Document:

Unassociated Document

     

    
    

     

    
      Exhibit 10.6

       

      LEASE AGREEMENT

       

      (OFFICE SPACE) 

       

           THIS LEASE
AGREEMENT, made and entered into this 15th day of February, 2005, by and between
LIMONEIRA COMPANY, a Delaware corporation (hereinafter referred to as
“Landlord”), and CALAVO GROWERS, INC., a California corporation (hereinafter
referred to as “Tenant”); 

       

      WITNESSETH: 

       

      ARTICLE I 

       

      DEMISED
PREMISES

       

           1.01
Landlord demises and leases to Tenant, and Tenant rents from Landlord, those
certain premises (the “Premises”) in the City of Santa Paula, County of Ventura,
and State of California, described as follows: the first and second floors of
the east wing and three offices in the center building of the Limoneira Ranch
Headquarters located at 1141 Cummings Road, Santa Paula, California 93060 (the
“Limoneira Headquarters Building”), containing approximately 9,490 square feet,
as depicted on Exhibit A attached hereto, together with the improvements
and fixtures described on Exhibit B hereto, all of which are to be
purchased and installed by Landlord at its sole expense. 

       

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      ARTICLE II 

       

      TERM

       

           2.01 The
term of this Lease shall commence on February 15, 2005, and shall continue
thereafter for a period of ten (10) years. Tenant shall have options to
extend this Lease for two additional terms of five (5) years each. Each
such option may be exercised by written notice from Tenant to Landlord given not
less than ninety (90) days prior to expiration of the then current Lease
term, provided that an Event of Default (as defined below) does not exist under
this Lease at the time it delivers its written notice. 

       

      ARTICLE III 

       

      RENT

       

           3.01
During the first year of the term of this Lease, Tenant shall pay rent to
Landlord annual rental of Two Hundred Seven Thousand Two Hundred Twenty-Six
Dollars and Sixty Cents ($207,226.60) in monthly installments of Seventeen
Thousand Two Hundred Sixty-Eight Dollars and Eighty-Eight Cents ($17,268.88) per
month on or before the tenth (10th) day of each calendar
month for the current calendar month. The payment of said rent shall begin on
the commencement date as provided in Section 2.01 hereof. Said rent shall
be paid at the office of Landlord, located at 1141 Cummings Road, Santa Paula,
California 93060, or at such other place as may be designated in writing from
time to time by Landlord. Rent shall be adjusted annually commencing in
February, 2007, effective as of the fifteenth day of February to reflect to
increase in the “CPI” as of that month over the CPI for February, 2005. No such
increase shall be in excess of five percent (5%) in any year. CPI for purposes
of this Lease shall mean the 

       

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      Consumer Price Index for all Urban
Consumers for the Los Angeles, Orange and Riverside County areas. In the event
that such Index is no longer published at the time of a scheduled rent
adjustment, Landlord and Tenant shall agree upon and utilize the most comparable
index then being published. 

       

      ARTICLE IV 

       

      USE OF PREMISES

       

           4.01
Tenant shall occupy and use the Demised Premises for the operation of its
corporate offices, or (subject to Landlord’s prior written approval not to be
unreasonably withheld, delayed or conditioned) any other lawful purpose. 

       

      ARTICLE V 

       

      PAYMENT OF TAXES AND UTILITY
CHARGES

       

           5.01 Taxes. Landlord shall
pay all City and County real property taxes on the land and building comprising
the Limoneira Headquarters Building, including the Premises. Nothing contained
in this Lease shall require Tenant to reimburse Landlord for or pay for any
franchise, estate, inheritance, succession, capital levy or transfer tax of
Landlord, or any income, excess profits or revenue tax or any other tax,
assessment, charge or levy upon the rent payable by Tenant under this Lease.
Tenant shall pay any and all taxes assessed or imposed, and which become payable
during the Lease term, upon Tenant’s fixtures, furniture, appliances and
personal property located or installed in the Premises, but not including any of
the items listed on Exhibit B hereto installed by Landlord for Tenant’s
use. 

       

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           5.02 Utility Charges.
Landlord shall pay for all charges for electricity, water, gas and other utility
services used on the Premises during the term of this Lease and shall provide
janitorial services to the Premises comparable to those it provides for its own
corporate offices. Landlord shall also provide all maintenance for the Premises
as set forth in Article VI hereof; provided that such services shall not in
any event be less than those customarily provided by landlords of comparable
leased space in Ventura County, California. 

       

      ARTICLE VI 

       

      SERVICES

       

           6.01
Landlord shall maintain the public and common areas of the Limoneira
Headquarters Building, including, without limitation, lobbies, stairs,
elevators, corridors and restrooms, windows, plumbing and electrical equipment,
and the structure itself in reasonable good order and condition except for
damage occasioned by the act of Tenant, its employees, agents, contractors or
invitees, which damage shall be repaired by Landlord at Tenant’s expense to the
extent such expense is reasonable under the circumstances. 

       

           6.02
Landlord shall furnish the Premises with (1) electricity for lighting and
the operation of customary office machines and equipment, (2) heat and air
conditioning to the extent reasonably required for the comfortable occupancy by
Tenant in its use of the Premises, subject to any applicable policies or
regulations adopted by any utility or 

       

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      governmental agency, (3) water for
drinking and lavatory purposes, (4) lighting replacement (for building
standard lights), (5) restroom supplies, (6) window washing with
janitor service. Landlord may establish reasonable measures to conserve energy,
including but not limited to, automatic switching off of lights after hours.
Landlord shall not be in default hereunder or be liable for any damages directly
or indirectly resulting from, nor shall the rent herein reserved be abated by
reason of (i) the installation, use or interruption of use of any equipment
in connection with the furnishing of any of the foregoing services, except to
the extent resulting from Landlord’s gross negligence or willful misconduct,
(ii) failure to furnish or delay in furnishing any such services when such
failure or delay is caused by accident or any condition beyond the reasonable
control of Landlord or by the making of repairs or improvements to the Premises
or to the Limoneira Headquarters Building, or (iii) the limitation,
curtailment, rationing or restrictions on use of water, electricity, gas or any
other form of energy serving the Premises or the Limoneira Headquarters Building
imposed by any governmental authority. 

       

           6.03
Whenever heat-generating equipment or lighting other than building standard
lights are used in the Premises by Tenant which affect the temperature otherwise
maintained by the air conditioning system, Landlord shall have the right, after
notice to Tenant, to install supplementary air conditioning facilities in the
Premises or otherwise modify the ventilating and air conditioning system serving
the Premises, and the reasonable cost of such facilities and modifications shall
be borne by Tenant. Tenant shall also pay the cost of providing all cooling
energy to the Premises in excess of that 

       

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      required for normal office use or during
hours requested by Tenant when air conditioning is not otherwise furnished by
Landlord. If there is installed in the Premises lighting requiring power in
excess of that required for normal office use in the Limoneira Headquarters
Building or if there is installed in the Premises equipment requiring power in
excess of that required for normal desk-top office equipment or normal copying
equipment, Tenant shall pay for the cost of such excess power, together with the
reasonable cost of installing any additional risers or other facilities that may
be reasonably necessary to furnish such excess power to the Premises. 

       

           6.04 In
the event that Landlord, at Tenant’s request, provides services to Tenant that
are not otherwise provided for in this Lease, Tenant shall pay Landlord’s
reasonable charges for such services upon billing therefor. 

       

           6.05
Landlord shall provide to Tenant, without charge, paved parking areas for use by
Tenant’s officers, directors, employees and invitees. Such parking will be in an
asphalt paved parking areas east of the Lemon Packing House. Landlord reserves
the right to relocate such parking areas from time to time, provided that such
access shall at all times be reasonably proximate to the Premises. 

       

      ARTICLE VII

       

      INSURANCE BY TENANT –
INDEMNITY

       

           7.01 Public Liability
Insurance. Tenant agrees that, at its own cost and expense, it shall
procure and continue in force, in the name of Landlord and Tenant, 

       

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      general liability insurance against any
and all claims for injuries to persons occurring in, upon or about the Demised
Premises. During the term of this Lease, such insurance shall be in an amount
not less than One Million Dollars ($1,000,000) for injury to or death of any one
person in one accident, and not less than Three Million Dollars ($3,000,000) for
injuries to or death of all persons in any one accident and to the limit of not
less than Five Hundred Thousand Dollars ($500,000) in respect to property
damage. Such policy shall name Landlord as an additional insured. 

