Document:

exv10w3

 

Exhibit 10.3

FIRST AMENDMENT TO THE CYPRESS COMMUNICATIONS

HOLDING CO., INC. KEY EXECUTIVE OFFICER RETENTION PLAN

     THIS FIRST AMENDMENT TO THE CYPRESS COMMUNICATIONS HOLDING CO., INC. KEY EXECUTIVE OFFICER
RETENTION PLAN (the “Plan”) is made on the 4th day of November, 2004, by Cypress Communications
Holding Co., Inc. (the “Company”).

W I T N E S S E T H:

     WHEREAS, the Company adopted the Plan as of August 16, 2004 to reinforce and encourage the
continued attention and dedication of Covered Employees (as defined in the Plan) to their assigned
duties without distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control (as defined in the Plan);

     WHEREAS, Section 12 of the Plan permits the Company to amend it; provided, however, that no
such amendment may, without the consent of the affected Covered Employee, in any material adverse
way affect the rights of such Covered Employee; and

     WHEREAS, the Company now desires to amend the Plan as set forth herein, which amendment will
not in any material adverse way affect the rights of any Covered Employee.

     NOW, THEREFORE, the Plan is hereby amended as follows:

1.

     The Plan is hereby amended by deleting “$250,000” as the Section 4(a) Benefit of Gregory P.
McGraw in Appendix A and inserting in lieu thereof “$375,000.”

2.

     Except as specifically amended hereby, the Plan shall remain in full force and effect as prior
to this First Amendment.

Adopted: As of November 4, 2004<PAGE>
                                                                    EXHIBIT 4.1

                                 [EMAGEON LOGO]
                                  EMAGEON INC.

  NUMBER                                                     SHARES
COMMON STOCK                                            CUSIP 29076V 10 9
PAR VALUE $.001                              SEE REVERSE FOR CERTAIN DEFINITIONS

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NONASSESSBLE SHARES OF THE COMMON STOCK, $.001 PAR VALUE PER
SHARE, OF

=================================EMAGEON INC.==================================

         transferable on the books of the Company by the holder hereof in person
or by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are issued and
shall be subject to all of the provisions of the Certificate of Incorporation of
the Company and all amendments thereto, and to the By-laws of the Company, to
all of which the holder hereof by acceptance of this certificate hereby assents.
This certificate is not valid until countersigned and registered by the Transfer
Agent and Registrar.
         WITNESS the facsimile seal of the Company and the facsimile signatures
of its duly authorized officers.

Dated:

     /S/Craig A. Parker                                 /S/Milton Silva-Craig

         SECRETARY                                             PRESIDENT

                    EMAGEON INC. CORPORATE SEAL 2000 DELAWARE

Countersigned and Registered:
    WACHOVIA BANK, N.A.

Transfer Agent and Registrar
<PAGE>
                                  EMAGEON INC.

         The Corporation is authorized to issue more than one class of stock.
The Corporation will furnish without charge to each stockholder who so requests
a statement of the powers, designations, preferences, and relative,
participating, optional or other special rights of each class of stock or series
thereof of the Corporation, and the qualifications, limitations or restrictions
of such preferences and/or rights.

         The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                                   <C>
        TEN COM - as tenants in common                UNIF GIFT MIN ACT - ____ Custodian _____
        TEN ENT - as tenants by the entireties                          (Cust)           (Minor)
        JT TEN  - as joint tenants with right of                        under Uniform Gifts to Minors
                  survivorship and not as                               Act _____________
                  tenants in common                                            State
</TABLE>

     Additional abbreviations may also be used though not in the above list.

         For value received,_______________________ hereby sell, assign and
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------

_______________________________________________________________________________
Please print or typewrite name and address, including postal zip code, of
assignee

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________Shares of
the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

_______________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.

Dated_________________

                                                ______________________________

Signature(s) Guaranteed:

         NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.

_________________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17AD-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE, IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE
ISSUANCE OF A REPLACEMENT CERTIFICATE.<PAGE>
                                                                   Exhibit 10.3

                                  EMAGEON INC.

                           2005 EQUITY INCENTIVE PLAN

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                                                                               .
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                                                                               .
                               Table of Contents

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ARTICLE 1 -  GENERAL PROVISIONS........................................................................1

                  1.1               Establishment and Purposes of Plan.................................1
                  1.2               Types of Awards....................................................1
                  1.3               Effective Date.....................................................1

ARTICLE 2 -  DEFINITIONS...............................................................................1

ARTICLE 3 -  ADMINISTRATION............................................................................5

                  3.1               General............................................................5
                  3.2               Authority of the Committee.........................................5
                  3.3               Delegation of Authority............................................6
                  3.4               Award Agreements...................................................6
                  3.5               Indemnification....................................................6

ARTICLE 4 -  SHARES SUBJECT TO THE PLAN................................................................7

                  4.1               Number of Shares...................................................7
                  4.2               Individual Limits..................................................8
                  4.3               Adjustment of Shares...............................................8

ARTICLE 5 -  STOCK OPTIONS.............................................................................9

                  5.1               Grant of Options...................................................9
                  5.2               Agreement..........................................................9
                  5.3               Option Price.......................................................9
                  5.4               Duration of Options................................................9
                  5.5               Exercise of Options...............................................10
                  5.6               Payment...........................................................10
                  5.7               Nontransferability of Options.....................................10
                  5.8               Purchased Options.................................................10
                  5.9               Special Rules for ISOs............................................10

ARTICLE 6 -  STOCK APPRECIATION RIGHTS................................................................11

                  6.1               Grant of Stock Appreciation Rights (or SARs)......................11
                  6.2               Agreement.........................................................11
                  6.3               Tandem SARs.......................................................11
                  6.4               Payment...........................................................11
                  6.5               Exercise of SARs..................................................12

ARTICLE 7 -  RESTRICTED STOCK AND RESTRICTED STOCK UNITS..............................................12

                  7.1               Grant of Restricted Stock.........................................12
                  7.2               Restricted Stock Agreement........................................12
                  7.3               Nontransferability................................................12
                  7.4               Certificates......................................................12
</TABLE>

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                               Table of Contents
                                  (continued)

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                  7.5               Dividends and Other Distributions.................................13
                  7.6               Restricted Stock Units (or RSUs)..................................13

ARTICLE 8 -  PERFORMANCE SHARES.......................................................................14

                  8.1               Grant of Performance Shares.......................................14
                  8.2               Value of Performance Shares.......................................14
                  8.3               Earning of Performance Shares.....................................14
                  8.4               Form and Timing of Payment of Performance Shares..................14
                  8.5               Nontransferability................................................14

ARTICLE 9 -  PERFORMANCE MEASURES.....................................................................15

ARTICLE 10 -  BENEFICIARY DESIGNATION.................................................................15

ARTICLE 11 -  DEFERRALS...............................................................................16

ARTICLE 12 -  WITHHOLDING.............................................................................16

                  12.1              Tax Withholding...................................................16
                  12.2              Share Withholding.................................................16

