Document:

Exhibit 10.1

 

Non-Employee Director Compensation Policy

 

Penn National Gaming, Inc.
(the “Company”) pays director’s fees to each director who is not an employee of
the Company.  Each non-employee director
receives an annual retainer fee of $50,000. 
Members of the Audit Committee and Compensation Committee each receive
an annual retainer fee of $10,000 and $5,000, respectively.  Non-employee directors do not receive a
separate retainer fee for membership on the Nominating or Compliance
Committees.  Retainer fees are paid in
twelve monthly installments throughout the year.  Non-employee directors are also reimbursed
for out-of-pocket expenses in connection with their attendance in person at
Board and Committee meetings.  In
addition, each non-employee director receives an annual grant of options to
purchase 30,000 shares of Common Stock of the Company.  The exercise price of the options granted to
non-employee directors is equal to the fair market value of the Company’s
Common Stock on the date of the grant.  The
options vest one quarter on the first anniversary of the date of grant and one
quarter on each succeeding anniversary.Exhibit
10.01

 

 

June 1, 2005

 

 

Scott Mercer

 

Dear Scott:

 

On behalf of Adaptec, Inc.,
I am pleased to offer you the position of Interim Chief Executive Officer,
reporting to Carl Conti, Chairman of the Board. 
I am confident that you will provide the senior leadership that will
continue to enhance our customer and stockholder value.

 

Your initial base salary
will be $41,666.67 per month. You will also be eligible to participate in the
Quarterly Variable Incentive Plan (VIP) and the Adaptec Incentive Plan (AIP),
which targets a percentage of your base salary to be paid.  The VIP
is based on achievement of quarterly objectives and is targeted at 4% of your
base pay. You must be employed for the full quarter to receive a VIP.  The AIP is based on Company achievement of
revenue and operating profit before taxes and is targeted at 75% of your base
salary.  Actual bonus payout will vary
based on Company and individual performance.

 

In
accordance with the Company’s Stock Option Plan, the Compensation Committee of our
Board of Director’s approved that you be granted an option to purchase 50,000
shares of Adaptec stock.  The Option
shall be an “Incentive Stock Option” to the maximum limit allowable under the
2004 Plan and IRS regulations. Any portion of this Option in excess of the 2004
Plan and IRS limitations shall be deemed to be a Non-Qualified Stock
Option.  The option grant will be
effective June 1, 2005.  The
exercise price of the Option shall be the fair market value of Adaptec’s common
stock.  The price is set at the closing price
of Adaptec’s stock on May 31, 2005. These options will vest 50% on September 1,
2005 and the remaining 50% will vest on December 1, 2005.

 

Adaptec provides a full
range of company paid benefits including a flexible program that provides
employees with “credits” to purchase coverage tailored to individual needs.  As a senior executive, you may elect to defer
up to 100% of your salary and/or bonus income under the Deferred Compensation
Plan.  In addition, you will receive a
$650 per month car allowance, a free annual physical and financial planning
assistance up to $2,500 net per year.

 

 

This offer is contingent
upon your ability to comply with the employment authorization provisions of the
Immigration & Naturalization Act. Specifically, you will need to be
able to demonstrate through documentation, and to sign a Declaration under
penalty of perjury that you are authorized to work in the United States.  If your ability to execute INS form I-9
depends upon Adaptec filing and receiving approval of a nonimmigrant visa
(other than an H-1B change-of-employer) petition for you, Adaptec reserves the
right to unilaterally revoke this offer of employment by notice to you. Adaptec
will not normally exercise this right unless, at the end of a 120-day period
from the date a NIV or IV petition is filed for you, you are unable to appear
for work due to lack of employment authorization.  In addition, this offer is contingent upon
the successful completion of your background investigation.

 

This offer will remain
valid for seven days from the date of this letter unless we notify you
otherwise.  You should understand that
this offer does not constitute a contract of employment for any specified
period of time but will create an “employment at will” relationship.

 

Please sign this letter,
indicating acceptance of this offer and your anticipated start date.  Return the signed copy to Shirley Olerich,
Vice President – Human Resources (M/S 15A) and retain one copy for your records.

 

Please review and
complete the enclosed forms.  During
orientation, you will be asked to show the appropriate documents.  Please contact Lundyn LaFleur in Human
Resources lundyn_lafleur@adaptec.com or 957-6610 to arrange for your orientation.

 

We are confident you will
make a major contribution to our success and are looking forward to having you
join us.