       

           7.02
Tenant shall also procure at its costs and expense and keep in effect during the
term of this Lease insurance against damage by fire and other perils included
within “all-risk” coverage (but excluding earthquake, flood and acts of
terrorism) in an amount not less than the full replacement cost of all of the
leasehold improvements in the Premises and Tenant’s trade fixtures, furnishings
and equipment in the Premises. A copy of each policy of insurance shall be
delivered to Landlord by Tenant prior to commencement of the term of this Lease
and upon each renewal of such insurance. In the event Tenant shall fail to
procure such insurance, or to deliver to Landlord such policies, Landlord may,
at its option upon no less than five (5) days prior written notice from
Landlord, procure the same for the account of Tenant, and the cost thereof shall
be paid to Landlord within (5) days after delivery to Tenants of bills
therefor. Each insurance policy required to be maintained by Tenant under this
Article VII shall provide that it is primary insurance and not excess over
or contributory with any other valid, existing and applicable insurance in force
for or on behalf of any of the parties required to be named as additional
insured thereunder, shall be issued by insurance companies 

       

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      licensed to do business in the State of
California and otherwise reasonably acceptable to Landlord, and shall provide
that such insurance may not be cancelled or amended without thirty (30) days’
prior written notice to Landlord 

       

           7.03 Subrogation. Landlord
and Tenant shall each obtain from its respective insurers under all policies of
fire insurance, and to the extent obtainable, theft, public liability, workers’
compensation and other insurance maintained by either of them at any time during
the term hererof insuring or covering the Limoneira Headquarters Building or any
portion thereof or operations therein, a waiver of all rights of subrogation
which the insurer of one party might have against the other party, and Landlord
and Tenant shall each indemnify the other against and reimburse the other for
any and all loss or expense, including reasonable attorney’s fees, resulting
from the failure to obtain such waiver. 

       

           7.04 Indemnification.
Tenant hereby waives all claims against Landlord for the theft, loss or damage
to any property, fixtures or improvements or injury of death of any person in,
upon or about the Premises arising at any time and from any cause other than to
the extent arising by reason of the gross negligence or willful misconduct of
Landlord, its employees or contractors, and Tenant shall indemnify, defend and
hold Landlord harmless from any and all loss, cost, damage or liability arising
from the use or occupancy of the Premises or the Limoneira Headquarters Building
by Tenant or Tenant’s failure to perform its obligations under this Lease,
except to the extent such is caused by the gross negligence or willful
misconduct of Landlord, its contractors or employees. The foregoing indemnity
obligation of Tenant shall include reasonable 

       

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      attorneys’ fees, investigation costs and
all other reasonable costs and expense incurred by Landlord from the first
notice that injury, death or damage has occurred or that any claim or demand is
to be made or may be made. The provisions of this Article shall survive the
termination of this Lease. 

       

      ARTICLE VIII

       

      REPAIRS, MAINTENANCE AND
RECONSTRUCTION

       

           8.01
Except as hereinafter provided, Landlord during the entire term of this Lease
and any extension thereof, shall keep the entire Premises and all improvement
therein, in good condition and repair. 

       

           8.02
Tenant shall not have the right, without the consent of Landlord, not to be
unreasonably withheld, delayed or conditioned, to make any alterations or
additions to the Premises if the reasonable expected cost thereof exceeds
twenty-five thousand dollars ($25,000). Upon the expiration of this Lease, any
then existing alterations, additions and improvements made by Tenant to or upon
the Premises, except Tenant’s signs, shall become the property of Landlord.

       

           8.03 At
the termination of this Lease, Tenant shall surrender the Premises to Landlord
in good condition and repair, subject only to the consequences and effect of
reasonable wear and tear; provided, however, that Tenant shall be under no
obligation to repair or restore any portion of said building or other
improvements which may be damaged or destroyed by reason of fire, earthquake,
the elements or other casualty. 

       

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           8.04 In
the event the Limoneira Headquarters Building shall be damaged by fire,
earthquake, the elements or other casualty, the following provision shall apply:
if the Limoneira Headquarters Building shall be totally destroyed or partially
destroyed from causes covered by insurance to an extent exceeding twenty-five
per cent (25%) of the then full replacement costs (excluding foundations), and
Landlord has not commenced the repair, reconstruction or restoration of the
building within sixty (60) days after the date of such destruction, either
Tenant or Landlord shall have the right to terminate this Lease by giving
written notice of its election to terminate to the other party within ninety
(90) days, but not before sixty (60) days from the date of such
destruction. If neither party shall elect to terminate this Lease within such
90-day period, Landlord shall promptly commence repair, reconstruction and
restoration of said building and prosecute the same diligently to completion, in
which event this Lease shall continue in full force and effect. 

       

           8.05 Upon
any termination of this Lease under any of the provisions of this
Article VIII, Tenant shall surrender possession of the Premises within
sixty (60) days after receipt of such written notice of termination,
whereupon the parties shall be released thereby from any further obligations to
the other except for items which have theretofore accrued and are then unpaid,
and such termination shall be deemed to relate back to the date of destruction,
provided that if the Premises or any portion thereof shall be kept open for
business after the date of destruction and prior to the surrender of possession
of the Premises, the termination date shall be the date that Tenant shall
discontinue the conduct of its business in the Premises. In the event of any
termination, as herein provided, 

       

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      Tenant shall forthwith surrender the
Premises to Landlord, and upon such surrender Landlord shall refund to Tenant
any unearned rent paid by Tenant, calculated at a daily rate based on the
regular monthly rate and shall pay to Tenant and unexpired taxes and insurance
premiums. 

       

           8.06 In
the event of repair, reconstruction and restoration under any of the conditions
of this Article VIII, Tenant shall not be entitled to any damages by reason
of any inconveniences or loss sustained by Tenant. During any such period of
repair, reconstruction and restoration, all rent paid in advance shall be
apportioned, and the monthly rental thereafter accruing shall be equitably and
proportionately prorated and adjusted according to the nature, extent and
duration of the damage sustained and according to the suitability of the
Premises for the use and occupancy of Tenant in the conduct of its business,
until the Premises shall have been repaired, reconstructed or restored by
Landlord. The full rental shall again become payable at such time after the
completion of such work of repair, reconstruction and restoration and when
Tenant shall use the restored part of the Premises in the carrying on of its
business, or within thirty (30) days after the completion of such work,
whichever shall first occur. 

       

      ARTICLE IX

       

      ENTRY BY
LANDLORD

       

           9.01
Landlord may enter the Premises at reasonable hours to (a) inspect the
same; (b) exhibit the same to prospective purchasers, lenders or tenants,
provided, however, that Landlord shall only exhibit the Premises to prospective
tenants during the 

       

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      final twelve (12) months of
Tenant’s occupancy of the Premises; (c) determine whether Tenant is
complying with all its obligations hereunder; (d) supply janitor service
and any other service to be provided by Landlord to Tenant hereunder;
(e) make repairs required of Landlord under the terms hereof or repairs to
any adjoining space or utility services or make repairs, alterations or
improvements to any other portion of the Building; provided that no entry by
Landlord shall unreasonably interfere with Tenant’s use or occupancy of the
Premises. Tenant hereby waives any claim for damages for any inconvenience to or
interference with Tenant’s business or any loss of occupancy or quiet enjoyment
of the Premises occasioned by such entry, except to the extent that such damages
result from Landlord’s unreasonable interference with Tenant’s use or occupancy
of the Premises or Landlord’s gross negligence or willful misconduct Landlord
shall at all time have and retain a key with which to unlock all of the doors
in, on or about the Premises (excluding Tenant’s vaults, safes and similar areas
designated in writing by Tenant in advance); and Landlord shall have the right
to use any and all means which Landlord may deem proper to open Tenant’s doors
in an emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord in an emergency shall not be construed or deemed
to be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or contructive, of Tenant from the Premises or any portion
thereof. 

       

      ARTICLE X

       

      EVENTS OF
DEFAULT

       

           10.01
Default. The
following events shall constitute Events of Default under this Lease: 

       

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                (a) Tenant’s
failure to pay when due any rent or other sum payable hereunder and the
continuation of such failure for a period of fifteen (15) days after Tenant
receives written notice from Landlord that the same is due, provided that if
Tenant has failed three or more times in any twelve-month period to pay any rent
or other sum within such fifteen (15) day period, such grace period shall
thereafter be reduced to three (3) days; 

       

                (b) Tenant’s
failure to perform any of the other terms, covenants, agreements or conditions
contained herein and, if the failure is curable, the continuation of such
failure for a period of thirty (30) days after notice by Landlord or beyond
the time reasonably necessary for cure if the failure is of a nature to require
more than thirty (30) days to remedy, provided that if Tenant has failed to
perform the same obligation three or more times in any twelve-month period and
notice of such failure has been given by Landlord in each instance, no cure
period shall thereafter be applicable hereunder; 

       

                (c) The
bankruptcy or insolvency of Tenant, transfer by Tenant in fraud of creditors, an
assignment by Tenant for the benefit of creditors, or the commencement of any
proceedings of any kind by or against Tenant under any provision of the Federal
Bankruptcy Act or under any other insolvency, bankruptcy or reorganization act
unless, in the event any such proceeding such involuntary, Tenant is discharged
from the same within ninety (90) days thereafter; 

       

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                (d) the
appointment of a receiver for all or a substantial part of the assets of Tenant;

       

                (e) the
abandonment of the Premises; or 

       

                (f) the
levy upon Tenant’s interest in this Lease or any estate of Tenant hereunder by
any attachment or execution and the failure to have such attachment or execution
vacated within thirty (30) days thereafter. 

