2006 Stock Incentive Plan


    EXHIBIT
      10.4

    


    PETRO
      RESOURCES CORPORATION

    


    2006
      STOCK INCENTIVE PLAN

     

    


    
      	1.	
              Purpose
                of Plan.

            


    

     

    The
      purpose of the Petro Resources Corporation 2006 Stock Incentive Plan (the
“Plan”) is to advance the interests of Petro Resources Corporation (the
“Company”) and its stockholders by enabling the Company and its Subsidiaries to
      attract and retain qualified individuals through opportunities for equity
      participation in the Company, and to reward those individuals who contribute
      to
      the Company’s achievement of its economic objectives.

     

    
      	2.	
              Definitions.

            


    

     

    The
      following terms will have the meanings set forth below, unless the context
      clearly otherwise requires:

     

    2.1. “Board”
means
      the Company’s Board of Directors.

     

    2.2. “Broker
      Exercise Notice”
means
      a
      written notice pursuant to which a Participant, upon exercise of an Option,
      irrevocably instructs a broker or dealer to sell a sufficient number of shares
      or loan a sufficient amount of money to pay all or a portion of the exercise
      price of the Option and/or any related withholding tax obligations and remit
      such sums to the Company and directs the Company to deliver stock certificates
      to be issued upon such exercise directly to such broker or dealer or their
      nominee.

     

    2.3. “Cause”
means
      (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury
      or
      attempted injury, in each case related to the Company or any Subsidiary, (ii)
      any unlawful or criminal activity of a serious nature, (iii) any intentional
      and
      deliberate breach of a duty or duties that, individually or in the aggregate,
      are material in relation to the Participant’s overall duties, (iv) any material
      breach of any confidentiality or noncompete agreement entered into with the
      Company or any Subsidiary, or (v) with respect to a particular Participant,
      any
      other act or omission that constitutes “cause” as may be defined in any
      employment, consulting or similar agreement between such Participant and the
      Company or any Subsidiary.

     

    2.4. “Change
      in Control”
means
      an event described in Section 11.1 of the Plan.

     

    2.5. “Code”
means
      the Internal Revenue Code of 1986, as amended. 

     

    2.6. “Committee”
means
      the group of individuals administering the Plan, as provided in Section 3 of
      the
      Plan. 

     

    2.7. “Common
      Stock”
means
      the common stock of the Company, par value $0.01 per share, or the number and
      kind of shares of stock or other securities into which such Common Stock may
      be
      changed in accordance with Section 4.3 of the Plan. 

     

    2.8. “Disability”
means
      the disability of the Participant such as would entitle the Participant to
      receive disability income benefits pursuant to the long-term disability plan
      of
      the Company or Subsidiary then covering the Participant or, if no such plan
      exists or is applicable to the Participant, the permanent and total disability
      of the Participant within the meaning of Section 22(e)(3) of the Code.


     

    
      
         

      

      
        1

        
          

        

      

      
         


    

     

    2.9. “Effective
      Date”
means
      March 1, 2006, but no Incentive Stock Option shall be exercised unless and
      until
      the Plan has been approved by the stockholders of the Company, which approval
      shall be within twelve (12) months before or after the date the Plan is adopted
      by the Board. 

     

    2.10. “Eligible
      Recipients”
means
      all employees, officers and directors of the Company or any Subsidiary, and
      any
      consultants and advisors to the Company or any Subsidiary. 

     

    2.11. “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    2.12. “Fair
      Market Value”
means,
      with respect to the Common Stock, as of any date: (i) the mean between the
      reported high and low sale prices of the Common Stock at the end of the regular
      trading session if the Common Stock is listed, admitted to unlisted trading
      privileges, or reported on any national securities exchange or on the Nasdaq
      National Market on such date (or, if no shares were traded on such day, as
      of
      the next preceding day on which there was such a trade); or (ii) if the
      Common Stock is not so listed, admitted to unlisted trading privileges, or
      reported on any national exchange or on the Nasdaq National Market, the closing
      bid price as of such date at the end of the regular trading session, as reported
      by the Nasdaq SmallCap Market, OTC Bulletin Board, the National Quotation
      Bureaus, Inc., or other comparable service; or (iii) if the Common Stock is
      not
      so listed or reported, such price as the Committee determines in good faith
      in
      the exercise of its reasonable discretion. 

     

    2.13. “Incentive
      Award”
means
      an Option, Restricted Stock Award or Performance Stock Award granted to an
      Eligible Recipient pursuant to the Plan.

     

    2.14. “Incentive
      Stock Option”
means
      a
      right to purchase Common Stock granted to an Eligible Recipient pursuant to
      Section 6 of the Plan that qualifies as an “incentive stock option” within the
      meaning of Section 422 of the Code.

     

    2.15. “Non-Statutory
      Stock Option”
means
      a
      right to purchase Common Stock granted to an Eligible Recipient pursuant to
      Section 6 of the Plan that does not qualify as an Incentive Stock
      Option.

     

    2.16. “Option”
means
      an Incentive Stock Option or a Non-Statutory Stock Option. 

     

    2.17. “Participant”
means
      an Eligible Recipient who receives one or more Incentive Awards under the Plan.
      

