Exhibit 10.1

ORSUS XELENT TECHNOLOGIES, INC.
2007 OMNIBUS LONG-TERM INCENTIVE PLAN
 
Orsus Xelent Technologies, Inc., a Delaware corporation (the “Company”), sets
forth herein the terms of its 2007 Omnibus Long-Term Incentive Plan (the
“Plan”), as follows:
 

1.            
PURPOSE

 
The Plan is intended to enhance the Company’s and its Affiliates’ (as defined
herein) ability to attract and retain highly qualified officers, directors, key
employees and other persons, and to motivate such officers, directors, key
employees and other persons to serve the Company and its Affiliates and to
expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company.
To this end, the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units, unrestricted
stock and cash awards. Any of these awards may, but need not, be made as
performance incentives to reward attainment of annual or long-term performance
goals in accordance with the terms hereof. Stock options granted under the Plan
may be non-qualified stock options or incentive stock options, as provided
herein.
 

2.            
DEFINITIONS

 
For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:
 
2.1.  “Affiliate” means any company or other trade or business that “controls,”
is “controlled by” or is “under common control” with the Company within the
meaning of Rule 405 of Regulation C under the Securities Act, including, without
limitation, any Subsidiary.
 
2.2.  “Annual Incentive Award” means an Award made subject to attainment of
performance goals (as described in Section 13) over a performance period of a
duration as specified by the Committee.
 
2.3.  “Award” means a grant of an Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Unrestricted Stock, or cash award under the Plan.
 
2.4.  “Award Agreement” means a written agreement between the Company and a
Grantee, or notice from the Company to a Grantee, that evidences and sets out
the terms and conditions of an Award.
 
2.5.   “Board” means the Board of Directors of the Company.
 

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2.6.  “Cause” means, as determined by the Committee and unless otherwise
provided in an applicable agreement with the Company or an Affiliate at or
before the Grant Date: (i) engaging in any act, omission or misconduct that is
injurious to the Company or its Affiliates; (ii) gross negligence or willful
misconduct in connection with the performance of duties; (iii) conviction of a
criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement
or misappropriation of funds or property of the Company or an Affiliate;
(v) material breach of any term of any employment, consulting or other services,
confidentiality, intellectual property or non-competition agreements, if any,
between the Service Provider and the Company or an Affiliate; (vi) the entry of
an order duly issued by any regulatory agency (including federal, state and
local regulatory agencies and self-regulatory bodies) having jurisdiction over
the Company or an Affiliate requiring the removal from any office held by the
Service Provider with the Company or prohibiting a Service Provider from
participating in the business or affairs of the Company or any Affiliate; or
(vii) the revocation or threatened revocation of any of the Company’s or an
Affiliate’s government licenses, permits or approvals, which is primarily due to
the Service Provider’s action or inaction and such revocation or threatened
revocation would be alleviated or mitigated in any material respect by the
termination of the Service Provider’s Services.
 
2.7.  “Change in Control” shall have the meaning set forth in Section 15.2.
 
2.8.  “Code” means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
 
2.9.  “Committee” means the Compensation Committee of the Board, or such other
committee as determined by the Board. The Compensation Committee of the Board
may, in its discretion, designate a subcommittee of its members to serve as the
Committee (to the extent the Board has not designated another person, committee
or entity as the Committee) or to cause the Committee to (i) consist solely of
persons who are “Nonemployee Directors” as defined in Rule 16b-3 issued under
the Exchange Act, (ii) consist solely of persons who are Outside Directors, or
(iii) satisfy the applicable requirements of any stock exchange on which the
Common Stock may then be listed.
 
2.10.  “Company” means Orsus Xelent Technologies, Inc., a Delaware corporation,
or any successor corporation.
 
2.11.  “Common Stock” or “Stock” means share of common stock of the Company, par
value $0.001 per share.
 
2.12.  “Covered Employee” means a Grantee who is a “covered employee” within the
meaning of Section 162(m)(3) of the Code, as qualified by Section 13.4 herein.
 
2.13.  “Disability” means the Grantee is unable to perform each of the essential
duties of such Grantee’s position by reason of a medically determinable physical
or mental impairment which is potentially permanent in character or which can be
expected to last for a continuous period of not less than 12 months; provided,
however, that, with respect to rules regarding expiration of an Incentive Stock
Option following termination of the Grantee’s Service, Disability has the
meaning as set forth in Section 22(e)(3) of the Code.
 
2.14.  “Effective Date” means the date set forth in Section 16.10 herein.
 
2.15.  “Exchange Act” means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
 
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2.16.  “Fair Market Value” of a share of Common Stock as of a particular date
shall mean (i) the closing sale price reported for a share of Common Stock on
such date on the national securities exchange or national market system on which
such stock is principally traded, or if such date is not a trading day, the
trading day immediately preceding such date on which a sale was reported, or
(ii) if the shares of Common Stock are not then listed on a national securities
exchange or national market system, or the value of such shares is not otherwise
determinable, such value as determined by the Board in good faith in its sole
discretion (but in any event not less than fair market value within the meaning
of Section 409A).
 
2.17.  “Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
applicable individual, any person sharing the applicable individual’s household
(other than a tenant or employee), a trust in which any one or more of these
persons have more than fifty percent of the beneficial interest, a foundation in
which any one or more of these persons (or the applicable individual) control
the management of assets, and any other entity in which one or more of these
persons (or the applicable individual) own more than fifty percent of the voting
interests.
 
2.18.  “Grant Date” means, as determined by the Committee, the latest to occur
of (i) the date as of which the Committee approves an Award, (ii) the date on
which the recipient of an Award first becomes eligible to receive an Award under
Section 6 hereof, or (iii) such other date as may be specified by the Committee
in the Award Agreement.
 
2.19.  “Grantee” means a person who receives or holds an Award under the Plan.
 
