Document:

Prepared by R.R. Donnelley Financial -- Form of Transition Services Agreement

 EXHIBIT 10.2 
  
 FORM OF TRANSITION SERVICES AGREEMENT 
  
  This TRANSITION SERVICES AGREEMENT is
dated as of May 21, 2002, by and between Circuit City Stores, Inc., a Virginia corporation (“Circuit City Stores”) and CarMax, Inc., a Virginia corporation (“CarMax”). 
   

RECITALS 
  
 WHEREAS, Circuit City
Stores and CarMax have entered into the Separation Agreement dated as of                          , 2002 (the “Separation
Agreement”), providing for the conveyance by Circuit City Stores and certain Subsidiaries of Circuit City Stores to CarMax of all of the assets and liabilities attributed to the CarMax Group to be held by CarMax or one or more of the CarMax
Subsidiaries. 
  
 WHEREAS, CarMax has been operated by its parent Circuit City Stores, and has been dependent upon
Circuit City Stores for various support and services since CarMax’s inception; 
  
 WHEREAS, in connection with
the implementation of the Separation Agreement, CarMax will need certain administrative and infrastructure support in connection with the ongoing administrative and operation of CarMax; 
  
 WHEREAS, as a condition to the respective obligations of the parties to the Separation Agreement to consummate the transactions contemplated therein, the Separation
Agreement requires the execution and delivery of this Agreement pursuant to which Circuit City Stores agrees to provide CarMax certain transition services upon the terms set forth herein. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth hereinafter, the parties hereby agree as follows: 
  
 ARTICLE I 
  
 Section 1.1    Definitions.    Terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Separation Agreement. In addition,
the following terms, as used herein, have the following meanings: 
  
 “Fully Loaded Cost” shall mean, with
respect to any service supplied, the sum of (i) the allocable portion of all direct and indirect costs included in the functional department’s cost center relating to services supplied, determined in accordance with Circuit City Stores’
cost accounting practices on the date hereof, plus (ii) an amount equal to ten percent (10%) of the amount in clause (i). 
  
 “Service” or “Transition Services” shall mean each distinct service or all services listed in Column A of Schedule 1 and Schedule 2 attached hereto. 

  
 ARTICLE II 
  
  Section 2.1    Duration of Services on Schedule 1.    This Agreement shall be effective as of the time
and day on which Circuit City Stores redeems its CarMax Group Stock in exchange for shares of CarMax Common Stock pursuant to the Separation Agreement (“Redemption Date”) and shall continue, with respect to each Service listed on Schedule
1, through the date or for the period shown in Column B for such Service. At the option of CarMax, exercised by no less than thirty (30) days written notice to Circuit City Stores, the Service(s) specified in such written notice shall continue for a
renewal period of three (3) months. The provision of Service(s) specified in each written notice may be extended for consecutive three (3) month periods (or portions thereof); provided; however, that in no event will any Transition
Service be provided for more than [twelve (12) months] from the Redemption Date for the Services listed on Schedule 1. CarMax may, upon ninety (90) days written notice to Circuit City, terminate the utilization of any Service listed on Schedule 1
during the initial term or any renewal period. 
   
  Section 2.2    Duration
of Services on Schedule 2.    This Agreement shall be effective as of the Redemption Date and shall continue, with respect to each Service listed on Schedule 2, through the date or for the period shown in Column B
of Schedule 2 for such Service. Computer Center and Telecommunications shall be considered “Extended Services.” At the option of CarMax, exercised by no less than thirty (30) days written notice to Circuit City Stores, the Service(s)
specified in such written notice shall continue for a renewal period of six (6) months. The provision of Service(s) specified in each written notice may be extended for consecutive six (6) month periods (or portions thereof); provided;
however, that in no event will any Transition Service be provided for more than twenty-four (24) months, or forty-eight (48) months for Extended Services, from the Redemption Date for the Services listed on Schedule 2. CarMax may, upon ninety
(90) days written notice to Circuit City Stores, terminate the provision of any Service listed on Schedule 2 during the initial term or any renewal period. 
   
