Document:

CONSULTING SERVICES
AGREEMENT

     

    THIS
CORPORATE CONSULTING SERVICES AGREEMENT is entered into on this 26th day of
June, 2010, but having an effective date of June 1, 2010 (the “Effective
Date”).

     

    BETWEEN:

     

    Peacock
Media Ltd., a company incorporated under the laws of India and having its
address for notice and delivery located at 24B, Apollo Industrial Estate, Off
Mahakali Caves Road, Andheri East, Mumbai – 400093. India.

    

    (the
“Consultant”);

    

    OF THE FIRST
PART

    

    AND:

    

    TechMedia
Advertising Mauritius, a company incorporated under the laws of Mauritius
and having its address for notice and delivery located at c/o 62 Upper Cross
Street, #04-01, Singapore 058353

    

    (“TMM”);

    

    OF THE SECOND
PART

    

    (the
Consultant and TMM being hereinafter singularly also referred to as a “Party”
and collectively referred to as the “Parties” as the context so
requires.).

     

    WHEREAS:

     

    
      	
              A.

            	
              The
      parties are each a party to a Joint Venture Development and Operating
      Agreement (the “JV Agreement”), dated effective as of October 22, 2009
      whereby TMM and PML agreed to form a new private Indian company (the “JV
      Company”) where TMM would own 85% and PML would own 15%.  The JV
      Company will operate the business of displaying mobile digital advertising
      platforms in public transportation vehicles such as long-distance buses
      and trains in India (the “Business”).  The newly-fitted buses
      and trains will display third party commercial contents and advertisements
      for a fee;

            

    

    

    
      	
              B.

            	
              the
      JV Company has not been incorporated as of the date hereof, however, the
      Business of the JV Company has been initiated by TMM and PML;
      and

            

    

     

    
      	
              C.

            	
              The
      parties have hence decided to amend the arrangement by PML assigning its
      right and entitlement to receive 15% ownership of the JV Company to TMM
      and PML assigning the License (as defined in the JV agreement) which is
      currently being held in trust by PML for the benefit of TMM and such other
      Company that is operating the Business (the Operating Company) in exchange
      for TMM and the Operating Company engaging PML as a consultant in
      accordance with the terms and conditions of this Consulting Agreement (the
      “Agreement”), which among the other terms and conditions will provide PML
      with compensation of 15% of the net profits of the Business of the
      Operating Company for its services and obligations under this Consulting
      Agreement; and

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              D.

            	
              Accordingly,
      the ownership of the Operating Company shall be 100% in favour of
      TMM. TMM wishes to retain the Consultant under this Agreement to
      provide the Consultant Services (as hereinafter defined) to TMM and the
      Business of the Operating Company.

            

    

     

    NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT THE PARTIES HERETO AGREE AS
FOLLOWS:

     

    Article
I

    

    SERVICES AND
RESPONSIBILITIES OF THE CONSULTANT

    

    
      	
              1.1

            	
              Consultant
      Services.   The Consultant will provide such
      services specified herein on a proactive basis or as TMM may request, from
      time to time, in order to assist the Business of the Operating
      Company.  Together with such instructions and variations as TMM
      may give, the Consultant will provide the following specific services and
      functions to the Operating Company:

            

    

    

    
      (a)
with the
exception of the 4 years exclusive license (the “License”) granted to PML by the
Government of the state of Tamil Nadu, India as mentioned in Clause 6.3 (a) to
operate the Business, PML shall further assist to obtain a similar license from
the governments of the Indian states of Andhra Pradesh, Gujarat, Maharashtra,
Kerala and Karnataka, and any other Indian states possible (the “Participating
States”); PML will use its best efforts to secure licensing rights similar to
the License for all the Participating States, and insofar as possible, ensure
that the Operating Company is the contracting party and recipient of such
licenses. Where such licensing rights are granted the same shall be made
available to the Operating Company, subject to such consideration as may be
mutually agreed upon by PML and TMM, for its exclusive use on a first right of
refusal basis by the Operating Company;

    

    

    
      (b)
make
available to TMM and the Operating Company such office and work facilities and
infrastructure as may be required by the Operating Company and TMM in order to
conduct the operations of the Business at the cost borne by the Operating
Company;

    

    

    
      (c)
ensure
that its management, employees, contractors and sub-contractors cooperate at all
times with TMM and the Operating Company, as required, to conduct the
Business;

    

    

    
      (d)
provide
TMM and the Operating Company with full access (including providing the names,
contact details and any introductions as may be necessary) to all existing
clients of PML in order for the marketing and commercialization of the
Business;

    

    

    
      (e)
ensure
all existing and new clients procured for the Operating Company, insofar as
possible, enter into agreements directly with the Operating
Company;

    

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    

    
      (f)
conduct
all marketing of PML’s services related to the Business to existing and future
clients of PML jointly with the Operating Company’s marketing for the herein
mentioned Business of the Operating Company in the conduct of the Business. It
is specifically agreed between the parties hereto that PML shall function as
Preferred Marketing Agency for all Business and shall give its best efforts to
secure the best advertising rates for the Business. PML forecasts
the  future gross and net revenues accruing to TMM/TMI/Operating
Company from the Business shall be as illustrated hereunder:

    

    

    US
Dollars

     

    
      
        
          
            
              
                
                  	
                          USD 

                          (In Million.)

                        	 	
                          FY Ending

                          March 2011

                        	 	 	
                          FY Ending

                          March 2012

                        	 	 	
                          FY Ending

                          March 2013

                        	 
	
                          Gross
      Revenue

                        	 	 	29.50	 	 	 	54.00	 	 	 	98.00	 
	
                          Agency
      Commission (15%)

                        	 	 	4.43	 	 	 	8.10	 	 	 	14.70	 
	
                          Net
      Revenue

                        	 	 	25.07	 	 	 	45.90	 	 	 	83.30	 

                

              

            

          

        

      

    

    

    Indian Rupees (based on fx
rate @ 46)

     

    
      
        
          
            
              	
                      INR

                      (In Million.)

                    	 	
                      FY Ending

                      March 2011

                    	 	 	
                      FY Ending

                      March 2012

                    	 	 	
                      FY Ending

                      March 2013

                    	 
	
                      Gross
      Revenue

                    	 	 	1357	 	 	 	2484	 	 	 	4508	 
	
                      Agency
      Commission (15%)

                    	 	 	203.78	 	 	 	372.60	 	 	 	676.20	 
	
                      Net
      Revenue

                    	 	 	1153.22	 	 	 	2111.40	 	 	 	3831.80	 

            

          

        

      

    

    

    
      (g)
promptly
provide TMM and the Operating Company with access to all information and
documents as may be required from time to time, to conduct the
Business;

    

    

    
      (h)
continually
and actively use its best efforts to market the Business, and secure orders for
the Operating Company from existing and new clients;

    

     

    
      (i)
be
responsible for the installation of the mobile digital advertising platforms
(the “Technology”) and for ensuring that on completion of the installation, the
Technology is fully functional;

    

    

    
      (j)
be
responsible for the maintenance of the Technology, and for ensuring that once
installed, the Technology remains in good working order at all times. Provided
however that TMM or the Operating Company shall ensure at all times that there
are no delays in payment to PML so as to hamper the operations and in which case
PML shall not be held responsible;

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    
      (k)
conduct
and perform its obligations hereunder on such premises as it will determine,
including its own premises, and will permit access to the Operating Company’s
assets at all reasonable times for the purpose of inspecting work being done
thereon;

    

    

    
      (l)
employ
and engage any such employees, agents and independent contractors as it may
consider necessary or advisable to carry out its duties and obligations
hereunder and in this connection to delegate any of its powers and rights to
perform its duties and obligations hereunder, but PML will not enter into
contractual relationships with a party without prior notification to the Board
of the Operating Company;

    

    

    
      (m)
execute
all documents, deeds and instructions, do or cause to be done all such acts and
things and give all such assurances as may be necessary so that the Operating
Company has good and valid title to its assets, including the
License;

    

    

    
      (n)
diligently
conduct and perform its obligations hereunder in accordance with the development
plans of the Business approved by the Board of the operating Company and in
compliance with all applicable laws, rules, orders and
regulations;

    

    

    
      (o)
abide by
and adhere to the control standards as imposed by TMM, in its sole discretion,
in the Operating Company in the areas including but not limited to finance,
legal, operations and risk management.

    

    

    
      (collectively,
the “Consulting
Services”).

    

     

    Article
II

    

    INFORMATION TO BE PROVIDED
BY TMM AND

    THE OPERATING
COMPANY

    

    
      	
              2.1

            	
              Information
      to be made available.   TMM and the Operating
      Company agree to make available to the Consultant all corporate, financial
      and operating information, Operating Company personnel or other
      consultants, and other reasonable resources which are reasonably necessary
      and sufficient to allow the Consultant to perform the Consulting
      Services.  The Consultant may provide TMM and Operating Company
      information to legal and accounting advisers, and other persons, but that
      such dissemination will be effected with proper prudence and subject to
      such reasonable conditions and restrictions as TMM and the Operating
      Company deem necessary or appropriate and subject to insider information
      rules and restrictions.  The Consultant will use such
      information only for the purposes set out herein and for no competitive or
      other purpose whatsoever.

            

    

    

    
      	
              2.2

            	
              Accuracy
      of the information.   TMM and the Operating Company
      agree that it will bear sole responsibility for the accuracy and
      completeness of the information provided to the Consultant, except for any
      information created solely by the Consultant.  The Company
      represents and warrants that the information will be accurate and complete
      in all material respects and not misleading and will not omit to state any
      fact or information which would be material in its
    estimation.

            

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    
      	
              2.3

            	
              Material
      change in information.   TMM and the Operating
      Company agrees to advise the Consultant promptly of any material change in
      the affairs of the Operating Company or in any information provided to the
      Consultant from the date at which such information is
    given.

            

    

     

    Article
III

    

    COMPLIANCE WITH
LAWS

    

    
      	
              3.1

            	
              Consultant
      Compliance Issues.   The Consultant will comply with
      all laws, whether federal, provincial or state, applicable to the
      Consulting Services provided by it and, when requested by TMM and/or the
      Operating Company, will advise the TMM and/or the Operating Company of any
      particular compliance issues affecting any Consulting Services for which
      the Consultant’s services have been
engaged.

            

    

    

    
      	
              3.2

            	
              Company
      Compliance Issues.   TMM and the Operating Company
      will comply with all laws, whether federal, provincial or state,
      applicable to the Consulting Services and the Operating
      Company.

            

    

    

    
      	
              3.3

            	
              Insider
      Issues.   The Consultant will comply with all
      reasonable endeavors of TMM and the Operating Company, industry practice,
      and law and regulation to ensure that it affords security to information
      of TMM and the Operating Company and that the Consultant, or any persons
      with whom the Consultant works or with whom the Consultant deals, do not
      employ information of TMM and/ or the Operating Company in any manner
      contrary to law or fiduciary
obligations.

            

    

    

    
      	
              3.4

            	
              Trading.   In
      the event that the Consultant, or any person with whom the Consultant
      works or with whom the Consultant deals, trades in TMM’s, or affiliates
      securities, then the Consultant will employ reasonable prudence and good
      market practice as to such trading and will effect such in compliance with
      law.

            

    

     

    Article
IV

    

    TERM, RENEWAL AND
TERMINATION

    

    
      	
              4.1

            	
              Term.   The
      term of this Agreement (the “Term”) is for a period
      of 4
      years commencing on June 1, 2010 (the
      “Effective Date”)
      and terminating May 31, 2014.

            

    

    

    
      	
              4.2

            	
              Renewal.   This
      Agreement will renew automatically for subsequent one-year periods if not
      specifically terminated in accordance with the following provisions.
      Renewal will be on the same terms and conditions contained herein, unless
      modified and agreed to in writing by the Parties, and this Agreement will
      remain in full force and effect (with any collateral written amendments)
      without the necessity to execute a new document.  A Party hereto
      determining not to renew agrees to notify the other Parties hereto in
      writing at least 30 calendar days prior to the end of the Term of its
      intent not to renew this Agreement (the “Non-Renewal
      Notice”).

            

    

    

    
      	
              4.3

            	
              Termination.   Notwithstanding
      any other provision of this Agreement, this Agreement may be terminated by
      a Party (a “Non-Defaulting Party”)
      upon providing written notice to the other Party (the “Defaulting Party”)
      if:

            

    

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Defaulting Party fails to cure a  breach of any provision of
      this Agreement within 30 calendar days from its receipt of written notice
      from the Non-Defaulting Party (unless such breach cannot be reasonably
      cured within said 30 calendar days and the Defaulting Party is actively
      pursuing curing of said breach);

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      Defaulting Party commits fraud or serious neglect or misconduct or illegal
      act in the discharge of its respective duties hereunder or under the law;
      or

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      Defaulting Party becomes adjudged bankrupt or a petition for
      reorganization or arrangement under any law relating to bankruptcy, and
      where any such petition is not
dismissed.

