Document:

DISTRIBUTION
      AGREEMENT

     

    by
      and
      between

     

    GIVEN
      IMAGING K.K.

     

    And

     

    SUZUKEN
      CO., LTD.

     

    Dated
      May
      9, 2002

     

      
        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    DISTRIBUTION
      AGREEMENT

     

    This
      Distribution Agreement (the "Agreement")
      is
      entered into as of May 9, 2002 (the "Execution
      Date")
      by and
      between Given Imaging K.K. ("Given
      Japan"),
      a
      Japanese corporation having its principal office at 4-12, Hirakawacho 1-chome,
      Chiyoda-ku, Tokyo, and Suzuken Co., Ltd. ("Suzuken"),
      a
      Japanese corporation having its principal office at 8 HigashiKataha-machi,
      Higashi-ku, Nagoya, Aichi. Suzuken and Given Japan are sometimes referred to
      individually as a "Party"
      and
      together as the "Parties".

     

    RECITALS

     

    WHEREAS
      Given Japan and Given Imaging Ltd. ("Given
      Imaging")
      are
      Parties to that certain Amended Supply Agreement (the "Supply
      Agreement")
      dated
      of even date herewith for supply by Given Imaging to Given Japan of the Given
      Diagnostic Imaging System (the "Given System") currently consisting of the
      M2ATM
      Capsule,
      a Data Recorder Kit and the RAPIDTM
      Work
      Station for the diagnosis of the Gastro-Intestinal Tract, as listed in
Schedule
      A,
      attached
      hereto, and any enhancements, improvements or related product developed by
      Given
      Imaging (collectively the "Product")
      for
      distribution in Japan (the "Territory"),
      and

     

    WHEREAS,
      Suzuken markets, distributes and sells pharmaceutical products and medical
      equipment and disposable items throughout the Territory; and

     

    WHEREAS,
      subject to the terms and conditions of this Agreement, Given Japan wishes to
      appoint Suzuken as its distribution representative for the Product in the
      Territory; and

     

    WHEREAS,
      Suzuken wishes to accept such appointment and to act as Given Japan's
      distribution representative in the Territory for the Product pursuant to the
      terms and conditions of this Agreement;

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      agreements herein contained, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the Parties hereby
      agree as follows:

     

    AGREEMENT

     

    1. Appointment.

     

    1.1 Appointment.
      Subject
      to the terms hereof, Given Japan hereby appoints Suzuken as its exclusive
      distributor of the Product to Customers in the Territory, subject to the
      exceptions and restrictions stated herein, and Suzuken accepts this appointment.
      To perform its obligations as exclusive distributor, Given Japan grants to
      Suzuken the non-transferable (except as provided in Section 15) right to market,
      distribute and sell the Product directly to Customers in the Territory.
"Customers"
      (each,
      individually a "Customer")
      means
      customers who purchase the Product for their own internal use and not for
      further marketing, distribution, sale or resale.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2 No
      Resellers.
      Suzuken
      shall not appoint any resellers for the Product without the express prior
      written consent of Given Japan other than purchasing agents nominated by
      hospitals and other healthcare providers for purchasing medical supplies on
      their behalf.

     

    1.3 Restrictions.
      Such
      appointment as set forth in Section 1.1 is subject to any law and directives
      applicable in the Territory. Suzuken shall not use the Product for any purpose
      other than the purposes of this Agreement, and Suzuken shall not sell, market
      or
      distribute the Product, or conduct any marketing activity with respect to the
      Product outside the Territory, without the express, prior, written approval
      of
      Given Japan. Suzuken shall have no distribution rights pursuant to this
      Agreement for any Given Imaging products other than the Product. Suzuken shall
      not distribute the Product, as such, in integration with other products or
      technologies or other than as a stand-alone product, and shall not attempt
      to
      separate the Product's components or to use a component separately and not
      as
      part of the Product, without first obtaining Given Japan's prior written
      consent.

     

    1.4 Language.
      Any and
      all correspondence between the Parties hereto, including training and technical
      or other documents or notices exchanged between the Parties and with any third
      Party relating to this Agreement, shall be in the Japanese; provided that at
      Given Japan's reasonable request, Suzuken shall provide English translation
      of
      its correspondence but shall not bear responsibility for the accuracy of any
      translation prepared by a reasonably selected outside translation
      service.

     

    1.5 Performance
      Standard.
      Suzuken
      shall and shall cause its employees, agents and independent contractors to
      exercise reasonable care in the performance of any and all of its duties under
      this Agreement and in taking any other action(s) related thereto, including
      without limitation, the handling, installation, demonstration or servicing
      of
      any Product. Further, Suzuken shall not engage in any illegal, unfair, or
      deceptive business practices in connection with its performance under this
      Agreement. Suzuken acknowledges that breach of this provision shall be a
      material breach of this Agreement.

     

    2. Trademarks
      and Domain Names.

     

    2.1 Sublicense. 
      (a)
      Given
      Japan hereby grants Suzuken a limited sublicense to use and display the
      trademarks GivenTM
      ,
      M2ATM
      and
      RAPIDTM
      owned by
      Given Imaging (collectively, the "Given
      Marks")
      and
      licensed to Given Japan pursuant to the Supply Agreement solely for marketing
      purposes in publications, articles, advertisements and other promotional
      materials in the Territory only in connection with the Product during the
      Term.

     

    (b) All
      advertising and other materials in which the Given Marks are used shall be
      subject to Given Japan's prior written consent, which may be withheld in its
      reasonable discretion. Suzuken acknowledges that such advertising and other
      materials may be subject to review and approval by Given Imaging under the
      Supply Agreement. Upon termination of this Agreement, this limited license
      shall
      immediately terminate and Suzuken shall cease all use of the Given Marks other
      than reasonably necessary to fulfill pending purchase order for
      Products.

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (c) Without
      limiting the forgoing, all use by Suzuken of the Given Marks (including any
      Japanese language translation thereof into katakana
      or
      otherwise) or domain name shall inure to the benefit of Given Imaging, and
      Suzuken shall not obtain any rights with respect to the Given Marks or domain
      names, other than any rights expressly set forth herein. Suzuken hereby
      irrevocably assigns to Given Imaging in perpetuity all worldwide right, title
      and interest, if any, that are owned or obtained by Suzuken in any of the Given
      Marks (including any Japanese language translation thereof into katakana
      or
      otherwise) or domain names.

     

    2.2 Limitations.
      Suzuken
      agrees not to attach or apply to the Product any other materials (including
      packaging) of whatever media, any label, marking or other information that
      has
      not been approved by Given Japan in writing in advance. Suzuken acknowledges
      that all rights in the Given Marks and domain names are and shall remain the
      sole property of Given Imaging. Given Japan reserves the right to add to,
      change, or discontinue the use of the Given Marks or domain names, on a
      selective or general basis, at any time. Suzuken shall not remove, obscure
      or
      obliterate any Given Imaging patent, trademark or any other proprietary notices
      incorporated in, marked on or affixed to the Product, and shall include such
      notices in marketing materials in accordance with Given Japan's
      instructions.

     

    3. Regulatory
      and Marketing Approvals.
      Given
      Japan shall use its best efforts to obtain and maintain all regulatory and
      governmental approvals necessary for the marketing of the Products throughout
      the Territory, as well as for health insurance reimbursement. Upon request
      by
      Given Japan, Suzuken shall, to the extent reasonable, assist Given Japan in
      preparing and filing any such requests or applications as well as taking other
      actions necessary for obtaining such approvals. Such assistance shall include,
      but is not necessarily limited to allocating appropriate professional manpower,
      whose costs shall be borne by Suzuken. The approvals will be in Given Japan's
      name, and costs for procuring such approvals shall be borne by Given Japan.
      The
      above shall apply to the existing Product items as well as to new Product items,
      as may be announced by Given Imaging from time to time.

