WINNER MEDICAL GROUP INC.
 
2006 EQUITY INCENTIVE PLAN
 
As amended and restated effective October 7, 2007
 
ARTICLE 1.
GENERAL PURPOSE OF PLAN; DEFINITIONS.

 
1.1          Purpose. The purposes of this 2006 Equity Incentive Plan are (a) to
enable the Company, and the Company’s subsidiaries and affiliates, to attract
and retain highly qualified personnel who will contribute to the success of the
Company, including the Company’s subsidiaries and certain affiliates, and (b) to
provide incentives to participants in this 2006 Equity Incentive Plan that are
linked directly to increases in stockholder value which will therefore inure to
the benefit of all stockholders of the Company.
 
1.2          Definitions. For purposes of this Plan, except as otherwise defined
in this Plan, capitalized terms shall have the meanings assigned to them in this
Section 1.2.
 
“Administrator” means the Board, any Committees or such delegates as shall be
administering the Plan in accordance with Section 2 of the Plan.
 
“Affiliate” means any entity or person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, another entity, where “control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract or otherwise.
 
“Applicable Law” means the requirements relating to the administration of stock
option and stock award plans under U.S. federal and state laws, any stock
exchange or quotation system on which the Company has listed or submitted for
quotation the Common Stock to the extent provided under the terms of the
Company's agreement with such exchange or quotation system and, with respect to
Awards subject to the laws of any foreign jurisdiction where Awards are, or will
be, granted under the Plan, the laws of such jurisdiction.
 
“Associated Award” shall have the meaning assigned to the term in Section 8.2.
 
“Award” means any award granted under the Plan.
 
“Award Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
 
“Board” means the Board of Directors of the Company.
 
“Cause” means (i) the commission of any act by the Participant of a theft,
embezzlement or fraud involving the Company or any Parent, Subsidiary or
Affiliate of the Company or otherwise, (ii) the Participant’s unauthorized use,
misappropriation, destruction or diversion of any tangible or intangible asset
or corporate opportunity of the Company or an Affiliate (including, without
limitation, the Participant’s improper use or disclosure of confidential or
proprietary information), (iii) Participant’s breach of fiduciary duty to the
Company or any Parent, Subsidiary or Affiliate of the Company, or (iv) any
intentional act by the Participant which has a material detrimental effect on
the Company or an Affiliate’s reputation or business. An Award Agreement or any
employment agreement with an Eligible Recipient may further define the term
“Cause” with respect to any Award granted under the Plan to such Eligible
Recipient.
 
“Change in Control” shall be deemed to occur when any of the following events
first occurs:
 
(a)           the sale, lease conveyance or other disposition of all or
substantially all of the Company’s assets to any “person” (as such term is used
in Section 13(d) of the Exchange Act), entity or group of persons acting in
concert;
 
(b)           any person who is not currently a stockholder of the Company (or
does not currently have the right to acquire pursuant to any agreement, or upon
exercise of conversion rights, warrants, options or otherwise, securities of the
Company) becoming the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding
voting securities;
 
 
 

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(c)           members of the Incumbent Board ceasing to constitute a majority of
the Board without the approval of the remaining members of the Incumbent Board;
or
 
(d)           any merger, consolidation or other transaction of the Company with
or into any other corporation, entity or person other than a transaction in
which the holders of at least 50% of the shares of capital stock of the Company
outstanding immediately prior thereto continue to hold (either by voting
securities remaining outstanding or by their being converted into the voting
securities of the surviving entity or its controlling entity) at least 50% of
the total voting power represented by the voting securities of the Company or
such surviving entity (or its controlling entity) outstanding immediately after
such transaction.
 
“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
 
“Committee” means the compensation committee of the Board or any other committee
which the Board may appoint to administer the Plan. To the extent necessary and
desirable, the Committee shall be composed entirely of individuals who meet the
qualifications referred to in Section 162(m) of the Code, Rule 16b-3 under the
Exchange Act and the applicable rules of Nasdaq, any stock exchange or automated
quotation system on which the Common Stock is primarily quoted or listed. If at
any time or to any extent the Committee shall not administer the Plan, then the
functions of the Committee as specified in the Plan shall be exercised by the
Board.
 
“Common Stock” means the common stock, with a par value $0.001 per share as of
the date of adoption of the Plan by the Board, of the Company.
 
“Company” means Winner Medical Group Inc., a Nevada corporation, or any
successor corporation.
 
“Control” shall have the meaning assigned to the term in the definition of
Affiliate in this Section 1.2.
 
“Disability” means the inability of a Participant to perform substantially his
or her duties and responsibilities to the Company or to any Parent, Subsidiary
or Affiliate by reason of a physical or mental disability or infirmity for a
continuous period of six months, as determined by the Administrator. The date of
such Disability shall be the last day of such six-month period or the date on
which the Participant submits such medical evidence, satisfactory to the
Company, that the Participant has a physical or mental disability or infirmity
that will likely prevent the Participant from performing the Participant’s work
duties for a continuous period of six months or longer, as the case may be. An
Award Agreement or any employment agreement with an Eligible Recipient may
further define the term “Disability” with respect to any Award granted under the
Plan to such Eligible Recipient.
 
“Eligible Recipient” means an officer, director, employee, consultant or advisor
of the Company or of any Parent, Subsidiary or Affiliate. For purposes of the
Plan, the term “employee” shall include all those individuals whose service with
or for the Company and/or any Parent, Subsidiary or Affiliate of the Company, is
within the definition of “employee” in the “Rule as to the Use of Form S-8”
contained in the General Instructions for the registration statement on Form S-8
promulgated by the Securities and Exchange Commission.
 
“Employee Director” means any director of the Company who is also an employee of
the Company or of any Parent, Subsidiary or Affiliate.
 
“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended from time to time.
 
“Exercise Price” means the per share price at which a holder of an Award may
purchase the Shares issuable upon exercise of such Award.
 
 
 

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“Fair Market Value” as of a particular date shall mean the fair market value of
a share of Common Stock as determined by the Administrator in good faith through
reasonable application of a reasonable valuation method; provided, however, that
Fair Market Value shall mean (i) if the Common Stock is listed or admitted to
trade on a national securities exchange, the closing price of the Common Stock,
as published in The Wall Street Journal, of the principal national securities
exchange on which the Common Stock is so listed or admitted to trade, on such
date, or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock as quoted on the next preceding date on which
there was trading in such shares; (ii) if the Common Stock is not listed or
admitted to trade on a national securities exchange but is listed and quoted on
Nasdaq, the last sale price for the Common Stock on such date as reported by
Nasdaq, or, if there is no reported trading of the Common Stock on such date,
then the last sale price for the Common Stock on the next preceding date on
which there was trading in the Common Stock; (iii) if the Common Stock is not
listed or admitted to trade on a national securities exchange and is not listed
and quoted on Nasdaq, the last sale price, or, if a last sale price is not
quoted, the mean between the closing bid and asked prices for the Common Stock
on such date, in either case, as furnished by NASD; (iv) if the Common Stock is
not listed or admitted to trade on a national securities exchange, not listed
and quoted on Nasdaq and the last sale price and closing bid and asked prices
are not furnished by the NASD, the last sale price, or, if a last sale price is
not quoted, the mean between the closing bid and asked prices for the Common
Stock on such date, in either case, as furnished by the Pink Sheets, or similar
organization; (v) if the stock is not listed or admitted to trade on a national
securities exchange, not listed and quoted on Nasdaq and if the last sale price
and bid and asked prices for the Common Stock are not furnished by the NASD,
Pink Sheets or a similar organization, the value established in good faith by
the Administrator in good faith through reasonable application of a reasonable
valuation method; and (vi) in the case of a Limited Stock Appreciation Right,
the Fair Market Value of a share of Common Stock shall be the “Change in Control
Price” (as defined in the Award Agreement evidencing such Limited Stock
Appreciation Right) of a share of Common Stock as of the date of exercise.
Notwithstanding the foregoing, Fair Market Value must in all instances be
determined in accordance with Section 409A of the Code.
 
“Family Member” means, with respect to any Participant, any of the following:
 
(a)           such Participant’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, including any such person with such relationship to the
Participant by adoption;
 
(b)           any person (other than a tenant or employee) sharing such
Participant’s household;
 
(c)           a trust in which the persons identified in clauses (a) and (b)
above have more than fifty percent of the beneficial interest;
 
(d)           a foundation in which the persons identified in clauses (a) and
(b) above or the Participant control the management of assets; or
 
(e)           any other entity in which the persons identified in clauses (a)
and (b) above or the Participant own more than fifty percent of the voting
interest.
 
“Incentive Stock Option” means any Option intended to be designated as an
“incentive stock option” within the meaning of Section 422 of the Code.
 
“Incumbent Board” means (i) all individuals serving on the Board on the date of
the initial adoption of the Plan by the Board of Directors, to the extent that
they continue to serve as members of the Board, and (ii) all individuals who
become members of the Board after the date of the initial adoption of this Plan
by the Board of Directors, if such individuals’ election or nomination for
election as directors was approved by a vote of at least a majority of the Board
prior to such election, to the extent they continue to serve as members of the
Board.
 
“Limited Stock Appreciation Right” means a Stock Appreciation Right that can be
exercised only in the event of a “Change in Control” (as defined in the Award
Agreement evidencing such Limited Stock Appreciation Right).
 
