EXHIBIT 10.1

 

TOGA LIMITED

LONG-TERM INCENTIVE PLAN

 

1.         Purpose of the Plan.

 

This Plan is intended to foster the growth and success of the Company and its
Affiliates by providing a means to attract, motivate and retain key employees,
directors and contractors upon whose judgment, initiative and efforts the
Company depends for the successful conduct of the business through awards of
equity and equity-based interests in the Company.

 

2.         Definitions.

 

The following capitalized terms shall have the meanings attributed to them below
when used in this Plan.

 

Administrator means the Board, any committee thereof or such other delegates as
are administering the Plan in accordance with Section 4.

 

Affiliate means any Subsidiary or other entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
ownership interest as determined by the Administrator.  The Administrator shall,
in its sole discretion, determine which entities are classified as Affiliates
and designated as eligible to participate in this Plan.

 

Applicable Law means all applicable United States federal and state laws, the
requirements under any stock exchange or quotation system on which the Company
has listed or submitted for quotation the Shares 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.

 

Award means a Stock Award, Incentive Stock Option, Nonqualified Stock Option,
Appreciation Right, Stock Unit or Other Stock-Based Award granted in accordance
with the terms of the Plan, or any other property (including cash) granted
pursuant to the provisions of the Plan.

 

Award Agreement means a Stock Award Agreement, Option Agreement, Stock
Appreciation Right Agreement, Stock Unit Agreement or Other Stock-Based Award
Agreement, which shall be in a writing (which shall include written agreements
in electronic format), in such form and with such terms as may be specified by
the Administrator, evidencing the terms and conditions of the individual Award. 
Each Award Agreement is subject to the terms and conditions of the Plan.  The
Award Agreement shall be delivered to the Participant receiving such Award upon,
or as promptly as is reasonably practicable following, the grant of such Award. 
The effectiveness of an Award shall not be subject to the Award Agreement being
signed by the Company or the Participant receiving the Award unless specifically
so provided in the Award Agreement.

 

Awardee means an Employee, Director or Contractor who has been granted an Award
under the Plan.

 

Bankruptcy means (i) the filing of a voluntary petition under any bankruptcy or
insolvency law, or a petition for the appointment of a receiver or the making of
an assignment for the benefit of creditors, with respect to the Holder, or (ii)
the Holder being subjected involuntarily to such a petition or assignment or to
an attachment or other legal or equitable interest with respect to the Holder’s
assets, which involuntary petition or assignment or attachment is not discharged
within 60 days after its date, and (iii) the Holder being subject to a transfer
of its Issued Shares by operation of law, except by reason of death or divorce.

 

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Board means the Board of Directors of the Company.

 

Code means the United States Internal Revenue Code of 1986, as amended.

 

Committee means a committee of Directors appointed by the Board in accordance
with Section 4, if any.  References to the Committee mean the Board if no
Committee is appointed hereunder.

 

Company means Toga Limited, a Nevada corporation, or, except as utilized in the
definition of Sale Event, its successor.

 

Contractor means a person engaged to provide consulting or advisory services
(other than as an Employee or a Director) to the Company or any Affiliate,
provided that the identity of such person, the nature of such services or the
entity to which such services are provided would not preclude the Company from
offering or selling securities to such person pursuant to this Plan in reliance
on either the exemption from registration provided by Rule 701 under the
Securities Act or, if the Company is required to file reports pursuant to
Sections 13 or 15(d) of the Exchange Act, registration on a Form S-8
Registration Statement under the Securities Act.

 

Director means a member of the Board.

 

Disability means (A) permanent and total disability as determined under the
Company’s long-term disability plan applicable to the Participant, or (B) if
there is no such plan applicable to the Participant or the Administrator
determines otherwise in an applicable Award Agreement, “Disability” as
determined by the Administrator.  Notwithstanding the above, with respect to an
Incentive Stock Option, Disability shall mean permanent and total disability as
defined in Section 22(e)(3) of the Code and, with respect to any Award that
constitutes “nonqualified deferred compensation” within the meaning of Section
409A, the foregoing definition shall apply for purposes of vesting of such
Award, provided that such Award shall not be settled until the earliest of:  (i)
the Participant’s “disability” within the meaning of Section 409A, (ii) the
Participant’s “separation from service” within the meaning of Section 409A and
(iii) the date such Award would otherwise be settled pursuant to the terms of
the Award Agreement.

 

Disaffiliation means a Subsidiary’s or Affiliate’s ceasing to be a Subsidiary or
Affiliate for any reason (including, without limitation, as a result of a public
offering, or a spin-off or sale by the Company, of the stock of the Subsidiary
or Affiliate) or a sale of a division of the Company and its Affiliates.

 

Employee means a regular, active employee of the Company or any Affiliate,
including an Officer or Director who is also a regular, active employee of the
Company or any Affiliate.  For any and all purposes under the Plan, the term
“Employee” shall not include a person hired as a leased employee or a person
otherwise designated by the Administrator, the Company or an Affiliate at the
time of hire as not eligible to participate in or receive benefits under the
Plan or not on the payroll, even if such ineligible person is subsequently
determined to be a common law employee of the Company or an Affiliate or
otherwise an employee by any governmental or judicial authority.  Unless
otherwise determined by the Administrator in its sole discretion, for purposes
of the Plan, an Employee shall be considered to have terminated employment and
to have ceased to be an Employee if his or her employer ceases to be an
Affiliate, even if he or she continues to be employed by such employer.

 

Exchange Act means the United States Securities Exchange Act of 1934, as
amended.

 

Fair Market Value means the closing price for a Common Share reported on a
consolidated basis on the exchange or national market system on which Shares are
traded on the date of measurement, or if Shares were not traded on such
measurement date, then on the next preceding date on which Shares were traded,
all as reported by such source as the Administrator may select.  If the Shares
are not listed on a national securities exchange or system, Fair Market Value
shall be determined in good faith by the Administrator in its sole discretion,
taking into account, to the extent appropriate, the requirements of Section 409A
(including, without limitation, the requirement that fair market value be
determined through the reasonable application of a reasonable valuation method).

 

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Grant Date means, with respect to each Award, the date upon which the Award is
granted to an Awardee pursuant to this Plan, which may be a designated future
date as of which such Award will be effective, as determined by the
Administrator.

 

Holder means, with respect to an Award or any Issued Shares, the Awardee of the
Award or Issued Shares and Permitted Transferee of such Award or Issued Shares. 
The term “Holder” shall not include any transferee of Issued Shares who is not a
Permitted Transferee.

 

Incentive Stock Option means an Option that is identified in the Option
Agreement as intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and that so qualifies.

 

Issued Shares means, collectively, all outstanding Shares issued pursuant to the
terms of Awards (including, without limitation, Shares issued to a Holder upon
the exercise of an Option).

 

Non-Employee Director means a Director who is not an Employee of the Company.

 

Nonqualified Stock Option means an Option that is not an Incentive Stock Option.

 

Officer means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.

 

Option means a right granted under Section 8 to purchase a number of Shares or
Stock Units at such exercise price, at such times, and on such other terms and
conditions as are specified in the agreement or other documents evidencing the
Award (the “Option Agreement”).  Both Incentive Stock Options and Nonqualified
Stock Options may be granted under the Plan.

 

Other Stock-Based Award means an Award granted pursuant to Section 12 on such
terms and conditions as are specified in the agreement or other documents
evidencing the Award (the “Other Stock-Based Award Agreement”).

 

Parent means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of the corporations owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

 

Participant means the Awardee or any person (including any estate) to whom an
Award has been assigned or transferred as permitted hereunder.

 

Permitted Transferees means an Awardee’s spouse, former spouse, children,
stepchildren, brothers, sisters, nephews, nieces, grandchildren, parent,
grandparent, mother-in-law, father-in-law, son-in-law or daughter-in-law,
including adoptive relationships (“family members”), a trust in which the
Awardee and the Awardee’s family members have more than 50 percent of the
beneficial interests or any other entity in which the Awardee and Awardee’s
family members own more than 50 percent of the voting interests.  Upon the death
of the Awardee, the term Permitted Transferees shall also include such deceased
Awardee’s estate, executives, administrators, personal representatives, heirs,
legatees and distributees, as the case may be.  The Committee may limit
“Permitted Transferees” to family members (as defined in the General
Instructions to Form S-8 under the Securities Act) of a Participant under an
Award Agreement or otherwise if it deems such a limitation necessary or
appropriate.

 

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Plan means this Toga Limited Long-Term Incentive Plan, as set forth herein and
as it may be amended from time to time.

 

Repurchase Event means (i) a Termination of Service, (ii) the Awardee’s
Bankruptcy, (iii) the consummation of a Sale Event, or (iv) a Restrictive
Covenant Breach.

 

Restrictive Covenant Breach means a breach by the Awardee of an Award of any
written non-competition, non-solicitation, non-disparagement or confidentiality
covenant owing to, or for the benefit of, the Company, determined in each such
case by the Board in its good faith judgment.  The date of a Restrictive
Covenant Breach shall be deemed to be the date upon which the Board first learns
of such Restrictive Covenant Breach.

 

Retirement means voluntary Termination of Employment by an Employee from the
Company and its Affiliates after the Employee has attained age sixty-five (65)
and completed at least five (5) years of service with the Company and its
Affiliates.

 

Sale Event means a “Sale Event” described in Exhibit A.

 

Section 409A means Section 409A of the Code and state and local laws, rules and
regulations with the same or similar purpose.

 

Securities Act means the United States Securities Act of 1933, as amended.

 

Share means a share of Common Stock of the Company, as adjusted in accordance
with Section 15.

 

Stock Appreciation Right means a right to receive, in cash or Shares (as
determined by the Administrator), value equal to or otherwise based on the
excess of:  (i) the Fair Market Value of a specified number of Shares at the
time of exercise over (ii) the aggregate exercise price of the right, as
established by the Administrator on the Grant Date and on such other terms and
conditions as are specified in the agreement or other documents evidencing the
Award (the “Stock Appreciation Right Agreement”).

 

Stock Award means an award or issuance of Shares made under Section 11, the
grant, issuance, retention, vesting or transferability of which is subject
during specified periods of time to such conditions (including, without
limitation, continued employment or performance conditions) and terms as are
expressed in the agreement or other documents evidencing the Award (the “Stock
Award Agreement”).

 

Stock Unit means a bookkeeping entry representing an amount equivalent to the
Fair Market Value of one Share, payable in cash, property or Shares.  Stock
Units represent an unfunded and unsecured obligation of the Company, except as
otherwise provided for by the Administrator.

 

Stock Unit Award means an award or issuance of Stock Units made under Section
12, the grant, issuance, retention, vesting and/or transferability of which is
subject during specified periods of time to such conditions (including, without
limitation, continued employment or performance conditions) and terms as are
expressed in the agreement or other documents evidencing the Award (the “Stock
Unit Award Agreement”).

