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Exhibit 10.7  


 
 

UNI-PIXEL, INC.
  2005 STOCK INCENTIVE PLAN    
    


        1.    Purposes of the Plan.    The purposes of this Stock Incentive Plan are to attract and retain the best available
personnel, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Corporation's business. 


        2.    Definitions.    



        2.01.    Certain Defined Terms.    As used herein, the following definitions shall apply: 



        "Administrator" means the Board or any of the Committees appointed to administer the Plan. 


        "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Exchange Act. 


        "Applicable Laws" means the legal requirements relating to the administration of stock incentive plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction
applicable to Awards granted to residents therein. 


        "Assumed" means that (i) pursuant to a Corporate Transaction (as defined in section (i), (ii), or (iii) of the
definition of such term) or a Related Entity Disposition, the contractual obligations represented by the Award are assumed by the successor entity or its Parent in connection with the Corporate
Transaction or Related Entity Disposition or (ii) pursuant to a Corporate Transaction (as defined in sections (iv) or (v) of the definition of such term), the Award is affirmed by
the Corporation. The Award shall not be deemed "Assumed" for purposes of terminating the Award (in the case of a Corporate Transaction) and the termination of the Continuous Service of the Grantee (in
the case of a Related Entity Disposition) if pursuant to a Corporate Transaction or a Related Entity Disposition the Award is replaced with a comparable award with respect to shares of capital stock
of the successor entity or its Parent. However, for purposes of determining whether the vesting of the Award accelerates, the Award shall be deemed "Assumed" if the Award is replaced with such a
comparable stock award or the Award is replaced with a cash incentive program of the successor entity or Parent thereof which preserves the compensation element of such Award existing at the time of
the Corporate Transaction or Related Entity Disposition and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award. 


        The
determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive. 


        "Award" means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Performance Unit, Performance Share, or other
right or benefit under the Plan. 



        "Award Agreement" means the written agreement evidencing the grant of an Award executed by the Corporation and the Grantee, including any
amendments thereto. 


        "Board" means the Board of Directors of the Corporation. 


        "Cause" means, with respect to the termination by the Corporation or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a then-effective written agreement between the Grantee and the 




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Corporation
or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee's:
(i) performance of any act or failure to perform any act in bad faith and to the detriment of the Corporation or a Related Entity; (ii) dishonesty, intentional misconduct or material
breach of any agreement with the Corporation or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person. 



        "Change in Control" means a change in ownership or control of the Corporation after the Registration Date effected through either of the
following transactions: (i) the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Corporation or by a Corporation-sponsored
employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning of
Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such
stockholders accept, or (ii) a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors. 


        "Code" means the Internal Revenue Code of 1986, as amended. 


        "Committee" means any committee appointed by the Board to administer the Plan. 


        "Common Stock" means the common stock of the Corporation. 


        "Corporation" means Uni-Pixel, Inc., a Delaware corporation. 


        "Consultant" means any person (other than an Employee or a Director, solely with respect to rendering services in such person's capacity
as a Director) who is engaged by the Corporation or any Related Entity to render consulting or advisory services to the Corporation or such Related Entity. 


        "Continuing Directors" means members of the Board who either (i) have been Board members continuously for a period of at least
thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by
at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board. 


        "Continuous Service" means that the provision of services to the Corporation or a Related Entity in any capacity of Employee, Director or
Consultant, is not interrupted or terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the
Corporation, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the
Corporation or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90) days, and reemployment upon
expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3) months and
one (1) day following the expiration of such ninety (90) day period. 




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        "Corporate Transaction" means any of the following transactions: (i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to change the state in which the Corporation is incorporated; (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation (including the capital stock of the Corporation's subsidiary corporations); (iii) approval by the Corporation's stockholders of any plan or
proposal for the complete liquidation or dissolution of the Corporation; (iv) any reverse merger in which the Corporation is the surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from those who held such securities immediately
prior to such merger; or (v) acquisition by any person or related group of persons (other than the Corporation or by a Corporation-sponsored employee benefit plan) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding
securities (whether or not in a transaction also constituting a Change in Control) but excluding any such transaction that the Administrator determines shall not be a Corporate Transaction. 



