Document:

Exhibit 10.13

 

CONSONUS TECHNOLOGIES,
INC.

 

2007 INCENTIVE
COMPENSATION PLAN

 

 

CONSONUS TECHNOLOGIES, INC.

 

2007
INCENTIVE COMPENSATION PLAN

 

	
  1.

  	
  Purpose

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Administration

  	
  6

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Shares Subject to Plan

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Eligibility; Per-Person Award
  Limitations

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Specific Terms of Awards

  	
  8

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Certain Provisions Applicable
  to Awards

  	
  13

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Code Section 162(m)
  Provisions

  	
  15

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Change in Control

  	
  16

  
	
   

  	
   

  	
   

  
	
  10.

  	
  General Provisions

  	
  18

  

 

 

CONSONUS TECHNOLOGIES, INC.

 

2007
INCENTIVE COMPENSATION PLAN

 

1.             Purpose.  The purpose
of this CONSONUS TECHNOLOGIES, INC. 2007 INCENTIVE COMPENSATION PLAN (the “Plan”)
is to assist CONSONUS TECHNOLOGIES, INC., a Delaware corporation (the “Company”)
and its Related Entities (as hereinafter defined) in attracting, motivating,
retaining and rewarding high-quality executives and other employees, officers,
directors, consultants and other persons who provide services to the Company or
its Related Entities by enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company’s shareholders, and providing
such persons with performance incentives to expend their maximum efforts in the
creation of shareholder value.

 

2.             Definitions.  For purposes
of the Plan, the following terms shall be defined as set forth below, in
addition to such terms defined in Section 1 hereof.

 

(a)           “Award” means any Option, Stock
Appreciation Right, Restricted Stock Award, Deferred Stock Award, Share granted
as a bonus or in lieu of another Award, Dividend Equivalent, Other Stock-Based
Award or Performance Award, together with any other right or interest, granted
to a Participant under the Plan.

 

(b)           “Award Agreement” means any written
agreement, contract or other instrument or document evidencing any Award
granted by the Committee hereunder.

 

(c)           “Beneficiary” means the person,
persons, trust or trusts that have been designated by a Participant in his or
her most recent written beneficiary designation filed with the Committee to
receive the benefits specified under the Plan upon such Participant’s death or
to which Awards or other rights are transferred if and to the extent permitted
under Section 10(b) hereof. If, upon a Participant’s death, there is no
designated Beneficiary or surviving designated Beneficiary, then the term
Beneficiary means the person, persons, trust or trusts entitled by will or the
laws of descent and distribution to receive such benefits.

 

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

 

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

 

(f)            “Cause” shall, with respect to any
Participant, have the meaning specified in the Award Agreement. In the absence
of any definition in the Award Agreement, “Cause” shall have the equivalent
meaning or the same meaning as “cause” or “for cause” set forth in any
employment, consulting, or other agreement for the performance of services
between the Participant and the Company or a Related Entity or, in the absence
of any such agreement or any such definition in such agreement, such term shall
mean (i) the failure by the Participant to perform, in a reasonable manner, his
or her duties as assigned by the Company or a Related Entity, (ii) any
violation or breach by the Participant of his or her employment, consulting or
other similar agreement with the Company or a Related Entity, if any, (iii) any
violation or

 

 

breach by the
Participant of any non-competition, non-solicitation, non-disclosure and/or
other similar agreement with the Company or a Related Entity, (iv) any act by
the Participant of dishonesty or bad faith with respect to the Company or a
Related Entity, (v) use of alcohol, drugs or other similar substances in a
manner that adversely affects the Participant’s work performance, or (vi) the
commission by the Participant of any act, misdemeanor, or crime reflecting
unfavorably upon the Participant or the Company or any Related Entity. The good
faith determination by the Committee of whether the Participant’s Continuous
Service was terminated by the Company for “Cause” shall be final and binding
for all purposes hereunder.

 

(g)           “Change in Control” means a Change in
Control as defined in Section 9(b) of the Plan.

 

(h)           “Code” means the Internal Revenue
Code of 1986, as amended from time to time, including regulations thereunder
and successor provisions and regulations thereto.

 

(i)            “Committee” means a committee
designated by the Board to administer the Plan; provided, however, that if the
Board fails to designate a committee or if there are no longer any members on
the committee so designated by the Board, then the Board shall serve as the
Committee. In the event that the Company becomes a Publicly Held Corporation
(as hereinafter defined), then the Committee shall consist of at least two
directors, and each member of the Committee shall be (i) a “non-employee
director” within the meaning of  Rule
16b-3 (or any successor rule) under the Exchange Act, unless administration of
the Plan by “non-employee directors” is not then required in order for
exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and (iii) “Independent”.

 

(j)            “Consultant” means any person (other
than an Employee or a Director, solely with respect to rendering services in
such person’s capacity as a director) who is engaged by the Company or any
Related Entity to render consulting or advisory services to the Company or such
Related Entity.

 

(k)           “Continuous Service” means the
uninterrupted provision of services to the Company or any Related Entity in any
capacity of Employee, Director, Consultant or other service provider. Continuous
Service shall not be considered to be interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related
Entities, or any successor entities, in any capacity of Employee, Director,
Consultant or other service provider, or (iii) any change in status as long as
the individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director, Consultant or other service provider (except as
otherwise provided in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized personal leave.

 

(l)            “Deferred Stock” means a right to
receive Shares, including Restricted Stock, cash measured based upon the value
of Shares or a combination thereof, at the end of a specified deferral period.

 

(m)          “Deferred Stock Award” means an Award
of Deferred Stock granted to a Participant under Section 6(e) hereof.

 

2

 

(n)           “Director” means a member of the
Board or the board of directors of any Related Entity.

 

(o)           “Disability” means a permanent and
total disability (within the meaning of Section 22(e) of the Code), as
determined by a medical doctor satisfactory to the Committee.

 

(p)           “Dividend Equivalent” means a right,
granted to a Participant under Section 6(g) hereof, to receive cash, Shares,
other Awards or other property equal in value to dividends paid with respect to
a specified number of Shares, or other periodic payments.

 

(q)           “Effective Date” means the effective
date of the Plan, which shall be January 2, 2007.

 

(r)            “Eligible Person” means each officer,
Director, Employee, Consultant and other person who provides services to the
Company or any Related Entity. The foregoing notwithstanding, only employees of
the Company, or any parent corporation or subsidiary corporation of the Company
(as those terms are defined in Sections 424(e) and (f) of the Code,
respectively), shall be Eligible Persons for purposes of receiving any
Incentive Stock Options. An Employee on leave of absence may be considered as
still in the employ of the Company or a Related Entity for purposes of
eligibility for participation in the Plan.

 

(s)           “Employee” means any person,
including an officer or Director, who is an employee of the Company or any
Related Entity. The payment of a director’s fee by the Company or a Related
Entity shall not be sufficient to constitute “employment” by the Company.

 

(t)            “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, including rules thereunder
and successor provisions and rules thereto.

 

(u)           “Fair Market Value” means the fair
market value of Shares, Awards or other property as determined by the
Committee, or under procedures established by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of a Share as of any given
date after which the Company is a Publicly Held Corporation shall be the
closing sale price per Share reported on a consolidated basis for stock listed
on the principal stock exchange or market on which Shares are traded on the
date immediately preceding the date as of which such value is being determined
or, if there is no sale on that date, then on the last previous day on which a
sale was reported.

 

(v)           “Good Reason” shall, with respect to
any Participant, have the meaning specified in the Award Agreement. In the
absence of any definition in the Award Agreement, “Good Reason” shall have the
equivalent meaning or the same meaning as “good reason” or “for good reason” set
forth in any employment, consulting or other agreement for the performance of
services between the Participant and the Company or a Related Entity or, in the
absence of any such agreement or any such definition in such agreement, such
term shall mean (i) the assignment to the Participant of any duties
inconsistent in any material respect with the Participant’s duties or
responsibilities as assigned by the Company or a Related Entity, or any other
action by the Company or a Related Entity which results in a material
diminution in such duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent

 

3

 

action not
taken in bad faith and which is remedied by the Company or a Related Entity
promptly after receipt of notice thereof given by the Participant; (ii) any
material failure by the Company or a Related Entity to comply with its
obligations to the Participant as agreed upon, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company or a Related Entity promptly after receipt of notice
thereof given by the Participant; or (iii) the Company’s or Related Entity’s
requiring the Participant to be based at any office or location outside of
fifty miles from the location of employment or service as of the date of Award,
except for travel reasonably required in the performance of the Participant’s
responsibilities.

 

(w)          “Incentive Stock Option” means any
Option intended to be designated as an incentive stock option within the
meaning of Section 422 of the Code or any successor provision thereto.

 

(x)            “Independent”, when referring to
either the Board or members of the Committee, shall have the same meaning as
used in the rules of the national securities exchange on which any securities
of the Company are listed for trading, and if not listed for trading, by the
rules of the Nasdaq Stock Market.

 

(y)           “Incumbent Board” means the Incumbent
Board as defined in Section 9(b)(ii) of the Plan.

 

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

 

(aa)         “Optionee” means a person to whom an
Option is granted under this Plan or any person who succeeds to the rights of
such person under this Plan.

 

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

 

(cc)         “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.

 

(dd)         “Performance Award” shall mean any
Award of Performance Shares or Performance Units granted pursuant to Section
6(h).

 

(ee)         “Performance Period” means that
period established by the Committee at the time any Performance Award is
granted or at any time thereafter during which any performance goals specified
by the Committee with respect to such Award are to be measured.

 

(ff)           “Performance Share” means any grant
pursuant to Section 6(h) of a unit valued by reference to a designated number
of Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including cash, Shares, other
property, or any combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the
time of such grant or thereafter.

