Document:

a6340426ex10_3.htm

Exhibit 10.3

FORM OF WARRANT

NEITHER THIS SECURITY NOR THE SECURITIES UNDERLYING THIS SECURITY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

COMMON STOCK PURCHASE WARRANT

POKERTEK, INC.

 

	
Warrant Shares: 100,000

	
Issuance Date: _____, 2010            

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Lincoln Park Capital Fund, LLC (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ____, 2010 (the “Initial Exercise Date”) and on or prior to the close of business on the fifth anniversary of the date hereof (the “Termination Date”) but not thereafter, to subscribe for and purchase from POKERTEK, INC., a North Carolina corporation (the “Company”), up to 100,000 shares (the “Warrant Shares”) of Common Stock.   The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.             Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Purchase Agreement (the “Purchase Agreement”), dated _____, 2010, among the Company and the Holder.

 

Section 2.             Exercise.

 

a)            Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within three (3) Business Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise Form within 1 Business Day of receipt of such notice.  In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

  

  

  

  

b)            Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $1.10, subject to adjustment hereunder (the “Exercise Price”).

 

c)            Cashless Exercise.  If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder and all of the Warrant Shares are not then registered for sale by Holder (or the prospectus contained therein is not available for use), then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	  	
(A) =

	
the VWAP on the Business Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

	  	
(B) =

	
the Exercise Price of this Warrant, as adjusted hereunder; and

	  	
(X) =

	
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on the Principal Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Principal Market as reported by Bloomberg L.P. (based on a Business Day from 8:30 a.m. (Central Standard Time to 3:02 p.m. (Central Standard Time), (b)  if the OTC Bulletin Board is a Principal Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

            Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

d)            Mechanics of Exercise.

 

i.            Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and either (A) there is an effective Registration Statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Business Days after the latest of (A) the delivery to the Company of the Notice of Exercise Form, (B) surrender of this Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing have been delivered to the Company.  The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder certificates evidencing the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Business Day (increasing to $20 per Business Day on the fifth Business Day after such liquidated damages begin to accrue) for each Business Day after such Warrant Share Delivery Date until such certificates are delivered or Holder rescinds such exercise.

 

  

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ii.           Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 

 

iii.           Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

 

iv.           Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

v.            No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi.           Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

  

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vii.          Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e)            Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Business Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

(f)            Call Provision.  Subject to the provisions of this Section 2, if, after the later of the six month anniversary of the Issuance Date and the Commencement Date, (i) the VWAP for each of twenty (20) consecutive Business Days (the “Measurement Period,” which twenty (20) consecutive Business Day period shall not have commenced until after the later of the six month anniversary of the Issuance Date and the Commencement Date) exceeds $3.00 (subject to appropriate adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Issuance Date, as the case may be), then the Company may, within one (1) Business Day of the end of such Measurement  Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal to $0.0001 per Warrant Share.  To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies.  If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (Chicago time) on the tenth (10) Business Day after the date the Call Notice is received by the Holder (such date and time, the “Call Date”).  Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice.  In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (Chicago time) on the Call Date.  The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all the Warrants shall first reduce to zero the number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under this Warrant.  For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (Chicago time) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent Call Notices).  Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise.  Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by  6:30 p.m. (Chicago time) on the Call Date, and (2) the Registration Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use by the Holder for the resale of all such Warrant Shares or the Warrant Shares may be freely sold without restriction pursuant to Rule 144 of the Act, and (3) the Common Stock shall be listed or quoted for trading on the Principal Market, and (4) there is a sufficient number of authorized shares of Common Stock for issuance of all Securities under the Transaction Documents, and (5) the issuance of the shares shall not cause a breach of any provision of Section 2.

 

  

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Section 3.             Certain Adjustments.

 

a)            Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)            Subsequent Rights Offerings.  If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to all holders of Common Stock (and not to the Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the VWAP on the record date mentioned below, then, the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP.  Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.

 

c)            Pro Rata Distributions.  If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith.  In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.  Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

 

  

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d)            Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange, including, but not limited to, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction.  “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Business Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Warrant, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

  

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e)            Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

f)             Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

g)            Notice to Holder.

