Document:

Exhibit 10.5 - Executive Agreement with James Douglas Frater.

Exhibit 10.5

EXECUTIVE SERVICES AGREEMENT

THIS EXECUTIVE SERVICES AGREEMENT is made effective this 1st day of May, 2006 (this "Agreement"), between Global Green Solutions Inc., a Nevada Corporation (the "Client"); and Sigma Consult b vba a Belgian limited liability company ("the Service Provider") and James Douglas Frater (the "Executive").

RECITALS

A.     The Client is engaged in the business of implementing technology internationally to reduce gas emissions determined to be hazardous to the environment; 

B.     An international corporate presence is required and for that purpose, the Client requires an office in Europe and an Executive to assume the position of Managing Director and Chief Executive Officer; 

C.     The Service Provider has an office in Belgium and is 100% beneficially owned and controlled by the Executive; and

D.     The Service Provider has within the scope of its contractual arrangements with the Executive and with the consent of the Executive agreed to provide office premises in Europe and the Services of the Executive to serve the client as hereinafter provided; and the Service Provider and with the consent of the Executive agreed to provide the services of the Executive to serve the Client as hereinafter provided.  

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

1.     Services.  The Service Provider agrees to offer the services of the Executive, as the Managing Director and Chief Executive Officer of the Client and to provide office premises for the Client located at Vossemberg 1, Tervuren, 3080, Brussels, Belgium.  The Executive will report to the Board of Directors of the Client.   The Executive shall assume fiduciary obligations to the Client as prescribed by US corporate law and US Securities legislation.  The Executive will devote full time and attention to achieving the purposes and discharging the responsibilities indicated on Exhibit A to this Agreement.  The Executive will comply with all rules, policies and procedures of the Executive as modified from time to time.  The Executive will perform all of the Executive's responsibilities in compliance with all applicable laws and will ensure that the operations that the Executive manages are in compliance with all applicable laws.  During the Executive's and the Service Provider's tenure with the Client, the Executive will not engage in any other business activity (unless otherwise agreed) which, in the reasonable judgment of the Board of Directors of the Client, conflicts with the duties of

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the Executive under this Agreement, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

2.     Term of Engagement.  The term of engagement of the Service Provider will be for the minimum three year period commencing on the 1st day of May, 2006 and ending the 31st day of April, 2009 ("the Term"), unless sooner terminated in accordance with the terms and conditions of this Agreement.  If the term continues after the end of the Term, such term will continue on the terms and conditions set forth in this Agreement, but will be terminable by either party at any time with or without cause or advance notice. 

3.     Compensation and Stock Options.  For the duration of the Service Provider's tenure's hereunder, the Service Provider either alone or as directed by the Service Provider in combination with the Executive will be entitled to compensation which will be computed and paid pursuant to the following subparagraphs.

3.1     Base Rate.  The Client will pay the Service Provider a base compensation ("Base Compensation") at an annual rate of 78,000 Euros payable in 12 monthly installments at the end of each calendar month and within five (5) days after receipt of an invoice from the Service Provider.  The Service Provider's Base Compensation will be reviewed annually by the Board of Directors of the Client during the term of the Service Provider's tenure and may be adjusted in the sole discretion of the Client effective May 1 of each year commencing May 1, 2007, but will not be reduced by the Client unless a material adverse change in the financial condition or operations of the Client has occurred and as agreed with the Service Provider and the Executive. 

3.2     Rent.     In addition to the Base Compensation, the client will pay the Service Provider rent for the serviced office premises provided by the Service Provider at the address aforesaid at the annual rate of 14,400 Euros payable in 12 monthly installments at the end of each calendar month and within five (5) days after receipt of an invoice from the Service Provider.   The monthly rent should be inclusive of costs and expenses for office phone and fax rental and call charges

3.3     Incentive Bonus.  The Service Provider will participate in the Client's incentive bonus plan (the "Bonus Plan") and will receive annually within 6 months after completion of each fiscal year a performance bonus equal to 1% of the net profits of the Client as determined by the Client's auditors annually in its financial statements prepared under US GAP.    The Service Provider and the Executive may also participate in other bonus or incentive plans adopted by the Client  that are applicable to the Service Provider's position, as bonus and incentive plans may be changed from time to time, but nothing herein shall require the adoption or maintenance of any such plan.

3.4     Equity Subscription Option.  In addition to other forms of compensation provided for herein, the Service Provider for its own account or for the account of the Executive or for the joint account of both shall have a subscription option (the "Subscription Option") to purchase in the 

 

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aggregate 4,250,000 common shares of the Client at the price of $0.00001 per share which Subscription Option shall vest in four equal 6 month intervals with the first portion of the Subscription Option being exercisable after October 31, 2006.  Thereafter the subscription option shall vest in equal installments of 1,062,500 shares each, each and every 6 months thereafter, until the Subscription Option has fully vested.  Any shares issued by the Client pursuant to the exercise of the Subscription Option shall be issued subject to securities resale restrictions prescribed under Rule 144, promulgated under the 1933 Securities Act of the United States of America.

4.     Other Benefits.

4.1     Certain Benefits.  The Service Provider and the Executive will be eligible to participate in all corporate benefit programs established by the Client that are applicable to management personnel such as medical, pension, disability and life insurance plans on a basis commensurate with the Executive's position and in accordance with the Client's policies from time to time, but nothing herein shall require the adoption or maintenance of any such plan.

