Document:

Terminiation Agreement Ferretti

Exhibit 10.12

    TERMINATION
      AGREEMENT

    

    

    

    THIS
      AGREEMENT
      ("Agreement") made as of this 1st day of January 2007, by and between
PEOPLES
      FINANCIAL SERVICES CORP.,
      a
      Pennsylvania corporation ("Peoples") and JOSEPH
      M. FERRETTI
      (the
“Executive”).

    

    WITNESSETH:

    

    WHEREAS,
      Peoples
      is engaged in the business of a bank holding company and is the owner of all
      the
      issued and outstanding capital stock of Peoples National Bank (the "Bank");
      and

    

    WHEREAS,
      the
      Executive is presently serving as Vice President of the Bank; and

    

    WHEREAS,
      Peoples
      considers the continued services of the Executive to be in the best interests
      of
      Peoples and its shareholders and desires to induce the Executive to remain
      in
      the employ of the Bank on an impartial and objective basis in the event of
      a
      change in control of Peoples.

    

    AGREEMENT

    

    

    NOW,
      THEREFORE,
      the
      parties hereto, intending to be legally bound, hereby agree as
      follows:

    

    1. Term
      of Agreement.

    

    (a) The
      term
      of this Agreement shall:

    

    (i) initially
      be a term commencing as of January 1, 2007, and ending on December 31, 2008;
      and

    

    (ii) be
      automatically extended to provide for a two (2) year term, annually, on January
      1, 2008, and again on January 1 of each year thereafter, effective as of such
      respective dates, unless either Peoples or the Executive shall have given
      written notice of nonextension of the term of this Agreement to the other at
      least ninety (90) days before the date of any such extension.

    

    (b) Notwithstanding
      the provisions of Section 1(a) of this Agreement, this Agreement shall terminate
      automatically upon termination by Peoples of the Executive's employment for
      Cause. As used in this Agreement, "Cause" shall mean the following:

    

    (i) the
      Executive is convicted of or enters a plea of guilty or nolo contendere to
      a
      felony, a crime of falsehood, or a crime involving fraud or moral turpitude,
      or
      the actual incarceration of the Executive for a period of forty-five (45)
      consecutive days;

    

    (ii) the
      Executive willfully fails to follow the lawful, good faith instructions of
      the
      Board of Directors of Peoples after the Executive's receipt of written notice
      of
      such instructions, other than a failure resulting from the Executive's
      incapacity because of physical or mental illness; or

    

    (iii) any
      government regulatory agency orders that Peoples terminate the employment of
      the
      Executive or relieve him of his duties.

    

    Notwithstanding
      the foregoing, the Executive's employment under this Agreement shall not be
      deemed to have been terminated for "Cause" under Clause (i) or (ii) above if
      such termination took place solely as a result of:

    

    (i) questionable
      judgment on the part of the Executive;

    

    (ii) any
      act
      or omission believed by the Executive, in good faith, to have been in, or not
      opposed to, the best interests of Peoples or its affiliated companies;
      or

    

    (iii) any
      act
      or omission in respect of which a determination could properly be made that
      the
      Executive met the applicable standard of conduct prescribed for indemnification
      or reimbursement or payment of expenses under the Charter or Bylaws of Peoples
      (or its affiliates) or the directors' and officers' liability insurance of
      Peoples (or its affiliates), in each case as in effect at the time of such
      act
      or omission.

    

    If
      the
      Executive's employment is terminated for Cause, the Executive's rights under
      this Agreement shall cease as of the effective date of such
      termination.

    

    (c) Notwithstanding
      the provisions of Section 1(a) of this Agreement, this Agreement shall terminate
      automatically upon termination of the Executive's employment as a result of
      the
      Executive's voluntary termination (other than in accordance with Section 2
      of
      this Agreement), retirement at the Executive's election, or death, and the
      Executive's rights under this Agreement shall cease as of the date of such
      voluntary termination, retirement at the Executive's election, or death;
      provided, however, that if the Executive dies after a Notice of Termination
      (as
      defined in Section 2(a) of this Agreement) is delivered by the Executive, the
      provisions of Section 11(b) of this Agreement shall apply.

    

    (d) Notwithstanding
      the provisions of Section 1(a) of this Agreement, this Agreement shall terminate
      automatically upon termination of the Executive's employment as a result of
      the
      Executive's disability and the Executive's rights under this Agreement shall
      cease as of the date of such termination. For purposes of this Agreement,
      "disability" shall mean the Executive's incapacitation by accident, sickness,
      or
      otherwise that renders the Executive mentally or physically incapable of
      performing the services therefore required of the Executive for a continuous
      period of six (6) months.

    

    2. Termination
      Following Change in Control.

    

    (a) If
      a
      Change in Control (as defined in Section 2(b) of this Agreement) shall occur
      and
      if thereafter, at any time during the term of this Agreement, the Executive
      shall be involuntarily terminated or there shall be:

    

    (i) any
      reduction in title or a reduction in the Executive's responsibilities or
      authority with respect to Peoples or the Bank, including such responsibilities
      and authority as the same may be increased at any time during the term of this
      Agreement, or the assignment to the Executive of duties inconsistent with the
      Executive's prior status as a Vice President of the Bank;

    

    (ii) any
      reassignment of the Executive which requires the Executive to move his principal
      residence;

    

    (iii) any
      removal of the Executive from office or any adverse change in the terms and
      conditions of the Executive's employment, except for any termination of the
      Executive's employment under the provisions of Section 1(b) hereof;

    

    (iv) any
      reduction in the Executive's annual base salary as in effect on the date hereof
      or as the same may be increased from time to time;

    

    (v) any
      failure of Peoples to provide the Executive with benefits at least as favorable
      as those enjoyed by the Executive under any of the pension, life insurance,
      medical, health, accident, disability or other employee benefit plans of Peoples
      (or any affiliated company) in which the Executive participated at the time
      of
      the Change in Control, or the taking of any action that would materially reduce
      any of such benefits in effect at the time of the Change in Control, unless
      such
      reduction is part of a reduction applicable to all employees;

    

    (vi) any
      failure to obtain a satisfactory agreement from any successor to assume and
      agree to perform under this Agreement, as contemplated in Section 11(a)
      hereof;

    

    (vii) any
      material change in the legal relationship between Peoples and the Bank;
      or

    

    (viii) any
      material breach of this Agreement on the part of Peoples;

    

    then,
      at
      the option of the Executive, exercisable by the Executive within one hundred
      twenty (120) days of the occurrence of each and every of the foregoing
      enumerated events, the Executive may resign from employment with Peoples (or,
      if
      involuntarily terminated, give notice of intention to collect benefits under
      this Agreement) by delivering a notice in writing (the "Notice of Termination")
      to Peoples, and the provisions of Section 3 of this Agreement shall
      apply.

