PANSOFT COMPANY LIMITED
 
2008 STOCK INCENTIVE PLAN
 
 
1. Purpose and Effective Date.
 
(a) The purpose of the Pansoft Company Limited 2008 Stock Incentive Plan (the
“Plan”) is to further the long term stability and financial success of Pansoft
Company Limited (the “Company”) by attracting and retaining personnel, including
employees, non-employee directors, and consultants, through the use of stock
incentives. It is believed that ownership of Company stock will stimulate the
efforts of those employees upon whose judgment, interest and efforts the Company
is and will be largely dependent for the successful conduct of its business.
 
(b) The Plan was adopted by the Board of Directors of the Company on July 20,
2008 (the “Effective Date”).
 
2. Definitions.
 
(a) Act. The Securities Exchange Act of 1934, as amended.
 
(b) Affiliate. The meaning assigned to the term “affiliate” under Rule 12b-2 of
the Act.
 
(c) Applicable Withholding Taxes. The aggregate amount of federal, state and
local income and payroll taxes that the Company is required to withhold (based
on the minimum applicable statutory withholding rates) in connection with any
exercise of an Option or the award, lapse of restrictions or payment with
respect to Restricted Stock.
 
(d) Award. The award of an Option or Restricted Stock under the Plan.
 
(e) Beneficiary. The person or persons entitled to receive a benefit pursuant to
an Award upon the death of a Participant.
 
(f) Board. The Board of Directors of the Company.
 
(g) Cause. Dishonesty, fraud, misconduct, gross incompetence, gross negligence,
breach of a material fiduciary duty, material breach of an agreement with the
Company, unauthorized use or disclosure of confidential information or trade
secrets, or conviction or confession of a crime punishable by law (except minor
violations), in each case as determined by the Committee, which determination
shall be binding. Notwithstanding the foregoing, if “Cause” is defined in an
employment agreement between a Participant and the Company, “Cause” shall have
the meaning assigned to it in such agreement.
 
(h) Change of Control.
 
(i) The acquisition by any unrelated person of beneficial ownership (as that
term is used for purposes of the Act) of 50% or more of the then outstanding
shares of common stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors. The term “unrelated person” means any person other than
(x) the Company and its subsidiaries, (y) an employee benefit plan or related
trust sponsored by the Company or its subsidiaries, and (z) a person who
acquires stock of the Company pursuant to an agreement with the Company that is
approved by the Board in advance of the acquisition. For purposes of this
subsection, a “person” means an individual, entity or group, as that term is
used for purposes of the Act;
 
(ii) Any tender or exchange offer, merger or other business combination, sale of
assets or any combination of the foregoing transactions, and the Company is not
the surviving corporation; and
 
(iii) A liquidation of the Company.
 
(i) Code. The Internal Revenue Code of 1986, as amended.  
 
(j) Committee. The Compensation Committee of the Board.
 
(k) Company. Pansoft Company Limited
 
(l) Company Stock. The common stock of the Company, without par value per share.
In the event of a change in the capital structure of the Company (as provided in
Section 12 below), the shares resulting from such a change shall be deemed to be
Company Stock within the meaning of the Plan.
 
 
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(m) Consultant. A person rendering services to the Company who is not an
“employee” for purposes of employment tax withholding under the Code.
 
(n) Corporate Change. A consolidation, merger, dissolution or liquidation of the
Company, or a sale or distribution of assets or stock (other than in the
ordinary course of business) of the Company; provided that, unless the Committee
determines otherwise, a Corporate Change shall only be considered to have
occurred with respect to Participants whose business unit is affected by the
Corporate Change.
 
(o) Date of Grant. The date as of which an Award is made by the Committee.
 
(p) Disability or Disabled. As to an Incentive Stock Option, a Disability within
the meaning of Code Section 22(e)(3). As to all other Incentive Awards, the
Committee shall determine whether a Disability exists and such determination
shall be conclusive.
 
