Document:

WWW.EXFILE.COM, INC. -- 14667 -- NORTH AMERICAN GALVANIZING AND COATINGS, INC. -- EXHIBIT 10.5 TO FORM 10-Q

    
      EXHIBIT
         10.5

       

       

       

       

       

       

       

       

       

      NORTH
        AMERICAN GALVANIZING & COATINGS,
        INC.

       

      2004
        INCENTIVE STOCK PLAN

      
(amended
        and Restated As of October 1, 2006)

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS

      
        	
                1

              	
                BACKGROUND AND PURPOSE

              	
                1

              
	
                2

              	
                DEFINITIONS

              	
                1

              
	
                2.1

              	
                Affiliate

              	
                1

              
	
                2.2

              	
                Board

              	
                2

              
	
                2.3

              	
                Change Effective Date

              	
                2

              
	
                2.4

              	
                Change in Control

              	
                2

              
	
                2.5

              	
                Code

              	
                4

              
	
                2.6

              	
                Committee

              	
                4

              
	
                2.7

              	
                Company

              	
                4

              
	
                2.8

              	
                Director

              	
                4

              
	
                2.9

              	
                Director Stock Unit Program

              	
                5

              
	
                2.10

              	
                Eligible Employee

              	
                5

              
	
                2.11

              	
                Fair Market Value

              	
                5

              
	
                2.12

              	
                ISO

              	
                5

              
	
                2.13

              	
                1933 Act

              	
                5

              
	
                2.14

              	
                1934 Act

              	
                6

              
	
                2.15

              	
                Non-ISO

              	
                6

              
	
                2.16

              	
                Option

              	
                6

              
	
                2.17

              	
                Option Certificate

              	
                6

              
	
                2.18

              	
                Option Price

              	
                6

              
	
                2.19

              	
                Parent

              	
                6

              
	
                2.20

              	
                Plan

              	
                6

              
	
                2.21

              	
                Preexisting Plan

              	
                6

              
	
                2.22

              	
                Rule 16b-3

              	
                6

              
	
                2.23

              	
                SAR Value

              	
                7

              
	
                2.24

              	
                Stock

              	
                7

              
	
                2.25

              	
                Stock Appreciation Right

              	
                7

              
	
                2.26

              	
                Stock Appreciation Right
                  Certificate

              	
                7

              
	
                2.27

              	
                Stock Grant

              	
                7

              
	
                2.28

              	
                Stock Grant Certificate

              	
                8

              
	
                2.29

              	
                Stock Unit Grant

              	
                8

              
	
                2.30

              	
                Subsidiary

              	
                8

              
	
                 

              	
                 

              	
                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      TABLE
        OF CONTENTS

    

    
      	
               

            	
               

            	
               

            
	
              2.31

            	
              Ten Percent Shareholder

            	
              8

            
	
              3

            	
              SHARES AND GRANT LIMITS

            	
              8

            
	
              3.1

            	
              Shares Reserved

            	
              8

            
	
              3.2

            	
              Source of Shares

            	
              9

            
	
              3.3

            	
              Use of Proceeds

            	
              9

            
	
              3.4

            	
              Grant Limits

            	
              10

            
	
              3.5

            	
              Preexisting Plan

            	
              10

            
	
              4

            	
              EFFECTIVE DATE

            	
              10

            
	
              5

            	
              COMMITTEE

            	
              10

            
	
              6

            	
              ELIGIBILITY AND ANNUAL GRANT
                CAPS

            	
              11

            
	
              7

            	
              OPTIONS

            	
              11

            
	
              7.1

            	
              Committee Action

            	
              11

            
	
              7.2

            	
              $100,000 Limit

            	
              12

            
	
              7.3

            	
              Option Price

            	
              12

            
	
              7.4

            	
              Payment

            	
              13

            
	
              7.5

            	
              Exercise

            	
              13

            
	
              7.6

            	
              Compliance With Section 409A of the
                Code

            	
              14

            
	
              8

            	
              STOCK APPRECIATION RIGHTS

            	
              15

            
	
              8.1

            	
              Committee Action

            	
              15

            
	
              8.2

            	
              Terms and Conditions

            	
              15

            
	
              8.3

            	
              Exercise

            	
              17

            
	
              8.4

            	
              Compliance With Section 409A of the
                Code

            	
              17

            
	
              § 9

            	
              STOCK GRANTS

            	
              18

            
	
              9.1

            	
              Committee Action

            	
              18

            
	
              9.2

            	
              Conditions

            	
              18

            
	
              9.3

            	
              Dividends, Voting Rights and Creditor
                Status

            	
              20

            
	
              9.4

            	
              Satisfaction of Forfeiture
                Conditions

            	
              22

            
	
              9.5

            	
              Income Tax Deduction

            	
              22

            
	
              9.6

            	
              Director Stock Unit Program

            	
              24

            

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	
              9.7

            	
              Compliance With Section 409A of the
                Code

            	
              24

            
	
              10

            	
              NON-TRANSFERABILITY

            	
              26

            
	
              11

            	
              SECURITIES REGISTRATION

            	
              26

            
	
              12

            	
              LIFE OF PLAN

            	
              27

            
	
              13

            	
              ADJUSTMENT

            	
              28

            
	
              13.1

            	
              Capital Structure

            	
              28

            
	
              13.2

            	
              Transactions Described in § 424

            	
              28

            
	
              13.3

            	
              Fractional Shares

            	
              29

            
	
              13.4

            	
              Compliance With Section 409A of the
                Code

            	
              29

            
	
              14

            	
              CHANGE IN CONTROL

            	
              30

            
	
              15

            	
              AMENDMENT OR TERMINATION

            	
              30

            
	
              16

            	
              MISCELLANEOUS

            	
              31

            
	
              16.1

            	
              Shareholder Rights

            	
              31

            
	
              16.2

            	
              No Contract of Employment

            	
              31

            
	
              16.3

            	
              Withholding

            	
              32

            
	
              16.4

            	
              Construction

            	
              32

            
	
              16.5

            	
              Other Conditions

            	
              32

            
	
              16.6

            	
              Rule 16b-3

            	
              33

            

    

    
 

    1
BACKGROUND
      AND
      PURPOSE

    The purpose
      of this Plan is to promote the interest of the Company by authorizing the
      Committee to grant Options and Stock Appreciation Rights and to make Stock
      Grants and Stock Unit Grants to Eligible Employees and Directors in order (1)
      to
      attract and retain Eligible Employees and Directors, (2) to provide an
      additional incentive to each Eligible Employee or Director to work to increase
      the value of Stock and (3) to provide each Eligible Employee or Director with
      a
      stake in the future of the Company which corresponds to the stake of each of
      the
      Company’s shareholders.  This document is an amendment and complete
      restatement of the Plan effective as of October 1, 2006.   

    Any grant
      of an Option or Stock Appreciation Right under this Plan is intended to meet
      the
      requirements under Section 409A of the Code for a non-statutory stock option,
      an
      incentive stock option or a stock appreciation right that does not provide
      for a
      deferral of compensation.  Any Stock Grant or Stock Unit Grant under this
      Plan is intended to meet the requirements of Section 409A of the Code for a
      short-term deferral that does not provide for a deferral of compensation. 
The provisions of 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the Plan shall be
      construed to be consistent with the intent that the Plan not be treated as
      a
      plan providing for the deferral of compensation within the meaning of Section
      409A.  The amendments with respect to Section 409A are to be considered
      effective as of January 1, 2005.

    2
DEFINITIONS

    2.1               
      Affiliate.  – means any organization
      (other than a Subsidiary) that would be treated as under common control with
      the
      Company under § 414(c) of the Code if “50 percent” were substituted for “80
      percent” in the income tax regulations under § 414(c) of the Code.

