Document:

ex10_1.htm

    
      
        

      

      Exhibit
10.1

      

      AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

      

      This
Amended and Restated Employment Agreement (the “Agreement”) is made this 17th
day of December, 2008, and shall be effective as of the 6th day of
January, 2009 (the “Effective Date”) between POMEROY IT SOLUTIONS, INC., a
Delaware Corporation (the “Company”) and Christopher C. Froman (the
“Executive”).

      

      W
I T N E S S E T H:

      

      WHEREAS, the Company and
Executive entered into an Employment Agreement, dated and made effective on
December 10, 2007;

      

      WHEREAS, the Company and the
Executive desire to amend and restate the Employment Agreement in its entirety
to reflect certain changes agreed upon by Company and Executive regarding his
promotion to the positions of President and Chief Executive Officer and
compensation incident thereto;

      

      NOW THEREFORE, in
consideration of the continued employment of the Executive by the Company and
the benefits to be derived by the Executive hereunder, and of the Executive’s
agreement to continued employment by the Company as provided herein, the parties
hereto hereby agree as follows:

      

      
        	
                 
      

              	
                1.

              	
                Position/Duties.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Executive
      shall serve as the President and Chief Executive Officer of the Company.
      In this capacity, Executive shall have such duties, authorities and
      responsibilities commensurate with the duties, authorities and
      responsibilities of persons in similar capacities in similar size
      companies and such other duties and responsibilities as the Board of
      Directors of the Company (“Board”) shall from time to time assign to him
      consistent with the Executive’s position as President and Chief Executive
      Officer of the Company.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                During
      the Employment Term (as defined in Section 2), the Executive shall devote
      substantially all his business time and efforts to the business and
      affairs of the Company and the performance of his duties
      hereunder.  In addition, Executive shall not render services of
      a business, professional or commercial nature to any other person, firm or
      corporation, including board of director positions, whether for
      compensation or otherwise, during the Employment Term without the prior
      consent of the Board.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (c)

              	
                Executive’s
      primary workplace shall be the Company’s offices in Hebron, Kentucky,
      except for usual and customary travel on the Company’s
      business.

              

      

      

      
        	
                 
      

              	
                2.

              	
                Term of
      Employment.

              

      

      

      This
Agreement shall be in effect beginning on the Effective Date and terminating
upon the earlier of (a)  three years (January 6,  2009 –
January 5, 2012) (the “Initial Term”) or (b) the Date of Termination as defined
in Section 8(g).  The period of time from the Effective Date through
the Initial Term and any Renewal Term, as defined in Section 3, or the Date of
Termination, as applicable, is referred to as the “Employment
Term”.

      

      
        	
                 
      

              	
                3.

              	
                Renewal
      Term.

              

      

      

      The term
of Executive’s employment and this Agreement shall automatically renew for
additional consecutive renewal terms of one (1) year unless either party gives
written notice of his/its intent not to renew the terms of the Agreement ninety
(90) days prior to the expiration of the then expiring
term.  Executive’s Base Salary for each Renewal Term shall be
negotiated and mutually agreed upon by and between the Company and Executive;
however, in no event shall Executive’s Base Salary for any Renewal Term be less
than the Base Salary in effect for the prior year.

      

      
        	
                 
      

              	
                4.

              	
                Base
      Salary.

              

      

      

      During
each fiscal year of the Company during the Initial Term of this Agreement, the
Company agrees to pay Executive a base salary (“Base Salary”) at an annual rate
of Three Hundred Fifty Thousand Dollars ($350,000.00). Said Base Salary shall be
payable in accordance with the regular payroll practices of the Company, but not
less frequently than monthly.  Executive’s Base Salary shall be
subject to an annual review by the Board or a committee thereof (and may be
increased, but not decreased, from time to time by the Board).

      

      
        	
                 
      

              	
                5.

              	
                Bonuses.

              

      

      

      Each year
during the Initial Term, Executive shall have the opportunity to earn both a
quarterly and annual targeted bonus measured against financial criteria
consisting primarily of NPBT (as defined below) (as determined by the Board or a
committee thereof), of at least Three Hundred Fifty Thousand Dollars
($350,000.00), with a potential bonus in excess of such amount for achievement
above target and a reduced bonus for achievement below target, all in accordance
with the applicable bonus plan.  For the first year of this Agreement,
two-thirds (2/3) of the potential targeted bonus shall be based upon the
attainment of quarterly criteria and one-third (1/3) shall be allocated to
annual attainment.  Thereafter, the Board or a committee thereof will
determine the amount of bonus potential to be based on achievement of quarterly
criteria and the amount that shall be allocated to annual
attainment.  The bonus plan shall provide that under-performance in
one quarter can be made up in subsequent quarters on a year-to-date
basis.  The quarterly and annual bonuses payable to Executive during
the Employment Term shall be fully paid in cash.  For purposes of this
Agreement, the Net Profit Before Taxes (“NPBT”) shall be determined on a
consolidated basis computed without regard to the bonus payable to Executive
pursuant to this Section 5, shall exclude any gains or losses realized by
Company on the sale or other disposition of its assets other than in the
ordinary course of business and shall exclude any extraordinary one-time charges
taken by the Company.  NPBT shall be determined by the independent
accountant regularly retained by the Company, subject to the foregoing
provisions of this subparagraph and in accordance with generally accepted
accounting principles.  Said determinations and payment of any bonus
shall be made no later than the fifteenth (15th) day of
the third (3rd) month
following the end of the Company’s taxable year, and the determinations by the
accountant shall be final, binding and conclusive on all parties
hereto.  In the event the audited financial statements are not issued
before the fifteenth (15th) day of
the third (3rd) month
following the end of the Company’s taxable year, Company shall make any payment
due hereunder, if any, based on its best reasonable estimate of any liability
hereunder, which amount shall be recorded and shall be reconciled by both
parties once the audited financial statements are issued but in no event later
than the end of the calendar year in which the Company’s taxable year
ends.  Any quarterly bonus determinations shall be determined on a
consolidated basis by the independent accountant regularly retained by the
Company subject to the foregoing provisions of this paragraph and in accordance
with generally accepted accounting principles.  Any amount due
hereunder shall be paid within fifteen (15) days of the filing of Form 10-Q by
the Company for the respective quarter, but in no event later than the fifteenth
(15th) day of
the third (3rd) month
following the end of the Company’s taxable year. In the event that Company
acquires during any applicable fiscal year a company that had gross revenues in
excess of Twenty-Five Million Dollars ($25,000,000.00) for its most recently
concluded fiscal year, Company and Executive shall in good faith determine
whether any adjustments to the NPBT criteria, whether upward or downward, shall
be made in order to reflect the effect of such acquisition on the operations of
the Company.

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                6.

              	
                Equity
      Awards.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Stock
      Options.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                On
      the Effective Date, Executive shall be awarded an option to acquire the
      number of shares of the Company's common stock under the Company’s Amended
      and Restated 2002 Stock Incentive Plan (“Plan”) that is equal to Two
      Hundred Thirty-Six Thousand Two Hundred Fifty Dollars ($236,250.00) in
      value as determined by the application of the binomial/lattice stock
      option valuation model, which has been consistently used by the
      Company.  The purchase price for these options will be at the
      fair market value of such common shares as of the date of the
      award.  For purposes of this Agreement, the fair market value as
      of the applicable date shall mean, with respect to the common shares, the
      closing sales price of a share of the Company’s common stock on the
      over-the-counter market on the last market trading day prior to the date
      on which the value is to be determined (or the next preceding date on
      which sales occurred, if there were no sales on such
      date).  One-Fourth of the shares shall vest on the Effective
      Date and the remaining shares shall vest thereafter in equal one-fourth
      installments on each of the first three annual anniversaries of the date
      of grant. The term of the award set forth above shall be for a period of
      five (5) years from the date of such award. In the event the Company does
      not renew this Agreement at the expiration of the Initial Term of this
      Agreement pursuant to the provisions of Section 3, 100% of such options
      shall fully vest immediately upon the expiration of the Initial Term of
      this Agreement.  A copy of the Award Agreement is attached
      hereto as Exhibit A.  The options to be granted incident hereto
      shall be non-qualified stock options and shall not be treated by the
      Company or the Executive as an incentive stock option for federal income
      tax purposes.

              

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (ii)

              	
                In
      the event a Change In Control (as defined in Section 10) occurs during the
      Initial Term of this Agreement, then all shares awarded under Section
      6(a)(i) shall be fully vested immediately prior to the Change In
      Control.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                In
      addition, on each annual anniversary of the Effective Date, Executive
      shall be eligible for an additional stock option grant at the sole
      discretion of the Board or a committee
thereof.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Restricted
      Stock.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                On
      the Effective Date, the Company shall grant Executive an equity award of
      restricted stock under the Plan in the number of  shares of the
      Company’s common stock that is equal to Two Hundred Thirty-Six Thousand
      Two Hundred Fifty Dollars ($236,250.00) at the fair market value of such
      common shares as of the date of the award.  Said restricted
      stock shall vest and the restrictions thereon shall lapse in full on the
      fourth (4th)
      annual anniversary grant date. In the event a Change In Control occurs
      during the Initial Term of this Agreement, One Hundred Percent (100%) of
      such restricted stock shall fully vest and the restrictions thereon shall
      lapse immediately prior to the Change In Control.  In the event
      that Company does not renew this Agreement at the expiration of the
      Initial Term of this Agreement pursuant to the provisions of Section 3,
      100% of such restricted stock shall fully vest and the restrictions
      thereon shall lapse immediately upon the expiration of the Initial Term of
      this Agreement.   A copy of the Restricted Stock Award
      Agreement is attached hereto as Exhibit B.  (ii) In addition, on
      each annual anniversary of the Effective Date, Executive shall be eligible
      for an additional award of restricted stock under the Plan at the sole
      discretion of the Board or a committee
thereof.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Adjustments to Number
      of Shares.  The provisions of this Section 6 shall be
      appropriately adjusted for any stock splits, reverse splits, stock
      dividends, combinations or reclassifications of the Company’s common
      stock, or any other similar increases or decreases in the number of issued
      shares of such common stock affected without receipt of consideration by
      the Company.

              

      

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (d)

              	
                Representations and
      Warranties of the Company.  The Company represents and
      warrants to Executive that (i) the shares he acquires pursuant to
      options and restricted stock awards as provided for in this Agreement will
      be issued under the Plan; (ii) the Plan and the options and
      restricted stock awards to be made hereunder are covered under a Form S-8
      registration statement (the effectiveness of which shall continue to be
      maintained so that Executive can resell the shares he receives pursuant to
      options and restricted stock awards pursuant to this Agreement on a
      current basis once exercised or vested, as applicable), (iii) there
      are currently, and will continue to be, adequate shares available under
      the Plan for the issuance of stock pursuant to all options and the
      restricted stock awards provided for in this Agreement; and (iv) the
      Plan permits the contemplated provisions of such
  grants.

