soundworldwide_s8-ex0401.htm


    Exhibit
4.1

     

    


    SOUND
WORLDWIDE HOLDINGS, INC.

    2009
STOCK INCENTIVE PLAN

     

    1.    Purpose.
   The purpose of the 2009 Stock Incentive Plan of Sound
Worldwide Holdings, Inc. is to further align the interests of employees,
directors and qualified non-employee Consultants with those of the stockholders
by (i) providing incentive compensation opportunities tied to the performance of
the Common Stock and/or by (ii) promoting increased ownership of the Common
Stock by such individuals. The Plan is also intended to advance the interests of
the Company and its stockholders by attracting, retaining and motivating key
personnel upon whose judgment, initiative and effort the successful conduct of
the Company’s business is largely and wholly dependent.

     

    2.    Definitions.
   Wherever the following capitalized terms are used in
the Plan, they shall have the meanings specified below:

     

    “Affiliate” means (i) any
person or entity that would be treated as an “affiliate” of the Company for
purposes of Rule 12b-2 under the Exchange Act and (ii) any joint venture or
other entity in which the Company has a direct or indirect beneficial ownership
interest representing at least one-third (1/3) of the aggregate voting power of
the equity interests of such entity or one-third (1/3) of the aggregate fair
market value of the equity interests of such entity, as determined by the
Committee.

     

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

     

    “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.

     

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

     

    “Code” means the Internal
Revenue Code of 1986, as amended.

     

    “Common Stock” means the
Company’s common stock, $0.001par value per share.

     

    “Committee” means the
Compensation Committee of the Board, or such other committee of the Board
appointed by the Board to administer the Plan, or if no such committee exists,
the Board.

     

    “Company” means Sound
Worldwide Holdings, Inc., a Delaware corporation.

    


    
      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

    


    


    “Consultant” means any person
which is a consultant or advisor to the Company and which is a natural person
and who provides bona fide services to the Company which are not in connection
with the offer or sale of securities in a capital-raising transaction for the
Company, and do not directly or indirectly promote or maintain a market for the
Company’s securities.

    


    “Date of Grant” means the
date on which the Committee makes an Award under the Plan, or such later date as
the Committee may specify to be the effective date of an Award.

     

    “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.

     

    “Eligible Person” means any
person who is an employee of the Company, or any Affiliate, or any person to
whom an offer of employment with the Company or any Affiliate is extended, as
determined by the Committee, or any person who is a Non-Employee Director, or
any person who is Consultant to the Company.

     

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

     

    “Fair Market Value” means the
mean between the highest and lowest reported sales prices of the Common Stock on
the New York Stock Exchange Composite Tape or, if not listed on such exchange,
on any other national securities exchange on which the Company’s common stock is
listed or on The Nasdaq Stock Market, or, if not so listed on any other national
securities exchange or The Nasdaq Stock Market, then the average of the bid
price of the Company’s common stock during the last five trading days on the OTC
Bulletin Board immediately preceding the last trading day prior to the date with
respect to which the Fair Market Value is to be determined. If the Company’s
common stock is not then publicly traded, then the Fair Market Value of the
Common Stock shall be the book value of the Company per share as determined on
the last day of March, June, September, or December in any year closest to the
date when the determination is to be made. For the purpose of determining book
value hereunder, book value shall be determined by adding as of the applicable
date called for herein the capital, surplus, and undivided profits of the
Company, and after having deducted any reserves theretofore established; the sum
of these items shall be divided by the number of shares of the Company’s common
stock outstanding as of said date, and the quotient thus obtained shall
represent the book value of each share of the Company’s common
stock.

     

    


    
      
        
           


        

        
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    “Incentive Stock Option”
means a Stock Option granted under Section 6 hereof that is intended to meet the
requirements of Section 422 of the Code and the regulations
thereunder.

     

    “Non-Employee Director” means
any member of the Board who is not an employee of the Company.

     

    “Nonqualified Stock Option”
means a Stock Option granted under Section 6 hereof that is not an Incentive
Stock Option.

     

    “Participant” means any
Eligible Person who holds an outstanding Award under the Plan.

     

    “Plan” means the 2009 Stock
Incentive Plan of Sound Worldwide Holdings, Inc. as set forth herein, as amended
from time to time.

