Exhibit 10.1

 
United eSystems, Inc.
(a Nevada corporation)
2008 Incentive Stock Plan

1.           Purpose.  The purpose of this 2008 Incentive Stock Plan (this
“Plan”) is to assist United eSystems, Inc., a Nevada corporation (the “Company”)
and its Related Entities (as hereinafter defined) in attracting, motivating,
retaining and rewarding high-quality executives and other employees, officers,
directors, consultants and other persons who provide services to the Company or
its Related Entities by enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company’s shareholders, and providing
such persons with annual and long-term performance incentives to expend their
maximum efforts in the creation of shareholder value.  This Plan is intended to
qualify certain compensation awarded under this Plan for tax deductibility under
Section 162(m) of the Code (as hereafter defined) to the extent deemed
appropriate by the Plan Administrator (as hereafter defined).

2.           Definitions.  For purposes of this Plan, the following terms shall
be defined as set forth below, in addition to such terms defined in this Plan.

(a)           “Applicable Laws” means the requirements relating to the
administration of equity compensation plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code, the rules and regulations of
any stock exchange upon which the Stock is listed and the applicable laws of any
foreign country or jurisdiction where Awards are granted under this Plan.

(b)           “Award” means any award granted pursuant to the terms of this Plan
including, an Option, Stock Appreciation Right, Restricted Stock, Stock Unit,
Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other
Stock-Based Award or Performance Award, together with any other right or
interest, granted to a Participant under this Plan.

(c)           “Award Agreement” means the written agreement evidencing an Award
granted under this Plan.

(d)           “Beneficiary” means the person, persons, trust or trusts that have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Plan Administrator to receive the benefits specified
under this Plan upon such Participant’s death or to which Awards or other rights
are transferred if and to the extent permitted under Section 10(b) hereof.  If,
upon a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the person, persons,
trust or trusts entitled by will or the laws of descent and distribution to
receive such benefits.

(e)           “Beneficial Owner,” “Beneficially Owning” and “Beneficial
Ownership” shall have the meanings ascribed to such terms in Rule 13d-3 under
the Exchange Act and any successor to such Rule.

 
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(f)            “Board” means the Company’s Board of Directors.

(g)           “Cause” shall, with respect to any Participant, have the meaning
specified in the Award Agreement.  In the absence of any definition in the Award
Agreement, “Cause” shall have the equivalent meaning or the same meaning as
“cause” or “for cause” set forth in any employment, consulting, or other
agreement for the performance of services between the Participant and the
Company or a Related Entity or, in the absence of any such definition in such
agreement, such term shall mean: (i) the failure by the Participant to perform
his or her duties as assigned by the Company (or a Related Entity) in a
reasonable manner; (ii) any material violation or material breach by the
Participant of his or her employment, consulting or other similar agreement with
the Company (or a Related Entity), if any; (iii) any violation or breach by the
Participant of any confidential information and invention assignment,
non-competition, non-solicitation, non-disclosure and/or other similar agreement
with the Company or a Related Entity, if any; (iv) any act by the Participant of
dishonesty or bad faith with respect to the Company (or a Related Entity); (v)
any material violation or breach by the Participant of the Company’s or a
Related Entity’s policy for employee conduct, if any; (vi) use of alcohol, drugs
or other similar substances in a manner that adversely affects the Participant’s
work performance; or (vii) the commission by the Participant of any act,
misdemeanor, or crime reflecting unfavorably upon the Participant or the Company
or any Related Entity.  The good faith determination of the Plan Administrator
of whether the Participant’s Continuous Service has been terminated for “Cause”
shall be final and binding on all parties and for all purposes hereunder.

(h)           “Change in Control” means and shall be deemed to have occurred on
the earliest of the following dates: (i) the date on which any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) obtains
“beneficial ownership” (as defined in Rule 13d-3 of the Exchange Act) or a
pecuniary interest in fifty percent or more of the combined voting power of the
Company’s then outstanding securities (“Voting Stock”); (ii) the consummation of
a merger, consolidation, reorganization or similar transaction other than a
transaction (A) in which substantially all of the holders of Company’s Voting
Stock hold or receive directly or indirectly fifty percent or more of the voting
stock of the resulting entity or a parent company thereof, in substantially the
same proportions as their ownership of the Company immediately prior to the
transaction or (B) in which the holders of Company’s capital stock immediately
before such transaction will, immediately after such transaction, hold as a
group on a fully diluted basis the ability to elect at least a majority of the
directors of the surviving corporation (or a parent company); (iii) there is
consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries
to an entity, fifty percent or more of the combined voting power of the voting
securities of which are owned by shareholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such
sale, lease, license or other disposition; or (iv) individuals who, on the date
this Plan is adopted by the Board, are Directors (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Directors; provided,
however, that if the appointment or election (or nomination for election) of any
new Director was approved or recommended by a majority vote

 
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of the members of the Incumbent Board then still in office, such new member
shall, for purposes of this Plan, be considered as a member of the Incumbent
Board.  For purposes of determining whether a Change in Control has occurred, a
transaction includes all transactions in a series of related transactions, and
terms used in this definition but not defined are used as defined in this
Plan.  The term Change in Control shall not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile
of the Company.

Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual written
agreement between the Company and the Participant shall supersede the foregoing
definition with respect to Awards subject to such agreement (it being
understood, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing
definition shall apply).

(i)           “Code” means the Internal Revenue Code of 1986, as amended from
time to time, including regulations thereunder and successor provisions and
regulations thereto.

(j)           “Committee” means a committee designated by the Board to
administer this Plan with respect to at least a group of Employees, Directors or
Consultants.

(k)           “Consultant” means any person (other than an Employee or a
Director, solely with respect to rendering services in such person’s capacity as
a director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

(l)           “Continuous Service” means uninterrupted provision of services to
the Company or any Related Entity in the capacity as either an officer,
Employee, Director, Consultant or other service provider.  Continuous Service
shall not be considered to be interrupted in the case of: (i) any approved leave
of absence; (ii) transfers among the Company, any Related Entities, or any
successor entities, in the capacity as either an officer, Employee, Director,
Consultant or other service provider; or (iii) any change in status as long as
the individual remains in the service of the Company or a Related Entity in the
capacity as either an officer, Employee, Director, Consultant or other service
provider (except as otherwise provided in the Award Agreement).  An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave.

(m)           “Corporate Transaction” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events: (i) a sale, lease, exclusive license or other disposition of a
significant portion of the consolidated assets of the Company and its
Subsidiaries, as determined by the Board in its discretion; (ii) a sale or other
disposition of more than twenty percent of the outstanding securities of the
Company; or (iii) a merger, consolidation, reorganization or similar
transaction, whether or not the Company is the surviving corporation.

(n)             “Covered Employee” means an Eligible Person who is a Covered
Employee as specified in Section 7 of this Plan.

 
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(o)           “Director” means a member of the Board or the board of directors
of any Related Entity.

(p)           “Disability” means a permanent and total disability (within the
meaning of Code Section 22(e)), as determined by a medical doctor satisfactory
to the Plan Administrator.

