Unassociated Document


    NON-QUALIFIED STOCK OPTION
AGREEMENT

    


    Under

    The
China Infrastructure Construction Corporation 2010 Stock Incentive
Plan

    


    AGREEMENT
(“Agreement”),
dated February 12, 2010 by and between China Infrastructure Construction
Corporation, a Colorado corporation (the “Company”), and Mr.
Rong Yang (the “Participant”).

     

    Preliminary
Statement

     

    The Board
of Directors of the Company (the “Board”) has appointed
a committee (the “Committee”) to
administer the China Infrastructure Construction Corporation 2010 Stock
Incentive Plan (the “Plan”), has
authorized this grant of a non-qualified stock option (the “Option”) on February
12, 2010 (the “Grant
Date”) to purchase the number of shares of the Company’s common stock, no
par value (the “Common
Stock”) set forth below to the Participant, as a Eligible Employee of the
Company or an Affiliate (collectively, the Company and all Subsidiaries and
Parents of the Company shall be referred to as the “Employer”).

     

    Unless
otherwise indicated, any capitalized term used but not defined herein shall have
the meaning ascribed to such term in the Plan. For the convenience of the
Participant, capitalized terms used but not defined herein and defined in the
Plan have been set forth hereto in Schedule A. A copy of
the Plan has been delivered to the Participant. By signing and returning this
Agreement, the Participant (i) acknowledges having received and read a copy of
the Plan and this Agreement, (ii) agrees to comply with the Plan, this Agreement
and all applicable laws and regulations, (iii) acknowledges that the Company has
not provided any tax advice to the Participant regarding the grant or future
exercise of the Option or the subsequent sale or transfer of shares of Common
Stock issuable hereunder, and (iv) understands that the Participant should
consult with the Participant’s personal financial, accounting and tax advisors
regarding the same to the extent the Participant deems necessary.

     

    Accordingly,
the parties hereto agree as follows:

     

    1.     Grant of
Option.             
The Company hereby grants to
Optionee, an Option to purchase  400,000 shares (“Shares”) of its
Common Stock in the manner and subject to the conditions provided
hereinafter.

    


    2.    Vesting and
Exercise.

    


    (a)   The
Shares underlying the Option shall vest at the time of and shall have an
exercise price (the “Option Exercise Price”) as set forth in Exhibit A attached
hereto, which is the Fair Market Value or higher of a share of Common Stock on
the Grant Date. The Option shall vest proportionately in the periods prior to
each vesting date. To the extent that such portion of the Option has become
vested and is exercisable as provided herein, the Option may thereafter be
exercised by the Participant, in whole or in part, at any time or from time to
time prior to the expiration of the Option as provided herein and in accordance
with Sections 6.3(c) and 6.3(d) of the Plan, including, without limitation, by
the filing of any written form of exercise notice as may be required by the
Committee and payment in full of the Option Exercise Price multiplied by the
number of shares of Common Stock underlying the portion of the Option exercised.
Upon expiration of the Option, the Option shall be canceled and no longer
exercisable.

    


    (b)  (i) At the election of the
Optionee and with the approval of the Committee, all or any part of the Option
that has vested and have not been earlier terminated may be exercised in lieu of
making the cash payment to the Company of the aggregate Option Exercise Price by
electing instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (“Cashless
Exercise”):

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Net
Number = (A x (B - C))/B

     

    (ii)         For
purposes of the foregoing formula:

    


    A= the
total number of shares with respect to which the Option is then being
exercised.

    B= the
last reported sale price (as reported by Bloomberg) of the Common Stock on the
trading day immediately preceding the date of the date of receipt by the Company
of the exercise representation letter attached hereto as Exhibit B (the
“Exercise Representation Letter”).

    C= the
Option Exercise Price then in effect at the time of such exercise.