2.20.   “Incentive Stock Option” means an “incentive stock option” within the
meaning of Section 422 of the Code, or the corresponding provision of any
subsequently enacted tax statute, as amended from time to time.
 
2.21.  “Non-Qualified Stock Option” means an Option that is not an Incentive
Stock Option.
 
2.22.  “Option” means an option to purchase one or more shares of Stock pursuant
to the Plan.
 
2.23.  “Option Price” means the exercise price for each share of Stock subject
to an Option.
 
2.24.  “Outside Director” means a member of the Board who is not an officer or
employee of the Company or an Affiliate, determined in accordance with the
requirements of Section 162(m) of the Code.
 
2.25.   “Performance Award” means an Award made subject to the attainment of
performance goals (as described in Section 13) over a performance period of up
to ten (10) years.
 
2.26.  “Plan” means this Orsus Xelent Technologies, Inc. 2007 Omnibus Long-Term
Incentive Plan.
 
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2.27.  “Purchase Price” means the purchase price for each share of Stock
pursuant to a grant of Restricted Stock or Unrestricted Stock.
 
2.28.  “Reporting Person” means a person who is required to file reports under
Section 16(a) of the Exchange Act.
 
2.29.  “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant
to Section 10 hereof.
 
2.30.  “Restricted Stock Unit” means a bookkeeping entry representing the
equivalent of shares of Stock, awarded to a Grantee pursuant to Section 10
hereof.
 
2.31.  “SAR Exercise Price” means the per share exercise price of a SAR granted
to a Grantee under Section 9 hereof.
 
2.32.  “Section 409A” shall mean Section 409A of the Code and all formal
guidance and regulations promulgated thereunder.
 
2.33.  “Securities Act” means the Securities Act of 1933, as now in effect or as
hereafter amended.
 
2.34.  “Separation from Service” means a termination of Service by a Service
Provider, as determined by the Committee, which determination shall be final,
binding and conclusive; provided if any Award governed by Section 409A is to be
distributed on a Separation from Service, then the definition of Separation from
Service for such purposes shall comply with the definition provided in
Section 409A.
 
2.35.  “Service” means service as a Service Provider to the Company or an
Affiliate. Unless otherwise stated in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in interrupted or
terminated Service, so long as such Grantee continues to be a Service Provider
to the Company or an Affiliate.
 
2.36.   “Service Provider” means an employee, officer or director of the Company
or an Affiliate, or a consultant or adviser currently providing services to the
Company or an Affiliate.
 
2.37.  “Stock Appreciation Right” or “SAR” means a right granted to a Grantee
under Section 9 hereof.
 
2.38.   “Subsidiary” means any “subsidiary corporation” of the Company within
the meaning of Section 424(f) of the Code.
 
2.39.  “Termination Date” means the date upon which an Option shall terminate or
expire, as set forth in Section 8.3 hereof.
 
2.40.  “Ten Percent Stockholder” means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Company, its parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of the Code shall be
applied.
 
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2.41.  “Unrestricted Stock” means an Award pursuant to Section 11 hereof.
 

3.            
ADMINISTRATION OF THE PLAN

 
3.1.  General.
 
The Committee shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company’s certificate of
incorporation and bylaws and applicable law. The Committee shall have full power
and authority to take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Committee deems to be necessary or appropriate to the
administration of the Plan. The interpretation and construction by the Committee
of any provision of the Plan, any Award or any Award Agreement shall be final,
binding and conclusive. Without limitation, the Committee shall have full and
final authority, subject to the other terms and conditions of the Plan, to:
 
(i) designate Grantees;
 
(ii) determine the type or types of Awards to be made to a Grantee;
 
(iii) determine the number of shares of Stock to be subject to an Award;
 
(iv) establish the terms and conditions of each Award (including, but not
limited to, the Option Price of any Option, the nature and duration of any
restriction or condition (or provision for lapse thereof) relating to the
vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock
subject thereto, and any terms or conditions that may be necessary to qualify
Options as Incentive Stock Options);
 
(v) prescribe the form of each Award Agreement; and
 
(vi) amend, modify, or supplement the terms of any outstanding Award including
the authority, in order to effectuate the purposes of the Plan, to modify Awards
to foreign nationals or individuals who are employed outside the United States
to recognize differences in local law, tax policy, or custom.
 
Notwithstanding the foregoing, no amendment or modification may be made to an
outstanding Option or SAR that (i)  causes the Option or SAR to become subject
to Section 409A, (ii) reduces the Option Price or SAR Exercise Price, either by
lowering the Option Price or SAR Exercise Price or by canceling the outstanding
Option or SAR and granting a replacement Option or SAR with a lower Option Price
or SAR Exercise Price or (iii) would be treated as a repricing under the rules
of the exchange upon which the Company’s Stock trades, without, with respect to
item (i), the Grantee’s written prior approval, and with respect to items (ii)
and (iii), without the approval of the stockholders of the Company, provided,
that, appropriate adjustments may be made to outstanding Options and SARs
pursuant to Section 15.
 
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The Company may retain the right in an Award Agreement to cause a forfeiture of
the gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any employment agreement,
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee. Furthermore, the Company may
annul an Award if the Grantee is terminated for Cause as defined in the
applicable Award Agreement or the Plan, as applicable. The grant of any Award
may be contingent upon the Grantee executing the appropriate Award Agreement.
 
3.2.  Deferral Arrangement.
 
The Committee may permit or require the deferral of any Award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish and in accordance with Section 409A, which may include provisions
for the payment or crediting of interest or dividend equivalents, including
converting such credits into deferred Stock units.
 
3.3.  No Liability.
 
No member of the Board or of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any Award or Award
Agreement.
 
3.4.  Book Entry.
 
Notwithstanding any other provision of this Plan to the contrary, the Company
may elect to satisfy any requirement under this Plan for the delivery of stock
certificates through the use of book-entry.
 

