exv4w1








    Exhibit 4.1



 




    VERICHIP
    CORPORATION

    2009 STOCK INCENTIVE PLAN



 



    1. Purposes of the Plan.  The purposes of
    this Stock Incentive Plan are to attract and retain the best
    available personnel for positions of substantial responsibility,
    to provide additional incentive to Employees and Consultants,
    and to promote the long-term success of the Company’s
    business and to link participants’ directly to stockholder
    interests through increased stock ownership. Awards granted
    under the Plan may be Incentive Stock Options, Nonqualified
    Stock Options, Stock Appreciation Rights, Restricted Stock
    Awards, Performance Units, Performance Shares, Cash Awards and
    Other Stock Based Awards.



 



    2. Definitions.  As used herein, the
    following definitions shall apply:



 



    (a) “Administrator” means the Board or any
    Committee or Officer as shall be administering the Plan, in
    accordance with Section 4 of the Plan.



 



    (b) “Affiliate” means a Parent, a
    Subsidiary, an entity that is not a Parent or Subsidiary but
    which has a direct or indirect ownership interest in the Company
    or in which the Company has a direct or indirect ownership
    interest, an entity that is a customer or supplier of the
    Company, an entity that renders services to the Company, or an
    entity that has an ownership or business affiliation with any
    entity previously described in this Section 2(b).



 



    (c) “Applicable Law” means the legal
    requirements relating to the administration of the Plan under
    applicable federal, state, local and foreign corporate, tax and
    securities laws, and the rules and requirements of any stock
    exchange or quotation system on which the Common Stock is listed
    or quoted.



 



    (d) “Award” means an Option, Stock
    Appreciation Right, Restricted Stock Award, Performance Unit or
    Performance Share, Cash Award or Other Stock Based Award granted
    under the Plan.



 



    (e) “Award Agreement” means the agreement,
    notice
    and/or terms
    or conditions by which an Award is evidenced, documented in such
    form (including by electronic communication) as may be approved
    by the Administrator.



 



    (f) “Board” means the Board of Directors
    of the Company.



 



    (g) “Cash Award” means an award payable in
    the form of cash.



 



    (h) “Change in Control” means the
    happening of any of the following:



 



    (i) the consummation of any transaction (including, without
    limitation, any merger or consolidation) the result of which is
    that any “person” as such term is used in
    Section 13(d) and 14(d) of the Exchange Act (other than any
    trustee or other fiduciary holding securities under any employee
    benefit plan of the Company, or any company owned, directly or
    indirectly, by the shareholders of the Company in substantially
    the same proportions as their ownership of stock of the
    Company), is or becomes the “beneficial owner” (as
    defined in
    Rule 13d-3
    under the Exchange Act), directly or indirectly, of securities
    of the Company representing more than 50% of the combined voting
    power of the Company’s then outstanding securities entitled
    generally to vote in the election of the Board (other than the
    occurrence of any contingency);



 



    (ii) the stockholders of the Company approve a merger or
    consolidation of the Company with any other corporation or
    entity, which is consummated, 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) more than 50% of
    the combined voting power of the voting securities of the
    Company or such surviving entity outstanding immediately after
    such merger or consolidation; or




    

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    (iii) the effective date of a complete liquidation of the
    Company or the consummation of an agreement for the sale or
    disposition by the Company of all or substantially all of the
    Company’s assets, which in both cases are approved by the
    stockholders of the Company as may be required by law.



 



    (i) “Code” means the Internal Revenue Code
    of 1986, as amended.



 



    (j) “Committee” means a committee
    appointed by the Board in accordance with Section 4 of the
    Plan.



 



    (k) “Compensation Committee” means the
    Compensation Committee of the Board.



 



    (l) “Common Stock” means the common stock,
    $.01 par value, of the Company.



 



    (m) “Company” means VeriChip Corporation.



 



    (n) “Consultant” means any person,
    including an advisor, engaged by the Company or an Affiliate and
    who is compensated for such services, including without
    limitation non-Employee Directors. In addition, as used herein,
    “consulting relationship” shall be deemed to include
    service by a non-Employee Director as such.



 



    (o) “Continuous Status as an Employee or
    Consultant” means that the employment or consulting
    relationship is not interrupted or terminated by the Company or
    Affiliate, as applicable. Continuous Status as an Employee or
    Consultant shall not be considered interrupted in the case of
    (i) any leave of absence approved in writing by the Board,
    an Officer, or a person designated in writing by the Board or an
    Officer as authorized to approve a leave of absence, including
    sick leave, military leave, or any other personal leave;
    provided, however, that for purposes of Incentive Stock Options,
    any such leave may not exceed 90 days, unless reemployment
    upon the expiration of such leave is guaranteed by contract
    (including certain Company policies) or statute, or
    (ii) transfers between locations of the Company or between
    the Company, a Parent, a Subsidiary or successor of the Company;
    or (iii) a change in the status of the Grantee from
    Employee to Consultant or from Consultant to Employee.



 



    (p) “Covered Stock” means the Common Stock
    subject to an Award.



 



    (q) “Date of Grant” means the date on
    which the Administrator makes the determination granting the
    Award, or such other later date as is determined by the
    Administrator. Notice of the determination shall be provided to
    each Grantee within a reasonable time after the Date of Grant.



 



    (r) “Date of Termination” means the date
    on which a Grantee’s Continuous Status as an Employee or
    Consultant terminates.



 



    (s) “Director” means a member of the Board
    or a member of the Board of Directors of a Parent or Subsidiary.



 



    (t) “Disability” means total and permanent
    disability as defined in Section 22(e)(3) of the Code.



 



    (u) “Employee” means any person, including
    Officers and Directors, employed by the Company or any
    Affiliate. Neither service as a Director nor payment of a
    director’s fee by the Company shall be sufficient to
    constitute “employment” by the Company.



 



    (v) “Exchange Act” means the Securities
    Exchange Act of 1934, as amended.



 



    (w) “Fair Market Value” means the value of
    a share of Common Stock. If the Common Stock is actively traded
    on any national securities exchange, including, but not limited
    to, the NASDAQ Stock Market or the New York Stock Exchange, Fair
    Market Value shall mean the closing price at which sales of
    Common Stock shall have been sold on the date of determination,
    as reported by any such exchange selected by the Administrator
    on which the shares of Common Stock are then traded. If the
    shares of Common Stock are not actively traded on any such
    exchange, Fair Market Value shall mean the arithmetic mean of
    the bid and asked prices for the shares of Common Stock on the
    most recent trading date within a reasonable period prior to the
    determination date as reported by such exchange. If there are no
    bid and asked prices within a reasonable period or if the shares
    of Common Stock are not traded on any exchange as of the
    determination date, Fair Market Value shall mean the fair market
    value of a share of Common Stock as determined by the
    Administrator taking into account such facts and circumstances
    deemed to be material by the Administrator to




    

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    the value of the Common Stock in the hands of the Grantee;
    provided that, for purposes of granting awards other than
    Incentive Stock Options, Fair Market Value of a share of Common
    Stock may be determined by the Administrator by reference to the
    average market value determined over a period certain or as of
    specified dates, to a tender offer price for the shares of
    Common Stock (if settlement of an award is triggered by such an
    event) or to any other reasonable measure of fair market value
    and provided further that, for purposes of granting Incentive
    Stock Options, Fair Market Value of a share of Common Stock
    shall be determined in accordance with the valuation principles
    described in the regulations promulgated under Code
    Section 422.