(q) Fair Market Value.
 
(i) If Company Stock is traded on a national securities exchange or the NASDAQ
Stock Market, the average of the highest and lowest registered sales prices of
Company Stock on such exchange or the NASDAQ Stock Market;
 
(ii) If Company Stock is traded in the over-the-counter market, the average
between the closing bid and asked prices as reported by the NASDAQ Stock Market;
or
 
(iii) If shares of Company Stock are not publicly traded, the Fair Market Value
shall be determined by the Committee using any reasonable method in good faith.
 
Fair Market Value shall be determined as of the applicable date specified in the
Plan or, if there are no trades on such date, the value shall be determined as
of the last preceding day on which Company Stock is traded.
 
(r) Incentive Stock Option. An Option intended to meet the requirements of, and
qualify for favorable Federal income tax treatment under, Code Section 422.
 
(s) Nonstatutory Stock Option. An Option that does not meet the requirements of
Code Section 422, or that is otherwise not intended to be an Incentive Stock
Option and is so designated.
 
(t) Option. A right to purchase Company Stock granted under the Plan, at a price
determined in accordance with the Plan.
 
(u) Participant. Any individual who receives an Award under the Plan.
 
(v) Restricted Stock. Company Stock awarded upon the terms and subject to the
restrictions set forth in Section 7 below.
 
(w) Rule 16b-3. Rule 16b-3 of the Act, including any corresponding subsequent
rule or any amendments to Rule 16b-3 enacted after the effective date of the
Plan.
 
(x) 10% Shareholder. A person who owns, directly or indirectly, stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or an Affiliate. Indirect ownership of stock shall be determined in
accordance with Code Section 424(d).  
 
3. General. Awards of Options and Restricted Stock may be granted under the
Plan. Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options.
 
4. Stock. Subject to Section 12 of the Plan, there shall be reserved for
issuance under the Plan a total of 604,248 unissued shares of Company Stock.
Shares allocable to Options granted under the Plan that expire or otherwise
terminate unexercised and shares that are forfeited pursuant to restrictions on
Restricted Stock awarded under the Plan may again be subjected to an Award under
this Plan. For purposes of determining the number of shares that are available
for Awards under the Plan, such number shall, if permissible under Rule 16b-3,
include the number of shares surrendered by a Participant or retained by the
Company (a) in connection with the exercise of an Option or (b) in payment of
Applicable Withholding Taxes.
 
 
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5. Eligibility.
 
(a) Any employee of, non-employee director of, or Consultant to the Company or
its affiliates, Pansoft Company Limited or Pansoft (Jinan) Co., Ltd., who, in
the judgment of the Committee, has contributed or can be expected to contribute
to the profits or growth of the Company is eligible to become a Participant. The
Committee shall have the power and complete discretion, as provided in
Section 14, to select eligible Participants and to determine for each
Participant the terms, conditions and nature of the Award and the number of
shares to be allocated as part of the Award; provided, however, that any award
made to a member of the Committee must be approved by the Board. The Committee
is expressly authorized to make an Award to a Participant conditioned on the
surrender for cancellation of an existing Award.
 
(b) The grant of an Award shall not obligate the Company to pay an employee any
particular amount of remuneration, to continue the employment of the employee
after the grant or to make further grants to the employee at any time
thereafter.
 
(c) Non-employee directors and Consultants shall not be eligible to receive the
Award of an Incentive Stock Option.
 
(d) The maximum number of shares with respect to which an Award may be granted
in any calendar year to any employee during such calendar year shall be 100,000
shares of Company Stock.
 
6. Stock Options.
 
(a) Whenever the Committee deems it appropriate to grant Options, notice shall
be given to the Participant stating the number of shares for which Options are
granted, the Option price per share, whether the options are Incentive Stock
Options or Nonstatutory Stock Options, and the conditions to which the grant and
exercise of the Options are subject. This notice, when duly accepted in writing
by the Participant, shall become a stock option agreement between the Company
and the Participant.
 
