Exhibit 10.8
 
2010 RESTATED EMPLOYEE STOCK PLAN
 
Restatement No. 1 Dated August 1, 2018
 
1.           
Purpose. This 2010 Restated Employee Stock Plan (the “Plan”) restates and
integrates the provisions of the original 2010 Employee Stock Plan and all duly
adopted amendments thereto as of August 1, 2018. The Plan is intended to provide
incentives: (a) to the officers and other employees of SharpSpring, Inc. (the
“Company”), its parent (if any) and any present or future subsidiaries of the
Company (collectively, “Related Corporations”) by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as “incentive stock options” under Section 422(b) of the
Internal Revenue Code of 1986 (the “Code”) (“ISO” or “ISOs”); (b) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to purchase stock in the Company pursuant to
options granted hereunder which do not qualify as ISOs (“Non-Qualified Option”
or “Non-Qualified Options”); (c) to directors, officers, employees and
consultants of the Company and Related Corporations by providing them with
awards of stock in the Company (“Awards”); and (d) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with opportunities to make direct purchases of stock in the Company
(“Purchases”). Both ISOs and Non-Qualified Options are referred to hereafter
individually as an “Option” and collectively as “Options”. Options, Awards, and
authorizations to make Purchases are referred to hereafter collectively as
“Stock Rights.” As used herein, the terms “parent” and “subsidiary” mean “parent
corporation” and “subsidiary corporation” respectively, as those terms are
defined in Section 425 of the Code.
 
2.
Administration of the Plan.
 
A.
The Plan shall be administered by either (i) the Board of Directors of the
Company (the “Board”); or (ii) a Stock Plan Committee (the “Board Committee”),
appointed by the Board, pursuant to the requirements of paragraph 2.D. herein;
or (iii) a Management Stock Plan Committee (the “Management Committee”),
appointed by the Board, pursuant to the requirements of paragraph 2.E. For
General purposes, where the context so allows, each of the Board Committee and
the Management Committee shall be referred to hereafter collectively as the
“Committee”). Subject to paragraphs 2.D., and 2.E., as applicable, herein and
the terms of the Plan, the Committee, if so appointed, shall have the authority
to (i) determine the employees of the Company and Related Corporations (from
among the class of employees eligible under paragraph 3 to receive ISOs) to whom
ISOs may be granted, and to determine (from among the class of individuals and
entities eligible under paragraph 3 to receive Non-Qualified Options and Awards
and to make Purchases) to whom Non-Qualified Options, Awards and authorizations
to make Purchases may be granted; (ii) determine the time or times at which
Options or Awards may be granted or Purchases made; (iii) determine the option
price of shares subject to each Option, which price shall not be less than the
minimum price specified in paragraph 6, and the purchase price of shares subject
to each Purchases; (iv) determine whether each Option granted shall be an ISO or
a Non-Qualified Option; (v) determine (subject to paragraph 7) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (vi) determine whether restrictions such as repurchase options are to be
imposed on shares subject to Options, Awards and Purchases and the nature of
such restrictions, if any, and (vii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. All references in this Plan to the
Committee shall mean the Board if no Committee has been appointed. If the
Committee determines to issue a Non-Qualified Option, it shall take whatever
actions it deems necessary, under Section 422A of the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated as an ISO. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under it.
 
 

 
 
B.
The Board Committee may select one of its members as its chairman, and shall
hold meetings at such time and places it may determine. Acts by a majority of
the Board Committee, or actions reduced to or approved in writing by a majority
of the members of the Committee, shall be the valid acts of the Board Committee.
From time to time the Board may increase the size of the Board Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused, or
remove all members of the Board Committee and thereafter directly administer the
Plan.
 
C.
Stock Rights may be granted to members of the Board in accordance with paragraph
2.D. herein and the provisions of this Plan applicable to other eligible
persons. Members of the Board who are either (i) eligible for Stock Rights
pursuant to the Plan or (ii) have been granted Stock Rights may vote on any
matters affecting the administration of the Plan or the grant of any Stock
Rights pursuant to the Plan.
 
