Document:

f8k021209ex10i_confederate.htm

    Exhibit
10.1

    
      

      
        	
                 

                CONFEDERATE
      MOTORS, INC.

              
	
                2008
      INCENTIVE PLAN

              
	 
      
	
                SECTION
      1.  PURPOSE

              

      

      
        	
                 

                The
      purpose of the Confederate Motors, Inc. 2008 Incentive Plan is to attract,
      retain and motivate employees, officers, directors, consultants, agents,
      advisors and independent contractors of the Company and its Related
      Companies by providing them the opportunity to acquire a proprietary
      interest in the Company and to align their interests and efforts to the
      long-term interests of the Company’s
  stockholders.

              

      

      
        	
                 

                SECTION
      2.  DEFINITIONS

              

      

      
        	
                 

                Certain
      capitalized terms used in the Plan have the meanings set forth in
      Appendix A.

              

      

      
        	
                 

                SECTION
      3.  ADMINISTRATION

              

      

      
        	
                 

                3.1Administration
      of the Plan

              

      

      
        	
                 

                The
      Plan shall be administered by the Board or the Compensation
      Committee.   The Compensation Committee shall be composed
      of two or more directors, each of whom is a “non-employee director” within
      the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any
      successor definition adopted by the Securities and Exchange
      Commission.  As used in this Plan, the term “Compensation
      Committee” shall be construed as if followed by the words “(if any)”; and
      nothing in this Plan requires the Board to have a Compensation
      Committee.

              

      

      
        	
                 

                3.2Delegation

              

      

      
        	
                 

                Notwithstanding
      the foregoing, the Board may delegate responsibility for administering the
      Plan with respect to designated classes of Eligible Persons to different
      committees consisting of one or more members of the Board, subject to such
      limitations as the Board deems appropriate, except with respect to Awards
      to any Participants who are then subject to Section 16 of the
      Exchange Act.  Members of any committee shall serve for such
      term as the Board may determine, subject to removal by the Board at any
      time.  To the extent consistent with applicable law, the Board
      or the Compensation Committee may authorize one or more officers of the
      Company to grant Awards to designated classes of Eligible Persons, within
      limits specifically prescribed by the Board or the Compensation Committee;
      provided, however, that no such officer shall have or obtain authority to
      grant Awards to himself or herself or to any person then subject to
      Section 16 of the Exchange Act.  All references in the Plan to
      the “Committee” shall be, as applicable, to the Board, the Compensation
      Committee or any other committee or any officer to whom the Board or the
      Compensation Committee has delegated authority to administer the
      Plan.

              

      

       

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      
        	
                 

                3.3
      Administration and Interpretation by
Committee

              

      

      
        	
                 

                (a)           Except
      for the terms and conditions explicitly set forth in the Plan and to the
      extent permitted by applicable law, the Committee shall have full power
      and exclusive authority, subject to such orders or resolutions not
      inconsistent with the provisions of the Plan as may from time to time be
      adopted by the Board or a Committee composed of members of the Board, to
      (i) select the Eligible Persons to whom Awards may from time to time
      be granted under the Plan; (ii) determine the type or types of Award
      to be granted to each Participant under the Plan; (iii) determine the
      number of shares of Common Stock to be covered by each Award granted under
      the Plan; (iv) determine the terms and conditions of any Award
      granted under the Plan; (v) approve the forms of notice or agreement
      for use under the Plan; (vi) determine whether, to what extent and
      under what circumstances Awards may be settled in cash, shares of Common
      Stock or other property or canceled or suspended; (vii) determine
      whether, to what extent and under what circumstances cash, shares of
      Common Stock, other property and other amounts payable with respect to an
      Award shall be deferred either automatically or at the election of the
      Participant; (viii) interpret and administer the Plan and any
      instrument evidencing an Award, notice or agreement executed or entered
      into under the Plan; (ix) establish such rules and regulations as it
      shall deem appropriate for the proper administration of the Plan;
      (x) delegate ministerial duties to such of the Company’s employees as
      it so determines; and (xi) make any other determination and take any
      other action that the Committee deems necessary or desirable for
      administration of the Plan.

              
	
                 

                (b)            The Committee
      shall have the right, without stockholder approval, to cancel or amend
      outstanding Options or SARs for the purpose of repricing, replacing or
      regranting such Options or SARs with Options or SARs that have a purchase
      or grant price that is less than the purchase or grant price for the
      original Options or SARs except in connection with adjustments provided in
      Section 15.

              
	
                 

                (c)           The
      effect on the vesting of an Award of a Company-approved leave of absence
      or a Participant’s working less than full-time shall be determined by the
      Company’s chief human resources officer or other person performing that
      function or, with respect to directors or executive officers, by the
      Committee, whose determination shall be final.

              
	
                 

                (d)           Decisions
      of the Committee shall be final, conclusive and binding on all persons,
      including the Company, any Participant, any stockholder and any Eligible
      Person.  A majority of the members of the Committee may
      determine its actions.

              

      

      
        	
                 

                SECTION
      4.  SHARES SUBJECT TO THE
PLAN

              

      

      
        	
                 

                4.1
      Authorized Number of Shares

              

      

      
        	
                 

                Subject
      to adjustment from time to time as provided in Section 15.1, a
      maximum of One Million One Hundred and Five Thousand (1,105,000) shares of
      Common Stock shall be available for issuance under the
      Plan.  Shares issued under the Plan shall be drawn from
      authorized and unissued shares or shares now held or subsequently acquired
      by the Company as treasury shares.

              

      

       

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      
        	
                 

                4.2
      Share Usage

              

      

      
        	
                 

                (a)           Shares
      of Common Stock covered by an Award shall not be counted as used unless
      and until they are actually issued and delivered to a
      Participant.  If any Award lapses, expires, terminates or is
      canceled prior to the issuance of shares thereunder or if shares of Common
      Stock are issued under the Plan to a Participant and thereafter are
      forfeited to or otherwise reacquired by the Company, the shares subject to
      such Awards and the forfeited or reacquired shares shall again be
      available for issuance under the Plan.  Any shares of Common
      Stock (i) tendered by a Participant or retained by the Company as
      full or partial payment to the Company for the purchase price of an Award
      or to satisfy tax withholding obligations in connection with an Award, or
      (ii) covered by an Award that is settled in cash, or in a manner such
      that some or all of the shares of Common Stock covered by the Award are
      not issued, shall be available for Awards under the Plan.  The
      number of shares of Common Stock available for issuance under the Plan
      shall not be reduced to reflect any dividends or dividend equivalents that
      are reinvested into additional shares of Common Stock or credited as
      additional shares of Common Stock subject or paid with respect to an
      Award.

              
	
                 

                (b)           The
      Committee shall also, without limitation, have the authority to grant
      Awards as an alternative to or as the form of payment for grants or rights
      earned or due under other compensation plans or arrangements of the
      Company.

              
	
                 

                (c)           Notwithstanding
      anything in the Plan to the contrary, the Committee may grant Substitute
      Awards under the Plan.  Substitute Awards shall not reduce the
      number of shares authorized for issuance under the Plan.  In the
      event that an Acquired Entity has shares available for awards or grants
      under one or more preexisting plans not adopted in contemplation of such
      acquisition or combination, then, to the extent determined by the
      Committee, the shares available for grant pursuant to the terms of such
      preexisting plan (as adjusted, to the extent appropriate, using the
      exchange ratio or other adjustment or valuation ratio or formula used in
      such acquisition or combination to determine the consideration payable to
      holders of common stock of the entities that are parties to such
      acquisition or combination) may be used for Awards under the Plan and
      shall not reduce the number of shares of Common Stock authorized for
      issuance under the Plan; provided, however, that Awards using such
      available shares shall not be made after the date awards or grants could
      have been made under the terms of such preexisting plans, absent the
      acquisition or combination, and shall only be made to individuals who were
      not employees or directors of the Company or a Related Company prior to
      such acquisition or combination.  In the event that a written
      agreement between the Company and an Acquired Entity pursuant to which a
      merger or consolidation is completed is
      approved by the Board and that agreement sets forth the terms and
      conditions of the substitution for or assumption of outstanding awards of
      the Acquired Entity, those terms and conditions shall be deemed to be the
      action of the Committee without any further action by the Committee,
      except as may be required for compliance with Rule 16b-3 under the
      Exchange Act, and the persons holding such awards shall be deemed to be
      Participants.

              
	
                 

                (d)           Notwithstanding
      the other provisions in this Section 4.2, the maximum
      number of shares that may be issued upon the exercise of Incentive Stock
      Options shall equal the aggregate share number stated in Section 4.1,
      subject to adjustment as provided in
  Section 15.1.

              

      

       

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                SECTION
      5.  ELIGIBILITY

              

      

      
        	
                 

                An
      Award may be granted to any employee, officer or director of the Company
      or a Related Company whom the Committee from time to time
      selects.  An Award may also be granted to any consultant, agent,
      advisor or independent contractor for bona fide services rendered to the
      Company or any Related Company that (a) are not in connection with
      the offer and sale of the Company’s securities in a capital-raising
      transaction and (b) do not directly or indirectly promote or maintain
      a market for the Company’s
securities.

              

      

      
        	
                 

                SECTION
      6.  AWARDS

              

      

      
        	
                 

                6.1
      Form, Grant and Settlement of
Awards

              

      

      
        	
                 

                The
      Committee shall have the authority, in its sole discretion, to determine
      the type or types of Awards to be granted under the Plan.  Such
      Awards may be granted either alone or in addition to or in tandem with any
      other type of Award.  Any Award settlement may be subject to
      such conditions, restrictions and contingencies as the Committee shall
      determine.

              

      

      
        	
                 

                6.2
      Evidence of Awards

              

      

      
        	
                 

                Awards
      granted under the Plan shall be evidenced by a written, including an
      electronic, notice or agreement that shall contain such terms, conditions,
      limitations and restrictions as the Committee shall deem advisable and
      that are not inconsistent with the
Plan.

              

      

      
        	
                 

                6.3
      Deferrals

              

      

      
        	
                 

                The
      Committee may permit or require a Participant to defer receipt of the
      payment of any Award if and to the extent set forth in the instrument
      evidencing the Award at the time of grant.  If any such deferral
      election is permitted or required, the Committee, in its sole discretion,
      shall establish rules and procedures for such payment deferrals, which may
      include the grant of additional Awards or provisions for the payment or
      crediting of interest or dividend equivalents, including converting such
      credits to deferred stock unit equivalents; provided, however, that the
      terms of any deferrals under this Section 6.3 shall comply with all
      applicable law, rules and regulations, including, without limitation,
      Section 409A of the Code.

              

      

      
        	
                 

                6.4
      Dividends and Distributions

              

      

      
        	
                 

                Participants
      may, if and to the extent the Committee so determines and sets forth in
      the instrument evidencing the Award at the time of grant, be credited with
      dividends paid with respect to shares of Common Stock underlying an Award
      in a manner determined by the Committee in its sole
      discretion.  The Committee may apply any restrictions to the
      dividends or dividend equivalents that the Committee deems
      appropriate.  The Committee, in its sole discretion, may
      determine the form of payment of dividends or dividend equivalents,
      including cash, shares of Common Stock, Restricted Stock or Stock
      Units.

              

      

       

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                SECTION
      7.  OPTIONS

              

      

      
        	
                 

                7.1Grant
      of Options

              

      

      
        	
                 

                The
      Committee may grant Options designated as Incentive Stock Options or
      Nonqualified Stock Options.

              

      

      
        	
                 

                7.2Option
      Exercise Price

              

      

      
        	
                 

                The
      exercise price for shares purchased under an Option shall be at least 100%
      of the Fair Market Value on the Grant Date (and shall not be less than the
      minimum exercise price required by Section 422 of the Code with respect to
      Incentive Stock Options), except in the case of Substitute
      Awards.

              

      

      
        	
                 

                7.3Term
      of Options

              

      

      
        	
                 

                Subject
      to earlier termination in accordance with the terms of the Plan and the
      instrument evidencing the Option, the maximum term of a Nonqualified Stock
      Option shall be ten years from the Grant
Date.

              

      

      
        	
                 

                7.4Exercise
      of Options

              

      

      
        	
                 

                The
      Committee shall establish and set forth in each instrument that evidences
      an Option the time at which, or the installments in which, the Option
      shall vest and become exercisable, any of which provisions may be waived
      or modified by the Committee at any time.

              
	
                 

                To
      the extent an Option has vested and become exercisable, the Option may be
      exercised in whole or from time to time in part by delivery to or as
      directed or approved by the Company of a properly executed stock option
      exercise agreement or notice, in a form and in accordance with procedures
      established by the Committee, setting forth the number of shares with
      respect to which the Option is being exercised, the restrictions imposed
      on the shares purchased under such exercise agreement, if any, and such
      representations and agreements as may be required by the Committee,
      accompanied by payment in full as described in Sections 7.5 and
      13.  An Option may be exercised only for whole shares and may
      not be exercised for less than a reasonable number of shares at any one
      time, as determined by the
Committee.

