Unassociated Document


    Exhibit
      4.1

     

    DEFENSE
      SOLUTIONS HOLDING, INC.

     

    EQUITY
      INCENTIVE PLAN

     

    Section
      1. Purpose;
      Definitions.
      The
      purposes of the Defense Solutions Holding, Inc. Equity Incentive Plan (the
      “Plan”)
      are
      to: (a) enable Defense Solutions Holding, Inc. (the “Company”)
      and
      its respective affiliated companies to recruit and retain highly qualified
      personnel; (b) provide those employees, directors and consultants of the Company
      with an incentive for productivity; and (c) provide those personnel with an
      opportunity to share in the growth and value of the Company.

     

    For
      purposes of the Plan, the following initially capitalized words and phrases
      will
      be defined as set forth below, unless the context clearly requires a different
      meaning:

     

    (a) “Affiliate”
means,
      with respect to a Person, a Person that directly or indirectly controls, or
      is
      controlled by, or is under common control with such Person.

     

    (b) “Award”
means
      a
      grant of Options or Restricted Stock pursuant to the provisions of the
      Plan.

     

    (c) “Award
      Agreement”
means,
      with respect to any particular Award, the written document that sets forth
      the
      terms of that particular Award.

     

    (d) “Board”
means
      the Board of Directors of the Company, as constituted from time to time;
provided,
      however,
      that if
      the Board appoints a Committee to perform some or all of the Board’s
      administrative functions hereunder pursuant to Section
      2,
      references in the Plan to the “Board” will be deemed to also refer to that
      Committee in connection with matters to be performed by that
      Committee.

     

    (e) “Cause”
means
      (i) conviction of, or the entry of a plea of guilty or no contest to, a felony
      or any other crime that causes the Company or its Affiliates public disgrace
      or
      disrepute, or adversely affects the Company’s or its Affiliates’ operations or
      financial performance or the relationship the Company has with its Affiliates;
      (ii) gross negligence or willful misconduct with respect to the Company or
      any
      of its Affiliates, including, without limitation fraud, embezzlement, theft
      or
      proven dishonesty in the course of his employment; (iii) alcohol abuse or use
      of
      controlled drugs other than in accordance with a physician’s prescription; (iv)
      refusal, failure or inability to perform any material obligation or fulfill
      any
      duty (other than any duty or obligation of the type described in clause (vi)
      below) to the Company (other than due to a Disability), which failure, refusal
      or inability is not cured within 10 days after delivery of notice thereof;
      (v)
      material breach of any agreement with or duty owed to the Company or any of
      its
      Affiliates; or (vi) any breach of any obligation or duty to the Company or
      any
      of its Affiliates (whether arising by statute, common law, contract or
      otherwise) relating to confidentiality, noncompetition, nonsolicitation or
      proprietary rights. Notwithstanding the foregoing, if a Participant and the
      Company (or any of its Affiliates have entered into an employment agreement,
      consulting agreement or other similar agreement that specifically defines
“cause,” then with respect to such Participant, “Cause” shall have the meaning
      defined in that employment agreement, consulting agreement or other
      agreement.

     

    
      
         

      

      
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    (f) “Change
      in Control”
means,
      with respect to any entity: (i) the sale, transfer, assignment or other
      disposition (including by merger or consolidation, but excluding any sales
      by
      shareholders or other equity holders made as part of an underwritten public
      offering of the common stock of the entity) by shareholders of the entity,
      in
      one transaction or a series of related transactions, of more than 50% of the
      voting power represented by the then outstanding capital stock or other equity
      interests of the entity to one or more Persons, (ii) the sale of substantially
      all the assets of the entity (other than a transfer of financial assets made
      in
      the ordinary course of business for the purpose of securitization), or (iii)
      the
      liquidation or dissolution of the entity.

     

    (g) “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and any
      successor thereto.

     

    (h) “Committee”
means
      a
      committee appointed by the Board in accordance with Section
      2
      of the
      Plan.

     

    (i) “Director”
means
      a
      member of the Board. 