ARTICLE 13 -  FOREIGN EMPLOYEES.......................................................................16

ARTICLE 14 -  AMENDMENT AND TERMINATION...............................................................17

                  14.1              Amendment of Plan.................................................17
                  14.2              Amendment of Award Agreement; Repricing...........................17
                  14.3              Termination of Plan...............................................17
                  14.4              Detrimental Activity..............................................17

ARTICLE 15 -  MISCELLANEOUS PROVISIONS................................................................18

                  15.1              Restrictions on Shares............................................18
                  15.2              No Implied Rights.................................................18
                  15.3              Compliance with Laws..............................................18
                  15.4              Successors........................................................18
                  15.5              Tax Elections.....................................................19
                  15.6              Legal Construction................................................19
</TABLE>

                                     -ii-
<PAGE>
                                  EMAGEON INC.
                           2005 EQUITY INCENTIVE PLAN

                        ARTICLE 1 - GENERAL PROVISIONS

         1.1      Establishment and Purposes of Plan. Emageon Inc., a Delaware
corporation (the "Company"), hereby establishes an equity incentive plan to be
known as the "Emageon Inc. 2005 Equity Incentive Plan" (the "Plan"), as set
forth in this document. The objectives of the Plan are (i) to provide
incentives to those individuals who contribute significantly to the long-term
performance and growth of the Company and its affiliates; and (ii) to attract,
motivate and retain employees, directors, consultants, advisors and other
persons who perform services for the Company by providing compensation
opportunities that are competitive with other companies; and (iii) to align the
long-term financial interests of employees' and other Eligible Participants
with those of the Company's stockholders.

         1.2      Types of Awards. Awards under the Plan may be made to
Eligible Participants who are employees in the form of (i) Incentive Stock
Options, (ii) Nonqualified Stock Options, (iii) Stock Appreciation Rights, (iv)
Restricted Stock, (v) Restricted Stock Units, (vi) Performance Shares, or (vii)
any combination of the foregoing. Awards under the Plan may be made to Eligible
Participants who are not employees in the form of (i) Nonqualified Stock
Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, and (iv)
Restricted Stock Units, or (v) any combination of the foregoing.

         1.3      Effective Date. The Plan shall be effective as of the date it
is approved by the Company's Board of Directors (the "Effective Date").

                            ARTICLE 2 - DEFINITIONS

         Except where the context otherwise indicates, the following
definitions apply:

         2.1      "Agreement" means the written agreement evidencing an Award
granted to the Participant under the Plan.

         2.2      "Award" means an award granted to a Participant under the
Plan that is an Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Share, or combination of these.

         2.3      "Board" means the Board of Directors of the Company.

         2.4      "Cause" means, unless provided otherwise in the Agreement,
the involuntary termination of a Participant by the Company for any of the
following reasons: (a) as a result of an act or acts by the Participant which
have been found in an applicable court of law to constitute a felony (other
than traffic-related offenses); (b) as a result of one or more acts by a
Participant which in the good faith judgment of the Board are believed to be in
violation of law or of policies of the Company and which result in demonstrably
material injury to the Company; (c) as result of an act or acts of proven
dishonesty by the Participant resulting or intended to result directly or
indirectly in significant gain or personal enrichment to the Participant at the
expense

                                       1
<PAGE>
of the Company or public stockholders of the Company; or (d) upon the willful
and continued failure by the Participant to perform his duties with the Company
(other than any such failure resulting from incapacity due to mental or
physical illness not constituting a Disability). For purposes of this Plan, no
act or failure to act by the Participant shall be deemed to be "willful" unless
done or omitted to be done by the Participant not in good faith and without
reasonable belief that the Participant's action or omission was in the best
interests of the Company. "Cause" shall be determined by the Committee.
Notwithstanding the foregoing, if the Participant has entered into an
employment agreement with the Employer that is binding as of the date of
employment termination, and if such employment agreement defines "Cause," then
the definition of "Cause" in such agreement, in lieu of the definition provided
above, shall apply to the Participant for purposes of the Plan.

         2.5      "Code" means the Internal Revenue Code of 1986, as now in
effect or as hereafter amended. All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.

         2.6      "Committee" means the Compensation Committee of the Board or
such other committee consisting of two or more members of the Board as may be
appointed by the Board to administer this Plan pursuant to Article 3 of the
Plan. To the extent required by applicable law, if any member of the Committee
does not qualify as (i) a "Non-Employee Director" within the meaning of Rule
16b-3 under the Act, and (ii) an "outside director" within the meaning of Code
Section 162(m), a subcommittee of the Committee shall be appointed to grant
Awards to Named Executive Officers and to officers who are subject to Section
16 of the Act, and each member of such subcommittee shall satisfy the
requirements of (i) and (ii) above. References to the Committee in the Plan
shall include and, as appropriate, apply to any such subcommittee.

         2.7      "Company" means Emageon Inc., a Delaware corporation, and its
successors and assigns.

         2.8      "Director" means any individual who is a member of the Board
of Directors of the Company; provided, however, that any Director who is
employed by the Company or any Employer shall not be considered a Director, but
instead shall be considered an employee for purposes of the Plan.

         2.9      "Disability" means, (i) with respect to a Participant who is
eligible to participate in the Employer's program of long-term disability
insurance, if any, a condition with respect to which the Participant is
entitled to commence benefits under such program, and (ii) with respect to any
Participant (including a Participant who is eligible to participate in the
Employer's program of long-term disability insurance, if any), the inability of
the Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of six (6) months or more. For a
Director, Disability shall mean the inability of the Director to perform his or
her usual duties as a Board member by reason of any medically determinable
physical or mental impairment expected to result in death or to be of
continuous duration of six (6) months or more. The determination of Disability
shall be made by the Committee.

                                       2
<PAGE>
         2.10     "Effective Date" shall have the meaning ascribed to such term
in Section 1.3 hereof.

         2.11     "Eligible Participant" means an employee of the Employer
(including an officer), as well as any other person, including a Director and a
consultant or advisor who provides bona fide services to the Employer, as shall
be determined by the Committee.

         2.12     "Employer" means the Company and any entity during any period
that it is a "parent corporation" or a "subsidiary corporation" with respect to
the Company within the meaning of Code Sections 424(e) and 424(f). With respect
to all purposes of the Plan, including but not limited to, the establishment,
amendment, termination, operation and administration of the Plan, the Company
shall be authorized to act on behalf of all other entities included within the
definition of "Employer."

         2.13     "Exchange Act" means the Securities Exchange Act of 1934, as
now in effect or as hereafter amended. All citations to sections of the
Exchange Act or rules thereunder are to such sections or rules as they may from
time to time be amended or renumbered.

