Document:

EXHIBIT 10.2

THE SECURITY  REPRESENTED BY THIS  CERTIFICATE  HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION  MAY BE EFFECTED  WITHOUT AN EFFECTIVE  REGISTRATION
STATEMENT  RELATED THERETO OR AN OPINION OF COUNSEL  SATISFACTORY TO THE COMPANY
THAT SUCH  REGISTRATION  IS NOT REQUIRED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED.

                             STOCK OPTION AGREEMENT

         THIS STOCK OPTION  AGREEMENT  ("Agreement") is made effective as of the
date of grant set forth below  ("Date of Grant") by and between  XSUNX,  INC., a
Colorado corporation  ("Company"),  and the optionee named below ("Optionee") as
contemplated in the Company's 2007 Option Plan ("Plan").  Capitalized  terms not
defined herein shall have the meaning ascribed to them in the Plan.

Optionee:         Michael A. Russak

Social Security Number:

Address:

Total Option Shares:       100,000

Exercise Price Per Share: $0.41

Date of Grant: August 28, 2007

First Vesting Date:        November 29, 2007

Expiration Date for Exercise of Options:    August 28, 2012

Stock Option Number: 07-021

Type of Stock Option:
(Check one)       [  ] Incentive Stock Option        [  ] Statutory Stock Option

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1.  Conditional  Grant of Option.  The Company  hereby  conditionally  grants to
Optionee an option  ("Option")  to purchase the total number of shares of Common
Stock of the Company set forth above  ("Shares") at the Exercise Price Per Share
set forth above ("Exercise  Price"),  subject to all of the terms and conditions
of this  Agreement  and the Plan.  If  designated  as an Incentive  Stock Option
above,  the Option is intended to qualify as an "incentive stock option" ("ISO")
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended  ("Code").  Subject to the Plan,  only  Employees  of the Company  shall
receive ISOs. This Agreement shall be deemed a Stock Option Agreement as defined
in the Plan.  The terms and  conditions of the Plan are  incorporated  herein by
this reference.  All specific terms and references,  including capitalized terms
and references,  which are undefined in this Agreement shall have the definition
and meaning ascribed to them in the Plan,  including,  without  limitation,  the
definition of the terms Employee and Consultant.

2. Exercise  Price.  The Exercise  Price, is not less than the fair market value
per share of Common  Stock on the date of grant,  as  determined  by the  Board;
provided,  however,  in  the  event  Optionee  is an  Employee  and  owns  stock
representing  more than ten percent (10%) of the total combined  voting power of
all classes of stock of the Company or of its Parent or Subsidiary  corporations
immediately  before the Option is granted,  said exercise price is not less than
one  hundred ten  percent  (110%) of the fair  market  value per share of Common
Stock on the date of grant as determined by the Board.

3. Exercise of Option.  Subject to the vesting schedule contained herein and the
other  conditions set forth in this Agreement,  all or part of the Option may be
exercised  prior to its  expiration  from the first vesting date set forth above
("First  Vesting Date") up to and including 5:00 p.m.  Pacific  Standard Time on
the expiration date set forth above ("Expiration Date") at the time or times set
forth herein in accordance with the provisions of the Plan as follows:

         (i)      Vesting:

                 (a)  The  Option  shall  become  exercisable  in the  amount of
                      12,500 shares upon the First Vesting Date. Thereafter, the
                      Option shall vest become exercisable at the rate of 12,500
                      Shares per calendar  quarter,  or any  apportioned  amount
                      thereof,  during the term of engagement by XsunX,  Inc. of
                      the Optionee.

                 (b)  This  Option  may  not  be  exercised  for a fraction of a
                      Share.

                 (c)  In the  event of  Optionee's  death,  disability  or other
                      termination  of  employment,  the  exercisability  of  the
                      Option is governed  by Sections 7, 8 and 9 below,  subject
                      to the limitations contained in subsection 3(i) (d) below.

                 (d)  In no event may the Option be exercised  after the date of
                      expiration  of the  term of the  Option  as set  forth  in
                      Section 11 below.

         (ii)(ii)     Method of  Exercise.  The Option  shall be exercisable  by
                      written  notice which shall state the election to exercise
                      the Option, the  number of Shares in  respect of which the

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                      Option is being  exercised, and such other representations
                      and agreements as to the holder's  investment  intent with
                      respect to such  shares of Common Stock as may be required
                      by the  Company  pursuant to the  provisions  of the Plan.
                      Such written notice shall be signed by  Optionee and shall
                      be delivered in  person or by certified mail to the Presi-
                      dent, Secretary or Chief Financial Officer of the Company.
                      The written notice shall be accompanied by  payment of the
                      exercise price if applicable.

         (iii)        Compliance with Law. No Shares will be issued  pursuant to
                      the  exercise of an Option  unless such issuance  and such
                      exercise shall comply with all relevant provisions  of law
                      and the  requirements of any stock  exchange or  quotation
                      medium upon which the Shares may then be listed or quoted.
                      Assuming  such compliance,  for income  tax  purposes  the
                      Shares shall be considered  transferred to the Optionee on
                      the date on which the Option is exercised  with respect to
                      such Shares.

         (iv)         Adjustments, Merger, etc. The number and class of the
                      Shares and/or the  exercise  price  specified  above are
                      subject to appropriate  adjustment in the event of changes
                      in the capital  stock of the Company by reason of stock
                      dividends, stock  splits, combination  or recombination of
                      shares, reclassifications, mergers, consolidations, reorg-
                      anizations or liquidations. Subject to any required action
                      of the stockholders  of the  Company, if the Company shall
                      be the surviving corporation  in any merger or  consolida-
                      tion, the Option (to the extent that it is still outstand-
                      ing) shall pertain to and apply to the securities to which
                      a holder of the same number of shares of Common Stock that
                      are then subject to the Option  would have been  entitled.
                      A dissolution or liquidation o f the Company,  or a merger
                      or consolidation in which the Company is not the surviving
                      corporation,  will cause the  Option to terminate,  unless
                      the agreement or merger or  consolidation shall  otherwise
                      provide, provided that the  Optionee  shall,  if the Board
                      expressly  authorizes,  in  such   event  have  the  right
                      immediately  prior to such dissolution or  liquidation, or
                      merger or consolidation,  to exercis e the Option in whole
                      or part.  To the  extent  that  the foregoing  adjustments
                      relate to stock or securities of the Company, such adjust-
                      ments  shall be made by the Board, whose determination  in
                      that respect shall be final, binding and conclusive.

4. Optionee's  Representations.  By receipt of the Option, by its execution, and
by its  exercise in whole or in part,  Optionee  represents  to the Company that
Optionee understands that:

         (i)          Both the Option and any Shares purchased upon its exercise
                      are  securities,  the issuance  by the  Company  of  which
                      requires  compliance  with  federal  and  state securities
                      laws;

         (ii)         These  securities  are made  available to Optionee only on
                      the condition  that  Optionee  makes  the  representations
                      contained in this Section 4 to the Company;

         (iii)        Optionee  has  made  a  reasonable  investigation  of  the
                      affairs of the Company sufficient  to be well  informed as
                      to the rights and the value of these securities;

         (iv)         Optionee  understands  that the  securities  have not been
                      registered  under the  Securities Act of 1933,  as amended

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                      (the "Act") in  reliance upon one or more specific  exemp-
                      tions  contained in the Act, which may include reliance on
                      Rule 701 promulgated under the Act, if available, or which
                      may depend  upon: (a)  Optionee's   bona  fide  investment
                      intention in acquiring  these  securities; (b)  Optionee's
                      intention  to hold these  securities  in  compliance  with
                      federal  and  state  securities  laws; (c) Optionee having
                      no present intention of selling or  transferring  any part
                      thereof (recognizing  that the Option is not transferable)
                      in violation of applicable  federal  and state  securities
                      laws; and (d) there being certain restrictions on transfer
                      of the Shares subject to the Option;

         (v)          Optionee  understands  that  the  Shares  subject  to  the
                      Option, in  addition  to  other  restrictions on transfer,
                      must be held indefinitely  unless subsequently  registered
                      under the Act, or unless an exemption from registration is
                      available; that  Rule  144,  the  usual   exemption   from
                      registration, is only available after the  satisfaction of
                      certain  holding  periods and in the presence  of a public
                      market for the  Shares; that there is no certainty  that a
                      public market  for the Shares will exist,  and that other-
                      wise it will be necessary that the Shares be sold pursuant
                      to another exemption from registration which may be diffi-
                      cult to satisfy; and,

         (vi)         Optionee understands that the certificate representing the
                      Shares will bear a legend  prohibiting  their  transfer in
                      the  absence of  their  registration  or  the  opinion  of
                      counsel for the Company that registration is not required,
                      and a legend prohibiting their transfer in compliance with
                      applicable  state   securities  laws    unless   otherwise
                      exempted.

5. Method of Payment.  Payment of the purchase  price may be made subject to the
terms of Section 14 herein,  or by cash, check or, in the sole discretion of the
Board at the time of exercise,  promissory notes or other Shares of Common Stock
having  a fair  market  value on the date of  surrender  equal to the  aggregate
purchase price of the Shares being purchased.

6. Restrictions on Exercise.  The Option may not be exercised if the issuance of
such Shares upon such  exercise  or the method of payment of  consideration  for
such Shares  would  constitute a violation  of any  applicable  federal or state
securities  or other law or  regulation.  As a condition  to the exercise of the
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.

7.  Termination  of  Status  as an  Employee  or  Consultant.  In the  event  of
termination of Optionee's  continuous  status as an Employee or  Consultant,  as
such  status  may be  determined  and  construed  by  the  Company  in its  sole
discretion ("Continuous Status"), for any reason other than death, disability or
the  satisfactory  completion  of the  term  of  any  employment  or  consulting
agreement  between the parties,  Optionee  may, but only within thirty (30) days
after  the  date of such  termination  (but in no event  later  than the date of
expiration of the term of the Option as set forth in Section 11 below), exercise
the Option to the extent that  Optionee  was entitled to exercise it at the date
of such  termination.  To the extent that  Optionee was not entitled to exercise
the Option at the date of such termination, or if Optionee does not exercise the
Option within the time specified herein, the Option shall terminate.

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8. Disability of Optionee.  In the event of termination of Optionee's Continuous
Status  as an  Employee  or  Consultant  as a result of  Optionee's  disability,
Optionee  may,  but only within six (6) months from the date of  termination  of
employment  or consulting  relationship  (but in no event later than the date of
expiration of the term of the Option as set forth in Section 11 below), exercise
the Option to the extent  Optionee  was  entitled  to exercise it at the date of
such  termination;  provided,  however that if the  disability  is not total and
permanent  (as  defined  in  Section  22(e)(3)  of the  Code)  and the  Optionee
exercises the option within the period provided above but more than three months
after the date of termination,  the Option shall automatically be deemed to be a
Nonstatutory  Stock  Option and not an Incentive  Stock  Option;  and  provided,
further,  that if the  disability  is total and permanent (as defined in Section
22(e)(3) of the Code),  then the Optionee may, but only within one (1) year from
the date of  termination  of employment or  consulting  relationship  (but in no
event later than the date of  expiration  of the term of the Option as set forth
in Section 11 below), exercise the Option to the extent Optionee was entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination,  or if Optionee does
not exercise  such Option (which  Optionee was entitled to exercise)  within the
time periods specified herein, the Option shall terminate.

9.       Death of Optionee. In the event of the death of Optionee:

         (i)        During  the  term  of  the  Option   while  an  Employee  or
                    Consultant  of the  Company  and having  been in  Continuous
                    Status as an Employee or Consultant  since the date of grant
                    of the  Option,  the  Option may be  exercised,  at any time
                    within one (1) year following the date of death (but, in the
                    case of an Incentive  Stock  Option,  in no event later than
                    the  date of  expiration  of the term of the  Option  as set
                    forth in  Section 11 below),  by  Optionee's  estate or by a
                    person  who  acquired  the right to  exercise  the Option by
                    bequest or inheritance,  but only to the extent of the right
                    to  exercise  that had  accrued  at the time of death of the
                    Optionee. To the extent that such Employee or Consultant was
                    not entitled to exercise the Option at the date of death, or
                    if such  Employee,  Consultant,  estate or other person does
                    not exercise such Option (which such  Employee,  Consultant,
                    estate or person was  entitled to  exercise)  within the one
                    (1) year time  period  specified  herein,  the Option  shall
                    terminate; or,

         (ii)       During the thirty (30) day period  specified in Section 7 or
                    the one (1) year  period  specified  in Section 8, after the
                    termination of Optionee's  Continuous  Status as an Employee
                    or  Consultant,  the  Option may be  exercised,  at any time
                    within one (1) year following the date of death (but, in the
                    case of an Incentive  Stock  Option,  in no event later than
                    the  date of  expiration  of the term of the  Option  as set
                    forth in  Section 11 below),  by  Optionee's  estate or by a
                    person  who  acquired  the right to  exercise  the Option by
                    bequest or inheritance,  but only to the extent of the right
                    to exercise that had accrued at the date of termination.  To
                    the extent that such Employee or Consultant was not entitled
                    to  exercise  the  Option at the date of  death,  or if such
                    Employee,  Consultant,  estate  or  other  person  does  not
                    exercise  such  Option  (which  such  Employee,  Consultant,
                    estate or person was  entitled to  exercise)  within the one
                    (1) year time  period  specified  herein,  the Option  shall
                    terminate.

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10.  Non-Transferability  of Option.  The Option may not be  transferred  in any
manner  otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee, only by Optionee. The terms of the
Option shall be binding upon the executors,  administrators,  heirs,  successors
and assigns of Optionee.

11.  Term of Option.  The Option may not be  exercised  more than five (5) years
from the date of grant of the Option, and may be exercised during such term only
in accordance with the Plan and terms of the Option; provided, however, that the
term of this option, if it is a Nonstatutory  Stock Option,  may be extended for
the period set forth in Section 9(i) or Section 9(ii) in the  circumstances  set
forth in such Sections.

12. Early Disposition of Stock; Taxation Upon Exercise of Option. If Optionee is
an Employee and the Option qualifies as an ISO,  Optionee  understands  that, if
Optionee  disposes of any Shares  received under the Option within two (2) years
after the date of this  Agreement  or within one (1) year after such Shares were
transferred to Optionee, Optionee may be treated for federal income tax purposes
as having received ordinary income at the time of such disposition in any amount
generally  measured as the difference  between the price paid for the Shares and
the lower of the fair market  value of the Shares at the date of exercise or the
fair market value of the Shares at the of  disposition.  Any gain  recognized on
such  premature  sale of the Shares in excess of the amount  treated as ordinary
income may be  characterized  as capital gain.  Optionee hereby agrees to notify
the  Company  in  writing  within  thirty  (30) days  after the date of any such
disposition.  Optionee  understands that if Optionee  disposes of such Shares at
any time after the expiration of such two-year and one-year holding periods, any
gain on such sale may be  treated  as  long-term  capital  gain laws  subject to
meeting  various  qualifications.  If  Optionee  is a  Consultant  or  this is a
Nonstatutory  Stock  Option,  Optionee  understands  that,  upon exercise of the
Option, Optionee may recognize income for tax purposes in an amount equal to the
excess of the then fair market value of the Shares over the exercise price. Upon
a resale of such shares by the Optionee,  any difference  between the sale price
and the fair  market  value of the Shares on the date of  exercise of the Option
may be treated as capital gain or loss.  Optionee  understands  that the Company
may be required to withhold tax from Optionee's current  compensation in some of
the  circumstances  described  above  (and  Optionee  hereby so  authorizes  the
Company);  to the extent that Optionee's current compensation is insufficient to
satisfy the withholding  tax liability,  the Company may require the Optionee to
make a cash  payment to cover such  liability  as a condition to exercise of the
Option.

