Document:

Filed by Bowne Pure Compliance

EXHIBIT
10.10

WINSTON LABORATORIES, INC.

1999 Stock Option Plan

1. PURPOSE. The purpose of the Plan is to provide favorable opportunities for certain,
select Individuals employed by or affiliated with Winston Laboratories, Inc., a Delaware
corporation, (“Company”), to purchase shares of the Company’s stock, thereby encouraging them to
acquire ownership interests in the Company. The Company desires that such key Individuals have an
increased incentive to contribute to the Company’s future performance, thereby enhancing the value
of the Company for the benefit of its shareholders. The Company believes the availability of stock
options supports and increases the Company’s ability to attract and retain Individuals of
exceptional talent upon whom, in large measure, the sustained progress, growth and profitability of
the Company depends.

2. DEFINITIONS. As used in this Plan:

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

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

“Committee” means the Compensation Committee of the Board of Directors of Winston
Laboratories, Inc. and shall have the responsibility of administering the Plan as described in
Section 9 of this Plan.

“Common Shares” means (i) shares of the common stock, $.001 par value, of the Company and (ii)
any security into which Common Shares may be converted by reason of any transaction or event of the
type referred to in Section 6 of this Plan.

“Date of Grant” means the date on which a grant of Options shall become effective as provided
in Section 6.

“Director” means any person who is a member of the Board.

 

 

 

“Disability” means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period of not less than 12 months.
An Individual shall not be considered to be subject to a Disability until he furnishes a
certification from a practicing physician in good standing to the effect that such Individual meets
the criteria described in this Section.

“Effective Date” has the meaning set forth in Section 15.

“Individual” means an employee of the Company or any person who from time to time may provide
service to the Company under a written agreement or contract.

“Market Value” shall mean, as of any particular date, (i) the closing sale price per Common
Share as reported on the principal exchange on which Common Shares are then trading, if any, or if
applicable, the Nasdaq National Market or other principal automated quotation system, on the Date
of Grant, or if there are no sales on such day, on the next preceding trading day during which a
sale occurred, or (ii) if clause (i) does not apply, the fair market value of the Common Shares as
determined by the Board.

“Nonqualified Stock Option” or “NQSO” shall mean a stock option other than an Incentive Stock
Option.

“Options” shall mean the ISOs and NQSOs granted under the Plan.

“Plan” means the Winston Laboratories, Inc. 1999 Stock Option Plan, as the same may be amended
from time to time.

“Rule 16b-3” means Rule 16b-3, as promulgated and amended from time to time by the Securities
and Exchange Commission under the Exchange Act.

 

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“Ten Percent Share Owner” shall mean an employee who owns more than ten percent (10%) of the
Common Shares as such amount is calculated under Code Section 422(b) (6).

3. STOCK OPTIONS TO BE GRANTED. Options granted under this Plan are intended to be
Incentive Stock Options within the meaning of Code Section 422(b) (as hereinafter defined);
however, Nonqualified Stock Options may also be granted within the limitations of the Plan as
described herein.

4. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to Section 4 (b) the number of Common
Shares issued or transferred plus the number of Common Shares covered by outstanding awards granted
under this Plan, shall not in the aggregate exceed 200,000 Common Shares, which may be Common
Shares held in treasury or a combination thereof.

(b) For the purposes of this Section 4, any Common Shares subject to an Option Right that has
been cancelled or terminated shall again be available for the grant of Option Rights under this
Plan.

5. ELIGIBILITY. Consistent with the Plans purpose, ISOs and/or NQSOs may be granted to
Individuals of the Company who are performing or have been engaged to perform services relating to
the management, operation or development of the Company, including those officers who are also
members of the Board.

 

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6. STOCK OPTION TERMS AND CONDITIONS. All ISOs and NQSOs granted under the Plan shall be
evidenced by written documents (“Option Documents”) in such forms as the Committee (hereinafter
defined) shall from time to time approve. The Option Documents and each ISO and/or NQSO shall
comply with and be subject to the following terms and conditions and such other terms and
conditions which the Committee shall from time to time require that are
not inconsistent with the terms of the Plan including, but not limited, to, the following
provisions:

(a) Price. Each Option Document shall state the price at which ISOs and/or NQSOs may
be purchased (“Option Price”). The Option Price shall be established in the sole discretion of the
Committee; provided (i) the Option Price per share for any Optionee other than a Ten Percent Share
Owner in the case of an ISO shall not be less than one hundred percent (100%) of the Market Value
of a share of Common Stock on the Date of Grant and;

(ii) the Option Price per share for an Optionee who is a Ten Percent Share Owner in the case
of an ISO shall not be less than one hundred ten percent (110%) of the Market Value of a Common
Share on the Date of Grant.

