Document:

EXHIBIT 10

EXHIBIT 10.2

ASHER PRELIMINARY PERMIT

The pages which follow are free translations from the Hebrew of the documents setting forth the granting of Preliminary Permit No. 185/ "Asher".

Document A: Cover letter dated August 1, 2005 from the Minister of National Infrastructures granting the Preliminary Permit.  

Document B: Original Preliminary Permit No. 185/ "Asher", granted on August 1, 2005, including First Annex (Description of the Area) and Second Annex (Special Conditions).

Document C:  Letter dated May 16, 2006 from the Petroleum Commissioner approving changes to the work program.

[DOCUMENT A]

MINISTRY OF NATIONAL INFRASTRUCTURES

25 Nissan 5765

1 August 2005

Petroleum 2005-190

Mr. E. Roih

Zion Oil & Gas, Inc.

9 Yair Stern St.

Herzelia 46412

 

Dear Sir,

Re:Preliminary Permit 185/ "Asher"

Please be informed that pursuant to the authority vested in me under Section 7A of the Petroleum Law, 5712-1952, and following consultation with the Petroleum Commission in accordance with the said law, I have decided to grant to

"Zion Oil & Gas" - 100%

a Priority Right to receive Petroleum Rights in the area subject of Preliminary Permit 185/"Asher".

The estimated cost for executing the required activities mentioned in the Second Annex is $325,000.

 

The Priority Right to receive Petroleum Rights is conditioned on the fulfillment of all conditions of the Preliminary Permit.

The validity of the Priority Right shall lapse upon the termination of the Preliminary Permit.

 

Sincerely, 

/s/ -

Binyamin (Fuad) Ben Eliezer

Minister of National Infrastructures 

 

Copy: Dr. Yaacov Mimram, Commissioner of Petroleum Affairs

[DOCUMENT B]

STATE OF ISRAEL

Petroleum Law, 5712 - 1952 

Preliminary Permit No. 185/ "Asher"

Preliminary Permit 

 

 

 

There is hereby granted to -

Zion Oil & Gas, Inc. 100%

A PRELIMINARY PERMITTo conduct preliminary investigations,

including geological and geophysical 

activities, for the purpose of evaluating the

potential to discover petroleum on the area

described in the First Annex which is an 

integral part of this Preliminary Permit.

THIS PRELIMINARY PERMITIs granted subject to the provisions of the

Petroleum Law, 5712-1952, and to the 

Regulations issued thereunder, and to the 

Special Conditions set forth in the Second

Annex which is an integral part of this

Preliminary Permit.

 

 

 

The validity of this Preliminary Permit shall be terminated on 12 Shvat 5767

31 January 2007

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2005

 

 

 

 
/s/ (-)

          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs

STATE OF ISRAEL

Petroleum Law, 5712 - 1952 

Preliminary Permit No. 185/ "Asher"

F I R S T     A N N E X 

DESCRIPTION OF THE AREA:

 

 

 

From Map point 196.00/740.00 thence East 

To Map point200.00/740.00 thence South East 

To Map point218.00/715.00 thence West

To Map point213.00/715.00 thence South West 

To Map point210.00/712.00 thence West 

To Map point208.00/712.00 thence South West 

To Map point204.00/711.00 thence West 

To Map point194.40/711.00 thence South West 
  To Map point                      188.50/704.00 thence North East along  

                                                                            the cost of the Mediterranean 

                                                                            Sea, back 

To Map point196.00/740.00 

Total area is 490,000 Dunam (490.0 km2)

The coordinates are based on the new Israeli Grid

 

 

It is specifically declared hereby that the boundaries of the Permit Area are as set forth in the above description, notwithstanding any apparent changes from the boundaries set forth in the maps submitted by the recipient of the Preliminary Permit.

 

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2205

 
/s/ (-)

          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs

STATE OF ISRAEL

Petroleum Law, 5712 - 1952 

Preliminary Permit No. 185/ "Asher"

S E C O N D     A N N E X 

SPECIAL CONDITIONS:

 

 

 

During the term of the Permit, the Company shall execute the following work plan:

	Not later than May 1, 2006, reprocessing of existing seismic lines, geologic and geochemical data and preparation of a regional geological report regarding the Triassic.

	 Not later than May 1, 2006, submission of a Prospect and application for grant of License or release of the area or an undertaking to acquire new seismic lines.

	Not later than November 1, 2006, acquisition of 20 km of new seismic lines, interpretation and processing thereof and submission of a summation report.

	Not later than January 31, 2007, submission of Prospect for drilling in the Permit area.

	At the end of every stage, the findings and their summations are to be submitted to the Commissioner of Petroleum Affairs.

	Toward the end of the Permit period, a report of the activities performed in the area and their findings shall be submitted, in two copies. In the report the following matters shall be detailed:

	Evaluation of the prospectivity of the various plays.

	Structural maps (time and depth) and isopatch maps of the key Mesozoic and Cenozoic horizons.

	Seismic attribute maps in the appropriate contexts, if conducted.

	Paleographic maps of the strategic intervals constituting the various plays.

	Evaluation of petroleum potential and hydrocarbon migration paths.

 

	 The final reports shall also include a description of all the activities performed in the Permit area. There shall be appended to the reports the following details (to the extent that they have not been previously submitted in quarterly reports or further to clause 5 above):

All the geophysical material, including copies of the magnetic field tapes etc., the documentary material accompanying the field tapes, as surveyors' reports, operators' reports, location maps, results of processing of new seismic lines and the reprocessing of the old seismic lines. The relevant material shall be submitted both on magnetic tapes and on semi-originals of the Mylan type.

	The Permit owner shall coordinate the entrance of boating vessels, required for its activity with the State of Israel defense and security authorities 

No original geophysical material, as magnetic tapes etc., shall be exported from Israel, but rather copies only.

Failure to comply with these conditions will result in immediate cancellation of the Permit from the date of the failure to comply with the conditions.

 

Granted in Jerusalem, on 25 Tamuz 5765

1 August 2005

 
/s/ (-)

          Dr. Yaacov Mimran

Commissioner of Petroleum Affairs

 

[DOCUMENT C]

STATE OF ISRAEL

MINISTRY OF NATIONAL INFRASTRUCTURES

NATURAL RESOURCES LICENSING ADMINISTRATION

 

 

Petroleum Unit

18 Iyar 5766

16 May 2006

Pet 2006-98

Mr. Glen Perry, Vice President

Zion Oil, Inc.

15 Bareket St., Industrial Park North

Caesarea 38900

 

Dear Sir,

Re:Preliminary Permit 185/"Asher" - Change in Work Program

Your letter of 9.5.06

In response to the requests in your referenced letter, I hereby approve changes in the work program as follows:

1.Paragraphs 2 and 3 in the original program are cancelled.

2.The new paragraph 2 shall read: collection and interpretation of existing seismic lines, geophysical and geochemical information, preparation of regional and local maps - by August 1, 2006.

3.Paragraph 3 - submission of a program for the acquisition of approximately 20 km of new seismic lines - by November 1, 2006.

4.Paragraph 4 shall remain as is, i.e. the submission of a drilling prospect - by January 31, 2007.

 

Sincerely,

/s/ _

Dr. Ya'acov Mimran

Petroleum CommissionerExhibit
      10.10

    STRATEGIC
      DEFENSE ALLIANCE CORP.

     

    2006
      Long-Term Incentive Plan

     

    1. Purpose;
      Definitions.

     

    The
      purpose of the Strategic Defense Alliance Corp. 2006 Long-Term Incentive Plan
      (the “Plan”) is to enable Strategic Defense Alliance Corp. (the “Company”) to
      attract, retain and reward key employees of the Company and its Subsidiaries
      and
      Affiliates, and others who provide services to the Company and its Subsidiaries
      and Affiliates, and strengthen the mutuality of interests between such key
      employees and such other persons and the Company’s stockholders, by offering
      such key employees and such other persons incentives and/or other equity
      interests or equity-based incentives in the Company, as well as
      performance-based incentives payable in cash.

