Document:

Exhibit 4.7

SECOND SUPPLEMENTAL INDENTURE, dated as of May 14,
2007, to the Indenture dated as of April 23, 2004 (as amended and
supplemented to the date hereof, the “Indenture”), among Mueller Group, LLC, a
Delaware limited liability company (formerly Mueller Group, Inc.)  and Mueller Group Co-Issuer, Inc., a Delaware
corporation (together, the “Issuers”), the guarantors listed on the signature
pages hereto (the “Guarantors”) and Law Debenture Trust Company of New York, as
trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Issuers, the Guarantors and the Trustee
have heretofore entered into, and the 10% Senior Subordinated Notes due 2012
(the “Notes”) of the Issuers have been issued pursuant thereto;

WHEREAS, Section 9.02 of the Indenture provides that
the Issuers, the Guarantors and the Trustee may, with the requisite consents of
the Holders of the Notes, enter into a supplemental indenture for the purpose
of amending certain provisions of the Indenture;

WHEREAS, Mueller Water Products, Inc. (the “Company”)
has offered to purchase for cash any and all of the outstanding Notes upon the
terms and subject to the conditions set forth in the Offer to Purchase and
Consent Solicitation Statement, dated May 1, 2007 (as the same may be amended
or supplemented from time to time, the “Statement”), and in the related Consent
and Letter of Transmittal (as the same may be amended or supplemented from time
to time, the “Consent and Letter of Transmittal” and, together with the
Statement, with respect to the Notes, the “Offer”), from each Holder of such
Notes;

WHEREAS, the Offer is conditioned upon, among other
things, certain amendments to the Indenture and to the Notes set forth in
Article Two, Article Three, Article Four and Article Five of this Supplemental
Indenture (the “Amendments”) having been approved by Holders of in excess of a
majority of the outstanding principal amount of the Notes and a supplemental
indenture in respect thereof having been executed and delivered;

WHEREAS, the Company has received and delivered to the
Trustee the consents from Holders of more than a two-thirds of the outstanding
aggregate principal amount of the Notes to effect the Amendments;

WHEREAS, the Issuers and the Guarantors have been
authorized by a resolution of their respective Boards of Directors or Managers
to enter into this Supplemental Indenture; and

WHEREAS, all other acts and proceedings required by
law, by the Indenture and by the charter documents of the Issuers and the
Guarantors to make this Supplemental Indenture a valid and binding agreement
for the purposes expressed herein, in accordance with its terms, have been duly
done and performed;

 

NOW, THEREFORE, in consideration of the premises and
the covenants and agreements contained herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, the Issuers, the
Guarantors and the Trustee hereby agree as follows:

ARTICLE
ONE

SECTION 1.01.                                      Definitions.

Capitalized terms used in this Supplemental Indenture
and not otherwise defined herein shall have the meanings assigned to such terms
in the Indenture.

ARTICLE
TWO

SECTION 2.01.                                      Amendments
to Table of Contents

(a)           The Table of Contents of the Indenture is amended by
deleting the titles to Section 3.09 and Sections 4.03 through Section 4.17 and
inserting in lieu thereof the phrase “[intentionally omitted]”.

ARTICLE
THREE

SECTION 3.01.                                      Elimination
of Certain Definitions in Article 1.

(a)           Section 1.01 of the Indenture is amended by deleting the
definitions “Acquired Indebtedness”; “Cash Equivalents”; “Consolidated Cash
Flow”; “Consolidated Net Income”; “Existing Indebtedness”; “Fixed Charges”; “Fixed
Charge Coverage Ratio”; “Investments”; “Net Income”; “Net Proceeds”; “Permitted
Investments”; “Permitted Liens”; “Permitted Refinancing Indebtedness”; “Restricted
Investment”; “Voting Stock” and “Weighted Average Life to Maturity” contained
therein in their entirety.

(b)           Section 1.02 of the Indenture is amended by deleting the
definitions “Affiliate Transaction”; “Permitted Indebtedness”; and “Restricted
Payments” contained therein in their entirety.

SECTION 3.02.                                      Elimination
of Certain Provisions in Article 3.

(a)           Section 3.09 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

SECTION 3.03.                                      Elimination
of Certain Provisions in Article 4

(a)           Section 4.03 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(b)           Section 4.04 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

 

 2
 

(c)           Section 4.05 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(d)           Section 4.06 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(e)           Section 4.07 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(f)            Section 4.08 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(g)           Section 4.09 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(h)           Section 4.10 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(i)            Section 4.11 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(j)            Section 4.12 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(k)           Section 4.13 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(l)            Section 4.14 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(m)          Section 4.15 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(n)           Section 4.16 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(o)           Section 4.17 of the Indenture is amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

SECTION 3.04.                                      Amendment
and Elimination of Certain Provisions in Article 5.

Section 5.01 of the Indenture is amended by:

(a)           deleting the following proviso at the end of clause (1): “provided
that if such Person is a limited liability company or partnership, a corporate
Wholly Owned Restricted Subsidiary of such Person organized under the laws of
the United States, any state thereof or the District of Columbia becomes a
co-issuer of the Notes in connection therewith”; and

 

 3
 

(b)           deleting the text of clauses (3) and (4) in their entirety
and inserting in lieu thereof the phrase “[intentionally omitted]”.

SECTION 3.05.                                      Elimination
of Certain Provisions in Article 6.

(a)           Section 6.01 of the Indenture is amended by:

(i)            deleting the text
of clauses (3), (4), (5), (6) and (9) in their entirety and inserting in lieu
thereof the phrase “[intentionally omitted]”; and

(ii)           deleting all
references to “Restricted Subsidiaries that is a Significant Subsidiary” from
clauses (7) and (8).

(b)           Section 6.02 of the Indenture is amended by:

(i)            deleting all
references to “Restricted Subsidiaries that is a Significant Subsidiary” from
the Section.

SECTION 3.06.                                      Elimination
of Certain Provisions in Article 8.

Section 8.04(a) of the Indenture is amended by
deleting the text of clauses (2) through (7) in their entirety and inserting in
lieu thereof the phrase “[intentionally omitted]”.

SECTION 3.07.                                      Amendment
of Certain Provisions in Article 11.

(a)           Section 11.05 of the Indenture is amended by deleting the
text of clause (a) in its entirety and inserting in lieu thereof the phrase “[intentionally
omitted]”.

(b)           Section 11.06 of the Indenture is amended by deleting the
proviso in the first sentence of clause (a) and the final sentence of clause
(a) in their entirety.

ARTICLE
FOUR

SECTION 4.01.                                      Elimination
of Certain Provisions in the Note

The Notes are deemed to be amended as follows:

(a)           Section 4 of the Notes is amended by replacing “(the “Indenture”)”
with “(as amended from time to time, the “Indenture”)”.

(b)           Section 7 of the Notes is amended by retitling such
Section “[Intentionally Omitted]” and the text of such Section is deleted in
its entirety.

(c)           Section 12 of the Notes is amended by deleting clauses
(iii), (iv), (v) and (vi) in their entirety and by deleting all references to “Restricted
Subsidiaries that is a Significant Subsidiary” from clause (vii).

 

 4
 

ARTICLE
FIVE

SECTION 5.01.                                      Elimination
of the Form of Supplemental Indenture

The Indenture is amended by deleting in its
entirety the Form of Supplemental Indenture appended to the Indenture as
Exhibit F.

ARTICLE
SIX

SECTION 6.01.                                      Effectiveness
of Amendments to Indenture.

This Supplemental Indenture will become effective
immediately upon its execution and delivery but the amendments in such
Supplemental Indenture set forth in Articles Two through Five hereof will only
become operative immediately prior to the acceptance for payment of all Notes
that are validly tendered (and not withdrawn) on or prior to the Consent
Payment Deadline (as defined in the Statement).

SECTION 6.02.                                      Continuing
Effect of Indenture.

Except as expressly provided herein, all of the terms,
provisions and conditions of the Indenture and the Notes shall remain in full
force and effect.

SECTION 6.03.                                      Construction
of Supplemental Indenture.

This Supplemental Indenture is executed as and shall
constitute an indenture supplemental to the Indenture and shall be construed in
connection with and as part of the Indenture. 
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS SUPPLEMENTAL INDENTURE.

SECTION 6.04.                                      Trust
Indenture Act Controls.

If any provision of this Supplemental Indenture
limits, qualifies or conflicts with another provision of this Supplemental
Indenture or the Indenture that is required to be included by the Trust
Indenture Act of 1939 as in force at the date as of which this Supplemental
Indenture is executed, the provision required by said Act shall control.

SECTION 6.05.                                      Trustee
Disclaimer.

The recitals contained in this Supplemental Indenture
shall be taken as the statements of the Issuers and the Guarantors, and the
Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture.

 

 5
 

SECTION 6.06.                                      Counterparts.

This Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

 

 6
 

IN WITNESS WHEREOF, the parties hereto have caused
this Supplemental Indenture to be duly executed, all as of the day and year
first above written.

 

	
   

  	
  MUELLER GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter A. Smith

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MUELLER GROUP CO-ISSUER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter A. Smith

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

 7
 

 

	
   

  	
  HENRY PRATT COMPANY, LLC

  HENRY PRATT INTERNATIONAL, LLC

  HERSEY METERS CO., LLC

  HYDRO GATE, LLC

  JAMES JONES COMPANY, LLC

  J.B. SMITH MFG CO., LLC

  MILLIKEN VALVE, LLC

  MUELLER INTERNATIONAL FINANCE, INC.