(q)           “Dividend Equivalent” means a right, granted to a Participant
under Section 6(g) hereof, to receive cash, Stock, other Awards or other
property equal in value to dividends paid with respect to a specified number of
Shares, or other periodic payments.

(r)           “Effective Date” means the effective date of this Plan, which
shall be the date this Plan is adopted by the Board, subject to the subsequent
approval of the shareholders of the Company.

(s)           “Eligible Person” means each officer, Director, Employee or
Consultant who provides services to the Company or any Related Entity.  The
foregoing notwithstanding, only common law employees of the Company, the Parent,
or any Subsidiary shall be Eligible Persons for purposes of receiving any
Incentive Stock Options.  An Employee on leave of absence may be considered as
still in the employ of the Company or a Related Entity for purposes of
eligibility for participation in this Plan.

(t)           “Employee” means any person, including an officer or Director, who
is an employee of the Company or any Related Entity.  The payment of a
director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.

(u)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.

(v)           “Fair Market Value” means the fair market value of Shares, Awards
or other property as determined by the Plan Administrator, or under procedures
established by the Plan Administrator.  Unless otherwise determined by the Plan
Administrator, the Fair Market Value of a Share as of any given date, after
which the Stock is publicly traded on a stock exchange or market, shall be the
closing sale price per share reported on a consolidated basis for stock listed
on the principal stock exchange or market on which the Stock is traded on the
date as of which such value is being determined or, if there is no sale on that
date, then on the last previous day on which a sale was reported.

(w)           “Good Reason” shall, with respect to any Participant, have the
meaning specified in the Award Agreement.  In the absence of any definition in
the Award Agreement, “Good Reason” shall have the equivalent meaning (or the
same meaning as “good reason” or “for good reason”) set forth in any employment,
consulting or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any such
definition in such agreement, such term shall mean: (i) the assignment to the
Participant of any duties inconsistent in any material respect with the
Participant’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as assigned by the Company
or a Related Entity, or any other action by the Company (or a

 
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Related Entity) that results in a material diminution in such duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith, and that is remedied by the Company
(or a Related Entity) promptly after receipt of notice thereof given by the
Participant; (ii) any material failure by the Company (or a Related Entity) to
comply with its material obligations to the Participant as agreed upon (other
than an isolated, insubstantial and inadvertent failure not occurring in bad
faith) that is remedied by the Company (or a Related Entity) promptly after
receipt of notice thereof given by the Participant; (iii) the Company’s (or
Related Entity’s) requiring the Participant to be based at any office or
location more than one hundred miles from the location of employment immediately
prior to such relocation, except for travel reasonably required in the
performance of the Participant’s responsibilities; (iv) any purported
termination by the Company (or a Related Entity) of the Participant’s Continuous
Service otherwise than for Cause (as defined in Section 2(h)), death, or by
reason of the Participant’s Disability (as defined in Section 2(q)); or (v) any
reduction in the Participant’s base salary.

(x)           “Incentive Stock Option” means any Option intended to be
designated as an incentive stock option within the meaning of Code Section 422
or any successor provision thereto.

(y)           “Non-Qualified Stock Option” means any Option that is not intended
to be designated as an Incentive Stock Option.

(z)           “Option” means a right granted to a Participant under Section 6(b)
hereof, to purchase Stock or other Awards at a specified price during specified
time periods.

(aa)           “Option Expiration Date” means the date of expiration of the
Option’s maximum term as set forth in the Award Agreement evidencing such
Option.

(bb)           “Other Stock-Based Awards” means Awards granted to a Participant
pursuant to Section 6(i) hereof.

(cc)           “Parent” means any corporation (other than the Company), whether
now or hereafter existing, in an unbroken chain of corporations ending with the
Company, if each of the corporations in the chain (other than the Company) owns
stock possessing fifty percent or more of the combined voting power of all
classes of stock in one of the other corporations in the chain.

(dd)           “Participant” means a person who has been granted an Award under
this Plan that remains outstanding, including a person who is no longer an
Eligible Person.

(ee)           “Performance Award” means a right, granted to an Eligible Person
under Section 6(h) and, if applicable, Section 7 hereof, to receive Awards based
upon performance criteria specified by the Plan Administrator.

(ff)           “Performance Period” means that period of time established by the
Plan Administrator at the time any Performance Award is granted or at any time
thereafter during

 
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which any performance goals specified by the Plan Administrator with respect to
such Award are to be measured.

(gg)           “Person” has the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall
include a “group” as defined in Section 12(d) thereof.

(hh)           “Plan Administrator” means the Board or any Committee delegated
by the Board to administer this Plan.  There may be different Plan
Administrators with respect to different groups of Eligible Persons.

(ii)           “Related Entity” means any Subsidiary and any business,
corporation, partnership, limited partnership, limited liability company or
other entity designated by the Plan Administrator in which the Company, a Parent
or a Subsidiary, directly or indirectly, holds a substantial ownership interest.

(jj)           “Restricted Stock” means Stock granted to a Participant under
Section 6(d) hereof, that is subject to certain restrictions, including a risk
of forfeiture.

(kk)           “Rule 16b-3” and “Rule 16a-1(c)(3)” means Rule 16b-3 and Rule
16a-1(c)(3), as from time to time in effect and applicable to this Plan and
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.

(ll)           “Share” or “Shares” mean one or more shares of Stock, and one or
more shares of such other securities as may be substituted (or resubstituted)
for Stock pursuant to Section 10(c) hereof.

(mm)                      “Stock” means the Company’s common stock, and such
other securities as may be substituted (or resubstituted) for the Company’s
common stock pursuant to Section 10(c) hereof.

(nn)           “Stock Appreciation Right” means a right granted to a Participant
pursuant to Section 6(c) hereof.

(oo)           “Stock Unit” means a right, granted to a Participant pursuant to
Section 6(e) hereof, to receive Shares, cash or a combination thereof at the end
of a specified period of time.

(pp)           “Subsidiary” means any corporation (other than the Company),
whether now or hereafter existing, in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.

 
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3.           Administration.

(a)           Administration by Board.  The Board shall administer this Plan
unless and until the Board delegates administration to a Committee, as provided
in Section 3(b).

(b)           Delegation to Committee.

(i)           General.  The Board may delegate administration of this Plan to a
Committee or Committees, and the term “Committee” shall apply to any person or
persons to whom such authority has been delegated.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of this Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of this Plan,
as may be adopted from time to time by the Board.  The Board may abolish the
Committee at any time and revest in the Board the administration of this Plan.

(ii)           Section 162(m) and Rule 16b-3 Compliance.  In the discretion of
the Board, the Committee may consist solely of two or more “Outside Directors”,
in accordance with Code Section 162(m), and/or solely of two or more
“Non-Employee Directors”, in accordance with Rule 16b-3.  In addition, the Board
or the Committee may delegate to a committee the authority to grant Awards to
eligible persons who are either: (A) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting
from such Award; (B) not persons with respect to whom the Company wishes to
comply with Code Section 162(m); or (C) not then subject to Section 16 of the
Exchange Act.

