Exhibit 10.5

AMENDED AND RESTATED

API TECHNOLOGIES CORP.

2006 EQUITY INCENTIVE PLAN

1. PURPOSE.

The purpose of the API Technologies Corp. 2006 Equity Incentive Plan (the
“Plan”) is to advance the interests of API Technologies Corp., f/n/a as API
Nanotronics Corp. and Rubincon Ventures Inc. (the “Company”) and its
stockholders by providing Directors, Consultants and those key employees of the
Company and its Subsidiaries and Affiliates, upon whose judgment, initiative and
efforts the successful conduct of the business of the Company and its
Subsidiaries and Affiliates largely depends, with additional incentive to
perform in a superior manner. A purpose of the Plan also is to attract and
retain personnel of sufficient experience and ability to the service of the
Company and its Subsidiaries and Affiliates, and to reward such individuals for
achievement of corporate and individual performance goals.

2. DEFINITIONS.

(a) “Affiliate” means an affiliate as that term is defined in Rule 12b-2 of the
General Rules and Regulations of the Exchange Act.

(b) “Award” means a Stock Grant, a Restricted Stock Unit grant, or a grant of
Non-statutory Stock Options or Incentive Stock Options pursuant to the
provisions of this Plan.

(c) “Board of Directors” or “Board” means the board of directors of the Company.

(d) “Code” means the Internal Revenue Code of 1986, as amended.

(e) “Change in Control” of the Company shall have occurred when (i) any
“person”, as the term is used in Section 3 of the Exchange Act (other than a
Company employee benefit plan) is or becomes the “beneficial owner” as defined
in Rule 16a-1 under the Exchange Act, directly or indirectly, of securities of
the Company representing 50% or more of the Company’s outstanding securities
ordinarily having the right to vote in the election of directors;
(ii) individuals who constitute the Board (the “Incumbent Board”) immediately
following the closing of the Company’s transaction with API Electronics Group
Corp. (“API”), cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board shall be for purposes of this clause
(ii) considered as though he or she were a member of the Incumbent Board;
(iii) consummation of a plan of reorganization, merger, or consolidation, in
which the stockholders of the Company own less than 50% of the outstanding
voting securities of the surviving entity; or (iv) a sale of substantially all
of the Company’s assets, a liquidation or dissolution of the Company or a
similar transaction. Notwithstanding the foregoing, the consummation of the
transactions contemplated by the Combination Agreement between the Company and
API shall not constitute a Change in Control.

--------------------------------------------------------------------------------

(f) “Committee” means the Compensation Committee of the Board, consisting of two
or more Directors appointed by the Board pursuant to Section 3 hereof who are
“non-employee directors,” as defined in Rule 16b-3 promulgated by the SEC under
the Exchange Act and “outside directors” as defined in Treas. Reg. 1.162-27
promulgated under the Code, and if there is no Compensation Committee fitting
such requirements, the Committee shall be the Board of Directors of the Company.

(g) “Common Stock” means the Common Stock of the Company, $.001 par value per
share.

(h) “Consultant” means an individual, corporation, partnership, limited
liability company or other entity providing services to the Company in an
independent contractor capacity.

(i) “Date of Grant” means the date an Award is effective pursuant to the terms
hereof.

(j) “Director” means a Director of the Company or a Subsidiary or Affiliate of
the Company who is not also an Employee.

(k) “Disability” means disability as defined in Code Section 409A.

(l) “Employee” means any person who is employed by the Company or a Subsidiary
or Affiliate of the Company on a full-time or part-time basis.

(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n) “Fair Market Value” shall mean, as of any date, (i) the closing price of the
Common Stock on the principal national stock exchange on which the shares are
listed on such date or, if shares were not traded on such date, then on the next
preceding trading day during which a sale occurred; or (ii) if such stock is not
listed on an exchange but is quoted on NASDAQ or a successor quotation system,
(1) the last sales price (if the stock is then listed as a National Market Issue
under the NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on such
date as reported by NASDAQ or such successor quotation system; or (iii) if such
stock is not listed on an exchange and not quoted on NASDAQ or a successor
quotation system, the mean between the closing bid and asked prices for the
stock on such date as quoted on the OTC Bulletin Board or such other market as
the Board deems appropriate to use; or (iv) if the Common Stock is not publicly
traded, the fair market value established by the Committee acting in good faith
applying a consistent methodology for all Awards.