4.            
STOCK SUBJECT TO THE PLAN

 
Subject to adjustment as provided in Section 15 hereof, the maximum number of
shares of Stock available for issuance under the Plan shall be 4,500,000. All
such shares of Stock available for issuance under the Plan shall be available
for issuance pursuant to Incentive Stock Options. Stock issued or to be issued
under the Plan shall be authorized but unissued shares; or, to the extent
permitted by applicable law, issued shares that have been reacquired by the
Company. The maximum number of Common Stock that will be awarded to any one
Grantee during any calendar year shall not exceed 675,000.
 
The Committee may adopt reasonable procedures for making adjustments in
accordance with Section 15. If the Option Price of any Option granted under the
Plan, or if pursuant to Section 16.3 the withholding obligation of any Grantee
with respect to an Option or other Award, is satisfied by tendering shares of
Stock to the Company (by either actual delivery or by attestation) or by
withholding shares of Stock, the number of shares of Stock issued net of the
shares of Stock tendered or withheld shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan. To the extent that an Award under the Plan is canceled, expired,
forfeited, settled in cash, settled by issuance of fewer shares than the number
underlying the Award, or otherwise terminated without delivery of shares to the
Grantee, the shares retained by or returned to the Company will be available
under the Plan; and shares that are withheld from such an Award or separately
surrendered by the Grantee in payment of any exercise price or taxes relating to
such an Award shall be deemed to constitute shares not delivered to the Grantee
and will be available under the Plan. In addition, in the case of any Award
granted in assumption of or in substitution for an award of a company or
business acquired by the Company or a Subsidiary or Affiliate or with which the
Company or a Subsidiary or Affiliate combines, shares issued or issuable in
connection with such substitute Award shall not be counted against the number of
shares reserved under the Plan.
 
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5.            
EFFECTIVE DATE, DURATION AND AMENDMENTS

 
5.1.  Term.
 
The Plan shall be effective as of the Effective Date and shall terminate on the
ten (10) year anniversary of the Effective Date, and may be terminated on any
earlier date as provided in Section 5.2.
 
5.2.  Amendment and Termination of the Plan.
 
The Board may, at any time and from time to time, amend, suspend, or terminate
the Plan as to any Awards which have not been made. An amendment shall be
contingent on approval of the Company’s stockholders to the extent stated by the
Board, required by applicable law or required by applicable stock exchange
listing requirements. No Awards shall be made after termination of the Plan. No
amendment, suspension, or termination of the Plan shall, without the consent of
the Grantee, impair rights or obligations under any Award theretofore awarded.
 

6.            
AWARD ELIGIBILITY AND LIMITATIONS

 
6.1.  Service Providers and Other Persons.
 
Subject to this Section 6, Awards may be made to any Service Provider, including
any Service Provider who is an officer or director of the Company or of any
Affiliate, as the Committee shall determine and designate from time to time in
its discretion.
 
6.2.  Successive Awards.
 
An eligible person may receive more than one Award, subject to such restrictions
as are provided herein.
 
6.3.  Stand-Alone, Additional, Tandem, and Substitute Awards.
 
Awards may, in the discretion of the Committee, 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 Affiliate, or any
business entity to be acquired by the Company or an Affiliate, or any other
right of a Grantee to receive payment from the Company or any Affiliate. 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, the
Committee shall have the right to require the surrender of such other Award in
consideration for the grant of the new Award. The Board shall have the right, in
its discretion, to make Awards in substitution or exchange for any other award
under another plan of the Company, any Affiliate, or any business entity to be
acquired by the Company or an Affiliate. 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 Affiliate, in which the value of Stock subject to
the Award is equivalent in value to the cash compensation (for example,
Restricted Stock Units or Restricted Stock).
 
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7.            
AWARD AGREEMENT

 
Each Award shall be evidenced by an Award Agreement, in such form or forms as
the Committee shall from time to time determine. Without limiting the foregoing,
an Award Agreement may be provided in the form of a notice which provides that
acceptance of the Award constitutes acceptance of all terms of the Plan and the
notice. Award Agreements granted from time to time or at the same time need not
contain similar provisions but shall be consistent with the terms of the Plan.
Each Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-Qualified Stock Options or Incentive Stock
Options, and in the absence of such specification such options shall be deemed
Non-Qualified Stock Options.
 

8.            
TERMS AND CONDITIONS OF OPTIONS

 
8.1.  Option Price.
 
The Option Price of each Option shall be fixed by the Committee and stated in
the related Award Agreement. The Option Price of each Incentive Stock Option
shall be at least the Fair Market Value of a share of Stock on the Grant Date;
provided, however, that (i) in the event that a Grantee is a Ten Percent
Stockholder as of the Grant Date, the Option Price of an Option granted to such
Grantee that is intended to be an Incentive Stock Option shall be not less than
110 percent of the Fair Market Value of a share of Stock on the Grant Date, and
(ii) with respect to Awards made in substitution for or in exchange for awards
made by an entity acquired by the Company or an Affiliate, the Option Price does
not need to be at least the Fair Market Value on the Grant Date. In no case
shall the Option Price of any Option be less than the par value of a share of
Stock.
 
8.2.  Vesting.
 
Subject to Section 8.3 hereof, each Option shall become exercisable at such
times and under such conditions (including without limitation performance
requirements) as shall be determined by the Committee and stated in the Award
Agreement. For purposes of this Section 8.2, fractional numbers of shares of
Stock subject to an Option shall be rounded down to the next nearest whole
number.
 
8.3.  Term.
 
Each Option shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten years from the Grant Date, or
under such circumstances and on such date prior thereto as is set forth in the
Plan or as may be fixed by the Committee and stated in the related Award
Agreement (the “Termination Date”); provided, however, that in the event that
the Grantee is a Ten Percent Stockholder, an Option granted to such Grantee that
is intended to be an Incentive Stock Option at the Grant Date shall not be
exercisable after the expiration of five years from its Grant Date.
 
