Document:

exv10w2

 

Exhibit 10.2

December 31, 2005

Mr. Anthony F. Bova

President and Chief Executive Officer

Atlantis Plastics, Inc.

1870 The Exchange, Suite 200

Atlanta, Georgia 30339

Dear Tony:

     This letter agreement amends and restates in its entirety that certain letter agreement (the
“Old Change in Control Agreement”), dated December 31, 2002, between you and Atlantis
Plastics, Inc., a Delaware corporation. From and after the date first listed above (December 31,
2005), all of your rights and Atlantis’ obligations set forth in the Old Change in Control
Agreement, or elsewhere, are hereby canceled and this letter agreement sets forth all of your
rights with respect to the subject matter hereof.

     Atlantis considers it essential to the best interests of its stockholders to foster the
continuous employment of key management personnel. In this connection, our Board of Directors (the
“Board”) recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control of the Corporation may exist and that this possibility, and the
uncertainty and questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Corporation and its stockholders. The
Board has determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Corporation’s management, including you, to
their assigned duties without the distractions which may arise from the possibility of a change in
control of the Corporation. In order to induce you to remain in the employ of the Corporation, you
shall receive the severance benefits set forth in this Agreement in the event your employment with
the Corporation is terminated under the circumstances described below in connection with a Change
in Control.

     18. Interpretation of this Agreement.

           (a) Terms Defined. As used herein, the following terms when used in this Agreement
have the meanings set forth below:

           “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Exchange Act.

           “Agreement” shall have the meaning given to it in the preface above.

           “Applicable Rate” shall have the meaning given to it §5(d) below.

           “Atlantis” or “Corporation” means Atlantis Plastics, Inc., a Delaware
corporation, and any successor to its business and/or assets as set forth in §6(a) below which
assumes and agrees to perform this Agreement by operation of law, or otherwise and, as the context

 

 

may require, with respect to any provision of this Agreement other than §3 below, includes any
direct or indirect subsidiary of Atlantis Plastics, Inc.

               “Board” shall have the meaning given to it in the preface above.

               “Cause” shall have the meaning given to it §4(c) below.

               “Change in Control” shall have the meaning given to it §3 below.

               “Code” means the Internal Revenue Code of 1986, as amended.

               “Continuing Directors” shall have the meaning given to it in §3 below.

               “Date of Termination” shall have the meaning given to it §4(f) below.

               “Disability” shall have the meaning given to it §4(b) below.

               “Employment Agreement” means the Executive Employment Agreement, dated as of the date
hereof, as heretofore amended and as the same may hereafter be supplemented, amended or amended and
restated at any time prior to the occurrence of a Change in Control.

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

               “Excise Tax” shall have the meaning given to it §5(d) below.

               “Good Reason” shall have the meaning given to it §4(d) below.

               “Gross-Up Payment” shall have the meaning given to it §5(d) below.

               “Notice of Termination” shall have the meaning given to it §4(e) below.

               “Person” has the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act.

               “Retirement Plans” means the Atlantis Plastics, Inc. 401(k) Plan and any supplementary
executive retirement plans of the Corporation you may be covered under, or any successor plans.

               “Securities Act” means the Securities Act of 1933, as amended.

               “Severance Payments” shall have the meaning given to it §5(d) below.

               “Trivest” means Trivest, Inc., a Delaware corporation.

               “Welfare Plan Benefits” shall have the meaning given to it §5(c) below.

          (b) Interpretation. The words “herein,” “hereunder” and other words of similar import refer to this Agreement
as a whole, as the same from time to time may be amended or supplemented and not any particular
section, paragraph, subparagraph or clause contained in this Agreement. Wherever from the context
it appears appropriate, each term stated in either the

 

 

singular or plural shall include the
singular and the plural, and pronouns stated in masculine, feminine or neuter gender shall include
the masculine, feminine and the neuter.

     19. Term. This Agreement shall continue in effect through December 31, 2008; provided,
however, that the term of this Agreement may be extended for one additional year if, not later than
October 1 of the preceding year, we shall notify you that we so wish to extend this Agreement; and
provided, further, that if a Change in Control occurs during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of not less than one year beyond
the last day of the month in which the Change in Control occurred.

     20. Change in Control. NO BENEFITS WILL BE PAYABLE UNDER THIS AGREEMENT UNLESS A
CHANGE IN CONTROL OCCURS. For purposes of this Agreement, a “Change in Control” shall be
deemed to have occurred if: (i) any Person (other than the Corporation, any trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation, or any affiliate of
Trivest) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing more than 50% of the combined
voting power of the Corporation’s then outstanding securities eligible to vote, or (ii) during any
period of two consecutive years (not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with the Corporation to
effect a transaction described in clause (i), (iii) or (iv) of this §3) whose election by the Board
or nomination for election by the Corporation’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so approved (the
“Continuing Directors”), cease for any reason to constitute at least a majority of the
Board, (iii) the stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, other than a merger or consolidation which would result in
the voting securities of the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which no Person acquires more than 50% of the combined
voting power of the Corporation’s then outstanding securities shall not constitute a Change in
Control, or (iv) the stockholders of the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition by the Corporation of all or substantially
all of the Corporation’s assets (or any transaction having a similar effect).

     21. Termination of Employment Following Change in Control.

          (a) General. In the event your employment with the Corporation is terminated within
90 days prior to the occurrence of a Change in Control or subsequent to a Change in Control, you
will be entitled to such benefits provided in §5 below as may be applicable.

          (b) Disability. If, as a result of your incapacity due to physical or mental illness,
you are absent from the full-time performance of your duties with the Corporation for 90
consecutive days, and within 30 days after written notice of termination is given, you have not
returned to the full-time performance of your duties, for purposes of this Agreement your
employment may be terminated for “Disability.”

 

 

          (c) Cause. Termination by the Corporation of your employment for “Cause” means
termination (i) upon the willful and continued failure by you to substantially perform your duties
with the Corporation (other than any such failure resulting from your incapacity due to physical or
mental illness or any such actual or anticipated failure after the issuance of a Notice of
Termination by you for Good Reason), within 10 days after a written demand for substantial
performance is delivered to you by the Board, which demand specifically identifies the manner in
which the Board believes that you have not substantially performed your duties, or (ii) the willful
engaging by you in conduct which is clearly and materially injurious to the Corporation, monetarily
or otherwise. For purposes of this §4(c), no act, or failure to act, on your part shall be deemed
“willful” unless done, or omitted to be done, by you in bad faith and without reasonable belief
that your action or omission was in or not opposed to the best interest of the Corporation.
Notwithstanding the foregoing, you will not be deemed to have been terminated for Cause unless and
until there is delivered to you a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board
(after reasonable notice to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of the Board you were guilty of conduct
set forth above in this §4(c) and specifying the particulars thereof in detail.