D.
Each transaction, i.e. each grant of Stock Rights to any eligible participant
under the Plan who is an officer or director of the Company, (i) shall be
approved in advance to the granting of such right, by either the full Board or
the Board Committee which shall be composed solely of two or more Non-Employee
Directors; (ii) shall be approved in advance to the granting of such right, or
ratified no later than the next annual meeting of shareholders, by the
affirmative votes of the holders of a majority of the securities of the issuer
present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable laws of the state or other jurisdiction in which
the Company is incorporated; or the written consent of the holders of a majority
of the securities of the issuer entitled to vote; or (iii) shall be held by the
officer or director for a period of six months following the date of such
acquisition, provided that with respect to Options, at least six months shall
elapse from the date of the acquisition/grant of the Options to the date of
disposition of the Options (other than upon exercise or conversion) or its
underlying equity security. A Non-Employee Director is a director who is not, at
the time of such grant an officer of the Company or any Related Corporation, or
otherwise employed by the Company or any Related Corporation; does not receive
compensation, either directly or indirectly, from the Corporation or any Related
Corporation, for services rendered as a consultant or in any capacity other than
a director, except for an amount that does not exceed the dollar amount for
which disclosure is required pursuant to Item 404(a) of Regulation S-K
promulgated under the Securities Act of 1933, as amended; does not possess an
interest in any other transaction for which disclosure would be required
pursuant to Item 404(a) of Regulation S-K; and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of
Regulation S-K.
 
E.
Each transaction, i.e. each grant of Stock Rights (other than Awards and
Purchases) to any eligible participant under the Plan who is not (i) a “Covered
Employee” as defined in Section 162(m)(3) of the Code of 1986, as interpreted by
IRS Notice 2007-49; (ii) an “officer” of the Company within the meaning of
Section 16 of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (“Executive Officer”); or (iii) a director of the
Company, shall be approved in advance to the granting of such right, by either
the full Board, the Board Committee or the full Management Committee. The
Management Committee shall be composed solely of one or more Executive Officers,
subject to any limitations imposed by the Board, as determined by resolution of
the Board, which shall include the number of Stock Rights (other than Awards and
Purchases) the Management Committee shall have the authority to grant hereunder.
No member of the Management Committee may designate himself or herself as a
recipient of any Stock Right. The Management Committee has no authority to grant
Awards or Purchases under the Plan. Each member of the Management Committee
shall serve as a member of the Management Committee at the pleasure of the
Board.
 
 

 
 
 
3.           
Eligible Employees and Others. ISOs may be granted to any employee of the
Company or any Related Corporation. Those officers and directors of the Company
who are not employees may not be granted ISOs under the Plan. Non-Qualified
Options, Awards and authorizations to make Purchases may be granted to any
director (whether or not an employee), officer, employee or consultant of the
Company or any Related Corporation. The Committee may take into consideration a
recipient's individual circumstances in determining whether to grant an ISO, a
Non-Qualified Option or an authorization to make a Purchase. Granting of any
Stock Rights to any individual or entity shall neither entitle that individual
or entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
 
4.           
Stock. The stock subject to Options, Awards and Purchases shall be authorized
but unissued shares of Common Stock of the Company, $.001 par value (the “Common
Stock”), or shares of Common Stock reacquired by the Company in any manner.  The
aggregate number of shares that may be issued pursuant to the Plan is 2,600,000,
subject to adjustment as provided in paragraph 13.  Any such shares may be
issued as ISOs, Non-Qualified Options or Awards, or to persons or entities
making Purchases, so long as the number of shares issued does not exceed such
number, as adjusted. If any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, or if the Company shall
reacquire any unvested shares issued pursuant to Awards or Purchases, the
unpurchased shares subject to such Options and any unvested shares so reacquired
by the Company shall again be available for grants of Stock Rights under the
Plan.
 
5.           Granting of Stock Rights. Stock Rights may be granted under the
Plan at any time after June 16, 2010 and prior to June 15, 2020. Any Stock Right
issued pursuant to subsection (iii) of paragraph 2.D. shall be held for the
period of time described in that subsection. The date of grant of a Stock Right
under the Plan will be the date specified by the Committee at the time it grants
the Stock Right; provided, however, that such date shall not be prior to the
date on which the Committee acts to approve the grant. The Committee shall have
the right, with the consent of the optionee, to convert an ISO granted under the
Plan to a Non-Qualified Option pursuant to paragraph 16. Awards and the price of
Purchases shall be at fair market value as determined by the Board of Directors
Except as expressly provided below in paragraph 13 with respect to changes in
capitalization and stock dividends, in the event the Company pays any dividend
on its outstanding Common Stock, no such dividend shall be paid on any
restricted Common Stock acquired on the exercise of a Stock Right prior to the
vesting of such Stock Right.
 