  MUELLER INTERNATIONAL FINANCE, L.L.C.

  MUELLER INTERNATIONAL, INC.

  MUELLER INTERNATIONAL, L.L.C.

  MUELLER SERVICE CO., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter A. Smith

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ANVIL INTERNATIONAL, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  Anvil 1, LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter A. Smith

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MUELLER CO. LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  MCO 1, LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter A. Smith

  
	
   

  	
   

  	
  Name:

  	
  Walter A. Smith

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

 8
 

 

	
   

  	
  LAW DEBENTURE TRUST COMPANY OF 

  
	
   

  	
  NEW YORK, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick J. Healy

  
	
   

  	
   

  	
  Patrick J. Healy

  
	
   

  	
   

  	
  Vice President, Senior Trust Officer

  

 

 9Exhibit 10.1

MATHSTAR, INC.

AMENDED AND RESTATED

2004 LONG-TERM INCENTIVE PLAN

Effective Date: 
October 8, 2004

MATHSTAR, INC.

AMENDED AND RESTATED

2004 LONG-TERM INCENTIVE PLAN

Table of Contents

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.   Purpose of the
  Plan

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.   Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.   Shares Subject
  to the Plan

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.   Administration

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  5.   Term of Plan

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  6.   Terms and
  Conditions of Qualified Options

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  7.   Terms and
  Conditions of Non-Qualified Options

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  8.   Automatic
  Grants of Director Options to Non-employee Directors

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  9.   Terms and
  Conditions of Stock Appreciation Rights

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  10.   Awards of
  Restricted Stock

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  11.   Other Awards

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  12.  Performance-Based
  Awards

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  13.  Adjustments Upon
  Certain Events

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  14.  Shares Acquired for
  Investment

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  15.  No Right to
  Employment, Service as a Director or Awards

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  16.  Other Benefit and
  Compensation Programs

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  17.  Successors and
  Assigns

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  18.  Nontransferability
  of Awards; Designation of Beneficiary

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  19.  Amendments or
  Termination

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  20.  International
  Participants

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  21.  General

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  22.  Effective Date

  	
   

  	
  25

  

 

 ii

MATHSTAR, INC.

AMENDED AND RESTATED

2004 LONG-TERM INCENTIVE PLAN

1.             Purpose of the Plan

The purpose of the Plan
is to aid the Company and its Affiliates in recruiting and retaining employees,
directors, independent contractors and other service providers to the Company
and to motivate such employees, directors, independent contractors and other
service providers to exert their best efforts on behalf of the Company and its
Affiliates by providing incentives through the granting of Awards. The Company
expects that it will benefit from the stock ownership opportunities and other
benefits provided to such Participants under this Plan to encourage alignment
of their interest in the Company’s success with that of other stakeholders.

2.             Definitions

The following capitalized
terms used in the Plan have the respective meanings set forth in this Section;
other terms are defined elsewhere in the Plan:

(a)           “Affiliate” means a
Parent or Subsidiary.

(b)           “Award” means an
Option, Stock Appreciation Right, Share of Restricted Stock, Other Stock-Based
Award or Other Cash-Based Award granted pursuant to the Plan.

(c)           “Board” means the
Board of Directors of the Company.

(d)           “Code” means the
Internal Revenue Code of 1986, as amended, or any successor thereto.

(e)           “Committee” means the
Compensation Committee of the Board or, if the Board has not appointed a
separate Compensation Committee, the entire Board.

(f)            “Common Stock” means
the Company’s common stock, $0.01 par value per share.

(g)           “Company” means
MathStar, Inc., a Minnesota corporation.

(h)           “Director” means a
member of the Board of Directors of the Company.

(i)            “Director Option”
means a Non-Qualified Option granted to a Director to a Director pursuant
to Section 8.

(j)            “Effective Date”
means the earlier of the date the Company’s initial public offering is declared
effective by the Securities and Exchange Commission or December 31, 2005.

(k)           “Employee” means any
person, including officers and Directors, employed by the Company or any
Subsidiary.  The payment to a Director by
the Company of directors’ fees shall not be sufficient to constitute employment
by the Company.

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

(m)          “Exercise Price”  means the purchase price per Share under
the terms of an Option.

(n)           “Fair Market Value” means,
on a given date, (i) if the Common Stock is
listed or admitted to unlisted trading privileges on any national securities
exchange, the average of the closing sales prices of the Common Stock on the
end of any day on all national securities exchanges on which the Common Stock
may at the time be listed or, if there have been no sales on any such exchange
on any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day or, (ii) if the Common Stock is not so listed
or admitted but transactions in the Common Stock are reported on The NASDAQ
Stock Market, the closing price quoted on The NASDAQ Stock Market on such day,
or (iii) if the Common Stock is not so listed or admitted to unlisted trading
privileges or quoted on The NASDAQ Stock Market, and bid and asked prices
therefor in the domestic over-the-counter market are reported by Pink Sheets
LLC (or any comparable reporting service), the average of the closing bid and
asked prices on such day as reported by Pink Sheets LLC (or any comparable
reporting service), or (iv) if the Common Stock is not listed on any national
securities exchange or quoted on The NASDAQ Stock Market or in the domestic
over-the-counter market, the fair value of the Common Stock determined by the
Committee in good faith in the exercise of its reasonable discretion.

(o)           “Non-employee
Director” means a Director
who is not an Employee of the Company.

(p)           “Non-Qualified Option”
means a stock option granted pursuant to Section 7 that does not qualify
as an incentive stock option as defined in Section 422 of the Code.

(q)           “Option” means a
Qualified Option or a Non-Qualified Option (including a Director Option).

(r)            “Other Stock-Based Awards” means
Awards granted pursuant to Section 11(a) or Section 12.

(s)           “Other Cash-Based
Awards” means Awards granted pursuant to Section 11(b) or
Section 12.

(t)            “Parent” means any “parent
corporation” of the Company, as such term is defined in Section 424(e) of the
Code or any successor provision.  The
term shall include any Parent which becomes such after adoption of the Plan.

(u)           “Participant” means
an employee of the Company or an Affiliate who is selected by the Committee to
participate in the Plan; a Director of the Company who receives Director
Options or other Awards under the Plan; or any consultant, agent, advisor or
independent contractor who is selected by the Committee to participate in the
Plan and who renders bona fide services to the Company or an Affiliate that
(i) are not in connection with the offer and sale of the Company’s

 2
 

securities in a capital-raising transaction and (ii) do not
directly or indirectly promote or maintain a market for the Company’s
securities.  Except where the context
otherwise requires, references in this Plan to “employment” and related terms
shall apply to services in any such capacity.

(v)           “Performance-Based Awards” means
Options, Awards of Restricted Stock, Other Stock-Based Awards and Other
Cash-Based Awards granted pursuant to Section 12.

(w)          “Performance-Based Full-Value Awards”
means all Performance-Based
Awards other than Options and Stock Appreciation Rights.

(x)            “Plan”  means this MathStar, Inc. 2004 Long-Term
Incentive Plan, as amended or supplemented from time to time.

(y)           “Qualified Option”
means a stock option granted pursuant to Section 6 that is intended to
qualify as an incentive stock option under Section 422 of the Code.

(z)            “Restricted Stock” means
any shares of Common Stock granted under Section 10.

(aa)         “Stock Appreciation Right” means
a stock appreciation right granted pursuant to Section 9.

(bb)         “Subsidiary”  means any “subsidiary corporation” of the
Company, as such term is defined in Section 424(f) of the Code.  The term shall include any Subsidiary which
becomes such after adoption of the Plan.

(cc)         “Tenure-Based Full-Value Awards”
means Awards other than Options and Stock Appreciation Rights that are not
Performance-Based Awards.

3.             Shares  Subject to
the Plan

The total number of shares of Common Stock which may
be issued under the Plan is 3,000,000 shares. 
The full number of shares of Common Stock available under the Plan may
be used for any Option or other type of Award. 
The aggregate number of shares of Common Stock available under the Plan
shall be subject to adjustment upon the occurrence of any of the events and in
the manner set forth in Section 13.  If
all or any potion of an Option or Stock Appreciation Right expires or is
terminated, surrendered or cancelled without having been fully exercised, if
Restricted Stock is forfeited, or if any other grant of an Award results in any
shares of Common Stock not being issued, the shares of Common Stock covered by
such Award shall again be available for the grant of Awards under the
Plan.  Any shares of Common Stock which
are used as full or partial payment to the Company upon exercise of an Option
or for any other Award that requires a payment to the Company and any shares
surrendered or withheld to pay employment taxes or other withholding
obligations also shall be available for the grant of Awards under the
Plan.  The issuance of shares of Common
Stock upon the exercise or satisfaction of an Award shall reduce the total
number of shares of Common Stock available under the Plan.  No fractional shares of Common Stock will be
issued under the Plan, but instead any fractional Share will be rounded
downward to the next lowest whole

 3
 

Share.

