Document:

EXHIBIT
10.36

    

    NOTIFY
TECHNOLOGY CORPORATION

     

    2008
EQUITY INCENTIVE PLAN

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            	
                    ARTICLE 1

                  	 	
                    PURPOSE

                  	
                    1

                  
	 
      	 	 
      	 
      
	
                    1.1

                  	 	
                    General

                  	
                    1

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      2

                  	 	
                    DEFINITIONS

                  	
                    1

                  
	 
      	 	 
      	 
      
	
                    2.1

                  	 	
                    Definitions

                  	
                    1

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      3

                  	 	
                    TERM
      OF PLAN

                  	
                    6

                  
	 
      	 	 
      	 
      
	
                    3.1

                  	 	
                    Effective
      Date

                  	
                    6

                  
	
                    3.2

                  	 	
                    Termination
      of Plan

                  	
                    6

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      4

                  	 	
                    ADMINISTRATION

                  	
                    6

                  
	 
      	 	 
      	 
      
	
                    4.1

                  	 	
                    Committee

                  	
                    6

                  
	
                    4.2

                  	 	
                    Action
      and Interpretations by the Committee

                  	
                    7

                  
	
                    4.3

                  	 	
                    Authority
      of Committee

                  	
                    7

                  
	
                    4.4

                  	 	
                    Award
      Certificates

                  	
                    8

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      5

                  	 	
                    SHARES
      SUBJECT TO THE PLAN

                  	
                    8

                  
	 
      	 	 
      	 
      
	
                    5.1

                  	 	
                    Number
      of Shares

                  	
                    8

                  
	
                    5.2

                  	 	
                    Share
      Counting

                  	
                    8

                  
	
                    5.3

                  	 	
                    Stock
      Distributed

                  	
                    8

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      6

                  	 	
                    ELIGIBILITY

                  	
                    9

                  
	 
      	 	 
      	 
      
	
                    6.1

                  	 	
                    General

                  	
                    9

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      7

                  	 	
                    STOCK
      OPTIONS

                  	
                    9

                  
	 
      	 	 
      	 
      
	
                    7.1

                  	 	
                    General

                  	
                    9

                  
	
                    7.2

                  	 	
                    Incentive
      Stock Options

                  	
                    9

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      8

                  	 	
                    PERFORMANCE
      SHARES

                  	
                    10

                  
	 
      	 	 
      	 
      
	
                    8.1

                  	 	
                    Grant
      of Performance Shares

                  	
                    10

                  
	
                    8.2

                  	 	
                    Performance
      Goals

                  	
                    10

                  
	
                    8.3

                  	 	
                    Right
      to Payment

                  	
                    10

                  
	
                    8.4

                  	 	
                    Other
      Terms

                  	
                    10

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      9

                  	 	
                    RESTRICTED
      STOCK

                  	
                    10

                  
	 
      	 	 
      	 
      
	
                    9.1

                  	 	
                    Grant
      of Restricted Stock

                  	
                    10

                  
	
                    9.2

                  	 	
                    Issuance
      and Restrictions

                  	
                    11

                  
	
                    9.3

                  	 	
                    Forfeiture

                  	
                    11

                  
	
                    9.4

                  	 	
                    Delivery
      of Restricted Stock

                  	
                    11

                  

          

        

      

    

     

    
      
        
        

      

      
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    EXHIBIT
10.36

    

    
      
        
          
            	
                    ARTICLE
      10

                  	 	
                    PROVISIONS
      APPLICABLE TO AWARDS

                  	
                    11

                  
	 
      	 	 
      	 
      
	
                    10.1  

                  	 	
                    Stand-Alone
      and Tandem Awards

                  	
                    11

                  
	
                    10.2  

                  	 	
                    Term
      of Award

                  	
                    11

                  
	
                    10.3  

                  	 	
                    Form
      of Payment for Awards

                  	
                    12

                  
	
                    10.4  

                  	 	
                    Limits
      on Transfer

                  	
                    12

                  
	
                    10.5  

                  	 	
                    Beneficiaries

                  	
                    12

                  
	
                    10.6  

                  	 	
                    Stock
      Trading Restrictions

                  	
                    12

                  
	
                    10.7  

                  	 	
                    Effect
      of a Change in Control

                  	
                    12

                  
	
                    10.8  

                  	 	
                    Qualified
      Performance-Based Awards

                  	
                    13

                  
	
                    10.9  

                  	 	
                    Termination
      of Employment

                  	
                    15

                  
	
                    10.10

                  	 	
                    Forfeiture
      Events

                  	
                    16

                  
	
                    10.11

                  	 	
                    Substitute
      Awards

                  	
                    16

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      11

                  	 	
                    CHANGES
      IN CAPITAL STRUCTURE

                  	
                    16

                  
	 
      	 	 
      	 
      
	
                    11.1  

                  	 	
                    Adjustments

                  	
                    16

                  
	 
      	 	 
      	 
      
	
                    ARTICLE
      12

                  	 	
                    AMENDMENT,
      MODIFICATION AND TERMINATION

                  	
                    17

                  
	 
      	 	 
      	 
      
	
                    12.1  

                  	 	
                    Amendment,
      Modification And Termination

                  	
                    17

                  
	
                    12.2  

                  	 	
                    Awards
      Previously Granted

                  	
                    17

                  
	
                    12.3  

                  	 	
                    Compliance
      Amendments

                  	
                    17

                  
	 
      	 	 
      	 
      
	
                    ARTICLE 13

                  	 	
                    GENERAL
      PROVISIONS

                  	
                    18

                  
	 
      	 	 
      	 
      
	
                    13.1  

                  	 	
                    No
      Rights to Awards; Non-Uniform Determinations

                  	
                    18

                  
	
                    13.2  

                  	 	
                    No
      Shareholder Rights

                  	
                    18

                  
	
                    13.3  

                  	 	
                    Special
      Provisions Related to Section 409A of the Code

                  	
                    18

                  
	
                    13.4  

                  	 	
                    Withholding

                  	
                    18

                  
	
                    13.5  

                  	 	
                    No
      Right to Continued Service

                  	
                    19

                  
	
                    13.6  

                  	 	
                    Relationship
      to Other Benefits

                  	
                    19

                  
	
                    13.7  

                  	 	
                    Titles
      and Headings

                  	
                    19

                  
	
                    13.8  

                  	 	
                    Gender
      and Number

                  	
                    19

                  
	
                    13.9  

                  	 	
                    Fractional
      Shares

                  	
                    19

                  
	
                    13.10

                  	 	
                    Government
      and Other Regulations

                  	
                    19

                  
	
                    13.11

                  	 	
                    Governing
      Law

                  	
                    20

                  
	
                    13.12

                  	 	
                    Additional
      Provisions

                  	
                    20

                  
	
                    13.13

                  	 	
                    No
      Limitations on Rights of Company

                  	
                    20

                  
	
                    13.14

                  	 	
                    Indemnification

                  	
                    20

                  
	
                    13.15

                  	 	
                    Availability
      of Information

                  	
                    20

                  

          

        

      

    

     

    
      
        
        

      

      
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    EXHIBIT
10.36

     

    NOTIFY
TECHNOLOGY CORPORATION

    2008
EQUITY INCENTIVE PLAN

     

    ARTICLE 1

    PURPOSE

     

    1.1          General.  The purpose of
the Notify Technology Corporation 2008 Equity Incentive Plan (the “Plan”) is to
promote the success, and enhance the value, of Notify Technology Corporation
(the “Company”), by linking the personal interests of employees, officers,
non-employee directors and consultants of the Company or any Affiliate (as
defined below) to those of Company shareholders and by providing such persons
with an incentive for outstanding performance. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and
retain the services of employees, officers, non-employee directors and
consultants upon whose judgment, interest, and special effort the successful
conduct of the Company’s operation is largely dependent. Accordingly, the Plan
permits the grant of incentive awards from time to time to selected employees,
officers, non-employee directors and consultants of the Company and its
Affiliates.

