Exhibit 10.1

Explanatory Note:   The information below is presented on a pro forma basis,
after giving effect to (i) the 1-for-10 reverse split that was effected on
June 23, 2016, (ii) the first amendment to the 2016 Omnibus Incentive Plan,
adopted on November 3, 2016, which increased the number of shares of common
stock available for grant under the 2016 Omnibus Incentive Plan from 5,000,000
to 10,000,000 shares, (iii) the second amendment to the 2016 Omnibus Incentive
Plan, adopted on July 13, 2017, which increased the number of shares of common
stock available for grant under the 2016 Omnibus Incentive Plan from 10,000,000
to 13,000,000 shares, and (iv) the third amendment to the 2016 Omnibus Incentive
Plan, adopted on June 28, 2018, which increased the number of shares of common
stock available for grant under the 2016 Omnibus Incentive Plan from 13,000,000
to 18,000,000 shares.

LILIS ENERGY, INC.
2016 OMNIBUS INCENTIVE PLAN

Lilis Energy, Inc. sets forth herein the terms and conditions of its 2016
Omnibus Incentive Plan:

1. PURPOSE
 

The Plan is intended to enhance the Company’s and its Affiliates’ ability to
attract and retain highly qualified officers, Non-Employee Directors, key
employees and Consultants, and to motivate such officers, Non-Employee
Directors, key employees and Consultants to serve the Company and its Affiliates
and to expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company.
To this end, the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units, unrestricted
stock, other share-based awards and cash awards. Any of these awards may, but
need not, be made as performance incentives to reward attainment of performance
goals in accordance with the terms and conditions hereof. Stock options granted
under the Plan may be non-qualified stock options or incentive stock options, as
provided herein. Upon becoming effective, the Plan replaces, and no further
awards shall be made under, the Prior Plan.
 
2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:
 
2.1.   “Affiliate” means any company or other trade or business that “controls,”
is “controlled by” or is “under common control with” the Company within the
meaning of Rule 405 of Regulation C under the Securities Act, including any
Subsidiary.

2.2.   “Annual Incentive Award” means a cash-based Performance Award with a
performance period that is the Company’s fiscal year or other 12-month (or
shorter) performance period as specified under the terms and conditions of the
Award as approved by the Board.

2.3.   “Award” means a grant of an Option, SAR, Restricted Stock, RSU, Other
Share-based Award or cash award under the Plan.

2.4.   “Award Agreement” means a written agreement between the Company and a
Grantee, or notice from the Company or an Affiliate to a Grantee that evidences
and sets out the terms and conditions of an Award.
 
2.5.   “Board” means the Board of Directors of the Company.

2.6.   “Cause” shall be defined as that term is defined in the Grantee’s offer
letter or other applicable employment agreement; or, if there is no such
definition, “Cause” means, unless otherwise provided in the applicable Award
Agreement: (i) the commission of any act by the Grantee constituting financial
dishonesty against the Company or its Affiliates (which act would be chargeable
as a crime under applicable law); (ii) the Grantee’s engaging in any other act
of dishonesty, fraud, intentional misrepresentation, moral turpitude, illegality
or harassment that would (a) materially adversely affect the business or the
reputation of the Company or any of its Affiliates with their respective current
or prospective customers, suppliers, lenders or other third parties with whom
such entity does or might do business or (b) expose the Company or any of its
Affiliates to a risk of civil or criminal legal damages, liabilities or
penalties; (iii) the repeated failure by the Grantee to follow the directives of
the Chief Executive Officer or Chief Financial Officer of the Company or any of
its Affiliates or the Board; or (iv) any material misconduct, violation of the
Company’s or Affiliates’ policies, or willful and deliberate non-performance of
duty by the Grantee in connection with the business affairs of the Company or
its Affiliates. A Separation from Service for Cause shall be deemed to include a
determination by the Committee or its designee following a Grantee’s Separation
from Service that circumstances existing prior to such Separation from Service
would have entitled the Company or any Affiliate to have terminated the
Grantee’s service for Cause.

2.7.   “Change in Control” shall have the meaning set forth in Section 15.3.2.
 
2.8.   “Code” means the Internal Revenue Code of 1986.

2.9.   “Committee” means the Compensation Committee of the Board or any
committee or other person or persons designated by the Board to administer the
Plan. The Board will cause the Committee to satisfy the applicable requirements
of any securities exchange on which the Common Stock may then be listed. For
purposes of Awards to Covered Employees intended to qualify as
“performance-based compensation” under Section 162(m), to the extent required by
Section 162(m), Committee means all of the members of the Committee who are
“outside directors” within the meaning of Section 162(m). For purposes of Awards
to Grantees who are subject to Section 16 of the Exchange Act, Committee means
all of the members of the Committee who are “non-employee directors” within the
meaning of Rule 16b-3 adopted under the Exchange Act. All references in the Plan
to the Board shall mean such Committee or the Board to the extent the Committee
has been designated by the Board to administer the Plan.

2.10.   “Company” means Lilis Energy, Inc., a Nevada corporation, or any
successor corporation.

2.11.   “Common Stock” means the common stock of the Company.

2.12.   “Consultant” means a consultant or advisor that provides bona fide
services to the Company or any Affiliate and who qualifies as a consultant or
advisor under Form S-8.

2.13.   “Corporate Transaction” means a reorganization, merger, statutory share
exchange, consolidation, sale of all or substantially all of the Company’s
assets or the acquisition of assets or stock of another entity by the Company or
other corporate transaction involving the Company or any of its Subsidiaries.

2.14.   “Covered Employee” means a Grantee who is a “covered employee” within
the meaning of Section 162(m), as qualified by Section 12.4.

2.15.   “Disability” shall be defined as that term is defined in the Grantee’s
offer letter or other applicable employment agreement; or, if there is no such
definition, “Disability” means, unless otherwise provided in the applicable
Award Agreement, the Grantee is unable to perform each of the essential duties
of such Grantee’s position by reason of a medically determinable impairment that
is potentially permanent in character or that can be expected to last for a
continuous period of not less than 12 months; provided, however, that, with
respect to rules regarding expiration of an Incentive Stock Option following
termination of the Grantee’s Service, “Disability” means “permanent and total
disability” as set forth in Code Section 22(e)(3).

2.16.   “Effective Date” means May 23, 2016, the date the Plan was approved by
the Stockholders.
 
2.17.   “Exchange Act” means the Securities Exchange Act of 1934.

2.18.   “Fair Market Value” of a Share as of a particular date means (i) if the
Common Stock is listed on a national securities exchange, the closing or last
price of the Common Stock on the composite tape or other comparable reporting
system for the applicable date, or if the applicable date is not a trading day,
the trading day immediately preceding the applicable date, or (ii) if the Common
Stock is not then listed on a national securities exchange, the closing or last
price of the Common Stock quoted by an established quotation service for
over-the-counter securities, or (iii) if the Common Stock is not then listed on
a national securities exchange or quoted by an established quotation service for
over-the-counter securities, or the value of the Common Stock is not otherwise
determinable, such value as determined by the Board.

