Document:

Exhibit
10.3

 

Columbia Sussex Corporation

207 Grandview Drive

Ft. Mitchell, Kentucky 41017

 

 

October 3,
2005

 

 

Penn
National Gaming, Inc.

825 Berkshire Blvd., Suite 200

Wyomissing, PA 19610

 

Re:                             Argosy Casino Baton Rouge:

Agreement to Execute Securities Purchase Agreement

 

Reference is made to the
Agreement to Execute Securities Purchase Agreement, dated as of June 20,
2005 (the “Agreement to Execute”),
by and among Penn National Gaming, Inc., a Pennsylvania corporation (“Penn”), CP Baton Rouge Casino, L.L.C., a
Louisiana limited liability company (“Buyer”),
and Columbia Sussex Corporation, a Kentucky corporation (“Columbia Sussex”).

 

To facilitate the approval
of the transactions contemplated by the Securities Purchase Agreement (as
defined below) by the Louisiana gaming authorities, the parties hereto agree
that, effective as of the date hereof:

 

(i)            Wimar Tahoe Corporation, a Nevada corporation (“Wimar Tahoe”), shall be substituted for,
and shall replace, Columbia Sussex as a party to, and shall be the “Parent
Guarantor” under, the Agreement to Execute;

 

(ii)           the “Securities Purchase Agreement” referred to in clause (a) of
Section 1(a) of the Agreement to Execute shall be the
Securities Purchase Agreement substantially in the form attached hereto as Annex
A (the “Securities Purchase Agreement”);
and

 

(iii)          the “Transition Services Agreement” referred to in clause (b) of
Section 1(b) of the Agreement to Execute shall be the
Transition Services Agreement substantially in the form attached as Exhibit D
to the Securities Purchase Agreement (as defined above).

 

This letter agreement
incorporates herein by reference the provisions of Paragraph 10 of the
Agreement to Execute.

 

[signature pages follow]

 

 

If the foregoing is in
accordance with your understanding of our agreement, kindly sign and return to
us a counterpart hereof, whereupon this instrument will become a binding
agreement in accordance with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Columbia Sussex Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William J. Yung

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CP
  Baton Rouge Casino, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William J. Yung

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Wimar
  Tahoe Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. Yung

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William J. Yung

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
  Accepted
  and agreed to as of the date first written above:

  	
   

  
	
   

  	
   

  
	
  Penn National Gaming, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Robert S. Ippolito

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert S. Ippolito

  	
   

  
	
   

  	
  Title:

  	
  Vice President, Secretary
  and Treasurer

  	
   

  
	
   

  	
   

  
	
  Argosy Gaming Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Robert S. Ippolito

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert S. Ippolito

  	
   

  
	
   

  	
  Title:

  	
  Treasurer and SecretaryEXHIBIT
10.1

 

FOCUS ENHANCEMENTS, INC.

2004 STOCK INCENTIVE PLAN

 

1.     Purpose.  This Stock Incentive Plan, to be known as the
2004 Stock Incentive Plan (hereinafter, this “Plan”), is intended to promote
the interests of Focus Enhancements, Inc. (hereinafter, the “Company”) by
providing an inducement to obtain and retain the services of qualified persons
to serve as employees of the Company or members of its Board of Directors (the “Board”).

 

2.     Available Shares.  The total number of shares of Common Stock, par
value $0.01 per share, of the Company (the “Common Stock”) for which options or
restricted stock may be granted under this Plan shall not exceed 2,452,000
shares, subject to adjustment in accordance with paragraph 2 of this Plan.  Shares subject to this Plan are authorized
but unissued shares or shares that were once issued and subsequently reacquired
by the Company.  If any options or
restricted stock granted under this Plan are surrendered or forfeited before
exercise or lapse without exercise, in whole or in part, the shares reserved
therefore shall continue to be available under this Plan.

