Document:

EXHIBIT
4.1

 

 

 

 

 

AMERICAN
MEDICAL TECHNOLOGIES, INC.

2007 EQUITY INCENTIVE PLAN

 

AMERICAN
MEDICAL TECHNOLOGIES, INC.

2007 Equity Incentive Plan

American Medical Technologies, Inc. hereby adopts the
2007 Equity Incentive Plan, effective as of July 2, 2007, as follows:

SECTION 1

BACKGROUND, PURPOSE AND DURATION

1.1           Background and Effective Date.  The Plan provides for the granting of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights
(or SARs), Restricted Stock, Performance Units, and Performance Shares.  The Plan is adopted and effective as of July
2, 2007.  The Company will seek
stockholder approval in the manner and to the degree required under Applicable
Laws.  If the Company fails to obtain stockholder
approval of the Plan within twelve (12) months after the date this Plan is
adopted by the Board, pursuant to Section 422 of the Code, any Option granted
as an Incentive Option at any time under the Plan will not qualify as an
Incentive Option within the meaning of the Code and will be deemed to be a
Non-Statutory Option.

1.2           Purpose of the Plan.  The purpose of the Plan is to promote the
success, and enhance the value, of the Company by aligning the interests of
Participants with those of the Company’s shareholders, and by providing
Participants with an incentive for outstanding performance.  The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of outstanding individuals, upon whose judgment, interest, and special
effort the success of the Company largely is dependent.

1.3           Duration of the Plan.  The Plan shall commence on the date specified
in Section 1.1 and
subject to Section 12 (concerning the Board’s right to amend or terminate the
Plan), shall remain in effect thereafter.

SECTION 2

DEFINITIONS

The following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context:

2.1           “1934
Act”  means the Securities
Exchange Act of 1934, as amended. 
Reference to a specific section of the Exchange Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section
or regulation.

2.2           “Affiliate”
means any corporation or any other entity (including, but not limited to,
partnerships and joint ventures) controlling, controlled by, or under common
control with the Company (e.g., a parent or subsidiary of the Company).

2.3           “Affiliated
SAR” means an SAR that is granted in connection with a related
Option, and which automatically will be deemed to be exercised at the same time
that the related Option is exercised.

2.4           “Applicable Laws”  means the requirements relating to the
administration of equity plans under U. S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or 

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quotation system on which the Shares are listed or
quoted and the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.

2.5           “Award”
means, individually or collectively, a grant under the Plan of Nonqualified
Stock Options, Incentive Stock Options, SARs, Restricted Stock, Performance
Units, or Performance Shares.

2.6           “Award
Agreement” means the written agreement setting forth the terms
and provisions applicable to each Award granted under the Plan.

2.7           “Board”
or “Board of Directors” means the Board of Directors of the
Company.

2.8           “Change
in Control” is defined in Section 15.4.

2.9           “Code”
means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code
or regulation thereunder shall include such section or regulation, any valid
regulation promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such
section or regulation.

2.10         “Committee”
means the committee appointed by the Board to administer the Plan pursuant to
Section 3.1, or if no committee has been so appointed, then Committee
means the Board.

2.11         “Company”
means American Medical Technologies, Inc., a Delaware corporation, or any
successor thereto.

2.12         “Consultant”
means an individual who provides bona fide services to the Company and/or an
Affiliate.

2.13         “Director”
means any individual who is a member of the Board of Directors of the Company.

2.14         “Disability”
means a permanent and total disability within the meaning of Code
Section 22(e)(3).

2.15         “Employee”
means an employee of the Company or of an Affiliate, whether such employee is
so employed at the time the Plan is adopted or becomes so employed subsequent
to the adoption of the Plan.

2.16         “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.  Reference to a specific section of ERISA
shall include such section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending, supplementing or
superseding such section.

2.17         “Fair
Market Value” means as of any date, the value of a Share
determined as follows:

(a)           If the Shares are listed on any established stock exchange
or a national market system, its Fair Market Value shall be the closing sales
price for such Share (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the day of, or the last market trading day prior
to, the day of determination, as reported in The Wall Street Journal or such
other source as the Committee deems reliable;

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(b)           If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
the Share shall be the mean between the high bid and low asked prices for the
Shares on the day of, or the last market trading day prior to, the day of
determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable; or

(c)           the Fair Market Value shall be determined in
good faith by the Committee.

2.18         “Freestanding
SAR” means a SAR that is granted independently of any Option.

2.19         “Incentive
Stock Option” or “ISO” means an option to purchase Shares, which
is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.

2.20         “Nonqualified
Stock Option” means an option to purchase Shares which is not
intended to be an Incentive Stock Option.

2.21         “Option”
means an Incentive Stock Option or a Nonqualified Stock Option.

2.22         “Option
Price” means the price at which a Share may be purchased
pursuant to an Option.

2.23         “Participant”
means an Employee, Consultant or Director who has an outstanding Award.

2.24         “Performance
Share” means an Award granted to an Employee pursuant to Section
8 having an initial value equal to the
Fair Market Value of a Share on the date of grant.

2.25         “Performance
Unit” means an Award granted to an Employee pursuant to Section
8 having an initial value (other than
the Fair Market Value of a Share) that is established by the Committee at the
time of grant.

2.26         “Period
of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions.

2.27         “Plan”
means the American Medical Technologies, Inc. 2007 Equity Incentive Plan, as
set forth in this instrument and as hereafter amended from time to time.

2.28         “Restricted
Stock” means an Award granted to a Participant pursuant to
Section 7.

2.29         “Retirement”
means, in the case of an Employee, a Termination of Employment by reason of the
Employee’s retirement at or after age 62.

2.30         “Rule
16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

2.31         “Section
16 Person” means a person who, with respect to the Shares, is
subject to Section 16 of the 1934 Act.

2.32         “Shares”
means the shares of common stock of the Company.

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2.33         “Stock
Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, that pursuant to the terms of Section 7 is
designated as an SAR.

2.34         “Subsidiary”
means any “subsidiary corporation” (other than the Company) as defined in Code
Section 424(f).

2.35         “Tandem
SAR” means an SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

2.36         “Termination
of Employment” means a cessation of the employee-employer or
director or other service arrangement relationship between an Employee,
Consultant or Director and the Company or an Affiliate for any reason, including,
but not by way of limitation, a termination by resignation, discharge, death,
Disability, Retirement, or the disaffiliation of an Affiliate, but excluding
any such termination where there is a simultaneous reemployment or
re-engagement by the Company or an Affiliate.

SECTION 3

ADMINISTRATION

3.1           The
Committee.  The Plan shall
be administered by the Board of Directors or by a committee of the Board that
meets the requirements of this Section 3.1 (hereinafter referred to as “the Committee”).  The Committee shall consist of not less than
two (2) Directors.  The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors.  At
such time as the Company has independent directors, any Committee shall be
comprised solely of Directors who are both “outside directors” under Rule 16b-3
and “independent directors” under the
requirements of any national securities exchange or system upon which the
Shares are then listed and/or traded.

3.2           Authority
of the Committee.  The
Committee shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but not limited
to, the power (a) to determine which Employees, Consultants and Directors shall
be granted Awards, (b) to prescribe the terms and conditions of such Awards,
(c) to interpret the Plan and the Awards, (d) to adopt rules for the
administration, interpretation and application of the Plan as are consistent
therewith, and (e) to interpret, amend or revoke any such rules.