 

Subsidiary means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, provided each company in the
unbroken chain (other than the Company) owns, at the time of determination,
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.

 

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Termination for Cause means, unless otherwise provided in an Award Agreement,
Termination of Employment, termination of status as Non-Employee Director or
termination of status as Contractor on account of any act of fraud or
intentional misrepresentation or embezzlement, misappropriation or conversion of
assets of the Company or any Affiliate, material violation of state or federal
securities laws, or the intentional and repeated violation of the written
policies, procedures or rules of the Company or, if applicable, violation of the
policies, procedures or rules governing Contractor conduct, provided that, for
an Employee who is party to an individual severance or employment agreement
defining Cause, “Cause” shall have the meaning set forth in such agreement
except as may be otherwise provided in such agreement.  For purposes of this
Plan, a Participant’s Termination of Employment shall be deemed to be a
Termination for Cause if, after the Participant’s employment has terminated,
facts and circumstances are discovered that would have justified, in the opinion
of the Administrator, a Termination for Cause.

 

Termination of Employment means, for purposes of this Plan, unless otherwise
determined by the Administrator, ceasing to be an Employee.  Unless otherwise
determined by the Administrator, if a Participant’s employment with, or
membership on, a board of directors (or similar governing body) of the Company
and its Affiliates terminates but such Participant continues to provide services
to the Company and its Affiliates in a Non-Employee Director capacity or as a
Contractor or an Employee, as applicable, such change in status shall not be
deemed a Termination of Employment.  A Participant employed by, or performing
services for, a Subsidiary or an Affiliate or a division of the Company and its
Affiliates shall be deemed to incur a Termination of Employment if, as a result
of a Disaffiliation, such Subsidiary, Affiliate, or division ceases to be a
Subsidiary, Affiliate or division, as the case may be, and the Participant does
not immediately thereafter become an Employee of (or service provider for), or
member of the board of directors (or similar governing body) of, the Company or
another Subsidiary or Affiliate.  Temporary absences from employment because of
illness, vacation or leave of absence and transfers among the Company and its
Subsidiaries and Affiliates shall not be considered Terminations of Employment. 
In addition, Termination of Employment shall mean a “separation from service”
under Section 409A whenever necessary to ensure compliance therewith for any
payment or settlement of a benefit conferred under this Plan that is subject to
Section 409A, and, for such purposes, shall be determined based upon a reduction
in the bona fide level of services performed to a level equal to twenty percent
(20%) or less of the average level of services performed by the Employee during
the immediately preceding 36-month period.  The Administrator or its delegate,
in its sole discretion, may determine whether a Company transaction, such as a
sale or spinoff of a division or subsidiary that employs a Participant, shall be
deemed to result in a Termination of Employment for purposes of affected Awards,
and such decision shall be final, conclusive and binding.

 

3.         Stock Subject to the Plan.

 

(a)        Aggregate Limit. Subject to the provisions of Section 15(a) of the
Plan, the maximum aggregate number of Shares which may be subject to or
delivered under Awards granted under the Plan is
ten million (10,000,000) Shares. The Shares issued under the Plan may be either
Shares reacquired by the Company, including Shares purchased in the open market,
or authorized but unissued Shares.  In no event will the Shares that are subject
to or delivered under Awards granted under the Plan exceed the number of Shares
authorized under the Company’s Articles of Incorporation, as amended from time
to time.

 

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(b)        Code Section 422 Limits; Other Share Limitations. Subject to Section
15(a), the aggregate number of Shares subject to Awards granted under this Plan
during any fiscal year to any one Employee shall not exceed
forty thousand (40,000) Shares, or if an Award is settled in cash, the maximum
amount of cash award allocable to any one Employee during a single fiscal year
shall not exceed the then-current Fair Market Value of such Shares.  Subject to
the provisions of Section 15(a) of the Plan, the aggregate number of Shares that
may be issued under the Plan through Incentive Stock Options shall not exceed
one hundred percent (100%) of the maximum aggregate number of Shares that may be
subject to or delivered under Awards granted under the Plan, as the same may be
amended from time to time under the terms of the Plan.

 

(c)        Limit on Awards to Non-Employee Directors.  Notwithstanding any other
provision of the Plan to the contrary, the aggregate Grant Date Fair Market
Value (computed as of the date of grant in accordance with applicable financial
accounting rules) of all Awards granted to any Non-Employee Director during any
single calendar year shall not exceed
two thousand (2,000) Shares, or if an Award is settled in cash, the maximum
amount of cash award allocable to any one Non-Employee Director during a single
fiscal year shall not exceed the then-current Fair Market Value of such number
of Shares. 

 

(d)        Share Counting Rules.

 

(i)             For purposes of this Section 3, Shares subject to Awards that
have been canceled, expired, or not issued or forfeited for any reason (in whole
or in part) shall not reduce the aggregate number of Shares which may be subject
to or delivered under Awards granted under this Plan and shall be available for
future Awards granted under this Plan.  Notwithstanding the foregoing, Shares
added back under the provisions of this subsection (d) shall not be counted when
determining the limit on Shares that may be granted as Incentive Stock Options
under subsection (b), above.

 

(ii)        Shares subject to Awards that have been retained by the Company in
payment or satisfaction of the purchase price of an Award, and Shares that have
been delivered (either actually or constructively by attestation) to the Company
in payment or satisfaction of the purchase price of an Award, shall be available
for grant under the Plan on a one-for-one basis. 

 

4.         Administration of the Plan.

 

(a)        Procedure.

 

(i)             Administrative Bodies. The Plan shall be administered by the
Board, any Committee designated by the Board to so administer this Plan and
their respective delegates. For purposes of Awards to non-employee directors,
“Committee” shall mean the full Board.  If the Company has a class of securities
that is registered under Section 12 of the Exchange Act, the Committee shall be
comprised of two or more directors of the Company, each of whom shall qualify as
a “non-employee director” under Rule 16b-3 promulgated by the Securities
Exchange Commission under the Exchange Act.

 

(ii)            Awards to Directors.  The Board shall have the power and
authority to grant Awards to Non-employee Directors, including the authority to
determine the number and type of awards to be granted; determine the terms and
conditions, not inconsistent with the terms of this Plan, of any award; and to
take any other actions the Board considers appropriate in connection with the
administration of the Plan.

 

(iii)       Delegation of Authority for the Day-to-Day Administration of the
Plan.  Except to the extent prohibited by Applicable Law (including restrictions
on delegation of authority relative to awards to “insiders” under Section 16 of
the Exchange Act), the Administrator may delegate to one or more individuals the
day-to-day administration of the Plan and any of the functions assigned to it in
this Plan.  Such delegation may be revoked at any time.

 

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(b)        Powers of the Administrator. Subject to the provisions of the Plan
and, in the case of a Committee or delegates acting as the Administrator,
subject to the specific duties delegated to such Committee or delegates, the
Administrator shall have the authority, in its discretion:

 

(i)         to select the Contractors, Non-Employee Directors and Employees of
the Company or its Affiliates to whom Awards are to be granted hereunder;

 

(ii)        to determine the number of Shares to be covered by each Award
granted hereunder;

 

(iii)       to determine the type of Award to be granted to the selected
Contractors, Employees and Non-Employee Directors;

 

(iv)       to determine the Fair Market Value of Shares;

 

(v)        to approve forms of Award Agreements;

 

(vi)       to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder.  Such terms and conditions
include, but are not limited to, the exercise price, the purchase price, 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 or exercisability
provisions, terms regarding acceleration of Awards or waiver of forfeiture
restrictions, the acceptable forms of consideration for payment for an Award,
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;

 

(vii)      to correct administrative errors;

 

(viii)     to construe and interpret the terms of the Plan (including sub-plans
and Plan addenda), Awards granted pursuant to the Plan, administrative forms,
policies and procedures and any other extrinsic documents relating to the Plan;

 

(ix)       to adopt forms, rules, policies and procedures relating to the
operation and administration of the Plan;

 

(x)        to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans and Plan addenda;

 

(xi)       to modify or amend each Award, including, but not limited to, the
acceleration of vesting or exercisability; provided, however, that any such
modification or amendment:  (A) is subject to the plan amendment provisions set
forth in Section 16, and (B) may not materially impair any outstanding Award
unless agreed to in writing by the Participant, except that such agreement shall
not be required if the Administrator determines in its sole discretion that such
modification or amendment either:  (Y) is required or advisable for the Company,
the Plan or the Award to satisfy any Applicable Law or to meet the requirements
of any accounting standard, or (Z) is not reasonably likely to significantly
diminish the benefits provided under such Award, or that adequate compensation
has been provided for any such diminishment, except following a Sale Event;

 

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(xii)      to allow or require Participants to satisfy withholding tax amounts
by electing to have the Company withhold from the Shares to be issued upon
exercise of a Nonqualified Stock Option or vesting of a Stock Award that number
of Shares having a Fair Market Value equal to the amount required to be
withheld.  The Fair Market Value of the Shares to be withheld shall be
determined in such manner and on such date that the Administrator shall
determine or, in the absence of provision otherwise, on the date that the amount
of tax to be withheld is to be determined.  All elections by a Participant to
have Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may provide;

 

(xiii)     to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the
Administrator;

 

(xiv)     to impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any vesting or resale by a
Participant or of other subsequent transfers by the Participant of any Shares
issued as a result of or under an Award or upon the vesting or exercise of an
Award, including, without limitation, (A) restrictions under an insider trading
policy, (B) restrictions as to the use of a specified brokerage firm for such
resale or other transfers, and (C) institution of “blackout” periods on
exercises of Awards;

 

(xv)      to provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right, either in tandem
with the other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of Shares, cash
or a combination thereof, the amount of which is determined by reference to the
value of the Award;

 

(xvi)     to adopt such procedures or sub-programs as are necessary or
appropriate for participation in the Plan by Employees or Directors who are
foreign nationals or employed outside of the United States; and

 

(xvii)    to make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted hereunder.

 

(c)            Sale Event.  The following provisions shall apply to Awards in
connection with a Sale Event unless otherwise provided in the instrument
evidencing the Award or any other written agreement between the Company or any
Affiliate and the Awardee or unless otherwise expressly provided by the
Committee at the time of grant of an Award.  Except as otherwise stated in the
Award Agreement, in the event of a Sale Event, then, notwithstanding any other
provision of the Plan, the Committee may take one or more of the following
actions with respect to Awards, contingent upon the closing or completion of the
Sale Event:

 

(i)             arrange for the surviving corporation or acquiring corporation
(or the surviving or acquiring corporation’s parent company) to assume or
continue the Award or to substitute a similar stock award for the Award
(including, but not limited to, an award to acquire the same consideration paid
to the stockholders of the Company pursuant to the Sale Event);

 

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(ii)            arrange for the assignment of any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to the
Award to the surviving corporation or acquiring corporation (or the surviving or
acquiring corporation’s parent company);

 

(iii)           accelerate the vesting, in whole or in part, of the Award (and,
if applicable, the time at which the Award may be exercised) to a date prior to
the effective time of such Sale Event as the Committee shall determine (or, if
the Committee shall not determine such a date, to the date that is five (5) days
prior to the effective date of the Sale Event), with such Award terminating if
not exercised (if applicable) at or prior to the effective time of the Sale
Event;

 

(iv)           arrange for the lapse of any reacquisition or repurchase rights
held by the Company with respect to the Award;

 

(v)            cancel or arrange for the cancellation of the Award, to the
extent not vested or not exercised prior to the effective time of the Sale
Event, in exchange for such cash consideration, if any, as the Committee, in its
sole discretion, may consider appropriate; and

 

(vi)           make a payment, in such form as may be determined by the
Committee equal to the excess, if any, of (A) the value of the property the
holder of the Award would have received upon the exercise of the Award, over (B)
any exercise price payable by such holder in connection with such exercise.