4.             Administration

(a)           Delegation of Authority.  The Plan shall be administered by the
Committee.  The Committee shall consist
of the Board, unless the Board appoints a Committee consisting of at least two
but fewer than all the members of the Board. 
If the Committee does not consist of the entire Board, the Committee’s
members shall serve at the pleasure of the Board, which may from time to time
appoint members in substitution for members previously appointed and fill
vacancies, however caused, in the Committee. 
The Committee may select one of its members as its Chairperson and shall
hold its meetings at such times and places as it may determine.  A majority of the Committee’s members shall
constitute a quorum.  All determinations
of the Committee made at a meeting in which a quorum is present shall be made
by a majority of its members present at the meeting.  Any decision or determination of the Committee
reduced to writing and signed by a majority of the members shall be fully as
effective as if it had been made by a majority vote at a meeting duly called
and held.

(b)           Authority of Committee.  The Committee shall have exclusive power to
make Awards and to determine when and to whom Awards shall be granted, and the
form, amount and other terms and conditions of each Award, subject to the
provisions of this Plan and any applicable law or regulation.  The Committee may determine whether, to what
extent and under what circumstances Awards may be settled, paid or exercised in
cash, shares of Common Stock or other Awards or other property, or cancelled,
forfeited or suspended.  The Committee
shall have the authority to interpret this Plan and any Award or agreement made
under this Plan, to establish, amend, waive and rescind any rules and
regulations relating to the administration of this Plan, to determine the terms
and provisions of any agreements entered into hereunder (not inconsistent with
this Plan), and to make all other determinations necessary or advisable for the
administration of this Plan.  The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in this Plan or in any Award or agreement in the manner and to
the extent it shall deem desirable.  The
determinations of the Committee in the administration of this Plan, as
described herein, shall be final, binding and conclusive.

(c)           Indemnification.  To the full extent permitted by law, each
member and former member of the Committee and each person to whom the Committee
delegates or has delegated authority under this Plan shall be entitled to
indemnification by the Company against and from any loss, liability, judgment,
damages, cost and reasonable expense incurred by such member, former member or
other person by reason of any action taken, failure to act or determination
made in good faith under or with respect to this Plan.

(d)           Tax Withholding.  The Committee shall have the right to require
payment by a Participant of any amount it may determine to be necessary to
withhold for federal, state, local, non-U.S. income, payroll or other taxes as
a result of the exercise, grant or vesting of an Award.  With the consent of the Committee, the
Participant may pay a portion or all of such withholding taxes by delivering

 4
 

shares of Common Stock to the Company or having the Company withhold
shares of Common Stock with a Fair Market Value or cash equal to the amount of
such taxes that would have otherwise been payable by the Participant.

(e)           Deferral.  In the discretion of the Committee, in
accordance with any procedures established by the Committee and consistent with
the provisions of Section 162(m) of the Code when applied to Participants
who may be “covered employees” thereunder, a Participant may be permitted to
defer the issuance of shares of Common Stock or cash deliverable upon the
exercise of an Option or Stock Appreciation Right, vesting of Restricted Stock,
or satisfaction of Other Stock-Based Awards or Other Cash-Based Awards, for a
specified period or until a specified date, but not beyond the expiration of
the term of such Option, Stock Appreciation Right, Restricted Stock grant, or
other Award.

(f)            Dividends or Dividend Equivalents.  If the Committee so determines, any Award
granted under the Plan may be credited with dividends or dividend equivalents
paid with respect to any underlying shares of Common Stock.  The Committee may apply any restrictions to
the dividends or dividend equivalents that the Committee deems appropriate and
may determine the form of payment, including cash, shares of Common Stock,
Restricted Stock or otherwise.

5.             Term of Plan

This Plan shall commence on October 8, 2004 (the “Effective Date”) and
shall terminate on October 7, 2014 or at such earlier date as the Board of
Directors shall determine.  The
termination of this Plan shall not affect any Awards then outstanding under the
Plan.  No Award may be granted under the
Plan after October 7, 2014.

6.             Terms and Conditions
of Qualified Options

Options granted under the Plan may be Qualified Options.  When the Committee approves a grant of a
Qualified Option to a Participant, it shall prepare or cause to be prepared an
option agreement (“Qualified Option Agreement”) setting forth the terms of the
Qualified Option, and such Qualified Option Agreement shall be signed on behalf
of the Company and by the Participant. 
Qualified Options granted under this Plan shall be subject to the
foregoing and to the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:

(a)           Number of Shares and Exercise Price.  The Qualified Option Agreement shall state
the total number of shares of Common Stock subject to the Qualified Option it
evidences, the Exercise Price per share of Common Stock and the other terms of
the Qualified Option.  The number of
shares of Common Stock subject to the Qualified Option and the Exercise Price
shall be adjustable as provided in Section 12(a) of this Plan.

(b)           Exercisability; Term.  Qualified Options granted under the Plan
shall be exercisable at such time(s) and upon such terms and conditions as may
be determined by the Committee.  However,
subject to Section 6(l), a Qualified Option shall not be exercisable more than
ten (10) years after the date it is granted. 
The period during which a Qualified Option may be exercised once it is

 5
 

granted may not be reduced, except as provided in Sections 6(e), (f)
and (g) of this Plan.

(c)           Exercise of Qualified Options.
Except as otherwise provided in the applicable Qualified Option Agreement, a
Qualified Option may be exercised for all, or from time to time any part, of
the shares of Common Stock for which it is then exercisable.  For purposes of this Section 6, the exercise
date of a Qualified Option shall be the date a written notice of exercise and
full payment of the purchase price are received by the Company in accordance
with this Section 6(c) and Section 6(d) below. 
The purchase price for the shares of Common Stock as to which a Qualified
Option is exercised shall be paid to the Company in cash or its equivalent,
such as by check or wire transfer, or, if provided in the Qualified Option
Agreement or with the consent of the Committee: 
(i) in shares of Common Stock having a Fair Market Value equal to the
aggregate Exercise Price of the shares of Common Stock being purchased and
satisfying such other requirements as may be imposed by the Committee;
provided, that such shares were then purchased on the open market or have been
held by the Participant for at least six months (or such other period as
established from time to time by the Committee in order to avoid adverse
accounting treatment under generally accepted accounting principles); (ii)
partly in cash and partly in such shares; or (iii) if there is a public market
for the shares of Common Stock at such time, through the delivery of
irrevocable instructions to a broker to sell shares of Common Stock obtained
upon the exercise of the Qualified Option and to deliver promptly to the Company
an amount out of the proceeds of such sale equal to the aggregate Exercise
Price for the shares being purchased.

(d)           Manner of Exercise of Qualified
Options.  A Qualified
Option shall be exercised only by the Participant (i) delivering a completed and
signed written notice of exercise to the Company in the form prescribed by the
Company specifying the number of shares of Common Stock as to which the
Qualified Option is being exercised; (ii) delivering the original Qualified
Option Agreement to the Company; and (iii) paying to the Company the full
amount of the Exercise Price for the number of shares of Common Stock with
respect to which the Qualified Option is being exercised as provided in Section
6(c) above.  When shares of Common Stock
are issued to the Participant upon the exercise of that Participant’s Qualified
Option, the fact of such issuance shall be noted on the Qualified Option
Agreement by the Company before the Qualified Option Agreement is returned to
the Participant.  When all shares of Common
Stock covered by the Qualified Option Agreement have been issued by the Company
to the Participant or when the Qualified Option expires, the Participant shall
deliver the Qualified Option Agreement to the Company, which shall cancel it.  After the receipt by the Company of the
written notice of exercise and payment in full of the Exercise Price in
accordance with Sections 6(c) and 6(d), the Company shall deliver to the
Participant exercising the Qualified Option stock certificates evidencing the
number of shares with respect to which the Qualified Option has been exercised,
issued in the Participant’s name; provided, however, that such delivery shall
be deemed effective for all purposes when the Company or its stock transfer
agent (if any) has deposited such stock certificates in the United States mail,
postage

 6
 

prepaid, addressed to the Participant at the address specified in the
written notice of exercise.

(e)           Termination of Employment or
Service.  If a Participant
who holds a Qualified Option shall cease to be employed by or performing
services for the Company or any Affiliate for any reason other than death,
unless the applicable Qualified Option Agreement provides otherwise, such
Qualified Option shall immediately and automatically terminate and be forfeited,
whether or not exercisable, and neither such Participant nor any of the
Participant’s heirs, personal representatives, successors or assigns shall have
any rights with respect to such Qualified Option.  Notwithstanding the foregoing, if an independent
contractor or other non-employment relationship between the Participant and the
Company or an Affiliate is terminated due to the commencement of an employment
relationship with the Company or an Affiliate, this provision shall apply only
upon termination of both the independent contractor and employment relationship
between the Participant and the Company or an Affiliate.  In the case of a Participant who is a natural
person and who ceases to be employed by or performing services for the Company
or an Affiliate due to his or her disability (with disability being determined
in the sole discretion of the Committee), the Committee, at its discretion, may
permit exercise of the portion of the Qualified Option that is exercisable upon
such termination of employment until the earlier of the originally stated date
of termination of the Qualified Option or up to one (1) year after such
termination of employment or other service.

