Document:

Prepared by MERRILL CORPORATION

AMENDMENT

NO. 4 TO AMENDED AND RESTATED 

GENERAL

CREDIT AND SECURITY AGREEMENT

AND

WAIVER

 

THIS AMENDMENT NO. 4 TO

AMENDED AND RESTATED GENERAL CREDIT AND SECURITY AGREEMENT AND WAIVER, dated as

of September 28, 2001 (the “Amendment”), by and between MBC Holding Company, a

Minnesota corporation (“Borrower”), and Bremer Business Finance Corporation, a

Minnesota corporation (the “Lender”).

 

WITNESSETH:

 

WHEREAS, Borrower and Lender

are the parties to that certain Amended and Restated General Credit and Security

Agreement dated as of March 29, 2001, as amended by an Amendment No. 1 to

Amended and Restated General Credit and Security Agreement dated as of May 22,

2001, an Amendment No. 2 to Amended and Restated General Credit and Security

Agreement dated as of June 25, 2001 and an Amendment No. 3 to Amended and

Restated General Credit and Security Agreement dated as of August 31, 2001 (as

so amended, the “Original Agreement”); and

 

WHEREAS, Borrower has

requested that the Lender waive the Borrower’s compliance with certain

Paragraphs of the Original Agreement and to further amend the Original

Agreement; and

 

WHEREAS, subject to the

terms and conditions of this Amendment, the Lender will agree to the foregoing

requests of the Borrower.

 

NOW, THEREFORE, in consideration

of the foregoing and for other good and valuable consideration, the receipt and

adequacy of which is hereby acknowledged by the parties hereto, it is agreed as

follows:

 

1.             Defined

Terms.  All

capitalized terms used in this Amendment shall, except where the context

otherwise requires, have the meanings set forth in the Original Agreement, as

amended hereby.

 

2.             Amendments.  The definition of “Maturity”

appearing in Paragraph 1 of the Original Agreement is amended by extending the

date “September 30, 2001”appearing in subparagraph (b)(i) thereof to the date

“September 30, 2002.”

 

3.             Effective

Date.     This

Amendment shall become effective as of the date hereof on the date (the

‘Effective Date’) when, and only when, the Lender shall have received:

 

(a)

          Counterparts of this Amendment

executed by the Borrower;

 

(b)           An Certificate by the Borrower’s

Secretary or any Assistant Secretary in form and substance satisfactory to the

Lender;

 

(c)           Certificates of good standing for the

Borrower in the jurisdiction of its organization;

 

(d)            An Acknowledgment

and Agreement in the form provided by the Lender appropriately completed and

duly executed by Key Officer who has executed and delivered a Support

Agreement;

 

(e)           An Acknowledgment

and Agreement in the form provided by the Lender appropriately completed and

duly executed by each holder of Subordinated Debt including, without

limitation,  MBLP and Stearns Bank

National Association;

 

(f)            A waiver fee

of $5,000.00  in immediately available

funds; and

 

(g)           Such other approvals,

opinions or documents as Lender may require.

 

4.             Representations

and Warranties.  To induce

the Lender to enter into this Amendment, the Borrower represents and warrants

to the Lender as follows:

 

(a)           The execution, delivery and

performance by the Borrower of this Amendment and any other documents to which

the Borrower is a party have been duly authorized by all necessary corporate

action, do not require any approval or consent of, or any registration,

qualification or filing with, any governmental agency or authority or any

approval or consent of any other Person (including, without limitation, any

stockholder or member), do not and will not conflict with, result in any

violation of or constitute any default under, any provision of the Borrower’s articles

of incorporation or by-laws, any agreement binding on or applicable to the

Borrower or any of its property, or any law or governmental regulation or court

decree or order, binding upon or applicable to the Borrower or of any of its

property and will not result in the creation or imposition of any Security

Interest or other lien or encumbrance in or on any of its property pursuant to

the provisions of any agreement applicable to Borrower or any of its property;

 

(b)           The representations and warranties contained

in Paragraph 16 of the Original Agreement are true and correct as of the date

hereof as though made on that date after giving effect to the Amendment;

 

(c)           (i) No events have taken place and no

circumstances exist at the date hereof which would give Borrower the right to

assert a defense, offset or counterclaim to any claim by the Lender for payment

of the Obligations; and (ii) Borrower hereby releases and forever discharges

the Lender and its successors, assigns, directors, officers, agents, employees

and participants from any and all actions, causes of action, suits,

proceedings, debts, sums of money, covenants, contracts, controversies, claims

and demands, at law or in equity, which Borrower ever had or now has against

the Lender or its successors, assigns, directors, officers, agents, employees

or participants by virtue of their relationship to Borrower in connection with

the Loan Documents and the transactions related thereto;

 

(d)           The Original Agreement as amended by

this Amendment is  the legal, valid and

binding obligation of the Borrower and is enforceable in accordance with its

terms, subject only to bankruptcy, insolvency, reorganization, moratorium or

similar laws, rulings or decisions at the time in effect affecting the

enforceability of rights of creditors generally and to general equitable

principles which may limit the right to obtain equitable remedies; and

 

(e)           Other than the existing Defaults and

Events of Default described in Paragraph 9 of this Amendment, no Default or

Event of Default and no Material Adverse Occurrence has occurred and is

continuing as of the date hereof after giving effect to this Amendment.

 

5.             Reference

to and Effect on the Loan Documents.