    

    (b) As
      used
      in this Agreement, "Change in Control" means a change of control of a nature
      that would be required to be reported in response to Item 6(e) of Schedule
      14A
      of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
      amended (the "Exchange Act"), as enacted and in force on the date hereof,
      whether or not Peoples is then subject to such reporting requirement; provided,
      however, that, without limitation, such a Change in Control shall be deemed
      to
      have occurred if:

    

    (i) any
      "person" (including a group acting in concert, as the term "person" is defined
      in Section 13(d) of the Exchange Act, as enacted and in force on the date
      hereof) becomes the "beneficial owner" (as that term is defined in Rule 13d-3,
      as enacted and in force on the date hereof, under the Exchange Act) of
      securities of Peoples representing more than 19.9% of the combined voting power
      of Peoples' securities then outstanding;

    

    (ii) there
      occurs a merger, consolidation or other business combination or reorganization
      to which Peoples or the Bank is a party, whether or not approved in advance
      by
      the Board of Directors of Peoples or the Bank (as the case may be) in which
      the
      members of the Board of Directors of Peoples or the Bank (as the case may be)
      immediately preceding the consummation of such transaction do not constitute
      a
      majority of the members of the Board of Directors of the resulting corporation
      and of any parent corporation thereof immediately after the consummation of
      such
      transaction;

    

    (iii) there
      occurs a sale, exchange, transfer, or other disposition of substantially all
      of
      the assets of Peoples or the Bank to another entity, which is not approved
      in
      advance by the Board of Directors of Peoples;

    

    (iv) there
      occurs a contested proxy solicitation of the stockholders of Peoples that
      results in the contesting party obtaining the ability to elect candidates to
      a
      majority of the positions on Peoples' Board of Directors next up for election;
      or

    

    (v) there
      occurs a tender offer for the shares of voting securities of Peoples that
      results in the tender offeror obtaining securities representing more than 19.9%
      of the combined voting power of Peoples' securities then
      outstanding.

    

    3. Rights
      in Event of Certain Termination of Employment After Change in
      Control.
      In the
      event that Executive resigns from employment in accordance with the provisions
      of Section 2(a), or Executive's employment is terminated by Peoples without
      Cause after a Change in Control, Peoples shall pay (or cause to be paid) to
      the
      Executive in cash, within twenty (20) days following termination, an amount
      equal to 2.00 times his "base amount" (within the meaning of Section 280G(b)(3)
      of the Internal Revenue Code of 1986, as amended (the "Code")), calculated
      as
      though the occurrence of the Change in Control were an event described in Code
      Section 280G(b)(2)(A)(1).

    

    Notwithstanding
      the preceding sentence, in the event the lump sum payment described in the
      preceding sentence, when added to all other amounts or benefits provided to
      or
      on behalf of the Executive in connection with his termination of employment,
      would result in the imposition of an excise tax under Code Section 4999, such
      lump sum shall be reduced to the extent necessary to avoid such
      imposition.

    

    4. Legal
      Expenses.
      Peoples
      shall pay to the Executive all legal fees and expenses incurred by the Executive
      in seeking in good faith to obtain or enforce any right or benefit provided
      by
      the Agreement, provided that any action or proceeding is not summarily decided
      against the Executive.

    

    5. Arbitration.
      Peoples
      and the Executive recognize that in the event a dispute should arise between
      them concerning the interpretation or implementation of this Agreement, lengthy
      and expensive litigation will not afford a practical resolution of the issues
      within a reasonable period of time. Consequently, each party agrees that all
      disputes, disagreements and questions of interpretation concerning this
      Agreement are to be submitted for resolution to the American Arbitration
      Association (the "Association") in Scranton, Pennsylvania. Peoples, or the
      Executive, may initiate an arbitration proceeding at any time by giving notice
      to the other in accordance with the rules of the Association. The Association
      shall designate a single arbitrator to conduct the proceeding, but Peoples,
      and
      the Executive, may, as a matter of right, require the substitution of a
      different arbitrator chosen by the Association. Each such right of substitution
      may be exercised only once. The arbitrator shall not be bound by the rules
      of
      evidence and procedure of the courts of the Commonwealth of Pennsylvania but
      shall be bound by the substantive law applicable to this Agreement. The decision
      of the arbitrator, absent fraud, duress, incompetence or gross and obvious
      error
      of fact, shall be final and binding upon the parties and shall be enforceable
      in
      courts of proper jurisdiction. Following written notice of a request for
      arbitration, Peoples, and the Executive, shall be entitled to an injunction
      restraining all further proceedings in any pending or subsequently filed
      litigation concerning this Agreement. Notwithstanding the preceding provisions
      of this section, in the event any such provision is in conflict with a rule
      or
      policy of the Association, the arbitration proceeding shall be governed by
      such
      rule or policy.

    

    6. Mitigation
      of Damages.
      The
      Executive shall not be required to mitigate the amount of any payment provided
      for in Section 3 by seeking other employment or otherwise, nor shall the amount
      of any payment or benefit provided for in Section 3 be reduced by any
      compensation earned by the Executive as the result of employment by another
      employer or by reason of the Executive's receipt of or right to receive any
      retirement or other benefits after the date of termination of employment or
      otherwise; provided, however, that the payments provided for in Section 3 shall
      be reduced by the amount actually received by the Executive under any severance
      policy of Peoples then in effect.

    

    7. Notices.
      Any
      notice required or permitted to be given under this Agreement shall be deemed
      properly given if in writing and if mailed by registered or certified mail,
      postage prepaid with return receipt requested, to the residence of the
      Executive, in the case of notices to the Executive, and to the principal office
      of Peoples, in the case of notices to Peoples.

    

    8. Waiver.
      No
      provision of this Agreement may be modified, waived, or discharged unless such
      waiver, modification, or discharge is agreed to in writing and signed by the
      Executive and an executive officer of Peoples specifically designated by the
      Board of Directors of Peoples. No waiver by either party hereto at any time
      of
      any breach by the other party hereto of, or compliance with, any condition
      or
      provision of this Agreement to be performed by such other party shall be deemed
      a waiver of similar or dissimilar provisions or conditions at the same or at
      any
      prior or subsequent time.

    

    9. Assignment.
      This
      Agreement shall not be assignable by either party, except by Peoples to any
      successor in interest to the business of Peoples.

    

    10. Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties relating to the subject
      matter of this Agreement.

