Document:

EXHIBIT
      10.1 

     

    INDEMNIFICATION
      AGREEMENT 

     

         This
      Indemnification Agreement (“Agreement”)
      is
      entered into as of                     
      by and
      between Xcorporeal, Inc. (“Company”),
      and
                    
      (“Indemnitee”).
      

     

    RECITALS 

     

         A. It
      is important to the Company to attract and retain as directors the most capable
      persons reasonably available. 

     

         B. Indemnitee
      is becoming a director of the Company. 

     

         C. Both
      the Company and Indemnitee recognize the increased risk of litigation and other
      claims being asserted against directors of companies in today’s environment.

     

         D. The
      Company’s Certificate of Incorporation and By-laws (the “Constituent
      Documents”)
      provide that the Company will indemnify its directors and the Company’s By-laws
      provide that the Company will advance expenses in connection therewith, and
      Indemnitee’s willingness to serve as a director of the Company is based in part
      on Indemnitee’s reliance on such provisions. 

     

         E. In
      recognition of Indemnitee’s need for substantial protection against personal
      liability in order to enhance Indemnitee’s continued service to the Company in
      an effective manner, and Indemnitee’s reliance on the aforesaid provisions of
      the Constituent Documents, and to provide Indemnitee with express contractual
      indemnification (regardless of, among other things, any amendment to or
      revocation of such provisions or any change in the composition of the Company’s
      Board of Directors (the “Board”)
      or any
      acquisition or business combination transaction relating to the Company), the
      Company wishes to provide in this Agreement for the indemnification of and
      the
      advancement of Expenses to Indemnitee as set forth in this Agreement and, to
      the
      extent insurance is maintained, for the continued coverage of Indemnitee under
      the Company’s directors’ and officers’ liability insurance policies.

     

         NOW,
      THEREFORE, the parties hereby agree as follows: 

     

         1. Definitions.
      In addition to terms defined elsewhere herein, the following terms have the
      following meanings when used in this Agreement with initial capital letters:
      

     

              (a)
      “Affiliate”
has
      the
      meaning given to that term in Rule 405 under the Securities Act of 1933,
      provided, however, that for purposes of this Agreement the Company and its
      subsidiaries will not be deemed to constitute Affiliates of Indemnitee or the
      Indemnitee. 

     

              (b)
      “Claim”
means
      any threatened, pending or completed action, suit or proceeding, or any inquiry
      or investigation, whether instituted, made or conducted by the Company or any
      other party, including without limitation any governmental entity, that
      Indemnitee determines might lead to the institution of any such action, suit
      or
      proceeding, whether civil, criminal, administrative, arbitrative, investigative
      or other. 

     

    
      
         

      

      
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              (c)
      “Expenses”
      includes attorneys’ and experts’ fees, expenses and charges and all other costs,
      expenses and obligations paid or incurred in connection with investigating,
      defending, being a witness in or participating in (including on appeal), or
      preparing to defend, be a witness in or participate in, any Claim. 

     

              (d)
      “Indemnifiable
      Losses”
means
      any and all Expenses, damages, losses, liabilities, judgments, fines, penalties
      and amounts paid in settlement (including without limitation all interest,
      assessments and other charges paid or payable in connection with or in respect
      of any of the foregoing) (collectively, “Losses”)
      relating to, resulting from or arising out of any act or failure to act by
      the
      Indemnitee, or his or her status as any person referred to in clause (i) of
      this sentence, (i) in his or her capacity as a director, officer, employee
      or agent of the Company, any of its Affiliates or any other entity as to which
      the indemnitee is or was serving at the request of the Company as a director,
      officer, employee, member, manager, trustee or agent of another corporation,
      limited liability company, partnership, joint venture, trust or other entity
      or
      enterprise, whether or not for profit and (ii) in respect of any business,
      transaction or other activity of any entity referred to in clause (i) of
      this sentence. 

     

         2. Indemnification.
      The
      Company will indemnify and hold harmless Indemnitee, to the fullest extent
      permitted by the laws of the State of Delaware in effect on the date hereof
      or
      as such laws may from time to time hereafter be amended to increase the scope
      of
      such permitted indemnification, against all Indemnifiable Losses relating to,
      resulting from or arising out of any Claim. The failure by Indemnitee to notify
      the Company of such Claim will not relieve the Company from any liability
      hereunder unless, and only to the extent that, the Company did not otherwise
      learn of the Claim and such failure results in forfeiture by the Company of
      substantial defenses, rights or insurance coverage. Except as provided in
Section 16,
      however, Indemnitee will not be entitled to indemnification pursuant to this
      Agreement in connection with any Claim initiated by Indemnitee against the
      Company or any director or officer of the Company unless the Company has joined
      in or consented to the initiation of such Claim. If so requested by Indemnitee,
      the Company will advance within two business days of such request any and all
      Expenses to Indemnitee which Indemnitee determines reasonably likely to be
      payable, provided, however, that Indemnitee will return, without interest,
      any
      such advance which remains unspent at the final conclusion of the Claim to
      which
      the advance related. 

     

         3. Additional
      Expenses.
      Without
      limiting the generality or effect of the foregoing, the Company will indemnify
      Indemnitee against and, if requested by Indemnitee, will within two business
      days of such request advance to Indemnitee, any and all attorneys’ fees and
      other Expenses paid or incurred by Indemnitee in connection with any Claim
      asserted or brought by Indemnitee for (i) indemnification or advance
      payment of Expenses by the Company under this Agreement or any other agreement
      or under any provision of the Company’s Constituent Documents now or hereafter
      in effect relating to Claims for Indemnifiable Losses and/or (ii) recovery
      under any directors’ and officers’ liability insurance policies maintained by
      the Company, regardless of whether Indemnitee ultimately is determined to be
      entitled to such indemnification, advance expense payment or insurance recovery,
      as the case may be. 

     

         4. Partial
      Indemnity.
      If
      Indemnitee is entitled under any provision of this Agreement to indemnification
      by the Company for some or a portion of any Indemnifiable Loss but not for
      all
      of the total amount thereof, the Company will nevertheless indemnify Indemnitee
      

     

    
      
         

      

      
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    for
      the
      portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
      any
      other provision of this Agreement, to the extent that Indemnitee has been
      successful on the merits or otherwise in defense of any or all Claims relating
      in whole or in part to an Indemnifiable Loss or in defense of any issue or
      matter therein, including without limitation dismissal without prejudice,
      Indemnitee will be indemnified against all Expenses incurred in connection
      therewith. In connection with any determination as to whether Indemnitee is
      entitled to be indemnified hereunder, there will be a presumption that
      Indemnitee is so entitled, which presumption the Company may overcome only
      by
      its adducing clear and convincing evidence to the contrary. 

     

         5. No
      Other Presumption.
      For
      purposes of this Agreement, the termination of any Claim by judgment, order,
      settlement (whether with or without court approval) or conviction, or upon
      a
      plea of nolo contendere or its equivalent, will not create a presumption that
      Indemnitee did not meet any particular standard of conduct or have any
      particular belief or that a court has determined that indemnification is not
      permitted by applicable law. 

     

         6. Non-Exclusivity.
      The
      rights of Indemnitee hereunder will be in addition to any other rights
      Indemnitee may have under the Constituent Documents, or the substantive laws
      of
      the Company’s jurisdiction of incorporation, any other contract or otherwise
      (collectively, “Other
      Indemnity Provisions”);
      provided, however, that (i) to the extent that Indemnitee otherwise would
      have any greater right to indemnification under any Other Indemnity Provision,
      Indemnitee will be deemed to have such greater right hereunder and (ii) to
      the extent that any change is made to any Other Indemnity Provision which
      permits any greater right to indemnification than that provided under this
      Agreement as of the date hereof, Indemnitee will be deemed to have such greater
      right hereunder. The Company will not adopt any amendment to any of the
      Constituent Documents the effect of which would be to deny, diminish or encumber
      Indemnitee’s right to indemnification under this Agreement or any Other
      Indemnity Provision. 

     

         7. Liability
      Insurance.
      To the
      extent the Company maintains an insurance policy or policies providing
      directors’ and officers’ liability insurance, Indemnitee will be covered by such
      policy or policies, in accordance with its or their terms, to the maximum extent
      of the coverage available for any director of the Company. The Company will
      not
      be required to create a trust fund, grant a security interest, obtain a letter
      of credit, or use other means to ensure the payment of such amounts as may
      be
      necessary to satisfy its obligations to indemnify and advance expenses pursuant
      to this Agreement. 

     

         8. Subrogation.
      In the
      event of payment under this Agreement, the Company will be subrogated to the
      extent of such payment to all of the related rights of recovery of Indemnitee
      against other persons or entities (other than Indemnitee’s successors). The
      Indemnitee will execute all papers reasonably required to evidence such rights
      of recovery (all of Indemnitee’s reasonable Expenses, including attorneys’ fees
      and charges, related thereto to be reimbursed by or, at the option of
      Indemnitee, advanced by the Company). 

     

         9. No
      Duplication of Payments.
      The
      Company will not be liable under this Agreement to make any payment in
      connection with any Indemnifiable Loss made against Indemnitee to the extent
      Indemnitee has otherwise actually received payment (net of Expenses incurred
      in
      connection therewith) under any insurance policy, the Constituent Documents
      and
      Other Indemnity Provisions or otherwise of the amounts otherwise indemnifiable
      hereunder. 

     

    
      
         

      

      
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         10. Defense
      of Claims.
      The
      Company will be entitled to participate in the defense of any Claim or to assume
      the defense thereof, with counsel reasonably satisfactory to the Indemnitee,
      provided that in the event that (i) the use of counsel chosen by the
      Company to represent Indemnitee would present such counsel with an actual or
      potential conflict, (ii) the named parties in any such Claim (including any
      impleaded parties) include both the Company and Indemnitee and Indemnitee shall
      conclude that there may be one or more legal defenses available to him or her
      that are different from or in addition to those available to the Company, or
      (iii) any such representation by the Company would be precluded under the
      applicable standards of professional conduct then prevailing, then Indemnitee
      will be entitled to retain separate counsel (but not more than one law firm
      in
      respect of any particular Claim) at the Company’s expense. The Company will not,
      without the prior written consent of the Indemnitee, effect any settlement
      of
      any threatened or pending Claim which the Indemnitee is or could have been
      a
      party unless such settlement solely involves the payment of money and includes
      an unconditional release of the Indemnitee from all liability on any claims
      that
      are the subject matter of such Claim. 

