Document:

Exhibit 4.5

 

BALLY TECHNOLOGIES, INC.

AMENDED AND RESTATED

2001 LONG TERM INCENTIVE PLAN

 

The
2001 Long Term Incentive Plan was originally established by the Board of
Directors (the “Board”) of Bally Technologies, Inc. (the “Company”) and
was approved by shareholders of the Company on December 11, 2001.  The Plan will continue in effect until
terminated by the Board in accordance with the terms of the Plan.

 

1.                                      Purpose of the Plan

 

The
Bally Technologies, Inc. Amended and Restated 2001 Long-Term Incentive Plan
(the “Plan”) is intended to encourage stock ownership by directors, employees
and designated paid consultants of the Company and its subsidiaries
(collectively, the “Subsidiaries” and individually, a “Subsidiary”), in order
to increase their proprietary interest in the success of the Company and to
encourage them to remain in the employ of the Company or a Subsidiary.

 

Options
granted under the Plan may be either Incentive Stock Options or Nonstatutory
Stock Options; the term “option” when used hereinafter refers to either
Incentive Stock Options or Nonstatutory Stock Options, or both.  Restricted stock and restricted stock units
awarded under the Plan are subject to restrictions as determined in each
specific case by the Board or by a duly appointed committee of the Board (the “Committee”).  Stock Appreciation Rights may be granted
under the Plan.  The term “Award” when
used hereinafter collectively refers to options, Stock Appreciation Rights,
restricted stock and restricted stock units awarded under the Plan.

 

2.                                      Administration

 

Administration of the Plan.  The Plan is administered by the Board or, if
the Board so determines, by the Committee, provided that except as otherwise
provided below, in the case of Awards to directors or officers subject to Section 16
of the Securities Exchange Act of 1934 (the “Exchange Act”), the Committee has
exclusive responsibility for and authority to administer the Plan unless the
Board expressly determines otherwise. 
The membership of the Committee consists of not less than two members of
the Board and will be constituted, if possible, to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any successor rule (“Rule 16b-3”)
and with the requirements of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”). 
Duly authorized actions of the Committee constitute actions of the Board
for the purposes of the Plan and its administration.  The Board or the Committee, as applicable,
has authority in its sole discretion:

 

·                  to determine
the time or times at which, and the directors, employees and consultants to
whom options, Stock Appreciation Rights, restricted stock and restricted stock
units are awarded under the Plan;

 

·                  to determine
the base price of any Stock Appreciation Right, the Incentive Stock Option
Price or the Nonstatutory Stock Option Price (both as defined below) of, and
the number of shares of Stock (as defined below) to be covered by, Stock
Appreciation Rights and options granted under the Plan;

 

 

 

·                  to determine the
number of shares of Stock to be covered by awards of restricted stock and
restricted stock units under the Plan;

 

·                  to determine
the time or times at which each option and/or Stock Appreciation Right granted
under the Plan may be exercised, including whether the option or Stock
Appreciation Right may be exercised in whole or in installments;

 

·                  to establish
the terms of the restrictions applicable to any restricted stock and/or
restricted stock units awarded, and to determine the time or times at which restrictions
lapse;

 

·                  to interpret
the Plan and to prescribe, amend and rescind rules and regulations
relating to it; and

 

·                  to make all
other determinations which the Board or Committee, as applicable, deem
necessary or advisable for the administration of the Plan.

 

Reserved Authority of the Board.  The Committee has all the powers and duties
set forth above, as well as any additional powers and duties that the Board may
delegate to it; provided, however, that the Board expressly retains the right (i) to
determine whether the shares of Stock reserved for issuance upon the exercise
of options or restricted stock units or as restricted stock awarded under the
Plan shall be issued shares or unissued shares, (ii) to appoint the
members of the Committee, and (iii) to terminate or amend the Plan.  The Board may from time to time appoint
members of the Committee in substitution for or in addition to members
previously appointed, may fill vacancies in the Committee, and may discharge
the Committee.

 

3.                                      Common Stock Subject to
the Plan

 

Limitation on Number of Shares.  The number of shares which may at any time be
made subject to options or Stock Appreciation Rights, or which may be issued
upon the exercise of options or Stock Appreciation Rights granted under the Plan
or made subject to grants of restricted stock or restricted stock units, is
limited to an aggregate of 12,050,000 shares of the common stock, $.10 par
value, of the Company (the “Stock”).  The
shares reserved for issuance pursuant to the Plan may consist either of
authorized but previously unissued shares of Stock, or of issued shares of
Stock which have been reacquired by the Company, as determined from time to
time by the Board.  If any option or
Stock Appreciation Right granted under the Plan expires, terminates or is
canceled for any reason without having been exercised in full, or any
restricted stock or restricted stock unit Award is forfeited for any reason,
the shares of Stock allocable to the unexercised portion of the option or Stock
Appreciation Right or to the forfeited portion of the restricted stock or
restricted stock unit Award may again be made subject to an option or Award
under the Plan.

 

Adjustments of Number of Shares.  In the event of a change in the common stock
of the Company that is limited to a change in the designation thereof to “Capital
Stock” or other similar designation, or to a change in the par value thereof,
or from par value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change are deemed to be
the common stock for purposes of the Plan.

 

 

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4.                                      Eligibility

 

Awards
may be granted under the Plan to paid consultants, directors and employees of
the Company or a Subsidiary designated by the Board or the Committee, provided
that Incentive Stock Options may be awarded only to regular full-time employees
of the Company or a Subsidiary (including employees who serve as officers or
directors).  As used in the Plan, “paid
consultant” means a natural person who is an independent contractor retained to
perform continuing and substantial services for the Company or any subsidiary,
and designated as a paid consultant by the Board or the Committee, except that
no individual shall be designated a “paid consultant” for purposes of this Plan
if such individual is engaged in promoting or maintaining a market in the
securities of the Company, or in any other capacity that would result in the Form S-8
registration statement being ineffective as to any Awards made to such
individual.  Any person granted an Award
under the Plan (a “Grantee”) remains eligible to receive one or more additional
grants thereafter, notwithstanding that options or Stock Appreciation Rights
previously granted to such person remain unexercised in whole or in part, or
that the applicable restrictions on any restricted stock or restricted stock
units issued to such person have not lapsed.

 

5.                                      Stock Options

 

In General.  The Plan authorizes the Board or the Committee
to grant options that qualify as incentive stock options pursuant to Section 422
of the Code (“Incentive Stock Options”), or options that do not so qualify (“Nonstatutory
Stock Options”).  Each option granted
under the Plan is evidenced by a written and executed option agreement which
will specify whether the option granted therein is an Incentive Stock Option or
a Nonstatutory Stock Option.

 

Incentive Stock Options.  Each stock option agreement covering an
Incentive Stock Option granted under the Plan and any amendment thereof, other
than an amendment to convert an Incentive Stock Option into a Nonstatutory
Stock Option, will conform to the following provisions and may contain other
terms and provisions consistent with the requirements of the Plan as the Board
or the Committee deem appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to an Incentive Stock Option (the “Incentive Stock Option Price”)
will be a stated price which is not less than the fair market value of such
share of Stock, determined in accordance with Section 10 below, or the par
value of such share if greater, as of the date such Incentive Stock Option is
granted; provided, however, that if an employee, at the time an Incentive Stock
Option is granted to him or her, owns stock representing more than 10% of the
total combined voting power of all classes of stock of the Company or of the
parent corporation (as defined in Section 424(e) of the Code), if
any, of the Company or of any of the Subsidiaries (or, under Section 424(d) of
the Code, is deemed to own stock representing more than 10% of the total
combined voting power of all such classes of stock, by reason of the ownership
of such classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor, or lineal descendent of such employee, or by or for
any corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), then the Incentive Stock Option Price of
each share of Stock subject to such Incentive Stock Option will be at least
110% of the fair market value of such share of Stock, as determined in
accordance with Section 10 below.

 

 

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Term.  Incentive Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Incentive Stock Option, but in no event
is an Incentive Stock Option exercisable after the expiration of ten years from
the date of grant; provided, however, that an Incentive Stock Option granted to
any employee as to whom the Incentive Stock Option Price of each share of Stock
subject thereto is required to be 110% of the fair market value of the share of
Stock pursuant to the preceding paragraph will not be exercisable after the
expiration of five years from the date of grant.  Each Incentive Stock Option granted under the
Plan is also subject to earlier termination as provided in the Plan.

 

Exercise.  Generally under the Plan, Incentive Stock
Options may be exercised in whole or in installments, to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each option.

