EXHIBIT 10.1

 

XPONENTIAL, INC.

2005 STOCK PURCHASE PLAN

 

1.                                      PURPOSE.  THE PURPOSE OF THIS PLAN IS TO
PROVIDE AN OPPORTUNITY FOR EMPLOYEES AND DIRECTORS OF XPONENTIAL, INC. AND ITS
DESIGNATED SUBSIDIARIES TO PURCHASE COMMON STOCK OF THE CORPORATION AND THEREBY
TO HAVE AN ADDITIONAL INCENTIVE TO CONTRIBUTE TO THE PROSPERITY OF THE
CORPORATION.

 

2.                                      DEFINITIONS.

 

(A)                                  “BOARD” SHALL MEAN THE BOARD OF DIRECTORS
OF THE CORPORATION.

 

(B)                                  “CODE” SHALL MEAN THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED.  ANY REFERENCE TO A SECTION OF THE CODE HEREIN SHALL BE A
REFERENCE TO ANY SUCCESSOR OR AMENDED SECTION OF THE CODE.

 

(C)                                  “COMMITTEE” SHALL MEAN THE COMMITTEE
APPOINTED BY THE BOARD IN ACCORDANCE WITH SECTION 14.

 

(D)                                  “COMMON STOCK” SHALL MEAN THE COMMON STOCK,
$0.01 PAR VALUE, OF THE CORPORATION, OR ANY STOCK INTO WHICH SUCH COMMON STOCK
MAY BE CONVERTED.

 

(E)                                  “COMPENSATION” SHALL MEAN WITH RESPECT TO
AN EMPLOYEE, SUCH EMPLOYEE’S GROSS CASH COMPENSATION (INCLUDING WAGE, SALARY,
BONUS, COMMISSION AND OVERTIME EARNINGS) PAID BY THE CORPORATION TO AN EMPLOYEE
IN ACCORDANCE WITH THE TERMS OF EMPLOYMENT, BUT EXCLUDING ALL BONUS PAYMENTS,
EXPENSE ALLOWANCES, AND COMPENSATION PAID IN A FORM OTHER THAN CASH, AND WITH
RESPECT TO A DIRECTOR, SUCH DIRECTOR’S FEES FOR SERVING AS A DIRECTOR OF THE
CORPORATION PAID IN THE FORM OF CASH.  THE COMMITTEE SHALL HAVE THE AUTHORITY TO
DETERMINE AND APPROVE ALL FORMS OF PAY TO BE INCLUDED IN THE DEFINITION OF
COMPENSATION AND MAY CHANGE THE DEFINITION ON A PROSPECTIVE BASIS.

 

(F)                                    “CORPORATION” SHALL MEAN XPONENTIAL,
INC., A DELAWARE CORPORATION.

 

(G)                                 “DESIGNATED SUBSIDIARY” SHALL MEAN A
SUBSIDIARY THAT HAS BEEN DESIGNATED BY THE COMMITTEE AS ELIGIBLE TO PARTICIPATE
IN THE PLAN WITH RESPECT TO ITS EMPLOYEES.

 

(H)                                 “DIRECTOR” SHALL MEAN AN INDIVIDUAL WHO
SERVES AS A MEMBER OF THE BOARD WHO IS NOT CLASSIFIED AS AN EMPLOYEE.

 

(I)                                    “EMPLOYEE” SHALL MEAN AN INDIVIDUAL
CLASSIFIED AS AN EMPLOYEE (WITHIN THE MEANING OF CODE SECTION 3401(C) AND THE
REGULATIONS THEREUNDER) BY THE CORPORATION OR A DESIGNATED SUBSIDIARY ON THE
CORPORATION’S OR SUCH DESIGNATED SUBSIDIARY’S PAYROLL RECORDS DURING THE
RELEVANT PARTICIPATION PERIOD.  EMPLOYEES SHALL NOT INCLUDE INDIVIDUALS WHOSE
CUSTOMARY EMPLOYMENT IS FOR NOT MORE THAN FIVE (5) MONTHS IN ANY CALENDAR YEAR
(EXCEPT THOSE EMPLOYEES IN SUCH CATEGORY THE EXCLUSION OF

 

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WHOM IS NOT PERMITTED UNDER APPLICABLE LAW) OR INDIVIDUALS CLASSIFIED AS
INDEPENDENT CONTRACTORS.

 

(J)                                    “ENTRY DATE” SHALL MEAN THE FIRST TRADING
DAY OF THE OFFERING PERIOD.