13.  Tax  Consequences.  The  Optionee  understands  that  any of the  foregoing
references to taxation are based on federal income tax laws and  regulations now
in  effect,   and  may  not  be  applicable   to  the  Optionee   under  certain
circumstances.  The Optionee may also have adverse tax consequences  under state
or local law. The Optionee has reviewed with the Optionee's own tax advisors the
federal,   state,  local  and  foreign  tax  consequences  of  the  transactions
contemplated by this Agreement.  The Optionee is relying solely on such advisors
and  not on any  statements  or  representations  of the  Company  or any of its
agents.  The Optionee  understands that the Optionee (and not the Company) shall
be  responsible  for the Optionee's own tax liability that may arise as a result
of the transactions contemplated by this Agreement.

14. Net Issue Exercise.  Notwithstanding  any provisions herein to the contrary,
if the fair market value of one share of the  Company's  Common Stock is greater

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than the Per  Share  Exercise  Price  (at the date of  calculation  as set forth
below),  in lieu of  exercising  the Option for cash,  the Optionee may elect to
receive  shares equal to the value (as  determined  below) of the Option (or the
portion  thereof  being  canceled) by  surrender of the Option at the  principal
office of the Company together with the properly endorsed Notice of Exercise and
Subscription  Form and notice of such election,  in which event the Company will
issue to the  Optionee  a number of shares of Common  Stock  computed  using the
following formula:

                  X = Y (A-B)
                      -------
                         A

          Where X = the  number of  shares  of Common  Stock to be issued to the
          Optionee

                            Y = the number of shares of Common Stock purchasable
         under  the  Option  or,  if  only a  portion  of the  Option  is  being
         exercised,  the portion of the Option  being  canceled  (at the date of
         such calculation)

                            A = the  fair  market  value  of  one  share  of the
         Company's Common Stock (at the date of such calculation)

                            B =  Per Share  Exercise  Price  (as adjusted to the
         date of such calculation)

         For purposes of the above  calculation,  fair market value of one share
of the  Company's  Stock  will  be the  average  of the  closing  prices  of the
Company's  shares of  Common  Stock as quoted  on the OTC  Bulletin  Board  (the
"OTCBB") (or on such other United States stock exchange or public trading market
or quotation medium on or by which the shares of the Company trade or are quoted
if, at the time of the  election,  they are not  trading or being  quoted on the
OTCBB), for the five (5) consecutive trading days immediately preceding the date
of the date the completed,  executed Notice of Exercise and Subscription Form is
received.

15.  Damages.  The parties  agree that any violation of the Option (other than a
default in the payment of money) cannot be compensated  for by damages,  and any
aggrieved  party shall have the right,  and is hereby granted the privilege,  of
obtaining  specific  performance  of  the  Option  in  any  court  of  competent
jurisdiction in the event of any breach hereunder.

16. Delay. No delay or failure on the part of the Company or the Optionee in the
exercise of any right,  power or remedy shall operate as a waiver  thereof,  nor
shall any  single or  partial  exercise  by any of them of any  right,  power or
remedy preclude other or further exercise thereof,  or the exercise of any other
right, power or remedy.

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17.  Restrictions.  Notwithstanding  anything  herein to the contrary,  Optionee
understands  and agrees  that  Optionee  shall not dispose of any of the Shares,
whether  by  sale,  exchange,  assignment,   transfer,  gift,  devise,  bequest,
mortgage, pledge, encumbrance or otherwise,  except in accordance with the terms
and conditions of this Agreement, and Optionee shall not take or omit any action
which will impair the absolute and  unrestricted  right,  power,  authority  and
capacity of Optionee to sell Shares in accordance  with the terms and conditions
hereof.

Any purported transfer of Shares by Optionee that violates any provision of this
Section 17 shall be wholly void and ineffectual and shall give to the Company or
its  designee the right to purchase  from  Optionee all but not less than all of
the Shares then owned by Optionee for a period of ninety (90) days from the date
the Company first learns of the purported transfer at the Agreement Price and on
the Agreement  Terms (as those terms are defined in subsections  (vi) and (vii),
respectively,  of this  Section  17).  If the  Shares are not  purchased  by the
Company or its designee,  the purported  transfer  thereof shall remain void and
ineffectual and they shall continue to be subject to this Agreement.

The Company  shall not cause or permit the  transfer of any Shares to be made on
its books except in accordance with the terms hereof.

         (i)      Permitted Transfers.

                  (a)      Optionee may sell, assign or transfer any Shares held
                           by the  Optionee  but  only  by  complying  with  the
                           provisions of subsection (iv) of this Section 17.

                  (b)      Optionee may sell, assign or transfer any Shares held
                           by the Optionee without complying with the provisions
                           of subsection  (iv)  by  obtaining  the prior written
                           consent of the  Company's shareholders  owning 50% of
                           the  then  issued  and  outstanding   shares  of  the
                           Company's Common Stock (determined on a fully diluted
                           basis) or a majority of the  members of  the Board of
                           Directors  of  the   Company,  provided    that   the
                           transferee agrees  in  writing  to be  bound  by  the
                           provisions  of the Option and the transfer is made in
                           accordance with any other restrictions  or conditions
                           contained in the  written consent and  in  accordance
                           with applicable federal and state securities laws.

                  (c)      Upon  the  death  of  Optionee,  Shares  held  by the
                           Optionee   may  be   transferred   to  the   personal
                           representative   of  the  Optionee's  estate  without
                           complying  with the  provisions of  subsection  (iv).
                           Shares so  transferred  shall be subject to the other
                           provisions  of the Option,  including in  particular,
                           and without limitation, subsection (v).

         (ii)     No Pledge.  Unless a majority  of the  members of the Board of
                  Directors  consent,  Shares may not be pledged,  mortgaged  or
                  otherwise encumbered to secure indebtedness for money borrowed
                  or any other obligation for which the Optionee is primarily or
                  secondarily liable.

         (iii)    Stock  Certificate  Legend.  Each stock certificate for Shares
                  issued  to the  Optionee  shall  have  conspicuously  written,
                  printed,  typed or stamped upon the face thereof,  or upon the
                  reverse  thereof  with a  conspicuous  reference  on the  face
                  thereof, one or both of the following legends:

                  THE SHARES  REPRESENTED BY THIS  CERTIFICATE  HAVE BEEN ISSUED
                  WITHOUT  REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS
                  AMENDED,  AND  MAY  NOT  BE  TRANSFERRED  IN  THE  ABSENCE  OF
                  REGISTRATION  THEREUNDER OR AN APPLICABLE  EXEMPTION  FROM THE

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                  REGISTRATION  REQUIREMENTS OF SUCH ACT. SUCH SHARES MAY NOT BE
                  SOLD, ASSIGNED,  TRANSFERRED,  OR OTHERWISE DISPOSED OF IN ANY
                  MANNER EXCEPT IN  ACCORDANCE  WITH AND SUBJECT TO THE TERMS OF
                  THE STOCK OPTION AGREEMENT,  A COPY OF WHICH IS ON FILE AT THE
                  PRINCIPAL  OFFICE OF THE  COMPANY.  UNLESS A  MAJORITY  OF THE
                  MEMBERS OF THE BOARD OF DIRECTORS  CONSENT,  SUCH STOCK OPTION
                  AGREEMENT PROHIBITS ANY PLEDGE,  MORTGAGE OR OTHER ENCUMBRANCE
                  OF SUCH SHARES TO SECURE ANY  OBLIGATION OF THE HOLDER HEREOF.
                  EVERY  CREDITOR OF THE HOLDER HEREOF AND ANY PERSON  ACQUIRING
                  OR PURPORTING TO ACQUIRE THIS CERTIFICATE OR THE SHARES HEREBY
                  EVIDENCED  OR ANY INTEREST  THEREIN IS HEREBY  NOTIFIED OF THE
                  EXISTENCE OF SUCH STOCK OPTION AGREEMENT,  AND ANY ACQUISITION
                  OR PURPORTED  ACQUISITION  OF THIS  CERTIFICATE  OR THE SHARES
                  HEREBY  EVIDENCED OR ANY INTEREST  THEREIN SHALL BE SUBJECT TO
                  ALL RIGHTS AND OBLIGATIONS OF THE PARTIES TO SUCH STOCK OPTION
                  AGREEMENT AS THEREIN SET FORTH.

                  IT IS  UNLAWFUL  TO  CONSUMMATE  A SALE  OR  TRANSFER  OF THIS
                  SECURITY,   OR  ANY  INTEREST  THEREIN,   OR  TO  RECEIVE  ANY
                  CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR WRITTEN CONSENT OF
                  THE  COMMISSIONER  OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                  EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

         (iv)     Sales of Shares.

                  (a)      Company's  Right of First Refusal.  In the event that
                           the Optionee shall desire to sell, assign or transfer
                           any Shares held by the  Optionee to any other  person
                           (the  "Offered  Shares") and shall be in receipt of a
                           bona  fide  offer  to  purchase  the  Offered  Shares
                           ("Offer"),  the following  procedure shall apply. The
                           Optionee  shall give to the  Company  written  notice
                           containing  the terms and  conditions  of the  Offer,
                           including,  but  not  limited  to (a) the  number  of
                           Offered  Shares;  (b) the  price per  Share;  (c) the
                           method  of  payment;  and  (d)  the  name(s)  of  the
                           proposed purchaser(s).

                  (b)      An offer  shall not be deemed  bona fide  unless  the
                           Optionee has informed  the  prospective  purchaser of
                           the  Optionee's  obligation  under the Option and the
                           prospective  purchaser  has  agreed to become a party
                           hereunder  and to be bound  hereby.  The  Company  is
                           entitled to take such steps as it reasonably may deem
                           necessary  to  determine  the  validity and bona fide
                           nature of the Offer.

                                    9 of 17

<PAGE>

                  (c)      Until  thirty  (30) days after such  notice is given,
                           the Company or its  designee  shall have the right to
                           purchase  all  of the  Offered  Shares  at the  price
                           offered by the prospective purchaser and specified in
                           such notice.  Such purchase shall be on the Agreement
                           Terms, as defined in subsection (vi).

                  (d)      Failure of Company or its Designee to Purchase Offer-
                           ed  Shares.  If all  of the  Offered Shares  are  not
                           purchased by the Company  and/or its designee  within
                           the  thirty  (30)  day   period   granted   for  such
                           purchases,  then any remaining Offered  Shares may be
                           sold, assigned or transferred  pursuant to the Offer;
                           provided,  that the Offered Shares are so transferred
                           within 30 days of the  expiration  of the thirty (30)
                           day  period to  the  person  or persons named in, and
                           under  the  terms and   conditions  of, the bona fide
                           Offer described  in the notice  to  the Company;  and
                           provided further,  that such persons agree to execute
                           and  deliver to the Company  a written  agreement, in
                           form and  content satisfactory to the Company, agree-
                           ing to be bound by the  terms and  conditions  of the
                           Option.

         (v)      Manner of Exercise.  Any right to purchase  hereunder shall be
                  exercised  by  giving   written  notice  of  election  to  the
                  Optionee, the Optionee's personal  representative or any other
                  selling person, as the case may be, prior to the expiration of
                  such right to purchase.

         (vi)     Agreement Price. The "Agreement  Price" shall be the higher of
                  (a) the  fair  market  value  of the  Shares  to be  purchased
                  determined  in good  faith by the  Board of  Directors  of the
                  Company and (b) the original  exercise  price of the Shares to
                  be purchased.

         (vii)    Agreement Terms.  "Agreement Terms" shall mean and include the
                  following:

                  (a)      Delivery of Shares and Closing Date.  At the closing,
                           the Optionee, the Optionee's personal  representative
                           or such  other selling  person, as   the case may be,
                           shall deliver certificates  representing  the Shares,
                           properly   endorsed  for   transfer,  and   with  the
                           necessary  documentary and  transfer  tax stamps,  if
                           any,  affixed,  to the purchaser of such Shares. Pay-
                           ment of  the  purchase  price  therefore   shall con-
                           currently be made   to the  Optionee,  the Optionee's
                           personal representative or such other selling person,
                           as  provided  in  subsection  (b) of this  subsection
                           (vii). Such delivery and payment shall be made at the
                           principal  office of the  Company or  at  such  other
                           place as the parties mutually agree.

                  (b)      Payment of Purchase Price.  The Company shall pay the
                           purchase price to the Optionee at the closing.

         (viii)   Right to Purchase Upon Certain  Other  Events.  The Company or
                  its  designee  shall have the right to purchase  all,  but not
                  less than  all,  of the  Shares  held by the  Optionee  at the

                                    10 of 17

<PAGE>

                  Agreement  Price  and on the  Agreement  Terms for a period of
                  ninety (90) days after any of the following events:

                  (a)      An attempt by a  creditor to levy upon or sell any of
                           the Optionee's Shares;

                  (b)      The  filing of a petition by the Optionee  under  the
                           U.S. Bankruptcy Code or any insolvency laws;

                  (c)      The filing of a petition  against  Optionee under any
                           insolvency or bankruptcy  laws by any creditor of the
                           Optionee  if such  petition is not  dismissed  within
                           thirty (30) days of filing;

                  (d)      The entry of a decree of divorce between the Optionee
                           and the Optionee's spouse; or,

                  (e)      The termination of Optionee's services as an employee
                           or consultant with the Company.

                  The Optionee  shall provide the Company  written notice of the
                  occurrence of any such event within 30 days of such event.

         (ix)     Termination. The provisions of this Section 17 shall terminate
                  and all rights of each such party hereunder shall cease except
                  for  those  which  shall  have  theretofore  accrued  upon the
                  occurrence of any of the following events:

                  (a)      Cessation of the Company's business;

                  (b)      Bankruptcy,  receivership   or  dissolution   of  the
                           Company;

                  (c)      Ownership of all of the issued and outstanding shares
                           of  the  Company  by  a  single  shareholder  of  the
                           Company;

                  (d)      Written  consent or agreement of the  shareholders of
                           the Company  holding  Fifty Percent (50%) of the then
                           issued  and   outstanding   shares  of  the   Company
                           (determined on a fully diluted basis);

                  (e)      Consent or agreement of  a majority of the members of
                           the Board of Directors of the Company; or,

                  (f)      Registration of any class of equity securities of the
                           Company  pursuant  to  Section  12 of the  Securities
                           Exchange Act of 1934, as amended.