         2.14     "Fair Market Value" means the fair market value of a Share,
as determined in good faith by the Committee as follows:

                  (a)      if the Shares are admitted to trading on a national
         securities exchange, Fair Market Value on any date shall be the last
         sale price reported for the Shares on such exchange on such date or,
         if no sale was reported on such date, on the last date preceding such
         date on which a sale was reported;

                  (b)      if the Shares are admitted to quotation on the
         National Association of Securities Dealers Automated Quotation System
         ("NASDAQ") or other comparable quotation system and have been
         designated as a National Market System ("NMS") security, Fair Market
         Value on any date shall be the last sale price reported for the Shares
         on such system on such date or on the last day preceding such date on
         which a sale was reported;

                  (c)      If the Shares are admitted to Quotation on the
         NASDAQ and have not been designated a NMS Security, Fair Market Value
         on any date shall be the average of the highest bid and lowest asked
         prices of the Shares on such system on such date; or

                  (d)      if (a), (b) and (c) do not apply, on the basis of
         the good faith determination of the Committee.

For purposes of subsection (a) above, if Shares are traded on more than one
securities exchange then the following exchange shall be referenced to
determine Fair Market Value: (i) the New York Stock Exchange ("NYSE"), or (ii)
if shares are not traded on the NYSE, the NASDAQ, or (iii) if shares are not
traded on the NYSE or NASDAQ, the largest regional exchange on which Shares are
traded.

                                       3
<PAGE>
         2.15     "Incentive Stock Option" or "ISO" means an Option granted to
an Eligible Participant under Article 5 of the Plan which is intended to meet
the requirements of Code Section 422.

         2.16     "Insider" shall mean, to the extent such provisions are
applicable, an individual who is, on the relevant date, subject to the
reporting requirements of Section 16(a) of the Act.

         2.17     "Named Executive Officer" means, to the extent such
provisions are applicable, a Participant who is one of the group of "covered
employees" as defined in the regulations promulgated or other guidance issued
under Code Section 162(m), as determined by t he Committee.

         2.18     "Nonqualified Stock Option" or "NQSO" means an Option granted
to an Eligible Participant under Article 5 of the Plan which is not intended to
meet the requirements of Code Section 422.

         2.19     "Option" means an Incentive Stock Option or a Nonqualified
Stock Option. An Option shall be designated as either an Incentive Stock Option
or a Nonqualified Stock Option, and in the absence of such designation, shall
be treated as a Nonqualified Stock Option.

         2.20     "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option.

         2.21     "Participant" means an Eligible Participant to whom an Award
has been granted.

         2.22     "Performance Measures" means the performance measures set
forth in Article 9 which are used for performance-based Awards to Named
Executive Officers.

        2.23     "Performance Share" means an Award under Article 8 of the
Plan that is valued by reference to a Share, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including without limitation, cash or Shares, or any combination thereof, upon
achievement of such performance objectives during the relevant performance
period as the Committee shall establish at the time of such Award or
thereafter, but, if applicable, not later than the time permitted by Code
Section 162(m) in the case of a Named Executive Officer, unless the Committee
determines not to comply with Code Section 162(m).

         2.24     "Permitted Transferee" means any members of the immediate
family of the Participant (i.e., spouse, children, and grandchildren), any
trusts for the benefit of such family members or any partnerships whose only
partners are such family members. Appropriate evidence of any transfer to the
Permitted Transferees shall be delivered to the Company at its principal
executive office. If all or part of an Option is transferred to a Permitted
Transferee, the Permitted Transferee's rights thereunder shall be subject to
the same restrictions and limitations with respect to the Option as the
Participant.

         2.25     "Plan" means the Emageon Inc. 2005 Equity Incentive Plan, as
set forth herein and as it may be amended from time to time.

                                       4
<PAGE>
         2.26     "Restricted Stock" means an Award of Shares under Article 7
of the Plan, which Shares are issued with such restriction(s) as the Committee,
in its sole discretion, may impose, including without limitation, any
restriction on the right to retain such Shares, to sell, transfer, pledge or
assign such Shares, to vote such Shares, and/or to receive any dividends or
distributions with respect to such Shares, which restrictions may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

         2.27     "Restricted Stock Units" or "RSUs" means a right granted
under Section 7 of the Plan to receive a number of Shares or a cash payment for
each such Share equal to the Fair Market Value of a Share on a specified date.

         2.28     "Restriction Period" means the period commencing on the date
an Award of Restricted Stock or Restricted Stock Units is granted and ending on
such date as the Committee shall determine.

         2.29     "Retirement" means termination of employment other than for
Cause after a Participant has (i) attained age 65; or (ii) reached the age of
55 years and has completed at least 10 years of service.

         2.30     "Share" means one share of common stock, par value $.001 per
share, of the Company, and as such Share may be adjusted pursuant to the
provisions of Section 4.3 of the Plan.

         2.31     "Stock Appreciation Right" or "SAR" means an Award granted
under Article 6 of the Plan which provides for an amount payable in Shares
and/or cash, as determined by the Committee, equal to the excess of the Fair
Market Value of a Share on the day the Stock Appreciation Right is exercised
over the specified purchase price.

                          ARTICLE 3 - ADMINISTRATION

         3.1      General. This Plan shall be administered by the Committee.
The Committee, in its discretion, may delegate to one or more of its members,
or to officers of the Company, such of its powers as it deems appropriate.

         3.2      Authority of the Committee.

                  (a)      The Committee shall have the exclusive right to
         interpret, construe and administer the Plan, to select the Eligible
         Participants who are eligible to receive an Award, and to act in all
         matters pertaining to the granting of an Award and the contents of the
         Agreement evidencing the Award, including, without limitation, the
         determination of the number of Options, Stock Appreciation Rights,
         Restricted Stock, Restricted Stock Units, or Performance Shares
         subject to an Award and the form, terms, conditions and duration of
         each Award, and any amendment thereof consistent with the provisions
         of the Plan. The Committee may adopt such rules, regulations and
         procedures of general application for the administration of this Plan,
         as it deems appropriate.

                                       5
<PAGE>
                  (b)      The Committee may correct any defect, supply any
         omission or reconcile any inconsistency in the Plan or any Agreement
         in the manner and to the extent it shall deem desirable to carry it
         into effect.

                  (c)      In the event the Company shall assume outstanding
         employee benefit awards or the right or obligation to make future such
         awards in connection with the acquisition of another corporation or
         business entity, the Committee may, in its discretion, make such
         adjustments in the terms of Awards under the Plan as it shall deem
         appropriate.

                  (d)      All acts, determinations and decisions of the
         Committee made or taken pursuant to grants of authority under the Plan
         or with respect to any questions arising in connection with the
         administration and interpretation of the Plan, including the
         severability of any and all of the provisions thereof, shall be
         conclusive, final and binding upon all parties, including the Company,
         its stockholders, Participants, Eligible Participants and their
         estates, beneficiaries and successors.