The Committee, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or any part of its authority and
powers under the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may not delegate its authority and
powers with respect to Section 16 Persons.

3.3           Decisions
Binding.  All
determinations and decisions made by the Committee shall be final, conclusive,
and binding on all persons, and shall be given the maximum deference permitted
by law.

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SECTION 4

SHARES SUBJECT TO THE PLAN

4.1           Shares
Available.

4.1.1        Maximum
Shares Available under Plan.  The
aggregate number of Shares available for issuance under the Plan may not exceed
one million (1,000,000) Shares.

4.1.2        Adjustments.
 All Share numbers in this Section 4.1 are subject to adjustment as
provided in Section 15.

4.2           Number of Shares.    The
following rules will apply for purposes of the determination of the number of
Shares available for grant under the Plan:

(a)           While an Award is outstanding, it shall be counted against
the authorized pool of Shares, regardless of its vested status.

(b)           The grant of an Option or Restricted Stock shall reduce
the Shares available for grant under the Plan by the number of Shares subject
to such Award.

(c)           The grant of a Tandem SAR shall reduce the number of
Shares available for grant by the number of Shares subject to the related
Option (i.e., there is no double counting of Options and their related Tandem
SARs); provided, however,
that, upon the exercise of such Tandem SAR, the authorized Share pool shall be
credited with the appropriate number of Shares representing the number of
shares reserved for such Tandem SAR less the number of Shares actually
delivered upon exercise thereof or the number of Shares having a Fair Market
Value equal to the cash payment made upon such exercise.

(d)           The grant of an Affiliated SAR shall reduce the number of
Shares available for grant by the number of Shares subject to the SAR, in addition
to the number of Shares subject to the related Option; provided, however, that,
upon the exercise of such Affiliated SAR, the authorized Share pool shall be
credited with the appropriate number of Shares representing the number of
shares reserved for such Affiliated SAR less the number of Shares actually
delivered upon exercise thereof or the number of Shares having a Fair Market
Value equal to the cash payment made upon such exercise.

(e)           The grant of a Freestanding SAR shall reduce the number of
Shares available for grant by the number of Freestanding SARs granted; provided, however, that, upon the
exercise of such Freestanding SAR, the authorized Share pool shall be credited
with the appropriate number of Shares representing the number of shares reserved
for such Freestanding SAR less the number of Shares actually delivered upon
exercise thereof or the number of Shares having a Fair Market Value equal to
the cash payment made upon such exercise.

(f)            The Committee shall in each case determine the appropriate
number of Shares to deduct from the authorized pool in connection with the
grant of Performance Units and/or Performance Shares.

(g)           To the extent that an Award is settled in cash rather than
in Shares, the authorized Share pool shall be credited with the appropriate
number of Shares having a Fair Market Value equal to the cash settlement of the
Award.

4.3           Lapsed
Awards.  If an Award is
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the 

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termination of a related Option upon exercise of the
corresponding Tandem SAR), any Shares subject to such Award again shall be
available to be the subject of an Award.

SECTION 5

STOCK OPTIONS

5.1           Grant of
Options.  Options may be granted to Employees,
Consultants and Directors at any time and from time to time, as determined by
the Committee in its sole discretion. The Committee, in its sole discretion,
shall determine the number of Shares subject to Options granted to each
Participant.  The Committee may grant
ISOs, NQSOs, or a combination thereof.

5.2           Award
Agreement.  Each Option shall be evidenced by an Award
Agreement that shall specify the Option Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee,
in its discretion, shall determine. The Award Agreement also shall specify
whether the Option is intended to be an ISO or a NQSO.

5.3           Option
Price.  Subject to the provisions of this
Section 5.3, the Option Price for each Option shall be determined by the
Committee in its sole discretion.

5.3.1        Nonqualified
Stock Options.  In the case of a Nonqualified Stock Option,
the Option Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date that the Option is granted.

5.3.2        Incentive
Stock Options.     In the case of an Incentive Stock Option,
the Option Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date that the Option is granted; provided, however, that if at the time
that the Option is granted, the Employee (together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code)
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the Option Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value of a Share on the date that the Option is granted.

5.3.3        Substitute
Options.  Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), persons who
become Employees, Consultants or Directors on account of such transaction may
be granted Options in substitution for options granted by their former
employer.  If such substitute Options are
granted, the Committee, in its sole discretion, may determine that such
substitute Options shall have an exercise price less than 100% of the Fair
Market Value of the Shares on the date the Option is granted.

5.4           Expiration of Options. 
Unless the applicable stock option agreement provides otherwise, each
Option shall terminate upon the first to occur of the events listed in Section
5.4.1, subject to Section 5.4.2.

5.4.1        Expiration
Dates.

(a)           The date for termination of the Option set forth in the
Award  Agreement;

(b)           The expiration of ten years from the date the Option was
granted, or

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(c)           The expiration of three months from the date of the
Participant’s Termination of Employment for a reason other than the Participant’s
death, Disability or Retirement, or

(d)           The expiration of twelve months from the date of the
Participant’s Termination of Employment by reason of Disability, or

(e)           The expiration of twelve months from the
date of the Participant’s death, if such death occurs while the Participant is
in the employ or service of the Company or an Affiliate.

5.4.2        Committee
Discretion.   The
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable. 
After the Option is granted, the Committee, in its sole discretion may
extend the maximum term of such Option. 
The foregoing discretionary authority is subject to the limitations and
restrictions on Incentive Stock Options set forth in Section 5.8.

5.5           Exercise
of Options.  Options granted under the Plan shall be
exercisable at such times, and subject to such restrictions and conditions, as
the Committee shall determine in its sole discretion.  After an Option is granted, the Committee, in
its sole discretion, may accelerate the exercisability of the Option.

5.6           Payment.  The
Committee shall determine the acceptable form of consideration for exercising
an Option, including the method of payment. 
In the case of an Incentive Stock Option, the Committee shall determine
the acceptable form of consideration at the time of grant.  Such consideration may consist entirely of:

(a)           cash;

(b)           check;

(c)           full recourse promissory note;

(d)           other Shares which (i) in the
case of Shares acquired upon exercise of an Option, have been owned by the
Participant for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised;

(e)           consideration received by the Company
from a licensed broker under a cashless exercise program implemented by the
Company to facilitate “same day” exercises and sales of Options;

(f)            a reduction in the amount of any
Company liability to the Participant, including any liability attributable to
the Participant’s participation in any Company-sponsored deferred compensation
program or arrangement;

(g)           any combination of the foregoing
methods of payment; or

(h)           such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.

5.7           Restrictions
on Share Transferability.  The Committee may impose such restrictions on
any Shares acquired pursuant to the exercise of an Option, as it may deem
advisable, including, but not limited to, restrictions related to Federal
securities laws, the requirements of any national securities 

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exchange or system upon
which such Shares are then listed and/or traded, and/or any blue sky or state
securities laws.

5.8           Certain
Additional Provisions for Incentive Stock Options.

5.8.1        Exercisability.  The aggregate Fair Market Value (determined
at the time the Option is granted) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by any Employee
during any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000.

5.8.2        Termination
of Employment.  No
Incentive Stock Option may be exercised more than three months after the
Participant’s termination of employment for any reason other than Disability or
death, unless (a) the Participant dies during such three-month period, and (b)
the Award Agreement and/or the Committee permits later exercise. No Incentive
Stock Option may be exercised more than one year after the Participant’s
termination of employment on account of Disability, unless (a) the Participant
dies during such one-year period, and (b) the Award Agreement and/or the
Committee permit later exercise.

