Document:

Exhibit
        10.16

      

      EMPLOYMENT
        AGREEMENT

      

      

      This
        Employment Agreement (the “Agreement”) is made and entered into this
        1st
        day of
        January, 2006, by and between LEVEL 8 SYSTEMS, INC., a Delaware corporation
        (the
“Company”), and John P. Broderick, a resident of the State of New Jersey (the
“Employee”). 

      

      In
        consideration of the mutual covenants, promises and conditions set forth
        in this
        Agreement, and for other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the parties agree as
        follows:

      

      
        	
                1.

              	
                Employment. 
                  The Company hereby employs Employee and Employee hereby accepts
                  such
                  employment upon the terms and conditions set forth in this Agreement.
                  

              

      

      

      
        	
                2.

              	
                Duties
                  of Employee. 
                  Employee will be based in New Jersey or North Carolina at the discretion
                  of the Company. Employee’s title will be Chief Executive Officer, Chief
                  Financial Officer, Chief Operating Officer and Corporate Secretary
                  and
                  Employee will report directly to the Board of Directors of the
                  Company.
                  Employee agrees to perform and discharge such other duties as may
                  be
                  assigned to Employee from time to time by the Company to the reasonable
                  satisfaction of the Board of Directors , and such duties will be
                  consistent with those duties regularly and customarily assigned
                  by the
                  Company to the position of Chief Executive Officer, Chief Financial
                  Officer and Secretary. Employee agrees to comply with all of the
                  Company's
                  policies, standards and regulations and to follow the instructions
                  and
                  directives as promulgated by the Board of Directors of the Company.
                  Employee will devote Employee's full professional and business-related
                  time, skills and best efforts to such duties and will not, during
                  the term
                  of this Agreement, be engaged (whether or not during normal business
                  hours) in any other business or professional activity, whether
                  or not such
                  activity is pursued for gain, profit or other pecuniary advantage,
                  without
                  the prior written consent of the Board of Directors of the Company.
                  This
                  Section will not be construed to prevent Employee from (a) investing
                  personal assets in businesses which do not compete with the Company
                  in
                  such form or manner that will not require any services on the part
                  of
                  Employee in the operation or the affairs of the companies in which
                  such
                  investments are made and in which Employee's participation is solely
                  that
                  of an investor; (b) purchasing securities in any corporation whose
                  securities are listed on a national securities exchange or regularly
                  traded in the over-the-counter market, provided that Employee at
                  no time
                  owns, directly or indirectly, in excess of one percent (1%) of
                  the
                  outstanding stock of any class of any such corporation engaged
                  in a
                  business competitive with that of the Company; or (c) participating
                  in
                  conferences, preparing and publishing papers or books, teaching
                  or joining
                  or participating in any professional associations or trade group,
                  so long
                  as the Board of Directors of the Company approves such participation,
                  preparation and publication or teaching prior to Employee’s engaging
                  therein.

              

      

      

      
        	
                3.

              	
                Term. 
                  The term of this Agreement will be at-will, and can be terminated
                  by
                  either party at any time, with or without cause, subject to the
                  provisions
                  of Section 4 of this Agreement. 

              

      

      

      
        	
                4.

              	
                Termination.

              

      

       

      
        	 	
                (a)

              	
                Termination
                  by Company for Cause. 
                  The Company may terminate this Agreement and all of its obligations
                  hereunder immediately, including the obligation to pay Employee
                  

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      severance,
        vacation pay or any further accrued benefits or remuneration, if any of the
        following events occur:

      

      
        	 	
                (i)

              	
                Employee
                  materially breaches any of the terms or conditions set forth in
                  this
                  Agreement and fails to cure such breach within ten (10) days after
                  Employee's receipt from the Company of written notice of such breach
                  (notwithstanding the foregoing, no cure period shall be applicable
                  to
                  breaches by Employee of Sections 10 through 14 of this
                  Agreement);

              

      

      

      
        	 	
                (ii)

              	
                Employee
                  commits any other act materially detrimental to the business or
                  reputation
                  of the Company;

              

      

      

      
        	 	
                (iii)

              	
                Employee
                  engages in dishonest or illegal activities or commits or is convicted
                  of
                  any crime involving fraud, deceit or moral turpitude;
                  or

              

      

      

      
        	 	
                (iv)

              	
                Employee
                  dies or becomes mentally or physically incapacitated or disabled
                  so as to
                  be unable to perform Employee's duties under this Agreement even
                  with a
                  reasonable accommodation. Without limiting the generality of the
                  foregoing, Employee's inability adequately to perform services
                  under this
                  Agreement for a period of sixty (60) consecutive days will be conclusive
                  evidence of such mental or physical incapacity or disability, unless
                  such
                  inability is pursuant to a mental or physical incapacity or disability
                  covered by the Family Medical Leave Act, in which case such sixty
                  (60) day
                  period shall be extended to a one hundred and twenty (120) day
                  period.

              

      

      

      
        	 	
                (b)

              	
                Termination
                  by Company Without Cause. 
                  The Company may terminate Employee's employment pursuant to this
                  Agreement
                  for reasons other than those stated in Section 4(a) upon at least
                  thirty
                  (30) days' prior written notice to Employee. In the event Employee's
                  employment with the Company is terminated by the Company without
                  cause,
                  the Company shall be obligated to pay Employee a lump sum severance
                  payment equal to twelve (12) months of Employee’s then base salary payable
                  within thirty (30) days after the date of termination. In addition,
                  Employee will be entitled to payment of all unused vacation days
                  at his
                  current daily rate and any accrued but unpaid salary or earned
                  bonuses.
                  Any option grants or restricted stock awards made to employee will
                  immediately vest. The payment to Employee for all deferred salaries
                  and
                  earned bonuses will be paid within 30 days by the Company. Other
                  than the
                  severance payments set forth in this Section 4(b), Employee will
                  be
                  entitled to receive no further remuneration and will not be entitled
                  to
                  participate in any Company benefit programs following his termination
                  by
                  the Company, whether such termination is with or without
                  cause.

              

      

      

      
        	 	
                (c)

              	
                Termination
                  by Employee for Cause. 
                  In the event there occurs a substantial change in the Employee’s job
                  duties related to his position as CFO, but not CEO or COO, or there
                  is a
                  decrease in or a failure to provide the compensation or vested
                  benefits
                  under this Agreement initiated by either the Company or as a result
                  of a
                  Change in Control (as defined below) of the Company, Employee shall
                  have
                  the right to resign his employment and will be entitled to a lump
                  sum
                  severance payment equal to twelve (12) months of Employee’s then base
                  salary payable within thirty (30) days after the date of termination
                  In
                  addition, Employee will be entitled to payment of all unused vacation
                  days
                  at his current daily rate and a lump sum equal to all deferred
                  salaries
                  and earned bonuses. In addition, all Employee’s then outstanding but
                  unvested stock options shall vest one

              

      

      
        
          
          

        

        
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      hundred
        percent (100%). Employee shall have 12 months from the date written notice
        is
        given to Employee about the announcement and closing of a transaction resulting
        in a Change in Control of the Company that would result in a substantial
        change
        in the Employee’s job duties or decrease his compensation or vested benefits
        under this Agreement to resign or this Section 4(c) shall not apply. In the
        event Employee resigns from the Company for any other reason, Employee will
        not
        be entitled to receive or accrue any further Company benefits or other
        remuneration under this Agreement and Employee specifically agrees that he
        will
        not be entitled to receive any severance pay.

      

      For
        purposes of this Section 4, a Change in Control shall be deemed to have occurred
        if any of the following occur:

      

      
        	 	
                (i)

              	
                the
                  merger of consolidation of the Company with or into another unaffiliated
                  entity, or the merger of another unaffiliated entity into the Company
                  or
                  another subsidiary thereof with the effect that immediately after
                  such
                  transaction the stockholders of the Company immediately prior to
                  such
                  transaction hold less than fifty percent (50%) of the total voting
                  power
                  of all securities generally entitled to vote in the election of
                  directors,
                  managers or trustees of the entity surviving such merger or consolidation.
                  This provision will not apply to any reorganization and reverse
                  merger
                  between the Company and Cicero, Inc. (or any other similar entity
                  established for a similar purpose)
                  ;

              

      

      

      
        	 	
                (ii)

              	
                the
                  sale or transfer of more than fifty-one percent (51%) of the Company’s
                  then outstanding voting stock (other than a restructuring event
                  which
                  results in the continuation of the Company’s business by an affiliated
                  entity) to unaffiliated person or group (as such term is used in
                  Section
                  13(d)(3) of the Securities Exchange Act of 1934, as amended);
                  or

              

      

      

      
        	 	
                (iii)

              	
                the
                  adoption by the stockholders of the Company of a plan relating
                  to the
                  liquidation or dissolution of the
                  Company.

