TERMINATION DATE" SHALL MEAN THE
TENTH ANNIVERSARY OF THE DATE HEREOF.
(I)
"OPTION PRICE" SHALL MEAN, WITH RESPECT
TO EACH SHARE COVERED BY AN OPTION, THE EXERCISE PRICE AT WHICH THE GRANTEE MAY
PURCHASE SUCH SHARE PURSUANT TO SUCH OPTION AS DETERMINED IN
SECTION 2(B) HEREOF.
(J)
"PERSON" SHALL MEAN ANY NATURAL PERSON,
FIRM, PARTNERSHIP, LIMITED LIABILITY COMPANY, ASSOCIATION, CORPORATION, COMPANY,
TRUST, BUSINESS TRUST, GOVERNMENTAL AUTHORITY OR OTHER ENTITY.
(K)
"PLAN" SHALL HAVE THE MEANING SET FORTH IN
THE RECITALS TO THIS AGREEMENT.
(L)
"RULE 144" SHALL MEAN RULE 144
PROMULGATED UNDER THE SECURITIES ACT.
(M)
"SHARES" SHALL MEAN THE SHARES OF COMMON STOCK
SUBJECT TO THE OPTIONS.
(N)
"SPONSORS" SHALL MEAN THE NORTH CASTLE
PARTNERS, L.L.C., AND CHILDS.
(O)
"SUCCESSOR" SHALL MEAN, WITH RESPECT TO ANY
PERSON, A PERSON THAT SUCCEEDS TO THE FIRST PERSON'S ASSETS AND LIABILITIES BY
MERGER, LIQUIDATION, DISSOLUTION OR OTHERWISE BY OPERATION OF LAW, OR A PERSON
TO WHICH ALL OR SUBSTANTIALLY ALL THE ASSETS AND/OR BUSINESS OF THE FIRST PERSON
ARE TRANSFERRED.
2
2.
GRANT OF OPTIONS.
(A)
CONFIRMATION OF GRANT.
THE COMPANY HEREBY
EVIDENCES AND CONFIRMS ITS GRANT TO THE GRANTEE, EFFECTIVE AS OF THE DATE
HEREOF, OF "TOTAL_OPTIONS" OPTIONS.
THE OPTIONS ARE NOT INTENDED TO BE
INCENTIVE STOCK OPTIONS UNDER THE U.S. INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS AGREEMENT IS SUBORDINATE TO, AND THE TERMS AND CONDITIONS OF THE
OPTIONS GRANTED HEREUNDER ARE SUBJECT TO, THE TERMS AND CONDITIONS OF THE PLAN.
IF THERE IS ANY INCONSISTENCY BETWEEN THE TERMS HEREOF AND THE TERMS OF THE
PLAN, THE TERMS OF THE PLAN SHALL GOVERN.
(B)
OPTION PRICE.
EACH OPTION GRANTED HEREUNDER
SHALL HAVE THE OPTION PRICE PER SHARE SET FORTH OPPOSITE THE NUMBER OF OPTIONS
ON SCHEDULE A ATTACHED HERETO, WHICH IN EACH CASE IS NOT LESS THAN THE FAIR
MARKET VALUE ON THE GRANT DATE.
3.
VESTING AND EXERCISABILITY.
(A)
OPTIONS.
UPON THE OCCURRENCE OF A CHANGE
OF CONTROL OR PUBLIC OFFERING, IF THE SPONSORS REALIZE AN INTERNAL RATE OF
RETURN OF AT LEAST TWENTY PERCENT (20%), THIRTY-THREE AND ONE THIRD (331/3%) OF
THE OPTIONS SHALL BECOME VESTED AND EXERCISABLE; PROVIDED, THAT, FOR EACH ONE
PERCENT (1%) (OR PORTION THEREOF) INCREASE IN SUCH RETURN (ABOVE 20%) REALIZED
BY THE SPONSORS UPON THE OCCURRENCE OF SUCH EVENT, AN ADDITIONAL SIX AND
TWO-THIRDS PERCENT (62/3%) (OR PORTION THEREOF) OF THE OPTIONS SHALL BECOME
VESTED AND EXERCISABLE; PROVIDED, FURTHER, THAT, ONE HUNDRED PERCENT (100%) OF
THE OPTIONS SHALL BECOME VESTED AND EXERCISABLE UPON THE OCCURRENCE OF SUCH
EVENT IF THE RETURN REALIZED BY THE SPONSORS EQUALS OR EXCEEDS THIRTY PERCENT
(30%).
THE SPONSORS' REALIZED INTERNAL RATE OF RETURN WILL BE CALCULATED AFTER
GIVING FULL EFFECT TO THE DILUTION OF THE SPONSORS' INTEREST IN THE COMPANY BY
THE VALUE OF THE OUTSTANDING OPTIONS THAT CAN BE EXERCISED UPON SUCH CHANGE OF
CONTROL OR PUBLIC OFFERING.
IN THE EVENT LESS THAN 100% OF THE OPTIONS GRANTED
HEREUNDER BECOME VESTED AS A RESULT OF THE FIRST CHANGE IN CONTROL OR PUBLIC
OFFERING, UPON ANY