    


    “Restricted Stock Award”
means a grant of shares of Common Stock to an Eligible Person under Section 8
hereof that are issued subject to such vesting and transfer restrictions as the
Committee shall determine and set forth in an Award Agreement.

     

    “Service” means a
Participant’s employment with the Company or any Affiliate or a Participant’s
service as a Non-Employee Director with the Company, as applicable.

     

    “Stock Award” means a grant
of shares of Common Stock to an Eligible Person under Section 7 hereof that are
issued free of transfer restrictions and forfeiture conditions.

     

    “Stock Option” means a
contractual right granted to an Eligible Person under Section 6 hereof to
purchase shares of Common Stock at such time and price, and subject to such
conditions, as are set forth in the Plan and the applicable Award
Agreement.

     

    3.
   Administration.

     

    3.1    Committee
Members.    The Plan shall be administered by a Committee
comprised of one or more members of the Board, or if no such committee exists,
the Board.

     

    


    
      
        
           


        

        
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    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 the
Eligible Persons 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. 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 (i) correct any defect, to (ii) supply any omission or to
(iii) 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
Persons, 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. However, with respect to any and all distributions of common stock
issuable hereunder-registered on Form S-8, the Company and its Committee, if
any, shall consult with and obtain written counsel and compliance authorization
from its corporate counsel prior to issuing or directing its transfer agent to
issue any such S-8 stock hereunder. Except as otherwise mentioned above, 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 have the right, from
time to time, to delegate to one or more officers of the Company the authority
of the Committee to grant and determine the terms and conditions of Awards
granted under the Plan, subject to the requirements of state law and such other
limitations as the Committee shall determine. In no event shall any such
delegation of authority be permitted with respect to Awards to any members of
the Board or to any Eligible Person who is subject to Rule 16b-3 under the
Exchange Act or Section 162(m) of the Code. The Committee shall also 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.

     

    


    
      
        
           


        

        
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    4.
   Shares Subject to the Plan.

     

    4.1    Maximum
Share Limitations.    Subject to Section 4.3 hereof, the
maximum aggregate number of shares of Common Stock that may be issued and sold
under all Awards granted under the Plan shall be registered under Form S-8 of
the Securities and Exchange Act of 1933, and not exceed Six Million (6,000,000)
common shares. Shares of Common Stock 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 of Common Stock is
forfeited, cancelled, returned to the Company for failure to satisfy vesting
requirements or other conditions of the Award, or otherwise terminates without
an issuance of shares of Common Stock being made thereunder, the shares of
Common Stock 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 of Common Stock shall not be counted against the
foregoing maximum share limitations.

     

    4.2    Adjustments.
   If there shall occur any change with respect to the
outstanding shares of Common Stock by reason of any recapitalization,
reclassification, stock dividend, extraordinary dividend, stock split, reverse
stock split or other distribution with respect to the shares of Common Stock, 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 4.1 hereof, (ii) the number and kind of shares of Common Stock, or
other rights subject to then outstanding Awards, (iii) the exercise or base
price for each share 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.

    


    4.3 Anti-Dilution.
Notwithstanding anything contained in the Plan to cover the contrary, including
any adjustments discussed in this Section 4, the maximum aggregate number of
shares of Common Stock that may be issued and sold under all Awards granted
under the Plan shall be anti-dilutive in the event of a reverse stock split by
the Company and shall not result in any reduction in the number of shares
available and authorized under the Plan at the effective time of such reverse
stock split(s).

    


    


    
      
        
           


        

        
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    5.
   Participation and Awards.

     

    5.1    Designations
of Participants.    All Eligible Persons 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 Persons who are to be granted Awards,
the types of Awards to be granted and the number of shares of Common Stock or
units subject to Awards granted under the Plan. In selecting Eligible Persons 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.