“Maximum Value” shall have the meaning assigned to the term in Section 8.2.
 
“NASD” means the National Association of Securities Dealers, Inc.
 
“Nasdaq” means The Nasdaq Stock Market, Inc.
 
 
 

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“Non-Employee Director” means a director of the Company who is not an employee
of the Company or of any Parent, Subsidiary or Affiliate.
 
“Non-Qualified Stock Option” means any Option that is not an Incentive Stock
Option, including, but not limited to, any Option that provides (as of the time
such Option is granted) that it will not be treated as an Incentive Stock
Option.
 
“Option” means an option to purchase Shares granted pursuant to Article 5 of the
Plan.
 
“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations in the chain
(other than the Company) owns stock possessing 50% or more of the combined
voting power of all classes of stock in one of the other corporations in the
chain.
 
“Participant” means any Eligible Recipient selected by the Administrator,
pursuant to the Administrator’s authority hereunder, to receive grants of
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights, awards of
Restricted Stock, Performance Shares, other types of awards, or any combination
of the foregoing, or any person (including any estate) to whom an Award has been
assigned or transferred as permitted hereunder.
 
“Performance Goal” means the goals determined by the Administrator, in its
discretion, to be applicable to a Participant with respect to an Award. As
determined by the Administrator, the Performance Goals applicable to an Award
may provide for a targeted level or levels of achievement which may be based on
such measure or measures of performance, which may include, but need not be
limited to, performance of the Participant, the Company, one or more Subsidiary,
Parent or Affiliate of the Company, or one or more divisions or units thereof,
or any combination of the foregoing. The Performance Goals may differ from
Participant to Participant and from Award to Award. Any criteria used may be
measured in absolute terms or relative to industry or other indices, or a
combination thereof. Such Performance Goals shall be based on one or more of the
following criteria: (i) earnings; (ii) earnings per share; (iii) earnings
growth; (iv) return on assets; (v) return on equity; (vi) revenue; (vii)
profits; (viii) profit growth; (ix) profit-related return ratios; (x) cost
management; (xi) dividend payout ratios; (xii) market share; (xiii) economic
value added; (xiv) cash flow; (xv) total shareholder return; (xvi) book value;
(xvii) stock price return; (xviii) price earnings ratio; and (xix) operating
income. The Administrator shall have the authority to make equitable adjustments
to the Performance Goals in recognition of unusual or non-recurring events
affecting the Company, or any Parent, Subsidiary or Affiliate of the Company, or
the financial statements of the Company, or any Parent, Subsidiary or Affiliate
of the Company, in response to changes in Applicable Law, or to account for
items of gain, loss or expense determined to be extraordinary or unusual in
nature or infrequent in occurrence or related to the disposal of a segment of a
business or related to a change in accounting principles; provided, however,
that (i) to the extent required for compliance with the exclusion from the
limitation on deductibility of compensation under Section 162(m) of the Code, no
adjustment shall be made that would result in an increase in the compensation of
any Participant whose compensation is subject to the limitation on deductibility
under Section 162(m) of the Code for the applicable year; and (ii) any
adjustment either shall not cause Section 409A of the Code to apply to an Award
for which such section is not intended to apply or shall not cause an Award
which is subject to Section 409A to fail to comply with Section 409A of the
Code. The Administrator also may adjust the Performance Goals and measurements
applicable to Awards and thereby reduce the amount to be received by any
Participant pursuant to such Awards if and to the extent that the Administrator
deems it appropriate.
 
 “Performance Grant” shall have the meaning assigned to the term in Section 8.1.
 
“Performance Grant Actual Value” shall have the meaning assigned to the term in
Section 8.1.
 
“Performance Grant Award Period” shall have the meaning assigned to the term in
Section 8.3.
 
“Performance Shares” means Shares that are subject to restrictions based upon
the attainment of specified performance objectives granted pursuant to Article
8.
 
“Permitted Transfer” means, as authorized by the Plan and the Administrator,
with respect to an interest in a Non-Qualified Stock Option, any transfer
effected by the Participant during the Participant’s lifetime of an interest in
such Non-Qualified Stock Option but only such transfers which are by gift or
pursuant to domestic relations orders. A permitted transfer does not include any
transfer for value and neither transfers under a domestic relations order in
settlement of marital property rights or to an entity in which more than 50% of
the voting interests are owned by Family Members or the Participant in exchange
for an interest in that entity are deemed transfers for value.

 
 

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“Pink Sheets” means Pink Sheets, LLC.
 
“Plan” means this 2006 Equity Incentive Plan, as amended from time to time.
 
“Related Employment” means the employment or performance of services by an
individual for an employer that is neither the Company, any Parent, Subsidiary
nor Affiliate, provided that (i) such employment or performance of services is
undertaken by the individual at the request of the Company or any Parent,
Subsidiary or Affiliate, (ii) immediately prior to undertaking such employment
or performance of services, the individual was employed by or performing
services for the Company or any Parent, Subsidiary or Affiliate or was engaged
in Related Employment, and (iii) such employment or performance of services is
in the best interests of the Company and is recognized by the Administrator, as
Related Employment. The death or Disability of an individual during a period of
Related Employment shall be treated, for purposes of this Plan, as if the death
or onset of Disability had occurred while the individual was employed by or
performing services for the Company or a Parent, Subsidiary or Affiliate.
 
“Restricted Stock” means Shares subject to certain restrictions granted pursuant
to Article 7.
 
“Restriction Period” means the period of time Restricted Stock or any other
Award remains subject to restrictions imposed on the Award. Such restrictions
may be based on continuous service, the achievement of Performance Goals, the
occurrence of other events as determined by the Administrator, or a combination
thereof.
 
“Rule 16b-3” shall have the meaning assigned to the term in Section 2.1.
 
“Securities Act” means the United States Securities Act of 1933, as amended from
time to time.
 
“Shares” means shares of Common Stock reserved for issuance under or issued
pursuant to the Plan, as adjusted pursuant to Article 4, and any successor
security.
 
“Stock Appreciation Right” means the right pursuant to an Award granted under
Article 6 to receive an amount equal to the excess, if any, of (i) the Fair
Market Value, as of the date such Stock Appreciation Right or portion thereof is
surrendered, of the Shares covered by such right or such portion thereof, over
(ii) the aggregate exercise price of such right or such portion thereof as
established by the Administrator at the time of the grant of such Award (or such
other exercise price thereafter established by the Administrator with the
consent of the Participant granted such Award where required by the Plan).
 
“Stock Bonus” means an Award granted pursuant to Article 9.
 
“Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, if each of the corporations (other
than the last corporation) in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.
 
“Ten Percent Stockholder” shall have the meaning assigned to the term in Section
5.4.
 
“Termination” or “Terminated” means, for purposes of the Plan with respect to a
Participant, that such Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor, or
advisor to the Company or any Parent, Subsidiary or Affiliate of the Company. A
Participant will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence
approved by the Administrator, provided, that such leave is for a period of not
more than three months, unless reemployment or reinstatement upon the expiration
of such leave is provided by contract or statute. In the case of any Participant
on an approved leave of absence, the Administrator may make such provisions
respecting suspension of vesting of any Award previously granted to such
Participant while such Participant is on leave from the Company or any Parent,
Subsidiary or Affiliate of the Company as the Administrator may deem
appropriate, except that in no event may an Option be exercised after the
expiration of the term set forth in the Award Agreement with respect to such
Option. The Administrator will have sole discretion to determine (i) the effect
upon an Award of any change in the Participant’s status from an employee to a
consultant, director, consultant or advisor and (ii) whether a Participant has
ceased to provide services and the applicable Termination Date.
 
 
 

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“Termination Date” means the effective date of Termination, as determined by the
Administrator.
 
ARTICLE 2.
ADMINISTRATION.

 
2.1          Administration in Accordance with the Code and Exchange Act. The
Plan shall be administered in accordance with the requirements of Section 162(m)
of the Code (but only to the extent necessary and desirable to maintain
qualification of Awards under the Plan under Section 162(m) of the Code) and, to
the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”) or the
rules of the Nasdaq, any stock exchange or automated quotation system on which
the Common Stock is primarily quoted or listed, by the Board or, at the Board’s
sole discretion, by the Committee, which shall be appointed by the Board, and
which shall serve at the pleasure of the Board.
 
2.2          Other Administration.    The Board or a Committee may delegate to
an authorized officer or officers of the Company the power to approve Awards to
persons eligible to receive Awards under the Plan who are not (A) subject to
Section 16 of the Exchange Act or (B) at the time of such approval, “covered
employees” under Section 162(m) of the Code or (C) any other executive officer.
 
