www.eXFILE.com 888-775-4789 --- NEXX SYSTEMS, INC.  FORM S-1


    EXHIBIT
10.1


    


    NEXX
SYSTEMS, INC.

    2003
EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN

    (As
Amended Through January 8, 2010)

    


    


    1.           DEFINITIONS.

    


    
      	
               
      

            	
              Unless
      otherwise specified or unless the context otherwise requires, the
      following terms, as used in this NEXX SYSTEMS, INC. 2002 Employee,
      Director and Consultant Stock Option Plan, have the following
      meanings:

            


    

    


    
      	
               
      

            	
              Administrator
      means the Board of Directors, unless it has delegated power to act on its
      behalf to the Committee, in which case the Administrator means the
      Committee.

            


    

    


    
      	
               
      

            	
              Affiliate means
      a corporation which, for purposes of Section 424 of the Code, is a parent
      or subsidiary of the Company, direct or
  indirect.

            


    

    


    
      	
               
      

            	
              Board of
      Directors means the Board of Directors of the
    Company.

            


    

    


    Change of Control
means the occurrence of any of the following events:

    


    
      	
               
      

            	
              (i)

            	
              Ownership.  Any
      “Person” (as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, as amended) becomes the “Beneficial
      Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
      of securities of the Company representing 50% or more of the total voting
      power represented by the Company’s then outstanding voting securities
      (excluding for this purpose the Company or its Affiliates or any employee
      benefit plan of the Company) pursuant to a transaction or a series of
      related transactions which the Board of Directors does not approve;
      or

            


    

     

    
      
        	
                 
      

              	
                (ii)

              	
                      
                  Merger/Sale
      of Assets.  A merger or consolidation of the Company whether or
      not approved by the Board of Directors, other than a merger or
      consolidation which would result in the voting securities of the Company
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity or the parent of such corporation) at least 50% of the
      total voting power represented by the voting securities of the Company or
      such surviving entity or parent of such corporation outstanding
      immediately after such merger or consolidation, or the stockholders of the
      Company approve an agreement for the sale or disposition by the Company of
      all or substantially all of the Company’s assets;
      or

                

              


      

       

    

    
      	
               
      

            	
              (iii)

            	
              Change
      in Board Composition.  A change in the composition of the Board
      of Directors, as a result of which fewer than a majority of the directors
      are Incumbent Directors.  “Incumbent Directors” shall mean
      directors who either (A) are directors of the Company as
      of January 1, 2003, or (B) are elected, or nominated for election, to
      the Board of Directors with the affirmative votes of at least a
      majority of the Incumbent Directors at the time of such election or
      nomination (but shall not include an individual whose election or
      nomination is in connection with an actual or threatened proxy contest
      relating to the election of directors to the
  Company).

            


    

    


    
      	
               
      

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

            


    

    


    
      	
               
      

            	
              Committee means
      the committee of the Board of Directors to which the Board of Directors
      has delegated power to act under or pursuant to the provisions of the
      Plan.

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              Common Stock
      means shares of the Company’s common stock, $.01 par value per
      share.

            


    

    


    
      	
               
      

            	
              Company means
      NEXX SYSTEMS, INC., a Delaware
corporation.

            


    

    


    
      	
               
      

            	
              Disability or
      Disabled
      means permanent and total disability as defined in Section 22(e)(3)
      of the Code.

            


    

    


    
      	
               
      

            	
              Employee means
      any employee of the Company or of an Affiliate (including, without
      limitation, an employee who is also serving as an officer or director of
      the Company or of an Affiliate), designated by the Administrator to be
      eligible to be granted one or more Options under the
  Plan.

            


    

    


    
      	
               
      

            	
              Equity
      Agreement means an agreement between the Company and a Participant
      delivered pursuant to the Plan, in such form as the Administrator shall
      approve.

            


    

    


    
      	
               
      

            	
              Fair Market
      Value of a Share of Common Stock
means:

            


    

    


    
      	
               
      

            	
              (1)

            	
              If
      the Common Stock is listed on a national securities exchange or traded in
      the over-the-counter market and sales prices are regularly reported for
      the Common Stock, the closing or last price of the Common Stock on the
      Composite Tape or other comparable reporting system for the trading day
      immediately preceding the applicable
date;

            


    

    


    
      	
               
      

            	
              (2)

            	
              If
      the Common Stock is not traded on a national securities exchange but is
      traded on the over-the-counter market, if sales prices are not regularly
      reported for the Common Stock for the trading day referred to in
      clause (1), and if bid and asked prices for the Common Stock are
      regularly reported, the mean between the bid and the asked price for the
      Common Stock at the close of trading in the over-the-counter market for
      the trading day on which Common Stock was traded immediately preceding the
      applicable date; and

            


    

    


    
      	
               
      

            	
              (3)

            	
              If
      the Common Stock is neither listed on a national securities exchange nor
      traded in the over-the-counter market, such value as the Administrator, in
      good faith, shall determine.

