EXHIBIT
10.2

    
 

    MEDGENICS,
INC.


    


    STOCK
INCENTIVE PLAN


    


    Effective
March 31, 2006

    


    Article
I

    Purpose and Adoption of the
Plan

    


    1.01        Purpose. The Medgenics, Inc.
Stock Incentive Plan (the “Incentive Plan”) was adopted by the Company to assist
the Company and its Affiliates in attracting and retaining valued employees,
directors, consultants and advisors; to act as an incentive in motivating
selected employees, directors, consultants and advisors to achieve long-term
corporate objectives; and to allow those employees, directors, consultants and
advisors to share the benefits of future growth in the value of the Company that
they help to create by providing them with the opportunity to acquire shares of
Common Stock.

    


    1.02        Adoption
and Term. The Incentive Plan has
been approved by the Board, to be effective as of March 31, 2006 (the “Effective
Date”). No Awards may be granted under the Incentive Plan after the tenth
anniversary of the Effective Date, or until terminated by action of the Board,
whichever occurs sooner. The Incentive Plan shall remain in effect as long as
any Awards are outstanding hereunder.

    


    Article
II

    Definitions

    


    For the
purposes of the Incentive Plan, capitalized terms shall have the following
meanings:

    


    2.01        Affiliate. “Affiliate” means any
corporation or other entity which would be a subsidiary corporation with respect
to the Company as defined in Section 424(f) of the Code.

    


    2.02        Award. “Award” means any award
of an Option, Stock Appreciation Rights, Restricted Stock, Stock Unit or other
stock-based grant under the Incentive Plan. Any Award under the Incentive Plan
may be granted singularly, in combination with another Award (or Awards), or in
tandem whereby the exercise or vesting of one Award held by a Participant
cancels another Award held by the Participant.

    


    2.03        Award
Agreement. “Award Agreement” means
a written agreement (in whatever medium prescribed by the Committee) between the
Company and a Participant or a written notice from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Incentive Plan. Such document is referred to as an agreement regardless of
whether any Participant signature is required.

    


    2.04        Beneficiary. “Beneficiary” means an
individual, trust, or estate who or which, by a written designation of the
Participant filed with the Company or by operation of law, succeeds to the
rights and obligations of the Participant under the Incentive Plan and an Award
Agreement upon the Participant’s death.



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    2.05        Board. “Board” means the Board
of Directors of the Company.

    


    2.06        Change
in Control. “Change in Control”
means any one of the following events:

    


    (a)          consummation
of the acquisition by any person (as such term is defined in Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended from time to time (the
“1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of the
Company;

    


    (b)          the
individuals who, as of the date hereof, are members of the Board cease for any
reason to constitute a majority of the Board, unless the election, or nomination
for election by the stockholders, of any new director was approved by a vote of
a majority of the Board; or

    


    (c)         
 the consummation of: (1) a merger or consolidation to which the Company is
a party if the stockholders immediately before such merger or consolidation do
not, as a result of such merger or consolidation, own, directly or indirectly,
more than fifty percent (50%) of the combined voting power of the then
outstanding voting securities of the entity resulting from such merger or
consolidation in substantially the same proportion as their ownership of the
combined voting power of the Company’s voting securities outstanding immediately
before such merger or consolidation or (2) a complete liquidation or dissolution
of the Company.

    


    Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities is acquired by: (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
the entity; or (2) any corporation which, immediately after such acquisition is
owned directly or indirectly by the stockholders of the Company in substantially
the same proportion as their ownership of stock immediately prior to such
acquisition.

    


    2.07        Code. “Code” means the
Internal Revenue Code of 1986, as amended from time to time. References to a
section of the Code include that section and any comparable section or sections
of any future legislation that amends, supplements, or supersedes that
section.

    


    2.08        Common
Stock. “Common Stock” means
the common stock, par value $0.001 per share, of the Company.

    


    2.09        Committee. “Committee” means the
Committee acting under Section 3.01.

    


    2.10        Company.
“Company” means Medgenics, Inc., a Delaware corporation, and any
successor company.

    


    2.11        Date
of Grant. “Date of Grant” means
the date designated by the Board as the date as of which it grants an Award,
which shall not be earlier than the date on which the Board approves the
granting of the Award.



    
      
         


      

      
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    2.12        Disability. “Disability” means that
a Participant: (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months; or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering the Company’s
employees.

    


    2.13        Effective
Date. “Effective Date” is
defined in Section 1.02 of the Incentive Plan.

    


    2.14        Exchange
Act. “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.

    


    2.15        Exercise
Price. “Exercise Price” means
the price established with respect to an Option or Stock Appreciation Right
pursuant to Section 6.01(b).

    


    2.16        Fair
Market Value. “Fair Market Value”
means, as of any applicable date: (i) if the Common Stock is listed on a
national securities exchange or is authorized for quotation on the Nasdaq
National Market System (“NMS”), the closing sales price of the Common Stock on
the exchange or NMS, as the case may be, on that date, or, if no sale of the
Common Stock occurred on that date, on the next preceding date on which there
was a reported sale; or (ii) if none of the above apply, the closing bid price
as reported by the Nasdaq SmallCap Market on that date, or if no price was
reported for that date, on the next preceding date for which a price was
reported; or (iii) if none of the above apply, the last reported bid price
published in the “pink sheets” or displayed on the National Association of
Securities Dealers, Inc. (“NASD”), Electronic Bulletin Board, as the case may
be; or (iv) if none of the above apply, the fair market value of the Common
Stock as determined by the Board on an annual basis.