              

      

      
        	
                 

                7.5Payment
      of Exercise Price

              

      

      
        	
                 

                The
      exercise price for shares purchased under an Option shall be paid in full
      to the Company by delivery of consideration equal to the product of the
      Option exercise price and the number of shares purchased.  Such
      consideration must be paid before the Company will issue the shares being
      purchased and must be in a form or a combination of forms acceptable to
      the Committee for that purchase, which forms may
  include:

              
	
                 

                (a)           cash;

              
	
                 

                (b)           check
      or wire transfer;

              

         

         

        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

         

         

        	
                 

                (c)           having
      the Company withhold shares of Common Stock that would otherwise be issued
      on exercise of the Option that have an aggregate Fair Market Value equal
      to the aggregate exercise price of the shares being purchased under the
      Option;

              
	
                 

                (d)           tendering
      (either actually or, so long as the Common Stock is registered under
      Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of
      Common Stock owned by the Participant that have an aggregate Fair Market
      Value equal to the aggregate exercise price of the shares being purchased
      under the Option;

              
	
                 

                (e)           so
      long as the Common Stock is registered under Section 12(b) or 12(g)
      of the Exchange Act, and to the extent permitted by law, delivery of a
      properly executed exercise notice, together with irrevocable instructions
      to a brokerage firm designated or approved by the Company to deliver
      promptly to the Company the aggregate amount of  proceeds to pay
      the Option exercise price and any withholding tax obligations that may
      arise in connection with the exercise, all in accordance with the
      regulations of the Federal Reserve Board; or

              
	
                 

                (f)           such
      other consideration as the Committee may
permit.

              

      

      
        	
                 

                7.6Effect
      of Termination of Service

              

      

      
        	
                 

                The
      Committee shall establish and set forth in each instrument that evidences
      an Option whether the Option shall continue to be exercisable, and the
      terms and conditions of such exercise, after a Termination of Service, any
      of which provisions may be waived or modified by the Committee at any
      time.  If not so established in the instrument evidencing the
      Option, the Option shall be exercisable according to the following terms
      and conditions, which may be waived or modified by the Committee at any
      time:

              
	
                 

                (a)           Any
      portion of an Option that is not vested and exercisable on the date of a
      Participant’s Termination of Service shall expire on such
      date.

              
	
                 

                (b)           Any
      portion of an Option that is vested and exercisable on the date of a
      Participant’s Termination of Service shall expire on the earliest to occur
      of:

              
	
                 

                (i)           if
      the Participant’s Termination of Service occurs for reasons other than
      Cause, Retirement, Disability or death, the date that is three months
      after such Termination of Service;

              
	
                 

                (ii)           if
      the Participant’s Termination of Service occurs by reason of Retirement,
      Disability or death, the one-year anniversary of such Termination of
      Service; and

              
	
                 

                (iii)           the
      Option Expiration Date.

              
	
                Notwithstanding
      the foregoing, if a Participant dies after his or her Termination of
      Service but while an Option is otherwise exercisable, the portion of the
      Option that is vested and exercisable on the date of such Termination of
      Service shall expire upon the earlier to occur of (y) the Option
      Expiration Date and (z) the one-year anniversary of the date of
      death, unless the Committee determines
  otherwise.

              

         

         

        
          
             

          

          
            -6-

            
              

            

          

          
             

          

        

         

         

        	
                 

                Also
      notwithstanding the foregoing, in case a Participant’s Termination of
      Service occurs for Cause, all Options granted to the Participant shall
      automatically expire upon first notification to the Participant of such
      termination, unless the Committee determines otherwise.  If a
      Participant’s employment or service relationship with the Company is
      suspended pending an investigation of whether the Participant shall be
      terminated for Cause, all the Participant’s rights under any Option shall
      likewise be suspended during the period of investigation.  If
      any facts that would constitute termination for Cause are discovered after
      a Participant’s Termination of Service, any Option then held by the
      Participant may be immediately terminated by the Committee, in its sole
      discretion.

              
	 
      
	
                (c)           If
      the exercise of the Option following a Participant’s Termination of
      Service, but while the Option is otherwise exercisable, would be
      prohibited solely because the issuance of Common Stock would violate
      either the registration requirements under the Securities Act or the
      Company’s insider trading policy, then the Option shall remain exercisable
      until the earlier of (i) the Option
      Expiration Date and (ii) the expiration of
      a period of three months (or such longer period of time as determined by
      the Committee in its sole discretion) after the Participant’s Termination
      of Service during which the exercise of the Option would not be in
      violation of such Securities Act or insider trading policy
      requirements.

              

      

      
        	
                 

                SECTION
      8.  INCENTIVE STOCK OPTION
LIMITATIONS

              

      

      
        	
                 

                Notwithstanding
      any other provisions of the Plan, the terms and conditions of any
      Incentive Stock Options shall in addition comply in all respects with
      Section 422 of the Code, or any successor provision, and any
      applicable regulations thereunder, including, to the extent required
      thereunder, the following:

              

      

      
        	
                 

                8.1Dollar
      Limitation

              

      

      
        	
                 

                To
      the extent the aggregate Fair Market Value (determined as of the Grant
      Date) of Common Stock with respect to which a Participant’s Incentive
      Stock Options become exercisable for the first time during any calendar
      year (under the Plan and all other stock option plans of the Company and
      its parent and subsidiary corporations) exceeds $100,000, such portion in
      excess of $100,000 shall be treated as a Nonqualified Stock
      Option.  In the event the Participant holds two or more such
      Options that become exercisable for the first time in the same calendar
      year, such limitation shall be applied on the basis of the order in which
      such Options are granted.

              

      

      
        	
                 

                8.2Eligible
      Employees

              

      

      
        	
                 

                Individuals
      who are not employees of the Company or one of its parent or subsidiary
      corporations may not be granted Incentive Stock
  Options.

              

      

      
        	
                 

                8.3Exercise
      Price

              

      

      
        	
                 

                The
      exercise price of an Incentive Stock Option shall be at least 100% of the
      Fair Market Value of the Common Stock on the Grant Date, and in the case
      of an Incentive Stock Option granted to a Participant who owns more than
      10% of the total combined voting power of all classes of the stock of the
      Company or of its parent or subsidiary corporations (a “Ten Percent
      Stockholder”), shall not be less than 110% of the Fair Market Value
      of the Common Stock on the Grant Date.  The determination of
      more than 10% ownership shall be made in accordance with Section 422
      of the Code.

              

      

       

       

       

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

       

      
        	
                 

                8.4Option
      Term

              

      

      
        	
                 

                Subject
      to earlier termination in accordance with the terms of the Plan and the
      instrument evidencing the Option, the maximum term of an Incentive Stock
      Option shall not exceed ten years, and in the case of an Incentive Stock
      Option granted to a Ten Percent Stockholder, shall not exceed five
      years.

              

      

      
        	
                 

                8.5
      Exercisability

              

      

      
        	
                 

                An
      Option designated as an Incentive Stock Option shall cease to qualify for
      favorable tax treatment as an Incentive Stock Option to the extent it is
      exercised (if permitted by the terms of the Option) (a) more than
      three months after the date of a Participant’s Termination of Service if
      termination was for reasons other than death or disability, (b) more
      than one year after the date of a Participant’s Termination of Service if
      termination was by reason of disability, or (c) after the Participant
      has been on leave of absence for more than 90 days, unless the
      Participant’s reemployment rights are guaranteed by statute or
      contract.

              

      

      
        	
                 

                8.6T
      axation of Incentive Stock Options

              

      

      
        	
                 

                In
      order to obtain certain tax benefits afforded to Incentive Stock Options
      under Section 422 of the Code, the Participant must hold the shares
      acquired upon the exercise of an Incentive Stock Option for two years
      after the Grant Date and one year after the date of
    exercise.

              
	
                 

                A
      Participant may be subject to the alternative minimum tax at the time of
      exercise of an Incentive Stock Option.  The Participant shall
      give the Company prompt notice of any disposition of shares acquired on
      the exercise of an Incentive Stock Option prior to the expiration of such
      holding periods.

              

      

      
        	
                 

                8.7Code
      Definitions

              

      

      
        	
                 

                For
      the purposes of this Section 8 “disability,” “parent corporation” and
      “subsidiary corporation” shall have the meanings attributed to those terms
      for purposes of Section 422 of the
Code.

              

      

      
        	
                 

                SECTION
      9.  STOCK APPRECIATION
RIGHTS

              

      

      
        	
                 

                9.1Grant
      of Stock Appreciation Rights

              

      

      
        	
                 

                The
      Committee may grant Stock Appreciation Rights to Participants at any time
      on such terms and conditions as the Committee shall determine in its sole
      discretion.  An SAR may be granted in tandem with an Option or
      alone (“freestanding”).  The grant price of a tandem SAR shall
      be equal to the exercise price of the related Option.  The grant
      price of a freestanding SAR shall be established in accordance with
      procedures for Options set forth in Section 7.2.  An SAR
      may be exercised upon such terms and conditions and for the term as the
      Committee determines in its sole discretion; provided, however, that,
      subject to earlier termination in accordance with the terms of the Plan
      and the instrument evidencing the SAR, the maximum term of a freestanding
      SAR shall be ten years, and in the case of a tandem SAR, (a) the term
      shall not exceed the term of the related Option and (b) the tandem SAR may
      be exercised for all or part of the shares subject to the related Option
      upon the surrender of the right to exercise the equivalent portion of the
      related Option, except that the tandem SAR may be exercised only with
      respect to the shares for which its related Option is then
      exercisable.

              

      

       

       

      
        
           

        

        
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                9.2Payment
      of SAR Amount

              

      

      
        	
                 

                Upon
      the exercise of an SAR, a Participant shall be entitled to receive payment
      in an amount determined by multiplying:  (a) the difference
      between the Fair Market Value of the Common Stock on the date of exercise
      over the grant price of the SAR by (b) the number of shares with respect
      to which the SAR is exercised.  At the discretion of the
      Committee as set forth in the instrument evidencing the Award, the payment
      upon exercise of an SAR may be in cash, in shares, in some combination
      thereof or in any other manner approved by the Committee in its sole
      discretion.

              

      

      
        	
                 

                9.3Waiver
      of Restrictions

              

      

      
        	
                 

                Subject
      to Section 18.5, the Committee, in its sole discretion, may waive any
      other terms, conditions or restrictions on any SAR under such
      circumstances and subject to such terms and conditions as the Committee
      shall deem appropriate.

              

      

      
        	
                 

                SECTION
      10.  STOCK AWARDS, RESTRICTED STOCK AND STOCK
    UNITS

              

      

      
        	
                 

                10.1Grant
      of Stock Awards, Restricted Stock and Stock
  Units

              

      

      
        	
                 

                The
      Committee may grant Stock Awards, Restricted Stock and Stock Units on such
      terms and conditions and subject to such repurchase or forfeiture
      restrictions, if any, which may be based on continuous service with the
      Company or a Related Company or the achievement of any performance goals,
      as the Committee shall determine in its sole discretion, which terms,
      conditions and restrictions shall be set forth in the instrument
      evidencing the Award.

              

      

      
        	
                 

                10.2Vesting
      of Restricted Stock and Stock Units

              

      

      
        	
                 

                Upon
      the satisfaction of any terms, conditions and restrictions prescribed with
      respect to Restricted Stock or Stock Units, or upon a Participant’s
      release from any terms, conditions and restrictions of Restricted Stock or
      Stock Units, as determined by the Committee, and subject to the provisions
      of Section 13, (a) the shares of Restricted Stock covered by each Award of
      Restricted Stock shall become freely transferable by the Participant, and
      (b) Stock Units shall be paid in shares of Common Stock or, if set forth
      in the instrument evidencing the Awards, in cash or a combination of cash
      and shares of Common Stock.  Any fractional shares subject to
      such Awards shall be paid to the Participant in
  cash.

              

      

      
        	
                 

                10.3Waiver
      of Restrictions

              

      

      
        	
                 

                Subject
      to Section 18.5, the Committee, in its sole discretion, may waive the
      repurchase or forfeiture period and any other terms, conditions or
      restrictions on any Restricted Stock or Stock Unit under such
      circumstances and subject to such terms and conditions as the Committee
      shall deem appropriate.

              

      

       

       

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                SECTION
      11.  PERFORMANCE AWARDS

              

      

      
        	
                 

                11.1Performance
      Shares

              

      

      
        	
                 

                The
      Committee may grant Awards of Performance Shares, designate the
      Participants to whom Performance Shares are to be awarded and determine
      the number of Performance Shares and the terms and conditions of each such
      Award.  Performance Shares shall consist of a unit valued by
      reference to a designated number of shares of Common Stock, the value of
      which may be paid to the Participant by delivery of shares of Common Stock
      or, if set forth in the instrument evidencing the Award, of such property
      as the Committee shall determine, including, without limitation, cash,
      shares of Common Stock, other property, or any combination thereof, upon
      the attainment of performance goals, as established by the Committee, and
      other terms and conditions specified by the Committee.  Subject
      to Section 18.5, the amount to be paid under an Award of Performance
      Shares may be adjusted on the basis of such further consideration as the
      Committee shall determine in its sole
  discretion.

              

      

      
        	
                 

                11.2Performance
      Units

              

      

      
        	
                 

                The
      Committee may grant Awards of Performance Units, designate the
      Participants to whom Performance Units are to be awarded and determine the
      number of Performance Units and the terms and conditions of each such
      Award.  Performance Units shall consist of a unit valued by
      reference to a designated amount of property other than shares of Common
      Stock, which value may be paid to the Participant by delivery of such
      property as the Committee shall determine, including, without limitation,
      cash, shares of Common Stock, other property, or any combination thereof,
      upon the attainment of performance goals, as established by the Committee,
      and other terms and conditions specified by the
      Committee.  Subject to Section 18.5, the amount to be paid under
      an Award of Performance Units may be adjusted on the basis of such further
      consideration as the Committee shall determine in its sole
      discretion.