 

i.            Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Company enters into a Variable Rate Transaction despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised.

 

ii.           Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

  

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Section 4.             Transfer of Warrant.

 

a)            Transferability.  This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)            New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)            Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d)            Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.             Miscellaneous.

 

a)            No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

 

  

8

  

 

b)            Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)            Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)            Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant (other than such action as may include a reverse stock split or similar transaction that may cause an adjustment to the number of Warrant Shares) and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)            Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

f)            Restrictions.  The Holder acknowledges that the certificates representing the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g)           Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

  

9

  

 

h)           Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i)            Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)            Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)           Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)            Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

m)           Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	 	POKERTEK, INC.
	 	 	 	 
	 	 	 	  
	 	By:	 	 
	 	 	Name:	Mark D. Roberson
	 	 	Title:	Chief Executive Officer and
	 	 	 	Chief Financial Officer

 

 

  

10

  

NOTICE OF EXERCISE

TO:           __________[COMPANY]

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

o in lawful money of the United States; or

 

o [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

 

_______________________________

_______________________________

_______________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity: _______________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: _______________________________________________________________________________________

 

  

  

  

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

 

Holder’s Signature:             _____________________________

Holder’s Address:               _____________________________

_____________________________

_____________________________

 

Signature Guaranteed:  ___________________________________________

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.Exhibit 10.1
    

    

    

    
      AMERON INTERNATIONAL CORPORATION
2004
      STOCK INCENTIVE PLAN
    

    
      As amended through June 23, 2010
    

    
      ARTICLE ONE
GENERAL
      PROVISIONS
    

    
      1.1    Eligibility
    

    
      This Ameron International Corporation 2004
      Stock Incentive Plan (the “Plan”), adopted effective January 21, 2004,
      is intended to enable Ameron International Corporation (the “Company”)
      to offer various incentive awards based on the equity of the Company to
      the following eligible individuals (“Eligible Individuals”):  key
      employees, officers, and directors (including non-employee directors)
      of, and consultants and independent contractors providing services to,
      the Company or any other corporation, partnership, joint venture,
      limited liability company or other entity in which the Company owns
      fifty percent (50%) or more of the equity ownership interests, directly
      or indirectly (as determined by the Committee, as defined in Paragraph
      1.2A below) (any such entity being referred to herein as an “Eligible
      Affiliate”).
    

    
      This Plan will serve as the successor to
      the Company's existing 2001 Stock Incentive Plan (the “Predecessor
      Plan”), and no further awards will be made under the Predecessor Plan
      from and after the adoption of this Plan by the Company's stockholders
      on the Effective Date (as defined in Paragraph 5.4A below).  All
      outstanding awards under the Predecessor Plan as of the Effective Date
      will be incorporated into this Plan and accordingly will be treated as
      outstanding awards under this Plan.  However, each outstanding award so
      incorporated will continue to be governed by the express terms and
      conditions of the agreements evidencing such award, and to the extent
      that the provisions of this Plan conflict with the terms and conditions
      of any such agreement, such agreement shall govern.  No provision of
      this Plan shall be deemed to affect or otherwise modify the rights or
      obligations of the holders of such incorporated awards with respect to
      their acquisition of shares of the Company's common stock (“Common
      Stock”) thereunder.
    

    
      1.2    Administration Of The Plan
    

    
      A.        Committee.  The
      Plan will be administered by the Compensation & Stock Option Committee
      (the “Committee”) of the Board of Directors of the Company (the
      “Board”), which is composed entirely of “independent directors” as
      defined by Section 303A.02 of the New York Stock Exchange Listed Company
      Manual.  Members of the Committee will serve for such term as the Board
      may determine, and may be removed by the Board at any time.
    