       

      ARTICLE XI

       

      TERMINATION UPON
DEFAULT

       

           11.01 In
any notice given pursuant to Article X above, Landlord in its sole
discretion may elect to declare a forfeiture of this Lease as provided in
Section 1161 of the California Code of Civil Procedure, and provided that
Landlord’s notice state such an election, Tenant’s right to possession shall
terminate and this Lease shall terminate, unless on or before the date specified
in such notice, all arrears of rent and all other sums payable by Tenant under
this Lease and all costs and expenses incurred by or on behalf of Landlord
hereunder, including reasonable attorneys’ fees shall be paid by Tenant and all
other breaches of this Lease by Tenant at the time existing shall have been
fully remedied to the satisfaction of Landlord. Upon such termination, Landlord
may, at its option and without any further notice or demand, in addition to any
other rights and remedies given hereunder or by law, exercise its remedies
relating hereto in accordance with the following provisions: 

       

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                (i) In
the event of any such termination of this Lease, Landlord may then or at any
time thereafter by judicial process, re-enter the Premises and remove therefrom
all persons and property and again repossess and enjoy the Premises, without
prejudice to any other remedies that Landlord may have by reason of Tenant’s
default or of such termination. 

       

                (ii) In
the event of any such termination of this Lease, and in addition to any other
rights and remedies Landlord may have, Landlord shall have all of the rights and
remedies of a landlord provided by Section 1951.2 of the California Civil
Code. The amount of damages which Landlord may recover in event of such
termination shall include, without limitation, (1) the worth at the time of
award (computed by discounting such amount a the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent) of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of rental loss that Tenant proves could be reasonable
avoided, (2) all reasonable legal expenses and other related costs incurred
by Landlord following Tenant’s default, (3) all reasonable costs incurred
by Landlord in restoring the Premises to good order and condition, or in
remodeling, and (4) all costs (including, without limitation, any brokerage
commissions) incurred by Landlord in reletting the Premises. 

       

                (iii) After
terminating this Lease, Landlord may remove any and all personal property of
Tenant located in the Premises and place such property in a public or private
warehouse or elsewhere at the sole cost and expense of Tenant. In the event that

       

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      Tenant shall not immediately pay the
cost of storage of such property after the same has been stored for a period of
thirty (30) days or more, Landlord may sell any or all thereof at a public
or private sale in such manner and such times and places as Landlord in its sole
discretion may deem proper, without notice to or demand upon Tenant. Tenant
waives all claims for damages that may be caused by Landlord’s removing or
storing or selling the property as herein provided, and Tenants shall indemnify
and hold Landlord free and harmless from and against any and all losses, costs
and damages, including without limitation all costs of court and attorneys’ fees
of Landlord occasioned thereby, except for those arising by reason of Landlord’s
gross negligence or willful misconduct. 

       

                11.02 In
the event of the occurrence of any of the events specified in
Section 10.01(c) of this Lease, if Landlord shall not choose the exercise,
or by law shall not be able to exercise, its rights hereunder to terminate this
Lease, then, in addition to any other rights of Landlord hereunder or by law,
(1) Landlord may discontinue the services provided pursuant to
Article VI of this Lease, unless Landlord has received compensation in
advance for such services in the amount of Landlords’ reasonable estimate of the
compensation required with respect to such services, and (2) neither Tenant, as
debtor-in-possession, nor any trustee or other person (collectively, the
“Assuming Tenant”) shall be entitled to assume this Lease unless on or before
the date of such assumption, the Assuming Tenant (a) cures, or provides
adequate assurance that the Assuming Tenants will promptly cure, any existing
default under this Lease, (b) compensates, or provides adequate assurance
that the Assuming Tenant will promptly compensate, Landlord for any pecuniary
loss (including, without limitation, attorneys’ fees and disbursement) 

       

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      resulting from such default, and
(c) provides adequate assurance of future performance under this Lease. For
purposes of this Section 11.02, “adequate assurance” of such cure,
compensation of future performance shall be effected by the establishment of an
escrow fund for the amount at issue or by bonding. 

       

      ARTICLE XII

       

      CONTINUATION AFTER
DEFAULT

       

           12.01 If
an Event of Default exists under this Lease and Tenant has abandoned the
Premises, Landlord shall also have the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant has
breached this Lease and abandoned the Premises and recover rent as it becomes
due; provided, however that Tenants has the right to sublet or assign this
Lease, subject only to reasonable limitations). Acts of maintenance or
preservation or efforts to relet the Premises or the appointment of a receiver
upon initiative of Landlord to protect Landlord’s interest under this Lease
shall not constitute a termination of Tenant’s right to possession. 

       

           12.02 The
remedies provided for in this Lease are in addition to any other remedies
available to Landlord at law or in equity by statute or otherwise. 

       

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      ARTICLE XIII 

       

      ASSIGNMENT AND
SUBLEASE

       

           13.01
Tenants shall not have the right at any time to sublease, sublet or assign all
or any portion of the Premises or its interest in this Lease. Any such
assignment or subleasing shall be void unless Landlord shall first agree in
writing to such assignment or subletting, which agreement Landlord shall not
unreasonably withhold, delay or condition. 

       

      ARTICLE XIV 

       

      ENCUMBRANCES BY
LANDLORD

       

           14.01
Tenant agrees that, except as hereinafter provided with respect to Tenant’s
right to possession of the Premises, Tenant’s rights under this Lease are and
shall always be subordinate to the lien of any mortgage or trust deed now or
hereafter placed from time to time upon the Limoneira Headquarters Building of
which the Premises are a part in favor of a bank, savings and loan association,
insurance company or other financial institution. Tenant shall, upon written
demand from Landlord, execute such other and further instruments or assurances
subordinating this Lease to the lien or liens of any such mortgage or mortgages
or trust deeds except as hereinafter limited with respect to Tenant’s right to
possession. Tenant’s possession and right of use under this Lease in and to the
Premises shall not, however, be disturbed by any mortgagee, trustee under a
trust deed, owner or holder of a note secured by a mortgage or trust deed now
existing or hereafter placed on the Limoneira Headquarters Building unless and
until Tenant shall breach any of the provisions of this Lease and the Lease term
or Tenant’s right to 

       

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      possession shall have been lawfully
terminated in accordance with the provisions of this Lease. If any mortgagee or
trustee under a trust deed elects to have Tenant’s interest in this Lease
superior to any such interest by notice to Tenant, then this Lease shall be
deemed superior to any such mortgage or trust deed whether this Lease was
executed before or after such mortgage or trust deed. 

       

      ARTICLE XV 

       

      TERMINATION –
ABATEMENT

       

           15.01 If,
without Tenant’s fault, the operation on the Premises of the business then being
conducted on the Premises is substantially impaired or prevented for more than
ninety (90) days by the deprivation or limitation of any access thereto or
therefrom, by any governmental taking or action, Tenant may terminate this Lease
by giving Landlord at least thirty (30) days’ written notice; provided
that, in the event of any such acquisition or taking, such notice may be given
at any time not later than ninety (90) days after physical possession of
the Premises is taken or the judgment in the condemnation proceeding becomes
final, whichever occurs later; and if the taking is total, the rent shall
immediately abate, or if only partial, but is sufficient in Tenant’s reasonable
judgment to prevent or substantially impair operation of the business then
located on the Premises, the rent shall abate when physical possession of the
Premises is taken. Neither the existence nor exercise of any right under this
Lease to terminate, nor any abatement of rent, shall waive, limit or affect in
any way Tenant’s rights, then accrued or thereafter to accrue, in any
proceeding, settlement or award for condemnation or for damages resulting from
any other of the events specified in this Article XV. 

       

      19 

       

    

    
    

     

    

    
    

     

     

    
    

     

    
      ARTICLE XVI 

       

      EMINENT DOMAIN

       

           16.01 In
the event the entire Premises shall be appropriated or taken under the power of
eminent domain by any public or quasi-public authority, this Lease shall
terminate and expire as of the date of such taking and the parties hereto shall
thereupon be released from any liability thereafter accruing hereunder. 

       

           16.02 In
the event more than ten percent (10%) of the ground floor area of the Premises
is taken under the power of eminent domain by any public or quasi-public
authority, Tenant shall have the right to terminate this Lease as of the date of
such taking upon giving to Landlord notice, in writing, of such election within
thirty (30) days after such appropriation or taking. In the event of such
termination, both parties shall thereupon be released from any liability
thereafter accruing hereunder. Landlord agrees immediately after it received
notice of the intention of any such authority to appropriate or take to give to
Tenant notice, in writing, thereof. 

       

           16.03 This
Lease is not terminated by Tenant in accordance with the foregoing provisions,
there shall be no abatement of rent and this Lease shall remain in full force
and effect and Landlord shall receive and retain any amount awarded as
compensation for the taking of fixtures and equipment owned by Landlord or for
the expense of removing or repairing the same or for improvements constructed by
Landlord at its own cost. 

