ex10-1.htm


    
 

    
      
        

      


      DERYCZ
        SCIENTIFIC, INC.

       

      2007
        EQUITY COMPENSATION PLAN

       

      


       

      I.  ESTABLISHMENT
        OF PLAN; DEFINITIONS

       

      1.           
        Purpose.  The
        purpose of the Derycz Scientific, Inc. 2007 Equity Compensation Plan is to
        encourage certain, officers, employees, directors, and consultants of Derycz
        Scientific, Inc., a Nevada corporation (the "Company"), to acquire and hold
        stock in the Company as an added incentive to remain with the Company and
        increase their efforts in promoting the interests of the Company, and to
        enable
        the Company to attract and retain capable individuals.

       

      2.           
        Definitions.  Unless
        the context clearly indicates otherwise, the following terms shall have the
        meanings set forth below:

       

      (a)           
        "Board" shall mean the Board of Directors of the Company.

       

      (b)           
        "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
        from
        time to time.

       

      (c)           
        "Committee" shall mean (i) a committee made up of members of the Board who
        shall, from time to time, be appointed by the Board, or (ii) if no such
        committee is formed, the Board.

       

      (d)           
        "Company" shall mean Derycz Scientific, Inc., a Nevada corporation.

       

      (e)           
        "Consultants" shall mean individuals who provide services to the Company
        and any
        Subsidiary who are not Employees or Directors.

       

      (f)           
        "Directors" shall mean the members of the Board of Directors of the
        Company.

       

      (g)           
        "Disability" shall mean a medically determinable physical or mental condition
        which causes an Employee, Director, or Consultant to be unable to engage
        in any
        substantial gainful activity and which can be expected to result in death
        or to
        be of long-continued and indefinite duration.

       

      (h)           
        "Employee" shall mean any common law employee, including officers, of the
        Company or any Subsidiary as determined under the Code and the Treasury
        Regulations thereunder.

       

      (i)           
        "Fair Market Value" shall mean (i) if the Stock is listed on a national
        securities exchange or the NASDAQ system, the mean between the highest and
        lowest sales prices for the Stock on such date, or, if no such prices are
        reported for such day, then on the next preceding day on which there were
        reported prices; (ii) if the Stock is not listed on a national securities
        exchange or the NASDAQ system, the mean between the bid and asked prices
        for the
        shares on such date, or if no such prices are reported for such day, then
        on the
        next preceding day on which there were reported prices; or (iii) as determined
        in good faith by the Company’s Board of Directors.

       

      (j)           
        "Grantee" shall mean an officer, Employee, Director, or Consultant granted
        a
        Stock Option or Stock Award under this Plan.

       


      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      


      (k)           
        "Incentive Stock Option" shall mean an option granted pursuant to the Incentive
        Stock Option provisions as set forth in Part II of this Plan.

       

      (l)            
         "Non-Qualified Stock Option" shall mean an option granted pursuant to the
        Non-Qualified Stock Option provisions as set forth in Part III of this
        Plan.

       

      (m)            "Plan"
        shall mean the Derycz Scientific, Inc. 2007 Equity Compensation Plan as set
        forth herein and as amended from time to time.

       

      (n)           
        "Restricted Stock" shall mean Stock which is issued pursuant to the Restricted
        Stock Award provisions as set forth in Part IV of this Plan.

       

      (o)           
        "Stock" shall mean authorized but unissued shares of the Common Stock of
        the
        Company or reacquired shares of the Company's Common Stock.

       

      (p)           
        "Stock Appreciation Right" shall mean a stock appreciation right granted
        pursuant to the Stock Appreciation Right provisions as set forth in Part
        II and
        III of this Plan.

       

      (q)           
        "Stock Award" shall mean an award of Restricted or Unrestricted Stock granted
        pursuant to this Plan.

       

      (r)           
        "Stock Option" shall mean an option granted pursuant to the Plan to purchase
        shares of Stock.

       

      (s)           
        “Subsidiary” shall mean any corporation (other than the Company) in an unbroken
        chain of corporations beginning with and including 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.

       

      (t)           
        "Ten Percent Shareholder" shall mean an Employee who at the time a Stock
        Option
        is granted owns stock representing more than ten percent (10%) of the total
        combined voting power of all stock of the Company or of its parent or subsidiary
        corporation.

       

      (u)           
        "Unrestricted Stock" shall mean Stock which is issued pursuant to the
        Unrestricted Stock provisions as set forth in Part V of this Plan.