 



    (x) “Grantee” means an individual who has
    been granted an Award.



 



    (y) “Incentive Stock Option” means an
    Option intended to qualify as an incentive stock option within
    the meaning of Section 422 of the Code and the regulations
    promulgated thereunder.



 



    (z) “Nonqualified Stock Option” means an
    Option not intended to qualify as an Incentive Stock Option.



 



    (aa) “Officer” means a person who is an
    officer of the Company within the meaning of Section 16 of
    the Exchange Act and the rules and regulations promulgated
    thereunder.



 



    (bb) “Option” means a stock option granted
    under the Plan.



 



    (cc) “Other Stock Based Award” means an
    award that is valued in whole or in part by reference to, or is
    otherwise based on, Common Stock.



 



    (dd) “Parent” means a corporation, whether
    now or hereafter existing, in an unbroken chain of corporations
    ending with the Company if each of the corporations other than
    the Company holds at least 50 percent of the voting shares
    of one of the other corporations in such chain.



 



    (ee) “Performance Based Compensation”
    means compensation which meets the requirements of
    Section 162(m)(4)(C) of the Code.



 



    (ff) “Performance Based Restricted Stock”
    means an Award of Restricted Stock which meets the requirements
    of Section 162(m)(4)(C) of the Code, as described in
    Section 8(b) of the Plan.



 



    (gg) “Performance Period” means the time
    period during which the performance goals established by the
    Administrator with respect to a Performance Unit or Performance
    Share, pursuant to Section 9 of the Plan, must be met.



 



    (hh) “Performance Share” has the meaning
    set forth in Section 9 of the Plan.



 



    (ii) “Performance Unit” has the meaning
    set forth in Section 9 of the Plan.



 



    (jj) “Plan” means this VeriChip
    Corporation 2009 Stock Incentive Plan, as amended and restated.



 



    (kk) “Restricted Stock Award” means Shares
    that are awarded to a Grantee pursuant to Section 8 of the
    Plan.



 



    (ll) “Rule 16b-3”
    means
    Rule 16b-3
    promulgated under the Exchange Act or any successor to
    Rule 16b-3,
    as in effect when discretion is being exercised with respect to
    the Plan.



 



    (mm) “Share” means a share of the Common
    Stock, as adjusted in accordance with Section 13 of the
    Plan.



 



    (nn) “Stock Appreciation Right” or
    “SAR” means the right to receive an amount
    equal to the appreciation, if any, in the Fair Market Value of a
    Share from the date of the grant of the right to the date of its
    payment, as set forth in Section 7 of the Plan.



 



    (oo) “Subsidiary” means a corporation,
    domestic or foreign, of which not less than 50 percent of
    the voting shares are held by the Company or a Subsidiary,
    whether or not such corporation now exists or is hereafter
    organized or acquired by the Company or a Subsidiary.



 



    3. Stock Subject to the Plan.  Subject to
    the provisions of Section 13 of the Plan and except as
    otherwise provided in this Section 3, the maximum aggregate
    number of Shares that may be subject to Awards under the




    

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    Plan since the Plan became effective is 5,000,000 Shares,
    of which 5,000,000 can be issued as Incentive Stock Options. The
    Shares may be authorized, but unissued, or reacquired Common
    Stock. If an Award expires or becomes unexercisable without
    having been exercised in full the remaining Shares that were
    subject to the Award shall become available for future Awards
    under the Plan (unless the Plan has terminated). With respect to
    Options and Stock Appreciation Rights, if the payment upon
    exercise of an Option or SAR is in the form of Shares, the
    Shares subject to the Option or SAR shall be counted against the
    available Shares as one Share for every Share subject to the
    Option or SAR, regardless of the number of Shares used to settle
    the SAR upon exercise.



 



    4. Administration of the Plan.



 



    (a) Procedure.



 



    (i) Multiple Administrative Bodies.  The
    Plan may be administered by different bodies with respect to
    different groups of Employees and Consultants, provided however,
    that the administrative authority set forth in items (vii),
    (viii), (ix), (xii), (xiii), (xiv), (xv), and (xvi) of
    Section 4(b) below shall be exercised only by the
    Compensation Committee. Except as provided below, the Plan shall
    be administered by (A) the Board or (B) a committee
    designated by the Board and constituted to satisfy Applicable
    Law.



 



    (ii) Rule 16b-3.  To
    the extent the Board or the Compensation Committee considers it
    desirable for transactions relating to Awards to be eligible to
    qualify for an exemption under
    Rule 16b-3,
    the transactions contemplated under the Plan shall be structured
    to satisfy the requirements for exemption under
    Rule 16b-3.



 



    (iii) Section 162(m) of the Code.  To
    the extent the Board or the Compensation Committee considers it
    desirable for compensation delivered pursuant to Awards to be
    eligible to qualify for an exemption from the limit on tax
    deductibility of compensation under Section 162(m) of the
    Code, the transactions contemplated under the Plan shall be
    structured to satisfy the requirements for exemption under
    Section 162(m) of the Code.



 



    (iv) Authorization of Officers to Grant
    Options.  In accordance with Applicable Law, the
    Board may, by a resolution adopted by the Board, authorize one
    or more Officers to designate Officers and Employees (excluding
    the Officer so authorized) to be Grantees of Options and
    determine the number of Options to be granted to such Officers
    and Employees; provided, however, that the resolution adopted by
    the Board so authorizing such Officer or Officers shall specify
    the total number and the terms (including the exercise price,
    which may include a formula by which such price may be
    determined) of Options such Officer or Officers may so grant.



 



    (b) Powers of the Administrator.  Subject
    to the provisions of the Plan, and in the case of a Committee or
    an Officer, subject to the specific duties delegated by the
    Board to such Committee or Officer, the Administrator shall have
    the authority, in its sole and absolute discretion:



 



    (i) to determine the Fair Market Value of the Common Stock,
    in accordance with Section 2(w) of the Plan;



 



    (ii) to select the Grantees to whom Awards will be granted
    under the Plan;



 



    (iii) to determine whether, when, to what extent and in
    what types and amounts Awards are granted under the Plan;



 



    (iv) to determine the number of shares of Common Stock to
    be covered by each Award granted under the Plan;



 



    (v) to determine the forms of Award Agreements, which need
    not be the same for each grant or for each Grantee, and which
    may be delivered electronically, for use under the Plan;



 



    (vi) to determine the terms and conditions, not
    inconsistent with the terms of the Plan, of any Award granted
    under the Plan. Such terms and conditions, which need not be the
    same for each grant or for each Grantee, include, but are not
    limited to, the exercise price, the time or times when Options
    and SARs may be exercised (which may be based on performance
    criteria), the extent to which vesting is suspended during a
    leave of absence, any vesting acceleration or waiver of
    forfeiture restrictions, and any restriction




