Unassociated Document


     

    EXHIBIT
4.2

     

     

    AMENDED
AND RESTATED

    GULF
RESOURCES, INC.

    2007
EQUITY INCENTIVE PLAN

     

    1.           NAME.

     

    The name
of the Plan is the “GULF RESOURCES, INC. 2007 EQUITY INCENTIVE
PLAN.”

     

    2.           PURPOSE.

     

    The
purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose presence and potential contributions are important to the
success of the Company, its Parent and its Subsidiaries (if any), by offering
them an opportunity to participate in the Company’s future performance through
awards of Options, Restricted Stock and Stock Awards. Capitalized terms not
defined in the text are defined in Section 3.

     

    3.           DEFINITIONS.  As
used in the Plan, the following terms shall have the following
meanings:

     

    “AWARD”
means any award under the Plan, including any Option, Restricted Stock or Stock
Award.

     

    “AWARD
AGREEMENT” means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.

     

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

     

    “CAUSE”
means (i) if the Participant is a party to an employment or similar agreement
with the Company, Parent or a Subsidiary which agreement defines “Cause” (or a
similar term) therein, “Cause” shall have the same meaning as provided for in
such agreement, or (ii) for a Participant who is not a party to such an
agreement, “Cause” shall mean termination by the Company, Parent or a Subsidiary
of the employment (or other service relationship) of the Participant by reason
of the Participant’s (A) intentional failure to perform reasonably assigned
duties, (B) dishonesty or willful misconduct in the performance of the
Participant’s duties, (C) involvement in a transaction which is materially
adverse to the Company, Parent or a Subsidiary, (D) breach of fiduciary duty
involving personal profit, (E) willful violation of any law, rule, regulation or
court order (other than misdemeanor traffic violations and misdemeanors not
involving misuse or misappropriation of money or property), or (F) commission of
an act of fraud or intentional misappropriation or conversion of any asset or
opportunity of the Company, in each case as determined in good faith by the
Board, the determination of which shall be final, conclusive and binding on all
parties.

     

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

     

    “COMMITTEE”
means the Board.

     

    “COMMON
STOCK” means the Company’s common stock, par value $.001 per share.

     

    “COMPANY”
means GULF RESOURCES, INC., a Delaware corporation, or any successor
corporation.

     

    “DISABILITY”
means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.

     

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

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “EXERCISE
PRICE” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.  The per Share Exercise Price
under an Option shall equal or exceed the Fair Market Value of a Share on the
date of the grant of such Option.

     

    “FAIR
MARKET VALUE” means, as of any date, the value of a share of the Common Stock
determined as follows:

     

    (a)           if
the Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading as reported in The Wall Street Journal;

     

    (b)           if
the Common Stock is quoted on the NASDAQ National Market, its closing price on
the NASDAQ National Market on the date of determination as reported in The Wall
Street Journal;

     

    (c)           if
the Common Stock is publicly traded but is not listed or admitted to trading on
a national securities exchange, the average of the closing bid and asked prices
on the date of determination (or if there are not bid and closing prices on the
date of termination on the date next preceding the determination date for which
there are bid and closing prices), as reported in The Wall Street
Journal;

     

    (d)           the
price per Share at which Shares of the Common Stock are initially offered for
sale to the public by the Company’s underwriters in the initial public offering
of the Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act if the Award is made on the effective date of such
registration statement; or

     

    (e)           if
none of the foregoing is applicable, by the Committee in good
faith.

     

    “INSIDER”
means an officer or director of the Company or any other person whose
transactions in the Common Stock are subject to Section 16 of the Exchange
Act.

     

    “OPTION”
means an Award of an option to purchase Shares pursuant to Section
7.

     

    “PARENT”
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

     

    “PARTICIPANT”
means a person who receives an Award under the Plan.

