TRINITY3 CORPORATION

2004 OMNIBUS SECURITIES

AND STOCK OPTION PLAN

       

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TABLE OF CONTENTS
 

   

 Page

     
SECTION 1.
PURPOSE
1
  
 
SECTION 2.
DEFINITIONS
1
 
 
 
 
(a)
“Award”
1
 
(b)
“Board of Directors”

1

 

(c)

“Change in Control”

1

 
(d)
“Code”
1
 
(e)
“Committee”
2
 
(f)
“Common-Law Employee”
2
 
(g)
“Company”
2
 
(h)
“Employee”
2
 
(i)
“Exchange Act”
2
 
(j)
“Exercise Price”
2
 
(k)
“Fair Market Value”
2
 
(l)
“Incentive Stock Option” or “ISO”
3
 
(m)
“Nonstatutory Option” or “NSO”
3
 
(n)
“Offeree”
3
 
(o)
“Option”
3
 
(p)
“Optionee”
3
 
(q)
“Outside Director”
3
 
(r)
“Participant”
3
 
(s)
“Plan”
3
 
(t)
“Plan Year”3
3
 
(u)
“Purchase Price”
3
 
(v)
“Restricted Share”
3
 
(w)
“Service”
3
 
(x)
“Share”
3
 
(y)
“Stock”
3
 
(z)
“Stock Award Agreement”
3
 
(aa)
“Stock Option Agreement”
3
 
(bb)
“Stock Purchase Agreement”
4
 
(cc)
“Subsidiary”
4
 
(dd) “Total and Permanent Disability”

4

 
(ee)
“W-2 Payroll”
4
SECTION 3.
ADMINISTRATION.
4
        (a) Committee Membership

4

  (b) Committee Procedures

 4

  (c) Committee Responsibilities

 4

  (d) Committee Liability

 5

  (e) Financial Reports 

5 

       

 

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 SECTION 4.    ELIGIBILITY.

 5

          (a) General Rule

 5

  (b) Ten-Percent Shareholders 

 5

  (c)  Attribution Rules 

 5

  (d)  Outstanding Stock

5

         SECTION 5.   STOCK SUBJECT TO PLAN.

 5

     

 5

  (a) Basic Limitation 

 6

  (b) Additional Shares             SECTION 6.   TERMS AND CONDITIONS OF AWARDS
OR SALES.

 6

          (a)  Stock Purchase Agreement 

 6

  (b) Duration of Offers 

6

  (c) Purchase Price 

6

  (d) Payment for Shares

6

  (e) Exercise of Awards on Termination of Service 

 7

         SECTION 7.   ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED

7 

          (a) Form and Amount of Award

 7

  (b)  Exercisability 

7

  (c)  Effect of Change in Control

 7

  (d)  Voting Rights

 7

         SECTION 8.   TERMS AND CONDITIONS OF OPTIONS.

 8

          (a)  Stock Option Agreement 

8

  (b)  Number of Shares 

8

  (c)  Exercise Price 

 8

  (d) Exercisability 

 8

  (e)  Effect of Change in Control 

 8

  (f) Term

 8

  (g) Exercise of Options on Termination of Service 

 8

  (h) Payment of Option Shares

 9

  (i) Modification, Extension and Assumption of Options 

 9

         SECTION 9.   ADJUSTMENT OF SHARES. 

 9

          (a) General 

 9

  (b) Reorganizations 

 10

  (c) Reservation of Rights

 10

         SECTION 10.   WITHHOLDING TAXES. 

 10

          (a) General

 10

  (b) Share Withholding

 10

  (c) Cashless Exercise/Pledge 

 10

  (d) Other Forms of Payment 

 10

       

 

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 SECTION 11.   ASSIGNMENT OR TRANSFER OF AWARDS.

 10

          (a) General 

 10

  (b)  Trusts

 11

       SECTION 12.   LEGAL REQUIREMENTS. 

 11

                 SECTION 13.   NO EMPLOYMENT RIGHTS. 

 11

         SECTION 14.   DURATION AND AMENDMENTS. 

 11

     

 

  (a)  Term of the Plan 

 11

  (b)  Right to Amend or Terminate the Plan 

 11

  (c)  Effect of Amendment or Termination 

 11

 
   

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TRINITY3 CORPORATION
2004 OMNIBUS SECURITES AND STOCK OPTION PLAN

SECTION 1. PURPOSE.
 