        "Covered Employee" means an Employee who is a "covered employee" under Section 162(m)(3) of the Code. 


        "Director" means a member of the Board or the board of directors of any Related Entity. 


        "Disability" means as defined under the long-term disability policy of the Corporation or the Related Entity to which the
Grantee provides services regardless of whether the Grantee is covered by such policy. If the Corporation or the Related Entity to which the Grantee provides service does not have a
long-term disability plan in place, "Disability" means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any
medically determinable physical or mental impairment. A Grantee will not be considered to have
incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion. 


        "Dividend Equivalent Right" means a right entitling the Grantee to compensation measured by dividends paid with respect to Common Stock. 


        "Employee" means any person, including an Officer or Director, who is in the employ of the Corporation or any Related Entity, subject to
the control and direction of the Corporation or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a director's fee by the Corporation or a
Related Entity shall not be sufficient to constitute "employment" by the Corporation. 


        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: (i) where there exists a public market
for the Common Stock, the Fair Market Value shall be (A) the closing price for a Share on the date of the determination (or, if no closing price was reported on that date, on the last trading
date on which a closing price was reported) on the stock exchange determined by the Administrator to be the primary market for the Common Stock or the NASDAQ National Market, whichever is applicable
or (B) if the Common Stock is not traded on any such exchange or national market system, the average of the closing bid and asked prices of a Share on the NASDAQ Small Cap Market on the date of
the determination (or, if no such prices were reported on that date, on the last date on which such prices were reported), in each case, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or (ii) in the absence of an established 




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market
for the Common Stock of the type described in (i), above, the Fair Market Value thereof shall be determined by the Administrator in good faith. 


        "Good Reason" means the occurrence after a Corporate Transaction, Change in Control or Related Entity Disposition of any of the following
events or conditions unless consented to by the Grantee (and the Grantee shall be deemed to have consented to any such event or condition unless the Grantee provides written notice of the Grantee's
non-acquiescence within 30 days of the effective time of such event or condition): (i) a change in the Grantee's responsibilities or duties which represents a material and
substantial diminution in the Grantee's responsibilities or duties as in effect immediately preceding the consummation of a Corporate Transaction, Change in Control or Related Entity Disposition;
(ii) a reduction in the Grantee's base salary to a level below that in effect at any time within six (6) months preceding the consummation of a Corporate Transaction, Change in Control
or Related Entity Disposition or at any time thereafter; or (iii) requiring the Grantee to be based at any place outside a [            ]-mile radius from
the Grantee's job location prior to the Corporate Transaction, Change in Control or Related Entity Disposition except for
reasonably required travel on business which is not materially greater than such travel requirements prior to the Corporate Transaction, Change in Control or Related Entity Disposition. 



        "Grantee" means an Employee, Director or Consultant who receives an Award under the Plan. 


        "Immediate Family" means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant or employee), a trust in which these persons (or the Grantee)
have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or
the Grantee) own more than fifty percent (50%) of the voting interests. 


        "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code. 


        "Non-Qualified Stock Option" means an Option not intended to qualify as an Incentive Stock Option. 



        "Officer" means a person who is an officer of the Corporation or a Related Entity within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder. 


        "Option" means an option to purchase Shares pursuant to an Award Agreement granted under the Plan. 


        "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code. 



        "Performance-Based Compensation" means compensation qualifying as "performance-based compensation" under Section 162(m) of the
Code. 


        "Performance Shares" means Shares or an Award denominated in Shares which may be earned in whole or in part upon attainment of performance
criteria established by the Administrator. 


        "Performance Units" means an Award which may be earned in whole or in part upon attainment of performance criteria established by the
Administrator and which may be settled 




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for
cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator. 


        "Plan" means this 2005 Stock Incentive Plan. 