    


    2.17        Incentive
Plan. “Incentive Plan” means
the Medgenics, Inc. Stock Incentive Plan described in this document and as it
may be amended from time to time.

    


    2.18        Incentive
Stock Option. “Incentive Stock
Option” means a stock option within the meaning of Section 422 of the
Code.

    


    2.19        Merger. “Merger” means any
merger, reorganization, consolidation, share exchange, transfer of assets, or
other transaction having a similar effect involving the Company.

    


    2.20        Non-Qualified
Stock Option. “Non-Qualified Stock
Option” means a stock option which is not an Incentive Stock
Option.

    


    2.21        Non-Vested
Share. “Non-Vested Share”
means shares of the Company Common Stock issued to a Participant in respect of
the non-vested portion of an Option in the event of the early exercise of such
Participant’s Options pursuant to such Participant’s Award Agreement, as
permitted in Section 6.06 below.

    


    2.22        Option. “Option” means all
Non-Qualified Stock Options and Incentive Stock Options granted at any time
under the Incentive Plan.



    
      
         


      

      
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    2.23        Participant. “Participant” means a
person designated to receive an Award under the Incentive Plan in accordance
with Section 5.01 below.

    


    2.24        Purchase
Price. “Purchase Price” means
the amount that a Participant is or may be required to pay with respect to an
Award of Restricted Stock under Article VII or with respect to an Award of stock
purchase rights under Section 6.04.

    


    2.25        Restricted
Stock. “Restricted Stock”
means an Award consisting of shares of Common Stock subject to the restrictions
granted under Article VII below.

    


    2.26        Stock
Appreciation Rights. “Stock Appreciation
Rights” means Awards granted in accordance with Article VI.

    


    2.27        Stock
Unit. “Stock Unit” means a
unit of value, equal at any relevant time to the Fair Market Value of a share of
Common Stock, established by the Board as a means of measuring the value of a
Participant’s Stock Unit Account.

    


    2.28        Stock
Unit Account. “Stock Unit Account”
means the bookkeeping account maintained by the Committee on behalf of each
Participant who is credited with Stock Units and dividend equivalents thereon
pursuant to Section 8.02.

    


    2.29        Termination
of Service. “Termination of
Service” means the termination of a person’s status as a director or an
employee, and termination of a business relationship with a consultant, advisor
or any other Participant who is neither an employee nor a member of the Board.
Subject to the terms of Code Section 409A and the regulations promulgated
thereunder, a leave of absence shall not be considered a Termination of Service
for purposes of the Incentive Plan.

    


    2.30        409A
Award. “409A Award” means
Awards that are described in Section 9.05.

    


    Article
III

    Administration

    


    3.01        Committee. The Incentive Plan
shall be administered by the Committee. The Committee shall be selected by the
Board. At any time the Common Stock is publicly traded, the Committee shall be
comprised of two (2) or more members of the Board, each of whom are both (a)
“non-employee director” (within the meaning of Rule 16b-3 promulgated under the
Exchange Act) and (b) an “outside director” (within the meaning of Code Section
162(m)). Subject to applicable stock exchange rules, if the Committee does not
exist, or for any other reason determined by the Board, the Board may take any
action under the Incentive Plan that would otherwise be the responsibility of
the Committee.

    


    3.02        Powers
of the Committee. The Committee’s
administration of the Incentive Plan shall be subject to the
following:

    


    (a)          Subject
to the provisions of the Incentive Plan, the Committee will have the authority
and discretion to select from among the employees, directors and service
providers of the Company or its Affiliates those persons who shall receive
Awards, to determine the time or times of receipt, to determine the types of
Awards and the number of shares covered by the Awards, to establish the terms,
conditions, performance criteria, restrictions, and other provisions of such
Awards, and (subject to the restrictions imposed by Section 9.14) to cancel or
suspend Awards.



    
      
         


      

      
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    (b)        
The Committee will have the authority and discretion to interpret the Incentive
Plan, to establish, amend and rescind any rules and regulations relating to the
Incentive Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Incentive Plan.

    


    (c)          Any
interpretation of the Incentive Plan by the Committee and any decision made by
it under the Incentive Plan are final and binding on all persons.

    


    (d)         
The Committee shall make decisions by a majority vote of its
members.

    


    (e)          In
controlling and managing the operation and administration of the Incentive Plan,
the Committee shall take action in a manner that conforms to the articles and
bylaws of the Company and applicable state corporate law.

    


    3.03        Delegation
by Committee. Except to the extent
prohibited by applicable law, the applicable rules of a stock exchange or the
Incentive Plan, or as may be necessary to comply with the exemptive provisions
of Rule 16b-3 under the Exchange Act, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and
may delegate all or any part of its responsibilities and powers to any person or
persons selected by it, including: (a) delegating to a committee of one or more
members of the Board who are not “outside directors” within the meaning of Code
Section 162(m), the authority to grant Awards under the Incentive Plan to
eligible persons who are either: (i) not then “covered employees,” within the
meaning of Code Section 162(m) and are not expected to be “covered employees” at
the time of recognition of income resulting from such Award; or (ii) not persons
with respect to whom the Company wishes to comply with Code Section 162(m);
and/or (b) delegating to a committee of one or more members of the Board who are
not “non-employee directors,” within the meaning of Rule 16b-3, the authority to
grant Awards under the Incentive Plan to eligible persons who are not then
subject to Section 16 of the Exchange Act. Any such allocation or delegation may
be revoked by the Committee at any time. To the extent permitted by applicable
law and resolution of the Board, the Committee may delegate all or any part of
its responsibilities to any officer of the Company.