    

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    or limitation regarding any Award or the shares of Common Stock
    relating thereto, based in each case on such factors as the
    Administrator shall determine;



 



    (vii) to construe and interpret the terms of the Plan and
    Awards;



 



    (viii) to prescribe, amend and rescind rules and
    regulations relating to the Plan, including, without limiting
    the generality of the foregoing, rules and regulations relating
    to the operation and administration of the Plan to accommodate
    the specific requirements of local and foreign laws and
    procedures;



 



    (ix) to modify or amend each Award (subject to
    Section 15 of the Plan). However, the Administrator may not
    modify or amend any outstanding Option or SAR to reduce the
    exercise price of such Option or SAR, as applicable, below the
    exercise price as of the Date of Grant of such Option or SAR. In
    addition, no Option or SAR may be granted in exchange for, or in
    connection with, the cancellation or surrender of an Option or
    SAR or other Award having a lower exercise price;



 



    (x) to authorize any person to execute on behalf of the
    Company any instrument required to effect the grant of an Award
    previously granted by the Administrator;



 



    (xi) to determine the terms and restrictions applicable to
    Awards;



 



    (xii) to make such adjustments or modifications to Awards
    granted to Grantees who are Employees of foreign Subsidiaries as
    are advisable to fulfill the purposes of the Plan or to comply
    with Applicable Law;



 



    (xiii) to delegate its duties and responsibilities under
    the Plan with respect to
    sub-plans
    applicable to foreign Subsidiaries, except its duties and
    responsibilities with respect to Employees who are also Officers
    or Directors subject to Section 16(b) of the Exchange Act;



 



    (xiv) to provide any notice or other communication required
    or permitted by the Plan in either written or electronic form;



 



    (xv) to correct any defect or supply any omission, or
    reconcile any inconsistency in the Plan, or in any Award
    Agreement, in the manner and to the extent it shall deem
    necessary or expedient to make the Plan fully effective; and



 



    (xvi) to make all other determinations deemed necessary or
    advisable for administering the Plan.



 



    (c) Effect of Administrator’s
    Decision.  The Administrator’s decisions,
    determinations and interpretations shall be final and binding on
    all Grantees and any other holders of Awards.



 



    5. Eligibility and General Conditions of Awards.



 



    (a) Eligibility.  Awards other than
    Incentive Stock Options may be granted to Employees and
    Consultants. Incentive Stock Options may be granted only to
    Employees. If otherwise eligible, an Employee or Consultant who
    has been granted an Award may be granted additional Awards.



 



    (b) Maximum Term.  Subject to the
    following provision, the term during which an Award may be
    outstanding shall not extend more than ten years after the Date
    of Grant, and shall be subject to earlier termination as
    specified elsewhere in the Plan or Award Agreement.



 



    (c) Award Agreement.  To the extent not
    set forth in the Plan, the terms and conditions of each Award,
    which need not be the same for each grant or for each Grantee,
    shall be set forth in an Award Agreement. The Administrator, in
    its sole and absolute discretion, may require as a condition to
    any Award Agreement’s effectiveness that the Award
    Agreement be executed by the Grantee, including by electronic
    signature or other electronic indication of acceptance, and that
    the Grantee agree to such further terms and conditions as
    specified in the Award Agreement. Except as otherwise provided
    in an Agreement, all capitalized terms used in the Agreement
    shall have the same meaning as in the Plan, and the Agreement
    shall be subject to all of the terms of the Plan.



 



    (d) Termination of Employment or Consulting
    Relationship.  In the event that a Grantee’s
    Continuous Status as an Employee or Consultant terminates (other
    than upon the Grantee’s Retirement (defined below),




    

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    death, Disability, or Termination by Employer Not for Cause
    (defined below)), then, unless otherwise provided by the Award
    Agreement, and subject to Section 13 of the Plan:



 



    (i) the Grantee may exercise his or her unexercised Option
    or SAR, but only within such period of time as is determined by
    the Administrator, and only to the extent that the Grantee was
    entitled to exercise it at the Date of Termination (but in no
    event later than the expiration of the term of such Option or
    SAR as set forth in the Award Agreement). In the case of an
    Incentive Stock Option, the Administrator shall determine such
    period of time (in no event to exceed three months from the Date
    of Termination) when the Option is granted. If, at the Date of
    Termination, the Grantee is not entitled to exercise his or her
    entire Option or SAR, the Shares covered by the unexercisable
    portion of the Option or SAR shall revert to the Plan. If, after
    the Date of Termination, the Grantee does not exercise his or
    her Option or SAR within the time specified by the
    Administrator, the Option or SAR shall terminate, and the Shares
    covered by such Option or SAR shall revert to the Plan;



 



    (ii) the Grantee’s Restricted Stock Awards, to the
    extent forfeitable immediately before the Date of Termination,
    shall thereupon automatically be forfeited;



 



    (iii) the Grantee’s Restricted Stock Awards that were
    not forfeitable immediately before the Date of Termination shall
    promptly be settled by delivery to the Grantee of a number of
    unrestricted Shares equal to the aggregate number of the
    Grantee’s vested Restricted Stock Awards; and



 



    (iv) any Performance Shares or Performance Units with
    respect to which the Performance Period has not ended as of the
    Date of Termination shall terminate immediately upon the Date of
    Termination.



 



    (e) Disability of Grantee.  In the event
    that a Grantee’s Continuous Status as an Employee or
    Consultant terminates as a result of the Grantee’s
    Disability, then, unless otherwise provided by the Award
    Agreement, such termination shall have no effect on the
    Grantee’s outstanding Awards. The Grantee’s Awards
    shall continue to vest and remain outstanding and exercisable
    until they expire by their terms. In the case of an Incentive
    Stock Option, any option not exercised within 12 months of
    the date of termination of the Grantee’s Continuous Status
    as an Employee or Consultant due to Disability will be treated
    as a Nonqualified Stock Option.



 



    (f) Death of Grantee.  In the event of the
    death of a Grantee, then, unless otherwise provided by the Award
    Agreement, such termination shall have no effect on
    Grantee’s outstanding Awards. The Grantee’s Awards
    shall continue to vest and remain outstanding and exercisable
    until they expire by their terms. In the case of an Incentive
    Stock Option, any option not exercised within 12 months of
    the date of termination of Grantee’s Continuous Status as
    an Employee or Consultant due to death will be treated as a
    Nonqualified Stock Option.



 



    (g) Retirement of Grantee.  Except as
    otherwise provided in Section 5(g)(i) below, in the event
    that a Grantee’s Continuous Status as an Employee or
    Consultant terminates after the Grantee’s attainment of
    age 65 (hereinafter, “Retirement”), then, unless
    otherwise provided by the Award Agreement, such termination
    shall have no effect on Grantee’s outstanding Awards. The
    Grantee’s Awards shall continue to vest and remain
    outstanding and exercisable until they expire by their terms. In
    the case of an Incentive Stock Option, any option not exercised
    within 3 months of the termination of Grantee’s
    Continuous Status as an Employee or Consultant due to Retirement
    will be treated as a Nonqualified Stock Option.