              

      

      
        	
                 

                SECTION
      12.  OTHER STOCK OR CASH-BASED
AWARDS

              

      

      
        	
                 

                Subject
      to the terms of the Plan and such other terms and conditions as the
      Committee deems appropriate, the Committee may grant other incentives
      payable in cash or in shares of Common Stock under the
    Plan.

              

      

      
        	
                 

                SECTION
      13.  WITHHOLDING

              

      

      
        	
                 

                The
      Company may require the Participant to pay to the Company the amount of
      (a) any taxes that the Company is required by applicable federal, state,
      local or foreign law to withhold with respect to the grant, vesting or
      exercise of an Award (“tax withholding obligations”) and (b) any amounts
      due from the Participant to the Company or to any Related Company (“other
      obligations”).  The Company shall not be required to issue any
      shares of Common Stock or otherwise settle an Award under the Plan until
      such tax withholding obligations and other obligations are
      satisfied.

              

         

         

        
          
             

          

          
            -10-

            
              

            

          

          
             

          

        

         

        	
                 

                The
      Committee may permit or require a Participant to satisfy all or part of
      the Participant’s tax withholding obligations and other obligations by
      (a) paying cash to the Company, (b) having the Company withhold
      an amount from any cash amounts otherwise due or to become due from the
      Company to the Participant, (c) having the Company withhold a number
      of shares of Common Stock that would otherwise be issued to the
      Participant (or become vested, in the case of Restricted Stock) having a
      Fair Market Value equal to the tax withholding obligations and other
      obligations, or (d) surrendering a number of shares of Common Stock
      the Participant already owns having a value equal to the tax withholding
      obligations and other obligations.  The value of the shares so
      withheld or tendered may not exceed the employer’s minimum required tax
      withholding rate.

              

      

      
        	
                 

                SECTION
      14.  ASSIGNABILITY

              

      

      
        	
                 

                No
      Award or interest in an Award may be sold, assigned, pledged (as
      collateral for a loan or as security for the performance of an obligation
      or for any other purpose) or transferred by a Participant or made subject
      to attachment or similar proceedings otherwise than by will or by the
      applicable laws of descent and distribution, except to the extent the
      Participant designates one or more beneficiaries on a Company-approved
      form who may exercise the Award or receive payment under the Award after
      the Participant’s death.  During a Participant’s lifetime, an
      Award may be exercised only by the Participant.  Notwithstanding
      the foregoing and to the extent permitted by Section 422 of the Code,
      the Committee, in its sole discretion, may permit a Participant to assign
      or transfer an Award subject to such terms and conditions as the Committee
      shall specify.

              

      

      
        	
                 

                SECTION
      15.  ADJUSTMENTS

              

      

      
        	
                 

                15.1Adjustment
      of Shares

              

      

      
        	
                 

                In
      the event, at any time or from time to time, a stock dividend, stock
      split, spin-off, combination or exchange of shares, recapitalization,
      merger, consolidation, distribution to stockholders other than a normal
      cash dividend, or other change in the Company’s corporate or capital
      structure results in (a) the outstanding shares of Common Stock, or
      any securities exchanged therefor or received in their place, being
      exchanged for a different number or kind of securities of the Company or
      (b) new, different or additional securities of the Company or any
      other company being received by the holders of shares of Common Stock,
      then the Committee shall make proportional adjustments in (i) the
      maximum number and kind of securities available for issuance under the
      Plan; (ii) the maximum number and kind of securities issuable as
      Incentive Stock Options as set forth in Section 4.2; and
      (iii) the number and kind of securities that are subject to any
      outstanding Award and the per share price of such securities, without any
      change in the aggregate price to be paid therefor.  The
      determination by the Committee, as to the terms of any of the foregoing
      adjustments shall be conclusive and binding.

              
	
                 

                Notwithstanding
      the foregoing, the issuance by the Company of shares of stock of any
      class, or securities convertible into shares of stock of any class, for
      cash or property, or for labor or services rendered, either upon direct
      sale or upon the exercise of rights or warrants to subscribe therefor, or
      upon conversion of shares or obligations of the Company convertible into
      such shares or other securities, shall not affect, and no adjustment by
      reason thereof shall be made with respect to, outstanding
      Awards.  Also notwithstanding the foregoing, a dissolution or
      liquidation of the Company or a Company Transaction shall not be governed
      by this Section 15.1 but shall be governed by Sections 15.2 and
      15.3, respectively.

              

      

       

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

      
        	
                 

                15.2Dissolution
      or Liquidation

              

      

      
        	
                 

                To
      the extent not previously exercised or settled, and unless otherwise
      determined by the Committee in its sole discretion, Awards shall terminate
      immediately prior to the dissolution or liquidation of the
      Company.  To the extent a vesting condition, forfeiture
      provision or repurchase right applicable to an Award has not been waived
      by the Committee, the Award shall be forfeited immediately prior to the
      consummation of the dissolution or
liquidation.

              

      

      
        	
                 

                15.3Change
      in Control

              

      

      
        	
                 

                Notwithstanding
      any other provision of the Plan to the contrary, unless the Committee
      shall determine otherwise in the instrument evidencing the Award or in a
      written employment, services or other agreement between the Participant
      and the Company or a Related Company, in the event of a Change in
      Control:

              
	
                 

                (a)           All
      outstanding Awards, other than Performance Shares and Performance Units,
      shall become fully and immediately exercisable, and all applicable
      deferral and restriction limitations or forfeiture provisions shall lapse,
      immediately prior to the Change in Control and shall terminate at the
      effective time of the Change in Control; provided, however, that with
      respect to a Change in Control that is a Company Transaction, such Awards
      shall become fully and immediately exercisable, and all applicable
      deferral and restriction limitations or forfeiture provisions shall lapse,
      only if and to the extent such Awards are not converted, assumed or
      replaced by the Successor Company.

              
	
                 

                For
      the purposes of this Section 15.3(a), an Award shall be considered
      converted, assumed or replaced by the Successor Company if following the
      Company Transaction the option or right confers the right to purchase or
      receive, for each share of Common Stock subject to the Award immediately
      prior to the Company Transaction, the consideration (whether stock, cash
      or other securities or property) received in the Company Transaction by
      holders of Common Stock for each share held on the effective date of the
      transaction (and if holders were offered a choice of consideration, the
      type of consideration chosen by the holders of a majority of the
      outstanding shares); provided, however, that if such consideration
      received in the Company Transaction is not solely common stock of the
      Successor Company, the Committee may, with the consent of the Successor
      Company, provide for the consideration to be received upon the exercise of
      the Option, for each share of Common Stock subject thereto, to be solely
      common stock of the Successor Company substantially equal in fair market
      value to the per share consideration received by holders of Common Stock
      in the Company Transaction.  The determination of such
      substantial equality of value of consideration shall be made by the
      Committee, and its determination shall be conclusive and
      binding.

              
	
                 

                (b)           All
      Performance Shares or Performance Units earned and outstanding as of the
      date the Change in Control is determined to have occurred shall be payable
      in full at the target level in accordance with the payout schedule
      pursuant to the instrument evidencing the Award.  Any remaining
      Performance Shares or Performance Units (including any applicable
      performance period) for which the payout level has not been determined
      shall be prorated at the target payout level up to and including the date
      of such Change in Control and shall be payable in full at the target level
      in accordance with the payout schedule pursuant to the instrument
      evidencing the Award.  Any existing deferrals or other
      restrictions not waived by the Committee in its sole discretion shall
      remain in effect.

              

         

         

        
          
             

          

          
            -12-

            
              

            

          

          
             

          

        

         

         

        	
                 

                (c)           Notwithstanding
      Sections 15.3(a) and 15.3(b), the Committee, in its sole discretion, may
      (unless otherwise provided in the instrument evidencing the Award or in a
      written employment, services or other agreement between the Participant
      and the Company or a Related Company) instead provide in the event of a
      Change in Control that is a Company Transaction (i) for adjustments to the
      Plan and outstanding Awards as contemplated by Section 15.1 or (ii) that a
      Participant’s outstanding Awards shall terminate upon or immediately prior
      to such Company Transaction and that such Participant shall receive, in
      exchange therefor, a cash payment equal to the amount (if any) by which
      (x) the value of the per share consideration received by holders of
      Common Stock in the Company Transaction, or, if the Company Transaction is
      a sale of assets or otherwise does not result in direct receipt of
      consideration by holders of Common Stock, the value of the deemed per
      share consideration received, in each case as determined by the Committee
      in its sole discretion, multiplied by the number of shares of Common Stock
      subject to such outstanding Awards (to the extent then vested and
      exercisable or whether or not then vested and exercisable, as determined
      by the Committee in its sole discretion) exceeds (y) if
      applicable, the respective aggregate exercise price or grant price
      for such Awards.

              

      

      
        	
                 

                15.4Further
      Adjustment of Awards

              

      

      
        	
                 

                Subject
      to Sections 15.2 and 15.3, the Committee shall have the discretion,
      exercisable at any time before a sale, merger, consolidation,
      reorganization, liquidation, dissolution or change in control of the
      Company, as defined by the Committee, to take such further action as it
      determines to be necessary or advisable with respect to
      Awards.  Such authorized action may include (but shall not be
      limited to) establishing, amending or waiving the type, terms, conditions
      or duration of, or restrictions on, Awards so as to provide for earlier,
      later, extended or additional time for exercise, lifting restrictions and
      other modifications, and the Committee may take such actions with respect
      to all Participants, to certain categories of Participants or only to
      individual Participants.  The Committee may take such action
      before or after granting Awards to which the action relates and before or
      after any public announcement with respect to such sale, merger,
      consolidation, reorganization, liquidation, dissolution or change in
      control that is the reason for such
action.

              

      

      
        	
                 

                15.5No
      Limitations

              

      

      
        	
                 

                The
      grant of Awards shall in no way affect the Company’s right to adjust,
      reclassify, reorganize or otherwise change its capital or business
      structure or to merge, consolidate, dissolve, liquidate or sell or
      transfer all or any part of its business or
  assets.

              

      

      
        	
                 

                15.6Fractional
      Shares

              

      

      
        	
                 

                In
      the event of any adjustment in the number of shares covered by any Award,
      each such Award shall cover only the number of full shares resulting from
      such adjustment.

              

      

       

       

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                15.7Section
      409A of the Code

              

      

      
        	
                 

                Notwithstanding
      anything in this Plan to the contrary, (a) any adjustments made pursuant
      to this Section 15 or any other amendments to Awards that are
      considered “deferred compensation” within the meaning of Section 409A
      of the Code shall be made in compliance with the requirements of
      Section 409A of the Code and (b) any adjustments made pursuant to
      this Section 15 or any other amendments to Awards that are not
      considered “deferred compensation” subject to Section 409A of the
      Code shall be made in such a manner as to ensure that after such
      adjustment or amendment the Awards either (i) continue not to be subject
      to Section 409A of the Code or (ii) comply with the requirements of
      Section 409A of the Code.

              

      

      
        	
                 

                SECTION 16.  MARKET
      STANDOFF

              

      

      
        	
                 

                In
      the event of an underwritten public offering by the Company of its equity
      securities pursuant to an effective registration statement filed under the
      Securities Act (including any registration statement that registers for
      resale any shares issued in the Company’s Alternative Public Offering), no
      person may sell, make any short sale of, loan, hypothecate, pledge, grant
      any option for the purchase of, or otherwise dispose of or transfer for
      value or otherwise agree to engage in any of the foregoing transactions
      with respect to any shares issued pursuant to an Award granted under the
      Plan without the prior written consent of the Company or its
      underwriters.  Such limitations shall be in effect for such
      period of time as may be requested by the Company or such underwriters;
      provided, however, that in no event shall such period exceed (a)
      180 days after the effective date of the registration statement for
      such public offering or (b) such longer period requested by the
      underwriter as is necessary to comply with regulatory restrictions on the
      publication of research reports (including, but not limited to, NYSE Rule
      472 or NASD Conduct Rule 2711).  The limitations of this
      Section 16 shall in all events terminate two years after the
      effective date of the Company’s Alternative Public
    Offering.

              
	
                In
      the event of any stock split, stock dividend, recapitalization,
      combination of shares, exchange of shares or other change affecting the
      Company’s outstanding Common Stock effected as a class without the
      Company’s receipt of consideration, any new, substituted or additional
      securities distributed with respect to any shares issued as or pursuant to
      an Award under the Plan shall be immediately subject to the provisions of
      this Section 16, to the same extent such shares are at such time
      covered by such provisions.

              
	
                In
      order to enforce the limitations of this Section 16, the Company may
      impose stop-transfer instructions with respect to the purchased shares
      until the end of the applicable standoff
period.

              

      

      
        	
                 

                SECTION
      17.  AMENDMENT AND
TERMINATION

              

      

      
        	
                 

                17.1Amendment,
      Suspension or Termination

              

      

      
        	
                 

                The
      Board or the Compensation Committee may amend, suspend or terminate the
      Plan or any portion of the Plan at any time and in such respects as it
      shall deem advisable; provided, however, that, to the extent required by
      applicable law, regulation or stock exchange rule, stockholder approval
      shall be required for any amendment to the Plan; and provided, further,
      that any amendment that requires stockholder approval may be made only by
      the Board and not by the Compensation Committee.  Subject to
      Section 17.3, the Committee may amend the terms of any outstanding
      Award, prospectively or
retroactively.