 

(K)                                “FAIR MARKET VALUE” SHALL MEAN (I) THE
CLOSING SALES PRICE FOR A SHARE OF COMMON STOCK ON THE DATE OF DETERMINATION IF
THAT DATE IS A TRADING DAY AS REPORTED ON THE PRINCIPAL SECURITIES EXCHANGE ON
WHICH SHARES ARE THEN LISTED OR ADMITTED TO TRADING, OR (II) IF NOT SO REPORTED,
THE AVERAGE OF THE CLOSING BID AND ASKED PRICES FOR A SHARE OF COMMON STOCK ON
THE DATE OF DETERMINATION IF THAT DATE IS A TRADING DAY AS QUOTED ON THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS AUTOMATED QUOTATION SYSTEM
(“NASDAQ”), OR (III) IF NOT QUOTED ON NASDAQ, THE AVERAGE OF THE CLOSING BID AND
ASKED PRICES FOR A SHARE OF COMMON STOCK ON THE DATE OF DETERMINATION IF THAT
DATE IS A TRADING DAY AS QUOTED BY THE NATIONAL QUOTATION BUREAU’S “PINK SHEETS”
OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS’ OTC BULLETIN BOARD SYSTEM. 
IF THE DATE OF DETERMINATION IS NOT A TRADING DAY, THEN THE DATE OF
DETERMINATION SHALL BE THE LAST TRADING DAY PRIOR TO SUCH DATE OF
DETERMINATION.  IF THE CORPORATION IS NOT A PUBLICLY-HELD CORPORATION AT THE
TIME A DETERMINATION OF THE FAIR MARKET VALUE OF THE COMMON STOCK IS REQUIRED TO
BE MADE, THE DETERMINATION OF FAIR MARKET VALUE SHALL BE MADE BY THE COMMITTEE
IN ITS DISCRETION EXERCISED IN GOOD FAITH.  IN THIS RESPECT, THE COMMITTEE MAY
RELY ON SUCH FINANCIAL DATA, VALUATIONS, EXPERTS, AND OTHER SOURCES, IN ITS
DISCRETION, AS IT DEEMS ADVISABLE UNDER THE CIRCUMSTANCES.

 

(L)                                    “OFFERING PERIOD” SHALL MEAN THE PERIOD
OF THREE (3) MONTHS DURING WHICH AN OPTION GRANTED PURSUANT TO THE PLAN MAY BE
EXERCISED, COMMENCING ON THE FIRST TRADING DAY ON OR AFTER JULY 1, OCTOBER 1,
JANUARY 1, AND APRIL 1 OF EACH YEAR.  THE DURATION AND TIMING OF OFFERING
PERIODS MAY BE CHANGED OR MODIFIED BY THE COMMITTEE.

 

(M)                              “PARTICIPANT” SHALL MEAN A PARTICIPANT IN THE
PLAN AS DESCRIBED IN SECTION 5.

 

(N)                                 “PLAN” SHALL MEAN THIS STOCK PURCHASE PLAN.

 

(O)                                  “PURCHASE DATE” SHALL MEAN THE LAST TRADING
DAY OF EACH OFFERING PERIOD.

 

(P)                                  “PURCHASE PRICE” SHALL MEAN EIGHTY-FIVE
PERCENT (85%) OF THE FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON THE ENTRY
DATE OR ON THE PURCHASE DATE, WHICHEVER IS LOWER; PROVIDED HOWEVER, THAT THE
PURCHASE PRICE MAY BE ADJUSTED BY THE COMMITTEE PURSUANT TO SECTION 7.4.

 

(Q)                                  “STOCKHOLDER” SHALL MEAN A RECORD HOLDER
ENTITLED TO VOTE SHARES OF COMMON STOCK UNDER THE CORPORATION’S BY-LAWS.

 

(R)                                  “SUBSIDIARY” SHALL MEAN ANY CORPORATION
(OTHER THAN THE CORPORATION) IN AN UNBROKEN CHAIN OF CORPORATIONS BEGINNING WITH
THE CORPORATION, AS DESCRIBED IN CODE SECTION 424(F).

 

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(S)                                  “TRADING DAY” SHALL MEAN A DAY ON WHICH
U.S. NATIONAL STOCK EXCHANGES AND THE NASDAQ SYSTEM ARE OPEN FOR TRADING.

 