 

In the event
of any change in the outstanding shares of Common Stock or other securities
then subject to the Plan by reason of any stock split, reverse stock split,
stock dividend, recapitalization, merger, consolidation, combination or
exchange of shares or other similar corporate change, or if the outstanding
securities of the class then subject to the Plan are exchanged for or converted
into cash, property or a different kind of security, or if cash, property or
securities are distributed in respect of such outstanding securities (other
than a regular cash dividend), then, unless the terms of such transaction shall
provide otherwise, such equitable adjustments shall be made in the Plan and the
awards thereunder (including, without limitation, appropriate and proportionate
adjustments in (i) the number and type of shares or other securities that
may be acquired pursuant to awards theretofore granted under the Plan; (ii) the
maximum number and type of shares or other securities that may be issued
pursuant to awards thereafter granted under the Plan; (iii) the number of
shares of restricted stock that are outstanding; and (iv) the maximum
number of shares or other securities with respect to which awards may
thereafter be granted to any Participant in any Plan Year) as the Committee
determines are necessary or appropriate, including, if necessary, any
adjustment in the maximum number of shares of Common Stock available for
distribution under the Plan as set forth in this Section 3. Such
adjustments shall be conclusive and binding for all purposes of the Plan.

 

3.     Administration.  This Plan shall be administered by the by the
Compensation Committee, which consists of two or more members of the Board,
each of whom shall be both a “Non-Employee Director,” as that term is defined
in Rule 16b-3(b)(3)(i) of the Exchange Act, and an “outside director”
within the meaning of Section 162(m) of the Code. The Committee shall,
subject to the provisions of the Plan, have the power to construe this Plan, to
determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of this Plan as it may deem desirable.  No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to
this Plan or any option granted under it.

 

1

 

4.     Grant of Options or
Restricted Shares / Eligibility. 
Subject to the availability of shares under this Plan, the Committee may
make grants of options and/or restricted shares to employees of the Company
and/or members of the Board under this Plan from time to time in accordance
with the terms of the Plan.

 

5.     Shareholder Approval.  Anything in this Plan to the contrary
notwithstanding, the effectiveness of this Plan and of the grant of all options
or restricted stock hereunder is in all respect subject to this Plan and
options or restricted stock granted under it shall be of no force and effect
unless and until the approval of this Plan by the vote of the holders of a
majority of the Company’s shares of Common Stock present in person or by proxy
and entitled to vote at a meeting of shareholders at which this Plan is
presented for approval.

 

6.     Options.  (a) 
Option Price.  The purchase price
of the stock covered by an option granted pursuant to this Plan shall be 100%
of the fair market value of such shares on the day the option is granted.  The option price will be subject to adjustment
in accordance with the provisions of paragraph 2 of this Plan.  For purposes of establishing the exercise
price and for all other valuation purposes under the Plan, the fair market
value of a share of common stock on any relevant date will be the lower of (1)
the last sale price of our common stock on such relevant date, or (2) the
opening sale price on the date fair market value is determined, where the
opening sale price is represented by the closing sale price on the trading day
immediately prior, in the case where the stock is traded on the NASDAQ Capital
Market or NASDAQ National Market. 
Alternatively, fair market value shall be determined by the average
between the highest and lowest sales price quoted (on that date) by an
established quotation service for over-the-counter securities, if the common
stock is not reported on the NASDAQ Capital Market or NASDAQ National Market
List.  However, if the Common Stock is
not publicly traded at the time an option is granted under the Plan, “fair
market value” shall be deemed to be the fair value of the Common Stock as
determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm’s length.

 

(b)           Period
of Option.  Unless sooner terminated
in accordance with the provisions of paragraph 6(e) of this Plan, an option
granted hereunder shall expire on the date that is ten (10) years after the
date of grant of the option.

 

(c)           Vesting
of Options and Non-Transferability of Options.  Options granted under this Plan shall not be
exercisable until they become vested. 
Options granted under this Plan shall vest in the optionee and thus
become exercisable in accordance with the vesting schedule as determined by the
Committee from time to time in a option grant letter, or upon the occurrence of
a specified event or performance criteria (including certain performance
criteria similar to that set forth in paragraph 7(b)(4)), provided, however,
the optionee has continuously served as a member of the Board, as an employee
of the Company, or in another advisory role to the Company.