     

    4. Given
      Japan's Responsibilities.
      Given
      Japan shall:

     

    (a) subject
      to delivery from Given Imaging pursuant to the Supply Agreement, ship Product
      within [***Redacted***]
      of
      receipt of Product purchase order from Suzuken and sell the Products to Suzuken,
      pursuant to purchase orders to be placed by Suzuken and at the prices, delivery
      dates and otherwise in accordance with this Agreement; provided that (i) Given
      Japan shall cause Given Imaging to ship M2A capsules within [***Redacted***]
      and (ii)
      to assist Suzuken in meeting initial unexpected demand, [***Redacted***]
      period
      commencing upon receipt of [***Redacted***]
      prior
      written notice from Suzuken, once [***Redacted***]
      (but not
      before [***Redacted***]
      from
      previous Emergency Order (defined below)) Suzuken may submit an emergency order
      for up to [***Redacted***]
      M2A
      capsules (an "Emergency
      Order")
      and
      Given Japan shall cause Given Imaging to deliver such capsules within
[***Redacted***]
      of
      receipt of such order in accordance with the Supply Agreement; provided further
      that Given Japan shall place a purchase order with Given Imaging for the
      Products within [***Redacted***]
      of
      receipt of such order from Suzuken;

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (b) provide
      Suzuken with, at no cost, (i) Japanese language Product manuals printed by
      Given
      Imaging and inserted in the Product package (ii) introductory Japanese language
      Product catalogs/brochures printed by Given Japan and (iii) the content and
      graphic design for promotional materials and literature to be printed by
      Suzuken;

     

    (c) provide
      the personnel of Suzuken assigned for the sales and service of the Product
      with
      adequate training as to the operation, installation, maintenance and
      troubleshooting of the Product (training of technical personnel for repairs
      of
      Product parts shall be provided by Given Imaging in Israel). Suzuken shall
      not
      be charged for such training other than reimbursement by Suzuken of reasonable
      hotel and travel expenses of personnel of Given Imaging or Given Japan, as
      the
      case may be, who travel to Japan in accommodating Suzuken's request for training
      pursuant to this Section 4(c);

     

    (d) assist
      Suzuken in its promotion efforts by sending representatives to attend and
      lecture in medical meetings, as requested by Suzuken, offer explanations and
      answer questions regarding the Product and its use and join conventions and,
      trade shows etc., all if coordinated in advance, subject to personnel
      availability reimbursement by Suzuken of reasonable hotel and travel expenses
      of
      personnel of Given Imaging or Given Japan, as the case may be, who travel to
      Japan at in accommodating Suzuken's request pursuant to this Section
      4(d);

     

    (e) refer
      to
      Suzuken inquiries coming from the Territory through other international
      promotion channels (international advertisements, trade shows etc.) for
      purchasing Products for use within the Territory;

     

    (f) subject
      to receipt of a prior written notice to such effect from Given Imaging under
      the
      Supply Agreement, give Suzuken a ninety (90) days minimum prior notice of any
      modifications and improvements in the Products (including specifications,
      options, features, software upgrades or updates configuration,
      etc.);

     

    (g) provide
      Suzuken, at not cost, with all the leads and relevant information received
      by
      Given Japan from Given Imaging coming from the Territory through its Webcentric
      marketing and sales system, as soon as practicable after the system is
      operational;

     

    (h) at
      its
      own expense, monitor Suzuken's performance; and

     

    (i) [***Redacted***];

     

    (j) [***Redacted***],
      participate in [***Redacted***]
      international
      gastroenterology congress or convention in the Territory;

     

    (k) [***Redacted***];

     

    (l) during
      the Term, not exercise by itself nor grant to or authorize exercises by any
      other person or entity in the Territory any of the rights granted to Suzuken
      under Sections 1.1 or 1.2; and

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange Commission.
      

     

    (m) during
      the Term, not grant to or authorize exercise by any other person or entity
      in
      the Territory any of the rights granted to Suzuken under Section
      2.1.

     

    5. Suzuken
      's Responsibilities.
      Suzuken
      shall:

     

    (a) use
      its
      best efforts to market and sell the Product in the Territory, in accordance
      with
      a sales plan (which includes marketing and staffing) that is to be agreed upon
      by Given Japan and Suzuken;

     

    (b) [***Redacted***];

     

    (c) [***Redacted***];

     

    (d) maintain
      adequate inventory of the Product to meet the market demand and needs of
      Customers in the Territory and provide a high level of service to Customers.
      ("high level" shall mean [***Redacted***]);

     

    (e) [***Redacted***];

     

    (f) [***Redacted***];

     

    (g) make
      minor repairs to equipment and provide on-site service and in doing so, Suzuken
      shall follow given Japan's reasonable instructions and utilize only such Product
      components or spare and service parts, as applicable, for the Product as
      approved by or obtained from Given Japan. Accordingly, Suzuken shall maintain
      a
      stock of Product and spare units in quantity sufficient to provide such
      services;

     

    (h) provide
      Customers with basic training and education in the use of the Product, in
      accordance with Given Japan's guidance;

     

    (i) provide
      first level customer and technical support;

     

    (j) handle
      warranty claims (subject to reimbursement by Given Japan for defective
      Products). [***Redacted***];

     

    (k) [***Redacted***];

     

    (l) print
      promotional materials and literature as provided by Given Japan under Section
      4(b);

     

    (m) participate
      in [***Redacted***]
      gastroenterology
      congress/convention/exhibit held in the Territory;

     

    (n) [***Redacted***];

     

    (o) notify
      Given Japan's designated medical vigilance personnel in writing [***Redacted***]
      from the
      date that Suzuken becomes aware of the incident or near incident of any incident
      or near incident associated with the Product [***Redacted***],
      provide
      Given Japan all data and information required in order to prepare a medical
      device agency vigilance report or to comply with applicable law or requirements
      of the Ministry of Health Labor and Welfare of Japan ("MOH") and otherwise
      cooperate fully with Given Japan in a timely manner. [***Redacted***].
      In this
      sub section, "incident" shall include, but is not limited to, [***Redacted***].
      A
      "serious deterioration in the state of health" shall include, but is not limited
      to, [***Redacted***];

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (p) (i)
      appoint a representative for implementation of this Agreement, who shall serve
      as a point of contact (ii) [***Redacted***]
      and
      (iii) cause all its staff directly involved in the marketing and sales of the
      Product, from the level of regional sales manager and up, to attend a meeting
      with representatives of Given Japan [***Redacted***];

     

    (q) not
      make
      any representations or give any warranties concerning the Product or its
      capabilities which are false or misleading in any way [***Redacted***];

     

    (r) notify
      Given Japan of all matters of importance coming to its attention, relating
      to
      the Product and their service, legislative changes, governmental or local
      policies, new products and market trends;

     

    (s) refrain
      from making any change in the Product (including any part, component or feature
      thereof), unless specifically approved by Given Japan in writing;

     

    (t) subject
      to any applicable law or directive, refrain from selling Product to any entity
      outside the Territory or to any entity who Suzuken reasonably believes may
      resell, export or use the Product outside the Territory and refer to Given
      Japan
      any inquiries regarding the Product coming from outside the
      Territory;

     

    (u) reasonably
      cooperate with Given Japan on all matters of medical vigilance and report all
      Product problems;

     

    (v) [***Redacted***];

     

    (w) sell
      the
      Product only under Given Japan's limited warranty, as set forth in this
      Agreement;

     

    (x) [***Redacted***]
      and
      provide Customers with basic training and education in the use of the Products,
      in accordance with Given Japan's guidance; and

     

    (y) ensure
      that all its personnel involved in the marketing and service and distribution
      of
      the Product are adequately trained.

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    6. Terms
      and Conditions of Sale.
      All
      purchases of Products by Suzuken from Given Japan during the term of this
      Agreement shall be subject to the terms and conditions attached hereto as
Schedule
      B.
      The
      prices in Schedule
      B
      relate
      only to currently marketable parts and components of the Product, not to future
      parts and components of the Product.

     

    7. Proprietary
      Rights.

     

    7.1 Reporting
      of Third Party Infringement.
      Suzuken
      undertakes to promptly inform Given Japan in writing of any possible
      infringement by third parties in Japan of Given Imaging's proprietary rights
      including any duplication of the Product (including any part, component or
      feature thereof) or the Given Marks that Suzuken becomes aware of, [***Redacted***].

     

    7.2 Handling
      of Infringement Claims.

     

    (a) Suzuken
      undertakes to promptly inform Given Japan in writing of any actual or threatened
      claim that the Product or part thereof purchased by Suzuken hereunder may
      infringe a third party's proprietary rights in the Territory that Suzuken
      becomes aware of. In the event that Suzuken notifies Given Japan as aforesaid,
      then Given Japan agrees to defend (subject to reasonable assistance by Suzuken
      provided that Given Japan shall reimburse all of Suzuken's pre-approved
      expenses) and may, in its sole discretion, [***Redacted***].