    
      B.        Authority.  Subject
      to the provisions of the Plan, the Committee has full authority to
      administer the Plan within the scope of its delegated responsibilities,
      including authority to interpret and construe any relevant provision of
      the Plan, to adopt rules and regulations that it deems necessary, to
      determine which individuals are Eligible Individuals and which Eligible
      Individuals are to receive awards under the Plan, to determine the
      amount and/or number of shares of Common Stock subject to such awards,
      and to determine the terms of such awards made under the Plan (which
      terms need not be identical).  Notwithstanding the foregoing, the
      Committee shall not be empowered or entitled to take any action or
      exercise any discretion that would cause an award intended to qualify as
      “performance-based compensation” within the meaning of Section 162(m) of
      the Code to fail such qualification.  Decisions of the Committee made
      within the discretion delegated to it by the Board are final and binding
      on all persons.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      1.3    Stock Subject To The Plan
    

    
      A.        Number
      of Shares.  Shares of the
      Company's Common Stock available for issuance under the Plan will be
      drawn from the Company's authorized but unissued shares of Common Stock
      or from reacquired shares of Common Stock, including shares repurchased
      by the Company on the open market.  Subject to adjustment in accordance
      with Paragraph 1.3C, the number of shares of Common Stock that may be
      issued pursuant to awards granted after the Effective Date is (i)
      525,000, plus (ii) shares that were subject to outstanding awards under
      the Predecessor Plan to the extent that such awards expire, are
      terminated, are cancelled, or are forfeited for any reason without such
      shares being issued, plus (iii) shares that are delivered by an
      awardholder to the Company, or are withheld from shares otherwise
      issuable under the award, in payment of all or a portion of the exercise
      price or tax withholding obligation of an award under the Predecessor
      Plan.  Notwithstanding the foregoing, if any portion of an outstanding
      award under the Predecessor Plan is paid in the form of cash, then the
      shares of Common Stock that otherwise would have been issued on account
      of such award or portion thereof will not be available for issuance
      under the Plan.
    

    
      B.        Share
      Counting.
    

    
      (i)       If any outstanding award granted
      after the Effective Date expires, is terminated, is cancelled, or is
      forfeited for any reason before the full number of shares governed by
      such award are issued, those remaining shares will not be charged
      against the limit in Paragraph 1.3A above:  PROVIDED, HOWEVER, that if
      any portion of an outstanding award under the Plan is paid in the form
      of cash, then the shares of Common Stock that otherwise would have been
      issued on account of such award or portion thereof will be charged
      against the limit in Paragraph 1.3A above and will not be available for
      subsequent awards under the Plan.
    

    
      (ii)      In determining whether the
      number of shares issued pursuant to awards granted after the Effective
      Date exceeds the maximum number set forth in Paragraph 1.3A, only the
      net number of shares actually issued shall count against the
      limit.  Thus, if shares are delivered by an awardholder to the Company,
      or are withheld from shares otherwise issuable under the award, in
      payment of all or a portion of the exercise price or tax withholding
      obligation of the award, only the net number of shares issued by the
      Company (i.e., the gross number less the shares delivered or withheld)
      shall be counted toward the limit of Paragraph 1.3A.
    

    
      (iii)     Any Common Stock issued or award
      settled by the Company pursuant to the assumption or substitution of
      outstanding awards or award commitments of an acquired company or other
      entity (whether acquired through the acquisition of stock, assets or
      otherwise) shall not be counted against the limit set forth in
      Paragraph 1.3A.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      C.        Adjustments.  If
      any change is made to the Common Stock issuable under the Plan by reason
      of any stock split, stock dividend, recapitalization, combination of
      shares, exchange of shares, or other change affecting the outstanding
      Common Stock as a class without receipt of consideration, then
      appropriate adjustments will be made to (i) the maximum number and/or
      class of securities issuable under the Plan, (ii) the number and/or
      class of securities and, if applicable, price per share in effect under
      each outstanding award under the Plan, and (iii) the maximum number of
      shares issuable to one individual pursuant to Paragraph 1.3D.  The
      purpose of these adjustments will be to preclude the enlargement or
      dilution of rights and benefits under the awards.
    