         (x)      Amendment. This Section 17 may be modified or amended in whole
                  or in part by a written  instrument  signed by shareholders of
                  the Company  holding 50% of the  outstanding  shares of Common
                  Stock  (determined  on a fully diluted basis) or a majority of
                  the members of the Board of Directors of the Company.

                                    11 of 17

<PAGE>

18. Market Standoff. Unless the Board of Directors otherwise consents,  Optionee
agrees hereby not to sell or otherwise  transfer any Shares or other  securities
of the Company  during the 180-day  period  following  the  effective  date of a
registration  statement of the Company filed under the Act;  provided,  however,
that such restriction shall apply only to the first two registration  statements
of the Company to become effective under the Act which includes securities to be
sold on behalf of the Company to the public in an  underwritten  public offering
under the Act. The Company may impose stop-transfer instructions with respect to
securities  subject to the foregoing  restrictions until the end of such 180-day
period.

19.  Rule 144.  Optionee  acknowledges  and  understands  that the Shares may be
subject to transfer and sale  restrictions  imposed  pursuant to SEC Rule 144 of
the  Rules  promulgated  under  the  Securities  Act of  1933  ("Act")  and  the
regulations promulgated thereunder. Optionee shall comply with Rule 144 and with
all policies and  procedures  established by the Company with regard to Rule 144
matters.  Optionee  acknowledged  that the Company or its  attorneys or transfer
agent  may  require a  restrictive  legend on the  certificate  or  certificates
representing  the Shares pursuant to the  restrictions on transfer of the Shares
imposed by Rule 144.

20. No Distribution. Notwithstanding anything in this Agreement to the contrary,
Optionee acknowledges that: (i) the Option, and the Shares upon exercise, is and
are being acquired in a private  transaction which is not part of a distribution
of the Option or Shares; (ii) the Optionee intends to hold the Option and Shares
for the account of the Optionee and does not intend to sell the Option or Shares
as a part of a distribution or otherwise; and (iii) neither the Optionee nor the
Company is an  underwriter  with regard to the Option or the Shares for purposes
of Rule 144.

21. Securities  Compliance.  Optionee understands that the Option and the Shares
may be  offered  and  sold  in  reliance  on one or  more  exemptions  from  the
registration requirements of federal and state securities laws, which exemptions
may include,  without limitation,  Regulation D promulgated under the Securities
Act,  and that the  Company  is  relying  upon the  truth  and  accuracy  of the
representations,  warranties, agreements,  acknowledgments and understandings of
Optionee  set  forth  herein in order to  determine  the  applicability  of such
exemptions and the suitability of Optionee to acquire the Option and the Shares.
The  representations,  warranties and agreements  contained  herein are true and
correct as of the date hereof and may be relied upon by the Company and Optionee
will  notify  the  Company  immediately  of  any  adverse  change  in  any  such
representations  and warranties which may occur prior to the issuance of Shares.
The  representations,  warranties  and agreements of Optionee  contained  herein
shall survive the  execution and delivery of this  Agreement and the exercise of
the Option and the issuance of the Shares.

22. Complete Agreement.  This Agreement constitutes the entire agreement between
the parties with respect to its subject  matter,  and supersedes all other prior
or contemporaneous  agreements and understandings both oral or written; subject,
however,  that in the event of any conflict between this Agreement and the Plan,
the Plan shall govern. This Agreement may only be amended in a writing signed by
the Company and the Optionee.

23. Privileges of Stock Ownership.  Optionee shall not have any of the rights of
a shareholder with respect to any Shares until Optionee exercises the Option and
pays the  Exercise  Price,  Shares are issued and  delivered  to  Optionee,  and

                                    12 of 17

<PAGE>

Optionee  is shown as a  shareholder  of record on the books and  records of the
Company.

24. Further Acts. The parties hereto shall cooperate with each other and execute
such additional documents or instruments and perform such further acts as may be
reasonably necessary to affect the purpose and intent of the Agreement.

25. Effect of Headings. The subject headings of the paragraphs and subparagraphs
of this Agreement are included for purposes of  convenience  only, and shall not
affect the construction or interpretation of any of its provisions.

26.  Notices.  Any notice required to be given or delivered to the Company under
the terms of this  Agreement  shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices. Any notice required
to be given or  delivered  to  Optionee  shall be in writing  and  addressed  to
Optionee at the address  indicated herein or to such other address as such party
may designate in writing from time to time to the Company.  All notices shall be
deemed to have been given or delivered upon actual personal delivery;  three (3)
days after  deposit in the United  States mail by certified or  registered  mail
(return receipt  requested);  one (1) business day after deposit with any return
receipt express courier (prepaid); or one (1) business day after transmission by
facsimile with a corresponding facsimile transmission confirmation sheet.

27. Counterparts.  This Agreement may be executed  simultaneously in one or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall  constitute one and the same  instrument.  The exhibits  attached
hereto and  initialed  by the parties  are made a part  hereof and  incorporated
herein by this reference.

28. Parties in Interest. Nothing in this Agreement,  whether express or implied,
is  intended  to  confer  any  rights  or  remedies  under or by  reason of this
Agreement  on any  persons  other than the  parties  to it and their  respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third party to this Agreement,  nor
shall any  provision  give any third person any right of  subrogation  or action
over against any party to this Agreement.

29.  Recovery of Litigation  Costs.  If any legal action or any  arbitration  or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute,  breach, default or misrepresentation in connection with any
of the  provisions of this  Agreement,  the  successful  or prevailing  party or
parties shall be entitled to recover as an element of their damages,  reasonable
attorneys'  fees and other  costs  incurred  in that  action or  proceeding,  in
addition to any other relief to which they may be entitled.

30.  Severability;  Construction.  In the  event  that  any  provision  in  this
Agreement shall be invalid or  unenforceable,  such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining  provisions of this Agreement.  This Agreement shall be
construed as to its fair meaning and not for or against either party.

                                    13 of 17

<PAGE>

31. Survival of Representations and Obligations. All representations, warranties
and agreements of the parties contained in this Agreement, or in any instrument,
certificate,  opinion or other  writing  provided for in it,  shall  survive the
exercise of the Option and the issuance of the Shares.

32.  Specific  Performance.  Each party's  obligations  under this Agreement are
unique. If any party should default in its obligations under this Agreement, the
parties each acknowledge that it would be extremely impracticable to measure the
resulting  damages;  accordingly,  the  nondefaulting  party, in addition to any
other available rights or remedies,  may sue in equity for specific  performance
without the necessity of posting a bond or other security,  and the parties each
expressly waive the defense that a remedy in damages will be adequate.

33.  Gender;  Number.  Whenever  the  context of this  Agreement  requires,  the
masculine gender includes the feminine or neuter gender, and the singular number
includes the plural.

34.  Governing Law and Venue.  This  Agreement will be construed and enforced in
accordance  with, and the rights of the parties will be governed by, the laws of
the State of California without regard to conflict of laws principles.  Venue in
any action arising by reason of this Agreement  shall lie  exclusively in Orange
County, California.

35.  Consultancy  Agreement.  This  Option is issued  pursuant  to that  certain
Consultancy and Advisory  Agreement  effective August 28, 2007. The terms of the
Consultancy and Advisory  Agreement shall control over any conflicting  terms in
this Option.  Any breach under the  Consultancy  and  Advisory  Agreement  shall
constitute a breach  under this Option and allows the Company to terminate  this
Option in whole or in part.

IN WITNESS WHEREOF, this Agreement is made effective on the date first set forth
above at Orange County, California.

                                    Company:

                                    XSUNX, INC, a Colorado Corporation

                                    By:      ________________________________
                                             Name: Tom M. Djokovich
                                             Title:    CEO

                                    14 of 17

<PAGE>

OPTIONEE  ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION
3 HEREOF IS EARNED ONLY BY  CONTINUING  SERVICE AS AN EMPLOYEE OR  CONSULTANT AT
THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,  BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT THIS OPTION, THE COMPANY'S PLAN WHICH IS INCORPORATED  HEREIN BY REFERENCE,
THE  TRANSACTIONS  CONTEMPLATED  HEREUNDER  AND THE VESTING  SCHEDULE  SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED  PROMISE OF CONTINUED  ENGAGEMENT
AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD,  FOR ANY PERIOD, OR AT ALL,
AND  SHALL  NOT  INTERFERE  WITH  OPTIONEE'S  RIGHT  OR THE  COMPANY'S  RIGHT TO
TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTING  RELATIONSHIP AT ANY TIME, WITH OR
WITHOUT CAUSE.

Optionee acknowledges receipt of a copy of the Plan, represents that Optionee is
familiar with the terms and  provisions  thereof,  and hereby accepts the Option
subject to all of the terms and  provisions  thereof.  Optionee has reviewed the
Plan and this Agreement in their entirety,  has had an opportunity to obtain the
advice of counsel prior to executing  this Agreement and fully  understands  all
provisions of the Plan and this  Agreement.  Optionee hereby agrees to accept as
binding,  conclusive and final all decisions or  interpretations of the Board or
of the Committee upon any questions arising under the Plan.

         IN WITNESS WHEREOF,  this  acknowledgment is made effective on the date
first set forth in the Agreement at Orange County, California.

                                    OPTIONEE

                                    ------------------------------
                                    Name:  Michael A. Russak

                                    15 of 17

<PAGE>

CONSENT OF SPOUSE

The undersigned  spouse of the Optionee to the foregoing Stock Option  Agreement
acknowledges  on his or her own behalf  that:  I have read the  foregoing  Stock
Option Agreement and I know its contents. I hereby consent to and approve of the
provisions of the Stock Option Agreement,  and agree that the Shares issued upon
exercise of the Option covered  thereby and my interest in them shall be subject
to the  provisions of the Stock Option  Agreement and that I will take no action
at any time to hinder  operation of the Stock Option  Agreement as to the Shares
or my interest in the Shares.

 IN WITNESS WHEREOF, this acknowledgment is made effective on the date first set
forth in the Agreement at Orange County, California.

                                      ---------------------------------
                                      Name:

                                    16 of 17

<PAGE>

                                EXHIBIT TO OPTION

                    SUBSCRIPTION FORM AND NOTICE OF EXERCISE

XsunX, Inc.                                             Date:
Attn: President
65 Enterprise
Aliso Viejo, CA 92656

Ladies and Gentlemen:

                  The  undersigned,  the holder of the enclosed  Option,  hereby
irrevocably elects to exercise the purchase rights represented by the Option and
to purchase there under  __________  shares of Common Stock of XSUNX,  INC. (the
"Company"),  and herewith  encloses payment of $___________  and/or  ___________
shares of the Company's common stock,  (the "Purchase Price") in full payment of
the Purchase Price of such shares being purchased.

Exercise of the Option shall not be deemed  effective  unless and until good and
immediately  available  funds in the full amount of the Purchase Price have been
confirmed in the account of the Company.  The original Option shall be presented
with this Subscription Form and Notice of Exercise.

         The Company may, in its  discretion,  withhold a portion of some or all
of the  exercised  shares or other  amounts  for the  payment  of taxes or other
items.  Holder  represents that Holder is not subject to any backup  withholding
requirements. Holder acknowledges that the shares of stock of the Company issued
upon  exercise  will not be entitled to any  dividend  declared  upon such stock
prior to the effective date of exercise of the Option.

         Holder hereby constitutes this Subscription Form and Notice of Exercise
as an  assignment,  deposit  tender,  and transfer in blank of the Option as set
forth therein.  Holder hereby irrevocably constitutes and appoints the secretary
of the Company as Holder's attorney in fact to issue shares upon the exercise of
the Option and reflect the same on the books and records of the Company,  cancel
the Option, issue a new Option, if applicable,  and perform any necessary act on
behalf of Holder, with full power substitution.

                                        Very truly yours,

                                        ________________________________________

                                        By: ____________________________________

                                        Title: _________________________________

                                    17 of 17Exhibit
10.2

 

 

 

 

 

 

 

 

 

 

 

TRIMAS CORPORATION

2006 LONG TERM EQUITY INCENTIVE PLAN

(Effective November 1, 2006)

Table of
Contents

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  I.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Establishment

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Purpose

  	
   

  	
  1

  
	
  1.3

  	
   

  	
  Plan Duration

  	
   

  	
  1

  
	
  1.4

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  1.5

  	
   

  	
  Administration

  	
   

  	
  8

  
	
  1.6

  	
   

  	
  Participants

  	
   

  	
  10

  
	
  1.7

  	
   

  	
  Stock

  	
   

  	
  10

  
	
  1.8

  	
   

  	
  Repricing

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  STOCK OPTIONS

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Grant of Options

  	
   

  	
  11

  
	
  2.2

  	
   

  	
  Incentive Stock Options

  	
   

  	
  12

  
	
  2.3

  	
   

  	
  Option Price

  	
   

  	
  12

  
	
  2.4

  	
   

  	
  Payment for Option Shares

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  STOCK APPRECIATION RIGHTS

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Grant of Stock Appreciation Rights

  	
   

  	
  13

  
	
  3.2

  	
   

  	
  Exercise Price

  	
   

  	
  13

  
	
  3.3

  	
   

  	
  Exercise of Stock Appreciation Rights

  	
   

  	
  13

  
	
  3.4

  	
   

  	
  Stock Appreciation Right Payment

  	
   

  	
  13

  
	
  3.5

  	
   

  	
  Maximum Stock Appreciation Right Amount Per Share

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  RESTRICTED STOCK AND UNITS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Grant of Restricted Stock and Restricted Stock Units

  	
   

  	
  14

  
	
  4.2

  	
   

  	
  Restricted Stock Agreement

  	
   

  	
  14

  
	
  4.3

  	
   

  	
  Transferability

  	
   

  	
  14

  
	
  4.4

  	
   

  	
  Other Restrictions

  	
   

  	
  14

  
	
  4.5

  	
   

  	
  Voting Rights

  	
   

  	
  14

  
	
  4.6

  	
   

  	
  Dividends and Dividend Equivalents

  	
   

  	
  14

  
	
  4.7

  	
   

  	
  Settlement of Restricted Stock Units

  	
   

  	
  15

  
	
  4.8

  	
   

  	
  Restricted Stock Unit Bonus Deferral Awards

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  PERFORMANCE AWARDS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Grant of Performance Awards

  	
   

  	
  16

  
	
  5.2

  	
   

  	
  Terms of Performance Awards.