2.3          Administrator’s Powers. Subject to the general purposes, terms and
conditions of this Plan, the Administrator will have full power to implement and
carry out this Plan. The Administrator will have the authority to:
 
(a)           construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan (including sub-plans
and Plan addenda);
 
(b)           prescribe, amend and rescind rules and regulations relating to
this Plan (including rules and regulations relating to sub-plans and Plan
addenda) or any Award;
 
(c)           select persons to receive Awards;
 
(d)           determine the form. terms and conditions, not inconsistent with
the terms of the Plan, of Awards. Such terms and conditions include, but are not
limited to, the exercise and/or purchase price (if applicable), the time or
times when an Award may be exercised (which may or may not be based on
performance criteria), the vesting schedule, any vesting and/or exercisability
acceleration or waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be established at
the time an Award is granted or thereafter;
 
(e)           determine the number of Shares or other consideration subject to
Awards;
 
(f)           determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company or
any Parent, Subsidiary or Affiliate of the Company;
 
(g)           grant waivers of Plan or Award conditions;
 
(h)           determine the vesting, exercisability and payment of Awards,
including any vesting and/or exercisability acceleration;
 
(i)            correct any defect, supply any omission or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
 
(j)            make any adjustments necessary or desirable as a result of the
granting of an Award to an Eligible Recipient located outside the United States;
 
(k)           determine whether an Award has been earned;
 
 
 

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(l)            to modify or amend each Award, including, but not limited to, the
acceleration of vesting and/or exercisability, provided, however, that any such
amendment is subject to Section 14 of the Plan and except as set forth in that
Section may not impair any outstanding Award unless agreed to in writing by the
Participant;
 
(m)          to authorize conversion or substitution under the Plan of any or
all stock options, stock appreciation rights or other stock awards held by
service providers of an entity acquired by the Company (the “Conversion
Awards”). Any conversion or substitution shall be effective as of the close of
the merger, acquisition or other transaction. The Conversion Awards may be
Nonstatutory Stock Options or Incentive Stock Options, as determined by the
Administrator, with respect to options granted by the acquired entity; provided,
however, that with respect to the conversion of stock appreciation rights in the
acquired entity, the Conversion Awards shall be Nonstatutory Stock Options.
Unless otherwise determined by the Administrator at the time of conversion or
substitution, all Conversion Awards shall have the same terms and conditions as
Awards generally granted by the Company under the Plan; and
 
(n)           make all other determinations necessary or advisable for the
administration of the Plan.
 
2.4          Administrator’s Discretion Final. Any determination made by the
Administrator with respect to any Award will be made in the Administrator’s sole
discretion at the time of grant of the Award or, unless in contravention of any
express term of the Plan or Award, at any later time, and such determination
will be final and binding on the Company and on all persons having an interest
in any Award under the Plan.
 
2.5          Administrator’s Method of Acting; Liability. The Administrator may
act only by a majority of its members then in office, except that the members
thereof may authorize any one or more of their members or any officer of the
Company to execute and deliver documents or to take any other ministerial action
on behalf of the Committee with respect to Awards made or to be made to Eligible
Recipients. No member of the Administrator and no officer of the Company shall
be liable for anything done or omitted to be done by such member or officer, by
any other member of the Administrator or by any officer of the Company in
connection with the performance of duties under the Plan, except for such
member’s or officer’s own willful misconduct or as expressly provided by law.
 
ARTICLE 3.
PARTICIPATION.

 
3.1          Affiliates. If a Parent, Subsidiary or Affiliate of the Company
wishes to participate in the Plan and its participation shall have been approved
by the Board, the board of directors or other governing body of the Parent,
Subsidiary or Affiliate, as the case may be, shall adopt a resolution in form
and substance satisfactory to the Administrator authorizing participation by the
Parent, Subsidiary or Affiliate in the Plan. A Parent, Subsidiary or Affiliate
participating in the Plan may cease to be a participating company at any time by
action of the Board or by action of the board of directors or other governing
body of such Parent, Subsidiary or Affiliate, which latter action shall be
effective not earlier than the date of delivery to the Secretary of the Company
of a certified copy of a resolution of the Parent, Subsidiary or Affiliate’s
board of directors or other governing body taking such action. If the
participation in the Plan of a Parent, Subsidiary or Affiliate shall terminate,
such termination shall not relieve the Parent, Subsidiary or Affiliate of any
obligations theretofore incurred by the Parent, Subsidiary or Affiliate, except
as may be approved by the Administrator.
 
3.2          Participants. Incentive Stock Options may only be granted to
employees within the meaning of Section 422 of the Code and the regulations
thereunder (including officers and directors who are also employees) of the
Company, or any Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent, Subsidiary or Affiliate of the
Company; provided, that such consultants, contractors and advisors render bona
fide services to the Company or such Parent, Subsidiary or Affiliate of the
Company not in connection with the offer and sale of securities in a
capital-raising transaction. An Eligible Recipient may be granted more than one
Award under the Plan.
 
ARTICLE 4.
AWARDS UNDER THE PLAN.

 
4.1          Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof:
 
(a)           Options;
 
 
 

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(b)           Stock Appreciation Rights;
 
(c)           Restricted Stock;
 
(d)           Performance Grants;
 
(e)           Stock Bonuses; and
 
(f)           any other type of Award deemed by the Committee to be consistent
with the purposes of the Plan (including, but not limited to, Awards of, or
options or similar rights granted with respect to, unbundled stock units or
components thereof, and Awards to be made to participants who are foreign
nationals or are employed or performing services outside the United States).
 
The Administrator may only award or grant those Awards that either comply with
the applicable requirements of Section 409A of the Code, or do not result in the
deferral of compensation within the meaning of Section 409A of the Code.
 
4.2          Number of Shares Available Under the Plan. Subject to Section 4.4,
the total number of Shares reserved and available for grant and issuance
pursuant to the Plan will be 5,000,000. To the extent that any Award payable in
Shares is forfeited, canceled, returned to the Company for failure to satisfy
vesting requirements or upon the occurrence of other forfeiture events, or
otherwise terminates without payment being made thereunder, the Shares covered
by such Award will no longer be charged against the foregoing 5,000,000 Share
maximum limitation and may again be made subject to Award(s) under the Plan.
 
Shares may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
 
The number of Shares which are transferred to the Company by a Participant to
pay the exercise or purchase price of an Award will be subtracted from the
number of Shares issued with respect to such Award for the purpose of counting
Shares used under the Plan. Shares withheld to pay withholding taxes in
connection with the exercise or repayment of an Award will be counted as used
under the Plan. In addition, shares covered by an Award which is settled in cash
will not be counted as used under the Plan.
 
4.3          Reservation of Shares. At all times, the Company shall reserve and
keep available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Options granted under the Plan and all other
outstanding but unexercised Awards granted under the Plan.
 
4.4          Adjustment in Number of Shares Available Under the Plan. In the
event that the number of outstanding shares of Common Stock is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the
Company without consideration, then (a) the number of Shares reserved for
issuance under the Plan, (b) the number of Shares that may be granted pursuant
to the Plan, and (c) the Exercise Prices of and number of Shares subject to
outstanding Options and other Awards, will be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that, upon
occurrence of such an event, fractions of a Share will not be issued upon
exercise of an Award but will, upon such exercise, either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share on the
effective date of such an event or will be rounded down to the nearest whole
Share, as determined by the Administrator. Notwithstanding the foregoing, (i)
with respect to Incentive Stock Options, any such adjustment pursuant to this
Section 4.4 shall be made in a manner so as to not constitute a “modification”
within the meaning of Section 424(h) of the Code and the regulations thereunder;
and (ii) any adjustment either shall not cause Section 409A of the Code to apply
to an Award for which such section is not intended to apply or shall not cause
an Award which is subject to Section 409A to fail to comply with Section 409A of
the Code.
 
4.5          Rights with Respect to Common Shares and Other Securities.
 
 
 

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(a)           Unless otherwise determined by the Administrator, a Participant to
whom an Award of Restricted Stock has been made (and any person succeeding to
such Participant’s rights with respect to such Award pursuant to the Plan) shall
have, after issuance of a certificate or copy thereof for the number of Shares
so awarded and prior to the expiration of the Restriction Period or the earlier
repurchase of such Shares as provided in the Plan or Award Agreement with
respect to such Award of Restricted Stock, ownership of such Shares, including
the right to vote the same and to receive dividends or other distributions made
or paid with respect to such Shares (provided that such Shares, and any new,
additional or different shares, or other securities or property of the Company,
or other forms of consideration which the Participant may be entitled to receive
with respect to such Shares as a result of a stock split, stock dividend or any
other change in the corporate or capital structure of the Company, shall be
subject to the restrictions of the Plan as determined by the Administrator),
subject, however, to the options, restrictions and limitations imposed thereon
pursuant to the Plan. Notwithstanding the foregoing, unless otherwise determined
by the Administrator, a Participant with whom an Award Agreement is made to
issue Shares in the future shall have no rights as a stockholder with respect to
Shares related to such Award Agreement until a stock certificate evidencing such
Shares is issued to such Participant.
 
(b)           Unless otherwise determined by the Administrator, a Participant to
whom a grant of Stock Options, Stock Appreciation Rights, Performance Grants or
any other Award is made (and any person succeeding to such Participant’s rights
pursuant to the Plan) shall have no rights as a stockholder with respect to any
Shares or as a holder with respect to other securities, if any, issuable
pursuant to any such Award until the date a stock certificate evidencing such
Shares or other instrument of ownership, if any, is issued to such Participant.
Except as provided in Section 4.4, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities, other property or other forms of consideration, or any
combination thereof) for which the record date is prior to the date such stock
certificate or other instrument of ownership, if any, is issued.
 
