Document:

Unassociated Document

    

    THIRD
      AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

    

    THIS
      THIRD AMENDMENT
      TO EXECUTIVE EMPLOYMENT AGREEMENT (this
      “Amendment”)
      made
      this 22nd
      day of
      December, 2005 by and between ACURA
      PHARMACEUTICALS, INC.,
      (formerly Halsey Drug Co., Inc.), a New York corporation (the “Corporation”),
      with
      offices at 616 N. North Court, Suite 120, Palatine, Illinois 60067 and
PETER
      A. CLEMENS, residing
      at 20860 Valley Road, Kideer, Illinois 60047 (the “Employee”).

    

    R E C I T 
      ;A L S

    

    
      	A.  	
              The
                Corporation and the Employee executed an employment agreement dated
                as of
                March 10, 1998, which agreement was amended in writing on each of
                June 28,
                2000 and January, 2005 (as so amended, the “Employment
                Agreement”).

            

    

    

    
      	B.  	
              The
                Corporation and the Employee now desire to further amend the Employment
                Agreement as provided herein. 

            

    

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings herein contained, the
      parties agree as follows:

    

    1.    Section
      2
      of the Employment Agreement is hereby deleted in its entirety and the following
      is inserted in its place:

    

    “The
      term
      of the Employee’s employment under this Agreement shall commence on the date of
      this Agreement and shall expire on December 31, 2006 (the “Initial
      Term”),
      unless sooner terminated pursuant to Section 7 of this Agreement; provided,
      however,
      that
      the term
      of the Employee’s employment hereunder shall automatically be extended for
      successive one (1) year periods (each, a “Renewal
      Period”
      and
      together with the Initial Term, the “Term”)
      unless
      either the Corporation or the Employee provides written notice of non-renewal
      of
      the Employee’s employment with the Corporation ninety (90) days prior to the
      expiration of the Initial Term or any Renewal Period.”

    

    2.    Section
      3(b) of the Employment Agreement is hereby deleted in its entirety and the
      following is inserted in its place:

    

    “(b) Annual
      Bonus.
      During
      the Term, the Employee will be eligible to receive from the Corporation an
      annual bonus (the “Bonus”)
      in the
      amount of up to one hundred percent (100%) of the Employee’s then current annual
      Base Salary during the fiscal year (or portion thereof) for which the Bonus
      may
      be awarded. The Bonus will be based upon the achievement of such targets,
      conditions or parameters (the “Bonus
      Criteria”)
      as
      will be agreed upon by the Employee and the Board of Directors or the
      Compensation Committee of the Board of Directors of the Corporation within
      sixty
      (60) days of (before or after) the beginning of each fiscal year during the
      Term. The Bonus shall be paid at the same time as the bonuses are paid to other
      executive officers, but in any event within seventy five (75) days following
      the
      end of the Corporation’s fiscal year.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Notwithstanding
      the foregoing, with respect to the Corporation’s fiscal year ending December 31,
      2006 (“Fiscal
      2006”),
      in
      the event the Corporation completes one or more Funding Transactions during
      Fiscal 2006 which results in the Corporation’s receipt of aggregate gross
      Funding Proceeds of at least Fifteen Million Dollars ($15,000,000)(the
“Minimum
      Funding Threshold”),
      the
      Corporation shall pay the Employee a bonus in an amount equal to one hundred
      percent (100%) of the Employee’s then current annual Base Salary not later than
      thirty (30) calendar days following the Corporation’s receipt of Funding
      Proceeds satisfying the Minimum Funding Threshold. For purposes of this Section
      3(b) “Funding
      Transaction”
      shall
      mean (a) any equity financing, and/or (b) any licensing or similar arrangement
      (including, by means of a joint venture, option or similar arrangement) whereby
      the Corporation licenses or otherwise grants any interest in or to any of the
      Corporation’s intellectual property rights, technology, know-how or similar
      property rights (whether existing now or hereafter) to a non-affiliated third
      party, or any similar transaction. “Funding
      Proceeds”
      shall
      mean and include (a) in the case of a Funding Transaction comprising an equity
      financing, the gross proceeds received by the Corporation from the issuance
      or
      sale of its equity securities, and (b) in the case of a Funding Transaction
      comprising a licensing or similar arrangement, the gross proceeds (consisting
      of
      signing fees, upfront fees, license fees, sublicense fees, milestone payments
      or
      any similar fees or payments, but expressly excluding any royalty payments,
      profit sharing payments or similar payments calculated based on the sale of
      products incorporating the Company’s technology) received by the Corporation
      with respect to such arrangement, and (c) in each case, the gross proceeds
      are
      received by the Corporation on or before March 31, 2007 with respect to a
      Funding Transaction pursuant to a definitive agreement executed on or before
      December 31, 2006 by the Corporation and the other party to such transaction.
      

    

    In
      the
      event the Corporation does not satisfy the Minimum Funding Threshold, but
      receives Funding Proceeds of at least Eleven Million Dollars ($11,000,000)
      on or
      before March 31, 2007, the Corporation shall pay the Employee a Bonus in an
      amount equal to a percentage of the Employee’s then current annual Base Salary
      in an amount equal to the product of (x) 100%, multiplied by (y) the quotient
      of
      (A) the Funding Proceeds received by the Corporation on or before March 31,
      2007, divided by (B) Fifteen Million Dollars ($15,000,000).”