         3.3      Delegation of Authority. Except with respect to Named
Executive Officers and Insiders (to the extent such rules are applicable), the
Committee may, at any time and from time to time, delegate to one or more
persons any or all of its authority under Section 3.2, to the full extent
permitted by law.

         3.4      Award Agreements. Each Award granted under the Plan shall be
evidenced by a written Agreement. Each Agreement shall be subject to and
incorporate, by reference or otherwise, the applicable terms and conditions of
the Plan, and any other terms and conditions, not inconsistent with the Plan,
as may be imposed by the Committee, including without limitation, provisions
related to the consequences of termination of employment. A copy of such
document shall be provided to the Participant, and the Committee may, but need
not, require that the Participant sign a copy of the Agreement.

         3.5      Indemnification. In addition to such other rights of
indemnification as they may have as directors, officers or as members of the
Committee, directors and officers of the Company and the members of the
Committee shall be indemnified by the Company against reasonable expenses,
including attorney's fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted thereunder, and against all amounts paid by them in settlement thereof,
provided such settlement is approved by independent legal counsel selected by
the Company, or paid by them in satisfaction of a judgment or settlement in any
such action, suit or proceeding, except as to matters as to which the director,
officer or Committee member has been grossly negligent or engaged in willful
misconduct in the performance of his duties; provided, that within 60 days
after institution of any such action, suit or proceeding, a director, officer
or Committee member shall in writing offer the Company the opportunity, at its
own expense, to handle and defend the same.

                                       6
<PAGE>
                    ARTICLE 4 - SHARES SUBJECT TO THE PLAN

         4.1      Number of Shares.

                  (a)      Subject to adjustment as provided in this Section
         4.1 and in Section 4.3, the aggregate number of Shares which are
         available for issuance pursuant to Awards under the Plan is three
         million two hundred fifty thousand (3,250,000) Shares (after giving
         effect to the Company's reverse stock split in February 2005) , plus
         the number of Shares subject to outstanding grants on the Effective
         Date under (i) the Company's 2000 Equity Compensation Plan and (ii)
         the Company's 2000 Equity Incentive Plan (collectively, the "2000
         Plans"), which expire, are forfeited or otherwise terminate without
         delivery of Shares on or after the Effective Date in accordance with
         the terms of such grants. In addition, each January 1st beginning
         January 1, 2006 and ending January 1, 2009, the maximum number of
         Shares available for issuance pursuant to Awards under the Plan will
         automatically increase by the lesser of the number of Shares subject
         to Awards granted under the Plan in the prior calendar year or six
         hundred fifty thousand (650,000) Shares. The number of Incentive Stock
         Options that may be issued under the Plan is 5,850,000 Shares. Shares
         issued under the Plan shall be made available from Shares currently
         authorized but unissued or Shares currently held (or subsequently
         acquired) by the Company as treasury shares, including Shares
         purchased in the open market or in private transactions.

                  Upon approval of this Plan by the stockholders of the
         Company, no further grants will be made under the Company's 2000
         Plans, but awards made under the 2000 Plans shall remain outstanding
         in accordance with their terms. If Options, Restricted Stock or
         Restricted Stock Units are issued in respect of options, restricted
         stock, or restricted stock units of an entity acquired, by merger or
         otherwise, by the Company (or any subsidiary of the Company or any
         Employer), to the extent such issuance shall not be inconsistent with
         the terms, limitations and conditions of Code Section 422 or Exchange
         Act Rule 16b-3, the aggregate number of Shares for which Awards may be
         made hereunder shall automatically be increased by the number of
         Shares subject to Awards so issued.

                  (b)      The following rules shall apply for purposes of the
         determination of the number of Shares available for grant under the
         Plan:

                           (i)      If, for any reason, any Shares awarded or
                  subject to purchase under the Plan or the 2000 Plans are not
                  delivered or purchased, or are reacquired by the Company, for
                  reasons, including, but not limited to, a forfeiture of
                  Restricted Stock, an exercise of a Stock Appreciation Right
                  with delivery of fewer Shares than are subject to the Stock
                  Appreciation Right, or the termination, expiration or
                  cancellation of an Option, Stock Appreciation Right,
                  Restricted Stock Unit, Performance Share ("Returned Shares"),
                  such Returned Shares shall not be charged against the
                  aggregate number of Shares available for issuance pursuant to
                  Awards under the Plan and shall again be available for
                  issuance pursuant to an Award under the Plan. If the exercise
                  price and/or tax withholding obligation under an Award is
                  satisfied by tendering Shares to the Company (either by
                  actual delivery or attestation) or by reducing the number of
                  Shares to be delivered to the

                                       7
<PAGE>
                  Participant, only the number of Shares issued net of the
                  Shares so tendered or withheld shall be deemed delivered for
                  purposes of determining the maximum number of Shares
                  available for issuance under the Plan.

                           (ii)     Each Performance Share awarded that may be
                  settled in Shares shall be counted as one Share subject to an
                  Award. Performance Shares that may not be settled in Shares
                  (or that may be settled in Shares but are not) shall not
                  result in a charge against the aggregate number of Shares
                  available for issuance pursuant to Awards under this Plan.

                           (iii)    Each Stock Appreciation Right or Restricted
                  Stock Unit that may be settled in Shares shall be counted as
                  one Share subject to an award. Stock Appreciation Rights or
                  Restricted Stock Units that may not be settled in Shares (or
                  that may be settled in Shares but are not) shall not result
                  in a charge against the aggregate number of Shares available
                  for issuance pursuant to Awards under this Plan. In addition,
                  if a Stock Appreciation Right is granted in connection with
                  an Option and the exercise of the Stock Appreciation Right
                  results in the loss of the Option right, the Shares that
                  otherwise would have been issued upon the exercise of such
                  related Option shall not result in a charge against the
                  aggregate number of Shares available for issuance pursuant to
                  Awards under this Plan. Upon exercise of a Stock Appreciation
                  Right, only the actual number of Shares delivered shall be
                  charged against the aggregate number of Shares available, and
                  any additional Shares that were the subject of the Stock
                  Appreciation Right shall again be available for grant of
                  Awards.

         4.2      Individual Limits. To the extent that the requirements of
Code Section 162(m) apply to an Award and except to the extent the Committee
determines that an Award to a Named Executive Officer shall not comply with the
performance-based compensation provisions of Code Section 162(m), the following
rules shall apply to Awards under the Plan:

                  (a)      Options and SARs. The maximum number of Options and
         Stock Appreciation Rights that, in the aggregate, may be granted
         pursuant to Awards in any one calendar year to any one Participant
         shall be one million.

                  (b)      Restricted Stock, Restricted Stock Units and
         Performance Shares. The maximum number of Shares of Restricted Stock,
         number of Restricted Stock Units or Performance Shares that, in the
         aggregate, may be granted pursuant to Awards in any one calendar year
         to any one Participant shall be one million.

