ex10-1.htm

Exhibit
    10.1
    AEGIS
      PRODUCTS, INC.

    2006
      INCENTIVE PLAN

    


    1.           Purpose
      of the Plan

    


    This
      2006 Incentive Plan is intended to
      promote the interests of Aegis Products, Inc., a Texas corporation (the
“Company”), by providing the employees of the Company, who will be largely
      responsible for the management, growth and protection of the business of the
      Company, with a proprietary interest in the Company.

    


    2.           Definitions

    


    As
      used in the Plan, the following
      definitions apply to the terms indicated below:

    


    (a)           “Board
      of Directors” shall mean the Board of Directors of the Company.

    


    (b)           “Cause,”
      when used in connection with the termination of a Participant’s employment with
      the Company, shall mean the termination of the Participant’s employment by the
      Company by reason of (i) the conviction of the Participant by a court of
      competent jurisdiction as to which no further appeal can be taken of a crime
      involving moral turpitude; (ii) the proven commission by the Participant of
      an
      act of fraud upon the Company; (iii) the willful and proven misappropriation
      of
      any funds or property of the Company by the Participant; (iv) the willful,
      continued and unreasonable failure by the Participant to perform duties assigned
      to the Participant and agreed to by the Participant; (v) the knowing engagement
      by the Participant in any direct, material conflict of interest with the Company
      without compliance with the Company’s conflict of interest policy, if any, then
      in effect; (vi) the knowing engagement by the Participant, without the written
      approval of the Board of Directors of the Company, in any activity which
      competes with the business of the Company or which would result in a material
      injury to the Company; or (vii) the knowing engagement in any activity which
      would constitute a material violation of the provisions of the Company’s Code of
      Ethics or Policies and Procedures Manual, if any, then in effect.

    


    (c)           “Cash
      Bonus” shall mean an award of a bonus payable in cash pursuant to Section 10
      hereof.

    


    (d)           “Change
      in Control” shall mean:

    


    
      	
               

            	
              (1)

            	
              a
                “change in control” of the Company, as that term is contemplated in the
                federal securities laws; or

            


    

     

    (2)                 the
      occurrence of any of the following events:

    


    
      	
               

            	
              (A)

            	
              any
                Person becomes, after the effective date of this Plan, the “beneficial
                owner” (as defined in Rule 13d-3 promulgated under the Exchange Act),
                directly or indirectly, of securities of the Company representing
                35% or
                more of the combined voting power of the Company’s then outstanding
                securities; provided, that the acquisition of additional voting
                securities, after the effective date of this Plan, by any Person
                who is,
                as of the effective date of this Plan, the beneficial owner, directly
                or
                indirectly, of 35% or more of the combined voting power of the Company’s
                then outstanding securities, shall not constitute a “Change in Control” of
                the Company for purposes of this Section
                2(d).

            


    

    


    
      	
               

            	
              (B)

            	
              a
                majority of individuals who are nominated by the Board of Directors
                for
                election to the Board of Directors on any date, fail to be elected
                to the
                Board of Directors as a direct or indirect result of any proxy fight
                or
                contested election for positions on the Board of Directors,
                or

            


    

    


    
      	
               

            	
              (C)

            	
              the
                Board of Directors determines in its sole and absolute discretion
                that
                there has been a change in control of the
                Company.

            


    


    
      
        
        

      

      
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    (e)           “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to
      time.

    


    (f)           “Committee”
      shall mean the Compensation Committee of the Board of Directors or such other
      committee as the Board of Directors shall appoint from time to time to
      administer the Plan.

    


    (g)           “Common
      Stock” shall mean the Company’s Common Stock, par value $0.001 per
      share.

    


    (h)           “Company”
      shall mean Aegis Products, Inc., a Texas corporation, and each of its
      Subsidiaries, and its successors.

    


    (i)           “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended from time to
      time.

    


    (j)           the
      “Fair Market Value” of a share of Common Stock on any date shall be (i) the
      closing sales price on the immediately preceding business day of a share of
      Common Stock as reported on the principal securities exchange on which shares
      of
      Common Stock are then listed or admitted to trading or (ii) if not so reported,
      the average of the closing bid and asked prices for a share of Common Stock
      on
      the immediately preceding business day as quoted on the National Association
      of
      Securities Dealers Automated Quotation System (“Nasdaq”) or (iii) if not quoted
      on Nasdaq, the average of the closing bid and asked prices for a share of Common
      Stock as quoted by the National Quotation Bureau’s “Pink Sheets” or the National
      Association of Securities Dealers’ OTC Bulletin Board System. If the price of a
      share of Common Stock shall not be so reported, the Committee in its absolute
      discretion shall determine the Fair Market Value of a share of Common
      Stock.

    


    (k)           “Incentive
      Award” shall mean an Option, a share of Restricted Stock, a share of Phantom
      Stock, a Stock Bonus or Cash Bonus granted pursuant to the terms of the
      Plan.

    


    (l)           “Incentive
      Stock Option” shall mean an Option which is an “incentive stock option” within
      the meaning of Section 422 of the Code and which is identified as an Incentive
      Stock Option in the agreement by which it is evidenced.

    


    (m)           “Issue
      Date” shall mean the date established by the Committee on which the Company
      pursuant to the terms of Section 7(d) shall issue certificates representing
      shares of Restricted Stock hereof.