4.6          Limits on Awards Under the Plan.
 
(a)           Subject to adjustment as provided in Section 4.4, not more than an
aggregate of 5,000,000 Shares may be issued under the Plan as Incentive Stock
Options.
 
(b)           Subject to adjustment as provided in Section 4.4, the maximum
number of shares of Common Stock with respect to which Options, Stock
Appreciation Rights, or Limited Rights, or a combination thereof, may be granted
during any calendar year to any individual Participant shall be 1,500,000, and
the maximum number of Shares with respect to which Restricted Stock may be
granted during any calendar year to any individual Participant shall be
1,500,000. These limitations shall be applied and construed consistently with
Section 162(m) of the Code.
 
(c)           Subject to adjustment as provided in Section 4.4, the maximum
number of shares of Common Stock with respect to which Performance Grants may be
granted during any calendar year to any individual Participant shall be
1,500,000. This limit shall be applied and construed consistently with Section
162(m) of the Code.
 
(d)           The maximum dollar value of Performance Grants that may be awarded
during any calendar year to any individual Participant shall be equal to the
value of 1,500,000 shares determined as of the first business day of the year of
grant. This limit shall be applied and construed consistently with Section
162(m) of the Code.
 
ARTICLE 5.
STOCK OPTIONS.

 
5.1          Grant; Determination of Type of Option. The Administrator may grant
one or more Options to an Eligible Recipient and will determine (a) whether each
such Option will be an Incentive Stock Option or a Non-Qualified Stock Option,
(b) the number of Shares subject to each such Option, (c) the Exercise Price of
each such Option, (d) the period during which each such Option may be exercised,
and (e) all other terms and conditions of each such Option, subject to the terms
and conditions of this Article 5. The Administrator may grant an Option either
alone or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter.
 
5.2          Form of Option Award Agreement. Each Option granted under the Plan
will be evidenced by an Award Agreement which will expressly identify the Option
as an Incentive Stock Option or a Non-Qualified Stock Option, and will be in
such form and contain such provisions (which need not be the same for each
Participant or Option) as the Administrator may from time to time approve, and
which will comply with and be subject to the terms and conditions of the Plan.
 
5.3          Date of Grant. The date of grant of an Option will be the date on
which the Administrator makes the determination to grant such Option, unless
otherwise specified by the Administrator.
 
 
 

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5.4          Exercise Period. Each Option shall be exercisable within the times
or upon the occurrence of one or more events determined by the Administrator and
set forth in the Award Agreement governing such Option; provided, however, that
no Option will be exercisable after the expiration of ten years from the date
the Option is granted; and provided, further, however, that no Incentive Stock
Option granted to a person who directly or by attribution owns more than 10% of
the total combined voting power of all classes of stock of the Company or of any
Parent or Subsidiary of the Company (each, a “Ten Percent Stockholder”) will be
exercisable after the expiration of five years from the date such Incentive
Stock Option is granted. The Administrator also may provide for an Option to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Administrator
determines. Unless otherwise determined by the Administrator, an Option shall be
exercisable as follows:
 
(a)           up to 25% of the number of Shares subject to such Option
commencing on the first anniversary of the date of grant of such Option;
 
(b)           up to an additional 25% of the number of Shares subject to such
Option commencing on the second anniversary of the date of grant of such Option;
 
(c)           up to an additional 25% of the number of Shares subject to such
Option commencing on the third anniversary of the date of grant of such Option;
and
 
(d)           up to an additional 25% of the number of Shares subject to such
Option commencing on the fourth anniversary of the date of grant of such Option.
 
5.5          Exercise Price. The Exercise Price of an Option will be determined
by the Administrator when the Option is granted and may be not less than 100% of
the per share Fair Market Value of the Shares subject to such Option on the date
of grant of such Option; provided, however, that the Exercise Price of any
Incentive Stock Option granted to a Ten Percent Stockholder will not be less
than 110% of the per share Fair Market Value of such Shares on the date of such
grant. Payment for the Shares purchased shall be made in accordance with Article
10 of the Plan.
 
5.6          Method of Exercise. An Option may be exercised only by delivery to
the Company of an irrevocable written exercise notice (a) identifying the Option
being exercised, (b) stating the number of Shares being purchased, (c) providing
any other matters required by the Award Agreement with respect to such Option,
and (d) containing such representations and agreements regarding Participant’s
investment intent and access to information and other matters, if any, as may be
required or desirable by the Company to comply with Applicable Law. Such
exercise notice shall be accompanied by payment in full of the Exercise Price
for the number of Shares being purchased in accordance with Article 10 and the
executed Award Agreement with respect to such Option.
 
5.7          Termination. Unless otherwise provided in an Award Agreement,
exercise of Options shall be subject to the following:
 
(a)           If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise each of such Participant’s Options
(i) only to the extent that such Options would have been exercisable on the
Termination Date and (ii) no later than three months after the Termination Date,
but in any event, no later than the original expiration date of such Option;
 
(b)           If the Participant is Terminated because of Participant’s death or
Disability (or the Participant dies within three months after a Termination
other than for Cause or because of Participant’s Disability), then each of such
Participant’s Options (i) may be exercised only to the extent that such Option
would have been exercisable by Participant on the Termination Date and (ii) must
be exercised by Participant (or Participant’s legal representative or authorized
assignee) no later than twelve months after the Termination Date, but in any
event no later than the original expiration date of such Option.
 
(c)           Notwithstanding the provisions in paragraphs 5.7(a) and 5.7(b), if
a Participant is terminated for Cause, neither the Participant, the
Participant’s estate nor such other person who may then hold an Option shall be
entitled to exercise such Option whatsoever, whether or not, after the
Termination Date, the Participant may receive payment from the Company or any
Parent, Subsidiary or Affiliate of the Company for vacation pay, for services
rendered prior to the Termination Date, for services rendered for the day on
which Termination occurs, for salary in lieu of notice, for severance or for any
other benefits; provided, however, in making such a determination, the
Administrator shall give the Participant an opportunity to present to the
Administrator evidence on Participant’s behalf that the provisions of this
paragraph 5.7(c) should not apply and, in the alternative, paragraph 5.7(a) or
5.7(b) shall apply; provided, further, however, that, for the purpose of this
paragraph 5.7(c), Termination shall be deemed to occur on the date when the
Company dispatches notice or advice to the Participant that such Participant is
Terminated.

 
 

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5.8          Limitations on Exercise. The Administrator may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided, that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which the Option is then
exercisable.
 
5.9          Limitations on Incentive Stock Options. The aggregate Fair Market
Value (as determined as of the date of grant) of Shares with respect to which an
Incentive Stock Option are exercisable for the first time by a Participant
during any calendar year (under the Plan or under any other incentive stock
option plan of the Company, and any Parent, Subsidiary and Affiliate of the
Company) will not exceed $100,000. This $100,000 limitation shall be applied by
taking Options into account in the order in which granted. An Incentive Stock
Option shall be deemed to be a Non-Qualified Stock Option to the extent that the
foregoing $100,000 limitation is exceeded. In the event that the Code or the
regulations promulgated thereunder are amended after the effective date of the
Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to Incentive Stock Options, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.
 
5.10        Modification, Extension or Renewal. The Administrator may modify,
extend or renew any outstanding Option and authorize the grant of one or more
new Options in substitution therefor; provided that (i) any such action may not,
without the written consent of a Participant, impair any of such Participant’s
rights under any Option previously granted; and (ii) the Administrator shall
consider the impact of Section 409A of the Code on any such modification,
extension, renewal, or substitution. Any outstanding Incentive Stock Option that
is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) and other applicable provisions of the Code.
 
5.11        No Disqualification. Notwithstanding any other provision in the
Plan, no term of the Plan relating to an Incentive Stock Option will be
interpreted, amended or altered, nor will any discretion or authority granted
under the Plan be exercised, so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any
Incentive Stock Option under Section 422 of the Code.
 
5.12        Prohibition Against Transfer. No Option may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution or pursuant to a domestic relations order,
and a Participant’s Option shall be exercisable during such Participant’s
lifetime only by such Participant or such person receiving such Option pursuant
to a domestic relations order.
 
ARTICLE 6.
STOCK APPRECIATION RIGHTS.

 
6.1          Grant of Stock Appreciation Rights.
 
(a)           The Administrator may grant Stock Appreciation Rights either
alone, or in conjunction with the grant of an Option, Performance Grant or other
Award, either at the time of grant or by amendment thereafter. Each Award of
Stock Appreciation Rights granted under the Plan shall be evidenced by an
instrument in such form as the Administrator shall prescribe from time to time
in accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Award of Stock Appreciation Rights or the Shares
issuable upon exercise thereof, as the Administrator shall establish.
 
(b)           The Administrator shall determine the number of Shares to be
subject to each Award of Stock Appreciation Rights. The number of Shares subject
to an outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the Administrator,
to the extent that Shares under such Award of Stock Appreciation Rights are used
to calculate the cash, Shares, or other securities or property of the Company,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights, or to
the extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.
 
 
 

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6.2          Prohibition Against Transfer. No Award of Stock Appreciation Rights
may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of, except by will or the laws of the descent and distribution or pursuant to a
domestic relations order, and Stock Appreciation Rights Awarded to a Participant
shall be exercisable during such Participant’s lifetime only by such Participant
or such person receiving such Stock Appreciation Rights pursuant to a domestic
relations order. Unless the Administrator determines otherwise, the Award of
Stock Appreciation Rights to a Participant shall not be exercisable for at least
six months after the date of grant, unless such Participant is Terminated before
the expiration of such six-month period by reason of such Participant’s
Disability or death.
 