    
      D.        Individual
      Limit.  No Eligible Individual
      will receive non-qualified stock options, stock appreciation rights, or
      any combination of each under this Plan for more than 300,000 shares in
      the aggregate (subject in each case to adjustment as provided in
      Paragraph 1.3C) during any consecutive three-calendar-year period, not
      including shares issued pursuant to Section 2.4, and no Eligible
      Individual will receive restricted stock, restricted stock units,
      performance shares, or any combination of each under this Plan for more
      than 150,000 shares in the aggregate (subject in each case to adjustment
      as provided in Paragraph 1.3C) during any consecutive
      three-calendar-year period;  PROVIDED, HOWEVER, that if any portion of
      an outstanding award under the Plan is paid in the form of cash, then
      the shares of Common Stock that otherwise would have been issued on
      account of such award or portion thereof will be charged against the
      individual limit in this Paragraph 1.3D.
    

    
      ARTICLE TWO
NON-QUALIFIED
      STOCK OPTIONS
    

    
      2.1    Terms of Award
    

    
      The Committee has full authority to
      determine the terms of non-qualified stock options awarded under this
      Plan, which terms may vary from award to award, including, without
      limitation, the time or times at which such options become vested and
      exercisable and the time at which such options terminate;  PROVIDED,
      HOWEVER, that in no event shall a non-qualified stock option be
      exercisable after ten (10) years from the date of grant.  Non-qualified
      stock options will be evidenced by such instruments as the Committee may
      from time to time approve.
    

    
      2.2    Price
    

    
      The exercise price per share will be fixed
      by the Committee;  PROVIDED, HOWEVER, that in no event will the exercise
      price per share be less than one hundred percent (100%) of the Fair
      Market Value (as defined in Section 5.3 below) of a share of Common
      Stock on the date of grant.
    

    
      2.3    Exercise And Payment
    

    
      Any non-qualified stock option awarded
      under the Plan may be exercised by notice to the Company, in such form
      as the Committee shall authorize, at any time before termination of the
      option.  The exercise price will be payable in full in cash or check
      made payable to the Company; PROVIDED, HOWEVER, that the Committee may,
      either at the time the option is awarded or at any subsequent time, and
      subject to such limitations as it may determine, authorize payment of
      all or a portion of the exercise price in one or more of the following
      alternative forms:
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      A         in shares of Common Stock valued
      as of the date of notice of exercise, in such form as the Committee
      shall authorize, is delivered to the Company;  or
    

    
      B         through a sale and remittance
      procedure under which the option holder delivers, in such form as the
      Committee shall authorize, an exercise notice and irrevocable
      instructions to a broker promptly to deliver to the Company the amount
      of sale proceeds to pay the exercise price.
    

    
      2.4    Additional Options Upon Exercise
    

    
      A non-qualified stock option may provide,
      subject to such terms as the Committee authorizes, that upon the
      exercise of the non-qualified stock option, the holder automatically
      will be awarded a new non-qualified stock option covering that number of
      shares equal to (i) the number of shares delivered to the Company by the
      holder pursuant to Paragraph 2.3A or by a broker pursuant to Paragraph
      2.3B in payment of the exercise price of the option, (ii) the number of
      shares delivered to the Company by the holder or withheld by the Company
      to satisfy the tax withholding obligation attributable thereto, and\or
      (iii) the number of shares with a then Fair Market Value equal to the
      amount of the tax withholding obligation paid in cash by the
      holder.  Notwithstanding the foregoing, the Committee may not authorize
      new options to be issued pursuant to this Section 2.4 if the
      compensation paid to the option holder is intended to qualify as
      “performance-based compensation” within the meaning of Section 162(m) of
      the Code.
    

    
      2.5    Stockholder Rights
    

    
      An option holder will have no stockholder
      rights with respect to shares covered by an option unless and until
      shares of Common Stock actually are issued to such person.
    

    
      2.6    Separation From Service
    

    
      The Committee will determine and set forth
      in each option whether and on what terms the non-qualified stock option
      will continue to be exercisable, on and after the date that an optionee
      ceases to be employed by or to provide services to the Company or an
      Eligible Affiliate.  The date of termination of an optionee's employment
      or services will be determined by the Committee, which determination
      will be final.
    