              

      

      

      
        	
                 
      

              	
                7.

              	
                Fringe
      Benefits.

              

      

      

      During
the Employment Term, Executive shall be entitled to the following
benefits:

      

      
        	
                 
      

              	
                (a)

              	
                Insurance.  Executive
      shall be provided with standard medical, health, and other insurance
      coverage in accordance with the plans from time to time maintained by the
      Company for its senior management
employees.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Vacation.  Executive
      shall be entitled each year to four (4) weeks of vacation, during which
      his compensation will be paid in full; provided, however, Executive shall
      not take more than two weeks of vacation consecutively without the prior
      written consent of the Board.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Insurance During the
      Term of Employment Agreement.  Company shall maintain on
      the life of the Executive, provided he is insurable at standard rates, a
      term life insurance policy in the amount of One Million Dollars
      ($1,000,000.00).  Executive shall have the right to designate
      the beneficiary of such policy.  Executive agrees to take any
      and all physicals that are necessary incident to the issuance and/or
      renewal of said policy.  In addition, Executive agrees to take
      any and all physicals necessary incident to the procurement of Key Man
      insurance upon his life by Company.  In the event that Executive
      is not insurable at standard rates during the term of this Agreement, but
      Executive is able to procure rated coverage, Executive has the right to
      procure coverage at a lower amount of insurance, the cost of which is
      equivalent to the standard term rate cost of One Million Dollars
      ($1,000,000.00) in coverage.  In the event Executive is not
      insurable, which determination must be made no later than the first
      anniversary of the Effective Date then Company shall, within thirty (30)
      days after the first anniversary of the Effective Date, pay Executive an
      amount equal to the projected cost of the contemplated term insurance of
      One Million Dollars ($1,000,000.00) at standard rates in a single lump
      sum.  In the event that Executive should die prior to the
      insurance being obtained hereunder or in the event insurance cannot be
      obtained for medical reasons, Company shall have no obligation to
      Executive or his beneficiary for payment of any of the death benefit
      amount upon Executive’s death.  Company and Executive agree to
      use diligent efforts after the Effective Date to obtain the coverage upon
      Executive’s life hereunder.

              

      

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (d)

              	
                Automobile
      Allowance.  Company shall provide Executive with an
      automobile allowance of Nine Hundred and 00/100 Dollars ($900.00) per
      month, which shall be paid each month on a date determined by the
      Company.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Expenses.   During
      the Employment Term, Executive shall be entitled to receive prompt
      reimbursement for all reasonable and customary travel and entertainment
      expenses or other out-of-pocket business expenses incurred by Executive in
      preparing for and fulfilling the Executive’s duties and responsibilities
      hereunder, including all expenses for (i) travel while away from home
      on business or at the request or in the service of the Company, (ii)
      mobile phone service, (iii) email, fax and long distance
      communications expenses in respect of the Executive’s home office,
      provided that such expenses are incurred and accounted for in accordance
      with the policies and procedures established by the
      Company.  Executive shall use reasonable best efforts to take
      advantage of advance purchase pricing for airplane
      tickets.  Amounts reimbursable pursuant to this subparagraph (e)
      that are taxable to Executive shall be paid within thirty (30) days
      following Executive's written request for reimbursement in accordance with
      policies maintained by Company; provided that Executive provides written
      request no later than sixty (60) days prior to the last day of the
      calendar year following the calendar year in which the expense was
      incurred.  In order to comply with Section 409A of the Code, the
      amount of expenses eligible for reimbursement during any calendar year
      shall not affect the amount of expenses eligible for reimbursement during
      any other calendar year, and the right to reimbursement shall not be
      subject to liquidation or exchange for another
  benefit.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Benefit
      Plans.  Executive shall participate, after meeting
      eligibility requirements, in any qualified retirement plans and/or welfare
      plans maintained by the Company during the Employment
  Term.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Executive
      shall be responsible for all taxes owed, if any, on the fringe benefits
      provided to him pursuant to this Section
7.

              

      

      

      
        	
                 
      

              	
                8.

              	
                Termination.

              

      

      

      Executive’s
employment hereunder and the Employment Term shall be terminated under the first
of the following to occur:

      

      
        	
                 
      

              	
                (a)

              	
                Death.  The
      Executive’s employment hereunder shall automatically terminate upon the
      death of the Executive.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Disability.  The
      Executive’s employment hereunder shall terminate upon written notice by
      the Company to the Executive, of termination due to
      Disability.  For purposes of this Agreement, “Disability” or
      “Disabled” shall mean the Executive’s incapacity due to physical or mental
      illness to substantially perform his duties and the essential functions of
      his position, with or without reasonable accommodation on a full-time
      basis for One Hundred Eighty (180) days (including weekends and holidays)
      in any Three Hundred Sixty-Five (365) day period.  The existence
      or non-existence of a physical or mental injury, infirmity or incapacity
      shall be determined by an independent physician mutually agreed to by the
      Company and the Executive (provided that neither party shall unreasonably
      withhold their consent).

              

      

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (c)

              	
                Cause. The
      Company may terminate the Executive’s employment hereunder for
      Cause.  For purposes of this Agreement, the Company shall have
      “Cause” to terminate the Executive’s employment hereunder
      upon:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                The
      conviction of Executive of a felony or other crime involving theft,
      misappropriation of funds, fraud or moral
  turpitude;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                The
      engaging by Executive in conduct which is demonstrably and materially
      injurious to the Company, monetarily or otherwise, including but not
      limited to any material misrepresentation related to the performance of
      his duties, misappropriation, fraud, including with respect to the
      Company’s accounting and financial statements, embezzlement or conversion
      by Executive of the Company’s or any of its subsidiaries’ property in
      connection with Executive’s duties or in the course of the Executive’s
      employment with the Company;

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Executive’s
      gross negligence or gross misconduct in carrying out his duties hereunder
      resulting, in either case, in material harm to the Company;
    or

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                Any
      act or omission constituting a material breach by the Executive of any
      material provision of this
Agreement.

              

      

      

      Notwithstanding
the foregoing, in the event the basis for a termination for Cause is under
subsections 8(c)(iii) or (iv) above, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution of the Board or a committee thereof asserting that he has
engaged in the conduct set forth above in Sections 8(c)(iii) or (iv) (as
interpreted and enforced consistently with the Company’s treatment of all other
executives and senior management) and specifying the particulars thereof in
detail, and Executive shall not have cured such conduct to the reasonable
satisfaction of the Board within thirty (30) days after receipt of such
resolution.

      

      
        	
                 
      

              	
                (d)

              	
                Without
      Cause.  Upon written notice by the Company to the
      Executive of an involuntary termination without Cause, other than for
      death or Disability.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Good
      Reason.  Upon written notice by the Executive to the
      Company of the termination of his employment hereunder for Good
      Reason.  “Good Reason” shall mean Executive’s resignation from
      employment within thirty (30) days after the occurrence of one of the
      events hereinafter enumerated; provided, however, that Executive must
      provide written notice to the Company within thirty (30) days after the
      occurrence of the event allegedly constituting Good Reason and the Company
      shall have thirty (30) days after such notice is given to
      cure:  (i) a material diminution in Executive’s authority,
      duties or responsibilities without Executive’s written consent; (ii) a
      material diminution in Executive’s  Base Salary or targeted
      annual bonus at any time during the Employment Term without Executive’s
      written consent; (iii) the relocation of Executive to an area that is
      greater than thirty (30) miles from the Greater Cincinnati/Northern
      Kentucky metropolitan area without the consent of Executive; (v) a
      requirement that the Executive report to an officer or employee of the
      Company instead of reporting directly to the Board; and (v) any other
      action or inaction that constitutes a material breach by Company of this
      Agreement

              

      

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (f)

              	
                Voluntary
      Termination.  If Executive terminates employment with
      Company without Good Reason, Executive agrees to provide the Company with
      thirty (30) days prior written notice.  The Company, in its sole
      discretion, following its receipt of such written notice from Executive
      may accelerate the termination of Executive’s employment and the right to
      any further compensation to a date prior to the Thirtieth (30th)
      day after such written notice is
given.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Date of
      Termination.  For purposes of this Agreement, “Date of
      Termination” shall mean (i) if Executive is terminated as President and
      Chief Executive Officer by the Company for Disability, thirty (30) days
      after written notice of such determination is given to Executive (provided
      that Executive shall not have returned to perform his duties on a full
      time basis during such thirty (30) day period); (ii) if Executive’s
      employment is terminated by the Company for any other reason, the date on
      which a written notice of termination is given, provided that, in the case
      of the termination for Cause under Sections 8(c)(iii) or (iv), Executive
      shall not have cured the matter or matters stated in the Notice of
      Termination within the thirty (30) day period provided in Section
      8(c)(iii) or (iv); (iii) if Executive terminates his employment for Good
      Reason, the date of Executive’s resignation, provided that the notice and
      cure provisions in Section 8(e) have been complied with; (iv) if Executive
      terminates employment for other than Good Reason, the date specified in
      Executive’s notice in compliance with Section 8(f) or, (v) in the event of
      Executive’s death, the date of
death.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                Notice of
      Termination.  Any termination of Executive’s employment
      by the Company or by Executive under this Section 8 (other than in the
      case of death) shall be communicated by a written notice (“Notice of
      Termination”) to the other party hereto, indicating the specific
      termination provision in this Agreement relied upon. If the termination
      provision relied upon requires notice and an opportunity to cure, then the
      Notice of Termination shall set forth in reasonable detail any facts and
      circumstances claimed to provide a basis for termination of Executive’s
      employment under the provisions so indicated.   The Notice
      of Termination shall specify a date of termination and shall be delivered
      within the time period set forth in the various paragraphs of this Section
      8, as applicable (the “Notice
Period”).

              

      

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (i)

              	
                Compliance with
      409A.  To the extent any payment under Section 9 is
      subject to Section 409A of the Internal Revenue Code of 1986, as amended
      (the “Code”) or exempt therefrom solely by virtue of the separation pay
      plan exceptions under Treasury Regulations Section 1.409A-1(b)(9), a
      termination of Executive’s employment will not be deemed to occur unless
      such termination constitutes a separation from service under Section 409A
      of the Code and the regulations promulgated
  thereunder.

              

      

      

      
        	
                 
      

              	
                9.

