Document:

Unassociated Document

     

    
      Exhibit
10.17

      

      

       

      

      

      

      

      

      KINGTONE
WIRELESSINFO SOLUTION HOLDING LTD

      

      2010
OMNIBUS INCENTIVE PLAN

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE OF
CONTENTS

       

      
        
          	
                  1.

                	
                  Purpose.

                	
                  1

                
	
                  2.

                	
                  Definitions.

                	
                  1

                
	
                  3.

                	
                  Administration
      Of The Plan

                	
                  6

                
	
                  3.1.

                	
                  Board.

                	
                  6

                
	
                  3.2.

                	
                  Committee.

                	
                  6

                
	
                  3.3.

                	
                  Jurisdictions.

                	
                  7

                
	
                  3.4.

                	
                  Terms
      of Awards.

                	
                  7

                
	
                  3.5.

                	
                  No
      Repricing.

                	
                  8

                
	
                  3.6.

                	
                  Deferral
      Arrangement.

                	
                  8

                
	
                  3.7.

                	
                  No
      Liability.

                	
                  8

                
	
                  3.8.

                	
                  Share
      Issuance/Book-Entry.

                	
                  8

                
	
                  4.

                	
                  Stock
      Subject To The Plan.

                	
                  8

                
	
                  4.1.

                	
                  Number
      of Shares Available for Awards and Conversion into ADSs.

                	
                  8

                
	
                  4.2.

                	
                  Adjustments
      in Authorized Shares.

                	
                  9

                
	
                  4.3.

                	
                  Share
      Usage.

                	
                  9

                
	
                  5.

                	
                  Effective
      Date, Duration and Amendments.

                	
                  9

                
	
                  5.1.

                	
                  Effective
      Date.

                	
                  9

                
	
                  5.2.

                	
                  Term.

                	
                  9

                
	
                  5.3.

                	
                  Amendment
      and Termination of the Plan.

                	
                  9

                
	
                  6.

                	
                  Award
      Eligibility and Limitations.

                	
                  10

                
	
                  6.1.

                	
                  Service
      Providers and Other Persons.

                	
                  10

                
	
                  6.2.

                	
                  Adjustments
      in Authorized Shares.

                	
                  10

                
	
                  7.

                	
                  Award
      Agreement.

                	
                  10

                
	
                  8.

                	
                  Terms
      and Conditions of Options.

                	
                  10

                
	
                  8.1.

                	
                  Option
      Price.

                	
                  10

                
	
                  8.2.

                	
                  Vesting.

                	
                  10

                
	
                  8.3.

                	
                  Term.

                	
                  10

                
	
                  8.4.

                	
                  Termination
      of Service.

                	
                  11

                
	
                  8.5.

                	
                  Limitations
      on Exercise of Option.

                	
                  11

                
	
                  8.6.

                	
                  Method
      of Exercise.

                	
                  11

                
	
                  8.7.

                	
                  Rights
      of Holders of Options.

                	
                  11

                
	
                  8.8.

                	
                  Delivery
      of Stock Certificates.

                	
                  11

                
	
                  8.9.

                	
                  Transferability
      of Options.

                	
                  12

                
	
                  8.10.

                	
                  Family
      Transfers.

                	
                  12

                
	
                  8.11.

                	
                  Limitations
      on Incentive Stock Options.

                	
                  12

                
	
                  8.12.

                	
                  Notice
      of Disqualifying Disposition.

                	
                  12

                
	
                  9.

                	
                  Terms
      and Conditions of Stock Appreciation Rights

                	
                  12

                
	
                  9.1.

                	
                  Right
      to Payment and Grant Price.

                	
                  12

                
	
                  9.2.

                	
                  Other
      Terms.

                	
                  13

                
	
                  9.3.

                	
                  Term.

                	
                  14

                
	
                  9.4.

                	
                  Transferability
      of SARS.

                	
                  14

                
	
                  9.5.

                	
                  Family
      Transfers.

                	
                  14

                
	
                  10.

                	
                  Terms
      and Conditions of Restricted Stock and Stock Units

                	
                  14

                
	
                  10.1.

                	
                  Grant
      of Restricted Stock or Stock Units.

                	
                  14

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  10.2.

                	
                  Restrictions.

                	
                  14

                
	
                  10.3.

                	
                  Restricted
      Stock Certificates.

                	
                  14

                
	
                  10.4.

                	
                  Rights
      of Holders of Restricted Stock.

                	
                  15

                
	
                  10.5.

                	
                  Rights
      of Holders of Stock Units.

                	
                  15

                
	
                  10.6.

                	
                  Termination
      of Service.

                	
                  15

                
	
                  10.7.

                	
                  Purchase
      of Restricted Stock and Shares Subject to Stock Units.

                	
                  15

                
	
                  10.8.

                	
                  Delivery
      of Stock.

                	
                  16

                
	
                  11.

                	
                  Terms
      and Conditions of Unrestricted Stock Awards.

                	
                  16

                
	
                  12.

                	
                  Terms
      and Conditions of Dividend Equivalent Rights

                	
                  16

                
	
                  12.1.

                	
                  Dividend
      Equivalent Rights

                	
                  16

                
	
                  12.2.

                	
                  Termination
      of Service.

                	
                  16

                
	
                  13.

                	
                  Payment.

                	
                  17

                
	
                  14.

                	
                  Parachute
      Limitations.

                	
                  17

                
	
                  15.

                	
                  Requirements
      of Law

                	
                  18

                
	
                  15.1.

                	
                  General.

                	
                  18

                
	
                  15.2.

                	
                  Rule
      16b-3.

                	
                  19

                
	
                  16.

                	
                  Effect
      of Changes in Capitalization

                	
                  19

                
	
                  16.1.

                	
                  Changes
      in Stock

                	
                  19

                
	
                  16.2.

                	
                  Reorganization
      in Which the Company Is the Surviving Entity Which does not Constitute a
      Corporate Transaction.

                	
                  20

                
	
                  16.3.

                	
                  Corporate
      Transaction in which Awards are not Assumed.

                	
                  20

                
	
                  16.4.

                	
                  Corporation
      Transaction in which Awards are Assumed.

                	
                  22

                
	
                  16.5.

                	
                  Adjustments.

                	
                  22

                
	
                  16.6.

                	
                  No
      Limitations on Company.

                	
                  22

                
	
                  17.

                	
                  General
      Provisions.

                	
                  22

                
	
                  17.1.

                	
                  Disclaimer
      of Rights.

                	
                  22

                
	
                  17.2.

                	
                  Nonexclusivity
      of the Plan.

                	
                  23

                
	
                  17.3.

                	
                  Withholding
      Taxes.

                	
                  24

                
	
                  17.4.

                	
                  Captions.

                	
                  24

                
	
                  17.5.

                	
                  Other
      Provisions.

                	
                  24

                
	
                  17.6.

                	
                  Number
      and Gender.

                	
                  24

                
	
                  17.7.

                	
                  Severability.

                	
                  24

                
	
                  17.8.

                	
                  Governing
      Law.

                	
                  24

                
	
                  17.9.

                	
                  Code
      Section 409A.

                	
                  25

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

      

      KINGTONE
WIRELESSINFO SOLUTION HOLDING LTD

      2010
OMNIBUS INCENTIVE PLAN

      

      Kingtone Wirelessinfo Solution Holding
Ltd, a British Virgin Islands company (the “Company”), sets forth herein
the terms of its 2010 Omnibus Incentive Plan (the “Plan”), as
follows:

      

       

      
        	
                 
      

              	
                1.

              	
                PURPOSE.

              

      

       The
Plan is intended to enhance the Company’s and its Affiliates’ (as defined
herein) ability to attract and retain highly qualified officers, directors, key
employees, and other persons, and to motivate such persons to serve the Company
and its Affiliates and to expend maximum effort to improve the business results
and earnings of the Company, by providing to such persons an opportunity to
acquire or increase a direct proprietary interest in the operations and future
success of the Company. To this end, the Plan provides for the grant of stock
options, stock appreciation rights, restricted stock, stock units (including
deferred stock units), unrestricted stock, dividend equivalent rights, and cash
bonus awards. Stock options granted under the Plan may be non-qualified stock
options or incentive stock options, as provided herein, except that stock
options granted to outside directors and any consultants or advisers providing
services to the Company or an Affiliate shall in all cases be non-qualified
stock options.

       

      
        	
                 
      

              	
                2.

              	
                DEFINITIONS.

              

      

       For
purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

       

      2.1.           “Affiliate” means, with
respect to the Company, any company or other trade or business that controls, is
controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act, including, without
limitation, any Subsidiary. For purposes of granting stock options or stock
appreciation rights, an entity may not be considered an Affiliate unless the
Company holds a “controlling interest” in such entity, where the term
“controlling interest” has the same meaning as provided in Treasury Regulation
1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is
used instead of “at least 80 percent” and, provided further, that where
granting of stock options or stock appreciation rights is based upon a
legitimate business criteria, the language “at least 20 percent” is used
instead of “at least 80 percent” each place it appears in Treasury
Regulation 1.414(c)-2(b)(2)(i).

       

      2.2.            “American Depositary Receipts”
or “ADRs” means a
physical certificate evidencing ownership in American Depositary Shares, issued
by the Depositary and listed on an established national or regional stock
exchange, is admitted to quotation on The Nasdaq Stock Market, Inc., or is
publicly traded on an established securities market in the United States.

       

      2.3.            “American Depositary Shares”
or “ADSs” means an
equity right representing one or more shares of Stock of the Company, or a
fraction of a share of Stock of the Company, held on deposit by the Custodian,
which carries the corporate and economic rights of the Stock of the Company,
subject to the terms specified on the American Depositary Receipt.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      2.4.           “Applicable Laws” means the
legal requirements relating to the Plan and the Awards under applicable
provisions of the corporate, securities, tax and other laws, rules, regulations
and government orders, and the rules of any applicable stock exchange or
national market system, of any jurisdiction applicable to Awards granted to
residents therein.

       

      2.5.            “Award” means a grant of an
Option, Stock Appreciation Right, Restricted Stock, Unrestricted Stock, Stock
Unit or Dividend Equivalent Right under the Plan.

       

      2.6.           “Award Agreement” means the
agreement between the Company and a Grantee that evidences and sets out the
terms and conditions of an Award.

       

      2.7.           
“Benefit Arrangement”
shall have the meaning set forth in Section 14
hereof

      

       

      2.8.           
“Board” means the Board
of Directors of the Company.

       

      2.9.           
“Cause” means, as
determined by the Board and unless otherwise provided in an applicable agreement
with the Company or an Affiliate, (i) gross negligence or willful
misconduct in connection with the performance of duties; (ii) conviction of
a criminal offense (other than minor traffic offenses); or (iii) material
breach of any term of any employment, consulting or other services,
confidentiality, intellectual property or non-competition agreements, if any,
between the Service Provider and the Company or an Affiliate.

       

      2.10.           “Code” means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.

       

      2.11.           “Committee” means a committee
of, and designated from time to time by resolution of, the Board, which shall be
constituted as provided in Section 3.2.

       

      2.12.           “Company” means Kingtone
Wirelessinfo Solution Holding Ltd.

       

      2.13.           “Corporate Transaction” means
(i) the dissolution or liquidation of the Company or a merger,
consolidation, or reorganization of the Company with one or more other entities
in which the Company is not the surviving entity, (ii) a sale of
substantially all of the assets of the Company to another person or entity, or
(iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity owning 50% or more of the combined voting power of all
classes of stock of the Company. However, if any person or entity is considered
to own more than 50 percent of the combined voting power of all classes of stock
of the Company,  the acquisition of additional stock by the same
person or entity will not constitute a Corporate Transaction.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      2.14.           “Custodian” means The Bank of
New York Mellon or such other bank appointed by the Company to hold any ADSs on
deposit upon or after a public offering of the Stock.