Notwithstanding the foregoing, an ISO may be granted with an Option Price lower than the
minimum Option Price set forth above if such ISO is granted pursuant to an assumption or
substitution for another option in a manner qualifying with the provisions of Section 424(a) of the
code. The Option Price shall be subject to adjustment only as provided in Section 7 below.

(b) Period of Grant. Each Option Document shall state the period for which each ISO
and/or NQSO is granted; provided that neither an ISO or an NQSO shall be granted for a period
longer than ten (10) years from the Date of Grant; and provided further that an ISO granted to a
Ten Percent Share Owner shall be granted for a period no longer than five (5) years from the Date
of Grant.

(c) Vesting and Time of Exercise. Each ISO and/or NQSO shall vest twenty-five percent
(25%) each year for four consecutive years on the anniversary of the Date of Grant. The
Optionee cannot exercise an Option and thus acquire the Common Shares subject thereto until
the right to exercise has vested.

 

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(d) Exercise.

	 	(i)	 	An ISO or NQSO, or any portion thereof, shall be exercised by
delivery of a written notice of exercise to the Company and payment of the full
price of the shares being acquired pursuant to such exercise. Until the Common
Shares of Common Stock subject to an ISO or NQSO are issued to an Optionee, he
or she shall have none of the rights of a stockholder as they relate to such
 shares;

	 
	 	(ii)	 	Unless the shares to be purchased under an ISO or NQSO are
covered by a then current registration statement under the Securities Act of
1933, as amended (“Securities Act”), each written notice of exercise shall
contain the Optionee’s acknowledgment in such form and substance satisfactory
to the Company that:

	 
	 	 	 	(A) such shares are being purchased for investment and not distribution or
resale (other than a distribution or resale which in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Securities Act)., and

	 
	 	 	 	(B) the Optionee has been advised and understands that the shares purchased
pursuant to such ISO or NQSO have not been registered under the Act, are
“restricted securities” within the meaning of Rule 144 under the Securities
Act and are subject to restrictions on transfer, and that the Company is
under no obligation to register the shares purchased pursuant
to an ISO or NQSO under the Securities Act or to take any action which would
make available to the Optionee any exemption from such registration.

 

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(e) Payment. The Option Price for each ISO and/or NQSO shall be payable (a) in cash
or by check acceptable to the Company, (b) by transfer to the Company of Common Shares which have
been owned by the Optionee for more than one year prior to the date of exercise and which have a
Market Value on the date of exercise equal to the Option Price, or (c) by a combination of such
methods of payment.

(f) Termination of Service.

	 	(i)	 	If an Optionee’s employment agreement or contract to provide
services to the Company (“Service Agreement”) with the Company is terminated by
reason of death all vested Options shall be exercisable for one (1) year after
the date of death by the legal beneficiary of the employee at the date of
death.

	 
	 	(ii)	 	If an Optionee’s employment or Service Agreement is terminated
by reason of Disability the Individual shall be entitled to exercise all vested
Options for one (1) year after the date of disability.

	 
	 	(iii)	 	If Optionee’s employment or Service Agreement with the Company
is terminated voluntarily or involuntarily, for any reason other than death or
Disability provided above, the Optionee shall be entitled to exercise all
Options which are vested on the date of termination for a period of one (1)
month after such date of termination.

 

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	 	(iv)	 	All Options not exercised during the periods prescribed in this
Section 6(f) (i), (ii) and (iii) shall terminate. Unvested Options shall
terminate immediately upon termination of employment or a Service Agreement of
the Optionee by the Company for any reason whatsoever, including death or
disability.