(f)            Death of Participant.  Unless otherwise provided in the applicable
Qualified Option Agreement, if a Participant who is a natural person shall
cease to be employed by or performing services for the Company or any Affiliate
as a result of the Participant’s death, any Qualified Option held by such
Participant may be exercised to the same extent that the Participant would have
been entitled to exercise it at the date of death and may be exercised within a
period of one (1) year after the date of death, but in no case later than the
expiration date of such Qualified Option. 
Such Qualified Option shall be exercised pursuant to Sections 6(c) and
(d) of this Plan by the person or persons to whom the Participant’s rights
under the Qualified Option shall pass by will or the laws of descent and
distribution.

(g)           Termination of Qualified Options Not
Exercisable.  Unless the
applicable Qualified Option Agreement provides otherwise, upon termination of a
Participant’s employment or other services with the Company or an Affiliate for
any reason, including by reason of death or disability of the Participant, any
portion of the Participant’s Qualified Option that is not exercisable shall
automatically and immediately terminate as to such Participant, and the shares
of Common Stock subject to such portion of the Qualified Option shall be
available for the grant of Awards under the Plan.

(h)           No Obligation to Exercise Qualified
Option.  The grant of a
Qualified Option under the Plan shall impose no obligation on the Participant
to exercise such Qualified Option.

 7
 

(i)            Eligible Recipients.  Qualified Options may be granted only to
persons who are employees of the Company or an Affiliate.

(j)            Exercise Price.  Subject to the provisions of Section 6(l),
the exercise price of shares of Common Stock that are subject to a Qualified
Option shall not be less than 100% of the Fair Market Value of such shares at
the time the Qualified Option is granted, as determined in good faith by the
Committee.

(k)           Limit on Exercisability.  The aggregate Fair Market Value (determined
at the time the Qualified Option is granted) of the shares of Common Stock with
respect to which Qualified Options are exercisable by the Participant for the
first time during any calendar year, under this Plan or any other plan of the
Company or any Affiliate, shall not exceed $100,000.  To the extent a Qualified Option exceeds this
$100,000 limit, the portion of the Qualified Option in excess of such limit
shall be deemed a Non-Qualified Option.

(l)            Restrictions for Certain
Shareholders.  The
purchase price of shares of Common Stock that are subject to a Qualified Option
granted to an employee of the Company or any Affiliate who, at the time such
Qualified Option is granted, owns 10% or more of the total combined voting
power of all classes of stock of the Company or of any Affiliate, shall not be
less than 110% of the Fair Market Value of such shares on the date such
Qualified Option is granted, and such Qualified Option may not be exercisable
more than five (5) years after the date on which it is granted.  For the purposes of this subparagraph, the
rules of Section 424(d) of the Code shall apply in determining the stock
ownership of any employee of the Company or any Affiliate.

(m)          Limits on Transferability and
Exercise of Qualified Options. 
Qualified Options shall not be transferable except by will or the laws
of descent and distribution, and Qualified Options shall be exercisable during
a Participant’s lifetime only by such Participant.

(n)           Effect of Not Meeting Requirements.  Subject to the discretion of the Committee to
provide otherwise, if the terms of a Qualified Option do not meet any
requirements of this Plan or the Code necessary to be treated as a Qualified
Option under the Code, such Qualified Option shall not terminate but shall be a
Non-Qualified Option granted under this Plan.

 8
 

7.             Terms and Conditions of
Non-Qualified Options

Options granted under the
Plan may be Non-Qualified Options.  When
the Committee approves a grant of a Non-Qualified Option to a Participant, it
shall prepare or cause to be prepared an option agreement (“Non-Qualified
Option Agreement”) setting forth the terms of the Non-Qualified Option, and
such Non-Qualified Option Agreement shall be signed on behalf of the
Company and by the Participant. 
Non-Qualified Options granted under this Plan shall be subject to the
foregoing and to the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine;
provided, however, that Non-Qualified Options that are Director Options
shall be governed by the provisions of Section 8 to the extent that they
are inconsistent with the provisions of this Section 7.

(a)           Number of Shares and Exercise Price.  The Non-Qualified Option Agreement shall
state the total number of shares of Common Stock subject to the Non-Qualified
Option it evidences, the Exercise Price per share of Common Stock and the other
terms of the Non-Qualified Option.  The
Exercise Price of any Non-Qualified Option may be less than, equal to or
greater than Fair Market Value.  The
number of shares of Common Stock subject to the Non-Qualified Option and the
Exercise Price shall be adjustable as provided in Section 13(a) of this Plan.

(b)           Exercisability; Term.  Non-Qualified
Options granted under the Plan shall be exercisable at such time(s) and upon
such terms and conditions as may be determined by the Committee, but in no
event shall a Non-Qualified Option be exercisable more than ten (10) years
after the date it is granted, except as the Committee may determine under
Section 13(d) of the Plan.  The period
during which a Non-Qualified Option may be exercised once it is granted may not
be reduced, except as provided in Sections 7(e), (f) and (g) of this Plan.

(c)           Exercise of Non-Qualified Options. Except as otherwise provided in the
applicable Non-Qualified Option Agreement, a Non-Qualified Option may be
exercised for all, or from time to time any part, of the shares of Common Stock
for which it is then exercisable.  For
purposes of this Section 7, the exercise date of a Non-Qualified Option
shall be the date a written notice of exercise and full payment of the purchase
price are received by the Company in accordance with this Section 7(c) and
Section 7(d) below.  The purchase price
for the shares of Common Stock as to which a Non-Qualified Option is exercised
shall be paid to the Company in cash or its equivalent, such as by check or
wire transfer or, if provided in the Non-Qualified Option Agreement or
with the consent of the Committee:  (i)
in shares of Common Stock having a Fair Market Value equal to the aggregate
Exercise Price of the shares of Common Stock being purchased and satisfying
such other requirements as may be imposed by the Committee; provided, that such
shares were then purchased on the open market or have been held by the
Participant for at least six months (or such other period as established from
time to time by the Committee in order to avoid adverse accounting treatment
under generally accepted accounting principles); (ii) partly in cash and partly
in such shares; or (iii) if there is a public market for the shares of Common
Stock at such time, through the delivery of irrevocable instructions to a
broker to sell shares of Common Stock obtained upon the exercise of the Non-Qualified
Option and to deliver promptly to the Company an amount out of the proceeds of
such sale equal to the aggregate Exercise Price for the shares being purchased.

 9
 

(d)           Manner of Exercise of Non-Qualified
Options.  A Non-Qualified
Option shall be exercised only by the Participant (i) delivering a completed
and signed written notice of exercise to the Company in the form prescribed by
the Company specifying the number of shares of Common Stock as to which the
Non-Qualified Option is being exercised; (ii) delivering the original Non-Qualified
Option Agreement to the Company; and (iii) paying to the Company the full
amount of the Exercise Price for the number of shares of Common Stock with
respect to which the Non-Qualified Option is being exercised as provided in
Section 7(c) above.  When shares of
Common Stock are issued to the Participant upon the exercise of that
Participant’s Non-Qualified Option, the fact of such issuance shall be noted on
the Non-Qualified Option Agreement by the Company before the Non-Qualified
Option Agreement is returned to the Participant.  When all shares of Common Stock covered by
the Non-Qualified Option Agreement have been issued by the Company to the
Participant or when the Non-Qualified Option expires, the Participant
shall deliver the Non-Qualified Option Agreement to the Company, which
shall cancel it.  After the receipt by
the Company of the written notice of exercise and payment in full of the
Exercise Price in accordance with Sections 7(c) and 7(d), the Company shall
deliver to the Participant exercising the Non-Qualified Option stock
certificates evidencing the number of shares with respect to which the
Non-Qualified Option has been exercised, issued in the Participant’s name;
provided, however, that such delivery shall be deemed effective for all
purposes when the Company or its stock transfer agent (if any) has deposited
such stock certificates in the United States mail, postage prepaid, addressed
to the Participant at the address specified in the written notice of exercise.

(e)           Termination of Employment or
Service.  If a Participant
who holds a Non-Qualified Option shall cease to be employed by or
performing services for the Company or any Affiliate for any reason other than
death, unless the applicable Non-Qualified Option Agreement provides
otherwise, such Non-Qualified Option shall immediately and automatically
terminate and be forfeited, whether or not exercisable, and neither such
Participant nor any of the Participant’s heirs, personal representatives,
successors or assigns shall have any rights with respect to such Non-Qualified
Option.  Notwithstanding the foregoing,
if an independent contractor or other non-employment relationship between the
Participant and the Company or an Affiliate is terminated due to the
commencement of an employment relationship with the Company or an Affiliate, this
provision shall apply only upon termination of both the independent contractor
and employment relationship between the Participant and the Company or an
Affiliate.  In the case of a Participant
who is a natural person and who ceases to be employed by or performing services
for the Company or an Affiliate due to his or her disability (with disability
being determined in the sole discretion of the Committee), the Committee, at
its discretion, may permit exercise of the portion of the Non-Qualified
Option that is exercisable upon such termination of employment until the
earlier of the originally stated date of termination of the Non-Qualified
Option or up to one year after such termination of employment or other service.