 

(a)           From and after the effective date of

this Amendment, each reference in the Original Agreement to “this Agreement,”

“herein,” “hereof,” “hereby” or words of like import referring to the Agreement

and each reference in any other Loan Document to the “Credit Agreement,” the

“Loan Agreement,” “therein,” “thereof,” “thereby” or words of like import

referring to the Original Agreement shall mean and be a reference to the

Original Agreement as amended by this Amendment.

 

(b)           Except as specifically set forth

above, the Original Agreement remains in full force and effect and is hereby

ratified and confirmed.

 

(c)           The execution, delivery and

effectiveness of this Amendment shall not, except as expressly provided herein,

operate as a waiver of any right, power or remedy of Lender under the Original

Agreement or any other Loan Document, nor constitute a waiver of any provision

of the Original Agreement or any such Loan Document.

 

6.             Costs

and Expenses.  Borrower

agrees to pay on demand all costs and expenses of Lender in connection with the

preparation, reproduction, execution and delivery of this Amendment and the

other documents to be delivered hereunder or thereunder, including its

reasonable attorneys’ fees and legal expenses.

 

7.             Governing

Law.  This

Amendment shall be governed by and construed in accordance with the laws of the

State of Minnesota.

 

8.             Headings.  Section headings in this Amendment are

included herein for convenience of reference only and shall not constitute a

part of this Amendment for any other purpose.

 

9.             Non-Waiver.         By executing this Amendment,

the Lender does not waive any existing Default or Event of Default, including

without limitation, any Default or Event of Default arising under the Original

Agreement through July 31, 2001 because of the Borrower’s failure to comply

with any of Paragraphs 17(i), (j), (k), (l) or (m) of the Original

Agreement.  The Lender specifically

reserves all of its rights with respect to such existing Defaults and Events of

Default.

 

 

 

IN WITNESS WHEREOF, the

parties hereto have caused this Amendment to be executed by the respective officers

thereunto duly authorized as of the date first above written.

 

	

  MBC Holding Company

  
	

   

  
	

  By:_______________________________________

  
	

  Its:_______________________________________

  

 

Subscribed and sworn to before me

this 28th day of September, 2001.

 

                                                                

Notary Public

 

	

  Bremer Business Finance

  Corporation

  
	

   

  
	

  By:

  ______________________________________

  
	

  Its:_______________________________________

  

 

 

REPLACEMENT REVOLVING CREDIT NOTE

 

 

	

  $3,500,000.00

  	

   

  	

  St. Paul ,

  Minnesota

  
	

   

  	

   

  	

  September

  28, 2001

  

 

FOR VALUE RECEIVED, on the

Revolving Credit Termination Date (as defined in the Credit Agreement

hereinafter defined) the undersigned, MBC HOLDING COMPANY, a Minnesota

corporation (the “Borrower”), promises to pay to the order of BREMER

BUSINESS FINANCE CORPORATION, a Minnesota corporation (the

“Lender”),  the principal sum of Three

Million Five Hundred Thousand and No/100ths Dollars ($3,500,000.00) or, if

less, the then aggregate unpaid principal amount of the Advances as may be

borrowed by the Borrower under the Credit Agreement and are outstanding on the

Revolving Credit Termination Date.  All

Advances and all payments of principal shall be recorded by the Lender in its

records which records shall be conclusive evidence of the subject matter

thereof, absent manifest error.

 

The Borrower further

promises to pay to the order of the Lender interest on each Advance from time

to time outstanding from the date hereof until paid in full at a fluctuating

annual rate equal to the sum of the Reference Rate plus 2.0% per annum; provided,

however, that, notwithstanding anything to the contrary contained

herein, upon the occurrence and during the continuance of any Event of Default,

the rate of interest hereunder shall be the Default Rate. Interest accrued

through a calendar month shall be due and payable on the first day of the

following calendar month, commencing on October  1, 2001, and at maturity. 

Interest payable after maturity shall be payable on demand.  Each change in the fluctuating interest rate

shall take effect simultaneously with the corresponding change in the Reference

Rate.

 

All payments of principal

and interest under this Note shall be made in lawful money of the United States

of America in immediately available funds to the Lender at the Lender’s office

at 445 Minnesota Street, St, Paul, MN 55101, or at such other place as may be

designated by the Lender to the Borrower in writing.

 

This Note is the Revolving

Credit Note referred to in, and evidences indebtedness incurred under, an

Amended and Restated  General Credit and

Security Agreement dated as of March 29, 2001 (herein, as it may be amended,

modified or supplemented from time to time, called the “Credit Agreement;”

capitalized terms not otherwise defined herein being used herein as therein

defined) between the Borrower and the Lender, to which Credit Agreement

reference is made for a statement of the terms and provisions thereof,

including those under which the Borrower is permitted and required to make

prepayments and repayments of principal of such indebtedness and under which

such indebtedness may be declared to be immediately due and payable.

 

All parties hereto, whether

as makers, endorsers or otherwise, severally waive presentment, demand, protest

and notice of dishonor in connection with this Note.

 

This Note is made under and

governed by the internal laws of the State of Minnesota.

 

This Note is being executed

and delivered in replacement of, but not in payment of, that certain Revolving

Credit Note dated March 29, 2001 made by the Borrower payable to the order of

the Lender in the original principal amount of $3,500,000.00; provided, however,

that interest accrued on such replaced note through the date hereof shall be

due and payable in accordance with the Credit Agreement.