            


    

    


    
      	
               
      

            	
              ISO means an
      option meant to qualify as an incentive stock option under
      Section 422 of the Code.

            


    

    


    
      	
               
      

            	
              Non-Qualified
      Option means an option which is not intended to qualify as an
      ISO.

            


    

    


    
      	
               
      

            	
              Option means an
      ISO or Non-Qualified Option granted under the
  Plan.

            


    

    


    
      	
               
      

            	
              Participant
      means an Employee, director or consultant of the Company or an Affiliate
      to whom one or more Options are granted under the Plan or who is a
      recipient of Restricted Stock.  As used herein, “Participant”
      shall include “Participant’s Survivors” where the context
      requires.

            


    

    


    
      	
               
      

            	 	
              Plan means this
      NEXX SYSTEMS, INC. 2003 Employee, Director and Consultant Stock Option
      Plan.

            


    

    


    Restricted Stock
means shares of stock subject to vesting or repurchase rights, as well as
restricted stock grants.

    


    
      	
               
      

            	
              Shares means
      shares of the Common Stock as to which Options have been or may be granted
      under the Plan or any shares of capital stock into which the Shares are
      changed or for which they are exchanged within the provisions of
      Paragraph 3 of the Plan.  The Shares issued upon exercise
      of Options granted under the Plan may be authorized and unissued shares or
      shares held by the Company in its treasury, or
  both.

            


    

    


    
      	
               
      

            	
              Survivor means
      a deceased Participant’s legal representatives and/or any person or
      persons who acquired the Participant’s rights to an Option by will or by
      the laws of descent and
distribution.

            


    

    


    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.           PURPOSES OF THE
PLAN.

    


    The Plan is intended to encourage
ownership of Shares by Employees and directors of and certain consultants to the
Company in order to attract such people, to induce them to work for the benefit
of the Company or of an Affiliate and to provide additional incentive for them
to promote the success of the Company or of an Affiliate.  The Plan
provides for the granting of ISOs and Non-Qualified Options and Restricted
Stock.

     

    
       

      3.   SHARES SUBJECT TO THE
PLAN.

    

    


    (a)           The
number of Shares which may be issued from time to time pursuant to this Plan
shall be 22,160,0631, or the equivalent of such number
of Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 16 of the Plan.

    


    If an Option or Restricted Stock ceases
to be “outstanding”, in whole or in part, the Shares which were subject to such
Option or Restricted Stock shall be available for the granting of other Options
and Restricted Stock under the Plan.  Any Option shall be treated as
“outstanding” until such Option is exercised in full, or terminates or expires
under the provisions of the Plan, or by agreement of the parties to the
pertinent Equity Agreement.

    


    


    
      4.   ADMINISTRATION OF THE
PLAN.


    

    The Administrator of the Plan will be
the Board of Directors, except to the extent the Board of Directors delegates
its authority to the Committee, in which case the Committee shall be the
Administrator. Subject to the provisions of the Plan, the Administrator is
authorized to:

    


    
      	
               
      

            	
              a.

            	
              Interpret
      the provisions of the Plan or of any Equity Agreement and to make all
      rules and determinations which it deems necessary or advisable for the
      administration of the Plan;

            


    

    


    
      	
               
      

            	
              b.

            	
              Determine
      which Employees, directors and consultants shall be granted Options and/or
      Restricted Stock;

            


    

    


    
      	
               
      

            	
              c.

            	
              Determine
      the number of Shares for which an Option or Options or Restricted Stock
      shall be granted;

            


    

    


    
      	
               
      

            	
              d.

            	
              Specify
      the terms and conditions upon which an Option or Options or Restricted
      Stock may be granted; and

            


    

    


    
      	
               
      

            	
              e.

            	
              Adopt
      any sub-plans applicable to residents of any specified jurisdiction as it
      deems necessary or appropriate in order to comply with or take advantage
      of any tax laws applicable to the Company or to Plan Participants or to
      otherwise facilitate the administration of the Plan, which sub-plans may
      include additional restrictions or conditions applicable to Options or
      Shares acquired upon exercise of Options or Restricted
    Stock,

            


    

     

    
      
        ______________________

         

        1 The
shares available under the Plan were originally 800,000 as of the Plan
inception.  The shares were subsequently increased by the action of
the directors and stockholders to 1,800,000 as of March 31, 2004, 3,014,429 as
of September 19, 2005, 5,580,000 as of September 20, 2005, 15,886,833 as of June
26, 2008, and 22,160,063 as of January 10, 2010.