    

    3.    Section
      5(b) of the Employment Agreement is hereby amended to add the following at
      the
      end of such Section:

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    The
      Corporation will promptly amend the Corporation’s 1998 Stock Option Plan to
      comply with Section 409A and prepare and issue to the Employee an amended and
      restated non-qualified stock option agreement conforming to the requirements
      of
      Section 409A with respect to the Post-409A Option Portion, in form and substance
      satisfactory to the parties in replacement of the Non-Qualified Stock Option
      Agreement granted to the Employee on August 13, 2004 (the ‘Existing Option”).
      The Corporation acknowledges and agrees that shareholder approval of the
      Existing Option has been obtained and that the shares underlying the Existing
      Option have been duly registered. All references in this Employment Agreement
      to
      the “Option” and “Option Shares” shall be deemed to include all stock options
      granted by the Corporation to the Employee during the term of this
      Agreement.”

    

    4.    Section
      5(c) of the Employment Agreement is hereby deleted in its entirety and replaced
      with the following: 

    

    “(c) Restricted
      Stock Units.
      Simultaneously with the execution of the Third Amendment to Executive Employment
      Agreement dated December 22, 2005, the Corporation granted to the Employee
      a
      Restricted Stock Units Award Agreement which, subject to its terms and the
      terms
      of the Corporation’s 2005 Restricted Stock Unit Award Plan, provides for the
      Corporation’s issuance of up to Four Million Four Hundred Thousand (4,400,000)
      shares of the Corporation’s common stock, $.01 par value per share (the
“Restricted Stock Units”). Notwithstanding anything to the contrary contained in
      this Employment Agreement, the grant, vesting and distribution relating to
      the
      Restricted Stock Units will be governed solely by Corporation’s Restricted Stock
      Units Award Plan dated December 22, 2005 and the Restricted Stock Unit Award
      Agreement dated December 22, 2005 between the Corporation and the Employee.
      The
      shares underlying the Restricted Stock Units shall be duly registered under
      a
      registration statement on Form S-8 filed by the Corporation with the Securities
      and Exchange Commission promptly following the grant of such Restricted Stock
      Units.”

    

    5.    Section
      8.1 of the Employment Agreement is hereby amended to add the following at the
      end of such Section:

    

    “Additionally,
      notwithstanding any language to the contrary contained in any option agreements
      with the Employee (or any other applicable agreement or plan), the Employee’s
      Designees shall be entitled to exercise (i) the Pre-409A Option Portion during
      the twelve (12) month period following the date of termination under this
      Section 7.1, and (ii) the vested portion of the Post-409A Option Portion during
      the lesser of (A) the twelve (12) month period following the date of termination
      under this Section 7.1, or (B) the maximum exercise period permitted under
      Section 409A. At the expiration of the applicable exercise period, the
      unexercised stock options shall terminate.”

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    6.    Section
      8.2 of the Employment Agreement is hereby amended to add the following at the
      end of the first paragraph of such Section:

    

    “Additionally,
      notwithstanding any language to the contrary contained in any option agreements
      with the Employee (or any other applicable agreement or plan), the Employee’s
      Designees shall be entitled to exercise (i) the Pre-409A Option Portion during
      the twelve (12) month period following the date of termination under this
      Section 7.2, and (ii) the vested portion of the Post-409A Option Portion during
      the lesser of (A) the twelve (12) month period following the date of termination
      under this Section 7.2, or (B) the maximum exercise period permitted under
      Section 409A. At the expiration of the applicable exercise period, the
      unexercised stock options shall terminate.”

    

    7.    Section
      7.3 of the Employment agreement is hereby amended to add the following at the
      end of such Section:

     

    “In
      the
      event the Employee is terminated by the Company for Cause or if the Employee
      resigns other than for Good Reason (as defined in Section 7.5), the Employee
      shall be entitled to exercise (i) the Pre-409A Option Portion within forty
      (40)
      days of such termination or resignation, and (ii) the vested portion of the
      Post-409A Option Portion within the forty (40) days period commencing upon
      the
      end of any applicable holding period under Section 409A following such
      termination or resignation. At the expiration of the applicable exercise period,
      the stock options shall terminate.”

    

    8.    Section
      8.6 of the Employment Agreement is hereby amended to add the following at the
      end of such Section:

    

    “(c)
      Stock
      Options.”
      In the
      event of a termination of the Employee’s employment with the Corporation without
      Cause or a termination by the Employee of his Employment with the Corporation
      for Good Reason, during the Term, notwithstanding any language to the contrary
      contained in any stock option agreements with the Employee (or any other
      applicable agreement or plan), the Employee shall be entitled to exercise (i)
      the Pre-409A Option Portion during the twenty-four (24) month period following
      the date of termination without Cause or for Good Reason, and (ii) the vested
      portion of the Post-409A Option Portion during an exercise period commencing
      upon the end of any applicable holding period under Section 409A following
      the
      date of termination, such exercise period being the lesser of (A) the twelve
      (12) month period following the date of termination, or (B) the maximum exercise
      period permitted under Section 409A. At the expiration of the applicable
      exercise period, the unexercised stock options shall terminate.”

