Document:

EX-10.3

Exhibit 10.3

UNCONDITIONAL GUARANTY

June 16, 2005

TradeStation Securities, Inc.

8050 S.W. 10th Street, Suite 4000

Plantation, Florida 33324

(Individually and collectively “Borrower”)

TradeStation Group, Inc.

8050 S.W. 10th Street, Suite 4000

Plantation, Florida 33324

(Individually and collectively “Guarantor”)

Wachovia Bank, National Association

225 Water Street

Jacksonville, Florida 32202

(Hereinafter referred to as “Bank”)

To induce Bank to make, extend or renew loans, advances, credit, or other financial accommodations
to or for the benefit of Borrower, which are and will be to the direct interest and advantage of
the Guarantor, and in consideration of loans, advances, credit, or other financial accommodations
made, extended or renewed to or for the benefit of Borrower, which are and will be to the direct
interest and advantage of the Guarantor, Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to Bank and its successors, assigns and affiliates the timely payment
and performance of all liabilities and obligations of Borrower to Bank under the Loan Documents, as
defined below, and all obligations of Borrower to Bank or any of its affiliates under any swap
agreement (as defined in 11 U.S.C. § 101, as in effect from time to time), however and whenever
incurred or evidenced, whether primary, secondary, direct, indirect, absolute, contingent, due or
to become due, now existing or hereafter contracted or acquired, and all modifications, extensions
and renewals thereof (collectively, the “Guaranteed Obligations”).

Guarantor further covenants and agrees:

GUARANTOR’S LIABILITY. This Guaranty is a continuing and unconditional guaranty of payment and
performance and not of collection. This Guaranty does not impose any obligation on Bank to extend
or continue to extend credit or otherwise deal with Borrower at any subsequent time. This Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any time any payment of
the Guaranteed Obligations is rescinded, avoided or for any other reason must be returned by Bank,
and the returned payment shall remain payable as part of the Guaranteed Obligations, all as though
such payment had not been made. Except to the extent the provisions of this Guaranty give Bank
additional rights, this Guaranty shall not be deemed to supersede or replace any other guaranties
given to Bank by Guarantor; and the obligations guaranteed hereby shall be in addition to any other
obligations guaranteed by Guarantor pursuant to any other agreement of guaranty given to Bank and
other guaranties of the Guaranteed Obligations.

TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty only by written notice, delivered
personally to or received by certified or registered United States Mail by an authorized officer of
Bank at the address for notices provided herein. Such termination shall be effective only with
respect to Guaranteed Obligations arising more than 15 days after the date such written notice is
received by said Bank officer. Such termination shall not be effective with respect to Guaranteed
Obligations (including any subsequent extensions, modifications or compromises of the Guaranteed
Obligations) then existing, or Guaranteed Obligations arising subsequent to receipt by Bank of said
notice if such Guaranteed Obligations are a result of Bank’s obligation to make advances pursuant
to a commitment, or are based on Borrower’s obligations to make payments pursuant to any swap
agreement (as defined in 11 U.S.C. § 101, as in effect from time to time), entered into prior to
expiration of the 15 day notice period, or are a result of advances which are necessary for Bank to
protect or preserve its interests.

CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank (and, with respect to swap
obligations, its affiliates) may from time to time, in its sole discretion, without affecting,
impairing, lessening or releasing the obligations of Guarantor hereunder: (a) extend or modify the
time, manner, place or terms of payment or performance and/or otherwise change or modify the credit
terms of the Guaranteed Obligations; (b) increase, renew, or enter into a novation of the
Guaranteed Obligations; (c) waive or consent to the departure from terms of the Guaranteed
Obligations; (d) permit any change in the business or other dealings and relations of Borrower or
any other guarantor with Bank; (e) proceed against, exchange, release, realize upon, or otherwise
deal with in any manner, any liabilities or obligations of Guarantor; and (f) proceed against,
settle, release, or compromise with Borrower, any insurance carrier, or any other person or entity
liable as to any part of the Guaranteed Obligations, and/or subordinate the payment of any part of
the Guaranteed Obligations to the payment of any other obligations, which may at any time be due or
owing to Bank; all in such manner and upon such terms as Bank may deem appropriate, and without
notice to or further consent from Guarantor. No invalidity, irregularity, discharge or
unenforceability of, or action or omission by, Bank relating to any part of the Guaranteed
Obligations or any security therefor shall affect or impair this Guaranty.

WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights, demands, and
defenses Guarantor may have with respect to Bank (and, with respect to swap obligations, its
affiliates) and collection of the Guaranteed Obligations: (a) promptness and diligence in
collection of any of the Guaranteed Obligations from Borrower or any other person liable thereon,
and in foreclosure of any security interest and sale of any property serving as collateral for the
Guaranteed Obligations; (b) any law or statute that requires that Bank (and, with respect to swap
obligations, its affiliates) make demand upon, assert claims against, or collect from Borrower or
other persons or entities, foreclose any security interest, sell collateral, exhaust any remedies,
or take any other action against Borrower or other persons or entities prior to making demand upon,
collecting from or taking action against Guarantor with respect to the Guaranteed Obligations,
including any such rights Guarantor might otherwise have had under Va. Code §§ 49-25 and 49-26,
et seq., N.C.G.S. §§ 26-7, et seq., Tenn. Code Ann. § 47-12-101, O.C.G.A. §
10-7-24, Mississippi Code Ann. Section 87-5-1, and any successor statute and any other applicable
law; (c) any law or statute that requires that Borrower or any other person be joined in, notified
of or made part of any action against Guarantor; (d) that Bank or its affiliates preserve, insure
or perfect any security interest in collateral or sell or dispose of collateral in a particular
manner or at a particular time, provided that Bank’s obligation to dispose of Collateral in a
commercially reasonable manner is not waived hereby; (e) notice of extensions, modifications,
renewals, or novations of the Guaranteed Obligations, of any new transactions or other
relationships between Bank, Borrower and/or any guarantor, and of changes in the financial
condition of, ownership of, or business structure of Borrower or any other guarantor; (f) except to
the extent any of the following rights are expressly granted in any of the Loan Documents,
presentment, protest, notice of dishonor, notice of default, demand for payment, notice of
intention to accelerate maturity, notice of acceleration of maturity, notice of sale, and all other
notices of any kind whatsoever to which Guarantor may be entitled; (g) the right to assert against
Bank or its affiliates any defense (legal or equitable), set-off, counterclaim, or claim that
Guarantor may have at any time against Borrower or any other party liable to Bank or its
affiliates; (h) all defenses relating to invalidity, insufficiency, unenforceability, enforcement,
release or impairment of Bank or its affiliates’ lien on any collateral, of the Loan Documents, or
of any other guaranties held by Bank; (i) any right to which Guarantor is or may become entitled to
be subrogated to Bank or its affiliates’ rights against Borrower or to seek contribution,
reimbursement, indemnification, payment or the like, or participation in any claim, right or remedy
of Bank or its affiliates against Borrower or any security which Bank or its affiliates now has or
hereafter acquires, until such time as the Guaranteed Obligations have been fully satisfied beyond
the expiration of any applicable preference period; (j) any claim or defense that acceleration of
maturity of the Guaranteed Obligations is stayed against Guarantor because of the stay of assertion
or of acceleration of claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (k) the right to marshalling of Borrower’s
assets or the benefit of any exemption claimed by Guarantor. Guarantor acknowledges and represents
that Guarantor has relied upon Guarantor’s own due diligence in making an independent appraisal of
Borrower, Borrower’s business affairs and financial condition, and any collateral; Guarantor will
continue to be responsible for making an independent appraisal of such matters; and Guarantor has
not relied upon Bank or its affiliates for information regarding Borrower or any collateral.

FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank and its affiliates that
on and after the date hereof: (a) the fair saleable value of Guarantor’s assets exceeds its
liabilities, Guarantor is meeting its current liabilities as they mature, and Guarantor is and
shall remain solvent; (b) all financial statements of Guarantor furnished to Bank are correct and
accurately reflect in all material respects, the financial condition of Guarantor as of the
respective dates thereof; (c) since the date of such financial statements, there has not occurred a
material adverse change in the financial condition of Guarantor; and (d) as of the date hereof,
there are not now pending any undischarged judgments against Guarantor, no federal or state tax
liens have been filed or threatened against Guarantor, and Guarantor is not in default or claimed
default under any material agreement; and (e) at such reasonable times as Bank requests, Guarantor
will furnish Bank and its affiliates with such other financial information as Bank and its
affiliates may reasonably request; provided that such information shall be used strictly for the
Bank’s internal credit review purposes and the confidentiality of such information shall be
protected in accordance with the Bank’s policies on confidential information and in accordance with
applicable law.

INTEREST AND APPLICATION OF PAYMENTS. Regardless of any other provision of this Guaranty or other
Loan Documents, if for any reason the effective interest on any of the Guaranteed Obligations
should exceed the maximum lawful interest, the effective interest shall be deemed reduced to and
shall be such maximum lawful interest, and any sums of interest which have been collected in excess
of such maximum lawful interest shall be applied as a credit against the unpaid principal balance
of the Guaranteed Obligations. Monies received from any source by Bank or its affiliates for
application toward payment of the Guaranteed Obligations may be applied to such Guaranteed
Obligations in any manner or order deemed appropriate by Bank and its affiliates.

DEFAULT. If any of the following events occur, a default (“Default”) under this Guaranty shall
exist: (a) failure of timely payment or performance of the Guaranteed Obligations or a default
under any Loan Document, with respect to which any non-payment related failure to perform is not
cured within ten (10) days following written notice to Guarantor (the right to cure may not be
utilized more than once in any twleve (12) month period); (b) a material breach by Guarantor of any
agreement or representation contained or referred to in the Guaranty, or any of the Loan Documents,
or contained in any other contract or agreement of Guarantor with Bank or its affiliates, whether
now existing or hereafter arising; (c) the death of, appointment of a guardian for, dissolution of,
termination of existence of, loss of good standing status by, appointment of a receiver for,
assignment for the benefit of creditors of, or the commencement of any insolvency or bankruptcy
proceeding by or against Guarantor; and/or (d) Bank determines in good faith, in its reasonable
discretion, that the prospects for payment or performance of the Guaranteed Obligations are
materially impaired or a material adverse change has occurred in the business or prospects of
Borrower or Guarantor, financial or otherwise.

If a Default occurs, the Guaranteed Obligations shall be due immediately and payable without
notice, other than Guaranteed Obligations under any swap agreements (as defined in 11 U.S.C. § 101,
as in effect from time to time) with Bank or its affiliates, which shall be due in accordance with
and governed by the provisions of said swap agreements, and, Bank and its affiliates may exercise
any rights and remedies as provided in this Guaranty and other Loan Documents, or as provided at
law or equity. Guarantor shall pay interest on the Guaranteed Obligations from such Default at the
highest rate of interest charged on any of the Guaranteed Obligations.

ATTORNEYS’ FEES AND OTHER COSTS OF COLLECTION. Guarantor shall pay all of Bank’s and its
affiliates’ reasonable expenses incurred to enforce or collect any of the Guaranteed Obligations,
including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees
and expenses, whether incurred without the commencement of a suit, in any suit, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.

SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) other than pursuant to expense allocation
arrangements and agreements entered into to comply with applicable regulatory requirements, to
subordinate the obligations now or hereafter owed by Borrower to Guarantor (“Subordinated Debt”) to
any and all obligations of Borrower to Bank or its affiliates now or hereafter existing while this
Guaranty is in effect, provided however that Guarantor may receive regularly scheduled principal
and interest payments on the Subordinated Debt so long as (i) all sums due and payable by Borrower
to Bank and its affiliates have been paid in full on or prior to such date, and (ii) no event or
condition which constitutes or which with notice or the lapse or time would constitute an event of
default with respect to the Guaranteed Obligations shall be continuing on or as of the payment
date; (b) Guarantor will either place a legend indicating such subordination on every note, ledger
page or other document evidencing any part of the Subordinated Debt or deliver such documents to
Bank; and (c) except as permitted by this paragraph, Guarantor will not request or accept payment
of or any security for any part of the Subordinated Debt, and any proceeds of the Subordinated Debt
paid to Guarantor, through error or otherwise, shall immediately be forwarded to Bank by Guarantor,
properly endorsed to the order of Bank, to apply to the Guaranteed Obligations.

MISCELLANEOUS. Assignment. This Guaranty and other Loan Documents shall inure to the benefit of
and be binding upon the parties and their respective heirs, legal representatives, successors and
assigns. Bank’s interests in and rights under this Guaranty and other Loan Documents are freely
assignable, in whole or in part, by Bank. Any assignment shall not release Guarantor from the
Guaranteed Obligations. Organization; Powers. Guarantor (i) is (a) an adult individual and is
sui juris, or (b) a corporation, general partnership, limited partnership, limited
liability company or other legal entity (as indicated below), duly organized, validly existing and
in good standing under the laws of its state of organization, and is authorized to do business in
each other jurisdiction wherein its ownership of property or conduct of business legally requires
such organization, (ii) has the power and authority to own its properties and assets and to carry
on its business as now being conducted and as now contemplated; and (iii) has the power and
authority to execute, deliver and perform, and by all necessary action has authorized the
execution, delivery and performance of, all of its obligations under this Guaranty and any other
Loan Document to which it is a party. Applicable Law; Conflict Between Documents. This Guaranty
shall be governed by and construed under the laws of the state named in Bank’s address shown above
without regard to that state’s conflict of laws principles. If the terms of this Guaranty should
conflict with the terms of any commitment letter that survives closing, the terms of this Guaranty
shall control. Guarantor’s Accounts. Except as prohibited by law, Guarantor grants Bank and its
affiliates a security interest in all of Guarantor’s accounts with Bank and its affiliates.
Jurisdiction. Guarantor irrevocably agrees to non-exclusive personal jurisdiction in the state
named in Bank’s address shown above. Severability. If any provision of this Guaranty or of the
other Loan Documents shall be prohibited or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Guaranty or other Loan Documents.
Notices. Any notices, demands or similar communications to Guarantor shall be sufficiently given
if in writing and mailed or delivered to Guarantor’s address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to Wachovia Bank, National
Association, Mail Code VA7628, P.O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National
Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011 or such other address
as Bank may specify in writing from time to time. Notices to Bank must include the mail code. In
the event that Guarantor changes Guarantor’s address at any time prior to the date the Guaranteed
Obligations are paid in full, Guarantor agrees to promptly give written notice of said change of
address to Bank by registered or certified mail, return receipt requested, all charges prepaid.
Plural; Captions. All references in the Loan Documents to borrower, guarantor, person, document or
other nouns of reference mean both the singular and plural form, as the case may be, and the term
“person” shall mean any individual person or entity. The captions contained in the Loan Documents
are inserted for convenience only and shall not affect the meaning or interpretation of the Loan
Documents. Binding Contract. Guarantor by execution of and Bank by acceptance of this Guaranty
agree that each party is bound to all terms and provisions of this Guaranty. Amendments, Waivers
and Remedies. No waivers, amendments or modifications of this Guaranty and other Loan Documents
shall be valid unless in writing and signed by an officer of Bank. No waiver by Bank or its
affiliates of any Default shall operate as a waiver of any other Default or the same Default on a
future occasion. Neither the failure nor any delay on the part of Bank or its affiliates in
exercising any right, power, or privilege granted pursuant to this Guaranty and other Loan
Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise or the exercise of any other right, power or privilege. All
remedies available to Bank or its affiliates with respect to this Guaranty and other Loan Documents
and remedies available at law or in equity shall be cumulative and may be pursued concurrently or
successively. Partnerships. If Guarantor is a partnership, the obligations, liabilities and
agreements on the part of Guarantor shall remain in full force and effect and fully applicable
notwithstanding any changes in the individuals comprising the partnership. The term “Guarantor”
includes any altered or successive partnerships, and predecessor partnership(s) and the partners
shall not be released from any obligations or liabilities hereunder. Loan Documents. The term
“Loan Documents” refers to all documents executed in connection with and related to the Guaranteed
Obligations and may include, without limitation, loan agreements, promissory notes and any
amendments or supplements (excluding swap agreements as defined in 11 U.S.C. § 101, as in effect
from time to time). LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES
HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY
CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR
AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE
A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2)
PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY
SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE. FINAL AGREEMENT. This Agreement and the other Loan Documents represent
the final agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

