Document:

EXHIBIT 10.1

     

    
      

      

    

    EXHIBIT
      10.1

     

    

      STOCK
        PURCHASE AGREEMENT

      

      

      This
        Stock Purchase Agreement (the "Agreement") dated as of June 18, 2007, is
        between
        Interactive Games, Inc., a Nevada Corporation (“IGames”) and CLB Investment
        Corp., an Illinois corporation (“CLBIC”). In this Agreement, IGames and CLBIC
        may be jointly or collectively referred to as the "Parties" and as a "Party"
        individually.

      

      Whereas,
        IGames desires to sell all of the capital stock of its wholly owned subsidiary,
        Torpedo Sports, Inc., a Canadian corporation (“Torpedo”) which is currently in
        insolvency proceedings in Montreal, Quebec, Canada; and

      

      Whereas,
        CLBIC is a company that among other things purchase assets and assume
        obligations in connection with restructuring of other companies:

      

      Now
        therefore, in consideration of the matters set forth in this Agreement, and
        other consideration, the sufficiency of which is hereby acknowledged by the
        Parties, the Parties agree as follows:

      

      1.  Assignment
        and Transfer.
        Upon
        execution of this Agreement, IGames agrees to sell, transfer and convey to
        CLBIC
        and CLBIC agrees to purchase from IGames all of the issued and outstanding
        shares of capital stock of Torpedo. IGames shall deliver certificates
        representing the stock of Torpedo to CLBIC, endorsed in favor of CLBIC or
        with
        stock powers or other

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      suitable
        documentation evidencing transfer of the stock to CLBIC.

      

      2.  Title
        to Stock.
        IGames
        represents and warrants that it is the sole lawful owner of the stock in
        Torpedo, free and clear of all liens, claims, encumbrances and interest,
        that
        IGames has not transferred, encumbered or assigned any interest in any of
        the
        Torpedo stock to any person or entity, and that IGames has good and valid
        title
        to the stock of Torpedo, and has full power, authority and legal ability
        to
        convey good, valid and unencumbered title in the Torpedo stock to
        CLBIC.

      

      3.  Stock
        Warranties.
        IGames
        represents and warrants that all of the Torpedo stock conveyed to CLBIC has
        been
        duly authorized, properly issued, and is fully paid and not subject to claim
        or
        assessment by the issuer, and constitutes one hundred percent (100%) of the
        outstanding stock of Torpedo.

      

      4.  Payment.
        CLBIC
        shall pay IGames Ten Dollars ($10.00) for the purchase of the Torpedo
        stock.

      

      5.  Insolvency
        of Torpedo.
        CLBIC
        acknowledges that Torpedo is the subject of an insolvency proceeding in
        Montreal, Quebec, and that all or substantially all of its assets, liabilities
        and business affairs are or were subject to the jurisdiction of the authorities
        in that proceeding.

      

      6.  Representations
        and Warranties.
        Each
        Party to this Agreement represents and warrants to the others that: (a) it
        has
        full 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      power
        and
        authority to enter into this Agreement and perform all of its obligations
        under
        this Agreement, has duly executed and delivered this Agreement, and this
        Agreement is legally binding on it and is enforceable in accordance with
        its
        terms; (b) the execution, delivery and performance of the transactions
        contemplated herein do not conflict with or violate, or result in a breach
        of or
        constitute a default under, any contract or agreement to which it is a Party
        or
        by which it is bound; and (c) no consent or approval from any person, firm
        or
        entity, or any governmental authority or court, is required in connection
        with
        the execution and delivery of this Agreement or the consummation of the
        transactions contemplated by this Agreement. Each of the Parties represents
        and
        warrants that it has not filed for or been the subject of any bankruptcy
        or
        insolvency proceeding or receivership, that it is competent and authorized
        to
        enter into and perform this Agreement, and will be bound by the terms of
        this
        Agreement. Each Party to this Agreement represents and warrants that the
        Party
        has relied upon the Party's own judgment and the judgment of the Party's
        own
        respective legal counsel regarding the every aspect of this Agreement, and
        that
        no statements or representations (expressed or implied) were made by any
        other
        Party or any other Party's agents, employees, officers, directors or legal
        representatives

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      that
        have
        influenced or induced the Party to execute this Agreement.

      

      7.  General
        Provisions.
        This
        Agreement shall be binding upon and shall inure to the benefit of the Parties
        and their respective heirs, successors and assigns. This Agreement may be
        executed in any number of counterparts, all of which will be considered one
        and
        the same agreement. All of the Parties, with the assistance of their counsel,
        have participated in the drafting and negotiation of this Agreement, and
        the
        Agreement shall be construed as if it were prepared by all of the Parties
        to
        this Agreement, without regard to who originally drafted or proposed any
        section
        or term of the Agreement. This Agreement reflects the entire understanding
        between the Parties to this Agreement, and fully supersedes and replaces
        any and
        all alleged or actual prior agreements or understandings between the Parties
        to
        this Agreement. No statements, promises or inducements by any of the Parties
        or
        any agent of any of the Parties to this Agreement shall be valid or binding
        unless they are contained in this Agreement. No modification or amendment
        to
        this Agreement shall be valid or binding unless that modification or amendment
        is set forth in a subsequent written document executed by each of the Parties
        to
        be bound by the amendment or modification. If any provision of this Agreement
        or
        the application of that provision to any Party or circumstances shall be
        held
        invalid,

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      the
        remainder of the Agreement, or the application of that provision to the Party
        or
        circumstances other than those to which it is held invalid, shall not be
        affected by that determination. All of the representations and warranties
        in
        this Agreement shall survive the execution and delivery and performance of
        obligations pursuant to this Agreement.

      

      8.  In
        connection with this transaction, IGames will cause a third party to transfer
        to
        CLBIC two million (2,000,000) shares of the common stock of IGames to CLBIC,
        which stock was restricted stock at the time of its issuance to that third
        party
        and will bear a restrictive legend at the time of this transfer. 

      

      Subscribed
        and agreed to on June 18, 2007.

      

      
        	
                INTERACTIVE
                  GAMES, INC.

              	
                CLB
                  INVESTMENT CORP.

              
	 	 
	
                By:
                  /s/
                  Henry Fong

                Its:
                  President

              	
                By:
                  /s/
                  David E. Schaper

                Its:
                  Presidentex10p1.htm

    
      

    

    Exhibit
      10.1

    VERICHIP
      CORPORATION

    2007
      STOCK INCENTIVE PLAN

     

    1.
      Purposes of the Plan. The purposes of this Stock Incentive Plan are to
      attract and retain the best available personnel for positions of substantial
      responsibility, to provide additional incentive to Employees and Consultants,
      and to promote the long-term success of the Company’s business and to link
      participants’ directly to stockholder interests through increased stock
      ownership. Awards granted under the Plan may be Incentive Stock Options,
      Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
      Performance Units, Performance Shares, Cash Awards and Other Stock Based
      Awards.

     

    2.
      Definitions. As used herein, the following definitions shall
      apply:

     

    (a)
      “Administrator” means the Board or any Committee or Officer as shall be
      administering the Plan, in accordance with Section 4 of the Plan.

     

    (b)
      “Affiliate” means a Parent, a Subsidiary, an entity that is not a
      Parent or Subsidiary but which has a direct or indirect ownership interest
      in
      the Company or in which the Company has a direct or indirect ownership interest,
      an entity that is a customer or supplier of the Company, an entity that renders
      services to the Company, or an entity that has an ownership or business
      affiliation with any entity previously described in this Section
      2(b).

     

    (c)
      “Applicable Law” means the legal requirements relating to the
      administration of the Plan under applicable federal, state, local and foreign
      corporate, tax and securities laws, and the rules and requirements of any stock
      exchange or quotation system on which the Common Stock is listed or
      quoted.

     

    (d)
      “Award” means an Option, Stock Appreciation Right, Restricted Stock
      Award, Performance Unit or Performance Share, Cash Award or Other Stock Based
      Award granted under the Plan.

