EXHIBIT 10.11

AMENDED AND RESTATED
AS ADOPTED BY IONATRON, INC’S
STOCKHOLDERS ON SEPTEMBER 10, 2007
 
IONATRON, INC.
 
2007 STOCK INCENTIVE PLAN
 
Section 1. Purposes; Definitions.

 
The purpose of the Ionatron, Inc. 2007 Stock Incentive Plan is to enable
Ionatron, Inc. to offer to those of its employees and to the employees of its
Subsidiaries and other persons who are expected to contribute to the success of
the Company, long term performance-based stock and/or other equity interests in
the Company, thereby enhancing their ability to attract, retain and reward such
key employees or other persons, and to increase the mutuality of interests
between those employees or other persons and the stockholders of Ionatron, Inc.
 
For purposes of the Plan, the following terms shall be defined as set forth
below:
 

(a)
"Board" means the Board of Directors of Ionatron, Inc.

 

(b)
"Cause" shall have the meaning ascribed thereto in Section 5(b)(ix) below.

 

(c)
"Change of Control" shall have the meaning ascribed thereto in Section 11 below.

 

(d)
"Code" means the Internal Revenue Code of 1986, as amended from time to time and
any successor thereto.

 

(e)
"Committee" means any committee of the Board, which the Board may designate.

 

(f)
"Company" means Ionatron, Inc., a corporation organized under the laws of the
State of Delaware.

 

(g)
“Covered Employee” shall mean any employee of the Corporation or any of its
Subsidiaries who is deemed to be a “covered employee” within the meaning of
Section 162(m) of the Code.

 

(h)
“Deferred Restricted Stock Account” shall mean an account established under this
Plan on behalf of a Participant which shall be credited with Stock Units (as
defined in Section 6 below) as a result of such Participant’s election to defer
his/her Restricted Stock (and, if applicable, dividend equivalents with respect
to such shares of Restricted Stock).

 

(i)
"Deferred Stock" means Stock to be received, under an award made pursuant to
Section 7 below, at the end of a specified deferral period.

 

(j)
"Disability" means disability as determined under procedures established by the
Board or the Committee for purposes of the Plan.

 

(k)
"Early Retirement" means retirement, with the approval of the Board or the
Committee, for purposes of one or more award(s) hereunder, from active
employment with the Company or any Parent or Subsidiary prior to age 65.

 

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(l)
"Exchange Act" means the Securities Exchange Act of 1934, as amended, as in
effect from time to time.

 

(m)
"Fair Market Value", unless otherwise required by any applicable provision of
the Code or any regulations issued thereunder, means, as of any given date: (i)
if the principal market for the Stock is a national securities exchange or the
Over The Counter Bulletin Board, the closing sale price of the Stock on such day
as reported by such exchange or market system or quotation medium, or on a
consolidated tape reflecting transactions on such exchange or market system or
quotation medium, or (ii) if the principal market for the Stock is not a
national securities exchange and the Stock is not quoted on the Over The Counter
Bulletin Board, the mean between the closing bid sale price for the Stock on
such day as reported by the National Quotation Bureau, Inc.; provided that if
clauses (i) and (ii) of this paragraph are both inapplicable, or if no trades
have been made or no quotes are available for such day, the Fair Market Value of
the Stock shall be determined by the Board or the Committee, as the case may be,
which determination shall be conclusive as to the Fair Market Value of the
Stock.

 

(n)
“409A Change” shall mean (i) the acquisition by any one person, or more than one
person acting as a group, of Stock that, together with Stock held by such person
or group, constitutes more than fifty percent (50%) of the total fair market
value or total voting power of the Stock; (ii) a) the acquisition by any one
person, or more than one person acting as a group (or the acquisition during the
12-month period ending on the date of the most recent acquisition by such person
or persons) of ownership of Stock possessing fifty percent (50%) or more of the
total voting power of the Stock; or (b) a majority of members of the Board is
replaced during any 12-month period 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 or election; or (iii) the acquisition by any one person or more
than one person acting as a group (or the acquisition during the 12-month period
ending on the date of the most recent acquisition by such person or persons) of
assets from the Company resulting in a Change of Control and, in any event, that
have a total gross fair market value equal to or more than forty percent (40%)
of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. The foregoing definition
of “409A Change” shall be interpreted consistent with Code Section 409A and the
Treasury regulations issued thereunder.

 

(o)
“409A Deferred Stock Award” shall mean a Deferred Stock award that is or has
become subject to Section 409A of the Code.

 

(p)
“Identification Date” shall mean each December 31.

 

(q)
"Incentive Stock Option" means any Stock Option which is intended to be and is
designated as an "incentive stock option" within the meaning of Section 422 of
the Code, or any successor thereto.

 
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(r)
"Non-Qualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.

 

(s)
"Normal Retirement" means retirement from active employment with the Company or
any Subsidiary on or after age 65.

 

(t)
"Other Stock-Based Award" means an award under Section 8 below that is valued in
whole or in part by reference to, or is otherwise based upon, Stock.

 

(u)
“Participant” shall mean any person who has received an award of an Option,
Deferred Stock, Restricted Stock or an Other-Stock Based-Award under the Plan.

 

(v)
"Parent" means any present or future parent of the Company, as such term is
defined in Section 424(e) of the Code, or any successor thereto.

 

(w)
"Plan" means this Ionatron, Inc. 2007 Stock Incentive Plan, as hereinafter
amended from time to time.

 

(x)
"Restricted Stock" means Stock, received under an award made pursuant to Section
6 below, that is subject to restrictions imposed pursuant to said Section 6.

 

(y)
"Retirement" means Normal Retirement or Early Retirement.

 

(z)
"Rule 16b-3" means Rule 16b-3 of the General Rules and Regulations under the
Exchange Act, as in effect from time to time, and any successor thereto.

 

(aa)
"Securities Act" means the Securities Act of 1933, as amended, as in effect from
time to time.

 

(bb)
“Specified Employee” means any Participant (As hereinafter defined) who is (i)
an officer of the Company and (ii) receives annual compensation from the Company
in excess of $130,000 (or such other amount as determined pursuant to Code
Section 416(i)(1)(A)(i)). The term Specified Employee shall also include any
other individual who satisfies the definition of specified employee under Code
Section 409A. A Participant is a Specified Employee if he/she meets the
foregoing requirements at any time during the 12-month period ending on an
Identification Date. If a Participant is a Specified Employee as of an
Identification Date, such Participant is treated as a Specified Employee for the
12-month period beginning on the first day of the fourth month following the
Identification Date.

 

(cc)
"Stock" means the Common Stock of the Company, $.001 par value per share.

 

(dd)
"Stock Option" or "Option" means any option to purchase shares of Stock which is
granted pursuant to the Plan.

 

(ee)
"Subsidiary" means any present or future (A) subsidiary corporation of the
Company, as such term is defined in Section 424(f) of the Code, or any successor
thereto, or (B) unincorporated business entity in which the Company owns,
directly or indirectly, 50% or more of the voting rights, capital or profits.