              

      

      

      
        	
                5.

              	
                Compensation
                  and Benefits.
                  

              

      

      

      
        	 	
                (a)

              	
                Annual
                  Salary. 
                  During the term of this Agreement and for all services rendered
                  by
                  Employee under this Agreement, the Company will pay Employee a
                  base salary
                  of One Hundred Fifty Thousand Dollars ($150,000.00) per annum in
                  equal
                  bi-monthly installments. Such annual salary will be subject to
                  adjustments
                  by any increases given in the normal course of
                  business.

              

      

      

      
        	 	
                (b)

              	
                Incentive
                  Compensation. 
                  Employee shall be eligible to receive incentive compensation in
                  the form
                  of cash bonuses, in the amount set forth in Exhibit C. The initial
                  cash bonus of $50,000 will be earned and payable within ninety
                  90 days
                  after the close of the trailing three months wherein the Company
                  achieved
                  an operating cash flow under generally accepted accounting principles
                  (after accounting for all bonuses) of no less than $150,000 as
                  defined in
                  Exhibit C. In
                  addition, Employee is eligible for an additional annual bonus upon
                  the
                  Company reaching certain operating cash flow levels (after accounting
                  for
                  all bonuses) as set forth in Exhibit C. Said bonus will be payable
                  after
                  the annual accounts have been presented to the Compensation Committee.
                  Exhibit C attached hereto provides the benchmarks associated with
                  achieving the Incentive
                  Compensation.

              

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        	 	
                (c)

              	
                Equity
                  Awards. 
                  Upon the successful completion of either the recapitalization merger
                  of
                  Level 8 Systems, into Cicero, Inc., or the successful amendment
                  of Level
                  8’s charter to increase the authorized shares necessary to effect
                  the
                  recapitalization of the Company and the associated conversion of
                  debt and
                  equity, (the Conversion Event) Employee is hereby awarded a Stock
                  Option
                  Grant equal
                  to
                  1.35% of the fully diluted shares of either Cicero, Inc. or Level
                  8
                  Systems, Inc., whichever entity shall be the surviving entity,
                  at the
                  prevailing market price on the day of grant. These options shall
                  vest 1/3
                  immediately and 1/3 on each of the next two anniversaries of the
                  date of
                  grant. Where possible under existing tax laws, these option grants
                  will be
                  Incentive Stock Option Grants otherwise these options will be Non
                  Qualified Options. In addition, Employee will be granted a restricted
                  stock award equal to 1.35% of the fully diluted shares of either
                  Cicero,
                  Inc. or Level 8 Systems common stock, which ever entity shall be
                  the
                  surviving entity. The restricted stock award will vest upon the
                  resignation or termination of employee or upon a change in control
                  as
                  defined in Section 4 (c) above. The Company will utilize its best
                  efforts
                  to register the restricted stock award within 60 days of
                  grant.

              

      

      

      
        	
                6.

              	
                Vacation. 
                  Employee shall be eligible for four (4) weeks of paid vacation
                  annually,
                  provided that such vacation is scheduled at such times that do
                  not
                  interfere with the Company’s legitimate business needs.
                  

              

      

      

      
        	
                7.

              	
                Other
                  Benefits. 
                  Employee will be entitled to such fringe benefits as may be provided
                  from
                  time-to-time by the Company to its employees, including, but not
                  limited
                  to, group health insurance, life and disability insurance, and
                  any other
                  fringe benefits now or hereafter provided by the Company to its
                  employees,
                  if and when Employee meets the eligibility requirements for any
                  such
                  benefit. The Company reserves the right to change or discontinue
                  any
                  employee benefit plans or programs now being offered to its employees;
                  provided, however, that all benefits provided for employees of
                  the same
                  position and status as Employee will be provided to Employee on
                  an equal
                  basis.

              

      

      

      
        	
                8.

              	
                Business
                  Expenses. 
                  Employee will be reimbursed for all reasonable expenses incurred
                  in the
                  discharge of Employee's duties under this Agreement pursuant to
                  the
                  Company's standard reimbursement
                  policies.

              

      

       

      
        	
                9.

              	
                Withholding. 
                  The Company will deduct and withhold from the payments made to
                  Employee
                  under this Agreement, state and federal income taxes, FICA and
                  other
                  amounts normally withheld from compensation due
                  employees.

              

      

      

      
        	
                10.

              	
                Non-Disclosure
                  of Proprietary Information. 
                  Employee recognizes and acknowledges that the Trade Secrets (as
                  defined
                  below) and Confidential Information (as defined below) of the Company
                  and
                  its affiliates and all physical embodiments thereof (as they may
                  exist
                  from time-to-time, collectively, the “Proprietary Information”) are
                  valuable, special and unique assets of the Company's and its affiliates'
                  businesses. Employee further acknowledges that access to such Proprietary
                  Information is essential to the performance of Employee's duties
                  under
                  this Agreement. Therefore, in order to obtain access to such
                  

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      Proprietary
        Information, Employee agrees that, except with respect to those duties assigned
        to him by the Company, Employee will hold in confidence all Proprietary
        Information and will not reproduce, use, distribute, disclose, publish or
        otherwise disseminate any Proprietary Information, in whole or in part, and
        will
        take no action causing, or fail to take any action necessary to prevent causing,
        any Proprietary Information to lose its character as Proprietary Information,
        nor will Employee make use of any such information for Employee's own purposes
        or for the benefit of any person, firm, corporation, association or other
        entity
        (except the Company) under any circumstances. 

      

      For
        purposes of this Agreement, the term “Trade Secrets” means information,
        including, but not limited to, any technical or nontechnical data, formula,
        pattern, compilation, program, device, method, technique, drawing, process,
        financial data, financial plan, product plan, list of actual or potential
        customers or suppliers, or other information similar to any of the foregoing,
        which derives economic value, actual or potential, from not being generally
        known to, and not being readily ascertainable by proper means by, other persons
        who can derive economic value from its disclosure or use. For purposes of
        this
        Agreement, the term “Trade Secrets” does not include information that Employee
        can show by competent proof (i) was known to Employee and reduced to writing
        prior to disclosure by the Company (but only if Employee promptly notifies
        the
        Company of Employee’s prior knowledge); (ii) was generally known to the public
        at the time the Company disclosed the information to Employee; (iii) became
        generally known to the public after disclosure by the Company through no
        act or
        omission of Employee; or (iv) was disclosed to Employee by a third party
        having
        a bona fide right both to possess the information and to disclose the
        information to Employee. The term “Confidential Information” means any data or
        information of the Company, other than trade secrets, which is valuable to
        the
        Company and not generally known to competitors of the Company. The provisions
        of
        this Section 6 will apply to Trade Secrets for so long as such information
        remains a trade secret and to Confidential Information during Employee’s
        employment with the Company and for a period of two (2) years following any
        termination of Employee’s employment with the Company for whatever
        reason.

      

      
        	
                11.