     

    2.18. “Performance
      Criteria”
means
      the performance criteria that may be used by the Committee in granting
      Performance Stock Awards contingent upon achievement of such performance goals
      as the Committee may determine in its sole discretion. The Committee may select
      one criterion or multiple criteria for measuring performance, and the
      measurement may be based upon Company, Subsidiary or business unit performance,
      or the individual performance of the Eligible Recipient, either absolute or
      by
      relative comparison to other companies, other Eligible Recipients or any other
      external measure of the selected criteria.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.19. “Performance
      Stock Awards”
means
      an award of Common Stock granted to an Eligible Recipient pursuant to Section
      8
      of the Plan and which may be subject to the future achievement of Performance
      Criteria or be free of any performance or vesting conditions.

     

    2.20. “Previously
      Acquired Shares”
means
      shares of Common Stock that are already owned by the Participant or, with
      respect to any Incentive Award, that are to be issued upon the grant, exercise
      or vesting of such Incentive Award.

     

    2.21. “Restricted
      Stock Award”
means
      an award of Common Stock granted to an Eligible Recipient pursuant to Section
      7
      of the Plan that is subject to the restrictions on transferability and the
      risk
      of forfeiture imposed by the provisions of such Section 7.

     

    2.22. “Retirement”
means
      normal or approved early termination of employment or service pursuant to and
      in
      accordance with the regular retirement/pension plan or practice of the Company
      or Subsidiary then covering the Participant, provided that if the Participant
      is
      not covered by any such plan or practice, the Participant will be deemed to
      be
      covered by the Company’s plan or practice for purposes of this
      determination.

     

    2.23. “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    2.24. “Subsidiary”
means
      any entity that is directly or indirectly controlled by the Company or any
      entity in which the Company has a significant equity interest, as determined
      by
      the Committee.

     

    
      	3.	
              Plan
                Administration.

            


    

     

    3.1. The
      Committee.
      The
      Plan will be administered by the Board or by a committee of the Board. So long
      as the Company has a class of its equity securities registered under Section
      12
      of the Exchange Act, any committee administering the Plan will consist solely
      of
      two or more members of the Board who are “non-employee directors” within the
      meaning of Rule 16b-3 under the Exchange Act. Such a committee, if established,
      will act by majority approval of the members (unanimous approval with respect
      to
      action by written consent), and a majority of the members of such a committee
      will constitute a quorum. As used in the Plan, “Committee” will refer to the
      Board or to such a committee, if established. To the extent consistent with
      applicable corporate law of the Company’s jurisdiction of incorporation, the
      Committee may delegate to any officers of the Company the duties, power and
      authority of the Committee under the Plan pursuant to such conditions or
      limitations as the Committee may establish; provided, however, that only the
      Committee may exercise such duties, power and authority with respect to Eligible
      Recipients who are subject to Section 16 of the Exchange Act. The Committee
      may
      exercise its duties, power and authority under the Plan in its sole and absolute
      discretion without the consent of any Participant or other party, unless the
      Plan specifically provides otherwise. Each determination, interpretation or
      other action made or taken by the Committee pursuant to the provisions of the
      Plan will be conclusive and binding for all purposes and on all persons, and
      no
      member of the Committee will be liable for any action or determination made
      in
      good faith with respect to the Plan or any Incentive Award granted under the
      Plan. 

     

    
      	
            	3.2.	
              Authority
                of the Committee.

            


    

     

    (a) In
      accordance with and subject to the provisions of the Plan, the Committee will
      have the authority to determine all provisions of Incentive Awards as the
      Committee may deem necessary or desirable and as consistent with the terms
      of
      the Plan, including, without limitation, the following: (i) the Eligible
      Recipients to be selected as Participants; (ii) the nature and extent of the
      Incentive Awards to be made to each Participant (including the number of shares
      of Common Stock to be subject to each Incentive Award, any exercise price,
      the
      manner in which Incentive Awards will vest or become exercisable and whether
      Incentive Awards will be granted in tandem with other Incentive Awards) and
      the
      form of written agreement, if any, evidencing such Incentive Award; (iii) the
      time or times when Incentive Awards will be granted; (iv) the duration of each
      Incentive Award; and (v) the restrictions and other conditions to which the
      payment or vesting of Incentive Awards may be subject. In addition, the
      Committee will have the authority under the Plan in its sole discretion to
      pay
      the economic value of any Incentive Award in the form of cash, Common Stock
      or
      any combination of both.

     

    
      
         

      

      
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    (b) Subject
      to Section 3.2(d), below, the Committee will have the authority under the Plan
      to amend or modify the terms of any outstanding Incentive Award in any manner,
      including, without limitation, the authority to modify the number of shares
      or
      other terms and conditions of an Incentive Award, extend the term of an
      Incentive Award, accelerate the exercisability or vesting or otherwise terminate
      any restrictions relating to an Incentive Award, accept the surrender of any
      outstanding Incentive Award or, to the extent not previously exercised or
      vested, authorize the grant of new Incentive Awards in substitution for
      surrendered Incentive Awards; provided, however that the amended or modified
      terms are permitted by the Plan as then in effect and that any Participant
      adversely affected by such amended or modified terms has consented to such
      amendment or modification.