2.19.   “Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law or sister-in-law, including adoptive relationships, of the
applicable individual, any person sharing the applicable individual’s household
(other than a tenant or employee), a trust in which any one or more of these
persons have more than 50% of the beneficial interest, a foundation in which any
one or more of these persons (or the applicable individual) control the
management of assets, and any other entity in which one or more of these persons
(or the applicable individual) own more than 50% of the voting interests.

2.20.   “Grant Date” means the latest to occur of  (i) the date as of which the
Board approves an Award, (ii) the date on which the recipient of an Award first
becomes eligible to receive an Award under Section 6 or (iii) such other date as
may be specified by the Board in the Award Agreement.

2.21.   “Grantee” means a person who receives or holds an Award.
 
2.22.   “Incentive Stock Option” means an “incentive stock option” within the
meaning of Code Section 422.
 
2.23.   “Non-Employee Director” means a member of the Board or the board of
directors of an Affiliate, in each case who is not an officer or employee of the
Company or any Affiliate.

2.24.   “Non-qualified Stock Option” means an Option that is not an Incentive
Stock Option.

2.25.   “Option” means an option to purchase one or more Shares pursuant to the
Plan.

2.26.   “Option Price” means the exercise price for each Share subject to an
Option.

2.27.   “Other Share-based Awards” means Awards consisting of Share units, or
other Awards, valued in whole or in part by reference to, or otherwise based on,
Common Stock, other than Options, SARs, Restricted Stock and RSUs.

2.28.   “Performance Award” means an Award made subject to the attainment of
performance goals (as described in Section 12) over a performance period
established by the Committee, and includes an Annual Incentive Award.

2.29.   “Person” means an individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act.

2.30.   “Plan” means this Lilis Energy, Inc. Omnibus Incentive Plan.

2.31.   “Prior Plan” means the Lilis Energy, Inc. 2012 Equity Incentive Plan
(formerly the Recovery Energy, Inc. 2012 Equity Incentive Plan).

2.32.   “Purchase Price” means the per Share purchase price for each grant of
Restricted Stock.
 
2.33.   “Restricted Period” shall have the meaning set forth in Section 10.1.

2.34.   “Restricted Stock” means restricted Shares that are subject to specified
terms and conditions, awarded to a Grantee pursuant to Section 10.

2.35.   “Restricted Stock Unit” or “RSU” means a bookkeeping entry representing
the right to receive Shares subject to the satisfaction of specified terms and
conditions, awarded to a Grantee pursuant to Section 10.

2.36.   “SAR Exercise Price” means the per Share exercise price of a SAR.

2.37.   “SEC” means the United States Securities and Exchange Commission.

2.38.   “Section 162(m)” means Code Section 162(m).

2.39.   “Section 409A” means Code Section 409A.

2.40.   “Securities Act” means the Securities Act of 1933.

2.41.   “Separation from Service” means the termination of a Service Provider’s
Service, whether initiated by the Service Provider or the Company or an
Affiliate; provided that if any Award governed by Section 409A is to be
distributed on a Separation from Service, then the definition of Separation from
Service for such purposes shall comply with the definition provided in Section
409A.

2.42.   “Service” means service as a Service Provider to the Company or an
Affiliate. Unless otherwise provided in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in interrupted or
terminated Service, so long as the Grantee continues to be a Service Provider to
the Company or an Affiliate.

2.43.   “Service Provider” means an employee, officer, Non-Employee Director or
Consultant of the Company or an Affiliate.

2.44.   “Share” means a share of Common Stock.

2.45.   “Stock Appreciation Right” or “SAR” means a right granted to a Grantee
pursuant to Section 9.

2.46.   “Stockholder” means a stockholder of the Company.

2.47.   “Subsidiary” means any “subsidiary corporation” of the Company within
the meaning of Code Section 424(f).

2.48.   “Substitute Award” means any Award granted in assumption of or in
substitution for an award of an entity acquired by the Company or an Affiliate
or with which the Company or an Affiliate combines.

2.49.   “Ten Percent Stockholder” means an individual who owns more than 10% of
the total combined voting power of all classes of outstanding stock of the
Company, its parent or any of its Subsidiaries. In determining stock ownership,
the attribution rules of Code Section 424(d) shall be applied.

2.50.   “Termination Date” means the date that is 10 years after the Effective
Date, unless the Plan is earlier terminated by the Board under Section 5.2.

3. ADMINISTRATION OF THE PLAN

3.1. General. The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company’s certificate of
incorporation and bylaws and applicable law. The Board shall have the power and
authority to delegate its responsibilities hereunder to the Committee, which
shall have full authority to act in accordance with its charter, and with
respect to the power and authority of the Board to act hereunder, all references
to the Board shall be deemed to include a reference to the Committee, unless
such power or authority is specifically reserved by the Board. Except as
specifically provided in Section 14 or as otherwise may be required by
applicable law, regulatory requirement or the certificate of incorporation or
the bylaws of the Company, the Board shall have full power and authority to take
all actions and to make all determinations required or provided for under the
Plan, any Award or any Award Agreement, and shall have full power and authority
to take all such other actions and make all such other determinations not
inconsistent with the specific terms and conditions of the Plan that the Board
deems to be necessary or appropriate to the administration of the Plan. The
Committee shall administer the Plan; provided that, the Board shall retain the
right to exercise the authority of the Committee to the extent consistent with
applicable law and the applicable requirements of any securities exchange on
which the Common Stock may then be listed. All actions, determinations and
decisions by the Board or the Committee under the Plan, any Award or any Award
Agreement shall be in the Board’s (or the Committee’s, as applicable) sole
discretion and shall be final, binding and conclusive. Without limitation, the
Board shall have full and final power and authority, subject to the other terms
and conditions of the Plan, to: (i) designate Grantees; (ii) determine the type
or types of Awards to be made to Grantees; (iii) determine the number of Shares
to be subject to an Award; (iv) establish the terms and conditions of each Award
(including the Option Price of any Option, the nature and duration of any
restriction or condition (or provision for lapse thereof) relating to the
vesting, exercise, transfer or forfeiture of an Award or the Shares subject
thereto and any terms or conditions that may be necessary to qualify Options as
Incentive Stock Options); (v) prescribe the form of each Award Agreement; and
(vi) amend, modify or supplement the terms or conditions of any outstanding
Award including the authority, in order to effectuate the purposes of the Plan,
to modify Awards to foreign nationals or individuals who are employed outside
the United States to recognize differences in local law, tax policy or custom.

To the extent permitted by applicable law, the Board may delegate its authority
as identified herein to any individual or committee of individuals (who need not
be directors), including the authority to make Awards to Grantees who are not
subject to Section 16 of the Exchange Act or who are not Covered Employees. To
the extent that the Board delegates its authority to make Awards as provided by
this Section 3.1, all references in the Plan to the Board’s authority to make
Awards and determinations with respect thereto shall be deemed to include the
Board’s delegate. Any such delegate shall serve at the pleasure of, and may be
removed at any time by, the Board.