5.8.3        Employees
Only.  Incentive Stock
Options may be granted only to persons who are Employees of the Company and/or
a Subsidiary at the time of grant.

5.8.4        Expiration.
No Incentive Stock Option may be exercised after the expiration of 10 years
from the date such Option was granted; provided, however,
that if the Option is granted to an Employee who, together with persons whose
stock ownership is attributed to the Employee pursuant to Section 424(d) of the
Code, owns stock possessing more than 10% of the total combined voting power of
all classes of the stock of the Company or any of its Subsidiaries, the Option
may not be exercised after the expiration of 5 years from the date that it was
granted.

5.9           Nontransferability of
Options.  No Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, the laws of descent and distribution, or as provided under
Section 9.  All Options granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.

SECTION 6

STOCK APPRECIATION RIGHTS

6.1           Grant of
SARs.  An SAR may be granted to an Employee,
Consultant or Director at any time and from time to time as determined by the
Committee, in its sole discretion.  The
Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination
thereof.  The Committee shall have
complete discretion to determine the number of SARs granted to any Participant,
and consistent with the provisions of the Plan, the terms and conditions
pertaining to such SARs.  However, the
grant price of a Freestanding SAR shall be at least equal to the Fair Market
Value of a Share on the date of grant. 
The grant price of Tandem or Affiliated SARs shall equal the Option
Price of the related Option.

6.2           Exercise
of Tandem SARs.  Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option.  A Tandem SAR may be exercised only with
respect to the Shares for which its related Option is then exercisable.

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6.2.1        ISOs.  Notwithstanding any contrary provision of the
Plan, with respect to a Tandem SAR granted in connection with an ISO: (i) the
Tandem SAR shall expire no later than the expiration of the underlying ISO;
(ii) the value of the payout with respect to the Tandem SAR shall be for no
more than one hundred percent (100%) of the difference between the Option Price
of the underlying ISO and the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem
SAR shall be exercisable only when the Fair Market Value of the Shares subject
to the ISO exceeds the Option Price of the ISO.

6.3           Exercise
of Affiliated SARs.  An Affiliated SAR shall be deemed to be
exercised upon the exercise of the related Option.  The deemed exercise of an Affiliated SAR
shall not necessitate a reduction in the number of Shares subject to the
related Option.

6.4           Exercise
of Freestanding SARs.  Freestanding SARs shall be exercisable on
such terms and conditions as the Committee, in its sole discretion, shall
determine.

6.5           SAR
Agreement.  Each SAR shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee,
in its sole discretion, shall determine.

6.6           Expiration
of SARs.  An SAR granted under the Plan shall expire
upon the date determined by the Committee, in its sole discretion, and set
forth in the Award Agreement. 
Notwithstanding the foregoing, the rules of Section 5.4 (pertaining to
Options) also shall apply to SARs.

6.7           Payment of SAR Amount. 
Upon exercise of an SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:

(a)           The difference between the Fair Market Value of a Share on
the date of exercise over the grant price; times

(b)           The number of Shares with respect to which the SAR is
exercised.

At
the discretion of the Committee, the payment upon SAR exercise may be in cash,
in Shares of equivalent value, or in some combination thereof.

6.8           Nontransferability of SARs.  No
SAR granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will, the laws of descent
and distribution, or as permitted under Section 9.  An SAR granted to a Participant shall be
exercisable during the Participant’s lifetime only by such Participant.

SECTION 7

RESTRICTED STOCK

7.1           Grant of
Restricted Stock.  Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Employees, Consultants or Directors in such amounts as the
Committee, in its sole discretion, shall determine.

7.2           Restricted
Stock Agreement.  Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine.  Unless the Committee determines otherwise,
shares of Restricted Stock shall be held by the Company as escrow agent until
the restrictions on such Shares have lapsed.

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7.3           Transferability. 
Except as provided in this Section 7, Shares of Restricted Stock may not
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction.  All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.

7.4           Other
Restrictions.  The Committee, in its sole discretion, may
impose such other restrictions on any Shares of Restricted Stock as it may deem
advisable including, without limitation, restrictions based upon the
achievement of specific performance goals (Company-wide, divisional, and/or
individual), and/or restrictions under applicable Federal or state securities
laws; and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions. 
For example, the Committee may determine that some or all certificates
representing Shares of Restricted Stock shall bear the following legend:

“The sale or other
transfer of the shares of stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the American Medical Technologies,
Inc. 2007 Equity Incentive Plan, and in a Restricted Stock Agreement.  A copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of American Medical Technologies,
Inc.”

7.5           Removal
of Restrictions.  Except as otherwise provided in this Section
7, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall be released from escrow as soon as practicable after the last
day of the Period of Restriction.  The
Committee, in its discretion, may accelerate the time at which any restrictions
shall lapse, and/or remove any restrictions. 
After the restrictions have lapsed, the Participant shall be entitled to
have any legend or legends under Section 7.4 removed from his or her Share
certificate, and the Shares shall be freely transferable by the Participant.

7.6           Voting
Rights.  During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares, unless the Committee
determines otherwise.

7.7           Dividends
and Other Distributions.  During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive
all dividends and other distributions paid with respect to such Shares, unless
otherwise provided in the Award Agreement. 
If any such dividends or distributions are paid in Shares, the Shares shall
be subject to the same restrictions on transferability and forfeitability as
the Shares of Restricted Stock with respect to which they were paid.

7.8           Return of Restricted Stock
to Company.  Subject to the applicable Award Agreement and
Section 7.5, upon the earlier of (a) the Participant’s Termination of
Employment, or (b) the date set forth in the Award Agreement, the Restricted
Stock for which restrictions have not lapsed shall revert to the Company and,
subject to Section 4.3, again shall become available for grant under the Plan.

7.9           Repurchase Option.  Unless
the Committee determines otherwise, the Award Agreement shall grant the Company
a repurchase option exercisable upon the voluntary or involuntary termination
of the Participant’s service with the Company for any reason (including death
or Disability).  The purchase price for
Shares repurchased pursuant to the Award Agreement shall be the original price
paid by the Participant and may be paid by cancellation of any indebtedness of
the Participant to the Company.  The
repurchase option shall lapse at a rate determined by the Committee.

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7.10         Unrestricted Shares.  Notwithstanding anything to the contrary in
this Section 7, and subject to Applicable Laws, the Committee may issue Shares
of Restricted Stock without any applicable restrictions.

SECTION 8

PERFORMANCE UNITS AND PERFORMANCE SHARES

8.1           Grant of
Performance Units/Shares.  Performance Units and Performance Shares may
be granted to Employees, Consultants or Directors at any time and from time to
time, as shall be determined by the Committee, in its sole discretion.  The Committee shall have complete discretion
in determining the number of Performance Units and Performance Shares granted
to each Participant.

8.2           Value of
Performance Units/Shares.  Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant.  Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant.  The Committee shall set performance goals in
its discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Units/Shares that will be paid
out to the Participants.  The time period
during which the performance goals must be met shall be called the “Performance Period”.

8.3           Earning
of Performance Units/Shares.  After the applicable
Performance Period has ended, the holder of Performance Units/Shares shall be
entitled to receive a payout of the number of Performance Units/Shares earned
by the Participant over the Performance Period, to be determined as a function
of the extent to which the corresponding performance goals have been
achieved.  After the grant of a
Performance Unit/Share, the Committee, in its sole discretion, may adjust
and/or waive the achievement of any performance goals for such Performance
Unit/Share.