6.            
Minimum Option Price; ISO Limitations.
 
A.
The price per share specified in the agreement relating to each Non-Qualified
Option granted under the Plan shall in no event be less than the lesser of (i)
the book value per share of Common Stock as of the end of the fiscal year of the
Company immediately preceding the date of such grant, or (ii) 25 percent of the
fair market value per share of Common Stock on the date of such grant.
 
 

 
 
B.
The price per share specified in the agreement relating to each ISO granted
under the Plan shall not be less than the fair market value per share of Common
Stock on the date of such grant. In the case of an ISO to be granted to an
employee owning stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or any Related Corporation,
the price per share specified in the agreement relating to such ISO shall not be
less than 110 percent of the fair market value per share of Common Stock on the
date of the grant.
 
C.
To the extent that the aggregate fair market value (determined at the time the
option is granted) of stock with respect to which options meeting the
requirements of Section 422(b) are exercisable for the first time by any
individual during any calendar year exceeds $100,000, then such options shall
not be treated as incentive stock options pursuant to Section 422(b). The
preceding sentence shall be applied by taking options into account in the order
in which they were granted.
 
D.
If, at the time an Option is granted under the Plan, the Company's Common Stock
is publicly traded, “fair market value” shall be determined as of the last
business day for which the prices or quotes discussed in this sentence are
available prior to the date such Option is granted and shall mean (i) the
average (on that date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common Stock on the NASDAQ
National Market List, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or average of bid prices)
last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market List. However, if the Common Stock is not publicly traded at the
time an Option is granted under the Plan, “fair market value” shall be deemed by
the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
 
7.           
Option Duration. Subject to earlier termination as provided in paragraphs 9 and
10, each Option shall expire on the date specified by the Committee, but not
more than (i) ten years from the date of grant in the case of Non-Qualified
Options, (ii) ten years from the date of grant in the case of ISOs generally,
and (iii) five years from the date of grant in the case of ISOs granted to an
employee owning stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or any Related Corporation.
Subject to earlier termination as provided in paragraphs 9 and 10, the term of
each ISO shall be the term set forth in the original instrument granting such
ISO, except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to paragraph 16.
 
8.           
Exercise of Option. Subject to the provisions of paragraphs 9 through 12, each
Option granted under the Plan shall be exercisable as follows:
 
 

 
 
A.
The Option shall either be fully exercisable on the date of grant or shall
become exercisable thereafter in such installments as the Committee may specify.
 
B.
Once an installment becomes exercisable it shall remain exercisable until
expiration or termination of the Option, unless otherwise specified by the
Committee.
 
C.
Each Option or installment may be exercised at any time or from time to time, in
whole or in part, for up to the total number of shares with respect to which it
is then exercisable.
 
D.
The Committee shall have the right to accelerate the date of exercise of any
installment of any Option; provided that the Committee shall not accelerate the
exercise date of any installment of any Option granted to any employee as an ISO
(and not previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation contained
in Section 422A(b)(7) of the Code, as described in paragraph 6(c).
 
E.
With respect to any Options granted to any officer or director of the Company
pursuant to subsection (iii) of paragraph 2.D. herein, at least six months shall
elapse from the date of the acquisition/grant of the Option to the date of
disposition of the Option (other than upon exercise or conversion) or its
underlying equity security.
 
9.           
Termination of Employment. If an ISO optionee ceases to be employed by the
Company and all Related Corporations other than by reason of death or disability
as defined in paragraph 10, no further installments of his ISOs shall become
exercisable, and his ISOs shall terminate after the passage of 90 days from the
date of termination of his employment, but in no event later than on their
specified expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
paragraph 16. Employment shall be considered as continuing uninterrupted during
any bona fide leave of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such optionee's right
to reemployment is guaranteed by statute. A bona fide leave of absence with the
written approval of the Committee shall not be considered an interruption of
employment under the Plan, provided that such written approval contractually
obligates the Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or among the Company
and Related Corporations, so long as the optionee continues to be an employee of
the Company or any Related Corporation. Nothing in the Plan shall be deemed to
give any grantee of any Stock Right the right to be retained in employment or
other service by the Company or any Related Corporation for any period of time.
 
10. 
Death; Disability.
 
A.
If an ISO optionee ceases to be employed by the Company and all Related
Corporations by reason of his death, any ISO of his may be exercised, to the
extent of the number of shares with respect to which he could have exercised it
on the date of his death, by his estate, personal representative or beneficiary
who has acquired the ISO by will or by the laws of descent and distribution, at
any time prior to the earlier of the ISO's specified expiration date or one year
from the date of the optionee's death.
 