 

The Board need not take the same action with respect to all Awards or with
respect to all Awardees.

 

(d)        Effect of Administrator’s Decision. All questions arising under the
Plan or under any Award shall be decided by the Administrator in its total and
absolute discretion.  All decisions, determinations and interpretations by the
Administrator regarding the Plan, any rules and regulations under the Plan and
the terms and conditions of any Award granted hereunder, shall be final and
binding on all Participants.  The Administrator shall consider such factors as
it deems relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations, including, without limitation,
the recommendations or advice of any officer or other employee of the Company
and such attorneys, accountants and consultants as it may select.

 

(e)        Indemnity.  To the extent allowable under Applicable Law, each member
of the Committee or of the Board and any person to whom the Board or Committee
has delegated any of its authority under the Plan shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act pursuant to the Plan, and against and from any and all amounts paid by
him or her in satisfaction of judgment in such action, suit, or proceeding
against him or her; provided he or she gives the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled pursuant to the Company’s Articles of Incorporation,
by-laws or regulations, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.

 

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5.         Eligibility.

 

Awards may be granted only to Employees, Directors and Contractors of the
Company or any of its Affiliates; provided, however, that Incentive Stock
Options may be granted only to Employees of the Company and its Subsidiaries
(within the meaning of Section 424(f) of the Code).

 

6.         Term of Plan.

 

The Plan shall become effective upon its approval by shareholders of the Company
(the “Effective Date”).  It shall continue in effect for a term of ten (10)
years from the date the Plan is approved by the shareholders of the Company
unless terminated earlier under Section 17 of the Plan. 

 

7.         Term of Award.

 

Subject to the provisions of the Plan, the term of each Award shall be
determined by the Administrator and stated in the Award Agreement, and may
extend beyond the termination of the Plan.  In the case of an Option or a Stock
Appreciation Right, the term shall be ten (10) years from the Grant Date or such
shorter term as may be provided in the Award Agreement. However, in the case of
an Incentive Stock Option granted to an individual who, immediately before the
Incentive Stock Option is granted, owns (or is treated as owning) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, the term shall be five (5) years from the Grant Date or
such shorter term as may be provided in the Award Agreement.

 

8.         Options.

 

The Administrator may grant an Option or provide for the grant of an Option,
either from time to time in the discretion of the Administrator or automatically
upon the occurrence of specified events, including, without limitation, the
achievement of performance goals or the satisfaction of an event or condition
within the control of the Awardee or within the control of others.

 

(a)        Option Agreement.  Each Option Agreement shall contain provisions
regarding (i) the number of Shares that may be issued upon exercise of the
Option, (ii) the type of Option, (iii) the exercise price of the Option and the
means of payment of such exercise price, (iv) the term of the Option, (v) such
terms and conditions regarding the vesting or exercisability of an Option as may
be determined from time to time by the Administrator, (vi) restrictions on the
transfer of the Option and forfeiture provisions, and (vii) such further terms
and conditions, in each case not inconsistent with this Plan, as may be
determined from time to time by the Administrator.

 

(b)        Exercise Price. The per Share exercise price for the Shares to be
issued upon exercise of an Option shall be determined by the Administrator,
except that the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the Grant Date, and the per Share exercise price for
the Shares to be issued upon exercise of an Incentive Stock Option shall be no
less than 110% of the Fair Market Value per Share on the Grant Date if the
Incentive Stock Option is granted to a 10% Owner.

 

(c)        No Option Repricing.  Subject to Section 15, the exercise price of an
Option may not be reduced without shareholder approval, nor may outstanding
Options be cancelled in exchange for cash, other Awards or Options with an
exercise price that is less than the exercise price of the original Option,
without shareholder approval.

 

  10

 

 

(d)        No Reload Grants.  Options shall not be granted under the Plan in
consideration for, and shall not be conditioned upon the delivery of Shares to
the Company in payment of, the exercise price, a tax withholding obligation or
both, under any other employee stock option.

 

(e)        Vesting Period and Exercise Dates.  Options granted under this Plan
shall vest or be exercisable at such time and in such installments during the
period prior to the expiration of the Option’s term as determined by the
Administrator and as specified in the Option Agreement.  In the absence of any
specific language in the Option Agreement regarding vesting, each Option will
vest as follows:   20% of the Option will vest on the first anniversary of the
Grant Date, an additional 40% vesting on the second anniversary of the Grant
Date, and the final 40% vesting on the third anniversary of the Grant Date;
thereby rendering the Options 100% vested three years after the Grant Date.  The
Administrator shall have the right to make the timing of the ability to exercise
any Option granted under this Plan subject to continued active employment, the
passage of time or such performance requirements as deemed appropriate by the
Administrator.  At any time after the grant of an Option, the Administrator may
reduce or eliminate any restrictions surrounding any Participant’s right to
exercise all or part of the Option.

 

(f)        Form of Consideration.  The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment, either through the terms of the Option Agreement or at the time of
exercise of an Option.  Acceptable forms of consideration may include:

 

(i)         cash;

 

(ii)        certified or bank cashier’s check or wire transfer (denominated in
U.S. Dollars);

 

(iii)       subject to any conditions or limitations established by the
Administrator, other Shares which have a Fair Market Value on the date of
surrender equal to or greater than the aggregate exercise price of the Shares as
to which said Option shall be exercised (it being agreed that the excess of the
Fair Market Value over the aggregate exercise price shall be refunded to the
Awardee in cash);

 

(iv)       subject to any conditions or limitations established by the
Administrator, the Company withholding Shares otherwise issuable upon exercise
of an Option;

 

(v)        consideration received by the Company under a broker-assisted sale
and remittance program acceptable to the Administrator and in compliance with
Applicable Law;

 

(vi)       such other consideration and method of payment for the issuance of
Shares deemed appropriate by the Administrator to the extent permitted by
Applicable Law; or

 

(vii)      any combination of the foregoing methods of payment.

 

Notwithstanding the foregoing and the terms of any Award Agreement to the
contrary, during any period for which Shares are publicly traded, an exercise
that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Company in violation of Section
402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any
Award under this Plan.

 

  11

 

 

(g)      Procedure for Exercise; Rights as a Shareholder.

 

(i)         Any Option granted hereunder shall be exercisable according to the
terms of the Plan and at such times and under such conditions as determined by
the Administrator and set forth in the applicable Option Agreement.

 

(ii)        An Option shall be deemed exercised when (A) the Company receives
(1) written or electronic notice of exercise (in accordance with the Option
Agreement or procedures established by the Administrator) from the person
entitled to exercise the Option and (2) full payment for the Shares with respect
to which the related Option is exercised, and (B) with respect to Nonqualified
Stock Options, provisions acceptable to the Administrator have been made for
payment of all applicable withholding taxes.

 

(iii)       Unless provided otherwise by the Administrator or pursuant to this
Plan, until the Shares are issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Shares subject to an Option, notwithstanding the
exercise of the Option.

 

(iv)       The Company shall issue (or cause to be issued) such Shares as soon
as administratively practicable after the Option is exercised.  Such Shares may
be issued in the form of a certificate, by book entry, or otherwise, in the
Company’s sole discretion.  An Option may not be exercised for a fraction of a
Share.

 

(h)        Termination of Employment, Non-Employee Director Status or Contractor
Status. The Administrator shall determine as of the Grant Date (but subject to
modification subsequent to the Grant Date) the effect a Termination of
Employment, termination from membership on the Board by a Non-Employee Director
or cessation of status as a Contractor shall have on any Option.  Unless
otherwise provided in the Award Agreement:

 

(i)         Termination of Employment, Non-Employee Director Status or
Contractor Status without Cause. If a Participant experiences, by reason other
than Termination for Cause, a Termination of Employment, a termination of his or
her status as a Non-Employee Director or a termination of his or her status as a
Contractor then (i) to the extent an Option held by such Participant is vested
and (ii) only to the extent such Option is exercisable under the terms of the
Award Agreement, such Option may thereafter be exercised by the Participant, the
legal representative of the Participant’s estate, the legatee of the Participant
under the will of the Participant, or the distribute of the Participant’s
estate, whichever is applicable until the expiration of the stated term of such
Option (other than in the case of Incentive Stock Options, wherein the period
shall not exceed one year).

 

(ii)        Termination for Cause.  If a Participant experiences a Termination
for Cause, any and all outstanding Options (whether vested or unvested) granted
to such Participant shall immediately lapse and be of no force or effect.

 

  12

 

 

(i)         Restrictions on Shares Subject to Stock Options.  Shares issued upon
the exercise of any Option may be made subject to such disposition,
transferability or other restrictions or conditions as the Administrator may
determine, in its discretion, and as shall be set forth in the applicable Option
Agreement.

 

9.         Incentive Stock Option Terms and Limitations.

 

(a)        Eligibility.  Only Employees of the Company or its Subsidiaries may
be granted Incentive Stock Options.

 

(b)        $100,000 Limitation. Notwithstanding the designation “Incentive Stock
Option” in an Option Agreement, if and to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Awardee during any calendar year (under
all plans of the Company and any of its Subsidiaries) exceeds U.S. $100,000,
such Options shall be treated as Nonqualified Stock Options.  For purposes of
this Section 9(b), Incentive Stock Options shall be taken into account in the
order in which they were granted.  The Fair Market Value of the Shares shall be
determined as of the Grant Date.

 

(c)        Transferability. The Option Agreement must provide that an Incentive
Stock Option is not transferable by the Awardee otherwise than by will or the
laws of descent and distribution, and, during the lifetime of such Awardee, must
not be exercisable by any other person.  If the terms of an Incentive Stock
Option are amended to permit transferability, the Option will be treated for tax
purposes as a Nonqualified Stock Option.

 

(d)        Exercise Price. The per Share exercise price of an Incentive Stock
Option shall in no event be inconsistent with the requirements for qualification
of the Incentive Stock Option under Section 422 of the Code.