 

The number of shares as to which options may
be exercised shall be cumulative, so that once the option shall become
exercisable as to any shares it shall continue to be exercisable as to

 

2

 

said shares,
until expiration or termination of the option as provided in this Plan; provided
however, any option granted under this Plan shall in no event be exercised
unless and until this Plan has been approved by the Company’s stockholders, but
upon such approval the vesting shall become effective as of the date of the
grant.

 

(d)           Non-transferability.  Any option granted pursuant to this Plan
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee’s lifetime only by him or her.

 

(e)           Termination
of Option Rights.

 

(1)   Except
as otherwise specified in the agreement relating to an option, in the event an
optionee ceases to be an employee of Company or a member of the Board, as the
case may be, for any reason other than death or permanent disability, any then
unexercised portion of options granted to such optionee shall, to the extent
not then vested, immediately terminate and become void; except as set forth in
paragraphs 6(b) and 6(c), any portion of an option which is then vested but has
not been exercised at the time the optionee so ceases to be a member of the
Board or an employee may be exercised, to the extent it is then vested by the
optionee within ninety days after such event.

 

(2)   Notwithstanding
the foregoing, in the event any optionee who is a member of the Board of
Directors  (i) ceases to be a member of
the Board of Directors at the request of the Company, (ii) is removed without
cause, or (iii) otherwise does not stand for nomination or re-election as a
director of the Company at the request of the Company, then any portion of any
Option granted to such optionee may be exercised, to the extent it is then
vested by the optionee within one year after such event.

 

(3)   Notwithstanding
anything to the contrary herein, in no event shall any option be exercised if
the optionee is dismissed from employment or removed from the Board of
Directors for any one of the following reasons: 
(i) disloyalty, gross negligence, dishonesty or breach of fiduciary duty
to the Company; or (ii) the commission of an act of embezzlement, fraud or
deliberate disregard of the rules or polices of the Company which results in
loss, damage or injury to the Company, whether directly or indirectly; or (iii)
the unauthorized disclosure of any trade secret or confidential information of
the Company; or (iv) the commission of an act which constitutes unfair
competition with the Company or which induces any customer of the Company to
break a contract with the Company; or (v) the conduct of any activity on behalf
of any organization or entity which is a competitor of the Company (unless such
conduct is approved by a majority of the members of the Board of Directors).

 

(4)   In
the event that an optionee ceases to be an employee of the Company or a member
of the Board, as the case may be, by reason of his or her death or permanent
disability, any option granted to such optionee shall be immediately

 

3

 

and automatically accelerated and become
fully vested and all unexercised options shall be exercisable by the optionee
(or by the optionee’s personal representative, heir or legatee, in the event of
death) for a period of one year thereafter.

 

(f)            Exercise
of Option.  Subject to the terms and
conditions of this Plan and the option agreements, an option granted hereunder
shall, to the extent then exercisable, be exercisable in whole or in part by
giving written notice to the Secretary of the Company by mail or in person
addressed to FOCUS Enhancements, Inc., 1370 Dell Avenue, Campbell, California
95008, at its principal executive offices, or other such address as optionee
may be informed from time to time, stating the number of shares with respect to
which the option is being exercised, accompanied by payment in full for such shares.  Payment may be (a) in United States dollars
in cash or by check, (b) in whole or in part in shares of the Common Stock of
the Company already owned by the person or persons exercising the option or
shares subject to the option being exercised (subject to such restrictions and
guidelines as the Board may adopt from time to time), valued at fair market
value determine in accordance with the provisions of paragraph 6 or (c)
consistent with applicable law, through the delivery of an assignment to the Company
of a sufficient amount of the proceeds from the sale to the broker or selling
agent to pay that amount to the Company, which sale shall be at the participant’s
direction at the time of exercise. 
Notwithstanding the foregoing, the Committee shall have the authority,
in their absolute discretion to settle options that are exercised by way of the
“cashless exercise” method described in (c) of this paragraph 6 through an
issuance of the “net shares,” where the term “net shares” is the number of
shares that is equivalent in value to the fair market value of the underlying
stock on the exercise date, as determined in accordance with the provisions of
this paragraph 6, less the exercise price. 
The Company’s transfer agent shall, on behalf of the Company, prepare a
certificate or certificates representing such shares acquired pursuant to
exercise of the option, shall register the optionee as the owner of such shares
on the books of the Company and shall cause the fully executed certificate(s)
representing such shares to be delivered to the optionee as soon as practicable
after payment of the option price in full. 
The holder of an option shall not have any rights of a stockholder with
respect to the shares covered by the option, except to the extent that one or
more certificates for such shares shall be delivered to him or her upon the due
exercise of the option.