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8.4.  Separation from Service.
 
Except as otherwise provided in an Award Agreement, if a Grantee’s employment
with or service to the Company or Affiliate terminates for any reason other than
Cause, (i) Op-tions granted to such Grantee, to the extent that they are
exercisable at the time of such termination, shall remain exercisable for a
period of not more than 90 days after such termination (one year in the case of
termination by reason of death or Disability), on which date they shall expire,
and (ii) Options granted to such Grantee, to the extent that they were not
exercisable at the time of such termi-nation, shall expire on the date of such
termina-tion. In the event of the termination of a Grantee’s employment or
service for Cause, all out-standing Options granted to such Grantee shall expire
on the date of such termina-tion. Not-with-standing the forego-ing, no Option
shall be exercis-able after the expiration of its term.
 
8.5.  Limitations on Exercise of Option.
 
Notwithstanding any other provision of the Plan, in no event may any Option be
exercised, in whole or in part, (i) prior to the date the Plan is approved by
the stockholders of the Company as provided herein or (ii) after the occurrence
of an event referred to in Section 15 hereof which results in termination of the
Option.
 
8.6.  Method of Exercise.
 
An Option that is exercisable may be exercised by the Grantee’s delivery to the
Company of written notice of exercise on any business day, at the Company’s
principal office, on the form specified by the Company. Such notice shall
specify the number of shares of Stock with respect to which the Option is being
exercised and shall be accompanied by payment in full of the Option Price of the
shares for which the Option is being exercised plus the amount (if any) of
federal and/or other taxes which the Company may, in its judgment, be required
to withhold with respect to an Award. Except as otherwise provided by the
Committee, payments hereunder shall be made in cash or cash equivalents
acceptable to the Company. Notwithstanding anything contained herein to the
contrary, the Committee may, solely in its discretion, approve payment in whole
or in part by an alternative method, including (i) by means of any cashless
exercise procedure approved by the Committee, (ii) in the form of unrestricted
shares of Stock already owned by the Grantee on the date of surrender to the
extent the shares of Stock have a Fair Market Value on the date of surrender
equal to the aggregate Option Price of the shares as to which such Option shall
be exercised, provided that, in the case of an Incentive Stock Option, the right
to make payment in the form of already owned shares of Stock may be authorized
only at the time of grant, or (iii) any combination of the foregoing.
 
8.7.  Rights of Holders of Options.
 
Unless otherwise stated in the related Award Agreement, an individual holding or
exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock ) until the shares of Stock covered thereby are fully
paid and issued to him. Except as provided in Section 15 hereof, no adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to the date of such issuance.
 
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8.8.  Delivery of Stock Certificates.
 
Promptly after the exercise of an Option by a Grantee and the payment in full of
the Option Price, such Grantee shall be entitled to the issuance of a stock
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option.
 
8.9.  Transferability of Options.
 
Except as provided in Section 8.10, during the lifetime of a Grantee, only the
Grantee (or, in the event of legal incapacity or incompetence, the Grantee’s
guardian or legal representative) may exercise an Option. Except as provided in
Section 8.10, no Option shall be assignable or transferable by the Grantee to
whom it is granted, other than by will or the laws of descent and distribution.
 
8.10.  Family Transfers.
 
If authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of an Option which is not an Incentive Stock Option to any
Family Member. For the purpose of this Section 8.10, a “not for value” transfer
is a transfer which is (i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a transfer to an entity
in which more than fifty percent of the voting interests are owned by Family
Members (or the Grantee) in exchange for an interest in that entity. Following a
transfer under this Section 8.10, any such Option shall continue to be subject
to the same terms and conditions as were applicable immediately prior to
transfer. Subsequent transfers of transferred Options are prohibited except to
Family Members of the original Grantee in accordance with this Section 8.10 or
by will or the laws of descent and distribution. Notwithstanding the foregoing,
the Committee may also provide that Options may be transferred to persons other
than Family Members. The events of termination of Service of Section 8.4 hereof
shall continue to be applied with respect to the original Grantee, following
which the Option shall be exercisable by the transferee only to the extent, and
for the periods specified, in Section 8.4.
 
8.11.  Limitations on Incentive Stock Options.
 
An Option shall constitute an Incentive Stock Option only (i) if the Grantee of
such Option is an employee of the Company or any Subsidiary of the Company;
(ii) to the extent specifically provided in the related Award Agreement; and
(iii) to the extent that the aggregate Fair Market Value (determined at the time
the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation
shall be applied by taking Options into account in the order in which they were
granted.
 
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9.            
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

 
9.1.  Right to Payment.
 
A SAR shall confer on the Grantee a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one share of Stock on the date of
exercise over (ii) the SAR Exercise Price, as determined by the Committee. The
Award Agreement for an SAR shall specify the SAR Exercise Price, which shall be
fixed on the Grant Date. SARs may be granted alone or in conjunction with all or
part of an Option or at any subsequent time during the term of such Option or in
conjunction with all or part of any other Award. A SAR granted in tandem with an
outstanding Option following the Grant Date of such Option may have a grant
price that is equal to the Option Price.
 
9.2.  Other Terms.
 
The Committee shall determine at the Grant Date or thereafter, the time or times
at which and the circumstances under which a SAR 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 SARs shall cease to be or become
exercisable following termination of Service or upon other conditions, the
method of exercise, whether or not a SAR shall be in tandem or in combination
with any other Award, and any other terms and conditions of any SAR.
 
9.3.  Term of SARs. The term of a SAR granted under the Plan shall be determined
by the Committee, in its sole discretion; provided, however, that such term
shall not exceed ten years.
 
