Document:

Exhibit 4.21.3

    Inter
Parfums, Inc.

    2004
Nonemployee Director

    Stock
Option Plan

    

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    1.  Purpose of the
Plan.  The purpose of this 2004 Nonemployee Director Stock
Option Plan (the “Plan”) of Inter Parfums, Inc., a Delaware corporation (the
“Corporation”), is to make available shares of the Common Stock, par value $.001
per share, of the Corporation (the “Common Stock”) for purchase by directors of
the Corporation who are not employees of the Corporation, or any parent or
subsidiary thereof (“Nonemployee Directors”). Thus, the Plan permits the Corporation
to attract and retain the services of experienced and knowledgeable Nonemployee
Directors for the benefit of the Corporation and its shareholders and to provide
additional incentive for such Nonemployee Directors to continue to work for the
best interests of the Corporation and its shareholders through continuing
ownership of its Common Stock.

    

    2.  Stock Subject to the
Plan.  Subject to the provisions of Section 10, the total
number of shares of Common Stock which may be subject to options under the Plan
shall not exceed 50,000, whether authorized but unissued shares, or shares which
shall have been purchased or acquired by the Corporation for this or any other
purpose. Such shares are from time to time to be allotted for option and sale to
Nonemployee Directors in accordance with the Plan. In the event any option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the shares not so purchased thereby shall again be available for the
purposes of the Plan.

    

    3.  Administration of the
Plan.  The Plan shall be self-executing. However, to the extent
permitted herein, the Plan shall be administered by either the Board of
Directors of the Corporation (the "Board") or a committee of two (2) or more
Nonemployee Directors (the "Committee") of the Board appointed by the Board. The
Board or the Committee shall, subject to the express provisions of the Plan,
have the power to interpret the Plan; correct any defect, supply any omission or
reconcile any inconsistency in the Plan; prescribe, amend and rescind rules and
regulations relating to the Plan; and make all other determinations necessary or
advisable for the administration of the Plan. The determination of the Board or
the Committee on the matters referred to in this Section 3 shall be
conclusive.

    

    4.  Eligibility;
Grants.

    

    (a)
Nonemployee Directors shall not include directors who are also employees of the
Corporation or any parent or subsidiary thereof, but shall include directors of
the Corporation who are providing services such as business, financial, legal or
investment banking services, to, for, or on behalf of the Corporation or any
parent or subsidiary thereof, in return for remuneration, directly or indirectly
through one or more entities. All grants under this Plan shall be in lieu of any
other option grants that a Nonemployee Director may have been entitled to under
any other plan of the Company.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Each
individual who becomes a Nonemployee Director, shall on the date of his initial
election or appointment to the Board be granted an option to purchase 2,000
shares of Common Stock.

    

    (c) Each
Nonemployee Director shall be granted an option to purchase 1,000 shares of
Common Stock commencing on the next February 1st, and each succeeding February
1st throughout the term of this Plan for so long as he is a Nonemployee
Director. Notwithstanding the foregoing, no option shall be granted on such
February 1st grant date to any Nonemployee Director who first becomes a
Nonemployee Director within six (6) months prior to such February 1st grant
date. Commencing
with the grant to non-employee directors on February 1, 2006 and continuing each
year thereafter, if a Nonemployee Director did not attend one of the
two in-person board meetings that are usually held the prior June and December,
then the option to be granted on the following February 1, under this Plan would
be reduced by 50%; and if such Nonemployee Director did not attend both of
such meetings, then such Nonemployee Director would not receive any
option grant on the following February 1.

    

    (d)  If
a sufficient number of shares of Common Stock reserved for issuance upon proper
exercise of options to be granted to Nonemployee Directors on the February 1st
grant date does not exist, then the aggregate remaining number of shares shall
be prorated equally among options to be granted to all Nonemployee Directors at
such February 1st grant date, and options shall be granted to purchase such
reduced number of shares. Notwithstanding the foregoing, if a sufficient number
of shares of Common Stock reserved for issuance upon proper exercise of options
to be granted to Nonemployee Directors on the February 1st grant date does not
exist, then options shall  be granted under any pre-existing
Nonemployee Director plan in order to satisfy such deficiency, if, and to the
extent available.