    


    3.     Time of
Exercise of Option.            Except as otherwise provided in this
Agreement, any portion of the Option which has vested may be exercised;
provided, however, no portion of the Option may be
exercised 5 years after their respective date of
vesting (“Vesting Expiration Date”) and any portion of the Option that has not
been exercised on or prior to the Vesting Expiration Date shall be automatically
forfeited and of no further effect without any action by the Company or the
Committee (a “Vesting Expiration”).

    


    4.     Method of
Exercise.       All or a portion of the Option may be
exercised by payment of the Option Exercise Price in cash or Cashless Exercise
by the Optionee, unless another form of payment is authorized by the Committee.
In the event of payment of the Option Exercise Price by check, the Option shall
not be considered exercised until receipt of cleared funds by the Company upon
deposit of the check.

    


    5.     Restrictions
on Exercise and Delivery.        Exercise of the Option, or any portion
thereof, shall be subject to the conditions set forth below as determined by the
Committee in its sole and absolute discretion:

    


    (a)   the satisfaction of any withholding tax
or other withholding liabilities, is necessary or desirable as a condition of,
or in connection with, such exercise or the delivery or purchase of Shares
pursuant thereto,

    


    (b)   the listing, registration, or
qualification of any Shares deliverable upon such exercise is desirable or
necessary, under any state or federal law, as a condition of, or in connection
with, such exercise or the delivery or purchase of Shares pursuant thereto,
or

    


    (c)   the consent or approval of any
regulatory body is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of any Shares pursuant
thereto,

    


    then in
any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
Optionee shall execute such documents and take such other actions as are
required by the Committee to enable it to effect or obtain such withholding,
listing, registration, qualification, consent or approval. Neither the Company
nor any officer or director, or member of the Committee, shall have any
liability with respect to the non-issuance of any portion of the Shares on
exercise or failure to sell any Shares as the result of any suspensions of
exercisability imposed pursuant to this Section.

    


    6. Expiration
of Option.         Notwithstanding any other provision in
this Agreement, to the extent not previously exercised, the Option (or the
relevant portion thereof) shall terminate upon the first to occur of any of the
following events (the “Expiration Date”):

    


    (a)   the
dissolution or liquidation of the Company;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (b)  at the time of a breach by Optionee of
any material provision of the Optionee’s Employment Agreement with the Company
or any other written agreement between the Optionee and the Company;
or

    


    (c)   any portion of the Option that
terminate pursuant to a Vesting Expiration.

    


    7.    Termination
of Service.
Notwithstanding any other provision in this Agreement, if the Optionee’s
employment terminates, any portion of the Option which has vested shall expire
on the earliest of the following occasions (or such later date as the Committee
may determine):

    


    (a)   the Expiration
Date;

    


    (b)  the date three (3) months after the
termination of the Optionee’s employment for any reason other than for Cause
(including Disability (as defined in Section 22(e)(3) of the Internal Revenue
Code), death and retirement);

    


    (c)   the date of the Optionee’s termination
of employment for Cause (as such term is defined in the Optionee’s Employment
Agreement with the Company, or if no Employment Agreement has been executed, as
defined herein).

    


    After the
date Optionee’s employment terminates, the Optionee (or in the case of the
Optionee’s death or Disability, the Optionee’s representative) may exercise all
or any portion of the Option which has vested at any time before its (i)
expiration under the preceding sentence or (ii) termination by operation of any
of the events in paragraph 5 hereof. When the Optionee’s employment terminates,
any portion of this Option which has not vested shall expire immediately without
any further action by the Committee or the Company.

    


    8.    Assignability.   This Option may not be sold, pledged,
assigned or transferred (except by will or the laws of descent and distribution)
unless with the written consent of the Company.

    


    9.    Representation
Letter.     Upon exercise of all or any part of the
Option, the Optionee will deliver to the Company the Exercise Representation
Letter substantially the same as the one set forth on Exhibit B hereto, as such
Exhibit may be amended by the Committee from time to time. Optionee also agrees
to make such other representations as are deemed necessary or appropriate by the
Company and its counsel.

