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Unassociated Document

    FIRST
      AMENDMENT TO
      SECURITIES PURCHASE AGREEMENT

     

    FIRST
      AMENDMENT TO SECURITIES PURCHASE AGREEMENT (the "Amendment"),
      dated
      as of October 25, 2006, amending certain provisions contained in the Securities
      Purchase Agreement (the "Purchase
      Agreement"),
      dated
      as of August 9, 2006, by and among SpatiaLight, Inc., a New York corporation
      (the "Company")
      and
      each of the purchasers identified on the signature pages thereto (each, a
“Purchaser” and collectively, the “Purchasers”). 

     

    WITNESSETH:

     

    WHEREAS,
      by that certain Purchase Agreement among the Company and the Purchasers, the
      Company agreed to sell to Purchasers, and Purchasers agreed to purchase from
      the
      Company, the Shares, as more particularly described in the Purchase Agreement;
      and

     

    WHEREAS,
      Purchasers and the Company mutually desire to amend the Purchase Agreement
      on
      the terms and conditions hereinafter set forth.

     

    NOW
      THEREFORE, for good and valuable consideration, the mutual receipt and legal
      sufficiency of which is hereby acknowledged, the parties hereto agree as
      follows:

     

    1.  Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      ascribed to such terms in the Purchase Agreement.

     

    2.  Additional
      Offering.
      Section
      4.14 of the Purchase Agreement is hereby amended and restated in its entirety
      as
      follows:

     

    Within
      thirty (30) days after the Closing, the Company shall prepare and file with
      the
      Commission a registration statement providing for the Company to, amongst other
      things, have the ability to offer and issue subscription rights to purchase
      a
      minimum of $20,000,000 of Common Stock (the “Shelf Registration Statement”). The
      Shelf Registration Statement shall be on Form S-3 (except if the Company is
      not
      then eligible to register on Form S-3, such registration shall be on another
      appropriate form in accordance herewith). The Company shall use its best efforts
      to cause the Shelf Registration Statement to be declared effective under the
      Securities Act as promptly as practicable after the filing thereof. Within
      30
      days of the Shelf Registration Statement being declared effective under the
      Securities Act (such 30th day being the “Additional Financing Deadline”), the
      Company agrees that it shall issue subscription rights to purchase at least
      $20,000,000 of Common Stock to its then current holders of Common Stock (the
      “Subscription Rights Offering”); provided, however, (i) if the Company obtains,
      after the Closing but before the Additional Financing Deadline, additional
      financing in the aggregate amount of at least $1,000,000, but less than
      $3,000,000 by offering and selling 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    securities
      pursuant to the Shelf Registration Statement or otherwise, then the Additional
      Financing Deadline shall be extended for an additional 30 days (the last day
      of
      the extension in each of clauses (i) through (iii) being the “Final Offering
      Deadline”); (ii)
      if
      the Company obtains, after the Closing but before the Additional Financing
      Deadline, additional financing in the aggregate amount of at least $3,000,000,
      but less than $5,000,000 by offering and selling securities pursuant to the
      Shelf Registration Statement or otherwise, then the Additional Financing
      Deadline shall be extended for an additional number of days equal to 30 plus
      the
      product (rounded to the nearest integer) of (x) the fraction whose numerator
      is
      equal to the amount of money raised minus $3,000,000 and whose denominator
      is
      equal to $2,000,000, and (y) 30, (iii) if the Company obtains, after the Closing
      but before the Additional Financing Deadline, additional financing in the
      aggregate amount of at least $5,000,000 by offering and selling securities
      pursuant to the Shelf Registration Statement or otherwise, then the Additional
      Financing Deadline shall be extended for an additional 60 days; (iv) if the
      Company obtains, after the Closing but before the Final Offering Deadline,
      additional financing in the aggregate amount of at least $10,000,000 by offering
      and selling securities pursuant to the Shelf Registration Statement or
      otherwise, then the Company shall not be required to commence the Subscription
      Rights Offering. Furthermore, and notwithstanding the foregoing, in the event
      that the Company obtains, after the Closing but before the Additional Financing
      Deadline, additional financing in the aggregate amount of at least $5,000,000,
      but less than $10,000,000, by offering and selling securities pursuant to the
      Shelf Registration Statement or otherwise, the Company shall only be required
      to
      raise, pursuant to the subscription rights offering described in this Section
      4.14, only an amount equal to the difference between $20,000,000 and such amount
      raised by the Additional Financing Deadline.

     

    3.  Counterparts.
      This
      Amendment may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original but all of which taken together shall constitute one
      and the same agreement. Any facsimile signature or signature by electronic
      transmission attached hereto shall be deemed to be an original and shall have
      the same force and effect as an original signature.

     

    4.  Effect
      of Amendment.
      Except
      as otherwise expressly amended and modified by this Amendment, the provisions
      of
      the Purchase Agreement remain unchanged and in full force and effect and are
      hereby ratified and confirmed in all respects. Whenever the Purchase Agreement
      is referred to in the Purchase Agreement or in any other agreement, document
      or
      instrument, such reference shall be deemed to be to the Purchase Agreement
      as
      amended by this Amendment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    *
      * * *
      *

     

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    SIGNATURE
      PAGE TO FIRST AMENDMENT TO

     

    SECURITIES
      PURCHASE AGREEMENT

     

    IN
      WITNESS WHEREOF, each of the Company and the Purchasers has executed or caused
      this Amendment to be executed by their respective officers thereunto duly
      authorized, in each case, as of the date first written above.