         4.3      Adjustment of Shares. If any change in corporate
capitalization, such as a stock split, reverse stock split, stock dividend, or
any corporate transaction such as a reorganization, reclassification, merger or
consolidation or separation, including a spin-off, of the Company or sale or
other disposition by the Company of all or a portion of its assets, any other
change in the Company's corporate structure, or any distribution to
stockholders (other than a cash dividend) results in the outstanding Shares, or
any securities exchanged therefor or received in their place, being exchanged
for a different number or class of shares or other securities of the Company,
or for shares of stock or other securities of any other entity; or new,
different or additional shares or

                                       8
<PAGE>
other securities of the Company or of any other entity being received by the
holders of outstanding Shares; then equitable adjustments shall be made by the
Committee in:

                  (a)      the limitations on the aggregate number of Shares
         that may be awarded as set forth in Section 4.1, including, without
         limitation, with respect to Incentive Stock Options;

                  (b)      the limitations on the aggregate number of Shares
         that may be awarded to any one single Participant as set forth in
         Section 4.2 (to the extent applicable);

                  (c)      the number and class of Shares that may be subject
         to an Award, and which have not been issued or transferred under an
         outstanding Award;

                  (d)      the Option Price under outstanding Options and the
         number of Shares to be transferred in settlement of outstanding Stock
         Appreciation Rights; and

                  (e)      the terms, conditions or restrictions of any Award
         and Agreement, including the price payable for the acquisition of
         Shares; provided, however, that all such adjustments made in respect
         of each ISO shall be accomplished so that such Option shall continue
         to be an incentive stock option within the meaning of Code Section
         422.

         For all purposes under the Plan, the Company's reverse stock split in
February 2005 has already been considered, and no adjustments shall be made to
reflect such reverse stock split.

                           ARTICLE 5 - STOCK OPTIONS

         5.1      Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Eligible Participants at any time and from time
to time as shall be determined by the Committee. The Committee shall have sole
discretion in determining the number of Shares subject to Options granted to
each Participant. The Committee may grant a Participant ISOs, NQSOs or a
combination thereof, and may vary such Awards among Participants; provided that
only an Employee may be granted ISOs.

         5.2      Agreement. Each Option grant shall be evidenced by an
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains and such other provisions as the
Committee shall determine. The Option Agreement shall further specify whether
the Award is intended to be an ISO or an NQSO. Any portion of an Option that is
not designated as an ISO or otherwise fails or is not qualified as an ISO (even
if designated as an ISO) shall be an NQSO.

         5.3      Option Price. The Option Price for each grant of an ISO or
NQSO shall not be less than one hundred percent (100%) of the Fair Market Value
of a Share on the date the Option is granted.

         5.4      Duration of Options. Each Option shall expire at such time as
the Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary of its
grant date.

                                       9
<PAGE>
         5.5      Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, including conditions related to
the employment of or provision of services by the Participant with the Company
or any Employer, which need not be the same for each grant or for each
Participant. The Committee may provide in the Agreement for automatic
accelerated vesting and other rights upon the occurrence of certain events as
specified in the Agreement. In addition, the Committee may provide in the
Agreement for the right of a Participant to defer option gains related to an
exercise.

         5.6      Payment. Options shall be exercised by the delivery of a
written notice of exercise to the Company, setting forth the number of Shares
with respect to which the Option is to be exercised, accompanied by full
payment for the Shares. The Option Price upon exercise of any Option shall be
payable to the Company in full, in any of the following manners: (a) cash, (b)
cash equivalent approved by the Committee, (c) if approved by the Committee, by
tendering previously acquired Shares (or delivering a certification or
attestation of ownership of such Shares) having an aggregate Fair Market Value
at the time of exercise equal to the total Option Price (provided that the
tendered Shares must have been held by the Participant for any period required
by the Committee), or (d) by a combination of (a), (b) and (c). The Committee
also may allow cashless exercises as permitted under Federal Reserve Board's
Regulation T, subject to applicable securities law restrictions, or by any
other means which the Committee determines to be consistent with the Plan's
purpose and applicable law.

         5.7      Nontransferability of Options.

                  (a)      Incentive Stock Options. No ISO granted under the
         Plan may be sold, transferred, pledged, assigned, or otherwise
         alienated or hypothecated, other than by will or by the laws of
         descent and distribution. Further, all ISOs granted to a Participant
         under the Plan shall be exercisable during his or her lifetime only by
         such Participant.

                  (b)      Nonqualified Stock Options. Except as otherwise
         provided in a Participant's Award Agreement with respect to transfers
         to Permitted Transferees (any such transfers being subject to
         applicable laws, rules and regulations), no NQSO granted under this
         Plan may be sold, transferred, pledged, assigned, or otherwise
         alienated or hypothecated, other than by will or by the laws of
         descent and distribution. Further, except as otherwise provided in a
         Participant's Award Agreement, all NQSOs granted to a Participant
         under this Article 5 shall be exercisable during his or her lifetime
         only by such Participant.

         5.8      Purchased Options. The Committee shall also have the
authority to grant Options to Participants in exchange for a stated purchase
price for such Option (which may be payable by the Participant directly or, at
the election of the Participant, may be offset from bonus or other amounts owed
to the Participant by the Company).

         5.9      Special Rules for ISOs. In no event shall any Participant who
owns (within the meaning of Code Section 424(d)) stock of the Company
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company be eligible to receive an ISO at an Option
Price less than one hundred ten percent (110%) of the Fair Market Value of

                                      10
<PAGE>
a share on the date the ISO is granted or be eligible to receive an ISO that is
exercisable later than the fifth (5th) anniversary date of its grant. No
Participant may be granted ISOs (under the Plan and all other incentive stock
option plans of the Employer) which are first exercisable in any calendar year
for Shares having an aggregate Fair Market Value (determined as of the date an
Option is granted) that exceeds One Hundred Thousand Dollars ($100,000).

                     ARTICLE 6 - STOCK APPRECIATION RIGHTS

         6.1      Grant of Stock Appreciation Rights (or SARs). A Stock
Appreciation Right may be granted to an Eligible Participant in connection with
an Option granted under Article 5 of this Plan or may be granted independently
of any Option. A SAR shall entitle the holder, within the specified period
(which may not exceed 10 years), to exercise the SAR and receive in exchange
therefor a payment having an aggregate value equal to the amount by which the
Fair Market Value of a Share exceeds the exercise price, times the number of
Shares with respect to which the SAR is exercised. The Committee may provide in
the Agreement for automatic accelerated vesting and other rights upon the
occurrence of certain events specified in the Agreement. A SAR granted in
connection with an Option (a "Tandem SAR") shall entitle the holder of the
related Option, within the period specified for the exercise of the Option, to
surrender the unexercised Option, or a portion thereof, and to receive in
exchange therefor a payment having an aggregate value equal to the amount by
which the Fair Market Value of a Share exceeds the Option price per Share,
times the number of Shares under the Option, or portion thereof, which is
surrendered. SARs shall be subject to the same transferability restrictions as
Nonqualified Stock Options.