     

    “PERFORMANCE
FACTORS” means the factors selected by the Committee, in its sole and absolute
discretion, from among the following measures to determine whether the
performance goals applicable to Awards, if any,  have been
satisfied:

     

    (a)           Net
revenue and/or net revenue growth;

     

    
      	
               
      

            	
              (b)

            	
              Earnings
      before income taxes and amortization and/or earnings before income taxes
      and amortization growth;

            


    

     

    
      	
               
      

            	
              (c)

            	
              Operating
      income and/or operating income
growth;

            


    

     

    
      	
               
      

            	
              (d)

            	
              Net
      income and/or net income growth;

            


    

     

    
      	
               
      

            	
              (e)

            	
              Earnings
      per share and/or earnings per share
growth;

            


    

     

    
      	
               
      

            	
              (f)

            	
              Total
      stockholder return and/or total stockholder return
  growth;

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (g)

            	
              Return
      on equity;

            


    

     

    
      	
               
      

            	
              (h)

            	
              Operating
      cash flow return on income;

            


    

     

    
      	
               
      

            	
              (i)

            	
              Adjusted
      operating cash flow return on
income;

            


    

     

    
      	
               
      

            	
              (j)

            	
              Economic
      value added; and

            


    

     

    
      	
               
      

            	
              (k)

            	
              Individual
      business objectives.

            


    

     

    “PERFORMANCE
PERIOD” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for
purposes of Stock Awards.

     

    “PLAN”
means this Gulf Resources, Inc. 2007 Equity Incentive Plan, as amended from time
to time.

     

    “SEC”
means the U.S. Securities and Exchange Commission.

     

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

     

    “SHARES”
means shares of Common Stock reserved for issuance under the Plan, as adjusted
pursuant to Sections 4 and 19, and any successor security.

     

    “STOCK
AWARD” means an Award of Shares pursuant to Section 9.

     

    “SUBSIDIARY”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

     

    “TERMINATION”
or “TERMINATED” means, for purposes of the Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an
employee, officer, director, consultant, independent contractor, or advisor to
the Company, Parent or a Subsidiary. An employee will not be deemed to have
ceased to provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Company, Parent or
Subsidiary, as applicable, provided that such leave is for a period of not more
than ninety (90) days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to a
formal policy adopted from time to time by the Company, Parent or a Subsidiary,
as applicable, and issued and promulgated to employees in writing. In the case
of any employee on an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of the Award while on leave from the
employ of the Company, Parent or a Subsidiary, as applicable, as it may deem
appropriate, except that in no event may an Option be exercised after the
expiration of the term set forth in the Option agreement.  The
Committee shall have sole discretion to determine whether a Participant has
ceased to provide services for the Company, Parent or a Subsidiary, and the
effective date on which the Participant ceased to provide such services (the
“Termination Date”).

     

    4.           SHARES
SUBJECT TO THE PLAN.

     

    4.1           Number
of Shares Available. Subject to Sections 4.2 and 19, the total aggregate number
of Shares initially reserved and available for grant and issuance pursuant to
the Plan shall be Five Million (5,000,000) Shares and shall include Shares that
are subject to: (a) issuance upon exercise of an Option but cease to be subject
to such Option for any reason other than exercise of such Option; (b) an Award
granted hereunder but forfeited or repurchased by the Company at the original
issue price; and (c) an Award that otherwise terminates without Shares being
issued. At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under the Plan and all other outstanding but
unvested Awards granted under the Plan.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.2           Adjustment
of Shares. In the event that the number of outstanding Shares shall change on
account of a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then (a) the number of Shares
reserved for issuance under the Plan, (b) the per Share Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards shall be proportionately adjusted by the
Board, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided, however, that
fractions of a Share shall not be issued but shall either be replaced by a cash
payment equal to the Fair Market Value of such fraction of a Share or shall
rounded up to the nearest whole Share, as determined by the
Committee.

     

    5.           ELIGIBILITY.

     

    ISOs (as
defined in Section 7 below) may be granted solely to employees (including
officers and directors who are also employees) of the Company, Parent or a
Subsidiary.  Options may be granted solely to employees, officers,
nonemployee directors, consultants, independent contractors and advisors of or
to the Company or a Subsidiary.  All other Awards may be granted to
employees, officers, nonemployee directors, consultants, independent contractors
and advisors of or to the Company, Parent or a Subsidiary.  In all
cases, for purposes of eligibility for Plan Awards, no consultant, contractor or
advisor services for the Company, Parent or a Subsidiary may be in connection
with the offer and sale of securities in a capital-raising transaction. A person
may be granted more than one Award under the Plan.