 

Sincerely,

 

	
  /s/ Shirley B. Olerich

  	
   

  
	
   

  
	
  Shirley B. Olerich

  
	
  Vice President, Human
  Resources

  

 

C: Lucie Fjeldstad,
Robert Loarie

 

Attachments

 

RNS:mc

 

2

 

 

	
  /s/ Scott Mercer

  	
  Accepted

  
	
   

  	
   

  
	
  26 May 2005

  	
  Start Date

  

 

 

 

Please indicate below how
you would like your name to appear on your business cards and nameplate:

 

	
   

  	
  (name on business
  cards)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (title on business
  cards)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (nameplate)

  

 

RNS:mc

 

3Exhibit
10.02

 

 

 

June 1, 2005

 

 

Subramanian
Sundaresh

 

Dear Sundi:

 

On behalf of the Board of
Directors, I am pleased to offer you the position of President effective May 26,
2005.  You will be responsible for the
company day-to-day operational decisions including sales, marketing,
engineering, operations, and manufacturing. 
We will jointly determine Adaptec’s strategy.

 

I look forward to our
partnership in returning Adaptec to being a successful and profitable
business.  Your new base rate of pay will
be $375,000 per year and your Adaptec Incentive Plan (AIP) will be targeted at
75%.

 

Please sign this letter,
indicating acceptance of this offer.  I
wish you continued success in your career at Adaptec.

 

	
  Sincerely,

  
	
   

  
	
  /s/ D. Scott Mercer

  	
   

  
	
   

  
	
  D. Scott Mercer

  
	
  Interim Chief Executive
  Officer

  

 

 

	
  Accepted:

  	
  /s/ Subramanian
  Sundaresh

  	
   

  	
  6/01/05

  	
   

  
	
   

  	
  Employee
  Signature

  	
   

  	
  Date

  	
   

  

 

INIT:EXHIBIT 10.3

 

AVISTAR COMMUNICATIONS CORPORATION

 

2000 DIRECTOR OPTION PLAN

 

(As Amended Effective June 1,
2005)

 

1.                                       Purposes of the Plan.  The
purposes of this 2000 Director Option Plan are to attract and retain the best
available personnel for service as Outside Directors (as defined herein) of the
Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.

 

All options
granted hereunder shall be nonstatutory stock options.

 

2.                                       Definitions.  As used herein, the following
definitions shall apply:

 

(a) 
“Annual Meeting of Stockholders” shall mean the Company’s annual meeting
of stockholders.

 

(b) 
“Board” shall mean the Board of Directors of the Company.

 

(c) 
“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(d) 
“Common Stock” shall mean the common stock of the Company.

 

(e) 
“Company” shall mean Avistar Communications Corporation, a Delaware
corporation.

 

(f) 
“Consultant” means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services to such entity.

 

(g) 
“Director” shall mean a member of the Board.

 

(h) 
“Disability” shall mean total and permanent disability as defined in section 22(e)(3) of
the Code.

 

(i) 
“Employee” shall mean any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.  The payment of a Director’s fee by the
Company shall not be sufficient in and of itself to constitute “employment” by
the Company.

 

(j) 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

 

(k) 
“Fair Market Value” shall mean, as of any date, the value of Common
Stock determined as follows:

 

(i)                                     If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;

 

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

 

(iii)                               In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Board.

 

(l) 
“Inside Director” shall mean a Director who is an Employee.

 

(m) “Option”
shall mean a stock option granted pursuant to the Plan.

 

(n) 
“Optioned Stock” shall mean the Common Stock subject to an Option.

 

(o) 
“Optionee” shall mean a Director who holds an Option.

 

(p) 
“Outside Director” shall mean a Director who is not an Employee.

 

(q) 
“Parent” shall mean a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.

 

(r) 
“Plan” shall mean this 2000 Director Option Plan.

 

(s) 
“Service Provider” means a Director or Consultant.

 

(t) 
“Share” shall mean a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.

 

(u) 
“Subsidiary” shall mean a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Internal
Revenue Code of 1986.

 

3.                                       Stock Subject to the Plan.  Subject
to the provisions of Section 10 of the Plan, the maximum aggregate number
of Shares which may be optioned and sold under the Plan is 814,000 Shares
(the “Pool”) (the Shares may be authorized, but unissued, or reacquired Common
Stock), together with an annual increase to the number of Shares reserved
thereunder on the first day of the Company’s fiscal year, beginning with January 1,
2004, equal to the lesser of

 

2

 

(i) 175,000 Shares,
(ii) 1.0% of the outstanding Shares of Common Stock on the last day of
each prior fiscal year or (iii) such amount as determined by the Board.