       

      2.15.           “Depositary” means The Bank of
New York Mellon or such other U.S. bank appointed by the Company to issue any
ADRs upon or after a public offering of the Stock.

       

      2.16.           “Disability” means the Grantee
is unable to perform each of the essential duties of such Grantee’s position by
reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a
continuous period of not less than 12 months; provided, however, that, with
respect to rules regarding expiration of an Incentive Stock Option following
termination of the Grantee’s Service, Disability shall mean the Grantee is
unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.

       

      2.17.           “Dividend Equivalent Right”
means a right, granted to a Grantee under Section 12 hereof, to
receive cash, Stock, other Awards or other property equal in value to dividends
paid with respect to a specified number of shares of Stock, or other periodic
payments.

       

      2.18.           “Effective Date” means April 23, 2010,
the date the Plan was approved by the Board.

       

      2.19.           “Exchange Act” means the
Securities Exchange Act of 1934, as now in effect or as hereafter
amended.

       

      2.20.           “Fair Market Value” means the
value of a share of Stock, determined as follows: if on the Grant Date or other
determination date the Stock is listed on an established national or regional
stock exchange, or is publicly traded on an established securities market, the
Fair Market Value of a share of Stock shall be the closing price of the Stock on
such exchange or in such market (if there is more than one such exchange or
market the Board shall determine the appropriate exchange or market) on the
Grant Date or such other determination date (or if there is no such reported
closing price, the Fair Market Value shall be the mean between the highest bid
and lowest asked prices or between the high and low sale prices on such trading
day) or, if no sale of Stock is reported for such trading day, on the next
preceding day on which any sale shall have been reported. If the Stock is not
listed on such an exchange or traded on such a market, Fair Market Value shall
be the value of the Stock as determined by the Board by the reasonable
application of a reasonable valuation method, in a manner consistent with
Section 409A of the Code (“Code Section 409A”). 

       

      2.21.           “Family Member” means a person
who is a spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the Grantee, any person sharing the
Grantee’s household (other than a tenant or employee), a trust in which any one
or more of these persons have more than 50 percent of the beneficial interest, a
foundation in which any one or more of these persons (or the Grantee) control
the management of assets, and any other entity in which one or more of these
persons (or the Grantee) own more than 50 percent of the voting
interests.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      2.22.           “Grant Date” means, as
determined by the Board, the latest to occur of (i) the date as of which
the Board approves an Award, (ii) the date on which the recipient of an
Award first becomes eligible to receive an Award under Section 6 hereof, or
(iii) such other date as may be specified by the Board.

       

      2.23.           “Grantee” means a person who
receives or holds an Award under the Plan.

       

      2.24.           “Incentive Stock Option” means
an “incentive stock option” within the meaning of Section 422 of the Code, or
the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.

       

      2.25.           “IPO” means the initial sale
to the general public of ADSs pursuant to a registration statement filed with
and declared effective by the U.S. Securities and Exchange
Commission.

       

      2.26.           “Non-qualified Stock Option”
means an Option that is not an Incentive Stock Option.

       

      2.27.           “Option” means an option to
purchase one or more shares of Stock pursuant to the Plan.

       

      2.28.           “Option Price” means the
exercise price for each share of Stock subject to an Option.

       

      2.29.           “Other Agreement” shall have
the meaning set forth in Section 14
hereof.

       

      2.30.           “Plan” means this Kingtone
Wirelessinfo Solution Holding Ltd 2010 Omnibus Incentive Plan.

       

      2.31.           “Purchase Price” means the
purchase price for each share of Stock pursuant to a grant of Restricted Stock,
Stock Units or Unrestricted Stock.

       

      2.32.           “Reporting Person” means a
person who is required to file reports under Section 16(a) of the Exchange
Act.

       

      2.33.           “Restricted Stock” means
shares of Stock, awarded to a Grantee pursuant to Section 10
hereof.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      2.34.           “SAR Exercise Price” means the
per share exercise price of a SAR granted to a Grantee under Section 9
hereof.

       

      2.35.           “Securities Act” means the
Securities Act of 1933, as now in effect or as hereafter amended.

       

      2.36.           “Service” means service as a
Service Provider to the Company or an Affiliate. Unless otherwise stated in the
applicable Award Agreement, a Grantee’s change in position or duties shall not
result in interrupted or terminated Service, so long as such Grantee continues
to be a Service Provider to the Company or an Affiliate. Subject to the
preceding sentence, whether a termination of Service shall have occurred for
purposes of the Plan shall be determined by the Board, which determination shall
be final, binding and conclusive.

       

      2.37.           “Service Provider” means an
employee, officer or director of the Company or an Affiliate, or a consultant or
adviser (who is a natural person) currently providing services to the Company or
an Affiliate.

       

      2.38.           “Stock” means the ordinary
shares, par value $0.001 per share, of the Company. Upon an IPO, at the Board’s
sole discretion, “Stock” may also mean the ADSs issued by the Company in
satisfaction of awards of Stock granted under the Plan.

       

      2.39.           “Stock Appreciation Right” or
“SAR” means a right
granted to a Grantee under Section 9
hereof.

       

      2.40.           “Stock Unit” means a
bookkeeping entry representing the equivalent of one share of Stock awarded to a
Grantee pursuant to Section 10
hereof.

       

      2.41.           “Subsidiary” means any
“subsidiary corporation” of the Company within the meaning of Section 424(f) of
the Code.

       

      2.42.           “Substitute Awards” means
Awards granted upon assumption of, or in substitution for, outstanding awards
previously granted by a company or other entity acquired by the Company or any
Affiliate or with which the Company or any Affiliate combines.

       

      2.43.           “Ten Percent Stockholder”
means an individual who owns more than 10 percent of the total combined
voting power of all classes of outstanding stock of the Company, its parent or
any of its Subsidiaries. In determining stock ownership, the attribution rules
of Section 424(d) of the Code shall be applied.

       

      2.44.           “Unrestricted Stock” means an
Award pursuant to Section 11
hereof.

       

      2.45.           “U.S. Grantee” means any
Grantee who is or becomes a taxpayer in the United States.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                3.

              	
                ADMINISTRATION
      OF THE PLAN

              

      

       

      3.1.           Board. The
Board shall have such powers and authorities related and provisions of the Plan
that the Board deems to be necessary or appropriate to the administration of the
Plan, any Award or any Award Agreement. All such actions and determinations
shall be by the affirmative vote of a majority of the members of the Board
present at a meeting or by unanimous consent of the Board executed in writing in
accordance with the Company’s memorandum of association and articles of
association and applicable law. The interpretation and construction by the Board
of any provision of the Plan, any Award or any Award Agreement shall be final,
binding and conclusive to the administration of the Plan as are consistent with
the Company’s memorandum of association and articles of association and
applicable law. The Board shall have full power and authority to take all
actions and to make all determinations required or provided for under the Plan,
any Award or any Award Agreement, and shall have full power and authority to
take all such other actions and make all such other determinations not
inconsistent with the specific terms.

       

      3.2.           Committee.  The
Board from time to time may delegate to the Committee such powers and
authorities related to the administration and implementation of the Plan, as set
forth in Section 3.1
above and other applicable provisions, as the Board shall determine,
consistent with the memorandum of association and articles of association of the
Company and applicable law.

      

      In the event that the Plan, any Award
or any Award Agreement entered into hereunder provides for any action to be
taken by or determination to be made by the Board, such action may be taken or
such determination may be made by the Committee if the power and authority to do
so has been delegated to the Committee by the Board as provided for in this
Section. Unless otherwise expressly determined by the Board, any such action or
determination by the Committee shall be final, binding and conclusive. To the
extent permitted by law, the Committee may delegate its authority under the Plan
to a member of the Board.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      3.3.           Jurisdictions. In
order to assure the viability of Awards granted to Grantees employed in various
jurisdictions, the Committee may provide for such special terms as it may
consider necessary or appropriate to accommodate differences in local law, tax
policy, or custom applicable in the jurisdiction in which the Participant
resides or is employed. Moreover, the Committee may approve such supplements to,
or amendments, restatements, or alternative versions 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; provided, however,
that no such supplements, amendments, restatements, or alternative versions
shall increase the share limitations contained in Section 4.1 of the Plan.
Notwithstanding the foregoing, the Committee may not take any actions hereunder,
and no Awards shall be granted, that would violate any Applicable
Laws.

       

      3.4.           Terms of
Awards.   Subject
to the other terms and conditions of the Plan, the Board shall have full and
final authority to:

      

      (i)           designate
Grantees,

      

      (ii)          determine
the type or types of Awards to be made to a Grantee,

      

      (iii)         determine
the number of shares of Stock to be subject to an Award,

      

      (iv)         establish
the terms and conditions of each Award (including, but not limited to, the
exercise price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, the
treatment of an Award in the event of a change of control, and any terms or
conditions that may be necessary to qualify Options as Incentive Stock
Options),

      

      (v)          prescribe
the form of each Award Agreement evidencing an Award, and

      

      (vi)         amend,
modify, or supplement the terms of any outstanding Award. Such authority
specifically includes the authority, in order to effectuate the purposes of the
Plan but without amending the Plan, to make or modify Awards to U.S. Grantees
and eligible individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in local law, tax
policy, or custom. Notwithstanding the foregoing, no amendment, modification or
supplement of any Award shall, without the consent of the Grantee, impair the
Grantee’s rights under such Award.

      

      The Company may retain the right in an
Award Agreement to cause a forfeiture of the gain realized by a Grantee on
account of actions taken by the Grantee in violation or breach of or in conflict
with any employment agreement, non-competition agreement, any agreement
prohibiting solicitation of employees or clients of the Company or any Affiliate
thereof or any confidentiality obligation with respect to the Company or any
Affiliate thereof or otherwise in competition with the Company or any Affiliate
thereof, to the extent specified in such Award Agreement applicable to the
Grantee. In addition, the Company may annul an Award if the Grantee is an
employee of the Company or an Affiliate thereof and is terminated for Cause as
defined in the applicable Award Agreement or the Plan, as
applicable.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Furthermore, if the Company is required
to prepare an accounting restatement due to the material noncompliance of the
Company, as a result of misconduct, with any financial reporting requirement
under the securities laws, the individuals subject to automatic forfeiture under
Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly
engaged in the misconduct, was grossly negligent in engaging in the misconduct,
knowingly failed to prevent the misconduct or was grossly negligent in failing
to prevent the misconduct, shall reimburse the Company the amount of any payment
in settlement of an Award earned or accrued during the twelve (12) month
period following the first public issuance or filing with the United States
Securities and Exchange Commission (whichever first occurred) of the financial
document that contained such material noncompliance.

       

      3.5.           No
Repricing. Notwithstanding
anything in this Plan to the contrary, no amendment or modification may be made
to an outstanding Option or SAR, including, without limitation, by replacement
of Options or SARs with cash or other award type, that would be treated as a
repricing under the rules of the stock exchange on which the Stock is listed, in
each case, without the approval of the stockholders of the Company, provided,
that, appropriate adjustments may be made to outstanding Options and SARs
pursuant to Section 16
or Section 5.3
and may be made to make changes to achieve compliance with applicable
law, including Code Section 409A.

       

      3.6.           Deferral
Arrangement. The
Board may permit or require the deferral of any award payment into a deferred
compensation arrangement, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of interest
or dividend equivalents, including converting such credits into deferred Stock
equivalents. Any such deferrals shall be made in a manner that complies with
Code Section 409A.