 

Incentive
Stock Options granted under the Plan are exercisable only by delivery to the
Company of written notice of exercise, which states the number of shares with
respect to which such Incentive Stock Option is exercised, the date of grant of
the Incentive Stock Option, the aggregate purchase price for the shares with
respect to which the Incentive Stock Option is exercised and the effective date
of such exercise, which date may not be earlier than the date the notice is
received by the Company nor later than the date upon which the Incentive Stock
Option expires.  The written notice of
exercise must be sent together with the full Incentive Stock Option Price of
the shares purchased, which may be paid in cash or in shares of any class of
issued and outstanding stock of the Company held for more than six months by the
option holder, whether preferred or common, or partly in cash and partly in
such shares of stock.  If any portion of
the Incentive Stock Option Price is paid in shares of stock of the Company, the
shares will be valued at their fair market value, as determined in accordance
with Section 10 below, as of the effective date of exercise of the
Incentive Stock Option.  The delivery of
shares of stock upon exercise of an Incentive Stock Option shall be subject to
such restrictions as the Board or the Committee may determine to be
appropriate, including, without limitation, a requirement that such shares be
held by an agent designated by the Company until sold or otherwise disposed of
by the option holder, to assure that the Company is advised of any disposition of
such shares by the option holder within two years of the date of grant of the
Incentive Stock Option or within one year after the date of exercise of the
Incentive Stock Option.

 

In
general, an Incentive Stock Option granted under the Plan remains outstanding
and is exercisable only so long as the person to whom the Incentive Stock
Option was granted remains an officer or employee of the Company, the parent
corporation, if any, of the Company, or any of the Subsidiaries.  All Incentive Stock Options granted under the
Plan are nontransferable, except by will or the laws of descent and
distribution, and are exercisable during the lifetime of the person to whom
granted only by such person (or his duly appointed, qualified, and acting
personal representative).

 

No
Incentive Stock Option may be exercised as to fewer than 100 shares of Stock at
any one time without the consent of the Board or the Committee, unless the
number of shares to be purchased upon the exercise is the total number of
shares at the time available for purchase under the Incentive Stock Option.

 

 

 

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The
Board or the Committee may also permit Grantees (either on a selective or group
basis) to simultaneously exercise options and sell the shares of the Stock
thereby acquired, pursuant to a “cashless exercise” arrangement or program,
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any option may be
used by the Company for general corporate purposes.  Any portion of an option that is exercised
may not be exercised again.

 

Nonstatutory Stock Options.  Each stock option agreement covering a
Nonstatutory Stock Option granted under the Plan and any amendment thereof will
conform to the following provisions and may contain other terms and provisions
consistent with the requirements of the Plan as the Board or the Committee deem
appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to a Nonstatutory Stock Option (the “Nonstatutory Stock Option
Price”) will be a fixed price determined by the Board or the Committee at the
time of grant, which will not be less than the greater of the par value of such
share, or one hundred percent (100%) of the fair market value of such share,
determined in accordance with Section 10 below, on the date of the grant
of the Nonstatutory Stock Option.

 

Term.  Nonstatutory Stock Options granted under the
Plan are exercisable for a period of ten years unless otherwise determined by
the Board or the Committee at the time of grant.  Each Nonstatutory Stock Option granted under
the Plan will also be subject to earlier termination as provided in the Plan.

 

Exercise.  Generally, under the Plan, Nonstatutory Stock
Options may be exercised in whole or in installments to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each option.

 

Nonstatutory
Stock Options granted under the Plan are exercisable only by delivery to the
Company of written notice of exercise, which states the number of shares with
respect to which such Nonstatutory Stock Option is exercised, the date of grant
of the Nonstatutory Stock Option, the aggregate purchase price for the shares
with respect to which the Nonstatutory Stock Option is exercised and the
effective date of such exercise, which date may not be earlier than the date
the notice is received by the Company nor later than the date upon which the
Nonstatutory Stock Option expires.  The
written notice of exercise must be sent together with the full Nonstatutory
Stock Option Price of the shares purchased, which may be paid in cash or in
shares of any class of issued and outstanding stock of the Company held for
more than six months by the option holder, whether preferred or common, or
partly in cash and partly in such shares of stock.  If any portion of the Nonstatutory Stock
Option Price is paid in shares of stock of the Company, the shares will be
valued at their fair market value, as determined in accordance with Section 10
below, as of the effective date of exercise of the Nonstatutory Stock Option.

 

In
general, a Nonstatutory Stock Option granted under the Plan remains outstanding
and is exercisable only so long as the person to whom the Nonstatutory Stock
Option was granted remains either a director, employee or paid consultant of
the Company, the parent corporation, if any, of the Company, or any of the
Subsidiaries.  A person is deemed to be a
paid consultant 

 

 

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only so long as he or she continues to perform and be compensated for
substantial services for the Company, the parent corporation, if any, of the
Company, or a Subsidiary, as to which the determination of the Board or the
Committee, as applicable, will be binding and conclusive.  Unless the Board or Committee determines
otherwise, all Nonstatutory Stock Options granted under the Plan will be
nontransferable, except by will or the laws of descent and distribution.

 

No
Nonstatutory Stock Option may be exercised as to fewer than 100 shares at any
one time without the consent of the Board or the Committee, unless the number
of shares to be purchased upon the exercise is the total number of shares at
the time available for purchase under the Nonstatutory Stock Option.

 

The
Board or the Committee may also permit Grantees (either on a selective or group
basis) to simultaneously exercise options and sell the shares of the Stock
thereby acquired, pursuant to a “cashless exercise” arrangement or program,
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any option may be
used by the Company for general corporate purposes.  Any portion of an option that is exercised
may not be exercised again.

 

The
exercise or Option Price of any outstanding Incentive Stock Option or
Nonstatutory Stock Option may not be adjusted or amended by the Board or
Committee (other than in accordance with Section 12 below), whether by
amendment, cancellation, replacement grants, or any other means.  As used herein, “replacement grants” means
any grant of Incentive Stock Options, Nonstatutory Stock Options or Stock
Appreciation Rights reasonably related to any prior or potential cancellation
of any outstanding options or stock appreciation rights for new options or new
stock appreciation rights in tandem with previously granted options or stock
appreciation rights that will operate to cancel the previously granted options
or stock appreciation rights upon exercise of the new options or new stock
appreciation rights.

 

6.                                      Restrictions Applicable to
Restricted Stock

 

The
Board or the Committee may place any restrictions it deems appropriate on any
shares of restricted stock awarded under the Plan to an employee, director or
paid consultant; provided, however, that shares of restricted stock awarded
under the Plan are subject to certain restrictions including the following:

 

Vesting.  In general, shares of Stock awarded to
directors, employees or paid consultants will vest (a) in full with
respect to all Stock underlying the Award of restricted stock at the expiration
of a period of not less than three years from the date of grant of the Award,
or (b) proportionately in equal installments of the Stock underlying the
Award of restricted stock over a period of not less than three years from the
date of grant of the Award, as the Board or the Committee determines, and, in
each such case, based upon continued service during any such period by the
recipient as a director, employee or paid consultant of the Company or any of its
Subsidiaries.  Any shares of Stock
remaining subject to forfeiture in accordance with the related vesting
schedule are hereinafter referred to as “Unvested Shares.” Subject to
Sections 11 and 12 below, neither the Board nor the Committee have the
authority to otherwise accelerate the vesting of an Award of restricted stock.

 

 

 

6

 

Delivery to Escrow.  Unless the Board or the Committee determines
otherwise, upon issuance of a certificate evidencing such shares the recipient
will be required to deliver the certificate, endorsed in blank or with a duly
executed stock power attached, to the Secretary of the Company, or such other
person or entity as the Board or the Committee may designate, to be held until
any vesting restrictions applicable thereto have lapsed or any Unvested Shares
have been forfeited.

 

Legend.  Unless the Board or the Committee determines
otherwise, each certificate evidencing Unvested Shares issued under the Plan
will bear a legend to the effect that such shares are subject to potential
forfeiture and may not be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of except in accordance with the terms of an agreement
between the issuer and the registered owner.

 

7.                                      Restricted Stock Units

 

The
Committee may at any time and from time to time grant restricted stock units
under the Plan in such amounts as it determines.  Each restricted stock unit shall entitle the
Grantee to receive from the Company at the end of the vesting period applicable
to such unit one share of Stock, unless the Grantee elects in a timely fashion
prior to the end of the vesting period to defer the receipt of the shares of
Stock subject to the Award of restricted stock units.  Each grant of restricted stock units shall be
evidenced by an Award Agreement which shall specify the applicable restrictions
on such units including the following:

 

Vesting.  In general, restricted stock units awarded to
directors, employees or paid consultants will vest (a) in full with
respect to all Stock underlying the Award of restricted stock units at the
expiration of a period of not less than three years from the date of grant of
the Award, or (b) proportionately in equal installments of the Stock
underlying the Award of restricted stock units over a period of not less than
three years from the date of grant of the Award, as the Board or the Committee
determines, and, in each such case, based upon continued service during any
such period by the recipient as a director, employee or paid consultant of the
Company or any of its Subsidiaries.  Any
shares of Stock remaining subject to forfeiture in accordance with the related
vesting schedule are hereinafter referred to as “Unvested Shares.”  Subject to Sections 11 and 12 below, neither
the Board nor the Committee have the authority to otherwise accelerate the
vesting of an Award of restricted stock units.