3.2. No Repricing. Notwithstanding any provision herein to the contrary, the
repricing of Options or SARs is prohibited without prior approval of the
Stockholders. For this purpose, a “repricing” means any of the following (or any
other action that has the same effect as any of the following): (i) changing the
terms or conditions of an Option or SAR to lower its Option Price or SAR
Exercise Price; (ii) any other action that is treated as a “repricing” under
generally accepted accounting principles; and (iii) repurchasing for cash or
canceling an Option or SAR at a time when its Option Price or SAR Exercise Price
is greater than the Fair Market Value of the underlying Shares in exchange for
another Award, unless the cancellation and exchange occurs in connection with a
change in capitalization or similar change under Section 15. A cancellation and
exchange under clause (iii) would be considered a “repricing” regardless of
whether it is treated as a “repricing” under generally accepted accounting
principles and regardless of whether it is voluntary on the part of the Grantee.

3.3. Award Agreements; Clawbacks. The grant of any Award may be contingent upon
the Grantee executing the appropriate Award Agreement. The Company may retain
the right in an Award Agreement to cause a forfeiture of the gain realized by a
Grantee on account of actions taken by the Grantee in violation or breach of or
in conflict with any employment agreement, non-competition agreement, any
agreement prohibiting solicitation of employees or clients of the Company or any
Affiliate thereof or any confidentiality obligation with respect to the Company
or any Affiliate thereof, or otherwise in competition with the Company or any
Affiliate thereof, to the extent specified in such Award Agreement applicable to
the Grantee. Furthermore, the Company may annul an Award if the Grantee is
terminated for Cause.

All awards, amounts or benefits received or outstanding under the Plan shall be
subject to clawback, cancellation, recoupment, rescission, payback, reduction or
other similar action in accordance with the terms of any Company clawback or
similar policy or any applicable law related to such actions, as may be in
effect from time to time. A Grantee’s acceptance of an Award shall be deemed to
constitute the Grantee’s acknowledgement of and consent to the Company’s
application, implementation and enforcement of any applicable Company clawback
or similar policy that may apply to the Grantee, whether adopted prior to or
following the Effective Date, and any provision of applicable law relating to
clawback, cancellation, recoupment, rescission, payback or reduction of
compensation, and the Grantee’s agreement that the Company may take such actions
as may be necessary to effectuate any such policy or applicable law, without
further consideration or action.
3.4. Deferral Arrangement. The Board may permit or require the deferral of any
Award payment into a deferred compensation arrangement, subject to such rules
and procedures as it may establish and in accordance with Section 409A, which
may include provisions for the payment or crediting of interest or dividend
equivalents, including converting such credits into deferred Share units.

3.5. No Liability. No member of the Board or of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
Award or Award Agreement.

3.6. Book Entry. Notwithstanding any other provision of the Plan to the
contrary, the Company may elect to satisfy any requirement under the Plan for
the delivery of stock certificates through the use of book entry.

4. STOCK SUBJECT TO THE PLAN

4.1. Authorized Number of Shares. Subject to adjustment under Section 15, the
aggregate number of Shares authorized to be awarded under the Plan shall not
exceed 18,000,000. In addition, Shares underlying any outstanding award granted
under the Prior Plan that, following the Effective Date, expires, or is
terminated, surrendered or forfeited for any reason without issuance of Shares
shall be available for the grant of new Awards. As provided in Section 1, no new
awards shall be granted under the Prior Plan following the Effective Date.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued Shares, treasury Shares or Shares purchased on the open market or
otherwise, all as determined by the Board from time to time.

4.2. Share Counting.

4.2.1. General. Each Share granted in connection with an Award shall be counted
as one Share against the limit in Section 4.1, subject to the provisions of this
Section 4.2.

4.2.2. Cash-Settled Awards. Any Award settled in cash shall not be counted as
issued Shares for any purpose under the Plan.

4.2.3. Expired or Terminated Awards. If any Award expires, or is terminated,
surrendered or forfeited, in whole or in part, the unissued Shares covered by
such Award shall again be available for the grant of Awards.
 
4.2.4. Payment of Option Price or Tax Withholding in Shares. If Shares issuable
upon exercise, vesting or settlement of an Award, or Shares owned by a Grantee
(which are not subject to any pledge or other security interest) are surrendered
or tendered to the Company in payment of the Option Price or Purchase Price of
an Award or any taxes required to be withheld in respect of an Award, in each
case, in accordance with the terms and conditions of the Plan and any applicable
Award Agreement, such surrendered or tendered Shares shall again be available
for the grant of Awards. For a stock-settled SAR, only the net Shares actually
issued upon exercise of the SAR shall be counted against the limit in Section
4.1.

4.2.5. Substitute Awards. Substitute Awards shall not be counted against the
number of Shares reserved under the Plan.

4.3. Award Limits

4.3.1. Incentive Stock Options. Subject to adjustment under Section 15,
18,000,000 Shares available for issuance under the Plan shall be available for
issuance as Incentive Stock Options.

4.3.2. Individual Award Limits for Section 162(m) — Share-Based Awards. Subject
to adjustment under Section 15, the maximum number of each type of Award (other
than cash-based Performance Awards) intended to qualify as “performance-based
compensation” under Section 162(m) granted to any Grantee in any calendar year
shall not exceed the following number of Shares: (i) Options and SARs: 1,000,000
Shares; and (ii) all share-based Performance Awards (including Restricted Stock,
RSUs and Other Share-based Awards that are Performance Awards): 1,000,000
Shares.

4.3.3. Individual Award Limits for Section 162(m) — Cash-Based Awards. The
maximum amount of cash-based Performance Awards intended to constitute
“performance-based compensation” under Section 162(m) granted to any Grantee in
any calendar year shall not exceed the following: (i) Annual Incentive Awards:
$10,000,000; and (ii) all other cash-based Performance Awards: $10,000,000.
 
4.3.4. Limits on Awards to Non-Employee Directors. The maximum number of Shares
subject to Awards granted during any calendar year to any Non-Employee Director,
taken together with any cash fees paid to such Non-Employee Director during the
year, shall not exceed $500,000 in total value (calculating the value of any
such Awards based on the grant date fair value of such Awards for financial
reporting purposes).

5. EFFECTIVE DATE, DURATION AND AMENDMENTS

5.1. Term. The Plan shall be effective as of the Effective Date, provided that
it has been approved by the Stockholders. The Plan shall terminate automatically
on the 10-year anniversary of the Effective Date and may be terminated on any
earlier date as provided in Section 5.2.

