Document:

exhibit10_1.htm

    
      EXHIBIT
10.1

       

      ANIMAL
HEALTH INTERNATIONAL, INC.

       

      2007 STOCK OPTION AND INCENTIVE PLAN

       

      
        	
                SECTION
      1.  

              	
                GENERAL PURPOSE OF THE
      PLAN; DEFINITIONS

              

      

       

      The name
of the plan is the Animal Health International, Inc. 2007 Stock Option and
Incentive Plan (the “Plan”).  The purpose of the Plan is to encourage
and enable the officers, employees, Non-Employee Directors and other key persons
(including consultants and prospective employees) of Animal Health
International, Inc. (the “Company”) and its Subsidiaries upon whose judgment,
initiative and efforts the Company largely depends for the successful conduct of
its business to acquire a proprietary interest in the Company.  It is
anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of the
Company and its stockholders, thereby stimulating their efforts on the Company’s
behalf and strengthening their desire to remain with the Company.

       

      The
following terms shall be defined as set forth below:

       

      “Act” means the Securities
Act of 1933, as amended, and the rules and regulations thereunder.

       

      “Administrator” is defined in
Section 2(a).

       

      “Award” or “Awards,” except where
referring to a particular category of grant under the Plan, shall include
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock Awards,
Cash-based Awards, Performance Share Awards and Dividend Equivalent
Rights.

       

      “Award Agreement” means a
written or electronic agreement setting forth the terms and provisions
applicable to an Award granted under the Plan.  Each Award Agreement
is subject to the terms and conditions of the Plan.

       

      “Board” means the Board of
Directors of the Company.

       

      “Cash-based Award” means an
Award entitling the recipient to receive a cash-denominated
payment.

       

      “Code” means the Internal
Revenue Code of 1986, as amended, and any successor Code, and related rules,
regulations and interpretations.

       

      “Committee” means the
compensation committee of the Board or a similar committee performing the
functions of the compensation committee and which is comprised of not less than
two Non-Employee Directors who are independent.

       

      “Covered Employee” means an
employee who is a “Covered Employee” within the meaning of Section 162(m)
of the Code.

       

      “Deferred Stock Award” means
an Award of phantom stock units to a grantee.

       

      “Dividend Equivalent Right”
means an Award entitling the grantee to receive credits based on cash dividends
that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such shares had been
issued to and held by the grantee.

       

      “Effective Date” means the
date on which the Plan is approved by stockholders as set forth in
Section 21.

       

      “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

       

      
        
          1

        

      

      
         

        “Fair Market Value” of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Administrator; provided,
however, that if the Stock is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global
Market or a national securities exchange, the determination shall be made by
reference to market quotations.  If there are no market quotations for
such date, the determination shall be made by reference to the last date
preceding such date for which there are market quotations; provided further,
however, that if the date for which Fair Market Value is determined is the first
day when trading prices for the Stock are reported on NASDAQ or on a national
securities exchange, the Fair Market Value shall be the “Price to the Public”
(or equivalent) set forth on the cover page for the final prospectus relating to
the Company’s Initial Public Offering.

         

      

      “Incentive Stock Option”
means any Stock Option designated and qualified as an “incentive stock option”
as defined in Section 422 of the Code.

       

      “Initial Public Offering”
means the consummation of the first fully underwritten, firm commitment public
offering pursuant to an effective registration statement under the Act covering
the offer and sale by the Company of its equity securities, or such other event
as a result of or following which the Stock shall be publicly held.

       

      “Non-Employee Director” means
a member of the Board who is not also an employee of the Company or any
Subsidiary.

       

      “Non-Qualified Stock Option”
means any Stock Option that is not an Incentive Stock Option.

       

      “Option” or “Stock Option” means any
option to purchase shares of Stock granted pursuant to
Section 5.

       

      “Performance-based Award”
means any Restricted Stock Award, Deferred Stock Award or Cash-based Award
granted to a Covered Employee that is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code and the regulations promulgated
thereunder.

       

      “Performance Criteria” means
the criteria that the Administrator selects for purposes of establishing the
Performance Goal or Performance Goals for an individual for a Performance
Cycle.  The Performance Criteria (which shall be applicable to the
organizational level specified by the Administrator, including, but not limited
to, the Company or a unit, division, group, or Subsidiary of the Company) that
will be used to establish Performance Goals are limited to the following:
earnings before interest, taxes, depreciation and amortization, net income
(loss) (either before or after interest, taxes, depreciation and/or
amortization), changes in the market price of the Stock, economic value-added,
funds from operations or similar measure, sales or revenue, acquisitions or
strategic transactions, operating income (loss), cash flow (including, but not
limited to, operating cash flow and free cash flow), return on capital, assets,
equity, or investment, stockholder returns, return on sales, gross or net profit
levels, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings (loss) per share of Stock, sales or
market shares and number of customers, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group.

       

      “Performance Cycle” means one
or more periods of time, which may be of varying and overlapping durations, as
the Administrator may select, over which the attainment of one or more
Performance Criteria will be measured for the purpose of determining a grantee’s
right to and the payment of a Restricted Stock Award, Deferred Stock Award or
Cash-based Award.

       

      “Performance Goals” means,
for a Performance Cycle, the specific goals established in writing by the
Administrator for a Performance Cycle based upon the Performance
Criteria.

       

      “Performance Shares” means an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified Performance Goals.

       

      “Restricted Stock Award”
means an Award entitling the recipient to acquire, at such purchase price (which
may be zero) as determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of
grant.

       

      “Sale Event” shall mean
(i) the sale of all or substantially all of the assets of the Company on a
consolidated basis to an unrelated person or entity, (ii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for securities of the successor entity and the
holders of the Company’s outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (iii) the
sale of all of the Stock of the Company to an unrelated person or
entity.