FINANCIAL COVENANT. Guarantor (for these purposes only, viewed on a consolidated basis with its
subsidiaries) agrees to the following provisions from the date hereof until final payment in full
of the Guaranteed Obligations, unless Bank shall otherwise consent in writing. Funded Debt to
EBITDA Ratio. Guarantor shall, at all times, maintain a Funded Debt to EBITDA Ratio of not more
than 1.00 to 1.00. This covenant shall be monitored for compliance purposes quarterly on a rolling
four quarter basis. “Funded Debt to EBITDA Ratio” shall mean the sum of all Funded Debt divided by
EBITDA. “Funded Debt” shall mean, as applied to any person or entity, the sum of all indebtedness
for borrowed money, including, without limitation, capital lease obligations and and unreimbursed
drawings under letters of credit, or any other monetary obligation evidenced by a note, bond,
debenture or other similar agreement or similar instrument of that person or entity, excluding any
debt fully subordinated to Bank on terms and conditions acceptable to Bank. “EBITDA” shall mean
the sum of earnings before interest expense, income taxes, depreciation and amortization.

FINANCIAL AND OTHER INFORMATION. Guarantor shall deliver to Bank such information as Bank may
reasonably request from time to time, including without limitation, financial statements and
information pertaining to Guarantor’s financial condition; provided that such information shall be
used strictly for the Bank’s internal credit review purposes and the confidentiality of such
information shall be protected in accordance with the Bank’s policies on confidential information
and in accordance with applicable law. Such information shall be true, complete, and accurate.

NEGATIVE COVENANTS. Guarantor agrees that from the date hereof and until final payment in full of
the Guaranteed Obligations, unless Bank shall otherwise consent in writing, Guarantor will not:
Default on Other Contracts or Obligations. Default on any material contract with, or material
obligation when due to, a third party or default in the performance of any obligation to a third
party incurred for money borrowed. Government Intervention. Permit the assertion or making of any
seizure, vesting or intervention by or under authority of any governmental entity, as a result of
which the management of Guarantor or any guarantor is displaced of its authority in the conduct of
its respective business or such business is curtailed or materially impaired. Judgment Entered.
Permit the entry of any monetary judgment or the assessment against, the filing of any tax lien
against, or the issuance of any writ of garnishment or attachment against any property of or debts
due.

ANNUAL FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 120 days after the close of
each fiscal year, audited financial statements reflecting its operations during such fiscal year,
including, without limitation, a balance sheet, profit and loss statement, statement of cash flows,
and the auditors management letter, prepared in accordance with generally accepted accounting
principles, applied on a consistent basis. All such statements shall be examined by an independent
certified public accountant reasonably acceptable to Bank. The opinion of such independent
certified public accountant shall not be acceptable to Bank if qualified due to any limitations in
scope imposed by Guarantor or any other person or entity.

PERIODIC FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 45 days after the end of
each fiscal quarter, unaudited management-prepared quarterly financial statements including,
without limitation, a balance sheet, profit and loss statement and statement of cash flows, and
prepared in conformity with generally accepted accounting principles, applied on a basis
consistent. Such statements shall be certified as to their correctness in all material respects by
a principal financial officer of Guarantor and, in each case, if audited statements are required,
subject to audit and year-end adjustments.

COMPLIANCE CERTIFICATE. Together with each set of annual financial statements and periodic
financial statements as described above, Guarantor shall deliver to Bank a compliance certificate
in a form attached hereto as Exhibit “A”.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS GUARANTY, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS GUARANTY. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL
SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES
CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION
WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS GUARANTY.

1

IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has caused this
Unconditional Guaranty to be executed under seal.

TradeStation Group, Inc.

By: /s/ Salomon Sredni

	 	 	 	Name: Salomon Sredni

Title: President 

Tracking #: 1

CAT — Deal # 305919 Facility ID 276516

2

Exhibit A

COVENANT COMPLIANCE CERTIFICATE

The undersigned, on behalf of TradeStation Group, Inc., a Florida corporation (“Guarantor”),
hereby certifies to Wachovia Bank, National Association (“Bank”), and pursuant to the Unconditional
Guaranty (“Guaranty”) dated as of June      , 2005 executed and delivered by Guarantor in favor of
Bank, as follows:

1. This Certificate is delivered to you pursuant to the Guaranty. Capitalized terms used
herein and not defined herein shall have the meanings assigned thereto in the loan documents (the
“Loan Documents”) executed in connection with the Guaranty.

2. I have reviewed the financial statements of the Guarantor and the consolidated
subsidiaries, including TradeStation Securities, Inc. (the “Borrower”), dated as of
     , 200     and for the fiscal quarter then ended and such statements
fairly present, in all material respects, the financial condition of the Guarantor and the
consolidated subsidiaries as of the dates indicated and the results of its operations and cash
flows for the period indicated.

3. I have reviewed the terms of the loan documents and have made, or caused to be made under
my supervision, a review in reasonable detail of the transactions and the condition of the
borrower, guarantor and the consolidated subsidiaries during the accounting period covered by the
financial statements referred to in paragraph 2 above. Such review has not disclosed the existence
during or at the end of such accounting period of any condition or event that constitutes a default
pursuant to the loan documents, nor do i have any knowledge of the existence of any such condition
or event as of the date of this compliance certificate.

4. The Guarantor and the consolidated subsidiaries are in compliance with the Funded Debt to
EBITDA financial covenant referenced in the Guaranty, as set forth in the attached Exhibit A.

[Remainder of page intentionally left blank]

3

WITNESS the following signature as of the        day of
                              , 200      .

TradeStation Group, Inc.

By: _     _     _     _

Name: _     _     _     _

Title: Chief Financial Officer

4

Schedule A

to

Covenant Compliance Certificate

	 	 	 	 	 
	COVENANT	 	ACTUAL
	 
	 	As of ___

	Funded Debt to EBITDA Ratio
	 	 	 	 
	(a) Funded Debt
	 	$	___________	 

EBITDA Calculation (rolling 4Q’s)

	 	 	 	 	 	 	 
	 	 	Most Recent FYE Dated(b)	 	Plus: Most Recent Interim(c)	 	Less: Interim – Last Year(d)
	Net Income

	 	

	 	

	 	

	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Plus:

	 	

	 	

	 	

	 
	 	 	 	 	 	 
	Interest Expense

	 	

	 	

	 	

	 
	 	 	 	 	 	 
	Income Taxes

	 	

	 	

	 	

	 
	 	 	 	 	 	 
	Depreciation

	 	

	 	

	 	

	 
	 	 	 	 	 	 
	Amortization

	 	 	 	 
	 	 
	
 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	Total EBITDA

	 	

	 	

	 	

Rolling 4Q EBITDA (b+c-d) = _     _     _ (e)

The product of (a) divided by (e) equals Funded Debt to EBITDA Ratio of
_     _     _     _ .

Bank Requirement : not less than 1.00 to 1.00

Compliance? Yes            No

Page 2

5Exhibit 10.1 2005 Stock Option Plan

    EXHIBIT
      10.1

    

    eLinear,
      Inc.