     

    6.           ADMINISTRATION.

     

    6.1           Committee
Authority. The Plan shall be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and conditions
of the Plan, and to the direction of the Board, the Committee shall have full
power to implement and carry out the Plan. Without limitation, the Committee
shall have the authority to:

     

    
      	
               
      

            	
              6.1.1

            	
              construe
      and interpret the Plan, any Award Agreement and any other agreement or
      document executed pursuant to the
Plan;

            


    

     

    
      	
               
      

            	
              6.1.2

            	
              prescribe,
      amend and rescind rules and regulations relating to the Plan or any
      Award;

            


    

     

    
      	
               
      

            	
              6.1.3

            	
              select
      persons to receive Awards from those eligible pursuant to Section
      5;

            


    

     

    
      	
               
      

            	
              6.1.4

            	
              determine
      the forms and terms of Awards;

            


    

     

    
      	
               
      

            	
              6.1.5

            	
              determine
      the number of Shares or other consideration subject to
    Awards;

            


    

     

    
      	
               
      

            	
              6.1.6

            	
              determine
      whether Awards will be granted singly, in combination with, in tandem
      with, in replacement of, or as alternatives to, other Awards under the
      Plan or any other incentive or compensation plan of the Company, Parent or
      a Subsidiary;

            


    

     

    
      	
               
      

            	
              6.1.7

            	
              grant
      waivers of Plan or Award
conditions;

            


    

     

    
      	
               
      

            	
              6.1.8

            	
              determine
      the vesting, exercisability and payment requirements and terms under
      Awards;

            


    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.1.9

            	
              correct
      any defect, supply any omission or reconcile any inconsistency in the
      Plan, any Award or any Award
Agreement;

            


    

     

    
      	
               
      

            	
              6.1.10

            	
              determine
      whether an Award has been earned;
and

            


    

     

    
      	
               
      

            	
              6.1.11

            	
              make
      all other determinations necessary or advisable for the administration of
      the Plan.

            


    

     

    6.2           Committee
Discretion. Any determination made by the Committee with respect to any Award
shall be made at the time of grant of the Award or, unless in contravention of
any express term of the Plan or Award, at any later time, and such determination
shall be final and binding on the Company and on all persons having an interest
in any Award under the Plan. The Committee may delegate to one or more officers
of the Company the authority to grant an Award under the Plan to Participants
who are not Insiders.

     

    7.           OPTIONS.

     

    The
Committee may grant Options to eligible persons (pursuant to the requirements of
Section 5) and shall determine whether such Options shall be Incentive Stock
Options within the meaning of the Code (“ISOs”) or Nonqualified Stock Options
(“NQSOs”), the number of Shares subject to the Option, the per Share Exercise
Price under the Option, the period during which the Option may be exercised, and
all other terms and conditions of the Option, subject to the
following:

     

    7.1           Form
of Option Grant. Each Option granted under the Plan shall be evidenced by an
Award Agreement which shall expressly identify the Option as an ISO or an NQSO
(a “Stock Option Agreement”), and will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which shall comply with and be subject to the
terms and conditions of the Plan.

     

    7.2           Date
of Grant. The date of grant of an Option shall be the date on which the
Committee makes the determination to grant and sets all the material terms of
such Option, unless otherwise specified by the Committee. The Stock Option
Agreement and a copy of the Plan shall be delivered to the Participant within a
reasonable time after the granting of the Option, and shall be dated as of the
Option grant date.

     

    7.3           Exercise
Period. Options may be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing
such Option; provided, however, that no
Option shall be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that
no ISO granted to a person who directly or by attribution owns more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, Parent or a Subsidiary (a “Ten Percent Stockholder”) shall be
exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines; provided, however, that in all
events a Participant shall be entitled to exercise an Option at the rate of at
least twenty percent (20%) per year over five (5) years from the date of grant,
subject to reasonable conditions such as continued employment or service; and
provided further that an
Option granted to a Participant who is an officer, director or consultant may
become fully exercisable, subject to reasonable conditions such as continued
employment or service, at any time or during any period established by the
Company.

     

    7.4           Exercise
Price. The per Share Exercise Price under an Option shall be determined by the
Committee when the Option is granted and may be not less than eighty-five
percent (85%) of the Fair Market Value of a Share on the date of grant of the
Option; provided that the per Share
Exercise Price under an Option which is intended to be an ISO may not be less
than one hundred percent (100%) of the Fair Market Value of a Share on the date
of grant of the Option; provided further that
the per Share Exercise Price under an Option which is intended to be an
ISO and which is granted to a Ten Percent Stockholder shall not be less than one
hundred ten percent (110%) of the Fair Market Value of a Share on the date of
grant of the Option. Payment for the Shares purchased pursuant to the exercise
of an Option shall be made in accordance with Section 10.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    7.5           Method
of Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (an “Exercise Agreement”) in a form
approved by the Committee (which need not be the same for each Participant),
stating the number of Shares being purchased, the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and such representations
and agreements regarding the Participant’s investment intent and access to
information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full
of the Exercise Price for the number of Shares for which the Option is being
exercised.

