EXHIBIT 10.1

YATINOO, INC. 2008 EMPLOYEE STOCK
INCENTIVE PLAN
(Approved and adopted by the Board of Directors on November 13, 2008)
 
STATEMENT OF PURPOSE
 
The Yatinoo, Inc. 2008 Employee Stock Incentive Plan is intended to afford an
incentive to employees, corporate officers, directors, consultants and other key
persons employed or retained by YATINOO, INC. (the “Company”) and its
subsidiaries and affiliates to acquire a proprietary interest in the Company and
to enable the Company and its subsidiaries and affiliates to attract and retain
such persons.
 
DEFINITIONS
 
For purposes of the Plan, the following terms are defined as set forth below:
 
a.    “10% Holder” shall mean any person who, for purposes of Section 422 of the
Code owns more than 10% of the total combined voting power of all classes of
stock of the employer corporation or of any Subsidiary.
 
b.    "Award" means a Stock Option, Stock Appreciation Right or Restricted
Stock.
 
c.    "Board" means the Board of Directors of the Company.
 
d.    "Change of Control" has the meaning set forth in Section 4.3.1.
 
e.    "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
 
f.    "Committee" means the Committee referred to in Section 3.1.
 
g.    "Common Stock" means common stock, par value $.001 per share, of the
Company.
 
h.    "Company" means Yatinoo, Inc., a Delaware corporation.
 
i.    "Covered Employee" means a participant designated prior to the grant of
Restricted Stock by the Committee who is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which Restricted
Stock is expected to be taxable to such participant.
 
j.    "Eligible Persons” means the Eligible Persons referred to in Section 2 of
the Plan.
 
k.    "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
 
l.    "Fair Market Value" means, as of any given date, (i) if the Common Stock
is listed or admitted to trade on a national securities exchange, the closing
price of the Common Stock on the Composite Tape, as published in The Wall Street
Journal, of the principal national securities exchange on which the Common Stock
is so listed or admitted to trade, on such date, or, if there
 
 
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is no trading of the Common Stock on such date, then the closing price of the
Common Stock as quoted on such Composite Tape on the next preceding date on
which there was trading in such shares; (ii) if the Common Stock is not listed
or admitted to trade on a national securities exchange, the mean between the
closing bid and asked price for the Common Stock on such date, as furnished by
the Over-The-Counter Bulletin Board (the “OTCBB”) maintained by FINRA; (iii) if
the Common Stock is not listed or admitted to trade on a national securities
exchange and closing bid and asked prices are not furnished by the OTCBB, the
mean between the closing bid and asked price for the Common Stock on such date,
as furnished by the Pink Sheets, LLC (“Pink Sheets”) or similar organization;
and (iv) if the stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not
furnished by the OTCBB, Pink Sheets or a similar organization, the value
established in good faith by the Committee taking into account such facts and
circumstances deemed to be material by the Committee to the value of the Common
Stock in the hands of the Eligible Person.
 
Notwithstanding the foregoing, for purposes of granted Non-Qualified Stock
Options or Stock Appreciation Rights, Fair Market Value of Common Stock shall be
determined in accordance with the requirements of Code Section 409A, and for
purposes of granting Incentive Stock Options, Fair Market Value of Common Stock
shall be determined in accordance with the requirements of Code Section 422.
 
m.    "Incentive Stock Option" means any Stock Option designated as, and
intended to qualify as, an "incentive stock option" within the meaning of
Section 422 of the Code.
 
n.    "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
 
o.    "Performance Goals" means the performance goals established by the
Committee in connection with the grant of Restricted Stock.
 
p.    "Plan" means the Yatinoo, Inc. 2008 Employee Stock Incentive Plan, as set
forth herein and as hereinafter amended from time to time.
 
q.    "Qualified Performance-Based Award" means an Award of Restricted Stock
designated as such by the Committee at the time of grant, based upon a
determination that (i) the recipient is or may be a "covered employee" within
the meaning of Section 162(m)(3) of the Code in the year in which the Company
would expect to be able to claim a tax deduction with respect to such Restricted
Stock and (ii) the Committee wishes such Award to qualify for the Section 162(m)
Exemption.
 
r.    "Restricted Stock" means an Award granted under Section 6.
 
s.    "Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.
 
t.    "Stock Appreciation Right" means an Award granted under Section 5.
 
u.    "Stock Option” means an Award granted under Section 4.
 

