Document:

EXHIBIT 10.1

INCENTIVE STOCK OPTION AGREEMENT

 

INSIGNIA SYSTEMS, INC.

2003 INCENTIVE STOCK OPTION PLAN

 

 

THIS AGREEMENT, made effective as of this  day of ,
20, by and between Insignia Systems, Inc., a Minnesota corporation (the “Company”), and ________ (“Optionee”).

 

W I T N E S S E T H:

 

WHEREAS, Optionee on the date hereof is an employee or officer of
the Company or one of its Subsidiaries; and

 

WHEREAS, the Company wishes to grant an incentive stock option to
Optionee to purchase shares of the Company’s Common Stock pursuant to the Company’s 2003 Incentive Stock Option Plan
(the “Plan”); and

 

WHEREAS, the Compensation Committee of the Board of Directors has
authorized the grant of an incentive stock option to Optionee and has determined that, as of the effective date of this Agreement,
the fair market value of the Company’s Common Stock is $_____ per share;

 

NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

 

1.  Grant of Option. The Company hereby grants
to Optionee on the date set forth above (the “Date of Grant”), the right and option (the “Option”) to
purchase all or portions of an aggregate of (_______) shares of Common Stock at a per share price of $____ on the terms and conditions
set forth herein, and subject to adjustment pursuant to Section 7 of the Plan. This Option is intended to be an incentive stock
option within the meaning of Section 422, or any successor provision, of the Internal Revenue Code of 1986, as amended (the “Code”),
and the regulations thereunder, to the extent permitted under Code Section 422(d).

 

2.  Duration and Exercisability.

 

a. General. The term during which this
Option may be exercised shall terminate on the close of business on [insert date 10 years from date of grant], except as
otherwise provided in Paragraphs 2(b) through 2(d) below. This Option shall become exercisable according to the following schedule:

 

	Vesting Date	Number of Shares

 

    	1

    	 

    

 

[Insert vesting dates and number of shares vesting on such dates. Unless
otherwise specified by the Compensation Committee, grants shall vest in 1/3 increments each year for three year years beginning
one year after the date of grant.]

 

Once the Option becomes exercisable to the extent of one hundred percent
(100%) of the aggregate number of shares specified in Paragraph 1, Optionee may continue to exercise this Option under the terms
and conditions of this Agreement until the termination of the Option as provided herein. If Optionee does not purchase upon an
exercise of this Option the full number of shares which Optionee is then entitled to purchase, Optionee may purchase upon any subsequent
exercise prior to this Option’s termination such previously unpurchased shares in addition to those Optionee is otherwise
entitled to purchase.

 

b. Continuous Relationship with the Company Required
(except upon Disability or Death). Except as otherwise provided in Paragraphs 2(c) and (d) below, this Option may not
be exercised unless the Optionee, at the time he or she exercises this Option, is, and has been at all times since the Date of
Grant, an employee or officer of, or consultant or advisor to, the Company as defined in Section 424(e) or (f) of the Code (“Eligible
Participant”). If Optionee’s relationship with the Company or any Subsidiary is terminated for any reason except as
provided in Paragraphs 2(c) and (d) below, this Option shall completely terminate on the earlier of (i) the close of business
on the 90th day after such termination, and (ii) the expiration date of this Option stated in Paragraph 2(a) above.
In such period following the termination of Optionee’s relationship, this Option shall be exercisable only to the extent
the Option was exercisable on the vesting date immediately preceding such termination of relationship, but had not previously
been exercised. To the extent this Option was not exercisable upon such termination of Optionee’s relationship, or if Optionee
does not exercise the Option within the time specified in this Paragraph 2(b), all rights of Optionee under this Option shall
be forfeited.

 

c. Disability. If Optionee’s relationship
with the Company ceases because of disability (as defined in Code Section 22(e), or any successor provision), this Option shall
terminate on the earlier of (i) the close of business on the one-year anniversary date of such termination of the relationship,
and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period following the termination of Optionee’s
relationship, this Option shall be exercisable only to the extent the Option was exercisable on the vesting date immediately preceding
such termination, but had not previously been exercised. To the extent this Option was not exercisable upon such termination of
the relationship, or if Optionee does not exercise the Option within the time specified in this Paragraph 2(c), all rights of
Optionee under this Option shall be forfeited.