    2005
      Stock Option Plan

    ARTICLE
      I - PLAN

    

    1.1 Purpose.
      This
      Plan is a plan for key employees, officers, directors, and consultants of the
      Company and its Affiliates and is intended to advance the best interests of
      the
      Company, its Affiliates, and its stockholders by providing those persons who
      have substantial responsibility for the management and growth of the Company
      and
      its Affiliates with additional incentives and an opportunity to obtain or
      increase their proprietary interest in the Company, thereby encouraging them
      to
      continue in the employ of the Company or any of its Affiliates.

    

    1.2
       Rule
      16b-3 Plan.
      The
      Company is subject to the reporting requirements of the Securities Exchange
      Act
      of 1934, as amended (the “1934 Act”), and therefore the Plan is intended to
      comply with all applicable conditions of Rule 16b-3 (and all subsequent
      revisions thereof) promulgated under the 1934 Act. To the extent any provision
      of the Plan or action by the Board of Directors or Committee fails to so comply,
      it shall be deemed null and void, to the extent permitted by law and deemed
      advisable by the Committee. In addition, the Board of Directors may amend the
      Plan from time to time, as it deems necessary in order to meet the requirements
      of any amendments to Rule 16b-3 without the consent of the shareholders of
      the
      Company.

    

    1.3
       Effective
      Date of Plan.
      The
      Plan shall be effective June 2, 2005 (the “Effective Date”), provided that the
      Plan shall have been approved by at least a majority vote of stockholders voting
      in person or by proxy at a duly held stockholders’ meeting within one year of
      such date. No Incentive Option, Nonqualified Option, Stock Appreciation Right,
      or Restricted Stock Award shall be granted pursuant to the Plan ten years after
      the Effective Date.

     

    ARTICLE
      II - DEFINITIONS

    

    The
      words
      and phrases defined in this Article shall have the meaning set out in these
      definitions throughout this Plan, unless the context in which any such word
      or
      phrase appears reasonably requires a broader, narrower, or different
      meaning.

    

    2.1
       “Affiliate”
      means any subsidiary corporation. The term “subsidiary corporation” means any
      corporation (other than the Company) in an unbroken chain of corporations
      beginning with the Company if, at the time of the action or transaction, each
      of
      the corporations other than the last corporation in the unbroken chain owns
      stock possessing 50% or more of the total combined voting power of all classes
      of stock in one of the other corporations in the chain.

    

    2.2
       “Award”
      means each of the following granted under this Plan: Incentive Option,
      Nonqualified Option, Stock Appreciation Right, or Restricted Stock
      Award.

    

    2.3
       “Board
      of
      Directors” means the board of directors of the Company. 

    

    2.4
       “Code”
      means the Internal Revenue Code of 1986, as amended. 

    

    2.5
       “Committee”
      means the Compensation Committee of the Board of Directors or such other
      committee designated by the Board of Directors or the entire Board of Directors.
      It is intended that the Committee shall be comprised solely of at least two
      members who are both Non-Employee Directors and Outside Directors; provided,
      however, that until such time as two such Directors are available to serve
      in
      such roles, the failure to meet this requirement shall not affect the validity
      of any grants under this Plan.

    

    2.6
       “Company”
      means eLinear, Inc., a Delaware corporation.

    

    2.7
       “Consultant”
      means any person, including an advisor, engaged by the Company or Affiliate
      to
      render services and who is compensated for such services.

    

    2.8
       “Non-Employee
      Director” means that term as defined in Rule 16b-3 under the 1934 Act.

    

    2.9
       “Eligible
      Persons” shall mean, with respect to the Plan, those persons who, at the time
      that an Award is granted, are (i) Employees and all other key personnel,
      including officers and directors, of the Company or Affiliate, or (ii)
      Consultants or independent contractors who provide valuable services to the
      Company or Affiliate as determined by the Committee.

    

    2.10
       “Employee”
      means a person employed by the Company or any Affiliate to whom an Award is
      granted.

    

    2.11
       “Fair
      Market Value” of the Stock as of any date means (a) the average of the high and
      low sale prices of the Stock on that date on the principal securities exchange
      on which the Stock is listed; or (b) if the Stock is not listed on a securities
      exchange, the average of the high and low sale prices of the Stock on that
      date
      as reported on the NASDAQ; or (c) if the Stock is not listed on the NASDAQ,
      the
      average of the high and low bid quotations for the Stock on that date as
      reported by the National Quotation Bureau Incorporated; or (d) if none of the
      foregoing is applicable, an amount at the election of the Committee equal to
      (x), the average between the closing bid and ask prices per share of Stock
      on
      the last preceding date on which those prices were reported or (y) that amount
      as determined by the Committee in good faith.

    

    2.12
       “Incentive
      Option” means an option to purchase Stock granted under this Plan which is
      designated as an “Incentive Option” and satisfies the requirements of Section
      422 of the Code.

    

    2.13
       “Nonqualified
      Option” means an option to purchase Stock granted under this Plan other than an
      Incentive Option.

    

    2.14
       “Option”
      means both an Incentive Option and a Nonqualified Option granted under this
      Plan
      to purchase shares of Stock.

    

    2.15
       “Option
      Agreement” means the written agreement by and between the Company and an
      Eligible Person, which sets out the terms of an Option.

    

    2.16
       “Outside
      Director” shall mean a member of the Board of Directors serving on the Committee
      who satisfies Section 162(m) of the Code. 

    

    2.17
       “Plan”
      means the eLinear, Inc. 2005 Stock Option Plan, as set out in this document
      and
      as it may be amended from time to time.

    

    2.18
       “Plan
      Year” means the Company’s fiscal year. 

    

    2.19
       “Restricted
      Stock” means Stock awarded or purchased under a Restricted Stock Agreement
      entered into pursuant to this Plan, together with (i) all rights, warranties
      or
      similar items attached or accruing thereto or represented by the certificate
      representing the stock and (ii) any stock or securities into which or for which
      the stock is thereafter converted or exchanged. The terms and conditions of
      the
      Restricted Stock Agreement shall be determined by the Committee consistent
      with
      the terms of the Plan. 

    

    2.20
       “Restricted
      Stock Agreement” means an agreement between the Company or any Affiliate and the
      Eligible Person pursuant to which the Eligible Person receives a Restricted
      Stock Award subject to this Plan.

    

    2.21
       “Restricted
      Stock Award” means an Award of Restricted Stock. 

    

    2.22
       “Restricted
      Stock Purchase Price” means the purchase price, if any, per share of Restricted
      Stock subject to an Award. The Committee shall determine the Restricted Stock
      Purchase Price. It may be greater than or less than the Fair Market Value of
      the
      Stock on the date of the Stock Award. 

    

    2.23
       “Stock”
      means the common stock of the Company or, in the event that the outstanding
      shares of common stock are later changed into or exchanged for a different
      class
      of stock or securities of the Company or another corporation, that other stock
      or security.

    

    2.24
       “Stock
      Appreciation Right” and “SAR” means the right to receive the difference between
      the Fair Market Value of a share of Stock on the grant date and the Fair Market
      Value of the share of Stock on the exercise date. 

    

    2.25
       “10%
      Stockholder” means an individual who, at the time the Option is granted, owns
      Stock possessing more than 10% of the total combined voting power of all classes
      of stock of the Company or of any Affiliate. An individual shall be considered
      as owning the Stock owned, directly or indirectly, by or for his brothers and
      sisters (whether by the whole or half blood), spouse, ancestors, and lineal
      descendants; and Stock owned, directly or indirectly, by or for a corporation,
      partnership, estate, or trust, shall be considered as being owned
      proportionately by or for its stockholders, partners, or
      beneficiaries.

     

    ARTICLE
      III - ELIGIBILITY

    

    The
      individuals who shall be eligible to receive Awards shall be those Eligible
      Persons of the Company or any of its Affiliates as the Committee shall determine
      from time to time. The Board of Directors may designate one or more individuals
      who shall not be eligible to receive any Award under this Plan or under other
      similar plans of the Company.