 

4

 

(gg)         “Performance Unit” means any grant
pursuant to Section 6(h) of a unit valued by reference to a designated amount
of property (including cash) other than Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including cash, Shares, other property, or any combination thereof, upon
achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.

 

(hh)         “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, and shall include a “group” as defined in
Section 13(d) thereof.

 

(ii)           “Publicly Held Corporation” shall
mean a publicly held corporation as that term is used under Section 162(m)(2)
of the Code.

 

(jj)           “Related Entity” means any
Subsidiary, and any business, corporation, partnership, limited liability
company or other entity designated by the Board, in which the Company  or a Subsidiary holds a  substantial ownership interest, directly or
indirectly.

 

(kk)         “Restricted Stock” means any Share
issued with the restriction that the holder may not sell, transfer, pledge or
assign such Share and with such risks of forfeiture and other restrictions as
the Committee, in its sole discretion, may impose (including any restriction on
the right to vote such Share and the right to receive any dividends), which
restrictions may lapse separately or in combination at such time or times, in
installments or otherwise, as the Committee may deem appropriate.

 

(ll)           “Restricted Stock Award” means an
Award granted to a Participant under Section 6(d) hereof.

 

(mm)       “Rule 16b-3” means Rule 16b-3, as
from time to time in effect and applicable to the Plan and Participants,
promulgated by the Securities and Exchange Commission under Section 16 of
the Exchange Act.

 

(nn)         “Shares” means the shares of common
stock of the Company, par value $0.000001 per share, and such other securities
as may be substituted (or resubstituted) for Shares pursuant to Section 10(c)
hereof.

 

(oo)         “Stock Appreciation Right” means a
right granted to a Participant under Section 6(c) hereof.

 

(pp)         “Subsidiary” means any corporation or
other entity in which the Company has a direct or indirect ownership interest
of 50% or more of the total combined voting power of the then outstanding
securities or interests of such corporation or other entity entitled to vote
generally in the election of directors or in which the Company has the right to
receive 50% or more of the distribution of profits or 50% or more of the assets
on liquidation or dissolution.

 

(qq)         “Substitute Awards” means Awards
granted or Shares issued by the Company in assumption of, or in substitution or
exchange for, Awards previously granted, or the

 

5

 

right or
obligation to make future Awards, by a company acquired by the Company or any
Related Entity or with which the Company or any Related Entity combines.

 

3.             Administration.

 

(a)           Authority of the Committee.  The Plan shall be administered by
the Committee, provided, however, that except as otherwise expressly provided
in this Plan, the Board may exercise any power or authority granted to the
Committee under this Plan and in that case, references herein shall be deemed
to include references to the Board. The Committee shall have full and final
authority, subject to and consistent with the provisions of the Plan, to select
Eligible Persons to become Participants, grant Awards, determine the type,
number and other terms and conditions of, and all other matters relating to,
Awards, prescribe Award Agreements (which need not be identical for each
Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award Agreements 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. In exercising any discretion granted to the
Committee under the Plan or pursuant to any Award, the Committee shall not be
required to follow past practices, act in a manner consistent with past
practices, or treat any Eligible Person or Participant in a manner consistent
with the treatment of other Eligible Persons or Participants.

 

(b)           Manner
of Exercise of Committee Authority.   In the event that the Company
becomes a Publicly Held Corporation, the Committee, and not the Board, shall
exercise sole and exclusive discretion on any matter relating to a Participant
then subject to Section 16 of the Exchange Act with respect to the Company
to the extent necessary in order that transactions by such Participant shall be
exempt under Rule 16b-3 under the Exchange Act. Any action of the Committee
shall be final, conclusive and binding on all persons, including the Company,
its Related Entities, Participants, Beneficiaries, transferees under Section
10(b) hereof or other persons claiming rights from or through a Participant,
and shareholders. 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 Related Entity, or committees thereof, the
authority, subject to such terms as the Committee shall determine, to perform
such functions, including administrative functions as the Committee may
determine to the extent that such delegation will not result in the loss of an
exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to
Section 16 of the Exchange Act in respect of the Company and will not cause
Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) to fail to so qualify. The Committee may appoint agents to
assist it in administering the Plan.

 

(c)           Limitation of Liability.  The Committee and the Board, and each member
thereof, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other agents assisting in
the administration of the Plan. Members of the Committee and the Board, and any
officer or Employee acting at the direction or on behalf of the Committee or
the Board, shall not be personally liable for any action or determination taken
or

 

6

 

made
in good faith with respect to the Plan, and shall, to the extent permitted by
law, be fully indemnified and protected by the Company with respect to any such
action or determination.

 

4.             Shares
Subject to Plan.

 

(a)           Limitation on Overall Number of Shares Available for Delivery Under
Plan.  Subject to adjustment as provided in Section
10(c) hereof, the total number of Shares reserved and available for delivery
under the Plan shall be 550,000. Any Shares delivered under the Plan may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.

 

(b)           Application of Limitation to Grants of
Award.  No Award may be granted if the
number of Shares to
be delivered in connection with such an Award or, in the case of an Award
relating to Shares but settled only in cash (such as cash-only Stock
Appreciation Rights), the number of Shares to which such Award relates, exceeds
the number of Shares remaining available for delivery under the Plan, minus the
number of Shares deliverable in settlement of or relating to then outstanding
Awards. 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
actually delivered differs from the number of Shares previously counted in
connection with an Award.

 

(c)           Availability
of Shares Not Delivered under Awards and Adjustments to Limits.

 

(i)            If any Shares subject to an Award are
forfeited, expire or otherwise terminate without issuance of such Shares, or
any Award is settled for cash or otherwise does not result in the issuance of all
or a portion of the Shares subject to such Award, the Shares shall, to the
extent of such forfeiture, expiration, termination, cash settlement or
non-issuance, again be available for Awards under the Plan, subject to Section
4(c)(v) below.

 

(ii)           In the event that any Option or other Award
granted hereunder is exercised through the tendering of Shares (either actually
or by attestation) or by the withholding of Shares by the Company, or
withholding tax liabilities arising from such option or other award are
satisfied by the tendering of Shares (either actually or by attestation) or by
the withholding of Shares by the Company, then only the number of Shares issued
net of the Shares tendered or withheld shall be counted for purposes of  determining the maximum number of Shares available for
grant under the Plan.

 

(iii)          Substitute Awards shall not reduce the Shares
authorized for grant under the Plan or authorized for grant to a Participant in
any period. Additionally, in the event that a company acquired by the Company
or any Related Entity or with which the Company or any Related Entity combines
has shares available under a pre-existing plan approved by shareholders and not
adopted in contemplation of such acquisition or combination, the shares
available for delivery pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or
combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for
Awards under the Plan and shall not reduce the Shares authorized for delivery
under the Plan.

 

7

 

(iv)          Any Shares that again become available for
delivery pursuant to this Section 4(c) shall be added back as one (1) Share.

 

(v)           Notwithstanding anything in this Section
4(c) to the contrary but subject to adjustment as provided in Section 10(c)
hereof, the maximum aggregate number of Shares that may be issued under the
Plan as a result of the exercise of the Incentive Stock Options shall be
550,000 shares.

 

5.             Eligibility; Per-Person
Award Limitations.  Awards may be granted under the Plan only to
Eligible Persons. Subject to adjustment as provided in Section 10(c), in any
fiscal year of the Company during any part of which the Plan is in effect, no
Participant may be granted (i) Options or Stock Appreciation Rights with
respect to more than 220,000 Shares or (ii) Restricted Stock, Deferred Stock,
Performance Shares and/or Other Stock-Based Awards with respect to more than
220,000 Shares. In addition, the maximum dollar value payable to any one
Participant with respect to Performance Units is (x) $1,000,000 with respect to
any 12 month Performance Period (pro-rated for any Performance Period that is
less than 12 months based upon the ratio of the number of days in the
Performance Period as compared to 365), and (y) with respect to any Performance
Period that is more than 12 months, $2,000,000.

 

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
the Participant’s Continuous Service and terms permitting a Participant to make
elections relating to his or her Award. The Committee shall retain full power
and discretion to accelerate, waive or modify, at any time, any term or
condition of an Award that is not mandatory under the Plan. Except in cases in
which the Committee is authorized to require other forms of consideration under
the Plan, or to the extent other forms of consideration must be paid to satisfy
the requirements of Delaware law, no consideration other than services may be
required for the grant (as opposed to the exercise) of any Award.

 

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

 

(i)            Exercise Price.  Other
than in connection with Substitute Awards, the exercise price per Share
purchasable under an Option shall be determined by the Committee, provided that
such exercise price shall not, in the case of Incentive Stock Options, be less
than 100% of the Fair Market Value of a Share on the date of grant of the
Option and shall not, in any event, be less than the par value of a Share on
the date of grant of the Option. If an Employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company (or any parent corporation or subsidiary corporation of the Company, as
those terms are defined in Sections 424(e) and (f) of the Code, respectively)
and an Incentive Stock Option is granted to such employee, the exercise price
of such Incentive Stock Option (to the extent required by the

 

8

 

Code at the time of grant) shall be no less than 110% of the Fair
Market Value a Share on the date such Incentive Stock Option is granted.

