Document:

Exhibit 10-2 - Collectors Universe, Inc. 2006 Management Bonus Plan

    

      Exhibit
        10.2

      

      COLLECTORS
        UNIVERSE, INC.

      

      DESCRIPTION
        OF 2006 MANAGEMENT BONUS COMPENSATION PLAN

      

      1. Purposes
        and Administration of the Plan.

       

      1.1     Purpose.
        The
        primary purpose of the 2006 Management Bonus Compensation Plan (the
“2006
        Plan)
        of
        Collectors Universe, Inc. (the “Company”) is to provide meaningful incentives
        and financial awards to Participants in the 2006 Plan for making significant
        contributions to the achievement, by the Company, of financial and strategic
        goals and objectives for the fiscal year ending June 30, 2006 (“Fiscal
        2006”),
        that
        will promote the interests of the Company and its stockholders by making
        a
        substantial portion of each Participant’s compensation for Fiscal 2006 dependent
        on the Company’s achievement of those goals and objectives.

       

      1.2     Administration
        of the 2006 Plan.
        The
        2006 Plan shall be administered by the Compensation Committee of the Board
        of
        Directors of the Company (the “Committee”).
        The
        Committee shall have the authority to interpret and construe the 2006 Plan
        and
        to adopt all necessary rules and regulations for administering the 2006 Plan.
        All decisions and determinations of the Committee with respect to the 2006
        Plan
        shall be final and binding on and nonappealable by the Company and the
        Participants. 

       

      
        	 	
                2.

              	
                Plan
                  Participants.

              

      

       

      The
        Compensation Committee has designated the following executive officers of
        the
        Company as the participants in the 2006 Plan (the “Participants”):

       

      
        	
                Name

              	 	
                Position
                  with the Company

              
	 	 	 
	
                Michael
                  R. Haynes

              	 	
                Chief
                  Executive Officer

              
	 	 	 
	
                David
                  G. Hall

              	 	
                President

              
	 	 	 
	
                Joseph
                  J. Wallace

              	 	
                Chief
                  Financial Officer

              
	 	 	 
	
                Michael
                  J. Lewis

              	 	
                Senior
                  Vice President - Finance 

              

      

       

      3.     Performance
        Goals and Bonus Compensation Awards.
        

       

      3.1     Establishment
        of Performance Goals.
        The
        Compensation Committee will establish, in written form, for each Participant,
        performance goals for Fiscal 2006 that will be based on financial performance
        goals that have been established by the Board of Directors in the Company’s
        Fiscal 2006 Annual Operating Plan (“Corporate Goals”). Additionally, the
        Committee may establish individualized performance objectives (“MBOs”), the
        achievement of which, by a Participant, in the view of the Committee, is
        likely
        to enhance the Company’s financial performance in Fiscal 2006 or establish a
        foundation for increased profitability over the longer-term. The Committee
        also
        will establish, in written form (i) threshold Corporate Goals or MBOs,
        which are those that must be met before a Participant will earn any bonus
        compensation under the 2006 Plan, (ii) target performance goals, which will
        be based on one or more of the financial performance goals set forth in the
        2006
        Annual Operating Plan and may also include, in the case of any particular
        Participant, individualized MBOs, and (iii) maximum financial performance
        goals for the Company which substantially exceed the target performance goals
        established by the Committee and which, if achieved by the Company, will
        entitle
        the Participant to a maximum bonus award under the 2006 Plan. Corporate Goals
        may be established for quarterly periods within, or for the entirety of,
        Fiscal
        2006 (each, a “Measurement
        Period”).
        

       

      3.2     Fiscal
        2006 Performance Goals.
        The
        Financial Performance Goals for 2006 have been established on the basis of
        one
        or more of the following criteria: Fiscal 2006 quarterly or annual (i) net
        revenues, (ii) operating income, and (iii) pre-tax income.
        Individualized MBOs that have been established for a Participant consist
        of
        specific goals that the Committee believes would, if achieved, either improve
        the performance of Participant and thereby increase the likelihood that Fiscal
        2006 Corporate Financial Performance Goals or strategic objectives will be
        achieved or establish a foundation for increased Company profitability over
        the
        longer-term, or both. 

       

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      3.3     Bonus
        Compensation Awards.
        In
        conjunction with the adoption of the 2006 Plan, the Compensation Committee
        will
        determine the bonus compensation that may be awarded to each Participant
        under the 2006 Plan, expressed in dollar amounts or percentages of salary
        or by
        such other metric as the Committee may deem to be appropriate. Those bonus
        compensation amounts will be based on a number of factors, which may include
        a
        Participant’s (i) expected contribution to the Company’s Fiscal 2006 or
        longer term financial performance, (ii) position and level of
        responsibilities with the Company, (iii) salary level, and (iv) past
        individual performance. Schedule A hereto contains information regarding
        the
        bonus compensation awards that each Participant will have an opportunity
        to earn
        under the Fiscal 2006 Plan. 