     

    ARTICLE 2

    DEFINITIONS

     

    2.1          Definitions.  When a word or
phrase appears in this Plan with the initial letter capitalized, and the word or
phrase does not commence a sentence, the word or phrase shall generally be given
the meaning ascribed to it in this Section or in Section 1.1 unless a clearly
different meaning is required by the context. The following words and phrases
shall have the following meanings:

     

    “Affiliate” means (i)
any Subsidiary or Parent, or (ii) an entity that directly or through one or more
intermediaries controls, is controlled by or is under common control with, the
Company, as determined by the Committee.

     

    “Award” means any
Option, Restricted Stock Award, Performance Share, or any other right or
interest relating to Stock or cash, granted to a Participant under the
Plan.

     

    “Award Certificate”
means a written document, in such form as the Committee prescribes from time to
time, setting forth the terms and conditions of an Award. Award Certificates may
be in the form of individual award agreements or certificates or a program
document describing the terms and provisions of an Awards or series of Awards
under the Plan. The Committee may provide for the use of electronic, internet or
other non-paper Award Certificates, and the use of electronic, internet or other
non-paper means for the acceptance thereof and actions thereunder by a
Participant.

     

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

     

    “Change in Control”
means and includes the occurrence of any one of the following
events:

     

    
      
        
        

      

      
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    EXHIBIT
10.36

    

    (i)           individuals
who, on the Effective Date, constitute the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director after the Effective Date and whose election
or nomination for election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be an Incumbent Director; provided,
however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to the election
or removal of directors (“Election Contest”) or other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the
Board (“Proxy Contest”), including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent
Director; or

     

    (ii)          any
person is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of either (A) 50% or more of the
then-outstanding shares of common stock of the Company (“Company Common Stock”)
or (B) securities of the Company representing 50% or more of the combined voting
power of the Company’s then outstanding securities eligible to vote for the
election of directors (the “Company Voting Securities”); provided, however, that
for purposes of this subsection (ii), the following acquisitions shall not
constitute a Change in Control: (w) an acquisition directly from the Company,
(x) an acquisition by the Company or a Subsidiary of the Company, (y) an
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary of the Company, or (z) an
acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection
(iii) below); or

     

    (iii)         the
consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or a
Subsidiary (a “Reorganization”), or the sale or other disposition of all or
substantially all of the Company’s assets (a “Sale”) or the acquisition of
assets or stock of another corporation (an “Acquisition”), unless immediately
following such Reorganization, Sale or Acquisition:

     

    (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 Reorganization, Sale or
Acquisition beneficially own, directly or indirectly, more than 50% of,
respectively, 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 Reorganization, Sale or Acquisition (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 or stock either directly or
through one or more subsidiaries the (“Surviving Corporation”) in substantially
the same proportions as their ownership, immediately prior to such
Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and
the outstanding Company Voting Securities, as the case may be, and

     

    
      
        
        

      

      
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    EXHIBIT
10.36

    

    (B)            no
person (other than (x) the Company or any Subsidiary of the Company, (y) the
Surviving Corporation or its ultimate parent corporation, or (z) any employee
benefit plan or related trust) sponsored or maintained by any of the foregoing
is the beneficial owner, directly or indirectly, of 50% or more of the total
common stock or 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Surviving Corporation, and (C) at
least a majority of the members of the board of directors of the Surviving
Corporation were Incumbent Directors at the time of the Board’s approval of the
execution of the initial agreement providing for such Reorganization, Sale or
Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a
“Non-Qualifying Transaction”); or

     

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

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time. Reference to a
specific Section of the Code or regulation thereunder shall include such Section
or regulation, any valid regulation promulgated under such Section, and any
comparable provision of any future law, legislation or regulation amending,
supplementing or superseding such Section or regulation.

     

    “Committee” means the
committee of the Board described in Article 4.

     

    “Company” means Notify
Technology Corporation, a California corporation, or any successor
corporation.

     

    “Continuous Status as a
Participant” means the absence of any interruption or termination of
service as an employee, officer, consultant or non-employee director of the
Company or any Affiliate, as applicable; provided, however, that for purposes of
an Incentive Stock Option, “Continuous Status as a Participant” means the
absence of any interruption or termination of service as an employee of the
Company or any Parent or Subsidiary, as applicable, pursuant to applicable tax
regulations. Continuous Status as a Participant shall not be considered
interrupted in the case of any leave of absence authorized in writing by the
Company prior to its commencement; provided, however, that for purposes of
Incentive Stock Options, no such leave may exceed 90 days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 91st day of such leave any Incentive Stock Option held
by the Participant shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.

     

    “Covered Employee”
means a covered employee as defined in Code Section 162(m)(3).

     

    “Disability” or
“Disabled” has the same meaning as provided in the long-term disability
plan or policy maintained by the Company or if applicable, most recently
maintained, by the Company or if applicable, an Affiliate, for the Participant,
whether or not such Participant actually receives disability benefits under such
plan or policy. If no long-term disability plan or policy was ever maintained on
behalf of Participant or if the determination of Disability relates to an
Incentive Stock Option, Disability means Permanent and Total Disability as
defined in Section 22(e)(3) of the Code. Notwithstanding the foregoing, for any
Awards that constitute a nonqualified deferred compensation plan within the
meaning of Section 409A(d) of the Code, Disability has the meaning given such
term in Section 409A of the Code. In the event of a dispute, the determination
whether a Participant is Disabled will be made by the Committee and may be
supported by the advice of a physician competent in the area to which such
Disability relates.

     

    
      
        
        

      

      
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    EXHIBIT
10.36

    

    “Effective Date” has
the meaning assigned such term in Section 3.1.

     

    “Eligible Participant”
means an employee, officer, consultant or non-employee director of the Company
or any Affiliate.

     

    “Exchange” means the
New York Stock Exchange or any other national securities exchange or national
market system on which the Stock may from time to time be listed or
traded.

     

    “Fair Market Value” of
the Stock, on any date, means: (i) if the Stock is listed or traded on any
Exchange, the closing sales price for such Stock (or the closing bid, if no
sales were reported) as quoted on such Exchange (or, if more than one Exchange,
the Exchange with the greatest volume of trading in the Stock) for such date, or
if no sales or bids were reported for such date, on the last market trading day
prior to the day of determination, as reported by Bloomberg, L.P. quotation
services or such other source as the Committee deems reliable; (ii) if the Stock
is quoted on the over-the-counter market or is regularly quoted by a recognized
securities dealer, but selling prices are not reported, the Fair Market Value of
the Stock shall be the mean between the high bid and low asked prices for the
Stock on such date, or if no sales or bids were reported for such date, on the
last market trading day prior to the day of determination, as reported by
Bloomberg, L.P. quotation services or such other source as the Committee deems
reliable, or (iii) in the absence of an established market for the Stock, the
Fair Market Value shall be determined by such other method as the Committee
determines in good faith to be reasonable and in compliance with Code Section
409A.

     

    “Grant Date” of an
Award means the first date on which all necessary corporate action has been
taken to approve the grant of the Award as provided in the Plan, or such later
date as is determined and specified as part of that authorization process.
Notice of the grant shall be provided to the grantee within a reasonable time
after the Grant Date.

     

    “Incentive Stock
Option” means an Option that is intended to be an incentive stock option
and meets the requirements of Section 422 of the Code or any successor provision
thereto.

     

    “Non-Employee
Director” means a director of the Company who is not a common law
employee of the Company or an Affiliate.

