ex43.htm


    EXHIBIT
4.3

    


    HEMAGEN
DIAGNOSTICS, INC.

    


    2007
STOCK INCENTIVE PLAN

    


    ARTICLE
1

    OBJECTIVES

    


    The
objectives of this 2007 Stock Incentive Plan (the “Plan”) are to enable HEMAGEN
DIAGNOSTICS, INC. (the “Company”) to compete successfully in retaining and
attracting key employees of outstanding ability, to stimulate the efforts of
such employees toward the Company’s objectives and to encourage the
identification of their interests with those of the Company’s
shareholders.

     

    ARTICLE
2

    DEFINITIONS

    


    For
purposes of this Plan, the following terms shall have the following
meanings:

     

    2.1   “Award” means an award of
a Stock Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit
Award or Stock Award granted under the Plan.

     

    2.2   “Award Agreement” means a
written or electronic agreement entered into between the Company and a
Participant setting forth the terms and conditions of an Award granted to a
Participant.

     

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

     

    2.4   “Code” means the Internal
Revenue Code of 1986, as amended, or any successor legislation.

     

    2.5   “Committee” means a
committee designated by the Board of the Company. The Committee shall be
comprised of two or more directors, each of whom shall be (1) a “non-employee
director” as defined in Rule 16b-3 promulgated under the Exchange Act, (2) an
“outside director” under Section 162(m) of the Code (“Section 162(m)”) and (3)
an “independent director” under rules adopted by the Nasdaq Stock Market, in
each case as such rules and sections may be amended, superseded or interpreted
hereafter.

     

    2.6   “Common Stock” means the
Company’s common stock, no par value.

     

    2.7   “Disability” means a
Participant being considered “disabled” within the meaning of Section
409A(a)(2)(C) of the Code, unless otherwise provided in an Award
Agreement.

     

    2.8   “Eligible Employee” means
any individual who performs services for the Company or any Subsidiary of the
Company and is treated as an “employee” for federal income tax purposes or any
individual or firm who performs services for the Company as a
consultant.

     

    2.9   “Exchange Act” means the
Securities Exchange Act of 1934.

     

    2.10   
 “Fair Market Value” of a Share
as of a given date shall, if the Common Stock is quoted on the Over-the-Counter
Bulletin Board (“OTCBB”), be the reported closing price for a Share on the date
as of which Fair Market Value is to be determined. If Common Stock is not quoted
on the OTCBB on the date as
of which Fair Market Value is to be determined, the Committee shall determine in
good faith the Fair Market Value in whatever manner it considers
appropriate.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    2.11  “Grant Date” means the
date designated by the Committee as the date upon which an Award is
granted.

     

    2.12  “Incentive Option” means
any Stock Option intended to be and designated as an “Incentive Stock Option”
within the meaning of Section 422 of the Code or any successor
provision.

     

    2.13  “Non-Qualified Option” means
any Stock Option that is not an Incentive Option.

     

    2.14  “Option Price” or
“Exercise Price” means the price per Share at which Common Stock may be
purchased upon the exercise of an Option.

     

    2.15  “Participant” means a
person to whom an Award has been granted pursuant to this Plan.

     

    2.16  “Restricted Stock Award”
means a grant of Shares to an Eligible Employee under Article 7 that are issued
subject to such vesting and transfer restrictions as the Committee shall
determine and set forth in an Award Agreement.

     

    2.17  “Retirement” means any
termination of employment (other than by death or Disability) by an employee who
is at least 65 years of age, or 55 years of age with at least ten years of
employment with the Company or a Subsidiary of the Company.

     

    2.18  “Share” means one share
of the Common Stock.

     

    2.19  “Stock Appreciation
Right” means a contractual right granted to an Eligible Employee under ARTICLE 6
entitling such Eligible Employee to receive a payment, representing the
difference between the base price per Share of the right and the Fair Market
Value of a Share, at such time, and subject to such conditions, as are set forth
in the Plan and the applicable Award Agreement.

     

    2.20  “Stock Award” means a
grant of Shares to an Eligible Employee under Article 9 that are issued free of
transfer restrictions and forfeiture conditions.

     

    2.21   
  “Stock Option” or “Option” means the right to purchase Shares
granted pursuant to this Plan.

     

    2.22   
  “Stock Unit Award” means a contractual right granted to an Eligible
Employee under Article 8 representing notional unit interests equal in value to
a Share to be paid or distributed at such times, and subject to such conditions,
as set forth in the Plan and the applicable Award Agreement.

     

    2.23  “Subsidiary” has the
meaning set forth in Section 424(f) of the Code.

     

    2.24  “Term” means the period
beginning on a Grant Date and ending on the expiration date of such
Award.

     

    2.25  “Transfer” means sale,
assignment, pledge, encumbrance, alienation, attachment, charge or other
disposition, whether or not for consideration; and the terms “Transferred” or
“Transferable” have corresponding meanings.