(b) The Committee shall establish the exercise price of Options. The exercise
price of an Incentive Stock Option shall be not less than 100% of the Fair
Market Value of such shares on the Date of Grant, provided that if the
Participant is a 10% Shareholder, the exercise price of an Incentive Stock
Option shall be not less than 110% of the Fair Market Value of such shares on
the Date of Grant. The exercise price of a Nonstatutory Stock Option Award shall
not be less than 100% of the Fair Market Value of the shares of Company Stock
covered by the Option on the Date of Grant.
 
(c) Options may be exercised in whole or in part at such times as may be
specified by the Committee in the Participant’s stock option agreement. The
Committee may impose such vesting conditions and other requirements as the
Committee deems appropriate, and the Committee may include such provisions
regarding a Change of Control or Corporate Change as the Committee deems
appropriate. 
 
(d) The Committee shall establish the term of each Option in the Participant
stock option agreement. The term of an Incentive Stock Option shall not be
longer than ten years from the Date of Grant, except that an Incentive Stock
Option granted to a 10% Shareholder may not have a term in excess of five years.
No option may be exercised after the expiration of its term or, except as set
forth in the Participant’s stock option agreement, after the termination of the
Participant’s employment. The Committee shall set forth in the Participant’s
stock option agreement when, and under what circumstances, an Option may be
exercised after termination of the Participant’s employment or period of
service; provided that no Incentive Stock Option may be exercised after
(i) three months from the Participant’s termination of employment with the
Company for reasons other than Disability or death, or (ii) one year from the
Participant’s termination of employment on account of Disability or death. The
Committee may, in its sole discretion, amend a previously granted Incentive
Stock Option to provide for more liberal exercise provisions, provided however
that if the Incentive Stock Option as amended no longer meets the requirements
of Code Section 422, and, as a result the Option no longer qualifies for
favorable federal income tax treatment under Code Section 422, the amendment
shall not become effective without the written consent of the Participant.
 
(e) An Incentive Stock Option, by its terms, shall be exercisable in any
calendar year only to the extent that the aggregate Fair Market Value
(determined at the Date of Grant) of Company Stock with respect to which
Incentive Stock Options are exercisable by the Participant for the first time
during the calendar year does not exceed $100,000 (the “Limitation Amount”).
Incentive Stock Options granted under the Plan and all other plans of the
Company and any parent or Subsidiary of the Company shall be aggregated for
purposes of determining whether the Limitation Amount has been exceeded. The
Board may impose such conditions as it deems appropriate on an Incentive Stock
option to ensure that the foregoing requirement is met. If Incentive Stock
Options that first become exercisable in a calendar year exceed the Limitation
Amount, the excess Options will be treated as Nonstatutory Stock Options to the
extent permitted by law.
 
(f) If a Participant dies and if the Participant’s stock option agreement
provides that part or all of the Option may be exercised after the Participant’s
death, then such portion may be exercised by the personal representative of the
Participant’s estate during the time period specified in the stock option
agreement.
 
(g) If a Participant’s employment or services is terminated by the Company for
Cause, the Participant’s Options shall terminate as of the date of the
misconduct.
 
 
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7. Restricted Stock Awards.
 
(a) Whenever the Committee deems it appropriate to grant a Restricted Stock
Award, notice shall be given to the Participant stating the number of shares of
Restricted Stock for which the Award is granted and the terms and conditions to
which the Award is subject. This notice, when accepted in writing by the
Participant, shall become an Award agreement between the Company and the
Participant. Certificates representing the shares shall be issued in the name of
the Participant, subject to the restrictions imposed by the Plan and the
Committee. A Restricted Stock Award may be made by the Committee in its
discretion without cash consideration.
 