      
        
          
          

        

        
          2

        

      

      
         

        “Sale Price” means the value as determined by the Administrator of
the consideration payable, or otherwise to be received by stockholders, per
share of Stock pursuant to a Sale Event.

         

        “Section 409A” means Section 409A of the Code and the regulations
and other guidance promulgated thereunder.

         

        “Stock” means the Common Stock, par value $0.01 per share, of
the Company, subject to adjustments pursuant to
Section 3.

         

      

      “Stock Appreciation Right”
means an Award entitling the recipient to receive shares of Stock having a value
equal to the excess of the Fair Market Value of the Stock on the date of
exercise over the exercise price of the Stock Appreciation Right multiplied by
the number of shares of Stock with respect to which the Stock Appreciation Right
shall have been exercised.

       

      “Subsidiary” means any
corporation or other entity (other than the Company) in which the Company has at
least a 50 percent interest, either directly or indirectly.

       

      “Ten Percent Owner” means an
employee who owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10 percent of the combined voting power of
all classes of stock of the Company or any parent or subsidiary
corporation.

       

      “Unrestricted Stock Award”
means an Award of shares of Stock free of any restrictions.

       

      
        	
                SECTION
      2.  

              	
                ADMINISTRATION OF
      PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE
      AWARDS

              

      

       

      (a) Administrator.  The
Plan shall be administered by either the Board or the Committee (the
“Administrator”).

       

      (b) Powers of
Administrator.  The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

       

      (i) to select
the individuals to whom Awards may from time to time be granted;

       

      (ii) to
determine the time or times of grant, and the extent, if any, of Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards, Cash-based
Awards, Performance Share Awards and Dividend Equivalent Rights, or any
combination of the foregoing, granted to any one or more grantees;

       

      (iii) to
determine the number of shares of Stock to be covered by any Award;

       

      (iv) to
determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which
terms and conditions may differ among individual Awards and grantees, and to
approve the form of written instruments evidencing the Awards;

       

      (v) to
accelerate at any time the exercisability or vesting of all or any portion of
any Award;

       

      (vi) subject
to the provisions of Section 5(a)(ii), to extend at any time the period in
which Stock Options may be exercised; and

       

      (vii) at any
time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall deem
advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.

       

      All
decisions and interpretations of the Administrator shall be binding on all
persons, including the Company and Plan grantees.

       

      
        
          3

        

      

      
              (c) Delegation of Authority to
Grant Options.  Subject to applicable law, the Administrator,
in its discretion, may delegate to the Chief Executive Officer of the Company
all or part of the Administrator’s authority and duties with respect to the
granting of Options, to individuals who are (i) not subject to the reporting and
other provisions of Section 16 of the Exchange Act and (ii) not Covered
Employees.  Any such delegation by the Administrator shall include a
limitation as to the amount of Options that may be granted during the period of
the delegation and shall contain guidelines as to the determination of the
exercise price and the vesting criteria.  The Chief Executive Officer
shall periodically report to the Administrator all grants made by him or her
through such delegation of authority.  The Administrator may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Administrator’s delegate or delegates that were
consistent with the terms of the Plan.

         

      

      (d) 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, without limitation, the term of an Award, the provisions
applicable in the event employment or service terminates, and the Company’s
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.

       

      (e) Indemnification.  Neither
the Board nor the Administrator, nor any member of either or any delegate
thereof, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with the Plan, and the members of
the Board and the Administrator (and any delegate thereof) shall be entitled in
all cases to indemnification and reimbursement by the Company in respect of any
claim, loss, damage or expense (including, without limitation, reasonable
attorneys’ fees) arising or resulting therefrom to the fullest extent permitted
by law and/or under the Company’s articles or bylaws or any directors’ and
officers’ liability insurance coverage which may be in effect from time to time
and/or any indemnification agreement between such individual and the
Company.

       

      (f) Foreign Award
Recipients.  Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Administrator, in its sole discretion, shall have the
power and authority to: (i) determine which Subsidiaries shall be covered by the
Plan; (ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise procedures and other
terms and procedures, to the extent the Administrator determines such actions to
be necessary or advisable (and such subplans and/or modifications shall be
attached to this Plan as appendices); provided, however, that no such subplans
and/or modifications shall increase the share limitations contained in Section
3(a) hereof; and (v) take any action, before or after an Award is made, that
the Administrator determines to be necessary or advisable to obtain approval or
comply with any local governmental regulatory exemptions or
approvals.  Notwithstanding the foregoing, the Administrator may not
take any actions hereunder, and no Awards shall be granted, that would violate
the Exchange Act or any other applicable United States securities law, the Code,
or any other applicable United States governing statute or law.

       

      
        	
                SECTION
      3.  

              	
                STOCK ISSUABLE UNDER
      THE PLAN; MERGERS;
SUBSTITUTION

              

      

       

      (a) Stock
Issuable.  The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 3,600,000 shares, subject to
adjustment as provided in Section 3(b).  For purposes of this
limitation, the shares of Stock underlying any Awards that are forfeited,
canceled, held back upon exercise of an Option or settlement of an Award to
cover the exercise price or tax withholding, reacquired by the Company prior to
vesting, satisfied without the issuance of Stock or otherwise terminated (other
than by exercise) shall be added back to the shares of Stock available for
issuance under the Plan.  Subject to such overall limitations, shares
of Stock may be issued up to such maximum number pursuant to any type or types
of Award; provided, however, that Stock Options or Stock Appreciation Rights
with respect to no more than 1,000,000 shares of Stock may be granted to any one
individual grantee during any one calendar year period.  The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.