 
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v.    “Subsidiary” shall have the meaning given to the term "Subsidiary
corporation" in Section 424(f) of the Code.
 
w.    "Termination of Employment" means the termination of the participant's
employment with the Company and any of its Subsidiaries. A participant employed
by a Subsidiary shall also be deemed to incur a Termination of Employment if the
Subsidiary ceases to be such a Subsidiary, and the participant does not
immediately thereafter become an employee of the Company or another Subsidiary.
Temporary absences from employment because of illness, vacation or leave of
absence and transfers among the Company and its Subsidiaries shall not be
considered Terminations of Employment. If so determined by the Committee, a
participant shall be deemed not to have incurred a Termination of Employment if
the participant enters into a contract with the Company or a Subsidiary
providing for the rendering by the participant of consulting services to the
Company or such Subsidiary on terms approved by the Committee; however,
Termination of Employment of the participant shall occur when such contract
ceases to be in effect.
 
In addition, certain other terms used herein have definitions given to them in
the first place in which they are used.
 
STATEMENT OF THE PLAN
 
1.
Shares Subject to the Plan.

 
Subject to the provisions of Section 7, the maximum number of shares which may
be issued under the Plan shall be five million (5,000,000) shares of Common
Stock, par value $.001 per share, of the Company (the "Shares”). The Company
shall at all times while the Plan is in effect reserve such number of shares of
Common Stock as will be sufficient to satisfy the requirements of outstanding
Awards granted under the Plan. The Shares subject to the Plan shall be either
authorized and unissued shares or treasury shares of Common Stock. If any Award
is forfeited, or if any Stock Option (and related Stock Appreciation Right, if
any) terminates, expires or lapses for any reason without having been exercised
in full or shall cease for any reason to be exercisable in whole or in part, or
if any Stock Appreciation Right is exercised for cash, the unpurchased Shares
subject to such Awards shall again be available for distribution under the Plan.
No more than 40% of the shares of Common Stock available for grant under the
Plan as of the first day of any calendar year in which the Plan is in effect
shall be utilized in that fiscal year for the grant of Awards in the form of
Restricted Stock.
 
2.
Eligibility.

 
Awards may be granted only to employees, salaried officers and other key persons
employed or retained by the Company or its Subsidiaries, and any non-employee
director, consultant, vendor or other individual having a business relationship
with the Company or its Subsidiaries to the extent not prohibited by law
("Eligible Persons"). As used in this Plan, the term "Subsidiaries" shall
include Subsidiaries of a Subsidiary.
 

 
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3.
Administration of the Plan.

 
3.1.    The Plan shall be administered by either the full Board of Directors or
by a committee (either the full Board or the committee is referred to
hereinafter as the "Committee") composed of at least two non-employee directors,
each of whom shall be a disinterested person, as defined by Rule 16b-3(c)(2)(i)
under the Exchange Act, which Committee shall be appointed by and serve at the
pleasure of the Board. Within the limits of the express provisions of the Plan,
the Committee shall have the authority to determine, in its absolute discretion,
(i) the individuals to whom, and the time or times at which Awards shall be
granted, (ii) whether and to what extent Incentive Stock Options, Non-Qualified
Stock Options, Stock Appreciation Rights and Restricted Stock or any combination
thereof are to be granted hereunder, (iii) the number of Shares to be covered by
each Award granted hereunder, (iv) subject to Sections 4.7 and 6.3(G), the terms
and conditions of any Award granted hereunder including, but not limited to, the
option price, any vesting condition, restriction or limitation (which may be
related to the performance of the participant, the Company or any Subsidiary),
and any vesting, acceleration, forfeiture or waiver regarding any Award and the
shares of Common Stock relating thereto, (v) modify, amend or adjust the terms
and conditions of any Award, at any time or from time to time, including but not
limited to, Performance Goals; provided, however, that the Committee may not
adjust upwards the amount payable with respect to Qualified Performance-Based
Awards or waive or alter the Performance Goals associated therewith or cause
such Restricted Stock to vest earlier than permitted by Section 6.3(G); (vi) to
what extent and under what circumstances Common Stock and other amounts payable
with respect to an Award shall be deferred; and (vii) under what circumstances
an Award may be settled in cash or Common Stock under Sections 6.3(B) and 10.2,
provided, however, that the Committee shall not have such power to the extent
that the mere possession (as opposed to the exercise) of such power would result
in adverse tax consequences to any participant under Code Section 409A. In
making such determinations, the Committee may take into account such factors as
the Committee, in its absolute discretion, shall deem relevant. Subject to the
express provisions of the Plan, the Committee shall also have the authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective option
instruments or agreements (which need not be identical) and to make all other
determinations and take all other actions necessary or advisable for the
administration of the Plan. The Committee's determinations on the matters
referred to in this Section 3.1 shall be conclusive. Any determination by a
majority of the members of the Committee shall be deemed to have been made by
the whole Committee.
 