              	
                Non-Solicitation
                  Covenants. 
                  Employee agrees that during Employee's employment by the Company
                  and for a
                  period of two (2) year following the termination of Employee's
                  employment
                  for whatever reason, Employee will not, directly or indirectly,
                  on
                  Employee's own behalf or in the service of or on behalf of any
                  other
                  individual or entity, divert, solicit or attempt to divert or solicit
                  any
                  individual or entity (i) who is a client of the Company at any
                  time during
                  the six (6)-month period prior to Employee's termination of employment
                  with the Company (“Client”), or was actively sought by the Company as a
                  prospective client, and (ii) with whom Employee had material contact
                  while
                  employed by the Company to provide similar services or products
                  as such
                  provided by Employee for the Company to such Clients or prospects.
                  Employee further agrees and represents that during Employee's employment
                  by the Company and for a period of two (2) year following any termination
                  of Employee's employment for whatever reason, Employee will not,
                  directly
                  or indirectly, on Employee's own behalf or in the service of, or
                  on behalf
                  of any other individual or entity, divert, solicit or hire away,
                  or
                  attempt to divert, solicit or 

              

      

      
        
          
          

        

        
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      hire
        away, to or for any individual or entity which is engaged in providing similar
        services or products to that provided by the Company, any person employed
        by the
        Company for whom Employee had supervisory responsibility or with whom Employee
        had material contact while employed by the Company, whether or not such employee
        is a full-time employee or temporary employee of the Company, whether or
        not
        such employee is employed pursuant to written agreement and whether or not
        such
        employee is employed for a determined period or at-will. For purposes of
        this
        Agreement, “material contact” exists between Employee and a Client or potential
        Client when (1) Employee established and/or nurtured the Client or potential
        Client; (2) the Client or potential Client and Employee interacted to further
        a
        business relationship or contract with the Company; (3) Employee had access
        to
        confidential information and/or marketing strategies or programs regarding
        the
        Client or potential Client; and/or (4) Employee learned of the Client or
        potential Client through the efforts of the Company providing Employee with
        confidential Client information, including but not limited to the Client’s
        identify, for purposes of furthering a business relationship. 

      

      
        	
                12.

              	
                Existing
                  Restrictive Covenants. 
                  Except as provided in Exhibit B, Employee has not entered into
                  any
                  agreement with any employer or former employer: (a) to keep in
                  confidence
                  any confidential information, or (b) to not compete with any former
                  employer. Employee represents and warrants that Employee's employment
                  with
                  the Company does not and will not breach any agreement which Employee
                  has
                  with any former employer to keep in confidence confidential information
                  or
                  not to compete with any such former employer. Employee will not
                  disclose
                  to the Company or use on its behalf any confidential information
                  of any
                  other party required to be kept confidential by
                  Employee.

              

      

      

      
        	
                13.

              	
                Return
                  of Proprietary Information. 
                  Employee acknowledges that as a result of Employee's employment
                  with the
                  Company, Employee may come into the possession and control of Proprietary
                  Information, such as proprietary documents, drawings, specifications,
                  manuals, notes, computer programs, or other proprietary material.
                  Employee
                  acknowledges, warrants and agrees that Employee will return to
                  the Company
                  all such items and any copies or excerpts thereof, and any other
                  properties, files or documents obtained as a result of Employee's
                  employment with the Company, immediately upon the termination of
                  Employee's employment with the
                  Company.

              

      

      

      
        	
                14.

              	
                Proprietary
                  Rights. 
                  During the course of Employee's employment with the Company, Employee
                  may
                  make, develop or conceive of useful processes, machines, compositions
                  of
                  matter, computer software, algorithms, works of authorship expressing
                  such
                  algorithm, or any other discovery, idea, concept, document or improvement
                  which relates to or is useful to the Company's Business (the
                  “Inventions”), whether or not subject to copyright or patent protection,
                  and which may or may not be considered Proprietary Information.
                  Employee
                  acknowledges that all such Inventions will be “works made for hire” under
                  United States copyright law and will remain the sole and exclusive
                  property of the Company. Employee also hereby assigns and agrees
                  to assign
                  to the Company, in perpetuity, all right, title and interest Employee
                  may
                  have in and to such Inventions, including without limitation, all
                  copyrights, and the right to apply for any form of patent,
                  

              

      

      
        
          
          

        

        
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      utility
        model, industrial design or similar proprietary right recognized by any state,
        country or jurisdiction. Employee further agrees, at the Company's request
        and
        expense, to do all things and sign all documents or instruments necessary,
        in
        the opinion of the Company, to eliminate any ambiguity as to the ownership
        of,
        and rights of the Company to, such Inventions, including filing copyright
        and
        patent registrations and defending and enforcing in litigation or otherwise
        all
        such rights. 

      

      Employee
        will not be obligated to assign to the Company any Invention made by Employee
        while in the Company's employ which does not relate to any business or activity
        in which the Company is or may reasonably be expected to become engaged,
        except
        that Employee is so obligated if the same relates to or is based on Proprietary
        Information to which Employee will have had access during and by virtue of
        Employee's employment or which arises out of work assigned to Employee by
        the
        Company. Employee will not be obligated to assign any Invention which may
        be
        wholly conceived by Employee after Employee leaves the employ of the Company,
        except that Employee is so obligated if such Invention involves the utilization
        of Proprietary Information obtained while in the employ of the Company. Employee
        is not obligated to assign any Invention that relates to or would be useful
        in
        any business or activities in which the Company is engaged if such Invention
        was
        conceived and reduced to practice by Employee prior to Employee's employment
        with the Company. Employee agrees that any such Invention is set forth on
        Exhibit “A” to this Agreement.

      

      
        	
                15.

              	
                Remedies. 
                  Employee agrees and acknowledges that the violation of any of the
                  covenants or agreements contained in Sections 10 through 14 of
                  this
                  Agreement would cause irreparable injury to the Company, that the
                  remedy
                  at law for any such violation or threatened violation thereof would
                  be
                  inadequate, and that the Company will be entitled, in addition
                  to any
                  other remedy, to temporary and permanent injunctive or other equitable
                  relief without the necessity of proving actual damages or posting
                  a
                  bond.

              

      

      

      
        	
                16.

              	
                Severability. 
                  In case one or more of the provisions contained in this Agreement
                  is for
                  any reason held to be invalid, illegal or unenforceable in any
                  respect,
                  the parties agree that it is their intent that the same will not
                  affect
                  any other provision in this Agreement, and this Agreement will
                  be
                  construed as if such invalid or illegal or unenforceable provision
                  had
                  never been contained herein. It is the intent of the parties that
                  this
                  Agreement be enforced to the maximum extent permitted by
                  law.

              

      

      

      
        	
                17.

              	
                Entire
                  Agreement. 
                  This Agreement embodies the entire agreement of the parties relating
                  to
                  the subject matter of this Agreement and supersedes all prior agreements,
                  oral or written, regarding the subject matter hereof. No amendment
                  or
                  modification of this Agreement will be valid or binding upon the
                  parties
                  unless made in writing and signed by the
                  parties.

              

      

      

      
        	
                18.

              	
                Governing
                  Law. 
                  This Agreement is entered into and will be interpreted and enforced
                  pursuant to the laws of the State of New Jersey. The parties hereto
                  hereby
                  agree that the appropriate forum and venue for any disputes between
                  any of
                  the parties hereto arising 

              

      

      
        
          
          

        

        
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      out
        of
        this Agreement shall be any federal court in the state where the Employee
        has
        his principal place of residence and each of the parties hereto hereby submits
        to the personal jurisdiction of any such court. The foregoing shall not limit
        the rights of any party to obtain execution of judgment in any other
        jurisdiction. The parties further agree, to the extent permitted by law,
        that a
        final and unappealable judgment against either of them in any action or
        proceeding contemplated above shall be conclusive and may be enforced in
        any
        other jurisdiction within or outside the United States by suit on the judgment,
        a certified exemplified copy of which shall be conclusive evidence of the
        fact
        and amount of such judgment.

      

      
        	
                19.

              	
                Surviving
                  Terms. 
                  Sections 4, 10, 11, 14, 15 and 18 of this Agreement shall survive
                  termination of this Agreement.

              

      

      

      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

      

      
        	COMPANY:	 	
                EMPLOYEE:

              
	 	 	 	 
	LEVEL
                8 SYSTEMS, INC.	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                By:
                  

              	 	 	 
	
                Name:

              	 	 	
                John
                  P. Broderick

              
	
                Title:
                  

              	 	 	 

      

      
        
          
          

        

        
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      EXHIBIT
        A

      

      INVENTIONS

      

      

      

      

      Employee
        represents that there are no Inventions.

      

      

      
        	 	 
	 	
                Employee
                  Initials

              

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

      

      EXISTING
        RESTRICTIVE COVENANTS

      

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT
        C

      

      VARIABLE
        COMPENSATION

      

       

      Initial
        Cash Bonus:

      

      Employee
        is entitled to an initial cash bonus of $50,000 payable within ninety 90
        days
        after the close of the trailing three months wherein the Company achieved
        an
        operating cash flow under generally accepted accounting principles (after
        accounting for all bonuses) of no less than $150,000. Cash flow from operations
        is defined as net income plus depreciation and amortization plus or minus
        the
        changes in working capital. 

