Document:

Exhibit 10.12

 

EQUINOX
HOLDINGS, INC.

1998 STOCK
OPTION PLAN

 

1.                    PURPOSE

 

The purpose of the EQUINOX
HOLDING, INC. 1998 STOCK OPTION PLAN (the “Plan”) is (i) to further the
growth and success of Equinox Holdings, Inc., a Delaware corporation (the “Company”),
and its Subsidiaries (as hereinafter defined) by enabling directors, officers,
employees, consultants, or advisors of the Company or any of its Subsidiaries
to acquire shares of common stock, $.01 par value (the “Common Stock”), of the
Company, thereby increasing their personal interest in such growth and success,
and (ii) to provide a means of rewarding outstanding performance by such
persons to the Company and its Subsidiaries.

 

Options granted under the
Plan may be either “incentive stock options” (“ISOs”), intended to qualify as
such under the provisions of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), or nonqualified stock options (“NSOs”). For
purposes of the Plan, the term “Subsidiary” shall mean “Subsidiary Corporation”
as such term is defined in Section 424(f) of the Code. Unless the
context otherwise requires, any ISO or NSO shall be referred to as an “Option”.

 

2.                    ADMINISTRATION OF THE PLAN.

 

(a)          Stock Option Committee.

 

The Plan shall be
administered by the Board of Directors of the Company (the “Board”) or an
Option Committee (the “Committee”) consisting of two or more persons appointed
to such Committee from time to time by the Board; provided, however, that (i) to
the extent necessary in order to permit officers and directors of the Company
to be exempt from the provisions of Section 16(b) of the 1934 Act
with respect to transactions pursuant to the Plan, each of such persons shall
be a “Non-Employee Director” within the meaning of Rule 16b-3 (“Rule 16b-3”)
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the “1934 Act”) and (ii) if such
qualification is deemed necessary in order for the grant or exercise of awards
made under the Plan to qualify for any tax or other material benefit to
participants of the Company under applicable regulations under Section 162(m)
of the Code, each of such persons shall be an “outside director” (as defined in
applicable regulations thereunder). The members of the Committee may be removed
by the Board at any time either with or without cause. Any vacancy on the
Committee, whether due to action of the Board or any other cause, shall be
filled by the Board. The term “Committee” shall, for all purposes of the Plan
other than this Section 2, be
deemed to refer to the Board if the Board is administering the Plan.

 

(b)         Procedures.

 

If the Plan is administered
by a Committee, the Committee shall from time to time select a Chairman from
among its members and shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of meetings and the administration of
the Plan. A majority of the entire Committee shall constitute a quorum and the
actions of a majority of the

 

 

members of the Committee present at a meeting at
which a quorum is present, or actions approved in writing by all of the members
of the Committee, shall be the actions of the Committee; provided, however, that if the Committee consists of only two members, both shall
be required to constitute a quorum and to act at a meeting or to approve
actions in writing,

 

(c)          Interpretations.

 

Except as otherwise
expressly provided in the Plan, the Committee shall have all powers with
respect to the administration of the Plan, including, without limitation, full power
and authority to interpret the provisions of the Plan and any Option Agreement
(as defined in Section 5(b), and to resolve all questions arising under
the Plan. All decisions of the Committee shall be conclusive and binding on all
participants in the Plan.

 

3.                    SHARES OF STOCK, SUBJECT TO THE PLAN.

 

(a)          Number of Shares.

 

Subject to the provisions of
Section 9 (relating to adjustments upon changes in capital structure and
other corporate transactions), the number of shares of Common Stock subject at
any one time to Options granted under the Plan, plus the number of shares of
Common Stock theretofore issued and delivered pursuant to the exercise of
Options granted under the Plan, shall not exceed 1,000,000 shares. If and to
the extent that Options granted under the Plan terminate, expire or are
canceled without having been fully exercised, new Options may be granted under
the Plan with respect to the shares of Common Stock covered by the unexercised
portion of such terminated, expired or canceled Options.

 

(b)         Reservation of Shares

 

The number of shares of
Common Stock reserved for issuance under the Plan shall at no time be less than
the maximum number of shares which may be purchased at any time pursuant to
outstanding Options.

 

4.                    ELIGIBILITY.

 

(a)          General.

 

Options may be granted by
the Committee under the Plan only to persons who are (i) directors,
officers or employees of the Company or any of its Subsidiaries and (ii) consultants
or advisors providing services to the Company or any of its Subsidiaries.
Options granted to employees of the Company or any of its Subsidiaries shall
be, in the discretion of the Committee, either ISOs or NSOs, and all other
Options shall be NSOs.  Notwithstanding
the foregoing, Options maybe conditionally granted to persons who are
prospective directors, officers, or employees of the Company or any of its
Subsidiaries; provided, however, that any such conditional grant of
an ISO to a prospective employee shall, by its terms, become effective no
earlier than the date on which such person actually becomes an employee.

 

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(b)         Exceptions.

 

Notwithstanding anything
contained in Section 4(a) to the contrary, no ISO may be granted
under the Plan to an employee who owns, directly or indirectly (within the
meaning of Sections 422(b)(6) and 424(d) of the Code), stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, unless (A) the Option Price (as defined in Section 6(a))
of the shares of Common Stock subject to such ISO is fixed at not less than
110% of the Fair Market Value on the date of grant (as determined in accordance
with Section 6(b)) of such shares and (B) such ISO by its terms is
not exercisable after the expiration of five years from the date it is granted.

 

5.                    GRANT OF OPTIONS.

 

(a)          General.

 

Options may be granted under
the Plan at any time and from time to time after the Effective Date (as defined
in Section 11) and on or prior to the Expiration Date (as defined in Section 12).

 

Subject to the provisions of
the Plan, the Committee shall have authority, in its sole discretion, to
determine:

 

(i) the persons (from
among the class of persons eligible to receive Options under the Plan) to whom
Options shall be granted (the “Optionees”);

 

(ii) the time or times
at which Options shall be granted;

 

(iii) the number of
shares subject to each Option;

 

(iv) the Option Price
of the shares subject to each Option, which price shall be not less than the
minimum specified in Section 4(b) or 6(a) (as applicable); and

 

(v) the time or times
when each Option shall become exercisable and the duration of the exercise
period.