3.2.    Each member of the Committee shall be indemnified and held harmless by
the Company against any cost or expense (including counsel fees) reasonably
incurred by such member, or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan unless arising out of such member’s own fraud or
bad faith, to the extent permitted by applicable law. Such indemnification shall
be in addition to any rights of indemnification the members may have as
directors or otherwise under the By-laws of the Company, any agreement or vote
of stockholders or disinterested directors or otherwise.
 

 
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4.
Stock Options.

 
Stock Options may be granted alone or in addition to other Awards. Stock Options
granted hereunder may be either Incentive Stock Options or Non-Qualified Stock
Options. Any Stock Option granted hereunder shall be in such form as the
Committee may from time to time approve. Stock Options granted under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions as the Committee shall deem desirable:
 
4.1.    Stock Option Exercise Price. Subject to adjustments in accordance with
Sections 7 and 8, the exercise price of each Stock Option granted under the Plan
shall be set forth in the applicable Option Agreement, but in no event shall
such price be less than the Fair Market Value of the Shares subject to the Stock
Option on the date the Stock Option is granted. The exercise price for Incentive
Stock Options shall not be less than 100% of the Fair Market Value per share of
the Common Stock at the time the Stock Option is granted, nor less than 110% of
such Fair Market Value in the case of an Incentive Stock Option granted to an
individual who, at the time the option is granted, is a 10% Holder. The Fair
Market Value of the Shares shall be determined in good faith by the Committee,
with the approval of the Board, in accordance with the Plan and in accordance
with the requirements of Code Sections 409A and 422.
 
4.2.    Maximum Stock Option Grant. With respect to Stock Options which are
intended to qualify as Incentive Stock Options, the aggregate Fair Market Value
(determined as of the time the Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options granted to any participant (whether
under this Plan or under any other stock option plan of the Company or its
Subsidiaries) become exercisable for the first time in any calendar year, may
not exceed $100,000. The number of Shares for which any participant, in any
calendar year, may be granted Stock Options under the Plan not treated as
Incentive Stock Options shall be limited to not more than 125.  Notwithstanding
the forgoing, nothing contained in the Plan shall be construed to prohibit the
grant of Stock Options under the Plan to an Eligible Person by reason of such
person holding Stock Options to purchase shares of Common Stock or any other
securities of the Company granted otherwise than under the Plan.
 
4.3.    Exercise of Stock Options.
 
4.3.1.    Subject to the provisions in this Section 4.3 and in Section 9, Stock
Options may be exercised in whole or in part. The Committee, in its absolute
discretion, shall determine the time or times at which any Stock Option granted
under the Plan may be exercised; provided, however, that each Stock Option:
 
(A)    shall be exercisable by a participant only if such participant was an
Eligible Person (and in the case of an Incentive Stock Option, was an employee
or salaried officer of the Company or any of its Subsidiaries) at all times
beginning from the date of the grant of the Incentive Stock Option to a date not
more than three months (except as otherwise provided in Section 8) before
exercise of such Stock Option;
 
(B)    may not be exercised prior to the expiration of at least one year from
the date of grant except in the case of the death or disability of the
participant or otherwise with the
 

 
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approval of the Committee or the Board of Directors or, if the option agreement
evidencing such Stock Option so provides, upon a "Change of Control" as defined
below;
 
(C)    shall expire no later than the expiration of ten years (five years in the
case of an Incentive Stock Option granted to a 10% Holder) from the date of its
grant; and
 
(D)    shall not be exercisable by a participant until such participant executes
and delivers a written representation to the effect that such participant is
acquiring the Common Stock for investment and not with the intent of
distributing the same (unless such Common Stock shall be appropriately
registered under the Securities Act of 1933, as amended, or exempt from
registration thereunder).
 
A "Change of Control" as used in this Section 4.3 shall mean any of the
following:
 
(i)    any consolidation, merger or sale of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company’s stock would be converted into cash, securities or other property; or
 
(ii)    the stockholders of the Company approve an agreement for the sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or
 
(iii)    any approval by the stockholders of the Company of any plan or proposal
for the liquidation or dissolution of the Company; or
 
(iv)    the acquisition of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act of an aggregate of 25% or more of the voting power
of the Company’s outstanding voting securities by any single person or group (as
such term is used in Rule 13d-5 under the Exchange Act), unless such acquisition
was approved by the Board of Directors prior to the consummation thereof); or
 
(v)    the appointment of a trustee in a Chapter 11 bankruptcy proceeding
involving the Company or the conversion of such a proceeding into a case under
Chapter 7.
 
As a condition of the grant of a Stock Option, the Committee, in its absolute
discretion, may require an Eligible Person to enter into an employment agreement
with the Company or any Subsidiary or affiliate of the Company covering a period
of at least one year following the grant, and if the grant specifically
requires, compliance with all terms and conditions of any such employment
agreement shall be a condition to the exercise by the participant of such
participant’s Stock Option (provided, however, that such compliance may be
waived by the Committee in its absolute discretion).
 