    2.2               
      Board.  – means the Board of Directors
      of the Company.

    2.3               
      Change Effective Date.  – means either
      the date which includes the “closing” of the transaction which makes a Change in
      Control effective if the Change in Control is made effective through a
      transaction which has a ““losing”
or the
      date a Change in Control is reported in accordance with applicable law as
      effective to the Securities and Exchange Commission if the Change in Control
      is
      made effective other than through a transaction which has a “closing”.

    2.4               
      Change in Control.  – means a change
      in control of the Company of a nature that would be required to be reported
      in
      response to item 6(e) of Schedule 14A of Regulation 14A promulgated under the
      1934 Act as in effect at the time of such “change in control”, provided that
      such a change in control shall be deemed to have occurred at such time as

    (a)                
any “person” (as that term is used
      in Sections 13(d) and 14(d)(2)of the 1934
      Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the
      1934 Act) directly or indirectly, of securities representing 30% or more of
      the
      combined voting power for election of directors of the then outstanding
      securities of the Company or any successor to the Company;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)                
during any period of
      two consecutive years or less, individuals who at the
      beginning of such period constitute the Board cease, for any reason, to
      constitute at least a majority of the Board, unless the election or nomination
      for election of each new director was approved by a vote of at least two-thirds
      of the directors then still in office who were directors at the beginning of
      the
      period;

    (c)                
the shareholders of
      the Company approve any reorganization, merger,
      consolidation or share exchange as a result of which the common stock of the
      Company shall be changed, converted or exchanged into or for securities of
      another corporation (other than a merger with a wholly-owned subsidiary of
      the
      Company) or any dissolution or liquidation of the Company or any sale or the
      disposition of 50% or more of the assets or business of the Company; or

    (d)                
shareholders of the
      Company approve any reorganization, merger, consolidation or
      share exchange unless (A) the persons who were the beneficial owners of the
      outstanding shares of the common stock of the Company immediately before the
      consummation of such transaction beneficially own more than 60% of the
      outstanding shares of the common stock of the successor or survivor corporation
      in such transaction immediately following the consummation of such transaction
      and (B) the number of shares of the common stock of such successor or survivor
      corporation beneficially owned by the persons described in § 2.4(d)(A)
      immediately following the consummation of such transaction is beneficially
      owned
      by each such person in substantially the same proportion that each such person
      had beneficially owned shares of the Company common stock immediately before
      the
      consummation of such transaction, provided (C) the percentage described in
§
2.4(d)(A) of the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    beneficially owned
      shares of the successor or survivor corporation and the number described in
§
2.4 (d)(B) of the beneficially owned shares of the successor or survivor
      corporation shall be determined exclusively by reference to the shares of the
      successor or survivor corporation which result from the beneficial ownership
      of
      shares of common stock of the Company by the persons described in § 2.4(d)(A)
      immediately before the consummation of such transaction.

    2.5               
      Code.  – means the Internal Revenue
      Code of 1986, as amended.

    2.6               
      Committee.  – means a committee of the
      Board which shall have at least 2 members, each of whom shall be appointed
      by
      and shall serve at the pleasure of the Board and shall come within the
      definition of a “non-employee director” under Rule 16b-3 and an “outside
      director” under § 162(m) of the Code.

    2.7               
      Company.  – means North American
      Galvanizing & Coatings, Inc. and any successor to North American Galvanizing
& Coatings, Inc.

    2.8               
      Director.  – means any member of the
      Board who is not an employee of the Company or a Parent or Subsidiary or
      affiliate (as such term is defined in Rule 405 of the 1933 Act) of the
      Company.

    2.9               
      Director Stock Unit Program.  – means
      the North American Galvanizing & Coatings, Inc. Director Stock Unit Program
      as effective as of the date approved by the shareholders of the Company and
      as
      amended from time to time thereafter.

    2.10           
        Eligible Employee.  – means an
      employee of the Company or any Subsidiary or Parent or Affiliate to whom the
      Committee decides for reasons sufficient to the Committee to make a grant under
      this Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.11           
        Fair Market Value.  – means
      either (a) the closing price on any date for a share of Stock as reported by
      The Wall Street Journal or, if The Wall Street Journal no longer
      reports such closing price, such closing price as reported by a newspaper or
      trade journal selected by the Committee or, if no such closing price is
      available on such date, (b) such closing price as so reported in accordance
      with
§ 2.10(a) for the immediately preceding business day, or, if no newspaper or
      trade journal reports such closing price or if no such price quotation is
      available, (c) the price which the Committee acting in good faith determines
      through any reasonable valuation method that a share of Stock might change
      hands
      between a willing buyer and a willing seller, neither being under any compulsion
      to buy or to sell and both having reasonable knowledge of the relevant
      facts.  Such valuations shall always be determined in a manner consistent
      with the requirements of Section 409A of the Code.

    2.12           
        ISO.  – means an option granted
      under this Plan to purchase Stock which is intended to satisfy the requirements
      of § 422 of the Code.

    2.13         
          1933 Act.  – means the
      Securities Act of 1933, as amended.

    2.14          
         1934 Act.  – means the
      Securities Exchange Act of 1934, as amended.

    2.15           
        Non-ISO.  – means an option
      granted under this Plan to purchase Stock which is intended to fail to satisfy
      the requirements of § 422 of the Code.

    2.16       
           
Option.  – means an ISO or a Non-ISO
      which is granted under § 7.

    2.17          
         Option Certificate.  –
means the certificate (whether in electronic
      or written form) which sets forth
      the terms and conditions of an Option granted under this Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.18           
        Option Price.  – means the
      price which shall be paid to purchase one share of Stock upon the exercise
      of an
      Option granted under this Plan.

    2.19           
        Parent.  – means any
      corporation which is a parent corporation (within the meaning of 424(e) of
      the
      Code) of the Company.

    2.20          
         Plan.  – means this North
      American Galvanizing & Coatings, Inc. 2004 Incentive Stock Plan as effective
      as of the date approved by the shareholders of the Company and as amended from
      time to time thereafter.

    2.21       
            Preexisting
      Plan.  – means each of the following plans, as each such
      plan has been amended from time to time up to the date this Plan is effective:
       (1) the North American Galvanizing & Coatings, Inc. 1996 Stock Option
      Plan and (2) the North American Galvanizing & Coatings, Inc. 1988 Stock
      Option Plan.

    2.22         
          Rule 16b-3.  –
means the exemption under Rule 16b-3
      to Section 16(b) of the 1934 Act or any
      successor to such rule.

    2.23         
          SAR Value.  – means
      the value assigned by the Committee to a share of Stock in connection with
      the
      grant of a Stock Appreciation Right under § 8.

    2.24         
          Stock.  – means the
      $0.10 par value common stock of the Company that is readily tradable on an
      established securities market, or if none, that class of common stock having
      the
      greatest aggregate value of common stock issued and outstanding.  Under no
      circumstances shall Stock include stock that is subject to a mandatory
      repurchase obligation or a put or call right that is not a lapse restriction
      as
      defined in the regulations under Section 83 of the Code and that is based on
      a
      measure other the Fair Market Value of the equity interest in the corporation
      represented by the stock.  

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.25         
          Stock Appreciation
      Right.  – means a right which is granted under § 8 to
      receive the appreciation in a share of Stock.

    2.26         
          Stock Appreciation Right
      Certificate.  – means the certificate (whether in
      electronic or written form) which sets forth the terms and conditions of a
      Stock
      Appreciation Right which is not granted as part of an Option.