       

      3.           
        Shares of Stock
        Subject to the Plan.  Subject to the provisions of Paragraph 2
        of Part VI of the Plan, the Stock which may be issued or transferred pursuant
        to
        Stock Options and Stock Awards granted under the Plan and the Stock which
        is
        subject to outstanding but unexercised Stock Options under the Plan shall
        not
        exceed One Million Five Hundred Thousand (1,500,000) shares in the
        aggregate.  If a Stock Option shall expire and terminate for any
        reason, in whole or in part, without being exercised or, if Stock Awards
        are
        forfeited because the restrictions with respect to such Stock Awards shall
        not
        have been met or have lapsed, the number of shares of Stock which are no
        longer
        outstanding as Stock Awards or subject to Stock Options may again become
        available for the grant of Stock Awards or Stock Options.  There shall
        be no terms and conditions in a Stock Award or Stock Option which provide
        that
        the exercise of an Incentive Stock Option reduces the number of shares of
        Stock
        for which an outstanding Non-Qualified Stock Option may be exercised; and
        there
        shall be no terms and conditions in a Stock Award or Stock Option which provide
        that the exercise of a Non-Qualified Stock Option reduces the number of shares
        of Stock for which an outstanding Incentive Stock Option may be
        exercised.

       


      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      


      4.           
        Administration
        of the
        Plan.  The Plan shall be administered by the
        Committee.  Subject to the express provisions of the Plan, the
        Committee shall have authority to interpret the Plan, to prescribe, amend,
        and
        rescind rules and regulations relating to it, to determine the terms and
        provisions of Stock Option agreements, and to make all other determinations
        necessary or advisable for the administration of the Plan.  Any
        controversy or claim arising out of or related to this Plan shall be determined
        unilaterally by and at the sole discretion of the Committee.

       

      5.           
        Amendment or
        Termination.  The Board may, at any time, alter, amend,
        suspend, discontinue, or terminate this Plan; provided, however, that such
        action shall not adversely affect the right of Grantees to Stock Awards or
        Stock
        Options previously granted and no amendment, without the approval of the
        stockholders of the Company, shall increase the maximum number of shares
        which
        may be awarded under the Plan in the aggregate, materially increase the benefits
        accruing to Grantees under the Plan, change the class of Employees eligible
        to
        receive options under the Plan, or materially modify the eligibility
        requirements for participation in the Plan.

       

      6.           
        Effective Date
        and
        Duration of the Plan.  This Plan shall become effective on
        December 21, 2007.  This Plan shall terminate at such time as may be
        determined by the Board, and no Stock Award or Stock Option may be issued
        or
        granted under the Plan thereafter, but such termination shall not affect
        any
        Stock Award or Stock Option theretofore issued or granted.

       

       

      II.  INCENTIVE
        STOCK OPTION PROVISIONS

       

      1.           
        Granting of Incentive
        Stock Options.

       

      (a)           
        Only Employees of the Company shall be eligible to receive Incentive Stock
        Options under the Plan. Officers, Directors, and Consultants of the Company
        who
        are not also Employees shall not be eligible to receive Incentive Stock
        Options.

       

      (b)           
        The purchase price of each share of Stock subject to an Incentive Stock Option
        shall not be less than 100% of the Fair Market Value of a share of the Stock
        on
        the date the Incentive Stock Option is granted; provided, however, that the
        purchase price of each share of Stock subject to an Incentive Stock Option
        granted to a Ten Percent Shareholder shall not be less than 110% of the Fair
        Market Value of a share of the Stock on the date the Incentive Stock Option
        is
        granted.

       

      (c)           
        No Incentive Stock Option shall be exercisable more than ten (10) years from
        the
        date the Incentive Stock Option was granted; provided, however, that an
        Incentive Stock Option granted to a Ten Percent Shareholder shall not be
        exercisable more than five (5) years from the date the Incentive Stock Option
        was granted.

       

      (d)           
        The Committee shall determine and designate from time to time those Employees
        who are to be granted Incentive Stock Options and specify the number of shares
        subject to each Incentive Stock Option.

       

      (e)           
        The Committee, in its sole discretion, shall determine whether any particular
        Incentive Stock Option shall become exercisable in one or more installments,
        specify the installment dates, and, within the limitations herein provided,
        determine the total period during which the Incentive Stock Option is
        exercisable. Further, the Committee may make such other provisions as may
        appear
        generally acceptable or desirable to the Committee or necessary to qualify
        its
        grants under the provisions of Section 422 of the Code.