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  ANNUAL INCENTIVE AWARDS

  	
   

  	
  17

  

 

 i
 

 

	
  6.1

  	
   

  	
  Grant of Annual Incentive Awards

  	
   

  	
  17

  
	
  6.2

  	
   

  	
  Payment of Annual Incentive Awards

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  CODE SECTION 162(m) AWARDS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Awards Granted Under Code Section 162(m)

  	
   

  	
  17

  
	
  7.2

  	
   

  	
  Attainment of Code Section 162(m) Goals

  	
   

  	
  18

  
	
  7.3

  	
   

  	
  Individual Code Section 162(m) Participant
  Limitations

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  NON-EMPLOYEE DIRECTOR COMPENSATION

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Annual Retainer and Meeting Fees

  	
   

  	
  19

  
	
  8.2

  	
   

  	
  Deferral

  	
   

  	
  19

  
	
  8.3

  	
   

  	
  Change in Deferral Election

  	
   

  	
  19

  
	
  8.4

  	
   

  	
  Crediting of Deferred Compensation

  	
   

  	
  20

  
	
  8.5

  	
   

  	
  Earnings Credit

  	
   

  	
  20

  
	
  8.6

  	
   

  	
  Form and Timing of Distributions

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  TERMINATION OF EMPLOYMENT OR SERVICES

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Options and Stock Appreciation Rights

  	
   

  	
  21

  
	
  9.2

  	
   

  	
  Restricted Stock and Restricted Stock Units

  	
   

  	
  22

  
	
  9.3

  	
   

  	
  Performance Awards

  	
   

  	
  23

  
	
  9.4

  	
   

  	
  Annual Incentive Awards

  	
   

  	
  23

  
	
  9.5

  	
   

  	
  Other Provisions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  ADJUSTMENTS AND CHANGE IN CONTROL

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Adjustments

  	
   

  	
  23

  
	
  10.2

  	
   

  	
  Change in Control

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI. 

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Partial Exercise/Fractional Shares

  	
   

  	
  25

  
	
  11.2

  	
   

  	
  Rights Prior to Issuance of Shares

  	
   

  	
  25

  
	
  11.3

  	
   

  	
  Non-Assignability; Stop Transfer Restrictions;
  Removal

  	
   

  	
  26

  
	
  11.4

  	
   

  	
  Securities Laws and Stock Exchange Requirements

  	
   

  	
  26

  
	
  11.5

  	
   

  	
  Lock-Up Agreement

  	
   

  	
  27

  
	
  11.6

  	
   

  	
  Corporation’s Repurchase Rights and Restrictions on
  Shares

  	
   

  	
  28

  
	
  11.7

  	
   

  	
  Withholding Taxes

  	
   

  	
  28

  
	
  11.8

  	
   

  	
  Termination and Amendment

  	
   

  	
  28

  
	
  11.9

  	
   

  	
  Code Section 409A

  	
   

  	
  29

  
	
  11.10

  	
   

  	
  Effect on Employment or Services

  	
   

  	
  29

  
	
  11.11

  	
   

  	
  Use of Proceeds

  	
   

  	
  29

  

 

 ii
 

 

	
  11.12

  	
   

  	
  Severability

  	
   

  	
  29

  
	
  11.13

  	
   

  	
  Beneficiary Designation

  	
   

  	
  30

  
	
  11.14

  	
   

  	
  Unfunded Obligation

  	
   

  	
  30

  
	
  11.15

  	
   

  	
  Approval of Plan

  	
   

  	
  30

  
	
  11.16

  	
   

  	
  Governing Law

  	
   

  	
  30

  

 

 iii

 

TRIMAS CORPORATION

2006 LONG TERM EQUITY INCENTIVE PLAN

(Effective November 1, 2006)

I.      GENERAL PROVISIONS

1.1          Establishment.

(a)           On
November 1, 2006, the Board of Directors (“Board”) of TriMas Corporation (“Corporation”)
adopted the TriMas Corporation 2006 Long Term Equity Incentive Plan (“Plan”),
subject to the approval of stockholders within twelve (12) months after the
Board’s adoption of the Plan.

(b)           As
long as the Corporation is not subject to the reporting requirements of
Sections 13 or 15(d) of the Exchange Act and is not an investment company
registered or required to be registered under the Investment Company Act of
1940, the Corporation intends that all offers and sales of shares pursuant to
Awards granted hereunder, shall be exempt from registration under the
provisions of Section 5 of the Securities Act, and the Plan shall be
administered in a manner to preserve such exemption.  Prior to a Public Trading Date, the
Corporation intends for the Plan to constitute a written compensatory benefit
plan within the meaning of Rule 701(b) or 17 CFR Section 230.701 promulgated by
the Securities and Exchange Commission pursuant to the Securities Act, or any
successor Rule.  Prior to a Public
Trading Date and unless otherwise specified, Awards granted under the Plan are
intended to be granted in reliance on Rule 701 whenever applicable.

1.2          Purpose.  The purpose of the Plan is to (a) promote the
best interests of the Corporation and its stockholders by encouraging
Employees, Non-Employee Directors and Consultants of the Corporation and its
Subsidiaries to acquire an ownership interest in the Corporation by granting
stock-based Awards, thus aligning their interests with those of stockholders,
and (b) enhance the ability of the Corporation to attract, motivate and retain
qualified Employees, Non-Employee Directors and Consultants.  If the shares of the Corporation become
publicly traded, it is the further purpose of the Plan to authorize certain
Awards that will constitute performance based compensation, as described in
Code Section 162(m) and Treasury regulations promulgated thereunder.

1.3          Plan Duration.  Subject to stockholder  approval, the Plan shall become effective on
November 1, 2006 and shall continue in effect until its termination by the
Board; provided, however, that no new Awards may be granted on or after the
tenth (10th)
anniversary of the earlier of (a) the date on which the Plan is adopted by the
Board, or (b) the date on which the Plan is approved by stockholders.

1.4          Definitions.  As used in this Plan, the following terms
have the meaning described below:

 1
 

 

(a)      “Account” means
an unfunded bookkeeping account in the name of a Non-Employee Director who
elects to defer all or a portion of the Non-Employee Director’s annual retainer
or meeting fees pursuant to Article VIII.

(b)      “Administrator”
means the Board or the Committee, as applicable, responsible for conducting the
general administration of the Plan in accordance with Section 1.5 hereof;
provided, that in the case of the administration of the Plan with respect to
Awards granted to Non-Employee Directors, the term “Administrator” shall refer
to the Board.

(c)      “Agreement” means
the written document that sets forth the terms of a Participant’s Award.

(d)      “Annual Incentive Award”
means an Award that is granted in accordance with Article VI.

(e)      “Award” means any
form of Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Unit, Performance Award, Annual Incentive Award or other incentive award
granted under the Plan, including Restricted Stock Unit Bonus Deferral Awards
under Section 4.8, as well as the payment of Non-Employee Director compensation
pursuant to Article VIII.

(f)       “Beneficiary”
means the person a Participant designates in writing, on a form prescribed by
the Corporation, to receive payment from an Account under the Plan after the
Participant’s death.  If there is no such
designation, or if the designated Beneficiary predeceases the Participant, the
Beneficiary shall be the Participant’s spouse, if any, and if none, the Participant’s
estate.

(g)      “Board” means the
Board of Directors of the Corporation.

(h)      “Cause” means (i)
a Participant’s conviction of or plea of guilty or nolo contendere to a crime constituting a felony under the
laws of the United States or any State thereof or any other jurisdiction in
which the Corporation or its Subsidiaries conduct business; (ii) a Participant’s
willful misconduct in the performance of his or her duties to the Corporation
or its Subsidiaries; (iii) a Participant’s willful and continued failure to
follow the instructions of the Participant’s supervisor; or (iv) a Participant’s
willful and/or continued neglect of duties (other than such neglect resulting
from incapacity of the Participant due to physical or mental illness);
provided, however, that “Cause” shall arise under items (iii) or (iv) only
following ten (10) days’ written notice thereof from the Corporation or a
Subsidiary, which specifically identifies such failure or neglect and the
continuance of such failure or neglect during such notice period.  Any failure by the Corporation or a
Subsidiary to notify a Participant after the first occurrence of an event
constituting Cause shall not preclude any subsequent occurrences of such event
(or a similar event) from constituting Cause.

 2
 

 

(i)       “Change in Control”
means the following:

(i)            Subject to the two exceptions
described below, the same definition as in the Indenture dated as of June 6,
2002 among the Corporation, each of the Guarantors named therein and the Bank
of New York, as Trustee, relating to the 9 7/8% Senior Subordinated Notes due
2012 of the Corporation, as in effect on November 1, 2006 and  regardless of whether or not such notes or
Indenture are hereinafter discharged, defeased or repaid (the “Indenture”); and
all defined terms used in such definition of Change of Control shall have the
meanings ascribed thereto under the Indenture as well; provided that no
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries shall result in a Change
in Control hereunder.

(ii)           Paragraph (2) of the Change of
Control definition in the Indenture regarding liquidation and dissolution shall
be excluded from the definition applied herein to conform with Code Section
409A.

(iii)          To conform with Code Section 409A, the
following provision shall control over the “Continuing Director” provision set
forth in paragraph (4) of the Change of Control definition in the
Indenture.  A Change in Control shall
occur on the first day on which a majority of the members of the Board are not
Continuing Directors.  As of the date of
determination, a “Continuing Director” means any member of the Board who (A)
has been a member of the Board throughout the immediately preceding twelve (12)
months; or (B) was nominated for election, or elected to the Board with the
approval of the Continuing Directors who were members of the Board at the tine
of such nomination or election, or designated as a director under the
Stockholders Agreement.

(j)       “Code” means the
Internal Revenue Code of 1986, as amended from time to time.  References to any provision in the Code shall
be deemed to include successor provisions thereto and regulations thereunder.

(k)     “Committee” means
the Compensation Committee of the Board, or any other committee or
sub-committee designated by the Board from time to time.  The members of the Committee shall be
appointed by, and may be changed at any time and from time to time, at the
discretion of the Board.

(l)       “Common Stock”
means shares of the Corporation’s authorized $0.01 par value common stock.

(m)     “Consultant” means
a consultant or advisor (other than as an Employee or member of the Board) to
the Corporation or a Subsidiary; provided that such person (i) renders bona
fide services that are not in connection with the offer and sale of the
Corporation’s securities in a capital raising transaction, and (ii) does not
promote or maintain a market for the Corporation’s securities.

 3
 

 

(n)      “Corporation”
means TriMas Corporation, a Delaware corporation, or any successor corporation.

(o)      “Director” means
an individual who has been elected or appointed to serve as a Director of the
Corporation.

(p)      “Disability”
means total and permanent disability, as defined in Code Section 22(e);
provided, however, that for purposes of a Code Section 409A distribution event,
“disability” shall be defined under Code Section 409A and IRS guidance issued
thereunder.

(q)      “Dividend Equivalent”
means a credit, made at the discretion of the Administrator or as otherwise
provided by the Plan, to the account of a Participant in an amount equal to the
cash dividend paid on one share of Common Stock for each share of Common Stock
represented by an Award held by such Participant.  Dividend Equivalents shall not be paid on
Option or Stock Appreciation Right Awards.

(r)      “Earnings Rate”
means the interest rate on a Non-Employee Director’s cash deferrals, which
shall be the Prime Rate, compounded quarterly.

(s)      “Employee” means
any person, including an officer or Director, who is an Employee (as defined in
accordance with Section 3401(c) of the Code) of the Corporation or any
Subsidiary of the Corporation.  A
Participant shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Corporation, or (ii) transfers among locations of the
Corporation or between the Corporation and any Subsidiary, or any
successor.  For purposes of Incentive
Stock Options, no such leave of absence may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or
contract.  The term “employment” means
employment with the Corporation, or a Subsidiary of the Corporation. Neither
service as a Director nor payment of a Director’s fee by the Corporation shall
be sufficient, by itself, to constitute “employment” with the Corporation, or a
Subsidiary of the Corporation.

(t)       “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and
any successor thereto.  Reference to any
provision of the Exchange Act shall be deemed to include successor provisions
thereto and regulations thereunder.

(u)      “Fair Market Value”
unless defined otherwise in the Plan, means, as of any determination date, the
value of a share of Common Stock, calculated as follows:

(i)  If the Common Stock is listed
on any established Stock Exchange or a national market system, including,
without limitation, the New York Stock Exchange, the Nasdaq National Market or
the Nasdaq SmallCap Market, the Fair Market Value shall be the closing sales
price for a share of such stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system for the date of determination,

 4
 

as reported in
The Wall Street Journal or such
other source as the Administrator deems reliable.

(ii)  If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value shall be the mean between the high bid and low
asked prices for a share of the Common Stock for the date of determination.

(iii)  In the absence of an established
market for the Common Stock, the Fair Market Value for the determination date
shall be calculated in good faith by the Administrator.

(v)      “Grant Date” means
the date on which the Administrator authorizes an Award, or such later date as
shall be designated by the Committee.

(w)      “Incentive Stock Option”
means an Option (or portion thereof) that is intended to meet the requirements
of Section 422 of the Code and which is designated as an Incentive Stock Option
by the Administrator.

(x)      “Non-Employee Director”
means a Director who is not an Employee.

(y)      “Nonqualified Stock Option”
means an Option (or portion thereof) that is not designated as an Incentive
Stock Option by the Administrator, or 
which is designated as an Incentive Stock Option by the Administrator
but fails to qualify as an Incentive Stock Option within the meaning of Section
422 of the Code.

(z)      “Option” means
either an Incentive Stock Option or a Nonqualified Stock Option.

(aa)    “Participant” means
an Employee (including an Employee who is a Director), a Director, or
Consultant, who is designated by the Administrator to participate in the Plan.

(bb)    “Performance Award”
means any Award of Performance Shares or Performance Units granted pursuant to
Article V.

(cc)    “Performance Measures” means
the measures of performance of the Corporation and its Subsidiaries that may be
used to determine a Participant’s entitlement to an Award under the Plan.  Such performance measures shall have the same
meanings as used in the Corporation’s financial statements, or, if such terms
are not used in the Corporation’s financial statements, they shall have the
meaning applied pursuant to generally accepted accounting principles, or as
used generally in the Corporation’s industry. 
Performance Measures shall be calculated with respect to the Corporation
and each Subsidiary consolidated therewith for financial reporting purposes or
such division or other business unit as may be selected by the
Administrator.  For purposes of the Plan,
the Performance Measures shall be calculated in accordance with generally
accepted accounting principles, but, unless

 5

 

otherwise
determined by the Administrator, prior to the accrual or payment of any Award
under this Plan for the same performance period and excluding the effect
(whether positive or negative) of any change in accounting standards or any
extraordinary, unusual or nonrecurring item, as determined by the
Administrator, occurring after the establishment of the performance goals.  Performance Measures shall be one or more of
the following, or a combination of any of the following, on an absolute or peer
group comparison, as determined by the Administrator:

·                                          earnings
(as measured by net income, operating income, operating income before interest,
EBIT, EBITA, EBITDA, EBITDA adjusted for asset management, pre-tax income, or
cash earnings, or earnings as adjusted by excluding one or more components of
earnings, including each of the above on a per share and/or segment basis);

·                                          sales/net
sales;

·                                          return
on net sales (as measured by net income, operating income, operating income
before interest, EBIT, EBITA, EBITDA, EBITDA adjusted for asset management,
pre-tax income, operating cash flow or cash earnings as a percentage of net
sales);

·                                          sales
growth;

·                                          cash
flow;

·                                          operating
cash flow;

·                                          free
cash flow;

·                                          discounted
cash flow;

·                                          working
capital;

·                                          market
capitalization;

·                                          cash
return on investment — CRI;

·                                          return
on capital;

·                                          return
on cost of capital;

·                                          shareholder
value;

·                                          return
on equity;

·                                          total
shareholder return;

·                                          return
on investment;

 

 6
 

 

·                                          economic
value added;

·                                          return
on designated assets/net assets;

·                                          stock
trading multiples (as measured vs. investment, net income, operating income,
operating income before interest, EBIT, EBITA, EBITDA, EBIDTA adjusted for
asset management, pre-tax income, cash earnings or operating cash flow);

·                                          stock
price;

·                                          attainment
of strategic or operational initiatives;

·                                          achievement
of operational goals, including but not limited to safety records, outage
frequencies, and capital and maintenance projects.