(b) The Committee may place such restrictions on the transferability and vesting
of Restricted Stock as the Committee deems appropriate, including restrictions
relating to continued employment and financial performance goals. Without
limiting the foregoing, the Committee may provide performance or Change of
Control or Corporate Change acceleration parameters under which all, or a
portion, of the Restricted Stock will vest on the Company’s achievement of
established performance objectives. Restricted Stock may not be sold, assigned,
transferred, disposed of, pledged, hypothecated or otherwise encumbered until
the restrictions on such shares shall have lapsed or shall have been removed
pursuant to subsection (c) below.
 
(c) The Committee may provide in a Restricted Stock Award, or subsequently, that
the restrictions will lapse if a Change of Control or Corporate Change occurs.
The Committee may at any time, in its sole discretion, accelerate the time at
which any or all restrictions will lapse or may remove restrictions on
Restricted Stock as it deems appropriate.  
 
(d) A Participant shall hold shares of Restricted Stock subject to the
restrictions set forth in the Award agreement and in the Plan. In other
respects, the Participant shall have all the rights of a shareholder with
respect to the shares of Restricted Stock, including, but not limited to, the
right to vote such shares and the right to receive all cash dividends and other
distributions paid thereon. Certificates representing Restricted Stock shall
bear a legend referring to the restrictions set forth in the Plan and the
Participant’s Award agreement. If stock dividends are declared on Restricted
Stock, such stock dividends or other distributions shall be subject to the same
restrictions as the underlying shares of Restricted Stock.
 
8. Method of Exercise of Options.
 
(a) Options may be exercised by giving written notice of the exercise to the
Company, stating the number of shares the Participant has elected to purchase
under the Option. Such notice shall be effective only if accompanied by the
exercise price in full in cash; provided that, if the terms of an Option so
permit, the Participant may (i) deliver Company Stock that the Participant has
owned for at least six months (valued at Fair Market Value on the date of
exercise), or (ii) exercise any applicable net exercise provision contained
therein. Unless otherwise specifically provided in the Option, any payment of
the exercise price paid by delivery of Company Stock acquired directly or
indirectly from the Company shall be paid only with shares of Company Stock that
have been held by the Participant for more than six months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes).
 
(b) Notwithstanding anything herein to the contrary, Awards shall always be
granted and exercised in such a manner as to conform to the provisions of Rule
16b-3.
 
9. Applicable Withholding Taxes. Each Participant shall agree, as a condition of
receiving an Award, to pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, all Applicable Withholding Taxes with
respect to the Award. Until the Applicable Withholding Taxes have been paid or
arrangements satisfactory to the Company have been made, no stock certificates
(or, in the case of Restricted Stock, no stock certificates free of a
restrictive legend) shall be issued to the Participant. As an alternative to
making a cash payment to the Company to satisfy Applicable Withholding Tax
obligations, the Committee may establish procedures permitting the Participant
to elect to (a) deliver shares of already owned Company Stock (subject to such
restrictions as the Committee may establish, including a requirement that any
shares of Company Stock so delivered shall have been held by the Participant for
not less than six months) or (b) have the Company retain that number of shares
of Company Stock that would satisfy all or a specified portion of the Applicable
Withholding Taxes. Any such election shall be made only in accordance with
procedures established by the Committee and in accordance with Rule 16b-3.
 
10. Nontransferability of Awards.
 
(a) In general, Awards, by their terms, shall not be transferable by the
Participant except by will or by the laws of descent and distribution or except
as described below. Options shall be exercisable, during the Participant’s
lifetime, only by the Participant or by his guardian or legal representative.
 
(b) Notwithstanding the provisions of (a) and subject to federal and state
securities laws, the Committee may grant Nonstatutory Stock Options that permit
a Participant to transfer the Options to one or more immediate family members,
to a trust for the benefit of immediate family members, or to a partnership,
limited liability company, or other entity the only partners, members, or
interest-holders of which are among the Participant’s immediate family members.
Consideration may not be paid for the transfer of Options. The transferee of an
Option shall be subject to all conditions applicable to the Option prior to its
transfer. The agreement granting the Option shall set forth the transfer
conditions and restrictions. The Committee may impose on any transferable Option
and on stock issued upon the exercise of an Option such limitations and
conditions as the Committee deems appropriate.
 