4.3.2.    Stock Options granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its principal offices (to the
attention of the Secretary) of written notice of the number of Shares with
respect to which the Stock Option is being exercised, accompanied by payment in
full of the Stock Option exercise price of such Shares. The exercise price shall
be payable in cash by a certified or bank check or such other instrument as the
Company may accept; provided, however, that in lieu of payment in cash, a
participant may, with
 

 
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the approval of the Company's Board and on the recommendation of the Committee,
pay for all or part of the Shares to be purchased upon exercise of such
participant’s Stock Option by:
 
(A)    tendering to the Company shares of the Company's Common Stock owned by
such participant and having a Fair Market Value (as determined pursuant to
Section 4.1) equal to the exercise price (or the balance thereof) applicable to
such participant's Stock Option; or
 
(B)    complying with any exercise and sell (or cashless exercise) program which
the Company has established with a broker-dealer.
 
4.3.3.    The holder of an option shall have none of the rights of a stockholder
with respect to the Shares covered by such holder’s option until such Shares
shall be issued to such holder upon the exercise of such holder’s option.
 
4.4.    Termination of Service. In the event that the service of an individual
to whom a Stock Option has been granted under the Plan shall terminate
(otherwise than by reason of such individual’s death or total disability, or for
cause), such option may be exercised (if and to the extent that such individual
was entitled to do so at the date of termination of such individual’s service)
at any time within three months after such termination, but in no event after
the expiration of the term of the option. No option granted under the Plan may
be exercised by a participant following termination of such participant's
employment for cause. "Termination for cause" shall mean dismissal for
dishonesty, conviction or confession of a crime punishable by law (except minor
violations), fraud, misconduct or disclosure of confidential information. If the
service of an individual to whom a Stock Option has been granted under the Plan
shall be suspended pending an investigation of whether or not the individual
shall be terminated for cause, all of the individuals rights under any option
granted hereunder likewise shall be suspended during the period of
investigation.
 
4.5.    Death or Total Disability of a Stock Option Holder. In the event of the
death or total disability of an individual to whom a Stock Option has been
granted under the Plan (i) while serving as an Eligible Person; or (ii) within
three months after the termination of such service, other than for cause, such
option may be exercised (if and to the extent that the deceased individual was
entitled to do so at the date of such individual’s death or total disability) by
a legatee or legatees of such participant under such individual's last will and
testament or by such individual’s personal representatives or distributees, at
any time within twelve months after such individual’s death or total disability,
but in no event after the expiration of the term of the option.
 
As used in this Plan, the term "total disability" refers to a mental or physical
impairment of the individual which has lasted or is expected to last for a
continuous period of twelve months or more and which causes the individual to be
unable, in the opinion of the Company and two (if more than one is required by
the Company in its sole discretion) independent physicians, to perform such
individual’s duties for the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and the two (if more than one is required by the Company in
its sole discretion) independent physicians have furnished their opinion of
total disability to the Committee.
 

 
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4.6.    Non-transferability of Stock Options. A Stock Option shall not be
transferable otherwise than by will or the laws of descent and distribution and
is exercisable during the lifetime of the Eligible Person only by such Eligible
Person or such Eligible Person’s guardian or legal representative.
Notwithstanding the foregoing, the Committee shall have discretionary authority
to grant Stock Options which will be transferable to members of a participant's
immediate family, including trusts for the benefit of such family members and
partnerships in which such family members are the only partners. A transferred
option would be subject to all of the same terms and conditions as if such
option had not been transferred. Upon any attempt to transfer a Stock Option
granted under this Plan otherwise than as permitted hereunder, or upon the levy
of attachment or similar process upon such option, such option shall
automatically become null and void and of no further force and effect.
 
4.7.    Evidence of Stock Option Grant. Each option granted pursuant to the Plan
shall be evidenced by an agreement (the "Option Agreement") which shall clearly
identify the status of the Stock Options granted thereunder (i.e., whether an
Incentive Stock Option or Non-Qualified Stock Option). The Option Agreement
shall comply in all respects with the terms and conditions of the Plan and may
contain such additional provisions, including, without limitation, restrictions
upon the exercise of the option, as the Committee shall deem advisable.
 