            

    

    

    
      	
              4.4

            	
              Effective
      Date of Termination.   Termination of this Agreement
      will be effective as follows:

            

    

    

    
      	
               
      

            	
              (a)

            	
              if
      the Agreement is terminated by the provision of a Non-Renewal Notice
      pursuant to section 4.2 above, on the expiry of the
  Term;

            

    

    

    
      	
               
      

            	
              (b)

            	
              if
      the Agreement is terminated pursuant to section 4.3(a) above, on the
      30th
      calendar day from the day notice is given;
or

            

    

    

    
      	
               
      

            	
              (c)

            	
              if
      the Agreement is terminated pursuant to any of sections 4.3(b) or 4.3(c)
      above, immediately upon TMM providing the Consultant with written
      notice;

            

    

     

    Article
V

    

    PURCHASE OF EXCLUSIVE
ADVERTISING RIGHTS FROM THE CONSULTANT  FOR 10,392 TAMIL NADU STATE
BUSES

    

    
      	
              5.1

            	
              The
      Parties have agreed that for a period of 4 years the value of advertising
      rights shall be Indian Rupees Nine Hundred And Twenty Million Only
      (INR920,000,000) hereinafter referred to as the “Purchase Price”
      corresponding to the Licensing period represented by
      PML.  Parties have also agreed to set aside a sum of an
      additional Indian Rupees Two Hundred And Thirty Million (INR230,000,000)
      as a contingency sum for the Business on a need to basis only. The Parties
      shall on a best effort basis prudently avert and reduce the need of the
      contingency fund as would be as practicable as
  possible.

            

    

    

    
      	
              5.2

            	
              The
      Purchase Price is exclusive of all applicable duties and taxes.
      corresponding to the Licensing
period.

            

    

    

    
      	
              5.3

            	
              Parties
      have assessed and agreed the value of the advertising rights based on the
      estimated costs of the full installation of the equipment and software
      (the “Technology ”) to operate the Business on the said
    buses.

            

    

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    

    
      	
              5.4

            	
              The
      Parties agree that out of the Purchase Price  of INR920,000,000
      TMM has already remitted an amount of INR46,000,000 to PML. The balance
      amount of INR874,000,000 shall be paid to PML in the following
      manner:

            

    

    

    
      
        
          
            	
                    Amount (INR)

                  	 	
                    Payable on/by (Due Date)

                  
	
                    92,000,000

                  	 	
                    30-06-2010

                  
	
                    138,000,000

                  	 	
                    31-08-2010

                  
	
                    276,000,000

                  	 	
                    15-09-2010

                  
	
                    124,200,000

                  	 	
                    01-04-2011

                  
	
                    124,200,000

                  	 	
                    01-04-2012

                  
	
                    119,600,000

                  	 	
                    01-04-2013

                  

          

        

      

    

    

    
      
        	
                5.5

              	
                Agency
      Commission PML
      being the Preferred Marketing Agency for  all Business shall be
      entitled to and shall be paid by the Operating Company 15% of Gross amount
      of sales billing as Agency Commission, for all  advertising
      business garnered by PML as increased by applicable taxes and
      duties.

              

      

    

    
      	
               
      

            	
              The
      Parties hereto understand and agree that this Agency Commission shall be
      over and above the compensation of 15% of Net Profit of the Operating
      Company as mentioned herein before in this
  Agreement.

            

    

    

    
      
        	
                5.6

              	
                Sales
      Invoicing & Remission thereof TMM
      or TMI or the Operating Company shall invoice PML, for the amount invoiced
      by PML in respect of sales generated by it on behalf of TMM, on month to
      month basis. Such invoicing shall correspond to 85% of the total sales
      invoiced by PML in any particular month in respect of the Business. PML
      shall retain 15% of the collections as its Agency commission along with
      the applicable taxes & duties in addition  and the balance
      amount shall be remitted to TMI/the Operating Company within a period of
      not later than 90 days, as per industry credit terms ,of the submission of
      the invoice by TMM/TMI/Operating Company. It is further understood and
      agreed between the parties hereto that the first Invoice shall be raised
      not before 1-7-2010 and thereafter monthly invoicing shall follow and
      remission shall be made by PML in the desired time
  frame.

              

      

    

     

    Article
VI

    

    REPRESENTATIONS, WARRANTIES
AND COVENANTS

    

    Representations
and Warranties of the Parties.

    

    
      	
              6.1

            	
              Each
      Party represents and warrants to the other Party hereto that, to the best
      of its knowledge:

            

    

    

    
      	
               
      

            	
              (a)

            	
              it
      has full power and authority to carry on its business and to enter into
      this Agreement and any agreement or instrument referred to or contemplated
      by this Agreement, except where regulatory or shareholder approval may be
      required;

            

    

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)

            	
              neither
      the execution and delivery of this Agreement nor any of the agreements
      referred to herein or contemplated hereby, nor the consummation of the
      transactions hereby contemplated conflict with, result in the breach of or
      accelerate the performance required by, any agreement to which it is a
      party; and

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      execution and delivery of this Agreement and the Agreements contemplated
      hereby will not violate or result in the breach of the laws of any
      jurisdiction applicable or pertaining thereto or its constating
      documents.

            

    

    

    
      	
              6.2

            	
              Each
      Party covenants, warrants and agrees with the
  other:

            

    

    

    
      	
               
      

            	
              (a)

            	
              to
      perform or cause to be performed its obligations and commitments under
      this Agreement;

            

    

    

    
      	
               
      

            	
              (b)

            	
              not
      to engage either alone or in association with others in any activity in
      respect of the Business of the Operating Company in India except as
      mutually agreed to by the Parties
hereto;

            

    

    

    
      	
               
      

            	
              (c)

            	
              to
      be just and faithful in all its activities and dealings with the other
      Party; and

            

    

    

    
      	
               
      

            	
              (d)

            	
              any
      information which the Parties may provide to each other or the Operating
      Company or any permissible person or company will be accurate and complete
      in all material respects and not misleading, and will not omit to state
      any fact or information which would be material to the Parties or the
      Operating Company or such permissible person or
  company.

            

    

    

    
      	
              6.3

            	
              Representations
      and Warranties of PML

            

    

    

    
      	
               
      

            	
              (a)

            	
              PML
      represents and warrants to TMM that the License permits PML to operate the
      Business on more than 10,000 buses within the State of Tamil Nadu in
      India;

            

    

    

    
      	
               
      

            	
              (b)

            	
              PML
      represents and warrants to TMM that the License already contributed to the
      Business and being held in trust by PML for the benefit of TMM and the
      Operating Company is free and clear of encumbrances of any nature and the
      same will be assigned  and contributed with full right, title,
      and interest to the Operating Company and free of claims by any party
      whatsoever, and no person has any agreement or option or any right or
      privilege capable of becoming an agreement or option for any right to the
      License subject to the condition that at any time during the subsistence
      of this Agreement TMM or the Operating Company has not defaulted in
      payment of Compensation or Agency Commission or any other amount to which
      PML is entitled to receive from TMM or the Operating Company under this
      Agreement;

            

    

    

    
      	
               
      

            	
              (c)

            	
              PML
      represents and warrants that all existing clients of PML will be given the
      first right to procure the mobile digital advertising platforms services
      from the Operating Company on arms’ length commercial rates and
      terms.  In the event that PML’s clients accept bundled services
      from both PML and the Operating Company, PML agrees that all invoicing of
      the clients for the bundled services will be handled via separate invoices
      of the respective parties but submitted jointly;
  and

            

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)

            	
              PML
      represents and warrants to TMM that all representations and warranties
      made by PML herein and all information provided by PML or by PML’s
      advisors, agents, employees, officers and representatives to TMM in the
      course of the negotiations leading to the execution of this Agreement
      were, when given, and remain, true and accurate in all material respects,
      and are not misleading, and copies of all contracts and documents provided
      by PML to TMM are true and complete and the contents of such contracts and
      documents comprise the entire agreement between the parties
      thereto.  PML further represents and warrants that it is not
      aware of any fact or matter not disclosed in writing to TMM which renders
      any such information or representation untrue, incorrect, inaccurate or
      misleading, or the disclosure of which may affect the willingness of TMM
      to enter into this Agreement.  If any of the representations and
      warranties of PML are found to be incorrect or if there is a breach by PML
      of any of the covenants or agreements, which incorrectness or breach will
      result in any loss or damage sustained directly or indirectly by TMM, then
      PML will pay the amount of the loss or damage to TMM within 30 days of
      receiving notice of the loss or
damage.

            

    

    

    
      	
              6.4

            	
              Covenants.

            

    

    

    
      	
               
      

            	
              (a)

            	
              PML
      undertakes to use its best efforts to keep the License, and/or any other
      licensing rights obtained from other Participating States or otherwise
      (collectively, the “Licenses”), valid and in good standing at all
      times.  PML further undertakes that it will not assign,
      transfer, encumber, pledge or hypothecate the Licenses, or do any act or
      cause any omission which will in any way, directly or indirectly, result
      in the loss of the Licenses, or affect the ability of the Operating
      Company to conduct the Business or result in a reduction in revenue of the
      Business.  PML shall not undertake any act or enter into any
      contract or agreement that may, or would, in any way adversely affect the
      Licenses, and PML undertakes to notify TMM and the Operating Company in
      writing if PML is in breach of its obligations under the Licenses or if
      any of the Licenses are or may be adversely affected for any reason
      whatsoever; and

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      covenants hereinbefore set out are conditions on which TMM has relied in
      entering into this Agreement and PML will indemnify and save TMM harmless
      from all loss, damage, costs, actions and suits arising out of or in
      connection with any breach of such covenants by PML or any other
      representations or obligations of PML contained in this
      Agreement.

            

    

     

    Article
VII

    

    INFORMATION AND ADVICE
CONFIDENTIAL

    

    
      	
              7.1

            	
              Confidentiality.   No
      information furnished hereunder in connection with the Consulting Services
      will be published by any Party without the prior written consent of the
      other Party, but such consent in respect of the reporting of factual data
      will not be unreasonably withheld, and will not be withheld in respect of
      information required to be publicly disclosed pursuant to applicable
      securities or corporation laws.

            

    

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    
      	
              7.2

            	
              Confidential
      Information.   The Consultant will not, except as
      authorized or required by the Consultant’s duties hereunder, reveal or
      divulge to any person or companies any information concerning the
      organization, business, finances, transactions or other affairs of TMM or
      the Operating Company, or of any of its subsidiaries, or any other
      confidential information of TMM or the Operating Company (collectively,
      the “Confidential
      Information”), which may come to the Consultant’s knowledge during
      the Term, and the Consultant will keep in complete secrecy all
      Confidential Information entrusted to the Consultant and will not use or
      attempt to use any such information in any manner which may injure or
      cause loss, either directly or indirectly, to TMM’s or the Operating
      Company’s Businesses and will not use or permit the same to be used for
      any purpose of the Consultant not in the pursuit of this Agreement or by
      any competitor or third party.  The Consultant will immediately
      advise TMM or the Operating Company if it comes to the Consultant’s
      knowledge that any party is employing the Operating Company’s Confidential
      Information for purposes not authorized by this Agreement or by TMM or the
      Operating Company and the Consultant will give TMM and the Operating
      Company all reasonable assistance to protect the Confidential
      Information,.  This restriction will continue to apply after the
      termination of this Agreement without limit in point of time but will
      cease to apply to information or knowledge which may come into the public
      domain through no effort or fault of the
  Consultant.

            

    

    

    
      	
              7.3

            	
              Company’s
      Property.  The Consultant agrees
  that:

            

    

    

    
      	
               
      

            	
              (a)

            	
              all
      Confidential Information and property, including without limitation, all
      books, manuals, records, reports, notes, written and oral opinions and
      advice, contracts, lists, technology and improvements patents, trademarks,
      trade names, business and financial records and other documents
      (collectively, the “Company’s Property”) furnished to or prepared or
      developed by: (i) the Consultant in the course of or incidental to this
      Agreement and the duties hereof; or (ii) the Operating Company, is for the
      exclusive benefit of TMM and the Operating Company and is owned
      exclusively by TMM or its designee;

            

    

    

    
      	
               
      

            	
              (b)

            	
              during
      the Term and thereafter, the Consultant will not contest the title to any
      of the Company’s Property, in any way dispute or impugn the validity of
      the Company’s Property or take any action to the detriment of TMM’s
      interests therein;

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      Consultant will immediately notify TMM and the Operating Company of any
      infringement of or challenge to any of the Company’s Property as soon as
      the Consultant becomes aware of the infringement or
    challenge;

            

    

    

    
      	
               
      

            	
              (d)

            	
              upon
      termination of this Agreement the Consultant will be promptly return the
      Company’s Property to TMM or the Operating Company and will keep no copies
      thereof, except as may be agreed in writing on agreed terms with TMM;
      and

            

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (e)

            	
              during
      the Term and thereafter, the Consultant will not, directly or indirectly,
      except as required by the normal business of the Operating Company or
      expressly consented to in writing by
TMM:

            

    

    

    
      	
               
      

            	
              (i)

            	
              disclose,
      publish or make available, other than to an authorized employee, officer,
      or director of the Operating Company, any of the Company’s
      Property;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              acquire,
      possess for its own interest, sell, transfer or otherwise use or exploit
      any of the Company’s Property; or

            

    

    

    
      	
               
      

            	
              (iii)

            	
              permit
      the sale, transfer, or use or exploitation of any of the Company’s
      Property by any third party.

            

    

    

    
      	
              7.4

            	
              Consultant’s
      Business Conduct.   The Consultant warrants that it
      will conduct its Consulting Services and other related activities in a
      manner which is lawful and reputable and which brings good repute to TMM
      and the Operating Company, the Consultant and the Business
      interests.  In this regard the Consultant warrants to provide
      all Consulting Services in a sound and professional manner such that the
      same meets superior standards of performance quality within the standards
      of the industry or as set by the specifications of the Operating
      Company.