       

      3.4     Determinations
        of Performance and Bonus Compensation Awards.
        

       

      (a) The
        Committee shall, in its sole and absolute discretion, determine the extent
        to
        which the 2006 performance goals have been attained. In the case of any
        quarterly financial performance goals, such determinations shall be made
        within
        thirty-five (35) days after the end of the fiscal quarter, or as soon as
        practicable thereafter, in accordance with the same generally accepted
        accounting principles that are used to prepare the Company’s quarterly financial
        statements that are filed with the Securities and Exchange Commission (the
        “SEC”)
        and
        may be based directly on the financial statements to be included in the
        Company’s Quarterly Report on Form 10-Q for the particular fiscal quarter for
        which such determinations are made.  In the case of annual financial
        performance goals, such determinations shall be made as soon as practicable
        after the end of Fiscal 2006, in accordance with the same generally accepted
        accounting principles that are used to prepare the Company’s annual financial
        statements that are filed with the SEC.

       

      (b) If
        the
        Committee determines that the quarterly or annual (as applicable) threshold
        performance goal established for a Participant was not achieved, then, that
        Participant shall not be entitled to receive any bonus compensation award
        for
        the applicable quarterly or annual Measurement Period under the 2006 Plan.
        If it
        is determined, instead, that the threshold performance goal was met or exceeded,
        then, subject to Section 4 below, the Participant shall become entitled to
        receive a bonus compensation award under this 2006 Plan in an amount which
        shall
        be determined based on the extent to which the threshold performance goal
        was
        exceeded and whether the applicable target performance goal was achieved
        or
        exceeded or the applicable maximum performance goal was achieved. Additionally,
        to be eligible to receive a bonus compensation award under this 2006 Plan
        for
        any Measurement Period, a Participant must, in the opinion of the Committee,
        have performed his MBOs in a satisfactory manner and must have been performing
        services for the Company as of the last day of that Measurement Period. The
        determination as to whether a Participant was performing services for the
        Company on the last day of any such Measurement Period also shall be made
        by the
        Committee, in its sole and absolute discretion. 

       

      3.5     Changes
        to Performance Goals.
        At any
        time prior to the end of Fiscal 2006, the Compensation Committee may adjust
        or
        change any of the Fiscal 2006 performance goals to reflect the occurrence
        of
        (i) any extraordinary event, (ii) any material corporate transactions,
        (iii) any material changes in corporate capitalization, accounting rules or
        principles or in the Company’s methods of accounting, (iv) any material
        changes in applicable law, or (v) any other material change of similar
        nature (each, an “Extraordinary
        Event”),
        but
        only if any such Extraordinary Event was not reasonably foreseeable at the
        time
        the performance goals then in effect under this Plan were established and
        would,
        in the sole opinion of the Committee (x) make it unlikely that such
        performance goals will be achieved or (y) result in the achievement of any
        performance goals that would not have been likely to be achieved in the absence
        of such Extraordinary Event. Notwithstanding the foregoing, however, the
        occurrence of changes in the competitive environment or changes in economic
        or
        market conditions in the Company’s markets, whether or not expected or
        reasonably foreseeable, shall not by themselves constitute Extraordinary
        Events
        that may be the basis of a change in performance goals and no change in
        performance goals shall be permitted to affect any bonus compensation award
        based on performance achieved during a Measurement Period that ended prior
        to
        the occurrence of any such Extraordinary Event.

       

      
        3.6     Payment
          of Benefits.
          Subject
          to Section 4 below, the Company shall pay any bonus compensation award
          earned by a Participant in cash, less applicable payroll and other withholdings,
          within thirty (30) days following the Committee’s determinations as set forth in
          Section 3.4 above. All payments made by check under the 2006 Plan shall
          be
          delivered in person or mailed to the last address of a Participant that
          is set
          forth in the records of the Company or shall be deposited to the Participant’s
          direct deposit account on file with the payroll department of the Company.
          Each
          Participant shall be responsible for furnishing the Company with the
          Participant’s current address and any changes that may occur therein and, if the
          Participant desires a bonus compensation award to be deposited in a direct
          deposit account, the information and authorization required to enable the
          Company to cause the award to be deposited into such account.