     

    5.2    Determination
of Awards.    The Committee shall determine the terms and
conditions of all Awards granted to Participants in accordance with its
authority under Section 3.2 hereof. An Award may consist of one type of right or
benefit hereunder, or of two or more such rights or benefits granted in tandem
or in the alternative. In the case of any fractional share or unit resulting
from the grant, vesting, payment or crediting of dividends or dividend
equivalents under an Award, the Committee shall have the discretionary authority
to (i) disregard such fractional share or unit, (ii) round such fractional share
or unit to the nearest lower or higher whole share or unit, or (iii) convert
such fractional share or unit into a right to receive a cash payment. To the
extent deemed necessary by the Committee, an Award Agreement as described in
Section 11.1 shall evidence an Award hereof.

     

    6.
   Stock Options.

     

    6.1    Grant of
Stock Options.    A Stock Option may be granted to any
Eligible Person selected by the Committee. Subject to the provisions of Section
6.8 hereof and Section 422 of the Code, each Stock Option shall be designated,
in the discretion of the Committee, as an Incentive Stock Option or as a
Nonqualified Stock Option.

     

    6.2    Exercise
Price.    The exercise price per share of a Stock Option
shall not be less than 85 percent of the Fair Market Value of the shares of
Common Stock on the Date of Grant, provided that the Committee may in its
discretion specify for any Stock Option an exercise price per share that is
higher than the Fair Market Value on the Date of Grant, except that the price
shall not be less than 110 percent of the Fair Market Value in the case of any
person who owns securities possessing more than 10 percent of the total combined
voting power of all classes of securities of the Company.

     

    


    
      
        
           


        

        
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    6.3    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,
provided, however, that any Stock Option shall vest at the rate of at least
twenty percent (20%) per year over five (5) years from the date the Stock Option
is granted, subject to reasonable conditions as may be provided for in the Award
Agreement. However, in the case of a Stock Option granted to officers,
Non-employee Directors, managers or Consultants of the Company, the Stock Option
may become fully exercisable, subject to reasonable conditions, at anytime or
during any period established by the Company. The requirements for vesting and
exercisability of a Stock Option may be based on the continued Service of the
Participant with the Company or its Affiliates for a specified time period (or
periods) or on the attainment of specified performance goals established by the
Committee in its discretion.

     

    6.4    Term of
Stock Options.    The Committee shall in its discretion
prescribe in an Award Agreement the period during which a vested Stock Option
may be exercised, provided that the maximum term of a Stock Option shall be ten
years from the Date of Grant. Except as otherwise provided in this Section 6 or
as otherwise may be provided by the Committee, no Stock Option issued to an
employee or a Non-Employee Director of the Company may be exercised at any time
during the term thereof unless the employee or a Non-Employee Director
Participant is then in the Service of the Company or one of its
Affiliates.

     

    6.5    Termination
of Service.    Subject to Section 6.8 hereof with respect
to Incentive Stock Options, the Stock Option of any Participant whose Service
with the Company or one of its Affiliates is terminated for any reason shall
terminate on the earlier of (A) the date that the Stock Option expires in
accordance with its terms or (B) unless otherwise provided in an Award
Agreement, and except for termination for cause (as described in Section 10.2
hereof), the expiration of the applicable time period following termination of
Service, in accordance with the following: (1) twelve months if Service ceased
due to Disability, (2) eighteen months if Service ceased at a time when the
Participant is eligible to elect immediate commencement of retirement benefits
at a specified retirement age under a pension plan to which the Company or any
of its Affiliates had made contributions, (3) eighteen months if the Participant
died while in the Service of the Company or any of its Affiliates, or (iv) three
months if Service ceased for any other reason. During the foregoing applicable
period, except as otherwise specified in the Award Agreement or in the event
Service was terminated by the death of the Participant, the Stock Option may be
exercised by such Participant in respect of the same number of shares of Common
Stock, in the same manner, and to the same extent as if he or she had remained
in the continued Service of the Company or any Affiliate during the first three
months of such period; provided that no additional rights shall vest after such
three months. The Committee shall have authority to determine in each case
whether an authorized leave of absence shall be deemed a termination of Service
for purposes hereof, as well as the effect of a leave of absence on the vesting
and exercisability of a Stock Option. Unless otherwise provided by the
Committee, if an entity ceases to be an Affiliate of the Company or otherwise
ceases to be qualified under the Plan or if all or substantially all of the
assets of an Affiliate of the Company are conveyed (other than by encumbrance),
such cessation or action, as the case may be, shall be deemed for purposes
hereof to be a termination of the Service.