(c)           Powers of the Plan Administrator.  The Plan Administrator shall
have the power, subject to, and within the limitations of, the express
provisions of this Plan:

(i)           To determine from time to time which of the persons eligible under
this Plan shall be granted Awards, when and how each Award shall be granted,
what type or combination of types of Award shall be granted, the provisions of
each Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive Shares or cash pursuant to an Award,
and the number of Shares or amount of cash with respect to which an Award shall
be granted to each such person;

(ii)           To construe and interpret this Plan and Awards granted under it,
and to establish, amend and revoke rules and regulations for its administration,
and to correct any defect, omission or inconsistency in this Plan or in any
Award Agreement, in a manner and to the extent it shall deem necessary or
expedient to make this Plan fully effective;

(iii)           To amend this Plan or an Award as provided in Section 10(e);

                                    (iv)           To terminate or suspend this
Plan as provided in Section 10(e);
 
(v)           To adopt such modifications, procedures, and subplans as may be
necessary or desirable to comply with provisions of the laws of foreign
countries in which the

 
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Company or Related Entities may operate to assure the viability of the benefits
from Awards granted to Participants performing services in such countries and to
meet the objectives of this Plan;

(vi)           To make all determinations required under this Plan or any Award
Agreements thereunder, including, but not limited to, the determination if there
has been a Change in Control, a Corporate Transaction, whether a termination of
Continuous Service was for Cause or for Good Reason and whether a Participant
was prevented from selling his or her Shares due to federal or state securities
laws or by agreement; and

(vii)           Generally, to exercise such powers and to perform such acts as
the Plan Administrator deems necessary or appropriate to promote the best
interests of the Company and that are not in conflict with the provisions of
this Plan.

(d)           Effect of Plan Administrator’s Decision.  All determinations,
interpretations and constructions made by the Plan Administrator in good faith
shall not be subject to review by any person and shall be final, binding and
conclusive on all persons.

(e)           Arbitration.  Any dispute or claim concerning any Award granted
(or not granted) pursuant to this Plan or any disputes or claims relating to or
arising out of this Plan shall be fully, finally and exclusively resolved by
binding and confidential arbitration conducted pursuant to the rules of Judicial
Arbitration and Mediation Services, Inc. (“JAMS”) in the nearest city in which
JAMS conducts business to the city in which the Participant is employed by the
Company.  The Company shall pay all arbitration fees.  In addition to any other
relief, the arbitrator may award to the prevailing party recovery of its
attorneys’ fees and costs.  By accepting an Award, the Participant and the
Company waive their respective rights to have any such disputes or claims tried
by a judge or jury.

(f)           Limitation of Liability.  The Plan Administrator, and each member
thereof, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other agents assisting in the
administration of this Plan.  Members of the Plan Administrator, and any officer
or Employee acting at the direction or on behalf of the Plan Administrator,
shall not be personally liable for any action or determination taken or made in
good faith with respect to this Plan, and shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect to any such
action or determination.

4.           Shares Issuable Under this Plan.

(a)           Limitation on Overall Number of Shares Available for Issuance
Under this Plan.  Subject to adjustment as provided in Section 10(c) hereof, the
total number of Shares that may be issued in connection with Awards under this
Plan shall not exceed 2,000,000.  Any Shares delivered under this Plan may
consist, in whole or in part, of authorized and unissued Shares or treasury
shares.

 
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(b)           Availability of Shares Not Issued Pursuant to Awards.

(i)           If any Shares subject to an Award are forfeited, expire or
otherwise terminate without issuance of such Shares, or any Award is settled for
cash or otherwise does not result in the issuance of all or a portion of the
Shares subject to such Award, the Shares shall, to the extent of such
forfeiture, expiration, termination, cash settlement or non-issuance, be
available for Awards under this Plan, subject to Section 4(b)(iv) below.

(ii)           If any Shares issued pursuant to an Award are forfeited back to
or repurchased by the Company, including, but not limited to, any repurchase or
forfeiture caused by the failure to meet a contingency or condition required for
the vesting of such shares, then such forfeited or repurchased Shares shall
revert to and become available for issuance under this Plan, subject to Section
4(b)(iv) below.

(iii)           In the event that any Option or other Award is exercised by the
withholding of Shares from the Award by the Company, or withholding tax
liabilities arising from such Option or other Award are satisfied by the
withholding of Shares from the Award by the Company, then only the net number of
Shares actually issued to the Participant, excluding the Shares withheld, shall
be counted as issued for purposes of determining the maximum number of Shares
available for grant under this Plan, subject to Section 4(b)(iv) below.

(iv)           Notwithstanding anything in this Section 4(b) to the contrary and
solely for purposes of determining whether Shares are available for the grant of
Incentive Stock Options, the maximum aggregate number of shares that may be
granted under this Plan shall be determined without regard to any Shares
restored pursuant to this Section 4(b) that, if taken into account, would cause
this Plan to fail the requirement under Code Section 422 that this Plan
designate a maximum aggregate number of shares that may be issued.

(c)           Application of Limitations.  The limitations contained in this
Section 4 shall apply not only to Awards that are settled by the delivery of
Shares but also to Awards relating to Shares but settled only in cash (such as
cash-only Stock Appreciation Rights).  The Plan Administrator may adopt
reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute awards) and may
make adjustments if the number of Shares actually delivered differs from the
number of shares previously counted in connection with an Award.

5.           Eligibility; Per-Person Award Limitations.  Awards may be granted
under this Plan only to Eligible Persons.  Subject to adjustment as provided in
Section 10(c), for each fiscal year in which awards granted under this Plan are
subject to the requirements of Code Section 162(m), an Eligible Person may not
be granted: (a) Options or Stock Appreciation Rights with respect to more than
the total number of Shares reserved under this Plan; or (b) Awards, other than
Options or Stock Appreciation Rights, with respect to more than the total number
of Shares reserved under this Plan.  In addition, the maximum dollar value
payable in any fiscal year to any one Participant with respect to Awards granted
under this Plan is $5,000,000.

 
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6.           Terms of Awards.

(a)           General.  Awards may be granted on the terms and conditions set
forth in this Section.  In addition, the Plan Administrator may impose on any
Award or the exercise thereof, at the date of grant or thereafter (subject to
Section 10(e)), such additional terms and conditions, not inconsistent with the
provisions of this Plan, as the Plan Administrator shall determine, including
terms requiring forfeiture of Awards in the event of termination of the
Participant’s Continuous Service and terms permitting a Participant to make
elections relating to his or her Award.  The Plan Administrator shall retain
full power and discretion to accelerate, waive or modify, at any time, any term
or condition of an Award that is not mandatory under this Plan.

(b)           Options.  The Plan Administrator is authorized to grant Options to
any Eligible Person on the following terms and conditions:

(i)           Stock Option Agreement.  Each grant of an Option shall be
evidenced by an Award Agreement.  Such Award Agreement shall be subject to all
applicable terms and conditions of this Plan and may be subject to any other
terms and conditions that are not inconsistent with this Plan and that the Plan
Administrator deems appropriate for inclusion in the Award Agreement.  The
provisions of the various Award Agreements entered into under this Plan need not
be identical.  Notwithstanding any other provision of this Plan, any
Non-Qualified Stock Option shall be structured to comply with or be exempt from
Code Section 409A, unless otherwise specifically determined by the Plan
Administrator.

