Document:

Exhibit
10.6

AMENDED AND RESTATED

SEVERANCE
PROTECTION AGREEMENT

THIS AGREEMENT is made as of 9th day of June 2005 by and between Axsys
Technologies, Inc. (the “Company”) and Scott B. Conner (the “Executive”).

WHEREAS, the Board of
Directors of the Company (the “Board”) recognizes that the possibility of a
Change in Control (as hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant distraction of the
Company’s key management personnel because of the uncertainties inherent in
such a situation;

WHEREAS, the Board has
determined that it is essential and in the best interests of the Company and
its stockholders for the Company to retain the services of the Executive in the
event of a threat or occurrence of a Change in Control and to ensure the
Executive’s continued dedication and efforts in such event without undue
concern for the Executive’s personal financial and employment security;

WHEREAS, in order to
induce the Executive to remain in the employ of the Company and/or one of its
Affiliates (the entity or entities employing the Executive, the “Employing
Affiliate”), particularly in the event of a threat or the occurrence of a
Change in Control, the Company desires to enter into this Agreement with the
Executive to provide the Executive with certain benefits in the event the
Executive’s employment is terminated as a result of, or in connection with, a
Change in Control; and

WHEREAS, the Company and
the Executive desire for this Amended and Restated Severance Protection
Agreement to amend and supersede the Severance Protection Agreement, dated
December 3, 2004, between the Company and the Executive and any other severance
agreements entered into prior to the date hereof.

NOW, THEREFORE, in
consideration of the respective agreements of the parties contained herein, it
is agreed as follows:

1.             Term of Agreement.  This Agreement shall commence as of the date
of this Agreement, and shall continue in effect until January 1, 2007 (the “Term”);
provided, however, that on January 1, 2006, and on
each January 1 thereafter, the Term shall automatically be extended for one
year unless either the Executive or the Company shall have given written notice
to the other at least ninety days prior thereto that the Term shall not be so
extended; provided, further, however, that
following the occurrence of a Change in Control, the Term shall not expire
prior to the expiration of twenty-four months after such occurrence.

2.             Termination of Employment.  If, during the Term, the Executive’s
employment with the Company or an Employing Affiliate shall be terminated
within twenty-four months following a Change in Control, the Executive shall be
entitled to the following compensation and benefits:

 

(a)           If
the Executive’s employment with the Company or an Employing Affiliate shall be
terminated (1) by the Company for Cause or Disability, (2) by reason of the
Executive’s death, or (3) by the Executive other than for Good Reason or
pursuant to a Window Period Termination, the Company shall pay to the Executive
the Accrued Compensation.

(b)           If
the Executive’s employment with the Company or an Employing Affiliate shall be
terminated for any reason other than as specified in Section 2(a), or if the
Executive terminates his employment with or without Good Reason during the one
month period commencing six months following a Change in Control (a “Window
Period Termination”), the Executive shall be entitled to the following:

(1)           the
Company shall pay the Executive the Accrued Compensation;

(2)           the
Company shall pay the Executive as severance pay an amount equal to 2.99 times
the sum of (a) the highest annual base salary paid to the Executive during the
12-month period immediately prior to the Termination Date and (b) the average
of the annual cash bonuses paid to the Executive during the 3 calendar years
prior to the year in which the Termination Date occurs (prorated for any lesser
period during which the Executive has been employed or for which bonuses have
been determined, if applicable, and, in the case of each of (a) and (b),
determined without reduction for any portion thereof that has been deferred by
the Executive); provided, however, that, if the Executive has been employed for
less than a full year as of the Termination Date, the amount of clause (b)
hereof shall be equal to the Executive’s target bonus amount for such year,
prorated for the period during which the Executive has been employed; and

(3)           for
twelve months following the Termination Date (the “Continuation Period”), the
Company shall continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental, prescription
drug and hospitalization coverages and benefits provided to the Executive
immediately prior to a Change in Control (the “Benefits Continuation”), or, if
greater, the coverages and benefits provided at any time thereafter; provided, however, that within five days following the
Termination Date, the Executive may elect to receive from the Company in cash,
in lieu of the Benefits Continuation, the value of the Benefits
Continuation.  The coverages and benefits
(including deductibles and costs to the Executive) provided in this
Section 2(b)(3) during the Continuation Period shall be no less favorable
to the Executive and his dependents and beneficiaries than the most favorable
of such coverages and benefits referred to above.  Notwithstanding the foregoing, or any other
provision of this Agreement, for purposes of determining the period of
continuation coverage to which the Executive or any of the Executive’s
dependents is entitled pursuant to Section 4980B of the Internal Revenue Code
of 1986, as amended (the “Code”), under the Company’s medical, dental and other
group health plans, or successor plans, the Executive’s “qualifying event” will
be the termination of the Continuation Period and the Executive will be
considered to have remained actively employed on a full-time basis through that
date.  The Company’s obligation hereunder
with respect to the foregoing coverages and benefits shall be reduced to the
extent that the Executive obtains any such coverages and benefits pursuant to a
subsequent employer’s benefit plans, in which case the Company may reduce any
of the coverages or benefits it is required to provide the Executive hereunder
so long as the aggregate coverages and benefits 

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(including deductibles and costs to the Executive) of the combined
benefit plans are no less favorable to the Executive than the coverages and
benefits required to be provided hereunder. 
This Section 2(b)(3) shall not be interpreted so as to limit any
benefits to which the Executive, his dependents or beneficiaries may be
entitled under any of the Company’s employee benefit plans, programs or
practices following the Executive’s termination of employment, including but
not limited to retiree medical and life insurance benefits.

(c)           The
cash amounts provided for in Sections 2(a) and 2(b) shall be paid in a
single lump sum cash payment within ten days after the Termination Date (or
earlier, if required by applicable law).

(d)           The
severance pay and benefits provided for in this Section 2 shall be in lieu
of any other severance pay to which the Executive may be entitled under any
severance or employment agreement with the Company or any other plan, agreement
or arrangement of the Company or any other Affiliate of the Company.  The Executive’s entitlement to any
compensation or benefits other than as provided herein shall be determined in
accordance with the employee benefit plans of the Company and any of its
Affiliates and other applicable agreements, programs and practices as in effect
from time to time.

(e)           If
the Executive’s employment is terminated by the Company or an Employing
Affiliate without Cause prior to the date of a Change in Control but the
Executive reasonably demonstrates that such termination (1) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control (a “Third Party”) and who effectuates
a Change in Control or (2) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or proposed and
which actually occurs, such termination shall be deemed to have occurred after
a Change in Control, it being agreed that any such action taken following
shareholder approval of a transaction which if consummated would constitute a
Change in Control, shall be deemed to be in anticipation of a Change in Control
provided such transaction is actually consummated.

3.             Effect of Section 280G of the Internal Revenue Code.

(a)           Anything
in this Agreement to the contrary notwithstanding, in the event that this
Agreement becomes operative and it is determined (as hereafter provided) that
any payment (other than the Gross-Up payments provided for in this Section 3
and Annex A) or distribution by the Company or any of its Affiliates to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise pursuant to
or by reason of any other agreement, policy, plan, program or arrangement,
including without limitation any stock option, performance share, performance
unit, stock appreciation right or similar right, or the lapse or termination of
any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision thereto) by reason of being considered “contingent on a
change in ownership or control” of the Company, within the meaning of Section
280G of the Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or any interest or penalties with respect to
such tax (such tax or  taxes, together
with any such interest and penalties, being hereafter collectively referred to
as the 

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“Excise Tax”), then the Executive will be entitled to receive an
additional payment or payments (collectively, a “Gross-Up Payment”).  The Gross-Up Payment will be in an amount
such that, after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including any Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.  For purposes of determining the amount of the
Gross-Up Payment, the Executive will be considered to pay (x) federal income
taxes at the highest rate in effect in the year in which the Gross-Up Payment
will be made and (y) state and local income taxes at the highest rate in effect
in the state or locality in which the Gross-Up Payment would be subject to
state or local tax.

(b)           The
obligations set forth in Section 3(a) will be subject to the procedural
provisions described in Annex A.

4.             Notice of Termination.  Following a Change in Control, any intended
termination of the Executive’s employment by the Company or an Employing
Affiliate shall be communicated by a Notice of Termination from the Company to
the Executive, and any intended termination of the Executive’s employment by
the Executive for Good Reason shall be communicated by a Notice of Termination
from the Executive to the Company.