9.4.  Payment of SAR Amount. Upon exercise of a SAR, a Grantee shall be entitled
to receive payment from the Company in an amount determined by multiplying:
 
(i) the difference between the Fair Market Value of a Share on the date of
exercise over the SAR Exercise Price; by

(ii) the number of Shares with respect to which the SAR is exercised.

SARs may be settled in cash or Stock, as determined by the Committee and set
forth in the Award Agreement.
 

10.          
TERMS AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 
10.1.  Restrictions.
 
At the time of grant, the Committee may, in its sole discretion, establish a
period of time (a “restricted period”) and any additional restrictions including
the satisfaction of corporate or individual performance objectives applicable to
an Award of Restricted Stock or Restricted Stock Units in accordance with
Section 13.1 and 13.2. Each Award of Restricted Stock or Restricted Stock Units
may be subject to a different restricted period and additional restrictions.
Neither Restricted Stock nor Restricted Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the restricted
period or prior to the satisfaction of any other applicable restrictions.
 
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10.2.  Restricted Stock Certificates.
 
The Company shall issue stock, in the name of each Grantee to whom Restricted
Stock has been granted, stock certificates or other evidence of ownership
representing the total number of shares of Restricted Stock granted to the
Grantee, as soon as reasonably practicable after the Grant Date. The Committee
may provide in an Award Agreement that either (i) the Secretary of the Company
shall hold such certificates for the Grantee’s benefit until such time as the
Restricted Stock is forfeited to the Company or the restrictions lapse, or
(ii) such certificates shall be delivered to the Grantee, provided, however,
that such certificates shall bear a legend or legends that comply with the
applicable securities laws and regulations and makes appropriate reference to
the restrictions imposed under the Plan and the Award Agreement.
 
10.3.  Rights of Holders of Restricted Stock.
 
Unless the Committee otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Stock and the right to
receive any dividends declared or paid with respect to such Stock. The Committee
may provide that any dividends paid on Restricted Stock must be reinvested in
shares of Stock, which may or may not be subject to the same restrictions
applicable to such Restricted Stock. All distributions, if any, received by a
Grantee with respect to Restricted Stock as a result of any stock split, stock
dividend, combination of shares, or other similar transaction shall be subject
to the restrictions applicable to the original Award.
 
10.4.  Rights of Holders of Restricted Stock Units.
 

10.4.1.    
Settlement of Restricted Stock Units.

 
Restricted Stock Units may be settled in cash or Stock, as determined by the
Committee and set forth in the Award Agreement. The Award Agreement shall also
set forth whether the Restricted Stock Units shall be settled (i) within the
time period specified in Section 16.9.1 for short term deferrals or
(ii) otherwise within the requirements of Section 409A, in which case the Award
Agreement shall specify upon which events such Restricted Stock Units shall be
settled.
 

10.4.2.    
Voting and Dividend Rights.

 
Holders of Restricted Stock Units shall have no rights as stockholders of the
Company. The Committee may provide in an Award Agreement that the holder of such
Restricted Stock Units shall be entitled to receive, upon the Company’s payment
of a cash dividend on its outstanding Stock, a cash payment for each Restricted
Stock Unit held equal to the per-share dividend paid on the Stock, which may be
deemed reinvested in additional Restricted Stock Units at a price per unit equal
to the Fair Market Value of a share of Stock on the date that such dividend is
paid to shareholders.
 
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10.4.3.    
Creditor’s Rights.

 
A holder of Restricted Stock Units shall have no rights other than those of a
general creditor of the Company. Restricted Stock Units represent an unfunded
and unsecured obligation of the Company, subject to the terms and conditions of
the applicable Award Agreement.
 
10.5.  Termination of Service.
 
Unless the Committee otherwise provides in an Award Agreement or in writing
after the Award Agreement is issued, upon the termination of a Grantee’s
Service, any Restricted Stock or Restricted Stock Units held by such Grantee
that have not vested, or with respect to which all applicable restrictions and
conditions have not lapsed, shall immediately be deemed forfeited, and the
Grantee shall have no further rights with respect to such Award.
 
10.6.  Purchase of Restricted Stock.
 
The Grantee shall be required, to the extent required by applicable law, to
purchase the Restricted Stock from the Company at a Purchase Price equal to the
greater of (i) the aggregate par value of the shares of Stock represented by
such Restricted Stock or (ii) the Purchase Price, if any, specified in the
related Award Agreement. If specified in the Award Agreement, the Purchase Price
may be deemed paid by Services already rendered. The Purchase Price shall be
payable in a form described in Section 12 or, in the discretion of the
Committee, in consideration for past Services rendered.
 
10.7.  Delivery of Stock.
 
Upon the expiration or termination of any restricted period and the satisfaction
of any other conditions prescribed by the Committee, the restrictions applicable
to shares of Restricted Stock or Restricted Stock Units settled in Stock shall
lapse, and, unless otherwise provided in the Award Agreement, a stock
certificate for such shares shall be delivered, free of all such restrictions,
to the Grantee or the Grantee’s beneficiary or estate, as the case may be.
 

11.          
TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS

 
The Committee may, in its sole discretion, grant (or sell at par value or such
other higher purchase price determined by the Committee) an Award of
Unrestricted Stock to any Grantee pursuant to which such Grantee may receive
shares of Stock free of any restrictions (“Unrestricted Stock”) under the Plan.
Awards of Unrestricted Stock may be granted or sold as described in the
preceding sentence in respect of past Services rendered and other valid
consideration, or in lieu of, or in addition to, any cash compensation due to
such Grantee. Unless otherwise provided by the Committee, Awards of Unrestricted
Stock shall be paid within the time period specified in Section 16.9.1 for
short-term deferrals.
 
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12.          
FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

 
12.1.  General Rule.
 
Payment of the Option Price for the shares purchased pursuant to the exercise of
an Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company, except as provided in this
Section 12.
 
