MOHAWK INDUSTRIES INC
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<TYPE>EX-10.38
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<FILENAME>exhi10381.htm
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<p align=right><b><font size="2">Exhibit 10.38</font></b></p>

<p align=center><b><font size="2">MOHAWK INDUSTRIES,
INC.<br>
1997 NON-EMPLOYEE
DIRECTOR STOCK COMPENSATION PLAN<br>
(Amended and
Restated as of March 31, 2003)</font></b></p>



<p align=center><font size="2">ARTICLE 1</font></p>

<p align=center><font size="2">PURPOSE OF THE PLAN</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Background and Purpose</u>. Mohawk Industries, Inc.
maintains the 1997 Non-Employee Director Stock Compensation Plan (the &quot;Plan&quot;)
to promote the long-term growth of Mohawk Industries, Inc. by providing a
vehicle for Non-Employee Directors to increase their proprietary interest in
the Corporation and to attract and retain highly qualified and capable Non-Employee
Directors. The Plan was amended and restated as of October 23, 1997 in order to
add a feature whereby Non-Employee Directors may elect to defer their Annual
Retainer into a phantom stock account the performance and value of which shall
be measured by reference to the performance of the Corporation 's common stock
from time to time. The deferred compensation feature of the Plan became
effective for Annual Retainer payable in 1998 or thereafter. The Plan was
further amended and restated as of March 31, 2003 to change the timing of the
grant of Shares to annual rather than quarterly grants, so as to facilitate
Participants ' compliance with the filing requirements under Section 16(a) of
the Securities Exchange Act of 1934, as amended.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Status of Plan</u>. Article 7 of the Plan is intended
to be a nonqualified, unfunded plan of deferred compensation under the Internal
Revenue Code of 1986, as amended.</font></p>



<p align=center><font size="2">ARTICLE 2</font></p>

<p align=center><font size="2">DEFINITIONS</font></p>

<p align=center>&nbsp;</p>

<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Defined Terms</u>. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:</font></p>



<p><font size="2">&quot;Annual
Retainer&quot; means the annual cash retainer fee (excluding any meeting fees)
payable by the Corporation to a Non-Employee Director for services as a
director (and, if applicable, as the chairman of a committee of the Board) of
the Corporation, as such amount may be changed from time to time.</font></p>



<p><font size="2">&quot;Beneficiary&quot;
means any person or persons designated by a Participant, in accordance with
procedures established by the Plan Administrator, to receive benefits hereunder
in the event of the Participant 's death. If any Participant shall fail to
designate a Beneficiary or shall designate a Beneficiary who shall fail to
survive the Participant, the Beneficiary shall be the Participant 's surviving
spouse, or, if none, the Participant 's surviving descendants (who shall take
per stirpes), and if there are no surviving descendants, the Beneficiary shall
be the Participant 's estate.</font></p>



<p><font size="2">&quot;Board&quot;
means the Board of Directors of the Corporation.</font></p>



<p><font size="2">&quot;Business
Day&quot; shall mean a day on which the Nasdaq National Market or any national
securities exchange or over-the-counter market on which the Shares are traded
is open for business.</font></p>



<p><font size="2">&quot;Cash
Election Form&quot; means a form, substantially in the form attached hereto as
Exhibit A, pursuant to which a Non-Employee Director elects to receive his
Annual Retainer for a particular Service Year in the form of cash, as provided
in Section 6.2.</font></p>



<p><font size="2">&quot;Change of Control&quot; means and includes each of
the following:</font></p>



<p><font size="2">(1)
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a &quot;Person&quot;) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of25% or more of the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the election
of directors (the &quot;Outstanding Company Voting Securities&quot;); provided,
however, that for purposes of this subsection (1), the following acquisitions
shall not constitute a Change of Control: (i) any acquisition by a Person who
is on the Effective Date the beneficial owner of 25% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the Corporation,
(iii) any acquisition by the Corporation, (iv) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
any corporation controlled by the Corporation, or (v) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and(iii)
of subsection (3) of this definition; or</font></p>



<p><font size="2">(2)
Individuals who, as of the Effective Date, constitute the Board (the&quot;
Incumbent Board&quot;) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for election by
the Corporation 's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or</font></p>