       

      20 

       

    

    
    

     

    

    
    

     

     

    
    

     

    
           16.04 If
this Lease is terminated in the manner hereinabove provided, each party shall be
entitled to any award made to it in such proceedings, but the rent for the last
month of Tenant’s occupancy shall be prorated and Landlord agrees to refund to
Tenant any rent paid in advance. 

       

      XVII

       

      ATTORNEYS’ FEES

       

           17.01 If
as a result of any breach or default in the performance of any of the provisions
of this Lease, Landlord uses the services of an attorney in order to secure
compliance with such provision or recover damages therefor, or to terminate this
Lease or evict Tenants, Tenant shall reimburse Landlord upon demand for any and
all reasonable attorneys’ fees and expenses so incurred by Landlord, provided
that if Tenant shall be the prevailing party in any legal action brought by
Landlord against Tenant, Tenant shall be entitled to recover reasonable
attorneys’ fees and expenses incurred by Tenant. 

       

      ARTICLE XVIII 

       

      HOLDING OVER

       

           18.01 Any
holding over after the expiration of the term of this Lease with the consent of
Landlord shall be deemed a tenancy from month-to-month at a rental equal to one
hundred twenty percent (120%) of the monthly rental being paid by Tenant as of
the last month of the term of this Lease. All other conditions and agreements of
this Lease shall be applicable to such holding over. 

       

      21 

       

    

    
    

     

    

    
    

     

     

    
    

     

    
      ARTICLE XIX 

       

      MISCELLANEOUS

       

           19.01
Notices.
Whenever under this Lease a provision is made for any demand, notice or
declaration of any kind or where it is deemed desirable or necessary by either
party to give or serve any such notice, demand or declaration to the other, it
shall be in writing sent by registered or certified mail with postage prepaid,
if to Tenant, addressed to Tenant at 1141 A Cummings Road, Santa Paula,
California 93060 and if to Landlord, addressed to Landlord at 1141 Cummings
Road, Santa Paula, California 93060 and either party may, by like notice, at any
time and from time to time, designate a different address to which notices shall
be sent. Such notices, demands or declarations shall be deemed sufficiently
served or given for all purposes hereunder at the time they shall be mailed by
United States registered or certified mail as aforesaid. 

       

           19.02
Waiver. One or
more waivers of any covenant, term or condition of this Lease by either party
shall not be construed by the other party as a waiver of a subsequent breach of
the same covenant, term or condition. The consent or approval of either party to
or of any act by the other party of a nature requiring consent or approval shall
not be deemed to waiver or render unnecessary consent to or approval of any
subsequent similar act. 

       

           19.03
Relationship of
Parties. Nothing contained in this Lease shall be deemed or construed by
the parties hereto or by any third party to create the relationship of principal
and agent or of partnership or of joint venture or of any association whatsoever

       

      22 

       

    

    
    

     

    

    
    

     

     

    
    

     

    
      between Landlord and Tenant, it being
expressly understood and agreed that none of the provisions contained in this
Lease nor any act or acts of the parties hereto shall be deemed to create any
relationship between Landlord and Tenant other than the relationship of Landlord
and Tenant. 

       

           19.04
Governing Laws.
The laws of the State of California shall govern the validity, performance and
enforcement of this Lease. 

       

           19.05
Savings Clause.
The invalidity or unenforcibility of any provision of this Lease shall not
affect or impair the validity of any other provision. 

       

           19.06
Margin
Headings. The Paragraph titles herein are for convenience only and do not
define, limit or construe the contents of such Paragraph. 

       

           19.07
Covenant to Bind
Successors. It is agreed that the provisions, covenants and conditions of
this Lease shall be binding on the legal representatives, heirs, successors and
assigns of the respective parties hereto. 

       

           19.08
Entire
Agreement. This Lease and the Exhibits attached hereto and forming a part
hereof, set forth all of the covenants, promises, agreements, conditions and
understandings between Landlord and Tenant governing the Premises. There are no
covenants, promises, agreements, conditions and understandings, either oral or
written, between them other than those herein set forth. Except as herein
provided, no subsequent 

       

      23 

       

    

    
    

     

    

    
    

     

     

    
    

     

    
      alterations, amendments, changes or
additions to this Lease shall be binding upon Landlord or Tenant unless and
until reduced to writing and signed by both parties. 

       

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

       

      
        	 	 	 	 	 
	 	 	LANDLORD
	
                 

              	 	 	 	 
	 	 	LIMONEIRA COMPANY
	
                 

              	 	 	 	 
	
                
                

              	 	By 	 	  /s/ Harold Edwards
	
                
                

              	 	 	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	By 	 	  /s/ Don Delmatoff
	
                
                

              	 	 	 	 
	
                 

              	 	 	 	 
	 	 	TENANT
	
                 

              	 	 	 	 
	 	 	CALAVO GROWERS INC.
	
                 

              	 	 	 	 
	
                
                

              	 	By 	 	  /s/ Lecil Cole
	
                
                

              	 	 	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	By 	 	  /s/ Arthur Bruno
	
                
                

              	 	 	 	 

      

      24LIMONEIRA
COMPANY

      2010 OMNIBUS INCENTIVE
PLAN

      

      

      Section 1.   Purpose.   The
purposes of this Limoneira Company 2010 Omnibus Incentive Plan are to promote
the interests of Limoneira Company and its stockholders by (i) attracting
and retaining employees and directors of, and consultants to, the Company and
its Affiliates, as defined below; (ii) motivating such individuals by means
of performance-related incentives to achieve longer-range performance goals; and
(iii) enabling such individuals to participate in the long-term growth and
financial success of the Company.

      

      Section 2.   Definitions.   As used in
the Plan, the following terms shall have the meanings set forth
below:

      

      “Affiliate” shall mean any
entity (i) that, directly or indirectly, is controlled by, controls or is under
common control with, the Company or (ii) in which the Company has a significant
equity interest, in either case as determined by the Committee.

      

      “Award” shall mean any
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award, Performance Award, Other Stock-Based Award or Performance Compensation
Award made or granted from time to time hereunder.

      

      “Award Agreement” shall mean
any written agreement, contract, or other instrument or document evidencing any
Award, which may, but need not, be executed or acknowledged by a
Participant.

      

      “Board” shall mean the Board
of Directors of the Company.

      

      “Cause” as a reason for a
Participant’s termination of employment or service shall have the meaning
assigned such term in the employment, severance or similar agreement, if any,
between the Participant and the Company or an Affiliate.   If the
Participant is not a party to an employment, severance or similar agreement with
the Company or an Affiliate in which such term is defined, then unless otherwise
defined in the applicable Award Agreement, “Cause” shall mean: (i) the
intentional engagement in any acts or omissions constituting dishonesty, breach
of a fiduciary obligation, wrongdoing or misfeasance, in each case, in
connection with a Participant’s duties or otherwise during the course of a
Participant’s employment or service with the Company or an Affiliate; (ii) the
commission of a felony or the indictment for any felony, including, but not
limited to, any felony involving fraud, embezzlement, moral turpitude or theft;
(iii) the intentional and wrongful damaging of property, contractual interests
or business relationships of the Company or an Affiliate; (iv) the
intentional and wrongful disclosure of secret processes or confidential
information of the Company or an Affiliate in violation of an agreement with or
a policy of the Company or an Affiliate; (v) the continued failure to
substantially perform the Participant’s duties for the Company or an Affiliate;
(vi) current alcohol or prescription drug abuse affecting work performance;
(vii) current illegal use of drugs; or (viii) any intentional conduct contrary
to the Company’s or an Affiliate’s written policies or practices.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Change of Control” shall
mean the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of the Company to any “person” or “group”
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
(ii) any person or group is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have “beneficial ownership” of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than fifty percent (50%)
of the total voting power of the voting stock of the Company, including by way
of merger, consolidation or otherwise or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors of the Company, then still in office, who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved, but excluding any director
whose initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) cease for any reason to constitute
a majority of the Board, then in office.

      

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

      

      “Committee” shall mean a
committee of the Board designated by the Board to administer the Plan and
composed of not less than two directors, each of whom is required to be a
“Nonemployee Director” (within the meaning of Rule 16b-3) and an “outside
director” (within the meaning of Section 162(m) of the Code) to the extent Rule
16b-3 and Section 162(m) of the Code, respectively, are applicable to the
Company and the Plan.   If at any time such a committee has not
been so designated, the Board shall constitute the Committee.

      

      “Company” shall mean
Limoneira Company, a Delaware corporation, together with any successor
thereto.

      

      “Covered Employee” shall mean
a “covered employee” as defined in Code Section 162(m)(3).

      

      “Effective Date” shall have
the meaning ascribed to it in Section 16(a).

      

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

      

      “Existing Plan” shall mean the
Limoneira Company Stock Grant Performance Bonus Plan.