 10
 

(f)            Death of Participant.  Unless otherwise provided in the applicable
Non-Qualified Option Agreement, if a Participant who is a natural person
shall cease to be employed by or performing services for the Company or any
Affiliate as a result of the Participant’s death, any Non-Qualified Option
held by such Participant may be exercised to the same extent that the
Participant would have been entitled to exercise it at the date of death and
may be exercised within a period of one (1) year after the date of death,
but in no case later than the expiration date of such Non-Qualified
Option.  Such Non-Qualified Option
shall be exercised pursuant to Sections 7(c) and (d) of this Plan by the person
or persons to whom the Participant’s rights under the Non-Qualified
Option shall pass by will or the laws of descent and distribution.

(g)           Termination of Non-Qualified Options
Not Exercisable.  Unless
the applicable Non-Qualified Option Agreement provides otherwise, upon
termination of a Participant’s employment or other services with the Company or
an Affiliate for any reason, including by reason of death or disability of the
Participant, any portion of the Participant’s Non-Qualified Option that is not
exercisable shall automatically and immediately terminate as to such
Participant, and the shares of Common Stock subject to such portion of the
Non-Qualified Option shall be available for the grant of Awards under the Plan.

(h)           No Obligation to Exercise
Non-Qualified Option.  The
grant of a Non-Qualified Option under the Plan shall impose no obligation on
the Participant to exercise such Non-Qualified Option.

8.             Automatic Grants of
Director Options to Non-employee Directors

(a)           Automatic Grants of Director
Options.  Under the Plan,
each Non-employee Director shall automatically be granted Director Options to
purchase shares of Common Stock as follows:

(i)            Initial
Grants of Director Options.  Each Non-employee Director will be
granted an initial Option (the “Initial Grant”) as follows:

A.            Non-Employee
Directors.  Each person serving as a
Non-employee Director on the Effective Date shall automatically be granted a
Director Option on such date to purchase twenty-five thousand (25,000) shares
of Common Stock.

B.            Future
Non-Employee Directors.  Each person
who is first elected or appointed to serve as a Non-employee Director after the
Effective Date shall automatically be granted a Director Option on the date of
his or her initial election or appointment to the Company’s Board of Directors
to purchase 25,000 shares of Common Stock.

C.            Vesting.  All Director Options granted under Sections
8(a)(i)(A) and (B) shall vest and become exercisable in cumulative installments
with respect to one-third (1/3) of the shares subject to such Director Options
on the first, second and third anniversary

 11
 

dates of the dates of grant of such Director Options,
but only if the holder of the Director Options is then a Director of the
Company.

(ii)           Additional
Grants of Director Options.  On each
anniversary date of the Initial Grant of a Director Option to a Non-employee
Director under the Plan, such Non-employee Director will automatically be
granted an additional Option to purchase five thousand (5,000) shares of Common
Stock, but only if such person is a Non-employee Director on such date.  All Director Options granted under this
Section 8(a)(ii) shall vest and become exercisable as to all of the shares
subject to the Director Options one (1) year after the date of grant of such
Director Option, but only if the holder of the Director Options is then a
Director of the Company.

(iii)          Termination of Director Options.  Subject to Sections 8(f), 8(g) and 8(h), all
Director Options granted under this Section 8(a) shall expire ten (10) years
after the date of grant.

(iv)          Exercise
Price.  The exercise price of
Director Options granted under this Section 8(a) shall be equal to 100% of
the Fair Market Value of one share of Common Stock on the date of grant of the
Director Option.

(b)           Discretionary Grants.  In addition to the Director Options granted
pursuant to Section 8(a), a Director may be granted one or more Options or
other Awards under other provisions of the Plan, and such Options or other
Awards will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole
discretion.

(c)           Director Option Agreements.  When a Director Option is automatically
granted under Section 8(a), or when the Committee approves a grant of a
Director Option, the Committee shall prepare or cause to be prepared an option
agreement (“Director Option Agreement”) setting forth the terms of the Director
Option, and such Director Option Agreement shall be signed on behalf of the
Company and by the Participant.

(d)           Exercise of Director Options.  Except as otherwise provided in the
applicable Director Option Agreement, a Director Option may be exercised for
all, or from time to time any part, of the shares of Common Stock for which it
is then exercisable.  For purposes of
this Section 8, the exercise date of a Director Option shall be the date a
written notice of exercise and full payment of the purchase price are received
by the Company in accordance with this Section 8(d) and Section 8(e)
below.  The purchase price for the shares
of Common Stock as to which a Director Option is exercised shall be paid to the
Company in cash or its equivalent, such as by check or wire transfer or, if
provided in the Director Option Agreement or with the consent of the
Committee:  (i) in shares of Common Stock
having a Fair Market Value equal to the aggregate Exercise Price of the shares
of Common Stock being purchased and satisfying such other requirements as may
be imposed by the Committee; provided, that such shares were then purchased on
the open market or have been held by the Participant for at least six months
(or such other period as established from time to time by the Committee in
order to avoid adverse accounting treatment under generally accepted accounting
principles); (ii)

 12
 

partly in cash and partly in such shares; or (iii) if
there is a public market for the shares of Common Stock at such time, through
the delivery of irrevocable instructions to a broker to sell shares of Common
Stock obtained upon the exercise of the Director Option and to deliver promptly
to the Company an amount out of the proceeds of such sale equal to the
aggregate Exercise Price for the shares being purchased.

(e)           Manner of Exercise of Director
Options.  A Director
Option shall be exercised only by the Participant (i) delivering a completed
and signed written notice of exercise to the Company in the form prescribed by
the Company specifying the number of shares of Common Stock as to which the
Director Option is being exercised; (ii) delivering the original Director
Option Agreement to the Company; and (iii) paying to the Company the full
amount of the Exercise Price for the number of shares of Common Stock with
respect to which the Director Option is being exercised as provided in Section
8(d) above.  When shares of Common Stock
are issued to the Participant upon the exercise of that Participant’s Director
Option, the fact of such issuance shall be noted on the Director Option
Agreement by the Company before the Director Option Agreement is returned to
the Participant.  When all shares of
Common Stock covered by the Director Option Agreement have been issued by the
Company to the Participant or when the Director Option expires, the Participant
shall deliver the Director Option Agreement to the Company, which shall cancel
it.  After the receipt by the Company of
the written notice of exercise and payment in full of the Exercise Price in
accordance with Sections 8(d) and 8(e), the Company shall deliver or cause to
be delivered to the Participant exercising the Director Option stock
certificates evidencing the number of shares with respect to which the Director
Option has been exercised, issued in the Participant’s name; provided, however,
that such delivery shall be deemed effective for all purposes when the Company
or its stock transfer agent (if any) has deposited such stock certificates in
the United States mail, postage prepaid, addressed to the Participant at the
address specified in the written notice of exercise.

(f)            Termination of Status as a Director.  Subject to the provisions of
Sections 8(g) and 8(h), if a Director ceases to serve as a Director, he or
she may, but only within ninety (90) days after the date he or she ceases to be
a Director of the Company, exercise his or her Director Option to the extent
that he or she was entitled to exercise it at the date of such termination.  Any portion of a Director Option that is not
exercisable on the date a Director ceases to be a Director of the Company, and
any portion of a Director Option which the Director was entitled to exercise
that is not exercised within the time specified herein, shall immediately and
automatically terminate and be forfeited, and neither such Director nor any of
the Director’s heirs, personal representatives, successors or assigns shall
have any rights with respect to such Director Option.

(g)           Disability of Director.  Notwithstanding the provisions of Section
8(f) above, if a Director is unable to continue his or her service as a
Director with the Company as a result of his or her total and permanent
disability (as defined in Section 22(e)(3) of the Code), he or she may,
but only within ninety (90) days from the date of termination of such service,
exercise his or her Director Option to

 13
 

the extent he or she was entitled to exercise it at
the date of such termination.  Any
portion of a Director Option that is not exercisable on the date a Director
ceases to be a Director of the Company, and any portion of a Director Option
which the Director was entitled to exercise that is not exercised within the
time specified herein, shall immediately and automatically terminate and be forfeited,
and neither such Director nor any of the Director’s heirs, personal
representatives, successors or assigns shall have any rights with respect to
such Director Option.

(h)           Death of Director.  Upon the death of a Director holding a
Director Option:

(i)            during
the term of the Director Option when such Director was, at the time of his or
her death, a Director of the Company and who shall have been a Director since
the date of grant of the Director Option, the Director Option may be exercised,
at any time within one year following the date of death, by the person who
acquired the right to exercise such Director Option by bequest or inheritance,
but only to the extent of the right to exercise that existed at the date of
death;

(ii)           within
ninety (90) days after the termination of the Director’s status as a Director,
the Director Option may be exercised, at any time within ninety (90) days
following the date of death, by such Director’s estate or by a person who
acquired the right to exercise the Director Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
death; and

(iii)          any portion of a Director Option that is not
exercisable on the date of a Director’s death, and any portion of a Director
Option which the Director was entitled to exercise that is not exercised within
the time specified in Section 8(h)(i) or Section 8(h)(ii), shall
immediately and automatically terminate and be forfeited, and neither such
Director nor any of the Director’s heirs, personal representatives, successors
or assigns shall have any rights with respect to such Director Option.