     

    (b) If
      it is
      determined by the court of first instance [***Redacted***]
      that the
      Product or a part thereof purchased by Suzuken hereunder infringes a third
      party's proprietary rights in the Territory, Given Japan shall indemnify and
      hold harmless Suzuken as well as its shareholders, employees, directors,
      representatives, Customers and agents (each an "Indemnified
      Party")
      from
      and against their direct losses, costs and expenses set by such court to the
      extent based on such Infringement Claim (as defined below), except to the extent
      such losses, costs and expenses result from the Indemnified Party's breach
      of
      this Agreement, bad faith, willful misconduct or gross negligence. "Infringement
      Claim"
      means
      any third party claim that the Product or a part thereof infringes a third
      party's proprietary rights in the Territory.

     

    7.3 [***Redacted***].

     

    7.4 Assignment
      of Inventions.

     

    (a) Suzuken
      shall inform Given Japan of any Invention (as defined below) relating to the
      Product and, at Given Japan's request and expense, Suzuken hereby expressly
      assigns all right, titles and interests in and to any Inventions (defined below)
      to Given Imaging and shall execute any necessary assignment, patents forms,
      trade marks, and the like and will assist in the drafting of any description
      or
      specification of the Invention as may be required for Given Imaging's records
      and in connection with any application for patents. Suzuken shall treat all
      information relating to any Invention as Confidential Information. While, where
      relevant, the name of the Inventor on the Patent Applications will be that
      of
      the inventor, Given Imaging shall be the exclusive owner of any invention,
      trademark, copyright, improvement know-how or other intellectual property which
      shall be developed by Suzuken using any Confidential Information (defined below)
      of Given Japan or Given Imaging or with the involvement of any personnel of
      Given Japan or Given Imaging ("Inventions"),
      and of
      any patent, patent application, trademark, copyright and such other rights
      therein, without any additional compensation to Suzuken. It is understood that
      Given Japan shall pay Suzuken any expense incurred by it in assisting it, at
      its
      request, in obtaining patent, trademark, copyright or other protection
      hereunder. Given Imaging's rights shall be world-wide and shall attach to any
      such Invention notwithstanding that it is perfected or reduced to specific
      form
      after Suzuken has ceased its services hereunder, provided that its conception
      during the term hereof.

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (b) Without
      derogating from section 7.4(a), Given Imaging shall have sole and exclusive
      ownership rights in any results and information relating to, arising out of
      or
      resulting from the performance of this Agreement by either Party if (i)
      developed by Suzuken using any Confidential Information (defined below) of
      Given
      Japan or Given Imaging or jointly with the involvement of any personnel of
      Given
      Japan or Given Imaging or in performing its obligations hereunder and (ii)
      related to the Product, including, but not limited to all copyrights, and
      marketing information and material.

     

    8. Defects
      Warranty.

     

    8.1 Limited
      Customer Warranty.
      Given
      Japan shall provide a warranty to Suzuken and Customers warranting that the
      Product shall be free from defects in material or workmanship for a period
      as
      described below:

     

    (i) for
      [***Redacted***]
      in the
      case of the RAPIDTM
      Workstation, Data Recorder Kit carrying case, DataRecorderTM,
      RecorderBeltTM
      and
      Battery Charger;

     

    (ii) [***Redacted***]
      in the
      case of the M2ATM
      10-Pak;
      and

     

    (iii) for
      [***Redacted***]
      in the
      case of the Rechargeable Battery Packs and SensorArrayTM.

     

    Suzuken
      shall make available to Customers a copy of Given Japan's warranty to
      Customers.

     

    8.2 Limitation
      of Warranty Liability.
      The
      liability of Given Japan under this warranty is limited to [***Redacted***].

     

    8.3 Exclusions.
      This
      warranty shall not apply to a Product which has been repaired or altered other
      than in accordance with Given Japan's instructions, nor shall it apply to a
      Product which has been subject to misuse, unauthorized use, negligence,
      accident, (including fire, water, explosion, smoke, vandalism, etc.) or which
      has been operated contrary to Given Japan's instructions or any other cause
      beyond Given Japan's control. Without derogating from the above, the warranty
      is
      void, if at any time:

     

    
      
        
        

      

      
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    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (i) anyone
      other than Given Japan's authorized personnel removes a Product casing and/or
      attempts to make or makes any internal changes, removals, attachments or
      additions to the Product or components thereof; or

     

    (ii) anyone
      installs unauthorized software on to the Product.

     

    8.4 Return/Replacement
      of Products Under Warranty.
      Products or parts thereof may be returned for repair, replacement or adjustment
      to Given Japan. No credit allowances will be given or replacements shipped
      unless defects are verified by Given Japan or Given Japan's authorized
      personnel.

     

    8.5 Exclusive
      Remedy.
      THE
      FOREGOING WARRANTY IS SUZUKEN'S SOLE AND EXCLUSIVE REMEDY AGAINST GWEN JAPAN
      HEREUNDER, AND IS IN LIEU OF ANY AND ALL OTHER WARRANTIES, GUARANTEES, PROMISES,
      OR REPRESENTATIONS WHETHER WRITTEN, ORAL OR IMPLIED, INCLUDING WARRANTIES OF
      MERCHANTABILITY, SATISFACTORINESS OR FITNESS FOR ANY PARTICULAR PURPOSE OR
      USE.
      IN NO EVENT SHALL GIVEN JAPAN BE LIABLE FOR LOSS OF USE, LOSS OF PROFITS, OR
      OTHER COLLATERAL, SPECIAL OR CONSEQUENTIAL DAMAGES. EXCEPT AS SET FORTH IN
      SECTION 7 (Proprietary Rights) AND SECTION 9.1(ii) and 9.2 (Indemnification),
      EACH PARTY'S TOTAL LIABILITY ARISING UNDER THIS AGREEMENT SHALL BE LIMITED
      TO
      THE AMOUNT PAID BY SUZUKEN HEREUNDER IN THE [***Redacted***]
      PERIOD
      PRECEDING THE DATE OF THE CLAIM UNDER THIS AGREEMENT.

     

    8.6 Response
      to Warranty Claims.
      Suzuken
      shall handle all Customer warranty claims under the warranty set out in Section
      8.2 at its expense subject to reimbursement by Given Japan for defective
      Products.

     

    9. Indemnification.

     

    9.1 Mutual
      Indemnification.
      Each
      Party shall be liable for and shall indemnify, defend, and hold the other
      harmless against any liability, damages, or loss from any claims, actions,
      suits, judgments, proceedings, demands, recoveries or expenses, including,
      but
      not limited to, reasonable attorneys' fees, arising out of, based on, or caused
      by (i) any breach of this Agreement or any of its obligations hereunder or
      (ii)
      violation of any applicable Japanese law, statute, ordinance, rule or regulation
      with regard to the Product by the indemnifying Party or any of its respective
      employees, agents or independent contractors, except to the extent such damages
      arise from the bad faith, willful misconduct or gross negligence of the
      indemnified Party or its their respective employees or representatives (whether
      authorized or not).

     

    9.2 Indemnification
      by Given Japan.

     

    (a) Notwithstanding
      anything herein to the contrary, Given Japan shall defend, indemnify and hold
      harmless Suzuken, its officers, agents, employees and representatives and any
      of
      its Customers (each referred to in this Section 9.2 as an "Indemnified
      Party")
      from
      and against any and all direct costs, expenses, losses, damages or liabilities
      awarded by a court of first instance (provided that Suzuken will first appeal
      such determination if (i) requested by Given Japan and (ii) Given Japan timely
      funds the bond necessary to stay execution of such determination) to the extent
      based on any Product Liability Claim (defined below), except to the extent
      such
      damages arise from the bad faith, willful misconduct or gross negligence of
      such
      Indemnified Party or their respective employees or representatives (whether
      authorized or not). Given Japan agrees that, if the Products in the inventory
      of
      Suzuken, become or are subject of such a determination, Suzuken will be entitled
      to return such Products for a refund of the purchase price.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    (b) The
      foregoing rights of indemnification shall be conditioned on the Indemnified
      Party (i) furnishing prompt notification to Given Japan as soon as it becomes
      aware of such claim or action being made, threatened or reasonably expected
      (this obligation shall not apply to Customers; provided that Customers shall
      be
      required to provide such notice to Suzuken), (ii) permitting Given Japan or
      its
      designee to control defense and settlement of any such third-party claim or
      action, and (iii) cooperating in the defense by Given Japan or its designee
      at
      Given Japan's expense.