    
      ARTICLE THREE
STOCK
      APPRECIATION RIGHTS, RESTRICTED STOCK,
RESTRICTED
      STOCK UNITS, PERFORMANCE SHARES, AND OTHER
STOCK-BASED
      AWARDS
    

    
      3.1    Stock Appreciation Rights
    

    
      Stock appreciation rights may be awarded
      under the Plan either in tandem with a non-qualified stock option
      (“Tandem SARs”) or on a stand-alone basis (“Stand-Alone SARs”). Tandem
      SARs consist of the right to receive, with respect to any number of
      shares of Common Stock, payment in the form of cash and/or Common Stock
      in an amount equal to the excess of the Fair Market Value of a share of
      Common Stock at the time of exercise of the Tandem SAR over the exercise
      price of the related non-qualified option;  PROVIDED, HOWEVER, that the
      exercise of a Tandem SAR with respect to a number of shares of Common
      Stock shall cause the immediate and automatic termination of its related
      non-qualified stock option with respect to an equal number of shares
      (and vice versa).  Stand-Alone SARs consist of the right to receive,
      with respect to any number of shares of Common Stock, payment in the
      form of cash and/or Common Stock in an amount equal to the excess of the
      Fair Market Value of a share of Common Stock at the time of exercise of
      the Stand-Alone SAR over the Fair Market Value per share of Common Stock
      on the date of grant of the Stand-Alone SAR.
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
      Stock appreciation rights are subject to
      such terms and conditions as the Committee shall determine (including,
      but not limited to, continued employment and/or performance standards),
      which may vary from award to award;  PROVIDED, HOWEVER, that the term of
      any stock appreciation right shall not exceed ten (10) years.  The
      holder of a stock appreciation right will have no stockholder rights
      with respect to shares covered by such stock appreciation right unless
      and until shares of Common Stock actually are issued to such
      person.  Stock appreciation rights will be evidenced by such instruments
      as the Committee from time to time may approve.
    

    
      3.2    Restricted Stock
    

    
      Restricted stock awarded under the Plan
      consists of shares of Common Stock, the retention and transfer of which
      are subject to such terms, conditions and restrictions (including, but
      not limited to, continued employment, performance standards, and/or
      forfeiture rights in favor of the Company) as the Committee shall
      determine, which may vary from award to award. Notwithstanding the
      foregoing, the restrictions imposed on restricted stock shall lapse in
      their entirety no sooner than three (3) years from the date of grant,
      PROVIDED, HOWEVER, that the Committee shall have the authority to
      determine (i) whether such restrictions shall lapse incrementally over
      such three-year period (or longer period, if determined by the
      Committee); and (ii) whether the lapse of such restrictions shall be
      accelerated in the case of retirement, disability, or death of the
      awardholder, or in the case of a change in control. With the exception
      of the restrictions imposed on the shares of restricted stock and the
      right to receive dividends, when and if declared, the holder of
      restricted stock will have all the rights of a stockholder of the
      Company. Holders of shares of restricted stock outstanding on the record
      date of any dividend declared by the Board shall be entitled to receive
      such dividend only upon vesting of such shares.  Upon vesting of shares
      of restricted stock, all previously declared and accrued dividends with
      respect to such shares shall be paid, together with interest thereon at
      a rate established by the Board or the Committee, calculated from the
      payment date of such dividend to the vesting date of the unvested shares
      of restricted stock. Grants of restricted stock will be evidenced by
      such instruments as the Committee may from time to time approve.
    

    
      3.3    Restricted Stock Units
    

    
      Restricted stock units awarded under the
      Plan consist of the right to receive shares of Common Stock, subject to
      such terms, conditions, and restrictions (including, but not limited to,
      continued employment, performance standards, and/or forfeiture rights in
      favor of the Company) as the Committee shall determine, which may vary
      from award to award.  The holder of restricted stock units will have no
      stockholder rights with respect to shares covered thereby unless and
      until shares of Common Stock actually are issued to such
      person.  Restricted stock units will be evidenced by such instruments as
      the Committee may from time to time approve.
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
      3.4    Performance Shares
    

    
      Performance shares awarded under the Plan
      consist of the right to receive shares of Common Stock, subject to such
      terms, conditions and restrictions (including, but not limited to,
      continued employment, performance standards, and/or forfeiture rights in
      favor of the Company) as the Committee shall determine, which may vary
      from award to award.  The holder of performance shares will have no
      stockholder rights with respect to shares covered thereby unless and
      until shares of Common Stock actually are issued to such
      person.  Performance shares will be evidenced by such instruments as the
      Committee may from time to time approve.
    