     

    For
      purposes of the Plan, the following terms shall be defined as set forth
      below:

     

    (a) “Affiliate”
      means any corporation, partnership, limited liability company, joint venture
      or
      other entity, other than the Company and its Subsidiaries, that is designated
      by
      the Board as a participating employer under the Plan, provided that the Company
      directly or indirectly owns at least 20% of the combined voting power of all
      classes of stock of such entity or at least 20% of the ownership interests
      in
      such entity.

     

    (b) “Board”
      means the Board of Directors of the Company.

     

    (c) “Book
      Value” means, as of any given date, on a per share basis (i) the stockholders’
equity in the Company as of the last day of the immediately preceding fiscal
      year as reflected in the Company’s consolidated balance sheet, subject to such
      adjustments as the Committee shall specify at or after grant, divided by (ii)
      the number of then outstanding shares of Stock as of such year-end date, as
      adjusted by the Committee for subsequent events.

     

    (d) “Cause”
      means a felony conviction of a participant, or the failure of a participant
      to
      contest prosecution for a felony, or a participant’s willful misconduct or
      dishonesty, or breach of trust or other action by which the participant obtains
      personal gain at the expense of or to the detriment of the Company or conduct
      which results in civil or criminal liability or penalties, including penalties
      pursuant to a consent decree, order or agreement, on the part of the Company;
      provided, however, that if the participant has an Employment Agreement with
      the
      Company, a Subsidiary or Affiliate which includes a definition of “cause,” then
“cause” shall have the meaning as defined in such Employment
      Agreement.

     

    (e) “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, and
      any
      successor thereto.

     

    (f) “Commission”
      means the Securities and Exchange Commission or any successor
      thereto.

     

    (g) “Committee”
      means the Committee referred to in Section 2 of the Plan. If at any time no
      Committee shall be in office, then the functions of the Committee specified
      in
      the Plan shall be exercised by the Board.

     

    (h) “Company”
      means Strategic Defense Alliance Corp., a Delaware corporation, or any successor
      corporation.

     

    (i) “Deferred
      Stock” means an award made pursuant to Section 8 of the Plan of the right to
      receive Stock at the end of a specified deferral period.

     

    (j) “Disability”
      means disability as determined under procedures established by the Committee
      for
      purposes of the Plan; provided that if the participant has an Employment
      Agreement with the Company, a Subsidiary or Affiliate which includes a
      definition of “disability,” then “disability” shall have the meaning as defined
      in such Employment Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (k) “Early
      Retirement” means retirement, with the express consent for purposes of the Plan
      of the Company at or before the time of such retirement, from active employment
      with the Company and any Subsidiary or Affiliate pursuant to the early
      retirement provisions of the applicable pension plan of such
      entity.

     

    (l) “Employment
      Agreement” shall mean an employment or consulting agreement or other agreement
      pursuant to which the participant performs services for the Company or a
      Subsidiary or Affiliate. 

     

    (m) “Exchange
      Act” means the Securities Exchange Act of 1934, as amended, from time to time,
      and any successor thereto.

     

    (n) “Fair
      Market Value” means, as of any given date, the market price of the Stock as
      determined by or in accordance with the policies established by the Committee
      in
      good faith; provided, that, in the case of an Incentive Stock Option, the Fair
      Market Value shall be determined in accordance with the Code and the Treasury
      regulations under the Code.

     

    (o) “Incentive
      Stock Option” means any Stock Option intended to be and designated as an
“Incentive Stock Option” within the meaning of Section 422 of the
      Code.

     

    (p) “Independent
      Director” shall mean a “non-employee director” as set forth in Rule 16b-3 of the
      Commission pursuant to the Exchange Act or any successor definition adopted
      by
      the Commission; provided that in the event that said rule (or successor rule)
      shall not have such a definition, the term Independent Director shall mean
      a
      director of the Company who is not otherwise employed by the Company or any
      Subsidiary or Affiliate; provided, however, an Independent Director shall also
      be an independent director as determined by the rules or regulations of the
      principal stock exchange or market on which the Stock is traded or, if the
      Stock
      is not listed or traded on such exchange, as defined under the rules of the
      Nasdaq Stock Market.

     

    (q) “Non-Qualified
      Stock Option” means any Stock Option that is not an Incentive Stock
      Option.

     

    (r) “Normal
      Retirement” means retirement from active employment with the Company and any
      Subsidiary or Affiliate on or after age 65 or such other age as is designated
      by
      the Company, Subsidiary or Affiliate as the normal retirement age.

     

    (s) “Other
      Stock-Based Award” means an award under Section 10 of the Plan that is valued in
      whole or in part by reference to, or is otherwise based on, Stock.

     

    (t) “Plan”
      means this Strategic Defense Alliance Corp. 2005 Long-Term Incentive Plan,
      as
      hereinafter amended from time to time.

     

    (u) “Restricted
      Stock” means an award of shares of Stock that is subject to restrictions under
      Section 7 of the Plan.

     

    (v) “Retirement”
      means Normal Retirement or Early Retirement.

     

    (w) “Stock”
      means the common stock, par value $.0001 per share, of the Company or any class
      of common stock into which such common stock may hereafter be converted or
      for
      which such common stock may be exchanged pursuant to the Company’s certificate
      of incorporation or as part of a recapitalization, reorganization or similar
      transaction.

     

    (x) “Stock
      Appreciation Right” means the right pursuant to an award granted under Section 6
      of the Plan to surrender to the Company all (or a portion) of a Stock Option
      in
      exchange for an amount equal to the difference between (i) the Fair Market
      Value, as of the date such award or Stock Option (or such portion thereof)
      is
      surrendered, of the shares of Stock covered by such Stock Option (or such
      portion thereof), subject, where applicable, to the pricing provisions in
      Section 6(b)(ii) of the Plan and (ii) the aggregate exercise price of such
      Stock
      Option or base price with respect to such award (or the portion thereof which
      is
      surrendered).

     

    (y) “Stock
      Option” or “Option” means any option to purchase shares of Stock (including
      Restricted Stock and Deferred Stock, if the Committee so determines) granted
      pursuant to Section 5 of the Plan.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    (z) “Stock
      Purchase Right” means the right to purchase Stock pursuant to Section 9 of the
      Plan.

     

    (aa) “Subsidiary”
      means any corporation or other business association, including a partnership
      (other than the Company) in an unbroken chain of corporations or other business
      associations beginning with the Company if each of the corporations or other
      business associations (other than the last corporation in the unbroken chain)
      owns equity interests (including stock or partnership interests) possessing
      50%
      or more of the total combined voting power of all classes of equity in one
      of
      the other corporations or other business associations in the chain. The Board
      may elect to treat as a Subsidiary an entity in which the Company possesses
      less
      than 50% of the total combined voting power of all classes of equity if, under
      generally accepted accounting principles, the Company may include the financial
      statements of such entity as part of the Company’s consolidated financial
      statements (other than as a minority interest or other single line
      item).

     

    In
      addition, the terms “Change in Control,” “Potential Change in Control” and
“Change in Control Price” shall have meanings set forth, respectively, in
      Sections 11(b), (c) and (d) of the Plan.

    

    2. Administration.

     

    (a) The
      Plan
      shall be administered by a Committee of not less than two directors all of
      whom
      shall be Independent Directors, who shall be appointed by the Board and who
      shall serve at the pleasure of the Board. If and to the extent that no Committee
      exists which has the authority to administer the Plan, the functions of the
      Committee specified in the Plan shall be exercised by the Board.