              

      

       

       

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                17.2Term
      of the Plan

              

      

      
        	
                 

                Unless
      sooner terminated as provided herein, the Plan shall terminate ten years
      from the Effective Date.  After the Plan is terminated, no
      future Awards may be granted, but Awards previously granted shall remain
      outstanding in accordance with their applicable terms and conditions and
      the Plan’s terms and conditions.  Notwithstanding the foregoing,
      no Incentive Stock Options may be granted more than ten years after the
      later of:  (a) the
      adoption of the Plan by the Board and (b) the adoption by the Board
      of any amendment to the Plan that constitutes the adoption of a new plan
      for purposes of Section 422 of the
Code.

              

      

      
        	
                 

                17.3Consent
      of Participant

              

      

      
        	
                 

                The
      amendment, suspension or termination of the Plan or a portion thereof or
      the amendment of an outstanding Award shall not, without the Participant’s
      consent, materially adversely affect any rights under any Award
      theretofore granted to the Participant under the Plan.  Any
      change or adjustment to an outstanding Incentive Stock Option shall not,
      without the consent of the Participant, be made in a manner so as to
      constitute a “modification” that would cause such Incentive Stock Option
      to fail to continue to qualify as an Incentive Stock
      Option.  Notwithstanding the foregoing, any adjustments made
      pursuant to Section 15 shall not be subject to these
      restrictions.

              

      

      
        	
                 

                SECTION
      18.  GENERAL

              

      

      
        	
                 

                18.1No
      Individual Rights

              

      

      
        	
                 

                No
      individual or Participant shall have any claim to be granted any Award
      under the Plan, and the Company has no obligation for uniformity of
      treatment of Participants under the Plan.

              
	
                 

                Furthermore,
      nothing in the Plan or any Award granted under the Plan shall be deemed to
      constitute an employment contract or confer or be deemed to confer on any
      Participant any right to continue in the employ of, or to continue any
      other relationship with, the Company or any Related Company or limit in
      any way the right of the Company or any Related Company to terminate a
      Participant’s employment or other relationship at any time, with or
      without cause.

              

      

      
        	
                 

                18.2Issuance
      of Shares

              

      

      
        	
                 

                Notwithstanding
      any other provision of the Plan, the Company shall have no obligation to
      issue or deliver any shares of Common Stock under the Plan or make any
      other distribution of benefits under the Plan unless, in the opinion of
      the Company’s counsel, such issuance, delivery or distribution would
      comply with all applicable laws (including, without limitation, the
      requirements of the Securities Act or the laws of any state or foreign
      jurisdiction) and the applicable requirements of any securities exchange
      or similar entity.

              
	
                 

                The
      Company shall be under no obligation to any Participant to register for
      offering or resale or to qualify for exemption under the Securities Act,
      or to register or qualify under the laws of any state or foreign
      jurisdiction, any shares of Common Stock, security or interest in a
      security paid or issued under, or created by, the Plan, or to continue in
      effect any such registrations or qualifications if
  made.

              

         

         

        
          
             

          

          
            -15-

            
              

            

          

          
             

          

        

         

         

        	
                 

                As
      a condition to the exercise of an Option or any other receipt of Common
      Stock pursuant to an Award under the Plan, the Company may require
      (a) the Participant to represent and warrant at the time of any such
      exercise or receipt that such shares are being purchased or received only
      for the Participant’s own account and without any present intention to
      sell or distribute such shares and (b) such other action or agreement
      by the Participant as may from time to time be necessary to comply with
      the federal, state and foreign securities laws.  At the option
      of the Company, a stop-transfer order against any such shares may be
      placed on the official stock books and records of the Company, and a
      legend indicating that such shares may not be pledged, sold or otherwise
      transferred, unless an opinion of counsel (satisfactory to the Company, in
      its sole discretion) is provided stating that such transfer is not in
      violation of any applicable law or regulation, may be stamped on stock
      certificates to ensure exemption from registration.  The
      Committee may also require the Participant to execute and deliver to the
      Company a purchase agreement or such other agreement as may be in use by
      the Company at such time that describes certain terms and conditions
      applicable to the shares.

              
	
                 

                To
      the extent the Plan or any instrument evidencing an Award provides for
      issuance of stock certificates to reflect the issuance of shares of Common
      Stock, the issuance may be effected on a noncertificated basis, to the
      extent not prohibited by applicable law or the applicable rules of any
      stock exchange.

              

      

      
        	
                 

                18.3Indemnification

              

      

      
        	
                 

                Each
      person who is or shall have been a member of the Board, or a committee
      appointed by the Board, or an officer of the Company to whom authority was
      delegated in accordance with Section 3, 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 such person in
      connection with or resulting from any claim, action, suit or proceeding to
      which such person may be a party or in which such person 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 such person in settlement thereof,
      with the Company’s approval, or paid by such person in satisfaction of any
      judgment in any such claim, action, suit or proceeding against such
      person; provided, however, that such person shall give the Company an
      opportunity, at its own expense, to handle and defend the same before such
      person undertakes to handle and defend it on such person’s own
      behalf.  This duty to indemnify shall not apply to the extent
      that (i) such loss, cost, liability or expense is a result of such
      person’s own willful misconduct or (ii) such indemnification is expressly
      prohibited by statute.

              
	
                 

                The
      foregoing right of indemnification shall not be exclusive of any other
      rights of indemnification to which such person may be entitled under the
      Company’s certificate of incorporation or bylaws, as a matter of law, or
      otherwise, or of any power that the Company may have to indemnify or hold
      harmless.

              

      

       

       

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                18.4No
      Rights as a Stockholder

              

      

      
        	
                 

                Unless
      otherwise provided by the Committee or in the instrument evidencing the
      Award or in a written employment, services or other agreement, no Award,
      other than a Stock Award, shall entitle the Participant to any cash
      dividend, voting or other right of a stockholder unless and until the date
      of issuance under the Plan of the shares that are the subject of such
      Award.

              

      

      
        	
                 

                18.5Compliance
      with Laws and Regulations

              

      

      
        	
                 

                In
      interpreting and applying the provisions of the Plan, any Option granted
      as an Incentive Stock Option pursuant to the Plan shall, to the extent
      permitted by law, be construed as an “incentive stock option” within the
      meaning of Section 422 of the Code.

              
	
                 

                Any
      Award granted pursuant to the Plan is intended to comply with the
      requirements of Section 409A of the Code, including any applicable
      regulations and guidance issued thereunder, and including transition
      guidance, to the extent Section 409A of the Code is applicable thereto,
      and the terms of the Plan and any Award granted under the Plan shall be
      interpreted, operated and administered in a manner consistent with this
      intention to the extent the Committee deems necessary or advisable to
      comply with Section 409A of the Code and any official guidance issued
      thereunder.  Any payment or distribution that is to be made
      under the Plan (or pursuant to an Award under the Plan) to a Participant
      who is a “specified employee” of the Company within the meaning of that
      term under Section 409A of the Code and as determined by the Committee, on
      account of  a “separation from service” within the meaning of
      that term under Section 409A of the Code, may not be made before the date
      which is six months after the date of such “separation from service,”
      unless the payment or distribution is exempt from the application of
      Section 409A of the Code by reason of the short-term deferral exemption or
      otherwise.  Notwithstanding any other provision in the Plan, the
      Committee, to the extent it deems necessary or advisable in its sole
      discretion, reserves the right, but shall not be required, to unilaterally
      amend or modify the Plan and any Award granted under the Plan so that the
      Award qualifies for exemption from or complies with Section 409A of the
      Code; provided, however, that the Committee makes no representations that
      Awards granted under the Plan shall be exempt from or comply with Section
      409A of the Code and makes no undertaking to preclude  Section
      409A of the Code from applying to Awards granted under the
      Plan.

              

      

      
        	
                 

                18.6Participants
      in Other Countries or Jurisdictions

              

      

      
        	
                 

                Without
      amending the Plan, the Committee may grant Awards to Eligible Persons who
      are foreign nationals on such terms and conditions different from those
      specified in the Plan as may, in the judgment of the Committee, be
      necessary or desirable to foster and promote achievement of the purposes
      of the Plan and shall have the authority to adopt such modifications,
      procedures, subplans and the like as may be necessary or desirable to
      comply with provisions of the laws or regulations of other countries or
      jurisdictions in which the Company or any Related Company may operate or
      have employees to ensure the viability of the benefits from Awards granted
      to Participants employed in such countries or jurisdictions, meet the
      requirements that permit the Plan to operate in a qualified or
      tax-efficient manner, comply with applicable foreign laws or regulations
      and meet the objectives of the
Plan.

              

      

       

       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                18.7No
      Trust or Fund

              

      

      
        	
                 

                The
      Plan is intended to constitute an “unfunded” plan.  Nothing
      contained herein shall require the Company to segregate any monies or
      other property, or shares of Common Stock, or to create any trusts, or to
      make any special deposits for any immediate or deferred amounts payable to
      any Participant, and no Participant shall have any rights that are greater
      than those of a general unsecured creditor of the
  Company.

              

      

      
        	
                 

                18.8Successors

              

      

      
        	
                 

                All
      obligations of the Company under the Plan with respect to Awards shall be
      binding on any successor to the Company, whether the existence of such
      successor is the result of a direct or indirect purchase, merger,
      consolidation, or otherwise, of all or substantially all the business
      and/or assets of the Company.

              

      

      
        	
                 

                18.9Severability

              

      

      
        	
                 

                If
      any provision of the Plan or any Award is determined to be invalid,
      illegal or unenforceable in any jurisdiction, or as to any person, or
      would disqualify the Plan or any Award under any law deemed applicable by
      the Committee, such provision shall be construed or deemed amended to
      conform to applicable laws, or, if it cannot be so construed or deemed
      amended without, in the Committee’s determination, materially altering the
      intent of the Plan or the Award, such provision shall be stricken as to
      such jurisdiction, person or Award, and the remainder of the Plan and any
      such Award shall remain in full force and
  effect.

              

      

      
        	
                 

                18.10Choice
      of Law and Venue

              

      

      
        	
                 

                The
      Plan, all Awards granted thereunder and all determinations made and
      actions taken pursuant hereto, to the extent not otherwise governed by the
      laws of the United States, shall be governed by the laws of the State of
      Illinois without giving effect to principles of conflicts of
      law.  Participants irrevocably consent to the nonexclusive
      jurisdiction and venue of the state and federal courts located in the
      State of Illinois.

              

      

      
        	
                 

                18.11Legal
      Requirements

              

      

      
        	
                 

                The
      granting of Awards and the issuance of shares of Common Stock under the
      Plan are subject to all applicable laws, rules and regulations and to such
      approvals by any governmental agencies or national securities exchanges as
      may be required.

              

      

      
        	
                 

                SECTION
      19.  EFFECTIVE DATE

              

      

      
        	
                 

                The
      effective date (the “Effective Date”) is the
      date on which the Plan is adopted by the Board.  If the
      stockholders of the Company do not approve the Plan within 12 months
      after the Board’s adoption of the Plan, any Incentive Stock Options
      granted under the Plan will be treated as Nonqualified Stock
      Options.

              

      

       

       

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

       

      
 

      
        	
                 

                APPENDIX A

              
	
                DEFINITIONS

              

      

      
        	
                 

                As
      used in the Plan,

              
	
                 

                “Acquired Entity” means
      any entity acquired by the Company or a Related Company or with which the
      Company or a Related Company merges or combines.

              
	
                 

                “Alternative Public
      Offering” means the series of related transactions in which (i)
      Confederate Acquisition Corp. merges into Confederate Motor Company, Inc.
      with Confederate Motor Company, Inc. as the surviving corporation, (ii)
      Confederate Motor Company, Inc. becomes a wholly-owned subsidiary of the
      Company, (iii) stockholders of Confederate Motor Company, Inc. receive
      shares of common stock of the Company in exchange for their shares of
      capital stock of Confederate Motor Company, Inc., and (iv) the Company
      issues shares of Common Stock in a private placement of
      securities.

              
	
                 

                “Award” means any
      Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock
      Unit, Performance Share, Performance Unit, cash-based award or other
      incentive payable in cash or in shares of Common Stock as may be
      designated by the Committee from time to time.

              
	
                 

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

              
	
                 

                “Cause,” unless otherwise
      defined in the instrument evidencing an Award or in a written employment,
      services or other agreement between the Participant and the Company or a
      Related Company, means dishonesty, fraud, serious or willful misconduct,
      unauthorized use or disclosure of confidential information or trade
      secrets, or conduct prohibited by law (except minor violations), in each
      case as determined by the Company’s chief human resources officer or other
      person performing that function or, in the case of directors and executive
      officers, the Committee, whose determination shall be conclusive and
      binding.