     

         11. Successors
      and Binding Agreement.
      

     

              (a) The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation, reorganization or otherwise) to all or substantially
      all
      of the business or assets of the Company, by agreement in form and substance
      satisfactory to Indemnitee and his or her counsel, expressly to assume and
      agree
      to perform this Agreement in the same manner and to the same extent the Company
      would be required to perform if no such succession had taken place. This
      Agreement will be binding upon and inure to the benefit of the Company and
      any
      successor to the Company, including without limitation any person acquiring
      directly or indirectly all or substantially all of the business or assets of
      the
      Company whether by purchase, merger, consolidation, reorganization or otherwise
      (and such successor will thereafter be deemed the “Company”
for
      purposes of this Agreement), but will not otherwise be assignable or delegatable
      by the Company. 

     

              (b) This
      Agreement will inure to the benefit of and be enforceable by the Indemnitee’s
      personal or legal representatives, executors, administrators, successors, heirs,
      distributees, legatees and other successors. 

     

              (c) This
      Agreement is personal in nature and neither of the parties hereto will, without
      the consent of the other, assign or delegate this Agreement or any rights or
      obligations hereunder except as expressly provided in Sections 11(a)
      and 11(b).
      Without
      limiting the generality or effect of the foregoing, Indemnitee’s right to
      receive payments hereunder will not be assignable, whether by pledge, creation
      of a security interest or otherwise, other than by a transfer by the
      Indemnitee’s will or by the laws of descent and distribution, and, in the event
      of any attempted assignment or transfer contrary to this Section 11(c),
      the
      Company will have no liability to pay any amount so attempted to be assigned
      or
      transferred. 

     

         12. Notices.
      For all
      purposes of this Agreement, all communications, including without limitation
      notices, consents, requests or approvals, required or permitted to be given
      hereunder will be in writing and will be deemed to have been duly given when
      hand delivered or dispatched by electronic facsimile transmission (with receipt
      thereof orally confirmed), or five 

     

    
      
         

      

      
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    business
      days after having been mailed by United States registered or certified mail,
      return receipt requested, postage prepaid or one business day after having
      been
      sent for next-day delivery by a nationally recognized overnight courier service,
      addressed to the Company (to the attention of the Secretary of the Company)
      and
      to the Indemnitee at the addresses shown on the signature page hereto, or to
      such other address as any party may have furnished to the other in writing
      and
      in accordance herewith, except that notices of changes of address will be
      effective only upon receipt. 

     

         13. Governing
      Law.
      The
      validity, interpretation, construction and performance of this Agreement will
      be
      governed by and construed in accordance with the substantive laws of the State
      of Delaware, without giving effect to the principles of conflict of laws of
      such
      State. Each party consents to non-exclusive jurisdiction of any Delaware state
      or federal court or any court in any other jurisdiction in which a Claim is
      commenced by a third person for purposes of any action, suit or proceeding
      hereunder, waives any objection to venue therein or any defense based on forum
      non conveniens or similar theories and agrees that service of process may be
      effected in any such action, suit or proceeding by notice given in accordance
      with Section 12.
      

     

         14. Validity.
      If any
      provision of this Agreement or the application of any provision hereof to any
      person or circumstance is held invalid, unenforceable or otherwise illegal,
      the
      remainder of this Agreement and the application of such provision to any other
      person or circumstance will not be affected, and the provision so held to be
      invalid, unenforceable or otherwise illegal will be reformed to the extent,
      and
      only to the extent, necessary to make it enforceable, valid or legal.

     

         15. Miscellaneous.
      No
      provision of this Agreement may be waived, modified or discharged unless such
      waiver, modification or discharge is agreed to in writing signed by Indemnitee
      and the Company. No waiver by either party hereto at any time of any breach
      by
      the other party hereto or compliance with any condition or provision of this
      Agreement to be performed by such other party will be deemed a waiver of similar
      or dissimilar provisions or conditions at the same or at any prior or subsequent
      time. No agreements or representations, oral or otherwise, expressed or implied
      with respect to the subject matter hereof have been made by either party that
      are not set forth expressly in this Agreement. References to Sections are to
      references to Sections of this Agreement. 

     

         16. Legal
      Fees.
      It is
      the intent of the Company that the Indemnitee not be required to incur legal
      fees and or other Expenses associated with the interpretation, enforcement
      or
      defense of Indemnitee’s rights under this Agreement by litigation or otherwise
      because the cost and expense thereof would substantially detract from the
      benefits intended to be extended to the Indemnitee hereunder. Accordingly,
      without limiting the generality or effect of any other provision hereof, if
      it
      should appear to the Indemnitee that the Company has failed to comply with
      any
      of its obligations under this Agreement or in the event that the Company or
      any
      other person takes or threatens to take any action to declare this Agreement
      void or unenforceable, or institutes any litigation or other action or
      proceeding designed to deny, or to recover from, the Indemnitee the benefits
      provided or intended to be provided to the Indemnitee hereunder, the Company
      irrevocably authorizes the Indemnitee from time to time to retain counsel of
      Indemnitee’s choice, at the expense of the Company as hereafter provided, to
      advise and represent the Indemnitee in connection with any such interpretation,
      enforcement or defense, 

     

    
      
         

      

      
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    including
      without limitation the initiation or defense of any litigation or other legal
      action, whether by or against the Company or any director, officer, stockholder
      or other person affiliated with the Company, in any jurisdiction.
      Notwithstanding any existing or prior attorney-client relationship between
      the
      Company and such counsel, the Company irrevocably consents to the Indemnitee’s
      entering into an attorney-client relationship with such counsel, and in that
      connection the Company and the Indemnitee agree that a confidential relationship
      shall exist between the Indemnitee and such counsel. Without respect to whether
      the Indemnitee prevails, in whole or in part, in connection with any of the
      foregoing, the Company will pay and be solely financially responsible for any
      and all attorneys’ and related fees and expenses incurred by the Indemnitee in
      connection with any of the foregoing. 

     

         17. Interpretation.
      No
      provision of this Agreement will be interpreted in favor of, or against, either
      of the parties hereto by reason of the extent to which any such party or its
      counsel participated in the drafting thereof or by reason of the extent to
      which
      any such provision is inconsistent with any prior draft hereof or thereof.
      

     

         18. Counterparts.
      This
      Agreement may be executed by facsimile and in one or more counterparts, each
      of
      which will be deemed to be an original but all of which together will constitute
      one and the same agreement. 

     

         IN
      WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
      authorized representative to execute this Agreement as of the date first above
      written. 

     

    INDEMNITEE:
      

    _________________________________

     

    
      	
              Name:
                

            	
               

            	
              _______________________________

            	
               

            	
               

            

    

     

    
      	
               

            	
              XCORPOREAL,
                INC.

               

            	
               

            
	
               

            	
              By:  

            	
               

            	
               

            
	
               

            	 	 	 	 
	
               

            	
              Name:  

            	
               

            	
               

            
	
               

            	 	 	 	 
	
               

            	
              Title:  

            	
               

            	
               

            

    

     

    
      
         

      

      
        6Exhibit 10.2

     

    Xcorporeal,
      Inc. 

    (formerly
      CT Holdings Enterprises, Inc.) 

    
      

    

    2007
      Incentive Compensation Plan 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Xcorporeal,
      Inc. 

     

    2007
      Incentive Compensation Plan 

     

         1. Purpose.
      The
      purpose of this Plan is to assist the Company and its Related Entities in
      attracting, motivating, retaining and rewarding high-quality Employees,
      officers, Directors and Consultants by enabling such persons to acquire or
      increase a proprietary interest in the Company in order to strengthen the
      mutuality of interests between such persons and the Company’s shareholders, and
      providing such persons with annual and long-term performance incentives to
      expend their maximum efforts in the creation of shareholder value. The Plan
      is
      intended to qualify certain compensation awarded under the Plan for tax
      deductibility under Section 162(m) of the Code (as hereafter defined) to the
      extent deemed appropriate by the Plan Administrator. 

     

         2. Definitions.
      For
      purposes of the Plan, the following terms shall be defined as set forth below.
      

     

              (a) “Applicable
      Laws”
means
      the requirements relating to the administration of equity compensation plans
      under U.S. state corporate laws, U.S. federal and state securities laws, the
      Code, the rules and regulations of any stock exchange upon which the Common
      Stock is listed and the applicable laws of any foreign country or jurisdiction
      where Awards are granted under the Plan. 

     

              (b) “Award”
means
      any award granted pursuant to the terms of this Plan, including an Option,
      Stock
      Appreciation Right, Restricted Stock, Stock Unit, Stock granted as a bonus
      or in
      lieu of another award, Dividend Equivalent, Other Stock-Based Award or
      Performance Award, together with any other right or interest, granted to a
      Participant under the Plan. 

     

              (c) “Award
      Agreement”
means
      the written agreement evidencing an Award granted under the Plan. 

     

              (d) “Beneficiary”
means
      the person, persons, trust or trusts which have been designated by a Participant
      in his or her most recent written beneficiary designation filed with the Plan
      Administrator to receive the benefits specified under the Plan upon such
      Participant’s death or to which Awards or other rights are transferred if and to
      the extent permitted under Section 10(b) hereof. If, upon a Participant’s death,
      there is no designated Beneficiary or surviving designated Beneficiary, then
      the
      term Beneficiary means the person, persons, trust or trusts entitled by will
      or
      the laws of descent and distribution to receive such benefits. 

     

              (e) “Board”
means
      the Company’s Board of Directors. 

     

              (f) “Cause”
shall,
      with respect to any Participant, have the meaning specified in the Award
      Agreement. In the absence of any definition in the Award Agreement, “Cause”
shall have the equivalent meaning or the same meaning as “cause” or “for cause”
set forth in any employment, consulting, change in control or other agreement
      for the performance of services between the Participant and the Company or
      a
      Related Entity or, in the absence of any such definition in such agreement,
      such
      term shall mean (i) the failure by the Participant to perform his or her
      duties as assigned by the Company (or a Related Entity) in a reasonable manner,
      (ii) any 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    violation
      or breach by the Participant of his or her employment, consulting or other
      similar agreement with the Company (or a Related Entity), if any, (iii) any
      violation or breach by the Participant of his or her confidential information
      and invention assignment, non-competition, non-solicitation, non-disclosure
      and/or other similar agreement with the Company or a Related Entity, if any,
      (iv) any act by the Participant of dishonesty or bad faith with respect to
      the Company (or a Related Entity), (v) any material violation or breach by
      the Participant of the Company’s or a Related Entity’s policy for employee
      conduct, if any, (vi) use of alcohol, drugs or other similar substances in
      a manner that adversely affects the Participant’s work performance, or
      (vii) the commission by the Participant of any act, misdemeanor, or crime
      reflecting unfavorably upon the Participant or the Company or any Related
      Entity. The good faith determination by the Plan Administrator of whether the
      Participant’s Continuous Service was terminated by the Company for “Cause” shall
      be final and binding for all purposes hereunder. 

