exv10w1



 







Exhibit 10.1




SAFENET, INC.

2001 OMNIBUS STOCK PLAN




1. Establishment, Purpose and Types of Awards




     SafeNet, Inc. hereby amends and restates the SafeNet, Inc. 2001 Omnibus Stock Plan (the
“Plan”) to read as provided herein. The purpose of the Plan is to promote the long-term growth and
profitability of SafeNet, Inc. (the “Corporation”) by (i) providing key people with incentives to
improve stockholder value and to contribute to the growth and financial success of the Corporation,
and (ii) enabling the Corporation to attract, retain and reward the best available persons for
positions of substantial responsibility.



     The Plan permits the granting of stock options (including nonqualified stock options and
incentive stock options qualifying under Section 422 of the Code), stock appreciation rights
(including free-standing, tandem and limited stock appreciation rights), restricted or unrestricted
share awards, phantom stock, performance awards, or any combination of the foregoing (collectively,
“Awards”).



2. Definitions




     Under this Plan, except where the context otherwise indicates, the following definitions
apply:



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



     (b) “Change in Control” shall mean: (i) any sale, exchange or other disposition of substantially all of the
Corporation’s assets or over 50% of its Common Stock; or (ii) any merger, share exchange, consolidation or other
reorganization or business combination in which the Corporation is not the surviving or continuing corporation,
or in which the Corporation’s stockholders become entitled to receive cash, securities of the Corporation other
than voting common stock, or securities of another issuer.



     (c) “Code” shall mean the Internal Revenue Code of 1986, as amended, and any regulations issued there under.



     (d) “Committee” shall mean the Board or committee of Board members appointed pursuant to Section 3 of the Plan
to administer the Plan.



     (e) “Common Stock” shall mean shares of the Corporation’s common stock.



     (f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



     (g) “Fair Market Value” of a share of the Corporation’s Common Stock for any purpose on a particular date shall
be determined as follows: (1) if there is a public market for the Common Stock, the Fair Market Value per share
shall be the average of the bid and asked prices of the Common Stock for such day if the Common Stock is then
included for quotation on the NASDAQ Small-Cap Market or, the Fair Market Value per share shall be the closing
price of the Common Stock for such day if the Common Stock is then included on the NASDAQ National Market or
listed on the New York, American or Pacific Stock Exchange, or (2) if there is no public market for the Common
Stock, the Fair Market Value of the Common Stock shall be determined in good faith by the Board or Committee in
such manner as it may deem equitable for Plan purposes. The Board or the Committee may rely upon published
quotations in The Wall Street Journal or a comparable publication for purposes of the calculation of the Fair
Market Value per share as set forth above.



     (h) “Grant Agreement” shall mean a written agreement between the Corporation and a grantee memorializing the
terms and conditions of an Award granted pursuant to the Plan.



     (i) “Grant Date” shall mean the date on which the Committee formally acts to grant an Award to a grantee or such
other date as the Committee shall so designate at the time of taking such formal action.



     (j) “Parent” shall mean a corporation, whether now or hereafter
existing, within the meaning of the definition of “parent
corporation” provided in Section 424(e) of the Code, or any
successor thereto of similar import.



     (k) “Rule 16b-3” shall mean Rule 16b-3 as in effect under the
Exchange Act on the effective date of the Plan, or any successor
provision prescribing conditions necessary to exempt the issuance of
securities under the Plan (and further transactions in such
securities) from Section 16(b) of the Exchange Act.



     (l) “Subsidiary” and “subsidiaries” shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning
of the definition of “subsidiary corporation” provided in Section
424(f) of the Code, or any successor thereto of similar import.



 









 





3. Administration




     (a) Procedure. The Plan shall be administered by the Board. In the alternative, the Board may
appoint a Committee to administer the Plan consisting solely of two (2) or more members of the
Board who are “nonemployee directors” within the meaning of Rule 16b-3 and “outside directors”
within the meaning of Code Section 162(m). Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time, the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefore, fill vacancies, however caused, and remove all
members of the Committee and, thereafter, directly administer the Plan. In the event that the Board
is the administrator of the Plan in lieu of a Committee, the term “Committee” as used herein shall
be deemed to mean the Board.



     Members of the Board or Committee who are either eligible for Awards or have been granted
Awards may vote on any matters affecting the administration of the Plan or the grant of Awards
pursuant to the Plan.