5.2. Amendment and Termination of the Plan. The Board may, at any time and from
time to time, amend, suspend or terminate the Plan as to any Awards that have
not been made. An amendment shall be contingent on approval of the Stockholders
to the extent stated by the Board, required by applicable law or required by
applicable securities exchange listing requirements. No Awards shall be made
after the Termination Date. The applicable terms and conditions of the Plan, and
any terms and conditions applicable to Awards granted prior to the Termination
Date shall survive the termination of the Plan and continue to apply to such
Awards. No amendment, suspension or termination of the Plan shall, without the
consent of the Grantee, materially impair rights or obligations under any Award
theretofore awarded.

6. AWARD ELIGIBILITY AND LIMITATIONS.

6.1. Service Providers. Subject to this Section 6.1, Awards may be made to any
Service Provider as the Board may determine and designate from time to time.

6.2. Successive Awards. An eligible person may receive more than one Award,
subject to such restrictions as are provided herein.

6.3. Stand-Alone, Additional, Tandem, and Substitute Awards. Awards may be
granted either alone or in addition to, in tandem with or in substitution or
exchange for, any other Award or any award granted under another plan of the
Company, any Affiliate or any business entity to be acquired by the Company or
an Affiliate, or any other right of a Grantee to receive payment from the
Company or any Affiliate. Such additional, tandem or substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or
exchange for another award, the Board shall have the right to require the
surrender of such other award in consideration for the grant of the new Award.
Subject to the requirements of applicable law, the Board may make Awards in
substitution or exchange for any other award under another plan of the Company,
any Affiliate or any business entity to be acquired by the Company or an
Affiliate. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Company or
any Affiliate, in which the value of Shares subject to the Award is equivalent
in value to the cash compensation (for example, RSUs or Restricted Stock).

7. AWARD AGREEMENT.
 

The grant of any Award may be contingent upon the Grantee executing an
appropriate Award Agreement, in such form or forms as the Board shall from time
to time determine. Without limiting the foregoing, an Award Agreement may be
provided in the form of a notice that provides that acceptance of the Award
constitutes acceptance of all terms and conditions of the Plan and the notice.
Award Agreements granted from time to time or at the same time need not contain
similar provisions but shall be consistent with the terms and conditions of the
Plan. Each Award Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Non-qualified Stock Options or Incentive Stock
Options, and in the absence of such specification such options shall be deemed
Non-qualified Stock Options.

8. TERMS AND CONDITIONS OF OPTIONS.
 

8.1. Option Price. The Option Price of each Option shall be fixed by the Board
and stated in the related Award Agreement. The Option Price of each Option
(except those that constitute Substitute Awards) shall be at least the Fair
Market Value on the Grant Date; provided, however, that in the event that a
Grantee is a Ten Percent Stockholder as of the Grant Date, the Option Price of
an Option granted to such Grantee that is intended to be an Incentive Stock
Option shall be not less than 110% of the Fair Market Value on the Grant Date.
In no case shall the Option Price of any Option be less than the par value of a
Share.

8.2. Vesting. Subject to Section 8.3, each Option shall become exercisable at
such times and under such conditions (including performance requirements) as
stated in the Award Agreement.
 
8.3. Term. Each Option shall terminate, and all rights to purchase Shares
thereunder shall cease, 10 years from the Grant Date, or under such
circumstances and on such date prior thereto as is set forth in the Plan or as
may be fixed by the Board and stated in the related Award Agreement; provided,
however, that in the event that the Grantee is a Ten Percent Stockholder, an
Option granted to such Grantee that is intended to be an Incentive Stock Option
at the Grant Date shall not be exercisable after the expiration of five years
from its Grant Date.

8.4. Limitations on Exercise of Option. Notwithstanding any other provision of
the Plan, in no event may any Option be exercised, in whole or in part, (i)
prior to the date the Plan is approved by the Stockholders as provided herein or
(ii) after the occurrence of an event that results in termination of the Option.

8.5. Method of Exercise. An Option that is exercisable may be exercised by the
Grantee’s delivery of a notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. To be effective, notice of exercise
must be made in accordance with procedures established by the Company from time
to time.

8.6. Rights of Holders of Options. Unless otherwise provided in the applicable
Award Agreement, an individual holding or exercising an Option shall have none
of the rights of a Stockholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject Shares or to
direct the voting of the subject Shares) until the Shares covered thereby are
fully paid and issued to him. Except as provided in Section 15 or the related
Award Agreement, no adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date of such issuance.

8.7. Delivery of Stock Certificates. Subject to Section 3.6, promptly after the
exercise of an Option by a Grantee and the payment in full of the Option Price,
such Grantee shall be entitled to the issuance of a stock certificate or
certificates evidencing his or her ownership of the Shares subject to the
Option.

8.8. Limitations on Incentive Stock Options. An Option shall constitute an
Incentive Stock Option only (i) if the Grantee is an employee of the Company or
any Subsidiary, (ii) to the extent specifically provided in the related Award
Agreement and (iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation
shall be applied by taking Options into account in the order in which they were
granted.

9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

9.1. Right to Payment. A SAR shall confer on the Grantee a right to receive,
upon exercise thereof, the excess of  (i) the Fair Market Value on the date of
exercise over (ii) the SAR Exercise Price, as determined by the Board. The Award
Agreement for a SAR (except those that constitute Substitute Awards) shall
specify the SAR Exercise Price, which shall be fixed on the Grant Date as not
less than the Fair Market Value on that date. SARs may be granted alone or in
conjunction with all or part of an Option or at any subsequent time during the
term of such Option or in conjunction with all or part of any other Award. A SAR
granted in tandem with an outstanding Option following the Grant Date of such
Option shall have a grant price that is equal to the Option Price; provided,
however, that the SAR’s grant price may not be less than the Fair Market Value
on the Grant Date of the SAR to the extent required by Section 409A.

9.2. Other Terms. The Board shall determine the time or times at which and the
circumstances under which a SAR may be exercised in whole or in part (including
based on achievement of performance goals and/or future service requirements),
the time or times at which SARs shall cease to be or become exercisable
following Separation from Service or upon other conditions, the method of
exercise, whether or not a SAR shall be in tandem or in combination with any
other Award and any other terms and conditions of any SAR.

9.3. Term of SARs. The term of a SAR shall be determined by the Board; provided,
however, that such term shall not exceed 10 years.

9.4. Payment of SAR Amount. Upon exercise of a SAR, a Grantee shall be entitled
to receive payment from the Company (in cash or Shares, as determined by the
Board) in an amount determined by multiplying: (i) the difference between the
Fair Market Value on the date of exercise over the SAR Exercise Price; by (ii)
the number of Shares with respect to which the SAR is exercised.

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

10.1. Restrictions. At the time of grant, the Board may establish a period of
time (a “Restricted Period”) and any additional restrictions including the
satisfaction of corporate or individual performance objectives applicable to an
Award of Restricted Stock or RSUs. Each Award of Restricted Stock or RSUs may be
subject to a different Restricted Period and additional restrictions. Neither
Restricted Stock nor RSUs may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the Restricted Period or prior to the
satisfaction of any other applicable restrictions.