12.2.  Surrender of Stock.
 
To the extent the Award Agreement so provides, payment of the Option Price for
shares purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender to the Company of
shares of Stock, which shares shall be valued, for purposes of determining the
extent to which the Option Price or Purchase Price has been paid thereby, at
their Fair Market Value on the date of exercise or surrender.
 
12.3.  Cashless Exercise.
 
With respect to an Option only (and not with respect to Restricted Stock), to
the extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price may be made all or in part by delivery (on a form
acceptable to the Committee) of an irrevocable direction to a licensed
securities broker acceptable to the Company to sell shares of Stock and to
deliver all or part of the sales proceeds to the Company in payment of the
Option Price and any withholding taxes described in Section 16.3.
 
12.4.  Other Forms of Payment.
 
To the extent the Award Agreement so provides, payment of the Option Price or
the Purchase Price may be made in any other form that is consistent with
applicable laws, regulations and rules.
 

13.          
TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS

 
13.1.  Performance Conditions.
 
The right of a Grantee to exercise or receive a grant or settlement of any
Award, and the timing thereof, may be subject to such performance conditions as
may be specified by the Committee. The Committee may use such business criteria
and other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts
payable under any Award subject to performance conditions, except as limited
under Sections 13.2 hereof in the case of a Performance Award or Annual
Incentive Award intended to qualify under Code Section 162(m).
 
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13.2.       
Performance or Annual Incentive Awards Granted to Designated Covered Employees.

 
If and to the extent that the Committee determines that a Performance or Annual
Incentive Award to be granted to a Grantee who is designated by the Committee as
likely to be a Covered Employee should qualify as “performance-based
compensation” for purposes of Code Section 162(m), the grant, exercise and/or
settlement of such Performance or Annual Incentive Award shall be contingent
upon achievement of pre-established performance goals and other terms set forth
in this Section 13.2.
 

13.2.1.    
Performance Goals Generally.

 
The performance goals for such Performance or Annual Incentive Awards shall
consist of one or more business criteria and a targeted level or levels of
performance with respect to each of such criteria, as specified by the Committee
consistent with this Section 13.2. 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.” The Committee may determine that such Performance or
Annual Incentive Awards shall be granted, exercised and/or settled upon
achievement of any one performance goal or that two or more of the performance
goals must be achieved as a condition to grant, exercise and/or settlement of
such Performance or Annual Incentive Awards. Performance goals may differ for
Performance or Annual Incentive Awards granted to any one Grantee or to
different Grantees.
 

13.2.2.    
Business Criteria.

 
One or more of the following business criteria for the Company, on a
consolidated basis, and/or specified subsidiaries or business units of the
Company (except with respect to the total stockholder return and earnings per
share criteria), shall be used exclusively by the Committee in establishing
performance goals for such Performance or Annual Incentive Awards: (i) total
stockholder return; (ii) such total stockholder return as compared to total
return (on a comparable basis) of a publicly available index such as, but not
limited to, the Standard & Poor’s 500 Stock Index; (iii) net income; (iv) pretax
earnings; (v) earnings before interest expense, taxes, depreciation and
amortization; (vi) pretax operating earnings after interest expense and before
bonuses, service fees, and extraordinary or special items; (vii) operating
margin; (viii) earnings per share; (ix) return on equity; (x) return on capital;
(xi) return on investment; (xii) operating earnings; (xiii) working capital;
(xiv) ratio of debt to stockholders’ equity and (xv) revenue.
 

13.2.3.    
Timing for Establishing Performance Goals.

 
Performance goals shall be established not later than 90 days after the
beginning of any performance period applicable to such Performance or Annual
Incentive Awards, or at such other date as may be required or permitted for
“performance-based compensation” under Code Section 162(m).
 
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13.2.4.    
Settlement of Performance or Annual Incentive Awards; Other Terms.

 
Settlement of such Performance or Annual Incentive Awards shall be in cash,
Stock, other Awards or other property, in the discretion of the Committee. The
Committee may, in its discretion, reduce the amount of a settlement otherwise to
be made in connection with such Performance or Annual Incentive Awards. The
Committee shall specify the circumstances in which such Performance or Annual
Incentive Awards shall be paid or forfeited in the event of termination of
Service by the Grantee prior to the end of a performance period or settlement of
Performance Awards.
 
13.3.  Written Determinations.
 
All determinations by the Committee as to the establishment of performance
goals, the amount of any Performance Award pool or potential individual
Performance Awards and as to the achievement of performance goals relating to
Performance Awards, and the amount of any Annual Incentive Award pool or
potential individual Annual Incentive Awards and the amount of final Annual
Incentive Awards, shall be made in writing in the case of any Award intended to
qualify under Code Section 162(m). To the extent permitted by Code
Section 162(m), the Committee may delegate any responsibility relating to such
Performance Awards or Annual Incentive Awards.
 
13.4.  Status of Section 13.2 Awards Under Code Section 162(m).
 
It is the intent of the Company that Performance Awards and Annual Incentive
Awards under Section 13.2 hereof granted to persons who are designated by the
Committee as likely to be Covered Employees within the meaning of Code
Section 162(m) and regulations thereunder shall, if so designated by the
Committee, constitute “qualified performance-based compensation” within the
meaning of Code Section 162(m) and regulations thereunder. Accordingly, the
terms of Section 13.2, including the definitions of Covered Employee and other
terms used therein, shall be interpreted in a manner consistent with Code
Section 162(m) and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot determine with certainty whether a given Grantee
will be a Covered Employee with respect to a fiscal year that has not yet been
completed, the term Covered Employee as used herein shall mean only a person
designated by the Committee, at the time of grant of Performance Awards or an
Annual Incentive Award, as likely to be a Covered Employee with respect to that
fiscal year. If any provision of the Plan or any agreement relating to such
Performance Awards or Annual Incentive Awards does not comply or is inconsistent
with the requirements of Code Section 162(m) or regulations thereunder, such
provision shall be construed or deemed amended to the extent necessary to
conform to such requirements.
 