     

    (c) "Product
      Liability Claim"
      means a
      third party claim based on any death, bodily injury or property damages
      occurring out of the Given System, including, without limitation, a claim based
      on the Product
      Liability Act of Japan,
      Law No.
      85 promulgated on July 1, 1994 as it may be amended.

     

    10. Regulatory
      Inspections.
      Suzuken
      shall allow representatives of regulatory agencies or authorities with
      jurisdiction over the manufacture, marketing and distribution of the Product
      to
      tour and inspect all facilities utilized by Suzuken in the marketing,
      distribution, or storage, of Product sold under this Agreement, and shall
      co-operate with such representatives in every reasonable manner. Suzuken shall
      provide Given Japan with a copy of any notices of adverse findings, regulatory
      letters or similar notifications it receives from any other governmental
      authority setting forth adverse findings or non compliance with any applicable
      laws, regulations or standards relating to the items supplied by it hereunder.
      Suzuken shall also provide Given Japan with a copy of its proposed written
      response to such governmental authority before submission and shall incorporate
      all changes thereto which Given Japan requests.

     

    11. Term
      and Termination.

     

    11.1 Term.
      Subject
      to the terms and conditions set forth herein, and unless terminated earlier
      in
      accordance with Section 11.3, the term of this Agreement shall be as set forth
      in Schedule
      B
      (the
"Term").

     

    11.2 Continuation.
      The
      Term shall be automatically renewed for consecutive periods of one (1) year
      each
      so long as Suzuken [***Redacted***]
      and (ii)
      perform all of its obligations under this Agreement.

     

    11.3 Termination
      by Either Party.
      This
      Agreement and Suzuken 's distribution rights hereunder shall immediately
      terminate upon the occurrence of any one of the following:

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange Commission.
      

     

    (a) a
      material breach by either Party of its obligations under this Agreement that
      has
      not been cured (when curable, otherwise this cure period shall not apply) within
      ninety (90) days from receipt of written notice of thereof from the
      non-breaching Party.

     

    (b) either
      Party voluntarily files a petition in bankruptcy or liquidation, or has such
      a
      petition involuntarily filed against it, which is not discharged within 45
      days
      after filing, or is placed in receivership, or in the hands of a trustee for
      the
      benefit of creditors or enters into any analogous situation or position under
      the law of any relevant jurisdiction or ceases doing business in the marketing,
      distribution, manufacture, sale or lease of Products.

     

    11.4 Termination
      by Given Japan.
      Given
      Japan may, at its sole discretion, upon [***Redacted***]
      prior
      written notice (unless a shorter time is indicated below), terminate this
      Agreement (or make the distribution rights hereunder non-exclusive in the event
      that: (i) [***Redacted***];
      or (ii)
[***Redacted***];
      or
      (iii) upon [***Redacted***]
      prior
      written notice, in the event that [***Redacted***].

     

    11.5 Sale
      after Termination.
      If the
      term of this Agreement expires or this Agreement is terminated by Suzuken due
      to
      a breach by Given Japan, Suzuken shall at its option, (i) have the rights to
      sell the Products in its inventory or (ii) cause Given Japan to purchase the
      Products in good and salable condition in its inventory at the purchase price.
      Without prejudice to the foregoing, in the event that this Agreement expires
      or
      is terminated by Suzuken due to a breach by Given Japan, Suzuken may continue
      to
      sell the Products to its existing Customers until Given Japan or its newly
      appointed distributor becomes able to provide such Customers with the Products.
      In the event this Agreement is terminated by Given Japan due to breach by
      Suzuken or under Section 11.4, the Parties, together with Marubeni and Given
      Imaging, shall discuss transfer of Suzuken's Customer accounts to Given Japan
      or
      its newly appointed distributor to effect continuous sale of the Products to
      Suzuken's existing Customers.

     

    12. Non-Compete.
      During
      the Term and, [***Redacted***],
      (the
"Restriction
      Period"),
      Suzuken shall not without Given Japan's prior written consent:

     

    (i) directly
      or indirectly engage, participate or invest in any business whose primary
      business is the Restricted Business (defined below) in the Territory, or assist
      any business organization or person whose primary business engages in, or
      otherwise assist any division or unit of a business organization or person
      if
      the primary business of such division or unit is in the Restricted
      Business;

     

    (ii) directly
      or indirectly, on behalf of itself or any other person or entity, approach,
      contact or solicit Given Japan's customers in connection with any Restricted
      Business; or

     

    (iii) directly
      or indirectly, on behalf of itself or any other person or entity, solicit the
      services of, employ or agree to employ, engage or otherwise retain the services
      of any person who is or was an employee of Given Japan for the purposes of
      the
      Restricted Business.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    The
      "Restricted
      Business"
      shall
      mean [***Redacted***].

     

    13. Confidentiality.

     

    13.1 Confidentiality
      Obligation. 
      (a)
      Each
      Party shall hold in trust and confidence for the other Party all Confidential
      Information (as defined below) disclosed to the receiving Party at any time
      during the Term and neither Party shall disclose such Confidential Information
      to any person outside of the other Party. Each Party agrees to indemnify the
      other Party for any loss resulting from a breach of its duty to maintain such
      confidentiality.

     

    (b) "Confidential
      Information"
      means
      any non-public information, data, trade secrets or know-how, or business or
      technical information of a Party or other information of a Party related to
      the
      Product or any Invention, including, but not limited to, ideas, concepts,
      strategies, business and marketing plans, financial and operational information,
      investment opportunities and investments, research, product plans, customer
      and
      client lists and names, business contact lists and names, prices and costs,
      markets, developments, inventions, processes, marketing, licenses or other
      business information of a Party; provided that to be treated as Confidential
      Information, the information (whether disclosed in writing or orally) must
      be
      either (i) marked "Confidential" prior to its disclosure or if any of the
      foregoing is not so marked or which is disclosed orally or observed
      accidentally, it must be identified in writing as confidential within thirty
      (30) days of disclosure or (ii) clearly confidential in nature; provided that
      if
      there is any doubt as to whether or not the information is clearly confidential
      in nature, the receiving Party shall confirm its nature with the disclosing
      Party.

     

    (c) Confidential
      Information shall not include any information disclosed by a Party hereunder
      which (i) is already known to the receiving Party and which the receiving Party
      had in its rightful possession in written or physical embodiment prior to the
      Execution Date, unless such Confidential Information was previously disclosed
      by
      the receiving Party, (ii) is rightfully received by the receiving Party in
      the
      routine course of business from a third party who acquired such Confidential
      Information and the right to disclose same from the disclosing Party; (iii)
      is
      approved for release or publication by written authorization of the disclosing
      Party; or (iv) has become generally available to the public through no act
      of
      the receiving Party.

     

    13.2 Limitations
      on Use; Return of Information.
      Confidential Information of the other Party shall not be used by either Party
      for any purposes except those for which the information was disclosed by or
      derived from the disclosing Party. All Confidential Information disclosed to
      a
      Party hereunder is, and shall remain, the sole property of the disclosing Party.
      Upon termination or expiration of this Agreement, the receiving Party shall
      cease use of all Confidential Information, and shall promptly destroy or return
      to the disclosing Party, all such Confidential Information.

     

    13.3 Need
      to Know Basis.
      Each
      Party agrees that the Confidential Information received from the other Party
      shall be disclosed only to such of its respective employees and sales or service
      representatives that have a need to know about such Confidential Information
      for
      a use authorized by this Agreement. Each Party undertakes to bind its respective
      employees, officers, sales, technical, maintenance and service representatives,
      and other third parties to

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    13.4 
      whom
      Confidential Information is disclosed as permitted hereunder, to the terms
      and
      conditions contained herein.

     

    13.5 Ongoing
      Confidentiality Obligations.
      The
      obligations respecting Confidential Information imposed on each Party
      respectively shall continue during the term of this Agreement and for as long
      as
      such Party continues to hold any such Confidential Information of the other
      Party.

     

    13.6 Limitation
      of Rights.
      Unless
      otherwise specifically stated herein, this Agreement does not grant Suzuken
      any
      manufacturing, assembly, production, modification or licensing rights, or any
      rights in any patents, patent applications, trademarks, and trade names,
      copyrights or know-how of Given Japan.

     

    13.7 Injunctive
      Relief.
      Each
      party hereby acknowledges and agrees that in the event of its violation hereof
      the other Party shall be authorized and entitled to obtain from any court of
      competent jurisdiction, preliminary and permanent injunctive relief, which
      rights and remedies shall be cumulative and in addition to any other rights
      or
      remedies to which each Party shall be entitled under law or under this
      Agreement.