 Section 2.3    Employees.    Employees of Circuit City or its Affiliates who are made available to provide the Services shall at all
times remain the employees of Circuit City or its Affiliates and shall not at any time be deemed the agents, representatives, employees or leased employees of CarMax. Circuit City is solely responsible for designating the individual employees to be
made available to CarMax to provide the Services, and for the wages, salary, benefits, expenses or other costs (including workers’ compensation claims or any other employment related liability) (“collectively, employee costs”)
associated with such individuals. All other employees or personnel provided by CarMax or any third party in connection with this Transition Services Agreement shall remain the employees or personnel of CarMax or such third party and shall not be
deemed the agents, representatives, employees or leased employees of Circuit City or its Affiliates. Neither Circuit City nor its Affiliates shall be responsible for the employee costs associated with work to be performed by such employees or
personnel of 
 

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 CarMax or any third party. Neither party shall be responsible for the acts of or for supervising the other party’s employees or personnel.

  
  Section 2.4    Efforts for Alternative Sources of
Services.    Notwithstanding the foregoing but except with respect to the Extended Services, CarMax shall use all reasonable best efforts to establish, as quickly as reasonably possible, their own systems
and employees to perform the Services supplied to them by Circuit City Stores and, upon at least ninety (90) days prior written notice to Circuit City Stores, to terminate its use of each such respective Service. 
   
 ARTICLE III 
  
 Section 3.1    Performance.    Circuit City Stores agrees to provide timely to CarMax the Transition Services listed on Schedule 1 and 2 to the extent
requested by CarMax, at levels consistent with and in no event to exceed the extent to which such Transition Services had been made available to CarMax before the date hereof. 
  
 Section 3.2    Cost of Services.    The cost of each Service shall be the Fully Loaded Cost. 

 
  Section 3.3    Invoice and Payment.    Circuit
City shall provide an invoice to CarMax with respect to each calendar month in which Transition Services are provided. The invoice shall set forth in detail the Transition Services performed during that month and cost associated with each Transition
Service. Invoices shall be payable by CarMax within thirty (30) days of the invoice date (the “Payment Date”). 
   
  Section 3.4    Late Payment.    Any payment due and unpaid under this Transition Services Agreement by the Payment Date shall bear interest from the Payment
Date at a rate per annum of two percent (1%) over the prime rate of interest published by SunTrust Bank, or its successor, on the first day of each month, for large commercial lenders. In addition, Circuit City may, after giving thirty (30) days
written notice to CarMax, suspend Services under this Transition Services Agreement until Circuit City has been paid in full all amounts due for Transition Services rendered and expenses incurred. Notwithstanding the foregoing or anything else to
the contrary, there shall be no suspension of Transition Services during which there is a good faith dispute concerning any invoice. 
   
  Section 3.5    Performance by Third Parties.    CarMax understands that during the term of this Agreement, Circuit City Stores may decide to
have all or a portion of any particular Service performed in whole or in part, by a third-party provider. In such event, Circuit City Stores may assign all or a portion of its obligations hereunder relating to such Service to such third-party
provider; provided however, that no such assignment (i) shall diminish in any material respect the nature, scope or timeliness of the Transition Services to be provided by Circuit City Stores or (ii) increase the amounts payable by CarMax for
Transition Services under 3(b). CarMax agrees to provide such third-party provider CarMax’s specified service level requirements for the remainder of the term of this Agreement, such service level to reflect the service level then provided by
Circuit City Stores for the remainder of the term of this Agreement. 
  

 3 

  
 Section 3.6    Force
Majeure. 
  

	 	(a)
	 
	Circuit City Stores may suspend or reduce, in whole or in part, the performance or supply of any or all of the Transition Services or any of its obligations
hereunder to the extent it is materially impeded in its ability to provide such Service as a result of an act of God, labor dispute, war, riot, fire or other casualty, acts of any governmental body, or other cause or conditions beyond such
party’s reasonable control (each a “Force Majeure Event”). Circuit City Stores shall use its reasonable best efforts to restore the suspended or reduced Transition Service. Any Transition Services not provided by reason of this
section shall be promptly resumed upon the elimination of the Force Majeure Event. 
 

  

	 	(b)
	 
	During any period in which any Transition Services are reduced or suspended pursuant to Section 3.6(a), CarMax shall not be obligated to remit payment for the
reduced, suspended or terminated portion of such Transition Services. 
 

  
 Section
3.7    Limitation of Liability of Circuit City Stores. 
  

	 	(a)
	 
	Neither Circuit City Stores, nor its Affiliates, Subsidiaries, employees or agents shall be liable to CarMax for, and CarMax shall release and discharge and
shall indemnify and hold harmless Circuit City Stores, its Affiliates, Subsidiaries, employees and agents from any and all claims, liabilities, actions, suits, judgments, losses, injuries, damages (including, without limitation, incidental or
consequential damages), costs and expenses arising out of or connected with any act or omission of Circuit City Stores, its Affiliates, Subsidiaries, employees or agents, with respect to the Transition Services listed on Schedule 1 or Schedule 2, or
any failure to provide the Transition Services listed on Schedule 1 or Schedule 2 to CarMax other than (i) a refusal by Circuit City Stores in material breach of this Agreement or (ii) gross negligence or willful misconduct of Circuit City Stores,
its employees or agents. 
 