     The Committee shall meet at such times and places and upon such notice as it may determine. A
majority of the Committee shall constitute a quorum. Any acts by the Committee may be taken at any
meeting at which a quorum is present and shall be by majority vote of those members present.
Additionally, any acts reduced to writing or approved in writing by all of the members of the
Committee shall be valid acts of the Committee.



     (b) Powers of the Committee. The Committee shall have all the powers vested in it by the terms
of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards
under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for
granting Awards. The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not limited to, the
authority to:




     (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted,




     (ii) determine the types of Awards to be granted,




     (iii) determine the number of shares to be covered by or used for reference purposes for each Award,




     (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Committee
shall deem appropriate,




     (v) modify, extend or renew outstanding Awards, provided that the Committee shall not reprice such
Awards or substitute new Awards for such Awards, and provided further that no such action shall be taken
with respect to any outstanding Award which would adversely affect the grantee without the grantee’s
consent,




     (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and
to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to
such Award, including, but not limited to, any restriction or condition with respect to the vesting or
exercisability of an Award following termination of any grantee’s employment, and




     (vii) to establish objectives and conditions, if any, for earning
Awards and determining whether Awards will be paid after the end of
a performance period.



The Committee shall have full power and authority to administer and interpret the Plan and to
adopt such rules, regulations, agreements, guidelines and instruments for the administration of the
Plan and for the conduct of its business as the Committee deems necessary or advisable and to
interpret same, all within the Committee’s sole and absolute discretion.



     (c) Limited Liability. To the maximum extent permitted by law, no member of the Board or
Committee shall be liable for any action taken or decision made in good faith relating to the Plan
or any Award there under.



     (d) Indemnification. To the maximum extent permitted by law, the members of the Board and
Committee shall be indemnified by the Corporation in respect of all their activities under the
Plan.



     (e) Effect of Committee’s Decision. All actions taken and decisions and determinations made by
the Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder
shall be in the Committee’s sole and absolute discretion and shall be conclusive and binding on all
parties concerned, including the Corporation, its stockholders, any participants in the Plan and
any other employee of the Corporation, and their respective successors in interest.



 









 





4. Shares Available for the Plan; Maximum Awards




     Subject to adjustments as provided in Section 12 of the Plan, the shares of stock that may be
delivered or purchased or used for
reference purposes (with respect to stock appreciation rights, phantom stock units or performance
awards payable in cash) with respect to Awards granted under the Plan, including with respect to
incentive stock options intended to qualify under Section 422 of the Code, shall not exceed an
aggregate of 5,000,000 shares of Common Stock of the Corporation. The Corporation shall reserve
said number of shares for Awards under the Plan, subject to adjustments as provided in Section 12
of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares without the delivery of shares of Common Stock or other consideration, the shares
subject to such Award shall thereafter be available for further Awards under the Plan. The maximum
number of shares listed above does not include 400,000 shares of Common Stock reserved for stock
options under the SafeNet, Inc. 2000 Nonqualified Stock Option Plan which stock options and shares
shall be administered under the Plan.



     The maximum number of shares of Common Stock subject to Awards of any combination that may be
granted during any one calendar year to any one individual shall be limited to 200,000. To the
extent required by Section 162(m) of the Code and so long as Section 162(m) of the Code is
applicable to persons eligible to participate in the Plan, shares of Common Stock subject to the
foregoing limit with respect to which the related Award is terminated, surrendered or canceled
shall not again be available for grant under this limit.



     Stock Awards under Section 8 may not be issued after July 26, 2005, including stock Awards
that may be issued as performance awards under Section 9. Stock Awards under Section 8 may not
become vested based on less than 3 years of service after the grant date, unless vesting is based
on meeting performance goals as specified in Section 9, in which case vesting of stock Awards may
occur one year after the grant date, provided that the Committee may accelerate these vesting
periods, in the Committee’s discretion, in the even of death, disability, change of control, or
retirement.



5. Participation




     Participation in the Plan shall be open to all employees, officers, directors and consultants
of the Corporation, or of any Parent or Subsidiary of the Corporation, as may be selected by the
Committee from time to time. Notwithstanding the foregoing, participation in the Plan with respect
to Awards of incentive stock options shall be limited to employees of the Corporation or of any
Parent or Subsidiary of the Corporation.



     Awards may be granted to such eligible persons and for or with respect to such number of
shares of Common Stock as the Committee shall determine, subject to the limitations in Section 4 of
the Plan. A grant of any type of Award made in any one year to an eligible person shall neither
guarantee nor preclude a further grant of that or any other type of Award to such person in that
year or subsequent years.