          (d) Good Reason. You shall be entitled to terminate your employment for Good Reason.
For purposes of this Agreement, “Good Reason” means, without your express written consent,
the occurrence after a Change in Control of any of the following circumstances unless, in the case
of clauses (i), (v), (vi), (vii) or (viii) of this §4(d), such circumstances are fully corrected
prior to the Date of Termination specified in the Notice of Termination given in respect thereof:
(i) the assignment to you of any duties inconsistent with the status of the position in the
Corporation that you held immediately prior to the Change in Control or a materially adverse
alteration in the nature or status of your responsibilities or in the quality or amount of office
accommodations or assistance provided to you, from those in effect immediately prior to the Change
in Control, (ii) a reduction by the Corporation in your annual base salary as in effect on the date
immediately prior to the Change in Control or as the same may be increased from time to time
thereafter, (iii) the Corporation’s moving you to be based more than 50 miles from the
Corporation’s offices at which you are principally employed immediately prior to the date of the
Change in Control (except for required travel on the
Corporation’s business to an extent substantially consistent with your present business travel
obligations and except to the extent that you consent to any such move prior to the date of the
Change of Control), (iv) the failure by the Corporation to pay to you any portion of your current
compensation within seven days of the date such compensation is due, (v) the failure by the
Corporation to continue in effect any compensation or benefit plan or perquisites in which you
participate immediately prior to the Change in Control which is material to your total
compensation, including but not limited to the Retirement Plans (but excluding the Atlantis
Plastics, Inc. Employee Stock Purchase Plan and any stock option plan maintained by the Corporation
immediately prior to the Change in Control), unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by
the Corporation to continue your participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the amount of benefits provided and the
level of your participation relative to other participants, than existed at the time of the Change
in Control, (vi) the failure by the Corporation to continue to provide you with benefits
substantially similar to those enjoyed by you under any of the Corporation’s life insurance,
medical, dental, accident or disability plans in which you were participating at the time of the
Change in Control, the taking of any action by the Corporation which would directly or indirectly
materially reduce any of such benefits, or the failure by the Corporation to provide you with the
number of paid vacation days to which you are

 

 

entitled on the basis of your years of service with
the Corporation in accordance with the Corporation’s normal vacation policy in effect at the time
of the Change in Control, (vii) the failure of the Corporation to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as contemplated in §6 below, or
(viii) any purported termination of your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of §4(e) below (and, if applicable, the requirements of
§4(c) above), which purported termination shall not be effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this §4(d) will not be affected by your
incapacity due to physical or mental illness. Your continued employment will not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

          (e) Notice of Termination. Any purported termination of your employment by the
Corporation or by you shall be communicated by written Notice of Termination to the other party
hereto in accordance with §7 below. “Notice of Termination” means a notice that shall
indicate the specific termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.

          (f) Date of Termination. “Date of Termination” means (i) if your employment is
terminated for Disability, 30 days after Notice of Termination is given (provided that you have not
returned to the full-time performance of your duties during such 30-day period), (ii) if your
employment is terminated pursuant to §§4(c) or 4(d) above, the date specified in the Notice of
Termination (which, in the case of a termination for Good Reason, shall not be less than 15 nor
more than 60 days from the date such Notice of Termination is given), (iii) in the case of a
termination by you for any other reason, the date specified in the Notice of Termination (which
shall not be less than 30 days from the date such Notice of Termination is given), (iv) if your
employment is terminated by the Corporation for any other reason, the date specified in the Notice
of Termination and (v) if your employment is terminated by reason of your death, the date of your
death; provided, however, that if within 15 days
after any Notice of Termination is given, or, if later, prior to the Date of Termination (as
determined without regard to this proviso), the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, then the Date of Termination
(other than the Date of Termination where clause (iv) of this §4(f) is applicable) shall be the
date on which the dispute is finally determined, either by mutual written agreement of the parties,
by a binding arbitration award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has
expired and no appeal has been perfected); and provided, further, that the Date of Termination
shall be extended by a notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Corporation will continue to pay you your
full compensation in effect when the notice giving rise to the dispute was given and continue you
as a participant in all Retirement Plans, life insurance, medical, dental, accident or disability
plans and any similar plans in which you were participating when the notice giving rise to the
dispute was given, until the dispute is finally resolved in accordance with this §4(f). Amounts
paid under this §4(f) are in addition to all other amounts due under this Agreement, and shall not
be offset against or reduce any other amounts due under this Agreement and shall not be reduced by
any compensation earned by you as the result of employment by another employer.

     22. Compensation During Disability or upon Termination. Following a Change in Control,
you will be entitled to the following during a period of Disability or upon termination of

 

 

your employment, as the case may be, provided that such period of Disability or termination of
employment occurs during the term of this Agreement:

          o During any period that you fail to perform your full-time duties with the Corporation as a
result of incapacity due to physical or mental illness, you will continue to receive your base
salary at the rate in effect at the commencement of any such period, together with all compensation
payable to you under the Corporation’s disability plan or program or other similar plan during such
period, until this Agreement is terminated pursuant to §4(b) above. Thereafter, or in the event
your employment is terminated by reason of your death, your benefits will be determined under the
Corporation’s retirement, insurance and other compensation programs then in effect in accordance
with the terms of such programs.

          o If your employment is terminated by the Corporation for Cause or by you other than for Good
Reason, the Corporation will pay you your full base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given, plus all other amounts or benefits to
which you are entitled under any Compensation Plan of the Corporation then in effect, and the
Corporation shall have no further obligations to you under this Agreement.

          o If your employment is terminated by you for Good Reason or by the Corporation other than for
Cause or Disability, provided such termination occurs during the term of this Agreement and either
following a Change in Control or within 90 days prior to a Change in Control, then you will be
entitled to the following: (i) the Corporation will pay to you your full base salary through the
Date of Termination at the rate in effect at the time Notice of Termination is given, no later than
the fifth day following the Date of Termination, (ii) in lieu of any further salary payments or
bonus payments to you for periods subsequent to the Date of Termination, the Corporation will pay
as severance pay to you, at the time specified in §5(e) below, a lump sum severance payment equal
to three times the amount of your annual salary as in effect as of your
Date of Termination (without regard to any attempted or purported termination or reduction of
such salary), (iii) your rights under the Retirement Plans will be governed by the terms of those
respective plans, (iv) the Corporation will pay to you all legal fees and expenses incurred by you
as a result of such termination (including all such fees and expenses, if any, reasonably incurred
in contesting or disputing by arbitration or otherwise, any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement or in connection with any tax
audit or proceeding to the extent attributable to the application of Section 4999 of the Code, to
any payment or benefit provided hereunder) and (v) for a two year period after such termination,
the Corporation will arrange to provide you with benefits substantially similar to those which you
were receiving or entitled to receive under the Corporation’s life, disability, accident and group
health insurance plans or any similar plans in which you were participating immediately prior to
the Date of Termination (“Welfare Plan Benefits”) at a cost to you which is no greater than
that cost to you in effect at the Date of Termination; provided, however, that to the extent any
such coverage is prohibited by any judicial or legislative authority, the Corporation shall make
alternative arrangements to provide you with Welfare Plan Benefits, including, but not limited to,
providing you with a payment in an amount equal to your cost of purchasing the Welfare Plan
Benefits. Benefits otherwise receivable by you pursuant to clause (v) above shall be reduced to the
extent comparable benefits are actually received on your behalf during the two year period
following your termination, and such benefits actually received by you shall be reported to the
Corporation.

          o If any payments under this Agreement or any other payments or benefits received or to be
received by you in connection with a Change in Control or your termination of

 

 

employment (whether
pursuant to the terms of this agreement or any other plan, arrangement or agreement with the
Corporation, or any Affiliate of the Corporation) (the “Severance Payments”), will be
subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the Corporation will pay at the time specified below an
additional amount (the “Gross-Up Payment”), such that the net amount retained by you, after
deduction of any Excise Tax on the Severance Payments and any federal, state and local income tax
and Excise Tax upon the payment provided for by this §5(d), shall be equal to the Severance
Payments. For purposes of determining whether any of the Severance Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) all Severance Payments shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel selected by the Corporation’s
independent auditors and acceptable to you such Severance Payments (in whole or in part) do not
constitute parachute payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise Tax, (ii) the amount of the Severance Payments which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (1) the total amount of the
Severance Payments or (2) the amount of excess parachute payments within the meaning of Section
280G(b)(1) of the Code (after applying clause (i) above), and (iii) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the Corporation’s independent
auditors in accordance with the principles of Section 280G(d)(3) and (4) of the Code. For purposes
of determining the amount of the Gross-Up Payment, you shall be deemed to pay federal income taxes
at your highest marginal rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at your highest marginal rate of taxation in
the state and locality of your residence on the Date of Termination, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of your employment, you will repay to the Corporation
at the time that the amount of such reduction in Excise Tax is finally determined the portion of
the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up
Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal
and state and local income tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code (the “Applicable Rate”). In the event that
the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the
termination of your employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Corporation will make an additional
Gross-Up Payment in respect of such excess (plus any interest payable with respect to such excess
at the Applicable Rate) at the time that the amount of such excess is finally determined. Any
payment to be made to you under this §5(d) will be payable within five days of your Date of
Termination.