9.             Terms and Conditions of
Stock Appreciation Rights

(a)           Grants.  The
Committee may grant a Stock Appreciation Right independent of an Option or in connection
with an Option or a portion thereof.  Any
grant of a Stock Appreciation Right under the Plan shall be evidenced by an
Award agreement in such form as the Committee shall from time to time approve
and which shall set forth the terms and conditions of the Stock Appreciation
Right.  The Committee may impose such
terms and conditions upon any Stock Appreciation Right as it deems fit.  A Stock Appreciation Right granted in connection
with an Option or a portion thereof (i) may be granted at the time the related
Option is granted or at any time before the exercise or cancellation of the
related Option, (ii) shall cover the same number of shares of Common Stock
covered by the Option (or such fewer number of shares of Common Stock as the
Committee may determine), and (iii) shall be subject to the same terms and
conditions as such Option except for such additional limitations as are
contemplated by this Section 9 (or such additional limitations as may be
included in the Award agreement evidencing such Stock Appreciation Right).

 14
 

(b)           Terms. The exercise price per share of Common
Stock of a Stock Appreciation Right shall be an amount determined by the
Committee but in no event shall such amount be less than the Fair Market Value
of a share of Common Stock on the date the Stock Appreciation Right is
granted.  In addition, in the case of a
Stock Appreciation Right granted in conjunction with an Option or a portion
thereof, the exercise price shall not be less than the Exercise Price of the
related Option.  Each Stock Appreciation
Right granted independent of an Option shall entitle a Participant upon
exercise to an amount equal to (i) the excess of (A) the Fair Market Value on
the exercise date of one share of Common Stock over (B) the exercise price per
share, times (ii) the number of shares of Common Stock covered by the Stock
Appreciation Right.  Each Stock
Appreciation Right granted in conjunction with an Option or a portion thereof
shall entitle a Participant to surrender to the Company the unexercised Option
or any portion thereof and to receive from the Company in exchange therefor an
amount equal to (I) the excess of (x) the Fair Market Value on the exercise
date of one share of Common Stock over (y) the Exercise Price per share of
Common Stock, times (II) the number of shares of Common Stock covered by the
Option, or portion thereof, which is surrendered.  Payment shall be made in shares of Common
Stock or in cash, or partly in shares and partly in cash (any such shares of
Common Stock valued at such Fair Market Value), all as set forth in the Award
agreement evidencing such Stock Appreciation Right or as otherwise determined
in the discretion of the Committee. 
Stock Appreciation Rights may be exercised from time to time upon actual
receipt by the Company of written notice of exercise stating the number of
shares of Common Stock with respect to which the Stock Appreciation Right is
being exercised.  The date a notice of
exercise is received by the Company shall be the exercise date.

(c)           Termination of Employment or
Service.  If a Participant
who holds a Stock Appreciation Right shall cease to be employed by or
performing services for the Company or any Affiliate for any reason other than
death, unless the applicable Award agreement provides otherwise, such Stock
Appreciation Right shall immediately and automatically terminate and be
forfeited, whether or not exercisable, and neither such Participant nor any of
the Participant’s heirs, personal representatives, successors or assigns shall
have any rights with respect to such Stock Appreciation Right.  Notwithstanding the foregoing, if an
independent contractor or other non-employment relationship between the
Participant and the Company or an Affiliate is terminated due to the
commencement of an employment relationship with the Company or an Affiliate,
this provision shall apply only upon termination of both the independent
contractor and employment relationship between the Participant and the Company
or an Affiliate.  In the case of a
Participant who is a natural person and who ceases to be employed by or
performing services for the Company or an Affiliate due to his or her
disability (with disability being determined in the sole discretion of the
Committee), the Committee, at its discretion, may permit exercise of the
portion of the Stock Appreciation Right that is exercisable upon such
termination of employment until the earlier of the originally stated date of
termination of the Stock Appreciation Right or up to one year after such
termination of employment or other service.

 15

(d)                                 Death of Participant.  Unless otherwise provided in the applicable
Award agreement, if a Participant who is a natural person shall cease to be
employed by or performing services for the Company or any Affiliate as a result
of the Participant’s death, any Stock Appreciation Right held by such
Participant may be exercised to the same extent that the Participant would have
been entitled to exercise it at the date of death and may be exercised within a
period of one (1) year after the date of death, but in no case later than
the expiration date of such Stock Appreciation Right.  Such Stock Appreciation Right shall be
exercised pursuant to Section 9(b) of this Plan by the person or persons to
whom the Participant’s rights under the Stock Appreciation Right shall pass by
will or the laws of descent and distribution.

(e)                                  Termination of Stock Appreciation
Rights Not Exercisable. 
Unless the applicable Award agreement provides otherwise, upon
termination of a Participant’s employment or other services with the Company or
an Affiliate for any reason, including by reason of death or disability of the
Participant, any portion of the Participant’s Stock Appreciation Rights that is
not exercisable shall automatically and immediately terminate as to such
Participant.

10.                               Awards of Restricted Stock

(a)                                  Grant.  Awards
of Restricted Stock subject to forfeiture and transfer restrictions may be
granted by the Committee under the Plan. 
Any Awards of Restricted Stock shall be evidenced by an Award agreement
in such form as the Committee shall from time to time approve and which shall
set forth the terms and conditions of the Award of Restricted Stock.  Subject to the provisions of the Plan, the
Committee shall determine the number of shares of Restricted Stock to be
granted to each Participant; the duration of any period during which, and the
conditions, if any, under which, the Restricted Stock may be forfeited to the
Company; and the other terms and conditions of such Awards.  The Committee may determine a period of time
during which the Participant receiving the Award of Restricted Stock must
remain in the continuous employment of the Company in order for the forfeiture
and transfer restrictions to lapse.  If
the Committee so determines, the restrictions may lapse during any such
restricted period in installments with respect to specified portions of the
shares of Restricted Stock covered by the Award of Restricted Stock.  The Committee may also impose performance or
other conditions that will subject the shares subject to the Award of
Restricted Stock to forfeiture and transfer restrictions.  Notwithstanding anything in this Plan to the
contrary, with respect to Awards of Restricted Stock that are Tenure-Based
Full-Value Awards, the restrictions imposed on such Awards of Restricted Stock
shall not lapse, and the Awards of Restricted Stock shall not vest, with
respect to 100% of the Awards of Restricted Stock in less than three (3) years;
provided, however, that during such three (3)-year period, the restrictions may
lapse and the Awards may vest with respect to less than 100% of the value of
the Award.  The Committee may, at any
time, in its discretion, waive all or any part of any restrictions applicable
to any or all outstanding Awards of Restricted Stock; provided, however, that
the Committee shall not and shall not have the power to waive the restrictions
set forth in the immediately foregoing sentence except in the case of the death
or disability of the Participant holding the Award of

 16
 

Restricted Stock (with disability being determined in the sole
discretion of the Committee) or upon a Change in Control.

(b)                                 Transfer Restrictions. Shares of Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise encumbered, except as
provided in the Plan or the applicable Award agreement.  At the time of the grant of an Award of
Restricted Stock, a stock certificate representing the number of shares of
Restricted Stock awarded thereunder shall be registered in the name of the
Participant and held by the Company. 
Such stock certificate may bear a legend describing the conditions of
the Restricted Stock Award.  Unless the
Award agreement evidencing an Award of Restricted Stock or the Committee
provides otherwise, the Participant receiving the Award of Restricted Stock
shall have all rights of a shareholder with respect to the shares of Restricted
Stock subject to such Award, including the right to receive any dividends and
the right to vote such shares, subject to the following restrictions:  (i) the Participant receiving the Award of
Restricted Stock shall not be entitled to delivery of the stock certificate
until the expiration of the restricted period and the fulfillment of any other
restrictive conditions set forth in the applicable Award agreement; (ii) none
of the shares of Common Stock subject to the Award of Restricted Stock may be
sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or
disposed of during such restricted period or until after the fulfillment of any
such other restrictive condition; and (iii) all of the shares of Restricted
Stock shall be forfeited and all rights of the Participant to such shares shall
terminate, without any further obligation on the part of the Company, unless
the Participant remains in the continuous employment of the Company for the
entire restricted period.  Any shares of
Common Stock, any other securities of the Company and any other property
(except for cash dividends) distributed with respect to the shares subject to
an Award of Restricted Stock shall be subject to the same restrictions, terms
and conditions as such shares.  After the
lapse or termination of the restrictions of an Award of Restricted Stock, or at
such earlier time as otherwise determined by the Committee, a stock certificate
evidencing the shares of Common Stock subject to the Award of Restricted Stock
that bears no legend describing the conditions of an Award of Restricted Stock
shall be delivered to the Participant or his or her beneficiary or estate, as
the case may be.

(c)                                  Dividends. Dividends or dividend equivalents paid
on any shares of Restricted Stock may be paid directly to the Participant,
withheld by the Company subject to vesting of the Restricted Stock pursuant to
the terms of the applicable Award agreement, or may be reinvested in additional
Awards of Restricted Stock, as determined by the Committee in its discretion.