         6.2      Agreement. Each SAR grant shall be evidenced by an Agreement
that shall specify the exercise price, the duration of the SAR, the number of
Shares to which the SAR pertains and such other provisions as the Committee
shall determine.

         6.3      Tandem SARs. Each Tandem SAR shall be subject to the same
terms and conditions as the related Option, including limitations on
transferability, and shall be exercisable only to the extent such Option is
exercisable and shall terminate or lapse and cease to be exercisable when the
related Option terminates or lapses. The grant of Stock Appreciation Rights
related to ISOs must be concurrent with the grant of the ISOs. With respect to
NQSOs, the grant either may be concurrent with the grant of the NQSOs, or in
connection with NQSOs previously granted under Article 5, which are unexercised
and have not terminated or lapsed.

         6.4      Payment. The Committee shall have sole discretion to
determine in each Agreement whether the payment with respect to the exercise of
a SAR will be in the form of all cash, all Shares, or any combination thereof.
If payment is to be made in Shares, the number of Shares shall be determined
based on the Fair Market Value of a Share on the date of exercise. If the
Committee elects to make full payment in Shares, no fractional Shares shall be
issued and cash payments shall be made in lieu of fractional shares. The
Committee shall have sole discretion as to the timing of any payment made in
cash or Shares, or a combination thereof, upon exercise of SARs. Payment may be
made in a lump sum, in annual installments or may be otherwise deferred (at the
election of the Participant); and the Committee shall have sole discretion to
determine whether any deferred payments may bear amounts equivalent to interest
or cash dividends.

                                      11
<PAGE>
         6.5      Exercise of SARs. Upon exercise of a Tandem SAR, the number
of Shares subject to exercise under any related Option shall automatically be
reduced by the number of Shares represented by the Option or portion thereof
which is surrendered.

            ARTICLE 7 - RESTRICTED STOCK AND RESTRICTED STOCK UNITS

         7.1      Grant of Restricted Stock. Awards of Restricted Stock may be
made either alone or in addition to or in tandem with other Awards granted
under the Plan and may be current grants of Restricted Stock or deferred grants
of Restricted Stock.

         7.2      Restricted Stock Agreement. The Restricted Stock Agreement
shall set forth the terms of the Award, as determined by the Committee,
including, without limitation, the purchase price, if any, to be paid for such
Restricted Stock, which may be more than, equal to, or less than Fair Market
Value and may be zero, subject to such minimum consideration as may be required
by applicable law; any restrictions applicable to the Restricted Stock such as
continued service or achievement of Performance Measures, the length of the
Restriction Period and whether any circumstances, such as death or Disability,
will shorten or terminate the Restriction Period; and rights of the Participant
to vote or receive dividends or distributions with respect to the Shares during
the Restriction Period.

         Notwithstanding Section 3.4 of the Plan, a Restricted Stock Award must
be accepted within a period of sixty (60) days, or such other period as the
Committee may specify, by executing a Restricted Stock Agreement and paying
whatever price, if any, is required. The prospective recipient of a Restricted
Stock Award shall not have any rights with respect to such Award, unless and
until such recipient has executed a Restricted Stock Agreement and has
delivered a fully executed copy thereof to the Committee, and has otherwise
complied with the applicable terms and conditions of such Award.

         7.3      Nontransferability. Except as otherwise provided in this
Article 7, no shares of Restricted Stock nor any Restricted Stock Units
received by a Participant shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction Period.

         7.4      Certificates. Upon an Award of Restricted Stock to a
Participant, Shares of Restricted Stock shall be registered in the
Participant's name (or an appropriate book entry shall be made). Certificates,
if issued, may either be held in custody by the Company until the Restriction
Period expires or until restrictions thereon otherwise lapse and/or be issued
to the Participant and registered in the name of the Participant, bearing an
appropriate restrictive legend and remaining subject to appropriate
stop-transfer orders. If required by the Committee, the Participant shall
deliver to the Company one or more stock powers endorsed in blank relating to
the Restricted Stock. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction Period,
unrestricted certificates for such shares shall be delivered to the
Participant; provided, however, that the Committee may cause such legend or
legends to be placed on any such certificates as it may deem advisable under
the rules, regulations and other requirements of the Securities and Exchange
Commission and any applicable federal or state law.

                                      12
<PAGE>
         7.5      Dividends and Other Distributions. Except as provided in this
Article 7 or in the Award Agreement, a Participant receiving a Restricted Stock
Award shall have, with respect to such Restricted Stock Award, all of the
rights of a stockholder of the Company, including the right to vote the Shares
to the extent, if any, such Shares possess voting rights and the right to
receive any dividends and distributions; provided, however, the Committee may
require that any dividends on such Shares of Restricted Stock shall be
automatically deferred and reinvested in additional Restricted Stock subject to
the same restrictions as the underlying Award, or may require that dividends
and other distributions on Restricted Stock shall be paid to the Company for
the account of the Participant. The Committee shall determine whether interest
shall be paid on such amounts, the rate of any such interest, and the other
terms applicable to such amounts. In addition, with respect to Named Executive
Officers, the Committee may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to Restricted Stock such that the
dividends and/or Restricted Stock maintain eligibility for the
performance-based compensation exception under Code Section 162(m).

         7.6      Restricted Stock Units (or RSUs). Awards of Restricted Stock
Units may be made to Eligible Participants in accordance with the following
terms and conditions:

                  (a)      The Committee, in its discretion, shall determine
         and set forth in an Agreement the number of RSUs to grant to a
         Participant, the Restriction Period and other terms and conditions of
         the Award, including whether the Award will be paid in cash, Shares or
         a combination of the two and the time when the Award will be payable
         (i.e., at vesting, termination of employment or another date).

                  (b)      Unless the Agreement provides otherwise, RSUs shall
         not be sold, transferred or otherwise disposed of and shall not be
         pledged or otherwise hypothecated.

                  (c)      Awards of RSUs shall be subject to the same terms as
         applicable to Awards of Restricted Stock under Section 7.2 of the
         Plan; provided, however, a Participant to whom RSUs are awarded has no
         rights as a stockholder with respect to the Shares represented by the
         RSUs unless and until the Shares are actually delivered to the
         Participant; provided further, however, RSUs may have dividend
         equivalent rights if provided for by the Committee which may be
         subject to the same terms and conditions governing dividends and
         distributions applicable to Restricted Stock Awards under Section 7.5
         of this Plan with the exception that in no event shall RSUs possess
         voting rights.