    


    10.  Rights as
Shareholder.  Neither Optionee nor his or her
executor, administrator, heirs or legatees, shall be, or have any rights or
privileges of a shareholder of the Company in respect of the Shares unless and
until certificates representing such Shares shall have been issued in Optionee's
name.

    


    11.  No Right of
Employment.          
Neither the grant nor exercise of
any Option nor anything in the Plan or this Agreement shall impose upon the
Company any obligation to employ or continue to employ any Optionee. The right
of the Company to terminate any employee shall not be diminished or affected
because an Option has been granted to such employee.

    


    12.  Mandatory
Arbitration.             In
the event of any dispute between the Company and Optionee regarding this
Agreement, the dispute and any issue as to the arbitrability of such dispute,
shall be settled to the exclusion of a court of law, by arbitration in New York
City, New York by a panel of three arbitrators (each party shall choose one
arbitrator and the third shall be chosen by the two arbitrators so selected) in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The decision of a majority of the arbitrators shall
be final and binding upon the parties. All costs of the arbitration and the fees
of the arbitrators shall be allocated between the parties as determined by a
majority of the arbitrators, it being the intention of the parties that the
prevailing party in such a proceeding be made whole with respect to its
expenses.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    13.  The
Company’s Rights. The
existence of the Option shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or other stocks with preference ahead of
or convertible into, or otherwise affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of the Company's assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.

    


    14.  Optionee. Whenever the word “Optionee” is used
in any provision of this Agreement under circumstances where the provision
should logically be construed, as determined by the Committee, to apply to the
estate, personal representative, beneficiary to whom the Option or Shares may be
transferred by will or by the laws of descent and distribution, or another
permitted transferee, the word “Optionee” shall be deemed to include such
person.

    


    15.  Conformity
with Plan. This Agreement
is intended to conform in all respects with, and is subject to all applicable
provisions of, the Plan. Inconsistencies between this Agreement and the Plan
shall be resolved in accordance with the terms of the Plan. In the event of any
ambiguity in this Agreement or any matters as to which this Agreement is silent,
the Plan shall govern. A copy of the Plan is provided to Optionee with this
Agreement as Exhibit C.

    


    16.  Section
409A Compliance. To the
extent applicable, the Board or the Committee may at any time and from time to
time amend, in whole or in part, any or all of the provisions of this Agreement
(in a manner determined by the Board or Committee in its sole discretion) solely
to comply with Section 409A of the Code and the regulations promulgated
thereunder, subject to the terms and conditions of the Plan.

    


    17.  Notices. All notices and other communications
made or given pursuant to this Agreement shall be in writing and shall be
sufficiently made or given if hand delivered or mailed by certified mail,
addressed to the Optionee at the address contained in the records of the
Company, or addressed to the Committee, care of the Company to the attention of
its Corporate Secretary at its principal office or, if the receiving party
consents in advance, transmitted and received via telecopy or via such other
electronic transmission mechanism as may be available to the
parties.

    


    18.  Binding
Effect. This Agreement
shall be binding upon and inure to the benefit of Optionee, his heirs and
successors, and of the Company, its successors and assigns.
 

    


    19.  Governing
Law. This Agreement shall
be governed by the laws of the State of New York, without giving effect to
principles of conflicts of laws.

    


    20.  Descriptive
Headings.     Titles to Sections are solely for
informational purposes.

    


    [Remainder
of the Page Intentionally Left Blank]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall
be February 13, 2010.

