Document:

Prepared and filed by St Ives Financial

 

Exhibit 10.1

MIVA, INC.

2006 STOCK AWARD AND INCENTIVE PLAN

 

MIVA, INC.

2006 STOCK AWARD AND INCENTIVE PLAN

	 	 	Page
	 	 	 
	1.	Purpose	1
	 	 	 
	2.	Definitions	1
	 	 	 
	3.	Administration	3
	 	 	 
	4.	Stock Subject to Plan	3
	 	 	 
	5.	Eligibility; Per-Person Award
    Limitations	4
	 	 	 
	6.	Specific Terms of Awards	4
	 	 	 
	7.	Performance Awards, Including
    Annual Incentive Awards	7
	 	 	 
	8.	Certain Provisions Applicable
    to Awards	10
	 	 	 
	9.	Change in Control	10
	 	 	 
	10.	Additional Award Forfeiture
    Provisions	12
	 	 	 
	11.	General Provisions	12

 

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MIVA, INC. 

2006 STOCK AWARD AND INCENTIVE PLAN 

	 	
     1.        Purpose.  The purpose of this 2006 Stock Award and Incentive Plan (the “Plan”) is to aid MIVA, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), in attracting, retaining, motivating and rewarding employees, non-employee directors, and other service providers of the Company or its subsidiaries or affiliates, to provide for equitable and competitive compensation opportunities, to recognize individual contributions and reward achievement of Company goals, and promote the creation of long-term value for stockholders by closely aligning the interests of Participants with those of stockholders.  The Plan authorizes stock-based and
cash-based incentives for Participants.  

	 	 
	 	
     2.        Definitions.  In addition to the terms defined in Section 1 above and elsewhere in the Plan, the following capitalized terms used in the Plan have the respective meanings set forth in this Section: 

	 	 
	 	
     (a)       “Annual Incentive Award” means a type of Performance Award granted to a Participant under Section 7(c) representing a conditional right to receive cash, Stock or other Awards or payments, as determined by the Committee, based on performance in a performance period of one fiscal year or a portion thereof.  

	 	 
	 	
     (b)       “Annual Limit” shall have the meaning specified in Section 5(b).  

	 	 
	 	
     (c)       “Award” means any Option, SAR, Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual Incentive Award, together with any related right or interest, granted to a Participant under the Plan.  

	 	 
	 	
     (d)       “Beneficiary” means the legal representatives of the Participant’s estate entitled by will or the laws of descent and distribution to receive the benefits under a Participant’s Award upon a Participant’s death, provided that, if and to the extent authorized by the Committee, a Participant may be permitted to designate a Beneficiary, in which case the “Beneficiary” instead will be the person, persons, trust or trusts (if any are then surviving) which have been designated by the Participant in his or her most recent written and duly filed beneficiary designation to receive the benefits specified under the Participant’s Award upon such Participant’s death.  Unless otherwise
determined by the Committee, any designation of a Beneficiary other than a Participant’s spouse shall be subject to the written consent of such spouse.  

	 	 
	 	
     (e)       “Board” means the Company’s Board of Directors.  

	 	 
	 	
     (f)       “Change in Control” and related terms have the meanings specified in Section 9.  

	 	 
	 	
     (g)       “Code” means the Internal Revenue Code of 1986, as amended.  References to any provision of the Code or regulation thereunder shall include any successor provisions and regulations, and reference to regulations includes any applicable guidance or pronouncement of the Department of the Treasury and Internal Revenue Service.  

	 	 
	 	
     (h)       “Committee” means the Compensation Committee of the Board, the composition and governance of which is established in the Committee’s Charter as approved from time to time by the Board and subject to other corporate governance documents of the Company.  No action of the Committee shall be void or deemed to be without authority due to the failure of any member, at the time the action was taken, to meet any qualification standard set forth in the Committee Charter or this Plan.  The full Board may perform any function of the Committee hereunder (except to the extent limited under applicable Nasdaq Marketplace Rules), in which case the term “Committee” shall refer to the Board.

	 	 
	 	
     (i)       “Covered Employee” means an Eligible Person who is a Covered Employee as specified in Section 11(j).  

	 	 
	 	
     (j)       “Deferred Stock” means a right, granted under this Plan, to receive Stock or other Awards or a combination thereof at the end of a specified deferral period.  

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     (k)       “Dividend Equivalent” means a right, granted under this Plan, to receive cash, Stock, other Awards or other property equal in value to all or a specified portion of the dividends paid with respect to a specified number of shares of Stock.  

	 	 
	 	
     (l)       “Effective Date” means the effective date specified in Section 11(p).  

	 	 
	 	
     (m)       “Eligible Person” has the meaning specified in Section 5.  

	 	 
	 	
     (n)       “Exchange Act” means the Securities Exchange Act of 1934, as amended.  References to any provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any successor provisions and rules.  

	 	 
	 	
     (o)       “Fair Market Value” means the fair market value of Stock, Awards or other property as determined in good faith by the Committee or under procedures established by the Committee.  Unless otherwise determined by the Committee, the Fair Market Value of Stock on a given day shall be the last sale price of a share of stock before the 4 p.m. Eastern Time closing time (or equivalent earlier time for partial trading days) on the last preceding day on which the common stock was traded, as reported for securities listed on the principle securities exchange or market maintained by NASDAQ or, if available, on a composite tape reflecting transactions on such exchange or NASDAQ-maintained market (as
the case may be). Fair Market Value relating to the exercise price or base price of any Non-409A Option or SAR and relating to the market value of Stock measured at the time of exercise shall conform to requirements under Code Section 409A.  

	 	 
	 	
     (p)      “409A Awards” means Awards that constitute a deferral of compensation under Code Section 409A and regulations thereunder.  “Non-409A Awards” means Awards other than 409A Awards.  Although the Committee retains authority under the Plan to grant Options, SARs and Restricted Stock on terms that will qualify those Awards as 409A Awards, Options, SARs, and Restricted Stock are intended to be Non-409A Awards unless otherwise expressly specified by the Committee.  

	 	 
	 	
     (q)       “Incentive Stock Option” or “ISO” means any Option designated as an incentive stock option within the meaning of Code Section 422 and qualifying thereunder.  

	 	 
	 	
     (r)       “Option” means a right to purchase Stock granted under Section 6(b).  

	 	 
	 	
     (s)       “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h).  

	 	 
	 	
     (t)       “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.  

	 	 
	 	
     (u)       “Performance Award” means a conditional right, granted to a Participant under Sections 6(i) or 7, to receive cash, Stock or other Awards or payments.  

	 	 
	 	
     (v)       “Restricted Stock” means Stock granted under this Plan which is subject to certain restrictions and to a risk of forfeiture.  