(o) “Incentive Stock Option” means an Option granted by the Committee to a
Participant, which Option is designated as an Incentive Stock Option pursuant to
Section 9 of this Plan.

 

-2-

--------------------------------------------------------------------------------

(p) “Investor Relations Activities” means any activities, by or on behalf of the
Company that promotes or reasonably could be expected to promote the purchase or
sale of securities of the Company, but does not include:

(a) the dissemination of information provided, or records prepared, in the
ordinary course of business of the Company;

(i) to promote the sale of products or services of the Company, or;

(ii) to raise public awareness of the Company, that cannot reasonably, be
considered to promote the purchase or sale of securities of the Company;

(b) activities or communications necessary to comply with the requirements of,

(i) any applicable Securities Laws;

(ii) any requirements of any national or foreign securities exchange or the
by-laws, rules or other regulatory instruments of any other self regulatory body
or exchange having jurisdiction over the Company;

(c) communications by a publisher of, or writer for, a newspaper, magazine or
business or financial publication, that is of general and regular paid
circulation, distributed only to subscribers to it for value or to purchasers of
it, if,

(i) the communication is only through the newspaper, magazine or publication,
and

(ii) the publisher or writer receives no commission or other consideration other
than for acting in the capacity of publisher or writer; or

(d) activities or communications that may be otherwise specified by any national
or foreign securities exchange.

(q) “Non-statutory Stock Option” means an Option granted to a Participant and
which is not an Incentive Stock Option.

(r) “Option” means an Award granted under Section 8 or Section 9 of this Plan.

(s) “Participant” means an Employee of the Company or a Subsidiary or Affiliate
chosen by the Committee to participate in the Plan, a Director of the Company or
a Subsidiary or Affiliate of the Company chosen by the Committee to participate
in the Plan or a Consultant to the Company or a Subsidiary or Affiliate of the
Company chosen by the Committee to participate in the Plan.

(t) “Regulatory Authorities” means all national and foreign securities
exchanges, facilities on which the Company’s securities are listed or quoted,
all federal, state and foreign securities commissions or similar securities
regulatory bodies having jurisdiction over the Company and all self-regulatory
organizations that have jurisdiction over the Company.

 

-3-

--------------------------------------------------------------------------------

(u) “Restricted Stock Unit” means a restricted stock unit granted under
Section 7 of this Plan.

(v) “SEC” means the U.S. Securities and Exchange Commission.

(w) “Securities Laws” means securities legislation, securities laws, securities
regulations and securities rules, as amended, and the securities related
policies, notices, instruments and orders in force from time to time that govern
or are applicable to the Company.

(x) “Stock Grant” means a grant of shares of Common Stock accompanied by such
restrictions as may be determined by the Committee under Section 7 of this Plan.

(y) “Subsidiary” means a corporation, domestic or foreign, of which not less
than 50% of the voting shares are held by the Company or a subsidiary, whether
or not such corporation now exists or is hereafter organized or acquired by the
Company or a Subsidiary.

(z) “Termination for Misconduct” means the termination of a Participant for
gross negligence, commission of a felony or material violation of any
established Company policies.

3. ADMINISTRATION.

3.1 General. The Plan shall be administered by the Committee. The members of the
Committee shall be appointed by the Board. The Committee shall act by vote of a
majority of its members or unanimous written consent. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable with respect to Participants. Subject to the
limitations of the Plan and the ultimate authority of the Board, the Committee
shall have the sole and complete authority to: (i) select Participants,
(ii) grant Awards to Participants in such forms and amounts as it shall
determine, (iii) impose such limitations, restrictions and conditions upon such
Awards as it shall deem appropriate, (iv) interpret the Plan and adopt, amend
and rescind administrative guidelines and other rules and regulations relating
to the Plan, (v) correct any defect or omission or reconcile any inconsistency
in the Plan or in any Award granted hereunder and (vi) make all other
determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. All determinations and
interpretations made by the Committee shall be binding and conclusive on such
Participants and on their legal representatives and beneficiaries. In
determining the number of shares of Common Stock with respect to which an Award
shall cover, fractional shares will be rounded up to the nearest whole number if
the fraction is 0.5 or higher, and down if it less.