 



    (h) Termination by Employer Not for
    Cause.  In the event that a Grantee’s
    Continuous Status as an Employee or Consultant is terminated by
    the Employer without Cause (hereinafter, “Termination by
    Employer Not for Cause”), then, unless otherwise provided
    by the Award Agreement, such termination shall have no effect on
    Grantee’s outstanding Awards. Grantee’s Awards shall
    continue to vest and remain outstanding and exercisable until
    they expire by their terms. In the case of an Incentive Stock
    Option, any option not exercised within 3 months of the
    date of will be treated as a Nonqualified Stock Option. In the
    case of a Grantee who is a Director, the Grantee’s service
    as a Director shall be deemed to have been terminated without
    Cause if the Participant ceases to serve in such a position
    solely due to the failure to be reelected or reappointed, as the
    case may be, and such failure is not a result of an act or
    omission which would constitute Cause.




    

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    (i) Termination for
    Cause.  Notwithstanding anything herein to the
    contrary, if a Grantee is an Employee of the Company and is
    “Terminated for Cause”, as defined herein below, or
    violates any of the terms of their employment after they have
    become vested in any of their rights herein, the Grantee’s
    full interest in such rights shall terminate on the date of such
    termination of employment and all rights thereunder shall cease.
    Whether a Participant’s employment is Terminated for Cause
    shall be determined by the Board. Cause shall mean gross
    negligence, willful misconduct, flagrant or repeated violations
    of the Company’s policies, rules or ethics, a material
    breach by the Grantee of any employment agreement between the
    Grantee and the Company, intoxication, substance abuse, sexual
    or other unlawful harassment, disclosure of confidential or
    proprietary information, engaging in a business competitive with
    the Company, or dishonest, illegal or immoral conduct.



 



    (j) Nontransferability of Awards.



 



    (i) Except as provided in Section 5(j)(iii) below,
    each Award, and each right under any Award, shall be exercisable
    only by the Grantee during the Grantee’s lifetime, or, if
    permissible under Applicable Law, by the Grantee’s guardian
    or legal representative.



 



    (ii) Except as provided in Section 5(j)(iii) below, no
    Award (prior to the time, if applicable, Shares are issued in
    respect of such Award), and no right under any Award, may be
    assigned, alienated, pledged, attached, sold or otherwise
    transferred or encumbered by a Grantee otherwise than by will or
    by the laws of descent and distribution (or in the case of
    Restricted Stock Awards, to the Company) and any such purported
    assignment, alienation, pledge, attachment, sale, transfer or
    encumbrance shall be void and unenforceable against the Company
    or any Subsidiary; provided, that the designation of a
    beneficiary shall not constitute an assignment, alienation,
    pledge, attachment, sale, transfer or encumbrance.



 



    (iii) To the extent and in the manner permitted by
    Applicable Law, and to the extent and in the manner permitted by
    the Administrator, and subject to such terms and conditions as
    may be prescribed by the Administrator, a Grantee may transfer
    an Award to:



 



    (A) a child, stepchild, grandchild, parent, stepparent,
    grandparent, spouse, former spouse, sibling, niece, nephew,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    brother-in-law,
    or
    sister-in-law
    of the Grantee (including adoptive relationships);



 



    (B) any person sharing the employee’s household (other
    than a tenant or employee);



 



    (C) a trust in which persons described in (A) and
    (B) have more than 50 percent of the beneficial
    interest;



 



    (D) a foundation in which persons described in (A) or
    (B) or the Grantee control the management of assets; or



 



    (E) any other entity in which the persons described in
    (A) or (B) or the Grantee own more than
    50 percent of the voting interests;



 



    provided such transfer is not for value. The following shall not
    be considered transfers for value: a transfer under a domestic
    relations order in settlement of marital property rights, and a
    transfer to an entity in which more than 50 percent of the
    voting interests are owned by persons described in
    (A) above or the Grantee, in exchange for an interest in
    such entity.



 



    6. Stock Options.



 



    (a) Limitations.



 



    (i) Each Option shall be designated in the Award Agreement
    as either an Incentive Stock Option or a Nonqualified Stock
    Option. Any Option designated as an Incentive Stock Option:



 



    (A) shall not have an aggregate Fair Market Value
    (determined for each Incentive Stock Option at the Date of
    Grant) of Shares with respect to which Incentive Stock Options
    are exercisable for the first time by the Grantee during any
    calendar year (under the Plan and any other employee stock
    option plan of the Company or any Parent or Subsidiary
    (“Other Plans”)), determined in accordance with the
    provisions of Section 422 of the Code, that exceeds
    $100,000 (the “$100,000 Limit”);




    

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    (B) shall, if the aggregate Fair Market Value of Shares
    (determined on the Date of Grant) with respect to the portion of
    such grant that is exercisable for the first time during any
    calendar year (“Current Grant”) and all Incentive
    Stock Options previously granted under the Plan and any Other
    Plans that are exercisable for the first time during a calendar
    year (“Prior Grants”) would exceed the $100,000 Limit,
    be exercisable as follows:



 



    (1) The portion of the Current Grant that would, when added
    to any Prior Grants, be exercisable with respect to Shares that
    would have an aggregate Fair Market Value (determined as of the
    respective Date of Grant for such Options) in excess of the
    $100,000 Limit shall, notwithstanding the terms of the Current
    Grant, be exercisable for the first time by the Grantee in the
    first subsequent calendar year or years in which it could be
    exercisable for the first time by the Grantee when added to all
    Prior Grants without exceeding the $100,000 Limit; and



 



    (2) If, viewed as of the date of the Current Grant, any
    portion of a Current Grant could not be exercised under the
    preceding provisions of this Section 6(a)(i)(B) during any
    calendar year commencing with the calendar year in which it is
    first exercisable through and including the last calendar year
    in which it may by its terms be exercised, such portion of the
    Current Grant shall not be an Incentive Stock Option, but shall
    be exercisable as a separate Option at such date or dates as are
    provided in the Current Grant.



 



    (ii) No Employee shall be granted, in any fiscal year of
    the Company, Options to purchase more than 1,500,000 Shares. The
    limitation described in this Section 6(a)(ii) shall be
    adjusted proportionately in connection with any change in the
    Company’s capitalization as described in Section 13 of
    the Plan. If an Option is canceled in the same fiscal year of
    the Company in which it was granted (other than in connection
    with a transaction described in Section 13 of the Plan),
    the canceled Option will be counted against the limitation
    described in this Section 6(a)(ii).



 



    (b) Term of Option.  The term of each
    Option shall be stated in the Award Agreement; provided,
    however, that the term shall be 10 years from the date of
    grant or such shorter term as may be provided in the Award
    Agreement. Moreover, in the case of an Incentive Stock Option
    granted to a Grantee who, at the time the Incentive Stock Option
    is granted, owns stock representing more than 10 percent of
    the voting power of all classes of stock of the Company or any
    Parent or Subsidiary, the term of the Incentive Stock Option
    shall be five years from the date of grant or such shorter term
    as may be provided in the Award Agreement.



 



    (c) Option Exercise Price and Consideration.