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14.          
REQUIREMENTS OF LAW

 
14.1.  General.
 
The Company shall not be required to sell or issue any shares of Stock under any
Award if the sale or issuance of such shares would constitute a violation by the
Grantee, any other individual exercising an Option, or the Company of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance or purchase of
shares hereunder, no shares of Stock may be issued or sold to the Grantee or any
other individual exercising an Option pursuant to such Award unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Award. Specifically, in connection with the Securities Act, upon the exercise of
any Option or the delivery of any shares of Stock underlying an Award, unless a
registration statement under such Act is in effect with respect to the shares of
Stock covered by such Award, the Company shall not be required to sell or issue
such shares unless the Committee has received evidence satisfactory to it that
the Grantee or any other individual exercising an Option may acquire such shares
pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Committee shall be final, binding, and
conclusive. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an
Option or the issuance of shares of Stock pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until
the shares of Stock covered by such Option are registered or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction apply) shall be deemed conditioned upon the effectiveness
of such registration or the availability of such an exemption.
 
14.2.  Rule 16b-3.
 
During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards and
the exercise of Options granted hereunder will qualify for the exemption
provided by Rule 16b-3 under the Exchange Act. To the extent that any provision
of the Plan or action by the Board or Committee does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative to the extent
permitted by law and deemed advisable by the Board, and shall not affect the
validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the
Board may exercise its discretion to modify this Plan in any respect necessary
to satisfy the requirements of, or to take advantage of any features of, the
revised exemption or its replacement.
 
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15.          
EFFECT OF CHANGES IN CAPITALIZATION

 
15.1.  Changes in Stock.
 
If the number of outstanding shares of Stock is increased or decreased or the
shares of Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan shall be
adjusted proportionately and accordingly by the Company; provided that any such
adjustment shall comply with Section 409A. In addition, the number and kind of
shares for which Awards are outstanding shall be adjusted proportionately and
accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as
immediately before such event. Any such adjustment in outstanding Options or
SARs shall not change the aggregate Option Price or SAR Exercise Price payable
with respect to shares that are subject to the unexercised portion of an
outstanding Option or SAR, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price or SAR Exercise Price per share.
The conversion of any convertible securities of the Company shall not be treated
as an increase in shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (including an
extraordinary cash dividend but excluding a non-extraordinary dividend payable
in cash or in stock of the Company) without receipt of consideration by the
Company, the Company shall in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards and/or
(ii) the exercise price of outstanding Options and Stock Appreciation Rights to
reflect such distribution.
 
15.2.  Definition of Change in Control.
 
Unless an Award Agreement provides for a different meaning, a “Change in
Control” shall mean the occurrence of any of the following:
 
 
(i)
Any ‘person’ (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the ‘beneficial owner’ (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than fifty percent (50%)  of the total voting power represented by the Company’s
then-outstanding voting securities, provided, however, that a Change in Control
shall not be deemed to occur if an employee benefit plan (or a trust forming a
part thereof) maintained by the Company, directly or indirectly, becomes the
beneficial owner of more than fifty percent (50%) of the then-outstanding voting
securities of the Company after such acquisition;

 
 
(ii)
A majority of the members of the Board is replaced during any 12-month period
commencing on the Effective Date, by directors whose appointment or election is
not endorsed by a majority of the members of the Board prior to the date of the
appointment;

 
 
(iii)
The consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in (a) the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least fifty percent (50%) of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(b) the directors of the Company immediately prior thereto continuing to
represent at least fifty percent (50%) of the directors of the Company or such
surviving entity immediately after such merger or consolidation; or

 
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(iv)
The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets.

 
Notwithstanding the foregoing, if it is determined that an Award hereunder is
subject to the requirements of Section 409A, the Company will not be deemed to
have undergone a Change in Control unless the Company is deemed to have
undergone a change in control pursuant to the definition in Section 409A.
 
15.3.  Effect of Change in Control; Corporate Transactions
 
The Committee shall determine the effect of a Change in Control upon Awards, and
such effect may be set forth in the appropriate Award Agreement.  Unless an
Award Agreement explicitly provides otherwise, if the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company’s assets other than a transaction to merely
change the state of incorporation (a “Corporate Transaction”), the Committee or
the board of directors of any entity assuming the obligations of the Company
hereunder (the “Successor Board”), shall, as to outstanding Options and/or SARs,
either (i) make appropriate provision for the continuation of such Options
and/or SARs by substituting on an equitable basis for the Shares then subject to
such Options and/or SARs either the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) upon written notice
to the Grantees, provide that all Options and/or SARs must be exercised (either
to the extent then exercisable or, at the discretion of the Committee or, upon a
change of control of the Company, all Options and/or SARs being made fully
exercisable for purposes of this Section 15.3), within a specified number of
days of the date of such notice, at the end of which period the Options and/or
SARs shall terminate; or (iii) terminate all Options and/or SARs in exchange for
a cash payment equal to the excess of the Fair Market Value of the Shares
subject to such Options and/or SARs (either to the extent then exercisable or,
at the discretion of the Committee, all Options and/or SARs being made fully
exercisable for purposes of this Section 15.3) over the exercise price thereof.
 
Unless an Award Agreement explicitly provides otherwise, with respect to
outstanding grants of Restricted Stock, Restricted Stock Units and/or
Unrestricted Stock, the Committee or the Successor Board, shall either (i) make
appropriate provisions for the continuation of such grants of Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock by substituting on an equitable
basis for the Shares then subject to such Restricted Stock, Restricted Stock
Units and/or Unrestricted Stock either the consideration payable with respect to
the outstanding Shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity; or (ii) upon
written notice to the Grantees, provide that all grants of Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock must be accepted (to the extent
then subject to acceptance) within a specified number of days of the date of
such notice, at the end of which period the offer of the Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock shall terminate; or (iii)
terminate all grants of Restricted Stock, Restricted Stock Units and/or
Unrestricted Stock in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Restricted Stock, Restricted
Stock Units and/or Unrestricted Stock over the purchase price thereof, if any.
In addition, in the event of a Corporate Transaction, the Administrator may
waive any or all Company repurchase rights with respect to outstanding
Restricted Stock and/or Restricted Stock Units.
 