7. ADJUSTMENTS. The Committee shall make or provide for such adjustments in the number of
Common Shares covered by Option Rights granted hereunder, the Option Prices per Common Share
applicable to any such Option Rights, and the kind of shares (including shares of another issuer)
covered thereby, as the Committee shall in good faith determine to be equitably required in order
to prevent dilution or expansion of the rights of Optionees that otherwise would result from (a)
any stock dividend, stock split, combination of shares, re-capitalization or other change in the
capital structure of the Company, or (b) the merger, consolidation, spin-off, spin-out, split-off,
split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance
of warrants or other rights to purchase securities or any other corporate transaction or event
having an effect similar to any of the foregoing. The Committee shall also make or provide for
such adjustments in the maximum number of Common Shares specified in Section 4(a) of this Plan as
the Committee may in good faith determine to be appropriate in order to reflect any transaction or
event described in this Section 6.

8. FRACTIONAL SHARES. The Company shall not be required to issue any fractional Common
Shares pursuant to this Plan. Whenever under the terms of this Plan a fractional Common Share
would otherwise be required to be issued, an amount in lieu thereof shall be paid in cash based
upon the Market Value of such fractional Common Share.

 

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9. ADMINISTRATION. (a) The Plan shall be administered by the Committee. The Committee
shall be vested with full authority to make such rules and regulations as it deems necessary or
desirable to administer the Plan and to interpret the provisions of the Plan, unless otherwise
determined by the Board. Accordingly, the Committee shall have full power to grant ISOs and NQSOs,
to delegate administrative responsibilities and to perform all other acts it believes to be
reasonable and proper.

(b) Subject to the provisions of the Plan, the determination of those eligible to receive ISOs
and/or NQSOs, and the amount, type and timing of each ISO and NQSO and the terms and conditions of
the respective Option Documents shall rest in the sole discretion of the Committee.

(c) The Committee may from time to time be required to interpret the provisions of the Plan.
The Committee may at its discretion, correct any defect, supply any omission or reconcile any
inconsistency in the Plan, or in any granted ISO or NQSO, in the manner and to the extent necessary
to carry the Plan into effect.

(d) Any decision made, or action taken, by the Committee arising out of or in connection with
the interpretation and administration of the Plan shall be final and conclusive and binding on all
participants in this Plan and on their legal representatives, heirs and beneficiaries, unless
otherwise determined by the Board.

 

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10. CHANGE IN CONTROL. Upon a Change in Control (as hereinafter defined), all Option
Rights held by an Optionee with respect to the Optionees service shall, notwithstanding Sections
6(d) and 6(f) of this Plan, become immediately exercisable in full. If any event or series of
events constituting a Change in Control shall be abandoned, the effect thereof shall be null and of
no further force and effect and the provisions of Sections 6(d) and 6(f) shall be reinstated but
without prejudice to any exercise of any Option Right that may have occurred prior to such
nullification. For purposes of this Plan, “Change in Control” means the occurrence of any of the
following events:

(a) The Company is merged, consolidated or reorganized into or with another corporation or
legal person, and as a result of such merger, consolidation or reorganization less than a majority
of the combined voting power of the then outstanding securities of such corporation or person
immediately after such transfer are held in the aggregate by the holders of securities entitled to
vote generally in the election of directors of the Company (“Voting Stock”) immediately prior to
such transaction;

(b) The Company sells or otherwise transfers all or substantially all of its assets to another
corporation or other legal person, and as the result of such sale or transfer less than a majority
of the combined voting power of the then outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the holders of Voting Stock of
the company immediately prior to such sale or transfer.

(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form
or report), each as promulgated pursuant to the Exchange Act disclosing that any person (as the
term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than Joel
E. Bernstein or any of his affiliates has or intends to become beneficial owner (as the term
“beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of securities representing more than twenty percent (20%) of the Voting
Stock.

 

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(d) If, during any period of two consecutive years, individuals who at the beginning of any
such period constitute the Directors of the Company cease for any reason to constitute at least a
majority thereof; provided, however, that for purposes of this subsection (d) each
Director
who is first elected, or first nominated for election by the Company’s stockholders, by a vote
of at least two-thirds of the Directors of the Company (or a committee thereof) then still in
office who were Directors of the Company at the beginning of any such period shall be deemed to
have been a Director of the Company at the beginning of such period.

Notwithstanding the foregoing, to the extent necessary for an Option Right, its exercise or
the sale of Common Shares acquired thereunder to be exempt from section 16(b) of the Exchange Act
(i) except in the case of death or Disability, an Optionee shall not be entitled to exercise any
Option Rights granted wit h six months prior to the occurrence of a Change in Control until the
expiration of the six-month period following the Date of Grant of such Option Rights, or (ii) at
least six months shall elapse from the Date of Grant of such Option Rights to the date of
disposition of the Common Shares acquired upon exercise of such Option Rights.