The purpose of the Trinity3 Corporation 2004 Omnibus Securities and Stock Option
Plan (the “Plan”) is to offer selected employees, directors and consultants an
opportunity to acquire a proprietary interest in the success of the Company, or
to increase such interest, to encourage such selected persons to remain in the
employ of the Company, and to attract new employees with outstanding
qualifications. The Plan seeks to achieve this purpose by providing for Awards
in the form of Restricted Shares and Options (which may constitute Incentive
Stock Options or Nonstatutory Stock Options) as well as the direct award or sale
of Shares of the Company’s Common Stock. Awards may be granted under this Plan
in reliance upon federal and state securities law exemptions.
 
SECTION 2. DEFINITIONS.
 
(a)   “Award” shall mean any award of an Option, Restricted Share or other right
under the Plan.
 
(b)   “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.
 
(c)   “Change in Control” shall mean:
    

   (i)   The consummation of a merger, consolidation, sale of the Company’s
stock, or other reorganization of the Company (other than a reincorporation of
the Company), if after giving effect to such merger, consolidation or other
reorganization of the Company, the stockholders of the Company immediately prior
to such merger, consolidation or other reorganization do not represent a
majority interest of the holders of voting securities (on a fully diluted basis)
with the ordinary voting power to elect directors of the surviving or resulting
entity after such merger, consolidation or other reorganization; or
 
(ii)   The sale of all or substantially all of the assets of the Company to a
third party who is not an affiliate of the Company.
 
(iii)   The term Change in Control shall not include: (a) a transaction the sole
purpose of which is to change the state of the Company’s incorporation, or (b)
the Company’s initial public offering.
                
(d)   “Code” shall mean the Internal Revenue Code of 1986, as amended.
 

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(e)   “Committee” shall mean a committee of the Board of Directors which is
authorized to administer the Plan under Section 3.
 
(f)   “Common-Law Employee” shall mean an individual paid from W-2 Payroll of
the Company or a Subsidiary. If, during any period, the Company (or Subsidiary,
as applicable) has not treated an individual as a Common-Law Employee and, for
that reason, has not paid such individual in a manner which results in the
issuance of a Form W-2 and withheld taxes with respect to him or her, then that
individual shall not be an eligible Employee for that period, even if any
person, court of law or government agency determines, retroactively, that that
individual is or was a Common-Law Employee during all or any portion of that
period.
 
(g)   “Company” shall mean Trinity3 Corporation, a Delaware corporation.
 
(h)   “Employee” shall mean (i) any individual who is a Common - Law Employee of
the Company or of a Subsidiary, (ii) a member of the Board of Directors,
including (without limitation) an Outside Director, or an affiliate of a member
of the Board of Directors, (iii) a member of the board of directors of a
Subsidiary, or (iv) an independent contractor who performs services for the
Company or a Subsidiary. Service as a member of the Board of Directors, a member
of the board of directors of a Subsidiary or an independent contractor shall be
considered employment for all purposes of the Plan except the second sentence of
Section 4(a).
 
(i)   “Exchange Act” means the Securities and Exchange Act of 1934, as amended.
 
(j)   “Exercise Price” shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
 
(k)   “Fair Market Value” means the market price of Shares, determined by the
Committee as follows:
 
(i)    If the Shares were traded over-the-counter on the date in question but
were not traded on the Nasdaq Stock Market or the Nasdaq National Market System,
then the Fair Market Value shall be equal to the last trade price or the closing
bid price for the stock as quoted on such date;
 
(ii)    If the Shares were traded over-the-counter on the date in question and
were traded on the Nasdaq Stock Market or the Nasdaq National Market System,
then the Fair Market Value shall be equal to the last-transaction price quoted
for such date by the Nasdaq Stock Market or the Nasdaq National Market;
 
(iii)    If the Shares were traded on a stock exchange on the date in question,
then the Fair Market Value shall be equal to the closing price reported by the
applicable composite transactions report for such date; and
 
(iv)    If none of the foregoing provisions is applicable, then the Fair Market
Value shall be determined by the Committee in good faith on such basis as it
deems appropriate.
 

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In all cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.
 
(l)   “Incentive Stock Option” or “ISO” shall mean an employee incentive stock
option described in Code section 422(b).
 
(m)   “Nonstatutory Option” or “NSO” shall mean an employee stock option that is
not an ISO.
 