6.3          Exercise. The Award of Stock Appreciation Rights shall not be
exercisable:
 
(a)           in the case of any Award of Stock Appreciation Rights that are
attached to an Incentive Stock Option granted to a Ten Percent Employee, after
the expiration of five years from the date such Incentive Stock Option is
granted, and, in the case of any other Award of Stock Appreciation Rights, after
the expiration of ten years from the date of such Award. Any Award of Stock
Appreciation Rights may be exercised during such period only at such time or
times and in such installments as the Administrator may establish;
 
(b)           unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
 
(c)           unless the Participant exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date of the
grant thereof and ending on the date of such exercise, employed by or otherwise
performing services for the Company or any Parent, Subsidiary or Affiliate of
the Company, except that
 
(i)            in the case of any Award of Stock Appreciation Rights (other than
those attached to an Incentive Stock Option), if such Participant is Terminated
solely by reason of a period of Related Employment, the Participant may, during
such period of Related Employment, exercise the Award of Stock Appreciation
Rights as if such Participant had not been Terminated;
 
(ii)           if such Participant is Terminated by reason of such Participant’s
Disability or early, normal or deferred retirement under an approved retirement
program of the Company or any Parent, Subsidiary or Affiliate of the Company (or
such other plan or arrangement as may be approved by the Administrator for this
purpose) while holding an Award of Stock Appreciation Rights which has not
expired and has not been fully exercised, such Participant may, at any time
within three years after the Termination Date (but in no event after the Award
of Stock Appreciation Rights has expired), exercise the Award of Stock
Appreciation Rights with respect to any Shares as to which such Participant
could have exercised the Award of Stock Appreciation Rights on the Termination
Date, or with respect to such greater number of Shares as determined by the
Administrator;
 
(iii)          if such Participant is Terminated for reasons other than Related
Employment, Disability, early, normal or deferred retirement or death while
holding an Award of Stock Appreciation Rights which has not expired and has not
been fully exercised, such person may exercise the Award of Stock Appreciation
Rights at any time during the two year period following the Termination Date
(but in no event after the Award of Stock Appreciation Rights expires) following
such Participant’s Termination Date with respect to any Shares as to which such
Participant could have exercised the Award of Stock Appreciation Rights on such
Participant’s Termination Date or as otherwise permitted by the Administrator;
or
 
(iv)          if any Participant to whom an Award of Stock Appreciation Rights
has been granted shall die holding an Award of Stock Appreciation Rights which
has not expired and has not been fully exercised, such Participant’s executors,
administrators, heirs or distributees, as the case may be, may, at any time
within one year after the date of death (but in no event after the Award of
Stock Appreciation Rights has expired), exercise the Award of Stock Appreciation
Rights with respect to any Shares as to which the decedent Participant could
have exercised the Award of Stock Appreciation Rights at the time of such death,
or with respect to such greater number of Shares as may be determined by the
Administrator.
 
 
 

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6.4          Exercise.
 
(a)           An Award of Stock Appreciation Rights shall entitle the
Participant (or any person entitled to act under the provisions of clause (iv)
of Paragraph 6.3(c)) to either (i) exercise such Award and receive payment in
accordance with such Award or (ii) surrender unexercised the Option (or other
Award) to which the Stock Appreciation Rights is attached (or any portion of
such Option or other Award) to the Company and to receive from the Company in
exchange therefor, without payment to the Company, that number of Shares having
an aggregate value equal to the excess of the Fair Market Value of one Share, at
the time of such exercise, over the Exercise Price per share, times the number
of Shares subject to the Award or the Option (or other Award), or portion
thereof, which is so exercised or surrendered, as the case may be. The
Administrator shall be entitled to elect to settle the obligation arising out of
the exercise of Stock Appreciation Rights by the payment of cash or other
securities or property of the Company, or other forms of payment, or any
combination thereof, as determined by the Administrator, equal to the aggregate
value of the Shares the Company would otherwise be obligated to deliver. Any
such election by the Administrator shall be made as soon as practicable after
the receipt by the Company of written notice of the exercise of such Stock
Appreciation Rights. The value of a Share, other securities or property of the
Company, or other forms of payment determined by the Administrator for this
purpose shall be the Fair Market Value of a Share on the last business day next
preceding the date of the election to exercise such Stock Appreciation Rights,
unless the Administrator determines otherwise and is set forth in the Award
Agreement with respect to such Stock Appreciation Rights.
 
(b)           An Award of Stock Appreciation Rights may provide that such Stock
Appreciation Rights shall be deemed to have been exercised at the close of
business on the business day preceding the expiration date of such Stock
Appreciation Rights or of the related Option (or other Award), or such other
date as specified by the Administrator, if at such time such Stock Appreciation
Rights has a positive value. Such deemed exercise shall be settled or paid in
the same manner as a regular exercise thereof as provided in Paragraph 6.4(a).
 
6.5          Fractional Shares. No fractional shares may be delivered under this
Article 6, but, in lieu thereof, a cash or other adjustment shall be made as
determined by the Administrator.
 
ARTICLE 7.
RESTRICTED STOCK.

 
7.1          Grant. An Award of Restricted Stock is an offer by the Company to
sell to an Eligible Recipient Shares that are subject to restrictions. The
Administrator will determine to whom an offer will be made, the number of Shares
the person may purchase, the Exercise Price to be paid, the restrictions to
which the Shares will be subject, and all other terms and conditions of the
Restricted Stock Award, subject to the provisions of this Article 7.
 
7.2          Form of Restricted Stock Award. All purchases under an Award of
Restricted Stock will be evidenced by an Award Agreement that will be in such
form (which need not be the same for each Award of Restricted Stock or
Participant) as the Administrator will from time to time approve, and will
comply with and be subject to the terms and conditions of the Plan. The offer of
Restricted Stock will be accepted by the Participant’s execution and delivery of
the Award Agreement evidencing the offer to purchase the Restricted Stock and
full payment for the Shares to the Company within 30 days from the date such
Award Agreement is tendered to such Eligible Recipient. If such Eligible
Recipient does not execute and deliver such Award Agreement along with full
payment for the Shares to the Company within such 30 day period, then such offer
will terminate, unless otherwise determined by the Administrator.
 
7.3          Purchase Price. The Exercise Price of Shares sold pursuant to an
Award of Restricted Stock will be determined by the Administrator on the date
such Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Exercise Price will be 100% of the per share Fair
Market Value of the Shares subject to the Award on the date such Award is
granted. Payment of the Exercise Price may be made in accordance with Article 10
of the Plan.
 
7.4          Terms of Restricted Stock Awards. Each Award of Restricted Stock
shall be subject to such restrictions as the Administrator may impose. These
restrictions may be based upon completion of a specified length of service with
the Company or any Parent, Subsidiary or Affiliate of the Company, or upon
completion of the Performance Goals as set out in advance in the Participant’s
individual Award Agreement. Awards of Restricted Stock may vary from Participant
to Participant and between groups of Participants. Prior to the grant of an
Award of Restricted Stock, the Administrator shall:
 
(a)determine the nature, length and starting date of any Restriction Period for
the Restricted Stock Award;
 
 
 

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(b)determine the Performance Goals, if any, to be used to measure performance;
and
 
(c)determine the number of Shares that may be awarded to the Participant.
 
Prior to the payment of any Restricted Stock pursuant to an Award, the
Administrator shall determine the extent to which such Restricted Stock Award
has been earned and certify in writing that any Performance Goals and any other
material terms were in fact satisfied. Restriction Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Restriction Periods and having different
Performance Goals and other criteria.
 
7.5          Termination During Restriction Period. If a Participant is
Terminated during a Restriction Period with respect to any Award of Restricted
Stock for any reason, then such Participant will be entitled to payment (whether
in Shares, cash or otherwise) with respect to the Restricted Stock Award only to
the extent earned as of the date of Termination in accordance with the Award
Agreement with respect to such Restricted Stock, unless the terms of such Award
Agreement provides otherwise or the Administrator determines otherwise.
 
ARTICLE 8.
PERFORMANCE GRANTS.

 
8.1          Award. The Award of a Performance Grant to a Participant will
entitle such Participant to receive a specified amount (the “Performance Grant
Actual Value”) as determined by the Administrator; provided that the terms and
conditions specified in the Plan and in the Award of such Performance Grant are
satisfied. Each Award of a Performance Grant shall be subject to the terms and
conditions set forth in this Article 8 and such other terms and conditions,
including, but not limited to, restrictions upon any cash, Shares, other
securities or property of the Company, or other forms of payment, or any
combination thereof, issued in respect of the Performance Grant, as the
Administrator shall establish, shall be embodied in an Award Agreement in such
form and substance as is approved by the Administrator.
 
