Unassociated Document


    EXHIBIT
      10.1

    


     

    ACORN
      FACTOR, INC.

    2006
      STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

    


    1.     Purpose

     

    The
      purpose of the Acorn Factor, Inc. 2006 Stock Option Plan for Non-Employee
      Directors (the "Plan") is to promote the interests of Acorn Factor, Inc. (the
      "Company") and its stockholders by increasing the proprietary and vested
      interest of non-employee directors in the growth and performance of the Company
      by granting such directors options to purchase shares of the Common Stock,
      par
      value $.01 per share, of the Company (the "Shares").

     

    2.     Administration

     

    The
      Plan
      shall be administered by the Company's Board of Directors (the "Board"). Subject
      to the provisions of the Plan, the Board shall be authorized to interpret the
      Plan, to establish, amend, and rescind any rules and regulations relating to
      the
      Plan and to make all other determinations necessary or advisable for the
      administration of the Plan. The determinations of the Board in the
      administration of the Plan, as described herein, shall be final and conclusive.
      The Secretary of the Company shall be authorized to implement the Plan in
      accordance with its terms and to take such actions of a ministerial nature
      as
      shall be necessary to effectuate the intent and purposes thereof. The validity,
      construction and effect of the Plan and any rules and regulations relating
      to
      the Plan shall be determined in accordance with the laws of the State of
      Delaware.

     

    3.     Eligibility

     

    The
      class
      of individuals eligible to receive grants of options under the Plan shall be
      directors of the Company who are not employees of the Company or its affiliates
      ("Eligible Directors"). Any holder of an option granted hereunder shall
      hereinafter be referred to as a "Participant".

     

    4.     Shares
      Subject to the Plan

     

    Subject
      to adjustment as provided in Section 6, an aggregate of 200,000 Shares shall
      be
      available for issuance upon the exercise of options granted under the Plan.
      The
      Shares deliverable upon the exercise of options may be made available from
      authorized but unissued Shares or treasury Shares. If any option granted under
      the Plan shall terminate for any reason without having been exercised, the
      Shares subject to, but not delivered under, such option shall be available
      for
      other options. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.     Grant,
      Terms and Conditions of Options

     

    (a) Upon
      first election or appointment to the Board, each newly elected Eligible Director
      will be granted an option to purchase 25,000 Shares. Each option granted under
      this Section 5(a) shall vest for the purchase of one-third of the Shares
      purchasable under such option on each of the three anniversaries following
      the
      date of election or appointment.

     

    (b) Immediately
      following each Annual Meeting of Stockholders, commencing with the meeting
      first
      held after the date of adoption of this Plan, each Eligible Director, other
      than
      an Eligible Director first elected to the Board within the four months
      immediately preceding and including such meeting, will be granted an option
      to
      purchase 7,500 Shares as of the date of such meeting. The Shares shall vest
      on
      the date that is one year from the date of the meeting.

     

    (c) In
      addition to the grants provided for in Sections 5(a) and 5(b) above, the Board
      may make such additional grants of options to Eligible Directors on such terms
      as it may decide, from time to time.

     

    (d) The
      options granted will be nonstatutory stock options not intended to qualify
      under
      Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
      shall have the following terms and conditions:

     

    (i)
      Price.
      The
      purchase price per Share deliverable upon the exercise of each option shall
      be
      100% of the Fair Market Value per Share on the date preceding the date the
      option is granted. For purposes of this Plan, Fair Market Value shall be equal
      to the closing price of the Shares, or, if the Shares shall not have traded
      on
      such date, the closing price on the first date prior thereto on which the Shares
      were so traded, in each as reported by the OTC Bulletin Board or other primary
      trading market for the Shares.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)
      Payment.
      Options
      may be exercised only upon payment of the purchase price thereof in full. Such
      payment shall be made in cash.

     

    (iii)
      Exercisability
      and Term of Options.
      Options,
      once vested, shall be exercisable in whole or in part at all times until the
      earliest of (x) seven years from the date of grant, or (y) 18 months from the
      date such Participant ceases to be a director, officer, employee of, or
      consultant to, the Company.

     

    (iv)
      Nontransferability
      of Options.
      Except
      as may be specifically permitted by the Board with respect to any options to
      be
      granted under the Plan, no option may be assigned, alienated, pledged, attached,
      sold or otherwise transferred or encumbered by a Participant otherwise than
      by
      will or the laws of descent and distribution, and during the lifetime of the
      Participant to whom an option is granted it may be exercised only by the
      Participant or by the Participant's guardian or legal representative.
      Notwithstanding the foregoing, options may be transferred pursuant to a
      qualified domestic relations order.

     

    (v)
      Listing
      and Registration.
      Each
      option shall be subject to the requirement that if at any time the Board shall
      determine, in its discretion, that the listing, registration or qualification
      of
      the Shares subject to such option upon any securities exchange or under any
      state or federal law, or the consent or approval of any governmental regulatory
      body, is necessary or desirable as a condition of, or in connection with, the
      granting of such option or the issue or purchase of Shares thereunder, no such
      option may be exercised in whole or in part unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained free
      of
      any condition not acceptable to the Board.

     

           
      (vi) Option
      Agreement.
      Each
      option granted hereunder shall be evidenced by an agreement with the Company
      which shall contain the terms and provisions set forth herein and shall
      otherwise be consistent with the provisions of the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.     Adjustment
      of and Changes in Shares; Fractional Shares.

     

    In
      the
      event of a stock split, stock dividend, subdivision or combination of the Shares
      or other change in corporate structure affecting the Shares, the number of
      Shares authorized by the Plan shall be increased or decreased proportionately,
      as the case may be, and the number of Shares subject to any outstanding option
      shall be increased or decreased proportionately, as the case may be, with
      appropriate corresponding adjustment in the purchase price per Share thereunder;
      provided, however, that no fractional shares shall be issued. Whenever under
      the
      terms of the Plan a fractional Share would be required to be issued, the
      Participant shall be paid in cash for such fractional share based upon Fair
      Market Value at the time of the exercise of the Option.

     

    7.     No
      Rights of Stockholders

     

    Neither
      a
      Participant nor a Participant's legal representative shall be, or have any
      of
      the rights and privileges of, a stockholder of the Company in respect of any
      Shares purchasable upon the exercise of any option, in whole or in part, unless
      and until certificates for such Shares shall have been issued.

     

    8.     Plan
      Amendments

     

    The
      Plan
      may be amended by the Board, as it shall deem advisable or to conform to any
      change in any law or regulation applicable thereto.

     

    9.     Effective
      Date and Duration of Plan

     

    The
      Plan
      shall become effective on the date on which it is duly adopted by action of
      the
      Board. The Plan shall terminate on the date which is ten years from the date
      of
      such approval, unless the Plan is extended or terminated at an earlier date
      by
      Board or is terminated by exhaustion of the Shares available for issuance
      hereunder.