(n)   “Offeree” shall mean an individual to whom the Committee has offered the
right to acquire Shares under the Plan (other than upon exercise of an Option).
 
(o)   “Option” shall mean an Incentive Stock Option or Nonstatutory Option
granted under the Plan and entitling the holder to purchase Shares.
(p)   “Optionee” shall mean an individual or estate who holds an Option.
 
(q)   “Outside Director” shall mean a member of the Board who is not a Common -
Law Employee of the Company or a Subsidiary.
 
(r)   “Participant” shall mean an individual or estate who holds an Award.
 
(s)   “Plan” shall mean this 2004 Omnibus Securities and Stock Option Plan of
Trinity3 Corporation.
 
(t)   “Plan Year” shall mean any twelve (12) month period (or shorter period
during the final year of this Plan) commencing June 1 during the term of this
Plan.
 
(u)   “Purchase Price” shall mean the consideration for which one Share may be
acquired under the Plan (other than upon exercise of an Option), as specified by
the Committee.
 
(v)   “Restricted Share” shall mean a Share sold or granted to an eligible
Employee which is nontransferable and subject to substantial risk of forfeiture
until restrictions lapse.
 
(w)   “Service” shall mean service as an Employee.
 
(x)   “Share” shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).
 
(y)   “Stock” shall mean the common stock of the Company.
 
(z)   “Stock Award Agreement” shall mean the agreement between the Company and
the recipient of a Restricted Share which contains the terms, conditions and
restrictions pertaining to such Restricted Share.
 
(aa)   “Stock Option Agreement” shall mean the agreement between the Company and
an Optionee which contains the terms, conditions and restrictions pertaining to
his or her Option.
 

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(bb)   “Stock Purchase Agreement” shall mean the agreement between the Company
and an Offeree who acquires Shares under the Plan which contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.
 
(cc)   “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 such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
 
(dd)   “Total and Permanent Disability” means that the Optionee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment.
 
(ee)   “W-2 Payroll” means whatever mechanism or procedure that the Company or a
Subsidiary utilizes to pay any individual which results in the issuance of Form
W-2 to the individual. “W-2 Payroll” does not include any mechanism or procedure
which results in the issuance of any form other than a Form W-2 to an
individual, including, but not limited to, any Form 1099 which may be issued to
an independent contractor, an agency employee or a consultant. Whether a
mechanism or procedure qualifies as a “W-2 Payroll” shall be determined in the
absolute discretion of the Company (or Subsidiary, as applicable), and the
Company or Subsidiary determination shall be conclusive and binding on all
persons.
 
SECTION 3. ADMINISTRATION.
 
(a)   Committee Membership. The Plan shall be administered by the Compensation
Committee (the “Committee”) appointed by the Company’s Board of Directors and
comprised of at least two or more Directors (although Committee functions may be
delegated to officers to the extent the awards relate to persons who are not
subject to the reporting requirements of Section 16 of the Exchange Act). If no
Committee has been appointed, the entire Board shall constitute the Committee.
 
(b)   Committee Procedures. The Board of Directors shall designate one of the
members of the Committee as chairperson. The Committee may hold meetings at such
times and places as it shall determine. The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.
 
(c)   Committee Responsibilities. The Committee has and may exercise such power
and authority as may be necessary or appropriate for the Committee to carry out
its functions as described in the Plan. The Committee has authority in its
discretion to determine eligible Employees to whom, and the time or times at
which, Awards may be granted and the number of Shares subject to each Award.
Subject to the express provisions of the respective Award agreements (which need
not be identical) and to make all other determinations necessary or advisable
for Plan administration, the Committee has authority to prescribe, amend, and
rescind rules and regulations relating to the Plan. All interpretations,
determinations, and actions by the Committee will be final, conclusive, and
binding upon all persons.
 

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(d)   Committee Liability. No member of the Board or the Committee will be
liable for any action or determination made in good faith by the Committee with
respect to the Plan or any Award made under the Plan.
 
(e)   Financial Reports. To the extent required by applicable law, and not less
often than annually, the Company shall furnish to Offerees, Optionees and
Shareholders who have received Stock under the Plan its financial statements
including a balance sheet regarding the Company’s financial condition and
results of operations, unless such Offerees, Optionees or Shareholders have
duties with the Company that assure them access to equivalent information. Such
financial statements need not be audited.
 