     

              (g) “Change
      in Control”
means
      and shall be deemed to have occurred on the earliest of the following dates:
      

     

                   (i) the
      date on which any “person” (as such term is used in Sections 13(d) and 14(d) of
      the Exchange Act) obtains “beneficial ownership” (as defined in Rule 13d-3
      of the Exchange Act) or a pecuniary interest in fifty percent (50%) or more
      of
      the Voting Stock; 

     

                   (ii) the
      consummation of a merger, consolidation, reorganization or similar transaction
      other than a transaction: (1) (a) in which substantially all of the holders
      of Company’s Voting Stock hold or receive directly or indirectly fifty percent
      (50%) or more of the voting stock of the resulting entity or a parent company
      thereof, in substantially the same proportions as their ownership of the Company
      immediately prior to the transaction; or (2) in which the holders of
      Company’s capital stock immediately before such transaction will, immediately
      after such transaction, hold as a group on a fully diluted basis the ability
      to
      elect at least a majority of the directors of the surviving corporation (or
      a
      parent company); 

     

                   (iii) there
      is consummated a sale, lease, exclusive license or other disposition of all
      or
      substantially all of the consolidated assets of the Company and its
      Subsidiaries, other than a sale, lease, license or other disposition of all
      or
      substantially all of the consolidated assets of the Company and its Subsidiaries
      to an entity, fifty percent (50%) or more of the combined voting power of the
      voting securities of which are owned by shareholders of the Company in
      substantially the same proportions as their ownership of the Company immediately
      prior to such sale, lease, license or other disposition; or 

     

                   (iv) individuals
      who, on the date this Plan is adopted by the Board, are Directors (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
      Directors; provided, however, that if the appointment or election (or nomination
      for election) of any new Director was approved or recommended by a majority
      vote
      of the members of the Incumbent Board then still in office, such new member
      shall, for purposes of this Plan, be considered as a member of the Incumbent
      Board. 

     

         For
      purposes of determining whether a Change in Control has occurred, a transaction
      includes all transactions in a series of related transactions, and terms used
      in
      this definition but not 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    defined
      are used as defined in the Plan. The term Change in Control shall not include
      a
      sale of assets, merger or other transaction effected exclusively for the purpose
      of changing the domicile of the Company. 

     

         Notwithstanding
      the foregoing or any other provision of this Plan, the definition of Change
      in
      Control (or any analogous term) in an individual written agreement between
      the
      Company and the Participant shall supersede the foregoing definition with
      respect to Awards subject to such agreement (it being understood, however,
      that
      if no definition of Change in Control or any analogous term is set forth in
      such
      an individual written agreement, the foregoing definition shall apply).

     

              (h) “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, including
      regulations thereunder and successor provisions and regulations thereto.

     

              (i) “Committee”
means
      a
      committee designated by the Board to administer the Plan with respect to at
      least a group of Employees, Directors or Consultants. 

     

              (j) “Company”
means
      Xcorporeal, Inc., a Delaware corporation, formerly CT Holdings Enterprises,
      Inc.

     

              (k) “Consultant”
means
      any person (other than an Employee or a Director, solely with respect to
      rendering services in such person’s capacity as a director) who is engaged by
      the Company or any Related Entity to render consulting or advisory services
      to
      the Company or such Related Entity. 

     

              (l) “Continuous
      Service”
means
      uninterrupted provision of services to the Company or any Related Entity in
      the
      capacity as either an officer, Employee, Director or Consultant. Continuous
      Service shall not be considered to be interrupted in the case of (i) any
      approved leave of absence, (ii) transfers among the Company, any Related
      Entities, or any successor entities, in the capacity as either an officer,
      Employee, Director or Consultant or (iii) any change in status as long as
      the individual remains in the service of the Company or a Related Entity in
      the
      capacity as either an officer, Employee, Director, Consultant (except as
      otherwise provided in the Award Agreement). An approved leave of absence shall
      include sick leave, military leave, or any other authorized personal leave.
      

     

              (m) “Corporate
      Transaction”
means
      the occurrence, in a single transaction or in a series of related transactions,
      of any one or more of the following events: 

     

                   (i) a
      sale, lease, exclusive license or other disposition of a substantial portion
      of
      the consolidated assets of the Company and its Subsidiaries, as determined
      by
      the Plan Administrator, in its discretion; 

     

                   (ii) a
      sale or other disposition of more than twenty percent (20%) of the outstanding
      securities of the Company; or 

     

                   (iii) a
      merger, consolidation, reorganization or similar transaction, whether or not
      the
      Company is the surviving corporation. 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

              (n) “Covered
      Employee”
means
      an Eligible Person who is a Covered Employee as specified in Section 7(d) of
      the
      Plan. 

     

              (o) “Director”
means
      a
      member of the Board or the board of directors of any Related Entity.

     

              (p) “Disability”
means
      a
      permanent and total disability (within the meaning of Section 22(e) of the
      Code), as determined by a medical doctor satisfactory to the Plan Administrator.
      

     

              (q) “Dividend
      Equivalent”
means
      a
      right, granted to a Participant under Section 6(g) hereof, to receive cash,
      Shares, other Awards or other property equal in value to dividends paid with
      respect to a specified number of Shares or other periodic payments.

     

              (r) “Effective
      Date”
means
      the effective date of this Plan, which shall be the date this Plan is adopted
      by
      the Board, subject to the approval of the shareholders of the Company.

     

              (s) “Eligible
      Person”
means
      each officer, Director, Employee or Consultant. The foregoing notwithstanding,
      only employees of the Company, any Parent or any Subsidiary shall be Eligible
      Persons for purposes of receiving a grant of Incentive Stock Options. An
      Employee on leave of absence may be considered as still in the employ of the
      Company or a Related Entity for purposes of eligibility for participation in
      the
      Plan. 

     

              (t) “Employee”
means
      any person, including an officer or Director, who is an employee of the Company
      or any Related Entity. The payment of a director’s fee by the Company or a
      Related Entity shall not be sufficient to constitute “employment” by the
      Company. 

     

              (u) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time, including
      rules thereunder and successor provisions and rules thereto. 

     

              (v) “Fair
      Market Value”
means
      the fair market value of Shares, Awards or other property as determined by
      the
      Plan Administrator, or under procedures established by the Plan Administrator.
      Unless otherwise determined by the Plan Administrator, the Fair Market Value
      of
      Shares as of any given date, after which the Shares are publicly traded on
      a
      stock exchange or market, shall be the closing sale price per Share reported
      on
      a consolidated basis for stock listed on the principal stock exchange or market
      on which Shares is traded on the date as of which such value is being determined
      or, if there is no sale on that date, then on the last previous day on which
      a
      sale was reported. 

     

              (w) “Good
      Reason”
shall,
      with respect to any Participant, have the meaning specified in the Award
      Agreement. In the absence of any definition in the Award Agreement, “Good
      Reason” shall have the equivalent meaning (or the same meaning as “good reason”
or “for good reason”) set forth in any employment, consulting, change in control
      or other agreement for the performance of services between the Participant
      and
      the Company or a Related Entity or, in the absence of any such definition in
      such agreement(s), such term shall mean (i) the assignment to the
      Participant of any duties inconsistent in any material respect with the
      Participant’s position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as assigned by the Company
      (or a Related Entity) or any other action by the Company (or a Related

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    Entity)
      which results in a material diminution in such position, authority, duties
      or
      responsibilities, excluding for this purpose an isolated, insubstantial and
      inadvertent action not taken in bad faith and which is remedied by the Company
      (or a Related Entity) promptly after receipt of notice thereof given by the
      Participant; (ii) any failure by the Company (or a Related Entity) to
      comply with its obligations to the Participant as agreed upon, other than an
      isolated, insubstantial and inadvertent failure not occurring in bad faith
      and
      which is remedied by the Company (or a Related Entity) promptly after receipt
      of
      notice thereof given by the Participant; (iii) the Company’s (or Related
      Entity’s) requiring the Participant to be based at any office or location more
      than fifty (50) miles from the location of employment as of the date of
      Award, except for travel reasonably required in the performance of the
      Participant’s responsibilities; (iv) any purported termination by the
      Company (or a Related Entity) of the Participant’s Continuous Service otherwise
      than for Cause, as defined in Section 2(f), death, or by reason of the
      Participant’s Disability as defined in Section 2(o); or (v) any
      reduction in the Participant’s base salary (unless such reduction is part of
      Company-wide reduction that affects a majority of the persons of comparable
      level to the Participant). 

     

              (x) “Incentive
      Stock Option”
means
      any Option intended to be designated as an incentive stock option within the
      meaning of Section 422 of the Code or any successor provision thereto.

     

              (y) “Non-Employee
      Director”
means
      a
      Director of the Company who is not an Employee. 

     

              (z) “Non-Qualified
      Stock Option”
means
      any Option that is not
      intended
      to be designated as an incentive stock option within the meaning of
      Section 422 of the Code or any successor provision thereto. 

     

              (aa) “Option”
means
      a
      right, granted to a Participant under Section 6(b) hereof, to purchase Shares
      or
      other Awards at a specified price during specified time periods. 

     

              (bb) “Other
      Stock-Based Awards”
means
      Awards granted to a Participant pursuant to Section 6(h) hereof. 

     

              (cc) “Parent”
means
      any corporation (other than the Company), whether now or hereafter existing,
      in
      an unbroken chain of corporations ending with the Company, if each of the
      corporations in the chain (other than the Company) owns stock possessing fifty
      percent (50%) or more of the combined voting power of all classes of stock
      in
      one of the other corporations in the chain. 

     

              (dd) “Participant”
means
      a
      person who has been granted an Award under the Plan which remains outstanding,
      including a person who is no longer an Eligible Person. 

     

              (ee) “Performance
      Award”
means
      a
      right, granted to an Eligible Person under Sections 6(h) or 7 hereof, to receive
      Awards based upon performance criteria specified by the Plan Administrator.
      

     

              (ff) “Performance
      Period”
means
      that period established by the Plan Administrator at the time any Performance
      Award is granted or at any time thereafter during which 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    any
      performance goals specified by the Plan Administrator with respect to such
      Award
      are to be measured. 

     

              (gg) “Plan”
means
      this Xcorporeal, Inc. 2006 Incentive Compensation Plan. 

     

              (hh) “Plan
      Administrator”
means
      the Board, its Compensation Committee, or any Committee delegated by the Board
      to administer the Plan. There may be different Plan Administrators with respect
      to different groups of Eligible Persons. 