4.8.    Deferral of Stock Option Shares. The Committee may from time to time
establish procedures pursuant to which a participant may elect to defer, until a
time or times later than the exercise of a Stock Option, receipt of all or a
portion of the shares of Common Stock subject to such Stock Option and/or to
receive cash at such later time or times in lieu of such deferred shares, all on
such terms and conditions as the Committee shall determine. If any such
deferrals are permitted, then notwithstanding Sections 4.3.1 and 4.3.2. above, a
participant who elects such deferral shall not have any rights as a stockholder
with respect to such deferred shares unless and until shares are actually
delivered to the participant with respect thereto, except to the extent
otherwise determined by the Committee. Notwithstanding anything herein to the
contrary, in no event will any deferral of the delivery of shares of Common
Stock or any other payment with respect to any Award be allowed if the Committee
determines, in its sole discretion, that the deferral would result in the
imposition of additional tax under Code Section 409A(a)(1)(B).
 
5.
Stock Appreciation Rights

 
5.1.    Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
 
A Stock Appreciation Right may be exercised by a participant in accordance with
Section 5.2 by surrendering the applicable portion of the related Stock Option
in accordance with procedures established by the Committee. Upon such exercise
and surrender, the participant shall be entitled to receive an amount determined
in the manner prescribed in Section 5.2. Stock Options which have been so
surrendered shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.
 

 
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5.2.    Terms and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions as shall be determined by the Committee, including the
following:
 
(A)    Stock Appreciation Rights shall be exercisable only at such time or times
and to the extent that the Stock Options to which they relate are exercisable in
accordance with the provisions of Section 4 and this Section 5.
 
(B)    Upon the exercise of a Stock Appreciation Right, a participant shall be
entitled to receive an amount in cash, shares of Common Stock or both, in value
equal to the excess of the Fair Market Value of one share of Common Stock over
the option price per share specified in the related Stock Option multiplied by
the number of shares in respect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to determine the form of
payment.
 
(C)    Stock Appreciation Rights shall be transferable only to permitted
transferees of the underlying Stock Option in accordance with Section 4.6.
 
(D)    Upon the exercise of a Stock Appreciation Right, the Stock Option or part
thereof to which such Stock Appreciation Right is related shall be deemed to
have been exercised for the purpose of the limitation set forth in Section 1 on
the number of shares of Common Stock to be issued under the Plan, but only to
the extent of the number of shares covered by the Stock Appreciation Right at
the time of exercise based on the value of the Stock Appreciation Right at such
time.
 
6.
Restricted Stock

 
6.1.    Administration. Shares of Restricted Stock may be awarded either alone
or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Persons to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
Eligible Person, the conditions for vesting, the time or times within which such
Awards may be subject to forfeiture and any other terms and conditions of the
Awards, in addition to those contained in Section 6.3.
 
6.2.    Awards and Certificates. Shares of Restricted Stock shall be evidenced
in such manner as the Committee may deem appropriate, including book-entry
registration or issuance of one or more stock certificates. Any certificate
issued in respect of shares of Restricted Stock shall be registered in the name
of such Eligible Person 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
Yatinoo, Inc. 2008 Employee Stock Incentive Plan and a Restricted Stock
Agreement. Copies of such Plan and Agreement are on file at the offices of
Yatinoo, Inc., 510 Turnpike Street, North Andover, MA 01845."
 
The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of
 

 
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Restricted Stock, the participant shall have delivered a stock power, endorsed
in blank, relating to the Common Stock covered by such Award.
 
6.3.    Terms and Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:
 
(A)    The Committee may, prior to or at the time of grant, designate an Award
of Restricted Stock as a Qualified Performance-Based Award, in which event it
shall condition the grant or vesting, as applicable, of such Restricted Stock
upon the attainment of Performance Goals. If the Committee does not designate an
Award of Restricted Stock as a Qualified Performance-Based Award, it may also
condition the grant or vesting thereof upon the attainment of Performance Goals.
Regardless of whether an Award of Restricted Stock is a Qualified
Performance-Based Award, the Committee may also condition the grant or vesting
thereof upon the continued service of the participant. The conditions for grant
or vesting and the other provisions of Restricted Stock Awards (including
without limitation any applicable Performance Goals) need not be the same with
respect to each recipient. The Committee may at any time, in its sole
discretion, accelerate or waive, in whole or in part, any of the foregoing
restrictions; provided, however, that in the case of Restricted Stock that is a
Qualified Performance-Based Award, the applicable Performance Goals have been
satisfied and further, provided, however, that the Committee shall not have such
power to the extent that the mere possession (as opposed to the exercise) of
such power would result in adverse tax consequences to any participant under
Code Section 409A.
 
(B)    Subject to the provisions of the Plan and the Restricted Stock Agreement
referred to in Section 6.3(F), during the period, if any, set by the Committee,
commencing with the date of such Award for which such participant's continued
service is required (the "Restriction Period"), and until the later of (i) the
expiration of the Restriction Period and (ii) the date the applicable
Performance Goals (if any) are satisfied, the participant shall not be permitted
to sell, assign, transfer, pledge or otherwise encumber shares of Restricted
Stock; provided, however, that the foregoing shall not prevent a participant
from pledging Restricted Stock as security for a loan, the sole purpose of which
is to provide funds to pay the option price for Stock Options.
 