    


    (n)           “Non-Qualified
      Stock Option” shall mean an Option which is not an Incentive Stock Option and
      which is identified as a Non-Qualified Stock Option in the agreement by which
      it
      is evidenced.

    


    (o)           “Option”
      shall mean an option to purchase shares of Common Stock of the Company granted
      pursuant to Section 6 hereof. Each Option shall be identified as either an
      Incentive Stock Option or a Non-Qualified Stock Option in the agreement by
      which
      it is evidenced.

    


    (p)           “Participant”
      shall mean a full-time employee of the Company who is eligible to participate
      in
      the Plan and to whom an Incentive Award is granted pursuant to the Plan, and,
      upon his death, his successors, heirs, executors and administrators, as the
      case
      may be, to the extent permitted hereby.

    


    (q)           “Person”
      shall mean a “person,” as such term is used in Sections 13(d) and 14(d) of the
      Exchange Act, and the rules and regulations in effect from time to time
      thereunder.

    


    (r)           a
      share of “Phantom Stock” shall represent the right to receive in cash the Fair
      Market Value of a share of Common Stock of the Company, which right is granted
      pursuant to Section 8 hereof and subject to the terms and conditions contained
      therein.

    


    (s)           “Plan”
      shall mean the Aegis Products, Inc. 2006 Incentive Plan, as it may be amended
      from time to time.

    


    (t)           “Qualified
      Domestic Relations Order” shall mean a qualified domestic relations order as
      defined in the Code, in Title I of the Employee Retirement Income Security
      Act,
      or in the rules and regulations as may be in effect from time to time
      thereunder.


    
      
        
        

      

      
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    (u)           a
      share of “Restricted Stock” shall mean a share of Common Stock which is granted
      pursuant to the terms of Section 7 hereof and which is subject to the
      restrictions set forth in Section 7 (c) hereof for so long as such restrictions
      continue to apply to such share.

    


    (v)           “Securities
      Act” shall mean the Securities Act of 1933, as amended from time to
      time.

    


    (w)           “Stock
      Bonus” shall mean a grant of a bonus payable in shares of Common Stock pursuant
      to Section 9 hereof.

    


    (x)           “Subsidiary”
      or “Subsidiaries” shall mean any and all corporations in which at the pertinent
      time the Company owns, directly or indirectly, stock vested with 50% or more
      of
      the total combined voting power of all classes of stock of such corporations
      within the meaning of Section 424(f) of the Code.

    


    (y)           “Vesting
      Date” shall mean the date established by the Committee on which a share of
      Restricted Stock or Phantom Stock may vest.

    


    3.           Stock
      Subject to the Plan

    


    Under
      the Plan, the Committee may grant
      to Participants (i) Options, (ii) shares of Restricted Stock, (iii) shares
      of
      Phantom Stock, (iv) Stock Bonuses and (v) Cash Bonuses.

    


    The
      Committee may grant Options, shares
      of Restricted Stock, shares of Phantom Stock and Stock Bonuses under the Plan
      with respect to a number of shares of Common Stock that in the aggregate at
      any
      time does not exceed two million (2,000,000) shares of Common Stock. The grant
      of a Cash Bonus shall not reduce the number of shares of Common Stock with
      respect to which Options, shares of Restricted Stock, shares of Phantom Stock
      or
      Stock Bonuses may be granted pursuant to the Plan.

    


    If
      any outstanding Option expires,
      terminates or is canceled for any reason, the shares of Common Stock subject
      to
      the unexercised portion of such Option shall again be available for grant under
      the Plan. If any shares of Restricted Stock or Phantom Stock, or any shares
      of
      Common Stock granted in a Stock Bonus are forfeited or canceled for any reason,
      such shares shall again be available for grant under the Plan.

    


    Shares
      of Common Stock issued under the
      Plan may be either newly issued or treasury shares, at the discretion of the
      Committee.

    


    4.           Administration
      of the Plan

    


    The
      Plan shall be administered by a
      Committee of the Board of Directors consisting of two or more persons, each
      of
      whom shall be a “disinterested person” within the meaning of Rule 16b-3(c)(2)
      promulgated under Section 16 of the Exchange Act. The Committee shall from
      time
      to time designate the employees of the Company who shall be granted Incentive
      Awards and the amount and type of such Incentive Awards.  In addition,
      each member of the Committee shall be an independent director under the NASDAQ
      Stock Market LLC Marketplace Rule 4200(a)(15).

    


    The
      Committee shall have full authority
      to administer the Plan, including authority to interpret and construe any
      provision of the Plan and the terms of any Incentive Award issued under it
      and
      to adopt such rules and regulations for administering the Plan as it may deem
      necessary. Decisions of the Committee shall be final and binding on all
      parties.

    


    The
      Committee may, in its absolute
      discretion (i) accelerate the date on which any Option granted under the Plan
      becomes exercisable, (ii) extend the date on which any Option granted under
      the
      Plan ceases to be exercisable, (iii) accelerate the Vesting Date or Issue Date,
      or waive any condition imposed pursuant to Section 7(b) hereof, with respect
      to
      any share of Restricted Stock granted under the Plan and (iv) accelerate the
      Vesting Date or waive any condition imposed pursuant to Section 8 hereof, with
      respect to any share of Phantom Stock granted under the Plan.