 

(e)        Other Terms. Option Agreements evidencing Incentive Stock Options
shall contain such other terms and conditions as may be necessary to qualify, to
the extent determined desirable by the Administrator, with the applicable
provisions of Section 422 of the Code.  If any such terms and conditions, as of
the Grant Date or any later date, do not so comply, the Option will be treated
thereafter for tax purposes as a Nonqualified Stock Option.

 

10.      Stock Appreciation Rights.

 

Stock Appreciation Rights may be granted to Awardees either alone
(“freestanding”) or in addition to or in tandem with other Awards granted under
the Plan and may, but need not, relate to a specific Option granted under
Section 8.  Any Stock Appreciation Right granted in tandem with an Option may be
granted at the same time such Option is granted or at any time thereafter before
exercise or expiration of such Option, and shall be based on the Fair Market
Value of one Share on the Grant Date or, if applicable, on the Grant Date of the
Option with respect to a Stock Appreciation Right granted in exchange for or in
tandem with, but subsequent to, the Option (subject to the requirements of
Section 409A).  All Stock Appreciation Rights shall be granted subject to the
same terms and conditions applicable to Options as set forth in Section 8.  The
Administrator may impose such other conditions or restrictions on any Stock
Appreciation Right as it shall deem appropriate.

 

  13

 

 

11.      Stock Awards.

 

(a)        Stock Award Agreement.  Each Stock Award Agreement shall contain
provisions regarding:  (i) the number of Shares subject to such Stock Award or a
formula for determining such number, (ii) the purchase price of the Shares, if
any, and the means of payment for the Shares, (iii) the performance criteria, if
any, and level of achievement versus these criteria that shall determine the
number of Shares granted, issued, retainable or vested, (iv) such terms and
conditions on the grant, issuance, vesting or forfeiture of the Shares as may be
determined from time to time by the Administrator, (v) restrictions on the
transferability of the Stock Award, (vi) whether the Shares shall, after
vesting, be further restricted as to transferability or be subject to repurchase
by the Company or forfeiture upon the occurrence of certain events determined by
the Administrator, in its sole discretion, and (vii) such further terms and
conditions, in each case not inconsistent with this Plan, as may be determined
from time to time by the Administrator.  The Administrator may, in its sole
discretion, waive the vesting restrictions and any other conditions set forth in
any Award Agreement under such terms and conditions as the Administrator shall
deem appropriate.

 

(b)        Form of Consideration.  The Administrator shall determine the
acceptable method of payment of the purchase price for a Stock Award, if any,
either through the terms of the Stock Award Agreement or at the time of
purchase.  Acceptable forms of payment may include:

 

(i)         cash;

 

(ii)        certified or bank cashier’s check or wire transfer (denominated in
U.S. Dollars);

 

(iii)       subject to any conditions or limitations established by the
Administrator, the delivery of other unrestricted Shares which have a Fair
Market Value on the date of surrender equal to or greater than the aggregate
purchase price of the Shares being purchased (it being agreed that the excess of
the Fair Market Value over the aggregate purchase price shall be refunded to the
Awardee in cash);

 

(iv)       such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Law; or

 

(v)        any combination of the foregoing methods of payment.

 

(c)        Restrictions and Performance Criteria. The grant, issuance, retention
or vesting of Stock Awards issued to Employees may be subject to such
performance criteria and level of achievement versus these criteria as the
Administrator shall determine, which criteria may be based on financial
performance, personal performance evaluations or completion of service by the
Awardee.  Such Stock Awards are referred to as “Restricted Stock Awards.”

 

(d)        Termination of Employment, Board Membership or Cessation of Status as
Contractor. The Administrator shall determine as of the Grant Date (subject to
modification subsequent to the Grant Date) the effect a termination from
membership on the Board by a Non-Employee Director, an Employee’s Termination of
Employment or an individual’s cessation of status as a Contractor shall have on
any Stock Award.  Unless otherwise provided in the Award Agreement:  (i) a
Termination of Employment due to Disability or death, a cessation of status as a
Contractor due to Disability or death or a termination from membership on the
Board by a Non-Employee Director due to Disability or death, shall result in
vesting of a prorated portion of any Stock Award, based upon the full months of
the applicable performance period, vesting period or other period of restriction
elapsed as of the end of the month in which the Termination of Employment due to
Disability or death, cessation of status as a Contractor due to Disability or
death or termination from membership on the Board by a Non-Employee Director due
to Disability or death occurs over the total number of months in such period;
(ii) any Stock Award held by an Employee at Retirement that was granted more
than 12 months prior to the date of the Employee’s Retirement shall become 100%
vested as of the effective date of such Retirement and, if a performance-based
Award, the actual amount of the vested Award shall be determined and certified
by the Administrator after the completion of the performance period based on
actual performance result; and (iii) any other Termination of Employment,
cessation of status as a Contractor or termination from membership on the Board
by a Non-Employee Director shall result in immediate cancellation and forfeiture
of all outstanding, unvested Stock Awards.

 

  14

 

 

(e)        Share Restrictions.  Subject to the provisions of the Plan and the
applicable Stock Award Agreement, during such period as may be set by the
Administrator in its discretion and as set forth in the applicable Stock Award
Agreement (the “Restriction Period”), the Participant shall not be permitted to
sell, transfer, pledge, assign or otherwise encumber the Shares issued pursuant
to a Stock Award.  The Administrator shall have the authority, in its sole
discretion, to accelerate the time at which any or all of the restrictions shall
lapse with respect to any Shares issued pursuant to a Stock Award.  Upon the
expiration of the Restriction Period without prior forfeiture of the Shares (or
rights thereto) subject to the Restriction Period, unrestricted Shares shall be
issued and delivered to the Participant.

 

(f)        Stock Issuance and Restrictive Legends.  Upon execution and delivery
of a Stock Award Agreement and receipt of payment of the full purchase price, if
any, for the Shares subject to the Stock Award Agreement, the Company shall, as
soon as administratively practicable thereafter, issue the Shares.  Shares may
be issued in the form of a certificate, by book entry, or otherwise, in the
Company’s sole discretion, and shall bear an appropriate restrictive legend.

 

(g)            Rights as a Shareholder.  Unless otherwise provided for by the
Administrator, the Participant shall have the rights equivalent to those of a
shareholder and shall be a shareholder only after Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the Participant.  Any certificate
issued in respect of a Restricted Stock Award shall be registered in the name of
the applicable Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in
the following form:

 

The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Long-Term Incentive Plan and an Award Agreement.  Copies of such Plan and
Agreement are on file at the offices of Toga Limited.

 

The Committee may require that the certificates evidencing such Shares be held
in custody by the Company or the trustee of a trust set up by the Administrator)
until the restrictions thereon shall have lapsed and that, as a condition of any
Award of Restricted Stock, the applicable Participant shall have delivered to
the Company a stock power, endorsed in blank, relating to the Shares covered by
such Award. 

 

12.      Stock Unit Awards and Other Stock-Based Awards.

 

(a)        Stock Unit Awards.  Each Stock Unit Award Agreement shall contain
provisions regarding:  (i) the number of Shares subject to such Stock Unit Award
or a formula for determining such number, (ii) the performance criteria, if any,
and level of achievement versus these criteria that shall determine the number
of Shares granted, issued, and/or vested, (iii) such terms and conditions on the
grant, issuance, vesting and/or forfeiture of the Shares as may be determined
from time to time by the Administrator, (iv) restrictions on the transferability
of the Stock Unit Award, and (v) such further terms and conditions, in each case
not inconsistent with this Plan, as may be determined from time to time by the
Administrator.  The Administrator may, in its sole discretion, waive the vesting
restrictions and any other conditions set forth in any Award Agreement under
such terms and conditions as the Administrator shall deem appropriate.

 

  15

 

 

(i)         Restrictions and Performance Criteria. The grant, issuance,
retention or vesting of Stock Unit Awards issued to Employees may be subject to
such performance criteria and level of achievement versus these criteria as the
Administrator shall determine, which criteria may be based on financial
performance, personal performance evaluations or completion of service by the
Awardee.  Such Stock Unit Awards are referred to as “Restricted Stock Unit
Awards.”

 

(ii)            Termination of Employment, Board Membership or Cessation of
Status as a Contractor. The Administrator shall determine as of the Grant Date
(subject to modification subsequent to the Grant Date) the effect a termination
from membership on the Board by a Non-Employee Director, cessation of an
individual’s status as a Contractor or an Employee’s Termination of Employment
shall have on any Stock Unit Award.  Unless otherwise provided in the Award
Agreement:  (i) a Termination of Employment due to Disability or death, a
cessation of status as a Contractor due to Disability or death or a termination
from membership on the Board by a Non-Employee Director due to Disability or
death, shall result in vesting of a prorated portion of any Stock Unit Award,
based upon the full months of the applicable performance period, vesting period
or other period of restriction elapsed as of the end of the month in which the
Termination of Employment due to Disability or death, cessation of status as a
Contractor due to Disability or death or termination from membership on the
Board by a Non-Employee Director due to Disability or death occurs over the
total number of months in such period; (ii) any Stock Unit Award held by an
Employee at Retirement that was granted more than 12 months prior to the date of
the Employee’s Retirement shall become 100% vested as of the effective date of
such Retirement, and, if a performance-based Award, the actual amount of the
vested Award shall be determined and certified by the Administrator after the
completion of the performance period based on actual performance results; and
(iii) any other Termination of Employment, cessation of status as a Contractor
or termination from membership on the Board by a Director shall result in
immediate cancellation and forfeiture of all outstanding, unvested Stock Unit
Awards.

 

(iii)       Rights as a Shareholder. Unless otherwise provided for by the
Administrator, the Participant shall have the rights equivalent to those of a
shareholder and shall be a shareholder only after Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) and delivered to the Participant.

 

(b)        Other Stock-Based Award.  An “Other Stock-Based Award” means any
other type of equity-based or equity-related Award not otherwise described by
the terms of this Plan (including the grant or offer for sale of unrestricted
Shares), in such amount and subject to such terms and conditions as the
Administrator shall determine.  Such Awards may involve the transfer of actual
Shares to Participants, or payment in cash or otherwise of amounts based on the
value of Shares or pursuant to a cash basis performance goal.  Each Other
Stock-Based Award will be evidenced by an Award Agreement containing such terms
and conditions as may be determined by the Administrator.

 

(i)         Value of Other Stock-Based Awards.  Each Other Stock-Based Award
shall be expressed in terms of Shares or units based on Shares, as determined by
the Administrator.  The Administrator may establish performance goals in its
discretion.  If the Administrator exercises its discretion to establish
performance goals, the number and/or value of Other Stock-Based Awards that will
be paid out to the Participant will depend on the extent to which the
performance goals are met.

 

  16

 

 

(ii)        Payment of Other Stock-Based Awards.  Payment, if any, with respect
to Other Stock-Based Awards shall be made in accordance with the terms of the
Award, in cash, Shares or a combination thereof, as the Administrator
determines.

