Document:

EX-10.3 FORM OF NONQUALIFIED STOCK OPTION AGREEMEN

 

EXHIBIT 10.3

R & G FINANCIAL CORPORATION

2004 STOCK OPTION PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

     Stock Option Agreement (this “Option Agreement”), dated as of
        (the “Grant Date”), between R & G Financial Corporation (the
“Company”) and           (the
“Participant”). This Option Agreement is pursuant to the terms of the R & G
Financial Corporation 2004 Stock Option Plan (the “Plan”), a copy of which has
been furnished to the Participant and the terms of which are incorporated
herein by reference. Unless otherwise indicated, whenever capitalized terms are
used in this Option Agreement, they shall have the meanings set forth in the
Plan.

     Section 1. Grant of Options. The Participant is hereby granted an option
representing         shares of Common Stock (“Shares”) under the terms and
conditions specified herein (the “Option”). Such Option is a nonqualified Stock
Option and is not intended to constitute an Incentive Stock Option.

     Section 2. Option Price. The exercise price of the Option shall be
$       per share (the “Option Price”).

     Section 3. Vesting of Option.

     3.1 Vesting Schedule. The Option shall vest and become exercisable based
on the passage of time according to the following vesting schedule:

	 
	20% of the Shares vest 1 year from the Grant Date.

	40% of the Shares vest 2 years from the Grant Date.

	60% of the Shares vest 3 years from the Grant Date.

	80% of the Shares vest 4 years from the Grant Date.

	100% of the Shares vest 5 years from the Grant Date.

     3.2 Accelerated Vesting. Notwithstanding Section 3.1, the Option shall
become fully and immediately vested and exercisable upon: (i) a Sale Event; or
(ii) upon the death, Disability or Retirement of the Participant as set forth
in Section 8.01(b) of the Plan.

     3.3 Discretionary Vesting. The Board may, in its sole discretion,
accelerate the vesting of the Option at any time and for any reason.

     Section 4. Option Term. The Option may be exercised, to the extent that
it is vested pursuant to Section 3, during the Option Term, unless earlier
terminated in accordance with the terms of the Plan. For purposes hereof, the
“Option Term” shall commence on the Grant Date and shall expire on the tenth
anniversary thereof. Upon the expiration of the Option Term, to the extent
unexercised, the Option shall terminate and be of no further force or effect.

 

 

     Section 5. Exercise of Option. An Option may be exercised by the
Participant (or such other person as may be specified in the Plan) to the
extent vested, with respect to whole shares only, by giving written notice to
the Company of exercise along with payment of the aggregate exercise price.
The Option Price for the Shares acquired pursuant to the exercise of the Option
shall be paid: (i) in cash or by check; (ii) in whole shares of Common Stock;
or (iii) a combination of (i) and (ii) above. The value of any share of Common
Stock delivered in payment of the Option Price shall be its Fair Market Value
on the date the Option is exercised.

     Section 6. Withholding of Taxes. The Company shall withhold from any
amounts due and payable by the Company to the Participant (or secure payment
from the Participant in lieu of withholding) the amount of any federal or state
withholding or other taxes, if any, due from the Company with respect to the
exercise of the Option, and the Company may defer such issuance until such
withholding or payment is made unless otherwise indemnified to its satisfaction
with respect thereto. The Company shall have the right to: (i) make deductions
from any settlement of this Option, including the delivery of Shares, or
require Shares or cash, or both, be withheld from any settlement of this
Option, in each case in an amount sufficient to satisfy the withholding
obligation; or (ii) take such other action as may be necessary or appropriate
to satisfy the withholding obligation.

     Section 7. Adjustments. If at any time while the Option is outstanding,
the number of outstanding shares of Common Stock is changed by reason of a
reorganization, recapitalization, stock split or any other event described in
Article V of the Plan, the number and/or kind of Shares subject to the Option
and/or the Option Price of such Shares shall be adjusted in accordance with the
provisions of the Plan.

     Section 8. Option Not Transferable. This Option may not be transferred,
pledged, assigned, hypothecated or otherwise disposed of in any way by the
Participant, except by will or laws of descent and distribution, and during the
Participant’s life, may only be exercised by the Participant. Any attempt to
effect a transfer of this Option that is not otherwise permitted by the Board,
the Plan, or this Option Agreement shall be null and void.