              
	
                 

                “Change in Control,”
      unless the Committee determines otherwise with respect to an Award
      at the time the Award is granted or unless otherwise defined for purposes
      of an Award in a written employment, services or other agreement between
      the Participant and the Company or a Related Company, means the occurrence
      of any of the following events:

              

      

       

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                (i)An
      acquisition by any individual, entity or group, within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Exchange Act, (a “Person”) of beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act) of more than fifty percent (50%) of either (1) the then outstanding
      shares of Common Stock of the Company (the “Outstanding Common
      Stock”) or (2) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the
      election of directors (the “Outstanding Voting
      Securities”); excluding, however, the following: (1) any
      acquisition directly from the Company, other than an acquisition by virtue
      of the exercise, exchange or conversion of any Convertible Securities
      unless such securities were themselves acquired directly from the Company,
      (2) any acquisition by the Company; (3) any acquisition by H. Matthew
      Chambers or any Entity that he controls, or (4) any acquisition by any
      Person pursuant to a transaction which complies with clauses (1), (2) and
      (3) of subsection (iii) of the definition of “Company Transaction”;
      or

              
	
                 

                (ii)Within
      any period of 24 consecutive months, a change in the composition of the
      Board such that the individuals who, immediately prior to such period,
      constituted the Board (such Board shall be hereinafter referred to as the
      “Incumbent Board”) cease for any reason to constitute at least a majority
      of the Board; provided, however, for purposes hereof, that any individual
      who becomes a member of the Board during such period, whose election, or
      nomination for election by the Company’s stockholders, was approved by a
      vote of at least a majority of those individuals who are members of the
      Board and who were also members of the Incumbent Board (or deemed to be
      such pursuant to this proviso) shall be considered as though such
      individual were a member of the Incumbent Board; but, provided further,
      that any such individual whose initial assumption of office occurs as a
      result of either an actual or threatened election contest (as such terms
      are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
      Act) or other actual or threatened solicitation of proxies or consents by
      or on behalf of a Person other than the Board shall not be so considered
      as a member of the Incumbent Board; or

              
	
                 

                (iii)A
      Company Transaction; or

              
	
                 

                (iv)           The
      approval by the stockholders of the Company of a complete liquidation or
      dissolution of the Company, other than to an entity pursuant to a
      transaction which would comply with clauses (1), (2) and (3) of the
      definition of “Company Transaction”, assuming for this purpose that such
      transaction were a Company
Transaction.

              

      

      
        	
                 

                For
      purposes of the definition of “Change of Control” and “Company
      Transaction”, a series of transactions undertaken with a common purpose
      shall be treated as a single transaction that begins at the consummation
      of the first transaction in the series and ends at the consummation of the
      last transaction in the series.

              
	
                 

                “Company
      Transaction” means the
      consummation of (i) a reorganization, merger or consolidation of the
      Company or (ii) the sale or other disposition of all or substantially all
      of the assets of the Company and its direct and indirect subsidiaries
      taken as a whole, except in each case a transaction pursuant to
      which (1) all or substantially all of the individuals and entities who are
      the beneficial owners, respectively, of the Outstanding Common Stock and
      Outstanding Voting Securities immediately prior to such transaction will
      beneficially own, directly or indirectly, more than sixty percent (60%)
      of, respectively, the outstanding shares of common stock, and the combined
      voting power of the outstanding voting securities entitled to vote
      generally in the election of directors, as the case may be, of the entity
      resulting from such transaction (including, without limitation, an entity
      which as a result of such transaction owns the Company or all or
      substantially all of the Company’s assets, either directly or through one
      or more subsidiaries) in substantially the same proportions as their
      ownership, immediately prior to such transaction, of the Outstanding
      Common Stock and Outstanding Voting Securities, as the case may be, (2) no
      Person (other than the Company) will beneficially own, directly or
      indirectly, more than
      twenty-five percent (25%) of, respectively, the outstanding shares of
      common stock of the Company resulting from such transaction or the
      combined voting power of the outstanding voting securities of such Company
      entitled to vote generally in the election of directors, except to the
      extent that such ownership existed with respect to the Company prior to
      the transaction, and (3) individuals who were members of the Board
      immediately prior to the approval by the stockholders of the Company of
      such transaction will constitute at least a majority of the members of the
      board of directors of the Company resulting from such transaction.

              

      

       

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

       

       

      
        	
                “Convertible Security”
      means any security convertible into or exchangeable for shares of
      Common Stock of the Company, or any option, warrant or other right to
      acquire shares of Common Stock of the Company.

              
	
                 

                “Code” means the
      Internal Revenue Code of 1986, as amended from time to
    time.

              
	
                 

                “Committee” has the
      meaning set forth in Section 3.2.

              
	
                 

                “Common Stock” means the
      common stock of the Company.

              
	
                 

                “Company” means
      Confederate Motors, Inc., a Delaware corporation.

              
	
                 

                “Compensation Committee”
      means the Compensation Committee (if any) of the Board.

              
	
                 

                “Disability,” unless otherwise
      defined by the Committee for purposes of the Plan or in the instrument
      evidencing an Award or in a written employment, services or other
      agreement between the Participant and the Company or a Related Company,
      means a mental or physical impairment of the Participant that is expected
      to result in death or that has lasted or is expected to last for a
      continuous period of 12 months or more and that causes the
      Participant to be unable to perform his or her material duties for the
      Company or a Related Company and to be engaged in any substantial gainful
      activity, in each case as determined by the Company’s chief human
      resources officer or other person performing that function or, in the case
      of directors and executive officers, the Committee, whose determination
      shall be conclusive and binding.

              
	
                 

                “Effective Date” has the
      meaning set forth in Section 19.

              
	
                 

                “Eligible Person” means
      any person eligible to receive an Award as set forth in
      Section 5.

              
	
                 

                “Entity” means any
      individual, entity or group (within the meaning of Section 13(d)(3)
      or Section 14(d)(2) of the Exchange Act).

              
	
                 

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

              
	
                 

                “Fair Market Value”
      means the closing price for the Common
      Stock on any given date during regular trading, or if not trading on that
      date, such price on the last preceding date on which the Common Stock was
      traded, unless determined otherwise by the Committee using such methods or
      procedures as it may establish.

              
	
                 

                “Grant Date” means the
      later of (a) the date on which the Committee completes the corporate
      action authorizing the grant of an Award or such later date specified by
      the Committee and (b) the date on which all conditions precedent to
      an Award have been satisfied, provided that conditions to the
      exercisability or vesting of Awards shall not defer the Grant
      Date.

              
	
                 

                “Incentive Stock Option”
      means an Option granted with the intention that it qualify as an
      “incentive stock option” as that term is defined for purposes of Section
      422 of the Code or any successor
provision.

              

      

       

       

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

       

       

    

    
      
        	
                “including”, “include”,
      “includes” and words of similar import shall be construed broadly
      as if followed by the phrase “without limitation”.

              
	
                 

                “Nonqualified Stock Option”
      means an Option other than an Incentive Stock
    Option.

              
	
                 

                “Option” means a right
      to purchase Common Stock granted under Section 7.

              
	
                 

                “Option Expiration Date”
      means the last day of the maximum term of an
  Option.

              
	
                 

                “Outstanding Company Common
      Stock” has the meaning set forth in the definition of “Change in
      Control.”

              
	
                 

                “Outstanding Company Voting
      Securities” has the meaning set forth in the definition of “Change
      in Control.”

              
	
                 

                “Parent Company” means a
      company or other entity which as a result of a Company Transaction owns
      the Company or all or substantially all of the Company’s assets either
      directly or through one or more subsidiaries.

              
	
                 

                “Participant” means any
      Eligible Person to whom an Award is granted.

              
	
                 

                “Performance Award”
      means an Award of Performance Shares or Performance Units granted
      under Section 11.

              
	
                 

                “Performance Share”
      means an Award of units denominated in shares of Common Stock granted
      under Section 11.1.

              
	
                 

                “Performance Unit” means
      an Award of units denominated in cash or property other than shares of
      Common Stock granted under Section 11.2.

              
	
                 

                “Plan” means the
      Confederate Motors, Inc. 2008 Incentive Plan.

              
	
                 

                ‘‘Related Company” means
      any entity that is directly or indirectly controlled by, in control of or
      under common control with the Company.

              
	
                 

                “Restricted Stock” means
      an Award of shares of Common Stock granted under Section 10, the
      rights of ownership of which are subject to restrictions prescribed by the
      Committee.

              
	
                 

                “Retirement,” unless otherwise
      defined in the instrument evidencing the Award or in a written employment,
      services or other agreement between the Participant and the Company or a
      Related Company, means “Retirement” as defined for purposes of the Plan by
      the Committee or the Company’s chief human resources officer or other
      person performing that function or, if not so defined, means Termination
      of Service on or after the date the Participant reaches “normal retirement
      age,” as that term is defined in Section 411(a)(8) of the
      Code.

              
	
                 

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

              

      

       

       

       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

       

       

      
        	
                 

                “Stock Appreciation
      Right” or “SAR” means a right
      granted under Section 9.1 to receive the excess of the Fair Market
      Value of a specified number of shares of Common Stock over the grant
      price.

              
	
                 

                “Stock Award” means an
      Award of shares of Common Stock granted under Section 10, the rights
      of ownership of which are not subject to restrictions prescribed by the
      Committee.

              
	
                 

                “Stock Unit” means an
      Award denominated in units of Common Stock granted under Section
      10.

              
	
                 

                “Substitute Awards”
      means Awards granted or shares of Common Stock issued by the Company in
      substitution or exchange for awards previously granted by an Acquired
      Entity.

              
	
                 

                “Successor Company”
      means the surviving company, the successor company or Parent
      Company, as applicable, in connection with a Company
      Transaction.

              
	
                 

                “Termination of Service”
      means a termination of employment or service relationship with the Company
      or a Related Company for any reason, whether voluntary or involuntary,
      including by reason of death, Disability or Retirement.  Any
      question as to whether and when there has been a Termination of Service
      for the purposes of an Award and the cause of such Termination of Service
      shall be determined by the Company’s chief human resources officer or
      other person performing that function or, with respect to directors and
      executive officers, by the Committee, whose determination shall be
      conclusive and binding.  Transfer of a Participant’s employment
      or service relationship between the Company and any Related Company shall
      not be considered a Termination of Service for purposes of an
      Award.  Unless the Committee determines otherwise, a Termination
      of Service shall be deemed to occur if the Participant’s employment or
      service relationship is with an entity that has ceased to be a Related
      Company.  A Participant’s change in status from an employee of
      the Company or a Related Company to a consultant, advisor or independent
      contractor of the Company or a Related Company or a change in status from
      a consultant, advisor or independent contractor of the Company or a
      Related Company to an employee of the Company or a Related Company, shall
      not be considered a Termination of Service.

              
	
                 

                “Vesting Commencement
      Date” means the Grant Date or such other date selected by the
      Committee as the date from which an Award begins to
  vest.

              

      

       

       

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

       

      
 

      
        	
                 

                PLAN
      ADOPTION AND AMENDMENTS/ADJUSTMENTS

              
	
                SUMMARY
      PAGE

              

         

        
        

         

        
           

          

          

          	Date of Board

      
                  
                    Action

                  

                	 Action	
                   Section/Effect

                  of
      Amendment

                	 Date of
      Stockholder Approval
	                
      ,
      2008	 Initial
      Plan Adoption	 	
                                   
      , 2008

                

        

         

         

         

         

        -24-f8k021209ex10ii_confederate.htm

     

     

    Exhibit 10.2

     

     

    CONFEDERATE
MOTORS, INC.

    

    
      
        

      

    

    

    Employment
Agreement for H. Matthew Chambers

    

    
      
        

      

    
 

    THIS
EMPLOYMENT AGREEMENT (this “Agreement”), by and between CONFEDERATE MOTORS, INC.
a Delaware corporation (the “Company”), and H. Matthew Chambers (“Executive”),
is hereby entered into as of October 30, 2008.

     

    W I T N E
S S E T H

    

    WHEREAS,
Executive is currently an employee of the Company;

    

    WHEREAS,
the Company desires to continue to employ Executive in his capacity as Chief
Executive Officer in connection with the conduct of its business, and Executive
desires to accept such employment on the terms and conditions herein set forth;
and

    

    WHEREAS,
the Company and Executive desire to set forth the terms upon which Executive
shall be so employed.

    

    NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration the receipt and adequacy of
which the Company and Executive each hereby acknowledge, the Company and
Executive hereby agree as follows:

    

    
      	
               
      

            	
              1.

            	
              Employment.

            

    

    

    The
Company hereby agrees to employ Executive as its Chief Executive Officer, and
Executive hereby agrees to accept such employment and serve in such capacities,
during the Term (as defined in Section 2) and upon the terms and conditions set
forth in this Agreement.

    

    
      	
               
      

            	
              2.

            	
              Term.

            

    

    

    The term
of employment of Executive under this Agreement (the “Term”) shall, unless this
Agreement is terminated in accordance with Section 6 or 7, be a five-year period
initially commencing on the Effective Date.  At each anniversary of
the Effective Date, the Term shall automatically be extended by one year, unless
the Company notifies the Executive in writing prior to such anniversary (the
“Termination Notice Date”) that the Term shall not be so extended and, in
such

    

    
      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

    

    

    case, the
Term shall terminate on the second anniversary of such Termination Notice
Date.  As used herein, “Effective Date” shall mean the closing date of
a merger between (i) Confederate Motor Company, Inc. (“Confederate”) and (ii) a
subsidiary (the “Merger Sub”) of Confederate Motors, Inc., a Delaware
corporation, in which the Merger Sub merges with and into Confederate and
Confederate is the surviving entity.  This Agreement shall become
effective only when and if the Effective Date occurs.  If the
Effective Date does not occur on or before January 30, 2009, then this Agreement
shall be null and void.

    

    
      	
               
      

            	
              3.

            	
              Offices and
      Duties.