 

d. Death. In the event of Optionee’s
death, this Option shall terminate on the earlier of (i) the close of business on the one-year anniversary date of the date of
Optionee’s death, and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period following Optionee’s
death, this Option shall be exercisable by the person or persons to whom Optionee’s rights under this Option shall have
passed by Optionee’s will or by the laws of descent and distribution only to the extent the Option was exercisable on the
vesting date immediately preceding the date of Optionee’s death. To the extent this Option was not exercisable upon the
date of Optionee’s death, or if such person or persons do not exercise this Option within the time specified in this Paragraph
2(d), all rights under this Option shall be forfeited.

 

    	2

    	 

    

 

 

3.  Manner of Exercise.

 

a. General. The Option may be exercised
only by Optionee (or other proper party in the event of death or incapacity), subject to the conditions of the Plan and subject
to such other administrative rules as the Board of Directors may deem advisable, by delivering within the Option Period written
notice of exercise to the Company at its principal office. The notice shall state the number of shares as to which the Option
is being exercised and shall be accompanied by payment in full of the Option price for all shares designated in the notice. The
exercise of the Option shall be deemed effective upon receipt of such notice by the Company and upon payment that complies with
the terms of the Plan and this Agreement. The Option may be exercised with respect to any number or all of the shares as to which
it can then be exercised and, if partially exercised, may be so exercised as to the unexercised shares any number of times during
the Option period as provided herein.

 

b. Form of Payment. Subject to approval
by the Administrator, payment of the option price by Optionee shall be in the form of cash, personal check, certified check or
previously acquired shares of Common Stock of the Company, or any combination thereof. Any stock so tendered as part of such payment
shall be valued at its Fair Market Value as provided in the Plan. For purposes of this Agreement, “previously acquired shares
of Common Stock” shall include shares of Common Stock that are already owned by Optionee at the time of exercise.

 

Optionee may in the Compensation Committee’s sole
discretion, execute a “cashless exercise” of an Option. In the event of a cashless exercise, the Optionee shall surrender
the Option the Company, and the Company shall issue the Optionee the number of shares determined as set forth below:

 

X=Y(A-B)/A

 

Where:

 

X=the number of shares to be issued to the Optionee.

Y=the number of shares with respect to which the Option is being
exercised.

A=the closing price of the Common Stock
on the date of exercise, or in the absence thereof, the fair market value on the date of exercise.

B=the Option exercise price.

 

c. Stock Transfer Records. Subject to
the terms and conditions of this Agreement and the Plan, the Option may be exercised by following the then-current procedures
for exercise that are established by the Company.

 

4.  Miscellaneous.

 

a. Employment; Rights as Shareholder.
This Agreement shall not confer on Optionee any right with respect to continuance of employment by the Company or any of its Subsidiaries,
nor will it interfere in any way with the right of the Company to terminate such employment. Optionee shall have no rights as
a shareholder with respect to shares subject to this Option until such shares have been issued to Optionee upon exercise of this
Option. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section
7 of the Plan.

 

    	3

    	 

    

 

 

b. Securities Law Compliance. The exercise
of all or any parts of this Option shall only be effective at such time as counsel to the Company shall have determined that the
issuance and delivery of Common Stock pursuant to such exercise will not violate any state or federal securities or other laws.
Optionee may be required by the Company, as a condition of the effectiveness of any exercise of this Option, to agree in writing
that all Common Stock to be acquired pursuant to such exercise shall be held, until such time that such Common Stock is registered
and freely tradable under applicable state and federal securities laws, for Optionee’s own account without a view to any
further distribution thereof, that the certificates for such shares shall bear an appropriate legend to that effect and that such
shares will be not transferred or disposed of except in compliance with applicable state and federal securities laws.