    

    (e) It is
the express intent that options to be granted under this Plan shall be in lieu
of further option grants under any of the Company’ existing Nonemployee Director
plans, such as the 1997 Nonemployee Director Stock Option Plan, and the 2000
Nonemployee Director Stock Option Plan, except to the extent to satisfy any
deficiency as set forth in Section 4(d) above.

    

    (f) On or
after June 19, 2006, all options that may be granted from time to time under the
Plan shall vest and become exercisable to purchase shares of Common Stock as
follows: 25% one year after the date of grant, and then 25% on each of the
second, third and fourth consecutive years from the date of grant on a
cumulative basis, so that each option shall become fully vested and exercisable
on the fourth year from the date of grant.

     

    5.  Option
Price; Fair Market Value.

    

    (a) The
price at which shares of the Common Stock may be purchased pursuant to options
granted under the Plan shall be equal to one hundred percent (100%) of the fair
market value of the Common Stock on the date an option is granted.

    

    
      
         

      

      
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    (b) The
fair market value of the Common stock on any day shall be (a) if the principal
market for the Common Stock is a national securities exchange, the average
between the high and low sales prices of the Common Stock on such day as
reported by such exchange or on a consolidated tape reflecting transactions on
such exchange; (b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is quoted on The Nasdaq Stock
Market ("NASDAQ") or The Over The Counter Bulletin Board (the "Bulletin Board"),
and (i) if actual sales price information is available with respect to the
Common Stock, then the average between the high and low sales prices of the
Common Stock on such day on NASDAQ or the Bulletin Board, or (ii) if such
information is not available, then the average between the highest bid and
lowest asked prices for the Common Stock on such day on NASDAQ or the Bulletin
Board; or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on NASDAQ or the Bulletin
Board, then the average between the highest bid and lowest asked prices for the
Common Stock on such day as reported by National Quotation Bureau, Incorporated
or a comparable service; provided, that if clauses (a), (b) and (c) of this
paragraph are all inapplicable, or if no trades have been made or no quotes are
available for such day, then the fair market value of the Common Stock shall be
determined by the Committee by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options. The determination
of the Board or the Committee shall be conclusive in determining the fair market
value of the stock.

    

    6.  Term of Each
Option.  The term of each option shall be five (5) years or
such shorter period as is prescribed in Section 9 hereof.

    

    7.  Exercise
of Options.

    

    (a)
Subject to the provisions of Sections 9 and 14, options granted hereunder shall
be exercisable immediately; provided, that options shall
not be exercisable at any time in an amount less than 100 shares (or the
remaining shares then covered by and purchasable under the option  if
less than 100 shares), or for a fraction of a share.

    

    (b) The
purchase price of the shares as to which an option shall be exercised shall be
paid in full at the time of exercise in cash, by certified check or wire
transfer of funds through the Federal Reserve System.

    

    8.  Non-Transferability of
Options.  No option granted under the Plan shall be
transferable otherwise than by will or by the laws of descent and distribution,
or pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code, Title I of the Employee Retirement Income Security Act and the
rules thereunder, and an option may be exercised, during the lifetime of the
holder thereof, only by him.

    

    9.  Termination
of Services on the Board of Directors.

    

    (a)  If
a Nonemployee Director to whom an option has been granted under the Plan shall
cease to serve on the Board, otherwise than by reason of death or disability (as
that term is defined in paragraph (d) of this Section 9), then such option may
be exercised (to the extent that the Nonemployee Director was entitled to do so
at the time of cessation of service) at any time within three (3) months after
such cessation of service but not thereafter, and in no event after the date on
which, except for such cessation of service, the option would otherwise
expire.

    

    
      
         

      

      
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    (b)  If
a Nonemployee Director to whom an option has been granted under the Plan shall
cease to serve on the Board by reason of disability, then the remaining
unexercised portion of the option may be exercised in whole or in part by the
Nonemployee Director (notwithstanding that the option had not yet become
exercisable with respect to all or part of such shares at the date of
disability) at any time within one (1) year after such disability but not
thereafter, and in no event after the date on which, except for such disability,
the option would otherwise expire.