     

    ARTICLE
      IV - GENERAL PROVISIONS RELATING TO AWARDS

    

    4.1
       Authority
      to Grant Awards.
      The
      Committee may grant to those Eligible Persons of the Company or any of its
      Affiliates, as it shall from time to time determine, Awards under the terms
      and
      conditions of this Plan. The Committee shall determine subject only to any
      applicable limitations set out in this Plan, the number of shares of Stock
      to be
      covered by any Award to be granted to an Eligible Person.

    

    4.2
       Dedicated
      Shares.
      The
      total number of shares of Stock with respect to which Awards may be granted
      under the Plan shall be 4,000,000 shares. The shares may be treasury shares
      or
      authorized but unissued shares. The number of shares stated in this Section
      4.2
      shall be subject to adjustment in accordance with the provisions of Section
      4.5.
      In the event that any outstanding Award shall expire or terminate for any reason
      or any Award is surrendered, the shares of Stock allocable to the unexercised
      portion of that Award may again be subject to an Award under the
      Plan.

    

    4.3
       Non-transferability.
      Awards
      shall not be transferable by the Eligible Person otherwise than by will or
      under
      the laws of descent and distribution, and shall be exercisable, during the
      Eligible Person’s lifetime, only by him. Restricted Stock shall be purchased by
      and/or become vested under a Restricted Stock Agreement during the Eligible
      Person’s lifetime, only by him. Any attempt to transfer an Award other than
      under the terms of the Plan and the Agreement shall terminate the Award and
      all
      rights of the Eligible Person to that Award. 

    

    4.4
       Requirements
      of Law.
      The
      Company shall not be required to sell or issue any Stock under any Award if
      issuing that Stock would constitute or result in a violation by the Eligible
      Person or the Company of any provision of any law, statute, or regulation of
      any
      governmental authority. Specifically, in connection with any applicable statute
      or regulation relating to the registration of securities, upon exercise of
      any
      Option or pursuant to any Award, the Company shall not be required to issue
      any
      Stock unless the Committee has received evidence satisfactory to it to the
      effect that the holder of that Option or Award will not transfer the Stock
      except in accordance with applicable law, including receipt of an opinion of
      counsel satisfactory to the Company to the effect that any proposed transfer
      complies with applicable law. The determination by the Committee on this matter
      shall be final, binding, and conclusive. The Company may, but shall in no event
      be obligated to, register any Stock covered by this Plan pursuant to applicable
      securities laws of any country or any political subdivision. In the event the
      Stock issuable on exercise of an Option or pursuant to an Award is not
      registered, the Company may imprint on the certificate evidencing the Stock
      any
      legend that counsel for the Company considers necessary or advisable to comply
      with applicable law. The Company shall not be obligated to take any other
      affirmative action in order to cause the exercise of an Option or vesting under
      an Award, or the issuance of shares pursuant thereto, to comply with any law
      or
      regulation of any governmental authority.

    

    4.5
       Changes
      in the Company’s Capital Structure. 

    

    (a)
       The
      existence of outstanding Options or Awards shall not affect in any way the
      right
      or power of the Company or its stockholders to make or authorize any or all
      adjustments, recapitalizations, reorganizations or other changes in the
      Company’s capital structure or its business, or any merger or consolidation of
      the Company, or any issue of bonds, debentures, preferred or prior preference
      stock ahead of or affecting the Stock or its rights, or the dissolution or
      liquidation of the Company, or any sale or transfer of all or any part of its
      assets or business, or any other corporate act or proceeding, whether of a
      similar character or otherwise. If the Company shall effect a subdivision or
      consolidation of shares or other capital readjustment, the payment of a Stock
      dividend, or other increase or reduction of the number of shares of the Stock
      outstanding, without receiving compensation for it in money, services or
      property, then (a) the number, class, and per share price of shares of Stock
      subject to outstanding Options under this Plan shall be appropriately adjusted
      in such a manner as to entitle an Eligible Person to receive upon exercise
      of an
      Option, for the same aggregate cash consideration, the equivalent total number
      and class of shares he would have received had he exercised his Option in full
      immediately prior to the event requiring the adjustment; and (b) the number
      and
      class of shares of Stock then reserved to be issued under the Plan shall be
      adjusted by substituting for the total number and class of shares of Stock
      then
      reserved, that number and class of shares of Stock that would have been received
      by the owner of an equal number of outstanding shares of each class of Stock
      as
      the result of the event requiring the adjustment.

    

    (b)
       If
      the
      Company is merged or consolidated with another corporation and the Company
      is
      not the surviving corporation, or if the Company is liquidated or sells or
      otherwise disposes of substantially all its assets while unexercised Options
      remain outstanding under this Plan (each of the foregoing referred to as a
      “Corporate Transaction”):

    

    (i) Subject
      to the provisions of clause (ii) below, in the event of such a Corporate
      Transaction, any unexercised Options shall automatically accelerate so that
      they
      shall, immediately prior to the specified effective date for the Corporate
      Transaction become 100% vested and exercisable; provided, however, that any
      unexercised Options shall not accelerate, as described above, if and to the
      extent such Option is, in connection with the Corporate Transaction, either
      to
      be assumed by the successor corporation or parent thereof (the “Successor
      Corporation”) or to be replaced with a comparable award for the purchase of
      shares of the capital stock of the Successor Corporation. Whether or not any
      unexercised Option is assumed or replaced shall be determined by the Company
      and
      the Successor Corporation in connection with the Corporate Transaction. The
      Board of Directors shall make the determination of what constitutes a comparable
      award to the unexercised Option, and its determination shall be conclusive
      and
      binding. The unexercised Option shall terminate and cease to remain outstanding
      immediately following the consummation of the Corporate Transaction, except
      to
      the extent assumed by the Successor Corporation.

    

    (ii)
       All
      outstanding Options may be canceled by the Board of Directors as of the
      effective date of any Corporate Transaction, if (i) notice of cancellation
      shall
      be given to each holder of an Option and (ii) each holder of an Option shall
      have the right to exercise that Option in full (without regard to any
      limitations set out in or imposed under this Plan or the Option Agreement
      granting that Option) during a period set by the Board of Directors preceding
      the effective date of the Corporate Transaction and, if in the event all
      outstanding Options may not be exercised in full under applicable securities
      laws without registration of the shares of Stock issuable on exercise of the
      Options, the Board of Directors may limit the exercise of the Options to the
      number of shares of Stock, if any, as may be issued without registration. The
      method of choosing which Options may be exercised, and the number of shares
      of
      Stock for which Options may be exercised, shall be solely within the discretion
      of the Board of Directors.

    

    (c)
       In
      each
      situation described in this Section 4.5, the Committee will make similar
      adjustments, as appropriate, in outstanding Stock Appreciation
      Rights.

    

    (d)
       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 either upon direct sale or upon the exercise of rights or
      warrants to subscribe for them, or upon conversion of shares or obligations
      of
      the Company convertible into shares or other securities, shall not affect,
      and
      no adjustment by reason of such issuance shall be made with respect to, the
      number, class, or price of shares of Stock then subject to outstanding Awards.
      

    

    4.6  Election
      under Section 83(b) of the Code.
      No
      Eligible Person shall exercise the election permitted under Section 83(b) of
      the
      Code without written approval of the Committee. Any Eligible Person doing so
      shall forfeit all Awards issued to him under this Plan.

     

    ARTICLE
      V - OPTIONS AND STOCK APPRECIATION RIGHTS

    

    5.1
       Type
      of Option.
      The
      Committee shall specify at the time of grant whether a given Option shall
      constitute an Incentive Option or a Nonqualified Option. Incentive Stock Options
      may only be granted to Employees.