     

    (j) “Disability”
means
      a
      condition rendering a Participant Disabled.

     

    (k) “Disabled”
will
      have the same meaning as set forth in Section 22(e)(3) of the Code.

     

    (l) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    (m) “Fair
      Market Value”
means,
      with respect to a Share, as of any date: (i) in the case of any determination
      thereof other than in connection with a Change in Control (x) if the Shares
      are
      not publicly traded, the value of such Shares on that date, as determined by
      the
      Board after using a valuation method that complies with regulations for
      determining fair market value as promulgated by the Internal Revenue Service;
      or
      (y) if the Shares are publicly traded, the last sale price of a Share on the
      trading day immediately prior to the date of determination of fair market value
      or, if no sale is publicly reported on such trading day, the last sale price
      of
      a Share prior to the date of determination of fair market value; and (ii) in
      the
      case of any determination thereof in connection with a Change in Control, the
      value of a Share attributable to such Shares in the transaction giving rise
      to
      the such Change in Control or, if no such value is so attributable, the value
      as
      determined by the Board after using a valuation method that complies with
      regulations for determining fair market value as promulgated by the Internal
      Revenue Service.

     

    (n) “Incentive
      Stock Option”
means
      any Option intended to be and designated as an “Incentive Stock Option” within
      the meaning of Section 422 of the Code.

     

    
      
         

      

      
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    (o) “Non-Employee
      Director”
will
      have the meaning set forth in Rule 16b-3(b)(3)(i) promulgated by the Securities
      and Exchange Commission under the Exchange Act, or any successor definition
      adopted by the Securities and Exchange Commission; provided,
      however,
      that
      the Board or the Committee may, to the extent that it deems necessary to comply
      with Section 162(m) of the Code or regulations thereunder, require that each
      “Non-Employee Director” also be an “outside director” as that term is defined in
      regulations under Section 162(m).

     

    (p) “Non-Qualified
      Stock Option”
means
      any Option that is not an Incentive Stock Option.

     

    (q) “Option”
means
      any option to purchase Shares (including Restricted Stock, if the Board so
      determines) granted pursuant to Section
      5
      hereof.

     

    (r) “Participant”
means
      an employee, consultant, Director, or other service provider of or to the
      Company or any of its respective Affiliates to whom an Award is
      granted.

     

    (s) “Person”
means
      an individual, partnership, corporation, limited liability company, trust,
      joint
      venture, unincorporated association, or other entity or
      association.

     

    (t) “Restricted
      Stock”
means
      Shares that are subject to restrictions pursuant to Section
      7
      hereof.

     

    (u) “Shares”
means
      shares of the Company’s common stock, par value $0.001 per share, subject to
      substitution or adjustment as provided in Section
      3(c)
      hereof.

     

    (v) “Shareholders
      Agreement”
means
      any Shareholders Agreement, Voting Agreement or Right of First Refusal and
      Bring
      Along Agreement to be executed and delivered by a Participant at the time of
      any
      event of an Award or upon the exercise of any Options subject to an Award,
      as
      determined by the Board, and in such form from time to time prescribed by the
      Board, as amended from time to time.

     

    (w) “Subsidiary”
means,
      in respect of the Company, a subsidiary company, whether now or hereafter
      existing, as defined in Sections 424(f) and (g) of the Code.

     

    Section
      2. Administration.
      The
      Plan
      will be administered by the Board; provided,
      however,
      that
      the Board may at any time appoint a Committee to perform some or all of the
      Board’s administrative functions hereunder; and
      provided further,
      that
      the authority of any Committee appointed pursuant to this Section
      2
      will be
      subject to such terms and conditions as the Board may prescribe and will be
      coextensive with, and not in lieu of, the authority of the Board
      hereunder.