(ii)           Number of Shares.  Each Award Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 10(c) hereof.  The Award Agreement shall
also specify whether the Stock Option is an Incentive Stock Option or a
Non-Qualified Stock Option.

(iii)           Exercise Price.

(A)           In General.  Each Award Agreement shall state the price at which
Shares subject to the Option may be purchased (the “Exercise Price”), which
shall be, with respect to Incentive Stock Options, not less than one hundred
percent of the Fair Market Value of the Stock on the date of grant.  In the case
of Non-Qualified Stock Options, the Exercise Price shall be determined in the
sole discretion of the Plan Administrator; provided, however, that if the
Exercise Price is less than one hundred percent of the Fair Market Value of the
Stock on the date of grant, the Non-Qualified Stock Option shall be structured
to comply with or be exempt from Code Section 409A; provided further, however,
that the Exercise Price may never be less than eighty-five percent of the Fair
Market Value of the Stock on the date of grant.

                    (B)          Ten Percent Shareholder.  If a Participant owns
or is deemed to own (by reason of the attribution rules applicable under Code
Section 424(d)) more than ten percent of the combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, any Incentive Stock
Option granted to such Employee must have an exercise price per Share of at
least one hundred ten percent of the Fair Market Value of a Share on the date of
grant.

 
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(iv)           Time and Method of Exercise.  The Plan Administrator shall
determine the time or times at which or the circumstances under which an Option
may be exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements), the time or times at
which Options shall cease to be or become exercisable following termination of
Continuous Service or upon other conditions, the methods by which the exercise
price may be paid or deemed to be paid (including, in the discretion of the Plan
Administrator, a cashless exercise procedure), the form of such payment,
including, without limitation, cash, Stock, Shares subject to the Option (a
“net” exercise), other Awards or awards granted under other plans of the Company
or a Related Entity, other property (including notes or other contractual
obligations of Participants to make payment on a deferred basis) or any other
form of consideration legally permissible, and the methods by or forms in which
Stock will be delivered or deemed to be delivered to Participants.

(v)           Termination of Service.  Subject to earlier termination of the
Option as otherwise provided in this Plan and unless otherwise specifically
provided by the Plan Administrator with respect to an Option and set forth in
the Award Agreement, an Option shall remain exercisable, to the extent vested,
after a Participant’s termination of Continuous Service only during the
applicable time period determined in accordance with this Section and thereafter
shall terminate and no longer be exercisable:

(A)           Death or Disability.  If the Participant’s Continuous Service
terminates because of the death or Disability of the Participant, the Option, to
the extent unexercised and vested and exercisable on the date on which the
Participant’s Continuous Service terminated, may be exercised by the Participant
(or the Participant’s legal representative or estate) at any time prior to the
expiration of twelve months (or such other period of time as determined by the
Plan Administrator, in its discretion) after the date on which the Participant’s
Continuous Service terminated, but in any event only with respect to the vested
portion of the Option and no later than the Option Expiration Date.

(B)           Termination for Cause.  Notwithstanding any other provision of
this Plan to the contrary, if the Participant’s Continuous Service is terminated
for Cause, the Option shall terminate and cease to be exercisable immediately
upon such termination of Continuous Service.

(C)           Other Termination of Service.  If the Participant’s Continuous
Service terminates for any reason, except Disability, death or Cause, the
Option, to the extent unexercised, vested and exercisable by the Participant on
the date on which the Participant’s Continuous Service terminated, may be
exercised by the Participant at any time prior to the expiration of thirty days
(or such longer period of time as determined by the Plan Administrator, in its
discretion) after the date on which the Participant’s Continuous Service
terminated, but in any event only with respect to the vested portion of the
Option and no later than the Option Expiration Date.

(D)           Extension for Securities Law Violations.  Notwithstanding the
other provisions of this Section 6(b)(v) and contingent upon this provision not
adversely
 
 
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affecting the exemption of the Option from the provisions of Code Section 409A,
if the Participant’s Continuous Service terminates for any reason, except Cause,
and the Participant is precluded by federal or state securities laws from
selling the Shares, so that the Participant has less than a thirty-day period
from the termination of Participant’s Continuous Service to the expiration date
of the Option in which the Participant would be permitted by federal or state
securities laws to sell the Shares, then the period for exercising the Option
following the termination of Participant’s Continuous Service shall
automatically be extended by an additional period of up to thirty days measured
from the date the Participant is first free to sell Shares; provided, however,
that in no event shall the Option be exercisable after the specified Option
Expiration Date and the maximum date permitted for exemption of the Option under
Code Section 409A.  The determination of whether the Participant is precluded
from selling the Shares subject to the Option by federal or state securities
laws shall be made by the Plan Administrator and such determination shall be
final, binding and conclusive.

(vi)           Incentive Stock Options.  The terms of any Incentive Stock Option
granted under this Plan shall comply in all respects with the provisions of Code
Section 422.  If and to the extent required to comply with Code Section 422,
Options granted as Incentive Stock Options shall be subject to the following
special terms and conditions:

(A)           The Option shall not be exercisable more than ten years after the
date such Incentive Stock Option is granted; provided, however, that if a
Participant owns or is deemed to own (by reason of the attribution rules of Code
Section 424(d)) more than ten percent of the combined voting power of all
classes of stock of the Company or any Parent or Subsidiary and the Incentive
Stock Option is granted to such Participant, the Incentive Stock Option shall
not be exercisable (to the extent required by the Code at the time of the grant)
for no more than five years from the date of grant; and

(B)           If the aggregate Fair Market Value (determined as of the date the
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options granted under this Plan and all other option plans of the Company,
its Parent or any Subsidiary are exercisable for the first time by a Participant
during any calendar year in excess of $100,000, then such Participant’s
Incentive Stock Option(s) or portions thereof that exceed such $100,000 limit
shall be treated as Non-Qualified Stock Options (in the reverse order in which
they were granted, so that the last Incentive Stock Option granted will be the
first treated as a Non-Qualified Stock Option).  This paragraph shall only apply
to the extent such limitation is applicable under the Code at the time of the
grant.

(vii)           Vesting and Repurchase Requirements.  The right to exercise any
Option under this Plan must vest at the rate of at least twenty percent per year
over five years from the date of grant of such Option.  Any repurchase rights of
the Company to repurchase Stock subject to an Option upon the termination of a
Participant’s Continuous Service must be: (i) for a repurchase price of not less
the lower of (A) than the Fair Market Value of such Shares on the date that the
Participant’s Continuous Service terminated, or (B) the original purchase price
paid by the Participant for such Shares; (ii) exercised within ninety days of
the date that the Participant’s Continuous Service terminated; and (iii) must
lapse at the rate of at least twenty percent of the Shares of Stock per year
over five years from the date right to receive such Award

 
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was first granted to the Participant (without regard to the date an Option was
exercised or became exercisable).