<p><font size="2">(3)
Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation (a&quot;
Business Combination&quot;), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of
the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation 's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Company Voting Securities, and (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Corporation or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 25% or
more of the combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination.</font></p>



<p><font size="2">&quot;Committee&quot;
means the Compensation Committee of the Board.</font></p>



<p><font size="2">&quot;Common
Stock&quot; means the $0.01 par value common stock of the Corporation.</font></p>



<p><font size="2">&quot;Corporation&quot;
means Mohawk Industries, Inc.</font></p>



<p><font size="2">&quot;Deferral
Election Form&quot; means a form, substantially in the form attached hereto as
Exhibit B, pursuant to which a Non-Employee Director elects to defer his or her
Annual Retainer under the Plan.</font></p>



<p><font size="2">&quot;Election
Date&quot; means the date established by the Plan as the date by which a
Participant must submit to the Plan Administrator (i) a valid Shares Election
Form in order to receive Shares in lieu of Annual Retainer for a Service Year,
(ii) a valid Cash Election Form to receive cash in a subsequent Service Year,
or (iii) a valid Deferral Election Form to defer Annual Retainer pursuant to
Article 7. The Election Date is December 31 of each year with respect to an
election to be effective for the Service Year beginning on the following annual
meeting date. For example, the Election Date with respect to the Service Year
from May 2003 to May 2004 would be December 31, 2002; provided, however, that
the Election Date for a newly eligible Participant shall be the 30th day
following the date on which such individual becomes a Non-Employee Director.</font></p>



<p><font size="2">&quot;Fair
Market Value per Share&quot; as of a particular date means the closing sales
price of one share of Common Stock on such date as reported on the Nasdaq
National Market or any national securities exchange or over-the-counter market
on which the Shares are then traded or, in the absence of reported sales on
such date, the closing sales price on the immediately preceding date on which
sales were reported.</font></p>



<p><font size="2">&quot;Non-Employee
Director&quot; means a director of the Corporation who is not an employee of
the Corporation or any subsidiary of the Corporation.</font></p>



<p><font size="2">&quot;Participant&quot;
means any Non-Employee Director who is participating in the Plan.</font></p>



<p><font size="2">&quot;Phantom
Stock&quot; means a hypothetical unit of value equal to the Fair Market Value
of one share of Common Stock. The concept of Phantom Stock is for bookkeeping
purposes only.</font></p>



<p><font size="2">&quot;Plan&quot;
means the Mohawk Industries, Inc. 1997 Non-Employee Director Stock Compensation
Plan, as amended and restated.</font></p>



<p><font size="2">&quot;Plan
Administrator&quot; means the Committee or the agent(s), if any, appointed by
the Committee pursuant to Section 3.2 to assist in the administration of the
Plan.</font></p>



<p><font size="2">&quot;Service
Year&quot; means a year of director service, which is the approximate 12-month
period between annual meetings of the Corporation 's shareholders.</font></p>



<p><font size="2">&quot;Shares&quot;
means shares of Common Stock.</font></p>



<p><font size="2">&quot;Shares
Election Form&quot; means a form, substantially in the form attached hereto as
Exhibit C, pursuant to which a Non-Employee Director elects to receive Shares
in lieu of all (but not less than all) of such Non-Employee Director 's Annual
Retainer, as provided in Section 6.1.</font></p>



<p><font size="2">&quot;Stock
Account&quot; means the account established by the Corporation for each
Participant for Annual Retainer deferred pursuant to Article 7 of the Plan, the
performance and value of which shall be measured by reference to the Fair
Market Value of the Common Stock from time to time. The maintenance of
individual Stock Accounts is for bookkeeping purposes only.</font></p>



<p><font size="2">&quot;Termination
of Service&quot; occurs when a Participant ceases to serve as a Non- Employee
Director for any reason.</font></p>