     

              (ii) “Related
      Entity”
means
      any Parent, Subsidiary and any business, corporation, partnership, limited
      liability company or other entity designated by the Plan Administrator in which
      the Company, a Parent or a Subsidiary, directly or indirectly, holds a
      substantial ownership interest. 

     

              (jj) “Restricted
      Stock”
means
      Stock granted to a Participant under Section 6(d) hereof, that is subject to
      certain restrictions, including a risk of forfeiture. 

     

              (kk) “Rule 16b-3”
and
      “Rule 16a-1(c)(3)”
means
      Rule 16b-3 and Rule 16a-1(c)(3), as from time to time in effect and
      applicable to the Plan and Participants, promulgated by the Securities and
      Exchange Commission under Section 16 of the Exchange Act. 

     

              (ll) “Share”
means
      a
      share of the Company’s Common Stock, and the share(s) of such other securities
      as may be substituted (or resubstituted) for Stock pursuant to Section 10(c)
      hereof. 

     

              (mm) “Stock”
means
      the Company’s Common Stock, and such other securities as may be substituted (or
      resubstituted) for the Company’s Common Stock pursuant to Section 10(c) hereof.

     

              (nn) “Stock
      Appreciation Right”
means
      a
      right granted to a Participant pursuant to Section 6(c) hereof. 

     

              (oo) “Stock
      Unit”
means
      a
      right, granted to a Participant pursuant to Section 6(e) hereof, to receive
      Shares, cash or a combination thereof at the end of a specified period of time.
      

     

              (pp) “Subsidiary”
means
      any corporation (other than the Company), whether now or hereafter existing,
      in
      an unbroken chain of corporations beginning with the Company, if each of the
      corporations other than the last corporation in the unbroken chain owns stock
      possessing fifty percent (50%) or more of the total combined voting power of
      all
      classes of stock in one of the other corporations in such chain. 

     

              (qq) “Voting
      Stock”
means
      the stock of the Company with a right to vote for the election of Directors
      of
      the Company. 

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

         3. Administration.
      

     

              (a) Administration
      by Board.
      The
      Board shall administer the Plan unless and until the Board delegates
      administration to a Committee, as provided in Section 3(c). The Board
      and/or Committee(s) administering the Plan shall be the “Plan Administrator.”

     

              (b) Powers
      of the Plan Administrator.
      The
      Plan Administrator shall have the power, subject to, and within the limitations
      of, the express provisions of the Plan: 

     

                   (i) To
      determine from time to time which of the persons eligible under the Plan shall
      be granted Awards; when and how each Award shall be granted; what type or
      combination of types of Award shall be granted; the provisions of each Award
      granted (which need not be identical), including the time or times when a person
      shall be permitted to receive Shares or cash pursuant to an Award; and the
      number of Shares or amount of cash with respect to which an Award shall be
      granted to each such person. 

     

                   (ii) To
      construe and interpret the Plan and Awards granted under it, and to establish,
      amend and revoke rules and regulations for its administration. The Plan
      Administrator, in the exercise of this power, may correct any defect, omission
      or inconsistency in the Plan or in any Award Agreement, in a manner and to
      the
      extent it shall deem necessary or expedient to make the Plan fully effective.
      

     

                   (iii) To
      amend the Plan or an Award as provided in Section 10(e). 

     

                   (iv) To
      terminate or suspend the Plan as provided in Section 10(e). 

     

                   (v) To
      adopt such modifications, procedures, and subplans as may be necessary or
      desirable to comply with provisions of the laws of foreign countries in which
      the Company or Related Entities may operate to assure the viability of the
      benefits from Awards granted to Participants performing services in such
      countries and to meet the objectives of the Plan. 

     

                   (vi) To
      effect, at any time and from time to time, with the consent of any adversely
      affected Participant, (1) the reduction of the exercise price of any
      outstanding Award under the Plan, if any, (2) the cancellation of any
      outstanding Award and the grant in substitution therefor of (A) a new Award
      under the Plan or another equity plan of the Company covering the same or a
      different number of Shares, (B) cash and/or (C) other valuable
      consideration (as determined by the Plan Administrator, in its sole discretion)
      or (3) any other action that is treated as a repricing under generally
      accepted accounting principles. 

     

                   (vii) Generally,
      to exercise such powers and to perform such acts as the Plan Administrator
      deems
      necessary or appropriate to promote the best interests of the Company and that
      are not in conflict with the provisions of the Plan. 

     

              (c) Delegation
      to Committee.
      

     

                   (i) General.
      The
      Board may delegate administration of the Plan to a Committee or Committees
      of
      more members of the Board, and the term “Committee” shall apply 

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    to
      any
      person or persons to whom such authority has been delegated. If administration
      is delegated to a Committee, the Committee shall have, in connection with the
      administration of the Plan, the powers theretofore possessed by the Board,
      to
      the extent delegated by the Board, including the power to delegate to a
      subcommittee any of the administrative powers the Committee is authorized to
      exercise, subject, however, to such resolutions, not inconsistent with the
      provisions of the Plan, as may be adopted from time to time by the Board. The
      Board may abolish the Committee at any time and revest in the Board the
      administration of the Plan. 

     

                   (ii) Section 162(m)
      and Rule 16b-3 Compliance.
      In the
      discretion of the Board, the Committee may consist solely of two or more
“Outside Directors”, in accordance with Section 162(m) of the Code, and/or
      solely of two or more “Non-Employee Directors”, in accordance with
      Rule 16b-3. In addition, the Plan Administrator may delegate to a committee
      of two or more members of the Board the authority to grant Awards to Eligible
      Persons who are either (a) not then Covered Employees and are not expected
      to be Covered Employees at the time of recognition of income resulting from
      such
      Award, (b) not persons with respect to whom the Company wishes to comply
      with Section 162(m) of the Code or (c) not then subject to Section 16
      of the Exchange Act. 

     

              (d) Effect
      of Plan Administrator’s Decision.
      All
      determinations, interpretations and constructions made by the Plan Administrator
      shall be made in good faith and shall not be subject to review by any person
      and
      shall be final, binding and conclusive on all persons. 

     

              (e) Arbitration.
      Any
      dispute or claim concerning any Award granted (or not granted) pursuant to
      the
      Plan or any disputes or claims relating to or arising out of the Plan shall
      be
      fully, finally and exclusively resolved by binding and confidential arbitration
      conducted before a retired judge pursuant to the rules of JAMS in the nearest
      city in which JAMS conducts business to the city in which the Participant is
      employed by the Company. The Company shall pay all arbitration fees. In addition
      to any other relief, the arbitrator may award to the prevailing party recovery
      of its attorneys’ fees and costs. By accepting an Award, the Participant and the
      Company waive their respective rights to have any such disputes or claims tried
      by a judge or jury. 

     

              (f) Limitation
      of Liability.
      The
      Board and any Committee(s), and each member thereof, who act as the Plan
      Administrator, shall be entitled to, in good faith, rely or act upon any report
      or other information furnished to him or her by any officer or Employee, the
      Company’s independent auditors, Consultants or any other agents assisting in the
      administration of the Plan. Members of the Board and any Committee(s), and
      any
      officer or Employee acting at the direction or on behalf of the Board and any
      Committee(s), shall not be personally liable for any action or determination
      taken or made in good faith with respect to the Plan, and shall, to the extent
      permitted by law, be fully indemnified and protected by the Company with respect
      to any such action or determination. 

     

         4. Shares
      Issuable Under the Plan.
      

     

              (a) Number
      of Shares Available for Issuance Under Plan.
      Subject
      to adjustment as provided in Section 10(c) hereof, the total number of Shares
      reserved and available 

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    for
      issuance in connection with Awards shall be 4,000,000 Shares. Any Shares issued
      under the Plan may consist, in whole or in part, of authorized and unissued
      Shares or treasury Shares. 

     

              (b) Availability
      of Shares Not Issued pursuant to Awards.
      

     

                   (i) If
      any Shares subject to an Award are forfeited, expire or otherwise terminate
      without issuance of such Shares or any Award is settled for cash or otherwise
      does not result in the issuance of all or a portion of the Shares subject to
      such Award, the Shares shall, to the extent of such forfeiture, expiration,
      termination, cash settlement or non-issuance, be available for Awards under
      the
      Plan, subject to Section 4(b)(iv) below. 

     

                   (ii) If
      any Shares issued pursuant to an Award are forfeited back to or repurchased
      by
      the Company, including, but not limited to, any repurchase or forfeiture caused
      by the failure to meet a contingency or condition required for the vesting
      of
      such Shares, then the Shares forfeited or repurchased shall revert to and become
      available for issuance under the Plan, subject to Section 4(b)(iv) below.

     

                   (iii) In
      the event that any Option or other Award granted hereunder is exercised through
      the withholding of Shares from the Award by the Company or withholding tax
      liabilities arising from such Option or other Award are satisfied by the
      withholding of Shares from the Award by the Company, then only the number of
      Shares issued net of the Shares withheld shall be counted as issued for purposes
      of determining the maximum number of Shares available for grant under the Plan,
      subject to Section 4(b)(iv) below. 

     

                   (iv) Notwithstanding
      anything in this Section 4(b) to the contrary, solely for purposes of
      determining whether Shares are available for the grant of Incentive Stock
      Options, the maximum aggregate number of Shares that may be granted under this
      Plan through Incentive Stock Options shall be determined without regard to
      any
      Shares restored pursuant to this Section 4(b) that, if taken into account,
      would
      cause the Plan, for purposes of the grant of Incentive Stock Options, to fail
      the requirement under Code Section 422 that the Plan designate a maximum
      aggregate number of Shares that may be issued. 

     

              (c) Application
      of Limitations.
      The
      limitation contained in this Section 4 shall apply not only to Awards that
      are settled by the delivery of Shares but also to Awards relating to Shares
      but
      settled only in cash (such as cash-only Stock Appreciation Rights). The Plan
      Administrator may adopt reasonable counting procedures to ensure appropriate
      counting, avoid double counting (as, for example, in the case of tandem or
      substitute awards) and may make adjustments if the number of Shares actually
      delivered differs from the number of Shares previously counted in connection
      with an Award. 

     

         5. Eligibility;
      Per-Person Award Limitations.
      

     

              (a) Eligibility.
      Awards
      may be granted under the Plan only to Eligible Persons. 

     

              (b) Per-Person
      Award Limitations.
      In any
      one calendar year, an Eligible Person may not be granted Options or Stock
      Appreciation Rights under which more than 2,000,000 Shares could be received
      by
      the Participant, subject to adjustment as provided in Section 10(c). In any
      one calendar year, an Eligible Person may not be granted Awards (other than
      

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    an
      Option
      or Stock Appreciation Right) under which more than 2,000,000 Shares could be
      received by the Participant, subject to adjustment as provided in
      Section 10(c). In addition, in any one calendar year, an Eligible Person
      may not be granted Performance Awards (other than Options or Stock Appreciation
      Rights) under which more than $10,000,000 could be received by the Participant.
      