 

(ff)
“Unforeseen Emergency means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse or a dependent (as defined in Section 152(a) of the Code) of the
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.

 
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Section 2. Administration.
 
The Plan shall be administered by the Board, or at its discretion, the
Committee, the membership of which shall consist solely of two or more members
of the Board, each of whom shall serve at the pleasure of the Board and, to the
extent practicable, shall be a "Non-Employee Director," as defined in Rule 16b-3
and shall be at all times constituted so as not to adversely affect the
compliance of the Plan with the requirements of Rule 16b-3 or with the
requirements of any other applicable law, rule or regulation. To extent
practicable, the members of the Committee shall each be an “outside director”
within the meaning of Section 162(m) of the Code and the regulations thereunder.
 
The Board or the Committee, as the case may be, shall have the authority to
grant, pursuant to the terms of the Plan, to officers and other employees or
other persons eligible under Section 4 below: (i) Stock Options, (ii) Restricted
Stock, (iii) Deferred Stock, (iv) Stock Appreciation Rights, and/or (v) Other
Stock-Based Awards.
 
For purposes of illustration and not of limitation, the Board or the Committee,
as the case may be, shall have the authority (subject to the express provisions
of the Plan):
 

(i)
to select the officers, other employees of the Company or any Parent or
Subsidiary and other persons to whom Stock Options, Restricted Stock, Deferred
Stock and/or Other Stock-Based Awards may be from time to time granted
hereunder;

 

(ii)
to determine the Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock, Deferred Stock and/or Other Stock-Based Awards, or any
combination thereof, if any, to be granted hereunder to one or more eligible
persons;

 

(iii)
to determine the number of shares of Stock to be covered by each award granted
hereunder;

 

(iv)
to determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder (including, but not limited to, share
price, any restrictions or limitations, and any vesting acceleration,
exercisability and/or forfeiture provisions);

 

(v)
to determine the terms and conditions under which awards granted hereunder are
to operate on a tandem basis and/or in conjunction with or apart from other
awards made by the Company or any Parent or Subsidiary outside of the Plan; and

 

(vi)
to substitute (A) new Stock Options for previously granted Stock Options,
including previously granted Stock Options and (B) new awards of any other type
for previously granted awards of the same type.

 
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Subject to Section 11 hereof, the Board or the Committee, as the case may be,
shall have the authority to (i) adopt, alter and repeal such administrative
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable, (ii) interpret the terms and provisions of the Plan and
any award issued under the Plan (and to determine the form and substance of all
agreements relating thereto), and (iii) to otherwise supervise the
administration of the Plan.
 
Subject to the provisions of the Plan, the Board or the Committee, as the case
may be, may, in its sole discretion, from time to time delegate to the Chief
Executive Officer of the Company (the "CEO") the authority, subject to such
terms as the Board or the Committee, as the case may be, shall determine, to
determine and designate from time to time the employees or other persons to whom
awards may be granted and to perform other specified functions under the Plan;
provided, however, that the CEO may not grant any Award to, or perform any
function related to an Award to, himself or any individual (i) then subject to
Section 16 of the Exchange Act or (ii) who is or, in the determination of the
Board or the Committee, as the case may be, may become a Covered Employee, and
any such grant or function relating to such individuals shall be performed
solely by the Board or the Committee, as the case may be, to ensure compliance
with the applicable requirements of the Exchange Act and the Code or (iii) where
the grant or performance of such function by the CEO will cause the Plan not to
comply with any applicable regulation of any securities exchange or automated
quotation system where the Stock is listed for trading.
 
Any such delegation of authority by the Board or the Committee, as the case may
be, shall be by a resolution adopted by the Board or the Committee, as the case
may be, and shall specify all of the terms and conditions of the delegation. The
resolution of the Board or the Committee, as the case may be, granting such
authority may authorize the CEO to grant awards pursuant to the Plan and may set
forth the types of awards that may be granted; provided, however, that the
resolution shall (i) specify the maximum number of shares of Stock that may be
awarded to any individual Plan participant and to all participants during a
specified period of time and (ii) specify the exercise price (or the method for
determining the exercise price) of an award, the vesting schedule, and any other
terms, conditions, or restrictions that may be imposed by the Board or the
Committee, as the case may be, in its sole discretion. The resolution of the
Board or the Committee, as the case may be, shall also require the CEO to
provide the Board or the Committee, as the case may be, on at least a monthly
basis, a report that identifies the awards granted, the awards granted pursuant
to the delegated authority and, with respect to each Award: the name of the
participant, the date of grant of the award, the number of shares of Stock, the
exercise price and period, if any, and the vesting provisions of such award, the
terms of such awards, in all cases, being subject to the resolutions of the
Board or the Committee, as the case may be, granting such authority.
 
The Board or the Committee, or the case may be, may also delegate to other
officers of the Company, pursuant to a written delegation, the authority to
perform specified functions under the Plan that are not inconsistent with Rule
16b-3 or other rules or regulations applicable to the Plan. Any actions taken by
any officers of the Company pursuant to such written delegation of authority
shall be deemed to have been taken by the Board or the Committee, as the case
may be.
 
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Subject to the express provisions of the Plan, all decisions made by the Board
or the Committee, as the case may be, pursuant to the provisions of the Plan
shall be made in the Board or the Committee's sole and absolute discretion and
shall be final and binding upon all persons, including the Company, its Parent
and Subsidiaries and the Plan Participants.
 
Section 3. Stock Subject to Plan.
 
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 10,000,000 shares; provided, however, that the maximum
number of Shares available for award or grant during the first five years of the
Plan shall be an aggregate of 5,000,000 Shares; and provided further that the
maximum number of Shares available for award or grant during any consecutive
twelve month period shall be 1,000,000 Shares during the first two years of the
Plan and 2,000,000 Shares during the third through fifth years of the Plan. Such
shares may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
 
If any shares of Stock that have been optioned cease to be subject to a Stock
Option award for any reason (other than by issuance of such shares upon exercise
of a Stock Option), or if any shares of Stock that are subject to any Restricted
Stock award, Deferred Stock award or Other Stock-Based award are forfeited or
any such award otherwise terminates without the issuance of such shares such
shares shall again be available for distribution under the Plan. Without
limiting the foregoing, (i) any shares of Stock subject to an award that remain
unissued upon the cancellation, surrender, exchange or termination of such award
without having been exercised or settled, (ii) any shares of Stock subject to an
award that are retained by the Company as payment of the exercise price or tax
withholding obligations with respect to an award, (iii) any shares of Stock
equal to the number of previously owned shares of Stock surrendered to the
Company as payment of the exercise price of a Stock Option or to satisfy tax
withholding obligations with respect to an award and (iv) any shares of Common
Stock equal to the excess of the number of shares of Common Stock subject to a
Stock Appreciation Right grant over the number of shares of Common Stock
delivered upon the exercise of Stock Appreciation Rights, shall again be
available for distribution under the Plan.
 