6. Stock Options




     Subject to the other applicable provisions of the Plan, the Committee may from time to time
grant to eligible participants Awards of nonqualified stock options or incentive stock options as
that term is defined in Section 422 of the Code. The stock option Awards granted shall be subject
to the following terms and conditions.



     (a) Grant of Option. The grant of a stock option shall be evidenced by a Grant Agreement,
executed by the Corporation and the grantee, stating the number of shares of Common Stock subject
to the stock option evidenced thereby and the terms and conditions of such stock option, in such
form as the Committee may from time to time determine.



     (b) Price. The price per share payable upon the exercise of each stock option (“exercise
price”) shall be determined by the Committee, but shall be no less than the Fair Market Value of
such shares on the date of grant. Not withstanding Section 3(b)(v) or any other provision hereof,
the Committee shall not authorize the amendment of any outstanding stock option to reduce the
exercise price thereof.



     (c) Payment. Stock options may be exercised in whole or in part by payment of the exercise
price of the shares to be acquired in accordance with the provisions of the Grant Agreement, and/or
such rules and regulations as the Committee may have prescribed, and/or such determinations,
orders, or decisions as the Committee may have made. Payment may be made in cash (or cash
equivalents acceptable to the Committee) or, if approved by the Committee, in shares of Common
Stock or a combination of cash and shares of Common Stock, or by such other means as the Committee
may prescribe. The Fair Market Value of shares of Common Stock delivered on exercise of stock
options shall be determined as of the date of exercise. Shares of Common Stock delivered in payment
of the exercise price may be previously owned shares or, if approved by the Committee, shares
acquired upon exercise of the stock option. Any fractional share will be paid in cash. If approved
by the Board of Directors, the Corporation may make or guarantee loans to grantees to assist
grantees in exercising stock options and satisfying any related withholding tax obligations.



 









 





     If the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the
Committee, subject to such limitations as it may determine, may authorize payment of the exercise
price, in whole or in part, by delivery of a properly executed exercise notice, together with
irrevocable instructions, to: (i) a brokerage firm to deliver promptly to the Corporation the
aggregate amount of sale or loan proceeds to pay the exercise price and any withholding tax
obligations that may arise in connection with the exercise, and (ii) the
Corporation to deliver the certificates for such purchased shares directly to such brokerage firm.



     (d) Terms of Options. The term during which each stock option may be exercised shall be
determined by the Committee; provided, however, that in no event shall a stock option be
exercisable more than ten years from the date it is granted. Prior to the exercise of the stock
option and delivery of the shares certificates represented thereby, the grantee shall have none of
the rights of a stockholder with respect to any shares represented by an outstanding stock option.



     (e) Restrictions on Incentive Stock Options. Incentive stock option Awards granted under the
Plan shall comply in all respects with Code Section 422 and, as such, shall meet the following
additional requirements:




     (i) Grant Date. An incentive stock option must be granted within 10
years of the earlier of the Plan’s adoption by the Board of
Directors or approval by the Corporation’s shareholders.




     (ii) Exercise Price and Term. The exercise price of an incentive
stock option shall not be less than 100% of the Fair Market Value of
the shares on the date the stock option is granted and the term of
the stock option shall not exceed ten years. Also, the exercise
price of any incentive stock option granted to a grantee who owns
(within the meaning of Section 422(b)(6) of the Code, after the
application of the attribution rules in Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of
shares of the Corporation or its Parent or Subsidiary corporations
(within the meaning of Sections 422 and 424 of the Code) shall be
not less than 110% of the Fair Market Value of the Common Stock on
the grant date and the term of such stock option shall not exceed
five years.




     (iii) Maximum Grant. The aggregate Fair Market Value (determined as
of the Grant Date) of shares of Common Stock with respect to which
all incentive stock options first become exercisable by any grantee
in any calendar year under this or any other plan of the Corporation
and its Parent and Subsidiary corporations may not exceed $100,000
or such other amount as may be permitted from time to time under
Section 422 of the Code. To the extent that such aggregate Fair
Market Value shall exceed $100,000, or other applicable amount, such
stock options shall be treated as nonqualified stock options. In
such case, the Corporation may designate the shares of Common Stock
that are to be treated as stock acquired pursuant to the exercise of
an incentive stock option by issuing a separate certificate for such
shares and identifying the certificate as incentive stock option
shares in the stock transfer records of the Corporation.