     

         6. Terms
      of Awards.
      

     

              (a) General.
      Awards
      may be granted on the terms and conditions set forth in this Section 6. In
      addition, the Plan Administrator may impose on any Award or the exercise
      thereof, at the date of grant or thereafter (subject to Section 10(e)),
      such additional terms and conditions, not inconsistent with the provisions
      of
      the Plan, as the Plan Administrator shall determine, including terms requiring
      forfeiture of Awards in the event of termination of the Participant’s Continuous
      Service and terms permitting a Participant to make elections relating to his
      or
      her Award. The Plan Administrator shall retain full power and discretion to
      accelerate, waive or modify, at any time, any term or condition of an Award
      that
      is not mandatory under the Plan. 

     

              (b) Options.
      The
      Plan Administrator is authorized to grant Options to any Eligible Person on
      the
      following terms and conditions: 

     

                   (i) Stock
      Option Agreement.
      Each
      grant of an Option shall be evidenced by an Award Agreement. Such Award
      Agreement shall be subject to all applicable terms and conditions of the Plan
      and may be subject to any other terms and conditions which are not inconsistent
      with the Plan and which the Plan Administrator deems appropriate for inclusion
      in the Award Agreement. The provisions of the various Award Agreements entered
      into under the Plan need not be identical. 

     

                   (ii) Number
      of Shares.
      Each
      Award Agreement shall specify the number of Shares that are subject to the
      Option and shall provide for the adjustment of such number in accordance with
      Section 10(c) hereof. The Award Agreement shall also specify whether the Stock
      Option is an Incentive Stock Option or a Non-Qualified Stock Option.

     

                   (iii) Exercise
      Price.
      

     

                        (A) In
      General.
      Each
      Award Agreement shall state the price at which Shares subject to the Option
      may
      be purchased (the “Exercise Price”), which shall be, with respect to Incentive
      Stock Options, not less than 100% of the Fair Market Value of the Stock on
      the
      date of grant. In the case of Non-Qualified Stock Options, the Exercise Price
      shall be determined in the sole discretion of the Plan Administrator; provided,
      however, that notwithstanding any other provision of the Plan, any Non-Qualified
      Stock Option granted with a per Share exercise price less than the per Share
      Fair Market Value on the date of grant shall be structured to avoid the
      imposition of any excise tax under Code Section 409A, unless otherwise
      specifically determined by the Plan Administrator. 

     

                        (B) Ten
      Percent Shareholder.
      If a
      Participant owns or is deemed to own (by reason of the attribution rules
      applicable under Section 424(d) of the Code) more than 10% of the combined
      voting power of all classes of stock of the Company or any Parent or

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    Subsidiary,
      any Incentive Stock Option granted to such Employee must have an exercise price
      per Share of at least 110% of the Fair Market Value of a Share on the date
      of
      grant. 

     

                   (iv) Time
      and Method of Exercise.
      The
      Plan Administrator shall determine the time or times at which or the
      circumstances under which an Option may be exercised in whole or in part
      (including based on achievement of performance goals and/or future service
      requirements), the time or times at which Options shall cease to be or become
      exercisable following termination of Continuous Service or upon other
      conditions, the methods by which the exercise price may be paid or deemed to
      be
      paid (including, in the discretion of the Plan Administrator, a cashless
      exercise procedure), the form of such payment, including, without limitation,
      cash, Stock, net exercise, other Awards or awards granted under other plans
      of
      the Company or a Related Entity, other property (including notes or other
      contractual obligations of Participants to make payment on a deferred basis)
      or
      any other form of consideration legally permissible, and the methods by or
      forms
      in which Stock will be delivered or deemed to be delivered to Participants.
      

     

                   (v) Termination
      of Service.
      Subject
      to earlier termination of the Option as otherwise provided in the Plan and
      unless otherwise provided by the Plan Administrator with respect to an Option
      and set forth in the Award Agreement, an Option shall be exercisable after
      a
      Participant’s termination of Continuous Service only during the applicable time
      period determined in accordance with this Section and thereafter shall terminate
      and no longer be exercisable: 

     

                        (A) Death
      or Disability.
      If the
      Participant’s Continuous Service terminates because of the death or Disability
      of the Participant, the Option, to the extent unexercised and exercisable on
      the
      date on which the Participant’s Continuous Service terminated, may be exercised
      by the Participant (or the Participant’s legal representative or estate) at any
      time prior to the expiration of twelve (12) months (or such other period of
      time as determined by the Plan Administrator, in its discretion) after the
      date
      on which the Participant’s Continuous Service terminated, but in any event only
      with respect to the vested portion of the Option and no later than the date
      of
      expiration of the Option’s term as set forth in the Award Agreement evidencing
      such Option (the “Option
      Expiration Date”).
      

     

                        (B) Termination
      for Cause.
      Notwithstanding any other provision of the Plan to the contrary, if the
      Participant’s Continuous Service is terminated for Cause, the Option shall
      terminate and cease to be exercisable immediately upon such termination of
      Continuous Service. 

     

                        (C) Other
      Termination of Service.
      If the
      Participant’s Continuous Service terminates for any reason, except Disability,
      death or Cause, the Option, to the extent unexercised and exercisable by the
      Participant on the date on which the Participant’s Continuous Service
      terminated, may be exercised by the Participant at any time prior to the
      expiration of three (3) months (or such longer period of time as determined
      by
      the Plan Administrator, in its discretion) after the date on which the
      Participant’s Continuous Service terminated, but in any event only with respect
      to the vested portion of the Option and no later than the Option Expiration
      Date. 

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

                   (vi) Incentive
      Stock Options.
      The
      terms of any Incentive Stock Option granted under the Plan shall comply in
      all
      respects with the provisions of Section 422 of the Code. If and to the
      extent required to comply with Section 422 of the Code, Options granted as
      Incentive Stock Options shall be subject to the following special terms and
      conditions: 

     

                        (1) The
      Option shall not be exercisable more than ten years after the date such
      Incentive Stock Option is granted; provided, however, that if a Participant
      owns
      or is deemed to own (by reason of the attribution rules of Section 424(d) of
      the
      Code) more than 10% of the combined voting power of all classes of stock of
      the
      Company or any Parent or Subsidiary and the Incentive Stock Option is granted
      to
      such Participant, the Incentive Stock Option shall not be exercisable (to the
      extent required by the Code at the time of the grant) for no more than five
      years from the date of grant; and 

     

                        (2) If
      the aggregate Fair Market Value (determined as of the date the Incentive Stock
      Option is granted) of the Shares with respect to which Incentive Stock Options
      granted under the Plan and all other option plans of the Company, its Parent
      or
      any Subsidiary are exercisable for the first time by a Participant during any
      calendar year in excess of $100,000, then such Participant’s Incentive Stock
      Option(s) or portions thereof that exceed such $100,000 limit shall be treated
      as Non-Qualified Stock Options (in the reverse order in which they were granted,
      so that the last Incentive Stock Option will be the first treated as a
      Non-Qualified Stock Option). This paragraph shall only apply to the extent
      such
      limitation is applicable under the Code at the time of the grant. 

     

              (c) Stock
      Appreciation Rights.
      The
      Plan Administrator is authorized to grant Stock Appreciation Rights to
      Participants on the following terms and conditions: 

     

                   (i) Agreement.
      Each
      grant of a Stock Appreciation Right shall be evidenced by an Award Agreement.
      Such Award Agreement shall be subject to all applicable terms and conditions
      of
      the Plan and may be subject to any other terms and conditions which are not
      inconsistent with the Plan and which the Plan Administrator deems appropriate
      for inclusion in the Award Agreement. The provisions of the various Award
      Agreements entered into under the Plan need not be identical. 

     

                   (ii) Right
      to Payment.
      A Stock
      Appreciation Right shall confer on the Participant to whom it is granted a
      right
      to receive, upon exercise thereof, the excess of (A) the Fair Market Value
      of one Share on the date of exercise over (B) the grant price of the Stock
      Appreciation Right as determined by the Plan Administrator. 

     

                   (iii) Other
      Terms.
      The
      Plan Administrator shall determine at the date of grant or thereafter, the
      time
      or times at which and the circumstances under which a Stock Appreciation Right
      may be exercised in whole or in part (including based on achievement of
      performance goals and/or future service requirements), the time or times at
      which Stock Appreciation Rights shall cease to be or become exercisable
      following termination of Continuous Service or upon other conditions, the form
      of payment upon exercise of Shares, cash or other property, the method of
      exercise, method of settlement, form of consideration payable in settlement
      (either cash, Shares or other property), method by or forms in which Stock
      will
      be delivered or deemed to be delivered to Participants, whether or not a Stock
      Appreciation Right 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    shall
      be
      in tandem or in combination with any other Award, and any other terms and
      conditions of any Stock Appreciation Right. Stock Appreciation Rights may be
      either freestanding or in tandem with other Awards. Notwithstanding any other
      provision of the Plan, unless otherwise exempt from Section 409A of the
      Code or otherwise specifically determined by the Plan Administrator, each Stock
      Appreciation Right shall be structured to avoid the imposition of any excise
      tax
      under Section 409A of the Code. 

     

              (d) Restricted
      Stock.
      The
      Plan Administrator is authorized to grant Restricted Stock to any Eligible
      Person on the following terms and conditions: 

     

                   (i) Grant
      and Restrictions.
      Restricted Stock shall be subject to such restrictions on transferability,
      risk
      of forfeiture and other restrictions, if any, as the Plan Administrator may
      impose, or as otherwise provided in this Plan. The terms of any Restricted
      Stock
      granted under the Plan shall be set forth in a written Award Agreement which
      shall contain provisions determined by the Plan Administrator and not
      inconsistent with the Plan. The restrictions may lapse separately or in
      combination at such times, under such circumstances (including based on
      achievement of performance goals and/or future service requirements), in such
      installments or otherwise, as the Plan Administrator may determine at the date
      of grant or thereafter. Except to the extent restricted under the terms of
      the
      Plan and any Award Agreement relating to the Restricted Stock, a Participant
      granted Restricted Stock shall have all of the rights of a shareholder,
      including the right to vote the Restricted Stock and the right to receive
      dividends thereon (subject to any mandatory reinvestment or other requirement
      imposed by the Plan Administrator). During the restricted period applicable
      to
      the Restricted Stock, subject to Section 10(b) below, the Restricted Stock
      may
      not be sold, transferred, pledged, hypothecated, margined or otherwise
      encumbered by the Participant. 