8.4           Form and
Timing of Payment of Performance Units/Shares. 
Payment of earned Performance Units/Shares shall be made as soon as
practicable after the expiration of the applicable Performance Period.  The Committee, in its sole discretion, may
pay earned Performance Units/Shares in the form of cash, in Shares (which have
an aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period) or in a
combination thereof.

8.5           Cancellation
of Performance Units/Shares.  Subject to the applicable
Award Agreement, upon the earlier of (a) the Participant’s Termination of
Employment, or (b) the date set forth in the Award Agreement, all remaining
Performance Units/Shares shall be forfeited by the Participant to the Company,
and subject to Section 4.3, the Shares subject thereto shall again be available
for grant under the Plan.

8.6           Nontransferability. 
Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will, the laws
of descent and distribution, or as permitted under Section 9.  A Participant’s rights under the Plan shall
be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s legal representative.

SECTION 9

BENEFICIARY DESIGNATION

If permitted by the
Committee, a Participant may name a beneficiary or beneficiaries to whom any
unpaid vested Award shall be paid in event of the Participant’s death.  Each such designation shall revoke all prior
designations by the same Participant and shall be effective only if given in a
form and manner acceptable to the Committee. 
In the absence of any such designation, benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to
the terms of the Plan, any unexercised vested Award may be exercised by the
Committee or executor of the Participant’s estate.

 11
 

SECTION 10

DEFERRALS

The Committee, in its
sole discretion, may permit a Participant to defer receipt of the payment of
cash or the delivery of Shares that would otherwise be due to such Participant
under an Award.  Any such deferral
elections shall be subject to such rules and procedures as shall be determined
by the Committee in its sole discretion.

SECTION 11

RIGHTS OF EMPLOYEES AND CONSULTANTS

11.1         No Effect
on Employment or Service.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s employment
or service at any time, with or without cause.

11.2         Participation.  No
Employee, Consultant or Director shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

SECTION 12

AMENDMENT, SUSPENSION, OR TERMINATION

The
Board, in its sole discretion, may alter, amend or terminate the Plan, or any
part thereof, at any time and for any reason. 
However, as required by Applicable Laws, no alteration or amendment
shall be effective without further stockholder approval.  Neither the amendment, suspension, nor
termination of the Plan shall, without the consent of the Participant, alter or
impair any rights or obligations under any Award theretofore granted.  No Award may be granted during any period of
suspension nor after termination of the Plan.

SECTION 13

TAX WITHHOLDING

13.1         Withholding
Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award, the Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes required to be withheld
with respect to such Award.

13.2         Shares Withholding.  The
Committee, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit a Participant to satisfy the minimum
statutory tax withholding obligation, in whole or in part, by delivering to the
Company Shares already owned for more than six (6) months having a value equal
to the amount required to be withheld. 
The value of the Shares to be delivered will be based on their Fair
Market Value on the date of delivery.

SECTION 14

INDEMNIFICATION

Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, notion,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any Award Agreement and against and from any and all amounts paid by him or her
in settlement thereof, with the Company’s approval, or paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her 

 12
 

in
satisfaction of any judgment in any such action, suit, or proceeding against
him or her, provided he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. 
The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

SECTION 15

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER
OR ASSET SALE

15.1         Changes in Capitalization; No Award Repricing. 
Subject to any required action by the shareholders of the Company, the
number of Shares covered by each outstanding Award, and the number of Shares
which have been authorized for issuance under the Plan but as to which no
Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per Share covered
by each such outstanding Award, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Award.  Further, except for the adjustments provided
herein, no Award may be amended to reduce its initial exercise price, and no
Award may be cancelled and replaced with an Award with a lower price.

15.2          Dissolution or Liquidation.  In
the event of the proposed dissolution or liquidation of the Company, the
Committee shall notify each Participant as soon as practicable prior to the
effective date of such proposed transaction. 
The Committee in its discretion may provide for a Participant to have
the right to exercise his or her Award until ten (10) days prior to such
transaction as to all of the Shares covered thereby, including Shares as to
which the Award would not otherwise be exercisable.  In addition, the Committee may provide that
any Company repurchase option applicable to any Shares purchased upon exercise
of an Award shall lapse as to all such Shares, provided the proposed
dissolution or liquidation takes place at the time and in the manner
contemplated.  To the extent it has not
been previously exercised, an Award will terminate immediately prior to the
consum­mation of such proposed action.

15.3         Merger or Asset Sale.  In
the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Award
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation
refuses to assume or substitute for the Award, the Participant shall fully vest
in and have the right to exercise the Award as to all of the Shares as to which
it would not otherwise be vested or exercisable.  If an Award becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Committee shall notify the Participant in writing or
electronically that the Award shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Award shall
terminate upon the expiration of such period. 
For the purposes of this paragraph, the Award shall be considered assumed
if, following the merger or sale of assets, the option or right confers the
right to purchase or receive, for each Share subject to the Award immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets 

 13
 

by
holders of Shares for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Committee may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Award, for each Share subject to the Award,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Shares
in the merger or sale of assets.

15.4         Change in Control.  In
the event of a Change of Control (as defined below), except as otherwise
determined by the Board, the Participant shall fully vest in and have the right
to exercise the Awards as to all of the Shares, including Shares as to which it
would not otherwise be vested or exercisable. 
If an Award becomes fully vested and exercisable as the result of a
Change of Control, the Committee shall notify the Participant in writing or
electronically prior to the Change of Control that the Award shall be fully
vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Award shall terminate upon the expiration of such period.  For purposes of this Agreement, a “Change of
Control” means the happening of any of the following events:

(a)           When any “person,” as such term is
used in Sections 13(d) and 14(d) of the Exchange Act (other than the
Company, a Subsidiary or a Company employee benefit plan, including any trustee
of such plan acting as trustee) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors; or

(b)           The stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all the Company’s assets; or

(c)           A change in the composition of the
Board of Directors of the Company, as a result of which fewer than a majority
of the directors are Incumbent Directors. 
“Incumbent Directors” shall mean directors who either
(A) are directors of the Company as of the date the Plan is approved by
the stockholders, or (B) are elected, or nominated for election, to the
Board of Directors of the Company with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company).

SECTION 16
 CONDITIONS UPON ISSUANCE OF SHARES

16.1         Legal
Compliance.  Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

16.2         Investment Representations.  As
a condition to the exercise of an Award, the Company may require the
Participant exercising such Award to represent and warrant at the time of any
such 

 14
 

exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.

16.3         No Rights as Stockholder
..  No Participant will have any of
the rights of a stockholder with respect to any shares of Common Stock until
the Shares are issued to the said Participant. 
After Shares are issued to the Participant, the Participant will be a
stockholder and will have all the rights of a stockholder with respect to such
shares of Common Stock, including the right to vote and receive all dividends
or other distributions made or paid with respect to such shares.

SECTION 17

INABILITY TO OBTAIN AUTHORITY

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

SECTION 18

RESERVATION OF SHARES

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

SECTION 19

LEGAL CONSTRUCTION

19.1         Gender
and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

19.2         Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

19.3         Requirements
of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all Applicable Laws.

19.4         Governing
Law.  The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.

19.5         Captions. 
Captions are provided herein for convenience only, and shall not serve
as a basis for interpretation or construction of the Plan.