       


      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      


      (f)           
        The Committee may grant at any time new Incentive Stock Options to an Employee
        who has previously received Incentive Stock Options or other options whether
        such prior Incentive Stock Options or other options are still outstanding,
        have
        previously been exercised in whole or in part, or are canceled in connection
        with the issuance of new Incentive Stock Options. The purchase price of the
        new
        Incentive Stock Options may be established by the Committee without regard
        to
        the existing Incentive Stock Options or other options.

       

      (g)           
        Notwithstanding any other provisions hereof, the aggregate fair market value
        (determined at the time the option is granted) of the Stock with respect
        to
        which Incentive Stock Options are exercisable for the first time by the Employee
        during any calendar year (under all such plans of the Grantee's employer
        corporation and its parent and subsidiary corporation) shall not exceed
        $100,000.

       

      2.           
        Exercise of Incentive
        Stock Options.  The option price of an Incentive Stock Option
        shall be payable on exercise of the option (i) in cash or by check, bank
        draft, or postal or express money order, (ii) by the surrender of Stock
        then owned by the Grantee, (iii) the proceeds of a loan from an independent
        broker-dealer whereby the loan is secured by the option or the stock to be
        received upon exercise, or (iv) any combination of the foregoing;
        provided, that each such method and time for payment and each such
        borrowing and terms and conditions of repayment shall then be permitted by
        and
        be in compliance with applicable law.  Shares of Stock so surrendered
        in accordance with clause (ii) or (iv) shall be valued at the Fair Market
        Value
        thereof on the date of exercise, surrender of such Stock to be evidenced
        by
        delivery of the certificate(s) representing such shares in such manner, and
        endorsed in such form, or accompanied by stock powers endorsed in such form,
        as
        the Committee may determine.

       

      3.           
        Termination of
        Employment.

       

      (a)           
        If a Grantee's employment with the Company is terminated other than by
        Disability or death, the terms of any then outstanding Incentive Stock Option
        held by the Grantee shall extend for a period ending on the earlier of the
        date
        on which such Stock Option would otherwise expire or three months after such
        termination of employment, and such Stock Option shall be exercisable to
        the
        extent it was exercisable as of such last date of employment.

       

      (b)           
        If a Grantee's employment with the Company is terminated by reason of
        Disability, the term of any then outstanding Incentive Stock Option held
        by the
        Grantee shall extend for a period ending on the earlier of the date on which
        such Stock Option would otherwise expire or twelve months after such termination
        of employment, and such Stock Option shall be exercisable to the extent it
        was
        exercisable as of such last date of employment.

       

      (c)           
        If a Grantee's employment with the Company is terminated by reason of death,
        the
        representative of his estate or beneficiaries thereof to whom the Stock Option
        has been transferred shall have the right during the period ending on the
        earlier of the date on which such Stock Option would otherwise expire or
        twelve
        months after such date of death, to exercise any then outstanding Incentive
        Stock Options in whole or in part. If a Grantee dies without having fully
        exercised any then outstanding Incentive Stock Options, the representative
        of
        his estate or beneficiaries thereof to whom the Stock Option has been
        transferred shall have the right to exercise such Stock Options in whole
        or in
        part.

       

      4.           
        Stock Appreciation
        Rights

       

      (a)           
        Grant.  Stock
        Appreciation Rights related to all or any portion of an Incentive Stock Option
        may be granted by the Committee to any Grantee in connection with the grant
        of
        an Incentive Stock Option or unexercised portion thereof held by the Grantee
        at
        any time and from time to time during

       


      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      


      the
        term
        thereof.  Each Stock Appreciation Right shall be granted at least at
        Fair Market Value on the date of grant and be subject to such terms and
        conditions not inconsistent with the provisions of this Part II as shall
        be
        determined by the Committee and included in the agreement relating to such
        Stock
        Appreciation Right, subject in any event, however, to the following terms
        and
        conditions of this Section 4.  Each Stock Appreciation Right may
        include limitations as to the time when such Stock Appreciation Right becomes
        exercisable and when it ceases to be exercisable that are more restrictive
        than
        the limitations on the exercise of the Incentive Stock Option to which it
        relates.

