines in good faith to be 100% of the fair market value of such
      a
      share as of the date in question; provided,
      however,
      that
      notwithstanding the foregoing, if such shares are listed on a U.S. securities
      exchange or are quoted on the Nasdaq National Market or Nasdaq Small-Cap Market
      (“Nasdaq”)
      or
      another listing service administered by Nasdaq (e.g., the over-the-counter
      bulletin board), then Fair Market Value shall be determined by reference to
      the
      last sale price of a share of common stock on such U.S. securities exchange
      or
      Nasdaq on the applicable date (or the closing bid price, in the case of another
      listing service). If such U.S. securities exchange or Nasdaq is closed for
      trading on such date, or if the common stock does not trade on such date, then
      the last sale price used shall be the one on the date the common stock last
      traded on such U.S. securities exchange or Nasdaq (or the closing bid price,
      in
      the case of another listing service).

     

    
      
         

      

      
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    10.14.  Compliance
      with Code Section 409A.
      No
      Incentive shall provide for deferral of compensation that does not comply with
      Section 409A of the Code unless the Committee, at the time of grant,
      specifically provides that the Incentive is not intended to comply with Section
      409A of the Code.

     

    10.15.  Meaning
      of “the Company”.
      The
      term “Company” shall be understood to mean Spectre Gaming, Inc., a Minnesota
      corporation, and any successor entity to that corporation.

     

     

     

     

     

     

    
      
         

      

      
        12

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