 

7.     Restricted Stock.  Restricted stock awards under the Plan shall
consist of grants of shares of Common Stock of the Company subject to the terms
and conditions hereinafter provided.

 

(a)   Grant of Awards.  The Committee shall (i) select the
officers and key employees to whom restricted stock may from time to time be
granted, (ii) determine the number of shares to be covered by each award
granted, (iii) determine the issue price; (iv) determine the terms and
conditions (not inconsistent with the Plan) of any award granted hereunder, and
(v) prescribe the form of the agreement, legend or other instrument
necessary or advisable in the administration of awards under the Plan.  Restricted stock may be granted to Board
members in lieu of Board fees.

 

(b)   Terms and Conditions of
Awards.  Any restricted stock award
granted under the Plan shall be evidenced by a Restricted Stock Agreement
executed by the Company and the

 

4

 

recipient, in
such form as the Committee shall approve, which agreement shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions not inconsistent with the Plan as the Committee shall prescribe:

 

(1)   Number of Shares Subject to an Award:  The Restricted Stock Agreement shall specify
the number of shares of Common Stock subject to the Award.

 

(2)   Restriction Period: 
The period of restriction applicable to each Award shall be established
by the Committee but may not be less than one year, unless the Committee
determines otherwise.  The Restriction
Period applicable to each Award shall commence on the Award Date.

 

(3)   Consideration:  With
respect to employees of the Company, each recipient, as consideration for the
grant of an award, shall remain in the continuous employ of the Company for at
least one year from the date of the granting of such award, or as otherwise
determined by the Committee, and any shares covered by such an award shall
lapse if the recipient does not remain in the continuous employ of the Company
for at least one year from the date of the granting of the award, except as
otherwise determined by the Committee.

 

(4)   Restriction Criteria: 
The Committee shall establish the criteria upon which the Restriction
Period shall be based.  Restrictions
shall be based upon either or both of (i) the continued employment of the
recipient or (ii) the attainment by the Company of one or more of the
following measures of operating performance:

 

	
  a.  Earnings

  	
  d.  Financial return ratios

  
	
   

  	
   

  
	
  b.  Revenue

  	
  e.  Total Shareholder Return

  
	
   

  	
   

  
	
  c.  Operating or net cash flows

  	
  f.  Market share

  

 

The
Committee shall establish the specific targets for the selected criteria and,
in its judgment, can select additional measures of performance.  These targets may be set at a specific level
or may be expressed as relative to the comparable measure at comparison
companies or a defined index.  These
targets may be based upon the total Company, one or more business units of the
Company or a defined business unit that the executive has responsibility for or
influence over.  In cases where objective
performance criteria are established, the Committee shall determine the extent
to which the criteria have been achieved and the corresponding level to which
restrictions will be removed from the Award or the extent to which a
participant’s right to receive an Award should be lapsed in cases where the
performance criteria have not been met and shall certify these determinations
in writing.  The Committee may provide
for the determination of the attainment of such restrictions in installments
where deemed appropriate.

 

(c)   Terms and Conditions of
Restrictions and Forfeitures.  The shares
of Common Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:

 

5

 

(1)   During
the Restriction Period, the participant will not be permitted to sell,
transfer, pledge or assign restricted stock awarded under this Plan.

 

(2)   Except
as provided in Section 7(c)(1), or as the Committee may otherwise determine,
the participant shall have all of the rights of a stockholder of the Company,
including the right to vote the shares and receive dividends and other
distributions provided that distributions in the form of stock shall be subject
to the same restrictions as the underlying restricted stock.