     (iv) Grantee. Incentive stock options shall only be issued to
employees of the Corporation, or of a Parent or Subsidiary of the
Corporation.




     (v) Designation. No stock option shall be an incentive stock option
unless so designated by the Committee at the time of grant or in the
Grant Agreement evidencing such stock option.




     (vi) Stockholder Approval. No stock option issued under the Plan
shall be an incentive stock option unless the Plan is approved by
the shareholders of the Corporation within 12 months of its adoption
by the Board in accordance with the Bylaws and Articles of the
Corporation and governing law relating to such matters.



     (f) Other Terms and Conditions. Stock options may contain such other provisions, not
inconsistent with the provisions of the Plan, as the Committee shall determine appropriate from
time to time.



7. Stock Appreciation Rights




     (a) Award of Stock Appreciation Rights. Subject to the other applicable provisions of the
Plan, the Committee may at any time and from time to time grant stock appreciation rights (“SARs”)
to eligible participants, either on a free-standing basis (without regard to or in addition to the
grant of a stock option) or on a tandem basis (related to the grant of an underlying stock option),
as it determines. SARs granted in tandem with or in addition to a stock option may be granted
either at the same time as the stock option or at a later time; provided, however, that a tandem
SAR shall not be granted with respect to any outstanding incentive stock option Award without the
consent of the grantee. SARs shall be evidenced by Grant Agreements, executed by the Corporation
and the grantee, stating the number of shares of Common Stock subject to the SAR evidenced thereby
and the terms and conditions of such SAR, in such form as the Committee may from time to time
determine. The term during which each SAR may be exercised shall be determined by the Committee. In
no event shall a SAR be exercisable more than ten years from the date it is granted. The grantee
shall have none of the rights of a stockholder with respect to any shares of Common Stock
represented by a SAR.



     (b) Restrictions of Tandem SARs. No incentive stock option may be surrendered in connection
with the exercise of a tandem SAR unless the Fair Market Value of the Common Stock subject to the
incentive stock option is greater than the exercise price for such incentive stock option. SARs
granted in tandem with stock options shall be exercisable only to the same extent and subject to
the same conditions as the stock options related thereto are exercisable. The Committee may, in its
discretion, prescribe additional conditions to the exercise of any such tandem SAR.



 









 





     (c) Amount of Payment Upon Exercise of SARs. A SAR shall entitle the grantee to receive,
subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value
equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one
share of Common Stock over (B) the base price per share specified in the Grant Agreement, times
(ii) the number
of shares specified by the SAR, or portion thereof, which is exercised. In the case of exercise of
a tandem SAR, such payment shall be made in exchange for the surrender of the unexercised related
stock option (or any portion or portions thereof which the grantee from time to time determines to
surrender for this purpose).



     (d) Form of Payment Upon Exercise of SARs. Payment by the Corporation of the amount receivable
upon any exercise of a SAR may be made by the delivery of Common Stock or cash, or any combination
of Common Stock and cash, as determined in the sole discretion of the Committee from time to time.
If upon settlement of the exercise of a SAR a grantee is to receive a portion of such payment in
shares of Common Stock, the number of shares shall be determined by dividing such portion by the
Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be
used for such payment and the Committee shall determine whether cash shall be given in lieu of such
fractional shares or whether such fractional shares shall be eliminated.



8. Stock Awards (Including Restricted and Unrestricted Shares and Phantom Stock)




     (a) Stock Awards, In General. Subject to the other applicable provisions of the Plan, the
Committee may at any time and from time to time grant stock Awards to eligible participants in such
amounts and for such consideration, including no consideration or such minimum consideration as may
be required by law, as it determines. A stock Award may be denominated in shares of Common Stock or
stock-equivalent units (“phantom stock”), and may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole discretion of the Committee from
time to time.