    


    


    
      
        
           


        

        
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    6.6    Stock
Option Exercise; Tax Withholding.    Subject to such terms
and conditions as shall be specified in an Award Agreement, a Stock Option may
be exercised in whole or in part at any time during the term thereof by notice
in the form required by the Company, together with payment of the aggregate
exercise price therefor and applicable withholding tax. Payment of the exercise
price shall be made in the manner set forth in the Award Agreement, unless
otherwise provided by the Committee: (i) in cash or by cash equivalent
acceptable to the Committee, (ii) by payment in shares of Common Stock that have
been held by the Participant for at least six months (or such period as the
Committee may deem appropriate, for accounting purposes or otherwise) valued at
the Fair Market Value of such shares on the date of exercise, (iii) through an
open-market, broker-assisted sales transaction pursuant to which the Company is
promptly delivered the amount of proceeds necessary to satisfy the exercise
price, (iv) by a combination of the methods described above or (v) by such other
method as may be approved by the Committee and set forth in the Award Agreement.
In addition to and at the time of payment of the exercise price, the Participant
shall pay to the Company the full amount of any and all applicable income tax,
employment tax and other amounts required to be withheld in connection with such
exercise, payable under such of the methods described above for the payment of
the exercise price as may be approved by the Committee and set forth in the
Award Agreement.

     

    6.7    Limited
Transferability of Nonqualified Stock Options.    All
Stock Options shall be nontransferable except (i) upon the Participant’s death,
in accordance with Section 11.2 hereof or (ii) in the case of Nonqualified 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 discretion at the time of proposed transfer. The transfer
of a Nonqualified 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 Nonqualified Stock Option shall be prohibited other than in
accordance with Section 11.2 hereof.

     

    


    
      
        
           


        

        
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    6.8    Additional
Rules for Incentive Stock Options.

     

    (a)    Eligibility.
   An Incentive Stock Option may only be granted to an
Eligible Person who is considered an employee for purposes of Treasury
Regulation Sec.1.421-7(h) with respect to the Company or any Affiliate that
qualifies as a “subsidiary corporation” with respect to the Company for purposes
of Section 424(f) of the Code.

     

    (b)     Termination
of Employment.    An Award of an Incentive Stock Option
may provide that such Stock Option may be exercised not later than 3 months
following termination of employment of the Participant with the Company and all
Subsidiaries, or not later than one year following a permanent and total
disability within the meaning of Section 22(e)(3) of the Code, as and to the
extent determined by the Committee to comply with the requirements of Section
422 of the Code.

     

    (c)    Other
Terms and Conditions; Nontransferability.    Any Incentive
Stock Option granted hereunder shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as are deemed necessary
or desirable by the Committee, which terms, together with the terms of the Plan,
shall be intended and interpreted to cause such Incentive Stock Option to
qualify as an “incentive stock option” under Section 422 of the Code. An Award
Agreement for an Incentive Stock Option may provide that such Stock Option shall
be treated as a Nonqualified Stock Option to the extent that certain
requirements applicable to “incentive stock options” under the Code shall not be
satisfied. An Incentive Stock Option shall by its terms be nontransferable other
than by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of a Participant only by such
Participant.

     

    (d)    Disqualifying
Dispositions.    If shares of Common Stock acquired by
exercise of an Incentive Stock Option are disposed of within two years following
the Date of Grant or one year following the transfer of such shares to the
Participant upon exercise, the Participant shall, promptly following such
disposition, notify the Company in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Company may reasonably require.

     

    6.9    Repricing
Prohibited.    Subject to the adjustment provisions
contained in Section 4.2 hereof, without the prior approval of the Company’s
stockholders, 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 “re-pricing” under the then
applicable rules, regulations or listing requirements.

     

    


    
      
        
           


        

        
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    7.
   Stock Awards.