              	
                Compensation Upon
      Termination.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Disability.  In
      the event the Employment Term ends on account of Executive’s Disability,
      the Company shall pay or provide Executive (i) any unpaid Base Salary
      through the date of termination and any accrued vacation in accordance
      with Company policy; (ii) any unpaid bonus earned with respect to any
      fiscal year or any fiscal quarter ending on or preceding the date of
      termination; and (iii) reimbursements for any unreimbursed expenses
      incurred through the date of termination (collectively “Accrued
      Amounts”).  In addition, Executive shall receive any Prorata
      Bonus as hereinafter defined.  For purposes hereof, a “Prorata
      Bonus” shall be determined by calculating a prorata portion of the
      Executive’s targeted bonus for the performance year in which the
      Executive’s termination occurs, payable at the time the annual bonuses are
      paid to the other senior executives, (determined by multiplying the amount
      the Executive would have received based upon actual performance had his
      employment continued through the end of the performance year, by a
      fraction, the numerator of which is the number of days during the
      performance year of termination that the Executive is employed by the
      Company and the denominator of which is Three Hundred Sixty-Five
      (365)).  The Accrued Amounts shall be paid within ten (10) days
      after the Date of Termination.  Any Pro Rata Bonus shall be paid
      at the same time other bonuses are paid with respect to the applicable
      performance year.   In addition,
      Executive shall be entitled to the
following:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                an
      amount equal to his then-applicable full Base Salary minus Eighty-Four
      Thousand Dollars ($84,000) (or such other amount as may be available to
      Executive pursuant to any salary continuation benefits under an accident
      and health benefit plan sponsored by the Company) to be paid within ten
      (10) days after the Date of Termination;
and

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Executive
      shall be entitled to any rights he may have under the Consolidated Omnibus
      Budget Reconciliation Act of 1985, as amended
      (“COBRA”).  Company shall reimburse Executive for any premium
      for COBRA health, dental, and vision coverage paid by Executive (including
      coverage for Executive’s family) for a period of one (1) year after the
      Date of Termination.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Death.  In
      the event of Executive’s death, the Executive’s estate (or to the extent a
      beneficiary has been designated in accordance with a program, the
      beneficiary under such program) shall be entitled to any Accrued Amounts
      and a Prorata Bonus (as defined in Section 9(a).  Such Accrued
      Amounts shall be paid within ten (10) days after the date of Executive’s
      death.   In addition, Executive’s beneficiary shall receive
      any Prorata Bonus as defined in Section 9(a) payable in the manner set
      forth in Section 9(a).

              

      

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (c)

              	
                Termination for Cause
      or Without Good Reason.  If the Executive’s employment
      should be terminated (i) by the Company for Cause, or (ii) by the
      Executive without Good Reason, Company shall pay to the Executive any
      Accrued Amounts within ten (10) days after the Date of
      Termination.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Termination Without
      Cause or For Good Reason.  If Executive’s employment is
      terminated by the Company without Cause or the Executive terminates his
      employment for Good Reason, Executive shall be entitled to receive from
      the Company all Accrued Amounts through the Date of Termination and a
      Prorata Bonus (as defined in Section 9(a).  Such Accrued Amounts
      shall be paid within ten (10) days after the Date of
      Termination.  Any Prorata Bonus shall be payable in the manner
      set forth in Section 9(a).  Contingent upon Executive delivering
      to the Company a release in the form attached hereto as Exhibit C within
      45 days after the Date of Termination, and the release becoming effective
      and irrevocable in accordance with its terms, Executive shall be entitled
      to the following:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Provided
      that Executive is not, at the time of payment, employed by a competitor or
      otherwise in breach of this Agreement, the Company shall pay Executive an
      amount equal to Executive's then-applicable full annual Base Salary (the
      "Severance Benefit").  The Severance Benefit shall be paid in a
      single lump sum during the first payroll cycle immediately following the
      date that the release becomes effective and irrevocable in accordance with
      its terms, but in no event later than sixty (60) days after the Date of
      Termination.

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Executive
      shall be entitled to his COBRA rights under the Company’s group health
      plans.  Company shall reimburse Executive for any premium for
      COBRA health, dental, and vision coverage paid by Executive (including
      coverage for Executive’s family) for a period of one (1) year after the
      Date of Termination.

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Company
      shall reimburse Executive for any lease termination expenses up to a
      maximum amount of $30,000.00, within ten (10) days after the date
      Executive submits such expenses to the Company; provided that Executive
      shall be required to submit such expenses to the Company for reimbursement
      within thirty (30) days after the Date of Termination in order to be
      entitled to reimbursement for same.

              

      

      

      No
amounts paid under this Section 9 will be reduced by any earnings that Executive
may receive from any other source.

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                10.

              	
                Change In Control
      Benefits.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                For
      purposes of this Agreement, “Change In Control” shall mean
      the first to occur of any of the following
  events:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                any
      “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”), excluding for this
      purpose, (A) the Company or any subsidiary of the Company, or (B) any
      employee benefit plan of the Company or any subsidiary of the Company, or
      any person or entity organized, appointed or established by the Company
      for or pursuant to the terms of any such plan, which acquires beneficial
      ownership of voting securities of the Company, is or becomes the
      “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly of securities of the Company representing more than
      fifty percent (50%) of the combined voting power of the Company’s then
      outstanding securities; provided, however, that no Change In Control will
      be deemed to have occurred as a result of a change in ownership percentage
      resulting solely from an acquisition of securities by the Company;
      or

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                persons
      who, as of the Effective Date constitute the Board (the “Incumbent
      Directors”) cease for any
      reason, including without limitation, as a result of a tender offer, proxy
      contest, merger or similar transaction, to constitute at least a majority
      thereof, provided that any person becoming a director of the Company
      subsequent to the Effective Date shall be considered an Incumbent Director
      if such person’s election or nomination for election was approved by a
      vote of at least fifty percent (50%) of the Incumbent Directors; but
      provided further, that any such person whose initial assumption of office
      is in connection with an actual or threatened election contest relating to
      the election of members of the Board or other actual or threatened
      solicitation of proxies or consents by or on behalf of a “person” (as
      defined in Section 13(d) and 14(d) of the Exchange Act) other than the
      Board, including by reason of agreement intended to avoid or settle any
      such actual or threatened contest or solicitation, shall not be considered
      an Incumbent Director; or

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                consummation
      of a reorganization, merger or consolidation or sale or other disposition
      of at least eighty percent (80%) of the assets of the Company (a “Business Combination”),
      unless, in each case, following such Business Combination, all or
      substantially all of the individuals and entities who were the beneficial
      owners of outstanding voting securities of the Company immediately prior
      to such Business Combination beneficially own, directly or indirectly,
      more than fifty percent (50%) of the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election
      of directors of the Company resulting from such Business Combination
      (including, without limitation, a company which, as a result of such
      transaction, owns the Company or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries) in
      substantially the same proportions as their ownership, immediately prior
      to such Business Combination, of the outstanding voting securities of the
      Company; or

              

      

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (iv)

              	
                approval
      by the stockholders of the Company of a complete liquidation or
      dissolution of the Company.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Upon
      a Change In Control of the Company, the Executive shall be entitled to
      receive the following:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                All
      of Executive’ stock options and restricted shares shall vest according to
      terms contained in the respective award agreements (executed incident to
      the grant of such options or restricted
shares).

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                Executive
      shall be entitled to the benefits set forth in Section 9(d) if his
      employment is terminated Without Cause or For Good Reason after such
      Change in Control.  For purposes of clarity, a failure by
      Company to have the acquiring company assume this Agreement in accordance
      with Section 16(a) shall constitute a material breach of this Agreement
      within the meaning of Section 8(e)(v) (relating to the definition of Good
      Reason).

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                Anything
      in this Agreement to the contrary notwithstanding, in the event that it is
      determined that any payment (other than the Gross-Up payments provided for
      in this subsection) or distribution by the Company or any of its
      affiliates to or for the benefit of the Executive, whether paid or payable
      or distributed or distributable pursuant to the terms of this Agreement or
      otherwise pursuant to or by reason of any other agreement, policy, plan,
      program or arrangement, including without limitation any stock option or
      similar right, or the lapse or termination of any restriction on or the
      vesting or exercisability of any of the foregoing (a “Payment”), would be
      subject to the excise tax imposed by Section 4999 of the Internal
      Revenue Code of 1986, as amended (the “Code”) (or any successor provision
      thereto) by reason of being considered “contingent on a change in
      ownership or control” of Company or any of its affiliates, within the
      meaning of Section 280G of the Code (or any successor provision
      thereto) or to any similar tax imposed by state or local law, or any
      interest or penalties with respect to such tax (such tax
      or  taxes, together with any such interest and penalties, being
      hereafter collectively referred to as the “Excise Tax”), then the
      Executive will be entitled to receive an additional payment or payments
      (collectively, a “Gross-Up Payment”).  The Gross-Up Payment will
      be in an amount such that, after payment by the Executive of all taxes
      (including any interest or penalties imposed with respect to such taxes),
      including any Excise Tax imposed upon the Gross-Up Payment, the Executive
      retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
      upon the Payment.  The Gross-Up Payment shall be made to
      Executive on or as soon as practicable following the date of the closing
      of the transaction resulting in such change in control, and in no event
      later than the end of the calendar year next following the calendar year
      in which Executive pays the Excise
Taxes.

              

      

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      The
determination of whether an Excise Tax would be imposed, the amount of such
Excise Tax, and the calculation of the amounts referred to above will be made by
the Company’s regular independent accounting firm (as in effect immediately
prior to the transaction that gives rise to the Excise Tax) at the expense of
the Company or, at the election of Executive, another nationally recognized
independent accounting firm, which shall provide detailed supporting
calculations.

      

      
        	
                 
      

              	
                11.

              	
                Confidentiality,
      Competition, etc.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Confidentiality.  The
      Executive agrees that he shall not, directly or indirectly, make
      available, sell, disclose or otherwise communicate to any person, other
      than in the course of the Executive’s employment and for the benefit of
      the Company (as determined by the Executive in good faith), either during
      the period of the Executive’s employment or at any time thereafter, any
      nonpublic, proprietary or confidential information, knowledge or data
      relating to the Company, any of its subsidiaries, affiliated companies or
      businesses, which shall have been obtained by the Executive during the
      Executive’s employment by the Company. The foregoing shall not apply to
      information that (i) was known to the public prior to its disclosure to
      the Executive; (ii) becomes known to the public subsequent to disclosure
      to the Executive through no wrongful act of the Executive or any
      representative of the Executive; or (iii) the Executive is required to
      disclose by applicable law, regulation or legal process (provided that the
      Executive provides the Company with prior notice of the contemplated
      disclosure and reasonably cooperates with the Company at its expense in
      seeking a protective order or other appropriate protection of such
      information). Notwithstanding clauses (i) and (ii) of the preceding
      sentence, the Executive’s obligation to maintain such disclosed
      information in confidence shall not terminate where only portions of the
      information are in the public
domain.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Nonsolicitation.
      During the Executive’s employment with the Company and for the one (1)
      year period thereafter, the Executive agrees that he will not, directly or
      indirectly, individually or on behalf of any other person, firm,
      corporation or other entity, knowingly solicit, aid or induce (i) any
      managerial level employee of the Company or any of its subsidiaries or
      affiliates to leave such employment in order to accept employment with or
      render services to or with any other person, firm, corporation or other
      entity unaffiliated with the Company or knowingly take any action to
      materially assist or aid any other person, firm, corporation or other
      entity in hiring any such employee (provided, that the foregoing shall not
      be violated by general advertising not targeted at Company employees nor
      by serving as a reference for an employee with regard to an entity with
      which the Executive is not affiliated), or (ii) any customer of the
      Company or any of its subsidiaries or affiliates to purchase goods or
      services then sold by the Company or any of its subsidiaries or affiliates
      from another person, firm, corporation or other entity or assist or aid
      any other persons or entity in identifying or soliciting any such customer
      (provided, that the foregoing shall not apply to any product or service
      which is not covered by the noncompetition provision set forth In Section
      11(c), below).