    
      
        
        

      

      
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    In
      addition, the Committee may, in its
      absolute discretion, grant Incentive Awards to Participants on the condition
      that such Participants surrender to the Committee for cancellation such other
      Incentive Awards (including, without limitation, Incentive Awards with higher
      exercise prices) as the Committee specifies. Notwithstanding Section 3 hereof,
      Incentive Awards granted on the condition of surrender of outstanding Incentive
      Awards shall not count against the limits set forth in such Section 3 until
      Such
      time as such Incentive Awards are surrendered.

    


    The
      Committee in its absolute
      discretion shall determine whether an authorized leave of absence, or absence
      in
      military or government service, shall constitute termination of
      employment.

    


    No
      member of the Committee shall be
      liable for any action, omission, or determination relating to the Plan, and
      the
      Company shall indemnify and hold harmless each member of the Committee and
      each
      other director or employee of the Company to whom any duty or power relating
      to
      the administration or interpretation of the Plan has been delegated from and
      against any cost or expense (including attorneys’ fees) or liability (including
      any sum paid in settlement of a claim with the approval of the Committee)
      arising out of any action, omission or determination relating to the Plan,
      unless, in either case, such action, omission or determination was taken or
      made
      by such member, director or employee in bad faith and without reasonable belief
      that it was in the best interests of the Company.

    


    5.           Eligibility

    


    (a)           Incentive
      Stock Options may only be granted to persons who are regular full-time employees
      of the Company. In determining the employees to whom Incentive Stock Options
      shall be granted and the number of shares to be covered by each Incentive Stock
      Option, the Committee shall take into account the nature of employees' duties,
      their present and potential contributions to the success of the Company and
      such
      other factors as it shall deem relevant in connection with accomplishing the
      purposes of the Plan.  An employee who had been granted an option or
      options under the Plan may be granted an additional option or options, subject
      to such limitations as may be imposed by the Code on such options.

    


    (b)              Non-Qualified
      Stock Options, shares of Restricted Stock, shares of Phantom Stock, Stock
      Bonuses and Cash Bonus granted may be granted to any person, including, but
      not
      limited to, directors of the Company who do not qualify as “outside directors”
under Section 162(m) of the Internal Revenue Code of 1986, independent agents,
      consultants, attorneys and advisors, who the Committee believes has contributed,
      or will contribute, to the success of the Company.

    


    6.           Options

    


    The
      Committee may grant Options
      pursuant to the Plan, which Options shall be evidenced by agreements in such
      form as the Committee shall from time to time approve. Options shall comply
      with
      and be subject to the following terms and conditions:

    


    (a)           Identification
      of Options

    


    All
      Options granted under the Plan
      shall be clearly identified in the agreement evidencing such Options as either
      Incentive Stock Options or as Non-Qualified Stock Options.

    


    (b)           Exercise
      Price

    


    The
      exercise price of any Non-Qualified
      Stock Option granted under the Plan shall be such price as the Committee shall
      determine on the date on which such Non-Qualified Stock Option is granted;
      provided, that such price may not be less than the minimum price required by
      law. Except as provided in Section 6(d) hereof, the exercise price of any
      Incentive Stock Option granted under the Plan shall be not less than 100% of
      the
      Fair Market Value of a share of Common Stock on the date on which such Incentive
      Stock Option is granted.

    


    (c)           Term
      and Exercise of Options


    
      
        
        

      

      
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    (1)           Each
      Option shall be exercisable on such date or dates, during such period and for
      such number of shares of Common Stock as shall be determined by the Committee
      on
      the day on which such Option is granted and set forth in the agreement
      evidencing the Option; provided, however, that no Option shall be exercisable
      after the expiration of ten years from the date such Option was granted; and,
      provided, further, that each Option shall be subject to earlier termination,
      expiration or cancellation as provided in the Plan.

    


    (2)           Each
      Option shall be exercisable in whole or in part with respect to whole shares
      of
      Common Stock. The partial exercise of an Option shall not cause the expiration,
      termination or cancellation of the remaining portion thereof. Upon the partial
      exercise of an Option, the agreement evidencing such Option shall be returned
      to
      the Participant exercising such Option together with the delivery of the
      certificates described in Section 6(c)(5) hereof.

    


    (3)           An
      Option shall be exercised by delivering notice to the Company’s principal
      office, to the attention of its Secretary, no fewer than five business days
      in
      advance of the effective date of the proposed exercise. Such notice shall be
      accompanied by the agreement evidencing the Option, shall specify the number
      of
      shares of Common Stock with respect to which the Option is being exercised
      and
      the effective date of the proposed exercise, and shall be signed by the
      Participant. The Participant may withdraw such notice at any time prior to
      the
      close of business on the business day immediately preceding the effective date
      of the proposed exercise, in which case such agreement shall be returned to
      the
      Participant. Payment for shares of Common Stock purchased upon the exercise
      of
      an Option shall be made on the effective date of such exercise either (i) in
      cash, by certified check, bank cashier’s check or wire transfer or (ii) subject
      to the approval of the Committee, in shares of Common Stock owned by the
      Participant and valued at their Fair Market Value on the effective date of
      such
      exercise, or (iii) partly in shares of Common Stock with the balance in cash,
      by
      certified check, bank cashier’s check or wire transfer. Any payment in shares of
      Common Stock shall be effected by the delivery of such shares to the Secretary
      of the Company, duly endorsed in blank or accompanied by stock powers duly
      executed in blank, together with any other documents and evidences as the
      Secretary of the Company shall require from time to time.