     

    (b) The
      Committee shall have full authority to grant, pursuant to the terms of the
      Plan,
      to officers and other persons eligible under Section 4 of the Plan, provided
      that Independent Directors shall not be eligible for options or other benefits
      pursuant to the Plan other than as provided in Sections 4(b) and 4(c) of the
      Plan: Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred
      Stock, Stock Purchase Rights and/or Other Stock-Based Awards. In particular,
      the
      Committee shall have the authority:

     

    (i)
      to
      select the officers and other eligible persons to whom Stock Options, Stock
      Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase Rights
      and/or Other Stock-Based Awards may from time to time be granted pursuant to
      the
      Plan;

     

    (ii)
      to
      determine whether and to what extent Incentive Stock Options, Non-Qualified
      Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock,
      Stock Purchase Rights and/or Other Stock-Based Awards, or any combination
      thereof, are to be granted pursuant to the Plan, to one or more eligible
      persons;

     

    (iii)
      to
      determine the number of shares to be covered by each such award granted pursuant
      to the Plan;

     

    (iv)
      to
      determine the terms and conditions, not inconsistent with the terms of the
      Plan,
      of any award granted under the Plan, including, but not limited to, the share
      price or exercise price and any restriction or limitation, or any vesting,
      acceleration or waiver of forfeiture restrictions regarding any Stock Option
      or
      other award and/or the shares of Stock relating thereto, based in each case
      on
      such factors as the Committee shall, in its sole discretion,
      determine;

     

    (v)
      to
      determine whether, to what extent and under what circumstances a Stock Option
      may be settled in cash, Restricted Stock and/or Deferred Stock under Section
      5(b)(x) or (xi) of the Plan, as applicable, instead of Stock;

     

    (vi)
      to
      determine whether, to what extent and under what circumstances Option grants
      and/or other awards under the Plan and/or other cash awards made by the Company
      are to be made, and operate, on a tandem basis with other awards under the
      Plan
      and/or cash awards made outside of the Plan in a manner whereby the exercise
      of
      one award precludes, in whole or in part, the exercise of another award, or
      on
      an additive basis;

     

    (vii)
      to
      determine whether, to what extent and under what circumstances Stock and other
      amounts payable with respect to an award under this Plan shall be deferred
      either automatically or at the election of the participant, including any
      provision for any determination or method of determination of the amount (if
      any) deemed be earned on any deferred amount during any deferral
      period;

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (viii)
      to
      determine the terms and restrictions applicable to Stock Purchase Rights and
      the
      Stock purchased by exercising such Rights; and

     

    (ix)
      to
      determine an aggregate number of awards and the type of awards to be granted
      to
      eligible persons employed or engaged by the Company and/or any specific
      Subsidiary, Affiliate or division and grant to management the authority to
      grant
      such awards, provided that no awards to any person subject to the reporting
      and
      short-swing profit provisions of Section 16 of the Exchange Act may be granted
      awards except by the Committee.

     

    (c) In
      the
      event that any officers or other participants have Employment Agreements with
      the Company which provide for the grant of options to such participants, unless
      the Committee or the Board otherwise determines, the options shall be treated
      for all purposes as if they were granted pursuant to this Plan as long as there
      is a sufficient number of shares available for grant pursuant to this Plan.
      

     

    (d) The
      Committee shall have the authority to adopt, alter and repeal such rules,
      guidelines and practices governing the Plan as it shall, from time to time,
      deem
      advisable; to interpret the terms and provisions of the Plan and any award
      issued under the Plan and any agreements relating thereto, and otherwise to
      supervise the administration of the Plan.

     

    (e) All
      decisions made by the Committee pursuant to the provisions of the Plan shall
      be
      made in the Committee’s sole discretion and shall be final and binding on all
      persons, including the Company and Plan participants.

     

    3. Stock
      Subject to Plan.

     

    (a) The
      total
      number of shares of Stock reserved and available for distribution under the
      Plan
      shall be two million fifteen thousand (2,015,000) shares of Stock. In the event
      that awards are granted in tandem such that the exercise of one award precludes
      the exercise of another award then, for the purpose of determining the number
      of
      shares of Stock as to which awards shall have been granted, the maximum number
      of shares of Stock issuable pursuant to such tandem awards shall be
      used.

     

    (b) Subject
      to Section 6(b)(v) of the Plan, if any shares of Stock that have been optioned
      cease to be subject to a Stock Option, or if any such shares of Stock that
      are
      subject to any Restricted Stock or Deferred Stock award, Stock Purchase Right
      or
      Other Stock-Based Award granted under the Plan are forfeited or any such award
      otherwise terminates without a payment being made to the participant in the
      form
      of Stock, such shares shall again be available for distribution in connection
      with future awards under the Plan.

     

    (c) In
      the
      event of any merger, reorganization, consolidation, recapitalization, stock
      dividend, stock split, stock distribution, reverse split, combination of shares
      or other change in corporate structure affecting the Stock, such substitution
      or
      adjustment shall be made in the aggregate number of shares reserved for issuance
      under the Plan, in the base number of shares, in the number and option price
      of
      shares subject to outstanding Options granted under the Plan, in the number
      and
      purchase price of shares subject to outstanding Stock Purchase Rights under
      the
      Plan, and in the number of shares subject to other outstanding awards granted
      under the Plan as may be determined to be appropriate by the Committee, in
      its
      sole discretion, provided that the number of shares subject to any award shall
      always be a whole number, and provided that the treatment of such options and
      rights shall be consistent with the nature of the event. Such adjusted option
      price shall also be used to determine the amount payable by the Company upon
      the
      exercise of any Stock Appreciation Right associated with any Stock
      Option.

     

    4. Eligibility.

     

    (a) Officers
      and other key employees and directors of, and consultants and independent
      contractors to, the Company and its Subsidiaries and Affiliates (but excluding,
      except as to Sections 4(b) and 4(c) of the Plan, Independent Directors) who
      are
      responsible for or contribute to the management, growth and/or profitability
      of
      the business of the Company and/or its Subsidiaries and Affiliates are eligible
      to be granted awards under the Plan.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    (b) On
      each
      the first trading day in April of each year, commencing in 2007, each person
      who
      is a Independent Director on such date shall automatically be granted a
      Non-Qualified Stock Option to purchase five thousand (5,000) shares of Stock
      (or
      such lesser number of shares of Stock as remain available for grant at such
      date
      under the Plan, divided by the number of Independent Directors at such date).
      Such Stock Options shall be exercisable at a price per share equal to the
      greater of the Fair Market Value on the date of grant or the par value of one
      share of Stock. The Non-Qualified Stock Options granted pursuant to this Section
      4(b) and pursuant to Section 4(c) of the Plan shall become exercisable
      cumulatively as to fifty percent (50%) of the shares subject thereto six months
      from the date of grant and as to the remaining fifty percent (50%), eighteen
      months from the date of grant, and shall expire on the earlier of (i) five
      years
      from the date of grant, or (ii) seven (7) months from the date such Independent
      Director ceases to be a director if such Independent Director ceases to be
      a
      director other than as a result of his death or Disability. The provisions
      of
      this Section 4(b) and said Section 4(c) may not be amended more than one (1)
      time in any six (6) month period other than to comply with changes in the Code
      or the Employee Retirement Income Security Act (“ERISA”) or the rules
      thereunder.

     

    (c) At
      the
      time an Independent Director is first elected to the Board, such person shall
      automatically be granted a Non-Qualified Stock Option to purchase thirty
      thousand (30,000) shares of Stock (or such lesser number of shares of Stock
      as
      remain available for grant at such date under the Plan, divided by the number
      of
      Independent Directors who are elected as directors at such date). Such Stock
      Options shall be exercisable at a price per share equal to the greater of the
      Fair Market Value on the date of grant or the par value of one share of Stock.
      