     

    

     

    

    
      	
              SPATIALIGHT,
                INC.

            	
              Address
                for Notice:

            
	
              By:/s/
                David F.
                Hakala                                                                
                 

              Name:
                David F. Hakala

              Title:
                Chief Operating Officer

            	
              5
                Hamilton Landing, Suite 100

              Novato,
                CA 94949

            
	 	 
	
               

            	 

    

    

    

    

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    SIGNATURE
      PAGE FOR PURCHASER FOLLOWS]

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    

    
      	
              WELLINGTON
                MANAGEMENT COMPANY,LLP

               

              an
                investment adviser on behalf of the Entities on the attached Schedule
                A.

               

              By:/s/
                Sara Lou
                Sherman                                                          
                 

              Name:
                Sara Lou Sherman

              Title:
                Vice president and Counsel

            	
              Address
                for Notice:

              c/o:
                Wellington Management Company LLP

              Attention:Steve
                Hoffman

              75
                State Street

              Boston,
                MA 02109Exhibit
      10.1

     

    Solomon
      Technologies, Inc. 

    

    Amended
      and Restated

     

    2003
      Stock Option Plan 

     

    Adopted
      July 31, 2003 

     

    Amended
      June 10, 2004 and August 11, 2006 

     

    1.
      Purpose
      of the Plan.
      The
      Solomon Technologies, Inc. 2003 Stock Option Plan (the “Plan”) is intended to
      advance the interests of Solomon Technologies, Inc. (the “Company”) by inducing
      individuals and eligible entities (as hereinafter provided) of outstanding
      ability and potential to join and remain with, or provide consulting or advisory
      services to, the Company, by encouraging and enabling eligible employees,
      non-employee Directors, consultants and advisors to acquire proprietary
      interests in the Company, and by providing the participating employees,
      non-employee Directors, consultants and advisors with an additional incentive
      to
      promote the success of the Company. This is accomplished by providing for the
      granting of “Options”, which term as used herein includes both “Incentive Stock
      Options” and “Nonstatutory Stock Options” (as hereinafter defined), Stock
      Appreciation Rights, Restricted Stock and Restricted Stock Units (each as
      hereinafter defined) (collectively “Awards”) to employees, non-employee
      Directors, consultants and advisors. 

     

    2.
      Administration.
      The
      Plan shall be administered by the Board of Directors of the Company (the “Board
      of Directors”) or by a committee (the “Committee”) chosen by the Board of
      Directors. Except as herein specifically provided, the interpretation and
      construction by the Board of Directors or the Committee of any provision of
      the
      Plan or of any Award granted under it shall be final and conclusive. The receipt
      of Awards by Directors, or any members of the Committee, shall not preclude
      their vote on any matters in connection with the administration or
      interpretation of the Plan. 

     

    3.
      Shares
      Subject to the Plan.
      The
      stock subject to Options, Stock Appreciation Rights and Awards of Restricted
      Stock and Restricted Stock Units granted under the Plan shall be shares of
      the
      Company’s Common Stock, par value $0.001 per share (the “Common Stock”), whether
      authorized but unissued or held in the Company’s treasury, or shares purchased
      from stockholders expressly for use under the Plan. The maximum number of shares
      of Common Stock which may be issued pursuant to Options, Stock Appreciation
      Rights and Awards of Restricted Stock and Restricted Stock Units granted under
      the Plan shall not exceed in the aggregate two million (2,000,000) shares,
      plus
      such number of shares of Common Stock issuable upon the exercise of Reload
      Options (as hereinafter defined) granted under the Plan, subject to adjustment
      in accordance with the provisions of Section 15 hereof. The Company shall at
      all
      times while the Plan is in force reserve such number of shares of Common Stock
      as will be sufficient to satisfy the requirements of all outstanding Options
      and
      Stock Appreciation Rights granted and Restricted Stock and Restricted Stock
      Units awarded under the Plan. In the event any Option or Stock Appreciation
      Right granted under the Plan shall expire or terminate for any reason without
      having been exercised in full or shall cease for any reason to be exercisable
      in
      whole or in part, or an Award of Restricted Stock or Restricted Stock Units
      shall terminate without fully vesting for any reason, the un-purchased or
      unvested shares subject thereto shall again be available for Options, Stock
      Appreciation Rights and Awards of Restricted Stock or Restricted Stock Units
      under the Plan. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    4.
      Participation.
      The
      class of individual or entity that shall be eligible to receive Options, Stock
      Appreciation Rights, Restricted Stock or Restricted Stock Units under the Plan
      shall be (a) with respect to Incentive Stock Options described in Section 6
      hereof, all employees (including officers) of either the Company or any
      subsidiary corporation of the Company, and (b) with respect to Nonstatutory
      Stock Options, Stock Appreciation Rights, Restricted Stock and Restricted Stock
      Units described in Sections 7, 12 and 13 hereof, all employees (including
      officers) and non-employee Directors of, or consultants and advisors to, either
      the Company or any subsidiary corporation of the Company; provided, however,
      that no Awards shall be made to any such consultants and advisors unless (i)
      bona fide
      services
      have been or are to be rendered by such consultant or advisor and (ii) such
      services are not in connection with the offer or sale of securities in a capital
      raising transaction. For purposes of the Plan, for an entity to be an eligible
      entity, it must be included in the definition of “employee” for purposes of a
      Form S-8 Registration Statement filed under the Securities Act of 1933, as
      amended (the “Act”). The Board of Directors or the Committee, in its sole
      discretion, but subject to the provisions of the Plan, shall determine the
      employees and non-employee Directors of, and the consultants and advisors to,
      the Company and its subsidiary corporations to whom Awards shall be made, the
      type of Award to be made and the number of shares of Common Stock, if any to
      be
      covered by each Award, taking into account the nature of the employment or
      services rendered by the individuals or entities being considered, their annual
      compensation, their present and potential contributions to the success of the
      Company, and such other factors as the Board of Directors or the Committee
      may
      deem relevant. No person shall be granted (i) an Option to purchase more than
      100,000 shares of Common Stock (subject to any adjustments pursuant to Section
      15 hereof and the provisions of Section 16(a) hereof), (ii) an SAR to purchase
      more than 100,000 shares of Common Stock (subject to any adjustments pursuant
      to
      Section 15 hereof and the provisions of Section 16(a) hereof) or (iii)
      Restricted Stock Awards or Restricted Stock Unit Awards covering more than
      100,000 shares of Common Stock (subject to any adjustments pursuant to Section
      15 hereof and the provisions of Section 16(a) hereof) (in each case, if such
      Option, SAR or Award constitutes performance based compensation within the
      meaning of 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”))
      during any calendar year of the Company. 