	 	 
	 	
     (w)       “Stock” means the Company’s Common Stock, par value $0.001 per share, and any other equity securities of the Company that may be substituted or resubstituted for Stock pursuant to Section 11(c).  

	 	 
	 	
     (x)       “Stock Appreciation Rights” or “SAR” means a right granted to a Participant under Section 6(c).  

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	 	3.        Administration.  

	 	 
	 	
     (a)       Authority of the Committee.  The Plan shall be administered by the Committee, which shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture or deferral period relating to Awards shall lapse or terminate, the acceleration of any such dates, the expiration date of any Award, whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Stock, other Awards, or other property,
and other terms and conditions of, and all other matters relating to, Awards; to prescribe documents evidencing or setting terms of Awards (such Award documents need not be identical for each Participant or each Award), amendments thereto, and rules and regulations for the administration of the Plan and amendments thereto; to construe and interpret the Plan and Award documents and correct defects, supply omissions or reconcile inconsistencies therein; and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan.  Decisions of the Committee with respect to the administration and interpretation of the Plan shall be final, conclusive, and binding upon all persons interested in the Plan, including Participants,
Beneficiaries, transferees under Section 11(b) and other persons claiming rights from or through a Participant, and stockholders.  The foregoing notwithstanding, the Board shall perform the functions of the Committee for purposes of granting Awards under the Plan to non-employee directors (the functions of the Committee with respect to other aspects of non-employee director awards is not exclusive to the Board, however).  

	 	 
	 	
     (b)       Manner of Exercise of Committee Authority.  The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.  The Committee may act through subcommittees, including for purposes of perfecting exemptions under Rule 16b-3 or qualifying Awards under Code Section 162(m) as performance-based compensation, in which case the subcommittee shall be subject to and have authority under the charter applicable to the Committee, and the acts of the subcommittee shall be deemed to be acts of the Committee hereunder.  The Committee may delegate to officers or managers of the Company or
any subsidiary or affiliate, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee may determine, to the extent (i) that such delegation will not result in the loss of an exemption under Rule 16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify, and (ii) permitted under Section 157 and other applicable provisions of the Delaware General Corporation Law.   

	 	 
	 	
     (c)       Limitation of Liability.  The Committee and each member thereof, and any person acting pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or a subsidiary or affiliate, the Company’s independent auditors, consultants or any other agents assisting in the administration of the Plan.  Members of the Committee, any person acting pursuant to authority delegated by the Committee, and any officer or employee of the Company or a subsidiary or affiliate acting at the direction or on behalf of the Committee or a delegee shall not be
personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.  

	 	 
	 	
     4.        Stock Subject To Plan.  

	 	 
	 	
     (a)       Overall
Number of Shares Available for Delivery.  The total number of shares
of Stock reserved and available for delivery in connection with Awards under
the Plan shall be (i) two million shares, plus (ii) the number of shares that,
immediately prior to the Effective Date, remain available for new awards under
the 1999 Stock Incentive Plan and under the 2004 Stock Incentive Plan, plus (iii)
the number of shares subject to awards under the 1999 Stock Incentive Plan and
2004 Stock Incentive Plan that become available in accordance with Section 4(b)
after the Effective Date; provided, however, that the total number of shares
with respect to which ISOs may be granted shall not exceed the number specified
under clause (i) above. Any shares of Stock delivered under the Plan shall consist
of authorized and unissued shares or treasury shares.  

	 	 
	 	
     (b)       Share Counting Rules.
The Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or substitute
awards) and make

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	 	 adjustments in accordance with
        this Section 4(b). Shares shall be counted against those reserved to
        the extent such shares have
            been delivered and are no longer subject to a risk of forfeiture.
            Accordingly, (i) to the extent that an Award under the Plan, an award
            under the 1999 Stock Incentive Plan, or an award granted under the
            2004 Stock Incentive Plan (other than to a non-United States resident)
            is canceled, expired, forfeited, settled in cash, settled by delivery
            of fewer shares than the number underlying the Award or award, or
            otherwise terminated without delivery of shares to the participant,
            the shares retained by or returned to the Company will not be deemed
            to have been delivered under the Plan; and (ii) shares that are withheld
            from such an Award or award or separately surrendered by the participant
            in payment of the exercise price or taxes relating to such an Award
            or award shall be deemed to constitute shares not delivered and will
            be available under the Plan. The Committee may determine that Awards
            may be outstanding that relate to more shares than the aggregate
            remaining available under the Plan so long as Awards will not in
            fact result in delivery and vesting of shares in excess of the number
            then available under the Plan. In addition, in the case of any Award
            granted in assumption of or in substitution for an award of a company
            or business acquired by the Company or a subsidiary or affiliate
            or with which the Company or a subsidiary or affiliate combines,
            shares delivered or deliverable in connection with such assumed or
            substitute Award shall not be counted against the number of shares
            reserved under the Plan

	 	 
	 	
     5.      Eligibility; Per-Person Award Limitations.  

	 	 
	 	
     (a)      Eligibility.  Awards may be granted under the Plan only to Eligible Persons.  For purposes of the Plan, an “Eligible Person” means (i) an employee of the Company or any sub­sid­iary or affiliate, including any executive officer or employee director of the Company or a sub­sidiar­y or affiliate, (ii) any person who has been offered employment by the Company or a subsidiary or affiliate, provided that such prospective employee may not receive any payment or exercise any right relating to an Award until such person has commenced employment with the Company or a subsidiary or affiliate, (iii) any non-employee director of the Company, and (iv) any person who
provides substantial services to the Company or a subsidiary or affiliate.  An employee on leave of absence may be considered as still in the employ of the Company or a subsidiary or affiliate for purposes of eligibility for participation in the Plan.  For purposes of the Plan, a joint venture in which the Company or a subsidiary has a substantial direct or indirect equity investment shall be deemed an affiliate, if so determined by the Committee.  Holders of awards granted by a company or business acquired by the Company or a subsidiary or affiliate, or with which the Company or a subsidiary or affiliate combines, are eligible for grants of substitute awards granted in assumption of or in substitution for such outstanding awards previously granted under the Plan in connection with such
acquisition or combination transaction.  