In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, extraordinary distribution with respect to the
Stock or other change in corporate structure affecting the Stock, such
substitution or adjustments shall be made in the (A) aggregate number of shares
of Stock reserved for issuance under the Plan, (B) number, kind and exercise
price of shares of Stock subject to outstanding Options and Stock Appreciation
Rights granted under the Plan, and (C) number, kind, purchase price and/or
appreciation base of shares of Stock subject to other outstanding awards granted
under the Plan, as may be determined to be appropriate by the Board or the
Committee, as the case may be, in order to prevent dilution or enlargement of
rights; provided, however, that the number of shares of Stock subject to any
award shall always be a whole number. Such adjusted exercise price shall also be
used to determine the amount which is payable to the optionee upon the exercise
by the Board or the Committee, as the case may be, of the alternative settlement
right which is set forth in Section 5(b)(xi) below.
 
Subject to the provisions of the immediately preceding paragraph, the maximum
number of shares of Stock with respect to which Options, Restricted Stock,
Deferred Stock, Stock Appreciation Rights or Other Stock-Based Awards may be
granted or measured to any Participant under the Plan during any calendar year
or part thereof shall not exceed 4,000,000 shares. The maximum number of shares
of Stock with respect to which Incentive Stock Options may be granted under the
Plan shall be 10,000,000 shares of Stock.
 
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Section 4. Eligibility.
 
Officers and other employees of the Company or any Parent or Subsidiary (but
excluding any person whose eligibility would adversely affect the compliance of
the Plan with the requirements of Rule 16b-3) who are at the time of the grant
of an award under the Plan employed by the Company or any Parent or Subsidiary
and who are responsible for or contribute to the management, growth and/or
profitability of the business of the Company or any Parent or Subsidiary are
eligible to be granted. Options and awards under the Plan. In addition,
Non-Qualified Stock Options and other awards may be granted under the Plan to
any person, including, but not limited to, directors, independent agents,
consultants and attorneys who the Board or the Committee, as the case may be,
believes has contributed or will contribute to the success of the Company.
Eligibility under the Plan shall be determined by the Board or the Committee, as
the case may be.
 
The Board or the Committee, as the case may be, may, in its sole discretion,
include additional conditions and restrictions in the agreement entered into in
connection with such awards under the Plan. The grant of an Option or other
award under the Plan, and any determination made in connection therewith, shall
be made on a case by case basis and can differ among optionees and grantees. The
grant of an Option or other award under the Plan is a privilege and not a right
and the determination of the Board or the Committee, as the case may be, can be
applied on a non-uniform (discretionary) basis.
 
Section 5. Stock Options.
 

(a)
Grant and Exercise. Stock Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options. Any Stock
Option granted under the Plan shall contain such terms as the Board or the
Committee, as the case may be, may from time to time approve. The Board or the
Committee, as the case may be, shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options, and they may be granted alone or in addition to other awards granted
under the Plan. To the extent that any Stock Option is not designated as an
Incentive Stock Option or does not qualify as an Incentive Stock Option, it
shall constitute a Non-Qualified Stock Option. The grant of an Option shall be
deemed to have occurred on the date on which the Board or the Committee, as the
case may be, by resolution, designates an individual as a grantee thereof, and
determines the number of shares of Stock subject to, and the terms and
conditions of, said Option.

 
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options or any agreement providing for Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code, or, without the consent of the optionee(s)
affected, to disqualify any Incentive Stock Option under said Section 422.
 

(b)
Terms and Conditions. Stock Options granted under the Plan shall be subject to
the following terms and conditions:

 

(i)
Option Price. The option price per share of Stock purchasable under a Stock
Option shall be determined by the Board or the Committee, as the case may be, at
the time of grant but as to Incentive Stock Options and Non-Qualified Stock
Options shall be not less than 100% (110% in the case of an Incentive Stock
Option granted to an optionee ("10% Stockholder") who, at the time of grant,
owns Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its Parent, if any, or its Subsidiaries) of
the Fair Market Value of the Stock at the time of grant.

 

(ii)
Option Term. The term of each Stock Option shall be fixed by the Board or the
Committee, as the case may be, but no Incentive Stock Option shall be
exercisable more than ten years (five years, in the case of an Incentive Stock
Option granted to a 10% Stockholder) after the date on which the Option is
granted.

 

(iii)
Exercisability. Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Board or the
Committee, as the case may be. If the Board or the Committee, as the case may
be, provides, in its discretion, that any Stock Option is exercisable only in
installments, the Board or the Committee, as the case may be, may waive such
installment exercise provisions at any time at or after the time of grant in
whole or in part, based upon such factors as the Board or the Committee, as the
case may be, shall determine.

 
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(iv)
Method of Exercise. Subject to whatever installment, exercise and waiting period
provisions are applicable in a particular case, Stock Options may be exercised
in whole or in part at any time during the option period by giving written
notice of exercise to the Company specifying the number of shares of Stock to be
purchased. Such notice shall be accompanied by payment in full of the exercise
price for the Stock Options exercised, which shall be in cash or, if provided in
the Stock Option agreement referred to in Section 5(b)(xii) below or otherwise
provided by the Board, or Committee, as the case may be, either at or after the
date of grant of the Stock Option, in whole shares of Stock which are already
owned by the holder of the Option or partly in cash and partly in such Stock.
Cash payments shall be made by wire transfer, certified or bank check or
personal check, in each case payable to the order of the Company; provided,
however, that the Company shall not be required to deliver certificates for
shares of Stock with respect to which an Option is exercised until the Company
has confirmed the receipt of good and available funds in payment of the purchase
price thereof. If permitted, payments of the exercise price and any tax required
to be withheld by the Company in the form of Stock (which shall be valued at the
Fair Market Value of a share of Stock on the date of exercise) shall be made by
delivery of stock certificates in negotiable form which are effective to
transfer good and valid title thereto to the Company, free of any liens or
encumbrances. In addition to the foregoing, payment of the exercise price may be
made by delivery to the Company by the optionee of an executed exercise form,
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares covered by the option and deliver the sale or
margin loan proceeds directly to the Company. Except as otherwise expressly
provided in the Plan or in the Stock Option agreement referred to in Section
5(b)(xii) below or otherwise provided by the Board or Committee, as the case may
be, either at or after the date of grant of the Option, no Option which is
granted to a person who is at the time of grant an employee of the Company or of
a Subsidiary or Parent of the Company may be exercised at any time unless the
holder thereof is then an employee of the Company or of a Parent or a
Subsidiary. The holder of an Option shall have none of the rights of a
stockholder with respect to the shares subject to the Option until the optionee
has given written notice of exercise, has paid in full for those shares of Stock
and, if requested by the Board or Committee, as the case may be, has given the
representation described in Section 13(a) below.

 

(v)
Transferability; Exercisability. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution, except
as may be otherwise provided with respect to a Non-Qualified Option pursuant to
the specific provisions of the Stock Option agreement pursuant to which it was
issued as referred to in Section 5(b)(xii) below (which agreement may be
amended, from time to time). Except as otherwise provided in the Stock Option
agreement relating to a Non-Qualified Stock Option, all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee or his or her
guardian or legal representative.