5.             Fees and Expenses.  The Company shall pay, as
incurred, all legal fees and related expenses (including the costs of experts,
evidence and counsel) that the Executive may reasonably incur following a
Change in Control as a result of or in connection with (a) the Executive’s
contesting, defending or disputing the basis for the termination of the Executive’s
employment, (b) the Executive’s hearing before the Board of Directors of
the Company as contemplated in Section 16.4 or (c) the Executive’s
seeking to obtain or enforce any right or benefit provided by this Agreement or
by any other plan or arrangement maintained by the Company or one of its
Affiliates under which the Executive is or may be entitled to receive benefits.

6.             Unauthorized Disclosure.

(a)           The
Executive agrees and understands that during the Executive’s employment with
the Company or an Employing Affiliate, the Executive has been and will be
exposed to and receive information relating to the affairs of the Company
considered by the Company to be confidential and in the nature of trade secrets
(including but not limited to procedures, memoranda, notes, records and
customer lists, whether such information has been or is made, developed or
compiled by the Executive or otherwise has been or is made available to him)
(any and all such information, the “Confidential Information”).  The Executive agrees that, during the Term
and thereafter, he shall keep such Confidential Information confidential and
will not disclose such Confidential Information, either directly or indirectly,
to any third person or entity without the prior written consent of the Company;
provided, however, that
(i) the Executive shall have no such obligation to the extent such
Confidential Information is or becomes publicly known other than as a result of
the Executive’s breach of his obligations hereunder or is received by the Executive
following the Termination Date and (ii) the Executive may, after giving
prior notice to the Company to the extent practicable under the circumstances, 

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disclose such Confidential Information to the extent required by
applicable laws or governmental regulations or judicial or regulatory process.

(b)           The
Executive agrees that all Confidential Information is and will remain the
property of the Company.  The Executive
further agrees that, during the Term and thereafter, he shall hold in the
strictest confidence all Confidential Information, and shall not, directly or
indirectly, duplicate, sell, use, lease, commercialize, disclose or otherwise
divulge to any person or entity any portion of the Confidential Information or
use any Confidential Information for his own benefit or profit or allow any
person or entity, other than the Company and its authorized employees, to use
or otherwise gain access to any Confidential Information.

(c)           All
memoranda, notes, records, customer lists and other documents made or compiled
by the Executive or otherwise made available to him concerning the business of
the Company or its subsidiaries or Affiliates shall be the Company’s property
and shall be delivered to the Company upon the termination of the Executive’s
employment with the Company or an Employing Affiliate or at any other time upon
request by the Company, and the Executive shall retain no copies of those
documents.  The Executive shall never at
any time have or claim any right, title or interest in any material, invention
or matter of any sort created, prepared or used in connection with the business
of the Company or its subsidiaries or Affiliates.

7.             Non-competition.

(a)           By
and in consideration of the Company’s entering into this Agreement and the
payments to be made and benefits to be provided by the Company hereunder and
further in consideration of the Executive’s exposure to the proprietary
information of the Company, the Executive agrees that the Executive will not,
during the Term, and thereafter during the Non-competition Term (as hereinafter
defined), directly or indirectly, own, manage, operate, join, control, be
employed by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including but not limited to holding
any position as a shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below); provided, however,
that in no event shall ownership of less than one percent of the outstanding
equity securities of any issuer whose securities are registered under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), standing
alone, be prohibited by this Section 7. 
For purposes of this paragraph, the term “Restricted Enterprise” shall
mean any person, corporation, partnership or other entity that is engaged in
the precision systems or industrial components business or otherwise competes,
directly or indirectly, with any business or activity conducted or proposed to
be conducted by the Company or any of its subsidiaries or Affiliates as of the
date of the Executive’s termination of employment.  Following termination of employment, upon
request of the Company, the Executive shall notify the Company of the Executive’s
then current employment status.  For
purposes of this Agreement, the “Non-competition Term” shall mean the period
beginning on the Termination Date and ending on the first anniversary of such
date. Any material breach of the terms of this paragraph shall be considered
Cause under Section 16.4.

(b)           The
Executive agrees that any breach of the terms of this Section 7 would
result in irreparable injury and damage to the Company and/or its subsidiaries
or Affiliates for 

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which the Company and/or its subsidiaries or Affiliates would have no
adequate remedy at law; the Executive therefore also agrees that in the event
of said breach or any threat of breach, the Company and/or its subsidiaries or
Affiliates, as applicable, shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Executive and/or any and all persons and/or entities
acting for and/or with the Executive, without having to prove damages, in
addition to any other remedies to which the Company and/or its subsidiaries or
Affiliates may be entitled at law or in equity. 
The terms of this paragraph shall not prevent the Company and/or its
subsidiaries or Affiliates from pursuing any other available remedies for any
breach or threatened breach hereof, including but not limited to the recovery
of damages from the Executive.  The
Executive and the Company further agree that the provisions of the covenants
contained in this Section 7 are reasonable and necessary to protect the businesses
of the Company and its subsidiaries or Affiliates because of the Executive’s
access to Confidential Information and his material participation in the
operation of such businesses.  Should a
court or arbitrator determine, however, that any provision of the covenants
contained in this Section 7 is not reasonable or valid, either in period of
time, geographical area, or otherwise, the parties hereto agree that such
covenants should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable or valid.

The existence of
any claim or cause of action by the Executive against the Company and/or its
subsidiaries or Affiliates, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
covenants contained in this Section 7.

8.             Notice. 
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement (including any Notice of Termination) shall be
in writing, shall be signed by the Executive if to the Company or by a duly
authorized officer of the Company if to the Executive, and shall be deemed to
have been duly given when personally delivered or sent by certified mail,
return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided that all notices to
the Company shall be directed to the attention of the Board with a copy to the
Secretary of the Company.  All notices
and communications shall be deemed to have been received on the date of
delivery thereof or on the third business day after the mailing thereof
(whichever is earlier), except that notice of change of address shall be
effective only upon receipt.

9.             Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any other
Affiliate of the Company for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under any
other agreements with the Company or any other Affiliate of the Company.  Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of the
Company or any other Affiliate of the Company shall be payable in accordance
with such plan or program, except as explicitly modified by this Agreement.

10.           (a)           Full
Settlement.  The Company’s obligation
to make the payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any circumstances, including
but not limited to any set-off, counterclaim, defense, 

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recoupment, or other
claim, right or action which the Company may have against the Executive or
others.

(b)           No
Mitigation.  The Executive shall not
be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no such payment shall be
offset or reduced by the amount of any compensation or benefits provided to the
Executive in any subsequent employment except as provided in
Section 2(b)(3).

11.           Miscellaneous.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Company.  No waiver by any party hereto at any time of
any breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party which are not
expressly set forth in this Agreement.

12.           Successors; Binding Agreement.

(a)           This
Agreement shall be binding upon and shall inure to the benefit of the Company
and its Successors and Assigns.  The
Company shall require its Successors and Assigns to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place.

(b)           Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal personal representative.

13.           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without giving effect to the conflict of laws principles thereof.  Any action brought by any party to this
Agreement shall be brought and maintained in a court of competent jurisdiction
in the State of Delaware.

14.           Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

15.           Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto, with respect to the subject matter hereof.

16.           Definitions.

16.1         Accrued Compensation.  For purposes of this Agreement, “Accrued
Compensation” shall mean all amounts of compensation for services rendered to
the Company or 

 7
 

an Employing Affiliate that have been earned or accrued through the
Termination Date but that have not been paid as of the Termination Date,
including (a) base salary, (b) reimbursement for reasonable and necessary
business expenses incurred by the Executive on behalf of the Company or an
Employing Affiliate during the period ending on the Termination Date and (c)
vacation pay; provided, however, that Accrued
Compensation shall not include any amounts described in clause (a) that have been
deferred pursuant to any salary reduction or deferred compensation elections
made by the Executive.

16.2         Affiliate.  For purposes of this Agreement, “Affiliate,”
means, with respect to any Person, any entity, directly or indirectly,
controlled by, controlling or under common control with such Person.

16.3         [Intentionally
Omitted.]