    

    

    9.    Section
      8.7 of the Employment Agreement is hereby deleted in its entirety and the
      following inserted in its place:

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    "8.7  Change
      of Control.
      In the
      event that (i) a Change of Control (as hereinafter defined) occurs during
      the Term
      and
      (ii) the Employee's employment with the Corporation is terminated by
      the
      Corporation other than for Cause or the Employee resigns or terminates his
      employment hereunder for any reason by giving sixty (60) days prior written
      notice to the Corporation subsequent to the date of closing of the Change of
      Control transaction, the Employee shall be entitled to the accrued salary,
      unused vacation, bonus, termination payment, benefits, and stock option
      treatment as are provided in Sections 8.6(a), (b), and (c) above, except,
      that
      upon termination or resignation under this Section 8.7, the Corporation shall
      accelerate fully the vesting of any outstanding stock options to purchase shares
      of stock of the Corporation granted to the Employee, such that all stock options
      shall vest in their entirety. 

    

    For
      purposes of this Section 8.7, the term “Change
      of Control”
      means
      the occurrence of any of the following, in one or a series of related
      transactions: (v) the sale or transfer of fifty percent (50)% or more
      of
      the Outstanding Shares of the Corporation to any person or entity other than
      (i)
      a transfer to a wholly-owned subsidiary of the Corporation or (ii) a transfer
      by
      a holder or holders of the Corporation's common stock or convertible securities
      as of the date hereof to Affiliates (as defined below), or (w) the sale,
      lease, license or other transfer of all or substantially all of the assets
      or
      earning power of the Corporation to any person or entity other
      than (i) a wholly-owned subsidiary of the Corporation or (ii) an Affiliate
      whereby the purpose or effect of such transfer is to provide for the transfer
      by
      a holder or holders of the Corporation’s common stock or convertible securities
      as of the date hereof of such holders’ direct or indirect interests in the
      assets of the Corporation to Affiliates and so long as such transfer does not
      result in a transaction described by one of the other clauses of this paragraph
      of Section 8.7; or (x) merger, consolidation, reorganization,
      recapitalization, share exchange, business combination or a similar transaction
      which results in any person or entity (other than the persons who are
      shareholders or security holders of the Corporation immediately prior to such
      transaction (or their Affiliates as of the date of such transaction)) owning
      fifty percent (50%) or more of the Outstanding Shares or combined voting power
      of the Corporation, (y) merger, consolidation, reorganization, business
      combination or a similar transaction in which the Corporation is not the
      surviving entity; or (z) a transaction commonly known as “going private” whereby
      the Corporation engages one or a series of transactions which results in the
      Corporation not being required to file periodic reports with the Securities
      and
      Exchange Commission, unless the Employee is a participant in such transaction.
      “Outstanding
      Shares”
      shall
      mean the total number of common shares and common share equivalents of the
      Corporation outstanding at the time the Change of Control. “Affiliate”
      shall
      mean (i) any person or entity controlling, controlled by or under the common
      control of the existing holders of common stock or convertible securities of
      the
      Corporation and (ii) any partner, shareholder or member of the existing holders
      of common stock or convertible securities of the Corporation. For the purposes
      hereof, “control”
      shall
      mean the direct or indirect ownership of at least fifty (50%) percent of the
      outstanding shares or other voting rights of the subject entity or if it
      possesses, directly or indirectly, the power to direct or cause the direction
      of
      management and policies of such other entity.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    In
      the
      event that the Employee resigns or terminates his employment following a Change
      of Control as described above, the Employee acknowledges and agrees that upon
      the request of the Corporation, he will execute and deliver a release in
      customary form releasing all claims of the Employee arising out of his
      employment with the Corporation except for the obligations of the Corporation
      under this Agreement.”

    

    10.    The
      Employment Agreement is hereby amended to add a new Section 9.7 as
      follows:

    

    “9.7
      Assignment
      of Invention.
      All
      discoveries, inventions, improvements and innovations, whether patentable or
      not
      (including all data and records pertaining thereto), which Employee may have
      invented, discovered, originated or conceived of during the Term of his
      employment with the Corporation prior to the date of the Third Amendment to
      Executive Employment Agreement dated December __, 2005, or may invent, discover,
      originate or conceive during the Term of this Agreement and which directly
      relate to the business of the Corporation or any of its subsidiaries as
      described in the Corporation’s filings with the Securities and Exchange
      Commission, shall be the sole and exclusive property of the Corporation.
      Employee shall promptly and fully disclose each and all such discoveries,
      inventions, improvements or innovations to the Corporation. Employee shall
      assign to the Corporation his entire right, title and interest in and to all
      of
      his discoveries, inventions, improvements and innovation described in this
      Section 8.7 and any related U.S. or foreign patent and patent applications,
      shall execute any instruments reasonably necessary to convey or perfect the
      Corporation’s ownership thereof, and shall assist the Corporation in obtaining,
      defending and enforcing its rights therein. The Corporation shall bear all
      expenses it authorizes to be incurred in connection with such activity and
      shall
      pay the Employee reasonable compensation for time spent by the Employee in
      performing such duties at the request of the Corporation after the termination
      of his employment, for a period not to exceed three (3) years.”

    

    11.    Except
      as
      expressly amended by this Amendment, the Employment Agreement remains in full
      force and effect. Capitalized terms used herein shall have the same meaning
      as
      in the Employment Agreement unless otherwise defined herein. This Amendment
      shall be governed and construed and enforced in accordance with the local laws
      of the State of New York applicable to agreements made and to be performed
      entirely in New York.

    

    12.    This
      Amendment may be executed in one or more facsimile or original counterparts,
      each of which shall be deemed an original, but all of which taken together
      will
      constitute one and the same instrument.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Amendment as of the date first above
      written.