  

	 	(b)
	 
	CarMax shall not use the Transition Services listed on Schedule 1 or Schedule 2 for any purpose other than the operation of their internal business. CarMax will
indemnify Circuit City Stores against any loss, damage or expense incurred by Circuit City Stores as a result of CarMax’s misuse or employment of any such Transition Service. 
 

  
 Section 3.8    Absence of Warranties.    The parties expressly
agree that no warranty shall be implied under this Agreement, whether warranties of utility or of fitness for any particular purpose or of merchantability or of any other type and, further, that no warranties of any sort are made herein.

  
 ARTICLE IV 
  
 Section 4.1    Notices.    All notices and other communications required or permitted hereunder shall be in writing (including
telex, facsimile transmission or similar writing) and shall be given: 
  

	 	(a)
	 
	If to Circuit City Stores to: 
 

  

 4 

  
  
	 Circuit City Stores, Inc.
 
	 9950 Mayland Drive
 
	 Richmond, Virginia 23223-1464
 
	 Attn:    Michael T. Chalifoux
 
	 Fax:    (804) 418-8286
 

 
   

	 	(b)    If
	 
	to CarMax to: 
 

  
 
	 CarMax, Inc.
 
	 4900 Cox Road
 
	 Glen Allen, Virginia 23060-3314
 
	 Attn:    Keith D. Browning
 
	 Fax:    (804) 967-2978
 

 
  
 or to such other person or to such other address or facsimile number as the party to whom
such notice is to be given may have furnished the other parties in writing by like notice. If mailed, any such communication shall be deemed to have been given on the third business day following the day on which the communication is posed by
registered or certified mail (return receipt requested). If given by any other means it shall be deemed to have been given when delivered to the address specified in this Section. 
  
 Section 4.2    Interpretation.    The headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement. 
  
 Section
4.3    Books and Records.    In addition to the maintenance of the data relating to each Service that shall be transferred to CarMax as described in Attachment A, Circuit City shall maintain
books, records, documents and other evidence, consistent with normal accounting procedures and practices, sufficient to accurately and properly reflect the performance of the Services hereunder and the amounts due Circuit City hereunder. CarMax or
its representatives shall have access at all reasonable times to such records for the purposes of auditing and verifying the accuracy of the invoices submitted by Circuit City. Circuit City shall maintain such books and records five years from the
completion of all Services. 
  
  Section
4.4    Confidentiality.    Each party acknowledges that it may be necessary to disclose Confidential Information (as defined below) to the other in order to facilitate the
provision of Services under this Transition Services Agreement. Except as agreed by the parties pursuant to this Transition Services Agreement, each party agrees not to use, copy, disclose to third parties (other than consultants engaged in the
provision of Services) or to publish any Confidential Information of the other which is (i) confidential under applicable law, or (ii) proprietary and confidential information including, without limitation, the following: (a) any trade secret,
know-how, invention, software program, application, documentation, schematic, procedure, contract, information, knowledge, data, process, technique, design, drawing, program, formula or test data, work in progress, engineering, manufacturing,
marketing, financial, sales, supplier, customer, employee, investor, or business information, whether in oral, written, graphic or electronic form; or (b) any document, diagram, photograph, drawing, computer program or other communication that is
either conspicuously marked “confidential”, 
  

 5 

 known or reasonably should have been known by the other party to be confidential, or is of a proprietary nature, and is learned or disclosed in
the course of discussions, studies or other work undertaken between the parties. Notwithstanding the foregoing, the Parties shall have the right to disclose any information necessary to comply with any request or order of a Governmental Authority or
court. Nothing in this Section shall be deemed to limit or restrict in any way the right of a Governmental Authority to exercise its authority to audit or review the books or records of a party or any Affiliate of a party, but the party must advise
the other party of the pending disclosure as described below. 
  
 If a party intends to disclose Confidential
Information to any Governmental Authority or court, the Disclosing party shall, to the extent doing so does not violate any such request or order, advise the Non-Disclosing party prior to disclosure and cooperate in any effort by the Non-Disclosing
party to minimize the amount of Confidential Information disclosed, secure confidential treatment of such Confidential Information, or seek permission from such Governmental Authority or court to revise the Confidential Information in a manner
consistent with the interests of the Parties and in a manner which meets the requirements of the Governmental Authority or court. 
  