    


    3.04        Information
to be Furnished to Committee. As may be permitted by applicable law,
the Company and its subsidiaries shall furnish the Committee with such data and
information as it determines may be required for it to discharge its duties. The
records of the Company and its subsidiaries as to an employee’s or Participant’s
employment, termination of employment, leave of absence, reemployment and
compensation shall be conclusive on all persons unless determined by the
Committee to be manifestly incorrect. Subject to applicable law, Participants
and other persons entitled to benefits under the Incentive Plan must furnish the
Committee such evidence, data or information as the Committee considers
desirable to carry out the terms of the Incentive Plan.



    
      
         


      

      
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    Article
IV

    Stock

    


    4.01        Number
of Shares. The maximum number of
shares authorized to be issued under the Incentive Plan shall be 997,003 shares
of the Company’s Common Stock. The number of shares available for issuance under
the Incentive Plan shall be subject to adjustment in accordance with Section
9.06 below. The shares to be offered under the Incentive Plan shall be
authorized and unissued shares of Common Stock, or issued shares of Common Stock
that have been reacquired by the Company in private or public
transactions.

    


    4.02        Reuse
of Shares. Shares of Common Stock
covered by any unexercised portions of terminated Options (including canceled or
forfeited Options) granted under Article VI or any Award settled in cash without
the issuance of Shares may be subject to new Awards under the Incentive Plan.
Shares of Common Stock used to meet tax withholding requirements may be subject
to new Awards under the Incentive Plan.

    


    4.03        Delivery
of Shares. Delivery of shares of
Common Stock or other amounts under the Incentive Plan shall be subject to the
following:

    


    (a)          Compliance with
Applicable Laws. Notwithstanding any
other provision of the Incentive Plan, the Company shall have no obligation to
deliver any shares of Common Stock or make any other distribution of benefits
under the Incentive Plan unless such delivery or distribution complies with all
applicable laws (including, the requirements of the Securities Act of 1933, as
amended from time to time), and the applicable requirements of any securities
exchange or similar entity.

    


    (b)          Certificates. To
the extent that the Incentive Plan provides for the issuance of
shares of Common Stock, the issuance may be affected on a non-certificated
basis, to the extent not prohibited by applicable law or the applicable rules of
any securities exchange or similar entity.

    


    Article
V

    Participation

    


    5.01        Eligible
Participants. Participants in the
Incentive Plan shall be employees, directors, consultants and advisors of the
Company or an Affiliate that the Committee, in its sole discretion, may
designate from time to time. The Committee’s designation of a Participant in any
year shall not require the Committee to designate the person to receive Awards
in any other year. The Committee shall consider those factors it deems pertinent
in selecting Participants and in determining the types and amounts of their
respective Awards.



    
      
         


      

      
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    Article
VI

    Stock Options & Stock
Appreciation Rights

    


    6.01        Option
Awards.

    


    (a)          Grant
of Options. The Committee may
grant, to Participants who the Committee may select, Options entitling the
Participants to purchase shares of Common Stock from the Company in the amount,
at the price, on the terms, and subject to the conditions, not inconsistent with
the terms of the Incentive Plan, that may be established by the Committee. The
terms of any Option granted under the Incentive Plan shall be set forth in an
Award Agreement.

    


    (b)          Exercise
Price of Options. Subject to Section
6.01(d) below with respect to Incentive Stock Options, the Exercise Price of
each Option for purchase of shares of Common Stock under any Option granted
under the Incentive Plan shall be determined by the Committee and shall be set
forth in the Award Agreement. To the extent required by applicable law, the
Exercise Price will not be less than One Hundred percent (100%) of the Fair
Market Value of a share of Common Stock on the Date of Grant.

    


    (c)          Designation
of Options. Except as otherwise
expressly provided in the Incentive Plan, the Committee may designate an Option
as an Incentive Stock Option or a Non-Qualified Stock Option at the time the
grant is made; provided,
however, that an Option may be designated as an Incentive Stock Option
only if the applicable Participant is an employee of the Company or an Affiliate
on the Date of Grant.

    


    (d)          Special
Incentive Stock Option Rules. No Participant may be granted Incentive
Stock Options under the Incentive Plan (or any other plans of the Company) that
would result in Incentive Stock Options to purchase shares of Common Stock with
an aggregate Fair Market Value (measured on the Date of Grant) of more than
$100,000 first becoming exercisable by the Participant in any one calendar year.
Notwithstanding any other provision of the Incentive Plan to the contrary, the
Exercise Price of each Incentive Stock Option shall be equal to or greater than
the Fair Market Value of the Common Stock as of the Date of Grant of the
Incentive Stock Option; provided, however, that no
Incentive Stock Option shall be granted to any person who, at the time the
Option is granted, owns stock (including stock owned by application of the
constructive ownership rules in Section 424(d) of the Code) possessing more than
10% of the total combined voting power of all classes of stock of the Company,
unless at the time the Incentive Stock Option is granted the Exercise Price is
at least 110% of the Fair Market Value of the Common Stock as of the Date of
Grant and the Incentive Stock Option by its terms is not exercisable for more
than five years from the Date of Grant. To the extent an Option does not qualify
as an Incentive Stock Option, such Option shall be treated for all purposes as a
Non-Qualified Stock Option.