     

    
      
        	ATTEST:	 	ACURA PHARMACEUTICALS, INC.
	 	 	 
	___________________	 	By: /s/ Andrew D.
                Reddick
	 	 	
                Andrew
                  D. Reddick

              
	 	 	
                President
                  and

              
	 	 	
                Chief
                  Executive Officer

              
	 	 	 
	WITNESS:	 	EMPLOYEE
	 	 	 
	___________________ 	 	By: /s/ Peter A.
                Clemens
	 	 	
                
                  Peter
                    A.
                    Clemens

                

              

      

    
      
        
        

      

      7Unassociated Document

    ACURA
      PHARMACEUTICALS, INC.

    2005
      RESTRICTED STOCK UNIT AWARD PLAN

    

    

    1.    General
      Description.

    

    The
      Plan
      provides for grants of restricted stock units to employees and Non-Employee
      Directors of the Company and its Subsidiaries.

    

    The
      purpose of the Plan is to attract, motivate and retain experienced and
      knowledgeable employees by offering additional stock based compensation and
      incentives to defer and potentially enhance their compensation and to encourage
      stock ownership in the Company and to attract and retain qualified
      directors.

    

    This
      Plan
      is intended to comply with Section 409A of the Internal Revenue Code of 1986,
      as
      amended, in order to avoid compensation deferred under the Plan which is subject
      to Code Section 409A from being included in the gross income of Participants
      under Code Section 409A and the Plan shall be interpreted consistent with such
      intent.

     

    2.    Definitions.

     

    The
      following definitions shall be applicable throughout the Plan:

    

    "Board"
      means the Board of Directors of the Company.

    

    "Cause"
      means, with respect to termination of a Participant's employment, or service
      as
      a Non-Employee Director, the occurrence of any one or more of the
      following:

    

    (a)
      in
      the case of a (A) Non-Employee Director or (B) an employee where there is no
      employment, change in control or similar agreement in effect between the
      Participant and the Company or a Subsidiary at the time of the grant of the
      Restricted Stock Unit award, or where there is such an agreement but the
      agreement does not define "cause" (or similar words), the finding by the Board
      or the Committee, in the exercise of good faith and reasonable judgment, that:
      (1) except in the case of a Non-Employee Director, Participant breached his
      or
      her employment or service contract or any other agreement (whether verbal or
      written) with the Company, (2) Participant has been engaged in disloyalty to
      the
      Company, including, without limitation, fraud, embezzlement, theft, or proven
      dishonesty in the course of his or her employment or service with the Company;
      (3) Participant has been convicted of a felony; (4) Participant has committed
      gross negligence or willful misconduct in the course of his or her employment
      or
      service with the Company, or (5) Participant has disclosed trade secrets or
      confidential information of the Company to persons not entitled to receive
      such
      information. 

    

    (b)
      in
      the case of an employee where there is a written employment, change in control
      or similar agreement in effect between the Participant and the Company or a
      Subsidiary at the time of the grant of the Restricted Stock Unit award that
      defines "cause" (or similar words) the termination of an employment arrangement
      that is or would be deemed to be for "cause" (or similar words) as defined
      in
      such agreement. 

    

    "Change
      in Control - Plan" means in one or a series of related transactions any of
      the
      following: (a) the acquisition (other than solely from the Company) by any
      individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
      of the Exchange Act) other than the Company or any Subsidiary of the beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act)
      of more than sixty-six and 2/3 percent (66.66%) of the combined voting power
      of
      the then outstanding voting securities of the Company entitled to vote generally
      in the election of directors (the “Voting Securities”); (b) a reorganization,
      merger, consolidation, share exchange, recapitalization, business combination
      or
      similar combination involving the Company or its capital stock (a "Business
      Combination"), other than a Business Combination in which more than thirty-three
      and 1/3 percent (33.33%) of the combined voting power of the outstanding voting
      securities of the surviving or resulting entity immediately following the
      Business Combination is held by the persons who, immediately prior to the
      Business Combination, were the holders of the Voting Securities; (c) a sale
      or
      other transfer (other than license) of all or substantially all of the Company’s
      assets (measured by the value or earning power of the assets), including,
      without limitation, the sale by the Company of its rights under license
      agreements or similar agreements relating to its technology (including the
      sale
      of royalty payment amounts payable to the Company or its shareholders under
      such
      agreements); (d) the license or similar agreement by the Company to a third
      party or third parties, in one or more transactions, of all rights in and to
      the
      Company’s technology and, as a result of such transactions, all or substantially
      all of the Company’s activities consist of monitoring such arrangements and
      collecting fees and payments due thereunder; or (e) a complete liquidation
      or
      dissolution of the Company.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

       

    

    "Change
      in Control - Section 409A" shall mean a Change in Control - Plan, except to
      the
      extent that (and only to the extent that) such Change in Control - Plan does
      not
      qualify as a
      change
      (a)
in
      the
      ownership or effective control of the Company, or (b) in the ownership of a
      substantial portion of the assets of the Company, under
      Section 409A of the Code.

     

    "Code"
      means the Internal Revenue Code of 1986, as amended.

    

    "Committee"
      shall mean the Committee, if any, appointed by the Board under Section 4
      hereof.

    

    "Company"
      means Acura Pharmaceuticals, Inc. and its successors.