     

    “Nonstatutory Stock
Option” means an Option that is not an Incentive Stock
Option.

     

    “Option” means a right
granted to a Participant under Article 7 of the Plan to purchase Stock at a
specified price during specified time periods. An Option may be either an
Incentive Stock Option or a Nonstatutory Stock Option.

     

    
      
        
        

      

      
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    EXHIBIT
10.36

    

    “Parent” means a
corporation, limited liability company, partnership or other entity which owns
or beneficially owns a majority of the outstanding voting stock or voting power
of the Company. Notwithstanding the above, with respect to an Incentive Stock
Option, Parent shall have the meaning set forth in Section 424(e) of the
Code.

     

    “Participant” means a
person who, as an employee, officer, non-employee director or consultant of the
Company or any Affiliate, has been granted an Award under the Plan; provided
that in the case of the death of a Participant, the term “Participant” refers to
a beneficiary designated pursuant to Section 10.5 or the legal guardian or other
legal representative acting in a fiduciary capacity on behalf of the Participant
under applicable state law and court supervision.

     

    “Performance Share”
means any right granted to a Participant under Article 8 to a unit to be
valued by reference to a designated number of Shares to be paid upon achievement
of such performance goals as the Committee establishes with regard to such
Performance Share.

     

    “Person” means any
individual, entity or group, within the meaning of Section 3(a)(9) of the 1934
Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934 Act.

     

    “Plan” means the
Notify Technology Corporation 2008 Equity Incentive Plan, as amended from time
to time.

     

    “Qualified Performance-Based
Award” means an Award that is either (i) intended to qualify for the
Section 162(m) Exemption and is made subject to performance goals based on
Qualified Business Criteria as set forth in Section 10.8(b), or (ii) an
Option.

     

    “Qualified Business
Criteria” means one or more of the Business Criteria listed in Section
10.8(b) upon which performance goals for certain Qualified Performance-Based
Awards may be established by the Committee.

     

    “Restricted Stock
Award” means Stock granted to a Participant under Article 9 that is
subject to certain restrictions and to risk of forfeiture.

     

    “Section 162(m)
Exemption” means the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C)
of the Code or any successor provision thereto.

     

    “Shares” means shares
of the Company’s Stock. If there has been an adjustment or substitution pursuant
to Section 11.1, the term “Shares” shall also include any shares of stock or
other securities that are substituted for Shares or into which Shares are
adjusted pursuant to Section 11.1.

     

    “Stock” means the
$0.001 par value common stock of the Company and such other securities of the
Company as may be substituted for Stock pursuant to
Article 11.

     

    “Subsidiary” means any
corporation, limited liability company, partnership or other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company. Notwithstanding the above, with respect
to an Incentive Stock Option, Subsidiary shall have the meaning set forth in
Section 424(f) of the Code.

     

    
      
        
        

      

      
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    EXHIBIT
10.36

     

    “1933 Act” means the
Securities Act of 1933, as amended from time to time.

     

    “1934 Act” means the
Securities Exchange Act of 1934, as amended from time to time.

     

    ARTICLE 3

    TERM
OF PLAN

     

    3.1           Effective Date.  The
Plan was approved by the Board on December 17, 2008 (“the
Effective Date”), subject to the approval by a majority of the shareholders
present and entitled to vote thereon at the April 28, 2009 Annual Meeting of
Shareholders, and is continued in effect until terminated, amended or suspended
as permitted under Article 12 hereof.

     

    3.2           Termination of Plan.  The Plan shall
terminate on the tenth anniversary of the Effective Date unless earlier
terminated as provided herein. The termination of the Plan on such date shall
not affect the validity of any Award outstanding on the date of termination;
such outstanding Awards shall continue to be governed by the terms and
conditions of this Plan and the applicable Award Certificates. No Incentive
Stock Options may be granted more than ten years after the earlier of (a)
adoption of this Plan by the Board, or (b) the Effective Date.

     

    ARTICLE 4

    ADMINISTRATION

     

    4.1           Committee.  The Plan shall
be administered by a Committee appointed by the Board (which Committee shall
consist of at least two directors) or, at the discretion of the Board from time
to time, the Plan may be administered by the Board. It is intended that at least
two of the directors appointed to serve on the Committee shall be “non-employee
directors” (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and
“outside directors” (within the meaning of Code Section 162(m)) and that any
such members of the Committee who do not so qualify shall abstain from
participating in any decision to make or administer Awards that are made to
Eligible Participants who at the time of consideration for such Award (i) are
persons subject to the short-swing profit rules of Section 16 of the 1934 Act,
or (ii) are reasonably anticipated to become Covered Employees during the term
of the Award. However, the fact that a Committee member fails to qualify under
either of the foregoing requirements or fails to abstain from such action shall
not invalidate any Award made by the Committee which Award is otherwise validly
made under the Plan. The members of the Committee shall be appointed by, and may
be changed at any time and from time to time in the discretion of, the Board.
The Board may reserve to itself any or all of the authority and responsibility
of the Committee under the Plan or may act as administrator of the Plan for any
and all purposes. To the extent the Board has reserved any authority and
responsibility or during any time that the Board is acting as administrator of
the Plan, it shall have all the powers of the Committee hereunder, and any
reference herein to the Committee (other than in this Section 4.1) shall include
the Board. To the extent any action of the Board under the Plan conflicts with
actions taken by the Committee, the actions of the Board shall
control.

    
      
         

      

      
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    EXHIBIT
10.36

     

    4.2        Action and Interpretations by the
Committee.  For purposes of
administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and
purposes of the Plan and make such other determinations, not inconsistent with
the Plan, as the Committee may deem appropriate. The Committee’s interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee regarding the Plan are final,
binding, and conclusive on all parties. Each member of the Committee is entitled
to, in good faith, rely or act upon any report or other information furnished to
that member by any officer or other employee of the Company or any Affiliate,
the Company’s or an Affiliate’s independent certified public accountants,
Company counsel or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the
Plan.

     

    4.3        Authority of Committee.  Except as
provided below, the Committee has the exclusive power, authority and discretion
to:

     

    (a)           Grant
Awards;

     

    (b)           Designate
Participants;

     

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

     

    (d)           Determine
the number of Awards to be granted and the number of Shares or dollar amount to
which an Award will relate;

     

    (e)           Determine
the terms and conditions of any Award granted under the Plan, including but not
limited to, the exercise price, base price, or purchase price, any restrictions
or limitations on the Award, any schedule for lapse of forfeiture restrictions
or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole
discretion determines;

     

    (f)           Accelerate
the vesting, exercisability or lapse of restrictions of any outstanding Award,
in accordance with Article 10, based in each case on such considerations as
the Committee in its sole discretion determines;

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
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    EXHIBIT
10.36

     

    (l)           Amend
the Plan or any Award Certificate as provided herein; and

     

    (m)          Adopt
such modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of non-U.S. jurisdictions in which the
Company or any Affiliate may operate, in order to assure the viability of the
benefits of Awards granted to participants located in such other jurisdictions
and to meet the objectives of the Plan.

     

    Notwithstanding
the above, the Board may, by resolution, expressly delegate to a special
committee, consisting of one or more directors who may but need not be officers
of the Company, the authority, within specified parameters, to (i) designate
employees and/or consultants of the Company or any of its Affiliates to be
recipients of Awards under the Plan, and (ii) to determine the number of such
Awards to be received by any such Participants; provided, however, that such
delegation of duties and responsibilities to an officer of the Company may not
be made with respect to the grant of Awards to eligible participants (a) who are
subject to Section 16(a) of the 1934 Act at the Grant Date, or (b) who as of the
Grant Date are reasonably anticipated to be become Covered Employees during the
term of the Award. The acts of such delegates shall be treated hereunder as acts
of the Board and such delegates shall report regularly to the Board and the
Compensation Committee regarding the delegated duties and responsibilities and
any Awards so granted.