16.4         Cause.  For purposes of this Agreement, a termination
of employment is for “Cause” if the Executive

(a)           has been convicted of a felony
(including a plea of nolo  contendere);

(b)           intentionally and continually failed
substantially to perform his reasonably assigned duties with the Company or an
Employing Affiliate (other than a failure resulting from the Executive’s
incapacity due to physical or mental illness or from the assignment to the
Executive of duties that would constitute Good Reason) which failure continued
for a period of at least thirty days after a written notice of demand for
substantial performance, signed by a duly authorized officer of the Company,
has been delivered to the Executive specifying the manner in which the
Executive has failed substantially to perform such duties; or

(c)           intentionally engaged in illegal
conduct or willful misconduct, which is demonstrably and materially injurious
to the Company or an Employing Affiliate.

For purposes of
this Agreement, no act, or failure to act, on the Executive’s part shall be
considered “intentional” unless the Executive has acted, or failed to act, with
a lack of good faith and with a lack of reasonable belief that the Executive’s
action or failure to act was in the best interest of the Company or an
Employing Affiliate.  Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Company’s Chairman of the Board, Chief
Executive Officer or a senior officer of the Company or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company or an Employing Affiliate. 
The termination of employment of the Executive shall not be deemed to be
for Cause pursuant to subparagraph (b) or (c) above unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board)
finding 

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that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (b) or (c) above, and specifying the particulars thereof
in detail.  Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform by the
Executive after a Notice of Termination is given to the Company by the
Executive shall constitute Cause for purposes of this Agreement.

16.5         Change
in Control.  A “Change in Control”
shall mean the occurrence during the Term of:

(a)           An acquisition (other than directly
from the Company) of any common stock of the Company (“Common Stock”) or other
voting securities of the Company entitled to vote generally for the election of
directors (the “Voting Securities”) by any “Person” (as the term “person” is
used for purposes of Section 13(d) or 14(d) of the Exchange Act),
immediately after which such Person has “Beneficial Ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent or more of the then outstanding shares of Common Stock or the combined
voting power of the Company’s then outstanding Voting Securities; provided, however, in determining whether a Change in
Control has occurred, Common Stock or Voting Securities which are acquired in a
Non-Control Acquisition (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control.  A “Non-Control Acquisition” shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part
thereof) maintained by (A) the Company or (B) any corporation or
other Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by the Company
(a “Subsidiary”), (ii) the Company or its Subsidiaries or (iii) any
Person in connection with a Non-Control Transaction (as hereinafter defined);

(b)           The individuals who, as of the date
of this Agreement, are members of the Board (the “Incumbent Board”), cease for
any reason to constitute at least a majority of the members of the Board; provided, however, that if the election, or nomination for
election by the Company’s shareholders, of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director shall,
for purposes of this Agreement, be considered a member of the Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(c)           The consummation of:

(1)           A merger, consolidation,
reorganization or other business combination with or into the Company or in
which securities of the Company are issued, unless such merger, consolidation,
reorganization or other business combination is a “Non-Control Transaction.”  A “Non-Control Transaction” shall mean a
merger, consolidation, reorganization or other business combination with or
into the Company or in which securities of the Company are issued where:

 9
 

 

(A)          the
shareholders of the Company, immediately before such merger, consolidation,
reorganization or other business combination own directly or indirectly immediately
following such merger, consolidation, reorganization or other business
combination, at least fifty percent of the combined voting power of the
outstanding voting securities of the corporation resulting from such merger or
consolidation, reorganization or other business combination (the “Surviving
Corporation”) in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation,
reorganization, or other business combination,

(B)           the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation,
reorganization or other business combination constitute at least two-thirds of
the members of the board of directors of the Surviving Corporation, or a
corporation beneficially directly or indirectly owning a majority of the
combined voting power of the outstanding voting securities of the Surviving
Corporation, and

(C)           no
Person other than (i) the Company, (ii) any Subsidiary,
(iii) any employee benefit plan (or any trust forming a part thereof)
that, immediately prior to such merger, consolidation, reorganization or other
business combination was maintained by the Company, the Surviving Corporation,
or any Subsidiary, or (iv) any Person who, immediately prior to such
merger, consolidation, reorganization or other business combination had
Beneficial Ownership of fifty percent or more of the then outstanding Voting
Securities or common stock of the Company, has Beneficial Ownership of fifty
percent or more of the combined voting power of the Surviving Corporation’s
then outstanding voting securities or its common stock.

(2)           A complete liquidation or dissolution
of the Company; or

(3)           The sale or other disposition of all
or substantially all of the assets of the Company to any Person (other than (i)
any such sale or disposition that results in at least fifty percent of the
Company’s assets being owned by a Subsidiary or Subsidiaries or (ii) a
distribution to the Company’s stockholders of the stock of a Subsidiary or any
other assets);

provided, however,
that no transaction or series of transactions by which Stephen W. Bershad, or
any Person in which Stephen W. Bershad has Beneficial Ownership, directly or
indirectly, of 25 percent of the outstanding ownership interests or voting
power, acquires fifty percent or more of the then outstanding shares of Common
Stock or the combined voting power of the Company’s then outstanding Voting
Securities shall constitute a Change in Control for purposes of this Agreement
(regardless of the form of transaction or series of transactions by which such
acquisition occurs (including, without limitation, any acquisition described in
clause (a) hereof or any merger or other transaction described in clause (c)
hereof)).

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than
the permitted amount of the then outstanding Common Stock or Voting Securities
as a result of the acquisition of Common Stock or Voting Securities by the
Company which, by reducing the

 

 10

number of shares
of Common Stock or Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of shares of Common Stock or Voting
Securities by the Company, and after such share acquisition by the Company, the
Subject Person becomes the Beneficial Owner of any additional shares of Common
Stock or Voting Securities which increase the percentage of the then
outstanding shares of Common Stock or Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.

16.6         Company.  For purposes of this Agreement, all
references to the Company shall include its Successors and Assigns.

16.7         Disability.  For purposes of this Agreement, “Disability”
shall mean a physical or mental infirmity which impairs the Executive’s ability
to substantially perform his duties with the Company or an Employing Affiliate
for six consecutive months, and within the time period set forth in a
Notice of Termination given to the Executive (which time period shall not be
less than thirty days), the Executive shall not have returned to full-time
performance of his duties; provided, however, that if the Company’s Long Term
Disability Plan, or any successor plan (the “Disability Plan”), is then in
effect, the Executive shall not be deemed disabled for purposes of this
Agreement unless the Executive is also eligible for long-term disability
benefits under the Disability Plan (or similar benefits in the event of a
successor plan).

16.8         Good Reason.

(a)           For
purposes of this Agreement, “Good Reason” shall mean the occurrence after a
Change in Control of any of the following events or conditions:

(1)           a material adverse change in the
Executive’s duties or responsibilities (including reporting responsibilities),
except in connection with the termination of his employment for Disability,
Cause, as a result of his death or by the Executive other than for Good Reason;

(2)           a reduction in the Executive’s annual
base salary;

(3)           the relocation of the offices of the
Company or an Employing Affiliate at which the Executive is principally
employed to a location more than 25 miles from the location of such
offices immediately prior to a Change in Control, or the requirement that the
Executive be based anywhere other than at such offices, except to the extent
the Executive was not previously assigned to a principal location and except
for required travel on the business of the Company or an Employing Affiliate to
an extent substantially consistent with the Executive’s business travel
obligations at the time of a Change in Control; or

(4)           the failure by the Company or an
Employing Affiliate to pay to the Executive any portion of the Executive’s
current compensation or to pay to the Executive any portion of an installment
of deferred compensation under any deferred 

 11
 

compensation program of
the Company or an Employing Affiliate in which the Executive participated,
within seven days of the date such compensation is due.

(b)           Any event or condition described in
Section 16.8(a)(1) through (4) which occurs prior to a Change in
Control but which the Executive reasonably demonstrates (i) was at the
request of a Third Party who effectuates a Change in Control or
(ii) otherwise arose in connection with or in anticipation of a Change in
Control which has been threatened or proposed and which actually occurs, shall
constitute Good Reason for purposes of this Agreement notwithstanding that it
occurred prior to a Change in Control, it being agreed that any such action
taken following shareholder approval of a transaction which if consummated
would constitute a Change in Control, shall be deemed to be in anticipation of
a Change in Control provided such transaction is actually consummated.