      

      Annual
        Cash Bonus:

      

      Employee
        is entitled to an annual cash bonus payable after the Company has reported
        its
        results for the year. This annual cash bonus is tied to cash flow from
        operations (defined as above) as per the chart below:

      

      

      
        	 	
                Operating
                  Cash Flow
                  Range

              	 	 	 	 
	 	 	 	 	 	 	 
	 	
                From

              	
                To

              	 	
                Variable
                  Compensation

              
	 	 	 	 	 	 	 
	
                Tier
                  1

              	
                $
                  500,000 

              	
                $
                  1,000,000 

              	 	 	
                $
                  100,000 

              	 
	
                Tier
                  2

              	
                $
                  1,000,001 

              	
                $
                  2,000,000 

              	 	 	
                $
                  200,000 

              	 
	
                Tier
                  3

              	
                $
                  greater than 2,000,001 

              	 	 	 	
                $
                  300,000 

              	 

      

      

      
        	 	
                Performance
                  significantly in excess of Tier 3 may result in an additional reward
                  at
                  the discretion of the Compensation
                  Committee

              

      

       

    

     

    11Exhibit 10(d)

                         Clean Diesel Technologies, Inc.

                               1994 INCENTIVE PLAN

                               (as amended through

                                 June 11, 2002)

<PAGE>
<TABLE>
<CAPTION>
           The 1994 Incentive Plan of Clean Diesel Technologies, Inc.

                                      Index

                                                                       Page
<S>  <C>                                                               <C>
1.   Purpose and Effective Date                                           1
2.   Definitions                                                          1
3.   Administration                                                       3
     3.1 Committee                                                        3
     3.2 Effect of Determinations                                         4
4.   Eligibility                                                          4
5.   Shares Subject to This Plan                                          4
     5.1 Maximum Number of Shares                                         4
     5.2 Share Accounting                                                 4
6.   Awards                                                               5
     6.1 Options                                                          5
     6.2 Stock Appreciation Rights                                        7
     6.3 Restricted Shares                                                8
     6.4 Performance Awards                                               9
     6.5 Bonuses                                                         10
     6.6 Other Awards                                                    12
7.   Adjustments Upon Changes in Capitalization                          12
8.   Change in Control                                                   13
     8.1 Definition of Change in Control                                 13
     8.2 Effect of Change in Control                                     14
9.   Relationship of the Plan to Benefit Plans                           14
10.  Effect of the Plan on Right to Continued Employment and Interest
     In Particular Property                                              15
11.  Withholding Taxes and Deferrals                                     15
     11.1 Cash Withholding                                               15
     11.2 Share Withholding                                              15
     11.3 Deferrals                                                      16
12.  Compliance With Applicable Legal Requirements                       16
13.  Amendments                                                          16
     13.1 Plan Amendments                                                16
     13.2 Award Amendments                                               16
     13.3 Rights of Participants                                         16
     13.4 Rule 16b-3                                                     17
14.  Miscellaneous Provisions                                            17
     14.1 Awards in Various Countries                                    17
     14.2 Transferability                                                17
     14.3 Cancellation of Awards                                         17
     14.4 Arbitration; Governing Law                                     17
</TABLE>

<PAGE>
                         CLEAN DIESEL TECHNOLOGIES, INC.

                               1994 INCENTIVE PLAN

1.   Purpose and Effective Date
     --------------------------

     The purpose of this 1994 Incentive Plan of Clean Diesel Technologies, Inc.,
a Delaware corporation ("the Corporation") is to further the interests of the
Corporation and its shareholders by providing incentives in the form of awards
to such directors, officers, employees, consultants or advisors to the
Corporation as the directors shall determine are key to the continued success
and profitability of the Corporation.  The Plan is intended to retain
Participants with significant training, experience and ability; to attract new
Participants whose services are considered valuable; and to encourage such
Participants to acquire a proprietary interest in the Corporation.  So that the
maximum incentive can be provided each Participant in the Plan by granting to
such participant an Award best suited to the circumstances, the Plan provides
for granting, Non-Qualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Shares, Performance Awards, Bonuses, Other
Awards, or any combination of the foregoing.

     This Plan shall become effective upon its adoption by the Board, subject to
approval within one (1) year of such adoption by the Corporation's shareholders,
and shall remain effective until terminated by resolution of the Board.

2.   Definitions
     -----------

     As used in this Plan:

     (1)     "Award" means the grant hereunder, and by consent of the
Participant, awards or options granted previously by the Corporation of any form
of Option, Stock Appreciation Right, Restricted Share, Performance Award, Other
Award, Bonus, or any other form of Share based or non-Share based Award.

     (2)     "Award Agreement" means a written agreement between the Corporation
and the Participant that sets forth the terms, conditions and limitations
applicable to an Award.

     (3)     "Beneficiary" means, where a Participant is within respect to any
Award not forfeitable by its terms on the death of the Participant entitled to
any unpaid portion thereof, such person or persons entitled thereto under the
Participant's will or under the laws of descent and distribution;

     (4)     "Board" means the Board of Directors of the Corporation.

     (5)     "Bonus" means any payment under Sec. 6.5.

                                        1
<PAGE>
     (6)     "Change in Control" has the meaning set forth in Sec. 8.

     (7)     "Code" means the United States Internal Revenue Code of 1986, as
amended and in effect from time to time, or any successor statute.

     (8)     "Committee" means the Committee of the Board or any successor
committee as described in Section 3.1, or, if there shall be no such Committee,
the Board.

     (9)     "Corporation" means Clean Diesel Technologies, Inc., a Delaware
corporation, or any successor corporation, and its subsidiaries and affiliates,
incorporated or otherwise, in which the Corporation shall own directly or
indirectly at least fifty percent (50%) of the interests.

     (10)     "Employee" means any individual who is a salaried employee on the
payroll of the Corporation.

     (11)     "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.

     (12)     "Fair Market Value Per Share" in reference to the common stock of
the Corporation means such value as shall be determined by the Board or a
Committee thereof, as the case may be, responsible from time to time for the
administration of the Plan.

     (13)     "Non-Qualified Stock Option" shall mean a stock option which is
not an Incentive Stock Option within the meaning of Section 422 of the Code.

     (14)     "Option" means an Award to purchase Shares granted pursuant to
Sec. 6.1.

     (15)     "Participant" means any director, officer, employee, consultant or
advisor who is granted an Award under this Plan.  Except that consultants and
advisors shall not include those rendering services in connection with the offer
or sale of the Corporation's securities in a capital raising transaction.

     (16)     "Performance Award" has the meaning described in Sec. 6.4.

     (17)     "Plan" means this 1994 Incentive Plan of Clean Diesel
Technologies, Inc., as amended from time to time.

     (18)     "Restricted Shares" means Shares which have certain restrictions
attached to the ownership thereof, which may be issued under Sec. 6.3.

     (19)     "Retirement" means termination of a Participant's employment with
the Corporation by retirement under the normal, mandatory, early and applicable
age plus service or other provision of the applicable retirement plan of the
Corporation or a subsidiary or affiliate of the Corporation, or, if there shall
be no such plan or plans, then

                                        2
<PAGE>
under such procedures as the Company or its subsidiaries and affiliates may from
time to time establish.

     (20)     "Rule 16b-3" means such rule as promulgated by the Securities and
Exchange Commission under the Exchange Act as now in force or as such regulation
or successor regulation shall be hereafter amended.

     (21)     "Share" means shares of common stock of the Corporation.

     (22)     "Share Unit" means the right to receive a payment equivalent in
value to one Share on the date of payment.

     (23)     "Stock Appreciation Right" means a right which may be issued under
Sec. 602, the value of which is determined relative to the appreciation in value
of Shares.

     (24)     "Totally Disabled" means a condition of a Participant found by a
qualified physician selected by the Corporation to be that as described in Sec.
22(e)(3) of the Code or as such Section or successor section shall be hereafter
amended.

     (25)     "Non-Employee Director" means a director as defined in Rule 16b-3
of the Securities and Exchange Commission.

     (26)     "Incentive Stock Option" means a stock option satisfying the
requirements of Section 422 of the Code."