     

    5. Stock
      Options.

     

    (a) Administration.
      Stock
      Options may be granted alone, in addition to or in tandem with other awards
      granted under the Plan and/or cash awards made outside of the Plan. Any Stock
      Option granted under the Plan shall be in such form as the Committee may from
      time to time approve. Stock Options granted under the Plan may be of two types:
      (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. The Committee
      shall have the authority to grant to any optionee Incentive Stock Options,
      Non-Qualified Stock Options, or both types of Stock Options (in each case with
      or without Stock Appreciation Rights).

     

    (b) Option
      Grants.
      Options
      granted under the Plan shall be subject to the following terms and conditions
      and shall contain such additional terms and conditions, not inconsistent with
      the terms of the Plan, as the Committee, in its sole discretion, shall deem
      desirable:

     

    (i)
      Option
      Price.
      The
      option price per share of Stock purchasable under a Stock Option shall be
      determined by the Committee at the time of grant.

     

    (ii)
      Option
      Term.
      The
      term of each Stock Option shall be fixed by the Committee, but no Stock Option
      shall be exercisable more than ten (10) years after the date the Option is
      granted.

     

    (iii)
      Exercisability.
      Stock
      Options shall be exercisable at such time or times and subject to such terms
      and
      conditions as shall be determined by the Committee at or after grant. If the
      Committee provides, in its sole discretion, that any Stock Option is exercisable
      only in installments, the Committee may waive such installment exercise
      provisions at any time at or after grant in whole or in part, based on such
      factors as the Committee shall, in its sole discretion, determine.

     

    (iv)
      Method
      of Exercise.

     

    (A) Subject
      to whatever installment exercise provisions apply under Section 5(b)(iii) of
      the
      Plan, Stock Options may be exercised in whole or in part at any time during
      the
      option period, by giving written notice of exercise to the Company specifying
      the number of shares to be purchased. Such notice shall be accompanied by
      payment in full of the purchase price, either by check, note or such other
      instrument, securities or property as the Committee may accept. As and to the
      extent determined by the Committee, in its sole discretion, at or after grant,
      payments in full or in part may also be made in the form of Stock already owned
      by the optionee or, in the case of the exercise of a Non-Qualified Stock Option,
      Restricted Stock or Deferred Stock subject to an award hereunder (based, in
      each
      case, on the Fair Market Value of the Stock on the date the option is exercised,
      as determined by the Committee).

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    (B) If
      payment of the option exercise price of a Non-Qualified Stock Option is made
      in
      whole or in part in the form of Restricted Stock or Deferred Stock, the Stock
      issuable upon such exercise (and any replacement shares relating thereto) shall
      remain (or be) restricted or deferred, as the case may be, in accordance with
      the original terms of the Restricted Stock award or Deferred Stock award in
      question, and any additional Stock received upon the exercise shall be subject
      to the same forfeiture restrictions or deferral limitations, unless otherwise
      determined by the Committee, in its sole discretion, at or after
      grant.

     

    (C) No
      shares
      of Stock shall be issued until full payment therefor has been received by the
      Company. In the event of any exercise by note or other instrument, the shares
      of
      Stock shall not be issued until such note or other instrument shall have been
      paid in full, and the exercising optionee shall have no rights as a stockholder
      until such payment is made.

     

    (D) Subject
      to Section 5(b)(iv)(C) of the Plan, an optionee shall generally have the rights
      to dividends or other rights of a stockholder with respect to shares subject
      to
      the Option when the optionee has given written notice of exercise, has paid
      in
      full for such shares, and, if requested, has given the representation described
      in Section 14(a) of the Plan.

     

    (v)
      Non-Transferability
      of Options.
      No
      Stock Option shall be transferable by the optionee otherwise than by will or
      by
      the laws of descent and distribution, and all Stock Options shall be
      exercisable, during the optionee’s lifetime, only by the optionee.

     

    (vi)
      Termination
      by Death.
      Subject
      to Section 5(b)(ix) of the Plan with respect to Incentive Stock Options, if
      an
      optionee’s employment by the Company and any Subsidiary or Affiliate terminates
      by reason of death, any Stock Option held by such optionee may thereafter be
      exercised, to the extent such option was exercisable at the time of death or
      on
      such accelerated basis as the Committee may determine at or after grant (or
      as
      may be determined in accordance with procedures established by the Committee),
      by the legal representative of the estate or by the legatee of the optionee
      under the will of the optionee, for a period of one year (or such other period
      as the Committee may specify at grant) from the date of such death or until
      the
      expiration of the stated term of such Stock Option, whichever period is the
      shorter.

     

    (vii)
      Termination
      by Reason of Disability or Retirement.
      Subject
      to Section 5(b)(ix) of the Plan with respect to Incentive Stock Options, if
      an
      optionee’s employment by the Company and any Subsidiary or Affiliate terminates
      by reason of a Disability or Normal or Early Retirement, any Stock Option held
      by such optionee may thereafter be exercised by the optionee, to the extent
      it
      was exercisable at the time of termination or on such accelerated basis as
      the
      Committee may determine at or after grant (or as may be determined in accordance
      with procedures established by the Committee), for a period of one year (or
      such
      other period as the Committee may specify at grant) from the date of such
      termination of employment or until the expiration of the stated term of such
      Stock Option, whichever period is the shorter; provided, however, that, if
      the
      optionee dies within such one-year period (or such other period as the Committee
      shall specify at grant), any unexercised Stock Option held by such optionee
      shall thereafter be exercisable to the extent to which it was exercisable at
      the
      time of death for a period of one year from the date of such death or until
      the
      expiration of the stated term of such Stock Option, whichever period is the
      shorter. In the event of termination of employment by reason of Disability
      or
      Normal or Early Retirement, if an Incentive Stock Option is exercised after
      the
      expiration of the exercise periods that apply for purposes of Section 422 of
      the
      Code, such Stock Option will thereafter be treated as a Non-Qualified Stock
      Option.

     

    (viii)
      Other
      Termination.
      Unless
      otherwise determined by the Committee (or pursuant to procedures established
      by
      the Committee) at or after grant, if an optionee’s employment by the Company and
      any Subsidiary or Affiliate terminates for any reason other than death,
      Disability or Normal or Early Retirement, the Stock Option shall thereupon
      terminate; provided, however, that if the optionee is involuntarily terminated
      by the Company or any Subsidiary or Affiliate without Cause, including a
      termination resulting from the Subsidiary, Affiliate or division in which the
      optionee is employed or engaged, ceasing, for any reason, to be a Subsidiary,
      Affiliate or division of the Company, such Stock Option may be exercised, to
      the
      extent otherwise exercisable on the date of termination, for a period of three
      months (or seven months in the case of a person subject to the reporting and
      short-swing profit provisions of Section 16 of the Exchange Act) from the date
      of such termination or until the expiration of the stated term of such Stock
      Option, whichever is shorter.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    (ix)
      Incentive Stock Options.

     

    (A) Anything
      in the Plan to the contrary notwithstanding, no term of the Plan relating to
      Incentive Stock Options shall be interpreted, amended or altered, nor shall
      any
      discretion or authority granted under the Plan be so exercised, so as to
      disqualify the Plan under Section 422 of the Code, or, without the consent
      of
      the optionee(s) affected, to disqualify any Incentive Stock Option under such
      Section 422.

     

    (B) To
      the
      extent required for “incentive stock option” status under Section 422(d) of the
      Code (taking into account applicable Treasury regulations and pronouncements),
      the Plan shall be deemed to provide that the aggregate Fair Market Value
      (determined as of the time of grant) of the Stock with respect to which
      Incentive Stock Options are exercisable for the first time by the optionee
      during any calendar year under the Plan and/or any other stock option plan
      of
      the Company or any Subsidiary or parent corporation (within the meaning of
      Section 425 of the Code) shall not exceed $100,000. If Section 422 is hereafter
      amended to delete the requirement now in Section 422(d) that the plan text
      expressly provide for the $100,000 limitation set forth in Section 422(d),
      then
      this Section 5(b)(ix)(B) shall no longer be operative and the Committee may
      accelerate the dates on which the incentive stock option may be
      exercised.