(dd)   “Performance Share” means any grant
pursuant to Article V and Section 5.2(b)(i).

(ee)   “Performance Unit”
means any grant pursuant to Article V and Section 5.2(b)(ii).

(ff)   “Plan”
means the TriMas Corporation 2006 Long Term Equity Incentive Plan, the terms of
which are set forth herein, and any amendments thereto.

(gg)   “Public Trading Date”
means the first date upon which Common Stock of the Corporation is listed (or
approved for listing) upon notice of issuance on any Stock Exchange or
designated (or approved for designation) upon notice of issuance as a national
market security on an interdealer quotation system.

(hh)   “Restriction Period”
means the period of time during which a Participant’s Restricted Stock or
Restricted Stock Unit is subject to restrictions and is nontransferable.

(ii)   “Restricted Stock” means
Common Stock granted pursuant to Article IV that is subject to a Restriction
Period.

(jj)   “Restricted Stock Unit”
means a right granted pursuant to Article IV to receive Restricted Stock or an
equivalent value in cash.

(kk)   “Securities Act” means
the Securities Act of 1933, as amended.

(ll)   “Stock Appreciation Right”
means the right to receive a cash or Common Stock payment from the Corporation,
in accordance with Article III of the Plan.

 

 7
 

 

(mm)   “Stock Exchange”
means the principal national securities exchange on which the Common Stock is
listed for trading, or, if the Common Stock is not listed for trading on a
national securities exchange, such other recognized trading market or quotation
system upon which the largest number of shares of Common Stock has been traded
in the aggregate during the last twenty (20) days before a Grant Date, or date
on which an Option is exercised, whichever is applicable.

(nn)   “Subsidiary” means
a corporation or other entity defined in Code Section 424(f).

(oo)   “Substitute Awards”
means Awards granted or shares issued by the Corporation in assumption of, or
in substitution or exchange for, Awards previously granted, or the right or
obligation to make future Awards, by a company acquired by the Corporation or
any Subsidiary or with which the Corporation or any Subsidiary combines.

(pp)   “Vested”
or “Vesting” means the extent to which an
Award granted or issued hereunder has become exercisable or any applicable
Restriction Period has terminated in accordance with the Plan and the terms of
any respective Agreement pursuant to which such Award was granted or issued.

1.5          Administration.

(a)      Unless
and until the Board delegates administration to a Committee described below,
the Plan shall be administered by the Board. 
The Board may delegate administration of the Plan to a Committee or
Committees of one or more members of the Board, and the term “Committee” shall
refer to any person or persons to whom such authority has been delegated.  If administration is delegated to a
Committee, the Committee shall have the powers possessed by the Board for
purposes of administering the Plan, including the power to delegate to a
subcommittee any of the administrative powers that the Committee is authorized
to exercise, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.

(b)      Notwithstanding
the foregoing, from and after the Public Trading Date, a Committee of the Board
shall administer the Plan, and the Committee shall consist solely of two or
more Non-Employee Directors, each of whom is both an “outside director” within
the meaning of Section 162(m) of the Code, and a “non-employee director” within
the meaning of Rule 16b-3 of the Exchange Act, and qualifies as “independent”
within the meaning of any applicable Stock Exchange listing requirements.  The fact that a Committee member shall fail
to qualify under any of these requirements shall not invalidate any Award made
by the Committee, if the Award is otherwise validly made under the Plan.

(c)      Within
the scope of its authority, the Board or the Committee may (i) delegate to a
committee of one or more members of the Board who are not “outside directors”
within the meaning of Section 162(m) of the Code, the authority to

 

 8
 

 

grant Awards
under the Plan to eligible persons who are either (A) not then “covered
employees,” within the meaning of Section 162(m) of the Code and are not
expected to become “covered employees” at the time of income recognition
resulting from such Award, or (B) not persons with respect to whom the
Corporation wishes to comply with Section 162(m) of the Code; and/or (ii)
delegate to a Committee of one or more members of the Board who are not “non-employee
directors,” within the meaning of Rule 16b-3 of the Exchange Act, the authority
to grant Awards under the Plan to eligible persons who are not then subject to
Section 16 of the Exchange Act. 
Notwithstanding the foregoing, the full Board, acting by a majority of
its members in office, shall conduct the general administration of the Plan
with respect to Awards granted to Non-Employee Directors.

(d)      Subject
to the provisions of the Plan and the specific duties delegated by the Board to
the Committee, the Administrator shall have the authority in its sole
discretion to interpret the Plan, prescribe, amend, and rescind rules and
regulations relating to the Plan, and make all other determinations necessary or
advisable for its administration.  The
decision of the Administrator on any question concerning the interpretation of
the Plan or its administration with respect to any Award granted under the Plan
shall be final and binding upon all Participants.  No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any Award hereunder.

(e)      In
addition to any other powers set forth in the Plan, and subject to the
provisions of the Plan, and the requirements of Code Section 162(m), if
applicable, the Administrator shall have the full and final power and
authority, in its discretion to:

(i)            amend, modify, or
cancel any Award, or to waive any restrictions or conditions applicable to any
Award or any shares acquired pursuant thereto;

(ii)           subject to Code
Section 409A, accelerate, continue, or defer the exercisability or Vesting of
any Award or any shares acquired pursuant thereto;

(iii)          authorize, in
conjunction with any applicable deferred compensation plan of the Corporation,
that the receipt of cash or Common Stock subject to any Award under this Plan
may be deferred under the terms and conditions of such deferred compensation
plan;

(iv)          determine the terms
and conditions of Awards granted to Participants; and

(v)           establish such other
Awards, besides those specifically enumerated in the Plan, which the Committee
determines are consistent with the Plan’s purposes.

 

 9
 

 

(f)       To
assure the viability of Awards granted to Participants in foreign countries,
the Administrator may provide for such special terms as it may consider
necessary or appropriate to accommodate differences in local law, tax policy,
or custom.  Further, the Administrator
may approve such supplements to, or amendments, restatements, or alternative versions
of, the Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of the Plan as in effect for any other
purpose; provided, that no such
supplements, amendments, restatements, or alternative versions shall increase
the share limitations contained in the Plan.

1.6          Participants.  Participants in the Plan shall be such
Employees (including Employees who are Directors), Non-Employee Directors and
Consultants of the Corporation and its Subsidiaries as the Administrator in its
sole discretion may select from time to time to receive Awards under the
Plan.  The Administrator may grant Awards
to an individual upon the condition that the individual shall become an
Employee, Non-Employee Director or Consultant of the Corporation or of a
Subsidiary, provided that the Award shall be deemed to be granted only on the
date that the individual becomes an Employee, 
Non-Employee Director or Consultants, as applicable.

1.7          Stock.

(a)      The
Corporation has reserved 1,000,000 shares of the Corporation’s Common Stock for
issuance pursuant to stock-based Awards, which amount includes shares that were
forfeited or not issued under the Corporation’s 2002 Long Term Equity Incentive
Plan.  Up to 500,000 of the reserved
shares may be granted as Incentive Stock Options under the Plan.  All provisions in this Section 1.7 shall be
adjusted, as applicable, in accordance with Article X.

(b)      Each
share of Common Stock subject to an Award other than (i) an Option; (ii) a
Stock Appreciation Right; (iii) an Award under which the Corporation receives
monetary consideration equal to the Fair Market Value of the shares subject to
the Award; (iv) a Common Stock-based Award based on appreciation in the Fair
Market Value of the Common Stock; or (v) compensation to Non-Employee Directors
pursuant to Article VIII, shall be counted against the aggregate reserved share
limit in paragraph (a) above, as two (2) shares instead of one (1).

(c)      If
any shares subject to an Award are forfeited, cancelled, expire or otherwise
terminate without issuance of such shares, or any Award is settled for cash or
otherwise does not result in the issuance of all or a portion of the shares subject
to such Award, the shares shall, to the extent of such forfeiture,
cancellation, expiration, termination, cash settlement or non-issuance, again
be available for Awards under the Plan.

(d)      In
the event that (i) any Option or other Award granted hereunder is exercised
through the tendering of shares or by the withholding of shares by the
Corporation, or (ii) withholding tax liabilities arising from such Option or
other Award are satisfied by the tendering of shares or by the withholding of
shares by the

 

 10

Corporation, then only the number of shares issued net
of the shares tendered or withheld shall be counted for purposes of determining
the maximum number of shares available for issuance under the Plan.

(e)      Substitute
Awards shall not reduce the shares reserved for issuance under the Plan or
authorized for grant to a Participant in any fiscal year.  Additionally, in the event that a company
acquired by the Corporation or any Subsidiary or with which the Corporation or
any Subsidiary combines has shares available under a pre-existing plan approved
by stockholders and not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the
shares authorized for issuance under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees,
Non-Employee Directors or an affiliate of the Corporation or its Subsidiaries
prior to such acquisition or combination.

1.8          Repricing.  Without the affirmative vote of the holders
of a majority of the shares of Common Stock cast in person or by proxy at a
meeting of the stockholders of the Corporation at which a quorum representing a
majority of all outstanding shares is present or represented by proxy, neither
the Board nor the Administrator shall approve a program providing for either
(a) the cancellation of outstanding Options and/or Stock Appreciation Rights
and the grant in substitution therefore of any new Awards under the Plan having
a lower exercise price than the Fair Market Value of the underlying Common
Stock on the original Grant Date, or (b) the amendment of outstanding Options
and/or Stock Appreciation Rights to reduce the exercise price thereof below the
Fair Market Value of the underlying Common Stock on the original Grant
Date.  This Section shall not be
construed to apply to “issuing or assuming a stock option in a transaction to
which section 424(a) applies,” within the meaning of Section 424 of the Code.

II.  STOCK OPTIONS

2.1          Grant
of Options. 
The Administrator, at any time and from time to time, subject to the
terms and conditions of the Plan, may grant Options to such Participants and
for such number of shares of Common Stock as it shall designate.  Any Participant may hold more than one Option
under the Plan and any other plan of the Corporation or Subsidiary.  The Administrator shall determine the general
terms and conditions of exercise, which shall be set forth in a Participant’s
Agreement.  No Option granted hereunder
may be exercised after the tenth (10th)
anniversary of the Grant Date.  The
Administrator may designate any Option granted as either an Incentive Stock
Option or a Nonqualified Stock Option, or the Administrator may designate a
portion of an Option as an Incentive Stock Option or a Nonqualified Stock
Option.  Unless otherwise provided in a
Participant’s Agreement, Options granted following a Public Trading Date are
intended

 11
 

to satisfy the requirements of Code Section 162(m) and
the regulations promulgated thereunder, to the extent applicable.

2.2          Incentive
Stock Options. 
Any Option intended to constitute an Incentive Stock Option shall comply
with the requirements of this Section 2.2. 
An Incentive Stock Option only may be granted to an Employee.  No Incentive Stock Option shall be granted
with an exercise price below the Fair Market Value of Common Stock on the Grant
Date nor with an exercise term that extends beyond ten (10) years from the
Grant Date.  An Incentive Stock Option
shall not be granted to any Participant who owns (within the meaning of Code
Section 424(d)) stock of the Corporation or any Subsidiary possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Corporation or a Subsidiary unless, at the Grant Date, the exercise price
for the Option is at least one hundred and ten percent (110%) of the Fair
Market Value of the shares subject to the Option and the Option, by its terms,
is not exercisable more than five (5) years after the Grant Date.  The aggregate Fair Market Value of the
underlying Common Stock (determined at the Grant Date) as to which Incentive
Stock Options granted under the Plan (including a plan of a Subsidiary) may
first be exercised by a Participant in any one calendar year shall not exceed
$100,000.  To the extent that an Option
intended to constitute an Incentive Stock Option shall violate the foregoing
$100,000 limitation (or any other limitation set forth in Code Section 422),
the portion of the Option that exceeds the $100,000 limitation (or violates any
other Code Section 422 limitation) shall be deemed to constitute a Nonqualified
Stock Option.

2.3          Option
Price.  The
Administrator shall determine the per share exercise price for each Option
granted under the Plan.  No Option may be
granted with an exercise price below one hundred percent (100%) of the Fair
Market Value of Common Stock on the Grant Date.

2.4          Payment
for Option Shares.

(a)      The
purchase price for shares of Common Stock to be acquired upon exercise of an
Option granted hereunder shall be paid in full in cash or by personal check,
bank draft or money order at the time of exercise; provided, however, that in
lieu of such form of payment, unless otherwise provided in a Participant’s
Agreement, payment may be made by (i) delivery to the Corporation of
outstanding shares of Common Stock that have been held at least six (6) months,
on such terms and conditions as may be specified in the Participant’s
Agreement; (ii) by delivery to the Corporation of a properly executed exercise
notice, acceptable to the Corporation, together with irrevocable instructions
to the Participant’s broker to deliver to the Corporation sufficient cash to
pay the exercise price and any applicable income and employment withholding
taxes, in accordance with a written agreement between the Corporation and the
brokerage firm; (iii) delivery of other consideration approved by the
Administrator having a Fair Market Value on the exercise date equal to the
total purchase price; (iv) other means determined by the Administrator; or (v)
any combination of the foregoing.  Shares
of Common Stock surrendered upon exercise shall be valued at the Fair Market
Value of the Corporation’s Common Stock on the date of exercise, and the shares
shall be surrendered to the Corporation.

 12
 

(b)      Notwithstanding
the foregoing, an Option may not be exercised by delivery to or withholding by
the Corporation of shares of Common Stock to the extent that such delivery or
withholding (i) would constitute a violation of the provisions of any law or
regulation (including the Sarbanes-Oxley Act of 2002), or (ii) if there is a
substantial likelihood that the use of such form of payment would result in
adverse accounting treatment to the Corporation under generally accepted
accounting principles.  Until the book
entry has been made representing the shares that have been purchased, and such
shares have been deposited with the appropriate registered book-entry
custodian, he or she shall possess no rights as a record holder with respect to
any such shares.