      

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    provided,
however, that all such interpretations, rules, determinations, terms and
conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated
as ISOs.  Subject to the foregoing, the interpretation and
construction by the Administrator of any provisions of the Plan or of any Option
or Restricted Stock granted under it shall be final, unless otherwise determined
by the Board of Directors, if the Administrator is the Committee.  In
addition, if the Administrator is the Committee, the Board of Directors may take
any action under the Plan that would otherwise be the responsibility of the
Committee.

    


    If permissible under applicable law,
the Board of Directors or 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 portion of its responsibilities and powers to any other person
selected by it.  Any such allocation or delegation may be revoked by
the Board of Directors or the Committee at any time.

     

    


    5.           ELIGIBILITY FOR
PARTICIPATION.

    


    The Administrator will, in its sole
discretion, name the Participants in the Plan, provided, however, that each
Participant must be an Employee, director or consultant of the Company or of an
Affiliate at the time an Option or Restricted Stock is
granted.  Notwithstanding the foregoing, the Administrator may
authorize the grant of an Option or Restricted Stock to a person not then an
Employee, director or consultant of the Company or of an Affiliate; provided,
however, that the actual grant of such Option or Restricted Stock shall be
conditioned upon such person becoming eligible to become a Participant at or
prior to the time of the execution of the Equity Agreement evidencing such
Option.  ISOs may be granted only to
Employees.  Non-Qualified Options and Restricted Stock may be granted
to any Employee, director or consultant of the Company or an
Affiliate.  The granting of any Option or Restricted Stock to any
individual shall neither entitle that individual to, nor disqualify him or her
from, participation in any other grant of Options or Restricted
Stock.

    


    


    6.           TERMS AND CONDITIONS OF
OPTIONS.

    


    Each Option shall be set forth in
writing in an Option Agreement, duly executed by the Company and, to the extent
required by law or requested by the Company, by the Participant.  The
Administrator may provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically required under
this Plan, as the Administrator may deem appropriate including, without
limitation, subsequent approval by the shareholders of the Company of this Plan
or any amendments thereto.  The Option Agreements shall be subject to
at least the following terms and conditions:

    


    
      	
               
      

            	
              A.

            	
              Non-Qualified
      Options:  Each Option intended to be a Non-Qualified
      Option shall be subject to the terms and conditions which the
      Administrator determines to be appropriate and in the best interest of the
      Company, subject to the following minimum standards for any such
      Non-Qualified Option:

            


    

    


    
      	
               
      

            	
              a.

            	
              Option
      Price: Each Option Agreement shall state the option price (per share) of
      the Shares covered by each Option, which option price shall be determined
      by the Administrator but shall not be less than 85% of the Fair Market
      Value per share of Common Stock.

            


    

    


    
      	
               
      

            	
              b.

            	
              Each
      Option Agreement shall state the number of Shares to which it
      pertains;

            


    

    


    
      	
               
      

            	
              c.

            	
              Each
      Option Agreement shall state the date or dates on which it first is
      exercisable and the date after which it may no longer be exercised, and
      may provide that the Option rights accrue or become exercisable in
      installments over a period of months or years, or upon the occurrence of
      certain conditions or the attainment of stated goals or events;
      and

            


    

    


    
      	
               
      

            	
              d.

            	
              Exercise
      of any Option may be conditioned upon the Participant’s execution of a
      Share purchase agreement in form satisfactory to the Administrator
      providing for certain protections for the Company and its other
      shareholders, including requirements
that:

            


    

    


    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              i.

            	
              The
      Participant’s or the Participant’s Survivors’ right to sell or transfer
      the Shares may be restricted; and

            


    

    


    
      	
               
      

            	
              ii.

            	
              The
      Participant or the Participant’s Survivors may be required to execute
      letters of investment intent and must also acknowledge that the Shares
      will bear legends noting any applicable
  restrictions.

            


    

    


    
      	
               
      

            	
              e.

            	
              Each
      director of the Company who is not an employee of the Company or any
      Affiliate, upon first being elected or appointed to the Board of
      Directors, shall be granted a Non-Qualified Option to purchase Shares, in
      an amount determined by the Board of Directors.  For any such
      director serving in office on December 31, 2003, such Option shall be
      granted on such date.  Each such Option shall (i) have an
      exercise price equal to the Fair Market Value (per share) of the Shares on
      the date of grant of the Option, (ii) have a term of ten years, and (iii)
      shall become cumulatively exercisable in four equal annual installments of
      25% each, upon completion of one full year of service on the Board of
      Directors after the date of grant, and continuing on each of the next
      three full years of service
thereafter.

            


    

    


    
      	
               
      

            	
              B.

            	
              ISOs:  Each
      Option intended to be an ISO shall be issued only to an Employee and be
      subject to the following terms and conditions, with such additional
      restrictions or changes as the Administrator determines are appropriate
      but not in conflict with Section 422 of the Code and relevant
      regulations and rulings of the Internal Revenue
  Service:

            


    

    


    
      	
               
      

            	
              a.