     Section 9. No Rights as Shareholder or Continued Employment.

     9.1 No Right as Shareholder. The Participant shall not have any privileges
of a Shareholder of the Company with respect to any Shares subject to (but not
acquired upon valid exercise of) the Option, nor shall the Company have any
obligation to pay any dividends or otherwise afford any rights to which Shares
are entitled with respect to such Shares, until the date of the issuance to the
Participant of a stock certificate evidencing such Shares.

     9.2 No Right to Continued Employment. Nothing in this Option Agreement
shall confer upon a Participant who is an employee of the Company or any of its
subsidiaries any right to continue in the employ of the Company or any of its
subsidiaries or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the Participant’s employment at any time.

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     Section 10. Miscellaneous Provisions.

     10.1 Notices. All notices, requests and demands to or upon a party hereto
shall be in writing and shall be deemed to have been duly given when delivered
by hand or three days after being deposited in the mail, postage prepaid or, in
the case of facsimile notice, when received, addressed as follows or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.

               If to the Company, to the following address:

	 	 	 
	 

	 	R & G Financial Corporation
	

	 	280 Jesus T. Piñero Avenue
	

	 	Hato Rey, San Juan, Puerto Rico 00918
	

	 	Attn: Joseph R. Sandoval,
	

	 	          Executive Vice President and Chief Financial Officer
	

	 	Facsimile: (787) 766-8175

               If to the Participant, to the address or facsimile number as shown on the
signature page hereto.

     10.2 Amendment. This Option Agreement may be amended only by a writing
executed by the parties hereto that specifically states that it is amending
this Option Agreement.

     10.3 Governing Law. This Option Agreement shall be construed and
interpreted in accordance with and governed by the laws of Puerto Rico, other
than the conflict of laws provisions of such laws.

     10.4 Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Option
Agreement.

     10.5 Construction. The construction of this Option Agreement is vested in
the Board, and the Board’s construction shall be final and conclusive on all
persons.

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     IN WITNESS WHEREOF, this Option Agreement has been executed and delivered
by the parties hereto.

	 	 	 
	PARTICIPANT

	 	R & G FINANCIAL CORPORATION
	 
	 	 
	 
	 	 
	

Name:

	 	

Name:
	 
	 	 
	

	 	

Title:
	 
	 	 
	

Address:
	 	 
	 
	 	 
	

Telephone number:
	 	 
	 
	 	 
	

Facsimile:
	 	 

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                                                                  EXHIBIT 10(20)

                            LAYNE CHRISTENSEN COMPANY
                             2002 STOCK OPTION PLAN
                             (AMENDED AND RESTATED)

            Layne Christensen Company, a Delaware corporation (the "Company"),
desired to provide additional incentive for key Employees to promote the success
of the Company and any subsidiaries by allowing such Employees to share in the
future growth of the business and to participate in the ownership of the
Company. Accordingly, the Company established the 2002 Stock Option Plan of
Layne Christensen Company (the "Plan") to offer eligible Employees the
opportunity to become owners of capital stock of the Company under stock
options, certain of which are intended to qualify as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended, and certain
of which are intended to be nonqualified stock options. The Plan was initially
adopted, effective March 1, 2002. Subject to shareholder approval, the Plan is
hereby amended and restated effective June 3, 2004, to permit grants of
nonqualified stock options to non-Employee Directors.

                                    ARTICLE I
                                   DEFINITIONS

            Whenever the following terms are used in this Plan, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

            1.1 BOARD -- "Board" shall mean the Board of Directors of the
Company. Members of the Board shall be referred to as "Directors."

            1.2 CHANGE OF CONTROL -- "Change of Control" for purposes of this
Plan shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (in effect
on the date hereof) promulgated under the Exchange Act, as in effect on the date
hereof; provided, however, that, without limitation, such a Change of Control
shall be deemed to occur when either (i) a person acquires beneficial ownership
(as defined by Securities and Exchange Commission Rule 13d-3) of 25% or more of
the combined voting power of the Company's voting securities, or (ii) less than
a majority of the Directors are persons who were either nominated or selected by
the Board.