 



    (i) Exercise Price.  The per share
    exercise price for the Shares to be issued pursuant to exercise
    of an Option shall be determined by the Administrator and,
    except as otherwise provided in this Section 6(c)(i), shall
    be no less than 100 percent of the Fair Market Value per
    Share on the Date of Grant.



 



    (A) In the case of an Incentive Stock Option granted to an
    Employee who on the Date of Grant owns stock representing more
    than 10 percent of the voting power of all classes of stock
    of the Company or any Parent or Subsidiary, the per Share
    exercise price shall be no less than 110 percent of the
    Fair Market Value per Share on the Date of Grant.



 



    (B) Any Option that is (1) granted to a Grantee in
    connection with the acquisition (“Acquisition”),
    however effected, by the Company of another corporation or
    entity (“Acquired Entity”) or the assets thereof,
    (2) associated with an option to purchase shares of stock
    or other equity interest of the Acquired Entity or an affiliate
    thereof (“Acquired Entity Option”) held by such
    Grantee immediately prior to such Acquisition, and
    (3) intended to preserve for the Grantee the economic value
    of all or a portion of such Acquired Entity Option, may be
    granted with such exercise price as the Administrator determines
    to be necessary to achieve such preservation of economic value.



 



    (d) Waiting Period and Exercise Dates.  At
    the time an Option is granted, the Administrator shall fix the
    period within which the Option may be exercised and shall
    determine any conditions that must be satisfied before the
    Option may be exercised. An Option shall be exercisable only to
    the extent that it is vested according to the terms of the Award
    Agreement.




    

    8








 






    (e) Form of Consideration.  The
    Administrator shall determine the acceptable form of
    consideration for exercising an Option, including the method of
    payment. In the case of an Incentive Stock Option, the
    Administrator shall determine the acceptable form of
    consideration at the time of grant. The acceptable form of
    consideration may consist of any combination of the following:
    cash; pursuant to procedures approved by the Administrator,
    through the sale of the Shares acquired on exercise of the
    Option through a broker-dealer to whom the Grantee has submitted
    an irrevocable notice of exercise and irrevocable instructions
    to deliver promptly to the Company the amount of sale or loan
    proceeds sufficient to pay the exercise price, together with, if
    requested by the Company, the amount of federal, state, local or
    foreign withholding taxes payable by the Grantee by reason of
    such exercise (a “cashless exercise”) or; subject to
    the approval of the Administrator:



 



    (i) by the surrender of all or part of an Award (including
    the Award being exercised);



 



    (ii) by the tender to the Company of Shares owned by the
    Grantee and registered in his name having a Fair Market Value
    equal to the amount due to the Company;



 



    (iii) in other property, rights and credits deemed
    acceptable by the Administrator, including the
    Participant’s promissory note; or



 



    (iv) such other consideration and method of payment for the
    issuance of Shares to the extent permitted by Applicable Law and
    deemed acceptable by the Administrator.



 



    (f) Exercise of Option.



 



    (i) Procedure for Exercise; Rights as a Shareholder.



 



    (A) Any Option granted hereunder shall be exercisable
    according to the terms of the Plan and at such times and under
    such conditions as determined by the Administrator and set forth
    in the Award Agreement.



 



    (B) An Option may not be exercised for a fraction of a
    Share.



 



    (C) An Option shall be deemed exercised when the Company
    receives:



 



    (1) written or electronic notice of exercise (in accordance
    with the Award Agreement and any action taken by the
    Administrator pursuant to Section 4(b) of the Plan or
    otherwise) from the person entitled to exercise the
    Option, and



 



    (2) full payment for the Shares with respect to which the
    Option is exercised.



 



    (D) Shares issued upon exercise of an Option shall be
    issued in the name of the Grantee or, if requested by the
    Grantee, in the name of the Grantee and his or her spouse. Until
    the stock certificate evidencing such Shares is issued (as
    evidenced by the appropriate entry on the books of the Company
    or of a duly authorized transfer agent of the Company), no right
    to vote or receive dividends or any other rights as a
    shareholder shall exist with respect to the Optioned Stock,
    notwithstanding the exercise of the Option. The Company shall
    issue (or cause to be issued) such stock certificate promptly
    after the Option is exercised. No adjustment will be made for a
    dividend or other right for which the record date is prior to
    the date the stock certificate is issued, except as provided in
    Section 13 of the Plan.



 



    (E) Exercising an Option in any manner shall decrease the
    number of Shares thereafter available, both for purposes of the
    Plan and for sale under the Option, by the number of Shares as
    to which the Option is exercised.



 



    7. Stock Appreciation Rights.



 



    (a) Grant of SARs.  Subject to the terms
    and conditions of the Plan, the Administrator may grant SARs in
    tandem with an Option or alone and unrelated to an Option.
    Tandem SARs shall expire no later than the expiration of the
    underlying Option. In no event shall the term of a SAR exceed
    ten years from the Date of Grant.



 



    (b) Exercise of SARs.  SARs shall be
    exercised by the delivery of a written or electronic notice of
    exercise (in accordance with the Award Agreement and any action
    taken by the Administrator pursuant to




    

    9








 






    Section 4(b) of the Plan or otherwise), setting forth the
    number of Shares over which the SAR is to be exercised. Tandem
    SARs may be exercised:



 



    (i) with respect to all or part of the Shares subject to
    the related Option upon the surrender of the right to exercise
    the equivalent portion of the related Option;



 



    (ii) only with respect to the Shares for which its related
    Option is then exercisable; and



 



    (iii) only when the Fair Market Value of the Shares subject
    to the Option exceeds the exercise price of the Option.



 



    The value of the payment with respect to the tandem SAR may be
    no more than 100 percent of the difference between the
    exercise price of the underlying Option and the Fair Market
    Value of the Shares subject to the underlying Option at the time
    the tandem SAR is exercised.



 



    (c) Payment of SAR Benefit.  Upon exercise
    of a SAR, the Grantee shall be entitled to receive payment from
    the Company in an amount determined by multiplying:



 



    (i) the excess of the Fair Market Value of a Share on the
    date of exercise over the SAR exercise price; by



 



    (ii) the number of Shares with respect to which the SAR is
    exercised;



 



    provided, that the Administrator may provide in the Award
    Agreement that the benefit payable on exercise of a SAR shall
    not exceed such percentage of the Fair Market Value of a Share
    on the Date of Grant, or any other limitation, as the
    Administrator shall specify. The payment upon exercise of a SAR
    shall be in Shares that have an aggregate Fair Market Value (as
    of the date of exercise of the SAR) equal to the amount of the
    payment.



 



    (d) No Employee shall be granted, in any fiscal year, SARs
    with respect to more than [1,000,000] Shares. The
    limitation described in this Section 7(d) shall be adjusted
    proportionately in connection with any change in the
    Company’s capitalization as described in Section 13 of
    the Plan. If a SAR is canceled in the same fiscal year of the
    Company in which it was granted (other than in connection with a
    transaction described in Section 13 of the Plan), the
    canceled SAR will be counted against the limitation described in
    this Section 7(d).