     

    4.4        Award Certificates.  Each Award shall
be evidenced by an Award Certificate. Each Award Certificate shall include such
provisions, not inconsistent with the Plan, as may be specified by the
Committee.

     

    ARTICLE 5

    SHARES
SUBJECT TO THE PLAN

     

    5.1        Number of Shares.  Subject to
adjustment as provided in Sections 5.2 and 11.1, the aggregate number of Shares
reserved and available for issuance pursuant to Awards granted under the Plan
shall be 2,317,000.

     

    5.2        Share Counting.  Shares covered
by an Award shall be subtracted from the Plan share reserve as of the date of
grant, but shall be added back to the Plan share reserve in accordance with this
Section 5.2.

     

    (a)           To
the extent that an Award is canceled, terminates, expires, is forfeited or
lapses for any reason, any unissued or forfeited Shares subject to the Award
will again be available for issuance pursuant to Awards granted under the
Plan.

     

    (b)           Shares
subject to Awards settled in cash will again be available for issuance pursuant
to Awards granted under the Plan.

     

    (c)           Substitute
Awards granted pursuant to Section 10.11 of the Plan shall not count against the
Shares otherwise available for issuance under the Plan under Section
5.1.

     

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

    
      
         

      

      
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    EXHIBIT
10.36

     

    ARTICLE 6

    ELIGIBILITY

     

    6.1        General.  Awards may be
granted only to Eligible Participants; except that Incentive Stock Options may
be granted to only to Eligible Participants who are employees of the Company or
a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code.
Eligible Participants who are service providers to an Affiliate may be granted
Options under this Plan only if the Affiliate qualifies as an “eligible issuer
of service recipient stock” within the meaning of the regulations under Code
Section 409A.

     

    ARTICLE 7

    STOCK
OPTIONS

     

    7.1        General.  The Committee is
authorized to grant Options to Participants on the following terms and
conditions:

     

    (a)           Exercise
Price.  The exercise price per Share under an Option shall be
determined by the Committee; provided that the exercise price for any Option
(other than an Option issued as a substitute Award pursuant to Section
10.11 shall not be
less than the Fair Market Value as of the Grant Date.

     

    (b)           Time and Conditions of
Exercise.  The Committee shall determine the time or times at
which an Option may be exercised in whole or in part, subject to Section 7.1(d).
The Committee shall also determine the performance or other conditions, if any,
that must be satisfied before all or part of an Option may be exercised or
vested.

     

    (c)           Payment.  The
Committee shall determine the methods by which the exercise price of an Option
may be paid, the form of payment, including, without limitation, cash, Shares,
or other property (including “cashless exercise” arrangements), and the methods
by which Shares shall be delivered or deemed to be delivered to
Participants.

     

    (d)           Exercise
Term.  Except for Nonstatutory Options granted to Participants
outside the United States, no Option granted under the Plan shall be exercisable
for more than ten years from the Grant Date.

     

    (e)           No Deferral
Feature.  No Option shall provide for any feature for the
deferral of compensation other than the deferral of recognition of income until
the exercise or disposition of the Option.

     

    7.2         Incentive Stock Options.  The terms of any
Incentive Stock Options granted under the Plan must comply with the requirements
of Section 422 of the Code. If all of the requirements of Section 422 of the
Code are not met, the Option shall automatically become a Nonstatutory Stock
Option.

    
      
         

      

      
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    EXHIBIT
10.36

     

    ARTICLE 8

    PERFORMANCE
SHARES

     

    8.1           Grant of Performance
Shares.  The Committee is
authorized to grant Performance Shares to Participants on such terms and
conditions as may be selected by the Committee. The Committee shall have the
complete discretion to determine the number of Performance Shares granted to
each Participant and to designate the provisions of such Performance Shares as
provided in Section 4.3. All Performance Shares shall be evidenced by an Award
Certificate or a written program established by the Committee, pursuant to which
Performance Shares are awarded under the Plan under uniform terms, conditions
and restrictions set forth in such written program.

     

    8.2           Performance Goals.  The Committee
may establish performance goals for Performance Shares which may be based on any
criteria selected by the Committee. Such performance goals may be described in
terms of Company-wide objectives or in terms of objectives that relate to the
performance of the Participant, an Affiliate or a division, region, department
or function within the Company or an Affiliate. If the Committee determines that
a change in the business, operations, corporate structure or capital structure
of the Company or the manner in which the Company or an Affiliate conducts its
business, or other events or circumstances render performance goals to be
unsuitable, the Committee may modify such performance goals in whole or in part,
as the Committee deems appropriate. If a Participant is promoted, demoted or
transferred to a different business unit or function during a performance
period, the Committee may determine that the performance goals or performance
period are no longer appropriate and may (i) adjust, change or eliminate the
performance goals or the applicable performance period as it deems appropriate
to make such goals and period comparable to the initial goals and period, or
(ii) make a cash payment to the participant in amount determined by the
Committee. The foregoing two sentences shall not apply with respect to an Award
of Performance Shares that is intended to be a Qualified Performance-Based
Award.

     

    8.3           Right to Payment.  The grant of a
Performance Share to a Participant will entitle the Participant to receive at a
specified later time a specified number of Shares, or the equivalent value in
cash or other property, if the performance goals established by the Committee
are achieved and the other terms and conditions thereof are satisfied. The
Committee shall set performance goals and other terms or conditions to payment
of the Performance Shares in its sole discretion which, depending on the extent
to which they are met, will determine the number of the Performance Shares that
will be earned by the Participant.

     

    8.4           Other Terms.  Performance
Shares may be payable in cash, Stock, or other property, and have such other
terms and conditions as determined by the Committee and reflected in the Award
Certificate.

     

    ARTICLE 9

    RESTRICTED
STOCK

     

    9.1           Grant of Restricted
Stock.  Subject to the terms and conditions of this
Article 9, the Committee is authorized to make Awards of Restricted Stock
to Participants in such amounts and subject to such terms and conditions as may
be selected by the Committee. An Award of Restricted Stock shall be evidenced by
an Award Certificate setting forth the terms, conditions, and restrictions
applicable to the Award, and may include without limitation first refusal
rights, repurchase rights, co-sale rights, and drag-along
rights.

    
      
         

      

      
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    EXHIBIT
10.36

     

    9.2           Issuance and Restrictions.  Restricted Stock
shall be subject to such restrictions on transferability and other restrictions
as the Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). Subject to the remaining terms and conditions of the Plan,
these restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter. Except as otherwise provided in an Award Certificate or any
special Plan document governing an Award, the Participant shall have all of the
rights of a shareholder with respect to the Restricted Stock.

     

    9.3           Forfeiture.  Except as
otherwise determined by the Committee at the time of the grant of the Award or
thereafter, upon termination of Continuous Status as a Participant during the
applicable restriction period or upon failure to satisfy a performance goal
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited; provided, however, that the
Committee may provide in any Award Certificate, subject to the terms and
conditions of the Plan, that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part in the event of terminations
resulting from specified causes, including, but not limited to, death,
Disability, or for the convenience or in the best interests of the
Company.

     

    9.4           Delivery of Restricted
Stock.  Shares of
Restricted Stock shall be delivered to the Participant at the time of grant
either by book-entry registration or by delivering to the Participant, or a
custodian or escrow agent (including, without limitation, the Company or one or
more of its employees) designated by the Committee, a stock certificate or
certificates registered in the name of the Participant. If physical certificates
representing shares of Restricted Stock are registered in the name of the
Participant, such certificates must bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted
Stock.