 
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11. Termination, Modification, Change. If not sooner terminated by the Board,
this Plan shall terminate at the close of business on the tenth anniversary of
the Effective Date. No Awards shall be made under the Plan after its
termination. The Board may terminate the Plan or may amend the Plan in such
respects as it shall deem advisable; provided that, if and to the extent
required by Rule 16b-3, no change shall be made that increases the total number
of shares of Company Stock reserved for issuance pursuant to Awards granted
under the Plan (except pursuant to Section 12), expands the class of persons
eligible to receive Awards, or materially increases the benefits accruing to
Participants under the Plan, unless such change is authorized by the
shareholders of the Company. Notwithstanding the foregoing, the Board may
unilaterally amend the Plan and Awards as it deems appropriate to ensure
compliance with Rule 16b-3 and to cause Incentive Stock Options to meet the
requirements of the Code and regulations thereunder. Except as provided in the
preceding sentence, a termination or amendment of the Plan shall not, without
the consent of the Participant, adversely affect a Participant’s rights under an
Award previously granted to him.
  
12. Change in Capital Structure.
 
(a) In the event of a stock dividend, stock split or combination of shares,
spin-off, reclassification, recapitalization, merger or other change in the
Company’s capital stock (including, but not limited to, the creation or issuance
to shareholders generally of rights, options or warrants for the purchase of
common stock or preferred stock of the Company), the number and kind of shares
of stock or securities of the Company to be issued under the Plan (under
outstanding Awards and Awards to be granted in the future), the exercise price
of options, and other relevant provisions shall be appropriately adjusted by the
Committee, whose determination shall be binding on all persons. If the
adjustment would produce fractional shares with respect to any Award, the
Committee may adjust appropriately the number of shares covered by the Award so
as to eliminate the fractional shares.
 
(b) In the event the Company distributes to its shareholders a dividend, or
sells or causes to be sold to a person other than the Company or a Subsidiary
shares of stock in any corporation (a “Spinoff Company”) which, immediately
before the distribution or sale, was a majority owned Subsidiary of the Company,
the Committee shall have the power, in its sole discretion, to make such
adjustments as the Committee deems appropriate. The Committee may make
adjustments in the number and kind of shares or other securities to be issued
under the Plan (under outstanding Awards and Awards to be granted in the
future), the exercise price of Options, and other relevant provisions, and,
without limiting the foregoing, may substitute securities of a Spinoff Company
for securities of the Company. The Committee shall make such adjustments as it
determines to be appropriate, considering the economic effect of the
distribution or sale on the interests of the Company’s shareholders and the
Participants in the businesses operated by the Spinoff Company, and subject to
the proviso that any such adjustments or new options shall not be made or
granted, respectively, that would result in subjecting the Plan to variable plan
accounting treatment. The Committee’s determination shall be binding on all
persons. If the adjustment would produce fractional shares with respect to any
Award, the Committee may adjust appropriately the number of shares covered by
the Award so as to eliminate the fractional shares.
 
(c) To the extent required to avoid a charge to earnings for financial
accounting purposes, adjustments made by the Committee pursuant to this
Section 12 to outstanding Awards shall be made so that both (i) the aggregate
intrinsic value of an Award immediately after the adjustment is not greater than
or less than the Award’s aggregate intrinsic value before the adjustment and
(ii) the ratio of the exercise price per share to the market value per share is
not reduced.
 
(d) Notwithstanding anything in the Plan to the contrary, the Committee may take
the foregoing actions without the consent of any Participant, and the
Committee’s determination shall be conclusive and binding on all persons for all
purposes. The Committee shall make its determinations consistent with Rule 16b-3
and the applicable provisions of the Code.
 