       

      (b) Changes in
Stock.  Subject to Section 3(c) hereof, if, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company’s capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for securities
of the Company or any successor entity (or a parent or subsidiary thereof), the
Administrator shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or Stock Appreciation Rights that can be granted to any one
individual grantee and the maximum number of shares that  

       

      
        4

      

      may be
granted under a Performance-based Award, (iii) the number and kind of shares or
other securities subject to any then outstanding Awards under the Plan, (iv) the
repurchase price, if any, per share subject to each outstanding Restricted Stock
Award, and (v) the price for each share subject to any then outstanding Stock
Options and Stock Appreciation Rights under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options and Stock Appreciation Rights) as to which such Stock Options and
Stock Appreciation Rights remain exercisable.  The Administrator shall
also make equitable or proportionate adjustments in the number of shares subject
to outstanding Awards and the exercise price and the terms of outstanding Awards
to take into consideration cash dividends paid other than in the ordinary course
or any other extraordinary corporate event to the extent determined to be
necessary by the Administrator to avoid distortion in the operation of the
Plan.  Notwithstanding the foregoing, no adjustment shall be made
under this Section 3(b) if the Administrator determines that such action could
cause any Award to fail to satisfy the conditions of any applicable exception
from the requirements of Section 409A or otherwise could subject the grantee to
the additional tax imposed under Section 409A in respect of an outstanding Award
or constitute a modification, extension or renewal of an Incentive Stock Option
within the meaning of Section 424(h) of the Code.  The adjustment
by the Administrator shall be final, binding and conclusive.  No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash payment
in lieu of fractional shares.

       

      (c) Sale
Event.  Upon the effective time of the Sale Event, the Plan and
all outstanding Awards granted hereunder shall terminate, unless provision is
made in connection with the Sale Event in the sole discretion of the parties
thereto for the assumption or continuation of Awards theretofore granted by the
successor entity (which entity must have securities that are listed on a
national securities exchange or quoted on a national quotation system), or the
substitution of such Awards with new Awards of the successor entity or parent
thereof (which entity must have securities that are listed on a national
securities exchange or quoted on a national quotation system), with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per
share exercise prices, as such parties shall agree (after taking into account
any acceleration hereunder).  The
parties to any such Sale Event may also provide that certain outstanding Awards
will be converted into a right to receive the consideration payable to the
holders of Stock in the Sale Event
(net of any applicable exercise price), subject to the remaining vesting
provisions relating to such Awards.  In the event the Plan and all
outstanding Awards terminate in connection with a Sale Event, all Options and
Stock Appreciation Rights that are not exercisable immediately prior to the
effective time of the Sale Event shall become fully exercisable as of the
effective time of the Sale Event and all other Awards shall become fully vested
and nonforfeitable as of the effective time of the Sale Event, except as the
Administrator may otherwise specify with respect to particular Awards in the
relevant Award documentation, and Awards with conditions and restrictions
relating to the attainment of performance goals may become vested and
nonforfeitable in connection with a Sale Event in the Administrator’s
discretion.  In the event of such termination, each grantee shall be
permitted, within a specified period of time prior to the consummation of the
Sale Event as determined by the Administrator, to exercise all outstanding
Options and Stock Appreciation Rights held by such grantee, including those that
will become exercisable upon the consummation of the Sale Event; provided,
however, that the exercise of Options and Stock Appreciation Rights not
exercisable prior to the Sale Event shall be subject to the consummation of the
Sale Event.

       

      Notwithstanding
anything to the contrary in this Section 3(c), in the event of a Sale Event
pursuant to which holders of the Stock of the Company will receive upon
consummation thereof a cash payment for each share surrendered in the Sale
Event, the Company shall have the right, but not the obligation, to make or
provide for a cash payment to the grantees holding Options and Stock
Appreciation Rights, in exchange for the cancellation thereof, in an amount
equal to the difference between (A) the Sale Price times the number of shares of
Stock subject to outstanding Options and Stock Appreciation Rights (to the
extent then exercisable at prices not in excess of the Sale Price) and (B) the
aggregate exercise price of all such outstanding Options and Stock Appreciation
Rights.

       

      (d) Substitute
Awards.  The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation.  The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances.  Any substitute Awards
granted under the Plan shall not count against the share limitation set forth in
Section 3(a).

       

      
        	
                SECTION
      4.  

              	
                ELIGIBILITY

              

      

       

      Grantees
under the Plan will be such full or part-time officers and other employees,
Non-Employee Directors and key persons (including consultants and prospective
employees) of the Company and its Subsidiaries as are selected from time to time
by the Administrator in its sole discretion.

      
         

        
          5

        

      

      
        
          	
                  SECTION
      5.  

                	
                  STOCK
      OPTIONS

                

        

         

        Any Stock
Option granted under the Plan shall be in such form as the Administrator may
from time to time approve.

         

        Stock
Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options.  Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a “subsidiary
corporation” within the meaning of Section 424(f) of the
Code.  To the extent that any Option does not qualify as an Incentive
Stock Option, it shall be deemed a Non-Qualified Stock Option.

         

        Stock
Options granted pursuant to this Section 5 shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Administrator
shall deem desirable.  If the Administrator so determines, Stock
Options may be granted in lieu of cash compensation at the optionee’s election,
subject to such terms and conditions as the Administrator may
establish.

         

      

      (a) Exercise
Price.  The exercise price per share for the Stock covered by a
Stock Option granted pursuant to this Section 5(a) shall be determined by
the Administrator at the time of grant but shall not be less than 100 percent of
the Fair Market Value on the date of grant.  In the case of an
Incentive Stock Option that is granted to a Ten Percent Owner, the option price
of such Incentive Stock Option shall be not less than 110 percent of the Fair
Market Value on the grant date.

       

      (b) Option
Term.  The term of each Stock Option shall be fixed by the
Administrator, but no Stock Option shall be exercisable more than ten years
after the date the Stock Option is granted.  In the case of an
Incentive Stock Option that is granted to a Ten Percent Owner, the term of such
Stock Option shall be no more than five years from the date of
grant.

       

      (c) Exercisability; Rights of a
Stockholder.  Stock Options shall become exercisable at such
time or times, whether or not in installments, as shall be determined by the
Administrator at or after the grant date.  The Administrator may at
any time accelerate the exercisability of all or any portion of any Stock
Option.  An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to unexercised
Stock Options.