       

      (b)           
        Exercise.  No
        Stock Appreciation Right shall be exercisable with respect to such related
        Incentive Stock Option or portion thereof unless such Incentive Stock Option
        or
        portion shall itself be exercisable at that time.  A Stock
        Appreciation Right shall be exercised only upon surrender of the related
        Incentive Stock Option or portion thereof in respect of which the Stock
        Appreciation Right is then being exercised.

       

      (c)           
        Amount of
        Payment.  On exercise of a Stock Appreciation Right, a Grantee
        shall be entitled to receive an amount equal to the product of (i) the amount
        by
        which the Fair Market Value of a share of Stock on the date of exercise of
        the
        Stock Appreciation Right exceeds the option price per share specified in
        the
        related Incentive Stock Option and (ii) the number of shares of Stock in
        respect
        of which the Stock Appreciation Right shall have been exercised.

       

      (d)           
        Form of
        Payment.  Stock Appreciation Rights may be settled in the form
        of cash or Stock.  If the form of payment is cash, then the amount
        shall be calculated pursuant to subsection (c) of this Section 4.  If
        the form of payment is Stock, then the number of shares of Stock to be
        distributed shall be the largest whole number obtained by dividing the amount
        otherwise distributable in respect of such settlement by the Fair Market
        Value
        of a share of Stock on the date of exercise of the Stock Appreciation
        Right.  The value of fractional shares of Stock shall be paid in
        cash.

       

      (e)           
        Effect of Exercise
        of
        Right or Related Option.  If the related Incentive Stock Option
        is exercised in whole or in part, then the Stock Appreciation Right with
        respect
        to the Stock purchased pursuant to such exercise (but not with respect to
        any
        unpurchased Stock) shall be terminated as of the date of exercise if such
        Stock
        Appreciation Right is not exercised on such date.

       

      (f)           
        Non-transferability.  A
        Stock Appreciation Right shall not be transferable or assignable by the Grantee
        other than by will or the laws of descent and distribution, and shall be
        exercisable during the Grantee's lifetime only by the Grantee.

       

      (g)           
        Termination of
        Employment.  If the Grantee ceases to be an Employee of the
        Company for any reason, each outstanding Stock Appreciation Right shall be
        exercisable for such period and to such extent as the related Incentive Stock
        Option or portion thereof.

       

       

      III.  NON-QUALIFIED
        STOCK OPTION PROVISIONS

       

      1.           
        Granting of Stock
        Options.

       

      (a)           
        Officers, Employees, Directors, and Consultants shall be eligible to receive
        Non-Qualified Stock Options under the Plan.

       


      
        
          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

        

      


      (b)           
        The Committee shall determine and designate from time to time those officers,
        Employees, Directors, and Consultants who are to be granted Non-Qualified
        Stock
        Options and the amount subject to each Non-Qualified Stock Option.

       

      (c)           
        The Committee may grant at any time new Non-Qualified Stock Options to an
        Employee, Director, or Consultant who has previously received Non-Qualified
        Stock Options or other Stock Options, whether such prior Non-Qualified Stock
        Options or other Stock Options are still outstanding, have previously been
        exercised in whole or in part, or are canceled in connection with the issuance
        of new Non-Qualified Stock Options.

       

      (d)           
        The Committee shall determine the purchase price of each share of Stock subject
        to a Non-Qualified Stock Option. Such price shall not be less than 100% of
        the
        Fair Market Value of such Stock on the date the Non-Qualified Stock Option
        is
        granted.

       

      (e)           
        The Committee, in its sole discretion, shall determine whether any particular
        Non-Qualified Stock Option shall become exercisable in one or more installments,
        specify the installment dates, and, within the limitations herein provided,
        determine the total period during which the Non-Qualified Stock Option is
        exercisable. Further, the Committee may make such other provisions as may
        appear
        generally acceptable or desirable to the Committee, including providing for
        a
        cashless exercise provision or the extension of a Non-Qualified Stock Option,
        provided that such extension does not extend the option beyond the period
        specified in paragraph (f) below.

       

      (f)           
        No Non-Qualified Stock Option shall be exercisable more than ten years from
        the
        date such option is granted.

