1.

There are three reward vehicles:  1) Performance-based restricted stock, 2) Time-vested restricted stock and 3) Stock options.  At least two will be used each year.  For the Chief Executive Officer, Fiscal Year 2018 performance shares will be 50%, time-vested restricted stock will be 25% and stock options will be 25%. For the Chief Financial Officer, Fiscal Year 2018 performance shares will be 67%, and time-vested restricted stock will be 33%.

2.

Time-vested restricted stock is fixed and not subject to performance measures and will vest at the end of the third fiscal year after the grant date (August 31, 2020), subject to grant date, pricing, and termination provisions listed below.

3.

Stock options will be fixed based on a Black-Scholes calculation, and will vest in three equal annual allotments beginning on August 31, 2018, and be exercisable for 10 years.

4.

Performance shares will be in the form of restricted stock subject to performance and other criteria as follows.

·

Performance measures:  Target is earnings per share (EPS) based on Fiscal Year 2018’s budget determined by dividing net income by the number of diluted shares outstanding at August 31, 2017 (end of most recent fiscal year). Actual is net income for the measurement period divided by the same number of diluted shares used in the Target. 

·

Performance measurement period:  September 1, 2017 through August 31, 2018

·

Vesting:  2 years after performance measurement period (August 31, 2020)

·

Grant date:  first day of measurement period

·

Stock price for award:  closing price for last trading day prior to grant date

·

Threshold:  the point at which an award is earned (80% of the target).  Between threshold and target the award increases on a linear basis.

·

Stretch area:  performance in excess of actual EPS for Fiscal Year 2017 (200% for 120% achievement of actual EPS for Fiscal Year 2017) with a cap of 200%.  For achieving performance between actual EPS for Fiscal Year 2017 and cap, the award increases on a linear basis (5% increase over target payout, for every 1% increase above EPS for Fiscal Year 2017).

·

Individual opportunity is $50,000 at target; performance share opportunity (50%) is $25,000 at target

·

Stock price (8/31/2017) is $25.00

·

Threshold is 80% of target

Performance

Payout % of Target

Vesting Shares

Reward Value

Threshold 80% of target

50 

%  

500 

$

12,500 

Between target and Fiscal Year 2017 actual

100 

%  

1,000 

$

25,000 

Stretch at 120% of Fiscal Year 2017 actual

200 

%  

2,000 

$

50,000 

5.

Termination provisions:

Termination Event

Year

Payment in Shares

Retirement

Pro-rated

Paid as scheduled

Voluntary

All shares forfeit

No payment

Without cause

Pro-rated

Paid as scheduled

With cause

All shares forfeit

No payment

Upon change of control

Acceleration at target

Paid at change of control

Death or disability

Pro-rated

Paid as scheduled

6.

Eligibility:  key executives and others

Participant

Opportunity at Target 

Adam P. Chase

 $

566,666 

Kenneth J. Feroldi

 $

171,000 

·

Q4 FY17           Board approves continuance of plan and sets grant date

·

Q4 FY17           Goals and awards proposed by management for FY18

·

Q4 FY17           C&MD Committee reviews and approves FY18 plan

·

Q1 FY18           Management presents FY17 plan achievement

·

Q1 FY18           C&MD Committee approves FY17 results

·

Q1 FY19           Management presents FY18 plan achievement

·

Q1 FY19           C&MD Committee approves FY18 results

·

Q4 FY20           Vested FY18 shares are released to participant