    


    
      
        
          
            	
                    CHINA
      INFRASTRUCTURE CONSTRUCTION CORPORATION,

                  
	
                    a
      Colorado corporation

                  
	 
      	 
      
	
                    By:

                  	
                      
      Yiru Shi

                  
	
                    Its:

                  	
                      
      Chief Financial Officer

                  
	 
      	 
      
	
                    OPTIONEE

                  
	 
      	 
      
	
                      

                  
	
                    Rong
      Yang   

                  
	 
      


          

        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    VESTING
SCHEDULE AND OPTION EXERCISE PRICE

    


    
      
        
          
            
              
                
                  
                    	
                            Number of Shares

                          	 	
                            Vesting Date

                          	 	
                            Exercise Price per Share

                          	 
	
                            200,000

                          	 	
                            February
      13, 2011

                          	 	$	3.9	 
	
                            200,000

                          	 	
                            February
      13, 2012

                          	 	$	3.9	 


                  

                

              

            

          

        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B

    


    ______________,
20___

    


    China
Infrastructure Construction Corporation

    


    Re:        
 Stock Option
Exercise

    


    To Whom
It May Concern:

    


    I (the
“Optionee”) hereby exercise my right to purchase ________ shares of common stock
(the “Shares”) of China Infrastructure Construction Corporation, a Colorado
corporation (the “Company”), pursuant to, and in accordance with, an option
agreement dated _______________, 20__ (the “Agreement”). As provided in such
Agreement, I deliver herewith payment as set forth in the Agreement in the
amount of the aggregate option exercise price. Please deliver to me at my
address as set forth above stock certificates representing the subject shares
registered in my name.

    


    The
Optionee hereby represents and agrees as follows:

    


    1.            The Optionee acknowledges receipt of a
copy of the Agreement. The Optionee has carefully reviewed the
Agreement.

    


    2.            The Optionee is a resident of
__________.

    


    3.            The Optionee represents and agrees that
if the Optionee is an “affiliate” (as defined in Rule 144 under the Securities
Act of 1933) of the Company at the time the Optionee desires to sell any of the
Shares, the Optionee will be subject to certain restrictions under, and will
comply with all of the requirements of, applicable federal and state securities
laws.

    


    The
foregoing representations and warranties are given on ________ at
_____________________.

    


    ___
Optionee encloses a check in the amount of $ ______________ for the payment of
the aggregate amount of the Option Exercise Price.

    


    ___
Optionee elects a Cashless Exercise for __________Option Shares.

    


    
      
        
          	
                  OPTIONEE:

                
	 
      
	
                    

                


        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
C

    


    China
Infrastructure Construction Corporation 2010 Stock Incentive Plan

    


    SCHEDULE
A

     

    The
following terms used but not defined in the Agreement and defined in the Plan
have been provided below for the convenience of the Participant but are
qualified in their entirety by the full text of such terms in the
Plan.

     

    A.        
“Acquisition
Event” means a merger or consolidation in
which the Company is not the surviving entity, any transaction that results in
the acquisition of all or substantially all of the Company’s outstanding Common
Stock by a single person or entity or by a group of persons and/or entities
acting in concert, or the sale or transfer of all or substantially all of the
Company’s assets.

     

    B.        
“Affiliate” means each of the following:
(a) any Subsidiary; (b) any Parent; (c) any corporation, trade or
business (including, without limitation, a partnership or limited liability
company) which is directly or indirectly controlled 50% or more (whether by
ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company; (d) any corporation, trade or business (including,
without limitation, a partnership or limited liability company) which directly
or indirectly controls 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) of the Company; and
(e) any other entity in which the Company or any of its Affiliates has a
material equity interest and which is designated as an “Affiliate” by resolution
of the Committee; provided that the Common Stock subject to any Award
constitutes “service recipient stock” for purposes of Section 409A of the Code
or otherwise does not subject the Award to Section 409A of the
Code.

     

    C.        
“Appreciation
Award” means any Award under this Plan of any
Stock Option, Stock Appreciation Right or Other Stock-Based Award, provided that
such Other Stock-Based Award is based on the appreciation in value of a share of
Common Stock in excess of an amount equal to at least the Fair Market Value of
the Common Stock on the date such Other Stock-Based Award is
granted.