    


    (e)          Rights
as a Stockholder. A Participant or a transferee of an
Option pursuant to Section 9.03 below shall have no rights as a stockholder with
respect to the shares of Common Stock covered by an Option until that
Participant or transferee becomes the holder of record of the shares, and no
adjustment shall be made to the shares of Common Stock for dividends in cash or
other property or distributions of other rights on the Common Stock for which
the record date is prior to the date on which that Participant or transferee
became the holder of record of any of the shares covered by the Option; provided, however, that
Participants are entitled to share adjustments to reflect capital changes under
Section 9.06.



    
      
         


      

      
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    6.02        Stock Appreciation
Rights.

    


    (a)          Stock
Appreciation Right Awards. The Committee is
authorized to grant to any Participant one or more Stock Appreciation Rights.
Such Stock Appreciation Rights may be granted either independent of or in tandem
with or by reference to Options granted prior to or simultaneously with the
grant of such rights to the same Participant. Stock Appreciation Rights may be
granted in tandem with or by reference to a related Option, in which event the
Participant may elect to exercise either the Option or the Stock Appreciation
Right, but not both, as to the same share subject to the Option and the Stock
Appreciation Right, or the Stock Appreciation Right may be granted independently
of a related Option. Upon exercise of a Stock Appreciation Right with respect to
a share of Common Stock, the Participant shall be entitled to receive an amount
equal to the excess, if any, of (i) the Fair Market Value of a share of Common
Stock on the date of exercise over (ii) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be
payable as provided in Section 6.02(c).

    


    (b)          Exercise
Price. The
Exercise Price established under any Stock Appreciation Right granted under the
Incentive Plan shall be determined by the Committee, but in the case of Stock
Appreciation Rights granted in tandem with Options shall not be less than the
Exercise Price of such Options.

    


    (c)          Payment
of Incremental Value. Any payment which may
become due from the Company by reason of a Participant’s exercise of a Stock
Appreciation Right may be paid to the Participant as determined by the Committee
(i) all in cash, (ii) all in Common Stock, or (iii) in any combination of cash
and Common Stock, In the event that all or a portion of the payment is made in
Common Stock, the number of shares of Common Stock delivered in satisfaction of
such payment shall be determined by dividing the amount of such payment or
portion thereof by the Fair Market Value on the Exercise Date.

    


    6.03        Terms of
Stock Options & Stock Appreciation Rights.

    


    (a)          Conditions
on Exercise. An Award
Agreement with respect to Options and/or Stock Appreciation Rights may contain
conditions or restrictions as determined by the Committee at the time of
grant.

    


    (b)          Duration
of Options. Unless
otherwise provided in an Award Agreement, Options and/or Stock Appreciation
Rights shall terminate after the first to occur of the following
events:

    


    (i)           termination
of the Award as provided in Section 6.03(e), following the applicable
Participant’s Termination of Service; and

    


    (ii)         
ten years from the Date of Grant (five years in certain cases, as described in
Section 6.01(d)).

    


    (c)          
Acceleration
of Exercise Time. The
Committee, in its sole discretion, shall have the right (but shall not in any
case be obligated), exercisable at any time after the Date of Grant, to permit
the exercise of any Option and/or Stock Appreciation Right prior to the time the
Award would otherwise vest under the terms of the related Award
Agreement.

    


    (d)          Extension
of Exercise Time. In addition
to the extensions permitted under Section 6.03(e) below in the event of
Termination of Service, the Committee, in its sole discretion, shall have the
right (but shall not in any case be obligated), exercisable on or at any time
after the Date of Grant, to permit the exercise of any Option and/or Stock
Appreciation Right after its expiration date described in Section 6.03(e),
subject, however, to the limitations described in Section 6.03(b)(ii)
above.



    
      
         


      

      
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    (e)          Exercise
of Options Upon Termination of Service. Unless
otherwise provided in an Award Agreement, the following rules shall govern the
treatment of Options and/or Stock Appreciation Rights upon Termination of
Service:

    


    (i)          Termination
of Options and/or Stock Appreciation Rights Upon Termination of
Service.

    


    
      	
               
      

            	
              (A)

            	
              Termination Other Than
      Due to Death or Disability. In the event of a Participant’s
      Termination of Service for any reason other than death or Disability, the
      right of the Participant to exercise any vested Options and/or Stock
      Appreciation Rights shall, unless the exercise period is extended by the
      Committee in accordance with Section 6.03(d) above, terminate upon the
      earlier of: (I) ninety (90) days after the date of the Termination of
      Service; and (II) the date of expiration of the Options and/or Stock
      Appreciation Rights determined pursuant to Section 6.03(b)(ii)
      above.

            


    

    


    
      	
               
      

            	
              (B)

            	
              Death or
      Disability. In the event of a Participant’s Termination of Service
      by reason of death or Disability, the right of the Participant to exercise
      any vested Options and/or Stock Appreciation Rights shall, unless the
      exercise period is extended by the Committee in accordance with Section
      6.03(d) above, terminate upon the earlier of: (I) one year after the date
      of the Termination of Service; and (II) the date of expiration of the
      Options and/or Stock Appreciation Rights determined pursuant to Section
      6.03(b)(ii) above.

            


    

    


    (ii)         Termination
of Unvested Options Upon Termination of Service. Subject
to Section 6.06 below, to the extent the right to exercise Options and/or Stock
Appreciation Rights, or any portion thereof, has not vested as of the date of
Termination of Service, the right shall expire on the date of Termination of
Service regardless of the reason for the Termination of
Service.