(c)           Stock Appreciation Rights.  The Plan Administrator is authorized
to grant Stock Appreciation Rights to Participants on the following terms and
conditions:

(i)           Agreement.  Each grant of a Stock Appreciation Right shall be
evidenced by an Award Agreement.  Such Award Agreement shall be subject to all
applicable terms and conditions of this Plan and may be subject to any other
terms and conditions that are not inconsistent with this Plan and that the Plan
Administrator deems appropriate for inclusion in the Award Agreement.  The
provisions of the various Award Agreements entered into under this Plan need not
be identical.

(ii)           Right to Payment.  A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one Share of Stock on the date of
exercise over (B) the grant price, or base price, of the Stock Appreciation
Right as determined by the Plan Administrator.

(iii)           Other Terms.  The Plan Administrator shall determine at the date
of grant or thereafter, the time or times at which and the circumstances under
which a Stock Appreciation Right may be exercised in whole or in part (including
based on achievement of performance goals and/or future service requirements),
the time or times at which Stock Appreciation Rights shall cease to be or become
exercisable following termination of Continuous Service or upon other
conditions, the form of payment upon exercise of the Stock Appreciation Right
(e.g., Shares, cash or other property), the method of exercise, the method of
settlement, the form of consideration payable in settlement (e.g., cash, Shares
or other property), the method by or the forms in which Stock will be delivered
or deemed to be delivered to Participants, whether or not a Stock Appreciation
Right shall be in tandem or in combination with any other Award, and any other
terms and conditions of any Stock Appreciation Right.  Stock Appreciation Rights
may be either freestanding or in tandem with other Awards.  Notwithstanding any
other provision of this Plan, unless otherwise specifically determined by the
Plan Administrator, each Stock Appreciation Right shall be structured to either
comply with or be exempt from Code Section 409A.

(d)           Restricted Stock.  The Plan Administrator is authorized to grant
Restricted Stock to any Eligible Person on the following terms and conditions:

(i)           Grant and Restrictions.  Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Plan Administrator may impose, or as otherwise provided in this
Plan.  The terms of any Restricted Stock granted under this Plan shall be set
forth in a written Award Agreement that shall contain provisions determined by
the Plan Administrator and not inconsistent with this Plan.  The restrictions
may lapse separately or in combination at such times, under such circumstances
(including based on achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Plan Administrator may
determine at the date of grant or thereafter.  Except to the extent restricted
under the terms of this Plan and any Award Agreement

 
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relating to the Restricted Stock, a Participant granted Restricted Stock shall
have all of the rights of a shareholder, including the right to vote the
Restricted Stock and the right to receive dividends thereon (subject to any
mandatory reinvestment or other requirement imposed by the Plan
Administrator).  During the restricted period applicable to the Restricted
Stock, subject to Section 10(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined or otherwise encumbered by the
Participant.

(ii)           Forfeiture.  Except as otherwise determined by the Plan
Administrator, upon termination of a Participant’s Continuous Service during the
applicable restriction period, the Participant’s Restricted Stock that is at
that time subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited to or reacquired by the Company; provided that the
Plan Administrator may provide, by rule or regulation or in any Award Agreement,
or may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock shall be waived in whole or in part in
the event of terminations resulting from specified causes, and the Plan
Administrator may in other cases waive in whole or in part the forfeiture of
Restricted Stock, as the Plan Administrator determines, in its discretion.

(iii)           Certificates for Shares.  Restricted Stock granted under this
Plan may be evidenced in such manner as the Plan Administrator shall
determine.  If certificates representing Restricted Stock are registered in the
name of the Participant, the Plan Administrator may require that such
certificates bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, that the Company retain
physical possession of the certificates, that the certificates be kept with an
escrow agent and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

(iv)           Dividends and Splits.  As a condition to the grant of an Award of
Restricted Stock, the Plan Administrator may require or permit a Participant to
elect that any cash dividends paid on a Share of Restricted Stock be
automatically reinvested in additional Shares of Restricted Stock or applied to
the purchase of additional Awards under this Plan.  Unless otherwise determined
by the Plan Administrator, Shares distributed in connection with a stock split
or stock dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Shares or other property have been
distributed.

(e)           Stock Units.  The Plan Administrator is authorized to grant Stock
Units to Participants, which are rights to receive Shares, cash or other
property, or a combination thereof at the end of a specified time period,
subject to the following terms and conditions:
 
(i)            Award and Restrictions.  Satisfaction of an Award of Stock Units
shall occur upon expiration of the time period specified for such Stock Units by
the Plan Administrator (or, if permitted by the Plan Administrator, as elected
by the Participant).  In addition, Stock Units shall be subject to such
restrictions (which may include a risk of forfeiture) as the Plan Administrator
may impose, if any, which restrictions may lapse at the expiration of the time
period or at earlier specified times (including based on achievement of
performance

 
 
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goals and/or future service requirements), separately or in combination, in
installments or otherwise, as the Plan Administrator may determine.  The terms
of an Award of Stock Units shall be set forth in a written Award Agreement that
shall contain provisions determined by the Plan Administrator and not
inconsistent with this Plan.  Stock Units may be satisfied by delivery of Stock,
cash equal to the Fair Market Value of the specified number of Shares covered by
the Stock Units, or a combination thereof, as determined by the Plan
Administrator at the date of grant or thereafter.  Prior to satisfaction of an
Award of Stock Units, an Award of Stock Units carries no voting or dividend or
other rights associated with share ownership.  Notwithstanding any other
provision of this Plan, unless specifically determined by the Plan
Administrator, each Stock Unit shall be structured to either comply with or be
exempt from Code Section 409A.

(ii)           Forfeiture.  Except as otherwise determined by the Plan
Administrator, upon termination of a Participant’s Continuous Service during the
applicable time period or portion thereof to which forfeiture conditions apply
(as provided in the Award Agreement evidencing the Stock Units), the
Participant’s Stock Units (other than those vested Stock Units subject to
deferral at the election of the Participant) shall be forfeited; provided that
the Plan Administrator may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Stock Units shall be waived in whole or in
part in the event of terminations resulting from specified causes, and the Plan
Administrator may in other cases waive in whole or in part the forfeiture of
Stock Units at its discretion.

(iii)           Dividend Equivalents.  Unless otherwise determined by the Plan
Administrator at date of grant, any Dividend Equivalents that are granted with
respect to any Award of Stock Units shall be either (A) paid with respect to
such Stock Units at the dividend payment date in cash or in Shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such Stock Units and the amount or
value thereof automatically deemed reinvested in additional Stock Units, other
Awards or other investment vehicles, as the Plan Administrator shall determine
or permit the Participant to elect.

(f)           Bonus Stock and Awards in Lieu of Obligations.  The Plan
Administrator is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of Company obligations to pay cash or deliver other
property under this Plan or under other plans or compensatory arrangements,
provided that, in the case of Participants subject to Section 16 of the Exchange
Act, the amount of such grants remains within the discretion of the Plan
Administrator to the extent necessary to ensure that acquisitions of Stock or
other Awards are exempt from liability under Section 16(b) of the Exchange
Act.  Stock or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Plan Administrator.