      

      “Fair Market Value” shall
mean (i) with respect to any property other than Shares, the fair market value
of such property determined by such methods or procedures as shall be
established from time to time by the Committee and (ii) with respect to the
Shares, as of any date, (1) the closing sale price (excluding any “after hours”
trading) of the Shares as reported on the Nasdaq Stock Market for such date (or
if not then trading on the Nasdaq Stock Market, the closing sale price of the
Shares on the stock exchange or over-the-counter market on which the Shares are
principally trading on such date), or, if there were no sales on such date, on
the closest preceding date on which there were sales of Shares or (2) in the
event there shall be no public market for the Shares on such date, the fair
market value of the Shares as determined in good faith by the
Committee.

       

      
        
          
          

        

        
          - 2
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      “Good Reason” as a reason for
a Participant’s termination of employment or service shall have the meaning
assigned such term in the employment, severance or similar agreement, if any,
between the Participant and the Company or an Affiliate.   If the
Participant is not a party to an employment, severance or similar agreement with
the Company or an Affiliate in which such term is defined, then unless otherwise
defined in the applicable Award Agreement, for purposes of this Plan, the
Participant shall not be entitled to terminate his or her employment or service
for Good Reason.

      

      “Incentive Stock Option”
shall mean a right to purchase Shares from the Company that is granted
under Section 6 of the Plan and that is intended to meet the requirements of
Section 422 of the Code or any successor provision
thereto.   Incentive Stock Options may be granted only to
Participants who meet the definition of “employees” under Section 3401(c) of the
Code.

      

      “Negative Discretion” shall
mean the discretion authorized by the Plan to be applied by the Committee to
eliminate or reduce the size of a Performance Compensation Award; provided that the exercise of
such discretion would not cause the Performance Compensation Award to fail to
qualify as “performance-based compensation” under Section 162(m) of the
Code.   By way of example and not by way of limitation, in no
event shall any discretionary authority granted to the Committee by the Plan
including, but not limited to, Negative Discretion, be used to (a) grant or
provide payment in respect of Performance Compensation Awards for a Performance
Period if the Performance Goals for such Performance Period have not been
attained, or (b) increase a Performance Compensation Award above the maximum
amount payable under Section 4(a) or Section 11(d)(vi) of the
Plan.   In no event shall Negative Discretion be exercised by the
Committee with respect to any Option or Stock Appreciation Right (other than an
Option or Stock Appreciation Right that is intended to be a Performance
Compensation Award under Section 11 of the Plan).

      

      “Nonqualified Stock Option” shall mean a
right to purchase Shares from the Company that is granted under Section 6 of the
Plan and that is not intended to be an Incentive Stock Option.

      

      “Option” shall mean an
Incentive Stock Option or a Nonqualified Stock Option.

      

      “Other Stock-Based Award”
shall mean any right granted under Section 10 of the Plan.

      

      “Participant” shall mean any employee of,
or consultant to, the Company or its Affiliates, or nonemployee director who is
a member of the Board or the board of directors of an Affiliate, eligible for an
Award under Section 5 of the Plan and selected by the Committee to receive an
Award under the Plan.

      

      “Performance Award” shall
mean any right granted under Section 9 of the Plan.

      

      “Performance Compensation Award”
shall mean any Award designated by the Committee as a Performance
Compensation Award pursuant to Section 11 of the Plan.

       

      
        
          
          

        

        
          - 3
-

          
            

          

        

        
          
          

        

      

       

      “Performance Criteria” shall
mean the criterion or criteria that the Committee shall select for purposes of
establishing the Performance Goal(s) for a Performance Period with respect to
any Performance Compensation Award under the Plan.   The
Performance Criteria that will be used to establish the Performance Goal(s)
shall be based on the attainment of specific levels of performance of the
Company (or an Affiliate, division or operational unit of the Company) and shall be limited to the
following:   return on net assets, return on stockholders’
equity, return on assets, return on capital, revenue, average revenue per
subscriber, stockholder returns, profit margin, earnings per Share, net
earnings, operating earnings, free cash flow, earnings before interest, taxes,
depreciation and amortization, number of subscribers, growth of subscribers,
operating expenses, capital expenses, subscriber acquisition costs, Share price,
enterprise value, equity market capitalization or sales or market
share.   To the extent required under Section 162(m) of the Code,
the Committee shall, within the first ninety (90) days of a Performance Period
(or, if longer, within the maximum period allowed under Section 162(m) of the
Code), define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period.

      

      “Performance Formula” shall
mean, for a Performance Period, one or more objective formulas applied against
the relevant Performance Goals to determine, with regard to the Performance
Compensation Award of a particular Participant, whether all, some portion but
less than all, or none of the Performance Compensation Award has been earned for
the Performance Period.

      

      “Performance Goals” shall
mean, for a Performance Period, one or more goals established by the Committee
for the Performance Period based upon the Performance
Criteria.   The Committee is authorized at any time during the
first ninety (90) days of a Performance Period, or at any time thereafter (but
only to the extent the exercise of such authority after the first ninety (90)
days of a Performance Period would not cause the Performance Compensation Awards
granted to any Participant for the Performance Period to fail to qualify as
“performance-based compensation” under Section 162(m) of the Code), in its sole
discretion, to adjust or modify the calculation of a Performance Goal for such
Performance Period to the extent permitted under Section 162(m) of the Code in
order to prevent the dilution or enlargement of the rights of Participants, (a)
in the event of, or in anticipation of, any unusual or extraordinary corporate
item, transaction, event or development affecting the Company; or (b) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

      

      “Performance Period” shall
mean the one or more periods of time of at least one (1) year in duration, as
the Committee may select, over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Participant’s right to
and the payment of a Performance Compensation Award.

      

      “Person” shall mean any
individual, corporation, partnership, association, limited liability company,
joint-stock company, trust, unincorporated organization, government or political
subdivision.

      

      “Plan” shall mean this
Limoneira Company 2010 Omnibus Incentive Plan.

       

      
        
          
          

        

        
          - 4
-

          
            

          

        

        
          
          

        

      

       

      “Restricted Stock” shall mean
any Share granted under Section 8 of the Plan.

      

      “Restricted Stock Unit” shall
mean any unit granted under Section 8 of the Plan.

      

      “Rule 16b-3” shall mean Rule
16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any
successor rule or regulation thereto as in effect from time to
time.

      

      “SEC” shall mean the
Securities and Exchange Commission or any successor thereto and shall include
the Staff thereof.

      

      “Shares” shall mean the
common stock of the Company, $0.01 par value, or such other securities of the
Company (i) into which such common stock shall he changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of
shares or other similar transaction or (ii) as may be determined by the
Committee pursuant to Section 4(b) of the Plan.

      

      “Stock Appreciation Right”
shall mean any right granted under Section 7 of the Plan.

      

      “Substitute Awards” shall
have the meaning specified in Section 4(c) of the Plan.

      

      Section 3.   Administration.   a) The
Plan shall be administered by the Committee.   Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee shall
have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant and designate those
Awards which shall constitute Performance Compensation Awards; (iii) determine
the number of Shares to be covered by, or with respect to which payments,
rights, or other matters are to be calculated in connection with, Awards; (iv)
determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash,
Shares, other securities, other Awards or other property, or canceled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable
with respect to an Award (subject to Section 162(m) of the Code with respect to
Performance Compensation Awards) shall be deferred either automatically or at
the election of the holder thereof or of the Committee (in each case consistent
with Section 409A of the Code); (vii) interpret, administer or reconcile any
inconsistency, correct any defect, resolve ambiguities and/or supply any
omission in the Plan, any Award Agreement, and any other instrument or agreement
relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (ix) establish and
administer Performance Goals and certify whether, and to what extent, they have
been attained; and (x) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.

      

      (b)   Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive, and binding upon all Persons, including the
Company, any Affiliate, any Participant, any holder or beneficiary of any Award,
and any stockholder.

       

      
        
          
          

        

        
          - 5
-

          
            

          

        

        
          
          

        

      

       

      (c)   The
mere fact that a Committee member shall fail to qualify as a “Nonemployee
Director” or “outside director” within the meaning of Rule 16b-3 and Section
162(m) of the Code, respectively, shall not invalidate any Award made by the
Committee which Award is otherwise validly made under the Plan.

      

      (d)   No
member of the Committee shall be liable to any Person for any action or determination
made in good faith with respect to the Plan or any Award hereunder.

      

      (e)   With
respect to any Performance Compensation Award granted to a Covered
Employee   under the Plan, the Plan shall be interpreted and
construed in accordance with Section 162(m) of the Code.

      

      (f)   The
Committee may delegate to one or more officers of the Company (or, in the case
of awards of Shares, the Board may delegate to a committee made up of one or
more directors) the authority to grant awards to Participants who are not
executive officers or directors of the Company subject to Section 16 of the
Exchange Act or Covered Employees.

      

      Section 4.   Shares
Available for Awards.

      

      (a)   Shares
Available.