 

(vi)
Termination by Reason of Death. Subject to Section 5(b)(x) below, if an
optionee's employment by the Company or any Parent or Parent or Subsidiary
terminates by reason of death, any Stock Option held by such optionee may
thereafter be exercised, to the extent then exercisable or on such accelerated
basis as the Board or Committee, as the case may be, may determine at or after
the time of grant, for a period of one year (or such other period as the Board
or the Committee, as the case may be, may specify at or after the time of grant)
from the date of death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.

 

(vii)
Termination by Reason of Disability. Subject to Section 5(b)(x) below, if an
optionee's employment by the Company or any Parent or Subsidiary terminates by
reason of Disability, any Stock Option held by such optionee may thereafter be
exercised by the optionee, to the extent it was exercisable at the time of
termination or on such accelerated basis as the Board or the Committee, as the
case may be, may determine at or after the time of grant, for a period of one
year (or such other period as the Board or the Committee, as the case may be,
may specify at or after the time of grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such one year period (or such other period as the Board or the Committee,
as the case may be, shall specify at or after the time of grant), any
unexercised Stock Option held by such optionee shall thereafter be exercisable
to the extent to which it was exercisable at the time of death for a period of
one year from the date of death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.

 
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(viii)
Termination by Reason of Retirement. Subject to Section 5(b)(x) below, if an
optionee's employment by the Company or any Parent or Subsidiary terminates by
reason of Normal Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination or on such accelerated basis as the Board or the Committee,
as the case may be, may determine at or after the time of grant, for a period of
one year (or such other period as the Board or the Committee, as the case may
be, may specify at or after the time of grant) from the date of such termination
of employment or the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such one year period (or such other period as the Board or the Committee,
as the case may be, shall specify at or after the date of grant), any
unexercised Stock Option held by such optionee shall thereafter be exercisable
to the extent to which it was exercisable at the time of death for a period of
one year from the date of death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter. If an optionee's employment
with the Company or any Parent or Subsidiary terminates by reason of Early
Retirement, the Stock Option shall thereupon terminate; provided, however, that
if the Board or the Committee, as the case may be, so approves at the time of
Early Retirement, any Stock Option held by the optionee may thereafter be
exercised by the optionee as provided above in connection with termination of
employment by reason of Normal Retirement.

 

(ix)
Other Termination. Subject to the provisions of Section 13(g) below and unless
otherwise determined by the Board or Committee, as the case may be, at or after
the time of grant, if an optionee's employment by the Company or any Parent or
Subsidiary terminates for any reason other than death, Disability or Retirement,
the Stock Option shall thereupon automatically terminate, except that if the
optionee is involuntarily terminated by the Company or any Parent or a
Subsidiary without Cause (as hereinafter defined), such Stock Option may be
exercised for a period of three months (or such other period as the Board or the
Committee, as the case may be, shall specify at or after the time of grant) from
the date of such termination or until the expiration of the stated term of such
Stock Option, whichever period is shorter. For purposes of the Plan, "Cause"
shall mean (1) the conviction of the optionee of a felony under Federal law or
the law of the state in which such action occurred, (2) dishonesty by the
optionee in the course of fulfilling his or her employment duties, or (3) the
failure on the part of the optionee to perform his or her employment duties in
any material respect. In addition, with respect to an option granted to an
employee of the Company, a Parent or a Subsidiary, for purposes of the Plan,
"Cause" shall also include any definition of "Cause" contained in any employment
agreement between the optionee and the Company, Parent or Subsidiary, as the
case may be.

 
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(x)
Additional Incentive Stock Option Limitation. In the case of an Incentive Stock
Option, the aggregate Fair Market Value of Stock (determined at the time of
grant of the Option) with respect to which Incentive Stock Options are
exercisable for the first time by an optionee during any calendar year (under
all such plans of optionee's employer corporation and its Parent and
Subsidiaries) shall not exceed $100,000.

 

(xi)
Alternative Settlement of Option. If provided for, upon the receipt of written
notice of exercise or otherwise provided for by the Board or Committee, as the
case may be, either at or after the time of grant of the Stock Option, the Board
or the Committee, as the case may be, may elect to settle all or part of any
Stock Option by paying to the optionee an amount, in cash or Stock (valued at
Fair Market Value on the date of exercise), equal to the product of the excess
of the Fair Market Value of one share of Stock, on the date of exercise over the
Option exercise price, multiplied by the number of shares of Stock with respect
to which the optionee proposes to exercise the Option. Any such settlements
which relate to Options which are held by optionees who are subject to Section
16(b) of the Exchange Act shall comply with any "window period" provisions of
Rule 16b-3, to the extent applicable, and with such other conditions as the
Board or Committee, as the case may be, may impose.

 

(xii)
Stock Option Agreement. Each grant of a Stock Option shall be confirmed by, and
shall be subject to the terms of, an agreement executed by the Company and the
Participant.

 
Section 6. Restricted Stock.
 

(a)
Grant and Exercise. Shares of Restricted Stock may be issued either alone or in
addition to or in tandem with other awards granted under the Plan. The Board or
the Committee, as the case may be, shall determine the eligible persons to whom,
and the time or times at which, grants of Restricted Stock will be made, the
number of shares to be awarded, the price (if any) to be paid by the recipient,
the time or times within which such awards may be subject to forfeiture (the
"Restriction Period"), the vesting schedule and rights to acceleration thereof,
and all other terms and conditions of the awards. The Board or the Committee, as
the case may be, may condition the grant of Restricted Stock upon the attainment
of such factors as the Board or the Committee, as the case may be, may
determine.

 
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(b)
Terms and Conditions. Each Restricted Stock award shall be subject to the
following terms and conditions:

 

(i)
Restricted Stock, when issued, shall either be issued in book-entry form or will
be represented by a stock certificate or certificates registered in the name of
the holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, any certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
restrictive legend to the effect that ownership of the Restricted Stock (and
such Retained Distributions), and the enjoyment of all rights related thereto,
are subject to the restrictions, terms and conditions provided in the Plan and
the Restricted Stock agreement referred to in Section 6(b)(iv) below. Any such
certificates shall be deposited by the holder with the Company, together with
stock powers or other instruments of assignment, endorsed in blank, which will
permit transfer to the Company of all or any portion of the Restricted Stock and
any securities constituting Retained Distributions that shall be forfeited or
that shall not become vested in accordance with the Plan and the applicable
Restricted Stock agreement.