 Except to the extent information is confidential under applicable law, any information transmitted to either party will not be deemed Confidential Information if that information is: 
  

	 	(a)
	 
	In the receiving party’s possession without restriction on disclosure prior to disclosure hereunder; 
 

  

	 	(b)
	 
	At the time of disclosure, generally available to the public without restriction on disclosure except to the extent then applicable corporate policies on
confidentiality and handling of proprietary information would have prevent disclosure; 
 

  

	 	(c)
	 
	After disclosure, generally available to the public without restriction on disclosure, by publication or otherwise, through no fault of receiving party; or

 

  

	 	(d)
	 
	After the time of disclosure, received from a third party who imposes no obligation of confidentiality and who, insofar as the receiving party can reasonably
determine, did not acquire any such Confidential Information directly or indirectly from the other party subject to requirements of confidentiality. 
 

  
 The provisions of this Section shall survive the termination of the Transition Services and shall bind the parties and their successors and assigns for a period of five (5)
years after initial disclosure of such Confidential Information. Notwithstanding the foregoing, to the extent information may not be disclosed under applicable law, such information shall remain subject to this confidentiality provision until no
longer protected under applicable law. 
  
 Section 4.5     Governing Law and
Venue.     This Transition Services Agreement shall be governed by and construed in accordance with the domestic laws of the Commonwealth of Virginia, without regard to its conflicts of law rules.

  
 Section 4.6    Severability.    Any term or
provision of this Transition Services Agreement that is held invalid or unenforceable in any situation shall not affect the validity or 
 

 6 

 enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other
situation; provided, however, that the remaining terms and provisions of this Transition Services Agreement may be enforced only to the extent that such enforcement in the absence of any invalid terms and provisions would not result in
(a) deprivation of a party of a material aspect of its original bargain upon execution of this Transition Services Agreement, (b) unjust enrichment of a party, or (c) any other manifestly unfair or inequitable result. 
  
 Section 4.7    Miscellaneous.    This Agreement
(i) together with the Separation Agreement, constitutes the entire agreement relating to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject
matter hereof and in the event of a conflict between this Agreement and the Separation Agreement, the terms of this Agreement shall control; (ii) is an independent agreement, the rights and obligations of the parties to which shall not be affected
by any provision of, or remedy arising under or with respect to, the Separation Agreement or any other agreement between the parties, except to the extent expressly provided in any such agreement; and (iii) is not intended to and shall not confer
upon any other person or business entity, other than the parties hereto or any permitted assignees, any rights or remedies with respect to the subject matter hereof. 
  
 Section 4.8    Counterparts.    This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. 
  
 *        *        *        *        * 
 

 7 

  
 IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their
duly authorized officers. 
  
 
	 CIRCUIT CITY STORES, INC.
 
	 
	 By:
 	 	 

	 
	 Name:
 	 	 

	 
	 Title:
 	 	 

 
  
 
	 CARMAX, INC.
 
	 
	 By:
 	 	 

	 
	 Name:
 	 	 

	 
	 Title:
 	 	 

 
  
 

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 SCHEDULE 1 
  
 Transition Services 
  
  
	 Column A
 Transition
Services
 
	 	 Column B
 Initial Term of
Service
 

	 Human Resources
 	 	 6 Months
 
	 Purchasing of Television Advertising
 	 	 6 Months
 
	 Cafeteria Services
 	 	 6 Months
 
	 STS
 	 	 6 Months
 

 
   
 

 9 

  
 SCHEDULE 2 
  
 Transition Services 
  
  
	 Column A
 Transition Service

	 	 Column B
 Initial Term of
Service
 

	 Computer Center
 	 	 24 Months
 
	 Telecommunications
 	 	 24 Months
 
	 Administrative Services
 	 	 12 Months
 
	 Tax Services
 	 	 12 Months
 
	 Payroll
 	 	 12 Months
 
	 Benefits Administration
 	 	 12 Months
 

 
   
 

 10<PAGE>

                                                                    Exhibit 4.12

                              AMENDED AND RESTATED
                            PRENTISS PROPERTIES TRUST
                         TRUSTEES' SHARE INCENTIVE PLAN
                            (Effective May 15, 2002)

<PAGE>

                                    PREAMBLE

     This Amended and Restated Prentiss Properties Trust Trustees' Share
Incentive Plan (Effective May 15, 2002) (the "Plan") is an amendment and
restatement of the Prentiss Properties Trust Trustees' Share Incentive Plan that
was adopted by the Board of the Company on October 15, 1996 (the "Prior Plan").
All grants of Options on or after May 15, 2002, shall be governed by the terms
of the Plan. All grants of Options prior to May 15, 2002, shall be governed by
the terms of the Prior Plan, except to the extent provisions of the Plan are
expressly made applicable to grants or awards under the Prior Plan. The purpose
of the Plan is to (i) assist the Company in recruiting and retaining trustees
and (ii) promote a greater identity of interest between Participants and
shareholders by enabling Participants to participate in the Company's future
success.