    

    11. Successors;
      Binding Agreement.

    

    (a) Peoples
      will require any successor (whether direct or indirect, by purchase, merger,
      consolidation, or otherwise) to all or substantially all of the business and/or
      assets of Peoples to expressly assume and agree to perform this Agreement in
      the
      same manner and to the same extent that Peoples would be required to perform
      it
      if no such succession had taken place. Failure by Peoples to obtain such
      assumption and agreement prior to the effectiveness of any such succession
      shall
      constitute a breach of this Agreement and the provisions of Section 3 of this
      Agreement shall apply. As used in this Agreement, "Peoples" shall mean Peoples
      as hereinbefore defined and any successor to the respective businesses and/or
      assets of Peoples which assumes and agrees to perform this Agreement by
      operation of law or otherwise.

    

    (b) This
      Agreement shall inure to the benefit of and be enforceable by the Executive's
      personal or legal representatives, executors, administrators, heirs,
      distributees, devisees, and legatees. If the Executive should die after a Notice
      of Termination is delivered by the Executive and any amounts would be payable
      to
      the Executive under this Agreement if the Executive had continued to live,
      all
      such amounts shall be paid in accordance with the terms of this Agreement to
      the
      Executive's devisee, legatee, or other designee, or, if there is none, to the
      Executive's estate.

    

    12. Validity.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect.

    

    13. Applicable
      Law.
      This
      Agreement shall be governed by and construed in accordance with the domestic
      laws (but not the law of conflict of laws) of the Commonwealth of
      Pennsylvania.

    

    14. Headings.
      The
      headings of the sections of this Agreement are for convenience only and shall
      not control or affect the meaning or construction or limit the scope or intent
      of any of the provisions of this Agreement.

    

    15. Termination
      of Prior Agreements.
      Upon
      the execution and delivery of this Agreement by the parties hereto, any prior
      agreement relating to the subject matter hereof shall be automatically
      terminated and be of no further force or effect.

    

    16. 409A
      Safe Harbor.
      Notwithstanding anything in this Agreement to the contrary, in no event shall
      Peoples be obligated to commence payment or distribution to the Executive of
      any
      amount that constitutes nonqualified deferred compensation within the meaning
      of
      Internal Revenue Code Section 409A (“CODE SECTION 409A”) earlier that the
      earliest permissible date under Code Section 409A that such amount could be
      paid
      without additional taxes or interest being imposed under Code Section 409A.
      Peoples and the Executive agree that they will execute any and all amendments
      to
      this Agreement as they mutually agree in good faith may be necessary to ensure
      compliance with the distribution provisions of Code Section 409A and to cause
      any and all amounts due under this Agreement, the payment or distribution of
      which is delayed pursuant to Code Section 409A, to be paid or distributed in
      a
      single sum payment at the earliest permissible date under Code Section
      409A.

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

    

    PEOPLES
      FINANCIAL SERVICES CORP.

    

    

    By:
            

    President

    (SEAL)

    

    Attest:
           

    (Assistant)
      Secretary 

    

    

    Witness:      EXECUTIVE

     

    Joseph
      M.
      Ferretti2007 Stock Incentive Plan

     

    Exhibit
      10.1

     

    [COSTAR
      LOGO]

     

    COSTAR
      GROUP, INC.

    2007
      STOCK INCENTIVE PLAN

     

    1.  Purpose

     

    The
      purpose of the CoStar Group, Inc. 2007 Stock Incentive Plan (the “Plan”) is to
      advance the interests of CoStar Group, Inc. (the “Company”) by enabling the
      Company and its subsidiaries to attract, retain and motivate employees of the
      Company by providing for or increasing the proprietary interests of such
      individuals in the Company, and by enabling the Company to attract, retain
      and
      motivate its nonemployee directors and further align their interests with those
      of the shareholders of the Company by providing for or increasing the
      proprietary interests of such directors in the Company. The Plan provides for
      the grant of Incentive and Nonqualified Stock Options, Stock Appreciation
      Rights, Restricted Stock and Restricted Stock Units, any of which may be
      performance-based, as determined by the Committee. 

     

    2.  Definitions

     

    As
      used
      in the Plan, the following terms shall have the meanings set forth
      below:

     

    (a)  “Award”
      means an Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation
      Right, Restricted Stock, or Restricted Stock Unit granted to a Participant
      pursuant to the provisions of the Plan, any of which the Committee may structure
      to qualify in whole or in part as a Performance Award.

     

    (b)  “Award
      Agreement” means a written agreement or other instrument as may be approved from
      time to time by the Committee implementing the grant of each Award. An Agreement
      may be in the form of an agreement to be executed by both the Participant and
      the Company (or an authorized representative of the Company) or certificates,
      notices or similar instruments as approved by the Committee.

     

    (c)  “Board”
      means the board of directors of the Company.

     

    (d)  “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, and
      the
      rulings and regulations issues thereunder.

     

    (e)  “Committee”
      means the Committee delegated the authority to administer the Plan in accordance
      with Section 16.

     

    (f)  “Common
      Share” means a share of the Company’s common stock, subject to adjustment as
      provided in Section 11.

     

    (g)  “Company”
      means CoStar Group, Inc., a Delaware corporation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)  “Fair
      Market Value” means,
      as
      of any given date, the closing sales price on such date during normal trading
      hours (or, if there are no reported sales on such date, on the last date prior
      to such date on which there were sales) of the Common Shares on NASDAQ, the
      New
      York Stock Exchange Composite Tape or, if not listed on such exchanges, on
      any
      other national securities exchange on which the Common Shares are listed, in
      any
      case, as reporting in such source as the Committee shall select. If there is
      no
      regular public trading market for such Common Shares, the Fair Market Value
      of
      the Common Shares shall be determined by the Committee in good faith and in
      compliance with Section 409A of the Code.

     

    (i)  “Incentive
      Stock Option” means a stock option that is intended to qualify as an “incentive
      stock option” within the meaning of Section 422 of the Code.

     

    (j)  “Nonemployee
      Director” means each person who is, or is elected to be, a member of the Board
      or the board of directors of any Subsidiary and who is not an employee of the
      Company or any Subsidiary. 

     

    (k)  “Nonqualified
      Stock Option” means a stock option that is not intended to qualify as an
“incentive stock option” within the meaning of Section 422 of the
      Code.

     

    (l)  “Option”
      means an Incentive Stock Option and/or a Nonqualified Stock Option granted
      pursuant to Section 6 of the Plan.

     

    (m)  “Participant”
      means any individual described in Section 3 to whom Awards have been
      granted from time to time by the Committee and any authorized transferee of
      such
      individual.