 

If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Shares that have actually
been issued under the Plan shall not be returned to the Plan and shall not
become available for future distribution under the Plan.

 

4.                                       Administration and Grants of Options under
the Plan.

 

(a)  Procedure
for Grants.  All grants of Options to
Outside Directors under this Plan shall be automatic and nondiscretionary and
shall be made strictly in accordance with the following provisions:

 

(i)                                     No
person shall have any discretion to select which Outside Directors shall be
granted Options or to determine the number of Shares to be covered by Options.

 

(ii)                                  Each
Outside Director shall be automatically granted a one-time Option to purchase
50,000 Shares (the “First Option”) on the date on which such person first
becomes an Outside Director, whether through election by the stockholders of
the Company or appointment by the Board to fill a vacancy; provided, however,
that an Inside Director who ceases to be an Inside Director but who remains a
Director shall not receive a First Option. 
The First Option for an Outside Director who has not previously received
a stock option grant from the Company shall be for 50,000 Shares.

 

(iii)                               Each
Outside Director shall subsequently be automatically granted an Option to
purchase Shares (a “Subsequent Option”) on the date of the first meeting of the
Board following the 2005 Annual Meeting of Stockholders, and on January 1st
of each year thereafter, commencing with January 1, 2006, provided that (i) he
or she is then an Outside Director and (ii) as of such date, he or she shall
have served on the Board for at least the preceding six (6) months.  The Subsequent Option shall be for 25,000
Shares.

 

(iv)                              Each
Outside Director who is a member of the Audit Committee of the Board of
Directors shall also be automatically granted an additional Option to purchase
Shares (a “Subsequent Audit Committee Option”) on the date of the first meeting
of the Board following the 2005 Annual Meeting of Stockholders, and on January 1st
of each year thereafter, commencing with January 1, 2006, provided that (i) he
or she is then a member of the Audit Committee of the Board of Directors.  The Subsequent Audit Committee Option shall
be for 10,000 Shares for the Chairman of the Audit Committee and
5,000 Shares for each other member of the Audit Committee.

 

(v)                                 Each
Outside Director serving on the Board as of June 12, 2001 shall be
automatically granted an Option to purchase 60,000 Shares at an exercise price
equal to 100% of the fair market value on such date (a “One-Time Option”), as approved
by the stockholders at the Company’s 2001 Annual Meeting of Stockholders.

 

(vi)                              Notwithstanding
the provisions of subsections (ii), (iii), (iv) and (v) hereof,
any exercise of an Option granted before the Company has obtained stockholder
approval of

 

3

 

the Plan in accordance
with Section 16 hereof shall be conditioned upon obtaining such
stockholder approval of the Plan in accordance with Section 16 hereof.

 

(vii)                           The
terms of a First Option granted hereunder shall be as follows:

 

(A)                              the
term of the First Option shall be ten (10) years.

 

(B)                                the
First Option shall be exercisable only while the Optionee remains a Service
Provider of the Company, except as set forth in Sections 8 and 10 hereof.

 

(C)                                the
exercise price per Share shall be 100% of the Fair Market Value per Share on
the date of grant of the First Option provided, however, that in the case of a
First Option granted on the effective date of the Company’s initial public
offering pursuant to a registration statement filed with the Securities and
Exchange Commission, the exercise price per share shall be the initial public
offering price per share.

 

(D)                               subject
to Section 10 hereof, the First Option shall become exercisable cumulatively
as to 1/4 of the Shares subject to the First Option on
the first anniversary of the grant date and 1/48th of the Shares subject to the
First Option in each month thereafter on the same day of each month as the
grant date (if there is no corresponding day in any month, then the last day of
such month), so that the First Option shall be fully exercisable four years
after its date of grant, provided that the Optionee continues to serve as a Service
Provider on such dates.

 

(viii)                        The terms
of a Subsequent Option granted hereunder shall be as follows:

 

(A)                              the
term of the Subsequent Option shall be ten (10) years.

 

(B)                                the
Subsequent Option shall be exercisable only while the Optionee remains a Service
Provider of the Company, except as set forth in Sections 8 and 10 hereof.

 

(C)                                the
exercise price per Share shall be 100% of the Fair Market Value per Share on
the date of grant of the Subsequent Option.

 

(D)                               subject
to Section 10 hereof, the Subsequent Option shall become exercisable
cumulatively as to 1⁄4 of the Shares subject to the Subsequent Option on the
first anniversary of the grant date and 1/48th of the Shares subject to the
Subsequent Option in each month thereafter on the same day of each month as the
grant date (if there is no corresponding day in any month, then the last day of
such month), so that the Subsequent Option shall be fully exercisable four
years after its date of grant, provided that the Optionee continues to serve as
a Service Provider on such dates.