       

      3.7.           No
Liability. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award or Award
Agreement.

       

      3.8.           Share
Issuance/Book-Entry. Notwithstanding
any provision of this Plan to the contrary, the issuance of the Stock under the
Plan may be evidenced in such a manner as the Board, in its discretion, deems
appropriate, including, without limitation, book-entry registration or issuance
of one or more Stock certificates.

       

      
        	
                 
      

              	
                4.

              	
                STOCK
      SUBJECT TO THE PLAN.

              

      

       

      4.1.           Number of Shares Available
for Awards and Conversion into ADSs.

       Subject
to adjustment as provided in Section 16 hereof, the
number of shares of Stock available for issuance under the Plan shall be
1,500,000, all of which may be granted as Incentive Stock Options. Stock issued
or to be issued under the Plan shall be authorized but unissued shares; or, to
the extent permitted by applicable law, issued shares that have been reacquired
by the Company.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      4.2.           Adjustments in Authorized
Shares. The
Board shall have the right to substitute or assume Awards in connection with
mergers, reorganizations, separations, or other transactions to which Section
424(a) of the Code applies. The number of shares of Stock reserved pursuant to
Section 4 shall be
increased by the corresponding number of Awards assumed and, in the case of a
substitution, by the net increase in the number of shares of Stock subject to
Awards before and after the substitution.

       

      4.3.           Share
Usage. Shares
covered by an Award shall be counted as used as of the Grant Date. Any shares of
Stock that are subject to Awards shall be counted against the limit set forth in
Section 4.1 as one (1) share for every one (1) share subject to an
Award. If any shares covered by an Award granted under the Plan are not
purchased or are forfeited or expire, or if an Award otherwise terminates
without delivery of any Stock subject thereto or is settled in cash in lieu of
shares, then the number of shares of Stock counted against the aggregate number
of shares available under the Plan with respect to such Award shall, to the
extent of any such forfeiture, termination or expiration, again be available for
making Awards under the Plan in the same amount as such shares were counted
against the limit set forth in Section 4.1. The number
of shares of Stock available for issuance under the Plan shall not be increased
by (i) any shares of Stock tendered or withheld or Award surrendered in
connection with the purchase of shares of Stock upon exercise of an Option as
described in Section 13, or
(ii) any shares of Stock deducted or delivered from an Award payment in
connection with the Company’s tax withholding obligations as described in Section 17.3.

       

      
        	
                 
      

              	
                5.

              	
                EFFECTIVE
      DATE, DURATION AND AMENDMENTS.

              

      

       

      5.1.           Effective
Date. The
Plan shall be effective as of the Effective Date, subject to approval of the
Plan by the Company’s stockholders within one year of the Effective Date. Upon
approval of the Plan by the stockholders of the Company as set forth above, all
Awards made under the Plan on or after the Effective Date shall be fully
effective as if the stockholders of the Company had approved the Plan on the
Effective Date. If the stockholders fail to approve the Plan within one year of
the Effective Date, any Awards made hereunder shall be null and void and of no
effect.

       

      5.2.           Term.  The
Plan shall terminate automatically ten (10) years after the Effective Date
and may be terminated on any earlier date as provided in Section 5.3.

       

      5.3.           Amendment and Termination of
the Plan. The Board
may, at any time and from time to time, amend, suspend, or terminate the Plan as
to any shares of Stock as to which Awards have not been made. An amendment shall
be contingent on approval of the Company’s stockholders to the extent stated by
the Board, required by applicable law or required by applicable stock exchange
listing requirements. No amendment, suspension, or termination of the Plan
shall, without the consent of the Grantee, impair rights or obligations under
any Award theretofore awarded under the Plan.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                6.

              	
                AWARD
      ELIGIBILITY AND LIMITATIONS.

              

      

       

      6.1.           Service Providers and Other
Persons. Subject
to this Section 6,
Awards may be made under the Plan to: (i) any Service Provider to the
Company or of any Affiliate, including any Service Provider who is an officer or
director of the Company, or of any Affiliate, as the Board shall determine and
designate from time to time and (ii) any other individual whose
participation in the Plan is determined to be in the best interests of the
Company by the Board.

       

      6.2.           Adjustments in Authorized
Shares. An
eligible person may receive more than one Award, subject to such restrictions as
are provided herein. The Board shall have the right to substitute or assume
Awards in connection with mergers, reorganizations, separations, or other
transactions to which Section 424(a) of the Code applies. The number of shares
of Stock reserved pursuant to Section 4 shall be
increased by the corresponding number of Substitute Awards.

       

      
        7.   
AWARD
AGREEMENT. Each
Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in
such form or forms as the Board shall from time to time determine. Award
Agreements granted from time to time or at the same time need not contain
similar provisions but shall be consistent with the terms of the Plan. Each
Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-qualified Stock Options or Incentive Stock
Options, and in the absence of such specification such options shall be deemed
Non-qualified Stock Options.

      

       

      
        	
                 
      

              	
                8.

              	
                TERMS
      AND CONDITIONS OF OPTIONS.

              

      

       

      8.1.           Option
Price. The
Option Price of each Option shall be fixed by the Board and stated in the Award
Agreement evidencing such Option. Except in the case of Substitute Awards, the
Option Price of each Option shall be at least the Fair Market Value on the Grant
Date of a share of Stock; provided, however, that in the
event that a Grantee is a Ten Percent Stockholder, the Option Price of an Option
granted to such Grantee that is intended to be an Incentive Stock Option shall
be not less than 110 percent of the Fair Market Value of a share of Stock
on the Grant Date. In no case shall the Option Price of any Option be less than
the par value of a share of Stock.

       

      8.2.           Vesting. Subject
to Sections 8.3 and 16.3
hereof, each Option granted under the Plan shall become exercisable at
such times and under such conditions as shall be determined by the Board and
stated in the Award Agreement. For purposes of this Section 8.2, fractional
numbers of shares of Stock subject to an Option shall be rounded down to the
next nearest whole number.

       

      8.3.           Term.  Each
Option granted under the Plan shall terminate, and all rights to purchase shares
of Stock thereunder shall cease, upon the expiration of ten years from the date
such Option is granted, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the Board and stated
in the Award Agreement relating to such Option; provided, however, that in the
event that the Grantee is a Ten Percent Stockholder, an Option granted to such
Grantee that is intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five years from its Grant Date. If on the
day preceding the date on which a Grantee’s Options would otherwise terminate,
the Fair Market Value of shares of Stock underlying a Grantee’s Options is
greater than the Option Price of such Options, the Company shall, prior to the
termination of such Options and without any action being taken on the part of
the Grantee, consider such Options to have been exercised by the Grantee. The
Company shall deduct from the shares of Stock deliverable to the Grantee upon
such exercise the number of shares of Stock necessary to satisfy payment of the
Option Price and all withholding obligations.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      8.4.           Termination of
Service. Each
Award Agreement shall set forth the extent to which the Grantee shall have the
right to exercise the Option following termination of the Grantee’s Service.
Such provisions shall be determined in the sole discretion of the Board, need
not be uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service.

       

      8.5.           Limitations on Exercise of
Option. Notwithstanding
any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, prior to the date the Plan is approved by the stockholders of
the Company as provided herein or after the occurrence of an event referred to
in Section 16
hereof which results in termination of the Option.

       

      8.6.           Method of
Exercise. Subject
to the terms of Section 13
and Section 17.3, an Option
that is exercisable may be exercised by the Grantee’s delivery to the Company of
notice of exercise on any business day, at the Company’s principal office, on
the form specified by the Company. Such notice shall specify the number of
shares of Stock with respect to which the Option is being exercised and shall be
accompanied by payment in full of the Option Price of the shares for which the
Option is being exercised plus the amount (if any) of federal and/or other taxes
which the Company may, in its judgment, be required to withhold with respect to
an Award.

       

      8.7.           Rights of Holders of
Options. Unless
otherwise stated in the applicable Award Agreement, an individual holding or
exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock ) until the shares of Stock covered thereby are fully
paid and issued to him. Except as provided in Section 16 hereof, no
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date of such issuance. The Grantee’s rights with
respect to the shares of Stock issued after exercising the Option shall be
governed by the deposit agreement among the Company, the Depositary and the
shareholders.

       

      8.8.           Delivery of Stock
Certificates. Promptly
after the exercise of an Option by a Grantee and the payment in full of the
Option Price, such Grantee shall be entitled to the issuance of a stock
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      8.9.           Transferability of
Options. Except as
provided in Section 8.10, during the
lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetency, the Grantee’s guardian or legal representative) may exercise an
Option. Except as provided in Section 8.10, no Option
shall be assignable or transferable by the Grantee to whom it is granted, other
than by will or the laws of descent and distribution.

       

      8.10.         Family Transfers.
If
authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of an Option which is not an Incentive Stock Option to any
Family Member. For the purpose of this Section 8.10, a “not for
value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or
(iii) unless applicable law does not permit such transfers, a transfer to
an entity in which more than 50  percent of the voting interests are
owned by Family Members (or the Grantee) in exchange for an interest in that
entity. Following a transfer under this Section 8.10, any such
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, and shares of Stock acquired pursuant
to the Option shall be subject to the same restrictions on transfer of shares as
would have applied to the Grantee. Subsequent transfers of transferred Options
are prohibited except to Family Members of the original Grantee in accordance
with this Section 8.10
or by will or the laws of descent and distribution. The events of
termination of Service of Section 8.4 hereof shall
continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the
periods specified, in Section 8.4.

       

      8.11.         Limitations on Incentive
Stock Options.  An
Option shall constitute an Incentive Stock Option only (i) if the Grantee
of such Option is an employee of the Company or any Subsidiary of the Company;
(ii) to the extent specifically provided in the related Award Agreement;
and (iii) to the extent that the aggregate Fair Market Value (determined at
the time the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation
shall be applied by taking Options into account in the order in which they were
granted.

       

      8.12.         Notice of Disqualifying
Disposition.  If
any Grantee shall make any disposition of shares of Stock issued pursuant to the
exercise of an Incentive Stock Option under the circumstances described in Code
Section 421(b) (relating to certain disqualifying dispositions), such Grantee
shall notify the Company of such disposition within ten (10) days
thereof.

       

      
        	
                 
      

              	
                9.

              	
                TERMS
      AND CONDITIONS OF STOCK APPRECIATION
RIGHTS

              

      

       

      9.1.           Right to Payment and Grant
Price.  A
SAR shall confer on the Grantee to whom it is granted a right to receive, upon
exercise thereof, the excess of (A) the Fair Market Value of one share of
Stock on the date of exercise over (B) the grant price of the SAR as
determined by the Board. The Award Agreement for a SAR shall specify the grant
price of the SAR, which shall be at least the Fair Market Value of a share of
Stock on the date of grant. SARs may be granted in conjunction with all or part
of an Option granted under the Plan or at any subsequent time during the term of
such Option, in conjunction with all or part of any other Award or without
regard to any Option or other Award; provided that a SAR that is granted
subsequent to the Grant Date of a related Option must have a SAR Price that is
no less than the Fair Market Value of one share of Stock on the SAR Grant
Date.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      9.2.           Other
Terms. The
Board shall determine at the date of grant or thereafter, the time or times at
which and the circumstances under which a SAR may be exercised in whole or in
part (including based on future service requirements), the time or times at
which SARs shall cease to be or become exercisable following termination of
Service or upon other conditions, the method of exercise, method of settlement,
form of consideration payable in settlement, method by or forms in which Stock
will be delivered or deemed to be delivered to Grantees, whether or not a SAR
shall be in tandem or in combination with any other Award, and any other terms
and conditions of any SAR.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      9.3.           Term. 
Each SAR granted under the Plan shall terminate, and all rights thereunder shall
cease, upon the expiration of ten years from the date such SAR is granted, or
under such circumstances and on such date prior thereto as is set forth in the
Plan or as may be fixed by the Board and stated in the Award Agreement relating
to such SAR.