     


    
      
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    ARTICLE
3

     

    ADMINISTRATION,
PARTICIPATION AND AWARDS

    


    3.1  The Committee. This Plan
shall be administered and interpreted by the Committee.

     

    3.2  Committee Authority. The
Committee shall have such powers and authority as may be necessary or
appropriate for the Committee to carry out its functions as described in the
Plan. Subject to the express limitations of the Plan, the Committee shall have
authority in its discretion to determine, after considering management’s
recommendations with respect to Eligible Employees excluding the Company’s
executive officers, the Eligible Employees to whom, and the time or times at
which, Awards may be granted, the number of Shares, units or other rights
subject to each Award, the exercise, base or purchase price of an Award (if
any), the time or times at which an Award will become vested, exercisable or
payable, the performance goals and other conditions of an Award, the duration of
the Award, and all other terms of the Award. The Committee shall determine the
terms and conditions of all Awards granted to Participants. Subject to the terms
of the Plan, the Committee shall have the authority to amend the terms of an
Award in any manner that is not inconsistent with the Plan, provided that no
such action shall adversely affect the rights of a Participant with respect to
an outstanding Award without the Participant’s consent. The Committee shall also
have discretionary authority to interpret the Plan, to make factual
determinations under the Plan, and to make all other determinations necessary or
advisable for Plan administration, including, without limitation, to correct any
defect, to supply any omission or to reconcile any inconsistency in the Plan or
any Award Agreement hereunder. The Committee may prescribe, amend, and rescind
rules and regulations relating to the Plan. The Committee’s determinations under
the Plan need not be uniform and may be made by the Committee selectively among
Participants and Eligible Employees, whether or not such persons are similarly
situated. The Committee shall, in its discretion, consider such factors as it
deems relevant in making its interpretations, determinations and actions under
the Plan including, without limitation, the recommendations or advice of any
officer or employee of the Company or such attorneys, consultants, accountants
or other advisors as it may select. All interpretations, determinations and
actions by the Committee shall be final, conclusive, and binding upon all
parties.

     

    3.3  Delegation of Authority.
The Committee shall be permitted to delegate to any appropriate officer or
employee of the Company responsibility for performing certain ministerial
functions under the Plan. In the event that the Committee’s authority is
delegated to officers or employees in accordance with the foregoing, all
provisions of the Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a
reference to such officer or employee for such purpose. Any action undertaken in
accordance with the Committee’s delegation of authority hereunder shall have the
same force and effect as if such action was undertaken directly by the Committee
and shall be deemed for all purposes of the Plan to have been taken by the
Committee.

     

    3.4  Designation of
Participants. All Eligible Employees are eligible to be designated by the
Committee to receive Awards and become Participants under the Plan. The
Committee has the authority, in its discretion, to determine and designate from
time to time those Eligible Employees who are to be granted Awards, the types of
Awards to be granted and the number of Shares or rights subject to Awards
granted under the Plan. In selecting Eligible Employees to be Participants and
in determining the type and amount of Awards to be granted under the Plan, the
Committee shall consider any and all factors that it deems relevant or
appropriate.

     


    
      
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    ARTICLE
4

     

    SHARES
SUBJECT TO PLAN

    


    4.1  Shares. Subject to
adjustment as provided in Section 4.2, the number of Shares which may be issued
under this Plan shall not exceed One Million Five Hundred Thousand (1,500,000)
Shares. Shares issued and sold under the Plan may be either authorized but
unissued Shares or Shares held in the Company’s treasury. To the extent that any
Award involving the issuance of Shares is forfeited, cancelled, returned to the
Company for failure to satisfy vesting requirements or other conditions of the
Award, or is otherwise terminated without an issuance of Shares being made
thereunder, the Shares covered thereby will no longer be counted against the
foregoing maximum Share limitations and may again be made subject to Awards
under the Plan pursuant to such limitations. Any Awards or portions thereof that
are settled in cash and not in Shares shall not be counted against the foregoing
maximum Share limitations.

     

    4.2  Adjustment Provisions. If
there shall occur any change with respect to the outstanding Shares by reason of
any recapitalization, reclassification, stock dividend, extraordinary dividend,
stock split, reverse stock split or other distribution with respect to the
Shares, or any merger, reorganization, consolidation, combination, spin-off or
other similar corporate change, or any other change affecting the Common Stock,
the Committee may, in the manner and to the extent that it deems appropriate and
equitable to the Participants and consistent with the terms of the Plan, cause
an adjustment to be made in (i) the maximum number and kind of Shares provided
in Section 4.1hereof, (ii) the number and kind of Shares, units or other rights
subject to then outstanding Awards, (iii) the exercise or base price for each
Share, unit or other right subject to then outstanding Awards, and (iv) any
other terms of an Award that are affected by the event. Notwithstanding the
foregoing, in the case of Incentive Stock Options, any such adjustments shall,
to the extent practicable, be made in a manner consistent with the requirements
of Section 424(a) of the Code.

