Document:

exh10_2.htm

    2008
      EMPLOYEE LONG-TERM INCENTIVE PLAN

    

    

    Section
      1.    Establishment and Purpose

    

    (a)
Purpose.  The
      purposes of this ePlus
      inc. 2008 Long-Term Incentive Plan (the “Employee Plan”) are to
      encourage Employees of ePlus inc. (together
      with any
      successor thereto, the “Company”) and its Affiliates
      (as defined below) to acquire a proprietary interest in the growth and
      performance of the Company, to generate an increased incentive to contribute
      to
      the Company’s future success and prosperity, thus enhancing the value of the
      Company for the benefit of its stockholders, and to enhance the ability of
      the
      Company and its Affiliates to attract and retain exceptionally qualified
      individuals upon whom, in large measure, the sustained progress, growth and
      profitability of the Company depend.

    

    (b)
Effective
      Date; Shareholder
      Approval.  The Plan is effective September 15,
2008,
      subject to approval by the Company’s
      shareholders.

    

    Section
      2.    Definitions

    

    As
      used
      in the Employee Plan, the following terms shall have the meanings set forth
      below:

    

    (a)
      “Affiliate” shall mean
      (i) any entity that, directly or through one or more intermediaries, is
      controlled by the Company and (ii) any entity in which the Company has no less
      than a 50% equity interest, as determined by the Committee.  With
      respect to Incentive Stock Options, “Affiliate” means any entity, domestic or
      foreign, whether or not such entity now exists or is hereafter organized or
      acquired by the Company or by an Affiliate that is a “subsidiary corporation”
within the meaning of Code Section 424(d) and the rules thereunder.

    

    (b)
      “Award” shall mean any
      Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
      Performance Award, Dividend Equivalent, or Other Stock-Based Award granted
      under
      the Employee Plan.

    

    (c)
      “Award Agreement” shall
      mean any written agreement, contract, or other instrument or document, including
      an electronic communication, evidencing any Award granted under the Employee
      Plan.

    

    (d)
      “Board” shall mean the
      Board of Directors of the Company.

    

    (e)
      “Cause” means (except
      as otherwise provided in an Award Agreement) if the Committee, in its reasonable
      and good faith discretion, determines that the employee (i) fails to
      substantially perform his or her duties (other than as a result of Disability),
      after the Board or the executive to which the Participant reports delivers
      to
      the Participant a written demand for substantial performance that specifically
      identifies the manner in which the Participant has not substantially performed
      his or her duties; (ii) engages in willful misconduct or gross negligence that
      is materially injurious to the Company or a subsidiary; (iii) breaches his
      or
      her duty of loyalty to the Company or a subsidiary; (iv)  removed
      without proper authorization from the premises of the Company or a subsidiary
      of
      a document (of any media or form) relating to the Company or a subsidiary or
      the
      customers of the Company or a subsidiary; (v) breaches any confidentiality
      and/or non-compete agreement between him or her and the Company; or (vi) has
      committed a felony or a serious crime involving moral turpitude.

    

    (f)
      “Change in Control”
means an event that
      is “a change in the ownership or effective control of the
      corporation, or in the ownership of a substantial portion of the assets of
      the
      corporation" within the meaning of Section 409A and that also falls within
      one
      of the following events with respect to the Company:

    

    (i)
      the
      consummation of any consolidation or merger of the Company in which the Company
      is not the continuing or surviving corporation or pursuant to which Common
      Stock
      would be converted into cash, securities or other property, other than a merger
      of the Company in which the holders of Common Stock immediately prior to the
      merger own more than fifty percent (50%) of the outstanding common stock of
      the
      surviving corporation immediately after the merger; or

    

    (ii)
      the
      consummation of any sale, lease, exchange or other transfer (in one transaction
      or a series of related transactions) of all, or substantially all, of the assets
      of the Company, other than to a subsidiary or affiliate; or

    

    (iii)
      any
      action pursuant to which any person (which term may include two or more persons
      consistent with Section 13(d)(3) of the Exchange Act), corporation or other
      entity shall become the “beneficial owner” (as such term is defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of shares of capital
      stock entitled to vote generally for the election of directors of the Company
      (“Voting Securities”)
      representing more than fifty (50%) percent of the combined voting power of
      the
      Company’s then outstanding Voting Securities (calculated as provided in Rule
      13d-3(d) in the case of rights to acquire any such securities); or

    

    (iv)
      the
      individuals (x) who, as of the Effective Date, constitute the Board (the “Original Directors”) and (y)
      who thereafter are elected to the Board and whose election, or nomination for
      election, to the Board was approved by a vote of a majority of the Original
      Directors then still in office (such Directors being called “Additional Original
      Directors”) and (z) who thereafter are elected to the Board and whose
      election or nomination for election to the Board was approved by a vote of
      a
      majority of the Original Directors and Additional Original Directors then still
      in office, cease for any reason to constitute a majority of the members of
      the
      Board; or

    

    (v)
      the
      dissolution or liquidation of the Company.

    

    (g)
      “Code” shall mean the
      Internal Revenue Code of 1986, as amended from time to time.

    

    (h)
      “Committee” shall mean
      the Compensation Committee of the Board of Directors of the Company, or such
      other committee as may be designated by the Board.  However, if a
      member of the Compensation Committee is not an “outside director” within the
      meaning of Section 162(m) of the Code or is not a “non-employee director” as
      defined in Rule 16b-3 under the Exchange Act, the Compensation Committee may
      from time to time delegate some or all of its functions under the Employee
      Plan
      to a committee or subcommittee composed of members that meet the relevant
      requirements.  The term “Committee” includes any such committee or
      subcommittee, to the extent of the Compensation Committee’s
      delegation.

    

    (i)
      “Common Stock” shall
      mean shares of the Company’s common stock, par value $0.01 per
      share.

    

    (j)
      “Disability” shall mean
      any illness or other physical or mental condition of a Participant which renders
      the Participant incapable of performing his or her customary and usual duties
      for the Company, or any medically determinable illness or other physical or
      mental condition resulting from a bodily injury, disease, or mental disorder
      that in the judgment of the Committee is permanent and continuous in nature.
      The
      Committee may require such medical or other evidence as it deems necessary
      to
      judge the nature and permanency of the Participant’s condition.

    

    (k)
      “Dividend Equivalent”
shall mean any right
      granted under Section 6(e) of the Employee
      Plan.

    

    (l)
      “Employee” means any
      person who is in the employ of the Company or any Affiliate, subject to the
      control and direction of the Company or any Affiliate as to both the work to
      be
      performed and the manner and method of performance.

    

    (m)
      “Exchange Act” shall
      mean the Securities Exchange Act of 1934, as amended.

    

    (n)
      “Fair Market Value”
shall mean, as of
      any date, the value of Common Stock determined as
      follows:

     

    (i)
      if
      the Common Stock is listed on any established stock exchange or a national
      market system, including without limitation the Nasdaq Global Market or The
      Nasdaq Capital Market of The Nasdaq Stock Market, the Fair Market Value of
      a
      share of Common Stock shall be the closing sales price of a share of Common
      Stock as quoted on such exchange or system for such date (or the most recent
      trading day preceding such date if there were no trades on such date), as
      reported in The Wall
      Street Journal or such other source as the Committee deems
      reliable;

    

    (ii)
      if
      the Common Stock is regularly quoted by a recognized securities dealer but
      is
      not listed in the manner contemplated by clause (i) above, the Fair Market
      Value
      of a Share of Common Stock shall be the mean between the high bid and low asked
      prices for the Common Stock on the last market trading day prior to the day
      of
      determination, as reported in The Wall Street
      Journal or such other source as the Committee deems reliable;
      or

    

    (iii)
      if
      neither clause (i) above nor clause (ii) above applies, the Fair Market Value
      of
      a share of a share of Common Stock shall be determined in good faith by the
      Committee based on the reasonable application of a reasonable valuation
      method.

    

    (o)
      “Incentive Stock
      Option” shall mean an option granted under Section 6(a) of the Employee
      Plan that is intended to meet the requirements of Sections 422 of the Code,
      or
      any successor provision thereto.

    

    (p)
      “Key Employee” shall
      mean an Employee who is a “covered employee” within the meaning of Section
      162(m)(3) of the Code.

    

    (q)
      “Non-Qualified Stock
      Option” shall mean an option granted under Section 6(a) of the Employee
      Plan that is not an Incentive Stock Option.

    

    (r)
      “Option” shall mean an
      Incentive Stock Option or a Non-Qualified Stock Option.

    

    (s)
      “Other Stock-Based
      Award” shall mean any right granted under Section 6(f) of the Employee
      Plan.

    

    (t)
      “Participant” shall
      mean an Employee of the Company or of any Affiliate designated to be granted
      an
      Award under the Employee Plan.