       

      2.           
        Exercise of Stock
        Options.   The option price of a Non-Qualified Stock
        Option shall be payable on exercise of the Stock Option (i) in cash or by
        check, bank draft, or postal or express money order, (ii) by the surrender
        of Stock then owned by the Grantee, (iii) the proceeds of a loan from an
        independent broker-dealer whereby the loan is secured by the option or the
        stock
        to be received upon exercise, (iv) by a casless exercise if so granted by
        the Committee, or (v) any combination of the foregoing;
        provided, that each such method and time for payment and each such
        borrowing and terms and conditions of repayment shall then be permitted by
        and
        be in compliance with applicable law.  Shares of Stock so surrendered
        in accordance with clause (ii) or (iv) shall be valued at the Fair Market
        Value
        thereof on the date of exercise, surrender of such Stock to be evidenced
        by
        delivery of the certificate(s) representing such shares in such manner, and
        endorsed in such form, or accompanied by stock powers endorsed in such form,
        as
        the Committee may determine.

       

       3.           
        Termination of
        Relationship.

       

      (a)           
        If a Grantee's employment with the Company is terminated, a Director Grantee
        ceases to be a Director, or a Consultant Grantee ceases to be a Consultant,
        other than by reason of Disability or death, the terms of any then outstanding
        Non-Qualified Stock Option held by the Grantee shall extend for a period
        ending
        on the earlier of the date established by the Committee at the time of grant
        or
        three months after the Grantee's last date of employment or cessation of
        being a
        Director or Consultant, and such Stock Option shall be exercisable to the
        extent
        it was exercisable as of the date of termination of employment or cessation
        of
        being a Director or Consultant.

       

      (b)           
        If a Grantee's employment is terminated by reason of Disability, a Director
        Grantee ceases to be a Director by reason of Disability or a Consultant Grantee
        ceases to be a Consultant by reason of Disability, the term of any then
        outstanding Non-Qualified Stock Option held by the Grantee

       


      
        
          
          

        

        
          -
            7
            -

          
            

          

        

        
          
          

        

      


      shall
        extend for a period ending on the earlier of the date on which such Stock
        Option
        would otherwise expire or twelve months after the Grantee's last date of
        employment or cessation of being a Director or Consultant, and such Stock
        Option
        shall be exercisable to the extent it was exercisable as of such last date
        of
        employment or cessation of being a Director or Consultant.

       

      (c)           
        If a Grantee's employment is terminated by reason of death, a Director Grantee
        ceases to be a Director by reason of death or a Consultant Grantee ceases
        to be
        a Consultant by reason of death, the representative of his estate or
        beneficiaries thereof to whom the Stock Option has been transferred shall
        have
        the right during the period ending on the earlier of the date on which such
        Stock Option would otherwise expire or twelve months following his death
        to
        exercise any then outstanding Non-Qualified Stock Options in whole or in
        part.
        If a Grantee dies without having fully exercised any then outstanding
        Non-Qualified Stock Options, the representative of his estate or beneficiaries
        thereof to whom the Stock Option has been transferred shall have the right
        to
        exercise such Stock Options in whole or in part.

       

      4.           
        Stock Appreciation
        Rights

       

      (a)           
        Grant.  Stock
        Appreciation Rights related to all or any portion of a Non-Qualified Stock
        Option may be granted by the Committee to any Grantee in connection with
        the
        grant of a Non-Qualified Stock Option or unexercised portion thereof held
        by the
        Grantee at any time and from time to time during the term
        thereof.  Each Stock Appreciation Right shall be granted at least at
        Fair Market Value on the date of grant and be subject to such terms and
        conditions not inconsistent with the provisions of this Part III as shall
        be
        determined by the Committee and included in the agreement relating to such
        Stock
        Appreciation Right, subject in any event, however, to the following terms
        and
        conditions of this Section 4.  Each Stock Appreciation Right may
        include limitations as to the time when such Stock Appreciation Right becomes
        exercisable and when it ceases to be exercisable that are more restrictive
        than
        the limitations on the exercise of the Non-Qualified Stock Option to which
        it
        relates.

       

      (b)           
        Exercise.  No
        Stock Appreciation Right shall be exercisable with respect to such related
        Non-Qualified Stock Option or portion thereof unless such Non-Qualified Stock
        Option or portion shall itself be exercisable at that time.  A Stock
        Appreciation Right shall be exercised only upon surrender of the related
        Non-Qualified Stock Option or portion thereof in respect of which the Stock
        Appreciation Right is then being exercised.

       

      (c)           
        Amount of
        Payment.  On exercise of a Stock Appreciation Right, a Grantee
        shall be entitled to receive an amount equal to the product of (i) the amount
        by
        which the Fair Market Value of a share of Stock on the date of exercise of
        the
        Stock Appreciation Right exceeds the option price per share specified in
        the
        related Non-Qualified Stock Option and (ii) the number of shares of Stock
        in
        respect of which the Stock Appreciation Right shall have been
        exercised.