    2.27            
       Stock Grant.  – means a grant
      under Section 9 which is designed to result in the issuance of the number of
      shares of Stock described in the grant (and cash in lieu of any fractional
      share) after conditions stated in the Stock Grant Certificate are
      satisfied. The stock described in the grant may, in the discretion of the
      Committee, be issued to the Eligible Employee or Director before the stock
      grant
      becomes non-forfeitable under the terms of the grant. 

    2.28           
        Stock Grant Certificate.  –
means the certificate (whether in electronic
      or written form) which sets forth
      the terms and conditions of a Stock Grant or a Stock Unit Grant.

    2.29         
          Stock Unit Grant. 
– means a grant under Section 9 which
      is designed to result in the payment of
      shares of Stock described in the grant (and cash in lieu of any fractional
      share) after any conditions stated in the Stock Grant Certificate are
      satisfied.

    2.30         
          Subsidiary.  –
means a corporation which is a subsidiary
      corporation (within the meaning of §
424(f) of the Code) of the Company.

    2.31          
         Ten Percent Shareholder. 
– means a person who owns (after taking
      into account the attribution rules of §
424(d) of the Code) more than ten percent of the total combined voting power
      of
      all classes of stock of either the Company, a Subsidiary or Parent.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3
SHARES
      AND GRANT
      LIMITS

    3.1               
      Shares Reserved.  There shall (subject
      to § 13) be reserved for issuance under this Plan (a) 1,250,000 shares of Stock,
      489,667 of which were authorized for issuance under the North American
      Galvanizing & Coatings, Inc. 1996 Stock Option Plan and would have remained
      authorized and available for issuance under such plan if shares were issued
      under such plan on the effective date of this Plan sufficient to satisfy all
      then outstanding grants under such plan plus (b) the number of shares of Stock
      subject to grants under each Preexisting Plan which are outstanding on the
      effective date of this Plan and which are forfeited or expire on or after such
      effective date in accordance with the terms of such grants; provided, however,
      only the shares of Stock described in § 3.1(a) shall be issued in connection
      with the exercise of ISOs and nothing in this Plan shall affect any grants
      under
      a Preexisting Plan which are outstanding on the effective date of this Plan
      until such time, if any, that any shares of Stock subject to such grants are
      forfeited or grants respecting any shares of Stock expire on or after such
      effective date in accordance with the terms of such grants.

    3.2               
      Source of Shares.  The shares of Stock
      described in § 3.1 shall be reserved to the extent that the Company deems
      appropriate from authorized but unissued shares of Stock and from shares of
      Stock which have been reacquired by the Company.  All shares of Stock
      described in § 3.1 shall remain available for issuance under this Plan until
      issued pursuant to the exercise of an Option or a Stock Appreciation Right
      or
      issued pursuant to a Stock Grant, and any such shares of stock which are issued
      pursuant to an Option, a Stock Appreciation Right or a Stock Grant which are
      forfeited thereafter shall again become available for issuance under this
      Plan.  Finally, if the Option Price under an Option is paid in whole or in
      part in shares of Stock or if shares of Stock are tendered to the Company in
      satisfaction of any condition to a Stock Grant, such shares thereafter shall
      become 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    available for issuance under
      this Plan and shall be treated the same as any other shares available for
      issuance under this Plan.

    3.3               
      Use of Proceeds.  The proceeds which
      the Company receives from the sale of any shares of Stock under this Plan shall
      be used for general corporate purposes and shall be added to the general funds
      of the Company.

    3.4               
      Grant Limits.  No Eligible Employee or
      Director in any calendar year shall be granted an Option to purchase (subject
      to
§ 13) more than 100,000 shares of Stock or a Stock Appreciation Right based on
      the appreciation with respect to (subject to § 13) more than 100,000 shares of
      Stock, and no Stock Grant or Stock Unit Grant shall be made to any Eligible
      Employee or Director in any calendar year where the Fair Market Value of the
      Stock subject to such grant on the date of the grant exceeds $100,000; provided,
      however, that this limit shall not apply to a Stock Unit Grant made pursuant
      to
      the Director Stock Unit Program.  No more than 100,000 non-forfeitable
      shares of Stock shall (subject to § 13) be issued pursuant to Stock Grants or
      Stock Unit Grants under § 9; provided, however, that no non-forfeitable shares
      of Stock issued pursuant to Stock Unit Grants under the Director Stock Unit
      Program shall be counted in determining whether this 100,000 share limitation
      has been reached.

    3.5               
      Preexisting Plan.  No grants shall be
      made under any Preexisting Plan on or after the date this Plan becomes
      effective.

    4
EFFECTIVE
      DATE

    The effective date of
      this
      Plan shall be the date the shareholders of the Company (acting at a duly called
      meeting of such shareholders) approve the adoption of this Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5
COMMITTEE

    This Plan
      shall be administered by the Committee.  The Committee acting in its
      absolute discretion shall exercise such powers and take such action as expressly
      called for under this Plan and, further, the Committee shall have the power
      to
      interpret this Plan and (subject to § 14 and § 15 and Rule 16b-3) to take
      such other action in the administration and operation of this Plan as the
      Committee deems equitable under the circumstances, which action shall be binding
      on the Company, on each affected Eligible Employee or Director and on each
      other
      person directly or indirectly affected by such action.  Furthermore, the
      Committee as a condition to making any grant under this Plan to any Eligible
      Employee or Director shall have the right to require him or her to execute
      an
      agreement which makes the Eligible Employee or Director subject to
      non-competition provisions and other restrictive covenants which run in favor
      of
      the Company.

    6
ELIGIBILITY
      AND
      ANNUAL GRANT CAPS

    Only
      Eligible Employees who are employed by the Company or a Subsidiary or Parent
      shall be eligible for the grant of ISOs under this Plan.  All Eligible
      Employees and Directors shall be eligible for the grant of Non-ISOs and Stock
      Appreciation Rights and for Stock Grants and Stock Unit Grants under this
      Plan.

    7
OPTIONS

    7.1               
      Committee Action.  The Committee
      acting in its absolute discretion shall have the right to grant Options to
      Eligible Employees and to Directors under this Plan from time to time to
      purchase shares of Stock, but the Committee shall not, absent the approval
      of
      the Company’s shareholders, take any action, whether through amendment,
      cancellation, replacement grants, or any other means, to reduce the Option
      Price
      of any outstanding Options.  Each grant of an Option to a Eligible Employee
      or Director shall be evidenced by an Option Certificate, and each Option
      Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall
      set forth such other terms and conditions of such grant as the Committee acting
      in its absolute discretion deems consistent 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    with the terms of this Plan;
      however, (a) if the Committee grants an ISO and a Non-ISO to a Eligible Employee
      on the same date, the right of the Eligible Employee to exercise the ISO shall
      not be conditioned on his or her failure to exercise the Non-ISO and (b) if
      the
      only condition to exercise of the Option is the completion of a period of
      service, such period of service shall be no less than the one (1) year period
      which starts on the date as of which the Option is granted, unless the Committee
      determines that a shorter period of service (or no period of service) better
      serves the Company’s interest.

    7.2               
      $100,000 Limit.  No Option shall be
      treated as an ISO to the extent that the aggregate Fair Market Value of the
      Stock subject to the Option which would first become exercisable in any calendar
      year exceeds $100,000.  Any such excess shall instead automatically be
      treated as a Non-ISO.  The Committee shall interpret and administer the ISO
      limitation set forth in this § 7.2 in accordance with § 422(d) of the Code, and
      the Committee shall treat this § 7.2 as in effect only for those periods for
      which § 422(d) of the Code is in effect.