    
      
         


      

      
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    6.04        Exercise
Procedures. Each
Option and Stock Appreciation Right granted under the Incentive Plan shall be
exercised under such procedures and by such methods as the Committee may
establish or approve from time to time. The Exercise Price of shares purchased
upon exercise of an Option granted under the Incentive Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided, however, that
the Committee may (but shall not be required to) permit payment to be made by
delivery to the Company of either (a) shares of Common Stock held by the
Participant for at least six (6) months or (b) any combination of cash and
Common Stock held by the Participant for at least six (6) months or (c) any
other consideration that the Committee deems appropriate and in compliance with
applicable law. In the event that any Common Stock shall be transferred to the
Company to satisfy all or any part of the Exercise Price, the part of the
Exercise Price deemed to have been satisfied by such transfer of Common Stock
shall be equal to the product derived by multiplying the Fair Market Value as of
the date of exercise times the number of shares of Common Stock transferred to
the Company. The Participant may not transfer to the Company in satisfaction of
the Exercise Price any fractional share of Common Stock.

    


    6.05        Change
in Control. Unless
otherwise stated in the Award Agreement, in the event of a Change in Control,
all Options and/or Stock Appreciation Rights outstanding as of the effective
date of the Change in Control that have not previously vested or terminated
under the terms of the applicable Award Agreement shall be immediately and fully
vested and exercisable; provided however, for
purposes of this Section 6.05, unless otherwise determined by the Committee, no
Change in Control of the Company shall be deemed to have occurred for purposes
of determining a Participant’s rights under the Incentive Plan if (i) the
Participant is a member of a group that first announces a proposal which, if
successful, would result in a Change in Control, which proposal (including any
modifications thereof) is ultimately successful, or (ii) the Participant
acquires a two percent or more equity interest in the entity that ultimately
acquires the Company pursuant to the transaction described in clause (i) of this
Section 6.05.

    


    6.06        Early
Exercise. An Award
Agreement may provide the Participant the right to exercise the Option in whole
or in part prior to the date the Option is fully vested. The provision may be
included in the Award Agreement at the time of grant of the Option or may be
added to the Award Agreement by amendment at a later date. In the event of an
early exercise of an Option, any shares of Common Stock received shall be
subject to a repurchase right in favor of the Company with terms established by
the Committee. The Committee shall determine the time and/or the event that
causes the repurchase right to terminate and fully vest the Common Stock in the
Participant.

    


    Article
VII

    Restricted
Stock

    


    7.01        Restricted
Stock Awards. The
Committee may grant to any Participant an Award of a number of shares of Common
Stock subject to the terms, conditions, and restrictions as determined by the
Committee. Such restrictions may be based on performance standards, periods of
service, retention by the Participant of ownership of specified shares of Common
Stock, or other criteria, as determined by the Committee. The terms of any
Restricted Stock Award granted under the Incentive Plan shall be set forth in an
Award Agreement that shall contain provisions determined by the Committee and
not inconsistent with the Incentive Plan.

    


    (a)          Issuance
of Restricted Stock. As soon
as practicable after the Date of Grant of a Restricted Stock Award by the
Committee, the Company shall cause to be transferred on its books the number of
shares of Restricted Stock awarded to the Participant, and the shares shall be
issued in the name of the Participant. In the discretion of the Committee, the
Restricted Stock may be subject to forfeiture to the Company as of the Date of
Grant if an Award Agreement for the Restricted Stock covered by the Award is not
signed by the Participant and timely returned to the Company. Until the lapse or
release of all forfeiture restrictions applicable to an Award of Restricted
Stock, the share certificates representing the Restricted Stock may be held, in
the Company’s discretion, in custody by the Company, its designee, or, if the
certificates bear a restrictive legend, by the Participant.



    
      
         


      

      
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    (b)          Shareholder
Rights.
Beginning on the Date of Grant of a Restricted Stock Award, subject to
execution of the related Award Agreement and the provisions contained therein,
the Participant shall become a shareholder of the Company with respect to the
shares of Restricted Stock subject to the Award Agreement and shall have all of
the rights of a holder of Common Stock, including, but not limited to, the right
to vote and to receive dividends; provided, however, that any
Common Stock or other securities distributed as a dividend or otherwise related
to any Restricted Stock on which the Award Agreement restrictions have not yet
lapsed, shall be subject to the same restrictions as such Restricted Stock and
held or restricted as provided in Section 7.01(a).

    


    (c)          Restriction
on Transferability. No Restricted
Stock may be assigned or transferred (other than by will or the laws of descent
and distribution or to an inter vivos trust under which
the Participant is treated as the owner under Sections 671 through 677 of the
Code), pledged, or sold prior to the lapse of the restrictions applicable to
them.

    


    (d)          Delivery
of Stock Upon Vesting. Upon
expiration or termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the Committee
in the Award Agreement, or at any earlier time provided under the provisions of
Section 7.03 below, the such restrictions applicable to the Restricted Stock
shall lapse. After the lapse of such restrictions, the Company shall, subject to
the requirements of Section 9.04, promptly deliver to the Participant or, in
case of the Participant’s death, to the Participant’s Beneficiary, one or more
share certificates for the appropriate number of shares of Common Stock, free of
all forfeiture restrictions (but not free of any transfer restrictions
applicable to Common Stock generally or under the terms of an Award
Agreement).

    


    
      	
               
      

            	
              7.02

            	
              Terms of Restricted
      Shares.