     (b) Restricted Shares. Each stock Award shall specify the applicable restrictions, if any, on
such shares of Common Stock, the duration of such restrictions, and the time or times at which such
restrictions shall lapse with respect to all or a specified number of shares of Common Stock that
are part of the Award. Notwithstanding the foregoing, the Committee may reduce or shorten the
duration of any restriction applicable to any shares of Common Stock awarded to any grantee under
the Plan. Share certificates with respect to restricted shares of Common Stock granted pursuant to
a stock Award may be issued at the time of grant of the stock Award, subject to forfeiture if the
restrictions do not lapse, or upon lapse of the restrictions. If share certificates are issued at
the time of grant of the stock Award, the certificates shall bear an appropriate legend with
respect to the restrictions applicable to such stock Award or, alternatively, the grantee may be
required to deposit the certificates with the Corporation during the period of any restriction
thereon and to execute a blank stock power or other instrument of transfer therefor. Except as
otherwise provided by the Committee, during such period of restriction following issuance of share
certificates, the grantee shall have all of the rights of a holder of Common Stock, including but
not limited to the rights to receive dividends (or amounts equivalent to dividends) and to vote
with respect to the restricted shares. If share certificates are issued upon lapse of restrictions
on a stock Award, the Committee may provide that the grantee will be entitled to receive any
amounts per share pursuant to any dividend or distribution paid by the Corporation on its Common
Stock to stockholders of record after grant of the stock Award and prior to the issuance of the
share certificates.



     (c) Phantom Stock. The grant of phantom stock units shall be evidenced by a Grant Agreement,
executed by the Corporation and the grantee, that incorporates the terms of the Plan and states the
number of phantom stock units evidenced thereby and the terms and conditions of such phantom stock
units in such form as the Committee may from time to time determine. Phantom stock units granted to
a participant shall be credited to a bookkeeping reserve account solely for accounting purposes and
shall not require a segregation of any of the Corporation’s assets. Phantom stock units may be
exercised in whole or in part by delivery of an appropriate exercise notice to the Committee in
accordance with the provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may prescribe, and/or such determinations, orders, or decisions as the Committee may
make. Except as otherwise provided in the applicable Grant Agreement, the grantee shall have none
of the rights of a stockholder with respect to any shares of Common Stock represented by a phantom
stock unit as a result of the grant of a phantom stock unit to the grantee. Phantom stock units may
contain such other provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.



9. Performance Awards




     The Committee may in its discretion grant performance Awards which become payable on account
of attainment of one or more performance goals established by the Committee. Performance Awards may
be paid by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as
determined in the sole discretion of the Committee from time to time. Performance goals established
by the Committee may be based on the Corporation’s operating income or one or more other business
criteria selected by the Committee that apply to an individual or group of individuals, a business
unit, or the Corporation as a whole, over such performance period as the Committee may designate.
The Committee in its discretion may recommend to the Board of Directors of the Corporation that the
material terms of any Performance Award or program with respect to some or all eligible
participants be submitted for approval by the stockholders.



 









 





10. Withholding of Taxes




     The Corporation may require, as a condition to the grant of any Award under the Plan or
exercise pursuant to such Award or to the delivery of certificates for shares issued or payments of
cash to a grantee pursuant to the Plan or a Grant Agreement (hereinafter collectively referred to
as a “taxable event”), that the grantee pay to the Corporation, in cash or, if approved by the
Corporation, in
shares of Common Stock, including shares acquired upon grant of the Award or exercise of the Award,
valued at Fair Market Value on the date as of which the withholding tax liability is determined,
any federal, state or local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or required by law, shall
have the right to deduct from any payment of any kind (including salary or bonus) otherwise due to
a grantee any federal, state or local taxes of any kind required by law to be withheld with respect
to any taxable event under the Plan, or to retain or sell without notice a sufficient number of the
shares to be issued to such grantee to cover any such taxes.



11. Transferability




     No Award granted under the Plan shall be transferable by a grantee otherwise than by will or
the laws of descent and distribution. Unless otherwise determined by the Committee in accord with
the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime
of the grantee, only by the grantee or, during the period the grantee is under a legal disability,
by the grantee’s guardian or legal representative. Notwithstanding the foregoing, a nonqualified
stock option Award may, in the Committee’s sole discretion, be transferable by gift or domestic
order relations to (i) the grantee’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships (such persons, “Family Members”),
(ii) a corporation, partnership, limited liability company or other business entity whose only
stockholders, partners or members, as applicable are the grantee and/or Family Members, or (iii) a
trust in which the grantee and/or Family Members have all of the beneficial interests, and
subsequent to any such transfer any such nonqualified stock option Award may be exercised by any
such transferee.