11. LISTING AND REGISTRATION OF SHARES.

(a) No ISO or NQSO granted pursuant to the Plan shall be exercisable in whole or in part if at
any time the Board shall determine in its discretion that the listing, registration or
qualification of the shares of Common Stock subject to such ISO or NQSO on any securities exchange
or under any applicable law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of such ISO or NQSO
or the issue of shares thereunder, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not acceptable to the Board.

 

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(b) If a registration statement under the Securities Act with respect to the shares issuable
upon exercise of any ISO or NQSO granted under the Plan is not in effect at the time of exercise,
as a condition of the issuance of the shares, the person exercising such ISO or NQSO
shall give the Committee a written statement, satisfactory in form and substance to the
Committee, that such person is acquiring the shares for such person’s own account for investment
and not with a view to distribution. The Company may place upon any stock certificate for shares
issuable upon exercise of such ISO or NQSO the following legend or such other legend as the
Committee may prescribe to prevent disposition of the shares in violation of the Act or other
applicable law:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (“ACT”) AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
TO THEM UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR THE
COMPANY THAT REGISTRATION IS NOT REQUIRED.

12. AMENDMENT AND TERMINATION OF PLAN.

(a) The Board, without further approval of the stockholders, may at any time, and from time to
time, suspend or terminate the Plan, in whole or in part, or amend it from time to time, in such
respects as the Board may deem appropriate and in the best interests of the Company; provided,
however, that no such amendment shall be made, that would, without approval of the majority of the
stockholders:

	 	(i)	 	materially increase the benefits accruing to an Optionee under
the Plan;

	 
	 	(ii)	 	except as is provided for in accordance with Section 7 under
the Plan, materially increase the number of shares of Common Stock that may be
issued under the Plan;

	 
	 	(iii)	 	materially modify the requirements as to eligibility for
participation in the Plan;

	 
	 	(iv)	 	reduce the minimum Option Price per share;

 

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	 	(v)	 	extend the period of granting ISOs; or

	 
	 	(vi)	 	otherwise require the approval of shareholders in order to
maintain the exemption available under Rule 16b-3 (or any similar rule) under
the Securities Exchange Act of 1934.

(b) No amendment, suspension or termination of this Plan shall in any manner affect any ISO or
NQSO heretofore granted under Plan, without the consent of the Optionee or any person or entity
validly claiming under or through the Optionee.

(c) The Board may amend the Plan, subject to the limitations cited above, in such manner that
it deems necessary to permit the granting of ISOs meeting the requirements of future amendments or
issued regulations, if any, to the Code.

13. MISCELLANEOUS PROVISIONS.

(a) No Right to Continued Employment. No person shall have any claim or right to be granted
an ISO or NQSO under the Plan, and neither the grant of an ISO nor an NQSO hereunder shall be
construed as giving an Optionee the right to be retained in the employ of the Company. Further,
the Company expressly reserves the right at any time to dismiss an Optionee with or without cause,
free from any liability, or any claim under the Plan, except as specifically provided under the
Plan or in an ISO or NQSO granted prior to the termination of employment which right to exercise
such ISO or NQSO, if any, shall be limited in accordance with the terms of the Plan and the
applicable Option Documents.

(b) Government and Other Regulations. The obligation of the Company to issue, or transfer and
deliver Common Shares to Optionees pursuant to the exercise of ISOs or NQSOs granted under the Plan
shall be subject to all applicable laws, regulations, rules, orders and
approval that shall then be in effect and required by governmental entities and securities
exchanges or automated quotation systems, if any, on which the Common Shares are traded.

 

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(c) Tax Withholding. The Company shall have the power to withhold, or require an Optionee or
other person or entity receiving Common Shares under the Plan to remit to the Company, an amount
sufficient to satisfy federal, state, and local withholding tax requirements on any Common Stock
issued under the Plan, and the Company may defer issuance of Common Stock until such requirements
are satisfied.

(d) Rule 16b-3 Compliance. The Company intends that the Plan comply in all respects with Rule
16b-3 under the Securities and Exchange Act, as amended, and any ambiguities or inconsistencies in
the construction of the Plan shall be interpreted to give effect to such intention.