            	
              Minimum
      standards:  The ISO shall meet the minimum standards required of
      Non-Qualified Options, as described in Paragraph 6(A) above, except
      clause(s) (a) and (e) thereunder.

            


    

    


    
      	
               
      

            	
              b.

            	
              Option
      Price:  Immediately before the ISO is granted, if the
      Participant owns, directly or by reason of the applicable attribution
      rules in Section 424(d) of the
Code:

            


    

    


    
      	
               
      

            	
              i.

            	
              10%
      or less
      of the total combined voting power of all classes of stock of the Company
      or an Affiliate, the Option price per share of the Shares covered by each
      ISO shall not be less than 100% of the Fair Market Value per share of the
      Shares on the date of the grant of the Option;
  or

            


    

    


    
      	
               
      

            	
              ii.

            	
              More
      than 10% of the total combined voting power of all classes of stock of the
      Company or an Affiliate, the Option price per share of the Shares covered
      by each ISO shall not be less than 110% of the said Fair Market Value on
      the date of grant.

            


    

    


    
      	
               
      

            	
              c.

            	
              Term
      of Option:  For Participants who
own:

            


    

    


    
      	
               
      

            	
              i.

            	
              10%
      or less
      of the total combined voting power of all classes of stock of the Company
      or an Affiliate, each ISO shall terminate not more than ten years from the
      date of the grant or at such earlier time as the Option Agreement may
      provide; or

            


    

    


    
      	
               
      

            	
              ii.

            	
              More
      than 10% of the total combined voting power of all classes of stock of the
      Company or an Affiliate, each ISO shall terminate not more than five years
      from the date of the grant or at such earlier time as the Option Agreement
      may provide.

            


    

    


    
      	
               
      

            	
              d.

            	
              Limitation
      on Yearly Exercise:  The Option Agreements shall restrict the
      amount of ISOs which may become exercisable in any calendar year (under
      this or any other ISO plan of the Company or an Affiliate) so that the
      aggregate Fair Market Value (determined at the time each ISO is granted)
      of the stock with respect to which ISOs are exercisable for the first time
      by the Participant in any calendar year does not exceed
      $100,000.

            


    

    


    


    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    7.   EXERCISE OF OPTIONS AND
ISSUE OF SHARES.


    An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company or its
designee, together with provision for payment of the full purchase price in
accordance with this Paragraph for the Shares as to which the Option is being
exercised, and upon compliance with any other condition(s) set forth in the
Option Agreement.  Such notice shall be signed by the person
exercising the Option, shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required by
the Plan or the Option Agreement.  Payment of the purchase price for
the Shares as to which such Option is being exercised shall be made (a) in
United States dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock having a Fair Market
Value equal as of the date of the exercise to the cash exercise price of the
Option and held for at least six months, or (c) at the discretion of the
Administrator, by delivery of the grantee’s personal note, for full, partial or
no recourse, bearing interest payable not less than annually at market rate on
the date of exercise and at no less than 100% of the applicable Federal rate, as
defined in Section 1274(d) of the Code, with or without the pledge of such
Shares as collateral, or (d) at the discretion of the Administrator, in
accordance with a cashless exercise program established with a securities
brokerage firm, and approved by the Administrator, or (e) at the discretion
of the Administrator, by any combination of (a), (b), (c) and (d)
above.  Notwithstanding the foregoing, the Administrator shall accept
only such payment on exercise of an ISO as is permitted by Section 422 of
the Code.

    


    The Company shall then reasonably
promptly deliver the Shares as to which such Option was exercised to the
Participant (or to the Participant’s Survivors, as the case may
be).  In determining what constitutes “reasonably promptly,” it is
expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without
limitation, state securities or “blue sky” laws) which requires the Company to
take any action with respect to the Shares prior to their
issuance.  The Shares shall, upon delivery, be fully paid,
non-assessable Shares.

    


    The Administrator shall have the right
to accelerate the date of exercise of any installment of any Option; provided
that the Administrator shall not accelerate the exercise date of any installment
of any Option granted to any Employee as an ISO (and not previously converted
into a Non-Qualified Option pursuant to Paragraph 19) if such acceleration
would violate the annual vesting limitation contained in Section 422(d) of
the Code, as described in Paragraph 6.B.d.

    


    The Administrator may, in its
discretion, amend any term or condition of an outstanding Option provided
(i) such term or condition as amended is permitted by the Plan,
(ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant’s Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only
after the Administrator determines whether such amendment would constitute a
“modification” of any Option which is an ISO (as that term is defined in
Section 424(h) of the Code) or would cause any adverse tax consequences for
the holder of such ISO.

    


    


    
      	
              8.