 

(ii)           Time and
Method of Exercise.  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 time
or times at which Options shall cease to be or become exercisable following
termination of Continuous Service or upon other conditions, the methods by
which the exercise price may be paid or deemed to be paid (including in the
discretion of the Committee a cashless exercise procedure), the form of such
payment, including, without limitation, cash, Shares (including without
limitation the withholding of Shares otherwise deliverable pursuant to the
Award), other Awards or awards granted under other plans of the Company or a
Related Entity, or other property (including notes or other contractual
obligations of Participants to make payment on a deferred basis provided that
such deferred payments are not in violation of the Sarbanes-Oxley Act of 2002,
or any rule or regulation adopted thereunder or any other applicable law), and
the methods by or forms in which Shares will be delivered or deemed to be
delivered to Participants.

 

(iii)          Incentive Stock Options.
 The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Section 422 of the Code. Anything in the Plan to the contrary notwithstanding,
no term of the Plan relating to Incentive Stock Options (including any Stock
Appreciation Right issued in tandem therewith) shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any Incentive Stock Option under
Section 422 of the Code, unless the Participant has first requested, or
consents to, the change that will result in such disqualification. Thus, if and
to the extent required to comply with Section 422 of the Code, Options granted
as Incentive Stock Options shall be subject to the following special terms and
conditions:

 

(A)          the Option shall not be exercisable more than
ten years after the date such Incentive Stock Option is granted; provided,
however, that if a Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company (or any parent corporation
or subsidiary corporation of the Company, as those terms are defined in
Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock
Option is granted to such Participant, the term of the Incentive Stock Option
shall be (to the extent required by the Code at the time of the grant) for no
more than five years from the date of grant; and

 

(B)           The aggregate Fair Market Value (determined
as of the date the Incentive Stock Option is granted) of the Shares with
respect to which Incentive Stock Options granted under the Plan and all other
option plans of the Company (and any parent corporation or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e) and
(f) of the Code, respectively) that become exercisable for the first time by
the Participant during any calendar year shall not (to the extent required by
the Code at the time of the grant) exceed $100,000.

 

9

 

(c)           Stock Appreciation Rights.  The Committee may grant Stock Appreciation
Rights to any Eligible Person in conjunction with all or part of any Option
granted under the Plan or at any subsequent time during the term of such Option
(a “Tandem Stock Appreciation Right”), or without regard to any Option (a “Freestanding
Stock Appreciation Right”), in each case upon such terms and conditions as the
Committee may establish in its sole discretion, not inconsistent with the
provisions of the Plan, including the following:

 

(i)            Right to Payment.
 A Stock Appreciation Right shall confer
on the Participant to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one Share on the date of exercise
over (B) the grant price of the Stock Appreciation Right as determined by the
Committee. The grant price of a Stock Appreciation Right  shall not be less than the Fair Market Value
of a Share on the date of grant, in the case of a Freestanding Stock
Appreciation Right, or less than the associated Option exercise price, in the
case of a Tandem Stock Appreciation Right.

 

(ii)           Other Terms.
 The Committee shall determine at the
date of grant or thereafter, the time or times at which and the circumstances
under which a Stock Appreciation Right may be exercised in whole or in part
(including based on achievement of performance goals and/or future service
requirements), the time or times at which Stock Appreciation Rights shall cease
to be or become exercisable following termination of Continuous Service or upon
other conditions, the method of exercise, method of settlement, form of
consideration payable in settlement, method by or forms in which Shares will be
delivered or deemed to be delivered to Participants, whether or not a Stock
Appreciation Right shall be in tandem or in combination with any other Award,
and any other terms and conditions of any Stock Appreciation Right.

 

(iii)          Tandem
Stock Appreciation Rights.
 Any Stock Appreciation Right that
is designated by the Committee as a Tandem Stock Appreciation Right may be
granted at the same time as the related Option is granted or, for Options that
are not Incentive Stock Options, at any time thereafter before exercise or
expiration of such Option. Any Tandem Stock Appreciation Right related to an
Option may be exercised only when the related Option would be exercisable and
the Fair Market Value of the Shares subject to the related Option exceeds the
exercise price at which Shares can be acquired pursuant to the Option. In
addition, if a Tandem Stock Appreciation Right exists with respect to less than
the full number of Shares covered by a related Option, then an exercise or termination
of such Option shall not reduce the number of Shares to which the Tandem Stock
Appreciation Right applies until the number of Shares then exercisable under
such Option equals the number of Shares to which the Tandem Stock Appreciation
Right applies. Any Option related to a Tandem Stock Appreciation Right shall no
longer be exercisable to the extent the Tandem Stock Appreciation Right has
been exercised, and any Tandem Stock Appreciation Right shall be forfeited to
the extent the related Option has been exercised.

 

(d)           Restricted Stock Awards.  The Committee is authorized to grant
Restricted Stock Awards to any Eligible Person on the following terms and
conditions:

 

(i)            Grant and Restrictions.
 Restricted Stock Awards shall be subject
to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, or as otherwise provided in
this Plan, covering a period of time

 

10

 

specified by the Committee (the “Restriction Period”). The terms of any
Restricted Stock Award granted under the Plan shall be set forth in a written
Award Agreement which shall contain provisions determined by the Committee and
not inconsistent with the Plan. The 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, 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 Agreement relating to a Restricted Stock Award, a Participant granted
Restricted Stock shall have all of the rights of a shareholder, 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). During the Restriction Period, subject  to Section 10(b) below, the Restricted Stock
may not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.

 

(ii)           Forfeiture.
 Except as otherwise determined by the
Committee, upon termination of a Participant’s Continuous Service during the
applicable Restriction Period, the Participant’s Restricted Stock that is at
that time subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited and reacquired by the Company; provided that the
Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that forfeiture conditions relating to
Restricted Stock Awards shall be waived in whole or in part in the event of
terminations resulting from specified causes.

 

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

 

(iv)          Dividends and Splits.
 As a condition to the grant of a
Restricted Stock Award, the Committee may require or permit a Participant to
elect that any cash dividends paid on a Share of Restricted Stock be
automatically reinvested in additional Shares of Restricted Stock or applied to
the purchase of additional Awards under the Plan. Unless otherwise determined
by the Committee, Shares 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 Shares or other property have been
distributed.

 

(e)           Deferred Stock Award.  The Committee
is authorized to grant Deferred Stock Awards to any Eligible Person on the
following terms and conditions:

 

(i)            Award and Restrictions.
 Satisfaction of a Deferred Stock Award
shall occur upon expiration of the deferral period specified for such Deferred
Stock Award by the Committee (or, if permitted by the Committee, as elected by
the Participant). In addition, a Deferred Stock Award shall be subject to such
restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of

 

11

 

performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee may determine. A
Deferred Stock Award may be satisfied by delivery of Shares, cash equal to the
Fair Market Value of the specified number of Shares covered by the Deferred
Stock, or a combination thereof, as determined by the Committee at the date of
grant or thereafter. Prior to satisfaction of a Deferred Stock Award, a
Deferred Stock Award carries no voting or dividend or other rights associated
with Share ownership.

 

(ii)           Forfeiture.
 Except as otherwise determined by the
Committee, upon termination of a Participant’s Continuous Service during the
applicable deferral period or portion thereof to which forfeiture conditions
apply (as provided in the Award Agreement evidencing the Deferred Stock Award),
the Participant’s Deferred Stock Award that is at that time subject to a risk
of forfeiture that has not lapsed or otherwise been satisfied shall be
forfeited; provided that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that forfeiture
conditions relating to a Deferred Stock Award shall be waived in whole or in
part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of any
Deferred Stock Award.

 

(iii)          Dividend Equivalents.
 Unless otherwise determined by the
Committee at date of grant, any Dividend Equivalents that are granted with
respect to any Deferred Stock Award shall be either (A) paid with respect to
such Deferred Stock Award at the dividend payment date in cash or in Shares of
unrestricted stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such Deferred Stock Award and the
amount or value thereof automatically deemed reinvested in additional Deferred
Stock, other Awards or other investment vehicles, as the Committee shall
determine or permit the Participant to elect.

 

(f)            Bonus Stock and Awards in Lieu of
Obligations.  The Committee is authorized to grant Shares to any Eligible Persons as a bonus,
or to grant Shares or other Awards in lieu of obligations to pay cash or
deliver other property under the Plan or under other plans or compensatory
arrangements, provided that, in the case of Eligible Persons subject to Section
16 of the Exchange Act, the amount of such grants remains within the discretion
of the Committee to the extent necessary to ensure that acquisitions of Shares
or other Awards are exempt from liability under Section 16(b) of the Exchange
Act. Shares or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Committee.

 

(g)           Dividend Equivalents.  The Committee
is authorized to grant Dividend Equivalents to any Eligible Person entitling
the Eligible Person to receive cash, Shares, other Awards, or other property
equal in value to the dividends paid with respect to a specified number of
Shares, or other periodic payments. Dividend Equivalents may be Awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Shares, Awards, or other
investment vehicles, and subject to such restrictions on transferability and
risks of forfeiture, as the Committee may specify.

 

(h)           Performance Awards.  The Committee is authorized to grant Performance
Awards to any Eligible Person payable in cash, Shares, or other Awards, on
terms and conditions 

 

12

 

established
by the Committee, subject to the provisions of Section 8 if and to the extent
that the Committee shall, in its sole discretion, determine that an Award shall
be subject to those provisions. The performance criteria to be achieved during
any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award; provided,
however, that a Performance Period shall not be shorter than twelve (12) months
nor longer than five (5) years. Except as provided in Section 9 or as may be
provided in an Award Agreement, Performance Awards will be distributed only
after the end of the relevant Performance Period. The performance goals to be
achieved for each Performance Period shall be conclusively determined by the
Committee and may be based upon the criteria set forth in Section 8(b), or in
the case of an Award that the Committee determines shall not be subject to
Section 8 hereof, any other criteria that the Committee, in its sole discretion,
shall determine should be used for that purpose. The amount of the Award to be
distributed shall be conclusively determined by the Committee. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the
Committee, on a deferred basis.