     

    (C) To
      the
      extent permitted under Section 422 of the Code or the applicable regulations
      thereunder or any applicable Internal Revenue Service
      pronouncement:

     

    (I)
      If
      (x) a
      participant’s employment is terminated by reason of death, Disability or
      Retirement and (y) the portion of any Incentive Stock Option that is otherwise
      exercisable during the post-termination period specified under Sections 5(b)(vi)
      and (vii) of the Plan, applied without regard to the $100,000 limitation
      contained in Section 422(d) of the Code, is greater than the portion of such
      option that is immediately exercisable as an “incentive stock option” during
      such post-termination period under Section 422, such excess shall be treated
      as
      a Non-Qualified Stock Option; and

     

    (II)
      if
      the
      exercise of an Incentive Stock Option is accelerated by reason of a Change
      in
      Control, any portion of such option that is not exercisable as an Incentive
      Stock Option by reason of the $100,000 limitation contained in Section 422(d)
      of
      the Code shall be treated as a Non-Qualified Stock Option.

     

    (x)
      Buyout
      Provisions.
      The
      Committee may at any time offer to buy out for a payment in cash, Stock,
      Deferred Stock or Restricted Stock an option previously granted, based on such
      terms and conditions as the Committee shall establish and communicate to the
      optionee at the time that such offer is made.

     

    (xi)
      Settlement
      Provisions.
      If the
      option agreement so provides at grant or is amended after grant and prior to
      exercise to so provide (with the optionee’s consent), the Committee may require
      that all or part of the shares to be issued with respect to the spread value
      of
      an exercised Option take the form of Deferred or Restricted Stock which shall
      be
      valued on the date of exercise on the basis of the Fair Market Value (as
      determined by the Committee) of such Deferred or Restricted Stock determined
      without regard to the deferral limitations and/or forfeiture restrictions
      involved.

     

    6. Stock
      Appreciation Rights.

     

    (a) Grant
      and Exercise.

     

    (i)
      Stock
      Appreciation Rights may be granted in conjunction with all or part of any Stock
      Option granted under the Plan. In the case of a Non-Qualified Stock Option,
      such
      rights may be granted either at or after the time of the grant of such Stock
      Option. In the case of an Incentive Stock Option, such rights may be granted
      only at the time of the grant of such Stock Option.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    (ii)
      A
      Stock Appreciation Right or applicable portion thereof granted with respect
      to a
      given Stock Option shall terminate and no longer be exercisable upon the
      termination or exercise of the related Stock Option, subject to such provisions
      as the Committee may specify at grant where a Stock Appreciation Right is
      granted with respect to less than the full number of shares covered by a related
      Stock Option.

     

    (iii)
      A
      Stock Appreciation Right may be exercised by an optionee, subject to Section
      6(b) of the Plan, in accordance with the procedures established by the Committee
      for such purpose. Upon such exercise, the optionee shall be entitled to receive
      an amount determined in the manner prescribed in said Section 6(b). Stock
      Options relating to exercised Stock Appreciation Rights shall no longer be
      exercisable to the extent that the related Stock Appreciation Rights have been
      exercised.

     

    (b) Terms
      and Conditions.
      Stock
      Appreciation Rights shall be subject to such terms and conditions, not
      inconsistent with the provisions of the Plan, as shall be determined from time
      to time by the Committee, including the following:

     

    (i)
      Stock
      Appreciation Rights shall be exercisable only at such time or times and to
      the
      extent that the Stock Options to which they relate shall be exercisable in
      accordance with the provisions of this Section 6 and Section 5 of the Plan;
      provided, however, that any Stock Appreciation Right granted to an optionee
      subject to Section 16(b) of the Exchange Act subsequent to the grant of the
      related Stock Option shall not be exercisable during the first six months of
      its
      term, except that this special limitation shall not apply in the event of death
      or Disability of the optionee prior to the expiration of the six-month period.
      The exercise of Stock Appreciation Rights held by optionees who are subject
      to
      Section 16(b) of the Exchange Act shall comply with Rule 16b-3 thereunder to
      the
      extent applicable.

     

    (ii)
      Upon
      the exercise of a Stock Appreciation Right, an optionee shall be entitled to
      receive an amount in cash and/or shares of Stock equal in value to the excess
      of
      the Fair Market Value of one share of Stock over the option price per share
      specified in the related Stock Option multiplied by the number of shares in
      respect of which the Stock Appreciation Right shall have been exercised, with
      the Committee having the right to determine the form of payment. When payment
      is
      to be made in shares of Stock, the number of shares to be paid shall be
      calculated on the basis of the Fair Market Value of the shares on the date
      of
      exercise. When payment is to be made in cash, such amount shall be based upon
      the Fair Market Value of the Stock on the date of exercise, determined in a
      manner not inconsistent with Section 16(b) of the Exchange Act and the rules
      of
      the Commission thereunder.

     

    (iii)
      Stock Appreciation Rights shall be transferable only when and to the extent
      that
      the underlying Stock Option would be transferable under Section 5(b)(v) of
      the
      Plan.

     

    (iv)
      Upon
      the exercise of a Stock Appreciation Right, the Stock Option or part thereof
      to
      which such Stock Appreciation Right is related shall be deemed to have been
      exercised only to the extent of the number of shares issued under the Stock
      Appreciation Right at the time of exercise based on the value of the Stock
      Appreciation Right at such time.

     

    (v)
      In
      its sole discretion, the Committee may grant Stock Appreciation Rights that
      become exercisable only in the event of a Change in Control and/or a Potential
      Change in Control, subject to such terms and conditions as the Committee may
      specify at grant; provided that any such Stock Appreciation Rights shall be
      settled solely in cash.

     

    (vi)
      The
      Committee, in its sole discretion, may also provide that, in the event of a
      Change in Control and/or a Potential Change in Control, the amount to be paid
      upon the exercise of a Stock Appreciation Right shall be based on the Change
      in
      Control Price, subject to such terms and conditions as the Committee may specify
      at grant.

     

    7. Restricted
      Stock.

     

    (a) Administration.
      Shares
      of Restricted Stock may be issued either alone, in addition to or in tandem
      with
      other awards granted under the Plan and/or cash awards made outside of the
      Plan.
      The Committee shall determine the eligible persons to whom, and the time or
      times at which, grants of Restricted Stock will be made, the number of shares
      to
      be awarded, the price (if any) to be paid by the recipient of Restricted Stock,
      subject to Section 7(b) of the Plan, the time or times within which such awards
      may be subject to forfeiture, and all other terms and conditions of the awards.
      The Committee may condition the grant of Restricted Stock upon the attainment
      of
      specified performance goals or such other factors as the Committee may, in
      its
      sole discretion, determine. The provisions of Restricted Stock awards need
      not
      be the same with respect to each recipient.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    (b) Awards
      and Certificates.

     

    (i)
      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 an agreement
      evidencing the award and has delivered a fully executed copy thereof to the
      Company, and has otherwise complied with the applicable terms and conditions
      of
      such award.

     

    (ii)
      The
      purchase price for shares of Restricted Stock may be equal to or less than
      their
      par value and may be zero.

     

    (iii)
      Awards of Restricted Stock must be accepted within a period of 60 days (or
      such
      shorter period as the Committee may specify at grant) after the award date,
      by
      executing a Restricted Stock Award Agreement and paying the price, if any,
      required under Section 7(b)(ii).

