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Exhibit 10.1
 
ARTICLE 1.
 
PURPOSE AND ADOPTION OF THE
CRITICAL DIGITAL DATA, INC. 2009 STOCK INCENTIVE PLAN
 
1.1
Purpose.  The purpose of the Critical Digital Data, Inc. 2009 Stock Incentive
Plan (hereinafter referred to as the “Plan”) is to assist in attracting and
retaining highly competent key employees, non-employee directors and consultants
and to act as an incentive in motivating selected key employees, non-employee
directors and consultants of Critical Digital Data, Inc. and its Subsidiaries
(as defined below) to achieve long-term corporate objectives.

 
1.2
Adoption and Term.  The Plan has been approved by the Board of Directors
(hereinafter referred to as the “Board”) of Critical Digital Data, Inc.
(hereinafter referred to as the “Company”), to be effective as of the date the
Plan is approved by the Board (the “Effective Date”), subject to the approval of
the stockholders of the Company solely for any Incentive Stock Options (as
defined below).  The Plan shall remain in effect until terminated by action of
the Board; provided, however, that no Incentive Stock Option (as defined below)
may be granted hereunder after the tenth anniversary of the Effective Date and
the provisions of Articles VII and VIII with respect to performance-based awards
to “covered employees” under Section 162(m) of the Code (as defined below) shall
expire as of the fifth anniversary of the Effective Date.  The Company intends
that any grant, award or other acquisition of the Company’s securities pursuant
to the Plan to any officer and/or director of the Company shall be exempt from
Section 16(b) of the Exchange Act.

 
ARTICLE 2.
 
DEFINITIONS
 
For the purposes of this Plan, capitalized terms shall have the following
meanings:
 
2.1
Award means any grant to a Participant of one or a combination of Non-Qualified
Stock Options or Incentive Stock Options, and Stock Appreciation Rights
described in Article 6, Restricted Shares described in Article 7 and Performance
Awards described in Article 8.

 
2.2
Award Agreement means a written agreement between the Company and a Participant
or a written notice from the Company to a Participant specifically setting forth
the terms and conditions of an Award granted under the Plan.

 
2.3
Award Period means, with respect to an Award, the period of time set forth in
the Award Agreement during which specified target performance goals must be
achieved or other conditions set forth in the Award Agreement must be satisfied.

 
2.4
Beneficiary means an individual, trust or estate who or which, by a written
designation of the Participant filed with the Company or by operation of law,
succeeds to the rights and obligations of the Participant under the Plan and an
Award Agreement upon the Participant’s death.

 
2.5
Board means the Board of Directors of the Company.

 
2.6
Change in Control means, and shall be deemed to have occurred upon the
occurrence of, any one of the following events:

 
 
(a)
Consummation by the Company of a reorganization, merger, consolidation or
similar transaction (a “Reorganization Transaction”), in each case, unless,
immediately following such Reorganization Transaction, more than 50% of,
respectively, the outstanding shares of common stock (or similar equity
security) of the corporation or other entity resulting from or surviving such
Reorganization Transaction and the combined voting power of the securities of
such corporation or other entity entitled to vote generally in the election of
directors, is then beneficially owned, directly or indirectly, by the
individuals and entities who were the respective beneficial owners of the
Outstanding Common Stock and the Company Voting Securities immediately prior to
such Reorganization Transaction in substantially the same proportions as their
ownership of the Outstanding Common Stock and Company Voting Securities
immediately prior to such Reorganization Transaction; or

 
 
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(b)
Consummation by the Company of (i) a complete liquidation or dissolution of the
Company or (ii) the sale or other disposition of all or substantially all of the
assets of the Company to a corporation or other entity, unless, with respect to
such corporation or other entity, immediately following such sale or other
disposition more than 50% of, respectively, the outstanding shares of common
stock (or similar equity security) of such corporation or other entity and the
combined voting power of the securities of such corporation or other entity
entitled to vote generally in the election of directors, is then beneficially
owned, directly or indirectly, by the individuals and entities who were the
respective beneficial owners of the Outstanding Common Stock and the Company
Voting Securities immediately prior to such sale or disposition in substantially
the same proportions as their ownership of the Outstanding Common Stock and
Company Voting Securities immediately prior to such sale or disposition.

 
2.7
Code means the Internal Revenue Code of 1986, as amended.  References to a
section of the Code include that section and any comparable section or sections
of any future legislation that amends, supplements or supersedes said section.

 
2.8
Committee means the committee established in accordance with Section 3.1.

 
2.9
Company means Critical Digital Data, Inc., a Nevada corporation, and its
successors.

 
2.10
Common Stock means Common Stock of the Company, par value $.001 per share.

 
2.11
Company Voting Securities means the combined voting power of all outstanding
securities of the Company entitled to vote generally in the election of
directors of the Company.

 
2.12
Date of Grant means the date designated by the Committee as the date as of which
it grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.

 
2.13
Effective Date shall have the meaning given to such term in Section 1.2.

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

 
2.15
Exercise Price means, with respect to a Stock Appreciation Right, the amount
established by the Committee in the related Award Agreement as the amount to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.2(b).