3.                                      ELIGIBILITY.  ANY EMPLOYEE, WHO SHALL
HAVE COMPLETED TWELVE (12) CONSECUTIVE MONTHS OF EMPLOYMENT WITH, AND WHO SHALL
BE REGULARLY EMPLOYED ON A FULL-TIME (32 HOURS OR MORE PER WEEK ON A REGULAR
SCHEDULE) BASIS BY, THE CORPORATION OR BY ANY DESIGNATED SUBSIDIARY ON AN ENTRY
DATE, SHALL BE ELIGIBLE TO PARTICIPATE IN THE PLAN WITH RESPECT TO THE OFFERING
PERIOD COMMENCING ON SUCH ENTRY DATE, PROVIDED THAT THE COMMITTEE MAY ESTABLISH
ADMINISTRATIVE RULES REQUIRING THAT THE MINIMUM EMPLOYMENT REQUIREMENTS (TWELVE
(12) CONSECUTIVE MONTHS OF EMPLOYMENT) BE COMPLETED BY SOME MINIMUM PERIOD PRIOR
TO AN ENTRY DATE FOR AN EMPLOYEE TO BE ELIGIBLE TO PARTICIPATE WITH RESPECT TO
THE OFFERING PERIOD BEGINNING ON THAT ENTRY DATE.  IN THE ABSENCE OF A
DETERMINATION BY THE COMMITTEE, THE MINIMUM EMPLOYMENT REQUIREMENTS MUST BE
COMPLETED BY AT LEAST ONE PAY PERIOD PRIOR TO AN ENTRY DATE.  ALL EMPLOYEES WHO
PARTICIPATE IN THE PLAN SHALL HAVE THE SAME RIGHTS AND PRIVILEGES UNDER THE
PLAN.  THE BOARD MAY IMPOSE RESTRICTIONS ON ELIGIBILITY AND PARTICIPATION OF
EMPLOYEES WHO ARE OFFICERS AND DIRECTORS TO FACILITATE COMPLIANCE WITH FEDERAL
OR STATE SECURITIES LAWS.  A DIRECTOR WHO HAS BEEN DULY ELECTED BY THE
STOCKHOLDERS OR THE BOARD TO SERVE IN SUCH CAPACITY ON AN ENTRY DATE SHALL BE
ELIGIBLE TO PARTICIPATE IN THE PLAN WITH RESPECT TO THE OFFERING PERIOD
COMMENCING ON SUCH ENTRY DATE.

 

4.                                      OFFERING PERIODS.  THE PLAN SHALL BE
IMPLEMENTED BY CONSECUTIVE OFFERING PERIODS WITH A NEW OFFERING PERIOD
COMMENCING ON THE FIRST TRADING DAY ON OR AFTER JULY 1, OCTOBER 1, JANUARY 1,
AND APRIL 1 OF EACH YEAR, OR ON SUCH OTHER DATE AS THE COMMITTEE SHALL
DETERMINE, AND CONTINUING THEREAFTER FOR THREE (3) MONTHS OR UNTIL TERMINATED
PURSUANT TO SECTION 13; PROVIDED, HOWEVER, THE FIRST OFFERING PERIOD SHALL
COMMENCE ON MAY 1, 2005, AND TERMINATE ON SEPTEMBER 30, 2005.  THE COMMITTEE
SHALL HAVE THE AUTHORITY TO CHANGE THE DURATION OF OFFERING PERIODS (INCLUDING
THE COMMENCEMENT DATES THEREOF) WITH RESPECT TO FUTURE OFFERINGS WITHOUT
STOCKHOLDER APPROVAL IF SUCH CHANGE IS ANNOUNCED AT LEAST FIVE (5) DAYS PRIOR TO
THE SCHEDULED BEGINNING OF THE FIRST OFFERING PERIOD TO BE AFFECTED THEREAFTER.

 

5.                                      PARTICIPATION.

 

5.1                               An Employee or a Director who is eligible to
participate in the Plan in accordance with Section 3 may become a Participant by
completing and submitting, on a date prescribed by the Committee prior to an
applicable Entry Date, a completed payroll deduction authorization and Plan
enrollment form provided by the Corporation.  An eligible Employee or Director
may authorize payroll deductions or other deductions from Compensation at the
rate of any whole percentage of the Employee’s or Director’s Compensation, up to
one hundred percent (100%) of the Employee’s or Director’s Compensation,
including with respect to Employees, base salary, commissions, bonuses, and
overtime, and with respect to Directors, director’s fees.  All deductions may be
held by the Corporation and commingled with its other corporate funds where
administratively appropriate.  No interest shall be paid or credited to the
Participant with respect to such payroll deductions.  The Corporation shall
maintain a separate bookkeeping account for each Participant under the Plan and
the amount of each

 

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Participant’s payroll deductions shall be credited to such account.  A
Participant may not make any additional payments into such account.

 

5.2                               Under procedures established by the Committee,
a Participant may withdraw from the Plan during an Offering Period, by
completing and filing a new deduction authorization and Plan enrollment form
with the Corporation, prior to the fifth business day preceding the Purchase
Date.  If a Participant withdraws from the Plan during an Offering Period, his
or her accumulated deductions will be refunded to the Participant without
interest.  The Committee may establish rules limiting the frequency with which
Participants may withdraw and re-enroll in the Plan and may impose a waiting
period on Participants wishing to re-enroll following withdrawal.

 

5.3                               Under procedures established by the Committee,
a Participant may change his or her rate of contribution through payroll or
other deductions at any time by filing a new deduction authorization and Plan
enrollment form with the Corporation.  The new rate of contribution will be
effective as of the first pay period in the immediately succeeding Offering
Period.  If a Participant has not followed such procedures to change the rate of
contribution, the rate of contribution shall continue at the originally elected
rate throughout future Offering Periods.