          o The payments provided for in §5(c)(i)(2) and §5(c)(ii) above will be made not later than the
fifth day following the Date of Termination; provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Corporation will pay to you on
such day an estimate, as determined in good faith by the Corporation, of the minimum amount of such
payments and will pay the remainder of such payments (together with interest at the Applicable
Rate) as soon as the amount thereof can be determined but in no event later than 30 days after the
Date of Termination. In the event that the amount of the estimated

 

 

payments exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by the Corporation to
you, payable on the fifth day after demand by the Corporation (together with interest at the
Applicable Rate).

          o Except as required in §5(c)(v) above, you shall not be required to mitigate the amount of
any payment provided for in this §5 by seeking other employment or otherwise, nor shall the amount
of any payment or benefit provided for in this §5 be reduced by any compensation earned by you as
the result of employment by another employer, by retirement benefits, by offset against any amount
claimed to be owed by you to the Corporation, or otherwise; provided, however, that if during the
one year period subsequent to your Date of Termination, you directly compete with the Corporation
by making use of trade secrets or other proprietary knowledge you obtained while employed by the
Corporation in violation of the commitment to protect such proprietary or trade secret information
set forth in the Employment Agreement (determined without regard to the termination of the
Employment Agreement pursuant to §12 below), all income earned as a result of such use of
information shall be remitted to the Corporation to the extent payments were made to you under this
§5.

          o The provisions of this §5 shall survive the termination of this Agreement.

     23. Successors; Binding Agreement.

          o The Corporation will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Corporation to (i) expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Corporation would be required to perform it if no such succession
had taken place and (ii) agree to notify you of the assumption of the Agreement within 10 days
of such assumption. Failure of the Corporation to obtain any such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Corporation in the same amount and on the same terms to which you would be
entitled hereunder if you terminate your employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.

          o This Agreement shall inure to the benefit of and be enforceable by you and your personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you hereunder had you
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such
designee, to your estate.

     24. Notices. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Corporation shall be directed to the attention of the
Board with a copy to the Secretary of the Corporation, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.

 

 

     25. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be authorized by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar of dissimilar
provisions or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of Florida without regard to its conflicts of law principles. All references to sections of
the Code shall be deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required under federal,
state or local law, except for any withholding that may be required under Section 4999 of the Code.
The obligations of the Corporation under §5 above shall survive the expiration of the term of this
Agreement.

     26. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

     27. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same instrument.

     28. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, conducted before a panel of three
arbitrators in the city of Atlanta, Georgia or, at your option, in the city where you are
principally employed immediately prior to the date of a Change in Control, in accordance with the
rules of the American Arbitration Association then in effect; provided, however, that you shall be
entitled to seek specific performance of your rights under §4(f) during the pendency of any dispute
or controversy arising under or in connection with this Agreement. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.

 

 

     29. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; provided, however, that
the Employment Agreement shall remain in full force and effect until the occurrence of a Change in
Control, at which time the Employment Agreement shall be deemed terminated and canceled. If this
letter sets forth our agreement on the subject matter hereof, kindly sign and return this original
letter to the Corporation which will then constitute our agreement on this subject. The enclosed
copy is for your personal records.

Sincerely,

/s/ Earl W. Powell

Earl W. Powell

Chairman of the Board

	 	 	 
	ACCEPTED AND AGREED:
	 	 
	 
	 	 
	/s/ Anthony F. Bova
	 	 
	 

Anthony F. Bovaexv10wa

 

Exhibit 10.A

VIAD CORP

1997 OMNIBUS INCENTIVE PLAN

AS AMENDED THROUGH FEBRUARY 23, 2006

SECTION 1. PURPOSE; DEFINITIONS.

     The purpose of the Plan is to give the Company a significant advantage in attracting,
retaining and motivating officers, employees and directors and to provide the Company and its
subsidiaries with the ability to provide incentives more directly linked to the profitability of
the Company’s businesses and increases in stockholder value. It is the current intent of the
Committee that the Plan shall replace the 1992 Stock Incentive Plan for purposes of new Awards and
that the Viad Corp Management Incentive Plan, the Viad Corp Performance Unit Incentive Plan, and
the Viad Corp Performance-Based Stock Plan continue under the auspices of Sections 7 and 8 hereof
subject to the discretion of the Committee under the terms and conditions of this Plan.

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

     (a) “AFFILIATE” means a corporation or other entity controlled by the Company and designated
by the Committee as such.

     (b) “AWARD” means an award of Stock Appreciation Rights, Stock Options, Restricted Stock or
Performance-Based Awards.

     (c) “AWARD CYCLE” will mean a period of consecutive fiscal years or portions thereof
designated by the Committee over which Awards of Restricted Stock or Performance-Based Awards are
to be earned.

     (d) “BOARD” means the Board of Directors of the Company.

     (e) “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 a participant’s employment duties or (3) willful and deliberate failure on the part of a
participant to perform his employment duties in any material respect, or such other events as will
be determined by the Committee. The Committee will have the sole discretion to determine whether
“Cause” exists, and its determination will be final.

     (f) “CHANGE IN CONTROL” and “CHANGE IN CONTROL PRICE” have the meanings set forth in Sections
9(b) and (c), respectively.

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

     (h) “COMMISSION” means the Securities and Exchange Commission or any successor agency.

     (i) “COMMITTEE” means the Committee referred to in Section 2.

     (j) “COMMON STOCK” means common stock, par value $1.50 per share, of the Company.

     (k) “COMPANY” means Viad Corp, a Delaware corporation.

     (l) “COMPANY UNIT” means any subsidiary, group of subsidiaries, line of business or division
of the Company, as designated by the Committee.

     (m) “DISABILITY” means permanent and total disability as determined under procedures
established by the Committee for purposes of the Plan.

     (n) “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended from time to time,
and any successor thereto.

     (o) “FAIR MARKET VALUE” means, as of any given date, the mean between the highest and lowest
reported sales prices of the Stock on the New York Stock Exchange Composite Tape or, if not listed
on such exchange, on any other

 

 

2

national exchange on which the Stock is listed or on the Nasdaq
Stock Market. If there is no regular public trading market for such Stock,
the Fair Market Value of the Stock will be determined by the Committee in good faith. In
connection with the administration of specific sections of the Plan, and in connection with the
grant of particular Awards, the Committee may adopt alternative definitions of “Fair Market Value”
as appropriate.

     (p) “INCENTIVE STOCK OPTION” means any Stock Option intended to be and designated as an
“incentive stock option” within the meaning of Section 422 of the Code.

     (q) “MIP” means the Company’s Management Incentive Plan providing annual cash bonus awards to
participating employees based upon predetermined goals and objectives.

     (r) “NET INCOME” means the consolidated net income of the Company determined in accordance
with GAAP before extraordinary, unusual and other non-recurring items.

     (s) “NON-EMPLOYEE DIRECTOR” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3), as promulgated by the Commission under the Exchange Act,
or any successor definition adopted by the Commission.

     (t) “NON-QUALIFIED STOCK OPTION” means any Stock Option that is not an Incentive Stock Option.

     (u) “PERFORMANCE GOALS” means the performance goals established by the Committee in connection
with the grant of Restricted Stock or Performance-Based Awards. In the case of Qualified
Performance-Based Awards, such goals (1) will be based on the attainment of specified levels of one
or more of the following measures with respect to the Company or any Company Unit, as applicable:
economic value added, sales or revenues, costs or expenses, net profit after tax, gross profit,
operating profit, base earnings, return on actual or pro forma equity or net assets or capital, net
capital employed, earnings per share, earnings per share from continuing operations, operating
income, pre-tax income, operating income margin, net income, stockholder return including
performance (total stockholder return) relative to the S&P 500, MidCap 400 or similar index or
performance (total stockholder return) relative to the proxy comparator group, in both cases as
determined pursuant to Rule 402(l) of Regulation S-K promulgated under the Exchange Act, cash
generation, cash flow, unit volume and change in working capital and (2) will be set by the
Committee within the time period prescribed by Section 162(m) of the Code and related regulations.