    

    (c)  If
a Nonemployee Director to whom an option has been granted under the Plan shall
die (i) while he is serving on the Board, or (ii) within three (3) months after
cessation of service on the Board, then such option may be exercised by the
legatee or legatees of such option under the Nonemployee Director's last will,
or by his personal representatives or distributee, at any time within one (1)
year after his death, but in no event after the date on which, except for such
death, the option would otherwise expire.

    

    (d)  For
the purpose of this Section 9, "disability" shall mean permanent mental or
physical disability as determined by the Committee.

    

    10.  Adjustment
of and Changes in Common Stock.

     

    (a) If
the outstanding shares of the Common Stock are increased, decreased, changed
into, or exchanged for a different number or kind of shares or securities of the
Corporation through reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or the like, an appropriate and
proportionate adjustment shall be made in the  (i) aggregate number
and kind of securities available under the Plan, and (ii) number and kind of
securities issuable upon the exercise of all outstanding options granted under
the Plan, without change in the total price applicable to the unexercised
portion of such options, but with a corresponding adjustment in the price for
each unit of any security covered by such options.

    

    (b) Upon
the dissolution or liquidation of the Corporation, or upon a reorganization,
merger or consolidation of the Corporation with one or more corporations as a
result of which the Corporation is not the surviving corporation, or upon the
sale of substantially all of the assets of the Corporation, the
Committee  shall provide in writing in connection with such
transaction for one or more of the following alternatives, separately or in
combination: (i) the assumption by the successor entity of the options
theretofore granted or the substitution by such entity for such options of new
options covering the stock of the successor entity, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices; or (ii) the continuance of such option agreements by such successor
entity in which such options shall remain in full force and effect under the
terms so provided.

    

    (c) Any
adjustments under this Section 10 shall be made by the Committee, whose good
faith determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive.

    

    
      
         

      

      
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    11.  Compliance with
Securities Laws.  As a condition to the exercise of any option,
either (a) a Registration Statement under the Securities Act of 1933, as
amended, or any succeeding act (collectively, the "Act"), with respect to its
underlying shares shall be effective at the time of exercise of the option or
(b) in the opinion of counsel to the Corporation, there shall be an exemption
from registration under the Act for the issuance of shares of Common Stock upon
such exercise. Nothing herein shall be construed as requiring the Corporation to
register shares subject to the Plan or any option under the Act.  Each
opinion shall be subject to the further requirement that if, in the opinion of
counsel to the Corporation, the listing or qualification of the shares of Common
Stocks subject to such option on any securities exchange, National Securities
Association or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the exercise of such option or the issue of shares thereunder,
such option may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions requiring the Corporation to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction wherein
it has not already done so and free of any other conditions not customarily
imposed by a securities exchange, law or governmental regulatory body in
connection with such listing, qualification, consent or approval.

    

    12.  Amendment and
Termination.  The Committee may amend, suspend or terminate the
Plan or any portion thereof at any time but may not, without the approval of the
Corporation's shareholders within twelve (12) months before or after the date of
adoption of any such amendment or amendments, make any alteration or amendment
thereof which (a) makes any change in the class of eligible participants as
determined in accordance with Section 4 hereof; (b) increases the total number
of shares of Common Stock for which options may be granted under the Plan except
as provided in Section 10 hereof; (c) extends the term of the Plan or the
maximum option period provided under the Plan; (d) decreases the option price
provided in Section 5 hereof; or (e) materially increases the benefits accruing
to participants under the Plan. Notwithstanding anything to the contrary
contained herein, the Plan shall not be amended more than once every six (6)
months, other than to comport with changes in the Internal Revenue Code,
Employee Retirement Income Security Act or the rules thereunder.

    

    13.  Duties of the
Corporation.  The Corporation shall, at all times during the
term of each option, reserve and keep available for issuance or delivery such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of all options at the time outstanding, shall pay all original
issue taxes with respect to the issuance or delivery of shares pursuant to the
exercise of such options and all other fees and expenses necessarily incurred by
the Corporation in connection therewith.