       

      9.4.           Transferability of
SARS.  Except
as provided in Section 9.5, during the
lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetency, the Grantee’s guardian or legal representative) may exercise a
SAR. Except as provided in Section 9.5, no SAR shall
be assignable or transferable by the Grantee to whom it is granted, other than
by will or the laws of descent and distribution.

       

      9.5.           Family Transfers.
 If
authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of a SAR to any Family Member. For the purpose of this Section 9.5, a “not for
value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or
(iii) unless applicable law does not permit such transfers, a transfer to
an entity in which more than 50 percent of the voting interests are owned by
Family Members (or the Grantee) in exchange for an interest in that entity.
Following a transfer under this Section 9.5, any such SAR
shall continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, and shares of Stock acquired pursuant to a SAR
shall be subject to the same restrictions on transfer or shares as would have
applied to the Grantee. Subsequent transfers of transferred SARs are prohibited
except to Family Members of the original Grantee in accordance with this Section 9.5 or by will or
the laws of descent and distribution.

       

      
        	
                 
      

              	
                10.

              	
                TERMS
      AND CONDITIONS OF RESTRICTED STOCK AND STOCK
  UNITS

              

      

       

      10.1.         Grant of Restricted Stock or
Stock Units.  Awards
of Restricted Stock or Stock Units may be made for no consideration (other than
par value of the shares which is deemed paid by Services already
rendered).

       

      10.2.         Restrictions.
 At
the time a grant of Restricted Stock or Stock Units is made, the Board may, in
its sole discretion, establish a period of time (a “restricted period”)
applicable to such Restricted Stock or Stock Units. Each Award of Restricted
Stock or Stock Units may be subject to a different restricted period. The Board
may in its sole discretion, at the time a grant of Restricted Stock or Stock
Units is made, prescribe restrictions in addition to or other than the
expiration of the restricted period, which may be applicable to all or any
portion of the Restricted Stock or Stock Units. Neither Restricted Stock nor
Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered
or disposed of during the restricted period or prior to the satisfaction of any
other restrictions prescribed by the Board with respect to such Restricted Stock
or Stock Units.

       

      10.3.         Restricted Stock
Certificates. The
Company shall issue, in the name of each Grantee to whom Restricted Stock has
been granted, stock certificates representing the total number of shares of
Restricted Stock granted to the Grantee, as soon as reasonably practicable after
the Grant Date. The Board may provide in an Award Agreement that either
(i) the Secretary of the Company shall hold such certificates for the
Grantee’s benefit until such time as the Restricted Stock is forfeited to the
Company or the restrictions lapse, or (ii) such certificates shall be
delivered to the Grantee, provided, however, that such certificates shall bear a
legend or legends that comply with the applicable securities laws and
regulations and makes appropriate reference to the restrictions imposed under
the Plan and the Award Agreement.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      10.4.         Rights of Holders of
Restricted Stock.  Unless
the Board otherwise provides in an Award Agreement, holders of Restricted Stock
shall have the right to vote such Stock and the right to receive any dividends
declared or paid with respect to such Stock. The Board may provide that any
dividends paid on Restricted Stock must be reinvested in shares of Stock, which
may or may not be subject to the same vesting conditions and restrictions
applicable to such Restricted Stock. All distributions, if any, received by a
Grantee with respect to Restricted Stock as a result of any stock split, stock
dividend, combination of shares, or other similar transaction shall be subject
to the restrictions applicable to the original Grant.

       

      10.5.         Rights of Holders of Stock
Units.

      

      10.5.1.   Voting and
Dividend Rights.  A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Award Agreement.

      

      10.5.2.  Creditor’s
Rights.  Holders of Stock Units shall have no rights as stockholders
of the Company. The Board may provide in an Award Agreement evidencing a grant
of Stock Units that the holder of such Stock Units shall be entitled to receive,
upon the Company’s payment of a cash dividend on its outstanding Stock, a cash
payment for each Stock Unit held equal to the per-share dividend paid on the
Stock. Such Award Agreement may also provide that such cash payment will be
deemed reinvested in additional Stock Units at a price per unit equal to the
Fair Market Value of a share of Stock on the date that such dividend is
paid.

       

      10.6.         Termination of
Service.  Unless
the Board otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantee’s Service, any Restricted
Stock or Stock Units held by such Grantee that have not vested, or with respect
to which all applicable restrictions and conditions have not lapsed, shall
immediately be deemed forfeited. Upon forfeiture of Restricted Stock or Stock
Units, the Grantee shall have no further rights with respect to such Award,
including but not limited to any right to vote Restricted Stock or any right to
receive dividends with respect to shares of Restricted Stock or Stock
Units.

       

      10.7.         Purchase of Restricted Stock
and Shares Subject to Stock Units.  The
Grantee shall be required, to the extent required by applicable law, to purchase
the Restricted Stock or Stock subject to vested Stock Units from the Company at
a Purchase Price equal to the greater of (i) the aggregate par value of the
shares of Stock represented by such Restricted Stock or Stock Units
(ii) the Purchase Price, if any, specified in the Award Agreement relating
to such Restricted Stock or Stock Units. The Purchase Price shall be payable in
a form described in Section 13. or, in the
discretion of the Board, in consideration for past or future Services rendered
to the Company or an Affiliate.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      10.8.         Delivery of Stock.
 Upon
the expiration or termination of any restricted period and the satisfaction of
any other conditions prescribed by the Board, the restrictions applicable to
shares of Restricted Stock or Stock Units settled in Stock shall lapse, and,
unless otherwise provided in the Award Agreement, a stock certificate for such
shares shall be delivered, free of all such restrictions, to the Grantee or the
Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor
the Grantee’s beneficiary or estate, shall have any further rights with regard
to a Stock Unit once the share of Stock represented by the Stock Unit has been
delivered.

       

      
        	
                 
      

              	
                11.

              	
                TERMS
      AND CONDITIONS OF UNRESTRICTED STOCK
AWARDS.

              

      

       The
Board may, in its sole discretion, grant (or sell at par value or such other
higher purchase price determined by the Board) an Unrestricted Stock Award to
any Grantee pursuant to which such Grantee may receive shares of Stock free of
any restrictions (“Unrestricted Stock”)
under the Plan. Unrestricted Stock Awards may be granted or sold as described in
the preceding sentence in respect of past services and other valid
consideration, or in lieu of, or in addition to, any cash compensation due to
such Grantee.

       

      
        	
                 
      

              	
                12.

              	
                TERMS
      AND CONDITIONS OF DIVIDEND EQUIVALENT
RIGHTS

              

      

       

      12.1.         Dividend Equivalent
Rights.  A
Dividend Equivalent Right is an Award entitling the recipient to receive credits
based on cash distributions that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to which it relates)
if such shares had been issued to and held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any Grantee. The terms and
conditions of Dividend Equivalent Rights shall be specified in the grant.
Dividend equivalents credited to the holder of a Dividend Equivalent Right may
be paid currently or may be deemed to be reinvested in additional shares of
Stock, which may thereafter accrue additional equivalents. Any such reinvestment
shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent
Rights may be settled in cash or Stock or a combination thereof, in a single
installment or installments, all determined in the sole discretion of the Board.
A Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other award.

       

      12.2.         Termination of
Service.  Except
as may otherwise be provided by the Board either in the Award Agreement or in
writing after the Award Agreement is issued, a Grantee’s rights in all Dividend
Equivalent Rights or interest equivalents shall automatically terminate upon the
Grantee’s termination of Service for any reason.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      
        13.
PAYMENT. 
The Committee shall determine the methods by which the Option Price, SAR
Exercise Price or Purchase Price for an Award may be paid, the form of payment,
including, without limitation (i) cash or check denominated in U.S. Dollars,
(ii) to the extent permissible under the Applicable Laws, cash or check in
Chinese Renminbi, (iii) cash or check denominated in any other local
currency as approved by the Committee, (iv) shares of Stock held for such
period of time as may be required by the Committee in order to avoid adverse
financial accounting consequences and having a Fair Market Value on the date of
delivery equal to the aggregate Option Price or SAR Exercise Price of the Option
or SAR, respectively, or exercised portion thereof, or Purchase Price for
Restricted Stock, (v) after an IPO the delivery of a notice that the
Grantee has placed a market order with a broker with respect to shares of Stock
then issuable upon exercise of the Option, and that the broker has been directed
to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option Price, provided that payment of such proceeds is then
made to the Company upon settlement of such sale; notwithstanding anything in
the Plan to the contrary, such method shall be the only method a Grantee who is
a resident for tax purposes in the People’s Republic of China may exercise an
Option, (vi) other property acceptable to the Committee with a Fair Market
Value equal to the Option Price, SAR Exercise Price or Purchase Price,
(vii) cashless exercise; or (viii) any combination of the foregoing.
Notwithstanding any other provision of the Plan to the contrary, no Grantee who
is a member of the Board or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to pay the
Option Price, SAR Exercise Price or Purchase Price in any method that would
violate Section 13(k) of the Exchange Act.

      

      

      A Grantee may be required to provide
evidence that any currency used to pay the Option Price, SAR Exercise Price or
Purchase Price of an Award were acquired and taken out of the jurisdiction in
which the Grantee resides in accordance with Applicable Laws, including foreign
exchange control laws and regulations. In the event the Option Price, SAR
Exercise Price or Purchase Price for an Award is paid in Chinese Renminbi or
other foreign currency, as permitted by the Committee, the amount payable will
be determined by conversion from U.S. dollars at the official rate promulgated
by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other
than the People’s Republic of China, the exchange rate as selected by the
Committee on the date of exercise or purchase.

       

      
        14.
PARACHUTE
LIMITATIONS. 
Notwithstanding any other provision of this Plan or of any other agreement,
contract, or understanding heretofore or hereafter entered into by a U.S.
Grantee with the Company or any Affiliate, except an agreement, contract, or
understanding that expressly addresses Section 280G or Section 4999 of
the Code (an “Other
Agreement”), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to the U.S.
Grantee (including groups or classes of U.S. Grantees or beneficiaries of which
the U.S. Grantee is a member), whether or not such compensation is deferred, is
in cash, or is in the form of a benefit to or for the U.S. Grantee (a “Benefit
Arrangement”), if the U.S. Grantee is a “disqualified individual,” as
defined in Section 280G(c) of the Code, any Option, Restricted Stock, or Stock
Unit held by that U.S. Grantee and any right to receive any payment or other
benefit under this Plan shall not become exercisable or vested (i) to the
extent that such right to exercise, vesting, payment, or benefit, taking into
account all other rights, payments, or benefits to or for the U.S. Grantee under
this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the U.S. Grantee under this Plan to be considered a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code as then
in effect (a “Parachute Payment”)
and
(ii) if, as a result of receiving a Parachute Payment, the aggregate
after-tax amounts received by the U.S. Grantee from the Company under this Plan,
all Other Agreements, and all Benefit Arrangements would be less than the
maximum after-tax amount that could be received by the U.S. Grantee without
causing any such payment or benefit to be considered a Parachute Payment. In the
event that the receipt of any such right to exercise, vesting, payment, or
benefit under this Plan, in conjunction with all other rights, payments, or
benefits to or for the U.S. Grantee under any Other Agreement or any Benefit
Arrangement would cause the U.S. Grantee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the U.S. Grantee as described in clause
(ii) of the preceding sentence, then the U.S. Grantee shall have the right,
in the U.S. Grantee’s sole discretion, to designate those rights, payments, or
benefits under this Plan, any Other Agreements, and any Benefit Arrangements
that should be reduced or eliminated so as to avoid having the payment or
benefit to the U.S. Grantee under this Plan be deemed to be a Parachute Payment;
provided, however, that in order to comply with Code Section 409A, the
reduction or elimination will be performed in the order in which each dollar of
value subject to an Award reduces the Parachute Payment to the greatest
extent.