 



    8. Restricted Stock Awards.  Subject to
    the terms of the Plan, the Administrator may grant Restricted
    Stock Awards to any Eligible Recipient, in such amount and upon
    such terms and conditions as shall be determined by the
    Administrator.



 



    (a) Administrator Action.  The
    Administrator acting in its sole and absolute discretion shall
    have the right to grant Restricted Stock to Eligible Recipients
    under the Plan from time to time. Each Restricted Stock Award
    shall be evidenced by a Restricted Stock Agreement, and each
    Restricted Stock Agreement shall set forth the conditions, if
    any, which will need to be timely satisfied before the grant
    will be effective and the conditions, if any, under which the
    Grantee’s interest in the related Stock will be forfeited.
    The Administrator may make grants of Performance-Based
    Restricted Stock and grants of Restricted Stock that are not
    Performance-Based Restricted Stock; provided, however, that only
    the Compensation Committee may serve as the Administrator with
    respect to grants of Performance-Based Restricted Stock.



 



    (b) Performance-Based Restricted Stock.



 



    (i) Effective Date.  A grant of
    Performance-Based Restricted Stock shall be effective as of the
    date the Compensation Committee certifies that the applicable
    conditions described in Section 8(b)(iii) of the Plan have
    been timely satisfied.



 



    (ii) Share Limitation.  No more than
    1,500,000 shares of Performance-Based Restricted Stock may
    be granted to an Eligible Recipient in any calendar year.



 



    (iii) Grant Conditions.  The Compensation
    Committee, acting in its sole and absolute discretion, may
    select from time to time Eligible Recipients to receive grants
    of Performance-Based Restricted Stock in such amounts as the
    Compensation Committee may, in its sole and absolute discretion,
    determine, subject to any




    

    10








 






    limitations provided in the Plan. The Compensation Committee
    shall make each grant subject to the attainment of certain
    performance targets. The Compensation Committee shall determine
    the performance targets which will be applied with respect to
    each grant of Performance-Based Restricted Stock at the time of
    grant, but in no event later than 90 days after the
    commencement of the period of service to which the performance
    targets relate. The performance criteria applicable to
    Performance-Based Restricted Stock grants will be one or more of
    the following criteria: (1) stock price; (2) average
    annual growth in earnings per share; (3) increase in
    shareholder value; (4) earnings per share; (5) net
    income; (6) return on assets; (7) return on
    shareholders’ equity; (8) increase in cash flow;
    (9) operating profit or operating margins;
    (10) revenue growth of the Company; and (11) operating
    expenses. Each performance target applicable to a Cash Award
    intended to be Performance Based Compensation and the deadline
    for satisfying each such target shall be stated in the Agreement
    between the Company and the Employee. The Compensation Committee
    must certify in writing that each such target has been satisfied
    before the Performance Based Compensation award is paid.



 



    The related Restricted Stock Agreement shall set forth the
    applicable performance criteria and the deadline for satisfying
    the performance criteria.



 



    (iv) Forfeiture Conditions.  The
    Compensation Committee may make each Performance-Based
    Restricted Stock grant (if, when and to the extent that the
    grant becomes effective) subject to one, or more than one,
    objective employment, performance or other forfeiture condition
    which the Compensation Committee acting in its sole and absolute
    discretion deems appropriate under the circumstances for
    Eligible Recipients generally or for a Grantee in particular,
    and the related Restricted Stock Agreement shall set forth each
    such condition and the deadline for satisfying each such
    forfeiture condition. A Grantee’s nonforfeitable interest
    in the Shares related to a Performance-Based Restricted Stock
    grant shall depend on the extent to which each such condition is
    timely satisfied. A Stock certificate shall be issued (subject
    to the conditions, if any, described in this Section 8(b))
    to, or for the benefit of, the Grantee with respect to the
    number of shares for which a grant has become effective as soon
    as practicable after the date the grant becomes effective.



 



    (c) Restricted Stock Other Than Performance-Based
    Restricted Stock.



 



    (i) Effective Date.  A Restricted Stock
    grant which is not a grant of Performance-Based Restricted Stock
    shall be effective (a) as of the date set by the
    Administrator when the grant is made or, if the grant is made
    subject to one, or more than one, condition, (b) as of the
    date the Administrator determines that such conditions have been
    timely satisfied.



 



    (ii) Grant Conditions.  The Administrator
    acting in its sole and absolute discretion may make the grant of
    Restricted Stock which is not Performance-Based Restricted Stock
    to a Grantee subject to the satisfaction of one, or more than
    one, objective employment, performance or other grant condition
    which the Administrator deems appropriate under the
    circumstances for Eligible Recipients generally or for a Grantee
    in particular, and the related Restricted Stock Agreement shall
    set forth each such condition and the deadline for satisfying
    each such grant condition.



 



    (iii) Forfeiture Conditions.  The
    Administrator may make each grant of Restricted Stock which is
    not a grant of Performance-Based Restricted Stock (if, when and
    to the extent that the grant becomes effective) subject to one,
    or more than one, objective employment, performance or other
    forfeiture condition which the Administrator acting in its sole
    and absolute discretion deems appropriate under the
    circumstances for Eligible Recipients generally or for a Grantee
    in particular, and the related Restricted Stock Agreement shall
    set forth each such condition and the deadline for satisfying
    each such forfeiture condition. A Grantee’s nonforfeitable
    interest in the Shares related to a grant of Restricted Stock
    which is not a grant of Performance-Based Restricted Stock shall
    depend on the extent to which each such condition is timely
    satisfied. A Stock certificate shall be issued (subject to the
    conditions, if any, described in this Section 8(c)) to, or
    for the benefit of, the Grantee with respect to the number of
    shares for which a grant has become effective as soon as
    practicable after the date the grant becomes effective.



 



    (d) Dividends and Voting Rights.  Each
    Restricted Stock Agreement shall state whether the Grantee shall
    have a right to receive any cash dividends which are paid with
    respect to his or her Restricted Stock after the date his or her
    Restricted Stock grant has become effective and before the first
    day that the Grantee’s interest




    

    11








 






    in such stock is forfeited completely or becomes completely
    nonforfeitable. If a Restricted Stock Agreement provides that a
    Grantee has no right to receive a cash dividend when paid, such
    agreement shall set forth the conditions, if any, under which
    the Grantee will be eligible to receive one, or more than one,
    payment in the future to compensate the Grantee for the fact
    that he or she had no right to receive any cash dividends on his
    or her Restricted Stock when such dividends were paid. If a
    Restricted Stock Agreement calls for any such payments to be
    made, the Company shall make such payments from the
    Company’s general assets, and the Grantee shall be no more
    than a general and unsecured creditor of the Company with
    respect to such payments. If a stock dividend is declared on
    such a Share after the grant is effective but before the
    Grantee’s interest in such Stock has been forfeited or has
    become nonforfeitable, such stock dividend shall be treated as
    part of the grant of the related Restricted Stock, and a
    Grantee’s interest in such stock dividend shall be
    forfeited or shall become nonforfeitable at the same time as the
    Share with respect to which the stock dividend was paid is
    forfeited or becomes nonforfeitable. If a dividend is paid other
    than in cash or stock, the disposition of such dividend shall be
    made in accordance with such rules as the Administrator shall
    adopt with respect to each such dividend. A Grantee shall have
    the right to vote the Shares related to his or her Restricted
    Stock grant after the grant is effective with respect to such
    Shares but before his or her interest in such Shares has been
    forfeited or has become nonforfeitable.