12. Adjustments; Business Combinations




     In the event of a reclassification, recapitalization, stock split, reverse stock split, stock
dividend, combination of shares, or other similar event, the maximum number and kind of shares
reserved for issuance or with respect to which Awards may be granted under the Plan as provided in
Section 4 shall be adjusted to reflect such event, and the Committee shall make such adjustments as
it deems appropriate and equitable in the number, kind and price of shares covered by outstanding
Awards made under the Plan, and in any other matters which relate to Awards and which are affected
by the changes in the Common Stock referred to above.



     In the event of any proposed Change in Control, the Committee shall take such action as it
deems appropriate and equitable to effectuate the purposes of this Plan and to protect the grantees
of Awards, which action may include, but without limitation, any one or more of the following: (i)
acceleration or change of the exercise and/or expiration dates of any Award to require that
exercise be made, if at all, prior to the Change in Control; (ii) cancellation of any Award upon
payment to the holder in cash of the Fair Market Value of the Common Stock subject to such Award as
of the date of (and, to the extent applicable, as established for purposes of) the Change in
Control, less the aggregate exercise price, if any, of the Award; and (iii) in any case where
equity securities of another entity are proposed to be delivered in exchange for or with respect to
Common Stock of the Corporation, arrangements to have such other entity replace the Awards granted
hereunder with awards with respect to such other securities, with appropriate adjustments in the
number of shares subject to, and the exercise prices under, the award.



     The Committee is authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in the preceding two paragraphs of this Section 12) affecting the
Corporation, or the financial statements of the Corporation or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.



     In the event the Corporation dissolves and liquidates (other than pursuant to a plan of merger
or reorganization), then notwithstanding any restrictions on exercise set forth in this Plan or any
Grant Agreement, or other agreement evidencing a stock option, stock appreciation right or
restricted stock Award: (i) each grantee shall have the right to exercise his stock option or stock
appreciation right, or to require delivery of share certificates representing any such restricted
stock Award, at any time up to ten (10) days prior to the effective date of such liquidation and
dissolution; and (ii) the Committee may make arrangements with the grantees for the payment of
appropriate consideration to them for the cancellation and surrender of any stock option, stock
appreciation right or restricted stock Award that is so canceled or surrendered at any time up to
ten (10) days prior to the effective date of such liquidation and dissolution. The Committee may
establish a different period (and different conditions) for such exercise, delivery, cancellation,
or surrender to avoid subjecting the grantee to liability under Section 16(b) of the Exchange Act.
Any stock option or stock appreciation right not so exercised, canceled, or surrendered shall
terminate on the last day for exercise prior to such effective date; and any restricted stock as to
which there has not been such delivery of share certificates or that has not been so canceled or
surrendered, shall be forfeited on the last day prior to such effective date. The Committee shall
give to each grantee written notice of the commencement of any proceedings for such liquidation and
dissolution of the Corporation and the grantee’s rights with respect to his outstanding Award.



 









 





     Except as hereinbefore expressly provided, issuance by the Corporation of shares of stock of
any class or securities convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warranty to subscribe therefore, or upon
conversion of shares or obligations of the Corporation convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the
number of shares of Common Stock subject to Awards theretofore granted or the purchase price per
share of Common Stock subject to Awards.



13. Termination and Modification of the Plan




     The Board, without further approval of the stockholders, may modify or terminate the Plan or
any portion thereof at any time, except that no modification shall become effective without prior
approval of the stockholders of the Corporation (i) to increase the number of shares of Common
Stock subject to the Plan, (ii) to increase the benefits accruing to participants under the Plan,
except as expressly stated herein, (iii) to materially modify eligibility requirements for
participation in the Plan, or (iv) if stockholder approval is necessary to comply with any tax or
regulatory requirement or rule of any exchange or NASDAQ System upon which the Common Stock is
listed or quoted (including for this purpose stockholder approval that is required for continued
compliance with Rule 16b-3 or stockholder approval that is required to enable the Committee to
grant incentive stock options pursuant to the Plan).



     The Committee shall be authorized to make minor or administrative modifications to the Plan as
well as modifications to the Plan that may be dictated by requirements of federal or state laws
applicable to the Corporation or that may be authorized or made desirable by such laws. The
Committee may amend or modify the grant of any outstanding Award in any manner to the extent that
the Committee would have had the authority to make such Award as so modified or amended. No
modification may be made that would materially adversely affect any Award previously made under the
Plan without the approval of the grantee.



14. Non-Guarantee of Employment




     Nothing in the Plan or in any Grant Agreement there under shall confer any right on an
employee to continue in the employ of the Corporation or shall interfere in any way with the right
of the Corporation to terminate an employee at any time.