 

(b)         Option Agreements.

 

Each Option granted under
the Plan shall be designated as an ISO or an NSO and shall be subject to the
terms and conditions applicable to ISOs or NSOs (as the case may be) set forth
in the Plan; provided, however, that any Option deemed by the
Committee to be an ISO that for any reason does not qualify as an incentive
stock option under Section 422 of the Code shall be treated for all
purposes under the Plan as an NSO. In addition, each Option shall be evidenced
by a written agreement (an “Option Agreement”), containing such terms and
conditions and in such form, not inconsistent with the Plan, as the Committee
shall, in its discretion, provide. Each Option Agreement shall be executed by
the Company and the Optionee.

 

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(c)          No Evidence of Employment.

 

Nothing contained in the
Plan or in any Option Agreement shall confer upon any Optionee any right with
respect to the continuation of his or her employment or other relationship with
the Company or any of its Subsidiaries or interfere in any way with the right
of the Company or any such Subsidiary, subject to the terms of any separate
agreement to the contrary, at any time to terminate such relationship or to
increase or decrease the compensation of the Optionee from the rate in
existence at the time of the grant of an Option.

 

(d)         Date of Grant.

 

The date of grant of an
Option under this Plan shall be the date as of which the Committee approves the
grant; provided, however, that in the case of an ISO, the
date of grant shall in no event be earlier than the date as of which the
Optionee becomes an employee of the Company or one of its Subsidiaries.

 

6.                    OPTION PRICE.

 

(a)          General.

 

Subject to Section 9,
the price (the “Option Price”) at which each share of Common Stock subject to
an Option granted under the Plan may be purchased shall be determined by the
Committee at the time the Option is granted; provided,
however, that (i) in
the case of an ISO and not subject to Section 4(b) and (ii) in
the case of an NSO granted at any time after the initial public offering of the
Common Stock, such Option Price shall in no event be less than 100% of the Fair
Market Value (as determined in accordance with Section 6(b)) of such share
of Common Stock.

 

(b)         Determination of Fair Market Value.

 

Subject to the requirements
of Section 422 of the Code, for purposes of the Plan, the “Fair Market
Value” of shares of Common Stock shall be equal to the fair value of such
shares on the date of grant as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arms’ length if there is no public trading market.

 

Anything contained in the
Plan to the contrary notwithstanding, all such determinations shall be made
without regard to any restriction other than a restriction which, by its terms,
will never lapse.

 

(c)          Repricing of NSOs.

 

Subsequent to the date of
grant of any NSO, the Committee may, at its discretion and with the consent of
the Optionee, establish a new Option Price for such NSO so as to increase or
decrease the Option Price of such NSO.

 

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7.                    EXERCISE OF OPTIONS.

 

(a)          Committee Determination.

 

Each Option granted under
the Plan shall be exercisable at such time or times, or upon the occurrence of
such event or events, and for such number of shares subject to the Option, as
shall be determined by the Committee and set forth in the Option Agreement evidencing
such Option; provided, however, that if the Company files a
registration statement under the Securities Act of 1933 (the “Securities Act”)
for the initial public offering of its securities, no Option granted under the
Plan shall be exercisable during the 180-day period immediately following
the effective date of such registration statement. Subject to the proviso of the
immediately preceding sentence, if an Option is not at the time of grant
immediately exercisable, the Committee may (i) in the Option Agreement
evidencing such Option, provided for the acceleration of the exercise date or
dates of the subject Option upon the occurrence of specified events or (ii) at
any time prior to the complete termination of such Option, accelerate the
exercise date or dates of such Option.

 

(b)         Automatic Termination of Option.

 

Unless otherwise determined
by the Committee at the time of grant or, in the case of an NSO, thereafter,
the unexercised portion of any Option granted under the Plan shall
automatically terminate and shall become null and void and be of no further
force or effect upon the first to occur of the following:

 

(i) the tenth
anniversary of the date on which such Option is granted or, in the case of any
ISO granted to a person described in Section 4(b), the fifth anniversary
of the date on which such ISO is granted;

 

(ii) the expiration of
three months from the effective date of a Termination of Relationship (other
than as a result of an Involuntary Termination (as defined below) or for “Cause”
(as defined below)); provided, however, that if the Optionee shall die
during such three-month period, the time of termination of the unexercised
portion of such Option shall be determined in accordance with subparagraph (iii) below;

 

(iii) the expiration of
12 months from the date of a Termination of Relationship if such termination is
due to such Optionee’s death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) (an “Involuntary Termination”);

 

(iv) immediately upon a
Termination of Relationship if such Termination of Relationship is for “Cause”;

 

(v)  the expiration of
such period of time or the occurrence of such event as the Committee in its
discretion may provide in the Option Agreement;

 

(vi) the effective date
of a Corporate Transaction (as defined in Section 9(b)) to which Section 9(b)(ii) (relating
to assumptions and substitutions of Options) does not apply; provided, however, that an Optionee’s right to exercise any Option outstanding
prior to such effective date shall in all events be suspended during the period
commencing 5 days prior to the proposed effective date of such Corporate
Transaction and ending on either the actual effective date

 

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of such Corporate
Transaction or upon receipt of notice from the Company that such Corporate
Transaction will not in fact occur; and

 

(vii) except to the
extent permitted by Section 9(b)(ii), the date on which an Option or any
part thereof or right or privilege relating thereto is transferred (otherwise
than by will or the laws of descent and distribution), assigned, pledged,
hypothecated, attached or otherwise disposed of by the Optionee.

 

“Cause” shall have the
meaning set forth in any employment or services agreement between the Company
or any Subsidiary thereof and the Optionee, or in the absence of either of such
agreements or definition of Cause contained therein, as defined by the
Committee. Any determinations by the Committee shall be final and conclusive
and binding upon the Optionee.

 

“Termination of Relationship”
means the termination of the employment or other relationship between the
Company or any of its Subsidiaries and any Optionee for any reason whatsoever.