4.2     Vacations, Holidays and Expenses.  For the duration of the Service Provider's tenure hereunder, the Executive will be provided with such holidays, sick leave and vacation as the Client makes available to its European based management level employees generally.  The Client will reimburse the Service Provider or the Executive in accordance with company policies and procedures for reasonable expenses necessarily incurred in the performance of duties hereunder against appropriate receipts and vouchers indicating the specific business purpose for each such expenditure.   On signing of this agreement the Service Provider will be paid a one time non accountable payment of 10,000 Euros for miscellaneous joining and set-up expenses, anticipated to be incurred by the Service Provider for the account of the Client.

5.     Termination or Discharge by the Client. 

5.1     For Cause.  The Client will have the right to immediately terminate the Service Provider's services and this Agreement for cause.  "Cause" means:  any material breach of this Agreement by the Executive, including, without limitation, breach of the Service Provider's or the Executive's covenants in Sections 7, 8, 9 and 10; any failure to perform assigned job responsibilities that continues unremedied for a period of thirty (30) days after written notice to the Service Provider by the Client; conviction of a felony or failure to contest prosecution for a felony; violation of any statute, rule or regulation, any of which in the judgment of the Client is harmful to the business or to the Client's reputation; unethical practices; dishonesty; disloyalty; or any reason that would constitute cause under the laws of Nevada or the European Union.  Upon termination of the Service Provider's services hereunder for cause or upon the death or disability of the Executive, neither the Service Provider nor the Executive will have any rights to any unvested benefits or any other compensation or payments after the termination date or the last day of the month in which the Executive's death or disability occurred.  For purposes of this Agreement, "disability" means the incapacity or inability of the Executive whether due to accident, sickness or otherwise, as determined by a medical doctor 

 

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acceptable to the Board of Directors of the Client and confirmed in writing by such doctor, to perform the essential functions of Executive's position under this Agreement, with or without reasonable accommodation (provided that no accommodation that imposes undue hardship on the Client will be required) for an aggregate of ninety (90) days during any period of one hundred eighty (180) consecutive days.

5.2     Without Cause.  The Client may terminate the Service Provider's tenure under this Agreement without cause on 6 months notice; provided, however, that the Client will continue to pay, as severance pay, the Service Provider's Base Rate and Rent Compensation at the rate in effect on the termination date through the expiration of the six month notice period and including any unpaid expenses claims.  Upon termination, the Executive will have rights to any unvested benefits for the period of the 6 month notice period.

6.     Termination by the Service Provider.  The Service Provider may terminate the Service Provider's tenure and the services of the Executive under this Agreement for any reason provided that the Service Provider gives the Client at least thirty (30) days notice in writing.  The Client may, at its option, relieve the Service Provider and the Executive of all duties and authority after notice of termination has been provided.  Upon termination, the Executive will have no rights to any unvested benefits or any other compensation or payments from the date of notice. All compensation, payments and unvested benefits will cease after the thirty (30) day notice period.

7.     Covenant Not To Compete.  During the Service Provider's tenure hereunder and for a period expiring three (3) years after the termination of the Service Provider's tenure or the Executive's active involvement with the Client, the Service Provider and the Executive covenant and agree with the Client that neither will:

7.1.     Directly, indirectly, or otherwise, own, manage, operate, control, serve as a consultant to, be employed by, participate in, or be connected, in any manner, with the ownership, management, operation or control of any business that directly competes with the Client's business. 

7.2     Hire, offer to hire, entice away or in any other manner persuade or attempt to persuade any officer, employee or agent of the Client or any of its affiliates to alter or discontinue a relationship with the Client or to do any act that is inconsistent with the interests of the Client or any of its affiliates;

7.3     Directly or indirectly solicit, divert, take away or attempt to solicit, divert or take away any customers of the Client or any of its affiliates; or

7.4.     Directly or indirectly solicit, divert, or in any other manner persuade or attempt to persuade any supplier of the Client or any of its affiliates to alter or discontinue its relationship with the Client or any of its affiliates.

 

 

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The Client and the Service Provider and the Executive agree that: this provision does not impose an undue hardship on the Service Provider and the Executive and is not injurious to the public; that this provision is necessary to protect the business of the Client and its affiliates; the nature of the Service Provider's responsibilities with the Client under this Agreement require the Service Provider and the Executive to have access to confidential information which is valuable and confidential to all of the business; the scope of this Section 7 is reasonable in terms of length of time and geographic scope; and adequate consideration supports this Section 7, including consideration herein. 