13. Change of Control. In the event of a Change of Control or Corporate Change,
the Committee may take such actions with respect to Awards as the Committee
deems appropriate. These actions may include, but shall not be limited to, the
following:
 
(a) At the time the Award is made, provide for the acceleration of the vesting
schedule relating to the exercise or realization of the Award so that the Award
may be exercised or realized in full on or before a date initially fixed by the
Committee;
  
(b) Provide for the purchase or settlement of any such Award by the Company for
any amount of cash equal to the amount which could have been obtained upon the
exercise of such Award or realization of a Participant’s rights had such Award
been currently exercisable or payable;
 
(c) Make adjustments to Awards then outstanding as the Committee deems
appropriate to reflect such Change of Control or Corporate Change; provided,
however, that to the extent required to avoid a charge to earnings for financial
accounting purposes, such adjustments shall be made so that both (i) the
aggregate intrinsic value of an Award immediately after the adjustment is not
greater than or less than the Award’s aggregate intrinsic value before the Award
and (ii) the ratio of the exercise price per share to the market value per share
is not reduced; or
 
(d) Cause any such Award then outstanding to be assumed, or new rights
substituted therefore, by the acquiring or surviving legal entity in such Change
of Control or Corporate Change.
 
 
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14. Administration of the Plan.
 
(a) The Plan shall be administered by the Committee, who shall be appointed by
the Board. The Board may designate the Compensation Committee of the Board, or a
subcommittee of the Compensation Committee, to be the Committee for purposes of
the Plan. If and to the extent required by Rule 16b-3, all members of the
Committee shall be “Non-Employee Directors” as that term is defined in Rule
16b-3, and the Committee shall be comprised solely of two or more “outside
directors” as that term is defined for purposes of Code section 162(m). If any
member of the Committee fails to qualify as an “outside director” or (to the
extent required by Rule 16b-3) a “Non-Employee Director,” such person shall
immediately cease to be a member of the Committee and shall not take part in
future Committee deliberations. The Board of Directors may from time to time may
appoint members of the Committee and fill vacancies, however caused, in the
Committee.
 
(b) The Committee shall have the authority to impose such limitations or
conditions upon an Award as the Committee deems appropriate to achieve the
objectives of the Award and the Plan. Without limiting the foregoing and in
addition to the powers set forth elsewhere in the Plan, the Committee shall have
the power and complete discretion to determine (i) which eligible persons shall
receive an Award and the nature of the Award, (ii) the number of shares of
Company Stock to be covered by each Award, (iii) whether Options shall be
Incentive Stock options or Nonstatutory Stock Options, (iv) the Fair Market
Value of Company Stock, (v) the time or times when an Award shall be granted,
(vi) whether an Award shall become vested over a period of time, according to a
performance-based vesting schedule or otherwise, and when it shall be fully
vested, (vii) the terms and conditions under which restrictions imposed upon an
Award shall lapse, (viii) whether a Change of Control or Corporate Change
exists, (ix) the terms of incentive programs, performance criteria and other
factors relevant to the issuance of Incentive Stock or the lapse of restrictions
on Restricted Stock or Options, (x) when Options may be exercised, (xi) whether
to approve a Participant’s election with respect to Applicable Withholding
Taxes, (xii) conditions relating to the length of time before disposition of
Company Stock received in connection with an Award is permitted, (xiii) notice
provisions relating to the sale of Company Stock acquired under the Plan, and
(xiv) any additional requirements relating to Awards that the Committee deems
appropriate. Notwithstanding the foregoing, no “tandem stock options” (where two
stock options are issued together and the exercise of one option affects the
right to exercise the other option) may be issued in connection with Incentive
Stock Options.
 
(c) The Committee shall have the power to amend the terms of previously granted
Awards so long as the terms as amended are consistent with the terms of the Plan
and, where applicable, consistent with the qualification of an option as an
Incentive Stock Option. The consent of the Participant must be obtained with
respect to any amendment that would adversely affect the Participant’s rights
under the Award, except that such consent shall not be required if such
amendment is for the purpose of complying with Rule 16b-3 or any requirement of
the Code applicable to the Award.
 