3.   Administration
     --------------

     3.1  Committee
          ---------

          (a)     This Plan shall be administered by the Board.  The Board may,
     however, appoint a Committee to administer the Plan which shall consist of
     not less than a sufficient number of disinterested members of the Board so
     as to qualify the Committee to administer this Plan as contemplated by Rule
     16b-3 and to that end the Board may limit the participation of Committee
     members in the Plan to formula based or other awards. The Board may remove
     members from or add members to the Committee. Vacancies on the Committee
     shall be filled by the Board.

          (b)     To the extent permitted by Sec.  13.3, the Board or Committee
     is authorized to (i) determine the persons who shall be Participants in the
     Plan and which Awards shall be granted to Participants, (ii) establish,
     amend and rescind rules, regulations and guidelines relating to the Plan as
     it deems appropriate, (iii) interpret and administer the Plan, Awards and
     Award Agreements, (iv) establish, modify and terminate terms and conditions
     of Award Agreements, (v) grant waivers and accelerations of Plan, Award and
     Award Agreements restrictions and

                                        3
<PAGE>
     (vi) take any other action necessary for the proper administration and
     operation of the Plan.

          (c)     The Board or Committee may designate persons and entities
     other than its members, including but not limited to, and successor
     committee, the Chief Executive Officer, and the Corporate Secretary, to
     carry out any of its responsibilities under and described in this Plan,
     under such conditions or limitations as the Board or Committee may
     establish, other than its authority with regard to participants, if any,
     who are subject to Sec. 16 of the Exchange Act.

     3.2  Effect of Determination
          -----------------------

     Determination of the Board or Committee and its designee shall be final,
     binding and conclusive on the Corporation, its stockholders, Employees and
     Participants. No member of the Board or Committee or any of its designee
     shall be personally liable for any action or determination made in good
     faith with respect to this Plan, any award, or any Award Agreement.

4.   Eligibility
     -----------

     Persons eligible for Awards under this Plan shall consist of key managerial
     and other directors, officers, employees, consultants or agents who possess
     valuable experience and skills and have contributed, or can be expected to
     contribute, materially to the success and profitability of the Corporation.
     The Board or Committee shall determine which persons shall be Participants,
     the types of Awards to be made to Participants and the terms, conditions
     and limitations applicable to the Awards.

5.   Shares Subject to This Plan
     ---------------------------

     5.1  Maximum Number of Shares
          ------------------------

     The maximum number of Shares available for Awards under this Plan in each
calendar year during which any part of this Plan shall be in effect shall be
such fixed amount of Shares as the Board shall from time to time determine but
not more than seventeen and one-half percent (17 %) of the issued and
outstanding Shares of the Corporation. Treasury stock shall not be deemed to be
issued and outstanding. Any and all such Shares may be issued in respect of any
of the types of Awards. However, the maximum number of Shares that may be issued
subject to Incentive Stock Options under the Plan shall not exceed two million
(2,000,000) Shares."

     5.2  Share Accounting
          ----------------

     Shares related to Awards that are forfeited, terminate, expire unexercised,
exchanged, settled in cash in lieu of Shares or settled in such other manner so
that a portion or all of the Shares included in an Award are not issued to a
Participant shall be

                                        4
<PAGE>
available for other Awards.  Any Shares not so used shall be available for
further Awards; provided, however, that in any calendar year no more than the
amount determined under Sec. 5.1 above, shall be available for Awards.  Shares
issued under this Plan shall be authorized and unissued Shares or Shares
reacquired by the Corporation, as determined by the Committee.  No fractional
Shares shall be issued under this Plan.

6.   Awards
     ------

     (a)     Awards may include, but are not limited to, those described in this
Sec. 6.  Awards may be granted singly, in combination, or in tandem with other
Awards.  Subject to the other provisions of this Plan, Awards may also be made
in combination or in tandem with, in replacement of, or as alternatives to,
grants or rights under this Plan and any other plan of the Corporation,
including any plan of any acquired entity and for the benefit of any present or
former director, officer, consultant or agent of such acquired entity.  Subject
to the terms of the Awards described in this Sec. 6 and the related Award
Agreement, the form of payment for Awards may be in cash, in Shares, in Share
Units, or such other form as determined by the Board of the Committee, and may
be made partly in one form or partly in one or more other forms, all as
determined by the Committee.  Except as otherwise provided in this Plan, Awards
shall be evidenced by Award Agreements, the terms of which may be amended or
accelerated by the Board or Committee following the grant of any Award and need
not be uniform among Participants.  Except as otherwise provided in this Plan,
Awards shall be granted for such minimum consideration as is required by
applicable law, rules and regulations, including without limitation, the then
applicable Rule 16b-3, and such additional consideration, if any, as may be
determined by the Committee.

     (b)     Notwithstanding anything contained in this Plan, if required by the
ten applicable Rule 16b-3 or any successor provision, any "equity security"
awarded pursuant to this Plan to any participant who is subject to Section 16 of
the Exchange Act must be held by the Participant for at least six (6) months
after the award thereof.  In addition, if required by the then applicable Rule
16b-3 or any successor provision, with respect to any Participant who is subject
to Section 16 of the Exchange Act, at least six (6) months must elapse from the
date of acquisition of a "derivative security" hereunder to the date of
disposition of such security.  The terms "equity security" and "derivative
security" shall have the meanings described in the then applicable Rule 16b-3.

     6.1  Options
          -------

     Options may be granted under this Plan from time to time.  If Options are
granted they shall be upon the following terms and conditions with such
additional terms and conditions, not inconsistent with the provisions of this
Plan, as the Board or Committee in its discretion shall deem desirable:

          (a)     Options shall be Non-Qualified Stock Options or Incentive
     Stock Options.

                                        5
<PAGE>
          (b)     The option price per Share for all Options shall be not less
     than one hundred per cent (100%) of the Fair Market Value Per Share on the
     date the Option is granted.

          (c)     Award Agreements for Options shall conform to the requirements
     of this Plan, and may contain such other provisions as the Committee shall
     deem advisable.

          (d)     Award Agreements for Options shall specify when an Option may
     be exercisable. An option may be exercised, in whole or in part, by giving
     written notice of exercise to the corporation specifying the number of
     Shares to be purchased. Shares purchased upon exercise of an Option shall
     be paid for in full at the time the Option is exercised in cash or, with
     the consent of the Board or Committee, consistent with applicable law,
     regulations and rules.

          (e)     A holder of an Option shall have no rights as a stockholder
     with respect to any Shares covered by such Option unless and until the date
     of the issuance of the stock certificate for such Shares.

          (f)  (i)     If, after completion of any required period of continuous
     employment or affiliation in order to exercise an Option as provided in an
     Award Agreement, a Participant dies while employed by the Corporation, such
     Option shall be exercisable by the Beneficiary thereof, but after the date
     of death of the Participant only within the period specified in the Award
     Agreement which shall not be later than the expiration date of the Option.

               (ii)     Following the death of a Participant, the Board or
     Committee may at its discretion, upon the request of and in consideration
     of the surrender of such Option, pay the amount by which the Fair Market
     Value per Share on the date of such request shall exceed the Option price
     per Share multiplied by the number of Shares as to which the request was
     made.

          (g)     If, after completion of any required period of continuous
     employment in order to exercise an Option as provided in an Award
     Agreement, a Participant is Totally Disabled or retires, such Option shall
     be exercisable by the Participant, but only within the period specified in
     the Award Agreement.

          (h)     Incentive Stock Options

               (i)     Each Incentive Stock Option shall not have an aggregate
     Fair Market Value Per Share (determined for each Incentive Stock Option at
     its grant date) of Shares with respect to which Incentive Options are
     exercisable for the first time by a Participant during any calendar year
     (under the Plan and any other stock option plan of the Corporation or its
     subsidiaries ("Other Plans"), determined in accordance with the provisions
     of Section 422 of the Code, which exceeds $100,000;

                                        6
<PAGE>
               (ii)     To the extent that the aggregate Fair Market Value Per
     Share of stock with respect to which Incentive Stock Options granted under
     the Plan and any Other Plans are exercisable by a Participant for the first
     time during any calendar year exceeds $100,000, such Incentive Stock
     Options shall be treated as Non-Qualified Stock Options to the extent
     necessary so that such aggregate Fair Market Value per Share of Stock does
     not exceed $100,000. For purposes of the foregoing sentence, Incentive
     Stock Options shall be treated as Non-Qualified Stock Options according to
     the order in which they were granted such that the most recently granted
     Incentive Stock Options are first treated as Non-Qualified Stock Options;
     and

               (iii)     Each Incentive Stock Option shall require the
     Participant to notify the Board or the Committee of any disposition of any
     Shares issued pursuant to the exercise of the Incentive Stock Option under
     the circumstances described in Section 421 of the Code (relating to certain
     disqualifying dispositions) within ten (10) days of such disposition.