      

      
        

      

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        4.     Amendments
          to and Termination of 2006 Plan.
          Notwithstanding anything to the contrary that may be contained elsewhere
          in this
          Plan:

         

        4.1     Amendments
          to and Modifications of the 2006 Plan.
          The
          Committee shall have the sole, absolute and unconditional discretion to
          amend or
          modify the 2006 Plan at any time or from time to time with or without or
          without
          notice to the Participants. Without limiting the generality of the foregoing,
          no
          Participant shall have any legally binding right to receive any unpaid
          bonus
          award under this Plan prior to the date on which that bonus award is actually
          paid to the Participant and, accordingly, the Committee, in the exercise
          of its
          sole, absolute and unconditional discretion, at any time prior to the payment
          of
          any unpaid bonus award hereunder (i) may reduce the amount of such bonus
          award or (ii) may determine that no bonus award will be paid to the
          Participant under this Plan, whether or not the Participant has achieved
          or
          exceeded the performance goals or targets theretofore established by the
          Committee or has been notified of the pendency of an unpaid bonus award
          under
          this Plan. In no event, however, shall any amendment to the 2006 Plan affect
          any
          bonus awards that had previously been paid to any of the Participants under
          this
          Plan.

         

        4.2     Termination
          of the 2006 Plan.
          The
          Committee, in its sole, absolute and unconditional discretion, may
          (i) terminate this Plan at any time, with or without notice to the
          Participants, and (ii) determine that, as a result of such termination, no
          bonus awards under the Plan will be paid or that any unpaid bonus awards
          under
          the Plan shall be reduced; provided, however, that no such termination
          shall
          affect any bonus awards that were theretofore paid to any of the Participants
          under this Plan. 

      

       

       

      5.     Miscellaneous
        Provisions in the Plan

       

      5.1     No
        Enlargement of Employee Rights.
        Nothing
        in the 2006 Plan shall be construed to create or imply any contract of
        employment between any Participant and the Company, to confer upon any
        Participant any right to continue in the employ of the Company or to confer
        upon
        the Company any right to require any Participant’s continued employment.

       

      5.2     Rights
        Not Alienable.
        Any
        rights provided to a Participant under the 2006 Plan may not be assigned,
        transferred or alienated, except by will or pursuant to the laws of descent
        and
        distribution, and shall be earned only by and paid solely to or for the account
        of the Participant.

       

      5.3     Other
        Compensation Plans.
        The
        adoption of the 2006 Plan shall not affect any other compensation plans in
        effect for the Company, nor shall the 2006 Plan preclude the Company from
        establishing or awarding any other forms of compensation for employees, officers
        or directors of the Company, including the Participants.

       

      5.4     Governing
        Law.
        To the
        extent not preempted by federal law, the 2006 Plan shall be determined in
        accordance with the laws of the State of California.

       

      5.5     No
        Other Understandings or Agreements with respect to the 2006 Plan.
        This
        Plan document contains all of the terms and provisions of and all conditions
        applicable to the 2006 Plan, and supersedes any previous discussions,
        communications, understandings or agreements, written or oral, between the
        Company and any Participant with respect to the 2006 Plan as well as all
        prior
        actions that may have been taken by the Committee relating to the 2006 Plan.
        

       

      

       

      

       

       

    

     

     

     

    
      
        
           

        

        
        

      

      
        3

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      A

    

    DESCRIPTION
      OF FISCAL 2006 PERFORMANCE GOALS TARGET INCENTIVE
      AWARDS

    

    The
      Fiscal 2006 performance goals established for Michael R. Haynes, the Company’s
      CEO, Joseph J. Wallace, the Company’s CFO, and Michael J. Lewis, the Company’s
      Senior Vice President-Finance, are comprised of (i) overall Company net
      revenue and pre-tax earnings goals, and (ii) individualized performance
      goals (“MBOs”). The Fiscal 2006 performance goals established for David G. Hall,
      the Company’s President, who is responsible for the performance of the Company’s
      Collectibles Authentication and Grading Division, are the contributions made
      by
      that Division to the Company’s quarterly operating income in Fiscal 2006 (the
“Division Contributions”). Set forth below are the threshold, target and maximum
      bonus awards that each of them has the opportunity to receive under the
      2006 Plan based on the extent to which, if any, they are able to achieve or
      exceed any one or more of those goals.