 

c. Mergers, Recapitalizations, Stock Splits,
Etc. Pursuant and subject to Section 7 of the Plan, certain changes in the number or character of the Common Stock of
the Company (through sale, merger, consolidation, exchange, reorganization, divestiture (including a spin-off), liquidation, recapitalization,
stock split, stock dividend or otherwise) shall result in an adjustment, reduction or enlargement, as appropriate, in Optionee’s
rights with respect to any unexercised portion of the Option ( i.e., Optionee shall have such “anti-dilution” rights
under the Option with respect to such events, but shall not have “preemptive” rights).

 

d. Shares Reserved. The Company shall
at all times during the option period reserve and keep available such number of shares as will be sufficient to satisfy the requirements
of this Agreement.

 

e. Withholding Taxes on Disqualifying Disposition.
In the event of a disqualifying disposition of the shares acquired through the exercise of this Option, Optionee hereby agrees
to inform the Company of such disposition. Upon notice of a disqualifying disposition, the Company may take such action as it
deems appropriate to insure that, if necessary to comply with all applicable federal or state income tax laws or regulations,
all applicable federal and state payroll, income or other taxes are withheld from any amounts payable by the Company to Optionee.
If the Company is unable to withhold such federal and state taxes, for whatever reason, Optionee hereby agrees to pay to the Company
an amount equal to the amount the Company would otherwise be required to withhold under federal or state law. Optionee may, subject
to the approval and discretion of the Board or such administrative rules it may deem advisable, elect to have all or a portion
of such tax withholding obligations satisfied by delivering shares of the Company’s Common Stock or by electing to have
the Company withhold shares of Common Stock otherwise issuable to Optionee. Such shares shall have a Fair Market Value equal to
the minimum required tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to the supplemental income resulting from the disqualifying disposition of the shares acquired
through the exercise of this Option. In no event may the Company withhold shares having a Fair Market Value in excess of such
statutory minimum required tax withholding.

 

    	4

    	 

    

 

 

f. Nontransferability. During the lifetime
of Optionee, the accrued Option shall be exercisable only by Optionee or by the Optionee’s guardian or other legal representative,
and shall not be assignable or transferable by Optionee, in whole or in part, other than by will or by the laws of descent and
distribution.

 

g. 2003 Incentive Stock Option Plan.
The Option evidenced by this Agreement is granted pursuant to the Plan, a copy of which Plan has been made available to Optionee
and is hereby incorporated into this Agreement. This Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. The Plan governs this Option and, in the event of any questions as to the construction of this Agreement or in the
event of a conflict between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.

 

h. Lockup Period Limitation. Optionee
agrees that in the event the Company advises Optionee that it plans an underwritten public offering of its Common Stock in compliance
with the Securities Act of 1933, as amended, and that the underwriter(s) seek to impose restrictions under which certain shareholders
may not sell or contract to sell or grant any option to buy or otherwise dispose of part or all of their stock purchase rights
of the underlying Common Stock, Optionee hereby agrees that for a period not to exceed 180 days from the prospectus, Optionee
will not sell or contract to sell or grant an option to buy or otherwise dispose of this option or any of the underlying shares
of Common Stock without the prior written consent of the underwriter(s) or its representative(s).

 

i. Blue Sky Limitation. Notwithstanding
anything in this Agreement to the contrary, in the event the Company makes any public offering of its securities and determines
in its sole discretion that it is necessary to reduce the number of issued but unexercised stock purchase rights so as to comply
with any state securities or Blue Sky law limitations with respect thereto, the Board of Directors of the Company shall have the
right (i) to accelerate the exercisability of this Option and the date on which this Option must be exercised, provided that the
Company gives Optionee 15 days’ prior written notice of such acceleration, and (ii) to cancel any portion of this Option
or any other option granted to Optionee pursuant to the Plan which is not exercised prior to or contemporaneously with such public
offering. Notice shall be deemed given when delivered personally or when deposited in the United States mail, first class postage
prepaid and addressed to Optionee at the address of Optionee on file with the Company.