     6.2  Stock Appreciation Rights
          -------------------------

     Stock Appreciation Rights may be granted under this Plan from time to time.
If Stock Appreciation Rights are granted they shall be upon the following terms
and conditions, and such additional terms and conditions, not inconsistent with
the provisions of this Plan, as the Board or Committee in its discretion shall
deem desirable:

          (a)     A Stock Appreciation Right may be granted in tandem with part
     of all of, in addition to, or completely independent of, an Option or any
     other Award under this Plan. A Stock Appreciation Right issued in tandem
     with an Option may be granted at the time of grant of the related Option or
     at any time thereafter during the term of the Option.

          (b)     Award Agreements for Stock Appreciation Rights shall conform
     to the requirements of this Plan and may contain such other provisions
     (including but not limited to, the permitted form of payment for the
     exercise of the Stock Appreciation Right, the requirement of employment for
     designated periods of time prior to exercise and the ability of the Board
     or Committee to revoke Stock Appreciation Rights which are issued in tandem
     with options without compensation to the Participant) as the Board or
     Committee shall deem advisable.

          (c)     Stock Appreciation Rights issued in tandem with Options shall
     be subject to the following:

               (i)     Stock Appreciation Rights shall be exercisable at such
     time or times and to the extent, but only to the extent, that the Option to
     which they relate shall be exercisable.

                                        7
<PAGE>
               (ii)     Upon exercise of Stock Appreciation Rights the holder
     thereof shall be entitled to receive a number of Shares equal in aggregate
     value to the amount by which the Fair Market Value Per Share on the date of
     such exercise shall exceed the option price per Share of the related
     Option, multiplied by the number of Shares in respect of which the Stock
     Appreciation Right shall have been exercised.

               (iii)     All or any part of the obligation arising out of an
     exercise of Stock Appreciation Rights may, at the discretion of the Board
     or Committee, be settled by the payment of cash equal to the aggregate
     value of the Shares (or a fraction of a Share) that would otherwise be
     delivered under Sec. 6.2(c)(ii).

               (iv)     Upon exercise of Stock Appreciation Rights the
     unexercised tandem options of the Participant shall automatically terminate
     upon the exercise of such Stock Appreciation Rights.

               (v)     Stock Appreciation Rights issued in tandem with Options
     shall automatically terminate upon the exercise of such Options.

     6.3  Restricted Shares
          -----------------

     Awards of Restricted Shares may be granted under this Plan from time to
time.  If Awards of Restricted Shares are granted they shall be upon the
following terms and conditions and such additional terms and conditions, not
inconsistent with the express provisions of this Plan, as the Committee in its
discretion shall deem desirable:

          (a)     Restricted Shares are Shares which are subject to such terms,
     conditions and restrictions as the Board or Committee deems appropriate,
     which may include restrictions upon the sale, assignment, transfer or other
     disposition of the Restricted Shares and the requirement of forfeiture of
     the Restricted Shares upon termination of employment under certain
     specified conditions. The Board or Committee may condition the lapsing of
     restrictions on part or all of an Award of Restricted Shares upon the
     attainment of specific performance goals or such other factors as the Board
     or committee may determine. Awards of Restricted Shares may be granted for
     no cash consideration or for such minimum consideration as may be required
     by applicable law.

          (b)     Award Agreements for Restricted Shares shall conform to the
     requirements of this Plan, and may contain such other terms and conditions
     (including but not limited to, a description of a period during which the
     Participant may not transfer the Restricted Shares and limits on
     encumbering the Restricted Shares during such period) as the Board or
     Committee shall deem desirable. To the extent permitted by Sec. 13.3
     hereof, the Board or Committee may provide for the lapse of any such term
     or condition in installments and may accelerate or waive any such term or
     condition in whole or in part, based on

                                        8
<PAGE>
     service, performance and/or such other factors or criteria as the Board or
     Committee may determine.

          (c)     Award Agreements for Restricted Shares shall provide that the
     stock certificates representing Restricted Shares shall be legended, that
     such certificates be held by a custodian or the Corporation, or that there
     be other mechanisms for maintaining control by the corporation of the
     Restricted Shares until the restrictions theron are no longer in effect.
     After the lapse, waiver or release of the restrictions imposed pursuant to
     the Award Agreement on any Restricted Shares, the corporation shall cause
     to be issued in the Participant's name a stock certificate evidencing the
     Restricted Shares with respect to which they restrictions have lapsed or
     been waived or released, free of any legend, and shall cause such stock
     certificate to be delivered to the Participant.

          (d)     Except as otherwise provided in this Plan or in the Award
     Agreement, the participant shall have, with respect to Awards or Restricted
     Shares because the Participant dies, becomes Totally Disabled or retires
     involuntarily the restrictions on all Restricted Shares awarded to a
     participant shall lapse on the date of such termination.

     6.4  Performance Awards
          ------------------

     Performance Awards may be granted under this Plan from time to time.  If
Performance Awards are granted they shall be upon the following terms and
conditions and such additional terms and conditions, not inconsistent with the
express provisions of this Plan, as the Board or Committee in its discretion
shall deem advisable:

          (a)     Performance Awards are Awards which are based upon the
     long-term performance of all or a portion of the Corporation or which are
     based upon the long-term individual performance of a Participant.
     Performance Awards may be in the form of performance units, performance
     shares and such other forms of Performance Awards which the Board or
     Committee shall determine to be desirable. Performance Awards are Awards
     which are granted to participants contingent upon (i) the future
     performance of all or a portion of the Corporation which may include,
     without limitation, performance relative to a group of companies in the
     same or relative industries, achievement of specific business objectives,
     attainment of certain growth rates, profitability goals and such other
     measurements as the Board or Committee determines to be appropriate, (ii)
     the future performance of a Participant, which may include, without
     limitation, attainment of specified goals and objectives and such other
     measurements as the Board or Committee determines to be appropriate, (iii)
     the future performance of a combination of all or a portion of the
     Corporation and a participant, or (iv) such other measurements and criteria
     as may be considered appropriate by the Board or Committee. Performance
     Awards may contain multiple performance measurements.

                                        9
<PAGE>
          (b)     Award Agreements for Performance Awards shall conform to the
     requirements of this Plan and may contain such other terms and conditions
     as the Board or Committee shall deem desirable, including but not limited
     to, applicable performance measurements are to be used singly or in
     combination, a description of whether different performance periods, the
     length of performance periods, the ability of the Board or Committee to
     amend and adjust measurements, payouts and performance periods of
     performance Awards and any requirements of employment during performance
     periods.

          (c)     Award Agreements for Performance Awards shall provide for a
     required minimum period of continuous employment during a performance
     period of a Performance Award. If such minimum period of continuous
     employment shall have elapsed, the Award Agreement may provide, or the
     Board or Committee may determine, the portion of the payment of the
     Performance Award which participant or the Participant's beneficiary, as
     applicable, is to receive at the end of the performance period.

     6.5  Bonuses
          -------

     Bonuses may be granted under this Plan from time to time on an annual or
one-time basis.  The amount of Bonuses which may be awarded shall be as
determined by the Board or Committee.  The Board or Committee may establish a
basis upon which aggregate Bonus expenditures for any year shall be determined,
which may include measurements of financial performance of the Corporation or of
a unit or department thereof, relative performance of the Corporation or of a
department thereof within the same or related industries, competitive
considerations and other measurements and criteria.

          (a)     Each Bonus may be made at the discretion of the Board or
     Committee either in cash, in Shares, in Share Units, or in another form as
     determined by the Board or Committee and may be made partly in one form and
     partly in one or more other forms. In the case of an Award of a Bonus in
     Shares or Share Units, the number shall be determined by using the Fair
     Market Value Per Share on the date of the Award of the Bonus.