8.2          Terms. The Administrator shall determine the value or range of
values of a Performance Grant to be awarded to each Participant selected for an
Award of a Performance Grant and whether or not such Performance Grant is
granted in conjunction with an Award of Options, Stock Appreciation Rights,
Restricted Stock or other type of Award, or any combination thereof, under the
Plan (which may include, but need not be limited to, deferred Awards)
concurrently or subsequently granted to such Participant (the “Associated
Award”). As determined by the Administrator, the maximum value of each
Performance Grant (the “Maximum Value”) shall be:
 
(a)           an amount fixed by the Administrator at the time the Award is made
or amended thereafter;
 
(b)           an amount which varies from time to time based in whole or in part
on the then current Fair Market Value of a Share, other securities or property
of the Company, or other securities or property, or any combination thereof; or
 
(c)           an amount that is determinable from criteria specified by the
Administrator.
 
Performance Grants may be issued in different classes or series having different
names, terms and conditions. In the case of a Performance Grant awarded in
conjunction with an Associated Award, the Performance Grant may be reduced on an
appropriate basis to the extent that the Associated Award has been exercised,
paid to or otherwise received by the participant, as determined by the
Administrator.
 
8.3          Award Period. The award period (“Performance Grant Award Period”)
in respect of any Performance Grant shall be a period determined by the
Administrator. At the time each Performance Grant is made, the Administrator
shall establish Performance Goals to be attained within the Performance Grant
Award Period as the means of determining the Performance Grant Actual Value of
such Performance Grant. Each Performance Grant Actual Value of a Performance
Grant shall be equal to the Performance Grant Maximum Value of such Performance
grant only if the Performance Goals are attained in full, but the Administrator
shall specify the manner in which the Performance Grant Actual Value shall be
determined if the Performance Goals are met in part. The Performance Grant
Actual Value or the Performance Grant Maximum Value, or any combination thereof,
may be adjusted in any manner by the Administrator at any time and from time to
time during or as soon as practicable after the Performance Grant Award Period,
if it determines that such performance measures, the Performance Grant Actual
Value or the Performance Grant Maximum Value, or any combination thereof, are
not appropriate under the circumstances; provided that (i) to the extent
required for compliance with the exclusion from the limitation on deductibility
of compensation under Section 162(m) of the Code, no adjustment shall be made
that would result in an increase in the compensation of any Participant whose
compensation is subject to the limitation on deductibility under Section 162(m)
of the Code for the applicable year; and (ii) any adjustment either shall not
cause Section 409A of the Code to apply to an Award for which such section is
not intended to apply or shall not cause an Award which is subject to Section
409A to fail to comply with Section 409A of the Code.
 
 
 

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8.4          Termination. The rights of a Participant in Performance Grants
awarded to such Participant shall be provisional and may be canceled or paid in
whole or in part, all as determined by the Administrator, if such Participant’s
continuous employment or performance of services for the Company, any Parent,
Subsidiary and Affiliate of the Company shall terminate for any reason prior to
the end of the Performance Grant Award Period, except solely by reason of a
period of Related Employment.
 
8.5          Determination of Performance Grant Actual Values. The Committee
shall determine whether the conditions of Sections 8.2 or 8.3 have been met and,
if so, shall ascertain the Performance Grant Actual Value of Performance Grants.
The Administrator must certify in writing prior to payment of any Performance
Grants that the Performance Goals and any other material terms were in fact
satisfied. If a Performance Grant has no Performance Grant Actual Value, the
Award of such Performance Grant shall be deemed to have been canceled and the
Associated Award, if any, may be canceled or permitted to continue in effect in
accordance with such Associated Award’s terms. If a Performance Grant has a
Performance Grant Actual Value and:
 
(a)           was not awarded in conjunction with an Associated Award, the
Administrator shall cause an amount equal to the Performance Grant Actual Value
of such Performance Grant to be paid to the Participant or the Participant’s
beneficiary as provided below; or
 
(b)           was awarded in conjunction with an Associated Award, the
Administrator shall determine, in accordance with criteria specified by the
Administrator, whether to (i) to cancel such Performance Grant, in which event
no amount in respect thereof shall be paid to the Participant or the
Participant’s beneficiary, and the Associated Award may be permitted to continue
in effect in accordance with the Associated Award’s terms, (ii) pay the
Performance Grant Actual Value to the Participant or the Participant’s
beneficiary as provided below, in which event such Associated Award may be
canceled, or (iii) pay to the Participant or the Participant’s beneficiary as
provided below, the Performance Grant Actual Value of only a portion of such
Performance Grant, in which case a complementary portion of the Associated Award
may be permitted to continue in effect in accordance with its terms or be
canceled, as determined by the Administrator.
 
Such determination by the Administrator shall be made as promptly as practicable
following the end of the Performance Grant Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Administrator shall determine, and shall be made pursuant to
criteria specified by the Administrator.
 
8.6          Payment. Unless otherwise provided in an Award Agreement, payment
of any amount in respect of the Performance Grants which the Administrator
determines to pay as provided in this Article 8 shall be made by the Company as
promptly as practicable after the end of the Performance Grant Award Period, but
in no event later than March 15th of the year following the year in which the
Performance Grant Award Period ends.
 
ARTICLE 9.
STOCK BONUSES.

 
9.1          Awards of Stock Bonuses. A Stock Bonus is an Award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or any
Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may be awarded for
services previously rendered to the Company, or any Parent, Subsidiary or
Affiliate of the Company, pursuant to an Award Agreement that will be in such
form (which need not be the same for each Participant) as the Administrator will
from time to time approve, and will comply with and be subject to the terms and
conditions of the Plan. A Stock Bonus may be awarded upon satisfaction of such
Performance Goals as are set out in advance in the Participant’s individual
Award Agreement that will be in such form (which need not be the same for each
Participant) as the Administrator will from time to time approve, and will
comply with and be subject to the terms and conditions of the Plan. Stock
Bonuses may vary from Participant to Participant and between groups of
Participants, and may be based upon the achievement of the Company, any Parent,
Subsidiary or Affiliate of the Company and/or individual Performance Goals or
upon such other criteria as the Administrator may determine.
 
 
 

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9.2          Terms of Stock Bonuses. The Administrator will determine the number
of Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of Performance Goals set forth in an Award Agreement, then
the Administrator will:
 
(a)           determine the nature, length and starting date of any Restriction
Period for each Stock Bonus;
 
(b)           determine the Performance Goals, if any, to be used to measure
performance; and
 
(c)           determine the number of Shares that may be awarded to the
Participant.
 
Prior to the payment of any Stock Bonus, the Administrator shall determine the
extent to which such Stock Bonuses have been earned and certify in writing that
any Performance Goals and any other material terms were in fact satisfied.
Restriction Periods may overlap and Participants may participate simultaneously
with respect to Stock Bonuses that are subject to different Restriction Periods
and different Performance Goals and other criteria. The number of Shares may be
fixed or may vary in accordance with such Performance Goals and criteria as may
be determined by the Administrator.
 
9.3          Form of Payment. At the time of the award of a Stock Bonus, the
Administrator shall determine the time of payment (paid currently or on a
deferred basis with such interest or dividend equivalent, if any, as the
Administrator may determine) and the method of payment (payment may be made in
the form of cash or whole Shares or a combination thereof, either in a lump sum
payment or in installments, all as the Administrator will determine).
 
ARTICLE 10.
PAYMENT FOR SHARE PURCHASES.

 
10.1        Payment. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Administrator and where permitted by Applicable Law (including, without
limitation, Section 402 of the Sarbanes-Oxley Act of 2002):
 
(a)           by cancellation of indebtedness of the Company to the Participant;
 
(b)           by surrender of shares of Common Stock that either (i) have been
owned by the Participant for more than six months (if required to avoid adverse
accounting consequences) and have been paid for within the meaning of Rule 144
promulgated under the Securities Act (and, if such shares were purchased from
the Company by use of a promissory note, such note has been fully paid with
respect to such shares) or (ii) were obtained by Participant in the public
market;
 
(c)           if allowable under Applicable Law, by tender of a full recourse
promissory note having such terms as may be approved by the Administrator and
bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code; provided, however, that Participants who are
not employees or directors of the Company will not be entitled to purchase
Shares with a promissory note unless the note is secured by collateral other
than the Shares satisfactory to the Administrator;
 
(d)           by waiver of compensation due or accrued to the Participant for
services rendered;
 
(e)           with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company’s stock exists, (i) through a
“same day sale” commitment from the Participant and a broker-dealer that is a
member of the NASD whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the Exercise
Price, and whereby such broker-dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company, or (ii) through a
“margin” commitment from the Participant and such broker-dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to such broker-dealer in a margin account as security for a loan
from such broker-dealer in the amount of the Exercise Price, and whereby such
broker-dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company;
 
 
 

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(f)           such other consideration and method of payment for the issuance of
Shares to the extent permitted by the Administrator and Applicable Law; or
 
(g)           by any combination of the foregoing.
 
10.2        Loan Guarantees. To the extent permitted by Applicable Law,
including, without limitation, Section 402 of the Sarbanes-Oxley Act of 2002,
the Company, in its sole discretion, may assist a Participant in paying for
Shares purchased under the Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
 
ARTICLE 11.
AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.

 
11.1Amendment or Substitution of Awards Under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Administrator in any manner that the Administrator deems appropriate; provided,
however, that no such amendment shall adversely affect in a material manner any
right of a Participant under such Award without the Participant’s written
consent. The Administrator may permit or require holders of Awards to surrender
outstanding Awards as a condition precedent to the grant of new Awards under the
Plan.
 