            1.3 CODE -- "Code" shall mean the Internal Revenue Code of 1986, as
amended.

            1.4 COMMITTEE - "Committee" means (i) the Board or (ii) one or more
committees of the Board to whom the Board has delegated all or part of its
authority under this Plan.

            1.5 COMPANY -- "Company" shall mean Layne Christensen Company, a
Delaware corporation.

            1.6 EMPLOYEE -- An individual employed by the Company or a
Subsidiary.

            1.7 EXCHANGE ACT -- "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.

            1.8 FAIR MARKET VALUE - the "Fair Market Value" of a share of the
Stock as of any applicable date shall be:

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                        (a) the closing price of the Stock on the principal
                  exchange on which shares of the Stock are then trading, if
                  any, on the day previous to such date, or, if shares were not
                  traded on the day previous to such date, then on the next
                  preceding trading day during which a sale occurred;

                        (b) if the Stock is not so listed on a principal
                  exchange but is traded on the Nasdaq Stock Market (whether
                  Nasdaq National Market or Nasdaq Small Cap Market), the
                  closing price, regular way, of the security on the Nasdaq
                  Stock Market on the day previous to such date, or if no such
                  reported sale of the security shall have occurred on such
                  date, on the latest preceding date on which there was a
                  reported sale, or

                        (c) if the Stock is not listed for trading on a
                  principal exchange or the Nasdaq Stock Market, the average of
                  the closing bid and asked prices as reported by the Nasdaq
                  Over the Counter Bulletin Board, or, if no such prices shall
                  have been so reported for such date, on the latest preceding
                  date for which such prices were reported; or

                        (d) if the Stock is not publicly traded on an exchange
                  and is not listed on the Nasdaq Stock Market, the Nasdaq Over
                  the Counter Bulletin Board or a successor quotation system,
                  the fair market value of the security as determined in good
                  faith by the Committee.

            1.9 INCENTIVE STOCK OPTION -- "Incentive Stock Option" shall mean an
option granted hereunder which qualifies under Section 422 of the Code as an
incentive stock option and which is designated as an Incentive Stock Option by
the Committee.

            1.10 KEY EMPLOYEE -- "Key Employee" shall mean any Employee of the
Company who, in the sole discretion of the Committee, has made or is expected to
make, a significant contribution to the Company.

            1.11 NONQUALIFIED STOCK OPTION -- "Nonqualified Stock Option" shall
mean an option granted hereunder which is not an Incentive Stock Option and
which is designated as a Nonqualified Stock Option by the Committee.

            1.12 OFFICER -- "Officer" shall mean an officer of the Company or
any Subsidiary as defined in the Securities and Exchange Commission Rule 16a -
1(f), as amended.

            1.13 OPTION -- "Option" shall mean an option to purchase common
stock of the Company granted under the Plan. "Option" includes both Incentive
Stock Options and Nonqualified Stock Options.

            1.14 OPTIONEE -- "Optionee" shall mean an Employee or Director to
whom an Option has been granted under the Plan.

            1.15 OPTION PERIOD -- "Option Period" shall mean the period during
which an Option may be exercised as determined by the Committee under the terms
of Section 4.3(a) hereof and as set forth in the individual Option Agreement.

            1.16 PLAN -- "Plan" shall mean the 2002 Stock Option Plan of Layne
Christensen Company, as amended and restated.

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            1.17 SECURITIES ACT -- "Securities Act" shall mean the Securities
Act of 1933, as amended.

            1.18 STOCK -- "Stock" or "Shares" shall mean shares of the common
stock of the Company.

            1.19 SUBSIDIARY -- "Subsidiary" or "Subsidiaries" shall mean
subsidiary corporations or a subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.

            1.20 TERMINATION OF EMPLOYMENT -- "Termination of Employment" shall
mean the time when the employer-employee relationship between the Company or a
Subsidiary and the Optionee ceases for any reason. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment including, but not limited to, whether a
particular leave of absence constitutes a Termination of Employment; provided,
however, that with respect to Incentive Stock Options, a leave of absence shall
constitute a Termination of Employment if, and to the extent that, such leave of
absence interrupts employment for the purposes of Section 422(a)(2) of the Code
and the then applicable rulings and regulations under such Section.