     

    D.        
“Award” means any award under this Plan of any
Stock Option, Stock Appreciation Right, Restricted Stock, Performance Share,
Other Stock-Based Award or Performance-Based Cash Awards. All Awards shall be
granted by, confirmed by, and subject to the terms of, a written agreement
executed by the Company and the Participant.

     

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

     

    F.        
“Cause” means with respect to a
Participant’s Termination of Employment or Termination of Consultancy from and
after the date hereof, the following: (a) in the case where there is no
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define “cause” (or words of like import)), termination
due to: (i) a Participant’s conviction of, or plea of guilty or nolo contendere
to, a felony; (ii) perpetration by a Participant of an illegal act, or fraud
which could cause significant economic injury to the Company; (iii) continuing
willful and deliberate failure by the Participant to perform the Participant’s
duties in any material respect, provided that the Participant is given notice
and an opportunity to effectuate a cure as determined by the Committee; or (iv)
a Participant’s willful misconduct with regard to the Company that could have a
material adverse effect on the Company; or (b) in the case where there is an
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines “cause” (or words
of like import), “cause” as defined under such agreement; provided, however,
that with regard to any agreement under which the definition of “cause” only
applies on occurrence of a change in control, such definition of “cause” shall
not apply until a change in control actually takes place and then only with
regard to a termination thereafter. With respect to a Participant’s Termination
of Directorship, “cause” means an act or failure to act that constitutes cause
for removal of a director under applicable Delaware law.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    G.        
“Change
in Control” has the meaning set forth in Section
13.2 of the Plan.

     

    H.        
“Change
in Control Price” has the meaning set forth in Section
13.1 of the Plan.

     

    I.          
“Code” means the Internal Revenue Code of
1986, as amended. Any reference to any section of the Code shall also be a
reference to any successor provision and any Treasury Regulation promulgated
thereunder.

     

    J.        
“Committee” means: (a) with respect to the
application of this Plan to Eligible Employees and Consultants, a committee or
subcommittee of the Board appointed from time to time by the Board, which
committee or subcommittee shall consist of two or more non-employee directors,
each of whom shall be (i) a “non-employee director” as defined in Rule 16b-3;
(ii) to the extent required by Section 162(m) of the Code, an “outside director”
as defined under Section 162(m) of the Code; and (iii) an “independent director”
for purposes of the applicable stock exchange rules; and (b) with respect
to the application of this Plan to Non-Employee Directors, the Board. To the
extent that no Committee exists that has the authority to administer this Plan,
the functions of the Committee shall be exercised by the Board. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance shall not affect the validity of
Awards, grants, interpretations or other actions of the
Committee.

     

    K.        
“Common
Stock” means the common stock, no par value,
of the Company.

     

    L.       
  “Company” means China Infrastructure
Construction Corporation, a Colorado corporation, and its successors by
operation of law.

     

    M.       
“Consultant” means any individual or entity who
provides bona fide consulting or advisory services to the Company or its
Affiliates pursuant to a written agreement, which are not in connection with the
offer and sale of securities in a capital-raising
transaction.

     

    N.        
 “Disability” means with respect to a Participant’s
Termination, a permanent and total disability as defined in Section 22(e)(3) of
the Code. A Disability shall only be deemed to occur at the time of the
determination by the Committee of the Disability. Notwithstanding the foregoing,
for Awards that are subject to Section 409A of the Code, Disability shall mean
that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the
Code.

    


    O.        
“Effective
Date” means the effective date of this Plan
as defined in Article XVII.

     

    P.        
“Eligible
Employees” means each employee of the Company or
an Affiliate.

     

    Q.        
“Exchange
Act” means the Securities Exchange Act of
1934, as amended. Any references to any section of the Exchange Act shall also
be a reference to any successor provision.