    

    5.
      Stock
      Option Agreement.
      Each
      Option granted under the Plan shall be authorized by the Board of Directors
      or
      the Committee, and shall be evidenced by a Stock Option Agreement which shall
      be
      executed by the Company and by the individual or entity to whom such Option
      is
      granted. The Stock Option Agreement shall specify the number of shares of Common
      Stock as to which any Option is granted, the period during which the Option
      is
      exercisable, the exercise price per share thereof, and such other terms and
      provisions not inconsistent with this Plan. 

     

    6.
      Incentive
      Stock Options.
      The
      Board of Directors or the Committee may grant Options under the Plan, which
      Options are intended to meet the requirements of Section 422 of the Internal
      Revenue Code of 1986, as amended (the “Code”), and which are subject to the
      following terms and conditions and any other terms and conditions as may at
      any
      time be required by Section 422 of the Code (referred to herein as an “Incentive
      Stock Option”): 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

       

    

    (a)
      No
      Incentive Stock Option shall be granted to individuals other than employees
      of
      the Company or of a subsidiary corporation of the Company. 

     

    (b)
      Each
      Incentive Stock Option under the Plan must be granted prior to the date which
      is
      ten (10) years from the date the Plan initially was adopted by the Board of
      Directors of the Company. 

     

    (c)
      The
      exercise price of the shares of Common Stock subject to any Incentive Stock
      Option shall not be less than the fair market value of the Common Stock at
      the
      time such Incentive Stock Option is granted; provided, however, if an Incentive
      Stock Option is granted to an individual who owns, at the time the Incentive
      Stock Option is granted, more than ten percent (10%) of the total combined
      voting power of all classes of stock of the Company or of a parent or subsidiary
      corporation of the Company (a “Principal Stockholder”), the exercise price of
      the shares subject to the Incentive Stock Option shall be at least one hundred
      ten percent (110%) of the fair market value of the Common Stock at the time
      the
      Incentive Stock Option is granted. 

     

    (d)
      No
      Incentive Stock Option granted under the Plan shall be exercisable after the
      expiration of ten (10) years from the date of its grant. However, if an
      Incentive Stock Option is granted to a Principal Stockholder, such Incentive
      Stock Option shall not be exercisable after the expiration of five (5) years
      from the date of its grant. Every Incentive Stock Option granted under the
      Plan
      shall be subject to earlier termination as expressly provided in Section 14
      hereof. 

     

    (e)
      For
      purposes of determining stock ownership under this Section 6, the attribution
      rules of Section 424(d) of the Code shall apply. 

     

    (f)
      For
      purposes of the Plan, and except as otherwise provided herein, fair market
      value
      shall be determined by the Board of Directors or the Committee. If the Common
      Stock is listed on a national securities exchange or traded on the
      over-the-counter market, fair market value shall be the last sale price or,
      if
      not available, the closing bid price or, if not available, the high bid price
      of
      the Common Stock quoted on such exchange, or on the over-the-counter market
      as
      reported by The Nasdaq Stock Market (“Nasdaq”) or if the Common Stock is not
      listed on Nasdaq, then by the National Quotation Bureau, Incorporated, as the
      case may be, on the day immediately preceding the day on which the Option is
      granted or exercised, as the case may be, or, if there is no last sale or bid
      price on that day, the last sale price, closing bid price or high bid price
      on
      the most recent day which precedes that day and for which such prices are
      available. 

     

    7.
      Nonstatutory
      Stock Options.
      The
      Board of Directors or the Committee may grant Options under the Plan which
      are
      not intended to meet the requirements of Section 422 of the Code, as well as
      Options which are intended to meet the requirements of Section 422 of the Code
      but the terms of which provide that they will not be treated as Incentive Stock
      Options (referred to herein as a “Nonstatutory Stock Options”). Nonstatutory
      Stock Options which are not intended to meet those requirements shall be subject
      to the following terms and conditions: 

     

    
      
         

      

      
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    (a)
      A
      Nonstatutory Stock Option may be granted to any individual or entity eligible
      to
      receive an Option under the Plan pursuant to Section 4(b) hereof. 

     

    (b)
      The
      exercise price of the shares of Common Stock subject to a Nonstatutory Stock
      Option shall be not less than the fair market value of the Common Stock at
      the
      time such Nonstatutory Stock Option is granted. 