     

    (n)  “Performance
      Award” means an Award, the grant, issuance, retention, vesting or settlement of
      which is subject to satisfaction of one or more performance criteria pursuant
      to
      Section 12.

     

    (o)  “Plan”
      means the CoStar Group, Inc. 2007 Stock Incentive Plan as set forth herein
      and
      as
      amended from time to time.

     

    (p)  “Prior
      Plan” means the CoStar Group, Inc. 1998 Stock Incentive Plan.

     

    (q)  “Qualifying
      Performance Criteria” has the meaning set forth in
      Section 12(b).

     

    (r)  “Restricted
      Stock” means Common Shares granted pursuant to Section 8 of the
      Plan.

     

    (s)  “Restricted
      Stock Unit” means an Award granted to a Participant pursuant to Section 8
      pursuant to which Common Shares or cash in lieu thereof may be issued in the
      future.

     

    (t)  “Stock
      Appreciation Right” means a right granted pursuant to Section 7 of the Plan
      that entitles the Participant to receive, in cash or Common Shares or a
      combination thereof, as determined by the Committee, value equal to or otherwise
      based on the excess of (i) the market price of a specified number of Common
      Shares at the time of exercise over (ii) the exercise price of the right, as
      established by the Committee on the date of grant.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (u)  “Subsidiary”
      means any corporation (other than the Company) in an unbroken chain of
      corporations beginning with the Company where each of the corporations in the
      unbroken chain other than the last corporation owns stock possessing at least
      50
      percent or more of the total combined voting power of all classes of stock
      in
      one of the other corporations in the chain, and if specifically determined
      by
      the Committee in the context other than with respect to Incentive Stock Options,
      may include an entity in which the Company has a significant ownership interest
      or that is directly or indirectly controlled by the Company.

     

    (v)  “Substitute
      Awards” means Awards granted or Common Shares issued by the Company in
      assumption of, or in substitution or exchange for, awards previously granted,
      or
      the right or obligation to make future awards, by a corporation acquired by
      the
      Company or any Subsidiary or with which the Company or any Subsidiary
      combines.

     

    3.  Eligibility

     

    Any
      person who is an officer or employee of the Company or of any Subsidiary
      (including any director who is also an employee, in his or her capacity as
      such)
      shall be eligible for selection by the Committee for the grant of Awards
      hereunder. In addition, Nonemployee Directors shall be eligible for the grant
      of
      Awards hereunder as determined by the Committee. In addition any service
      provider who has been retained to provide consulting, advisory or other services
      to the Company or to any Subsidiary shall be eligible for selection by the
      Committee for the grant of Awards hereunder. Options intending to qualify as
      Incentive Stock Options may only be granted to employees of the Company or
      any
      Subsidiary within the meaning of the Code, as selected by the
      Committee.

     

    4.  Effective
      Date and Termination of Plan

     

    This
      Plan
      was adopted by the Board and became effective as of April 26, 2007 (the
“Effective Date”), subject to the approval by the Company’s
      stockholders.
      All
      Awards granted under this Plan are subject to, and may not be exercised before,
      the approval of this Plan by the stockholders prior to the first anniversary
      date of the effective date of the Plan by the affirmative vote of the holders
      of
      a majority of the outstanding Common Shares of the Company present, or
      represented by proxy, and entitled to vote, at a meeting of the Company’s
      stockholders or by written consent in accordance with the laws of the State
      of
      Delaware; provided that if such approval by the stockholders of the Company
      is
      not forthcoming, all Awards previously granted under this Plan shall be void.
      The Plan shall remain available for the grant of Awards until the tenth (10th)
      anniversary of the Effective Date. Notwithstanding the foregoing, the Plan
      may
      be terminated at such earlier time as the Board may determine. Termination
      of
      the Plan will not affect the rights and obligations of the Participants and
      the
      Company arising under Awards theretofore granted and then in
      effect.

     

    5.  Common
      Shares Subject to the Plan and to Awards

     

    (a)  Aggregate
      Limits.
      The
      aggregate number of Shares issuable pursuant to all Awards shall not exceed
      1,000,000 shares, plus (i) any Shares that were authorized for issuance
      under the Prior Plan that, as of June 7, 2007, remain available for issuance
      under the Prior Plan (not including any Shares that are subject to, as of June
      7, 2007, outstanding awards under the

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

      Prior
        Plan or any Shares that prior to June 7, 2007 were issued pursuant to awards
        granted under the Prior Plan) and (ii) any Shares subject to outstanding
        awards under the Prior Plan as of June 7, 2007 that on or after such date
        cease
        for any reason to be subject to such awards (other than by reason of exercise
        or
        settlement of the awards to the extent they are exercised for or settled
        in
        vested and nonforfeitable shares). The
        aggregate number of Common Shares available for grant under this Plan and
        the
        number of Common Shares subject to outstanding Awards shall be subject to
        adjustment as provided in Section 11. The Common Shares issued pursuant to
        Awards granted under this Plan may be shares that are authorized and unissued
        or
        shares that were reacquired by the Company, including shares purchased in
        the
        open market.

    

     

    (b)  Issuance
      of Common Shares.
      For
      purposes of this Section 5, the aggregate number of Common Shares available
      for Awards under this Plan at any time shall not be reduced by (i) shares
      subject to Awards that have been terminated, expired unexercised, forfeited
      or
      settled in cash, (ii) shares subject to Awards that have been retained by
      the Company in payment or satisfaction of the exercise price, purchase price
      or
      tax withholding obligation of an Award, or (iii) shares subject to Awards
      that otherwise do not result in the issuance of Common Shares in connection
      with
      payment or settlement of an Award. In addition, Common Shares that have been
      delivered (either actually or by attestation) to the Company in payment or
      satisfaction of the exercise price, purchase price or tax withholding obligation
      of an Award shall be available for Awards under this Plan.

     

    (c)  Tax
      Code Limits.
      The
      aggregate number of Common Shares subject to Awards granted under this Plan
      during any calendar year to any one Participant shall not exceed 200,000, which
      number shall be calculated and adjusted pursuant to Section 11 only to the
      extent that such calculation or adjustment will not affect the status of any
      Award intended to qualify as “performance based compensation” under
      Section 162(m) of the Code but which number shall not count any tandem SARs
      (as defined in Section 7). Any Common Shares that may be
      issued under this Plan may be issued pursuant to the exercise of Incentive
      Stock Options.