(c)      The
Administrator may at any time offer to buy-out for a payment in cash or shares,
an Option previously granted, based on such terms and conditions as the
Administrator shall, in its sole discretion, establish and communicate to the
Participant at the time that such offer is made.

III.  STOCK APPRECIATION RIGHTS

3.1          Grant
of Stock Appreciation Rights.  Stock Appreciation Rights may be granted,
held and exercised in such form and upon such general terms and conditions as
determined by the Administrator on an individual basis.  A Stock Appreciation Right may be granted to
a Participant with respect to such number of shares of Common Stock of the
Corporation as the Administrator may determine. 
No Stock Appreciation Right shall be granted with an exercise term that
extends beyond ten (10) years from the Grant Date.

3.2          Exercise
Price.  The
Administrator shall determine the per share exercise price for each Stock
Appreciation Right granted under the Plan; provided, however, that the exercise
price of a Stock Appreciation Right shall not be less than one hundred percent
(100%) of the Fair Market Value of the shares of Common Stock covered by the
Stock Appreciation Right on the Grant Date.

3.3          Exercise
of Stock Appreciation Rights.  A Stock Appreciation Right shall be deemed
exercised upon receipt by the Corporation of written notice of exercise from
the Participant.  The Administrator shall
specify in a Participant’s Agreement whether payment shall be made in cash or
shares of Common Stock, or any combination thereof.

3.4          Stock
Appreciation Right Payment.  Upon exercise of a Stock Appreciation Right,
a Participant shall be entitled to payment from the Corporation, in cash,
shares, or partly in each (as determined by the Administrator in accordance
with any applicable terms of the Agreement), of an amount equal to the
difference between (a) the aggregate Fair Market Value on the exercise date for
the specified number of shares being exercised, and (b) the aggregate exercise
price for the specified number of shares being exercised.

 13
 

3.5          Maximum
Stock Appreciation Right Amount Per Share.  The Administrator may, at its sole
discretion, establish (at the time of grant) a maximum amount per share which
shall be payable upon the exercise of a Stock Appreciation Right, expressed as
a dollar amount.

IV.  RESTRICTED STOCK AND UNITS

4.1          Grant
of Restricted Stock and Restricted Stock Units.  Subject to the terms and conditions of the
Plan, the Administrator, at any time and from time to time, may grant shares of
Restricted Stock and Restricted Stock Units under the Plan to such Participants
and in such amounts as it shall determine.

4.2          Restricted
Stock Agreement. 
Each grant of Restricted Stock or Restricted Stock Units shall be
evidenced by an Agreement that shall specify the terms of the restrictions,
including the Restriction Period, or periods, the number of Common Stock shares
subject to the grant, or units, the purchase price for the shares of Restricted
Stock, if any, the form of consideration that may be used to pay the purchase
price of the Restricted Stock, including those specified in Section 2.4, and
such other general terms and conditions, including performance goals, as the
Administrator shall determine.

4.3          Transferability.  Except as provided in this Article IV and
Section 11.3 of the Plan, the shares of Common Stock subject to an Award of
Restricted Stock or Restricted Stock Units granted hereunder may not be
transferred, pledged, assigned, or otherwise alienated or hypothecated until
the termination of the applicable Restriction Period or for such period of time
as shall be established by the Administrator and specified in the applicable
Agreement, or upon the earlier satisfaction of other conditions as specified by
the Administrator in its sole discretion and as set forth in the applicable
Agreement.

4.4          Other
Restrictions. 
The Administrator shall impose such other restrictions on any shares of
Common Stock subject to an Award of Restricted Stock or Restricted Stock Units
under the Plan as it may deem advisable including, without limitation,
restrictions under applicable Federal or State securities laws, which the
Administrator may communicate to the Corporation’s Stock Transfer Agent.  The Administrator shall have the discretion
to waive the applicable Restriction Period with respect to all or any part of
the Common Stock subject to an Award of Restricted Stock or Restricted Stock
Units that has not been granted under Code Section 162(m).

4.5          Voting
Rights. 
During the Restriction Period, Participants holding shares of Common Stock
subject to a Restricted Stock Award may exercise full voting rights with
respect to the Restricted Stock.

4.6          Dividends
and Dividend Equivalents.

(a)      Except
as set forth below or in a Participant’s Agreement, during the Restriction
Period, a Participant shall be entitled to receive all dividends and other
distributions paid with respect to shares of Common Stock subject to an Award
of Restricted Stock.  If any dividends or
distributions are paid in shares of Common

 14
 

Stock during the
Restriction Period applicable to an Award of Restricted Stock, the dividend or
other distribution shares shall be subject to the same restrictions on
transferability as the shares of Common Stock with respect to which they were
paid.

(b)      The
Administrator, in its discretion, may provide in the Agreement evidencing any
Restricted Stock Unit that the Participant shall be entitled to receive
Dividend Equivalents with respect to the payment of cash dividends on Common
Stock having a record date prior to the date on which Restricted Stock Units
held by such Participant are settled. 
Such Dividend Equivalents, if any, shall be paid by crediting the
Participant with additional whole Restricted Stock Units as of the date of
payment of such cash dividends on Common Stock. 
The number of additional Restricted Stock Units (rounded to the nearest
whole number) to be so credited shall be determined by dividing (i) the amount
of cash dividends paid on such date with respect to the number of shares of
Common Stock represented by the Restricted Stock Units previously credited to
the Participant, by (ii) the Fair Market Value per share of Common Stock on
such date.  Such additional Restricted
Stock Units shall be subject to the same terms and conditions and shall be
settled in the same manner and at the same time (or as soon thereafter as
practicable) as the Restricted Stock Units originally subject to the Restricted
Stock Unit.  In the event of a dividend
or distribution paid in shares of Common Stock or any other adjustment made
upon a change in the capital structure of the Corporation as described in
Article X, appropriate adjustments shall be made in the Participant’s
Restricted Stock Unit so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would be
entitled by reason of the shares of Common Stock issuable upon settlement of
the Restricted Stock Unit, and all such new, substituted or additional
securities or other property shall be immediately subject to the same
restrictions as are applicable to the Restricted Stock Unit.

4.7          Settlement
of Restricted Stock Units.  If a Restricted Stock Unit is payable in
Common Stock, the Corporation shall issue to a Participant on the date on which
Restricted Stock Units subject to the Participant’s Restricted Stock Unit Vest
or on such other date determined by the Administrator, in its discretion, and
set forth in the Agreement, one (1) share of Common Stock and/or any other new,
substituted or additional securities or other property pursuant to an
adjustment described in Section 10.1 for each Restricted Stock Unit then
becoming Vested or otherwise to be settled on such date, subject to the
withholding of applicable taxes.

4.8          Restricted Stock Unit Bonus Deferral Awards.
 A
Participant designated by the Administrator who is among a select group of
highly compensated management Employees, may irrevocably elect, prior to a date
specified by the Administrator and in compliance with Code Section 409A, to
defer receipt of any cash bonus or cash Annual Incentive Award payable by the
Corporation (subject to any minimum or maximum limitations imposed by the
Committee), which shall be credited to the Participant in the form of Restricted
Stock Units, subject to such terms and other conditions established by the
Administrator as set forth in the associated Agreement.  In consideration for foregoing bonus or
Annual Incentive Award compensation, the dollar

 

 15

amount
deferred by a Participant may be increased by the Administrator up to sixty
percent (60%) (or such lesser percentage specified by the Administrator), for
purposes of determining the number of Restricted Stock Units in the Participant’s
Award.  The electing Participant shall be
credited, as of the date specified in the Agreement, with a  number of Restricted Stock Units, equal to
the amount of the deferral (increased by any Administrator match), divided by
the Fair Market Value on the applicable date. 
The Restricted Stock Units under Section 4.8 shall be settled in shares
of the Corporation’s Common Stock.

V.  PERFORMANCE AWARDS

5.1          Grant of
Performance Awards.  The Administrator, at its discretion, may
grant Performance Awards to Participants and may determine, on an individual or
group basis, the performance goals to be attained pursuant to each Performance
Award.

5.2          Terms of
Performance Awards.

(a)      Performance
Awards shall consist of rights to receive cash, Common Stock, other property or
a combination of each, if designated performance goals are achieved.  The terms of a Participant’s Performance
Award shall be set forth in a Participant’s Agreement.  Each Agreement shall specify the performance
goals, which may include the Performance Measures, applicable to a particular
Participant or group of Participants, the period over which the targeted goals
are to be attained, the payment schedule if the goals are attained, and any
other general terms as the Administrator shall determine and conditions applicable
to an individual Performance Award.  The
Administrator, at its discretion, may waive all or part of the conditions,
goals and restrictions applicable to the receipt of full or partial payment of
a Performance Award that has not been granted pursuant to Code Section 162(m).

(b)      Performance
Awards may be granted as Performance Shares or Performance Units, at the
discretion of the Administrator.

(i)            In the case of Performance Shares,
the Participant shall receive Common Stock, restricted from transfer prior to
the satisfaction of the designated performance goals and restrictions, as
determined by the Administrator, specified in the Participant’s Agreement and
communicated by the Administrator to the Corporation’s Stock Transfer
Agent.  Prior to satisfaction of the
performance goals and restrictions, the Participant shall be entitled to vote
the Performance Shares.  Further, any
dividends paid on such shares during the performance period automatically shall
be reinvested on behalf of the Participant in additional Performance Shares
under the Plan, and such additional shares shall be subject to the same
performance goals and restrictions as the other shares under the Performance
Share Award.

(ii)           In the case of Performance Units, the
Participant shall receive an Agreement from the Administrator that specifies
the performance goals and restrictions that must be satisfied before the
Corporation shall issue the 

 16
 

payment, which may be cash, a designated
number of shares of Common Stock, other property, or a combination thereof.

VI.  ANNUAL INCENTIVE AWARDS

6.1          Grant of Annual
Incentive Awards.

(a)      The
Administrator, at its discretion, may grant Annual Incentive Awards to such
Participants as it may designate from time to time.  The terms of a Participant’s Annual Incentive
Award shall be set forth in the Participant’s individual Agreement.  Each Agreement shall specify such general
terms and conditions as the Administrator shall determine.

(b)      The determination
of Annual Incentive Awards for a given year may be based upon the attainment of
specified levels of Corporation or Subsidiary performance as measured by
pre-established, objective performance criteria determined at the discretion of
the Administrator, including any or all of the Performance Measures.

(c)      The Administrator
shall (i) select those Participants who shall be eligible to receive an Annual
Incentive Award, (ii) determine the performance period, (iii) determine target
levels of performance, and (iv) determine the level of Annual Incentive Award
to be paid to each selected Participant upon the achievement of each
performance level.  The Administrator
generally shall make the foregoing determinations prior to the commencement of
services to which an Annual Incentive Award relates (or, following a Public
Trading Date, within the permissible time-period established under Code
Section 162(m)), to the extent applicable, and while the outcome of the
performance goals and targets is uncertain.

6.2          Payment of Annual
Incentive Awards.

(a)      Annual Incentive
Awards shall be paid in cash, shares of Common Stock or other property, at the
discretion of the Administrator. 
Payments shall be made following a determination by the Administrator
that the performance targets were attained and shall be made within two and a half
(21⁄2) months after the later of the end of the fiscal or calendar year in which
the Annual Incentive Award is earned.

(b)      The amount of an
Annual Incentive Award to be paid upon the attainment of each targeted level of
performance shall equal a percentage of a Participant’s base salary for the
fiscal year, a fixed dollar amount, or such other formula, as determined by the
Administrator.

VII.  CODE SECTION 162(m) AWARDS

7.1          Awards Granted
Under Code Section 162(m).  All Options and Stock Appreciation Right
Awards are intended to satisfy Code Section 162(m), to the extent
applicable.  Following a Public Trading
Date, the Committee, at its discretion, may

 17
 

designate that
a Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit
or Annual Incentive Award shall be granted pursuant to Code Section
162(m).  Such an Award must comply with
the following additional requirements, which shall control over any other
provision that pertains to such Award under Articles IV, V and VI; provided,
however, that the limitations set forth below shall not apply prior to a the
Public Trading Date and, following the 
Public Trading Date, the limitations shall not apply until the
termination of the reliance period described in Treasury Regulation
1.162-27(f), which shall occur upon the earliest of:  (a) the first material modification of the
Plan (including any increase in the number of shares reserved for issuance
under the Plan in accordance with Section 1.7 hereof); (ii) the issuance of all
of the shares of Common Stock reserved for issuance under the Plan; (iii) the
expiration of the Plan; (iv) the first meeting of stockholders at which
Directors of the Corporation are to be elected that occurs after the close of
the third calendar year in which occurred the Public Trading Date; or (v) such
other date required by Code Section 162(m) and the rules and regulations
promulgated thereunder.

(a)      Each Code Section
162(m) Award that is Restricted Stock, a Restricted Stock Unit, Performance
Share, Performance Unit or Annual Incentive Award, shall be based upon the
attainment of specified levels of pre-established, objective Performance
Measures that are intended to satisfy the performance based compensation
requirements of Code Section 162(m) and the regulations promulgated
thereunder.  Further, at the discretion
of the Administrator, an Award also may be subject to goals and restrictions in
addition to the Performance Measures.

(b)      For each Code
Section 162(m) Award, that is Restricted Stock, a Restricted Stock Unit, Performance
Share, Performance Unit or Annual Incentive Award, the Administrator shall (i)
select the Participant who shall be eligible to receive the Award, (ii)
determine the applicable performance period, (iii) determine the target levels
of the Corporation or Subsidiary Performance Measures, and (iv) determine the
number of shares of Common Stock or cash or other property (or combination
thereof) subject to an Award to be paid to each selected Participant.  The Administrator shall make the foregoing
determinations prior to the commencement of services to which an Award relates
(or within the permissible time period established under Code Section 162(m))
and while the outcome of the performance goals and targets is uncertain.

7.2          Attainment of Code
Section 162(m) Goals.

(a)      After each
performance period, the Administrator shall certify, in writing: (i)  if the Corporation has attained the
performance targets, and (ii) the number of shares pursuant to the Award that
are to become freely transferable, if applicable, or the cash or other property
payable under the Award.  The
Administrator shall have no discretion to waive all or part of the conditions,
goals and restrictions applicable to the receipt of full or partial payment of
an Award except in the case of the death or Disability of a Participant.

(b)      Notwithstanding
the foregoing, the Administrator may, in its discretion, reduce any Award based
on such factors as may be determined by the 

 18
 

Administrator, including, without limitation,
a determination by the Administrator that such a reduction is appropriate in
light of pay practices of competitors, or the performance of the Corporation, a
Subsidiary or a Participant relative to the performance of competitors, or
performance with respect to the Corporation’s strategic business goals.