8.     Confidential Information.  The Service Provider and the Executive recognize that the Client's business and continued success depend upon the use and protection of confidential and proprietary business information, including, without limitation, the information and technology developed by or available through licenses to the Client related to its decision support and expert systems, to which the Service Provider and the Executive have access (all such information being "Confidential Information").  For purposes of this Agreement, the phrase "Confidential Information" includes for the Client and its current or future subsidiaries and affiliates, without limitation, and whether or not specifically designated as confidential or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets and customers; financial information; information concerning the development of new products and services; and technical and non-technical data related to software programs, designs, specifications, compilations, inventions, improvements, methods, processes, procedures and techniques; provided, however, that the phrase does not include information that (a) was, or at any time becomes, available in the public domain other than through a violation of this Agreement; or (b) is furnished to the Service Provider or the Executive by a third party not under an obligation of confidentiality to the Client.  The Service Provider and the Executive agree that during the Service Provider's tenure and after termination of the tenure irrespective of cause, the Service Provider and the Executive will use Confidential Information only for the benefit of the Client and will not directly or indirectly use or divulge, or permit others to use or divulge, any Confidential Information for any reason, except as authorized by the Client.  The Service Provider's and the Executive's obligation under this Agreement is in addition to any obligations the Service Provider and the Executive have under applicable law.  The Service Provider and the Executive agree to deliver to the Client immediately upon termination of Executive's tenure with the Service Provider or the Client, or at any time the Client so requests, all tangible items containing any Confidential Information (including, without limitation, all memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes taken by or provided to the Service Provider and the Executive, and any other documents or items of a confidential belonging  to the Client), together with all copies of such material in the Service Provider's and the Executive's  possession or control.  The Service Provider and the Executive agree that in the course of their contractual relationship with the Client, neither the Service Provider nor the Executive will violate in any way the rights that any entity has with regard to trade secrets or proprietary or confidential information.  The Service Provider's and the Executive's obligations under this Section 8 are indefinite in term and shall survive the termination of this Agreement.

 

 

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9.     Work Product and Copyrights.  The Service Provider and the Executive agree that all right, title and interest in and to the materials resulting from the performance of the Service Provider's and the Executive's duties with the Client and all copies thereof, including works in progress, in whatever media, (the "Work"), will be and remain the Client's upon their creation.  The Service Provider and the Executive will mark all Work with the Client's copyright or other proprietary notice as directed by the Client.   The Service Provider and the Executive further agree:

9.1     To the extent that any portion of the Work constitutes a work protectable under the copyright laws of the United States, Canada or the European Community (the "Copyright Law"), that all such Work will be considered a "work made for hire" as such term is used and defined in the Copyright Law and that the Client will be considered the "author" of such portion of the Work and the sole and exclusive owner throughout the world of copyright therein; and

9.2     If any portion of the Work does not qualify as a "work made for hire" as such term is used and defined in the Copyright Law, that the Service Provider and the Executive hereby assign and agree to assign to the Client , without further consideration, all right, title and interest in and to such Work or in any such portion thereof and any copyright therein and further agrees to execute and deliver to the Client, upon request, appropriate assignments of such Work and copyright therein and such other documents and instruments as the Client may request to fully and completely assign such Work and copyright therein to the Client, its successors or nominees, and that the Service Provider and the Executive hereby appoint the Client as attorney-in-fact to execute and deliver any such documents on the Service Provider's and the Executive's behalf in the event the Service Provider or the Executive should fail or refuse to do so within a reasonable period following the Client's request.

10.     Inventions and Patents.  For purposes of this Agreement, "Inventions" includes, without limitation, information, inventions, contributions, improvements, ideas, or discoveries, whether patentable or not and whether or not conceived or made during work hours.  The Service Provider and the Executive agrees that all Inventions conceived or made by the Service Provider and the Executive during the tenure of the Service Provider with the Client belong to the Client, including, without limitation, research and product development, and projected business of the Client or its affiliated companies.  Accordingly, the Service Provider and the Executive will:

10.1     Make adequate written records of such Inventions, which records will be the Client's property;

10.2     Assign to the Client, at its request, any rights the Service Provider and the Executive may have to such Inventions for the U.S. and all foreign countries;

10.3     Waive and agree not to assert any moral rights the Service Provider and the Executive may have or acquire in any Inventions and agree to provide written waivers from time to 

 

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time as requested by the Client; and

10.4     Assist the Client (at the Client's expense) in obtaining and maintaining patents or copyright registrations with respect to such Inventions.

The Service Provider and the Executive understand and agree that the Client or its designee will determine, in its sole and absolute discretion, whether an application for patent will be filed on any Invention that is the exclusive property of the Client as set forth above, and whether such an application will be abandoned prior to issuance of a patent.  The Client will pay to the Service Provider and the Executive, either during or after the term of this Agreement, the following amounts if the Service Provider and the Executive is sole inventor, or the Service Provider's and the Executive's proportionate share if the Service Provider and the Executive are joint inventor: $750 upon filing of the initial application for patent on such Invention; and $1,500 upon issuance of a patent resulting from such initial patent application, provided Employee is am named as an inventor in the patent.

11.     Remedies.  Notwithstanding other provisions of this Agreement regarding dispute resolution, the Service Provider and the Executive agree that the Service Provider and the Executive violation of any of Sections 7, 8, 9 or 10 of this Agreement would cause the Client irreparable harm which would not be adequately compensated by monetary damages and that an injunction may be granted by any court or courts having jurisdiction, restraining the Service Provider and the Executive from violation of the terms of this Agreement, upon any breach or threatened breach of tenure of the obligations set forth in any of Sections 7, 8, 9 or 10.  The preceding sentence shall not be construed to limit the Client from any other relief or damages to which it may be entitled as a result of the Service Provider's and the Executive's breach of any provision of this Agreement, including Sections 7, 8, 9 or 10.  The Service Provider and the Executive also agree that a violation of any of Sections 7, 8, 9 or 10 would entitle the Client, in addition to all other remedies available at law or equity, to recover from the Service Provider and the Executive any and all funds, including, without limitation, wages and salary, which will be held by the Service Provider and the Executive in constructive trust for the Client, received by the Service Provider and the Executive in connection with such violation.