     

    (e)
      “Award Agreement” means the agreement, notice and/or terms or
      conditions by which an Award is evidenced, documented in such form (including
      by
      electronic communication) as may be approved by the Administrator.

     

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

    

    (g)
      “Cash Award” means an award payable in the form of cash.

     

    (h)
      “Change in Control” means the happening of any of the
      following:

     

    (i)   the
      consummation of any transaction (including, without limitation, any merger
      or
      consolidation) the result of which is that any "person" as such term is used
      in
      Section 13(d) and 14(d) of the Exchange Act (other than a Controlling
      Stockholder (as defined below), any trustee or other fiduciary holding
      securities under any employee benefit plan of the Company, or any company owned,
      directly or indirectly, by the shareholders of the Company in substantially
      the
      same proportions as their ownership of stock 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 more than 50% of the
      combined voting power of the Company's then outstanding securities entitled
      generally to vote in the election of the Board (other than the occurrence of
      any
      contingency);

     

    (ii)   the
      stockholders of the Company approve a merger or consolidation of the Company
      with any other corporation or entity, which is consummated, other than 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

    

    (iii)   the
      effective date of a complete liquidation of the Company or the consummation
      of
      an agreement for the sale or disposition by the Company of all or substantially
      all of the Company's assets, which in both cases are approved by the
      stockholders of the Company as may be required by law.

     

    For
      purposes hereof, the term "Controlling Stockholder" means (i) Applied Digital
      Solutions, Inc., (ii) any direct or indirect subsidiary of Applied Digital
      Solutions, Inc. whether or not existing on the date hereof and (iii) any direct
      or indirect subsidiary of Applied Digital Solutions, Inc. with which Applied
      Digital Solutions, Inc. merges or consolidates (irrespective of which entity
      is
      the surviving corporation) or to which Applied Digital Solutions, Inc. sells
      all
      or substantially all of its assets; provided that a Controlling Stockholder
      shall cease to be a Controlling Stockholder if any "person" as such term is
      used
      in Section 13(d) and 14(d) of the Exchange Act (other than another Controlling
      Stockholder) is or becomes (including, without limitation, as a result of a
      merger, consolidation, tender offer or otherwise) the "beneficial owner" (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of such Controlling Stockholder representing more than 50% of the
      combined voting power of such Controlling Stockholder's then outstanding
      securities entitled generally to vote in the election of the Board of Directors
      of the such Controlling Stockholder (other than upon the occurrence of any
      contingency).

     

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

     

    (j)
      “Committee” means a committee appointed by the Board in accordance with
      Section 4 of the Plan.

    

    (k)
      “Compensation Committee” means the Compensation Committee of the
      Board.

     

    (l)
      “Common Stock” means the common stock, $.01 par value, of the Company.
 

     

    (m)
      “Company” means VeriChip Corporation.

    

    (n)
      “Consultant” means any person, including an advisor, engaged by the
      Company or an Affiliate and who is compensated for such services, including
      without limitation non-Employee Directors. In addition, as used herein,
      "consulting relationship" shall be deemed to include service by a non-Employee
      Director as such.

    

    (o)
      “Continuous Status as an Employee or Consultant” means that the
      employment or consulting relationship is not interrupted or terminated by the
      Company or Affiliate, as applicable. Continuous Status as an Employee or
      Consultant shall not be considered interrupted in the case of (i) any leave
      of
      absence approved in writing by the Board, an Officer, or a person designated
      in
      writing by the Board or an Officer as authorized to approve a leave of absence,
      including sick leave, military leave, or any other personal leave; provided,
      however, that for purposes of Incentive Stock Options, any such leave may not
      exceed 90 days, unless reemployment upon the expiration of such leave is
      guaranteed by contract (including certain Company policies) or statute, or
      (ii)
      transfers between locations of the Company or between the Company, a Parent,
      a
      Subsidiary or successor of the Company; or (iii) a change in the status of
      the
      Grantee from Employee to Consultant or from Consultant to Employee.

     

    (p)
      “Covered Stock” means the Common Stock subject to an
      Award.

     

    (q)
      “Date of Grant” means the date on which the Administrator makes the
      determination granting the Award, or such other later date as is determined
      by
      the Administrator. Notice of the determination shall be provided to each Grantee
      within a reasonable time after the Date of Grant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (r)
      “Date of Termination” means the date on which a Grantee’s Continuous
      Status as an Employee or Consultant terminates.

     

    (s)
      “Director” means a member of the Board or a member of the Board of
      Directors of a Parent or Subsidiary.

    

    (t)
      “Disability” means total and permanent disability as defined in Section
      22(e)(3) of the Code.

     

    (u)
      “Employee” means any person, including Officers and Directors, employed
      by the Company or any Affiliate. Neither service as a Director nor payment
      of a
      director’s fee by the Company shall be sufficient to constitute “employment” by
      the Company.

     

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

    

    (w)
      “Fair Market Value” means the value of a share of Common Stock. If the
      Common Stock is actively traded on any national securities exchange, including,
      but not limited to, the NASDAQ Stock Market or the New York Stock Exchange,
      Fair
      Market Value shall mean the closing price at which sales of Common Stock shall
      have been sold on the date of determination, as reported by any such exchange
      selected by the Administrator on which the shares of Common Stock are then
      traded. If the shares of Common Stock are not actively traded on any such
      exchange, Fair Market Value shall mean the arithmetic mean of the bid and asked
      prices for the shares of Common Stock on the most recent trading date within
      a
      reasonable period prior to the determination date as reported by such exchange.
      If there are no bid and asked prices within a reasonable period or if the shares
      of Common Stock are not traded on any exchange as of the determination date,
      Fair Market Value shall mean the fair market value of a share of Common Stock
      as
      determined by the Administrator taking into account such facts and circumstances
      deemed to be material by the Administrator to the value of the Common Stock
      in
      the hands of the Grantee; provided that, for purposes of granting awards other
      than Incentive Stock Options, Fair Market Value of a share of Common Stock
      may
      be determined by the Administrator by reference to the average market value
      determined over a period certain or as of specified dates, to a tender offer
      price for the shares of Common Stock (if settlement of an award is triggered
      by
      such an event) or to any other reasonable measure of fair market value and
      provided further that, for purposes of granting Incentive Stock Options, Fair
      Market Value of a share of Common Stock shall be determined in accordance with
      the valuation principles described in the regulations promulgated under Code
      Section 422.

     

    (x)
      “Grantee” means an individual who has been granted an
      Award.

     

    (y)
      “Incentive Stock Option” means an Option intended to qualify as an
      incentive stock option within the meaning of Section 422 of the Code and the
      regulations promulgated thereunder.

     

    (z)
      “Nonqualified Stock Option” means an Option not intended to qualify as
      an Incentive Stock Option.

     

    (aa)
      “Officer” means a person who is an officer of the Company within the
      meaning of Section 16 of the Exchange Act and the rules and regulations
      promulgated thereunder.

     

    (bb)
      “Option” means a stock option granted under the Plan.

    

    (cc)
      “Other Stock Based Award” means an award that is valued in whole or in
      part by reference to, or is otherwise based on, Common Stock.

     

    (dd)
      “Parent” means a corporation, whether now or hereafter existing, in an
      unbroken chain of corporations ending with the Company if each of the
      corporations other than the Company holds at least 50 percent of the voting
      shares of one of the other corporations in such chain.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ee)
      “Performance Based Compensation” means compensation which meets the
      requirements of Section 162(m)(4)(C) of the Code.

     

    (ff)
      “Performance Based Restricted Stock” means an Award of Restricted Stock
      which meets the requirements of Section 162(m)(4)(C) of the Code, as
      described in Section 8(b) of the Plan.

     

    (gg)
      “Performance Period” means the time period during which the performance
      goals established by the Administrator with respect to a Performance Unit or
      Performance Share, pursuant to Section 9 of the Plan, must be met.

    

    (hh)
      “Performance Share” has the meaning set forth in Section 9 of the
      Plan.