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15.4.  Reorganization Which Does Not Constitute a Change in Control.
 
If the Company undergoes any reorganization, merger, or consolidation of the
Company with one or more other entities which does not constitute a Change in
Control, any Option or SAR theretofore granted pursuant to the Plan shall
pertain to and apply to the securities to which a holder of the number of shares
of Stock subject to such Option or SAR would have been entitled immediately
following such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price or SAR Exercise Price per share so
that the aggregate Option Price or SAR Exercise Price thereafter shall be the
same as the aggregate Option Price or SAR Exercise Price of the shares remaining
subject to the Option or SAR immediately prior to such reorganization, merger,
or consolidation. Subject to any contrary language in an Award Agreement, any
restrictions applicable to such Award shall apply as well to any replacement
shares received by the Grantee as a result of the reorganization, merger or
consolidation.
 
15.5.  Adjustments.
 
Adjustments under this Section 15 related to shares of Stock or securities of
the Company shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or other securities
shall be issued pursuant to any such adjustment, and any fractions resulting
from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share.
 
15.6.  No Limitations on Company.
 
The making of Awards pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.
 

16.          
GENERAL PROVISIONS

 
16.1.  Disclaimer of Rights.
 
No provision in the Plan or in any Award Agreement shall be construed to confer
upon any individual the right to remain in the employ or service of the Company
or any Affiliate, or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the compensation or
other payments to any individual at any time, or to terminate any employment or
other relationship between any individual and the Company. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, no Award granted under the Plan shall
be affected by any change of duties or position of the Grantee, so long as such
Grantee continues to be a Service Provider, if applicable. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
Grantee or beneficiary under the terms of the Plan.
 
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16.2.  Nonexclusivity of the Plan.
 
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals), including, without limitation, the
granting of stock options as the Board in its discretion determines desirable.
 
16.3.  Withholding Taxes.
 
The Company or an Affiliate, as the case may be, shall have the right to deduct
from payments of any kind otherwise due to a Grantee any federal, state, or
local taxes of any kind required by law to be withheld (i) with respect to the
vesting of or other lapse of restrictions applicable to an Award, (ii) upon the
issuance of any shares of Stock upon the exercise of an Option, or
(iii) pursuant to an Award. At the time of such vesting, lapse, or exercise, the
Grantee shall pay to the Company or the Affiliate, as the case may be, any
amount that the Company or the Affiliate may reasonably determine to be
necessary to satisfy such withholding obligation. Subject to the prior approval
of the Company or the Affiliate, which may be withheld by the Company or the
Affiliate, as the case may be, in its sole discretion, the Grantee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company or the
Affiliate to withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Affiliate shares of Stock already owned
by the Grantee. The shares of Stock so delivered or withheld shall have an
aggregate Fair Market Value equal to such withholding obligations. The Fair
Market Value of the shares of Stock used to satisfy such withholding obligation
shall be determined by the Company or the Affiliate as of the date that the
amount of tax to be withheld is to be determined. A Grantee who has made an
election pursuant to this Section 16.3 may satisfy his or her withholding
obligation only with shares of Stock that are not subject to any repurchase,
forfeiture, unfulfilled vesting, or other similar requirements.
 
16.4.  Captions.
 
The use of captions in this Plan or any Award Agreement is for the convenience
of reference only and shall not affect the meaning of any provision of the Plan
or any Award Agreement.
 
16.5.  Other Provisions.
 
Each Award Agreement may contain such other terms and conditions not
inconsistent with the Plan as may be determined by the Committee, in its sole
discretion.
 
16.6.  Number and Gender.
 
With respect to words used in this Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, etc., as
the context requires.
 
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16.7.  Severability.
 
If any provision of the Plan or any Award Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.
 
16.8.  Governing Law.
 
The validity and construction of this Plan and the instruments evidencing the
Awards hereunder shall be governed by the laws of the State of Delaware, without
regard to any choice of law principles thereof or of any other jurisdiction.
 
16.9.  Section 409A.
 

16.9.1.    
Short-Term Deferrals.

 
For each Award intended to comply with the short-term deferral exception
provided for under Section 409A, the related Award Agreement shall provide that
such Award shall be paid out by the later of (i) the 15th day of the third month
following the Grantee’s first taxable year in which the Award is no longer
subject to a substantial risk of forfeiture or (ii) the 15th day of the third
month following the end of the Company’s first taxable year in which the Award
is no longer subject to a substantial risk of forfeiture.
 

16.9.2.    
Adjustments.

 
To the extent that the Board determines that a Grantee would be subject to the
additional 20% tax imposed on certain deferred compensation arrangements
pursuant to Section 409A as a result of any provision of any Award, to the
extent permitted by Section 409A, such provision shall be deemed amended to the
minimum extent necessary to avoid application of such additional tax. The Board
shall determine the nature and scope of such amendment.
 
16.10.  Stockholder Approval; Effective Date of Plan.
 
The Plan shall be effective as of the date of its approval by the Board (the
"Effective Date"). Any Option that is designated as an Incentive Stock Option
shall be a Non-Qualified Stock Option if the Plan is not approved by the
shareholders of the Company within twelve (12) months after the Effective Date
of the Plan. No award that is intended to qualify as performance-based
compensation within the meaning of section 162(m) of the Code shall be effective
unless and until the Plan is approved by the stockholders of the Company.
 
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