 

(iii)       Termination of Employment or Board Membership or Cessation of Status
as a Contractor.  The Administrator shall determine as of the Grant Date
(subject to modification subsequent to the Grant Date) the effect a termination
from membership on the Board by a Non-Employee Director, the cessation of an
individual’s status as a Contractor or an Employee’s Termination of Employment
shall have on any Other Stock-Based Award.  Unless otherwise provided in the
Award Agreement:  (i) a Termination of Employment due to Disability or death, a
cessation of status as a Contractor due to Disability or death or termination
from membership on the Board by a Non-Employee Director due to Disability or
death, shall result in vesting of a prorated portion of any Other Stock-Based
Award, based upon the full months of the applicable performance period, vesting
period or other period of restriction elapsed as of the end of the month in
which the Termination of Employment or Board membership due to Disability or
death or cessation of status as a Contractor due to Disability or death occurs
over the total number of months in such period; (ii) any Other Stock-Based Award
held by an Employee at Retirement that was granted more than 12 months prior to
the date of the Employee’s Retirement shall become 100% vested as of the
effective date of such Retirement and, if a performance-based Award, the actual
amount of the vested Award shall be determined and certified by the
Administrator after the completion of the performance period based on actual
performance results; and (iii) any other Termination of Employment, cessation of
status as a Contractor or termination from Board membership shall result in
immediate cancellation and forfeiture of all outstanding, unvested Other
Stock-Based Awards.

 

(iv)          Effect of Forfeiture.  If Restricted Stock is not vested and the
Awardee purchased such Restricted Stock from the Company, the Company or its
assigns shall have the right and option to repurchase some or all of such
non-vested Shares (as determined by the Company) upon the occurrence of an event
causing the Awardee or Holder to forfeit his or her right to such Restricted
Stock (the “Forfeiture Date”) at a repurchase price equal to the lesser of (x)
the amount paid by the Awardee for such Shares, or (y) the Fair Market Value per
Share on the date the Company exercises its repurchase right.  This repurchase
right may be exercised by the Company at any time during the period commencing
on the date the forfeiture event occurs and ending on the date that is six
months following the date of such forfeiture event occurs (the “Repurchase
Period”) upon payment by the Company of the repurchase price to the Holder of
the repurchased Shares.  Any Shares of Restricted Stock that the Company does
not repurchase during the Repurchase Period shall become vested and
nonforfeitable at the expiration of the Repurchase Period.

 

13.      Other Provisions Applicable to Awards.

 

(a)            Restriction on Exercise after Termination.  Notwithstanding any
provision of this Plan to the contrary, no unexercised right created under the
Plan (an “Unexercised Right”) and held by the Participant on the date of his or
her Termination of Employment for any reason or, if the Participant is a
Non-Employee Director or a Contractor, the date of termination of the
Participant’s status as a Director or Contractor for any reason, shall be
exercisable after such termination if, prior to such exercise, the Participant: 
(i) takes other employment or renders services to others without the written
consent of the Company, (ii) violates any non-competition, confidentiality,
conflict of interest, or similar provisions set forth in the Award Agreement
pursuant to which such Unexercised Right was awarded, or (iii) otherwise
conducts himself or herself in a manner adversely affecting the Company in the
sole discretion of the Administrator.

 

  17

 

 

(b)        Securities Law Restrictions.  No right under the Plan shall be
exercisable and no Share shall be delivered under the Plan except in compliance
with all applicable federal, state and foreign securities laws and regulations. 
The Company shall not be required to deliver any Shares or other securities
under the Plan prior to registration or other qualification of the Shares or
other securities under any applicable state or federal law, rule or regulations
as the Administrator shall determine to be necessary or advisable, in its sole
discretion.

 

The Administrator may require each person acquiring Shares under the Plan to: 
(i) represent and warrant to and agree with the Company in writing that such
person is acquiring the Shares without a view to the distribution thereof, and
(ii) make such additional representations, warranties, and agreements with
respect to the investment intent of such person or persons as the Administrator
may reasonably request.  Any certificates for such Shares may include any legend
which the Administrator deems appropriate to reflect any restrictions on
transfer.

 

All Shares or other securities delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, and stock exchange upon which the Shares are then
listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be put on any certificates
evidencing such Shares to make appropriate reference to such restrictions.

 

Notwithstanding any provision of the Plan or any Award Agreement executed
pursuant to the Plan, the Company’s obligations under the Plan and such Award
Agreement shall be subject to all applicable laws, rules and regulations and to
such approvals as may be required by any governmental or regulatory agencies,
including, without limitation, any stock exchange on which the Company’s Shares
may then be listed.

 

14.      Dividends and Dividend Equivalents.

 

Awards other than Options and Stock Appreciation Rights may provide the Awardee
with the right to receive dividend payments or dividend equivalent payments on
the Shares subject to the Award, whether or not such Award is vested. 
Notwithstanding the foregoing, dividends or dividend equivalents shall not be
paid with respect to Stock Unit Awards and Other Stock-Based Awards that vest
based on the achievement of performance goals prior to the date the performance
goals are satisfied and the Award is earned, and then shall be payable only with
respect to the number of Shares or Stock Units actually earned under the Award. 
Such payments may be made in cash, Shares or Stock Units or may be credited as
cash or Stock Units to an Awardee’s account and later settled in cash or Shares
or a combination thereof, all as determined by the Administrator.  Such payments
and credits may be subject to such conditions and contingencies as the
Administrator may establish.

 

  18

 

 

15.      Treatment Upon Sale Event or Other Extraordinary Transaction.

 

(a)            Options. 

 

(i)             In the case of and subject to the consummation of a Sale Event,
the Committee shall have the right (but not the obligation) to accelerate the
vesting with respect to any or all of the outstanding Options.  Upon the
consummation of a Sale Event, the Plan and all Options issued hereunder (both
vested and unvested) shall terminate upon the effective time of any such Sale
Event unless provision is made in connection with the Sale Event in the sole
discretion of the parties thereto for the assumption or continuation of Options
theretofore granted by the successor entity, or the substitution of such Options
with new Options of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of Shares and, if appropriate, the per
Share exercise prices, as such parties shall agree (after taking into account
any acceleration hereunder).

 

(ii)            In the event of the termination of the Plan and all Options
issued hereunder pursuant to a Sale Event, each Holder of Options shall be
permitted, within a specified period of time prior to the consummation of the
Sale Event as determined by the Committee, to exercise all such Options that are
then exercisable or that will become exercisable as of the effective time of the
Sale Event; provided, however, that the exercise of any Options not exercisable
prior to the Sale Event shall be conditioned upon the consummation of the Sale
Event. 

 

(iii)           Notwithstanding anything to the contrary in Section 15(a)(i), in
the event of a Sale Event pursuant to which holders of the Stock of the Company
will receive upon consummation thereof a cash payment for each Share surrendered
in the Sale Event, the Company shall have the right, but not the obligation, to
make or provide for a cash payment to the Awardees holding vested Options
(including Options (if any) that vest as a result of such Sale Event) in
exchange for the cancellation thereof, in an amount equal to the difference
between (A) the value as determined by the Committee of the consideration
payable per Share pursuant to the Sale Event (the “Sale Price”) times the number
of Shares subject to outstanding vested Options (to the extent then exercisable
at prices not in excess of the Sale Price) and (B) the aggregate exercise price
of all such outstanding vested Options.  If exercise price per Share of a vested
Option equals or exceeds the Sale Price per Share, such Option shall be
cancelled upon consummation of such Sale Event without payment of any
consideration to the Awardee unless provision is made in connection with the
Sale Event for the assumption or continuation of such Option pursuant to Section
15(a)(i) above.

 

(b)            Option Shares and Restricted Stock Awards.  Unless otherwise
provided in an Award agreement, in the case of and subject to the consummation
of a Sale Event, Option Shares and Shares of Restricted Stock shall be subject
to the repurchase right set forth in Section 16.

 

(c)            Unrestricted Stock Awards.  Unless otherwise provided herein or
in an Award agreement, any Shares of Unrestricted Stock shall be treated in a
Sale Event the same as all other Shares then outstanding.

 

  19

 

 

(d)            Adjustment Clause. In the event of:  (i) a stock dividend, stock
split, reverse stock split, share combination, or recapitalization or similar
event affecting the capital structure of the Company, or (ii) a merger,
consolidation, acquisition of property or shares, separation, spin-off,
reorganization, stock rights offering, liquidation, Disaffiliation, or similar
event affecting the Company or any of its Subsidiaries (each, an “Organic
Change”), the Administrator or the Board may in its discretion make such
substitutions or adjustments as it deems appropriate and equitable to (i) the
Share limitations set forth in Section 3, (ii) the number and kind of Shares
covered by each outstanding Award, and (iii) the price per Share subject to each
such outstanding Award.  In the case of Organic Changes, such adjustments may
include, without limitation:  (x) the cancellation of outstanding Awards in
exchange for payments of cash, property or a combination thereof having an
aggregate value equal to the value of such Awards, as determined by the
Administrator or the Board in its sole discretion (it being understood that in
the case of an Organic Change with respect to which shareholders receive
consideration other than publicly traded equity securities of the ultimate
surviving entity, any such determination by the Administrator that the value of
an Option or Stock Appreciation Right shall for this purpose be deemed to equal
the excess, if any, of the value of the consideration being paid for each Share
pursuant to such Organic Change over the exercise price of such Option or Stock
Appreciation Right shall conclusively be deemed valid); (y) the acceleration of
vesting of such Awards or the substitution of other property (including, without
limitation, cash or other securities of the Company and securities of entities
other than the Company) for the Shares subject to outstanding Awards; and (z) in
connection with any Disaffiliation, arranging for the assumption of Awards, or
replacement of Awards with new awards based on other property or other
securities (including, without limitation, other securities of the Company and
securities of entities other than the Company), by the affected Subsidiary,
Affiliate, or division or by the entity that controls such Subsidiary,
Affiliate, or division following such Disaffiliation (as well as any
corresponding adjustments to Awards that remain based upon Company securities). 
Any adjustment under this Section 15(d) need not be the same for all
Participants and the Board’s and the Administrator’s determination of the
adjustments appropriate to be made under this Section 15(d) shall be conclusive
upon all Participants under the Plan.  Any such adjustment shall be made in
accordance with the requirements of Treasury Regulation Sections
1.409A-1(b)(5)(v)(D) and 1.424-1(a)(5) as determined by the Committee in
good-faith and any such adjustment by the Committee shall be final, binding and
conclusive on all Persons.  Any such adjustment shall also be made in a manner
which does not adversely affect the exemption provided pursuant to Rule 16b-3
under the Exchange Act (to the extent the Committee determines applicable, in
its sole discretion) or any independence standard contained in applicable
exchange listing requirements.  No fractional Shares shall be issued under the
Plan resulting from any such adjustment, but the Committee in its discretion may
make a cash payment in lieu of fractional Shares.