     

    (ii)
      “Performance Unit” has the meaning set forth in Section 9 of the
      Plan.

     

    (jj)
      “Plan” means this VeriChip Corporation 2007 Stock Incentive
      Plan.

     

    (kk)
      “Restricted Stock Award” means Shares that are awarded to a Grantee
      pursuant to Section 8 of the Plan.

     

    (ll)
      “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
      successor to Rule 16b-3, as in effect when discretion is being exercised with
      respect to the Plan.

     

    (mm)
      “Share” means a share of the Common Stock, as adjusted in accordance
      with Section 13 of the Plan.

     

    (nn)
      “Stock Appreciation Right” or “SAR” means the right to receive
      an amount equal to the appreciation, if any, in the Fair Market Value of a
      Share
      from the date of the grant of the right to the date of its payment, as set
      forth
      in Section 7 of the Plan.

     

    (oo)
      “Subsidiary” means a corporation, domestic or foreign, of which not
      less than 50 percent of the voting shares are held by the Company or a
      Subsidiary, whether or not such corporation now exists or is hereafter organized
      or acquired by the Company or a Subsidiary.

     

    3.
      Stock Subject to the Plan. Subject to the provisions of Section 13 of
      the Plan and except as otherwise provided in this Section 3, the maximum
      aggregate number of Shares that may be subject to Awards under the Plan since
      the Plan became effective is 1,000,000 Shares, of which 1,000,000 can be issued
      as Incentive Stock Options. The Shares may be authorized, but unissued, or
      reacquired Common Stock.

     

    If
      an
      Award expires or becomes unexercisable without having been exercised in full
      the
      remaining Shares that were subject to the Award shall become available for
      future Awards under the Plan (unless the Plan has terminated). With respect
      to
      Options and Stock Appreciation Rights, if the payment upon exercise of an Option
      or SAR is in the form of Shares, the Shares subject to the Option or SAR shall
      be counted against the available Shares as one Share for every Share subject
      to
      the Option or SAR, regardless of the number of Shares used to settle the SAR
      upon exercise. 

     

    4.
      Administration of the Plan.

     

    (a)
      Procedure.

     

    (i)
      Multiple Administrative Bodies. The Plan may be administered by
      different bodies with respect to different groups of Employees and Consultants,
      provided however, that the administrative authority set

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    forth
      in
      items (vii), (viii), (ix), (xii), (xiii), (xiv), (xv), and (xvi) of Section
      4(b)
      below shall be exercised only by the Compensation Committee. Except as provided
      below, the Plan shall be administered by (A) the Board or (B) a committee
      designated by the Board and constituted to satisfy Applicable Law.

     

    (ii)
      Rule 16b-3. To the extent the Board or the Compensation Committee
      considers it desirable for transactions relating to Awards to be eligible to
      qualify for an exemption under Rule 16b-3, the transactions contemplated under
      the Plan shall be structured to satisfy the requirements for exemption under
      Rule 16b-3.

     

    (iii)
      Section 162(m) of the Code. To the extent the Board or the Compensation
      Committee considers it desirable for compensation delivered pursuant to Awards
      to be eligible to qualify for an exemption from the limit on tax deductibility
      of compensation under Section 162(m) of the Code, the transactions contemplated
      under the Plan shall be structured to satisfy the requirements for exemption
      under Section 162(m) of the Code.

    

    (iv)
      Authorization of Officers to Grant Options. In accordance with
      Applicable Law, the Board may, by a resolution adopted by the Board, authorize
      one or more Officers to designate Officers and Employees (excluding the Officer
      so authorized) to be Grantees of Options and determine the number of Options
      to
      be granted to such Officers and Employees; provided, however, that the
      resolution adopted by the Board so authorizing such Officer or Officers shall
      specify the total number and the terms (including the exercise price, which
      may
      include a formula by which such price may be determined) of Options such Officer
      or Officers may so grant.

     

    (b)
      Powers of the Administrator. Subject to the provisions of the Plan, and
      in the case of a Committee or an Officer, subject to the specific duties
      delegated by the Board to such Committee or Officer, the Administrator shall
      have the authority, in its sole and absolute discretion:

     

    (i)
      to
      determine the Fair Market Value of the Common Stock, in accordance with Section
      2(w) of the Plan;

     

    (ii)
      to
      select the Grantees to whom Awards will be granted under the Plan;

     

    (iii)
      to
      determine whether, when, to what extent and in what types and amounts Awards
      are
      granted under the Plan;

     

    (iv)
      to
      determine the number of shares of Common Stock to be covered by each Award
      granted under the Plan;

     

    (v)
      to
      determine the forms of Award Agreements, which need not be the same for each
      grant or for each Grantee, and which may be delivered electronically, for use
      under the Plan;

     

    (vi)
      to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any Award granted under the Plan. Such terms and conditions, which need
      not
      be the same for each grant or for each Grantee, include, but are not limited
      to,
      the exercise price, the time or times when Options and SARs may be exercised
      (which may be based on performance criteria), the extent to which vesting is
      suspended during a leave of absence, any vesting acceleration or waiver of
      forfeiture restrictions, and any restriction or limitation regarding any Award
      or the shares of Common Stock relating thereto, based in each case on such
      factors as the Administrator shall determine;

     

    (vii)
      to
      construe and interpret the terms of the Plan and Awards;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (viii)
      to
      prescribe, amend and rescind rules and regulations relating to the Plan,
      including, without limiting the generality of the foregoing, rules and
      regulations relating to the operation and administration of the Plan to
      accommodate the specific requirements of local and foreign laws and
      procedures;

     

    (ix)
      to
      modify or amend each Award (subject to Section 15 of the Plan). However, the
      Administrator may not modify or amend any outstanding Option or SAR to reduce
      the exercise price of such Option or SAR, as applicable, below the exercise
      price as of the Date of Grant of such Option or SAR. In addition, no Option
      or
      SAR may be granted in exchange for, or in connection with, the cancellation
      or
      surrender of an Option or SAR or other Award having a lower exercise
      price;

    

    (x)
      to
      authorize any person to execute on behalf of the Company any instrument required
      to effect the grant of an Award previously granted by the
      Administrator;

     

    (xi)
      to
      determine the terms and restrictions applicable to Awards;

     

    (xii)
      to
      make such adjustments or modifications to Awards granted to Grantees who are
      Employees of foreign Subsidiaries as are advisable to fulfill the purposes
      of
      the Plan or to comply with Applicable Law;

    

    (xiii)
      to
      delegate its duties and responsibilities under the Plan with respect to
      sub-plans applicable to foreign Subsidiaries, except its duties and
      responsibilities with respect to Employees who are also Officers or Directors
      subject to Section 16(b) of the Exchange Act;

     

    (xiv)
      to
      provide any notice or other communication required or permitted by the Plan
      in
      either written or electronic form; and

     

    (xv)
      to
      correct any defect or supply any omission, or reconcile any inconsistency in
      the
      Plan, or in any Award Agreement, in the manner and to the extent it shall deem
      necessary or expedient to make the Plan fully effective; and

     

    (xvi)
      to
      make all other determinations deemed necessary or advisable for administering
      the Plan.

     

    (c)
      Effect of Administrator's Decision. The Administrator’s decisions,
      determinations and interpretations shall be final and binding on all Grantees
      and any other holders of Awards.

     

    5.
      Eligibility and General Conditions of Awards.

     

    (a)
      Eligibility. Awards other than Incentive Stock Options may be granted
      to Employees and Consultants. Incentive Stock Options may be granted only to
      Employees. If otherwise eligible, an Employee or Consultant who has been granted
      an Award may be granted additional Awards.

     

    (b)
      Maximum Term. Subject to the following provision, the term during which
      an Award may be outstanding shall not extend more than ten years after the
      Date
      of Grant, and shall be subject to earlier termination as specified elsewhere
      in
      the Plan or Award Agreement.  