12.       Dispute Resolution.  The terms of this agreement shall be adjudicated upon in accordance with the Laws of the State of Nevada, USA and each of the parties hereto agree to atturn to the jurisdiction of the Federal Court of Nevada.

13.     Fees.  Unless otherwise agreed, the prevailing party will be entitled to its costs and attorneys' fees incurred in any litigation relating to the interpretation or enforcement of this Agreement.

14.     Representation of the Service Provider and the Executive.  The Service Provider and the Executive represents and warrants to the Client that the Service Provider and the Executive are free to enter into this Agreement and have no commitment, arrangement or understanding to or with any party that restrains or is in conflict with the Service Provider's and the Executive's 

 

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performances of the covenants, services and duties provided for in this Agreement.  The Service Provider and the Executive agree to indemnify the Client and to hold it harmless against any and all liabilities or claims arising out of any unauthorized act or acts by the Service Provider and the Executive that, the foregoing representation and warranty to the contrary notwithstanding, are in violation, or constitute a breach, of any such commitment, arrangement or understanding.

15.     Assignability.  During the Service Provider's and the Executive's tenure this Agreement may not be assigned by either party without the written consent of the other; provided, however, that the Client may assign its rights and obligations under this Agreement without the Service Provider's and the Executive's consent to a successor by sale, merger or liquidation, if such successor carries on the Business substantially in the form in which it is being conducted at the time of the sale, merger or liquidation.  This Agreement is binding upon the Service Provider and the Executive, the Service Provider's and the Executive's heirs, personal representatives and permitted assigns and on the Client, its successors and assigns.

16.     Notices.  Any notice required or permitted to be given hereunder are sufficient if in writing and delivered by hand, by facsimile or by  registered or certified mail, to the Service Provider and the Executive at Vossemberg 1, Tervuren, 3080, Brussels, Belgium or to the President of the Client at 880-609 Granville Street, Vancouver, BC, V7Y 1G5

17.     Severability.  If any provision of this Agreement or compliance by any of the parties with any provision of this Agreement constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is in violation of  law, unenforceable or void, shall be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law.  If such modification is not possible, said provision, to the extent that it is in violation of law, unenforceable or void, shall be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on the parties.

18.     Waivers.  No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial waiver of a breach of any provision of this Agreement operate or be construe as a waiver of any subsequent breach; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by law.

19.     Governing Law.  The validity, construction and performance of this Agreement shall be governed by the laws of Nevada.

20.     Entire Agreement.  This instrument contains the entire agreement of the parties with respect to the relationship between the Service Provider and the Executive and the Clinet and supersedes all prior agreements and understandings, and there are no other representations or agreements other than as stated in this Agreement related to the terms and conditions of the Service 

 

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Provider's and the Executive's tenure.  This Agreement may be changed only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought, and any such modification will be signed by the President of the Client. 

IN WITNESS WHEREOF, the parties have duly signed and delivered this Agreement as of the day and year first above written.

	
GLOBAL GREEN SOLUTIONS INC.

	 
	 
	
By
	
R. M. BAKER

	 	
Name: Robert M. Baker

	 	
Title:   Secretary

	 
	 
	
SIGMA CONSULT bvba

	 
	
By
	
JAMES D. FRATER

	 	
Name: James Douglas Frater

	 	
Title:   Managing Partner

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

DUTIES OF JAMES DOUGLAS FRATER

 

The duties to be carried out by James Douglas Frater are to be determined at the first Board of Directors Meeting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10EXHIBIT 10.1 

EPIC BANCORP 2006 EMPLOYEE STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN AND RELATED INCENTIVE AND NON-INCENTIVE STOCK OPTION AGREEMENTS

 

  

EPIC BANCORP

2006 EMPLOYEE STOCK OPTION AND
 STOCK APPRECIATION RIGHT PLAN

(Adopted by Board of Directors [April 17, 2006])
 (Approved by the Shareholders [June 12, 2006])

I.       PURPOSE

          The purpose of this 2006 Employee Stock Option and Stock Appreciation Right Plan (“Plan”) is to provide a means whereby employees of EPIC Bancorp (the “Corporation”), or of other corporations which are or may hereafter become subsidiaries of the Corporation, within the meaning of Section 425(f) of the Internal Revenue Code of 1986, as amended (“Subsidiaries”), may be given an opportunity to purchase shares of common stock (“Common Stock”) of the Corporation.  The Plan is intended to advance the interests of the Corporation and the Subsidiaries by encouraging stock ownership on the part of key employees, by enabling the Corporation and the Subsidiaries to secure and retain the services of highly qualified persons as employees, and by providing such employees with an additional incentive to make every effort to enhance the success of the Corporation and the
Subsidiaries.