 
2.16
Fair Market Value means, as of any applicable date:  (i) if the Common Stock is
listed on a national securities exchange or is authorized for quotation on The
Nasdaq National Market System (“NMS”), the closing price, regular way, of the
Common Stock on such exchange or NMS, as the case may be, on such date or if no
sale of the Common Stock shall have occurred on such date, on the next preceding
date on which there was such a reported sale; or (ii) if the Common Stock is not
listed for trading on a national securities exchange or authorized for quotation
on NMS, the closing bid price as reported by The Nasdaq SmallCap Market on such
date, or if no such price shall have been reported for such date, on the next
preceding date for which such price was so reported; or (iii) if the Common
Stock is not listed for trading on a national securities exchange or authorized
for quotation on NMS or The Nasdaq SmallCap Market (if applicable), the last
reported bid price published in the “pink sheets” or displayed on the National
Association of Securities Dealers, Inc. (“NASD”) Electronic Bulletin Board, as
the case may be; or (iv) if the Common Stock is not listed for trading on a
national securities exchange, is not authorized for quotation on NMS or The
Nasdaq SmallCap Market and is not published in the “pink sheets” or displayed on
the NASD Electronic Bulletin Board, the fair market value of the Common Stock as
determined in good faith by the Committee.

 
2.17
Incentive Stock Option means a stock option within the meaning of Section 422 of
the Code.

 
2.18
Merger means any merger, reorganization, consolidation, share exchange, transfer
of assets or other transaction having similar effect involving the Company.

 
2.19
Non-Employee Director means a member of the Board who (i) is not currently an
officer or otherwise employed by the Company or a parent or a subsidiary of the
Company, (ii) does not receive compensation directly or indirectly from the
Company or a parent or a subsidiary of the Company for services rendered as a
consultant or in any capacity other than as a director, except for an amount for
which disclosure would not be required pursuant to Item 404(a) of Regulation
S-K, (iii) does not possess an interest in any other transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation S-K, (iv) is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K, and (v) qualifies as “Outside
Director” pursuant to Section 162(m) of the Code.

 
 
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2.20
Non-Employee Director Option means a stock option granted to a Non-Employee
Director in accordance with Section 6.1(a).

 
2.21
Non-Qualified Stock Option means a stock option which is not an Incentive Stock
Option.

 
2.22
Options means all Non-Qualified Stock Options and Incentive Stock Options
granted at any time under the Plan.

 
2.23
Outstanding Common Stock means, at any time, the issued and outstanding shares
of Common Stock.

 
2.24
Participant means a person designated to receive an Award under the Plan in
accordance with Section 5.1.

 
2.25
Performance Awards means Awards granted in accordance with Article VIII.

 
2.26
Plan means the Critical Digital Data, Inc. 2007 Stock Incentive Plan as
described herein, as the same may be amended from time to time.

 
2.27
Purchase Price, with respect to Options, shall have the meaning set forth in
Section 6.1(b).

 
2.28
Restricted Shares means Common Stock subject to restrictions imposed in
connection with Awards granted under Article VII.

 
2.29
Retirement means early or normal retirement under a pension plan or arrangement
of the Company or one of its Subsidiaries in which the Participant participates.

 
2.30
Stock Appreciation Rights means Awards granted in accordance with Article VI.

 
2.31
Subsidiary means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.

 
2.32
Termination of Employment means the voluntary or involuntary termination of a
Participant’s employment with the Company or a Subsidiary for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant’s employer or any similar transaction in which the Participant’s
employer ceases to be the Company or one of its Subsidiaries.  Whether entering
military or other government service shall constitute Termination of Employment,
or whether a Termination of Employment shall occur as a result of disability,
shall be determined in each case by the Committee in its sole discretion.  In
the case of a consultant who is not an employee of the Company or a Subsidiary,
Termination of Employment shall mean voluntary or involuntary termination of the
consulting relationship for any reason.  In the case of a Non-Employee Director,
Termination of Employment shall mean voluntary or involuntary termination,
non-election, removal or other act which results in such Non-Employee Director
no longer serving in such capacity.

 
ARTICLE 3.
 
ADMINISTRATION
 
3.1
Committee.  The Plan shall be administered by a committee of the Board (the
“Committee”).  The Committee shall have exclusive and final authority in each
determination, interpretation or other action affecting the Plan and its
Participants.  The Committee shall have the sole discretionary authority to
interpret the Plan, to establish and modify administrative rules for the Plan,
to impose such conditions and restrictions on Awards as it determines
appropriate, and to take such steps in connection with the Plan and Awards
granted hereunder as it may deem necessary or advisable.  The Committee may,
subject to compliance with applicable legal requirements, with respect to
Participants who are not subject to Section 16(b) of the Exchange Act, delegate
such of its powers and authority under the Plan as it deems appropriate to
designated officers or employees of the Company.  In addition, the Board may
exercise any of the authority conferred upon the Committee hereunder.  In the
event of any such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer to the delegate
of the Committee or the Board, as the case may be.

 
 
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ARTICLE 4.
 
SHARES
 
4.1
Number of Shares Issuable.  The total number of shares initially authorized to
be issued under the Plan shall be one million (1,000,000) shares of Common Stock
and are subject to adjustment pursuant to the terms of Section 9.7.  The number
of shares available for issuance under the Plan shall be subject to adjustment
in accordance with Section 9.7.  The shares to be offered under the Plan shall
be authorized and unissued shares of Common Stock, or issued shares of Common
Stock which will have been reacquired by the Company.