     

    (c)
      Award Agreement. To the extent not set forth in the Plan, the terms and
      conditions of each Award, which need not be the same for each grant or for
      each
      Grantee, shall be set forth in an Award Agreement. The Administrator, in its
      sole and absolute discretion, may require as a condition to any Award
      Agreement's effectiveness that the Award Agreement be executed by the Grantee,
      including by electronic signature or other electronic indication of acceptance,
      and that the Grantee agree to such further terms and conditions as specified
      in
      the Award Agreement. Except as otherwise provided in an Agreement, all
      capitalized terms used in the Agreement shall have the same meaning as in the
      Plan, and the Agreement shall be subject to all of the terms of the
      Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)
      Termination of Employment or Consulting Relationship. In the event that
      a Grantee’s Continuous Status as an Employee or Consultant terminates (other
      than upon the Grantee’s Retirement (defined below), death, Disability, or
      Termination by Employer Not for Cause (defined below)), then, unless otherwise
      provided by the Award Agreement, and subject to Section 13 of the Plan:
 

     

    (i)
      the
      Grantee may exercise his or her unexercised Option or SAR, but only within
      such
      period of time as is determined by the Administrator, and only to the extent
      that the Grantee was entitled to exercise it at the Date of Termination (but
      in
      no event later than the expiration of the term of such Option or SAR as set
      forth in the Award Agreement). In the case of an Incentive Stock Option, the
      Administrator shall determine such period of time (in no event to exceed three
      months from the Date of Termination) when the Option is granted. If, at the
      Date
      of Termination, the Grantee is not entitled to exercise his or her entire Option
      or SAR, the Shares covered by the unexercisable portion of the Option or SAR
      shall revert to the Plan. If, after the Date of Termination, the Grantee does
      not exercise his or her Option or SAR within the time specified by the
      Administrator, the Option or SAR shall terminate, and the Shares covered by
      such
      Option or SAR shall revert to the Plan;

     

    (ii)
      the
      Grantee’s Restricted Stock Awards, to the extent forfeitable immediately before
      the Date of Termination, shall thereupon automatically be
      forfeited;

     

    (iii)
      the
      Grantee’s Restricted Stock Awards that were not forfeitable immediately before
      the Date of Termination shall promptly be settled by delivery to the Grantee
      of
      a number of unrestricted Shares equal to the aggregate number of the Grantee’s
      vested Restricted Stock Awards; and

    

    (iv)
      any
      Performance Shares or Performance Units with respect to which the Performance
      Period has not ended as of the Date of Termination shall terminate immediately
      upon the Date of Termination.

     

    (e)
      Disability of Grantee. In the event that a Grantee’s Continuous Status
      as an Employee or Consultant terminates as a result of the Grantee’s Disability,
      then, unless otherwise provided by the Award Agreement, such termination shall
      have no effect on the Grantee's outstanding Awards. The Grantee's Awards shall
      continue to vest and remain outstanding and exercisable until they expire by
      their terms. In the case of an Incentive Stock Option, any option not exercised
      within 12 months of the date of termination of the Grantee’s Continuous Status
      as an Employee or Consultant due to Disability will be treated as a Nonqualified
      Stock Option.

     

    (f)
      Death of Grantee. In the event of the death of a Grantee, then, unless
      otherwise provided by the Award Agreement, such termination shall have no effect
      on Grantee's outstanding Awards. The Grantee's Awards shall continue to vest
      and
      remain outstanding and exercisable until they expire by their terms. In the
      case
      of an Incentive Stock Option, any option not exercised within 12 months of
      the
      date of termination of Grantee’s Continuous Status as an Employee or Consultant
      due to death will be treated as a Nonqualified Stock Option.

    

    (g)
      Retirement of Grantee. Except as otherwise provided in Section 5(g)(i)
      below, in the event that a Grantee’s Continuous Status as an Employee or
      Consultant terminates after the Grantee’s attainment of age 65 (hereinafter,
      "Retirement"), then, unless otherwise provided by the Award Agreement, such
      termination shall have no effect on Grantee's outstanding Awards. The Grantee's
      Awards shall continue to vest and remain outstanding and exercisable until
      they
      expire by their terms. In the case of an Incentive Stock Option, any option
      not
      exercised within 3 months of the termination of Grantee’s Continuous Status as
      an Employee or Consultant due to Retirement will be treated as a Nonqualified
      Stock Option.

    

    (h)
      Termination by Employer Not for Cause. In the event that a Grantee’s
      Continuous Status as an Employee or Consultant is terminated by the Employer
      without Cause (hereinafter, "Termination by Employer Not for Cause"), then,
      unless otherwise provided by the Award Agreement, such termination shall have
      no
      effect on Grantee's outstanding Awards. Grantee's Awards shall continue to
      vest
      and remain

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    outstanding
      and exercisable until they expire by their terms. In the case of an Incentive
      Stock Option, any option not exercised within 3 months of the date of will
      be
      treated as a Nonqualified Stock Option. In the case of a Grantee who is a
      Director, the Grantee's service as a Director shall be deemed to have been
      terminated without Cause if the Participant ceases to serve in such a position
      solely due to the failure to be reelected or reappointed, as the case may be,
      and such failure is not a result of an act or omission which would constitute
      Cause.

     

    (i)
      Termination for Cause. Notwithstanding anything herein to the contrary, if
      a Grantee is an Employee of the Company and is “Terminated for Cause”, as
      defined herein below, or violates any of the terms of their employment after
      they have become vested in any of their rights herein, the Grantee’s full
      interest in such rights shall terminate on the date of such termination of
      employment and all rights thereunder shall cease. Whether a Participant’s
      employment is Terminated for Cause shall be determined by the Board. Cause
      shall
      mean gross negligence, willful misconduct, flagrant or repeated violations
      of
      the Company’s policies, rules or ethics, a material breach by the Grantee of any
      employment agreement between the Grantee and the Company, intoxication,
      substance abuse, sexual or other unlawful harassment, disclosure of confidential
      or proprietary information, engaging in a business competitive with the Company,
      or dishonest, illegal or immoral conduct.

    

    (j)
      Nontransferability of Awards.

     

    (i)
      Except as provided in Section 5(j)(iii) below, each Award, and each right under
      any Award, shall be exercisable only by the Grantee during the Grantee’s
      lifetime, or, if permissible under Applicable Law, by the Grantee’s guardian or
      legal representative.

     

    (ii)
      Except as provided in Section 5(j)(iii) below, no Award (prior to the time,
      if
      applicable, Shares are issued in respect of such Award), and no right under
      any
      Award, may be assigned, alienated, pledged, attached, sold or otherwise
      transferred or encumbered by a Grantee otherwise than by will or by the laws
      of
      descent and distribution (or in the case of Restricted Stock Awards, to the
      Company) and any such purported assignment, alienation, pledge, attachment,
      sale, transfer or encumbrance shall be void and unenforceable against the
      Company or any Subsidiary; provided, that the designation of a beneficiary
      shall
      not constitute an assignment, alienation, pledge, attachment, sale, transfer
      or
      encumbrance.

     

    (iii)
      To
      the extent and in the manner permitted by Applicable Law, and to the extent
      and
      in the manner permitted by the Administrator, and subject to such terms and
      conditions as may be prescribed by the Administrator, a Grantee may transfer
      an
      Award to:

     

    (A)
      a
      child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
      spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law, or sister-in-law of the Grantee (including
      adoptive relationships);

     

    (B)
      any
      person sharing the employee’s household (other than a tenant or
      employee);

     

    (C)
      a
      trust in which persons described in (A) and (B) have more than 50 percent of
      the
      beneficial interest;

     

    (D)
      a
      foundation in which persons described in (A) or (B) or the Grantee control
      the
      management of assets; or

     

    (E)
      any
      other entity in which the persons described in (A) or (B) or the Grantee own
      more than 50 percent of the voting interests;

     

    provided
      such transfer is not for value. The following shall not be considered transfers
      for value: a transfer under a domestic relations order in settlement of marital
      property rights, and a transfer to an entity in which

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    more
      than
      50 percent of the voting interests are owned by persons described in (A) above
      or the Grantee, in exchange for an interest in such entity.