     (v) “PERFORMANCE-BASED AWARD” means an Award made pursuant to Section 8.

     (w) “PERFORMANCE-BASED RESTRICTED STOCK AWARD” has the meaning set forth in Section 7(c)(1)
hereof.

     (x) “PLAN” means the 1997 Viad Corp Omnibus Incentive Plan, As Amended, as set forth herein
and as hereafter amended from time to time.

     (y) “PREFERRED STOCK” means preferred stock, par value $0.01, of the Company.

     (z) “QUALIFIED PERFORMANCE-BASED AWARDS” means an Award of Restricted Stock or a
Performance-Based Award designated as such by the Committee at the time of grant, based upon a
determination that (1) the recipient is or may be a “covered employee” within the meaning of
Section 162(m)(3) of the Code in the year in which the Company would expect to be able to claim a
tax deduction with respect to such Restricted Stock or Performance-Based Award and (2) the
Committee wishes such Award to qualify for the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C).

     (aa) “RESTRICTED STOCK” means an award granted under Section 7.

     (bb) “RETIREMENT,” except as otherwise determined by the Committee, means voluntary separation
of employment, voluntary termination of employment or voluntary resignation from employment (a) at
or after attaining age 55 on pension or vested to receive pension under a pension plan of the
Corporation upon election, or (b) upon or after attaining age 55 and not less than five years’
continuous service with the Corporation or an affiliate of the Corporation, whether or not vested
for pension. Retirement shall be deemed to occur at the close of business on the last day of the
employee’s participation on the payroll of the Corporation whether receiving compensation for
active employment, accrued vacation, salary continuation (regular way or lump sum) or like
employment programs.

 

 

3

     (cc) “RULE 16b-3” means Rule 16b-3, as promulgated by the Commission under Section 16(b) of
the Exchange Act, as amended from time to time.

     (dd) “STOCK” means the Common Stock or Preferred Stock.

     (ee) “STOCK APPRECIATION RIGHT” means a right granted under Section 6.

     (ff) “STOCK OPTION” means an option granted under Section 5.

     (gg) “TERMINATION OF EMPLOYMENT” means the termination of the participant’s employment with
the Company and any subsidiary or Affiliate. A participant employed by a subsidiary or an
Affiliate will also be deemed to incur a Termination of Employment if the subsidiary or Affiliate
ceases to be such a subsidiary or Affiliate, as the case may be, and the participant does not
immediately thereafter become an employee of the Company or another subsidiary or Affiliate.
Transfers among the Company and its subsidiaries and Affiliates, as well as temporary absences from
employment because of illness, vacation or leave of absence, will not be considered a Termination
of Employment.

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

SECTION 2. ADMINISTRATION.

     The Plan will be administered by the Human Resources Committee of the Board pursuant to
authority delegated by the Board in accordance with the Company’s By-Laws. If at any time there is
no such Human Resources Committee or such Human Resources Committee shall fail to be composed of at
least two directors each of whom is a Non-Employee Director and is an “outside director” under
Section 162(m)(4) of the Code, the Plan will be administered by a Committee selected by the Board
and composed of not less than two individuals, each of whom is such a Non-Employee Director and
such an “outside director.”

     The Committee will have plenary authority to grant Awards pursuant to the terms of the Plan to
officers, employees and directors of the Company and its subsidiaries and Affiliates, but the
Committee may not grant MIP Awards larger than the limits provided in Section 3.

     Among other things, the Committee will have the authority, subject to the terms of the Plan:

     (a) to select the officers, employees and directors to whom Awards may from time to time be
granted;

     (b) to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock and Performance-Based Awards or any
combination thereof are to be granted hereunder;

     (c) to determine the number of shares of Stock or the amount of cash to be covered by each
Award granted hereunder;

     (d) to determine the terms and conditions of any Award granted hereunder (including, but not
limited to, the option price (subject to Section 5(a)), any vesting condition, restriction or
limitation (which may be related to the performance of the participant, the Company or any
subsidiary, Affiliate or Company Unit) and any rule concerning vesting acceleration or waiver of
forfeiture regarding any Award and any shares of Stock relating thereto, based on such factors as
the Committee will determine) provided, however, that the Committee will have no power to
accelerate the vesting, or waive the forfeiture, regarding any Award and any shares of Stock
relating thereto, except in connection with a “change of control” of the Company, the sale of a
subsidiary or majority-owned affiliate of the Company (and then only with respect to participants
employed by each such subsidiary or affiliate), the death or disability of a participant or
termination of employment of a participant, and, further provided, however, that the Committee will
have no power to accelerate the vesting, or waive the forfeiture, of any Qualified
Performance-Based Awards;

     (e) to modify, amend or adjust the terms and conditions, at any time or from time to time, of
any Award, including but not limited to Performance Goals; provided, however, that the Committee
may not adjust upwards the amount payable with respect to any Qualified Performance-Based Award or
waive or alter the Performance Goals associated therewith and provided, further, however, that the
Committee may not reprice Stock Options except for an amount of Stock Options representing not more
than 10% of then outstanding Stock Options;

 

 

4

     (f) to determine to what extent and under what circumstances Stock and other amounts payable
with respect to an Award will be deferred; and

     (g) to determine under what circumstances a Stock Option may be settled in cash or Stock under
Section 5(j).

     The Committee will have the authority to adopt, alter or repeal such administrative rules,
guidelines and practices governing the Plan as it from time to time deems advisable, to interpret
the terms and provisions of the Plan and any Award issued under the Plan (and any agreement
relating thereto) and to otherwise supervise the administration of the Plan.

     The Committee may act only by a majority of its members then in office, except that the
members thereof may (1) delegate to designated officers or employees of the Company such of its
powers and authorities under the Plan as it deems appropriate (provided that no such delegation may
be made that would cause Awards or other transactions under the Plan to fail to be exempt from
Section 16(b) of the Exchange Act or that would cause Qualified Performance-Based Awards to cease
to so qualify) and (2) authorize any one or more members or any designated officer or employee of
the Company to execute and deliver documents on behalf of the Committee.

     Any determination made by the Committee or pursuant to delegated authority pursuant to the
provisions of the Plan with respect to any Award will be made in the sole discretion of the
Committee or such delegates at the time of the grant of the Award or, unless in contravention of
any express term of the Plan, at any time thereafter. All decisions made by the Committee or any
appropriately delegated officer(s) or employee(s) pursuant to the provision of the Plan will be
final and binding on all persons, including the Company and Plan participants.

     Notwithstanding anything to the contrary in the Plan, the Committee will have the authority to
modify, amend or adjust the terms and conditions of any Award as appropriate in the event of or in
connection with any reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation or any change in the capital structure of the Company.

SECTION 3. STOCK SUBJECT TO PLAN AND LIMITS ON AWARDS.

     (a) Subject to adjustment as provided herein, the number of shares of Common Stock of the
Company available for grant under the Plan in each calendar year (including partial calendar years)
during which the Plan is in effect shall be equal to two percent (2.0%) of the total number of
shares of Common Stock of the Company outstanding as of the first day of each such year for which
the Plan is in effect; provided that any shares available for grant in a particular calendar year
(or partial calendar year) which are not, in fact, granted in such year shall be added to the
shares available for grant in any subsequent calendar year.

     (b) Subject to adjustment as provided herein, the number of shares of Stock covered by Awards
granted to any one participant will not exceed 500,000 shares for any consecutive twelve-month
period and the aggregate dollar amount for Awards denominated solely in cash will not exceed $5.0
million for any such period.

     (c) In addition, and subject to adjustment as provided herein, no more than 7.5 million shares
of Common Stock will be cumulatively available for the grant of Incentive Stock Options over the
life of the Plan.