16.9         Notice of Termination.  For purposes of this Agreement, following a
Change in Control, “Notice of Termination” shall mean a written notice of
termination of the Executive’s employment, signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive,
which indicates the specific termination provision in this Agreement, if any,
relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. 
The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason, Disability or Cause shall not serve to waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.

16.10       Successors and Assigns.  For purposes of this Agreement, “Successors
and Assigns” shall mean, with respect to the Company, a corporation or other
entity acquiring all or substantially all the assets and business of the
Company, as the case may be, whether by operation of law or otherwise.

16.11       Termination Date.  For purposes of this Agreement, “Termination
Date” shall mean (a) in the case of the Executive’s death, his date of
death, (b) if the Executive’s employment is terminated for Disability,
thirty days after Notice of Termination is given (provided that the
Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty day period) and (c) if the Executive’s
employment is terminated for any other reason, the date specified in the Notice
of Termination (which, in the case of a termination for Cause shall not be less
than thirty days, and in the case of a termination for Good Reason shall
not be more than sixty days, from the date such Notice of Termination is
given); provided, however, that if within
thirty days after any Notice of Termination is given the party receiving
such Notice of Termination in good faith notifies the other party that a
dispute exists concerning the basis for the termination, the Termination Date
shall be the date on which the dispute is finally determined, either by mutual
written agreement of the parties, or by the final judgment, order or decree of
a court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been taken). 
Notwithstanding the pendency of any such dispute, the Company or an
Employing Affiliate shall continue to pay the Executive his base salary and
continue the Executive as a participant (at or above the level provided prior
to the date 

 12
 

of such dispute) in all compensation, incentive, bonus, pension, profit
sharing, medical, hospitalization, prescription drug, dental, life insurance
and disability benefit plans in which he was participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved
whether or not the dispute is resolved in favor of the Company, and the
Executive shall not be obligated to repay to the Company or an Employing Affiliate
any amounts paid or benefits provided pursuant to this sentence.

17.           Compliance with Section 409A of
the Code.  To the extent applicable,
it is intended that this Agreement comply with the provisions of
Section 409A of the Code.  This
Agreement shall be administered in a manner consistent with this intent, and
any provision that would cause the Agreement to fail to satisfy
Section 409A of the Code shall have no force and effect until amended to
comply with Section 409A of the Code (which amendment may be retroactive
to the extent permitted by Section 409A of the Code and may be made by the
Company without the consent of the Executive). 
In particular, to the extent the Executive becomes entitled to receive payment
subject to Section 409A upon an event that does not constitute a permitted
distribution event under Section 409A(a)(2) of the Code, then
notwithstanding anything to the contrary in this Agreement, payment will be
made to the Executive on the earlier of (a) the Executive’s “separation
from service” with the Company (determined in accordance with
Section 409A); provided, however, that if the Executive is a “specified
employee” (within the meaning of Section 409A), the Executive’s date of
payment shall be made on the date which is 6 months after the date of the
Executive’s separation from service with the Company or (b) the Executive’s
death.

18.           Prior Agreement.  This Agreement supersedes, as of the date
first above written, the Severance Protection Agreement, dated as of December
3, 2004 (the “Prior Agreement”) between the Company and the Executive and the
Executive agrees that he has no further rights under the Prior Agreement.

 13
 

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officers and the Executive has executed this Agreement as of
the day and year first above written.

	
  

  	
  AXSYS
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen W. Bershad

  	
   

  
	
   

  	
  By: Stephen W.
  Bershad

  
	
   

  	
  Its: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Scott B. Conner

  	
   

  
	
   

  	
  Scott B. Conner

  
	
   

  	
  17 Orchard Road

  
	
   

  	
  West Hartford,
  CT 06117

  

 

 

 14

Annex A

Excise Tax Gross-Up Procedural Provisions

(1)                                  Subject
to the provisions of Paragraph 5, all determinations required to be made
under Section 3 and this Annex A, including whether an Excise Tax is payable by
the Executive and the amount of such Excise Tax and whether a Gross-Up Payment
is required to be paid by the Company to the Executive and the amount of such
Gross-Up Payment, if any, will be made by a nationally recognized accounting or
law firm (the “National Firm”) selected by the Executive in the Executive’s
sole discretion.  The Executive will
direct the National Firm to submit its determination and detailed supporting
calculations to both the Company and the Executive within 30 calendar days
after the date of termination of the Executive’s employment, if applicable, and
any such other time or times as may be requested by the Company or the
Executive.  If the National Firm
determines that any Excise Tax is payable by the Executive, the Company will
pay the required Gross-Up Payment to the Executive within five business days
after receipt of such determination and calculations with respect to any
Payment to the Executive.  If the
National Firm determines that no Excise Tax is payable by the Executive with respect
to any material benefit or amount (or portion thereof), it will, if requested
by the Executive, at the same time as it makes such determination, furnish the
Company and the Executive with an opinion that the Executive has substantial
authority not to report any Excise Tax on the Executive’s federal, state or
local income or other tax return with respect to such benefit or amount.  As a result of the uncertainty in the
application of Section 4999 of the Code and the possibility of similar
uncertainty regarding applicable state or local tax law at the time of any
determination by the National Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should have been made (an “Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts or
fails to pursue its remedies pursuant to Paragraph 5 and the Executive
thereafter is required to make a payment of any Excise Tax, the Executive will
direct the National Firm to determine the amount of the Underpayment that has
occurred and to submit its determination and detailed supporting calculations
to both the Company and the Executive as promptly as possible.  Any such Underpayment will be promptly paid
by the Company to, or for the benefit of, the Executive within five business
days after receipt of such determination and calculations.

(2)                                  The
Company and the Executive will each provide the National Firm access to and
copies of any books, records and documents in the possession of the Company or
the Executive, as the case may be, reasonably requested by the National Firm,
and otherwise cooperate with the National Firm in connection with the
preparation and issuance of the determinations and calculations contemplated by
Paragraph 1.  Any determination by
the National Firm as to the amount of the Gross-Up Payment will be binding upon
the Company and the Executive.

 A-1
 

 

(3)                                  The
federal, state and local income or other tax returns filed by the Executive
will be prepared and filed on a consistent basis with the determination of the
National Firm with respect to the Excise Tax payable by the Executive.  The Executive will report and make proper
payment of the amount of any Excise Tax, and at the request of the Company,
provide to the Company true and correct copies (with any amendments) of the
Executive’s federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as filed
with the applicable taxing authority, and such other documents reasonably requested
by the Company, evidencing such payment. 
If prior to the filing of the Executive’s federal income tax return, or
corresponding state or local tax return, if relevant, the National Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive will within five business days pay to the Company the amount of such
reduction.

(4)                                  The
fees and expenses of the National Firm for its services in connection with the
determinations and calculations contemplated by Paragraph 1 will be borne by
the Company.  If such fees and expenses
are initially paid by the Executive, the Company will reimburse the Executive
the full amount of such fees and expenses within five business days after
receipt from the Executive of a statement therefor and reasonable evidence of
the Executive’s payment thereof.