            	
              RIGHTS AS A
      SHAREHOLDER.

            


    

    


    No Participant to whom an Option has
been granted shall have rights as a shareholder with respect to any Shares
covered by such Option, except after due exercise of the Option and tender of
the full purchase price for the Shares being purchased pursuant to such exercise
and registration of the Shares in the Company’s share register in the name of
the Participant. Any rights as to Restricted Stock shall be set forth in an
agreement between the Participant and the Company.

     

    


    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
              9.

            	
              ASSIGNABILITY AND
      TRANSFERABILITY OF OPTIONS.

            


    

    


    By its terms, an Option granted to a
Participant shall not be transferable by the Participant other than (i) by
will or by the laws of descent and distribution, or (ii) as approved by the
Administrator in its discretion and set forth in the applicable Option
Agreement.  Notwithstanding the foregoing, an ISO transferred except
in compliance with clause (i) above shall no longer qualify as an
ISO.  The designation of a beneficiary of an Option by a Participant,
with the prior approval of the Administrator and in such form as the
Administrator shall prescribe, shall not be deemed a transfer prohibited by this
Paragraph.  Except as provided above, an Option shall be exercisable,
during the Participant’s lifetime, only by such Participant (or by his or her
legal representative) and shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.  Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Option or of any
rights granted thereunder contrary to the provisions of this Plan, or the levy
of any attachment or similar process upon an Option, shall be null and
void.

    


    
      	
              10.

            	
              EFFECT OF TERMINATION
      OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH OR
      DISABILITY.

            


    

    


    Except as otherwise provided in a
Participant’s Option Agreement, in the event of a termination of service
(whether as an employee, director or consultant) with the Company or an
Affiliate before the Participant has exercised an Option, the following rules
apply:

    


    
      	
               
      

            	
              a.

            	
              A
      Participant who ceases to be an employee, director or consultant of the
      Company or of an Affiliate (for any reason other than termination “for
      cause”, Disability, or death for which events there are special rules in
      Paragraphs 11, 12, and 13, respectively), may exercise any Option granted
      to him or her to the extent that the Option is exercisable on the date of
      such termination of service, but only within such term as the
      Administrator has designated in a Participant’s Option
      Agreement.

            


    

    


    
      	
               
      

            	
              b.

            	
              Except
      as provided in Subparagraph (c) below, or Paragraph 12 or 13, in no event
      may an Option intended to be an ISO, be exercised later than three months
      after the Participant’s termination of
  employment.

            


    

    


    
      	
               
      

            	
              c.

            	
              The
      provisions of this Paragraph, and not the provisions of Paragraph 12 or
      13, shall apply to a Participant who subsequently becomes Disabled or dies
      after the termination of employment, director status or consultancy,
      provided, however, in the case of a Participant’s Disability or death
      within three months after the termination of employment, director status
      or consultancy, the Participant or the Participant’s Survivors may
      exercise the Option within one year after the date of the Participant’s
      termination of service, but in no event after the date of expiration of
      the term of the Option.

            


    

    


    
      	
               
      

            	
              d.

            	
              Notwithstanding
      anything herein to the contrary, if subsequent to a Participant’s
      termination of employment, termination of director status or termination
      of consultancy, but prior to the exercise of an Option, the Board of
      Directors determines that, either prior or subsequent to the Participant’s
      termination, the Participant engaged in conduct which would constitute
      “cause”, then such Participant shall forthwith cease to have any right to
      exercise any Option.

            


    

    


    
      	
               
      

            	
              e.

            	
              A
      Participant to whom an Option has been granted under the Plan who is
      absent from work with the Company or with an Affiliate because of
      temporary disability (any disability other than a permanent and total
      Disability as defined in Paragraph 1 hereof), or who is on leave of
      absence for any purpose, shall not, during the period of any such absence,
      be deemed, by virtue of such absence alone, to have terminated such
      Participant’s employment, director status or consultancy with the Company
      or with an Affiliate, except as the Administrator may otherwise expressly
      provide.

            


    

     

     

    
      


      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                f.

              	
                      
                  Except
      as required by law or as set forth in a Participant’s Option Agreement,
      Options granted under the Plan shall not be affected by any change of a
      Participant’s status within or among the Company and any Affiliates, so
      long as the Participant continues to be an employee, director or
      consultant of the Company or any
  Affiliate.

                

              


      

      
 

    

    
      	
              11.

            	
              EFFECT OF TERMINATION
      OF SERVICE “FOR CAUSE”.

            


    

    


    Except as otherwise provided in a
Participant’s Option Agreement, the following rules apply if the Participant’s
service (whether as an employee, director or consultant) with the Company or an
Affiliate is terminated “for cause” prior to the time that all his or her
outstanding Options have been exercised:

    


    
      	
               
      

            	
              a.