              

      

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (c)

              	
                Noncompetition. The Executive
      acknowledges that he performs services of a unique nature for the Company
      that are irreplaceable, and that his performance of such services to a
      competing entity that (i) is a value added reseller of computer hardware
      or software or (ii) provides product services, consulting services
      and professional services, including but not limited to advisory services,
      deployment services, staffing services and information technology
      outsourcing services (collectively, “Infrastructure Solutions Services”)
      will result in irreparable harm to the Company. Accordingly, during the
      Executive’s employment hereunder, and, except as provided in Section
      11(h), and for the one (1) year period thereafter, the Executive agrees
      that the Executive will not, directly or indirectly, own, manage, operate,
      control, be employed by (whether as an employee, consultant, independent
      contractor or otherwise, and whether or not for compensation), or render
      services to, any person, firm, corporation or other entity, in whatever
      form, that is (i) a value added reseller of computer hardware or
      software or (ii) an Infrastructure Solution Services provider, and,
      in either case, provides goods or services primarily to customers in North
      America.  This Section 11(c) shall not prevent the Executive
      from (i) owning not more than one percent (1%) of the total shares of all
      classes of stock outstanding of any publicly traded entity that is a value
      added reseller of computer hardware or software, (ii) rendering services
      to charitable organizations, as such term is defined in Section 501(c) of
      the Code, or (iii) directly or indirectly owning, managing, operating,
      controlling, or being employed by (whether as an employee, consultant,
      independent contractor or otherwise, and whether or not for compensation),
      or rendering services to, any person, firm, corporation or other entity,
      in whatever form, that is in any of the following businesses:
      (A) developing computer software (but not such a developer that sells
      software directly to end users), (B) selling computer hardware or software
      to persons or entities other than end users, and (C) providing consulting
      services to clients in industries to which the Company has not provided
      Infrastructure Solution Services during the year preceding termination of
      the Executive’s employment with the
Company.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Nondisparagement. Each of the
      Executive and the Company (for purposes hereof, “the Company” shall mean
      only (i) the Company by press release or other formally released
      announcement and (ii) the executive officers and directors thereof and not
      any other employees) agrees that during the Employment Term and for five
      (5) years thereafter not to make any public statements that disparage the
      other party, or in the case of the Company, its respective affiliates,
      employees, officers, directors, products or
      services.  Notwithstanding the foregoing, statements made in the
      course of sworn testimony in administrative, judicial or arbitral
      proceedings (including, without limitation, depositions in connection with
      such proceedings) shall not be subject to this Section 11(d). This
      provision shall also not cover normal competitive statements which do not
      cite the Executive’s employment by the
Company.

              

      

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (e)

              	
                Equitable Relief and
      Other Remedies. The parties acknowledge and agree that the other
      party’s remedies at law for a breach or threatened breach of any of the
      provisions of this Section would be inadequate and, in recognition of this
      fact, the parties agree that, in the event of such a breach or threatened
      breach, in addition to any remedies at law, the other party, without
      posting any bond, shall be entitled to obtain equitable relief in the form
      of specific performance, temporary restraining order, a temporary or
      permanent injunction or any other equitable remedy which may then be
      available.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Reformation. If
      it is determined by a court of competent jurisdiction in any state that
      any restriction in this Section 11 is excessive in duration or scope or is
      unreasonable or unenforceable under the laws of that state, it is the
      intention of the parties that such restriction may be modified or amended
      by the court to render it enforceable to the maximum extent permitted by
      the law of that state.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Survival of
      Provisions. The obligations contained in this Section 11 shall
      survive the termination or expiration of the Executive’s employment with
      the Company and shall be fully enforceable
  thereafter.

              

      

      

      
        	
                 
      

              	
                (h)

              	
                Non-Competition Not
      Applicable.  The one (1) year non-competition provision
      set forth in Section 11(c) commencing on the date of Executive’s
      termination of employment shall not be applicable if Company does not
      renew this Agreement upon the expiration of the Initial Term of this
      Agreement or any Renewal Term; provided, however, such one (1) year
      non-competition provision shall be applicable in any such instance if the
      Company elects in writing to compensate Executive pursuant to Section
      11(i) of this Agreement.

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Optional Payment for
      Non-Competition.  In the event that (i) the Company does
      not renew this Agreement upon the expiration of the Initial Term of this
      Agreement or any Renewal Term with notice to Executive of such nonrenewal
      at least  ninety (90) days prior to the expiration of the
      Initial Term or any Renewal Term,  Company shall have the option
      to pay Executive an amount equal to his Base Salary that was in effect
      prior to such non-renewal in consideration for Executive not competing
      with Company for a period of twelve (12) months from the date of the
      expiration of this Agreement.   Such payment shall be made
      within ten (10) days after the Date of
  Termination.

              

      

      

      
        	
                 
      

              	
                12.

              	
                Continued Availability
      and Cooperation.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Following
      termination of the Executive’s employment with the Company, the Executive
      shall cooperate fully with the Company and with the Company’s counsel in
      connection with any present and future actual or threatened litigation,
      administrative proceeding or investigation involving the Company that
      relates to events, occurrences or conduct occurring (or claimed to have
      occurred) during the period of the Executive’s employment by the Company.
      Cooperation will include, but is not limited
to:

              

      

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (i)

              	
                making
      himself reasonably available for interviews and discussions with the
      Company’s counsel as well as for depositions and trial
      testimony;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                if
      depositions or trial testimony are to occur, making himself reasonably
      available and cooperating in the preparation therefore, as and to the
      extent that the Company or the Company’s counsel reasonably
      requests;

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                refraining
      from impeding in any way the Company’s prosecution or defense of such
      litigation or administrative proceeding;
and

              

      

      

      
        	
                 
      

              	
                (iv)

              	
                cooperating
      fully in the development and presentation of the Company’s prosecution or
      defense of such litigation or administrative
  proceeding.

              

      

      

      The
Company will reimburse the Executive for reasonable travel, lodging, telephone
and similar expenses, as well as reasonable attorneys’ fees (if independent
legal counsel is necessary), incurred in connection with any cooperation,
consultation and advice rendered under this Agreement after the Executive’s
termination of employment; provided that (i) Executive shall not be required to
make himself available for such purposes for more than three days in any
calendar month, (ii) the Company and the Executive must mutually agree on which
days the Executive will make himself available, and (iii) the Company shall pay
in advance to the Executive (a) all reasonably anticipated travel and other
expenses, subject to subsequent submission of supporting documentation and, if
applicable, the refund by the Executive of any remaining balance of the advance
after he has been reimbursed fully for the actual expenses incurred, and (b) a
per diem, not accountable, of Two Thousand Five Hundred Dollars ($2,500.00) per
day.

      

      This
Section 12(a) shall apply during the period commencing on the Date of
Termination and ending on Executive's death. Any payments shall be made no later
than thirty (30) days after the Company's request for services under this
Section 12(a) and in no event later than the last day of the calendar year
following the calendar year in which the expense was incurred.  In
order to comply with Section 409A of the Code, the amount of expenses eligible
for reimbursement during any calendar year shall not affect the amount of
expenses eligible for reimbursement during any other calendar year, and the
right to reimbursement shall not be subject to liquidation or exchange for
another benefit.

      

      
        	
                 
      

              	
                13.

              	
                Dispute
      Resolution.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                In
      the event that the parties are unable to resolve any controversy or claim
      arising out of or in connection with this Agreement or breach thereof,
      either Party shall refer the dispute to binding arbitration, which shall
      be the exclusive forum for resolving such claims. Such arbitration will be
      administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”)
      pursuant to its Employment Arbitration Rules and Procedures and governed
      by Kentucky law. The arbitration shall be conducted by a single arbitrator
      selected by the parties according to the rules of JAMS. In the event that
      the parties fail to agree on the selection of the arbitrator within thirty
      (30) days after either party’s request for arbitration, the arbitrator
      will be chosen by JAMS. The arbitration proceeding shall commence on a
      mutually agreeable date within ninety (90) days after the request for
      arbitration, unless otherwise agreed by the parties, and shall be
      conducted in the Commonwealth of
Kentucky.

              

      

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      parties agree that each will bear their own costs and attorneys’ fees. The
      arbitrator shall not have authority to award attorneys’ fees or costs to
      any party.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      arbitrator shall have no power or authority to make awards or orders
      granting relief that would not be available to a party in a court of law.
      The arbitrator’s award is limited by and must comply with this Agreement
      and applicable federal, state, and local laws. The decision of the
      arbitrator shall be final and binding on the
  parties.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Notwithstanding
      the foregoing, no claim or controversy for injunctive or equitable relief
      contemplated by or allowed under applicable law pursuant to Section 11 of
      this Agreement will be subject to arbitration under this Section 13, but
      will instead be subject to determination in a court of competent
      jurisdiction in the state of the place of performance, which court shall
      apply Kentucky law consistent with Section 13 of this Agreement, where
      either party may seek injunctive or equitable
  relief.

              

      

      

      
        	
                 
      

              	
                14.

              	
                Other
      Agreements.

              

      

      

      No
agreements (other than the exhibits hereto and agreements evidencing any grants
of equity awards or the Special Change In Control Bonus Agreement) or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises, or other agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any party,
pertaining to the subject matter hereof, which are not embodied herein, and that
no prior and/or contemporaneous agreement, statement or promise pertaining to
the subject matter hereof that is not contained in this Agreement shall be valid
or binding on either party.

      

      
        	
                 
      

              	
                15.

              	
                Withholding of
      Taxes.

              

      

      

      The
Company will withhold from any amounts payable under this Agreement all federal,
state, city or other taxes as the Company is required to withhold pursuant to
any law or government regulation or ruling.

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                16.