            

    

     

    Article
VIII

    

    INDEMNIFICATION AND LEGAL
PROCEEDINGS

    

    
      	
              8.1

            	
              Indemnification.   Each
      Party agrees to indemnify and save the other, its affiliates and their
      respective directors, officers, employees and agents (each an “Indemnified Party”)
      harmless from and against any and all losses, claims, actions, suits,
      proceedings, damages, liabilities or expenses of whatsoever nature or
      kind, including any investigation expenses incurred by any Indemnified
      Party, to which an Indemnified Party may become subject by reason of
      breach of this Agreement or of law by the defaulting
      Party.  Specifically, but not to derogate from the forgoing but
      for certainty for the comfort of the Consultant, TMM agrees to indemnify
      the Consultant for any actions, losses, proceedings, or other harm
      suffered, including legal costs as incurred, in the service of the
      Operating Company except only where such harm was suffered by the
      Consultant primarily as a consequence of its own grossly negligent or
      unlawful conduct.

            

    

    

    
      	
              8.2

            	
              Claim
      of Indemnification.   The Parties hereto agree to
      waive any right they might have of first requiring the Indemnified Party
      to proceed against or enforce any other right, power, remedy, security or
      claim payment from any other person before claiming this
      indemnity.

            

    

    

    
      	
              8.3

            	
              Notice
      of Claim.   In case any action is brought against an
      Indemnified Party in respect of which indemnity may be sought, the
      Indemnified Party will give prompt written notice of any such action of
      which the Indemnified Party has knowledge and the indemnifying Party will
      undertake the investigation and defense thereof on behalf of the
      Indemnified Party, including the prompt employment of counsel acceptable
      to the Indemnified Party affected and the payment of all
      expenses.  Failure by the Indemnified Party to so notify will
      not relieve the relevant Party of such relevant Party’s obligation of
      indemnification hereunder unless (and only to the extent that) such
      failure results in a forfeiture by the relevant Party of substantive
      rights or defenses.

            

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    

    
      	
              8.4

            	
              Settlement.   No
      admission of liability and no settlement of any action will be made
      without the consent of each of the Parties hereto, such consent not to be
      unreasonable withheld.

            

    

    

    
      	
              8.5

            	
              Legal
      Proceedings.   Notwithstanding that the indemnifying
      Party will undertake the investigation and defense of any action, an
      Indemnified Party will have the right to employ separate counsel in any
      such action and participate in the defense thereof, but the fees and
      expenses of such counsel will be at the expense of the Indemnified Party
      unless:

            

    

    

    
      	
               
      

            	
              (a)

            	
              such
      counsel has been authorized by the indemnifying
  Party;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      indemnifying Party has not assumed the defense of the action within a
      reasonable period of time after receiving notice of the
      action;

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      indemnifying Party and the Indemnified Party will have been advised by
      counsel that there may be a conflict of interest between the Parties;
      or

            

    

    

    
      	
               
      

            	
              (d)

            	
              there
      are one or more legal defenses available to the Indemnified Party which
      are different from or in addition to those available to the indemnifying
      Party.

            

    

     

    Article
IX

    

    
      FORCE
MAJEURE

    

    

    
      	
              9.1

            	
              Events.   If
      either Party hereto is at any time during this Agreement prevented or
      delayed in complying with any provisions of this Agreement by reason of
      strikes, walk-outs, labour shortages, power shortages, fires, wars, acts
      of God, earthquakes, storms, floods, explosions, accidents, protests or
      demonstrations by environmental lobbyists, delays in transportation,
      breakdown of machinery, inability to obtain necessary materials in the
      open market, unavailability of equipment, governmental regulations
      restricting normal operations, shipping delays or any other reason or
      reasons beyond the control of that Party, then the time limited for the
      performance by that Party of its obligations hereunder will be extended by
      a period of time equal in length to the period of each prevention or
      delay.

            

    

    

    
      	
              9.2

            	
              Notice.   A
      Party will within seven calendar days give notice to the other Party of
      each event of force
      majeure under section 8.1 hereinabove, and upon cessation of such
      event will furnish the other Party with notice of that event together with
      particulars of the number of days by which the obligations of that Party
      hereunder have been extended by virtue of such event of force majeure and all
      preceding events of force
      majeure.

            

    

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    

    Article
X

    

    
      DEFAULT AND
TERMINATION

    

    

    
      	
              10.1

            	
              Default.   The
      Parties hereto agree that if either of the Parties is in default with
      respect to any of the provisions of this Agreement (hereinafter referred
      to as the “Defaulting
      Party”), the non-defaulting Party (hereinafter referred to as the
      “Non-Defaulting
      Party”) will give notice to the Defaulting Party designating such
      default, and within thirty (30) business days after its receipt of such
      notice, the Defaulting Party will
either:

            

    

    

    
      	
               
      

            	
              (a)

            	
              cure
      such default, or diligently commence proceedings to cure such default and
      prosecute the same to completion without undue delay, with notice to the
      Non-Defaulting Party of the procedures it has instigated to cure;
      or

            

    

    

    
      	
               
      

            	
              (b)

            	
              give
      the Non-Defaulting Party notice that it denies that such default has
      occurred and that it is submitting the question to the appropriate
      tribunal.

            

    

    

    If
default is not addressed appropriately in the form required by (a) above, or
cured within 30 days of a tribunal’s finding of default, then the Non-Defaulting
Party may terminate this Agreement at any time, without prejudice to any claims
it may have for an accounting or damages.

     

    Article
XI

    

    
      NOTICE

    

    

    
      	
              11.1

            	
              Notice.   Each
      notice, demand or other communication required or permitted to be given
      under this Agreement will be in writing and will be delivered to the other
      Party, at the address for such Party specified above.  The date
      of receipt of such notice, demand or other communication will be the date
      of delivery thereof. Transmission by facsimile, with electronic
      confirmation, will be considered
delivery.

            

    

    

    
      	
              11.2

            	
              Change
      of Address.   Either Party may at any time and from
      time to time notify the other Party in writing of a change of address and
      the new address to which notice will be given to it thereafter until
      further change.

            

    

     

    Article
XII

    

    
      GENERAL
PROVISIONS

    

    

    
      	
              12.1

            	
              Entire
      Agreement.   This Agreement constitutes the entire
      agreement between the Parties hereto and supersedes every previous
      agreement, expectation, negotiation, representation or understanding,
      whether oral or written, express or implied, statutory or otherwise,
      between the Parties of this
Agreement.

            

    

    

    
      	
              12.2

            	
              Enurement
      and Assignment.   This Agreement will enure to the
      benefit of and will be binding upon the Parties, their respective heirs,
      executors, administrators and permitted assigns.  This Agreement
      may not be assigned as to any part by any Party without the permission in
      writing of the other Party.

            

    

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    

    
      	
              12.3

            	
              Time
      of the Essence.   Time will be the essence of this
      Agreement and it is specifically understood by the Parties hereto that any
      delay in payment of Purchase Price to PML shall, at the option of PML, be
      construed as a material breach in terms of this
  Agreement.

            

    

    

    
      	
              12.4

            	
              Applicable
      Law and Despute Resolution.   This Agreement will be
      governed exclusively by and construed and enforced in accordance with the
      laws of India.

            

    

    
      	
               
      

            	
              If
      a dispute arises out of or in connection with this Agreement, or in
      respect of any defined legal relationship associated therewith or derived
      there from, the Parties have irrevocably agreed to seek an amicable
      settlement of the dispute through conciliation under the Rules of
      Conciliation of the Arbitration and Conciliation Tribunal of the
      Federation of Indian Chambers of Commerce and Industry (FACT). The
      authority to appoint 2 conciliators shall be FACT and FACT will provide
      administrative services in accordance with the FACT Rules of
      Conciliation.

            

    

    

    
      	
              12.5

            	
              Invalid
      Provisions.   If any provision of this Agreement is
      at any time unenforceable or invalid for any reason it will be severable
      from the remainder of this Agreement and, in its application at that time,
      this Agreement will be construed as though such provision was not
      contained herein and the remainder will continue in full force and effect
      and be construed as if this Agreement had been executed without the
      invalid or unenforceable provision.

            

    

    

    
      	
              12.6

            	
              Severability
      and Construction.   Each Article, section,
      paragraph, term and provision of this Agreement, and any portion thereof,
      will be considered severable, and if, for any reason, any portion of this
      Agreement is determined to be invalid, contrary to or in conflict with any
      applicable present or future law, rule or regulation in a final
      unappealable ruling issued by any Court, agency or tribunal with valid
      jurisdiction in a proceeding to which any Party hereto is a party, that
      ruling will not impair the operation of, or have any other effect upon,
      such other portions of this Agreement as may remain otherwise intelligible
      (all of which will remain binding on the Parties and continue to be given
      full force and effect as of the date upon which the ruling becomes
      final).

            

    

    

    
      	
              12.7

            	
              Warranty
      of Good Faith.   The Parties hereto warrant each to
      the other to conduct their duties and obligations hereof in good faith and
      with due diligence and to employ all reasonable endeavours to fully comply
      with and conduct the terms and conditions of this
    Agreement.

            

    

    

    
      	
              12.8

            	
              Representation
      and Costs.   It is hereby acknowledged by each of
      the Parties hereto that, as between TMM and the Consultant, Jensen Lunny
      MacInnes Law Corporation, acts solely for TMM and that the Consultant has
      been advised to obtain independent legal advice with respect to this
      Agreement and that it  has consulted with or has had the
      opportunity to consult with independent counsel of its  own
      choice concerning this Agreement and that it has read and understands the
      Agreement, is fully aware of its legal effect, and has entered into it
      freely based on his own judgment.

            

    

    

    
      	
              12.9

            	
              Consents
      and Waivers.   No consent or waiver expressed or
      implied by either Party in respect of any breach or default by the other
      in the performance by such other of its obligations hereunder will be
      valid unless it is in writing, be relied upon as a consent to or waiver of
      any other breach or default of the same or any other obligation or
      constitute a general waiver under this Agreement, or eliminate or modify
      the need for a specific consent or waiver in any other or subsequent
      instance.

            

    

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

     

    
      	
              12.10

            	
              Counterparts.   This
      Agreement may be signed by the Parties hereto in as many counterparts as
      may be necessary, each of which so signed will be deemed to be an
      original, and such counterparts together will constitute one and the same
      instrument and notwithstanding the date of execution will be deemed to
      bear the execution date as set forth on the front page of this
      Agreement.

            

    

     

    IN
WITNESS WHEREOF the Parties hereto have hereunto set their hands and
seals in the presence of their duly authorized signatories effective as at the
date first above written.

     

    
      
        	
                The
      CORPORATE SEAL of

              	
                )

              	 
      
	
                TECHMEDIA ADVERTISING
      MAURITIUS,

              	
                )

              	 
      
	
                was
      hereunto affixed by:

              	
                )

              	 
      
	 
      	
                )

              	 
      
	 
      	 
      	 
      
	
                  

              	
                )

              	 
      
	
                Authorized
      Signatory

              	
                )

              	 
      
	 
      	 
      	 
      
	
                /s/ William Goh Han Tiang

              	
                )

              	 
      
	
                (William
      Goh Han Tiang)

              	
                )

              	 
      
	
                DIRECTOR

              	 
      	 
      
	 
      	 
      	 
      
	
                The
      CORPORATE SEAL of

              	
                )

              	 
      
	
                PEACOCK MEDIA
      LTD.,

              	
                )

              	 
      
	
                was
      hereunto affixed by:

              	
                )

              	 
      
	 
      	
                )

              	 
      
	 
      	 
      	 
      
	
                  

              	
                )

              	 
      
	
                Authorized
      Signatory

              	
                )

              	 
      
	 
      	 
      	 
      
	
                /s/ Sandeep Deepak Chawla

              	
                )

              	 
      
	
                (Sandeep
      Deepak Chawla)

              	
                )

              	 
      
	
                Chairman
      and Managing Director

              	 
      	 
      
	 
      	 
      	 
      
	
                Witness:-

              	 
      	 
      
	 
      	 
      	 
      
	
                Signature:  /s/
      Johnny Lian Tian Yong

              	 
      	 
      
	 
      	 
      	 
      
	
                Name:  Johnny
      Lian Tian Yong

              	 
      	 
      

      

    

     

    
      
         

      

      
        -15-SAJAN,
INC.

    AMENDED
AND RESTATED

    2004
LONG-TERM INCENTIVE PLAN

     

    Effective
Date:  October 8, 2004

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SAJAN,
INC.

    AMENDED
AND RESTATED

    2004
LONG-TERM INCENTIVE PLAN

     

    Table of
Contents

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      	
                                                                                                              Section

                                                                                                            	 
      	 
      	 
      	
                                                                                                              Page

                                                                                                            
	 	 	 	 	 
	
                                                                                                              1.

                                                                                                            	 
      	
                                                                                                              Purpose of the Plan

                                                                                                            	 
      	
                                                                                                              1

                                                                                                            
	 	 	 	 	 
	
                                                                                                              2.

                                                                                                            	 
      	
                                                                                                              Definitions

                                                                                                            	 
      	
                                                                                                              1

                                                                                                            
	 	 	 	 	 
	
                                                                                                              3.

                                                                                                            	 
      	
                                                                                                              Shares Subject to the Plan

                                                                                                            	 
      	
                                                                                                              3

                                                                                                            
	 	 	 	 	 
	
                                                                                                              4.

                                                                                                            	 
      	
                                                                                                              Administration

                                                                                                            	 
      	
                                                                                                              4

                                                                                                            
	 	 	 	 	 
	
                                                                                                              5.

                                                                                                            	 
      	
                                                                                                              Term of Plan

                                                                                                            	 
      	
                                                                                                              5

                                                                                                            
	 	 	 	 	 
	
                                                                                                              6.