(C)    Except as provided in this Section 6.3(C) and Sections 6.3(A) and 6.3(B)
and the Restricted Stock Agreement, the participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a stockholder of the
Company holding the class or series of Common Stock that is the subject of the
Restricted Stock, including, if applicable, the right to vote the shares and the
right to receive any dividends. If so determined by the Committee in the
applicable Restricted Stock Agreement, (i) cash dividends on the class or series
of Common Stock that is the subject of the Restricted Stock Award shall be
automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, or held subject to
meeting Performance Goals applicable only to dividends; and (ii) dividends
payable in Common Stock shall be paid in the form of Restricted Stock of the
same class as the Common Stock with which such dividend was paid, held subject
to the vesting of the underlying Restricted Stock, or held subject to meeting
Performance Goals applicable only to dividends.
 

 
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(D)    Except to the extent otherwise provided in the applicable Restricted
Stock Agreement or Sections 6.3(A), 6.3(B), 6.3(E) or 8.1(D), upon a
participant's Termination of Employment for any reason during the Restriction
Period or before the applicable Performance Goals are satisfied, all shares
still subject to restriction shall be forfeited by the participant.
 
(E)    Except to the extent otherwise provided in Section 8.1(D), in the event
that a participant retires or such participant's employment is involuntarily
terminated, the Committee shall have the discretion to waive, in whole or in
part, any or all remaining restrictions (other than, in the case of Restricted
Stock with respect to which a participant is a Covered Employee, satisfaction of
the applicable Performance Goals unless the Participant's employment is
terminated by reason of death or Disability) with respect to any or all of such
participant's shares of Restricted Stock.
 
(F)    If and when any applicable Performance Goals are satisfied and the
Restriction Period expires without a prior forfeiture of the Restricted Stock,
unlegended certificates for such shares shall be delivered to the participant
upon surrender of the legended certificates.
 
(G)    Each Award shall be confirmed by, and be subject to, the terms of a
Restricted Stock Agreement.
 
(H)    Notwithstanding the foregoing, but subject to the provisions of Section 8
hereof, no Award in the form of Restricted Stock, the vesting of which is
conditioned only upon the continued service of the participant, shall vest
earlier than the first, second and third anniversaries of the date of grant
thereof, on each of which dates a maximum of one-third of the shares of Common
Stock subject to the Award may vest, and no award in the form of Restricted
Stock, the vesting of which is conditioned upon the attainment of a specified
Performance Goal or Goals, shall vest earlier than the first anniversary of the
date of grant thereof.
 
7.
Adjustments Upon Change in Capitalization.

 
In the event of changes in the outstanding shares of Common Stock of the Company
by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations or liquidations, the number and class of shares
available under the Plan, the number and class of Shares or the amount of cash
or other assets or securities available upon the exercise of any Award granted
hereunder and the number of Shares to be issued pursuant to an Award shall be
correspondingly adjusted, to the end that the participant's proportionate
interest in the Company, any successor thereto or in the cash, assets or other
securities into which Shares are converted or exchanged shall be maintained to
the same extent, as near as may be practicable, as immediately before the
occurrence of any such event. All references in this Plan to "Common Stock" from
and after the occurrence of such event shall be deemed for all purposes of this
Plan to refer to such other class of shares or securities issuable upon the
exercise or payment of Awards granted pursuant hereto.
 
8.
Material Transaction, Liquidation or Dissolution of the Company.

 
8.1.    In the event of a reorganization, merger or consolidation in which the
Company is not the surviving corporation, or a sale of all or substantially all
of the assets of the Company to
 

 
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another person or entity (each a "Material Transaction"), unless otherwise
provided in the Option Agreement, the Committee shall:
 
(A)    provide for the assumption of outstanding Awards, or the substitution of
outstanding Awards for new Awards, for equity securities of the surviving,
successor or purchasing corporation, or a parent or Subsidiary thereof, with
appropriate adjustments as to the number, kind, vesting and prices of Shares
subject to such Awards, as determined in good faith by the Board in its sole
discretion, or
 
(B)    provide that the vesting of each outstanding Stock Option and Stock
Appreciation Right shall automatically be accelerated so that 100% of the
unvested Shares covered by such Award shall be fully vested upon the
consummation of the Material Transaction, and
 
(i)    provide notice to Participants that all outstanding Stock Options must be
exercised on or before a specified date (which date shall be at least ten days
from the date of notice), after which the Stock Options and Stock Appreciation
Rights shall terminate; or
 
(ii)    terminate each outstanding Stock Option and Stock Appreciation Right in
its entirety and exchange such Award for a payment of cash, securities and/or
property equal to the Fair Market Value of the Common Stock into which such
Award convertible, less the exercise price for such Award.
 