              	
                Successors and Binding
      Agreement.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                The
      Company will require any successor (whether direct or indirect, by
      purchase of assets or stock, merger, consolidation, reorganization or
      otherwise) to all or substantially all of the business or assets of the
      Company expressly to assume and agree to perform this Agreement in the
      same manner and to the same extent the Company would be required to
      perform if no such succession had taken place. This Agreement will be
      binding upon and inure to the benefit of the Company and any successor to
      the Company, including without limitation any persons acquiring directly
      or indirectly all or substantially all of the business or assets of the
      Company whether by purchase, merger, consolidation, reorganization or
      otherwise (and such successor shall thereafter be deemed the “Company” for
      the purposes of this Agreement), but will not otherwise be assignable,
      transferable or delegable by the Company, except that the Company may
      assign and transfer this Agreement and delegate its duties thereunder to a
      wholly owned Subsidiary; provided that following any such assignment the
      Company shall remain fully liable with respect to all of its obligations
      under this Agreement.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                This
      Agreement will inure to the benefit of and be enforceable by the
      Executive’s personal or legal representatives, executors, administrators,
      successors, heirs, distributees and
legatees.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                This
      Agreement is personal in nature and neither of the parties hereto shall,
      without the consent of the other, assign, transfer or delegate this
      Agreement or any rights or obligations hereunder except as expressly
      provided in Sections 16(a) and 16(b). Without limiting the generality or
      effect of the foregoing, the Executive’s right to receive payments
      hereunder will not be assignable, transferable or delegable, whether by
      pledge, creation of a security interest, or otherwise, other than by a
      transfer by the Executive’s will or by the laws of descent and
      distribution and, in the event of any attempted assignment or transfer
      contrary to this Section 16(c), the Company shall have no liability to pay
      any amount so attempted to be assigned, transferred or
      delegated.

              

      

      

      
        	
                 
      

              	
                17.

              	
                Notices.

              

      

      

      All
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder will be in writing and
will be duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five (5) business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three (3) business days after having been sent by
a nationally recognized overnight courier service such as Federal Express or
UPS, addressed to the Company (to the attention of the General Counsel of the
Company) at its principal executive offices and to the Executive at his
principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith, except that notices of changes
of address shall be effective only upon receipt.

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                18.

              	
                Governing Law and
      Choice of Forum.

              

      

      

      
        	
                 
      

              	
                (a)

              	
                This
      Agreement will be construed and enforced according to the laws of the
      Commonwealth of Kentucky, without giving effect to the conflict of laws
      principles thereof.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                To
      the extent not otherwise provided for by Section 13 of this Agreement, the
      Executive and the Company consent to the jurisdiction of all state and
      federal courts located in Boone County, Kentucky, as well as to the
      jurisdiction of all courts of which an appeal may be taken from such
      courts, for the purpose of any suit, action, or other proceeding arising
      out of, or in connection with, this Agreement or that otherwise arises out
      of the employment relationship. Each party hereby expressly waives any and
      all rights to bring any suit, action, or other proceeding in or before any
      court or tribunal other than the courts described above and covenants that
      it shall not seek in any manner to resolve any dispute other than as set
      forth in this paragraph and Section 13 of this Agreement. Further, the
      Executive and the Company hereby expressly waive any and all objections
      either may have to venue, including, without limitation, the inconvenience
      of such forum, in any of such courts. In addition, each of the parties
      consents to the service of process by personal service or any manner in
      which notices may be delivered hereunder in accordance with this
      Agreement.

              

      

      

      
        	
                 
      

              	
                19.

              	
                Validity/Severability.

              

      

      

       If
any provision of this Agreement or the application of any provision is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision will not be affected, and the provision so
held to be invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid or
legal. To the extent any provisions held to be invalid, unenforceable or
otherwise illegal cannot be reformed, such provisions are to be stricken
herefrom and the remainder of this Agreement will be binding on the parties and
their successors and assigns as if such invalid or illegal provisions were never
included in this Agreement from the first instance.

      

      
        	
                 
      

              	
                20.

              	
                Survival of
      Provisions.

              

      

      

      Notwithstanding
any other provision of this Agreement, the parties’ respective rights and
obligations under Sections 8, 9, 10, 11, 12, 13, 17, 18, 20, and 21, will
survive any termination or expiration of this Agreement or the termination of
the Executive’s employment with the Company.

      

      
        	
                 
      

              	
                21.

              	
                Liability
      Insurance.

              

      

      

      The
Company shall cover the Executive under directors and officers liability
insurance both during and, while potential liability exists, after the term of
this Agreement in the same amount and to the same extent as the Company covers
its other officers and directors.  The Company shall provide a
certificate of insurance confirming this coverage promptly upon receipt of a
request for same from Executive.

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                22.

              	
                Public
      Announcements.

              

      

      

      The
Company shall give the Executive a reasonable opportunity to review and comment
in advance on any public announcement (including any filing with a governmental
agency or stock exchange) relating to this Agreement or the Executive’s
employment by the Company.

      

      
        	
                 
      

              	
                23.

              	
                Compliance with Code
      Section 409A.

              

      

      

      This
Agreement is intended to comply with the requirements of Code Section 409A and
the regulations and guidance issued thereunder and shall be interpreted and
administered in a manner consistent with that intent.  Any provision
of this Agreement to the contrary notwithstanding, if Executive is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the
date of his separation from service with the Company, no distribution that is
subject to and not otherwise exempt from Code Section 409A shall be made or
commence under this Agreement sooner than six months from the date of
Executive’s separation from service (or, if earlier, the date of the Executive’s
death).  In such case, any payments that were otherwise required to be
made within such six-month period shall be accumulated and paid in a single lump
sum on the first day of the month immediately following the end of such
six-month period.

      

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

      

      
        
          
            	 
      	
                    POMEROY
      IT SOLUTIONS, INC.

                  
	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      
	 
      	 
      	
                    Keith
      R. Coogan

                  
	 
      	 
      
	 
      	
                    Its:

                  	
                    President/Chief
      Executive Officer

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    Christopher
      C. Froman

                  

          

        

      

       

       
-20-Unassociated Document

     

    
      Exhibit
10.43

       

    

    SUNESIS
PHARMACEUTICALS, INC.

    2006
EMPLOYMENT COMMENCEMENT INCENTIVE PLAN

     

    ADOPTED
BY THE BOARD OF DIRECTORS ON NOVEMBER 29, 2005

     

    EFFECTIVE
AS OF JANUARY 1, 2006

     

    (AMENDED
AND RESTATED ON SEPTEMBER 13, 2006,

    DECEMBER
6, 2006, DECEMBER 5, 2007 AND DECEMBER 18, 2008)

     

    ARTICLE
1

     

    PURPOSE

     

    1.1          General.

     

    (a)           Eligible Stock Award
Recipients. Only Eligible Participants may receive Awards under the
Plan.

     

    (b)           General Purpose. The purpose
of the Plan is to promote the success and enhance the value of Sunesis
Pharmaceuticals, Inc. (the “Company”)
by linking the personal interests of Eligible Participants to those of Company
stockholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to Company stockholders. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Eligible Participants upon whose
judgment, interest, and special effort the successful conduct of the Company’s
operation will be largely dependent.

     

    ARTICLE
2

     

    DEFINITIONS
AND CONSTRUCTION

     

    2.1          Definitions.  The
following words and phrases shall have the following meanings:

     

    (a)           “Award”
means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Dividend Equivalents award, a Stock Payment award, or
a Restricted Stock Unit award granted to an Eligible Participant pursuant to the
Plan.

     

    (b)           “Award
Agreement”
means any written agreement, contract, or other instrument or document
evidencing an Award.

     

    (c)           “Board”
means the Board of Directors of the Company.

     

    (d)           “Cause”
includes one or more of the following: (i) the commission of an act of fraud,
embezzlement or dishonesty by a Participant that has a material adverse impact
on the Company or any successor or parent or Subsidiary thereof; (ii) a
conviction of, or plea of “guilty” or “no contest” to, a felony by a
Participant; (iii) any unauthorized use or disclosure by a Participant of
confidential information or trade secrets of the Company or any successor or
parent or Subsidiary thereof that has a material adverse impact on any such
entity or (iv) any other intentional misconduct by a Participant that has a
material adverse impact on the Company or any successor or parent or Subsidiary
thereof. However, if the term or concept of “Cause” has been defined in an
agreement between a Participant and the Company or any successor or parent or
Subsidiary thereof, then “Cause” shall have the definition set forth in such
agreement. The foregoing definition shall not in any way preclude or restrict
the right of the Company or any successor or parent or Subsidiary thereof to
discharge or dismiss any Participant in the service of such entity for any other
acts or omissions, but such other acts or omissions shall not be deemed, for
purposes of this Plan, to constitute grounds for termination for
Cause.

     

    
      
        
        

      

      
        1.

        
          

        

      

      
        
        

      

    

     

    (e)           “Change of
Control” means and includes each of the following:

     

    (1)           the
acquisition, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the
rules thereunder) of “beneficial ownership” (as determined pursuant to Rule
13d-3 under the Exchange Act) of securities entitled to vote generally in the
election of directors (“voting securities”) of the Company that represent 50% or
more of the combined voting power of the Company’s then outstanding voting
securities, other than:

     

    (A)           an
acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company or by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person controlled
by the Company, or

     

    (B)           an
acquisition of voting securities by the Company or a corporation owned, directly
or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company;

     

    Notwithstanding
the foregoing, the following event shall not constitute an “acquisition” by any
person or group for purposes of this subsection (e): an acquisition of the
Company’s securities by the Company that causes the Company’s voting securities
beneficially owned by a person or group to represent 50% or more of the combined
voting power of the Company’s then outstanding voting securities; provided, however, that if a
person or group shall become the beneficial owner of 50% or more of the combined
voting power of the Company’s then outstanding voting securities by reason of
share acquisitions by the Company as described above and shall, after such share
acquisitions by the Company, become the beneficial owner of any additional
voting securities of the Company, then such acquisition shall constitute a
Change of Control; or

     

    (2)           during
any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a
director designated by a person who shall have entered into an agreement with
the Company to effect a transaction described in clauses (1) or (3) of this
subsection (e)) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or

     

    
      
        
        

      

      
        2.

        
          

        

      

      
        
        

      

    

     

    (3)           the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case other than a
transaction:

     

    (A)           which
results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor
Entity”)) directly or indirectly, at least a majority of the combined
voting power of the Successor Entity’s outstanding voting securities immediately
after the transaction, and

     

    (B)           after
which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no
person or group shall be treated for purposes of this clause (B) as beneficially
owning 50% or more of combined voting power of the Successor Entity solely as a
result of the voting power held in the Company prior to the consummation of the
transaction; or

     

    (4)           the
Company’s stockholders approve a liquidation or dissolution of the
Company.

     

    The
Committee shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change of Control of the Company
has occurred pursuant to the above definition, and the date of the occurrence of
such Change of Control and any incidental matters relating thereto.

     

    (f)        
   “Code”
means the Internal Revenue Code of 1986, as amended.

     

    (g)           “Committee”
means the Board or a committee of the Board described in Article
11.

     

    (h)           “Director”
means a member of the Board.