     

    (c)
      A
      Nonstatutory Stock Option granted under the Plan may be of such duration as
      shall be determined by the Board of Directors or the Committee (subject to
      earlier termination as expressly provided in Section 14 hereof). 

     

    8.
      Reload
      Feature.
      The
      Board of Directors or the Committee may grant Options with a reload feature.
      A
      reload feature shall only apply when the exercise price is paid by delivery
      of
      Common Stock (as set forth in Section 10(b)(ii)). The Stock Option Agreement
      for
      the Options containing the reload feature shall provide that the Option holder
      shall receive, contemporaneously with the payment of the exercise price in
      shares of Common Stock, a reload stock option (the “Reload Option”) to purchase
      that number of shares of Common Stock equal to the sum of (i) the number of
      shares of Common Stock used to exercise the Option, and (ii) with respect to
      Nonstatutory Stock Options, the number of shares of Common Stock used to satisfy
      any tax withholding requirement incident to the exercise of such Nonstatutory
      Stock Option. The terms of the Plan applicable to the Option shall be equally
      applicable to the Reload Option with the following exceptions: (i) the exercise
      price per share of Common Stock deliverable upon the exercise of the Reload
      Option, (A) in the case of a Reload Option which is an Incentive Stock Option
      being granted to a Principal Stockholder, shall be one hundred ten percent
      (110%) of the fair market value of a share of Common Stock on the date of grant
      of the Reload Option and (B) in the case of a Reload Option which is an
      Incentive Stock Option being granted to a person other than a Principal
      Stockholder or is a Nonstatutory Stock Option, shall be the fair market value
      of
      a share of Common Stock on the date of grant of the Reload Option; and (ii)
      the
      term of the Reload Option shall be equal to the remaining option term of the
      Option (including a Reload Option) which gave rise to the Reload Option. The
      Reload Option shall be evidenced by an appropriate amendment to the Stock Option
      Agreement for the Option which gave rise to the Reload Option. In the event
      the
      exercise price of an Option containing a reload feature is paid by check and
      not
      in shares of Common Stock, the reload feature shall have no application with
      respect to such exercise. 

     

    9.
      Rights
      of Option Holders.
      The
      holder of any Option granted under the Plan shall have none of the rights of
      a
      stockholder with respect to the stock covered by his Option until such stock
      shall be transferred to him upon the exercise of his Option. 

     

    
      
         

      

      
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    10.
      Exercise
      of Options.
      

     

    (a)
      Unless otherwise provided in the Agreement, any Option granted under the Plan
      shall be exercisable in whole at any time, or in part from time to time, prior
      to expiration. The Board of Directors or the Committee, in its absolute
      discretion, may provide in any Stock Option Agreement that the exercise of
      any
      Options granted under the Plan shall be subject (i) to such condition or
      conditions as it may impose, including, but not limited to, a condition that
      the
      holder thereof remain in the employ or service of, or continue to provide
      consulting or advisory services to, the Company or a subsidiary corporation
      of
      the Company for such period or periods from the date of grant of the Option
      as
      the Board of Directors or the Committee, in its absolute discretion, shall
      determine; and (ii) to such limitations as it may impose, including, but not
      limited to, a limitation that the aggregate fair market value of the Common
      Stock with respect to which Incentive Stock Options are exercisable for the
      first time by any employee during any calendar year (under all plans of the
      Company and its parent and subsidiary corporations) shall not exceed one hundred
      thousand dollars ($100,000). In addition, in the event that under any Stock
      Option Agreement the aggregate fair market value of the Common Stock with
      respect to which Incentive Stock Options are exercisable for the first time
      by
      any employee during any calendar year (under all plans of the Company and its
      parent and subsidiary corporations) exceeds one hundred thousand dollars
      ($100,000), the Board of Directors or the Committee may, when shares are
      transferred upon exercise of such Options, designate those shares which shall
      be
      treated as transferred upon exercise of an Incentive Stock Option and those
      shares which shall be treated as transferred upon exercise of a Nonstatutory
      Stock Option. 

     

    (b)
      An
      Option granted under the Plan shall be exercised by the delivery by the holder
      thereof to the Company at its principal office (attention of the Secretary)
      of
      written notice of the number of shares with respect to which the Option is
      being
      exercised. Such notice shall be accompanied, or followed within three (3) days
      of delivery thereof, by payment of the full exercise price of such shares,
      and
      payment of such exercise price shall be made by the holder’s delivery of (i) his
      check payable to the order of the Company, (ii) previously acquired Common
      Stock, the fair market value of which shall be determined as of the date of
      exercise, (iii) by “cash-less” exercise, if cash-less exercise is otherwise
      permitted by the Stock Option Agreement, or (iv) by the holder’s delivery of any
      combination of the foregoing (i), (ii) and (iii). 

    

    11.
      Transferability.
      No
      Option granted under the Plan shall be transferable by the individual or entity
      to whom it was granted otherwise than by will or the laws of descent and
      distribution, and, during the lifetime of such individual, shall not be
      exercisable by any other person, but only by him. 

    

    12.
      Stock
      Appreciation Rights.
      

     

    (a)
      Stock
      appreciation rights (“Stock Appreciation Rights” or “SARs”) may be granted to
      participants in the Plan from time to time either in tandem with or as a
      component of other Awards granted under the Plan (“tandem SARs”) or not in
      conjunction with other Awards (“freestanding SARs”) and may, but need not,
      relate to a specific Option granted under the Plan. The provisions of Stock
      Appreciation Rights need not be the same with respect to each grant or each
      recipient. Any Stock Appreciation Right granted in tandem with an Award may
      be
      granted at the same time such Award is granted or at any time thereafter before
      exercise or expiration of such Award. All freestanding SARs shall be granted
      subject to the same terms and conditions set forth in this Plan as are
      applicable to Options and all tandem SARs shall have the same exercise price,
      vesting, exercisability, forfeiture and termination provisions as the Award
      to
      which they relate.