     

    ARTICLE 10

    PROVISIONS
APPLICABLE TO AWARDS

     

    10.1     
   Stand-Alone
and Tandem Awards.  Awards granted
under the Plan may, in the sole discretion of the Committee, be granted either
alone or in addition to, in tandem with, any other Award granted under the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.

     

    10.2         Term of Award.  The term of each
Award shall be for the period as determined by the Committee, provided that in
no event shall the term of any Incentive Stock Option exceed a period of ten
years from its Grant Date.

    
      
         

      

      
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    EXHIBIT
10.36

     

    10.3         Form of Payment for
Awards.  Subject to the
terms of the Plan and any applicable law or Award Certificate, payments or
transfers to be made by the Company or an Affiliate on the grant or exercise of
an Award may be made in such form as the Committee determines at or after the
Grant Date, including without limitation, cash, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or (except with respect to Options) on a deferred basis, in
each case determined in accordance with rules adopted by, and at the discretion
of, the Committee.

     

    10.4         Limits on Transfer.  No right or
interest of a Participant in any unexercised or restricted Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company
or an Affiliate, or shall be subject to any lien, obligation, or liability of
such Participant to any other party other than the Company or an Affiliate. No
unexercised or restricted Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code if such
Section applied to an Award under the Plan; provided, however, that the
Committee may (but need not) permit other transfers where the Committee
concludes that such transferability (i) does not result in accelerated taxation,
(ii) does not cause any Option intended to be an Incentive Stock Option to fail
to be described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any factors deemed relevant, including without
limitation, state or federal tax or securities laws applicable to transferable
Awards.

     

    10.5         Beneficiaries.  Notwithstanding
Section 10.4, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any
rights under the Plan is subject to all terms and conditions of the Plan and any
Award Certificate applicable to the Participant, except to the extent the Plan
and Award Certificate otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee. If no beneficiary has been
designated or survives the Participant, payment shall be made to the
Participant’s estate. Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.

     

    10.6         Stock Trading
Restrictions.  All Stock
issuable under the Plan is subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal or state securities laws, rules and regulations and the rules of any
national securities exchange or automated quotation system on which the Stock is
listed, quoted, or traded.  The Committee may place
legends on any Stock certificate or issue instructions to the transfer agent to
reference restrictions applicable to the Stock.

     

    10.7         Effect of a Change in
Control.  Upon the
occurrence or in anticipation of a Change in Control, the Committee may, in its
sole discretion, provide (i) that Awards will be settled in cash rather than
Stock, (ii) that Awards or any portion thereof will become immediately vested
and exercisable and will expire after a designated period of time to the extent
not then exercised, (iii) that Awards will be assumed by another party to a
transaction or otherwise be equitably converted or substituted in connection
with such transaction, (iv) that outstanding Awards may be settled by payment in
cash or cash equivalents equal to the excess of the Fair Market Value of the
underlying Stock, as of a specified date associated with the transaction, over
the exercise price of the Award, (v) that performance targets and performance
periods for Qualified Performance-Based Awards will be modified, consistent with
Code Section 162(m) where applicable, or (vi) any combination of the foregoing.
To the extent that any accelerated vesting causes Incentive Stock Options to
exceed the dollar limitation set forth in Code Section 422(d), the excess
Options shall be deemed to be Nonstatutory Stock Options. The Committee’s
determination need not be uniform and may be different for different
Participants whether or not such Participants are similarly
situated.

    
      
         

      

      
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    EXHIBIT
10.36

     

    10.8      Qualified Performance-Based
Awards.

     

    (a)           The
provisions of the Plan are intended to ensure that all Options granted hereunder
to any Covered Employee shall qualify for the Section 162(m) Exemption; provided
that the exercise or base price of such Award is not less than the Fair Market
Value of the Shares on the Grant Date.

     

    (b)           When
granting any other Award, the Committee may designate such Award as a Qualified
Performance-Based Award, based upon a determination that the recipient is or may
be a Covered Employee with respect to such Award, and the Committee wishes such
Award to qualify for the Section 162(m) Exemption. If an Award is so designated,
the Committee shall establish performance goals for such Award within the time
period prescribed by Section 162(m) of the Code based on one or more of the
following Qualified Business Criteria, which may be expressed in terms of
Company-wide objectives or in terms of objectives that relate to the performance
of an Affiliate or a unit, division, region, department or function within the
Company or an Affiliate:

     

    
      	
               
      

            	
              ·

            	
              Gross
      or net revenue (including whether in the aggregate or attributable to
      specific products)

            

    

     

    
      	
               
      

            	
              ·

            	
              Cost
      of goods sold and gross margin

            

    

     

    
      	
               
      

            	
              ·

            	
              Costs
      and expenses, including research & development and selling, general
      & administrative

            

    

     

    
      	
               
      

            	
              ·

            	
              Income
      (gross, operating, net, etc.)

            

    

     

    
      	
               
      

            	
              ·

            	
              Earnings,
      including before interest, taxes, depreciation and amortization (whether
      in the aggregate or on a per share
basis)

            

    

     

    
      	
               
      

            	
              ·

            	
              Cash
      flows and share price

            

    

     

    
      	
               
      

            	
              ·

            	
              Return
      on investment, capital, equity

            

    

     

    
      	
               
      

            	
              ·

            	
              Manufacturing
      efficiency if applicable (including yield enhancement and cycle time
      reductions), quality improvements and customer
  satisfaction

            

    

     

    
      	
               
      

            	
              ·

            	
              Product
      life cycle management if applicable (including product and technology
      design, development, transfer, manufacturing introduction, and sales price
      optimization and management)

            

    

    
      
         

      

      
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      EXHIBIT
10.36

    

     

    
      	
               
      

            	
              ·

            	
              Economic
      profit or loss

            

    

     

    
      	
               
      

            	
              ·

            	
              Market
      share

            

    

     

    
      	
               
      

            	
              ·

            	
              Employee
      retention, compensation, training and development, including succession
      planning

            

    

     

    
      	
               
      

            	
              ·

            	
              Objective
      goals consistent with the Participant’s specific duties and
      responsibilities, designed to further the financial, operational and other
      business interests of the Company, including goals and objectives with
      respect to regulatory compliance
matters.

            

    

     

    Performance
goals with respect to the foregoing Qualified Business Criteria may be specified
in absolute terms (including completion of pre-established projects, such as the
introduction of specified products), in percentages, or in terms of growth from
period to period or growth rates over time as well as measured relative to an
established or specially-created performance index of Company competitors, peers
or other members of relevant industries. Any member of an index that disappears
during a measurement period shall be disregarded for the entire measurement
period. Performance goals need not be based upon an increase or positive result
under a business criterion and could include, for example, the maintenance of
the status quo or the limitation of economic losses (measured, in each case, by
reference to a specific business criterion).

     

    (c)           Each
Qualified Performance-Based Award (other than an Option) shall be earned, vested
and payable (as applicable) only upon the achievement of performance goals
established by the Committee based upon one or more of the Qualified Business
Criteria, together with the satisfaction of any other conditions, including the
condition as to continued employment as set forth in subsection (f) below, as
the Committee may determine to be appropriate; provided, however, that the
Committee may provide, in its sole discretion, either in connection with the
grant thereof or by amendment thereafter, that achievement of such performance
goals will be waived upon the death or Disability of the Participant, or upon a
Change in Control. In addition, the Committee has the right, in connection with
the grant of a Qualified Performance-Based Award, in its sole discretion to
determine that the portion of such Award actually earned, vested and payable (as
applicable) shall be less than the portion that would be earned, vested and
payable based solely upon application of the applicable performance goals.
Performance periods established by the Committee for any such Qualified
Performance-Based Award may be as short as ninety (90) days and may be any
longer period.