    7.3               
      Option Price.  The Option Price for
      each share of Stock subject to an Option shall be no less than the Fair Market
      Value of a share of Stock on the date the Option is granted; provided, however,
      if the Option is an ISO granted to an Eligible Employee who is a Ten Percent
      Shareholder, the Option Price for each share of Stock subject to such ISO shall
      be no less than 110% of the Fair Market Value of a share of Stock on the date
      such ISO is granted.

    7.4               
      Payment.  The Option Price shall be
      payable in full upon the exercise of any Option and, at the discretion of the
      Committee, an Option Certificate can provide for the payment of the Option
      Price
      either in cash, by check or in Stock which has been held for at least 6 months
      and which is acceptable to the Committee, or through any cashless exercise
      procedure which is effected by an unrelated broker through a sale of Stock
      in
      the open market and which is acceptable to the Committee, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    or in any combination of
      such forms of payment.  Any payment made in Stock shall be treated as equal
      to the Fair Market Value of such Stock on the date the certificate for such
      Stock (or proper evidence of such certificate) is presented to the Committee
      or
      its delegate in such form as acceptable to the Committee.

    7.5        
            
Exercise.

    (a)                
Exercise
      Period. Each Option granted under this
      Plan shall be exercisable in whole or in part at such time or times as set
      forth
      in the related Option Certificate, but no Option Certificate shall make an
      Option exercisable on or after the earlier of

    (1)                
the date which is
      the fifth anniversary of the date the Option is granted, if
      the Option is an ISO and the Eligible Employee is a Ten Percent Shareholder
      on
      the date the Option is granted, or

    (2)                
the date which is
      the tenth anniversary of the date the Option is granted, if
      the Option is (a) a Non-ISO or (b) an ISO which is granted to an Eligible
      Employee who is not a Ten Percent Shareholder on the date the Option is
      granted.

    (b)                
Termination
      of Status as Eligible Employee or
      Director.  Subject to § 7.5(a), an Option Certificate may
      provide for the exercise of an Option after an Eligible Employee’s or a
      Director’s status as such has terminated for any reason whatsoever, including
      death or disability.

    7.6               
Compliance
      With Section 409A of the Code.
 The Options granted under this Plan are intended to be non-statutory
      stock
      options or incentive stock options that do not provide for a deferral of
      compensation within the meaning of Section 409A of the Code, and all the
      provisions of 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    this Plan shall be construed
      accordingly.  As provided in Section 7.3, the Option Price shall never be
      less than the Fair Market Value of a share of Stock on the date the Option
      is
      granted.  The transfer or exercise of non-statutory options will be subject
      to taxation under Section 83 of the Code.  The Option will not include any
      feature for the deferral of compensation beyond the date the Option is exercised
      or disposed of or the date the Stock acquired pursuant to the exercise of the
      Option first becomes substantially vested within the meaning of Section 83
      of
      the Code.  Upon exercising the Option, the Option holder will receive the
      Stock subject to the Option or payment for the stock as soon as practicable
      but
      in any event on or before the end of the taxable year in which the Option is
      exercised or on or before the 15th day of the third month following
      the date of  exercise, if later.  No modification of the Option shall
      be allowed if the resulting Option would provide for a deferral of compensation
      within the meaning of Section 409A of the Code.  No Option holder will be
      entitled to receive dividends on the Stock subject to an Option unless the
      right
      to dividends is explicitly set forth in a separate agreement.

    8

STOCK
      APPRECIATION RIGHTS

    8.1               
      Committee Action.  The Committee
      acting in its absolute discretion shall have the right to grant Stock
      Appreciation Rights to Eligible Employees and to Directors under this Plan
      from
      time to time, and each Stock Appreciation Right grant shall be evidenced by
      a
      Stock Appreciation Right Certificate or, if such Stock Appreciation Right is
      granted as part of an Option, shall be evidenced by the Option Certificate
      for
      the related Option.

    8.2               
      Terms and Conditions.

    (a)                
      Stock Appreciation Right Certificate.  If a Stock
      Appreciation Right is granted independent of an Option, such Stock Appreciation
      Right shall be evidenced by a 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Stock
      Appreciation Right Certificate, and such certificate shall set forth the number
      of shares of Stock on which the Eligible Employee’s or Director’s right to
      appreciation shall be based and the SAR Value of each share of Stock.  Such
      SAR Value shall be no less than the Fair Market Value of a share of Stock on
      the
      date that the Stock Appreciation Right is granted.  The Stock Appreciation
      Right Certificate shall set forth such other terms and conditions for the
      exercise of the Stock Appreciation Right as the Committee deems appropriate
      under the circumstances, but no Stock Appreciation Right Certificate shall
      make
      a Stock Appreciation Right exercisable on or after the date which is the tenth
      anniversary of the date such Stock Appreciation Right is granted.

    (b)                
Option
      Certificate.  If a Stock Appreciation Right
      is granted together with an Option, such Stock Appreciation Right shall be
      evidenced by an Option Certificate, the number of shares of Stock on which
      the
      Eligible Employee’s or Director’s right to appreciation shall be based shall be
      the same as the number of shares of Stock subject to the related Option, and
      the
      SAR Value for each such share of Stock shall be no less than the Option Price
      under the related Option.  Each such Option Certificate shall provide that
      the exercise of the Stock Appreciation Right with respect to any share of Stock
      shall cancel the Eligible Employee’s or Director’s right to exercise his or her
      Option with respect to such share and, conversely, that the exercise of the
      Option with respect to any share of Stock shall cancel the Eligible Employee’s
      or Director’s right to exercise his or her Stock Appreciation Right with respect
      to such share.  A Stock Appreciation Right which is granted as part of an
      Option shall be exercisable only while the related Option is exercisable.
 The Option Certificate shall 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    set forth such other
      terms and conditions for the exercise of the Stock Appreciation Right as the
      Committee deems appropriate under the circumstances.

    (c)                
Minimum
      Period of Service.  If the only condition
      to exercise of a Stock Appreciation Right is the completion of a period of
      service, such period of service shall be no less than the one (1) year period
      which starts on the date as of which the Stock Appreciation Right is granted,
      unless the Committee determines that a shorter period of service (or no period
      of service) better serves the Company’s interest.

    8.3               
      Exercise.  A Stock Appreciation Right
      shall be exercisable only when the Fair Market Value of a share of Stock on
      which the right to appreciation is based exceeds the SAR Value for such share,
      and the payment due on exercise shall be based on such excess with respect
      to
      the number of shares of Stock to which the exercise relates.  An Eligible
      Employee or Director upon the exercise of his or her Stock Appreciation Right
      shall receive a payment from the Company in cash or in Stock issued under this
      Plan, or in a combination of cash and Stock, and the number of shares of Stock
      issued shall be based on the Fair Market Value of a share of Stock on the date
      the Stock Appreciation Right is exercised.  The Committee acting in its
      absolute discretion shall have the right to determine the form and time of
      any
      payment under this § 8.3.