     

    14. Independent
      Contractors.
      The
      Parties are independent contractors. Nothing in this Agreement shall be
      construed to constitute the Parties as principal and agent, employer and
      employee, franchiser and franchisee, partners, joint venturers, corporate
      affiliates, co-owners or otherwise as participants in a joint
      undertaking.

     

    15. Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by either Party without the prior written consent of the other
      Party; provided that it is expressly agreed that Suzuken may assign this
      Agreement to its wholly-owned subsidiary, provided that (i) Suzuken shall remain
      jointly and severally liable for satisfaction of its obligations set forth
      in
      this Agreement and (ii) this Agreement shall automatically terminate in the
      event such subsidiary ceases to be a 100% owned and controlled by
      Suzuken.

     

    16. Disputes.

     

    16.1 Resolution
      of Disputes.
      The
      Parties will attempt to resolve all disputes arising out of or in connection
      with this Agreement (including any disagreement concerning the validity,
      enforceability or interpretation of this Agreement) through amicable and good
      faith discussions. If a dispute arises among the Parties then the senior
      management of each of the Parties shall engage in amicable and good faith
      discussions to attempt to resolve such dispute.

     

    16.2 Arbitration.
      In the
      event the Parties are unable within thirty (30) days to settle any dispute
      amicably as provided in Section 16.1, then, such dispute shall be finally
      determined under the Rules of Arbitration of the International Chamber of
      Commerce by a single arbitrator fluent in English. The place of such arbitration
      shall be London, England unless the claim as submitted, or subsequently amended,
      if accepted by the arbitrator shall have no direct or indirect effect on Given
      Imaging, other than in its capacity as a shareholder of Given Japan, in which
      case the arbitration may be in Tokyo, Japan. The language of the arbitration
      shall be English. Judgment upon an arbitral award rendered by the arbitrator
      may
      be entered in any court having jurisdiction.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    17. Miscellaneous.

     

    17.1 Governing
      Law and Language.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      Japan, without regard to its conflict of laws rules. The English language text
      of this Agreement shall be the only binding version. Any translation hereof
      shall have no legal effect.

     

    17.2 Publication,
      Press releases.
      Both
      Parties may release press releases that refer to the existence of an agreement
      between the Parties, without divulging the commercial details of the agreement,
      and subject to their respective confidentiality obligations to each other.
      Both
      Parties shall send the other Party a copy of any draft press release that refers
      to the other Party, for advance approval before release. Approvals will not
      be
      unreasonably withheld, and shall be provided on a timely basis.

     

    17.3 Recitals
      and Schedules.
      All
      Recitals and all Schedules attached to this Agreement constitute an integral
      part of this Agreement. The definitions of this Agreement shall apply to all
      Schedules.

     

    17.4 Headings.
      The
      headings of sections and subsections of this Agreement are inserted only for
      the
      purposes of convenience and they shall not be construed as to affect the scope,
      meaning or intent of the provisions of this Agreement or any part or portion
      thereof, nor shall they otherwise be given any legal effect.

     

    17.5 Notices.
      Any and
      all notices, requests, demands and other communications required or otherwise
      contemplated to be made under this Agreement shall be in writing and in English
      and Japanese and shall be provided by one or more of the following means and
      shall be deemed to have been duly given (i) if delivered personally, when
      received; (ii) if transmitted by facsimile, on the date of transmission with
      receipt of a transmittal confirmation; or (c) if by international courier
      service, on the fourth Business Day following the date of deposit with such
      courier service, or such earlier delivery date as may be confirmed in writing
      to
      the sender by such courier service. Unless otherwise instructed, all such
      notices, requests, demands and other communications shall be addressed to
      Parties at their addresses as follows:

     

    
      	 	
              (a)

            	
              if
                to the Suzuken, to

            

    

     

    Suzuken
      Co., Ltd.

    8
      HigashiKataha – machi

    Higashi-ku

    Nagoya,
      Aichi

    JAPAN.

    Facsimile:
      (81-52) 951-6696

    Attention:
      Senior General Manager, Business Development Department

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              if
                to the Company, to:

            

    

     

    Given
      Imaging K.K. 

    4-12,
      Hirakawacho 1-chome

    Chiyoda-ku,
      Tokyo

    JAPAN.

    Facsimile:
      (81-3) 5215-8765

    Attention:
      Representative Director

     

    with
      copy
      to:

     

    Given
      Imaging Ltd.

    New
      Industrial Park

    PO
      Box
      258

    Yoqueam
      20692, Israel

    Fax:
      972-4959-2466

    Attention:
      Yoram Ashery, Vice President - Business Development and Pablo Halpern, Vice
      President - Global Sales and Marketing

     

    17.6 No
      Waiver.
      Failure
      by either Party to enforce any provision of this Agreement will not be deemed
      a
      waiver of future enforcement of that or any other provision.

     

    17.7 Force
      Majeure.
      Neither
      Party shall be responsible for any failure to perform due to unforeseen
      circumstances or to causes beyond the Party's reasonable control, including
      but
      not limited to acts of God, war, riot, embargoes, acts of civil or military
      authorities, fire, floods, accidents, strikes, or shortages of transportation,
      facilities, fuel, energy, labor, or materials. In event of any such delay in
      delivery or payment, the Party in delay may defer the performance date for
      a
      period equal to the time of such delay, provided that the lack of liquidity
      by
      one Party shall not constitute a Force Majeure.

     

    17.8 Severability.
      If any
      provision of this Agreement is determined to be invalid or unenforceable, the
      provision shall be deemed to be severable from the remainder of this Agreement
      and shall not cause the invalidity or unenforceability of the remainder of
      this
      Agreement. The Parties shall make their best efforts in order to render
      effective such provisions of this Agreement not affected thereby and this
      Agreement will continue in full force and effect.

     

    17.9 Entire
      Agreement.
      This
      Agreement, including all supplements and Schedules constitutes the entire
      agreement between the Parties with respect to the subject matter hereof and
      supersedes all prior agreements, understanding or representations, oral or
      written between the Parties hereto regarding such matter.

     

    17.10 Amendments.
      This
      Agreement may be modified or amended only in writing, signed by duly authorized
      representatives of both Parties.

     

    17.11 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    17.12 Interpretation.
      (i) In
      this Agreement, unless the context requires otherwise, the singular shall
      include the plural and vice versa, and a reference to one gender shall include
      all genders; (ii) A "Section" is a reference to a Section of this Agreement;
      (iii) The words "including", "includes" and "include" shall be deemed to be
      followed by the words "without limitation" or "but not limited to" or words
      of
      similar import; (iv) The words "hereof", "herein" and "hereunder" and other
      words of similar import used in this Agreement refer to this Agreement as a
      whole and not to any particular part of this Agreement; (v) References to
      agreements (including, without limitation, this Agreement) and other contractual
      instruments shall be deemed to include all appendices, schedules, exhibits,
      annexes and attachments attached thereto and all subsequent amendments and
      other
      modifications to such agreements; (vi) References to Parties include their
      respective successors and permitted assigns; and (vii) Reference to a given
      applicable law is a reference to that law as amended or modified as of the
      date
      on which the reference is made.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of the
      Execution Date.

     

    
      	
              GIVEN IMAGING K.K.

            	 	
              SUZUKEN CO., LTD.

            
	 	 	 
	
              By:

            	
              /s/
                Hidemi Suzuki

            	 	
              By:

            	
              /s/
                Masami Kamiya

            
	
              Name:

            	
              Hidemi
                Suzuki

            	 	
              Name:

            	
              Masami
                Kamiya

            
	
              Title:

            	
              Representative
                Director

            	 	
              Title:

            	
              Director
                & Senior General Manager Headquarters of Corporate Planning
                Department, General Manager Corporate Planning
                Department

            
	 	 	 	 	 
	
              Acknowledged:

            	 	
              Acknowledged:

            
	
              GIVEN IMAGING LTD.

            	 	
              MARUBENI CORPORATION

            
	 	 	 
	
              By:

            	
              /s/
                Dr. Gavriel D. Meron

            	 	
              By:

            	
              /a/
                Hitoshi Sakamoto

            
	
              Name:

            	
              Dr.
                Gavriel D. Meron

            	 	
              Name:

            	
              Hitoshi
                Sakamoto

            
	
              Title:

            	
              President
                and Chief Executive Officer

            	 	
              Title:

            	
              Corporate
                Vice President, Executive Corporate Officer, Business Incubation
                Dept.