 

 

	

   

  	

  MBC Holding Company

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:________________________________

  
	

   

  	

  Its:________________________________Prepared by MERRILL CORPORATION

	

  LUMINANT WORLDWIDE

  CORPORATION

  	

  EXHIBIT

  10.1

  
	

  2000 BROAD BASED INCENTIVE PLAN

  	

   

  

 

	

  PURPOSE

  	

   

  	

  Luminant Worldwide

  Corporation, a Delaware corporation (the "Company"), wishes to

  recruit, reward, and retain employees. 

  To further these objectives, the Company hereby sets forth the

  Luminant Worldwide Corporation 2000 Broad Based Incentive Plan (the

  "Plan"), effective as of ________________ (the "Effective

  Date"), to provide options ("Options") to employees of the

  Company and its subsidiaries to purchase shares of the Company's common stock

  (the "Common Stock").

  
	

   

  	

   

  	

   

  
	

  PARTICIPANTS

  	

   

  	

  All

  Employees except directors and officers of the Company and any Eligible

  Subsidiaries are eligible for Options under this Plan.  Eligible employees become "optionees" when the

  Administrator grants them an option under this Plan.  The Administrator may also grant options

  to consultants and certain other service providers.  The term optionee

  also includes, where appropriate, a person authorized to exercise an Option

  in place of the original recipient.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Employee means any person employed as a common law

  employee of the Company or an Eligible Subsidiary.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Officer means any person at or above the Vice

  President level of management.

  
	

   

  	

   

  	

   

  
	

  ADMINISTRATOR

  	

   

  	

  The Administrator will

  be the Compensation Committee of the Board of Directors, unless the Board

  specifies another committee of the Board, but the Board may still act under

  the Plan as though it were the Compensation Committee.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator is responsible for the general operation and administration of

  the Plan and for carrying out its provisions and has full discretion in

  interpreting and administering the provisions of the Plan.  Subject to the express provisions of the

  Plan, the Administrator may exercise such powers and authority of the Board

  as the Administrator may find necessary or appropriate to carry out its

  functions.  The Administrator may

  delegate its functions (other than those described in the Granting of Options section) to officers

  or other employees of the Company.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator's powers will include, but not be limited to, the power to

  amend, waive, or extend any provision or limitation of any Option.  The Administrator may act through meetings

  of a majority of its members or by unanimous consent.

  
	

   

  	

   

  	

   

  

 

	

  GRANTING Of

  OPTIONS

  	

   

  	

  Subject to the terms of the Plan, the

  Administrator will, in its sole discretion, determine

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the persons who receive Options,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  terms of such Options,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  schedule for exercisability (including any requirements that the optionee or

  the Company satisfy performance criteria),

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  time and conditions for expiration of the Option, and

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  form of payment due upon exercise.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator's determinations under the Plan need not be uniform and need

  not consider whether possible recipients are similarly situated.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Options

  granted to employees may be "incentive stock options" ("ISOs") within the meaning of

  Section 422 of the Internal Revenue Code of 1986 (the "Code"), or the corresponding

  provision of any subsequently enacted tax statute, or nonqualified stock

  options ("NQSOs"),

  and the Administrator will specify which form of option it is granting.

  
	

   

  	

   

  	

   

  
	

  Substitutions

  	

   

  	

  The

  Administrator may also grant Options in substitution for options or other

  equity interests held by individuals who become Employees of the Company or

  of an Eligible Subsidiary as a result of the Company's or Subsidiary's

  acquiring or merging with the individual's employer or acquiring its assets.  In addition, the Administrator may provide

  for the Plan's assumption of options granted outside the Plan to persons who

  would have been eligible under the terms of the Plan to receive a grant,

  including both persons who provided services to any acquired company or

  business and persons who provided services to the Company or any

  Subsidiary.  If necessary to conform

  the Options to the interests for which they are substitutes, the

  Administrator may grant substitute Options under terms and conditions that

  vary from those the Plan otherwise requires.

  
	

   

  	

   

  	

   

  
	

  DATE OF GRANT

  	

   

  	

  The

  Date of Grant will be the date

  the Administrator grants an Option to a participant, as specified in the Plan

  or in the Administrator's minutes.

  
	

   

  	

   

  	

   

  
	

  EXERCISE PRICE

  	

   

  	

  The

  Exercise Price is the value of

  the consideration that an optionee must provide in exchange for one share of

  Common Stock.  The Administrator will

  determine the Exercise Price under each Option and may set the Exercise Price

  without regard to the Exercise Price of any other Options granted at the same

  or any other time.  The Company may

  use the consideration it receives from the optionee for general corporate

  purposes.

  

 

 

	

   

  	

   

  	

  The Exercise Price per

  share for NQSOs may not be less than 100% of the Fair Market Value of a share

  on the Date of Grant.  For ISOs, the

  Exercise Price per share must be at least 100% of the Fair Market Value (on

  the Date of Grant) of a share of Common Stock covered by the Option;

  provided, however, that if the Administrator decides to grant an ISO to

  someone covered by Code Sections 422(b)(6) and 424(d) (as a

  more-than-10%-stock-owner), the Exercise Price must be at least 110% of the

  Fair Market Value.