    


    (4)           Any
      Option granted under the Plan may be exercised by a broker-dealer acting on
      behalf of a Participant if (i) the broker-dealer has received from the
      Participant or the Company a duly endorsed agreement evidencing such Option
      and
      instructions signed by the Participant requesting the Company to deliver the
      shares of Common Stock subject to such Option to the broker-dealer on behalf
      of
      the Participant and specifying the account into which such shares should be
      deposited, (ii) adequate provision has been made with respect to the payment
      of
      any withholding taxes due upon such exercise and (iii) the broker-dealer and
      the
      Participant have otherwise complied with Section 220.3(e)(4) of Regulation
      T, 12
      CFR Part 220.

    


    (5)           Certificates
      for shares of Common Stock purchased upon the exercise of an Option shall be
      issued in the name of the Participant and delivered to the Participant as soon
      as practicable following the effective date on which the Option is exercised;
      provided, however, that such delivery shall be effected for all purposes when
      a
      stock transfer agent of the Company shall have deposited such certificates
      in
      the United States mail, addressed to the Participant.

    


    (6)           During
      the lifetime of a Participant each Option granted to him shall be exercisable
      only by him. No Option shall be assignable or transferable otherwise than by
      will or by the laws of descent and distribution.

    


    (d)           Limitations
      on Grant of Incentive Stock Options

    


    (1)           The
      aggregate Fair Market Value of shares of Common Stock with respect to which
      “incentive stock options” (within the meaning of Section 422, without regard to
      Section 422(d) of the Code) are exercisable for the first time by a Participant
      during any calendar year under the Plan (and any other stock option plan of
      the
      Company, or any subsidiary of the Company shall not exceed $100,000. Such Fair
      Market Value shall be determined as of the date on which each such Incentive
      Stock Option is granted. If such aggregate Fair Market Value of shares of Common
      Stock underlying such Incentive Stock Options exceeds $100,000, then Incentive
      Stock Options granted hereunder to such Participant shall, to the extent and
      in
      the order required by Regulations promulgated under the Code (or any other
      authority having the force of Regulations),
      automatically be deemed to be Non-Qualified Stock Options, but all other terms
      and provisions of such Incentive Stock Options shall remain unchanged. In the
      absence of such Regulations (and authority), or if such Regulations (or
      authority) require or permit a designation of the options which shall cease
      to
      constitute Incentive Stock Options, Incentive Stock Options shall, to the extent
      of such excess and in the order in which they were granted, automatically be
      deemed to be Non-Qualified Stock Options, but all other terms and provisions
      of
      such Incentive Stock Options shall remain unchanged.


    
      
        
        

      

      
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    (2)           No
      Incentive Stock Option may be granted to an individual if, at the time of the
      proposed grant, such individual owns, directly or indirectly (based on the
      attribution rules in Section 424(d) of the Code) stock possessing more than
      ten
      percent of the total combined voting power of all classes of stock of the
      Company or any of its subsidiaries, unless (i) the exercise price of such
      Incentive Stock Option is at least 110% of the Fair Market Value of a share
      of
      Common Stock at the time such Incentive Stock Option is granted and (ii) such
      Incentive Stock Option is not exercisable after the expiration of five years
      from the date such Incentive Stock Option is granted.

    


    (e)           Effect
      of Termination of Employment

    


    (1)           If
      the employment of a Participant with the Company shall terminate for any reason
      other than Cause, “permanent and total disability (within the meaning of Section
      22(e)(3) of the Code) or the death of the Participant (i) Options granted to
      such Participant, to the extent that they were exercisable at the time of such
      termination, shall remain exercisable until the expiration of one month after
      such termination, on which date they shall expire, and (ii) Options granted
      to
      such Participant, to the extent that they were not exercisable at the time
      of
      such termination, shall expire at the close of business on the date of such
      termination; provided, however, that no Option shall be exercisable after the
      expiration of its term.

    


    (2)           If
      the employment of a Participant with the Company shall terminate as a result
      of
      the “permanent and total disability (within the meaning of Section 22(e)(3) of
      the Code) of the Participant, the voluntary retirement of the Participant in
      accordance with the Company’s retirement policy as then in effect or the death
      of the Participant (i) Options granted to such Participant, to the extent that
      they were exercisable at the time of such termination, shall remain exercisable
      until the expiration of one year after such termination, on which date they
      shall expire, and (ii) Options granted to such Participant, to the extent that
      they were not exercisable at the time of such termination, shall expire at
      the
      close of business on the date of such termination; provided, however, that
      no
      Option shall be exercisable after the expiration of its term.

    


    (3)           In
      the event of the termination of a Participant’s employment for Cause, all
      outstanding Options granted to such Participant shall expire at the commencement
      of business on the date of such termination.

    


    (f)
      Acceleration of Exercise Date Upon
      Change in Control

    


    Upon
      the occurrence of a Change in
      Control, each Option granted under the Plan and outstanding at such time shall
      become fully and immediately exercisable and shall remain exercisable until
      its
      expiration, termination or cancellation pursuant to the terms of the
      Plan.