 



    (e) Satisfaction of Forfeiture
    Conditions.  A Share shall cease to be Restricted
    Stock at such time as a Grantee’s interest in such Share
    becomes nonforfeitable under the Plan, and the certificate
    representing such share shall be reissued as soon as practicable
    thereafter without any further restrictions related to
    Section 8(b) or Section 8(c) and shall be transferred
    to the Grantee.



 



    9. Performance Units and Performance Shares.



 



    (a) Grant of Performance Units and Performance
    Shares.  Subject to the terms of the Plan, the
    Administrator may grant Performance Units or Performance Shares
    to any Eligible Recipient in such amounts and upon such terms as
    the Administrator shall determine.



 



    (b) Value/Performance Goals.  Each
    Performance Unit shall have an initial value that is established
    by the Administrator on the Date of Grant. Each Performance
    Share shall have an initial value equal to the Fair Market Value
    of a Share on the Date of Grant. The Administrator shall set
    performance goals that, depending upon the extent to which they
    are met, will determine the number or value of Performance Units
    or Performance Shares that will be paid to the Grantee.



 



    (c) Payment of Performance Units and Performance
    Shares.



 



    (i) Subject to the terms of the Plan, after the applicable
    Performance Period has ended, the holder of Performance Units or
    Performance Shares shall be entitled to receive a payment based
    on the number and value of Performance Units or Performance
    Shares earned by the Grantee over the Performance Period, to the
    extent the corresponding performance goals have been achieved.



 



    (ii) If a Grantee is promoted, demoted or transferred to a
    different business unit of the Company during a Performance
    Period, then, to the extent the Administrator determines
    appropriate, the Administrator may adjust, change or eliminate
    the performance goals or the applicable Performance Period as it
    deems appropriate in order to make them appropriate and
    comparable to the initial performance goals or Performance
    Period.



 



    (d) Form and Timing of Payment of Performance Units and
    Performance Shares.  Payment of earned Performance
    Units or Performance Shares shall be made in a lump sum
    following the close of the applicable Performance Period. The
    Administrator may pay earned Performance Units or Performance
    Shares in cash or in Shares (or in a combination thereof) that
    have an aggregate Fair Market Value equal to the value of the
    earned Performance Units or Performance Shares at the close of
    the applicable Performance Period. Such Shares may be granted
    subject to any restrictions deemed appropriate by the
    Administrator. The form of payout of such Awards shall be set
    forth in the Award Agreement pertaining to the grant of the
    Award.



 



    10. Cash Awards.  The Administrator may
    grant Cash Awards at such times and in such amounts as it deems
    appropriate.




    

    12








 






    (a) Annual Limits.  Notwithstanding the
    foregoing, the amount of any Cash Award in any Fiscal Year to
    any Grantee shall not exceed the greater of $300,000 or 100% of
    his cash compensation (excluding any Cash Award under the Plan)
    for such Fiscal Year.



 



    (b) Restrictions.  Cash Awards may be
    subject or not subject to conditions (such as an investment
    requirement), restricted or nonrestricted, vested or subject to
    forfeiture and may be payable currently or in the future or
    both. The Administrator may make grants of Cash Awards that are
    intended to be Performance Based Compensation and grants of Cash
    Awards that are not intended to be Performance Based
    Compensation; provided, however, that only the Compensation
    Committee may serve as the Administrator with respect to grants
    of Cash Awards that are intended to be Performance-Based
    Compensation.



 



    The Compensation Committee shall determine the performance
    targets which will be applied with respect to each grant of Cash
    Awards that are intended to be Performance Based Compensation at
    the time of grant, but in no event later than 90 days after
    the beginning of the period of service to which the performance
    targets relate. The performance criteria applicable to
    Performance Based Compensation awards will be one or more of the
    following: (1) stock price; (2) average annual growth
    in earnings per share; (3) increase in shareholder value;
    (4) earnings per share; (5) net income;
    (6) return on assets; (7) return on shareholders’
    equity; (8) increase in cash flow; (9) operating
    profit or operating margins; (10) revenue growth of the
    Company; and (11) operating expenses. Each performance
    target applicable to a Cash Award intended to be Performance
    Based Compensation and the deadline for satisfying each such
    target shall be stated in the Agreement between the Company and
    the Employee. The Compensation Committee must certify in writing
    that each such target has been satisfied before the Performance
    Based Compensation award is paid.



 



    11. Other Stock Based Awards.  The
    Administrator shall have the right to grant Other Stock Based
    Awards which may include, without limitation, the grant of
    Shares based on certain conditions, the payment of cash based on
    the performance of the Common Stock, and the grant of securities
    convertible into Shares.



 



    12. Tax Withholding.  The Company shall
    deduct from all cash distributions under the Plan any taxes
    required to be withheld by federal, state, local or foreign
    government. Whenever the Company proposes or is required to
    issue or transfer Shares under the Plan, the Company shall have
    the right to require the recipient to remit to the Company an
    amount sufficient to satisfy any federal, state, local and
    foreign withholding tax requirements prior to the delivery of
    any certificate or certificates for such shares. A Grantee may
    pay the withholding tax in cash, or, if the applicable Award
    Agreement provides, a Grantee may elect to have the number of
    Shares he is to receive reduced by the smallest number of whole
    Shares that, when multiplied by the Fair Market Value of the
    Shares determined as of the Tax Date (defined below), is
    sufficient to satisfy federal, state, local and foreign, if any,
    withholding taxes arising from exercise or payment of a grant
    under the Plan (a “Withholding Election”). A Grantee
    may make a Withholding Election only if the Withholding Election
    is made on or prior to the date on which the amount of tax
    required to be withheld is determined (the “Tax Date”)
    by executing and delivering to the Company a properly completed
    notice of Withholding Election as prescribed by the
    Administrator. The Administrator may in its sole and absolute
    discretion disapprove and give no effect to the Withholding
    Election.



 



    13. Adjustments Upon Changes in Capitalization or Change
    in Control.



 



    (a) Changes in Capitalization.  Subject to
    any required action by the shareholders of the Company, the
    number of Covered Shares, and the number of shares of Common
    Stock which have been authorized for issuance under the Plan but
    as to which no Awards have yet been granted or which have been
    returned to the Plan upon cancellation or expiration of an
    Award, as well as the price per share of Covered Stock, shall be
    proportionately adjusted for any increase or decrease in the
    number of issued shares of Common Stock resulting from a stock
    split, reverse stock split, stock dividend, combination or
    reclassification of the Common Stock, or any other increase or
    decrease in the number of issued shares of Common Stock effected
    without receipt of consideration by the Company; provided,
    however, that conversion of any convertible securities of the
    Company shall not be deemed to have been “effected without
    receipt of consideration.” Such adjustment shall be made by
    the Board, whose determination in that respect shall be final,
    binding and conclusive. Except as expressly provided herein, no
    issuance by the Company of shares of stock of any class, or
    securities




    

    13








 






    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 of Covered Stock.