3.2 Limitation on Liability. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or any Awards granted
under it. If a member of the Committee is a party or is threatened to be made a
party to any threatened, pending or contemplated action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him or her in such capacity under or with respect to the
Plan, the Company shall indemnify such member against expenses (including
attorneys’ fees), judgments, fines and amounts paid in

 

-4-

--------------------------------------------------------------------------------

settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he or she acted in good faith and in a manner
reasonably believed to be in the best interests of the Company, and its
Subsidiaries and Affiliates and, with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful.

4. TYPES OF AWARDS.

Awards under the Plan may be granted in any one or a combination of:

(a) Stock Grants;

(b) Restricted Stock Units;

(c) Non-statutory Stock Options; and

(d) Incentive Stock Options;

as defined in paragraphs 7, 8 and 9 of the Plan.

The Committee shall, in its discretion, determine from time to time which
Participants will be granted Awards under the Plan, the number of shares of
Common Stock subject to each Award, whether each Option will be an Incentive
Stock Option or a Non-statutory Stock Option (except that Incentive Stock
Options may not be awarded to Consultants or Directors), the exercise price of
an Option and the restrictions, if any, which will be applicable to each
Restricted Stock Unit and Stock Grant. In making all such determinations, the
Committee shall take into account the duties, responsibilities and performance
of each respective Participant, his or her present and potential contributions
to the growth and success of the Company, his or her compensation and such other
factors as the Committee shall deem relevant to accomplishing the purposes of
the Plan.

No Participant shall have any voting or dividend rights or other rights of a
stockholder in respect of any shares of Common Stock covered by an Option or
Restricted Stock Unit prior to the time the shares have been issued to the
Participant.

5. STOCK SUBJECT TO THE PLAN.

Subject to adjustment as provided in Section 15, the maximum number of shares
reserved for Restricted Stock Units and Stock Grants and for purchase pursuant
to the exercise of Options granted under the Plan is eight million five hundred
thousand (8,500,000) shares of Common Stock. The maximum aggregate number of
shares that may be issued under the Plan through Incentive Stock Options is
eight million five hundred thousand (8,500,000).

The shares of Common Stock to be subject to the Plan may be either authorized
but unissued shares or shares previously issued and reacquired by the
Company. To the extent that the Plan provides for the issuance of stock
certificates with respect to Common Stock, the Company may, in lieu thereof,
record the shares on a book entry account maintained by the Company’s transfer
agent. To the extent that Options are granted and Restricted Stock Units and
Stock Grants are made under the Plan, the shares underlying such Options,
Restricted Stock Units and Stock Grants will be unavailable for future grants
under the Plan except that, to the extent that the Options, Restricted Stock
Units and Stock Grants granted under the Plan terminate, expire, are canceled or
are forfeited without having been exercised, new Awards may be made with respect
to such shares.

 

-5-

--------------------------------------------------------------------------------

6. ELIGIBILITY.

Officers and other Employees (including Employees who also are Directors of the
Company or its Subsidiaries or Affiliates) shall be eligible to receive
Restricted Stock Units, Stock Grants, Incentive Stock Options and Non-statutory
Stock Options under the Plan. Directors and Consultants shall be eligible to
receive Restricted Stock Units, Stock Grants and Non-statutory Stock Options
under the Plan.

7. STOCK GRANTS AND RESTRICTED STOCK UNITS.

7.1 General Terms. Each Stock Grant and Restricted Stock Unit may be accompanied
by such restrictions, or may be made without any restrictions, as may be
determined in the discretion of the Committee. Such restrictions may include,
without limitation, requirements that the Participant remain in the continuous
employment of the Company or its Subsidiaries or Affiliates for a specified
period of time, or that the Participant meet designated individual performance
goals, or that the Company and/or one or more of its Subsidiaries or Affiliates
meet designated performance goals.