 

 
 
B.
If an ISO optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to the extent of
the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the ISO's specified expiration date or
one year from the date of the termination of the optionee's employment. For the
purposes of the Plan, the term “disability” shall mean “permanent and total
disability” as defined in Section 22(e)(3) of the Code or successor statute.
 
11.           
Assignability. No ISO shall be assignable or transferable by the grantee except
by will or by the laws of descent and distribution, and during the lifetime of
the grantee each ISO shall be exercisable only by him. All other Stock Rights
shall be freely transferable subject to the limitations imposed by subsection
(iii) of paragraph 2.D. herein, if applicable.
 
12.           
Terms and Conditions of Options. Options shall be evidenced by instruments
(which need not be identical) in such forms as the Committee may from time to
time approve. Such instruments shall conform to the terms and conditions set
forth in paragraphs 6 through 11 hereof and may contain such other provisions as
the Committee deems advisable which are not inconsistent with the Plan,
including restrictions applicable to shares of Common Stock issuable upon
exercise of Options. In granting any Non-Qualified Option, the Committee may
specify that such Non-Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other termination and cancellation
provisions as the Committee may determine. The Committee may from time to time
confer authority and responsibility on one or more of its own members and/or one
or more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable from time to time to carry out the terms of such
instruments.
 
13.           
Adjustments. Upon the occurrence of any of the following events, an optionee's
rights with respect to Options granted to him hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in the written
agreement between the optionee and the Company relating to such Option:
 
A. 
If the shares of Common Stock shall be subdivided or combined into a greater or
small number of shares of it the Company shall issue any shares of Common Stock
as a stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination or
stock dividend.
 
B. 
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 or otherwise
(an “Acquisition”), 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, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect to
the outstanding shares of Common Stock in connection with the Acquisition; or
(ii) upon written notice to the optionees, provided that all Options must be
exercised, to the extent then exercisable, within a specified number of days of
the date of such notice, at the end of which period the Options shall terminate;
or (iii) terminate all Options in exchange for a cash payment equal to the
excess of the fair market value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
 
 

 
 
C. 
In the event of a recapitalization or reorganization of the Company (other than
a transaction described in subparagraph B above) pursuant to which securities of
the Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee upon exercising an Option shall be entitled
to receive for the purchase price paid upon such exercise the securities he
would have received if he had exercised his Option prior to such
recapitalization or reorganization.
 
D. 
Notwithstanding the foregoing, any adjustments made pursuant to subparagraphs A,
B, or C with respect to ISOs shall be made only after the Committee, after
consulting with counsel for the Company, determines whether such adjustments
would constitute a “modification” of such ISOs (as that term is defined in
Section 425 of the Code) or would cause any adverse tax consequences for the
holders of such ISOs. If the Committee determines that such adjustments made
with respect to ISOs would constitute a modification of such ISOs, it may
refrain from making such adjustments.
 
E. 
In the event of the proposed dissolution or liquidating of the Company, each
Option will terminate immediately prior to the consummation of such proposed
action or at such other time and subject to such other conditions as shall be
determined by the Committee.
 
F. 
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to Options. No adjustments shall be made
for dividends paid in cash or in property other than securities of the Company.
 
G. 
No fractional shares shall be issued under the Plan and the optionee shall
receive from the Company cash in lieu of such fractional shares.
 
H. 
Upon the happening of any of the foregoing events described in subparagraphs A,
B, and C above, the class and aggregate number of shares set forth in paragraph
6 hereof that are subject to Stock Rights which previously have been or
subsequently may be granted under the Plan shall also be appropriately adjusted
to reflect the events described in such subparagraphs. The Committee or the
Successor Board shall determine the specific adjustments to be made under this
paragraph 13 and, subject to paragraph 2, its determination shall be conclusive.
 
If any person or entity owning restricted Common Stock obtained by exercise of a
Stock Right made hereunder receives shares of securities or cash in connection
with a corporate transaction described in subparagraphs A, B, or C above as a
result of owning such restricted Common Stock, such shares or securities or cash
shall be subject to all of the conditions and restrictions applicable to the
restricted Common Stock with respect to which such shares or securities or cash
were issued, unless otherwise determined by the Committee or the Successor
Board.
 