     

    (d)  Substitute
      Awards. Substitute
      Awards shall not reduce the Common Shares authorized for issuance under the
      Plan
      or authorized for grant to a Participant in any calendar year. Additionally,
      in
      the event that a corporation acquired by the Company or any Subsidiary, or
      with
      which the Company or any Subsidiary combines, has shares available under a
      pre-existing plan approved by shareholders and not adopted in contemplation
      of
      such acquisition or combination, the shares available for grant pursuant to
      the
      terms of such pre-existing plan (as adjusted, to the extent appropriate, using
      the exchange ratio or other adjustment or valuation ratio or formula used in
      such acquisition or combination to determine the consideration payable to the
      holders of common stock of the entities party to such acquisition or
      combination) may be used for Awards under the Plan and shall not reduce the
      Common Shares authorized for issuance under the Plan; provided that Awards
      using
      such available shares shall not be made after the date awards or grants could
      have been made under the terms of the pre-existing plan, absent the acquisition
      or combination, and shall only be made to individuals who were not employees,
      directors or consultants of the Company or its Subsidiaries immediately before
      such acquisition or combination. 

     

    
      
        
        

      

      
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    6.  Options

     

    (a)  Option
      Awards.
      Options
      may be granted at any time and from time to time prior to the termination of
      the
      Plan to Participants as determined by the Committee. No Participant shall have
      any rights as a stockholder with respect to any Common Shares subject to Option
      hereunder until said Common Shares have been issued, except that the Committee
      may authorize dividend equivalent accruals with respect to such Common Shares.
      Each Option shall be evidenced by an Award Agreement. Options granted pursuant
      to the Plan need not be identical but each Option must contain and be subject
      to
      the terms and conditions set forth below.

     

    (b)  Price.
      The
      Committee will establish the exercise price per Common Share under each Option,
      which, in no event will be less than the Fair Market Value of the Common Shares
      on the date of grant; provided, however, that the exercise price per Common
      Share with respect to an Option that is granted in connection with a merger
      or
      other acquisition as a substitute or replacement award for options held by
      optionees of the acquired entity may be less than 100% of the market price
      of
      the Common Shares on the date such Option is granted if such exercise price
      is
      based on a formula set forth in the terms of the options held by such optionees
      or in the terms of the agreement providing for such merger or other acquisition.
      The exercise price of any Option may be paid in Common Shares, cash, certified
      check, money order or a combination thereof, as determined by the Committee,
      including an irrevocable commitment by a broker to pay over such amount from
      a
      sale of the Common Shares issuable under an Option, the delivery of previously
      owned Common Shares and withholding of Common Shares deliverable upon
      exercise.

     

    (c)  No
      Repricing.
      Other
      than in connection with a change in the Company’s capitalization (as described
      in Section 11) the exercise price of an Option may not be reduced without
      stockholder approval (including canceling previously awarded Options and
      regranting them with a lower exercise price).

     

    (d)  Provisions
      Applicable to Options.
      The
      date on which Options become exercisable shall be determined at the sole
      discretion of the Committee and set forth in an Award Agreement. Unless provided
      otherwise in the applicable Award Agreement, to the extent that the Committee
      determines that an approved leave of absence or employment on a less than
      full-time basis is not a Termination of employment, the vesting period and/or
      exercisability of an Option shall be adjusted by the Committee during or to
      reflect the effects of any period during which the Participant is on an approved
      leave of absence or is employed on a less than full-time basis. 

     

    (e)  Term
      of Options and Termination of Employment:
      The
      Committee shall establish the term of each Option, which in no case shall exceed
      a period of ten (10) years from the date of grant. Unless an Option earlier
      expires upon the expiration date established pursuant to the foregoing sentence,
      upon the termination of the Participant’s employment, his or her rights to
      exercise an Option then held shall be determined by the Committee and set forth
      in an Award Agreement.

     

    (f)  Incentive
      Stock Options.
      Notwithstanding anything to the contrary in this Section 6, in the case of
      the grant of an Option intending to qualify as an Incentive Stock Option:
      (i) if the Participant owns stock possessing more than 10 percent of the
      combined voting power

     

    
      
        
        

      

      
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      of
        all
        classes of stock of the Company (a “10% Common Shareholder”), the exercise price
        of such Option must be at least 110 percent of the Fair Market Value of the
        Common Shares on the date of grant and the Option must expire within a period
        of
        not more than five (5) years from the date of grant, and (ii) termination
        of employment will occur when the person to whom an Award was granted ceases
        to
        be an employee (as determined in accordance with Section 3401(c) of the
        Code and the regulations promulgated thereunder) of the Company and its
        Subsidiaries. Notwithstanding anything in this Section 6 to the contrary,
        options designated as Incentive Stock Options shall not be eligible for
        treatment under the Code as Incentive Stock Options (and will be deemed to
        be
        Nonqualified Stock Options) to the extent that either (a) the aggregate Fair
        Market Value of Common Shares (determined as of the time of grant) with respect
        to which such Options are exercisable for the first time by the Participant
        during any calendar year (under all plans of the Company and any Subsidiary)
        exceeds $100,000, taking Options into account in the order in which they
        were
        granted, or (b) such Options otherwise remain exercisable but are not exercised
        within three (3) months of Termination of employment (or such other period
        of
        time provided in Section 422 of the Code).

    

     

    7.  Stock
      Appreciation Rights

     

    Stock
      Appreciation Rights may be granted to Participants from time to time either
      in
      tandem with or as a component of other Awards granted under the Plan (“tandem
      SARs”) or not in conjunction with other Awards (“freestanding SARs”) and may,
      but need not, relate to a specific Option granted under Section 6. The
      provisions of Stock Appreciation Rights need not be the same with respect to
      each grant or each recipient. Any Stock Appreciation Right granted in tandem
      with an Award may be granted at the same time such Award is granted or at any
      time thereafter before exercise or expiration of such Award. All freestanding
      SARs shall be granted subject to the same terms and conditions applicable to
      Options as set forth in Section 6 and all tandem SARs shall have the same
      exercise price, vesting, exercisability, forfeiture and termination provisions
      as the Award to which they relate. Subject to the provisions of Section 6
      and the immediately preceding sentence, the Committee may impose such other
      conditions or restrictions on any Stock Appreciation Right as it shall deem
      appropriate. Stock Appreciation Rights may be settled in Common Shares, cash
      or
      a combination thereof, as determined by the Committee and set forth in the
      applicable Award Agreement. Other than in connection with a change in the
      Company’s capitalization (as described in Section 11) the exercise price of
      Stock Appreciation Rights may not be reduced without stockholder approval
      (including canceling previously awarded Stock Appreciation Rights and regranting
      them with a lower exercise price).