II.      AGGREGATE LIMITATION ON AWARDS 

          Subject to adjustment as provided in subsection 7(g) of this Plan, authorized and unissued shares of Common Stock that may be issued under the Plan shall be One Hundred Fifty Thousand Five Hundred Seventy-Seven (150,577) shares, plus any shares of Common Stock subject to options outstanding under the Company’s Amended and Restated Employee Stock Option and Stock Appreciation Right Plan that expire or otherwise terminate, in whole or in part, without having been exercised in full and that again become available for issuance.  The maximum number of shares of common stock that may be issued under the Plan is Five Hundred Twenty-Four Thousand Nine Hundred Twenty-Three (524,923).  For purposes of calculating the aggregate number of shares of Common Stock which may be issued under the Plan:

                    A.          Shares of Common Stock applicable to the unexercised portions of options which have terminated or expired, except as provided in subsection (b) below, may again be made subject to stock options (“Options”) under the Plan, if at such time Options may still be granted under the Plan; 

                    B.          Shares covered by the Options terminated upon the exercise of a Stock Appreciation Right shall not be available for granting further Options under this Plan; and

                    C.          Only the net shares issued (including the shares, if any, withheld for tax withholding requirements or used to pay the exercise price of an Option) shall be counted when shares of Common Stock are used as full or partial payment for shares issued upon exercise of an Option.

                            D.          At
        no time shall the total number of shares of common Stock issuable upon
        exercise of all outstanding options and the total number of shares of
        Common Stock provided for under any stock bonus or similar plan of the
        Company exceed thirty percent (30%) of the then outstanding shares of
        Common Stock, calculated in accordance with the conditions and
        exclusions of Rule 260.140.45 of the California Code of Regulations, or
        successor statute or regulation.

 

  

III.    ADMINISTRATION

                    A.          The Plan shall be administered by the Board of Directors of the Corporation (the “Board”), or by a committee of the Board to which such administration is delegated by the Board (the “Committee”).  Such Committee shall be comprised of three (3) or more individual directors.  Minutes of the meetings of the Board or the Committee with respect to the grant of Options and the administration of the Plan shall be kept as minutes of any other meeting, and the names of the directors who vote or who abstain from voting shall be noted therein.  References herein to the Board shall be deemed to mean the Committee if authority has been delegated to it, except that the authority to terminate, modify or amend the Plan may not be delegated to the
Committee.

                    B.          The Board shall have plenary authority in its discretion to:

	
  
 
  	
  
                      1.          determine   the employees of the Corporation and/or the Subsidiaries who are within that   class set forth herein as “participants;”
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                      2.          grant   awards provided in the Plan in such form and amount as the Board shall   determine;
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                      3.          impose   such limitations, restrictions and conditions upon any such award as the   Board shall deem appropriate; and
  
	
   
  	
  
 
  
	
  
 
  	
  
                      4.          interpret   the Plan, and to prescribe, amend, and rescind rules and regulations relating   to it, and make all other determinations and take all other action necessary   or advisable for the implementation and administration of the Plan.
  

                    C.          In the discretion of the Board, a Committee may consist solely of two or more “outside directors.”  In accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and/or solely of two or more “non-employee directors,” in accordance with Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not “outside directors” the authority to grant awards to eligible persons who are either (a) not then “covered employees” (as defined in Section 162(m) of the Code) and are not expected to be
“covered employees” at the time of recognition of income resulting from such award or (b) not persons with respect to whom the Corporation wishes to comply with Section 162(m) of the Code and/or (2) delegate to a committee of one or more members of the Board who are not “non-employee directors” the authority to grant awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

          To the extent that
Options are granted hereunder as “incentive stock options,” the Plan
shall be administered so as to qualify such options as incentive stock options,
as defined in Section 422 and other applicable sections of the Code, and the
regulations promulgated thereunder.  All questions of interpretation and
application of the Plan and of any Options granted under it shall be determined
by the Board and such determination shall be final and binding upon all
persons.  No member of the Board shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner and to the extent permitted by
applicable law.

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IV.    ELIGIBILITY

                    A.          All employees of the Corporation or its Subsidiaries shall be eligible to participate in the Plan as and when selected by the Board.

                    B.          Subject to the provisions of Section 7(g) relating to adjustments upon changes in the shares of Common Stock, no employee shall be eligible to be granted Options and Stock Appreciation Rights covering more than One Hundred Thousand (100,000) shares of Common Stock during any calendar year.

V.     TYPES OF AWARDS UNDER THE PLAN.

          Awards under the Plan may be in the form of any one or both of the following:

                    A.          Options, as described in Section 6, which may be designated as “incentive stock options,” as defined in Section 422 of the Code, or as “non incentive stock options,” as may be determined by the Board; and/or

                    B.          Stock Appreciation Rights, as described in Section 8.

VI.    AWARD OF STOCK OPTIONS.

          Options may be granted under the Plan from time to time, but not after [April 16, 2016].  The grant of Options hereunder shall be subject to the following limitations:

                    A.          No “incentive stock option,” as defined in Section 422 of the Code, may be granted hereunder to any participant who, on the date such option is granted owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation, or its parent or subsidiary corporations (a “Ten Percent Shareholder”), if any, unless the exercise price of such Option is equal to at least one hundred and ten percent (110%) of the Fair Market Value of the shares of the Corporation’s Common Stock on the date such Option is granted and such Option is not exercisable after the expiration of five (5) years from the date of grant.

          For purposes of the Plan, “Fair Market Value” shall mean, as of any date, the value of the Common Stock determined as follows:

                    (1)         The Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing sales price on the market trading day immediately preceding the date of determination if no sales were reported on the date of determination) as quoted on any established stock exchange or on the Nasdaq National Market or Nasdaq SmallCap Market (or the exchange or market with the greatest volume of trading in the Common Stock) on the day of determination (or if the day of determination does not fall on a market trading day, the market trading day immediately preceding the date of determination), as reported in The Wall Street Journal or such other source as the Board deems reliable.