 

j. Accounting Compliance. Optionee agrees
that, if a merger, reorganization, liquidation or other “transaction” as defined in Section 7 of the Plan occurs and
Optionee is an “affiliate” of the Company or any Subsidiary (as defined in applicable legal and accounting principles)
at the time of such transaction, Optionee will comply with all requirements of Rule 145 of the Securities Act of 1933, as amended,
and the requirements of such other legal or accounting principles, and will execute any documents necessary to ensure such compliance.

 

k. Stock Legend. The Board of Directors
may require that the certificates for any shares of Common Stock purchased by Optionee (or, in the case of death, Optionee’s
successors) shall bear an appropriate legend to reflect the restrictions of Paragraph 4(b) and Paragraphs 4(h) through 4(j) of
this Agreement.

 

    	5

    	 

    

 

 

l. Scope of Agreement. This Agreement
shall bind and inure to the benefit of the Company and its successors and assigns and Optionee and any successor or successors
of Optionee permitted by Paragraph 2 or Paragraph 4(f) above.

 

m. Arbitration. Any dispute arising out
of or relating to this Agreement or the alleged breach of it, or the making of this Agreement, including claims of fraud in the
inducement, shall be discussed between the disputing parties in a good faith effort to arrive at a mutual settlement of any such
controversy. If, notwithstanding, such dispute cannot be resolved, such dispute shall be settled by binding arbitration. Judgment
upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall be a retired
state or federal judge or an attorney who has practiced securities or business litigation for at least 10 years. If the parties
cannot agree on an arbitrator within 20 days, any party may request that the chief judge of the District Court for Hennepin County,
Minnesota, select an arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the commercial
arbitration rules of the American Arbitration Association, unless such rules are inconsistent with the provisions of this Agreement.
Limited civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved discovery disputes
may be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to
award any remedy or relief that a court of this state could order or grant; provided, however, that punitive or exemplary damages
shall not be awarded. The arbitrator may award to the prevailing party, if any, as determined by the arbitrator, all of its costs
and fees, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and reasonable attorneys’
fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be Hennepin County, Minnesota.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the day and year first above written.

 

INSIGNIA SYSTEMS, INC.

 

 

	By:	 
	 	 
	Its:	 

 

 

 

	Optionee: 	 

 

 

 

 

    	6Exhibit 4.1 MFRI Deferred Stock Purchase Plan

EXHIBIT 4.1

AS ADOPTED
MFRI, INC.
DEFERRED STOCK PURCHASE PLAN

ARTICLE I
GENERAL
1.1     PURPOSE
MFRI, Inc., a Delaware corporation ("Corporation"), hereby adopts this Deferred Stock Purchase Plan ("Plan").  The purpose of the Plan is to foster and promote the long-term financial success of the Corporation by attracting and retaining qualified key employees and non-employee directors by enabling them to participate in the Corporation's growth through purchase of deferred awards to acquire Common Stock.  Such awards may be referred to herein as "Awards."
1.2     PARTICIPATION
The members of the Board of Directors of the Corporation ("Board") who, at the time an Award is made, are not employees of the Corporation ("Directors") and the Tier I and Tier II executive officers of the Corporation, as defined in the Compensation Committee Charter of the Corporation, including such executive officers who are members of the Board ("Key Employees") are eligible to receive Awards under the Plan.  Together, the Directors and the Key Employees may be referred to herein as the "Grantees".
1.3     SHARES SUBJECT TO PLAN AWARDS
Shares of stock subject to Awards under the Plan may be in whole or in part authorized and unissued or treasury shares of the Corporation's common stock, $0.01 par value per share, or such other shares as may be substituted pursuant to Section 3.4 ("Common Stock").  The maximum number of shares of Common Stock which may be issued or delivered to Grantees under the Plan shall not exceed 200,000 (the shares referenced in Section 1.3 shall be subject to adjustment pursuant to Section 3.4).  From time to time, the number of shares subject to Awards issued and outstanding under the Plan shall be reserved for issuance under the Plan.  Shares issued or delivered pursuant to Section 3.3 shall not be subject to or count toward the maximum number of shares issued or delivered pursuant to the Plan.
1.4     GENDER AND NUMBER
Except when otherwise indicated by the context, words in the masculine gender when used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.