            1.21 TERMINATION OF SERVICE -- "Termination of Service" shall mean
the time when a Director ceases to be a Director of the Company. The Committee,
in its absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Service.

                                   ARTICLE II
                              STOCK SUBJECT TO PLAN

            2.1 STOCK SUBJECT TO PLAN -- Options granted under this Plan shall
be granted solely with respect to shares of Stock. Subject to any adjustments
made pursuant to the provisions of Section 2.4 hereof, the aggregate number of
shares of stock which may be issued under this Plan shall not exceed 600,000.
The shares of Stock issuable and deliverable upon the exercise of an Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have been reacquired by the Company.

            2.2 INCENTIVE STOCK OPTION - $100,000 LIMITATION -- The aggregate
fair market value (determined as of the time the Incentive Stock Option is
granted) of the Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Optionee during any calendar year under the
Plan (or any other plan of the Company or its Subsidiaries which qualifies as an
incentive stock option plan under Section 422 of the Code) shall not exceed
$100,000. If the fair market value (determined as of the time the Option is
granted) of the Stock with respect to which Options are exercisable by an
Optionee exceeds $100,000 during any calendar year, the amount in excess of
$100,000 shall be treated as Options which are not Incentive Stock Options.

            2.3 UNEXERCISED OPTIONS -- If any Option expires or is canceled
without having been fully exercised, the number of shares subject to such Option
but as to which such Option was not exercised prior to its expiration or
cancellation may again be made available for grant hereunder, subject to the
limitations of Sections 2.1 and 2.2.

            2.4 ADJUSTMENTS IN COMPANY'S SHARES -- In the event the Stock is
changed into or exchanged for a different number or kind of securities of the
Company by reason of merger, consolidation, recapitalization, reclassification,
stock split, stock dividend or combination of shares, the Committee shall make
an appropriate and equitable adjustment in the number and kind of shares (a) as
to which Options may be granted, including adjustments of the limitation in
Section 2.1; and (b) as to which Options, or portions thereof unexercised, shall
be exercisable, to the end that after such event each Optionee's proportionate

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<PAGE>

interest shall be maintained as before the occurrence of such event; provided,
however, that no such adjustment shall be made which would disqualify an
Incentive Stock Option within the meaning of Section 424(h) of the Code. Such
adjustment in an outstanding Option shall be made with any necessary
corresponding adjustment in Option price per share and without change in the
total price applicable to the Options or the unexercised portion of the Options
(except for any change in the aggregate price resulting from rounding-off of
share quantities or prices). Any such adjustment made by the Committee shall be
final and binding upon all Optionees, the Company and all other interested
persons.

                                   ARTICLE III
                       ELIGIBILITY AND GRANTING OF OPTIONS

            3.1 ELIGIBILITY --

                  (a) Subject to the restrictions on the granting of Incentive
      Stock Options set forth below in subsection (b), Options to purchase
      shares of Stock shall be granted under this Plan only to Directors of the
      Company and Key Employees of the Company and its Subsidiaries.

                  (b) Incentive Stock Option - Ownership Limitation --
      Notwithstanding the provisions of subsection (a), no Incentive Stock
      Option shall be granted under this Plan to (i) any non-Employee Director
      of the Company or (ii) any Employee of the Company or its Subsidiaries
      who, immediately before the Option is granted, owns (either directly or by
      application of the rules contained in Section 424(d) of the Code) stock
      possessing more than 10% of the total combined voting power of all classes
      of stock of the Company or its Subsidiaries. The ownership limitation in
      subsection (b)(ii) shall not apply if at the time the Incentive Stock
      Option is granted (x) the option price is at least 110% of the fair market
      value of the stock subject to such Incentive Stock Option, and (y) such
      Incentive Stock Option will expire no later than five years from the date
      on which it is granted.