(C)    provide that the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and become fully vested and transferable, and
 
(D)    the Committee may also make additional adjustments and/or settlements of
outstanding Awards as it deems appropriate and consistent with the Plan's
purposes.
 
Notwithstanding the foregoing, for purposes of Sections 8.1(A), 8.1(B), 8.1(C)
and 8.1(D), the Committee shall not have any of the foregoing powers to the
extent that the mere possession (as opposed to the exercise) of such power would
result in adverse tax consequences to any participant under Code Section 409A.
 
8.2.    In the event of the dissolution or liquidation the Company, whether
voluntary or otherwise, that is not a Material Transaction, all outstanding
unexercised Stock Options and Stock Appreciation Rights must be exercised, if at
all, within the ninety day period commencing on the date specified in Section
8.3 below. All such Awards which become exercisable during the ninety day period
commencing on the date specified in Section 8.3 below, shall terminate at the
end of such ninety day period to the extent not exercised prior thereto.
 
8.3.    The date specified in this Section 8.3 is the date of the earliest to
occur of the following events:
 
(i)    the entry, in a court having jurisdiction, of an order that the Company
be liquidated or dissolved;
 

 
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(ii)    adoption by the stockholders of the Company of a resolution resolving
that the Company be liquidated or dissolved voluntarily; or
 
(iii)    adoption by the stockholders of the Company of a resolution to the
effect that the Company cannot, by reason of its liabilities, continue its
business and that it is advisable to liquidate or dissolve the Company.
Notwithstanding anything herein to the contrary, in no event may any option
granted hereunder be exercised after the expiration of the term of such option.
 
9.
Further Conditions.

 
Each Award granted under the Plan shall be subject to the requirement that if at
any time the Committee shall determine, in its absolute discretion, that it is
necessary or desirable as a condition of, or in connection with the grant and/or
issuance of Award or the exercise thereof, to effect or obtain, as the case may
be:
 
(i)    the listing, registration or qualification of the Shares subject to such
Award upon any securities exchange or under any state or federal law;
 
(ii)    the consent or approval of any governmental body;
 
(iii)    any investment representation or agreement by the individual desiring
to be issued or to exercise an Award granted under the Plan; or
 
(iv)    an opinion of counsel for the Company,
 
then, no Award may be issued or exercised, as the case may be, in whole or in
part unless such listing, registration, qualification, consent, approval,
investment or representation agreement or opinion shall have been effected or
obtained, as the case may be, free of any condition not acceptable to the Board
or the Committee.
 
10.
Exchange and Buyout of Awards.

 
10.1.    The Committee may, at any time or from time to time, authorize the
Company, with the consent of the respective participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards.
 
10.2.    The Committee may, at any time or from time to time, authorize the
Company to buy from a participant an Award previously granted with payment in
cash, Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the participant may agree.
 
11.
Termination, Modification and Amendment.

 
11.1.    The Plan (but not Awards previously granted under the Plan) shall
terminate on, and no Awards shall be granted after, the tenth anniversary of its
adoption by the Board; provided that the Board may at any time terminate the
Plan prior thereto upon the adoption of a resolution of the Board.
 

 
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11.2.    The Board shall have complete power and authority to modify or amend
the Plan in whole or in part and from time to time in such respects as it shall
deem advisable; provided, however, that the Board shall not, without the
approval of the votes represented by a majority of the outstanding Common Stock
of the Company present or represented and entitled to vote at a meeting of
stockholders duly held in accordance with the applicable laws of the Company's
jurisdiction of incorporation or by the written consent of stockholders owning
stock representing a majority of the votes of the Company's outstanding stock
entitled to vote:
 
(i)    increase the number of Shares available for the grant of Awards under
Section 1 of the Plan (except as provided in Section 7);
 
(ii)    extend the term of the Plan or the period during which Awards may be
granted or exercised;
 
(iii)    reduce the Stock Option price below 100% (110% in the case of an
Incentive Stock Option granted to a 10% Holder) of the Fair Market Value of the
Shares issuable upon exercise of Stock Options at the time of the granting
thereof, other than to change the manner of determining the Fair Market Value
thereof;
 
(iv)    alter the maximum number of Shares available for the grant of Awards in
the form of Incentive Stock Options and Restricted Stock;
 
(v)    materially increase the benefits accruing to participants under the Plan;
 
(vi)    modify the requirements as to eligibility for participation in the Plan;
 
(vii)    modify the nature of the Awards which may be granted under the Plan;
 
(viii)    with respect to Stock Options which are Incentive Stock Options, amend
the Plan in any respect which would cause such Stock Options to no longer
qualify for Incentive Stock Option treatment pursuant to the Code; and
 
(ix)    alter the provisions set forth in Section 6.3(H) with respect to minimum
vesting schedules relating to Awards in the form of Restricted Stock.
 