     

    7.1    Grant of
Stock Awards.    A Stock Award may be granted to any
Eligible Person selected by the Committee. A Stock Award may be granted for past
services, in lieu of bonus or other cash compensation, as directors’
compensation or for any other valid purpose as determined by the Committee. A
Stock Award granted to an Eligible Person represents shares of Common Stock 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 deemed issuance price of shares of Common Stock subject to
each Stock Award shall not be less than 85 percent of the Fair Market Value of
the Common Stock on the date of the grant. In the case of any person who owns
securities possessing more than ten percent of the combined voting power of all
classes of securities of the issuer or its parent or subsidiaries possessing
voting power, the deemed issuance price of shares of Common Stock subject to
each Stock Award shall be at least 100 percent of the Fair Market Value of the
Common Stock on the date of the grant. The Committee may, in connection with any
Stock Award, require the payment of a specified purchase price.

     

    7.2    Rights as
Stockholder.    Subject to the foregoing provisions of
this Section 7 and the applicable Award Agreement, upon the issuance of the
Common Stock under a Stock Award the Participant shall have all rights of a
stockholder with respect to the shares of Common Stock, including the right to
vote the shares and receive all dividends and other distributions paid or made
with respect thereto.

    


    8.    Restricted
Stock Awards. 

     

    8.1    Grant of
Restricted Stock Awards.    A Restricted Stock Award
may be granted to any Eligible Person selected by the Committee. The deemed
issuance price of shares of Common Stock subject to each Restricted Stock Award
shall not be less than 85 percent of the Fair Market Value of the Common Stock
on the date of the grant. In the case of any person who owns securities
possessing more than ten percent of the combined voting power of all classes of
securities of the issuer or its parent or subsidiaries possessing voting power,
the deemed issuance price of shares of Common Stock subject to each Restricted
Stock Award shall be at least 100 percent of the Fair Market Value of the Common
Stock on the date of the grant. The Committee may require the payment by the
Participant of a specified purchase price in connection with any Restricted
Stock Award.

     

    


    
      
        
           


        

        
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    8.2    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 Service of the
Participant with the Company or its Affiliates 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 of
Common Stock subject to the Award shall be returned to the Company.

     

    8.3    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.

     

    8.4    Rights as
Stockholder.    Subject to the foregoing provisions
of this Section 8 and the applicable Award Agreement, the Participant shall have
all rights of a stockholder 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
stockholders generally or at the times of vesting or other payment of the
Restricted Stock Award.

     

    8.5    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 Date of Grant, 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.

     

    9.
   Change in Control.

     

    


    
      
        
           


        

        
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    9.1    Effect of
Change in Control.    Except to the extent an Award
Agreement provides for a different result (in which case the Award Agreement
will govern and this Section 9 of the Plan shall not be applicable),
notwithstanding anything elsewhere in the Plan or any rules adopted by the
Committee pursuant to the Plan to the contrary, if a Triggering Event shall
occur within the 12-month period beginning with a Change in Control of the
Company, then, effective immediately prior to such Triggering Event, each
outstanding Stock Option, to the extent that it shall not otherwise have become
vested and exercisable, shall automatically become fully and immediately vested
and exercisable, without regard to any otherwise applicable vesting
requirement.

     

    9.2    Definitions 

     

    (a)    Cause.
   For purposes of this Section 9, the term “Cause” shall
mean a determination by the Committee that a Participant (i) has been convicted
of, or entered a plea of nolo contendere to, a crime that constitutes a felony
under Federal or state law, (ii) has engaged in willful gross misconduct in the
performance of the Participant’s duties to the Company or an Affiliate or (iii)
has committed a material breach of any written agreement with the Company or any
Affiliate with respect to confidentiality, noncompetition, nonsolicitation or
similar restrictive covenant. Subject to the first sentence of Section 9.1
hereof, in the event that a Participant is a party to an employment agreement
with the Company or any Affiliate that defines a termination on account of
“Cause” (or a term having similar meaning), such definition shall apply as the
definition of a termination on account of “Cause” for purposes hereof, but only
to the extent that such definition provides the Participant with greater rights.
A termination on account of Cause shall be communicated by written notice to the
Participant, and shall be deemed to occur on the date such notice is delivered
to the Participant.