       

      (d)           
        Form of
        Payment.  Stock Appreciation Rights may be settled in the form
        of cash or Stock.  If the form of payment is cash, then the amount
        shall be calculated pursuant to subsection (c) of this Section 4.  If
        the form of payment is Stock, then the number of shares of Stock to be
        distributed shall be the largest whole number obtained by dividing the amount
        otherwise distributable in respect of such settlement by the Fair Market
        Value
        of a share of Stock on the date of exercise of the Stock Appreciation
        Right.  The value of fractional shares of Stock shall be paid in
        cash.

       

      (e)           
        Effect of Exercise
        of
        Right or Related Option.  If the related Non-Qualified Stock
        Option is exercised in whole or in part, then the Stock Appreciation Right
        with
        respect to the Stock purchased pursuant to such exercise (but not with respect
        to any unpurchased Stock) shall be terminated as of the date of exercise
        if such
        Stock Appreciation Right is not exercised on such date.

       


      
        
          
          

        

        
          -
            8
            -

          
            

          

        

        
          
          

        

      


      (f)           
        Non-transferability.  A
        Stock Appreciation Right shall not be transferable or assignable by the Grantee
        other than by will or the laws of descent and distribution, and shall be
        exercisable during the Grantee's lifetime only by the Grantee.

       

      (g)           
        Termination of
        Employment.  If the Grantee ceases to be an officer, Employee,
        Director, or Consultant of the Company for any reason, each outstanding Stock
        Appreciation Right shall be exercisable for such period and to such extent
        as
        the related Non-Qualified Stock Option or portion thereof.

       

       

      IV.  RESTRICTED
        STOCK AWARDS

       

      1.           
        Grant of Restricted
        Stock.

       

      (a)  Officers,
        Employees,
        Directors and Consultants shall be eligible to receive grants of Restricted
        Stock under the Plan.

       

      (b)           
        The Committee shall determine and designate from time to time those officers,
        Employees, Directors and Consultants who are to be granted Restricted Stock
        and
        the number of shares of Stock subject to such Stock Award.

       

      (c)           
        The Committee, in its sole discretion, shall make such terms and conditions
        applicable to the grant of Restricted Stock as may appear generally acceptable
        or desirable to the Committee.

       

      2.           
        Termination of
        Relationship.

       

      (a)           
        If a Grantee's employment with the Company, a Director Grantee ceases to
        be a
        Director, or a Consultant Grantee ceases to be a Consultant, prior to the
        lapse
        of any restrictions applicable to the Restricted Stock such Stock shall be
        forfeited and the Grantee shall return the certificates representing such
        Stock
        to the Company.

       

      (b)           
        If the restrictions applicable to a grant of Restricted Stock shall lapse,
        the
        Grantee shall hold such Stock free and clear of all such restrictions except
        as
        otherwise provided in the Plan.

       

       

      V.  UNRESTRICTED
        STOCK AWARDS

       

      1.           
        Grant of Unrestricted
        Stock.

       

      (a)           
        Officers, Employees, Directors, and Consultants shall be eligible to receive
        grants of Unrestricted Stock under the Plan.

       

      (b)           
        The Committee shall determine and designate from time to time those officers,
        Employees, Directors and Consultants who are to be granted Unrestricted Stock
        and number of shares of Stock subject to such Stock Award.

       

      2.           
        Issuance of
        Stock.  The Grantee shall hold Stock issued pursuant to an
        Unrestricted Stock award free and clear of all restrictions except as otherwise
        provided in the Plan.

       


      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      


      


       

       

      VI.  GENERAL
        PROVISIONS

       

       

      1.Substitution
        of
        Options.  In the event of a corporate merger or consolidation,
        or the acquisition by the Company of property or stock of an acquired
        corporation or any reorganization or other transaction qualifying under Section
        424 of the Code, the Committee may, in accordance with the provisions of
        that
        Section, substitute Stock Options, Stock Awards and Stock Appreciation Rights
        under this Plan for Stock Options, Stock Awards and Stock Appreciation Rights
        under the plan of the acquired corporation provided (i) the excess of the
        aggregate fair market value of the shares of Stock subject to a Stock Option
        immediately after the substitution over the aggregate option price of such
        Stock
        is not more than the similar excess immediately before such substitution
        and
        (ii) the new Stock Option does not give the Grantee additional benefits,
        including any extension of the exercise period.   Alternatively,
        the Committee may provide that each Stock Option, Stock Award and Stock
        Appreciation Right granted under the Plan shall terminate as of a date to
        be
        fixed by the Board; provided, that no
        less than thirty days written notice of the date so fixed shall be given
        to each
        holder, and each holder shall have the right, during the period of thirty
        days
        preceding such termination, to exercise the Stock Options, Stock Awards and
        Stock Appreciation Rights as to all or any part of the Stock covered thereby,
        including Stock as to which such Stock Options, Stock Awards and Stock
        Appreciation Rights would not otherwise be exercisable.