     

    7.6           Termination.
Notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option shall always be subject to the following:

     

    
      	
               
      

            	
              7.6.1

            	
              If
      the Participant’s service is Terminated for any reason other than the
      Participant’s death or Disability, then the Participant may exercise such
      Participant’s Options only to the extent that such Options would have been
      exercisable upon the Termination Date no later than three (3) months after
      the Termination Date (or such longer time period not exceeding five (5)
      years as may be determined by the Committee, with any exercise beyond
      three (3) months after the Termination Date resulting in the Option, if it
      was intended at grant to be an ISO, thereupon converting automatically to
      an NQSO).

            


    

     

    
      	
               
      

            	
              7.6.2

            	
              If
      the Participant’s service is Terminated because of the Participant’s death
      or Disability (or the Participant dies within three (3) months after a
      Termination other than for Cause or because of Participant’s Disability),
      then the Participant’s Options may be exercised only to the extent that
      such Options would have been exercisable by the Participant on the
      Termination Date and must be exercised by the Participant (or the
      Participant’s legal representative) no later than twelve (12) months after
      the Termination Date (or such longer time period not exceeding five (5)
      years as may be determined by the Committee, with any such exercise beyond
      twelve (12) months after the Termination Date, resulting in the Option, if
      it was intended at grant to be an ISO, thereupon converting automatically
      to an NQSO).

            


    

     

    
      	
               
      

            	
              7.6.3

            	
              Notwithstanding
      the provisions in Section 7.6(a), if the Participant’s service for the
      Company or a Subsidiary is Terminated for Cause, neither the Participant,
      the Participant’s estate nor such other person who may then hold the
      Option shall be entitled to exercise the Option with respect to any Shares
      whatsoever, after Termination, regardless of whether or not after
      Termination the Participant may receive payment from the Company or a
      Subsidiary for vacation pay, for services rendered prior to Termination,
      for services rendered for the day on which Termination occurs, for salary
      in lieu of notice, or for any other benefits. For the purpose of this
      Section 7.6.3, Termination shall be deemed to occur on the date when the
      Company or Subsidiary dispatches notice or advises the Participant that
      his service is Terminated.

            


    

     

    7.7           Limitations
on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum
number shall not prevent the Participant from exercising the Option for the full
number of Shares for which it is then exercisable.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    7.8           Limitations
on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of
Shares with respect to which an Option that is intended to be an ISO are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option plan of the Company, Parent
or a Subsidiary) shall not exceed One Hundred Thousand Dollars ($100,000). If
the Fair Market Value of Shares on the date of grant with respect to which an
Option that is intended to be an ISO are exercisable for the first time by a
Participant during any calendar year exceeds One Hundred Thousand Dollars
($100,000), then the portion of the Option for the first One Hundred Thousand
Dollars ($100,000) worth of Shares to become exercisable in such calendar year
shall continue to be an ISO, and the portion of the Option for the amount in
excess of One Hundred Thousand Dollars ($100,000) that first becomes exercisable
in that calendar year shall thereupon convert automatically to an NQSO. In the
event that the Code or the regulations promulgated thereunder are amended after
the Effective Date to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISOs, such different limit shall be
automatically incorporated herein and shall apply to any Options granted after
the effective date of such amendment with the intent of being ISOs.

     

    7.9           Modification,
Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefore; provided that any
such action may not, without the written consent of the applicable Participant,
impair any of such Participant’s rights under any Option previously granted. Any
outstanding Option that is intended to be an ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with the requirements
of Section 424(h) of the Code.