    8.4               
Compliance
      With Section 409A of the Code.
 The Stock Appreciation Rights granted under this Plan are intended
      to be
      stock appreciation rights that do not provide for a deferral of compensation
      within the meaning of Section 409A of the Code, and all the provisions of this
      Plan shall be construed accordingly. Compensation payable under the Stock
      Appreciation Right cannot, therefore, be greater than the difference between
      the
      Fair Market Value of the Stock on the date of grant and the Fair Market Value
      of
      the Stock on the date the Stock Appreciation Right  is exercised with
      respect to a number of shares of Stock fixed on or before the date the Stock
      Appreciation right is 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    granted.  As provided
      in Section 8.2, the SAR Value of each share of Stock subject to a Stock
      Appreciation Right shall never be less than the Fair Market Value of a share
      of
      Stock on the date the Stock Appreciation Right is granted.  The Stock
      Appreciation Right will not include any feature for the deferral of compensation
      beyond the date the Stock Appreciation Right is exercised.  Upon exercising
      the Stock Appreciation Right, the holder will receive payment pursuant to the
      right as soon as practicable but in any event on or before the end of the
      taxable year in which the Stock Appreciation Right is exercised or on or before
      the 15th day of the third month following the date of exercise, if
      later.  No modification of the Stock Appreciation Right shall be allowed if
      the resulting Stock Appreciation Right would provide for a deferral of
      compensation within the meaning of Section 409A of the Code.  No Stock
      Appreciation Right holder will be entitled to receive dividends on the Stock
      subject to a Stock Appreciation Right unless the right to dividends is
      explicitly set forth in a separate arrangement.

    9

STOCK
      GRANTS

    9.1               
      Committee Action.  The Committee
      acting in its absolute discretion shall have the right to make Stock Grants
      and
      Stock Unit Grants to Eligible Employees and to Directors.  Each Stock Grant
      and each Stock Unit Grant shall be evidenced by a Stock Grant Certificate,
      and
      each Stock Grant Certificate shall set forth the conditions, if any, under
      which
      Stock will be issued under the Stock Grant or the Stock Unit Grant and the
      conditions under which the Eligible Employee’s or Director’s interest in any
      Stock which has been or may be issued under a Stock Grant will become
      non-forfeitable.

    9.2               
      Conditions.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (a)                
Conditions
      to Issuance of Stock.  The Committee
      acting in its absolute discretion may make the issuance of Stock under a Stock
      Grant or Stock Unit Grant subject to the satisfaction of one, or more than
      one,
      condition which the Committee deems appropriate under the circumstances for
      Eligible Employees or Directors generally or for an Eligible Employee or a
      Director in particular, and the related Stock Grant Certificate shall set forth
      each such condition and the deadline for satisfying each such condition.
 Stock subject to a Stock Grant or Stock Unit Grant shall be issued in the
      name of an Eligible Employee or Director only after each such condition, if
      any,
      has been timely satisfied, and any Stock which is issued under a Stock Grant
      shall be held by the Company pending the satisfaction of the forfeiture
      conditions, if any, under § 9.2(b) for the related Stock Grant.

    (b)                
Conditions
      on Forfeiture of Stock.  The Committee
      acting in its absolute discretion may make any Stock issued in the name of
      an
      Eligible Employee or Director under a Stock Grant non-forfeitable subject to
      the
      satisfaction of one, or more than one, objective employment, performance or
      other condition that the Committee acting in its absolute discretion deems
      appropriate under the circumstances for Eligible Employees or Directors
      generally or for an Eligible Employee or a Director in particular, and the
      related Stock Grant Certificate shall set forth each such condition, if any,
      and
      the deadline, if any, for satisfying each such condition.  An Eligible
      Employee’s or a Director’s non-forfeitable interest in the shares of Stock
      underlying a Stock Grant shall depend on the extent to which he or she timely
      satisfies each such condition.  Each share of Stock underlying a Stock
      Grant shall not be available under § 3 after such grant is effective until such
      time, if any, as such share thereafter is forfeited as a result of a failure
      to
      timely satisfy a forfeiture condition, in which event 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such share of Stock
      shall again become available under § 3 as of the date of such forfeiture.
 Finally, the Company shall have the right to require an Eligible Employee
      or Director to sign an irrevocable stock power in favor of the Company with
      respect to forfeitable shares of Stock issued under this § 9.2(b) in order for
      the Company to effect a forfeiture in accordance with this § 9.2(b).

    (c)                
      Minimum Period of Service.  If the only condition
      to the forfeiture of a Stock Grant or a Stock Unit Grant is the completion
      of a
      period of service, such period of service shall be no less than the three (3)
      year period which starts on the date as of which the Stock Grant or Stock Unit
      Grant is made, unless the Committee determines that a shorter period of service
      (or no period of service) better serves the Company’s interest.

    9.3               
      Dividends, Voting Rights and Creditor
      Status.

    (a)                
Cash Dividends.
 Except
      as otherwise set forth in a
      Stock Grant, if a dividend is paid in cash on a share of Stock after such Stock
      has been issued under a Stock Grant but before the first date that an Eligible
      Employee’s or a Director’s interest in such Stock (1) is forfeited completely or
      (2) becomes completely non-forfeitable, the Company shall pay such cash dividend
      directly to such Eligible Employee or Director.

    (b)                
Stock
      Dividends.  If a dividend is paid on a share
      of Stock in Stock after such Stock has been issued under a Stock Grant but
      before the first date that an Eligible Employee’s or a Director’s interest in
      such Stock (1) is forfeited completely or (2) becomes completely
      non-forfeitable, the Company shall hold such dividend Stock subject to the
      same
      conditions under § 9.2(b) as the related Stock Grant.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)                
Other.
 If
      a dividend (other than a dividend
      described in § 9.3(a) or § 9.3(b)) is paid with respect to a share of Stock
      after such Stock has been issued under a Stock Grant but before the first date
      that an Eligible Employee’s or a Director’s interest in such Stock (1) is
      forfeited completely or (2) becomes completely non-forfeitable, the Company
      shall distribute or hold such dividend in accordance with such rules as the
      Committee shall adopt with respect to each such dividend.

    (d)                
Voting.
 Except
      as otherwise set forth in a Stock
      Grant, an Eligible Employee or a Director shall have the right to vote the
      Stock
      issued under his or her Stock Grant during the period which comes after such
      Stock has been issued under a Stock Grant but before the first date that an
      Eligible Employee’s or Director’s interest in such Stock (1) is forfeited
      completely or (2) becomes completely non-forfeitable.

    (e)                
General
      Creditor Status.  An Eligible Employee and
      a Director to whom a Stock Unit grant is made shall be no more than a general
      and unsecured creditor of the Company with respect to any cash payable under
      such Stock Unit Grant.

    9.4               
      Satisfaction of Forfeiture Conditions.
 A share of Stock shall cease to be subject
      to a Stock Grant at such time
      as an Eligible Employee’s or a Director’s interest in such Stock becomes
      non-forfeitable under this Plan, and the certificate or other evidence of
      ownership representing such share shall be transferred to the Eligible Employee
      or Director as soon as practicable thereafter.

    9.5               
      Income Tax Deduction.

    (a)                
General.
 The
      Committee shall (where the Committee
      under the circumstances deems in the Company’s best interest) make Stock Grants
      and Stock Unit Grants to Eligible Employees either (1) subject to at least
      one
      condition related to one, or more 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    than one, performance
      goal based on the performance goals described in § 9.5(b) which seems likely to
      result in the Stock Grant or Stock Unit Grant qualifying as “performance-based
      compensation” under § 162(m) of the Code or (2) under such other circumstances
      as the Committee deems likely to result in an income tax deduction for the
      Company with respect such Stock Grant or Stock Unit Grant.  A performance
      goal may be set in any manner determined by the Committee, including looking
      to
      achievement on an absolute or relative basis in relation to peer groups or
      indexes.