     

    "Disability"
      means 

    

    (a)
      in
      the case of a (A) Non-Employee-Director or (B) an employee where there is no
      employment, change in control or similar agreement in effect between the
      Participant and the Company or a Subsidiary at the time of the grant of the
      Restricted Stock Unit award, or where there is such an agreement but the
      agreement does not define "disability" (or similar words), then “Disability”means
      the
      Participant: (1) is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment which can
      be
      expected to result in death or can be expected to last for a continuous period
      of not less than twelve (12) months; (2) is, by reason of any medically
      determinable physical or mental impairment which can be expected to result
      in
      death or can be expected to last for a continuous period of not less than twelve
      (12) months, receiving income replacement benefits for a period of not less
      than
      three (3) months under an accident and health plan covering employees and/or
      directors of the Company; (3) is determined to be totally disabled by the Social
      Security Administration; or (4) any other permitted definition of disability
      under Section 409A of the Code and the regulations promulgated thereunder,
      and

    

    (b)
      in
      the case where there is a written employment, change in control or similar
      agreement in effect between the Participant and the Company or a Subsidiary
      at
      the time of the grant of the Restricted Stock Unit award that defines
      "disability" (or similar words) the termination of an employment arrangement
      that is or would be deemed to be for "disability" (or similar words) as defined
      in such agreement. 

    

     

    "Effective
      Date" shall
      be
      the date this Plan is adopted by the Board. 

     

    Eligible
      Participant” means a Non-Employee Director serving as a director on the date of
      grant or an employee employed by the Company or its Subsidiaries on the date
      of
      grant.

    

    "Exchange
      Act" means the Securities Exchange Act of 1934, as amended.

    

    "Fair
      Market Value" means the average of the closing bid and closing ask price of
      the
      Stock as reported on the OTC Bulletin Board or any successor principal market
      for the Stock on the applicable date, or if the Stock is not trading on the
      OTC
      Bulletin Board or an established securities market (within the meaning of
      Section 409A of the Code and the regulations promulgated thereunder), the fair
      market value of the Stock for the applicable date as determined by a reasonable
      valuation method selected by the Board or the Committee.

    

    “Non-Employee
      Director" has the definition set forth in Rule 16b-3(b)(3)(i) of the Exchange
      Act.  

    

    "Participant"
      means each person who has been granted a Restricted Stock Unit
      award.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    "Plan"
      means the Acura Pharmaceuticals, Inc. 2005 Restricted Stock Unit Award Plan,
      as
      set forth herein and as it may be amended from time to time.

    

    “Restricted
      Stock Unit Award Agreement” means an agreement described in Section 5(a).

    "Restricted
      Stock Units" or "RSUs" means an award of Stock Units credited pursuant to
      Section 5, which Stock Units are subject to vesting and other restrictions
      as
      set forth herein.

     

    "Securities
      Act" means the Securities Act of 1933, as amended.

     

    "Stock"
      means shares of common stock, par value $.01 per share, of the Company,
      including any rights attendant thereto upon issuance of the shares, together
      with any restrictions, limitations or conditions of and to such rights and
      such
      other stock or other securities or property into which the Stock (or such
      rights) may be converted or for which it is exchanged or substituted (and any
      credits thereon), pursuant to Section 10.

    

    "Stock
      Unit" means a non-voting unit of measurement that is (a) deemed for bookkeeping
      purposes to be equivalent to one outstanding share of Stock solely for purposes
      of determining benefits under the Plan, (b) credited to a Participant's Stock
      Unit Account pursuant to the grant of Restricted Stock Units under Section
      5;
      and (c) payable solely in a share of Stock, on a one-for-one basis.

     

    "Stock
      Unit Account" means the bookkeeping account maintained by the Company for each
      Eligible Participant that is credited with Stock Units in accordance with the
      Plan.

     

    "Subsidiary"
      means any entity of which a majority of the outstanding voting stock or voting
      power is beneficially owned directly or indirectly by the Company.

     

    3.    Effective
      Date; Duration.

    

    The
      Effective Date shall be the date on which the Board adopts this Plan. The Plan
      shall continue in effect until all matters relating to Stock Units and the
      administration of the Plan have been completed and all payments of such
      compensation have been made.

    

    4.    Administration.

    

    The
      Company’s Board of Directors or a Committee appointed by the Board shall
      administer the Plan. If appointed by the Board, the Committee shall be
      constituted so as to permit the Plan to continue to comply with Rule 16b-3,
      as
      currently in effect or as hereafter modified or amended. The Committee appointed
      by the Board of Directors shall consist of not less than two members of the
      Board of Directors, to administer the Plan on behalf of the Board of Directors,
      subject to such terms and conditions as the Board of Directors may prescribe.
      Once appointed, the Committee shall continue to serve until otherwise directed
      by the Board of Directors. From time to time, the Board of Directors may
      increase the size of the Committee and appoint additional members thereof,
      remove members (with or without cause), and appoint new members in substitution
      therefor, fill vacancies however caused, or remove all members of the Committee
      and thereafter directly administer the Plan; provided, however, that at no
      time
      shall a Committee of less than two members administer the Plan. Notwithstanding
      anything to the contrary contained herein, no member of the Committee shall
      serve as such under this Plan unless such person is a "Non-Employee Director"
      within the meaning of Rule 16b-3(b)(3)(i) of the Exchange Act. 