     

    (c) In
      the
      event of (i) any reorganization, merger, consolidation, recapitalization,
      liquidation, reclassification, stock dividend, stock split, combination of
      shares, rights offering, extraordinary dividend or divestiture (including a
      spin-off) or any other change in corporate structure or shares; (ii) any
      purchase, acquisition, sale, disposition or write-down of a significant amount
      of assets or a significant business; (iii) any change in accounting principles
      or practices, tax laws or other such laws or provisions affecting reported
      results; or (iv) any other similar change, in each case with respect to the
      Company or any other entity whose performance is relevant to the grant or
      vesting of an Incentive Award, the Committee (or, if the Company is not the
      surviving corporation in any such transaction, the board of directors of the
      surviving corporation) may, without the consent of any affected Participant,
      amend or modify the vesting criteria (including Performance Criteria) of any
      outstanding Incentive Award that is based in whole or in part on the financial
      performance of the Company (or any Subsidiary or division or other subunit
      thereof) or such other entity so as equitably to reflect such event, with the
      desired result that the criteria for evaluating such financial performance
      of
      the Company or such other entity will be substantially the same (in the sole
      discretion of the Committee or the board of directors of the surviving
      corporation) following such event as prior to such event; provided, however,
      that the amended or modified terms are permitted by the Plan as then in
      effect.

     

    (d) Notwithstanding
      any other provision of this Plan other than Section 4.3, the Committee may
      not,
      without prior approval of the Company’s stockholders, seek to effect any
      re-pricing of any previously granted, “underwater” Option by: (i) amending or
      modifying the terms of the Option to lower the exercise price; (ii) canceling
      the underwater Option and granting either (A) replacement Options having a
      lower
      exercise price; (B) Restricted Stock Awards; or (C) Performance Stock Awards
      in
      exchange; or (iii) repurchasing the underwater Options and granting new
      Incentive Awards under this Plan. For purposes of this Section 3.2(d) and
      Section 11.4, an Option will be deemed to be “underwater” at any time when the
      Fair Market Value of the Common Stock is less than the exercise price of the
      Option. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              4.

            	
              Shares
                Available for Issuance.

            


    

     

    4.1. Maximum
      Number of Shares Available; Certain Restrictions on Awards.
      Subject
      to adjustment as provided in Section 4.3 of the Plan, the maximum number of
      shares of Common Stock that will be available for issuance under the Plan will
      be 1,500,000. The shares available for issuance under the Plan may, at the
      election of the Committee, be either treasury shares or shares authorized but
      unissued, and, if treasury shares are used, all references in the Plan to the
      issuance of shares will, for corporate law purposes, be deemed to mean the
      transfer of shares from treasury. 

     

    4.2. Accounting
      for Incentive Awards.
      Shares
      of Common Stock that are issued under the Plan or that are subject to
      outstanding Incentive Awards will be applied to reduce the maximum number of
      shares of Common Stock remaining available for issuance under the Plan;
      provided, however, that shares subject to an Incentive Award that lapses,
      expires, is forfeited (including issued shares forfeited under a Restricted
      Stock Award) or for any reason is terminated unexercised or unvested or is
      settled or paid in cash or any form other than shares of Common Stock will
      automatically again become available for issuance under the Plan. To the extent
      that the exercise price of any Option and/or associated tax withholding
      obligations are paid by tender or attestation as to ownership of Previously
      Acquired Shares, or to the extent that such tax withholding obligations are
      satisfied by withholding of shares otherwise issuable upon exercise of the
      Option, only the number of shares of Common Stock issued net of the number
      of
      shares tendered, attested to or withheld will be applied to reduce the maximum
      number of shares of Common Stock remaining available for issuance under the
      Plan. 

     

    4.3. Adjustments
      to Shares and Incentive Awards.
      In the
      event of any reorganization, merger, consolidation, recapitalization,
      liquidation, reclassification, stock dividend, stock split, combination of
      shares or any other change in the corporate structure or shares of the Company,
      the Committee (or, if the Company is not the surviving corporation in any such
      transaction, the board of directors of the surviving corporation) will make
      appropriate adjustment (which determination will be conclusive) as to the number
      and kind of securities or other property (including cash) available for issuance
      or payment under the Plan and, in order to prevent dilution or enlargement
      of
      the rights of Participants, the number and kind of securities or other property
      (including cash) subject to outstanding Incentive Awards and the exercise price
      of outstanding Options.

     

    
      	5.	
              Participation.
                

            


    

     

    Participants
      in the Plan will be those Eligible Recipients who, in the judgment of the
      Committee, have contributed, are contributing or are expected to contribute
      to
      the achievement of economic objectives of the Company or its Subsidiaries.
      Eligible Recipients may be granted from time to time one or more Incentive
      Awards, singly or in combination or in tandem with other Incentive Awards,
      as
      may be determined by the Committee in its sole discretion. Incentive Awards
      will
      be deemed to be granted as of the date specified in the grant resolution of
      the
      Committee, which date will be the date of any related agreement with the
      Participant.