       

      2.           
        Adjustment
        Provisions.

       

      (a)           
        In the event that a dividend shall be declared upon the Stock payable in
        shares
        of the Company's common stock, the number of shares of Stock then subject
        to any
        Stock Option or Stock Award outstanding under the Plan and the number of
        shares
        reserved for the grant of Stock Options or Stock Awards pursuant to the Plan
        shall be adjusted by adding to each such share the number of shares which
        would
        be distributable in respect thereof if such shares had been outstanding on
        the
        date fixed for determining the shareholders of the Company entitled to receive
        such share dividend.

       

      (b)           
        If the shares of Stock outstanding are changed into or exchanged for a different
        number or class or other securities of the Company or of another corporation,
        whether through split-up, merger, consolidation, reorganization,
        reclassification or recapitalization then there shall be substituted for
        each
        share of Stock subject to any such Stock Option or Stock Award and for each
        share of Stock reserved for the grant of Stock Options or Stock Awards pursuant
        to the Plan the number and kind of shares or other securities into which
        each
        outstanding share of Stock shall have been so changed or for which each share
        shall have been exchanged.

       

      (c)           
        In the event there shall be any change, other than as specified above in
        this
        Section 2, in the number or kind of outstanding shares of Stock or of any
        shares
        or other securities into which such shares shall have been changed or for
        which
        they shall have been exchanged, then if the Board shall, in its sole discretion,
        determine that such change equitably requires an adjustment in the number
        or
        kind of shares theretofore reserved for the grant of Stock Options or Stock
        Awards pursuant to the Plan and of the shares then subject to Stock Options
        or
        Stock Awards, such adjustment shall be made by the Board and shall be effective
        and binding for all purposes of the Plan and of each Stock Option and Stock
        Award outstanding thereunder.

       


      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      


      


       

      (d)           
        Each Stock Appreciation Right outstanding at the time of any adjustment pursuant
        to this Section 2 and the number of outstanding Stock Appreciation Rights,
        shall
        be adjusted, changed or exchanged in the same manner as related Stock
        Options.

       

      (e)           
        In the case of any such substitution or adjustment as provided for in this
        Section 2, the option price set forth in each outstanding Stock Option for
        each
        share covered thereby prior to such substitution or adjustment will be the
        option price for all shares or other securities which shall have
        been

       

      substituted
        for such share or to which such share shall have been adjusted pursuant to
        this
        Section 2, and the price per share shall be adjusted accordingly.

       

      (f)           
        No adjustment or substitution provided for in this Section 2 shall require
        the
        Company to sell a fractional share, and the total substitution or adjustment
        with respect to each outstanding Stock Option shall be limited
        accordingly.

       

      (g)           
        Upon any adjustment made pursuant to this Section 2 the Company will, upon
        request, deliver to the Grantee a certificate setting forth the option price
        thereafter in effect and the number and kind of shares or other securities
        thereafter purchasable on the exercise of such Stock Option.

       

      3.           
        General.

       

      (a)           
        Each Stock Option, Stock Award and Stock Appreciation Right shall be evidenced
        by a written instrument containing such terms and conditions, not inconsistent
        with this Plan, as the Committee shall approve.

       

      (b)           
        The granting of a Stock Option, Stock Award or Stock Appreciation Right in
        any
        year shall not give the Grantee any right to similar grants in future years
        or
        any right to be retained in the employ of the Company, and all Employees
        shall
        remain subject to discharge to the same extent as if the Plan were not in
        effect.

       

      (c)           
        No officer, Employee, Director, or Consultant and no beneficiary or other
        person
        claiming under or through him, shall have any right, title or interest by
        reason
        of any Stock Option or any Stock Award to any particular assets of the Company,
        or any shares of Stock allocated or reserved for the purposes of the Plan
        or
        subject to any Stock Option or any Stock Award except as set forth herein.
        The
        Company shall not be required to establish any fund or make any other
        segregation of assets to assure the payment of any Stock Option or Stock
        Award.