	 	 
	 	
     (b)       Per-Person Award Limitations.  In each calendar year during any part of which the Plan is in effect, an Eligible Person may be granted Awards intended to qualify as “performance-based compensation” under Code Section 162(m) under the Plan relating to up to his or her Annual Limit.  A Participant’s Annual Limit, in any year during any part of which the Participant is then eligible under the Plan, shall equal one million  shares plus the amount of the Participant’s unused Annual Limit relating to the same type of Award as of the close of the previous year, subject to adjustment as provided in Section 11(c).  In the case of an Award which is not valued in a way in which the
limitation set forth in the preceding sentence would operate as an effective limitation satisfying applicable law (including Treasury Regulation 1.162-27(e)(4)), an Eligible Person may not be granted Awards authorizing the earning during any calendar year of an amount that exceeds the Eligible Person’s Annual Limit, which for this purpose shall equal $2.0 million plus the amount of the Eligible Person’s unused cash Annual Limit as of the close of the previous year (this limitation is separate and not affected by the number of Awards granted during such calendar year subject to the limitation in the preceding sentence).  For this purpose, (i) “earning” means satisfying performance conditions so that an amount becomes payable, without regard to whether it is to be paid currently or
on a deferred basis or continues to be subject to any service requirement or other non-performance condition, (ii) a Participant’s Annual Limit is used to the extent an amount or number of shares may be potentially earned or paid under an Award, regardless of whether such amount or shares are in fact earned or paid, and (iii) the Annual Limit applies to Dividend Equivalents under Section 6(g) only if such Dividend Equivalents are granted separately from and not as a feature of another Award.

	 	 
	 	6.        Specific Terms Of Awards.  

	 	 
	 	
     (a)       General.
Awards may be granted on the terms and conditions set forth in this Section 6.
In addition, the Committee may impose on any Award or the exercise thereof, at
the date of grant or thereafter (subject to Sections 11(e) and 11(k)), such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms requiring forfeiture of Awards in
the event of termination of

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	 	 employment
        or service by the Participant and terms permitting a Participant to make
        elections relating to his or her Award. The Committee shall retain full
        power and discretion with respect to any term or condition of an Award
        that is not mandatory under the Plan, subject to Section 11(k) and the
        terms of the Award agreement. The Committee shall require the payment
        of lawful consideration for an Award to the extent necessary to satisfy
        the requirements of the Delaware General Corporation Law, and may otherwise
        require payment of consideration for an Award except as limited by the
        Plan. 

	 	 
	 	 	(b)	
Options.  The Committee is authorized to grant Options to Participants on the following terms and conditions: 

	 	 	 	 
	 	 	(i) 	
 Exercise Price.  The exercise price per share of Stock purchasable under an Option (including both ISOs and non-qualified Options) shall be determined by the Committee, provided that such exercise price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such Option, subject to Section 8(a).  Notwithstanding the foregoing, any substitute award granted in assumption of or in substitution for an outstanding award granted by a company or business acquired by the Company or a subsidiary or affiliate, or with which the Company or a subsidiary or affiliate combines may be granted with an exercise price per share of Stock other than as required above.  No adjustment will be made for a dividend or other right for which the record
date is prior to the date on which the stock is issued, except as provided in Section 11(c) of the Plan.

	 	 	 	 
	 	 	(ii) 	
 Option Term; Time and Method of Exercise.  The Committee shall determine the term of each Option, provided that in no event shall the term of any Option exceed a period of ten years from the date of grant.  The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such exercise price may be paid or deemed to be paid and the form of such payment (subject to Sections 11(k) and 11(l)), including, without limitation, cash, Stock (including by withholding Stock deliverable upon exercise), other Awards or awards granted under other plans of the Company or any subsidiary or
affiliate, or other property (including through broker-assisted “cashless exercise” arrangements, to the extent permitted by applicable law), and the methods by or forms in which Stock will be delivered or deemed to be delivered in satisfaction of Options to Participants (including, in the case of 409A Awards, deferred delivery of shares subject to the Option, as mandated by the Committee, with such deferred shares subject to any vesting, forfeiture or other terms as the Committee may specify).  

	 	 	 	 
	 	 	(iii) 	
 ISOs.  The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Code Section 422.

	 	 
	 	 	
(c)	
Stock Appreciation Rights.  The Committee is authorized to grant SARs to Participants on the following terms and conditions: 

	 	 	 	 
	 	 	(i) 	
 Right to Payment.  An SAR shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.  

	 	 	 	 
	 	 	(ii) 	
 Other Terms.  The Committee shall determine the
term of each SAR, provided that in no event shall the term of an SAR exceed a
period of ten years from the date of grant. The Committee shall determine at
the date of grant or thereafter, the time or times at which and the circumstances
under which a SAR may be exercised in whole or in part (including based on achievement
of performance goals and/or future service requirements), the method of exercise,
method of settlement, form of consideration payable in settlement, method by
or forms in which Stock will be delivered or deemed to be delivered to Participants,
whether or not a SAR shall be free-standing or in tandem or combination with
any other Award, and whether or not the SAR will be a 409A Award or Non-409A
Award. Limited SARs that may only be exercised in connection with a Change in
Control or termination of service following a Change in Control as specified
by the Committee may be granted on such terms, not inconsistent with this Section
6(c), as the

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	 	 	 	  Committee may
        determine. The Committee may require that an outstanding Option be exchanged
        for an SAR exercisable for Stock having vesting, expiration, and other
        terms substantially the same as the Option, so long as such exchange
        will not result in additional accounting expense to the Company.

(d)    Restricted Stock.
    The Committee is authorized to grant Restricted Stock to Participants on
the following terms and conditions:

	 	 	(i)	
 Grant and Restrictions.  Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise and under such other circumstances as the Committee may determine at the date of grant or thereafter.  Except to the extent restricted under the terms of the Plan and any Award document relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right
to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee).  

	 	 	 	 
	 	 	(ii) 	
 Forfeiture.  Except as otherwise determined by the Committee, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes.  

	 	 	 	 
	 	 	(iii) 	
 Certificates for Stock.  Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine.  If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.  

	 	 	 	 
	 	 	(iv) 	
 Dividends and Splits.  As a condition to the grant of an Award of Restricted Stock, the Committee may require that any dividends paid on a share of Restricted Stock shall be either (A) paid with respect to such Restricted Stock at the dividend payment date in cash, in kind, or in a number of shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) automatically reinvested in additional Restricted Stock or held in kind, which shall be subject to the same terms as applied to the original Restricted Stock to which it relates, or (C) deferred as to payment, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in shares of Deferred Stock, other Awards or other investment vehicles,
subject to such terms as the Committee shall determine or permit a Participant to elect.  Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.  