     

    (b)    Change in
Control.    For purposes of this Section 9, a “Change in
Control” shall be deemed to have occurred upon:

     

    (i) the
occurrence of an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of a percentage of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Company Voting Securities”) (but excluding (1) any
acquisition directly from the Company (other than an acquisition by virtue of
the exercise of a conversion privilege of a security that was not acquired
directly from the Company), (2) any acquisition by the Company or an Affiliate
and (3) any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company or any Affiliate) (an “Acquisition”) that is thirty
percent (30%) or more of the Company Voting Securities;

     

    


    
      
        
           


        

        
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    (ii) at
any time during a period of two (2) consecutive years or less, individuals who
at the beginning of such period constitute the Board (and any new directors
whose election by the Board or nomination for election by the Company’s
stockholders 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 so approved) cease for
any reason (except for death, Disability or voluntary retirement) to constitute
a majority thereof;

     

    (iii) an
Acquisition that is fifty percent (50%) or more of the Company Voting
Securities;

     

    (iv) the
consummation of a merger, consolidation, reorganization or similar corporate
transaction, whether or not the Company is the surviving company in such
transaction, other than a merger, consolidation, or reorganization that would
result in the Persons who are beneficial owners of the Company Voting Securities
outstanding immediately prior thereto continuing to beneficially own, directly
or indirectly, in substantially the same proportions, at least fifty percent
(50%) of the combined voting power of the Company Voting Securities (or the
voting securities of the surviving entity) outstanding immediately after such
merger, consolidation or reorganization;

     

    (v) the
sale or other disposition of all or substantially all of the assets of the
Company;

     

    (vi) the
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company; or

     

    (vii) the
occurrence of any transaction or event, or series of transactions or events,
designated by the Board in a duly adopted resolution as representing a change in
the effective control of the business and affairs of the Company, effective as
of the date specified in any such resolution.

     

    (c)    Constructive
Termination.    For purposes of this Section 9, a
“Constructive Termination” shall mean a termination of employment by a
Participant within sixty (60) days following the occurrence of any one or more
of the following events without the Participant’s written consent (i) any
reduction in position, title (for Vice Presidents or above), overall
responsibilities, level of authority, level of reporting (for Vice Presidents or
above), base compensation, annual incentive compensation opportunity, aggregate
employee benefits or (ii) a request that the Participant’s location of
employment be relocated by more than fifty (50) miles. Subject to the first
sentence of Section 9.1 hereof, in the event that a Participant is a party to an
employment agreement with the Company or any Affiliate (or a successor entity)
that defines a termination on account of “Constructive Termination,” “Good
Reason” or “Breach of Agreement” (or a term having a similar meaning), such
definition shall apply as the definition of “Constructive Termination” for
purposes hereof in lieu of the foregoing, but only to the extent that such
definition provides the Participant with greater rights. A Constructive
Termination shall be communicated by written notice to the Committee, and shall
be deemed to occur on the date such notice is delivered to the Committee, unless
the circumstances giving rise to the Constructive Termination are cured within
five (5) days of such notice.

     

    


    
      
        
           


        

        
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    (d)    Triggering
Event.    For purposes of this Section 9, a “Triggering
Event” shall mean (i) the termination of Service of a Participant by the Company
or an Affiliate (or any successor thereof) other than on account of death,
Disability or Cause, (ii) the occurrence of a Constructive Termination or (iii)
any failure by the Company (or a successor entity) to assume, replace, convert
or otherwise continue any Award in connection with the Change in Control (or
another corporate transaction or other change effecting the Common Stock) on the
same terms and conditions as applied immediately prior to such transaction,
except for equitable adjustments to reflect changes in the Common Stock pursuant
to Section 4.2 hereof.

     

    9.3    Excise
Tax Limit.    In the event that the vesting of Awards
together with all other payments and the value of any benefit received or to be
received by a Participant would result in all or a portion of such payment being
subject to the excise tax under Section 4999 of the Code, then the Participant’s
payment shall be either (i) the full payment or (ii) such lesser amount that
would result in no portion of the payment being subject to excise tax under
Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts,
taking into account the applicable Federal, state, and local employment taxes,
income taxes, and the Excise Tax, results in the receipt by the Participant, on
an after-tax basis, of the greatest amount of the payment notwithstanding that
all or some portion of the payment may be taxable under Section 4999 of the
Code. All determinations required to be made under this Section 9 shall be made
by Malone & Bailey, PLLC or any other accounting firm which is the Company’s
outside auditor immediately prior to the event triggering the payments that are
subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the
Accounting Firm to provide detailed supporting calculations of its
determinations to the Company and the Participant. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. The Accounting Firm’s
determinations must be made with substantial authority (within the meaning of
Section 6662 of the Code). For the purposes of all calculations under Section
280G of the Code and the application of this Section 9.3, all determinations as
to present value shall be made using 120 percent of the applicable Federal rate
(determined under Section 1274(d) of the Code) compounded semiannually, as in
effect on December 30, 2004.