 
4.2
Shares Subject to Terminated Awards.  Shares of Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, shares of Common Stock forfeited as provided in Section 7.2(a)
and shares of Common Stock subject to any Award that are otherwise surrendered
by a Participant may be subject to new Awards under the Plan.  Shares of Common
Stock subject to Options, or portions thereof, that have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not be available
for subsequent Awards under the Plan, but shares of Common Stock issued in
payment of such Stock Appreciation Rights shall not be charged against the
number of shares of Common Stock available for the grant of Awards hereunder.

 
ARTICLE 5.
 
PARTICIPATION
 
5.1
Eligible Participants.  Participants in the Plan shall be such key employees,
non-employee directors and consultants of the Company and its Subsidiaries,
whether or not members of the Board, as the Committee, in its sole discretion,
may designate from time to time.  The Committee’s designation of a Participant
in any year shall not require the Committee to designate such person to receive
Awards in any other year.  The designation of a Participant to receive an Award
under one portion of the Plan does not require the Committee to include such
Participant under other portions of the Plan.  The Committee shall consider such
factors as it deems pertinent in selecting Participants and in determining the
types and amounts of their respective Awards.

 
ARTICLE 6.
 
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
 
6.1
Option Awards.

 
 
(a)
Grant of Options.  The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participants to purchase shares of
Common Stock from the Company in such numbers, at such prices, and on such terms
and subject to such conditions, not inconsistent with the terms of the Plan, as
may be established by the Committee and are subject to adjustment pursuant to
the terms of Section 6.6.  The terms of any Option granted under the Plan shall
be set forth in an Award Agreement.  In addition, the Committee shall grant to
each director who is a Non-Employee Director on the Effective Date Non-Qualified
Stock Options entitling such Non-Employee Director to purchase 25,000 shares of
Common Stock from the Company.  The Committee shall grant to each person who is
elected, appointed or otherwise becomes a Non-Employee Director after the
Effective Date Non-Qualified Stock Options entitling such Non-Employee Director
to purchase 10,000 shares of Common Stock from the Company.  As of the first day
of the second annual term and each year thereafter that such Non-Employee
Director serves in the capacity as a Non-Employee Director, the Committee shall
grant such Non-Employee Director Non-Qualified Stock Options entitling such
Non-Employee Director to purchase 5,000 shares of Common Stock from the
Company.  The Non-Qualified Stock Options granted to the initial Non-Employee
Directors shall have an exercise price equal to the price shares of the Common
Stock are sold in the initial public offering of equity securities by the
Company on the Effective Date.  Non-Qualified Stock Options granted after the
Effective Date shall have an exercise price of not less than 100% of the Fair
Market Value on the Date of Grant.  Except as provided in Sections 6.3(c), or
6.5, Non-Employee Director Options shall not be exercisable prior to the first
anniversary of the Date of Grant, at which time they will be immediately
exercisable, in whole or in part, and shall remain exercisable until the tenth
anniversary of the Date of Grant.

 
 
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(b)
Purchase Price of Options.  The Purchase Price of each share of Common Stock
which may be purchased upon exercise of any Option granted under the Plan shall
be determined by the Committee.

 
 
(c)
Designation of Options.  Except as otherwise expressly provided in the Plan, the
Committee may designate, at the time of the grant of an Option, such Option as
an Incentive Stock Option or a Non-Qualified Stock Option; provided, however,
that an Option may be designated as an Incentive Stock Option only if the
applicable Participant is an employee of the Company or a Subsidiary on the Date
of Grant.

 
 
(d)
Incentive Stock Option Share Limitation.  No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) that would result in Incentive Stock Options to purchase
shares of Common Stock with an aggregate Fair Market Value (measured on the Date
of Grant) of more than $100,000 first becoming exercisable by such Participant
in any one calendar year.

 
 
(e)
Rights as a Stockholder.  A Participant or a transferee of an Option pursuant to
Section 9.4 shall have no rights as a stockholder with respect to the shares of
Common Stock covered by an Option until that Participant or transferee shall
have become the holder of record of any such shares, and no adjustment shall be
made with respect to any such shares of Common Stock for dividends in cash or
other property or distributions of other rights on the Common Stock for which
the record date is prior to the date on which that Participant or transferee
shall have become the holder of record of any shares covered by such Option;
provided, however, that Participants are entitled to share adjustments to
reflect capital changes under Section 9.7.

 
6.2
Stock Appreciation Rights.

 
 
(a)
Stock Appreciation Right Awards.  The Committee is authorized to grant to any
Participant one or more Stock Appreciation Rights.  Such Stock Appreciation
Rights may be granted either independent of or in tandem with Options granted to
the same Participant.  Stock Appreciation Rights granted in tandem with Options
may be granted simultaneously with, or, in the case of Non-Qualified Stock
Options, subsequent to, the grant to such Participant of the related Options;
provided, however, that:  (i) any Option covering any share of Common Stock
shall expire and not be exercisable upon the exercise of any Stock Appreciation
Right with respect to the same share, (ii) any Stock Appreciation Right covering
any share of Common Stock shall expire and not be exercisable upon the exercise
of any Option with respect to the same share, and (iii) an Option and a Stock
Appreciation Right covering the same share of Common Stock may not be exercised
simultaneously.  Upon exercise of a Stock Appreciation Right with respect to a
share of Common Stock, the Participant shall be entitled to receive an amount
equal to the excess, if any, of (A) the Fair Market Value of a share of Common
Stock on the date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be
payable as provided in Section 6.2(c).