      

      (i)   Subject
to adjustment as provided in Section 4(b), the aggregate number of Shares with
respect to which Awards may be granted from time to time under the Plan shall in
the aggregate not exceed, at any time, 100,000 Shares; provided, that the aggregate
number of Shares with respect to which Incentive Stock Options may be granted
under the Plan shall be 80,000.   The maximum number of Shares
with respect to which Options and Stock Appreciation Rights may be granted to
any Participant in any fiscal year shall be 20,000 and the maximum number of
Shares which may he paid to a Participant in the Plan in connection with the
settlement of any Award(s) designated as “Performance Compensation Awards” in
respect of a single Performance Period shall be 50,000 or, in the event such
Performance Compensation Award is paid in cash, the equivalent cash value
thereof.

      

      (ii)   Shares
covered by an Award granted under the Plan shall not be counted unless and until
they are actually issued and delivered to a Participant and, therefore, the
total number of Shares available under the Plan as of a given date shall not be
reduced by Shares relating to prior Awards that have expired or have been
forfeited or cancelled, and upon payment in cash of the benefit provided by any
Award, any Shares that were covered by such Award will be available for issue
hereunder.   Notwithstanding anything to the contrary contained
herein: (A) if Shares are tendered or otherwise used in payment of the exercise
price of an Option, the total number of Shares covered by the Option being
exercised shall reduce the aggregate limit described in Section 4(a)(i); (B)
Shares withheld by the Company to satisfy a tax withholding obligation shall
count against the aggregate limit described in Section 4(a)(i); and (C) the
number of Shares covered by a Stock Appreciation Right, to the extent that it is
exercised and settled in Shares, and whether or not Shares are actually issued
to the Participant upon exercise of the Stock Appreciation Right, shall be
considered issued or transferred pursuant to the Plan.   If,
under this Plan, a Participant has elected to give up the right to receive
compensation in exchange for Shares based on fair market value, such Shares will
not count against the aggregate limit described in Section 4(a)(i).

       

      
        
          
          

        

        
          - 6
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      (b)   Adjustments.   Notwithstanding
any provisions of the Plan to the contrary, in the event that the Committee
determines in its sole discretion that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other corporate
transaction or event affects the Shares such that an adjustment is appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee shall
equitably adjust any or all of (i) the number of Shares or other securities of
the Company (or number and kind of other securities or property) with respect to
which Awards may be granted, (ii) the number of Shares or other securities of
the Company (or number and kind of other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award in consideration for the cancellation of such Award,
which, in the case of Options and Stock Appreciation Rights shall equal the
excess, if any, of the Fair Market Value of the Share subject to each such
Option or Stock Appreciation Right over the per Share exercise price or grant
price of such Option or Stock Appreciation Right.

      

      (c)   Substitute
Awards.   Awards may, in the discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its Affiliates or a company acquired
by the Company or with which the Company combines (“Substitute
Awards”).   The number of Shares underlying any Substitute Awards
shall be counted against the aggregate number of Shares available for Awards
under the Plan.

      

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

      

      Section 5.   Eligibility.   Any
employee of, or consultant to, the Company or any of its Affiliates (including
any prospective employee), or nonemployee director who is a member of the Board
or the board of directors of an Affiliate, shall be eligible to be selected as a
Participant.

      

      Section 6.   Stock Options.

      

      (a)   Grant.   Subject
to the terms of the Plan, the Committee shall have sole authority to determine
the Participants to whom Options shall be granted, the number of Shares to be
covered by each Option, the exercise price thereof and the conditions and
limitations applicable to the exercise of the Option.   The
Committee shall have the authority to grant Incentive Stock Options, or to grant
Nonqualified Stock Options, or to grant both types of
Options.   In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as may
be prescribed by Section 422 of the Code, as from time to time amended, and any
regulations implementing such statute.   All Options when granted
under the Plan are intended to be Nonqualified Stock Options, unless the
applicable Award Agreement expressly states that the Option is intended to be an
Incentive Stock Option.   If an Option is intended to be an
Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
Nonqualified Stock Option appropriately granted under the Plan; provided that such Option (or
portion thereof) otherwise complies with the Plan’s requirements relating to
Nonqualified Stock Options.   No Option shall be exercisable more
than ten years from the date of grant.

       

      
        
          
          

        

        
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      (b)   Exercise Price. The Committee
shall establish the exercise price at the time each Option is granted, which
exercise price shall be set forth in the applicable Award Agreement and which
shall not be less than the Fair Market Value per Share on the date of
grant.

      

      (c)   Exercise.   Each
Option shall be exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify in the
applicable Award Agreement.   The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable.

      

      (d)   Payment.   i)
No Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the aggregate exercise price therefore is received by the
Company.   Such payment may be made in cash, or its equivalent,
or (x) by exchanging Shares owned by the optionee (which are not the subject of
any pledge or other security interest and which have been owned by such optionee
for at least six months), or (y) subject to such rules as may be established by
the Committee, through delivery of irrevocable instructions to a broker to sell
the Shares otherwise deliverable upon the exercise of the Option and to deliver
promptly to the Company an amount equal to the aggregate exercise price or by a
combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company as of the date of such tender is at least
equal to such aggregate exercise price.

      

      (ii)   Wherever
in this Plan or any Award Agreement a Participant is permitted to pay the
exercise price of an Option or taxes relating to the exercise of an Option by
delivering Shares, the Participant may, subject to procedures satisfactory to
the Committee, satisfy such delivery requirement by presenting proof of
beneficial.   ownership of such Shares, in which case the Company
shall treat the Option as exercised without further payment and shall withhold
such number of Shares from the Shares acquired by the exercise of the
Option.

      

      Section
7.   Stock Appreciation
Rights.

      

      (a)   Grant.   Subject
to the provisions of the Plan, the Committee shall have sole authority to
determine the Participants to whom Stock Appreciation Rights shall be granted,
the number of Shares to be covered by each Stock Appreciation Right Award, the
grant price thereof and the conditions and limitations applicable to the
exercise thereof.   Stock Appreciation Rights with a grant price
equal to or greater than the Fair Market Value per Share as of the date of grant
are intended to qualify as “performance-based compensation” under Section 162(m)
of the Code.   In the sole discretion of the Committee, Stock
Appreciation Rights may, but need not, be intended to qualify as
performance-based compensation in accordance with Section 11
hereof.   Stock Appreciation Rights may be granted in tandem with
another Award, in addition to another Award, or freestanding and unrelated to
another Award.   Stock Appreciation Rights granted in tandem with
or in addition to an Award may be granted either before, at the same time as the
Award or at a later time No Stock Appreciation Right shall be exercisable more
than ten years from the date of grant.

       

      
        
          
          

        

        
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      (b)   Exercise and
Payment.   A Stock Appreciation Right shall entitle the
Participant to receive an amount equal to the excess of the Fair Market Value of
a Share on the date of exercise of the Stock Appreciation Right over the grant
price thereof (which shall not be less than the Fair Market Value on the date of
grant).   The Committee shall determine in its sole discretion
whether a Stock Appreciation Right shall be settled in cash, Shares or a
combination of cash and Shares.

      

      (c)   Other Terms and
Conditions.   Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at the grant of a
Stock Appreciation Right, the term, methods of exercise, methods and form of
settlement, and any other terms and conditions of any Stock Appreciation
Right.   The Committee may impose such conditions or restrictions
on the exercise of any Stock Appreciation Right as it shall deem
appropriate.

      

      Section 8.   Restricted
Stock and Restricted Stock Units.

      

      (a)   Grant.   Subject
to the provisions of the Plan, the Committee shall have sole authority to
determine the Participants to whom Shares of Restricted Stock and Restricted
Stock Units shall be granted, the number of Shares of Restricted Stock and/or
the number of Restricted Stock Units to be granted to each Participant, the
duration of the period during which, and the conditions, if any, under which,
the Restricted Stock and Restricted Stock Units may be forfeited to the Company,
and the other terms and conditions of such Awards.

      

      (b)   Transfer
Restrictions.   Shares of Restricted Stock and Restricted
Stock Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Stock, as provided in the Plan or
the applicable Award Agreements.   Unless otherwise directed by
the Committee, (i) certificates issued in respect of Shares of Restricted Stock
shall be registered in the name of the Participant and deposited by such
Participant, together with a stock power endorsed in blank, with the Company, or
(ii) Shares of Restricted Stock shall be held at the Company’s transfer agent in
book entry form with appropriate restrictions relating to the transfer of such
Shares of Restricted Stock.   Upon the lapse of the restrictions
applicable to such Shares of Restricted Stock, the Company shall, as applicable,
either deliver such certificates to the Participant or the Participant’s legal
representative or the transfer agent shall remove the restrictions relating to
the transfer of such Shares.