            
	 	 	 	 	 
	
              By:

            	
              /s/
                Pablo Halpern

            	 	 	 
	
              Name:

            	
              Pablo
                Halpern

            	 	 	 
	
              Title:

            	
              Vice
                President, Global Sales and Marketing

            	 	 	 

    

     

    [Signature
      Page to Distribution Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    Schedule
      A

    

    [***Redacted***]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Portions
      of this agreement have been omitted pursuant to a request for confidential
      treatment filed with the 

    Securities
      and Exchange Commission. The omissions have been indicated by
“[***Redacted***]”, and the 

    omitted
      text has been filed separately with the Securities and Exchange
      Commission.

     

    Schedule
      B

     

    [***Redacted***]ORTEC
        INTERNATIONAL, INC. 

       

      2006
        Stock Award and Incentive Plan 

       

      
        
          	
                  Purpose

                	
                  1

                
	
                  Definitions

                	
                  1

                
	
                  Administration

                	
                  3

                
	
                  Stock
                    Subject to Plan

                	
                  4

                
	
                  Eligibility;
                    Per-Person Award Limitations

                	
                  5

                
	
                  Specific
                    Terms of Awards

                	
                  5

                
	
                  Performance
                    Awards, Including Annual Incentive Awards

                	
                  9

                
	
                  Certain
                    Provisions Applicable to Awards

                	
                  12

                
	
                  Change
                    in Control

                	
                  13

                
	
                  General
                    Provisions

                	
                  16

                

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      ORTEC
        INTERNATIONAL, INC.

      

      2006
        Stock Award and Incentive Plan 

       

      1. Purpose.
        The
        purpose of this 2006 Stock Award and Incentive Plan (the “Plan”) is to aid Ortec
        International, Inc. a Delaware corporation (the “Company”), in attracting,
        retaining, motivating and rewarding employees (including executive officers
        and
        employee directors), non-employee directors, and other persons (including
        consultants and advisors) who provide substantial services to 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)

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

              

      

       

      
        	
              	(c)	
                “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
                  beneficiary designation filed with the Committee 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. 

              

      

       

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

              

      

       

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

              

      

       

      
        	
              	(f)	
                “Code”
                  means the Internal Revenue Code of 1986, as amended. References
                  to any
                  provision of the Code or regulation (including a proposed regulation)
                  thereunder shall include any successor provisions and
                  regulations.

              

      

       

      
        	
              	(g)	
                “Committee”
                  means a committee or sub-committee of two or more directors designated
                  by
                  the Board to administer the Plan; provided, however, that, directors
                  appointed or serving as members of such Board committee or sub-committee
                  designated as the Committee shall not be employees of the Company
                  or any
                  subsidiary or affiliate. In appointing members of such Committee
                  or
                  sub-committee, the Board will consider whether a member is or will
                  be a
                  Qualified Member, but such members are not required to be Qualified
                  Members at the time of appointment or during their term of service
                  on such
                  Committee or sub-committee. The full Board may perform any function
                  of
                  such Committee or sub-committee, in which case the term “Committee” shall
                  refer to the Board.

              

      

       

      
        	
              	(h)	
                “Covered
                  Employee” means an Eligible Person who is a Covered Employee as specified
                  in Section 10(j).

              

      

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      
        	 	
                (i)

              	
                “Deferred
                  Stock” means a right, granted to a Participant under Section 6(e), to
                  receive Stock or other Awards or a combination thereof at the end
                  of a
                  specified deferral period.

              

      

       

      
        	 	
                (j)

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

              

      

       

      
        	 	
                (k)

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

              

      

       

      
        	 	
                (l)

              	
                “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.

              

      

       

      
        	 	
                (m)

              	
                “Fair
                  Market Value” shall mean the amount determined by the Board or the
                  Committee, except that if the Stock is listed on a national securities
                  exchange (or traded on the over-the-counter market), the fair market
                  value
                  shall be the closing price of the Stock on such exchange (or market
                  as
                  reported by the National Quotation Bureau) on the day on which
                  an Award is
                  granted (or with respect to a Change in Control or other event
                  requiring
                  the valuation of the Stock, the closing price on the appropriate
                  date as
                  determined by the Board or Committee), or, if there is no trading
                  or
                  closing price on that day, the closing price on the most recent
                  day
                  preceding the day for which such prices are available.
                  

              

      

       

      
        	 	
                (n)

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

              

      

       

      
        	 	
                (o)

              	
                “Option”
                  means a right, granted to a Participant under Section 6(b), to
                  purchase
                  Stock or other Awards at a specified price during specified time
                  periods.
                  

              

      

       

      
        	 	
                (p)

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

              

      

       

      
        	 	
                (q)

              	
                “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.
                  

              

      

       

      
        	 	
                (r)

              	
                “Performance
                  Award” means a right, granted to a Participant under Sections 6(i)
                  and 7, to receive Awards or payments based upon performance criteria
                  specified by the Committee. 

              

      

       

      
        	 	
                (s)

              	
                “Qualified
                  Member” means a member of the Committee who is a “Non-Employee Director”
                  within the meaning of Rule 16b-3(b)(3) and an “outside director”
                  within the meaning of Regulation 1.162-27 under Code
                  Section 162(m). 

              

      

       

      
        	 	
                (t)

              	
                “Restricted
                  Stock” means Stock granted to a Participant under Section 6(c) that
                  is subject to certain restrictions and to a risk of forfeiture.
                  

              

      

       

      
        	 	
                (u)

              	
                “Rule 16b-3”
                  means Rule 16b-3, as from time to time in effect and applicable to
                  Participants, promulgated by the Securities and Exchange Commission
                  under
                  Section 16 of the Exchange Act. “Stock” means the Company’s Common
                  Stock, par value $.001 per share, and any other equity securities
                  of the
                  Company that may be substituted or resubstituted for Stock pursuant
                  to
                  Section 10(c). 

              

      

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      3. Administration.
        

       

      
        	 	
                (a)

              	
                Authority
                  of the Committee. The
                  Plan shall be administered by the Committee (subject to the Board’s
                  authority to restrict 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),
                  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 10(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 (authority with respect to other aspects
                  of
                  non-employee director awards is not exclusive to the Board,
                  however).

              

      

       

       

      
        	 	
                (b)

              	
                Manner
                  of Exercise of Committee Authority. At
                  any time that a member of the Committee is not a Qualified Member,
                  (i) any action of the Committee relating to an Award intended by the
                  Committee to qualify as “performance-based compensation” within the
                  meaning of Code Section 162(m) and regulations thereunder may be
                  taken by a subcommittee, designated by the Committee or the Board,
                  composed solely of two or more Qualified Members, and (ii) any action
                  relating to an Award granted or to be granted to a Participant
                  who is then
                  subject to Section 16 of the Exchange Act in respect of the Company
                  may be taken either by such a subcommittee or by the Committee
                  but with
                  each such member who is not a Qualified Member abstaining or recusing
                  himself or herself from such action, provided that, upon such abstention
                  or recusal, the Committee remains composed solely of two or more
                  Qualified
                  Members. Such action, authorized by such a subcommittee or by the
                  Committee upon the abstention or recusal of such non-Qualified
                  Member(s),
                  shall be the action of the Committee for purposes of the Plan.
                  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 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. Notwithstanding the foregoing,
                  no action
                  may be taken pursuant to this Section 3(b) if such action would
                  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 would cause Awards intended to qualify
                  as
                  “performance-based compensation” under Code Section 162(m) to fail to
                  so qualify.

              

      

       

      
        	 	
                (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.

              

      

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      4. Stock
        Subject to Plan.

       

      
        	 	
                (a)

              	
                Overall
                  Number of Shares Available for Delivery. Subject
                  to adjustment as provided in Section 10(c), the total number of
                  shares of Stock reserved and available for delivery in connection
                  with
                  Awards under the Plan shall be 6,000,000 shares. 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 adjustments if the number of shares
                  of Stock
                  actually delivered differs from the number of shares previously
                  counted in
                  connection with an Award. Shares subject to an Award that is canceled,
                  expired, forfeited, settled in cash or otherwise terminated without
                  a
                  delivery of shares to the Participant will again be available for
                  Awards,
                  and shares withheld in payment of the exercise price or taxes relating
                  to
                  an Award and shares equal to the number surrendered in payment
                  of any
                  exercise price or taxes relating to an Award shall be deemed to
                  constitute
                  shares not delivered to the Participant and shall be deemed to
                  again be
                  available for Awards under the Plan. In addition, in the case of
                  any Award
                  granted in substitution for an award of a company or business acquired
                  by
                  the Company or a subsidiary or affiliate, shares issued or issuable
                  in
                  connection with such substitute Award shall not be counted against
                  the
                  number of shares reserved under the Plan, but shall be available
                  under the
                  Plan by virtue of the Company’s assumption of the plan or arrangement of
                  the acquired company or business. This Section 4(b) shall apply to
                  the number of shares reserved and available for ISOs only to the
                  extent
                  consistent with applicable regulations relating to ISOs under the
                  Code.
                  