SECTION 4. ELIGIBILITY.
 
(a)   General Rule. Only Employees shall be eligible for designation as
Participants by the Committee. In addition, only individuals who are employed as
Common - Law Employees by the Company or a Subsidiary shall be eligible for the
grant of ISOs.
 
(b)   Ten-Percent Shareholders. An Employee who owns more than ten percent (10%)
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for designation as an
Offeree or Optionee unless (i) the Exercise Price for an ISO (and a NSO to the
extent required by applicable law) is at least one hundred ten percent (110%) of
the Fair Market Value of a Share on the date of grant, (ii) if required by
applicable law, the Purchase Price of Shares is at least one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant, and (iii) in
the case of an ISO, such ISO by its terms is not exercisable after the
expiration of ten years from the date of grant.
 
(c)   Attribution Rules. For purposes of Subsection (b) above, in determining
stock ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for his brothers, sisters, spouse, ancestors and lineal
descendants. Stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately by or
for its shareholders, partners or beneficiaries. Stock with respect to which
such Employee holds an Option shall not be counted.
 
(d)   Outstanding Stock. For purposes of Subsection (b) above, “outstanding
stock” shall include all stock actually issued and outstanding immediately after
the grant. “Outstanding Stock” shall not include shares authorized for issuance
under outstanding Options held by the Employee or by any other person.
 
SECTION 5. STOCK SUBJECT TO PLAN.
 
(a)   Basic Limitation. Shares offered under the Plan shall be authorized but
unissued Shares. Subject to Sections 5(b) and 9 of the Plan, the aggregate
number of Shares which may be issued or transferred as common stock pursuant to
an Award under the Plan shall not exceed two million (2,000,000) shares of
Authorized Common Stock of the Company:
 

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In any event, the number of Shares which are subject to Awards or other rights
outstanding at any time under the Plan shall not exceed the number of Shares
which then remain available for issuance under the Plan. The Company, during the
term of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.

(b)   Additional Shares. In the event that any outstanding Option or other right
for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. If a Restricted Share is forfeited
before any dividends have been paid with respect to such Restricted Share, then
such Restricted Share shall again become available for award under the Plan.
 
SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.
 
(a)   Stock Purchase Agreement. Each award or sale of Shares under the Plan
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the Offeree and the Company. Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.
 
(b)   Duration of Offers. Any right to acquire Shares under the Plan (other than
an Option) shall automatically expire if not exercised by the Offeree within
thirty (30) days after the grant if such right was communicated to the Offeree
by the Committee.
 
(c)   Purchase Price. Unless otherwise permitted by applicable law, the Purchase
Price of Shares to be offered under the Plan shall not be less than eighty-five
percent (85%) of the Fair Market Value of a Share on the date of grant (100% for
10% shareholders), except as otherwise provided in Section 4(b). Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee in
its sole discretion. The Purchase Price shall be payable in a form described in
Subsection (d) below.
 
(d)   Payment for Shares. The entire Purchase Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided below:
 
(i)   Surrender of Stock. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or Optionee’s representative for any time period specified
by the Committee and which are surrendered to the Company in good form for
transfer. Such shares shall be valued at their Fair Market Value on the date
when the new Shares are purchased under the Plan.
 
(ii)   Promissory Notes. To the extent that a Stock Option Agreement or Stock
Purchase Agreement so provides, and as permitted by applicable law, payment may
be made all or in part with a full recourse promissory note executed by the
Optionee or Offeree. The interest rate and other terms and conditions of such
note shall be determined by the Committee. The Committee may require that the
Optionee or Offeree pledge his or her Shares to the Company for the purpose of
securing the payment of such note. In no event shall the stock certificate(s)
representing such Shares be released to the Optionee or Offeree until such note
is paid in full.
 

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(iii)   Cashless Exercise. To the extent that a Stock Option Agreement so
provides and a public market for the Shares exists, payment may be made all or
in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price.
 
(iv)   Other Forms of Payment. To the extent provided in the Stock Option
Agreement, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
 
(e)   Exercise of Awards on Termination of Service. Each Stock Award Agreement
shall set forth the extent to which the recipient shall have the right to
exercise the Award following termination of the recipient’s Service with the
Company and its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all the Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment.
 
SECTION 7. ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED SHARES.