                                    ARTICLE I

                                   DEFINITIONS

     1.01 Administrator means the Committee, or in the absence of a properly
constituted Committee, the Board.

     1.02 Affiliate means any "subsidiary" or "parent" corporation (within the
meaning of Section 424 of the Code) of the Company, including an entity that
becomes an Affiliate after the adoption of this Plan.

     1.03 Award means a grant of Options, Restricted Stock or Shares.

     1.04 Award Date means the date the Committee grants an Award.

     1.05 Board means the Board of Trustees of the Company.

                                       1

<PAGE>

     1.06 Code means the Internal Revenue Code of 1986 and the Treasury
Regulations promulgated thereunder.

     1.07 Committee means the committee consisting of two or more Trustees who
(i) are appointed by the Board to administer the Plan, and (ii) qualify as
Non-Employee Directors under Rule 16b-3 promulgated under the Securities
Exchange Act of 1934.

     1.08 Company means Prentiss Properties Trust.

     1.09 Effective Date means the date of shareholder approval of the Plan.

     1.10 Eligible Director means a member of the Board who is not an employee
or officer of the Company or an Affiliate.

     1.11 Exchange Act means the Securities Exchange Act of 1934, as amended.

     1.12 Fair Market Value means, on any given date, the current fair market
value of a Share as determined pursuant to the following: if the Shares are
listed on an established stock exchange or exchanges, Fair Market Value shall be
deemed to be the highest closing price of a Share reported on that stock
exchange or exchanges or, if no sale of Shares shall be made on any stock
exchange on that day, then the next preceding day on which there was a sale; or
if the Shares are not listed on an established stock exchange, the Fair Market
Value shall be the reported "closing" price of a Share in the New York
over-the-counter market as reported by the National Association of Securities
Dealers, Inc.; provided, however, that if the Shares are not publicly traded,
Fair Market Value shall mean, as of any date, the Fair Market Value on such date
as determined in good faith by the Board in its sole discretion.

     1.13 Nonemployee Director means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.

                                       2

<PAGE>

     1.14 Option means an option that entitles the holder to purchase Shares
from the Company on the terms set forth in Article IV of this Plan.

     1.15 Participant means an Eligible Director who has been granted an Award
hereunder.

     1.16 Plan means this Amended and Restated Prentiss Properties Trust
Trustees' Share Incentive Plan (Effective May 15, 2002).

     1.17 Prior Plan shall have the meaning given it in the Preamble to the
Plan.

     1.18 Restricted Stock means Shares issued or transferred to a Participant
pursuant to Article VI hereof.

     1.19 Shares means the common shares of the Company.

     1.20 Trustee means a member of the Board of Trustees of the Company.

                                   ARTICLE II

                       SHARES SUBJECT TO PLAN; ADJUSTMENTS

     2.01 Shares Subject to Plan. The total number of Shares that may be issued
pursuant to Awards granted hereunder shall not exceed in the aggregate the sum
of 300,000 Shares plus the number of Shares which, as of the Effective Date,
remain available for issuance under the Prior Plan. If any Award, under this
Plan or the Prior Plan, is forfeited, or if it terminates, expires, or lapses
without being exercised, any Shares subject to such Award shall again be
available for issuance in connection with Awards under the Plan. Shares issued
pursuant to the terms of any Award granted hereunder may be authorized or
unissued Shares or Shares held in the Company's treasury.

     2.02 The provisions of this Plan and/or the provisions of the Prior Plan,
and the terms of any outstanding Awards (granted under the Plan or the Prior
Plan), may be revised as the Administrator may determine to be equitably
required in the event that (a) the Company

                                       3

<PAGE>

(i) effects one or more Share dividends, Share split-ups, subdivisions or
consolidations of Shares or other changes in capitalization or (ii) engages in a
transaction described in Section 424 of the Code or (b) there occurs any other
event which, in the judgment of the Administrator, necessitates such action. Any
determination made under this Article II by the Administrator shall be final and
conclusive.