    

    14.  Term;
Effective Period.

    

    (a) The
Plan shall become effective on 26 March 2004, the date of its adoption by the
Board of Directors, subject to the receipt of the affirmative vote of the
majority of the shares of Common Stock present in person or by proxy at the next
annual meeting and entitled to vote, or the written consent of the holders of a
majority of shares that would have been entitled to vote thereon, and no options
granted hereunder may be exercised prior to such approval, provided that, the date of
grant of any options granted hereunder shall be determined as if the Plan had
not been subject to such approval.

    

    
      
         

      

      
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    (b) No
options may be granted under the Plan after 25 March 2014. Options outstanding
on or prior to such date shall, however, in all respects continue subject to the
Plan.

     

    
      
         

      

      
        62004 STOCK
OPTION PLAN
OF
INTER PARFUMS, INC.

     

           
1. Purposes of The Plan. This stock option plan (the "Plan") is designed
to provide an incentive to key employees, officers, directors and consultants of
Inter Parfums, Inc., a Delaware corporation (the "Company"), and its present and
future subsidiary corporations, as defined in Paragraph 17 ("Subsidiaries"), and
to offer an additional inducement in obtaining the services of such individuals.
The Plan provides for the grant of "incentive stock options," within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
nonqualified stock options and stock appreciation rights ("SARs").

     

           
2. Shares Subject To The Plan. The aggregate number of shares of Common
Stock, $.001 par value per share, of the Company ("Common Stock") for which
options or SARs may be granted under the Plan shall not exceed 1,000,000. Such
shares may, in the discretion of the Board of Directors, consist either in whole
or in part of authorized but unissued shares of Common Stock or shares of Common
Stock held in the treasury of the Company. The Company shall at all times during
the term of the Plan reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the Plan. Subject to
the provisions of Paragraph 14, any shares subject to an option or SAR which for
any reason expire, are canceled or are terminated unexercised (other than those
which expire, are canceled or terminated pursuant to the exercise of a tandem
SAR or option) shall again become available for the granting of options or SARs
under the Plan. The number of shares of Common Stock underlying that portion of
an option or SAR which is exercised (regardless of the number of shares actually
issued) shall not again become available for grant under the Plan.

     

           
3. Administration Of The Plan. 

     

            (a) The Plan shall be
administered by the Board of Directors, or if appointed, by a committee
consisting of not less than two (2) members of the Board of Directors, each of
whom shall be a "non-employee director" within the meaning of Rule 16b-3
promulgated by the Securities and Exchange Commission. (The group administering
the plan is referred to as the "Committee"). The failure of any of the Committee
members to qualify as a non-employee director shall not otherwise affect the
validity of the grant of any option or SAR, or the issuance of shares of Common
Stock otherwise validly issued upon exercise of any such option. A majority of
the members of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, and
any acts approved in writing by all members without a meeting, shall be the acts
of the Committee.

     

            (b) Subject to the express
provisions of the Plan, the Committee shall have the authority, in its sole
discretion, to determine the individuals who shall receive options and SARS; the
times when they shall receive them; whether an option shall be an incentive or a
nonqualified stock option; whether an SAR shall be granted separately, in tandem
with or in addition to an option; the number of shares to be subject to each
option and SAR; the term of each option and SAR; the date each option and SAR
shall become exercisable; whether an option or SAR shall be exercisable in
whole, in part or in installments, and if in installments, the number of shares
to be subject to each installment; whether the installments shall be cumulative,
the date each installment shall become exercisable and the term of each
installment; whether to accelerate the date of exercise of any installment;
whether shares may be issued on exercise of an option as partly paid, and, if
so, the dates when future installments of the exercise price shall become due
and the amounts of such installments; the exercise price of each option and the
base price of each SAR; the form of payment of the exercise price; the form of
payment by the Company upon the optionee's exercise of an SAR; whether to
require that the optionee remain in the employ of the Company or its
Subsidiaries for a period of time from and after the date the option or SAR is
granted to him; the amount necessary to satisfy the Company's obligation to
withhold taxes; whether to restrict the sale or other disposition of the shares
of Common Stock acquired upon the exercise of an option or SAR and to waive any
such restriction; to subject the exercise of all or any portion of an option or
SAR to the fulfillment of contingencies as specified in the Contract (as
described in Paragraph 12), including without limitations, contingencies
relating to financial objectives (such as earnings per share, cash flow return,
return on investment or growth in sales) for a specified period for the Company,
a division, a product line or other category, and/or the period of continued
employment of the optionee with the Company or its Subsidiaries, and to
determine whether such contingencies have been met; to construe the respective
Contracts and the Plan; with the consent of the optionee, to cancel or modify an
option or SAR, provided such option or SAR as modified would be permitted to be
granted on such date under the terms of the Plan; and to make all other
determinations necessary or advisable for administering the Plan. The
determinations of the Committee on the matters referred to in this Paragraph 3
shall be conclusive.