 
 
(b)
Exercise Price.  The Exercise Price established for any Stock Appreciation Right
granted under this Plan shall be determined by the Committee, but in the case of
Stock Appreciation Rights granted in tandem with Options shall not be less than
the Purchase Price of the related Options.  Upon exercise of Stock Appreciation
Rights, the number of shares issuable upon exercise under any related Options
shall automatically be reduced by the number of shares of Common Stock
represented by such Options which are surrendered as a result of the exercise of
such Stock Appreciation Rights.

 
 
(c)
Payment of Incremental Value.  Any payment that may become due from the Company
by reason of a Participant’s exercise of a Stock Appreciation Right may be paid
to the Participant as determined by the Committee (i) all in cash, (ii) all in
Common Stock, or (iii) in any combination of cash and Common Stock.  In the
event that all or a portion of the payment is to be made in Common Stock, the
number of shares of Common Stock to be delivered in satisfaction of such payment
shall be determined by dividing the amount of such payment or portion thereof by
the Fair Market Value on the date of exercise.  No fractional share of Common
Stock shall be issued to make any payment in respect of Stock Appreciation
Rights; if any fractional share would otherwise be issuable, the combination of
cash and Common Stock payable to a Participant shall be adjusted as directed by
the Committee to avoid the issuance of any fractional share.

 
 
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6.3
Terms of Stock Options and Stock Appreciation Rights.

 
 
(a)
Conditions on Exercise.  An Award Agreement with respect to Options and/or Stock
Appreciation Rights may contain such waiting periods, exercise dates and
restrictions on exercise (including, but not limited to, periodic installments)
as may be determined by the Committee at the time of grant.

 
 
(b)
Duration of Options and Stock Appreciation Rights.  Options and Stock
Appreciation Rights shall terminate after the first to occur of the following
events:

 
 
(i)
Expiration of the Option or Stock Appreciation Right as provided in the related
Award Agreement; or

 
 
(ii)
Termination of the Award as provided in Section 6.3(e), following the applicable
Participant’s Termination of Employment; or

 
 
(iii)
In the case of an Incentive Stock Option, ten years from the Date of Grant; or

 
 
(iv)
Solely in the case of a Stock Appreciation Right granted in tandem with an
Option, upon the expiration of the related Option.

 
 
(c)
Acceleration of Exercise Time.  The Committee, in its sole discretion, shall
have the right (but shall not in any case be obligated), exercisable at any time
after the Date of Grant, to permit the exercise of any Option or Stock
Appreciation Right prior to the time such Option or Stock Appreciation Right
would otherwise become exercisable under the terms of the related Award
Agreement.

 
 
(d)
Extension of Exercise Time.  The Committee, in its sole discretion, shall have
the right (but shall not in any case be obligated), exercisable on or at any
time after the Date of Grant, to permit the exercise of any Option or Stock
Appreciation Right after its expiration date described in Section 6(b).

 
6.4           Termination
 
 
 (a)
Termination.  In the event of Termination of Employment of a Participant other
than by reason of death, disability or Retirement, the right of the Participant
to exercise any Option or Stock Appreciation Right shall terminate 90 days after
the date of such Termination of Employment, unless the exercise period is
extended by the Committee in accordance with Section 6.3(d).

 
 
(b)
Disability or Retirement.  In the event of a Participant’s Termination of
Employment by reason of disability or Retirement, the right of the Participant
to exercise any Option or Stock Appreciation Right which he or she was entitled
to exercise upon Termination of Employment (or which became exercisable at a
later date pursuant to Section 6.3(e)(ii)) shall terminate one year after the
date of such Termination of Employment, unless the exercise period is extended
by the Committee in accordance with Section 6.3(d).  In no event, however, may
any Option or Stock Appreciation Right be exercised later than the date of
expiration of the Option determined pursuant to Section 6.3(b)(i), (iii) or
(iv).

 
 
(c)
Death.  In the event of the death of a Participant while employed by the Company
or a Subsidiary or within any additional period of time from the date of the
Participant’s Termination of Employment and prior to the expiration of any
Option or Stock Appreciation Right as provided pursuant to Section 6.3(e)(i)(B)
or Section 6.3(d) above, to the extent the right to exercise the Option or Stock
Appreciation Right was accrued as of the date of such Termination of Employment
and had not expired during such additional period, the right of the
Participant’s Beneficiary to exercise the Option or Stock Appreciation Right
shall terminate one year after the date of the Participant’s death (but in no
event more than one year from the date of the Participant’s Termination of
Employment by reason of disability or Retirement), unless the exercise period is
extended by the Committee in accordance with Section 6.3(d).  In no event,
however, may any Option or Stock Appreciation Right be exercised later than the
date of expiration of the Option determined pursuant to Section 6.3(b)(i), (iii)
or (iv).

 
 
(d)
Termination of Unvested Options or Stock Appreciation Rights Upon Termination of
Employment.  Subject to Section 6.3(c), to the extent the right to exercise an
Option or a Stock Appreciation Right, or any portion thereof, has not accrued as
of the date of Termination of Employment, such right shall expire at the date of
such Termination of Employment.  Notwithstanding the foregoing, the Committee,
in its sole discretion and under such terms as it deems appropriate, may permit,
for a Participant who terminates employment by reason of Retirement and who will
continue to render significant services to the Company or one of its
Subsidiaries after his or her Termination of Employment, the continued vesting
of his or her Options and Stock Appreciation Rights during the period in which
that individual continues to render such services.