     

    (d)           The
Committee may provide in any Qualified Performance-Based Award, at the time the
performance goals are established, that any evaluation of performance shall
include, exclude or otherwise equitably adjust for any of the following events
that occurs during a performance period: (a) asset write-downs or impairment
charges; (b) litigation or claim judgments or settlements; (c) the effect of
changes in tax laws, accounting principles or other laws or provisions affecting
reported results; (d) accruals for reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting Principles Board
Opinion No. 30 or
in management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year; (f) acquisitions or divestitures; and (g) foreign exchange
gains and losses. To the extent such inclusions or exclusions affect Awards to
Covered Employees, they shall be prescribed in a form and at a time that meets
the requirements of Code Section 162(m) for deductibility.

    
      
         

      

      
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    EXHIBIT
10.36

     

    (e)           Any
payment of a Qualified Performance-Based Award granted with performance goals
pursuant to subsection (c) above shall be conditioned on the written
certification of the Committee in each case that the performance goals and any
other material conditions were satisfied. Written certification may take the
form of a Committee resolution passed by a majority of the Committee at a
properly convened meeting or through unanimous action by the Committee via
action by written consent. The certification requirement also may be satisfied
by a separate writing executed by the Chairman of the Committee, acting in his
capacity as such, following the foregoing Committee action or by the Chairman
executing approved minutes of the Committee in which such determinations were
made. Except as specifically provided in subsection (c), no Qualified
Performance-Based Award held by a Covered Employee or an employee who in the
reasonable judgment of the Committee may be a Covered Employee on the date of
payment, may be amended, nor may the Committee exercise any discretionary
authority it may otherwise have under the Plan with respect to a Qualified
Performance-Based Award under the Plan, in any manner to waive the achievement
of the applicable performance goal based on Qualified Business Criteria or to
increase the amount payable pursuant thereto or the value thereof, or otherwise
in a manner that would cause the Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption.

     

    (f)           With
respect to a Participant who is an officer of the Company, any payment of a
Qualified Performance-Based Award granted with performance goals pursuant to
subsection (c) above shall be conditioned on the officer having remained
continuously employed by the Company or an Affiliate for the entire performance
or measurement period, including, as well, through the date of determination and
certification of the payment of any such Award pursuant to subsection (e) above
(the “Certification Date”). For purposes of the Plan, with respect to any given
performance or measurement period, an officer of the Company (i) who terminates
employment (regardless of cause) or who otherwise ceases to be an officer, prior
to the Certification Date, and (ii) who, pursuant to a separate contractual
arrangement with the Company is entitled to receive payments from the Company
thereunder extending to or beyond such Certification Date as a result of such
termination or cessation in officer status, shall be deemed to have been
employed by the Company as an officer through the Certification Date for
purposes of payment eligibility.

     

    10.9      Termination of Employment.  Whether
military, government or other service or other leave of absence shall constitute
a termination of employment shall be determined in each case by the Committee at
its discretion, and any determination by the Committee shall be final and
conclusive. A Participant’s Continuous Status as a Participant shall not be
deemed to terminate (i) in a circumstance in which a Participant transfers from
the Company to an Affiliate, transfers from an Affiliate to the Company, or
transfers from one Affiliate to another Affiliate, or (ii) in the discretion of
the Committee as specified at or prior to such occurrence, in the case of a
spin-off, sale or disposition of the Participant’s employer from the Company or
any Affiliate. To the extent that this provision causes Incentive Stock Options
to extend beyond three months from the date a Participant is deemed to be an
employee of the Company, a Parent or Subsidiary for purposes of Sections 424(e)
and 424(f) of the Code, the Options held by such Participant shall be deemed to
be Nonstatutory Stock Options.

    
      
         

      

      
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    EXHIBIT
10.36

     

    10.10      Forfeiture Events.  The Committee
may specify in an Award Certificate that the Participant’s rights, payments and
benefits with respect to an Award shall be subject to reduction, cancellation,
forfeiture or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of an
Award. Such events shall include, but shall not be limited to, termination of
employment for cause, violation of material Company or Affiliate policies,
breach of noncompetition, confidentiality or other restrictive covenants that
may apply to the Participant, or other conduct by the Participant that is
detrimental to the business or reputation of the Company or any
Affiliate.

     

    10.11      Substitute Awards.  The Committee
may grant Awards under the Plan in substitution for stock and stock-based awards
held by employees of another entity who become employees of the Company or an
Affiliate as a result of a merger or consolidation of the former employing
entity with the Company or an Affiliate or the acquisition by the Company or an
Affiliate of property or stock of the former employing corporation. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the
circumstances.

     

    ARTICLE 11

    CHANGES
IN CAPITAL STRUCTURE

     

    11.1         Adjustments.  In the event of
a nonreciprocal transaction between the Company and its shareholders that causes
the per-share value of the Stock to change (including, without limitation, any
stock dividend, stock split, spin-off, rights offering, or large nonrecurring
cash dividend), the authorization limits under Section 5.1 shall be adjusted
proportionately, and the Committee shall make such adjustments to the Plan and
Awards as it deems necessary, in its sole discretion, to prevent dilution or
enlargement of rights immediately resulting from such transaction. Action by the
Committee may include: (i) adjustment of the number and kind of shares that may
be delivered under the Plan; (ii) adjustment of the number and kind of shares
subject to outstanding Awards; (iii) adjustment of the exercise price of
outstanding Awards or the measure to be used to determine the amount of the
benefit payable on an Award; and (iv) any other adjustments that the Committee
determines to be equitable. Without limiting the foregoing, in the event of a
subdivision of the outstanding Stock (stock-split), a declaration of a dividend
payable in Shares, or a combination or consolidation of the outstanding Stock
into a lesser number of Shares, the authorization limits under Section 5.1 shall
automatically be adjusted proportionately, and the Shares then subject to each
Award shall automatically, without the necessity for any additional action by
the Committee, be adjusted proportionately without any change in the aggregate
purchase price therefor. To the extent that any adjustments made pursuant to
this Article 11 cause Incentive Stock Options to cease to qualify as
Incentive Stock Options, such Options shall be deemed to be Nonstatutory Stock
Options.

    
      
         

      

      
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    EXHIBIT
10.36

     

    ARTICLE 12

    AMENDMENT,
MODIFICATION AND TERMINATION

     

    12.1       Amendment, Modification And
Termination.  The Board or the
Committee may, at any time and from time to time, amend, modify or terminate the
Plan without shareholder approval; provided, however, that if an amendment to
the Plan would, in the reasonable opinion of the Board or the Committee, either
(i) materially increase the number of Shares available under the Plan, (ii)
expand the types of awards under the Plan, (iii) materially expand the class of
participants eligible to participate in the Plan, (iv) materially extend the
term of the Plan, or (v) otherwise constitute a material change requiring
shareholder approval under applicable laws, policies or regulations or the
applicable listing or other requirements of an Exchange, then such amendment
shall be subject to shareholder approval; and provided, further, that the Board
or Committee may condition any other amendment or modification on the approval
of shareholders of the Company for any reason, including by reason of such
approval being necessary or deemed advisable to (i) to comply with the listing
or other requirements of an Exchange, or (ii) to satisfy any other tax,
securities or other applicable laws, policies or regulations.

     

    12.2       Awards Previously Granted.  At any time and
from time to time, the Committee may amend, modify or terminate any outstanding
Award without approval of the Participant; provided, however:

     

    (a)           Subject
to the terms of the applicable Award Certificate, such amendment, modification
or termination shall not, without the Participant’s consent, reduce or diminish
the value of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment or termination
(with the per-share value of an Option for this purpose being calculated as the
excess, if any, of the Fair Market Value as of the date of such amendment or
termination over the exercise or base price of such Award);

     

    (b)           No
termination, amendment, or modification of the Plan shall adversely affect any
Award previously granted under the Plan, without the written consent of the
Participant affected thereby. An outstanding Award shall not be deemed to be
“adversely affected” by a Plan amendment if such amendment would not reduce or
diminish the value of such Award determined as if the Award had been exercised,
vested, cashed in or otherwise settled on the date of such amendment (with the
per-share value of an Option for this purpose being calculated as the excess, if
any, of the Fair Market Value as of the date of such amendment over the exercise
or base price of such Award).