(d)                                 Termination of Employment or
Service.  If a Participant
who holds a Restricted Stock Award shall cease to be employed by or performing
services for the Company or any Affiliate for any reason other than death prior
to the vesting of shares of Restricted Stock granted to such Participant,
unless the applicable Award agreement provides otherwise, such Restricted Stock
Award shall immediately and automatically terminate and be forfeited and
neither such Participant nor any of the Participant’s heirs, personal
representatives, successors or assigns shall have any rights with respect to
such unvested Restricted Stock

 17
 

Award.  Notwithstanding the
foregoing, if an independent contractor or other non-employment relationship
between the Participant and the Company or an Affiliate is terminated due to
the commencement of an employment relationship with the Company or an
Affiliate, this provision shall apply only upon termination of both the
independent contractor and employment relationship between the Participant and
the Company or an Affiliate.  In the case
of a Participant who is a natural person and who ceases to be employed by or
performing services for the Company or an Affiliate due to his or her
disability (with disability being determined in the sole discretion of the
Committee), the Committee, at its discretion, may permit a portion or all of
the shares subject to the Restricted Stock Award held by such Participant to vest
on the date of such termination.

(e)                                  Death of Participant.  Unless otherwise provided in the applicable
Award agreement, if a Participant who is a natural person shall cease to be
employed by or performing services for the Company or any Affiliate as a result
of the Participant’s death prior to the vesting of shares subject to the
Restricted Stock Award granted to such Participant, the Committee, at its
discretion, may permit a portion or all of the shares of Restricted Stock to
vest as of the date of death or to continue the Restricted Stock Award under
such terms and conditions as the Committee may determine.  The person entitled to any such shares of
Restricted Stock shall be the person or persons to whom the Participant’s
rights under the Restricted Stock Award shall pass by will or the laws of
descent and distribution.

(f)                                    Termination of Restricted Stock
Awards Not Vested.  Unless
the applicable Award agreement provides otherwise, upon termination of a
Participant’s employment or other services with the Company or an Affiliate for
any reason, including by reason of death or disability of the Participant, any
portion of the Participant’s Restricted Stock Award that has not vested shall
automatically and immediately terminate as to such Participant, and the shares
subject to such portion of the Restricted Stock Award shall be available for
the grant of Awards under the Plan.

(g)                                 Other Provisions.  Each Award agreement relating to an Award of
Restricted Stock authorized under this Section 10 may contain such other
provisions as the Committee shall deem advisable including, but not limited to,
a requirement that shares of Common Stock acquired under an Award of Restricted
Stock be subject to a restriction on the Participant’s ability to transfer the
shares to third parties without the consent of the Company.

11.                               Other Awards

(a)                                  Other Stock-Based Awards.  The Committee, in its sole discretion, may
grant Awards of shares of Common Stock and Awards that are valued in whole or
in part by reference to, or are otherwise based on, shares of Common Stock or
on the Fair Market Value thereof (“Other Stock-Based Awards”). Such Other
Stock-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine including, without limitation, the right to
receive, or vest with respect to, one or more shares of Common Stock (or the
equivalent cash value of such shares) upon the completion of a specified period
of service, the occurrence of an event and/or the attainment of performance
objectives. Other

 18
 

Stock-Based Awards may be granted alone or in addition to any other
Awards granted under the Plan. Subject to the provisions of the Plan, the
Committee shall determine the number of shares of Common Stock to be awarded to
a Participant under (or otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be settled in cash, shares of
Common Stock or a combination of cash and such shares; and all other terms and
conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all shares so awarded and
issued shall be fully paid and non-assessable). 
Any Other Stock-Based Awards shall be evidenced by an Award agreement in
such form as the Committee shall from time to time approve and which shall set
forth the terms and conditions of the Other Stock-Based Award.  Unless the applicable Award agreement
provides otherwise, if a Participant who holds an Other Stock-Based Award shall
cease to be employed by or performing services for the Company or an Affiliate
for any reason, such Other Stock-Based Award shall be treated by the Committee
as though it is either a Non-Qualified Option or a Restricted Stock Award, as
the Committee shall determine in its discretion.

(b)                                 Other Cash-Based Awards.  In addition to the Awards described above,
and subject to the terms of the Plan, the Committee may grant such other
incentives denominated in cash and payable in cash under the Plan as the
Committee determines to be in the best interests of the Company and subject to
such other terms and conditions as it deems appropriate (“Other Cash-Based
Awards”).  Any Other Cash-Based Awards
shall be evidenced by an Award agreement in such form as the Committee shall
from time to time approve and which shall set forth the terms and conditions of
the Other Cash-Based Award.  Unless the
applicable Award agreement provides otherwise, if a Participant who holds an
Other Cash-Based Award shall cease to be employed by or performing services for
the Company or an Affiliate for any reason, such Other Cash-Based Award shall
be treated as though it is a Stock Appreciate Right or otherwise as the
Committee shall determine in its discretion.

(c)                                  Tenure-Based Full-Value Awards.  Notwithstanding anything in this Plan to the
contrary, with respect to Tenure-Based Full-Value Awards, the restrictions
imposed on such Awards shall not lapse, and the Awards shall not vest, with
respect to 100% of the Awards in less than three (3) years; provided, however,
that during such three (3)-year period, the restrictions may lapse and the
Awards may vest with respect to less than 100% of the value of the Award.  The Committee shall not and shall not have
the power to waive the restrictions set forth in the immediately foregoing sentence
except in the case of the death or disability of the Participant holding the
Tenure-Based Full-Value Award (with disability being determined in the sole
discretion of the Committee) or upon a Change in Control.

12.                               Performance-Based
Awards.

(a)                                  Performance-Based Awards.  Notwithstanding anything to the contrary
herein, the Committee may grant performance-based Options, Awards of Restricted
Stock, Other Stock-Based Awards and Other Cash-Based Awards to Participants (“Performance-Based
Awards”). Any such Awards granted to Participants who

 19
 

may be “covered employees” under Section 162(m) of the Code or any
successor section thereto shall be consistent with the provisions thereof.  In such cases, a Participant’s
Performance-Based Award shall be determined based on the attainment of written
performance goals approved by the Committee for a performance period
established by the Committee (i) when the outcome for that performance period
is substantially uncertain and (ii) by the earlier of (A) ninety (90) days
after the commencement of the performance period to which the performance goal
relates or (B) the number of days which is equal to twenty-five percent (25%)
of the relevant performance period.

(b)                                 Performance Goals.  The performance goals referred to in Section
12(a) must be objective and shall be based upon one or more of the following
criteria:  (i) consolidated earnings
before or after taxes (including earnings before interest, taxes, depreciation
and amortization); (ii) net income; (iii) operating income; (iv) earnings
per share; (v) book value per share of Common Stock; (vi) return on
shareholders’ equity; (vii) expense management; (viii) return on investment;
(ix) improvements in capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvements of profit
margins; (xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv)
costs; (xvi) cash flow; (xvii) working capital; (xviii) return on assets; (xix)
asset turnover; (xx) inventory turnover; (xxi) economic value added
(economic profit); and (xxii) total shareholder return.  The foregoing criteria may relate to the
Company, one or more of its Parents or Subsidiaries or one or more of its
divisions or units, or any combination of the foregoing, and may be applied on
an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code (or any
successor section thereto), the performance goals may be calculated without
regard to the negative effect of unusual or nonrecurring items, extraordinary
items, discontinued operations or cumulative effects of accounting changes. The
Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant
who may be a covered employee and, if they have, shall so certify and ascertain
the amount of the applicable Performance-Based Award. No Performance-Based
Awards will be paid for such performance period until such certification is
made by the Committee. The amount of the Performance-Based Award actually paid
to a given Participant may be less than the amount determined by the applicable
performance goal formula, at the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a performance period
shall be paid to the Participant at such time as determined by the Committee in
its sole discretion after the end of such performance period.

(c)                                  Vesting of Performance-Based Full-Value Awards.  The restrictions imposed on the vesting of
Performance-Based Full-Value Awards shall not lapse, and such Awards shall not
vest, in less than one (1) year.

 20
 

13.                               Adjustments Upon Certain
Events

Notwithstanding any other provisions in the Plan to
the contrary, the following provisions shall apply to all Awards granted under
the Plan:

(a)                                  Generally. 
Upon any change in the outstanding shares of Common Stock after the
Effective Date by reason of any stock dividend, stock split, reverse stock
split, reclassification, combination, exchange of shares or other similar
recapitalization of the Company, there shall be an appropriate adjustment to
(i) the number or kind of shares of Common Stock or other securities
issued or reserved for issuance pursuant to the Plan or pursuant to outstanding
Awards, (ii) the Exercise Price of any Option or the exercise price of any
Stock Appreciation Right, and/or (iii) any other affected terms of such
Awards.  Notwithstanding the foregoing,
no fractional shares shall be issued or paid for.  No adjustment shall be made under this
Section 13(a) upon the issuance by the Company of any warrants, rights or
options to acquire additional Common Stock or of securities convertible into
Common Stock unless such warrants, rights, options or convertible securities
are issued to all shareholders of the Company on a proportionate basis.

(b)                                 Change in Control.  Notwithstanding
anything contained in this Plan to the contrary, and unless otherwise provided
in the applicable Award agreement at the time of grant, in the event of a “Change
in Control” (as defined below), the following shall occur as of the effective
date of such Change in Control with respect to any and all Awards outstanding
as of the effective date of such Change in Control:  (i) any and all Awards granted hereunder
will be, as nearly as may reasonably be, automatically converted into the same
type of Award to acquire the kind and amount of shares of stock or other
securities or property (including cash) which the Participant would have owned
or have been entitled to receive as of the effective date of the Change in
Control had the Awards been exercised or realized in full immediately before the
effective date of the Change in Control; (ii) any vesting schedule of all
Awards shall remain unchanged; (iii) appropriate adjustment shall be made in
the application of the provisions of all outstanding Awards with respect to the
rights and interests thereafter of each Participant, to the end that the
provisions set forth in each Award shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
or other securities or property (including cash) thereafter deliverable under
the Award; and (iv) any restrictions imposed on Awards, including Awards of
Restricted Stock and Performance-Based Awards of Restricted Stock, shall remain
unchanged.