        "Registration Date" means the first to occur of (i) the closing of the first sale to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, of (A) the Common Stock or (B) the same class of
securities of a successor corporation (or its Parent) issued pursuant to a Corporate Transaction in exchange for or in substitution of the Common Stock; and (ii) in the event of a Corporate
Transaction, the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation (or its Parent) issuable in such Corporate Transaction shall have
been sold to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or
prior to the date of consummation of such Corporate Transaction. 


        "Related Entity" means any Parent, Subsidiary and any business, corporation, partnership, limited liability company or other entity in
which the Corporation, a Parent or a Subsidiary holds a substantial ownership interest, directly or indirectly. 


        "Related Entity Disposition" means the sale, distribution or other disposition by the Corporation, a Parent or a Subsidiary of all or
substantially all of the interests of the Corporation, a Parent or a Subsidiary in any Related Entity effected by a sale, merger or consolidation or other transaction involving that Related Entity or
the sale of all or substantially all of the assets of that Related Entity, other than any Related Entity Disposition to the Corporation, a Parent or a Subsidiary. 


        "Restricted Stock" means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator. 


        "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any successor thereto. 



        "SAR" means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured
by appreciation in the value of Common Stock. 


        "Share" means a share of the Common Stock. 


        "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code. 




        2.02.    Other Defined Terms.    Other capitalized terms not defined above in  Section 2.01of this plan shall have the meanings
provided elsewhere in this plan. 




        3.    Stock Subject to the Plan.    



        3.01.    Fixed Share Limit.    Subject to the provisions of  Section 10, below, the maximum aggregate number of Shares which may
be issued pursuant to all Awards (including Incentive Stock Options) is Two
Million (2,000,000) Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired Common Stock. 


        3.02.    Shares Deemed Not Issued.    Any Shares covered by an Award (or portion of an Award) which is forfeited or
canceled, expires or is settled in cash, shall be deemed not to have been 



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issued
for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Corporation at their original purchase
price, such Shares shall become available for future grant under the Plan. 




        4.    Administration of the Plan.    



        4.01.    Plan Administrator.    



        (a)    Administration with Respect to Directors and Officers.    With respect to grants of Awards to Directors or
Employees who are also Officers or Directors of the Corporation, the Plan shall be administered by (i) the Board or (ii) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. 


        (b)    Administration with Respect to Consultants and Other Employees.    With respect to grants of Awards to
Employees or Consultants who are neither Directors nor Officers of the Corporation, the Plan shall be administered by (i) the Board or (ii) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board. The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines from time to time. 


        (c)    Administration with Respect to Covered Employees.    Notwithstanding the foregoing, grants of Awards to any
Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to
serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the "Administrator" or to a "Committee" shall be
deemed to be references to such Committee or subcommittee. 


        (d)    Administration Errors.    In the event an Award is granted in a manner inconsistent with the provisions of this  Section 4.01, such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws. 




        4.02.    Powers of the Administrator.    Subject to Applicable Laws and the provisions of the Plan (including any
other powers given to the Administrator hereunder), and except as other wise provided by the Board, the Administrator shall have the authority, in its discretion: 



        (a)   to
select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder; 


        (b)   to
determine whether and to what extent Awards are granted hereunder; 


        (c)   to
determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder; 


        (d)   to
approve forms of Award Agreements for use under the Plan; 


        (e)   to
determine the terms and conditions of any Award granted hereunder; 




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        (f)    to
amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the Grantee's rights under an outstanding
Award shall not be made without the Grantee's written consent; 


        (g)   to
construe and interpret the terms of the Plan and Awards, including with out limitation, any notice of Award or Award Agreement, granted pursuant to the Plan; 



        (h)   to
establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions and to afford Grantees favorable
treatment under such rules or laws; provided, however, that no Award shall be granted under any such
additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; and 


        (i)    to
take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate. 





        5.    Eligibility.    Awards other than Incentive Stock Options may be granted to Employees, Directors and
Consultants. Incentive Stock Options may be granted only to Employees of the Corporation, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in foreign jurisdictions as the Administrator may determine from time to
time. 