    
 

    
      	 	 	
              Potential
                Bonus Awards 

              as
                a Percent of Annual Salary(1)

            	 	 
	
               

              Participants 

            	 	
               

              Threshold
                

              Award

            	 	
               

              Target
                

              Award

            	 	
               

              Maximum

              Award

            	 	 
	 	 	 	 	 	 	 	 	 
	
              Michael
                R. Haynes, CEO

            	 	 	
              25.0

            	
              %

            	 	
              50.0

            	
              %

            	 	
              150.0

            	
              %

            	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
              David
                G. Hall, President

            	 	 	
              N/A

            	 	 	
              50.0

            	
              %

            	 	
              50.0

            	
              
                
                  
                    %

                  

                

              

            	 (2)
	 	 	 	 	 	 	 	 	 	 	 	 
	
              Joseph
                J. Wallace, CFO

            	 	 	
              20.0

            	
              %

            	 	
              40.0

            	
              %

            	 	
              120.0

            	
              %

            	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
              Michael
                J. Lewis, Senior Vice President -- Finance

            	 	 	
              15.0

            	
              %

            	 	
              30.0

            	
              %

            	 	
              90.0

            	
              %

            	 

    

     

     

     

    
      	 	
              (1)

            	
              Bonus
                compensation will be pro-rated if the threshold or target performance
                goal
                is exceeded but the next higher performance goal is not achieved.
                

            

    

     

     

    
      	 	
              (2)

            	
              Mr.
                Hall’s target bonus is also the maximum bonus that Mr. Hall can earn under
                the 2006 Plan.Exhibit 10.3

 

INTERMEC, INC.

2002 DIRECTOR STOCK OPTION AND FEE PLAN

 

As Amended Effective January 1, 2006

 

1.              Purpose. The UNOVA, Inc. 2002 Director Stock
Option and Fee Plan (the “Plan” ) is
intended to provide an incentive to members of the board of directors of Intermec, Inc.,
a Delaware corporation (the “Company” ),
who are neither officers nor employees of the Company, to remain in the service
of the Company and increase their efforts for the success of the Company and to
encourage such directors to own shares of the Company’s stock, thereby aligning
their interests more closely with the interests of the Company’s shareholders.
The Plan is also intended to assist the Company in attracting experienced and
qualified candidates to become members of the Board.

 

2.              Definitions.

 

“1997
Plan” means the UNOVA, Inc.
Director Stock Option and Fee Plan, adopted September 24, 1997, and
amended July 27, 1999.

 

“Adverse
Tax Consequences under Section 409A” means the accelerated inclusion, 20 percent
additional tax rate, and associated interest charge that will apply to any
deferred compensation included in taxable income of a Director under Section 409A(a)(1)(B) of
the Code.

 

“Annual
Grant” means the
annual grant of Options, if any, made to Directors under Section 7(a) of
the Plan.

 

“Average
Quarterly Price” means
the average of the Fair Market Value of Common Stock on each trading date of a
calendar quarter.

 

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

 

“Cash
Account” means the
bookkeeping account established by the Company for the deferral of Fees by
Directors which will be credited with interest pursuant to Section 6(d) hereof.

 

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

 

“Common
Stock” means the
common stock, par value $.01 per share, of the Company.

 

“Deferral
Election” means an
election pursuant to Section 6 hereof to defer receipt of Fees into a
Share Account or Cash Account.

 

“Deferred
Amounts” mean the
amounts credited to a Director’s Share Account or Cash Account pursuant to a
Deferral Election or otherwise pursuant to Section 6(h).

 

“Director”
means a member of the
Board who is neither an officer nor an employee of the Company. A director of
the Company shall not be deemed to be an employee of the Company solely by
reason of the existence of a consulting contract between such director and the
Company or any subsidiary thereof pursuant to which the director agrees to
provide consulting services as an independent consultant to the Company or its
subsidiaries on a regular or occasional basis for a stated consideration. The
term “Director” as used in this Plan shall include any person who may hereafter
become an advisory director of the Company, as that term is used in the Company’s
By-Laws.

 

 

“Effective
Date” means January 1,
2002, subject to approval by the Company’s shareholders as provided in Section 12
hereof.

 

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

 

“Fair
Market Value” means,
as of any given date, the average of the highest and lowest reported sales prices
of the Common Stock on the New York Stock Exchange Composite Tape or, if not
listed on such exchange, on any other national securities exchange on which the
Common Stock is listed or on NASDAQ. If there is no regular public trading
market for such Common Stock, the Fair Market Value of the Common Stock shall
be determined by the Board in good faith.

 

“Fees” means Retainer Fees and Meeting Fees.

 

“Meeting
Fees” means fees
scheduled to be paid to a Director for attendance at Board or committee
meetings.

 

“Options”
means the options to
purchase Common Stock granted to a Director under Section 7(a) as an Annual
Grant.

 

“Retainer
Fees” means the
annual retainer scheduled to be paid to a Director for the calendar year and
additional annual fees scheduled to be paid to a Director for serving as Chair
of a Board committee.

 

“Share
Account” means the
bookkeeping account established by the Company for the deferrals of Fees by
Directors, which will be credited with Share Units pursuant to Section 6(a) hereof.

 

“Share
Election” means the
election by a Director to receive shares of Common Stock in lieu of Meeting
Fees as set forth in Section 5(b) hereof.