    (b)                
Performance
      Goals.  A performance goal is described
      in this § 9.5(b) if such goal relates to (1) the Company’s return
      over
      capital costs or increases in return over capital costs, (2) the Company’s total
      earnings or the growth in such earnings, (3) the Company’s consolidated earnings
      or the growth in such earnings, (4) the Company’s earnings per share or the
      growth in such earnings, (5) the Company’s net earnings or the growth in such
      earnings, (6) the Company’s earnings before interest expense, taxes,
      depreciation, amortization and other non-cash items or the growth in such
      earnings, (7) the Company’s earnings before interest and taxes or the growth in
      such earnings, (8) the Company’s consolidated net income or the growth in such
      income, (9) the value of the Company’s common stock or the growth in such value,
      (10) the Company’s stock price or the growth in such price, (11) the Company’s
      return on assets or the growth on such return, (12) the Company’s cash flow or
      the growth in such cash flow, (13) the Company’s total shareholder return or the
      growth in such return, (14) the Company’s expenses or the reduction of such
      expenses, (15) the Company’s sales growth, (16) the Company’s overhead ratios or
      changes in such 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ratios, (17) the
      Company’s expense-to-sales ratios or the changes in such ratios, or (18) the
      Company’s economic value added or changes in such value added.

    (c)                
Adjustments.
 In
      setting performance goals, the
      Committee may exclude from consideration before the performance period begins
      any or all “extraordinary items” as determined under U.S. generally accepted
      accounting principles and any other unusual or non-recurring items, including,
      without limitation, the charges or costs associated with restructurings of
      the
      Company, discontinued operations, and the cumulative effects of accounting
      changes.  Payment of a Stock Grant or a Stock Unit Grant shall not be
      conditioned upon the attainment of a performance goal unless the failure to
      obtain the goal presents a substantial risk of forfeiture within the meaning
      of
      the regulations under Section 409A of the Code.

    9.6               
      Director Stock Unit Program.  The
      Company at the direction of the Committee may establish a revocable “rabbi
      trust” which is a part of this Plan and the Director Stock Unit Program and
      transfer a number of shares of Stock to the trustee of such trust which matches
      the number of Stock Unit Grants made pursuant to the Director Stock Unit Program
      if a determination is made that such transfers will minimize or eliminate the
      adverse financial accounting consequences, if any, to the Company as a result
      of
      Stock Unit Grants made pursuant to the Director Stock Unit Program.

    9.7               
Compliance
      with Section 409A of the Code.
 It is intended that the Stock Grants and Stock Units Grants under
      this
      Plan shall not provide for a deferral of compensation within the meaning of
      Section 409A of the Code, and all the provisions of this Plan shall be construed
      accordingly.  If the Stock Grant or Stock Unit Grant is not subject to a
      substantial risk of forfeiture, as that term is defined in the regulations
      under
      Section 409A, the Stock or cash shall be paid as soon as practicable after
      the
      grant is made but in any event on or before March 15th of the year
      following the 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    year in which the grant
      is
      made.  If the Stock Grant or Stock Unit Grant is subject to a substantial
      risk of forfeiture, as that term is defined in the regulations under section
      409A, the Stock or cash shall be paid as soon as practicable after the
      forfeiture conditions are satisfied but in any event on or before March 15
      of
      the following year.   Notwithstanding the foregoing, a payment of
      Stock or cash will be delayed if the Company reasonably anticipates that the
      Company’s income tax deductions with respect to the payment will be limited by
      Section 162(m) of the Code.  Any payment so delayed will be made at the
      earliest date at which the Company reasonably anticipates the deduction of
      the
      payment will not be limited or the calendar year in which the Eligible Employee
      or Director separates from service.  In addition, a payment of Stock or
      cash will be delayed if the Company reasonably anticipates that the making
      of
      the payment will violate a term of a loan agreement to which the Company is
      a
      party, or other similar contract to which the Company is a party if such
      violation will cause material harm to the Company.  Any payment so delayed
      will be made at the earliest date at which the Company reasonably anticipates
      that the payment will not cause such violation or that the violation will not
      cause material harm to the Company.  In addition, a payment of Stock or
      cash will be delayed if the Company reasonably anticipates that the payment
      will
      violate Federal securities laws or other applicable law.  Any payment so
      delayed will be paid at the earliest date at which the Company reasonably
      anticipates that the payment will not cause such a violation.  Finally, the
      Company may delay a payment upon such other events and conditions as the
      Internal Revenue Service may prescribe in generally applicable guidance. 
No modification of the Stock Grant or Stock Unit Grant shall be allowed if
      the
      resulting Stock Grant or Stock Unit Grant would provide for a deferral of
      compensation within the meaning of Section 409A of the Code.  

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10

NON-TRANSFERABILITY

    No
      Option, Stock Grant, Stock Unit Grant or Stock Appreciation Right shall (absent
      the Committee’s consent) be transferable by an Eligible Employee or a Director
      other than by will or by the laws of descent and distribution, and any Option
      or
      Stock Appreciation Right shall (absent the Committee’s consent) be exercisable
      during a Eligible Employee’s or Director’s lifetime only by the Eligible
      Employee or Director.  The person or persons to whom an Option or Stock
      Grant or Stock Unit Grant or Stock Appreciation Right is transferred by will
      or
      by the laws of descent and distribution (or with the Committee’s consent)
      thereafter shall be treated as the Eligible Employee or Director.

     

    11

SECURITIES
      REGISTRATION

    As
      a condition to the receipt of shares of Stock under this Plan, the Eligible
      Employee or Director shall, if so requested by the Company, agree to hold such
      shares of Stock for investment and not with a view of resale or distribution
      to
      the public and, if so requested by the Company, shall deliver to the Company
      a
      written statement satisfactory to the Company to that effect.  Furthermore,
      if so requested by the Company, the Eligible Employee or Director shall make
      a
      written representation to the Company that he or she will not sell or offer
      for
      sale any of such Stock unless a registration statement shall be in effect with
      respect to such Stock under the 1933 Act and any applicable state securities
      law
      or he or she shall have furnished to the Company an opinion in form and
      substance satisfactory to the Company of legal counsel satisfactory to the
      Company that such registration is not required.  Certificates or other
      evidence of ownership representing the Stock transferred upon the exercise
      of an
      Option or Stock Appreciation Right or upon the lapse of the forfeiture
      conditions, if any, on any Stock Grant may at the discretion of the Company
      bear
      a legend to the effect that such Stock has not been registered under the 1933
      Act or any applicable state securities law and that such Stock cannot be sold
      or
      offered for sale in the absence of an effective registration statement as to
      such Stock under the 1933 Act and any applicable state securities law or an
      opinion in form and substance satisfactory to the Company of legal counsel
      satisfactory to the Company that such registration is not required.

     

    12

LIFE
      OF
      PLAN

    No Option or Stock
      Appreciation Right shall be granted or Stock Grant or Stock Unit Grant made
      under this Plan on or after the earlier of:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (1)                
the tenth anniversary
      of the effective date of this Plan (as determined under §
4), in which event this Plan otherwise thereafter shall continue in effect
      until
      all outstanding Options and Stock Appreciation Rights have been exercised in
      full or no longer are exercisable and all Stock issued under any Stock Grants
      under this Plan have been forfeited or have become non-forfeitable, or

    (2)                
the date on which all
      of the Stock reserved under § 3 has (as a result of the
      exercise of Options or Stock Appreciation Rights granted under this Plan or
      the
      satisfaction of the forfeiture conditions, if any, on Stock Grants) been issued
      or no longer is available for use under this Plan, in which event this Plan
      also
      shall terminate on such date.