 

Anything contained in the
Plan to the contrary notwithstanding, unless otherwise provided in an Option
Agreement, no Option granted under the Plan shall be affected by any change of
duties or position of the Optionee (including a transfer to or from the Company
or one of its Subsidiaries), so long as it does not result in a Termination of
Relationship.

 

(c)          Limitations on ISOs.

 

To the extent that, at the
time any portion of an ISO granted under the Plan is to become exercisable, the
aggregate Option Price of such portion, when added to the aggregate fair market
value of all stock subject to incentive stock options granted by the Company or
its Subsidiaries before the date of grant of such ISO to the Optionee that have
become or will by their terms become exercisable during that same calendar
year, exceeds $100,000, such portion shall be deemed to be an NSO.

 

8.                    PROCEDURE FOR EXERCISE. 

 

(a)          Payment.

 

At the time an Option is
granted under the Plan, the Committee shall, in its discretion, specify
one or more of the following forms of payment which may be used by an Optionee
upon exercise of his Option:

 

(i) cash or personal or
certified check payable to the Company in an amount equal to the aggregate
Option Price of the shares with respect to which the Option is being exercised;

 

(ii) a full recourse
demand note, payable by the Optionee to the Company in an amount equal to the
aggregate Option Price of the shares with respect to which the Option is being
exercised and bearing a market rate of interest as determined by the Committee;

 

6

 

(iii)  stock
certificates (in negotiable form) representing shares of Common Stock having a
Fair Market Value on the date of exercise (as determined in accordance with Section 6(b) as
if the date of exercise were the date of grant) equal to the aggregate Option
Price of the shares with respect to which the Option is being exercised; or

 

(iv) a combination of
the methods set forth in clauses (i) and (ii).

 

(b)         Notice.

 

An Optionee (or other
person, as provided in Section 10(b)) may exercise an Option granted under
the Plan in whole or in part (but for the purchase of whole shares only), as
provided in the Option Agreement evidencing his or her Option, by delivering a
written notice (the “Notice”) to the Secretary of the Company. The Notice
shall:

 

(i) state that the
Optionee elects to exercise the Option;

 

(ii) state the number
of shares with respect to which the Option is being exercised (the “Optioned
Shares”);

 

(iii) state the method
of payment of the Optioned Shares (which method must be available to the
Optionee under the terms of his or her Option Agreement);

 

(iv) state the date
upon which the Optionee desires to consummate the purchase (which date must be
prior to the termination of such Option and no later than 30 days from the
delivery of such Notice);

 

(v) include any
representations of the Optionee required pursuant to Section 10(a);

 

(vi) if the Option is
exercised pursuant to Section 10(b) by any person other than the
Optionee, include evidence to the satisfaction of the Committee of the right of
such person to exercise the Option; and

 

(vii) include such further
provisions consistent with the Plan as the Committee may from time to time
require.

 

The exercise date of an
Option shall be the date on which the Company receives the Notice from the
Optionee.

 

Within 30 days of the
exercise of the Option, the Optionee shall deliver to the Company a copy of any
election filed by the Optionee with the Internal Revenue Service under Section 83(b) of
the Code.

 

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(c)          Issuance of Certificates.

 

The Company shall cause the
issuance of a stock certificate in the name of the Optionee (or such other
person exercising the Option in accordance with the provisions of Section 10(b))
for the Optioned Shares as soon as practicable after receipt of the Notice and
payment of the aggregate Option Price for such shares. Neither the Optionee nor
any person exercising an Option in accordance with the provisions of Section 10(b) shall
have any privileges as a stockholder of the Company with respect to any shares
of stock subject to an Option granted under the Plan until the date of issuance
of a stock certificate pursuant to this Section 8(c).

 

9.                    ADJUSTMENTS.

 

(a)          Changes in Capital Structure.

 

Subject to Section 9(b),
if the Common Stock is changed by reason of a stock split, reverse stock split,
stock dividend or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation or reorganization, the
Committee shall make such adjustments in the number and class of shares of
stock with respect to which Options may be granted under the Plan as shall be
equitable and appropriate in order to make such Options, as nearly as may be
practicable, equivalent to such Options immediately prior to such change. A
corresponding adjustment changing the number and class of shares allocated to,
and the Option Price of, each Option or portion thereof outstanding at the time
of such change shall likewise be made. Anything contained in the Plan to the contrary notwithstanding,
in the case of ISOs, no adjustment under this Section 9(a) shall be
appropriate if such adjustment (i) would constitute a modification,
extension or renewal of such ISOs within the meaning of Sections 422 and 424 of
the Code, and the regulations promulgated by the Treasury Department
thereunder, or (ii) would, under Section 422 of the Code and the
regulations promulgated by the Treasury Department thereunder, be considered
the adoption of a new plan requiring stockholder approval.

 

(b)         Corporate Transactions.

 

The following rules shall
apply in connection with the dissolution or liquidation of the Company a
reorganization, merger or consolidation of the Company (other than any such
transaction resulting in the stockholders of the Company prior to such
transaction owning a majority of the capital stock of the surviving entity
entitled to vote for the election of directors), or any sale of all or
substantially all assets of the Company (a “Corporate Transaction”):

 

(i) each holder of an
Option outstanding at such time shall be given (A) written notice of such
Corporate Transaction at least 20 days prior to its proposed effective date (as
specified in such notice) and (B) an opportunity, during the period
commencing with delivery of such notice and ending 10 days prior to such
proposed effective date, to exercise the Option to the full extent to which
such Option would have been exercisable by the Optionee at the expiration of
such 20-day period; provided, however, that upon the effective date of a
Corporate Transaction, all Options granted under the Plan not so exercised
shall automatically terminate; and

 

(ii) anything contained
in the Plan to the contrary notwithstanding, Section 9(b)(i) shall
not be applicable if provision shall be made in connection with such

 

8

 

Corporate Transaction for
the assumption of outstanding Options by, or the substitution for such Options
of new options covering the stock of, the surviving, successor or purchasing
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number, kind and option prices of shares subject to such options; provided, however, that in the case of ISOs, the Committee shall, to the extent
not inconsistent with the best interests of the Company or its Subsidiaries
(such best interests to be determined in good faith by the Committee in its
sole discretion), use its best efforts to ensure that any such assumption or
substitution will not constitute a modification, extension or renewal of the
ISOs within the meaning of Section 424(h) of the Code and the
regulations promulgated by the Treasury Department thereunder.