 

(i)            Other Stock-Based Awards.  The Committee is authorized, subject to
limitations under applicable law, to grant to any Eligible Person 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, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan. Other Stock-Based
Awards may be granted to Participants either alone or in addition to other
Awards granted under the Plan, and such Other Stock-Based Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan. The Committee shall determine the terms and conditions of such Awards.
Shares delivered pursuant to an Award in the nature of a purchase right granted
under this Section 6(i) shall be purchased for such consideration, (including
without limitation loans from the Company or a Related Entity provided that
such loans are not in violation of the Sarbanes Oxley Act of 2002, or any rule
or regulation adopted thereunder or any other applicable law) paid for at such times, by such
methods, and in such forms, including, without limitation, cash, Shares, other
Awards or other property, as the Committee shall determine.

 

7.             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 Related Entity, or any business entity to be
acquired by the Company or a Related Entity, or any other right of a Participant
to receive payment from the Company or any Related Entity. Such additional,
tandem, and substitute or exchange Awards may be granted at any time. If an
Award is granted in substitution or exchange for another Award or award, the
Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. In addition, Awards may be
granted in lieu of cash compensation, including in lieu of cash amounts payable
under other plans of the Company or any Related Entity, in which the value of
Stock subject to the Award is equivalent in value to the cash compensation (for
example, Deferred Stock or Restricted Stock), or in which the exercise price,
grant price or purchase price of the Award in the nature of a right that may be
exercised is equal to the Fair Market Value of the underlying Stock minus the
value

 

13

 

of
the cash compensation surrendered (for example, Options or Stock Appreciation
Right granted with an exercise price or grant price “discounted” by the amount
of the cash compensation surrendered).

 

(b)           Term of Awards.  The term of
each Award shall be for such period as may be determined by the Committee;
provided that in no event shall the term of any Option or Stock Appreciation
Right exceed a period of ten years (or in the case of an Incentive Stock Option
such shorter term as may be required under Section 422 of the Code).

 

(c)           Form and Timing of Payment Under Awards;
Deferrals.  Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Related
Entity 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, Shares, other Awards or other property, and may be made in a
single payment or transfer, in installments, or on a deferred basis. Any
installment or deferral provided for in the preceding sentence shall, however,
be subject to the Company’s compliance with the provisions of the
Sarbanes-Oxley Act of 2002, the rules and regulations adopted by the Securities
and Exchange Commission thereunder, and all applicable rules of the national
securities exchange on which the Company’s securities are listed for trading
and, if not listed for trading on either the Nasdaq Stock Market or a national
securities exchange, then the rules of the Nasdaq Stock Market. The settlement
of any Award may be accelerated, and cash paid in lieu of Shares in connection
with such settlement, in the discretion of the Committee or upon occurrence of
one or more specified events (in addition to a Change in Control). Installment
or deferred payments may be required by the Committee (subject to Section 10(e)
of the Plan, including the consent provisions thereof in the case of any
deferral of an outstanding Award not provided for in the original Award
Agreement) or permitted at the election of the Participant on terms and
conditions established by the Committee. Payments may include, without limitation,
provisions for the payment or crediting of a reasonable interest rate on
installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments
denominated in Shares.

 

(d)           Exemptions from Section
16(b) Liability.  If  the
Company becomes a Publicly Held Corporation, it is the intent of the Company
that the grant of any Awards to or other transaction by a Participant who is
subject to Section 16 of the Exchange Act shall be exempt from Section 16
pursuant to an applicable exemption (except for transactions acknowledged in
writing to be non-exempt by such Participant). Accordingly, if any provision of
this Plan or any Award Agreement does not comply with the requirements of Rule
16b-3 then applicable to any such transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b-3 so that such Participant shall avoid
liability under Section 16(b).

 

(e)           Code Section 409A.  If and to the extent that the
Committee believes that any Awards may constitute a “nonqualified deferred
compensation plan” under Section 409A of the Code, the terms and
conditions set forth in the Award Agreement for that Award shall be drafted in
a manner that is intended to comply with, and those provisions (and /or the
provisions of the Plan applicable thereto) shall be interpreted in a manner
consistent with, the applicable requirements of Section 409A of the Code,
and the Committee, in its sole discretion and without

 

14

 

the
consent of any Participant, may amend any Award Agreement (and the provisions
of the Plan applicable thereto) if and to the extent that the Committee
determines necessary or appropriate to comply with the applicable requirements
of Section 409A of the Code.

 

8.             Code Section 162(m) Provisions.

 

(a)           Covered
Employees.  If the Company becomes a Publicly Held Corporation, the
Committee, in its discretion, may determine at the time an Award is granted to
an Eligible Person who is, or is likely to be, as of the end of the tax year in
which the Company would claim a tax deduction in connection with such Award, a
Covered Employee, that the provisions of this Section 8 shall be applicable to
such Award.

 

(b)           Performance Criteria.  If an Award is subject to this
Section 8, then the lapsing of restrictions thereon and the distribution of
cash, Shares or other property pursuant thereto, as applicable, shall be
contingent upon achievement of one or more objective performance goals. Performance
goals shall be objective and shall otherwise meet the requirements of Section
162(m) of the Code and regulations thereunder including the requirement that
the level or levels of performance targeted by the Committee result in the
achievement of performance goals being “substantially uncertain.”  One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related Entities,
or for business or geographical units of the Company and/or a Related Entity
(except with respect to the total shareholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for
such Awards: (1) earnings per share; (2) revenues or margins;
(3) cash flow; (4) operating margin; (5) return on net assets,
investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
earnings after interest expense and before extraordinary or special items;
operating income; income before interest income or expense, unusual items and
income taxes, local, state or federal and excluding budgeted and actual bonuses
which might be paid under any ongoing bonus plans of the Company;
(9) working capital; (10) management of fixed costs or variable
costs; (11) identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate business plans,
including strategic mergers, acquisitions or divestitures; (12) total
shareholder return; (13) debt reduction; (14) market share; (15) entry
into new markets, either geographically or by business unit; (16) customer
retention and satisfaction; (17) strategic plan development and implementation,
including turnaround plans; (18) and/or the Fair Market Value of a Share. Any
of the above goals may be determined on an absolute or relative basis or as
compared to the performance of a published or special index deemed applicable
by the Committee including, but not limited to, the Standard & Poor’s 500
Stock Index or a group of companies that are comparable to the Company. The
Committee shall exclude the impact of an event or occurrence which the
Committee determines should appropriately be excluded, including without
limitation (i) restructurings, discontinued operations, extraordinary items,
and other unusual or non-recurring charges, (ii) an event either not directly
related to the operations of the Company or not within the reasonable control
of the Company’s management, or (iii) a change in accounting standards required
by generally accepted accounting principles.

 

15

 

(c)           Performance Period; Timing For Establishing Performance Goals.  Achievement of performance goals in respect of
Performance Awards shall be measured over a Performance Period no shorter than
twelve (12) months and no longer than five (5) years, as specified by the Committee.
Performance goals shall be established not later than 90 days after the
beginning of any Performance Period applicable to such Performance Awards, or
at such other date as may be required or permitted for “performance-based
compensation” under Code Section 162(m).

 

(d)           Adjustments.  The Committee may, in its discretion, reduce
the amount of a settlement otherwise to be made in connection with Awards
subject to this Section 8, but may not exercise discretion to increase any such
amount payable to a Covered Employee in respect of an Award subject to this
Section 8. The Committee shall specify the circumstances in which such Awards
shall be paid or forfeited in the event of termination of Continuous Service by
the Participant prior to the end of a Performance Period or settlement of
Awards.

 

(e)           Committee Certification.  No Participant shall
receive any payment under the Plan that is subject to this Section 8
unless the Committee has certified, by resolution or other appropriate action
in writing, that the performance criteria and any other material terms
previously established by the Committee or set forth in the Plan, have been
satisfied to the extent necessary to qualify as “performance based compensation”
under Code Section 162(m).

 

9.             Change in Control.

 

(a)           Effect of “Change in Control.” Subject to Section 9(a)(iv), and if and only to the extent
provided in the Award Agreement, or to the extent otherwise determined by the
Committee, upon the occurrence of a “Change in Control,” as defined in Section 9(b):

 

(i)            Any Option or Stock Appreciation Right that
was not previously vested and exercisable as of the time of the Change in
Control, shall become immediately vested and exercisable, subject to applicable
restrictions set forth in Section 10(a) hereof.

 

(ii)           Any restrictions, deferral of settlement,
and forfeiture conditions applicable to a Restricted Stock Award, Deferred
Stock Award or an Other Stock-Based Award subject only to future service
requirements granted under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control, except to the extent of
any waiver by the Participant and subject to applicable restrictions set forth
in Section 10(a) hereof.

 

(iii)          With respect to any outstanding Award subject
to achievement of performance goals and conditions under the Plan, the
Committee may, in its discretion, deem such performance goals and conditions as
having been met as of the date of the Change in Control.