 

(3)   In
the event of a participant’s retirement, death or disability prior to the end
of the Restriction Period for a participant who has satisfied the one year
employment requirement of Section 7(b)(3) with respect to an award prior to
retirement, death or disability, or as otherwise determined by the Committee,
the participant, or the participant’s estate, shall be entitled to receive that
proportion (to the nearest whole share) of the number of shares subject to the
Award granted as the number of months of the Restriction Period which have
elapsed since the Award date to the date at which the participant’s retirement,
death or disability occurs, bears to the total number of months in the
Restriction Period.  The participant’s
right to receive any remaining shares shall be canceled and forfeited and the
shares will be deemed to be reacquired by the Company.

 

(4)   In
the event of a participant’s retirement, death, disability or in cases of
special circumstances as determined by the Committee, the Committee may, in its
sole discretion when it finds that such an action would be in the best
interests of the Company, accelerate or waive in whole or in part any or all
remaining time based restrictions with respect to all or part of such
participant’s restricted stock.

 

(5)   Upon
termination of employment for any reason during the Restriction Period, subject
to the provisions of paragraph 7(c)(3) above or in the event that the
participant fails promptly to pay or make satisfactory arrangements as to the
withholding taxes as provided in the following paragraph, all shares still
subject to restriction shall be forfeited by the participant and will be deemed
to be reacquired by the Company.

 

(6)   A
participant may, at any time prior to the expiration of the Restriction Period,
waive all rights to receive all or some of the shares of a restricted stock
Award by delivering to the Company a written notice of such waiver.

 

(7)   Notwithstanding
the other provisions of this Section 7, the Committee may adopt rules that
would permit a gift by a participant of restricted shares to members of the
participant’s immediate family (spouse, parents, children, stepchildren,
grandchildren or legal dependants) or to a trust whose beneficiary or
beneficiaries shall be either such a person or persons or the participant.

 

(8)   Any
attempt to dispose of restricted stock in a manner contrary to the restrictions
shall be ineffective.

 

6

 

8.     Acceleration Upon Change in Control.  The Committee may, in its discretion, provide
that unvested awards will accelerate upon the occurrence of a Change in
Control.  The terms of such acceleration
shall be specifically set out in an agreement upon the grant of an award or
pursuant to an employment, severance or similar agreement.

 

“Change in Control” shall mean
any of the following occurrences:

 

(a) any “person,” as such term
is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company
or any trustee or other fiduciary holding securities under an employee benefit
plan of the Company), is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities;

 

(b) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this definition) whose
election by the Board of Directors or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;

 

(c) the shareholders of the
Company approve a merger or consolidation of the Company with any other entity,
other than (i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no “person” (as hereinabove defined) acquires
more than 50% of the combined voting power of the Company’s then outstanding
securities; or

 

(d) the shareholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets.

 

9.     Legend on Certificates.  The certificates representing restricted
shares or shares issued pursuant to the exercise of an option granted hereunder
shall carry such appropriate legend, and such written instructions shall be
given to the Company’s transfer agent, as may be deemed necessary or advisable
by counsel to the Company in order to comply with the requirements of the Securities
Act of 1933 or any state securities laws.

 

10.   Representations of
Optionee.  If requested by the
Company, the optionee shall deliver to the Company written representations and
warranties upon exercise of the option that are necessary to show compliance
with Federal and state securities laws, including representations and
warranties to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933).

 

7

 

11.   Agreement.  Each option or restricted stock award granted
under the provisions of this Plan shall be evidenced by an agreement, which
agreement shall be duly executed and delivered on behalf of the Company and by
the grantee to whom such award is granted. 
The agreement shall contain such terms, provisions and conditions not
inconsistent with this Plan as may be determined by the committee and the
officer executing it.