10.2. Restricted Stock Certificates. The Company shall issue Shares, in the name
of each Grantee to whom Restricted Stock has been granted, stock certificates or
other evidence of ownership representing the total number of Shares of
Restricted Stock granted to the Grantee, as soon as reasonably practicable after
the Grant Date. The Board may provide in an Award Agreement that either (i) the
Secretary of the Company shall hold such certificates for the Grantee’s benefit
until such time as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee;
provided, however, that such certificates shall bear a legend or legends that
comply with the applicable securities laws and regulations and make appropriate
reference to the restrictions imposed under the Plan and the Award Agreement.

10.3. Rights of Holders of Restricted Stock. Unless the otherwise provided in
the applicable Award Agreement and subject to Section 17.10, holders of
Restricted Stock shall have rights as Stockholders, including voting and
dividend rights.

10.4. Rights of Holders of RSUs

10.4.1. Settlement of RSUs. RSUs may be settled in cash or Shares, as determined
by the Board and set forth in the Award Agreement. The Award Agreement shall
also set forth whether the RSUs shall be settled (i) within the time period
specified for “short term deferrals” under Section 409A or (ii) otherwise within
the requirements of Section 409A, in which case the Award Agreement shall
specify upon which events such RSUs shall be settled.

10.4.2. Voting and Dividend Rights. Unless otherwise provided in the applicable
Award Agreement and subject to Section 17.10, RSU holders shall not have rights
as Stockholders, including voting or dividend or dividend equivalents rights.

10.4.3. Creditor’s Rights. An RSU holder shall have no rights other than those
of a general creditor of the Company. RSUs represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Award Agreement.

10.5. Purchase of Restricted Stock. The Grantee shall be required, to the extent
required by applicable law, to purchase the Restricted Stock from the Company at
a Purchase Price equal to the greater of  (i) the aggregate par value of the
Shares represented by such Restricted Stock or (ii) the Purchase Price, if any,
specified in the related Award Agreement. If specified in the Award Agreement,
the Purchase Price may be deemed paid by Services already rendered. The Purchase
Price shall be payable in a form described in Section 11 or, if so determined by
the Board, in consideration for past Services rendered.

10.6. Delivery of Shares. Upon the expiration or termination of any Restricted
Period and the satisfaction of any other conditions prescribed by the Board, the
restrictions applicable to Shares of Restricted Stock or RSUs settled in Shares
shall lapse, and, unless otherwise provided in the applicable Award Agreement, a
stock certificate for such Shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case
may be.

11. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK.
 

11.1. General Rule. Payment of the Option Price for the Shares purchased
pursuant to the exercise of an Option or the Purchase Price for Restricted Stock
shall be made in cash or in cash equivalents acceptable to the Company, except
as provided in this Section 11.

11.2. Surrender of Shares. To the extent the Award Agreement so provides,
payment of the Option Price for Shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock may be made all or in part
through the tender to the Company of Shares, which Shares shall be valued, for
purposes of determining the extent to which the Option Price or Purchase Price
for Restricted Stock has been paid, at their Fair Market Value on the date of
exercise or surrender. Notwithstanding the foregoing, in the case of an
Incentive Stock Option, the right to make payment in the form of already-owned
Shares may be authorized only at the time of grant.

11.3. Cashless Exercise. With respect to an Option only (and not with respect to
Restricted Stock), to the extent permitted by law and to the extent the Award
Agreement so provides, payment of the Option Price may be made all or in part by
delivery (on a form acceptable to the Company) of an irrevocable direction to a
licensed securities broker acceptable to the Company to sell Shares and to
deliver all or part of the sales proceeds to the Company in payment of the
Option Price and any withholding taxes described in Section 17.3.

11.4. Other Forms of Payment. To the extent the Award Agreement so provides,
payment of the Option Price or the Purchase Price for Restricted Stock may be
made in any other form that is consistent with applicable laws, regulations and
rules, including the Company’s withholding of Shares otherwise due to the
exercising Grantee.

12. TERMS AND CONDITIONS OF PERFORMANCE AWARDS.
 

12.1. Performance Conditions. The right of a Grantee to exercise or receive a
grant or settlement of any Award, and the timing thereof, may be subject to such
performance conditions as may be specified by the Committee. The Committee may
use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions.

12.2. Performance Awards Granted to Designated Covered Employees. If and to the
extent that the Committee determines that a Performance Award to be granted to a
Grantee who is designated by the Committee as likely to be a Covered Employee
should qualify as “performance-based compensation” for purposes of Section
162(m), the grant, exercise and/or settlement of such Performance Award shall be
contingent upon achievement of pre-established performance goals and other terms
and conditions set forth in this Section 12.2. Notwithstanding anything herein
to the contrary, the Committee may provide for Performance Awards to Covered
Employees that are not intended to qualify as “performance-based compensation”
for purposes of Section 162(m).

12.2.1. Performance Goals Generally. The performance goals for Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 12.2. Performance goals shall be
objective and shall otherwise meet the requirements of Section 162(m), including
the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being “substantially
uncertain.” The Committee may determine that Performance Awards shall be
granted, exercised and/or settled upon achievement of any one performance goal
or that two or more of the performance goals must be achieved as a condition to
grant, exercise and/or settlement of the Performance Awards. Performance goals
may be established on a Company-wide basis, or with respect to one or more
business units, divisions, Affiliates or business segments, as applicable.
Performance goals may be absolute or relative (to the performance of one or more
comparable companies or indices). To the extent consistent with the requirements
of Section 162(m), the Committee may determine at the time that goals under this
Section 12 are established the extent to which measurement of performance goals
may exclude the impact of charges for restructuring, discontinued operations,
extraordinary items, debt redemption or retirement, asset write downs,
litigation or claim judgments or settlements, acquisitions or divestitures,
foreign exchange gains and losses and other extraordinary, unusual or
non-recurring items, and the cumulative effects of tax or accounting changes
(each as defined by generally accepted accounting principles and as identified
in the Company’s financial statements or other SEC filings). Performance goals
may differ for Performance Awards granted to any one Grantee or to different
Grantees.