ARTICLE II
DEFERRED STOCK PURCHASES
2.1    DEFERRED STOCK PURCHASED BY DIRECTORS
Each Director may elect to receive, in lieu of some or all of his or her annual retainer payable quarterly in arrears, commencing with such retainer payable for the first fiscal quarter beginning after the Effective Date (as defined in Section 3.15 hereof) of the Plan, an Award consisting of that number of shares of Common Stock equal to (i) the dollar amount of the installment of such Director's annual retainer payable for such fiscal quarter divided by (ii) the Fair Market Value (as defined in Section 3.7 hereof) per share of 

EXHIBIT 4.1

the Common Stock on the date such Award is granted, rounded to the next lowest whole share.  Such election must be made by written notice delivered to the Secretary of the Corporation no later than (i) thirty (30) days following the date such Director is first elected to the Board, or (ii) for each year thereafter, the last business day prior to the start of the fiscal year in which such cash retainer is payable.  Notwithstanding the foregoing, no election shall be effective with respect to that portion of a Director's retainer payable with respect to services performed before the election becomes effective.  Any such election shall be irrevocable for the ensuing fiscal year.  Each Award pursuant to this Section 2.1 shall be fully vested upon the grant of the Award.  The Director shall be entitled to receive the shares of Common Stock subject to an Award pursuant to this Section 2.1 upon such Director's separation from service as a member of the Board, as determined under Section 409A ("Section 409A") of the Code (as defined in Section 3.6 hereof) and the regulations or other guidance issued thereunder.
2.2    DEFERRED STOCK AWARDS TO KEY EMPLOYEES
Each Key Employee may elect to receive, in lieu of a portion of his or her annual incentive compensation (if any), not to exceed 50% of such bonus payable for a given year, an Award equal to (i) the dollar amount of the Key Employee's bonus elected to be deferred, payable on such date, divided by (ii) the Fair Market Value per share of the Common Stock on the date such Award is granted, rounded to the next lowest whole share.  Such election must be made by written notice delivered to the Secretary of the Corporation no later than (i) thirty (30) days following the date such person first becomes a Key Employee, or (ii) for each fiscal year thereafter, the last business day prior to the start of each fiscal year of the Corporation in which the employee performs the services for which he or she is paid such incentive compensation; provided, however, that the first year for which such election and deferral may be made hereunder shall be with respect to the incentive compensation (if any) to be payable with respect to services performed and measured for the fiscal year commencing on February 1, 2013.  Any such election shall be irrevocable for the ensuing fiscal year.  Notwithstanding the foregoing, no election shall be effective with respect to that portion of a Key Employee's incentive compensation payable with respect to services performed before the election becomes effective.  Each such Award pursuant to this Section 2.2 shall be fully vested upon grant of the Award.  Subject to Section 2.3, a Key Employee shall be entitled to receive the shares of Common Stock subject to an Award upon the first business day of the fiscal year following the fiscal year of such Key Employee's separation of service, as determined under Section 409A and the regulations or other guidance issued thereunder.
2.3    PAYMENTS TO SPECIFIED EMPLOYEES
Notwithstanding the foregoing, if a Grantee is identified as a "specified employee" under Section 409A, as determined by the Corporation using an identification method and a specified employee identification date described in the regulations or other guidance issued under Section 409A, then, to the extent that a payment is required to be delayed for six months in order to comply with Section 409A, as determined by the Corporation, such payment amount shall be paid as soon as administratively practicable after the end of the six month period starting on the date of the Grantee's "separation from service" under Section 409A.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1    FRACTIONAL SHARES
If fractional shares would result from the grant of an Award pursuant to Article II or any dividend equivalents pursuant to Section 3.3, the number of shares of Common Stock subject to such Award shall 