<p align=center><font size="2">ARTICLE 3</font></p>

<p align=center><font size="2">ADMINISTRATION OF THE PLAN</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Administrator of the Plan</u>. The Plan shall be
administered by the Committee.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Authority of Committee</u>. The Committee shall have
full power and authority to: (i) interpret and construe the Plan and adopt such
rules and regulations as it shall deem necessary and advisable to implement and
administer the Plan, and (ii) designate persons other than members of the
Committee or the Board to carry out its responsibilities, subject to such
limitations, restrictions and conditions as it may prescribe, such
determinations to be made in accordance with the Committee 's best business
judgment as to the best interests of the Corporation and its stockholders and
in accordance with the purposes of the Plan. The Committee may delegate
administrative duties under the Plan to one or more agents as it shall deem
necessary or advisable, such agents to be referred to herein as the Plan
Administrator.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effect of Committee Determinations</u>. No member of
the Committee or the Board or the Plan Administrator shall be personally liable
for any action or determination made in good faith with respect to the Plan or
as to any settlement of any dispute between a Non-Employee Director and the
Corporation. Any decision or action taken by the Committee or the Board with
respect to the administration or interpretation of the Plan shall be conclusive
and binding upon all persons.</font></p>



<p align=center><font size="2">ARTICLE 4</font></p>

<p align=center><font size="2">ELIGIBILITY</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Eligibility</u>. All active Non-Employee Directors of
the Corporation shall be eligible to participate in the Plan.</font></p>



<p align=center><font size="2">ARTICLE 5</font></p>

<p align=center><font size="2">SHARES SUBJECT TO THE PLAN</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shares Subject to the Plan</u>. Subject to adjustment
as provided in the Plan, the maximum number of Shares which may be granted
under Article 6 or distributed pursuant to Article 7 under the Plan is 37,500
(post-split) Shares. The Shares distributable under the Plan must be previously
issued and repurchased Shares and may not be original issue Shares.</font></p>



<p align=center><font size="2">ARTICLE 6</font></p>

<p align=center><font size="2">ELECTIVE RECEIPT OF SHARES</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each Non-Employee Director shall
be granted Shares subject to the following terms and conditions: </font> </p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Election to Receive Shares</u>. On the first Business
Day of January following each annual meeting of shareholders of the
Corporation, Shares shall be granted to each Non-Employee Director who either
(i) on or before the Election Date for the then-current Service Year, filed
with the Plan Administrator a written irrevocable Shares Election Form,
indicating such Non-Employee Director 's election to receive Shares in lieu of all
(but not less than all) of his or her Annual Retainer payable with respect to
such Service Year, or (ii) filed a Shares Election Form for any prior Service
Year and did not file a Cash Election Form (as described in Section 6.2 below)
with respect to the current Service Year.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subsequent Elections to Receive Cash</u>. Once a
Non-Employee Director files a Shares Election Form or a Deferral Election Form
for any Service Year, that election will carry forward into subsequent Service
Years unless, on or before the Election Date for any subsequent Service Year,
the Non-Employee Director files a Cash Election Form for such subsequent
Service Year. A Cash Election Form shall be valid for one Service Year only. A
new Cash Election Form will be required to be filed for any Service Year in
which the Non-Employee Director desires to receive his or her Annual Retainer
in cash. Once a Non-Employee Director files a Shares Election Form or a
Deferral Election Form for any Service Year, then thereafter for any Service
Year for which a Cash Election Form is not timely filed, the election will
automatically revert to the last-filed Shares Election Form or Deferral
Election Form, as the case may be.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Number of Shares</u>. The payment of the Annual
Retainer in the form of Shares shall be paid approximately mid-way through the
Service Year (January), but based on the quarterly price points during the
preceding calendar year. Therefore, the number of Shares to be granted in
January of each year pursuant to this Article 6 shall be the sum of A, B, C and
D below: </font> </p>



<p><font size="2">A = (i) one quarter (&frac14;) of the Annual Retainer for the
applicable Service Year, divided by (ii)&nbsp;the Fair Market Value per Share
as of January 1 of the immediately prior calendar year (whether or not the
director was in office on such prior January 1).</font></p>



<p><font size="2">B
= (i)&nbsp;one quarter (&frac14;) of the Annual Retainer for the applicable Service
Year, divided by (ii) the Fair Market Value per Share as of April 1 of the
immediately prior calendar year (whether or not the director was in office on
such prior April 1).</font></p>



<p><font size="2">C
= (i) one quarter (&frac14;) of the Annual Retainer for the applicable Service Year,
divided by (ii) the Fair Market Value per Share as of July 1 of the immediately
prior calendar year.</font></p>