     (d) Shares subject to an option or award under the Plan may be authorized and unissued shares
or may be “treasury shares.” In the event of any merger, reorganization, consolidation,
recapitalization, spin-off, stock dividend, stock split, extraordinary distribution with respect to
the Stock or other change in corporate structure affecting the Stock, such substitution or
adjustments will be made in the aggregate number and kind of shares reserved for issuance under the
Plan, in the aggregate limit on grants to individuals, in the number, kind, and option price of
shares subject to outstanding Stock Options and Stock Appreciation Rights, in the number and kind
of shares subject to other outstanding Awards granted under the Plan and/or such other equitable
substitutions or adjustments as may be determined to be appropriate by the Committee or the Board,
in its sole discretion; provided, however, that the number of shares subject to any Award will
always be a whole number.

     (e) Awards under the MIP may not exceed in the case of (i) the Company’s Chief Executive
Officer, $1.5 million; (ii) a president of any of the Company’s operating companies, whether or not
incorporated, $750,000; and (iii) all other executive officers of the Company individually,
$500,000.

 

 

5

SECTION 4. ELIGIBILITY.

     Officers, employees and directors of the Company, its subsidiaries and Affiliates who are
responsible for or contribute to the management, growth and profitability of the business of the
Company, its subsidiaries and Affiliates are eligible to be granted Awards under the Plan.

SECTION 5. STOCK OPTIONS.

     Stock Options may be granted alone or in addition to other Awards granted under the Plan and
may be of two types: Incentive Stock Options and Non-Qualified Stock Options. Any Stock Option
granted under the Plan will be in such form as the Committee may from time to time approve.

     The Committee will have the authority to grant any optionee Incentive Stock Options,
Non-Qualified Stock Options or both types of Stock Options (in each case with or without Stock
Appreciation Rights). Incentive Stock Options may be granted only to employees of the Company and
its subsidiaries (within the meaning of Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so designated does not qualify as
an Incentive Stock Option, it will be deemed to be a Non-Qualified Stock Option.

     Stock Options will be evidenced by option agreements, the terms and provisions of which may
differ. An option agreement will indicate on its face whether it is an agreement for an Incentive
Stock Option or a Non-Qualified Stock Option. The grant of a Stock Option will occur on the date
the Committee by resolution selects an individual to be a participant in any grant of a Stock
Option, determines the number of shares of Stock to be subject to such Stock Option to be granted
to such individual and specifies the terms and provisions of the Stock Option. The Company will
notify a participant of any grant of a Stock Option, and a written option agreement or agreements
will be duly executed and delivered by the Company to the participant.

     Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to
Incentive Stock Options will be interpreted, amended or altered nor will any discretion or
authority granted under the Plan be exercised so as to disqualify the Plan under Section 422 of the
Code or, without the consent of the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.

     Stock Options granted under the Plan will be subject to the following terms and conditions and
will contain such additional terms and conditions as the Committee will deem desirable:

     (a) OPTION PRICE. The option price per share of Stock purchasable under a Stock Option will
be determined by the Committee and set forth in the option agreement, and will not be less than the
Fair Market Value of the Stock subject to the Stock Option on the date of grant.

     (b) OPTION TERM. The term of each Stock Option will be fixed by the Committee, but no
Incentive Stock Option may be exercisable more than 10 years after the date the Incentive Stock
Option is granted.

     (c) EXERCISABILITY. Except as otherwise provided herein, Stock Options will be exercisable at
such time or times and subject to such terms and conditions as will be determined by the Committee.
If the Committee provides that any Stock Option is exercisable only in installments, the Committee
may, subject to the provisions of Section 2(d) hereof, at any time waive such installment exercise
provisions, in whole or in part, based on such factors as the Committee may determine. In
addition, the Committee may, subject to the provisions of Section 2(d) hereof, at any time
accelerate the exercisability of any Stock Option.

     (d) METHOD OF EXERCISE. Subject to the provisions of this Section 5, Stock Options may be
exercised, in whole or in part, at any time during the option term by giving written notice of
exercise to the Company specifying the number of shares of Stock subject to the Stock Option to be
purchased.

     Such notice must be accompanied by payment in full of the purchase price by certified or bank
check or such other instrument as the Company may accept. An option agreement may provide that, if
approved by the Committee, payment in full or in part or payment of tax liability, if any, relating
to such exercise may also be made in the form of unrestricted Stock already owned by the optionee
of the same class as the Stock subject to the Stock Option and, in the case of the exercise of a
Non-Qualified Stock Option, Restricted Stock subject to an Award hereunder which is of the same
class as the Stock subject to the Stock Option (in both cases based on the Fair Market Value of the
Stock on the date the Stock Option is exercised); provided,

 

 

6

however, that, in the case of an Incentive Stock Option, the right to make a payment in the
form of already owned shares of Stock of the same class as the Stock subject to the Stock Option
may be authorized only at the time the Stock Option is granted. In addition, an option agreement
may provide that, in the discretion of the Committee, payment for any shares subject to a Stock
Option or tax liability associated therewith may also be made by instruction to the Committee to
withhold a number of such shares having a Fair Market Value on the date of exercise equal to the
aggregate exercise price of such Stock Option.

     If payment of the option exercise price of a Non-Qualified Stock Option is made in whole or in
part in the form of Restricted Stock, the number of shares of Stock to be received upon such
exercise equal to the number of shares of Restricted Stock used for payment of the option exercise
price will be subject to the same forfeiture restrictions to which such Restricted Stock was
subject, unless otherwise determined by the Committee.

     No shares of Stock will be issued until full payment therefor has been made. Subject to any
forfeiture restrictions that may apply if a Stock Option is exercised using Restricted Stock, an
optionee will have all of the rights of a stockholder of the Company holding the class or series of
Stock that is subject to such Stock Option (including, if applicable, the right to vote the shares
and the right to receive dividends), when the optionee has given written notice of exercise, has
paid in full for such shares and, if requested, has given the representation described in Section
12(a).

     (e) NONTRANSFERABILITY OF STOCK OPTIONS. (1) No Stock Option will be transferable by the
optionee other than (A) by will or by the laws of descent and distribution or (B) in the case of a
Non-Qualified Stock Option, pursuant to a qualified domestic relations order (as defined in the
Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder). All Stock Options will be exercisable, during the optionee’s lifetime, only by the
optionee or by the guardian or legal representative of the optionee, it being understood that the
terms “holder” and “optionee” include the guardian and legal representative of the optionee named
in the option agreement and any person to whom a Stock Option is transferred by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order.

          (2) Notwithstanding Section 5(e)(1) above, the Committee may grant Stock Options that are
transferable, or amend outstanding Stock Options to make them transferable, by the optionee (any
such Stock Option so granted or amended a “Transferable Option”) to one or more members of the
optionee’s immediate family, to partnerships of which the only partners are members of the
optionee’s immediate family, or to trusts established by the optionee for the benefit of one or
more members of the optionee’s immediate family. For this purpose the term “immediate family”
means the optionee’s spouse, children or grandchildren. Consideration may not be paid for the
transfer of a Transferable Option. A transferee described in this Section 5(e)(2) shall be subject
to all terms and conditions applicable to the Transferable Option prior to its transfer. The
option agreement with respect to a Transferable Option shall set forth its transfer restrictions,
such option agreement shall be approved by the Committee, and only Stock Options granted pursuant
to a stock option agreement expressly permitting transfer pursuant to this Section 5(e)(2) shall be
so transferable.

     (f) TERMINATION BY DEATH. If an optionee’s employment terminates by reason of death, any
Stock Option held by such optionee may thereafter be exercised, to the extent then exercisable, or
on such accelerated basis as the Committee may determine, for a period of one year (or such other
period as the Committee may specify in the option agreement) from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is the shorter.