                  (d)      The Agreement shall set forth the terms and
         conditions that shall apply upon the termination of the Participant's
         employment with the Employer (including a forfeiture of RSUs for which
         the restrictions have not lapsed upon Participant's ceasing to be
         employed) as the Committee may, in its discretion, determine at the
         time the Award is granted.

                                      13
<PAGE>
                        ARTICLE 8 - PERFORMANCE SHARES

         8.1      Grant of Performance Shares. Performance Shares may be
granted to Participants in such amounts and upon such terms, and at any time
and from time to time, as shall be determined by the Committee.

         8.2      Value of Performance Shares. Each Performance Share shall
have an initial value equal to the Fair Market Value of a Share on the date of
grant. The Committee shall set the Performance Measures in its discretion
which, depending on the extent to which they are met, will determine the number
of Performance Shares that will be paid out to the Participant. For purposes of
this Article 8, the time period during which the Performance Measures must be
met shall be called a "Performance Period."

         8.3      Earning of Performance Shares. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of
Performance Shares shall be entitled to receive a payout based on the number of
Performance Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Measures have been achieved. The Committee may provide in the Agreement for
automatic accelerated vesting and other rights upon the occurrence of certain
events specified in the Agreement.

         8.4      Form and Timing of Payment of Performance Shares. Subject to
the terms of this Plan, the Committee, in its sole discretion, may pay earned
Performance Shares in the form of cash or in Shares (or in a combination
thereof) which has an aggregate Fair Market Value equal to the value of the
earned Performance Shares at the close of the applicable Performance Period.
Such Shares may be granted subject to any restrictions deemed appropriate by
the Committee. The determination of the Committee with respect to the form and
timing of payout of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.

         Except as otherwise provided in the Participant's Award Agreement, a
Participant shall be entitled to receive any dividends and distributions
declared with respect to Shares that have been earned in connection with grants
of Performance Shares but that have not yet been distributed to the Participant
(such dividends and distributions shall be subject to the same accrual,
forfeiture, and payout restrictions as apply to dividends and distributions
earned with respect to Restricted Stock, as set forth in Section 7.5 herein).
In addition, unless otherwise provided in the Participant's Award Agreement, a
Participant shall be entitled to exercise full voting rights with respect to
such Shares that have been earned in connection with grants of Performance
Shares but that have not yet been distributed to the Participant.

         8.5      Nontransferability. Except as otherwise provided in a
Participant's Award Agreement, Performance Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. Further, except as otherwise
provided in a Participant's Award Agreement, a Participant's rights under the
Plan shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.

                                      14
<PAGE>
                       ARTICLE 9 - PERFORMANCE MEASURES

         The Performance Measure(s) to be used for purposes of Awards under the
Plan shall be chosen from among the following (which may relate to the Company
or a business unit, division or subsidiary): earnings, earnings per share,
consolidated pre-tax earnings, net earnings, operating income, EBIT (earnings
before interest and taxes), EBITDA (earnings before interest, taxes,
depreciation and amortization), gross margin, revenues, revenue growth, market
value added, economic value added, return on equity, return on investment,
return on assets, return on net assets, return on capital employed, return on
incremental equity, total stockholder return, profit, economic profit,
capitalized economic profit, after-tax profit, pre-tax profit, cash flow
measures, cash flow return, sales, sales volume, revenues per employer, stock
price, cost goals, budget goals, growth expansion goals, or goals related to
acquisitions or divestitures. The Committee can establish other Performance
Measures for performance Awards granted to Eligible Participants, but, to the
extent applicable, not for Named Executive Officers. To the extent required to
comply with the applicable requirements of Code Section 162(m), the Company may
submit the Performance Measures for stockholder approval.

         The Committee shall be authorized to make adjustments in performance
based criteria or in the terms and conditions of other Awards in recognition of
unusual or nonrecurring events affecting the Company or its financial
statements or changes in applicable laws, regulations or accounting principles.
The Committee shall also have the discretion to adjust the determinations of
the degree of attainment of the pre-established Performance Measures; provided,
however, that Awards which are designed to qualify for the performance-based
compensation exception from the deductibility limitations of Code Section
162(m), and which are held by Named Executive Officers, may not be adjusted
upward (except as may be permitted by Code Section 162(m)), but the Committee
shall retain the discretion to adjust such Awards downward.

         If applicable tax and/or securities laws change to permit Committee
discretion to alter the governing Performance Measures without obtaining
stockholder approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining stockholder approval. In addition, in
the event that the Committee determines that it is advisable to grant Awards
which shall not qualify for the performance-based compensation exception from
the deductibility limitations of Code Section 162(m), the Committee may make
such grants without satisfying the requirements of Code Section 162(m).

                      ARTICLE 10 - BENEFICIARY DESIGNATION

         Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.

                                      15
<PAGE>
                            ARTICLE 11 - DEFERRALS

         The Committee may permit a Participant to defer under this Plan or to
a separate deferred compensation arrangement of the Company such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise
be due to such Participant by virtue of the exercise of an Option or SAR, the
lapse or waiver of restrictions with respect to Restricted Stock or Restricted
Stock Units, or the satisfaction of any requirements or goals with respect to
Performance Shares. If any such deferral election is required or permitted, the
Committee shall, in its sole discretion, establish rules and procedures for
such payment deferrals, and such rules and procedures shall comply with Code
Section 409A.

                           ARTICLE 12 - WITHHOLDING

         12.1     Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.

         12.2     Share Withholding. To the extent an Award is settled by the
delivery of Shares, with respect to withholding required upon the exercise of
Options or SARs, upon the lapse of restrictions on Restricted Stock, upon the
delivery of Shares subject to Restricted Stock units, upon the settlement of
Performance Shares, or upon any other taxable event arising as a result of
Awards granted hereunder, unless other arrangements are made with the consent
of the Committee, Participants shall, subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate,
satisfy the withholding requirement by having the Company withhold Shares
having a Fair Market Value on the date the tax is to be determined equal to not
more than the minimum amount of tax required to be withheld with respect to the
transaction.

                        ARTICLE 13 - FOREIGN EMPLOYEES

         In order to facilitate the making of any grant of Awards under this
Plan, the Committee may provide for such special terms for Awards to
Participants who are foreign nationals or who are employed by the Company or
any Employer outside of the United States of America as the Committee may
consider necessary or appropriate to accommodate differences in local law, tax
policy or custom, which special terms may be contained in an Appendix attached
hereto. Moreover, the Committee may approve such supplements to or amendments,
restatements or alternative versions of this Plan as it may consider necessary
or appropriate for such purposes, without thereby affecting the terms of this
Plan as in effect for any other purpose, and the Secretary or other appropriate
officer of the Company may certify any such document as having been approved
and adopted in the same manner as this Plan. No such special terms,
supplements, amendments or restatements, however, shall include any provisions
that are inconsistent with the terms of this Plan as then in effect unless this
Plan could have been amended to eliminate such inconsistency without further
approval by the stockholders of the Company.