 

(c)          Special Rules.

 

The following rules shall
apply in connection with Section 9(a) and (b) above:

 

(i) no fractional
shares shall be issued as a result of any such adjustment, and any fractional
shares resulting from the computations pursuant to Section 9(a) or (b) shall
be eliminated without consideration from the respective Options;

 

(ii) no adjustment
shall be made for cash dividends or the issuance to stockholders of rights to
subscribe for additional shares of Common Stock or other securities; and

 

(iii) any adjustments
referred to in Section 9(a) or (b) shall be made by the
Committee in its sole discretion
and shall be conclusive and binding on all persons holding Options granted
under the Plan.

 

10.              RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.

 

(a)          Compliance With Securities Laws.

 

No Options shall be granted
under the Plan, and no shares of Common Stock shall be issued and delivered
upon the exercise of Options granted under the Plan, unless and until the
Company and the Optionee shall have complied with all applicable Federal or
state registration, listing and qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.

 

The Committee in its
discretion may, as a condition to the exercise of any Option granted under the
Plan, require an Optionee (i) to represent in writing that the shares of
Common Stock received upon exercise of an Option are being acquired for investment
and not with a view to distribution and (ii) to make such other
representations and warranties as are deemed appropriate by the Company. Stock
certificates representing shares of Common Stock acquired upon the exercise of
Options that have not been registered under the Securities Act shall, if
required by the Committee, bear the following legend:

 

“THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES

 

9

 

ACT OF 1933. THE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF
COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

 

THE SALE,
TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS’
AGREEMENT DATED AS OF DECEMBER 31, 1998, AMONG EQUINOX HOLDINGS, INC. AND
CERTAIN HOLDERS OF THE OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF SUCH CORPORATION.”

 

(b)         Nonassignability of
Option Rights.

 

No Option
granted under this Plan shall be assignable or otherwise transferable by the
Optionee except by will or by the laws of descent and distribution. An Option
may be exercised during the lifetime of the Optionee only by the Optionee. If
an Optionee dies, his or her Option shall thereafter be exercisable, during the
period specified in Section 7(b)(ii) or (iii) (as the case may
be), by his or her executors or administrators to the full extent to which such
Option was exercisable by the Optionee at the time of his or her death.

 

11.              EFFECTIVE DATE OF
PLAN.

 

This Plan
shall become effective on the date (the “Effective Date”) on which the
stockholders of the Company shall have approved the Plan.

 

12.              EXPIRATION AND
TERMINATION OF THE PLAN.

 

Except with
respect to Options then outstanding, the Plan shall expire on the date (the “Expiration
Date”) which is the first to occur of (i) the tenth anniversary of the
date on which the Plan is adopted by the Board, (ii) the tenth anniversary
of the Effective Date, and (iii) the date as of which the Board, in its
sole discretion, determines that the Plan shall terminate. Any Options
outstanding as of the Expiration Date shall remain in effect until they have
been exercised or terminated or have expired by their respective terms.

 

13.              AMENDMENT OF PLAN.

 

The Board may
at any time prior to the Expiration Date modify and amend the Plan in any
respect; provided, however, that the approval of the holders of
a majority of the votes

 

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that may be cast by all of the holders of shares of
Common Stock and preferred stock of the Company, if any, entitled to vote
(voting as a single class) shall be obtained prior to any such amendment
becoming effective if and to the extent such approval is required by law or the
rules of any stock exchange or automated quotation system upon which the
Common Stock is listed or quoted, or to ensure that ISOs will continue to
qualify as incentive stock options under Section 422 of the Code or the
regulations promulgated by the Treasury Department thereunder.

 

14.              CAPTIONS.

 

The use of captions in this
Plan is for convenience. The captions are not intended to provide substantive
rights.

 

15.              DISQUALIFYING DISPOSITIONS.

 

If Optioned Shares acquired
by exercise of an ISO granted under this Plan are disposed of within two years
following the date of grant of the ISO or one year following the transfer of
the Optioned Shares to the Optionee (a “Disqualifying Disposition”), the holder
of the Optioned Shares shall, immediately prior to such Disqualifying
Disposition, notify the Company in writing of the date and terms of such
Disqualifying Disposition and provide such other information regarding the
Disqualifying Disposition as the Company may reasonably require.

 

16.              WITHHOLDING TAXES.

 

Whenever under the Plan
shares of Common Stock are to be delivered by an Optionee upon exercise of an
NSO, the Company shall be entitled to require as a condition of delivery that
the Optionee remit or, in appropriate cases, agree to remit when due, an amount
sufficient to satisfy all current or estimated future Federal, state and local
withholding tax and employment or other tax requirements relating thereto. At
the time of a Disqualifying Disposition, the Optionee shall remit to the
Company in cash the amount of any applicable Federal, state and local
withholding taxes and employment or other tax requirements relating thereto.

 

17.              OTHER PROVISIONS.

 

Each Option granted under
the Plan may contain such other terms and conditions not inconsistent with the
Plan as may be determined by the Committee, in its sole discretion.
Notwithstanding the foregoing, each ISO granted under the Plan shall include
those terms and conditions which are necessary to qualify the ISO as an “incentive
stock option” within the meaning of Section 422 of the Code and the
regulations thereunder and shall not include any terms or conditions which are
inconsistent therewith.

 

18.              NUMBER AND GENDER.

 

With respect to words used
in this Plan, the singular form shall include the plural form, the masculine
gender shall include the feminine gender, and vice-versa, as the context
requires.

 

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19.              GOVERNING LAW.

 

The validity and construction
of this Plan and the instruments evidencing the Options granted hereunder shall
be governed by the laws of the State of Delaware.

 

This Plan was originally
approved by the Board and by the stockholders of the Company on December 31,
1998.

 

12Exhibit 10.13

 

EQUINOX HOLDINGS, INC.