     

    
      
         

      

      
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    (b)
      Each
      SAR granted under the Plan shall be authorized by the Board of Directors or
      the
      Committee, and shall be evidenced by an SAR Agreement which shall be executed
      by
      the Company and by the individual or entity to whom such SAR is granted. The
      SAR
      Agreement shall specify the period during which the SAR is exercisable, and
      such
      other terms and provisions not inconsistent with the Plan. 

     

    (c)
      A
      tandem SAR may be exercised only if and to the extent that its related Option
      is
      eligible to be exercised on the date of exercise of the SAR. A freestanding
      SAR
      may be exercised at any time in accordance with the terms of the Award. To
      the
      extent that a holder of an SAR has a current right to exercise, the SAR may
      be
      exercised from time to time by delivery by the holder thereof to the Company
      at
      its principal office (attention: Secretary) of a written notice of the number
      of
      shares with respect to which it is being exercised. Such notice shall be
      accompanied by the agreements evidencing the SAR and, in the case of a tandem
      SAR, the related Option. In the event the SAR shall not be exercised in full,
      the Secretary of the Company shall endorse or cause to be endorsed on the SAR
      Agreement and, in the case of a tandem SAR, the related Option Agreement the
      number of shares which have been exercised thereunder and the number of shares
      that remain exercisable under the SAR and, and in the case of a tandem SAR,
      the
      related Option and return such SAR and, in the case of a tandem SAR, related
      Option to the holder thereof. 

     

    (d)
      The
      amount of payment to which an optionee shall be entitled upon the exercise
      of
      each SAR shall be equal to one hundred percent (100%) of the amount, if any,
      by
      which the fair market value of a share of Common Stock on the exercise date
      exceeds the exercise price per share of a related Option; provided, however,
      the
      Company may, in its sole discretion, withhold from any such cash payment any
      amount necessary to satisfy the Company’s obligation for withholding taxes with
      respect to such payment. 

     

    (e)
      The
      amount payable by the Company to an optionee upon exercise of an SAR may, in
      the
      sole determination of the Company, be paid in shares of Common Stock, cash
      or a
      combination thereof, as set forth in the SAR Agreement. In the case of a payment
      in shares, the number of shares of Common Stock to be paid to an optionee upon
      such optionee’s exercise of an SAR shall be determined by dividing the amount of
      payment determined pursuant to Section 12(d) hereof by the fair market value
      of
      a share of Common Stock on the exercise date of such SAR. For purposes of the
      Plan, the exercise date of an SAR shall be the date the Company receives written
      notification from the optionee of the exercise of the SAR in accordance with
      the
      provisions of Section 12(c) hereof. As soon as practicable after exercise,
      the
      Company shall either deliver to the optionee the amount of cash due such
      optionee or a certificate or certificates for such shares of Common Stock.
      All
      such shares shall be issued with the rights and restrictions specified herein.
      

     

    (f)
      The
      exercise of any tandem SAR shall cancel and terminate the right to purchase
      an
      equal number of shares covered by the related Option. 

     

    (g)
      Upon
      the exercise or termination of any related Option, the tandem SAR with respect
      to such related Option shall terminate to the extent of the number of shares
      of
      Common Stock as to which the related Option was exercised or terminated.

     

    
      
         

      

      
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    (h)
      An
      SAR granted pursuant to the Plan shall be exercisable only by the optionee
      hereof during the optionee’s lifetime and, subject to the provisions the
      Plan.

     

    (i)
      An
      SAR granted pursuant to the Plan shall not be assigned, transferred, pledged
      or
      hypothecated in any way (whether by operation of law or otherwise) and shall
      not
      be subject to execution, attachment, or similar process. Any attempted transfer,
      assignment, pledge, hypothecation, or other disposition of any SAR or of any
      rights granted thereunder contrary to the foregoing provisions of this Section
      12(i), or the levy of any attachment or similar process upon an SAR or such
      rights, shall be null and void. 

     

    13.
      Restricted
      Stock

    

    (a) 
      Restricted Stock and Restricted Stock Units may be granted at any time and
      from
      time to time prior to the termination of the Plan. As used herein, “Restricted
      Stock” is defined as an award or issuance of shares of Common Stock the grant,
      issuance, retention, vesting and/or transferability of which is subject during
      specified periods of time to such conditions (including continued employment
      or
      performance conditions) and terms as the Board of Directors or Committee deems
      appropriate and “Restricted Stock Units” are defined as Awards pursuant to which
      shares of Common Stock or cash in lieu thereof may be issued in the future.
      Each
      grant of Restricted Stock and Restricted Stock Units shall be evidenced by
      a
      Restricted Stock Agreement. Unless determined otherwise by the Board of
      Directors or the Committee, each Restricted Stock Unit will be equal to one
      share of Common Stock and will entitle a participant to either the issuance
      of
      Shares or payment of an amount of cash determined with reference to the value
      of
      shares of Common Stock. To the extent determined by the Board of Directors
      or
      Committee, Restricted Stock and Restricted Stock Unit Awards may be satisfied
      or
      settled in shares of Common Stock, cash or a combination thereof. Restricted
      Stock and Restricted Stock Units granted pursuant to the Plan need not be
      identical but each grant of Restricted Stock and Restricted Stock Units must
      contain and be subject to the terms and conditions set forth below.