     

    ARTICLE
5

    STOCK
OPTIONS

    


    5.1  Grants. Each Option
granted shall be designated as either a Non-Qualified Option or an Incentive
Option. One or more Stock Options may be granted to any Eligible
Employee.

     

    5.2  Incentive Options. Any
Option designated by the Committee as an Incentive Option will be subject to the
general provisions applicable to all Options granted under the Plan plus the
following specific provisions:

     

       5.2.1  If an Incentive Option is granted
to a person who owns, directly or indirectly, stock representing more than 10%
of (i) the total combined voting power of all classes of stock of the Company
and its Subsidiaries, or (ii) a corporation that owns 50% or more of the total
combined voting power of all classes of stock of the Company, then

     

             5.2.1.1  the Option Price must equal at
least 110% of the Fair Market Value on the Grant Date; and

     

          5.2.1.2  the term of the Option
shall not be greater than five years from the Grant Date.

     

          5.2.2  The aggregate Fair Market Value
of Shares, determined at the Grant Date, with respect to which Incentive Options
that may become exercisable for the first time during any calendar year under
this Plan or any other plan maintained by the Company and its Subsidiaries shall
not exceed $100,000 determined
in accordance with Section 422(d) of the Code. To the extent that the aggregate
Fair Market Value of Shares with respect to which Incentive Options become
exercisable for the first time by any individual during any calendar year, under
all plans of the Company and its Subsidiaries, exceeds $100,000, such Options
shall be treated as Non-Qualified Options.

     


    
      
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       5.2.3  Notwithstanding anything in this
Plan to the contrary, no term of this Plan relating to Incentive Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code, or, without the consent of the Participants affected,
to disqualify any Incentive Option under Section 422 of the Code.

     

        5.3  Terms of Options. Except
as otherwise required by Sections 5.2 and subject to Section 5.5.2 and ARTICLE
11, Options granted under this Plan shall be subject to the following terms and
conditions and shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem desirable:

     

       5.3.1  The Option Price shall be
determined by the Committee at the Grant Date, except that no Incentive Option
may be granted for an Option Price less than 100% of Fair Market Value on the
Grant Date.

     

       5.3.2  The Option Term shall be fixed by
the Committee, but no Option shall be exercisable more than ten years after its
Grant Date.

     

       5.3.3  An Option shall be exercisable at
such time or times and subject to such terms and conditions as shall be
specified in the Award Agreement, provided, however, that an Option may not be
exercised as to the lesser of 100 Shares at any one time or the total number
available for exercise at that time.

     

       5.3.4  Stock Options shall terminate in
accordance with Section 5.5.2.

     

        5.4  Vesting of Stock Options. The
Committee shall, in its discretion, prescribe the time or times at which, or the
conditions upon which, a Stock Option or portion thereof shall become vested
and/or exercisable, and may accelerate the vesting or exercisability of any
Stock Option at any time. The requirements for vesting and exercisability of a
Stock Option may be based on the continued employment of a Participant with the
Company or a Subsidiary of the Company for a specified period (or periods) or on
the attainment of performance goals established by the Committee in its sole
discretion.

     

        5.5  Exercise of Options. Any
Participant entitled to exercise an Option in whole or in part, may do so by
delivering a written notice of exercise to the Company at its principal
office. The written notice shall specify the number of Shares for which an
Option is being exercised and the Grant Date of the Option being exercised and
shall be accompanied by full payment in cash or by check of the Option Price for
the Shares being purchased and any withholding taxes. In addition, at the
discretion of the Committee, either as set forth in an Option Agreement or
determined at the time of exercise, the exercise price and withholding taxes may
be paid:

     

       5.5.1  By tender to the Company of
Shares owned by the Participant having a Fair Market Value not less than the
exercise price (the Committee shall have the discretion to require that the
Participant own such shares for six (6) months);

     

       5.5.2  By the assignment of the proceeds
of a sale or loan with respect to some or all of the Shares being acquired upon
the exercise of the Option;

     


    
      
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       5.5.3  By such other consideration as
may be approved by the Committee from time to time to the extent permitted by
applicable law; or

     

       5.5.4  By any combination of the methods
described above in Sections 5.5.1 to 5.3.3.

     

        5.6  Limited Transferability of
Non-Qualified Options. Except as otherwise provided in Section 13.4, no Stock
Option shall be Transferable or exercisable by any person other than the
Participant except (i) upon the Participant’s death, in accordance with Sections
5.7.3 and 5.7.5 hereof or (ii) in the case of Non-Qualified Stock Options only,
for the Transfer of all or part of the Stock Option to a Participant’s “family
member” (as defined for purposes of the Form S-8 registration statement under
the Securities Act of 1933), as may be approved by the Committee in its sole and
absolute discretion at the time of proposed Transfer. The Transfer of a
Non-Qualified Stock Option may be subject to such terms and conditions as the
Committee may in its discretion impose from time to time. Subsequent Transfers
of a Non-Qualified Stock Option shall be prohibited other than in accordance
with Sections 5.7.3, 5.7.4 and 5.7.5 hereof.