     (g) TERMINATION BY REASON OF DISABILITY. If an optionee’s employment terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised by the optionee, to
the extent it was exercisable at the time of termination, or on such accelerated basis as the
Committee may determine, for a period of three years (or such shorter period as the Committee may
specify in the option agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the shorter; provided,
however, that if the optionee dies within such three-year period (or such shorter period), any
unexercised Stock Option held by such
optionee will, notwithstanding the expiration of such three-year (or such shorter) period, continue
to be exercisable to the extent to which it was exercisable at the time of death for a period of 12
months from the date of such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as
a Non-Qualified Stock Option.

     (h) TERMINATION BY REASON OF RETIREMENT. If an optionee’s employment terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised by the optionee, to
the extent it was exercisable at the time of termination, or on such accelerated basis as the
Committee may determine, for a period of five years (or such shorter period as the Committee may
specify in the option agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is the shorter; provided,
however, that if the

 

7

optionee dies within such five-year period (or such shorter period), any
unexercised Stock Option held by such optionee will, notwithstanding such five-year (or such
shorter) period, continue to be exercisable to the extent to which it was exercisable at the time
of death for a period of 12 months from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option is exercised after the expiration
of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.

     (i) OTHER TERMINATION. Unless otherwise determined by the Committee, if an optionee incurs a
Termination of Employment for any reason other than death, Disability or Retirement or Cause, any
Stock Option held by such optionee will thereupon terminate, except that such Stock Option, to the
extent then exercisable, or subject to the provisions of Section 2(d) hereof, on such accelerated
basis as the Committee may determine, may be exercised for the lesser of three months from the date
of such Termination of Employment or the balance of such Stock Option’s term; provided, however,
that if the optionee dies within such three-month period, any unexercised Stock Option held by such
optionee will, notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a period of 12
months from the date of such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of Termination of Employment, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.

     (j) CASHING OUT OF STOCK OPTION. On receipt of written notice of exercise, the Committee may
elect to cash out all or part of the shares of Stock for which a Stock Option is being exercised by
paying the optionee an amount, in cash or Stock, equal to the excess of the Fair Market Value of
the Stock over the option price times the number of shares of Stock for which the Option is being
exercised on the effective date of such cash-out.

     (k) CHANGE IN CONTROL CASH-OUT. Subject to Section 12(h), but notwithstanding any other
provision of the Plan, during the 60-day period from and after a Change in Control (the “Exercise
Period”), unless the Committee determines otherwise at the time of grant, an optionee will have the
right, whether or not the Stock Option is fully exercisable and in lieu of the payment of the
exercise price for the shares of Stock being purchased under the Stock Option and by giving notice
to the Company, to elect (within the Exercise Period) to surrender all or part of the Stock Option
to the Company and to receive cash, within 30 days of such notice, in an amount equal to the amount
by which the Change in Control Price per share of Stock on the date of such election will exceed
the exercise price per share of Stock under the Stock Option (the “Spread”) multiplied by the
number of shares of Stock granted under the Stock Option as to which the right granted under this
Section 5(k) will have been exercised.

SECTION 6. STOCK APPRECIATION RIGHTS.

     (a) GRANT AND EXERCISE. Stock Appreciation Rights may be granted in conjunction with all or
part of any Stock Option granted under the Plan. In the case of a Non-Qualified Stock Option, such
rights may be granted either at or after the time of grant of such Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of grant of such Stock Option.
A Stock Appreciation Right will terminate and no longer be exercisable upon the termination or
exercise of the related Stock Option.

     A Stock Appreciation Right may be exercised by an optionee in accordance with Section 6(b) by
surrendering the applicable portion of the related Stock Option in accordance with procedures
established by the Committee. Upon such exercise and surrender, the optionee will be entitled to
receive an amount determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered will no longer be exercisable to the extent the related Stock Appreciation
Rights have been exercised.

     (b) TERMS AND CONDITIONS. Stock Appreciation Rights will be subject to such terms and
conditions as will be determined by the Committee, including the following:

     (1) Stock Appreciation Rights will be exercisable only at such time or times and to
the extent that the Stock Options to which they relate are exercisable in accordance with
the provisions of Section 5 and this Section 6;

     (2) Upon the exercise of a Stock Appreciation Right, an optionee will be entitled to
receive an amount in cash, shares of Stock or both equal in value to the excess of the Fair
Market Value of one share of Stock as of the date of exercise over the option price per
share specified in the related Stock Option multiplied by the number of shares in

 

8

respect of which the Stock Appreciation Right has been exercised, with the Committee having the
right to determine the form of payment;

     (3) Stock Appreciation Rights will be transferable only to permitted transferees of
the underlying Stock Option in accordance with Section 5(e).

SECTION 7. RESTRICTED STOCK.

     (a) ADMINISTRATION. Shares of Restricted Stock may be awarded either alone or in addition to
other Awards granted under the Plan. The Committee will determine the individuals to whom and the
time or times at which grants of Restricted Stock will be awarded, the number of shares to be
awarded to any participant, the conditions for vesting, the time or times within which such Awards
may be subject to forfeiture and any other terms and conditions of the Awards, in addition to those
contained in Section 7(c).

     (b) AWARDS AND CERTIFICATES. Shares of Restricted Stock will be evidenced in such manner as
the Committee may deem appropriate, including book-entry registration or issuance of one or more
stock certificates. Except as otherwise set forth in a Restricted Stock Agreement, any certificate
issued in respect of shares of Restricted Stock will be registered in the name of such participant
and will bear an appropriate legend referring to the terms, conditions, and restrictions applicable
to such Award, substantially in the following form:

     “The transferability of this certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture) of the 1997 Incentive Plan and a
Restricted Stock Agreement. Copies of such Plan and Agreement are on file at the offices
of Viad Corp, Viad Tower, Phoenix, Arizona.”

The Committee may require that the certificates evidencing such shares be held in custody by the
Company until the restrictions thereon have lapsed and that, as a condition of any Award of
Restricted Stock, the participant has delivered a stock power, endorsed in blank, relating to the
Stock covered by such Award.

     (c) TERMS AND CONDITIONS. Shares of Restricted Stock will be subject to the following terms
and conditions:

     (1) The Committee may, prior to or at the time of grant, designate an Award of
Restricted Stock as a Qualified Performance-Based Award, in which event it will condition
the grant or vesting, as applicable, of such Restricted Stock upon the attainment of
Performance Goals. If the Committee does not designate an Award of Restricted Stock as a
Qualified Performance-Based Award, it may also condition the grant or vesting thereof upon
the attainment of Performance Goals or such other performance-based criteria as the
Committee shall establish (such an Award, a “Performance-Based Restricted Stock Award”).
Regardless of whether an Award of Restricted Stock is a Qualified Performance-Based Award
or a Performance-Based Restricted Stock Award, the Committee may also condition the grant
or vesting upon the continued service of the participant. The provisions of Restricted
Stock Awards (including the conditions for grant or vesting and any applicable Performance
Goals) need not be the same with respect to each recipient. The Committee may at any time,
in its sole discretion, subject to the provisions of Section 7(c)(10), accelerate or waive,
in whole or in part, any of the foregoing restrictions; provided, however, that in the case
of Restricted Stock that is a Qualified Performance-Based Award, the applicable Performance
Goals have been satisfied.

     (2) Subject to the provisions of the Plan and the Restricted Stock Agreement referred
to in Section 7(c)(8), during the period set by the Committee, commencing with the date of
such Award for which such participant’s continued service is required (the “Restriction
Period”) and until the later of (A) the expiration of the Restriction Period and (B) the
date the applicable Performance Goals (if any) are satisfied, the participant will not be
permitted to sell, assign, transfer, pledge or otherwise encumber shares of Restricted
Stock.

     (3) Except as provided in this paragraph (3) and Sections 7(c)(1) and (2) and the
Restricted Stock Agreement, the participant will have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the Company holding the class or
series 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 so determined by the
Committee in the applicable Restricted Stock Agreement and subject to Section 12(f) of the
Plan, (A) dividends consisting of cash, stock or other property (other than Stock) on the
class or series of Stock that is the subject of the Restricted Stock shall be automatically
deferred and reinvested in additional Restricted Stock (in the case of stock or other
property, based on the fair market value thereof, and the Fair Market Value of the Stock,
in each case as of the record date for the

 

9

dividend) held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting any Performance Goals applicable to
the underlying Restricted Stock, and (B) dividends payable in Stock shall be paid in the
form of Restricted Stock of the same class as the Stock with which such dividend was paid
and shall be held subject to the vesting of the underlying Restricted Stock, or held
subject to meeting any Performance Goals applicable to the underlying Restricted Stock.