* * * * * * * * *

 15Exhibit
10.1

EXECUTIVE
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into this 23rd day of July, 2007 (the “Effective Date”),
by and between Willdan Group, Inc., a Delaware
corporation (“Company”), and Mallory McCamant,
an individual (“Executive”).

RECITALS

THE PARTIES ENTER THIS AGREEMENT on the basis
of the following facts, understandings and intentions:

A.  Company
and Executive previously entered into an Employment Agreement (Restated), dated
August 1, 2006, and desire to amend and restate such agreement with this
Agreement.

B.  Company desires to employ Executive to carry
out the duties and responsibilities described below on the terms and conditions
hereinafter set forth.

C.  Executive
desires to accept such employment on such terms and conditions.

D. 
This Agreement shall govern the employment relationship between
Executive and Company from and after the Effective Date and supersedes all
previous agreements with respect to such relationship.

NOW, THEREFORE, in consideration of the above
recitals incorporated herein and the mutual covenants and promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree to amend and restate in its
entirety the Employment Agreement (restated), dated August 1, 2006, between the
Company and Executive as follows:

1.                                       Retention and Duties.

1.1                                 Retention.  Company hereby hires, engages and employs
Executive for the Employment Period, as defined in Section 2, on the terms and
conditions set forth in this Agreement. 
Executive hereby accepts and agrees to such hiring, engagement and
employment, on the terms and conditions so set forth.

1.2                                 Duties.  Executive shall be employed in the capacity
of Chief Operations Officer of the Company. 
Executive shall have all of the powers, duties and obligations as
prescribed under the Company’s amended and restated bylaws and of the type
usually vested in the office, together with such other duties as may be assigned
by the Board of Directors or by the President.

 1
 

1.3                                 No Other Employment; Minimum Time Commitment.  During the Employment Period, Executive shall
both (i) devote substantially all of Executive’s business time, energy and
skill to the performance of Executive’s duties for Company, and (ii) hold no
other employment.  Executive’s service on
the boards of directors (or similar body) of other business entities, or the
provision of other services thereto, is subject to the prior written approval
of the Board, which may not be unreasonably withheld.  Company shall have the right to require
Executive to resign from any board or similar body on which Executive may then
serve if the Board reasonably determines that Executive’s service on such board
or body interferes with the effective discharge of Executive’s duties and
responsibilities to Company or that any business related to such service is
then in competition with any business of Company or any of its affiliates,
successors or assigns.  Nothing in this
Section 1.3 shall be construed as preventing Executive from engaging in the
investment of Executive’s personal assets. 
Notwithstanding the foregoing, Executive may provide outside consulting
services with the prior consent of Company’s Board.

1.4                                 No Breach of Contract.  Executive represents to Company that: (i) the
execution and delivery of this Agreement by Executive and Company and the
performance by Executive of Executive’s duties hereunder shall not constitute a
breach of, or otherwise contravene, the terms of any other agreement or policy
to which Executive is a party or otherwise bound; (ii) Executive has no
information (including, without limitation, confidential information and trade
secrets) relating to any other person or entity which would prevent, or be
violated by, Executive entering into this Agreement or carrying out Executive’s
duties hereunder; and (iii) Executive is not bound by any confidentiality,
trade secret or similar agreement with any other person or entity.

1.5                                 Location.  Executive’s principal place of employment
shall be in Orange County, California. 
Executive further acknowledges that Executive will be required to travel
from time to time in the course of performing Executive’s duties for Company.

2.                                       Employment Period.  The “Employment Period” shall commence
on the Effective Date and end December 31, 2008 (the “Termination Date”);
provided, however, that this Agreement shall be automatically renewed, and the
Employment Period shall be automatically extended on an at-will basis
thereafter until terminated pursuant to Section 5 of this Agreement.  Notwithstanding the foregoing, the Employment
Period is subject to earlier termination as provided below in this
Agreement.  Termination of employment
shall not be considered a breach of this Agreement.

3.                                       Compensation.

3.1                                 Base Salary.  Executive’s base salary (the “Base Salary”)
shall be paid in accordance with Company’s regular payroll practices in effect
from time to time (presently bi-weekly), but not less frequently than in
monthly installments.  Executive’s Base Salary
through December 31, 2008, shall be at an annualized rate of Two Hundred Five
Thousand Dollars ($205,000).  Thereafter,
Company will review Executive’s Base Salary at least annually and may adjust
Executive’s Base Salary from the rate then in effect, based on such
review.  Such adjustment shall be subject
to the approval of the Company’s Compensation Committee.

 2
 

3.2                                 Incentive Bonus.  During the Employment Period, Executive shall
be eligible to receive an annual incentive bonus (“Incentive Bonus”),
determined annually by Company on the basis of individual and Company
performance objectives mutually agreed upon by Company and Executive, subject
to approval of the Company’s Compensation Committee.  The Incentive Bonus amount may range from no
bonus up to a maximum of fifty percent (50%) of Executive’s base salary.  In each case, payment of Executive’s
Incentive Bonus is contingent on Executive’s continued employment with Company
through the last day of the 12-month period covered by the bonus.

4.                                       Benefits.

4.1                                 Retirement, Welfare and Fringe Benefits.  During the Employment Period, Executive shall
be entitled to participate in all employee pension and welfare benefit plans
and fringe benefit plans and programs made available by Company to Company’s
employees generally, in accordance with the eligibility and participation
provisions of such plans and as such plans or programs may be in effect from
time to time.

4.2                                 Reimbursement of Business Expenses.  During the Employment Period, Executive is
authorized to incur and shall be reimbursed for all reasonable business
expenses in carrying out Executive’s duties for Company under this Agreement,
subject to Company’s expense reimbursement policies (including, without
limitation, any policies concerning proper documentation of such expenses) in
effect from time to time.

4.3                                 Paid and Other Leave.  During the Employment Period, Executive shall
accrue and be entitled to take paid leave in accordance with Company’s leave
policies in effect from time to time. 
Executive shall also be entitled to all holiday and leave pay generally
available to other highly compensated employees of Company. Executive shall accrue
25 days per year towards the paid leave bank.

4.4                                 Automobile Expenses. 
During the Employment Period, the Company shall provide Executive with
an automobile allowance of $940 per month. 
This is provided in lieu of any and all other reimbursements for
automobile expenses, except for automobile rental for out-of-town business
related travel.

5.                                       Termination.

5.1                                 Termination by Company.  Executive’s employment by Company, and the
Employment Period, may be terminated at any time by Company: (i) with Cause (as
defined in Section 5.5), or (ii) with no less than thirty (30) days advance
notice to Executive, without Cause, or (iii) in the event of Executive’s death,
or (iv) in the event that the Board determines in good faith that Executive has
a Disability (as defined in Section 5.5).

5.2                                 Termination by Executive.  Executive’s employment by Company, and the
Employment Period, may be terminated by Executive with no less than fourteen
(14) days advance notice to Company; provided, however, that in the case of a termination
for Good Reason, Executive may provide immediate written notice if Company
fails to, or cannot, reasonably cure the event that constitutes Good Reason.