    


    7.           Restricted
      Stock

    


    The
      Committee may grant shares of
      Restricted Stock pursuant to the Plan. Each grant of shares of Restricted Stock
      shall be evidenced by an agreement in such form as the Committee shall from
      time
      to time approve. Each grant of shares of Restricted Stock shall comply with
      and
      be subject to the following terms and conditions:

    


    (a)           Issue
      Date and Vesting Date

    


    At
      the time of the grant of shares of
      Restricted Stock, the Committee shall establish an Issue Date or Issue Dates
      and
      a Vesting Date or Vesting Dates with respect to such shares. The Committee
      may
      divide such shares into classes and assign a different Issue Date and/or Vesting
      Date for each class. Except as provided in Sections 7(c) and 7(f) hereof, upon
      the occurrence of the Issue Date with respect to a share of Restricted Stock,
      a
      share of Restricted Stock shall be issued in accordance with the provisions
      of
      Section 7(d) hereof. Provided that all conditions to the vesting
      of a share of Restricted Stock imposed pursuant to Section 7(b) hereof are
      satisfied, and except as provided in Sections 7(c) and 7(f) hereof, upon the
      occurrence of the Vesting Date with respect to a share of Restricted Stock,
      such
      share shall vest and the restrictions of Section 7(c) hereof shall cease to
      apply to such share.


    
      
        
        

      

      
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    (b)           Conditions
      to Vesting

    


    At
      the time of the grant of shares of
      Restricted Stock, the Committee may impose such restrictions or conditions,
      not
      inconsistent with the provisions hereof, to the vesting of such shares as it
      in
      its absolute discretion deems appropriate. By way of example and not by way
      of
      limitation, the Committee may require, as a condition to the vesting of any
      class or classes of shares of Restricted Stock, that the Participant or the
      Company achieve certain performance criteria, such criteria to be specified
      by
      the Committee at the time of the grant of such shares.

    


    (c)           Restrictions
      on Transfer Prior to Vesting

    


    Prior
      to the vesting of a share of
      Restricted Stock, no transfer of a Participant’s rights with respect to such
      share, whether voluntary or involuntary, by operation of law or otherwise,
      shall
      vest the transferee with any interest or right in or with respect to such share,
      but immediately upon any attempt to transfer such fights, such share, and all
      of
      the rights related thereto, shall be forfeited by the Participant and the
      transfer shall be of no force or effect.

    


    (d)           Issuance
      of Certificates

    


    (1)           Except
      as provided in Sections 7(c) or 7(f) hereof, reasonably promptly after the
      Issue
      Date with respect to shares of Restricted Stock, the Company shall cause to
      be
      issued a stock certificate, registered in the name of the Participant to whom
      such shares were granted, evidencing such shares: provided, that the Company
      shall not cause to be issued such a stock certificates unless it has received
      a
      stock power duly endorsed in blank with respect to such shares. Each such stock
      certificate shall bear the following legend:

    


    The
      transferability of this certificate and the shares of stock represented hereby
      are subject to the restrictions, terms and conditions (including forfeiture
      and
      restrictions against transfer) contained in the Incentive Plan and an Agreement
      entered into between the registered owner of such shares and the
      Company.  A copy of the Plan and Agreement is on file in the office of
      the Secretary of Aegis Products, Inc., Kristi Bomar .

    


    Such
      legend shall not be removed from the certificate evidencing such shares until
      such shares vest pursuant to the terms hereof.

    


    (2)           Each
      certificate issued pursuant to Paragraph 7 (d)(1) hereof, together with the
      stock powers relating to the shares of Restricted Stock evidenced by such
      certificate, shall be held by the Company. The Company shall issue to the
      Participant a receipt evidencing the certificates held by it which are
      registered in the name of the Participant.

    


    (e)           Consequences
      Upon Vesting

    


    Upon
      the vesting of a share of
      Restricted Stock pursuant to the terms hereof, the restrictions of Section
      7(c)
      hereof shall cease to apply to such share. Reasonably promptly after a share
      of
      Restricted Stock vests pursuant to the terms hereof, the Company shall cause
      to
      be issued and delivered to the Participant to whom such shares were granted,
      a
      certificate evidencing such share, free of the legend set forth in Paragraph
      7
      (d)(1) hereof, together with any other property of the Participant held by
      Company pursuant to Section 7(d) hereof, provided, however, that such delivery
      shall be effected for all purposes when the Company shall have deposited such
      certificate and other property in the United States mail, addressed to the
      Participant.

    


    (f)           Effect
      of Termination of Employment

    


    (1)           If
      the employment of a Participant with the Company shall terminate for any reason
      other than Cause prior to the vesting of shares of Restricted Stock granted
      to
      such Participant, a portion of such shares, to the extent not forfeited or
      canceled on or prior to such termination pursuant to any provision hereof,
      shall
vest
      on
      the date of such termination. The portion referred to in the preceding sentence
      shall be determined by the Committee at the time of the grant of such shares
      of
      Restricted Stock and may be based on the achievement of any conditions imposed
      by the Committee with respect to such shares pursuant to Section 7(b). Such
      portion may equal zero.


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    


    


    (2)           In
      the event of the termination of a Participant’s employment for Cause, all shares
      of Restricted Stock granted to such Participant that have not vested as of
      the
      date of such termination shall immediately be forfeited.

    


    (g)           Effect
      of Change in Control

    


    Upon
      the occurrence of a Change in
      Control, all shares of Restricted Stock that have not theretofore vested
      (including those with respect to which the Issue Date has not yet occurred)
      shall immediately vest.