12.2.2. Business Criteria. One or more of the following business criteria for
the Company, on a consolidated basis, and/or specified Affiliates or business
units of the Company (except with respect to the total stockholder return and
earnings per share criteria), shall be used exclusively by the Committee in
establishing performance goals for Performance Awards: (i) cash flow; (ii)
earnings per share, as adjusted for any stock split, stock dividend or other
recapitalization; (iii) earnings measures (including EBIT and EBITDA)); (iv)
return on equity; (v) total stockholder return; (vi) share price performance, as
adjusted for any stock split, stock dividend or other recapitalization; (vii)
return on capital; (viii) revenue; (ix) income; (x) profit margin; (xi) return
on operating revenue; (xii) brand recognition or acceptance; (xiii) customer
metrics (including customer satisfaction, customer retention, customer
profitability or customer contract terms); (xiv) productivity; (xv) expense
targets; (xvi) market share; (xvii) cost control measures; (xviii) balance sheet
metrics; (xix) strategic initiatives; (xx) implementation, completion or
attainment of measurable objectives with respect to recruitment or retention of
personnel or employee satisfaction; (xxi) return on assets; (xxii) growth in net
sales; (xxiii) the ratio of net sales to net working capital; (xxiv) stockholder
value added; (xxv) improvement in management of working capital items
(inventory, accounts receivable or accounts payable); (xxvi) sales from
newly-introduced products; (xxvii) successful completion of, or achievement of
milestones or objectives related to, financing or capital raising transactions,
strategic acquisitions or divestitures, joint ventures, partnerships,
collaborations or other transactions; (xxviii) product quality, safety,
productivity, yield or reliability (on time and complete orders); (xxix) funds
from operations; (xxx) regulatory body approval for commercialization of a
product; (xxxi) debt levels or reduction or debt ratios; (xxxii) economic value;
(xxxiii) operating efficiency; (xxxiv) research and development achievements; or
(xxxv) any combination of the forgoing business criteria; provided, however,
that such business criteria shall include any derivations of business criteria
listed above (e.g., income shall include pre-tax income, net income and
operating income).

12.2.3. Timing for Establishing Performance Goals. Performance goals shall be
established not later than 90 days after the beginning of any performance period
applicable to Performance Awards, or at such other date as may be required or
permitted for “performance-based compensation” under Section 162(m).

12.2.4. Settlement of Performance Awards; Other Terms. Settlement of Performance
Awards may be in cash, Shares, other Awards or other property, as determined by
the Committee. The Committee may reduce the amount of a settlement otherwise to
be made in connection with Performance Awards.

12.3. Written Determinations. All determinations by the Committee as to the
establishment of performance goals, the amount of any Performance Award pool or
individual Performance Awards and as to the achievement of performance goals
relating to Performance Awards, shall be made in writing in the case of any
Award intended to qualify as “performance-based compensation” under Section
162(m) as required by Section 162(m). To the extent permitted by Section 162(m),
the Committee may delegate any responsibility relating to such Performance
Awards.

12.4. Status of Section 12.2 Awards under Section 162(m). It is the intent of
the Company that Performance Awards under Section 12.2 granted to persons who
are designated by the Committee as likely to be Covered Employees within the
meaning of Section 162(m) shall, if so designated by the Committee, qualify as
“performance-based compensation” within the meaning of Section 162(m).
Accordingly, the terms and conditions of Section 12.2, including the definitions
of Covered Employee and other terms used therein, shall be interpreted in a
manner consistent with Section 162(m). The foregoing notwithstanding, because
the Committee cannot determine with certainty whether a given Grantee will be a
Covered Employee with respect to a fiscal year that has not yet been completed,
the term Covered Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards, as likely to be a
Covered Employee with respect to that fiscal year or any subsequent fiscal year.
If any provision of the Plan or any agreement relating to such Performance
Awards does not comply or is inconsistent with the requirements of Section
162(m), such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements.

13. OTHER SHARE-BASED AWARDS

13.1. Grant of Other Share-based Awards. Other Share-based Awards may be granted
either alone or in addition to or in conjunction with other Awards. Other
Share-based Awards may be granted in lieu of other cash or other compensation to
which a Service Provider is entitled from the Company or may be used in the
settlement of amounts payable in Shares under any other compensation plan or
arrangement of the Company. Subject to the provisions of the Plan, the Board
shall have the authority to determine the persons to whom and the time or times
at which such Awards will be made, the number of Shares to be granted pursuant
to such Awards, and all other terms and conditions of such Awards. Unless the
Board determines otherwise, any such Award shall be confirmed by an Award
Agreement, which shall contain such provisions as the Board determines to be
necessary or appropriate to carry out the intent of the Plan with respect to
such Award.

13.2.
Terms of Other Share-based Awards. Any Common Stock subject to Awards made under
this Section 13 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, performance or deferral period lapses.

14. REQUIREMENTS OF LAW

14.1. General. The Company shall not be required to sell or issue any Shares
under any Award if the sale or issuance of such Shares would constitute a
violation by the Grantee, any other individual exercising an Option or the
Company of any provision of any law or regulation of any governmental authority,
including any federal or state securities laws or regulations. If at any time
the Board determines that the listing, registration or qualification of any
Shares subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of Shares hereunder, no Shares may be
issued or sold to the Grantee or any other individual exercising an Option
pursuant to such Award unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Company, and any delay caused thereby shall in no way affect
the date of termination of the Award. Specifically, in connection with the
Securities Act, upon the exercise of any Option or the delivery of any Shares
underlying an Award, unless a registration statement under such Act is in effect
with respect to the Shares covered by such Award, the Company shall not be
required to sell or issue such Shares unless the Board has received evidence
satisfactory to it that the Grantee or any other individual exercising an Option
may acquire such Shares pursuant to an exemption from registration under the
Securities Act. The Company may, but shall in no event be obligated to, register
any securities covered hereby pursuant to the Securities Act. The Company shall
not be obligated to take any affirmative action in order to cause the exercise
of an Option or the issuance of Shares pursuant to the Plan to comply with any
law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until
the Shares covered by such Option are registered or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction apply) shall be deemed conditioned upon the effectiveness
of such registration or the availability of such an exemption.

14.2. Rule 16b-3. During any time when the Company has a class of equity
security registered under Section 12 of the Exchange Act, it is the intent of
the Company that Awards and the exercise of Options granted to officers and
directors hereunder will qualify for the exemption provided by Rule 16b-3 under
the Exchange Act. To the extent that any provision of the Plan or action by the
Board or Committee does not comply with the requirements of Rule 16b-3, it shall
be deemed inoperative to the extent permitted by law and deemed advisable by the
Board, and shall not affect the validity of the Plan. In the event that Rule
16b-3 is revised or replaced, the Board may modify the Plan in any respect
necessary to satisfy the requirements of, or to take advantage of any features
of, the revised exemption or its replacement.

15. EFFECT OF CHANGES IN CAPITALIZATION

15.1. Changes in Common Stock. If  (i) the number of outstanding Shares is
increased or decreased or the Shares are changed into or exchanged for a
different number or kind of shares or other securities of the Company on account
of any recapitalization, reclassification, stock split, reverse split,
combination of Shares, exchange of Shares, stock dividend or other distribution
payable in capital stock, or other increase or decrease in such Shares effected
without receipt of consideration by the Company occurring after the Effective
Date or (ii) there occurs any spin-off, split-up, extraordinary cash dividend or
other distribution of assets by the Company, the number and kinds of shares for
Awards granted (including the per-Grantee maximums set forth in Section 4) shall
be equitably adjusted by the Company; provided that any such adjustment shall
comply with Section 409A. In addition, in the event of any such increase or
decease in the number of outstanding Shares or other transaction described in
clause (ii) above, the number and kind of Shares for which Awards are
outstanding and the Option Price per Share of outstanding Options and SAR
Exercise Price per Share of outstanding SARs shall be equitably adjusted;
provided that any such adjustment shall comply with Section 409A.