     

    Subject
      to the requirements of the Company’s by-laws and certificate of incorporation
      and any other agreement that governs the appointment of Board committees, any
      Committee established under this Section
      2
      will be
      composed of not fewer than two members, each of whom will serve for such period
      of time as the Board determines; provided, however, that if the Company has
      a
      class of securities required to be registered under Section 12 of the Exchange
      Act, all members of any Committee established pursuant to this Section
      2
      will be
      Non-Employee Directors. From time to time the Board may increase the size of
      the
      Committee and appoint additional members thereto, remove members (with or
      without cause) and appoint new members in substitution therefor, fill vacancies
      however caused, or remove all members of the Committee and thereafter directly
      administer the Plan.

     

    
      
         

      

      
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    Directors
      who are eligible for Awards or have received Awards may vote on any matters
      affecting the administration of the Plan or the grant of Awards, except that
      no
      such member will act upon the grant of an Award to himself or herself, but
      any
      such member may be counted in determining the existence of a quorum at any
      meeting of the Board during which action is taken with respect to the grant
      of
      Awards to himself or herself.

     

    The
      Board
      will have full authority to grant Awards under this Plan. In particular, subject
      to the terms of the Plan, the Board will have the authority:

     

    (a) to
      select
      the persons to whom Awards may from time to time be granted hereunder
      (consistent with the eligibility conditions set forth in Section
      4);

     

    (b) to
      determine the type of Award to be granted to any person hereunder;

     

    (c) to
      determine the number and type of Shares, if any, to be covered by each Award
      (consistent with the provisions of Section
      3
      regarding the maximum number of Shares subject to the Plan);

     

    (d) to
      establish the terms and conditions of each Award Agreement;

     

    (e) to
      determine whether and under what circumstances an Option may be exercised
      without a payment of cash under Section
      5(d);
      and


     

    (f) to
      require execution of a Shareholders Agreement which may include, among other
      things, restrictions on resale of Shares, a requirement to sell Shares in
      connection with a Change in Control or other similar transactions, and may
      impose a limitation on marketability in connection with a public offering of
      the
      Company’s stock.

     

    The
      Board
      will have the authority to adopt, alter and repeal such administrative rules,
      guidelines and practices governing the Plan as it, from time to time, deems
      advisable; to establish the terms of each Award Agreement; to interpret the
      terms and provisions of the Plan and any Award issued under the Plan (and any
      Award Agreement); and to otherwise supervise the administration of the Plan.
      The
      Board may correct any defect, supply any omission or reconcile any inconsistency
      in the Plan or in any Award in the manner and to the extent it deems necessary
      to carry out the intent of the Plan.

     

    
      
         

      

      
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    All
      decisions made by the Board pursuant to the provisions of the Plan will be
      final
      and binding on all persons, including the Company and Participants. No Director
      will be liable for any good faith determination, act or omission in connection
      with the Plan or any Award.

     

    Section
      3. Shares
      Subject to the Plan.

     

    (a) Shares
      Subject to the Plan.
      The
      Shares to be subject to Options or Restricted Stock under the Plan will be
      authorized and unissued Shares of the Company, whether or not previously issued
      and subsequently acquired by the Company. The maximum number of Shares that
      may
      be subject to Options or Restricted Stock under the Plan is 13,800,000. The
      Company will reserve for the purposes of the Plan, out of its authorized and
      unissued Shares, such number of Shares.

     

    (b) Effect
      of the Expiration or Termination of Awards.
      If and
      to the extent that an Option expires, terminates or is canceled or forfeited
      for
      any reason without having been exercised in full, the Shares associated with
      that Option will again become available for grant under the Plan. Similarly,
      if
      any Restricted Share is canceled, forfeited or repurchased for any reason,
      or if
      any Share is withheld pursuant to Section
      9(d)
      in
      settlement of a tax withholding obligation associated with an Award, that Share
      will again become available for grant under the Plan. If any Share is received
      in satisfaction of the exercise price payable upon exercise of an Option, that
      Share will become available for grant under the Plan.

     

    (c) Other
      Adjustment.
      In the
      event of any recapitalization, stock split or combination, stock dividend or
      other similar event or transaction affecting the Shares, equitable substitutions
      or adjustments may be made by the Board, in its sole and absolute discretion,
      to
      the aggregate number, type and issuer of the securities reserved for issuance
      under the Plan, to the number, type and issuer of Shares subject to outstanding
      Options, to the exercise price of outstanding Options, and to the number, type
      and issuer of Restricted Stock.