  
	

   

  	

   

  	

   

  
	

  FAIR MARKET 

  VALUE

  	

   

  	

   

  	

  Fair Market Value of a share of Common Stock for purposes of

  theValue Plan will be determined as follows:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  if

  the Company has no publicly-traded stock, the Administrator will determine

  the Fair Market Value for purposes of the Plan using any measure of value it

  determines in good faith to be appropriate;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  if

  the Common Stock trades on a national securities exchange, the closing sale

  price on that date;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  if

  the Common Stock does not trade on any such exchange, the closing sale price

  as reported by the National Association of Securities Dealers, Inc. Automated

  Quotation System ("Nasdaq")

  for such date;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  if

  no such closing sale price information is available, the average of the

  closing bid and asked prices that Nasdaq reports for such date; or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  if

  there are no such closing bid and asked prices, the average of the closing

  bid and asked prices as reported by any other commercial service for such

  date.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  For

  any date that is not a trading day, the Fair Market Value of a share of

  Common Stock for such date will be determined by using the closing sale price

  or the average of the closing bid and asked prices, as appropriate, for the

  immediately preceding trading day. 

  The Administrator can substitute a particular time of day or other

  measure of "closing sale price" if appropriate because of changes

  in exchange or market procedures.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator has sole discretion to determine the Fair Market Value for

  purposes of this Plan, and all Options are conditioned on the optionees'

  agreement that the Administrator's determination is conclusive and binding

  even though others might make a different and also reasonable determination.

  
					

 

	

  EXERCISABILITY

  	

   

  	

  The

  Administrator will determine the times and conditions for exercise of each

  Option.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Options

  will become exercisable at such times and in such manner as the Administrator

  determines and the Option Agreement indicates; provided, however,

  that the Administrator may, on such terms and conditions as it determines

  appropriate, accelerate the time at which the optionee may exercise any

  portion of an Option.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  If

  the Administrator does not specify otherwise, Options will become exercisable

  as to one sixth of the covered shares six months following the Date of Grant

  and one sixth after each following six months.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  No

  portion of an Option that is unexercisable at an optionee's termination of

  employment will thereafter become exercisable, unless the Option Agreement

  provides otherwise, either initially or by amendment.

  
	

   

  	

   

  	

   

  
	

  CHANGE OF 

  CONTROL

  	

   

  	

  Upon

  a Change of Control (as defined below), all Options will become fully

  exercisable, unless theoptionee's Option Agreement provides otherwise.  A Change

  of Control for this purpose means the occurrence of any one or

  more of the following events:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (i)

  sale of all or substantially all of the assets of the Company to one or more

  individuals, entities, or groups (other than an "Excluded Owner" as

  defined below);

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (ii)

  complete or substantially complete dissolution or liquidation of the Company;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (iii)

  a person, entity, or group (other than an Excluded Owner) acquires or attains

  ownership of more than 50% of the undiluted total voting power of the

  Company's then–outstanding securities eligible to vote to elect members

  of the Board ("Company Voting

  Securities");

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (iv)

  completion of a merger or consolidation of the Company with or into any other

  entity (other than an Excluded Owner) unless

  the holders of the Company Voting Securities outstanding immediately before

  such completion, together with any trustee or other fiduciary holding

  securities under a Company benefit plan, retain control because they hold

  securities that represent immediately after such merger or consolidation at

  least 50% of the combined voting power of the then outstanding voting

  securities of either the Company or the other surviving entity or its ultimate

  parent

  

 

 

	

   

  	

   

  	

   

  	

  (v) the individuals

  who constitute the Board immediately before a proxy contest cease to

  constitute at least a majority of the Board (excluding any Board seat that is

  vacant or otherwise unoccupied) immediately following the proxy contest; or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (vi)

  during any two year period, the individuals who constitute the Board at the

  beginning of the period (the "Incumbent

  Directors") cease for any reason to constitute at least a

  majority of the Board (excluding any Board seat that is vacant or otherwise

  unoccupied), provided that any individuals that a majority of Incumbent

  Directors approve for service on the Board are treated as Incumbent

  Directors.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  An

  "Excluded Owner"

  consists of the Company, any Company Subsidiary, any Company benefit plan, or

  any underwriter temporarily holding securities for an offering of such

  securities.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Even

  if other tests are met, a Change of Control has not occurred under any

  circumstance in which the Company files for bankruptcy protection or is reorganized

  following a bankruptcy filing. In addition, the acceleration will not occur

  if it would prevent use of "pooling of interest" accounting for a

  reorganization, merger, or consolidation of the Company that the Board

  approves.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator may allow conditional exercises in advance of the completion of

  a Change of Control that are then rescinded if no Change of Control occurs.

  
	

   

  	

   

  	

   

  
	

  SUBSTANTIAL

  CORPORATE

  CHANGE

  	

   

  	

  Upon

  a Change of Control that is also a Substantial

  Corporate Change, the  Plan and any unexercised Options will terminate unless either (i) such

  termination would prevent use of "pooling of interest" accounting

  for a reorganization, merger, or consolidation of the Company that the Board

  approves or (ii) provision is made in writing in connection with such

  transaction for

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  assumption or continuation of outstanding Options, or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  The

  substitution for such options or grants of any options or grants covering the

  stock or securities of a successor employer entity, or a parent or subsidiary

  of such successor, with appropriate adjustments as to the number and kind of

  shares of stock and prices, in which event the Options will continue in the

  manner and under the terms so provided.