       

      (d) Method of
Exercise.  Stock Options may be exercised in whole or in part,
by giving written notice of exercise to the Company, specifying the number of
shares to be purchased.  Payment of the purchase price may be made by
one or more of the following methods to the extent provided in the Option Award
Agreement:

       

      (i) In cash,
by certified or bank check or other instrument acceptable to the
Administrator;

       

      (ii) Through
the delivery (or attestation to the ownership) of shares of Stock that have been
purchased by the optionee on the open market or that are beneficially owned by
the optionee and are not then subject to restrictions under any Company
plan.  Such surrendered shares shall be valued at Fair Market Value on
the exercise date.  To the extent required to avoid variable
accounting treatment under FAS 123R or other applicable accounting rules, such
surrendered shares shall have been owned by the optionee for at least six
months; or

       

      (iii) By the
optionee delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company for the purchase price;
provided that in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment
procedure.

       

      Payment
instruments will be received subject to collection.  The transfer to
the optionee on the records of the Company or of the transfer agent of the
shares of Stock to be purchased pursuant to the exercise of a Stock Option will
be contingent upon receipt from the optionee (or a purchaser acting in his stead
in accordance with the provisions of the Stock Option) by the Company of the
full purchase price for such shares and the fulfillment of any other
requirements contained in the Option Award Agreement or applicable provisions of
laws (including the satisfaction of any withholding taxes that the Company is
obligated to withhold with respect to the optionee).  In the event an
optionee chooses to pay the purchase price by previously-owned shares of Stock
through the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
shares attested to.  In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
exercise of Stock Options, such as a system using an internet website or
interactive voice response, then the paperless exercise of Stock Options may be
permitted through the use of such an automated system.

       

      
        
          6

        

        
          
             

            (e) Annual Limit on Incentive
Stock Options.  To the extent required for “incentive stock
option” treatment under Section 422 of the Code, the aggregate Fair Market
Value (determined as of the time of grant) of the shares of Stock with respect
to which Incentive Stock Options granted under this Plan and any other plan of
the Company or its parent and subsidiary corporations become exercisable for the
first time by an optionee during any calendar year shall not exceed
$100,000.  To the extent that any Stock Option exceeds this limit, it
shall constitute a Non-Qualified Stock Option.

             

          

          
            	
                    SECTION
      6.  

                  	
                    STOCK APPRECIATION
      RIGHTS

                  

          

           

          (a) Exercise Price of Stock
Appreciation Rights.  The exercise price of a Stock
Appreciation Right shall not be less than 100 percent of the Fair Market Value
of the Stock on the date of grant (or more than the Stock Option exercise price
per share, if the Stock Appreciation Right was granted in tandem with a Stock
Option).

           

          (b) Grant and Exercise of Stock
Appreciation Rights.  Stock Appreciation Rights may be granted
by the Administrator in tandem with, or independently of, any Stock Option
granted pursuant to Section 5 of the Plan.  In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option.  In the case of a Stock Appreciation Right
granted in tandem with an Incentive Stock Option, such Stock Appreciation Right
may be granted only at the time of the grant of the Option.

           

        

            A Stock
Appreciation Right or applicable portion thereof granted in tandem with a Stock
Option shall terminate and no longer be exercisable upon the termination or
exercise of the related Option.

      

       

      (c) Terms and Conditions of
Stock Appreciation Rights.  Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined from time to time by
the Administrator, subject to the following:

       

      (i) Stock
Appreciation Rights granted in tandem with Options shall be exercisable at such
time or times and to the extent that the related Stock Options shall be
exercisable.

       

      (ii) Upon
exercise of a Stock Appreciation Right, the applicable portion of any related
Option shall be surrendered.

       

      
        	
                SECTION
      7.  

              	
                RESTRICTED STOCK
      AWARDS

              

      

       

      (a) Nature of Restricted Stock
Awards.  The Administrator shall determine the restrictions and
conditions applicable to each Restricted Stock Award at the time of
grant.  Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives.  The grant of a Restricted Stock Award is contingent
on the grantee executing the Restricted Stock Award Agreement.  The
terms and conditions of each such Award Agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.

       

      (b) Rights as a
Stockholder.  Upon execution of the Restricted Stock Award
Agreement and payment of any applicable purchase price, a grantee shall have the
rights of a stockholder with respect to the voting of the Restricted Stock,
subject to such conditions contained in the Restricted Stock Award
Agreement.  Unless the Administrator shall otherwise determine, (i)
uncertificated Restricted Stock shall be accompanied by a notation on the
records of the Company or the transfer agent to the effect that they are subject
to forfeiture until such Restricted Stock are vested as provided in Section 7(d)
below, and (ii) certificated Restricted Stock shall remain in the possession of
the Company until such Restricted Stock is vested as provided in
Section 7(d) below, and the grantee shall be required, as a condition of
the grant, to deliver to the Company such instruments of transfer as the
Administrator may prescribe.

       

      (c) Restrictions.  Restricted
Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or
disposed of except as specifically provided herein or in the Restricted Stock
Award Agreement.  Except as may otherwise be provided by the
Administrator either in the Award Agreement or, subject to Section 18 below, in
writing after the Award Agreement is issued, if any, if a grantee’s employment
(or other service relationship) with the Company and its Subsidiaries terminates
for any reason, any Restricted Stock that has not vested at the time of
termination shall automatically and without any requirement of notice to such
grantee from or other action by or on behalf of, the Company be deemed to have
been reacquired by the Company at its original purchase price from such grantee
or such grantee’s legal representative simultaneously with such termination of
employment (or other service relationship), and thereafter shall cease to
represent any ownership of the Company by the grantee or rights of the grantee
as a stockholder.  Following such deemed reacquisition of unvested
Restricted Stock that are represented by physical certificates, a grantee shall
surrender such certificates to the Company upon request without
consideration.