     

    
      	6.	
              Options.

            


    

     

    6.1. Grant.
      An
      Eligible Recipient may be granted one or more Options under the Plan, and such
      Options will be subject to such terms and conditions, consistent with the other
      provisions of the Plan, as may be determined by the Committee in its sole
      discretion. The Committee may designate whether an Option is to be considered
      an
      Incentive Stock Option or a Non-Statutory Stock Option. To the extent that
      any
      Incentive Stock Option granted under the Plan ceases for any reason to qualify
      as an “incentive stock option” for purposes of Section 422 of the Code, such
      Incentive Stock Option will continue to be outstanding for purposes of the
      Plan
      but will thereafter be deemed to be a Non-Statutory Stock Option.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    6.2. Exercise
      Price.
      The per
      share price to be paid by a Participant upon exercise of an Option will be
      determined by the Committee in its discretion at the time of the Option grant;
      provided, however, that such price will not be less than 100% of the Fair Market
      Value of one share of Common Stock on the date of grant with respect to any
      Incentive Stock Option (110% of the Fair Market Value with respect to an
      Incentive Stock Option if, at the time such Incentive Stock Option is granted,
      the Participant owns, directly or indirectly, more than 10% of the total
      combined voting power of all classes of stock of the Company or any parent
      or
      subsidiary corporation of the Company). 

     

    6.3. Exercisability
      and Duration.
      An
      Option will become exercisable at such times and in such installments and upon
      such terms and conditions as may be determined by the Committee in its sole
      discretion at the time of grant (including without limitation (i) the
      achievement of one or more of the Performance Criteria and/or (ii) that the
      Participant remain in the continuous employ or service of the Company or a
      Subsidiary for a certain period); provided, however, that no Option may be
      exercisable after 10 years from its date of grant (five years from its date
      of
      grant in the case of an Incentive Stock Option if, at the time the Incentive
      Stock Option is granted, the Participant owns, directly or indirectly, more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      any parent or subsidiary corporation of the Company). 

     

    6.4. Payment
      of Exercise Price.
      The
      total purchase price of the shares to be purchased upon exercise of an Option
      will be paid entirely in cash (including check, bank draft or money order);
      provided, however, that the Committee, in its sole discretion and upon terms
      and
      conditions established by the Committee, may allow such payments to be made,
      in
      whole or in part, by tender of a Broker Exercise Notice, by tender, or
      attestation as to ownership, of Previously Acquired Shares that have been held
      for the period of time necessary to avoid a charge to the Company’s earnings for
      financial reporting purposes and that are otherwise acceptable to the Committee,
      or by a combination of such methods. For purposes of such payment, Previously
      Acquired Shares tendered or covered by an attestation will be valued at their
      Fair Market Value on the exercise date.

     

    6.5. Manner
      of Exercise.
      An
      Option may be exercised by a Participant in whole or in part from time to time,
      subject to the conditions contained in the Plan and in the agreement evidencing
      such Option, by delivery in person, by facsimile or electronic transmission
      or
      through the mail of written notice of exercise to the Company at its principal
      executive office in Houston, Texas and by paying in full the total exercise
      price for the shares of Common Stock to be purchased in accordance with Section
      6.4 of the Plan.

     

    
      	7.	
              Restricted
                Stock Awards.

            


    

     

    7.1. Grant.
      An
      Eligible Recipient may be granted one or more Restricted Stock Awards under
      the
      Plan, and such Restricted Stock Awards will be subject to such terms and
      conditions, consistent with the other provisions of the Plan, as may be
      determined by the Committee in its sole discretion. The Committee may impose
      such restrictions or conditions, not inconsistent with the provisions of the
      Plan, to the vesting of such Restricted Stock Awards as it deems appropriate,
      including, without limitation, (i) the achievement of one or more of the
      Performance Criteria and/or (ii) that the Participant remain in the continuous
      employ or service of the Company or a Subsidiary for a certain
      period.

     

    7.2. Rights
      as a Stockholder; Transferability.
      Except
      as provided in Sections 7.1, 7.3, 7.4 and 12.3 of the Plan, a Participant will
      have all voting, dividend, liquidation and other rights with respect to shares
      of Common Stock issued to the Participant as a Restricted Stock Award under
      this
      Section 7 upon the Participant becoming the holder of record of such shares
      as
      if such Participant were a holder of record of shares of unrestricted Common
      Stock.

     

    
      
         

      

      
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    7.3. Dividends
      and Distributions.
      Unless
      the Committee determines otherwise in its sole discretion (either in the
      agreement evidencing the Restricted Stock Award at the time of grant or at
      any
      time after the grant of the Restricted Stock Award), any dividends or
      distributions (other than regular quarterly cash dividends) paid with respect
      to
      shares of Common Stock subject to the unvested portion of a Restricted Stock
      Award will be subject to the same restrictions as the shares to which such
      dividends or distributions relate. The Committee will determine in its sole
      discretion whether any interest will be paid on such dividends or
      distributions.

     

    7.4. Enforcement
      of Restrictions.
      To
      enforce the restrictions referred to in this Section 7, the Committee may place
      a legend on the stock certificates referring to such restrictions and may
      require the Participant, until the restrictions have lapsed, to keep the stock
      certificates, together with duly endorsed stock powers, in the custody of the
      Company or its transfer agent, or to maintain evidence of stock ownership,
      together with duly endorsed stock powers, in a certificateless book-entry stock
      account with the Company’s transfer agent.