(e) Non-transferability. No right or interest, or any part thereof, in any ISO or NQSO may be
sold, pledged, assigned, transferred or disposed in any manner other than by will or the laws of
descent and distribution, and during an Optionee’s lifetime shall only be exercisable by such
Optionee.

(f) Plan Expenses. Any expenses of administering the Plan shall be borne by the Company.

(g) Use of Exercise Proceeds. The payment received from Optionees from the exercise of ISOs
and NQSOs under the Plan shall be used for the general corporate purposes of the Company.

(h) Construction of Plan. The validity, construction, interpretation, administration and
effect of the Plan and its rules and regulations, and rights relating to the Plan shall be
determined solely in accordance with the laws of the State of Delaware, when otherwise
governed by applicable federal law.

 

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(i) Interpretation. As may be appropriate pronouns used in the Plan shall be read and
construed to the masculine, feminine or neuter. Likewise, words in the singular shall be read and
construed to refer to the plural.

(j) Indemnification. In addition to such rights of indemnification as they may have as
members of the Board or the Committee, and only to the extent that costs and expenses are not
recovered under an insurance contract protecting them with respect to any legal action described in
this Section 13(j), the members of the Committee shall be indemnified by the Company against all
costs and expenses reasonably incurred by them in connection with any action, suit or proceeding 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 ISO 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 in any such action, suit or proceeding,
except a judgment based upon a finding of gross negligence, recklessness, fraudulent or criminal
acts, willful misconduct or bad faith. In any action, suit or proceeding of gross negligence,
recklessness, fraudulent or criminal acts, willful misconduct or bad faith by a Committee member(s)
such member(s) shall upon institution of any such action, suit, or proceeding shall, in writing,
give the Company notice thereof and an opportunity, at its own expense, to handle and defend such
action before such Committee member undertakes to handle and defend it on his/her own behalf.

 

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14. TERMINATION OF THE PLAN. No further awards shall be granted under this Plan after the
passage of ten years from the date on which this Plan is first approved by the stockholders of the
Company.

15. EFFECTIVE DATE. The effective date of this Plan (the “Effective Date”) shall be May 1,
1999, subject to approval of the Plan by the Company’s stockholders at the Company’s 1999 Annual
Meeting of Stockholders.

 

15Filed by Bowne Pure Compliance

EXHIBIT
10.11

WINSTON LABORATORIES, INC.

Stock Option Plan for Non-Employee Directors

1. PURPOSE. The pm-poses of this Plan are to encourage Non-Employee Directors of Winston
Laboratories, Inc., a Delaware Corporation, (the “Company”), to own shares of the Company’s stock
and thereby to align their interests more closely with the interests of the other stockholders of
the Company, to encourage the highest level of director performance by providing the Non-Employee
Directors with a direct interest in the Company’s attainment of its financial goals, and to provide
financial incentives that will help attract and retain the most qualified Directors.

2. DEFINITIONS. As used in this Plan:

“Annual Option” means an Option Right granted to a Director pursuant to Section 5 of this
Plan.

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

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

“Committee” means the Compensation Committee of the Winston Laboratories, Inc. Board of
Directors.

“Common Shares” means (i) shares of the common stock, $.001 par value, of the Company and (ii)
any security into which Common Shares may be converted by reason of any transaction or event of the
type referred to in Section 6 of this Plan.

“Date of Grant” means the date on which a grant of Initial Options or Annual Options, as the
case may be, shall become effective as provided in Sections 4(a) and Section 5(a), respectively.

 

 

 

“Disability” means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death
or which has lasted or can be expected to last for a continuous period of not less than 12 months.
A Non-Employee Director shall not be considered to be subject to a Disability until he furnishes a
certification from a practicing physician in good standing to the effect that such Director meets
the criteria described in this Section.

“Effective Date” has the meaning set forth in Section 14.

“Initial Option” means the Option Right granted to a Non-Employee Director pursuant to Section
4 of this Plan.

“Market Value” shall mean, as of any particular date, (i) the closing sale price per Common
Share as reported on the principal exchange on which Common Shares are then trading, if any, or if
applicable, the Nasdaq National Market or other principal automated quotation system, on the Date
of Grant, or if there are no sales on such day, on the next preceding trading day during which a
sale occurred, or (ii) if clause (i) does not apply, the fair market value of the Common Shares as
determined by the Board.