    
      3.5    Other Stock-Based Awards
    

    
      Other awards may be made under this Plan
      that are valued in whole or in part by reference to, or otherwise are
      based on, shares of Common Stock.  Awards under this Section 3.5 may be
      made to Eligible Individuals either alone or in addition to other awards
      granted under the Plan, the Predecessor Plan, or any other stock
      compensation plan, or as payment of a deferred grant, award, or bonus
      made outside the Plan, all as determined in the sole discretion of the
      Committee.  The terms, conditions and restrictions (including, but not
      limited to, continued employment, performance standards, and/or
      forfeiture rights in favor of the Company) to which other stock-based
      awards are subject shall be determined by the Committee and may vary
      from award to award.  Other stock-based awards will be evidenced by such
      instruments as the Committee may from time to time approve.
    

    
      3.6    Settlement of Awards
    

    
      The Committee may provide awardholders
      with an election, or require a holder, to receive all or a portion of
      the total value of any award under this Plan in the form of a cash
      payment and/or Common Stock, or to defer receipt of such cash payment
      and/or Common Stock, subject to such terms, conditions, and restrictions
      as the Committee may specify.
    

    
      ARTICLE FOUR
PERFORMANCE-BASED
      COMPENSATION
    

    
      4.1    Application of Article
    

    
      Notwithstanding any other provision of
      this Plan, if the Committee determines at the time that any award (other
      than a non-qualified stock option or a stock appreciation right) is
      granted, that the awardee is, or likely will 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” within the meaning of Section 162(m)(3)
      of the Code, then the Committee may determine that this Article Four
      shall be applicable to such award.
    

    
      
        

        

      

      
        
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      4.2    Award Cycle
    

    
      The determination of whether, and to what
      extent, awards subject to this Article Four are granted or will vest
      shall be based on the achievement of the performance goals described in
      Section 4.3 over a pre-established period of time designated by the
      Committee (the “Performance Cycle”).
    

    
      4.3    Performance Goals
    

    
      If an award is subject to this Article
      Four, then either the grant of the award, or the lapsing of
      contingencies or restrictions thereon, as the Committee shall determine,
      shall be subject to the achievement of one or more objective performance
      goals established by the Committee.  No later than ninety (90) days
      after the beginning of each Performance Cycle, or, in the case of a
      Performance Cycle that is shorter than one (1) year, no later than the
      date that represents twenty-five percent (25%) of the number of days in
      such Performance Cycle, the Committee shall establish in writing the
      specific performance goals to be achieved and the formula pursuant to
      which the amount of the award (or the lapsing of restrictions with
      respect thereto, as applicable) shall be determined based on the
      attainment of specified levels of the applicable performance
      goals.  Performance goals shall be based on one or any combination of
      the following business criteria, as applied to the Company or an
      Eligible Affiliate as a whole, or any unit thereof, or as compared
      against a peer group of companies as determined by the
      Committee:  revenue;  earnings before interest, taxes, depreciation, and
      amortization (EBITDA);  operating income;  pre- or after-tax
      income;  earnings per share; net cash flow;  net cash flow per
      share;  net earnings;  return on equity;  return on total
      capital;  return on sales;  return on net assets employed;  return on
      assets;  economic value added;  share price performance;  total
      shareholder return;  improvement in or attainment of expense levels;  or
      improvement in or attainment of working capital levels.  An award
      subject to this Article Four that is paid to a single individual shall
      not, when combined with other “performance-based compensation” within
      the meaning of Section 162(m) of the Code paid to such individual,
      exceed $2,500,000 in any given Performance Cycle.
    