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                15.

              	
                REQUIREMENTS
      OF LAW

              

      

       

      15.1.         General.  The
Company shall not be required to sell or issue any shares of Stock under any
Award if the sale or issuance of such shares would constitute a violation by the
Grantee, any other individual exercising an Option, or the Company of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance or purchase of
shares hereunder, no shares of Stock may be issued or sold to the Grantee or any
other individual exercising an Option pursuant to such Award unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Award. Without limiting the generality of the foregoing, in connection with the
Securities Act, upon the exercise of any Option or any

      SAR that
may be settled in shares of Stock or the delivery of any shares of Stock
underlying an Award, unless a registration statement under such Act is in effect
with respect to the shares of Stock covered by such Award, the Company shall not
be required to sell or issue such shares unless the Board has received evidence
satisfactory to it that the Grantee or any other individual exercising an Option
may acquire such shares pursuant to an exemption from registration under the
Securities Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act. The Company shall not be obligated to take any affirmative action in order
to cause the exercise of an Option or a SAR or the issuance of shares of Stock
pursuant to the Plan to comply with any law or regulation of any governmental
authority. As to any jurisdiction that expressly imposes the requirement that an
Option (or SAR that may be settled in shares of Stock) shall not be exercisable
until the shares of Stock covered by such Option (or SAR) are registered or are
exempt from registration, the exercise of such Option (or SAR) under
circumstances in which the laws of such jurisdiction apply shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      15.2.         Rule 16b-3.
 During
any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
pursuant to the Plan and the exercise of Options and SARs granted hereunder will
qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To
the extent that any provision of the Plan or action by the Board does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the
extent permitted by law and deemed advisable by the Board, and shall not affect
the validity of the Plan. In the event that Rule 16b-3 is revised or
replaced, the Board may exercise its discretion to modify this Plan in any
respect necessary to satisfy the requirements of, or to take advantage of any
features of, the revised exemption or its replacement.

       

      
        	
                 
      

              	
                16.

              	
                EFFECT
      OF CHANGES IN CAPITALIZATION

              

      

       

      16.1.         Changes in
Stock.  If
the number of outstanding shares of Stock is increased or decreased or the
shares of Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan, shall
be adjusted proportionately and accordingly by the Company. In addition, the
number and kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent practicable, be
the same as immediately before such event. Any such adjustment in outstanding
Options or SARs shall not change the aggregate Option Price or SAR Exercise
Price payable with respect to shares that are subject to the unexercised portion
of an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or SAR Exercise Price
per share. The conversion of any convertible securities of the Company shall not
be treated as an increase in shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (including an
extraordinary dividend but excluding a non-extraordinary dividend of the
Company) without receipt of consideration by the Company, the Company shall, in
such manner as the Company deems appropriate, adjust (i) the number and
kind of shares subject to outstanding Awards and/or (ii) the exercise price
of outstanding Options and Stock Appreciation Rights to reflect such
distribution.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      16.2.         Reorganization in Which the
Company is the Surviving Entity Which does not Constitute a Corporate
Transaction.  Subject
to Section 16.3
hereof, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other
entities which does not constitute a Corporate Transaction, any Option or SAR
theretofore granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to such
Option or SAR would have been entitled immediately following such
reorganization, merger, or consolidation, with a corresponding proportionate
adjustment of the Option Price or SAR Exercise Price per share so that the
aggregate Option Price or SAR Exercise Price thereafter shall be the same as the
aggregate Option Price or SAR Exercise Price of the shares remaining subject to
the Option or SAR immediately prior to such reorganization, merger, or
consolidation. Subject to any contrary language in an Award Agreement evidencing
an Award, any restrictions applicable to such Award shall apply as well to any
replacement shares received by the Grantee as a result of the reorganization,
merger or consolidation. In the event of a transaction described in this Section 16.2, Stock Units
shall be adjusted so as to apply to the securities that a holder of the number
of shares of Stock subject to the Stock Units would have been entitled to
receive immediately following such transaction.

       

      16.3.         Corporate Transaction in
which Awards are not Assumed.  Upon
the occurrence of a Corporate Transaction in which outstanding Options, SARs,
Stock Units and Restricted Stock are not being assumed or continued:

      

      (i)           all
outstanding shares of Restricted Stock shall be deemed to have vested, and all
Stock Units shall be deemed to have vested and the shares of Stock subject
thereto shall be delivered, immediately prior to the occurrence of such
Corporate Transaction, and

      

      (ii)           either
of the following two actions shall be taken:

      

      (A)           fifteen
days prior to the scheduled consummation of a Corporate Transaction, all Options
and SARs outstanding hereunder shall become immediately exercisable and shall
remain exercisable for a period of fifteen days, or

      

      (B)           the
Board may elect, in its sole discretion, to cancel any outstanding Awards of
Options, Restricted Stock, Stock Units, and/or SARs and pay or deliver, or cause
to be paid or delivered, to the holder thereof an amount in cash or securities
having a value (as determined by the Board acting in good faith), in the case of
Restricted Stock or Stock Units, equal to the formula or fixed price per share
paid to holders of shares of Stock and, in the case of Options or SARs, equal to
the product of the number of shares of Stock subject to the Option or SAR (the
“Award Shares”)
multiplied by the amount, if any, by which (I) the formula or fixed price
per share paid to holders of shares of Stock pursuant to such transaction
exceeds (II) the Option Price or SAR Exercise Price applicable to such
Award Shares.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      With respect to the Company’s
establishment of an exercise window, (i) any exercise of an Option or SAR
during such fifteen-day period shall be conditioned upon the consummation of the
event and shall be effective only immediately before the consummation of the
event, and (ii) upon consummation of any Corporate Transaction, the Plan
and all outstanding but unexercised Options and SARs shall terminate. The Board
shall send notice of an event that will result in such a termination to all
individuals who hold Options and SARs not later than the time at which the
Company gives notice thereof to its stockholders.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      16.4.         Corporation Transaction in
which Awards are Assumed. The
Plan, Options, SARs, Stock Units and Restricted Stock theretofore granted shall
continue in the manner and under the terms so provided in the event of any
Corporate Transaction to the extent that provision is made in writing in
connection with such Corporate Transaction for the assumption or continuation of
the Options, SARs, Stock Units and Restricted Stock theretofore granted, or for
the substitution for such Options, SARs, Stock Units and Restricted Stock for
new common stock options and stock appreciation rights and new common stock
units and restricted stock relating to the stock of a successor entity, or a
parent or subsidiary thereof, with appropriate adjustments as to the number of
shares (disregarding any consideration that is not common stock) and option and
stock appreciation right exercise prices. In the event a Grantee’s Award is
assumed, continued or substituted upon the consummation of any Corporate
Transaction and his employment is terminated without Cause within one year
following the consummation of such Corporate Transaction, the Grantee’s Award
will be fully vested and may be exercised in full, to the extent applicable,
beginning on the date of such termination and for the one-year period
immediately following such termination or for such longer period as the
Committee shall determine.

       

      16.5.         Adjustments.  Adjustments
under this Section 16
related to shares of Stock or securities of the Company shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to
any such adjustment, and any fractions resulting from any such adjustment shall
be eliminated in each case by rounding downward to the nearest whole share. The
Board shall determine the effect of a Corporate Transaction upon Awards other
than Options, SARs, Stock Units and Restricted Stock, and such effect shall be
set forth in the appropriate Award Agreement. The Board may provide in the Award
Agreements at the time of grant, or any time thereafter with the consent of the
Grantee, for different provisions to apply to an Award in place of those
described in Sections 16.1, 16.2, 16.3
and 16.4. This Section 16.5 does not
limit the Company’s ability to provide for alternative treatment of Awards
outstanding under the Plan in the event of change of control events that are not
Corporate Transactions.

       

      16.6.         No Limitations on
Company. The
making of Awards pursuant to the Plan shall not affect or limit in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.

       

      
        	
                 
      

              	
                17.

              	
                GENERAL
      PROVISIONS.

              

      

       

      17.1.         Disclaimer of
Rights. No
provision in the Plan or in any Award or Award Agreement shall be construed to
confer upon any individual the right to remain in the employ or service of the
Company or any Affiliate, or to interfere in any way with any contractual or
other right or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or to terminate
any employment or other relationship between any individual and the Company. In
addition, notwithstanding anything contained in the Plan to the contrary, unless
otherwise stated in the applicable Award Agreement, no Award granted under the
Plan shall be affected by any change of duties or position of the Grantee, so
long as such Grantee continues to be a director, officer, consultant or employee
of the Company or an Affiliate. The obligation of the Company to pay any
benefits pursuant to this Plan shall be interpreted as a contractual obligation
to pay only those amounts described herein, in the manner and under the
conditions prescribed herein. The Plan shall in no way be interpreted to require
the Company to transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any Grantee or beneficiary under
the terms of the Plan.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      17.2.         Nonexclusivity of the
Plan. Neither
the adoption of the Plan nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any limitations upon the
right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
particular individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan.

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      17.3.         Withholding
Taxes. No
shares of Stock shall be delivered under the Plan to any Grantee until such
Grantee has made arrangements acceptable to the Committee for the satisfaction
of any income and employment tax withholding obligations under Applicable Laws.
The Company or any Affiliate shall have the authority and the right to deduct or
withhold, or require a Grantee to remit to the Company, an amount sufficient to
satisfy federal, state, local or foreign taxes (including the Grantee’s payroll
tax obligations) required or permitted by law to be withheld with respect to any
taxable event concerning a Grantee arising as a result of this Plan. The
Committee may in its discretion and in satisfaction of the foregoing requirement
allow a Grantee to elect to have the Company withhold shares of Stock otherwise
issuable under an Award or allow the return of shares of Stock having a Fair
Market Value equal to the sums required to be withheld. Notwithstanding any
other provision of the Plan, the number of shares which may be withheld with
respect to the issuance, vesting, exercise or payment of any Award (or which may
be repurchased from the Grantee of such Award after such shares of Stock were
acquired by the Grantee from the Company) in order to satisfy the Grantee’s
federal, state, local and foreign income and payroll tax liabilities with
respect to the issuance, vesting, exercise or payment of the Award shall, unless
specifically approved by the Committee, be limited to the number of shares of
Stock which have a Fair Market Value on the date of withholding or repurchase
equal to the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such supplemental taxable
income.

       

      17.4.         Captions. The
use of captions in this Plan or any Award Agreement is for the convenience of
reference only and shall not affect the meaning of any provision of the Plan or
such Award Agreement.

       

      17.5.         Other
Provisions. Each
Award granted under the Plan may contain such other terms and conditions not
inconsistent with the Plan as may be determined by the Board, in its sole
discretion.

       

      17.6.         Number and
Gender. With
respect to words used in this Plan, the singular form shall include the plural
form, the masculine gender shall include the feminine gender, etc., as the
context requires.

       

      17.7.         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.