 

8.                                      Stock Appreciation Rights

 

The
grant of Stock Appreciation Rights under the Plan is subject to the following
terms and conditions and any additional terms and conditions, not inconsistent
with the express terms and provisions of the Plan, as the Board or the
Committee sets forth in the relevant Award agreement:

 

Stock Appreciation Rights.  A Stock Appreciation Right is an Award
granted with respect to a specified number of shares of Stock entitling the
Grantee to receive an amount equal to the excess of (a) the fair market
value of a share of Stock on the date of exercise over (b) the fair market
value of a share of Stock on the date of grant of the Stock Appreciation Right
(the “Base 

 

 

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Price”) multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right has been exercised.  Fair market value is determined in accordance
with Section 10 below.

 

Grant.  A Stock Appreciation Right may be granted in
addition to any other Award under the Plan or in tandem with or independent of
any Nonstatutory Stock Option or Incentive Stock Option.

 

Date of Exercisability.  Unless otherwise provided in the Grantee’s
Award agreement in respect of any Stock Appreciation Right, a Stock
Appreciation Right may be exercised by the Grantee, in accordance with and
subject to all of the procedures established by the Board or the Committee, in
whole or in part at any time and from time to time during its specified
term.  Notwithstanding the preceding
sentence, in no event is a Stock Appreciation Right exercisable prior to the
exercisability of any Non-Qualified Stock Option or Incentive Stock Option with
which it is granted in tandem.  The Board
or the Committee may also provide, as set forth in the relevant Award
agreement, that some Stock Appreciation Rights will be automatically exercised
on one or more dates specified by the Board or the Committee.

 

Form of Payment.  Upon exercise of a Stock Appreciation Right,
payment may be made in cash, in restricted stock or in shares of unrestricted
Stock, or in any combination thereof, as the Board or the Committee, in its
sole discretion, determines and provides in the relevant Award agreement.

 

Tandem Grant.  The right of the Grantee to exercise a tandem
Stock Appreciation Right terminates to the extent the Grantee exercises the
Non-Qualified Stock Option or the Incentive Stock Option to which the Stock
Appreciation Right is related.

 

The
Base Price of any outstanding Stock Appreciation Right may not be adjusted or
amended by the Board or the Committee (other than in accordance with Section 12
below), whether by amendment, cancellation, replacement grants, or any other
means.

 

9.                                      Rights of Grantees

 

Options.  No holder of an option or Stock Appreciation
Right will be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to such option or Stock
Appreciation Right unless and until his or her option or Stock Appreciation
Right has been exercised pursuant to the terms thereof, the Company has issued
and delivered to the holder of the option or Stock Appreciation Right the
shares of Stock as to which the holder has exercised his or her option or Stock
Appreciation Right, and the holder’s name has been entered as a stockholder of
record on the books of the Company. 
Thereupon, such person shall have full voting and other ownership rights
with respect to such shares of Stock.

 

Restricted Stock.  Each recipient of a restricted stock award is
deemed to be the registered owner of any Unvested Shares subject to such award,
notwithstanding that such shares may be subject to restrictions and possible
forfeiture under the terms of the agreement pursuant to which they were
received.  Unless and until all or a
portion of the Unvested Shares are forfeited in accordance with the terms of
such agreement, the recipient thereof will have full voting rights with respect
to such shares as well as the right to receive any and all distributions
thereon.

 

 

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Restricted Stock Units.  No holder of a restricted stock unit will be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to such restricted stock unit unless
and until the Company has issued and delivered to the holder of the restricted
stock unit the shares of Stock as to which the Award of restricted stock units
has vested, and the holder’s name has been entered as a stockholder of record
on the books of the Company.  Thereupon,
such person shall have full voting and other ownership rights with respect to
such shares of Stock.

 

10.                               Determination of Fair
Market Value

 

For
the purposes of the Plan, the fair market value of a share of stock of the
Company is determined as follows:

 

(a)                                  if on the date
as of which a determination is made the class of stock being valued is admitted
to trading on a national securities exchange or exchanges, including without
limitation the National Association of Securities Dealers Automated Quotation
System (“Nasdaq”), for which actual sale prices are regularly reported, or
actual sales prices are otherwise regularly published for such stock, the fair
market value of a share of the stock is deemed to be equal to the closing sale
price reported for the stock on the date as of which the determination is made
(or the next preceding trading date if the date of determination is not a
trading date); or

 

(b)                                 if on the date
as of which a determination is made no such closing sales prices are reported,
but quotations for the class of stock being valued are regularly listed on the
Nasdaq or another comparable system, the fair market value of a share of the
stock is deemed to be equal to the mean of the average of the closing bid and
asked prices for the stock quoted on such system on the date as of which the
determination is made (or the next preceding trading date if the date of determination
is not a trading date); or

 

(c)                                  if no such
quotations or actual sales prices are available, the fair market value of a
share of the stock will be deemed to be the average of the closing bid and
asked prices furnished by a professional securities dealer making a market in
such shares, as selected by the Board, for the trading date as of which the
determination is made (or the next preceding trading date if the date of
determination is not a trading date).

 

Notwithstanding
(a) - (c) above, the Board or the Committee may determine the fair
market value of a share of stock of the Company on the basis of such factors as
it deems appropriate if it determines in good faith that the approach specified
above does not properly reflect the fair market value of such stock.

 

11.                               Retirement, Termination of
Employment or Death of Holders of Options, Stock Appreciation Rights and
Restricted Stock

 

Retirement or Disability.  If a Grantee retires from employment with the
Company or any of its Subsidiaries as a result of normal retirement (that is,
termination of employment by the Grantee after he or she attains age sixty-five
(65)), or terminates employment or service with the

 

 

9

 

Company after becoming “permanently disabled” (as defined in the Gaming
and Technology, Inc.  Profit Sharing
401(k) Plan as in effect on the date of adoption of the Plan by the
Board), any restrictions then applicable to his or her Award will lapse and it will
thereafter be exercisable (in the case of options and Stock Appreciation
Rights) or vested and transferable (in the case of restricted stock and
restricted stock units) in whole or in part, by the person to whom granted (or
his or her duly appointed, qualified, and acting personal representative) in
the manner set forth in Sections 5, 6, 7 and 8 above, at any time within
the remaining term of the Award, unless otherwise determined by the Board or
the Committee at the time of grant.

 

Other Termination of Service or Employment.  Except as determined by the Board or the
Committee at the time of grant, or as otherwise provided herein or in a Grantee’s
employment agreement, (a) if a person to whom restricted stock has been
awarded under the Plan ceases to be either a director, employee or paid
consultant of the Company or a Subsidiary, any Unvested Shares of restricted
stock held by the person are forfeited as of the last date he or she was either
a director, employee or paid consultant of the Company or a Subsidiary, (b) if
a person to whom restricted stock units have been awarded under the Plan ceases
to be either a director, employee or paid consultant of the Company or a
Subsidiary, the unvested portion, if any, of such restricted stock units held
by the person are forfeited as of the last date he or she was either a
director, employee or paid consultant of the Company or a Subsidiary, and (c) if
a person to whom an option or Stock Appreciation Right has been granted under
the Plan ceases to be either a director, employee or paid consultant of the
Company or a Subsidiary, such option or Stock Appreciation Right will continue
to be exercisable or transferable to the same extent that it was exercisable on
the last day on which he or she was either a director, employee or paid
consultant for a period of 60 days thereafter, whereupon such option or Stock
Appreciation Right will terminate and not be exercisable thereafter; provided,
however, that in the event of termination of employment, termination of service
as a paid consultant, or removal from office as a director for Cause (as
defined below), any such option or Stock Appreciation Right will terminate ten
days after such termination of employment, service or removal from office
rather than 60 days thereafter.  Notwithstanding the immediately preceding
sentence, the term during which an option or Stock Appreciation Right may be
exercised shall not in any event extend beyond the remaining term of such Award
as specified in connection with the grant thereof.  No Award made under the Plan will be affected
by any change of duties or position of the person to whom the Award was made or
by any temporary leave of absence granted to the person by the Company or any
of its Subsidiaries.  For purposes of the
Plan, “Cause” means (i) the Grantee being convicted of a felony, (ii) the
Grantee willfully committing an act of embezzlement or malfeasance which is
intended to materially enrich himself or herself at the expense of the Company
or any of its Subsidiaries or is otherwise intended to materially harm the
Company, or (iii) the Grantee being rejected for an applicable license or
approval by a gaming regulatory authority having jurisdiction over the Company
as a result of an explicit finding of lack of suitability solely as a result of
the Grantee’s commission of a crime or an act of embezzlement or malfeasance.

 

Death.  Unless otherwise determined by the Board or
the Committee at the time of grant, (a) if a person to whom an option or
Stock Appreciation Right has been granted under the Plan dies prior to the
expiration of the term of the option or Stock Appreciation Right, the option or
Stock Appreciation Right is exercisable by the estate of the Grantee, or by a
person who acquired the right to exercise such option or Stock Appreciation
Right by bequest or inheritance from the 

 

 

10

 

Grantee, at any time within two years after the death of the person and
prior to the date upon which such option or Stock Appreciation Right expires as
specified in connection with the grant thereof, to the extent and in the manner
exercisable by the Grantee at the date of his or her death; (b) if a
person to whom restricted stock has been awarded under the Plan dies prior to
the lapse of all restrictions applicable to such restricted stock, any Unvested
Shares held by such person on the date of his or her death will be forfeited;
and (c) if a person to whom restricted stock units have been awarded under
the Plan dies prior to the lapse of all restrictions applicable to such
restricted stock units, the unvested portion of such restricted stock units
held by the person on the date of his or her death will be forfeited.