    

    (u)
      “Performance Award”
shall mean any right
      granted under Section 6(d) of the Employee
      Plan.

    

    (v)
      “Performance Criteria”
shall mean any quantitative
      and/or qualitative measures, as determined by the
      Committee, which may be used to measure the level of performance of the Company
      or any individual Participant during a Performance Period, including any
      Qualifying Performance Criteria.   With respect to any Award
      intended to satisfy the requirements of Code Section 162(m), performance
      criteria shall mean the Qualifying Performance Criteria.

    

    (w)
      “Performance Period”
shall mean any period
      as determined by the Committee in its sole
      discretion.

    

    (x)
      “Person” shall mean any
      individual, corporation, partnership, association, joint-stock company, trust,
      unincorporated organization, or government or political subdivision
      thereof.

    

    (y)
      “Qualifying Performance
      Criteria” shall mean one or more of the following performance criteria,
      either individually, alternatively or in any combination, applied to either
      the
      company as a whole or to a business unit or Affiliate, and measured either
      annually or cumulatively over a period of years, on an absolute basis or
      relative to a pre-established target, to a previous year’s results or to a
      designated comparison group, in each case as specified by the Committee in
      the
      Award: revenue, sales, net income, net earnings, earnings per share, return
      on
      total capital, return on equity, cash flow, operating profit and margin rate,
      subject to adjustment by the Committee to remove the effect of charges for
      restructurings, discontinued operations, extraordinary items and all items
      of
      gain, loss or expense determined to be extraordinary or unusual in nature or
      infrequent in occurrence, related to the disposal of a segment or a business,
      or
      related to a change in accounting principle or otherwise.

    

    (z)
      “Restricted Securities”
shall mean Awards
      of Restricted Stock or other Awards under which issued and
      outstanding Shares are held subject to certain restrictions.

    

    (aa)
      “Restricted Stock”
shall mean any award
      of Shares granted under Section 6(c) of the Employee
      Plan.

    

    (bb)
      “Restricted Stock Unit”
shall mean any right
      granted under Section 6(c) of the Employee Plan that is
      denominated in Shares.

    

    (cc)
      “Retirement” means
      retirement (i) at or after age 55 with ten years of service or (ii) at or after
      age 65.

    

    (dd)
      “Section 409A” means
      Section 409A of Code, and the Treasury regulations and other authoritative
      guidance issued thereunder.

    

    (ee)
      “Shares” shall mean the
      Shares of Common Stock, and such other securities as may become the subject
      of
      Awards, or become subject to Awards, pursuant to an adjustment made under
      Section 4(d) of the Employee Plan.

    

    (ff)
      “Stock Appreciation
      Right” shall mean any right granted under Section 6(b) of the Employee
      Plan.

    

    Section
      3.    Administration

    

    Except
      as
      otherwise provided herein, the Employee Plan shall be administered by the
      Committee, which shall have the power to interpret the Employee Plan and to
      adopt such rules and guidelines for implementing the terms of the Employee
      Plan
      as it may deem appropriate.  The Committee shall have the ability to
      modify the Employee Plan provisions, to the extent necessary, to accommodate
      any
      changes in laws and regulations in jurisdictions in which Participants will
      receive Awards.

    

    (a)
      Subject to the terms of the Employee Plan and applicable law, the Committee
      shall have full power and authority to:

    

    
      	
               
                

            	
              (i)

            	
              designate
                Participants;

            

    

    

    
      	
               
                

            	
              (ii)

            	
              determine
                the type or types of Awards to be granted to each Participant under
                the
                Employee Plan;

            

    

    

    
      	
               
                

            	
              (iii)

            	
              determine
                the number of Shares to be covered by (or with respect to which payments,
                rights, or other matters are to be calculated in connection with)
                Awards;

            

    

    

    
      	
               
                

            	
              (iv)

            	
              determine
                the terms and conditions of any
                Award;

            

    

    

    
      	
               
                

            	
              (v)

            	
              determine
                whether, to what extent, and under what circumstances Awards may
                be
                settled or exercised in cash, Shares, other securities, or other
                Awards,
                or canceled, forfeited, or suspended, and the method or methods by
                which
                Awards may be settled, exercised, canceled, forfeited, or
                suspended;

            

    

    

    
      	
               
                

            	
              (vi)

            	
              determine
                whether, to what extent, and under what circumstances cash, Shares,
                other
                securities, other Awards, and other amounts payable with respect
                to an
                Award under the Employee Plan shall be deferred either automatically
                or at
                the election of the holder thereof or of the
                Committee;

            

    

    

    
      	
               
                

            	
              (vii)

            	
              interpret
                and administer the Employee Plan and any instrument or agreement
                relating
                to, or Award made under, the Employee
                Plan;

            

    

    

    
      	
               
                

            	
              (viii)

            	
              establish,
                amend, suspend, or waive such rules and
                guidelines;

            

    

    

    
      	
               
                

            	
              (ix)

            	
              accelerate
                the vesting, exercise or payment of an
                Award;

            

    

     

    
      	
               
                

            	
              (x)

            	
              make
                any other determination and take any other action that the Committee
                deems
                necessary or desirable for the administration of the Employee Plan;
                and

            

    

    

    
      	
               
                

            	
              (xi)

            	
              correct
                any defect, supply any omission, or reconcile any inconsistency in
                the
                Employee Plan or any Award in the manner and to the extent it shall
                deem
                desirable to carry the Employee Plan into
                effect.

            

    

    

    (b)
      Unless otherwise expressly provided in the Employee Plan, all designations,
      determinations, interpretations, and other decisions under or with respect
      to
      the Employee Plan or any Award shall be within the sole discretion of the
      Committee, may be made at any time, and shall be final, conclusive, and binding
      upon all Persons, including the Company, any Affiliate, any Participant, any
      holder or beneficiary of any Award, any stockholder, and any employee of the
      Company or of any Affiliate.  In addition, actions of the Committee
      may be taken by the Committee but with one or more members abstaining or
      recusing himself or herself from acting on the matter, so long as two or more
      members remain to act on the matter.  Such action, authorized by the
      Committee upon the abstention or recusal of such members, shall be the action
      of
      the Committee for purposes of the Employee Plan.  The Committee may
      designate the Secretary of the Company or other employees of the Company to
      assist the Committee in the administration and operation of the Employee Plan
      and may direct such persons to execute documents on behalf of the
      Committee.

    

    Section
      4.    Shares Available for Awards

    

    (a)
Shares
      Available. Subject to
      adjustment as provided in Section 4(d),

    

    The
      total
      number of shares of Common Stock reserved and available for delivery pursuant
      to
      Awards granted under the Employee Plan shall be one million (1,000,000); of
      which no more than five hundred thousand (500,000) may be available for Awards
      granted in any form provided for under the Employee Plan other than Options
      or
      Stock Appreciation Rights. If any Shares covered by an Award granted under
      the
      Employee Plan, or to which such an Award relates, are forfeited, or if an Award
      otherwise terminates without the delivery of Shares or of other consideration,
      then the Shares covered by such Award, or to which such Award relates, or the
      number of Shares otherwise counted against the aggregate number of Shares
      available under the Employee Plan with respect to such Award, to the extent
      of
      any such forfeiture or termination, shall again be available for granting Awards
      under the Employee Plan. Notwithstanding the foregoing but subject to adjustment
      as provided in Section 4(d), no more than three hundred thousand (300,000)
      Shares shall be available for delivery pursuant to the exercise of Incentive
      Stock Options.

    

    Any
      Award
      made under a previous ePlus incentive plan
      shall
      continue to be subject to the terms and conditions of the plan under which
      it
      was awarded and the applicable Award Agreement.

    

    
      	
              (b)

            	
              Accounting
                for Awards.
                For purposes of this Section 4,

            

    

    

    
      	
               
                

            	
              (i)

            	
              if
                an Award (other than a Dividend Equivalent) is denominated in Shares,
                the
                number of Shares covered by such Award, or to which such Award relates,
                shall be counted on the date of grant of such Award against the aggregate
                number of Shares available for granting Awards under the Employee
                Plan;
                and

            

    

    

    
      	
               
                

            	
              (ii)

            	
              Dividend
                Equivalents denominated in Shares and Awards not denominated in Shares
                but
                potentially payable in Shares shall be counted against the aggregate
                number of Shares available for granting Awards under the Employee
                Plan in
                such amount and at such time as the Dividend Equivalents and such
                Awards
                are settled in Shares, provided, however, that
                Awards that operate in tandem with (whether granted simultaneously
                with or
                at a different time from), or that are substituted for, other Awards
                may
                only be counted once against the aggregate number of Shares available,
                and
                the Committee shall adopt procedures, as it deems appropriate, in
                order to
                avoid double counting. Any Shares that are delivered by the Company,
                and
                any Awards that are granted by, or become obligations of, the Company
                through the assumption by the Company or an Affiliate of, or in
                substitution for, outstanding awards previously granted by an acquired
                company, shall not be counted against the Shares available for granting
                Awards under this Plan.