 

(ix)                                The
terms of a One-Time Option granted hereunder shall be as follows:

 

(A)                              the
term of the One-Time Option shall be ten (10) years.

 

4

 

(B)                                the
One-Time Option shall be exercisable only while the Outside Director remains a Director
of the Company, except as set forth in Sections 8 and 10 hereof.

 

(C)                                the
exercise price per Share shall be 100% of the Fair Market Value per Share on
the date of grant of the One-Time Option.

 

(D)                               subject
to Section 10 hereof, the One-Time Option shall become exercisable
cumulatively with respect to 1/4th of the One-Time Option at the end of each
year after the date of grant, so that the One-Time Option shall be fully
exercisable four years after its date of grant, provided that the Optionee
continues to serve as a Director on such dates.

 

(x)                                   In
the event that any Option granted under the Plan would cause the number of
Shares subject to outstanding Options plus the number of Shares previously
purchased under Options to exceed the Pool, then the remaining Shares available
for Option grant shall be granted under Options to the Outside Directors on a
pro rata basis.  No further grants shall
be made until such time, if any, as additional Shares become available for
grant under the Plan through action of the Board or the stockholders to
increase the number of Shares which may be issued under the Plan or through
cancellation or expiration of Options previously granted hereunder.

 

5.                                       Eligibility.  Options may be granted only to
Outside Directors.  All Options shall be
automatically granted in accordance with the terms set forth in Section 4
hereof.

 

The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate the Director’s relationship with the Company at any time.

 

6.                                       Term of Plan.  The Plan
shall become effective upon the earlier to occur of its adoption by the Board
or its approval by the stockholders of the Company as described in Section 16
of the Plan; provided, however, the Plan shall not become effective until the
effective date of the Company’s initial public offering pursuant to a
registration statement filed with the Securities and Exchange Commission.  It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 11 of the Plan.

 

7.                                       Form of Consideration.  The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall consist of (i) cash, (ii) check,
(iii) other shares which (x) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six (6) months
on the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (iv) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (v) any combination of the foregoing methods of payment.

 

8.                                       Exercise of Option.

 

(a)  Procedure for Exercise;
Rights as a Stockholder. Any Option granted hereunder shall be exercisable
at such times as are set forth in Section 4 hereof; provided, however,
that no

 

5

 

Options shall be
exercisable until stockholder approval of the Plan in accordance with Section 16
hereof has been obtained.

 

An Option may not be exercised for a fraction of a Share.

 

An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company.  Full payment may consist of any
consideration and method of payment allowable under Section 7 of the
Plan.  Until the issuance (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder
shall exist with respect to the Optioned Stock, notwithstanding the exercise of
the Option.  A share certificate for the
number of Shares so acquired shall be issued to the Optionee as soon as
practicable after exercise of the Option. No adjustment shall be made for a
dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 10 of the Plan.

 

Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

 

(b)  Termination
of Continuous Status as a Service Provider. 
Subject to Section 10 hereof, in the event an Optionee’s status as
a Service Provider terminates (other than upon the Optionee’s death or Disability),
the Optionee may exercise his or her vested Options in accordance with the
following provisions:

 

(i)                                     An
Optionee who served as a Director on the Board less than twenty-four (24)
months from the time of his or her appointment to the Board shall have three (3) months
to exercise his or her Option(s) following his or her date of termination as a
Service Provider;

 

(ii)                                  An
Optionee who served as a Director on the Board for at least twenty-four (24)
months but less than thirty-six (36) months from the time of his or her first appointment
to the Board shall have one (1) year to exercise his or her Option(s)
following his or her date of termination as a Service Provider.

 

(iii)                               An
Optionee who served as a Director on the Board for at least thirty-six (36) months
from the time of his or her first appointment to the Board shall have two (2) years
to exercise his or her Option(s) following his or her date of termination as a
Service Provider.

 

The Optionee shall exercise his or her Option to the extent that the Optionee
was entitled to exercise it on the date of such termination.  To the extent that the Optionee was not
entitled to exercise an Option on the date of such termination, and to the
extent that the Optionee does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate.

 

6

 

(c)  Disability
of Optionee.  In the event Optionee’s
status as a Service Provider terminates as a result of Disability, the Optionee
may exercise his or her Option, but only within twelve (12) months following
the date of such termination, and only to the extent that the Optionee was
entitled to exercise it on the date of such termination (but in no event later
than the expiration of its ten (10) year term).  To the extent that the Optionee was not
entitled to exercise an Option on the date of termination, or if he or she does
not exercise such Option (to the extent otherwise so entitled) within the time
specified herein, the Option shall terminate.