     (4) Except to the extent otherwise provided in the applicable Restricted Stock
Agreement, Section 7(c)(1), 7(c)(2), 7(c)(5) or 9(a)(2), upon a participant’s Termination
of Employment for any reason during the Restriction Period or before any applicable
Performance Goals are met, all shares still subject to restriction will be forfeited by the
participant.

     (5) Except to the extent otherwise provided in Section 9(a)(2) and Sections 7(c)(9)
and (10), in the event that a participant retires or such participant’s employment is
involuntarily terminated (other than for Cause), the Committee will have the discretion to
waive in whole or in part any or all remaining restrictions (other than, in the case of
Restricted Stock which is a Qualified Performance-Based Award, satisfaction of the
applicable Performance Goals unless the participant’s employment is terminated by reason of
death or Disability) with respect to any or all of such participant’s shares of Restricted
Stock.

     (6) Except as otherwise provided herein or as required by law, if and when any
applicable Performance Goals are satisfied and the Restriction Period expires without a
prior forfeiture of the Restricted Stock, unlegended certificates for such shares will be
delivered to the participant upon surrender of legended certificates.

     (7) Awards of Restricted Stock, the vesting of which is not conditioned upon the
attainment of Performance Goals or other performance-based criteria, is limited to twenty
percent (20%) of the number of shares of Common Stock of the Corporation available for
grant under the Plan in each calendar year.

     (8) Each Award will be confirmed by, and be subject to the terms of, a Restricted
Stock Agreement.

     (9) Performance-Based Restricted Stock will be subject to a minimum one-year
performance period and Restricted Stock which is not performance-based will be subject to a
minimum three-year vesting period.

     (10) There will be no vesting acceleration, or waiver of forfeiture regarding any
Award and any shares of Stock relating thereto, except in connection with a “change of
control” of the Company, the sale of a subsidiary or majority-owned affiliate of the
Company (and then only with respect to participants employed by each subsidiary or
affiliate), the death or disability of a participant, or termination of employment of a
participant.

SECTION 8. PERFORMANCE-BASED AWARDS.

     (a) ADMINISTRATION. Performance-Based Awards may be awarded either alone or in addition to
other Awards granted under the Plan. Subject to the terms and conditions of the Plan, the
Committee shall determine the officers and employees to whom and the time or times at which
Performance-Based Awards will be awarded, the number or amount of Performance-Based Awards to be
awarded to any participant, whether such Performance-Based Award shall be denominated in a number
of shares of Stock, an amount of cash, or some combination thereof, the duration of the Award Cycle
and any other terms and conditions of the Award, in addition to those contained in Section 8(b).

     (b) TERMS AND CONDITIONS. Performance-Based Awards will be subject to the following terms and
conditions:

     (1) The Committee may, prior to or at the time of the grant, designate
Performance-Based Awards as Qualified Performance-Based Awards, in which event it will
condition the settlement thereof upon the attainment of Performance Goals. If the
Committee does not designate Performance-Based Awards as Qualified Performance-Based
Awards, it may also condition the settlement thereof upon the attainment of Performance
Goals or such other performance-based criteria as the Committee shall establish.
Regardless of whether Performance-Based Awards are Qualified Performance-Based Awards, the
Committee may also condition the settlement thereof upon the continued service of the
participant. The provisions of such Performance-Based Awards (including without limitation
any applicable Performance Goals) need not be the same with respect to each recipient.
Subject to the provisions of the Plan and the Performance-Based Award Agreement referred to
in Section 8(b)(5), Performance-Based Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Award Cycle.

 

10

     (2) Unless otherwise provided by the Committee (A) from time to time pursuant to the
administration of particular Award programs under this Section 8, such as the Viad Corp
Management Incentive Plan, the Viad Corp Performance Unit Incentive Plan or the Viad Corp
Performance-Based Stock Plan or (B) in any agreement relating to an Award, and except as
provided in Section 8(b)(3), upon a participant’s Termination of Employment for any reason
prior to the payment of an Award under this Section 8, all rights to receive cash or Stock
in settlement of the Award shall be forfeited by the participant.

     (3) In the event that a participant’s employment is terminated (other than for Cause),
or in the event a participant retires, the Committee shall have the discretion to waive, in
whole or in part, any or all remaining payment limitations (other than, in the case of
Awards that are Qualified
Performance-Based Awards, satisfaction of the applicable Performance Goals unless the
participant’s employment is terminated by reason of death or Disability) with respect to
any or all of such participant’s Awards.

     (4) At the expiration of the Award Cycle, the Committee will evaluate the Company’s
performance in light of any Performance Goals for such Award, and will determine the extent
to which a Performance-Based Award granted to the participant has been earned, and the
Committee will then cause to be delivered to the participant, as specified in the grant of
such Award: (A) a number of shares of Stock equal to the number of shares determined by
the Committee to have been earned or (B) cash equal to the amount determined by the
Committee to have been earned or (C) a combination of shares of Stock and cash if so
specified in the Award.

     (5) No Performance-Based Award may be assigned, transferred, or otherwise encumbered
except, in the event of the death of a participant, by will or the laws of descent and
distribution.

     (6) Each Award will be confirmed by, and be subject to, the terms of a
Performance-Based Award Agreement.

     (7) Performance-Based Awards will be subject to a minimum one-year performance period.

SECTION 9. CHANGE IN CONTROL PROVISIONS.

     (a) IMPACT OF EVENT. Notwithstanding any other provision of the Plan to the contrary, in the
event of a Change in Control:

     (1) Any Stock Options and Stock Appreciation Rights outstanding as of the date such
Change in Control is determined to have occurred and not then exercisable and vested will
become fully exercisable and vested to the full extent of the original grant;

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

     (3) Performance-Based Awards will be considered to be earned and payable to the
extent, if any, and in an amount, if any, and otherwise, in accordance with the provisions
of the agreement relating to such Awards.

     (b) DEFINITION OF CHANGE OF CONTROL. For purposes of this Plan, a “Change of Control” shall
mean any of the following events:

     (1) An acquisition by an 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 20% or more of either: (i)
the then outstanding shares of Common Stock of the Corporation (the “Outstanding
Corporation Common Stock”) or (ii) the combined voting power of the then Outstanding
Voting Securities of the Corporation entitled to vote generally in the election of
Directors (the “Outstanding Corporation Voting Securities”); excluding, however the
following: (A) any acquisition directly from the Corporation or any entity controlled by
the Corporation other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired directly from the
Corporation or any entity controlled by the Corporation, (B) any acquisition by the
Corporation, or any entity controlled by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Corporation or any
entity controlled by

 

11

the Corporation or (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of Section 9(b)(3); or

     (2) A change in the composition of the Board such that the individuals who, as of the
effective date of the Plan, constitute the Board (such Board shall be hereinafter referred
to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this Section 9(b)(2) that any individual, who
becomes a member of the Board subsequent to the effective date of the Plan, whose election,
or nomination for election by the Corporation’s shareholders, was approved by a vote of at
least a majority of those individuals who are members of the Board and who were also
members of the Incumbent Board, (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but provided
further, that any such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board, or