     2.03 The issuance by the Company of shares of any class, or securities
convertible into shares of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares of obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of Shares
that will be issued under the Plan.

                                   ARTICLE III

                                 ADMINISTRATION

     The Plan shall be administered by the Administrator. The Administrator
shall have authority to grant Awards upon such terms (not inconsistent with the
provisions of the Plan) as the Administrator may consider appropriate. In
addition, the Administrator shall have complete authority to construe and
interpret all provisions of the Plan and Awards granted hereunder; to adopt,
amend, and rescind rules and regulations pertaining to the administration of the
Plan, including, but not limited to, correcting any defect or supplying any
omission, or reconciling any inconsistency in the Plan or in any Agreement, in
the manner and to the extent it shall deem necessary or advisable so that the
Plan complies with applicable law, and otherwise to make the Plan fully
effective; exercise its discretion with respect to the powers and rights granted
to it as set forth in the Plan; except to the extent prohibited by applicable
law or the applicable rules of a

                                       4

<PAGE>

stock exchange, allocate all or any part of its responsibilities and powers to
any one or more of its members and delegate all or any part of its
responsibilities and powers to any person or persons selected by it, which
allocation or delegation may be revoked by the Committee at any time; and
generally, to exercise such powers and to perform such acts as are deemed
necessary or advisable to promote the best interests of the Company with respect
to the Plan. The express grant in the Plan of any specific power to the
Administrator shall not be construed as limiting any power or authority of the
Administrator. Any decision made, or action taken, by the Administrator in
connection with the administration of the Plan shall be final and conclusive. No
member of the Administrator shall be liable for any act done in good faith with
respect to the Plan. All expenses of administering the Plan shall be borne by
the Company.

                                   ARTICLE IV

                                     OPTIONS

     4.01 Grant of Options. In its sole discretion, the Administrator may grant
Options to Eligible Directors pursuant to any policy established by the
Administrator or upon the occurrence of any event (for example, but not by way
of limitation, election of a new director; annual meeting; specific dates chosen
by the Administrator, etc.). Options shall be evidenced by an agreement between
the Company and the Participant. Subject to the terms of this Plan, each
agreement shall contain such restrictions, terms and conditions as the
Administrator may, in its discretion, determine.

     4.02 Option Price and Payment. The price per Share for Shares purchased on
the exercise of an Option shall be the Fair Market Value on the Award Date.
Payment of the Option price shall be made in cash, cash equivalent acceptable to
the Administrator; attestation of ownership, or delivery, of Shares held by the
Participant for at least six (6) months prior to

                                       5

<PAGE>

exercise (or such longer or shorter period as may be required to avoid a charge
to earnings for financial accounting purposes); or a combination thereof. If
Shares are attested to or surrendered in payment of the Option price, the Shares
surrendered must have an aggregate Fair Market Value (determined as of the day
preceding the exercise date) that, together with any cash or cash equivalent
paid, is not less than the Option price for the number of Shares for which the
Option is being exercised.

     4.03 Exercise. To the extent that an Option has become exercisable in
accordance with its terms, as applicable, it may be exercised whether or not the
Participant is a member of the Board on the date or dates of exercise, as long
as the Option has not expired, been cancelled or forfeited. An Option may be
exercised with respect to any number of whole Shares less than the full number
for which the Option could be exercised. A partial exercise of an Option shall
not affect the right to exercise the Option from time to time in accordance with
this Plan with respect to the remaining Shares subject to the Option. All
Options shall be evidenced by agreements that shall be subject to the applicable
provisions of this Plan and to such other provisions as the Administrator may
adopt that are consistent with the provisions of the Plan.

     4.04 Maximum Option Period. The period during which an Option may be
exercised shall be ten years from the Award Date. In the event of the
Participant's death, the Option may be exercised by the Participant's estate or
by such person or persons who succeed to the Participant's rights by will or the
laws of descent and distribution following the Participant's death until the
expiration of the Option period, in the case of an Option that provides for its
cancellation prior to the end of the Option period, until the date of such
cancellation. The Participant's estate or such person or persons may exercise
the Option with respect to all or part

                                       6

<PAGE>

of the number of Shares for which the Participant could have exercised the
Option on the date of his or her death.

        4.05   Nontransferability. An Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom an Option is granted, the Option
may be exercised only by the Participant or his or her guardian or legal
representative. No right or interest of a Participant in any Option shall be
liable for, or subject to, any lien, obligation, or liability of such
Participant.