            3.2 GRANTING OF OPTIONS --

                  (a) The Committee shall from time to time and in its absolute
      discretion:

                        (i) Determine which Directors and Key Employees
            (including those to whom Options have been previously granted under
            the Plan) should be granted Options;

                        (ii) Determine the number of shares to be subject to
            such Options granted to such selected Directors and Key Employees,
            and, subject to the limits imposed under this Plan, determine
            whether such Options are to be Incentive Stock Options or
            Nonqualified Stock Options; and

                        (iii) Determine the terms and conditions of such
            Options, consistent with the Plan.

                  (b) Upon the selection of a Director or Key Employee to be
      granted an Option, the Committee shall grant such Option and may impose
      such conditions on the grant of such Option as it deems appropriate.
      Without limiting the generality of the preceding sentence, the Committee
      may, in its discretion and on such terms as it deems appropriate, require
      as a condition on the grant of an Option to an Optionee that the Optionee
      surrender for cancellation some or all of the unexercised Options which
      have been previously granted to him. An Option the grant of which is
      conditioned upon such surrender may have an option price lower (or higher)
      than the option price of the surrendered Option, may cover the same (or a
      lesser or greater) number of shares as the surrendered Option, may contain
      such other terms as the Committee deems appropriate and shall be

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      exercisable in accordance with its terms, without regard to the number of
      shares, price, option period or any other term or condition of the
      surrendered Option.

                  (c) No Option may be granted hereunder after ten (10) years
      from the earlier of (i) the date the Plan was originally adopted by the
      Committee or (ii) the date the Plan was originally approved by the
      stockholders of the Company.

                  (d) An Option shall be deemed granted on the date the
      Committee approves the granting of such Option; provided, however, that
      any Option shall terminate thirty (30) days after the date upon which it
      shall have been granted unless a Stock Option Agreement duly executed by
      the Optionee shall have been redelivered to the Company within such thirty
      (30) day period.

                                   ARTICLE IV
                                 TERMS OF OPTION

            4.1 OPTION AGREEMENT -- Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company. The terms and conditions of a Stock Option
Agreement shall be consistent with the Plan, but the Committee shall have the
power and authority to include such other terms and conditions which are not
inconsistent with the Plan. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to qualify
such Options as "incentive stock options" under Section 422 of the Code.

            4.2 OPTION PRICE -- The price of the shares subject to each Option
shall be determined by the Committee and set forth in the respective Stock
Option Agreement; provided, however, that the price per share for shares subject
to an Incentive Stock Option shall (i) be not less than 100% of the Fair Market
Value of such shares on the date such Incentive Stock Option is granted and (ii)
be not less than 110% of the Fair Market Value of such shares on the date such
Incentive Stock Option is granted in the case of a grant to an Optionee then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or its
Subsidiaries.

            4.3 PERIOD AND EXERCISE OF OPTION --

                  (a) PERIOD -- Subject to the provisions of the Stock Option
      Agreement and the other restrictions contained in the Plan, an Option
      shall become exercisable at such times and in such installments (which may
      be cumulative) as the Committee shall provide in the terms of each
      individual Option Agreement, and the period during which such Option (or
      installment) may be exercised shall terminate at such times as the
      Committee shall provide in the terms of each individual Option Agreement.
      The Committee may adopt a resolution after an Option is granted and on
      such terms and conditions as it deems appropriate whereby the time during
      which such Option or any portion thereof may be exercised is accelerated.
      Each Option shall expire, in all cases, upon the first to occur of the
      following events:

                        (i) in the case of an Incentive Stock Option, the
            expiration of ten (10) years from the date the Incentive Stock
            Option is granted;

                        (ii) if an Optionee owned (either directly or by
            application of the rules contained in Section 425(d) or the Code)
            stock possessing more than 10% of the total combined voting power of
            all classes of stock of the Company or its Subsidiaries immediately
            before an Incentive Stock Option is granted to such Optionee, then
            the expiration of five (5) years from the date the Incentive Stock
            Option is granted;

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                        (iii) with respect to Options granted to an Employee,
            the expiration of thirty (30) days from the time of the Optionee's
            Termination of Employment unless such Termination of Employment
            results from his or her death;

                        (iv) with respect to Options granted to an Employee, the
            expiration of ninety (90) days from the time of the Optionee's
            Termination of Employment by reason of his or her death;

                        (v) with respect to Options granted to a Director, the
            expiration of thirty (30) days from the date of the Director's
            Termination of Service unless such Termination of Service results
            from his or her death;

                        (vi) with respect to Options granted to a Director, the
            expiration of ninety (90) days from the date of the Director's
            Termination of Service by reason of his or her death; or

                        (vii) the Optionee shall engage in willful misconduct
            which injures the Company or any of its Subsidiaries.