     

    
      	8.	
              Performance
                Stock Awards.
                

            


    

     

    8.1. An
      Eligible Recipient may be granted one or more Performance Stock Awards under
      the
      Plan, and the issuance of shares of Common Stock pursuant to such Performance
      Stock Awards will be subject to such terms and conditions, if any, consistent
      with the other provisions of the Plan, as may be determined by the Committee
      in
      its sole discretion, including, but not limited to, the achievement of one
      or
      more of the Performance Criteria. 

     

    8.2. Restrictions
      on Transfers.  The
      right to receive shares of Performance Stock Awards on a deferred basis may
      not
      be sold, assigned, transferred, pledged or otherwise encumbered, other than
      by
      will or the laws of descent and distribution.

     

    
      	9.	
              Effect
                of Termination of Employment or Other Service.
                

            


    

     

    9.1. Termination
      Due to Death or Disability.
      In the
      event a Participant’s employment or other service with the Company and all
      Subsidiaries is terminated by reason of death or Disability:

     

    (a) All
      outstanding Options then held by the Participant will, to the extent exercisable
      as of such termination, remain exercisable for a period of six (6) months after
      such termination (but in no event after the expiration date of any such Option);
      and

     

    (b) All
      Restricted Stock Awards then held by the Participant that have not vested as
      of
      such termination will be terminated and forfeited; and

     

    (c) All
      outstanding Performance Stock Awards then held by the Participant that have
      not
      vested as of such termination will be terminated and forfeited.

     

    9.2. Termination
      Due to Retirement.
      Subject
      to Section 9.5 of the Plan, in the event a Participant’s employment or other
      service with the Company and all Subsidiaries is terminated by reason of
      Retirement:

     

    (a) All
      outstanding Options then held by the Participant will, to the extent exercisable
      as of such termination, remain exercisable in full for a period of three (3)
      months after such termination (but in no event after the expiration date of
      any
      such Option). Options not exercisable as of such Retirement will be forfeited
      and terminate; and

     

    
      
         

      

      
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    (b) All
      Restricted Stock Awards then held by the Participant that have not vested as
      of
      such termination will be terminated and forfeited; and

     

    (c) All
      outstanding Performance Stock Awards then held by the Participant that have
      not
      vested as of such termination will be terminated and forfeited.

     

    9.3. Termination
      for Reasons Other than Death, Disability or Retirement.
      Subject
      to Section 9.5 of the Plan, in the event a Participant’s employment or other
      service is terminated with the Company and all Subsidiaries for any reason
      other
      than death, Disability or Retirement, or a Participant is in the employ of
      a
      Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless
      the Participant continues in the employ of the Company or another
      Subsidiary):

     

    (a) All
      outstanding Options then held by the Participant will, to the extent exercisable
      as of such termination, remain exercisable in full for a period of three months
      after such termination (but in no event after the expiration date of any such
      Option). Options not exercisable as of such termination will be forfeited and
      terminate; and

     

    (b) All
      Restricted Stock Awards then held by the Participant that have not vested as
      of
      such termination will be terminated and forfeited; and

     

    (c) All
      outstanding Performance Stock Awards then held by the Participant that have
      not
      vested as of such termination will be terminated and forfeited.

     

    9.4. Modification
      of Rights Upon Termination.
      Notwithstanding the other provisions of this Section 9, upon a Participant’s
      termination of employment or other service with the Company and all
      Subsidiaries, the Committee may, in its sole discretion (which may be exercised
      at any time on or after the date of grant, including following such
      termination), cause Options (or any part thereof) then held by such Participant
      to become or continue to become exercisable and/or remain exercisable following
      such termination of employment or service, and Restricted Stock Awards and
      Performance Stock Awards then held by such Participant to vest and/or continue
      to vest or become free of restrictions and conditions to issuance, as the case
      may be, following such termination of employment or service, in each case in
      the
      manner determined by the Committee.

     

    9.5. Effects
      of Actions Constituting Cause.
      Notwithstanding anything in the Plan to the contrary, in the event that a
      Participant is determined by the Committee, acting in its sole discretion,
      to
      have committed any action which would constitute Cause as defined in Section
      2.3, irrespective of whether such action or the Committee’s determination occurs
      before or after termination of such Participant’s employment or service with the
      Company or any Subsidiary, all rights of the Participant under the Plan and
      any
      agreements evidencing an Incentive Award then held by the Participant shall
      terminate and be forfeited without notice of any kind. The Company may defer
      the
      exercise of any Option or the vesting of any Restricted Stock Award for a period
      of up to forty-five (45) days in order for the Committee to make any
      determination as to the existence of Cause.

     

    9.6. Determination
      of Termination of Employment or Other Service.
      Unless
      the Committee otherwise determines in its sole discretion, a Participant’s
      employment or other service will, for purposes of the Plan, be deemed to have
      terminated on the date recorded on the personnel or other records of the Company
      or the Subsidiary for which the Participant provides employment or service,
      as
      determined by the Committee in its sole discretion based upon such
      records.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	10.	
              Payment
                of Withholding Taxes.