     

    


    
      
        
           


        

        
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    10.
   Forfeiture Events.

     

    10.1    General.
   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 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 Service 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.

     

    10.2    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 Affiliate 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 Affiliate 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 option, 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 10.2.

     

    11.
   General Provisions.

     

    11.1    Award
Agreement.    To the extent deemed necessary by the
Committee, 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 of Common Stock or units 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 Service
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.

     

    


    
      
        
           


        

        
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    11.2    No
Assignment or Transfer; Beneficiaries.    Except as
provided in Section 6.7 hereof, Awards under the Plan shall not be assignable or
transferable by the Participant, except by will or by the laws of descent and
distribution, and shall not be subject in any manner to assignment, alienation,
pledge, encumbrance or charge. Notwithstanding the foregoing, the Committee may
provide in the terms of an Award Agreement that the Participant shall have the
right to designate a beneficiary or beneficiaries who shall be entitled to any
rights, payments or other benefits specified under an Award following the
Participant’s death. During the lifetime of a Participant, an Award shall be
exercised only by such Participant or such Participant’s guardian or legal
representative. In the event of a Participant’s death, an Award may to the
extent permitted by the Award Agreement be exercised by the Participant’s
beneficiary as designated by the Participant in the manner prescribed by the
Committee or, in the absence of an authorized beneficiary designation, by the
legatee of such Award under the Participant’s will or by the Participant’s
estate in accordance with the Participant’s will or the laws of descent and
distribution, in each case in the same manner and to the same extent that such
Award was exercisable by the Participant on the date of the Participant’s
death.

     

    11.3    Deferrals
of Payment.    The Committee may in its discretion permit
a Participant to defer the receipt of payment of cash or delivery of shares of
Common Stock that would otherwise be due to the Participant by virtue of the
exercise of a right or the satisfaction of vesting or other conditions with
respect to an Award. If any such deferral is to be permitted by the Committee,
the Committee shall establish rules and procedures relating to such deferral in
a manner intended to comply with the requirements of Section 409A of the Code,
including, without limitation, the time when an election to defer may be made,
the time period of the deferral and the events that would result in payment of
the deferred amount, the interest or other earnings attributable to the deferral
and the method of funding, if any, attributable to the deferred
amount.

     

    


    
      
        
           


        

        
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    11.4    Rights
as Stockholder.    A Participant shall have no rights as a
holder of shares of Common Stock with respect to any unissued securities covered
by an Award until the date the Participant becomes the holder of record of such
securities. Except as provided in Section 4.2 hereof, no adjustment or other
provision shall be made for dividends or other stockholder rights, except to the
extent that the Award Agreement provides for dividend payments or dividend
equivalent rights.

    


    11.5    Employment
or Service.    Nothing in the Plan, in the grant of any
Award or in any Award Agreement shall confer upon any Eligible Person any right
to continue in the Service of the Company or any of its Affiliates, or interfere
in any way with the right of the Company or any of its Affiliates to terminate
the Participant’s employment or other service relationship for any reason at any
time.

     

    11.6    Securities
Laws.    No shares of Common Stock 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 of Common Stock 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 of Common Stock issuable under the Plan as it may deem
advisable, including, without limitation, restrictions under the Securities Act
of 1933, as amended, 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 of Common Stock are being acquired only for investment purposes and
without any current intention to sell or distribute such shares.

     

    11.7    Tax
Withholding.    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.

     

    11.8    Unfunded
Plan.    The adoption of the Plan and any reservation of
shares of Common Stock 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.