     

    8.  Restricted
      Stock and Restricted Stock Units

     

    (a)  Restricted
      Stock and Restricted Stock Unit Awards.
      Restricted Stock and Restricted Stock Units may be granted at any time and
      from
      time to time prior to the termination of the Plan to Participants as determined
      by the Committee. Restricted Stock is an award or issuance of Common Shares
      the
      grant, issuance, retention, vesting and/or transferability of which is subject
      during specified periods of time to such conditions (including continued
      employment or performance conditions) and terms as the Committee deems
      appropriate. Restricted Stock Units are Awards denominated in units of Common
      Shares under which the issuance of Common Shares is subject to such conditions
      (including continued employment or performance conditions) and terms as the
      Committee deems appropriate. Each grant of Restricted Stock and 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

      Restricted
        Stock Units shall be evidenced by an Award Agreement. Unless determined
        otherwise by the Committee, each Restricted Stock Unit will be equal to one
        Common Share and will entitle a Participant to either the issuance of Common
        Shares or payment of an amount of cash determined with reference to the value
        of
        Common Shares. To the extent determined by the Committee, Restricted Stock
        and
        Restricted Stock Units may be satisfied or settled in Common Shares, cash
        or a
        combination thereof. Restricted Stock and Restricted Stock Units granted
        pursuant to the Plan need not be identical but each grant of Restricted Stock
        and Restricted Stock Units must contain and be subject to the terms and
        conditions set forth below.

    

     

    (b)  Contents
      of Agreement.
      Each
      Award Agreement shall contain provisions regarding (i) the number of Common
      Shares or Restricted Stock Units subject to such Award or a formula for
      determining such number, (ii) the purchase price of the Common Shares, if any,
      and the means of payment, (iii) the performance criteria, if any, and level
      of
      achievement versus these criteria that shall determine the number of Common
      Shares or Restricted Stock Units granted, issued, retainable and/or vested,
      (iv)
      such terms and conditions on the grant, issuance, vesting and/or forfeiture
      of
      the Common Shares or Restricted Stock Units as may be determined from time
      to
      time by the Committee, (v) the term of the performance period, if any, as
      to which performance will be measured for determining the number of such Common
      Shares or Restricted Stock Units, and (vi) restrictions on the transferability
      of the Common Shares or Restricted Stock Units. Common Shares issued under
      a
      Restricted Stock Award may be issued in the name of the Participant and held
      by
      the Participant or held by the Company, in each case as the Committee may
      provide.

     

    (c)  Vesting
      and Performance Criteria.
      The
      grant, issuance, retention, vesting and/or settlement of shares of Restricted
      Stock and Restricted Stock Units will occur when and in such installments as
      the
      Committee determines or under criteria the Committee establishes, which may
      include Qualifying Performance Criteria; provided, however, that, except in
      the
      case of a change of control of the Company or the death or disability of the
      Participant, vesting of Restricted Stock and Restricted Stock Units shall be
      no
      earlier than three (3) years from the date of grant for Awards not subject
      to
      vesting based on performance criteria and one (1) year from the date of grant
      for Awards that vest based on the achievement of performance criteria.
      Notwithstanding anything in this Plan to the contrary, the performance criteria
      for any Restricted Stock or Restricted Stock Unit that is intended to satisfy
      the requirements for “performance-based compensation” under Section 162(m)
      of the Code will be a measure based on one or more Qualifying Performance
      Criteria selected by the Committee and specified when the Award is
      granted.

     

    (d)  Discretionary
      Adjustments and Limits.
      Subject
      to the limits imposed under Section 162(m) of the Code for Awards that are
      intended to qualify as “performance based compensation,” notwithstanding the
      satisfaction of any performance goals, the number of Common Shares granted,
      issued, retainable and/or vested under an Award of Restricted Stock or
      Restricted Stock Units on account of either financial performance or personal
      performance evaluations may, to the extent specified in the Award Agreement,
      be
      reduced by the Committee on the basis of such further considerations as the
      Committee shall determine.

     

    (e)  Voting
      Rights.
      Unless
      otherwise determined by the Committee, Participants holding shares of Restricted
      Stock granted hereunder may exercise full voting rights with
      respect

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

      to
        those
        shares during the period of restriction. Participants shall have no voting
        rights with respect to Common Shares underlying Restricted Stock Units unless
        and until such Common Shares are reflected as issued and outstanding shares
        on
        the Company’s stock ledger.

    

     

    (f)  Dividends
      and Distributions.
      Participants in whose name Restricted Stock is granted shall be entitled to
      receive all dividends and other distributions paid with respect to those Common
      Shares, unless determined otherwise by the Committee. The Committee will
      determine whether any such dividends or distributions will be automatically
      reinvested in additional shares of Restricted Stock and subject to the same
      restrictions on transferability as the Restricted Stock with respect to which
      they were distributed or whether such dividends or distributions will be paid
      in
      cash. Common Shares underlying Restricted Stock Units shall be entitled to
      dividends or dividend equivalents only to the extent provided by the
      Committee.

     

    9.  Deferral
      of Gains

     

    The
      Committee may, in an Award Agreement or otherwise, provide for the deferred
      delivery of Common Shares upon settlement, vesting or other events with respect
      to Restricted Stock or Restricted Stock Units. Notwithstanding anything herein
      to the contrary, in no event will any deferral of the delivery of Common Shares
      or any other payment with respect to any Award be allowed if the Committee
      determines, in its sole discretion, that the deferral would result in the
      imposition of the additional tax under Section 409A(a)(1)(B) of the
      Code.

     

    10.  Conditions
      and Restrictions Upon Securities Subject to Awards

     

    The
      Committee may provide that the Common Shares issued upon exercise of an Option
      or Stock Appreciation Right or otherwise subject to or issued under an Award
      shall be subject to such further agreements, restrictions, conditions or
      limitations as the Committee in its discretion may specify prior to the exercise
      of such Option or Stock Appreciation Right or the grant, vesting or settlement
      of such Award, including without limitation, conditions on vesting or
      transferability, forfeiture or repurchase provisions and method of payment
      for
      the Common Shares issued upon exercise, vesting or settlement of such Award
      (including the actual or constructive surrender of Common Shares already owned
      by the Participant) or payment of taxes arising in connection with an Award.
      Without limiting the foregoing, such restrictions may address the timing and
      manner of any resales by the Participant or other subsequent transfers by the
      Participant of any Common Shares issued under an Award, including without
      limitation (i) restrictions under an insider trading policy or pursuant to
      applicable law, (ii) restrictions designed to delay and/or coordinate the timing
      and manner of sales by Participant and holders of other Company equity
      compensation arrangements, (iii) restrictions as to the use of a specified
      brokerage firm for such resales or other transfers, and (iv) provisions
      requiring Common Shares to be sold on the open market or to the Company in
      order
      to satisfy tax withholding or other obligations.