            


    

     

    10.1. General
      Rules.
      The
      Company is entitled to (a) withhold and deduct from future wages of the
      Participant (or from other amounts that may be due and owing to the Participant
      from the Company or a Subsidiary), or make other arrangements for the collection
      of, all legally required amounts necessary to satisfy any and all federal,
      foreign, state and local withholding and employment-related tax requirements
      attributable to an Incentive Award, including, without limitation, the grant,
      exercise or vesting of, or payment of dividends with respect to, an Incentive
      Award or a disqualifying disposition of stock received upon exercise of an
      Incentive Stock Option, or (b) require the Participant promptly to remit the
      amount of such withholding to the Company before taking any action, including
      issuing any shares of Common Stock, with respect to an Incentive
      Award.

     

    10.2. Special
      Rules.
      The
      Committee may, in its sole discretion and upon terms and conditions established
      by the Committee, permit or require a Participant to satisfy, in whole or in
      part, any withholding or employment-related tax obligation described in Section
      10.1 of the Plan by electing to tender, or by attestation as to ownership of,
      Previously Acquired Shares that have been held for the period of time necessary
      to avoid a charge to the Company’s earnings for financial reporting purposes and
      that are otherwise acceptable to the Committee, by delivery of a Broker Exercise
      Notice or a combination of such methods. For purposes of satisfying a
      Participant’s withholding or employment-related tax obligation, Previously
      Acquired Shares tendered or covered by an attestation will be valued at their
      Fair Market Value. 

     

    
      	11.	
              Change
                in Control.

            


    

     

    11.1. A
“Change
      in Control” shall be deemed to have occurred if the event set forth in any one
      of the following paragraphs has occurred:

     

    (a) the
      sale,
      lease, exchange or other transfer, directly or indirectly, of substantially
      all
      of the assets of the Company (in one transaction or in a series of related
      transactions) to any Successor; 

     

    (b) the
      approval by the stockholders of the Company of any plan or proposal for the
      liquidation or dissolution of the Company;

     

    (c) any
      Successor (as defined in Section 11.2 below), other than a Bona Fide Underwriter
      (as defined in Section 11.2 below), becomes after the effective date of the
      Plan
      the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of (i) 20% or more, but not 50% or more, of the combined
      voting power of the Company’s outstanding securities ordinarily having the right
      to vote at elections of directors, unless the transaction resulting in such
      ownership has been approved in advance by the Continuity Directors (as defined
      in Section 11.2 below), or (ii) more than 50% of the combined voting power
      of
      the Company’s outstanding securities ordinarily having the right to vote at
      elections of directors (regardless of any approval by the Continuity Directors);
      

     

    (d) a
      merger
      or consolidation to which the Company is a party if the stockholders of the
      Company immediately prior to effective date of such merger or consolidation
      have
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act),
      immediately following the effective date of such merger or consolidation, of
      securities of the surviving corporation representing (i) 50% or more, but not
      more than 80%, of the combined voting power of the surviving corporation’s then
      outstanding securities ordinarily having the right to vote at elections of
      directors, unless such merger or consolidation has been approved in advance
      by
      the Continuity Directors, or (ii) less than 50% of the combined voting
      power of the surviving corporation’s then outstanding securities ordinarily
      having the right to vote at elections of directors (regardless of any approval
      by the Continuity Directors); or

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (e) the
      Continuity Directors cease for any reason to constitute at least 50% or more
      of
      the Board.

     

    
      	
            	11.2.	
              Change
                in Control Definitions.
                For purposes of this Section 11: 

            


    

     

    (a) “Continuity
      Directors”
of
      the
      Company will mean any individuals who are members of the Board on the effective
      date of the Plan and any individual who subsequently becomes a member of the
      Board whose election, or nomination for election by the Company’s stockholders,
      was approved by a vote of at least a majority of the Continuity Directors
      (either by specific vote or by approval of the Company’s proxy statement in
      which such individual is named as a nominee for director without objection
      to
      such nomination).

     

    (b) “Bona
      Fide Underwriter”
means
      an entity engaged in business as an underwriter of securities that acquires
      securities of the Company through such entity’s participation in good faith in a
      firm commitment underwriting until the expiration of 40 days after the date
      of
      such acquisition.

     

    (c) “Successor”
means
      any individual, corporation, partnership, group, association or other person,”
as such term is used in Section 13(d) or Section 14(d) of the Exchange Act,
      other than the Company, any “affiliate” (as defined below) or any benefit
      plan(s) sponsored by the Company or any affiliate that succeeds to, or has
      the
      practical ability to control (either immediately or solely with the passage
      of
      time), the Company’s business directly, by merger, consolidation or other form
      of business combination, or indirectly, by purchase of the Company’s outstanding
      securities ordinarily having the right to vote at the election of directors
      or
      all or substantially all of its assets or otherwise. For this purpose, an
“affiliate” is (i) any corporation at least a majority of whose outstanding
      securities ordinarily having the right to vote at elections of directors is
      owned directly or indirectly by the Company or (ii) any other form of business
      entity in which the Company, by virtue of a direct or indirect ownership
      interest, has the right to elect a majority of the members of such entity’s
      governing body.

     

    11.3. Acceleration
      of Vesting.
      Without
      limiting the authority of the Committee under Sections 3.2 and 4.3 of the Plan,
      if a Change in Control of the Company occurs, then, if approved by the Committee
      in its sole discretion either in an agreement evidencing an Incentive Award
      at
      the time of grant or at any time after the grant of an Incentive Award: (a)
      all
      Options that have been outstanding for at least six months will become
      immediately exercisable in full and will remain exercisable in accordance with
      their terms; (b) all Restricted Stock Awards that have been outstanding for
      at
      least six months will become immediately fully vested and non-forfeitable;
      and
      (c) any conditions to the issuance of shares of Common Stock pursuant to
      Performance Stock Awards that have been outstanding for at least six months
      will
      lapse.