 

(ii)
Restricted Stock shall constitute issued and outstanding shares of Common Stock
for all corporate purposes, and the issuance thereof shall be made for at least
the minimum consideration (if any) necessary to permit the shares of Restricted
Stock to be deemed to be fully paid and nonassessable. Unless the Board or the
Committee determines otherwise, the holder will have the right to vote such
Restricted Stock, to receive and retain all regular cash dividends and other
cash equivalent distributions as the Board may in its sole discretion designate,
pay or distribute on such Restricted Stock and to exercise all other rights,
powers and privileges of a holder of Stock with respect to such Restricted
Stock, with the exceptions that (A) the holder will not be entitled to delivery
of the stock certificate or certificates representing such Restricted Stock
until the Restriction Period shall have expired and unless all other vesting
requirements with respect thereto shall have been fulfilled; (B) the Company
will retain custody of the stock certificate or certificates representing the
Restricted Stock during the Restriction Period; (C) other than regular cash
dividends and other cash equivalent distributions as the Board may in its sole
discretion designate, pay or distribute, the Company will retain custody of all
distributions ("Retained Distributions") made or declared with respect to the
Restricted Stock (and such Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the Restricted Stock)
until such time, if ever, as the Restricted Stock with respect to which such
Retained Distributions shall have been made, paid or declared shall have become
vested and with respect to which the Restriction Period shall have expired; (D)
the holder may not sell, assign, transfer, pledge, exchange, encumber or dispose
of the Restricted Stock or any Retained Distributions during the Restriction
Period; and (E) a breach of any of the restrictions, terms or conditions
contained in the Plan or the Restricted Stock agreement referred to in Section
6(b)(iv) below, or otherwise established by the Board or the Committee, as the
case may be, with respect to any Restricted Stock or Retained Distributions will
cause a forfeiture of such Restricted Stock and any Retained Distributions with
respect thereto.

 
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(iii)
Upon the expiration of the Restriction Period with respect to each award of
Restricted Stock and the satisfaction of any other applicable restrictions,
terms and conditions (A) all or part of such Restricted Stock shall become
vested in accordance with the terms of the Restricted Stock agreement referred
to in Section 6(b)(iv) below, and (B) any Retained Distributions with respect to
such Restricted Stock shall become vested to the extent that the Restricted
Stock related thereto shall have become vested. Any such Restricted Stock and
Retained Distributions that do not vest shall be forfeited to the Company and
the holder shall not thereafter have any rights with respect to such Restricted
Stock and Retained Distributions that shall have been so forfeited.

 

(iv)
Each Restricted Stock award shall be confirmed by, and shall be subject to the
terms of, an agreement executed by the Company and the Participant.

 

(c)
Restricted Stock Deferrals

 
Deferral Agreement
 
A Participant who may be or has been awarded Restricted Stock by the Company may
make a deferral election under the Plan by completing and submitting to the
Company a written Stock Deferral Agreement provided by the Company during the
enrollment period. The Stock Deferral Agreement must comply with the timing
conditions of Section (ii) below. The Stock Deferral Agreement shall indicate:
(1) the number of shares of Restricted Stock a Participant elects to defer, (2)
the disposition of dividend equivalents, and (3) the Participant’s election of a
payment schedule for his or her Deferred Restricted Stock Account.
Notwithstanding any provision to the contrary in this Plan, a Participant’s
Deferred Restricted Stock Account is payable solely in shares of the Company’s
common stock (with any fractional share paid in cash). Dividend equivalent
payments shall be made with respect to Stock Units, as defined in Section (iv)
below, credited to a Participant’s Deferred Restricted Stock Account in the
amount that would have been paid (or reinvested) as a dividend if each Stock
Unit were a share of common stock of the Company. Subject to the participant’s
election in Section 6(c)(i)(2) hereof, any such dividend equivalent shall be
credited to the Participant’s Deferred Restricted Stock Account. The number of
Stock Units into which the dividend equivalents are converted shall be
calculated based on the price per share of the Stock of the Company as of the
date the dividend is paid.
 
Timing of Stock Deferral Agreement
 
A deferral election relating to Restricted Stock will be invalid unless the
election satisfies one of the following conditions:
 
The election may be made at any time that is no later than December 31 of the
year prior to the year in which the Restricted Stock is granted or, with respect
to Restricted Stock that is subject to a vesting period of at least twelve (12)
months, the election made on or before the thirtieth (30th) day after the
Participant is granted the Restricted Stock and further provided that the
election is made at least twelve (12) months in advance of the earliest date on
which the vesting period could expire. Notwithstanding the foregoing to the
contrary, a Participant shall not be permitted to elect to defer the receipt of
Restricted Stock unless such election complies with Code Section 409A and
Treasury Regulations, IRS Rulings and IRS Notices issued thereunder (a
“Pre-Grant Stock Deferral Election”);
 
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The election may be made later than the time or times set forth in (1) above,
provided the deferral election period shall occur during the period which is at
least twelve (12) months prior to the date on which the Restricted Stock becomes
vested (a “Post-Grant Stock Deferral Election”). Any Post-Grant Stock Deferral
Election must indicate a distribution date that is at least five (5) years later
than the vesting date of the related Restricted Stock; or
 
In the case of Restricted Stock that qualify as performance-based under Code
Section 409A, the election may be made no later than six (6) months prior to the
vesting date of the Restricted Stock (a “Performance-Based Stock Deferral
Election”).
 
Effect of Deferral Election
 
Except as provided in Section 6(c)(vi) regarding changing a payment schedule
election, deferral elections are irrevocable.
 
Additional Effect of Deferral Election on Restricted Stock
 
When a Participant makes a deferral election for Restricted Stock, such
Participant shall continue to hold (or otherwise be credited with ownership of)
the shares of Restricted Stock which are subject to the election, and remains
able to exercise all rights of ownership accorded to him or her as the owner of
unvested Restricted Stock with respect to such shares, as set forth in the
Participant’s underlying Restricted Stock award agreement, until the day
immediately prior to the “vesting date” of such deferred Restricted Stock
shares. During such period, any dividends declared with respect to such deferred
Restricted Stock shares shall be distributed in accordance with the provisions
of the plan pursuant to which the Restricted Stock is granted (e.g., paid in
cash to the Participant or reinvested in Stock), as provided in the Company’s
Restricted Stock agreement.
 
On the day immediately prior to the “vesting date” of the deferred Restricted
Stock shares subject to the stock deferral election, such shares are deemed to
be surrendered to the Company by the Participant, and exchanged for stock units
(“Stock Units”) which are simultaneously “deferred” (and credited to the
Participant’s Deferred Restricted Stock Account pursuant to provisions of the
Plan).
 
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Effect of FICA/FUTA Obligation
 
As of the applicable vesting date, Restricted Stock is subject to taxation under
the Federal Insurance Contribution Act (“FICA”) and the Federal Unemployment Tax
Act (“FUTA”). The Company, without the Participant’s consent, may satisfy the
Company’s withholding obligation for FICA and FUTA taxes payable by the
Participant with respect to the Restricted Stock by withholding from the
deferral and thus reducing the deferral amount.
 
Changing Payment Schedule Election
 
With respect to the portion of a Participant’s Account that is a Post-Grant
Stock Deferral Election, the Participant shall be permitted to change his or her
payment schedule election at any time, but only if: (1) such subsequent election
may not take effect until at least twelve (12) months after the date on which it
is made, (2) if such subsequent election relates to a payment not made on
account of the Participant’s death, disability or Unforeseeable Emergency, the
payment with respect to which such election is made must be deferred for a
period of not less than five (5) years from the date such payment would
otherwise have been made, and (3) any subsequent election related to a payment
described in Code Section 409A(2)(A)(iv) may not be made less than twelve (12)
months prior to the date of the first scheduled payment.
 