    

    (b) 
      Each Restricted Stock Agreement shall contain provisions regarding (i) the
      number of shares of Restricted Stock or Restricted Stock Units subject to such
      Award or a formula for determining such number, (ii) the purchase price of
      the shares of Restricted Stock, if any, and the means of payment, (iii) the
      performance criteria, if any, and level of achievement versus these criteria
      that shall determine the number of shares of Restricted Stock or Restricted
      Stock Units granted, issued, retainable and/or vested, (iv) such terms and
      conditions on the grant, issuance, vesting and/or forfeiture of the shares
      of
      Restricted Stock or Restricted Stock Units as may be determined from time to
      time by the Board of Directors or Committee, (v) the term of the
      performance period, if any, as to which performance will be measured for
      determining the number of such shares of Common Stock, and
      (vi) restrictions on the transferability of the shares of Common Stock or
      Restricted Stock Units. Shares of Common Stock issued under a Restricted Stock
      Award may be issued in the name of the participant and held by the participant
      or held by the Company, in each case as the Board of Directors or Committee
      may
      provide. 

    

    (c) 
      The grant, issuance, retention, vesting and/or settlement of shares of
      Restricted Stock and Restricted Stock Units will occur when and in such
      installments as the Board of Directors or Committee determines or under criteria
      the Board of Directors or Committee establishes. The Board of Directors or
      Committee may provide that no restriction or limitation on grant, issuance,
      retention, vesting and/or settlement will apply in the case of a Restricted
      Stock Award that is issued in payment or settlement of compensation that has
      been earned by the participant. 

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

       

    

    (d) 
      Unless otherwise determined by the Board of Directors or Committee, participants
      holding shares of Restricted Stock granted hereunder may exercise full voting
      rights with respect to those shares during the period of restriction.
      Participants shall have no voting rights with respect to shares of Restricted
      Stock or shares of Common Stock underlying Restricted Stock Units unless and
      until such shares are reflected as issued and outstanding shares on the
      Company’s stock ledger.

    

    (e) 
      Participants holding shares of Restricted Stock shall be entitled to receive
      all
      dividends and other distributions paid with respect to those shares of Common
      Stock, unless determined otherwise by the Board of Directors or Committee.
      The
      Board of Directors or Committee will determine whether any such dividends or
      distributions will be automatically reinvested in additional shares of
      Restricted Stock and subject to the same restrictions on transferability as
      the
      Restricted Stock with respect to which they were distributed or whether such
      dividends will be paid in cash.

    

    (f)
      The
      Board of Directors or the Committee shall have the right to accelerate vesting
      of any Restricted Stock awarded under the Plan. 

     

    14.
      Termination
      of Employment.
      

     

    (a)
      Subject to the terms of the Stock Option Agreement and/or SAR Agreement or
      Restricted Stock Agreement, if the employment of an employee by, or the services
      of a non-employee Director for, or consultant or advisor to, the Company or
      a
      subsidiary corporation of the Company shall be terminated for any reason, then
      the non-vested portion of his or its Award shall expire forthwith. Subject
      to
      the terms of the Stock Option Agreement and/or SAR Agreement, and except as
      provided in subsections (b) and (c) of this Section 14, if such employment
      or
      services shall terminate for any reason, then an Option and/or SAR may be
      exercised at any time within three (3) months after such termination, subject
      to
      the provisions of subsection (e) of this Section 14. For purposes of this
      subsection (a), an employee, non-employee Director, consultant or advisor who
      leaves the employ or services of the Company to become an employee or
      non-employee Director of, or a consultant or advisor to, a subsidiary
      corporation of the Company or a corporation (or subsidiary or parent corporation
      of the corporation) which has assumed the Awards of the Company as a result
      of a
      corporate reorganization or the like shall not be considered to have terminated
      his employment or services. 

     

    (b)
      Subject to the terms of the Stock Option Agreement and/or SAR Agreement, if
      the
      holder of an Option and/or SAR under the Plan dies (i) while employed by, or
      while serving as a non-employee Director of or a consultant or advisor to,
      the
      Company or a subsidiary corporation of the Company, or (ii) within three (3)
      months after the termination of his employment or services, then such Option
      and/or SAR may, subject to the provisions of subsection (e) of this Section
      14,
      be exercised by the estate of the employee or non-employee Director, consultant
      or advisor, or by a person who acquired the right to exercise such Option and/or
      SAR by bequest or inheritance or by reason of the death of such employee or
      non-employee Director, consultant or advisor at any time within one (1) year
      after such death. 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

       

    

    (c)
      Subject to the terms of the Stock Option Agreement and/or SAR Agreement, if
      the
      holder of an Option and/or SAR under the Plan ceases employment or services
      because of (i) permanent and total disability (within the meaning of Section
      22(e)(3) of the Code) while employed by, or while serving as a non-employee
      Director for or consultant or advisor to, the Company or a subsidiary
      corporation of the Company, or (ii) retirement pursuant to a pension or
      retirement plan adopted by the Company or at the normal retirement date
      prescribed from time to time by the Company, then such Option and/or SAR may,
      subject to the provisions of subsection (e) of this Section 14, be exercised
      at
      any time within one (1) year after his termination of employment, termination
      of
      Directorship or termination of consulting or advisory services, as the case
      may
      be, due to the disability or retirement. 