        4.06   Shareholder Rights. No Participant shall have any rights as a
shareholder with respect to Shares subject to his or her Option until the date
of exercise of such Option.

        4.07   Deferral of Receipt of Shares. The Administrator may from time to
time establish procedures pursuant to which a Participant may elect to defer,
until a time or times later than the exercise of an Option, receipt of all or a
portion of the Shares subject to such Option and/or to receive cash at such
later time or times in lieu of such deferred Shares, all on such terms and
conditions as the Administrator shall determine. If any such deferrals are
permitted, then notwithstanding Section 4.06 above, a Participant who elects
such deferral shall not have any rights as a shareholder with respect to such
deferred Shares unless and until Shares are actually delivered to the
Participant with respect thereto, except to the extent otherwise determined by
the Administrator.

                                    ARTICLE V

                                  SHARE AWARDS

        5.01   Grants. In its sole discretion, the Administrator may grant
Awards of Shares to Eligible Directors pursuant to any policy established by the
Administrator or upon the

                                       7

<PAGE>

occurrence of any event (for example, but not by way of limitation, election of
a new director; annual meeting; specific dates chosen by the Administrator,
etc.).

        5.02   Vesting. All Shares issued to a Participant under this Article V
shall be immediately and fully vested when granted.

        5.03   Transferability. All Shares issued to a Participant under this
Article V shall be immediately transferable, subject only to restrictions
imposed by federal and state securities and other laws.

        5.04   Shareholder Rights. A Participant shall have all rights as a
shareholder with respect to Shares awarded pursuant to this Article V.

                                   ARTICLE VI

                                RESTRICTED STOCK

        6.01   Grant. In its sole discretion, the Administrator may grant Awards
of Restricted Stock to Eligible Directors pursuant to any policy established by
the Administrator or upon the occurrence of any event (for example, but not by
way of limitation, election of a new director; annual meeting; specific dates
chosen by the Administrator, etc.). Awards of Restricted Stock shall be
evidenced by an agreement between the Company and the Participant. Subject to
the terms of this Plan, each agreement shall contain such restrictions, terms
and conditions as the Administrator may, in its discretion, determine and
(without limiting the generality of the foregoing) such agreements may require
that an appropriate legend be placed on Share certificates. Awards of Restricted
Stock shall be subject to the terms and provisions set forth below in this
Article VI.

        6.02   Rights of Participant. Shares of Restricted Stock granted
pursuant to an Award hereunder shall be issued in the name of the Participant as
soon as reasonably practicable after

                                       8

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the Award is granted provided that the Participant has executed an agreement
evidencing the Award, the appropriate blank stock powers and, in the discretion
of the Administrator, an escrow agreement and any other documents which the
Administrator may require as a condition to the issuance of such Shares. If a
Participant shall fail to execute the agreement evidencing a Restricted Stock
Award, the appropriate blank stock powers and, in the discretion of the
Administrator, an escrow agreement and any other documents which the
Administrator may require within the time period prescribed by the Administrator
at the time the Award is granted, the Award shall be null and void. At the
discretion of the Administrator, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers with an escrow
agent (which may be the Company) designated by the Administrator. Unless the
Administrator determines otherwise and as set forth in the agreement, upon
delivery of the Shares to the escrow agent, the Participant shall have all of
the rights of a shareholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or made
with respect to the Shares.

        6.03   Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Participant shall have lapsed in the manner set
forth in Section 6.04, such Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated, nor shall they
be delivered to the Participant.

        6.04   Lapse of Restrictions.

               (a)   Generally. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Administrator may determine. The agreement evidencing the
Award shall set forth any such restrictions.

                                       9

<PAGE>

                  (b) Modification or Substitution. Subject to the terms of the
Plan, the Administrator may modify outstanding Awards of Restricted Stock or
accept the surrender of outstanding Shares of Restricted Stock (to the extent
the restrictions on such Shares have not yet lapsed) and grant new Awards in
substitution for them. Notwithstanding the foregoing, no modification of an
Award shall adversely alter or impair any rights or obligations under the
agreement without the Participant's consent.