            

    

    

    The
provisions of this Section 3 will apply during the Term:

    

    (a)          Generally.  Executive
shall serve as the Chief Executive Officer of the Company.  Executive
shall have and perform such duties, responsibilities and authorities as are
customary for the Chief Executive Officer of a publicly held corporation of the
size, type, and nature of the Company as they may exist from time to time and
consistent with such position and status and as the Company’s Board of Directors
(the “Board”) shall from time to time direct, but in no event shall such duties,
responsibilities, and authorities be reduced from those of Executive prior to
the Effective Date.  Executive shall devote such business time and
attention as is necessary to appropriately and efficiently discharge his duties
and responsibilities as set forth herein.

    

    (b)          Place of
Employment.  Executive’s principal place of employment shall be
the current corporate offices of the Company in Birmingham,
Alabama.  In no event shall the Executive’s principal place of
employment be relocated to any other location without his prior written
consent.

    

    
      	
               
      

            	
              4.

            	
              Salary and Annual Incentive
      Compensation.

            

    

    

    As
partial compensation for the services to be rendered hereunder by Executive, the
Company agrees to pay to Executive during the Term the compensation set forth in
this Section 4.

    

    (a)          Base Salary and Guaranteed
Cash Bonus.  The Company will pay to Executive during the Term
a base salary at the initial annual rate of $180,000 payable in cash in
accordance with the Company’s usual payroll practices with respect to senior
executives.  The base salary shall be determined at least annually by
the Committee (as defined herein); provided that the base salary may be
increased, but not decreased, from that in effect for the prior
year.  “Committee” means the Compensation Committee of the Board, or,
if the Company does not then have a Compensation Committee, the
Board.  In addition, the Company will pay to Executive during the Term
a guaranteed annual cash bonus equal to 25% of the annual base salary, which
bonus shall be paid in four substantially equal quarterly installments, starting
with the quarterly installment for and payable in the second quarter of
2009.  Each quarterly installment shall be paid no later than the end
of the quarter in which the installment is earned.  Notwithstanding
the foregoing, if the annual base salary increases during any calendar year,
then the guaranteed annual cash bonus payments in that year shall be increased
accordingly so that the total guaranteed annual cash bonus paid for that year is
equal to 25% of the total base salary for that year.  Notwithstanding
the foregoing: (i) the guaranteed annual

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    cash
bonus for 2008 shall be equal to 25% (or such higher percentage, if any, that
the Committee may determine) of the annual base salary in effect at the
beginning of the Term and shall be paid in a single lump sum payment no later
than 60 days after the Effective Date; (ii) a guaranteed bonus for the first
quarter of 2009 equal to 25% (or such higher percentage, if any, that the
Committee may determine) of the quarterly base salary in effect at the beginning
of the Term and shall be paid in a single lump sum payment no later than 90 days
after the Effective Date; and (iii) the guaranteed bonus for the second quarter
of 2009 shall be payable no later than 120 days after the Effective
Date.

    

    (b)          Annual Incentive
Compensation.  The Company will pay to Executive during the
Term annual cash incentive compensation, if any, in amounts determined each
calendar year by the Committee.  Any such annual cash incentive
compensation payable to Executive for a calendar year shall be paid in a single
lump sum payment during the period starting on January1, and ending on March 15,
of the calendar year following the calendar year in which the annual cash
incentive compensation is earned.  As used herein, “annual cash
incentive compensation” does not include the guaranteed annual cash bonus
contemplated by Section 4(a).

    

    
      	
               
      

            	
              5.

            	
              Long-Term Compensation,
      Benefits and Expense
Reimbursement

            

    

    

    (a)          Executive Compensation
Plans.  Executive shall be entitled during the Term to
participate, without discrimination or duplication, in all executive
compensation plans and programs intended for general participation by senior
executives of the Company, as presently in effect or as they may be modified or
added to by the Company from time to time, subject to the eligibility and other
requirements of such plans and programs, including, without limitation, the
Company’s 2008 Equity Incentive Plan, and any successor to such plan, any other
stock option plans, performance share plans, management incentive plans,
deferred compensation plans and supplemental retirement plans; provided, however, that such
plans and programs, in the aggregate, shall provide Executive with benefits and
compensation and incentive award opportunities substantially no less favorable
than those provided by the Company to Executive under such plans and programs as
in effect on the Effective Date.

    

    (b)          Employee and Executive
Benefit Plans.  Executive shall be entitled during the Term to
participate, without discrimination or duplication, in all employee, executive
benefit and special individual plans and programs of the Company, as presently
in effect or as they may be modified or added to by the Company from time to
time, to the extent such plans and programs are available to other senior
executives or employees of the Company, subject to the eligibility and other
requirements of such plans and programs, including, without limitation, plans
providing health and medical insurance, life insurance, disability insurance and
accidental death or dismemberment insurance, and pension or other retirement
plans, savings plans, vacation and time-off programs, profit-sharing plans,
stock purchase plans and stock ownership plans; provided, however, that such
plans and programs, in the aggregate, shall provide Executive with benefits and
compensation and incentive award opportunities substantially no less favorable
than those provided by the Company to Executive under such plans and programs as
in effect on the Effective Date.

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    (c)           Reimbursement of
Expenses.  The Company will promptly reimburse Executive for
all reasonable business expenses and disbursements incurred by Executive in the
performance of Executive’s duties during the Term within 60 days after Executive
submits reasonable evidence of such expenses and disbursements to the
Company.

    

    (d)          Funding of Rabbi
Trust.  Not later than 30 days following a Change in Control:
(1) the Company shall contribute to a “rabbi trust” within the contemplation of
IRS Revenue Procedure 92-64 (which trust and its assets shall be located within
the United States) an amount equal to the amount that would be payable to the
Executive under (i), (ii), (iii), and (v) of Section 7(b) (and, if applicable,
under the last sentence of the first grammatical paragaph of Section 7(b)) upon
a Termination of Employment described in Section 7(b), and (2) the trustee of
the rabbi trust shall be irrevocably instructed to pay such amounts (plus
earnings thereon) to the Executive upon the Executive’s Termination of
Employment, if the amounts due to the Executive hereunder are not otherwise paid
to the Executive by the Company.  The Company shall provide to
Executive written evidence of compliance with this Section 5(d) within two
business days after such contribution.

    

    
      	
               
      

            	
              6.

            	
              Termination Due to Death or
      Disability.

            

    

    

    Executive’s
employment and the Term shall terminate upon Executive’s death.  The
Company may terminate the employment of Executive as Chief Executive Officer due
to Disability (as defined in Section 8(c)) of Executive, effective upon the
expiration of the 30-day period set forth in Section 8(c), absent the actions
referred to therein being taken by Executive to return to service and
Executive’s presentation to the Company of a certificate of good
health.

    

    In the
event of Executive’s Termination of Employment due to death or Disability, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease; provided, however, that the
Company will pay Executive (or, in the case of Executive’s death, his
beneficiaries or estate), and Executive (or, in the case of Executive’s death,
his beneficiaries or estate) will be entitled to receive, the
following:

    

    
      	
               
      

            	
              (i)

            	
              The
      earned but unpaid portion of annual base salary and guaranteed annual cash
      bonus;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Any
      annual cash incentive cash compensation earned, but unpaid, for the
      calendar year prior to the calendar year in which such Termination of
      Employment occurs,

            

    

    

    
      	
               
      

            	
              (iii)

            	
              An
      amount equal to the Severance Annual Incentive Amount, multiplied by a
      fraction, the numerator of which is the number of days Executive was
      employed in the year of termination and the denominator of which is the
      total number of days in the year of
termination,

            

    

    

    
      	
               
      

            	
              (iv)

            	
              All
      vested, nonforfeitable amounts owing or accrued at the date of Executive’s
      Termination of Employment under any compensation and benefit plans,
      programs and arrangements set forth or referred to in Sections 5(a) and
      5(b) in which Executive

            

    

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              theretofore
      participated, in accordance with the terms and conditions of the plans,
      programs and arrangements (and agreements and documents thereunder);
      and

            

    

    

    
      	
               
      

            	
              (v)

            	
              Reimbursement
      of reasonable business expenses and disbursements incurred by Executive
      prior to such Termination of Employment, within 60 days after Executive
      (or Executive’s representative) submits reasonable evidence of such
      expenses and disbursements to the
Company.

            

    

    

    The
Company shall pay the amounts under clauses (i) and (iii) in a single lump sum
payment no later than 30 days after Termination of Employment.  The
Company shall pay the amount under clause (ii) in a single lump sum payment no
later than (A) 30 days after Termination of Employment or (B) such earlier date
as required by Section 4(b).

    

    As used
herein, “Severance Annual Incentive Amount” means an amount equal to the average
annual cash incentive compensation paid to Executive for the Most Recent Years,
except that if Executive was not eligible to receive or did not receive such
compensation for any year in the Most Recent Years, then “Severance Annual
Incentive Amount” means the target annual cash incentive compensation for the
year of termination.  As used herein, “Most Recent Years” means the
three calendar years immediately preceding the year of termination; provided, however that if, at
the time of termination Executive has not been employed by the Company for the
entire year in each of the three immediately calendar years, then “Most Recent
Years” means the immediately preceding calender year(s) (not to exceed two
years) during which Executive was employed for the entire year by the
Company.

    

    In
addition, upon a termination of Executive’s employment due to death or
Disability, stock options then held by Executive will be exercisable to the
extent and for such periods indicated in, and otherwise be governed by, the
plans and programs (and agreements and other documents thereunder) pursuant to
which such stock options were granted.  Furthermore, for the period
extending from such termination until Executive reaches age 65, Executive shall
continue to participate in all health, medical and life insurance plans,
programs and arrangements (including those self-funded by the Company) under
Section 5(b) in which Executive was participating immediately prior to
termination (“Insurance Plans”), as if Executive had continued in employment
with the Company during such period.  To the extent that the Insurance
Plans do not allow such continued participation, the Company shall make cash
payments to Executive equivalent on an after-tax basis to the value of the
benefits Executive would have received under the Insurance Plans
if  Executive had so continued in the employment of the Company during
such period and had continued to participate in the Insurance Plans, provided
that (i) the value of any insurance-provided benefits (including under
self-funded Insurance Plans) will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating, and (ii) such cash payments by the
Company shall be made within 60 days after the Executive submits reasonable
evidence to the Company of Executive’s payment of such premiums.

    

    
      	
               
      

            	
              7.

            	
              Termination of Employment For
      Reasons Other Than Death or
Disability.

            

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    (a)           Termination by the Company
for Cause and Termination by Executive Other Than For Good
Reason.  In accordance with the provisions of this Section
7(a), the Company may terminate the employment of Executive as Chief Executive
Officer for Cause at any time prior to a Change in Control, and Executive may
terminate his employment as Chief Executive Officer voluntarily for reasons
other than Good Reason (as defined in Section 8(d)) at any time.

    

    Upon
Termination of Employment by the Company for Cause or by the Executive for
reasons other than Good Reason, the Term will immediately terminate, and all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease; provided, however, that the
Company shall pay Executive, and Executive shall be entitled to receive, the
following:

    

    
      	
               
      

            	
              (i)

            	
              The
      earned but unpaid portion of annual base salary and guaranteed annual cash
      bonus;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Any
      annual cash incentive cash compensation earned, but unpaid, for the
      calendar year prior to the calendar year in which occurs such Termination
      of Employment.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              All
      vested, nonforfeitable amounts owing or accrued at the date of such
      Termination of Employment under any compensation and benefit plans,
      programs and arrangements set forth or referred to in Sections 5(a) and
      5(b) in which Executive theretofore participated, in accordance with the
      terms and conditions of the plans, programs and arrangements (and
      agreements and documents thereunder);
and

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Reimbursement
      of reasonable business expenses and disbursements incurred by Executive
      prior to such termination of employment, within 60 days after Executive
      submits reasonable evidence of such expenses and disbursements to the
      Company.

            

    

    

    The
Company shall pay the amount under clause (i) in a single lump sum payment no
later than 30 days after Termination of Employment. The Company shall pay the
amount under clause (ii) in a single lump sum payment no later than (A) 30 days
after Termination of Employment or (B) such earlier date as required by Section
4(b).

    

    (b)          Termination by the Company
Without Cause and Termination by Executive for Good Reason.  In
accordance with the provisions of this Section 7(b), the Company may terminate
the employment of Executive without Cause, including after a Change in Control,
upon 90 days’ written notice to Executive, and Executive may terminate his
employment with the Company for Good Reason upon 90 days’ written notice to the
Company; provided, however, that the
Company shall have 30 days after receipt of such notice to remedy the basis for
such Good Reason.  Termination of Employment by Executive shall not be
a termination for Good Reason unless such termination occurs during the two (2)
year period following the initial occurrence of one or more events constituting
a Good Reason.  Notwithstanding the foregoing, the Company may
terminate Executive without Cause and without providing 90 days’ written notice
to Executive provided that the Company pays Executive the portion of his
then-current annual base salary under Section 4(a) for such 90-day period in a
single lump sum payment on 30th day
following such Termination of

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    Employment
and credits Executive with service for such 90 days for purposes of determining
amounts payable under Sections 7(b)(ii), (iii) and (v).