    

    A
      majority of the entire Committee shall constitute a quorum, and the action
      of
      the majority of the Committee members present at any meeting at which a quorum
      is present shall be the action of the Committee. The Committee shall have all
      of
      the powers and duties set forth herein, as well as such additional powers and
      duties as the Board of Directors may delegate to it; provided, however, that
      the
      Board of Directors expressly retains the right in its sole discretion (i) to
      elect and to replace the members of the Committee, and (ii) to terminate or
      amend this Plan in any manner consistent with applicable law.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    The
      Committee shall have the authority, subject to the provisions of this Plan,
      to
      establish, adopt and revise such rules, regulations and forms and agreements
      and
      to interpret the Plan and make all such determinations relating to the Plan
      as
      it may deem necessary or advisable. The Committee shall also have the authority,
      subject to the provisions of the Plan, to delegate ministerial, day-to-day
      administrative details and non-discretionary duties and functions to officers
      and employees of the Company. The Committee's interpretation of the Plan or
      any
      awards granted pursuant hereto and all decisions and determinations by the
      Committee with respect to the Plan shall be final, binding, and conclusive
      on
      all parties. Notwithstanding any provisions of this Plan or any Restricted
      Stock
      Unit Award Agreement to the contrary, all discretionary interpretations,
      decisions or determinations of the Board or the Committee with respect to the
      Plan and all RSUs awarded under the Plan shall be made in accordance with the
      express terms of the Plan and applicable Restricted Stock Unit Award Agreement
      in the exercise of good faith and reasonable judgment.

    

    Notwithstanding
      any contrary provision of this Section 4, the Board shall administer the Plan,
      and the Committee shall exercise no discretion with respect to any grants to
      Non-Employee Directors. In the administration of the Plan with respect to
      Non-Employee Directors, the Board shall have all of the authority and discretion
      otherwise granted to the Committee with respect to the administration of the
      Plan.

    

    5.    Restricted
      Stock Units.

     

    (a)
      Restricted Stock Units may be granted at any time and from time to time as
      determined by the Board or the Committee. Each Restricted Stock Units grant
      will
      be evidenced by a Restricted Stock Award Agreement that will specify such other
      terms and conditions as Board or the Committee, in its sole discretion, will
      determine, including all other applicable terms, conditions and restrictions
      related to the grant, vesting and the number of Restricted Stock Units not
      otherwise set forth in this Plan.

    

    (b)
      Vesting Period. The Board or the Committee shall determine the vesting of a
      Restricted Stock Unit award granted under Section 5(a), and shall set forth
      such
      vesting in the Restricted Stock Unit Award Agreement. 

    

    (c)
      Acceleration of Vesting. Notwithstanding Section 5(b), unless expressly provided
      otherwise in the Restricted Stock Unit Award Agreement, each Restricted Stock
      Unit award shall become fully and immediately vested and nonforfeitable to
      the
      Participant upon the occurrence of any of the following events:

     

    (1)
      a
      Participant's service as an employee of the Company is terminated by the Company
      without Cause or due to Participant’s death or Participant’s Disability, or in
      the case of a Non-Employee Director, Participant’s death or Disability or
      Participant is not renominated as a director (other than for “Cause” or refusal
      to stand for re-election) or is not elected by the Company’s stockholders, if
      nominated; or 

    

    (2)
      a
      Change in Control - Plan.

    

    6.    Dividend
      and Voting Rights.
      

    

    Unless
      expressly provided for in a Participant’s Restricted Stock Unit Award Agreement,
      a Participant shall have no rights as a stockholder of the Company, no dividend
      rights and no voting rights, with respect to the RSUs and any shares of Common
      Stock underlying or issuable in respect of such RSUs until such shares of Common
      Stock are actually issued to and held of record by the Participant. No
      adjustments will be made for dividends or other rights of a holder for which
      the
      record date is prior to the date of issuance of the stock certificate for such
      RSU.

    

    7.    Restrictions,
      Distributions and Changes to Distributions; Payment of
      Units.

     

    (a)
      Time
      and Manner of Distribution. Payment of vested Stock Units in a Participant's
      Stock Unit Account in accordance with Section 7(b) shall be made on the earlier
      of (i) a Change in Control - Section 409A, or (ii) January 1, 2011. In the
      event
      of a payment pursuant to a Change in Control - Section 409A under Section
      7(a)(i), such payment shall be made in a lump sum payment as soon as
      administratively practicable following consummation of said Change in Control
      -
      Section 409A. In the event of a payment due to Section 7(a)(ii), such payment
      shall be made in four equal installments (twenty-five percent on each
      installment) on each of January 1, 2011, January 1, 2012, January 1, 2013 and
      January 1, 2014; provided, however, that in the event of a Change in Control
      -
      Section 409A at any time after January 1, 2011 but prior to payment of all
      of
      Participant’s Stock Units in the Participant’s Stock Unit Account, all of
      Participant’s undistributed Stock Units as of consummation of said Change in
      Control - Section 409A shall be paid to Participant in a lump sum as soon as
      administratively practicable.

     

    
      

      

      
        4

        
          

        

      

      

      

       

    

    (b)
      Payment of Units. Upon the occurrence of the distribution events set forth
      in
      Section 7(a), the Company shall deliver a number of shares of Stock equal to
      the
      number of vested Stock Units to which the Participant is then entitled under
      the
      terms of the Plan and the Restricted Stock Unit Award Agreement upon receipt
      from Participant of the par value of such shares of Stock. In lieu of requiring
      cash payment of such par value, the Company may, in the Participant’s sole
      discretion, accept payment of any such par value by withholding from Stock
      payments a number of whole shares of Stock whose value is equal to the amount
      of
      such par value. Valuation for this purpose shall be the Fair Market Value on
      the
      date of distribution. 