  

 

	

   

  	

   

  	

  If an Option would

  otherwise terminate under the preceding sentence and the Fair Market Value of

  the Common Stock as a result of the Substantial Corporate Change exceeds or

  is likely to exceed the Exercise Price, the Administrator will either provide

  that

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  optionees

  will have the right, at such time before the completion of the transaction

  causing such termination as the Board or the Administrator reasonably

  designates, to exercise any unexercised portions of the Option, including

  those portions that the Change of Control will make exercisable or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  cause

  the Company, or agree to allow the successor, to cancel each Option after

  payment to the optionee of an amount in cash, cash equivalents, or successor

  equity interests substantially equal to the Fair Market Value under the

  transaction minus the Exercise Price for the shares covered by the Option

  (and, where the Board or Administrator determines it is appropriate, any

  required tax withholdings).

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator may allow conditional exercises in advance of the completion of

  a Substantial Corporate Change that are then rescinded if no Substantial

  Corporate Change occurs.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Board or other Administrator may take any actions described in the

  Substantial Corporate Changes section, without any requirement to seek

  optionee consent.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  A

  Substantial Corporate Change

  means any of the following events:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  a

  sale as described in clause (i) under Change of Control,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  a

  dissolution or liquidation as described in clause (ii),

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  an

  ownership change as described in clause (iii), but with the percentage

  ownership increased to 100%

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  merger,

  consolidation, or reorganization of the Company with one or more corporations

  or other entities in which the Company is not the surviving entity, or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  any

  other transaction (including a merger or reorganization in which the Company

  survives) approved by the Board that results in any person or entity (other

  than an Excluded Owner) owning 100% of Company Voting Securities.

  
	

   

  	

   

  	

   

  
	

  LIMITATION ON

  ISOs

  	

   

  	

  An

  Option granted to an employee will be an ISO only to the extent that  the aggregate Fair Market Value (determined at

  the Date of Grant) of the stock with respect to

  which ISOs are exercisable for the first time by the optionee during any

  calendar year (under the Plan and all other plans of the Company and its

  subsidiary corporations, within the meaning of Code Section 422(d)), does not

  exceed $100,000. This limitation applies to Options in the order in which

  such Options were granted.  If, by

  design or operation, the Option exceeds this limit, the excess will be

  treated as an NQSO.

  

 

 

	

  METHOD OF

  EXERCISE

  	

   

  	

  To

  exercise any exercisable portion of an Option, the optionee must:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Deliver

  notice of exercise to the Secretary of the Company (or to whomever the

  Administrator designates), in a form complying with any rules the

  Administrator may issue, signed or otherwise authenticated by the optionee,

  and specifying the number of shares of Common Stock underlying the portion of

  the Option the optionee is exercising;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Pay

  the full Exercise Price by cash or a cashier's or certified check for the

  shares of Common Stock with respect to which the Option is being exercised,

  unless the Administrator consents to another form of payment (which could

  include loans from the Company or the use of Common Stock); and

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Deliver

  to the Administrator such representations and documents as the Administrator,

  in its sole discretion, may consider necessary or advisable.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Payment

  in full of the Exercise Price need not accompany the written notice of

  exercise if the exercise complies with a previously-approved cashless

  exercise method, including, for example, that the notice directs that the

  stock certificates (or other indicia of ownership) for the shares issued upon

  the exercise be delivered to a licensed broker acceptable to the Company as

  the agent for the individual exercising the option and at the time the stock

  certificates (or other indicia) are delivered to the broker, the broker will

  tender to the Company cash or cash equivalents acceptable to the Company and

  equal to the Exercise Price and any required withholding taxes.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  If

  the Administrator agrees to allow an optionee to pay through tendering shares

  of Common Stock to the Company, the individual can only tender stock he has

  held for at least six months at the time of surrender.  Shares of stock offered as payment will be

  valued, for purposes of determining the extent to which the optionee has paid

  the Exercise Price, at their Fair Market Value on the date of exercise.  The Administrator may also, in its

  discretion, accept attestation of ownership of Common Stock and issue a net

  number of shares upon Option exercise, or have a broker tender to the Company

  cash equal to the exercise price and any withholding taxes.

  

 

 

	

  OPTION

  EXPIRATION

  	

   

  	

  No

  one may exercise an Option more than ten years after its Date of Grant  (or five years for ISOs granted to 10% owners

  covered by Code Sections 422(b)(6) and 424(d)).  Unless the Option Agreement provides

  otherwise, either initially or by amendment, no one may exercise an Option

  after the first to  occur of:

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  EMPLOYMENT

  TERMINATION

  	

   

  	

  The

  90th day after the date of termination of employment (other  than for death or Disability), where

  termination of employment means the time when the employer-employee or other

  service-providing relationship between the employee and the Company ends for

  any reason.  The Administrator may

  provide that Options terminate immediately upon termination of employment for

  "cause" under an employee's employment or consultant's services

  agreement or under another definition specified in the Option Agreement.  Unless the Option Agreement provides

  otherwise, termination of employment does not include instances in which the

  Company immediately rehires a common law employee as an independent

  contractor.  The Administrator, in its

  sole discretion, will determine all questions of whether particular

  terminations or leaves of absence are terminations of employment.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  GROSS

  MISCONDUCT

  	

   

  	

  For

  the Company's termination of the optionee's employment as a result of  the optionee's Gross Misconduct, the time of

  such termination.  For purposes of

  this Plan, "Gross Misconduct"

  means the optionee has

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  committed fraud,

  misappropriation, embezzlement, or willful misconduct that has resulted or is

  likely to result in material harm to the Company;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  committed

  or been indicted for or convicted of, or pled guilty or no contest to, any

  misdemeanor (other than for minor infractions or traffic violations)

  involving fraud, breach of trust, misappropriation, or other similar

  activity, or any felony; or

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  committed

  an act of gross negligence or otherwise acted with willful disregard for the

  Company's best interests in a manner that has resulted or is likely to result

  in material harm to the Company.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  If

  the optionee has a written employment agreement in effect at the time of his

  termination that specifies "cause" for termination, "Gross

  Misconduct" for purposes of his termination will refer to

  "cause" under the employment agreement, rather than to the

  foregoing definition.