    


    8.           Phantom
      Stock

    


    The
      Committee may grant shares of
      Phantom Stock pursuant to the Plan. Each grant of shares of Phantom Stock shall
      be evidenced by an agreement in such form as the Committee shall from time
      to
      time approve. Each grant of shares of Phantom Stock shall comply with and be
      subject to the following terms and conditions:

    


    (a)           Vesting
      Date

    


    At
      the time of the grant of shares of
      Phantom Stock, the Committee shall establish a Vesting Date or Vesting Dates
      with respect to such shares. The Committee may divide such shares into classes
      and assign a different Vesting Date for each class. Provided that all conditions
      to the vesting of a share of Phantom Stock imposed pursuant to Section 8(c)
      hereof are satisfied, and except as provided in Section 8(d) hereof, upon the
      occurrence of the Vesting Date with respect to a share of Phantom Stock, such
      share shall vest.

    


    (b)           Benefit
      Upon Vesting

    


    Upon
      the vesting of a share of Phantom
      Stock, a Participant shall be entitled to receive in cash, within 90 days of
      the
      date on which such share vests, an amount in cash in a lump sum equal to the
      sum
      of (i) the Fair Market Value of a share of Common Stock of the Company on the
      date on which such share of Phantom Stock vests and (ii) the aggregate amount
      of
      cash dividends paid with respect to a share of Common Stock of the Company
      during the period commencing on the date on which the share of Phantom Stock
      was
      granted and terminating on the date on which such share vests.

    


    (c)           Conditions
      to Vesting

    


    At
      the time of the grant of shares of
      Phantom Stock, the Committee may impose such restrictions or conditions, not
      inconsistent with the provisions hereof, to the vesting of such shares as it,
      in
      its absolute discretion deems appropriate. By way of example and not by way
      of
      limitation, the Committee may require, as a condition to the vesting of any
      class or classes of shares of Phantom Stock, that the Participant or the Company
      achieve certain performance criteria, such criteria to be specified by the
      Committee at the time of the grant of such shares.

    


    (d)           Effect
      of Termination of Employment

    


    (1)           If
      the employment of a Participant with the Company shall terminate for any reason
      other than Cause prior to the vesting of shares of Phantom Stock granted to
      such
      Participant a portion of such shares, to the extent not forfeited or canceled
      on
      or prior to such termination pursuant to any provision hereof, shall vest on
      the
      date of such termination. The portion referred to in the preceding sentence
      shall be determined by the Committee at the time of the grant of such shares
      of
      Phantom Stock and may be based on the achievement of any conditions imposed
      by
      the Committee with respect to such shares pursuant to Section 8(c). Such portion
      may equal zero.


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    


    (2)           In
      the event of the termination of a Participant’s employment for Cause, all shares
      of Phantom Stock granted to such Participant that have not vested as of the
      date
      of such termination shall immediately be forfeited.

    


    (e)           Effect
      of Change in Control

    


    Upon
      the occurrence of a Change in
      Control, all shares of Phantom Stock that have not theretofore vested shall
      immediately vest.

    


    9.           Stock
      Bonuses

    


    The
      Committee may, in its absolute
      discretion, grant Stock Bonuses in such amounts as it shall determine from
      time
      to time. A Stock Bonus shall be paid at such time and subject to such conditions
      as the Committee shall determine at the time of the grant of such Stock Bonus.
      Certificates for shares of Common Stock granted as a Stock Bonus shall be issued
      in the name of the Participant to whom such grant was made and delivered to
      such
      Participant as soon as practicable after the date on which such Stock Bonus
      is
      required to be paid.

    


    10.           Cash
      Bonuses

    


    The
      Committee may, in its absolute
      discretion, grant in connection with any grant of Restricted Stock or Stock
      Bonus or at any time thereafter, a cash bonus, payable promptly after the date
      on which the Participant is required to recognize income for federal income
      tax
      purposes in connection with such Restricted Stock or Stock Bonus, in such
      amounts as the Committee shall determine from time to time; provided, however,
      that in no event shall the amount of a Cash Bonus exceed the Fair Market Value
      of the related shares of Restricted Stock or Stock Bonus on such date. A Cash
      Bonus shall be subject to such conditions as the Committee shall determine
      at
      the time of the grant of such Cash Bonus.

    


    11.           Adjustment
      Upon Changes in Common Stock

    


    (a)           Outstanding
      Restricted Stock and Phantom Stock

    


    Unless
      the Committee in its absolute
      discretion otherwise determines, if a Participant receives any securities or
      other property (including dividends paid in cash) with respect to a share of
      Restricted Stock, the Issue Date with respect to which occurs prior to such
      event, but which has not vested as of the date of such event, as a result of
      any
      dividend, stock split recapitalization, merger, consolidation, combination,
      exchange of shares or otherwise, such securities or other property will not
      vest
      until such share of Restricted Stock vests, and shall be held by the Company
      pursuant to Paragraph 7 (d) (2) hereof.

    


    The
      Committee may, in its absolute
      discretion, adjust any grant of shares of Restricted Stock, the Issue Date
      with
      respect to which has not occurred as of the date of the occurrence of any of
      the
      following events, or any grant of shares of Phantom Stock, to reflect any
      dividend, stock split, recapitalization, merger, consolidation, combination,
      exchange of shares or similar corporate change as the Committee may deem
      appropriate to prevent the enlargement or dilution of rights of Participants
      under the grant.