        6.    Terms and Conditions of Awards.    



        6.01.    Type of Awards.    The Administrator is authorized under the Plan to award any type of arrangement to an
Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) an Option, a
SAR, or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one
or more events, or the satisfaction of performance criteria or other conditions, or (iii) any other security with the value derived from the value of the Shares. Such awards include, without
limitation, Options, SARs, or sales or bonuses of Restricted Stock, Dividend Equivalent Rights, Performance Units or Performance Shares, and an Award may consist of one such security or benefit, or
two (2) or more of them in any combination or alternative. 


        6.02.    Designation of Award.    Each Award shall be designated in the Award Agreement. In the case of an Option, the
Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Corporation or any
Parent or Subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock
Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date
of the relevant Option. 


        6.03.    Conditions of Award.    Subject to the terms of the Plan, the Administrator shall determine the provisions,
terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or
other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any
one of, or combination of, increase in share price, earnings per share, total stockholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue,
economic value added, personal management objectives, or 



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other
measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in
the Award Agreement. 


        6.04.    Acquisitions and Other Transactions.    The Administrator may issue Awards under the Plan in settlement,
assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Corporation or a Related Entity acquiring another entity, an interest in another entity
or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction. 


        6.05    Deferral of Award Payment.    The Administrator may establish one or more programs under the Plan to permit
selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the
Grantee to payment or receipt of Shares or other consideration under an Award (but only to the extent that such deferral programs would not result in an accounting compensation charge unless otherwise
determined by the Administrator). The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if
any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral
program. 


        6.06.    Separate Programs.    The Administrator may establish one or more separate programs under the Plan for the
purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time. 


        6.07.    Individual Option and SAR Limit.    There shall be no limit to the maximum number of Shares with respect to
which Options and SARs may be granted to any Grantee in any fiscal year of the Corporation, except to the extent required by Section 162(m) of the Code or the regulations thereunder. 



        6.08.    Early Exercise.    The Award Agreement may, but need not, include a provision whereby the Grantee may elect
at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject
to a repurchase right in favor of the Corporation or a Related Entity or to any other restriction the Administrator determines to be appropriate. 


        6.09.    Term of Award.    The term of each Award shall be the term stated in the Award Agreement, provided, however,
that the term of an Incentive Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at
the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Corporation or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. 


        6.10.    Transferability of Awards.    Incentive Stock Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee;  provided,
however, that the Grantee may designate a beneficiary of the Grantee's Incentive Stock Option
in the event of the Grantee's death on a beneficiary designation form provided by the Administrator. Other Awards shall be transferred by will and by the laws of descent and distribution, and during
the lifetime of the Grantee, by gift and/or pursuant to a domestic relations order to members of the Grantee's Immediate Family to the extent and in the manner determined by the Administrator. 



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        6.11.    Time of Granting Awards.    The date of grant of an Award shall for all purposes be the date on which the
Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator. Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable time after the date of such grant. 




        7.    Award Exercise or Purchase Price, Consideration and Taxes.    



        7.01.    Exercise or Purchase Price.    The exercise or purchase price, if any, for an Award shall be as follows: 



        (a)   In
the case of an Incentive Stock Option: 



          (i)  granted
to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Corporation or any Parent or Subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant; or 


         (ii)  granted
to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant. 




        (b)   In
the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than eighty-five percent (85%) of the Fair Market
Value per Share on the date of grant unless otherwise determined by the Administrator. 



        (c)   In
the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant. 


        (d)   In
the case of other Awards, such price as is determined by the Administrator. 


        (e)   Notwithstanding
the foregoing provisions of this Section 7.01, in the case of an Award issued pursuant to  Section 6.04, above, the
exercise or purchase price for the Award shall be determined in accordance with the principles
of Section 424(a) of the Code. 




        7.02.    Consideration.    Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon
exercise or purchase of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In
addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following;  provided,
however,
that the portion of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law: 



        (a)   cash;



        (b)   check;



        (c)   delivery
of Grantee's promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as appropriate; 


        (d)   if
the exercise or purchase occurs on or after the Registration Date, surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares
as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall be exercised 




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(but
only to the extent that such exercise of the Award would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price unless otherwise determined by
the Administrator); 


        (e)   with
respect to Options, if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (A) shall provide written instructions to a Corporation-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Corporation, out
of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the
Corporation to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or 


        (f)    any
combination of the foregoing methods of payment. 