        

          5.7  Termination of Stock Options.
All Stock Options issued under this Plan shall terminate as
follows:

     

       5.7.1  During any period of continuous
employment or business relationship with the Company or any Subsidiary of the
Company, a Stock Option will be terminated only if it is fully exercised or if
it has expired by its terms or by the terms of this Plan, including this Section
5.7.1. For purposes of this Plan, any leave of absence approved by the Company
or the Subsidiary of the Company shall not be deemed to be a termination of
employment.

     

       5.7.2  If a Participant violates any
terms of any written employment, confidentiality or noncompetition agreement
between the Company or any Subsidiary of the Company and the Participant, all
existing Stock Options granted to such Participant will terminate. In addition,
if at the time of such violation such Participant has exercised Stock Options
but has not received certificates for the Shares to be issued, the Company may
void the Award and its exercise. Any such actions by the Company shall be in
addition to any other rights or remedies available to the Company or the
Subsidiaries of the Company in such circumstances. In the event Section 5.7.2
and 5.7.4 both apply to a situation, the provisions of Section 5.7.2 shall take
precedence over the provisions of Section 5.7.4 and govern the
situation.

     

       5.7.3  If a Participant’s employment by
the Company or any Subsidiary of the Company terminates by reason of death,
unless otherwise determined by the Committee, all Stock Options shall be fully
vested and may thereafter be exercised by the Participant’s beneficiary or legal
representative, for a period of one year or such longer period as the Committee
may specify at or after grant in all cases other than Incentive Options, or
until the expiration of the stated term of such Stock Option, whichever period
is shorter.

     

       5.7.4  If Participant’s employment by
the Company or a Subsidiary of the Company terminates by reason of Disability or
Retirement, unless otherwise determined by the Committee based upon, among other
factors, the Participant’s contributions to, and longevity with, the Company or
any Subsidiary, all Stock Options shall terminate (i) on the date which is 90
days after the date of such termination of employment or on the expiration of
the stated term of the Stock Option, whatever shall first occur, in the case of
a Participant which has been employed by the Company or any of its subsidiaries
for ten full years or less, (ii) on the date which is one year after the date of
such termination of employment or on the expiration of the stated term of the
Stock Option, whichever shall first occur, in the case of a Participant who has
been employed by the Company or any of its Subsidiaries for more than ten full
years, but less than twenty full years, or (iii) on the date which is two years
after the date of termination of employment or on the expiration of the stated
term of the Stock Option, whichever shall first occur, in the case of a
Participant
who has been employed by the Company or any of its Subsidiaries for twenty full
years or more.


    
      
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            5.7.5  Unless otherwise determined by
the Committee at or after grant, if a Participant’s employment by the Company or
any Subsidiary of the Company terminates for any reason other than death,
Disability or Retirement, the Stock Option will terminate immediately on the
date of termination of the employment.

     

          5.8  Repricing Prohibited. Subject to
the anti-dilution adjustment provisions contained in Section 0 hereof, without
the prior approval of the Company’s shareholders, evidenced by a majority of
votes cast, neither the Committee nor the Board shall cause the cancellation,
substitution or amendment of a Stock Option that would have the effect of
reducing the exercise price of such a Stock Option previously granted under the
Plan, or otherwise approve any modification to such a Stock Option that would be
treated as a “repricing” under the then applicable rules, regulations or listing
requirements adopted by the Nasdaq Stock Market.

     

          5.9  Awards to Non-Employee Directors.
Notwithstanding any other provisions herein, members of the Board of Directors
who are not otherwise employees of the Company shall be entitled to receive
Awards (other than Incentive Options) in forms and amounts as determined by the
Committee in its discretion under this Plan from time to time and at the
following times:

     

        5.9.1  On the date on which a
person first becomes a member of the Board of Directors, whether by election or
appointment; and

     

        5.9.2  On the date of
re-election by shareholders to the Board of Directors.

     

        5.9.3  On each annual
anniversary of election as a member of the Board of Directors
therafter.

     

    ARTICLE
6

    STOCK
APPRECIATION RIGHTS.

     

          6.1  Grant of Stock Appreciation
Rights. A Stock Appreciation Right may be granted to any Eligible Employee
selected by the Committee. Stock Appreciation Rights may be granted on a basis
that allows for the exercise of the right by the Participant or that provides
for the automatic payment of the right upon a specified date or event. Stock
Appreciation Rights shall be exercisable or payable at such time or times and
upon conditions as may be approved by the Committee, provided that the Committee
may accelerate the exercisability or payment of a Stock Appreciation Right at
any time.

     

          6.2  Freestanding Stock Appreciation
Rights. A Stock Appreciation Right may be granted without any related Stock
Option and may be subject to such vesting and exercisability requirements as
specified by the Committee in an Award Agreement. Such vesting and
exercisability requirements may be based on the continued service of the
Participant with the Company or its Subsidiaries for a specified time period (or
periods) or on the attainment of specified performance goals established by the
Committee in its discretion. A Stock Appreciation Right will be exercisable or
payable at such time or times as determined by the Committee, provided that the
maximum term of a Stock Appreciation Right shall be ten years from the Grant
Date. The base price of a Stock Appreciation Right granted without any related
Stock Option shall be determined by the Committee in its sole discretion;
provided, however, that the base price per Share of any such freestanding Stock
Appreciation Right shall not be less than 100% of the Fair Market Value of the
Shares on the Grant Date.