 

(b)           Definition of “Change in Control”.  Unless otherwise specified in an Award
Agreement, a “Change in Control” shall mean the occurrence of any of the
following:

 

(i)            The acquisition by any Person of Beneficial
Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%)

 

16

 

of either (A) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities) (the foregoing Beneficial Ownership hereinafter being referred to
as a “Controlling Interest”); provided, however, that for purposes of this
Section 9(b), the following acquisitions shall not constitute or result in a
Change of Control:  (v) any acquisition
directly from the Company; (w) any acquisition by the Company; (x) any
acquisition by any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest; (y) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary; or (z) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) below; or

 

(ii)           During any period of two (2) consecutive
years (not including any period prior to the Effective Date) individuals who
constitute the Board on the Effective Date (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

 

(iii)          Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar corporate transaction
involving the Company or any of its Subsidiaries, a sale or other disposition
of all or substantially all of the assets of the Company, or the acquisition of
assets or stock of another entity by the Company or any of its Subsidiaries
(each a “Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the Beneficial Owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than fifty
percent (50%) of the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially
all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
no Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination or any
Person that as of the Effective Date owns Beneficial Ownership of a Controlling
Interest) beneficially owns, directly or indirectly, fifty percent (50%) or
more of the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination

 

17

 

and (C) at least a majority of the members of the Board of Directors of
the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(iv)          Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.

 

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
Shares or payment of other benefits under any Award until completion of such
registration or qualification of such Shares 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
Shares or other Company securities 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 Shares 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 granted under the Plan shall be
pledged, hypothecated or otherwise encumbered or subject to any lien,
obligation or liability of such Participant to any party, 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 Incentive Stock
Options and Stock Appreciation Rights in tandem therewith) may be transferred
to one or more Beneficiaries or other 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 pursuant to the express terms of an Award Agreement (subject
to any terms and conditions which the Committee may impose thereon). 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 Agreement applicable to such Participant, except as
otherwise determined by the Committee, and to any additional terms and
conditions deemed necessary or appropriate by the Committee.

 

(c)           Adjustments.

 

(i)            Adjustments
to Awards.  In the event that any extraordinary
dividend or other distribution (whether in the form of cash, Shares, or other
property), recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Shares
and/or such other securities of the Company or any other

 

18

 

issuer such that a substitution, exchange, or adjustment is determined
by the Committee to be appropriate, then the Committee shall, in such manner as
it may deem equitable, substitute, exchange or adjust any or all of
(A) the number and kind of Shares which may be delivered in connection
with Awards granted thereafter, (B) the number and kind of Shares by which
annual per-person Award limitations are measured under Section 5 hereof,
(C) the number and kind of Shares subject to or deliverable in respect of
outstanding Awards, (D) the exercise price, grant price or purchase price
relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award, and (E) any other aspect of any
Award that the Committee determines to be appropriate.

 

(ii)           Adjustments
in Case of Certain Corporate Transactions.  In the event of any
merger, consolidation or other reorganization in which the Company does not
survive, or in the event of any Change in Control, any outstanding Awards may
be dealt with in accordance with any of the following approaches, as determined
by the agreement effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of the
outstanding Awards by the Company, if the Company is a surviving corporation,
(b) the assumption or substitution for, as those terms are defined in Section
9(b)(iv) hereof, the outstanding Awards by the surviving corporation or its
parent or subsidiary, (c) full exercisability or vesting and accelerated
expiration of the outstanding Awards, or (d) settlement of the value of the
outstanding Awards in cash or cash equivalents or other property followed by
cancellation of such Awards (which value, in the case of Options or Stock
Appreciation Rights, shall be measured by the amount, if any, by which the Fair
Market Value of a Share exceeds the exercise or grant price of the Option or
Stock Appreciation Right as of the effective date of the transaction). The
Committee shall give written notice of any proposed transaction referred to in
this Section 10(c)(ii) a reasonable period of time prior to the closing date
for such transaction (which notice may be given either before or after the
approval of such transaction), in order that Participants may have a reasonable
period of time prior to the closing date of such transaction within which to
exercise any Awards that are then exercisable (including any Awards that may
become exercisable upon the closing date of such transaction). A Participant
may condition his exercise of any Awards upon the consummation of the
transaction.

 

(iii)          Other
Adjustments.  The Committee (and the Board if and
only to the extent such authority is not required to be exercised by the
Committee to comply with Section 162(m) of the Code) is authorized to make
adjustments in the terms and conditions of, and the criteria included in,
Awards (including Performance Awards, or performance goals relating thereto) in
recognition of unusual or nonrecurring events (including, without limitation,
acquisitions and dispositions of businesses and assets) affecting the Company,
any Related Entity or any business unit, or the financial statements of the Company
or any Related Entity, 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 Related Entity or business unit thereof, performance of
comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant.

 

(d)           Taxes.  The Company and any
Related Entity are authorized to withhold from any Award granted, any payment
relating to an Award under the Plan, including from a distribution of Shares,
or any payroll or other payment to a Participant, amounts of withholding

 

19

 

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 or any Related Entity 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 Shares or other property and to make cash payments in
respect thereof in satisfaction of a Participant’s tax obligations, either on a
mandatory or elective basis in the discretion of the Committee.

 

(e)           Changes to the Plan and Awards.  The Board may amend, alter, suspend,
discontinue or
terminate the Plan, or the Committee’s authority to grant Awards under the
Plan, without the consent of shareholders or Participants, except that any
amendment or alteration to the Plan shall be subject to the approval of the
Company’s shareholders not later than the annual meeting next following such
Board action if such shareholder approval is required by any federal or state
law or regulation (including, without limitation, Rule 16b-3 or Code Section
162(m)) or the rules of any stock exchange or automated quotation system on
which the Shares may then be listed or quoted, and the Board may otherwise, in
its discretion, determine to submit other such changes to the Plan to
shareholders for approval; provided that, without the consent of an affected
Participant, no such Board action may materially and adversely affect the
rights of such Participant under any previously granted and outstanding Award. The
Committee may waive any conditions or rights under, or amend, alter, suspend,
discontinue or terminate any Award theretofore granted and any Award Agreement
relating thereto, except as otherwise provided in the Plan; provided that,
without the consent of an affected Participant, no such Committee or the Board
action may materially and adversely affect the rights of such Participant under
such Award. Notwithstanding anything to the contrary, the Committee shall not
be authorized to amend any outstanding Option and/or Stock Appreciation Right
to reduce the exercise price or grant price without the prior approval of the
shareholders of the Company.

 

(f)            Limitation on Rights Conferred Under Plan.  Neither the Plan nor any action taken hereunder or under any Award
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 Related Entity; (ii) interfering in any way
with the right of the Company or a Related Entity to terminate any Eligible
Person’s or Participant’s Continuous 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 shareholder of the
Company including, without limitation, any right to receive dividends or
distributions, any right to vote or act by written consent, any right to attend
meetings of shareholders or any right to receive any information concerning the
Company’s business, financial condition, results of operation or prospects,
unless and until such time as the Participant is duly issued Shares on the
stock books of the Company in accordance with the terms of an Award. None of
the Company, its officers or its directors shall have any fiduciary obligation
to the Participant with respect to any Shares awarded pursuant to this Plan
unless and until the Participant is duly issued Shares on the stock books of
the Company in accordance with the terms of an Award. Neither the Company nor
any of the Company’s officers, directors, representatives or agents are
granting any rights under the Plan to the Participant whatsoever, oral or
written, express or implied, other than those rights expressly set forth in
this Plan or the Award Agreement.

 

20

 

(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 Shares 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,
Shares, 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. The trustee
of such trusts may be authorized to dispose of trust assets and reinvest the
proceeds in alternative investments, subject to such terms and conditions as
the Committee may specify and in accordance with applicable law.

 

(h)           Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board
nor its submission to the shareholders 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 as it may deem desirable
including incentive arrangements and awards which do not qualify under Section
162(m) of the Code.

 

(i)            Payments in the Event of Forfeitures;
Fractional Shares.  Unless otherwise determined by the Committee,
in the event of a forfeiture of an Award with respect to which a Participant
paid cash or other consideration, the Participant shall be repaid the amount of
such cash or other consideration. No fractional Shares 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)            Governing Law.  The validity,
construction and effect of the Plan, any rules and regulations under the Plan,
and any Award Agreement shall be determined in accordance with the laws of the
State of Delaware without giving effect to principles of conflict of laws, and
applicable federal law.

 

(k)           Non-U.S. Laws.  The Committee shall have the authority
to adopt such modifications, procedures, and subplans as may be necessary or
desirable to comply with provisions of the laws of foreign countries in which
the Company or its Subsidiaries may operate to assure the viability of the
benefits from Awards granted to Participants performing services in such
countries and to meet the objectives of the Plan.

 

(l)            Plan Effective Date and Shareholder
Approval; Termination of Plan.  The Plan shall
become effective on the Effective Date, subject to subsequent approval, within
12 months of its adoption by the Board, by shareholders of the Company eligible
to vote in the election of directors, by a vote sufficient to meet the
requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under
the Exchange Act (if applicable), applicable 
requirements under the rules of any stock exchange or automated
quotation system on which the Shares may be listed or quoted, and other laws,
regulations, and obligations of the Company applicable to the Plan. Awards may
be granted subject to shareholder approval, but may not be exercised or
otherwise settled in the event the shareholder approval is not obtained. The
Plan shall terminate

 

21

 

at
the earliest of (a) such time as no Shares remain available for issuance under
the Plan, (b) termination of this Plan by the Board, or (c) the tenth
anniversary of the Effective Date. Awards outstanding upon expiration of the
Plan shall remain in effect until they have been exercised or terminated, or
have expired.

 

22Exhibit 10.14  

EMPLOYMENT AGREEMENT  

        EMPLOYMENT AGREEMENT (this "Agreement"), made this 22 day of January, 2007 (the "Execution Date"), by and between, Consonus
Technologies, Inc., a Delaware corporation ("Parent"), having offices at 301 Gregson Drive, Cary, North Carolina 27511 and Michael G. Shook, an individual residing at 107 Avenue
of the Estates Cary NC 27511 ("Executive"). 