    

    6.
      Stock Options.

     

    (a)
      Limitations.

     

    (i)
      Each
      Option shall be designated in the Award Agreement as either an Incentive Stock
      Option or a Nonqualified Stock Option. Any Option designated as an Incentive
      Stock Option:

     

    (A)
      shall
      not have an aggregate Fair Market Value (determined for each Incentive Stock
      Option at the Date of Grant) of Shares with respect to which Incentive Stock
      Options are exercisable for the first time by the Grantee during any calendar
      year (under the Plan and any other employee stock option plan of the Company
      or
      any Parent or Subsidiary (“Other Plans”)), determined in accordance with the
      provisions of Section 422 of the Code, that exceeds $100,000 (the “$100,000
      Limit”);

     

    (B)
      shall, if the aggregate Fair Market Value of Shares (determined on the Date
      of
      Grant) with respect to the portion of such grant that is exercisable for the
      first time during any calendar year (“Current Grant”) and all Incentive Stock
      Options previously granted under the Plan and any Other Plans that are
      exercisable for the first time during a calendar year (“Prior Grants”) would
      exceed the $100,000 Limit, be exercisable as follows:

     

    (1)
      The
      portion of the Current Grant that would, when added to any Prior Grants, be
      exercisable with respect to Shares that would have an aggregate Fair Market
      Value (determined as of the respective Date of Grant for such Options) in excess
      of the $100,000 Limit shall, notwithstanding the terms of the Current Grant,
      be
      exercisable for the first time by the Grantee in the first subsequent calendar
      year or years in which it could be exercisable for the first time by the Grantee
      when added to all Prior Grants without exceeding the $100,000 Limit;
      and

     

    (2)
      If,
      viewed as of the date of the Current Grant, any portion of a Current Grant
      could
      not be exercised under the preceding provisions of this Section 6(a)(i)(B)
      during any calendar year commencing with the calendar year in which it is first
      exercisable through and including the last calendar year in which it may by
      its
      terms be exercised, such portion of the Current Grant shall not be an Incentive
      Stock Option, but shall be exercisable as a separate Option at such date or
      dates as are provided in the Current Grant.

     

    (ii)
      No
      Employee shall be granted, in any fiscal year of the Company, Options to
      purchase more than 300,000 Shares. The limitation described in this Section
      6(a)(ii) shall be adjusted proportionately in connection with any change in
      the
      Company’s capitalization as described in Section 13 of the Plan. If an Option is
      canceled in the same fiscal year of the Company in which it was granted (other
      than in connection with a transaction described in Section 13 of the Plan),
      the
      canceled Option will be counted against the limitation described in this Section
      6(a)(ii).

     

    (b)
      Term of Option. The term of each Option shall be stated in the Award
      Agreement; provided, however, that the term shall be 10 years from the date
      of
      grant or such shorter term as may be provided in the Award Agreement. Moreover,
      in the case of an Incentive Stock Option granted to a Grantee who, at the time
      the Incentive Stock Option is granted, owns stock representing more than 10
      percent of the voting power of all classes of stock of the Company or any Parent
      or Subsidiary, the term of the Incentive Stock Option shall be five years from
      the date of grant or such shorter term as may be provided in the Award
      Agreement.

     

    (c)
      Option Exercise Price and Consideration.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)
      Exercise Price. The per share exercise price for the Shares to be
      issued pursuant to exercise of an Option shall be determined by the
      Administrator and, except as otherwise provided in this Section 6(c)(i), shall
      be no less than 100 percent of the Fair Market Value per Share on the Date
      of
      Grant.

     

    (A)
      In
      the case of an Incentive Stock Option granted to an Employee who on the Date
      of
      Grant owns stock representing more than 10 percent of the voting power of all
      classes of stock of the Company or any Parent or Subsidiary, the per Share
      exercise price shall be no less than 110 percent of the Fair Market Value per
      Share on the Date of Grant.

     

    (B)
      Any
      Option that is (1) granted to a Grantee in connection with the acquisition
      (“Acquisition”), however effected, by the Company of another corporation or
      entity (“Acquired Entity”) or the assets thereof, (2) associated with an option
      to purchase shares of stock or other equity interest of the Acquired Entity
      or
      an affiliate thereof (“Acquired Entity Option”) held by such Grantee immediately
      prior to such Acquisition, and (3) intended to preserve for the Grantee the
      economic value of all or a portion of such Acquired Entity Option, may be
      granted with such exercise price as the Administrator determines to be necessary
      to achieve such preservation of economic value.

     

    (d)
      Waiting Period and Exercise Dates. At the time an Option is granted,
      the Administrator shall fix the period within which the Option may be exercised
      and shall determine any conditions that must be satisfied before the Option
      may
      be exercised. An Option shall be exercisable only to the extent that it is
      vested according to the terms of the Award Agreement.

     

    (e)
      Form of Consideration. The Administrator shall determine the acceptable
      form of consideration for exercising an Option, including the method of payment.
      In the case of an Incentive Stock Option, the Administrator shall determine
      the
      acceptable form of consideration at the time of grant. The acceptable form
      of
      consideration may consist of any combination of the following: cash; pursuant
      to
      procedures approved by the Administrator, through the sale of the Shares
      acquired on exercise of the Option through a broker-dealer to whom the Grantee
      has submitted an irrevocable notice of exercise and irrevocable instructions
      to
      deliver promptly to the Company the amount of sale or loan proceeds sufficient
      to pay the exercise price, together with, if requested by the Company, the
      amount of federal, state, local or foreign withholding taxes payable by the
      Grantee by reason of such exercise (a "cashless exercise") or; subject to the
      approval of the Administrator:

     

    (i)
      by
      the surrender of all or part of an Award (including the Award being
      exercised);

    

    (ii)
      by
      the tender to the Company of Shares owned by the Grantee and registered in
      his
      name having a Fair Market Value equal to the amount due to the
      Company;

    

    (iii)
      in
      other property, rights and credits deemed acceptable by the Administrator,
      including the Participant’s promissory note; or

     

    (iv)
      such
      other consideration and method of payment for the issuance of Shares to the
      extent permitted by Applicable Law and deemed acceptable by the
      Administrator.

     

    (f)
      Exercise of Option.

     

    (i)
      Procedure for Exercise; Rights as a Shareholder.

     

    (A)
      Any
      Option granted hereunder shall be exercisable according to the terms of the
      Plan
      and at such times and under such conditions as determined by the Administrator
      and set forth in the Award Agreement.

     

    (B)
      An
      Option may not be exercised for a fraction of a Share.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (C)
      An
      Option shall be deemed exercised when the Company receives:

     

    (1)
      written or electronic notice of exercise (in accordance with the Award Agreement
      and any action taken by the Administrator pursuant to Section 4(b) of the Plan
      or otherwise) from the person entitled to exercise the Option, and

    

    (2)
      full
      payment for the Shares with respect to which the Option is
      exercised.

     

    (D)
      Shares issued upon exercise of an Option shall be issued in the name of the
      Grantee or, if requested by the Grantee, in the name of the Grantee and his
      or
      her spouse. Until the stock certificate evidencing such Shares is issued (as
      evidenced by the appropriate entry on the books of the Company or of a duly
      authorized transfer agent of the Company), no right to vote or receive dividends
      or any other rights as a shareholder shall exist with respect to the Optioned
      Stock, notwithstanding the exercise of the Option. The Company shall issue
      (or
      cause to be issued) such stock certificate promptly after the Option is
      exercised. No adjustment will be made for a dividend or other right for which
      the record date is prior to the date the stock certificate is issued, except
      as
      provided in Section 13 of the Plan.

     

    (E)
      Exercising an Option in any manner shall decrease the number of Shares
      thereafter available, both for purposes of the Plan and for sale under the
      Option, by the number of Shares as to which the Option is
      exercised.