              

      

       

      5. Eligibility;
        Per-Person Award Limitations. Awards
        may be granted under the Plan only to Eligible Persons. For purposes of the
        Plan, an “Eligible Person” means an employee of the Company or any subsidiary or
        affiliate, including any executive officer, a non-employee director of the
        Company, a consultant, advisor or other person who provides substantial services
        to the Company or a subsidiary or affiliate, and 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. 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. 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).

       

      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
                  Section 10(e)), 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 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.
                  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 Eligible Persons on
                  the
                  following terms and conditions:

              

      

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      
        	 	
                (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
                  Sections 6(f) and 9(a).
                  

              

      

       

      
        	
              	(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 ISO 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
                  Section 10(k)), including, without limitation, cash, Stock, other
                  Awards or awards granted under other plans of the Company or any
                  subsidiary or affiliate, or other property (including notes and
                  other
                  contractual obligations of Participants to make payment on a deferred
                  basis, such as through “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 deferred delivery of shares representing
                  the
                  Option “profit,” at the election of the Participant or 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, including but not limited to the
                  requirement that no ISO shall be granted more than ten years after
                  the
                  Effective Date.  

              

      

       

      
        	 	
                (c)

              	
                Restricted
                  Stock. The
                  Committee is authorized to grant Restricted Stock to Eligible Persons
                  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.

              

      

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      
        	 	
                (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. 

              

      

       

      
        	 	
                (d)

              	
                Deferred
                  Stock. The
                  Committee is authorized to grant Deferred Stock to Eligible Persons,
                  which
                  are rights to receive Stock, other Awards, or a combination thereof
                  at the
                  end of a specified deferral period, 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 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 10(k)), 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.
                  

              

      

       

      
        	
              	(e)	
                Intentionally
                  omitted

              

      

       

      
        	 	
                (f)

              	
                Bonus
                  Stock and Awards in Lieu of Obligations. The
                  Committee is authorized to grant 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)

              	
                Other
                  Stock-Based Awards. The
                  Committee is authorized, subject to limitations under applicable
                  law, to
                  grant to Eligible Persons 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). 

              

      

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      
        	 	
                (h)

              	
                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. The
                  Committee is authorized to grant Performance Awards on the terms
                  and
                  conditions specified in this Section 7. 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 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
                  pre-established 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 Regulation 1.162-27 and successor
                  regulations thereto), 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.

              

      

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      
        	 	
                (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) growth in revenues or assets; (2) 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; (8) operating margin or gross
                  margin; (9) stock price or total stockholder return; and
                  (10) strategic business criteria, consisting of one or more
                  objectives based on securing financing needed for the Company’s
                  continuation or expansion of its business operations, environmental
                  or
                  safety standards, market penetration, geographic business expansion
                  goals,
                  cost targets, customer satisfaction, employee satisfaction, management
                  of
                  regulatory compliance and key departments such as accounting, employment
                  practices and employee benefits, supervision of litigation and
                  information
                  technology, and goals relating to acquisitions or divestitures
                  of
                  subsidiaries, affiliates or joint ventures. 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, but not limited to, 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 may
                  be based
                  on goals already achieved prior to the Award or on a goal 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. 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.

              

      

       

      
        	 	
                (v)

              	
                Settlement
                  of Performance Awards; Other Terms.
                  Settlement of such Performance Awards shall be in cash, Stock,
                  other
                  Awards or other property, in the Committee’s discretion. The Committee may
                  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 Section 7(b). 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 therefore its grant, exercise and/or settlement shall be contingent
                  upon achievement of pre-established performance goals and other
                  terms set
                  forth in this Section 7(c).

              

      

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      
        	 	
                (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, provided that the portion of
                  such pool
                  potentially payable to the Covered Employee shall be
                  pre-established.

              

      

       

      
        	 	
                (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 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. 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 (including a Change in Control) 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 Code Section 162(m). Specifically, the
                  Committee
                  shall certify in writing, in a manner conforming to applicable
                  regulations
                  under Code 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.

              

      

       

      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. 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
                  Section 10(k), the Committee may determine that, in granting a new
                  Award, the in-the-money value of any surrendered Award or award
                  may be
                  applied to reduce the exercise price of any Option or purchase
                  price 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
                  Section 6(b)(ii).

              

      

       

      
        	 	
                (c)

              	
                Form
                  and Timing of Payment under Awards; Deferrals.
                  Subject to the terms of the Plan (including Section 10(k)) 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 Committee’s discretion or upon occurrence of one or
                  more specified events (subject to Section 10(k)). Installment or
                  deferred payments may be required by the Committee (subject to
                  Section 10(e)) or permitted at Participant’s election 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.

              

      

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      
        	 	
                (d)

              	
                Exemptions
                  from Section 16(b) Liability. With
                  respect to a Participant who is then subject to the reporting requirements
                  of Section 16(a) of the Exchange Act in respect of the Company, the
                  Committee shall implement transactions under the Plan and administer
                  the
                  Plan in a manner that will ensure that each transaction with respect
                  to
                  such a Participant is exempt from liability under Rule 16b-3 (or
                  otherwise not subject to liability under Section 16(b)), except that
                  this provision shall not limit sales by such a Participant, and
                  such a
                  Participant may engage in other non-exempt transactions under the
                  Plan.
                  The Committee may authorize the Company to repurchase any Award
                  or shares
                  of Stock deliverable or delivered in connection with any Award
                  (subject to
                  Section 10(k)) to avoid a Participant who is subject to
                  Section 16 of the Exchange Act incurring liability under
                  Section 16(b). Unless otherwise specified by the Participant, equity
                  securities or derivative securities acquired under the Plan which
                  are
                  disposed of by a Participant shall be deemed to be disposed of
                  in the
                  order acquired by the Participant. 

              

      

       

      
        	 	
                (e)

              	
                Loan
                  Provisions.
                  With the Committee’s consent, and subject at all times to, and only to the
                  extent, if any, permitted under and in accordance with, laws and
                  regulations and other binding obligations or provisions applicable
                  to the
                  Company, the Company may make, guarantee, or arrange for a loan
                  or loans
                  to a Participant with respect to the exercise of any Option or
                  other
                  payment in connection with any Award, including the payment by
                  a
                  Participant of any or all federal, state, or local income or other
                  taxes
                  due in connection with any Award. Subject to such limitations,
                  the
                  Committee shall have full authority to decide whether to make a
                  loan or
                  loans hereunder and to determine the amount, terms, and provisions
                  of any
                  such loan or loans, including the interest rate, if any, to be
                  charged in
                  respect of any such loan or loans, whether the loan or loans are
                  to be
                  with or without recourse against the borrower, the terms on which
                  the loan
                  is to be repaid and conditions, if any, under which the loan or
                  loans may
                  be forgiven.

              

      

       

      9. Change
        in Control.

       

      
        	 	
                (a)

              	
                Effect
                  of “Change in Control” on Non-Performance Based Awards.
                  The Committee may provide in the Award document, 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):

              

      

       

      
        	 	
                (i)

              	
                All
                  deferral of settlement, 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 deferral and vesting conditions, except to the extent
                  of any
                  waiver by the Participant or other express election to defer beyond
                  a
                  Change in Control and subject to applicable restrictions set forth
                  in
                  Section 10(a);

              

      

       

      
        	 	
                (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 shall remain exercisable and vested for the
                  balance
                  of the stated term of such Award without regard to any termination
                  of
                  employment or service by the Participant other than a termination
                  for
                  “cause” (as defined in any employment or severance agreement between the
                  Company or a subsidiary or affiliate and the Participant then in
                  effect
                  or, if none, as defined by the Committee and in effect at the time
                  of the
                  Change in Control), subject only to applicable restrictions set
                  forth in
                  Section 10(a); and 

              

      

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      
        	
              	(iii)	
                The
                  Committee may, in its discretion, determine to extend to any Participant
                  who holds an Option the right to elect, during the 60-day period
                  immediately following the Change in Control, in lieu of acquiring
                  the
                  shares of Stock covered by such Option, to receive in cash the
                  excess of
                  the Change in Control Price over the exercise price of such Option,
                  multiplied by the number of shares of Stock covered by such Option,
                  and to
                  extend to any Participant who holds other types of Awards denominated
                  in
                  shares the right to elect, during the 60-day period immediately
                  following
                  the Change in Control, in lieu of receiving the shares of Stock
                  covered by
                  such Award, to receive in cash the Change in Control Price multiplied
                  by
                  the number of shares of Stock covered by such
                  Award.