W I T N E S S E T H:  

        WHEREAS, Parent through its affiliates and/or subsidiaries is engaged in the business of owning and operating
computer data centers and integrating businesses and technology; and 

        WHEREAS, Executive is employed as President and Chief Executive Officer of Strategic Technologies, Inc., a wholly owned subsidiary
of Parent ("STI"); and 

        WHEREAS, Parent considers Executive's experience, knowledge and qualifications to be unique and valuable to Parent and/or its affiliates
and subsidiaries; and 

        WHEREAS, Parent wishes to employ Executive as Chief Executive Officer of Parent, such that upon effectiveness of this Agreement, Executive
will be employed by both Parent and STI; and 

        WHEREAS, STI has certain term indebtedness and trade indebtedness owing to GE Access Distribution pursuant to a loan agreement between GE
Access Distribution and STI (the "GE Debt"); 

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

1)    Employment. Upon an initial public offering of Parent's common stock and the repayment of the GE Debt from
the proceeds of such initial public offering (the "Effective Date"), Parent hereby agrees to employ Executive, and Executive hereby agrees to accept employment as President and Chief Executive
Officer ("CEO") of Parent, upon the terms and subject to the conditions specified herein. In his capacity as CEO, Executive shall carry out the responsibilities and duties specified on
Exhibit A attached hereto and incorporated by reference herein. In addition, the parties may, by mutual consent, modify Executive's responsibilities and duties specified on Exhibit A
from time to time provided that the modified responsibilities and duties are reasonable and consistent with Executive's role as CEO. In addition, Executive shall carry out such other reasonable
responsibilities and duties as may be assigned to him from time to time by the Board of Directors of Parent (the "Board") which are reasonable and consistent with Executive's position as CEO.
Executive shall be subject to the direction of the Board in the performance of his duties hereunder. Executive will be a Director on the Board of Directors with full voting privileges and, to the
extent permitted by applicable law and regulation, a member of the committees of the Board. 

Executive
hereby agrees and represents that his employment, and the performance of his duties hereunder, do not violate any agreement or legal obligation existing between Executive and any other
person or entity; provided, however, that during the Term (as herein defined), Executive shall continue to be employed by and perform
the duties that he performed as President and Chief Executive Officer of STI prior to the execution of this Agreement. 

2)    Term. Subject to the provisions for earlier termination contained herein, the initial term of this
Agreement shall be for a period of three (3) years, commencing on the Effective Date hereof and ending on the third anniversary of the Effective Date (the "Initial Term"). Thereafter,
this Agreement shall automatically renew for additional and successive terms of one (1) year each (the "Renewal Term(s)"), unless either Parent or Executive elects not to renew this
Agreement upon the expiration of the Initial Term or any Renewal Term by providing written notice of such non-renewal to the other party at least sixty (60) days prior to the
expiration of the then current term ("Notice of Nonrenewal"). (Together, the Initial Term and any Renewal Term(s) shall be referred to as the "Term.") 

3)    Time. Executive shall devote his full business time, attention and reasonable efforts to the performance of
his duties hereunder and shall perform such duties ably, faithfully and diligently. During the Term, Executive 

 

shall
not be engaged in any other business activity or venture, whether or not such business activity or venture is pursued for gain, profit or other pecuniary advantage, which is competitive with the
business of Parent and/or STI, or which will materially affect, impede, prohibit, or restrict in any manner or degree his ability to perform his obligations under this Agreement. The devotion of
reasonable periods of business time by Executive for personal purposes, outside business activities, or charitable activities, including serving on one or more boards of directors, shall not be deemed
a breach of this Agreement, provided that such purposes or activities do not materially interfere with the services required to be rendered to or on behalf of Parent and/or STI. 

4)    Compensation.

a)    Base Salary. During the Term, Executive shall be paid at a rate of no less than Two Hundred
Forty-Five Thousand Dollars ($245,000) per year as his base salary (the "Base Salary"). Such Base Salary will be paid by Parent and/or STI in accordance with their regular payroll
practice and procedures and subject to increase (but not decrease) in accordance with practices generally applicable to executive employees of Parent and STI. STI or Parent, as applicable,
shall withhold from the Base Salary all sums required by federal, state and local laws, including, but not limited to, taxes, social security, and all other appropriate sums together with any sums
that Executive may agree upon. 

b)    Car Allowance. In addition, during the Term, Executive shall be provided a car allowance, payable by STI
until repayment of the GE Debt and thereafter by Parent and/or STI, of $1,080 per month, plus payment of his automobile insurance, business-related gas charges and required operating maintenance. 

c)     Participation in Benefit Plans. During the Term, Executive shall continue to participate in all STI
employee benefits and plans under the same terms and to the same extent as he had participated prior to the execution of this Agreement. Executive shall also be entitled to participate in, and receive
benefits under any health and accident plan, 401(K) savings plan or other retirement plan or any other benefit plan or arrangement that Parent may offer to its employees from time to time, which
benefits shall in the aggregate be similar in terms, conditions and/or coverage as those provided to Executive by STI. Executive's participation shall be subject to the terms and conditions of such
plans and arrangements, as the same may be amended from time to time. Executive shall also be entitled to participate in any pension plan, profit sharing plan, stock option plan, stock purchase plan
or arrangement, health and accident plan, or any other employee benefit plan or arrangement (if any) made available in the future by Parent to its key employees on terms that are no less
favorable than those offered to other executives of Parent. 

d)    Incentive Compensation. During the Term, Executive shall be eligible to receive incentive compensation
based upon the achievement of certain quarterly financial and focus area goals to be determined and agreed upon in advance (the "Incentive Compensation"). The Incentive Compensation will be
paid quarterly and annually by Parent and/or STI, within sixty (60) days following the close of each fiscal quarter. Executive, the Chairman of the Board of Parent and Parent's Compensation
Committee shall mutually agree to quarterly and annual goals for Executive's Incentive Compensation based upon the business plan of Parent and/or STI, and Executive shall continue to be paid the
Incentive Compensation based upon his percentage of achievement of such goals; provided, however, that the amount of the potentially achievable incentive compensation shall be no less than the
compensation set forth in Exhibit B and a significant portion of the Incentive Compensation shall continue to be paid no less than quarterly. The Incentive Compensation will be
based upon mutually agreed to quarterly and annual goals that will include, without limitation, a quantitative measure of Economic Value Added ("EVA") and qualitative measures. EVA will be comprised
of such concepts as EBITDA, net operating profit after tax, revenues, utilization, growth and profitability in the hosting business, growth of recurring revenue business across the platform,
performance of the Company's stock price in the event that the Company goes public, and EBITDA margins improvements, amongst others, and adjusted for such concepts as research and development expenses
and cost of capital. STI or Parent, as applicable, shall withhold from the Incentive Compensation all sums required by federal, state and local laws, including, but not limited to, taxes, social
security, and all other appropriate sums together with any sums that Executive may agree upon. 

e)    Vacation Days and Sick Days. Each year, Executive shall be entitled to twenty (20) paid vacation
days and ten (10) paid holidays. If at any time during the Term, Parent's policy for key employees provides a greater number of paid vacation, holiday or sick days, then Executive's paid days
off shall increase to be consistent with such 

2

 

policy.
In the event of termination of this Agreement for any reason during the Term, all accrued vacation days, holidays and sick days shall be paid to Executive pro rata as of the effective
date of termination. 

f)     Out of Pocket Expenses. STI and/or Parent will provide (or continue to provide, in the case of STI)
a company credit card, and will pay for all reasonable, necessary and customary business expenses incurred by Executive and charged to the card. In addition, Parent and/or STI will reimburse Executive
for reasonable, necessary and customary expenses incurred by him in the performance of his duties hereunder in accordance with STI's and/or Parent's policies, provided Executive promptly provides
documentation therefor in accordance with applicable policies, as same may be amended from time to time. Such documented reimbursement shall be paid by to Executive within fifteen (15) days
after the end of each calendar month during which Executive incurs such expenses. 

g)     Insurance and Indemnification. During the Term, Parent and/or STI shall continue, at their expense,
existing STI life insurance coverage for Executive under the Protective Life and Colonial Life (Wachovia Trust) policies as well as the STI Employment Benefit Programs under Unum Provident Life. In no
event shall such coverage be eliminated or reduced during the Term. In addition, Parent shall provide for directors and officers liability insurance coverage of the Executive in an amount that is
reasonable and customary for a comparable company and on terms and conditions consistent with market standards, and Parent shall indemnify the Executive to the extent permitted pursuant to applicable
law, and to the extent any claim is not fully covered by such insurance. 

5)    Termination

a)    Termination Upon Death. This Agreement shall automatically terminate in the event of Executive's death on
the date of his death. 

b)    Termination Upon Disability. Parent may terminate this Agreement by written notice to Executive in the
event of the Incapacity of Executive. For purposes of this Agreement, the term "Incapacity" shall mean that Executive is unable to perform the essential functions of his job, with or without a
reasonable accommodation, by reason of illness, physical or mental disability or other incapacity, for a continuous period of one hundred twenty (120) consecutive days. A continuous period of
Incapacity shall not be deemed interrupted until Executive returns to substantially full time employment for a period of at least ten (10) consecutive business days. 

c)     Termination for Cause. This Agreement and Executive's employment by Parent may, at Parent's election, be
terminated for Cause. Such termination shall be effective upon Parent giving Executive written notice of its intention to terminate. For purposes of this Agreement, "Cause" shall mean the occurrence
of any of the following events: 

i)     Executive's
material failure to perform the essential functions of his job due to the use or abuse of illegal drugs or alcohol; 

ii)    Executive's
conviction or plea of no contest to a felony or a crime involving moral turpitude by Executive, which conviction or plea has or is likely to have a materially adverse
effect on Parent, including damage to its reputation; 

iii)   Executive's
breach of any provision of this Agreement which has or is likely to have a materially adverse effect on Parent; 

iv)    Executive's
breach of Section 7 or 8 of this Agreement, other than a non-material and inadvertent breach; 

v)     Executive's
willful acts of malfeasance or misfeasance which acts have or are likely to have a materially adverse effect on Parent; 

vi)    Executive's
actions constituting theft, embezzlement or fraud with respect to the property or business of Parent. 