2000 STOCK INCENTIVE PLAN

 

Section 1. 
Purpose

 

The
purpose of this Plan is to foster and promote the long-term financial success
of the Company Group and to materially increase shareholder value by (a) motivating
superior performance by participants in the Plan, (b) providing
participants in the Plan with an ownership interest in the Company and (c) enabling
the Company Group to attract and retain the services of an outstanding
management team upon whose judgment, interest and special effort the successful
conduct of its operations is largely dependent.

 

Section 2. 
Definitions

 

2.1                                 Definitions.  Whenever used herein, the following terms
shall have the meanings set forth below:

 

“Affiliate” means, with respect to any person,
any other person controlled by, controlling or under common control with, such
person.

 

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

 

“Cause” shall mean (i) the willful
failure of the Participant substantially to perform the duties of his or her
employment for any member of the Company Group (other than any such failure due
to the Participant’s physical or mental illness), (ii) the
Participant’s engaging in willful and serious misconduct that has caused or is
reasonably expected to result in injury to the Company or any of its
Affiliates, (iii) the Participant’s conviction of, or entering a
plea of guilty or nolo contendere to, a
crime that constitutes a felony or (iv) the material breach by the
Participant of any of his or her obligations hereunder or under any other
written agreement or covenant with the Company or any of its Affiliates;
provided that in the event that the Participant is employed by the Company or
any of its Affiliates under an effective employment agreement on the date such
Participant’s employment thereunder is terminated and such employment agreement
contains a different definition of Cause, the definition of Cause contained in
such employment agreement shall be substituted for the definition set forth
above for purposes of this Plan and any Option Agreement.

 

“Change of Control” means, with respect to the
Company, the first to occur after the date hereof of the following events:

 

(1) the
acquisition by any person, entity or “group” (as defined in section 13(d) of
the Exchange Act) (other than (x) any member of the Company Group, (y)
any employee benefit plan of any member of the Company Group

 

 

or (z) the North
Castle Fund or any Affiliate or partner thereof) through one transaction or a
series of related transactions of 50% or more of the combined voting power of
the then outstanding voting securities of the Company;

 

(2) the
merger or consolidation of the Company as a result of which persons who were
shareholders of the Company immediately prior to such merger or consolidation,
do not, immediately thereafter, own, directly or indirectly, more than 50% of
the combined voting power entitled to vote generally in the election of
directors of the merged or consolidated company;

 

(3) the
liquidation or dissolution of the Company (other than (x) a dissolution
occurring upon a merger or consolidation thereof; (y) a liquidation of the
Company into a Subsidiary; or (z) a liquidation or dissolution that is incident
to a reorganization); and

 

(4) the
sale, transfer or other disposition of all or substantially all of the assets
of the Company through one transaction or a series of related transactions to
one or more persons or entities that are not, immediately prior to such sale,
transfer or other disposition, Affiliates of the North Castle Fund.

 

“Change of Control Price” means the price per
share of Common Stock paid in conjunction with any transaction resulting in a
Change of Control (as determined in good faith by the Board if any part of such
price is payable other than in cash).

 

“Childs” means J.W. Childs Equity Partners II,
L.P., a Delaware limited partnership.

 

“Closing Date” shall have the same meaning as
set forth in the Purchase Agreement.

 

“Committee” means the Compensation Committee of
the Board (or such other committee of the Board which shall have jurisdiction
over the compensation of officers).

 

“Common Stock” means the common stock, par
value $0.01 per share, of the Company.

 

“Company” means Equinox Holdings, Inc., a
Delaware corporation.

 

“Company Group” means the Company and its
Subsidiaries.

 

“Disability” means a physical or mental
disability that prevents or is reasonably expected to prevent the performance
of the Participant’s

 

2

 

employment-related duties for a continuous period of
90 days or longer or for 180 days or more in any 12-month period; provided that
in the event that the Participant is employed by the Company or any of its
Affiliates under an effective employment agreement on the date such Participant’s
employment thereunder is terminated and such employment agreement contains a
different definition of Disability, the definition of Disability contained in
such employment agreement shall be substituted for the definition set forth
above for purposes of this Plan and any Option Agreement.

 

“Effective Date” means December 15, 2000.

 

“Employee” means any executive officer or other
key management employee of, or consultant to, or any key employee of any entity
which provides services to, the Company or a Subsidiary.

 

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

 

“Fair Market Value” shall mean, unless
otherwise defined in an Option Agreement, as of any date, the fair market value
on such date of a share of Common Stock as determined in good faith by the
Board.  In making a determination of Fair
Market Value, the Board shall give due consideration to such factors as it
deems appropriate, including, without limitation, the earnings and certain
other financial and operating information of the Company and its Subsidiaries
in recent periods, the potential value of the Company and its Subsidiaries as a
whole, the future prospects of the Company and its Subsidiaries and the
industries in which they compete, the history and management of the Company and
its Subsidiaries, the general condition of the securities markets, the fair
market value of securities of companies engaged in businesses similar to those
of the Company and its Subsidiaries.  The
determination of Fair Market Value will not give effect to any restrictions on
transfer of the shares of Common Stock or the fact that such Common Stock would
represent a minority interest in the Company. 
Notwithstanding the foregoing, following a Public Offering, Fair Market
Value shall mean the average of the high and low trading prices for a share of
Common Stock on the primary national exchange (including Nasdaq) on which the
Common Stock is then traded on the trading day immediately preceding the date
as of which such Fair Market Value is determined.

 

“Joinder Agreement” means the agreement entered
into by the Company and a Participant pursuant to, and in compliance with, Section 4.14
of the Shareholders Agreement whereby such Participant becomes entitled to the
rights and subject to the obligations created by the Shareholders Agreement.

 

3

 

“North Castle Fund” means NCP-EH, L.P., a
Delaware limited partnership, and any successor investment vehicle managed by
North Castle Partners, L.L.C., a Delaware limited liability company.

 

“Option” means the right granted to a
Participant under the Plan to purchase a share of Common Stock from the Company
at a stated price for a specified period of time.  For purposes of this Plan, an Option may only
be an Option that is not an Incentive Stock Option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (a “Non-Qualified Stock
Option”).

 

“Option Agreement” means an option agreement
between the Company and the Participant setting forth the terms and conditions
of any Options granted hereunder, which agreement shall, unless the Board
otherwise determines, be substantially in the form attached hereto as Exhibit A.