(d) The Committee may adopt rules and regulations for carrying out the Plan. The
Committee shall have the express discretionary authority to construe and
interpret the Plan and the Award agreements, to resolve any ambiguities, to
define any terms, and to make any other determinations required by the Plan or
an Award agreement. The interpretation and construction of any provisions of the
Plan or an Award agreement by the Committee shall be final and conclusive. The
Committee may consult with counsel, who may be counsel to the Company, and shall
not incur any liability for any action taken in good faith in reliance upon the
advice of counsel.
  
(e) A majority of the members of the Committee shall constitute a quorum, and
all actions of the Committee shall be taken by a majority of the members
present. Any action may be taken by a written instrument signed by all of the
members, and any action so taken shall be fully effective as if it had been
taken at a meeting.
 
15. Issuance of Company Stock. The Company shall not be required to issue or
deliver any certificate for shares of Company Stock before (i) the admission of
such shares to listing on any stock exchange on which Company Stock may then be
listed, (ii) receipt of any required registration or other qualification of such
shares under any state or federal securities law or regulation that the
Company’s counsel shall determine is necessary or advisable, and (iii) the
Company shall have been advised by counsel that all applicable legal
requirements have been complied with. The Company may place on a certificate
representing Company Stock any legend required to reflect restrictions pursuant
to the Plan, and any legend deemed necessary by the Company’s counsel to comply
with federal or state securities laws. The Company may require a customary
written indication of a Participant’s investment intent. Until a Participant has
been issued a certificate for the shares of Company Stock acquired, the
Participant shall possess no shareholder rights with respect to the shares.
 
16. Rights Under the Plan. Title to and beneficial ownership of all benefits
described in the Plan shall at all times remain with the Company. Participation
in the Plan and the right to receive payments under the Plan shall not give a
Participant any proprietary interest in the Company or any Affiliate or any of
their assets. No trust fund shall be created in connection with the Plan, and
there shall be no required funding of amounts that may become payable under the
Plan. A Participant shall, for all purposes, be a general creditor of the
Company. The interest of a Participant in the Plan cannot be assigned,
anticipated, sold, encumbered or pledged and shall not be subject to the claims
of his creditors.
 
17. Beneficiary. A Participant may designate, on a form provided by the
Committee, one or more beneficiaries to receive any payments under Awards of
Restricted Stock or Incentive Stock after the Participant’s death. If a
Participant makes no valid designation, or if the designated beneficiary fails
to survive the Participant or otherwise fails to receive the benefits, the
Participant’s beneficiary shall be the first of the following persons who
survives the Participant: (a) the Participant’s surviving spouse, (b) the
Participant’s surviving descendants, per stirpes, or (c) the personal
representative of the Participant’s estate.
 
18. Notice. All notices and other communications required or permitted to be
given under this Plan shall be in writing and shall be deemed to have been duly
given if delivered personally or mailed first class, postage prepaid, as
follows: (a) if to the Company—at its principal business address to the
attention of the Secretary; (b) if to any Participant—at the last address of the
Participant known to the sender at the time the notice or other communication is
sent.
 
19. Interpretation. The terms of this Plan and Awards granted pursuant to the
Plan are subject to all present and future regulations and rulings of the
Secretary of the Treasury relating to the qualification of Incentive Stock
Options under the Code or compliance with Code section 162(m), to the extent
applicable, and they are subject to all present and future rulings of the
Securities and Exchange Commission with respect to Rule 16b-3. If any provision
of the Plan or an Award conflicts with any such regulation or ruling, to the
extent applicable, the Committee shall cause the Plan to be amended, and shall
modify the Award, so as to comply, or if for any reason amendments cannot be
made, that provision of the Plan and/or the Award shall be void and of no
effect.
 

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