    

    (d)
      Any
      vested Awards of Restricted Stock and Restricted Stock Units shall be settled
      within a reasonable time after termination of employment or
      service.

     

    (e)
      An
      Award may not be exercised or settled pursuant to this Section 14 except to
      the
      extent that the holder was entitled to exercise the Award at the time of
      termination of employment, termination of Directorship, termination of
      consulting or advisory services, or death, and in any event may not be exercised
      after the expiration of the Award. 

     

    (f)
      For
      purposes of this Section 14, the employment relationship of an employee of
      the
      Company or of a subsidiary corporation of the Company will be treated as
      continuing intact while he is on military or sick leave or other bona fide
      leave
      of absence (such as temporary employment by the Government) if such leave does
      not exceed ninety (90) days, or, if longer, so long as his right to reemployment
      is guaranteed either by statute or by contract. 

     

    15.
      Adjustment
      Upon Change in Capitalization.
      

     

    (a)
      In
      the event that the outstanding Common Stock is hereafter changed by reason
      of
      reorganization, merger, consolidation, recapitalization, reclassification,
      stock
      split-up, combination of shares, reverse split, stock dividend or the like,
      an
      appropriate adjustment shall be made by the Board of Directors or the Committee
      in the aggregate number of shares available under the Plan, in the number of
      shares and exercise price per share subject to outstanding Awards and in any
      limitation on exercisability referred to in Section 10(a)(ii) hereof which
      is
      set forth in outstanding Incentive Stock Options. If the Company shall be
      reorganized, consolidated, or merged with another corporation, the holder of
      an
      Option, SAR or Award of Restricted Stock Units shall be entitled to receive
      upon
      the exercise of his Option, SAR or settlement of his Award of Restricted Stock
      Units the same number and kind of shares of stock or the same amount of
      property, cash or securities as he would have been entitled to receive upon
      the
      happening of any such corporate event as if he had been, immediately prior
      to
      such event, the holder of the number of shares covered by his Option, SAR or
      Award of Restricted Stock Units; provided, however, that in such event the
      Board
      of Directors or the Committee shall have the discretionary power to take any
      action necessary or appropriate to prevent any Incentive Stock Option granted
      hereunder which is intended to be an “incentive stock option” from being
      disqualified as such under the then existing provisions of the Code or any
      amendment thereto. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

       

    

    (b)
      Any
      adjustment in the number of shares shall apply proportionately to only the
      unexercised portion of the Option, SAR or Award of Restricted Stock Units
      granted hereunder. If fractions of a share would result from any such
      adjustment, the adjustment shall be revised to the next lower whole number
      of
      shares. 

    

    16.
      Performance-Based
      Awards.
      

    

    (a)
      The
      Board of Directors or the Committee shall determine in its sole discretion
      whether all or any portion of an Award shall be intended to satisfy the
      requirements for “performance-based compensation” under Section 162(m) of
      the Code (the “162(m) Requirements”). The performance criteria for any Award
      that is intended to satisfy the 162(m) Requirements shall be established in
      writing by the Committee based on one or more performance goals as set forth
      in
      Section 16(b) hereof not later than 90 days after commencement of the
      performance period with respect to such Award, provided that the outcome of
      the
      performance in respect of the goals remains substantially uncertain as of such
      time. The maximum number of shares of Common Stock that may be awarded to any
      participant during any calendar year pursuant to any Award that is intended
      to
      satisfy the 162(m) Requirements is 100,000 shares; provided, however, that
      such
      maximum number of shares with respect to an Award that provides for a
      performance period longer than one calendar year shall be the foregoing limit
      multiplied by the number of full calendar years
      in
      the performance period. At the time of the grant of an Award and to the extent
      permitted under Code Section 162(m) and regulations thereunder for an Award
      intended to satisfy the 162(m) Requirements, the Board of Directors or the
      Committee may provide for the manner in which the performance goals will be
      measured in light of specified corporate transactions, extraordinary events,
      accounting changes and other similar occurrences. 

    

    (b)
      The
      performance measure(s) to be used for purposes of an Award may be described
      in
      terms of objectives that are related to the individual participant or objectives
      that are Company-wide or related to a subsidiary, division, department, region,
      function or business unit of the Company in which the participant is employed
      or
      with respect to which the participant performs services, and may consist of
      one
      or more or any combination of the following criteria: (i) earnings or
      earnings per share (whether on a pre-tax, after-tax, operational or other
      basis), (ii) return on equity, (iii) return on assets or net assets,
      (iv) return on capital or invested capital and other related financial
      measures, (v) cash flow, (vi) revenues, (vii) income or operating
      income, (viii) expenses or expense levels, (ix) one or more operating
      ratios, (x) stock price, (xi) total stockholder return,
      (xii) market share, (xiii) operating profit, (xiv) profit margin,
      (xv) growth in production, (xvi) capital expenditures, (xvii) net
      borrowing, debt leverage levels, credit quality or debt ratings,
      (xviii) the accomplishment of mergers, acquisitions, dispositions, public
      offerings or similar extraordinary business transactions, (xix) net asset
      value per share, (xx) economic value added, (xxi) individual business
      objectives or (xxii) added reserves. The performance goals based on these
      performance measures may be made relative to the performance of other business
      entities. 