      

      (c)   Payment.   Each
Restricted Stock Unit shall have a value equal to the Fair Market Value of a
Share.   Restricted Stock Units shall be paid in cash, Shares,
other securities or other property, as determined in the sole discretion of the
Committee, upon the lapse of the restrictions applicable thereto, or otherwise
in accordance with the applicable Award Agreement.   Dividends
paid on any Shares of Restricted Stock shall be paid directly to the
Participant, withheld by the Company subject to vesting of the Restricted Stock
pursuant to the terms of the applicable Award Agreement, or may be reinvested in
additional Shares of Restricted Stock or in additional Restricted Stock Units,
as determined by the Committee in its sole discretion.

       

      
        
          
          

        

        
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      Section 9.   Performance
Awards.

      

      (a)   Grant.   The
Committee shall have sole authority to determine the Participants who shall
receive a “Performance Award”, which shall consist of a right which is (i)
denominated in cash or Shares, (ii) valued, as determined by the Committee, in
accordance with the achievement of such Performance Goals during such
Performance Periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.

      

      (b)   Terms and
Conditions.   Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance Goals
to be achieved during any Performance Period, the length of any Performance
Period, the amount of any Performance Award and the amount and kind of any
payment or transfer to he made pursuant to any Performance Award.

      

      (c)   Payment of Performance
Awards.   Performance Awards may be paid in a lump sum or
in installments following the close of the Performance Period as set forth in
the Award Agreement on the date of grant.

      

      Section 10.   Other
Stock-Based Awards.

      

      (a)   General.   The
Committee shall have authority to grant to Participants an “Other Stock-Based
Award”, which shall consist of any right which is (i) not an Award described in
Sections 6 through 9 above and (ii) an Award of Shares or an Award denominated
or payable in, valued in whole or in part by reference to, or otherwise based on
or related to, Shares (including, without limitation, securities convertible
into Shares), as deemed by the Committee to he consistent with the purposes of
the Plan; provided that
any such rights must comply, to the extent deemed desirable by the Committee,
with Rule 16b-3 and applicable law.   Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine the terms
and conditions of any such Other Stock-Based Award, including the price, if any,
at which securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan.

      

      (b)   Dividend
Equivalents.   In the sole discretion of the Committee, an
Award (other than Options or Stock Appreciation Rights), whether made as an
Other Stock-Based Award under this Section 10 or as an Award granted pursuant to
Sections 6 through 9 hereof, may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis; provided, that in the case of
Awards with respect to which any applicable Performance Criteria have not been
achieved, dividend equivalents may be paid only on a deferred basis, to the
extent the underlying Award vests.

      

      Section
11.   Performance
Compensation Awards.

      

      (a)   General.   The
Committee shall have the authority, at the time of grant of any Award described
in Sections 6 through 10 of the Plan (other than Options and Stock Appreciation
Rights), to designate such Award as a Performance Compensation Award in order to
qualify such Award as “performance-based compensation” under Section 162(m) of
the Code.

       

      
        
          
          

        

        
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      (b)   Eligibility.   The
Committee will, in its sole discretion, designate within the first ninety (90)
days of a Performance Period (or, if longer, within the maximum period allowed
under Section 162(m) of the Code) which Participants will be eligible to receive
Performance Compensation Awards in respect of such Performance
Period.   Designation of a Participant eligible to receive an
Award hereunder for a Performance Period shall not in any manner entitle the
Participant to receive payment in respect of any Performance, Compensation Award
for such Performance Period.   The determination as to whether or
not such Participant becomes entitled to payment in respect of any Performance
Compensation Award shall be decided solely in accordance with the provisions of
this Section 11.   Moreover, designation of a Participant
eligible to receive an Award hereunder for a particular Performance Period shall
not require designation of such Participant eligible to receive an Award
hereunder in any subsequent Performance Period and designation of one person as
a Participant eligible to receive an Award hereunder shall not require
designation of any other person as a Participant eligible to receive an Award
hereunder in such period or in any other period.

      

      (c)   Discretion of Committee with Respect
to Performance Compensation Awards.   With regard to a
particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type(s) of Performance
Compensation Awards to be issued, the Performance Criteria that will be used to
establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goals(s) is/are to apply to the Company and the Performance
Formula.   Within the first ninety (90) days of a Performance
Period (or, if longer, within the maximum period allowed under Section 162(m) of
the Code), the Committee shall, with regard to the Performance Compensation
Awards to be issued for such Performance Period, exercise its discretion with
respect to each of the matters enumerated in the immediately preceding sentence
of this Section 11(c) and record the same in writing.

      

      (d)   Payment of Performance Compensation
Awards.   ii) Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company on the last day
of a Performance Period to be eligible for payment in respect of a Performance
Compensation Award for such Performance Period.

      

      (ii)   Limitation.   A Participant shall be
eligible to receive payment in respect of a Performance Compensation Award only
to the extent that: (1) the Performance Goals for such period are achieved; and
(2) the Performance Formula as applied against such Performance Goals determines
that all or some portion of such Participant’s Performance Award has been earned
for the Performance Period.

      

      (iii)   Certification. Following the
completion of a Performance Period, the Committee shall meet to review and
certify in writing whether, and to what extent, the Performance Goals for the
Performance Period have been achieved and, if so, to calculate and certify in
writing that amount of the Performance Compensation Awards earned for the period
based upon the Performance Formula.   The Committee shall then
determine the actual size of each Participant’s Performance Compensation Award
for the Performance Period and, in so doing, may apply Negative Discretion, if
and when it deems appropriate.

      

      (iv)   Negative
Discretion.   In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgment, such reduction or elimination is
appropriate.

       

      
        
          
          

        

        
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      (v)   Timing of Award
Payments.   The Awards granted for a Performance Period
shall be paid to Participants as soon as administratively possible following
completion of the certifications required by this Section 11; provided that in no event
shall any Award granted for a Performance Period be paid later than the
fifteenth day of the third month following the end of such Performance
Period.

      

      (vi)   Maximum Award
Payable.   Notwithstanding any provision contained in the
Plan to the contrary, the maximum Performance Compensation Award payable to any
one Participant under the Plan for a Performance Period is 50,000 Shares or, in
the event the Performance Compensation Award is paid in cash, the equivalent
cash value thereof on the last day of the Performance Period to which such Award
relates.   Furthermore, any Performance Compensation Award that
has been deferred shall not (between the date as of which the Award is deferred
and the payment date) increase (i) with respect to Performance Compensation
Award that is payable in cash, by a measuring factor for each fiscal year
greater than a reasonable rate of interest set by the Committee or (ii) with
respect to a Performance Compensation Award that is payable in Shares, by an
amount greater than the appreciation of a Share from the date such Award is
deferred to the payment date.

      

      Section 12.   Amendment
and Termination.

      

      (a)   Amendments to the Plan. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or any portion thereof at any
time; provided that if
an amendment to the Plan that (i) would materially increase the benefits
accruing to Participants under the Plan, (ii) would materially increase the
number of securities which may be issued under the Plan, (iii) would materially
modify the requirements for participation in the Plan or (iv) must otherwise be
approved by the stockholders of the Company in order to comply with applicable
law or the rules of the Nasdaq Stock Market, or, if the Shares are not traded on
the Nasdaq Stock Market, the principal national securities exchange upon which
the Shares are traded or quoted, such amendment will be subject to stockholder
approval and will not be effective unless and until such approval has been
obtained; and provided,
further, that any such amendment, alteration, suspension, discontinuance
or termination that would impair the rights of any Participant or any holder or
beneficiary of any Award previously granted shall not be effective without the
written consent of the affected Participant, holder or beneficiary.

      

      (b)   Amendments to Awards. The Committee may waive
any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or
beneficiary of any Award previously granted shall not be effective without the
written consent of the affected Participant, holder or beneficiary.

      

      (c)   Adjustment of Awards Upon the
Occurrence of Certain Unusual or Nonrecurring
Events.   The Committee is hereby authorized to make
equitable adjustments in the terms and conditions of, and the criteria included
in, all outstanding Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(b) hereof)
affecting the Company, any Affiliate, or the financial statements of the Company
or any Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

       

      
        
          
          

        

        
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      (d)   Repricing.   Except
in connection with a corporate transaction or event described in Section 4(b)
hereof, the terms of outstanding Awards may not be amended to reduce the
exercise price of Options or the grant price of Stock Appreciation Rights, or
cancel Options or Stock Appreciation Rights in exchange for cash, other awards
or Options or Stock Appreciation Rights with an exercise price or grant price,
as applicable, that is less than the exercise price of the original Options or
grant price of the original Stock Appreciation Rights, as applicable, without
stockholder approval.

      

      Section
13.   Change of
Control.

      

      (a)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant, to the extent outstanding Awards granted under
this Plan are not assumed, converted or replaced by the resulting entity in the
event of a Change of Control, all outstanding Awards that may be exercised shall
become fully exercisable, all restrictions with respect to outstanding Awards
shall lapse and become vested and non-forfeitable, and any specified Performance
Goals with respect to outstanding Awards shall be deemed to be satisfied at
target.