     


    
      
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          6.3  Tandem Stock Option/Stock
Appreciation Rights. A Stock Appreciation Right may be granted in tandem with a
Stock Option, either at the time of grant or at any time thereafter during the
term of the Stock Option. A tandem Stock Option/Stock Appreciation Right will
entitle the holder to elect, as to all or any portion of the number of Shares
subject to such Stock Option/Stock Appreciation Right, to exercise either the
Stock Option or the Stock Appreciation Right, resulting in the reduction of the
corresponding number of Shares subject to the right so exercised as well as the
tandem right not so exercised. A Stock Appreciation Right granted in tandem with
a Stock Option hereunder shall have a base price per Share equal to the Exercise
Price of the Stock Option, will be vested and exercisable at the same time or
times that a related Stock Option is vested and exercisable, and will expire no
later than the time at which the related Stock Option expires.

     

          6.4  Payment of Stock Appreciation
Rights.  A Stock Appreciation Right will entitle the holder, upon
exercise or other payment of the Stock Appreciation Right, as applicable, to
receive an amount determined by multiplying: (i) the excess of the Fair Market
Value of a Share on the date of exercise or payment of the Stock Appreciation
Right over the base price of such Stock Appreciation Right, by (ii) the number
of Shares as to which such Stock Appreciation Right is exercised or paid.
Subject to the requirements of Section 409A of the Code, payment of the amount
determined under the foregoing may be made, as approved by the Committee and set
forth in the Award Agreement, in Shares valued at their Fair Market Value on the
date of exercise or payment, in cash, or in a combination of Shares and cash,
subject to applicable tax withholding requirements.

     

           6.5  Repricing
Prohibited.   Subject to the anti-dilution adjustment provisions
contained in Section 4.2 hereof, without the prior approval of the Company’s
shareholders, evidenced by a majority of votes cast, neither the Committee nor
the Board shall cause the cancellation, substitution or amendment of a Stock
Appreciation Right that would have the effect of reducing the base price of such
a Stock Appreciation Right previously granted under the Plan, or otherwise
approve any modification to such a Stock Appreciation Right that would be
treated as a “repricing” under the then applicable rules, regulations or listing
requirements adopted by the Nasdaq Stock Market.

     

    ARTICLE
7

    RESTRICTED
STOCK AWARDS

     

          7.1  Grant of Restricted Stock
Awards.  A Restricted Stock Award may be granted to any Eligible
Employee selected by the Committee. The Committee may require the payment by the
Participant of a specified purchase price in connection with any Restricted
Stock Award.

     

          7.2  Vesting
Requirements.  The restrictions imposed on Shares granted under a
Restricted Stock Award shall lapse in accordance with the vesting requirements
specified by the Committee in the Award Agreement, provided that the Committee
may accelerate the vesting of a Restricted Stock Award at any time. Such vesting
requirements may be based on the continued employment of the Participant with
the Company or its Subsidiaries for a specified time period (or periods) or on
the attainment of specified performance goals established by the Committee in
its discretion. If the vesting requirements of a Restricted Stock Award shall
not be satisfied, the Award shall be forfeited and the Shares subject to the
Award shall be returned to the Company.

     

          7.3  Restrictions.  Shares
granted under any Restricted Stock Award may not be transferred, assigned or
subject to any encumbrance, pledge, or charge until all applicable restrictions
are removed or have expired, unless otherwise allowed by the Committee. Failure
to satisfy any applicable restrictions shall result in the subject shares of the
Restricted Stock Award being forfeited and returned to the Company. The
Committee may require in an Award Agreement that certificates representing the
shares granted under a Restricted Stock Award bear a legend making appropriate
reference to the restrictions imposed,
and that certificates representing the shares granted or sold under a Restricted
Stock Award will remain in the physical custody of an escrow holder until all
restrictions are removed or have expired.

     


    
      
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          7.4  Rights as
Shareholder.  Subject to the foregoing provisions of this Section 8
and the applicable Award Agreement, the Participant shall have all rights of a
shareholder with respect to the Shares granted to the Participant under a
Restricted Stock Award, including the right to vote the Shares and receive all
dividends and other distributions paid or made with respect thereto. The
Committee may provide in an Award Agreement for the payment of dividends and
distributions to the Participant at such times as paid to shareholders generally
or at the times of vesting or other payment of the Restricted Stock
Award.