 

Termination with Board Approval.  If a Grantee ceases to be either a director,
employee or paid consultant of the Company or a Subsidiary for any reason other
than removal for Cause, and the Board or the Committee expressly determines
that such termination of service or employment is in the best interests of the
Company, then an option or Stock Appreciation Right awarded to the Grantee
under the Plan will be exercisable by the Grantee or by the estate of the
Grantee, by a person who acquired the right to exercise such option or Stock
Appreciation Right by bequest or inheritance from the Grantee or otherwise, for
an additional period following termination of service or employment as
determined by the Board or the Committee but in no event later than the date
upon which such option or Stock Appreciation Right would have expired absent such
termination of service or employment. 
Any such extended option or Stock Appreciation Right will be exercisable
only to the extent and in the manner exercisable by the Grantee at the time of
such termination of service or employment.

 

Incentive Stock Options.  Notwithstanding anything herein to the
contrary or the provisions of any employment agreement, no Incentive Stock
Option shall be exercisable after the date that is (a) in the case of the
Grantee’s termination of employment for any reason other than death or
disability, three months following such termination of employment, or (b) in
the case of the Grantee’s termination of employment due to death or Total and
Permanent Disability (as defined in Code section 22(e)(3)), twelve months
following such termination of employment.

 

12.                               Adjustments

 

Changes in Capitalization.  In the event of any change in the number of
shares of the outstanding Stock of the Company by reason of a stock split,
stock dividend, combination or reclassification of shares, recapitalization, or
similar event, the Board or the Committee will adjust proportionally (a) the
number and kind of shares subject to the Plan, (b) the number and kind of
shares then subject to unexercised options and Stock Appreciation Rights and
outstanding Awards of restricted stock and restricted stock units and (c) the
per share Incentive Stock Option Price, Nonstatutory Stock Option Price or Base
Price (as the case may be) of unexercised options and Stock Appreciation
Rights.  Any such adjustment will be made
without a change in the aggregate purchase price or aggregate Base Price of the
shares of the Stock subject to the unexercised portion of any option or Stock
Appreciation Right.

 

Merger Event.  In the event of any merger, spin-off,
split-off or other similar consolidation, reorganization or change affecting
any class of stock of the Company (a “Merger Event”) subject to Awards made
under the Plan, or any distribution (other than normal cash dividends) to
holders of the stock, fair and equitable adjustment will be made in good faith
by the 

 

 

11

 

Board or the Committee, including (without limitation) adjustments to
avoid fractional shares, in respect of (a) all unexercised options or
Stock Appreciation Rights and (b) all then outstanding Awards of
restricted stock or restricted stock units to give proper effect to such event
and preserve the value, rights and benefits of such options, Stock Appreciation
Rights, restricted stock or restricted stock units; provided, however, that the
Board or the Committee may, in the case of any Merger Event pursuant to which
the Company is not the surviving corporation and pursuant to which the former
holders of the Stock do not hold, directly or indirectly, more than a majority
of the voting securities of the resulting entity immediately after the Merger
Event or in connection with any acquisition by any person of more than fifty
percent (50%) of the outstanding shares of the Stock, provide that each option
or Stock Appreciation Right holder will receive a cash payment (in exchange for
and in cancellation of such option or Stock Appreciation Right) equal to the
difference (if greater than zero) between the value of the per share
consideration received by the holders of the Stock in the Merger Event or the
acquisition and the purchase price or Base Price of such option or Stock
Appreciation Right, multiplied by the number of shares of the Stock underlying
such option or Stock Appreciation Right (and if the difference is equal to or
less than zero, the Committee may provide that each such holder will receive no
payment, nor any other compensation, in exchange for and in cancellation of any
such option or Stock Appreciation Right).  In addition, in the event that (i) there
occurs any Merger Event pursuant to which all of the outstanding Stock held by
the shareholders of the Company is exchanged for any lawful consideration and (ii) within
twelve months following the date of such Merger Event, a Grantee’s employment
or service with the Company is terminated either by the Company without Cause
or by the Grantee for Good Reason (as defined below), then, effective
immediately prior to such termination of employment or service, all vested and
unexercisable options or Stock Appreciation Rights held by the Grantee on the
date on which his or her employment or service terminated will become 100%
vested and exercisable, and all restrictions then applicable to Awards of
restricted stock and restricted stock units held by the Grantee on the date on
which his or her employment or service terminated will lapse and such Awards
will thereafter be fully vested and transferable.  For purposes of the Plan, ‘Good Reason’
means, unless otherwise provided in a Grantee’s employment agreement, (x) a
material reduction in the Grantee’s base salary or (y) a material
reduction in the Grantee’s duties or responsibilities.

 

13.                               Maximum Awards

 

The
following maximum annual and other amounts are subject to adjustment under Section 12
above and are subject to the Plan maximum under Section 3 above.  Each individual Grantee may not receive in
any fiscal year Awards of options and/or Stock Appreciation Rights exceeding
600,000 underlying shares of Stock.  No
more than 1,400,000 shares of Stock may be granted as Awards of restricted
stock or restricted stock units. 
Notwithstanding the foregoing, to the extent that the aggregate fair
market value of stock (determined at the time of grant of the option) for which
Incentive Stock Options first become exercisable by a Grantee during a calendar
year (under all option plans of the Company) exceeds $100,000, such Options
shall be treated as Options that are not Incentive Stock Options.

 

14.                               Manner of Grant

 

Nothing
contained in the Plan or in any resolution adopted by the Board or any
committee thereof or by the stockholders of the Company with respect to the
Plan, except as 

 

 

12

 

provided in the Plan, will constitute the granting of an Award under
the Plan.  The granting of an Award under
the Plan is deemed to occur only upon the date on which the Board or the
Committee approves the grant of the Award. 
Each Award granted under the Plan shall be evidenced by a written
agreement, in the form determined by the Board or the Committee, signed by a
representative of the Board or the Committee and the recipient thereof.

 

15.                               Compliance with Laws and
Regulations

 

The
obligation of the Company to sell and deliver any shares of Stock under the
Plan is subject to all applicable laws, rules and regulations, and the
obtaining of all approvals by governmental agencies deemed necessary or
appropriate by the Board or the Committee. 
In general, the Board or the Committee may make such changes in the Plan
and include such terms in any Award agreement as may be necessary or
appropriate, in the opinion of counsel to the Company, to comply with the rules and
regulations of any governmental authority, or to obtain for employees granted
Incentive Stock Options the tax benefits under the applicable provisions of the
Code and the regulations thereunder.

 

16.                               Tax Withholding

 

The
Company or Subsidiary for which services are performed by a director, employee
or paid consultant granted an Award under the Plan has the right to deduct or
otherwise effect a withholding of any tax (including, without limitation, any
FICA (employment) tax required to be withheld under Chapter 21 of the
Code, any income tax required to be withheld under Chapter 24 of the Code,
and any similar tax imposed under state, local, or foreign law) required by
federal, state, local or foreign laws to be withheld or otherwise deducted and
paid with respect to the grant, vesting or exercise of any Award or the sale of
stock acquired upon the exercise of an Incentive Stock Option; or, in lieu of
such withholding, to require that the Grantee or person holding such Award pay
to the Company or such Subsidiary in cash (or, at the sole discretion of the
Board or the Committee, in the form of shares of Stock) the amount of any taxes
required to be withheld or otherwise deducted and paid by the Company or its
Subsidiary in connection with the grant, vesting or exercise of any Award or
the sale of shares acquired upon the exercise of an Incentive Stock
Option.  The Company may condition any
delivery of stock certificates or other evidence of ownership of shares of
Stock on payment of the tax amounts referred to in this Section 16.

 

17.                               Nonexclusivity of the Plan

 

Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company for approval has any impact on existing qualified
or nonqualified retirement, bonus or option plans of the Company or creates any
limitations on the power of the Board to adopt any other incentive arrangements
that it may deem desirable, including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock or restricted stock
units otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.

 

 

13

 

18.                               Amendment

 

The
Board at any time, and from time to time, may amend the Plan, subject to any
required regulatory approval and subject to the limitation that, except as
provided above in Section 12, no amendment is effective unless approved
within 12 months after the date of the adoption of such amendment by the
affirmative vote of the holders of a majority of the shares of the Company’s
Voting Stock present in person or represented by proxy at a duly held meeting at
which a quorum is present (or by such greater vote as may be required by
applicable law, regulation or provision of the certificate of incorporation or
bylaws of the Company) if the amendment would, but for such approval, prevent
the issuance of Incentive Stock Options under the Plan or cause the Plan to no
longer comply with the requirements of Section 162(m) of the Code.

 

Except
as provided in Section 12 above, rights and obligations under any Awards
granted before amendment of the Plan may not be altered or impaired by
amendment of the Plan in any manner having a significant adverse effect on a
Grantee, except with the consent of the Grantee thereof.