 3
 

5.3                                 Benefits Upon Termination.  If Executive’s employment by Company is
terminated during the Employment Period for any reason by Company or by
Executive (in any case, the date that Executive’s employment by Company
terminates is referred to as the “Severance Date”), Company shall have
no further obligation to make or provide to Executive, and Executive shall have
no further right to receive or obtain from Company, any payments or benefits
except as follows:

(a)                                  Company
shall pay Executive (or, in the event of Executive’s death, Executive’s estate)
any Accrued Obligations (as defined in Section 5.5);

(b)                                 If,
during the Employment Period (but not upon the expiration of the Employment
Period or at any time thereafter), Executive’s employment with Company
terminates as a result of an Involuntary Termination (as defined in Section
5.5), Company shall continue to pay Executive (in addition to the Accrued
Obligations), subject to tax withholding and other authorized deductions and
subject to the release requirement of Section 5.4, and the provisions of
Section 22, severance pay in an amount equal to Executive’s Base Salary at the
annual rate in effect on the Severance Date for the period (the “Severance
Period”) commencing on the Severance Date and ending on the later of (i)
the date that is six months after the Severance Date and (ii) the Termination
Date such payments to be made in equal installments on a bi-weekly basis.  In addition, Company shall pay the cost of
Executive’s premiums charged to continue medical coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), at the same or
reasonably equivalent medical coverage for Executive (and, if applicable,
Executive’s eligible dependents) as in effect immediately prior to the
Severance Date, provided that Company’s obligation to make any payment pursuant
to this sentence shall cease upon the first to occur of the date Executive
becomes eligible for medical coverage with another employer or the last day of
the Severance Period.

Notwithstanding the
foregoing provisions of this Section 5.3, if Executive breaches Executive’s
obligations under Section 6, 7 or 8 of this Agreement at any time, from and
after the date of such breach, Executive will no longer be entitled to, and
Company will no longer be obligated to pay, any remaining unpaid portion of any
benefits provided in Section 5.3(b).

The foregoing provisions
of this Section 5.3 shall not affect: (i) Executive’s receipt of benefits
otherwise due terminated employees under group insurance coverage consistent
with the terms of the applicable Company welfare benefit plan; (ii) Executive’s
rights under COBRA to continue participation in medical, dental,
hospitalization and life insurance coverage; or (iii) Executive’s receipt of
benefits otherwise due in accordance with the terms of Company’s 401(k) plan
(if any) or similar plan.  In no event
shall Company’s obligations to Executive exceed the sum of the Accrued
Obligations, the benefits provided in Section 5.3(b) and the benefits
contemplated by this paragraph, regardless of the manner of Executive’s
termination.

 4
 

5.4                                 Release; Exclusive Remedy.

(a)                                  This
Section 5.4 shall apply notwithstanding anything else contained in this
Agreement or any stock option, restricted stock or other equity-based award
agreement to the contrary.  As a
condition precedent to any Company obligation to Executive pursuant to Section
5.3(b) or any obligation to accelerate vesting of any equity-based award in
connection with the termination of Executive’s employment, Executive shall,
upon or promptly following Executive’s last day of employment with Company,
provide Company with a valid, executed general release agreement in a form
reasonably acceptable to Company, and such release agreement shall have not
been revoked by Executive pursuant to any revocation rights afforded by
applicable law.  Company shall have no obligation
to make any payment to Executive pursuant to Section 5.3(b) (or otherwise
accelerate the vesting of any equity-based award in the circumstances as
otherwise contemplated by the applicable award agreement) unless and until the
release agreement contemplated by this Section 5.4 becomes irrevocable by
Executive in accordance with all applicable laws, rules and regulations.

(b)                                 Executive
agrees that the general release agreement described in Section 5.4(a) will
require that Executive acknowledge, as a condition to the payment of any
benefits under Section 5.3(b), that the payments contemplated by Section 5.3(b)
(and any applicable acceleration of vesting of an equity-based award in
accordance with the terms of such award in connection with the termination of
Executive’s employment) shall constitute the exclusive and sole remedy for any
termination of Executive’s employment, and Executive will be required to
covenant, as a condition to receiving any such payment (and any such
accelerated vesting), not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment.  Company and Executive acknowledge and agree
that there is no duty of Executive to mitigate damages under this
Agreement.  All amounts paid to Executive
pursuant to Section 5.3 shall be paid without regard to whether Executive has
taken or takes actions to mitigate damages.

5.5                                 Defined Terms.

(a)                                  As
used herein, “Accrued Obligations” means:

(i)                                     any
Base Salary that had accrued but had not been paid (including accrued and
unpaid vacation time) on or before the Severance Date; and

(ii)                                  any
Incentive Bonus payable pursuant to Section 3.2 earned by Executive with
respect to any bonus period ending prior to the Severance Date, to the extent
such bonus has not been paid as of the Severance Date; and

(iii)                               any
reimbursement due to Executive pursuant to Section 4.2 for expenses incurred by
Executive on or before the Severance Date.

 5
 

(b)                                 As
used herein, “Cause” shall mean, as reasonably determined by the Board
(excluding Executive, if Executive is then a member of the Board), (i) any act
of personal dishonesty taken by Executive in connection with Executive’s
responsibilities as an employee of Company which is intended to result in
substantial personal enrichment of Executive and is reasonably likely to result
in material harm to Company, (ii) Executive’s commission of a felony, (iii) a
willful act by Executive which constitutes misconduct and is materially
injurious to Company, or (iv) continued willful violations by Executive of
Executive’s obligations to Company after there has been delivered to Executive
a written demand for performance from Company which describes the basis for
Company’s belief that Executive has willfully violated Executive’s obligations
to Company.  Failure to achieve Company
or individual performance objectives shall not be considered “cause” for the
purposes of this section.

(c)                                  As
used herein, “Disability” shall mean a physical or mental impairment
which, as reasonably determined by the Board and verified by Executive’s
receipt of long term disability benefits under the Company’s long term
disability policy, renders Executive unable to perform the essential functions
of Executive’s employment with Company, even with reasonable accommodation that
does not impose an undue hardship on Company, for more than 180 days in any
12-month period, unless a longer period is required by federal or state law, in
which case that longer period would apply.

(d)                                 As
used herein, “Good Reason” shall mean the occurrence of any of the
following without Executive’s express written consent: (i) a material diminution in Executive’s authority, duties, or
responsibilities; or (ii) a material diminution by Company of Executive’s Base
Salary or Incentive Bonus opportunity as in effect immediately prior to such
reduction; provided that Good Reason shall not exist pursuant to clause (d)(i)
or (d)(ii) above unless both (x) Executive shall have first provided written
notice to Company of the condition giving rise to such claim of Good Reason
within 90 days of the initial existence of such condition, and (y) Company
shall have failed to reasonably cure such condition promptly upon (and in no
event more than 30 days after) its receipt of such notice; further provided
that in all events the termination of Executive’s employment with the Company
shall not be treated as a termination for “Good Reason” unless such termination
occurs no more than two years following the initial existence of the condition
claimed to constitute “Good Reason.”

(e)                                  As
used herein, “Involuntary Termination” shall mean a termination of
Executive’s employment by Company without Cause or by Executive for Good
Reason.  For purposes of this Agreement,
the term Involuntary Termination shall not include a termination of Executive’s
employment due to Executive’s death or Disability.

5.6.                              Notice of Termination.  Any termination of Executive’s employment
under this Agreement shall be communicated by written notice of termination
from the terminating party to the other party. 
The notice of termination shall indicate the specific provision(s) of
this Agreement relied upon in effecting the termination.