     

          7.5  Section 83(b)
Election.  If a Participant makes an election pursuant to Section
83(b) of the Code with respect to a Restricted Stock Award, the Participant
shall file, within 30 days following the Grant Date, a copy of such election
with the Company and with the Internal Revenue Service, in accordance with the
regulations under Section 83 of the Code. The Committee may provide in an Award
Agreement that the Restricted Stock Award is conditioned upon the Participant’s
making or refraining from making an election with respect to the Award under
Section 83(b) of the Code.

     

    ARTICLE
8

    STOCK
UNIT AWARDS

     

          8.1  Grant of Stock Unit
Awards.  A Stock Unit Award may be granted to any Eligible Employee
selected by the Committee. The value of each stock unit under a Stock Unit Award
is equal to the Fair Market Value of a Share on the applicable date or time
period of determination, as specified by the Committee. A Stock Unit Award shall
be subject to such restrictions and conditions as the Committee shall determine.
A Stock Unit Award may be granted together with a dividend equivalent right with
respect to the Shares subject to the Award, which may be accumulated and may be
deemed reinvested in additional stock units, as determined by the Committee in
its discretion.

     

          8.2  Vesting of Stock Unit
Awards.  On the Date of Grant, the Committee shall in its discretion
determine any vesting requirements with respect to a Stock Unit Award, which
shall be set forth in the Award Agreement, provided that the Committee may
accelerate the vesting of a Stock Unit Award at any time. Vesting requirements
may be based on the continued employment of the Participant with the Company or
its Subsidiaries for a specified time period (or periods) or on the attainment
of specified performance goals established by the Committee in its discretion. A
Stock Unit Award may also be granted on a fully vested basis, with a deferred
payment date.

     

    8.3  Payment of Stock Unit
Awards.  A Stock Unit Award shall become payable to a Participant at
the time or times determined by the Committee and set forth in the Award
Agreement, which may be upon or following the vesting of the Award. Payment of a
Stock Unit Award may be made, at the discretion of the Committee, in cash or in
Shares, or in a combination thereof, subject to applicable tax withholding
requirements. Any cash payment of a Stock Unit Award shall be made based upon
the Fair Market Value of the Common Stock, determined on such date or over such
time period as determined by the Committee.

     

          8.4  No Rights as
Shareholder.  The Participant shall not have any rights as a
shareholder with respect to the shares subject to a Stock Unit Award until such
time as Shares are delivered to the Participant pursuant to the terms of the
Award Agreement.

     


    
      
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    ARTICLE
9

    STOCK
AWARDS

     

          9.1  Grant of Stock
Awards.  A Stock Award may be granted to any Eligible Employee
selected by the Committee. A Stock Award may be granted for past services, in
lieu of bonus or other cash compensation or for any other valid purpose as
determined by the Committee. A Stock Award granted to an Eligible Employee
represents Shares that are issued without restrictions on transfer and other
incidents of ownership and free of forfeiture conditions, except as otherwise
provided in the Plan and the Award Agreement. The Committee may, in connection
with any Stock Award, require the payment of a specified purchase
price.

     

          9.2  Rights as
Shareholder.  Subject to the foregoing provisions of this ARTICLE 9
and the applicable Award Agreement, upon the issuance of the Shares under a
Stock Award the Participant shall have all rights of a shareholder with respect
to the Shares, including the right to vote the shares and receive all dividends
and other distributions paid or made with respect thereto.

     

    ARTICLE
10

    EXTRAORDINARY
EVENTS

     

          10.1  In the event of the dissolution
or liquidation of the Company or any merger, other than a merger for the purpose
of the redomestication of the Company not involving a change in control,
consolidation, exchange or other transaction in which the Company is not the
surviving corporation or in which the outstanding Shares of the Company are
converted into cash, other securities or other property, each outstanding Award
shall automatically become fully vested and fully exercisable immediately prior
to such event. Thereafter the holder of any Option shall, upon exercise of the
Option, receive, in lieu of the stock or other securities and property
receivable upon exercise of the Option prior to such transaction, the stock or
other securities or property to which such holder would have been entitled upon
consummation of such transaction if such holder had exercised such Option
immediately prior to such transaction.

     

          10.2  All outstanding Awards shall
become fully vested and immediately exercisable in full if a change in control
of the Company occurs. For purposes of this Agreement, a “change in control of
the Company” shall be deemed to have occurred if:

     

            10.21  there occurs an event or series
of events by which any person or group of persons become the “beneficial owners”
as defined in Rule 13d-3 under the Exchange Act of at least 40% of the Common
Stock; or

     

            10.2.2  during any period of one year
after January 1, 2007, individuals who at the beginning of such period
constitute the Board and any new director whose election by the Board or
nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof.

     

    ARTICLE
11

    FORFEITURE
EVENTS

     

          11.1  General. In addition to the
termination provisions applicable to Stock Options as provided in Section 5.5.2,
the Committee may specify in an Award Agreement at the time of the Award that
the Participant’s rights, payments and benefits with respect to an Award shall
be subject to termination, reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to, termination of employment for cause,
violation of material Company policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company.