     

    (d) Change
      in Control.
      Notwithstanding anything to the contrary set forth in the Plan, upon or in
      anticipation of any Change in Control of the Company or any of its Affiliates,
      the Board may, in its sole and absolute discretion and without the need for
      the
      consent of any Participant, take one or more of the following actions contingent
      upon the occurrence of that Change in Control: (i) cause any or all outstanding
      Options to become vested and immediately exercisable, in whole or in part;
      (ii)
      cause any or all outstanding Restricted Stock to become non-forfeitable, in
      whole or in part; (iii) cancel any Option in exchange for an option to purchase
      common stock of any successor corporation or its parent in a manner consistent
      with the requirements of Treas. Reg. § 1.424-1 (a)(4)(i) (notwithstanding the
      fact that the original Option may never have been intended to satisfy the
      requirements for treatment as an Incentive Stock Option), (iv) cancel any
      Restricted Stock in exchange for restricted shares of the common stock of any
      successor corporation, (v) redeem any Restricted Stock for cash and/or other
      substitute consideration with a value equal to the Fair Market Value of an
      unrestricted Share on the date of the Change in Control; or (vi) cancel any
      Option held by a Participant affected by the Change in Control in exchange
      for
      cash and/or other substitute consideration with a value equal to (A) the number
      of Shares subject to that Option, multiplied by (B) the difference, if any,
      between the Fair Market Value per Share on the date of the Change in Control
      and
      the exercise price of that Option; provided, that if the Fair Market Value
      per
      Share on the date of the Change in Control does not exceed the exercise price
      of
      any such Option, the Board may cancel that Option without any payment of
      consideration therefor.

     

    
      
         

      

      
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    For
      purposes of paragraph (d)(iii) above, the exchange of an Option issued under
      this Plan for an option to purchase common stock of any successor corporation
      or
      its parent shall be permitted only to the extent that the ratio of the exercise
      price to the fair market value of the shares subject to the Option immediately
      after the substitution or assumption is not greater than the ratio of the
      exercise price to the fair market value of the shares subject to the Option
      immediately before the substitution or assumption. 

     

    Section
      4. Eligibility.
      Employees,
      Directors, consultants, and other individuals who provide services to the
      Company or its Affiliates are eligible to be granted Awards under the Plan.
      Persons who are not employees of the Company or a Subsidiary are not eligible
      to
      be granted Incentive Stock Options but are eligible to be granted other types
      of
      Awards.

     

    Section
      5. Options.
      Options
      granted under the Plan may be of two types: (i) Incentive Stock Options or
      (ii)
      Non-Qualified Stock Options. Any Option granted under the Plan will be in such
      form as the Board may at the time of such grant approve. Without limiting the
      generality of Section
      3(a),
      any
      number of the maximum number of Shares provided for in Section
      3(a)
      may be
      subject to Incentive Stock Options or Non-Qualified Stock Options, or any
      combination thereof.

     

    The
      Award
      Agreement evidencing any Option will incorporate the following terms and
      conditions and will contain such additional terms and conditions, not
      inconsistent with the terms of the Plan, as the Board deems appropriate in
      its
      sole and absolute discretion:

     

    (a) Option
      Price.
      The
      exercise price per Share purchasable under an Incentive Stock Option or a
      Non-Qualified Stock Option will be not less than 100% of the Fair Market Value
      of the Share on the date of the grant. However, any Incentive Stock Option
      granted to any Participant who, at the time the Option is granted, owns more
      than 10% of the voting power of all classes of shares of the Company or of
      a
      Subsidiary will have an exercise price per Share of not less than 110% of Fair
      Market Value per Share on the date of the grant.

     

    (b) Option
      Term.
      The
      term of each Option will be fixed by the Board, but no Incentive Stock Option
      will be exercisable more than 10 years after the date the Option is granted.
      However, any Incentive Stock Option granted to any Participant who, at the
      time
      such Option is granted, owns more than 10% of the voting power of all classes
      of
      shares of the Company or of a Subsidiary may not have a term of more than five
      years. No Option may be exercised by any person after expiration of the term
      of
      the Option.