                  Notwithstanding subsections (iii) through (vi) above, with
      respect to Options granted to an individual who is both an Employee and a
      Director, (x) in the event the individual ceases to be a Director but
      continues to remain an Employee, the Option shall be treated as an Option
      granted to an Employee with subsections (v) and (vi) being inapplicable
      for purposes of this Section 4.3(a), and (y) in the event the individual
      ceases to be an Employee but continues to remain as a Director, the Option
      shall be treated as an Option granted to a Director with subsections (iii)
      and (iv) being inapplicable for purposes of this Section 4.3(a). Except as
      set forth in subsections (iii) and (iv) above, an Incentive Stock Option
      shall not be exercisable during the Option Period unless the Optionee
      shall have been continuously employed by the Company or a Subsidiary from
      the date the Incentive Stock Option was granted until its date of
      exercise.

                  Upon expiration of the Option Period, as accelerated if
      applicable, the Option shall terminate with respect to all shares of Stock
      not already actually purchased and paid for in full by the Optionee.

                  (b) PERSONS ELIGIBLE TO EXERCISE -- An Option granted
      hereunder (or portion thereof) shall be exercisable only by the Optionee;
      provided, however, that in the event of an Optionee's death, the heirs,
      executors or personal representatives of such Optionee may exercise the
      Option subject to the time periods set forth above in Section 4.3(a).

                  (c) PARTIAL EXERCISE -- Any exercisable portion of the Option
      or the entire Option, if then wholly exercisable, may be exercised in
      whole or in part during the applicable Option Period; provided, however,
      that the Company shall not be required to issue fractional shares and the
      Committee may, by the terms of the Option, require any partial exercise to
      be with respect to a specified minimum number of shares.

                  (d) MANNER OF EXERCISE -- An exercisable Option, or any
      exercisable portion thereof, may be exercised solely by delivery to the
      Secretary of the Company or his office of all of the following prior to
      the time when such Option or portion thereof becomes unexercisable under
      the terms of this Plan or the applicable Stock Option Agreement:

                        (i) Notice in writing signed by the Optionee or other
            person then entitled to exercise such Option or portion thereof,
            stating that such Option or portion

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            thereof is exercised, such notice complying with all applicable
            rules established by the Committee;

                        (ii) Full payment for the shares with respect to which
            such Option or portion thereof is exercised through one or more of
            the following methods:

                              A. Cash or certified bank check; or

                              B. By delivery to the Company of certificates
                  representing the number of Shares then owned by the Optionee,
                  the Fair Market Value of which equals the purchase price of
                  the Stock purchased pursuant to the Option, properly endorsed
                  for transfer to the Company; provided however, that Shares
                  used for this purpose must have been held by the Optionee for
                  such minimum period of time as may be established from time to
                  time by the Committee; and provided further that the Fair
                  Market Value of any Shares delivered in payment of the
                  purchase price upon exercise of the Options shall be the Fair
                  Market Value as of the exercise date, which shall be the date
                  of delivery of the certificates for the Stock used as payment
                  of the Option Price.

                              In lieu of actually surrendering to the Company
                  the stock certificates representing the number of Shares then
                  owned by the Optionee, the Committee may, in its discretion
                  permit the Optionee to submit to the Company a statement
                  affirming ownership by the Optionee of such number of Shares
                  and request that such Shares, although not actually
                  surrendered, be deemed to have been surrendered by the
                  Optionee as payment of the exercise price;

                        (iii) Such representations and documents as the
            Committee, in its absolute discretion, deems necessary or advisable
            to effect compliance with all applicable provisions of the
            Securities Act and any other federal or state securities laws or
            regulations. The Committee may, in its absolute discretion, also
            take whatever additional actions it deems appropriate to effect such
            compliance including, without limitation, placing legends on share
            certificates and issuing stop-transfer orders to transfer agents and
            registrars;

                        (iv) Full payment (in cash or by check) to the Company
            of all amounts which, under federal, state or local law, it is
            required to withhold in connection with the exercise of the Option;
            and

                        (v) In the event the Option or portion thereof shall be
            exercised by any person or persons other than the Optionee,
            appropriate proof of the right of such person or persons to exercise
            the Option.