     

    (i)       
    “Disability”
means, for purposes of the Plan, that the Participant qualifies to receive
long-term disability payments under the Company’s long-term disability insurance
program, as it may be amended from time to time.

     

    (j)   
        “Dividend
Equivalents” means a right granted to a Participant pursuant to Article 8
to receive the equivalent value (in cash or Stock) of dividends paid on
Stock.

     

    (k)           “Eligible
Participant” means any Employee who has not previously been an Employee
or Director of the Company or a Subsidiary, or is commencing employment with the
Company or a Subsidiary following a bona fide period of non-employment by the
Company or a Subsidiary, if he or she is granted an Award in connection with his
or her commencement of employment with the Company or a Subsidiary and such
grant is an inducement material to his or her entering into employment with the
Company or a Subsidiary. The Board may in its discretion adopt procedures from
time to time to ensure that an Employee is eligible to participate in the Plan
prior to the granting of any Awards to such Employee under the Plan (including,
without limitation, a requirement, that each such Employee certify to the
Company prior to the receipt of an Award under the Plan that he or she has not
been previously employed by the Company or a Subsidiary, or if previously
employed, has had a bona fide period of non-employment, and that the grant of
Awards under the Plan is an inducement material to his or her agreement to enter
into employment with the Company or a Subsidiary).

     

    
      
        
        

      

      
        3.

        
          

        

      

      
        
        

      

    

     

    (l)      
     “Employee”
means any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any Subsidiary.

     

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

     

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

     

    (1)           If
the Stock is listed on any established stock exchange or a national market
system, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or
system for such date, or if no bids or sales were reported for such date, then
the closing sales price (or the closing bid, if no sales were reported) on the
trading date immediately prior to such date during which a bid or sale occurred,
in each case, as reported in The Wall Street Journal or such other source as the
Committee deems reliable;

     

    (2)           If
the Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean of the closing
bid and asked prices for the Stock on such date, or if no closing bid and asked
prices were reported for such date, the date immediately prior to such date
during which closing bid and asked prices were quoted for the Stock, in each
case, as reported in The Wall Street Journal or such other source as the
Committee deems reliable; or

     

    (3)           In
the absence of an established market for the Stock, the Fair Market Value
thereof shall be determined in good faith by the Committee.

     

    (o)           “Good
Reason” means a Participant’s voluntary resignation following any one or
more of the following that is effected without the Participant’s written
consent: (i) a change in his or her position following the Change of Control
that materially reduces his or her duties or responsibilities, (ii) a reduction
in his or her base salary following a Change of Control, unless the base
salaries of all similarly situated individuals are similarly reduced, or (iii) a
relocation of such Participant’s place of employment following a Change of
Control by more than fifty (50) miles from such Participant’s place of
employment prior to a Change of Control. However, if the term or concept of
“Good Reason” has been defined in an agreement between a Participant and the
Company or any successor or parent or Subsidiary thereof, then “Good Reason”
shall have the definition set forth in such agreement.

     

    
      
        
        

      

      
        4.

        
          

        

      

      
        
        

      

    

     

    (p)           “Incentive Stock
Option” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto. Incentive Stock
Options may not be granted under the Plan.

     

    (q)           “Independent
Director” means a Director who is not an Employee of the Company and who
qualifies as “independent” within the meaning of NASD Rule 4200(a)(15), if the
Company’s securities are traded on the Nasdaq National Market, or the
requirements of any other established stock exchange on which the Company’s
securities are traded, as such rules or requirements may be amended from time to
time.

     

    (r)           “NASD”
means the National Association of Securities Dealers, Inc.

     

    (s)           “Non-Qualified
Stock Option” means an Option that is not intended to be an Incentive
Stock Option.

     

    (t)           “Option”
means a right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during
specified time periods. An Option must be a Non-Qualified Stock
Option.

     

    (u)           “Participant”
means an Eligible Participant who has been granted an Award pursuant to the
Plan.

     

    (v)           “Performance
Share” means a right granted to a Participant pursuant to Article 8, to
receive cash, Stock, or other Awards, the payment of which is contingent upon
achieving certain performance goals established by the Committee.

     

    (w)          “Plan”
means this Sunesis Pharmaceuticals, Inc. 2006 Employment Commencement Incentive
Plan, as it may be amended from time to time.

     

    (x)           “Restricted
Stock” means Stock awarded to a Participant pursuant to Article 6 that is
subject to certain restrictions and to risk of forfeiture.

     

    (y)           “Restricted Stock
Unit” means a right to receive a specified number of shares of Stock
during specified time periods pursuant to Article 8.

     

    (z)           “Stock”
means the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to Article 10.

     

    (aa)         “Stock
Appreciation Right” or “SAR” means
a right granted pursuant to Article 7 to receive a payment equal to the excess
of the Fair Market Value of a specified number of shares of Stock on the date
the SAR is exercised over the Fair Market Value on the date the SAR was granted
as set forth in the applicable Award Agreement.

     

    (bb)         “Stock
Payment” means (a) a payment in the form of shares of Stock, or
(b) an option or other right to purchase shares of Stock, as part of any bonus,
deferred compensation or other arrangement, made in lieu of all or any portion
of the compensation, granted pursuant to Article 8.

     

    
      
        
        

      

      
        5.

        
          

        

      

      
        
        

      

    

     

    (cc)         “Subsidiary”
means any corporation or other entity of which a majority of the outstanding
voting stock or voting power is beneficially owned directly or indirectly by the
Company.

     

    ARTICLE
3

     

    SHARES
SUBJECT TO THE PLAN

     

    3.1          Number
of Shares.

     

    (a)           Subject
to Article 10, the aggregate number of shares of Stock which may be issued or
transferred pursuant to Awards under the Plan shall be 625,000
shares.

     

    The
payment of Dividend Equivalents in conjunction with any outstanding Awards shall
not be counted against the shares available for issuance under the
Plan.

     

    (b)           To
the extent that an Award terminates, expires, or lapses for any reason, any
shares of Stock subject to the Award shall again be available for the grant of
an Award pursuant to the Plan. Additionally, any shares of Stock tendered or
withheld to satisfy the grant or exercise price or tax withholding obligation
pursuant to any Award shall again be available for the grant of an Award
pursuant to the Plan. To the extent permitted by applicable law or any exchange
rule, shares of Stock issued in assumption of, or in substitution for, any
outstanding awards of any entity acquired in any form of combination by the
Company or any Subsidiary shall not be counted against shares of Stock available
for grant pursuant to the Plan.

     

    3.2          Stock Distributed. Any Stock
distributed pursuant to an Award may consist, in whole or in part, of authorized
and unissued Stock, treasury Stock or Stock purchased on the open
market.

     

    ARTICLE
4

     

    ELIGIBILITY
AND PARTICIPATION

     

    4.1          Eligibility.

     

    (a)           General. Awards may be granted
only to Eligible Participants. All Options granted under the Plan shall be
Non-Qualified Stock Options.

     

    (b)           Foreign Participants. In order
to assure the viability of Awards granted to Participants employed in foreign
countries, the Committee may provide for such special terms as it may consider
necessary or appropriate to accommodate differences in local law, tax policy, or
custom. Moreover, the Committee may approve such supplements to, or amendments,
restatements, or alternative versions of, the Plan as it may consider necessary
or appropriate for such purposes without thereby affecting the terms of the Plan
as in effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions shall increase the share
limitations contained in Sections 3.1 of the Plan.

     

    
      
        
        

      

      
        6.

        
          

        

      

      
        
        

      

    

     

    4.2          Actual Participation. Subject
to the provisions of the Plan, the Committee may, from time to time, select from
among all eligible individuals, those to whom Awards shall be granted and shall
determine the nature and amount of each Award. No individual shall have any
right to be granted an Award pursuant to the Plan.

     

    ARTICLE
5

     

    STOCK
OPTIONS

     

    5.1          General. Options may be
granted to Eligible Participants on the following terms and
conditions:

     

    (a)           Exercise Price. The exercise
price per share of Stock subject to an Option shall be determined by the
Committee and set forth in the Award Agreement; provided that the exercise
price for any Option shall not be less than Fair Market Value of a share of
Stock on the date of grant.

     

    (b)           Time And Conditions Of
Exercise. The Committee shall determine the time or times at which an
Option may be exercised in whole or in part; provided, that the term of
any Option granted under the Plan shall not exceed ten years; and provided, further, that such
Option shall be exercisable for not less than one year after the date of the
Participant’s death. The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option may
be exercised.

     

    (c)           Payment. The Committee shall
determine the methods by which the exercise price of an Option may be paid, the
form of payment, including, without limitation, cash, promissory note bearing
interest at no less than such rate as shall then preclude the imputation of
interest under the Code, shares of Stock held for longer than six months having
a Fair Market Value on the date of delivery equal to the aggregate exercise
price of the Option or exercised portion thereof, or other property acceptable
to the Committee (including through the delivery of a notice that the
Participant has placed a market sell order with a broker with respect to shares
of Stock then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price; provided, that payment of
such proceeds is then made to the Company upon settlement of such sale), and the
methods by which shares of Stock shall be delivered or deemed to be delivered to
Participants. Notwithstanding any other provision of the Plan to the contrary,
no Participant who is a member of the Board or an “executive officer” of the
Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to pay the exercise price of an Option in any method which would
violate Section 13(k).

     

    (d)           Evidence Of Grant. All Options
shall be evidenced by a written Award Agreement between the Company and the
Participant. The Award Agreement shall include such additional provisions as may
be specified by the Committee.

     

    
      
        
        

      

      
        7.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
6

     

    RESTRICTED
STOCK AWARDS

     

    6.1          Grant of Restricted Stock.
Restricted Stock may be awarded to any Eligible Participant in such
amounts and subject to such terms and conditions as determined by the Committee.
All Awards of Restricted Stock shall be evidenced by a written Restricted Stock
Award Agreement.

     

    6.2          Issuance and Restrictions.
Restricted Stock shall be subject to such restrictions on transferability
and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the right to
receive dividends on the Restricted Stock). These restrictions may lapse
separately or in combination at such times, pursuant to such circumstances, in
such installments, or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter.

     

    6.3          Forfeiture. Except as
otherwise determined by the Committee at the time of the grant of the Award or
thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited; provided, however, that the
Committee may provide in any Restricted Stock Award Agreement that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.

     

    6.4          Certificates For Restricted Stock.
Restricted Stock granted pursuant to the Plan may be evidenced in such
manner as the Committee shall determine. If certificates representing shares of
Restricted Stock are registered in the name of the Participant, certificates
must bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company may, at its
discretion, retain physical possession of the certificate until such time as all
applicable restrictions lapse.