                                                                                                            	 
      	
                                                                                                              Terms and Conditions of Qualified
      Options

                                                                                                            	 
      	
                                                                                                              5

                                                                                                            
	 	 	 	 	 
	
                                                                                                              7.

                                                                                                            	 
      	
                                                                                                              Terms and Conditions of Non-Qualified
      Options

                                                                                                            	 
      	
                                                                                                              8

                                                                                                            
	 	 	 	 	 
	
                                                                                                              8.

                                                                                                            	 
      	
                                                                                                              Automatic Grants of Director Options to
      Non-employee Directors

                                                                                                            	 
      	
                                                                                                              11

                                                                                                            
	 	 	 	 	 
	
                                                                                                              9.

                                                                                                            	 
      	
                                                                                                              Terms and Conditions of Stock Appreciation
      Rights

                                                                                                            	 
      	
                                                                                                              14

                                                                                                            
	 	 	 	 	 
	
                                                                                                              10.

                                                                                                            	 
      	
                                                                                                              Awards of Restricted Stock

                                                                                                            	 
      	
                                                                                                              16

                                                                                                            
	 	 	 	 	 
	
                                                                                                              11.

                                                                                                            	 
      	
                                                                                                              Other Awards

                                                                                                            	 
      	
                                                                                                              18

                                                                                                            
	 	 	 	 	 
	
                                                                                                              12.

                                                                                                            	 
      	
                                                                                                              Performance-Based Awards

                                                                                                            	 
      	
                                                                                                              19

                                                                                                            
	 	 	 	 	 
	
                                                                                                              13.

                                                                                                            	 
      	
                                                                                                              Adjustments Upon Certain
    Events

                                                                                                            	 
      	
                                                                                                              20

                                                                                                            
	 	 	 	 	 
	
                                                                                                              14.

                                                                                                            	 
      	
                                                                                                              Shares Acquired for
    Investment

                                                                                                            	 
      	
                                                                                                              22

                                                                                                            
	 	 	 	 	 
	
                                                                                                              15.

                                                                                                            	 
      	
                                                                                                              No Right to Employment, Service as a Director or
      Awards

                                                                                                            	 
      	
                                                                                                              22

                                                                                                            
	 	 	 	 	 
	
                                                                                                              16.

                                                                                                            	 
      	
                                                                                                              Other Benefit and Compensation
      Programs

                                                                                                            	 
      	
                                                                                                              23

                                                                                                            
	 	 	 	 	 
	
                                                                                                              17.

                                                                                                            	 
      	
                                                                                                              Successors and Assigns

                                                                                                            	 
      	
                                                                                                              23

                                                                                                            
	 	 	 	 	 
	
                                                                                                              18.

                                                                                                            	 
      	
                                                                                                              Nontransferability of Awards; Designation of
      Beneficiary

                                                                                                            	 
      	
                                                                                                              23

                                                                                                            
	 	 	 	 	 
	
                                                                                                              19.

                                                                                                            	 
      	
                                                                                                              Amendments or Termination

                                                                                                            	 
      	
                                                                                                              23

                                                                                                            
	 	 	 	 	 
	
                                                                                                              20.

                                                                                                            	 
      	
                                                                                                              International Participants

                                                                                                            	 
      	
                                                                                                              24

                                                                                                            
	 	 	 	 	 
	
                                                                                                              21.

                                                                                                            	 
      	
                                                                                                              General

                                                                                                            	 
      	
                                                                                                              24

                                                                                                            
	 	 	 	 	 
	
                                                                                                              22.

                                                                                                            	
                                                                                                                

                                                                                                            	
                                                                                                              Effective Date

                                                                                                            	
                                                                                                                

                                                                                                            	
                                                                                                              25

                                                                                                            

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    SAJAN,
INC.

    AMENDED
AND RESTATED

    2004
LONG- TERM INCENTIVE PLAN

     

    
      	
              1. 

            	
              Purpose
      of the Plan

            

    

     

    The purpose of the Plan is to aid the
Company and its Affiliates in recruiting and retaining employees, directors,
independent contractors and other service providers to the Company and to
motivate such employees, directors, independent contractors and other service
providers to exert their best efforts on behalf of the Company and its
Affiliates by providing incentives through the granting of
Awards.  The Company expects that it will benefit from the stock
ownership opportunities and other benefits provided to such Participants under
this Plan to encourage alignment of their interest in the Company’s success with
that of other stakeholders.

     

    
      	
              2. 

            	
              Definitions

            

    

     

    The following capitalized terms used in
the Plan have the respective meanings set forth in this Section; other terms are
defined elsewhere in the Plan:

     

    (a)          “Affiliate”
means a Parent or Subsidiary.

     

    (b)          “Award”
means an Option, Stock Appreciation Right, Share of Restricted Stock,
Other Stock-Based Award or Other Cash-Based Award granted pursuant to the
Plan.

     

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

     

    (d)     
    “Code”
means the Internal Revenue Code of 1986, as amended, or any successor
thereto.

     

    (e)          “Committee”
means the Compensation Committee of the Board or, if the Board has not
appointed a separate Compensation Committee, the entire Board.

     

    (f)   
       “Common Stock”
means the Company’s common stock, $0.01 par value per share.

     

    (g)   
      “Company”
means Sajan, Inc., a Minnesota corporation.

     

    (h)          “Director”
means a member of the Board of Directors of the Company.

     

    (i)           “Director Option”
means a Non-Qualified Option granted to a Director to a Director pursuant
to Section 8.

     

    (j)           “Effective Date”
means the earlier of the date the Company’s initial public offering is
declared effective by the Securities and Exchange Commission or December 31,
2005.

    
      
         

      

      
        - 1
-

        
          

        

      

      
         

      

    

    (k)          “Employee”
means any person, including officers and Directors, employed by the
Company or any Subsidiary.  The payment to a Director by the Company
of directors’ fees shall not be sufficient to constitute employment by the
Company.

     

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

     

    (m)         “Exercise Price”
means the purchase price per Share under the terms of an
Option.

     

    (n)           “Fair Market
Value” means, on a given date, (i) if the Common Stock is listed or
admitted to unlisted trading privileges on any national securities exchange, the
average of the closing sales prices of the Common Stock on the end of any day on
all national securities exchanges on which the Common Stock may at the time be
listed or, if there have been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day or, (ii) if the Common Stock is not so listed or admitted but
transactions in the Common Stock are reported on The NASDAQ Stock Market, the
closing price quoted on The NASDAQ Stock Market on such day, or (iii) if the
Common Stock is not so listed or admitted to unlisted trading privileges or
quoted on The NASDAQ Stock Market, and bid and asked prices therefor in the
domestic over-the-counter market are reported by Pink Sheets LLC (or any
comparable reporting service), the average of the closing bid and asked prices
on such day as reported by Pink Sheets LLC (or any comparable reporting
service), or (iv) if the Common Stock is not listed on any national securities
exchange or quoted on The NASDAQ Stock Market or in the domestic
over-the-counter market, the fair value of the Common Stock determined by the
Committee in good faith in the exercise of its reasonable
discretion.

     

    (o)          “Non-employee
Director” means a Director who is not an Employee of the
Company.

     

    (p)          “Non-Qualified
Option” means a stock option granted pursuant to Section 7 that does not
qualify as an incentive stock option as defined in Section 422 of the
Code.

     

    (q)          “Option”
means a Qualified Option or a Non-Qualified Option (including a Director
Option).

     

    (r)      
    “Other
Stock-Based Awards” means Awards granted pursuant to Section 11 (a) or
Section 12.

     

    (s)          “Other Cash-Based
Awards” means Awards granted pursuant to Section 11(b) or Section
12.

     

    (t)        
  “Parent”
means any “parent corporation” of the Company, as such term is defined in
Section 424( e) of the Code or any successor provision.  The term
shall include any Parent which becomes such after adoption of the
Plan.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    (u)          “Participant”
means an employee of the Company or an Affiliate who is selected by the
Committee to participate in the Plan; a Director of the Company who receives
Director Options or other Awards under the Plan; or any consultant, agent,
advisor or independent contractor who is selected by the Committee to
participate in the Plan and who renders bona fide services to the Company or an
Affiliate that (i) are not in connection with the offer and sale of the
Company’s securities in a capital-raising transaction and (ii) do not directly
or indirectly promote or maintain a market for the Company’s
securities.  Except where the context otherwise requires, references
in this Plan to “employment” and related terms shall apply to services in any
such capacity.

     

    (v)          “Performance-Based
Awards” means Options, Awards of Restricted Stock, Other Stock-Based
Awards and Other Cash-Based Awards granted pursuant to Section 12.

     

    (w)         “Performance-Based
Full-Value Awards” means all Performance-Based Awards other than Options
and Stock Appreciation Rights.

     

    (x)          “Plan”
means this Sajan, Inc. 2004 Long-Term Incentive Plan, as amended or
supplemented from time to time.

     

    (y)          “Qualified
Option” means a stock option granted pursuant to Section 6 that is
intended to qualify as an incentive stock option under Section 422 of the
Code.

     

    (z)           “Restricted
Stock” means any shares of Common Stock granted under Section
10.

     

    (aa)        “Stock
Appreciation Right” means a stock appreciation right granted pursuant to
Section 9.

     

    (bb)       “Subsidiary”
means any “subsidiary corporation” of the Company, as such term is
defined in Section 424(f) of the Code.  The term shall include any
Subsidiary which becomes such after adoption of the Plan.

     

    (cc)        “Tenure-Based
Full-Value Awards” means Awards other than Options and Stock Appreciation
Rights that are not Performance-Based Awards.

     

    
      	
              3.

            	
              Shares
      Subject to the Plan

            

    

     

    
      (a)        
The total
number of shares of Common Stock which may be issued under the Plan is 2,200,000
shares.  The full number of shares of Common Stock available under the
Plan may be used for any Option or other type of Award.  The aggregate
number of shares of Common Stock available under the Plan shall be subject to
adjustment upon the occurrence of any of the events and in the manner set forth
in Section 13.  If all or any potion of an Option or Stock
Appreciation Right expires or is terminated, surrendered or cancelled without
having been fully exercised, if Restricted Stock is forfeited, or if any other
grant of an Award results in any shares of Common Stock not being issued, the
shares of Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan.  Any shares of Common Stock which are
used as full or partial payment to the Company upon exercise of an Option or for
any other Award that requires a payment to the Company and any shares
surrendered or withheld to pay employment taxes or other withholding obligations
also shall be available for the grant of Awards under the Plan.  The
issuance of shares of Common Stock upon the exercise or satisfaction of an A
ward shall reduce the total number of shares of Common Stock available under the
Plan.  No fractional shares of Common Stock will be issued under the
Plan, but instead any fractional Share will be rounded downward to the next
lowest whole Share.

    

    

      
        
           

        

        
          - 3
-

          
            

          

        

        
           

        

      

    

     

    
      (b)        
Individual
Limits.  Subject to
adjustment as provided in Section 13, no Participant may be granted Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other
Stock-Based Awards, Performance Awards, or any combination thereof relating to
more than 300,000 Shares under the Plan during any fiscal year. In addition to
the foregoing, the maximum aggregate dollar value that may be paid to any
Participant for any Awards denominated in cash in any fiscal year shall be
$500,000, including any amounts earned during such fiscal year and deferred. If
an Award is cancelled, the cancelled Award shall continue to be counted towards
the limitations set forth in this Section 3(b).

    

     

    
      	
              4.

            	
              Administration

            

    

     

    
      (a)        
Delegation of
Authority.  The Plan shall be administered by the
Committee.  The Committee shall consist of the Board, unless the Board
appoints a Committee consisting of at least two but fewer than all the members
of the Board.  If the Committee does not consist of the entire Board,
the Committee’s members shall serve at the pleasure of the Board, which may from
time to time appoint members in substitution for members previously appointed
and fill vacancies, however caused, in the Committee.  The Committee
may select one of its members as its Chairperson and shall hold its meetings at
such times and places as it may determine.  A majority of the
Committee’s members shall constitute a quorum.  All determinations of
the Committee made at a meeting in which a quorum is present shall be made by a
majority of its members present at the meeting.  Any decision or
determination of the Committee reduced to writing and signed by a majority of
the members shall be fully as effective as if it had been made by a majority
vote at a meeting duly called and held.

    

     

    
      (b)        
Authority of
Committee.  The Committee shall have exclusive power to make
Awards and to determine when and to whom Awards shall be granted, and the form,
amount and other terms and conditions of each Award, subject to the provisions
of this Plan and any applicable law or regulation.  The Committee may
determine whether, to what extent and under what circumstances Awards may be
settled, paid or exercised in cash, shares of Common Stock or other Awards or
other property, or cancelled, forfeited or suspended.  The Committee
shall have the authority to interpret this Plan and any Award or agreement made
under this Plan, to establish, amend, waive and rescind any rules and
regulations relating to the administration of this Plan, to determine the terms
and provisions of any agreements entered into hereunder (not inconsistent with
this Plan), and to make all other determinations necessary or advisable for the
administration of this Plan.  The Committee may correct any defect,
supply any omission or reconcile any inconsistency in this Plan or in any Award
or agreement in the manner and to the extent it shall deem
desirable.  The determinations of the Committee in the administration
of this Plan, as described herein, shall be final, binding and
conclusive.

    

    
      
         

      

      
        - 4
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      (c)        
Indemnification.  To
the full extent permitted by law, each member and former member of the Committee
and each person to whom the Committee delegates or has delegated authority under
this Plan shall be entitled to indemnification by the Company against and from
any loss, liability, judgment, damages, cost and reasonable expense incurred by
such member, former member or other person by reason of any action taken,
failure to act or determination made in good faith under or with respect to this
Plan.