    

    5.2
       Option
      Price.
      The
      price at which Stock may be purchased under an Incentive Option shall not be
      less than the greater of: (a) 100% of the Fair Market Value of the shares of
      Stock on the date the Option is granted or (b) the aggregate par value of the
      shares of Stock on the date the Option is granted. The Committee in its
      discretion may provide that the price at which shares of Stock may be purchased
      under an Incentive Option shall be more than 100% of Fair Market Value. In
      the
      case of any 10% Stockholder, the price at which shares of Stock may be purchased
      under an Incentive Option shall not be less than 110% of the Fair Market Value
      of the Stock on the date the Incentive Option is granted. The price at which
      shares of Stock may be purchased under a Nonqualified Option shall be such
      price
      as shall be determined by the Committee in its sole discretion but in no event
      lower than the par value of the shares of Stock on the date the Option is
      granted.

    

    5.3
       Duration
      of Options and SARS.
      No
      Option or SAR shall be exercisable after the expiration of ten (10) years from
      the date the Option or SAR is granted. In the case of a 10% Stockholder, no
      Incentive Option shall be exercisable after the expiration of five (5) years
      from the date the Incentive Option is granted.

    

    5.4
       Amount
      Exercisable -- Incentive Options.
      Each
      Option may be exercised from time to time, in whole or in part, in the manner
      and subject to the conditions the Committee, in its sole discretion, may provide
      in the Option Agreement, as long as the Option is valid and outstanding. To
      the
      extent that the aggregate Fair Market Value (determined as of the time an
      Incentive Option is granted) of the Stock with respect to which Incentive
      Options first become exercisable by the optionee during any calendar year (under
      this Plan and any other incentive stock option plan(s) of the Company or any
      Affiliate) exceeds $100,000, the portion in excess of $100,000 of the Incentive
      Option shall be treated as a Nonqualified Option. In making this determination,
      Incentive Options shall be taken into account in the order in which they were
      granted. 

    

    5.5
       Exercise
      of Options.
      Each
      Option shall be exercised by the delivery of written notice to the Committee
      setting forth the number of shares of Stock with respect to which the Option
      is
      to be exercised, together with: 

    

    (a)
       cash,
      certified check, bank draft, or postal or express money order payable to the
      order of the Company for an amount equal to the option price of the
      shares;

    

    (b)
       stock
      at
      its Fair Market Value on the date of exercise (if approved in advance in writing
      by the Committee);

    

    (c)
       an
      election to make a cashless exercise through a registered broker-dealer (if
      approved in advance in writing by the Committee);

    

    (d) an
      election to have shares of Stock, which otherwise would be issued on exercise,
      withheld in payment of the exercise price (if approved in advance in writing
      by
      the Committee); and/or 

    

    (e)
       any
      other
      form of payment which is acceptable to the Committee. 

    

    As
      promptly as practicable after receipt of written notification and payment,
      the
      Company shall deliver to the Eligible Person certificates for the number of
      shares with respect to which the Option has been exercised, issued in the
      Eligible Person’s name. If shares of Stock are used in payment, the aggregate
      Fair Market Value of the shares of Stock tendered must be equal to or less
      than
      the aggregate exercise price of the shares being purchased upon exercise of
      the
      Option, and any difference must be paid by cash, certified check, bank draft,
      or
      postal or express money order payable to the order of the Company. Delivery
      of
      the shares shall be deemed effected for all purposes when a stock transfer
      agent
      of the Company shall have deposited the certificates in the United States mail,
      addressed to the Eligible Person, at the address specified by the Eligible
      Person. 

    

    Whenever
      an Option is exercised by exchanging shares of Stock owned by the Eligible
      Person, the Eligible Person shall deliver to the Company certificates registered
      in the name of the Eligible Person representing a number of shares of Stock
      legally and beneficially owned by the Eligible Person, free of all liens,
      claims, and encumbrances of every kind, accompanied by stock powers duly
      endorsed in blank by the record holder of the shares represented by the
      certificates (with signature guaranteed by a commercial bank or trust company
      or
      by a brokerage firm having a membership on a registered national stock
      exchange). The delivery of certificates upon the exercise of Options is subject
      to the condition that the person exercising the Option provides the Company
      with
      the information the Company might reasonably request pertaining to exercise,
      sale or other disposition. 

    

    5.6
       Stock
      Appreciation Rights.
      All
      Eligible Persons shall be eligible to receive Stock Appreciation Rights. The
      Committee shall determine the SAR to be awarded from time to time to any
      Eligible Person. The grant of a SAR to be awarded from time to time shall
      neither entitle such person to, nor disqualify such person from, participation
      in any other grant of awards by the Company, whether under this Plan or any
      other plan of the Company. If granted as a stand-alone SAR Award, the terms
      of
      the Award shall be provided in a Stock Appreciation Rights Agreement.

    

    5.7
       Stock
      Appreciation Rights in Tandem with Options.
      Stock
      Appreciation Rights may, at the discretion of the Committee, be included in
      each
      Option granted under the Plan to permit the holder of an Option to surrender
      that Option, or a portion of the part which is then exercisable, and receive
      in
      exchange, upon the conditions and limitations set by the Committee, an amount
      equal to the excess of the Fair Market Value of the Stock covered by the Option,
      or the portion of it that was surrendered, determined as of the date of
      surrender, over the aggregate exercise price of the Stock. In the event of
      the
      surrender of an Option, or a portion of it, to exercise the Stock Appreciation
      Rights, the shares represented by the Option or that part of it which is
      surrendered, shall not be available for reissuance under the Plan. Each Stock
      Appreciation Right issued in tandem with an Option (a) will expire not later
      than the expiration of the underlying Option, (b) may be for no more than 100%
      of the difference between the exercise price of the underlying Option and the
      Fair Market Value of a share of Stock at the time the Stock Appreciation Right
      is exercised, (c) is transferable only when the underlying Option is
      transferable, and under the same conditions, and (d) may be exercised only
      when
      the underlying Option is eligible to be exercised. 

    

    5.8
       Conditions
      of Stock Appreciation Rights.
      All
      Stock Appreciation Rights shall be subject to such terms, conditions,
      restrictions or limitations as the Committee deems appropriate, including by
      way
      of illustration but not by way of limitation, restrictions on transferability,
      requirement of continued employment, individual performance, financial
      performance of the Company, or payment of any applicable employment or
      withholding taxes.

    

    5.9
       Payment
      of Stock Appreciation Rights.
      The
      amount of payment to which the Eligible Person who reserves an SAR shall be
      entitled upon the exercise of each SAR shall be equal to the amount, if any
      by
      which the Fair Market Value of the specified shares of Stock on the exercise
      date exceeds the Fair Market Value of the specified shares of Stock on the
      date
      of grant of the SAR. The SAR shall be paid in either cash or Stock, as
      determined in the discretion of the Committee as set forth in the SAR agreement.
      If the payment is in Stock, the number of shares to be paid shall be determined
      by dividing the amount of such payment by the Fair Market Value of Stock on
      the
      exercise date of such SAR.

    

    5.10
       Exercise
      on Termination of Employment.
      Unless
      it is expressly provided otherwise in the Option or SAR agreement, Options
      and
      SAR’s granted to Employees shall terminate three months after severance of
      employment of the Employee from the Company and all Affiliates for any reason,
      with or without cause, other than death, retirement under the then established
      rules of the Company, or severance for disability. The Committee shall determine
      whether authorized leave of absence or absence on military or government service
      shall constitute severance of the employment of the Employee at that time.
      

    

    5.11
       Death.
      If,
      before the expiration of an Option or SAR, the Eligible Person, whether in
      the
      employ of the Company or after he has retired or was severed for disability,
      or
      otherwise dies, the Option or SAR shall continue until the earlier of the
      Option’s or SAR’s expiration date or one year following the date of his death,
      unless it is expressly provided otherwise in the Option or SAR agreement. After
      the death of the Eligible Person, his executors, administrators, or any persons
      to whom his Option or SAR may be transferred by will or by the laws of descent
      and distribution shall have the right, at any time prior to the Option’s or
      SAR’s expiration or termination, whichever is earlier, to exercise it, to the
      extent to which he was entitled to exercise it immediately prior to his death,
      unless it is expressly provided otherwise in the Option or SAR’s
      agreement.