 

6.                                      TERMINATION OF EMPLOYMENT.

 

6.1.                            IN THE EVENT AN EMPLOYEE’S EMPLOYMENT WITH THE
CORPORATION OR ANY OF ITS DESIGNATED SUBSIDIARIES IS TERMINATED FOR ANY REASON
(INCLUDING DEATH) PRIOR TO THE EXPIRATION OF AN OFFERING PERIOD, THE EMPLOYEE’S
PARTICIPATION IN THE PLAN SHALL TERMINATE AND ALL AMOUNTS CREDITED TO THE
EMPLOYEE’S ACCOUNT SHALL BE PAID TO THE EMPLOYEE OR, IN THE CASE OF DEATH, TO
THE EMPLOYEE’S HEIRS OR ESTATE, WITHOUT INTEREST.  WHETHER A TERMINATION OF
EMPLOYMENT HAS OCCURRED SHALL BE DETERMINED BY THE COMMITTEE.

 

6.2                               AN EMPLOYEE ON LEAVE OF ABSENCE SHALL BE
DEEMED TO REMAIN AN EMPLOYEE FOR THE FIRST NINETY (90) DAYS OF SUCH LEAVE OF
ABSENCE AND SUCH EMPLOYEE’S EMPLOYMENT SHALL BE DEEMED TO HAVE TERMINATED AT THE
CLOSE OF BUSINESS ON THE NINETIETH DAY OF SUCH LEAVE OF ABSENCE UNLESS SUCH
EMPLOYEE SHALL HAVE RETURNED TO ELIGIBLE EMPLOYMENT WITH THE CORPORATION OR A
DESIGNATED SUBSIDIARY PRIOR TO THE CLOSE OF BUSINESS ON SUCH NINETIETH DAY. 
TERMINATION BY THE CORPORATION OF ANY EMPLOYEE’S LEAVE OF ABSENCE, OTHER THAN
TERMINATION OF SUCH LEAVE OF ABSENCE ON RETURN TO FULL-TIME OR PART-TIME
EMPLOYMENT, SHALL TERMINATE AN EMPLOYEE’S EMPLOYMENT FOR ALL PURPOSES OF THE
PLAN AND SHALL TERMINATE SUCH EMPLOYEE’S PARTICIPATION IN THE PLAN AND RIGHT TO
EXERCISE ANY OPTION.

 

6.3                               THE COMMITTEE MAY ALSO ESTABLISH RULES
REGARDING WHEN CHANGES OF EMPLOYMENT STATUS WILL BE CONSIDERED TO BE A
TERMINATION OF EMPLOYMENT, INCLUDING RULES REGARDING TRANSFER OF EMPLOYMENT
AMONG DESIGNATED SUBSIDIARIES AND THE CORPORATION, AND THE COMMITTEE MAY
ESTABLISH TERMINATION-OF-EMPLOYMENT PROCEDURES FOR THE PLAN THAT ARE INDEPENDENT
OF SIMILAR RULES ESTABLISHED UNDER OTHER BENEFIT PLANS OF THE CORPORATION.

 

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6.4                               IN THE EVENT A DIRECTOR’S DIRECTORSHIP WITH
THE CORPORATION OR ANY OF ITS DESIGNATED SUBSIDIARIES IS TERMINATED FOR ANY
REASON (INCLUDING DEATH) PRIOR TO THE EXPIRATION OF AN OFFERING PERIOD, THE
DIRECTOR’S PARTICIPATION IN THE PLAN SHALL TERMINATE AND ALL AMOUNTS CREDITED TO
THE DIRECTOR’S ACCOUNT SHALL BE PAID TO THE DIRECTOR OR, IN THE CASE OF DEATH,
TO THE DIRECTOR’S HEIRS OR ESTATE, WITHOUT INTEREST.

 

7.                                      OFFERING.

 

7.1                               Subject to adjustment as set forth in Section
10, the maximum number of shares of Common Stock that may be issued pursuant to
the Plan shall be two hundred fifty thousand (250,000) shares.  If, on a given
Purchase Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Corporation shall make a pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

 

7.2                               Each Offering Period shall be determined by
the Committee.  Unless otherwise determined by the Committee, the Plan will
operate with successive three (3) month Offering Periods commencing at the
beginning of each fiscal quarter (July 1, October 1, January 1 and April 1). 
The Committee shall have the power to change the duration of future Offering
Periods, without Stockholder approval, and without regard to the expectations of
any Participants.