    

     

    
      (d)        
Tax
Withholding.  The Committee shall have the right to require
payment by a Participant of any amount it may determine to be necessary to
withhold for federal, state, local, non-U.S. income, payroll or other taxes as a
result of the exercise, grant or vesting of an A ward.  With the
consent of the Committee, the Participant may pay a portion or all of such
withholding taxes by delivering shares of Common Stock to the Company or having
the Company withhold shares of Common Stock with a Fair Market Value or cash
equal to the amount of such taxes that would have otherwise been payable by the
Participant.

    

     

    
      (e)        
Dividends or
Dividend Equivalents.  If the Committee so determines, any
Award granted under the Plan may be credited with dividends or dividend
equivalents paid with respect to any underlying shares of Common
Stock.  The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate and may determine the
form of payment, including cash, shares of Common Stock, Restricted Stock or
otherwise.

    

     

    
      	
              5.

            	
              Term
      of Plan

            

    

     

    This Plan shall commence on October 8,
2004 (the “Effective Date”) and shall terminate on October 7, 2014 or at such
earlier date as the Board of Directors shall determine.  The
termination of this Plan shall not affect any Awards then outstanding under the
Plan.  No Award may be granted under the Plan after October 7,
2014.

     

    
      	
              6.

            	
              Terms
      and Conditions of Qualified Options

            

    

     

    Options granted under the Plan may be
Qualified Options.  When the Committee approves a grant of a Qualified
Option to a Participant, it shall prepare or cause to be prepared an option
agreement (“Qualified Option Agreement”) setting forth the terms of the
Qualified Option, and such Qualified Option Agreement shall be signed on behalf
of the Company and by the Participant.  Qualified Options granted
under this Plan shall be subject to the foregoing and to the following terms and
conditions and to such other terms and conditions, not inconsistent therewith,
as the Committee shall determine:

     

    (a)        
Number of
Shares and Exercise Price.  The Qualified Option Agreement
shall state the total number of shares of Common Stock subject to the Qualified
Option it evidences, the Exercise Price per share of Common Stock and the other
terms of the Qualified Option.  The number of shares of Common Stock
subject to the Qualified Option and the Exercise Price shall be adjustable as
provided in Section 12(a) of this Plan.

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    (b)        
Exercisability;
Term.  Qualified Options granted under the Plan shall be
exercisable at such time(s) and upon such terms and conditions as may be
determined by the Committee.  However, subject to Section 6(1), a
Qualified Option shall not be exercisable more than ten (10) years after the
date it is granted.  The period during which a Qualified Option may be
exercised once it is granted may not be reduced, except as provided in Sections
6( e), (f) and (g) of this Plan.

     

    (c)        
Exercise of
Qualified Options.  Except as otherwise provided in the
applicable Qualified Option Agreement, a Qualified Option may be exercised for
all, or from time to time any part, of the shares of Common Stock for which it
is then exercisable.  For purposes of this Section 6, the exercise
date of a Qualified Option shall be the date a written notice of exercise and
full payment of the purchase price are received by the Company in accordance
with this Section 6( c) and Section 6( d) below.  The purchase price
for the shares of Common Stock as to which a Qualified Option is exercised shall
be paid to the Company in cash or its equivalent, such as by check or wire
transfer, or, if provided in the Qualified Option Agreement or with the consent
of the Committee:   (i) in shares of Common Stock having a Fair
Market Value equal to the aggregate Exercise Price of the shares of Common Stock
being purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that such shares were then purchased on the open market or
have been held by the Participant for at least six months (or such other period
as established from time to time by the Committee in order to avoid adverse
accounting treatment under generally accepted accounting principles); (ii)
partly in cash and partly in such shares; or (iii) if there is a public market
for the shares of Common Stock at such time, through the delivery of irrevocable
instructions to a broker to sell shares of Common Stock obtained upon the
exercise of the Qualified Option and to deliver promptly to the Company an
amount out of the proceeds of such sale equal to the aggregate Exercise Price
for the shares being purchased.

     

    (d)        
Manner of
Exercise of Qualified Options.  A Qualified Option shall be
exercised only by the Participant (i) delivering a completed and signed written
notice of exercise to the Company in the form prescribed by the Company
specifying the number of shares of Common Stock as to which the Qualified Option
is being exercised; (ii) delivering the original Qualified Option Agreement to
the Company; and (iii) paying to the Company the full amount of the Exercise
Price for the number of shares of Common Stock with respect to which the
Qualified Option is being exercised as provided in Section 6(c)
above.  When shares of Common Stock are issued to the Participant upon
the exercise of that Participant’s Qualified Option, the fact of such issuance
shall be noted on the Qualified Option Agreement by the Company before the
Qualified Option Agreement is returned to the Participant.  When all
shares of Common Stock covered by the Qualified Option Agreement have been
issued by the Company to the Participant or when the Qualified Option expires,
the Participant shall deliver the Qualified Option Agreement to the Company,
which shall cancel it.  After the receipt by the Company of the
written notice of exercise and payment in full of the Exercise Price in
accordance with Sections 6(c) and 6(d), the Company shall deliver to the
Participant exercising the Qualified Option stock certificates evidencing the
number of shares with respect to which the Qualified Option has been exercised,
issued in the Participant’s name; provided, however, that such delivery shall be
deemed effective for all purposes when the Company or its stock transfer agent
(if any) has deposited such stock certificates in the United States mail,
postage prepaid, addressed to the Participant at the address specified in the
written notice of exercise.

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    (e)        
Termination
of Employment or Service.  If a Participant who holds a
Qualified Option shall cease to be employed by or performing services for the
Company or any Affiliate for any reason other than death, unless the applicable
Qualified Option Agreement provides otherwise, such Qualified Option shall
immediately and automatically terminate and be forfeited, whether or not
exercisable, and neither such Participant nor any of the Participant’s heirs,
personal representatives, successors or assigns shall have any rights with
respect to such Qualified Option.  Notwithstanding the foregoing, if
an independent contractor or other non-employment relationship between the
Participant and the Company or an Affiliate is terminated due to the
commencement of an employment relationship with the Company or an Affiliate,
this provision shall apply only upon termination of both the independent
contractor and employment relationship between the Participant and the Company
or an Affiliate.  In the case of a Participant who is a natural person
and who ceases to be employed by or performing services for the Company or an
Affiliate due to his or her disability (with disability being determined in the
sole discretion of the Committee), the Committee, at its discretion, may permit
exercise of the portion of the Qualified Option that is exercisable upon such
termination of employment until the earlier of the originally stated date of
termination of the Qualified Option or up to one (1) year after such termination
of employment or other service.

     

    (f)        
Death of
Participant.  Unless otherwise provided in the applicable
Qualified Option Agreement, if a Participant who is a natural person shall cease
to be employed by or performing services for the Company or any Affiliate as a
result of the Participant’s death, any Qualified Option held by such Participant
may be exercised to the same extent that the Participant would have been
entitled to exercise it at the date of death and may be exercised within a
period of one (1) year after the date of death, but in no case later than the
expiration date of such Qualified Option.  Such Qualified Option shall
be exercised pursuant to Sections 6(c) and (d) of this Plan by the person or
persons to whom the Participant’s rights under the Qualified Option shall pass
by will or the laws of descent and distribution.

     

    (g)        
Termination
of Qualified Options Not Exercisable.  Unless the applicable
Qualified Option Agreement provides otherwise, upon termination of a
Participant’s employment or other services with the Company or an Affiliate for
any reason, including by reason of death or disability of the Participant, any
portion of the Participant’s Qualified Option that is not exercisable shall
automatically and immediately terminate as to such Participant, and the shares
of Common Stock subject to such portion of the Qualified Option shall be
available for the grant of Awards under the Plan.

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    (h)        
No
Obligation to Exercise Qualified Option.  The grant of a
Qualified Option under the Plan shall impose no obligation on the Participant to
exercise such Qualified Option.

     

    (i)        
Eligible
Recipients.  Qualified Options may be granted only to persons
who are employees of the Company or an Affiliate.

     

    (j)           Exercise
Price.  Subject to the provisions of Section 6(1), the exercise
price of shares of Common Stock that are subject to a Qualified Option shall not
be less than 100% of the Fair Market Value of such shares at the time the
Qualified Option is granted, as determined in good faith by the
Committee.

     

    (k)        
Limit on
Exercisability.  The aggregate Fair Market Value (determined at
the time the Qualified Option is granted) of the shares of Common Stock with
respect to which Qualified Options are exercisable by the Participant for the
first time during any calendar year, under this Plan or any other plan of the
Company or any Affiliate, shall not exceed $100,000.  To the extent a
Qualified Option exceeds this $100,000 limit, the portion of the Qualified
Option in excess of such limit shall be deemed a Non-Qualified
Option.

     

    (1)        
Restrictions for
Certain Shareholders.  The purchase price of shares of Common
Stock that are subject to a Qualified Option granted to an employee of the
Company or any Affiliate who, at the time such Qualified Option is granted, owns
10% or more of the total combined voting power of all classes of stock of the
Company or of any Affiliate, shall not be less than 110% of the Fair Market
Value of such shares on the date such Qualified Option is granted, and such
Qualified Option may not be exercisable more than five (5) years after the date
on which it is granted.  For the purposes of this subparagraph, the
rules of Section 424(d) of the Code shall apply in determining the stock
ownership of any employee of the Company or any Affiliate.

     

    (m)        
Limits on
Transferability and Exercise of Qualified Options.  Qualified
Options shall not be transferable except by will or the laws of descent and
distribution, and Qualified Options shall be exercisable during a Participant’s
lifetime only by such Participant.

     

    (n)        
Effect of
Not Meeting Requirements.  Subject to the discretion of the
Committee to provide otherwise, if the terms of a Qualified Option do not meet
any requirements of this Plan or the Code necessary to be treated as a Qualified
Option under the Code, such Qualified Option shall not terminate but shall be a
Non-Qualified Option granted under this Plan.

     

    
      	
              7.

            	
              Terms
      and Conditions of Non-Qualified
Options

            

    

     

    Options granted under the Plan may be
Non-Qualified Options.  When the Committee approves a grant of a
Non-Qualified Option to a Participant, it shall prepare or cause to be prepared
an option agreement (“Non-Qualified Option Agreement”) setting forth the terms
of the Non-Qualified Option, and such Non-Qualified Option Agreement shall be
signed on behalf of the Company and by the Participant.  Non-Qualified
Options granted under this Plan shall be subject to the foregoing and to the
following terms and conditions and to such other terms and conditions, not
inconsistent therewith, as the Committee shall determine; provided, however,
that Non-Qualified Options that are Director Options shall be governed by the
provisions of Section 8 to the extent that they are inconsistent with the
provisions of this Section 7.

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    (a)           Number of Shares
and Exercise Price.  The Non-Qualified Option Agreement shall
state the total number of shares of Common Stock subject to the Non-Qualified
Option it evidences, the Exercise Price per share of Common Stock and the other
terms of the Non-Qualified Option.  The Exercise Price of shares of
Common Stock that are subject to a Non-Qualified Option shall not be less than
100% of the Fair Market Value of such shares at the time the Non-Qualified
Option is granted, as determined in good faith by the Committee.  The
number of shares of Common Stock subject to the Non-Qualified Option and the
Exercise Price shall be adjustable as provided in Section l3(a) of this
Plan.

     

    (b)          Exercisability;
Term.  Non-Qualified Options granted under the Plan shall be
exercisable at such time(s) and upon such terms and conditions as may be
determined by the Committee, but in no event shall a Non-Qualified Option be
exercisable more than ten (10) years after the date it is granted, except as the
Committee may determine under Section B(d) of the Plan.  The period
during which a Non-Qualified Option may be exercised once it is granted may not
be reduced, except as provided in Sections 7(e), (f) and (g) of this
Plan.

     

    (c)           Exercise of Non
-Qualified Options.  Except as otherwise provided in the
applicable Non-Qualified Option Agreement, a Non-Qualified Option may be
exercised for all, or from time to time any part, of the shares of Common Stock
for which it is then exercisable.  For purposes of this Section 7, the
exercise date of a Non-Qualified Option shall be the date a written notice of
exercise and full payment of the purchase price are received by the Company in
accordance with this Section 7(c) and Section 7(d) below.  The
purchase price for the shares of Common Stock as to which a Non-Qualified Option
is exercised shall be paid to the Company in cash or its equivalent, such as by
check or wire transfer or, if provided in the Non-Qualified Option Agreement or
with the consent of the Committee:   (i) in shares of Common
Stock having a Fair Market Value equal to the aggregate Exercise Price of the
shares of Common Stock being purchased and satisfying such other requirements as
may be imposed by the Committee; provided, that such shares were then purchased
on the open market or have been held by the Participant for at least six months
(or such other period as established from time to time by the Committee in order
to avoid adverse accounting treatment under generally accepted accounting
principles); (ii) partly in cash and partly in such shares; or (iii) if there is
a public market for the shares of Common Stock at such time, through the
delivery of irrevocable instructions to a broker to sell shares of Common Stock
obtained upon the exercise of the Non-Qualified Option and to deliver promptly
to the Company an amount out of the proceeds of such sale equal to the aggregate
Exercise Price for the shares being purchased.