“Non-Employee Director” means a member of the Board who is not an employee of the Company.
For purposes of this Plan, an employee is an individual whose wages are subject to the withholding
of federal income tax under Section 3401 and 3402 of the Code. A Non-Employee Director who becomes
an employee (within the meaning of this Section) shall not forfeit any Option Right granted
hereunder solely by reason of assuming employee status.

“Optionee” means the Non-Employee Director so designated in an agreement evidencing an
outstanding Option Right.

“Option Price” means the purchase price payable upon the exercise of an Option Right.

 

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“Option Right” means the right to purchase Common Shares from the Company upon the exercise of
an Initial Option or an Annual Option granted pursuant to this Plan. Option Rights shall be
evidenced by written agreements containing terms and conditions not inconsistent with this Plan.

“Plan” means the Winston Laboratories, Inc. Stock Option Plan for Non-Employee Directors, as
the same may be amended from time to time.

“Rule 16b-3” means Rule 16b-3, as promulgated and amended from time to time by the Securities
and Exchange Commission under the Exchange Act.

“Termination of Service” means the time at which the Optionee ceases to serve as a member of
the Board for any reason, with or without cause, which includes termination by resignation,
removal, death or retirement.

“Voting Stock” has the meaning set forth in Section 12(a).

3. SHARES AVAILABLE UNDER THE PLAN.

(a) Subject to Section 3(b) the number of Common Shares issued or transferred, plus the number
of Common Shares covered by outstanding awards granted under this Plan, shall not in the aggregate
exceed 100,000 Common Shares, which may be Common Shares held in treasury or a combination thereof.

(b) For the purposes of this Section 3, any Common Shares subject to an Option Right that has
been cancelled or terminated shall again be available for the grant of Option Rights under this
Plan.

4. INITIAL OPTIONS.

(a) With respect to each person who is appointed or elected a Non-Employee Director of the
Company on or after the Effective Date of this Plan, an option to purchase 5,000 Common
Shares shall be automatically granted as of the Effective Date of this Plan or as of the date
such person is first appointed or elected a director, whichever comes later.

 

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(b) The Option Price per share of each Initial Option shall be the Market Value per Common
Share as of the Date of Grant.

	 	(c)   	(i) 	Subject to subsection (ii) of this Section 4(c) and Section 12 of this
Plan, each Initial Option, until terminated as provided in Section 4(d), shall become
exercisable to the extent of 100% of the Common Shares subject thereto after the
Optionee has continuously served as a director for one year from the Date of Grant.

	 	(ii)	 	If an Optionee ceases to be a director by reason of death or
Disability, all Initial Options held by such Optionee that would have otherwise
become exercisable had such director continuously served as a director for one
year through the Date of Grant immediately following such death or Disability,
notwithstanding subsection (i) of this Section 4(c), become immediately
exercisable in full.

(d) Each Initial Option shall terminate on the earliest of the following dates:

	 	(i)	 	Six (6) months following the effective date of the Optionee’s
‘Termination of Service, if such Termination of Service results other than from
the Optionee’s death or Disability;
	 
	 	(ii)	 	One (1) year following the effective date of the Optionee’s
Termination of Service, if such Termination of Service results from Optionee’s
death or Disability; or
	 
	 	(iii)	 	Ten (10) years from the Date of Grant.

 

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(e) The Option Price shall be payable (i) in cash or by check acceptable to the Company, (ii)
by transfer to the Company of Common Shares which have been owned by the Optionee for more than six
months prior to the date of exercise and which have a Market Value on the date of exercise equal to
the Option Price, or (iii) by a combination of such methods of payment.

(f) Initial Options granted pursuant to this Section 4 shall be options that are not intended
to qualify under any particular provision of the Code.

5. ANNUAL OPTION.

(a) Each Non-Employee Director, one year from the Effective Date of the Plan or one year from
the Non-Employee Director’s date of initial appointment, whichever comes later, shall be
automatically granted an Option to purchase 2,500 Common Shares, and annually thereafter will
automatically be granted an Option to purchase 2,500 Common Shares.

(b) The Option Price per share of each Annual Option shall be the Market Value per Common
Share as of the Date of Grant.

	 	(c)   	(i) 	Subject to subsection (ii) of this Section 5(c) and Section 12 of the Plan,
each Annual Option until terminated as provided in Section 5(d), shall become
exercisable to the extent of 50% of the Common Shares subject thereto after the
Optionee has continuously served as a director for one year from the Date of Grant, and
to the extent of an additional 50% of the Common Shares subject to the Annual Option
after the second year of continuous service from the Date of Grant.