(a)   Form and Amount of Award. Each Stock Award Agreement shall specify the
number of Shares that are subject to the Award. Restricted Shares may be awarded
in combination with NSOs and such an Award may provide that the Restricted
Shares will be forfeited in the event that the related NSOs are exercised.

(b)   Exercisability. Each Stock Award Agreement shall specify the conditions
upon which Restricted Shares shall become vested, in full or in installments. To
the extent required by applicable law, each Stock Award shall become exercisable
no less rapidly than the rate of 20% per year for each of the first five years
from the date of grant. Subject to the preceding sentence, the exercisability of
any Stock Award shall be determined by the Committee in its sole discretion.
 
(c)   Effect of Change in Control. The Committee may determine at the time of
making an Award or thereafter, that such Award shall become fully vested, in
whole or in part, in the event that a Change in Control occurs with respect to
the Company.
 
(d)   Voting Rights. Holders of Restricted Shares awarded under the Plan shall
have the same voting, dividend and other rights as the Company’s other
stockholders. A Stock Award Agreement, however, may require that the holders
invested any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid. Such
additional Restricted Shares shall not reduce the number of Shares available
under Section 5.
 

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SECTION 8. TERMS AND CONDITIONS OF OPTIONS.
 
(a)   Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.
 
(b)   Number of Shares. Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.
(c)   Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant, except as
otherwise provided in Section 4(b). Except as otherwise provided in Section
4(b), the Exercise Price of a Nonstatutory Option is not subject to any minimum
price and the exercise price does not have to be determined based on the Fair
Market Value of a Share. Subject to the preceding two sentences, the Exercise
Price under any Option shall be determined by the Committee in its sole
discretion. The Exercise Price shall be payable in a form described in
Subsection (h) below.
 
(d)   Exercisability. Each Stock Option Agreement shall specify the date when
all or any installment of the Option is to become exercisable. To the extent
required by applicable law, an Option shall become exercisable no less rapidly
than the rate of 20% per year for each of the first five years from the date of
grant. Subject to the preceding sentence, the exercisability of any Option shall
be determined by the Committee in its sole discretion.
 
(e)   Effect of Change in Control. The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become fully
exercisable as to all Shares subject to such Option in the event that a Change
in Control occurs with respect to the Company.
 
(f)   Term. The Stock Option Agreement shall specify the term of the Option. The
term shall not exceed ten (10) years from the date of grant. Subject to the
preceding sentence, the Committee at its sole discretion shall determine when an
Option is to expire.
 
(g)   Exercise of Options on Termination of Service. Each Option shall set forth
the extent to which the Optionee shall have the right to exercise the Option
following termination of the Optionee’s Service with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment.
Notwithstanding the foregoing, to the extent required by applicable law, each
Option shall provide that the Optionee shall have the right to exercise the
vested portion of any Option held at termination for at least 60 days following
termination of Service with the Company for any reason, and that the Optionee
shall have the right to exercise the Option for at least six months if the
Optionee’s Service terminates due to death or Disability.
 

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(h)   Payment of Option Shares. The entire Exercise Price of Shares issued under
the Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided below:
 
(i)   Surrender of Stock. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or Optionee’s representative for any time period specified
by the Committee and which are surrendered to the Company in good form for
transfer. Such shares shall be valued at their Fair Market Value on the date
when the new Shares are purchased under the Plan.
 
(ii)   Promissory Notes. To the extent that a Stock Option Agreement or Stock
Purchase Agreement so provides, and to the extent allowable to applicable law,
payment may be made all or in part with a full recourse promissory note executed
by the Optionee or Offeree. The interest rate and other terms and conditions of
such note shall be determined by the Committee. The Committee may require that
the Optionee or Offeree pledge his or her Shares to the Company for the purpose
of securing the payment of such note. In no event shall the stock certificate(s)
representing such Shares be released to the Optionee or Offeree until such note
is paid in full.
 
(iii)   Cashless Exercise. To the extent that a Stock Option Agreement so
provides and a public market for the Shares exists, payment may be made all or
in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price.
 
(iv)   Other Forms of Payment. To the extent provided in the Stock Option
Agreement, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
 
(i)   Modification, Extension and Assumption of Options. Within the limitations
of the Plan, the Committee may modify, extend or assume outstanding Options or
may accept the cancellation of outstanding Options (whether granted by the
Company or another issuer) in return for the grant of new Options for the same
or a different number of Shares and at the same or a different Exercise Price or
for other consideration.
 
