EXECUTIVE PERQUISITE/FLEX POLICY EFFECTIVE JANUARY 1, 1998 A. EXECUTIVE PERQUISITES The Company will provide for the direct payment of selected perquisite expenses that are offered because of competitive compensation practice and/or because the service is being expensed in the business interests of the Company. The following outlines the executive perquisites offered: -- Physical examination every three years under 40 years of age, every two years over age 40 -- Tax preparation fees up to $750/year -- Tax gross-up on 25% of the imputed income from the IRS "Annual Lease Value Table" and IRS defined fuel costs for personal use or actual expense -- Automobile actual operating expenses B. OFFICER FLEX ACCOUNT The Company will reimburse Corporate officers for the reasonable cost of certain services. The maximum allowable reimbursement will be up to 10% of the officers' annual base pay. Expenses eligible for reimbursement are as follows: -- Athletic, country and business club memberships -- Automobile lease, or, if the automobile is purchased, monthly reimbursement equivalent to the pro-forma lease cost C. INELIGIBLE EXPENSES The following expenses will no longer be eligible for direct payment or reimbursement: -- Home security system -- Legal advice -- Tax assistance in excess of $750/year -- Financial counseling -- Daycare for children -- Season tickets to sporting and cultural events -- First class business travel -- Spouse travel not required by business needs -- Additional personal liability insurance -- Additional business liability insurance -- Education for children -- Additional business travel insurance -- Supplemental life insurance -- Up to $3,000/per calendar year of health care expenses not covered by Company benefit plans -- Personal computer leases