    

    5.12
       Retirement.
      Unless
      it is expressly provided otherwise in the Option or SAR Agreement, before the
      expiration of an Option or SAR, the Employee shall be retired in good standing
      from the employ of the Company under the then established rules of the Company,
      the Option or SAR shall continue until the earlier of the Option’s or SAR’s
      expiration date or six months following the date of his retirement, unless
      it is
      expressly provided otherwise in the Option or SAR agreement.

    

    5.13
       Disability.
      If,
      before the expiration of an Option or SAR, the Employee shall be severed from
      the employ of the Company for disability, the Option or SAR shall terminate
      on
      the earlier of the Option’s or SAR’s expiration date or one year after the date
      he was severed because of disability, unless it is expressly provided otherwise
      in the Option or SAR agreement.

    

    5.14
       Substitution
      Options.
      Options
      may be granted under this Plan from time to time in substitution for stock
      options held by employees of other corporations who are about to become
      employees of or affiliated with the Company or any Affiliate as the result
      of a
      merger or consolidation of the employing corporation with the Company or any
      Affiliate, or the acquisition by the Company or any Affiliate of the assets
      of
      the employing corporation, or the acquisition by the Company or any Affiliate
      of
      stock of the employing corporation as the result of which it becomes an
      Affiliate of the Company. The terms and conditions of the substitute Options
      granted may vary from the terms and conditions set out in this Plan to the
      extent the Committee, at the time of grant, may deem appropriate to conform,
      in
      whole or in part, to the provisions of the stock options in substitution for
      which they are granted. 

    

    5.15
       No
      Rights as Stockholder.
      No
      Eligible Person shall have any rights as a stockholder with respect to Stock
      covered by his Option until the date a stock certificate is issued for the
      Stock.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      VI - AWARDS

    

    6.1
       Restricted
      Stock Awards.
      The
      Committee may issue shares of Stock to an Eligible Person subject to the terms
      of a Restricted Stock Agreement. The Restricted Stock may be issued for no
      payment by the Eligible Person or for a payment below the Fair Market Value
      on
      the date of grant. Restricted Stock shall be subject to restrictions as to
      sale,
      transfer, alienation, pledge or other encumbrance and generally will be subject
      to vesting over a period of time specified in the Restricted Stock Agreement.
      The Committee shall determine the period of vesting, the number of shares,
      the
      price, if any, of Stock included in a Restricted Stock Award, and the other
      terms and provisions which are included in a Restricted Stock
      Agreement.

    

    6.2
       Restrictions.
      Restricted Stock shall be subject to the terms and conditions as determined
      by
      the Committee, including without limitation, any or all of the
      following:

    

    (a)
       a
      prohibition against the sale, transfer, alienation, pledge, or other encumbrance
      of the shares of Restricted Stock, such prohibition to lapse (i) at such time
      or
      times as the Committee shall determine (whether in annual or more frequent
      installments, at the time of the death, disability, or retirement of the holder
      of such shares, or otherwise);

    

    (b)
       a
      requirement that the holder of shares of Restricted Stock forfeit, or in the
      case of shares sold to an Eligible Person, resell back to the Company at his
      cost, all or a part of such shares in the event of termination of the Eligible
      Person’s employment during any period in which the shares remain subject to
      restrictions;

    

    (c)
       a
      prohibition against employment of the holder of Restricted Stock by any
      competitor of the Company or its Affiliates, or against such holder’s
      dissemination of any secret or confidential information belonging to the Company
      or an Affiliate;

    

    (d)
       unless
      stated otherwise in the Restricted Stock Agreement, (i) if restrictions remain
      at the time of severance of employment with the Company and all Affiliates,
      other than for reason of disability or death, the Restricted Stock shall be
      forfeited; and (ii) if severance of employment is by reason of disability or
      death, the restrictions on the shares shall lapse and the Eligible Person or
      his
      heirs or estate shall be 100% vested in the shares subject to the Restricted
      Stock Agreement.

     

    6.3
       Stock
      Certificate.
      Shares
      of Restricted Stock shall be registered in the name of the Eligible Person
      receiving the Restricted Stock Award and deposited, together with a stock power
      endorsed in blank, with the Company. Each such certificate shall bear a legend
      in substantially the following form: 

    

    1.6  “The
      transferability of this certificate and the shares of Stock represented by
      it is
      restricted by and subject to the terms and conditions (including conditions
      of
      forfeiture) contained in the eLinear, Inc., 2005 Stock Option Plan, and an
      agreement entered into between the registered owner and the Company. A copy
      of
      the Plan and agreement is on file in the office of the Secretary of the
      Company.”

    

    6.4
       Rights
      as Stockholder.
      Subject
      to the terms and conditions of the Plan and unless otherwise provided in the
      Restricted Stock Award agreement, each Eligible Person receiving a certificate
      for Restricted Stock shall have all the rights of a stockholder with respect
      to
      the shares of Stock included in the Restricted Stock Award during any period
      in
      which such shares are subject to forfeiture and restrictions on transfer,
      including without limitation, the right to vote such shares. Dividends paid
      with
      respect to shares of Restricted Stock in cash or property other than Stock
      in
      the Company or rights to acquire stock in the Company shall be paid to the
      Eligible Person currently. Dividends paid in Stock in the Company or rights
      to
      acquire Stock in the Company shall be added to and become a part of the
      Restricted Stock.

    

    6.5
       Lapse
      of Restrictions.
      At the
      end of the time period during which any shares of Restricted Stock are subject
      to forfeiture and restrictions on sale, transfer, alienation, pledge, or other
      encumbrance, such shares shall vest and will be delivered in a certificate,
      free
      of all restrictions, to the Eligible Person or to the Eligible Person’s legal
      representative, beneficiary or heir; provided the certificate shall bear such
      legend, if any, as the Committee determines is reasonably required by applicable
      law. By accepting a Stock Award and executing a Restricted Stock Agreement,
      the
      Eligible Person agrees to remit when due any federal and state income and
      employment taxes required to be withheld. 

    

    6.6 Restriction
      Period.
      No
      Restricted Stock Award may provide for restrictions continuing beyond ten (10)
      years from the date of grant. 

     

    ARTICLE
      VII - ADMINISTRATION

    

    The
      Committee shall administer the Plan. All questions of interpretation and
      application of the Plan and Awards shall be subject to the determination of
      the
      Committee. A majority of the members of the Committee shall constitute a quorum.
      All determinations of the Committee shall be made by a majority of its members.
      Any decision or determination reduced to writing and signed by a majority of
      the
      members shall be as effective as if it had been made by a majority vote at
      a
      meeting properly called and held. This Plan shall be administered in such a
      manner as to permit the Options, which are designated to be Incentive Options,
      to qualify as Incentive Options. In carrying out its authority under this Plan,
      the Committee shall have full and final authority and discretion, including
      but
      not limited to the following rights, powers and authorities, to:

    

    (a)
       determine
      the Eligible Persons to whom and the time or times at which Options or Awards
      will be made;

    

    (b)
       determine
      the number of shares and the purchase price of Stock covered in each Option
      or
      Award, subject to the terms of the Plan;

    

    (c)
       determine
      the terms, provisions, and conditions of each Option and Award, which need
      not
      be identical;

    

    (d)
       accelerate
      the time at which any outstanding Option or SAR may be exercised, or Restricted
      Stock Award will vest;

    

    (e)
       define
      the effect, if any, on an Option or Award of the death, disability, retirement,
      or termination of employment of the Employee;

    

    (f)
       prescribe,
      amend and rescind rules and regulations relating to administration of the Plan;
      and

    

    (g)
       make
      all
      other determinations and take all other actions deemed necessary, appropriate,
      or advisable for the proper administration of this Plan.

    

    The
      actions of the Committee in exercising all of the rights, powers, and
      authorities set out in this Article and all other Articles of this Plan, when
      performed in good faith and in its sole judgment, shall be final, conclusive
      and
      binding on all parties.