    

    (c)
      Forfeiture of Unvested Units. Except as provided in Section 5(c) of the Plan
      or
      in a Participant’s Restricted Stock Unit Award Agreement, to the extent any
      portion or a Participant's RSUs have not become vested upon the date the
      Participant's services as an employee terminate, such RSUs shall be forfeited
      and the unvested portion of the RSU award shall automatically terminate without
      any other action by the Participant or the Participant’s Beneficiary as the case
      may be and without payment of consideration by the Company.

    

    8.    Shares
      Subject To The Plan; Share Limits. 

    

    Shares
      Available for Issuance. Subject to adjustment under Section 10, the aggregate
      number of shares of Stock that may be issued under the Plan shall not exceed
      thirty million (30,000,000) shares. Stock delivered by the Company to satisfy
      payment provisions under Section 7 of the Plan shall be shares of authorized
      and
      unissued shares of Stock and/or previously issued Stock held as treasury shares
      and shall be fully paid and non-assessable when issued. Shares issuable on
      payment of Stock Units shall be reserved for issue, and to the extent that
      awards terminate or are forfeited without payment in shares, the shares will
      be
      available for subsequent awards.

     

    9.    General.

     

    (a)
      Government and Other Regulations. The obligation of the Company to credit Stock
      Units, issue or deliver Stock or otherwise make payments under the Plan are
      subject to compliance with all applicable laws, rules, and regulations
      (including, without limitation, federal and state securities laws), and to
      such
      approvals by any listing, agency, or regulatory or governmental authorities
      as
      may, in the opinion of counsel for the Company, be necessary or advisable in
      connection therewith. Any securities issued or delivered under the Plan shall
      be
      subject to such restrictions, and the person acquiring such securities shall,
      if
      requested by the Company, provide such assurances and representations to the
      Company, as the Company may deem necessary or advisable to assure compliance
      with all applicable legal requirements.

     

    (b)
      Tax
      and Withholding. The Company has the right to require the person receiving
      Stock
      to pay to the Company the amount of any federal, state and local taxes which
      the
      Company is required to withhold upon the delivery of Stock. In lieu of requiring
      cash payment of any such taxes, the Company shall, in the Participant’s sole
      discretion, instead withhold from said Participant’s Stock payments a number of
      shares of Stock whose value is equal to the amount of such taxes. Valuation
      for
      this purpose shall be the Fair Market Value on the date of distribution.

    

    (c)
      Beneficiaries.

     

    (1)
      Beneficiary Designation. Each Eligible Participant may designate in writing
      the
      Beneficiary or Beneficiaries (as defined in Section 9(c)(2)) whom such Eligible
      Participant desires to receive any amounts payable under the Plan after his
      or
      her death. Beneficiary designations shall be effective on the date such written
      designation is received by the Corporate Secretary. An Eligible Participant
      may
      from time to time change his or her designated Beneficiary or Beneficiaries
      without the consent of such Beneficiary or Beneficiaries by filing a new
      designation in writing with the Corporate Secretary. However, if a married
      Eligible Participant wishes to designate a person other than his or her spouse
      as Beneficiary, such designation shall be consented to in writing by the spouse.
      The Eligible Participant may change any election designating a Beneficiary
      or
      Beneficiaries without any requirement of further spousal consent if the spouse's
      consent so provides. Notwithstanding the foregoing, spousal consent shall not
      be
      necessary if it is established that the required consent cannot be obtained
      because the spouse cannot be located or because of other circumstances
      prescribed by the Board or the Committee. The Company and the Board or the
      Committee may rely on the Eligible Participant's designation of a Beneficiary
      or
      Beneficiaries last filed in accordance with the terms of the Plan.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

       

    

    (2)
      Definition of Beneficiary. An Eligible Participant's "Beneficiary" or
      "Beneficiaries" shall be the person, persons, trust or trusts so designated
      by
      the Eligible Participant or, in the absence of such designation, entitled by
      will or the laws of descent and distribution to receive the Eligible
      Participant's benefits under the Plan in the event of the Eligible Participant's
      death, and shall mean the Eligible Participant's executor or administrator
      if no
      other Beneficiary is identified and able to act under the
      circumstances.

    

    (d)
      Non-transferability. Except as provided in Section 9(c), a Participant's rights
      and interests under the Plan in respect of Stock Units, including Stock
      deliverable under or in respect thereof, may not be assigned, pledged, or
      transferred.

     

    (e)
      Expenses. All expenses incurred by the Company associated with adoption and
      administration of this Plan, including all legal expenses related to drafting
      this Plan and related documents, shall be borne solely by the
      Company.

    

    (f)
      Titles and Headings. The titles and headings of the sections in the Plan are
      for
      convenience of reference only, and in the event of any conflict, the text of
      the
      Plan, rather than such titles or headings, shall control.

    

    (g)
      Governing Law. The validity of the Plan or any of its provisions and any
      agreements entered into under the Plan shall be construed, administered and
      governed in all respects under the laws of the State of New York. If any
      provisions of the Plan shall be held by a court of competent jurisdiction to
      be
      invalid or unenforceable, the remaining provisions hereof shall continue to
      be
      fully effective.