       

      17.8.         Governing
Law. The
validity and construction of this Plan and the instruments evidencing the Awards
hereunder shall be governed by the laws of the British Virgin Islands, other
than any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      17.9.         Code
Section 409A. The Board
intends to comply with Code Section 409A, or an exemption to Code
Section 409A, with regard to Awards hereunder that constitute nonqualified
deferred compensation within the meaning of Code Section 409A. To the
extent that the Board determines that a Grantee would be subject to the
additional 20% tax imposed on certain nonqualified deferred compensation plans
pursuant to Code Section 409A as a result of any provision of any Award
granted under this Plan, such provision shall be deemed amended to the minimum
extent necessary to avoid application of such additional tax. The nature of any
such amendment shall be determined by the Board.

      

      To record adoption of the Plan by the
Board as of April 23, 2010, and approval of the Plan by the stockholders on
April 23, 2010, the Company has caused its authorized officer to execute the
Plan.

      

      KINGTONE WIRELESSINFO
SOLUTION    HOLDING LTD

      

      

      By: /s/ Peng
Zhang             

             Peng
Zhang

             Chief
Executive Officer

       

      
        
          
          

        

        
          25Unassociated Document

    TECHTEAM
GLOBAL, INC.

    2006
INCENTIVE STOCK AND AWARDS PLAN

    

    As
Amended and Restated Effective April 23, 2010

    

    1.        
   PURPOSE AND EFFECTIVE
DATE.

     

    (a)           Purpose.  The
TechTeam Global, Inc. 2006 Incentive Stock and Awards Plan, as the same may be
amended from time to time (the “Plan”), is intended to (i)  attract
and retain outstanding individuals to serve as officers, employees, non-employee
members of the Company’s Board, consultants and advisors; and (ii) to increase
shareholder value.  The Plan will provide participants’ incentives to
increase shareholder value by offering the opportunity to acquire shares of the
Company’s common stock or receive other incentive compensation on the
potentially favorable terms that this Plan provides.

     

    (b)           Effective
Date.  The Plan was effective on June 23, 2006 (the “Effective
Date”).  Upon the Effective Date, the Company’s 2004 Incentive Stock
and Awards Plan (the “Prior Plan”) terminated.

     

    2.      
     DEFINITIONS.

     

    Capitalized
terms used in this Plan have the following meanings:

     

    (a)           “Administrator”
means the Board with respect to Eligible Directors and the Committee with
respect to all other eligible individuals.

     

    (b)           “Affiliate”
means any corporation, partnership, joint venture, or other entity during any
period in which the Company owns, directly or indirectly, at least fifty percent
(50%) of the equity, voting or profits interest, and any other business venture
that the Committee designates in which the Company has a significant interest,
as the Committee determines in its discretion.

     

    (c)           “Award”
means a grant of Options, Performance Shares, Restricted Stock or Restricted
Stock Units under this Plan.

     

    (d)           “Board”
means the Board of Directors of the Company.

     

    (e)           “Change
of Control” means the occurrence of any one of the following
events:

     

    (i)           The
sale of all then outstanding shares of common stock of the Company or fifty-one
percent (51%) of the then outstanding voting securities of the Company entitled
to vote generally in the election of the directors to any person (as defined in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof) other than to (A) the Company or its subsidiaries, (B) a trustee
or other fiduciary holding securities under any employee benefit plan of the
Company or its subsidiaries, or (C) an underwriter temporarily holding
securities pursuant to an offering of such securities; or

     

    (ii)           The
consummation of the sale or other disposition of all or substantially all of the
assets or operations of the Company.

     

    Notwithstanding
the foregoing, no “Change of Control” shall be deemed to have occurred if there
is consummated any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    If an
Award is considered deferred compensation subject to the provisions of Code
Section 409A, and if a payment under such Award will be made upon a “Change of
Control,” then the foregoing definition shall be deemed amended to the extent
necessary to comply with Code Section 409A, and the Administrator may include
such amended definition in the Award agreement issued with respect to such
Award.

     

    (f)           “Code”
means the Internal Revenue Code of 1986, as amended. Any reference to a specific
provision of the Code includes any successor provision and the regulations
promulgated under such provision.

     

    (g)           “Committee”
means the Compensation Committee of the Board (or such successor committee with
the same or similar authority).

     

    (h)           “Common
Stock” means the common stock of the Company.

     

    (i)           “Company”
means TechTeam Global, Inc., a Delaware corporation, or any successor
thereto.

     

    (j)           “Date
of Grant” means, with respect to an Option, the date on which the Administrator
takes action to approve such Option, or any future date specified by the
Administrator.

     

    (k)           “Eligible
Director” means a non-employee director elected or appointed to the
Board.

     

    (l)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended. Any reference to a
specific provision of the Exchange Act includes any successor provision and the
regulations and rules promulgated under such provision.

     

    (m)         “Exercise
Price” means, with respect to an Option, the price per share at which a
Participant may exercise his Option to acquire all or a portion of the shares of
Common Stock that are the subject of such Option.  In no event shall
the Exercise Price of any Common Stock subject to an Option be less than the
Fair Market Value of the Company’s Common Stock determined as of the Date of
Grant.

     

    (n)         “Fair
Market Value” means, per Share on a particular date, the last sales price on
such date on the national securities exchange on which the Common Stock is then
traded, as reported in The Wall Street Journal, or if no sales of Common Stock
occur on the date in question, on the last preceding date on which there was a
sale on such exchange. If the Shares are not listed on a national securities
exchange, but are traded in an over-the-counter market, the last sales price
(or, if there is no last sales price reported, the average of the closing bid
and asked prices) for the Shares on the particular date, or if no sales of
Common Stock occur on the date in question, on the last preceding date on which
there was a sale of Shares on that market, will be used. If the Shares are
neither listed on a national securities exchange nor traded in an
over-the-counter market, the price determined by the Administrator, in its
discretion, will be used.

     

    (o)         “Option”
means the right to purchase Shares at a stated price. “Options” may either be
“incentive stock options” which meet the requirements of Code Section 422, or
“nonqualified stock options” which do not meet the requirements of Code Section
422.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (p)         “Participant”
means an officer or other employee of the Company or its Affiliates, or an
Eligible Director of the Company, or a consultant or advisor who provides
services to the Company or its Affiliates, who the Administrator designates to
receive an Award under this Plan; provided that Eligible Directors shall
automatically be considered Participants for purposes of Section 8.

     

    (q)         “Performance
Goals” means any goals the Administrator establishes that relate to one or more
of the following with respect to the Company or any one or more Subsidiaries,
Affiliates or other business units: revenue; cash flow; net cash provided by
operating activities; net cash provided by operating activities less net cash
used in investing activities; cost of goods sold; ratio of debt to debt plus
equity; profit before tax; gross profit; net profit; net sales; earnings before
interest and taxes; earnings before interest, taxes, depreciation and
amortization; Fair Market Value of Shares; basic earnings per share; diluted
earnings per share; return on shareholder equity; average accounts receivable
(calculated by taking the average of accounts receivable at the end of each
month); return on average total capital employed; return on net assets employed
before interest and taxes; economic value added; return on year-end equity;
and/or in the case of Awards that the Administrator determines will not be
considered “performance based compensation” under Code Section 162(m) or for
purposes of exercising negative discretion in connection with an Award that is
considered “performance based compensation” under Code Section 162(m), such
other goals as the Administrator may establish in its discretion including
subjective, individual criteria.  As to each Performance Goal, the
relevant measurement of performance shall be computed in accordance with
generally accepted accounting principles, if applicable, but, unless otherwise
determined by the Committee and to the extent consistent with Code Section
162(m), will exclude the effects of:  (i) charges for reorganizing and
restructuring; (ii) discontinued operations; (iii) asset write-downs; (iv) gains
or losses on the disposition of a business; (v) changes in tax or accounting
principles, regulations or laws; (vi) mergers, acquisitions or dispositions; and
(vii) extraordinary, unusual and/or non-recurring items of gain or loss, that in
each case the Company identifies in its audited financial statements, including
footnotes, or the Management’s Discussion and Analysis section of the Company’s
annual report.  Also, the Administrator may, to the extent consistent
with Code Section 162(m), appropriately adjust any evaluation of performance
under a Performance Goal to exclude any of the following events that occurs
during a performance period:  (i) litigation, claims, judgments or
settlements; (ii) the effects of changes in laws or regulations affecting
reported results; and (iii) accruals of any amounts for payment under this Plan
or any other compensation arrangements maintained by the Company or an
Affiliate.

     

    (r)          “Performance
Shares” means the right to receive Shares to the extent one or more Performance
Goals are achieved during the period of time specified by the Administrator
consisting of one or more full fiscal years of the Company, a Subsidiary or
Affiliate, or upon the occurrence of one or more other conditions as is
determined by the Administrator.

     

    (s)         “Plan”
means this TechTeam Global, Inc. 2006 Incentive Stock and Awards Plan, as
amended from time to time.

     

    (t)          “Restricted
Stock” means Shares that are subject to a risk of forfeiture and/or restrictions
on transfer, which may lapse at such time(s) or upon the occurrence of certain
conditions as is determined by the Administrator.

     

    (u)         “Restricted
Stock Unit” means the right to receive one Share or cash in an amount equal to
the Fair Market Value of one Share at such time(s) or upon the occurrence of
certain conditions as is determined by the Administrator.

     

    (v)         “Section
16 Participants” means officers or consultants of the Company who are subject to
the provisions of Section 16 of the Exchange Act.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (w)        “Share”
means a share of Common Stock.

     

    (x)          “Subsidiary”
means any corporation in an unbroken chain of corporations beginning with the
Company if each of the corporations (other than the last corporation in the
chain) owns stock possessing more than fifty percent (50%) of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.

     

    3.           ADMINISTRATION.

     

    (a)          Administrator
Administration.  The Administrator has full authority to
administer this Plan, including the authority to (i) interpret the provisions of
this Plan or any agreement covering an Award, (ii) prescribe, amend and rescind
rules and regulations relating to this Plan, (iii) correct any defect, supply
any omission, or reconcile any inconsistency in the Plan, any Award or agreement
covering an Award in the manner and to the extent it deems desirable to carry
this Plan or an Award into effect, and (iv) make all other determinations
necessary or advisable for the administration of this Plan.   All
Administrator determinations are final and binding.

     

    (b)          Delegation to Other Committees or
Officers.  To the extent applicable law permits, the Board may
delegate to another committee of the Board or to one or more officers of the
Company, or the Committee may delegate to a sub-committee, any or all of the
authority and responsibility of their respective authority hereunder. However,
no such delegation is permitted with respect to Awards made to or an Award held
by individuals who are Section 16 Participants at the time any such delegated
authority or responsibility is exercised, unless the delegation is to a
committee or sub-committee consisting entirely of non-employee directors who
qualify as such under Rule 16b-3(b) of the Exchange Act.  If the Board
or Committee has made such a delegation, then all references to the
Administrator in this Plan include such other committee, sub-committee or one or
more officers to the extent of such delegation.

     

    (c)          No Liability.  No
member of the Board or the Committee, and no officer to whom a delegation under
subsection (b) has been made, will be liable for any act done, or determination
made, by the individual in good faith with respect to the Plan or any Award. The
Company will indemnify and hold harmless such individuals to the maximum extent
that the law and the Company’s bylaws permit.

     

    4.           ELIGIBILITY.  The
Administrator may designate from time to time the Participants to receive Awards
under this Plan. The Administrator’s designation of a Participant in any year
will not require the Administrator to designate such person to receive an Award
in any other year.