 

The Committee may also adjust the number of Shares subject to outstanding Awards
and the exercise price and the terms of outstanding Awards to take into
consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan; provided, however,
that no such adjustment shall be made if it would constitute a modification,
extension or renewal of a Stock Option within the meaning of Treasury Regulation
Sections 1.409A-1(b)(5)(v) or 1.424-1(e).

 

(e)        Section 409A.  Notwithstanding the foregoing:  (i) any adjustments
made pursuant to Section 15 to Awards that are considered “deferred
compensation” within the meaning of Section 409A shall be made in compliance
with the requirements of Section 409A; (ii) any adjustments made pursuant to
Section 15 to Awards that are not considered “deferred compensation” subject to
Section 409A shall be made in such a manner as to ensure that, after such
adjustment, the Awards either continue not to be subject to Section 409A or
comply with the requirements of Section 409A; (iii) the Administrator shall not
have the authority to make any adjustments pursuant to Section 15 to the extent
that the existence of such authority would cause an Award that is not intended
to be subject to Section 409A to be subject thereto; and (iv) if any Award is
subject to Section 409A, Section 15(e) shall be applicable only to the extent
specifically provided in the Award Agreement and permitted pursuant to Section
29 in order to ensure that such Award complies with Section 409A.

 

  20

 

 

16.      Transfer Restrictions; Company Right of First Refusal; Company
Repurchase Rights.

 

(a)          Restrictions on Transfer.

 

(i)          Options.  No Stock Option shall be transferable by the Awardee
otherwise than by will or by the laws of descent and distribution and all Stock
Options shall be exercisable, during the Awardee’s lifetime, only by the
Awardee, or by the Awardee’s legal representative or guardian in the event of
the Awardee’s incapacity.  The Awardee may elect to designate a beneficiary by
providing written notice of the name of such beneficiary to the Company, and may
revoke or change such designation at any time by filing written notice of
revocation or change with the Company, and any such beneficiary may exercise the
Awardee’s Stock Option in the event of the Awardee’s death to the extent
provided herein. If the Awardee does not designate a beneficiary, or if the
designated beneficiary predeceases the Awardee, the legal representative of the
Awardee may exercise this Stock Option in the event of the Awardee’s death to
the extent provided herein.  Notwithstanding the foregoing, the Committee, in
its sole discretion, may provide in the Award agreement regarding a given Option
that the Awardee may transfer, without consideration for the transfer, his or
her Non-Qualified Stock Options to a Permitted Transferee, provided that the
Permitted Transferee agrees in writing with the Company to be bound by all of
the terms and conditions of this Plan and the applicable Option.

 

(ii)          Issued Shares.  No Issued Shares shall be sold, assigned,
transferred, pledged, hypothecated, given away or in any other manner disposed
of or encumbered, whether voluntarily or by operation of law, unless (i) such
transfer is in compliance with the terms of the applicable Award, all applicable
securities laws (including, without limitation, the Act), and with the terms and
conditions of this Section 16, (ii) such transfer does not cause the Company to
become subject to the reporting requirements of the Exchange Act, and (iii) the
transferee consents in writing to be bound by the provisions of the Plan,
including this Section 16.  In connection with any proposed transfer, the
Committee may require the transferor to provide at the transferor’s own expense
an opinion of counsel to the transferor, satisfactory to the Committee, that
such transfer is in compliance with all foreign, federal and state securities
laws (including, without limitation, the Securities Act).  Any attempted
disposition of Issued Shares not in accordance with the terms and conditions of
this Section 16 shall be null and void, and the Company shall not reflect on its
records any change in record ownership of any Issued Shares as a result of any
such disposition, shall otherwise refuse to recognize any such disposition and
shall not in any way give effect to any such disposition of Issued Shares. 
Subject to the foregoing general provisions, and unless otherwise provided in
the agreement with respect to a particular Award, Issued Shares may be
transferred pursuant to the following specific terms and conditions (provided
that with respect to any transfer of Restricted Stock, all vesting and
forfeiture provisions shall continue to apply only with respect to the Awardee):

 

(A)       Transfers to Permitted Transferees.  The Holder may sell, assign,
transfer or give away any or all of the Issued Shares to Permitted Transferees;
provided, however, that following such sale, assignment, or other transfer, such
Issued Shares shall continue to be subject to the terms of this Plan (including
this Section 16) and such Permitted Transferee(s) must, as a condition to any
such transfer, deliver a written acknowledgment to that effect to the Company.

 

  21

 

 

(B)       Transfers Upon Death.  Upon the death of the Holder, any Issued Shares
then held by the Holder at the time of such death and any Issued Shares acquired
thereafter by the Holder’s estate, executors, administrators, personal
representatives, heirs, legatees and distributees shall be subject to the
provisions of this Plan (including this Section 16).

 

(iii)          All Issued Shares shall be subject to all restrictions on
transfer set forth in the Company’s Articles of Incorporation, by-laws or
regulations.

 

(b)           Right of First Refusal.  In the event that a Holder desires at any
time to sell or otherwise transfer all or any part of such Holder’s Issued
Shares to any Person (other than a Permitted Transferee), the Holder first shall
give written notice to the Company of the Holder’s intention to make such
transfer.  Such notice shall state the number of Issued Shares which the Holder
proposes to sell (the “Offered Shares”), the price and the terms at which the
proposed sale is to be made and the name and address of the proposed
transferee.  At any time within 30 days after the receipt of such notice by the
Company, the Company or its assigns may elect to purchase all or any portion of
the Offered Shares at the price and on the terms offered by the proposed
transferee and specified in the notice.  The Company or its assigns shall
exercise this right by mailing or delivering written notice to the Holder within
the foregoing 30-day period.  If the Company or its assigns elect to exercise
its purchase rights under this Section 16(b), the closing for such purchase
shall, in any event, take place within 45 days after the receipt by the Company
of the initial notice from the Holder.  In the event that the Company or its
assigns do not elect to exercise such purchase right, or in the event that the
Company or its assigns do not pay the full purchase price within such 45-day
period, the Holder may, within 60 days thereafter, sell the Offered Shares to
the proposed transferee and at the same price and on the same terms as specified
in the Holder’s notice.  Any Shares purchased by such proposed transferee (other
than a purchase by a Permitted Transferee) shall no longer be subject to the
terms of the Plan.  Any Shares not sold to the proposed transferee shall remain
subject to the terms of the Plan.

 

(c)            Company’s Right of Repurchase.

 

(i)          Right of Repurchase for Option Shares.  The Company or its assigns
shall have the right and option upon the occurrence of a Repurchase Event with
respect to a Holder of Option Shares to repurchase from such Holder some or all
(as determined by the Company) of the Option Shares held or subsequently
acquired upon exercise of a Stock Option by such Holder at the price per Share
specified below.  Such repurchase right may be exercised by the Company at any
time during the period commencing on the date the Repurchase Event occurs and
ending on the later of (A) the date that is eighteen (18) months following the
date of such Repurchase Event or (B) the date that is thirteen (13) months after
the acquisition of such Option Shares upon exercise of a Stock Option (the
“Option Shares Repurchase Period”).  The “Option Shares Repurchase Price” shall
be the Fair Market Value of the Option Shares; provided, however, that in the
case of a Restrictive Covenant Breach, the Option Shares Repurchase Price shall
be the lesser of Fair Market Value of the Option Shares or the purchase price
paid by the Awardee (or Holder) for the Option Shares upon exercise of Options
by the Awardee (or Holder).  Fair Market Value of the Option Shares shall be
determined as of the date the Committee elects to exercise its repurchase rights
in connection with such Repurchase Event.

 

  22

 

 

(ii)         Right of Repurchase With Respect to Restricted Stock.  Unless
otherwise set forth in the agreement entered into by the Awardee and the Company
in connection with a Restricted Stock Award, the Company or its assigns shall
have the right and option upon a Repurchase Event to repurchase from a Holder of
Issued Shares received pursuant to a Restricted Stock Award some or all (as
determined by the Company) of such Issued Shares at the price per Share
specified below.  Such repurchase right may be exercised by the Company at any
time during the period commencing on the date the Repurchase Event occurs and
ending on the date that is six months following the date of such Repurchase
Event (the “Non-Option Shares Repurchase Period”).  The “Non-Option Shares
Repurchase Price” shall be the Fair Market Value of such Issued Shares;
provided, however, that in the case of a Restrictive Covenant Breach, the
Non-Option Shares Repurchase Price shall be the lesser of Fair Market Value of
the Issued Shares or the original purchase price paid by the Awardee for the
Issued Shares received pursuant to a Restricted Stock Award.  Fair Market Value
of the Option Shares shall be determined as of the date the Committee elects to
exercise its repurchase rights in connection with such Repurchase Event.

 

(iii)          Procedure.  Any repurchase right of the Company shall be
exercised by the Company or its assigns by giving the Holder written notice on
or before the last day of the Option Shares Repurchase Period or Non-Option
Shares Repurchase Period, as applicable, of its intention to exercise such
repurchase right.  Upon such notification, the Holder shall promptly surrender
to the Company, free and clear of any liens or encumbrances, any certificates
representing the Shares being purchased, together with a duly executed stock
power for the transfer of such Shares to the Company or the Company’s assignee
or assignees.  Upon the Company’s or its assignee’s receipt of the certificates
from the Holder, the Company or its assignee or assignees shall deliver to him,
her or them a check for the Option Shares Repurchase Price or the Non-Option
Shares Repurchase Price, as applicable; provided, however, that the Company may
pay the Option Shares Repurchase Price or Non-Option Shares Repurchase Price, as
applicable, by offsetting and canceling any indebtedness then owed by the Holder
to the Company.

 

(d)           Drag Along Right.  In the event the holders of a majority of the
Company’s voting capital stock then outstanding (the “Majority Shareholders”)
determine to sell or otherwise dispose of all or substantially all of the assets
of the Company or all or 50 percent or more of the capital stock of the Company,
in each case in a transaction constituting a change in control of the Company,
to any non Affiliate(s) of the Company or any of the Majority Shareholders, or
to cause the Company to merge with or into or consolidate with any
non-Affiliate(s) of the Company or any of the Majority Shareholders (in each
case, the “Buyer”) in a bona fide negotiated transaction (a “Sale”), each Holder
of Issued Shares, including any Permitted Transferees, shall be obligated to and
shall upon the written request of the Majority Shareholders:  (a) sell, transfer
and deliver, or cause to be sold, transferred and delivered, to the Buyer, his
or her Issued Shares (including for this purpose all of such Holder’s or his or
her Permitted Transferee’s Issued Shares that presently or as a result of any
such transaction may be acquired upon the exercise of an Option (following the
payment of the exercise price therefor)) on substantially the same terms
applicable to the Majority Shareholders (with appropriate adjustments to reflect
the conversion of convertible securities, the redemption of redeemable
securities and the exercise of exercisable securities as well as the relative
preferences and priorities of preferred stock); and (b) execute and deliver such
instruments of conveyance and transfer and take such other action, including
voting such Issued Shares in favor of any Sale proposed by the Majority
Shareholders and executing any purchase agreements, merger agreements, indemnity
agreements, escrow agreements or related documents as the Majority Shareholders
or the Buyer may reasonably require in order to carry out the terms and
provisions of this Section 16(d).