                                      16
<PAGE>
                    ARTICLE 14 - AMENDMENT AND TERMINATION

         14.1     Amendment of Plan. The Committee may at any time terminate or
from time to time amend the Plan in its discretion in whole or in part, but no
such action shall adversely affect any rights or obligations with respect to
any Awards previously granted under the Plan, unless the affected Participants
consent in writing. To the extent applicable and required by Code Section
162(m) or 422 and/or the rules of NASDAQ or any exchange upon which the Company
lists the shares for trading or other applicable law, rule or regulation, no
amendment shall be effective unless approved by the stockholders of the Company
at an annual or special meeting.

         14.2     Amendment of Award Agreement; Repricing. The Committee may,
at any time, in its discretion amend outstanding Agreements in a manner not
inconsistent with the terms of the Plan; provided, however, except as provided
in Section 14.4, if such amendment is adverse to the Participant, as determined
by the Committee, the amendment shall not be effective unless and until the
Participant consents, in writing, to such amendment. To the extent not
inconsistent with the terms of the Plan, the Committee may, at any time, in its
discretion amend an outstanding Agreement in a manner that is not unfavorable
to the Participant without the consent of such Participant. Notwithstanding the
above provision, the Committee shall not have the authority to decrease the
Option Price of any outstanding Option, except in accordance with Section 4.3
or unless such an amendment is approved by the stockholders of the Company.

         14.3     Termination of Plan. No Awards shall be granted under the
Plan after the tenth (10th) anniversary of the date the Board adopts the Plan.

         14.4     Detrimental Activity. The Committee may provide in the Award
Agreement that if a Participant engages in any "Detrimental Activity" (as
defined below), the Committee may, notwithstanding any other provision in this
Plan to the contrary, cancel, rescind, suspend, withhold or otherwise restrict
or limit any unexpired, unexercised, or unpaid Awards as of the first date the
Participant engages in the Detrimental Activity, unless sooner terminated by
operation of another term of this Plan or any other agreement. Without limiting
the generality of the foregoing, the Agreement may also provide that if the
Participant exercises an Option or SAR, receives a Performance Share or
Restricted Stock Unit payout, or receives Shares under an Award at any time
during the period beginning six months prior to the date the Participant first
engages in Detrimental Activity and ending six months after the date the
Participant ceases to engage in any Detrimental Activity, the Participant shall
be required to pay to the Company the excess of the then Fair Market Value of
the Shares subject to the Award over the total price paid by the Participant for
such Shares.

         For purposes of this Section, "Detrimental Activity" means any of the
following activities as further defined by the Committee in the Award Agreement
and as determined by the Committee in good faith: (i) the violation of any
agreement between the Company and the Participant relating to the disclosure of
confidential information or trade secrets, the solicitation of employees,
customers, suppliers, licensees, licensors or contractors, or the performance
of competitive services (ii) conduct that constitutes Cause (as defined in
Section 2.4 above), whether or not the Participant's employment is terminated
for Cause.

                                      17
<PAGE>
                     ARTICLE 15 - MISCELLANEOUS PROVISIONS

         15.1     Restrictions on Shares. All certificates for Shares delivered
under the Plan shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed and any applicable federal or
state laws, and the Committee may cause a legend or legends to be placed on any
such certificates to make appropriate reference to such restrictions. In making
such determination, the Committee may rely upon an opinion of counsel for the
Company or Committee.

         Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any Shares under the Plan or make any other
distribution of the benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar entity.

         15.2     No Implied Rights. Nothing in the Plan or any Award granted
under the Plan shall confer upon any Participant any right to continue in the
service of the Employer, or to serve as a Director thereof, or interfere in any
way with the right of the Employer to terminate the Participant's employment or
other service relationship for any reason at any time. Unless agreed by the
Board, no Award granted under the Plan shall be deemed salary or compensation
for the purpose of computing benefits under any employee benefit plan,
severance program, or other arrangement of the Employer for the benefit of its
employees. No Participant shall have any claim to an Award until it is actually
granted under the Plan. To the extent that any person acquires a right to
receive payments from the Company under the Plan, such right shall, except as
otherwise provided by the Committee, be no greater than the right of an
unsecured general creditor of the Company.

         15.3     Compliance with Laws.

                  (a)      At all times when the Committee determines that
         compliance with Code Section 162(m) is required or desirable, all
         Awards granted under this Plan to Named Executive Officers shall
         comply with the requirements of Code Section 162(m). In addition, in
         the event that changes are made to Code Section 162(m) to permit
         greater flexibility with respect to any Awards under the Plan, the
         Committee may, subject to the requirements of Article 14, make any
         adjustments it deems appropriate.

                  (b)      The Plan and the grant of Awards shall be subject to
         all applicable federal and state laws, rules, and regulations and to
         such approvals by any United States government or regulatory agency as
         may be required. Any provision herein relating to compliance with Rule
         16b-3 under the Exchange Act shall not be applicable with respect to
         participation in the Plan by Participants who are not Insiders.

         15.4     Successors. The terms of the Plan shall be binding upon the
Company, and its successors and assigns (whether by purchase, merger,
consolidation or otherwise).

                                      18
<PAGE>
         15.5     Tax Elections. Each Participant agrees to give the Committee
prompt written notice of any election made by such Participant under Code
Section 83(b) or any similar provision thereof.

         15.6     Legal Construction.

                  (a)      Severability. If any provision of this Plan or an
         Agreement is or becomes or is deemed invalid, illegal or unenforceable
         in any jurisdiction, or would disqualify the Plan or any Agreement
         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 construed or deemed amended without, in the determination of
         the Committee, materially altering the intent of the Plan or the
         Agreement, it shall be stricken and the remainder of the Plan or the
         Agreement shall remain in full force and effect.

                  (b)      Gender and Number. Where the context admits, words
         in any gender shall include the other gender, words in the singular
         shall include the plural and words in the plural shall include the
         singular.

                  (c)      Governing Law. To the extent not preempted by
         federal law, the Plan and all Agreements hereunder, shall be construed
         in accordance with and governed by the laws of the State of Delaware.

                  (d)      Compliance with Code Section 409A. The Plan is
         intended to satisfy the requirements of Code Section 409A and any
         regulations or guidance that may be adopted thereunder from time to
         time, including any transition relief available under applicable
         guidance related to Code Section 409A. The Plan may be amended or
         interpreted by the Committee as it determines necessary or appropriate
         in accordance with Code Section 409A and to avoid a plan failure under
         Code Section 409A(a)(1).

         IN WITNESS WHEREOF, this Plan is executed as of this the 25th day of
January, 2005.

                                        EMAGEON INC.

                                        By: /s/ Charles A. Jett, Jr.
                                            -----------------------------------
                                                    Authorized Officer

ATTEST:

/s/ Craig A. Parker
----------------------------
Secretary

                                      19

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