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                    (2)         If the Common Stock is not listed on any established stock exchange or traded on the Nasdaq National Market or Nasdaq SmallCap Market, the Fair Market Value shall be determined in good faith by the Board.

                    B.          The aggregate Fair Market Value (determined as of the date an Option is granted) of the shares with respect to which “incentive stock options,” as defined in Section 422 of the Code, are exercisable for the first time by any optionee during any calendar year shall not exceed one hundred thousand dollars ($100,000).

          In making any determination as to the employees of the Corporation or the Subsidiaries to whom Options shall be granted and as to the number of shares to be covered by such Options, the Board shall take into account the duties of the respective participants, their present and potential contributions to the success, profitability and sound growth of the Corporation or the Subsidiaries, and such other factors as the Board shall deem relevant in connection with accomplishing the purposes of the Plan. 

VII.  TERMS AND CONDITIONS OF OPTIONS 

          Except as may be otherwise provided in any agreement containing Option provisions which is specifically approved by the Board, Options granted pursuant to the Plan shall be evidenced by agreements in such form, not inconsistent with the Plan, as the Board shall from time to time approve.  Each agreement shall designate whether the Option is granted as an “incentive stock option” or as a “non incentive stock option”.  Such agreements shall contain the substance of the following terms and conditions:

                    A.          Option Price.  The price to be paid upon exercise of the Option shall be not less than the Fair Market Value of the shares of the Common Stock of the Corporation on the date such Option is granted.  

                    B.          Term of Option.  Subject to the requirements of subsection 6(a) regarding Ten Percent Shareholders and subsection 7(f) regarding termination of employment, each Option granted under the Plan shall expire ten (10) years from the date the Option is granted, unless a shorter period is determined by the Board.

                    C.          Vesting and Exercisability of Options.  Each Option granted under the Plan shall vest and become exercisable at the time determined by the Board and set forth in the agreements; provided, however, that Options granted to employees other than officers of the Company, as defined in the Company’s Bylaws, shall vest at the rate of at least 20 percent of he shares subject thereto per year over five (5) years from the date of grant of the Option.

                    D.          Manner of Exercise.

	
  
 
  	
  

                       1.          To
the extent that the right to purchase shares has accrued hereunder, Options may
be exercised from time to time by written notice to the Corporation stating the
number of shares with respect to which the Option is being exercised. 
Shares of Common Stock purchased under Options shall, at the time of the notice
specifying the date of delivery, be paid for in full, in cash or, with the prior
written consent of the Corporation, in whole or in part through the surrender of
previously owned shares of Common Stock or by a “net exercise” of the
Option (as further described below).  To the extent payment is being made
with cash, the optionee shall deliver a certified or official bank check or the
equivalent thereof acceptable to the Corporation. 
 

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If shares of Common Stock are tendered as payment, such shares shall be valued
at their Fair Market Value as of the date of the notice given to the Corporation
by the optionee with respect to such exercise.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
                       2.          The   Corporation shall, without transfer or issue tax to the optionee (or other   person entitled to exercise the Option), deliver to the optionee (or other   person entitled to exercise the Option) at the principal office of the   Corporation, or such other place as shall be mutually acceptable, a   certificate or certificates for such shares; provided, however, that the time   of such delivery may be postponed by the Corporation for such period as may   be required for it with reasonable diligence to comply with any requirements   of law.  If the optionee (or other   person entitled to exercise the Option) fails to pay for all or any part of   the number of shares specified in such notice or fails to accept delivery of   such shares upon tender of delivery
thereof, the right to exercise the Option   with respect to such undelivered shares may be terminated.  The Board may require that a partial   exercise of an Option may be for no less than a stated minimum number of   shares.
  
	
   
  	
  
 
  
	
  
 
  	
  
                       3.          In   the case of a “net exercise” of an Option, the Corporation will not require   payment of the exercise price of the Option from the optionee but will reduce   the number of shares of Common Stock issued upon the exercise by the largest   number of whole shares that has a Fair Market Value that does not exceed the   aggregate exercise price.  With   respect to any remaining balance of the aggregate exercise price, the   Corporation shall accept a cash payment from the optionee.  The shares of common Stock so used to pay   the exercise price of an Option under a “net exercise” will be considered to   have resulted from the exercise of the Option, and accordingly, the Option   will not again be exercisable with respect to such shares,
the shares   actually delivered to the optionee, and any shares withheld for purposes of   tax withholding.
  

                    E.          Non Assignability of Option Rights.  No Option shall be assignable or transferable otherwise than by will or the laws of descent and distribution.  During the life of an optionee, an Option shall be exercisable only by the optionee.