(5)                                  The
Executive will notify the Company in writing of any claim by the Internal
Revenue Service or any other taxing authority that, if successful, would
require the payment by the Company of a Gross-Up Payment.  Such notification will be given as promptly
as practicable but no later than 10 business days after the Executive
actually receives notice of such claim and the Executive will further apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid (in each case, to the extent known by the Executive).  The Executive will not pay such claim prior
to the expiration of the 30-calendar-day period following the date on which the
Executive gives such notice to the Company or, if earlier, the date that any
payment of amount with respect to such claim is due.  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive will:

(a)                                  provide
the Company with any written records or documents in Executive’s possession
relating to such claim reasonably requested by the Company;

(b)                                 take
such action in connection with contesting such claim as the Company reasonably
requests in writing from time to time, including without limitation accepting
legal representation with respect to such claim by an attorney competent in
respect of the subject matter and reasonably selected by the Company;

(c)                                  cooperate
with the Company in good faith in order effectively to contest such claim; and

(d)                                 permit
the Company to participate in any proceedings relating to such claim; provided, however, that
the Company will bear and pay directly all costs and 

 A-2
 

expenses (including interest and penalties) incurred
in connection with such contest and will indemnify and hold harmless the
Executive, on an after-tax basis, for and against any Excise Tax or income or
other tax, including interest and penalties with respect thereto, imposed as a
result of such representation and payment of costs and expenses.  Without limiting the foregoing provisions of
this Paragraph 5, the Company will control all proceedings taken in connection
with the contest of any claim contemplated by this Paragraph 5 and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim (provided, however, that
the Executive may participate therein at the Executive’s own cost and expense)
and may, at its option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company determines; provided,
however, that if the Company directs the
Executive to pay the tax claimed and sue for a refund, the Company will advance
the amount of such payment to the Executive on an interest-free basis and will
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income or other tax, including interest or penalties with respect
thereto, imposed with respect to such advance; and provided further, however,
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which the contested
amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of any
such contested claim will be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive will be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

(6)                                  If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Paragraph 5, the Executive receives any refund with respect to such
claim, the Executive will (subject to the Company’s complying with the
requirements of Paragraph 5) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after any taxes
applicable thereto).  If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Paragraph 5, a determination is made that the Executive is not entitled to any
refund with respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial or refund prior to the expiration
of 30 calendar days after such determination, then such advance will be
forgiven and will not be required to be repaid and the amount of any such
advance will offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid by the Company to the Executive pursuant to Section 3 and
this Annex A.

 A-3Exhibit 10.1

ON THE GO HEALTHCARE, INC.

2007 STOCK OPTION PLAN

Article I.    Purposes of the Plan

The purposes of this Stock Option Plan are to attract and retain the best
available personnel, to provide additional incentive to Employees,
Directors and Consultants, and to promote the success of the Company's
business.

Article II.   Definitions

As used herein, the following definitions shall apply:

2.01   "Administrator" means the Board or any of the Committees appointed
        to administer the Plan.

2.02   "Applicable Laws" means the legal requirements relating to the
        administration of share incentive plans, if any, under applicable
        provisions of the U.S. federal securities laws, the U.S. state
        corporate and securities laws, the Code, the rules of any applicable
        stock exchange or national market system, and the laws and rules of
        any jurisdiction outside the U.S. applicable to Options including
        Canadian laws, SARs or Restricted Shares granted to residents
        therein.

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

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

2.05   "Committee" means any committee appointed by the Board to administer
        the Plan, provided that the Committee shall consist of not fewer than
        two (2) members of the Board, and shall, following the Registration
        Date and, solely to the extent required to comply with Applicable Laws,
        be composed of "non-employee" directors within the meaning of
        Rule 16b-3 as promulgated under the Exchange Act and "outside
        directors" within the meaning of the Code.  To the extent the Plan
        is administered by the Board, the term "Committee" shall refer to
        the Board.

2.06   "Common Share" means a share of US$0.0001 par value of the Company.

2.07   "Company" means On the Go Healthcare, Inc., a company incorporated
        under the laws of Delaware.

2.08   "Consultant" means any person (other than an Employee or a Director)
        who is engaged by the Company or any Related Entity to render
        consulting or advisory services to the Company or such Related Entity
        or any other selective persons the Administrator determines provides,
        directly or indirectly, bona fide value to the Company or any Related
        Entity.

2.09   "Continuous Service" means that the provision of services to the Company
        or a Related Entity in any capacity of Employee, Director, or
        Consultant, is not interrupted or terminated.  Continuous Service
        shall not be considered interrupted in the case of:

<PAGE>

        (i)   any approved leave of absence;

        (ii)  transfers among the Company, any Related Entity, or any
              successor, in any capacity of Employee, Director, or
              Consultant; or

        (iii) any change in status as long as the individual remains in the
              service of the Company or a Related Entity in any capacity of
              Employee, Director, or Consultant (except as otherwise provided
              in the Option Agreement).

        An approved leave of absence shall include sick leave, maternity leave,
        or any other authorized personal leave.

2.10   "Corporate Transaction" means any of the following transactions to which
        the Company is a party:

        (i)   a merger or consolidation or reorganization in which the Company
              is not the surviving entity; or

        (ii)  the sale, transfer or other disposition of all or substantially
              all of the assets of the Company (including the share capital of
              the Company's Subsidiaries).

2.11   "Director" means a member of the Board or the board of directors of any
        Related Entity.

2.12   "Disability" means that an Optionee is permanently unable to carry out
        the responsibilities and functions of the position held by the Optionee
        by reason of any medically determinable physical or mental impairment
        as determined by the Administrator.  An Optionee will not be considered
        to have incurred a Disability unless he or she furnishes proof of such
        impairment sufficient to satisfy the Administrator in its discretion.

2.13   "Effective Date" means the date on which a Grant of Options and/or SARs
        and/or Restricted Shares shall take effect in accordance with Option
        Agreement.

2.14   "Employee" means any person, including an Officer or Director, who is an
        employee of the Company or any Related Entity.  The payment of an
        independent director's fee by the Company or a Related Entity shall
        not be sufficient to constitute "employment" of such person by the
        Company.

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

2.16   "Fair Market Value" means, as of any date, the value of Common Shares
        as follows:

       (a) Where there exists a public market for the Common Shares, the Fair
           Market Value shall be:

                (i)   the closing price for a Share for the last market trading
                      day prior to the time of the determination (or, if no
                      closing price was reported on that date, on the last
                      trading date on which a closing price was reported) on
                      the stock exchange determined by the Administrator to be
                      the primary market for the Common Shares or the Nasdaq
                      National Market, whichever is applicable; or

<PAGE>

                (ii)  if the Common Shares are not traded on any such exchange,
                      or national market system, the average of the closing
                      bid and asked prices of a Share on the Nasdaq Small
                      Cap Market for the day prior to the time of the
                      determination (or, if no such prices were reported on
                      that date, on the last date on which such prices were
                      reported), in each case, as reported in The Wall Street
                      Journal or such other source as the Administrator deems
                      reliable.

       (b) In the absence of an established market for the Common Shares of
           the type described in (a), above, the Fair Market Value thereof
           shall be determined by the Administrator in good faith by reference
           to:

                (i)   the valuation price made by an independent appraiser
                      appointed by the Administrator;

                (ii)  the placing price of the latest private placement of the
                      Shares; and

                (iii) the development of the Company's business operations
                      since such latest private placement.

2.17  "Grant" means the number of Options and/or Stock Appreciation Rights
       and/or Restricted Shares and/or Restricted Share Units granted to an
       Optionee at any time in accordance with Section 6 hereof.

2.18  "Immediate Family" means any child, stepchild, grandchild, parent,
       stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
       mother-in-law, father-in-law, son-in-law, daughter-in-law,
       brother-in-law, or sister-in-law, including adoptive relationships,
       any person sharing the Optionee's household (other than a tenant or
       employee), a trust in which these persons (or the Optionee) have more
       than fifty percent (50%) of the beneficial interest, a foundation in
       which these persons (or the Optionee) control the management of
       assets, and any other entity in which these persons (or the Optionee)
       own more than fifty percent (50%) of the voting interests.

2.19  "Liquidation Event" means a complete dissolution or liquidation of the
       Company.

2.20  "Non-Statutory Stock Option" means an Option not intended to qualify as
       an Incentive Stock Option within the meaning of Section 422 of the Code.

2.21  "Officer" means a person who is an officer of the Company or a Related
       Entity within the meaning of Section 16 of the Exchange Act and the
       rules and regulations promulgated thereunder or, to the extent
       applicable, other Applicable Laws.

2.22  "Option" means an option to purchase Shares pursuant to an Option
       Agreement granted under the Plan.

2.23   "Optionee" means an Employee, Director, or Consultant who receives a
        Grant under the Plan.

2.24   "Option Agreement" means the written agreement evidencing the grant of
        an option and/or SARs and/or Restricted Shares executed by the Company
        and the Optionee, including any amendments thereto.

2.25   "Option Period" means the period commencing on the Effective Date of a
        Grant and ending no later than on the day prior to the tenth
        anniversary of such Effective Date.

<PAGE>

2.26   "Parent" means a "parent corporation", whether now or hereafter
        existing, as defined in Section 424(e) of the Code or, to the extent
        applicable, other Applicable Laws.

2.27   "Plan" means this 2007 Stock Option Plan of On the Go Healthcare, Inc.,
        as set forth herein and as may be amended from time to time.