     

            (c) Subject to the express
provisions of the Plan and solely with respect to employees of the Company who
are not executive officers or directors of the Company, the Committee hereby
delegates to the Chief Executive Officer, and to act in place and on behalf of
the Committee, the authority to grant nonqualified options and SARs to such
employees; to determine the term of such nonqualified options and SARs; to
determine whether an option or SAR shall be exercisable in whole, in part or in
installments; to determine whether to require that the optionee remain in the
employ of the Company or its Subsidiaries for a period of time from and after
the date the option or SAR is granted to him; and to subject the exercise of all
or any portion of an option or SAR to the fulfillment of contingencies as
specified in the Contract (as described in Paragraph 12). Any such action by the
Chief Executive Officer shall be promptly reduced to writing and provided to the
Committee.

     

           
4. Eligibility.

     

            (a) The Committee may,
consistent with the purposes of the Plan, grant incentive stock options to key
employees (including officers and directors who are employees) and nonqualified
stock options and/or SARs to key employees, officers, directors and consultants
of the Company or any of its Subsidiaries from time to time, within ten (10)
years from the date of adoption of the Plan by the Board of Directors, covering
such number of shares of Common Stock as the Committee may determine; provided,
however, that the aggregate market value (determined at the time the stock
option is granted) of the shares for which any eligible person may be granted
incentive stock options under the Plan or any plan of the Company, or of a
Parent or a Subsidiary of the Company which are exercisable for the first time
by such optionee during any calendar year shall not exceed $100,000. Any option
(or portion thereof) granted in excess of such amount shall be treated as a
nonqualified stock option.

     

            (b) Notwithstanding any other
provision of the Plan, if the Committee determines that at the time a person is
granted an option or SAR, such person is then, or is likely to become, a Covered
Person (as hereinafter defined), then the Committee may provide that this
Section 4(b) is applicable to such grant.

     

    
      
        (i) Notwithstanding any provision of this Plan, no person eligible to
    receive a grant of an option or SAR under this Plan shall be granted options
    to purchase or an SAR in excess of 100,000 shares of common stock in any one
    fiscal year. Such 100,000 maximum number shall be appropriately adjusted for
    stock splits, stock dividends and the like. 

         

        (ii) Notwithstanding any provision of this Plan, the exercise price for
    all options and the base price for all SARs to be granted under the Plan,
    shall not be less than the fair market value of the Common Stock at the time
    of grant.

         

        (iii) The term "Covered Person" shall mean a "covered employee" within
    the meaning of Code Section 162(m)(3) or any successor provision
    thereto.

         

      

    

           
5. Exercise Price And Base Price. 

     

            (a) The exercise price of the
shares of Common Stock under each option and the base price for each SAR shall
be determined by the Committee; provided, however, in the case of an incentive
stock option, the exercise price shall not be less than 100% of the fair market
value of the Common Stock on the date of grant, and further provided, that if,
at the time an incentive stock option is granted, the optionee owns (or is
deemed to own) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the exercise price shall not be less than 110% of
the fair market value of the Common Stock subject to the option at the time of
the granting of such option.