 
 
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6.5
Exercise Procedures.  Each Option and Stock Appreciation Right granted under the
Plan shall be exercised by written notice to the Company which must be received
by the officer or employee of the Company designated in the Award Agreement at
or before the close of business on the termination date of the Award.  The
Purchase Price of shares purchased upon exercise of an Option granted under the
Plan shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that the Committee may (but shall not be required
to) permit payment to be made by delivery to the Company of either (a) shares of
Common Stock (which may include Restricted Shares or shares otherwise issuable
in connection with the exercise of the Option, subject to such rules as the
Committee deems appropriate) or (b) any combination of cash and Common Stock or
(c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by a Participant, shares of
Common Stock may be issued directly to the Participant’s broker or dealer upon
receipt of an irrevocable written notice of exercise from the Participant).  In
the event that any shares of Common Stock shall be transferred to the Company to
satisfy all or any part of the Purchase Price, the part of the Purchase Price
deemed to have been satisfied by such transfer of shares of Common Stock shall
be equal to the product derived by multiplying the Fair Market Value as of the
date of exercise times the number of shares of Common Stock transferred to the
Company.  The Participant may not transfer to the Company in satisfaction of the
Purchase Price any fractional share of Common Stock.  Any part of the Purchase
Price paid in cash upon the exercise of any Option shall be added to the general
funds of the Company and may be used for any proper corporate purpose.  Unless
the Committee shall otherwise determine, any shares of Common Stock transferred
to the Company as payment of all or part of the Purchase Price upon the exercise
of any Option shall be held as treasury shares.

 
6.6 
        Adjustments upon Changes in Capitalization, dissolution, Merger or Sale
of Assets

 
 
(a)
Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding
Option, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
option, as well as the price per share of Common Stock covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.

 
 
(b)
Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify each Participant as soon
as practicable prior to the effective date of such proposed transaction. The
Committee in its discretion may provide for a Participant to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Options covered thereby, including Shares as to which the Option
would not otherwise be exercisable. In addition, the Committee may provide that
any Company repurchase option applicable to any Shares purchased upon exercise
of an Option shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.

 
 
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(c)
Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option shall be assumed or an equivalent option or
right substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Participant shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Committee shall notify the
Participant in writing or electronically that the Option shall be fully vested
and exercisable for a period of fifteen (15) days from the date of such notice,
and the Option shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the option or right confers the right to purchase
or receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Committee may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

 
6.7
Change in Control.  Unless otherwise provided by the Committee in the applicable
Award Agreement, in the event of a Change in Control, all Options and Stock
Appreciation Rights outstanding on the date of such Change in Control shall
become immediately and fully exercisable.  The provisions of this Section 6.7
shall not be applicable to any Options or Stock Appreciation Rights granted to a
Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common
Stock or Company Voting Securities.

 
ARTICLE 7.
 
RESTRICTED SHARES
 
7.1
Restricted Share Awards.  The Committee may grant to any Participant an Award of
such number of shares of Common Stock on such terms, conditions and
restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish.  With respect
to performance-based Awards of Restricted Shares intended to qualify for
deductibility under Section 162(m) of the Code, performance targets will include
specified levels of one or more of operating income, return or investment,
return on stockholders’ equity, earnings before interest, taxes, depreciation
and amortization and/or earnings per share.  The terms of any Restricted Share
Award granted under this Plan shall be set forth in an Award Agreement which
shall contain provisions determined by the Committee and not inconsistent with
this Plan.

 
 
(a)
Issuance of Restricted Shares.  As soon as practicable after the Date of Grant
of a Restricted Share Award by the Committee, the Company shall cause to be
transferred on the books of the Company or its agent, shares of Common Stock,
registered on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, subject to forfeiture to the Company as of the Date of
Grant if an Award Agreement with respect to the Restricted Shares covered by the
Award is not duly executed by the Participant and timely returned to the
Company.  All shares of Common Stock covered by Awards under this Article VII
shall be subject to the restrictions, terms and conditions contained in the Plan
and the applicable Award Agreements entered into by the appropriate
Participants.  Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares the share certificates representing such Restricted
Shares may be held in custody by the Company, its designee, or, if the
certificates bear a restrictive legend, by the Participant.  Upon the lapse or
release of all restrictions with respect to an Award as described in
Section 7.1(d), one or more share certificates, registered in the name of the
Participant, for an appropriate number of shares as provided in Section 7.1(d),
free of any restrictions set forth in the Plan and the related Award Agreement
(however subject to any restrictions that may be imposed by law) shall be
delivered to the Participant.

 
 
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(b)
Stockholder Rights.  Beginning on the Date of Grant of a Restricted Share Award
and subject to execution of the related Award Agreement as provided in
Section 7.1(a), and except as otherwise provided in such Award Agreement, the
Participant shall become a stockholder of the Company with respect to all shares
subject to the Award Agreement and shall have all of the rights of a
stockholder, including, but not limited to, the right to vote such shares and
the right to receive dividends; provided, however, that any shares of Common
Stock distributed as a dividend or otherwise with respect to any Restricted
Shares as to which the restrictions have not yet lapsed, shall be subject to the
same restrictions as such Restricted Shares and held or restricted as provided
in Section 7.1(a).