 

“Share
Unit” means a share
of Common Stock credited as a bookkeeping entry to a Director’s Share Account.
Each Share Unit shall represent the right to receive one share of Common Stock.

 

3.              Administration of the Plan. Subject to the express provisions of the
Plan, the Board will have complete authority to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the Plan;
to determine the terms and provisions of the respective option agreements
(which need not be identical); and to make all other determinations necessary
or advisable for the administration of the Plan. The Board shall have the right
to delegate its authority to administer the Plan to the Governance and
Nominating Committee or another Board committee consisting solely of
independent Directors. The Board’s or such committee’s determination on the
matters referred to in this Section 3 shall be conclusive.

 

4.              Stock Reserved for the Plan. The number of shares of Common Stock
authorized for issuance under this Plan is 500,000 plus (i) the number of
shares reserved and available for issuance under the 1997 Plan on the Effective
Date of this Plan and (ii) any shares subject to grants made under the
1997 Plan, but which subsequently expire or are canceled, forfeited, or
terminated. The number of shares of Common Stock issuable under this Plan shall
be subject to adjustment pursuant to Section 10 hereof. Shares of Common
Stock delivered hereunder may be either authorized but unissued shares or
previously issued shares reacquired and held by the Company as treasury shares.

 

2

 

5.                                      Terms and Conditions of Payment
of Fees in the Form of Shares or Options.

 

(a)          Retainer Fees. Each Director shall receive in the form of
Common Stock (subject to a Deferral Election) all, or such lesser amount as the
Board may determine from time to time in the exercise of its judgment, of
his or her Retainer Fees earned in each calendar year. The shares of Common
Stock (and cash in lieu of fractional shares) issuable under this Section 5(a) shall
be issued quarterly in accordance with Section 5(c) hereof.

 

(b)          Meeting Fees; Share Election. Each Director may make an annual
election (the “Share Election”) to receive in
the form of Common Stock (subject to a Deferral Election) all of his or
her Meeting Fees earned in each calendar year. The shares of Common Stock (and cash
in lieu of fractional shares) issuable pursuant to a Share Election shall be
issued quarterly in accordance with Section 5(c) hereof. The Share
Election must be in writing and delivered to the Secretary of the Company on or
prior to December 31 of the calendar year preceding the calendar year in
which the applicable Meeting Fees are to be earned; provided,
however, that any Director who commences
service on the Board on or subsequent to January 1 of a calendar year may make
a Share Election during the thirty-day period immediately following the
commencement of his or her directorship. A Share Election, once made, shall be
irrevocable for the calendar year with respect to which it is made and shall
remain in effect for future calendar years unless revoked in writing or
modified by a subsequent Share Election with respect to future calendar years on
or prior to December 31 of the calendar year preceding the calendar year
in which such revocation shall take effect and in accordance with the
provisions hereof.

 

(c)          Issuance of Shares. Shares of Common Stock issuable to a Director
pursuant to Sections 5(a) and 5(b) shall be issued to such Director
on the first business day following the end of each calendar quarter. The total
number of shares of Common Stock to be so issued shall be determined by
dividing (x) the dollar amount of the Director’s Retainer Fees for the
preceding calendar quarter and any Meeting Fees for the preceding calendar
quarter to which a Share Election applies, by (y) the Average Quarterly Price
for the preceding quarter. In no event shall the Company be required to issue
fractional shares. In the event that a fractional share of Common Stock would
otherwise be required to be issued, an amount in lieu thereof shall be paid in
cash based upon the Fair Market Value of such fractional share on the last
business day of the preceding calendar quarter.

 

6.              Terms and Conditions of Deferral
Elections.

 

(a)          In General. Each Director may irrevocably elect
annually to defer receiving all or a portion of (i) the shares of Common
Stock that would otherwise be issued in connection with such Director’s
Retainer Fees in respect of a calendar year, (ii) the shares of Common
Stock that would otherwise be issued upon a Share Election, or (iii) such
Director’s Meeting Fees in respect of a calendar year that are not subject to a
Share Election (a “Deferral Election”).
A Director who has made a Deferral Election with respect to shares of Common
Stock shall have the number of shares of Common Stock that are the subject of
the Deferral Election credited to a Share Account in the form of Share
Units. A Director who has made a Deferral Election with respect to Meeting Fees
that are not subject to a Share Election shall have the amount of deferred fees
credited to a Cash Account.