      

      (b)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant or thereafter, to the extent outstanding Awards
granted under this Plan are assumed, converted or replaced by the resulting
entity in the event of a Change of Control, (i) any outstanding Awards that are
subject to Performance Goals shall be converted by the resulting entity as if
target performance had been achieved as of the date of the Change of Control,
(ii) each Performance Award or Performance Compensation Award with service
requirements shall continue to vest with respect to such requirements during the
remaining period set forth in the Award Agreement, and (iii) all other Awards
shall continue to vest (and/or the restrictions thereon shall continue to lapse)
during the remaining period set forth in the Award Agreement.

      

      (c)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant or thereafter, to the extent outstanding Awards
granted under this Plan are either assumed, converted or replaced by the
resulting entity in the event of a Change of Control, if a Participant’s
employment or service is terminated without Cause by the Company or an Affiliate
or a Participant terminates his or her employment or service with the Company or
an Affiliate for Good Reason (if applicable), in either case, during the two
year period following a Change of Control, all outstanding Awards held by the
Participant that may be exercised shall become fully exercisable and all
restrictions with respect to outstanding Awards shall lapse and become vested
and non-forfeitable.

       

      
        
          
          

        

        
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      (d)   Notwithstanding
anything in this Plan or any Award Agreement to the contrary, to the extent any
provision of this Plan or an Award Agreement would cause a payment of deferred
compensation that is subject to Section 409A of the Code to be made upon the
occurrence of (i) a Change of Control, then such payment shall not be made
unless such Change of Control also constitutes a “change in ownership”, “change
in effective control” or “change in ownership of a substantial portion of the
Company’s assets” within the meaning of Section 409A of the Code or (ii) a
termination of employment or service, then such payment shall not be made unless
such termination of employment or service also constitutes a “separation from
service” within the meaning of Section 409A of the Code.   Any
payment that would have been made except for the application of the preceding
sentence shall be made in accordance with the payment schedule that would have
applied in the absence of a Change of Control or termination of employment or
service, but disregarding any future service or performance
requirements.

      

      Section
14.   General
Provisions.

      

      (a)   Nontransferability.

      

      (i)   Each
Award, and each right under any Award, shall be exercisable only by the
Participant during the Participant’s lifetime, or, if permissible under
applicable law, by the Participant’s legal guardian or
representative.

      

      (ii)   No
Award may be sold, assigned, alienated, pledged, attached or otherwise
transferred or encumbered by a Participant otherwise than by will or by the laws
of descent and distribution, and any such purported sale, assignment,
alienation, pledge, attachment, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the designation
of a beneficiary shall not constitute a sale, assignment, alienation, pledge,
attachment, transfer or encumbrance.

      

      (b)   No Rights to Awards. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Participants, or holders or beneficiaries of
Awards.   The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant (whether or not such Participants are similarly
situated).

      

      (c)   Share Certificates. Shares or other
securities of the Company delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.

      

      (d)   Withholding.   iii)
A Participant may
he required to pay to the Company or any Affiliate, and the Company or any
Affiliate shall have the right and is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, other Awards or other property) of any
applicable withholding taxes in respect of an Award, its exercise, or any
payment or transfer under an Award or under the Plan and to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes.

       

      
        
          
          

        

        
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      (ii)   Without
limiting the generality of clause (i) above, a Participant may satisfy, in whole
or in part, the foregoing withholding liability by delivery of Shares owned by
the Participant (which are not subject to any pledge or other security interest
and which have been owned by the Participant for at least six (6) months) with a
Fair Market Value equal to such withholding liability or by having the Company
withhold from the number of Shares otherwise issuable pursuant to the exercise
of the option a number of Shares with a Fair Market Value equal to such
withholding liability.

      

      (e)   Award
Agreements.   Each Award hereunder shall he evidenced by
an Award Agreement which shall he delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the death, disability
or termination of employment or service of a Participant and the effect, if any,
of such other events as may he determined by the Committee.

      

      (f)   No Limit on Other Compensation
Arrangements.   Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing in effect other
compensation arrangements, which may, but need not, provide for the grant of
options, restricted stock, Shares and other types of Awards provided for
hereunder (subject to stockholder approval if such approval is required), and
such arrangements may be either generally applicable or applicable only in
specific cases.

      

      (g)   No Right to
Employment.   The grant of an Award shall not he construed
as giving a Participant the right to be retained in the employ of, or in any
consulting relationship to, or as a director on the Board or board of directors,
as applicable, of, the Company or any Affiliate.   Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or
discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan, any Award
Agreement or any applicable employment contract or agreement.

      

      (h)   No Rights as
Stockholder. Subject to the
provisions of the applicable Award, no Participant or holder or beneficiary of
any Award shall have any fights as a stockholder with respect to any Shares to
be distributed under the Plan until he or she has become the holder of such
Shares.   Notwithstanding the foregoing, in connection with each
grant of Restricted Stock hereunder, the applicable Award shall specify if and
to what extent the Participant shall not be entitled to the rights of a
stockholder in respect of such Restricted Stock.

      

      (i)   Governing Law. The validity,
construction, and effect of the Plan and any rules and regulations relating to
the Plan and any Award Agreement shall be determined in accordance with the laws
of the State of Delaware, applied without giving effect to its conflict of laws
principles.

      

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

       

      
        
          
          

        

        
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      (k)   Other Laws. The Committee may
refuse to issue or transfer any Shares or other consideration under an Award if,
acting in its sole discretion, it determines that the issuance or transfer of
such Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of the
Exchange Act, and any payment tendered to the Company by a Participant, other
holder or beneficiary in connection with the exercise of such Award shall be
promptly refunded to the relevant Participant, holder or
beneficiary.   Without limiting the generality of the foregoing,
no Award granted hereunder shall be construed as an offer to sell securities of
the Company, and no such offer shall be outstanding, unless and until the
Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws.

      

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

      

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

      

      (n)   Deferrals.   In the event the Committee
permits a Participant to defer any Award payable in the form of cash, all such
elective deferrals shall be accomplished by the delivery of a written,
irrevocable election by the Participant on a form provided by the
Company.   All deferrals shall be made in accordance with
administrative guidelines established by the Committee to ensure that such
deferrals comply with all applicable requirements of Section 409A of the
Code.

      

      (o)   Headings. Headings are given to
the Sections and subsections of the Plan solely as a convenience to facilitate
reference.   Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Plan or any provision
thereof.

      

      Section
15.   Compliance
with Section 409A of the Code.

      

      (a)   To
the extent applicable, it is intended that this Plan and any grants made
hereunder comply with the provisions of Section 409A of the Code, so that the
income inclusion provisions of Section 409A(a)(1) of the Code do not apply to
the Participants.   This Plan and any grants made hereunder shall
be administered in a manner consistent with this intent.

       

      
        
          
          

        

        
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      (b)   Neither
a Participant nor any of a Participant’s creditors or beneficiaries shall have
the right to subject any deferred compensation (within the meaning of Section
409A of the Code) payable under this Plan and grants hereunder to any
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment.   Except as permitted under Section
409A of the Code, any deferred compensation (within the meaning of Section 409A
of the Code) payable to a Participant or for a Participant’s benefit under this
Plan and grants hereunder may not be reduced by, or offset against, any amount
owing by a Participant to the Company or any of its Affiliates.

      

      (c)   If,
at the time of a Participant’s separation from service (within the meaning of
Section 409A of the Code), (i) the Participant shall be a specified employee
(within the meaning of Section 409A of the Code and using the identification
methodology selected by the Company from time to time) and (ii) the Company
shall make a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the
Code) the payment of which is required to be delayed pursuant to the six- (6-)
month delay rule set forth in Section 409A of the Code in order to avoid taxes
or penalties under Section 409A of the Code, then the Company shall not pay such
amount on the otherwise scheduled payment date but shall instead pay it, with
interest, on the earlier of the first business day of the seventh month or
death.

      

      (d)   Notwithstanding
any provision of this Plan and grants hereunder to the contrary, in light of the
uncertainty with respect to the proper application of Section 409A of the Code,
the Company shall amend this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under
Section 409A of the Code.   In any case, a Participant shall he
solely responsible and liable for the satisfaction of all taxes and penalties
that may he imposed on a Participant or for a Participant’s account in
connection with this Plan and grants hereunder (.including
any taxes and penalties under Section 409A of the Code), and neither the Company
nor any of its Affiliates shall have any obligation to indemnify or otherwise
hold a Participant harmless from any or all of such taxes or
penalties.

      

      Section
16   Term of
the Plan.

      

      (a)   Effective
Date.   The Plan shall be effective as of the date of its
approval by the Board (the “Effective Date”), subject to approval of the Plan by
the stockholders of the Company.   No grants will be made under
the Existing Plan on or after the date the Plan is first approved by the
stockholders of the Company, except that outstanding awards granted under the
Existing Plan will continue unaffected following the Effective
Date.

      

      (b)   Expiration
Date.   No grant will be made under this Plan more than
ten (10) years after the Effective Date, but all grants made on or prior to such
date will continue in effect thereafter subject to the terms thereof and of this
Plan.

      

      

      * *
*

    

     

    
      
        
        

      

      
        - 17
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