            

    

     

    
      	
               
                

            	
              (iii)

            	
              Notwithstanding
                anything herein to the contrary, any Shares related to Awards which
                terminate by expiration, forfeiture, cancellation, or otherwise without
                the issuance of such Shares, are settled in cash in lieu of Shares,
                or are
                exchanged with the Committee’s permission, prior to the issuance of
                Shares, for Awards not involving Shares, shall be available again
                for
                grant under this Plan. Shares subject to an Award under the Employee
                Plan
                may not again be made available for issuance under the Employee Plan
                if
                such Shares are: (x) Shares that were subject to an Option or a
                stock-settled Stock Appreciation Right and were not issued upon the
                net
                settlement or net exercise of such Option or Stock Appreciation Right,
                (y)
                Shares delivered to or withheld by the Company to pay the exercise
                price
                or the withholding taxes under Options or Stock Appreciation Rights,
                or
                (z) Shares repurchased on the open market with the proceeds of an
                Option
                exercise.

            

    

    

    (c)           Sources
      of Shares Deliverable Under
      Awards. Any Shares delivered pursuant to an Award may consist, in whole
      or in part, of authorized but unissued Shares or of treasury
      Shares.

    

    (d)           Adjustments.

    

    
      	
               
                

            	
              (i)

            	
              In
                the event that the Committee shall determine that any stock dividend,
                recapitalization, stock split, reverse stock split, reorganization,
                merger, consolidation, split-up, spin-off, combination, repurchase,
                or
                exchange of Shares or other securities of the Company, issuance of
                warrants or other rights to purchase Shares or other securities of
                the
                Company, or other similar corporate transaction or event constitutes
                an
                equity restructuring transaction, as that term is defined in Statement
                of
                Financial Accounting Standards No. 123 (revised) or otherwise affects
                the
                Shares, then the Committee shall adjust the following in a manner
                that is
                determined by the Committee to be appropriate in order to prevent
                dilution
                or enlargement of the benefits or potential benefits intended to
                be made
                available under the Employee Plan:

            

    

    

    (A)           the
      number and type of Shares or other securities which thereafter may be made
      the
      subject of Awards including the limit specified in Section 4(a) regarding the
      number of shares that may be granted in the form of Restricted Stock, Restricted
      Stock Units, Performance Awards, or Other Stock-Based Awards;

    

    (B)           the
      number and type of Shares or other securities subject to outstanding
      Awards;

    

    (C)           the
      number and type of Shares or other securities specified as the annual
      per-participant limitation under Section 6(g)(v) and (vi);

    

    (D)           the
      grant, purchase, or exercise price with respect to any Award, or, if deemed
      appropriate, make provision for a cash payment to the holder of an outstanding
      Award; and

    

    (E)         
        other value determinations applicable to outstanding
      awards.

    

    Provided,
      however, in each
      case, that with respect to Awards of Incentive Stock Options no such adjustment
      shall be authorized to the extent that such authority would cause the Employee
      Plan to violate Sections 422(b)(1) of the Code or any successor provision
      thereto; and provided further,
      however, that the number of Shares subject to any Award denominated in
      Shares shall always be a whole number.  Notwithstanding the foregoing,
      no adjustments shall be made with respect to Performance Awards granted to
      a Key
      Employee to the extent such adjustment would cause the Award to fail to qualify
      as performance-based compensation under Section 162(m) of the Code and no
      adjustment shall be required if the Committee determines that such action could
      cause an Award to fail to satisfy the conditions of an applicable exception
      from
      the requirements of Section 409A of the Code or otherwise could subject a
      Participant to the additional tax imposed under Section 409A in respect of
      an
      outstanding Award.

     

    
      	
               
                

            	
              (ii)

            	
              Consolidation,
                Merger or Sale
                of Assets.  Upon the occurrence of (i) a merger,
                consolidation, acquisition of property or stock, reorganization or
                otherwise involving the Company in which the Company is not to be
                the
                surviving corporation, (ii) a merger, consolidation, acquisition
                of
                property or stock, reorganization or otherwise involving the Company
                in
                which the Company is the surviving corporation but holders of Shares
                receive securities of another corporation, or (iii) a sale of all
                or
                substantially all of the Company’s assets (as an entirety) or capital
                stock to another person, any Award granted hereunder shall be deemed
                to
                apply to the securities, cash or other property (subject to adjustment
                by
                cash payment in lieu of fractional interests) to which a holder of
                the
                number of Shares equal to the number of Shares the Participant would
                have
                been entitled, and proper provisions shall be made to ensure that
                this
                clause is a condition to any such transaction; provided, however, that
                for an Award that is not subject to Section 409A the Committee (or,
                if
                applicable, the board of directors of the entity assuming the Company’s
                obligations under the Employee Plan) shall, in its discretion, have
                the
                power to either:

            

    

    

    (a)           provide,
      upon written notice to Participants, that all Awards that are currently
      exercisable must be exercised within the time period specified in the notice
      and
      that all Awards not exercised as of the expiration of such period shall be
      terminated without consideration; provided, however, that the
      Committee (or successor board of directors) may provide, in its discretion,
      that, for purposes of this subsection, all outstanding Awards are currently
      exercisable, whether or not vested; or

    

    (b)           cancel
      any or all Awards and, in consideration of such cancellation, pay to each
      Participant an amount in cash with respect to each Share issuable under an
      Award
      equal to the difference between the Fair Market Value of such Share on such
      date
      (or, if greater, the value per Share of the consideration received by holders
      of
      Shares as a result of such merger, consolidation, reorganization or sale) and
      the Exercise Price.

    

    Section
      5.    Eligibility

    

    Any
      Employee of the Company or of any Affiliate shall be eligible to be designated
      a
      Participant.

    

    Section
      6.    Awards

    

    (a)
Options.
      Options granted
      under the Employee Plan may, at the discretion of the Committee, be in the
      form
      of either Non-Qualified Stock Options, Incentive Stock Options or a combination
      of the two.  Where both a Non-Qualified Stock Option and an Incentive
      Stock Option are granted to a Participant at the same time, such Awards shall
      be
      deemed to have been granted in separate grants, shall be clearly identified,
      and
      in no event will the exercise of one such Award affect the right to exercise
      the
      other Award.  Unless otherwise specified, an Option shall be a
      Non-Qualified Stock Option.  Subject to Section 3, the Committee is
      hereby authorized to grant Options to Participants with the following terms
      and
      conditions and with such additional terms and conditions, in either case not
      inconsistent with the provisions of the Employee Plan, as the Committee shall
      determine:

    

    
      	
               
                

            	
              (i)

            	
              Amount
                of Shares. The
                Committee may grant Options to a Participant in such amounts as the
                Committee may determine, subject to the limitations se forth in Section
                6(g)(v) of the Employee Plan.  The number of Shares subject to
                an Option shall be set forth in the applicable Award
                Agreement.

            

    

    

    
      	
               
                

            	
              (ii)

            	
              Exercise
                Price. The
                exercise price per Share under an Option shall be determined by the
                Committee; provided,
                however, and except as provided in Section 4(d), that such exercise
                price shall not be less than 100% of the Fair Market Value of a Share
                on
                the date of grant of such Option.  The exercise price of an
                Option, as determined by the Committee pursuant to this Section 6(a)(ii),
                shall be set forth in the applicable Award
                Agreement.

            

    

    

    
      	
               
                

            	
              (iii)

            	
              Option
                Term. Except as
                set forth in Section 6(a)(vii) below, the term of each Option shall
                not
                exceed ten (10) years from the date of
                grant.