With respect to the portion of a Participant’s Account that is a Pre-Grant Stock
Deferral Election or a Performance-Based Stock Deferral Election, the
Participant shall be permitted to change his or her payment schedule election at
any time by filing a new Stock Deferral Agreement, provided such election is
made in accordance with the paragraph above, or prior to the time at which the
election to defer the Restricted Stock must be made pursuant to a Pre-Grant
Stock Deferral Election (Section 6(c)(ii)(1)) or a Performance-Based Stock
Deferral Election (Section 6(c)(ii)(3)), as applicable.
 
Section 7. Deferred Stock.
 

(a)
Grant and Exercise. Deferred Stock may be awarded either alone or in addition to
or in tandem with other awards granted under the Plan. The Board or the
Committee, as the case may be, shall determine the eligible persons to whom and
the time or times at which Deferred Stock shall be awarded, the number of shares
of Deferred Stock to be awarded to any person, the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt of the
Deferred Stock will be deferred, and all the other terms and conditions of the
awards. The Board or the Committee, as the case may be, may condition the grant
of the Deferred Stock upon the attainment of such factors or criteria as the
Board or the Committee, as the case may be, shall determine.

 

(b)
Terms and Conditions. Each Deferred Stock award shall be subject to the
following terms and conditions:

 

 
(i)
Subject to the provisions of the Plan and Deferred Stock agreement referred to
in Section 7(b)(viii) below, Deferred Stock awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral Period. At the
expiration of the Deferral Period (or the Additional Deferral Period referred to
in Section 7(b)(vii) below, where applicable), share certificates shall be
delivered to the Participant, or his legal representative, in a number equal to
the shares of Stock covered by the Deferred Stock award.

 
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(ii)
As determined by the Board or the Committee, as the case may be, at the time of
award, amounts equal to any dividends declared during the Deferral Period (or
the Additional Deferral Period referred to in Section 7(b)(vi) below, where
applicable) with respect to the number of shares covered by a Deferred Stock
award may be paid to the Participant currently or deferred and deemed to be
reinvested in additional Deferred Stock.

 

 
(iii)
Subject to the provisions of the Deferred Stock agreement referred to in Section
7(b)(viii) below and this Section 7 and Section 13(g) below, upon termination of
a Participant's employment with the Company or any Parent or Subsidiary for any
reason during the Deferral Period (or the Additional Deferral Period referred to
in Section 7(b)(vii) below, where applicable) for a given award, the Deferred
Stock in question will vest or be forfeited in accordance with the terms and
conditions established by the Board or the Committee, as the case may be, at the
time of grant.

 

 
(iv)
The Board or the Committee, as the case may be, may, after grant, accelerate the
vesting of all or any part of any Deferred Stock award.

 

(v)
In the event of an Unforeseen Emergency of a Participant whose employment with
the Company or any Parent or Subsidiary is involuntarily terminated (other than
for Cause), the Board or the Committee, as the case may be, may, at the request
of the Participant, waive in whole or in part any or all of the remaining
deferral limitations imposed hereunder or pursuant to the Deferred Stock
agreement referred to in Section 7(b)(viii) below with respect to any or all of
the Participant's Deferred Stock.

 

(vi)
In the event of the Participant's Retirement, Disability or death, or in cases
of an Unforeseen Emergency, the Board or the Committee, as the case may be,
shall waive in whole or in part any or all of the limitations imposed hereunder
(if any) with respect to any or all of a Deferred Stock award.

 

(vii)
In the event of the Participant's Retirement, Disability, death, or a 409A
Change, or in cases of an Unforeseen Emergency, the Board or the Committee, as
the case may be, shall waive the limitations imposed hereunder (if any) with
respect to a 409A Deferred Stock Award.

 

 
(viii)
A Participant and/or the Board or the Committee, as the case may be, may elect
to defer the receipt of an award (or an installment of an award) for an
additional specified period or until a specified period or until a specified
event (the "Additional Deferral Period"); provided however, that (i) such
subsequent election may not take effect until at least twelve (12) months after
the date on which it is made, (ii) if such subsequent election relates to a
payment not made on account of the Participant’s death, disability or Unforeseen
Emergency, the payment with respect to which such election is made must be
deferred for a period of not less than five (5) years from the date such payment
would otherwise have been made, and (iii) any subsequent election related to a
payment described in Code Section 409A(2)(A)(iv) may not be made less than
twelve (12) months prior to the date of the first scheduled payment.

 
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(ix)
Each Deferred Stock award shall be confirmed by, and shall be subject to the
terms of, an agreement executed by the Company and the Participant.

 
Section 8. Stock Appreciation Rights
 
The Board or the Committee, as the case may be, is authorized to grant Stock
Appreciation Rights and shall, in its sole discretion, determine such the
eligible persons, who will receive Stock Appreciation Rights and the number of
shares of Common Stock with respect to each Stock Appreciation Right. A “Stock
Appreciation Right” shall mean a right to receive a payment in cash, Common
Stock or a combination thereof, in an amount equal to the excess of (x) the Fair
Market Value, or other specified valuation, of a specified number of shares of
Common Stock on the date the Stock Appreciation Right is exercised over (y) the
Fair Market Value, or other specified valuation (which shall be no less than the
Fair Market Value), of such shares of Common Stock on the date the Stock
Appreciation Right is granted, all as determined by the Committee. Each Stock
Appreciation Right shall be subject to such terms and conditions consistent with
the Plan as shall be determined by the Committee and as set forth in the Award
agreement. At the time of grant of a Stock Appreciation Right, the Board or the
Committee, as the case may be, may impose such restrictions on or conditions to
the exercisability of the Stock Appreciation Right as it, in its absolute
discretion, deems appropriate, including, but not limited to, achievement of
performance goals based on one or more business criteria. The term of a Stock
Appreciation Right shall not exceed ten years from the date of grant.
 
Section 9. Other Stock-Based Awards.
 

(a)
Grant and Exercise. Other Stock-Based Awards, which may include performance
shares and shares valued by reference to the performance of the Company or any
Parent or Subsidiary, may be granted either alone or in addition to or in tandem
with Stock Options, Restricted Stock or Deferred Stock. The Board or the
Committee, as the case may be, shall determine the eligible persons to whom, and
the time or times at which, such awards shall be made, the number of shares of
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards. The Board or the Committee, as the case may be, may also provide
for the grant of Stock under such awards upon the completion of a specified
performance period.

 

(b)
Terms and Conditions. Each Other Stock-Based Award shall be subject to the
following terms and conditions:

 

(i)
Shares of Stock subject to an Other Stock-Based Award may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which the
shares are issued, or, if later, the date on which any applicable restriction or
period of deferral lapses.