          (b)     The payment of any Bonus shall be subject to such obligations
     or conditions as the Board or Committee may specify in making or
     recommending the Award of the Bonus, but Bonuses need not be evidenced by
     Award Agreements.

          (c)     When payment of all or part of a Bonus is deterred in the form
     of Shares or Share Units, the account of the Participant to whom the Bonus
     was made will be credited with an amount per Share equal to the dividends
     payable on each issued and outstanding Share ("dividend equivalents").
     Amounts thus credited shall, in the discretion of the Board or Committee,
     either:

                                       10
<PAGE>
               (i)     be paid in cash as and when each such credit shall be
     made, or

               (ii)     be credited in Shares or Share Units, with the number
     determined by using the Fair Market Value Per Share on the date of the
     dividend payment and delivered in such form and at such time or times as
     may be determined by the Committee.

          (d)     When payment of all or part of a bonus is deferred in cash,
     the Committee may provide that the account of the Participant to whom the
     Bonus was made shall be credited with amounts equivalent to interest
     ("interest equivalents"). Amounts thus credited shall be at the rate
     determined by the Committee.

          (e)     Any Bonus payable in Shares may, in the discretion of the
     Board or Committee, be paid in cash, on each date on which payment in
     Shares would otherwise have been made, in an amount equal to the Fair
     Market Value Per Share on each such date, multiplied by the number of
     Shares which would otherwise have been paid on such date.

          (f)     Bonuses may be awarded in Share Units in accordance with the
     following terms and conditions and such other terms and conditions as the
     Board or Committee may impose:

               (i)     The number of Share Units awarded with respect to any
     Bonus shall be the number determined by using the Fair Market Value Per
     share on the date of the Award of the Bonus.

               (ii)     Any Bonus made in Share Units may, in the discretion or
     on the recommendation of the Board or Committee, be paid in Shares on each
     date on which payment in cash would otherwise be made.

          (g)     In lieu of the foregoing forms of payment of Bonuses, the
     Board or Committee may specify or recommend any other form of payment which
     it determines to be of substantially equivalent economic value to the cash
     value of the Bonus including, without limitation, forms involving payments
     to a trust or trusts for the benefit of one or more Participants.

          (h)     Each payment of a Bonus that is to be made in cash shall be
     from the general funds of the corporation or its respective subsidiary or
     affiliate, as the case may be.

          (i)     In the event of the death of a Participant to whom a Bonus is
     to be or shall have been made, the Bonus or any portion thereof remaining
     unpaid shall be paid to such Participant's Beneficiary under the
     Participant's will or pursuant to the relevant laws of descent and
     distribution.

                                       11
<PAGE>
          6.6     Other Awards
                  ------------

          (a)     The Board or Committee may grant other Share based Awards
     under this Plan, including without limitation, those Awards pursuant to
     which Share are or may in the future be acquired, Awards denominated in
     Share Units, securities convertible into Shares and dividend equivalents.
     The Board or Committee shall determine the terms and conditions of such
     other Share based Awards. Shares issued in connection with such other Share
     based Awards shall be issued for such minimum considerations as shall be
     required by applicable Rule 16b-3, and such additional consideration, if
     any, as may be determined by the Board or Committee.

          (b)     The Board or Committee may also grant other non-Share based
     Awards under this Plan and shall determine the terms and conditions of such
     other non-share based Awards in tandem or combination with other Awards or
     each other, in exchange of other Awards, or in tandem or combination with,
     or as alternatives to grants or rights under any other employee plan of the
     Corporation, including any plan of any acquired entity. The Board or
     committee shall have the authority to determine the Participants for such
     Awards and all other terms and conditions of such other Awards. No
     amendment of this Plan is required for the creation of another type of
     Award.

7.   Adjustments Upon Changes in Capitalization
     ------------------------------------------

     (a)     Subject to any required action by the Corporation's stockholders,
in the event of a reorganization, stock split, stock dividend, exchange of
Shares, combination of Shares, merger, consolidation or any other change in
corporate structure of the Corporation affecting the Shares, or in the event of
a sale by the Corporation of all or a significant part of its assets, or any
distribution to its shareholders other than a normal cash dividend, the Board or
Committee may make appropriate adjustment in the number, kind, price and value
of Shares authorized by this Plan and any adjustments to outstanding Awards as
it determines appropriate so as to prevent dilution or enlargement of rights.

     (b)     The existence of an Award under this Plan shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks, ahead of or affecting the Stock or rights thereunder or convertible
thereto, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business or any other corporate act
or proceeding, whether of a similar character or otherwise.

     (c)     Awards granted hereunder during the calendar year 1994 with respect
to Shares shall be adjusted as to the number thereof, in the event of the
issuance or reacquisition of Shares for any reason by the Corporation, so as to
maintain the ration of

                                       12
<PAGE>
the number of Shares with respect to Awards outstanding on December 31, 1994 to
the number of the Corporation's issued and outstanding Shares on such date;
provided, however, that (i) where options or warrants for purchase of Shares, no
such adjustments shall be required until the conversion of securities into or
the purchase of Shares and (ii) upon any such adjustment the exercise price of
additional Shares upon a Participant's Award shall be the purchase price (or
fair market value of consideration therefore) of Shares issued which initiated
the adjustment and the Shares originally granted by the Award shall carry the
original exercise price thereof.

8.   Change in Control
     -----------------

     8.1  Definition of Change in Control
          -------------------------------

     A "Change in Control" shall be deemed to have occurred if any one or more
of the events described in paragraphs (a), (b) or (c) below occurs.

          (a)     Any "person," as such term is used in Sections 13(d) and 14(d)
     of the Exchange Act (including any group of persons with which any person
     or its affiliates or associates, as such terms are defined in Rule 12b-2
     under the Exchange Act has any agreement, arrangement or understanding,
     oral or written, regarding the acquiring, holding, voting or disposing of
     any of the Corporation's securities, but excluding a trustee or other
     fiduciary holding securities under an employee benefit plan of the
     Corporation) (i) becomes the "beneficial owner: (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly, of securities of the
     Corporation representing fifty one percent (51%) or more of the combined
     voting power of the Corporation's then outstanding securities (hereinafter
     referred to as an "Acquiring Person"); or

          (b)     In any two year period persons being a majority of the Board
     shall cease to be so unless the nomination of the new directors during such
     period was approved by at least a majority of the directors then still in
     office who were directors at the beginning of the period; or

          (c)     A consolidation or merger or "Business Combination," as that
     term is defined as of the effective date of this Plan in Section 203(c)(3)
     of the General Corporation law of Delaware, of the Corporation shall occur
     (with the term "interested shareholder" as used in that Section being
     deemed to refer to an Acquiring Person) in which the Corporation is not the
     surviving Corporation and pursuant to which the Corporation's shares are
     converted to cash, securities or other property, but not a business
     combination where shareholders of the Corporation prior to the business
     combination have substantially the same proportionate ownership in a
     business entity after the merger; or

          (d)     The Shareholders of the Corporation shall approve any plan for
     liquidation or dissolution of the Corporation not otherwise involving a
     transaction

                                       13
<PAGE>
     where shareholders of the Corporation prior to the transaction have
     substantially the same proportionate ownership of a business entity after
     the transaction.

          (e)     In no event, however, shall a Change in Control be deemed to
     have occurred with respect to a Participant, if that Participant is part of
     an Acquiring Person which consummates the change in Control transaction. A
     Participant shall be deemed "part of an Acquiring Person" for purposes of
     the preceding sentence if the Participant is an equity participant or has
     agreed to become an equity participant in the Acquiring Person (except for
     (i) passive ownership of less than three percent of the securities of the
     Acquiring Person; or (ii) ownership of equity participation in the
     Acquiring Person which is otherwise not deemed to be significant, as
     determined prior to the Change in Control by a majority of the
     disinterested Continuing Directors).

     8.2  Effect of Change in Control
          ---------------------------

     Upon the occurrence of an event of Change in Control, unless otherwise with
respect to any Award specifically prohibited by the terms of the second
paragraph of Section 6:

          (a)     Any and all Options and Stock Appreciation Rights shall become
     immediately exercisable.