     

                   (ii) Forfeiture.
      Except
      as otherwise determined by the Plan Administrator, upon termination of a
      Participant’s Continuous Service during the applicable restriction period, the
      Participant’s Restricted Stock that is at that time subject to a risk of
      forfeiture that has not lapsed or otherwise been satisfied shall be forfeited
      to
      or reacquired by the Company; provided that the Plan Administrator may provide,
      by rule or regulation or in any Award Agreement or may determine in any
      individual case, that restrictions or forfeiture conditions relating to
      Restricted Stock shall be waived in whole or in part in the event of
      terminations resulting from specified causes, and the Plan Administrator may
      in
      other cases waive in whole or in part the forfeiture of Restricted Stock.

     

                   (iii) Certificates
      for Shares.
      Restricted Stock granted under the Plan may be evidenced in such manner as
      the
      Plan Administrator shall determine. If certificates representing Restricted
      Stock are registered in the name of the Participant, the Plan Administrator
      may
      require that such certificates bear an appropriate legend referring to the
      terms, conditions and restrictions applicable to such Restricted Stock, that
      the
      Company retain physical possession of the certificates, that the certificates
      be
      kept with an escrow agent and that the Participant deliver a stock power to
      the
      Company, endorsed in blank, relating to the Restricted Stock. 

     

                   (iv) Dividends
      and Splits.
      As a
      condition to the grant of an Award of Restricted Stock, the Plan Administrator
      may require that any cash dividends paid on a Share of Restricted Stock be
      automatically reinvested in additional Shares of Restricted Stock or applied
      to

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    the
      purchase of additional Awards under the Plan. Unless otherwise determined by
      the
      Plan Administrator, Shares distributed in connection with a stock split or
      stock
      dividend, and other property distributed as a dividend, shall be subject to
      restrictions and a risk of forfeiture to the same extent as the Restricted
      Stock
      with respect to which such Shares or other property has been distributed.

     

              (e) Stock
      Units.
      The
      Plan Administrator is authorized to grant Stock Units to Participants, which
      are
      rights to receive Shares, cash or other property, or a combination thereof
      at
      the end of a specified time period, subject to the following terms and
      conditions: 

     

                   (i) Award
      and Restrictions.
      Satisfaction of an Award of Stock Units shall occur upon expiration of the
      time
      period specified for such Stock Units by the Plan Administrator (or, if
      permitted by the Plan Administrator, as elected by the Participant). In
      addition, Stock Units shall be subject to such restrictions (which may include
      a
      risk of forfeiture) as the Plan Administrator may impose, if any, which
      restrictions may lapse at the expiration of the time period or at earlier
      specified times (including based on achievement of performance goals and/or
      future service requirements), separately or in combination, in installments
      or
      otherwise, as the Plan Administrator may determine. The terms of an Award of
      Stock Units shall be set forth in a written Award Agreement which shall contain
      provisions determined by the Plan Administrator and not inconsistent with the
      Plan. Stock Units may be satisfied by delivery of Stock, cash equal to the
      Fair
      Market Value of the specified number of Shares covered by the Stock Units,
      or a
      combination thereof, as determined by the Plan Administrator at the date of
      grant or thereafter. Prior to satisfaction of an Award of Stock Units, an Award
      of Stock Units carries no voting or dividend or other rights associated with
      Share ownership. Notwithstanding any other provision of the Plan, unless
      otherwise exempt from Section 409A of the Code or otherwise specifically
      determined by the Plan Administrator, each Stock Unit shall be structured to
      avoid the imposition of any excise tax under Section 409A of the Code.

     

                   (ii) Forfeiture.
      Except
      as otherwise determined by the Plan Administrator, upon termination of a
      Participant’s Continuous Service during the applicable time period thereof to
      which forfeiture conditions apply (as provided in the Award Agreement evidencing
      the Stock Units), the Participant’s Stock Units (other than those Stock Units
      subject to deferral at the election of the Participant) shall be forfeited;
      provided that the Plan Administrator may provide, by rule or regulation or
      in
      any Award Agreement or may determine in any individual case, that restrictions
      or forfeiture conditions relating to Stock Units shall be waived in whole or
      in
      part in the event of terminations resulting from specified causes, and the
      Plan
      Administrator may in other cases waive in whole or in part the forfeiture of
      Stock Units. 

     

                   (iii) Dividend
      Equivalents.
      Unless
      otherwise determined by the Plan Administrator at date of grant, any Dividend
      Equivalents that are granted with respect to any Award of Stock Units shall
      be
      either (A) paid with respect to such Stock Units at the dividend payment
      date in cash or in Shares of unrestricted Stock having a Fair Market Value
      equal
      to the amount of such dividends or (B) deferred with respect to such Stock
      Units and the amount or value thereof automatically deemed reinvested in
      additional Stock Units, other Awards or other investment vehicles, as the Plan
      Administrator shall determine or permit the Participant to elect. 

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

              (f) Bonus
      Stock and Awards in Lieu of Obligations.
      The
      Plan Administrator is authorized to grant Shares as a bonus or to grant Shares
      or other Awards in lieu of Company obligations to pay cash or deliver other
      property under the Plan or under other plans or compensatory arrangements,
      provided that, in the case of Participants subject to Section 16 of the
      Exchange Act, the amount of such grants remains within the discretion of the
      Plan Administrator to the extent necessary to ensure that acquisitions of Shares
      or other Awards are exempt from liability under Section 16(b) of the Exchange
      Act. Shares or Awards granted hereunder shall be subject to such other terms
      as
      shall be determined by the Plan Administrator. 

     

              (g) Dividend
      Equivalents.
      The
      Plan Administrator is authorized to grant Dividend Equivalents to any Eligible
      Person entitling the Eligible Person to receive cash, Shares, other Awards,
      or
      other property equal in value to dividends paid with respect to a specified
      number of Shares, or other periodic payments. Dividend Equivalents may be
      awarded on a free-standing basis or in connection with another Award. The terms
      of an Award of Dividend Equivalents shall be set forth in a written Award
      Agreement which shall contain provisions determined by the Plan Administrator
      and not inconsistent with the Plan. The Plan Administrator may provide that
      Dividend Equivalents shall be paid or distributed when accrued or shall be
      deemed to have been reinvested in additional Stock, Awards, or other investment
      vehicles, and subject to such restrictions on transferability and risks of
      forfeiture, as the Plan Administrator may specify. Notwithstanding any other
      provision of the Plan, unless otherwise exempt from Section 409A of the
      Code or otherwise specifically determined by the Plan Administrator, each
      Dividend Equivalent shall be structured to avoid the imposition of any excise
      tax under Section 409A of the Code. 

     

              (h) Performance
      Awards.
      The
      Plan Administrator is authorized to grant Performance Awards to any Eligible
      Person payable in cash, Shares, other property, or other Awards, on terms and
      conditions established by the Plan Administrator, subject to the provisions
      of
      Section 7 if and to the extent that the Plan Administrator shall, in its
      sole discretion, determine that an Award shall be subject to those provisions.
      The performance criteria to be achieved during any Performance Period and the
      length of the Performance Period shall be determined by the Plan Administrator
      upon the grant of each Performance Award. Except as provided in this Plan or
      as
      may be provided in an Award Agreement, Performance Awards will be distributed
      only after the end of the relevant Performance Period. The performance goals
      to
      be achieved for each Performance Period shall be conclusively determined by
      the
      Plan Administrator and may be based upon the criteria set forth in
      Section 7(b), or in the case of an Award that the Plan Administrator
      determines shall not be subject to Section 7 hereof, any other criteria
      that the Plan Administrator, in its sole discretion, shall determine should
      be
      used for that purpose. The amount of the Award to be distributed shall be
      conclusively determined by the Plan Administrator. Performance Awards may be
      paid in a lump sum or in installments following the close of the Performance
      Period or, in accordance with procedures established by the Plan Administrator,
      on a deferred basis. 

     

              (i) Other
      Stock-Based Awards.
      The
      Plan Administrator is authorized, subject to limitations under applicable law,
      to grant to any Eligible Person such other Awards that may be denominated or
      payable in, valued in whole or in part by reference to, or otherwise based
      on,
      or related to, Shares, as deemed by the Plan Administrator to be consistent
      with
      the purposes of the Plan, including, without limitation, convertible or
      exchangeable debt securities, other rights convertible or exchangeable into
      Stock, purchase rights for Stock, Awards with value and payment 

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    contingent
      upon performance of the Company or any other factors designated by the Plan
      Administrator, and Awards valued by reference to the book value of Stock or
      the
      value of securities of or the performance of specified Related Entities or
      business units. The Plan Administrator shall determine the terms and conditions
      of such Awards. The terms of any Award pursuant to this Section shall be set
      forth in a written Award Agreement which shall contain provisions determined
      by
      the Plan Administrator and not inconsistent with the Plan. Stock delivered
      pursuant to an Award in the nature of a purchase right granted under this
      Section 6(h) shall be purchased for such consideration (including without
      limitation loans from the Company or a Related Entity), paid for at such times,
      by such methods, and in such forms, including, without limitation, cash, Stock,
      other Awards or other property, as the Plan Administrator shall determine.
      Cash
      awards, as an element of or supplement to any other Award under the Plan, may
      also be granted pursuant to this Section 6(h). Notwithstanding any other
      provision of the Plan, unless otherwise exempt from Section 409A of the
      Code or otherwise specifically determined by the Plan Administrator, each such
      Award shall be structured to avoid the imposition of any excise tax under
      Section 409A of the Code. 

     

    7. Tax
      Qualified Performance Awards.

     

              (a) Covered
      Employees.
      A
      Committee, composed in compliance with the requirements of Section 162(m) of
      the
      Code, in its discretion, may determine at the time an Award is granted to an
      Eligible Person who is, or is likely to be, as of the end of the tax year in
      which the Company would claim a tax deduction in connection with such Award,
      a
      Covered Employee, that the provisions of this Section 7 shall be applicable
      to such Award. 