     

    R.        
“Fair
Market Value”
means, unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, as of any date and except as provided below, the
last sales price reported for the Common Stock on the applicable date: (a) as
reported on the principal national securities exchange in the United States on
which it is then traded, or (b) if the Common Stock is not traded, listed or
otherwise reported or quoted, the Committee shall determine in good faith the
Fair Market Value in whatever manner it considers appropriate taking into
account the requirements of Section 409A of the Code. For purposes of the grant
of any Award, the applicable date shall be the trading day immediately prior to
the date on which the Award is granted. For purposes of the exercise of any
Award, the applicable date shall be the date a notice of exercise is received by
the Committee or, if not a day on which the applicable market is open, the next
day that it is open.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    S.         
“Family
Member” means “family member” as defined in
Section A.1.(5) of the general instructions of Form S-8.

     

    T.         
“GAAP” has the meaning set forth in Section
11.2(c)(ii).

     

    U.        
“Incentive
Stock Option” means any Stock Option awarded to an
Eligible Employee of the Company, its Subsidiaries and its Parent (if any) under
this Plan intended to be and designated as an “Incentive Stock Option” within
the meaning of Section 422 of the Code.

     

    V.        
“Non-Employee
Director” means a director of the Company who is
not an active employee of the Company or an Affiliate.

     

    W.       
“Non-Qualified
Stock Option” means any Stock Option awarded under
this Plan that is not an Incentive Stock Option.

     

    X.        
“Other
Stock-Based Award” means an Award under Article X of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock, including, without limitation, a restricted
stock unit or an Award valued by reference to an Affiliate.

    


    Y.         
“Parent” means any parent corporation of the
Company within the meaning of Section 424(e) of the Code.

     

    Z.         
“Participant” means an Eligible Employee,
Non-Employee Director or Consultant to whom an Award has been granted pursuant
to the Plan.

     

    AA.      
“Performance-Based
Cash Award” means a cash Award under Article XI of
this Plan that is payable or otherwise based on the attainment of certain
pre-established performance goals during a Performance
Period.

     

    BB.      “Performance
Goals” mean such
performance goals as determined in writing by the Committee.

     

    CC.      “Performance
Period” means the duration of the period
during which receipt of an Award is subject to the satisfaction of performance
criteria, such period as determined by the Committee in its sole
discretion.

     

    DD.      
“Performance
Share” means an Award made pursuant to
Article IX of this Plan of the right to receive Common Stock or cash of an
equivalent value at the end of a specified Performance
Period.

     

    EE.       
“Person” means any individual, corporation,
partnership, limited liability company, firm, joint venture, association,
joint-stock company, trust, incorporated organization, governmental or
regulatory or other entity.

     

    FF.       
“Plan” means this China
Infrastructure Construction Corporation 2010 Stock Incentive Plan, as amended
from time to time.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    GG.     
“Reference
Stock Option” has the meaning set forth in Section
7.1 of the Plan.

     

    HH.      “Restricted
Stock” means an Award of shares of Common
Stock under this Plan that is subject to restrictions under Article
VIII.

     

    II.         
“Restriction
Period” has the meaning set forth in
Subsection 8.3(a) of the Plan.

     

    JJ.       
“Rule
16b-3” means Rule 16b-3 under Section 16(b)
of the Exchange Act as then in effect or any successor
provision.

     

    KK.      “Section
162(m) of the Code” means the exception for
performance-based compensation under Section 162(m) of the Code and any
applicable Treasury regulations thereunder.

     

    LL.     
 “Section
409A of the Code” means the nonqualified deferred
compensation rules under Section 409A of the Code and any applicable Treasury
regulations thereunder.

     

    MM.    
“Securities
Act” means the Securities Act of 1933, as
amended and all rules and regulations promulgated thereunder. Any reference to
any section of the Securities Act shall also be a reference to any successor
provision.