    
      
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          11.2  Termination for Cause. Unless
otherwise provided by the Committee and set forth in an Award Agreement, if a
Participant’s employment with the Company or any Subsidiary of the Company shall
be terminated for cause, the Company may, in its sole discretion, immediately
terminate such Participant’s right to any further payments, vesting or
exercisability with respect to any Award in its entirety. In the event a
Participant is party to an employment (or similar) agreement with the Company or
any Subsidiary of the Company that defines the term “cause,” such definition
shall apply for purposes of the Plan. The Company shall have the power to
determine whether the Participant has been terminated for cause and the date
upon which such termination for cause occurs. Any such determination shall be
final, conclusive and binding upon the Participant. In addition, if the Company
shall reasonably determine that a Participant has committed or may have
committed any act which could constitute the basis for a termination of such
Participant’s employment for cause, the Company may suspend the Participant’s
rights to exercise any options, receive any payment or vest in any right with
respect to any Award pending a determination by the Company of whether an act
has been committed which could constitute the basis for a termination for
“cause” as provided in this Section 11.2.

     

    ARTICLE
12

    TERMINATION
OR AMENDMENT OF THIS PLAN

     

          12.1  The Board may at any time amend,
suspend, or terminate the Plan; provided, however, that no amendments by the
Board shall, without further approval of the shareholders of the
Company:

     

               12.1.1  Change the definition of Eligible
Employees;

     

               12.1.2  Except as provided in ARTICLE 4
hereof, increase the number of Shares which may be subject to Awards granted
under the Plan; or increase the maximum number of Shares with respect to which
Awards may be granted to any Participant during any fiscal year;

     

          12.1.3  Cause the Plan or any Award
granted under the Plan that would otherwise meet the conditions for exclusion of
application of the $1 million deduction limitation imposed by Section 162(m) of
the Code to fail to meet such conditions;

     

          12.1.4  Cause any Option granted as an
Incentive Stock Option to fail to qualify as an “Incentive Stock Option” as
defined by Section 422 of the Code; or

     

          12.1.5  Where, as determined by
the Board, the approval by the shareholders may be necessary or advisable for
purposes of compliance with Section 162(m) or Section 422 of the Code, the
listing requirements of the Nasdaq Stock Market or other exchange or market or
for any other purpose, amendments to the Plan shall be approved by the
shareholders.

     

          12.2  No amendment or termination of
the Plan shall impair any Award granted under the Plan without the consent of
the holder thereof.

     

          12.3  This Plan shall continue in
effect until the expiration of all Awards granted under the Plan unless
terminated earlier in accordance with this ARTICLE 12; provided, however, that
it shall otherwise terminate
and no options shall be granted after ten (10) years from the date on which this
Plan became effective.


    
      
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    ARTICLE
13

    GENERAL
PROVISIONS

     

          13.1  Shareholder Approval. This Plan
shall become effective following its adoption by the Board and its approval by
the Company’s shareholders on the date of the 2007 Annual Meeting of
Shareholders.

     

          13.2  Award Agreements. An Award under
the Plan shall be evidenced by an Award Agreement in a written or electronic
form approved by the Committee setting forth the number of Shares, units or
rights subject to the Award, the exercise price, base price, or purchase price
of the Award, the time or times at which an Award will become vested,
exercisable or payable and the term of the Award. The Award Agreement may also
set forth the effect on an Award of termination of employment under certain
circumstances. The Award Agreement shall be subject to and incorporate, by
reference or otherwise, all of the applicable terms and conditions of the Plan,
and may also set forth other terms and conditions applicable to the Award as
determined by the Committee consistent with the limitations of the Plan. Award
Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422
of the Code. The grant of an Award under the Plan shall not confer any rights
upon the Participant holding such Award other than such terms, and subject to
such conditions, as are specified in the Plan as being applicable to such type
of Award (or to all Awards) or as are expressly set forth in the Award
Agreement. The Committee need not require the execution of an Award Agreement by
a Participant, in which case, acceptance of the Award by the Participant shall
constitute agreement by the Participant to the terms, conditions, restrictions
and limitations set forth in the Plan and the Award Agreement as well as the
administrative guidelines of the Company in effect from time to
time.

     

          13.3  Deferrals. The Committee may
permit recipients of Awards to defer the distribution of all or part of any
Award in accordance with such terms and conditions as the Committee shall
establish.

     

          13.4  Transfer; Assignment. Except as
otherwise provided in Sections 5.6, 5.7.3, 5.7.4 and 5.7.5 hereof solely with
respect to Options and except as otherwise provided below, Awards under the Plan
shall not be Transferable by the Participant or exercisable by any person other
than the Participant, and Awards under the Plan shall not be subject in any
manner to assignment, alienation, pledge, encumbrance or charge:

     

          13.4.1  During the lifetime of a
Participant, an Award is not transferable voluntarily or by operation of law and
may be exercised only by such individual;

     

          13.4.2  Upon the death of a Participant,
an Award may be transferred to the beneficiaries or heirs of the Participant
will or by will or the laws of descent and distribution;

     

          13.4.3  An Award may be transferred
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA.

     