              

      

       

      
        	 	
                (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 will be deemed to be met if and
                  to the
                  extent so provided by the Committee in the Award document governing
                  such
                  Award or other agreement with the
                  Participant.

              

      

       

      
        	 	
                (c)

              	
                Definition
                  of “Change in Control.”
                  A
                  “Change in Control” shall be deemed to have occurred if, after the
                  Effective Date, there shall have occurred any of the following:
                  

              

      

       

      
        	
              	(i)	
                any
                  Person (other than the Company), any trustee or other fiduciary
                  holding
                  securities under any employee benefit plan of the Company, or any
                  company
                  owned, directly or indirectly, by the stockholders of the Company
                  immediately prior to the occurrence with respect to which the evaluation
                  is being made in substantially the same proportions as their ownership
                  of
                  the common stock of the Company) becomes the Beneficial Owner (except
                  that
                  a Person shall be deemed to be the Beneficial Owner of all shares
                  that any
                  such Person has the right to acquire pursuant to any agreement
                  or
                  arrangement or upon exercise of conversion rights, warrants or
                  options or
                  otherwise, without regard to the sixty day period referred to in
                  Rule 13d-3 under the Exchange Act), directly or indirectly, of
                  securities of the Company or any Significant Subsidiary (as defined
                  below), representing 30% of the combined voting power of the Company’s or
                  such subsidiary’s then outstanding securities;

              

      

       

      
        	 	
                (ii)

              	
                during
                  any period of two consecutive years, individuals who at the beginning
                  of
                  such period constitute the Board, and any new director (other than
                  a
                  director designated by a person who has entered into an agreement
                  with the
                  Company to effect a transaction described in clause (i), (iii),
                  or
                  (iv) of this paragraph) whose election by the Board or nomination for
                  election by the Company’s stockholders was approved by a vote of at least
                  two-thirds of the directors then still in office who either were
                  directors
                  at the beginning of the two-year period or whose election or nomination
                  for election was previously so approved but excluding for this
                  purpose any
                  such new director whose initial assumption of office occurs as
                  a result of
                  either an actual or threatened election contest (as such terms
                  are used in
                  Rule 14a-11 of Regulation 14A promulgated under the Exchange
                  Act) or other actual or threatened solicitation of proxies or consents
                  by
                  or on behalf of an individual, corporation, partnership, group,
                  associate
                  or other entity or Person other than the Board, cease for any reason
                  to
                  constitute at least a majority of the Board;

              

      

       

      
        	 	
                (iii)

              	
                the
                  consummation of a merger or consolidation of the Company or any
                  subsidiary
                  owning directly or indirectly all or substantially all of the consolidated
                  assets of the Company (a “Significant Subsidiary”) with any other entity,
                  other than a merger or consolidation which would result in the
                  voting
                  securities of the Company or a Significant Subsidiary outstanding
                  immediately prior thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of the
                  surviving
                  or  resulting entity) more than 50% of the combined voting power of
                  the surviving or resulting entity outstanding immediately after
                  such
                  merger or consolidation; or

              

      

       

      
        	 	
                (iv)

              	
                the
                  stockholders of the Company approve a plan or agreement for the
                  sale or
                  disposition of all or substantially all of the consolidated assets
                  of the
                  Company (other than such a sale or disposition immediately after
                  which
                  such assets will be owned directly or indirectly by the Company’s
                  stockholders in substantially the same proportions as their ownership
                  of
                  the Company’s common stock immediately prior to such sale or disposition)
                  in which case the Board shall determine the effective date of the
                  Change
                  in Control resulting therefrom.

              

      

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      For
        purposes of this definition: 

       

      
        	 	
                (A)

              	
                The
                  term “Beneficial Owner” shall have the meaning ascribed to such term in
                  Rule 13d-3 under the Exchange Act (including any successor to such
                  Rule).

              

      

      

      
        	 	
                (B)

              	
                The
                  term “Person” shall have the meaning ascribed to such term in
                  Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
                  and 14(d) thereof, including “group” as defined in Section 13(d)
                  thereof. 

              

      

       

      
        	 	
                (d)

              	
                Definition
                  of “Change in Control Price.”
                  The “Change in Control Price” means an amount in cash equal to the higher
                  of (i) the amount of cash and fair market value of property that is
                  the highest price per share paid (including extraordinary dividends)
                  in
                  any transaction triggering the Change in Control or any liquidation
                  of
                  shares following a sale of substantially all assets of the Company,
                  or
                  (ii) the highest Fair Market Value per share at any time during the
                  60-day period preceding and 60-day period following the Change
                  in Control.
                  

              

      

       

      10. General
        Provisions.

       

      
        	 	
                (a)

              	
                Compliance
                  with Legal and Other Requirements.
                  The Company may, to the extent deemed necessary or advisable by
                  the
                  Committee, 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.

              

      

       

      
        	 	
                (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) may be transferred to one or more transferees during the
                  lifetime of
                  the Participant, 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, subject to any terms and conditions
                  which
                  the Committee may impose thereon (including 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.
                  

              

      

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      
        	 	
                (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 under the Plan, then
                  the
                  Committee shall, in such manner as it may deem equitable, adjust
                  any or
                  all of (i) the number and kind of shares of Stock which may be
                  delivered in connection with Awards granted thereafter, (ii) the
                  number and kind of shares of Stock by which annual per-person Award
                  limitations are measured under 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 10(k)). 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
                  or Performance Awards granted under Section 7 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 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. 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. 

              

      

       

      
        	 	
                (ii)

              	
                Requirement
                  of Notification of Code Section 83(b) Election.
                  If
                  any Participant shall make an 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, such 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. 

              

      

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      
        	 	
                (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 Incentive Stock Option under the
                  circumstances described in Code Section 421(b) (relating to certain
                  disqualifying dispositions), 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 after
                  the date of such Board action if such stockholder approval is required
                  by
                  any federal or state law or regulation or the rules of any stock
                  exchange
                  or automated quotation system on which the Stock may then be listed
                  or
                  quoted, and the Board may otherwise, in its discretion, determine
                  to
                  submit other amendments to the Plan to stockholders for approval;
                  and
                  provided further, that, without the consent of an affected Participant,
                  no
                  such Board action may have a material adverse affect on the rights
                  of such
                  Participant under any outstanding Award.

              

      

       

      
        	 	
                (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, 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 10(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.
                  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 granted to Covered
                  Employees
                  and other Awards designated as Awards to Covered Employees subject
                  to
                  Section 7 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. 

              

      

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      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 Relating to Accounting Treatment of Awards.
                  Other provisions of the Plan notwithstanding, the Committee’s authority
                  under the Plan is limited to the extent necessary to ensure that
                  any
                  Option or other Award of a type that the Committee has intended
                  to be
                  subject to fixed accounting with a measurement date at the date
                  of grant
                  or the date performance conditions are satisfied under APB 25 shall
                  not
                  become subject to “variable” accounting solely due to the existence of
                  such authority, unless the Committee specifically determines that
                  the
                  Award shall remain outstanding despite such “variable”
                  accounting.

              

      

       

      
        	 	
                (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 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 10(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) of the Exchange Act
                  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,
                  (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, neither the
                  Plan nor
                  any Award document shall confer on any person other than the Company
                  and
                  the Participant any rights or remedies thereunder.
                  

              

      

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

      
        	 	
                (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. 

              

      

       

      
        	 	
                (p)

              	
                Plan
                  Effective Date and Termination.
                  The Plan shall become effective if, and at such time as, it is
                  adopted by
                  the Board and the Board recommends approval of the Plan at the
                  next
                  meeting of the Company’s stockholders. Unless earlier terminated by action
                  of the Board, 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. 

              

      

       

      
        	 	
                (q)

              	
                Repricing.
                  No
                  award that could be characterized as a “repricing” shall be made pursuant
                  to this Plan without shareholder
                  approval.

              

      

       

      
        
           

        

        
          -16-

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