  
						

 

 

	

  DISABILITY

  	

   

  	

  For

  disability, the earlier of (i) the first anniversary of the optionee's

  termination of employment for disability and (ii) 60 days after the

  optionee no longer has a disability, where "disability"

  means the inability to engage in any substantial gainful activity because of

  any medically determinable physical or mental impairment that can be expected

  to result in death or that has lasted or can be expected to last for a

  continuous period of not less than 12 months; or

  
	

   

  	

   

  	

   

  
	

  DEATH

  	

   

  	

  The

  date 12 months after the optionee's death.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  If

  exercise is permitted after termination of employment, the Option will

  nevertheless expire as of the date that the former service provider violates

  any covenant not to compete or other post-employment covenant in effect

  between the Company and the former service provider.  In addition, an optionee who exercises an

  Option more than 90 days after termination of employment with the Company

  and/or Eligible Subsidiaries will only receive ISO treatment to the extent

  the law permits, and becoming or remaining an employee of another related

  company (that is not an Eligible Subsidiary) or an independent contractor

  will not prevent loss of ISO status because of the formal termination of

  employment.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Nothing

  in this Plan extends the term of an Option beyond the tenth anniversary of

  its Date of Grant, nor does anything in this Option Expiration section make an Option exercisable that

  has not otherwise become exercisable, unless the Administrator specifies

  otherwise.

  
	

   

  	

   

  	

   

  
	

  OPTION

  AGREEMENT

  	

   

  	

  Option

  Agreements (which could be certificates) will set forth the terms ofeach Option

  and will include such terms and conditions, consistent with the Plan, as the

  Administrator may determine are necessary or advisable.  To the extent the agreement is

  inconsistent with the Plan, the Plan will govern.  The Option Agreements may contain special rules.

  
	

   

  	

   

  	

   

  
	

  PUT AND CALL

  RIGHTS

  	

   

  	

  The

  Administrator may provide in Option Agreements that the Company has the right

  (or obligation) to purchase outstanding Options, or the shares received from

  exercising an Option, under certain circumstances, including termination of

  employment for any reason or death and may provide for rights of first refusal.  The Administrator may distinguish between

  unexercisable and exercisable Options.

  
	

   

  	

   

  	

   

  
	

  STOCK SUBJECT

  TO PLAN

  	

   

  	

  Except

  as adjusted below under Corporate Changes,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  aggregate number of shares of Common Stock that may be issued under Options

  may not exceed 1,500,000,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  maximum number of shares that may be granted under Options for a single

  individual in a calendar year may not exceed 50% of the preceding number,

  provided that the individual maximum applies only to Options first made under

  this Plan and not to Options made in substitution of a prior employer's

  options or other incentives, except as Code Section 162(m) otherwise

  requires, and

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  aggregate number of shares of Common Stock that may be issued under ISOs may

  not exceed 1,500,000.

  

 

	

   

  	

   

  	

  The

  Common Stock will come from either authorized but unissued shares or from

  previously issued shares that the Company reacquires, including shares it

  purchases on the open market or holds as treasury shares.  If any Option expires, is canceled, or

  terminates for any other reason, the shares of Common Stock available under

  that Option will again be available for the granting of new Options (but will

  be counted against that calendar year's limit for a given individual).

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  No

  adjustment will be made for a dividend or other right for which the record

  date precedes the date of exercise.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  optionee will have no rights of a stockholder with respect to the shares of

  stock subject to an Option except to the extent that the Company has issued

  certificates for, or otherwise confirmed ownership of, such shares upon the

  exercise of the Option.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Company will not issue fractional shares pursuant to the exercise of an

  Option, unless the Administrator determines otherwise, but the Administrator

  may, in its discretion, direct the Company to make a cash payment in lieu of

  fractional shares.

  
	

   

  	

   

  	

   

  
	

  PERSON WHO

  MAY EXERCISE

  	

   

  	

  During

  the optionee's lifetime and except as provided under Transfers, Assignments, and Pledges, only

  the optionee or his duly appointed guardian or personal representative may

  exercise the Options.  After his

  death, his personal representative or any other person authorized under a

  will or under the laws of descent and distribution may exercise any then

  exercisable portion of an Option.  If

  someone other than the original recipient seeks to exercise any portion of an

  Option, the Administrator may request such proof as it may consider necessary

  or appropriate of the person's right to exercise the Option.