     

    8.           RESTRICTED
STOCK.

     

    A
Restricted Stock Award is an offer by the Company to sell or award to an
eligible person Shares that are subject to transfer restrictions. The Committee
will determine to whom an offer will be made, the number of Shares the person
may purchase, the price, if any, to be paid (the “Purchase Price”), the transfer
restrictions to which the Shares shall be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

     

    8.1           Form
of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to the Plan shall be evidenced by an Award Agreement (a “Restricted
Stock Agreement”) which shall be in such form (which need not be the same for
each Participant) as the Committee shall from time to time approve, and shall
comply with and be subject to the terms and conditions of the Plan. The offer or
award of Restricted Stock shall be accepted by the Participant’s execution and
delivery of the Restricted Stock Agreement and full payment, if a sale, for the
Shares to the Company within thirty (30) days from the date the Restricted Stock
Agreement is delivered to the person. If such person does not execute and
deliver the Restricted Stock Agreement along with full payment, if a sale, for
the Shares to the Company within thirty (30) days, then the offer will
terminate, unless otherwise extended by the Committee.

     

    8.2           Purchase
Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award,
if any, shall be determined by the Committee on the date the Restricted Stock
Award is made and shall not be less than one hundred percent (100%) of the Fair
Market Value of the Shares on the award date. Payment of the Purchase Price, if
any, shall be made in accordance with Section 10.

     

    8.3           Terms
of Restricted Stock Awards. Restricted Stock Awards shall be subject to such
transfer restrictions as the Committee shall impose. These transfer restrictions
may be based upon completion of a specified number of years of employment or
service with the Company, Parent or a Subsidiary, or upon completion of the
performance goals as set out in advance in the Participant’s individual
Restricted Stock Agreement. Restricted Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a
Restricted Stock Award, the Committee shall: (a) determine the nature, length
and starting date of any Performance Period for the Restricted Stock Award; (b)
select from among the Performance Factors to be used to measure performance
goals, if any; and (c) determine the number of Shares awarded to the
Participant. Prior to the payment of any Restricted Stock Award, the Committee
shall determine the extent to which such Restricted Stock Award has been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Restricted Stock Awards that are subject to different
Performance Periods and have different performance goals and other
criteria.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    8.4           Termination
During Performance Period. If a Participant who has an outstanding Restricted
Stock Award is Terminated during a Performance Period for any reason, then such
Participant shall be entitled to payment (whether in Shares, cash or otherwise)
with respect to such Restricted Stock Award only to the extent earned as of the
date of Termination in accordance with the Restricted Stock Agreement, unless
the Committee determines otherwise.

     

    9.           STOCK
AWARDS.

     

    9.1           Awards
of Stock. A Stock Award is an award of Shares for services rendered to the
Company, Parent or a Subsidiary. A Stock Award shall be awarded pursuant to an
Award Agreement (a “Stock Award Agreement”) that shall be in such form (which
need not be the same for each Participant) as the Committee shall from time to
time approve, and shall comply with and be subject to the terms and conditions
of the Plan. A Stock Award may be awarded upon satisfaction of such performance
goals as are set out in advance in the Participant’s individual Stock Award
Agreement (a “Performance Stock Award Agreement”) that will be in such form
(which need not be the same for each Participant) as the Committee shall from
time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. Stock Awards may vary from Participant to Participant
and between groups of Participants, and may be based upon the achievements or
performance of the Company, Parent or a Subsidiary and/or individual performance
factors or upon such other criteria as the Committee may determine.

     

    9.2           Terms
of Stock Awards. The Committee shall determine the number of Shares to be
awarded to the Participant. If the Stock Award is being earned upon the
satisfaction of performance goals pursuant to a Performance Stock Award
Agreement, then the Committee shall: (a) determine the nature, length and
starting date of any Performance Period for each Stock Award; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Shares that may be awarded to the Participant. Prior
to the payment of any Stock Award, the Committee shall determine the extent to
which such Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Stock Awards that
are subject to different Performance Periods and different performance goals and
other criteria. The number of Shares may be fixed or may vary in accordance with
such performance goals and criteria as shall be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Awards to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.