 

19.                               Termination or Suspension

 

The
Board at any time may suspend or terminate the Plan.  The Plan, unless sooner terminated, will
terminate on the 10th anniversary of its adoption by the Board or its approval
by the stockholders of the Company, whichever is earlier, but such termination
will not affect any Award theretofore granted. 
No Award may be granted under the Plan while the Plan is suspended or
after it is terminated.  In general, no
rights or obligations under any Award granted while the Plan is in effect will
be altered or impaired by suspension or termination of the Plan, except with
the consent of the person to whom the Award was granted.  Any Award granted under the Plan may be
terminated by agreement between the holder thereof and the Company and, in lieu
of the terminated Award, a new Award may be granted.

 

20.                               Miscellaneous

 

Nothing
contained in the Plan (or in any written Award agreement) obligates the Company
or any Subsidiary to continue for any period to elect any individual as a
director or to employ an employee or consultant to whom an Award has been
granted, or interfere with the right of the Company or any Subsidiary to vary
the terms of the person’s service or employment or reduce the person’s
compensation.

 

21.                               Exculpation and
Indemnification

 

To
the fullest extent permitted by applicable law and regulation, the Company will
indemnify and hold harmless the members of the Board and the members of the
Committee from and against any and all liabilities, costs, and expenses
incurred by them as a result of any act, or omission to act, in connection with
the performance of their duties, responsibilities, and obligations under the
Plan, other than such liabilities, costs and expenses as may result from the
gross negligence, bad faith, willful misconduct, or criminal acts of such
persons.

 

 

14

 

22.                               Governing Law

 

The
Plan and all actions taken thereunder are governed by and construed in
accordance with the laws of the State of Nevada, without reference to the
principles of conflict of laws thereof.

 

23.                               Unfunded Plan

 

The
Plan is unfunded and the Company is not required to segregate any assets in
connection with any Awards under the Plan. 
Any liability of the Company to any person with respect to any Award
under the Plan or any Award agreement is based solely upon the contractual
obligations that may be created as a result of the Plan or any such Award or
agreement.  No such obligation of the
Company will be deemed to be secured by any pledge of, encumbrance on, or other
interest in, any property or asset of the Company or any Subsidiary.  Nothing contained in the Plan or any Award
agreement will be construed as creating in respect of any Grantee (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any
Subsidiary and/or any such Grantee, any beneficiary thereof or any other
person.

 

15Exhibit 4.8

 

Bally Technologies, Inc.

2008 Employee Stock Purchase Plan

 

1.    PURPOSE

 

        1.1  
The purpose of the Plan is to provide a means by which Employees of the
Bally Technologies, Inc. and designated Related Corporations (collectively
“the Company”) may be given an opportunity to purchase shares of the Common
Stock of the Company.

 

        1.2  
The Company, with the assistance of the Plan, seeks to retain the
services of its Employees, to secure and retain the services of new Employees
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Related Corporations.

 

        1.3  
The Company intends the Plan to qualify as an “employee stock purchase
plan” within the meaning of Section 423 of the Internal Revenue Code of
1986, as amended (the “Code”), and the provisions of the Plan shall be
construed in a manner consistent with the requirements of Section 423 of
the Code.

 

        1.4  
The Company intends that the Purchase Rights granted under the Plan be
considered options issued under an Employee Stock Purchase Plan.

 

2.    DEFINITIONS

 

        2.1  
“Account” means the account maintained
on behalf of a Participant to which is credited (i) payroll deductions
pursuant to Section 8 and (ii) shares of Common Stock acquired upon
exercise of an option pursuant to Section 7.

 

        2.2  
“Authorization Form” means a form
established by the Board authorizing payroll deductions as set forth in Section 8
and such other terms and conditions as the Board from time to time may
determine.

 

        2.3  
“Board” means the Board of Directors of
the Company.

 

        2.4  
“Code” means the Internal Revenue Code
of 1986, as amended. Any reference to a section of the Code herein shall be a
reference to any successor or amended section of the Code.

 

        2.5  
“Committee” means a committee appointed
by the Board in accordance with Section 3.3 of the Plan.

 

        2.6  
“Common Stock” means the common stock of
Bally Technologies, Inc. or any securities into which such common stock
may be converted.

 

        2.7  
“Company” means Bally Technologies, Inc.,
collectively with any Related Corporation.

 

        2.8  
“Corporate Transaction” means the
occurrence, in a single transaction or in a series of related transactions, of
any one or more of the following events:

 

        2.8.1 
a sale, lease, license or other disposition of all or substantially all
of the consolidated assets of the Company;

 

 

        2.8.2 
a sale or other disposition of at least a majority of the voting power
of the outstanding equity securities of the Company;

 

        2.8.3 
a merger, consolidation or similar transaction following which the
Company is not the surviving controlling corporation;

 

        2.8.4 
a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise; or

 

        2.8.5 
a liquidation or dissolution of the Company.

 

        2.9  
“Director” means a member of the Board.

 

        2.10 
“Eligible Employee” means an Employee
who meets the requirements set forth in the Offering for eligibility to
participate in the Offering, provided that such Employee also meets the
requirements for eligibility to participate set forth in the Plan.

 

        2.11 
“Eligible Earnings” means an Eligible
Employee’s base salary/base wages, commissions and overtime pay paid during the
portion of an Offering during which such Eligible Employee is participating in
such Offering. For avoidance of doubt, cash bonuses and other forms of
incentive compensation and income generated from stock awards shall not be
included in “Eligible Earnings”.

 

        2.12 
“Employee” means any person, including
Officers and Directors, who is employed for purposes of Section 423(b)(4) of
the Code by the Company, but excluding (a) leased employees, as described
in Section 414(n) of the Code, and (b) any payroll service
bureau or employment agency employee, i.e., an individual for whom the direct
pay or compensation with respect to the performance of services for the Company
is paid by any outside entity, including, but not limited to, a payroll service
bureau or employment agency. The determination whether an individual is a
payroll service bureau employee or employment agency employee shall be made
solely based on the method of paying the individual for his or her services,
without regard to whether the individual is considered a common law employee of
the Company for any other purpose. Neither service as a Director nor payment of
a Director’s fee shall be sufficient to make an individual an Employee of the
Company.

 

        2.13 
“Employee Stock Purchase Plan” means a
plan that grants Purchase Rights intended to be options issued under an “employee
stock purchase plan,” as that term is defined in Section 423 of the Code.

 

        2.14 
“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

        2.15 
“Fair Market Value” means the value of a
security, as determined in good faith by the Board. If the Common Stock is
listed on any established stock exchange or market, the Fair Market Value of
the Common Stock, unless otherwise determined by the Board, shall be the
closing sales price (rounded up where necessary to the nearest whole cent) for
such security (or the closing bid, if no sales were reported for that business
day) as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the Trading Day prior to the
relevant determination date, as reported in The Wall Street Journal or such
other source as the Board deems reliable.

 

 

        2.16 
“Offering” shall means a period of three
(3) months, or such other period of time as determined from time to time
by the Committee. In no event shall an Offering exceed twenty-seven (27)
months. The first Offering shall commence after shareholder approval of the
Plan.

 

        2.17 
“Offering Date” means a date selected by
the Board for an Offering to commence.

 

        2.18 
“Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.

 

        2.19 
“Participant” means an Eligible Employee
who holds an outstanding Purchase Right granted pursuant to the Plan.

 

        2.20 
“Plan” means this Bally Technologies, Inc.
2008 Employee Stock Purchase Plan.

 

        2.21 
“Purchase Date” means the date during an
Offering established by the Board on which Purchase Rights granted under the
Plan shall be exercised and as of which purchases of shares of Common Stock
shall be carried out in accordance with such Offering. A Purchase Date must be
a Trading Day.

 

        2.22 
“Purchase Right” means an option to
purchase shares of Common Stock granted pursuant to the Plan.

 

        2.23 
“Related Corporation” means any parent
corporation or subsidiary corporation, whether now or hereafter existing, as
those terms are defined in Sections 424(e) and (f), respectively, of the
Code.

 

        2.24 
“Securities Act” means the Securities
Act of 1933, as amended.

 

        2.25 
“Trading Day” means any day the exchange(s) or
market(s) on which shares of Common Stock are listed is open for trading.

 

3.    ADMINISTRATION

 

        3.1  
The Board shall administer the Plan unless and until the Board delegates
administration to a Committee, as provided in Section 3.3. The Board shall
have the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan, to promulgate such rules and
regulations as it deems necessary for the proper administration of the Plan, to
interpret the provisions and supervise the administration of the Plan, and to
take all action in connection therewith or in relation thereto as it deems
necessary or advisable, regardless of whether the Board has delegated Plan administration
to a Committee.