EXHIBIT 4.1

be reduced to the next lowest whole share to eliminate any fractional share.  No cash shall be paid with respect to any fractional share.
3.2    NON-TRANSFERABILITY
All Awards shall be received only by the Grantee during the Grantee's lifetime.  The Grantee's right to receive shares under an Award may not be sold, assigned, transferred, alienated, commuted, anticipated, or otherwise disposed of (except by will or the laws of descent and distribution), or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation, or be otherwise encumbered, and may not become subject to attachment, garnishment, execution or other legal or equitable process, and any attempt to do so shall be null and void.
3.3    DIVIDEND EQUIVALENTS
The number of shares subject to each Award shall be increased by the award of additional shares of Common Stock if any dividend is paid with respect to the Common Stock, subject to any Award previously granted under the Plan.  The number of additional shares of Common Stock granted pursuant to this Section 3.3 shall be determined by multiplying: (a) the number of shares of Common Stock subject to each Award held by the Grantee on the dividend declaration date; by (b) the dividend paid per share by the Corporation on Common Stock; and dividing the result by (c) the Fair Market Value of a single share of Common Stock on the dividend payment date.  Additional shares of Common Stock granted pursuant to this Section 3.3 with respect to shares covered by an Award that are vested shall themselves be fully vested upon the date of grant.  Additional shares of Common Stock granted pursuant to this Section 3.3 with respect to shares covered by an Award that have not yet vested shall vest in equal installments on the dates the shares covered by such Award shall vest.
3.4    ADJUSTMENT UPON CERTAIN CHANGES
In the event of a reorganization, recapitalization, stock split or reverse stock split, combination of shares, merger, spin-off, split-up, share exchange, consolidation, rights offering or other similar change in the capital structure or shares of the Corporation, or an unusual or nonrecurring event affecting the Corporation or its financial statements or resulting from changes in applicable laws, regulations or accounting principles, adjustments in the number and kind of shares subject to Awards under this Plan as well as the treatment of fractional shares that arise as a result of such adjustments shall be made if, and in the same manner as, such adjustments are made to equity awards issued under the Corporation's 2004 Stock Incentive Plan or any replacement or successor equity plan, subject to any required action by the Board or the stockholders of the Corporation and compliance with applicable securities laws.

In the event of any transaction resulting in a Change in Control (as defined in this Section 3.4) of the Corporation, the Corporation, in its sole discretion, may elect to change the form of payment in order to make payments with respect to outstanding Awards in cash having an equivalent value in lieu of Common Stock.  For the purposes of payments made with respect to this Section 3.4, outstanding Awards shall be valued at Fair Market Value determined as of the date of the consummation of the transaction resulting in the Change in Control.  For purposes of this Section 3.4, a "Change in Control" shall be deemed to have occurred if (i) any "Person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 25% of the total combined voting power of all classes of capital stock of the Corporation entitled to vote for the election of Directors; or (ii) the Board shall approve a sale of all or substantially all of the assets of the Corporation, in one 

EXHIBIT 4.1

transaction or a series of related transactions, or (iii) the Board shall approve any merger, consolidation or other reorganization of the Corporation in which the stockholders of the Corporation immediately prior to such transaction own, in the aggregate, less than 50% of the total combined voting power of all classes of capital stock of the surviving entity normally entitled to vote for the election of directors of the surviving entity.  For purposes hereof, ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(1)(i) (as in effect on the Effective Date) pursuant to the Exchange Act.
3.5    TAXES AND TAX WITHHOLDING
The Corporation shall have the power to withhold, or require a Grantee to remit to the Corporation, an amount sufficient to satisfy any withholding or other tax due from the Corporation with respect to any Award under the Plan, and the Corporation may defer such payment or issuance unless indemnified to its satisfaction.  In no event shall the Corporation be liable for the payment of any taxes with respect to any Award under the Plan.
3.6    AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
The Board may suspend or terminate the Plan or any portion thereof at any time and may amend the Plan from time to time in such respects as the Board may deem advisable (i) in order that any Awards thereunder shall conform to or otherwise reflect any change in applicable laws or regulations; (ii) to permit the Corporation or the Grantees to enjoy the benefits of any change in applicable laws or regulations; or (iii) in any other respect the Board may deem to be in the best interests of the Company.  No such amendment, suspension or termination shall (a) impair the rights of Grantees under any outstanding Award without the consent of the Grantees affected thereby or (b) make any change that would disqualify the Plan, or any other plan of the Corporation intended to be so qualified, from the exemption provided by Rule 16b-3, promulgated pursuant to the Exchange Act ("Rule 16b-3").  No provision of the Plan which states the amount and price of securities to be awarded, specifies the timing of awards or sets forth the formula that determines the amount, price and timing of awards may be amended more than once every six months, except to comport with changes in the Internal Revenue Code of 1986, as amended ("Code").