                  (c) Treatment of Dividends. At the time an Award of Shares of
Restricted Stock is granted, the Administrator may, in its discretion, determine
that the payment to the Participant of dividends, or a specified portion
thereof, declared or paid on such Shares by the Company shall be (i) deferred
until the lapsing of the restrictions imposed upon such Shares, and (ii) held by
the Company for the account of the Participant until such time. In the event
that dividends are to be deferred, the Administrator shall determine whether
such dividends are to be reinvested in Shares (which shall be held as additional
Shares of Restricted Stock) or held in cash. If deferred dividends are to be
held in cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate per
annum as the Administrator, in its discretion, may determine. Payment of
deferred dividends in respect of Shares of Restricted Stock (whether held in
cash or as additional Shares of Restricted Stock), together with interest
accrued thereon, if any, shall be made upon the lapsing of restrictions imposed
on the Shares in respect of which the deferred dividends were paid, and any
dividends deferred (together with any interest accrued thereon) in respect of
any Shares of Restricted Stock shall be forfeited upon the forfeiture of such
Shares.

                                       10

<PAGE>

                  (d) Delivery of Shares. Upon the lapse of the restrictions on
Shares of Restricted Stock, the Administrator shall cause a stock certificate to
be delivered to the Participant with respect to such Shares, free of all
restrictions hereunder.

                                   ARTICLE VII

                            OTHER SHARE-BASED AWARDS

         Subject to such terms and conditions as the Committee may determine,
other Awards based on the value of Shares may be granted either alone or in
addition to other Awards granted under the Plan. Any Awards under this Article
VII and any Shares covered by any such Award may be forfeited to the extent so
provided in the Award agreement, as determined by the Committee. Payment of
Awards made under this Article VII which are based on the value of Shares may be
made in Shares or in cash or in a combination thereof (based upon the Fair
Market Value of the Shares on the date of payment), all as determined by the
Committee in its sole discretion.

                                  ARTICLE VIII

              COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

         No Shares shall be issued and no certificates for Shares shall be
delivered under the Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, the requirement to
withhold taxes or other amounts), any listing agreement to which the Company is
a party, and the rules of all domestic stock exchanges on which the Company's
Shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements as the Administrator
may deem advisable to assure compliance with federal and state laws and
regulations. No Shares shall be issued and no

                                       11

<PAGE>

certificate for Shares shall be delivered under the Plan until the Company has
obtained such consent or approval as the Administrator may deem advisable from
regulatory bodies having jurisdiction over such matters. Upon approval by the
Administrator, any withholding requirements arising upon the issuance of Shares
under the Plan may be satisfied by the surrender or withholding, at their then
current Fair Market Value, of Shares otherwise issuable.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         9.01 Unfunded Plan. The Plan, insofar as it provides for Awards, shall
be unfunded, and the Company shall not be required to segregate any assets that
may at any time be represented by Awards under the Plan. Any liability of the
Company to any person with respect to any Award to be made under the Plan shall
be based solely upon any contractual obligations that may be created pursuant to
the Plan. No such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.

         9.02 Rules of Construction. Headings are given to the articles and
sections of the Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.

         9.03 Notice. Unless specifically required by the terms of this Plan,
notice to the Company's shareholders, the Participants, or any other person or
entity of an action by the Board, the Committee, or the Administrator with
respect to the Plan is not required before or after such action occurs.

                                       12

<PAGE>

                                    ARTICLE X

                                    AMENDMENT

     The Board may amend from time to time or terminate the Plan at any time;
provided, however, that no amendment shall become effective without shareholder
approval, in accordance with applicable law, regulation: (a) to the extent
necessary under any applicable law, regulation or exchange requirement, or (b)
if the amendment materially (i) increases the aggregate number of Shares that
may be issued under this Plan (other than an adjustment authorized under Article
II); (ii) changes the class of individuals eligible to become Participants; or
(iii) increases the benefits that may be provided under the Plan. In addition;
no such amendment or termination shall impair or adversely alter any Awards
theretofore granted under the Plan, except with the consent of the Participant,
nor shall any amendment or termination deprive any Participant of any Shares
which he or she may have acquired through or as a result of the Plan. Awards may
be modified by the Administrator provided that no modification of outstanding
Award shall adversely alter or impair any rights or obligations under the Award
without the consent of the Participant.

                                   ARTICLE XI

                                DURATION OF PLAN

     No Awards may be granted under the Plan after the day prior to the tenth
anniversary of the Effective Date. An Award granted pursuant to the Plan shall
remain in effect in accordance with its terms notwithstanding the expiration of
the Plan.

                                       13

<PAGE>

                                   ARTICLE XII

                             EFFECTIVE DATE OF PLAN

         Shares may be issued under the Plan, provided that the Plan has been
approved by a majority of the votes cast by the Company's shareholders, voting
either in person or by proxy, at a duly held shareholders' meeting at which a
quorum representing a majority of all outstanding Shares is present, either in
person or by proxy.

                                       14

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