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    (d)          Manner of
Exercise of Non-Qualified Options.  A Non-Qualified Option
shall be exercised only by the Participant (i) delivering a completed and signed
written notice of exercise to the Company in the form prescribed by the Company
specifying the number of shares of Common Stock as to which the Non-Qualified
Option is being exercised; (ii) delivering the original Non-Qualified Option
Agreement to the Company; and (iii) paying to the Company the full amount of the
Exercise Price for the number of shares of Common Stock with respect to which
the Non-Qualified Option is being exercised as provided in Section 7(c)
above.  When shares of Common Stock are issued to the Participant upon
the exercise of that Participant’s Non-Qualified Option, the fact of such
issuance shall be noted on the Non-Qualified Option Agreement by the Company
before the Non-Qualified Option Agreement is returned to the
Participant.  When all shares of Common Stock covered by the
Non-Qualified Option Agreement have been issued by the Company to the
Participant or when the Non-Qualified Option expires, the Participant shall
deliver the Non-Qualified Option Agreement to the Company, which shall cancel
it.  After the receipt by the Company of the written notice of
exercise and payment in full of the Exercise Price in accordance with Sections
7(c) and 7(d), the Company shall deliver to the Participant exercising the
Non-Qualified Option stock certificates evidencing the number of shares with
respect to which the Non-Qualified Option has been exercised, issued in the
Participant’s name; provided, however, that such delivery shall be deemed
effective for all purposes when the Company or its stock transfer agent (if any)
has deposited such stock certificates in the United States mail, postage
prepaid, addressed to the Participant at the address specified in the written
notice of exercise.

     

    (e)          Termination of
Employment or Service.  If a Participant who holds a
Non-Qualified Option shall cease to be employed by or performing services for
the Company or any Affiliate for any reason other than death, unless the
applicable Non-Qualified Option Agreement provides otherwise, such Non-Qualified
Option shall immediately and automatically terminate and be forfeited, whether
or not exercisable, and neither such Participant nor any of the Participant’s
heirs, personal representatives, successors or assigns shall have any rights
with respect to such Non-Qualified Option.  Notwithstanding the
foregoing, if an independent contractor or other non-employment relationship
between the Participant and the Company or an Affiliate is terminated due to the
commencement of an employment relationship with the Company or an Affiliate,
this provision shall apply only upon termination of both the independent
contractor and employment relationship between the Participant and the Company
or an Affiliate.  In the case of a Participant who is a natural person
and who ceases to be employed by or performing services for the Company or an
Affiliate due to his or her disability (with disability being determined in the
sole discretion of the Committee), the Committee, at its discretion, may permit
exercise of the portion of the Non-Qualified Option that is exercisable upon
such termination of employment until the earlier of the originally stated date
of termination of the Non-Qualified Option or up to one year after such
termination of employment or other service.

     

    (f)           Death of
Participant.  Unless otherwise provided in the applicable
Non-Qualified Option Agreement, if a Participant who is a natural person shall
cease to be employed by or performing services for the Company or any Affiliate
as a result of the Participant’s death, any Non-Qualified Option held by such
Participant may be exercised to the same extent that the Participant would have
been entitled to exercise it at the date of death and may be exercised within a
period of one (1) year after the date of death, but in no case later than the
expiration date of such Non-Qualified Option.  Such Non-Qualified
Option shall be exercised pursuant to Sections 7(c) and (d) of this Plan by the
person or persons to whom the Participant’s rights under the Non-Qualified
Option shall pass by will or the laws of descent and
distribution.

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    (g)           Termination of
Non-Qualified Options Not Exercisable.  Unless the applicable
Non-Qualified Option Agreement provides otherwise, upon termination of a
Participant’s employment or other services with the Company or an Affiliate for
any reason, including by reason of death or disability of the Participant, any
portion of the Participant’s Non-Qualified Option that is not exercisable shall
automatically and immediately terminate as to such Participant, and the shares
of Common Stock subject to such portion of the Non-Qualified Option shall be
available for the grant of Awards under the Plan.

     

    (h)           No Obligation to
Exercise Non-Qualified Option.  The grant of a Non-Qualified
Option under the Plan shall impose no obligation on the Participant to exercise
such Non-Qualified Option.

     

    
      	
              8.

            	
              Automatic
      Grants of Director Options to Non-employee
  Directors

            

    

     

    (a)           Automatic Grants
of Director Options.  Under the Plan, each Non-employee
Director shall automatically be granted Director Options to purchase shares of
Common Stock as follows:

     

    (i)           Initial Grants of Director
Options.  Each Non-employee Director will be granted an initial
Option (the “Initial Grant”) as follows:

     

    A.           Non-Employee
Directors.  Each person serving as a Non-employee Director on
the Effective Date shall automatically be granted a Director Option on such date
to purchase five thousand (5,000) shares of Common Stock.

     

    B.           Future Non-Employee
Directors.  Each person who is first elected or appointed to
serve as a Non-employee Director after the Effective Date shall automatically be
granted a Director Option on the date of his or her initial election or
appointment to the Company’s Board of Directors to purchase 5,000 shares of
Common Stock.

     

    C.           Vesting.  All
Director Options granted under Sections 8(a)(i)(A) and (B) shall vest and become
exercisable in cumulative installments with respect to one-third (1/3) of the
shares subject to such Director Options on the first, second and third
anniversary dates of the dates of grant of such Director Options, but only if
the holder of the Director Options is then a Director of the
Company.

    
      
         

      

      
        - 11
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    (ii)           Additional Grants of
Director Options.  On the first business day following the
annual meeting on which the national securities exchanges are open, such
Non-employee Director will automatically be granted an additional Option to
purchase five thousand (5,000) shares of Common Stock, but only if such person
is a Non-employee Director on such date and did not receive an Initial Grant
pursuant to Section 8(a)(i) at such annual meeting.  If no annual
meeting is held in a given year, such Option shall be automatically granted on
August 1 of that year (or, if the national securities exchanges are not open on
August 1, on the first business day following August 1 on which the national
securities exchanges are open).  Such grant will satisfy the
obligation to make an automatic grant under this Section 8(a)(ii) for the year,
even if an annual meeting is subsequently held between August 1 and the end of
the calendar year.  All Director Options granted under this Section
8(a)(ii) shall vest and become exercisable as to the shares subject to the
Director Option ratably over eleven months from the date of grant of the
Director Option, but only if the holder of the Director Option is then a
Non-employee Director of the Company.

     

    (iii)           Termination of Director
Options.  Subject to Sections 8(t), 8(g) and 8(h), all Director
Options granted under this Section 8(a) shall expire ten (10) years after the
date of grant.

     

    (iv)           Exercise
Price.  The exercise price of Director Options granted under
this Section 8(a) shall be equal to 100% of the Fair Market Value of one share
of Common Stock on the date of grant of the Director Option.

     

    (b)           Discretionary
Grants.  In addition to the Director Options granted pursuant
to Section 8(a), a Director may be granted one or more Options or other Awards
under other provisions of the Plan, and such Options or other Awards will be
subject to such terms and conditions, consistent with the other provisions of
the Plan, as may be determined by the Committee in its sole
discretion.

     

    (c)           Director Option
Agreements.  When a Director Option is automatically granted
under Section 8(a), or when the Committee approves a grant of a Director Option,
the Committee shall prepare or cause to be prepared an option agreement
(“Director Option Agreement”) setting forth the terms of the Director Option,
and such Director Option Agreement shall be signed on behalf of the Company and
by the Participant.

     

    (d)           Exercise of
Director Options.  Except as otherwise provided in the
applicable Director Option Agreement, a Director Option may be exercised for
all, or from time to time any part, of the shares of Common Stock for which it
is then exercisable.  For purposes of this Section 8, the exercise
date of a Director Option shall be the date a written notice of exercise and
full payment of the purchase price are received by the Company in accordance
with this Section 8(d) and Section 8(e) below.  The purchase price for
the shares of Common Stock as to which a Director Option is exercised shall be
paid to the Company in cash or its equivalent, such as by check or wire transfer
or, if provided in the Director Option Agreement or with the consent of the
Committee:   (i) in shares of Common Stock having a Fair Market
Value equal to the aggregate Exercise Price of the shares of Common Stock being
purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that such shares were then purchased on the open market or
have been held by the Participant for at least six months (or such other period
as established from time to time by the Committee in order to avoid adverse
accounting treatment under generally accepted accounting principles); (ii)
partly in cash and partly in such shares; or (iii) if there is a public market
for the shares of Common Stock at such time, through the delivery of irrevocable
instructions to a broker to sell shares of Common Stock obtained upon the
exercise of the Director Option and to deliver promptly to the Company an amount
out of the proceeds of such sale equal to the aggregate Exercise Price for the
shares being purchased.

    
      
         

      

      
        - 12
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    (e)         Manner of
Exercise of Director Options. A Director Option shall be exercised only
by the Participant (i) delivering a completed and signed written notice of
exercise to the Company in the form prescribed by the Company specifying the
number of shares of Common Stock as to which the Director Option is being
exercised; (ii) delivering the original Director Option Agreement to the
Company; and (iii) paying to the Company the full amount of the Exercise Price
for the number of shares of Common Stock with respect to which the Director
Option is being exercised as provided in Section 8( d) above. When shares of
Common Stock are issued to the Participant upon the exercise of that
Participant’s Director Option, the fact of such issuance shall be noted on the
Director Option Agreement by the Company before the Director Option Agreement is
returned to the Participant. When all shares of Common Stock covered by the
Director Option Agreement have been issued by the Company to the Participant or
when the Director Option expires, the Participant shall deliver the Director
Option Agreement to the Company, which shall cancel it. After the receipt by the
Company of the written notice of exercise and payment in full of the Exercise
Price in accordance with Sections 8( d) and 8( e), the Company shall deliver or
cause to be delivered to the Participant exercising the Director Option stock
certificates evidencing the number of shares with respect to which the Director
Option has been exercised, issued in the Participant’s name; provided, however,
that such delivery shall be deemed effective for all purposes when the Company
or its stock transfer agent (if any) has deposited such stock certificates in
the United States mail, postage prepaid, addressed to the Participant at the
address specified in the written notice of exercise.

     

    (f)          Termination of
Status as a Director. Subject to the provisions of Sections 8(g) and
8(h), if a Director ceases to serve as a Director, he or she may, but only
within ninety (90) days after the date he or she ceases to be a Director of the
Company, exercise his or her Director Option to the extent that he or she was
entitled to exercise it at the date of such termination. Any portion of a
Director Option that is not exercisable on the date a Director ceases to be a
Director of the Company, and any portion of a Director Option which the Director
was entitled to exercise that is not exercised within the time specified herein,
shall immediately and automatically terminate and be forfeited, and neither such
Director nor any of the Director’s heirs, personal representatives, successors
or assigns shall have any rights with respect to such Director
Option.

     

    (g)        
Disability
of Director.  Notwithstanding the provisions of Section 8(t) above,
if a Director is unable to continue his or her service as a Director with the
Company as a result of his or her total and permanent disability (as defined in
Section 22(e)(3) of the Code), he or she may, but only within ninety (90) days
from the date of termination of such service, exercise his or her Director
Option to the extent he or she was entitled to exercise it at the date of such
termination.  Any portion of a Director Option that is not exercisable on
the date a Director ceases to be a Director of the Company, and any portion of a
Director Option which the Director was entitled to exercise that is not
exercised within the time specified herein, shall immediately and automatically
terminate and be forfeited, and neither such Director nor any of the Director’s
heirs, personal representatives, successors or assigns shall have any rights
with respect to such Director Option.

    
      
         

      

      
        - 13
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    (h)         Death of
Director.  Upon the death of a Director holding a Director
Option:

     

    (i)           during
the term of the Director Option when such Director was, at the time of his or
her death, a Director of the Company and who shall have been a Director since
the date of grant of the Director Option, the Director Option may be exercised,
at any time within one year following the date of death, by the person who
acquired the right to exercise such Director Option by bequest or inheritance,
but only to the extent of the right to exercise that existed at the date of
death;

     

    (ii)          within
ninety (90) days after the termination of the Director’s status as a Director,
the Director Option may be exercised, at any time within ninety (90) days
following the date of death, by such Director’s estate or by a person who
acquired the right to exercise the Director Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
death; and

     

    (iii)         any
portion of a Director Option that is not exercisable on the date of a Director’s
death, and any portion of a Director Option which the Director was entitled to
exercise that is not exercised within the time specified in Section 8(h)(i) or
Section 8(h)(ii), shall immediately and automatically terminate and be
forfeited, and neither such Director nor any of the Director’s heirs, personal
representatives, successors or assigns shall have any rights with respect to
such Director Option.

     

    
      	
              9.

            	
              Terms
      and Conditions of Stock Appreciation
Rights

            

    

     

    (a)          Grants. 
The Committee may grant a Stock Appreciation Right independent of an
Option or in connection with an Option or a portion thereof.  Any grant of
a Stock Appreciation Right under the Plan shall be evidenced by an Award
agreement in such form as the Committee shall from time to time approve and
which shall set forth the terms and conditions of the Stock Appreciation
Right.  The Committee may impose such terms and conditions upon any Stock
Appreciation Right as it deems fit.  A Stock Appreciation Right granted in
connection with an Option or a portion thereof (i) may be granted at the time
the related Option is granted or at any time before the exercise or cancellation
of the related Option, (ii) shall cover the same number of shares of Common
Stock covered by the Option (or such fewer number of shares of Common Stock as
the Committee may determine), and (iii) shall be subject to the same terms and
conditions as such Option except for such additional limitations as are
contemplated by this Section 9 (or such additional limitations as may be
included in the Award agreement evidencing such Stock Appreciation
Right).