     

    11.  Adjustment
      of and Changes in the Stock

     

    The
      number and kind of Common Shares available for issuance under this Plan
      (including under any Awards then outstanding), and the number and kind of Common
      Shares subject to the limits set forth in Section 5 of this Plan, shall be
      equitably adjusted by the

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

      Committee
        to reflect any reorganization, reclassification, combination of shares, stock
        split, reverse stock split, spin-off, dividend or distribution of securities,
        property or cash (other than regular, quarterly cash dividends), or any other
        equity restructuring transaction, as that term is defined in Statement of
        Financial Accounting Standards No. 123 (revised). Such adjustment may be
        designed to comply with Section 425 of the Code or, except as otherwise
        expressly provided in Section 5(c) of this Plan, may be designed to treat
        the Common Shares available under the Plan and subject to Awards as if they
        were
        all outstanding on the record date for such event or transaction or to increase
        the number of such Common Shares to reflect a deemed reinvestment in Common
        Shares of the amount distributed to the Company’s securityholders. The terms of
        any outstanding Award shall also be equitably adjusted by the Committee as
        to
        price, number or kind of Common Shares subject to such Award, vesting, and
        other
        terms to reflect the foregoing events, which adjustments need not be uniform
        as
        between different Awards or different types of Awards.

    

     

    In
      the
      event there shall be any other change in the number or kind of outstanding
      Common Shares, or any stock or other securities into which such Common Shares
      shall have been changed, or for which it shall have been exchanged, by reason
      of
      a change of control, other merger, consolidation or otherwise in circumstances
      that do not involve an equity restructuring transaction, as that term is defined
      in Statement of Financial Accounting Standards No. 123 (revised), then the
      Committee shall determine the appropriate adjustment, if any, to be effected.
      In
      addition, in the event of such change described in this paragraph, the Committee
      may accelerate the time or times at which any Award may be exercised and may
      provide for cancellation of such accelerated Awards that are not exercised
      within a time prescribed by the Committee in its sole discretion. 

     

    No
      right
      to purchase fractional shares shall result from any adjustment in Awards
      pursuant to this Section 11. In case of any such adjustment, the Common
      Shares subject to the Award shall be rounded down to the nearest whole share.
      The Company shall notify Participants holding Awards subject to any adjustments
      pursuant to this Section 11 of such adjustment, but (whether or not notice
      is given) such adjustment shall be effective and binding for all purposes of
      the
      Plan.

     

    12.  Qualifying
      Performance-Based Compensation

     

    (a)  General.
      The
      Committee may establish performance criteria and level of achievement versus
      such criteria that shall determine the number of Common Shares, units, or cash
      to be granted, retained, vested, issued or issuable under or in settlement
      of or
      the amount payable pursuant to an Award, which criteria may be based on
      Qualifying Performance Criteria or other standards of financial performance
      and/or personal performance evaluations. In addition, the Committee may specify
      that an Award or a portion of an Award is intended to satisfy the requirements
      for “performance-based compensation” under Section 162(m) of the Code,
      provided that the performance criteria for such Award or portion of an Award
      that is intended by the Committee to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall be
      a measure based on one or more Qualifying Performance Criteria selected by
      the
      Committee and specified at the time the Award is granted. The Committee shall
      certify the extent to which any Qualifying Performance Criteria has been
      satisfied, and the amount payable as a result thereof, prior to payment,
      settlement or vesting of

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

      any
        Award
        that is intended to satisfy the requirements for “performance-based
        compensation” under Section 162(m) of the Code. Notwithstanding
        satisfaction of any performance goals, the number of Common Shares issued
        under
        or the amount paid under an award may, to the extent specified in the Award
        Agreement, be reduced by the Committee on the basis of such further
        considerations as the Committee in its sole discretion shall
        determine.

    

     

    (b)  Qualifying
      Performance Criteria.
      For
      purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any
      one or more of the following performance criteria, either individually,
      alternatively or in any combination, applied to either the Company as a whole
      or
      to a business unit or Subsidiary, either individually, alternatively or in
      any
      combination, and measured either annually or cumulatively over a period of
      years, on an absolute basis or relative to a pre-established target, to previous
      years’ results or to a designated comparison group, in each case as specified by
      the Committee: (i) cash flow (before or after dividends), (ii) earnings or
      earnings per share (including earnings before interest, taxes, depreciation
      and
      amortization), (iii) stock price, (iv) return on equity, (v) total
      stockholder return, (vi) return on capital or investment (including return
      on
      total capital, return on invested capital, or return on investment), (vii)
      return on assets or net assets, (viii) market capitalization, (ix) economic
      value added, (x) debt leverage (debt to capital), (xi) revenue, (xii)
      income or net income, (xiii) operating income, (xiv) operating profit or net
      operating profit, (xv) operating margin or profit margin, (xvi) return on
      operating revenue, (xvii) cash from operations, (xviii) operating ratio, (xix)
      operating revenue, or (xx) customer service. To the extent consistent with
      Section 162(m) of the Code, the Committee (A) shall appropriately
      adjust any evaluation of performance under a Qualifying Performance Criteria
      to
      eliminate the effects of charges for restructurings, discontinued operations,
      extraordinary items and all items of gain, loss or expense determined to be
      extraordinary or unusual in nature or related to the acquisition or disposal
      of
      a segment of a business or related to a change in accounting principle all
      as
      determined in accordance with standards established by opinion No. 30 of
      the Accounting Principles Board (APA Opinion No. 30) or other applicable or
      successor accounting provisions, as well as the cumulative effect of accounting
      changes, in each case as determined in accordance with generally accepted
      accounting principles or identified in the Company’s financial statements or
      notes to the financial statements, and (B) may appropriately adjust any
      evaluation of performance under a Qualifying Performance Criteria to exclude
      any
      of the following events that occurs during a performance period: (i) asset
      write-downs, (ii) litigation, claims, judgments or settlements, (iii) the
      effect of changes in tax law or other such laws or provisions affecting reported
      results, (iv) accruals for reorganization and restructuring programs and
      (v) accruals of any amounts for payment under this Plan or any other
      compensation arrangement maintained by the Company.

     

    13.  Transferability

     

    Unless
      the Committee provides otherwise, each Award may not be sold, transferred,
      pledged, assigned, or otherwise alienated or hypothecated by a Participant
      other
      than by will or the laws of descent and distribution, and each Option or Stock
      Appreciation Right shall be exercisable only by the Participant during his
      or
      her lifetime. 