     

    5.           DISCRETIONARY
GRANTS OF AWARDS.  Subject to the terms of this Plan, the
Administrator has full power and authority to: (a) determine the type or types
of Awards to be granted to each Participant; (b) determine the number of Shares
with respect to which an Award is made; and (c) determine any terms and
conditions of any Award granted to a Participant.  Awards under this
Plan may be granted either alone or in addition to, in tandem with, or in
substitution for any other Award (or any other award granted under another plan
of the Company or any Affiliate).

     

    6.           SHARES RESERVED UNDER THIS
PLAN.

     

    (a)           Plan Reserve.  An
aggregate of 2,300,000 Shares are reserved for issuance under this
Plan.  Not more than 1,000,000 of the reserved Shares may be issued
pursuant to incentive stock options (within the meaning of Code Section 422) and
not more than 1,000,000 of the reserved Shares may be issued pursuant to
Restricted Stock, Restricted Stock Units and Performance Shares. The number of
Shares reserved for issuance under this Plan shall be reduced only by the number
of Shares delivered in payment or settlement of Awards.  The
limitations of this subsection are subject to adjustments as provided in Section
13.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (b)         Replenishment of Shares Under this
Plan.  If an Award lapses, expires, terminates or is cancelled
without the issuance of Shares under the Award, then the Shares subject to or
reserved for in respect of such Award, or the Shares to which such Award
relates, may again be used for new Awards under this Plan as determined under
subsection (a), including issuance pursuant to incentive stock options. If
Shares are issued under any Award and the Company subsequently reacquires them
pursuant to rights reserved upon the issuance of the Shares, then such Shares
may be used for new Awards under this Plan as determined under subsection (a),
but such shares may not be issued pursuant to incentive stock
options.

     

    (c)          Participant
Limitations.  Subject to adjustment as provided in Section 13,
no Participant may be granted Awards under this Plan that could result in such
Participant receiving in any single fiscal year of the Company:

     

    (i)           Options
for more than 150,000 Shares;

     

    (ii)           Awards
of Restricted Stock and Restricted Stock Units with respect to more than 50,000
Shares; and

     

    (iii)           Awards
of Performance Shares relating to more than 50,000 Shares.

     

    In all
cases, determinations under this Section 6(c) should be made in a manner that is
consistent with the exemption for performance based compensation that Code
Section 162(m) provides.

     

    7.           OPTIONS.

     

    (a)           Eligibility.  The
Administrator may grant Options to any Participant it selects. The Administrator
must specify whether the Option is an incentive stock option or a nonqualified
stock option, but only employees of the Company or a Subsidiary may receive
grants of incentive stock options.

     

    (b)           Terms and
Conditions.  The Administrator will establish the Exercise
Price for an Option.  An Option will be exercisable at such times and
subject to such conditions as the Administrator specifies, except that the
Option must terminate no later than 10 years after the Date of Grant. In all
other respects, the terms of any incentive stock option should comply with the
provisions of Code Section 422 except to the extent the Committee determines
otherwise.

     

    8.           DIRECTOR
STOCK COMPENSATION.  Each Eligible Director shall receive all
or a portion of his director fees in Shares, as the Board shall determine from
time to time.  In addition, an Eligible Director may elect to receive
up to 100% of his director fees that would otherwise be paid in cash in the form
of Shares pursuant to the procedures and designated window periods established
by the Company or the Board.  If any director fees are deferred in
accordance with a deferred compensation plan established by the Company and are
payable in shares of Common Stock, such shares shall be issued under this
Plan.

     

    9.           PERFORMANCE AND STOCK
AWARDS.

     

    (a)           Eligibility.  The
Administrator may grant awards of Restricted Stock, Restricted Stock Units or
Performance Shares to Participants the Administrator selects.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    (b)           Terms and
Conditions.  Each award of Restricted Stock, Restricted Stock
Units or Performance Shares may be subject to such terms and conditions as the
Administrator determines appropriate, including, without limitation, a condition
that one or more Performance Goals be achieved for the Participant to realize
all or a portion of the benefit provided under the Award.  However, an
award of Restricted Stock or Restricted Stock Units must have a restriction
period of at least one year.  Notwithstanding the foregoing, the
Administrator may provide that the restrictions imposed on Restricted Stock or
Restricted Stock Units are accelerated, or the Performance Goals subject to an
award are deemed achieved, upon the Participant’s termination of employment or
service as a result of death, disability, or retirement.

     

    10.           TRANSFERABILITY.  Each
Award granted under this Plan is not transferable other than by will or the laws
of descent and distribution, except that a Participant may, to the extent the
Administrator allows and in a manner the Administrator specifies: (a) designate
in writing a beneficiary to exercise or receive the benefit of the Award after
the Participant’s death; or (b) transfer any award.

     

    11.           TERMINATION AND AMENDMENT OF
PLAN; AMENDMENT, MODIFICATION OR CANCELLATION OF AWARDS.

     

    (a)           Term.  Subject to
the right of the Board to terminate the Plan pursuant to Section 12(b), the Plan
shall remain in effect until all Shares subject to it shall have been issued,
purchased or acquired according to the Plan’s provisions; provided that no
incentive stock option may be granted under the Plan after the tenth (10th)
anniversary of the Plan’s Effective Date.

     

    (b)           Termination and
Amendment.  The Board or Committee may amend, alter, suspend,
discontinue or terminate this Plan at any time, subject to the following
limitations:

     

    (i)           the
Board must approve any amendment of this Plan to the extent the Company
determines such approval is required by: (A) action of the
Board,  (B) applicable corporate law, or (C) any other applicable
law or the listing requirements of any principal securities exchange or market
on which the Shares are then traded;

     

    (ii)           Shareholders
must approve any amendment of this Plan if the Company determines that such
approval is required by law or stock exchange rules, including but not limited
to: (A) the rules and/or regulations promulgated under Section 16 of the
Exchange Act, (B) the Code or any rules promulgated thereunder, or (C) the
listing requirements of any principal securities exchange or market on which the
Shares are then traded; and

     

    (iii)           Shareholders
must approve any of the following Plan amendments: (A) an amendment to
materially increase the number of Shares specified in Section 6(a) or 6(c)
(except as permitted by Section 13); (B) an amendment to shorten the restriction
periods specified in Section 9(b); or (C) an amendment to impair the protections
of Section 11(e).

     

    (c)           Amendment, Modification or
Cancellation of Awards.  Except as provided in subsection (e)
and subject to the requirements of this Plan, the Administrator may modify,
amend or cancel any Award or waive any restrictions or conditions applicable to
any Award or the exercise of the Award, and the Administrator may modify or
amend the terms and conditions applicable to any Awards (including the Plan
provisions affecting an Award); provided that any modification, amendment or
cancellation that adversely affects the rights of a Participant under an Award
must be consented to by the Participant (or any other persons as may then have
an interest in the Award).  Notwithstanding the foregoing, the
Administrator need not obtain Participant (or other interested party) consent
for the adjustment or cancellation of an Award pursuant to the provisions of
Section 13, or the modification of an Award to the extent deemed necessary to
comply with any applicable law, the listing requirements of any principal
securities exchange or market on which the Shares are then traded, or to
preserve favorable accounting or tax treatment of any Award for the
Company.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (d)           Survival of Administrator Authority
and Awards.  Notwithstanding the foregoing, the authority of
the Administrator to administer this Plan and modify or amend an Award, and the
authority of the Board or Committee to amend the Plan, may extend beyond the
date of this Plan’s termination, but no Awards may be granted after the Plan’s
termination. In addition, termination of this Plan will not affect the rights of
Participants with respect to Awards previously granted to them, and all
unexpired Awards will continue in force and effect after termination of this
Plan except as they may lapse or be terminated by their own terms and
conditions.

     

    (e)           Repricing
Prohibited.  Notwithstanding anything in this Plan to the
contrary, and except for the adjustments provided in Section 13, neither the
Administrator nor any other person may decrease the exercise price for any
outstanding Option granted under this Plan after the Date of Grant nor allow a
Participant to surrender an outstanding Option granted under this Plan to the
Company as consideration for the grant of a new Option with a lower exercise
price.

     

    (f)           Foreign
Participation.  To assure the viability of Awards granted to
Participants employed in foreign countries, the Administrator may provide for
such special terms as it may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Administrator may
approve such supplements to, or amendments, restatements or alternative versions
of this Plan as it determines is necessary or appropriate for such purposes. Any
such amendment, restatement or alternative versions that the Administrator
approves for purposes of using this Plan in a foreign country will not affect
the terms of this Plan for any other country.

     

    12.           TAXES.

     

    (a)           Withholding
Obligations.  The Company is entitled to withhold from any
amount payable or Shares deliverable hereunder or from any other compensation
payable by the Company or an Affiliate to the Participant, the amount of any tax
arising upon the payment of cash or issuance or vesting of Shares under this
Plan after giving the person entitled to receive such amount or Shares notice as
far in advance as practicable, and the Company may defer making payment or
delivery if any such tax may be pending unless and until indemnified to its
satisfaction.  The Committee may permit a Participant to pay all or a
portion of the foreign, federal, state and local withholding taxes arising upon
exercise, vesting or payment of any Award (including the issuance of Shares
under an Award) by electing to (i) have the Company withhold vested Shares
otherwise issuable under the Award, (ii) tender back Shares received in
connection with such Award or (iii) deliver other previously owned Shares, in
each case having a fair market value  equal to the amount to be
withheld; however, the amount to be withheld may not exceed the total minimum
statutory amount of federal, state and local tax withholding obligations
associated with the transaction to the extent needed for the Company to preserve
favorable accounting treatment. The election must be made on or before the date
as of which the amount of tax to be withheld is determined and otherwise as the
Committee requires. The Fair Market Value of a fractional Share remaining after
payment of the withholding taxes may be paid to the Participant in
cash.

     

    (b)           No Guarantee of Tax
Treatment.  Notwithstanding any provision of this Plan to the
contrary, the Company does not guarantee to any Participant or any other
person(s) with an interest in an Award that (i) any Award intended to be exempt
from Code Section 409A shall be so exempt, (ii) any Award intended to comply
with Code Section 409A or Code Section 422 shall so comply, or (iii) any Award
shall otherwise receive a specific tax treatment under any other applicable tax
law, nor in any such case will the Company or any Affiliate be required to
indemnify, defend or hold harmless any individual with respect to the tax
consequences of any Award.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    13.           ADJUSTMENT PROVISIONS;
CHANGE OF CONTROL.

     

    (a)           Adjustment of
Shares.  If (i) the Company shall at any time be involved in a
merger or other transaction in which the Shares are changed or exchanged; (ii)
the Company shall subdivide or combine the Shares or the Company shall declare a
dividend payable in Shares, other securities or other property; (iii) the
Company shall effect a cash dividend the amount of which, on a per Share basis,
exceeds ten percent (10%) of the Fair Market Value of a Share at the time the
dividend is declared, or the Company shall effect any other dividend or other
distribution on the Shares in the form of cash, or a repurchase of Shares, that
the Board determines by resolution is special or extraordinary in nature or that
is in connection with a transaction that the Company characterizes publicly as a
recapitalization or reorganization involving the Shares; or (iv) any other event
shall occur, which, in the case of this clause (iv), in the judgment of the
Board or Committee necessitates an adjustment to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under this
Plan, then the Administrator shall, in such manner as it may deem equitable,
adjust any or all of (A) the type and number of Shares subject to this Plan
(including the specific limits described in Section 6), and which may after the
event be made the subject of Awards under this Plan, (B) the number and type of
Shares subject to outstanding Awards, (C) the grant, purchase, or exercise price
with respect to any Award, and (D) to the extent such discretion does not cause
an Award that is intended to qualify as performance-based compensation under
Code Section 162(m) to lose its status as such, the Performance Goals of an
Award.