7.3          Individual Code
Section 162(m) Participant Limitations.  Subject to adjustment as provided in Section
10.1, no Participant in any one fiscal year of the Corporation may be granted
(a) Options or Stock Appreciation Rights with respect to more than 350,000
shares of Common Stock; (b) Restricted Stock or Restricted Stock Units under
Code Section 162(m) that are denominated in shares of Common Stock with respect
to more than 175,000 shares; (c) Performance Awards under Code Section 162(m)
that are denominated in shares of Common Stock with respect to more than
100,000 shares; and (d) an Annual Incentive Award under Code Section 162(m)
denominated in shares of Common Stock with respect to more than 100,000 shares.  The maximum dollar value payable to any
Participant in any one (1) fiscal year of the Corporation with respect to
Restricted Stock Units, Performance Awards or Annual Incentive Awards under
Code Section 162(m) that are valued in property other than Common Stock is the
lesser of $6,000,000 or five (5) times the Participant’s base salary for the
fiscal year.  If an Award is cancelled,
the cancelled Award shall continue to be counted towards the applicable
limitations.

VIII.  NON-EMPLOYEE DIRECTOR COMPENSATION

8.1          Annual Retainer
and Meeting Fees. 
Non-Employee Directors who are elected or appointed to the Board receive
an annual retainer and fee for each meeting attended, paid quarterly, in a
amount determined by the Board from time to time.  The fees may be paid in cash or Common Stock
with a Fair Market Value equal to the cash, as elected in advance by each
Director.

8.2          Deferral Election.  Each Non-Employee Director may elect to defer
all or a portion of his or her annual retainer and meeting fees by completing
and submitting a deferred compensation agreement prior to January 1 of the
first calendar year for which the deferred compensation agreement is to be
effective.  The amount of compensation to
be deferred and the allocation between cash and shares of Company Common Stock
shall be specified in the deferred compensation agreement.  Elections to defer compensation, and to
allocate it to cash or shares of Company Common Stock, are irrevocable, except
as otherwise provided herein.  The number
of shares, if any, shall be calculated by dividing (a) the amount the
Non-Employee Director elects to allocate to Common Stock by (b) the fair market
value (FMV) of a share of Common Stock on the date the compensation otherwise
would have been paid.  Any fractional
units shall be deemed allocated to cash.

8.3          Change in Deferral
Election. 
An election to defer compensation shall remain in effect for future
calendar years unless changed in accordance with this Section.  A Non-Employee Director who wishes to change
an election to defer compensation may do so at any time by notifying the
Administrator in writing prior to January 1 of the year for which the change in
election is to be effective.

 19
 

 

8.4          Crediting of
Deferred Compensation.  Amounts attributable to the elective
deferrals pursuant to this Article VIII shall be credited to the Non-Employee
Director’s Account as soon as practicable after the time such amounts, absent
deferral, would have been paid to the Non-Employee Director.  Common Stock in the Account shall be adjusted
in accordance with Article X for certain corporate events, including stock
splits, subdivisions, combinations or reclassifications of Common Stock, and
increased from time to time by dividends on the shares held in the Account.

8.5          Earnings Credit.  Interest at the Earnings Rate on cash in the
Account shall be credited monthly to the Non-Employee Director’s Account.  Earnings shall continue to be credited to the
Non-Employee Director’s Account until the entire balance of the Account is
distributed to the Non-Employee Director or his or her Beneficiary, as
applicable.

8.6          Form and Timing of
Distributions.

A Non-Employee Director’s Account shall be distributed
in cash and/or Common Stock, reflecting their relative values in the
Non-Employee’s Account at the time of the payment.  For example, if the FMV of Common Stock is
$25,000 and the value of a Non-Employee Director’s entire Account, including
Common Stock is $100,000, then 25% of the payment will be in Common Stock.

(a)      Payment shall be
made in the form specified in the Non-Employee Director’s distribution election
agreement and commence as soon as practicable following the earliest of:

(i)            the date specified in the
Non-Employee Director’s distribution election agreement;

(ii)           the Non-Employee Director’s death;

(iii)          the Non-Employee Director’s
Disability;

(iv)          a Change in Control or

(v)           the Non-Employee Director’s
separation from service with the Corporation.

The foregoing elections relating to the time
and form of distribution must be made at the same time as the Non-Employee
Director’s deferral election, as set forth in the deferred compensation
agreement, and may be made separately with respect to deferrals for each
year.  If a Non-Employee Director elects
to receive a distribution from his or her Account in annual installments, the
amount of each annual installment shall be calculated by dividing the
Non-Employee Director’s Account balance at the time of payment by the number of
remaining years over which the Account balance shall be paid.  Notwithstanding the foregoing, if required by
Code Section 409A, payment of a Non-Employee Director’s benefits

 20

 

shall be postponed for six months after his
or her separation from service, any postponed payments shall be made upon the
expiration of the six-month period.

(b)      Notwithstanding
any election as to the timing or form of distributions pursuant to Section 8.6(a),
a Non-Employee Director shall receive a distribution of his or her Account upon
a Change in Control.

IX.  TERMINATION OF EMPLOYMENT OR SERVICES

9.1          Options and Stock
Appreciation Rights.

(a)      If, prior to the
date when an Option or Stock Appreciation Right first becomes Vested, a
Participant terminates employment or services for any reason, the Participant’s
right to exercise the Option or Stock Appreciation Right shall terminate and
all rights thereunder shall cease, unless provided otherwise in a Participant’s
Agreement.

(b)      If, on or after
the date when an Option or Stock Appreciation Right first becomes Vested, a
Participant terminates employment or services for any reason other than death
or Disability, the Participant shall have the right, within the earlier of (i)
the expiration of the Option or Stock Appreciation Right, and (ii) the period
of time designated in the Participant’s Agreement, to exercise the Option or
Stock Appreciation Right to the extent that it was exercisable and unexercised
on the date of the Participant’s termination of employment or services (taking
into account any Vesting that may occur in connection with such termination),
subject to any other limitation on the exercise of the Option or Stock
Appreciation Right in effect on the date of exercise.  Provided, however, that the beneficial tax
treatment of an Incentive Stock Option may be forfeited if an Option is
exercised more than three (3) months after termination of employment.  The Administrator may designate in a
Participant’s Agreement that an Option or Stock Appreciation Right shall
terminate at an earlier or later time than set forth above.

(c)      If, on or after
the date when an Option or Stock Appreciation Right first becomes Vested, a
Participant terminates employment or services due to death while an Option or
Stock Appreciation Right is still exercisable, the person or persons to whom
the Option or Stock Appreciation Right shall have been transferred by will or
the laws of descent and distribution, shall have the right within the exercise
period specified in the Participant’s Agreement to exercise the Option or Stock
Appreciation Right to the extent that it was exercisable and unexercised on the
Participant’s date of death (taking into account any Vesting that may occur in
connection with the death), subject to any other limitation on exercise in
effect on the date of exercise. 
Provided, however, that the beneficial tax treatment of an Incentive
Stock Option may be forfeited if the Option is exercised more than one (1) year
after a Participant’s date of death.

(d)      If, on or after
the date when an Option or Stock Appreciation Right first becomes Vested, a
Participant terminates employment or services due to

 21
 

Disability,
the Participant shall have the right, within the exercise period specified in
the Participant’s Agreement, to exercise the Option or Stock Appreciation Right
to the extent that it was exercisable and unexercised on the date of the
Participant’s termination of employment or services due to Disability (taking into
account any Vesting that may occur in connection with such termination),
subject to any other limitation on the exercise of the Option or Stock
Appreciation Right in effect on the date of exercise.  If the Participant dies after termination of
employment or services, as applicable, while the Option or Stock Appreciation
Right is still exercisable, the Option or Stock Appreciation Right shall be
exercisable in accordance with the terms of paragraph (c), above

(e)      The
Administrator, at the time of a Participant’s termination of employment or
services, may accelerate a Participant’s right to exercise an Option or,
subject to Code Section 409A, may extend an Option term.

(f)       If a Participant
terminates employment or services due to Cause, any outstanding Option or Stock
Appreciation Right held by the Participant shall terminate upon the date of the
Participant’s termination of employment or services, regardless of whether the
Option or Stock Appreciation Right was then Vested and/or exercisable with
respect to any shares.

(g)      Shares subject to
Options and Stock Appreciation Rights that are not exercised in accordance with
the provisions of (a) through (e) above shall expire and be forfeited by the
Participant as of their expiration date and shall become available for new
Awards under the Plan as of such date.

9.2          Restricted Stock
and Restricted Stock Units.  If a Participant terminates employment for
any reason, the Participant’s right to shares of Common Stock subject to a
Restricted Stock or Restricted Stock Unit Award that are still subject to a
Restriction Period automatically shall terminate and be forfeited by the
Participant (or, if the Participant was required to pay a purchase price for
the Restricted Stock, other than for the performance of services, the
Corporation shall have the option to repurchase any shares acquired by the
Participant which are still subject to the Restriction Period for the purchase
price paid by the Participant) and, subject to Section 1.7, said shares shall
be available for new Awards under the Plan as of such termination date.  Provided, however, that the Administrator, in
its sole discretion, may provide in a Participant’s Agreement for the
continuation of a Restricted Stock Award or Restricted Stock Unit after a
Participant terminates employment or services or may waive or, subject to Code
Section 409A, change the remaining restrictions or add additional restrictions,
as it deems appropriate.  The
Administrator shall not waive any restrictions on a Code Section 162(m)
Restricted Stock or Restricted Stock Unit Award, but the Administrator may
provide in a Participant’s Code Section 162(m) Restricted Stock or Restricted
Stock Unit Agreement or otherwise that upon the Employee’s termination of
employment due to (a) death, (b) Disability, or (c) involuntary termination by
the Corporation without cause (as determined by the Administrator) prior to the
termination of the Restriction Period, that the performance goals and
restrictions shall be deemed to have been satisfied on terms determined by the
Administrator.

 22
 

 

9.3          Performance Awards.  Performance Awards shall expire and be
forfeited by a Participant upon the Participant’s termination of employment or
services for any reason, and, subject to Section 1.7, shall be available for
new Awards under the Plan as of such termination date.  Provided, however, that the Administrator, in
its discretion, may provide in a Participant’s Agreement or, subject to Code
Section 409A, may provide otherwise, for the continuation of a Performance
Award after a Participant terminates employment or services or may waive or
change all or part of the conditions, goals and restrictions applicable to such
Performance Award.  Notwithstanding the
foregoing, the Administrator shall not waive any restrictions on a Code Section
162(m) Performance Award, but the Administrator may provide in an Employee’s
Code Section 162(m) Performance Share Agreement or otherwise that upon the
Employee’s termination of employment due to (a) death; (b) Disability; or (c)
involuntary termination by the Corporation without Cause (as determined by the
Administrator) prior to the attainment of the associated performance goals and
restrictions, that the performance goals and restrictions shall be deemed to
have been satisfied on terms determined by the Administrator.

9.4          Annual Incentive
Awards.

(a)      A Participant who
has been granted an Annual Incentive Award and terminates employment or
services due to Disability or death prior to the end of the Corporation’s
fiscal year shall be entitled to a pro-rated payment of the Annual Incentive
Award, based on the number of full months of employment or services, as
applicable during the fiscal year.  Any
such prorated Annual Incentive Award shall be paid at the same time as regular
Annual Incentive Awards and, in the event of the Participant’s death, to the
Participant’s designated beneficiary.

(b)      Except as
otherwise determined by the Administrator in its discretion, a Participant who
has been granted an Annual Incentive Award and resigns or is terminated for any
reason (other than Disability or death), before the payment date of an Annual
Incentive Award, shall forfeit the right to the Annual Incentive Award payment
for that fiscal year.

9.5          Other Provisions.  The transfer of an Employee from one corporation
to another among the Corporation and any of its Subsidiaries, or a leave of
absence under the leave policy of the Corporation or any of its Subsidiaries
shall not be a termination of employment for purposes of the Plan, unless a
provision to the contrary is expressly stated by the Administrator in a
Participant’s Agreement issued under the Plan. 
For purposes of Incentive Stock Options, no such leave of absence may
exceed ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract.

X.  ADJUSTMENTS AND CHANGE IN CONTROL

10.1        Adjustments.  In the event of a merger, reorganization,
consolidation, recapitalization, dividend or distribution (whether in cash,
shares or other property), stock split, reverse stock split, spin-off or
similar transaction or other change in corporate

 23
 

structure
affecting the Common Stock or the value thereof, such adjustments and other
substitutions shall be made to the Plan and Awards as the Administrator, in its
sole discretion, deems equitable or appropriate, including adjustments in the
aggregate number, class and kind of securities that may be delivered under the
Plan and, in the aggregate or to any one Participant, in the number, class,
kind and option or exercise price of securities subject to outstanding Awards
granted under the Plan (including, if the Administrator deems appropriate, the
substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company, as the Administrator may
determine to be appropriate in its sole discretion).

10.2        Change in Control.

(a)      Notwithstanding
anything contained herein to the contrary, the Administrator, in its
discretion, may provide in a Participant’s Agreement or otherwise that upon a
Change in Control, any or all of the following shall occur:  (i) any outstanding Option or Stock
Appreciation Right granted hereunder immediately shall become fully Vested and
exercisable, regardless of any installment provision applicable to such Option
or Stock Appreciation Right; (ii) the remaining Restriction Period on any
Shares of Common Stock subject to a Restricted Stock or Restricted Stock Unit
Award granted hereunder immediately shall lapse and the shares shall become
fully transferable, subject to any applicable Federal or State securities laws;
(iii) all performance goals and conditions shall be deemed to have been
satisfied and all restrictions shall lapse on any outstanding Performance
Awards, which immediately shall become payable (either in full or pro-rata
based on the portion of the applicable performance period completed as of the
Change in Control); (iv) all performance targets and performance levels shall
be deemed to have been satisfied for any outstanding Annual Incentive Awards,
which immediately shall become payable (either in full or pro-rata based on the
portion of the applicable performance period completed as of the Change in
Control); or (v) such other treatment as the Administrator may determine.

(b)      The Administrator
may, in its sole discretion and without the consent of any Participant,
determine that, upon the occurrence of a Change in Control, each or any Option
or Stock Appreciation Right outstanding immediately prior to the Change in
Control shall be cancelled in exchange for a payment with respect to each
Vested share of Common Stock subject to such cancelled Option or Stock
Appreciation Right in (i) cash, (ii) stock of the Corporation or of a
corporation or other business entity a party to the Change in Control, or (iii)
other property which, in any such case, shall be in an amount having a Fair
Market Value equal to the excess of the Fair Market Value of the consideration
to be paid per share of Common Stock in the Change in Control over the exercise
price per share under such Option or Stock Appreciation Right (the “Spread”).  In the event such determination is made by
the Administrator, the Spread (reduced by applicable withholding taxes, if any)
shall be paid to a Participant in respect of the Participant’s cancelled
Options and Stock Appreciation Rights as soon as practicable following the date
of the Change in Control.