 6
 

5.7                                 Limitation on Benefits.

(a)                                  Notwithstanding
anything contained in this Agreement to the contrary, to the extent that the
payments and benefits provided under this Agreement and benefits provided to,
or for the benefit of, Executive under any other Company plan or agreement
(such payments or benefits are collectively referred to as the “Benefits”)
would be subject to the excise tax (the “Excise Tax”) imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
the Benefits shall be reduced (but not below zero) if and to the extent that a
reduction in the Benefits would result in Executive retaining a larger amount,
on an after-tax basis (taking into account federal, state and local income
taxes and the Excise Tax), than if Executive received all of the Benefits (such
reduced amount is referred to hereinafter as the “Limited Benefit Amount”).  Unless Executive shall have given prior
written notice specifying a different order to Company to effectuate the
Limited Benefit Amount, Company shall reduce or eliminate the Benefits by first
reducing or eliminating those payments or benefits which are not payable in
cash and then by reducing or eliminating cash payments, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in time
from the Determination (as hereinafter defined).  Any notice given by Executive pursuant to the
preceding sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing Executive’s rights and entitlements to any
benefits or compensation.

(b)                                 A
determination as to whether the Benefits shall be reduced to the Limited
Benefit Amount pursuant to this Agreement and the amount of such Limited
Benefit Amount shall be made by Company’s independent public accountants or
another certified public accounting firm of national reputation designated by
Company (the “Accounting Firm”) at Company’s expense.  The Accounting Firm shall provide its
determination (the “Determination”), together with detailed supporting
calculations and documentation to Company and Executive within five (5) days of
the date of termination of Executive’s employment, if applicable, or such other
time as requested by Company or Executive (provided Executive reasonably
believes that any of the Benefits may be subject to the Excise Tax), and if the
Accounting Firm determines that no Excise Tax is payable by Executive with
respect to any Benefits, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Benefits.  Unless Executive provides
written notice to Company within ten (10) days of the delivery of the
Determination to Executive that Executive disputes such Determination, the
Determination shall be binding, final and conclusive upon Company and
Executive.

6.                                       Confidentiality, Proprietary Information;
Inventions and Developments.

6.1                                 Company Information. Executive
agrees to hold in strictest confidence, and not to use or disclose, except for
the benefit of Company, to any person, firm or corporation, any Confidential
Information of Company or any of its affiliates (Company and its affiliates are
referred to, collectively, as the “The Company Group”).  “Confidential Information” means any
of The Company Group proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, products, services, customer
lists and customers (including, but not limited to, customers of The Company
Group on whom Executive calls or with whom Executive becomes acquainted during
the Employment Period), markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering data, hardware
configuration information,

 7
 

marketing,
financial or other business information which are (a) disclosed to Executive by
The Company Group either directly or indirectly in writing, orally or by
drawings or observation of parts or equipment, or (b) developed by Executive on
behalf of The Company Group.  All
inventions and developments on the part of Executive during the Employment Period
shall be “works for hire” on behalf of The Company Group and shall be the sole
property of The Company Group. 
Confidential Information does not include any of the foregoing items
which has become publicly known or made generally available through no wrongful
act of Executive or of others who were under confidentiality obligations as to
the item or items involved or improvements or new versions thereof.

6.2                                 Former Employer Information.  Executive will not, during the Employment Period
improperly use or disclose any proprietary information or trade secrets of any
former or concurrent employer or other person or entity and that Executive will
not bring onto the premises of Company any unpublished document or proprietary
information belonging to any such employer, person or entity unless consented
to in writing by such employer, person or entity.

6.3                                 Third Party Information.  Executive recognizes that The Company Group
has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on The Company Group’s
part to maintain the confidentiality of such information and to use it only for
certain limited purposes.  Executive
agrees to hold all such confidential or proprietary information in the
strictest confidence and not to disclose it to any person, firm or corporation
or to use it except as necessary in carrying out Executive’s work for the
Company consistent with The Company Group’s agreement with such third party.

7.                                       Protective Covenant.  Executive acknowledges and recognizes the
highly competitive nature of the businesses of Company, the amount of sensitive
and confidential information involved in the discharge of Executive’s position
with Company, and the harm to Company that would result if such knowledge or
expertise was disclosed or made available to a competitor.  Based on that understanding, Executive hereby
expressly agrees that Executive will not, directly or indirectly, at any time
during the Employment Period, (i) engage in any business for Executive’s own
account or otherwise derive any personal benefit from any business that
competes with the business of The Company Group, (ii) enter the employ of, or
render any services to, any person engaged in any business that competes with
the business of any entity within The Company Group, or (iii) acquire a
financial interest in any person engaged in any business that competes with the
business of any entity within The Company Group as an individual, partner,
member, shareholder, officer, director, principal, agent, trustee or
consultant.  For purposes of this
Agreement, businesses in competition with The Company Group shall include,
without limitation, businesses which any entity within The Company Group
conducts operations as of Executive’s Severance Date, and any businesses that
any entity within The Company Group has specific and reasonably achievable
plans to conduct operations in the future and as to which Executive is aware of
such planning, whether or not such businesses have or have not as of the
Severance Date commenced operations. 
Notwithstanding the foregoing, Executive may own, solely as an
investment, securities of any person which are publicly traded on a national or
regional stock exchange or on an over-the-counter market if Executive (i) is
not a controlling person of, or a member of a group which controls, such
person, and (ii) does not, directly or indirectly, beneficially own more than
five percent (5%) or more of any class of securities of such person.  In addition, subject to approval by the
Board, Executive shall be entitled to purchase securities of a business in
competition with The Company Group if such securities are offered to investors
irrespective of any employment or other participation in such business by the
investor.

 8
 

8.                                       Anti-Solicitation.

8.1                                 Business Relationships. 
Executive agrees that during the Employment Period and for a period of
one year thereafter, Executive will not, directly or indirectly, individually
or as a consultant to, or as an employee, officer, stockholder, director or
other owner or participant in any business, influence or attempt to influence
existing or reasonably prospective customers, vendors, suppliers, joint
venturers, associates, consultants, agents, or partners of The Company Group,
either directly or indirectly, to divert their business away from The Company
Group, to any individual, partnership, firm, corporation or other entity then
in competition with the business of any entity within The Company Group, and
Executive will not otherwise materially interfere with any business
relationship of any entity within The Company Group.

8.2                                 Employees.  Executive agrees that
during the Employment Period and for a period of one (1) year thereafter, Executive
will not, directly or indirectly, individually or as a consultant to, or as an
employee, officer, stockholder, director or other owner of or participant in
any business, solicit (or assist in soliciting) any person who is then, or at
any time within six (6) months prior thereto was, an employee of an entity
within The Company Group who earned annually $75,000 or more as an employee of
such entity during the last one year of his or her own employment to work for
(as an employee, consultant or otherwise) any business, individual,
partnership, firm, corporation, or other entity whether or not engaged in
competitive business with any entity in The Company Group.

9.                                       Acknowledgments; Remedies.  Executive represents that Executive (i) is
familiar with the foregoing covenants not to compete and not to solicit set
forth in Sections 7 and 8, (ii) is fully aware of Executive’s obligations
hereunder, (iii) agrees to the reasonableness of the length of time, scope and
geographic coverage of the foregoing covenants not to compete and not to
solicit, and (iv) agrees that such covenants are necessary to protect Company’s
confidential and proprietary information, good will, stable workforce, and
customer relations.  Executive agrees
that a breach of any of the foregoing covenants in Sections 7 and 8 would cause
immediate and irreparable harm to Company that would be difficult or impossible
to measure, and that damages to Company for any such injury would therefore be
an inadequate remedy for any such breach. 
Accordingly, Executive agrees that if Executive breaches any term of any
of the covenants set forth in such sections, Company shall be entitled, in
addition to and without limitation upon all other remedies Company may have
under this Agreement, at law or otherwise, to obtain injunctive or other
appropriate equitable relief to restrain any such breach upon a showing by
Company of the legal requirements to obtain such relief.