     

    In any
such case, the Administrator may also make provision for a cash payment (in an
amount determined by the Administrator) to the holder of an outstanding Award in
exchange for the cancellation of all or a portion of the Award (without the
consent of the holder of an Award) effective at such time as the Administrator
specifies (which may be the time such transaction or event is effective), but if
such transaction or event constitutes a Change of Control, then (A) such payment
shall be at least as favorable to the holder as the payment amount described in
subsection (c)(ii) and (B) from and after the Change of Control, the
Administrator may make such a provision only if the Administrator determines
that doing so is necessary to substitute, for each Share then subject to an
Award, the number and kind of shares of stock, other securities, cash or other
property to which holders of Common Stock are or will be entitled in respect of
each Share pursuant to the transaction or event in accordance with the last
sentence of this subsection (a). However, in each case, with respect to Awards
of incentive stock options, no such adjustment may be authorized to the extent
that such authority would cause this Plan to violate Code section 422(b).
Further, the number of Shares subject to any Award payable or denominated in
Shares must always be a whole number.

     

    Without
limitation, subject to Participants’ rights under subsection (c), in the event
of any reorganization, merger, consolidation, combination or other similar
corporate transaction or event, whether or not constituting a Change of Control,
other than any such transaction in which the Company is the continuing
corporation and in which the outstanding Common Stock is not being converted
into or exchanged for different securities, cash or other property, or any
combination thereof, the Administrator may substitute, on an equitable basis as
the Administrator determines, for each Share then subject to an Award, the
number and kind of shares of stock, other securities, cash or other property to
which holders of Common Stock are or will be entitled in respect of each Share
pursuant to the transaction.

     

    (b)           Issuance or
Assumption.  Notwithstanding any other provision of this Plan,
and without affecting the number of Shares otherwise reserved or available under
this Plan, in connection with any merger, consolidation, acquisition of property
or stock, or reorganization, the Administrator may authorize the issuance or
assumption of awards upon such terms and conditions as it may deem
appropriate.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (c)           Change of
Control.  If the Participant has in effect an employment,
retention, change of control, severance or similar agreement with the Company or
any Affiliate that discusses the effect of a Change of Control on the
Participant’s Awards, then such agreement shall control.  In all other
cases, upon a Change of Control, the Administrator may, in its discretion,
determine that any or all outstanding Awards held by Participants who are then
in the employ or service of the Company or any Affiliate shall vest or be deemed
to have been earned in full (assuming the maximum performance goals provided
under such Award were met, if applicable), and:

     

    (i)           If
the successor or surviving corporation (or parent thereof) so agrees, all
outstanding Awards shall be assumed, or replaced with the same type of award
with similar terms and conditions, by the successor or surviving corporation (or
parent thereof) in the Change of Control.  If applicable, each Award which is assumed by the successor
or surviving corporation (or parent thereof) shall be appropriately adjusted,
immediately after such Change of Control, to apply to the number and class of
securities which would have
been issuable to the Participant upon the consummation of such Change of Control
had the Award been exercised or vested immediately prior to such Change of
Control, and such other appropriate adjustments in the terms and conditions of
the Award shall be made.  If the Administrator does
not exercise the discretion described above to fully vest an Award or to cause
an Award to be deemed earned in full as of the date of the Change of Control,
then upon the Participant’s termination of employment by the successor or
surviving corporation without cause (as defined by the policies generally
applicable to employees of the successor or surviving corporation) within one
year following the Change of Control, all of the Participant’s Awards that are
in effect as of the date of such termination shall be vested in full or deemed
earned in full (assuming the maximum performance goals provided under such Award
were met, if applicable) effective on the date of such
termination.

     

    (ii)           If
the provisions of paragraph (i) do not apply, then all outstanding Awards shall
be cancelled as of the date of the Change of Control in exchange for a payment
in cash and/or Shares (which may include shares or other securities of any
surviving or successor entity or the purchasing entity or any parent thereof)
equal to:

     

    (1)           In
the case of an Option, the excess of the Fair Market Value of the Shares on the
date of the Change of Control covered by the vested portion of the Option that
has not been exercised over the exercise price of such Shares under the
Award;

     

    (2)           In
the case of Restricted Stock Units, the Fair Market Value of a Share on the date
of the Change of Control multiplied by the number of vested units;
and

     

    (3)           In
the case of a Performance Share Award, the Fair Market Value of a Share on the
date of the Change of Control multiplied by the number of earned
Shares.

     

    Any
unvested or unearned Awards shall be cancelled without payment
therefor.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    14.           MISCELLANEOUS.

     

    (a)           Option Grants.  The
grant of any Option under this Plan is subject to the following
provisions:

     

    (i)           A
Participant (or other individual with an interest in an Award) shall have no
rights as a shareholder of the Company with respect to the shares of Common
Stock made subject to an Option unless and until such individual exercises such
Option and is issued the shares purchased thereby.  No adjustments
shall be made for distributions, allocations, or other rights with respect to
any shares of Common Stock prior to the exercise of such Option except as
permitted by Section 13.

     

    (ii)           The
terms of any Option shall be as set forth in a written stock option agreement
(an “Option Agreement”) in such form as the Administrator shall from time to
time determine.  Each Option Agreement shall comply with and be
subject to the terms and conditions of the Plan and such other terms and
conditions as the Administrator may deem appropriate.  No person shall
have any rights under any Option granted under the Plan unless and until the
Company and the Participant have executed an Option Agreement setting forth the
grant and the terms and conditions of the Option.

     

    (b)           Other Terms and
Conditions.  The grant of any Award under this Plan may also be
subject to other provisions (whether or not applicable to the Award awarded to
any other Participant) as the Administrator determines appropriate, including,
without limitation, provisions for:

     

    (i)           the
payment of the purchase price of Options by delivery of cash or other Shares or
other securities of the Company having a then Fair Market Value equal to the
purchase price of such Shares, or by delivery (including by fax) to the Company
or its designated agent, of an executed irrevocable option exercise form
together with irrevocable instructions to a broker dealer to sell or margin a
sufficient portion of the Shares and deliver the sale or margin loan proceeds
directly to the Company to pay for the exercise price;

     

    (ii)           with
respect to an Award of Restricted Stock. provisions giving the Participant the
right to receive dividend payments with respect to the Shares subject to the
Award (both before and after the Shares subject to the Award are earned or
vested), which payments may be either made currently or credited to an account
for the Participant, and may be settled in cash or Shares, as the Administrator
determines;

     

    (iii)           restrictions
on resale or other disposition; and

     

    (iv)           compliance
with federal or state securities laws and stock exchange
requirements.

     

    (c)           Employment and
Service.  The issuance of an Award shall not confer upon a
Participant any right with respect to continued employment or service with the
Company or any Affiliate, or the right to continue as an Eligible
Director.  Unless determined otherwise by the Administrator, for
purposes of the Plan and all Awards, the following rules shall
apply:

     

    (i)           a
Participant who transfers employment between the Company and its Affiliates, or
between Affiliates, will not be considered to have terminated
employment;

     

    (ii)           a
Participant who ceases to be an Eligible Director because he or she becomes an
employee of the Company or an Affiliate shall not be considered to have ceased
service as an Eligible Director with respect to any Award until such
Participant’s termination of employment with the Company and its
Affiliates;

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (iii)           a
Participant who ceases to be employed by the Company or an Affiliate and
immediately thereafter becomes an Eligible Director, a non-employee director of
an Affiliate, or a consultant to the Company or any Affiliate shall not be
considered to have terminated employment until such Participant’s service as a
director of, or consultant to, the Company and its Affiliates has ceased;
and

     

    (iv)           a
Participant employed by an Affiliate will be considered to have terminated
employment when such entity ceases to be an Affiliate.

     

    Notwithstanding
the foregoing, for purposes of an Award that is subject to Code Section 409A, if
a Participant’s termination of employment or service triggers the payment of
compensation under such Award, then the Participant will be deemed to have
terminated employment or service upon his or her “separation from service”
within the meaning of Code Section 409A.

     

    (d)           Compliance with Rule 16b-3 of the
Securities Exchange Act.  Transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Securities Exchange Act of 1934, as amended, and in all
events the Plan shall be construed in accordance with Rule 16b-3.  To
the extent any provision of the Plan or action by the Board or Committee fails
to so comply, it shall be deemed null and void to the extent permitted by law
and deemed advisable by the Board.

     

    (e)           No Fractional
Shares.  No fractional Shares or other securities may be issued
or delivered pursuant to this Plan, and the Administrator may determine whether
cash, other securities or other property will be paid or transferred in lieu of
any fractional Shares or other securities, or whether such fractional Shares or
other securities or any rights to fractional Shares or other securities will be
canceled, terminated or otherwise eliminated.

     

    (f)           Unfunded
Plan.  This Plan is unfunded and does not create, and should
not be construed to create, a trust or separate fund with respect to this Plan’s
benefits. This Plan does not establish any fiduciary relationship between the
Company and any Participant. To the extent any person holds any rights by virtue
of an Award granted under this Plan, such rights are no greater than the rights
of the Company’s general unsecured creditors.

     

    (g)           Requirements of
Law.  The granting of Awards under this Plan and the issuance
of Shares in connection with an Award are subject to all applicable laws, rules
and regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required. Notwithstanding any other provision of
this Plan or any award agreement, the Company has no liability to deliver any
Shares under this Plan or make any payment unless such delivery or payment would
comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity.

     

    (h)           Governing
Law.  This Plan, and all agreements under this Plan, shall be
construed in accordance with and governed by the laws of the State of Michigan,
without reference to any conflict of law principles, except for corporate law
matters which are governed by the laws of the State of Delaware.  Any
legal action or proceeding with respect to this Plan, any Award or any award
agreement, or for recognition and enforcement of any judgment in respect of this
Plan, any Award or any award agreement, may only be brought and determined in a
court sitting in the County of Oakland, or the Federal District Court for the
Eastern District of Michigan in the State of Michigan.  Any legal
action or proceeding with respect to this Plan, any Award or any Award
agreement, must be brought within one year (365 days) after the day the
complaining party first knew or should have known of the events giving rise to
the complaint.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (i)           Compensation Recovery
Policy.  The Committee may institute a policy that, in
appropriate circumstances, it will evaluate whether to seek the reimbursement of
certain compensation realized under Awards granted under the Plan to an
executive officer if such executive engages in activities that caused or
partially caused a restatement of the Company’s financial results.  In
such a case, the Company shall have the right, notwithstanding any provision of
the Plan, any Award or any award agreement to the contrary, to require the
executive officer to reimburse the Company for the amount of compensation paid
(including the value of any shares of Stock issued) under the Plan for the
relevant period.

     

    (j)           Construction.   Whenever
any words are used herein in the masculine, they shall be construed as though
they were used in the feminine in all cases where they would so apply; and
wherever any words are used in the singular or plural, they shall be construed
as though they were used in the plural or singular, as the case may be, in all
cases where they would so apply.  Title of sections are for general
information only, and the Plan is not to be construed with reference to such
titles.

     

    (k)           Severability.  If
any provision of this Plan or any award agreement or any Award (i) is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as
to any person or Award, or (ii) would disqualify this Plan, any award agreement
or any Award under any law the Administrator deems applicable, then such
provision should be construed or deemed amended to conform to applicable laws,
or if it cannot be so construed or deemed amended without, in the determination
of the Administrator, materially altering the intent of this Plan, award
agreement or Award, then such provision should be stricken as to such
jurisdiction, person or Award, and the remainder of this Plan, such award
agreement and such Award will remain in full force and effect.

     

    *****

    
      
         

      

      
        12

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