(e)       Deferred
        Stock. The Committee is authorized to grant Deferred Stock to
Participants, subject to the following terms and conditions: 

	 	 	(i)  	
 Award and Restrictions.  Issuance of Stock will
occur upon expiration of the deferral period specified for an Award of Deferred
Stock by the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, Deferred Stock shall be subject to such restrictions
on transferability, risk of forfeiture and other restrictions, if any, as the
Committee may impose, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in combination, in installments
or otherwise, and under such other circumstances as

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	 	 	 	  the
        Committee may determine at the date of grant or thereafter. Deferred
        Stock may be satisfied by delivery of Stock, other Awards, or a combination
        thereof (subject to Section 11(l)), as determined by the Committee at
        the date of grant or thereafter. 

	 	 	 	 
	 	 	(ii)  	
 Forfeiture.  Except as otherwise determined by the Committee, upon termination of employment or service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award document evidencing the Deferred Stock), all Deferred Stock that is at that time subject to such forfeiture conditions shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award document, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock will lapse in whole or in part, including in the event of terminations resulting from specified causes.   Deferred Stock subject to a risk of forfeiture may be called “restricted stock units” or
otherwise designated by the Committee. 

	 	 	 	 
	 	 	(iii) 	
 Dividend Equivalents.  Unless otherwise determined by the Committee, Dividend Equivalents on the specified number of shares of Stock covered by an Award of Deferred Stock shall be either (A) paid with respect to such Deferred Stock at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock, either as a cash deferral or with the amount or value thereof automatically deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles having a Fair Market Value equal to the amount of such dividends, as the Committee shall determine or permit a Participant to elect.  

(f)       Bonus
        Stock and Awards in Lieu of Obligations. The Committee is authorized
        to grant to Participants Stock as a bonus, or to grant Stock or other
        Awards in lieu of obligations of the Company or a subsidiary or affiliate
        to pay cash or deliver other property under the Plan or under other plans
        or compensatory arrangements, subject to such terms as shall be determined
by the Committee. 

(g)       Dividend Equivalents.  The
 Committee is authorized to grant Dividend Equivalents to a Participant, which may be awarded on a
  free-standing basis or in connection with another Award.  The Committee may provide that
   Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to
   have been reinvested in additional Stock, Awards, or other investment vehicles, and
    subject to restrictions on transferability, risks of forfeiture and such other terms
 as the Committee may specify.  

(h)       Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to grant to Participants
such other Awards that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock or factors that may influence the value of Stock,
 including, without limitation, convertible or exchangeable debt securities, other rights
 convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and
 payment contingent upon performance of the Company or business units thereof or any other
  factors designated by the Committee, and Awards valued by reference to the book value of
  Stock or the
value of securities of or the performance of specified subsidiaries or affiliates
 or other business units.  The Committee shall determine the terms and conditions
 of such Awards.  Stock delivered pursuant to an Award in the nature of a purchase
  right granted under this Section 6(h) shall be purchased for such consideration,
  paid for at such times, by such methods, and in such forms, including, without limitation,
  cash, Stock, other Awards, notes, or other property, as the Committee shall determine.
   Cash awards, as an element of or supplement to any other Award under the Plan, may also
    be granted pursuant to this Section 6(h).

(i)      Performance Awards.
 Performance Awards, denominated in cash or in Stock or other Awards, may be granted by
  the Committee in accordance with Section 7.

7.        Performance Awards,
Including Annual Incentive Awards.  

(a)       Performance Awards Generally.
Performance Awards may be denominated as a cash amount, number of shares of Stock,
or specified number of other Awards (or a combination) which may be earned upon
achievement or satisfaction of performance conditions specified by the Committee.
In addition, the Committee may specify that any other Award shall constitute
a Performance Award by conditioning the right of a Participant to exercise the
Award or have it settled, and the timing thereof, upon achievement or satisfaction
of such performance conditions as may be specified by the Committee. The Committee
may use such business criteria and other measures of performance as it may deem
appropriate
in establishing any performance conditions, and may exercise

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its discretion to reduce or increase
    the amounts payable under any Award subject to performance conditions, except
    as limited under Sections 7(b) and 7(c) in the case of a Performance Award
    intended to qualify as “performance-based compensation” under Code
Section 162(m).

 (b)       Performance
Awards Granted to Covered Employees. If the Committee determines that
a Performance Award to be granted to an Eligible Person who is designated by
the Committee as likely to be a Covered Employee should qualify as “performance-based
compensation” for purposes of Code Section 162(m), the grant, exercise and/or
settlement of such Performance Award shall be contingent upon achievement of
a preestablished performance goal and other terms set forth in this Section 7(b).

	 	 	(i) 	
 Performance Goal Generally.  The performance goal for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7(b).  The performance goal shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder, including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance Awards.  Performance goals may differ for Performance Awards granted to any one Participant or to different Participants.  

	 	 	 	 
	 	 	(ii) 	
 Business Criteria.  One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or other business units of the Company shall be used by the Committee in establishing performance goals for such Performance Awards: (1) gross revenue or sales measures; (2) operating income, earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items, (3) net income or net income per common share (basic or diluted); (4) return on assets, return on investment, return on capital, or return on equity; (5) cash flow, free cash flow, cash flow return on investment, or net cash provided by operations; (6) interest
expense after taxes; (7) economic profit or value created; (8) operating margin; (9) stock price or total stockholder return; and (10) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates, joint ventures or other assets.  The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in absolute terms, as a goal
relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.  

	 	 	 	 
	 	 	(iii) 	
 Performance Period; Timing for Establishing Performance Goals.  Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year, as specified by the Committee.  A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed.  

	 	 	 	 
	 	 	(iv) 	
 Performance Award Pool.  The Committee may establish a Performance Award pool, which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards.  The amount of such Performance Award pool shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section  7(b)(ii) during the given performance period, as specified by the Committee in accordance with Section 7(b)(iv).  The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria.
 

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	 	 	(v) 	
 Settlement of Performance Awards; Other Terms.  Settlement of Performance Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee.  The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 7(b) beyond the level of payment authorized for achievement of the performance goal specified under this Section 7(b) based on the actual level of achievement of such goal.  Any settlement which changes the form of payment from that originally specified shall be implemented in a manner such that
the Performance Award and other related Awards do not, solely for that reason, fail to qualify as “performance-based compensation” for purposes of Code Section 162(m).  The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Performance Awards.  

(c)       Annual
        Incentive Awards Granted to Designated Covered Employees. The
        Committee may grant an Annual Incentive Award to an Eligible Person who
        is designated by the Committee as likely to be a Covered Employee. Such
        Annual Incentive Award will be intended to qualify as “performance-based
        compensation” for purposes of Code Section 162(m), and its grant,
        exercise and/or settlement shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 7(c). 