Provided,
however, that prior to the termination of Executive's employment for "Cause" pursuant to Subsections (iii) or (iv), above, Parent shall provide Executive with ten
(10) business days written notice of such grounds for termination and the opportunity for Executive to cure said cause for termination if such cause is reasonably capable of being cured. 

3

 

d)    Termination by Executive for Good Reason. Executive may terminate his employment and this Agreement for
"Good Reason." Such termination shall be effective upon Executive's giving Parent written notice of his intention to terminate. For purposes of this Agreement, "Good Reason" shall mean the occurrence
of any of the following events: 

i)     Parent's
material breach of any provision of this Agreement, which breach, if capable of cure, is not cured within ten (10) business days after Executive shall have provided
written notice of such breach to Parent; 

ii)    Parent's
material breach of any other agreement between Parent and Executive, which breach, if capable of cure, is not cured within ten (10) business days after Executive shall
have provided written notice of such breach to Parent; 

iii)   Any
material diminution in Executive's Base Salary, Incentive Compensation, other compensation, benefits, title, duties or status as President and Chief Executive Officer of
Parent; or 

iv)    Any
requirement by Parent that Executive, without his consent, relocate to or report to as his principal place of employment any location more than thirty (30) miles from Cary,
North Carolina. 

e)    Termination By Parent other than for Cause, Death or Disability. Parent may terminate Executive's
employment and this Agreement at any time without Cause or the Incapacity of Executive upon sixty (60) days' written notice by Parent to the Executive; provided, that Parent may provide
continued Base Salary payments for all or a portion of such 60-day period in lieu of such notice. 

f)     Termination by Executive Other than for Good Reason. Following the repayment of the GE Debt, Executive may
terminate his employment and this Agreement at any time without Good Reason upon sixty (60) days' written notice by Executive to Parent; provided, that Parent may provide continued Base Salary
payments for all or a portion of such 60-day period in lieu of such notice. 

6)    Payments in Connection with Termination

a)    Payments upon Termination due to Death or Disability. Upon the termination of this Agreement and
Executive's employment by Parent due to Executive's death or disability pursuant to Paragraphs 5(a) or 5(b), Executive shall not be entitled to receive any further compensation, rights
or benefits hereunder, and same shall immediately terminate (excepting any death or insurance benefits pursuant to this Agreement or any benefit plan provided by Parent), other than the payment of
Executive's earned but unpaid Base Salary and accrued vacation, holiday and sick days (if any) through the date of termination; all vested equity; and as provided by applicable law. 

b)    Payments upon Termination by Executive's Notice of Nonrenewal, for Cause or Without Good Reason. Upon the
termination of this Agreement and Executive's employment by Executive's Notice of Nonrenewal pursuant to Paragraph 2, by Parent for Cause pursuant to Paragraph 5(c), or by Executive
without Good Reason pursuant to Paragraph 5(f), Executive shall not be entitled to receive any severance or other compensation, rights or benefits hereunder and same shall immediately
terminate, other than the payment of Executive's earned but unpaid Base Salary and accrued vacation, holiday and sick days (if any) through the date of termination; all vested equity; and as
provided by applicable law. 

c)     Payments upon Termination by Parent's Notice of Nonrenewal, by Executive for Good Reason or by Parent other than for Cause, Death or
Disability. Upon the termination of this Agreement and Executive's employment by Parent's Notice of Nonrenewal pursuant to Paragraph 2, by Executive for
Good Reason pursuant to Paragraph 5(d) or by Parent other than for Cause, Death or Disability pursuant to Paragraph 5(e), Executive shall be entitled to receive the following as
severance (the "Severance"): (i) Parent will pay to Executive his then-current Base Salary for a period that is the greater of: (A) six (6) months or
(B) through the expiration of the then current Term (whether the Initial Term or a Renewal Term) (the "Severance Period"); and (ii) Parent will provide Executive and his spouse
and covered dependants with paid benefits at the same level and upon the same terms and conditions as provided immediately prior to Executive's termination for the duration of the Severance Period or
until Executive (including his spouse and any covered dependants) is covered by benefits plans that are at least as favorable in cost and coverage as the plans under which he (including his spouse and
any covered dependants) was covered prior to his termination. In addition, upon the termination of this Agreement by Parent's Notice of Nonrenewal pursuant to Paragraph 2 or by Parent
other than for Cause, Death 

4

 

or
Disability pursuant to Paragraph 5(e), Parent will pay to Executive his Incentive Compensation at the level provided for meeting 50% of his then-established goals through the
entire Severance Period. 

Parent
may condition Executive's receipt of the Severance hereunder upon Executive's written release of any claims against Parent based upon the termination of his employment. 

d)    Automatic Termination of Severance Payments. Notwithstanding any provision of this Agreement to the
contrary, if, prior to the end of the Severance Period, the Executive (i) materially violates Paragraphs 7 or 8 of this Agreement hereof or (ii) revokes or violates the
release (if a release is required by Parent), Parent shall have no obligation to make any of the payments that remain payable by Parent under Paragraph 6 on or after the date of
such violation. 

7)    Nondisclosure of Information.

a)    Executive
recognizes and acknowledges that the business and financial records, customer and supplier lists, business contacts, contracts, trade secrets, confidential methods of
operations of Parent and other related information, as they may exist from time to time, are valuable, special and unique assets of Parent, access to and knowledge of which are essential to the
performance of the duties of Executive hereunder. Executive acknowledges that such information is not generally known in the trade and that such information provides
Parent with a competitive edge in its market area. In that regard, Executive acknowledges and agrees that Parent has taken and is taking reasonable steps to protect the confidentiality of, and
legitimate interest in, said information. Executive therefore agrees that he will not, during the term hereof, or after termination hereof, disclose any of such records, contracts, business contacts,
lists, secrets, information, processes or methods to any Person (as defined herein) for any reason or purpose whatsoever except in connection with the performance of his duties hereunder, nor
shall he make use of any such property for his own purposes or for the benefit of any Person except Parent. Executives obligation set forth herein shall not include any business and financial records,
customer and supplier lists, business contacts, contracts, trade secrets, confidential methods of operations of Parent and other related information which: (i) was publicly known and made
generally available in the public domain prior to the time of disclosure by Parent to Executive; (ii) becomes publicly known and made generally available after disclosure by Parent to Executive
through no action or inaction of Executive; or (iii) is already in the possession of Executive at the time of disclosure by Parent as shown by the Executive's files and records immediately
prior to the time of disclosure. Notwithstanding the foregoing, in the event that Executive is requested or required, in connection with any proceeding by or before a governmental authority, to
disclose confidential information, Executive will give Parent prompt written notice of such request or requirement so that Parent may seek a protective order or other appropriate relief. In the event
that such protective order or other remedy is not obtained or Parent waives the right to seek such an order or other remedy, Executive may, without liability under this Paragraph 7(a) furnish
only that portion of the confidential information which Executive is legally required to disclose; provided that Executive gives Parent written notice of the information to be disclosed as far in
advance of its disclosure as practicable and uses his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information. 

b)    For
purposes of this Agreement, "Person" as used herein means any natural person, corporation, division of a corporation, partnership, trust, joint venture, association, firm, company,
estate or unincorporated organization. 

8)    Restrictive Covenants.

a)    During
the period of his employment by Parent hereunder and for a period of twelve (12) months after the termination or expiration of his employment with Parent (including any
successor or assign of Parent), for any reason whatsoever, Executive agrees that he will not, on his own account, or as an employee, consultant, adviser, partner, member, co-venturer,
owner, officer, lender, director or stockholder of any other Person: 

i)     directly
or indirectly, solicit (though this shall not be deemed to include general advertisements and business efforts not performed or assisted by Executive) customers or prospective
customers of Parent with whom Executive had contact during the five (5) years prior to the termination of his employment for the purposes of providing any service that is competitive
with Parent; 

5

 

ii)    directly
or indirectly, for himself or on behalf of any other Person in which he may now, or shall hereafter, have any direct or indirect business or employment interest, induce or
attempt to induce, in any manner
whatsoever (though this shall not be deemed to include general job placements and advertisements), any employees of Parent to leave the employ of Parent and/or to seek or accept employment with
Executive or any such Person, nor shall Executive negotiate with any such employee while Executive is in the employ of Parent with respect to such person's present or future employment; or 

iii)   be
associated, in the same or a substantially similar capacity as he was associated with Parent, with any business that is directly competitive with the business of Parent and is
located in the states of Utah or North Carolina or any other states that Parent conducts business in where such business accounts for at least 5% of Parent's annual revenues at the time of termination
or expiration of Executive's employment with Parent; provided that if this area is deemed overly broad, the restricted area shall be North Carolina; provided further, if this area is deemed overly
broad, the restricted area shall be Wake County in the State of North Carolina. 