     

    (c) Exercisability.
      Options
      will vest and be exercisable at such time or times and subject to such terms
      and
      conditions as determined by the Board at the time of grant. If the Board
      provides, in its discretion, that any Option is exercisable only in
      installments, the Board may waive such installment exercise provisions at any
      time at or after grant, in whole or in part, based on such factors as the Board
      determines, in its sole and absolute discretion.

     

    
      
         

      

      
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    (d) Method
      of Exercise.
      Subject
      to the exercisability provisions of Section
      5(c)
      and the
      termination provisions set forth in Section
      6,
      Options
      may be exercised in whole or in part at any time and from time to time during
      the term of the Option, by the delivery of written notice of exercise by the
      Participant to the Company specifying the number of Shares to be purchased.
      Such
      notice will be accompanied by payment in full of the purchase price, either
      by
      certified or bank check, or such other means as the Board may accept. As
      determined by the Board, in its sole discretion, at or after grant, payment
      in
      full or in part of the exercise price of an Option may be made in the form
      of
      previously acquired Shares based on the Fair Market Value of the Shares on
      the
      date the Option is exercised; provided,
      however,
      that, in
      the case of an Incentive Stock Option, the right to make a payment in the form
      of previously acquired Shares may be authorized only at the time the Option
      is
      granted.

     

    No
      Shares
      will be issued upon exercise of an Option until full payment therefor has been
      made. A Participant will not have the right to distributions or dividends or
      any
      other rights of a shareholder with respect to Shares subject to the Option
      until
      the Participant has given written notice of exercise, has paid in full for
      such
      Shares, and, if requested, has given the representation described in
Section
      9(a)
      hereof.

     

    (e) Incentive
      Stock Option Limitations.
      In the
      case of an Incentive Stock Option, the aggregate Fair Market Value (determined
      as of the time of grant) of the Shares with respect to which Incentive Stock
      Options are exercisable for the first time by the Participant during any
      calendar year under the Plan and/or any other plan of the Company or any
      Subsidiary will not exceed $100,000. For purposes of applying the foregoing
      limitation, Incentive Stock Options will be taken into account in the order
      granted. To the extent any Option does not meet such limitation, that Option
      will be treated for all purposes as a Non-Qualified Stock Option.

     

    (f) Termination
      of Service.
      Unless
      otherwise specified in the Award Agreement, Options will be subject to the
      terms
      of Section
      6
      with
      respect to exercise upon or following termination of employment or other
      service.

     

    (g) Transferability
      of Options.
      Except
      as may otherwise be specifically determined by the Board with respect to a
      particular Option, no Option will be transferable by the Participant other
      than
      by will or by the laws of descent and distribution, and all Options will be
      exercisable, during the Participant’s lifetime, only by the Participant or, in
      the event of his Disability, by his personal representative.

     

    Section
      6. Termination
      of Service.
      Unless
      otherwise specified with respect to a particular Option in the applicable Award
      Agreement, all Options will remain exercisable after termination of employment
      only to the extent specified in this Section
      6.

     

    
      
         

      

      
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    (a) Termination
      by Reason of Death.
      If a
      Participant’s service with the Company or any Affiliate terminates by reason of
      death, any Option held by such Participant may thereafter be exercised, to
      the
      extent then exercisable or on such accelerated basis as the Board may determine,
      at or after grant, by the legal representative of the estate or by the legatee
      of the Participant under the will of the Participant, for a period expiring
      on
      the earlier of (i) such time as may be specified by the Board at or after the
      time of grant, or (ii) if not specified by the Board, then 12 months from the
      date of death, or (iii) if sooner than the applicable period specified under
      (i)
      or (ii) above, then upon the expiration of the stated term of such
      Option.