            	
              All
      outstanding and unexercised Options as of the time the Participant is
      notified his or her service is terminated “for cause” will immediately be
      forfeited.

            


    

    


    
      	
               
      

            	
              b.

            	
              For
      purposes of this Plan, “cause” shall include (and is not limited to)
      dishonesty with respect to the Company or any Affiliate, insubordination,
      substantial malfeasance or non-feasance of duty, unauthorized disclosure
      of confidential information, breach by the Participant of any provision of
      any employment, consulting, advisory, nondisclosure, non-competition or
      similar agreement between the Participant and the Company or any
      Affiliate, and conduct substantially prejudicial to the business of the
      Company or any Affiliate.  The determination of the
      Administrator as to the existence of “cause” will be conclusive on the
      Participant and the Company.

            


    

    


    
      	
               
      

            	
              c.

            	
              “Cause”
      is not limited to events which have occurred prior to a Participant’s
      termination of service, nor is it necessary that the Administrator’s
      finding of “cause” occur prior to termination.  If the
      Administrator determines, subsequent to a Participant’s termination of
      service but prior to the exercise of an Option, that either prior or
      subsequent to the Participant’s termination the Participant engaged in
      conduct which would constitute “cause,” then the right to exercise any
      Option is forfeited.

            


    

    


    
      	
               
      

            	
              d.

            	
              Any
      definition in an agreement between the Participant and the Company or an
      Affiliate, which contains a conflicting definition of “cause” for
      termination and which is in effect at the time of such termination, shall
      supersede the definition in this Plan with respect to that
      Participant.

            


    

    


    


    
      	
              12.

            	
              EFFECT OF TERMINATION
      OF SERVICE FOR DISABILITY.

            


    

    


    Except as otherwise provided in a
Participant’s Option Agreement, a Participant who ceases to be an employee,
director or consultant of the Company or of an Affiliate by reason of Disability
may exercise any Option granted to such Participant:

    


    
      	
               
      

            	
              a.

            	
              To
      the extent that the Option has become exercisable but has not been
      exercised on the date of Disability;
and

            


    

    


    
      	
               
      

            	
              b.

            	
              In
      the event rights to exercise the Option accrue periodically, to the extent
      of a pro rata portion through the date of Disability of any additional
      vesting rights that would have accrued on the next vesting date had the
      Participant not become Disabled.  The proration shall be based
      upon the number of days accrued in the current vesting period prior to the
      date of Disability.

            


    

    


    A Disabled Participant may exercise
such rights only within the period ending one year after the date of the
Participant’s termination of employment, directorship or consultancy, as the
case may be, notwithstanding that the Participant might have been able to
exercise the Option as to some or all of the Shares on a later date if the
Participant had not become Disabled and had continued to be an employee,
director or consultant or, if earlier, within the originally prescribed term of
the Option.

    


    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    The Administrator shall make the
determination both of whether Disability has occurred and the date of its
occurrence (unless a procedure for such determination is set forth in another
agreement between the Company and such Participant, in which case such procedure
shall be used for such determination).  If requested, the Participant
shall be examined by a physician selected or approved by the Administrator, the
cost of which examination shall be paid for by the Company.

    


    


    
      	
              13.

            	
              EFFECT OF DEATH WHILE
      AN EMPLOYEE, DIRECTOR OR
CONSULTANT.

            


    

    


    Except as otherwise provided in a
Participant’s Option Agreement, in the event of the death of a Participant while
the Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant’s
Survivors:

    


    
      	
               
      

            	
              a.

            	
              To
      the extent that the Option has become exercisable but has not been
      exercised on the date of death; and

            


    

    


    
      	
               
      

            	
              b.

            	
              In
      the event rights to exercise the Option accrue periodically, to the extent
      of a pro rata portion through the date of death of any additional vesting
      rights that would have accrued on the next vesting date had the
      Participant not died.  The proration shall be based upon the
      number of days accrued in the current vesting period prior to the
      Participant’s date of death.

            


    

    


    If the Participant’s Survivors wish to
exercise the Option, they must take all necessary steps to exercise the Option
within one year after the date of death of such Participant, notwithstanding
that the decedent might have been able to exercise the Option as to some or all
of the Shares on a later date if he or she had not died and had continued to be
an employee, director or consultant or, if earlier, within the originally
prescribed term of the Option.

    


    


    14.           PURCHASE FOR
INVESTMENT.

    


    Unless the offering and sale of the
Shares to be issued upon the particular exercise of an Option shall have been
effectively registered under the Securities Act of 1933, as now in force or
hereafter amended (the “1933 Act”), the Company shall be under no obligation to
issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled:

    


    
      	
               
      

            	
              a.