7.2 Stock Grant Issuance Procedures. A stock certificate representing the number
of shares of Common Stock covered by a Stock Grant shall be registered in the
Participant’s name and may be held by the Participant; provided however, if a
Stock Grant is subject to certain restrictions, the shares of Common Stock
covered by such Stock Grant shall be registered in the Participant’s name and
held in custody by the Company. Unless the Committee determines otherwise, a
Participant who has been awarded a Stock Grant shall have the rights and
privileges of a stockholder of the Company as to the shares of Common Stock
covered by a Stock Grant, including the right to receive dividends and the right
to vote such shares. None of the shares of Common Stock covered by the Stock
Grant may be sold, transferred, assigned, pledged or otherwise encumbered or
disposed of prior to the expiration or satisfaction of any applicable
restrictions or performance requirements. All of the shares of Common Stock
covered by a Stock Grant shall be forfeited and all rights of a Participant who
has been awarded such Stock Grant to such shares shall terminate without further
obligation on the part of the Company in the event that any applicable
restrictions or performance requirements do not expire or are not
satisfied. Upon forfeiture of shares of Common Stock, such shares shall be
transferred to the Company without further action by the Participant. Upon the
expiration or satisfaction of any applicable restrictions, whether in the
ordinary course or under circumstances set forth in Section 7.4, certificates
evidencing shares of Common Stock subject to the related Stock Grant shall be
delivered to the Participant, or the Participant’s beneficiary or estate, as the
case may be, free of all such restrictions.

7.3 Restricted Stock Unit Issuance Procedures. Each Award of Restricted Stock
Units will be evidenced by an award agreement that will specify the vesting
conditions, the number of shares of Common Stock to be issued in settlement of
the Award, and such other terms and conditions as the Committee, in its sole
discretion, will determine. At the time of grant of any Restricted Stock Unit,
the Committee will specify the settlement date applicable to each grant of
Restricted Stock Units which will be no earlier than the vesting date or dates
of the Award and may

 

-6-

--------------------------------------------------------------------------------

be determined at the election of the Participant. On the settlement date, the
Company will transfer to the Participant either (a) one share of Common Stock or
(ii) cash equal to the value of one such share of Common Stock for each
Restricted Stock Unit scheduled to be paid out on such date and which was not
previously forfeited. Participants holding Restricted Stock Units will not have
any right to exercise voting rights with respect to the shares of Common Stock
underlying such Restricted Stock Unit. Prior to the issuance of any share of
Common Stock in settlement of the Restricted Stock Unit, Participants holding
Restricted Stock Units will not be entitled to dividends with respect to such
shares of Common Stock unless otherwise provided in the applicable award
agreement. On the date set forth in the applicable award agreement, the
Restricted Stock Units for which any restrictions or vesting conditions have not
lapsed, and for which shares of Common Stock have not been issued in settlement
of the Award, will revert to the Company and again will become available for
grant under the Plan.

7.4 Accelerated Vesting.

(a) Termination of Service. If a Participant terminates service prior to vesting
in any Stock Grant or Restricted Stock Unit, all outstanding unvested Stock
Grants and Restricted Stock Units shall be forfeited by such Participant;
provided, however, that vesting may be accelerated in the sole discretion of the
Committee.

(b) Change in Control. The vesting of all or part of an outstanding Stock Grant
or Restricted Stock Unit may be accelerated, in the sole discretion of the
Board, in the event there is a Change in Control of the Company.

8. NON-STATUTORY STOCK OPTIONS.

8.1 Grant of Non-statutory Stock Options.

(a) Grants to Employees, Consultants and Directors. The Committee may, from time
to time, grant Non-statutory Stock Options to Participants.

(b) Terms of Non-Statutory Options. Non-statutory Stock Options granted under
this Plan are subject to the following terms and conditions:

(i) Price. The purchase price per share of Common Stock deliverable upon the
exercise of each Non-statutory Stock Option shall be determined on the date the
option is granted. Such purchase price shall be the Fair Market Value of the
Company’s Common Stock on the Date of Grant or such greater amount as determined
by the Committee; provided, however, that the purchase price of a Non-statutory
Stock Option granted under this Plan may be less than the Fair Market Value of
the Common Stock on the date of Grant if the Grant: (i) involves the
substitution of a Non-statutory Stock Option under this Plan for an outstanding
option under another plan pursuant to a corporate transaction; (ii) the
requirements of Treas. Reg. 1.424-1 would be met if the Non-statutory Stock
Option was an Incentive Stock Option and (iii) the ratio of the exercise price
from the fair market value of the shares subject to the new Non-statutory Stock
Option immediately after the substitution is not greater than the ratio of the
exercise price to the fair market value of the shares subject to the old
Non-statutory Stock Option immediately before the

 

-7-

--------------------------------------------------------------------------------

substitution. Shares may be purchased only upon full payment of the purchase
price, provided, however, that, if authorized by the Committee, a Participant
may exercise an Option through a cashless exercise as permitted by Federal
Reserve Board Regulation T and the Company shall make reasonable efforts to
facilitate such exercise.