     

    ARTICLE
7

     

    STOCK
APPRECIATION RIGHTS

     

    7.1          Grant of Stock Appreciation Rights.
A Stock Appreciation Right may be granted to any Eligible Participant
selected by the Committee. A Stock Appreciation Right may be granted (a) in
connection and simultaneously with the grant of an Option, (b) with respect to a
previously granted Option, or (c) independent of an Option. A Stock Appreciation
Right shall be subject to such terms and conditions not inconsistent with the
Plan as the Committee shall impose and shall be evidenced by an Award
Agreement.

     

    7.2          Coupled Stock Appreciation
Rights.

     

    (a)           A
Coupled Stock Appreciation Right (“CSAR”)
shall be related to a particular Option and shall be exercisable only when and
to the extent the related Option is exercisable.

     

    
      
        
        

      

      
        8.

        
          

        

      

      
        
        

      

    

     

    (b)           A
CSAR may be granted to a Participant for no more than the number of shares
subject to the simultaneously or previously granted Option to which it is
coupled.

     

    (c)           A
CSAR shall entitle the Participant (or other person entitled to exercise the
Option pursuant to the Plan) to surrender to the Company unexercised a portion
of the Option to which the CSAR relates (to the extent then exercisable pursuant
to its terms) and to receive from the Company in exchange therefor an amount
determined by multiplying the difference obtained by subtracting the Option
exercise price from the Fair Market Value of a share of Stock on the date of
exercise of the CSAR by the number of shares of Stock with respect to which the
CSAR shall have been exercised, subject to any limitations the Committee may
impose.

     

    7.3          Independent Stock Appreciation
Rights.

     

    (a)           An
Independent Stock Appreciation Right (“ISAR”) shall be unrelated to any Option
and shall have a term set by the Committee. An ISAR shall be exercisable in such
installments as the Committee may determine. An ISAR shall cover such number of
shares of Stock as the Committee may determine. The exercise price per share of
Stock subject to each ISAR shall be set by the Committee; provided, however, that, the
Committee in its sole and absolute discretion may provide that the ISAR may be
exercised subsequent to a termination of employment or service, as applicable,
or following a Change of Control, or because of the Participant’s retirement,
death or Disability, or otherwise.

     

    (b)           An
ISAR shall entitle the Participant (or other person entitled to exercise the
ISAR pursuant to the Plan) to exercise all or a specified portion of the ISAR
(to the extent then exercisable pursuant to its terms) and to receive from the
Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Stock on the date of exercise of the ISAR by the number of shares
of Stock with respect to which the ISAR shall have been exercised, subject to
any limitations the Committee may impose.

     

    7.4          Payment and Limitations on
Exercise.

     

    (a)           Payment
of the amounts determined under Section 7.2(c) and 7.3(b) above shall be in
cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the
Committee.

     

    (b)           To
the extent any payment under Section 7.2(c) or 7.3(b) is effected in Stock it
shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options.

     

    ARTICLE
8

     

    OTHER
TYPES OF AWARDS

     

    8.1          Performance Share Awards. Any
Eligible Participant selected by the Committee may be granted one or more
Performance Share awards which may be denominated in a number of shares of Stock
or in a dollar value of shares of Stock and which may be linked to any one or
more specific performance criteria determined appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined
by the Committee. In making such determinations, the Committee shall consider
(among such other factors as it deems relevant in light of the specific type of
award) the contributions, responsibilities and other compensation of the
particular Participant.

     

    
      
        
        

      

      
        9.

        
          

        

      

      
        
        

      

    

     

    8.2          Dividend Equivalents. Any
Eligible Participant selected by the Committee may be granted Dividend
Equivalents based on the dividends declared on the shares of Stock that are
subject to any Award, to be credited as of dividend payment dates, during the
period between the date the Award is granted and the date the Award is
exercised, vests or expires, as determined by the Committee. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such
formula and at such time and subject to such limitations as may be determined by
the Committee.

     

    8.3          Stock Payments. Any Eligible
Participant selected by the Committee may receive Stock Payments in the manner
determined from time to time by the Committee. The number of shares shall be
determined by the Committee and may be based upon specific performance criteria
determined appropriate by the Committee, determined on the date such Stock
Payment is made or on any date thereafter.

     

    8.4          Restricted Stock Units. Any
Eligible Participant selected by the Committee may be granted an award of
Restricted Stock Units in the manner determined from time to time by the
Committee. The number of Restricted Stock Units shall be determined by the
Committee and may be linked to the Performance Criteria or other specific
performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the
Committee. Stock underlying a Restricted Stock Unit award will not be issued
until the Restricted Stock Unit award has vested, pursuant to a vesting schedule
or performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Participant awarded Restricted Stock Units shall have no rights as
a Company stockholder with respect to such Restricted Stock Units until such
time as the Restricted Stock Units have vested and the Stock underlying the
Restricted Stock Units has been issued.

     

    8.5          Term.  The term of
any Award of Performance Shares, Dividend Equivalents, Stock Payments or
Restricted Stock Units shall be set by the Committee in its
discretion.

     

    8.6          Exercise or Purchase Price.
The Committee may establish the exercise or purchase price of any Award
of Performance Shares, Restricted Stock Units or Stock Payments; provided,
however, that such price shall not be less than the par value of a share of
Stock, unless otherwise permitted by applicable state law.

     

    8.7          Exercise Upon Termination of
Employment or Service. An Award of Performance Shares, Dividend
Equivalents, Restricted Stock Units and Stock Payments shall only be exercisable
or payable while the Participant is an Employee or Director of the Company or a
Subsidiary; provided, however, that the Committee in its sole and absolute
discretion may provide that an Award of Performance Shares, Dividend
Equivalents, Stock Payments or Restricted Stock Units may be exercised or paid
subsequent to a termination of employment or service, as applicable, or
following a Change of Control, or because of the Participant’s retirement, death
or Disability, or otherwise.

     

    
      
        
        

      

      
        10.

        
          

        

      

      
        
        

      

    

     

    8.8          Form of Payment. Payments with
respect to any Awards granted under this Article 8 shall be made in cash, in
Stock or a combination of both, as determined by the Committee.

     

    8.9          Award Agreement. All Awards
under this Article 8 shall be subject to such additional terms and conditions as
determined by the Committee and shall be evidenced by a written Award
Agreement.

     

    ARTICLE
9

     

    PROVISIONS
APPLICABLE TO AWARDS

     

    9.1          Stand-Alone and Tandem Awards.
Awards granted pursuant to the Plan may, in the discretion of the Committee, be
granted either alone, in addition to, or in tandem with, any other Award granted
pursuant to the Plan. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.

     

    9.2          Award Agreement. Awards under
the Plan shall be evidenced by Award Agreements that set forth the terms,
conditions and limitations for each Award which may include the term of an
Award, the provisions applicable in the event the Participant’s employment or
service terminates, and the Company’s authority to unilaterally or bilaterally
amend, modify, suspend, cancel or rescind an Award.

     

    9.3          Limits on Transfer. No right
or interest of a Participant in any Award may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a Subsidiary,
or shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Company or a Subsidiary. No Award shall be
assigned, transferred, or otherwise disposed of by a Participant other than by
will or the laws of descent and distribution.

     

    9.4          Beneficiaries. Notwithstanding
Section 9.3, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any
rights pursuant to the Plan is subject to all terms and conditions of the Plan
and any Award Agreement applicable to the Participant, except to the extent the
Plan and Award Agreement otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee. If the Participant is married
and resides in a community property state, a designation of a person other than
the Participant’s spouse as his beneficiary with respect to more than 50% of the
Participant’s interest in the Award shall not be effective without the prior
written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

     

    
      
        
        

      

      
        11.

        
          

        

      

      
        
        

      

    

     

    9.5         
Stock Certificates.
Notwithstanding anything herein to the contrary, the Company shall not be
required to issue or deliver any certificates evidencing shares of Stock
pursuant to the exercise of any Award, unless and until the Board has
determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to the Plan are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements. The Committee shall
have the right to require any Participant to comply with any timing or other
restrictions with respect to the settlement or exercise of any Award, including
a window-period limitation, as may be imposed in the discretion of the
Committee.

     

    ARTICLE
10

     

    CHANGES
IN CAPITAL STRUCTURE

     

    10.1        Adjustments. In the event of
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation, spin-off, recapitalization or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change
affecting the shares of Stock or the share price of the Stock, the Committee
shall make such proportionate adjustments, if any, as the Committee in its
discretion may deem appropriate to reflect such change with respect to (i) the
aggregate number and type of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Sections 3.1);
(ii) the terms and conditions of any outstanding Awards (including, without
limitation, any applicable performance targets or criteria with respect
thereto); and (iii) the grant or exercise price per share for any outstanding
Awards under the Plan.

     

    10.2        Effect of a Change of Control When
Awards Are Not Assumed. If a Change of Control occurs and a Participant’s
Awards are not assumed by the surviving or successor entity or its parent or
Subsidiary and such successor does not substitute substantially similar awards
for those outstanding under the Plan, such Awards shall become fully exercisable
and/or payable as applicable, and all forfeiture restrictions on such Awards
shall lapse. Upon, or in anticipation of, a Change of Control, the Committee may
cause any and all Awards outstanding hereunder to terminate at a specific time
in the future and shall give each Participant the right to exercise such Awards
during a period of time as the Committee, in its sole and absolute discretion,
shall determine. The Committee shall have sole discretion to determine whether
an Award has been assumed by the surviving or successor entity or its parent or
Subsidiary or whether such successor has substituted substantially similar
awards for those outstanding under the Plan in connection with a Change of
Control.

     

    
      
        
        

      

      
        12.

        
          

        

      

      
        
        

      

    

     

    10.3        Effect
of Change of Control When Awards Are Assumed; TerminationFollowing Change of
Control.

     

    (a)           In
the event of a Change of Control where a Participant’s Awards are assumed by the
surviving or successor entity or its parent or Subsidiary or such successor
substitutes substantially similar awards for those outstanding under the Plan,
then fifty percent (50%) of such Participant’s unvested Awards shall become
fully exercisable and/or payable as applicable, and all forfeiture restrictions
on such Awards shall lapse, immediately prior to such Change of
Control.

     

    (b)           In
the event of a Change of Control where a Participant’s Awards are assumed by the
surviving or successor entity or its parent or Subsidiary or such successor
substitutes substantially similar awards for those outstanding under the Plan,
if within twelve (12) months following such Change of Control (i) the
Participant’s employment or service with the surviving or successor entity or
its parent or Subsidiary is terminated without Cause or (ii) such Participant
voluntarily terminates such Participant’s employment or service with Good
Reason, then such Participant’s remaining unvested Awards (including any
substituted awards) shall become fully exercisable and/or payable as applicable,
and all forfeiture restrictions on such Awards (including any substituted
awards) shall lapse, on the date of termination. Such Awards (including any
substituted awards) shall remain exercisable, as applicable, until the earlier
of the expiration date of the Award or three (3) months following such
Participant’s cessation of employment or service.