No termination or amendment of the Plan shall, without the consent of the
individual participant, adversely affect the rights of such participant under an
Award theretofore granted to such participant.
 
12.
Taxes.

 
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
Awards granted under the Plan. The Company may further require notification from
the participants upon any disposition of Common Stock acquired pursuant to the
Awards granted hereunder.
 
13.
Effectiveness Of The Plan.

 

 
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The Plan shall become effective immediately upon its approval and adoption by
the Board, subject to approval by a majority of the votes of the outstanding
shares of capital stock of the stockholders of the Company cast at any duly
called annual or special meeting of the Company's stockholders held within one
year from the date of Board adoption and approval.
 
14.
Designation of Beneficiary by Participant.

 
A participant may designate one or more beneficiaries to receive any rights and
payments to which such participant may be entitled in respect of any option
granted under the Plan in the event of such participant’s death. Such
designation shall be on a written form acceptable to and filed with the
Committee. The Committee shall have the right to review and approve beneficiary
designations. A participant may change the participant’s beneficiary(ies) from
time to time in the same manner as the original designation, unless such
participant has made an irrevocable designation. Any designation of beneficiary
under the Plan (to the extent it is valid and enforceable under applicable law)
shall be controlling over any other disposition, testamentary or otherwise, as
determined by the Committee. If no designated beneficiary survives the
participant and is living on the date on which any right or amount becomes
payable to such participant’s beneficiary(ies), such payment will be made to the
legal representatives of the participant’s estate, and the term “beneficiary” as
used in the Plan shall be deemed to include such person or persons. If there is
any question as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee may determine that the amount in question be paid
to the legal representatives of the estate of the participant, in which event
the Company, the Committee, the Board and the Committee and the members thereof
will have no further liability to any person or entity with respect to such
amount.
 
15.
Certificates.

 
All Shares delivered under this Plan will be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements promulgated
under such laws or any stock exchange or automated quotation system upon which
the Shares may be listed or quoted and each stock certificate evidencing such
Shares and other certificates shall have the appropriately legend.
 
16.
Securities Law and Other Regulatory Compliance.

 
16.1.    The issuance of Awards under the Plan will not be effective unless such
issuance is made in compliance with all applicable federal and state securities
laws, rules and regulations of any governmental body, and the requirements of
any stock exchange or automated quotation system upon which the Shares may then
be listed or quoted, as they are in effect on the date of issuance/grant and
also on the date of exercise or other issuance. Notwithstanding any other
provision in this Plan, the Company will have no obligation to issue or deliver
stock certificates for Shares under this Plan prior to:
 
(i)    obtaining any approvals from governmental agencies that the Committee
determines are necessary or advisable; and/or
 

 
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(ii)    completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Committee determines to be necessary or advisable.
 
16.2.    The Company will be under no obligation to register the Shares under
the Securities Act of 1933, as amended, or to effect compliance with the
registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have no
liability for any inability or failure to do so.
 
17.
No Obligation to Employ.

 
The Plan shall not constitute a contract of employment and nothing in this Plan
shall confer or be deemed to confer on any participant any right to continue in
the employ of, or to continue any other relationship with, the Company or any
Subsidiary or affiliate of the Company or limit in any way the right of the
Company or any Subsidiary or affiliate of the Company to terminate the
participant’s employment or other relationship at any time, with or without
cause.
 
18.
Non-exclusivity of the Plan.

 
Neither the adoption of the Plan by the Board, the submission of the Plan to the
shareholders of the Company for approval, nor any provision of this Plan will be
construed as creating any limitations on the power of the Board or the Committee
to adopt such additional compensation arrangements as the Board may deem
desirable, including, without limitation, the granting of Stock Options
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
 
19.
Miscellaneous Provisions.

 
19.1.    Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among Eligible Persons under the Plan, whether or
not such Eligible Persons are similarly situated.
 
19.2.    No Shares, other Company securities or property, other securities or
property, or other forms of payment shall be issued hereunder with respect to
any option granted under the Plan unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable federal,
state, local and foreign legal, securities exchange and other applicable
requirements.
 
19.3.    It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or inconsistencies
in construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Rule 16b-3.
 
19.4.    The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding the grant of Stock Options
hereunder or any Shares issued pursuant hereto as may be required by Section 13
or 15(d) of the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
 

 
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19.5.    The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and Awards granted under the Plan and any agreements in connection therewith,
shall be governed by the substantive laws, but not the choice of law rules, of
the State of Delaware.
 
 
 
 
 
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