(g)          Dividend Equivalents.  The Plan Administrator is authorized to
grant Dividend Equivalents to any Eligible Person entitling the Eligible Person
to receive cash, Shares, other Awards, or other property equal in value to
dividends paid with respect to a specified number of Shares, or other periodic
payments.  Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award.  The terms of an Award of Dividend Equivalents
shall be set forth in a written Award Agreement that shall contain provisions
determined by the Plan Administrator and not inconsistent with this Plan.  The
Plan

 
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Administrator may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Plan Administrator may
specify.  Notwithstanding any other provision of this Plan, unless specifically
determined by the Plan Administrator, each Dividend Equivalent shall be
structured to either comply with or be exempt from Code Section 409A.

(h)           Performance Awards.  The Plan Administrator is authorized to grant
Performance Awards to any Eligible Person payable in cash, Shares, other
property, or other Awards, on terms and conditions established by the Plan
Administrator, subject to the provisions of Section 7 if and to the extent that
the Plan Administrator shall, in its sole discretion, determine that an Award
shall be subject to those provisions.  The performance criteria to be achieved
during any Performance Period and the length of the Performance Period shall be
determined by the Plan Administrator upon the grant of each Performance
Award.  Except as provided in this Plan or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period.  The performance goals to be achieved for each
Performance Period shall be conclusively determined by the Plan Administrator
and may be based upon the criteria set forth in Section 7(b), or in the case of
an Award that the Plan Administrator determines shall not be subject to Section
7 hereof, any other criteria that the Plan Administrator, in its sole
discretion, shall determine should be used for that purpose.  The amount of the
Award to be distributed shall be conclusively determined by the Plan
Administrator.  Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with procedures
established by the Plan Administrator, on a deferred basis.

(i)           Other Stock-Based Awards.  The Plan Administrator is authorized,
subject to limitations under applicable law, to grant to any Eligible Person
such other Awards that may be denominated or payable in, valued in whole or in
part by reference to, or otherwise based on, or related to, Shares, as deemed by
the Plan Administrator to be consistent with the purposes of this Plan,
including, without limitation, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Stock, purchase rights for Stock,
Awards with value and payment contingent upon performance of the Company or any
other factors designated by the Plan Administrator, and Awards valued by
reference to the book value of Stock or the value of securities of or the
performance of specified Related Entities or business units.  These Awards may
be granted alone or in connection with other awards (whether or not such other
awards are granted under this Plan).  The Plan Administrator shall determine the
terms and conditions of such Awards.  The terms of any Award pursuant to this
Section shall be set forth in a written Award Agreement that shall contain
provisions determined by the Plan Administrator and not inconsistent with this
Plan.  Stock delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(i) shall be purchased for such consideration
(including without limitation loans from the Company or a Related Entity), paid
for at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards or other property, as the Plan
Administrator shall determine.  Cash Awards, as an element of or supplement to
any other Award under this Plan, may also be granted pursuant to this Section
6(i).  Notwithstanding any other provision of this Plan, unless specifically
determined by the Plan Administrator, each Award shall be structured to either
be exempt or comply with Code Section 409A.

 
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(j)           Vesting and Repurchase Requirements.  In the event that the
Company has a right to repurchase Stock granted pursuant to an Award under this
Plan upon the termination of a Participant’s Continuous Service, such repurchase
rights must: (i) be for a repurchase price of not less the lower of (A) than the
Fair Market Value of such Shares on the date that the Participant’s Continuous
Service terminated, or (B) the original purchase price (if any) paid by the
Participant for such Shares; (ii) be exercised within ninety days of the date
that the Participant’s Continuous Service terminated; and (iii) lapse at the
rate of at least twenty percent of the Shares of Stock per year over five years
from the date right to receive such Award was first granted to the Participant
(without regard to the date an Award was granted or otherwise became
exercisable).

7.           Tax Qualified Performance Awards.

(a)           Covered Employees.  A Committee, composed in compliance with the
requirements of Code Section 162(m), in its discretion, may determine at the
time an Award is granted to an Eligible Person who is, or is likely to be, as of
the end of the tax year in which the Company would claim a tax deduction in
connection with such Award, a Covered Employee, that the provisions of this
Section 7 shall be applicable to such Award.

(b)           Performance Criteria.  If an Award is subject to this Section 7,
then the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be contingent upon
achievement of one or more objective performance goals.  Performance goals shall
be objective and shall otherwise meet the requirements of Code Section 162(m)
and regulations thereunder including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being “substantially uncertain.” One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related Entities,
or for business or geographical units of the Company and/or a Related Entity
(except with respect to the total stockholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for
such Awards: (i) earnings per share; (ii) revenues or margins; (iii) cash flow;
(iv) operating margin; (v) return on net assets, investment, capital, or equity;
(vi) economic value added; (vii) direct contribution; (viii) net income; (ix)
pretax earnings; (x) earnings before interest and taxes; (xi) earnings before
interest, taxes, depreciation and amortization; (xii) earnings after interest
expense and before extraordinary or special items; (xiii) operating income;
(xiv) income before interest income or expense, unusual items and income taxes,
local, state or federal and excluding budgeted and actual bonuses that might be
paid under any ongoing bonus plans of the Company; (xv) working capital; (xvi)
management of fixed costs or variable costs; (xvii) identification or
consummation of investment opportunities or completion of specified projects in
accordance with corporate business plans, including strategic mergers,
acquisitions or divestitures; (xviii) total stockholder return; and (xix) debt
reduction.  Any of the above goals may be determined on an absolute or relative
basis or as compared to the performance of a published or special index deemed
applicable by the Committee including, but not limited to, the Standard & Poor’s
500 Stock Index or a group of companies that are comparable to the Company.

 
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The Committee shall exclude the impact of an event or occurrence that the
Committee determines should appropriately be excluded, including without
limitation: (i) restructurings, discontinued operations, extraordinary items,
and other unusual or non-recurring charges; (ii) an event either not directly
related to the operations of the Company or not within the reasonable control of
the Company’s management; or (iii) a change in accounting standards required by
generally accepted accounting principles.

(c)           Performance Period; Timing For Establishing Performance
Goals.  Achievement of performance goals in respect of such Performance Awards
shall be measured over a Performance Period, as specified by the
Committee.  Performance goals shall be established not later than ninety days
after the beginning of any Performance Period applicable to such Performance
Awards, or at such other date as may be required or permitted for
“performance-based compensation” under Code Section 162(m).

(d)           Adjustments.  The Committee may, in its discretion, reduce the
amount of a settlement otherwise to be made in connection with Awards subject to
this Section 7, but may not exercise discretion to increase any such amount
payable to a Covered Employee in respect of an Award subject to this Section
7.  The Committee shall specify the circumstances in which such Awards shall be
paid or forfeited in the event of termination of Continuous Service by the
Participant prior to the end of a Performance Period or settlement of Awards.