 

“Option Price” shall have the same meaning as
set forth in Section 5.2.

 

“Participant” means any Employee designated by
the Board to participate in the Plan.

 

“Plan” means this Equinox Holdings, Inc.
2000 Stock Incentive Plan, as the same may be amended from time to time.

 

“Public Offering” means any underwritten sale
of Common Stock to the public pursuant to an effective registration statement
under the Securities Act, where following such sale the common stock is
registered under Section 12(b) of the Exchange Act.

 

“Purchase Agreement” means the Stock Purchase
Agreement and Plan or Merger, dated as of October 16, 2000, as amended,
between the North Castle Fund, NCP-EH Recapitalization Corp., the Company and
certain shareholders of the Company.

 

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

 

“Shareholders Agreement” means the Shareholders
Agreement, dated as of December 15, 2000, between the Company, the North
Castle Fund and the other parties thereto, as amended at any time and from time
to time.

 

“Stock Subscription Agreement” means the stock
subscription agreement entered into by the Company and a Participant setting
forth the terms and conditions of any purchase of Common Stock by such
Participant under the

 

4

 

Plan which agreement shall be substantially in the
form attached hereto as Exhibit B, unless the Board determines otherwise.

 

“Subsidiary” means any corporation or other
person, a majority of whose outstanding voting securities or other equity
interests is owned, directly or indirectly, by the Company.

 

2.2                                 Gender
and Number.  Except when otherwise
indicated by the context, words in the masculine gender used in the Plan shall
include the feminine gender, the singular shall include the plural, and the
plural shall include the singular.

 

Section 3. 
Powers of the Board

 

3.1                                 Power
to Grant and Establish Terms of Options. 
The Board shall, subject to the terms of the Plan, determine the
Participants to whom Options shall be granted and the terms and conditions of
such Options; provided that nothing in the Plan shall limit the right of
members of the Board who are Employees to receive Options hereunder.  The selection of an Employee as a Participant
shall neither entitle such Employee to, nor disqualify such Employee from,
participation in any other award or incentive plan.

 

3.2                                 Administration.  The Board shall be responsible for the
administration of the Plan.  Any
authority exercised by the Board under the Plan shall be exercised by the Board
in its sole discretion.  The Board, by
majority action thereof, is authorized to prescribe, amend and rescind rules and
regulations relating to the administration of the Plan, to provide for
conditions and assurances deemed necessary or advisable to protect the
interests of the Company and the Subsidiaries, and to make all other determinations
necessary or advisable for the administration and interpretation of the Plan or
to carry out its provisions and purposes. 
Determinations, interpretations or other actions made or taken by the
Board pursuant to the provisions of the Plan shall be final, binding and
conclusive for all purposes and upon all persons.

 

3.3                                 Delegation
by the Board.  Except as provided in
an Option Agreement, all of the powers, duties and responsibilities of the
Board specified in the Plan may, to the full extent permitted by applicable
law, be exercised and performed by the Committee or any other duly constituted
committee of the Board, in any such case, to the extent authorized by the Board
to exercise and perform such powers, duties and responsibilities.

 

Section 4. 
Stock Subject to Plan

 

4.1                                 Number.  The number of shares of Common Stock subject
to Options under the Plan (including shares that become available for grant
pursuant to Section 4.2) shall not exceed 1,085,450 shares of Common
Stock.

 

5

 

4.2                                 Canceled,
Terminated or Forfeited Awards.  Any
share of Common Stock subject to any Option which for any reason expires or is
canceled, terminated, forfeited or otherwise settled without the issuance of
such share of Common Stock, shall again be available for award under the Plan,
subject to the maximum limitation specified in Section 4.1.

 

4.3                                 Adjustment
in Capitalization.  The number, class
and exercise price of any outstanding Options shall be adjusted by the Board as
necessary or appropriate to reflect any Common Stock dividend, stock split or
share combination or any recapitalization, merger, consolidation, exchange of
shares, liquidation, dissolution or reorganization of the Company in order to
prevent the enlargement or diminution of the rights or obligations of the
holder under any such Options.

 

Section 5. 
Terms of Options

 

5.1                                 Grant
of Options.  Options may be granted
to Participants at such time or times as shall be determined by the Board.  Each Option granted to a Participant shall be
evidenced by an Option Agreement that shall specify the exercise price at which
a share of Common Stock may be purchased pursuant to such Option, the duration
of such Option and such other terms and conditions consistent with the Plan as
the Board shall determine, including customary representations, warranties and
covenants with respect to securities law matters.  Options granted pursuant to this Plan may
only be Non-Qualified Stock Options.

 

5.2                                 Option
Price.  The exercise price per share
of Common Stock to be purchased upon exercise of an Option (the “Option
Price”) shall be determined by the Board but shall not be less than the
Fair Market Value on the date the option is granted.  The Board may determine, in its sole
discretion, that the exercise price per share of Common Stock may be at a price
which is greater than such Fair Market Value (e.g., a multiple of such
Fair Market Value).

 

5.3                                 Exercise
of Options.

 

(a)                                  Exercisability
of Options.  Options awarded under
the Plan shall be exercisable at such times, and shall be subject to such
restrictions and conditions, including the satisfaction of specified
performance goals upon a Change of Control or Public Offering, as the Board may
impose, at the time of grant of such Options, provided that no Option shall be
exercisable for more than 10 years after the date on which it is granted.

 

(b)                                 Conditions.  Notwithstanding any other provision herein,
the Board may accelerate the vesting or exercisability of any Option, all
Options or any class of Options, at any time and from time to time.  On or before the date upon which any Employee
will exercise any exercisable Option, the Company and such Employee shall enter
into a Joinder Agreement and Stock Subscription

 

6

 

Agreement with respect to the Common Stock to be
purchased upon exercise of such Option.