(c)                                  Definition of Change of Control.  For purposes of this Section 13, “Change in
Control” means:

(i)                                    The
sale, lease, exchange or other transfer, directly or indirectly, of all or
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company;

(ii)                                 The
approval by the Company’s shareholders of any plan or proposal for the
liquidation or dissolution of the Company;

 21
 

(iii)                               Any person or entity
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of more than fifty percent (50%) of the combined
voting power of the outstanding securities of the Company ordinarily having the
right to vote at elections of directors who were not beneficial owners of at
least fifty percent (50%) of such combined voting power as of the Effective
Date; or

(iv)                              A
merger or consolidation to which the Company is a party if the shareholders of
the Company immediately prior to the effective date of such merger or
consolidation have, solely on account of ownership of securities of the Company
at such time, “beneficial ownership” (as defined in Rule 13d-3 under the
Exchange Act) immediately following the effective date of such merger or
consolidation of securities of the surviving company representing less than
fifty percent (50%) of the combined voting power of the surviving corporation’s
then outstanding securities ordinarily having the right to vote at elections of
directors.

The provisions of this Section shall similarly apply
to successive transactions of the types described in Sections 13(c)(i) through
(iv).

(d)                                 Additional Adjustments of Awards.  Subject to the above provisions, the
Committee shall have the discretion, exercisable at any time before a sale,
merger, consolidation, reorganization, liquidation, dissolution or other Change
in Control transaction, to take such further action as it determines to be
necessary or advisable with respect to Awards. 
Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of,
or restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise and lifting restrictions and other modifications,
and the Committee may take such actions with respect to all Participants, to
certain categories of Participants or to only individual Participants.  The Committee may take such action before or
after granting Awards to which the action relates and before or after any
public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation, dissolution or Change in Control that is the
reason for such action.  The grant of an
Award under the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.

14.                               Shares
Acquired for Investment

Shares of Common Stock acquired by a Participant under
this Plan shall be acquired by the Participant for investment and without
intention of resale unless, in the opinion of counsel to the Company, such
shares may be purchased without any investment representation.  Where an investment representation is deemed
necessary, the Committee may require a written representation to that effect by
the Participant as a condition of a Participant exercising an Option or
otherwise obtaining shares of Common Stock pursuant an Award granted under this
Plan, and the Committee may place an appropriate legend on the stock
certificates evidencing the shares of Common Stock so issued indicating that
such shares have not been registered under federal or state securities laws and
describing the restrictions on transfer. 
Each Award

 22
 

shall be subject to the requirement that if, at any
time, the Committee shall determine in its discretion that the listing,
registration or qualification of the shares of Common Stock subject to the
Award upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, if necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the issuance or purchase of shares of Common Stock thereunder, then such
Award shall not be granted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.

15.                               No Right to Employment,
Service as a Director or Awards

The granting of an Award under the Plan shall impose
no obligation on the Company or any Affiliate to continue the employment of a
Participant and shall not lessen or affect the Company’s or the Affiliate’s
right to terminate the employment of such Participant.  Nothing in the Plan will interfere with or
limit in nay way the right of the Company, the Board or the Company’s
stockholders to terminate the directorship of any Director at any time, nor
confer upon any Director any right to continue to serve as a Director of the
Company.  No Participant or other person
shall have any claim to be granted any Award, and there is no obligation for
uniform treatment of Participants or holders or beneficiaries of Awards.  The terms and conditions of Awards and the
Committee’s determinations and interpretations with respect thereto need not be
the same with respect to each Participant.

16.                               Other
Benefit and Compensation Programs

Payments and other benefits received by a Participant
under an Award shall not be deemed a part of a Participant’s regular, recurring
compensation for purposes of any termination, indemnity or severance pay laws
and shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan, contract or similar arrangement
provided by the Company or an Affiliate, unless expressly so provided by such
other plan, contract or arrangement or the Committee determines that an Award
or portion of an Award should be included to reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive cash compensation.

17.                               Successors and Assigns

The Plan shall be binding on all successors and
assigns of the Company and a Participant including, without limitation, the
estate of such Participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.

18.                               Nontransferability of
Awards; Designation of Beneficiary

(a)                                  Nontransferability.  No Award or interest in an Award may be sold,
assigned, pledged (as collateral for a loan or as security for the performance
of an obligation or for any other purpose) or transferred by the Participant or
made subject to attachment or similar proceedings otherwise than by will or by
the applicable laws of descent and distribution, except to the extent a
Participant designates one or more beneficiaries on a Company-approved form who
may exercise the Award or receive payment under the Award after the Participant’s
death.  During a Participant’s lifetime,
an Award may be exercised only by the Participant.

 23
 

(b)                                 Designation of Beneficiary.  A Participant may designate a beneficiary to
succeed to the Participant’s Awards under the Plan in the event of the
Participant’s death by filing a beneficiary form with the Company and, upon the
death of the Participant, such beneficiary shall succeed to the rights of the
Participant to the extent permitted by law and the terms of this Plan and the
applicable Award agreement.  In the
absence of a validly designated beneficiary who is living at the time of the
Participant’s death, the Participant’s executor or administrator of the
Participant’s estate shall succeed to the Awards, which shall be transferable
by will or pursuant to laws of descent and distribution.

19.                               Amendments or Termination

The Board may amend,
alter or discontinue the Plan, but no amendment, alteration or discontinuation
shall be made without the consent of a Participant if such action would
diminish any of the rights of the Participant under any Award theretofore
granted to such Participant under the Plan; provided,
however, that the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of
the Code or other applicable laws.

20.                               International Participants

With respect to
Participants who reside or work outside the United States of America, the
Committee may, in its sole discretion, amend the terms of the Plan or adopt
such modifications, procedures or subplans with respect to such Participants as
are necessary or desirable to ensure the viability of the benefits of the Plan,
comply with applicable foreign laws or obtain more favorable tax or other
treatment for a Participant, the Company or an Affiliate; provided, however,
that no such changes shall apply to the Awards to Participants who may be “covered
employees” under Section 162(m) of the Code or any successor thereto unless
consistent with the provisions thereof.

21.                               General

(a)                                  Issuance of Shares of Common Stock.  Notwithstanding any other provision of the
Plan, the Company shall have no obligation to issue or deliver any shares of
Common Stock under an Award granted under the Plan or make any other
distribution of benefits under the Plan unless, in the opinion of the Company’s
counsel, such issuance, delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act of 1933, as amended, or any successor thereto (the “Securities
Act”) or the laws of any state or foreign jurisdiction) and the applicable
requirements of any securities exchange or similar entity.  The Company shall be under no obligation to
any Participant to register for offering or resale or to qualify for an
exemption from registration under the Securities Act, or to register or qualify
under the laws of any state or foreign jurisdiction, any Awards, shares of
Common Stock, security or interest in a security paid or issued under, or
created by, the Plan, or to continue in effect any such registrations or
qualifications if made.  The Company may
issue stock certificates evidencing shares of Common Stock with such legends
and subject to such restrictions on transfer and stop transfer instructions as
counsel for the Company deems necessary or desirable for compliance by the
Company with federal, state and foreign securities laws.  The Company may also

 24
 

require such other action or agreement by the Participants as may from
time to time be necessary to comply with applicable securities laws.

(b)                                 Stock Certificates.  To the extent this Plan or any applicable
Award agreement provides for the issuance of stock certificates to reflect the
issuance of shares of Common Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange or market on which such shares are
traded or quoted.

(c)                                  No Rights as a Shareholder.  Unless otherwise provided by the Committee or
in the Plan or an Award agreement evidencing an Award or in any other written
agreement between a Participant and the Company or an Affiliate, no Award shall
entitle the Participant to any cash dividend, voting or other right of a
shareholder unless and until the date of issuance under the Plan of any shares
of Common Stock that are subject to such Award.

(d)                                 No Trust or Fund.  The Plan is intended to constitute an “unfunded”
plan.  Nothing contained herein shall require
the Company to segregate any monies, other property, or shares of Common Stock,
or to create any trusts, or to make any special deposits for any immediate or
deferred amounts payable to any Participant, and no Participant shall have any
rights that are greater than those of a general unsecured creditor of the
Company.

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

(f)                                    Choice of Law.  The validity, construction, interpretation,
administration and effect of the Plan, and rights relating to the Plan and to
Awards granted under the Plan, shall be governed by the substantive laws, but
not the choice of law rules, of the State of Minnesota.

22.                               Effective Date

The Plan shall be effective on October 8, 2004 (the “Effective
Date”), which is the date it was approved by the Board.  Amendments to the Plan were approved by the
Board on May 10, 2005, March 23, 2006 and February 5, 2007 and the Plan,
as so amended, was approved by the Company’s shareholders on June 10,
2005, May 18, 2006 and May 17, 2007.

 25

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