10.                                 Required Approvals.  If required by law, this Agreement shall be
subject to prior approval of Company’s Compensation Committee and Board of
Directors.

11.                                 Withholding Taxes.  Notwithstanding anything herein to the
contrary, Company may withhold (or cause there to be withheld, as the case may
be) from any amounts otherwise due or payable under or pursuant to this
Agreement such federal, state and local income, employment, or other taxes as
may be required to be withheld pursuant to any applicable law or regulation.

 9
 

12.                                 Assignment.  This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign
or transfer this Agreement or any rights or obligations hereunder; provided,
however, that in the event of a merger, consolidation, or transfer or
sale of all or substantially all of the assets of Company with or to any other
individual(s) or entity, this Agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of such successor and such
successor shall discharge and perform all the promises, covenants, duties, and
obligations of Company hereunder.

13.                                 Section Headings; Number and Gender.  The section headings of, and titles of
paragraphs and subparagraphs contained in this Agreement are for the purpose of
convenience only, and they neither form a part of this Agreement nor are they
to be used in the construction or interpretation thereof.  As used herein, where the context requires,
the singular shall include the plural, the plural shall include the singular,
and any gender shall include all other genders.

14.                                 Governing Law.  This Agreement, and all questions relating to
its validity, interpretation, performance and enforcement, as well as the legal
relations hereby created between the parties hereto, shall be governed by and
construed under, and interpreted and enforced in accordance with, the laws of
the State of California, notwithstanding any California or other conflict of
law provision to the contrary. 
Jurisdiction and venue of any action pertaining to the Agreement shall
be in Orange County, California.

15.                                 Severability.  If any provision of this Agreement or the
application thereof is held invalid, the invalidity shall not affect other
provisions or applications of this Agreement which can be given effect without
the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable.

16.                                 Entire Agreement.  This Agreement embodies the entire agreement
of the parties hereto respecting the matters within its scope.  This Agreement supersedes all prior and
contemporaneous agreements of the parties hereto that directly or indirectly
bears upon the subject matter hereof, and more specifically Executive’s
employment by Company.  Any prior
negotiations, correspondence, agreements, proposals or understandings relating
to the subject matter hereof shall be deemed to have been merged into this
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect.  There are no
representations, warranties, or agreements, whether express or implied, or oral
or written, with respect to the subject matter hereof, except as expressly set
forth herein.

17.                                 Modifications.  This Agreement may not be amended, modified
or changed, in whole or in part, except by a formal, definitive written
agreement expressly referring to this Agreement, which agreement is executed by
both of the parties hereto.

18.                                 Waiver.  Neither the failure nor any delay on the part
of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.  No waiver shall
be effective unless it is in writing and is signed by the party asserted to
have granted such waiver.

 10
 

19.                                 Notices.

(a)                                  All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
and made if (i) delivered by hand, (ii) otherwise delivered against receipt
therefore, or (iii) sent by registered or certified mail, postage prepaid,
return receipt requested.  Any notice
shall be duly addressed to the parties as follows:

	
  (i) if to Company:

  	
   

  	
  Willdan Group, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  2401 E. Katella
  Avenue, Ste. 300

  	
   

  	
   

  
	
   

  	
   

  	
  Anaheim, CA
  92806

  	
   

  	
   

  
	
   

  	
   

  	
  Attn: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
      with
  a copy to:

  	
   

  	
  Robert L. Lavoie, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
  LAVOIE, McCAIN
  & JARMAN

  	
   

  	
   

  
	
   

  	
   

  	
  2401 E. Katella
  Ave., Ste 310

  	
   

  	
   

  
	
   

  	
   

  	
  Anaheim, CA 92806

  	
   

  	
   

  

 

(ii)                                  if
to Executive, to the address most recently on file in the payroll records of
Company.

(b)                                 Any
party may alter the address to which communications or copies are to be sent by
giving notice of such change of address in conformity with the provisions of
this Section 21 for the giving of notice. 
Any communication shall be effective when delivered by hand, when
otherwise delivered against receipt therefore, or five (5) business days after
being mailed in accordance with the foregoing.

20.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which together shall constitute one
and the same instrument.  This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.  Photographic copies of
such signed counterparts may be used in lieu of the originals for any purpose.

21.                                 Legal Counsel; Mutual Drafting.  Each party recognizes that this is a legally
binding contract and acknowledges and agrees that they have had the opportunity
to consult with legal counsel of their choice. 
Each party has cooperated in the drafting, negotiation and preparation
of this Agreement.  Hence, in any
construction to be made of this Agreement, the same shall not be construed
against either party on the basis of that party being the drafter of such
language.  Executive agrees and
acknowledges that Executive has read and understands this Agreement, is
entering into it freely and voluntarily, and has been advised to seek counsel
prior to entering into this Agreement and has had ample opportunity to do so.

 11
 

22.                                 Code Section 409A.

(a)                                  It
is intended that any amounts payable under this Agreement and Company’s and
Executive’s exercise of authority or discretion hereunder shall comply with
Section 409A of the Code (including the Treasury regulations and other
published guidance relating thereto) (“Code Section 409A”) so as not to
subject Executive to payment of any additional tax, penalty or interest imposed
under Code Section 409A.  To the extent
that any amount payable under this Agreement would trigger the additional tax,
penalty or interest imposed by Code Section 409A, the Agreement shall be
modified to avoid such additional tax, penalty or interest yet preserve (to the
nearest extent reasonably possible) the intended benefit payable to Executive.

(b)                                 Notwithstanding
any provision of this Agreement to the contrary, if Executive is a “specified
employee” as defined in Code Section 409A, Executive shall not be entitled to
any payments upon a termination of Executive’s employment until the earlier of
(i) the date which is six (6) months after Executive’s “separation from service”
(as such term is defined in Code Section 409A and regulations promulgated
thereunder) with the Company for any reason other than death, or (ii) the date
of Executive’s death.  Furthermore, with
regard to any benefit to be provided upon a termination of employment, to the
extent required by Code Section 409A, Executive shall pay the premium for such
benefit during the aforesaid period and be reimbursed by the Corporation
therefore promptly after the end of such period.  Any amounts otherwise payable to Executive
following a termination of Executive’s employment that are not so paid by
reason of this Section 24(b) shall be paid as soon as practicable after the
date that is six (6) months after the termination of Executive’s employment
(or, if earlier, the date of Executive’s death).  The provisions of this Section 24(b) shall
only apply if, and to the extent, required to comply with Code Section 409A.

IN WITNESS WHEREOF,
Company and Executive have executed this Agreement as of the Effective Date.

	
  “COMPANY”

  
	
   

  
	
  Willdan Group, Inc.,

  
	
  a Delaware
  corporation

  
	
   

  
	
  By: 

  	
  /s/ Thomas D.
  Brisbin

  	
   

  
	
   

  	
  Thomas D.
  Brisbin, President

  

 

	
  “EXECUTIVE”

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Mallory McCamant

  	
   

  
	
  Mallory McCamant

  

 

 12

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