          (b)     Any restriction periods and restrictions imposed on Restricted
     Shares (except such as may be required by relevant securities laws) shall
     lapse, and within ten (10) business days after the occurrence of a Change
     in Control, the stock certificates representing Restricted Shares, without
     any restrictions or legend thereon (except a legend as may be required by
     relevant securities laws), shall be delivered to the applicable
     Participants;

          (c)     The goal, objective, target value or the like, attainable
     under all performance Awards shall be deemed to have been fully earned for
     the entire performance period as of the effective date of the Change in
     Control, except that all performance Awards which shall have been
     outstanding less than six (6) months on the effective date of the Change in
     Control shall not be deemed to have earned the goal, objective, target
     value, or the like; and

          (d)     Subject to Sec. 14.3 hereof, all such other actions and
     modifications to the Awards as determined by the Board or Committee to be
     appropriate before the Change in Control of the Corporation shall become
     effective.

9.   Relationship of the Plan to Benefit Plans
     -----------------------------------------

     The amount of Bonuses to any Participant under this Plan shall be eligible
for inclusion in the Participant's earnings based for the purpose of determining
the benefits to which the Participant is entitled under retirement, pension,
excess benefit, thrift,

                                       14
<PAGE>
savings, profit-sharing, insurance, long-term disability and other benefit
plans, if any, of the Corporation as determined by the Board or Committee.  No
other income of a Participant attributable to this Plan shall be included in the
Participant's earning for purposes of any benefit plan in which the Participant
may be eligible to participate.

10.  Effect of the Plan on Right to Continued Employment and Interest in
     -------------------------------------------------------------------
     Particular Property
     -------------------

     (a)     None of the existence of this Plan, any Awards granted pursuant
hereto or any Awards granted pursuant hereto or any Award Agreement shall create
any right to continued employment of any Participant by the Corporation. No
Participant shall have, under any circumstances, any interest whatsoever, vested
or contingent, in any particular property or asset of the Corporation or in any
particular Share or Shares of Restricted Shares of the Corporation that may be
held by the Corporation (other than Restricted Shares held by a custodian) by
virtue of any Award. A Participant may be granted additional Awards under this
Plan under such circumstances and at such times as the Board or Committee may
determine; provided, however, that no Participant shall be entitled to any Award
in the absence of a specific grant by the Board or Committee of an Award,
notwithstanding the prior grant of an Award to such Participant.

     (b)     This Plan shall not be deemed a substitute for, and shall not
preclude the establishment or continuation of any other plan, practice or
arrangement that may now or hereafter be provided for the payment of
compensation, special awards or benefits to directors, officer, employees,
consultants and agents of the corporation and its subsidiaries generally, or to
any class or group of employees, including without limitation, any retirement,
pension, excess benefit, thrift, savings, profit-sharing, insurance, long-term
disability, health care plans or other employee benefit plans.  Any such
arrangements may be authorized by the Corporation and payment thereunder made
independently of this Plan.

11.  Withholding Taxes and Deferrals
     -------------------------------

     11.1     Cash Withholding
              ----------------

          The Corporation and its participating subsidiaries shall have the
right to deduct from any cash payment made under Awards under this Plan any
federal, state, provincial or local income, or other taxes required by law to be
withheld with respect to such payment or to take such other action as may be
necessary in the opinion of the Corporation to satisfy all obligations for the
payment of such taxes.

     11.2     Share Withholding
              -----------------

     Any Share based Award may provide by the grant thereof that the recipient
of such Award may elect, in accordance with any applicable law, rules and
regulations, to pay a portion or all of the amount of such minimum required
withholding taxes in Shares.  In such event, the Participant shall authorize the
Corporation to withhold, or shall agree to

                                       15
<PAGE>
deliver to the Corporation, Shares owned by such Participant or a portion of the
Shares that otherwise would be distributed to such Participant, having a Fair
Market Value equal to the amount of withholding tax liability.

     11.3     Deferrals
              ---------

     The Board or Committee may require or permit a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise, the
satisfaction of any requirements or goals or lapse or waiver of restrictions of
an Award made under this Plan.  If any such deferment election is required or
permitted, the Board or Committee shall establish rules and procedures for such
payment deferrals.

12.  Compliance With Applicable Legal Requirements
     ---------------------------------------------

     No certificate for Shares distributable pursuant to this Plan shall be
issued and delivered unless the issuance of such certificate complies with all
applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as
amended from time to time or any successor statute, the Exchange Act and the
requirements of the exchanges on which Shares may, at the time, be listed, and
the provisions of any foreign securities laws or the rules of foreign securities
exchanges, where applicable.

13.  Amendments
     ----------

     13.1     Plan Amendments
              ---------------

     The Board may, insofar as permitted by law, form time to time, with respect
to any Shares at the time not subject to Awards, suspend or discontinue this
Plan or revise or mend it in any respect whatsoever, provided, however, unless
the Committee or the Board, as appropriate, specifically otherwise provides, any
revision or amendment that would cause this Plan to fail to comply with any
requirement of applicable law, regulation or rule if such amendment were not
approved by the stockholders of the Corporation shall not be effective unless
and until the approval of the stockholders of the Corporation is obtained.

     13.2     Award Amendments
              ----------------

      Subject to the terms and conditions and within the limitations of this
Plan, the Board or Committee may amend, cancel, modify, or extend outstanding
Awards granted under this Plan.

     13.3     Rights of Participants
              ----------------------

     No amendment, suspension or termination of this Plan nor any amendment,
cancellation or modification of any outstanding Award or Award Agreement that
would

                                       16
<PAGE>
adversely affect the right of any Participant with respect to an Award
previously granted under this Plan will be effective without the written consent
of the affected participant.  Such written consent may be obtained
simultaneously with the grant of any Award.

     13.4     Rule 16b-3
              ----------

     This Plan is intended to comply with Rule 16b-3 with respect to
Participants, if any, who are subject to Sec. 16 of the Exchange Act and in the
event that the Corporation shall become subject to said Sec. 16.  Should the
requirements of Rule 16b-3 change, the Board or the Committee, as appropriate,
may amend the Plan to comply with the requirements of the amended Rule 16b-3 or
its successor provision or provisions.

14.  Miscellaneous Provisions
     ------------------------

     14.1     Awards in Various Countries
              ---------------------------

     The Board or Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of various countries in which the Corporation
or its subsidiaries may operate to assure the viability of the benefits of
Awards made to participants employed in such countries and to meet the
objectives of this Plan.

     14.2     Transferability
              ---------------

     (a)     Awards may not be pledged or assigned and may otherwise be
transferred only to the extent provided herein or in an Award Agreement not
inconsistent herewith, provided, however, that an Option or Stock Appreciation
Right or any other benefit or Award hereunder deemed to be a derivative security
shall not be transferable other than by will or the laws of descent and
distribution and shall be exercisable during a Participant's lifetime only by
him or by his guardian or legal representative or pursuant to a "qualified
domestic relations order" as defined by the Code, or such order under the laws
of other jurisdictions as shall be similar in effect to a qualified domestic
relations order.

     (b)     Notwithstanding the foregoing, however, the Participant may, with
the consent of the Board or Committee and subject to such terms and conditions
as they may impose, assign or transfer an Award to or among immediate family
members, their issue or spouses or to a trust or family partnership of which
such immediate family members, their issue or spouses, are beneficiaries or
partners, as the case may be.

     14.3     Arbitration; Governing Law
              --------------------------

     (a)     The Shares are registered in the United States under the Exchange
Act and are listed for trading on the United States stock exchange known as The
NASDAQ Stock Market, Inc.  Any and all disputes whatsoever between a Participant
and the Corporation concerning the administration of this Plan, the
interpretation and effect of an Award

                                       17
<PAGE>
Agreement or of this Plan or the rights of a Participant under an Award
Agreement shall be finally determined before one neutral arbitrator in the City
of Stamford, Connecticut. U.S.A. under the rules of commercial arbitration of
the American Arbitration Association then in effect and judgment upon any award
by such arbitrator may be entered in any Court having jurisdiction or
application may be made to such court for a judicial acceptance of the award and
an order of enforcement, as the case may be.  The arbitrator hereunder shall
have no power or authority to award consequential, punitive or statutory
damages.

     (b)     This Plan, its administration and all Awards granted hereunder, the
terms and provisions of any related Award Agreements and the rights of all
Participants shall be governed and interpreted in accordance with the laws of
Connecticut U.S.A.

                                       18

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