     

    


    
      
        
           


        

        
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    11.9    Other
Compensation and Benefit Plans.    The adoption of the
Plan shall not affect any other share incentive or other compensation plans in
effect for the Company or any Affiliate, nor shall the Plan preclude the Company
from establishing any other forms of share incentive or other compensation or
benefit program for employees of the Company or any Affiliate. The amount of any
compensation deemed to be received by a Participant pursuant to an Award shall
not constitute includable compensation for purposes of determining the amount of
benefits to which a Participant is entitled under any other compensation or
benefit plan or program of the Company or an Affiliate, including, without
limitation, under any pension or severance benefits plan, except to the extent
specifically provided by the terms of any such plan.

     

    11.10    Plan
Binding on Transferees.    The Plan shall be binding upon
the Company, its transferees and assigns, and the Participant, the Participant’s
executor, administrator and permitted transferees and
beneficiaries.

     

    11.11    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.

     

    11.12    Foreign
Jurisdictions.    The Committee may adopt, amend and
terminate such arrangements and grant such Awards, not inconsistent with the
intent of the Plan, as it may deem necessary or desirable to comply with any
tax, securities, regulatory or other laws of other jurisdictions with respect to
Awards that may be subject to such laws. The terms and conditions of such Awards
may vary from the terms and conditions that would otherwise be required by the
Plan solely to the extent the Committee deems necessary for such purpose.
Moreover, the Board may approve such supplements to or amendments, restatements
or alternative versions of the Plan, not inconsistent with the intent of the
Plan, as it may consider necessary or appropriate for such purposes, without
thereby affecting the terms of the Plan as in effect for any other
purpose.

     

    11.13    Substitute
Awards in Corporate Transactions.    Nothing contained in
the Plan shall be construed to limit the right of the Committee to grant Awards
under the Plan in connection with the acquisition, whether by purchase, merger,
consolidation or other corporate transaction, of the business or assets of any
corporation or other entity. Without limiting the foregoing, the Committee may
grant Awards under the Plan to an employee or director of another corporation
who becomes an Eligible Person by reason of any such corporate transaction in
substitution for awards previously granted by such corporation or entity to such
person. The terms and conditions of the substitute Awards may vary from the
terms and conditions that would otherwise be required by the Plan solely to the
extent the Committee deems necessary for such purpose.

     

    


    
      
        
           


        

        
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    11.14 Governing Law. The Plan
and all rights hereunder shall be subject to and interpreted in accordance with
the laws of the State of Delaware, without reference to the principles of
conflicts of laws, and to applicable Federal securities laws.

    


    11.15 Financial Statements.
All Participants shall receive the financial statements of the Company at
least annually.  

     

    11.16 Performance Based
Awards.    For purposes of Stock Awards and
Restricted Stock Awards granted under the Plan that are intended to qualify as
“performance-based” compensation under Section 162(m) of the Code, such Awards
shall be granted to the extent necessary to satisfy the requirements of Section
162(m) of the Code.

    


    11.17 Stockholder Approval.
The Plan must be approved by the stockholders by a majority of all shares
entitled to vote within twelve (12) months after the date the Plan was adopted
by the Board. Any Incentive Stock Options granted before stockholder approval is
obtained shall be converted into Nonqualified Stock Options if stockholder
approval is not obtained within twelve (12) months before or after the Plan was
adopted.

     

    12.
   Effective Date; Amendment and Termination.

     

    12.1    Effective
Date.    The Plan shall become effective following its
adoption by the Board. The term of the Plan shall be ten (10) years from the
date of adoption by the Board, subject to Section 12.3 hereof.

     

    12.2    Amendment.
    The Board may at any time and from time to time and in
any respect, amend, modify or terminate the Plan. The Board may seek the
approval of any amendment or modification by the Company’s stockholders to the
extent it deems necessary or advisable in its discretion for purposes of
compliance with Section 162(m) or Section 422 of the Code, or exchange or
securities market or for any other purpose. No amendment or modification of the
Plan shall adversely affect any Award theretofore granted without the consent of
the Participant or the permitted transferee of the Award.

     

     

    
      12.3    Termination.
   The Plan shall terminate on the tenth anniversary of
the date of its adoption by the Board. The Board may, in its discretion and at
any earlier date, terminate the Plan. Notwithstanding the foregoing, no
termination of the Plan shall adversely affect any Award theretofore granted
without the consent of the Participant or the permitted transferee of the
Award.

    

     

     

     

     

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