(e)           Committee Certification.  No Participant shall receive any payment
under this Plan unless the Committee has certified, by resolution or other
appropriate action in writing, that the performance criteria and any other
material terms previously established by the Committee or set forth in this
Plan, have been satisfied to the extent necessary to qualify as “performance
based compensation” under Code Section 162(m).

8.           Certain Provisions Applicable to Awards or Sales.

(a)           Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards
granted under this Plan may, in the discretion of the Plan Administrator, be
granted either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Company, any Related Entity, or any business entity to be acquired by the
Company or a Related Entity, or any other right of a Participant to receive
payment from the Company or any Related Entity.  Such additional, tandem, and
substitute or exchange Awards may be granted at any time.  If an Award is
granted in substitution or exchange for another Award or award, the Plan
Administrator shall require the surrender of such other Award or award in
consideration for the grant of the new Award.  In addition, Awards may be
granted in lieu of cash compensation, including in lieu of cash amounts payable
under other plans of the Company or any Related Entity.

(b)           Form and Timing of Payment Under Awards; Deferrals.  Subject to
the terms of this Plan and any applicable Award Agreement, payments to be made
by the Company or a Related Entity upon the exercise of an Option or other Award
or settlement of an Award may be made in such forms as the Plan Administrator
shall determine, including, without limitation, cash, other Awards or other
property, and may be made in a single payment or

 
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transfer, in installments, or on a deferred basis.  The settlement of any Award
may be accelerated, and cash paid in lieu of Stock in connection with such
settlement, in the discretion of the Plan Administrator or upon occurrence of
one or more specified events (in addition to a Change in Control).  Installment
or deferred payments may be required by the Plan Administrator (subject to
Section 10(g) of this Plan) or permitted at the election of the Participant on
terms and conditions established by the Plan Administrator.  Payments may
include, without limitation, provisions for the payment or crediting of a
reasonable interest rate on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.

(c)           Exemptions from Section 16(b) Liability.  It is the intent of the
Company that this Plan comply in all respects with applicable provisions of Rule
16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that neither the
grant of any Awards to nor other transaction by a Participant who is subject to
Section 16 of the Exchange Act is subject to liability under Section 16(b)
thereof (except for transactions acknowledged in writing to be non-exempt by
such Participant).  Accordingly, if any provision of this Plan or any Award
Agreement does not comply with the requirements of Rule 16b-3 or Rule
16a-1(c)(3) as then applicable to any such transaction, such provision will be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
avoid liability under Section 16(b).

(d)           Code Section 409A.  If and to the extent that the Plan
Administrator believes that any Awards may constitute a “nonqualified deferred
compensation plan” under Code Section 409A, the terms and conditions set forth
in the Award Agreement for that Award shall be drafted in a manner that is
intended to comply with, and shall be interpreted in a manner consistent with,
the applicable requirements of Code Section 409A, unless otherwise agreed to in
writing by the Participant and the Company.

(e)           Financial Information.  At least annually, copies of the Company’s
balance sheet and income statement for the just completed fiscal year shall be
made available to each Participant under this Plan.  The Company shall not be
required to provide such information to key employees whose duties in connection
with the Company assure them access to equivalent information.  Furthermore, the
Company shall deliver to each Participant such disclosures as are required in
accordance with Rule 701 under the Exchange Act.

9.           Change in Control; Corporate Transaction.
 
(a)           Change in Control.  The Plan Administrator may, in its discretion,
accelerate the vesting, exercisability, lapsing of restrictions, or expiration
of deferral of any Award, including upon the occurrence of a Change in
Control.  In addition, the Plan Administrator may provide in an Award Agreement
that the performance goals relating to any Award will be deemed to have been met
upon the occurrence of any Change in Control.  In addition to the terms of
preceding sentences, the effect of a “change in control” may be provided (i) in
an employment, compensation, or severance agreement, if any, between the Company
or any Related Entity and the Participant, relating to the Participant’s
employment, compensation, or severance with or from the Company or such Related
Entity, or (ii) in the Award Agreement.
 
 
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(b)           Corporate Transactions.  In the event of a Corporate Transaction,
any surviving entity or acquiring entity or its parent (together, the “Surviving
Entity”) may either: (i) assume any or all Awards outstanding under this Plan;
(ii) continue any or all Awards outstanding under this Plan; or (iii) substitute
similar stock awards for outstanding Awards (it being understood that similar
awards include, but are not limited to, awards to acquire the same consideration
paid to the shareholders or the Company, as the case may be, pursuant to the
Corporate Transaction).  In the event that any Surviving Entity does not assume
or continue any or all such outstanding Awards or substitute similar stock
awards for such outstanding Awards, then with respect to Awards that have been
not assumed, continued or substituted, then such Awards shall terminate if not
exercised (if applicable) at or prior to such effective time (contingent upon
the effectiveness of the Corporate Transaction); provided that the Plan
Administrator provides the Participants reasonable notice of the termination of
their Awards and a period of at least three business days to exercise the Awards
(to the extent the Awards are exercisable).

The Plan Administrator, in its discretion and without the consent of any
Participant, may (but is not obligated to) either: (i) accelerate the vesting of
any Awards (and, if applicable, the time at which such Awards may be exercised)
in full or as to some percentage of the Award to a date prior to the effective
time of such Corporate Transaction as the Plan Administrator shall determine
(contingent upon the effectiveness of each Corporate Transaction); or (ii)
provide for a cash payment in exchange for the termination of an Award or any
portion thereof where such cash payment is equal to the Fair Market Value of the
Shares that the Participant would receive if the Award were fully vested and
exercised (if applicable) as of such date (less any applicable exercise
price).  In the event that the Plan Administrator accelerates the vesting of any
Award, the Plan Administrator shall provide the Participant whose Award has been
accelerated notice of the vesting acceleration and a period of fifteen days from
the date of the notice in which to exercise the Award.

Notwithstanding the foregoing, with respect to Restricted Stock and any other
Award granted under this Plan where the Company has any forfeiture,
reacquisition or repurchase rights, the forfeiture, reacquisition or repurchase
rights for such Awards may be assigned by the Company to the Successor Entity in
connection with such Corporate Transaction.  In the event any such rights are
not continued or assigned to the Successor Entity, then such rights shall lapse
and the Award shall be fully vested as of the effective time of the Corporate
Transaction.  In addition, the Plan Administrator, in its discretion, may (but
is not obligated to) provide that any forfeiture, reacquisition or repurchase
rights held by the Company with respect to any such Awards shall lapse in whole
or in part (contingent upon the effectiveness of the Corporate Transaction).

(c)           Dissolution or Liquidation.  In the event of a dissolution or
liquidation of the Company, then all outstanding Awards shall terminate
immediately prior to the completion of such dissolution or liquidation, and
Shares subject to the Company’s repurchase option may be repurchased by the
Company notwithstanding the fact that the holder of such Stock is still in
Continuous Service.

 
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10.           General Provisions.