    
      4.4    Adjustment of Awards
    

    
      Notwithstanding anything in this Plan to
      the contrary, the Committee may not increase the amount payable pursuant
      to, waive the achievement of the performance goals applicable to, or
      accelerate the lapsing of contingencies or restrictions with respect to,
      an award subject to this Article Four.  The Committee may decrease, or
      delay the lapsing of contingencies or restrictions with respect to, an
      award subject to this Article Four.
    

    
      4.5    Committee Authority
    

    
      The Committee shall have the power to
      impose such other restrictions on awards subject to this Article Four as
      it may deem necessary or appropriate to ensure that such awards satisfy
      all requirements for “performance-based compensation” within the meaning
      of Section 162(m) of the Code, or any successor provision thereto.
    

    
      
        

        

      

      
        
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      ARTICLE FIVE
MISCELLANEOUS
    

    
      5.1    Amendment
    

    
      A.        Board
      Action.  The Board may amend,
      suspend or discontinue the Plan in whole or in part at any time;
      PROVIDED, HOWEVER, that certain amendments may, as determined by the
      Board in its sole discretion, require stockholder approval pursuant to
      applicable laws or regulations.
    

    
      B.        Modification
      of Awards.  The Committee shall
      have full power and authority to modify or waive any term, condition, or
      restriction applicable to any outstanding award under the Plan, to the
      extent not inconsistent with the Plan;  PROVIDED, HOWEVER, that no such
      modification or waiver shall, without the consent of the holder of the
      award, adversely affect the holder's rights thereunder;  and PROVIDED,
      FURTHER, the Committee shall have no authority to reprice outstanding
      awards through reducing the exercise price thereof, or through
      amendment, cancellation, or replacement of awards, except that no
      provision of this Paragraph 5.1B shall restrict or prohibit any
      adjustment or other action taken pursuant to Paragraph 1.3C above.
    

    
      C.        Other
      Programs.  Nothing in this Plan
      shall prevent the Company from adopting any other compensation program,
      including programs involving equity compensation, for employees,
      directors or consultants.  The adoption or amendment of any such program
      shall not be considered an amendment to this Plan.
    

    
      5.2    Tax Withholding
    

    
      A.        Obligation.  The
      Company's obligation to deliver shares or cash upon the exercise of
      awards under the Plan is subject to the satisfaction of all applicable
      Federal, state, and local income and employment tax withholding
      requirements.
    

    
      B.        Stock
      Withholding.  The Committee may
      require or permit, in its discretion and upon such terms and conditions
      as it may deem appropriate (including the applicable safe-harbor
      provisions of SEC Rule 16b-3), holders of outstanding awards under the
      Plan to elect to have the Company withhold, from the shares of Common
      Stock otherwise issuable pursuant to such awards, one or more of such
      shares with an aggregate Fair Market Value equal to the Federal, state,
      and local employment and income taxes (“Taxes”) incurred in connection
      with the acquisition of such shares.  Holders of awards under the Plan
      also may be granted the right to deliver previously acquired shares of
      Common Stock in satisfaction of such Taxes.  The withheld or delivered
      shares will be valued at Fair Market Value on the applicable
      determination date for such Taxes.
    

    
      5.3    Valuation
    

    
      For all purposes under this Plan, the fair
      market value per share of Common Stock on any relevant date under the
      Plan (the “Fair Market Value”) will be the closing selling price per
      share of Common Stock on the day before the date in question on the New
      York Stock Exchange, as such price is officially quoted in the composite
      tape of transactions on such exchange.  If there is no reported sale of
      Common Stock on such exchange on the day before the date in question,
      then the Fair Market Value will be the closing selling price on the
      exchange on the last preceding date for which such quotation
      exists.  Notwithstanding the foregoing, if the Committee determines
      that, as a result of circumstances existing on any date, the use of the
      above rule is not a reasonable method of determining Fair Market Value
      on that date, or if Common Stock is not at the time listed or admitted
      to trading as outlined above, the Committee may use such other method
      as, in its judgment, is reasonable.
    

    
      
        

        

      

      
        
          8
        

        
          

        

      

      
        

        

      

    

    
      5.4    Effective Date And Term Of Plan
    

    
      A.        Effective
      Date.  This Plan shall be
      effective from and after January 21, 2004 (the “Effective Date”),
      subject to approval by the shareholders of the Company.  No award
      granted hereunder shall be of any force or effect unless and until this
      Plan shall have been so approved.
    