     

            (b) The fair market value of the
Common stock on any day shall be (a) if the principal market for the Common
stock is a national securities exchange, the average between the high and low
sales prices of the Common stock on such day as reported by such exchange or on
a consolidated tape reflecting transactions on such exchange; (b) if the
principal market for the Common Stock is not a national securities exchange and
the Common Stock is quoted on The Nasdaq Stock Market ("NASDAQ"), and (i) if
actual sales price information is available with respect to the Common Stock,
then the average between the high and low sales prices of the Common Stock on
such day on NASDAQ, or (ii) if such information is not available, then the
average between the highest bid and lowest asked prices for the Common Stock on
such day on NASDAQ; or (c) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is not quoted on NASDAQ, then
the average between the highest bid and lowest asked prices for the Common Stock
on such day as reported by The Nasdaq Bulletin Board, or a comparable service;
provided that if clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are available for such
day, then the fair market value of the Common Stock shall be determined by the
Committee by any method consistent with applicable regulations adopted by the
Treasury Department relating to stock options. The determination of the
Committee shall be conclusive in determining the fair market value of the
stock.

     

           
6. Term. The term of each option and SAR granted pursuant to the Plan
shall be such term as is established by the Committee, in its sole discretion,
at or before the term of each incentive stock option granted pursuant to the
Plan shall be for a period not exceeding ten (10) years from the date of
granting thereof, and further, provided, that if, at the time an incentive stock
option is granted, the optionee owns (or is deemed to own) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the term of the
incentive stock option shall be for a period not exceeding five (5) years.
Options shall be subject to earlier termination as hereinafter provided.

     

           
7. Exercise. 

     

            (a) An option or SAR (or any
part or installment thereof) shall be exercised by giving written notice to the
Company at its principal office (at present 551 Fifth Avenue, New York, NY
10176) stating whether an incentive or nonqualified stock option or SAR is being
exercised, specifying the number of shares as to which such option or SAR is
being exercised, and in the case of an option, accompanied by payment in full of
the aggregate exercise price therefor (or the amount due on exercise if the
Contract permits installment payments) in the discretion of the Committee (a) in
cash or by certified check, (b) with previously acquired shares of Common Stock
having an aggregate fair market value, on the date of exercise, equal to the
aggregate exercise price of all options being exercised, or (c) any combination
thereof. In addition, upon the exercise of a nonqualified stock option or SAR,
the Company may withhold cash and/or shares of Common Stock to be issued with
respect thereto having an aggregate fair market value equal to the amount which
it determined is necessary to satisfy its obligation to withhold Federal, state
and local income taxes or other taxes incurred by reason of such exercise.
Alternatively, the Company may require the holder to pay to the Company such
amount, in cash, promptly upon demand. The Company shall not be required to
issue any shares pursuant to any such option or SAR until all required payments
have been made. Fair market value of the shares shall be determined in
accordance with Paragraph 5.

     

            (b) A person entitled to receive
Common Stock upon the exercise of an option or SAR shall not have the rights of
a shareholder with respect to such shares until the date of issuance of a stock
certificate to him for such shares; provided, however, that until such stock
certificate is issued, any option holder using previously acquired shares in
payment of an option exercise price shall have the rights of a shareholder with
respect to such previously acquired shares.

     

            (c) In no case may a fraction of
a share be purchased or issued under the Plan. Any option granted in tandem with
an SAR shall no longer be exercisable to the extent the SAR is exercised, and
the exercise of the related option shall cancel the SAR to the extent of such
exercise.

     

           
8. Stock Appreciation Rights. 

     

            (a) An SAR may be granted
separately, in tandem with or in addition to any option, and may be granted
before, simultaneously with or after the grant of an option hereunder. In
addition, the holder of an option may, in lieu of making the payment required at
the time of exercise under Paragraph 7, include in the written notice referred
to therein an "election" to exercise the option as an SAR. In such case, the
Committee shall have fifteen (15) days from the receipt of notice of the
election to decide, in its sole discretion, whether or not to accept the
election and notify the option holder of its decision. If the Committee
consents, such exercise shall be treated as the exercise of an SAR with a base
price equal to the exercise price.

     

            (b) Upon the exercise of an SAR,
the holder shall be entitled to receive an amount equal to the excess of the
fair market value of a share of Common Stock on the date of exercise over the
base price of the SAR. Such amount shall be paid, in the discretion of the
Committee, in cash, Common Stock having a fair market value on the date of
payment equal to such amount, or a combination thereof. For purposes of this
Paragraph 8, fair market value shall be determined in accordance with Paragraph
5.