     

    11.4. Cash
      Payment.
      If a
      Change in Control of the Company occurs, then the Committee, if approved by
      the
      Committee in its sole discretion either in an agreement evidencing an Incentive
      Award at the time of grant or at any time after the grant of an Incentive Award,
      and without the consent of any Participant affected thereby, may determine
      that:


     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (a) Some
      or
      all Participants holding outstanding Options will receive, with respect to
      some
      or all of the shares of Common Stock subject to such Options (“Option Shares”),
      either (i) as of the effective date of any such Change in Control, cash in
      an
      amount equal to the excess of the Fair Market Value of such Option Shares on
      the
      last business day prior to the effective date of such Change in Control over
      the
      exercise price per share of such Option Shares, (ii) immediately prior to such
      Change of Control, a number of shares of Common Stock having an aggregate Fair
      Market Value equal to the excess of the Fair Market Value of the Option Shares
      as of the last business day prior to the effective date of such Change in
      Control over the exercise price per share of such Option Shares; or (iii) any
      combination of cash or shares of Common Stock with the amount of each component
      to be determined by the Committee not inconsistent with the foregoing clauses
      (i) and (ii), as proportionally adjusted; and

     

    (b) any
      Options which, as of the effective date of any such Change in Control, are
      “underwater” (as defined in Section 3.2(d)) shall terminate as of the effective
      date of any such Change in Control; and

     

    (c) some
      or
      all Participants holding Performance Stock Awards will receive, with respect
      to
      some or all of the shares of Common Stock subject to such Performance Stock
      Awards that remain subject to issuance based upon the future achievement of
      Performance Criteria as of the effective date of any such Change in Control
      of
      the Company, cash in an amount equal the Fair Market Value of such shares
      immediately prior to the effective date of such Change in Control.

     

    11.5. Limitation
      on Change in Control Payments.
      Notwithstanding anything in Section 11.3 or 11.4 of the Plan to the
      contrary, if, with respect to a Participant, the acceleration of the
      exercisability of an Option as provided in Section 11.3 or the payment of
      cash or shares of Common Stock in exchange for all or part of an Option as
      provided in Section 11.4 (which acceleration or payment could be deemed a
“payment” within the meaning of Section 280G(b)(2) of the Code), together
      with any other “payments” that such Participant has the right to receive from
      the Company or any corporation that is a member of an “affiliated group” (as
      defined in Section 1504(a) of the Code without regard to
      Section 1504(b) of the Code) of which the Company is a member, would
      constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
      Code), then the “payments” to such Participant pursuant to Section 11.3 or 11.4
      of the Plan will be reduced to the largest amount as will result in no portion
      of such “payments” being subject to the excise tax imposed by Section 4999 of
      the Code; provided, however, that if a Participant is subject to a separate
      agreement with the Company or a Subsidiary which specifically provides that
      payments attributable to one or more forms of employee stock incentives or
      to
      payments made in lieu of employee stock incentives will not reduce any other
      payments under such agreement, even if it would constitute an excess parachute
      payment, or provides that the Participant will have the discretion to determine
      which payments will be reduced in order to avoid an excess parachute payment,
      then the limitations of this Section 11.4 will, to that extent, not apply.
      

     

    
      	12.	
              Rights
                of Eligible Recipients and Participants;
                Transferability.

            


    

     

    12.1. Employment
      or Service.
      Nothing
      in the Plan will interfere with or limit in any way the right of the Company
      or
      any Subsidiary to terminate the employment or service of any Eligible Recipient
      or Participant at any time, nor confer upon any Eligible Recipient or
      Participant any right to continue in the employ or service of the Company or
      any
      Subsidiary.

     

    12.2. Rights
      as a Stockholder.
      As a
      holder of Incentive Awards (other than Restricted Stock Awards), a Participant
      will have no rights as a stockholder unless and until such Incentive Awards
      are
      exercised for, or paid in the form of, shares of Common Stock and the
      Participant becomes the holder of record of such shares. Except as otherwise
      provided in the Plan, no adjustment will be made for dividends or distributions
      with respect to such Incentive Awards as to which there is a record date
      preceding the date the Participant becomes the holder of record of such shares,
      except as the Committee may determine in its discretion.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	
            	12.3.	
              Restrictions
                on Transfer.
                

            


    

     

    (a) Except
      pursuant to testamentary will or the laws of descent and distribution or as
      otherwise expressly permitted by subsections (b) and (c) below, no right or
      interest of any Participant in an Incentive Award prior to the exercise (in
      the
      case of Options) or vesting (in the case of Restricted Stock Awards) of such
      Incentive Award will be assignable or transferable, or subjected to any lien,
      during the lifetime of the Participant, either voluntarily or involuntarily,
      directly or indirectly, by operation of law or otherwise.