 

  23

 

 

(e)            Escrow Arrangement.

 

(i)          Escrow.  In order to carry out the provisions of Sections 12(b)(iv)
and 16(b), (c) and (d) of this Agreement more effectively, the Company shall
hold any Issued Shares in escrow together with separate stock powers executed by
the Holder in blank for transfer, and any Permitted Transferee shall, as an
additional condition to any transfer of Issued Shares, execute a like stock
power as to such Issued Shares.  The Company shall not dispose of the Issued
Shares except as otherwise provided in this Agreement.  In the event of any
repurchase by the Company (or any of its assigns), the Company is hereby
authorized by the Holder and any Permitted Transferee, as the Holder’s and each
such Permitted Transferee’s attorney-in-fact, to date and complete the stock
powers necessary for the transfer of the Issued Shares being purchased and to
transfer such Issued Shares in accordance with the terms hereof.  At such time
as any Issued Shares are no longer subject to the Company’s repurchase, first
refusal and drag along rights, the Company shall, at the written request of the
Holder, deliver to the Holder (or the relevant Permitted Transferee) a
certificate representing such Issued Shares with the balance of the Issued
Shares to be held in escrow pursuant to this Section 16(e).

 

(ii)          Remedy.  Without limitation of any other provision of this
Agreement or other rights, in the event that a Holder, any Permitted Transferees
or any other Person is required to sell a Holder’s Issued Shares pursuant to the
provisions of Sections 12(b)(iv) or 16(b), (c) or (d) and in the further event
that he or she refuses or for any reason fails to deliver to the Company or its
designated purchaser of such Issued Shares the certificate or certificates
evidencing such Issued Shares together with a related stock power, the Company
or such designated purchaser may deposit the applicable purchase price for such
Issued Shares with a bank designated by the Company, or with the Company’s
independent public accounting firm, as agent or trustee, or in escrow, for such
Holder, any Permitted Transferees or other Person, to be held by such bank or
accounting firm for the benefit of and for delivery to him, her, them or it,
and/or, in its discretion, pay such purchase price by offsetting any
indebtedness then owed by such Holder as provided above.  Upon any such deposit
and/or offset by the Company or its designated purchaser of such amount and upon
notice to the Person who was required to sell the Issued Shares to be sold
pursuant to the provisions of Sections 12(b)(iv) or 16(b), (c) or (d), such
Issued Shares shall at such time be deemed to have been sold, assigned,
transferred and conveyed to such purchaser, such Holder shall have no further
rights thereto (other than the right to withdraw the payment thereof held in
escrow, if applicable), and the Company shall record such transfer in its stock
transfer book or in any appropriate manner.

 

(f)            Lockup Provision.  Holder agrees, if requested by the Company and
any underwriter engaged by the Company, not to sell or otherwise transfer or
dispose of any Issued Shares (including, without limitation, pursuant to Rule
144 under the Securities Act) held by him or her for such period following the
effective date of any registration statement of the Company filed under the
Securities Act as the Company or such underwriter shall specify reasonably and
in good faith, not to exceed 180 days in the case of the Company’s initial
public offering or 90 days in the case of any other public offering.

 

  24

 

 

(g)            Adjustments for Changes in Capital Structure.  If, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, spin-off, split-up or other similar change in the
Common Stock, the outstanding Shares are increased or decreased or are exchanged
for a different number or kind of security of the Company, the restrictions
contained in this Section 16 shall apply with equal force to additional and/or
substitute securities, if any, received by Holder in exchange for, or by virtue
of his or her ownership of, Issued Shares. 

 

(h)            Transfers to Competitors.  Notwithstanding anything contained
herein to the contrary, no Issued Shares may be sold or otherwise transferred to
a party that is a competitor of the Company without the prior written approval
of the Board.  Any sale or other purported sale of Issued Shares in violation of
this Section 16(h) shall be null and void.

 

(i)             Termination.  The terms and provisions of Section 16(b), Section
16(c), Section 16(d) and Section 16(h) shall terminate upon the closing of the
Company’s initial public offering or upon consummation of any Sale Event, in
either case as a result of which Shares of the same class as the Issued Shares
are registered under Section 12 of the Exchange Act and publicly traded on any
national security exchange.

 

17.      Amendment and Termination of the Plan.

 

(a)        Amendment and Termination.  The Board, without further action on the
part of the shareholders of the Company, may from time to time amend, suspend or
alter the Plan or any Award Agreement and may terminate the Plan or any Award
Agreement at any time; provided, however, that any such amendment shall be
subject to approval of the shareholders of the Company in the manner and to the
extent required by Applicable Law.  In addition, without limiting the foregoing,
unless approved by the shareholders of the Company and subject to Section 15, no
such amendment shall be made that would:

 

(i)         increase the maximum aggregate number of Shares which may be subject
to Awards granted under the Plan;

 

(ii)        reduce the minimum exercise price for Options or Stock Appreciation
Rights granted under the Plan;

 

(iii)       reduce the exercise price of outstanding Options or Stock
Appreciation Rights;

 

(iv)       materially modify the requirements as to eligibility for
participation in the Plan;

 

(v)        extend the maximum option period of Options granted under the Plan;
or

 

(vi)       effect any other change which requires shareholder approval under
Applicable Law.

 

            Subject to the above provisions, the Board shall have the authority
to amend the Plan to take into account changes in applicable tax and securities
laws and accounting rules, as well as other developments.

 

  25

 

 

(b)        Effect of Amendment or Termination. No amendment, suspension or
termination of the Plan shall materially impair the rights of any Participant
with respect to an outstanding Award, unless mutually agreed otherwise between
the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company, except that no such agreement shall
be required if the Administrator determines in its sole discretion that such
amendment either (i) is required or advisable in order for the Company, the Plan
or the Award to satisfy any Applicable Law or to meet the requirements of any
accounting standard, or (ii) is not reasonably likely to significantly diminish
the benefits provided under such Award, or that any such diminishment has been
adequately compensated.  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.

 

(c)        Effect of the Plan on Other Arrangements.  Neither the adoption of
the Plan by the Board nor the submission of the Plan to the shareholders of the
Company for approval shall be construed as creating any limitations on the power
of the Board to adopt such other incentive arrangements as it or they may deem
desirable, including without limitation, the granting of restricted shares or
restricted share units or stock options otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

 

18.      Designation of Beneficiary.

 

Each Awardee to whom an Award has been made under the Plan may designate a
beneficiary or beneficiaries to exercise any Award or receive any payment under
any Award payable on or after the Awardee’s death.  Any such designation shall
be on a form provided for that purpose by the Committee and shall not be
effective until received by the Committee.  If no beneficiary has been
designated by a deceased Awardee, or if the designated beneficiaries have
predeceased the Awardee, the beneficiary shall be the Awardee’s estate.

 

19.      No Right to Awards or to Employment.

 

No person shall have any claim or right to be granted an Award and the grant of
any Award shall not be construed as giving an Awardee the right to continue in
the employ of the Company or its Affiliates and shall not restrict or interfere
in any way with the right of the Company or its Affiliates to terminate the
Awardee’s employment at any time, with or without Cause.  Further, the Company
and its Affiliates expressly reserve the right, at any time, to dismiss any
Employee or Awardee at any time without liability or any claim under the Plan,
except as provided herein or in any Award Agreement entered into hereunder.

 

20.      Legal Compliance.

 

Shares shall not be issued pursuant to an Option, Stock Appreciation Right,
Stock Award, Stock Unit Award or Other Stock-Based Award unless such Option,
Stock Appreciation Right, Stock Award, Stock Unit or Other Stock-Based Award and
the issuance and delivery of such Shares shall comply with Applicable Law and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.  Unless the Awards and Shares covered by this Plan have been
registered under the Securities Act or the Company has determined that such
registration is unnecessary, each person receiving an Award and/or Shares
pursuant to any Award may be required by the Company to give a representation in
writing that such person is acquiring such Shares for his or her own account for
investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.

 

  26

 

 

21.      Inability to Obtain Authority.

 

To the extent the Company is unable, or the Administrator deems it unfeasible,
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be advisable or necessary to the
lawful issuance and sale of any Shares hereunder, the Company shall be relieved
of any liability with respect to the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

 

22.      Reservation of Shares.

 

The Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

 

23.      Notice.

 

Any written notice to the Company required by any provisions of this Plan shall
be addressed to the Secretary of the Company and shall be effective when
received.  Any notice to a Participant hereunder shall be addressed to the last
address of record with the Company and shall be effective when sent via first
class mail, courier service, or electronic mail to such last address of record.

 

24.      Governing Law

 

Except to the extent preempted by United States Federal law or as otherwise
expressly provided herein, the Plan and Award Agreements and all determinations
made and actions taken pursuant hereto shall be interpreted in accordance with
and governed by the substantive, internal laws of the state of Nevada, without
giving effect to any choice or conflict of law provisions, rules or principles.

 

25.      Interpretation of Plan and Awards.

 

(a)        The headings preceding the text of the sections hereof are inserted
solely for convenience of reference, and shall not constitute a part of the
Plan, nor shall they serve as a basis for interpretation of the Plan.

 

(b)        Any reference to a provision of law, regulation or rule shall be
deemed to include a reference to the successor of such law, regulation or rule.

 

(c)        Any reference to a particular section of the Code or legislative Act
shall be deemed to include a reference to all regulations and other lawful
guidance interpreting, construing or implementing such section or Act.

 

(d)        To the extent consistent with the context, any masculine term shall
include the feminine, and vice versa, and the singular shall include the plural,
and vice versa.

 

26.      Successors and Assigns.

 

The terms of the Plan and any Award shall inure to the benefit of, and be
binding upon, the parties hereto and their respective permitted heirs,
beneficiaries, successors and assigns.

 

27.      Illegality, Invalidity and Unenforceability.

 

If any provision of the Plan or any Award granted under the Plan is declared to
be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of the terms of the Plan and/or Award shall not be affected except
to the extent necessary to reform or delete such illegal, invalid or
unenforceable provision.

 

  27

 

 

28.      Private Company Provisions.

 

For any period during which the Company’s Shares are not publicly traded on a
national stock exchange or national market system, the following provisions
shall apply:

 

(a)        Restrictive Legends.  If one or more Options or other rights under
the Plan are exercised pursuant to exemptions from foreign, federal and state
securities laws:  (i) any Shares issued upon exercise of those Options or rights
may not be sold or otherwise transferred, and the Company shall not be required
to transfer any such Shares, unless they have been registered under the foreign,
federal and state securities laws or a valid exemption from such registration is
available, and (ii) the Company may cause each certificate or other
documentation evidencing ownership of any Shares issued upon exercise of those
Options or rights to be imprinted with a legend in the following form:

 

“The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, or any state securities law and may not be
sold or otherwise transferred without such registration unless a valid exemption
from such registration is available and the corporation has received an opinion
of, or satisfactory to, its counsel that such transfer would not violate any
federal or state securities laws.”