       

      (d)           
        No right under the Plan shall be subject to anticipation, sale, assignment,
        pledge, encumbrance, or charge except by will or the laws of descent and
        distribution, and a Stock Option shall be exercisable during the Grantee's
        lifetime only by the Grantee or his conservator.

       

      (e)           
        Notwithstanding any other provision of this Plan or agreements made pursuant
        thereto, the Company's obligation to issue or deliver any certificate or
        certificates for shares of Stock under a Stock Option or Stock Award, and
        the
        transferability of Stock acquired by exercise of a Stock Option or grant
        of a
        Stock Award, shall be subject to all of the following conditions:

       


      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      


      


       

      (i)           
        Any registration or other qualification of such shares under any state or
        federal law or regulation, or the maintaining in effect of any such registration
        or other qualification which the Board shall, in its absolute discretion
        upon
        the advice of counsel, deem necessary or advisable; and

       

      (ii)           
        The obtaining of any other consent, approval, or permit from any state or
        federal governmental agency which the Board shall, in its absolute discretion
        upon the advice of counsel, determine to be necessary or advisable.

       

      (f)           
        All payments to Grantees or to their legal representatives shall be subject
        to
        any applicable tax, community property, or other statutes or regulations
        of the
        United States or of any state or country having jurisdiction over such payments.
        The Grantee may be required to pay to the Company the amount of any withholding
        taxes which the Company is required to withhold with respect to a Stock Option
        or its exercise or a Stock Award. In the event that such payment is not made
        when due, the Company shall have the right to deduct, to the extent permitted
        by
        law, from any payment of any kind otherwise due to such person all or part
        of
        the amount required to be withheld.

       

      (g)           
        In the case of a grant of a Stock Option or Stock Award to any Employee of
        a
        Subsidiary, the Company may, if the Committee so directs, issue or transfer
        the
        shares, if any, covered by the Stock Option or Stock Award to such Subsidiary,
        for such lawful consideration as the Committee may specify, upon the condition
        or understanding that such Subsidiary will transfer the shares to the Employee
        in accordance with the terms of the Stock Option or Stock Award specified
        by the
        Committee pursuant to the provisions of the Plan.

       

      (h)           
        A Grantee entitled to Stock as a result of the exercise of a Stock Option
        or
        grant of a Stock Award shall not be deemed for any purpose to be, or have
        rights
        as, a shareholder of the Company by virtue of such exercise, except to the
        extent that a stock certificate is issued therefor and then only from the
        date
        such certificate is issued. No adjustments shall be made for dividends or
        distributions or other rights for which the record date is prior to the date
        such stock certificate is issued. The Company shall issue any stock certificates
        required to be issued in connection with the exercise of a Stock Option with
        reasonable promptness after such exercise.

       

      (i)           
        The grant or exercise of Stock Options granted under the Plan or the grant
        of a
        Stock Award under the Plan shall be subject to, and shall in all respects
        comply
        with, applicable law relating to such grant or exercise, or to the number
        of
        shares of Stock which may be beneficially owned or held by any
        Grantee.

       

      (j)       The
        Company intends that the Plan shall comply with the requirements of Rule
        16b-3
        (the “Rule”) under the Securities Exchange Act of 1934, as amended, during the
        term of this Plan. Should any additional provisions be necessary for the
        Plan to
        comply with the requirements of the Rule, the Board may amend this Plan to
        add
        to or modify the provisions of this Plan accordingly.

       

      (k)           
        The Company intends that the Plan shall comply with the requirements of Section
        409A of the Code, to the extent applicable. Should any changes to the Plan
        be
        necessary for the Plan to comply with the requirements of Code Section 409A
        the
        Board may amend this Plan to add to or modify the provisions of this Plan
        accordingly.

       


      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

        

      


      


       

      (l)           
        The Company will seek stockholder approval in the manner and to the degree
        required under applicable laws. If the Company fails to obtain any required
        stockholder approval of the Plan within twelve (12) months after the date
        this
        Plan is adopted by the Board, pursuant to Section 422 of the Code, any Option
        granted as an Incentive Stock Option at any time under the Plan will not
        qualify
        as an Incentive Stock Option within the meaning of the Code and will be deemed
        to be a Non-Qualified Stock Option.

      


      [End
        of
        Document]