     

    (b) A
      Participant will be entitled to designate a beneficiary to receive an Incentive
      Award upon such Participant’s death, and in the event of such Participant’s
      death, payment of any amounts due under the Plan will be made to, and exercise
      of any Options (to the extent permitted pursuant to Section 9 of the Plan)
      may
      be made by, such beneficiary. If a deceased Participant has failed to designate
      a beneficiary, or if a beneficiary designated by the Participant fails to
      survive the Participant, payment of any amounts due under the Plan will be
      made
      to, and exercise of any Options (to the extent permitted pursuant to Section
      9
      of the Plan) may be made by, the Participant's legal representatives, heirs
      and
      legatees. If a deceased Participant has designated a beneficiary and such
      beneficiary survives the Participant but dies before complete payment of all
      amounts due under the Plan or exercise of all exercisable Options, then such
      payments will be made to, and the exercise of such Options may be made by,
      the
      legal representatives, heirs and legatees of the beneficiary.

     

    (c) Upon
      a
      Participant’s request, the Committee may, in its sole discretion, permit a
      transfer of all or a portion of a Non-Statutory Stock Option, other than for
      value, to such Participant’s 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,
      any person sharing such Participant’s household (other than a tenant or
      employee), a trust in which any of the foregoing have more than fifty percent
      of
      the beneficial interests, a foundation in which any of the foregoing (or the
      Participant) control the management of assets, and any other entity in which
      these persons (or the Participant) own more than fifty percent of the voting
      interests. Any permitted transferee will remain subject to all the terms and
      conditions applicable to the Participant prior to the transfer. A permitted
      transfer may be conditioned upon such requirements as the Committee may, in
      its
      sole discretion, determine, including, but not limited to execution and/or
      delivery of appropriate acknowledgements, opinion of counsel, or other documents
      by the transferee.

     

    12.4. Non-Exclusivity
      of the Plan.
      Nothing
      contained in the Plan is intended to modify or rescind any previously approved
      compensation plans or programs of the Company or create any limitations on
      the
      power or authority of the Board to adopt such additional or other compensation
      arrangements as the Board may deem necessary or desirable.

     

    
      	13.	
              Securities
                Law and Other Restrictions.

            


    

     

    Notwithstanding
      any other provision of the Plan or any agreements entered into pursuant to
      the
      Plan, the Company will not be required to issue any shares of Common Stock
      under
      this Plan, and a Participant may not sell, assign, transfer or otherwise dispose
      of shares of Common Stock issued pursuant to Incentive Awards granted under
      the
      Plan, unless (a) there is in effect with respect to such shares a registration
      statement under the Securities Act and any applicable securities laws of a
      state
      or foreign jurisdiction or an exemption from such registration under the
      Securities Act and applicable state or foreign securities laws, and (b) there
      has been obtained any other consent, approval or permit from any other U.S.
      or
      foreign regulatory body which the Committee, in its sole discretion, deems
      necessary or advisable. The Company may condition such issuance, sale or
      transfer upon the receipt of any representations or agreements from the parties
      involved, and the placement of any legends on certificates representing shares
      of Common Stock, as may be deemed necessary or advisable by the Company in
      order
      to comply with such securities law or other restrictions.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    
      	
              14.

            	
              Plan
                Amendment, Modification and Termination.

            


    

     

    The
      Board
      may suspend or terminate the Plan or any portion thereof at any time, and may
      amend the Plan from time to time in such respects as the Board may deem
      advisable in order that Incentive Awards under the Plan will conform to any
      change in applicable laws or regulations or in any other respect the Board
      may
      deem to be in the best interests of the Company; provided, however, that no
      such
      amendments to the Plan will be effective without approval of the Company’s
      stockholders if: (i) stockholder approval of the amendment is then required
      pursuant to Section 422 of the Code or the rules of any stock exchange or Nasdaq
      or similar regulatory body; or (ii) such amendment seeks to modify Section
      3.2(d) hereof.  No
      termination, suspension or amendment of the Plan may adversely affect any
      outstanding Incentive Award without the consent of the affected Participant;
      provided, however, that this sentence will not impair the right of the Committee
      to take whatever action it deems appropriate under Sections 3.2(c), 4.3 and
      11
      of the Plan.

     

    
      	15.	
              Effective
                Date and Duration of the Plan.

            


    

     

    The
      Plan
      is effective as of the Effective Date. The Plan will terminate at midnight
      on
      March 1, 2016, and may be terminated prior to such time by Board action. No
      Incentive Award will be granted after termination of the Plan. Incentive Awards
      outstanding upon termination of the Plan may continue to be exercised, or become
      free of restrictions, according to their terms.

     

    
      	16.	
              Miscellaneous.

            


    

     

    16.1. Governing
      Law.
      Except
      to the extent expressly provided herein or in connection with other matters
      of
      corporate governance and authority (all of which shall be governed by the laws
      of the Company’s jurisdiction of incorporation), the validity, construction,
      interpretation, administration and effect of the Plan and any rules, regulations
      and actions relating to the Plan will be governed by and construed exclusively
      in accordance with the laws of the State of Delaware notwithstanding the
      conflicts of laws principles of any jurisdictions.

     

    16.2. Successors
      and Assigns.
      The
      Plan will be binding upon and inure to the benefit of the successors and
      permitted assigns of the Company and the Participants.

     

     

     

    13