    Notwithstanding
the above, the Committee may, with respect to particular Awards, establish or
modify the terms of the Award to allow the Award to be transferred at the
request of a Participant to trusts established by a Participant or as to which a
Participant is a grantor or to lineal descendants of a Participant or otherwise
for personal and tax planning purposes of a Participant. If the Committee allows
such transfer, such Awards shall not be exercisable for a period of six months
following the action of the Committee

     


    
      
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          13.5  Securities Laws. No Shares will
be issued or transferred pursuant to an Award unless and until all then
applicable requirements imposed by Federal and state securities and other laws,
rules and regulations and by any regulatory agencies having jurisdiction, and by
any exchanges upon which the Shares may be listed, have been fully met. As a
condition precedent to the issuance of Shares pursuant to the grant or exercise
of an Award, the Company may require the Participant to take any reasonable
action to meet such requirements. The Committee may impose such conditions on
any Shares issuable under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, under the
requirements of any exchange upon which such shares of the same class are then
listed, and under any blue sky or other securities laws applicable to such
shares. The Committee may also require the Participant to represent and warrant
at the time of issuance or transfer that the Shares are being acquired only for
investment purposes and without any current intention to sell or distribute such
shares.

     

          13.6  No Right to Continued Employment.
Neither the establishment of the Plan nor the granting of any Award hereunder
shall confer upon any Eligible Employee any right to continue in the employ of
the Company or any Subsidiary of the Company, or interfere in any way with the
right of the Company or any Subsidiary of the Company to terminate such
employment at any time.

     

          13.7  No Rights as Shareholder. Except
as otherwise provided in Section 7.4, Participant shall have no rights as a
holder of Shares with respect to any unissued securities covered by an Award
until the date the Participant becomes the holder of record of such
securities.

     

          13.8  Other Plans. The value of, or
income arising from, any Awards issued under this Plan shall not be treated as
compensation for purposes of any pension, profit sharing, life insurance,
disability or other retirement or welfare benefit plan now maintained or
hereafter adopted by the Company or any Subsidiary of the Company, unless such
plan specifically provides to the contrary.

     

          13.9  Unfunded Plan. The adoption of
the Plan and any reservation of Shares or cash amounts by the Company to
discharge its obligations hereunder shall not be deemed to create a trust or
other funded arrangement. Except upon the issuance of Common Stock pursuant to
an Award, any rights of a Participant under the Plan shall be those of a general
unsecured creditor of the Company, and neither a Participant nor the
Participant’s permitted transferees or estate shall have any other interest in
any assets of the Company by virtue of the Plan. Notwithstanding the foregoing,
the Company shall have the right to implement or set aside funds in a grantor
trust, subject to the claims of the Company’s creditors or otherwise, to
discharge its obligations under the Plan.

     

          13.10  Withholding of Taxes. The
Participant shall be responsible for payment of any taxes or similar charges
required by law to be withheld from an Award or an amount paid in satisfaction
of an Award, which shall be paid by the Participant on or prior to the payment
or other event that results in taxable income in respect of an Award. The Award
Agreement may specify the manner in which the withholding obligation shall be
satisfied with respect to the particular type of Award.

     

          13.11  Compliance with Section 409A of
the Code. Except to the extent specifically provided otherwise by the Committee,
Awards under the Plan are intended to satisfy the requirements of Section 409A
of the Code (and the Treasury Department guidance and regulations issued
thereunder) so as to avoid the imposition of any additional taxes or penalties
under Section 409A of the Code. If the Committee determines that an Award, Award
Agreement, payment, distribution, deferral election, transaction or any other
action or arrangement contemplated by the provisions of the Plan would, if
undertaken, cause a Participant to become subject to any additional taxes or
other penalties under Section 409A of the Code, then unless the Committee
specifically provides otherwise, such Award, Award Agreement, payment,
distribution, deferral election, transaction or other action or arrangement
shall not be given effect to the extent it causes such result and the related
provisions of the Plan and/or Award Agreement
will be deemed modified, or, if necessary, suspended in order to comply with the
requirements of Section 409A of the Code to the extent determined appropriate by
the Committee, in each case without the consent of or notice to the
Participant.

     


    
      
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          13.12  Severability. If any provision of
the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions
hereof and thereof shall be severable and enforceable in accordance with their
terms, and all provisions shall remain enforceable in any other
jurisdiction.

     

          13.13  Liability. No employee of the
Company and no member of the Committee or the Board shall be liable for any
action or determination taken or made in good faith with respect to the Plan or
any Award granted hereunder and, to the fullest extent permitted by law, all
employees and members of the Committee or the Board shall be indemnified by the
Company for any liability and expenses which may occur through any claim or
cause of action arising under or in connection with this Plan or any Awards
granted under this Plan.

     

          13.14  Governing Law. This Plan and
actions taken in connection with it shall be governed by the laws of Delaware,
without regard to the principles of conflict of laws.

     

    As
adopted by the Board of Directors on March 14, 2007.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    -14-