b)    Executive
further acknowledges and agrees that in view of the unique position of and services rendered by Executive to Parent, and of the business activities of Parent, the time
period, scope of activities and territorial scope specified above are the fair, appropriate and minimum reasonable time period, scope of activities and territorial restrictions necessary to protect
Parent in the full use of the good will of the business conducted by Parent. Executive further agrees that monetary damages cannot fully compensate Parent in the event of a violation of the foregoing
restrictive covenants, and the covenants of Paragraph 7, and therefore consents to Parent, in case of violation, having injunctive relief without bond or notice in addition to such other relief
as may be available in equity or at law. No waiver of any violation hereof shall be implied by Parent's forbearance or failure to take action in pursuance hereof. All covenants and provisions of
Paragraph 7 and this Paragraph 8 shall constitute a series of separate covenants, and if any particular portion of Paragraph 7 or this Paragraph 8 shall be
adjudicated invalid or unenforceable, the same shall be deemed deleted without affecting the validity or enforceability of other portions or provisions hereof, and such deletion shall apply only with
respect to the operation of said paragraphs in the particular jurisdiction in which such adjudication is made. Further, to the extent that any provision hereof is deemed unenforceable by virtue of its
scope in terms of territory, length of time, scope of activities or otherwise, but may be made enforceable by limitations or revisions thereon, the parties agree that such limitations or revisions may
be made so that the same shall, nevertheless, be enforceable to the fullest extent permissible under the laws and public policies applied in any such jurisdiction in which enforcement
is sought. 

c)     Executive
acknowledges and agrees that, notwithstanding the restrictive covenants contained herein, Executive can still be employed by other businesses without violating the provisions
hereof and that such restrictions will not prevent Executive from earning a living. 

d)    Executive
acknowledges that the compensation package being paid by Parent to Executive hereunder includes consideration specifically for Executive's full compliance with the terms and
conditions of Paragraph 7 and this Paragraph 8 hereof. 

9)    Return of Documents. Upon termination of his employment with Parent for any reason, Executive shall
forthwith deliver to Parent and return, and shall not retain, any originals or copies of, any books, papers or price lists of Parent, customer lists, files, books of account, notes and other documents
and data or other writings, tapes or records of Parent maintained by or in the possession of Executive (all of the same are hereby acknowledged and agreed to be the property of Parent). 

10)  Waiver of Breach. Any waiver of any of the provisions of this Agreement, or of any breach, inaccuracy in
or non-fulfillment of any of the provisions hereof, or of any representations, warranties or obligations under or contemplated hereby, shall not be effective unless made in a writing and
signed by the party against whom enforcement of any such waiver is sought. A waiver given in any case shall only apply with respect to that particular act or omission, and shall not be effective as to
any further acts or omissions, regardless of whether they are of the same or similar nature. 

6

 

11)  Miscellaneous.

a)    Notices. Any and all notices required hereunder shall be in writing and shall be deemed to be delivered
and received 

(i)
if personally delivered or, if delivered by telegram, facsimile, email or courier service, when actually received by the party to whom notice is sent (or upon confirmation of receipt
received by the sender), or (ii) if delivered by mail, at the close of business on the second (2nd) business day next following the day when placed in the mail, postage prepaid,
certified or registered, return receipt requested addressed to the appropriate party or parties, at the address of such party set forth below (or at such other address as such party may
designate by written notice to all other parties in accordance herewith): 

If
to Executive: 

Michael
G. Shook

107 Avenue of the Estates

Cary, NC 27511

Facsimile:                         

Email: mikes@stratech.com 

with
a copy to (which shall not constitute notice): 

Wyrick
Robbins Yates & Ponton LLP

Attn: Lisa D. Inman

4101 Lake Boone Trail, Suite 300

Raleigh, NC 27607

Facsimile: (919) 781-4865

Email: linman@wyrick.com 

If
to Parent: 

Knox
Lawrence International, LLC

245 Park Avenue, 39th Floor

New York, NY 10167

Attn: Mr. Nana Baffour

Facsimile: (212) 202-4168

Email: nbaffour@knoxlawrence.com 

with
a copy to (which shall not constitute notice): 

Greenberg
Traurig, LLP

3290 Northside Parkway, N.W.

Suite 400

Atlanta, Georgia 30327

Attention: Theodore I. Blum, Esq.

Facsimile No.: (678) 553-2621

Email: blumt@gtlaw.com 

b)    Entire Agreement; Amendment. This Agreement contains the entire agreement between the parties with respect
to the subject matter addressed herein, and all prior discussions, understandings, negotiations and agreements, whether oral or in writing, are superseded and merged herein. This Agreement may not be
changed, modified or rescinded orally but only by an agreement in writing signed by the party against whom enforcement of any change, modification or rescission is sought. 

c)     Benefit and Assignability. This Agreement shall inure to the benefit of and shall be binding upon Parent
and Executive, and their respective heirs, legal or personal representatives, successors and permitted assigns. The duties, obligations, rights and benefits of Executive under this Agreement are
personal to him and no such duty, obligation, right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer. 

7

 

d)    Governing Law. All questions pertaining to the validity, constructing, execution and performance of this
Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, without giving effect to the conflicts or choice of law provisions thereof. 

e)    Remedies. No remedy herein conferred upon or reserved to a party is intended to be exclusive of any other
available remedy, but each and every such remedy shall be cumulative and in addition to every other remedy given under this Agreement or in connection with this Agreement, any other agreement, and now
or hereafter existing at law or in equity. 

f)     Enforceability. Any term or provision of this Agreement which is invalid, illegal or unenforceable in any
respect in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without rendering invalid, illegal or unenforceable the
remaining terms and provisions or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 

g)     Attorney's Fees. If any suit or action is filed by any party to enforce this Agreement or otherwise with
respect to the subject matter of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees incurred in preparation or in prosecution or defense of such suit or
action as fixed by the arbitrator. 

h)    Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires otherwise. 

i)     Acknowledgment. Executive acknowledges that he has read this entire agreement, that he is familiar with all
of the terms and conditions of this Agreement, that he has capacity to understand the terms hereof, and by executing this Agreement agrees to be bound by the terms hereof. 

j)     Survival. The provisions of Paragraphs 4 (as applied to calculation of severance and
benefits), 6 (as applied to payment and calculation of severance and benefits), 7, 8, 9 and 11 shall survive and continue in full force and effect notwithstanding the termination of this
Agreement and the termination of Executive's employment with Parent hereunder. 

k)    Headings. The headings in this Agreement are intended solely for convenience of reference and shall be
given no effect in the construction or interpretation of this Agreement. 

[Signatures Appear on the Following Page.] 

8

        IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Employment Agreement all on the day and year first
above written. 

	 	 	CONSONUS TECHNOLOGIES, INC.
	

 	
 	

By:	

/s/  NANA BAFFOUR      
 Nana Baffour, Chairman
	

 	
 	
EXECUTIVE
	

 	
 	

By:	

/s/  MICHAEL G. SHOOK      
 Michael G. Shook

SIGNATURE PAGE TO M. SHOOK EMPLOYMENT AGREEMENT

Exhibit A  

Description of Duties and Responsibilities  

Executive
shall oversee the operations of Parent, and shall perform the following duties: 

(i)    Oversee
the day to day operations of Parent with direct responsibility for profit and loss, 

(ii)   Identify
and pursue new revenue opportunities, 

(iii)  Negotiate
and close contracts with new clients, vendors and sub-contractors, 

(iv)  Hire,
terminate, supervise, develop and motivate Parent employees, including the executive team, to achieve the established operating targets for Parent, and 

(v)   Perform
any such other responsibilities and duties as may be assigned by the Board from time to time. 

Exhibit B  

The
following information reflects the Incentive Compensation Plan for Michael Shook prior to the Effective Date and is included herein only to reflect the amount of the potentially achievable
incentive compensation under this Agreement. 

Incentive Compensation Plan  

Base
Incentive Compensation ("Leverage") at achievement of 100% of all goals equals a total of $120,000 per year or $30,000 per quarter. Leverage Amount is distributed
as follows: 

        25%
for booking budgeted profit and loss margin goal (at 100% of goal, $30,000 per year or $7,500 per quarter); 

        30%
for meeting professional services goal, including outside contractors (at 100% of goal, $36,000 per year or $9,000 per quarter); 

        35%
for meeting budgeted operating income goal (at 100% of goal, $42,000 per year or $10,500 per quarter); and 

        10%
for meeting "Managed by Objectives" goal (at 100% of goal, $12,000 per year or $3,000 per quarter). 

Exceeding
goals will result in pro rata increase in Leverage Compensation on a quarterly basis. For example, achievement of 150% of professional services goal would result in quarterly Leverage
payment of $13,500 ($30,000 total quarterly Leverage multiplied by 30% of Leverage distribution factor multiplied by 150% of goal achievement). Achieving less than 100% of goals will result in a
pro rata decrease in Leverage Compensation on a quarterly basis. For example, achievement of 75% of professional services goal would
result in quarterly Leverage payment of $6,750 ($30,000 total quarterly Leverage multiplied by 30% of Leverage distribution factor multiplied by 75% of goal achievement). 

Additional
Incentive Compensation ("Special Bonus") for achieving 110% of special bonus goal is $30,000 per year or $7,500 per quarter. Special Bonus goals will be
pre-established quarterly to drive varying areas of focus and critical financial goals. Such Special Bonuses will be paid only when the Company overachieves plan goals. (E.g., such Special
Bonuses could be paid upon making 110% or greater of quarterly goals such as for: operating income; professional services revenue; booking margins; or reduction in selling and general administrative
costs.) 

        All
incentive goals are based on the current fiscal year financial plan, except for the goals for professional services. For fiscal year 2006, the goals for professional services shall
be as follows: 

	 
	 	Quarter
 
	 	Monthly Average
 
	 	 

	 Q-1	 	2,415,000	 	805,000	 	 
	 Q-2	 	2,604,000	 	868,000	 	 
	 Q-3	 	2,839,017	 	946,339	 	 
	 Q-4	 	2,949,147	 	938,049

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]