            

    

     

    
      	
               
                

            	
              (iv)

            	
              Timing
                of Exercise.
                Except as may otherwise be provided in the Award Agreement or as
                the
                Committee may otherwise determine, and subject to the Committee’s
                authority under Section 3(a) to accelerate the vesting of an Award
                and to waive or amend any terms, conditions, limitations or restrictions
                of an Award, each Option granted under the Employee Plan shall be
                exercisable in whole or in part, subject to the following conditions,
                limitations and restrictions:

            

    

    

    
      	
               
                

            	
              (A)

            	
              20%
                of the Shares subject to an Option shall first become exercisable
                on the
                one-year anniversary of the date of grant, 30% shall first become
                exercisable on the two-year anniversary of the date of grant and
                the
                remainder shall first become exercisable on the three-year anniversary
                of
                the date of grant;

            

    

    

    
      	
               
                

            	
              (B)

            	
              All
                Options subject to the Award shall become immediately exercisable
                upon a
                Change in Control;

            

    

    

    
      	
               
                

            	
              (C)

            	
              All
                Options granted to a Participant shall become immediately exercisable
                upon
                the death or Disability of the Participant and must be exercised,
                if at
                all, within one year after such Participant’s death or Disability, but in
                no event after the date such Options would otherwise lapse. Options
                of a
                deceased Participant may be exercised only by the estate of the
                Participant or by the person given authority to exercise such Options
                by
                the Participant’s will or by operation of law. In the event an Option is
                exercised by the executor or administrator of a deceased Participant,
                or
                by the person or persons to whom the Option has been transferred
                by the
                Participant’s will or the applicable laws of descent and distribution, the
                Company shall be under no obligation to deliver Shares thereunder
                unless
                and until the Company is satisfied that the person or persons exercising
                the Option is or are the duly appointed executor(s) or administrator(s)
                of
                the deceased Participant or the person to whom the Option has been
                transferred by the Participant’s will or by the applicable laws of descent
                and distribution;

            

    

    

    
      	
               
                

            	
              (D)

            	
              Upon
                an Employee’s Retirement, all Options that have not become exercisable as
                of the date of Retirement shall be forfeited and to the extent that
                Options have become exercisable as of such date, such Options must
                be
                exercised, if at all, within one year after Retirement, but in no
                event
                after the date such Options would otherwise
                lapse; and

            

    

    

    
      	
               
                

            	
              (E)

            	
              The
                Option shall lapse upon termination of employment for
                Cause.  Except as otherwise provided in Section 6(a)(vii)
                or Section 6(g)(xii), upon an Employee’s termination of employment, for
                any reason other than death, Disability, Retirement or Cause, all
                Options
                that have not become exercisable as of the date of termination shall
                be
                forfeited and to the extent that Options have become exercisable
                as of
                such date, such Options must be exercised, if at all, within 90 days
                after such termination of
                employment.

            

    

    

    
      	
               
                

            	
              (v)

            	
              Payment
                of Exercise
                Price. The exercise price shall be paid in full when the Option
                is
                exercised and stock certificates shall be registered and delivered
                only
                upon receipt of such payment. Unless otherwise provided by the Committee,
                payment of the exercise price may be made in cash or by certified
                check,
                bank draft, wire transfer, or postal or express money order or any
                other
                form of consideration approved by the Committee. In addition, at
                the
                discretion of the Committee, payment of all or a portion of the exercise
                price may be made by

            

    

    

    
      	
               
                

            	
              (A)

            	
              Delivering
                a properly executed exercise notice to the Company, or its agent,
                together
                with irrevocable instructions to a broker to deliver promptly to
                the
                Company the amount of sale proceeds with respect to the portion of
                the
                Shares to be acquired upon exercise having a Fair Market Value on
                the date
                of exercise equal to the sum of the applicable portion of the exercise
                price being so paid and appropriate tax
                withholding;

            

    

     

    
      	
               
                

            	
              (B)

            	
              Tendering
                (actually or by attestation) to the Company previously acquired Shares
                that have been held by the Participant for at least six months having
                a
                Fair Market Value on the day prior to the date of exercise equal
                to the
                applicable portion of the exercise price being so
                paid; or

            

    

    

    
      	
               
                

            	
              (C)

            	
              any
                combination of the foregoing.

            

    

    

    
      	
               
                

            	
              (vi)

            	
              Incentive
                Stock
                Options. The terms of any Incentive Stock Option granted under the
                Employee Plan shall be designed to comply in all respects with the
                provisions of Section 422 of the Code, or any successor provision
                thereto,
                and any regulations promulgated thereunder which are hereby incorporated
                by reference.  In the event that any provision of the Employee
                Plan would contravene the Code rules that apply to Incentive Stock
                Options, such Plan provision shall not apply to Incentive Stock
                Options.  Incentive Stock Options granted under the Employee
                Plan shall be subject to the following additional conditions, limitations
                and restrictions:

            

    

    

    
      	
               
                

            	
              (A)

            	
              Timing
                of Grant.
                No Incentive
                Stock Option shall be granted under the Employee Plan after the 10-year
                anniversary of the date the Employee Plan is adopted by the
                Board.

            

    

    

    
      	
               
                

            	
              (B)

            	
              Amount
                of Award. The
                aggregate Fair Market Value of Shares (determined as of the time
                of grant)
                with respect to which such Incentive Stock Options are exercisable
                for the
                first time by the Participant during any calendar year (under all
                plans of
                the Company and any subsidiary) may not exceed $100,000, taking Incentive
                Stock Option into account in the order in which they were
                granted.  To the extent an Option initially designated as an
                Incentive Stock Option exceeds the value limit of this Section or
                otherwise fails to satisfy the requirements applicable to Incentive
                Stock
                Options, it shall be deemed a Non-Qualified Stock Option and shall
                otherwise remain in full force and
                effect.

            

    

    

    
      	
               
                

            	
              (C)

            	
              Timing
                of
                Exercise.  In the event that the Committee exercises its
                discretion to permit an Incentive Stock Option to be exercised by
                a
                Participant more than 90 days after the Participant’s termination of
                employment and such exercise occurs more than 90 days after such
                Participant has ceased being an Employee (or more than 12 months
                after the Participant is Disabled or dies), such Incentive Stock
                Option
                shall thereafter be treated as a Non-Qualified Stock Option for all
                purposes.

            

    

    

    
      	
               
                

            	
              (D)

            	
              Transfer
                Restrictions.
                In no event shall the Committee permit an Incentive Stock Option
                to be
                transferred by a Participant other than by will or the laws of descent
                and
                distribution, and any Incentive Stock Option granted hereunder shall
                be
                exercisable, during his or her lifetime, only by the
                Participant.

            

    

    

    
      	
               
                

            	
              (E)

            	
              Ten
                Percent Owners. No
                Incentive Stock Option shall be granted to any individual who, at
                the date
                of grant, owns stock possessing more than ten percent of the total
                combined voting power of all classes of stock of the Company or any
                Affiliate unless the exercise price per share of such Option is at
                least
                110% of the Fair Market Value per Share at the date of grant and
                the
                Option expires no later than five years after the date of
                grant.

            

    

    

    
      	
               
                

            	
              (vii)

            	
              Extension
                of Option Term for
                Blackouts.  At its discretion, the Committee may extend
                the term of any Option beyond its earlier termination pursuant to
                Section 6(a)(iii),(iv)(C), (iv)(D) or (iv)(E) if the
                Company had prohibited the participant from exercising the Option
                prior to
                termination or expiration in order to comply with applicable Federal,
                state, local or foreign law, provided that such extension may not
                exceed  the earlier of 30 days from the date such
                prohibition is lifted or ten years after the Option grant
                date.

            

    

    

    (b)
Stock
      Appreciation Rights.
      The Committee is hereby authorized to grant Stock Appreciation Rights to
      Participants. Subject to the terms of the Employee Plan and any applicable
      Award
      Agreement, a Stock Appreciation Right Award granted under the Employee Plan
      shall confer on the holder thereof a right to receive, upon exercise thereof,
      the excess of (i) the Fair Market Value of one Share on the date of exercise
      over (ii) the grant price of the Stock Appreciation Right as specified by the
      Committee, multiplied by the number of Stock Appreciation Rights
      granted.  As determined by the Committee, the payment upon exercise
      may be paid in cash, Shares to be valued at their Fair Market Value on the
      date
      of exercise, any other mode of payment deemed appropriate by the Committee
      or
      any combination thereof.  The Committee may establish a maximum
      appreciation value payable for stock appreciation rights.

     

    
      	
               
                

            	
              (i)

            	
              Grant
                Price. Shall be
                determined by the Committee, provided, however, and
                except as provided in Section 4(d), that such price shall not be
                less than
                100% of the Fair Market Value of one Share on the date of grant of
                the
                Stock Appreciation Right, except that if a Stock Appreciation Right
                is at
                any time granted in tandem with an Option, the grant price of the
                Stock
                Appreciation Right shall not be less than the exercise price of such
                Option.

            

    

    

    
      	
               
                

            	
              (ii)

            	
              Term.
                The term of each
                Stock Appreciation Right shall not exceed ten (10) years from the
                date of
                grant.

            

    

    

    
      	
               
                

            	
              (iii)

            	
              Time
                and Method of
                Exercise. The Committee shall establish in the applicable Award
                Agreement the time or times at which a Stock Appreciation Right may
                be
                exercised in whole or in part.

            

    

    

    (c)
Restricted
      Stock and Restricted
      Stock Units. The Committee is hereby authorized to grant Awards of
      Restricted Stock and Restricted Stock Units to Participants.