 

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	 	(ii)	 	If an Optionee ceases to be a director by reason of death or
Disability, all Annual Options held by such Optionee that would have otherwise
become
exercisable had such Director continuously served as a director through the
Date of Grant immediately following such death or Disability shall,
notwithstanding subsection (i) of the Section 5(d), become immediately
exercisable in full,

(d) Each Annual Option shall terminate on the earliest of the following dates:

	 	(i)	 	Six (6) months following the effective date of the Optionee’s
Termination of Service, if such Termination of Service results other than from
Optionee’s death or Disability;
	 
	 	(ii)	 	One (1) year following the effective date of the Optionee’s
Termination of Service, if such Termination of Service results from Optionee’s
death or Disability; or
	 
	 	(iii)	 	Ten (10) years from Date of Grant.

(e) The Option Price shall be payable in cash or by check acceptable to the Company.

6. ADJUSTMENTS. The Committee shall make or provide for such adjustments in the number of
Common Shares covered by Option Rights granted hereunder, the Option Prices per Common Share
applicable to any such Option Rights, and the kind of shares (including shares of another issuer)
covered thereby, as the Committee shall in good faith determine to be equitably required in order
to prevent dilution or expansion of the rights of Optionees that otherwise would result from (a)
any stock dividend, stock split, combination of shares, re-capitalization or other change in the
capital structure of the Company, or (b) the merger, consolidation, spin-off, spin-out, split-off,
split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance
of warrants or other rights to purchase securities or any other corporate transaction or event
having an effect similar to any of the foregoing. The Committee shall also
make or provide for such adjustments in the maximum number of Common Shares specified in Section
3(a) of this Plan as the Committee may in good faith determine to be appropriate in order to
reflect any transaction or event described in this Section 6.

 

6

 

7. FRACTIONAL SHARES. The Company shall not be required to issue any fractional Common
Shares pursuant to this Plan. Whenever under the terms of this Plan a fractional Common Share
would otherwise be required to be issued, an amount in lieu thereof shall be paid in cash based
upon the Market Value of such fractional Common Share.

8. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the Committee.
Notwithstanding the foregoing, grants of Option Rights under this Plan shall be automatic as
described in Sections 4 and 5, and the Committee shall have no authority, discretion or power to
determine the terms of the Option Rights to be granted pursuant to the Plan, the number of Common
Shares to be issued thereunder or the time at which such Options Rights are to be granted, or
establish the duration and nature of Option Rights, except in the sense of administering the Plan
subject to the provisions of the Plan.

(b) Subject to subsection (a) of this Section 8, the interpretation and construction by the
Committee of any provision of this Plan or any agreement, notification or document evidencing the
grant of Option Rights, and any determination by the Committee pursuant to any provision of this
Plan or any such agreement, notification or document shall be final and conclusive. No member of
the Committee shall be liable for any such action taken or determination made in good faith.

 

7

 

9. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be terminated, and from time to time
amended, by the Board; provided, however, that except as expressly authorized by this Plan, no such
amendment shall (i) increase the number of Common Shares
specified in Section 3(a) hereof, materially modify the requirements as to eligibility for
participation in this Plan, or otherwise cause this Plan or any grant, award or election made
pursuant to this Plan to cease to satisfy any applicable condition of rule 16b-3; provided further
that Plan provisions relating to the amount and price of securities to be awarded and the timing of
awards under the Plan shall not be amended more than once every six months, other than to comply
with changes in the Code, the Employment Retirement Income Security Act, or the rules promulgated
thereunder. No amendment or termination of the Plan shall adversely affect any outstanding award
theretofore granted under the Plan without the consent of the Director holding such award.

(b) Any grant, award or election that may be made pursuant to an amendment to this Plan shall
be null and void if it is subsequently determined that (1) stockholder approval of such amendment
was required in order for this Plan to continue to satisfy the applicable conditions of Rule 16b-3,
or (ii) such grant, award, election or amendment disqualified any Optionee as a “disinterested
person” within the meaning of Rule 16b-3.

10. NO ADDITIONAL RIGHTS. Nothing contained in this Plan or in any award granted under
this Plan shall interfere with or limit in any way the right of the stockholders of the Company to
remove any Director from the Board pursuant to state law or the Bylaws or Certificate of
Incorporation of the Company, nor confer upon any Director any right to continue in the service of
the Company.