    
      B.        Term.  No
      award may be granted under the Plan after ten (10) years from the
      Effective Date (the “Termination Date”).  Subject to this limit, the
      Committee may make awards under the Plan at any time after the Effective
      Date of the Plan and before the Termination Date.
    

    
      5.5    Use Of Proceeds
    

    
      Any cash proceeds received by the Company
      from the sale of shares pursuant to awards under the Plan will be used
      for general corporate purposes.
    

    
      5.6    No Employment/Service Rights
    

    
      Neither the establishment of this Plan,
      nor any action taken under the terms of this Plan, nor any provision of
      this Plan will be construed to grant any individual the right to remain
      in the employ or service of the Company or an Eligible Affiliate (or any
      subsidiary or parent thereof) for any period of specific duration, and
      the Company or an Eligible Affiliate (or any subsidiary or parent
      thereof) may terminate such individual's employment or service at any
      time and for any reason, with or without cause.  Nothing contained in
      this Plan or in any award under this Plan will affect any contractual
      right of an employee or other service provider pursuant to a written
      employment or service agreement executed by both parties.
    

    
      5.7    Election Under Code Section 83(b)
    

    
      An Eligible Individual who receives an
      award of restricted stock or any other award under this Plan
      constituting restricted property (and not a mere right to receive
      payment or a potential payment in the future) shall be entitled to make,
      at his or her discretion, within thirty (30) days of receipt of such
      restricted property and in accordance with applicable laws and
      regulations, the election provided for under Section 83(b) of the Code
      to be taxed on the fair market value of such restricted property at the
      time it is received.  Eligible Individuals should consult their
      individual tax advisors as to the tax consequences to them of the
      election under Section 83(b).
    

    
      
        

        

      

      
        
          9
        

        
          

        

      

      
        

        

      

    

    
      5.8    Corporate Transactions
    

    
      The Committee may determine and set forth
      in each award, either at the time of grant or by amendment thereafter,
      the effect, if any, that any sale of stock or assets, merger,
      combination, spinoff, reorganization, or liquidation of the Company will
      have upon the term, exercisability and/or vesting of outstanding
      awards;  provided that any awards that are continued, assumed or
      replaced with comparable awards in connection with any transaction will
      be adjusted as provided in Paragraph 1.3C.  The grant of awards under
      this Plan will in no way affect the right of the issuer of Common Stock
      to adjust, reclassify, reorganize, or otherwise change its capital or
      business structure or to merge, consolidate, dissolve, liquidate or sell
      or transfer all or any part of its business or assets.
    

    
      5.9    Transferability of Awards
    

    
      During the lifetime of the awardee, awards
      under this Plan will be exercisable only by the awardee and will not be
      assignable or transferable by the awardee other than by will or by the
      laws of descent and distribution following the awardee's
      death.  However, if and to the extent that the Committee so authorizes
      at the time an award is granted or amended, an option or other award
      may, (i) in connection with a gift or a qualified domestic relations
      order, be assigned in whole or in part during the awardee's lifetime to
      one or more members of the awardee's family or to a trust, foundation or
      other entity in which one or more such family members has more than
      fifty percent (50%) of the beneficial interest and (ii) be assigned in
      whole or in part during the awardee's lifetime to a third party.  Rights
      under the assigned portion only may be exercised by the person or
      persons who acquire a proprietary interest in the award pursuant to the
      assignment.  The terms applicable to the assigned portion shall be the
      same as those in effect for the award immediately prior to such
      assignment and shall be set forth in such documents issued to the
      assignee as the Committee may deem appropriate.
    

    
      5.10   Change in Control
    

    
      The terms and conditions (if any) that
      will apply to any award granted under this Plan in the case of a change
      in control of the Company shall be determined by the Committee, in its
      sole discretion, and shall be set forth in the individual award
      agreements or other instruments to which awards under the Plan are
      subject.
    

    
      

      10

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