    

    
      	
               
                

            	
              (i)

            	
              Restrictions.
                Shares of
                Restricted Stock and Restricted Stock Units shall be subject to such
                restrictions as the Committee may establish in the applicable Award
                Agreement (including, without limitation, any limitation on the right
                to
                vote a Share of Restricted Stock or the right to receive any dividend
                or
                other right), which restrictions may lapse separately or in combination
                at
                such time or times, in such installments or otherwise, as the Committee
                may deem appropriate. Unrestricted Shares, evidenced in such manner
                as the
                Committee shall deem appropriate, shall be delivered to the holder
                of
                Restricted Stock promptly after such restrictions have
                lapsed.

            

    

    

    
      	
               
                

            	
              (ii)

            	
              Registration.
                Any
                Restricted Stock or Restricted Stock Units granted under the Employee
                Plan
                may be evidenced in such manner as the Committee may deem appropriate,
                including, without limitation, book-entry registration or issuance
                of a
                stock certificate or certificates. In the event any stock certificate
                is
                issued in respect of Shares of Restricted Stock granted under the
                Employee
                Plan, such certificate shall be registered in the name of the Participant
                and shall bear an appropriate legend referring to the terms, conditions,
                and restrictions applicable to such Restricted
                Stock.

            

    

    

    
      	
               
                

            	
              (iii)

            	
              Forfeiture.
                Upon
                termination of employment during the applicable restriction period
                for any
                reason other than death or Disability, except as determined otherwise
                by
                the Committee, all Shares of Restricted Stock and all Restricted
                Stock
                Units still, in either case, subject to restriction shall be forfeited
                and
                reacquired by the Company.

            

    

    

    (d)
Performance
      Awards. The
      Committee is hereby authorized to grant Performance Awards to Participants.
      Performance Awards include arrangements under which the grant, issuance,
      retention, vesting and/or transferability of any Award is subject to such
      Performance Criteria and such additional conditions or terms as the Committee
      may designate. The Committee may establish a maximum Performance Award. Subject
      to the terms of the Employee Plan and any applicable Award Agreement, a
      Performance Award granted under the Employee Plan:

    

    
      	
               
                

            	
              (i)

            	
              may
                be denominated or payable in cash, Shares (including, without limitation,
                Restricted Stock), other securities, or other Awards;
                and

            

    

    

    
      	
               
                

            	
              (ii)

            	
              shall
                confer on the holder thereof rights valued as determined by the Committee
                and payable to, or exercisable by, the holder of the Performance
                Award, in
                whole or in part, upon the achievement of such performance goals
                during
                such Performance Periods as the Committee shall
                establish.

            

    

    

    (e)
Dividend
      Equivalents. The
      Committee is hereby authorized to grant to Participants Awards under which
      the
      holders thereof shall be entitled to receive payments equivalent to dividends
      or
      interest with respect to a number of Shares determined by the Committee, and
      the
      Committee may provide that such amounts (if any) shall be deemed to have been
      reinvested in additional Shares or otherwise reinvested. Subject to the terms
      of
      the Employee Plan and any applicable Award Agreement, such Awards may have
      such
      terms and conditions as the Committee shall determine.

    

    (f)
Other
      Stock-Based Awards. The
      Committee is hereby authorized to grant to Participants such other Awards that
      are denominated or payable in, valued in whole or in part by reference to,
      or
      otherwise based on or related to, Shares (including, without limitation,
      securities convertible into Shares), as are deemed by the Committee to be
      consistent with the purposes of the Employee Plan, provided, however, that such
      grants must comply with applicable law. Subject to the terms of the Employee
      Plan and any applicable Award Agreement, the Committee shall determine the
      terms
      and conditions of such Awards. Shares or other securities delivered pursuant
      to
      a purchase right granted under this Section 6(f) shall be purchased for such
      consideration, which may be paid by such method or methods and in such form
      or
      forms, including, without limitation, cash, Shares, other securities, or other
      Awards, or any combination thereof, as the Committee shall determine, the value
      of which consideration, as established by the Committee, and except as provided
      in Section 4(d), shall not be less than the Fair Market Value of such Shares
      or
      other securities as of the date such purchase right is.

    

    (g)
General.

    

    
      	
               
                

            	
              (i)

            	
              No
                Cash Consideration for
                Awards. Awards shall be granted for no cash consideration or for
                such minimal cash consideration as may be required by applicable
                law.

            

    

    

    
      	
               
                

            	
              (ii)

            	
              Awards
                may be Granted
                Separately or Together. Awards may, in the discretion of the
                Committee, be granted either alone or in addition to, in tandem with,
                or
                in substitution for any other Award or any award granted under any
                other
                plan of the Company or any Affiliate. Awards granted in addition
                to or in
                tandem with other Awards, or in addition to or in tandem with awards
                granted under any other plan of the Company or any Affiliate, may
                be
                granted either at the same time as or at a different time from the
                grant
                of such other Awards.

            

    

    

    
      	
               
                

            	
              (iii)

            	
              Forms
                of Payment under
                Awards. Subject to the terms of the Employee Plan and of any
                applicable Award Agreement, payments or transfers to be made by the
                Company or an Affiliate upon the grant, exercise, or payment of an
                Award
                may be made in such form or forms as the Committee shall determine,
                including, without limitation, cash, Shares, rights in or to Shares
                issuable under the Award or other Awards, other securities, or other
                Awards, or any combination thereof, and may be made in a single payment
                or
                transfer, in installments, or on a deferred basis, in each case in
                accordance with rules and procedures established by the Committee.
                Such
                rules and procedures may include, without limitation, provisions
                for the
                payment or crediting of reasonable interest on installment or deferred
                payments or the grant or crediting of Dividend Equivalents in respect
                of
                installment or deferred payments.

            

    

    

    
      	
               
                

            	
              (iv)

            	
              Limits
                on Transfer of
                Awards. Except as provided by the Committee, no Award and no right
                under any such Award, shall be assignable, alienable, saleable, or
                transferable by a Participant otherwise than by will or by the laws
                of
                descent and distribution provided, however,
                that, if so determined by the Committee, a Participant may, in the
                manner
                established by the Committee, designate a beneficiary or beneficiaries
                to
                exercise the rights of the Participant with respect to any Award
                upon the
                death of the Participant. Each Award, and each right under any Award,
                shall be exercisable, during the Participant’s lifetime, only by the
                Participant or, if permissible under applicable law, by the Participant’s
                guardian or legal representative. No Award and no right under any
                such
                Award, may be pledged, alienated, attached, or otherwise encumbered,
                and
                any purported pledge, alienation, attachment, or encumbrance thereof
                shall
                be void and unenforceable against the Company or any
                Affiliate.

            

    

     

    
      	
               
                

            	
              (v)

            	
              Per-Person
                Limitation on
                Options and SARs. The number of Shares with respect to which
                Options and Stock Appreciation Rights may be granted under the Employee
                Plan during any calendar year to an individual Participant shall
                not
                exceed fifty thousand (50,000) Shares, subject to adjustment as provided
                in Section 4(d).

            

    

    

    
      	
               
                

            	
              (vi)

            	
              Per-Person
                Limitation on
                Certain Awards. Other than Options and Stock Appreciation Rights,
                the aggregate number of Shares with respect to which Restricted Stock,
                Restricted Stock Units, Performance Awards and Other Stock-Based
                Awards
                may be granted under the Employee Plan during any calendar year to
                an
                individual Participant shall not exceed fifty thousand (50,000) Shares,
                subject to adjustment as provided in Section
                4(d).

            

    

    

    
      	
               
                

            	
              (vii)

            	
              Conditions
                and Restrictions
                upon Securities Subject to Awards. The Committee may provide that
                the Shares issued upon exercise of an Option or Stock Appreciation
                Right
                or otherwise subject to or issued under an Award shall be subject
                to such
                further agreements, restrictions, conditions or limitations as the
                Committee in its discretion may specify prior to the exercise of
                such
                Option or Stock Appreciation Right or the grant, vesting or settlement
                of
                such Award, including without limitation, conditions on vesting or
                transferability and forfeiture or repurchase provisions or provisions
                on
                payment of taxes arising in connection with an Award. Without limiting
                the
                foregoing, such restrictions may address the timing and manner of
                any
                resales by the Participant or other subsequent transfers by the
                Participant of any Shares issued under an Award, including without
                limitation: (A) restrictions under an insider trading policy or pursuant
                to applicable law, (B) restrictions designed to delay and/or coordinate
                the timing and manner of sales by Participant and holders of other
                Company
                equity compensation arrangements, (C) restrictions as to the use
                of a
                specified brokerage firm for such resales or other transfers and
                (D)
                provisions requiring Shares to be sold on the open market or to the
                Company in order to satisfy tax withholding or other
                obligations.