       

      
        
          7

        

      

      
         

        (d) Vesting of Restricted
Stock.  The Administrator at the time of grant shall specify
the date or dates and/or the attainment of pre-established performance goals,
objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company’s right of repurchase or forfeiture shall
lapse.  Notwithstanding the foregoing, in the event that any such
Restricted Stock granted to employees shall have a performance-based goal, the
restriction period with respect to such shares shall not be less than one year,
and in the event any such Restricted Stock granted to employees shall have a
time-based restriction, the total restriction period with respect to such shares
shall not be less than three years; provided, however, that Restricted Stock
with a time-based restriction may become vested incrementally over such
three-year period.  Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed “vested.”  Except as may
otherwise be provided by the Administrator either in the Award Agreement or,
subject to Section 18 below, in writing after the Award Agreement is
issued, a grantee’s rights in any shares of Restricted Stock that have not
vested shall automatically terminate upon the grantee’s termination of
employment (or other service relationship) with the Company and its Subsidiaries
and such shares shall be subject to the provisions of Section 7(c)
above.

         

      

      
        	
                SECTION
      8.  

              	
                DEFERRED STOCK
      AWARDS

              

      

       

      (a) Nature of Deferred Stock
Awards.   The Administrator shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time
of grant.  Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives.  The grant of a Deferred Stock Award is contingent on
the grantee executing the Deferred Stock Award Agreement.  The terms
and conditions of each such Award Agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.  Notwithstanding the foregoing, in the event that any
such Deferred Stock Award granted to employees shall have a performance-based
goal, the restriction
period with respect to such Award shall not be less than one year, and in the
event any such Deferred Stock Award granted to employees shall have a time-based
restriction, the total restriction period with respect to such Award shall not
be less than three years; provided, however, that any Deferred Stock Award with
a time-based restriction may become vested incrementally over such three-year
period.  At the end of the deferral period, the Deferred Stock Award,
to the extent vested, shall be paid to the grantee in the form of shares of
Stock.

       

      (b) Election to Receive Deferred
Stock Awards in Lieu of Compensation.  The Administrator may,
in its sole discretion, permit a grantee to elect to receive a portion of future
cash compensation otherwise due to such grantee in the form of a Deferred Stock
Award.  Any such election shall be made in writing and shall be
delivered to the Company no later than the date specified by the Administrator
and in accordance with Section 409A and such other rules and procedures
established by the Administrator.  The Administrator shall have the
sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Administrator deems appropriate.  Any such deferred
compensation shall be converted to a fixed number of phantom stock units based
on the Fair Market Value of Stock on the date the compensation would otherwise
have been paid to the grantee but for the deferral.

       

      (c) Rights as a
Stockholder.  During the deferral period, a grantee shall have
no rights as a stockholder; provided, however, that the grantee may be credited
with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Administrator may determine.

       

      (d) Termination.  Except
as may otherwise be provided by the Administrator either in the Award Agreement
or, subject to Section 18 below, in writing after the Award Agreement is
issued, a grantee’s right in all Deferred Stock Awards that have not vested
shall automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for any
reason.

       

      
        	
                SECTION
      9.  

              	
                UNRESTRICTED STOCK
      AWARDS

              

      

       

      Grant or Sale of
Unrestricted Stock.  The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Administrator) an Unrestricted Stock Award under the
Plan.  Unrestricted Stock Awards may be granted in respect of past
services or other valid consideration, or in lieu of cash compensation due to
such grantee.

       

      
        
          8

        

        
          
            
              	
                      SECTION
      10.  

                    	
                      CASH-BASED
      AWARDS

                    

            

             

            (a) Grant of Cash-based
Awards.  The Administrator may, in its sole discretion, grant
Cash-based Awards to any grantee in such number or amount and upon such terms,
and subject to such conditions, as the Administrator shall determine at the time
of grant.  The Administrator shall determine the maximum duration of
the Cash-based Award, the amount of cash to which the Cash-based Award pertains,
the conditions upon which the Cash-based Award shall become vested or payable,
and such other provisions as the Administrator shall determine.  Each
Cash-based Award shall
specify a cash-denominated payment amount, formula or payment ranges as
determined by the Administrator.  Payment, if any, with respect to a
Cash-based Award shall be made in accordance with the terms of the Award and may
be made in cash or in shares of Stock, as the Administrator
determines.

             

          

          
            	
                    SECTION
      11.  

                  	
                    PERFORMANCE SHARE
      AWARDS

                  

          

           

          (a) Nature of Performance Share
Awards.  The Administrator may, in its sole discretion, grant
Performance Share Awards independent of, or in connection with, the granting of
any other Award under the Plan.  The Administrator shall determine
whether and to whom Performance Share Awards shall be granted, the Performance
Goals, the periods during which performance is to be measured, which may not be
less than one year, and such other limitations and conditions as the
Administrator shall determine.

           

          
                  
(b) Rights as a
Stockholder.  A grantee receiving a Performance Share Award
shall have the rights of a stockholder only as to shares actually received by
the grantee under the Plan and not with respect to shares subject to the Award
but not actually received by the grantee.  A grantee shall be
entitled to receive shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the Performance Share Award
agreement (or in a performance plan adopted by the Administrator).

          

        

      

    

     

    (c) Termination.  Except
as may otherwise be provided by the Administrator either in the Award agreement
or, subject to Section 18 below, in writing after the Award agreement is
issued, a grantee’s rights in all Performance Share Awards shall automatically
terminate upon the grantee’s termination of employment (or cessation of service
relationship) with the Company and its Subsidiaries for any reason.

     

    
      	
              SECTION
      12.  