 

(b)          Timing of Deferral Election. The Deferral Election shall be in writing and
delivered to the Secretary of the Company on or prior to December 31 of
the calendar year preceding the calendar year in which the applicable Fees are
to be earned; provided, however,
that a Director who commences service on the Board on or subsequent to January 1
of a calendar year may make

 

3

 

a
prospective Deferral Election during the thirty-day period immediately following
the commencement of his or her directorship, and, accordingly, such Deferral
Election shall apply only with respect to compensation paid for services to be
performed subsequent to the Deferral Election. A Deferral Election, once made,
shall be irrevocable for the calendar year with respect to which it is made and
shall remain in effect for future calendar years unless revoked or modified by
a subsequent Deferral Election with respect to future calendar years on or
prior to December 31 of the calendar year preceding the calendar year in
which such revocation shall take effect and in accordance with the provisions
hereof. No subsequent Deferral Election may be made with respect to Fees
earned during the current calendar year or prior calendar years.

 

(c)          Share Accounts. Each Share Account shall be deemed to be
invested in shares of Common Stock. Whenever regular cash dividends are paid by
the Company on outstanding Common Stock, there shall be credited to the
Director’s Share Account additional Share Units equal to (i) the aggregate
dividend that would be payable on outstanding shares of Common Stock equal to
the number of Share Units in such Share Account on the record date for the
dividend, divided by (ii) the Fair Market Value of the Common Stock on the
payment date of the dividend.

 

(d)          Cash Accounts. Each Director’s Cash Account shall be
credited with interest on the last day of each calendar quarter calculated on
the basis of the average daily balance in the Cash Account during the calendar
quarter. The interest rate for any calendar quarter shall be the prime rate of
interest as reported in the Wall Street Journal as
the prevailing prime rate of interest on the first business day of the calendar
quarter.

 

(e)          Commencement of Payment. Except as otherwise provided in Section 6(g) hereof,
a Director’s Deferred Amounts shall become payable in the January following
the year in which the Director terminates service as a Director. Payments from
a Share Account shall be made by converting Share Units into Common Stock on a
one-for-one basis, with payment of fractional shares to be made in cash based
upon the Fair Market Value of such fractional share on the last business day of
the preceding calendar quarter.

 

(f)            Timing of Payments. Subject to Section 6(g) hereof,
each Director shall elect in his or her Deferral Election to receive payment of
his or her Deferred Amounts either in a lump sum or in two to fifteen
substantially equal annual installments.

 

(g)         Distributions Upon Death,
Disability or Unforeseeable Emergency. In the event of a Director’s death, payment of the remaining portion of
the Director’s Deferred Amounts will be made to the Director’s beneficiary (or,
if no beneficiary has been designated, to the Director’s estate or other legal
representative) in the same form as the Director has elected; provided, however, that if permitted under the Code and the rules and
regulations promulgated thereunder, such payment of the remaining portion of
the Director’s Deferred Amounts will be made to the Director’s beneficiary (or,
if no beneficiary has been designated, to the Director’s estate or other legal
representative) in a lump sum as soon as practicable following the Director’s
death. Notwithstanding any Deferral Election, in the event of disability (as
defined in Section 409A(a)(2)(C) of the Code) or severe financial
hardship to a Director resulting from an illness or accident of the Director,
the Director’s spouse or a dependent (as defined in Section 152(a) of
the Code) of the Director, loss of the Director’s property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Director, a Director may, by providing
written notice to the Secretary of the Company, withdraw any portion of the
Share Units in his or her Share Account (in an equivalent number of shares of
Common Stock) and/or cash in his or her Cash Account, provided that, as
determined under regulations of the Secretary of the Treasury, the amounts
distributed with respect to an

 

4

 

emergency
do not exceed the amounts necessary to satisfy such emergency plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
after taking into account the extent to which such hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise or by
liquidation of the participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

 

(h)         No Account Transfers. A Director may not transfer or convert a
Share Account to a Cash Account, or vice versa.

 

(i)            Status of Accounts. The Share and Cash Accounts shall not be
funded, and all Deferred Amounts shall be held in the general assets of the
Company and be subject to the general creditors of the Company.

 

7.              Annual Grants of Stock Options.

 

(a)          Annual Grants. Commencing in 2005, Options to purchase 10,000
shares of Common Stock shall be granted to each Director automatically on the
first business day of January in each year. Any person who becomes a
Director at any other time of the year shall receive a pro-rata portion of the
Annual Grant, based upon the time remaining in such year. The Board shall have
the right to increase or decrease the number of shares of Common Stock subject
to the Annual Grant as the Board may determine is necessary or appropriate
to attract and retain persons to serve as members of the Board, it being
understood that all such grants and changes in the number of options granted
shall comply with Section 16 of the Exchange Act and the rules promulgated
thereunder and the Code.

 

(b)          Option Price Per Share. Options granted pursuant to this Section 7
shall be exercisable at a price per share equal to the Fair Market Value of the
Common Stock on the date of the grant of the Option.