    


    (b)           Outstanding
      Options, Increase or Decrease in Issued Shares Without
      Consideration

    


    Subject
      to any required action by the
      shareholders of the Company, in the event of any increase or decrease in the
      number of issued shares of Common Stock resulting from a subdivision or
      consolidation of shares of Common Stock or the payment of a stock dividend
      (but
      only on the shares of Common Stock), or any other increase or decrease in the
      number of such shares effected without receipt of consideration by the Company,
      the Committee shall proportionally adjust the number of shares and the exercise
      price per share of Common Stock subject to each outstanding Option.

    


    (c)           Outstanding
      Options, Certain Mergers


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    Subject
      to any required action by the
      shareholders of the Company, if the Company shall be the surviving corporation
      in any merger or consolidation (except a merger of consolidation as a result
      of
      which the holders of shares of Common Stock receive securities of another
      corporation), each Option outstanding on the date of such merger or
      consolidation shall entitle the Participant to acquire upon exercise the
      securities which a holder of the number of shares of Common Stock subject to
      such Option would have received in such merger or consolidation.

    


    (d)           Outstanding
      Options, Certain Other Transactions

    


    In
      the event of a dissolution or
      liquidation of the Company, a sale of all or substantially all of the Company’s
      assets, a merger or consolidation involving the Company in which the Company
      is
      not the surviving corporation or a merger or consolidation involving the Company
      in which the Company is the surviving corporation but the holders of shares
      of
      Common Stock receive securities of another corporation and/or other property,
      including cash, the Committee shall, in its absolute discretion, have the power
      to:

    


    (1)              cancel,
      effective immediately prior to the occurrence of such event, each Option
      outstanding immediately prior to such event (whether or not then exercisable),
      and, in full consideration of such cancellation, pay to the Participant to
      whom
      such Option was granted an amount in cash, for each share of Common Stock
      subject to such Option equal to the excess of (A) the value, as determined
      by
      the Committee in its absolute discretion, of the property (including cash)
      received by the holder of a. share of Common Stock as a result of such event
      over (B) the exercise price of such Option; or

    


    (2)              provide
      for the exchange of each Option outstanding immediately prior to such event
      (whether or not then exercisable) for an option on some or all of the property
      for which such Option is exchanged and, incident thereto, make an equitable
      adjustment as determined by the Committee in its absolute discretion in the
      exercise price of the option, or the number of shares or amount of property
      subject to the option or, if appropriate, provide for a cash payment to the
      Participant to whom such Option was granted in partial consideration for the
      exchange of the Option.

    


    (e)           Outstanding
      Options. Other Changes

    


    In
      the event of any change in the
      capitalization of the Company or corporate change other than those specifically
      referred to in Sections 11(b), (c) or (d) hereof, the Committee may, in its
      absolute discretion, make such adjustments in the number and class of shares
      subject to Options outstanding on the date on which such change occurs and
      in
      the per share exercise price of each such Option as the Committee may consider
      appropriate to prevent dilution or enlargement of rights.

    


    (f)           No
      Other Rights

    


    Except
      as expressly provided in the
      Plan, no Participant shall have any rights by reason of any subdivision or
      consolidation of shares of stock of any class, the payment of any dividend,
      any
      increase or decrease in the number of shares of stock of any class or any
      dissolution, liquidation, merger or consolidation of the Company or any other
      corporation. Except as expressly provided in the Plan, no issuance by the
      Company of shares of stock of any class, or securities convertible into shares
      of stock of any class, shall affect, and no adjustment by reason thereof shall
      be made with respect to, the number of shares of Common Stock subject to an
      Incentive Award or the exercise price of any Option.

    


    12.           Rights
      as a Shareholder

    


    No
      person shall have any rights as a
      shareholder with respect to any shares of Common Stock covered by or relating
      to
      any Incentive Award granted pursuant to this Plan until the date of the issuance
      of a stock certificate with respect to such shares. Except as otherwise
      expressly provided in Section 11 hereof, no adjustment to any Incentive Award
      shall be made for dividends or other rights for which the record date occurs
      prior to the date such stock certificate is issued.


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    13.           No
      Special Employment Rights; No Right to Incentive Award

    


    Nothing
      contained in the Plan or any
      Incentive Award shall confer upon any Participant any right with respect to
      the
      continuation of his employment by the Company or interfere in any way with
      the
      right of the Company, subject to the terms of any separate employment agreement
      to the contrary, at any time to terminate such employment or to increase or
      decrease the compensation of the Participant from the rate in existence at
      the
      time of the grant of an Incentive Award.

    


    No
      person shall have any claim or right
      to receive an Incentive Award hereunder. The Committee’s granting of an
      Incentive Award to a Participant at any time shall neither require the Committee
      to grant an Incentive Award to such Participant or any other Participant or
      other person at any time nor preclude the Committee from making subsequent
      grants to such Participant or any other Participant or other
      person.

    


    14.           Securities
      Matters

    


    (a)           The
      Company shall be under no obligation to effect the registration pursuant to
      the
      Securities Act of any shares of Common Stock to be issued hereunder or to effect
      similar compliance under any state laws. Notwithstanding anything herein to
      the
      contrary, the Company shall not be obligated to cause to be issued or delivered
      any certificates evidencing shares of Common Stock pursuant to the Plan unless
      and until the Company is advised by its counsel that the issuance and delivery
      of such certificates is in compliance with all applicable laws, regulations
      of
      governmental authority and the requirements of any securities exchange on which
      shares of Common Stock are traded. The Committee may require, as a condition
      of
      the issuance and delivery of certificates evidencing shares of Common Stock
      pursuant to the terms hereof, that the recipient of such shares make such
      covenants, agreements and representations, and that such certificates bear
      such
      legends, as the Committee, in its sole discretion, deems necessary or
      desirable.