    

    Upon a
Termination of Employment by the Company without Cause, or a Termination of
Employment by Executive for Good Reason, the Term will immediately terminate and
all obligations of the parties under Sections 1 through 5 of this Agreement will
immediately cease, except that the Company shall pay Executive, and Executive
shall be entitled to receive, the following (in addition to any amount payable
under the last sentence of the first grammatical paragraph of this Section
7(b)):

    

    
      	
               
      

            	
              (i)

            	
              A
      cash payment in an amount equal to the product of (x) the sum of (A)
      Executive’s annual base salary under Section 4(a) at the annual rate in
      effect immediately prior to termination plus (B) the guaranteed annual
      cash bonus under Section 4(a) at the annual rate in effect immediately
      prior to termination, plus (C) the Severance Annual Incentive Amount (as
      defined in Section 6 of this agreement), multiplied by (y)
    3;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              The
      earned but unpaid portion of annual base salary and guaranteed cash
      bonus;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Any
      annual cash incentive cash compensation earned, but unpaid, for the
      calendar year prior to the calendar year in which occurs such termination
      of employment;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              All
      vested, nonforfeitable amounts owing or accrued at the date of Executive’s
      Termination of Employment under any compensation and benefit plans,
      programs and arrangements set forth or referred to in Sections 5(a) and
      5(b) in which Executive theretofore participated, in accordance with the
      terms and conditions of the plans, programs and arrangements (and
      agreements and documents thereunder) pursuant to which such compensation
      and benefits were granted;

            

    

    

    
      	
               
      

            	
              (v)

            	
              An
      amount equal to the Severance Annual Incentive Amount, which, unless a
      termination occurs during the period beginning on the date of a Change in
      Control and ending two years after a Change in Control, shall be
      multiplied by a fraction, the numerator of which is the number of days
      Executive was employed in the year of termination and the denominator of
      which is the total number of days in the year of termination;
      and

            

    

    

    
      	
               
      

            	
              (vi)

            	
              Reimbursement
      of reasonable business expenses and disbursements incurred by Executive
      prior to such termination of employment, within 60 days after Executive
      submits reasonable evidence of such expenses and disbursements to the
      Company.

            

    

    

    The
Company shall pay the amounts under clauses (i), (iii) and (v) in a single lump
sum payment no later than 30 days after Termination of
Employment.  The Company shall pay the amount under clause (ii) in a
single lump sum payment no later than (A) 30 days after Termination of
Employment or (B) such earlier date as required by Section 4(b).

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    In
addition, upon a Termination of Employment by the Company without Cause, or
Termination of Employment by the Executive for Good Reason, stock options then
held by Executive will be exercisable to the extent and for such periods
indicated in, and otherwise be governed by, the plans and programs (and
agreements and other documents thereunder) pursuant to which such stock options
were granted.  Furthermore, for a period of one (1) year after such
termination, Executive shall continue to participate in the Insurance Plans (as
defined in Section 6) as if Executive had continued in employment with the
Company during such period.  To the extent that the Insurance Plans do
not allow such continued participation, the Company shall make cash payments to
Executive equivalent on an after-tax basis to the value of the benefits
Executive would have received under the Insurance Plans if  Executive
had so continued in the employment of the Company during such period and had
continued to participate in the Insurance Plans, provided that (i) the value of
any insurance-provided benefits (including under self-funded Insurance Plans)
will be based on the premium cost to Executive, which shall not exceed the
highest risk premium charged by a carrier having an investment grade or better
credit rating, and (ii) such cash payments by the Company shall be made within
60 days after the Executive submits reasonable evidence to the Company of
Executive’s payment of such premiums.

    

    
      	
               
      

            	
              8.

            	
              Definitions.

            

    

    

    The
definitions in this Section 8 apply for purposes of this Agreement.

    

    (a)          “Cause.”  “Cause”
shall mean Executive’s gross misconduct (as defined below) or willful (as
defined below) and material breach of Section 10 of this
Agreement.  For purposes of this definition, “gross misconduct” shall
mean (A) a felony conviction in a court of law under applicable federal or state
laws which results in material damage to the Company or its subsidiaries or
materially impairs the value of the Executive’s services to the Company, or (B)
willfully engaging in one or more material acts of misconduct, or willfully
omitting to perform material duties hereunder, which act or omission
demonstrably and materially damages the Company.  For purposes of this
Agreement, a “willful” act or omission by Executive means an act or omission
that is done or omitted to be done by him not in good faith, and does not
include any act or failure to act resulting from any incapacity of
Executive.  Notwithstanding the foregoing, Executive may not be
terminated for Cause unless and until there shall have been delivered to him,
within six months after the Board (A) had knowledge of conduct or an event
allegedly constituting Cause and (B) had reason to believe that such conduct or
event could be grounds for Cause, a copy of a resolution duly adopted by a
majority affirmative vote of the membership of the Board (excluding Executive)
(after giving Executive reasonable notice specifying the nature of the grounds
for such termination and not less than 30 days to correct the acts or omissions
complained of, if correctable, and affording Executive the opportunity, together
with his counsel, to be heard before the Board) finding that, in the good faith
opinion of the Board, Executive was guilty of conduct set forth above in this
Section 8(a).

    

    (b)          “Change in
Control.”  A “Change in Control” means the happening of any of
the following events:

    

    (i)           An
acquisition by any individual, entity or group, within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, (a “Person”) of beneficial
ownership

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty
percent (50%) of either (1) the then outstanding shares of Common Stock of the
Company (the “Outstanding Common Stock”) or (2) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”); excluding,
however, the following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise, exchange or conversion of any
Convertible Securities unless such securities were themselves acquired directly
from the Company, (2) any acquisition by the Company; (3) any acquisition by H.
Matt Chambers or any of his affiliates, or (4) any acquisition by any Person
pursuant to a transaction which complies with clauses (1), (2) and (3) of
subsection (iii) of this Section 8(b); or

    

    (ii)           Within
any period of 24 consecutive months, a change in the composition of the Board
such that the individuals who, immediately prior to such period, constituted the
Board (such Board shall be hereinafter referred to as the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, for purposes hereof, that any individual who becomes a member of the
Board during such period, whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a member
of the Incumbent Board; or

    

    (iii)           The
consummation of a reorganization, merger or consolidation of the Company or of
the sale or other disposition of all or substantially all of the assets of the
Company and its direct and indirect subsidiaries taken as a whole (a “Corporate
Transaction”), excluding, however, a Corporate Transaction pursuant to which (1)
all or substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than sixty percent (60%) of, respectively, the
outstanding shares of common stock, and the combined voting power of the
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Corporate
Transaction (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets, either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (2) no Person (other than the Company) will beneficially
own, directly or indirectly, more than twenty-five
percent (25%) of, respectively, the outstanding shares of common stock of the
entity resulting from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such entity

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    entitled
to vote generally in the election of directors, except to the extent that such
ownership existed with respect to the Company prior to the Corporate
Transaction, and (3) individuals who were members of the Board immediately prior
to the approval by the stockholders of the Company of such Corporate Transaction
will constitute at least a majority of the members of the board of directors of
the entity resulting from such Corporate Transaction; or

    

    (iv)           The
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company, other than to an entity pursuant to a transaction
which would comply with clauses (1), (2) and (3) of subsection (iii) of this
Section 8(b), assuming for this purpose that such transaction were a Corporate
Transaction.

    

    
      	
               

              For
      purposes this definition of “Change of Control”, a series of transactions
      with a common purpose shall be treated as a single transaction that begins
      on the date of the first transaction in the series and ends on the date of
      the last transaction in the series.

            

    

    

    (c)          “Convertible
Security.”  “Convertible Security” means any security
convertible into or exchangeable for shares of common stock of the Company, or
any option, warrant or other right to acquire shares of common stock of the
Company.

    

    (d)          “Disability.”  “Disability”
means the failure of Executive to render and perform the services required of
him under this Agreement, for a total of 180 days of more during any consecutive
12 month period, because of any physical or mental incapacity or disability as
determined by a physician or physicians selected by the Company and reasonably
acceptable to Executive, unless, within 30 days after Executive has received
written notice from the Company of a proposed termination due to such absence,
Executive shall have returned to the full performance of his duties hereunder
and a physician or physicians (selected by the Executive and reasonably
acceptable to the Company) shall have determined that Executive’s health permits
him to handle the full performance of such duties.

    

    (e)          “Good
Reason.”  “Good Reason” means, without Executive’s prior
written consent, (A) a material diminution in Executive’s authority, duties or
responsibilities as set forth in Section 3(a), (B) a change in the Company’s
reporting structure whereby Executive is no longer reporting to the Company’s
Board of Directors, (C) a material reduction by the Company in Executive’s
annual base compensation (including base salary and guaranteed bonus) as set
forth in Section 4(a) (in which event, the Executive’s annual base compensation
in effect prior to such reduction shall be treated, for purposes of calculating
amounts payable under Sections 6 and 7, as the annual base compensation in
effect immediately prior to termination), (D) any material breach of this
Agreement by the Company, and (E) a relocation of Executive to an office that is
more than 35 miles from the latest location of Executive’s office prior to the
date of a Change in Control.

    

    (f)          “Termination of
Employment.”  “Termination of Employment” means Executive’s
termination of employment from the Company which constitutes a “separation
from

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    service”,
as such term is defined under Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”).

    

    

    
      	
               
      

            	
              9.

            	
              Excise Tax
      Gross-Up.

            

    

    

    If it
shall be determined that any payment or benefit received or to be received by
Executive under this Agreement or any other plan, arrangement or agreement of
the Company (all such payments and benefits a “Payment”), would be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Company shall pay to Executive an additional payment (a “Gross-Up Payment”) in
an amount necessary to reimburse Executive, on an after-tax basis, for the
Excise Tax and for any federal, state and local income tax and excise tax
(including any interest and penalties imposed with respect to such taxes) that
may be imposed by reason of the Payment.  For purposes of determining
the amount of any Gross-Up Payment, Executive shall be deemed to pay federal,
state and local income taxes at the highest applicable marginal rate of taxation
in the calendar year in which the Gross-Up Payment is to be made.  All
determinations required to be made under this Section 9, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a nationally known independent accounting firm regularly retained by the
Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within 15 business days of the
request for such determination.  Such request may be made by either
party.  The Company shall pay the fees and expenses of the Accounting
Firm in connection with any determinations hereunder.  Any Gross-Up
Payment shall be paid by the Company to Executive within 10 days of the
Accounting Firm’s determination of the amount thereof

    

    
      	
               
      

            	
              10.

            	
              Executive
      Covenants.

            

    

    

    (a)           Executive’s
Acknowledgment.  Executive agrees and acknowledges that in
order to assure the Company that the Company will retain its value as a going
concern, it is necessary that Executive undertake not to utilize his special
knowledge of the Company’s business and his relationships with customers and
suppliers to compete with the Company.  Executive further acknowledges
that:

    

    (i)          Executive
is one of a limited number of persons who has developed the Company’s
business;

    

    (ii)          Executive
has occupied a position of trust and confidence with the Company prior to the
date of this Agreement and, during such period and Employee’s employment under
this Agreement, Employee has acquired and will acquire an intimate knowledge of
proprietary and confidential information concerning the Company and its
business;

    

    (iii)          the
agreements and covenants contained in Sections 10(b), (c), (d), (e), (f) and (g)
are essential to protect the Company and the goodwill of its
business;

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    (iv)           Executive’s
employment with the Company has special, unique and extraordinary value to the
Company, and the Company would be irreparably damaged if Executive were to
provide services to any person or entity or otherwise act in violation of the
provisions of this Agreement;

    

    (v)          the
scope and duration of the restrictive covenants in Section 10(b) are reasonably
designed to protect a protected interest of the Company and are not excessive in
light of the circumstances; and

    

    (vi)          Executive
has a means to support himself and his dependents other than by engaging in
conduct prohibited by the restrictive covenants in Section 10(b), and the
provisions of Sections 10(b) will not impair such ability.

    

    (b)          Non-Competition;
Non-Solicitation; Non-Interference.  During the Term and for a
period of two years after the termination of Executive’s employment hereunder,
Executive will not by himself or in conjunction with others, directly or
indirectly engage (either as owner, investor, partner, member stockholder,
employer, employee, consultant, advisor, manager or director) in any business in
the United States which, at the time of such termination, is directly or
indirectly in competition with a business then conducted by the Company or any
of its subsidiaries;
provided,
however, this the limitation shall not apply if Executive’s employment is
terminated as a result of a termination by the Company without Cause or a
termination by Executive for Good Reason.  During the Term and for a
period of three years after the termination of Executive’s employment hereunder,
Executive will not by himself or in conjunction with others, directly or
indirectly (i) induce any customers of the Company or any of its subsidiaries
with whom Executive has had personal contacts or relationships, during and
within the scope of his employment with the Company, to curtail or cancel their
relationship with the Company or its subsidiaries; or (ii) induce, or attempt to
influence, any employee of the Company or any of its subsidiaries to terminate
their employment therewith.  The provisions of the first sentence of
this Section 10(b) and clauses (i) and (ii) of the immediately preceding
sentence are separate and distinct commitments independent of each
other.  It is agreed that the ownership of not more than one percent
of the equity securities of any company having securities listed on an exchange
or regularly traded in an over-the-counter market shall not, of itself, be
deemed inconsistent with the first sentence of this Section 10(b).

    

    (c)          Non-Disclosure.  Executive
shall not, at any time during the Term and thereafter (including following
Executive’s termination of employment for any reason), disclose, use, transfer
or sell, except in the course of employment with, or providing other service to,
the Company, any confidential or proprietary information of the Company and its
subsidiaries so long as such information has not otherwise been publicly
disclosed or is not otherwise in the public domain, except as required by law or
pursuant to legal process.