 
 
(c)
Restriction on Transferability.  None of the Restricted Shares may be assigned
or transferred (other than by will or the laws of descent and distribution or to
an inter vivos trust with respect to which the Participant is treated as the
owner under Sections 671 through 677 of the Code), pledged or sold prior to the
lapse of the restrictions applicable thereto.

 
 
(d)
Delivery of Shares Upon Vesting.  Upon expiration or earlier termination of the
forfeiture period without a forfeiture and the satisfaction of or release from
any other conditions prescribed by the Committee, or at such earlier time as
provided under the provisions of Section 7.3, the restrictions applicable to the
Restricted Shares shall lapse.  As promptly as administratively feasible
thereafter, subject to the requirements of Section 9.5, the Company shall
deliver to the Participant or, in case of the Participant’s death, to the
Participant’s Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.

 
7.2
Terms of Restricted Shares.

 
 
(a)
Forfeiture of Restricted Shares.  Subject to Sections 7.2(b) and 7.3, Restricted
Shares shall be forfeited and returned to the Company and all rights of the
Participant with respect to such Restricted Shares shall terminate unless the
Participant continues in the service of the Company or a Subsidiary as an
employee until the expiration of the forfeiture period for such Restricted
Shares and satisfies any and all other conditions set forth in the Award
Agreement.  The Committee shall determine the forfeiture period (which may, but
need not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Share Award.

 
 
(b)
Waiver of Forfeiture Period.  Notwithstanding anything contained in this
Article VII to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death, disability or Retirement
of the Participant or a material change in circumstances arising after the date
of an Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Shares) as the Committee shall deem
appropriate.

 
7.3
Change in Control.  Unless otherwise provided by the Committee in the applicable
Award Agreement, in the event of a Change in Control, all restrictions
applicable to the Restricted Share Award shall terminate fully and the
Participant shall immediately have the right to the delivery of share
certificates for such shares in accordance with Section 7.1(d).

 
ARTICLE 8.
 
PERFORMANCE AWARDS
 
8.1
Performance Awards.

 
 
(a)
Award Periods and Calculations of Potential Incentive Amounts.  The Committee
may grant Performance Awards to Participants.  A Performance Award shall consist
of the right to receive a payment (measured by the Fair Market Value of a
specified number of shares of Common Stock, increases in such Fair Market Value
during the Award Period and/or a fixed cash amount) contingent upon the extent
to which certain predetermined performance targets have been met during an Award
Period.  Performance Awards may be made in conjunction with, or in addition to,
Restricted Share Awards made under Article VII.  The Award Period shall be two
or more fiscal or calendar years as determined by the Committee.  The Committee,
in its discretion and under such terms as it deems appropriate, may permit newly
eligible employees, such as those who are promoted or newly hired, to receive
Performance Awards after an Award Period has commenced.

 
 
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(b)
Performance Targets.  The performance targets may include such goals related to
the performance of the Company and/or the performance of a Participant as may be
established by the Committee in its discretion.  In the case of Performance
Awards intended to qualify for deductibility under Section 162(m) of the Code,
the targets will include specified levels of one or more of operating income,
return on investment, return on stockholders’ equity, earnings before interest,
taxes, depreciation and amortization and/or earnings per share.  The performance
targets established by the Committee may vary for different Award Periods and
need not be the same for each Participant receiving a Performance Award in an
Award Period.  Except to the extent inconsistent with the performance-based
compensation exception under Section 162(m) of the Code, in the case of
Performance Awards granted to employees to whom such section is applicable, the
Committee, in its discretion, but only under extraordinary circumstances as
determined by the Committee, may change any prior determination of performance
targets for any Award Period at any time prior to the final determination of the
value of a related Performance Award when events or transactions occur to cause
such performance targets to be an inappropriate measure of achievement.

 
 
(c)
Earning Performance Awards.  The Committee, on or as soon as practicable after
the Date of Grant, shall prescribe a formula to determine the percentage of the
applicable Performance Award to be earned based upon the degree of attainment of
performance targets.

 
 
(d)
Payment of Earned Performance Awards.  Payments of earned Performance Awards
shall be made in cash or shares of Common Stock or a combination of cash and
shares of Common Stock, in the discretion of the Committee.  The Committee, in
its sole discretion, may provide such terms and conditions with respect to the
payment of earned Performance Awards as it may deem desirable.

 
8.2
Terms of Performance Awards.

 
 
(a)
Termination of Employment.  Unless otherwise provided below or in Section 8.3,
in the case of a Participant’s Termination of Employment prior to the end of an
Award Period, the Participant will not have earned any Performance Awards for
that Award Period.

 
 
(b)
Retirement.  If a Participant’s Termination of Employment is because of
Retirement prior to the end of an Award Period, the Participant will not be paid
any Performance Award, unless the Committee, in its sole and exclusive
discretion, determines that an Award should be paid.  In such a case, the
Participant shall be entitled to receive a pro-rata portion of his or her Award
as determined under subsection (d) of this Section 8.2.

 
 
(c)
Death or Disability.  If a Participant’s Termination of Employment is due to
death or to disability (as determined in the sole and exclusive discretion of
the Committee) prior to the end of an Award Period, the Participant or the
Participant’s personal representative shall be entitled to receive a pro-rata
share of his or her Award as determined under subsection (d) of this Section
8.2.