 

7.3                               Each eligible Employee or Director who has
elected to participate as provided in Section 5.1 shall be granted an option to
purchase that number of whole shares of Common Stock with the payroll and other
deductions accumulated on behalf of such Employee or Director during each
Offering Period at the purchase price specified in Section 7.4.  An option will
expire upon the earlier to occur of (i) the termination of a Participant’s
participation in the Plan or (ii) the termination of an Offering Period.

 

7.4                               The purchase price under each option shall be
the lower of: (i) a percentage (not less than eighty-five percent (85%))
established by the Committee (“Designated Percentage”) of the Fair Market Value
of the Common Stock on the Entry Date on which an option is granted or (ii) the
Designated Percentage of the Fair Market Value on the Purchase Date on which the
Common Stock is purchased.  The Committee may change the Designated Percentage
with respect to any future Offering Period, but not below eighty-five percent
(85%), and the Committee may determine with respect to any prospective Offering
Period that the option price shall be the Designated Percentage of the Fair
Market Value of the Common Stock on the Purchase Date.  The initial Designated
Percentage until changed by the Committee is eighty-five percent (85%).

 

8.                                      PURCHASE OF STOCK.  UPON THE EXPIRATION
OF EACH OFFERING PERIOD, A PARTICIPANT’S OPTION SHALL BE EXERCISED AUTOMATICALLY
FOR THE PURCHASE OF THAT NUMBER OF WHOLE SHARES OF COMMON STOCK WHICH THE
ACCUMULATED PAYROLL OR OTHER DEDUCTIONS FROM COMPENSATION CREDITED TO THE
PARTICIPANT’S ACCOUNT AT THAT TIME SHALL PURCHASE AT THE APPLICABLE PRICE
SPECIFIED IN SECTION 7.4.  FRACTIONAL SHARES OF COMMON STOCK WILL NOT BE

 

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ISSUED UNDER THE PLAN.  ANY ACCUMULATED PAYROLL OR OTHER DEDUCTIONS FROM
COMPENSATION, WHICH WOULD HAVE BEEN USED TO PURCHASE FRACTIONAL SHARES, UNLESS
REFUNDED PURSUANT TO SECTIONS 5.2 OR 6, WILL BE HELD FOR THE PURCHASE OF COMMON
STOCK IN THE NEXT OFFERING PERIOD, WITHOUT INTEREST.  NOTWITHSTANDING THE
FOREGOING, THE CORPORATION OR ITS DESIGNEE MAY MAKE SUCH PROVISIONS AND TAKE
SUCH ACTION AS IT DEEMS NECESSARY OR APPROPRIATE FOR THE WITHHOLDING OF TAXES
AND/OR SOCIAL INSURANCE WHICH THE CORPORATION OR ITS DESIGNATED SUBSIDIARY IS
REQUIRED BY LAW OR REGULATION OF ANY GOVERNMENTAL AUTHORITY TO WITHHOLD.  EACH
PARTICIPANT, HOWEVER, SHALL BE RESPONSIBLE FOR PAYMENT OF ALL INDIVIDUAL TAX
LIABILITIES ARISING UNDER THE PLAN.

 

9.                                      PAYMENT AND DELIVERY.  AS SOON AS
PRACTICABLE AFTER THE EXERCISE OF AN OPTION, THE CORPORATION SHALL DELIVER TO
THE PARTICIPANT A RECORD OF THE COMMON STOCK PURCHASED AND THE BALANCE OF ANY
AMOUNT OF PAYROLL OR OTHER DEDUCTIONS FROM COMPENSATION CREDITED TO THE
PARTICIPANT’S ACCOUNT NOT USED FOR THE PURCHASE, EXCEPT AS SPECIFIED BELOW.  THE
COMMITTEE MAY PERMIT OR REQUIRE THAT SHARES BE DEPOSITED DIRECTLY WITH A BROKER
DESIGNATED BY THE COMMITTEE OR TO A DESIGNATED AGENT OF THE CORPORATION, AND THE
COMMITTEE MAY UTILIZE ELECTRONIC OR AUTOMATED METHODS OF SHARE TRANSFER.  THE
COMMITTEE MAY REQUIRE THAT SHARES BE RETAINED WITH SUCH BROKER OR AGENT FOR A
DESIGNATED PERIOD OF TIME AND/OR MAY ESTABLISH OTHER PROCEDURES TO PERMIT
TRACKING OF DISQUALIFYING DISPOSITIONS OF SUCH SHARES.  THE CORPORATION SHALL
RETAIN THE AMOUNT OF PAYROLL OR OTHER DEDUCTIONS FROM COMPENSATION USED TO
PURCHASE COMMON STOCK AS FULL PAYMENT FOR THE COMMON STOCK AND THE COMMON STOCK
SHALL THEN BE FULLY PAID AND NON-ASSESSABLE.  NO PARTICIPANT SHALL HAVE ANY
VOTING, DIVIDEND, OR OTHER STOCKHOLDER RIGHTS WITH RESPECT TO SHARES SUBJECT TO
ANY OPTION GRANTED UNDER THE PLAN UNTIL THE SHARES SUBJECT TO THE OPTION HAVE
BEEN PURCHASED AND DELIVERED TO THE PARTICIPANT AS PROVIDED IN THIS SECTION 9.