    

    ARTICLE
      VIII - AMENDMENT OR TERMINATION OF PLAN

    

    The
      Board
      of Directors of the Company may amend, terminate or suspend this Plan at any
      time, in its sole and absolute discretion; provided, however, that to the extent
      required to qualify this Plan under Rule 16b-3 promulgated under Section 16
      of
      the Securities Exchange Act of 1934, as amended, no amendment that would (a)
      materially increase the number of shares of Stock that may be issued under
      this
      Plan, (b) materially modify the requirements as to eligibility for participation
      in this Plan, or (c) otherwise materially increase the benefits accruing to
      participants under this Plan, shall be made without the approval of the
      Company’s stockholders; provided further, however, that to the extent required
      to maintain the status of any Incentive Option under the Code, no amendment
      that
      would (a) change the aggregate number of shares of Stock which may be issued
      under Incentive Options, (b) change the class of employees eligible to receive
      Incentive Options, or (c) decrease the Option price for Incentive Options below
      the Fair Market Value of the Stock at the time it is granted, shall be made
      without the approval of the Company’s stockholders. Subject to the preceding
      sentence, the Board of Directors shall have the power to make any changes in
      the
      Plan and in the regulations and administrative provisions under it or in any
      outstanding Incentive Option as in the opinion of counsel for the Company may
      be
      necessary or appropriate from time to time to enable any Incentive Option
      granted under this Plan to continue to qualify as an incentive stock option
      or
      such other stock option as may be defined under the Code so as to receive
      preferential federal income tax treatment.

    

    ARTICLE
      IX - MISCELLANEOUS

    

    9.1
       No
      Establishment of a Trust Fund.
      No
      property shall be set aside nor shall a trust fund of any kind be established
      to
      secure the rights of any Eligible Person under this Plan. All Eligible Persons
      shall at all times rely solely upon the general credit of the Company for the
      payment of any benefit which becomes payable under this Plan.

    

    9.2
       No
      Employment Obligation.
      The
      granting of any Option or Award shall not constitute an employment contract,
      express or implied, nor impose upon the Company or any Affiliate any obligation
      to employ or continue to employ any Eligible Person. The right of the Company
      or
      any Affiliate to terminate the employment of any person shall not be diminished
      or affected by reason of the fact that an Option or Award has been granted
      to
      him.

    

    9.3
       Forfeiture.
      Notwithstanding any other provisions of this Plan, if the Committee finds by
      a
      majority vote after full consideration of the facts that an Eligible Person,
      before or after termination of his employment with the Company or an Affiliate
      for any reason (a) committed or engaged in fraud, embezzlement, theft,
      commission of a felony, or proven dishonesty in the course of his employment
      by
      the Company or an Affiliate, which conduct damaged the Company or Affiliate,
      or
      disclosed trade secrets of the Company or an Affiliate, or (b) participated,
      engaged in or had a material, financial, or other interest, whether as an
      employee, officer, director, consultant, contractor, stockholder, owner, or
      otherwise, in any commercial endeavor in the United States which is competitive
      with the business of the Company or an Affiliate without the written consent
      of
      the Company or Affiliate, the Eligible Person shall forfeit all outstanding
      Options and all outstanding Awards, and including all exercised Options and
      other situations pursuant to which the Company has not yet delivered a stock
      certificate. Clause (b) shall not be deemed to have been violated solely by
      reason of the Eligible Person’s ownership of stock or securities of any publicly
      owned corporation, if that ownership does not result in effective control of
      the
      corporation.

    

    The
      decision of the Committee as to the cause of an Employee’s discharge, the damage
      done to the Company or an Affiliate, and the extent of an Eligible Person’s
      competitive activity shall be final. No decision of the Committee, however,
      shall affect the finality of the discharge of the Employee by the Company or
      an
      Affiliate in any manner.

    

    9.4
       Tax
      Withholding.
      The
      Company or any Affiliate shall be entitled to deduct from other compensation
      payable to each Eligible Person any sums required by federal, state, or local
      tax law to be withheld with respect to the grant or exercise of an Option or
      SAR, or lapse of restrictions on Restricted Stock. In the alternative, the
      Company may require the Eligible Person (or other person exercising the Option,
      SAR or receiving the Stock) to pay the sum directly to the employer corporation.
      If the Eligible Person (or other person exercising the Option or SAR or
      receiving the Stock) is required to pay the sum directly, payment in cash or
      by
      check of such sums for taxes shall be delivered within 10 days after the date
      of
      exercise or lapse of restrictions. The Company shall have no obligation upon
      exercise of any Option or lapse of restrictions on Stock until payment has
      been
      received, unless withholding (or offset against a cash payment) as of or prior
      to the date of exercise or lapse of restrictions is sufficient to cover all
      sums
      due with respect to that exercise. The Company and its Affiliates shall not
      be
      obligated to advise an Eligible Person of the existence of the tax or the amount
      which the employer corporation will be required to withhold.

    

    9.5
       Written
      Agreement. 
      Each
      Option and Award shall be embodied in a written agreement which shall be subject
      to the terms and conditions of this Plan and shall be signed by the Eligible
      Person and by a member of the Committee on behalf of the Committee and the
      Company or an executive officer of the Company, other than the Eligible Person,
      on behalf of the Company. The agreement may contain any other provisions that
      the Committee in its discretion shall deem advisable which are not inconsistent
      with the terms of this Plan.

    

    9.6
       Indemnification
      of the Committee and the Board of Directors.
      With
      respect to administration of this Plan, the Company shall indemnify each present
      and future member of the Committee and the Board of Directors against, and
      each
      member of the Committee and the Board of Directors shall be entitled without
      further act on his part to indemnity from the Company for, all expenses
      (including attorney’s fees, the amount of judgments, and the amount of approved
      settlements made with a view to the curtailment of costs of litigation, other
      than amounts paid to the Company itself) reasonably incurred by him in
      connection with or arising out of any action, suit, or proceeding in which
      he
      may be involved by reason of his being or having been a member of the Committee
      and/or the Board of Directors, whether or not he continues to be a member of
      the
      Committee and/or the Board of Directors at the time of incurring the expenses,
      including, without limitation, matters as to which he shall be finally adjudged
      in any action, suit or proceeding to have been found to have been negligent
      in
      the performance of his duty as a member of the Committee or the Board of
      Directors. However, this indemnity shall not include any expenses incurred
      by
      any member of the Committee and/or the Board of Directors in respect of matters
      as to which he shall be finally adjudged in any action, suit or proceeding
      to
      have been guilty of gross negligence or willful misconduct in the performance
      of
      his duty as a member of the Committee and the Board of Directors. This right
      of
      indemnification shall inure to the benefit of the heirs, executors or
      administrators of each member of the Committee and the Board of Directors and
      shall be in addition to all other rights to which a member of the Committee
      and
      the Board of Directors may be entitled as a matter of law, contract, or
      otherwise.

    

    9.7
       Gender.
      If the
      context requires, words of one gender when used in this Plan shall include
      the
      others and words used in the singular or plural shall include the
      other.

    

    9.8
       Headings.
      Headings of Articles and Sections are included for convenience of reference
      only
      and do not constitute part of the Plan and shall not be used in construing
      the
      terms of the Plan.

    

    9.9
       Other
      Compensation Plans.
      The
      adoption of this Plan shall not affect any other stock option, incentive or
      other compensation or benefit plans in effect for the Company or any Affiliate,
      nor shall the Plan preclude the Company from establishing any other forms of
      incentive or other compensation for employees of the Company or any
      Affiliate.

    

    9.10
       Other
      Options or Awards.
      The
      grant of an Option or Award shall not confer upon the Eligible Person the right
      to receive any future or other Options or Awards under this Plan, whether or
      not
      Options or Awards may be granted to similarly situated Eligible Persons, or
      the
      right to receive future Options or Awards upon the same terms or conditions
      as
      previously granted.

    

    9.11
       Governing
      Law.
      The
      provisions of this Plan shall be construed, administered, and governed under
      the
      laws of the State of Delaware.

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