 
 
(d)
Pro-Rata Payment.  The amount of any payment to be made to a Participant whose
employment is terminated by Retirement, death or disability (under the
circumstances described in subsections (b) and (c)) will be the amount
determined by multiplying (i) the amount of the Performance Award that would
have been earned through the end of the Award Period had such employment not
been terminated by (ii) a fraction, the numerator of which is the number of
whole months such Participant was employed during the Award Period, and the
denominator of which is the total number of months of the Award Period.  Any
such payment made to a Participant whose employment is terminated prior to the
end of an Award Period shall be made at the end of such Award Period, unless
otherwise determined by the Committee in its sole discretion.  Any partial
payment previously made or credited to a deferred account for the benefit of a
Participant in accordance with Section 8.1(d) of the Plan shall be subtracted
from the amount otherwise determined as payable as provided in this Section
8.2(d).

 
 
(e)
Other Events.  Notwithstanding anything to the contrary in this Article VIII,
the Committee may, in its sole and exclusive discretion, determine to pay all or
any portion of a Performance Award to a Participant who has terminated
employment prior to the end of an Award Period under certain circumstances
(including the death, disability or Retirement of the Participant or a material
change in circumstances arising after the Date of Grant), subject to such terms
and conditions as the Committee shall deem appropriate.

 
 
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8.3
Change in Control.  Unless otherwise provided by the Committee in the applicable
Award Agreement, in the event of a Change in Control, all Performance Awards for
all Award Periods shall immediately become fully payable to all Participants and
shall be paid to Participants within thirty (30) days after such Change in
Control.

 
ARTICLE 9.
 
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
 
9.1
Plan Provisions Control Award Terms.  The terms of the Plan shall govern all
Awards granted under the Plan, and in no event shall the Committee have the
power to grant any Award under the Plan the terms of which are contrary to any
of the provisions of the Plan.  In the event any provision of any Award granted
under the Plan shall conflict with any term in the Plan as constituted on the
Date of Grant of such Award, the term in the Plan as constituted on the Date of
Grant of such Award shall control.  Except as provided in Section 9.3 and
Section 9.7, the terms of any Award granted under the Plan may not be changed
after the Date of Grant of such Award so as to materially decrease the value of
the Award without the express written approval of the holder.

 
9.2
Award Agreement.  No person shall have any rights under any Award granted under
the Plan unless and until the Company and the Participant to whom such Award
shall have been granted shall have executed and delivered an Award Agreement or
the Participant shall have received and acknowledged notice of the Award
authorized by the Committee expressly granting the Award to such person and
containing provisions setting forth the terms of the Award.

 
9.3
Modification of Award After Grant.  No Award granted under the Plan to a
Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and
(b) shall be approved by the Committee.

 
9.4
Limitation on Transfer.  Except as provided in Section 7.1(c) in the case of
Restricted Shares, a Participant’s rights and interest under the Plan may not be
assigned or transferred other than by will or the laws of descent and
distribution and, during the lifetime of a Participant, only the Participant
personally (or the Participant’s personal representative) may exercise rights
under the Plan.  The Participant’s Beneficiary may exercise the Participant’s
rights to the extent they are exercisable under the Plan following the death of
the Participant.  Notwithstanding the foregoing, the Committee may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.

 
9.5
Taxes.  The Company shall be entitled, if the Committee deems it necessary or
desirable, to withhold (or secure payment from the Participant in lieu of
withholding) the amount of any withholding or other tax required by law to be
withheld or paid by the Company with respect to any amount payable and/or shares
issuable under such Participant’s Award or with respect to any income recognized
upon a disqualifying disposition of shares received pursuant to the exercise of
an Incentive Stock Option, and the Company may defer payment of cash or issuance
of shares upon exercise or vesting of an Award unless indemnified to its
satisfaction against any liability for any such tax.  The amount of such
withholding or tax payment shall be determined by the Committee and shall be
payable by the Participant at such time as the Committee determines in
accordance with the following rules:

 
 
(a)
The Participant shall have the right to elect to meet his or her withholding
requirement (i) by having withheld from such Award at the appropriate time that
number of shares of Common Stock, rounded up to the next whole share, the Fair
Market Value of which is equal to the amount of withholding taxes due, (ii) by
direct payment to the Company in cash of the amount of any taxes required to be
withheld with respect to such Award or (iii) by a combination of withholding
such shares and paying cash.

 
 
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(b)
The Committee shall have the discretion as to any Award to cause the Company to
pay to tax authorities for the benefit of the applicable Participant, or to
reimburse such Participant for, the individual taxes which are due on the grant,
exercise or vesting of any Award or the lapse of any restriction on any Award
(whether by reason of such Participant’s filing of an election under
Section 83(b) of the Code or otherwise), including, but not limited to, Federal
income tax, state income tax, local income tax and excise tax under Section 4999
of the Code, as well as for any such taxes as may be imposed upon such tax
payment or reimbursement.

 
 
(c)
In the case of Participants who are subject to Section 16 of the Exchange Act,
the Committee may impose such limitations and restrictions as it deems necessary
or appropriate with respect to the delivery or withholding of shares of Common
Stock to meet tax withholding obligations.