 



    (b) Change in Control.  In the event of a
    Change in Control, then the following provisions shall apply:



 



    (i) all outstanding Options shall become fully exercisable,
    except to the extent that the right to exercise the Option is
    subject to restrictions established in connection with a SAR
    that is issued in tandem with the Option;



 



    (ii) all outstanding SARs shall become immediately payable,
    except to the extent that the right to exercise the SAR is
    subject to restrictions established in connection with an Option
    that is issued in tandem with the SAR;



 



    (iii) all Shares of Restricted Stock shall become fully
    vested;



 



    (iv) all Performance Shares and Performance Units shall be
    deemed to be fully earned and shall be paid out in such manner
    as determined by the Compensation Committee; and



 



    (v) all Cash Awards, Other Stock Based Awards and other
    Awards shall become fully vested
    and/or
    earned and paid out in such manner as determined by the
    Compensation Committee.



 



    In addition to the provisions of Section 13(b) above and to
    the extent not inconsistent therewith the Compensation
    Committee, in its sole discretion, may: (1) provide for the
    purchase of any Award for an amount of cash equal to the amount
    which could have been attained upon the exercise or realization
    of such Award had such Award been currently exercisable or
    payable; (2) make such adjustment to the Awards then
    outstanding as the Compensation Committee deems appropriate to
    reflect such transaction or change;
    and/or
    (3) cause the Awards then outstanding to be assumed, or new
    Awards substituted therefore, by the surviving corporation in
    such change.



 



    14. Term of Plan.  The Plan shall become
    effective upon its approval by the shareholders of the Company.
    Such shareholder approval shall be obtained in the manner and to
    the degree required under applicable federal and state law. The
    Plan shall continue in effect until the tenth anniversary of
    adoption of the Plan by the Board, unless terminated earlier
    under Section 15 of the Plan.



 



    15. Amendment and Termination of the Plan.



 



    (a) Amendment and Termination.  The Board
    may at any time amend, alter, suspend or terminate the Plan.



 



    (b) Shareholder Approval.  The Company
    shall obtain shareholder approval of any Plan amendment to the
    extent necessary and desirable to comply with
    Rule 16b-3
    or with Section 422 or Section 162(m) of the Code (or
    any successor rule or statute) or other Applicable Law. Such
    shareholder approval, if required, shall be obtained in such a
    manner and to such a degree as is required by the Applicable Law.



 



    (c) Effect of Amendment or
    Termination.  No amendment, alteration, suspension
    or termination of the Plan shall impair the rights of any
    Grantee, unless mutually agreed otherwise between the Grantee
    and the Administrator, which agreement must be in writing and
    signed by the Grantee and the Company.



 



    16. Conditions Upon Issuance of Shares.



 



    (a) Legal Compliance.  Shares shall not be
    issued pursuant to an Award unless the exercise, if applicable,
    of such Award and the issuance and delivery of such Shares shall
    comply with all relevant provisions of law, including, without
    limitation, the Securities Act of 1933, as amended, the Exchange
    Act, the rules and regulations promulgated thereunder,
    Applicable Law, and the requirements of any stock exchange or
    quotation system upon which the Shares may then be listed or
    quoted, and any insider trading policy adopted by the Company,
    and shall be further subject to the approval of counsel for the
    Company with respect to such compliance.



 



    (b) Investment Representations.  As a
    condition to the exercise of an Award, the Company may require
    the person exercising such Award to represent and warrant at the
    time of any such exercise that the Shares are




    

    14








 






    being purchased only for investment and without any present
    intention to sell or distribute such Shares if, in the opinion
    of counsel for the Company, such a representation is required.



 



    17. Liability of Company.



 



    (a) Inability to Obtain Authority.  The
    inability of the Company to obtain authority from any regulatory
    body having jurisdiction, which authority is deemed by the
    Company’s counsel to be necessary to the lawful issuance
    and sale of any Shares hereunder, shall relieve the Company of
    any liability in respect of the failure to issue or sell such
    Shares as to which such requisite authority shall not have been
    obtained.



 



    (b) Grants Exceeding Allotted Shares.  If
    the Covered Stock covered by an Award exceeds, as of the date of
    grant, the number of Shares that may be issued under the Plan
    without additional shareholder approval, such Award shall be
    void with respect to such excess Covered Stock, unless
    shareholder approval of an amendment sufficiently increasing the
    number of Shares subject to the Plan is timely obtained in
    accordance with Section 15 of the Plan.



 



    18. Reservation of Shares.  The Company,
    during the term of the Plan, will at all times reserve and keep
    available such number of Shares as shall be sufficient to
    satisfy the requirements of the Plan.



 



    19. Rights of Employees.  Neither the Plan
    nor any Award shall confer upon a Grantee any right with respect
    to continuing the Grantee’s employment relationship with
    the Company, nor shall they interfere in any way with the
    Grantee’s right or the Company’s right to terminate
    such employment relationship at any time, with or without cause.



 



    20. Sub-plans
    for Foreign Subsidiaries.  The Board may adopt
    sub-plans
    applicable to particular foreign Subsidiaries. All Awards
    granted under such
    sub-plans
    shall be treated as grants under the Plan. The rules of such
    sub-plans
    may take precedence over other provisions of the Plan, with the
    exception of Section 3, but unless otherwise superseded by
    the terms of such
    sub-plan,
    the provisions of the Plan shall govern the operation of such
    sub-plan.



 



    21. Construction.  The Plan shall be
    construed under the laws of the State of Delaware, to the extent
    not preempted by federal law, without reference to the
    principles of conflict of laws.



 



    22. Certain Limitations on Awards to Ensure Compliance
    with Code Section 409A.  For purposes of this
    Plan, references to an award term or event (including any
    authority or right of the Company or a Grantee) being
    “permitted” under Code Section 409A mean, for a
    409A Award (meaning an Award that constitutes a deferral of
    compensation under Code Section 409A and regulations
    thereunder), that the term or event will not cause the Grantee
    to be liable for payment of interest or a tax penalty under Code
    Section 409A and, for a Non-409A Award (meaning all Awards
    other than 409A Awards), that the term or event will not cause
    the Award to be treated as subject to Code Section 409A.
    Other provisions of the Plan notwithstanding, the terms of any
    409A Award and any Non-409A Award, including any authority of
    the Company and rights of the Grantee with respect to the Award,
    shall be limited to those terms permitted under Code
    Section 409A, and any terms not permitted under Code
    Section 409A shall be automatically modified and limited to
    the extent necessary to conform with Code Section 409A. For
    this purpose, other provisions of the Plan notwithstanding, the
    Company shall have no authority to accelerate distributions
    relating to 409A Awards in excess of the authority permitted
    under Code Section 409A, and any distribution subject to
    Code Section 409A(a)(2)(A)(i) (separation from service) to
    a “key employee” as defined under Code
    Section 409A(a)(2)(B)(i), shall not occur earlier than the
    earliest time permitted under Code Section 409A(a)(2)(B)(i).




    

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