  
	

   

  	

   

  	

   

  
	

  ADJUSTMENTS

  UPON CHANGES

  IN CAPITAL

  STOCK

  	

   

  	

  Subject

  to any required action by the Company (which it agrees to promptly take) or

  its stockholders, and subject to the provisions ofapplicable

  corporate law, if, after the Date of Grant of an Option,

  
	

   

  	

   

  	

   

  	

  the outstanding shares

  of Common Stock increase or decrease or change into or are exchanged for a

  different number or kind of security because of any

  recapitalization, reclassification, stock split, reverse stock split,

  combination of shares, exchange of shares, stock dividend, or other

  distribution payable in capital stock, or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  some

  other increase or decrease in such Common Stock occurs without the Company's

  receiving consideration (excluding, unless the Administrator determines

  otherwise, stock repurchases),

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  the

  Administrator must make a proportionate and appropriate adjustment in the

  number of shares of Common Stock underlying each Option, so that the

  proportionate interest of the optionee immediately following such event will,

  to the extent practicable, be the same as immediately before such event.  (This adjustment does not apply to Common

  Stock that the optionee has already purchased.)  Unless the Administrator determines another method would be

  appropriate, any such adjustment to an Option will not change the total price

  with respect to shares of Common Stock underlying the unexercised portion of

  the Option but will include a corresponding proportionate adjustment in the

  Option's Exercise Price.  The Board or

  other Administrator may take any actions described in the Adjustments upon Changes in Capital Stock

  section without any requirement to seek optionee consent.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator will make a commensurate change to the maximum number and kind

  of shares provided in the Stock Subject to

  Plan section.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Any

  issue by the Company of any class of preferred stock, or securities

  convertible into shares of common or preferred stock of any class, will not

  affect, and no adjustment by reason thereof will be made with respect to, the

  number of shares of Common Stock subject to any Option or the Exercise Price

  except as this Adjustments

  section specifically provides.  The

  grant of an Option under the Plan will not affect in any way the right or

  power of the Company to make adjustments, reclassifications, reorganizations

  or changes of its capital or business structure, or to merge or to

  consolidate, or to dissolve, liquidate, sell, or transfer all or any part of

  its business or assets.

  

 

 

	

  SUBSIDIARY

  EMPLOYEES

  	

   

  	

  Employees

  of Company Subsidiaries will be entitled to participate in the Plan, except

  as otherwise designated by the Board of Directors or the Administrator.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Eligible

  Subsidiary means each of the Company's Subsidiaries, except as the

  Administrator otherwise specifies. 

  For ISO grants, Subsidiary

  means any corporation (other than the Company) in an unbroken chain of

  corporations beginning with the Company if, at the time an Option is granted

  to a Participant under the Plan, each corporation (other than the last

  corporation in the unbroken chain) owns stock possessing 50% or more of the

  total combined voting power of all classes of stock in another corporation in

  such chain.  For ISOs, Subsidiary also

  includes a single-member limited liability company included within the chain

  described in the preceding sentence. 

  The Board or the Administrator may use a different definition of

  Subsidiary for NQSOs.

  
	

   

  	

   

  	

   

  
	

  LEGAL

  COMPLIANCE

  	

   

  	

  The

  Company will not issue any shares of Common Stock under an Option until all

  applicable requirements imposed by Federal and state securities and other

  laws, rules, and regulations, and by any applicable regulatory agencies or

  stock exchanges, have been fully met. 

  To that end, the Company may require the optionee to take any

  reasonable action to comply with such requirements before issuing such

  shares.  No provision in the Plan or

  action taken under it authorizes any action that Federal or state laws

  otherwise prohibit.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Plan is intended to conform to the extent necessary with all provisions of

  the Securities Act of 1933 ("Securities

  Act") and the Securities Exchange Act of 1934 and all

  regulations and rules the Securities and Exchange Commission issues under

  those laws.  Notwithstanding anything

  in the Plan to the contrary, the Administrator must administer the Plan, and

  Options may be granted and exercised, only in a way that conforms to such

  laws, rules, and regulations.  To the

  extent permitted by applicable law, the Plan and any Options will be treated

  as amended to the extent necessary to conform to such laws, rules, and regulations.

  
	

   

  	

   

  	

   

  
	

  PURCHASE FOR

  INVESTMENT

  AND OTHER

  RESTRICTIONS

  	

   

  	

  Unless

  a registration statement under the Securities Act covers the shares of Common

  Stock an optionee receives upon exercising his Option, the Administrator may

  require, at the time of such exercise, that the optionee agree in writing to

  acquire such shares for investment and not for public resale or distribution,

  unless and until the shares subject to the Option are registered under the

  Securities Act.  Unless the shares are

  registered under the Securities Act, the optionee must acknowledge:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  that

  the shares purchased on exercise of the Option are not so registered,

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  that

  the optionee may not sell or otherwise transfer the shares unless

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  such

  sale or transfer complies with all applicable laws, rules, and regulations,

  including all applicable Federal and state securities laws, rules, and

  regulations, and either

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  the

  shares have been registered under the Securities Act in connection with the

  sale or transfer thereof, or

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  counsel

  satisfactory to the Company has issued an opinion satisfactory to the Company

  that the sale or other transfer of such shares is exempt from registration

  under the Securities Act.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Additionally,

  the Common Stock, when issued upon the exercise of an Option, will be subject

  to any other transfer restrictions, rights of first refusal, and rights of

  repurchase set forth in or incorporated by reference into other applicable

  documents, including the Option Agreements, or the Company's articles or

  certificate of incorporation, by–laws, or generally applicable

  stockholders' agreements.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  The

  Administrator may, in its sole discretion, take whatever additional actions

  it deems appropriate to comply with such restrictions and applicable laws,

  including placing legends on certificates and issuing stop-transfer orders to

  transfer agents and registrars.