 

(ii)
The recipient of an Other Stock-Based Award shall be entitled to receive,
currently or on a deferred basis, dividends or dividend equivalents with respect
to the number of shares covered by the award, as determined by the Board or the
Committee, as the case may be, at the time of the award. The Board or the
Committee, as the case may be, may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Stock.

 
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(iii)
Any Other Stock-Based Award and any Stock covered by any Other Stock-Based Award
shall vest or be forfeited to the extent so provided in the award agreement
referred to in Section 8(b)(v) below, as determined by the Board or the
Committee, as the case may be.

 

(iv)
In the event of the Participant's Retirement, Disability or death, or in cases
of an Unforeseen Emergency, the Board or the Committee, as the case may be,
shall waive in whole or in part any or all of the limitations imposed hereunder
(if any) with respect to any or all of an Other Stock-Based Award.

 

(v)
Each Other Stock-Based Award shall be confirmed by, and shall be subject to the
terms of, an agreement executed by the Company and by the Participant.

 
Section 10. Performance-Based Awards
 

(a)
In General. All Options and Stock Appreciation Rights and certain Restricted
Stock awards, Deferred Stock awards, and Other Stock-Based Awards granted under
the Plan, and the compensation attributable to such awards, are intended to (i)
qualify as Performance-Based Awards (as defined in the next sentence) or (ii) be
otherwise exempt from the deduction limitation imposed by Section 162(m) of the
Code. Certain Awards granted under the Plan may be granted in a manner such that
Awards qualify as “performance-based compensation” (as such term is used in
Section 162(m) of the Code and the regulations thereunder) and thus be exempt
from the deduction limitation imposed by Section 162(m) of the Code
(“Performance-Based Awards”). Awards may only qualify as Performance-Based
Awards if they are granted by the Committee at a time when the Committee is
comprised solely of two or more “outside directors” (as such term is used in
Section 162(m) of the Code and the regulations thereunder) (“Qualifying
Committee”).

 
 
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(b)
Options and Stock Appreciation Rights. Stock Options and Stock Appreciation
Rights granted under the Plan with an exercise price at or above the Fair Market
Value of Common Stock on the date of grant are intended to qualify as
Performance-Based Awards.

 

(c)
Other Performance-Based Awards. Restricted Stock awards, Deferred Stock awards,
and Other Stock-Based Awards granted under the Plan may qualify as
Performance-Based Awards if, as determined by a Qualifying Committee, in its
discretion, either the granting of such award is subject to the achievement of a
performance target or targets based on one or more of the performance measures
specified in Section 9(d) below. With respect to such awards intended to qualify
as Performance-Based Awards:

 
(1)    the Qualifying Committee shall establish in writing (x) the objective
performance-based goals applicable to a given period and (y) the individual
employees or class of employees to which such performance-based goals apply no
later than 90 days after the commencement of such period (but in no event after
25 percent of such period has elapsed);
 
(2)    no Performance-Based Awards shall be payable to or vest with respect to,
as the case may be, any Participant for a given period until the Qualifying
Committee certifies in writing that the objective performance goals (and any
other material terms) applicable to such period have been satisfied; and
 
(3)    after the establishment of a performance goal, the Qualifying Committee
shall not revise such performance goal or increase the amount of compensation
payable thereunder (as determined in accordance with Section 162(m) of the Code)
upon the attainment of such performance goal.
 

(d)
Performance Measures. The Qualifying Committee may use the following performance
measures (either individually or in any combination) to set performance targets
with respect to awards intended to qualify as Performance-Based Awards: revenue;
pretax income before allocation of corporate overhead and bonus; budget;
earnings per share; net income; division, group or corporate financial goals;
return on stockholders’ equity; return on assets; return on net assets; return
on investment capital; gross margin return on investment; gross margin dollars
or percent; payroll as a percentage of revenues; inventory shrink; employee
turnover; sales, general and administrative expense; attainment of strategic and
operational initiatives; appreciation in and/or maintenance of the price of
Common Stock or any other publicly-traded securities of the Company, if any;
market share; gross profits; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; economic value-added models;
comparisons with various stock market indices; achievement of technological or
product development milestones; and/or reductions in costs. The foregoing
criteria shall have any reasonable definitions that the Qualifying Committee may
specify, which may include or exclude any or all of the following items as the
Qualifying Committee may specify: extraordinary, unusual or non-recurring items;
effects of accounting changes; effects of financing activities; expenses for
restructuring or productivity initiatives; other non-operating items; spending
for acquisitions; effects of divestitures; and effects of litigation activities
and settlements. Any such performance criterion or combination of such criteria
may apply to the Participant’s award opportunity in its entirety or to any
designated portion or portions of the award opportunity, as the Qualifying
Committee may specify.

 
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Section 11. Change of Control Provisions.
 

(a)
A "Change of Control" shall be deemed to have occurred on the tenth day after:

 

(i)
any individual, corporation or other entity or group (as defined in Section
13(d)(3) of the Exchange Act), becomes, directly or indirectly, the beneficial
owner (as defined in the General Rules and Regulations of the Securities and
Exchange Commission with respect to Sections 13(d) and 13(g) of the Exchange
Act) of more than 50% of the then outstanding shares of the Company's capital
stock entitled to vote generally in the election of directors of the Company; or

 

(ii)
the commencement of, or the first public announcement of the intention of any
individual, firm, corporation or other entity or of any group (as defined in
Section 13(d)(3) of the Exchange Act) to commence, a tender or exchange offer
subject to Section 14(d)(1) of the Exchange Act for any class of the Company's
capital stock; or

 

(iii)
the stockholders of the Company approve (A) a definitive agreement for the
merger or other business combination of the Company with or into another
corporation pursuant to which the stockholders of the Company do not own,
immediately after the transaction, more than 50% of the voting power of the
corporation that survives, or (B) a definitive agreement for the sale, exchange
or other disposition of all or substantially all of the assets of the Company,
or (C) any plan or proposal for the liquidation or dissolution of the Company;
provided, however, that a "Change of Control" shall not be deemed to have taken
place if beneficial ownership is acquired (A) directly from the Company, other
than an acquisition by virtue of the exercise or conversion of another security
unless the security so converted or exercised was itself acquired directly from
the Company, or (B) by, or a tender or exchange offer is commenced or announced
by, the Company, any profit-sharing, employee ownership or other employee
benefit plan of the Company; or any trustee of or fiduciary with respect to any
such plan when acting in such capacity.

 

(b)
In the event of a "Change of Control" as defined in Section 10(a) above, awards
granted under the Plan will be subject to the following provisions, unless the
provisions of this Section 11 are suspended or terminated by an affirmative vote
of a majority of the Board prior to the occurrence of such a "Change of
Control":

 

(i)
all outstanding Stock Options and Stock Appreciation Rights which have been
outstanding for at least one year shall become exercisable in full, whether or
not otherwise exercisable at such time, and any such Stock Option and Stock
Appreciation Rights shall remain exercisable in full thereafter until it expires
pursuant to its terms; and

 
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(ii)
all restrictions and deferral limitations contained in Restricted Stock awards,
Deferred Stock awards and Other Stock-Based Awards granted under the Plan shall
lapse and the shares of stock subject to such awards shall be distributed to the
Participant. Notwithstanding the foregoing to the contrary, all restrictions and
deferral limitations with respect to a 409A Deferred Stock Award or with respect
to a Participant’s Deferred Restricted Stock Account shall not lapse under this
Section 10(b) unless the “Change of Control” qualifies as a 409A Change.