        7.03.    Taxes.    No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or
other person has made arrangements acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Corporation shall
withhold or collect from Grantee an amount sufficient to satisfy such tax obligations. 




        8.    Exercise of Award.    



        8.01.    Procedure for Exercise; Rights as a Stockholder.    



        (a)   Any
Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in
the Award Agreement. 


        (b)   An
Award shall be deemed to be exercised when written notice of such exercise has been given to the Corporation in accordance with the terms of the Award by the person
entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure
to pay the purchase price as provided in Section 7.02(e). Until the issuance (as evidenced by the appropriate entry on the books of the
Corporation or of a duly authorized transfer agent of the Corporation) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to Shares subject to an Award, notwithstanding the exercise of an Option or other Award. The Corporation shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Award. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in the Award
Agreement or Section 10, below. 




        8.02.    Exercise of Award Following Termination of Continuous Service.    



        (a)   An
Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee's
Continuous Service only to the extent provided in the Award Agreement. 


        (b)   Where
the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee's Continuous Service for a specified period, the Award shall
terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first. 




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        (c)   Any
Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the
termination of a Grantee's
Continuous Service shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified
in the Award Agreement. 





        9.    Conditions upon Issuance of Shares.    Shares shall not be issued pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the
Corporation with respect to such compliance. As a condition to the exercise of an Award, the Corporation may require the person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Corporation, such a
representation is required by any Applicable Laws. 


        10.    Adjustments upon Changes in Capitalization.    Subject to any required action by the stockholders of the
Corporation, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Options and SARs may be granted to any Grantee
in any fiscal year of the Corporation, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (a) any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar transaction affecting the Shares, (b) any
other increase or decrease in the number of issued Shares effected without receipt of consideration by the Corporation, or (c) as the Administrator may determine in its discretion, any other
transaction with respect to Common Stock to which Section 424(a) of the Code applies or a similar transaction; provided,  however that conversion of
any convertible securities of the Corporation shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject
to an Award. 


        11.    Corporate Transactions/Changes in Control /Related Entity Dispositions.    



        11.01.    Termination of Award to Extent Not Assumed.    



        (a)    Corporate Transaction.    Effective upon the consummation of a Corporate Transaction, all outstanding Awards
under the Plan shall terminate; provided, however, that all such Awards shall not terminate to the
extent they are Assumed in connection with the Corporate Transaction. 


        (b)    Related Entity Disposition.    Effective upon the consummation of a Related Entity Disposition, for purposes of
the Plan and all Awards, there shall be a deemed termination of Continuous Service of each Grantee who is at the time engaged primarily in service to the Related Entity involved in such Related Entity
Disposition and each Award of such Grantee which is at the time outstanding under the Plan shall be exercisable in accordance with the terms of the Award Agreement evidencing such Award. However, such
Continuous Service shall not be deemed to terminate as to the portion of any such award that is Assumed. 




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        11.02.    Acceleration of Award upon Corporate Transaction/Change in Control/Related Entity Disposition.    



        (a)    Corporate Transaction.    Except as provided otherwise in an individual Award Agreement, in the event of a
Corporate Transaction and: 



          (i)  for
the portion of each Award that is Assumed, then such Award (if assumed), the replacement Award (if replaced), or the cash incentive program automatically shall
become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time
represented by such Assumed portion of the Award, immediately upon termination of the Grantee's Continuous Service (substituting the successor employer corporation, if any, for "Corporation or Related
Entity" for the definition of "Continuous Service") if such Continuous Service is terminated by the successor company or the Corporation without Cause or voluntarily by the Grantee with Good Reason
within twelve (12) months of the Corporate Transaction; and 


         (ii)  for
the portion of each Award that is not Assumed, such portion of the Award shall automatically become fully vested and exercisable and be released from any repurchase
or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time represented by such portion of the Award, immediately prior to the specified
effective date of such Corporate Transaction. 