 

8

 

11. SECURITIES LAW MATTERS. (a) The Company may require any Optionee, as a condition of
receiving Option Rights, to give written assurances in substance and form satisfactory to the
Company and its counsel to the effect that such person is acquiring the Common Shares subject to
the Option Rights for his own account for investment and not with
any present intention of selling or otherwise distributing the same, and to such other effects as
the Company deems necessary or appropriate in order to comply with federal and applicable state
securities laws.

(b) Each award of Option Rights shall be subject to the requirement that, if at any time
counsel to the Company shall determine that the listing, registration or qualification of the
Common Shares subject to such Option Rights upon any securities exchange or. automated quotation
system or under any state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of, or in connection with, the issuance of shares
thereunder, such award of Option Rights may not be accepted or exercised in whole or in part unless
such listing, registration, qualification, consent or. approval shall have been effected or
obtained on conditions acceptable to such counsel. Nothing herein shall be deemed to require the
Company to apply for or to obtain such listing, registration or qualification.

(c) To the extent necessary for an Option Right, its exercise or the sale of Common Shares
acquired thereunder to be exempt from Section 16(b) of the Exchange Act, such Option Right shall be
held six months from the Date of Grant, or at least six months shall elapse from the Date of Grant
to the date of disposition of the Common Shares acquired upon exercise of such Option Right.

 

9

 

12. CHANGE IN CONTROL. Upon a Change in Control (as hereinafter defined), all Option
Rights held by an Optionee with respect to the Optionee’s service as a director shall,
notwithstanding Sections 4(c) and 5(c) of this Plan, become immediately exercisable in full. If
any event or series of events constituting a Change in Control shall be abandoned, the effect
thereof shall be null and of no further force and effect and the provisions of Sections 4(c) and
5(c) shall be reinstated but without prejudice to any exercise of any Option Right that may have
occurred prior to such nullification. For purposes of this Plan, “Change in Control” means the
occurrence of any of the following events:

(a) The Company is merged, consolidated or reorganized into or with another corporation or
legal person, and as a result of such merger, consolidation or reorganization less than a majority
of the combined voting power of the then outstanding securities of such corporation or person
immediately after such transfer are held in the aggregate by the holders of securities entitled to
vote generally in the election of directors of the Company (“Voting Stock”) immediately prior to
such transaction;

(b) The Company sells or otherwise transfers all or substantially all of its assets to another
corporation or other legal person, and as the result of such sale or transfer less than a majority
of the combined voting power of the then outstanding securities of such corporation or person
immediately after such sale or transfer is held in. the aggregate by the holders of Voting Stock
of the company immediately prior to such sale or transfer.

(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form
or report), each as promulgated pursuant to the Exchange Act disclosing that any person (as the
term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than Joel
E. Bernstein or any of his affiliates has or intends to become the beneficial owner (as the term
“beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of securities representing more than twenty percent (2Q%) of the Voting
Stock.

 

10

 

(d) If, during any period of two consecutive years, individuals who at the beginning of my
such period constitute the Directors of the Company cease for any reason to constitute at
least a majority thereof; provided, however, that for purposes of this subsection (d) each
Director who is first elected, or first nominated for election by the Company’s stockholders, by a
vote of at least two-thirds of the Directors of the Company (or a committee thereof) then still in
office who were Directors of the Company at the beginning of any such period shall be deemed to
have been a Director of the Company at the beginning of such period.

Notwithstanding the foregoing, to the extent necessary for an Option Right, its exercise or
the sale of Common Shares acquired thereunder to be exempt from section 16(b) of the Exchange Act
(i) except in the case of death or Disability, an Optionee shall not be entitled to exercise any
Option Rights granted within six months prior to the occurrence of a Change in Control until the
expiration of the six-month period following the Date of Grant of such Option Rights, or (ii) at
least six months shall elapse from the Date of Grant of such Option Rights to the date of
disposition of the Common Shares acquired upon exercise of such Option Rights.

13. TERMINATION OF THE PLAN. No further awards shall be granted under this Plan after the
passage of ten years from the date on which this Plan is first approved by the stockholders of the
Company.

14. EFFECTIVE DATE. The effective date of this Plan (the “Effective Date”) shall be
February 1, 1999, subject to approval by the Company’s stockholders at the 1999 Annual Meeting of
Stockholders.

 

11

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