     

    10.4        Outstanding Awards - Certain Mergers.
Subject to any required action by the stockholders of the Company, in the
event that the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the holders
of shares of Stock receive securities of another corporation), each Award
outstanding on the date of such merger or consolidation shall pertain to and
apply to the securities that a holder of the number of shares of Stock subject
to such Award would have received in such merger or consolidation.

     

    10.5        Outstanding Awards - Other Changes.
In the event of any other change in the capitalization of the Company or
corporate change other than those specifically referred to in this Article 10,
the Committee may, in its absolute discretion, make such adjustments in the
number and class of shares subject to Awards outstanding on the date on which
such change occurs and in the per share grant or exercise price of each Award as
the Committee may consider appropriate to prevent dilution or enlargement of
rights.

     

    10.6        No Other Rights. Except as
expressly provided in the Plan, no Participant shall have any rights by reason
of any subdivision or consolidation of shares of stock of any class, the payment
of any dividend, any increase or decrease in the number of shares of stock of
any class or any dissolution, liquidation, merger, or consolidation of the
Company or any other corporation. Except as expressly provided in the Plan or
pursuant to action of the Committee under the Plan, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number of shares of Stock subject to an Award or the grant
or exercise price of any Award.

     

    
      
        
        

      

      
        13.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
11

     

    ADMINISTRATION

     

    11.1        Committee. Unless and until
the Board delegates administration to the Committee as set forth below, the Plan
shall be administered by the Board, which shall, in such event, constitute the
“Committee” for the purposes of the Plan. Any action taken by the Board in
connection with the administration of the Plan shall not be deemed approved by
the Board unless such actions are approved by a majority of the Independent
Directors. The Board may delegate administration of the Plan to the Committee,
and the term “Committee” shall apply to any person or persons to whom such
authority has been delegated; provided, however, that such
Committee be comprised of a majority of or solely two or more Independent
Directors. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in the Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the
Board.

     

    The Board
may abolish the Committee at any time and revest in the Board the administration
of the Plan. Any action taken by the Board in connection with the administration
of the Plan shall continue to not be deemed approved by the Board unless such
actions are approved by a majority of the Independent Directors. Appointment of
Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee may only be filled by the Board.

     

    11.2        Action by the Committee. A
majority of the Committee shall constitute a quorum. The acts of a majority of
the members present at any meeting at which a quorum is present, and acts
approved in writing by a majority of the Committee in lieu of a meeting, shall
be deemed the acts of the Committee. Each member of the Committee is entitled
to, in good faith, rely or act upon any report or other information furnished to
that member by any officer or other employee of the Company or any Subsidiary,
the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

     

    11.3        Authority of Committee.
Subject to any specific designation in the Plan, the Committee has the
exclusive power, authority and discretion to:

     

    (a)           Adopt
procedures from time to time in the Committee’s discretion to ensure that an
Employee is eligible to participate in the Plan prior to the granting of any
Awards to such Employee under the Plan (including, without limitation, a
requirement, if any, that each such Employee certify to the Company prior to the
receipt of an Award under the Plan that he or she has not been previously
employed by the Company or a Subsidiary, or if previously employed, has had a
bona fide period of non-employment, and that the grant of Awards under the Plan
is an inducement material to his or her agreement to enter into employment with
the Company or a Subsidiary);

     

    
      
        
        

      

      
        14.

        
          

        

      

      
        
        

      

    

     

    (b)           Designate
Participants to receive Awards;

     

    (c)           Determine
the type or types of Awards to be granted to each Participant;

     

    (d)           Determine
the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

     

    (e)           Determine
the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any
reload provision, any restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines;

     

    (f)           Determine
whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

     

    (g)          Prescribe
the form of each Award Agreement, which need not be identical for each
Participant;

     

    (h)          Decide
all other matters that must be determined in connection with an
Award;

     

    (i)           Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable
to administer the Plan;

     

    (j)           Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

     

    (k)          Make
all other decisions and determinations that may be required pursuant to the Plan
or as the Committee deems necessary or advisable to administer the
Plan.

     

    12.4       
Decisions Binding. The Committee’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

     

    ARTICLE
12

     

    EFFECTIVE
AND EXPIRATION DATE

     

    12.1        Effective Date. The Plan is
effective as of the date of its adoption by the Board (the “Effective
Date”).

     

    12.2        Expiration Date. The Plan will
expire on, and no Award may be granted pursuant to the Plan after December 31,
2015 (the “Expiration
Date”). Any Awards that are outstanding on the Expiration Date shall
remain in force according to the terms of the Plan and the applicable Award
Agreement. Each Award Agreement shall provide that it will expire on the tenth
anniversary of the date of grant of the Award to which it relates.

     

    
      
        
        

      

      
        15.

        
          

        

      

      
        
        

      

    

     

    ARTICLE
13

     

    AMENDMENT,
MODIFICATION, AND TERMINATION

     

    13.1        Amendment, Modification, and
Termination. With the approval of the Board, at any time and from time to
time, the Committee may terminate, amend or modify the Plan; provided, however, that to
the extent necessary and desirable to comply with any applicable law,
regulation, or stock exchange rule, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as
required.

     

    13.2        Awards Previously Granted. No
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted pursuant to the Plan without the
prior written consent of the Participant.

     

    ARTICLE
14

     

    GENERAL
PROVISIONS

     

    14.1        No Rights to Awards. No
Participant, employee, or other person shall have any claim to be granted any
Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Participants, employees, and other persons
uniformly.

     

    14.2        No Stockholders Rights. No
Award gives the Participant any of the rights of a stockholder of the Company
unless and until shares of Stock are in fact issued to such person in connection
with such Award.

     

    14.3        Withholding. The Company or
any Subsidiary shall have the authority and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local and foreign taxes (including the Participant’s FICA
obligation) required by law to be withheld with respect to any taxable event
concerning a Participant arising as a result of the Plan. The Committee may in
its discretion and in satisfaction of the foregoing requirement allow a
Participant to elect to have the Company withhold shares of Stock otherwise
issuable under an Award (or allow the return of shares of Stock) having a Fair
Market Value equal to the sums required to be withheld. Notwithstanding any
other provision of the Plan, the number of shares of Stock which may be withheld
with respect to the issuance, vesting, exercise or payment of any Award (or
which may be repurchased from the Participant of such Award within six months
after such shares of Stock were acquired by the Participant from the Company) in
order to satisfy the Participant’s federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares which have a Fair
Market Value on the date of withholding or repurchase equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income.

     

    14.4        No Right to Employment or Services.
Nothing in the Plan or any Award Agreement shall interfere with or limit
in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment or services at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company or any
Subsidiary.

     

    
      
        
        

      

      
        16.

        
          

        

      

      
        
        

      

    

     

    14.5        Unfunded Status of Awards. The
Plan is intended to be an “unfunded” plan for incentive compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award Agreement shall give the Participant
any rights that are greater than those of a general creditor of the Company or
any Subsidiary.

     

    14.6        Indemnification. To the extent
allowable pursuant to applicable law, each member of the Committee or of the
Board shall be indemnified and held harmless by the Company from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by such
member in connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action or failure to act pursuant to the Plan and
against and from any and all amounts paid by him or her in satisfaction of
judgment in such action, suit, or proceeding against him or her; provided, he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled pursuant to the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.

     

    14.7        Relationship to Other Benefits.
No payment pursuant to the Plan shall be taken into account in
determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any
Subsidiary except to the extent otherwise expressly provided in writing in such
other plan or an agreement thereunder.

     

    14.8        Expenses. The expenses of
administering the Plan shall be borne by the Company and its
Subsidiaries.

     

    14.9        Titles and Headings. The
titles and headings of the Articles and Sections in the Plan are for convenience
of reference only and, in the event of any conflict, the text of the Plan,
rather than such titles or headings, shall control.

     

    14.10     Fractional Shares. No
fractional shares of Stock shall be issued and the Committee shall determine, in
its discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding up or down as
appropriate.

     

    14.11     Limitations Applicable to Section 16
Persons. Notwithstanding any other provision of the Plan, the Plan, and
any Award granted or awarded to any Participant who is then subject to Section
16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including
any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan and Awards granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.

     

    
      
        
        

      

      
        17.

        
          

        

      

      
        
        

      

    

     

    14.12     Government And Other Regulations.
The obligation of the Company to make payment of awards in Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and
to such approvals by government agencies as may be required. The Company shall
be under no obligation to register pursuant to the Securities Act of 1933, as
amended, any of the shares of Stock paid pursuant to the Plan. If the shares
paid pursuant to the Plan may in certain circumstances be exempt from
registration pursuant to the Securities Act of 1933, as amended, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

     

    14.13     Governing Law. The Plan and
all Award Agreements shall be construed in accordance with and governed by the
laws of the State of Delaware.

     

    14.14     SECTION 409A OF THE CODE. In
the event any provision of the Plan, or the application thereof, is or becomes
inconsistent with Section 409A of the Code and any regulations promulgated
thereunder, such provision shall be void or unenforceable or in the sole
discretion of the Committee shall be deemed amended to comply with Section 409A
and any regulations promulgated thereunder. The other provisions of the Plan
shall remain in full force and effect.

     

    ARTICLE
15

     

    GENERAL
PROVISIONS

     

    15.1       
STOCKHOLDER APPROVAL NOT
REQUIRED. It is expressly intended that approval of the Company’s
stockholders not be required as a condition of the effectiveness of the Plan,
and the Plan’s provisions shall be interpreted in a manner consistent with such
intent for all purposes. Specifically, Rule 4350(i) promulgated by the NASD
generally requires stockholder approval for stock option plans or other equity
compensation arrangements adopted by companies whose securities are listed on
the Nasdaq National Market pursuant to which stock awards or stock may be
acquired by officers, directors, employees, or consultants of such companies.
NASD Rule 4350(i)(1)(A)(iv) provides an exception to this requirement for
issuances of securities to a person not previously an employee or director of
the issuer, or following a bona fide period of non-employment, as an inducement
material to the individual’s entering into employment with the issuer; provided, such issuances are
approved by either the issuer’s compensation committee comprised of a majority
of independent directors or a majority of the issuer’s independent directors.
Awards under the Plan may only be made to Eligible Participants who have not
previously been an Employee or director of the Company or a Subsidiary, or
following a bona fide period of non-employment by the Company or a Subsidiary,
as an inducement material to the Eligible Participant’s entering into employment
with the Company or a Subsidiary. Awards under the Plan will be approved by (i)
the Company’s Compensation Committee comprised of a majority of the Company’s
Independent Directors or (ii) a majority of the Company’s Independent Directors.
Accordingly, pursuant to NASD Rule 4350(i)(1)(A)(iv), the issuance of Awards and
the shares of Common Stock issuable upon exercise or vesting of such Awards
pursuant to the Plan are not subject to the approval of the Company’s
stockholders.

     

    
      
        
        

      

      
        18.

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