     

           
9. Termination Of Association With The Company. 

     

            (a) Any holder of an incentive
option whose association with the Company (and its Subsidiaries) has terminated
for any reason other than his death or permanent and total disability (as
defined in Section 22(e)(3) of the Code) may exercise such option, to the extent
exercisable on the date of such termination, at any time within three (3) months
after the date of termination, but in no event after the expiration of the term
of the option; provided, however, that if his association shall be terminated
either (i) for cause, or (ii) without the consent of the Company, said option
shall terminate immediately. 

     

            (b) Any and all nonqualified
stock options or SARs granted under the Plan shall terminate simultaneously with
the termination of association of the holder of such nonqualified option or SAR
with the Company (and its Subsidiaries) for any reason other than the death or
permanent and total disability (as defined in Section 22(e)(3) of the Code) of
such holder.

     

            (c) Options and SARs granted
under the Plan shall not be affected by any change in the status of an optionee
so long as he continues to be associated with the Company or any of the
Subsidiaries.

     

            (d) Nothing in the Plan or in
any option or SAR granted under the Plan shall confer on any individual any
right to continue to be associated with the Company or any of its Subsidiaries,
or interfere in any way with the right of the Company or any of its Subsidiaries
to terminate the holder's association at any time for any reason whatsoever
without liability to the Company or any of its subsidiaries.

     

           
10. Death Or Disability Of An Optionee. 

     

            (a) If an optionee dies while he
is associated with the Company or any of its Subsidiaries, or within three (3)
months after such termination for the holder of an incentive option (unless such
termination was for cause or without the consent of the Company), the option or
SAR may be exercised, to the extent exercisable on the death, by his executor,
administrator or other person at the time entitled by law to his rights under
the option or SAR, at any time within one (1) year after death, but in no event
after the expiration of the term of the option or SAR.

     

            (b) Any holder whose association
with the Company or its Subsidiaries has terminated by reason of a permanent and
total disability (as defined in Section 22(e) (3) of the Code) may exercise his
option or SAR, to the extent exercisable upon the effective date of such
termination, at any time within one (1) year after such date, but in no event
after the expiration of the term of the option or SAR.

     

           
11. Compliance With Securities Laws. The Committee may require, in its
discretion, as a condition to the exercise of an option or SAR that either (a) a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to such shares shall be effective at the time of
exercise or (b) there is an exemption from registration under the Securities Act
for the issuance of shares of Common Stock upon such exercise. Nothing herein
shall be construed as requiring the Company to register shares subject to any
option or SAR under the Securities Act. In addition, if at any time the
Committee shall determine in its discretion that the listing or qualification of
the shares subject to such option or SAR on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of an option or SAR, or the issue of shares thereunder, such option or SAR may
not be exercised in whole or in part unless such listing, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.

     

           
12. Stock Option And SAR Contracts. Each option and SAR shall be
evidenced by an appropriate Contract which shall be duly executed by the Company
and the optionee, and shall contain such terms and conditions not inconsistent
herewith as may be determined by the Committee, and which shall provide, among
other things, (a) that the optionee agrees that he will remain in the employ of
the Company or its Subsidiaries, at the election of the Company, for the later
of (i) the period of time determined by the Committee at or before the time of
grant or (ii) the date to which he is then contractually obligated to remain
associated with the Company or its Subsidiaries, (b) that in the event of the
exercise of an option or an SAR which is paid with Common stock, unless the
shares of Common Stock received upon such exercise shall have been registered
under an effective registration statement under the Securities Act, such shares
will be acquired for investment and not with a view to distribution thereof, and
that such shares may not be sold except in compliance with the applicable
provisions of the Securities Act, and (c) that in the event of any disposition
of the shares of Common Stock acquired upon the exercise of an incentive stock
option within two (2) years from the date of grant of the option or one (1) year
from the date of transfer of such shares to him, the optionee will notify the
Company thereof in writing within 30 days after such disposition, pay the
Company, on demand, in cash an amount necessary to satisfy its obligation, if
any, to withhold any Federal, state and local income taxes or other taxes by
reason of such disqualifying disposition and provide the Company, on demand,
with such information as the Company shall reasonably request to determine such
obligation.