     

              (b) Performance
      Criteria.
      If an
      Award is subject to this Section 7, then the lapsing of restrictions
      thereon and the distribution of cash, Shares or other property pursuant thereto,
      as applicable, shall be contingent upon achievement of one or more objective
      performance goals. Performance goals shall be objective and shall otherwise
      meet
      the requirements of Section 162(m) of the Code and regulations thereunder
      including the requirement that the level or levels of performance targeted
      by
      the Committee result in the achievement of performance goals being
“substantially uncertain.” One or more of the following business criteria for
      the Company, on a consolidated basis, and/or for Related Entities, or for
      business or geographical units of the Company and/or a Related Entity (except
      with respect to the total stockholder return and earnings per share criteria),
      shall be used by the Committee in establishing performance goals for such
      Awards: (1) earnings per Share; (2) revenues or gross margins;
      (3) cash flow; (4) operating margin; (5) return on net assets,
      investment, capital, or equity; (6) economic value added; (7) direct
      contribution; (8) net income; pretax earnings; earnings before interest and
      taxes; earnings before interest, taxes, depreciation and amortization; earnings
      after interest expense and before extraordinary or special items; operating
      income; income before interest income or expense, unusual items and income
      taxes, local, state or federal and excluding budgeted and actual bonuses which
      might be paid under any ongoing bonus plans of the Company; (9) working
      capital; (10) management of fixed costs or variable costs;
      (11) identification or consummation of investment opportunities or
      completion of specified projects in accordance with corporate business plans,
      including strategic mergers, acquisitions or divestitures; (12) total
      stockholder return; and (13) debt reduction. Any of the above goals may be
      determined on an absolute or relative basis or as compared to the performance
      of
      a published or special index deemed applicable by the Committee including,
      but
      not limited to, the Standard & Poor’s 500 Stock Index or a group of
      companies that 

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    are
      comparable to the Company. The Committee shall exclude the impact of an event
      or
      occurrence which the Committee determines should appropriately be excluded,
      including without limitation (i) restructurings, discontinued operations,
      extraordinary items, and other unusual or non-recurring charges, (ii) an
      event either not directly related to the operations of the Company or not within
      the reasonable control of the Company’s management, or (iii) a change in
      accounting standards required by generally accepted accounting principles.
      

     

              (c) Performance
      Period; Timing For Establishing Performance Goals.
      Achievement of performance goals in respect of such Performance Awards shall
      be
      measured over a Performance Period, as specified by the Committee. Performance
      goals shall be established not later than ninety (90) days after the
      beginning of any Performance Period applicable to such Performance Awards,
      or at
      such other date as may be required or permitted for “performance-based
      compensation” under Section 162(m) of the Code. 

     

              (d) Adjustments.
      The
      Committee may, in its discretion, reduce the amount of a settlement otherwise
      to
      be made in connection with Awards subject to this Section 7, but may not
      exercise discretion to increase any such amount payable to a Covered Employee
      in
      respect of an Award subject to this Section 7. The Committee shall specify
      the circumstances in which such Awards shall be paid or forfeited in the event
      of termination of Continuous Service by the Participant prior to the end of
      a
      Performance Period or settlement of Awards. 

     

              (e) Committee
      Certification.
      Within
      a reasonable period of time after the performance criteria have been satisfied
      (but no later than three (3) months after the satisfaction of the
      performance criteria), to the extent necessary to qualify the payments as
“performance based compensation” under Section 162(m) of the Code, the Committee
      shall certify, by resolution or other appropriate action in writing, that the
      performance criteria and any other material terms previously established by
      the
      Committee or set forth in the Plan, have been satisfied. To the extent that
      the
      performance criteria have been satisfied, but the Committee has not certified
      such result within three (3) months after such satisfaction, then the
      Participant shall receive the payment provided for under the Participant’s
      Award. 

     

         8. Certain
      Provisions Applicable to Awards or Sales.
      

     

              (a) Stand-Alone,
      Additional, Tandem and Substitute Awards.
      Awards
      granted under the Plan may, in the discretion of the Plan Administrator, be
      granted either alone or in addition to, in tandem with or in substitution or
      exchange for, any other Award or any award granted under another plan of the
      Company, any Related Entity or any business entity to be acquired by the Company
      or a Related Entity or any other right of a Participant to receive payment
      from
      the Company or any Related Entity. Such additional, tandem, and substitute
      or
      exchange Awards may be granted at any time. If an Award is granted in
      substitution or exchange for another Award or award, the Plan Administrator
      shall require the surrender of such other Award or award in consideration for
      the grant of the new Award. In addition, Awards may be granted in lieu of cash
      compensation, including in lieu of cash amounts payable under other plans of
      the
      Company or any Related Entity. 

     

              (b) Form
      and Timing of Payment Under Awards; Deferrals.
      Subject
      to the terms of the Plan and any applicable Award Agreement, payments to be
      made
      by the Company or 

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    a
      Related
      Entity upon the exercise of an Option or other Award or settlement of an Award
      may be made in such forms as the Plan Administrator shall determine, including,
      without limitation, cash, other Awards or other property, and may be made in
      a
      single payment or transfer, in installments or on a deferred basis. The
      settlement of any Award may be accelerated, and cash paid in lieu of Shares
      in
      connection with such settlement, in the discretion of the Plan Administrator
      or
      upon occurrence of one or more specified events (in addition to a Change in
      Control). Installment or deferred payments may be required by the Plan
      Administrator (subject to Section 10(g) of the Plan) or permitted at the
      election of the Participant on terms and conditions established by the Plan
      Administrator. Payments may include, without limitation, provisions for the
      payment or crediting of a reasonable interest rate on installment or deferred
      payments or the grant or crediting of Dividend Equivalents or other amounts
      in
      respect of installment or deferred payments denominated in Shares. 

     

              (c) Exemptions
      from Section 16(b) Liability.
      It is
      the intent of the Company that this Plan comply in all respects with applicable
      provisions of Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary
      to ensure that neither the grant of any Awards to nor other transaction by
      a
      Participant who is subject to Section 16 of the Exchange Act is subject to
      liability under Section 16(b) thereof (except for transactions acknowledged
      in
      writing to be non-exempt by such Participant). Accordingly, if any provision
      of
      this Plan or any Award Agreement does not comply with the requirements of
      Rule 16b-3 or Rule 16a-1(c)(3) as then applicable to any such
      transaction, such provision will be construed or deemed amended to the extent
      necessary to conform to the applicable requirements of Rule 16b-3 or
      Rule 16a-1(c)(3) so that such Participant shall avoid liability under
      Section 16(b). 

     

              (d) Code
      Section 409A.
      If and
      to the extent that the Plan Administrator believes that any Awards may
      constitute “deferred compensation” under Section 409A of the Code, the
      terms and conditions set forth in the Award Agreement for that Award shall
      be
      drafted in a manner that is intended to comply with, and shall be interpreted
      in
      a manner consistent with, the applicable requirements of Section 409A of
      the Code, unless otherwise agreed to in writing by the Participant and the
      Company. 

     

         9. Change
      in Control; Corporate Transaction.
      

     

              (a) Change
      in Control.
      

     

                   (i) The
      Plan Administrator may, in its discretion, accelerate the vesting,
      exercisability, lapsing of restrictions or expiration of deferral of any Award,
      including upon a Change in Control. In addition, the Plan Administrator may
      provide in an Award Agreement that the performance goals relating to any Award
      will be deemed to have been met upon the occurrence of any Change in Control.
      

     

                   (ii) In
      addition to the terms of Sections 9(a)(i) above, the effect of a “change in
      control,” may be provided (1) in an employment, compensation or severance
      agreement, if any, between the Company or any Related Entity and the
      Participant, relating to the Participant’s employment, compensation or severance
      with or from the Company or such Related Entity or (2) in the Award
      Agreement. 

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

              (b) Corporate
      Transactions.
      In the
      event of a Corporate Transaction, any surviving corporation or acquiring
      corporation (together, the “Successor Corporation”) may either (i) assume
      any or all Awards outstanding under the Plan; (ii) continue any or all
      Awards outstanding under the Plan; or (iii) substitute similar stock awards
      for outstanding Awards (it being understood that similar awards include, but
      are
      not limited to, awards to acquire the same consideration paid to the
      shareholders or the Company, as the case may be, pursuant to the Corporate
      Transaction). In the event that the Successor Corporation does not assume or
      continue any or all such outstanding Awards or substitute similar stock awards
      for such outstanding Awards, then with respect to Awards that have been not
      assumed, continued or substituted, such Awards shall terminate if not exercised
      (if applicable) at or prior to such effective time (contingent upon the
      effectiveness of the Corporate Transaction). 

     

                   The
      Administrator, in its sole discretion, shall determine whether each Award is
      assumed, continued, substituted or terminated. Notwithstanding the foregoing,
      to
      the extent that substantially all of the holders of the Company’s Voting Stock
      hold or receive directly or indirectly ninety percent (90%) or more of the
      Voting Stock of the resulting entity or a parent company thereof, in
      substantially the same proportions as their ownership of the Company immediately
      prior to the transaction, the Awards shall be either assumed or substituted
      by
      the successor corporation or its parent or continued by the Company.

     

              The
      Plan Administrator, in its discretion and without the consent of any
      Participant, may (but is not obligated to) either (i) accelerate the
      vesting of any Awards (determined on an Award by Award basis), including
      permitting the lapse of any repurchase rights held by the Company (and, if
      applicable, the time at which such Awards may be exercised), in full or as
      to
      some percentage of the Award, to a date prior to the effective time of such
      Corporate Transaction as the Plan Administrator shall determine (contingent
      upon
      the effectiveness of the Corporate Transaction) or (ii) provide for a cash
      payment in exchange for the termination of an Award or any portion thereof
      (determined on an Award by Award basis) where such cash payment is equal to
      the
      Fair Market Value of the Shares that the Participant would receive if the Award
      were fully vested and exercised (if applicable) as of such date (less any
      applicable exercise price). 

     

              Notwithstanding
      any other provision in this Plan to the contrary, with respect to Restricted
      Stock and any other Award granted under the Plan with respect to which the
      Company has any reacquisition or repurchase rights, the reacquisition or
      repurchase rights for such Awards may be assigned by the Company to the
      successor of the Company (or the successor’s parent company) in connection with
      such Corporate Transaction. In the event any such rights are not continued
      with
      the Company or assigned to the Successor Corporation, then such rights shall
      lapse and the Award shall be fully vested as of the effective time of the
      Corporate Transaction. In addition, the Plan Administrator, in its discretion,
      may (but is not obligated to) provide that any reacquisition or repurchase
      rights held by the Company with respect to any such Awards (determined on an
      Award by Award basis) shall lapse in whole or in part (contingent upon the
      effectiveness of the Corporate Transaction). 

     

              (c) Dissolution
      or Liquidation.
      In the
      event of a dissolution or liquidation of the Company, then all outstanding
      Awards shall terminate immediately prior to the completion of such dissolution
      or liquidation, and Shares subject to the Company’s repurchase option may be

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    repurchased
      by the Company notwithstanding the fact that the holder of such stock is still
      in Continuous Service. 