<p><font size="2">D
= (i) one quarter (&frac14;) of the Annual Retainer for the applicable Service Year,
divided by (ii) the Fair Market Value per Share as of October 1 of the
immediately prior calendar year.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding the above, for
the grant date in January 2004, the number of Shares to be granted shall be the
number of whole Shares equal to the sum of B, C and D above, so as not to
duplicate Share grants made prior to the 2003 amendment of the Plan.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In determining the number of
Shares to be granted, any fraction of a share will be disregarded and the remaining
amount of the Annual Retainer shall be paid in cash.</font></p>



<p align=center><font size="2">ARTICLE 7</font></p>

<p align=center><font size="2">ELECTION TO DEFER ANNUAL RETAINER</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Election to Defer</u>. A Non-Employee Director may
elect to defer his or her Annual Retainer under the Plan by delivering a
properly completed and signed Deferral Election Form to the Plan Administrator
on or before the Election Date. The Non-Employee Director 's deferral will be
effective as of the first day of the Service Year beginning after the Plan
Administrator receives the Non-Employee Director 's Deferral Election Form, or,
in the case of a newly eligible Participant, on the first day of the calendar
month beginning after the Plan Administrator receives such Non-Employee
Director 's Deferral Election Form.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Termination or Continuation of Deferral Election Form</u>.
</font>
</p>



<p><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Voluntary Termination</u>. A
Participant may terminate his or her Deferral Election Form at any time. Such
termination will be effective on the first day of the Service year after the
Participant notifies the Plan Administrator of the Participant 's termination
of the Deferral Election Form. Any Annual Retainer deferred prior to the
termination of the Deferral Election Form shall remain deferred in accordance
with the original Deferral Election Form and the Plan. The Participant may
deliver a new Deferral Election Form and thereby defer the receipt of any
future Annual Retainer, effective as of the first day of the following Service
Year or the first day of any subsequent Service Year.</font></p>



<p><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Continuation of Deferral Election
Form</u>. If the Participant fails to terminate an effective Deferral Election
Form prior to the Election Date preceding the next Service Year, the
Participant 's Deferral Election Form in effect during the previous Service
Year shall continue in effect during the new Service Year.</font></p>



<p><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Automatic Termination of Deferral
Election Form</u>. A Participant 's Deferral Election Form will automatically
terminate at the earlier of (i) the Participant 's Termination of Service, or
(ii) the termination of the Plan.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Stock Account</u>. For bookkeeping purposes, the Annual
Retainer which a Non-Employee Director elects to defer pursuant to the Plan
shall be transferred to and held in an individual Stock Account in the name of
such Participant. Amounts to be deferred shall be credited to the Participant 's
Stock Account as of the date such Annual Retainer is otherwise payable. Amounts
deferred into a Stock Account are recorded as units of Phantom Stock, and
fractions thereof, with one unit equating to a single share of Common Stock. Thus,
the value of one unit of Phantom Stock shall equal the Fair Market Value of a
single share of Common Stock. The use of units is merely a bookkeeping
convenience; the units are not actual shares of Common Stock. As described
below in Section 7.5, a Participant may elect to have some or all of the value
of his or her Stock Account distributed in actual shares of Common Stock. The
maximum number of Phantom Stock units that may be allocated by deferral of
Annual Retainer to Stock Accounts under the Plan is 25,000. To the extent
required for bookkeeping purposes, a Participant 's Stock Account will be
subdivided to reflect deferred Annual Retainer on a year-by-year basis. For
example, a 1998 Stock Sub-Account, a 1999 Stock Sub-Account, and so on.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Credits to the Stock Account</u>.</font></p>



<p><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Initial Crediting of Stock Account</u>.
If a Participant elects to defer Annual Retainer into his or her Stock Account,
such account shall be credited, as of the date described in Section 7.1, with
that number of units of Phantom Stock, and fractions thereof, obtained by
dividing the dollar amount to be deferred into the Stock Account by the Fair
Market Value of the Common Stock as of such date.</font></p>