     

    10.           PAYMENT
FOR SHARE PURCHASES. Payment for Shares purchased pursuant to the Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

     

    10.1           by
cancellation of indebtedness of the Company to the Participant;

     

    10.2           by
surrender of shares that either: (1) have been owned by the Participant for more
than six (6) months and have been paid for within the meaning of SEC Rule 144
(and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (2) were
obtained by the Participant in the public market;

     

    10.3           by
waiver of compensation due or accrued to the Participant for services
rendered;

     

    10.4           with
respect solely to purchases upon exercise of an Option, and provided that a
public market for the Common Stock exists:

     

    
      
         

      

      
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              10.4.1

            	
              through
      a “same day sale” commitment from the Participant and a broker-dealer that
      is a member of the National Association of Securities Dealers (an “NASD
      Dealer”) whereby the Participant irrevocably elects to exercise the Option
      and to sell a portion of the Shares so purchased to pay the Exercise
      Price, and whereby the NASD Dealer irrevocably commits upon receipt of
      such Shares to forward the Exercise Price directly to the Company;
      or

            


    

     

    
      	
               
      

            	
              10.4.2

            	
              through
      a “margin” commitment from the Participant and a NASD Dealer whereby the
      Participant irrevocably elects to exercise the Option and to pledge the
      Shares so purchased to the NASD Dealer in a margin account as security for
      a loan from the NASD Dealer in the amount of the Exercise Price, and
      whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
      forward the Exercise Price directly to the Company;
  or

            


    

     

    
      	
               
      

            	
              10.4.3

            	
              through
      a cashless exercise, whereby the number of shares to be issued upon
      exercise of the Option shall be reduced by that number of shares having an
      aggregate Fair Market Value equal to the exercise price as of the date of
      exercise; or

            


    

     

    
      	
               
      

            	
              10.4.4

            	
              by
      any combination of the foregoing.

            


    

     

    11.           WITHHOLDING
TAXES.

     

    11.1           Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted
under the Plan, the Company may require the Participant to remit to the Company
an amount sufficient to satisfy any applicable federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever under the Plan payments in satisfaction
of Awards are to be made in cash, such payments shall be net of an amount
sufficient to satisfy any applicable federal, state, and local withholding tax
requirements.

     

    11.2           Stock
Withholding. When, under applicable tax laws, a Participant incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount
required to be withheld, the Committee may allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold from
the Shares to be issued pursuant to the Award  that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose shall be made in accordance with the requirements established by the
Committee and shall be in writing in a form acceptable to the
Committee.

     

    12.           PRIVILEGES
OF STOCK OWNERSHIP.

     

    No
Participant shall have any of the rights of a stockholder with respect to any
Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant shall be a stockholder and shall have all
the rights of a stockholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid with respect
to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company shall be subject to the same
transfer restrictions as the Restricted Stock.

     

    
      
         

      

      
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    13.           NON-TRANSFERABILITY
OF AWARDS.

     

    13.1           Awards
of Stock and Restricted Stock granted under the Plan, and any interest therein,
shall not be transferable or assignable by the Participant, and may not be made
subject to execution, attachment or similar process, other than by will or by
the laws of descent and distribution. Awards of Options granted under the Plan,
and any interest therein, shall not be transferable or assignable by the
Participant, and may not be made subject to execution, attachment or similar
process, other than by will or by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the Options are to
be passed to beneficiaries upon the death of the trustor, or by gift to a member
of the Participant’s “immediate family,” as that term is defined in 17 C.F.R.
240.16a-l(e). During the lifetime of the Participant an Award shall be
exercisable solely by the Participant. During the lifetime of the Participant,
any elections with respect to an Award may be made only by the Participant
unless otherwise determined by the Committee and set forth in the Award
Agreement.

     

    13.2           The
restrictions under this Section 13 shall cease to apply to Shares received as
part of a Stock Award or Restricted Stock Award under the Plan at the time
ownership of such Shares vests in the recipient of the Award. Similarly, said
restrictions shall not apply to Shares received upon the exercise of vested
Options.

     

    14.           CERTIFICATES.

     

    All
certificates for Shares or other securities delivered under the Plan shall be
subject to such stop transfer orders, legends and other restrictions as the
Committee shall deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

     

    15.           ESCROW;
PLEDGE OF SHARES.

     

    To
enforce any transfer restrictions in connection with a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing
Shares, together with stock powers or other instruments of transfer approved by
the Committee appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such transfer restrictions
have lapsed or terminated, and the Committee shall cause a legend or legends
referencing such transfer restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under the Plan shall be required to
pledge and deposit with the Company all or part of the Shares so purchased as
collateral to secure the payment of the Participant’s obligation to the Company
under the promissory note; provided, however, that the
Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company shall have
full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant’s Shares or other collateral. In connection with
any pledge of Shares, a Participant shall be required to execute and deliver a
written pledge agreement in such form as the Committee shall from time to time
approve. The Shares purchased with the promissory note shall be proportionately
released from the pledge on a pro rata basis as the payments under the
promissory note are made.