    13

ADJUSTMENTS

    13.1             
      Capital Structure.  The number, kind
      or class (or any combination thereof) of shares of Stock reserved under § 3, the
      grant caps described in § 3, the number, kind or class (or any combination
      thereof) of shares of Stock subject to Options or Stock Appreciation Rights
      granted under this Plan and the Option Price of such Options and the SAR Value
      of such Stock Appreciation Rights as well as the number, kind or class (or
      any
      combination thereof) of shares of Stock subject to Stock Grants or Stock Unit
      Grants made under this Plan shall be adjusted by the Committee in an equitable
      manner to reflect any equity restructuring or change in the capitalization
      of
      the Company, including, but not limited to, spin offs, stock dividends, large
      non-reoccurring dividends, rights offerings or stock splits.

    13.2      
             Transactions Described
      in § 424.  The Committee as part of any corporate
      transaction described in § 424(a) of the Code shall adjust (in any manner which
      the Committee in its discretion 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    deems consistent with §
424(a) of the Code) the
      number, kind or class (or any combination thereof) of
      shares of Stock reserved under § 3 and the annual grant caps described in § 3.
 Furthermore, the Committee as part of any corporate transaction described
      in § 424(a) of the Code shall adjust (in any manner which the Committee in its
      discretion deems consistent with § 424(a) of the Code) the number, kind or class
      (or any combination thereof) of shares of Stock subject to any outstanding
      Stock
      Grants or Stock Unit Grants under this Plan and any related grant conditions
      and
      forfeiture conditions, and the number, kind or class (or any combination
      thereof) of shares subject to Option and Stock Appreciation Right grants
      previously made under this Plan and the related Option Price and SAR Value
      for
      each such Option and Stock Appreciation Right, and, further, shall (in any
      manner which the Committee in its discretion deems consistent with § 424(a) of
      the Code and without regard to the annual grant caps described in § 3 of this
      Plan) make any Stock Grants and Option and Stock Appreciation Right grants
      to
      effect the assumption of, or the substitution for, stock grants, stock unit
      grants and option and stock appreciation right grants previously made by any
      other corporation to the extent that such corporate transaction calls for such
      substitution or assumption of such stock grants, stock unit grants and stock
      option and stock appreciation right grants.

    13.3       
            Fractional
      Shares.  If any adjustment under this § 13 would create a
      fractional share of Stock or a right to acquire a fractional share of Stock
      under any Option, Stock Appreciation Right or Stock Grant, such fractional
      share
      shall be disregarded and the number of shares of Stock reserved under this
      Plan
      and the number subject to any Options or Stock Appreciation Right grants and
      Stock Grants shall be the next lower number of shares of Stock, rounding all
      fractions downward.  An adjustment made under this § 13 by the Committee
      shall be conclusive and binding on all affected persons.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    13.4    
         Compliance
      With Section 409A of the Code.  Notwithstanding any other
      provision in this Section 13, no adjustments shall be made in the provisions
      of
      any award under this plan if the adjustment would cause the award to be subject
      to the compensation deferral rules of Section 409A.

    14

CHANGE
      IN
      CONTROL

    If
      there is a Change in Control of the Company, then as of the Change Effective
      Date for such Change in Control any and all conditions to the exercise of all
      outstanding Options and Stock Appreciation Rights on such date and any and
      all
      outstanding issuance and forfeiture conditions on any Stock Grants and Stock
      Unit Grants on such date automatically shall be deemed 100% satisfied as of
      such
      Change Effective Date, and the Board shall have the right (to the extent
      expressly required as part of such transaction) to cancel such Options, Stock
      Appreciation Rights, Stock Grants and Stock Unit Grants after providing each
      Eligible Employee and Director a reasonable period to exercise his or her
      Options and Stock Appreciation Rights and to take such other action as necessary
      or appropriate to receive the Stock subject to any Stock Grants and the cash
      payable under any Stock Unit Grants; provided, if any issuance or forfeiture
      condition described in this § 14 relates to satisfying any performance goal and
      there is a target for such goal, such issuance or forfeiture condition shall
      be
      deemed satisfied under this § 14 only to the extent of such target unless such
      target has been exceeded before the Change Effective Date, in which event such
      issuance or forfeiture condition shall be deemed satisfied to the extent such
      target had been so exceeded.

     

    15

    AMENDMENT
      OR TERMINATION

    This Plan
      may be amended by the Board from time to time to the extent that the Board
      deems
      necessary or appropriate; provided, however, (a) no amendment shall be made
      absent the approval of the shareholders of the Company to the extent such
      approval is required under applicable law or the rules of the stock exchange
      on
      which shares of Stock are listed and (b) no amendment shall be made to § 14 on
      or after the date of any Change in Control which might adversely affect any
      rights which otherwise would vest on the related Change Effective Date.
 The Board also may suspend granting Options or Stock Appreciation Rights
      or making Stock Grants or Stock Unit Grants under this Plan at any time and
      may
      terminate this Plan at any time; provided, however, the Board shall not have
      the
      right unilaterally to modify, amend or cancel any Option or Stock Appreciation
      Right granted or Stock Grant made before such suspension or termination unless
      (1) the Eligible Employee or Director consents in writing to such modification,
      amendment or cancellation or (2) there is a dissolution or liquidation of the
      Company or a transaction described in § 13.2 or § 14.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    16

    MISCELLANEOUS

    16.1      
             Shareholder
      Rights.  No Eligible Employee or Director shall have any
      rights as a shareholder of the Company as a result of the grant of an Option
      or
      a Stock Appreciation Right pending the actual delivery of the Stock subject
      to
      such Option or Stock Appreciation Right to such Eligible Employee or Director.
       Subject to § 9.3, an Eligible Employee’s or a Director’s rights as a
      shareholder in the shares of Stock underlying a Stock Grant which is effective
      shall be set forth in the related Stock Grant Certificate.

    16.2        
           No Contract of
      Employment.  The grant of an Option or a Stock
      Appreciation Right or a Stock Grant or Stock Unit Grant to an Eligible Employee
      or Director under this Plan shall not constitute a contract of employment or
      a
      right to continue to serve on the Board and shall not confer on an Eligible
      Employee or Director any rights upon his or her termination of employment or
      service in addition to those rights, if any, expressly set forth in this Plan
      or
      the related Option Certificate, Stock Appreciation Right Certificate, or Stock
      Grant Certificate.

    16.3       
            Withholding.
 Each Option, Stock Appreciation Right,
      Stock Grant and Stock Unit Grant
      shall be made subject to the condition that the Eligible Employee or Director
      consents to whatever action the Committee directs to satisfy the minimum
      statutory federal and state tax withholding requirements, if any, which the
      Company determines are applicable to the exercise of such Option or Stock
      Appreciation Right or to the satisfaction of any forfeiture conditions with
      respect to Stock subject to a Stock Grant or Stock Unit Grant issued in the
      name
      of the Eligible Employee or Director.  No withholding shall be effected
      under this Plan which exceeds the minimum statutory federal and state
      withholding requirements.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    16.4       
     
Construction. 
All
      references to sections
      (§) are to sections (§) of this Plan unless otherwise indicated.  This Plan
      shall be construed under the laws of the State of Delaware.  Each term set
      forth in § 2 shall, unless otherwise stated, have the meaning set forth opposite
      such term for purposes of this Plan and, for purposes of such definitions,
      the
      singular shall include the plural and the plural shall include the singular.
       Finally, if there is any conflict between the terms of this Plan and the
      terms of any Option Certificate, Stock Appreciation Right Certificate or Stock
      Grant Certificate, the terms of this Plan shall control.

    16.5   
                Other
      Conditions.  Each Option Certificate, Stock Appreciation
      Right Certificate or Stock Grant Certificate may require that an Eligible
      Employee or a Director (as a condition to the exercise of an Option or a Stock
      Appreciation Right or the issuance of Stock subject to a Stock Grant) enter
      into
      any agreement or make such representations prepared by the Company, including
      (without limitation) any agreement which restricts the transfer of Stock
      acquired pursuant to the exercise of an Option or a Stock Appreciation Right
      or
      a Stock Grant or provides for the repurchase of such Stock by the Company.