     

    7.
      Stock Appreciation Rights.

     

    (a)
      Grant of SARs. Subject to the terms and conditions of the Plan, the
      Administrator may grant SARs in tandem with an Option or alone and unrelated
      to
      an Option. Tandem SARs shall expire no later than the expiration of the
      underlying Option. In no event shall the term of a SAR exceed ten years from
      the
      Date of Grant.

    

    (b)
      Exercise of SARs. SARs shall be exercised by the delivery of a written
      or electronic notice of exercise (in accordance with the Award Agreement and
      any
      action taken by the Administrator pursuant to Section 4(b) of the Plan or
      otherwise), setting forth the number of Shares over which the SAR is to be
      exercised. Tandem SARs may be exercised:

     

    (i)
      with
      respect to all or part of the Shares subject to the related Option upon the
      surrender of the right to exercise the equivalent portion of the related
      Option;

     

    (ii)
      only
      with respect to the Shares for which its related Option is then exercisable;
      and

     

    (iii)
      only when the Fair Market Value of the Shares subject to the Option exceeds
      the
      exercise price of the Option.

     

    The
      value
      of the payment with respect to the tandem SAR may be no more than 100 percent
      of
      the difference between the exercise price of the underlying Option and the
      Fair
      Market Value of the Shares subject to the underlying Option at the time the
      tandem SAR is exercised.

     

    (c)
      Payment of SAR Benefit. Upon exercise of a SAR, the Grantee shall be
      entitled to receive payment from the Company in an amount determined by
      multiplying:

     

    (i)
      the
      excess of the Fair Market Value of a Share on the date of exercise over the
      SAR
      exercise price; by

     

    (ii)
      the
      number of Shares with respect to which the SAR is exercised;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    provided,
      that the Administrator may provide in the Award Agreement that the benefit
      payable on exercise of a SAR shall not exceed such percentage of the Fair Market
      Value of a Share on the Date of Grant, or any other limitation, as the
      Administrator shall specify. The payment upon exercise of a SAR shall be in
      Shares that have an aggregate Fair Market Value (as of the date of exercise
      of
      the SAR) equal to the amount of the payment.

     

    (d)
      No
      Employee shall be granted, in any fiscal year, SARs with respect to more than
      300,000 Shares. The limitation described in this Section 7(d) shall be adjusted
      proportionately in connection with any change in the Company’s capitalization as
      described in Section 13 of the Plan. If a SAR is canceled in the same fiscal
      year of the Company in which it was granted (other than in connection with
      a
      transaction described in Section 13 of the Plan), the canceled SAR will be
      counted against the limitation described in this Section 7(d).

     

    8.
      Restricted Stock Awards. Subject to the terms of the Plan, the
      Administrator may grant Restricted Stock Awards to any Eligible Recipient,
      in
      such amount and upon such terms and conditions as shall be determined by the
      Administrator.

     

    (a)
      Administrator Action. The Administrator acting in its sole and absolute
      discretion shall have the right to grant Restricted Stock to Eligible Recipients
      under the Plan from time to time. Each Restricted Stock Award shall be evidenced
      by a Restricted Stock Agreement, and each Restricted Stock Agreement shall
      set
      forth the conditions, if any, which will need to be timely satisfied before
      the
      grant will be effective and the conditions, if any, under which the Grantee’s
      interest in the related Stock will be forfeited. The Administrator may make
      grants of Performance-Based Restricted Stock and grants of Restricted Stock
      that
      are not Performance-Based Restricted Stock; provided, however, that only the
      Compensation Committee may serve as the Administrator with respect to grants
      of
      Performance-Based Restricted Stock.

     

    (b)
      Performance-Based Restricted Stock.

     

    (i)
      Effective Date. A grant of Performance-Based Restricted Stock shall be
      effective as of the date the Compensation Committee certifies that the
      applicable conditions described in Section 8(b)(iii) of the Plan have been
      timely satisfied.

    

    (ii)
      Share Limitation. No more than 300,000 shares of Performance-Based
      Restricted Stock may be granted to an Eligible Recipient in any calendar
      year.

    

    (iii)
      Grant Conditions. The Compensation Committee, acting in its sole and
      absolute discretion, may select from time to time Eligible Recipients to receive
      grants of Performance-Based Restricted Stock in such amounts as the Compensation
      Committee may, in its sole and absolute discretion, determine, subject to any
      limitations provided in the Plan. The Compensation Committee shall make each
      grant subject to the attainment of certain performance targets. The Compensation
      Committee shall determine the performance targets which will be applied with
      respect to each grant of Performance-Based Restricted Stock at the time of
      grant, but in no event later than 90 days after the commencement of the period
      of service to which the performance targets relate. The performance criteria
      applicable to Performance-Based Restricted Stock grants will be one or more
      of
      the following criteria: (1) stock price; (2) average annual growth in
      earnings per share; (3) increase in shareholder value; (4) earnings
      per share; (5) net income; (6) return on assets; (7) return on
      shareholders’ equity; (8) increase in cash flow; (9) operating profit
      or operating margins; (10) revenue growth of the Company; and
      (11) operating expenses. Each performance target applicable to a Cash Award
      intended to be Performance Based Compensation and the deadline for satisfying
      each such target shall be stated in the Agreement between the Company and the
      Employee. The Compensation Committee must certify in writing that each such
      target has been satisfied before the Performance Based Compensation award is
      paid.

     

    The
      related Restricted Stock Agreement shall set forth the applicable performance
      criteria and the deadline for satisfying the performance
      criteria.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)
      Forfeiture Conditions. The Compensation Committee may make each
      Performance-Based Restricted Stock grant (if, when and to the extent that the
      grant becomes effective) subject to one, or more than one, objective employment,
      performance or other forfeiture condition which the Compensation Committee
      acting in its sole and absolute discretion deems appropriate under the
      circumstances for Eligible Recipients generally or for a Grantee in particular,
      and the related Restricted Stock Agreement shall set forth each such condition
      and the deadline for satisfying each such forfeiture condition. A Grantee’s
      nonforfeitable interest in the Shares related to a Performance-Based Restricted
      Stock grant shall depend on the extent to which each such condition is timely
      satisfied. A Stock certificate shall be issued (subject to the conditions,
      if
      any, described in this Section 8(b)) to, or for the benefit of, the Grantee
      with
      respect to the number of shares for which a grant has become effective as soon
      as practicable after the date the grant becomes effective.

     

    (c)
      Restricted Stock Other Than Performance-Based Restricted
      Stock.

     

    (i)
      Effective Date. A Restricted Stock grant which is not a grant of
      Performance-Based Restricted Stock shall be effective (a) as of the date set
      by
      the Administrator when the grant is made or, if the grant is made subject to
      one, or more than one, condition, (b) as of the date the Administrator
      determines that such conditions have been timely satisfied.

     

    (ii)
      Grant Conditions. The Administrator acting in its sole and absolute
      discretion may make the grant of Restricted Stock which is not Performance-Based
      Restricted Stock to a Grantee subject to the satisfaction of one, or more than
      one, objective employment, performance or other grant condition which the
      Administrator deems appropriate under the circumstances for Eligible Recipients
      generally or for a Grantee in particular, and the related Restricted Stock
      Agreement shall set forth each such condition and the deadline for satisfying
      each such grant condition.

     

    (iii)
      Forfeiture Conditions. The Administrator may make each grant of
      Restricted Stock which is not a grant of Performance-Based Restricted Stock
      (if,
      when and to the extent that the grant becomes effective) subject to one, or
      more
      than one, objective employment, performance or other forfeiture condition which
      the Administrator acting in its sole and absolute discretion deems appropriate
      under the circumstances for Eligible Recipients generally or for a Grantee
      in
      particular, and the related Restricted Stock Agreement shall set forth each
      such
      condition and the deadline for satisfying each such forfeiture condition. A
      Grantee’s nonforfeitable interest in the Shares related to a grant of Restricted
      Stock which is not a grant of Performance-Based Restricted Stock shall depend
      on
      the extent to which each such condition is timely satisfied. A Stock certificate
      shall be issued (subject to the conditions, if any, described in this Section
      8(c)) to, or for the benefit of, the Grantee with respect to the number of
      shares for which a grant has become effective as soon as practicable after
      the
      date the grant becomes effective.