 

(c)          Period of Option. Each Option granted pursuant to this Section 7
shall immediately vest, shall be immediately exercisable, and shall remain
exercisable until the tenth anniversary of the date of grant, at which time it
shall expire.

 

(d)          Exercise of Options. Options may be exercised only by written
notice to the Company at its corporate office accompanied by payment of the
full consideration for the shares as to which they are exercised. The purchase
price is to be paid in full to the Company upon the exercise of the option (i) by
cash, including a personal check payable to the order of the Company, or (ii) by
delivering Common Stock already owned by the optionee for a period of at least
six months (valued at Fair Market Value as of the date of delivery), or (iii) any
combination of cash and Common Stock so valued.

 

(e)          Nonstatutory Options. No option granted hereunder shall constitute
an “incentive stock option” as that term is defined in the Code.

 

8.              Modification, Extension, and
Renewal of Options. The
Board shall have the power to modify, extend, or renew outstanding options and
authorize the grant of new options in substitution therefor, provided that such
power may not be exercised in a manner which would (i) alter or
impair any rights or obligations of any option previously granted without the
written consent of the optionee, (ii) adversely affect the qualification
of the Plan or any other stock-related plan of the Company under Rule 16b-3
under the Exchange Act, (iii) lower the exercise price of existing
options, (iv) substitute new options for previously granted options having
a higher exercise price, or (v) cause an option to become

 

5

 

subject
to Section 409A of the Code.

 

9.              Limitation of Rights.

 

(a)          No Right to Continue as a
Director. Neither the
Plan, nor the granting of an option or the making of a Share Election or
Deferral Election, or any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a Director for any period of time, or at
any particular rate of compensation.

 

(b)          No Shareholder’s Rights. An optionee or a Director who has made a
Share Election or Deferral Election (or his or her representative) shall have
no rights as a shareholder with respect to the shares covered by his or her Options
or Share Election or to any Share Units with respect to a Deferral Election
until the date of the actual issuance to him or her (or such representative) of
shares of Common Stock (either through the Company’s Direct Registration System
or by certification) and, subject to Sections 6(c) and 10 hereof, no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such shares are issued.

 

10.       Effect of Certain Changes in
Capitalization. In the
event of any change in corporate capitalization (such as a stock split), any
corporate transaction (such as any merger, consolidation or separation
(including a spinoff)), any other distribution of stock or property of the
Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Section 368 of the Code) or any partial or
complete liquidation of the Company, the Board shall equitably adjust the Share
Account to reflect any such transaction and shall make such substitution or
adjustments in the aggregate number and kind of shares reserved for issuance
under the Plan, in the number, kind and option price of shares subject to
outstanding Options, in the number and kind of shares subject to Annual Grants
pursuant to Section 7 and/or such other equitable substitution or
adjustments in the terms of Options as it may determine to be appropriate
in its sole discretion; provided, however, that the number of shares subject to any Option
shall always be a whole number.

 

11.       Change in Control.

 

(a)          Definition. For purposes of the Plan, a “Change in Control” shall mean a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the assets of the Company as provided in Section 409A(2)(A)(v) of
the Code and the regulations thereunder and interpretations thereof, as the
same may be applicable from time to time.

 

(b)          Consequences of Change in Control.
 Notwithstanding
anything in the Plan to the contrary, upon the occurrence of a Change in
Control:

 

(i)  all Share Units credited to a Share Account shall be
converted into Common Stock and together with all Deferred Amounts credited to
a Cash Account shall be transferred as soon as practicable to each Director;

 

(ii)  Fees earned in respect of the calendar quarter in which
the Change in Control occurs shall be paid in cash as soon as practicable; and

 

(iii)  all Options shall immediately vest and become
exercisable in full.

 

(c)          Definition Modified to Extent
Required by Section 409A of the Code. Notwithstanding the foregoing, to the extent necessary to comply with Section 409A
of the Code,

 

6

 

in
the case of any payment hereunder that in the determination of the Company
would be considered “nonqualified deferred compensation” subject to Section 409A
and as to which, in the determination of the Company, the requirements of Section 409A(a)(2)(A)(v) of
the Code would apply, an event or occurrence described above shall be
considered a “Change of Control” only if it also constitutes a change of
ownership or effective control of the Company, or a change in ownership of the
Company’s assets, described in Section 409A(a)(2)(A)(v) of the Code.