    16.6    
               Rule
      16b-3.  The Committee shall have the right to amend any
      Option, Stock Grant or Stock Appreciation Right to withhold or otherwise
      restrict the transfer of any Stock or cash under this Plan to an Eligible
      Employee or Director as the Committee deems appropriate in order to satisfy
      any
      condition or requirement under Rule 16b-3 to the extent Rule 16 of the 1934
      Act
      might be applicable to such grant or transfer.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused its duly authorized officer to execute
      this Plan to evidence its adoption of this Plan.

     

    North
      American Galvanizing & Coatings, Inc.

    By:
      /s/ Beth B. Hood, Secretary

    Date:
      September  29, 2006WWW.EXFILE.COM, INC. -- 14680 -- DSL.NET, INC. -- EXHIBIT 10.1 TO FORM 8-K

     

    EXHIBIT
      10.1

     

    

    THE
      ISSUANCE AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THIS NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I)
      IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) IF REASONABLY REQUESTED
      BY
      THE COMPANY, AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
      HOLDER), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION
      IS
      NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
      144A UNDER SAID ACT, AND (C) THE PRIOR APPROVAL OF THE BORROWER (AS NOTED IN
      SECTION 8, BELOW).

    

    SUBORDINATED
      SECURED
      PROMISSORY NOTE

     

     

    
      	$1,182,000	
               October
                30,
                2006

            

    

            

    

    FOR
      VALUE
      RECEIVED, the undersigned, DSL.net, Inc., a Delaware corporation ("Borrower"),
      hereby promises to pay to MDS Acquisition, Inc., a Delaware corporation
      ("Lender"),
      or
      order, the principal sum of One Million One Hundred Eighty Two Thousand Dollars
      ($1,182,000), together with accrued interest as provided herein. This Note
      is
      being issued pursuant to Section 1(c) of the Purchase Agreement, dated as of
      August 22, 2006, between Borrower, Lender and Lender’s parent company, MegaPath
      Inc. (the “Purchase
      Agreement”).
      This
      note constitutes a “Subsequent Closing Note” under the Purchase Agreement and a
“Note” under the Security Agreement (as defined below). 

    

    A.  Interest.
      Interest shall accrue with respect to the principal sum hereunder at eight
      percent (8%) per annum. However, if an Event of Default, as defined herein,
      occurs and is continuing, then interest shall accrue at ten percent (10%) per
      annum. Interest payable hereunder shall be calculated on the basis of a three
      hundred sixty (360) day year for actual days elapsed. 

    

    B.  Payment.

    

    1.  Scheduled
      Payment.
      The
      principal indebtedness, together with all accrued interest, shall be payable
      in
      full on December 31, 2007 (the “Maturity
      Date”).

    

    2.  Prepayment.
      Borrower shall not have the right to prepay, in whole or in part, the principal
      of this Note without the prior written consent of Lender, given in its sole
      discretion.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    3.  Form
      of Payment.
      Principal and interest and all other amounts due hereunder are to be paid in
      lawful money of the United States of America in federal or other immediately
      available funds.

    

    C.  Security
      Interest and Subordination.

    

    1.  Security
      Interest.
      Borrower’s
      obligations hereunder shall
      be
“Obligations,” as defined in
      the
      Security Agreement, dated as of August 28, 2006, between Borrower and Lender
      (the “Security
      Agreement”),
      and
      shall be secured by the Collateral, as defined in the Security
      Agreement.

    

    2.  Subordination.
      Lender’s Lien against the Collateral is subordinated to prior existing Liens
      granted to other lenders to Borrower, to the extent provided in the
      Subordination Agreement, dated as of August 28, 2006, by and among Borrower,
      Lender and Laurus Master Fund, Ltd. (the “Subordination
      Agreement”).

     

    D.  Events
      of Default.
      During
      the continuance of an Event of Default, as defined in the Security Agreement,
      Lender shall have the right to exercise its rights and remedies with respect
      to
      Borrower and the Collateral as provided in the Security Agreement.

    

    E.  Other
      Provisions.
      

     

    1.  Definitions.
      Capitalized terms used herein without definition shall have the meanings
      assigned to them in the Security Agreement.

    

    2.  Governing
      Law; Venue.
      This
      Note shall be governed by the laws of the State of Delaware, without giving
      effect to conflicts of law principles. All actions or proceedings arising in
      connection with this Note shall be conducted in accordance with Section 8(a)
      of
      the Purchase Agreement.

    

    3.  Notices.
      Any
      notice or communication required or desired to be served, given or delivered
      hereunder shall be in the form and manner specified below, and shall be
      addressed to the party to be notified as provided in Section 8(f) of the
      Purchase Agreement.

    

    4.  Lender's
      Rights; Borrower Waivers.
      Lender's acceptance of partial or delinquent payment from Borrower hereunder,
      or
      Lender's failure to exercise any right hereunder, shall not constitute a waiver
      of any obligation of Borrower hereunder, or any right of Lender hereunder,
      and
      shall not affect in any way the right to require full performance at any time
      thereafter. Borrower waives presentment, diligence, demand of payment, notice,
      protest and all other demands and notices in connection with the delivery,
      acceptance, performance, default or enforcement of this Note. In any action
      on
      this Note, Lender need not produce or file the original of this Note, but need
      only file a photocopy of this Note certified by Lender to be a true and correct
      copy of this Note in all material respects.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5.  Enforcement
      Costs.
      Borrower shall pay all costs and expenses, including reasonable and documented
      attorneys' fees and expenses Lender expends or incurs in connection with the
      enforcement of this Note, the collection of any sums due hereunder, any actions
      for declaratory relief in any way related to this Note, or the protection or
      preservation of any rights of the holder hereunder.

    

    6.  Severability.
      Whenever possible each provision of this Note shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      is prohibited by or invalid under applicable law, it shall be ineffective to
      the
      extent of such prohibition or invalidity, without invalidating the remainder
      of
      the provision or the remaining provisions of this Note.

     

    7.  Amendment
      Provisions.
      This
      Note may not be amended or modified, nor may any of its terms be waived, except
      by written instruments signed by Borrower and Lender.

    

    8.  Binding
      Effect.
      This
      Note shall be binding upon, and shall inure to the benefit of, Borrower and
      Lender and their respective successors and assigns; provided,
      however,
      that
      (i) Borrower's rights and obligations shall not be assigned or delegated without
      Lender's prior written consent, given in its sole discretion, and any purported
      assignment or delegation without such consent shall be void ab initio,
      and
      (ii) Lender may not assign, transfer or otherwise convey this Note to any Person
      that is not an Affiliate of Lender.

    

    9.  Time
      of Essence.
      Time is
      of the essence of each and every provision of this Note.

    

    10.  Headings.
      Section
      headings used in this Note have been set forth herein for convenience of
      reference only. Unless the contrary is compelled by the context, everything
      contained in each section hereof applies equally to this entire
      Note.

     

    
      	 	 	 
	 	
              DSL.net,
                Inc.

            
	 
 	 
 	 
 
	 	By:  	/s/ David
              F. Struwas
	 	
              
Name:
              David F. Struwas
	 	Title:
              President & Chief Executive Officer

    

    

    Acknowledged
      & Agreed to:

    

    MDS
      Acquisition, Inc. 

    

    

    

    By:
      /s/
      Paul
      Milley                                     
   

    Name:
      Paul Milley

    Title:
      CFO

     

    
      
        
        

      

      
        3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]