 

12.   Termination and Amendment
of Plan.  Awards may no longer be
granted under this Plan after May 27, 2014, and this Plan shall terminate when
all options granted or to be granted hereunder are no longer outstanding.  The Board may at any time terminate this Plan
or make such modification or amendment thereof as it deems advisable; provided,
however, that if stockholder approval of the Plan is required by law,
the Board may not, without approval by the affirmative vote of the holders of a
majority of the shares of Common Stock present in person or by proxy and voting
on such matter at a meeting, (a) increase the maximum number of shares for
which awards may be granted under this Plan (except by adjustment pursuant to
Section 8), (b) materially modify the requirements as to eligibility to
participate in this Plan, (c) materially increase benefits accruing to option
holders under this Plan or (d) amend this Plan in any manner which would cause
Rule 16b-3 under the Securities Exchange Act (or any successor or amended
provision thereof) to become inapplicable to this Plan Termination or any
modification or amendment of this Plan shall not, without consent of a
participant, affect his or her rights under an option previously granted to him
or her.

 

13.   Reorganization or
Liquidation of the Company.  In the
event of (a) the complete liquidation of the Company, (b) a merger,
reorganization, or consolidation of the Company with any other corporation
(other than a Subsidiary of the Company) in which the Company is not the
surviving corporation, or (c) the sale of all or substantially all of the
Company’s assets, any unvested restricted stock and unexercised options then
outstanding shall be deemed canceled as of the effective date of such event
unless the surviving corporation in any such merger, reorganization or
consolidation or the acquiring corporation in any such sale elects to assume
the unvested restricted stock and unexercised options under the Plan or to
issue substitute unvested restricted stock and options in place thereof.  Notwithstanding anything in this Plan or any
option agreement to the contrary, the Company shall not be deemed to have been
liquidated by reason of the merger or consolidation of the Company with or into
a Subsidiary of the Company in a transaction in which the Company is not the
surviving corporation.  The Company shall
give each optionee at least thirty (30) days prior written notice of the
anticipated effective date of any such liquidation, merger, reorganization,
consolidation or sale.  Notwithstanding
anything in this Plan or in any Stock Option Agreement to the contrary, (i) all
Option exercises effected during the 30-day period prior to the effective date
of any such merger, reorganization , consolidation or sale, shall be deemed to
be effective immediately prior to the closing of such liquidation, merger,
reorganization, consolidation or sale and (ii), if the Company abandons or
otherwise fails to close any such liquidation, merger, reorganization,
consolidation or sale, then (a) all exercises during the foregoing 30-day
period shall cease to be effective ab initio and (b) the outstanding options
shall be exercisable as otherwise determined under the applicable option
agreement and without consideration of this paragraph 13 or the corresponding
provisions of any option agreement.

 

14.   Withholding of Income
Taxes.  The Company shall make
appropriate provisions for the payment of any Federal, state or local taxes or
any other charges that may be required by law to be withheld by reason of a
grant or the issuance of shares of Common Stock pursuant to the

 

8

 

Plan.    At the election of the optionee or
restricted stockholder, the withholding obligation may be satisfied: (a)
through payment in United States dollars in cash or check, (b) through the
optionee’s or restricted stockholder’s surrender of shares of Common Stock that
the optionee or restricted stockholder had owned for more than six (6) months
prior to the date of such transfer, (c) by authorizing a Company-approved third
party to sell the shares (or a sufficient portion of the shares) acquired upon
exercise of the option and remit to the Company a sufficient portion of the
sale proceeds to pay any tax withholding resulting from such exercise, and (d)
through the Company’s retention of shares of Common Stock which would otherwise
be issued as a result of the exercise of the option or the award of the
restricted stock.  Notwithstanding the
foregoing, in the case where optionee elects tax withholding alternative (c), the
Committee shall have the authority, in their absolute discretion to satisfy the
employer tax withholding holding through the Company’s retention of shares of
Common Stock which would otherwise be issued as a result of the exercise of the
option.

 

15.   Compliance with
Regulations.  It is the Company’s
intent that the Plan comply in all respects with Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor or amended provision thereof)
and any applicable Securities and Exchange Commission interpretations
thereof.  If any provision of this Plan
is deemed not to be in compliance with Rule 16b-3, the provision shall be null
and void.

 

16.   Governing Law.  The validity and construction of this Plan
and the instruments evidencing options shall be governed by the laws of the
State of Delaware, without giving effect to the principles of conflicts of law
thereof.

 

 

Approved by Board of Directors
of the Company, as amended: September 28, 2005.

 

9

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