 

        3.2  
The Board (or a Committee designated by the Board) shall have the power,
subject to and within the limitations of the express provisions of the Plan:

 

        3.2.1 
To determine when and how Purchase Rights to purchase shares of Common
Stock shall be granted and the provisions of each Offering of such Purchase
Rights (which need not be identical);

 

        3.2.2 
To designate from time to time which Related Corporations of the Company
shall be eligible to participate in the Plan and which Employees of designated
Related Corporations shall be eligible to participate in the Plan;

 

 

        3.2.3 
To construe and interpret the Plan and Purchase Rights granted under the
Plan, and to adopt, amend and rescind any rules and regulations which it
deems desirable and appropriate for the administration of the Plan, to construe
and interpret the provisions and supervise the administration of the Plan, to
make factual determinations relevant to Plan entitlements and to take all
action in connection with administration of the Plan as it deems necessary or
advisable. The Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective. Decisions of the
Board shall be final and binding upon all Participants;

 

        3.2.4 
To amend the Plan as provided in Section 15; and

 

        3.2.5 
Generally, to exercise such powers and to perform such acts as it deems
necessary or expedient to promote the best interests of the Company and its
Related Corporations and to carry out the intent that the Plan be treated as an
Employee Stock Purchase Plan.

 

        3.3  
The Board may delegate administration of the Plan to a Committee of the
Board composed of one (1) or more members of the Board. The Committee will
serve for such period of time as the Board may specify. If the Board delegates
administration to a Committee, then the Committee shall have, in connection
with the administration of the Plan, the powers theretofore possessed by the
Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as the Board may adopt from time to time. The Committee
shall have full power and authority to adopt, amend and rescind any rules and
regulations which it deems desirable and appropriate for the proper
administration of the Plan, to construe and interpret the provisions and
supervise the administration of the Plan, to make factual determinations
relevant to Plan entitlements and to take all action in connection with
administration of the Plan as it deems necessary or advisable, consistent with
the delegation from the Board. Decisions of the Board shall be final and
binding upon all Participants.

 

        3.4  
The Board may abolish or change the composition of the Committee at any
time and, if abolished, revest in the Board the administration of the Plan. If
the Board delegates administration to a Committee, then references to the Board
in this Plan and in any Offering document shall thereafter be deemed to be the
Committee, as appropriate.

 

        3.5  
In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Company, members of the
Board and of the Committee shall be indemnified by the Company against all
reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan, or any right granted under the Plan, and against all amounts
paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60)
days after the institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at his or her own
expense to handle and defend the same.

 

4.    SHARES OF COMMON STOCK SUBJECT TO THE PLAN

 

        4.1  
Subject to the provisions of Section 14, up to five hundred
thousand (500,000) aggregate shares of Common Stock may be sold pursuant to
Purchase Rights granted under the Plan. If the total number of shares which
would otherwise be subject to options granted under the Plan on an Offering
Date exceeds the number of shares then available under the Plan (after deduction
of all shares for which options have 

 

 

been
exercised or are then outstanding), the Board shall make a pro rata allocation
of the shares remaining available for option grant in as uniform a manner as
shall be practicable and as it shall determine to be equitable. In such event,
the Board shall give written notice to each Participant of such reduction of
the number of option shares affected thereby and shall similarly reduce the
rate of payroll deductions, if necessary. If any Purchase Right granted under
the Plan shall for any reason terminate without having been exercised, the
shares of Common Stock not purchased under such Purchase Right shall again
become available for issuance under the Plan.

 

        4.2  
The shares of Common Stock subject to the Plan may be unissued shares,
authorized and issued shares held in the Company’s treasury or Common Stock
acquired on the open market at prevailing market prices or otherwise.

 

5.    GRANT OF PURCHASE RIGHTS; OFFERING

 

        5.1  
The Board may from time to time grant or provide for the grant of
Purchase Rights of Common Stock under the Plan to Eligible Employees in an
Offering on an Offering Date or Offering Dates selected by the Board. Each
Offering shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate, which shall comply with the requirement of Section 423(b)(5) of
the Code that all Employees granted Purchase Rights to purchase shares of
Common Stock under the Plan shall have the same rights and privileges. The
terms and conditions of an Offering shall be incorporated by reference into the
Plan and treated as part of the Plan. The provisions of separate Offerings need
not be identical, but each Offering shall include (through incorporation of the
provisions of this Plan by reference in the document comprising the Offering or
otherwise) the period during which the Offering shall be effective, which
period shall not exceed twenty-seven (27) months beginning with the Offering
Date, and the substance of the provisions contained in Sections 6 through 9,
inclusive. Unless and until altered by the Board, each Offering shall be three (3) months
in duration.

 

6.    ELIGIBILITY

 

        6.1  
Purchase Rights may be granted only to Employees of the Company. Except
as provided in Section 6.2, an Employee shall be ineligible to be granted
Purchase Rights under the Plan unless, on the Offering Date, such Employee has
been in the employ of the Company for such continuous period preceding such
Offering Date as the Board may require, but in no event shall the required
period of continuous employment be greater than two (2) years. In
addition, the Board may provide that no Employee shall be eligible to be
granted Purchase Rights under the Plan unless, on the Offering Date, such
Employee’s customary employment with the Company is more than twenty (20) hours
per week and more than five (5) months per calendar year.

 

        6.2  
The Board may provide that each person who, during the course of an
Offering, first becomes an Eligible Employee shall, on a date or dates
specified in the Offering which coincides with the day on which such person
becomes an Eligible Employee or which occurs thereafter, receive a Purchase
Right under that Offering, which Purchase Right shall thereafter be deemed to
be a part of that Offering. Such Purchase Right shall have the same
characteristics as any Purchase Rights originally granted under that Offering,
as described herein, except that:

 

        6.2.1 
the date on which such Purchase Right is granted shall be the “Offering
Date” of such Purchase Right for all purposes, including determination of the
exercise price of such Purchase Right;

 

        6.2.2 
the period of the Offering with respect to such Purchase Right shall
begin on its Offering Date and end coincident with the end of such Offering;
and

 

 

        6.2.3 
the Board may provide that if such person first becomes an Eligible
Employee within a specified period of time before the end of the Offering, he
or she shall not receive any Purchase Right under that Offering.

 

        6.3  
No Employee may participate in the Plan if, immediately after a Purchase
Right is granted, the Employee owns, or is considered to own (within the
meaning of Code Section 424(d)), Common Stock, including Common Stock which
the Employee may purchase by conversion of convertible securities or under
outstanding options granted by the Company, representing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the
Company. For purposes of this Section 6.3, the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of any Employee, and
Common Stock which such Employee may purchase under all outstanding Purchase
Rights and options shall be treated as stock owned by such Employee.

 

        6.4  
As specified by Section 423(b)(8) of the Code, an Eligible
Employee may be granted Purchase Rights under the Plan only if such Purchase
Rights do not permit such Eligible Employee’s rights to purchase Common Stock
of the Company to accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of Fair Market Value of such stock (determined at the time such
Purchase Rights are granted, and which, with respect to the Plan, shall be
determined as of their respective Offering Dates) for each calendar year in
which such Purchase Rights are outstanding at any time; for purposes of this
limitation, there shall be counted only options to which Section 423 of
the Code applies. For purposes of the Plan, an option is “granted” on a
Participant’s Offering Date. An option will expire upon the earlier to occur of
(i) the termination of a Participant’s participation in the Plan or such
Offering; (ii) the grant of an option to such Participant on a subsequent
Offering Date; or (iii) the termination of the Offering. This Section 6.4
shall be interpreted so as to comply with Code Section 423(b)(8).

 

        6.5  
Officers of the Company, if they are otherwise Eligible Employees, shall
be eligible to participate in Offerings under the Plan. Notwithstanding the
foregoing, the Board may provide in an Offering that Employees who are
highly-compensated Employees within the meaning of Section 423(b)(4)(D) of
the Code shall not be eligible to participate in the Offering.

 

7.    PURCHASE RIGHTS; PURCHASE PRICE

 

        7.1  
On each Offering Date, each Eligible Employee, pursuant to an Offering
made under the Plan, shall be granted a Purchase Right to purchase up to that
number of shares of Common Stock purchasable either with a percentage or with a
maximum dollar amount, as designated by the Board, but in either case not
exceeding ten percent (10%) (or such greater or lesser percentage as determined
by the Board prior to the commencement of an Offering) of such Employee’s
Eligible Earnings (as defined by the Board in each Offering) during the period
that begins on the Offering Date (or such later date as the Board determines
for a particular Offering) and ends on the date stated in the Offering, which
date shall be no later than the end of the Offering. Unless the Board expressly
determines otherwise, an Eligible Employee may designate up to ten percent
(10%) of his or her Eligible Earnings for an Offering to be applied to the
purchase of shares of Common Stock in such Offering.

 

        7.2  
The Board shall establish one Purchase Date during an Offering on which
Purchase Rights granted under the Plan and pursuant to that Offering shall be
exercised and purchases of shares of Common Stock shall be carried out in
accordance with such Offering.

 

        7.3  
In connection with each Offering made under the Plan, the Board may
specify a maximum number of shares of Common Stock that may be purchased by any
Participant on any Purchase Date during such Offering. In connection with each
Offering made under the Plan, the Board may specify a maximum aggregate number
of shares of Common Stock that may be purchased by all Participants 

 

 

pursuant
to such Offering. If the aggregate purchase of shares of Common Stock issuable
upon exercise of Purchase Rights granted under the Offering would exceed any
such maximum aggregate number, then, in the absence of any Board action
otherwise, a pro-rata allocation of the shares of Common Stock available shall
be made in as nearly a uniform manner as shall be practicable and equitable.