 

10.                               RECAPITALIZATION.  IF AFTER THE GRANT OF AN
OPTION, BUT PRIOR TO THE PURCHASE OF COMMON STOCK UNDER THE OPTION, THERE IS ANY
INCREASE OR DECREASE IN THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK BECAUSE
OF A STOCK SPLIT, STOCK DIVIDEND, COMBINATION OR RECAPITALIZATION OF SHARES
SUBJECT TO OPTIONS, THE NUMBER OF SHARES TO BE PURCHASED PURSUANT TO AN OPTION,
THE PRICE PER SHARE OF COMMON STOCK COVERED BY AN OPTION AND THE MAXIMUM NUMBER
OF SHARES SPECIFIED IN SECTION 7.1 MAY BE APPROPRIATELY ADJUSTED BY THE BOARD,
AND THE BOARD SHALL TAKE ANY FURTHER ACTIONS WHICH, IN THE EXERCISE OF ITS
DISCRETION, MAY BE NECESSARY OR APPROPRIATE UNDER THE CIRCUMSTANCES.  THE
BOARD’S DETERMINATIONS UNDER THIS SECTION 10 SHALL BE CONCLUSIVE AND BINDING ON
ALL PARTIES.

 

11.                               MERGER, LIQUIDATION, OTHER CORPORATION
TRANSACTIONS.  IN THE EVENT OF THE PROPOSED LIQUIDATION OR DISSOLUTION OF THE
CORPORATION, THE OFFERING PERIOD WILL TERMINATE IMMEDIATELY PRIOR TO THE
CONSUMMATION OF SUCH PROPOSED TRANSACTION, UNLESS OTHERWISE PROVIDED BY THE
BOARD IN ITS SOLE DISCRETION, AND ALL OUTSTANDING OPTIONS SHALL AUTOMATICALLY
TERMINATE AND THE AMOUNTS OF ALL PAYROLL DEDUCTIONS WILL BE REFUNDED WITHOUT
INTEREST TO THE PARTICIPANTS.  IN THE EVENT OF A PROPOSED SALE OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE CORPORATION, OR THE MERGER OR
CONSOLIDATION OF THE CORPORATION WITH OR INTO ANOTHER CORPORATION, THEN IN THE
SOLE DISCRETION OF THE BOARD, (I) EACH OPTION SHALL BE ASSUMED OR AN EQUIVALENT
OPTION SHALL BE SUBSTITUTED BY THE SUCCESSOR CORPORATION OR PARENT OR SUBSIDIARY
OF SUCH SUCCESSOR CORPORATION, (II) A DATE

 

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ESTABLISHED BY THE BOARD ON OR BEFORE THE DATE OF CONSUMMATION OF SUCH MERGER,
CONSOLIDATION OR SALE SHALL BE TREATED AS A PURCHASE DATE, AND ALL OUTSTANDING
OPTIONS SHALL BE EXERCISED ON SUCH DATE, OR (III) ALL OUTSTANDING OPTIONS SHALL
TERMINATE AND THE ACCUMULATED PAYROLL DEDUCTIONS WILL BE REFUNDED WITHOUT
INTEREST TO THE PARTICIPANTS.

 

12.                               TRANSFERABILITY.  OPTIONS GRANTED TO
PARTICIPANTS MAY NOT BE VOLUNTARILY OR INVOLUNTARILY ASSIGNED, TRANSFERRED,
PLEDGED, OR OTHERWISE DISPOSED OF IN ANY WAY, AND ANY ATTEMPTED ASSIGNMENT,
TRANSFER, PLEDGE, OR OTHER DISPOSITION SHALL BE NULL AND VOID AND WITHOUT
EFFECT.  IF A PARTICIPANT IN ANY MANNER ATTEMPTS TO TRANSFER, ASSIGN OR
OTHERWISE ENCUMBER HIS OR HER RIGHTS OR INTERESTS UNDER THE PLAN, OTHER THAN AS
PERMITTED BY THE CODE, SUCH ACT SHALL BE TREATED AS AN ELECTION BY THE
PARTICIPANT TO DISCONTINUE PARTICIPATION IN THE PLAN PURSUANT TO SECTION 5.2.

 

13.                               AMENDMENT OR TERMINATION OF THE PLAN.

 

13.1                        The Plan shall continue until June 30, 2015, unless
otherwise terminated in accordance with Section 13.2.