	 	 	(i) 	
 Grant of Annual Incentive Awards.  Not later than the earlier of 90 days after the beginning of any performance period applicable to such Annual Incentive Award or the time 25% of such performance period has elapsed, the Committee shall determine the Covered Employees who will potentially receive Annual Incentive Awards, and the amount(s) potentially payable thereunder, for that performance period.  The amount(s) potentially payable shall be based upon the achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 7(b)(ii) in the given performance period, as specified by the Committee.  The Committee may designate an annual incentive award pool as the means by which Annual Incentive Awards will be measured,
which pool shall conform to the provisions of Section 7(b)(iv).  In such case, the portion of the Annual Incentive Award pool potentially payable to each Covered Employee shall be preestablished by the Committee.  In all cases, the maximum Annual Incentive Award of any Participant shall be subject to the limitation set forth in Section 5.  

	 	 	 	 
	 	 	(ii) 	
 Payout of Annual Incentive Awards.  After the end of each performance period, the Committee shall determine the amount, if any, of the Annual Incentive Award for that performance period payable to each Participant.  The Committee may, in its discretion, determine that the amount payable to any Participant as a final Annual Incentive Award shall be reduced from the amount of his or her potential Annual Incentive Award, including a determination to make no final Award whatsoever, but may not exercise discretion to increase any such amount in respect of an Award subject to this Section 7(b) beyond the level of payment authorized for achievement of the performance goal specified under this Section 7(c) based on the actual level of achievement of such goal.  The
Committee shall specify the circumstances in which an Annual Incentive Award shall be paid or forfeited in the event of termination of employment by the Participant or other event prior to the end of a performance period or settlement of such Annual Incentive Award.  

(d)       Written Determinations.  Determinations by the Committee as to the establishment of performance goals, the amount potentially payable in respect of Performance Awards and Annual Incentive Awards, the level of actual achievement of the specified performance goals relating to Performance Awards and Annual Incentive Awards, and the amount of any final Performance Award and Annual Incentive Award shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m).  Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m), prior to settlement of each such Award granted to a Covered
Employee, that the performance objective relating to the Performance Award and other material
 terms of the Award upon which settlement of the Award was conditioned have been satisfied.

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8.     Certain Provisions
Applicable To Awards.

  
  (a)       Stand-Alone,
          Additional, Tandem, and Substitute Awards. Awards granted under
          the Plan may, in the discretion of the Committee, be granted either
          alone or in addition to, in tandem with, or in substitution or exchange
          for, any other Award or any award granted under another plan of the
          Company, any subsidiary or affiliate, or any business entity to be
          acquired by the Company or a subsidiary or affiliate, or any other
          right of a Participant to receive payment from the Company or any subsidiary
          or affiliate; provided, however, that a 409A Award may not be granted
          in tandem with a Non-409A Award; and, provided further, that any exchange
          or substitution of an Award or buyout of an Award under the Plan shall
          be subject to applicable requirements of Section 11(e) if the transaction
          would constitute a “repricing.” Awards granted in addition
          to or in tandem with other Awards or awards may be granted either as
          of the same time as or a different time from the grant of such other
          Awards or awards. Subject to Sections 11(k) and (l), the Committee
          may determine that, in granting a new Award, the in-the-money value
          or fair value of any surrendered Award or award or the value of any
          other right to payment surrendered by the Participant may be applied
  to the purchase of any other Award. 

    (b)       Term
            of Awards. The term of each Award shall be for such period
            as may be determined by the Committee, subject to the express limitations
            set forth in Sections 6(b)(ii), 6(c)(ii) and 8 or elsewhere in the
    Plan. 

     (c)       Form
            and Timing of Payment under Awards; Deferrals. Subject to
            the terms of the Plan (including Sections 11(k) and (l)) and any
            applicable Award document, payments to be made by the Company or
            a subsidiary or affiliate upon the exercise of an Option or other
            Award or settlement of an Award may be made in such forms as the
            Committee shall determine, including, without limitation, cash, Stock,
            other Awards or other property, and may be made in a single payment
            or transfer, in installments, or on a deferred basis. The settlement
            of any Award may be accelerated, and cash paid in lieu of Stock in
            connection with such settlement, in the discretion of the Committee
            or upon occurrence of one or more specified events, subject to Sections
            11(k) and (l). Subject to Section 11(k), installment or deferred
            payments may be required by the Committee (subject to Section 11(e))
            or permitted at the election of the Participant on terms and conditions
            established by the Committee. Payments may include, without limitation,
            provisions for the payment or crediting of reasonable interest on
            installment or deferred payments or the grant or crediting of Dividend
            Equivalents or other amounts in respect of installment or deferred
            payments denominated in Stock. In the case of any 409A Award that
            is vested and no longer subject to a risk of forfeiture (within the
            meaning of Code Section 83), such Award will be distributed to the
            Participant, upon application of the Participant, if the Participant
            has had an unforeseeable emergency within the meaning of Code Sections
            409A(a)(2)(A)(vi) and 409A(a)(2)(B)(ii), in accordance with Section
    409A(a)(2)(B)(ii).

9.     Change in
Control.

(a)     Effect of “Change in
Control” on Non-Performance Based Awards.  In the event of a “Change in
Control,” the following provisions shall apply to non-performance based Awards, including
Awards as to which performance conditions previously have been satisfied or are deemed satisfied
under Section 9(b), unless otherwise provided by the Committee in the Award document:

	 	 	(i) 	
 All forfeiture conditions and other restrictions applicable to Awards granted under the Plan shall lapse and such Awards shall be fully payable as of the time of the Change in Control without regard to vesting or other conditions, except to the extent of any waiver by the Participant and subject to applicable restrictions set forth in Section 11(a); and

	 	 	 	 
	 	 	(ii)	
 Any Award carrying a right to exercise that was not previously exercisable and vested shall become fully exercisable and vested as of the time of the Change in Control and, upon any termination of employment or service by the Participant other than a termination for cause within two years after the Change in Control, shall remain outstanding and exercisable until the earlier of three years after such termination or the stated expiration date of such Award, subject only to applicable restrictions set forth in Section 11(a); and   

	 	 	 	 
	 	 	(iii)	 All deferral of settlement,
    forfeiture conditions and other restrictions applicable to an unvested Award
    granted under the Plan shall lapse and such Awards shall be fully payable
    as of the time of the Change in Control without regard to deferral and vesting
    conditions, except to the extent of

 

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	 	 	 	 any waiver by the Participant
        (if permitted under Section 409A) and subject to applicable restrictions
        set forth in Section 11(a); 

	 	 
	 	provided, however, that no distribution shall occur with respect to a 409A Award unless the Change in Control also constitutes a 409A Ownership/Control Change.