 

        7.4  
Unless and until altered by the Board, the purchase price of shares of
Common Stock acquired pursuant to Purchase Rights granted under the Plan shall
be equal to eighty-five percent (85%) of the Fair Market Value of the shares of
Common Stock on the applicable Purchase Date.

 

8.    PARTICIPATION; WITHDRAWAL; TERMINATION

 

        8.1  
An Eligible Employee may become a Participant in the Plan pursuant to an
Offering by delivering an Authorization Form to the Company within the
time specified in the Offering, in such form as the Company may provide. Each
such agreement shall authorize payroll deductions of up to the maximum
percentage specified by the Board of such Participant’s Eligible Earnings
during the Offering. The payroll deductions made for each Participant shall be
credited to a Participant’s Account under the Plan and shall be deposited with
the general funds of the Company. To the extent provided in the Offering, a
Participant may reduce (including to zero), but may not, unless otherwise
determined by the Board, increase such payroll deductions. To the extent
provided in the Offering, a Participant may begin such payroll deductions after
the beginning of the Offering. A Participant may make additional payments into
his or her Account only if specifically provided for in the Offering and only
if the Participant has not already had the maximum permitted amount withheld
during the Offering. Notwithstanding any other provisions of the Plan to the
contrary, in locations where local law prohibits payroll deductions, an
eligible Employee may elect to participate through contributions to his or her
Account under the Plan in a form acceptable to the Board.

 

        8.2  
Under procedures and at times established by the Board, a Participant
may terminate his or her payroll deductions under the Plan and withdraw from
the Offering by delivering to the Company a notice of withdrawal in such form
as the Company may provide. Upon such withdrawal from the Offering by a
Participant, the Company shall distribute to such Participant all of his or her
accumulated payroll deductions and/or other contributions (reduced to the
extent, if any, such deductions have been used to acquire shares of Common
Stock for the Participant) under the Offering, without interest (unless
otherwise specified in the Offering), such Participant’s interest in that
Offering shall be automatically terminated and no further payroll deductions
and/or other contributions for the purchase of Common Stock will be made during
the Offering. A Participant’s withdrawal from an Offering shall have no effect
upon such Participant’s eligibility to participate in any other Offerings under
the Plan, but such Participant shall be required to deliver a new Authorization
Form in order to participate in subsequent Offerings under the Plan. The
Company may establish rules pertaining to the timing of withdrawals,
limiting the frequency with which Participants may withdraw and re-enroll in
the Plan and may impose a waiting period on Participants wishing to re-enroll
following withdrawal. Unless and until altered by the Board, a Participant may
elect to reduce his or her future payroll deductions at any time during an
Offering but may not elect to increase his or her future payroll deductions during
an Offering. Any elections shall be implemented by the Company within an
administratively reasonable period of time.

 

        8.3  
Purchase Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon a Participant ceasing to be an Employee for any
reason or for no reason (subject to any post-employment participation period
required by law) or other lack of eligibility. The Company shall distribute to
such terminated or otherwise ineligible Employee or, in the case of death, to
the Participant’s heirs or estate, all of his or her accumulated payroll
deductions and/or other contributions (reduced to the extent, if any, such
deductions have been used to acquire shares of Common Stock for the terminated
or otherwise ineligible Employee) under the Offering, without interest (unless
otherwise specified in the 

 

 

Offering).
The Board may also establish rules regarding when leaves of absence or
changes of employment status will be considered to be a termination of
employment, including rules regarding transfer of employment among any of
the Company’s Related Corporations, and the Board may establish
termination-of-employment procedures for this Plan that are independent of
similar rules established under other benefit plans of the Company;
provided that subject to Section 19, such procedures are not in conflict
with the requirements of Section 423 of the Code.

 

        8.4  
Neither payroll deductions or other contributions credited to a
Participant’s Account, nor any Purchase Rights granted under the Plan shall be
transferable by a Participant otherwise than by will or the laws of descent and
distribution, or by a beneficiary designation as provided in Section 13
and, during a Participant’s lifetime, shall be exercisable only by such
Participant. Any attempted assignment, transfer, pledge, or other disposition
shall be null and void and without effect. If a Participant in any manner
attempts to transfer, assign or otherwise encumber his or her Purchase Rights,
other than as permitted by the Code, such act shall be treated as an election
by the Participant to discontinue participation in the Plan pursuant to Section 8.2.

 

9.    EXERCISE

 

        9.1  
On each Purchase Date during an Offering, each Participant’s accumulated
payroll deductions and/or other contributions specifically provided for in the
Offering (without any increase for interest) shall be automatically applied to
the purchase of shares of Common Stock up to the maximum number of shares of
Common Stock permitted pursuant to the terms of the Plan and the applicable
Offering, at the purchase price specified in the Offering. No fractional shares
shall be issued upon the exercise of Purchase Rights granted under the Plan
unless specifically provided for in the Offering. The Company or its designee
may make such provisions and take such action as it deems necessary or
appropriate for the withholding of taxes or other amounts which the Company is
required to withhold by applicable law. Each Participant, however, shall be
responsible for payment of all individual tax liabilities arising under the
Plan. The shares of Common Stock purchased upon exercise of an option hereunder
shall be considered for tax purposes to be sold to the Participant on the
Purchase Date. During his or her lifetime, a Participant’s option to purchase
shares of Common Stock hereunder is exercisable only by him or her.

 

        9.2  
If any amount of accumulated payroll deductions and/or other
contributions remains in a Participant’s Account after the purchase of shares
of Common Stock and such remaining amount is less than the amount required to
purchase one share of Common Stock on the Purchase Date of an Offering, then
such remaining amount shall be held in each such Participant’s Account for the
purchase of shares of Common Stock under the next Offering under the Plan,
unless such Participant withdraws from such next Offering, as provided in Section 8.2,
or is not eligible to participate in such Offering, as provided in Section 6,
in which case such amount shall be distributed to the Participant after such
Purchase Date, without interest (unless otherwise specified in the Offering).

 

        9.3  
No Purchase Rights granted under the Plan may be exercised to any extent
unless the shares of Common Stock to be issued upon such exercise under the
Plan are covered by an effective registration statement pursuant to the
Securities Act and the Plan is in material compliance with all applicable
federal, state, foreign, and other securities and other laws applicable to the
Plan. If, on a Purchase Date during any Offering hereunder the shares of Common
Stock are not so registered or the Plan is not in such compliance, no Purchase
Rights granted under the Plan or any Offering shall be exercisable on such
Purchase Date. If, on the Purchase Date under any Offering hereunder, the
shares of Common Stock are not registered and the Plan is not in such
compliance, options granted under the Plan which are not in compliance shall
not be exercisable and all payroll deductions and/or other contributions
accumulated during the Offering shall be returned to the Participants, without
interest. The provisions of this Section 9.3 shall comply with the
requirements of Section 423(b)(5) of the Code to the extent
applicable.

 

 

        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 applicable provisions
of law.

 

        9.4  
As soon as practicable after the exercise of an option, the Company
shall deliver to the Participant a record of the Common Stock purchased and the
balance of any amount of payroll deductions and/or other contributions credited
to the Participant’s Account not used for the purchase, except as specified
below. The Board may permit or require that shares be deposited directly with a
broker designated by the Board or to a designated agent of the Company, and the
Board may utilize electronic or automated methods of share transfer. The Board
may require that shares be retained with such broker or agent for a designated
period of time and/or may establish other procedures to permit tracking of
disqualifying dispositions of such shares. The Company shall retain the amount
of payroll deductions and/or other contributions used to purchase Common Stock
as full payment for the Common Stock and the Common Stock shall then be fully
paid and non-assessable. No Participant shall have any voting, dividend, or
other stockholder rights with respect to shares subject to any option granted
under the Plan until the shares subject to the option have been purchased and
delivered to the Participant as provided in this Section 9. The Board may
in its discretion direct the Company to retain in a Participant’s Account for
the subsequent Offering any payroll deductions which are not sufficient to
purchase a whole share of Common Stock or return such amount to the
Participant. Any other amounts left over in a Participant’s Account after a
Purchase Date shall be returned to the Participant.

 

10.    COVENANTS OF THE COMPANY

 

        10.1  
During the terms of the Purchase Rights granted under the Plan, the
Company shall ensure that the amount of shares of Common Stock required to
satisfy such Purchase Rights are available.

 

        10.2  
The Company shall seek to obtain from each federal, state, foreign or
other regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of Common Stock upon
exercise of the Purchase Rights granted under the Plan. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of shares of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell shares of
Common Stock upon exercise of such Purchase Rights unless and until such
authority is obtained.

 

11.    USE OF PROCEEDS FROM SHARES OF COMMON STOCK

 

        Proceeds from the sale of shares of
Common Stock pursuant to Purchase Rights granted under the Plan shall
constitute general funds of the Company.