 

The legend shall be in addition to the legend in Section 11, which applies to
any certificate issued in respect of a Restricted Stock Award.

 

(b)        Restrictions on Transfers.  Except as otherwise expressly provided in
this Plan, no Shares awarded under the Plan or issued upon exercise of an Option
or other right under the Plan may be sold or otherwise transferred.

 

(c)        Purchase Option.  Notwithstanding anything to the contrary in this
Plan, if any Participant who is a Non-Employee Director ceases to be a member of
the Board, or if any Participant who is an Employee ceases to be an Employee of
the Company and its Affiliates, if any, for any reason (including without
limitation his or her death, Disability, Retirement, resignation, replacement,
removal, expiration of term, discharge or any other reason), then the Company
shall have the exclusive right and option to purchase from such Participant, the
executor or administrator of his or her estate, or his or her other successor in
interest, as the case may be, any or all of the Shares which may have been
purchased or awarded to the Participant under the Plan (including without
limitation any Shares purchased upon exercise of an Option or other right after
termination of the Participant’s employment or status as a Non-Employee Director
and any additional Shares which the Participant may have received as a result of
any stock splits, stock dividends or similar sources as a result of receiving
Shares under the Plan).

 

29.      Section 409A.

 

It is the intention of the Company that no Award be “deferred compensation”
subject to Section 409A, unless and to the extent that the Administrator
specifically determines otherwise, and the Plan and the terms and conditions of
all Awards shall be interpreted accordingly.  The terms and conditions governing
any Awards that the Administrator determines will be subject to Section 409A,
including any rules for elective or mandatory deferral of the delivery of cash
or Shares pursuant thereto and any rules regarding treatment of such Awards upon
a Sale Event, shall be set forth in the applicable Award Agreement, deferral
election forms and procedures, and rules established by the Administrator, and
shall comply in all respects with Section 409A.  The following rules will apply
to Awards intended to be subject to Section 409A (“409A Awards”):

 

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(a)        If a Participant is permitted to elect to defer an Award or any
payment under an Award, such election will be permitted only at times in
compliance with Code Section 409A, including applicable transition rules
thereunder.

 

(b)        The Company shall have no authority to accelerate distributions
relating to 409A Awards, other than any authority expressly permitted under
Section 409A.

 

(c)        Any distribution pursuant to a 409A Award following a Termination of
Employment that would be subject to Section 409A(a)(2)(A)(i) of the Code as a
distribution following a separation from service of a “specified employee” as
defined under Section 409A(a)(2)(B)(i) of the Code, shall occur no earlier than
the date immediately following the expiration of the six-month period after such
Termination of Employment.  For the avoidance of doubt, an intervening
distribution following a Participant’s death prior to the expiration of such
period would not be prohibited under this subsection.

 

(d)        In the case of any distribution pursuant to a 409A Award, if the
timing of such distribution is not otherwise specified in the Plan, an Award
Agreement or other governing document, the distribution shall be made not later
than the end of the calendar year during which the settlement of the 409A Award
is specified to occur.

 

(e)        In the case of an Award providing for distribution or settlement upon
vesting or the lapse of a risk of forfeiture, if the time of such distribution
or settlement is not otherwise specified in the Plan, an Award Agreement or
other governing document, the distribution or settlement shall be made not later
than March 15 of the year following the year in which the Award vested or the
risk of forfeiture lapsed.

 

(f)        Notwithstanding anything herein to the contrary, in no event shall
the Company or the Administrator be liable for the payment of, or any gross up
payment in connection with, any taxes, penalties or interest owed by the
Participant pursuant to Section 409A of the Code.

 

30.      Limitation on Liability.

 

The Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Employee, an Awardee or any
other person as to:

 

(a)        The Non-Issuance of Shares. The non-issuance or sale of Shares as to
which the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any Shares hereunder; and

 

(b)        Tax or Exchange Control Consequences. Any tax consequence expected,
but not realized, or any exchange control obligation owed, by any Participant,
Employee, Awardee or other person due to the receipt, exercise or settlement of
any Option or other Award granted hereunder.

 

No member of the Board or the Committee shall have any liability for any
determination or other action made or taken in good faith with respect to the
Plan or any Award granted under the Plan.

 

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31.      Unfunded Plan.

 

Insofar as it provides for Awards, the Plan shall be unfunded.  Although
bookkeeping accounts may be established with respect to Awardees who are granted
Stock Awards, Stock Unit Awards or Other Stock-Based Awards under this Plan, any
such accounts will be used merely as a bookkeeping convenience.  The Company
shall not be required to segregate any assets which may at any time be
represented by Awards, nor shall this Plan be construed as providing for such
segregation.  Neither the Company nor the Administrator shall be deemed to be a
trustee of Shares or cash to be awarded under the Plan.  Any liability of the
Company to any Participant with respect to an Award shall be based solely upon
any contractual obligations which may be created by the Plan; no such obligation
of the Company shall be deemed to be secured by any pledge or other encumbrance
on any property of the Company and nothing contained herein shall give any
Participant or transferee any rights that are greater than those of a general
creditor of the Company.  Neither the Company nor the Administrator shall be
required to give any security or bond for the performance of any obligation
which may be created by this Plan.

 

32.      Tax Withholding.

 

Each Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, any federal, state, local or foreign taxes
of any kind required by law to be withheld with respect to any Award under the
Plan no later than the date as of which any amount under such Award first
becomes includible in the gross income of the Participant for any tax purposes
with respect to which the Company has a tax withholding obligation.  Unless
otherwise determined by the Company, withholding obligations may be settled with
Shares, including Shares that are part of the Award that gives rise to the
withholding requirement; provided, however, that not more than the legally
required minimum withholding may be settled with Shares.  The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and
the Company and its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any vested Shares or any other payment due
to the Participant at that time or at any future time.  The Administrator may
establish such procedures as it deems appropriate, including making irrevocable
elections, for the settlement of withholding obligations with Shares.

 

33.      Cancellation of Award; Forfeiture of Gain; Clawback Policy.

 

Notwithstanding anything to the contrary contained herein, an Award Agreement
may provide that the Award will be cancelled and the Participant will forfeit
the Shares or cash received or payable on the vesting or exercise of the Award,
and that the amount of any proceeds of the sale or gain realized on the vesting
or exercise of the Award must be repaid to the Company, under such conditions as
may be required by Applicable Law or established by the Administrator in its
sole discretion.  Without limiting the foregoing, and without regard to the
terms of any Award Agreement the Company may cancel any Award, require
reimbursement of any Award by a Participant, and effect any other right of
recoupment of equity or other compensation provided under the Plan in accordance
with any Company policies that may be adopted or modified from time to time (the
“Clawback Policy”).  In addition, a Participant may be required to repay to the
Company previously paid compensation, whether provided pursuant to the Plan or
an Award Agreement, in accordance with the Clawback Policy.  By accepting an
Award, a Participant is agreeing to be bound by the Clawback Policy, as in
effect or as may be adopted or amended from time to time by the Company in its
discretion.

 

34.      Section 16 of the Exchange Act.

 

The Company intends that the Plan satisfy, and be interpreted in a manner that
satisfies, the applicable requirements of Rule 16b-3 under Section 16 of the
Exchange Act so that Participant will be entitled to the benefit of Rule 16b-3,
or any other rule promulgated under Section 16, and will not be subject to
short-swing liability under Section 16.  Accordingly, if the operation of any
provision of the Plan would conflict with the intent expressed in this Section
34, such provision to the extent possible shall be interpreted or deemed amended
so as to avoid such conflict.

 

  30

 

 

Exhibit A

 

Definition of “Sale Event”

 

“Sale Event” means one of the following events occurring afterthe effective date
of the Plan:

 

(1)        any one person, or group of owners of another corporation who acting
together through a merger, consolidation, purchase, acquisition of stock or the
like (a “Group”), acquires ownership of stock of the Company (or other voting
securities of the Company then outstanding) that, together with the Company
stock (or other voting securities of the Company then outstanding) held by such
person or Group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company (or other voting
securities of the Company then outstanding).  However, if such person or Group
is considered to own more than fifty percent (50%) of the total fair market
value or total voting power of the stock of the Company (or other voting
securities of the Company then outstanding), the acquisition of additional
Company stock (or other voting securities of the Company then outstanding) by
the same person or Group shall not be considered to cause a Sale Event;

 

(2)        any one person or Group acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Company (or other voting securities
of the Company then outstanding) possessing thirty percent (30%) or more of the
total voting power of the stock of the Company (or other voting securities of
the Company then outstanding) where such person or Group is not merely acquiring
additional control of the Company;

 

(3)        a majority of the members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board prior to the date of the appointment or
election (the “Incumbent Board”), but excluding, for purposes of determining
whether a majority of the Incumbent Board has endorsed any candidate for
election to the Board, any individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person or Group other than the Board;
or

 

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(4)        any one person or Group acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or Group) assets from the Company that have a total gross fair market
value equal to or more than forty percent (40%) of the total fair market value
of all assets of the Company immediately prior to such acquisition or
acquisitions.  For this purpose, gross fair market value means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.  A transfer of
assets by the Company will not result in a Sale Event if the assets are
transferred to:

 

(i)         a stockholder of the Company (immediately before the asset transfer)
in exchange for or with respect to its stock;

 

(ii)        an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company immediately
after the transfer of assets;

 

(iii)       a person or Group that owns, directly or indirectly, fifty percent
(50%) or more of the total value or voting power of all the outstanding stock of
the Company; or

 

(iv)       an entity, at least fifty percent (50%) of the total value or voting
power of which is owned directly or indirectly, by a person described in
subparagraph (1), above; or

 

(5)        Shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company. 

 

However, no Sale Event shall be deemed to have occurred with respect to a
Participant by reason of (I) any event involving a transaction in which the
Participant or a group of persons or entities with which the Participant acts in
concert, acquires, directly or indirectly, more than thirty percent (30%) of the
common stock or the business or assets of the Company; or (II) any event
involving or arising out of a proceeding under Title 11 of the United States
Code (or the provisions of any future United States bankruptcy law), an
assignment for the benefit of creditors or an insolvency proceeding under state
or local law.

 

Notwithstanding the foregoing, if any payment or distribution event applicable
to an Award is subject to the requirements of Section 409A(a)(2)(A) of the Code,
the determination of the occurrence of a Sale Event shall be governed by
applicable provisions of Section 409A(a)(2)(A) of the Code for purposes of
determining whether such payment or distribution may then occur.

 

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