            4.4 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES -- The Company
shall not be required to issue or deliver any certificate or certificates for
shares of Stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:

                  (a) The completion of any registration or other qualification
      of or notice regarding such shares under any state or federal law or under
      the rules or regulations of the Securities and Exchange Commission or any
      other governmental regulatory body, which the Committee shall, in its
      absolute discretion, deem necessary or advisable;

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                  (b) The obtaining of any approval or other clearance from any
      state or federal governmental agency which the Committee shall, in its
      absolute discretion, determine to be necessary or advisable; and

                  (c) The lapse of such reasonable period of time following the
      exercise of the Option as the Committee may establish from time to time
      for reasons of administrative convenience, provided that, upon issuance,
      the shares shall be considered issued and outstanding as of the date such
      Option was exercised.

            4.5 RIGHTS AS STOCKHOLDERS -- The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.

            4.6 REORGANIZATION, CHANGE IN CONTROL, OR LIQUIDATION -- In the
event the Company shall not be the surviving corporation in any merger,
consolidation, or reorganization, or in the event of acquisition by another
corporation of all or substantially all of the assets of the Company, every
Option outstanding hereunder may be assumed (with appropriate changes) by the
surviving, continuing, successor or purchasing corporation, as the case may be,
subject to any applicable provisions of the Code or replaced with new Options of
comparable value (in accordance with Section 424(a) of the Code). In the event
(i) that such surviving, continuing, successor or purchasing corporation, as the
case may be, does not assume or replace the outstanding Options hereunder, or
(ii) of liquidation or dissolution of the Company, the Committee may provide
that each Optionee shall have the right, within a period commencing not more
than thirty (30) days immediately prior to and ending on the day immediately
prior to such merger, consolidation, reorganization or acquisition by another
corporation of all or substantially all of the assets of the Company or the
liquidation or dissolution of the Company, to exercise the Optionee's
outstanding Options to the extent of all or any part of the aggregate number of
shares subject to such Option(s). In the event of a Change of Control the
Committee may accelerate the time at which Options granted under this Plan may
be exercised by the Optionee.

            4.7 TRANSFER RESTRICTIONS -- The Committee, in its absolute
discretion, may impose such other restrictions on the transferability of the
shares purchasable upon the exercise of an Option as it deems appropriate. Any
such other restriction shall be set forth in the respective Stock Option
Agreement and may be referred to on the certificates evidencing such shares. The
Committee may require the Employee to give the Company prompt notice of any
disposition of shares of stock, acquired by exercise of an Incentive Stock
Option, within two (2) years from the date of granting such Option or one (1)
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.

                                    ARTICLE V
                                 ADMINISTRATION

            5.1 DUTIES AND POWERS OF THE COMMITTEE -- The Committee shall have
the power to interpret this Plan and any Stock Option Agreement and to adopt
such rules for the administration, interpretation and application of the Plan as
are consistent herewith and to interpret, amend, or revoke any such rules. Any
such interpretations and rules in regard to Incentive Stock Options shall be
consistent with the basic purpose of the Plan to grant "incentive stock options"
within the meaning of Section 422 of the Code. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to this Plan or an Option.