            	
              PERFORMANCE-BASED
      AWARDS TO COVERED EMPLOYEES

            

    

     

    (a) Performance-based
Awards.  Any employee or other key person providing services to
the Company and who is selected by the Administrator may be granted one or more
Performance-based Awards in the form of a Restricted Stock Award, Deferred Stock
Award, Performance Shares or Cash-based Award payable upon the attainment of
Performance Goals that are established by the Administrator and relate to one or
more of the Performance Criteria, in each case on a specified date or dates or
over any period or periods determined by the Administrator.  The
Administrator shall define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for any Performance
Period.  Depending on the Performance Criteria used to establish such
Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a division, business unit, or an
individual.  The Administrator, in its discretion, may adjust or
modify the calculation of Performance Goals for such Performance Period in order
to prevent the dilution or enlargement of the rights of an individual (i) in the
event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event or development, (ii) in recognition of, or in anticipation
of, any other unusual or nonrecurring events affecting the Company, or the
financial statements of the Company, or (iii) in response to, or in anticipation
of, changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Administrator may not exercise such
discretion in a manner that would increase the Performance-based Award granted
to a Covered Employee.  Each Performance-based Award shall comply with
the provisions set forth below.

     

    (b) Grant of Performance-based
Awards.  With respect to each Performance-based Award granted
to a Covered Employee, the Administrator shall select, within the first 90 days
of a Performance Cycle (or, if shorter, within the maximum period allowed under
Section 162(m) of the Code) the Performance Criteria for such grant, and
the Performance Goals with respect to each Performance Criterion (including a
threshold level of performance below which no amount will become payable with
respect to such Award).  Each Performance-based Award will specify the
amount payable, or the formula for determining the amount payable, upon
achievement of the various applicable performance targets.  The
Performance Criteria established by the Administrator may be (but need not be)
different for each Performance Cycle and different Performance Goals may be
applicable to Performance-based Awards to different Covered
Employees.

     

    
      
        9

      

    

    
      
        (c) Payment of Performance-based
Awards.  Following the completion of a Performance Cycle, the
Administrator shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Cycle have been achieved and,
if so, to also calculate and certify in writing the amount of the
Performance-based Awards earned for the Performance Cycle.  The
Administrator shall then determine the actual size of each Covered Employee’s
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

         

        (d) Maximum Award
Payable.  The maximum Performance-based Award payable to any
one Covered Employee under the Plan for a Performance Cycle is 500,000 Shares
(subject to adjustment as provided in Section 3(b) hereof) or $6,000,000 in
the case of a Performance-based Award that is a Cash-based
Award.

      

       

      
        	
                SECTION
      13.  

              	
                DIVIDEND EQUIVALENT
      RIGHTS

              

      

       

      (a) Dividend Equivalent
Rights.  A Dividend Equivalent Right may be granted hereunder
to any grantee as a component of another Award or as a freestanding
award.  The terms and conditions of Dividend Equivalent Rights shall
be specified in the Award Agreement.  Dividend equivalents credited to
the holder of a Dividend Equivalent Right may be paid currently or may be deemed
to be reinvested in additional shares of Stock, which may thereafter accrue
additional equivalents.  Any such reinvestment shall be at Fair Market
Value on the date of reinvestment or such other price as may then apply under a
dividend reinvestment plan sponsored by the Company, if any.  Dividend
Equivalent Rights may be settled in cash or shares of Stock or a combination
thereof, in a single installment or installments.  A Dividend
Equivalent Right granted as a component of another Award may provide that such
Dividend Equivalent Right shall be settled upon exercise, settlement, or payment
of, or lapse of restrictions on, such other Award, and that such Dividend
Equivalent Right shall expire or be forfeited or annulled under the same
conditions as such other Award.  A Dividend Equivalent Right granted
as a component of another Award may also contain terms and conditions different
from such other Award.

       

    

    (b) Interest
Equivalents.  Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash
payment.  Interest equivalents may be compounded and shall be paid
upon such terms and conditions as may be specified by the grant.

     

    (c) Termination.  Except
as may otherwise be provided by the Administrator either in the Award Agreement
or, subject to Section 18 below, in writing after the Award Agreement is
issued, a grantee’s rights in all Dividend Equivalent Rights or interest
equivalents granted as a component of another Award that has not vested shall
automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for any
reason.

     

    
      	
              SECTION
      14.  

            	
              TRANSFERABILITY OF
      AWARDS

            

    

     

    (a) Transferability.  Except
as provided in Section 14(b) below, during a grantee’s lifetime, his or her
Awards shall be exercisable only by the grantee, or by the grantee’s legal
representative or guardian in the event of the grantee’s
incapacity.  No Awards shall be sold, assigned, transferred or
otherwise encumbered or disposed of by a grantee other than by will or by the
laws of descent and distribution.  No Awards shall be subject, in
whole or in part, to attachment, execution, or levy of any kind, and any
purported transfer in violation hereof shall be null and void.

     

    (b) Administrator
Action.  Notwithstanding Section 14(a), the Administrator,
in its discretion, may provide either in the Award Agreement regarding a given
Award or by subsequent written approval that the grantee (who is an employee or
director) may transfer his or her Awards (other than any Incentive Stock
Options) to his or her immediate family members, to trusts for the benefit of
such family members, or to partnerships in which such family members are the
only partners, provided that the transferee agrees in writing with the Company
to be bound by all of the terms and conditions of this Plan and the applicable
Award.

     

    (c) Family
Member.  For purposes of Section 14(b), “family member”
shall mean a grantee’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the grantee’s household
(other than a tenant of the grantee), a trust in which these persons (or the
grantee) have more than 50 percent of the beneficial interest, a foundation in
which these persons (or the grantee) control the management of assets, and any
other entity in which these persons (or the grantee) own more than 50 percent of
the voting interests.