     

    (iv)
      Each
      participant receiving a Restricted Stock award shall be issued a stock
      certificate in respect of such shares of Restricted Stock. Such certificate
      shall be registered in the name of such participant, and shall bear an
      appropriate legend referring to the terms, conditions, and restrictions
      applicable to such award.

     

    (v)
      The
      Committee shall require that (A) the stock certificates evidencing shares of
      Restricted Stock be held in the custody of the Company until the restrictions
      thereon shall have lapsed, and (B) as a condition of any Restricted Stock award,
      the participant shall have delivered a stock power, endorsed in blank, relating
      to the Restricted Stock covered by such award.

     

    (c) Restrictions
      and Conditions.
      The
      shares of Restricted Stock awarded pursuant to this Section 7 shall be subject
      to the following restrictions and conditions:

     

    (i)
      Subject to the provisions of the Plan and the award agreement, during a period
      set by the Committee commencing with the date of such award (the “Restriction
      Period”), the participant shall not be permitted to sell, transfer, pledge or
      assign shares of Restricted Stock awarded under the Plan. Within these limits,
      the Committee, in its sole discretion, may provide for the lapse of such
      restrictions in installments and may accelerate or waive such restrictions
      in
      whole or in part, based on service, performance and/or such other factors or
      criteria as the Committee may determine, in its sole discretion.

     

    (ii)
      Except as provided in this Section 7(c)(ii) and Section 7(c)(i) of the Plan,
      the
      participant shall have, with respect to the shares of Restricted Stock, all
      of
      the rights of a stockholder of the Company, including the right to vote the
      shares and the right to receive any regular cash dividends paid out of current
      earnings. The Committee, in its sole discretion, as determined at the time
      of
      award, may permit or require the payment of cash dividends to be deferred and,
      if the Committee so determines, reinvested, subject to Section 14(e) of the
      Plan, in additional Restricted Stock to the extent shares are available under
      Section 3 of the Plan, or otherwise reinvested. Stock dividends, splits and
      distributions issued with respect to Restricted Stock shall be treated as
      additional shares of Restricted Stock that are subject to the same restrictions
      and other terms and conditions that apply to the shares with respect to which
      such dividends are issued, and the Committee may require the participant to
      deliver an additional stock power covering the shares issuable pursuant to
      such
      stock dividend, split or distribution. Any other dividends or property
      distributed with regard to Restricted Stock, other than regular dividends
      payable and paid out of current earnings, shall be held by the Company subject
      to the same restrictions as the Restricted Stock.

     

    (iii)
      Subject to the applicable provisions of the award agreement and this Section
      7,
      upon termination of a participant’s employment or other services with the
      Company and any Subsidiary or Affiliate for any reason during the Restriction
      Period, all shares still subject to restriction will vest, or be forfeited,
      in
      accordance with the terms and conditions established by the Committee at or
      after grant.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    (iv)
      If
      and when the Restriction Period expires without a prior forfeiture of the
      Restricted Stock subject to such Restriction Period, certificates for an
      appropriate number of unrestricted shares, and other property held by the
      Company with respect to such Restricted Shares, shall be delivered to the
      participant promptly.

     

    (d) Minimum
      Value Provisions.
      In
      order to better ensure that award payments actually reflect the performance
      of
      the Company and service of the participant, the Committee may provide, in its
      sole discretion, for a tandem Stock Option or performance-based or other award
      designed to guarantee a minimum value, payable in cash or Stock to the recipient
      of a Restricted Stock award, subject to such performance, future service,
      deferral and other terms and conditions as may be specified by the
      Committee.

     

    8. Deferred
      Stock.

     

    (a) Administration.
      Deferred Stock may be awarded either alone, in addition to or in tandem with
      other awards granted under the Plan and/or cash awards made outside of the
      Plan.
      The Committee shall determine the eligible persons to whom and the time or
      times
      at which Deferred Stock shall be awarded, the number of shares of Deferred
      Stock
      to be awarded to any person, the duration of the period (the “Deferral Period”)
      during which, and the conditions under which, receipt of the Stock will be
      deferred, and the other terms and conditions of the award in addition to those
      set forth in Section 8(b). The Committee may condition the grant of Deferred
      Stock upon the attainment of specified performance goals or such other factors
      or criteria as the Committee shall, in its sole discretion, determine. The
      provisions of Deferred Stock awards need not be the same with respect to each
      recipient.

     

    (b) Terms
      and Conditions.
      The
      shares of Deferred Stock awarded pursuant to this Section 8 shall be subject
      to
      the following terms and conditions:

     

    (i)
      Subject to the provisions of the Plan and the award agreement referred to in
      Section 8(b)(vi) of the Plan, Deferred Stock awards may not be sold, assigned,
      transferred, pledged or otherwise encumbered during the Deferral Period. At
      the
      expiration of the Deferral Period (or the Elective Deferral Period referred
      to
      in Section 8(b)(v) of the Plan, where applicable), share certificates
      representing the shares covered by the Deferred Stock award shall be delivered
      to the participant or his legal representative.

     

    (ii)
      Unless otherwise determined by the Committee at grant, amounts equal to any
      dividends declared during the Deferral Period with respect to the number of
      shares covered by a Deferred Stock award will be paid to the participant
      currently, or deferred and deemed to be reinvested in additional Deferred Stock,
      or otherwise reinvested, all as determined at or after the time of the award
      by
      the Committee, in its sole discretion.

     

    (iii)
      Subject to the provisions of the award agreement and this Section 8, upon
      termination of a participant’s employment with the Company and any Subsidiary or
      Affiliate for any reason during the Deferral Period for a given award, the
      Deferred Stock in question will vest, or be forfeited, in accordance with the
      terms and conditions established by the Committee at or after
      grant.

     

    (iv)
      Based on service, performance and/or such other factors or criteria as the
      Committee may determine, the Committee may, at or after grant, accelerate the
      vesting of all or any part of any Deferred Stock award and/or waive the deferral
      limitations for all or any part of such award.

     

    (v)
      A
      participant may elect to further defer receipt of an award (or an installment
      of
      an award) for a specified period or until a specified event (the “Elective
      Deferral Period”), subject in each case to the Committee’s approval and to such
      terms as are determined by the Committee, all in its sole discretion. Subject
      to
      any exceptions adopted by the Committee, such election must generally be made
      at
      least twelve months prior to completion of the Deferral Period for such Deferred
      Stock award (or such installment).

     

    (vi)
      Each
      award shall be confirmed by, and subject to the terms of, a Deferred Stock
      agreement executed by the Company and the participant.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    (c) Minimum
      Value Provisions.
      In
      order to better ensure that award payments actually reflect the performance
      of
      the Company and service of the participant, the Committee may provide, in its
      sole discretion, for a tandem Stock Option or performance-based or other award
      designed to guarantee a minimum value, payable in cash or Stock to the recipient
      of a deferred stock award, subject to such performance, future service, deferral
      and other terms and conditions as may be specified by the
      Committee.

     

    9. Stock
      Purchase Rights.

     

    (a) Awards
      and Administration.
      The
      Committee may grant eligible participants Stock Purchase Rights which shall
      enable such participants to purchase Stock (including Deferred Stock and
      Restricted Stock):

     

    (i)
      at
      its Fair Market Value on the date of grant;

     

    (ii)
      at a
      percentage of such Fair Market Value on such date, such percentage to be
      determined by the Committee in its sole discretion;

     

    (iii)
      at
      an amount equal to Book Value on such date; or

     

    (iv)
      at
      an amount equal to the par value of such Stock on such date.

     

    The
      Committee shall also impose such deferral, forfeiture and/or other terms and
      conditions as it shall determine, in its sole discretion, on such Stock Purchase
      Rights or the exercise thereof. The terms of Stock Purchase Rights awards need
      not be the same with respect to each participant. Each Stock Purchase Right
      award shall be confirmed by, and be subject to the terms of, a Stock Purchase
      Rights Agreement.