 

13.2                        The Board may, in its sole discretion, insofar as
permitted by law, terminate or suspend the Plan, or revise or amend it in any
respect whatsoever, except that, without approval of the Stockholders, no such
revision or amendment shall increase the number of shares subject to the Plan,
other than an adjustment under Section 10.

 

14.                               ADMINISTRATION.  THE BOARD SHALL APPOINT A
COMMITTEE CONSISTING OF AT LEAST TWO (2) MEMBERS WHO WILL SERVE FOR SUCH PERIOD
OF TIME AS THE BOARD MAY SPECIFY AND WHOM THE BOARD MAY REMOVE AT ANY TIME.  THE
COMMITTEE WILL HAVE THE AUTHORITY AND RESPONSIBILITY FOR THE DAY-TO-DAY
ADMINISTRATION OF THE PLAN, THE AUTHORITY AND RESPONSIBILITY SPECIFICALLY
PROVIDED IN THIS PLAN AND ANY ADDITIONAL DUTY, RESPONSIBILITY AND AUTHORITY
DELEGATED TO THE COMMITTEE BY THE BOARD, WHICH MAY INCLUDE ANY OF THE FUNCTIONS
ASSIGNED TO THE BOARD IN THIS PLAN.  THE COMMITTEE MAY DELEGATE TO ONE OR MORE
INDIVIDUALS THE DAY-TO-DAY ADMINISTRATION OF THE PLAN.  THE COMMITTEE SHALL HAVE
FULL POWER AND AUTHORITY TO PROMULGATE ANY RULES AND REGULATIONS WHICH IT DEEMS
NECESSARY FOR THE PROPER ADMINISTRATION OF THE PLAN, TO INTERPRET THE PROVISIONS
AND SUPERVISE THE ADMINISTRATION OF THE PLAN, TO MAKE FACTUAL DETERMINATIONS
RELEVANT TO PLAN ENTITLEMENTS AND TO TAKE ALL ACTION IN CONNECTION WITH
ADMINISTRATION OF THE PLAN AS IT DEEMS NECESSARY OR ADVISABLE, CONSISTENT WITH
THE DELEGATION FROM THE BOARD.  DECISIONS OF THE BOARD AND THE COMMITTEE SHALL
BE FINAL AND BINDING UPON ALL PARTICIPANTS.  ANY DECISION REDUCED TO WRITING AND
SIGNED BY A MAJORITY OF THE MEMBERS OF THE COMMITTEE SHALL BE FULLY EFFECTIVE AS
IF IT HAD BEEN MADE AT A MEETING OF THE COMMITTEE DULY HELD.  THE CORPORATION
SHALL PAY ALL EXPENSES INCURRED IN THE ADMINISTRATION OF THE PLAN.  NO BOARD OR
COMMITTEE MEMBER SHALL BE LIABLE FOR ANY ACTION OR DETERMINATION MADE IN GOOD
FAITH WITH RESPECT TO THE PLAN OR ANY OPTION GRANTED HEREUNDER.

 

15.                               SECURITIES LAWS REQUIREMENTS.  THE CORPORATION
SHALL NOT BE UNDER ANY OBLIGATION TO ISSUE COMMON STOCK UPON THE EXERCISE OF ANY
OPTION UNLESS AND UNTIL THE CORPORATION HAS DETERMINED THAT: (I) IT AND THE
PARTICIPANT HAVE TAKEN ALL ACTIONS

 

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REQUIRED TO REGISTER THE COMMON STOCK UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR TO PERFECT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF;
(II) ANY APPLICABLE LISTING REQUIREMENT OF ANY STOCK EXCHANGE ON WHICH THE
COMMON STOCK IS LISTED HAS BEEN SATISFIED; AND (III) ALL OTHER APPLICABLE
PROVISIONS OF STATE, FEDERAL AND APPLICABLE FOREIGN LAW HAVE BEEN SATISFIED.  IF
THE COMMITTEE DETERMINES THAT IT IS IN THE BEST INTEREST OF THE CORPORATION TO
TAKE NO ACTION UNDER THE FOREGOING, IT MAY CANCEL THE OUTSTANDING OPTIONS OF THE
EMPLOYEE IN QUESTION AND REFUND THE ACCUMULATED PAYROLL DEDUCTIONS.

 

16.                               GOVERNMENTAL REGULATIONS.  THIS PLAN AND THE
CORPORATION’S OBLIGATION TO SELL AND DELIVER SHARES OF ITS COMMON STOCK UNDER
THE PLAN SHALL BE SUBJECT TO THE APPROVAL OF ANY GOVERNMENTAL AUTHORITY REQUIRED
IN CONNECTION WITH THE PLAN OR THE AUTHORIZATION, ISSUANCE, SALE, OR DELIVERY OF
STOCK HEREUNDER.