     

    16.           EXCHANGE
OF AWARDS.

     

    The
Committee may, at any time or from time to time, authorize the Company, with the
consent of the respective Participants, to issue new Awards in exchange for the
surrender and cancellation of any or all outstanding Awards.

     

    17.           SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE.

     

    An Award
shall not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the
date of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates for Shares under the Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company shall be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company shall have no liability for any inability or failure to
do so.

     

    
      
         

      

      
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    18.           NO
OBLIGATION TO EMPLOY OR CONTINUE SERVICE.

     

    Nothing
in the Plan or any Award granted under the Plan will confer or be deemed to
confer on any Participant any right to continue in the employ or service of, or
to continue any other relationship with, the Company, Parent or any Subsidiary,
or limit in any way the right of the Company, Parent or any Subsidiary to
terminate a Participant’s employment, service or other relationship at any time,
with or without Cause.

     

    19.           CORPORATE
TRANSACTIONS.

     

    19.1           Assumption
or Replacement of Awards by Successor. In the event of (a) a dissolution or
liquidation of the Company, (b) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a
wholly-owned Subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company or their relative stock holdings and the Awards
granted under this Plan are assumed, converted or replaced by the successor
corporation, which assumption shall be binding on all Participants), (c) a
merger in which the Company is the surviving corporation but after which the
stockholders of the Company immediately prior to such merger (other than any
stockholder that merges, or which owns or controls another corporation that
merges, with the Company in such merger) cease to own their shares or other
equity interest in the Company, (d) the sale of substantially all of the assets
of the Company, or (e) the acquisition, sale, or transfer of more than fifty
percent (50%) of the outstanding shares of the Company by tender offer or
similar transaction, any or all outstanding Awards may be assumed, converted or
replaced by the successor corporation (if any), which assumption, conversion or
replacement shall be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent awards or provide substantially
similar consideration to Participants as was provided to stockholders (after
taking into account the existing provisions of the awards). The successor
corporation may also issue, in place of outstanding Shares held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Awards, as
provided above, pursuant to a transaction described in this Section 19.1, such
Awards shall expire on such transaction at such time and on such conditions as
the Committee shall determine. Notwithstanding anything in the Plan to the
contrary, the Committee may provide that the vesting of any or all Awards
granted pursuant to the Plan will accelerate upon a transaction described in
this Section 19. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the consummation
of such event at such time and on such conditions as the Committee determines,
and if such Options are not exercised prior to the consummation of the corporate
transaction, they shall terminate at such time as determined by the
Committee.

     

    19.2           Other
Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 19, in the event of the occurrence of
any transaction described in Section 19.1, any then outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.

     

    20.           ADOPTION
AND EFFECTIVE DATE.

     

    This 2007
Equity Incentive Plan is effective as of February 28, 2007, the date it was
adopted by the Board.  This amendment and restatement of the Plan is
effective as of January 1, 2008.

     

    
      
         

      

      
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    21.           STOCKHOLDER
APPROVAL.

     

    The Plan
shall be approved by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted by the Company.

     

    22.           GOVERNING
LAW.

     

    The Plan
and all agreements hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware.

     

    23.           AMENDMENT
OR TERMINATION OF PLAN.

     

    The Board
may at any time terminate or amend the Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to the Plan; provided, however, that the
Board shall not, without the approval of the stockholders of the Company, amend
the Plan in any manner that requires such stockholder approval under the Code,
if applicable, or by any stock exchange or market on which the Common Stock is
listed for trading.  Notwithstanding the foregoing, no amendment or
termination of the Plan shall adversely affect any Participant’s entitlements to
a previously granted Award, unless the Participant consents thereto in
writing.

     

    24.           NONEXCLUSIVITY
OF PLAN.

     

    None of
the adoption of the Plan by the Board, the submission of the Plan to the
stockholders of the Company for approval, nor any provision of the Plan shall be
construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including,
without limitation, the granting of stock options and bonuses otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

     

    25.           ACTION
BY COMMITTEE.

     

    Any
action permitted or required to be taken by the Committee or any decision or
determination permitted or required to be made by the Committee pursuant to the
Plan shall be taken or made in the Committee’s sole and absolute
discretion.

     

    


    
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