SECTION 9. ADJUSTMENT OF SHARES.
 
(a)   General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a combination or consolidation of
the outstanding Stock into a lesser number of Shares, a recapitalization, a
reclassification or a similar occurrence, the Committee shall make appropriate
adjustments, subject to the limitations set forth in Section 9(c), in one or
more of (i) the number of Shares available for future Awards under Section 5,
(ii) the number of Shares covered by each outstanding Option or Purchase
Agreement or (iii) the Exercise Price or Purchase Price under each outstanding
Option or Stock Purchase Agreement.
 

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(b)   Reorganizations. In the event that the Company is a party to a merger or
reorganization, outstanding Options shall be subject to the agreement of merger
or reorganization, provided however, that the limitations set forth in Section
9(c) shall apply.
 
(c)   Reservation of Rights. Except as provided in this Section 9, an Optionee
or an Offeree shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number, Exercise
Price or Purchase Agreement of Shares subject to an Option or Stock Purchase
Agreement. The grant of an Award pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
 
SECTION 10. WITHHOLDING TAXES.
 
(a)   General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Committee for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.
 
(b)   Share Withholding. The Committee may permit a Participant to satisfy all
or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to him or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash. Any payment of taxes by
assigning Shares to the Company may be subject to restrictions, including any
restrictions required by rules of any federal or state regulatory body or other
authority.
 
(c)   Cashless Exercise/Pledge. The Committee may provide that if Company Shares
are publicly traded at the time of exercise, arrangements may be made to meet
the Optionee’s withholding obligation by cashless exercise or pledge.
 
(d)   Other Forms of Payment. The Committee may permit such other means of tax
withholding as it deems appropriate.
 
SECTION 11. ASSIGNMENT OR TRANSFER OF AWARDS.
 
(a)   General. An Award granted under the Plan shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor’s process, whether voluntarily, involuntarily or by operation of law,
except as approved by the Committee. Notwithstanding the foregoing, ISOs may not
be transferable. Also notwithstanding the foregoing, Offerees and Optionees may
not transfer their rights hereunder except by will, beneficiary designation or
the laws of descent and distribution.
 

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(b)   Trusts. Neither this Section 11 nor any other provision of the Plan shall
preclude a Participant from transferring or assigning Restricted Shares to (a)
the trustee of a trust that is revocable by such Participant alone, both at the
time of the transfer or assignment and at all times thereafter prior to such
Participant’s death, or (b) the trustee of any other trust to the extent
approved by the Committee in writing. A transfer or assignment of Restricted
Shares from such trustee to any other person than such Participant shall be
permitted only to the extent approved in advance by the Committee in writing,
and Restricted Shares held by such trustee shall be subject to all the
conditions and restrictions set forth in the Plan and in the applicable Stock
Award Agreement, as if such trustee were a party to such Agreement.
 
SECTION 12. LEGAL REQUIREMENTS.
 
Shares shall not be issued under the Plan unless the issuance and delivery of
such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company’s
securities may then be listed.
 
SECTION 13. NO EMPLOYMENT RIGHTS.
 
No provision of the Plan, nor any right or Option granted under the Plan, shall
be construed to give any person any right to become, to be treated as, or to
remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person’s Service at any time and for any reason.
 
SECTION 14. DURATION AND AMENDMENTS.
 
(a)   Term of the Plan. The Plan, as set forth herein, shall become effective on
the date of its adoption by the Board of Directors, subject to the approval of
the Company’s shareholders. In the event that the shareholders fail to approve
the Plan within twelve (12) months after its adoption by the Board of Directors,
any grants already made shall be null and void, and no additional grants shall
be made after such date. The Plan shall terminate automatically ten (10) years
after its adoption by the Board of Directors and may be terminated on any
earlier date pursuant to Subsection (b) below.
 
(b)   Right to Amend or Terminate the Plan. The Board of Directors may amend the
Plan at any time and from time to time. Rights and obligations under any right
or Option granted before amendment of the Plan shall not be materially altered,
or impaired adversely, by such amendment, except with consent of the person to
whom the right or Option was granted. An amendment of the Plan shall be subject
to the approval of the Company’s shareholders only to the extent required by
applicable laws, regulations or rules including the rules of any applicable
exchange.
 
(c)   Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Shares previously issued or any Option previously
granted under the Plan.

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[END OF PLAN]

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