    


    NN.     
“Stock
Appreciation Right” means the right pursuant to an Award
granted under Article VII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for cash or a number of shares of Common Stock (as determined by the
Committee, in its sole discretion, on the date of grant) equal to the difference
between (a) the Fair Market Value on the date such Stock Option (or such
portion thereof) is surrendered, of the Common Stock covered by such Stock
Option (or such portion thereof), and (b) the aggregate exercise price of
such Stock Option (or such portion thereof). A Non-Tandem Stock Appreciation
Right shall mean the right to receive cash or a number of shares of Common Stock
(as determined by the Committee, in its sole discretion, on the date of grant)
equal to the difference between (i) the Fair Market Value of a share of
Common Stock on the date such right is exercised, and (ii) the aggregate
exercise price of such right, otherwise than on surrender of a Stock
Option.

     

    OO.      “Stock
Option” or “Option” means any option to purchase shares of
Common Stock granted to Eligible Employees, Non-Employee Directors or
Consultants granted pursuant to Article VI of the Plan.

     

    PP.      
“Subsidiary” means any subsidiary corporation of
the Company within the meaning of Section 424(f) of the
Code.

     

    QQ.      “Ten
Percent Stockholder” means a person owning stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, its Subsidiaries or its Parent.

     

    RR.     
“Termination” means a Termination of Consultancy,
Termination of Directorship or Termination of Employment, as
applicable.

     

    SS.      
“Termination
of Consultancy”
means: (a) that the Consultant is no longer acting as a consultant to the
Company or an Affiliate; or (b) when an entity which is retaining a Participant
as a Consultant ceases to be an Affiliate unless the Participant otherwise is,
or thereupon becomes, a Consultant to the Company or another Affiliate at the
time the entity ceases to be an Affiliate. In the event that a Consultant
becomes an Eligible Employee or a Non-Employee Director upon the termination of
his or her consultancy, unless otherwise determined by the Committee, in its
sole discretion, no Termination of Consultancy shall be deemed to occur until
such time as such Consultant is no longer a Consultant, an Eligible Employee or
a Non-Employee Director. Notwithstanding the foregoing, the Committee may, in
its sole discretion, otherwise define Termination of Consultancy in the Award
agreement or, if no rights of a Participant are reduced, may otherwise define
Termination of Consultancy thereafter.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TT.      
“Termination
of Directorship” means that the Non-Employee Director
has ceased to be a director of the Company; except that if a Non-Employee
Director becomes an Eligible Employee or a Consultant upon the termination of
his or her directorship, his or her ceasing to be a director of the Company
shall not be treated as a Termination of Directorship unless and until the
Participant has a Termination of Employment or Termination of Consultancy, as
the case may be.

    


    UU.      
“Termination
of Employment” means: (a) a termination of
employment (for reasons other than a military or personal leave of absence
granted by the Company) of a Participant from the Company and its Affiliates; or
(b) when an entity which is employing a Participant ceases to be an
Affiliate, unless the Participant otherwise is, or thereupon becomes, employed
by the Company or another Affiliate at the time the entity ceases to be an
Affiliate. In the event that an Eligible Employee becomes a Consultant or a
Non-Employee Director upon the termination of his or her employment, unless
otherwise determined by the Committee, in its sole discretion, no Termination of
Employment shall be deemed to occur until such time as such Eligible Employee is
no longer an Eligible Employee, a Consultant or a Non-Employee Director.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
otherwise define Termination of Employment in the Award agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Employment thereafter.

     

    VV.     
“Transfer” means: (a) when used as a noun, any
direct or indirect transfer, sale, assignment, pledge, hypothecation,
encumbrance or other disposition (including the issuance of equity in a Person),
whether for value or no value and whether voluntary or involuntary (including by
operation of law), and (b) when used as a verb, to directly or indirectly
transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise
dispose of (including the issuance of equity in a Person) whether for value or
for no value and whether voluntarily or involuntarily (including by operation of
law). “Transferred” and “Transferrable” shall have a correlative
meaning