 
Section 12. Amendments and Termination.

The Board may at any time, and from time to time, amend any of the provisions of
the Plan, and may at any time suspend or terminate the Plan; provided, however,
that no such amendment shall be effective unless and until it has been duly
approved by the holders of the outstanding shares of Stock if the failure to
obtain such approval would adversely affect the compliance of the Plan with the
requirements of Rule 16b-3 or any other applicable law, rule or regulation. The
Board or the Committee, as the case may be, may amend the terms of any Stock
Option or other award theretofore granted under the Plan; provided, however,
that subject to Section 3 above, no such amendment may be made by the Board or
the Committee, as the case may be, which in any material respect impairs the
rights of the optionee or Participant without the optionee's or Participant's
consent, except for such amendments which are made to cause the Plan to qualify
for the exemption provided by Rule 16b-3. Moreover, no Stock Option previously
granted under the Plan may be amended to reduce the exercise price of the Stock
Option.
 
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Section 13. Unfunded Status of Plan.
 
The 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
optionee by the Company, nothing contained herein shall give any such
Participant or optionee any rights that are greater than those of a creditor of
the Company.
 
Section 14. General Provisions.
 

(a)
The Board or the Committee, as the case may be, may require each person
acquiring shares of Stock pursuant to an Option, Stock Appreciation Rights, or
other award under the Plan to represent to and agree with the Company in
writing, among other things, that the optionee or Participant is acquiring the
shares for investment without a view to distribution thereof.

 
All certificates for shares of Stock delivered under the Plan shall be subject
to such stop transfer orders and other restrictions as the Board or the
Committee, as the case may be, may deem to be advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange or association upon which the Stock is then listed or traded,
any applicable Federal or state securities law, and any applicable corporate
law, and the Board or the Committee, as the case may be, may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
 

(b)
Nothing contained in the Plan shall prevent the Board from adopting such other
or additional incentive arrangements as it may deem desirable, including, but
not limited to, the granting of stock options and the awarding of stock and cash
otherwise than under the Plan; and such arrangements may be either generally
applicable or applicable only in specific cases.

 

(c)
Nothing contained in the Plan or in any award hereunder shall be deemed to
confer upon any employee of the Company or any Parent or Subsidiary any right to
continued employment with the Company or any Parent or Subsidiary, nor shall it
interfere in any way with the right of the Company or any Parent or Subsidiary
to terminate the employment of any of its employees at any time.

 

(d)
No later than the date as of which an amount first becomes includable in the
gross income of the Participant for Federal income tax purposes with respect to
any Option, Stock Appreciation Right or other award under the Plan, the
Participant shall pay to the Company, or make arrangements satisfactory to the
Board or the Committee, as the case may be, regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. If permitted by the Board or the Committee, as
the case may be, tax withholding or payment obligations may be settled with
Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional upon such payment or arrangements, and the Company or the
Participant's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant from the Company or any Parent or Subsidiary.

 
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(e)
The Plan and all awards made and actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of Delaware (without
regard to choice of law provisions).

 

(f)
Any Stock Option or Stock Appreciation Right granted or other award made under
the Plan shall not be deemed compensation for purposes of computing benefits
under any retirement plan of the Company or any Parent or Subsidiary and shall
not affect any benefits under any other benefit plan now or subsequently in
effect under which the availability or amount of benefits is related to the
level of compensation (unless required by specific reference in any such other
plan to awards under the Plan).

 

(g)
leave of absence, unless otherwise determined by the Board or the Committee, as
the case may be, prior to the commencement thereof, shall not be considered a
termination of employment. Any Stock Option or Stock Appreciation Right granted
or awards made under the Plan shall not be affected by any change of employment,
so long as the holder continues to be an employee of the Company or any Parent
or Subsidiary.

 

(h)
Except as otherwise expressly provided in the Plan or in any Stock Option
agreement, Stock Appreciation Right, Restricted Stock agreement, Deferred Stock
agreement or any Other Stock-Based Award agreement, no right or benefit under
the Plan may be alienated, sold, assigned, hypothecated, pledged, exchanged,
transferred, encumbranced or charged, and any attempt to alienate, sell, assign,
hypothecate, pledge, exchange, transfer, encumber or charge the same shall be
void. No right or benefit hereunder shall in any manner be subject to the debts,
contracts or liabilities of the person entitled to such benefit.

 

(i)
The obligations of the Company with respect to all Stock Options, Stock
Appreciation Right and awards under the Plan shall be subject to (A) all
applicable laws, rules and regulations, and such approvals by any governmental
agencies as may be required, including, without limitation, the effectiveness of
a registration statement under the Securities Act, and (B) the rules and
regulations of any securities exchange or association on which the Stock may be
listed or traded.

 

(j)
If any of the terms or provisions of the Plan conflicts with the requirements of
Rule 16b-3 as in effect from time to time, or with the requirements of any other
applicable law, rule or regulation, and with respect to Incentive Stock Options,
Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of said Rule
16b-3, and with respect to Incentive Stock Options, Section 422 of the Code.
With respect to Incentive Stock Options, if the Plan does not contain any
provision required to be included herein under Section 422 of the Code, such
provision shall be deemed to be incorporated herein with the same force and
effect as if such provision had been set out at length herein.

 
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(k)
The Board or the Committee, as the case may be, may terminate any Stock Option
or other award made under the Plan if a written agreement relating thereto is
not executed and returned to the Company within 30 days after such agreement has
been delivered to the optionee or Participant for his or her execution.

 

(l)
The grant of awards pursuant to the Plan shall not in any way effect the right
or power of the Company to make reclassifications, reorganizations or other
changes of or to its capital or business structure or to merge, consolidate,
liquidate, sell or otherwise dispose of all or any part of its business or
assets.

 

(m)
Notwithstanding anything in this Plan to the contrary, if the Participant is a
Specified Employee and payment of his/her Deferred Restricted Stock Account or
Deferred Stock is being made on account of his/her separation from service, such
payment shall be made not earlier than the sixth month anniversary of such
Specified Employee’s separation from service.

 
Section 15. Effective Date of Plan.
 
The Plan shall be effective as of the date of the approval and adoption thereof
at a meeting of the stockholders of the Company.
 
Section 16. Term of Plan.
 
No Stock Option, Restricted Stock award, Deferred Stock award, Stock
Appreciation Right or Other Stock-Based Award shall be granted pursuant to the
Plan after the tenth anniversary of the effective date of the Plan, but awards
granted on or prior to such tenth anniversary may extend beyond that date.

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