2.28   "Registration Date" means the first to occur of:

        (a) the closing of the first sale to the general public of:

                (i)  the Common Shares; or

                (ii) the same class of securities of a successor corporation
                     (or its Parent) issued pursuant to a Corporate Transaction
                     in exchange for or in substitution of the Common Shares,
                     pursuant to a registration statement filed with and
                     declared effective by the Securities and Exchange
                     Commission under the Securities Act or an equivalent
                     thereof in a jurisdiction outside the U.S.;

        and

        (b) in the event of a Corporate Transaction, the date of the
            consummation of the Corporate Transaction if the same class of
            securities of the successor corporation (or its Parent) issuable in
            such Corporate Transaction shall have been sold to the general
            public pursuant to a registration statement filed with and declared
            effective by the Securities and Exchange Commission under the
            Securities Act or an equivalent thereof in a jurisdiction outside
            the U.S., on or prior to the date of consummation of such Corporate
            Transaction.

2.29   "Related Entity" means any Parent, Subsidiary and any other corporation,
        partnership, limited liability company or other business entity in
        which the Company, its Parent or a Subsidiary holds a substantial
        ownership interest, directly or indirectly.

2.30   "Securities Act" means the U.S. Securities Act of 1933, as amended.

2.31   "SAR" means a Stock Appreciation Right granted to an Optionee under
        this Plan.

2.32   "Shares" mean Common Shares of the Company.

2.33   "Subsidiary" means a "subsidiary corporation", whether now or hereafter
        existing, as defined in Section 424(f) of the Code or, to the extent
        applicable, other Applicable Laws.

Article III.  Shares Subject to the Plan

3.01   Subject to the provisions of Section 10.01 below, the maximum aggregate
       number of Shares with respect to which Grants may be made under the
       Plan shall not exceed 17,000,000 shares.

<PAGE>

3.02   Any Shares covered by a Grant (or portion of a Grant) which is forfeited
       or cancelled, expires or is settled in cash or otherwise, shall be
       deemed not to have been issued for purposes of determining the maximum
       aggregate number of Shares which may be issued under the Plan.  If any
       unissued Shares are retained by the Company upon exercise of a Grant in
       order to satisfy the exercise price for such Grant or any withholding
       taxes due with respect to such Grant, such retained Shares subject to
       such Grant shall become available for future issuance under the Plan
       (unless the Plan has terminated).  Shares that actually have been
       issued under the Plan pursuant to a Grant shall not be returned to
       the Plan and shall not become available for future issuance under
       the Plan.

Article IV.   Administration of the Plan

4.01   Plan Administrator.  The Committee shall administer the Plan in
       accordance with its terms.

4.02   Powers of the Administrator.  Subject to Applicable Laws and the
       provisions of the Plan (including any other powers given to the
       Administrator hereunder), and except as otherwise provided by the Board,
       the Administrator shall have the authority, in its discretion:

        (a) to determine the eligibility of Grants, the classes of bands and
            the range of number of Shares covered in each Band, to authorize
            the Chief Executive Officer and Executive Management Team to
            determine number of shares of each Grant;

        (b) to approve forms of Option Agreements for use under the Plan;

        (c) to determine to grant Options with or without SARs;

        (d) to determine the Exercise Price applicable to the Share covered
            by each Option;

        (e) to determine the Option Period applicable thereto;

        (f) to establish additional terms, conditions, rules or procedures to
            accommodate the rules or laws of applicable foreign jurisdictions
            and to afford Optionees favorable treatment under such rules or
            laws; provided, however, that no Grant shall be granted under any
            such additional terms, conditions, rules or procedures with terms
            or conditions which are inconsistent with the provisions of the
            Plan;

        (g) to amend the terms of any outstanding Grant granted under the Plan,
            and to reduce the exercise price of any Option or SAR to the then
            current Fair Market Value if the Fair Market Value of the Shares
            covered by such Grant shall have declined since the date the Grant
            was granted and to make any other amendments or adjustments to any
            Grant that the Administrator determines, in its discretion and
            under the authority granted to it under this Plan, to be necessary
            or advisable, provided that the exercise price shall never fall
            below the nominal or par value of the Shares, and that any such
            amendment or adjustment that would adversely affect the Optionee's
            rights under an outstanding Grant shall not be made without the
            Optionee's written consent;

        (h) to construe and interpret the terms of the Plan and Grants,
            including without limitation, any notice of Grant or Option
            Agreement, granted pursuant to the Plan; and

        (j) to take such other action, not inconsistent with the terms of the
            Plan, as the Administrator deems appropriate.

<PAGE>

Article V.    Eligibility

Options may be granted to Employees, Directors, and Consultants.  An Employee,
Director, or Consultant who has been granted a Grant may, if otherwise
eligible, be granted additional Grants.  Grants may be granted to such
Employees, Directors, or Consultants who are residing in foreign jurisdictions
as the Administrator may determine from time to time.

Article VI.   Type of Grants; Terms and Conditions of Grants

Grants under the Plan may consist of one or more of the following: Options,
SARs, or Restricted Shares (which may be granted as Restricted Share units).
Restricted Stock may be registered on a Form S-8 prior or subsequent to any
grants. Awards of Restricted Shares may provide the Optionee with dividends
or dividend equivalents and voting rights prior to vesting.  Additionally,
shares of common stock may be granted as free-trading shares if the shares of
common stock are registered on a Form S-8.  Each Grant shall be designated in
the Option Agreement.

6.01   Options

        (a) Option Designation.  Options shall be designated as Non-Statutory
            Stock Option.

        (b) Option Exercise Price.  The exercise price of an Option shall be
            as follows:

                (i)  granted to a person who, at the time of the grant of such
                     Non-Statutory Stock Option owns shares representing more
                     than ten percent (10%) of the voting power of all classes
                     of shares of the Company or any Parent or Subsidiary, the
                     per Share exercise price shall be not less than one
                     hundred percent (100%) of the Fair Market Value per
                     Share on the date of grant; or

                (ii) granted to a person other than a person described in the
                     preceding paragraph, the per Share exercise price shall
                     be not less than eighty five percent (85%) of the Fair
                     Market Value per Share on the date of grant.

        (c) Consideration.  In addition to any other types of consideration the
            Administrator may determine, the Administrator is authorized to
            accept as consideration for Shares issued under the Plan the
            following:

                (i)   cash or check

                (ii)  cancellation of indebtedness owed by the Company to the
                      Optionee;

                (iii) promissory note;

                (iv)  Shares previously acquired by the Optionee valued at the
                      Fair Market Value at the time of the exercise;

                (v)   withholding from delivery to the Optionee that number of
                      whole Shares having a Fair Market Value at the time of
                      the exercise equal to the exercise price payable to the
                      Company upon exercise of the Option; or

                (vi)  any combination of the foregoing methods of payment.

        (d) Easy-Sale Exercise.

<PAGE>

                (i)   Exercise/Sale.  An Option Agreement may, but need not,
                      provide that, if Shares are publicly traded, all or part
                      of the exercise price of an Option and any withholding
                      taxes may be paid by the delivery (on a form prescribed
                      by the Company) of an irrevocable direction to a
                      securities broker approved by the Company to sell
                      Shares and to deliver all or part of the sales proceeds
                      to the Company.

                (ii)  Exercise/Pledge.  An Option Agreement may, but need not,
                      provide that, if Shares are publicly traded, all or part
                      of the exercise price of an Option and any withholding
                      taxes may be paid by the delivery (on a form prescribed
                      by the Company) of an irrevocable direction to pledge
                      Shares to a securities broker or lender approved by the
                      Company, as security for a loan, and to deliver all or
                      part of the loan proceeds to the Company.

6.02   SARs.

        (a) Grant.  SARs may be granted in tandem with an Option, in addition
            to an Option, or may be freestanding and unrelated to an Option.
            SARs granted in tandem or in addition to an Option may be granted
            either at the same time as the Option or at a later time.  SARs
            shall vest and become exercisable at a rate determined by the
            Administrator, and shall remain exercisable for such period as
            specified by the Administrator.  A SAR shall entitle the Optionee
            to receive from the Company an amount equal to the excess of the
            Fair Market Value of a Share on the exercise of the SAR over the
            Fair Market Value of a Share on the date of grant or, in the case
            of an SAR granted in tandem with an Option, the per Share exercise
            price applicable to such Option.