            

    

    

    
      	
               
                

            	
              (viii)

            	
              Share
                Certificates. All
                Shares or other securities delivered under the Employee Plan pursuant
                to
                any Award or the exercise thereof shall be subject to such stop transfer
                orders and other restrictions as the Committee may deem advisable
                under
                the Employee Plan or the rules, regulations, and other requirements
                of the
                Securities and Exchange Commission, any stock exchange or automated
                quotation system upon which such Shares or other securities are then
                listed, quoted, or traded, and any applicable Federal, state, or
                local
                securities laws, and the Committee may cause a legend or legends
                to be put
                on any such certificates or issue instructions to the transfer agent
                to
                make appropriate reference to such
                restrictions.

            

    

    

    
      	
               
                

            	
              (ix)

            	
              Suspension
                of Exercise.
                The Company reserves the right from time to time to suspend the exercise
                of any stock option or stock appreciation right where such suspension
                is
                deemed by the Company as necessary or appropriate for corporate
                purposes.

            

    

    

    
      	
               
                

            	
              (x)

            	
              Change
                in Control.
                Notwithstanding anything to the contrary in the Employee Plan, any
                conditions or restrictions on Restricted Stock shall lapse upon a
                Change
                in Control.

            

    

    

    
      	
               
                

            	
              (xi)

            	
              Award
                Agreement.  Each grant of an Award under the Employee
                Plan will be evidenced by an Award Agreement.  Such document
                will contain such provisions as the Committee may in its discretion
                deem
                advisable, provided that such
                provisions are not inconsistent with any of the provisions of the
                Employee
                Plan.

            

    

    

    
      	
               
                

            	
              (xii)

            	
              Special
                Forfeiture
                Provision.  If the Committee, in its discretion,
                determines and the applicable Award Agreement so provides, a Participant
                who, without prior written approval of the Company, enters into any
                employment or consultation arrangement (including service as an agent,
                partner, stockholder, consultant, officer or director) to any entity
                or
                person engaged in any business in which the Company or its affiliates
                is
                engaged which, in the sole judgment of the Company, is competitive
                with
                the Company or any Affiliate, (i) shall forfeit all rights under any
                outstanding Option or Stock Appreciation Right and shall return to
                the
                Company the amount of any profit realized upon the exercise, within
                such
                period as the Committee may determine, of any Option or Stock Appreciation
                Right, and (ii) shall forfeit and return to the Company all Shares of
                Restricted Stock and other Awards which are not then vested or which
                vested but remain subject to the restrictions imposed by this
                Section 6(g)(xii), as provided in the Award
                Agreement.

            

    

     

    
      	
               
                

            	
              (xiii)

            	
              No
                Repricing. Repricing
                of Options or Stock Appreciation Rights shall not be permitted without
                stockholder approval. For this purpose, a “repricing”
means any
                of
                the following (or any other action that has the same effect as any
                of the
                following): (A) changing the terms of an Option or Stock Appreciation
                Right to lower its exercise price (other than pursuant to
                Section 4(d)); (B) any other action that is treated as a
                “repricing” under generally accepted accounting principles; and
                (C) repurchasing for cash or canceling an Option or Stock
                Appreciation Right at a time when its exercise price is greater than
                the
                Fair Market Value of the underlying stock in exchange for another
                Award,
                unless the cancellation and exchange occurs in connection with an
                event
                set forth in Section 4(d). Such cancellation and exchange would be
                considered a “repricing” regardless of whether it is treated as a
                “repricing” under generally accepted accounting principles and regardless
                of whether it is voluntary on the part of the
                Participant.

            

    

    

    Section
      7.    Amendment and Termination

    

    Except
      to
      the extent prohibited by applicable law and unless otherwise expressly provided
      in an Award Agreement or in the Employee Plan:

    

    (a)
Amendments
      to the Employee
      Plan. The Board of Directors of the Company may amend, alter, suspend,
      discontinue, or terminate the Employee Plan, in whole or in part; provided, however, that
      without the prior approval of the Company’s stockholders, no material amendment
      shall be made if stockholder approval is required by applicable law, rule or
      regulation, and; provided,
      further, that, notwithstanding any other provision of the Employee Plan
      or any Award Agreement, no such amendment, alteration, suspension,
      discontinuation, or termination shall be made without the approval of the
      stockholders of the Company that would:

    

    
      	
               
                

            	
              (i)

            	
              increase
                the total number of Shares available for Awards under the Employee
                Plan,
                except as provided in Section 4 hereof;
                or

            

    

    

    
      	
               
                

            	
              (ii)

            	
              except
                as provided in Section 4(d), permit Options, Stock Appreciation Rights,
                or
                other Stock-Based Awards encompassing rights to purchase Shares to
                be
                repriced, replaced, or regranted through cancellation, or by lowering
                the
                exercise price of a previously granted Option or the grant price
                of a
                previously granted Stock Appreciation Right, or the purchase price
                of a
                previously granted Other Stock-Based
                Award.

            

    

    

    (b)
Amendments
      to Awards. The
      Committee may waive any conditions or rights under, amend any terms of, or
      amend, alter, suspend, discontinue, or terminate, any Awards theretofore
      granted, prospectively or retroactively. No such amendment or alteration shall
      be made which would impair the rights of any Participant, without such
      Participant’s consent, under any Award theretofore granted, provided that no such consent
      shall be required with respect to any amendment or alteration if the Committee
      determines in its sole discretion that such amendment or alteration either
      (i)
      is required or advisable in order for the Company, the Employee Plan or the
      Award to satisfy or conform to any law or regulation or to meet the requirements
      of any accounting standard, or (ii) is not reasonably likely to significantly
      diminish the benefits provided under such Award.

    

    Section
      8.    General Provisions

    

    (a)
No
      Rights to Awards. No
      Employee, Participant or other Person shall have any claim to be granted any
      Award under the Employee Plan, or, having been selected to receive an Award
      under this Plan, to be selected to receive a future Award, and further there
      is
      no obligation for uniformity of treatment of Employees, Participants, or holders
      or beneficiaries of Awards under the Employee Plan. The terms and conditions
      of
      Awards need not be the same with respect to each recipient.

    

    (b)
Withholding.
      The Company or
      any Affiliate shall be authorized to withhold from any Award granted or any
      payment due or transfer made under any Award or under the Employee Plan the
      amount (in cash, Shares, other securities, or other Awards) of withholding
      taxes
      due in respect of an Award, its exercise, or any payment or transfer under
      such
      Award or under the Employee Plan and to take such other action as may be
      necessary in the opinion of the Company or Affiliate to satisfy statutory
      withholding obligations for the payment of such taxes.

    

    (c)
No
      Limit on Other Compensation
      Arrangements. Nothing contained in the Employee Plan shall prevent the
      Company or any Affiliate from adopting or continuing in effect other or
      additional compensation arrangements, and such arrangements may be either
      generally applicable or applicable only in specific cases.

    

    (d)
No
      Right to Employment. The
      grant of an Award shall not constitute an employment contract nor be construed
      as giving a Participant the right to be retained in the employ of the Company
      or
      any Affiliate. Further, the Company or an Affiliate may at any time dismiss
      a
      Participant from employment, free from any liability, or any claim under the
      Employee Plan, unless otherwise expressly provided in the Employee Plan or
      in
      any Award Agreement.

    

    (e)
Governing
      Law. The validity,
      construction, and effect of the Employee Plan and any rules and regulations
      relating to the Employee Plan shall be determined in accordance with the laws
      of
      the State of Delaware and applicable Federal law without regard to conflict
      of
      law.

    

    (f)
Severability.
      If any
      provision of the Employee Plan or any Award is or becomes or is deemed to be
      invalid, illegal, or unenforceable in any jurisdiction, or as to any Person
      or
      Award, or would disqualify the Employee Plan or any Award under any law deemed
      applicable by the Committee, such provision shall be construed or deemed amended
      to conform to applicable laws, or if it cannot be so construed or deemed amended
      without, in the determination of the Committee, materially altering the intent
      of the Employee Plan or the Award, such provision shall be stricken as to such
      jurisdiction, Person, or Award, and the remainder of the Employee Plan and
      any
      such Award shall remain in full force and effect.

    

    (g)
No
      Trust or Fund Created.
      Neither the Employee Plan nor any Award shall create or be construed to create
      a
      trust or separate fund of any kind or a fiduciary relationship between the
      Company or any Affiliate and a Participant or any other Person. To the extent
      that any Person acquires a right to receive payments from the Company or any
      Affiliate pursuant to an Award, such right shall be no greater than the right
      of
      any unsecured general creditor of the Company or any Affiliate.