 24
 

 

(c)      Notwithstanding
the foregoing, the Administrator, in its discretion, may provide in a
Participant’s Agreement or otherwise that, if in the event of a Change in
Control the successor company assumes or substitutes for an Option, Stock
Appreciation Right, Restricted Stock, or Restricted Stock Unit payable in
shares of Common Stock, Performance Award payable in shares of Common Stock or
Annual Incentive Award payable in shares of Common Stock, then each such
outstanding Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Award or Annual Incentive Award shall not be
accelerated as described in Section 10.2(c). 
For the purposes of this Section 10.2(c), such an Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award
or Annual Incentive Award shall be considered assumed or substituted for if
following the Change in Control the Award confers the right to purchase or
receive, for each share of Common Stock subject to such Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award
or Annual Incentive Award immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property) received in
the transaction constituting a Change in Control by holders of shares of Common
Stock for each share held on the effective date of such transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the transaction constituting a
Change in Control is not solely common stock of the successor company, the
Committee may, with the consent of the successor company, provide that the
consideration to be received upon the exercise or vesting of such Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award
or Annual Incentive Award, for each share of Common Stock subject thereto,
shall be solely common stock of the successor company substantially equal in
fair market value to the per share consideration received by holders of shares
of Common Stock in the transaction constituting a Change in Control.  The determination of such substantial
equality of value of consideration shall be made by the Administrator in its
sole discretion and its determination shall be conclusive and binding.

XI.  MISCELLANEOUS

11.1        Partial Exercise/Fractional
Shares.  The
Administrator may permit, and shall establish procedures for, the partial
exercise of Options and Stock Appreciation Rights granted under the Plan.  No fractional shares shall be issued in
connection with the exercise of a Stock Appreciation Right or payment of a
Performance Award, Restricted Stock Award, Restricted Stock Unit, or Annual
Incentive Award, instead, the Fair Market Value of the fractional shares shall
be paid in cash, or at the discretion of the Administrator, the number of
shares shall be rounded down to the nearest whole number of shares and any
fractional shares shall be disregarded.

11.2        Rights Prior to
Issuance of Shares.  No Participant shall have any rights as a
stockholder with respect to shares covered by an Award until the electronic
transfer of the shares to the Participant has occurred (or book entry
representing such shares has been made, and such shares have been deposited
with the appropriate registered book-entry custodian).  No adjustment shall be made for dividends or
other rights with respect

 

 25

 

to such shares
for which the record date is prior to the date the certificate is issued except
as otherwise provided in the Plan or a Participant’s Agreement or by the
Administrator.

11.3        Non-Assignability;
Stop-Transfer Restrictions; Removal.

(a)      Except as
described below or as otherwise determined by the Administrator in a
Participant’s Agreement, no Award shall be transferable by a Participant except
by will or the laws of descent and distribution, and an Option or Stock
Appreciation Right shall be exercised only by a Participant during the lifetime
of the Participant.  Notwithstanding the
foregoing, a Participant may assign or transfer an Award that is not an
Incentive Stock Option with the consent of the Administrator (each transferee
thereof, a “Permitted Assignee”); provided that such Permitted Assignee shall
be bound by and subject to all of the terms and conditions of the Plan and any
Agreement relating to the transferred Award and shall execute an agreement
satisfactory to the Corporation evidencing such obligations; and provided
further that such Participant shall remain bound by the terms and conditions of
the Plan.

(b)      All shares
delivered pursuant to an Award under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Administrator may deem
advisable pursuant to the terms of an Award and under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, and any applicable federal
or state securities laws, which restrictions may be communicated to the
Corporation’s Stock Transfer Agent.

(c)      Subject to
applicable Federal and State securities laws, issued shares of Common Stock
subject to an Award shall become freely transferable by the Participant after
all applicable restrictions, limitations, performance requirements or other
conditions have terminated, expired, lapsed or been satisfied.  Once such issued shares of Common Stock are
released from such restrictions, limitations, performance requirements or other
conditions, the Participant shall be entitled to have any stock transfer orders
or other restrictions removed.

11.4        Securities Laws and
Stock Exchange Requirements.

(a)      Anything to the
contrary herein notwithstanding, the Corporation’s obligation to sell and/or
deliver Common Stock pursuant to an Option or Stock Appreciation Right or
deliver Common Stock pursuant to a Non-Employee Director’s Award under the
Plan, shall be subject to such compliance with Federal and State laws, rules
and regulations applying to the authorization, issuance or sale of securities
as the Corporation deems necessary or advisable.  The Corporation shall not be required to sell
and deliver or issue Common Stock unless and until it receives satisfactory
assurance that the issuance or transfer of such shares shall not violate any of
the provisions of the Securities Act or the Exchange Act, or the rules and
regulations of the Securities Exchange Commission promulgated thereunder or
those of any Stock Exchange on which the Common Stock may be listed, the
provisions of

 26
 

any State laws governing the sale of
securities, or that there has been compliance with the provisions of such acts,
rules, regulations and laws.

(b)      The Administrator
may impose such restrictions on any shares of Common Stock acquired pursuant to
an Award under the Plan as it may deem advisable, including, without
limitation, restrictions (i) under applicable Federal securities laws; (ii)
under the requirements of any Stock Exchange or recognized trading market or
quotation system upon which such shares of Common Stock are then listed or
traded; and (iii) under any blue sky or State securities laws applicable to
such shares.

(c)      The Administrator
may require a Participant as a condition to the grant, exercise or payment of
an Award to (i) give written representations satisfactory to the Corporation as
to the Participant’s knowledge and experience in financial and business
matters, and/or to employ a purchaser representative reasonably satisfactory to
the Corporation who is knowledgeable and experienced in financial and business
matters, and to give written representations satisfactory to the Corporation
that the Participant is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising an Award; (ii)
give written representations satisfactory to the Corporation stating that the
Participant is acquiring the stock subject to an Award for the Participant’s
own account and not with any present intention of selling or otherwise
distributing the stock; and (iii) give such other written representations as
are deemed necessary an appropriate by the Corporation and its counsel.  The foregoing requirements, and any representations
given pursuant to such requirements, shall be inoperative if (A) the issuance
of the shares upon the exercise or acquisition of stock under the applicable
Award has been registered under a then currently effective registration
statement under the Securities Act, or (B) as to any particular requirement, a
determination is made by counsel for the Corporation that such requirement need
not be met in the circumstances under the then applicable securities laws.  The Corporation may, upon advice of counsel
to the Corporation, notify the Corporation’s Stock Transfer Agent of any
appropriate stop-transfer orders or other restrictions that apply to shares
issued pursuant to an Award granted hereunder.

11.5        Lock-Up Agreement.  If so requested by the Corporation and an
underwriter of shares of Common Stock in connection with any public offering,
each Participant agrees not to directly or indirectly offer, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise
dispose of or transfer any shares held by it for such period, not to exceed one
hundred and eighty (180) days following the effective date of the relative
registration statement filed under the Securities Act in connection with the
Corporation’s initial public offering of Common Stock, or ninety (90) days
following the relevant registration statement filed under the Securities Act in
connection with any other public offering of Common Stock, in each case as such
underwriter shall specify reasonably and in good faith.

 27
 

11.6        Corporation’s Repurchase Rights and
Restrictions on Shares.  In
addition to its other rights, the Administrator in its sole discretion may
provide that the Corporation may repurchase shares acquired upon exercise or
payment of an Award upon the occurrence of certain specified events, including,
without limitation, a Participant’s termination of employment or services,
divorce, bankruptcy or insolvency; provided, that any such repurchase right
shall be set forth in the Participant’s Agreement.  Shares acquired upon exercise or payment of
an Award shall be subject to such terms and conditions as the Administrator
shall determine in its sole discretion, including, without limitation,
restrictions on the transferability of shares, the requirement that shares be
transferred in the event of certain transactions, a right of first refusal in
favor of the Corporation with respect to permitted transfer of shares,
tag-along rights, bring-along rights, redemption and co-sale rights and voting
requirements.  Such terms and conditions
shall be set forth in a Participant’s Agreement.

11.7        Withholding Taxes.

(a)      The Corporation
shall have the right to withhold from a Participant’s compensation or require a
Participant to remit sufficient funds to satisfy applicable withholding for
income and employment taxes upon the exercise of an Option or Stock
Appreciation Right or the lapse of the Restriction Period on a Restricted Stock
Award, Restricted Stock Unit, or the payment of a Performance Award or Annual
Incentive Award.  To fulfill the
withholding obligation, a Participant may tender previously-acquired shares of
Common Stock that have been held at least six (6) months or have shares of
stock withheld from the exercise, provided that the shares have an aggregate
Fair Market Value sufficient to satisfy in whole or in part the applicable
withholding taxes.  The broker assisted
exercise procedure of Section 2.4 may be utilized to satisfy the withholding
requirements related to the exercise of an Option.  At no point shall the Corporation withhold
from the exercise of an Option more shares than are necessary to meet the
established tax withholding requirements of federal, state and local
obligations.

(b)      Notwithstanding
the foregoing, a Participant may not use shares of Common Stock to satisfy the
withholding requirements to the extent that (i) there is a substantial
likelihood that the use of such form of payment or the timing of such form of
payment would subject the Participant to a substantial risk of liability under
Section 16 of the Exchange Act; (ii) such withholding would constitute a
violation of the provisions of any law or regulation (including the
Sarbanes-Oxley Act of 2002); or (iii) there is a substantial likelihood that
the use of such form of payment would result in adverse accounting treatment to
the Corporation under generally accepted accounting principles.

11.8        Termination and
Amendment.

(a)      The Board may
terminate the Plan, or the granting of Awards under the Plan, at any time.  No new Awards shall be granted under the Plan
after the tenth (10th)
anniversary of the earlier of (i) the date on which the Plan is adopted by the
Board, or (ii) the date on which the Plan is approved by the stockholders.

 28
 

 

(b)      The Board may
amend or modify the Plan at any time and from time to time, and the
Administrator may amend or modify the terms of an outstanding Agreement at any
time and from time to time, but no amendment or modification, without the
approval of the stockholders of the Corporation, shall (i) materially increase
the benefits accruing to Participants under the Plan; (ii) increase the amount
of Common Stock for which Awards may be made under the Plan, except as
permitted under Sections 1.7 and Article X; or (iii) change the provisions
relating to the eligibility of individuals to whom Awards may be made under the
Plan.  In addition, if the Corporation’s
Common Stock is listed on a Stock Exchange, the Board may not amend the Plan in
a manner requiring approval of the stockholders of the Corporation under the
rules of the Stock Exchange without obtaining the approval of the stockholders.

(c)      No amendment,
modification, or termination of the Plan or an outstanding Agreement shall in
any manner adversely affect any then outstanding Award under the Plan without
the consent of the Participant holding such Award, except as set forth in any
Agreement relating to the Award, or to bring the Plan and/or an Award into
compliance with the requirements of Code Section 409A or to qualify for an exemption
under Code Section 409A.

11.9        Code Section 409A.  It is intended that Awards granted under the
Plan shall be exempt from or in compliance with Code Section 409A, and the
Board reserves the right to amend the terms of the Plan, and the Administrator
reserves the right to amend any outstanding Agreement, if necessary either to
exempt such Award from Code Section 409A or comply with the requirements of
Code Section 409A, as applicable. 
Further, Participants who are “Specified Employees” (as defined under
Code Section 409A and IRS guidance issued thereunder), shall be required to
delay payment of an Award for six (6) months after separation from service to
the extent such Award is governed by Code Section 409A, and the delay is
required thereunder.  Any payments
delayed for six (6) months shall be aggregated and paid in a lump sum as of the
first day of the seventh (7th)
month.

11.10      Effect on Employment
or Services. 
Neither the adoption of the Plan nor the granting of any Award pursuant
to the Plan shall be deemed to create any right in any individual to be
retained or continued in the employment or services of the Corporation or a
Subsidiary.

11.11      Use of Proceeds.  The proceeds received from the sale of Common
Stock pursuant to the Plan shall be used for general corporate purposes of the
Corporation.

11.12      Severability.  If any one or more of the provisions (or any
part thereof) of this Plan or of any Agreement issued hereunder, shall be held
to be invalid, illegal or unenforceable in any respect, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions (or any part thereof)
of the Plan or of any Agreement shall not in any way be affected or impaired
thereby. The Corporation may, without the consent of any Participant, and in a
manner determined necessary solely in the discretion of the

 29
 

 

Corporation,
amend the Plan and any outstanding Agreement as the Corporation deems necessary
to ensure the Plan and all Awards remain valid, legal or enforceable in all
respects.

11.13      Beneficiary
Designation. 
Subject to local laws and procedures, each Participant may file a
written beneficiary designation with the Corporation stating who is to receive
any benefit under the Plan to which the Participant is entitled in the event of
such Participant’s death before receipt of any or all of a Plan benefit. Each
designation shall revoke all prior designations by the same Participant, be in
a form prescribed by the Corporation, and become effective only when filed by
the Participant in writing with the Corporation during the Participant’s
lifetime. If a Participant dies without an effective beneficiary designation
for a beneficiary who is living at the time of the Participant’s death, the
Corporation shall pay any remaining unpaid benefits to the Participant’s legal
representative.

11.14      Unfunded Obligation.  A Participant shall have the status of a
general unsecured creditor of the Corporation. Any amounts payable to a
Participant pursuant to the Plan shall be unfunded and unsecured obligations
for all purposes.  The Corporation shall
not be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such obligations.  The Corporation shall retain at all times
beneficial ownership of any investments, including trust investments, which the
Corporation may make to fulfill its payment obligations hereunder.  Any investments or the creation or
maintenance of any trust or any Participant account shall not create or
constitute a trust or fiduciary relationship between the Administrator or the
Corporation and a Participant, or otherwise create any Vested or beneficial
interest in any Participant or the Participant’s creditors in any assets of the
Corporation.  A Participant shall have no
claim against the Corporation for any changes in the value of any assets which
may be invested or reinvested by the Corporation with respect to the Plan.

11.15      Approval of Plan.  The Plan shall be subject to the approval of
the holders of at least a majority of the votes cast at a duly held meeting of
stockholders of the Corporation held within twelve (12) months after adoption
of the Plan by the Board.  No Award
granted under the Plan may be exercised or paid in whole or in part unless the
Plan has been approved by the stockholders as provided herein.  If not approved by stockholders within twelve
(12) months after approval by the Board, the Plan and any Awards granted under
the Plan shall be null and void, with no further force or effect.

11.16      Governing Law.  Except to the extent governed by applicable
federal law, the validity, interpretation, construction and performance of the
Plan and Agreements under the Plan, shall be governed by the laws of the State
of Michigan, without regard to its conflict of law rules.

IN WITNESS WHEREOF, this TriMas Corporation
2006 Long Term Equity Incentive Plan has been executed on behalf of the
Corporation on this the 1st day of November, 2006.

 30
 

 

	
  

  	
   

  	
  TRIMAS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joshua A. Sherbin

  
	
   

  	
   

  	
   

  	
  Joshua A. Sherbin

  
	
   

  	
   

  	
  Its:

  	
  Secretary and General Counsel

  
	
  BOARD APPROVAL:

  	
  11/01/06

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SHAREHOLDER APPROVAL:

  	
  11/01/06

  	
   

  	
   

  	
   

  

 

 31

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