            	
              The
      person(s) who exercise(s) such Option shall warrant to the Company, prior
      to the receipt of such Shares, that such person(s) are acquiring such
      Shares for their own respective accounts, for investment, and not with a
      view to, or for sale in connection with, the distribution of any such
      Shares, in which event the person(s) acquiring such Shares shall be bound
      by the provisions of the following legend which shall be endorsed upon the
      certificate(s) evidencing their Shares issued pursuant to such exercise or
      such grant:

            


    

    


    
      	
               
      

            	
              “The
      shares represented by this certificate have been taken for investment and
      they may not be sold or otherwise transferred by any person, including a
      pledgee, unless (1) either (a) a Registration Statement with respect to
      such shares shall be effective under the Securities Act of 1933, as
      amended, or (b) the Company shall have received an opinion of counsel
      satisfactory to it that an exemption from registration under such Act is
      then available, and (2) there shall have been compliance with all
      applicable state securities laws.”

            


    

    


    
      	
               
      

            	
              b.

            	
              At
      the discretion of the Administrator, the Company shall have received an
      opinion of its counsel that the Shares may be issued upon such particular
      exercise in compliance with the 1933 Act without registration
      thereunder.

            


    

    


    


    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
              15.

            	
              DISSOLUTION OR
      LIQUIDATION OF THE COMPANY.

            


    

    


    Upon the dissolution or liquidation of
the Company, all Options granted under this Plan which as of such date shall not
have been exercised will terminate and become null and void; provided, however,
that if the rights of a Participant or a Participant’s Survivors have not
otherwise terminated and expired, the Participant or the Participant’s Survivors
will have the right immediately prior to such dissolution or liquidation to
exercise any Option to the extent that the Option is exercisable as of the date
immediately prior to such dissolution or liquidation.

    


    


    
      	
              16.

            	
              ADJUSTMENTS.

            


    

    


    Upon the occurrence of any of the
following events, a Participant’s rights with respect to any Option and
Restricted Stock granted to him or her hereunder which has not previously been
exercised in full shall be adjusted as hereinafter provided, unless otherwise
specifically provided in the Participant’s Equity Agreement:

    


    A.           Stock Dividends and Stock
Splits.  If (i) the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock deliverable upon the exercise of such Option or grant of Restricted
Stock may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made including, in the purchase price per share,
to reflect such events.  The number of Shares subject to options to be
granted to directors pursuant to Paragraph 6(A)(e) shall also be proportionately
adjusted upon the occurrence of such events.

    


    B.           Corporate
Transactions.  If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company’s assets other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the Administrator or the board of
directors of any entity assuming the obligations of the Company hereunder (the
“Successor Board”), shall, as to outstanding Options and Restricted Stock,
either (i) make appropriate provision for the continuation of such Options
or Restricted Stock by substituting on an equitable basis for the Shares then
subject to such Options and Restricted Stock either the consideration payable
with respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or
(ii) upon written notice to the Participants, provide that all Options must
be exercised (either to the extent then exercisable or, at the discretion of the
Administrator or, upon a change of control of the Company, all Options being
made fully exercisable for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which period the
Options shall terminate; or (iii) terminate all Options and Restricted
Stock in exchange for a cash payment equal to the excess of the Fair Market
Value of the Shares subject to such Options and Restricted Stock (either to the
extent then exercisable or, at the discretion of the Administrator, all Options
being made fully exercisable for purposes of this Subparagraph) over the
exercise price thereof and all Restricted Stock grants then being fully
vested.

    


    C.           Recapitalization or
Reorganization.  In the event of a recapitalization or
reorganization of the Company other than a Corporate Transaction pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, a Participant upon exercising
an Option after the recapitalization or reorganization shall be entitled to
receive for the purchase price paid upon such exercise the number of replacement
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization.

    


    D.           Modification of
ISOs.  Notwithstanding the foregoing, any adjustments made
pursuant to Subparagraph A, B or C above with respect to ISOs shall be made only
after the Administrator determines whether such adjustments would constitute a
“modification” of such ISOs (as that term is defined in Section 424(h) of
the Code) or would cause any adverse tax consequences for the holders of such
ISOs.  If the Administrator determines that such adjustments made with
respect to ISOs would constitute a modification of such ISOs, it may refrain
from making such adjustments, unless the holder of an ISO specifically requests
in writing that such adjustment be made and such writing indicates that the
holder has full knowledge of the consequences of such “modification” on his or
her income tax treatment with respect to the ISO.

    


    


    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      	
              17.

            	
              ISSUANCES OF
      SECURITIES.

            


    

    


    Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options or Restricted Stock.  Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.

    


    


    
      	
              18.

            	
              FRACTIONAL
      SHARES.

            


    

    


    No fractional shares shall be issued
under the Plan and the person exercising such right shall receive from the
Company cash in lieu of such fractional shares equal to the Fair Market Value
thereof.