 

 
 
14.           
Means of Exercising Stock Rights. A Stock Right (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Stock Right being
exercised and specify the number of shares to which such Stock Right is being
exercised, accompanied by full payment of the purchase price therefor either (a)
in United States dollars in cash or by check, or (b) at the discretion of the
Committee, through delivery of shares of Common Stock having a fair market value
equal as of the date of the exercise to the cash exercise price of the Stock
Right, or (c) at the discretion of the Committee, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in Section 1274
(d) of the Code, or a combination of (a), (b), and (c) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (a), (b), or (c) of the preceding
sentence, such discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of a Stock Right shall not have the rights of
a shareholder with respect to the shares covered by his Stock Right until the
date of issuance of a stock certificate to him for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
 
15.           Term and Amendment of Plan. This Plan was adopted by the Board and
approved by the stockholders of the Company on June 15, 2010. This Plan was
subsequently amended seven times and all such amendments received the necessary
Board approval and stockholder approval. On August 1, 2018, the Board restated
this Plan to incorporate the previous amendments into this Plan. The Plan shall
expire on June 14, 2020 (except as to Options outstanding on that date). Subject
to the provisions of paragraph 5 above, Stock Rights may be granted under the
Plan prior to the date of stockholder approval of the Plan. The Board may
terminate or amend the Plan in any respect at any time, except that, without
approval by the shareholders of the Company to the extent shareholder approval
is necessary to satisfy any Applicable Laws obtained within 12 months before or
after the Board adopts a resolution authorizing any of the following actions:
(a) the total number of shares that may be issued under the Plan may not be
increased (except by adjustments pursuant to paragraph 13); (b) the provisions
of paragraph 3 regarding eligibility for grants of ISOs may not be modified
(except by adjustment pursuant to Paragraph 13); (c) the provisions of paragraph
6 regarding the exercise price at which shares may be offered pursuant to ISO's
may not be modified (except by adjustment pursuant to paragraph 13) and (d) the
expiration date of the Plan may not be extended. Except as provided in the fifth
sentence of this paragraph 15, in no event may action of the Board or
Stockholders alter or impair the rights of a grantee, without his consent, under
any Stock Right previously granted to him. “Applicable Laws” means the
requirements related to or implicated by the administration of the Plan under
applicable state corporate law, United States federal and state securities laws,
the Code, any stock exchange or quotation system on which the shares of Common
Stock are listed or quoted, and the applicable laws of any foreign country or
jurisdiction where Stock rights are granted under the Plan.
 
 

 
 
16.           Conversion of ISOs into Non-Qualified Options; Termination of
ISOs. The Committee, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such options;
except that any reduction in the exercise price of such options are subject to
approval by the stockholders of the Company at the next Meeting of Stockholders.
At the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
 
17.           
Application of Funds. The proceeds received by the Company from the sale of
shares pursuant to Options granted and Purchases authorized under the Plan shall
be used for general corporate purposes.
 
18.           
Governmental Regulation. The Company's obligation to sell and deliver shares of
the Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such shares.
 
19.           
Withholding of Additional Income Taxes. Upon the exercise of a Non-Qualified
Option, the grant of an Award, the making of a Purchase of Common Stock for less
than its fair market value, the making of a Disqualifying Disposition (as
defined in paragraph 20) or the vesting of restricted Common Stock acquired on
the exercise of a Stock Right hereunder, the Company, in accordance with Section
3402(a) of the Code, may require the optionee, Award recipient or purchaser to
pay additional withholding taxes in respect of the amount that is considered
compensation includible in such person's gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the grant of an
Award, (iii) the making of a Purchase of Common Stock for less than its fair
market value, or (iv) the vesting of restricted Common Stock acquired by
exercising a Stock Right on the grantee's payment of such additional withholding
taxes.
 
20.           
Notice to Company of Disqualifying Disposition. Each employee who receives an
ISO must agree to notify the Company in writing immediately after the employee
makes a Disqualifying Disposition of any Common Stock acquired pursuant to the
exercise of an ISO. A Disqualifying Disposition is any disposition (including
any sale) of such Common Stock before the later of (a) two years after the date
the employee was granted the ISO or (b) one year after the date the Common Stock
was transferred to the employee.
 
21.           
Governing Law: Construction. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of the State
of Delaware. In construing this Plan, the singular shall include the plural and
the masculine general shall include the feminine and neuter, unless the context
otherwise requires.