                    F.          Termination of Employment.  In the event that an optionee is no longer an employee of the Corporation or one of its Subsidiaries, the optionee may exercise his or her Option (to the extent that the optionee was entitled to exercise such Option as of the date of termination of employment) within the period of time ending on the earlier of (i) the expiration of the term of the Option as set forth in the agreement setting forth the terms and conditions of the Option or (ii) the date three (3) months following the date of the termination of employment (or such longer or shorter period specified in the agreement setting forth the terms and conditions of the Option).  Notwithstanding the foregoing, in the event that an optionee’s employment with the Corporation and its
Subsidiaries terminates as a result of the Disability (as defined below) or the death of the optionee, then the Option may be exercised (to the extent that the optionee was entitled to exercise such Option as of the date of Disability or death) within the period of time ending on the earlier of (i) the expiration of the term of the Option as set forth in the agreement setting forth the terms and conditions of the Option or (ii) the date six (6) months following the date of termination of employment due to Disability or death (or such longer or shorter period specified in the agreement setting forth the terms and conditions of the Option).  For these purposes, Disability means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

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          In the event that an optionee is no longer an employee of the Corporation or one of its Subsidiaries, any remaining tandem Stock Appreciation Rights shall be considered exercised under subsection 8(f) of the Plan.

                    G.          Adjustments or Changes in Stock.

	
  
 
  	
  
                       1.          In   the event that the outstanding shares of Common Stock are hereafter increased   or decreased or changed into or exchanged for a different number or kind of   shares or other securities of the Corporation or of another corporation, by   reason of reorganization, merger, consolidation, recapitalization, reclassification,   stock split, combination of shares, dividend payable in common stock, or   acquisition, or any similar transaction, in which the Corporation receives no   additional consideration other than shares or other securities, appropriate   adjustment shall be made by the Board in the number and kind of shares for   the purchase of which Options may be granted under the Plan and limitations   on the number of shares for the purchase of which Options may
be granted to   an individual in a calendar year.  In   addition, the Board shall make appropriate adjustment in the number and kind   of shares as to which outstanding Options or portions thereof then   unexercised, shall be exercisable, so that any participant’s proportionate   interest in the Corporation by reason of rights under unexercised portions of   such Option shall be maintained as before the occurrence of such event.  Such adjustment in outstanding Options   shall be made without change in the total price applicable to the unexercised   portion of the Option and with a corresponding adjustment, if necessary, in   the price per share.
  
	
   
  	
  
 
  
	
  
 
  	
  
                       2.          In   the event of a dissolution or liquidation of the Corporation, a merger,   consolidation, acquisition, or other reorganization involving the Corporation   or a principal Subsidiary, in which the Corporation or such principal   Subsidiary is not the surviving or resulting corporation, or a sale by the   Corporation of all or substantially all of its assets, then, at the sole   discretion of the Board and to the extent permitted by applicable law (i) any   surviving corporation may assume any Options outstanding under the Plan or   may substitute options for those outstanding under the Plan, (ii) the time   during which such Options may be exercised shall be accelerated and the   Options terminated if not exercised prior to the effective date of the   corporate
transaction, or (iii) such Options may continue in full force and   effect.
  

                    H.          Restrictions on Shares; Notification of Sale.

	
  
 
  	
  
                       1.          Each   option agreement shall contain an agreement by the optionee that if he or she   at any time contemplates the disposition of any of the stock acquired   pursuant to the Plan, he or she shall first notify the Corporation of such   proposed disposition and shall thereafter cooperate with the Corporation in   complying with all applicable requirements of law which, in the opinion of   the Corporation, must be satisfied prior to the making of such disposition.
  
	
   
  	
  
 
  
	
  
 
  	
  
                       2.          The   Agreements setting forth the terms and conditions of Options granted under   this Plan may require that a participant acquire Common Stock upon exercise   only for investment and not for resale or distribution, and restrict transfer   of the Common Stock so received as may be necessary under applicable   securities laws.
  
	
  
 
  	
  
 
  

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                    I.          Withholding
Taxes.  Whenever the Corporation proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Corporation shall have the
right to require the optionee to remit to the Corporation an amount sufficient
to satisfy any Federal, state and/or local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares. 
Alternatively, the Corporation may issue or transfer such shares of Common Stock
net of the number of shares sufficient to satisfy the withholding tax
requirements.  For withholding tax purposes, the shares of Common Stock
shall be valued at their Fair Market Value on the date the withholding
obligation is incurred. 

VIII. STOCK APPRECIATION RIGHTS

                    A.          Award of Stock Appreciation Rights.  Concurrently with or subsequent to the award of any Option, the Board may, subject to the provisions of the Plan and such other terms and conditions as the Board may prescribe, award to the optionee a related tandem Stock Appreciation Right permitting the optionee to be paid the appreciation on the Option in lieu of exercising the Option.  The number of shares covered by such Stock Appreciation Rights shall not exceed the number of shares covered by the related Option.   Stock Appreciation Rights shall be evidenced by written agreements in such form as the Board may from time to time determine.

                    B.          Exercise of Stock Appreciation Rights.  An optionee who has been granted a Stock Appreciation Right may, from time to time, to the extent the related option is exercisable, elect to exercise the Stock Appreciation Right for all or part of the shares covered by such Stock Appreciation Right and thereby become entitled to receive, in Common Stock, payment as determined pursuant to subsections 8(d) and 8(e).  An exercise of an Option as to a number of shares shall cause a correlative reduction in the Stock Appreciation Rights held by the participant with respect to such Option of the same number of shares, and the exercise of a Stock Appreciation Right for a number of shares shall cause a correlative reduction in the number of shares covered by the related Option.  Stock
Appreciation Rights shall be exercisable only to the same extent and subject to the same conditions as the Options related thereto are exercisable, and only when the Fair Market Value of a share of Common Stock exceeds the exercise price of the related Option.  The Board may, in its discretion, prescribe additional conditions to the exercise of any Stock Appreciation Rights.