    

    (d)          Return of Company Materials
Upon Termination.  Executive acknowledges that all records and
documents containing confidential or proprietary information of the Company or
its subsidiaries prepared by Executive or coming into his possession by virtue
of his employment by the Company are and will remain the property of the Company
and its subsidiaries.  Upon termination of his employment with the
Company, Executive shall immediately return to the Company all such items and
all copies of such items, in his possession.

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    

    (e)          Cooperation With Regard to
Litigation.  Executive agrees to cooperate with the Company,
during the Term and thereafter (including following Executive’s termination of
employment for any reason), by making himself available to testify on behalf of
the Company or any subsidiary or affiliate of the Company, in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, and to
assist the Company, or any subsidiary or affiliate of the Company, in any such
action, suit or proceeding, by providing information and meeting and consulting
with the Board or its representatives or counsel, or representatives or counsel
to the Company or any subsidiary or affiliate of the Company, as reasonably
requested and at a time mutually convenient to Executive and the
Company.  The Company agrees to reimburse the Executive, on an
after-tax basis, for all expenses actually incurred in connection with his
provision of testimony or assistance.

    

    (f)          Non-Disparagement.  Executive
shall not, at any time during the Term and thereafter, make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the Company or any of its subsidiaries or affiliates
or their respective officers, directors, employees, advisors, businesses or
reputations.  Notwithstanding the foregoing, nothing in this Agreement
shall preclude Executive from making truthful statements or disclosures that are
required by applicable law, regulation or legal process.

    

    (g)          Inventions.  Executive
acknowledges that all inventions, innovations, discoveries, improvements,
developments, methods, know-how, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable) which (i) relate to
the then current business or any anticipated business of the Company, the
Company’s research and development or the Company’s existing or future services
or products and (ii) which are conceived, developed or made by Executive during
and in the scope of his employment by the Company (“Work Product”) belong to the
Company.  Executive shall promptly disclose such Work Product to the
Company and perform all actions reasonably requested by the Company (whether
during or after his period of employment with the Company) to establish and
confirm such ownership (including the execution of assignments, consents, powers
of attorney and other instruments).

    

    (h)          Remedies.  Executive
acknowledges that the agreements and covenants in Sections 10(b), (c), (d), (e)
and (f) are reasonable and necessary for the protection of the Company’s
business interests, that in the event of any actual or threatened violation of
the covenants contained in Sections 10(b), (c), (d), (e) and (f), the Company
will suffer irreparable injury, Company’s damages will be difficult to ascertain
and the Company’s remedy at law will be inadequate.  Employee
accordingly agrees that, subject to applicable law, in the event of any actual
or threatened breach by him of any of the covenants set forth in Sections 10(b),
(c), (d), (e) and (f), the Company shall be entitled to injunctive and other
equitable relief, including immediate temporary injunctive and other equitable
relief.  Nothing contained herein shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able to
prove.

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

    (i)           Survival.  The
provisions of this Section 10 shall survive the termination or expiration of
this Agreement in accordance with the terms hereof.

    

    
      	
               
      

            	
              11.

            	
              Governing Law; Disputes;
      Arbitration.

            

    

    

    (a)          Governing
Law.  This Agreement is governed by and is to be construed,
administered and enforced in accordance with the laws of the State of Delaware,
without regard to Delaware conflicts of law principles, except insofar as the
Delaware General Corporation Law and federal laws and regulations may be
applicable.  If, under the governing law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation, ordinance or other principle of law, such portion shall be
deemed to be modified or altered to the extent necessary to conform thereto or,
if that is not possible, to be omitted from this Agreement.  The
invalidity of any such portion shall not affect the force, effect, and validity
of the remaining portion hereof.  If any court determines that any
provision of Section 10 is unenforceable because of the duration or geographic
scope of such provision, it is the parties’ intent that such court shall have
the power to modify the duration or geographic scope of such provision, as the
case may be, to the extent necessary to render the provision enforceable, and,
in its modified form, such provision shall be enforced.

    

    (b)          Reimbursement of Expenses in
Enforcing Rights.  All reasonable costs and expenses (including
reasonable fees and disbursements of counsel) incurred by Executive during the
Term and thereafter (including following Executive’s termination of employment
for any reason) in seeking to interpret this Agreement or enforce rights
pursuant to this Agreement shall be paid on behalf of or reimbursed to Executive
promptly by the Company, whether or not Executive is successful in asserting
such rights; provided, however, that no
reimbursement shall be made of such expenses relating to any unsuccessful
assertion of rights if and to the extent that Executive’s assertion of such
rights was in bad faith or frivolous, as determined by independent counsel
mutually acceptable to the Executive and the Company.

    

    (c)          Arbitration.  Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration in Birmingham, Alabama by a panel
of three arbitrators in accordance with the rules of the American Arbitration
Association in effect at the time of submission to
arbitration.  Judgment may be entered on the arbitrators’ award in any
court having jurisdiction.  For purposes of entering any judgment upon
an award rendered by the arbitrators, the Company and Executive hereby consent
to the jurisdiction of any or all of the following courts: (i) the United States
District Court for the District of Alabama, (ii) any of the courts of the State
of Alabama, or (iii) any other court having jurisdiction.  The Company
and Executive further agree that any service of process or notice requirements
in any such proceeding shall be satisfied if the rules of such court relating
thereto have been substantially satisfied.  The Company and Executive
hereby waive, to the fullest extent permitted by applicable law, any objection
which they may now or hereafter have to such jurisdiction and any defense of
inconvenient forum.  The Company and Executive hereby agree that a
judgment upon an award rendered by the arbitrators may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to Section 11(b), the Company shall bear all costs and expenses arising
in connection with any arbitration proceeding pursuant to this Section
11.  Notwithstanding any

    

    
      
        
           

        

        
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    provision
in this Section 11, Executive shall be entitled to seek (in the arbitration
proceeding or in any court proceeding) specific performance of Executive’s right
to be paid during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

    

    (d)          Interest on Unpaid
Amounts.  Any amounts that have become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of
law pursuant to this Section 11 but which are not timely paid shall bear
interest at the prime rate in effect at the time such payment first becomes
payable, as quoted in The Wall Street Journal (Midwest edition).  Any
interest payable under this Section 11(d) shall be paid on the same date as the
amounts to which such interest relates are actually paid.

    

    
      	
               
      

            	
              12.

            	
              Miscellaneous.

            

    

    

    (a)          General.  This
Agreement cancels and supersedes any and all prior agreements and understandings
between the parties hereto with respect to the employment of Executive by the
Company and its subsidiaries.  This Agreement constitutes the entire
agreement among the parties with respect to the matters herein provided, and no
modification or waiver of any provision hereof shall be effective unless in
writing and signed by the parties hereto.  Executive shall not be
entitled to any payment or benefit under this Agreement which duplicates a
payment or benefit received or receivable by Executive under such prior
agreements and understandings or under any benefit or compensation plan of the
Company.  As used in this Agreement: (1) the terms “including”,
“includes” and words of like import shall be construed broadly as if followed by
“without limitation”; and (2) the terms “herein”, “hereof” and “hereunder” refer
to this Agreement as a whole, not just the particular section where such term
appears.

    

    (b)          Non-Transferability.  Neither
this Agreement nor the rights or obligations hereunder of the parties hereto
shall be transferable or assignable by Executive, except in accordance with the
laws of descent and distribution or as specified in Section
12(c).  The Company may assign this Agreement and the Company’s rights
and obligations hereunder, and shall assign this Agreement, to any Successor (as
hereinafter defined) which, by operation of law or otherwise, continues to carry
on substantially the business of the Company prior to the event of succession,
and the Company shall, as a condition of the succession, require such Successor
to assume in writing the Company’s obligations under (and agree in writing to be
bound by) this Agreement.  For purposes of this Agreement, “Successor”
shall mean any person that succeeds to, or has the practical ability to control
(either immediately or with the passage of time), the Company’s business
directly, by merger or consolidation, or indirectly, by purchase of the
Company’s voting securities or all or substantially all of its assets, or
otherwise.

    

    (c)          Beneficiaries.  Executive
shall be entitled to designate (and change, to the extent permitted under
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits payable hereunder following Executive’s death.

    

    (d)          Notices.  Whenever
under this Agreement it becomes necessary to give notice, such notice shall be
in writing, signed by the party or parties giving or making the same, and shall
be deemed to have been duly given (i) upon actual receipt (or refusal of
receipt) if delivered personally;

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    (ii)
three business days following deposit, if sent by certified or registered mail,
return receipt requested, postage prepaid; (iii) one business day following
deposit with a documented overnight delivery service or (iv) upon transmission,
if sent by facsimile (with confirmation receipt and followed by a copy sent by
regular mail), in each case to the appropriate address or number as set forth
below or at such other address as may be designated by such party by like
notice:

    

    If to the
Company:

    

    Confederate
Motors, Inc.

    2222 5th
Avenue South

    Birmingham,
Alabama 35233

    (205)
324-9888 - Phone

    (205)
449-9747 - Fax

    matt@confederate.com

    Attention:
H. Matthew Chambers

    

    If to
Executive:

    

    H. Matthew Chambers

    101 Cerf Place

    Mandeville, Louisiana
70471

    (504)
236-9652 - Phone

    matt@confederate.com

    

    (e)          Reformation.  The
invalidity of any portion of this Agreement shall not be deemed to render the
remainder of this Agreement invalid.

    

    (f)          Headings.  The
headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.

    

    (g)          No General
Waivers.  The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions.  No such waiver shall be effective unless in writing and
signed by the party against whom such waiver is sought to be
enforced.

    

    (h)          No Obligation To
Mitigate.  Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of
employment; provided, however, that, to the
extent Executive receives from a subsequent employer health or other insurance
benefits that are substantially similar to the benefits referred to in Section
5(c) hereof, any such benefits to be provided by the Company to Executive
following the Term shall be correspondingly reduced.

    

    
      
        
           

        

        
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    (i)           Offsets;
Withholding.  The amounts required to be paid by the Company to
Executive pursuant to this Agreement shall not be subject to offset. The
foregoing and other provisions of this Agreement notwithstanding, all payments
to be made to Executive under this Agreement, including under Sections 6 and 7,
or otherwise by the Company will be subject to required withholding taxes and
other required deductions.

    

    (j)          Successors and
Assigns.  This Agreement shall be binding upon and shall inure
to the benefit of Executive, his heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit of the Company
and its successors and assigns.

    

    (k)          Reimbursement of Expenses,
Certain Other Payments.  Notwithstanding any provision to the
contrary herein:

    

    (1)           any
payment to Executive for reimbursement of expenses or disbursements pursuant to
this Agreement (including pursuant to Section 5(c), Section 10(e), Section
11(b), clause (v) of Section 6, clause (iv) of Section 7(a) or clause (vi) of
Section 7(b)), any payment on Executive’s behalf pursuant to Section 11(b), and
any payment pursuant to Section 9 or the last grammatical paragraph of Sections
6 and 7(b), shall be made no later than the end of the Executive’s taxable year
following the taxable year in which such expenses and disbursements (including
insurance premiums contemplated by Sections 6 and 7(b)) are
incurred;

    

    (2)           any
such amount paid during one taxable year shall not affect any such amount
payable the Company during a subsequent taxable year; and

    

    (3)           the
right to such payment may not be exchanged or substituted for other forms of
compensation to Executive.

    

    (l)  Section 409A. The
parties intend that the payments and benefits under this Agreement are either
exempt from Section 409A of the Code or fully comply with the payout and other
limitations and restrictions imposed under Section 409A of the Code.  In
this connection, the payout timing provisions and any other terms of this
Agreement shall be interpreted to be exempt from Section 409A of the Code or
comply with the payout and other limitations and restrictions imposed under
Section 409A of the Code, to the extent necessary to avoid the penalties
otherwise imposed under Section 409A of the Code.  The Company and
Executive agree to make in good faith such changes to this Agreement, without
changing the basic economics of this Agreement, as are necessary to avoid
penalties imposed under Section 409A of the Code.

    

    13.           Income Tax
Treatment.

    

    Executive
and the Company acknowl­edge that it is the intention of the Company to
deduct all amounts paid by the Company to Executive pursuant to this Agreement,
including under Sections 6 and 7 as ordinary and necessary business expenses for
income tax purposes.  Executive agrees and represents that he will
treat all such amounts as ordinary income for income tax purposes, and should he
report such amounts as other than ordinary income for income tax purposes, he
will

    

    
      
        
           

        

        
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    indemnify
and hold the Company harmless from and against any and all taxes, penalties,
interest, costs and expenses, including reasonable attorneys’ and accounting
fees and costs, which are incurred by Company directly or indirectly as a result
thereof.

    

    14.           
Key Man Life
Insurance.

    

    If the
Company, in its sole discretion, desires to procure “key man” insurance covering
the life of Executive, Executive shall cooperate with the Company in procuring
such insurance and shall, at the request of the Company, submit to such medical
examinations, supply such information and execute such documents as may be
required by the insurance company to which the Company has applied for
insurance.  Executive shall use his reasonable efforts to qualify for
the standard premium category of such insurance company.  Executive
shall have no interest whatsoever in any “key man” insurance policy procured by
the Company.

    

    

    

    IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written.

    

       
CONFEDERATE MOTORS, INC.

    

    By:      __________________________                                              

    Name:

    Title:

    

    EXECUTIVE

    

    

    [_____________]

     

     

    18

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