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

       

    

    17.
      Further
      Conditions of Exercise and Settlement.
      

     

    (a)
      Unless prior to the exercise of the Option and/or SAR or the settlement of
      any
      Award of Restricted Stock Units, the shares issuable upon such exercise have
      been registered with the Securities and Exchange Commission pursuant to the
      Act,
      the notice of exercise shall be accompanied by a representation or agreement
      of
      the person or estate exercising the Option and/or SAR or settling the Award
      of
      Restricted Stock Units to the Company to the effect that such shares are being
      acquired for investment purposes and not with a view to the distribution
      thereof, and such other documentation as may be required by the Company, unless
      in the opinion of counsel to the Company such representation, agreement or
      documentation is not necessary to comply with such Act. 

     

    (b)
      The
      Company shall not be obligated to deliver any Common Stock until it has been
      listed on each securities exchange or market on which the Common Stock may
      then
      be listed or until there has been qualification under or compliance with such
      federal or state laws, rules or regulations as the Company may deem applicable.
      

     

    18.
      Effectiveness
      of the Plan.
      The
      Plan was adopted on by the Board of Directors on July 31, 2003, and became
      effective on said date. The Plan was amended by the Board of Directors on June
      10, 2004. The Plan, as amended, was approved by the stockholders of the Company
      in accordance with the requirements of the Internal Revenue Code and the
      Delaware General Corporation Law on July 24, 2004. 

     

    19.
      Termination,
      Modification and Amendment.
      

     

    (a)
      The
      Plan (but not the Options, SARs or Restricted Stock Awards granted pursuant
      to
      the Plan) shall terminate on a date within ten (10) years from the date of
      its
      adoption by the Board of Directors of the Company, or sooner as hereinafter
      provided, and no Awards shall be granted after termination of the Plan.

     

    (b)
      The
      Board of Directors may at any time, on or before the termination date referred
      to in Section 19(a) hereof, terminate the Plan, or from time to time make such
      modifications or amendments to the Plan as it may deem advisable; provided,
      however, that the Board of Directors shall not, without approval by the
      affirmative vote of the holders of a majority of the outstanding shares of
      capital stock of the Company present at a meeting of shareholders and entitled
      to vote thereon (or, in the case of action by written consent, a majority of
      the
      outstanding shares of capital stock of the Company entitled to vote thereon),
      increase (except as otherwise provided by Section 15 hereof) the maximum number
      of shares as to which Incentive Stock Options may be granted hereunder, change
      the designation of the employees or class of employees eligible to receive
      Incentive Stock Options, or make any other change which would prevent any
      Incentive Stock Option granted hereunder which is intended to be an “incentive
      stock option” from disqualifying as such under the then existing provisions of
      the Code or any law amendatory thereof or supplemental thereto. 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

       

    

    (c)
      No
      termination, modification, or amendment of the Plan may, without the consent
      of
      the individual or entity to whom any Award shall have been granted, adversely
      affect the rights conferred by such Award. 

     

    20.
      Not
      a Contract of Employment.
      Nothing
      contained in the Plan or in any Award Agreement executed pursuant hereto shall
      be deemed to confer upon any individual or entity to whom an Award is or may
      be
      granted hereunder any right to remain in the employ or service of the Company
      or
      a subsidiary corporation of the Company or any entitlement to any remuneration
      or other benefit pursuant to any consulting or advisory arrangement.

     

    21.
      Rule
      16b-3.
      During
      any time when the Company has a class of equity security registered under
      Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”), it is the intent of the Company that grants of Awards pursuant to the
      Plan and the exercise of Options and SARs and settlement of Awards of Restricted
      Stock and Restricted Stock Units granted hereunder will qualify for the
      exemption provided by Rule 16b-3 under the Exchange Act. To the extent that
      any
      provision of the Plan or action by the Board of Directors or Committee does
      not
      comply with the requirements of Rule 16b-3, it shall be deemed inoperative
      to
      the extent permitted by law and deemed advisable by the Board, and shall not
      affect the validity of the Plan. In the event that Rule 16b-3 is revised or
      replaced, the Board of Directors or Committee may exercise its discretion to
      modify this Plan in any respect necessary to satisfy the requirements of, or
      to
      take advantage of any features of, the revised exemption or its replacement.
      

     

    22.
      Use
      of Proceeds.
      The
      proceeds from the sale of shares pursuant to Awards granted under the Plan
      shall
      constitute general funds of the Company. 

     

    23.
      Indemnification
      of Board of Directors or Committee.
      In
      addition to such other rights of indemnification as they may have, the members
      of the Board of Directors or the Committee, as the case may be, shall be
      indemnified by the Company to the extent permitted under applicable law against
      all costs and expenses reasonably incurred by them in connection with any
      action, suit, or proceeding 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 rights granted thereunder and against all amounts paid by them
      in
      settlement thereof or paid by them in satisfaction of a judgment of any such
      action, suit or proceeding, except a judgment based upon a finding of bad faith.
      Upon the institution of any such action, suit, or proceeding, the member or
      members of the Board of Directors or the Committee, as the case may be, shall
      notify the Company in writing, giving the Company an opportunity at its own
      cost
      to defend the same before such member or members undertake to defend the same
      on
      his or their own behalf. 

     

    24.
      Definitions.
      For
      purposes of the Plan, the terms “parent corporation” and “subsidiary
      corporation” shall have the meanings set forth in Sections 424(e) and 424(f) of
      the Code, respectively, and the masculine shall include the feminine and the
      neuter as the context requires. 

     

    25.
      Governing
      Law.
      The
      Plan shall be governed by, and all questions arising hereunder shall be
      determined in accordance with, the laws of the State of Delaware. 

     

    
      
         

      

      
        12

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