     

           
13. Adjustment of and Changes in Common Stock. 

     

            (a) If the outstanding shares of
the Common Stock are increased, decreased, changed into, or exchanged for a
different number or kind of shares or securities of the Corporation through
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or the like, an appropriate and proportionate adjustment
shall be made in the (i) aggregate number and kind of securities available under
the Plan, and (ii) number and kind of securities issuable upon the exercise of
all outstanding options and SARs granted under the Plan, without change in the
total price applicable to the unexercised portion of such options or SARs, but
with a corresponding adjustment in the exercise price or base price for each
unit of any security covered by such options or SARs.

     

            (b) Upon the dissolution or
liquidation of the Corporation, or upon a reorganization, merger or
consolidation of the Corporation with one or more corporations as a result of
which the Corporation is not the surviving corporation, or upon the sale of
substantially all of the assets of the Corporation, the Committee shall provide
in writing in connection with such transaction for one or more of the following
alternatives, separately or in combination: (i) the assumption by the successor
entity of the options theretofore granted or the substitution by such entity for
such options of new options or SARs covering the stock of the successor entity,
or a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices; or (ii) the continuance of such option agreements
by such successor entity in which such options shall remain in full force and
effect under the terms so provided.

     

            (c) Any adjustments under this
Section 10 shall be made by the Committee, whose good faith determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive.

     

           
14. Amendments And Termination Of The Plan. The Plan was adopted by the
Board of Directors on March 26, 2004. No options may be granted under the Plan
after March 25, 2014. The Board of Directors, without further approval of the
Company's stockholders, may at any time suspend or terminate the Plan, in whole
or in part, or amend it from time to time in such respects as it may deem
advisable, including, without limitation, in order that incentive stock options
granted hereunder meet the requirements for "incentive stock options" under the
Code, or any comparable provisions thereafter enacted and conform to any change
in applicable law or to regulations or rulings of administrative agencies;
provided, however, that no amendment shall be effective without the prior or
subsequent approval of a majority of the Company's outstanding stock entitled to
vote thereon which would (a) except as contemplated in Paragraph 13, increase
the maximum number of shares for which options may be granted under the Plan,
(b) materially increase the benefits to participants under the plan or (c)
change the eligibility requirements for individuals entitled to receive options
hereunder. No termination, suspension or amendment of the Plan shall, without
the consent of the holder of an existing option affected thereby, adversely
affect his rights under such option.

     

           
15. Nontransferability Of Options. No option or SAR granted under the
Plan shall be transferable otherwise than by will or the laws of descent and
distribution, or qualified domestic relations order as defined in the Code or
Title I of the Employee Retirement Income Security Act, and options and SARs may
be exercised, during the lifetime of the holder thereof, only by him or his
legal representatives. Except to the extent provided above, options and SARs may
not be assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and shall not subject to execution,
attachment or similar process.

     

           
16. Substitutions And Assumptions Of Options Of Certain Constituent
Corporations. Anything in this Plan to the contrary notwithstanding, the
Board of directors may, without further approval by the stockholders, substitute
new options for prior options and new SARs for prior SARs of a Constituent
Corporation (as defined in Paragraph 17) or assume the prior options or SARs of
such Constituent Corporation.

     

           
17. Definitions.

     

            (a) The term "Subsidiary" shall
have the same definition as "subsidiary corporation" in Section 425(f) of the
Code.

     

            (b) The term "Parent" shall have
the same definition as "parent corporation" in Section 425(e) of the Code.

     

            (c) The term "Constituent
Corporation" shall mean any corporation which engages with the Company, its
Parent or Subsidiary, in a transaction to which section 425(a) of the Code
applies (or would apply if the option or SAR assumed or substituted were an
incentive stock option), or any Parent or any Subsidiary of such
corporation.

     

           
18. Conditions Precedent. The Plan shall be subject to approval by the
holders of a majority of shares of the Company's capital stock outstanding and
entitled to vote thereon at the next meeting of its stockholders, or the written
consent of the holders of a majority of shares that would have been entitled to
vote thereon, and no options or SARs granted hereunder may be exercised prior to
such approval, provided that the date of grant of any options granted hereunder
shall be determined as if the Plan had not been subject to such approval.

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