(a)           Compliance With Legal and Other Requirements.  The Company may, to
the extent deemed necessary or advisable by the Plan Administrator, postpone the
issuance or delivery of Stock or payment of other benefits under any Award until
completion of registration or qualification of such Stock or other required
action under any federal or state law, rule or regulation, listing or other
required action with respect to any stock exchange or automated quotation system
upon which the Stock or other Company securities are listed or quoted, or
compliance with any other obligation of the Company, as the Plan Administrator,
may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Stock or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other obligations.  The
foregoing notwithstanding, in connection with a Change in Control, the Company
shall take or cause to be taken no action, and shall undertake or permit to
arise no legal or contractual obligation, that results or would result in any
postponement of the issuance or delivery of Stock or payment of benefits under
any Award or the imposition of any other conditions on such issuance, delivery
or payment, to the extent that such postponement or other condition would
represent a greater burden on a Participant than existed on the ninetieth day
preceding the Change in Control.

(b)           Limits on Transferability; Beneficiaries.  Except as determined by
the Plan Administrator, a Participant may not assign, sell, transfer, or
otherwise encumber or subject to any lien any Award or other right or interest
granted under this Plan, in whole or in part, other than by will or by operation
of the laws of descent and distribution, and such Awards or rights that may be
exercisable shall be exercised during the lifetime of the Participant only by
the Participant or his or her guardian or legal representative.

(c)           Adjustments.

(i) Adjustments to Awards.  In the event that any extraordinary dividend or
other distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
and/or such other securities of the Company or any other issuer such that a
substitution, exchange, or adjustment is determined by the Plan Administrator to
be appropriate, then the Plan Administrator shall, in such manner as the Plan
Administrator may deem equitable, substitute, exchange, or adjust any or all of
(A) the number and kind of shares of stock that are reserved for issuance in
connection with Awards granted thereafter, (B) the number and kind of shares of
stock by which annual per-person Award limitations are measured under Section 5
hereof, (C) the number and kind of shares of stock subject to or deliverable in
respect of outstanding Awards, (D) the exercise price, grant price, base price
or purchase price relating to any Award and/or make provision for payment of
cash or other property in respect of any outstanding Award, and (E) any other
aspect of any Award that the Plan Administrator determines to be appropriate.

 
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(ii) Other Adjustments.  The Plan Administrator (which shall be a Committee to
the extent such authority is required to be exercised by a Committee to comply
with Code Section 162(m)) is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including Awards subject to
performance goals) in recognition of unusual or nonrecurring events (including,
without limitation, acquisitions and dispositions of businesses and assets)
affecting the Company, any Related Entity or any business unit, or the financial
statements of the Company or any Related Entity, or in response to changes in
applicable laws, regulations, accounting principles, tax rates and regulations
or business conditions or in view of the Plan Administrator’s assessment of the
business strategy of the Company, any Related Entity or business unit thereof,
performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made if and to
the extent that such authority or the making of such adjustment would cause
Options, Stock Appreciation Rights or Performance Awards granted to Participants
designated by the Plan Administrator as Covered Employees and intended to
qualify as “performance-based compensation” under Code Section 162(m) and the
regulations thereunder to otherwise fail to qualify as “performance-based
compensation” under Code Section 162(m) and regulations thereunder.

(d)           Taxes.  The Company and any Related Entity are authorized to
withhold from any Award granted, any payment relating to an Award under this
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Plan Administrator may deem advisable to enable the Company, any
Related Entity and the Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award.  This
authority shall include authority to withhold or receive Stock or other property
and to make cash payments in respect thereof in satisfaction of a Participant’s
tax obligations, either on a mandatory or elective basis in the discretion of
the Plan Administrator.

(e)           Changes to this Plan and Awards.  The Board may amend, alter,
suspend, discontinue or terminate this Plan, or any Committee’s authority to
grant Awards under this Plan, without the consent of shareholders of the Company
or Participants.  Any amendment or alteration to this Plan shall be subject to
the approval of the Company’s shareholders if such shareholder approval is
deemed necessary and advisable by the Board.  However, without the consent of an
affected Participant, no such amendment, alteration, suspension, discontinuance
or termination of this Plan may materially and adversely affect the rights of
such Participant under any previously granted and outstanding Award.  The Plan
Administrator may waive any conditions or rights under, or amend, alter,
suspend, discontinue or terminate any Award theretofore granted and any Award
Agreement relating thereto, except as otherwise provided in this Plan; provided
that, without the consent of an affected Participant, no such action may
materially and adversely affect the rights of such Participant under such Award.

(f)           Limitation on Rights Conferred Under Plan.  Neither this Plan nor
any action taken hereunder shall be construed as: (i) giving any Eligible Person
or Participant the right to continue as an Eligible Person or Participant or in
the employ of the Company or a

 
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Related Entity; (ii) interfering in any way with the right of the Company or a
Related Entity to terminate any Eligible Person’s or Participant’s Continuous
Service at any time; (iii) giving an Eligible Person or Participant any claim to
be granted any Award under this Plan or to be treated uniformly with other
Participants and Employees; or (iv) conferring on a Participant any of the
rights of a shareholder of the Company unless and until the Participant is duly
issued or transferred Shares in accordance with the terms of an Award.

(g)           Unfunded Status of Awards; Creation of Trusts.  This Plan is
intended to constitute an “unfunded” plan for incentive and deferred
compensation.  With respect to any payments not yet made to a Participant or
obligations to deliver Stock pursuant to an Award, nothing contained in this
Plan or any Award shall give any such Participant any rights that are greater
than those of a general creditor of the Company; provided that the Plan
Administrator may authorize the creation of trusts and deposit therein cash,
Stock, other Awards or other property, or make other arrangements to meet the
Company’s obligations under this Plan.  Such trusts or other arrangements shall
be consistent with the “unfunded” status of this Plan unless the Plan
Administrator otherwise determines with the consent of each affected
Participant.  The trustee of such trusts may be authorized to dispose of trust
assets and reinvest the proceeds in alternative investments, subject to such
terms and conditions as the Plan Administrator may specify and in accordance
with applicable law.

(h)           Nonexclusivity of this Plan.  Neither the adoption of this Plan by
the Board nor its submission to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board or the
Committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards that do not qualify under
Code Section 162(m).

(i)           Fractional Shares.  No fractional Shares shall be issued or
delivered pursuant to this Plan or any Award.  The Plan Administrator shall
determine whether cash, other Awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

(j)           Governing Law.  The validity, construction and effect of this
Plan, any rules and regulations under this Plan, and any Award Agreement shall
be determined in accordance with the laws of the State of Nevada without giving
effect to principles of conflicts of laws, and applicable federal law.

(k)          Plan Effective Date and Shareholder Approval; Termination of
Plan.  This Plan shall become effective on the Effective Date, subject to
subsequent approval within twelve months of its adoption by the Board by
shareholders of the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Applicable Laws.  Awards may be
granted prior and subject to shareholder approval, but may not be exercised or
otherwise settled in the event shareholder approval is not obtained.  This Plan
shall terminate no later than ten years from the date of the later of (i) the
Effective Date and (ii) the date an increase in the number of shares reserved
for issuance under this Plan is approved by the Board (so long as such increase
is also subsequently approved by the shareholders).
 
 
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