     

    12.3       Compliance Amendments.  Notwithstanding
anything in the Plan or in any Award Certificate to the contrary, the Committee
may amend the Plan or an Award Certificate, to take effect retroactively or
otherwise, as deemed necessary or advisable for the purpose of conforming the
Plan or Award Certificate to any present or future law relating to plans of this
or similar nature (including, but not limited to, Section 409A of the Code), and
to the administrative regulations and rulings promulgated thereunder. By
accepting an Award under this Plan, a Participant agrees to any amendment made
pursuant to this Section 12.3 to any Award granted under the Plan without
further consideration or action.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    EXHIBIT
10.36

     

    ARTICLE 13

    GENERAL
PROVISIONS

     

    13.1         No Rights to Awards; Non-Uniform
Determinations.  No Participant
or any Eligible Participant shall have any claim to be granted any Award under
the Plan. Neither the Company, its Affiliates nor the Committee is obligated to
treat Participants or Eligible Participants uniformly, and determinations made
under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or not
such Eligible Participants are similarly situated).

     

    13.2         No Shareholder Rights.  No Award gives a
Participant any of the rights of a shareholder of the Company unless and until
Shares are in fact issued to such person in connection with such
Award.

     

    13.3         Special Provisions Related to Section
409A of the Code.  To the extent applicable, the Plan, all
Awards and all Award Certificates shall be interpreted in accordance with
Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the effective date of the
Plan.  Notwithstanding any provision of the Plan or any Award
Certificate to the contrary, if, following the effective date of the Plan, the
Committee determines that any Award may be subject to Section 409A of the Code
and related Department of Treasury guidance (including such Department of
Treasury guidance as may be issued after the effective date of the Plan), the
Committee may adopt such amendments to the Plan and the applicable Award
Certificate or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate to (a) exempt the
Award from Section 409A of the Code and preserve the intended tax treatment of
the benefits provided with respect to the Award, or (b) comply with the
requirements of Section 409A of the Code and related Department of Treasury
guidance.

     

    13.4         Withholding.  The Company or
any Affiliate shall have the authority and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes (including the Participant’s FICA obligation)
required by law to be withheld with respect to any exercise, lapse of
restriction or other taxable event arising as a result of the Plan. With respect
to withholding required upon any taxable event under the Plan, the Committee
may, at the time the Award is granted or thereafter, require or permit that any
such withholding requirement be satisfied, in whole or in part, by withholding
from the Award Shares having a Fair Market Value on the date of withholding
equal to the minimum amount (and not any greater amount) required to be withheld
for tax purposes, all in accordance with such procedures as the Committee
establishes. All such elections shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems
appropriate.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    EXHIBIT
10.36

     

    13.5       No Right to Continued
Service.  Nothing in the
Plan, any Award Certificate or any other document or statement made with respect
to the Plan, shall interfere with or limit in any way the right of the Company
or any Affiliate to terminate any Participant’s employment or status as an
officer, director or consultant at any time, nor confer upon any Participant any
right to continue as an employee, officer, director or consultant of the Company
or any Affiliate, whether for the duration of a Participant’s Award or
otherwise. Neither an Award nor any benefits arising under this Plan shall
constitute an employment contract with the Company or any Affiliate and,
accordingly, subject to Article 12, this Plan and the benefits hereunder
may be terminated at any time in the sole and exclusive discretion of the Board
without giving rise to any liability on the part of the Company or an of its
Affiliates.

     

    13.6       Relationship to Other
Benefits.  No payment under
the Plan shall be taken into account in determining any benefits under any
pension, retirement, savings, profit sharing, group insurance, welfare or
benefit plan of the Company or any Affiliate unless provided otherwise in such
other plan.

     

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

     

    13.8     
 Gender and
Number.  Except where
otherwise indicated by the context, any masculine term used herein also shall
include the feminine; the plural shall include the singular and the singular
shall include the plural.

     

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

     

    13.10    Government and Other
Regulations.

     

    (a)           Notwithstanding
any other provision of the Plan, no Participant who acquires Shares pursuant to
the Plan may, during any period of time that such Participant is an affiliate of
the Company (within the meaning of the rules and regulations of the Securities
and Exchange Commission under the 1933 Act), sell such Shares, unless such offer
and sale is made (i) pursuant to an effective registration statement under the
1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant
to an appropriate exemption from the registration requirement of the 1933 Act,
such as that set forth in Rule 144 promulgated under the 1933 Act.

     

    (b)           Notwithstanding
any other provision of the Plan, if at any time the Committee shall determine
that the registration, listing or qualification of the Shares covered by an
Award upon any Exchange or under any foreign, federal, state or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Award or the purchase or receipt of Shares thereunder, no Shares may be
purchased, delivered or received pursuant to such Award unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Committee. Any
Participant receiving or purchasing Shares pursuant to an Award shall make such
representations and agreements and furnish such information as the Committee may
request to assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to the Committee’s
determination that all related requirements have been fulfilled. The Company
shall in no event be obligated to register any securities pursuant to the 1933
Act or applicable state or foreign law or to take any other action in order to
cause the issuance and delivery of such certificates to comply with any such
law, regulation or requirement.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    EXHIBIT
10.36

     

    13.11      Governing Law.  To the extent
not governed by federal law, the Plan and all Award Certificates shall be
construed in accordance with and governed by the laws of the State of California
without giving effect to principles of conflict of laws.

     

    13.12      Additional Provisions.  Each Award
Certificate may contain such other terms and conditions as the Committee may
determine; provided that such other terms and conditions are not inconsistent
with the provisions of the Plan.

     

    13.13      No Limitations on Rights of
Company.  The grant of any
Award shall not in any way affect the right or power of the Company to make
adjustments, reclassification or changes in its capital or business structure or
to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of
its business or assets. The Plan shall not restrict the authority of the
Company, for proper corporate purposes, to draft or assume awards, other than
under the Plan, to or with respect to any person. If the Committee so directs,
the Company may issue or transfer Shares to an Affiliate, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Affiliate will transfer such Shares to a Participant in accordance with
the terms of an Award granted to such Participant and specified by the Committee
pursuant to the provisions of the Plan.

     

    13.14      Indemnification.  To the extent
permitted under applicable law, each person who is or
shall have been a member of the Committee, or of the Board, or an officer of the
Company to whom authority was delegated in accordance with Article 4 shall
be indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit, or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan and against and from
any and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf,
unless such loss, cost, liability, or expense is a result of his or her own
willful misconduct or except as expressly provided by statute. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.

     

    13.15      Availability of
Information.  To the extent required by applicable law, the
Company shall provide to each Participant and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the period
such Participant or purchaser has one or more Options outstanding, and, in the
case of an individual who acquires Shares pursuant to the Plan, during the
period such individual owns such Shares, copies of annual financial
statements.

    
      
         

      

      
        20EXHIBIT
10.37

     

    OPTION
AGREEMENT

    TERMS
AND CONDITIONS

     

    1.           Grant of
Option.  The Company hereby grants to the Optionee named on the
Notice of Stock Option Grant (“Optionee”), under the Plan, stock options to
purchase from the Company (the “Options”), on the terms and on conditions set
forth in this agreement (this “Agreement”), the number of shares indicated on
the Notice of Stock Option Grant of the Company’s $0.001 par value common stock,
at the exercise price per share set forth on the Notice of Stock Option
Grant.  Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Plan.