    

      (h)
      Limitation on Participants' Rights; Unfunded Plan. Participation in the Plan
      shall not give any person the right to continued employment or any rights or
      interests other than as expressly provided herein. No Participant shall have
      any
      right to any payment or benefit hereunder except to the extent provided herein.
      The Plan shall create only a contractual obligation on the part of the Company
      as to such amounts and shall not be construed as creating a trust or fiduciary
      relationship between the Company, the Board, the Committee, and any Participant
      or other person. Participants and their Beneficiaries shall have no legal or
      equitable rights, claims, or interest in any specific property or assets of
      the
      Company. No assets of the Company shall be held under any trust, or held in
      any
      way as collateral security for the fulfilling of the obligations of the Company
      under this Plan. Any and all of the Company's assets shall be, and remain,
      the
      general unpledged, unrestricted assets of the Company. The Company's obligation
      under the Plan shall be merely that of an unfunded and unsecured promise of
      the
      Company to pay benefits in the future, and the rights of the Participants and
      Beneficiaries shall be no greater than those of unsecured general creditors.
      

     

    (i)
      Rights with Respect to Stock Units. A Participant's Stock Unit Account shall
      be
      a memorandum account on the books of the Company. The Stock Units credited
      to
      such account shall be used solely as a device to determine the number of shares
      of Stock to be eventually distributed to the Participant, subject to applicable
      vesting requirements, in accordance with the Plan. The Stock Units shall not
      be
      treated as property or as a trust fund of any kind. No Participant shall be
      entitled to any voting dividend, or other stockholder rights with respect to
      Stock Units credited under the Plan.

     

    (j)
      Restricted Stock Unit Award Agreements. Each Restricted Stock Unit award granted
      to an Eligible Participant under the Plan shall be evidenced by a writing
      approved by the Board or the Committee and will contain the terms and conditions
      consistent with the Plan as approved by the Board or the Committee relating
      to
      the RSUs. This Plan and each Restricted Stock Unit Award Agreement granted
      to an
      Eligible Participant under the Plan shall be binding upon, and inure to the
      benefit of, any successor or successors of the Company, except to the extent
      that the Board or the Committee and each Participant having executed a
      Restricted Stock Unit Award Agreement determine otherwise as evidenced by a
      writing signed by both parties.

     

    (k)
      Plan
      Construction. By its approval of the Plan, the Board intends that the
      transactions contemplated by the Plan satisfy and be interpreted in a manner
      that satisfies the applicable requirements of Rule 16b-3 promulgated under
      the
      Exchange Act so that, among other transactions, the crediting of Stock Units
      and
      payment in Stock will be entitled to the benefits of Rule 16b-3 or other
      exemptive rules under Section 16 of the Exchange Act.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    (l)
      Notices. Any notice to be given under the terms of this Plan shall be in writing
      and addressed to the Company at its principal office, to the attention of the
      Corporate Secretary, and to the Participant at his or her last address of
      record, or at such other address as either party may designate in writing to
      the
      other for the purposes of notices in respect of RSUs.

    

    10.    Changes
      in Capital Structure.

     

    Upon
      or
      in contemplation of any reclassification, recapitalization, stock split
      (including a stock split in the form of a stock dividend) or reverse stock
      split; any merger, combination, consolidation or other reorganization; any
      split-up; spin-off, or similar extraordinary dividend distribution in respect
      of
      the Stock (whether in the form of securities or property); any exchange of
      Stock
      or other securities of the Company, or any similar, unusual or extraordinary
      corporate transaction in respect of the Stock; or a sale of substantially all
      the assets of the Company as an entirety; then the Board shall, in such manner,
      to such extent (if any) and at such time as it deems appropriate and equitable
      in the circumstances in the Board’s exercise of good faith and reasonable
      judgment, proportionately adjust any or all of (a) the number and type of shares
      of Stock (or other securities or property) that thereafter may be made the
      subject of Stock Units and Stock Unit Accounts (including the specific maximum
      and numbers of shares set forth elsewhere in the Plan), (b) the number, amount
      and type of shares of Stock (or other securities or property) payable in respect
      of Stock Units, and (c) and the number and type of Stock Units (both credited
      and vested) under the Plan.

    

    11.    Amendments
      and Termination.

    

    The
      Board
      shall have the right to amend the Plan (including outstanding awards) in whole
      or in part from time to time or may at any time suspend or terminate the Plan;
      provided, however, that no amendment or termination shall cancel or otherwise
      adversely affect in any way, without his or her written consent, any
      Participant's rights with respect to Stock Units credited to his or her Stock
      Unit Account and no amendment or termination shall accelerate payment of any
      benefit which is subject to the rules of Section 409A of the Code in a manner
      that would violate the distribution rules of Section 409A of the Code.
      Notwithstanding the foregoing, Participant consent shall not be required to
      the
      extent that the Board determines that applicable law requires amendment or
      termination of the Plan to preserve the intended tax benefits to the
      Participants and the Company hereunder. Any amendments authorized hereby shall
      be stated in an instrument in writing, and all Participants (subject to any
      applicable consent requirement above) shall be bound thereby upon receipt of
      notice thereof. Changes contemplated by Section 10 shall not be deemed to
      constitute changes or amendments for purposes of this Section 11.

    

    
      
         

      

      
        7

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