 

5.4                                 Payment.  The Board shall establish procedures
governing the exercise of Options, which procedures shall generally require
that written notice of the exercise thereof be given and that the exercise
price thereof be paid in full in cash or cash equivalents, including by
personal check, at the time of exercise. 
The exercise price of any Options exercised at any time following a
Public Offering may be paid in full or in part in the form of shares of Common
Stock, based on the Fair Market Value of such shares of Common Stock on the
date of exercise, subject to such rules and procedures as may be adopted
by the Board and, if the Board deems it necessary or appropriate, subject to
shareholder approval of the Plan. 
Subject to Section 5.3, as soon as practicable after receipt of a
written exercise notice and payment in full of the exercise price of any
Options (including any taxes or additional amounts required to be paid by a
Participant in connection with the exercise of an Option as specified in the
Option Agreement), the Company shall deliver to the Participant a certificate
or certificates representing the shares of Common Stock acquired upon the
exercise thereof, bearing appropriate legends if applicable.  Notwithstanding the foregoing and prior to a
Public Offering, unless otherwise provided in the Option Agreement, the Company
in lieu of delivering the shares to be acquired on exercise of an Option may
return to the Participant the exercise price tendered for such shares and pay
to the Participant an additional amount equal to the excess of (i) the
Fair Market Value, as of the relevant date of determination, of such shares
over (ii) the exercise price therefor.

 

Section 6. 
Termination of Employment

 

6.1                                 Termination
Other Than For Cause.

 

(a)                                  Unless
otherwise provided in the Option Agreement, in the event that a Participant’s
employment with a member of the Company Group terminates for any reason other
than for Cause, then the following percentage of the Options granted to the
Participant that has not become vested and exercisable pursuant to the terms of
the Option Agreement shall terminate and be canceled immediately upon such
termination of employment in accordance with the following table:

 

7

 

 

	
  Length of time from grant

  date to date of termination

  (in years)

  	
   

  	
  % of Options Terminated

  	
   

  
	
  Less than 1 year

  	
   

  	
  100

  	
  %

  
	
  1 year but less
  than 2 years

  	
   

  	
  75

  	
  %

  
	
  2 years but less
  than 3 years

  	
   

  	
  50

  	
  %

  
	
  3 years but less
  than 4 years

  	
   

  	
  25

  	
  %

  
	
  4 years or more

  	
   

  	
  0

  	
  %

  

 

With respect to
any Options that are not terminated and canceled upon such Participant’s
termination of employment in accordance with the above table (the “Remaining
Options”), the Company shall have the option to (i) permit such
Participant to exercise such Remaining Options (whether or not then vested or
exercisable) until the first to occur of (x) the 90th day
after the effective date of the Participant’s termination of employment or, in
the case of a termination for death or Disability, the twelve month anniversary
of such effective date; and (y) the expiration of the term of any such
Option; (ii) permit such Remaining Options to remain outstanding
and subject to the provisions contained herein or in such Participant’s Option
Agreement or (iii) purchase all or any portion of the Remaining
Options in accordance with the provisions of such Participant’s Option
Agreement.  The Company shall notify the
Participant of which option it has selected within ten business days after the
effective date of such Participant’s termination of employment; provided that,
in the case of a termination for any reason other than for death, Disability or
for Cause, a failure by the Company to timely notify such Participant shall be
deemed an election by the Company of the option specified in clause (i) above;
provided further that, in the case of a termination for death or Disability, a
failure by the Company to timely notify such Participant shall be deemed an
election by the Company of the option specified in clause (ii) above.  The Company shall have the right, but not the
obligation, to purchase all or any portion of a Participant’s (a) Options
that have become vested and exercisable pursuant to the terms of such
Participant’s Option Agreement or (b) Common Stock acquired on exercise of
the Remaining Options, in each case, in accordance with the terms of the Option
Agreement or Stock Subscription Agreement, as the case may be, which shall
terminate upon a Public Offering.  Unless
otherwise provided in the Option Agreement in the event the Company elects the
option described in clause (i) above, any Options held by a Participant
that are not exercised within the periods described in this paragraph shall
terminate and be canceled upon the expiration of such period.

 

(b)                                 For
all purposes under this Plan, the terms “employment” or “termination of
employment” with respect to a person who is not an employee shall mean services
with, or the termination of services with (i) the entity for

 

8

 

whom the Participant provides services to, (ii) the
Company, or (iii) the Company by the entity from whom the Participant
provides services to.

 

6.2                                 Termination
For Cause.  Unless otherwise provided
in the Option Agreement, in the event a Participant’s employment with a member
of the Company Group is terminated for Cause, any Options held by such
Participant (whether or not then vested or exercisable) shall terminate and be
canceled immediately upon such termination of employment.

 

Section 7. 
Change of Control

 

Unless
otherwise provided in the Option Agreement, in the event of a Change of
Control, the outstanding Options exercisable pursuant to Section 5.3 shall
be canceled in exchange for a payment in cash of an amount equal to the product
of (i) the excess, if any, of the Change of Control Price over the
Option Price, multiplied by (ii) the number of shares of Common
Stock covered by such Options at such Option Price.  The cash payment described above shall be
payable in full, as soon as reasonably practicable, but in no event later than
the date the holders of Common Stock receive such payment, unless provided
otherwise by the Board in the Option Agreement evidencing such Options.  Notwithstanding the foregoing provisions of
this Section 7, if the holders of Common Stock receive property other than
cash as a result of a Change of Control, then such payment (calculated in
accordance with the first sentence of this Section 7) shall be made in
such other property in the same proportion as the holders of Common Stock
receive in connection with such Change of Control less the aggregate Option
Price.

 

Section 8. 
Amendment, Modification, and

Termination of the Plan

 

The
Board at any time may terminate or suspend the Plan, and from time to time may
amend or modify the Plan.  No amendment,
modification, termination or suspension of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan, without the
consent of the Participant holding such Option. 
Shareholder approval of any such amendment, modification, termination or
suspension shall be obtained to the extent mandated by applicable law, or if otherwise
deemed appropriate by the Board.

 

Section 9. 
Miscellaneous Provisions

 

9.1                                 Nontransferability
of Options.  No Options granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution or
as expressly provided in an Option Agreement. 
Except as provided in the Option Agreement, all rights with respect to
any Option granted to a Participant under the Plan shall be exercisable during
his or her lifetime only by such Participant. 
Restrictions, if any, on the transfer of Common

 

9

 

Stock purchased
upon exercise of any Options shall be set forth in the applicable Option
Agreement evidencing such Options.