     

    2.           Vesting of
Options.  The Option shall vest (become exercisable) in
accordance with the schedule shown on the Notice of Stock Option
Grant.  Notwithstanding the foregoing vesting schedule, upon
Optionee’s death or Disability during his or her Continuous Status as a
Participant, or upon a Change in Control, all Options shall become fully vested
and exercisable.

     

    3.           Term of Options and Limitations on
Right to Exercise.  The term of the Options will be for a
period of 10 years, expiring at 5:00 p.m., Pacific Time, on the
tenth anniversary of the Grant Date (the “Expiration Date”).  To
the extent not previously exercised, the Options will lapse prior to the
Expiration Date upon the earliest to occur of the following
circumstances:

     

    (a)           Thirty
(30) days after the termination of Optionee’s Continuous Status as a Participant
for any reason other than by reason of Optionee’s death or
Disability.

     

    (b)           Twelve
(12) months after termination of Optionee’s Continuous Status as Participant by
reason of Disability.

     

    (c)           Twelve
(12) months after the date of Optionee’s death, if Optionee dies while employed
or during the thirty day period described in subsection (a) above or during the
twelve-month period described in subsection (b) above and before the Options
otherwise lapse.  Upon Optionee’s death, the Options may be exercised
by Optionee’s beneficiary designated pursuant to the Plan.

     

    The
Committee may, prior to the lapse of the Options under the circumstances
described in paragraphs (a), (b) or (c) above, extend the time to exercise the
Options as determined by the Committee in writing, but in no event beyond the
Expiration Date.  If Optionee returns to service with the Company
during the designated post-termination exercise period, then Optionee shall be
restored to the status Optionee held prior to such termination but no vesting
credit will be earned for any period Optionee was not in Continuous Status as a
Participant.  If Optionee or his or her beneficiary exercises an
Option after termination of service, the Options may be exercised only with
respect to the Shares that were otherwise vested on Optionee’s termination of
service.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    EXHIBIT
10.37

    

    4.           Exercise of
Option.  The Options shall be exercised by (a) written notice
delivered to the Chief Financial Officer of the Company or his or her designee
at the address and in the form specified by the Company from time to time and
(b) payment to the Company in full for the Shares subject to such exercise
(unless the exercise is a broker-assisted cashless exercise, as described
below).  If the person exercising an Option is not Optionee, such
person shall also deliver with the notice of exercise appropriate proof of his
or her right to exercise the Option. Payment for such Shares may be, in (a)
cash, (b) Shares previously acquired by the purchaser, (c) withholding of Shares
from the Option, or (d) any combination thereof, for the number of Shares
specified in such written notice. The value of surrendered or withheld Shares
for this purpose shall be the Fair Market Value as of the last trading day
immediately prior to the exercise date. To the extent permitted under Regulation
T of the Federal Reserve Board, and subject to applicable securities laws and
any limitations as may be applied from time to time by the Committee (which need
not be uniform), the Options may be exercised through a broker in a so-called
“cashless exercise” whereby the broker sells the Option Shares on behalf of
Optionee and delivers cash sales proceeds to the Company in payment of the
exercise price.  In such case, the date of exercise shall be deemed to
be the date on which notice of exercise is received by the Company and the
exercise price shall be delivered to the Company by the settlement
date.

     

    5.           Beneficiary
Designation.  Optionee may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of Optionee hereunder
and to receive any distribution with respect to the Options upon Optionee’s
death.  A beneficiary, legal guardian, legal representative, or other
person claiming any rights hereunder is subject to all terms and conditions of
this Agreement and the Plan, and to any additional restrictions deemed necessary
or appropriate by the Committee.  If no beneficiary has been
designated or survives Optionee, the Options may be exercised by the legal
representative of Optionee’s estate, and payment shall be made to Optionee’s
estate.  Subject to the foregoing, a beneficiary designation may be
changed or revoked by Optionee at any time provided the change or revocation is
filed with the Company.

     

    6.           Withholding.  The
Company or any employer Affiliate has the authority and the right to deduct or
withhold, or require Optionee to remit to the employer, an amount sufficient to
satisfy federal, state, and local taxes (including Optionee’s FICA obligation)
required by law to be withheld with respect to any taxable event arising as a
result of the exercise of the Options. The withholding requirement may be
satisfied, in whole or in part, at the election of the Company, by withholding
from the Options Shares having a Fair Market Value on the date of withholding
equal to the minimum amount (and not any greater amount) required to be withheld
for tax purposes, all in accordance with such procedures as the Company
establishes.

     

    7.           Limitation of
Rights.  The Options do not confer to Optionee or Optionee’s
beneficiary designated pursuant to Paragraph 5 any rights of a shareholder of
the Company unless and until Shares are in fact issued to such person in
connection with the exercise of the Options.  Nothing in this
Agreement shall interfere with or limit in any way the right of the Company or
any Affiliate to terminate Optionee’s service at any time, nor confer upon
Optionee any right to continue in the service of the Company or any
Affiliate.

     

    8.           Restrictions on Transfer and
Pledge.  No right or interest of Optionee in the Options may be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or an Affiliate, or shall be subject to any lien, obligation, or
liability of Optionee to any other party other than the Company or an
Affiliate.  The Options are not assignable or transferable by Optionee
other than by will or the laws of descent and distribution or pursuant to a
domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if
such Section applied to an Option under the Plan; provided, however, that the
Committee may (but need not) permit other transfers.  The Options may
be exercised during the lifetime of Optionee only by Optionee or any permitted
transferee.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
10.37

     

    9.           Restrictions on Issuance of
Shares.  If at any time the Committee shall determine in its
discretion, that registration, listing or qualification of the Shares covered by
the Options upon any Exchange or under any foreign, federal, or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition to the exercise of the Options, the
Options may not be exercised in whole or in part unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the
Committee.

     

    10.        Amendment.  The
Committee may amend, modify or terminate the Award, Notice of Stock Option Grant
and this Agreement without approval of Optionee; provided, however, that such
amendment, modification or termination shall not, without Optionee’s consent,
reduce or diminish the value of this award determined as if it had been fully
vested and exercised on the date of such amendment or termination (with the
per-share value being calculated as the excess, if any, of the Fair Market Value
over the exercise price of the Options).

     

    11.        Plan Controls.  The
terms and conditions contained in the Plan are incorporated into and made a part
of the Notice of Stock Option Grant and this Agreement, and the Notice of Stock
Option Grant and this Agreement shall be governed by and construed in accordance
with the Plan.  In the event of any actual or alleged conflict between
the provisions of the Plan and the provisions of the Notice of Stock Option
Grant or this Agreement, the provisions of the Plan shall be controlling and
determinative.

     

    12.        Successors.  This
Agreement shall be binding upon any successor of the Company, in accordance with
the terms of this Agreement and the Plan.

     

    13.        Severability.  If
any one or more of the provisions contained in the Notice of Stock Option Grant
or this Agreement is invalid, illegal or unenforceable, the other provisions of
Notice of Stock Option Grant and this Agreement will be construed and enforced
as if the invalid, illegal or unenforceable provision had never been
included.

     

    14.        Notice.  Notices and
communications under the Notice of Stock Option Grant and this Agreement must be
in writing and either personally delivered or sent by registered or certified
United States mail, return receipt requested, postage
prepaid.  Notices to the Company must be addressed to: Notify
Technology Corporation, 1054 S. De Anza Boulevard, Suite 105, San
Jose, CA 95129, Attn: Secretary, or any other address designated by the Company
in a written notice to Optionee.  Notices to Optionee will be directed
to the address of Optionee then currently on file with the Company, or at any
other address given by Optionee in a written notice to the
Company.

    
      
         

      

      
        3

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