<p><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Dividend Equivalents</u>. Effective
as of the payment date for each cash dividend on the Common Stock, the Stock
Account of each Participant who had a balance in his or her Stock Account on
the record date for such dividend shall be credited with a number of units of
Phantom Stock, and fractions thereof, obtained by dividing (i) the aggregate
dollar amount of such cash dividend payable in respect of such Participant 's
Stock Account (determined by multiplying the dollar value of the dividend paid
upon a single share of Common Stock by the number of units of Phantom Stock
credited to the Participant 's Stock Account on the record date for such
dividend); by (ii) the Fair Market Value of the Common Stock on the business
day immediately preceding the payment date for such cash dividend.</font></p>



<p><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Stock Dividends</u>. Effective as
of the payment date for each stock dividend on the Common Stock, additional
units of Phantom Stock shall be credited to the Stock Account of each
Participant who had a balance in his or her Stock Account on the record date
for such dividend. The number of units that shall be credited to the Stock
Account of such a Participant shall equal the number of shares of Common Stock,
and fractions thereof, which the Participant would have received as stock
dividends had he or she been the owner on the record date for such stock dividend
of the number of shares of Common Stock equal to the number of units credited
to his or her Stock Account on such record date.</font></p>



<p><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Allocation of Dividends</u>. To
the extent required for bookkeeping purposes, the allocation of additional
units of Phantom Stock attributable to cash dividends or stock dividends will
be made to the Stock Sub-Account holding existing units to which the cash
dividend or stock dividend relates. For example, a Participant 's 1998 Stock
Sub-Account will be credited with dividends attributable to units held in the
1998 Stock Sub-Account. A Participant 's 1999Stock Sub-Account will be credited
with dividends attributable to units held in the 1999 Stock Sub-Account, and so
on.</font></p>



<p><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Recapitalization</u>. If, as a
result of a recapitalization of the Corporation, the outstanding shares of
Common Stock shall be changed into a greater number or smaller number of
shares, the number of units of Phantom Stock credited to a Participant 's Stock
Account shall be appropriately adjusted on the same basis.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font> <u><font size="2">Distributions.</font></u></p>



<p><font size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Distributions</u>. Distributions
from the Stock Account shall be made either in cash or shares of Common Stock,
as indicated by the Participant at least six months prior to the scheduled
distribution. Any fractional units shall be paid in cash. The number of units
to be distributed from a Participant 's Stock Account shall be valued by
multiplying the number of such units of Phantom Stock by the Fair Market Value
of the Common Stock as of the business day immediately preceding the date such
distribution is to occur. The shares of Common Stock distributable to
Non-Employee Directors under the Plan must be previously issued and repurchased
shares and may not be original issue shares.</font></p>



<p><font size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Timing</u>. Distributions from a
Participant 's Stock Account shall commence on the date the Participant selects
on the initial Deferral Election Form. Any date selected by the Participant
must be at least two calendar years following the date of the initial Deferral
Election Form and will apply to all amounts (including future deferrals) held
in the Stock Account. In no event, however, shall a Participant 's Account
commence to be distributed later than the first regular business day of the
fourth month following the Participant 's death. If the Participant fails to
designate a payment commencement date in the Participant 's initial Deferral
Election Form or within six months of such initial Deferral Election Form, the
Participant 's Stock Account shall commence to be distributed no later than the
first regular business day of the fourth month following the Participant 's
Termination of Service.</font></p>



<p><font size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Optional Forms of Payment</u>. Distributions
from Participant Stock Accounts (either in cash or in Common Stock) may be paid
to the Participant either in a lump sum or in a number of approximately equal
annual installments designated by the Participant on the Participant 's initial
Deferral Election Form. Such annual installments may be for 5 years, 10 years
or 15 years. The method of payment (e.g., in lump sum or installments) elected
on the Participant 's initial Deferral Election Form will apply to all amounts
(including future deferrals)held in the Stock Account. If a Participant elects
to receive a distribution of his or her Stock Account in cash installments, the
Plan Administrator may purchase an annuity from an insurance company which
annuity will pay the Participant the desired annual installments. If the Plan
Administrator purchases an annuity contract, the Non-Employee Director will
have no further rights to receive payments from the Corporation or the Plan
with respect to the amounts subject to the annuity. If the Plan Administrator
does not purchase an annuity contract, the value of the Stock Account remaining
unpaid shall continue to receive allocations of dividends as provided in
Section 7.4. If the Participant fails to designate a payment method in his or
her initial Deferral Election Form or within six months of such initial
Deferral Election Form, the Participant 's Stock Account shall be distributed
in a lump sum.</font></p>