     (3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation (a “Corporate
Transaction”) excluding, however, such a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation
Voting Securities immediately prior to such Corporate Transaction (the “Prior
Shareholders”) beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of Common Stock and the combined voting power of the then
Outstanding Voting Securities entitled to vote generally in the election of Directors, as
the case may be, of the Corporation or other entity resulting from such Corporate
Transaction (including, without limitation, a corporation or other entity which as a result
of such transaction owns the Corporation or all or substantially all of the Corporation’s
assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the
case may be, (ii) no Person (other than the Corporation or any entity controlled by the
Corporation, any employee benefit plan (or related trust) of the Corporation or any entity
controlled by the Corporation or such corporation or other entity resulting from such
Corporate Transaction) will beneficially owns, directly or indirectly, 20% or more of,
respectively, the outstanding shares of Common Stock of the Corporation or other entity
resulting from such Corporate Transaction or the combined voting power of the Outstanding
Voting Securities of such Corporation or other entity entitled to vote generally in the
election of Directors except to the extent that such ownership existed prior to the
Corporate Transaction and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the Board of Directors of the Corporation
resulting from such Corporate Transaction; and further excluding any disposition of all or
substantially all of the assets of the Corporation pursuant to a spin-off, split-up or
similar transaction (a “Spin-off”) if, immediately following the Spin-off, the Prior
Shareholders beneficially own, directly or indirectly, more than 80% of the outstanding
shares of Common Stock and the combined voting power of the then Outstanding Voting
Securities entitled to vote generally in the election of directors of both entities
resulting from such transaction, in substantially the same proportions as their ownership,
immediately prior to such transaction, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities; provided, that if another Corporate Transaction
involving the Corporation occurs in connection with or following a Spin-off, such Corporate
Transaction shall be analyzed separately for purposes of determining whether a Change of
Control has occurred;

     (4) The approval by the stockholders of the Corporation of a complete liquidation or
dissolution of the Corporation.

     (c) CHANGE IN CONTROL PRICE. For purposes of the Plan, “Change in Control Price” means the
higher of (1) the highest reported sales price, regular way, of a share of Stock in any transaction
reported on the New York Stock Exchange Composite Tape or other national exchange on which such
shares are listed or on The Nasdaq Stock Market during the 60-day period prior to and including the
date of a Change in Control or (2) if the Change in Control is the result of a tender or exchange
offer or a Corporate Transaction, the highest price per share of Stock paid in such tender or
exchange offer or Corporate Transaction; provided, however, that in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options, the Change in Control
Price will be in all cases the Fair Market Value of the Stock on the date such Incentive Stock
Option or Stock Appreciation Right is exercised. To the extent that the consideration paid in any
such transaction described above consists all or in part of securities or other non-cash
consideration, the value of such securities or other non-cash consideration will be determined in
the sole discretion of the Board.

 

12

SECTION 10. TERM, AMENDMENT AND TERMINATION.

     The Plan will terminate May 31, 2007, but may be terminated sooner at any time by the Board,
provided that no Incentive Stock Options shall be granted under the Plan after February 19, 2007.
Awards outstanding as of the date of any such termination will not be affected or impaired by the
termination of the Plan.

     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration or
discontinuation will be made which would (a) impair the rights of an optionee under a Stock Option
or a recipient of a Stock Appreciation Right, Restricted Stock Award or Performance-Based Award
theretofore granted without the optionee’s or recipient’s consent, except such an amendment which
is necessary to cause any Award or transaction under the Plan to qualify, or to continue to
qualify, for the exemption provided by Rule 16b-3, or (b) disqualify any Award or transaction under
the Plan from the exemption provided by Rule 16b-3. In addition, no such amendment may be made
without the approval of the Company’s stockholders to the extent such approval is required by law
or agreement.

     The Committee may amend the terms of any Stock Option or other Award theretofore granted,
prospectively or retroactively, but no such amendment will (1) impair the rights of any holder
without the holder’s consent except such an amendment which is necessary to cause any Award or
transaction under the Plan to qualify, or to continue to qualify, for the exemption provided by
Rule 16b-3 or (2) amend any Qualified Performance-Based Award in such a way as to cause it to cease
to qualify for the exemption set forth in Section 162(m)(4)(C). The Committee may also substitute
new Stock Options for previously granted Stock Options, including previously granted Stock Options
having higher option prices; provided, however, that the Committee may take such action only with
respect to Stock Options representing not more than 10% of then outstanding Stock Options.

     Subject to the above provisions, the Board will have authority to amend the Plan to take into
account changes in law and tax and accounting rules, as well as other developments and to grant
Awards which qualify for beneficial treatment under such rules without stockholder approval.

SECTION 11. UNFUNDED STATUS OF PLAN.

     It is presently intended that the Plan constitute an “unfunded” plan for incentive and
deferred compensation. The Committee may authorize the creation of trusts or other arrangements to
meet the obligations created under the Plan to deliver Stock or make payments; provided, however,
that, unless the Committee otherwise determines, the existence of such trusts or other arrangements
is consistent with the “unfunded” status of the Plan.

SECTION 12. GENERAL PROVISIONS.

     (a) The Committee may require each person purchasing or receiving shares pursuant to an Award
to represent to and agree with the Company in writing that such person is acquiring any shares
without a view to the distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on transfer.

     All certificates for shares of Stock or other securities delivered under the Plan will be
subject to such stock transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

     Notwithstanding any other provision of the Plan or agreements made pursuant thereto, the
Company shall not be required to issue or deliver any certificate or certificates for shares of
Stock under the Plan prior to fulfillment of all of the following conditions:

     (1) Listing or approval for listing upon notice of issuance, of such shares on the New
York Stock Exchange, Inc., or such other securities exchange as may at the time be the
principal market for the Stock;

     (2) Any registration or other qualification of such shares of the Company under any
state or federal law or regulation, or the maintaining in effect of any such registration
or other qualification which the Committee shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and

     (3) Obtaining any other consent, approval, or permit from any state or federal
governmental agency which

 

13

the Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or advisable.

     (b) Nothing contained in the Plan will prevent the Company or any subsidiary or Affiliate from
adopting other or additional compensation arrangements for its employees.

     (c) The adoption of the Plan will not confer upon any employee any right to continued
employment nor will it interfere in any way with the right of the Company or any subsidiary or
Affiliate to terminate the employment of any employee at any time.

     (d) 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 under the Plan, the
participant will pay to the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount. Unless otherwise determined by the Company, withholding obligations
may be settled with Stock, including Stock that is part of the Award that gives rise to the
withholding requirement. The obligations of the Company under the Plan will be conditional on such
payment or arrangements, and the Company and its Affiliates will, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise due to the participant. The
Committee may establish such procedures as it deems appropriate, including the making of
irrevocable elections, for the settlement of withholding obligations with Stock.

     (e) At the time of grant, the Committee may provide in connection with any grant made under
the Plan that the shares of Stock received as a result of such grant will be subject to a right of
first refusal pursuant to which the participant will be required to offer to the Company any shares
that the participant wishes to sell at the then Fair Market Value of the Stock, subject to such
other terms and conditions as the Committee may specify at the time of grant.

     (f) The reinvestment of dividends in additional Restricted Stock at the time of any dividend
payment will only be permissible if sufficient shares of Stock are available under Section 3 for
such reinvestment (taking into account then outstanding Stock Options and other Awards).

     (g) The Committee will establish such procedures as it deems appropriate for a participant to
designate a beneficiary to whom any amounts payable in the event of the participant’s death are to
be paid or by whom any rights of the participant, after the participant’s death, may be exercised.

     (h) Notwithstanding any other provision of the Plan or any agreement relating to any Award
hereunder, if any right granted pursuant to this Plan would make a Change in Control transaction
ineligible for pooling-of-interests-accounting under APB No. 16 that, but for the nature of such
grant, would otherwise be eligible for such accounting treatment, the Committee will have the
ability, in its sole discretion, to substitute for the cash payable pursuant to such grant Common
Stock with a Fair Market Value equal to the cash that would otherwise be payable hereunder.

     (i) The Plan and all Awards made and actions taken thereunder will be governed by and
construed in accordance with the laws of the State of Delaware.

SECTION 13. EFFECTIVE DATE OF PLAN.

     The Plan will be effective on the later of (a) the time it is approved by the Board and (b)
the time certain provisions of the Plan are approved by stockholders for tax purposes.

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