        (b) Settlement.  The Administrator shall determine in its sole
            discretion whether the SAR shall be settled in cash, Shares, or a
            combination of cash and Shares.  In no event may any Optionee
            receive grants of SARs with respect to more than 350,000 Shares in
            any calendar year.

6.03   Restricted Shares.

        (a) Grant.  Restricted Shares may be granted in the form of Shares or
            share units having a value equal to an identical number of Shares.
            The employment conditions and the length of the period for vesting
            of Restricted Shares shall be established by the Administrator at
            time of grant.  In the event that a share certificate is issued in
            respect of Restricted Shares, such certificate shall be registered
            in the name of the Optionee but shall be held by the Company until
            the end of the restricted period.  During the restricted period,
            Restricted Shares may not be sold, assigned, transferred or
            otherwise disposed of, or pledged or hypothecated as collateral
            for a loan or as security for the performance of any obligation
            or for any other purpose as the Administrator shall determine.

        (b) Settlement.  The Administrator shall determine in its sole
            discretion whether Restricted Shares granted in the form of share
            units shall be paid in cash, Shares, or a combination of cash and
            Shares.

<PAGE>

6.04   Conditions of Grant; Vesting, and Repurchase Right.  Subject to the
       terms of the Plan, the Administrator shall determine the provisions,
       terms, and conditions of each Grant including, but not limited to, the
       Grant vesting schedule, repurchase provisions, rights of first refusal,
       forfeiture provisions, form of payment (cash, Shares, or other
       consideration) upon settlement of the Grant, payment contingencies,
       and satisfaction of any performance criteria, provided, however,
       unless specifically provided otherwise in the relevant Option Agreement,
       one fourth (1/4th) of the Grant shall vest at each of 1st, 2nd, 3rd,
       and 4th anniversaries following the issuance of such Grant so long as
       the Optionee provides Continuous Service to the Company.

6.05   Acquisitions and Other Transactions.  The Administrator may issue Grants
       under the Plan in settlement, assumption or substitution for,
       outstanding Grants or obligations to grant future Grants in connection
       with the Company or a Related Entity acquiring another entity, an
       interest in another entity or an additional interest in a Related
       Entity whether by merger, share purchase, asset purchase, or other form
       of transaction.

6.06   Deferral of Grant Payment.  The Administrator may establish one or more
       programs under the Plan to permit selected Optionees the opportunity to
       elect to defer receipt of consideration upon exercise of a Grant,
       satisfaction of performance criteria, or other event that absent the
       election would entitle the Optionee to payment or receipt of Shares or
       other consideration under a Grant.  The Administrator may establish the
       election procedures, the timing of such elections, the mechanisms for
       payments of, and accrual of interest or other earnings, if any, on
       amounts, Shares or other consideration so deferred, and such other
       terms, conditions, rules and procedures that the Administrator deems
       advisable for the administration of any such deferral program.

6.07   Award Exchange Programs.  The Administrator may establish one or more
       programs under the Plan to permit selected Optionees to exchange a
       Grant under the Plan for one or more other types of Grants under the
       Plan on such terms and conditions as determined by the Administrator
       from time to time.

6.08   Separate Programs.  The Administrator may establish one or more separate
       programs under the Plan for the purpose of issuing particular forms of
       Grants to one or more classes of Optionees on such terms and conditions
       as determined by the Administrator from time to time.

6.09   Early Exercise.  The Option Agreement may, but need not, include a
       provision whereby the Optionee may elect, at any time while being an
       Employee, Director, or Consultant, to exercise any part or all of the
       Grant prior to full vesting of the Grant.  Any unvested Shares received
       pursuant to such exercise may be subject to a repurchase right in favor
       of the Company or a Related Entity or to any other restriction the
       Administrator determines to be appropriate.

6.10   Option Period.  The Option Period shall be the term stated in the Option
       Agreement up to ten (10) years from the Effective Date of Grant thereof.

6.11   Transferability of Grants.  No Grant may be sold, pledged, assigned,
       hypothecated, transferred, or disposed of in any manner other than by
       will or by the laws of descent or distribution and may be exercised,
       during the lifetime of the Optionee, only by the Optionee; provided,
       however, during the lifetime of the Optionee, SARs may be transferred
       by gift to members of the Optionee's Immediate Family to the extent and
       manner determined by the Administrator.

6.12   Time of Grants.  The date of grant of a Grant shall for all purposes
       be the date on which the Administrator makes the determination to grant
       such Grant, or such other date as is determined by the Administrator.
       Notice of the grant determination shall be given to each Employee,
       Director, or Consultant to whom a Grant is so granted within a
       reasonable time after the date of such grant.

<PAGE>

6.13   Buyout Provisions.  The Administrator may at any time offer to buy out
       for a payment in cash or Shares or other consideration, any Grant
       previously granted based on such terms and conditions as the
       Administrator shall establish and communicate to the Optionee at
       the time such offer is made.

Article VII.  Withholding

The Company shall have the right to deduct from any payment to be made pursuant
to the Plan the amount of any taxes required by law to be withheld therefrom,
or to require an Optionee to pay to the Company such amount required to be
withheld prior to the issuance or delivery of any Shares or the payment of cash
under the Plan.  The Administrator may, in its discretion, permit an Optionee
to elect to satisfy such withholding obligation by having the Company retain
the number of Shares whose Fair Market Value equals the amount required to be
withheld.  Any fraction of a Share required to satisfy such obligation shall
be disregarded and the amount due shall instead be paid in cash by the
Optionee.

Article VIII. Exercise of Grant

8.01   Procedure for Exercise; Rights as a Shareholder.

        (a) Any Grant granted hereunder shall be exercisable at such times
            and under such conditions as determined by the Administrator under
            the terms of the Plan and specified in the Option Agreement.

        (b) A Grant shall be deemed to be exercised when written notice of such
            exercise has been given to the Company, as in a form required
            under the applicable Option Agreement, in accordance with the
            terms of the Grant by the person entitled to exercise the Grant
            and full payment for the Shares is made with respect to which the
            Grant is exercised.  Until the issuance (as evidenced by the
            appropriate entry on the books of the Company or of a duly
            authorized transfer agent of the Company) of the share certificate
            evidencing such Shares, no right to vote or receive dividends or
            any other rights as a shareholder shall exist with respect to
            Shares subject to a Grant, notwithstanding the exercise of an
            Option or other Grant.  The Company shall issue (or cause to be
            issued) such share certificate as soon as practicable following
            the exercise of the Grant.  No adjustment will be made for a
            dividend or other right for which the record date is prior to the
            date the share certificate is issued, except as provided in the
            Option Agreement or Section 10, below.

8.02   Exercise of Option or SAR Following Termination of Continuous Service.
       If the Optionee's Continuous Service is terminated for any reason other
       than death or Disability, such Optionee shall have the right to
       exercise the Option or SAR at any time within thirty (30) days (or such
       other period of time not exceeding three (3) months as is determined
       by the Administrator at the time of granting the Option), following the
       date such Optionee ceases his or her Continuous Service to the extent
       that such Optionee was entitled to exercise the Option or SAR at the
       date of such termination; provided, however, that no Option or SAR
       shall be exercisable after the expiration of the term set forth in the
       applicable Option Agreement.  To the extent that such Optionee was not
       entitled to exercise the Option or SAR at the date of such termination,
       or if such Optionee does not exercise such Option or SAR (which such
       Optionee was entitled to exercise) within the time specified herein,
       the Option or SAR shall terminate.

<PAGE>

8.03   Death or Disability of Optionee.  If an Optionee's Continuous Service
       is terminated due to death or Disability, the Option or SAR may be
       exercised at any time within six (6) months following the date of death
       or termination of employment due to Disability, in the case of death, by
       the Optionee's estate or by a person who acquired the right to exercise
       the Option or SAR by bequest or inheritance, or, in the case of
       Disability, by the Optionee, but in any case only to the extent the
       Optionee was entitled to exercise the Option or SAR at the date of his
       or her termination of Continuous Service by death or Disability;
       provided, however, that no Option or SAR shall be exercisable after the
       expiration of the term set forth in the Option Agreement.  To the extent
       that such Optionee was not entitled to exercise such Option or SAR at
       the date of his or her termination of employment by death or Disability
       or if such Option or SAR is not exercised (to the extent it could be
       exercised) within the time specified herein, the Option or SAR shall
       terminate.