(b)     Effect of “Change in
Control” on Performance-Based Awards.  In the event of a “Change in
 Control,” with respect to an outstanding Award subject to achievement of performance
 goals and conditions, such performance goals and conditions shall be deemed to be met or
  exceeded if and to the extent so provided by the Committee in the Award document governing
   such Award or other agreement with the Participant.  Unless otherwise specified in such Award
   agreement, vesting and exercisability or settlement of such Award with regard to non-performance
    based terms will be as provided in Section 9(a). 

(c)     Definition of “Change in
Control.” “Change in Control” means the occurrence of any one of the
 following events after the date of grant of any affected Award: 

	 	 	(i) 	
 any person is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing thirty-five percent (35%) or more, excluding in the calculation of beneficial ownership securities acquired directly from the Company, of the combined voting power of the Company’s then outstanding voting securities;

	 	 	 	 
	 	 	 (ii) 	
 any Person is or becomes the beneficial owner, 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 voting securities;

	 	 	 	 
	 	 	(iii)	  the following individuals cease
    for any reason to constitute a majority of the number of directors of the
    Company then serving: individuals who, on the Effective Date, constitute
    the Board and any new director (other than a director whose initial assumption
    of office is in connection with an actual or threatened election contest,
    including but not limited to a consent solicitation, relating to the election
    of directors of the Company) whose appointment or election by the Board or
    nomination for election by the Company’s stockholders was approved or recommended
    by a vote of at least two-thirds (2/3) of the directors then still in office
    who either were directors on the Effective Date or whose appointment, election
    or nomination for
election was previously so approved or recommended;

	 	 	 	 
	 	 	 (iv) 	
 there is a consummated merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) more than fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving or parent entity’s equity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person, directly or indirectly, acquired twenty-five percent (25%) or
more of the combined voting power of the Company’s then outstanding securities (with any securities acquired by such Person directly from the Company or its subsidiaries or affiliates not being counted as part of such Person’s beneficially owned securities); or 

	 	 	 	 
	 	 	 (v) 	
 the stockholders of the Company approve a plan of complete liquidation of the Company and there remains no material contingency to implementation of such plan or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

(d)      Definition
        of “409A Ownership/Control Change.” A “409A Ownership/Control
        Change” shall be deemed to have occurred if a Change in Control
        occurs which involves transactions which constitute a change in the ownership
        or effective control of the Company, or in the ownership of a substantial
        portion of the assets of the Company, within the meaning of Code Section
409A(a)(2)(A)(v). 

   

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     10.        Additional Award Forfeiture Provisions.  

	 	 
	 	     The Committee may condition a Participant’s right to receive a grant of an Award, to exercise the Award, to retain cash, Stock, other Awards, or other property acquired in connection with an Award, or to retain the profit or gain realized by a Participant in connection with an Award, including cash or other proceeds received upon sale of Stock acquired in connection with an Award, upon compliance by the Participant with specified conditions relating to non-competition, confidentiality of information relating to or possessed by the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation, non-disparagement of the Company and its subsidiaries and affiliates and
the officers, directors and affiliates of the Company and its subsidiaries and affiliates, and other restrictions upon or covenants of the Participant, including during specified periods following termination of employment or service to the Company. 

	 	 
	 	
     11.        General Provisions.  

	 	 
	 	
     (a)       Compliance with Legal and Other Requirements.  The Company may, to the extent deemed necessary or advisable by the Committee and subject to Section 11(k), postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.  The foregoing notwithstanding, in connection with a Change in Control, the Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other
condition would represent a greater burden on a Participant than existed on the 90th day preceding the Change in Control.  

	 	 
	 	
     (b)       Limits on Transferability; Beneficiaries.  No Award or other right or interest of a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party (other than the Company or a subsidiary or affiliate thereof), or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights
(other than ISOs and SARs in tandem therewith) may be transferred to one or more transferees during the lifetime of the Participant for purposes of estate-planning, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee and the Committee has determined that there will be no transfer of the Award to a third party for value, and subject to any terms and conditions which the Committee may impose thereon (which may include limitations the Committee may deem appropriate in order that offers and sales under the Plan will meet applicable requirements of registration forms under the Securities Act of 1933 specified by the Securities and Exchange Commission).  A Beneficiary, transferee, or
other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award document applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee. 

	 	 
	 	
     (c)       Adjustments.
In the event that any large, special and non-recurring dividend or other distribution
(whether in the form of cash or property other than Stock), recapitalization,
forward or reverse split, Stock dividend, reorganization, merger, consolidation,
spin-off, combination, repurchase, share exchange, liquidation, dissolution or
other similar corporate transaction or event affects the Stock such that an adjustment
is determined by the Committee to be appropriate or, in the case of any outstanding
Award, which is necessary in order to prevent dilution or enlargement of the
rights of the Participant, then the Committee shall, in an equitable manner as
determined by the Committee, adjust any or all of (i) the number and kind of
shares of Stock which may be delivered in connection with Awards granted thereafter,
including the number of shares available under Section 4, (ii) the number and
kind of shares of Stock by which annual per-person Award limitations are measured
under

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	 	 Section 5, (iii) the number
        and kind of shares of Stock subject to or deliverable in respect of outstanding
        Awards and (iv) the exercise price, grant price or purchase price relating
        to any Award or, if deemed appropriate, the Committee may make provision
        for a payment of cash or property to the holder of an outstanding Option
        (subject to Section 11(l)). In addition, the Committee is authorized
        to make adjustments in the terms and conditions of, and the criteria
        included in, Awards (including Performance Awards and perfor­mance
        goals and any hypothetical funding pool relating thereto) in recognition
        of unusual or nonrecurring events (including, without limitation, events
        described in the preceding sentence, as well as acquisitions and dispositions
        of businesses and assets) affecting the Company, any sub­sid­iary
        or affiliate or other business unit, or the financial statements of the
        Company or any subsidiary or affiliate, or in response to changes in
        applicable laws, regulations, accounting principles, tax rates and regulations
        or business conditions or in view of the Committee’s assessment of the
        business strategy of the Company, any subsidiary or affiliate or business
        unit thereof, performance of comparable organizations, economic and business
        conditions, personal performance of a Participant, and any other circumstances
        deemed relevant; provided that no such adjustment shall be authorized
        or made if and to the extent that the existence of such authority (i)
        would cause Options, SARs, or Performance Awards granted under the Plan
        to Participants designated by the Committee as Covered Employees and
        intended to qualify as “performance-based compensation” under
        Code Section 162(m) and regulations thereunder to otherwise fail to qualify
        as “performance-based compensation” under Code Section 162(m)
        and regulations thereunder, or (ii) would cause the Committee to be deemed
        to have authority to change the targets, within the meaning of Treasury
        Regulation 1.162-27(e)(4)(vi), under the performance goals relating to
        Options or SARs granted to Covered Employees and intended to qualify
        as “performance-based compensation” under Code Section 162(m)
        and regulations thereunder. 