    
      
         

      

      
        - 14
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    (b)          Terms. 
The exercise price per share of Common Stock of a Stock Appreciation
Right shall be an amount determined by the Committee but in no event shall such
amount be less than the Fair Market Value of a share of Common Stock on the date
the Stock Appreciation Right is granted.  In addition, in the case of a
Stock Appreciation Right granted in conjunction with an Option or a portion
thereof, the exercise price shall not be less than the Exercise Price of the
related Option.  Each Stock Appreciation Right granted independent of an
Option shall entitle a Participant upon exercise to an amount equal to (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Common
Stock over (B) the exercise price per share, times (ii) the number of shares of
Common Stock covered by the Stock Appreciation Right.  Each Stock
Appreciation Right granted in conjunction with an Option or a portion thereof
shall entitle a Participant to surrender to the Company the unexercised Option
or any portion thereof and to receive from the Company in exchange therefor an
amount equal to (1) the excess of (x) the Fair Market Value on the exercise date
of one share of Common Stock over (y) the Exercise Price per share of Common
Stock, times (II) the number of shares of Common Stock covered by the Option, or
portion thereof, which is surrendered.  Payment shall be made in shares of
Common Stock or in cash, or partly in shares and partly in cash (any such shares
of Common Stock valued at such Fair Market Value), all as set forth in the Award
agreement evidencing such Stock Appreciation Right or as otherwise determined in
the discretion of the Committee.  Stock Appreciation Rights may be
exercised from time to time upon actual receipt by the Company of written notice
of exercise stating the number of shares of Common Stock with respect to which
the Stock Appreciation Right is being exercised.  The date a notice of
exercise is received by the Company shall be the exercise date.

     

    (c)          Termination of
Employment or Service.  If a Participant who holds a Stock
Appreciation Right shall cease to be employed by or performing services for the
Company or any Affiliate for any reason other than death, unless the applicable
Award agreement provides otherwise, such Stock Appreciation Right shall
immediately and automatically terminate and be forfeited, whether or not
exercisable, and neither such Participant nor any of the Participant’s heirs,
personal representatives, successors or assigns shall have any rights with
respect to such Stock Appreciation Right.  Notwithstanding the foregoing,
if an independent contractor or other non-employment relationship between the
Participant and the Company or an Affiliate is terminated due to the
commencement of an employment relationship with the Company or an Affiliate,
this provision shall apply only upon termination of both the independent
contractor and employment relationship between the Participant and the Company
or an Affiliate.  In the case of a Participant who is a natural person and
who ceases to be employed by or performing services for the Company or an
Affiliate due to his or her disability (with disability being determined in the
sole discretion of the Committee), the Committee, at its discretion, may permit
exercise of the portion of the Stock Appreciation Right that is exercisable upon
such termination of employment until the earlier of the originally stated date
of termination of the Stock Appreciation Right or up to one year after such
termination of employment or other service.

     

    (d)          Death of
Participant.  Unless otherwise provided in the applicable Award
agreement, if a Participant who is a natural person shall cease to be employed
by or performing services for the Company or any Affiliate as a result of the
Participant’s death, any Stock Appreciation Right held by such Participant may
be exercised to the same extent that the Participant would have been entitled to
exercise it at the date of death and may be exercised within a period of one (1)
year after the date of death, but in no case later than the expiration date of
such Stock Appreciation Right.  Such Stock Appreciation Right shall be
exercised pursuant to Section 9(b) of this Plan by the person or persons to whom
the Participant’s rights under the Stock Appreciation Right shall pass by will
or the laws of descent and distribution.

    
      
         

      

      
        - 15
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    (e)          Termination of
Stock Appreciation Rights Not Exercisable.  Unless the applicable
Award agreement provides otherwise, upon termination of a Participant’s
employment or other services with the Company or an Affiliate for any reason,
including by reason of death or disability of the Participant, any portion of
the Participant’s Stock Appreciation Rights that is not exercisable shall
automatically and immediately terminate as to such Participant.

     

    
      	
              10.

            	
              Awards
      of Restricted Stock

            

    

     

    (a)          Grant. 
Awards of Restricted Stock subject to forfeiture and transfer
restrictions may be granted by the Committee under the Plan.  Any Awards of
Restricted Stock shall be evidenced by an Award agreement in such form as the
Committee shall from time to time approve and which shall set forth the terms
and conditions of the Award of Restricted Stock.  Subject to the provisions
of the Plan, the Committee shall determine the number of shares of Restricted
Stock to be granted to each Participant; the duration of any period during
which, and the conditions, if any, under which, the Restricted Stock may be
forfeited to the Company; and the other terms and conditions of such
Awards.  The Committee may determine a period of time during which the
Participant receiving the Award of Restricted Stock must remain in the
continuous employment of the Company in order for the forfeiture and transfer
restrictions to lapse.  If the Committee so determines, the restrictions
may lapse during any such restricted period in installments with respect to
specified portions of the shares of Restricted Stock covered by the Award of
Restricted Stock.  The Committee may also impose performance or other
conditions that will subject the shares subject to the Award of Restricted Stock
to forfeiture and transfer restrictions.  Notwithstanding anything in this
Plan to the contrary, with respect to Awards of Restricted Stock that are
Tenure-Based Full-Value Awards, the restrictions imposed on such Awards of
Restricted Stock shall not lapse, and the Awards of Restricted Stock shall not
vest, with respect to 100% of the Awards of Restricted Stock in less than three
(3) years; provided, however, that during such three (3)-year period, the
restrictions may lapse and the Awards may vest with respect to less than 100% of
the value of the Award.  The Committee may, at any time, in its discretion,
waive all or any part of any restrictions applicable to any or all outstanding
Awards of Restricted Stock; provided, however, that the Committee shall not and
shall not have the power to waive the restrictions set forth in the immediately
foregoing sentence except in the case of the death or disability of the
Participant holding the Award of Restricted Stock (with disability being
determined in the sole discretion of the Committee) or upon a Change in
Control.

    
      
         

      

      
        - 16
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    (b)          Transfer
Restrictions.  Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as provided in the Plan or
the applicable Award agreement.  At the time of the grant of an Award of
Restricted Stock, a stock certificate representing the number of shares of
Restricted Stock awarded thereunder shall be registered in the name of the
Participant and held by the Company.  Such stock certificate may bear a
legend describing the conditions of the Restricted Stock Award.  Unless the
Award agreement evidencing an Award of Restricted Stock or the Committee
provides otherwise, the Participant receiving the Award of Restricted Stock
shall have all rights of a shareholder with respect to the shares of Restricted
Stock subject to such Award, including the right to receive any dividends and
the right to vote such shares, subject to the following
restrictions:   (i) the Participant receiving the Award of
Restricted Stock shall not be entitled to delivery of the stock certificate
until the expiration of the restricted period and the fulfillment of any other
restrictive conditions set forth in the applicable Award agreement; (ii) none of
the shares of Common Stock subject to the Award of Restricted Stock may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of during such restricted period or until after the fulfillment of any such
other restrictive condition; and (iii) all of the shares of Restricted Stock
shall be forfeited and all rights of the Participant to such shares shall
terminate, without any further obligation on the part of the Company, unless the
Participant remains in the continuous employment of the Company for the entire
restricted period.  Any shares of Common Stock, any other securities of the
Company and any other property (except for cash dividends) distributed with
respect to the shares subject to an Award of Restricted Stock shall be subject
to the same restrictions, terms and conditions as such shares.  After the
lapse or termination of the restrictions of an Award of Restricted Stock, or at
such earlier time as otherwise determined by the Committee, a stock certificate
evidencing the shares of Common Stock subject to the Award of Restricted Stock
that bears no legend describing the conditions of an Award of Restricted Stock
shall be delivered to the Participant or his or her beneficiary or estate, as
the case may be.

     

    (c)          Dividends. 
Dividends or dividend equivalents paid on any shares of Restricted Stock
may be paid directly to the Participant, withheld by the Company subject to
vesting of the Restricted Stock pursuant to the terms of the applicable A ward
agreement, or may be reinvested in additional Awards of Restricted Stock, as
determined by the Committee in its discretion.

     

    (d)          Termination of
Employment or Service.  If a Participant who holds a Restricted
Stock Award shall cease to be employed by or performing services for the Company
or any Affiliate for any reason other than death prior to the vesting of shares
of Restricted Stock granted to such Participant, unless the applicable Award
agreement provides otherwise, such Restricted Stock Award shall immediately and
automatically terminate and be forfeited and neither such Participant nor any of
the Participant’s heirs, personal representatives, successors or assigns shall
have any rights with respect to such unvested Restricted Stock Award. 
Notwithstanding the foregoing, if an independent contractor or other
non-employment relationship between the Participant and the Company or an
Affiliate is terminated due to the commencement of an employment relationship
with the Company or an Affiliate, this provision shall apply only upon
termination of both the independent contractor and employment relationship
between the Participant and the Company or an Affiliate.  In the case of a
Participant who is a natural person and who ceases to be employed by or
performing services for the Company or an Affiliate due to his or her disability
(with disability being determined in the sole discretion of the Committee), the
Committee, at its discretion, may permit a portion or all of the shares subject
to the Restricted Stock Award held by such Participant to vest on the date of
such termination.

    
      
         

      

      
        - 17
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    (e)          Death of
Participant.  Unless otherwise provided in the applicable Award
agreement, if a Participant who is a natural person shall cease to be employed
by or performing services for the Company or any Affiliate as a result of the
Participant’s death prior to the vesting of shares subject to the Restricted
Stock Award granted to such Participant, the Committee, at its discretion, may
permit a portion or all of the shares of Restricted Stock to vest as of the date
of death or to continue the Restricted Stock Award under such terms and
conditions as the Committee may determine.  The person entitled to any such
shares of Restricted Stock shall be the person or persons to whom the
Participant’s rights under the Restricted Stock Award shall pass by will or the
laws of descent and distribution.

     

    (f)           Termination of
Restricted Stock Awards Not Vested.  Unless the applicable Award
agreement provides otherwise, upon termination of a Participant’s employment or
other services with the Company or an Affiliate for any reason, including by
reason of death or disability of the Participant, any portion of the
Participant’s Restricted Stock Award that has not vested shall automatically and
immediately terminate as to such Participant, and the shares subject to such
portion of the Restricted Stock Award shall be available for the grant of Awards
under the Plan.

     

    (g)         
Other
Provisions.  Each Award agreement relating to an Award of Restricted
Stock authorized under this Section 10 may contain such other provisions as the
Committee shall deem advisable including, but not limited to, a requirement that
shares of Common Stock acquired under an Award of Restricted Stock be subject to
a restriction on the Participant’s ability to transfer the shares to third
parties without the consent of the Company.

     

    
      	
              11.

            	
              Other
      Awards

            

    

     

    (a)          Other Stock-Based
Awards.  The Committee, in its sole discretion, may grant Awards of
shares of Common Stock and Awards that are valued in whole or in part by
reference to, or are otherwise based on, shares of Common Stock or on the Fair
Market Value thereof (“Other Stock-Based Awards”).  Such Other Stock-Based
Awards shall be in such form, and dependent on such conditions, as the Committee
shall determine including, without limitation, the right to receive, or vest
with respect to, one or more shares of Common Stock (or the equivalent cash
value of such shares) upon the completion of a specified period of service, the
occurrence of an event and/or the attainment of performance objectives. 
Other Stock-Based Awards may be granted alone or in addition to any other Awards
granted under the Plan.  Subject to the provisions of the Plan, the
Committee shall determine the number of shares of Common Stock to be awarded to
a Participant under (or otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be settled in cash, shares of Common
Stock or a combination of cash and such shares; and all other terms and
conditions of such Awards (including, without limitation, the vesting provisions
thereof and provisions ensuring that all shares so awarded and issued shall be
fully paid and non-assessable).  Any Other Stock-Based Awards shall be
evidenced by an Award agreement in such form as the Committee shall from time to
time approve and which shall set forth the terms and conditions of the Other
Stock-Based Award.  Unless the applicable A ward agreement provides
otherwise, if a Participant who holds an Other Stock-Based Award shall cease to
be employed by or performing services for the Company or an Affiliate for any
reason, such Other Stock-Based Award shall be treated by the Committee as though
it is either a Non-Qualified Option or a Restricted Stock Award, as the
Committee shall determine in its discretion.

    
      
         

      

      
        - 18
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    (b)          Other Cash-Based
Awards.  In addition to the Awards described above, and subject to
the terms of the Plan, the Committee may grant such other incentives denominated
in cash and payable in cash under the Plan as the Committee determines to be in
the best interests of the Company and subject to such other terms and conditions
as it deems appropriate (“Other Cash-Based Awards”).  Any Other Cash-Based
Awards shall be evidenced by an Award agreement in such form as the Committee
shall from time to time approve and which shall set forth the terms and
conditions of the Other Cash-Based Award.  Unless the applicable Award
agreement provides otherwise, if a Participant who holds an Other Cash-Based
Award shall cease to be employed by or performing services for the Company or an
Affiliate for any reason, such Other Cash-Based Award shall be treated as though
it is a Stock Appreciate Right or otherwise as the Committee shall determine in
its discretion.

     

    (c)          Tenure-Based
Full-Value Awards.  Notwithstanding anything in this Plan to the
contrary, with respect to Tenure-Based Full-Value Awards, the restrictions
imposed on such Awards shall not lapse, and the Awards shall not vest, with
respect to 100% of the Awards in less than three (3) years; provided, however,
that during such three (3)-year period, the restrictions may lapse and the
Awards may vest with respect to less than 100% of the value of the Award. 
The Committee shall not and shall not have the power to waive the restrictions
set forth in the immediately foregoing sentence except in the case of the death
or disability of the Participant holding the Tenure-Based Full-Value Award (with
disability being determined in the sole discretion of the Committee) or upon a
Change in Control.

     

    
      	
              12.