 

9.2                                 Beneficiary
Designation.  Each Participant under
the Plan may from time to time name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any benefit under the Plan is to
be paid or by whom any right under the Plan is to be exercised in case of his
or her death.  Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Board and will be effective only when filed by the
Participant in writing with the Board during his or her lifetime.  In the absence of any such designation,
benefits remaining unpaid or Options outstanding at the Participant’s death
shall be paid to or exercised by the Participant’s surviving spouse, if any, or
otherwise to or by the Participant’s estate.

 

9.3                                 No
Guarantee of Employment or Participation. 
Nothing in the Plan shall interfere with or limit in any way the right
of any member of the Company Group to terminate any Participant’s employment at
any time and for any reason, nor confer upon any Participant any right to
continue in the employ of any member of the Company Group.  No Employee shall have a right to be selected
as a Participant, or, having been so selected, to receive any Options under the
Plan.

 

9.4                                 Tax
Withholding.  A member of the Company
Group shall have the power to withhold, or require a Participant to remit to
such member promptly upon notification of the amount due, an amount determined
by such member to be sufficient to satisfy all Federal, state, local and
foreign withholding tax requirements in respect of any Options awarded
hereunder and the Company may (or may cause another member of the Company Group
to) defer payment of cash or issuance or delivery of Common Stock until such
requirements are satisfied.  The Board may
permit or require a Participant to satisfy the Participant’s tax withholding
obligation hereunder in such other manner, subject to such conditions, as the
Board shall determine.

 

9.5                                 Indemnification.  Each person who is or shall have been a
member of the Committee or the Board shall be indemnified and held harmless by
the Company to the fullest extent permitted by law against and from any loss,
cost, liability or expense (including any related attorney’s fees and advances
thereof) in connection with, based upon or arising or resulting from any claim,
action, suit or proceeding to which such person may be made a party or in which
such person may be involved by reason of any action taken or failure to act
under or in connection with the Plan or any Option Agreement and from and
against any and all amounts paid by such person in settlement thereof, with the
Company’s approval, or paid by such person in satisfaction of any judgment in
any such action, suit or proceeding against such person, provided he shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf.  The foregoing right of indemnification shall
not be exclusive and shall be independent of any other rights of

 

10

 

indemnification to
which such persons may be entitled under the Company’s Certification of
Incorporation or By-laws, by contract, as a matter of law or otherwise.

 

9.6                                 No
Limitation on Compensation.  Nothing
in the Plan shall be construed to limit the right of the Company to establish
other plans or to pay compensation to its employees in cash or property, in a
manner which is not expressly authorized under the Plan.

 

9.7                                 Requirements
of Law.  The granting of Options and
the issuance of shares of Common Stock shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies
or national or foreign securities exchanges as may be appropriate or required,
as determined by the Board. 
Notwithstanding any other provision of the Plan or any Option Agreement,
no Options shall be granted under the Plan, and no shares of Common Stock shall
be issued upon exercise of, or otherwise in connection with, any Options
granted under the Plan, if such grant or issuance would result in a violation
of applicable law, including the federal securities laws and any applicable
state or foreign securities laws.

 

9.8                                 Governing
Law.  The Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws of
the State of New York, without reference to principles of conflict of laws
which would require or permit application of the law of another jurisdiction,
except to the extent that the corporate law of the State of incorporation of
the Company specifically and mandatorily applies.

 

9.9                                 No
Impact on Benefits.  Options granted
under the Plan are not compensation for purposes of calculating an Employee’s
rights under any employee benefit plan, except to the extent provided in any
such plan.

 

9.10                           Freedom
of Action.  Subject to Section 8,
nothing in the Plan or any Option Agreement shall be construed as limiting or
preventing the Company or any Affiliate thereof from taking any action with
respect to the operation or conduct of its business that it deems appropriate
or in its best interest.

 

9.11                           Term
of Plan.  The Plan shall be effective
as of the Effective Date.  The Plan shall
expire on the tenth anniversary of the Effective Date (except as to Options
outstanding on that date), unless sooner terminated pursuant to Section 8.

 

9.12                           No
Right to Particular Assets.  Nothing
contained in the Plan and no action taken pursuant to the Plan shall create or
be construed to create a trust of any kind or any fiduciary relationship
between any member of the Company Group, on the one hand, and any Participant
or executor, administrator or other personal representative or designated
beneficiary of such Participant, on the other hand, or any other persons.  Any reserves that may be established by a
member of the Company Group in connection with the Plan shall continue to be
held as part of the general funds of the Company or such Subsidiary, and no
individual or entity other than such member of the Company

 

11

 

Group shall have
any interest in such funds until paid to a Participant.  To the extent that any Participant or his
executor, administrator or other personal representative, as the case may be,
acquires a right to receive any payment from the Company or any Subsidiary
pursuant to the Plan, such right shall be no greater than the right of an
unsecured general creditor of such member of the Company Group.

 

9.13                           Notices.  Each Participant shall be responsible for
furnishing the Board with the current and proper address for the mailing of
notices and delivery of agreements and shares of Common Stock.  Any notices required or permitted to be given
shall be deemed given if directed to the person to whom addressed at such
address and mailed by regular United States mail, first-class and prepaid.  If any item mailed to such address is
returned as undeliverable to the addressee, mailing will be suspended until the
Participant furnishes the proper address.

 

9.14                           Severability
of Provisions.  If any provision of
the Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such provision had not been included.

 

9.15                           Incapacity.  Any benefit payable to or for the benefit of
a minor, an incompetent person or other person incapable of receiving such
benefit shall be deemed paid when paid to such person’s guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Board, the Company and other parties
with respect thereto.

 

9.16                           No
Rights as Shareholder.  No
Participant shall have any voting or other rights as a shareholder of the
Company with respect to any Common Stock covered by any Option until the
issuance of a certificate or certificates to the Participant for such Common
Stock.  No adjustment shall be made for
dividends or other rights for which the record date is prior to the issuance of
such certificate or certificates.

 

9.17                           Headings
and Captions.  The headings and
captions herein are provided for reference and convenience only, shall not be
considered part of the Plan and shall not be employed in the construction of
the Plan.

 

12

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