     

    (d)
      Dividends and Voting Rights. Each Restricted Stock Agreement shall
      state whether the Grantee shall have a right to receive any cash dividends
      which
      are paid with respect to his or her Restricted Stock after the date his or
      her
      Restricted Stock grant has become effective and before the first day that the
      Grantee’s interest in such stock is forfeited completely or becomes completely
      nonforfeitable. If a Restricted Stock Agreement provides that a Grantee has
      no
      right to receive a cash dividend when paid, such agreement shall set forth
      the
      conditions, if any, under which the Grantee will be eligible to receive one,
      or
      more than one, payment in the future to compensate the Grantee for the fact
      that
      he or she had no right to receive any cash dividends on his or her Restricted
      Stock when such dividends were paid. If a Restricted Stock Agreement calls
      for
      any such payments to be made, the Company shall make such payments from the
      Company’s general assets, and the Grantee shall be no more than a general and
      unsecured creditor of the Company with respect to such payments. If a stock
      dividend is declared on such a Share after the grant is effective but before
      the
      Grantee’s interest in such Stock has been forfeited or has become
      nonforfeitable, such stock dividend shall be treated as part of the grant of
      the
      related Restricted Stock, and a Grantee’s interest in such stock dividend shall
      be forfeited or shall become nonforfeitable at the same time as the Share with
      respect to which the stock dividend was paid is forfeited or becomes
      nonforfeitable. If a dividend is paid other than in cash or stock, the
      disposition of such dividend shall be made in accordance

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    with
      such
      rules as the Administrator shall adopt with respect to each such dividend.
      A
      Grantee shall have the right to vote the Shares related to his or her Restricted
      Stock grant after the grant is effective with respect to such Shares but before
      his or her interest in such Shares has been forfeited or has become
      nonforfeitable.

     

    (e)
      Satisfaction of Forfeiture Conditions. A Share shall cease to be
      Restricted Stock at such time as a Grantee’s interest in such Share becomes
      nonforfeitable under the Plan, and the certificate representing such share
      shall
      be reissued as soon as practicable thereafter without any further restrictions
      related to Section 8(b) or Section 8(c) and shall be transferred to the
      Grantee.

     

    9.
      Performance Units and Performance Shares.

     

    (a)
      Grant of Performance Units and Performance Shares. Subject to the terms
      of the Plan, the Administrator may grant Performance Units or Performance Shares
      to any Eligible Recipient in such amounts and upon such terms as the
      Administrator shall determine.

     

    (b)
      Value/Performance Goals. Each Performance Unit shall have an initial
      value that is established by the Administrator on the Date of Grant. Each
      Performance Share shall have an initial value equal to the Fair Market Value
      of
      a Share on the Date of Grant. The Administrator shall set performance goals
      that, depending upon the extent to which they are met, will determine the number
      or value of Performance Units or Performance Shares that will be paid to the
      Grantee.

     

    (c)
      Payment of Performance Units and Performance Shares.

     

    (i)
      Subject to the terms of the Plan, after the applicable Performance Period has
      ended, the holder of Performance Units or Performance Shares shall be entitled
      to receive a payment based on the number and value of Performance Units or
      Performance Shares earned by the Grantee over the Performance Period, to the
      extent the corresponding performance goals have been achieved.

     

    (ii)
      If a
      Grantee is promoted, demoted or transferred to a different business unit of
      the
      Company during a Performance Period, then, to the extent the Administrator
      determines appropriate, the Administrator may adjust, change or eliminate the
      performance goals or the applicable Performance Period as it deems appropriate
      in order to make them appropriate and comparable to the initial performance
      goals or Performance Period.

    

    (d)
      Form and Timing of Payment of Performance Units and Performance Shares.
      Payment of earned Performance Units or Performance Shares shall be made in
      a
      lump sum following the close of the applicable Performance Period. The
      Administrator may pay earned Performance Units or Performance Shares in cash
      or
      in Shares (or in a combination thereof) that have an aggregate Fair Market
      Value
      equal to the value of the earned Performance Units or Performance Shares at
      the
      close of the applicable Performance Period. Such Shares may be granted subject
      to any restrictions deemed appropriate by the Administrator. The form of payout
      of such Awards shall be set forth in the Award Agreement pertaining to the
      grant
      of the Award.

     

    10.
      Cash Awards. The Administrator may grant Cash Awards at such times and
      in such amounts as it deems appropriate.

     

    (a)
      Annual Limits. Notwithstanding the foregoing, the amount of any Cash
      Award in any Fiscal Year to any Grantee shall not exceed the greater of $100,000
      or 100% of his cash compensation (excluding any Cash Award under the Plan)
      for
      such Fiscal Year.

     

    (b)
      Restrictions. Cash Awards may be subject or not subject to conditions
      (such as an investment requirement), restricted or nonrestricted, vested or
      subject to forfeiture and may be payable currently or in the future or both.
      The
      Administrator may make grants of Cash Awards that are intended to be
      Performance

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Based
      Compensation and grants of Cash Awards that are not intended to be Performance
      Based Compensation; provided, however, that only the Compensation Committee
      may
      serve as the Administrator with respect to grants of Cash Awards that are
      intended to be Performance-Based Compensation

     

    The
      Compensation Committee shall determine the performance targets which will be
      applied with respect to each grant of Cash Awards that are intended to be
      Performance Based Compensation at the time of grant, but in no event later
      than
      90 days after the beginning of the period of service to which the performance
      targets relate. The performance criteria applicable to Performance Based
      Compensation awards will be one or more of the following: (1) stock price;
      (2) average annual growth in earnings per share; (3) increase in
      shareholder value; (4) earnings per share; (5) net income;
      (6) return on assets; (7) return on shareholders’ equity;
      (8) increase in cash flow; (9) operating profit or operating margins;
      (10) revenue growth of the Company; and (11) operating expenses. Each
      performance target applicable to a Cash Award intended to be Performance Based
      Compensation and the deadline for satisfying each such target shall be stated
      in
      the Agreement between the Company and the Employee. The Compensation Committee
      must certify in writing that each such target has been satisfied before the
      Performance Based Compensation award is paid.

    

    11.
      Other Stock Based Awards. The Administrator shall have the right to
      grant Other Stock Based Awards which may include, without limitation, the grant
      of Shares based on certain conditions, the payment of cash based on the
      performance of the Common Stock, and the grant of securities convertible into
      Shares.

    

    12.
      Tax Withholding. The Company shall deduct from all cash distributions
      under the Plan any taxes required to be withheld by federal, state, local or
      foreign government. Whenever the Company proposes or is required to issue or
      transfer Shares under the Plan, the Company shall have the right to require
      the
      recipient to remit to the Company an amount sufficient to satisfy any federal,
      state, local and foreign withholding tax requirements prior to the delivery
      of
      any certificate or certificates for such shares. A Grantee may pay the
      withholding tax in cash, or, if the applicable Award Agreement provides, a
      Grantee may elect to have the number of Shares he is to receive reduced by
      the
      smallest number of whole Shares that, when multiplied by the Fair Market Value
      of the Shares determined as of the Tax Date (defined below), is sufficient
      to
      satisfy federal, state, local and foreign, if any, withholding taxes arising
      from exercise or payment of a grant under the Plan (a “Withholding Election”). A
      Grantee may make a Withholding Election only if the Withholding Election is
      made
      on or prior to the date on which the amount of tax required to be withheld
      is
      determined (the “Tax Date”) by executing and delivering to the Company a
      properly completed notice of Withholding Election as prescribed by the
      Administrator. The Administrator may in its sole and absolute discretion
      disapprove and give no effect to the Withholding Election.