3.7    DEFINITION OF FAIR MARKET VALUE

The term "Fair Market Value" as it relates to Common Stock on any given date means (a) the consolidated closing bid price of the Common Stock as reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ"); or (b) if the Common Stock is not listed on NASDAQ, the average of the high and low sales price as reported by such other domestic stock exchange on which the Common Stock is then listed (or, if not so reported, by the system then regarded as the most reliable source of such quotations) or, if there are no reported sales on such date, the average of the closing bid and asked prices as so reported; or (c) if the Common Stock is listed on a domestic exchange or quoted in the domestic over-the-counter market, but there are not reported sales or quotations, as the case may be, on the given date, the value determined pursuant to (a) or (b) above using the reported sale prices or quotations on the last previous date on which so reported; or (d) if none of the foregoing clauses apply, the fair value as determined in good faith by the Board in accordance with the provisions of Section 409A.

EXHIBIT 4.1

3.8     PLAN NOT EXCLUSIVE
The adoption of the Plan shall not preclude the adoption by appropriate means of any other stock option or other incentive plan for Grantees.

3.9    AWARD AGREEMENT

The Board in its sole discretion may adopt an award agreement ("Award Agreement") to evidence one or more Awards under this Plan, which shall contain the terms relating to any Award, including such other terms as the Board may approve, in its sole discretion, which are not inconsistent with the terms of this Plan.

3.10    LISTING, REGISTRATION AND LEGAL COMPLIANCE

Each Award shall be subject to the requirement that if at any time counsel to the Corporation shall determine that the listing, registration or qualification thereof, or of any shares of Common Stock or other property subject thereto, upon any securities exchange or under any foreign, federal or state securities or other law or regulation, or the consent or approval of any governmental body or the taking of any other action to comply with, or otherwise with respect to, any such law or regulation, is necessary or desirable as a condition to or in connection with the award of such Award or the issue, delivery or purchase of shares of Common Stock or other property thereunder, no such Award may be exercised or paid in Common Stock or other property unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained free of any conditions not acceptable to the Corporation, and the holder of the Award will supply the Corporation with such certificates, representations and information as the Corporation shall request and shall otherwise cooperate with the Corporation in effecting or obtaining such listing, registration, qualification, consent, approval or other action.  The Corporation may at any time impose any limitations upon the exercise, delivery or payment of any Award which, in the opinion of the Board, are necessary or desirable in order to cause the Plan or any other plan of the Corporation to comply with Rule 16b-3.

3.11    NO RIGHTS AS STOCKHOLDER

Notwithstanding anything else to the contrary contained herein, nothing in the Plan shall be deemed to give any Grantee any rights as a stockholder of the Corporation until shares of Common Stock subject to an Award have been issued or delivered to the Grantee pursuant to Article II hereof.

3.12    RIGHTS OF DIRECTORS AND EMPLOYEES

Nothing in the Plan shall confer upon any Grantee any right to serve as a Director or officer of the Corporation or to be employed by the Corporation or any of its subsidiaries for any period of time or to continue his present or any other rate of compensation, or to receive a bonus.

3.13    REQUIREMENTS OF LAW; GOVERNING LAW

The granting of Awards and the issuance of shares of Common Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.  The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.  The provisions of this Plan shall be interpreted 

EXHIBIT 4.1

so as to comply with the conditions or requirements of Rule 16b-3, unless a contrary interpretation of any such provision is otherwise required by applicable law.

3.14    COMPLIANCE WITH CODE SECTION 409A

Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A, except as otherwise determined in the sole discretion of the Board.  The Plan and each Award Agreement under the Plan is intended to meet the requirements of Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Board.  To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A.

3.15    EFFECTIVE DATE

This Plan shall be effective December 5, 2012 ("Effective Date").

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