            


    

    


    (a)          Forfeiture
of Restricted Shares. Subject
to Sections 7.02(b) and 7.03 below, Restricted Stock shall be forfeited and
returned to the Company and all rights of the Participant with respect to the
Restricted Stock shall terminate in the event of a Termination of Service
occurring prior to the expiration of the forfeiture period for the Restricted
Stock and the Participant satisfies any and all other conditions set forth in
the Award Agreement.

    


    (b)          Waiver
of Forfeiture Period.
Notwithstanding anything contained in this Article VII to the contrary,
the Committee may, in its sole discretion, waive the forfeiture period and any
other conditions set forth in any Award Agreement under appropriate
circumstances (including the death or Disability of the Participant or a
material change in circumstances arising after the date of an Award) and subject
to any terms and conditions (including forfeiture of a proportionate number of
shares of Restricted Stock) that the Committee may deem
appropriate.



    
      
         


      

      
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    7.03        Change
in Control. Unless
otherwise stated in the Award Agreement, in the event of a Change in Control,
all restrictions applicable to a Restricted Stock Award shall terminate fully
(other than the transfer or other restrictions generally applicable to Common
Stock) and the Participant shall immediately have the right to the delivery of
share certificates for the Restricted Stock in accordance with Section 7.01(d)
above. Notwithstanding the foregoing, unless otherwise determined by the
Committee, no Change in Control of the Company shall be deemed to have occurred
for purposes of determining a Participant’s rights under the Incentive Plan if
(i) the Participant is a member of a group that first announces a proposal
which, if successful, would result in a Change of Control, which proposal
(including any modifications thereof) is ultimately successful, or (ii) the
Participant acquires a two percent or more equity interest in the entity that
ultimately acquires the Company pursuant to the transaction described in clause
(i) of this Section 7.03.

    


    Article
VIII

    Other Stock-Based
Awards

    


    8.01        Grant
of Other Stock-Based Awards. Other
stock-based Awards, consisting of stock purchase rights, Awards of Common Stock,
or Awards valued in whole or in part by reference to, or otherwise based on,
Common Stock, may be granted either alone or in addition to or in conjunction
with other Awards under the Incentive Plan. Subject to the provisions of the
Incentive Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Awards shall
be made, the number of shares of Common Stock to be granted pursuant to such
Awards, and all other terms and conditions of the Awards. Any such Award shall
be confirmed by an Award Agreement executed by the Company and the Participant,
which Award Agreement shall contain such provisions as the Committee determines
to be necessary or appropriate to carry out the intent of the Incentive Plan
with respect to such Award.

    


    8.02        Terms
of Other Stock-Based Awards. Unless
otherwise provided in the Award Agreement, Awards made pursuant to this Article
VIII shall be subject to the following:

    


    (a)          Any
Common Stock subject to Awards made under this Article VIII may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the date on
which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses.

    


    (b)          The
recipient of an Award under this Article VIII shall be entitled to receive
interest or dividends or dividend equivalents with respect to the Common Stock
or other securities covered by the Award.

    


    (c)           If
the vesting of an outstanding Award is conditioned upon the achievement of
performance measures, then the Award shall be subject to the
following:

    


    (i)           If,
at the time of the Change in Control, the established performance measures are
less than fifty percent (50%) attained (as determined in the sole discretion of
the Committee, based upon a pro rata determination through the date of the
Change in Control), then such Award shall become vested and exercisable on a
fractional basis with the numerator being equal to the percentage of attainment
and the denominator being fifty percent (50%).



    
      
         


      

      
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    (ii)          If
at the time of the Change in Control, the established performance measures are
at least fifty percent (50%) attained (as determined in the sole discretion of
the Committee, based upon a pro rata determination through the date of the
Change in Control), then such Award shall become fully vested and
exercisable.

    


    Article
IX

    Terms Applicable to All
Awards Granted under the Incentive Plan

    


    9.01        Plan
Provisions Control Award Terms. The
terms of the Incentive Plan shall govern all Awards granted under the Incentive
Plan, and the Committee may not grant any Award under the Incentive Plan that
contains terms that are contrary to any of the provisions of the Incentive Plan.
In the event any provision of any Award granted under the Incentive Plan
conflicts with any term in the Incentive Plan as in effect on the Date of Grant
of the Award, the terms of the Incentive Plan shall control. Except as provided
in Sections 9.05 and 9.06 below, the terms of any Award granted under the
Incentive Plan may not be changed after the Date of Grant of the Award in a
manner that would materially decrease the value of the Award without the express
written approval of the Participant.

    


    9.02        Award
Agreement. No
person shall have any rights under any Award granted under the Incentive Plan
unless and until the Company and the Participant to whom the Award was granted
have executed and delivered an Award Agreement or the Participant has received
and acknowledged notice of the Award authorized by the Committee expressly
granting the Award to the Participant and containing provisions setting forth
the terms of the Award.

    


    9.03        Limitation
on Transfer. Except
as may be provided in the applicable Award Agreement, a Participant’s rights and
interest under the Incentive Plan may not be assigned or transferred other than
by will or the laws of descent and distribution and, during the lifetime of a
Participant, only the Participant personally (or the Participant’s personal
representative) may exercise rights under the Incentive Plan. The Participant’s
Beneficiary may exercise the Participant’s rights to the extent they are
exercisable under the Incentive Plan following the death of the
Participant.