<p><font size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Irrevocable Elections</u>. The
payment commencement date and payment form elected or deemed elected on the
Participant 's initial Deferral Election Form shall become irrevocable and may
not be modified six months after the execution of such initial Deferral
Election Form. A Participant 's election of payment commencement date and
payment form shall be uniform for all years ' Annual Retainer deferred under
the Plan.</font></p>



<p><font size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Acceleration of Payment</u>. If a
Participant elects an installment distribution and the value of such annual
installment payment elected by the Participant would result in a combined
distribution of cash and Common Stock(valued at its Fair Market Value on the
initial commencement date) of less than $3,000, the Plan Administrator shall
accelerate payment of the Participant 's benefits over a lesser number of whole
years (but in increments of 5 or 10years) so that the annual amount distributed
is at least $3,000. If payment of the Participant 's benefits over a 5 year
period will not provide annual distributions of at least $3,000, the
Participant 's Stock Account shall be paid in a lump sum.</font></p>



<p><font size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Payment to Beneficiary</u>. Upon
the Participant 's death, all unpaid amounts held in the Participant 's Stock
Account shall be paid to the Participant 's Beneficiary in the same benefit
payment form the Participant elected on the Deferral Election Form and in
accordance with the payment distribution rules set forth in the Plan. Such
payment will be commence to be paid on the first business day of the fourth
month following the Participant 's death.</font></p>



<p><font size="2">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Payment to Minors and
Incapacitated Persons</u>. In the event that any amount is payable to a minor
or to any person who, in the judgment of the Plan Administrator, is incapable
of making proper disposition thereof, such payment shall be made for the
benefit of such minor or such person in any of the following ways as the Plan
Administrator, in its sole discretion, shall determine:</font></p>



<p><font size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By payment to the legal
representative of such minor or such person;</font></p>



<p><font size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By payment directly to such minor or
such person;</font></p>



<p><font size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By payment in discharge of bills
incurred by or for the benefit of such minor or such person. The Plan
Administrator shall make such payments without the necessary intervention of
any guardian or like fiduciary, and without any obligation to require bond or
to see to the further application of such payment. Any payment so made shall be
in complete discharge of the Plan 's obligation to the Participant and his or
her Beneficiaries.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Change of Control</u>. Notwithstanding any other
provisions in the Plan, in the event there is a Change of Control, (i) any
Participant whose service is terminated on account of such Change of Control
shall receive an immediate lump sum payment of the Participant 's Stock Account
balance, and (ii) any Participant who has commenced receiving installment
distributions from the Plan (other than from an annuity contract purchased from
an insurance company) shall immediately receive a lump sum payment in an amount
equal to the unpaid balance of the Participant 's Stock Account. A Participant 's
service shall be considered to have &quot;terminated on account of such Change
of Control&quot; only if the Participant 's service on the Board is terminated
without cause during the 24-month period following the Change of Control.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Financial Hardship</u>. The Committee may, in its sole
discretion, accelerate the making of payment to a Participant of an amount
reasonably necessary to handle a severe financial hardship of a sudden and unexpected
nature due to causes not within the control of the Participant. Such payment
may be made even if the Participant has not incurred a Termination of Service.
All financial hardship distributions shall be made in cash in a lump sum. Such
payments will be made on a first-in, first-out basis so that the oldest Annual
Retainer deferred under the Plan shall be deemed distributed first in a
financial hardship.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Application for Benefits</u>. The Plan Administrator
may require a Participant or Beneficiary to complete and file certain forms as
a condition precedent to receiving the payment of benefits. The Plan
Administrator may rely upon all such information given to it, including the
Participant 's current mailing address. It is the responsibility of all persons
interested in receiving a distribution pursuant to the Plan to keep the Plan
Administrator informed of their current mailing addresses.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Designation of Beneficiary</u>. Each Participant from
time to time may designate any person or persons (who may be designated
contingently or successively and who may be an entity other than a natural
person) as his or her Beneficiary or Beneficiaries to whom the Participant 's
Stock Account is to be paid if the Participant dies before receipt of all such
benefits. Each Beneficiary designation shall be on the form prescribed by the
Plan Administrator and will be effective only when filed with the Plan
Administrator during the Participant 's lifetime. Each Beneficiary designation
filed with the Plan Administrator will cancel all Beneficiary designations
previously filed with the Plan Administrator. The revocation of a Beneficiary
designation, no matter how effected, shall not require the consent of any
designated Beneficiary.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Responsibility for Investment Choices</u>. Each
Participant is solely responsible for any decision to defer Annual Retainer
into his or her Stock Account and accepts all investment risks entailed by such
decision, including the risk of loss and a decrease in the value of the amounts
he or she elects to defer into his or her Stock Account.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Funding</u>. Deferred benefits under this Article 7 shall
be paid from the general assets of the Corporation or as otherwise directed by
the Corporation. To the extent that any Participant acquires the right to
receive payments under the Plan (from whatever source), such right shall be no
greater than that of an unsecured general creditor of the Corporation. Participants
and their Beneficiaries shall not have any preference or security interest in
the assets of the Corporation other than as a general unsecured creditor.</font></p>