 
9.6
Surrender of Awards.  Any Award granted under the Plan may be surrendered to the
Company for cancellation on such terms as the Committee and the Participant
approve.

 
9.7
Adjustments to Reflect Capital Changes.

 
 
(a)
Recapitalization.  The number and kind of shares subject to outstanding Awards,
the Purchase Price or Exercise Price for such shares, the number and kind of
shares available for Awards subsequently granted under the Plan and the maximum
number of shares in respect of which Awards can be made to any Participant in
any calendar year shall be appropriately adjusted to reflect any stock dividend,
stock split, combination or exchange of shares, merger, consolidation or other
change in capitalization with a similar substantive effect upon the Plan or the
Awards granted under the Plan.  The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each case.

 
 
(b)
Merger.  After any Merger in which the Company is the surviving corporation,
each Participant shall, at no additional cost, be entitled upon any exercise of
an Option or receipt of any other Award to receive (subject to any required
action by stockholders), in lieu of the number of shares of Common Stock
receivable or exercisable pursuant to such Award prior to such Merger, the
number and class of shares or other securities to which such Participant would
have been entitled pursuant to the terms of the Merger if, at the time of the
Merger, such Participant had been the holder of record of a number of shares of
Common Stock equal to the number of shares of Common Stock receivable or
exercisable pursuant to such Award.  Comparable rights shall accrue to each
Participant in the event of successive Mergers of the character described
above.  In the event of a Merger in which the Company is not the surviving
corporation, the surviving, continuing, successor or purchasing corporation, as
the case may be (the “Acquiring Corporation”), will either assume the Company’s
rights and obligations under outstanding Award Agreements or substitute awards
in respect of the Acquiring Corporation’s stock for outstanding Awards,
provided, however, that if the Acquiring Corporation does not assume or
substitute for such outstanding Awards, the Board shall provide prior to the
Merger that any unexercisable and/or unvested portion of the outstanding Awards
shall be immediately exercisable and vested as of a date prior to such merger or
consolidation, as the Board so determines.  The exercise and/or vesting of any
Award that was permissible solely by reason of this Section 9.7(b) shall be
conditioned upon the consummation of the Merger.  Any Options which are neither
assumed by the Acquiring Corporation not exercised as of the date of the Merger
shall terminate effective as of the effective date of the Merger.

 
 
(c)
Options to Purchase Shares or Stock of Acquired Companies.  After any merger in
which the Company or a Subsidiary shall be a surviving corporation, the
Committee may grant substituted options under the provisions of the Plan,
pursuant to Section 424 of the Code, replacing old options granted under a plan
of another party to the merger whose shares of stock subject to the old options
may no longer be issued following the merger.  The manner of application of the
foregoing provisions to such options and any appropriate adjustments shall be
determined by the Committee in its sole discretion.  Any such adjustments may
provide for the elimination of any fractional shares which might otherwise
become subject to any Options.

 
9.8
No Right to Employment.  No employee or other person shall have any claim of
right to be granted an Award under the Plan.  Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.

 
9.9
Awards Not Includable for Benefit Purposes.  Payments received by a Participant
pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.

 
 
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9.10
Governing Law.  All determinations made and actions taken pursuant to the Plan
shall be governed by the laws of the State of Nevada, other than the conflict of
law provisions thereof, and construed in accordance therewith.

 
9.11
No Strict Construction.  No rule of strict construction shall be implied against
the Company, the Committee or any other person in the interpretation of any of
the terms of the Plan, any Award granted under the Plan or any rule or procedure
established by the Committee.

 
9.12
Captions.  The captions (i.e., all Section headings) used in the Plan are for
convenience only, do not constitute a part of the Plan, and shall not be deemed
to limit, characterize or affect in any way any provisions of the Plan, and all
provisions of the Plan shall be construed as if no captions had been used in the
Plan.

 
9.13
Severability.  Whenever possible, each provision in the Plan and every Award at
any time granted under the Plan shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of the Plan or
any Award at any time granted under the Plan shall be held to be prohibited by
or invalid under applicable law, then (a) such provision shall be deemed amended
to accomplish the objectives of the provision as originally written to the
fullest extent permitted by law and (b) all other provisions of the Plan, such
Award and every other Award at any time granted under the Plan shall remain in
full force and effect.

 
9.14
Amendment and Termination.

 
 
(a)
Amendment.  The Board shall have complete power and authority to amend the Plan
at any time without the authorization or approval of the Company’s stockholders,
unless the amendment (i) materially increases the benefits accruing to
Participants under the Plan, (ii) materially increases the aggregate number of
securities that may be issued under the Plan or (iii) materially modifies the
requirements as to eligibility for participation in the Plan, but in each case
only to the extent then required by the Code or applicable law, or deemed
necessary or advisable by the Board.  No termination or amendment of the Plan
may, without the consent of the Participant to whom any Award shall theretofore
have been granted under the Plan, materially adversely affect the right of such
individual under such Award.

 
 
(b)
Termination.  The Board shall have the right and the power to terminate the Plan
at any time.  No Award shall be granted under the Plan after the termination of
the Plan, but the termination of the Plan shall not have any other effect and
any Award outstanding at the time of the termination of the Plan may be
exercised after termination of the Plan at any time prior to the expiration date
of such Award to the same extent such Award would have been exercisable had the
Plan not been terminated.

 
 
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