15.2. Effect of Certain Transactions. Except as otherwise provided in an Award
Agreement and subject to the provisions of Section 15.3, in the event of a
Corporate Transaction, the Plan and the Awards shall continue in effect in
accordance with their respective terms and conditions, except that following a
Corporate Transaction either (i) each outstanding Award shall be treated as
provided for in the agreement entered into in connection with the Corporate
Transaction or (ii) if not so provided in such agreement, each Grantee shall be
entitled to receive in respect of each Share subject to any outstanding Awards,
upon exercise or payment or transfer in respect of any Award, the same number
and kind of stock, securities, cash, property or other consideration that each
holder of a Share was entitled to receive in the Corporate Transaction in
respect of a Share; provided, however, that, unless otherwise determined by the
Board, such stock, securities, cash, property or other consideration shall
remain subject to all of the conditions, restrictions and performance criteria
that were applicable to the Awards prior to such Corporate Transaction. Without
limiting the generality of the foregoing, the treatment of outstanding Options
and SARs pursuant to this Section 15.2 in connection with a Corporate
Transaction in which the consideration paid or distributed to the Stockholders
is not entirely shares of common stock of the acquiring or resulting corporation
may include the cancellation of outstanding Options and SARs upon consummation
of the Corporate Transaction as long as, at the election of the Board, (i) the
holders of affected Options and SARs have been given a period of at least 15
days prior to the date of the consummation of the Corporate Transaction to
exercise the Options or SARs (to the extent otherwise exercisable) or (ii) the
holders of the affected Options and SARs are paid (in cash or cash equivalents)
in respect of each Share covered by the Option or SAR being canceled an amount
equal to the excess, if any, of the per Share price paid or distributed to
stockholders in the Corporate Transaction (the value of any non-cash
consideration to be determined by the Board) over the Option Price or SAR
Exercise Price, as applicable. For avoidance of doubt, (1) the cancellation of
Options and SARs pursuant to clause (ii) of the preceding sentence may be
effected notwithstanding anything to the contrary contained in the Plan or any
Award Agreement and (2) if the amount determined pursuant to clause (ii) of the
preceding sentence is zero or less, the affected Option or SAR may be cancelled
without any payment therefore. The treatment of any Award as provided in this
Section 15.2 shall be conclusively presumed to be appropriate for purposes of
Section 15.1.

15.3. Change in Control

15.3.1. Consequences of a Change in Control. For Awards granted to Non-Employee
Directors, except as may otherwise be provided in the applicable Award
Agreement, upon a Change in Control all such outstanding Awards that may be
exercised shall become fully exercisable, all restrictions with respect to such
outstanding Awards shall lapse and become vested and non-forfeitable, and any
specified performance goals with respect to outstanding Awards shall be deemed
to be satisfied at target.

For Awards granted to any other Service Providers, except as may otherwise be
provided in the applicable Award Agreement, either of the following provisions
shall apply, depending on whether, and the extent to which, such Awards are
assumed, converted or replaced by the resulting entity in a Change in Control:
(i) To the extent such Awards are not assumed, converted or replaced by the
resulting entity in the Change in Control, then upon the Change in Control such
outstanding Awards that may be exercised shall become fully exercisable, all
restrictions with respect to such outstanding Awards, other than for Performance
Awards, shall lapse and become vested and non-forfeitable, and for any
outstanding Performance Awards the target payout opportunities attainable under
such Awards shall be deemed to have been fully earned as of the Change in
Control based upon the greater of  (A) an assumed achievement of all relevant
performance goals at the “target” level or (B) the actual level of achievement
of all relevant performance goals against target as of the Company’s fiscal
quarter end preceding the Change in Control and the Award shall become vested
pro rata based on the portion of the applicable performance period completed
through the date of the Change in Control; (ii) To the extent such Awards are
assumed, converted or replaced by the resulting entity in the Change in Control,
if, within two years after the Change in Control, the Service Provider has a
Separation from Service either (1) by the Company other than for Cause or (2) by
the Service Provider for “good reason” (as defined in the applicable Award
Agreement), then such outstanding Awards that may be exercised shall become
fully exercisable, all restrictions with respect to such outstanding Awards,
other than for Performance Awards, shall lapse and become vested and
non-forfeitable, and for any outstanding Performance Awards the target payout
opportunities attainable under such Awards shall be deemed to have been fully
earned as of the Separation from Service based upon the greater of  (A) an
assumed achievement of all relevant performance goals at the “target” level or
(B) the actual level of achievement of all relevant performance goals against
target as of the Company’s fiscal quarter end preceding the Change in Control
and the Award shall become vested pro rata based on the portion of the
performance period completed through the date of the Separation from Service.

15.3.2. Change in Control Defined. Unless otherwise provided in the applicable
Award Agreement, a “Change in Control” means the consummation of any of the
following events: (i) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act), other than the Company or any subsidiary,
affiliate (within the meaning of Rule 144 promulgated under the Securities Act)
or employee benefit plan of the Company, of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 51% or more of the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Voting
Securities”); or (ii) A reorganization, merger, consolidation or
recapitalization of the Company (a “Business Combination”), other than a
Business Combination in which 51% or more of the combined voting power of the
outstanding voting securities of the surviving or resulting entity immediately
following the Business Combination is held by the Persons who, immediately prior
to the Business Combination, were the holders of the Voting Securities; or (iii)
A complete liquidation or dissolution of the Company, or a sale of all or
substantially all of the assets of the Company.
 

Notwithstanding the foregoing, if it is determined that an Award is subject to
the requirements of Section 409A and payable upon a Change in Control, the
Company will not be deemed to have undergone a Change in Control for purposes of
the Plan unless the Company is deemed to have undergone a “change in control
event” pursuant to the definition of such term in Section 409A.

15.4. Adjustments. Adjustments under this Section 15 related to Shares or
securities of the Company shall be made by the Board. No fractional Shares or
other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any adjustment shall be eliminated in each case by
rounding downward to the nearest whole Share.

16. NO LIMITATIONS ON COMPANY

The making of Awards shall not affect or limit in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge, consolidate, dissolve or
liquidate, or to sell or transfer all or any part of its business or assets.