 

(d)  Death of Optionee.  In the event of an Optionee’s death, the
Optionee’s estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee
was entitled to exercise it on the date of death (but in no event later than
the expiration of its ten (10) year term).  To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee’s estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.

 

9.                                       Non-Transferability of Options.  The
Option may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee.

 

10.                                 Adjustments upon Changes in Capitalization,
Dissolution, Merger or Asset Sale.

 

(a)  Changes
in Capitalization.  Subject to any
required action by the stockholders of the Company, the number of Shares
covered by each outstanding Option, the number of Shares which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per Share covered by each such outstanding
Option, and the number of Shares issuable pursuant to the automatic grant
provisions of Section 4 hereof shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.”  Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.

 

(b)  Dissolution
or Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, to the extent that an
Option has not been previously exercised, it shall terminate immediately prior
to the consummation of such proposed action.

 

(c)  Merger
or Asset Sale.  In the event of a
merger of the Company with or into another corporation or the sale of
substantially all of the assets of the Company, outstanding Options may be
assumed or equivalent options may be substituted by the successor corporation
or a Parent or Subsidiary thereof (the “Successor Corporation”).  If an Option is assumed or substituted for,
the

 

7

 

Option or equivalent
option shall continue to be exercisable as provided in Section 4 hereof
for so long as the Optionee serves as a Director or a director of the Successor
Corporation.  Following such assumption
or substitution, if the Optionee’s status as a Director or director of the
Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, the Option or option shall become fully
exercisable, including as to Shares for which it would not otherwise be
exercisable.  Thereafter, the Option or
option shall remain exercisable in accordance with Sections 8(b) through (d) above.

 

If the
Successor Corporation does not assume an outstanding Option or substitute for
it an equivalent option, the Option shall become fully vested and exercisable,
including as to Shares for which it would not otherwise be exercisable.  In such event the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen
(15) days from the date of such notice, and upon the expiration of such period
the Option shall terminate.

 

For the purposes of this Section 10(c), an Option
shall be considered assumed if, following the merger or sale of assets, the
Option confers the right to purchase or receive, for each Share of Optioned
Stock subject to the Option immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares).  If such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be received
upon the exercise of the Option, for each Share of Optioned Stock subject to
the Option, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

 

11.                                 Amendment and Termination of the Plan.

 

(a)  Amendment
and Termination.  The Board may at
any time amend, alter, suspend, or discontinue the Plan, but no amendment,
alteration, suspension, or discontinuation shall be made which would impair the
rights of any Optionee under any grant theretofore made, without his or her
consent.  In addition, to the extent
necessary and desirable to comply with any applicable law, regulation or stock
exchange rule, the Company shall obtain stockholder approval of any Plan
amendment in such a manner and to such a degree as required.

 

(b)  Effect of Amendment or Termination.  Unless the Board expressly provides
otherwise, any amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated. 
The Board may expressly provide with respect to a particular amendment
or series of amendments of the Plan, that such amendment(s) shall be deemed to
amend Options granted on or after the date of the amendment(s) and Options
granted prior to the date of the amendment(s), provided however that no
amendment shall be made which would impair the rights of any Optionee under any
grant made prior to the date of the amendment without his or her consent.  Amendments to the Plan effective June     ,
2005 shall not affect Options already granted under the Plan prior to such date
and such Options shall remain in full force and effect as if this Plan had not
been amended.  Any termination

 

8

 

of the Plan shall not
affect Options already granted and such Options shall remain in full force and
effect as if this Plan had not been terminated.

 

12.                                 Time of Granting Options.  The date
of grant of an Option shall, for all purposes, be the date determined in
accordance with Section 4 hereof.

 

13.                                 Conditions Upon Issuance of Shares.  Shares
shall not be issued pursuant to the exercise of an Option unless the exercise
of such Option and the issuance and delivery of such Shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, state securities laws, and the requirements
of any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

 

As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.

 

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

 

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

 

15.                                 Option Agreement.  Options shall be evidenced by
written option agreements in such form as the Board shall approve.

 

16.                                 Stockholder Approval.  The Plan
shall be subject to approval by the stockholders of the Company within twelve
(12) months after the date the Plan is adopted. 
Such stockholder approval shall be obtained in the degree and manner
required under applicable state and federal law and any stock exchange rules.

 

9

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