                    C.          Manner of Exercise of Stock Appreciation Rights.  An optionee wishing to exercise a Stock Appreciation Right shall give written notice of such exercise to the Corporation, stating the number of shares as to which Stock Appreciation Rights are being exercised, which notice shall be forwarded to the Corporation.  The date the Corporation receives the written notice of exercise hereunder is referred to herein as the Exercise Date.  All Stock Appreciation Rights shall be paid in Common Stock.  Upon receipt of the notice of exercise, the Corporation shall, without transfer or issue tax to the optionee or other person entitled to exercise the Stock Appreciation Right, deliver to the person exercising such right a certificate or certificates for shares of the
Corporation’s Common Stock.

                    D.          Amount of Payment.  The amount of payment in shares, to which an optionee shall be entitled upon the exercise of a Stock Appreciation Right shall be equal to 100% of the amount, if any, by which the Fair Market Value of a share of Common Stock on the Exercise Date exceeds the exercise price of the Option related to said Stock Appreciation Right, times the number of shares of Common Stock as to which the Stock Appreciation Right is being exercised.

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                    E.          Form
of Payment.  Shares shall be paid by delivery of a certificate or
certificates for the number of shares determined by dividing the amount of
payment determined pursuant to subsection 8(d) by the Fair Market Value of a
share of Common Stock on the Exercise Date of such Stock Appreciation
Right.  All such shares shall be issued with the restrictions specified in
subsection 7(h).

                    F.          Term.  A Stock Appreciation Right may be exercised only while the related Option is exercisable.  If, as of the date on which an Option to which a Stock Appreciation Right related expires, any part of such related Option has not been and on that date is not exercised, all remaining related equivalent Stock Appreciation Rights shall be considered exercised as of that date and any positive amount determined under subsection (d) above shall be paid to the optionee in shares.

                    G.          Termination of Employment.  Upon termination of the optionee’s employment, including by reason of disability or death, Stock Appreciation Rights shall immediately and automatically terminate; provided, however, that any remaining tandem Stock Appreciation Rights shall be considered exercised under subsection (f) above.

                    H.          Assignability.  No Stock Appreciation Right shall be assignable or transferable otherwise than by will or the laws of descent and distribution.  During the life of a participant, a Stock Appreciation Right shall be exercisable only by the participant.

IX.   EFFECTIVE DATE AND TERMINATION OF PLAN

                    A.          Effective Date.  The Plan was adopted by the Board on [April 17, 2006] and shall become effective immediately upon approval of the Plan by the shareholders of the Corporation.

                    B.          Termination of Plan.  The Plan shall terminate on [April 16, 2016], and no further Options may be granted under the Plan.  Termination of the Plan shall not, without the written consent of the optionee, alter or impair any of the rights or obligations under any Option or Stock Appreciation Rights theretofore granted under the Plan. 

X.     AMENDMENTS

          The Plan may be terminated at any time, or from time to time may be modified or amended, by the shareholders of the Corporation.  In addition, the Board may terminate the Plan at any time and from time to time modify or amend the Plan in such respects as it shall deem advisable, or to conform to any requirements of the laws and regulations relating to the Corporation or in any other respect; provided, however, that no such action of the Board may, without the approval of the shareholders, amend the Plan in any manner which would have the effect of preventing Options issued under the Plan from being “incentive stock options” as defined in Section 422 of the Code, or alter the provisions of the Plan so as to (a) increase, other than pursuant to the adjustment provisions of Section 7(g) hereof, the maximum number of shares as to which Options may be granted under the Plan; (b) add a new class
of participants; (c) decrease the exercise price specified by Section 7(a) hereof; (d) extend the term of the Plan or the maximum term of options granted hereunder; (e) withdraw the administration of the Plan from the Board; or (f) modify the provisions of the Plan relating to Code Section 162(m).  The foregoing authority and power of the Board to terminate or modify or amend the Plan may not be delegated to the Committee pursuant to Section 3(a) of this Plan.

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XI.    USE OF PROCEEDS

          The proceeds from the sale of Common Stock pursuant to the exercise of options will be used for the Corporation’s general corporate purposes. 

XII.  NO OBLIGATION TO EXERCISE OPTION 

          The grant of an Option hereunder shall impose no obligation upon the optionee to exercise such Option.

XIII. RESTRICTION ON ISSUANCE OF SHARES 

          The Corporation shall not be obligated to issue any shares pursuant to any stock option and any shares issued pursuant thereto shall not be validly issued until there has been compliance with the laws, rules and regulations relating to the issuance of such shares.

XIV. RIGHTS AS A SHAREHOLDER

          Participants shall have no rights as Shareholders with respect to any shares of Common Stock of the Corporation until the date of issuance of a stock certificate to such optionee for such shares.  No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance, except as otherwise provided in Section 7(g) hereof. 

XV.  RIGHT TO TERMINATE EMPLOYMENT

          Nothing in the Plan or in any agreement entered into pursuant to the Plan shall confer upon any participant the right to continue in the employment of the Corporation or any of the Subsidiaries or effect any right which the Corporation or any of the Subsidiaries may have to terminate the employment of such participant.

XVI. FINANCIAL INFORMATION

          The Company shall annually deliver financial statements of the Company to all participants to whom such delivery is required by Section 260.140

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