 

12.       Term of Plan. This Plan shall be effective as of the
Effective Date, subject to approval of the Plan by the shareholders of the
Company at the first annual meeting of shareholders after the Effective Date.
The Plan shall terminate on December 31, 2011, unless earlier terminated
by the Board. Notwithstanding the Plan’s termination, amounts shall be
delivered pursuant to any Deferral Election made prior to the Plan’s termination
in accordance with such election. Options may be granted under the Plan at
any time prior to the termination of the Plan. Deferral Elections and Share
Elections may not be made for any Fees which would be paid following the
date of the termination of the Plan. If the shareholders of the Company do not
approve this Plan, then this Plan shall be void, all Share Elections and
Deferral Elections made with respect to this Plan shall be deemed to be Share
Elections and Deferral Elections under the 1997 Plan, and all shares of Common
Stock issued, Share Units credited to a Director’s Share Account, and Fees
credited to a Director’s Cash Account under this Plan shall be deemed to have
been issued and credited under the 1997 Plan.

 

13.       Amendment; Termination. The Board may at any time and from time
to time alter, amend, suspend, or terminate the Plan in whole or in part; provided, however, that
no amendment which is required by any regulation, law or stock exchange rule to
be approved by shareholders shall be effective unless it is approved by the
shareholders of the Company entitled to vote thereon. Notwithstanding the
foregoing, no amendment shall affect adversely any of the rights of any
Director, under any option or under any election theretofore in effect under
the Plan, or with respect to Deferred Amounts, without such Director’s consent.

 

14.       Nontransferability. No Option, or right or interest of any
Director in Deferred Amounts, shall be transferable by a Director other than (i) by
will or by the laws of descent and distribution, (ii) pursuant to a
qualified domestic relations order (as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended), or (iii) in
the case of an Option, as otherwise expressly permitted under the applicable
option agreement including, if so permitted, pursuant to a gift to such
optionee’s family, whether directly or indirectly or by means of a trust or
partnership or otherwise. All Options or rights with respect to Deferred
Amounts shall be exercisable, during the Director’s lifetime, only by the
Director or by the guardian or legal representative of the Director or an
alternate payee pursuant to a qualified domestic relations order or, in the
case of an Option, by any person to whom such Option is transferred pursuant to
the preceding sentence. Under the Plan, it is understood that the term “optionee”
includes the guardian and legal representative of the Director named in the
option agreement and any person to whom an Option is transferred by will or the
laws of descent and distribution, pursuant to a qualified domestic relations
order or as otherwise described above.

 

15.       Beneficiaries. The Board shall establish such procedures as
it deems appropriate for a Director to designate a beneficiary to whom any
amounts payable in the event of a Director’s death are to be paid or by whom
any Options held by a Director may be exercised following his or her
death. Directors shall make a beneficiary election with respect to Deferred
Amounts at the same time that a Deferral Election is made.

 

16.       Compliance with Law, Etc.  Notwithstanding any other provision of
the Plan or agreements made pursuant hereto, the Company shall not be required
to issue or deliver any certificate or certificates for shares of Common Stock
under the Plan prior to fulfillment of all of the following conditions:

 

7

 

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

 

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

 

(c)  the obtaining of any other consent, approval, or permit
from any state or federal governmental agency, which the Board shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.

 

17.       Notice. Any written notice to the Company required by
any of the provisions of the Plan shall be addressed to the Secretary of the
Company and shall become effective when it is received.

 

18.       Governing Law. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State of
Delaware, without reference to principles of conflict of laws, and shall be
construed accordingly.

 

19.       Headings. The headings of sections and subsections
herein are included solely for convenience of reference and shall not affect
the meaning of any of the provisions of the Plan.

 

20.       Termination of the 1997 Plan. If the shareholders of the Company approve
this Plan as provided in Section 12 hereof, the 1997 Plan shall terminate
in accordance with Section 12 thereof as of the date of such approval. In
that case, Share Accounts and Cash Accounts maintained under the 1997 Plan
shall be converted to and maintained as Share Accounts and Cash Accounts under
this Plan. If the shareholders of the Company do not approve this Plan, then
the 1997 Plan shall continue in full force and effect until terminated in accordance
with the provisions thereof, all grants of options made pursuant to Sections 5(d) and
5(e) shall be null and void, and all Share Elections and Deferral
Elections made under this Plan shall be deemed to have been made under the 1997
Plan.

 

21.       Savings Clause. This Plan is intended to comply in all
respects with Section 409A of the Code and the rules and regulations
promulgated thereunder. In the event that any provision of this Plan would
result in Adverse Tax Consequences or similar adverse tax consequences to the
Company or any Director, such provision shall without further action by the
Board be modified, restricted or nullified, as appropriate to avoid such adverse
tax consequences. In addition, if the time or form of any payment election
is made in accordance with this Plan, but in violation of Section 409A of
the Code, then such payment election shall be null and void, and all amounts
deferred shall be paid or payments thereof shall commence on the earliest date
permitted in accordance with Section 409A of the Code without the
imposition of any Adverse Tax Consequences under Section 409A or other
adverse tax consequences to the Director and the Company.

 

8

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