    

    (h)
No
      Fractional Shares. No
      fractional Shares shall be issued or delivered pursuant to the Employee Plan
      or
      any Award, and the Committee shall determine whether cash or other securities
      shall be paid or transferred in lieu of any fractional Shares, or whether such
      fractional Shares or any rights thereto shall be canceled, terminated, or
      otherwise eliminated.

    

    (i)
Headings.
      Headings are given
      to the Sections and subsections of the Employee Plan solely as a convenience
      to
      facilitate reference. Such headings shall not be deemed in any way material
      or
      relevant to the construction or interpretation of the Employee Plan or any
      provision thereof, and, in the event of any conflict, the text of the Employee
      Plan, rather than such headings, shall control.

    

    (j)
Indemnification.
      Subject to
      requirements of Delaware State law, each individual who is or shall have been
      a
      member of the Board, or a Committee appointed by the Board or a delegate of
      the
      Committee so acting, shall be indemnified and held harmless by the Company
      against and from any loss, cost, liability, or expense that may be imposed
      upon
      or reasonably incurred by him or her in connection with or resulting from any
      claim, action, suit, or proceeding to which he or she may be a party or in
      which
      he or she may be involved by reason of any action taken or failure to act under
      this Plan and against and from any and all amounts paid by him or her in
      settlement thereof, with the Company’s approval, or paid by him or her in
      satisfaction of any judgment in any such action, suit, or proceeding against
      him
      or her, provided he or
      she shall give the Company an opportunity, at its own expense, to handle and
      defend the same before he or she undertakes to handle and defend it on his/her
      own behalf, unless such loss, cost, liability, or expense is a result of his/her
      own willful misconduct or except as expressly provided by statute. The foregoing
      right of indemnification shall not be exclusive of any other rights of
      indemnification to which such individuals may be entitled under the Company’s
      Certificate of
      Incorporation or Bylaws, as a matter of law, or otherwise, or any power that
      the
      Company may have to indemnify them or hold them harmless.

    

    (k)
Compliance
      with Section 409A.
      Except to the extent specifically provided otherwise by the Committee, Awards
      under the Employee Plan are intended to satisfy the requirements of Section
      409A
      so as to avoid the imposition of any additional taxes or penalties under Section
      409A. If the Committee determines that an Award, Award Agreement, payment,
      distribution, deferral election, transaction or any other action or arrangement
      contemplated by the provisions of the Employee Plan would, if undertaken, cause
      a Participant to become subject to any additional taxes or other penalties
      under
      Section 409A, then unless the Committee specifically provides otherwise, such
      Award, Award Agreement, payment, distribution, deferral election, transaction
      or
      other action or arrangement shall not be given effect to the extent it causes
      such result and the related provisions of the Employee Plan and/or Award
      Agreement will be deemed modified, or, if necessary, suspended in order to
      comply with the requirements of Section 409A to the extent determined
      appropriate by the Committee, in each case without the consent of or notice
      to
      the Participant.  Notwithstanding any provision in the Employee Plan
      to the contrary, with respect to any Award that is subject to Section 409A,
      distributions on account of a separation from service may not be made to a
      “specified employee” (as defined by Section 409A) before the date which is six
      (6) months after the date of separation from service (or, if earlier, the date
      of death of the employee).

    

    (l)
No
      Representations or Covenants with
      Respect to Tax Qualification. Although the Company may endeavor to (i)
      qualify an Award for favorable U.S. tax provisions (e.g., incentive stock
      options
      under Section 422 of the Code) or (ii) avoid adverse tax treatment (e.g., under
      Section 409A of the Code), the Company makes no representation to that effect
      and expressly disavows any covenant to maintain favorable or avoid unfavorable
      tax treatment. The Company shall be unconstrained in its corporate activities
      without regard to the potential negative tax impact on holders of Awards under
      the Employee Plan.

    

    (m)
Compliance
      with Laws. The
      granting of Awards and the issuance of Shares under the Employee Plan shall
      be
      subject to all applicable laws, rules, and regulations, and to such approvals
      by
      any governmental agencies or stock exchanges or automated quotation systems
      on
      which the Company is listed, quoted or traded as may be required. The Company
      shall have no obligation to issue or deliver evidence of title for Shares issued
      under the Employee Plan prior to:

    

    
      	
               
                

            	
              (i)

            	
              obtaining
                any approvals from governmental agencies that the Company determines
                are
                necessary or advisable; and

            

    

    

    
      	
               
                

            	
              (ii)

            	
              completion
                of any registration or other qualification of the Shares under any
                applicable national or foreign law or ruling of any governmental
                body that
                the Company determines to be necessary or advisable or at a time
                when any
                such registration or qualification is not current, has been suspended
                or
                otherwise has ceased to be
                effective.

            

    

    

    The
      inability or impracticability of the Company to obtain or maintain authority
      from any regulatory body having jurisdiction, which authority is deemed by
      the
      Company’s counsel to be necessary to the lawful issuance and sale of any Shares
      hereunder shall 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.

     

    (n)
Code
      Section 83(b)
      Elections.  Neither the Company, any Affiliate, nor the
      Committee shall have any responsibility in connection with a Participant’s
      election, or attempt to elect, under Code section 83(b) to include the value
      of
      a Restricted Stock Award in the Participant’s gross income for the year of
      payment.  Any Participant who makes a Code section 83(b) election with
      respect to any such Award shall promptly notify the Committee of such election
      and provide the Committee with a copy thereof.

    

    Section
      9.    Term of the Employee Plan

    

    The
      Plan
      shall remain in full force and effect through September 15, 2018, unless
      sooner terminated by the Board.  After the Employee Plan is
      terminated, no future Awards may be granted, but Awards previously granted
      shall
      remain outstanding in accordance with their applicable terms and conditions
      and
      the Employee Plan’s terms and conditions.exh10_3.htm

    ePlus
      inc.

    Incentive
      Stock Option Agreement

    

    
      	
            	
            	
            	
            	
            
	
            	
            	
            	
            	
            
	
              Name
                of Option Holder:

            	
            	 	
            	
            

    

    

    
      	
            	
            	
            
	
              Option
                Number:

              
              

            	
            	 
	
              Total
                Number of Shares
                Underlying Option:

              
              

            	
            	 
	
              Option
                Date:

              
              

            	
            	 
	
              Exercise
                Price Per Share:

              
              

            	
            	 

    

    

    INCENTIVE
      STOCK OPTION granted by ePlus inc., a Delaware
      corporation (the “Company”), to the above-named
      option holder (the “Optionee”), an employee of
      the Company or one of its subsidiaries, pursuant to the ePlus inc. 2008 Employee
      Long-Term Incentive Plan (the “Plan”) the terms of which
      are
      incorporated herein by reference and which, in the event of any conflict, shall
      control over the terms contained herein. A copy of the Plan (or related
      Prospectus delivered to you with this Agreement) may be obtained at no cost
      by
      contacting [HR] at ____________.

    

    
      	
              1.  

            	
              Grant
                and Vesting
                Option

            

    

    

    Subject
      to the vesting schedule below, the Company hereby grants to the Optionee an
      option to purchase on the terms herein provided a total of the number of shares
      of common stock, $0.01 par value, of the Company set forth above, at an exercise
      price per share as set forth above.

    

    This
      option may be exercised only with respect to the portion thereof that is vested.
      The right to exercise this option shall become vested according to the following
      vesting schedule:

    

    
      	
            	
            	
            
	
            	
            	
              Percentage
                (%) of Option Shares With Respect to

            
	
              [Anniversary/Other]
                Date

            	
            	
              Which
                Optionee Has a Vested Option to
                Exercise

            

    

    

    

    

    Vested
      options shall be calculated only in terms of full years (for example, from
      one
      anniversary date to the next) and no partial vesting credit shall be given
      for
      partial years of employment.

    

    This
      option shall expire and shall not be exercisable after the expiration of ten
      (10) years from the date it is granted.

    

    2.
      Stock to be
      Delivered

    

    Stock
      to
      be delivered upon the exercise of this option may constitute an original issue
      of authorized stock or may consist of treasury stock.

    

    3.
      Exercise of
      Option

    

    Each
      election to exercise this option shall be made by delivering to the Company
      or
      its agent a properly executed exercise notice, together with irrevocable
      instructions to a broker to deliver promptly to the Company the amount of sale
      or loan proceeds with respect to the portion of shares to be acquired upon
      exercise. Exercise of this option will not be permitted if the Company
      determines, in its sole and absolute discretion, that issuance of shares at
      that
      time could violate any law or regulation.

     

    In
      the
      event an option is exercised by the executor or administrator of a deceased
      Optionee, or by the person or persons to whom the option has been transferred
      by
      the Optionee’s will or the applicable laws of descent and distribution, the
      Company shall be under no obligation to deliver stock thereunder unless and
      until the Company is satisfied that the person or persons exercising the option
      is or are the duly appointed executor(s) or administrator(s) of the deceased
      Optionee or the person to whom the option has been transferred by the Optionee’s
      will or by the applicable laws of descent and distribution.