     

    (b) Termination
      by Reason of Disability.
      If a
      Participant’s service with the Company or any Affiliate terminates by reason of
      Disability, any Option held by such Participant may thereafter be exercised
      by
      the Participant or his personal representative, to the extent it was exercisable
      at the time of termination, or on such accelerated basis as the Board may
      determine at or after grant, for a period expiring at the earlier of (i) such
      time as may be specified by the Board at or after the time of grant, or (ii)
      if
      not specified by the Board, then 12 months from the date of termination of
      service, or (iii) if sooner than the applicable period specified under (i)
      or
      (ii) above, then upon the expiration of the stated term of such
      Option.

     

    (c) Cause.
      If a
      Participant’s service with the Company or any Affiliate is terminated for Cause:
      (1) any Option not already exercised will be immediately and automatically
      forfeited as of the date of such termination, and (ii) any Shares for which
      the
      Company has not yet delivered share certificates will be immediately and
      automatically forfeited and the Company will refund to the Participant the
      Option exercise price paid for such Shares, if any.

     

    (d) Other
      Termination.
      If a
      Participant’s service with the Company or any Affiliate terminates for any
      reason other than death, Disability or Cause, any Option held by such
      Participant may thereafter be exercised by the Participant, to the extent it
      was
      exercisable at the time of such termination, or on such accelerated basis as
      the
      Board may determine at or after grant, for a period expiring at the earlier
      of
      (i) such time as may be specified by the Board at or after the time of grant,
      or
      (ii) if not specified by the Board, then 90 days from the date of termination
      of
      service, or (iii) if sooner than the applicable period specified under (i)
      or
      (ii) above, then upon the expiration of the stated term of such
      Option.

     

    Section
      7. Restricted
      Stock.

     

    (a) Issuance.
      Restricted Stock may be issued either alone or in conjunction with other Awards.
      The Board will determine the time or times within which Restricted Stock may
      be
      subject to forfeiture, and all other conditions of such Awards.

     

    (b) Awards
      and Certificates.
      The
      Award Agreement evidencing the grant of any Restricted Stock will contain such
      terms and conditions, not inconsistent with the terms of the Plan, as the Board
      deems appropriate in its sole and absolute discretion. The prospective recipient
      of an Award of Restricted Stock will not have any rights with respect to such
      Award, unless and until such recipient has delivered to the Company an executed
      Award Agreement and has otherwise complied with the applicable terms and
      conditions of such Award. The purchase price for Restricted Stock may, but
      need
      not, be zero.

     

    
      
         

      

      
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    A
      share
      certificate will be issued in connection with each Award of Restricted Stock.
      Such certificate will be registered in the name of the Participant receiving
      the
      Award, and will bear the following legend and/or any other legend required
      by
      this Plan, the Award Agreement, a Shareholders Agreement, or by applicable
      law:

     

    THE
      TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE
      SUBJECT TO THE TERMS AND CONDITIONS OF THE DEFENSE SOLUTIONS HOLDING, INC.
      EQUITY INCENTIVE PLAN AND AN AGREEMENT ENTERED INTO BETWEEN [THE PARTICIPANT]
      AND DEFENSE SOLUTIONS HOLDING, INC. (WHICH TERMS AND CONDITIONS MAY INCLUDE,
      WITHOUT LIMITATION, CERTAIN TRANSFER RESTRICTIONS, REPURCHASE RIGHTS AND
      FORFEITURE CONDITIONS). COPIES OF THAT PLAN AND AGREEMENT ARE ON FILE IN THE
      PRINCIPAL OFFICES OF DEFENSE SOLUTIONS HOLDING, INC. AND WILL BE MADE AVAILABLE
      TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY
      OF THE COMPANY.

     

    Share
      certificates evidencing Restricted Stock will be held in custody by the Company
      or in escrow by an escrow agent until the restrictions thereon have lapsed.
      As a
      condition to any Restricted Stock award, the Participant may be required to
      deliver to the Company a share power, endorsed in blank, relating to the Shares
      covered by such Award.

     

    (c) Restrictions
      and Conditions.
      The
      Restricted Stock awarded pursuant to this Section
      7
      will be
      subject to the following restrictions and conditions, and any other restrictions
      and conditions set forth in the Award Agreement.