ARTICLE 12.
DESIGNATION OF BENEFICIARY BY PARTICIPANT.

 
12.1        Designation of Beneficiary by Participant. A Participant may
designate one or more beneficiaries to receive any rights and payments to which
such Participant may be entitled in respect of any Award in the event of such
Participant’s death. Such designation shall be on a written form acceptable to
and filed with the Administrator. The Administrator shall have the right to
review and approve beneficiary designations. A Participant may change the
Participant’s beneficiary(ies) from time to time in the same manner as the
original designation, unless such Participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under Applicable Law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Administrator. If
no designated beneficiary survives the Participant and is living on the date on
which any right or amount becomes payable to such Participant’s
beneficiary(ies), such payment will be made to the legal representatives of the
Participant’s estate, and the term “beneficiary” as used in the Plan shall be
deemed to include such person or persons. If there is any question as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Administrator may determine that the amount in question be paid to the legal
representatives of the estate of the Participant, in which event the Company,
the Administrator, the Board and the Committee and the members thereof will have
no further liability to any person or entity with respect to such amount.
 
ARTICLE 13.
CHANGE IN CONTROL, DISSOLUTION OR LIQUIDATION.

13.1        Change in Control. In the event there is a Change in Control of the
Company, as determined by the Board or a Committee, the Board or Committee may,
in its discretion, (i) provide for the assumption or substitution of, or
adjustment (including to the number and type of Shares and exercise or purchase
price applicable) to, each outstanding Award; (ii) accelerate the vesting of
Options and terminate any restrictions on Stock Awards and/or (iii) provide for
termination of Awards as a result of the Change in Control on such terms and
conditions as it deems appropriate, including providing for the cancellation of
Awards for a cash or other payment to the Participant.
 
For purposes of this Section 13.1, an Award shall be considered assumed, without
limitation, if, at the time of issuance of the stock or other consideration upon
a Change in Control, as the case may be, each holder of an Award would be
entitled to receive upon exercise of the Award the same number and kind of
shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of Shares covered by the Award at such time (after giving
effect to any adjustments in the number of Shares covered by the Award as
provided for in Section 4.4); provided that if such consideration received in
the transaction is not solely common stock of the successor corporation, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon exercise of the Award to be solely common
stock of the successor corporation equal to the Fair Market Value of the per
Share consideration received by holders of Common Stock in the transaction.
 
Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practicable prior to the effective date of such proposed transaction. To
the extent it has not been previously exercised or the Shares subject thereto
issued to the Participant and unless otherwise determined by the Administrator,
an Award will terminate immediately prior to the consummation of such proposed
transaction.
 
 
 

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ARTICLE 14.
PLAN AMENDMENT OR SUSPENSION.

 
14.1        Plan Amendment or Suspension. The Plan may be amended or suspended
in whole or in part at any time and from time to time by the Board, but any
amendment shall be subject to approval of the stockholders of the Company in the
manner and to the extent required by Applicable Law. To the extent required to
comply with Section 162(m), the Company shall seek re-approval of the Plan from
time to time by the stockholders. No amendment of the Plan shall adversely
affect in a material manner any right of any Participant with respect to any
Award theretofore granted without such Participant’s written consent; provided
further that the Administrator may amend an outstanding Award in order to
conform it to the Administrator’s intent (in its sole discretion) that such
Award not be subject to Code Section 409A(a)(1)(B).
 
ARTICLE 15.
PLAN TERM AND TERMINATION.

 
15.1        Plan Term and Termination. The Plan shall become effective on the
date approved by the Board (the “Effective Date”). It shall continue in effect
for a term of ten (10) years from the later of the Effective Date or the date
any amendment to add shares to the Plan is approved by stockholders of the
Company, unless terminated earlier upon the adoption of a resolution of the
Board terminating the Plan.
 
15.2        Effect of Termination on Outstanding Awards. No termination of the
Plan shall materially alter or impair any of the rights or obligations of any
person, without such person’s consent, under any Award theretofore granted under
the Plan, except that subsequent to termination of the Plan, the Administrator
may make amendments permitted under Article 11. Termination of the Plan shall
not affect the Administrator's ability to exercise the powers granted to it
hereunder with respect to Awards granted under the Plan prior to the date of
such termination.
 
ARTICLE 16.
TRANSFERABILITY.

 
16.1Transferability. Except as may be approved by the Administrator where such
approval shall not adversely affect compliance of the Plan with Sections 162 and
422 of the Code and/or Rule 16b-3, a Participant’s rights and interest under the
Plan may not be assigned or transferred, hypothecated or encumbered in whole or
in part either directly or by operation of law or otherwise (except in the event
of a Participant’s death) including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however, except as may be approved by the Administrator, that any
Option or similar right (including, but not limited to, a Stock Appreciation
Right) offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent or pursuant to a domestic relations order and shall be
exercisable during the Participant’s lifetime only by such Participant or such
person receiving such Option or similar right pursuant to a domestic relations
order.
 
ARTICLE 17.
PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

 
17.1        Voting and Dividends. No Participant will have any of the rights of
a stockholder with respect to any Shares subject to or issued pursuant to the
Plan until such Shares are issued to the Participant. After Shares are issued to
the Participant, the Participant will be a stockholder and have all the rights
of a stockholder with respect to such Shares, including the right to vote and
receive all dividends or other distributions made or paid with respect to such
Shares; provided, however, that if such Shares are Restricted Stock, then any
new, additional or different securities the Participant may become entitled to
receive with respect to such Shares by virtue of a stock dividend, stock split
or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Restricted Stock; provided, however,
further, that the Participant will have no right to retain such stock dividends
or stock distributions with respect to Restricted Stock that is repurchased at
the Participant’s Exercise Price in accordance with an Award Agreement with
respect to such Restricted Stock. In addition, all cash dividends paid with
respect to Awards of Restricted Stock shall be credited to Participants subject
to the same restrictions on transferability and forfeitability as the Restricted
Stock with respect to which they were paid. Subject to the restrictions on
vesting and the forfeiture provisions, all cash dividends credited to a
Participant shall be paid to the Participant as soon as administratively
feasible following the full vesting of the Restricted Stock with respect to
which such dividends were paid, but in no event later than the March 15th of the
year following the year in which full vesting of such Restricted Stock occurs.

 
 

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17.2        Financial Statements. The Company will provide or make available
financial statements to each Participant prior to such Participant’s purchase of
Shares under the Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, that the Company will not
be required to provide or make available such financial statements to
Participants whose services in connection with the Company assure them access to
equivalent information.
 
17.3        Restrictions on Shares. At the discretion of the Administrator, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Shares issued pursuant to such Award
Agreement and held by a Participant following such Participant’s Termination at
any time within 90 days after the later of Participant’s Termination Date or the
date Participant purchases Shares under the Plan, for cash and/or cancellation
of purchase money indebtedness, at the then Fair Market Value of such Shares.
 
ARTICLE 18.
CERTIFICATES.

18.1Certificates. All Shares or other securities delivered under this Plan will
be subject to such stock transfer orders, legends and other restrictions as the
Administrator may deem necessary or advisable, including restrictions under any
Applicable Law, or any rules, regulations and other requirements promulgated
under such laws or any stock exchange or automated quotation system upon which
the Shares may be listed or quoted and each stock certificate evidencing such
Shares and other certificates shall be appropriately legended.

ARTICLE 19.
DEPOSIT OF SHARES; ESCROW.

 
19.1        Deposit of Shares; Escrow. To enforce any restrictions on a
Participant’s Shares, the Committee may require the Participant to deposit all
stock certificates evidencing Shares, together with stock powers or other
instruments of transfer approved by the Administrator, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Administrator may
cause a legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under the Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant’s obligation to the
Company under the promissory note; provided, however, that the Administrator may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant’s Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Administrator may from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
 
ARTICLE 20.
LEGAL AND OTHER REGULATORY COMPLIANCE.

 
20.1        Compliance with Applicable Laws. Shares shall not be issued pursuant
to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares shall comply with Applicable Laws, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance. Notwithstanding any other provision in this Plan, the Company will
have no obligation, or liability for failure, to issue or deliver stock
certificates for Shares under this Plan prior to:
 
(a)           obtaining any approvals from governmental agencies that the
Administrator determines are necessary or advisable; and/or
 
(b)           completion of any registration or other qualification of such
Shares under any state or federal law or ruling of any governmental body that
the Administrator determines to be necessary or advisable.
 
20.2        Compliance with Rule 16b-3. It is the intent of the Company that the
Plan comply in all respects with Rule 16b-3 under the Exchange Act, that any
ambiguities or inconsistencies in construction of the Plan be interpreted to
give effect to such intention and that if any provision of the Plan is found not
to be in compliance with Rule 16b-3, such provision shall be deemed null and
void to the extent required to permit the Plan to comply with Rule 16b-3. No
Obligation to Register Shares or Awards. The Company will be under no obligation
to register the Shares under the Securities Act or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.