     

    4.
      Payment for and Delivery of
      Stock

    

    Payment
      in full by cash, certified check, bank draft, wire transfer or postal or express
      money order may be made for all shares for which this option is exercised at
      the
      time of such exercise, and no shares shall be delivered until such payment
      is
      made.

    

    Alternatively,
      payment may be made by (i) delivering to the Company a properly executed
      exercise notice, together with irrevocable instructions to a broker to deliver
      promptly to the Company the amount of sale or loan proceeds with respect to
      the
      portion of the shares to be acquired upon exercise having a Fair Market Value
      on
      the date of exercise equal to the sum of the applicable portion of the exercise
      price being so paid and appropriate tax withholding, (ii) tendering to the
      Company (by physical delivery or by attestation) certificates representing
      shares of outstanding common stock, par value $0.01, of the Company that have
      been held by the Optionee for at least six months prior to exercise, having
      a
      Fair Market Value on the day prior to the date of exercise equal to the
      applicable portion of the exercise price being so paid, together with stock
      powers duly executed and with signature guaranteed; or (iii) any
      combination of the foregoing. Notwithstanding the foregoing, a form of payment
      will not be available if the Company determines, in its sole and absolute
      discretion, that such form of payment could violate any law or
      regulation.

    

    The
      Company shall not be obligated to deliver any stock unless and until
      (i) satisfactory arrangements have been made with the Company for the
      payment of any applicable tax withholding obligations, (ii) all applicable
      federal and state laws and regulations have been complied with, (iii) in
      the event the outstanding common stock is at the time listed upon any stock
      exchange, the shares to be delivered have been listed, or authorized to be
      listed upon official notice of issuance upon the exchanges where it is listed,
      and (iv) all legal matters in connection with the issuance and delivery of
      the shares have been approved by counsel of the Company. The Optionee shall
      have
      no rights of a stockholder until the stock is actually delivered to him or
      her.
      Further, the Optionee acknowledges and consents that, pursuant to the Plan,
      if
      the Compensation Committee determines that any consent is necessary or desirable
      as a condition of, or in connection with the grant of this option, delivery
      of
      shares or other property or the taking of any other action, then such action
      will not be taken unless and until such consent is effected or obtained to
      the
      Compensation Committee’s satisfaction.

    

    5.
      Recovery and Reimbursement of
      Option Gain

    

    The
      Company shall have the right to recover, or receive reimbursement for, any
      compensation or profit realized by the exercise of this option or by the
      disposition of any option shares to the extent that the Company has such a
      right
      of recovery or reimbursement under applicable securities laws.

    

    6.
      Nontransferability of
      Option

    

    This
      option may not be transferred by the Optionee otherwise than by will or the
      laws
      of descent and distribution, and during the Optionee’s lifetime this option may
      be exercised only by the Optionee.

    

    7.
      Termination of
      Employment

    

    Upon
      termination of employment, other than termination of employment by reason of
      (i) Retirement, as defined in the Plan, (ii) Disability, as defined in
      the Plan, or (iii) death, any portion of this option that has not become
      vested as of the date of termination shall immediately terminate and any portion
      of this option that has already vested as of such date shall terminate ninety
      (90) days after termination of employment or the expiration date of the
      option, whichever occurs first.

    

    8.
      Retirement

    

    In
      the
      event of the Optionee’s Retirement, as defined in the Plan, from the employ of
      Company or any subsidiary, any portion of this option that has not become vested
      as of the date of Retirement shall immediately terminate and any portion of
      this
      option that has already vested as of such date shall terminate one (1) year
      after such retirement or on the expiration date of the option, whichever occurs
      first.

    

    9.
      Disability

    

    In
      the
      event of termination of employment of the Optionee because of Disability, as
      defined in the Plan, any unexercised portion of this option held by the Optionee
      at the date of such termination (vested and unvested) will immediately become
      exercisable in full and will remain exercisable by the Optionee for a period
      of
      one (1) year or the remaining term of the option, whichever is
      shorter.

    

    10.
      Death

    

    If
      an
      Optionee dies while employed by the Company, any unexercised portion of this
      option held by the Optionee at his or her date of death (vested and unvested)
      will immediately become exercisable in full and will remain exercisable by
      the
      estate of the deceased Optionee or the person given authority to exercise his
      or
      her options by his  or her will or by operation of law for a period of
      one (1) year or the remaining term of the options, whichever is
      shorter.

    

    11.
      Changes In
      Stock

    

    In
      the
      event of any change in the number of issued shares (or issuance of shares of
      stock other than shares of Common Stock) by reason of any stock split, reverse
      stock split, or stock dividend, recapitalization, reclassification, merger,
      consolidation, split-up, spin-off, reorganization, combination, or exchange
      of
      shares, the issuance of warrants or other rights to purchase shares or other
      securities, or any other change in corporate structure or in the event of any
      extraordinary distribution (whether in the form of cash, shares, other
      securities or other property), the Compensation Committee shall adjust the
      number or kind of shares that may be issued under the Plan, and the terms of
      this option (including, without limitation, the number of shares subject to
      this
      option, the type of property to which this option relates and the exercise
      price
      of this option) in such manner as the Compensation Committee shall determine
      is
      appropriate in order to prevent the dilution or enlargement of the benefits
      or
      potential benefits intended to be made available under the Plan, and such
      adjustment shall be conclusive and binding for all purposes under the Plan.
      Notwithstanding the foregoing, no adjustment shall be required if the
      Compensation Committee determines that such action could cause an award to
      fail
      to satisfy the conditions of an applicable exception from the requirements
      of
      Section 409A of the Code (“Section 409A”) or
      otherwise could subject the Optionee to the additional tax imposed under
      Section 409A in respect of an outstanding award. In the event of (i) a
      consolidation or merger in which the Company is not the surviving corporation,
      (ii) a consolidation or merger in which the Company is the surviving
      corporation but holders of shares receive securities or another corporation,
      or
      (iii) a sale of substantially all of the Company’s assets (as an entirety)
      or capital stock to another person, this option shall be deemed to apply to
      the
      equivalent amount of securities, cash or other property that is received by
      Company stockholders in exchange for their Company shares pursuant to such
      transaction; provided,
      however, that the Compensation Committee may, in its discretion, either
      (i) provide, upon written notice to the Optionee, that this option shall
      terminate as of the date specified in such notice (in which case the
      Compensation Committee may, but does not have to, accelerate the vesting of
      any
      portion of this option that has not already vested as of the date such notice
      is
      provided to the Optionee), or (ii) cancel this option and in consideration
      of such cancellation pay to the Optionee an amount in cash with respect to
      each
      share then remaining under the option equal to the difference between the Fair
      Market Value of such share on the date of cancellation (or, if greater, the
      per
      share value of the consideration received by Company stockholders as a result
      of
      the merger, consolidation, reorganization or sale) and the per share exercise
      price of the option.

    

    12.
      Continuance of
      Employment

    

    This
      option shall not be deemed to obligate the Company or any subsidiary to retain
      the Optionee in its employ for any period.

     

    13.
      Provisions of the Plan and
      Section 422 of the Internal Revenue Code

    

    This
      Agreement incorporates by reference Section 422 of the Internal Revenue
      Code of 1986, as amended, and the terms of the Plan [(including without
      limitation, Section 6(g)(xii) of the Plan, which provides for the
      forfeiture of this option and the return of any profit realized upon the
      exercise of such option in certain circumstances)], and is subject to the
      provisions thereof. The Plan and the options granted pursuant to this Agreement
      are intended to comply with Section 422 of the Internal Revenue Code of
      1986, as amended, and all of the regulations issued pursuant thereto. This
      Agreement shall be construed in accordance with the Plan, said Section 422
      and the regulations issued there under and any provision of this Agreement
      held
      to be inconsistent therewith shall be severable and of no force or
      effect.

    

    [14.
      Incorporation by Reference of
      Employment Agreement

    

    If
      the
      Optionee has an employment agreement with ePlus inc. which contains
      different or additional provisions relating to vesting of the stock option
      grant, or otherwise conflicts with the terms of this Agreement, the provisions
      of the employment agreement shall govern and be incorporated herein by
      reference.]

    

    IN
      WITNESS WHEREOF, ePlus
      inc. has caused this Agreement to be executed by the [officer title]. This
      option is granted at the Company’s principal executive office, 13595 Dulles
      Technology Drive, Herndon, Virginia 20171, on the date stated
      above.

    

    ePlus
      inc.                                                                                                
Option Holder

    

    

    By:
      _________________________________                              _____________________________

          Name:                                                                                                
      Name:

          Title:

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