 

12.    RIGHTS AS A STOCKHOLDER

 

        A Participant shall not be deemed to be
the holder of, or to have any of the rights of a holder with respect to, shares
of Common Stock subject to Purchase Rights granted under the Plan unless and
until the Participant’s shares of Common Stock acquired upon exercise of
Purchase Rights granted under the Plan are recorded in the books of the Company
(or its transfer agent).

 

 

 

13.    DESIGNATION OF BENEFICIARY

 

        13.1  
A Participant may file a written designation of a beneficiary who is to
receive any shares of Common Stock and/or cash, if any, from the Participant’s
Account under the Plan in the event of such Participant’s death subsequent to
the end of an Offering but prior to delivery to the Participant of such shares
of Common Stock or cash. In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the Participant’s
Account under the Plan in the event of such Participant’s death during an
Offering. If a Participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective,
to the extent required by local law.

 

        13.2  
The Participant (and if required under the preceding sentence, his or
her spouse) may change such designation of beneficiary at any time by written
notice. Subject to local legal requirements, in the event of a Participant’s
death and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such Participant’s death, the Company shall deliver
such shares of Common Stock and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its sole
discretion, may deliver such shares of Common Stock and/or cash to the spouse
or to any one or more dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate. The provisions of this Section 13.2
shall in no event require the Company to violate local law, and the Company
shall be entitled to take whatever action it reasonably concludes is desirable
or appropriate in order to transfer the assets allocated to a deceased
Participant’s Account in compliance with local law.

 

14.    ADJUSTMENTS UPON CHANGES IN SECURITIES;
CORPORATE TRANSACTIONS

 

        14.1  
Subject to any required action by the stockholders of the Company, if
any change is made in the shares of Common Stock, subject to the Plan, or
subject to any Purchase Right, without the receipt of consideration by the
Company (through merger, consolidation, spin-off, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, reverse stock split, liquidating dividend, combination
or reclassification of shares (including any such change in the number of
shares of Common Stock effected in connection with a change in domicile of the
Company), exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the Company), the
Plan shall be equitably adjusted in the type(s), class(es) and maximum number
of shares of Common Stock subject to the Plan pursuant to Section 4.1, and
the outstanding Purchase Rights granted under the Plan shall be appropriately
adjusted in the type(s), class(es), number of shares and purchase limits of
such outstanding Purchase Rights. The Board shall make such adjustments, and
take any further actions which, in the exercise of its discretion, may be
necessary or appropriate under the circumstances, and its determination shall
be final, binding and conclusive. (The conversion of any convertible securities
of the Company shall not be treated as a “transaction not involving the receipt
of consideration by the Company.”)

 

        14.2  
In the event of a Corporate Transaction, then: (i) any surviving or
acquiring corporation may continue or assume Purchase Rights outstanding under
the Plan or may substitute similar rights (including a right to acquire the
same consideration paid to stockholders in the Corporate Transaction) for those
outstanding under the Plan, or (ii) if any surviving or acquiring
corporation does not assume such Purchase Rights or does not substitute similar
rights for Purchase Rights outstanding under the Plan, then, the Participants’
accumulated payroll deductions and/or other contributions (exclusive of any
accumulated interest that cannot be applied toward the purchase of shares of
Common Stock under the terms of the Offering) shall be used to purchase shares
of Common Stock immediately prior to the Corporate 

 

 

Transaction
under the ongoing Offering, and the Participants’ Purchase Rights under the
ongoing Offering shall terminate immediately after such purchase.

 

        14.3  
In the event of the proposed liquidation or dissolution of the Company,
the Offering will terminate immediately prior to the consummation of such
proposed transaction, unless otherwise provided by the Board in its sole
discretion, and all outstanding options shall automatically terminate and the
amounts of all payroll deductions and/or other contributions will be refunded
without interest to the Participants.

 

15.    AMENDMENT OF THE PLAN

 

        15.1  
The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 14 relating to adjustments upon
changes in securities and except as to amendments solely to benefit the
administration of the Plan, to take account of a change in legislation or to
obtain or maintain favorable tax, exchange or market control, or regulatory
treatment for Participants or the Company, no amendment to the Plan shall be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary for the Plan to satisfy the requirements of Section 423
of the Code or other applicable laws or regulations, including the rules and
regulations of the applicable exchange or market.

 

        15.2  
It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide Employees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to employee stock purchase
plans and/or to bring the Plan and/or Purchase Rights granted under the Plan
into compliance therewith.

 

        15.3  
The rights and obligations under any Purchase Rights granted before
amendment of the Plan shall not be impaired by any amendment of the Plan except
(i) with the consent of the person to whom such Purchase Rights were
granted, (ii) as necessary to comply with any laws or regulations, or (iii) as
necessary to ensure that the Plan and/or Purchase Rights granted under the Plan
comply with the requirements of Section 423 of the Code.

 

16.    TERMINATION OR SUSPENSION OF THE PLAN

 

        16.1  
The Board in its discretion may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate at the time that all
of the shares of Common Stock reserved for issuance under the Plan, as
increased and/or adjusted from time to time, have been issued under the terms
of the Plan. No Purchase Rights may be granted under the Plan while the Plan is
suspended or after it is terminated.

 

        16.2  
Any benefits, privileges, entitlements, and obligations under any
Purchase Rights granted under the Plan while the Plan is in effect shall not be
impaired by suspension or termination of the Plan prior to the end of the
Offering in which such suspension or termination occurs except (i) as
expressly provided in the Plan or with the consent of the person to whom such
Purchase Rights were granted, (ii) as necessary to comply with any laws,
regulations, or listing requirements, or (iii) as necessary to ensure that
the Plan and/or Purchase Rights granted under the Plan comply with the
requirements of Section 423 of the Code.

 

 

17.    EFFECTIVE DATE OF THE PLAN

 

        The Plan shall become effective as
determined by the Board, but no Purchase Rights granted under the Plan shall be
exercised unless and until the Plan has been approved by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted by the Board.

 

18.    MISCELLANEOUS PROVISIONS

 

        18.1  
The Plan and Offering do not constitute an employment contract. Nothing
in the Plan or in the Offering shall in any way alter the at-will nature of a
Participant’s employment or be deemed to create in any way whatsoever any
obligation on the part of any Participant to continue in the employ of the
Company, or on the part of the Company to continue the employment of a
Participant.

 

19.    BOARD RULES FOR FOREIGN JURISDICTIONS

 

        The Board may adopt rules or
procedures relating to the operation and administration of the Plan to
accommodate the specific requirements of local laws and procedures. Without
limiting the generality of  the foregoing, the Board is
specifically authorized to adopt rules and procedures regarding handling
of payroll deductions and/or other contributions by Participants, payment of
interest, conversion of local currency, payroll tax, withholding procedures and
handling of stock certificates, which vary with local requirements; however, if
such varying provisions are not in accordance with the provisions of Section 423(b) of
the Code, including, but not limited to, the requirement of Section 423(b)(5) of
the Code that all options granted under the Plan shall have the same rights and
privileges unless otherwise provided under the Code and the regulations
promulgated thereunder, then the individuals affected by such varying
provisions shall be deemed to be participating under a sub-plan and not the
Plan. The Board may also adopt sub-plans applicable to particular Related
Corporations or locations, which sub-plans may be designed to be outside the
scope of Code section 423. The rules of such sub-plans may take precedence
over other provisions of this Plan, with the exception of Section 4, but
unless otherwise superseded by the terms of such sub-plan, the provisions of
this Plan shall govern the operation of such sub-plan.

 

20.    REPORTS

 

        Individual accounts shall be maintained
for each Participant in the Plan. Statements of account shall be given to
Participants at least annually, which statements shall set forth the amounts of
payroll deductions and/or other contributions, the Purchase Price, the number
of shares of Common Stock purchased, and the remaining cash balance, if any.

 

21.    NOTICES

 

        All notices or other communications by
a Participant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

22.    ADDITIONAL RESTRICTIONS OF RULE 16b-3

 

        The terms and conditions of options
granted hereunder to, and the purchase of shares of Common Stock by, persons
subject to Section 16 of the Exchange Act shall comply with the applicable
provisions of Rule 16b-3. This Plan shall be deemed to contain, and such
options shall contain, and the shares of Common Stock issued upon exercise
thereof shall be subject to, such additional conditions and 

 

 

restrictions,
if any, as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.

 

23.    GOVERNING LAW

 

        This Plan shall be governed by
applicable laws of the State of Nevada and applicable federal law.

 

24.    MISCELLANEOUS

 

        (a)   Notwithstanding anything to the contrary
contained herein, no interest shall accrue on the payroll deductions and/or
other contributions of a Participant in the Plan unless otherwise required
under applicable laws, in which case any Employees affected by such applicable
laws shall be deemed to be participating in a sub-plan, unless the Board or the
Committee otherwise expressly provides that such Employees shall be treated as
participating in the Plan.

 

        (b)   Notwithstanding anything to the contrary
contained herein, all payroll deductions and/or other contributions received or
held by the Company under the Plan may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
reductions and/or other contributions unless otherwise required under
applicable laws.

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