     

         10. General
      Provisions.
      

     

              (a) Compliance
      With Legal and Other Requirements.
      The
      Company may, to the extent deemed necessary or advisable by the Plan
      Administrator, postpone the issuance or delivery of Shares or payment of other
      benefits under any Award until completion of such registration or qualification
      of such Shares or other required action under any federal or state law, rule
      or
      regulation, listing or other required action with respect to any stock exchange
      or automated quotation system upon which the Shares or other Company securities
      are listed or quoted or compliance with any other obligation of the Company,
      as
      the Plan Administrator may consider appropriate, and may require any Participant
      to make such representations, furnish such information and comply with or be
      subject to such other conditions as it may consider appropriate in connection
      with the issuance or delivery of Shares or payment of other benefits in
      compliance with applicable laws, rules, and regulations, listing requirements
      or
      other obligations. The foregoing notwithstanding, in connection with a Change
      in
      Control, the Company shall take or cause to be taken no action, and shall
      undertake or permit to arise no legal or contractual obligation, that results
      or
      would result in any postponement of the issuance or delivery of Shares or
      payment of benefits under any Award or the imposition of any other conditions
      on
      such issuance, delivery or payment, to the extent that such postponement or
      other condition would represent a greater burden on a Participant than existed
      on the ninetieth (90th)
      day
      preceding the Change in Control. 

     

              (b) Limits
      on Transferability; Beneficiaries.
      

     

                   (i) General.
      Except
      as provided in the Award Agreement, a Participant may not assign, sell, transfer
      or otherwise encumber or subject to any lien any Award or other right or
      interest granted under this Plan, in whole or in part, other than by will or
      by
      operation of the laws of descent and distribution, and such Awards or rights
      that may be exercisable shall be exercised during the lifetime of the
      Participant only by the Participant or his or her guardian or legal
      representative. 

     

                   (ii) Permitted
      Transfer of Option.
      The
      Plan Administrator, in its sole discretion, may permit the transfer of an Option
      (but not an Incentive Stock Option or any other right to purchase Shares other
      than an Option) as follows: (A) by gift to a member of the Participant’s
      Immediate Family or (B) by transfer by instrument to a trust providing that
      the Option is to be passed to beneficiaries upon death of the Participant.
      For
      purposes of this Section 10(b)(ii), “Immediate Family” shall mean the
      Participant’s spouse (including a former spouse subject to terms of a domestic
      relations order); child, stepchild, grandchild, child-in-law; parent,
      stepparent, grandparent, parent-in-law; sibling and sibling-in-law, and shall
      include adoptive relationships. If a determination is made by counsel for the
      Company that the restrictions contained in this Section 10(b)(ii) are not
      required by applicable federal or state securities laws under the circumstances,
      then the Plan Administrator, in its sole discretion, may permit the transfer
      of
      Awards (other than Incentive Stock Options and Stock Appreciation Rights in
      tandem therewith) to one or more Beneficiaries or other transferees during
      the
      lifetime of the Participant, which may be exercised by such transferees in
      accordance with the terms of such Award, but only if and to the extent permitted
      by the Plan Administrator pursuant to the express terms of an Award

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    Agreement
      (subject to any terms and conditions which the Plan Administrator may impose
      thereon, and further subject to any prohibitions and restrictions on such
      transfers pursuant to Rule 16b-3). A Beneficiary, transferee or other
      person claiming any rights under the Plan from or through any Participant shall
      be subject to all terms and conditions of the Plan and any Award Agreement
      applicable to such Participant, except as otherwise determined by the Plan
      Administrator, and to any additional terms and conditions deemed necessary
      or
      appropriate by the Plan Administrator. 

     

              (c) Adjustments.
      

     

                   (i) Adjustments
      to Awards.
      In the
      event that any dividend or other distribution (whether in the form of cash,
      Shares or other property), recapitalization, forward or reverse split,
      reorganization, merger, consolidation, spin-off, combination, repurchase, share
      exchange, liquidation, dissolution or other similar corporate transaction or
      event affects the Shares and/or such other securities of the Company or any
      other issuer such that a substitution, exchange or adjustment is determined
      by
      the Plan Administrator to be appropriate, then the Plan Administrator shall,
      in
      such manner as it may deem equitable, substitute, exchange or adjust any or
      all
      of (A) the number and kind of Shares which may be delivered in connection with
      Awards granted thereafter, (B) the number and kind of Shares by which
      annual per-person Award limitations are measured under Section 5 hereof,
      (C) the number and kind of Shares subject to or deliverable in respect of
      outstanding Awards, (D) the exercise price, grant price or purchase price
      relating to any Award and/or make provision for payment of cash or other
      property in respect of any outstanding Award, and (E) any other aspect of
      any Award that the Plan Administrator determines to be appropriate.

     

                   (ii) Other
      Adjustments.
      The
      Plan Administrator (which shall be a Committee to the extent such authority
      is
      required to be exercised by a Committee to comply with Code Section 162(m))
      is
      authorized to make adjustments in the terms and conditions of, and the criteria
      included in, Awards (including Awards subject to performance goals) in
      recognition of unusual or nonrecurring events (including, without limitation,
      acquisitions and dispositions of businesses and assets) affecting the Company,
      any Related Entity or any business unit, or the financial statements of the
      Company or any Related Entity, or in response to changes in applicable laws,
      regulations, accounting principles, tax rates and regulations or business
      conditions or in view of the Plan Administrator’s assessment of the business
      strategy of the Company, any Related Entity or business unit thereof,
      performance of comparable organizations, economic and business conditions,
      personal performance of a Participant, and any other circumstances deemed
      relevant; provided that no such adjustment shall be authorized or made if and
      to
      the extent that such authority or the making of such adjustment would cause
      Options, Stock Appreciation Rights or Performance Awards granted to Participants
      designated by the Plan Administrator as Covered Employees and intended to
      qualify as “performance-based compensation” under Code Section 162(m) and the
      regulations thereunder to otherwise fail to qualify as “performance-based
      compensation” under Code Section 162(m) and regulations thereunder.

     

              (d) Taxes.
      The
      Company and any Related Entity are authorized to withhold from any Award
      granted, any payment relating to an Award under the Plan, including from a
      distribution of Shares or any payroll or other payment to a Participant, amounts
      of withholding and other taxes due or potentially payable in connection with
      any
      transaction involving an Award, and to take such other action as the Plan
      Administrator may deem advisable to enable the Company 

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    and
      Participants to satisfy obligations for the payment of withholding taxes and
      other tax obligations relating to any Award. This authority shall include
      authority to withhold or receive Shares or other property and to make cash
      payments in respect thereof in satisfaction of a Participant’s tax obligations,
      either on a mandatory or elective basis in the discretion of the Plan
      Administrator. 

     

              (e) Changes
      to the Plan and Awards.
      The
      Board may amend, alter, suspend, discontinue or terminate the Plan or the
      Committee’s authority to grant Awards under the Plan, without the consent of
      shareholders or Participants. Any amendment or alteration to the Plan shall
      be
      subject to the approval of the Company’s shareholders if such shareholder
      approval is deemed necessary and advisable by the Board. However, without the
      consent of an affected Participant, no such amendment, alteration, suspension,
      discontinuance or termination of the Plan may materially and adversely affect
      the rights of such Participant under any previously granted and outstanding
      Award. The Plan Administrator may waive any conditions or rights under or amend,
      alter, suspend, discontinue or terminate any Award theretofore granted and
      any
      Award Agreement relating thereto, except as otherwise provided in the Plan;
      provided that, without the consent of an affected Participant, no such action
      may materially and adversely affect the rights of such Participant under such
      Award. 

     

              (f) Limitation
      on Rights Conferred Under Plan.
      Neither
      the Plan nor any action taken hereunder shall be construed as (i) giving
      any Eligible Person or Participant the right to continue as an Eligible Person
      or Participant or in the employ of the Company or a Related Entity; (ii)
      interfering in any way with the right of the Company or a Related Entity to
      terminate any Eligible Person’s or Participant’s Continuous Service at any time,
      (iii) giving an Eligible Person or Participant any claim to be granted any
      Award under the Plan or to be treated uniformly with other Participants and
      Employees or (iv) conferring on a Participant any of the rights of a
      shareholder of the Company unless and until the Participant is duly issued
      or
      transferred Shares in accordance with the terms of an Award. 

     

              (g) Unfunded
      Status of Awards; Creation of Trusts.
      The
      Plan is intended to constitute an “unfunded” plan for incentive and deferred
      compensation. With respect to any payments not yet made to a Participant or
      obligations to deliver Shares pursuant to an Award, nothing contained in the
      Plan or any Award shall give any such Participant any rights that are greater
      than those of a general creditor of the Company; provided that the Plan
      Administrator may authorize the creation of trusts and deposit therein cash,
      Shares, other Awards or other property or make other arrangements to meet the
      Company’s obligations under the Plan. Such trusts or other arrangements shall be
      consistent with the “unfunded” status of the Plan unless the Plan Administrator
      otherwise determines with the consent of each affected Participant. The trustee
      of such trusts may be authorized to dispose of trust assets and reinvest the
      proceeds in alternative investments, subject to such terms and conditions as
      the
      Plan Administrator may specify and in accordance with applicable law.

     

              (h) Nonexclusivity
      of the Plan.
      Neither
      the adoption of the Plan by the Board nor its submission to the shareholders
      of
      the Company for approval shall be construed as creating any limitations on
      the
      power of the Plan Administrator to adopt such other incentive arrangements
      as it
      may deem desirable including incentive arrangements and awards which do not
      qualify under Code Section 162(m). 

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

              (i) Fractional
      Shares.
      No
      fractional Shares shall be issued or delivered pursuant to the Plan or any
      Award. The Plan Administrator shall determine whether cash, other Awards or
      other property shall be issued or paid in lieu of such fractional shares or
      whether such fractional shares or any rights thereto shall be forfeited or
      otherwise eliminated. 

     

              (j) Governing
      Law.
      The
      validity, construction and effect of the Plan, any rules and regulations under
      the Plan, and any Award Agreement shall be determined in accordance with the
      laws of the State of Delaware without giving effect to principles of conflicts
      of laws, and applicable federal law. 

     

              (k) Plan
      Effective Date and Shareholder Approval; Termination of Plan.
      The
      Plan shall become effective on the Effective Date, subject to approval of its
      adoption by the Board by shareholders of the Company eligible to vote in the
      election of directors, by a vote sufficient to meet the requirements of Code
      Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act
      (if applicable), applicable and other laws, regulations, and obligations of
      the
      Company applicable to the Plan. Awards may be granted subject to shareholder
      approval, but may not be exercised or otherwise settled in the event shareholder
      approval is not obtained. The Plan shall terminate no later than ten
      (10) years from the date of the later of (x) the Effective Date and
      (y) the date an increase in the number of Shares reserved for issuance
      under the Plan is approved by the Board (subject such increase is also approved
      by the shareholders). 

     

    
      
        
        

      

      
        -23-

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