    


    9.04        Taxes. The Company
shall be entitled, if the Committee deems it necessary or desirable, to withhold
(or secure payment from the Participant in lieu of withholding) the amount of
any withholding or other tax required by law to be withheld or paid by the
Company regarding any amount payable and/or shares issuable under the
Participant’s Award or regarding any income recognized upon a disqualifying
disposition (i.e., a disposition prior to the expiration of the required holding
periods) of shares received pursuant to the exercise of an Incentive Stock
Option, and the Company may defer payment of cash or issuance of shares upon
exercise or vesting of an Award unless indemnified to its satisfaction against
any liability for any taxes. The amount of the withholding or tax payment shall
be determined by the Committee and shall be payable by the Participant in cash
at the time the Committee determines; provided, however, that with
the approval of the Committee, the Participant may elect to meet his or her
withholding requirement, in whole or in part, by having withheld from the Award
at the appropriate time that number of shares of Common Stock, rounded down to
the next whole share, the Fair Market Value of which is equal to the amount of
minimum required withholding taxes due.



    
      
         


      

      
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    9.05        Code
Section 409A. Any
Options, Stock Appreciation Rights, Restricted Stock Awards, or other
stock-based Award, which constitutes “deferred compensation” under Code Section
409A (“409A Award”), and any rules and regulations promulgated thereunder, shall
be subject to the following:

    


    (a)          All
409A Award documents and agreements, or rules and regulations created by the
Committee pertaining to 409A Awards, shall provide for the required procedures
under Code Section 409A, including the timing of deferral elections and the
timing and method of payment distributions.

    


    (b)          With
respect to all 409A Awards, the Committee and its delegates shall operate the
Incentive Plan at all times in conformity with the known rules, regulations and
guidance promulgated under Code Section 409A, and the Committee shall reserve
the right (including the right to delegate such right) to unilaterally amend any
409A Award granted under the Incentive Plan, without the consent of the
Participant, to maintain compliance with Code Section 409A. A Participant’s
acceptance of any Award under the Incentive Plan constitutes acknowledgement and
consent to such rights of the Committee.

    


    9.06        Adjustments to Reflect
Capital Changes.

    


    (a)          Recapitalization. The
number and kind of shares subject to outstanding Awards, the Exercise Price for
the shares, the number and kind of shares available for Awards to be granted
under the Incentive Plan shall be automatically adjusted to reflect any stock
dividend, stock split, combination or exchange of shares, Merger, consolidation,
or other change in capitalization with a similar substantive effect upon the
Incentive Plan or the Awards granted under the Incentive Plan. The Committee
shall have the power and sole discretion to determine the amount of the
adjustment to be made in each case and shall have the right to prevent such
automatic adjustment upon a determination that such adjustment would
inappropriately increase or decrease the intended Award to the
Participant.

    


    (b)          Merger. In the
event that the Company is a party to a Merger, outstanding Awards shall be
subject to the agreement of merger or reorganization. Such agreement may
provide, without limitation, for the continuation of outstanding Awards by the
Company (if the Company is a surviving corporation), for their assumption by the
surviving corporation or its parent or subsidiary, for the substitution by the
surviving corporation or its parent or subsidiary of its own awards for such
Awards, for accelerated vesting and accelerated expiration, or for settlement in
cash or cash equivalents.

    


    (c)          Awards
to Replace Awards of Acquired Companies. After
any Merger in which the Company or an Affiliate is a surviving corporation, the
Board may grant substituted Awards under the provisions of the Incentive Plan,
generally consistent with Section 424 of the Code, in replacement of awards
granted under a plan of another party to the Merger whose shares of stock to be
issued under the old awards may no longer be issued following the Merger. The
terms and conditions of such replacement Awards shall be as determined by the
Committee in its sole discretion.



    
      
         


      

      
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    9.07        Initial
Public Offering. As a condition of participation in the Incentive Plan,
each Participant shall be obligated to cooperate with the Company and the
underwriters in connection with any public offering of the Company’s securities
and any transactions relating to a public offering, and shall execute and
deliver any agreements and documents, including, without limitation, a lock-up
agreement, that may be requested by the Company or the underwriters. The
Participants’ obligations under this Section shall apply to any shares of Common
Stock issued under the Incentive Plan as well as to any and all other securities
of the Company or its successor for which Common Stock may be exchanged or into
which Common Stock may be converted.

    


    9.08        No Implied
Rights.

    


    (a)          No
Rights to Specific Assets. Neither
a Participant nor any other person shall by reason of participation in the
Incentive Plan acquire any right in or title to any assets, funds or property of
the Company or any subsidiary whatsoever, including any specific funds, assets,
or other property which the Company or any subsidiary, in its sole discretion,
may set aside in anticipation of a liability under the Incentive Plan. A
Participant shall have only a contractual right to the Common Stock or amounts,
if any, payable or distributable under the Incentive Plan, unsecured by any
assets of the Company, and nothing contained in the Incentive Plan shall
constitute a guarantee that the assets of the Company or any subsidiary shall be
sufficient to pay any benefits to any person.

    


    (b)          No
Contractual Right to Employment or Future Awards. The Incentive Plan does not
constitute a contract of employment, and selection as a Participant will not
give any participating employee the right to be retained in the employ of the
Company or an Affiliate or any right or claim to any benefit under the Incentive
Plan, unless such right or claim has specifically accrued under the terms of the
Incentive Plan. Except as otherwise provided in the Incentive Plan, no Award
under the Incentive Plan shall confer upon the holder thereof any rights as a
stockholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.

    


    9.09        Awards
Not Includable for Benefit Purposes. Payments received by a Participant
pursuant to the provisions of the Incentive Plan shall not be included in the
determination of benefits under any pension, group insurance, or other benefit
plan applicable to the Participant that is maintained by the Company, except as
may be provided under the terms of those plans or determined by the
Committee.