(ii) Terms of Options. The term during which each Non-statutory Stock Option may
be exercised shall be ten years from the Date of Grant, or such shorter period
determined by the Committee. The Committee shall determine the date on which
each Non-statutory Stock Option shall become vested and may provide that a
Non-statutory Stock Option shall become vested in installments. The shares
comprising each installment may be purchased in whole or in part at any time
after such installment becomes vested. The Committee may, in its sole
discretion, accelerate the time at which any Non-statutory Stock Option becomes
vested in whole or in part.

(iii) Termination of Service. Upon the termination of a Participant’s service as
an Employee, Director or a Consultant for any reason other than death or
Disability, Termination for Misconduct, or by order of any Regulatory Authority,
the Participant’s Non-statutory Stock Options shall be exercisable only as to
those shares which were vested at the date of termination and only for a period
of 90 days following termination unless otherwise determined by the Committee in
its sole discretion.

Notwithstanding the foregoing, if the Participant is engaged to provide Investor
Relations Activities, and such Participant ceases to be so engaged for any
reason other than death or Disability, Termination for Misconduct or by order of
any Regulatory Authority, such Participant’s vested Non-Statutory Stock Options
shall be exercisable for a period of 30 days following termination unless the
Committee in its sole discretion determines otherwise.

In the event of termination for death or Disability, the Participant’s
Non-statutory Stock Options shall be exercisable only as to those shares which
were vested at the date of termination and only for a period of twelve months
following termination unless otherwise determined by the Committee in its sole
discretion.

In the event of Termination for Misconduct or by order of a Regulatory
Authority, all rights under the Participant’s Non-statutory Stock Options shall
expire upon termination of employment.

The vesting of all or a part of a Grant of Non-statutory Stock Options may be
accelerated, in the sole discretion of the Board, in the event there is a Change
in Control of the Company.

(iv) Options for API Employees, Consultants and Directors. Notwithstanding
anything to the contrary in this Plan, Non-statutory options may be issued under
this Plan to employees, former employees, consultants, former consultants,
directors and former directors of API (and its affiliates) on the terms and
conditions identified in the Combination Agreement between the Company and API.

 

-8-

--------------------------------------------------------------------------------

(v) Warrants. Non-statutory options may also be denominated as “warrants” of the
Company. Warrants shall be subject to the same terms and conditions under this
plan as non-statutory options.

9. INCENTIVE STOCK OPTIONS.

9.1 Grant of Incentive Stock Options.

The Committee may, from time to time, grant Incentive Stock Options to
Employees. Incentive Stock Options granted pursuant to the Plan shall be subject
to the following terms and conditions:

(a) Price. The purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall be not less than 100% of the Fair
Market Value of the Company’s Common Stock on the Date of Grant; provided,
however, that the purchase price of an Incentive Stock Option granted under this
Plan may be less than the Fair Market Value of the Common Stock on the Date of
Grant if the Grant: (i) involves the substitution of an Incentive Stock Option
for an outstanding incentive stock option under another plan pursuant to a
corporate transaction; and (ii) the requirements of Treas. Reg. 1.424-1 are met
with respect to the substitution. However, if a Participant owns Common Stock
representing more than 10% of the total combined voting power of all classes of
Common Stock of the Company (or under Section 425(d) of the Code is deemed to
own Common Stock representing more than 10% of the total combined voting power
of all such classes of Common Stock), the purchase price per share of Common
Stock deliverable upon the exercise of each Incentive Stock Option shall not be
less than 110% of the Fair Market Value of the Company’s Common Stock on the
Date of Grant. Shares may only be purchased on full payment of the purchase
price, provided, however, that, if authorized by the Committee, a Participant
may exercise an Option through a cashless exercise as permitted by Federal
Reserve Board Regulation T and the Company shall use reasonable efforts to
facilitate such exercise.