 

17.                               NO ENLARGEMENT OF EMPLOYEE OR DIRECTOR
RIGHTS.  NOTHING CONTAINED IN THIS PLAN SHALL BE DEEMED TO GIVE ANY EMPLOYEE THE
RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION OR ANY DESIGNATED
SUBSIDIARY OR TO INTERFERE WITH THE RIGHT OF THE CORPORATION OR DESIGNATED
SUBSIDIARY TO DISCHARGE ANY EMPLOYEE AT ANY TIME.  NOTHING CONTAINED IN THIS
PLAN SHALL BE DEEMED TO GIVE ANY DIRECTOR THE RIGHT TO BE RETAINED AS A DIRECTOR
OF THE CORPORATION OR ANY DESIGNATED SUBSIDIARY OR TO INTERFERE WITH THE RIGHT
OF THE BOARD OR THE STOCKHOLDERS TO TERMINATE SUCH DIRECTOR AT ANY TIME.

 

18.                               GOVERNING LAW.  THIS PLAN SHALL BE GOVERNED BY
DELAWARE LAW, WITHOUT REGARD TO THAT STATE’S CHOICE OF LAW RULES.

 

19.                               EFFECTIVE DATE.  THIS PLAN SHALL BE EFFECTIVE
MAY 1, 2005, SUBJECT TO APPROVAL OF THE STOCKHOLDERS OF THE CORPORATION WITHIN
TWELVE (12) MONTHS AFTER ITS ADOPTION BY THE BOARD.

 

20.                               REPORTS.  INDIVIDUAL ACCOUNTS SHALL BE
MAINTAINED FOR EACH PARTICIPANT IN THE PLAN.  STATEMENTS OF ACCOUNT SHALL BE
GIVEN TO PARTICIPANTS AT LEAST ANNUALLY, WHICH STATEMENTS SHALL SET FORTH THE
AMOUNTS OF PAYROLL AND OTHER DEDUCTIONS FROM COMPENSATION, THE PURCHASE PRICE,
THE NUMBER OF SHARES PURCHASED AND THE REMAINING CASH BALANCE, IF ANY.

 

21.                               DESIGNATION OF BENEFICIARY FOR OWNED SHARES. 
WITH RESPECT TO SHARES OF COMMON STOCK PURCHASED BY A PARTICIPANT PURSUANT TO
THE PLAN AND HELD IN AN ACCOUNT MAINTAINED BY THE CORPORATION OR ITS ASSIGNEE ON
THE PARTICIPANT’S BEHALF, THE PARTICIPANT MAY BE PERMITTED TO FILE A WRITTEN
DESIGNATION OF BENEFICIARY.  A PARTICIPANT MAY CHANGE SUCH DESIGNATION OF
BENEFICIARY AT ANY TIME BY WRITTEN NOTICE.  SUBJECT TO LOCAL LEGAL REQUIREMENTS,
IN THE EVENT OF A PARTICIPANT’S DEATH, THE CORPORATION OR ITS ASSIGNEE SHALL
DELIVER SUCH SHARES OF COMMON STOCK TO THE DESIGNATED BENEFICIARY.  SUBJECT TO
LOCAL LAW, IN THE EVENT OF THE DEATH OF A PARTICIPANT AND IN THE ABSENCE OF A
BENEFICIARY VALIDLY DESIGNATED WHO IS LIVING AT THE TIME OF SUCH PARTICIPANT’S
DEATH, THE CORPORATION SHALL DELIVER SUCH SHARES OF COMMON STOCK TO THE EXECUTOR
OR ADMINISTRATOR OF THE PARTICIPANT’S ESTATE. IF NO EXECUTOR OR ADMINISTRATOR
HAS BEEN APPOINTED (TO THE KNOWLEDGE OF THE CORPORATION) WITHIN ONE (1) YEAR
AFTER THE PARTICIPANT’S DATE OF DEATH, THE CORPORATION MAY DELIVER (OR CAUSE ITS
ASSIGNEE TO

 

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DELIVER) SUCH SHARES OF COMMON STOCK TO THE FIRST OF THE FOLLOWING PERSON OR
PERSONS WHO ARE THEN LIVING:  THE PARTICIPANT’S SPOUSE, CHILDREN (INCLUDING
THOSE BY ADOPTION), PARENTS, OR SIBLINGS.  DELIVERY OF THE SHARES OF COMMON
STOCK PURSUANT TO THE FOREGOING SHALL RELEASE THE CORPORATION FROM ALL LIABILITY
WITH RESPECT TO SUCH SHARES AND THE LEGAL OWNERSHIP OF SAME.  THE CORPORATION
MAY RELY ON AN AFFIDAVIT OF HEIRSHIP SIGNED AND SWORN TO BY TWO (2) PERSONS WHO
ARE NOT IN THE PARTICIPANT’S IMMEDIATE FAMILY FOR PURPOSES OF DETERMINING THE
PARTICIPANT’S FAMILY MEMBERS.

 

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