     

    
      
        10

      

    

    
      
        (d) Designation of
Beneficiary.  Each grantee to whom an Award has been made under
the Plan may designate a beneficiary or beneficiaries to exercise any Award or
receive any payment under any Award payable on or after the grantee’s
death.  Any such designation shall be on a form provided for that
purpose by the Administrator and shall not be effective until received by the
Administrator.  If no beneficiary has been designated by a deceased
grantee, or if the designated beneficiaries have predeceased the grantee, the
beneficiary shall be the grantee’s estate.

         

        
          	
                  SECTION
      15.  

                	
                  TAX
      WITHHOLDING

                

        

         

        (a) Payment by
Grantee.  Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld by the Company with respect to such
income.  The Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the grantee.  The Company’s obligation to
deliver evidence of book entry (or stock certificates) to any grantee is subject
to and conditioned on tax withholding obligations being satisfied by the
grantee.

         

      

      (b) Payment in
Stock.  Subject to approval by the Administrator, a grantee may
elect to have the Company’s minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the withholding amount
due.

       

    

    
      	
              SECTION
      16.  

            	
              ADDITIONAL CONDITIONS
      APPLICABLE TO NONQUALIFIED DEFERRED COMPENSATION UNDER SECTION
      409A.

            

    

     

    In the
event any Stock Option or Stock Appreciation Right under the Plan is materially
modified and deemed a new grant at a time when the Fair Market Value exceeds the
exercise price, or any other Award is otherwise determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A (a “409A
Award”), the following additional conditions shall apply and shall supersede any
contrary provisions of this Plan or the terms of any agreement relating to such
409A Award.

     

    (a) Exercise and
Distribution.  Except as provided in Section 16(b) hereof, no
409A Award shall be exercisable or distributable earlier than upon one of the
following:

     

    (i) Specified
Time.  A specified time or a fixed schedule set forth in the
written instrument evidencing the 409A Award.

     

    (ii) Separation from
Service.  Separation from service (within the meaning of
Section 409A) by the 409A Award grantee; provided, however, that if the 409A
Award grantee is a “key employee” (as defined in Section 416(i) of the Code
without regard to paragraph (5) thereof) and any of the Company’s Stock is
publicly traded on an established securities market or otherwise, exercise or
distribution under this Section 16(a)(ii) may not be made before the date that
is six months after the date of separation from service.

     

    (iii) Death.  The
date of death of the 409A Award grantee.

     

    (iv) Disability.  The
date the 409A Award grantee becomes disabled (within the meaning of Section
16(c)(ii) hereof).

     

    (v) Unforeseeable
Emergency.  The occurrence of an unforeseeable emergency
(within the meaning of Section 16(c)(iii) hereof), but only if the net value
(after payment of the exercise price) of the number of shares of Stock that
become issuable does not exceed the amounts necessary to satisfy such emergency
plus amounts necessary to pay taxes reasonably anticipated as a result of the
exercise, after taking into account the extent to which the emergency is or may
be relieved through reimbursement or compensation by insurance or otherwise or
by liquidation of the grantee’s other assets (to the extent such liquidation
would not itself cause severe financial hardship).

     

    (vi) Change in Control
Event.  The occurrence of a Change in Control Event (within the
meaning of Section 16(c)(i) hereof), including the Company’s discretionary
exercise of the right to accelerate vesting of such grant upon a Change in
Control Event or to terminate the Plan or any 409A Award granted hereunder
within 12 months of the Change in Control Event.

    
      
        
        

      

      
        11

      

    

    
      
        
           

          (b) No
Acceleration.  A 409A Award may not be accelerated or exercised
prior to the time specified in Section 16(a) hereof, except in the case of one
of the following events:

           

        

        (i) Domestic Relations
Order.  The 409A Award may permit the acceleration of the
exercise or distribution time or schedule to an individual other than the
grantee as may be necessary to comply with the terms of a domestic relations
order (as defined in Section 414(p)(1)(B) of the Code).

         

        (ii) Conflicts of
Interest.  The 409A Award may permit the acceleration of the
exercise or distribution time or schedule as may be necessary to comply with the
terms of a certificate of divestiture (as defined in Section 1043(b)(2) of the
Code).

         

        (iii) Change in Control
Event.  The Administrator may exercise the discretionary right
to accelerate the vesting of such 409A Award upon a Change in Control Event or
to terminate the Plan or any 409A Award granted thereunder within 12 months of
the Change in Control Event and cancel the 409A Award for
compensation.

         

        (c) Definitions.  Solely
for purposes of this Section 16 and not for other purposes of the Plan, the
following terms shall be defined as set forth below:

         

      

      (i) “Change
in Control Event” means the occurrence of a change in the ownership of the
Company, a change in effective control of the Company, or a change in the
ownership of a substantial portion of the assets of the Company (as defined in
Section 1.409A-3(g) of the proposed regulations promulgated under Section 409A
by the Department of the Treasury on September 29, 2005 or any subsequent
guidance).

    

    (ii) “Disabled”
means a grantee who (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) is, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the Company
or its Subsidiaries.

     

    (iii) “Unforeseeable
Emergency” means a severe financial hardship to the grantee resulting from an
illness or accident of the grantee, the grantee’s spouse, or a dependent (as
defined in Section 152(a) of the Code) of the grantee, loss of the grantee’s
property due to casualty, or similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
grantee.

     

    
      	
              SECTION
      17.  

            	
              TRANSFER, LEAVE OF
      ABSENCE, ETC.

            

    

     

    For
purposes of the Plan, the following events shall not be deemed a termination of
employment:

     

    (a) a
transfer to the employment of the Company from a Subsidiary or from the Company
to a Subsidiary, or from one Subsidiary to another; or

     

    (b) an
approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the employee’s right to re-employment is
guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Administrator otherwise so
provides in writing.

     

    
      
        12

      

    

    
      
        
           

          
            	
                    SECTION
      18.  