     

    13.
      Adjustments Upon Changes in Capitalization or Change in
      Control.

     

    (a)
      Changes in Capitalization. Subject to any required action by the
      shareholders of the Company, the number of Covered Shares, and the number of
      shares of Common Stock which have been authorized for issuance under the Plan
      but as to which no Awards have yet been granted or which have been returned
      to
      the Plan upon cancellation or expiration of an Award, as well as the price
      per
      share of Covered Stock, shall be proportionately adjusted for any increase
      or
      decrease in the number of issued shares of Common Stock resulting from a stock
      split, reverse stock split, stock dividend, combination or reclassification
      of
      the Common Stock, or any other increase or decrease in the number of issued
      shares of Common Stock effected without receipt of consideration by the Company;
      provided, however, that conversion of any convertible securities of the Company
      shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Board, whose determination in that respect
      shall be final, binding and conclusive. Except as expressly provided herein,
      no
      issuance by the Company of shares of stock of any class, or securities
      convertible into shares of stock of any class, shall affect, and no adjustment
      by reason thereof shall be made with respect to, the number or price of shares
      of Covered Stock.

     

    (b)
      Change in Control. In the event of a Change in Control, then the
      following provisions shall apply:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)
      all
      outstanding Options shall become fully exercisable, except to the extent that
      the right to exercise the Option is subject to restrictions established in
      connection with a SAR that is issued in tandem with the Option;

     

    (ii)
      all
      outstanding SARs shall become immediately payable, except to the extent that
      the
      right to exercise the SAR is subject to restrictions established in connection
      with an Option that is issued in tandem with the SAR;

     

    (iii)
      all
      Shares of Restricted Stock shall become fully vested;

     

    (iv)
      all
      Performance Shares and Performance Units shall be deemed to be fully earned
      and
      shall be paid out in such manner as determined by the Compensation Committee;
      and

     

    (v)
      all
      Cash Awards, Other Stock Based Awards and other Awards shall become fully vested
      and/or earned and paid out in such manner as determined by the Compensation
      Committee.

    

    In
      addition to the provisions of Section 13(b) above and to the extent not
      inconsistent therewith the Compensation Committee, in its sole discretion,
      may:
      (1) provide for the purchase of any Award for an amount of cash equal to the
      amount which could have been attained upon the exercise or realization of such
      Award had such Award been currently exercisable or payable; (2) make such
      adjustment to the Awards then outstanding as the Compensation Committee deems
      appropriate to reflect such transaction or change; and/or (3) cause the Awards
      then outstanding to be assumed, or new Awards substituted therefore, by the
      surviving corporation in such change.

     

    14.
      Term of Plan. The Plan shall become effective upon its approval by the
      shareholders of the Company. Such shareholder approval shall be obtained in
      the
      manner and to the degree required under applicable federal and state law. The
      Plan shall continue in effect until the tenth anniversary of adoption of the
      Plan by the Board, unless terminated earlier under Section 15 of the
      Plan.

     

    15.
      Amendment and Termination of the Plan.

     

    (a)
      Amendment and Termination. The Board may at any time amend, alter,
      suspend or terminate the Plan.

     

    (b)
      Shareholder Approval. The Company shall obtain shareholder approval of
      any Plan amendment to the extent necessary and desirable to comply with Rule
      16b-3 or with Section 422 or Section 162(m) of the Code (or any successor rule
      or statute) or other Applicable Law. Such shareholder approval, if required,
      shall be obtained in such a manner and to such a degree as is required by the
      Applicable Law.

    

    (c)
      Effect of Amendment or Termination. No amendment, alteration,
      suspension or termination of the Plan shall impair the rights of any Grantee,
      unless mutually agreed otherwise between the Grantee and the Administrator,
      which agreement must be in writing and signed by the Grantee and the
      Company.

     

    16.
      Conditions Upon Issuance of Shares.

    

    (a)
      Legal Compliance. Shares shall not be issued pursuant to an Award
      unless the exercise, if applicable, of such Award and the issuance and delivery
      of such Shares shall comply with all relevant provisions of law, including,
      without limitation, the Securities Act of 1933, as amended, the Exchange Act,
      the rules and regulations promulgated thereunder, Applicable Law, and the
      requirements of any stock exchange or quotation system upon which the Shares
      may
      then be listed or quoted, and any insider trading policy adopted by the Company,
      and shall be further subject to the approval of counsel for the Company with
      respect to such compliance.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      Investment Representations. As a condition to the exercise of an Award,
      the Company may require the person exercising such Award to represent and
      warrant at the time of any such exercise that the Shares are being purchased
      only for investment and without any present intention to sell or distribute
      such
      Shares if, in the opinion of counsel for the Company, such a representation
      is
      required.

     

    17.
      Liability of Company.

     

    (a)
      Inability to Obtain Authority. The inability of the Company to obtain
      authority from any regulatory body having jurisdiction, which authority is
      deemed by the Company’s counsel to be necessary to the lawful issuance and sale
      of any Shares hereunder, shall relieve the Company of any liability in respect
      of the failure to issue or sell such Shares as to which such requisite authority
      shall not have been obtained.

     

    (b)
      Grants Exceeding Allotted Shares. If the Covered Stock covered by an
      Award exceeds, as of the date of grant, the number of Shares that may be issued
      under the Plan without additional shareholder approval, such Award shall be
      void
      with respect to such excess Covered Stock, unless shareholder approval of an
      amendment sufficiently increasing the number of Shares subject to the Plan
      is
      timely obtained in accordance with Section 15 of the Plan.

     

    18.
      Reservation of Shares. The Company, during the term of the Plan, will
      at all times reserve and keep available such number of Shares as shall be
      sufficient to satisfy the requirements of the Plan.

     

    19.
      Rights of Employees. Neither the Plan nor any Award shall confer upon a
      Grantee any right with respect to continuing the Grantee’s employment
      relationship with the Company, nor shall they interfere in any way with the
      Grantee’s right or the Company’s right to terminate such employment relationship
      at any time, with or without cause.

     

    20.
      Sub-plans for Foreign Subsidiaries. The Board may adopt sub-plans
      applicable to particular foreign Subsidiaries. All Awards granted under such
      sub-plans shall be treated as grants under the Plan. The rules of such sub-plans
      may take precedence over other provisions of the Plan, with the exception of
      Section 3, but unless otherwise superseded by the terms of such sub-plan, the
      provisions of the Plan shall govern the operation of such sub-plan.

     

    21.
      Construction. The Plan shall be construed under the laws of the State
      of Delaware, to the extent not preempted by federal law, without reference
      to
      the principles of conflict of laws.

    

    22.
      Certain Limitations on Awards to Ensure Compliance with Code Section
      409A. For purposes of this Plan, references to an award term or event
      (including any authority or right of the Company or a Grantee) being "permitted"
      under Code Section 409A mean, for a 409A Award (meaning an Award that
      constitutes a deferral of compensation under Code Section 409A and regulations
      thereunder), that the term or event will not cause the Grantee to be liable
      for
      payment of interest or a tax penalty under Code Section 409A and, for a Non-409A
      Award (meaning all Awards other than 409A Awards), that the term or event will
      not cause the Award to be treated as subject to Code Section 409A. Other
      provisions of the Plan notwithstanding, the terms of any 409A Award and any
      Non-409A Award, including any authority of the Company and rights of the Grantee
      with respect to the Award, shall be limited to those terms permitted under
      Code
      Section 409A, and any terms not permitted under Code Section 409A shall be
      automatically modified and limited to the extent necessary to conform with
      Code
      Section 409A. For this purpose, other provisions of the Plan notwithstanding,
      the Company shall have no authority to accelerate distributions relating to
      409A
      Awards in excess of the authority permitted under Code Section 409A, and any
      distribution subject to Code Section 409A(a)(2)(A)(i) (separation from service)
      to a "key employee" as defined under Code Section 409A(a)(2)(B)(i), shall not
      occur earlier than the earliest time permitted under Code Section
      409A(a)(2)(B)(i).

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