(b) Amounts of Options. Incentive Stock Options may be granted to any Employee
in such amounts as determined by the Committee. In the case of an option
intended to qualify as an Incentive Stock Option, the aggregate Fair Market
Value (determined as of the time the option is granted) of the Common Stock with
respect to which Incentive Stock Options granted are exercisable for the first
time by the Participant during any calendar year (under all plans of the
Participant’s employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000. The provisions of this Section 9.1(b) shall be
construed and applied in accordance with Section 422(d) of the Code and the
regulations, if any, promulgated thereunder. To the extent an award under this
Section 9.1 exceeds this $100,000 limit, the portion of the award in excess of
such limit shall be deemed a Non-statutory Stock Option.

(c) Terms of Options. The term during which each Incentive Stock Option may be
exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than ten years
from the Date of Grant. If at the time an Incentive Stock Option is granted to
an Employee, the Employee owns Common Stock representing more than 10% of the
total combined voting power of the Company (or, under Section 425(d) of the
Code, is deemed to own Common Stock representing more than 10% of the total
combined voting power of all such classes of Common Stock), the Incentive Stock
Option granted to such Employee shall not be exercisable after the expiration of
five years from the Date of Grant.

 

-9-

--------------------------------------------------------------------------------

No Incentive Stock Option granted under this Plan is transferable except by will
or the laws of descent and distribution and is exercisable in his lifetime only
by the Employee to whom it is granted. After death an Incentive Stock Option may
be exercised by the beneficiary described in Section 14 below.

The Committee shall determine the date on which each Incentive Stock Option
shall become vested and may provide that an Incentive Stock Option shall become
vested in installments. The shares comprising each installment may be purchased
in whole or in part at any time after such installment becomes vested, provided
that the amount able to be first exercised in a given year is consistent with
the terms of Section 422 of the Code. The Committee may, in its sole discretion,
accelerate the time at which any Incentive Stock Option becomes vested in whole
or in part, provided that it is consistent with the terms of Section 422 of the
Code.

(d) Termination of Service. Upon the termination of a Participant’s service for
any reason other than death or Disability, Termination for Misconduct, or by
order of a Regulatory Authority, the Incentive Stock Options shall be
exercisable only as to those shares which were vested at the date of termination
and only for a period of 90 days following termination (unless otherwise
determined by the Committee in its sole discretion).

In the event of termination for death or Disability, the Participant’s Incentive
Stock Options shall be exercisable only as to those shares which were vested at
the date of termination and only for a period of twelve months following
termination unless otherwise determined by the Committee in its sole discretion.

In the event of Termination for Misconduct or by order of a Regulatory
Authority, all rights under the Participant’s Incentive Stock Options shall
expire upon termination of employment.

The vesting of all or a part of a Grant of Incentive Stock Options may be
accelerated, in the sole discretion of the Board, in the event there is a Change
in Control of the Company.

(e) Compliance with Code. The options granted under this Section 9 of the Plan
are intended to qualify as incentive stock options within the meaning of
Section 422 of the Code, but the Company makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code.

(f) Options for API Employees. Notwithstanding anything to the contrary in this
Plan, Incentive Stock Options may be issued under this Plan to employees, former
employees, directors and former directors of API (and its affiliates) on the
terms and conditions identified in the Combination Agreement between the Company
and API.

 

-10-

--------------------------------------------------------------------------------

10. RIGHTS OF A STOCKHOLDER; NO TRANSFERABILITY.

No Participant shall have any rights as a stockholder with respect to any shares
covered by Restricted Stock Units or a Non-statutory and/or Incentive Stock
Option until the date of issuance of such shares. Nothing in this Plan or in any
Award granted confers on any person any right to continue in the employ of the
Company or its Affiliates or to continue as a Director of the Company or its
Affiliates or to continue as a Consultant to the Company or its Affiliates or
interferes in any way with the right of the Company or its Affiliates to
terminate a Participant’s services as an officer, Employee, Consultant or
Director at any time.

No Award granted under this Plan is transferable except by will or the laws of
descent and distribution and is exercisable in his or her lifetime only by the
Participant to whom it is granted. No Award (or interest or right therein) may
be subject to pledge, encumbrance, assignment, levy, attachment or garnishment.