            	
              Performance-Based
      Awards

            

    

     

    (a)          Performance-Based
Awards.  Notwithstanding anything to the contrary herein, the
Committee may grant performance-based Options, Awards of Restricted Stock, Other
Stock-Based Awards and Other Cash-Based Awards to Participants
(“Performance-Based Awards”).  Any such Awards granted to Participants who
may be “covered employees” under Section 162(m) of the Code or any successor
section thereto shall be consistent with the provisions thereof.  In such
cases, a Participant’s Performance-Based Award shall be determined based on the
attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) when the outcome for that
performance period is substantially uncertain and (ii) by the earlier of (A)
ninety (90) days after the commencement of the performance period to which the
performance goal relates or (B) the number of days which is equal to twenty-five
percent (25%) of the relevant performance period.

    
      
         

      

      
        - 19
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      (b)         
Performance
Goals.  The
performance goals referred to in Section 12(a) must be objective and shall be
based upon one or more of the following criteria:

    

    

    (i)
consolidated earnings before or after taxes (including earnings before interest,
taxes, depreciation and amortization; (ii) net income; (iii) operating income;
(iv) earnings per share; (v) book value per share of Common Stock; (vi) return
on shareholders’ equity; (vii) expense management; (viii) return on investment;
(ix) improvements in capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvements of profit margins;
(xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs;
(xvi) cash flow; (xvii) working capital; (xviii) return on assets; (xix) asset
turnover; (xx) inventory turnover; (xxi) economic value added (economic profit);
(xxii) total shareholder return; and (xxiii) corporate performance indicators
(indices based on the level of certain services provided to
customers).

    

    (c)          Vesting of
Performance-Based Full- Value Awards.  The restrictions imposed on
the vesting of Performance-Based Full-Value Awards shall not lapse, and such
Awards shall not vest, in less than one (1) year.

     

    
      	
              13.

            	
              Adjustments
      Upon Certain Events

            

    

     

    Notwithstanding any other provisions in
the Plan to the contrary, the following provisions shall apply to all Awards
granted under the Plan:

     

    (a)          Generally. 
Upon any change in the outstanding shares of Common Stock after the
Effective Date by reason of any stock dividend, stock split, reverse stock
split, reclassification, combination, exchange of shares or other similar
recapitalization of the Company, there shall be an appropriate adjustment to (i)
the number or kind of shares of Common Stock or other securities issued or
reserved for issuance pursuant to the Plan or pursuant to outstanding Awards,
(ii) the Exercise Price of any Option or the exercise price of any Stock
Appreciation Right, and/or (iii) any other affected terms of such Awards. 
Notwithstanding the foregoing, no fractional shares shall be issued or paid
for.  No adjustment shall be made under this Section 13(a) upon the
issuance by the Company of any warrants, rights or options to acquire additional
Common Stock or of securities convertible into Non-Qualified common Stock unless
such warrants, rights, options or convertible securities are issued to all
shareholders of the Company on a proportionate basis.

    
      
         

      

      
        - 20
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    (b)          Change in
Control.  Notwithstanding anything contained in this Plan to the
contrary, and unless otherwise provided in the applicable Award agreement at the
time of grant, in the event of a “Change in Control” (as defined below), the
following shall occur as of the effective date of such Change in Control with
respect to any and all Awards outstanding as of the effective date of such
Change in Control:   (i) any and all Awards granted hereunder
will be, as nearly as may reasonably be, automatically converted into the same
type of Award to acquire the kind and amount of shares of stock or other
securities or property (including cash) which the Participant would have owned
or have been entitled to receive as of the effective date of the Change in
Control had the Awards been exercised or realized in full immediately before the
effective date of the Change in Control; (ii) any vesting schedule of all Awards
shall remain unchanged; (iii) appropriate adjustment shall be made in the
application of the provisions of all outstanding Awards with respect to the
rights and interests thereafter of each Participant, to the end that the
provisions set forth in each Award shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
or other securities or property (including cash) thereafter deliverable under
the Award; and (iv) any restrictions imposed on Awards, including Awards of
Restricted Stock and Performance-Based Awards of Restricted Stock, shall remain
unchanged.

     

    (c)          Definition of
Change of Control.  For purposes of this Section 13, “Change in
Control” means:

     

    (i)           The
sale, lease, exchange or other transfer, directly or indirectly, of all or
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company;

     

    (ii)          The
approval by the Company’s shareholders of any plan or proposal for the
liquidation or dissolution of the Company;

     

    (iii)         Any
person or entity becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of more than fifty percent (50%) of
the combined voting power of the outstanding securities of the Company
ordinarily having the right to vote at elections of directors who were not
beneficial owners of at least fifty percent (50%) of such combined voting power
as of the Effective Date; or

     

    (iv)        A
merger or consolidation to which the Company is a party if the shareholders of
the Company immediately prior to the effective date of such merger or
consolidation have, solely on account of ownership of securities of the Company
at such time, “beneficial ownership” (as defined in Rule 13d-3 under the
Exchange Act) immediately following the effective date of such merger or
consolidation of securities of the surviving company representing less than
fifty percent (50%) of the combined voting power of the surviving corporation’s
then outstanding securities ordinarily having the right to vote at elections of
directors.

     

    The
provisions of this Section shall similarly apply to successive transactions of
the types described in Sections 13(c)(i) through (iv).

    
      
         

      

      
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    (d)          Additional
Adjustments of Awards.  Subject to the above provisions, the
Committee shall have the discretion, exercisable at any time before a sale,
merger, consolidation, reorganization, liquidation, dissolution or other Change
in Control transaction, to take such further action as it determines to be
necessary or advisable with respect to Awards.  Such authorized action may
include (but shall not be limited to) establishing, amending or waiving the
type, terms, conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for exercise and lifting
restrictions and other modifications, and the Committee may take such actions
with respect to all Participants, to certain categories of Participants or to
only individual Participants.  The Committee may take such action before or
after granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation, dissolution or Change in Control that is the reason for such
action.  The grant of an Award under the Plan shall not affect 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 or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

     

    
      	
              14.

            	
              Shares
      Acquired for Investment

            

    

     

    Shares of Common Stock acquired by a
Participant under this Plan shall be acquired by the Participant for investment
and without intention of resale unless, in the opinion of counsel to the
Company, such shares may be purchased without any investment
representation.  Where an investment representation is deemed necessary,
the Committee may require a written representation to that effect by the
Participant as a condition of a Participant exercising an Option or otherwise
obtaining shares of Common Stock pursuant an Award granted under this Plan, and
the Committee may place an appropriate legend on the stock certificates
evidencing the shares of Common Stock so issued indicating that such shares have
not been registered under federal or state securities laws and describing the
restrictions on transfer.  Each Award shall be subject to the requirement
that if, at any time, the Committee shall determine in its discretion that the
listing, registration or qualification of the shares of Common Stock subject to
the Award upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, if necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the issuance or purchase of shares of Common Stock thereunder, then such
Award shall not be granted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.

     

    
      	
              15.

            	
              No
      Right to Employment, Service as a Director or
  Awards

            

    

     

    The granting of an Award under the Plan
shall impose no obligation on the Company or any Affiliate to continue the
employment of a Participant and shall not lessen or affect the Company’s or the
Affiliate’s right to terminate the employment of such Participant.  Nothing
in the Plan will interfere with or limit in nay way the right of the Company,
the Board or the Company’s stockholders to terminate the directorship of any
Director at any time, nor confer upon any Director any right to continue to
serve as a Director of the Company.  No Participant or other person shall
have any claim to be granted any Award, and there is no obligation for uniform
treatment of Participants or holders or beneficiaries of Awards.  The terms
and conditions of Awards and the Committee’s determinations and interpretations
with respect thereto need not be the same with respect to each
Participant.

    
      
         

      

      
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              16.

            	
              Other
      Benefit and Compensation Programs

            

    

     

    Payments and other benefits received by
a Participant under an Award shall not be deemed a part of a Participant’s
regular, recurring compensation for purposes of any termination, indemnity or
severance pay laws and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan, contract or
similar arrangement provided by the Company or an Affiliate, unless expressly so
provided by such other plan, contract or arrangement or the Committee determines
that an Award or portion of an Award should be included to reflect competitive
compensation practices or to recognize that an Award has been made in lieu of a
portion of competitive cash compensation.

     

    
      	
              17.

            	
              Successors
      and Assigns

            

    

     

    The Plan shall be binding on all
successors and assigns of the Company and a Participant including, without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant’s creditors.

     

    
      	
              18.

            	
              Nontransferability
      of Awards; Designation of
Beneficiary

            

    

     

    (a)          Nontransferability. 
No Award or interest in an Award may be sold, assigned, pledged (as
collateral for a loan or as security for the performance of an obligation or for
any other purpose) or transferred by the Participant or made subject to
attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, except to the extent a Participant designates
one or more beneficiaries on a Company-approved form who may exercise the A ward
or receive payment under the Award after the Participant’s death.  During a
Participant’s lifetime, an Award may be exercised only by the
Participant.

     

    (b)          Designation of
Beneficiary.  A Participant may designate a beneficiary to succeed
to the Participant’s Awards under the Plan in the event of the Participant’s
death by filing a beneficiary form with the Company and, upon the death of the
Participant, such beneficiary shall succeed to the rights of the Participant to
the extent permitted by law and the terms of this Plan and the applicable Award
agreement.  In the absence of a validly designated beneficiary who is
living at the time of the Participant’s death, the Participant’s executor or
administrator of the Participant’s estate shall succeed to the Awards, which
shall be transferable by will or pursuant to laws of descent and
distribution.

     

    
      	
              19.

            	
              Amendments
      or Termination

            

    

     

    The Board may amend, alter or
discontinue the Plan, but no amendment, alteration or discontinuation shall be
made without the consent of a Participant if such action would diminish any of
the rights of the Participant under any Award theretofore granted to such
Participant under the Plan; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable
laws.

    
      
         

      

      
        - 23
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              20.

            	
              International
      Participants

            

    

     

    With respect to Participants who reside
or work outside the United States of America, the Committee may, in its sole
discretion, amend the terms of the Plan or adopt such modifications, procedures
or subplans with respect to such Participants as are necessary or desirable to
ensure the viability of the benefits of the Plan, comply with applicable foreign
laws or obtain more favorable tax or other treatment for a Participant, the
Company or an Affiliate; provided, however, that no such changes shall apply to
the Awards to Participants who may be “covered employees” under Section 162(m)
of the Code or any successor thereto unless consistent with the provisions
thereof.

     

    
      	
              21.

            	
              General

            

    

     

    (a)          Issuance of
Shares of Common Stock.  Notwithstanding any other provision of the
Plan, the Company shall have no obligation to issue or deliver any shares of
Common Stock under an Award granted under the Plan or make any other
distribution of benefits under the Plan unless, in the opinion of the Company’s
counsel, such issuance, delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act of 1933, as amended, or any successor thereto (the “Securities
Act”) or the laws of any state or foreign jurisdiction) and the applicable
requirements of any securities exchange or similar entity.  The Company
shall be under no obligation to any Participant to register for offering or
resale or to qualify for an exemption from registration under the Securities
Act, or to register or qualify under the laws of any state or foreign
jurisdiction, any Awards, shares of Common Stock, security or interest in a
security paid or issued under, or created by, the Plan, or to continue in effect
any such registrations or qualifications if made.  The Company may issue
stock certificates evidencing shares of Common Stock with such legends and
subject to such restrictions on transfer and stop transfer instructions as
counsel for the Company deems necessary or desirable for compliance by the
Company with federal, state and foreign securities laws.  The Company may
also require such other action or agreement by the Participants as may from time
to time be necessary to comply with applicable securities laws.

     

    (b)          Stock
Certificates.  To the extent this Plan or any applicable Award
agreement provides for the issuance of stock certificates to reflect the
issuance of shares of Common Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange or market on which such shares are traded
or quoted.

     

    (c)          No Rights as a
Shareholder.  Unless otherwise provided by the Committee or in the
Plan or an Award agreement evidencing an Award or in any other written agreement
between a Participant and the Company or an Affiliate, no Award shall entitle
the Participant to any cash dividend, voting or other right of a shareholder
unless and until the date of issuance under the Plan of any shares of Common
Stock that are subject to such Award.

    
      
         

      

      
        - 24
-

        
          

        

      

      
         

      

    

    (d)          No Trust or
Fund.  The Plan is intended to constitute an “unfunded” plan. 
Nothing contained herein shall require the Company to segregate any monies,
other property, or shares of Common Stock, or to create any trusts, or to make
any special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.

     

    (e)          Severability. 
If any provision of the Plan or any Award agreement shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan or Award agreement, and such Plan or Award agreement
shall be construed and enforced as if the illegal or invalid provision had not
been included.

     

    (f)           Choice of
Law.  The validity, construction, interpretation, administration and
effect of the Plan, and rights relating to the Plan and to Awards granted under
the Plan, shall be governed by the substantive laws, but not the choice of law
rules, of the State of Minnesota.

     

    
      	
              22.

            	
              Effective
      Date

            

    

     

    The Plan shall be effective on October
8, 2004, which is the date it was approved by the Board.  Amendments to the
Plan were approved by the Board on May 10, 2005, March 23, 2006, February 5,
2007, March 31, 2008, April 20, 2010 and May 7, 2010, and the Plan, as so
amended, was approved by the Company’s shareholders on June 10, 2005, May 18,
2006, May 17, 2007, May 22, 2008 and June 10, 2010.  The Plan takes into
account the reverse stock splits effected in June 2005 and May
2008.
 

    
      
         

      

      
        - 25
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