	 	 
	 	 	(d)	
Tax Provisions.  

	 	 	 	 
	 	 	(i) 	
 Withholding.  The Company and any subsidiary or affiliate is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award.  This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s withholding
obligations, either on a mandatory or elective basis in the discretion of the Committee, or in satisfaction of other tax obligations.  Other provisions of the Plan notwithstanding, only the minimum amount of Stock deliverable in connection with an Award necessary to satisfy statutory withholding requirements will be withheld, unless withholding of any additional amount of Stock will not result in additional accounting expense to the Company. 

	 	 	 	 
	 	 	(ii) 	
 Required Consent to and Notification of Code Section 83(b) Election.  No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award document or by action of the Committee in writing prior to the making of such election.  In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification
required pursuant to regulations issued under Code Section 83(b) or other applicable provision.  

	 	 	 	 
	 	 	(iii) 	
 Requirement of Notification Upon Disqualifying Disposition Under Code Section 421(b).  If any Participant shall make any disposition of shares of Stock delivered pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (i.e., a disqualifying disposition), such Participant shall notify the Company of such disposition within ten days thereof.  

     (e)       Changes
            to the Plan. The Board may amend, suspend or terminate the
            Plan or the Committee’s authority to grant Awards under the Plan
            without the consent of stockholders or Participants; provided, however,
            that any amendment to the Plan shall be submitted to the Company’s
            stockholders for approval not later than the earliest annual meeting
            for which the record date is at or after the date of such Board action
            if such stockholder approval is required by any federal or state
            law or regulation or Nasdaq Marketplace Rules or any other stock
            

 

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    exchange or automated quotation system on which the Stock may then
            be listed or quoted, or if such amendment would materially increase
            the number of shares reserved for issuance and delivery under the
            Plan, and the Board may otherwise, in its discretion, determine to
            submit other amendments to the Plan to stockholders for approval.
            The Committee is authorized to amend outstanding awards, except as
            limited by the Plan. The Board and Committee may not amend outstanding
            Awards (including by means of an amendment to the Plan) without the
            consent of an affected Participant if such an amendment would materially
            and adversely affect the rights of such Participant with respect
            to the outstanding Award (for this purpose, actions that alter the
            timing of federal income taxation of a Participant will not be deemed
            material unless such action results in an income tax penalty on the
            Participant, and any discretion that is reserved by the Board or
            Committee with respect to an Award is unaffected by this provision).
            Without the approval of stockholders, the Committee will not amend
            or replace previously granted Options or SARs in a transaction that
            constitutes a “repricing,” which for this purpose means
            any of the following or any other action that has the same effect:

			
•	
Lowering the exercise price of an option or SAR after it is granted; 

			 	 
			
•	
Any other action that is treated as a repricing under generally accepted accounting principles;

			 	 
			
•	
Canceling an option or SAR at a time when its exercise price exceeds the fair market value of the underlying Stock, in exchange for another option or SAR, restricted stock, or other equity;

provided, however, that the foregoing transactions shall
not be deemed a repricing if pursuant to an adjustment authorized under Section 11(c).  With regard
to other terms of Awards, the Committee shall have no authority to waive or modify any such Award
term after the Award has been granted to the extent the waived or modified term would be mandatory
 under the Plan for any Award newly granted at the date of the waiver or modification.

(f)       Right of Setoff.  The Company or any subsidiary or affiliate may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or a subsidiary or affiliate may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, including but not limited to amounts owed under Section 10(a), although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff.  By accepting any Award granted hereunder,
the Participant agrees to any deduction or setoff under this Section 11(f).

(g)      Unfunded Status of Awards; Creation of Trusts.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan.  Such trusts or other arrangements shall be consistent with the
“unfunded” status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant.

(h)      Nonexclusivity of the
Plan.  Neither the adoption of the Plan by the Board nor its submission to the stockholders
of the Company for approval shall be construed as creating any limitations on the power of the Board
or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may
deem desirable, including incentive arrangements and awards which do not qualify under Code
 Section 162(m), and such other arrangements may be either applicable generally or only in
 specific cases.

(i)     Payments in the Event of Forfeitures;
 Fractional Shares.  Unless otherwise determined by the Committee, in the event of a
 forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant
 shall be repaid the amount of such cash consideration.  No fractional shares of Stock shall be
  issued or delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash,
   other Awards or other property shall be issued or paid in lieu of such fractional shares or
    whether such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated. 

(j)      Compliance
with Code
Section 162(m).  It is the intent of the Company that Options and SARs
granted to Covered Employees and other Awards designated as Awards to Covered
Employees subject to Section 7

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  shall constitute qualified “performance-based
      compensation” within the meaning of Code Section 162(m) and regulations
      thereunder, unless otherwise determined by the Committee at the time of
      allocation of an Award. Accordingly, the terms of Sections 7(b), (c), and
      (d), including the definitions of Covered Employee and other terms used
      therein, shall be interpreted in a manner consistent with Code Section
      162(m) and regulations thereunder. The foregoing notwithstanding, because
      the Committee cannot determine with certainty whether a given Participant
      will be a Covered Employee with respect to a fiscal year that has not yet
      been completed, the term Covered Employee as used herein shall mean only
      a person designated by the Committee as likely to be a Covered Employee
      with respect to a specified fiscal year. If any provision of the Plan or
      any Award document relating to a Performance Award that is designated as
      intended to comply with Code Section 162(m) does not comply or is inconsistent
      with the requirements of Code Section 162(m) or regulations thereunder,
      such provision shall be construed or deemed amended to the extent necessary
      to conform to such requirements, and no provision shall be deemed to confer
      upon the Committee or any other person discretion to increase the amount
      of compensation otherwise payable in connection with any such Award upon
      attainment of the applicable performance objectives.