15. Termination of Employment




     For purposes of maintaining a grantee’s continuous status as an employee and accrual of rights
under any Award, transfer of an employee among the Corporation and the Corporation’s Parent or
Subsidiaries shall not be considered a termination of employment. Nor shall it be considered a
termination of employment for such purposes if an employee is placed on military or sick leave or
such other leave of absence which is considered as continuing intact the employment relationship;
in such a case, the employment relationship shall be continued until the date when an employee’s
right to reemployment shall no longer be guaranteed either by law or contract.



16. Written Agreement




     Each Grant Agreement entered into between the Corporation and a grantee with respect to an
Award granted under the Plan shall incorporate the terms of this Plan and shall contain such
provisions, consistent with the provisions of the Plan, as may be established by the Committee.



17. Non-Uniform Determinations




     The Committee’s determinations under the Plan (including without limitation determinations of
the persons to receive Awards, the form, amount and time of such Awards, the terms and provisions
of such Awards and the agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.



18. Limitation on Benefits




     With respect to persons subject to Section 16 of the Exchange Act, transactions under this
Plan are intended to comply with all applicable conditions of Rule 16b-3. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.



19. Listing and Registration




     If the Corporation determines that the listing, registration or qualification upon any
securities exchange or upon any listing or quotation system established by the National Association
of Securities Dealers, Inc. (“NASDAQ System”) or under any law, of shares subject to any Award is
necessary or desirable as a condition of, or in connection with, the granting of same or the issue
or purchase of shares there under, no such Award may be exercised in whole or in part and no
restrictions on such Award shall lapse, unless such
listing, registration or qualification is effected free of any conditions not acceptable to the
Corporation.



 









 





20. Compliance with Securities Law




     Common Stock shall not be issued with respect to an Award granted under the Plan unless the
exercise of such Award and the issuance and delivery of share certificates there under for such
Common Stock pursuant thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated there under, and the requirements of any national securities exchange or NASDAQ System
upon which the Common Stock may then be listed or quoted, and shall be further subject to the
approval of counsel for the Corporation with respect to such compliance to the extent such approval
is sought by the Committee.



     Stock certificates evidencing unregistered shares acquired upon the exercise of Options shall
contain a restrictive securities legend substantially as follows:




     “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND APPLICABLE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”



21. No Trust or Fund Created




     Neither the Plan nor any Award shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Corporation and a grantee or any other person.
To the extent that any grantee or other person acquires a right to receive payments from the
Corporation pursuant to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Corporation.



22. No Limit on Other Compensation Arrangements




     Nothing contained in the Plan shall prevent the Corporation or its Parent or Subsidiary
corporations from adopting or continuing in effect other compensation arrangements (whether such
arrangements be generally applicable or applicable only in specific cases) as the Committee in its
discretion determines desirable, including without limitation the granting of stock options, stock
awards, stock appreciation rights or phantom stock units otherwise than under the Plan.



23. No Restriction of Corporate Action




     Nothing contained in the Plan shall be construed to prevent the Corporation or any Parent or
Subsidiary from taking any corporate action which is deemed by the Corporation or such Parent or
Subsidiary to be appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award issued under the Plan. No employee, beneficiary or other
person shall have any claim against the Corporation or any Parent or Subsidiary as a result of such
action.





24. Governing Law





     The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant
to the Plan, and of any rules, regulations, determinations or decisions made by the Board or
Committee relating to the Plan or such Grant Agreements, and the rights of any and all persons
having or claiming to have any interest therein or there under, shall be determined exclusively in
accordance with applicable federal laws and the laws of the State of Delaware, without regard to
its conflict of laws rules and principles.



25. Plan Subject to Charter and By-Laws




     This Plan is subject to the Articles and By-Laws of the Corporation, as they may be amended
from time to time.



26. Effective Date; Termination Date




     The Plan, as amended and restated herein, is effective as of the date on which the amendment
and restatement of the Plan was adopted by the Board; provided that the amendment and restatement
of the Plan shall be null and void unless approved within
12 months thereafter by the shareholders of the Corporation. No Award shall be granted under the
Plan after the close of business on the day immediately preceding the tenth anniversary of the
effective date of the Plan. Subject to other applicable provisions of the Plan, all Awards made
under the Plan prior to such termination of the Plan shall remain in effect until such Awards have
been satisfied or terminated in accordance with the Plan and the terms of such Awards.