            5.2 EXPENSES: INDEMNIFICATION -- All reasonable expenses and
liabilities actually incurred in connection with the administration of the Plan
shall be borne by the Company. The Committee

                                       8

<PAGE>

may employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Company and its Officers and Directors shall be fully justified in
relying, or acting in good faith upon the advice, opinion, valuations or
information furnished by such persons. All actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and
binding upon all Optionees, the Company and all other interested persons. Each
person who is or shall have been a member of the Committee shall be indemnified
and held harmless by the Company against and from any and all loss, cost,
liability or expense that may be imposed upon or reasonably incurred by such
person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be or becomes a party or in which such
person may be or becomes involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by such person
in settlement thereof (with the Company's written approval) or paid by such
person in satisfaction of a judgment in any such action, suit or proceeding,
except a judgment in favor of the Company based upon a finding of such person's
lack of good faith; subject, however, to the condition that upon the institution
of any claim, action, suit or proceeding against such person, such person shall,
in writing, give the Company notice and an opportunity, at its own expense, to
handle his own defense. The foregoing right of indemnification shall not be
exclusive of any other right to which such person may be entitled as a matter of
law or otherwise or any other right or power that the Company may have to
indemnify or hold such person harmless.

                                   ARTICLE VI
                                  MISCELLANEOUS

            6.1 OPTIONS NOT TRANSFERABLE -- Neither an Option nor any interest
or right therein or part thereof shall be liable for the debts, contracts or
engagements of the Optionee or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition is voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that this Section 6.1 shall not prevent transfers by will or by the
applicable laws of descent and distribution.

            6.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN -- No Option
shall be granted pursuant to this Plan after February 29, 2012, on which date
this Plan will terminate except as to Options then outstanding under the Plan.
Options outstanding as of February 29, 2012, shall remain in effect until they
are exercised or they expire. The Committee may at any time before such date
amend, modify or terminate the Plan; provided, however, that, except as provided
in Section 2.4, the Committee may not, without further approval by the holders
of a majority of the issued and outstanding shares of Stock,

                  (a) increase the maximum number of shares of Stock as to which
      Options may be granted pursuant to this Plan,

                  (b) change the class of Employees eligible to be granted
      options pursuant to this Plan,

                  (c) extend the period during which Options may be granted or
      exercised,

                  (d) change the provisions of Article IV hereof with respect to
      the determination of the option price, other than to change the manner of
      determining the fair market value of shares of Stock to conform with any
      then applicable provisions of the Code or the regulations issued
      thereunder, or

                  (e) amend or modify the Plan in a manner requiring shareholder
      approval under Rule 16b-3.

                                       9

<PAGE>

No amendment, modification or termination of this Plan may adversely affect the
rights of any Optionee under any then outstanding Option granted hereunder
without the consent of such Optionee.

            6.3 APPROVAL OF AMENDED AND RESTATED PLAN BY SHAREHOLDERS - The
original version of this Plan was approved by the Company's shareholders. This
amended and restated Plan will be submitted for the approval of the Company's
shareholders within twelve (12) months after the date of the Board's adoption of
the amendments to the Plan and thereafter at any such time as may be required
under the Code, Securities Act or the Exchange Act. Options may be granted to
non-Employee Directors prior to such shareholder approval; provided, however,
that (a) such Options shall not be exercisable prior to the time when the
shareholders shall have approved of the amendments to the Plan, and (b) if the
shareholders have not approved the amendments to the Plan by the end of the
twelve (12) month period, all Options previously granted to non-Employee
Directors under the Plan shall thereupon be canceled and become null and void.

            6.4 EFFECT OF PLAN UPON OTHER COMPENSATION PLANS -- Nothing in this
Plan shall be construed to limit the right of the Company (a) to establish any
other forms of incentive or other compensation for Directors and Employees, or
(b) to grant or assume options otherwise than under this Plan in connection with
any proper corporate purpose including, without limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.

            6.5 EFFECT OF PLAN UPON EMPLOYMENT OR SERVICE AS DIRECTOR -- Nothing
in this Plan shall be construed as (i) an obligation of the Company or its
Subsidiaries to continue the employment of any Employee or (ii) entitling an
individual to continue to serve as a Director.

            6.6 TITLES -- Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this Plan.

            6.7 GOVERNING LAW -- The laws of the State of Kansas shall govern
the interpretation, validity and performance of the terms of this Plan
regardless of the law that might be applied under principles of conflicts of
laws.

            6.8 CONFORMITY TO SECURITIES LAWS -- The Plan is intended to conform
to the extent necessary with all provisions of the Securities Act and the
Exchange Act, and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder including, without limitation,
Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and Options shall be granted and may be exercised, only in such
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and Options granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

                                       10

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