    


    


    
      	
              19.

            	
              CONVERSION OF ISOs
      INTO NON-QUALIFIED OPTIONS; TERMINATION OF
  ISOs.

            


    

    


    The Administrator, at the written
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified Options at any
time prior to the expiration of such ISOs, regardless of whether the Participant
is an employee of the Company or an Affiliate at the time of such
conversion.  At the time of such conversion, the Administrator (with
the consent of the Participant) may impose such conditions on the exercise of
the resulting Non-Qualified Options as the Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan.  Nothing in the Plan shall be deemed to give any Participant the
right to have such Participant’s ISOs converted into Non-Qualified Options, and
no such conversion shall occur until and unless the Administrator takes
appropriate action.  The Administrator, with the consent of the
Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

    


    


    
      	
              20.

            	
              WITHHOLDING.

            


    

    


    In the event that any federal, state,
or local income taxes, employment taxes, Federal Insurance Contributions Act
(“F.I.C.A.”) withholdings or other amounts are required by applicable law or
governmental regulation to be withheld from the Participant’s salary, wages or
other remuneration in connection with the exercise of an Option, receipt of
Restricted Stock  or a Disqualifying Disposition (as defined in
Paragraph 21), the Company may withhold from the Participant’s compensation, if
any, or may require that the Participant advance in cash to the Company, or to
any Affiliate of the Company which employs or employed the Participant, the
statutory minimum amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted by
law).  For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in the manner
provided in Paragraph 1 above, as of the most recent practicable date prior to
the date of exercise.  If the fair market value of the shares withheld
is less than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate
employer.  The Administrator in its discretion may condition the
exercise of an Option for less than the then Fair Market Value on the
Participant’s payment of such additional withholding.

    


    


    
      	
              21.

            	
              NOTICE TO COMPANY OF
      DISQUALIFYING DISPOSITION.

            


    

    


    Each Employee who receives an ISO must
agree to notify the Company in writing immediately after the Employee makes a
Disqualifying Disposition of any shares acquired pursuant to the exercise of an
ISO.  A Disqualifying Disposition is defined in Section 424(c) of the
Code and includes any disposition (including any sale or gift) of such shares
before the later of (a) two years after the date the Employee was granted
the ISO, or (b) one year after the date the Employee acquired Shares by
exercising the ISO, except as otherwise provided in Section 424(c) of the
Code.  If the Employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition can
occur thereafter.

    


    


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
              22.

            	
              TERMINATION OF THE
      PLAN.

            


    

    


    The Plan will terminate on December 31,
2013, the date which is ten years from the earlier of the date
of its adoption by the Board of Directors and the date of its approval by the
shareholders.  The Plan may be terminated at an earlier date by vote
of the shareholders or the Board of Directors of the Company; provided, however,
that any such earlier termination shall not affect any Equity Agreements
executed prior to the effective date of such termination.

    


    


    
      	
              23.

            	
              AMENDMENT OF THE PLAN
      AND AGREEMENTS.

            


    

    


    The Plan may be amended by the
shareholders of the Company.  The Plan may also be amended by the
Administrator, including, without limitation, to the extent necessary to qualify
any or all outstanding Options granted under the Plan or Options to be granted
under the Plan for favorable federal income tax treatment (including deferral of
taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code, and to the extent necessary to qualify the shares
issuable upon exercise of any outstanding Options granted, or Options to be
granted, or Restricted Stock under the Plan for listing on any national
securities exchange or quotation in any national automated quotation system of
securities dealers.  Any amendment approved by the Administrator which
the Administrator determines is of a scope that requires shareholder approval
shall be subject to obtaining such shareholder approval.  Any
modification or amendment of the Plan shall not, without the consent of a
Participant, adversely affect his or her rights under an Equity Agreement
previously granted to him or her.  With the consent of the Participant
affected, the Administrator may amend outstanding Equity Agreements in a manner
which may be adverse to the Participant but which is not inconsistent with the
Plan.  In the discretion of the Administrator, outstanding Equity
Agreements may be amended by the Administrator in a manner which is not adverse
to the Participant.

    


    


    
      	
              24.

            	
              EMPLOYMENT OR OTHER
      RELATIONSHIP.

            


    

    


    Nothing in this Plan or any Equity
Agreement shall be deemed to prevent the Company or an Affiliate from
terminating the employment, consultancy or director status of a Participant, nor
to prevent a Participant from terminating his or her own employment, consultancy
or director status or to give any Participant a right to be retained in
employment or other service by the Company or any Affiliate for any period of
time.

    


    


    
      	
              25.

            	
              GOVERNING
      LAW.

            


    

    


    
    

    This Plan shall be construed and
enforced in accordance with the law of the State of Delaware. 

    
 

    

      
        
           

        

        
          12