     

    (i) During
      a
      period commencing with the date of an Award of Restricted Stock and ending
      at
      such time or times as specified by the Board (the “Restriction Period
      ”),
      the
      Participant will not be permitted to sell, transfer, pledge, assign or otherwise
      encumber Restricted Stock awarded under the Plan. The Board may condition the
      lapse of restrictions on Restricted Stock upon the continued employment or
      service of the recipient, the attainment of specified individual or corporate
      performance goals, or such other factors as the Board may determine, in its
      sole
      and absolute discretion.

     

    (ii) Except
      as
      provided in this Paragraph (ii) or Section
      7(c)(i),
      once the
      Participant has been issued a certificate or certificates for Restricted Stock,
      the Participant will have, with respect to the Restricted Stock, all of the
      rights of a shareholder of the Company, including the right to vote the Shares,
      and the right to receive any cash distributions or dividends. Any distributions
      or dividends paid in the form of securities with respect to Restricted Stock
      will be subject to the same terms and conditions as the Restricted Stock with
      respect to which they were paid, including, without limitation, the same
      Restriction Period.

     

    
      
         

      

      
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    (iii) Subject
      to the applicable provisions of the Award Agreement, if a Participant’s service
      with the Company and its Affiliates terminates prior to the expiration of the
      Restriction Period, all of that Participant’s Restricted Stock which then remain
      subject to forfeiture will then be forfeited automatically.

     

    (iv) If
      and
      when the Restriction Period expires without a prior forfeiture of the Restricted
      Stock subject to such Restriction Period (or if and when the restrictions
      applicable to Restricted Stock lapse pursuant to Sections
      3(d)),
      the
      certificates for such Shares will be replaced with new certificates, without
      the
      restrictive legends described in Section
      7(b)
      applicable to such lapsed restrictions, and such new certificates will be
      promptly delivered to the Participant, the Participant’s representative (if the
      Participant has suffered a Disability), or the Participant’s estate or heir (if
      the Participant has died).

     

    Section
      8. Amendments
      and Termination.
      The
      Board
      may amend, alter or discontinue the Plan at any time, but, except as otherwise
      provided in Section
      3(d)
      of the
      Plan, no amendment, alteration or discontinuation will be made which would
      impair the rights of a Participant with respect to an Award, without that
      Participant’s consent, or which, without the approval of such amendment within
      one year (365 days) of its adoption by the Board, by the Company’s shareholders
      in a manner consistent with Section 1.422-5 of the Treasury Regulations, would:
      (i) increase the total number of Shares reserved for the purposes of the Plan
      (except as otherwise provided in Section
      3(c)),
      or
      (ii) change the persons or class of persons eligible to receive
      Awards.

     

    Section
      9. General
      Provisions.

     

    (a) The
      Board
      may require each Participant to represent to and agree with the Company in
      writing that the Participant is acquiring securities of the Company for
      investment purposes and without a view to distribution thereof and as to such
      other matters as the Board believes are appropriate. The certificate evidencing
      any Award and any securities issued pursuant thereto may include any legend
      which the Board deems appropriate to reflect any restrictions on transfer and
      compliance with applicable securities laws.

     

    (b) All
      certificates for Shares or other securities delivered under the Plan will be
      subject to such share-transfer orders and other restrictions as the Board may
      deem advisable under the rules, regulations, and other requirements of the
      Securities Act of 1933, as amended, the Exchange Act, any stock exchange upon
      which the Shares are then listed, and any other applicable federal or state
      securities laws, and the Board may cause a legend or legends to be put on any
      such certificates to make appropriate reference to such
      restrictions.

     

    
      
         

      

      
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    (c) Nothing
      contained in the Plan will prevent the Board from adopting other or additional
      compensation arrangements, subject to shareholder approval if such approval
      is
      required; and such arrangements may be either generally applicable or applicable
      only in specific cases.