    


    (b)           The
      exercise of any Option granted hereunder shall only be effective at such time
      as
      counsel to the Company shall have determined that the issuance and delivery
      of
      shares of Common Stock pursuant to such exercise is in compliance with all
      applicable laws, regulations of governmental authorities and the requirements
      of
      any securities exchange on which shares of Common Stock are traded. The Company
      may, in its sole discretion, defer the effectiveness of any exercise of an
      Option granted hereunder in order to allow the issuance of shares of Common
      Stock pursuant thereto to be made pursuant to registration or an exemption
      from
      registration or other methods for compliance available under federal or state
      securities laws. The Company shall inform the Participant in writing of its
      decision to defer the effectiveness of the exercise of an Option granted
      hereunder. During the period that the effectiveness of the exercise of an Option
      has been deferred, the Participant may, by written notice, withdraw such
      exercise and obtain the refund of any amount paid with respect
      thereto.

    


    15.           Withholding
      Taxes

    


    Whenever
      shares of Common Stock are to
      be issued upon the exercise of an Option, the occurrence of the Issue Date
      or
      Vesting Date with respect to a share of Restricted Stock or the payment of
      a
      Stock Bonus, the Company shall have the right to require the Participant to
      remit to the Company in cash an amount sufficient to satisfy federal, state
      and
      local withholding tax requirements, if any, attributable to such exercise,
      occurrence or payment prior to the delivery of any certificate or certificates
      for such shares. In addition, upon the grant of a Cash Bonus or the making
      of a
      payment with respect to a share of Phantom Stock, the Company shall have the
      right to withhold from any cash payment required to be made pursuant thereto
      an
      amount sufficient to satisfy the federal, state and local withholding tax
      requirements, if any, attributable to such exercise or grant.

    


    16.           Amendment
      of the Plan

    


    The
      Board of Directors may at any time
      suspend or discontinue the Plan or revise or amend it in any respect whatsoever,
      provided, however, that without approval of the shareholders no revision or
      amendment shall (i) except as provided in Section 11 hereof, increase the number
      of shares of Common Stock that may be issued under the Plan, (ii) materially
      increase the benefits accruing to individuals holding Incentive Awards granted
      pursuant to the Plan or (iii) materially modify the requirements as to
      eligibility for participation in the Plan.


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    17.           No
      Obligation to Exercise

    


    The
      grant to a Participant of an Option
      shall impose no obligation upon such Participant to exercise such
      Option.

    


    18.           Transfers
      Upon Death

    


    Upon
      the death of a Participant,
      outstanding Incentive Awards granted to such Participant may be exercised only
      by the executors or administrators of the Participant’s estate or by any person
      or persons who shall have acquired such right to exercise by will or by the
      laws
      of descent and distribution. No transfer by will or the laws of descent and
      distribution of any Incentive Award, or the right to exercise any Incentive
      Award, shall be effective to bind the Company unless the Committee shall have
      been furnished with (a) written notice thereof and with a copy of the will
      and/or such evidence as the Committee may deem necessary to establish the
      validity of the transfer and (b) an agreement by the transferee to comply with
      all the terms and conditions of the Incentive Award that are or would have
      been
      applicable to the Participant and to be bound by the acknowledgments made by
      the
      Participant in connection with the grant of the Incentive Award.

    


    19.           Expenses
      and Receipts

    


    The
      Company shall pay the expenses of
      the Plan. Any proceeds received by the Company in connection with any Incentive
      Award will be used for general corporate purposes.

    


    20.           Failure
      to Comply

    


    In
      addition to the remedies of the
      Company elsewhere provided for herein, failure by a Participant to comply with
      any of the terms and conditions of the Plan or the agreement executed by such
      Participant evidencing an Incentive Award, unless such failure is remedied
      by
      such Participant within ten days after having been notified of such failure
      by
      the Committee, shall be grounds for the cancellation and forfeiture of such
      Incentive Award, in whole or in part as the Committee, in its absolute
      discretion, may determine.

    


    21.           Effective
      Date and Term of Plan

    


    The
      Board of Directors adopted the Plan
      effective September 30, 2007, subject to stockholder approval at the next annual
      meeting. No Incentive Award may be granted under the Plan after August 31,
      2007.  Incentive Awards may be granted under the Plan at any time
      prior to the receipt of such shareholder approval; provided, however, that
      each
      such grant shall be subject to such approval. Without limitation on the
      foregoing, no Option may be exercised prior to the receipt of such approval,
      no
      share certificate shall be issued pursuant to a grant of Restricted Stock or
      Stock Bonus prior to the receipt of such approval and no Cash Bonus or payment
      with respect to a share of Phantom Stock shall be paid prior to the receipt
      of
      such approval. If the Company’s shareholders do not approve the Plan, then the
      Plan and all Incentive Awards then outstanding hereunder shall forthwith
      automatically terminate and be of no force and effect.

    


    IN
      WITNESS WHEREOF,
      this Incentive Plan of Aegis Products, Inc.. has been executed this 30th day
      of
      September 2007.

    


    


    


    
      	/s/
              Steven S. McGuire	/s/
              Kristi Bomar
	
              Steven
                S. McGuire, President

            	
              Kristi
                Bomar, Secretary

            


    

    


    



    
      
        
        

      

      
        -12-