8.04   Extension of Time to Exercise.  Notwithstanding anything to the contrary
       in this Section 8, the Administrator may at any time and from time to
       time prior to the termination of a Non-statutory Stock Option, with
       the consent of the Optionee, extend the period of time during which
       the Optionee may exercise his or her Non-statutory Stock Option
       following the date the Optionee's ceases Continuous Services; provided,
       however, that:

        (a) the maximum period of time during which a Non-statutory Stock
            Option shall be exercisable following such termination date shall
            not exceed an aggregate of six (6) months;

        (b) the Non-statutory Stock Option shall not become exercisable after
            the expiration of the term of such Option as set forth in the
            Option Agreement as a result of such extension; and

        (c) notwithstanding any extension of time during which the
            Non-statutory Stock Option may be exercised, such Option, unless
            otherwise amended by the Administrator, shall only be exercisable
            to the extent to which the Optionee was entitled to exercise it
            on the date the Optionee ceased Continuous Services.

        To the extent that such Optionee was not entitled to exercise the
        Option at the date of such termination, or if such Optionee does not
        exercise an Option which the Optionee was entitled to exercise within
        the time specified herein, the Option shall terminate.

Article IX.   Conditions Upon Issuance of Shares

9.01   No Violation of Law.  Shares shall not be issued pursuant to a Grant or
       the exercise of a Grant unless the exercise of such Grant and the
       issuance and delivery of such Shares pursuant thereto shall comply with
       all Applicable Laws, and the Administrator may further subject any
       issuance of Shares to the approval of counsel for the Company with
       respect to such compliance.

9.02   Execution of Documents.  As a condition to the exercise of a Grant,
       the Administrator may require the person exercising such Grant to
       execute an investment representation statement acceptable to the
       Company or a share purchase agreement acceptable to the Company, each
       in forms approved by the Administrator from time to time, in addition
       to the any other instrument the Administrator deems necessary or
       advisable.

<PAGE>

Article X.    Adjustments Upon Changes in Capitalization or Corporate
              Transaction

10.01  Adjustments upon Changes in Capitalization.  Subject to any required
       action by the shareholders of the Company, the number of Shares covered
       by each outstanding Grant, and the number of Shares which have been
       authorized for issuance under the Plan but as to which no Grants have
       yet been granted or which have been returned to the Plan, the exercise
       or purchase price of each such outstanding Grant, as well as any other
       terms that the Administrator determines require adjustment shall be
       proportionately adjusted for:

        (a) any increase or decrease in the number of issued Shares resulting
            from a share split, reverse share split, share dividend,
            combination or reclassification of the Shares, or similar
            transaction affecting the Shares;

        (b) any other increase or decrease in the number of issued Shares
            effected without receipt of consideration by the Company; or

        (c) as the Administrator may determine in its discretion, any other
            transaction with respect to Shares to which Section 424(a) of the
            Code applies or a similar transaction; provided, however, that
            conversion of any convertible securities of the Company shall not
            be deemed to have been "effected without receipt of consideration."

       Such adjustment shall be made by the Administrator and its
       determination shall be final, binding and conclusive.  Except as the
       Administrator determines, no issuance by the Company of shares of any
       class, or securities convertible into shares of any class, shall
       affect, and no adjustment by reason hereof shall be made with respect
       to, the number or price of Shares subject to a Grant.

10.02  Corporate Transaction.  In the event of a proposed Corporate
       Transaction, subject to the actual consummation of the proposed
       transaction, each outstanding Grant shall automatically become fully
       vested and exercisable, unless the Grant is assumed or substituted with
       an equivalent option or right by the successor corporation or the Parent
       or Subsidiary thereof.  If the successor corporation refuses to assume
       or substitute for the Grant, the Administrator shall notify the Optionee
       that the Grant shall be fully vested and exercisable with respect to all
       of the Shares underlying the Grant (including Shares as to which it
       would not otherwise be vested or exercisable) for a period of fifteen
       (15) days from the date of such notice.  If the Grant thus becomes fully
       vested and exercisable but is not exercised during this fifteen (15) day
       period, it shall terminate immediately prior to the effective time of
       such Corporate Transaction.  For the purposes of this Section 10.02,
       the Grant shall be considered assumed or substituted with an equivalent
       option or right if, in connection with the Corporate Transaction, the
       Grant is replaced with a comparable option or right with respect to
       shares of the successor corporation or Parent or Subsidiary thereof or
       is replaced with a cash incentive program of the successor corporation
       or Parent or Subsidiary thereof which preserves the compensation element
       of such Grant existing at the time of the Corporate Transaction and
       provides for subsequent payout in accordance with the same vesting
       schedule applicable to such Grant.  The determination of Grant
       comparability above shall be made by the Administrator and its
       determination shall be final, binding and conclusive.

<PAGE>

10.03  Liquidation Event.  In the event of a proposed Liquidation Event, the
       Administrator shall notify each Optionee of the proposed event at least
       twenty (20) days prior to the proposed effective date of the Liquidation
       Event.  The Administrator in its discretion may provide for an Optionee
       to have the right to exercise his or her Grant until ten (10) days prior
       to the proposed effective date for the Liquidation Event with respect
       to all Shares underlying the Grant (including Shares as to which it
       would not otherwise be vested or exercisable), subject to the actual
       completion of the Liquidation Event at the time and in the manner
       contemplated.  In addition, the Administrator may provide that any
       Company repurchase option applicable to any Shares issued upon grant
       or an exercise of a Grant shall lapse as to all Shares, subject to the
       actual completion of the Liquidation Event at the time and in the manner
       contemplated.  Any unexercised Grant  shall terminate immediately prior
       to effective time of the Liquidation Event.

Article XI.   Effective Date and Term of Plan

The Plan, and any amendments to the Plan, shall become effective upon its
adoption by the Board.  It shall continue in effect until the end of 2017
unless sooner terminated.  Subject to Section 17, below, and Applicable Laws,
Grants may be granted under the Plan upon its becoming effective.

Article XII.  Amendment, Suspension or Termination of the Plan

The Board may at any time amend, suspend or terminate the Plan.  No Grant may
be granted during any suspension of the Plan or after termination of the Plan.
Any amendment, suspension or termination of the Plan (including termination of
the Plan pursuant to this Section 12) shall not affect Grants already granted,
and such Grants shall remain in full force and effect as if the Plan had not
been amended, suspended or terminated, unless mutually agreed otherwise between
the Optionee and the Administrator, which agreement must be in writing and
signed by the Optionee and the Company.

Article XIII. Availability of Shares; No Issuance in Violation of Law

13.01  Availability of Shares.  The Company, during the term of the Plan, will
       at all times keep available such number of unissued Shares as shall be
       sufficient to satisfy the requirements of the Plan.

13.02  No Issuance in Violation of Law.  The inability of the Company to obtain
       authority from any regulatory body having jurisdiction under Applicable
       Law, which authority is deemed by the Company's counsel to be necessary
       to the lawful issuance and sale of any Shares hereunder, relieve the
       Company of any liability in respect of the failure to issue or sell
       such Shares as to which such requisite authority shall not have been
       obtained.

Article XIV.  No Effect on Terms of Employment/Consulting Relationship

The Plan shall not confer upon any Optionee any right with respect to the
Optionee's Continuous Service, nor shall it interfere in any way with his
or her right or the Company's or a Related Entity's right to terminate the
Optionee's Continuous Service at any time, with or without cause.

<PAGE>

Article XV.   No Effect on Retirement and Other Benefit Plans

Except as specifically required by law or provided in a retirement or other
benefit plan of the Company or a Related Entity, Grants shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Related Entity, and shall not affect any
benefits under any other benefit plan of any kind or any benefit plan
subsequently instituted under which the availability or amount of benefits is
related to level of compensation.

Article XVI.  Liability of the Company; Consents

16.01  Consents.  Optionee shall be responsible for obtaining any governmental
       or other official consent that may be required by any country or
       jurisdiction in order to permit the grant or exercise of any Grant.
       Neither the Company nor any Related Entity shall be responsible for any
       failure by an Optionee to obtain such consent or for any tax or other
       liability to which an Optionee may become subject to as a result of his
       or her participation in the Plan.

<PAGE>

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