     

    (d) Neither
      the adoption of the Plan nor the execution of any document in connection with
      the Plan will (i) confer upon any employee of the Company or an Affiliate any
      right to continued employment or engagement with the Company or such Affiliate,
      or (ii) interfere in any way with the right of the Company or such Affiliate
      to
      terminate the employment of any of its employees at any time.

     

    (e) No
      later
      than the date as of which an amount first becomes includible in the gross income
      of the Participant for federal income tax purposes with respect to any Award
      under the Plan, the Participant will pay to the Company, or make arrangements
      satisfactory to the Board regarding the payment of, any federal, state or local
      taxes of any kind required by law to be withheld with respect to such amount.
      Unless otherwise determined by the Board, the minimum required withholding
      obligations may be settled with Shares, including Shares that are part of the
      Award that gives rise to the withholding requirement. However, any required
      withholding obligations may not be settled with Shares of Restricted Stock
      awarded under this Plan. 
      The
      obligations of the Company under the Plan will be conditioned on such payment
      or
      arrangements and the Company will, to the extent permitted by law, have the
      right to deduct any such Social Security contribution and taxes from any payment
      of any kind otherwise due to the Participant.

     

    Section
      10. Effective
      Date of Plan.
      Subject
      to the approval of the Plan by the Company’s shareholders within 12 months of
      the Plan’s adoption by the Board, the Plan will become effective on the date
      that it is adopted by the Board.

     

    Section
      11. Term
      of Plan.
      The
      Plan
      will continue in effect until terminated in accordance with Section
      8;
      provided,
      however,
      that no
      Incentive Stock Option will be granted hereunder on or after the 10th
      anniversary of the date of shareholder approval of the Plan (or, if the
      shareholders approve an amendment that increases the number of shares subject
      to
      the Plan, the 10th anniversary of the date of such approval); but
      provided further,
      that
      Incentive Stock Options granted prior to such 10th anniversary may extend beyond
      that date.

     

    Section
      12. Invalid
      Provisions.
      In
      the
      event that any provision of this Plan is found to be invalid or otherwise
      unenforceable under any applicable law, such invalidity or unenforceability
      will
      not be construed as rendering any other provisions contained herein as invalid
      or unenforceable, and all such other provisions will be given full force and
      effect to the same extent as though the invalid or unenforceable provision
      was
      not contained herein.

     

    Section
      13. Governing
      Law.
      The
      Plan
      and all Awards granted hereunder will be governed by and construed in accordance
      with the laws and judicial decisions of the State of Delaware, without regard
      to
      the application of the principles of conflicts of laws of Delaware or any other
      jurisdiction.

     

    
      
         

      

      
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    Section
      14. Board
      Action.
      Notwithstanding
      anything to the contrary set forth in the Plan, any and all actions of the
      Board
      or Committee, as the case may be, taken under or in connection with the Plan
      and
      any agreements, instruments, documents, certificates or other writings entered
      into, executed, granted, issued and/or delivered pursuant to the terms hereof,
      will be subject to and limited by any and all votes, consents, approvals,
      waivers or other actions of all or certain shareholders of the Company or other
      persons required by:

     

    (a) the
      Company’s Certificate of Incorporation (as the same may be amended and/or
      restated from time to time);

     

    (b) the
      Company’s Bylaws (as the same may be amended and/or restated from time to time);
      and

     

    (c) any
      other
      agreement, instrument, document or writing now or hereafter existing, between
      or
      among the Company and its shareholders or other persons (as the same may be
      amended from time to time).

     

    
      
         

      

      
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    Section
      15. Notices.
      Any
      notice to be given to the Company pursuant to the provisions of the Plan shall
      be given by registered or certified mail, postage prepaid, and, addressed,
      if to
      the Company to its principal executive office to the attention of its Chief
      Executive Officer (or such other person as the Company may designate in writing
      from time to time), and, if to a Participant, to the address given beneath
      his
      or her signature on his or her Award Agreement, or at such other address as
      such
      Participant may hereafter designate in writing to the Company. Any such notice
      shall he deemed given or delivered three days after the date of
      mailing.

     

         

    
      
         

      

      
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