                  	
                    AMENDMENTS AND
      TERMINATION

                  

          

           

          The Board
may, at any time, amend or discontinue the Plan and the Administrator may, at
any time, amend or cancel any outstanding Award for the purpose of satisfying
changes in law or for any other lawful purpose, but no such action shall
adversely affect rights under any outstanding Award without the holder’s
consent.  Except as provided in Section 3(b) or 3(c), in no event may
the Administrator exercise its discretion to reduce the exercise price of
outstanding Stock Options or Stock Appreciation Rights or effect repricing
through cancellation and re-grants.  Any material Plan amendments
(other than amendments that curtail the scope of the Plan), including any Plan
amendments that (i) increase the number of shares reserved for issuance under
the Plan, (ii) expand the type of Awards available under, materially expand the
eligibility to participate in, or materially extend the term of, the Plan, or
(iii) materially change the method of determining Fair Market Value, shall be
subject to approval by the Company stockholders entitled to vote at a meeting of
stockholders.  In addition, to the extent determined by the
Administrator to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code or
to ensure that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall be
subject to approval by the Company stockholders entitled to vote at a meeting of
stockholders.  Nothing in this Section 18 shall limit the
Administrator’s authority to take any action permitted pursuant to
Section 3(c).

           

        

        
          	
                  SECTION
      19.  

                	
                  STATUS OF
      PLAN

                

        

         

        With
respect to the portion of any Award that has not been exercised and any payments
in cash, Stock or other consideration not received by a grantee, a grantee shall
have no rights greater than those of a general creditor of the Company unless
the Administrator shall otherwise expressly determine in connection with any
Award or Awards.  In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

         

      

      
        	
                SECTION
      20.  

              	
                GENERAL
      PROVISIONS

              

      

       

      (a) No
Distribution.  The Administrator may require each person
acquiring Stock pursuant to an Award to represent to and agree with the Company
in writing that such person is acquiring the shares without a view to
distribution thereof.

       

    

    (b) Delivery of Stock
Certificates.  Stock certificates to grantees under this Plan
shall be deemed delivered for all purposes when the Company or a stock transfer
agent of the Company shall have mailed such certificates in the United States
mail, addressed to the grantee, at the grantee’s last known address on file with
the Company.  Uncertificated Stock shall be deemed delivered for all
purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by electronic mail (with proof of receipt) or by United
States mail, addressed to the grantee, at the grantee’s last known address on
file with the Company, notice of issuance and recorded the issuance in its
records (which may include electronic “book entry”
records).  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 (to the extent the Board deems such
advice necessary or advisable), 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, quoted or traded.  All Stock
certificates delivered pursuant to the Plan shall be subject to any
stop-transfer orders and other restrictions as the Administrator deems necessary
or advisable to comply with federal, state or foreign jurisdiction, securities
or other laws, rules and quotation system on which the Stock is listed, quoted
or traded.  The Administrator 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
an individual make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems necessary or advisable in order to comply
with any such laws, regulations, or requirements.  The Administrator
shall have the right to require any individual 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
Administrator.

     

    (c) Stockholder
Rights.  Until Stock is deemed delivered in accordance with
Section 20(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.

    
      
        
        

      

      
        13

        
          

        

      

    

    
      (d) Other Compensation
Arrangements; No Employment Rights.  Nothing contained in this
Plan shall prevent the Board from adopting other or additional compensation
arrangements, including trusts, and such arrangements may be either generally
applicable or applicable only in specific cases.  The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

       

    

    (e) Trading Policy
Restrictions.  Option exercises and other Awards under the Plan
shall be subject to such Company’s insider trading policy and procedures, as in
effect from time to time.

     

    (f) Forfeiture of Awards under
Sarbanes-Oxley Act.  If the Company is required to prepare an
accounting restatement due to the material noncompliance of the Company, as a
result of misconduct, with any financial reporting requirement under the
securities laws, then any grantee who is one of the individuals subject to
automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 shall
reimburse the Company for the amount of any Award received by such individual
under the Plan during the 12-month period following the first public issuance or
filing with the United States Securities and Exchange Commission, as the case
may be, of the financial document embodying such financial reporting
requirement.

     

    
      	
              SECTION
      21.  

            	
              EFFECTIVE DATE OF
      PLAN

            

    

     

    This Plan
shall become effective upon approval by the holders of a majority of the votes
cast at a meeting of stockholders at which a quorum is present or pursuant to
written consent.  No grants of Stock Options and other Awards may be
made hereunder after the tenth (10th)
anniversary of the Effective Date and no grants of Incentive Stock Options may
be made hereunder after the tenth (10th)
anniversary of the date the Plan is approved by the Board.

     

    
      	
              SECTION
      22.  

            	
              GOVERNING
      LAW

            

    

     

    This Plan
and all Awards and actions taken thereunder shall be governed by, and construed
in accordance with, the laws of the State of Delaware, applied without regard to
conflict of law principles.

     

     

    DATE
APPROVED BY BOARD OF DIRECTORS:  August 27, 2009

     

    
      DATE
APPROVED BY STOCKHOLDERS:  November 17,
2009ex41.htm

  

  

  

	
British

Columbia

 

The Best Place on Earth
	
 

 

Ministry

of Finance

 

BC Registry Services
	
 

 

Mailing Address:

PO Box 9431 Stn Prov Govt.

Victoria BC V8W 9V3

 

WWW. Corporateonline.gov.bc.ca
	
 

 

 

Location:

2nd Floor – 940 Blanshard St.

Victoria BC

 250 356-8626

 

Notice of Alteration

FORM 11

BUSINESS CORPORATIONS ACT

Section 257

NOTICE OF ALTERATION

	
Incorporation Number:

 

BC0634846
	
Name of Company:

 

CHINA TELETECH LIMITED

Alteration Effective Date:

 

The alteration is to take effect at the time that this application is filed with the Registrar.

 

Authorized Share Structure

 

	
1. 250,000,000
	
Class “A” Common Shares
	
Without Par Value

	
 

2.   10,000,000
	
 

Class “A” Preferred Shares
	
 

Without Par Value

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