  
					

 

 

	

  TAX WITHHOLDING

  	

   

  	

  The

  optionee must satisfy all applicable Federal, state, and local income and

  employment tax withholding requirements before the Company will deliver stock

  certificates or otherwise recognize ownership upon the exercise of an

  Option.  The Company may decide to

  satisfy the withholding obligations through additional withholding on salary or

  wages.  If the Company does not or cannot

  withhold from other compensation, the optionee must pay the Company, with a

  cashier's check or certified check, the full amounts, if any, required for

  withholding.  Payment of withholding

  obligations is due at the same time as is payment of the Exercise Price.  If the Administrator so determines, the

  optionee may instead satisfy the withholding obligations by directing the

  Company to retain shares from the Option exercise, by tendering previously

  owned shares, or by attesting to his ownership of shares (with the

  distribution of net shares), or by having a broker tender to the Company cash

  equal to the withholding taxes.

  
	

   

  	

   

  	

   

  
	

  TRANSFERS,

  ASSIGNMENTS,

  AND PLEDGES

  	

   

  	

  Unless

  the Administrator otherwise approves in advance in writing for estate

  planning or other purposes, an Option may not be assigned, pledged, or

  otherwise  transferred in any way,

  whether by operation of law or otherwise or through any legal or equitable

  proceedings (including bankruptcy), by the optionee to any person, except by

  will or by operation of applicable laws of descent and distribution.  If necessary to comply with Rule 16b–3,

  the optionee may not transfer or pledge shares of Common Stock acquired upon

  exercise of an Option until at least six months have elapsed from (but

  excluding) the Date of Grant, unless the Administrator approves otherwise in

  advance in writing.  The Administrator

  may, in its discretion, expressly provide that an optionee may transfer his

  Option, without receiving consideration, to (i) members of his immediate

  family (children, grandchildren, or spouse), (ii) trusts for the benefit

  of such family members, or (iii) partnerships whose only partners are

  such family members.

  
	

   

  	

   

  	

   

  
	

  AMENDMENT OR

  TERMINATION

  OR PLAN AND

  OPTIONS

  	

   

  	

  The

  Board may amend, suspend, or terminate the Plan at any time, without the

  consent of the optionees or their beneficiaries; provided, however,

  thatsuch actions are consistent with this

  section.  Except as required by lawor by the

  Substantial Corporate Changes section, the Administrator may not, without the

  optionee's or beneficiary's consent, modify the terms and conditions of an

  Option so as to materially adversely affect the optionee.  No amendment, suspension, or termination

  of the Plan will, without the optionee's or beneficiary's consent, terminate

  or materially adversely affect any right or obligations under any outstanding

  Options, except as provided in the Substantial Corporate Changes Section.

  
	

   

  	

   

  	

   

  
	

  PRIVILEGES OF

  STOCK

  OWNERSHIP

  	

   

  	

  No

  optionee and no beneficiary or other person claiming under or through  such optionee will have any right, title, or

  interest in or to any shares of  Common Stock allocated or reserved under the

  Plan or subject to any Option except as to such shares of Common Stock, if

  any, already issued to such optionee.

  
	

   

  	

   

  	

   

  
	

  EFFECT ON

  OTHER PLANS

  	

   

  	

  Whether

  exercising an Option causes the optionee to accrue or receive  additional benefits under any pension or other

  plan is governed solely by the terms of such other plan.

  
	

   

  	

   

  	

   

  
	

  LIMITATIONS ON

  LIABILITY

  	

   

  	

  Notwithstanding

  any other provisions of the Plan, no individual acting as a  director, officer, other employee, or agent of

  the Company will be liable to any optionee, former optionee, spouse,

  beneficiary, or any other person for any claim, loss, liability, or expense

  incurred in connection with the Plan, nor will such individual be personally

  liable because of any contract or other instrument he executes in such other

  capacity.  The Company will indemnify

  and hold harmless each director, officer, other employee, or agent of the

  Company to whom any duty or power relating to the administration or

  interpretation of the Plan has been or will be delegated, against any cost or

  expense (including attorneys' fees) or liability (including any sum paid in

  settlement of a claim with the Board's approval) arising out of any act or

  omission to act concerning this Plan unless arising out of such person's own

  fraud or bad faith.

  
	

   

  	

   

  	

   

  
	

  NO EMPLOYMENT

  CONTRACT

  	

   

  	

  Nothing

  contained in this Plan constitutes an employment contract between  the Company and the optionees.  The Plan does not give any optionee any

  right to be retained in the Company's employ, nor does it enlarge or diminish

  the Company's right to end the optionee's employment or other relationship

  with the Company.

  
	

   

  	

   

  	

   

  
	

  APPLICABLE LAW

  	

   

  	

  The

  laws of the State of Delaware (other than its choice of law provisions)

  govern this Plan and its interpretation.

  
	

   

  	

   

  	

   

  
	

  DURATION OF

  PLAN

  	

   

  	

  Unless

  the Board extends the Plan's term, the Administrator may not grant  Options after September 14, 2009.  The Plan will then terminate but will

  continue to govern unexercised and unexpired Options.

  
	

   

  	

   

  	

   

  
	

  APPROVAL OF

  THE PLAN

  	

   

  	

  The

  Plan must be submitted to Company stockholders for their approval  within 12 months before or after the Board

  adopts the Plan to qualify any Options designated as ISOs for treatment as

  such.  If the stockholders do not so

  approve the Plan, the Plan and any outstanding ISOs will be treated as void

  and of no effect.

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