11. AGREEMENT WITH GRANTEES.

Each Award will be evidenced by a written agreement, executed by the Participant
and the Company or its Subsidiaries or Affiliates which describes the conditions
for receiving the Award including the date of grant, the vesting conditions, the
purchase price if any, applicable periods, and any other terms and conditions as
may be required by applicable securities law.

The proper officers of the Company shall advise each Participant who is awarded
an Award, in writing, of the number of shares to which it pertains and the terms
and conditions and any restrictions or performance requirements applicable to
such Award; provided they are not inconsistent with the terms, conditions and
provisions of the Plan.

12. RESTRICTIONS ON SHARES.

The Committee may require before any shares of Common Stock are issued pursuant
to this Plan, that the Participant agrees to subject the shares to such holding
periods and restrictions as are determined by the Committee.

13. DESIGNATION OF BENEFICIARY.

A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Company and may be revoked in writing. If a Participant fails
effectively to designate a beneficiary, then the Participant’s estate will be
deemed to be the beneficiary.

14. ADJUSTMENTS.

In the event of any change in the outstanding shares of Common Stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, the Committee will
make such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Participant, including any or all of the
following:

(a) adjustments in the aggregate number or kind of shares of Common Stock which
may be awarded under the Plan;

 

-11-

--------------------------------------------------------------------------------

(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan;

(c) adjustments in the purchase price of outstanding Incentive and/or
Non-statutory Stock Options.

No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award.

15. WITHHOLDING/GOVERNMENTAL AUTHORITY.

There may be deducted from each distribution of cash and/or Common Stock under
the Plan the amount of tax required by any governmental authority to be withheld
or paid. The Company may also require a Participant to take, or the Company may
take, any other action as may be required by a governmental authority in
connection with any distribution under the Plan and the Company may refrain from
making any distributions until such action is taken.

16. REGISTRATION OF PLAN ON FORM S-8.

The Company may register the Plan on a Form S-8 and in such event, will take
such additional action as is necessary in connection with such registration. The
Company may in its sole discretion, however, elect to not register the Plan or
to terminate such registration.

17. TERMINATION AND AMENDMENT OF THE PLAN.

The Board of Directors may at any time, and from time to time, suspend,
terminate, modify or amend the Plan in any respect.

The Board may determine that stockholder approval of any amendment to this Plan
may be advisable for any reason, including but not limited to, for the purpose
of obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange listing
requirements.

Such suspension, termination, modification or amendment may not affect the
rights of a Participant under an outstanding Award, except the Board may, in
connection with a Change in Control, either: (i) replace the Awards granted
under this Plan with substantially similar awards under another plan of another
party to the Change in Control; (ii) make a payment to all Participants with
respect to Awards equal to the difference, if any, between the Fair Market Value
of the Common Stock on the date of the Change in Control and, if any, the
exercise price per share of an Award in either cash or such consideration as the
holders of Common Stock of the Company are receiving in the Change of Control
transaction or (iii) upon not less than 7 days written notice to all holders of
Awards, cause all Awards to terminate immediately prior to the effective time of
the Change of Control, and if the Board elects, accelerate the Vesting of any or
all Awards not then vested. Awards granted under another plan shall not be
substantially similar unless the shares acquired through the exercise of such
options are readily tradable on an established securities market.

 

-12-

--------------------------------------------------------------------------------

No Awards under the Plan shall be granted more than ten (10) years after the
Effective Date of the Plan.

18. EFFECTIVE DATE OF PLAN.

The Plan shall become effective as of the date that the Plan is approved by the
directors of the Company (the “Effective Date”); provided that the Plan is
approved by the Company’s stockholders at the next annual meeting of
stockholders of the Company and within one (1) year of the Effective Date. The
Plan also shall be presented to stockholders of the Company for ratification for
purposes of: (i) satisfying one of the requirements of Section 422 of the Code
governing the tax treatment for Incentive Stock Options; and (ii), if
applicable, establishing or maintaining listing on a stock exchange or system.

19. APPLICABLE LAW.

The Plan will be administered in accordance with the laws of the State of
Delaware to the extent not preempted by Federal law as now or hereafter in
effect.

20. COMPLIANCE WITH SECTION 16.

With respect to persons subject to Section 16 of the Exchange Act, transactions
under this Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the Exchange Act. To the extent any provision
of the Plan or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.

 

-13-