<p align=center><font size="2">ARTICLE 8</font></p>

<p align=center><font size="2">AMENDMENT AND TERMINATION</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Amendment, Suspension or Termination</u>. The Board may
amend, suspend or terminate the Plan, at any time and from time to time,
without notice, to any extent deemed advisable; provided, however, that (i),
the Board may condition any amendment or modification on the approval of
stockholders of the Corporation if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws, policies or
regulations, and (ii) no such amendment or termination shall (without the
written consent of the Participant, if living, and if not, the Participant 's
Beneficiary) adversely affect any benefit under the Plan which has accrued with
respect to the Participant or Beneficiary as of the date of such amendment or
termination regardless of whether such benefit is in pay status.</font></p>



<p align=center><font size="2">ARTICLE 9</font></p>

<p align=center><font size="2">MISCELLANEOUS</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Right to Service</u>. Except as provided in the Plan,
no Non-Employee Director shall have any claim or right to be granted Shares
under the Plan. Neither the Plan nor any action pursuant thereto shall be
construed as giving any Non-Employee Director a right to be retained in the
service of the Corporation. The adoption of this Plan shall not affect any
other compensation, retirement or other benefit plan or program in effect for
the Corporation.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Validity</u>. In the event that any provision of the
Plan is held to be invalid, void or unenforceable, the same shall not affect,
in any respect whatsoever, the validity of any other provision of the Plan.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Inurement of Rights and Obligations</u>. The rights and
obligations under the Plan and any related agreements shall inure to the
benefit of, and shall be binding upon the Corporation, its successors and
assigns, and the Non-Employee Directors and their beneficiaries.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Headings</u>. Headings are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of the Plan.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing Law</u>. The Plan shall be construed,
governed and enforced in accordance with the law of Georgia, except as such
laws are preempted by applicable federal law.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Spendthrift Clause</u>. None of the benefits, payments,
proceeds or distribution under the Plan shall be subject to the claim of any
creditor of any Participant or Beneficiary, or to any legal process by any
creditor of such Participant or Beneficiary, and none of them shall have any
right to alienate, commute, anticipate or assign any of the benefits, payments,
proceeds or distributions under the Plan except to the extent expressly
provided herein to the contrary.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Merger</u>. The Plan shall not be automatically
terminated by the Corporation 's acquisition by, merger into, or sale of
substantially all of its assets to any other organization, but the Plan shall
be continued thereafter by such successor organization. All rights to amend,
modify, suspend or terminate the Plan shall be transferred to the successor
organization, effective as of the date of the combination or sale.</font></p>



<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Release</u>. Any payment to Participant or Beneficiary,
or to their legal representatives, in accordance with the provisions of the
Plan, shall to the extent thereof be in full satisfaction of all claims
hereunder against the Plan Administrator and the Corporation, either of whom
may require such Participant, Beneficiary, or legal representative, as a
condition precedent to such payment, to execute a receipt and release therefore
in such form as shall be determined by the Plan Administrator or the
Corporation, as the case may be.</font></p>



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