        (b)    Change in Control.    Except as provided otherwise in an individual Award Agreement, following a Change in
Control (other than a Change in Control which also is a Corporate Transaction) and upon the termination of the Continuous Service of a Grantee if such Continuous Service is terminated by the
Corporation or Related Entity without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months of a Change in Control, each Award of such Grantee which is at the time
outstanding under the Plan automatically shall become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market
Value), immediately upon the termination of such Continuous Service. 


        (c)    Related Entity Disposition    Except as provided otherwise in an individual Award Agreement, in the event of a
Related Entity Disposition and: 



          (i)  for
the portion of each Award that is Assumed, then such Award (if assumed), the replacement Award (if replaced), or the cash incentive program automatically shall
become vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares at the time
represented by such Assumed portion of the Award, immediately upon termination of the Grantee's Continuous Service (substituting the successor employer corporation, if any, for "Corporation or Related
Entity" for the definition of "Continuous Service") if such Continuous Service is terminated by the successor company without Cause or voluntarily by the Grantee with Good Reason within twelve
(12) months of the Related Entity Disposition; and 


         (ii)  for
the portion of each Award of a Grantee who is at the time engaged primarily in service to the Related Entity involved in such Related Entity Disposition that is not
Assumed, such portion of the Award of such Grantee automatically shall become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights
exercisable at Fair Market Value) for all of the Shares at the time represented by such portion of the Award, immediately prior to the specified effective date of such Related Entity Disposition. 





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        (d)    Effect of Acceleration on Incentive Stock Options.    The portion of any Incentive Stock Option accelerated
under this Section 11 in connection with a Corporate Transaction, Change in Control or Related Entity Disposition shall remain exercisable as an
Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is exceeded, the
accelerated excess portion of such Option shall be exercisable as a Non-Qualified Stock Option. 





        12.    Effective Date and Term of Plan.    The Plan shall become effective upon the earlier to occur of its adoption
by the Board or its approval by the stockholders of the Corporation. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to  Section 17, below, and
Applicable Laws, Awards may be granted under the Plan upon its becoming effective. 


        13.    Amendment, Suspension or Termination of the Plan.    The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws, the Corporation shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required. No Award may be
granted during any suspension of the Plan or after termination of the Plan. Any amendment, suspension or termination of the Plan (including termination of the Plan under  Section 12, above) shall
not affect Awards already granted, and such Awards shall remain in full force
and effect as if the Plan had not been amended, suspended or terminated, unless mutually agreed otherwise between the Grantee and the Administrator, which agreement must be in writing and signed by
the Grantee and the Corporation. 


        14.    Reservation of Shares.    The Corporation, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The inability of the Corporation to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Corporation's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Corporation of any liability in respect of the failure to
issue or sell such Shares as to which such requisite authority shall not have been obtained. 


        15.    No Effect on Terms of Employment/Consulting Relationship.    The Plan shall not confer upon any Grantee any
right with respect to the Grantee's Continuous Service, nor shall it interfere in any way with his or her right or the Corporation's right to terminate the Grantee's Continuous Service at any time,
with or without Cause, and with or without notice. The Corporation's ability to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the
Grantee's Continuous Service has been terminated for Cause for the purposes of this Plan. 


        16.    No Effect on Retirement and Other Benefit Plans.    Except as specifically provided in a retirement or other
benefit plan of the Corporation or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Corporation or a
Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to
level of compensation. The Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended. 


        17.    Stockholder Approval.    The grant of Incentive Stock Options under the Plan shall be subject to approval by
the stockholders of the Corporation within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution for outstanding Incentive
Stock Options pursuant to Section 424(a) of the Code. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive
Stock Options under the Plan prior to approval by the stockholders, but until such approval is obtained, no such Incentive Stock Option shall be exercisable. In the event that stockholder approval is
not obtained within the twelve (12) month period provided above, all Incentive Stock Options previously granted under the Plan shall be exercisable as Non-Qualified Stock Options. 


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UNI-PIXEL, INC. 2005 STOCK INCENTIVE PLAN