     

    (b) Exercisability.
      Stock
      Purchase Rights shall generally be exercisable for such period after grant
      as is
      determined by the Committee not to exceed sixty (60) days. However, the
      Committee may provide, in its sole discretion, that the Stock Purchase Rights
      of
      persons potentially subject to Section 16(b) of the Exchange Act shall not
      become exercisable until six months and one day after the grant date, and shall
      then be exercisable for ten trading days at the purchase price specified by
      the
      Committee in accordance with Section 9(a) of the Plan.

     

    10. Other
      Stock-Based Awards.

     

    (a) Administration.

     

    (i)
      Other
      awards of Stock and other awards that are valued in whole or in part by
      reference to, or are otherwise based on, Stock (“Other Stock-Based Awards”),
      including, without limitation, performance shares, convertible preferred stock
      (to the extent a series of preferred stock has been or may be created by, or
      in
      accordance with a procedure set forth in, the Company’s certificate of
      incorporation), convertible debentures, warrants, exchangeable securities and
      Stock awards or options valued by reference to Fair Market Value, Book Value
      or
      performance of the Company or any Subsidiary, Affiliate or division, may be
      granted either alone or in addition to or in tandem with Stock Options, Stock
      Appreciation Rights, Restricted Stock, Deferred Stock or Stock Purchase Rights
      granted under the Plan and/or cash awards made outside of the Plan.

     

    (ii)
      Subject to the provisions of the Plan, the Committee shall have authority to
      determine the persons to whom and the time or times at which such award shall
      be
      made, the number of shares of Stock to be awarded pursuant to such awards,
      and
      all other conditions of the awards. The Committee may also provide for the
      grant
      of Stock upon the completion of a specified performance period. The provisions
      of Other Stock-Based Awards need not be the same with respect to each
      recipient.

     

    (b) Terms
      and Conditions.
      Other
      Stock-Based Awards made pursuant to this Section 10 shall be subject to the
      following terms and conditions:

     

    (i)
      Subject to the provisions of the Plan and the award agreement referred to in
      Section 10(b)(v) of the Plan, shares of Stock subject to awards made under
      this
      Section 10 may not be sold, assigned, transferred, pledged or otherwise
      encumbered prior to the date on which the shares are issued, or, if later,
      the
      date on which any applicable restriction, performance or deferral period
      lapses.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    (ii)
      Subject to the provisions of the Plan and the award agreement and unless
      otherwise determined by the Committee at grant, the recipient of an award under
      this Section 10 shall be entitled to receive, currently or on a deferred basis,
      interest or dividends or interest or dividend equivalents with respect to the
      number of shares covered by the award, as determined at the time of the award
      by
      the Committee, in its sole discretion, and the Committee may provide that such
      amounts (if any) shall be deemed to have been reinvested in additional Stock
      or
      otherwise reinvested.

     

    (iii)
      Any
      award under Section 10 and any Stock covered by any such award shall vest or
      be
      forfeited to the extent so provided in the award agreement, as determined by
      the
      Committee, in its sole discretion.

     

    (iv)
      In
      the event of the participant’s Retirement, Disability or death, or in cases of
      special circumstances, the Committee may, in its sole discretion, waive in
      whole
      or in part any or all of the remaining limitations (if any) imposed with respect
      to any or all of an award pursuant to this Section 10.

     

    (v)
      Each
      award under this Section 10 shall be confirmed by, and subject to the terms
      of,
      an agreement or other instrument by the Company and by the
      participant.

     

    (vi)
      Stock (including securities convertible into Stock) issued on a bonus basis
      under this Section 10 may be issued for no cash consideration.

     

    11. Change
      in Control Provisions.

     

    (a) Impact
      of Event.
      In the
      event of a “Change in Control,” as defined in Section 11(b) of the Plan, or a
“Potential Change in Control,” as defined in Section 11(c) of the Plan, except
      to the extent otherwise determined by the Committee or the Board at or after
      grant (subject to any right of approval expressly reserved by the Committee
      or
      the Board at the time of such determination), the following acceleration and
      valuation provisions shall apply:

     

    (i)
      Any
      Stock Appreciation Rights outstanding for at least six months and any Stock
      Options awarded under the Plan not previously exercisable and vested shall
      become fully exercisable and vested and any Incentive Stock Options may, with
      the consent of the holders thereof, be treated as Non-Qualified Stock
      Options.

     

    (ii)
      The
      restrictions and deferral limitations applicable to any Restricted Stock,
      Deferred Stock, Stock Purchase rights and Other Stock-Based Awards, in each
      case
      to the extent not already vested under the Plan, shall lapse and such shares
      and
      awards shall be deemed fully vested.

     

    (iii)
      The
      value of all outstanding Stock Options, Stock Appreciation Rights, Restricted
      Stock, Deferred Stock, Stock Purchase Rights and Other Stock-Based Awards,
      in
      each case to the extent vested (including such rights which shall have become
      vested pursuant to Sections 11(a)(i) and (ii) of the Plan), shall be purchased
      by the Company (“cashout”) in a manner determined by the Committee, in its sole
      discretion, on the basis of the “Change in Control Price” as defined in Section
      11(d) of the Plan as of the date such Change in Control or such Potential Change
      in Control is determined to have occurred or such other date as the Committee
      may determine prior to the Change in Control, unless the Committee shall,
      contemporaneously with or prior to any particular Change of Control or Potential
      Change of Control, determine that this Section 11(a)(iii) shall not be
      applicable to such Change in Control or Potential Change in
      Control.

     

    (b) Definition
      of “Change in Control.”
      For
      purposes of Section 11(a) of the Plan, a “Change in Control” means the happening
      of any of the following after the completion of the acquisition of Plaza
      Consulting Group, Inc., a Puerto Rico corporation (the “Acquisition Effective
      Date”):

     

    (i)
      When
      any “person” (as defined in Section 3(a)(9) of the Exchange Act and as used in
      Sections 13(d) and 14(d) of the Exchange Act, including a “group” as defined in
      Section 13(d) of the Exchange Act, but excluding the Company and any Subsidiary
      and any employee benefit plan sponsored or maintained by the Company or any
      Subsidiary and any trustee of such plan acting as trustee) directly or
      indirectly becomes the “beneficial owner” (as defined in Rule 13d-3 under the
      Exchange Act, as amended from time to time), of securities of the Company
      representing thirty percent (30%) or more of the combined voting power of the
      Company’s then outstanding securities; provided, however, that a Change of
      Control shall not arise if such acquisition is approved by the board of
      directors or if the board of directors or the Committee determines that such
      acquisition is not a Change of Control or if the board of directors authorizes
      the issuance of the shares of Stock (or securities convertible into Stock or
      upon the exercise of which shares of Stock may be issued) to such persons;
      or

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    (ii)
      When, during any period of twenty-four consecutive months during the existence
      of the Plan, the individuals who, at the beginning of such period, constitute
      the Board (the “Incumbent Directors”) cease for any reason other than death,
      Disability or Retirement to constitute at least a majority thereof, provided,
      however, that a director who was not a director at the beginning of such
      24-month period shall be deemed to have satisfied such 24-month requirement
      (and
      be an Incumbent Director) if such director was elected by, or on the
      recommendation of, or with the approval of, at least two-thirds of the directors
      who then qualified as Incumbent Directors either actually (because they were
      directors at the beginning of such 24-month period) or by prior operation of
      this Section 11(b)(ii); provided, however, that all directors who are elected
      to
      the board not later than six months after the Acquisition Effective Date shall
      be deemed to be an Incumbent Director and shall be deemed to have satisfied
      the
      24-month requirement set forth in this Section 11(b)(ii); or

     

    (iii)
      The
      occurrence of a transaction requiring stockholder approval for the acquisition
      of the Company by an entity other than the Company or a Subsidiary through
      purchase of assets, or by merger, or otherwise unless approved by a majority
      of
      Incumbent Directors.