    


    9.10        Governing
Law. The Incentive Plan, and all Awards granted hereunder, and all
actions taken in connection herewith, except as superseded by applicable federal
law, shall be interpreted, construed, and enforced and its construction and
performance shall be governed by the internal laws of the State of
Delaware.

    


    9.11        No
Strict Construction. No rule of strict construction shall be implied
against the Company, the Board, the Committee, or any other person in the
interpretation of any of the terms of the Incentive Plan, any Award granted
under the Incentive Plan, or any rule or procedure established by the Committee
that relates to the Incentive Plan.



    
      
         


      

      
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    9.12        Captions. The
captions and Section headings used in the Incentive Plan are for convenience
only, do not constitute a part of the Incentive Plan, and shall not be deemed to
limit, characterize, or affect in any way any provision of the Incentive Plan,
and all provisions of the Incentive Plan shall be construed as if no captions or
headings had been used in the Incentive Plan.

    


    9.13        Severability. Each
part of the Incentive Plan is intended to be several. If any term, covenant,
condition, or provision of the Incentive Plan is determined by a court of
competent jurisdiction to be illegal, invalid, or unenforceable for any reason
whatsoever, that determination shall not affect the legality, validity, or
enforceability of the remaining parts of the Incentive Plan, and all remaining
parts shall be legal, valid, and enforceable and have full force and effect as
if the illegal, invalid, and/or unenforceable part had not been
included.

    


    9.14        Amendment and
Termination.

    


    (a)          Amendment. The
Committee shall have complete power and authority to amend the Incentive Plan at
any time and for any reason. No termination or amendment of the Incentive Plan
may, without the consent of the Participant (or, if the Participant is not then
living, the affected Beneficiary) to whom any Award has previously been granted
under the Incentive Plan, materially adversely affect the rights of the
Participant or Beneficiary under that Award; provided, however, that no
amendment may (i) materially increase the aggregate number of securities which
may be issued under the Incentive Plan, other than pursuant to Section 9.06(a),
or (ii) materially modify the requirements for participation in the Incentive
Plan, unless the amendment is approved by a majority of the Company’s
stockholders.

    


    (b)      
   Termination. The
Committee shall have the right and the power to terminate the Incentive Plan at
any time and for any reason. No Award shall be granted under the Incentive Plan
after the termination of the Incentive Plan, but the termination of the
Incentive Plan shall not affect any Award outstanding at the time of the
termination of the Incentive Plan.

    


    9.15        Further
Assurances. As a
condition to receipt of any Award under the Incentive Plan, a Participant shall
agree, upon demand of the Company, to do all acts and execute, deliver and
perform all additional documents, instruments and agreements (including, without
limitation, any applicable stockholder’s agreement or a joinder to such
agreement) which may be reasonably required by the Company, to implement the
provisions and purposes of the Incentive Plan.

    


    9.16        Form
and Time of Elections. Unless
otherwise specified herein, each election required or permitted to be made by
any Participant or other person entitled to benefits under the Incentive Plan,
and any permitted modification, or revocation thereof, shall be filed with the
Company at such times, in such form, and subject to such restrictions and
limitations, not inconsistent with the terms of the Incentive Plan, as the
Committee shall require.

    


    9.17        Evidence. Evidence
required of anyone under the Incentive Plan may be by certificate, affidavit,
document or other information which the person acting on it considers pertinent
and reliable, and signed, made or presented by the proper party or
parties.



    
      
         


      

      
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    9.18        Successors. All
obligations of the Company under the Incentive Plan shall be binding upon and
inure to the benefit of any successor to the Company, whether the existence of
such successor is the result of a direct or indirect purchase, Merger,
consolidation or otherwise, of all or substantially all of the business, stock,
and/or assets of the Company,

    


    9.19        Indemnification. The
Company shall indemnify members of the Committee and any agent of the Committee
who is an employee of the Company against any and all liabilities or expenses to
which they may be subjected by reason of any act or failure to act with respect
to their duties on behalf of the Incentive Plan, except in circumstances
involving such person’s bad faith, gross negligence or willful
misconduct.

    


    9.20        No
Fractional Shares. Unless
otherwise permitted by the Committee, no fractional shares of Common Stock shall
be issued or delivered pursuant to the Incentive Plan or any Award. The
Committee shall determine whether cash or other property shall be issued or paid
in lieu of fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.

    


    9.21        Notice. Unless
otherwise provided in an Award Agreement, all written notices and all other
written communications to the Company provided for in the Incentive Plan or any
Award Agreement shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid (provided that international
mail shall be sent via overnight or two-day delivery), or sent by facsimile or
prepaid overnight courier to the Company at the address set forth below. Such
notices, demands, claims and other communications shall be deemed
given:

    


    (a)          in
the case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;

    


    (b)          in
the case of certified or registered U.S. mail, five (5) days after deposit in
the U.S. mail; or

    


    (c)          in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;

    


    provided, however, that
in no event shall any such communications be deemed to be given later than the
date they are actually received; provided they are actually received. In the
event a communication is not received, it shall only be deemed received upon the
showing of an original of the applicable receipt, registration or confirmation
from the applicable delivery service provider. Communications that are to be
delivered by the U.S. mail or by overnight service to the Company shall be
directed to the attention of the Company’s senior human resource officer and
Corporate Secretary.

    


    9.22        Use
of Term. Unless
otherwise provided herein, the term “person” when referred to in the Incentive
Plan or any Award Agreement may refer to an individual or an
entity.


    
      
         


      

      
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