 
 

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20.4        Compliance with Section 409A. Notwithstanding anything to the
contrary contained herein, to the extent that the Administrator determines that
any Award granted under the Plan is subject to Code Section 409A and unless
otherwise specified in the applicable Award Agreement, the Award Agreement
evidencing such Award shall incorporate the terms and conditions necessary for
such Award to avoid the consequences described in Code Section 409A(a)(1), and
to the maximum extent permitted under Applicable Law (and unless otherwise
stated in the applicable Award Agreement), the Plan and the Award Agreements
shall be interpreted in a manner that results in their conforming to the
requirements of Code Section 409A(a)(2), (3) and (4) and any Department of
Treasury or Internal Revenue Service regulations or other interpretive guidance
issued under Section 409A (whenever issued, the “Guidance”). Notwithstanding
anything to the contrary in this Plan (and unless the Award Agreement provides
otherwise, with specific reference to this sentence), to the extent that a
Participant holding an Award that constitutes “deferred compensation” under
Section 409A and the Guidance is a “specified employee” (also as defined
thereunder), no distribution or payment of any amount shall be made before a
date that is six (6) months following the date of such Participant's “separation
from service” (as defined in Section 409A and the Guidance) or, if earlier, the
date of the Participant's death.
 
20.5        Deferral of Award Benefits.  The Administrator may in its discretion
and upon such terms and conditions as it determines appropriate permit one or
more Participants whom it selects to (a) defer compensation payable pursuant to
the terms of an Award, or (b) defer compensation arising outside the terms of
this Plan pursuant to a program that provides for deferred payment in
satisfaction of such other compensation amounts through the issuance of one or
more Awards. Any such deferral arrangement shall be evidenced by an Award
Agreement in such form as the Administrator shall from time to time establish,
and no such deferral arrangement shall be a valid and binding obligation unless
evidenced by a fully executed Award Agreement, the form of which the
Administrator has approved, including through the Administrator's establishing a
written program (the “Program”) under this Plan to govern the form of Award
Agreements participating in such Program. Any such Award Agreement or Program
shall specify the treatment of dividends or dividend equivalent rights (if any)
that apply to Awards governed thereby, and shall further provide that any
elections governing payment of amounts pursuant to such Program shall be in
writing, shall be delivered to the Company or its agent in a form and manner
that complies with Code Section 409A and the Guidance, and shall specify the
amount to be distributed in settlement of the deferral arrangement, as well as
the time and form of such distribution in a manner that complies with Code
Section 409A and the Guidance.
 
20.6        Tax Consequences.  The Company and any Affiliate which is in
existence or hereafter comes into existence shall not be liable to an Eligible
Recipient, Participant, employee or any other persons as to any tax consequence
realized by such person due to the receipt, vesting, exercise or settlement of
any Option or other Award granted hereunder or due to the transfer of any Shares
issued hereunder. The Participant is responsible for, and by accepting an Award
under the Plan agrees to bear, all taxes of any nature that are legally imposed
upon the Participant in connection with an Award, and the Company does not
assume, and will not be liable to any party for, any cost or liability arising
in connection with such tax liability legally imposed on the Participant. In
particular, Awards issued under the Plan may be characterized by the U.S.
Internal Revenue Service (the “IRS”) as “deferred compensation” under the Code
resulting in additional taxes, including in some cases interest and penalties.
In the event the IRS determines that an Award constitutes deferred compensation
under the Code or challenges any good faith characterization made by the Company
or any other party of the tax treatment applicable to an Award, the Participant
will be responsible for the additional taxes, and interest and penalties, if
any, that are determined to apply if such challenge succeeds, and the Company
will not reimburse the Participant for the amount of any additional taxes,
penalties or interest that result.
 
ARTICLE 21.
NO RIGHT TO EMPLOYMENT OR CONTINUATION OF RELATIONSHIP.

 
21.1        No Right to Employment or Continuation of Relationship. Nothing in
this Plan or any Award granted under the Plan will confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue any
other relationship with, the Company or any Parent, Subsidiary or Affiliate of
the Company or limit in any way the right of the Company or any Parent,
Subsidiary or Affiliate of the Company to terminate Participant’s employment or
other relationship at any time, with or without cause.
 
ARTICLE 22.
NON-EXCLUSIVITY OF THE PLAN.

 
22.1Non-Exclusivity of the Plan. Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders of the Company for approval, nor
any provision of this Plan will be construed as creating any limitations on the
power of the Board or the Committee to adopt such additional compensation
arrangements as the Board may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
 
 
 

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ARTICLE 23.
MISCELLANEOUS PROVISIONS.

 
23.1        No Rights Unless Specifically Granted. No Eligible Recipient,
employee or other person shall have any claim or right to be granted an Award
under the Plan under any contract, agreement or otherwise. Determinations made
by the Administrator under the Plan need not be uniform and may be made
selectively among Eligible Recipients under the Plan, whether or not such
Eligible Recipients are similarly situated.
 
23.2        No Rights Until Written Evidence Delivered. No Participant or other
person shall have any right with respect to the Plan, the Shares reserved for
issuance under the Plan or in any Award, contingent or otherwise, until written
evidence of the Award, in the form of an Award Agreement, shall have been
delivered to the recipient and all the terms, conditions and provisions of the
Plan and the Award applicable to such recipient (and each person claiming under
or through such recipient) have been met.
 
23.3        Right to Withhold Payments. The Company and any Parent, Subsidiary
and Affiliate of the Company shall have the right to deduct from any payment
made under the Plan, any federal, state, local or foreign income or other taxes
required by law to be withheld with respect to such payment. It shall be a
condition to the obligation of the Company to issue Shares, other securities or
property of the Company, other securities or property, or other forms of
payment, or any combination thereof, upon exercise, settlement or payment of any
Award under the Plan, that the Participant (or any beneficiary or person
entitled to act) pay to the Company, upon its demand, such amount as may be
requested by the Company for the purpose of satisfying any liability to withhold
federal, state, local or foreign income or other taxes. If the amount requested
is not paid, the Company may refuse to issue Shares, other securities or
property of the Company, other securities or property, or other forms of
payment, or any combination thereof. Notwithstanding anything in the Plan to the
contrary, the Administrator may permit a Participant (or any beneficiary or
person entitled to act) to elect to pay a portion or all of the amount requested
by the Company for such taxes with respect to such Award, at such time and in
such manner as the Administrator shall deem to be appropriate, including, but
not limited to, by authorizing the Company to withhold, or agreeing to surrender
to the Company on or about the date such tax liability is determinable, Shares,
other securities or property of the Company, other securities or property, or
other forms of payment, or any combination thereof, owned by such person or a
portion of such forms of payment that would otherwise be distributed, or have
been distributed, as the case may be, pursuant to such Award to such person,
having a fair market value equal to the amount of such taxes.
 
23.4        Expenses of Administration. The expenses of the Plan shall be borne
by the Company. However, if an Award is made to an individual employed by or
performing services for a Parent, Subsidiary or Affiliate of the Company:
 
(a)           if such Award results in payment of cash to the Participant, such
Parent, Subsidiary or Affiliate shall pay to the Company an amount equal to such
cash payment unless the Administrator shall otherwise determine;
 
(b)           if the Award results in the issuance by the Company to the
Participant of Shares, other securities or property of the Company, other
securities or property, or other forms of payment, or any combination thereof,
such Parent, Subsidiary or Affiliate of the Company shall, unless the
Administrator shall otherwise determine, pay to the Company an amount equal to
the fair market value thereof, as determined by the Administrator, on the date
such Shares, other securities or property of the Company, other securities or
property, or other forms of payment, or any combination thereof, are issued (or,
in the case of the issuance of Restricted Stock or of Shares, other securities
or property of the Company, or other securities or property, or other forms of
payment subject to transfer and forfeiture conditions, equal to the fair market
value thereof on the date on which they are no longer subject to such applicable
restrictions), minus the amount, if any, received by the Company in respect of
the purchase of such Shares, other securities or property of the Company, other
securities or property or other forms of payment, or any combination thereof,
all as the Administrator shall determine; and
 
(c)           the foregoing obligations of any such Parent, Subsidiary or
Affiliate of the Company shall survive and remain in effect and binding on such
entity even if its status as a Parent, Subsidiary or Affiliate of the Company
should subsequently cease, except as otherwise agreed by the Company and such
Parent, Subsidiary or Affiliate.
 
 
 

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23.5        Unfunded Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under the Plan, and
rights to the payment of Awards shall be no greater than the rights of the
Company’s general creditors.
 
23.6        Acceptance of Award Deemed Consent. By accepting any Award or other
benefit under the Plan, each Participant and each person claiming under or
through such Participant shall be conclusively deemed to have indicated such
Participant’s (or other person’s) acceptance and ratification of, and consent
to, any action taken by the Company, Administrator, Board or Committee or their
respective delegates under the Plan.
 
23.7        Use of Terms. For the purposes of the Plan, in the use of any term,
the singular includes the plural and the plural includes the singular wherever
appropriate.
 
23.8        Filing of Reports. The appropriate officers of the Company shall
cause to be filed any reports, returns or other information regarding Awards
hereunder or any Shares issued pursuant hereto as may be required by Section 13
or 15(d) of the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
 
23.9        Validity; Construction; Interpretation. The validity, construction,
interpretation, administration and effect of the Plan, and of its rules and
regulations, and rights relating to the Plan and Award Agreements and to Awards
granted under the Plan, shall be governed by the substantive laws, but not the
choice of law rules, of the State of Nevada.

 
 

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