(k)     Certain Limitations
on Awards to Ensure Compliance with Section 409A. For
purposes of the Plan, references to an Award term or event (including any authority
or right of the Company or a Participant) being “permitted” under
Section 409A mean, for a 409A Award, that the term or event will not cause the
Participant to be deemed to be in constructive receipt of compensation relating
to the Award prior to the distribution of Stock, cash or other property or to
be liable for payment of interest or a tax penalty under Section 409A and, for
a Non-409A Award, that the term or event will not cause the Award to be treated
as subject to Section 409A. Other provisions of the Plan notwithstanding, the
terms of any 409A Award and any Non-409A Award, including any authority of the
Company and rights of the Participant with respect to the Award, shall be limited
to those terms permitted under Section 409A, and any terms not permitted under
Section 409A shall be automatically modified and limited to the extent necessary
to conform with Section 409A. For this purpose, other provisions of the Plan
notwithstanding, the Company shall have no authority to accelerate distributions
relating to 409A Awards in excess of the authority permitted under Section 409A,
any distribution subject to Section 409A(a)(2)(A)(i) upon separation from service
of a “Specified Employee” (or “key employee”) as defined
under Section 409A(a)(2)(B)(i) shall not occur earlier than the earliest time
permitted under Section 409A(a)(2)(B)(i), any
 distribution triggered by a Participant’s termination of employment and
 intended to  qualify under Section 409A(a)(2)(A)(i) shall be made only at or
 following such time as the
  Participant has had a “separation from service” within the meaning
  of  Section 409A(a)(2)(A)(i), and any authorization of payment of cash to settle
  a
  Non-409A Award shall apply only to the extent permitted under Section 409A
  for such Award.

(l)     Governing Law.  The validity,
construction, and effect of the Plan, any rules and regulations relating to the Plan and any Award
document shall be determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable provisions of federal law.

(m)     Awards to
Participants Outside the United States.  The Committee may modify the
terms of any Award under the Plan made to or held by a Participant who is then
resident or primarily employed outside of the United States, or establish one
or more sub-plans for such participants, in any manner deemed by the Committee
to be necessary or appropriate in order that such Award shall conform to laws,
regulations, and customs of the country in which the Participant is then resident
or primarily employed, or so that the value and other benefits of the Award to
the Participant, as affected by foreign tax laws and other restrictions applicable
as a result of the Participant’s residence or
employment abroad shall be comparable to the value of such an Award to a Participant
who is resident or  primarily employed in the United States. An Award may be
modified under this Section 11(m) in a manner
 that is inconsistent with the express terms of the Plan, so long as such modifications
will not contravene any applicable law or regulation or result in actual liability
under Section 16(b) for
  the Participant whose Award is modified.

  (n)      Limitation
  on Rights Conferred under Plan. Neither the Plan nor any action taken
  hereunder shall be construed as (i) giving any Eligible Person or Participant
  the right to continue as an Eligible Person or Participant or in the employ
  or service of the Company or a subsidiary or affiliate, (ii) interfering in
  any way with the right of the Company or a subsidiary or affiliate to terminate
  any Eligible Person’s or Participant’s employment or service at any time (subject
  to the terms and provisions of any separate written agreements), (iii) giving
  an Eligible Person or Participant any claim to be granted any Award under the
  Plan or to be treated uniformly with other Participants and employees, or (iv)
  conferring on a Participant any of the rights of a stockholder of the Company
  unless and until the Participant is duly issued or transferred shares of Stock
  in accordance with the terms of an Award or an Option is duly exercised. Except
  as expressly provided in the Plan and an Award document, 

  15

 
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neither the Plan
        nor any Award document shall confer on any person other than the Company
        and the Participant any rights or remedies thereunder. Any Award shall
        not be deemed compensation for purposes of computing benefits under any
        retirement plan of the Company or any subsidiary or affiliate and shall
        not affect any benefits under any other benefit plan at any time in effect
        under which the availability or amount of benefits is related to the
    level of compensation (unless required by any such other plan or arrangement
with specific reference to Awards under this Plan).

(o)     Severability; Entire Agreement.  If any of the provisions of this Plan or any Award document is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby; provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to
make such provision enforceable hereunder.  The Plan and any Award documents contain the entire
agreement of the parties with respect to the subject matter thereof and supersede all prior agreements,
promises, covenants, arrangements, communications, representations and warranties between them,
whether written or oral with respect to the subject matter thereof.  No rule of strict construction
 shall be applied against the Company, the Committee, or any other person in the interpretation of
  any terms of the Plan, Award, or agreement or other document relating thereto.

(p)     Plan Effective
Date and
Termination.  The Plan shall become effective if, and at such time as,
the stockholders of the Company have approved it by the affirmative votes of
the holders of a majority of the voting
 securities of the Company present, or represented, and entitled to vote on the
subject matter at a  duly held meeting of stockholders, which shall be the Effective
Date. Upon such approval of the Plan by the stockholders of the Company, no further
awards shall be granted under the 1999 Stock Incentive Plan and awards will be
limited to non-U.S. residents under the 2004 Stock Incentive Plan, but any outstanding
awards under those plans shall continue in accordance with their
terms.  Unless earlier terminated by action of the Board of Directors, the authority
of the Committee to make grants under the Plan shall terminate on the date that
is ten years after the latest date
  upon which stockholders of the Company have approved the Plan, and the Plan
will remain in effect until such time as no Stock remains available for delivery
under the Plan and the Company has
   no further rights or obligations under the Plan with respect to outstanding
Awards under  the Plan. 

16Untitled Page

		

		

		

		EXHIBIT 10.4

				

				

			
		
			PROMISSORY NOTE

						

					

		

		
			$122,409 U.S.

					

				FOR VALUE RECEIVED, JAKE’S TRUCKING INTERNATIONAL, INC. (the “Borrower”), unconditionally promises to pay to the order of MICAHEL QUESNEL, (the “Lender”) the sum of $122,409 in United States of America funds, together with interest at the rate of 0% per annum on the principal amount remaining unpaid, after as well as before demand or maturity or default, calculated on an annual basis (on the basis of a year of 365 days for the actual number of days elapsed) and payable on demand; PROVIDED that if the Borrower fails to pay on demand any payment of principal or interest on this note, then in such event the entire unpaid principal and all accrued and unpaid interest thereon shall become and be forthwith due and payable without presentment, notice, protest or demand of any kind (all of which are hereby expressly waived by the Borrower).

				

				The Borrower hereby agrees that the proper law of this instrument is the law of the state of Nevada and that this instrument shall be governed by and construed in accordance with the laws thereof and the undersigned agrees that any legal suit, action or proceeding brought upon or arising out of or relating to this instrument may be instituted in the courts of such State and the undersigned hereby accepts and irrevocably submits and attorns to the exclusive jurisdiction of the said courts and acknowledges their competence and agrees to be bound by any judgment thereof, provided that nothing herein shall limit the right of the Lender to bring proceedings against the Borrower elsewhere.

				

				This Promissory Note is dated the 10th day of August, 2006.

				

				

				

				                                                                                                      JAKE’S TRUCKING INTERNATIONAL, INC. 

					

					

					                                                                                                      By:       /s/ Michael Quesnel

				                                                                                                                  President/Director

				

				                                                                                                      By:       /s/ Michael Quesnel

				                                                                                                                  Lender

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