17. TERMS APPLICABLE GENERALLY TO AWARDS

17.1. Disclaimer of Rights. No provision in the Plan or in any Award Agreement
shall be construed to confer upon any individual the right to remain in the
employ or service of the Company or any Affiliate, or to interfere in any way
with any contractual or other right or authority of the Company or any Affiliate
either to increase or decrease the compensation or other payments to any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company or any Affiliate. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
provided in the applicable Award Agreement, no Award shall be affected by any
change of duties or position of the Grantee, so long as such Grantee continues
to be a Service Provider. The obligation of the Company to pay any benefits
pursuant to the Plan shall be interpreted as a contractual obligation to pay
only those amounts described herein, in the manner and under the conditions
prescribed herein. The Plan shall in no way be interpreted to require the
Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any Grantee or beneficiary under the
terms and conditions of the Plan.

17.2. Nonexclusivity of the Plan. Neither the adoption of the Plan nor the
submission of the Plan to the Stockholders for approval shall be construed as
creating any limitations upon the right and authority of the Board or its
delegate to adopt such other compensation arrangements as the Board or its
delegate determines desirable.

17.3. Withholding Taxes. The Company or an Affiliate, as the case may be, shall
have the right to deduct from payments of any kind otherwise due to a Grantee
any federal, state or local taxes required by law to be withheld (i) with
respect to the vesting of or other lapse of restrictions applicable to an Award,
(ii) upon the issuance of any Shares upon the exercise of an Option or SAR or
(iii) otherwise due in connection with an Award. At the time of such vesting,
lapse or exercise, the Grantee shall pay to the Company or the Affiliate, as the
case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the
prior approval of the Board, the Grantee may elect to satisfy such obligations,
or the Company may require such obligations to be satisfied, in whole or in
part, (i) by causing the Company or the Affiliate to withhold the minimum
required number of Shares otherwise issuable to the Grantee as may be necessary
to satisfy such withholding obligation or (ii) by delivering to the Company or
the Affiliate Shares already owned by the Grantee. The Shares so delivered or
withheld shall have an aggregate Fair Market Value equal to such withholding
obligations. The Fair Market Value used to satisfy such withholding obligation
shall be determined by the Company or the Affiliate as of the date that the
amount of tax to be withheld is to be determined. A Grantee who has made an
election pursuant to this Section 17.3 may satisfy his or her withholding
obligation only with Shares that are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.

17.4. Other Provisions. Each Award Agreement may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Board. In
the event of any conflict between the terms and conditions of an employment
agreement and the Plan, the terms and conditions of the employment agreement
shall govern.

17.5. Severability. If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms and conditions, and all provisions
shall remain enforceable in any other jurisdiction.

17.6. Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the State of Nevada without giving effect to the principles of
conflicts of law, and applicable Federal law.

17.7. Section 409A. The Plan is intended to comply with Section 409A and,
accordingly, to the maximum extent permitted, the Plan shall be interpreted and
administered to be in compliance therewith. Any payments described in the Plan
that are due within the “short-term deferral period” as defined in Section 409A
shall not be treated as deferred compensation unless applicable laws require
otherwise. Notwithstanding anything to the contrary in the Plan, to the extent
required to avoid accelerated taxation and tax penalties under Section 409A,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to the Plan during the six-month period immediately following
the Grantee’s Separation from Service shall instead be paid on the first payroll
date after the six-month anniversary of the Grantee’s Separation from Service
(or the Grantee’s death, if earlier). Notwithstanding the foregoing, neither the
Company nor the Board shall have any obligation to take any action to prevent
the assessment of any excise tax or penalty on any Grantee under Section 409A
and neither the Company nor the Board shall have any liability to any Grantee
for such tax or penalty.

17.8. Separation from Service. The Board shall determine the effect of a
Separation from Service upon Awards, and such effect shall be set forth in the
applicable Award Agreement. Without limiting the foregoing, the Board may
provide in the Award Agreements at the time of grant, or any time thereafter
with the consent of the Grantee, the actions that will be taken upon the
occurrence of a Separation from Service, including accelerated vesting or
termination, depending upon the circumstances surrounding the Separation from
Service.

17.9. Transferability of Awards

17.9.1. Transfers in General. Except as provided in Section 17.9.2, no Award
shall be assignable or transferable by a Grantee, other than by will or the laws
of descent and distribution, and, during the lifetime of the Grantee, only the
Grantee personally (or the Grantee’s personal representative) may exercise
rights under the Plan.
 
17.9.2. Family Transfers. If authorized in the applicable Award Agreement, a
Grantee may transfer, not for value, all or part of an Award (other than
Incentive Stock Options) to any Family Member. For the purpose of this Section
17.9.2, a “not for value” transfer is a transfer that is (i) a gift, (ii) a
transfer under a domestic relations order in settlement of marital property
rights or (iii) a transfer to an entity in which more than 50% of the voting
interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 17.9.2, any
such Award shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred
Awards are prohibited except to Family Members of the original Grantee in
accordance with this Section 17.9.2 or by will or the laws of descent and
distribution.

17.10. Dividends and Dividend Equivalent Rights. If specified in the Award
Agreement, the recipient of an Award may be entitled to receive, currently or on
a deferred basis, dividends or dividend equivalents with respect to the Common
Stock or other securities covered by an Award. The terms and conditions of a
dividend equivalent right may be set forth in the Award Agreement. Dividend
equivalents credited to a Grantee may be paid currently or may be deemed to be
reinvested in additional Shares or other securities of the Company at a price
per unit equal to the Fair Market Value on the date that such dividend was paid
to stockholders, as determined by the Board. Notwithstanding the foregoing, in
no event will dividends or dividend equivalents on any Award that is subject to
the achievement of performance criteria be payable before the Award has become
earned and payable.

17.11. Plan Construction. In the Plan, unless otherwise stated, the following
uses apply: (i) references to a statute or law refer to the statute or law and
any amendments and any successor statutes or laws, and to all valid and binding
governmental regulations, court decisions and other regulatory and judicial
authority issued or rendered thereunder, as amended, or their successors, as in
effect at the relevant time; (ii) in computing periods from a specified date to
a later specified date, the words “from” and “commencing on” (and the like) mean
“from and including,” and the words “to,” “until” and “ending on” (and the like)
mean “to and including”; (iii) indications of time of day shall be based upon
the time applicable to the location of the principal headquarters of the
Company; (iv) the words “include,” “includes” and “including” (and the like)
mean “include, without limitation,” “includes, without limitation” and
“including, without limitation” (and the like), respectively; (v) all references
to articles and sections are to articles and sections in the Plan; (vi) all
words used shall be construed to be of such gender or number as the
circumstances and context require; (vii) the captions and headings of articles
and sections have been inserted solely for convenience of reference and shall
not be considered a part of the Plan, nor shall any of them affect the meaning
or interpretation of the Plan or any of its provisions; (viii) any reference to
an agreement, plan, policy, form, document or set of documents, and the rights
and obligations of the parties under any such agreement, plan, policy, form,
document or set of documents, shall mean such agreement, plan, policy, form,
document or set of documents as amended from time to time, and any and all
modifications, extensions, renewals, substitutions or replacements thereof; and
(ix) all accounting terms not specifically defined shall be construed in
accordance with generally accepted accounting principles.