     

    (c) Definition
      of Potential Change in Control.
      For
      purposes of Section 11(a) of the Plan, a “Potential Change in Control” means the
      happening of any one of the following:

     

    (i)
      The
      approval by stockholders of an agreement by the Company, the consummation of
      which would result in a Change in Control of the Company as defined in Section
      11(b) of the Plan; or

     

    (ii)
      The
      acquisition of beneficial ownership, directly or indirectly, by any entity,
      person or group (other than the Company or a Subsidiary or any Company employee
      benefit plan or any trustee of such plan acting as such trustee) of securities
      of the Company representing five percent or more of the combined voting power
      of
      the Company’s outstanding securities and the adoption by the Board of Directors
      of a resolution to the effect that a Potential Change in Control of the Company
      has occurred for purposes of the Plan.

     

    (d) Change
      in Control Price.
      For
      purposes of this Section 11, “Change in Control Price” means the highest price
      per share paid in any transaction reported on the principal stock exchange
      on
      which the Stock is traded or the average of the highest bid and asked prices
      as
      reported by the principal stock exchange or market on which the Stock is traded,
      or paid or offered in any bona fide transaction related to a Potential or actual
      Change in Control of the Company at any time during the sixty-day period
      immediately preceding the occurrence of the Change in Control (or, where
      applicable, the occurrence of the Potential Change in Control event), in each
      case as determined by the Committee except that, in the case of Incentive Stock
      Options and Stock Appreciation Rights relating to Incentive Stock Options,
      such
      price shall be based only on transactions reported for the date on which the
      optionee exercises such Stock Appreciation Rights, Incentive Stock Options
      or,
      where applicable, the date on which a cashout occurs under Section
      11(a)(iii).

     

    12. Amendments
      and Termination.

     

    (a) The
      Board
      may amend, alter, or discontinue the Plan, but no amendment, alteration, or
      discontinuation shall be made which would impair the rights of an optionee
      or
      participant under a Stock Option, Stock Appreciation Right, Restricted or
      Deferred Stock award, Stock Purchase Right or Other Stock-Based Award
      theretofore granted, without the optionee’s or participant’s consent, and no
      amendment will be made without approval of the stockholders if such amendment
      requires stockholder approval under state law or if stockholder approval is
      necessary in order that the Plan comply with Rule 16b-3 of the Commission under
      the Exchange Act or any substitute or successor rule or if stockholder approval
      is necessary in order to enable the grant pursuant to the Plan of options or
      other awards intended to confer tax benefits upon the recipients
      thereof.

     

    (b) The
      Committee may amend the terms of any Stock Option or other award theretofore
      granted, prospectively or retroactively, but no such amendment shall impair
      the
      rights or any holder without the holder’s consent. The Committee may also
      substitute new Stock Options for previously granted Stock Options (on a one
      for
      one or other basis), including previously granted Stock Options having higher
      option exercise prices.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    (c) Subject
      to the provisions of Sections 12(a) and (b) of the Plan, the Board shall have
      broad authority to amend the Plan to take into account changes in applicable
      securities and tax laws and accounting rules, as well as other developments,
      and, in particular, without limiting in any way the generality of the foregoing,
      to eliminate any provisions which are not required to included as a result
      of
      any amendment to Rule 16b-3 of the Commission pursuant to the Exchange
      Act.

     

    13. Unfunded
      Status of Plan.

     

    The
      Plan
      is intended to constitute an “unfunded” plan for incentive and deferred
      compensation. With respect to any payments not yet made to a participant or
      optionee by the Company, nothing contained in this Plan shall give any such
      participant or optionee any rights that are greater than those of a general
      creditor of the Company. In its sole discretion, the Committee may authorize
      the
      creation of trusts or other arrangements to meet the obligations created under
      the Plan to deliver Stock or payments in lieu of or with respect to awards
      under
      this Plan; provided, however, that, unless the Committee otherwise determines
      with the consent of the affected participant, the existence of such trusts
      or
      other arrangements shall be consistent with the “unfunded” status of the
      Plan.

    

    14. General
      Provisions.

     

    (a) The
      Committee may require each person purchasing shares pursuant to a Stock Option
      or other award under the Plan to represent to and agree with the Company in
      writing that the optionee or participant is acquiring the shares without a
      view
      to distribution thereof. The certificates for such shares may include any legend
      which the Committee deems appropriate to reflect any restrictions on transfer.
      All certificates or shares of Stock or other securities delivered under the
      Plan
      shall be subject to such stock-transfer orders and other restrictions as the
      Committee may deem advisable under the rules, regulations, and other
      requirements of the Commission, any stock exchange upon which the Stock is
      then
      listed, and any applicable Federal or state securities law, and the Committee
      may cause a legend or legends to be put on any such certificates to make
      appropriate reference to such restrictions.

     

    (b) Nothing
      contained in this Plan shall prevent the Board from adopting other or additional
      compensation arrangements, subject to stockholder approval if such approval
      is
      required; and such arrangements may be either generally applicable or applicable
      only in specific cases.

     

    (c) Neither
      the adoption of the Plan nor the grant of any award pursuant to the Plan shall
      confer upon any employee of the Company or any Subsidiary or Affiliate any
      right
      to continued employment with the Company or a Subsidiary or Affiliate, as the
      case may be, nor shall it interfere in any way with the right of the Company
      or
      a Subsidiary or Affiliate to terminate the employment of any of its employees
      at
      any time.

     

    (d) No
      later
      than the date as of which an amount first becomes includible in the gross income
      of the participant for Federal income tax purposes with respect to any award
      under the Plan, the participant shall pay to the Company, or make arrangements
      satisfactory to the Committee regarding the payment of, any Federal, state,
      or
      local taxes of any kind required by law to be withheld with respect to such
      amount. Unless otherwise determined by the Committee, withholding obligations
      may be settled with Stock, including Stock that is part of the award that gives
      rise to the withholding requirement. The obligations of the Company under the
      Plan shall be conditional on such payment or arrangements and the Company and
      its Subsidiaries or Affiliates shall, to the extent permitted by law, have
      the
      right to deduct any such taxes from any payment of any kind otherwise due to
      the
      participant.

     

    (e) The
      actual or deemed reinvestment of dividends or dividend equivalents in additional
      Restricted Stock (or in Deferred Stock or other types of Plan awards) at the
      time of any dividend payment shall only be permissible if sufficient shares
      of
      Stock are available under Section 3 of the Plan for such reinvestment (taking
      into account then outstanding Stock Options, Stock Purchase Rights and other
      Plan awards).

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    

    15. Effective
      Date of Plan.

     

    he
      Plan
      shall be effective as of the date the Plan is approved by the Board, subject
      to
      the approval of the Plan by a majority of the votes cast by the holders of
      the
      Company’s Stock at the next annual or special meeting of stockholders. Any
      grants made under the Plan prior to such approval shall be effective when made
      (unless otherwise specified by the Committee at the time of grant), but shall
      be
      conditioned on, and subject to, such approval of the Plan by such
      stockholders.

     

    16. Term
      of Plan.

     

    Stock
      Option, Stock Appreciation Right, Restricted Stock award, Deferred Stock award,
      Stock Purchase Right or Other Stock-Based Award may be granted pursuant to
      the
      Plan, until ten (10) years from the date the Plan was approved by the Board,
      unless the Plan shall be terminated by the Board, in its discretion, prior
      to
      such date, but awards granted prior to such termination may extend beyond that
      date.

     

     

    
      
         

      

      
        -15-

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