     

    
      
        
        

      

      
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    14.  Compliance
      with Laws and Regulations

     

    This
      Plan, the grant, issuance, vesting, exercise and settlement of Awards
      thereunder, and the obligation of the Company to sell, issue or deliver Common
      Shares under such Awards, shall be subject to all applicable foreign, federal,
      state and local laws, rules and regulations, stock exchange rules and
      regulations, and to such approvals by any governmental or regulatory agency
      as
      may be required. The Company shall not be required to register in a
      Participant’s name or deliver any Common Shares prior to the completion of any
      registration or qualification of such shares under any foreign, federal, state
      or local law or any ruling or regulation of any government body which the
      Committee shall determine to be necessary or advisable. To the extent the
      Company is unable to or the Committee deems it infeasible to obtain authority
      from any regulatory body having jurisdiction, which authority is deemed by
      the
      Company’s counsel to be necessary to the lawful issuance and sale of any Common
      Shares hereunder, the Company and its Subsidiaries shall be relieved of any
      liability with respect to the failure to issue or sell such Common Shares as
      to
      which such requisite authority shall not have been obtained. No Option shall
      be
      exercisable and no Common Shares shall be issued and/or transferable under
      any
      other Award unless a registration statement with respect to the Common Shares
      underlying such Option is effective and current or the Company has determined
      that such registration is unnecessary.

     

    15.  Withholding

     

    To
      the
      extent required by applicable federal, state, local or foreign law, a
      Participant shall be required to satisfy, in a manner satisfactory to the
      Company, any withholding tax obligations that arise by reason of an Option
      exercise, disposition of Common Shares issued under an Incentive Stock Option,
      the vesting of or settlement of an Award, an election pursuant to
      Section 83(b) of the Code or otherwise with respect to an Award. The
      Company and its Subsidiaries shall not be required to issue Common Shares,
      make
      any payment or to recognize the transfer or disposition of Common Shares until
      such obligations are satisfied. The Committee may provide for or permit the
      minimum statutory withholding obligations to be satisfied through the mandatory
      or elective sale of Common Shares and/or by having the Company withhold a
      portion of the Common Shares that otherwise would be issued to him or her upon
      exercise of the Option or the vesting or settlement of an Award, or by tendering
      Common Shares previously acquired.

     

    16.  Administration
      of the Plan

     

    (a)  Committee
      of the Plan.
      The
      Plan shall be administered by the Compensation Committee of the Board or the
      Board itself. Any power of the Committee may also be exercised by the Board,
      except to the extent that the grant or exercise of such authority would cause
      any Award or transaction to become subject to (or lose an exemption under)
      the
      short-swing profit recovery provisions of Section 16 of the Securities
      Exchange Act of 1934 or cause an Award designated as a Performance Award not
      to
      qualify for treatment as performance-based compensation under
      Section 162(m) of the Code. To the extent that any permitted action taken
      by the Board conflicts with action taken by the Committee, the Board action
      shall control. The Compensation Committee may by resolution authorize one or
      more officers of the Company to perform any or all things that the Committee
      is
      authorized and empowered to do or perform

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

      under
        the
        Plan, and for all purposes under this Plan, such officer or officers shall
        be
        treated as the Committee; provided, however, that the resolution so authorizing
        such officer or officers shall specify the total number of Awards (if any)
        such
        officer or officers may award pursuant to such delegated authority, and any
        such
        Award shall be subject to the form of Award Agreement theretofore approved
        by
        the Compensation Committee. No such officer shall designate himself or herself
        as a recipient of any Awards granted under authority delegated to such officer.
        In addition, the Compensation Committee may delegate any or all aspects of
        the
        day-to-day administration of the Plan to one or more officers or employees
        of
        the Company or any Subsidiary, and/or to one or more agents.

    

     

    (b)  Powers
      of Committee.
      Subject
      to the express provisions of this Plan, the Committee shall be authorized and
      empowered to do all things that it determines to be necessary or appropriate
      in
      connection with the administration of this Plan, including, without limitation:
      (i) to prescribe, amend and rescind rules and regulations relating to this
      Plan
      and to define terms not otherwise defined herein; (ii) to determine which
      persons are Participants, to which of such Participants, if any, Awards shall
      be
      granted hereunder and the timing of any such Awards; (iii) to grant Awards
      to Participants and determine the terms and conditions thereof, including the
      number of Common Shares subject to Awards and the exercise or purchase price
      of
      such Common Shares and the circumstances under which Awards become exercisable
      or vested or are forfeited or expire, which terms may but need not be
      conditioned upon the passage of time, continued employment, the satisfaction
      of
      performance criteria, the occurrence of certain events (including events which
      constitute a change of control), or other factors; (iv) to establish and verify
      the extent of satisfaction of any performance goals or other conditions
      applicable to the grant, issuance, exercisability, vesting and/or ability to
      retain any Award; (v) to prescribe and amend the terms of the agreements or
      other documents evidencing Awards made under this Plan (which need not be
      identical) and the terms of or form of any document or notice required to be
      delivered to the Company by Participants under this Plan; (vi) to determine
      the
      extent to which adjustments are required pursuant to Section 11; (vii) to
      interpret and construe this Plan, any rules and regulations under this Plan
      and
      the terms and conditions of any Award granted hereunder, and to make exceptions
      to any such provisions in good faith and for the benefit of the Company; and
      (viii) to make all other determinations deemed necessary or advisable for the
      administration of this Plan.

     

    (c)  Determinations
      by the Committee.
      All
      decisions, determinations and interpretations by the Committee regarding the
      Plan, any rules and regulations under the Plan and the terms and conditions
      of
      or operation of any Award granted hereunder, shall be final and binding on
      all
      Participants, beneficiaries, heirs, assigns or other persons holding or claiming
      rights under the Plan or any Award. The Committee shall consider such factors
      as
      it deems relevant, in its sole and absolute discretion, to making such
      decisions, determinations and interpretations including, without limitation,
      the
      recommendations or advice of any officer or other employee of the Company and
      such attorneys, consultants and accountants as it may select.

     

    17.  Amendment
      of the Plan or Awards

     

    The
      Board
      may amend, alter or discontinue this Plan and the Committee may amend, or alter
      any agreement or other document evidencing an Award made under this Plan but,
      except as specifically provided for hereunder, no such amendment shall, without
      the approval of the

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

      stockholders
        of the Company (a) reduce the exercise price of outstanding Options or
        Stock Appreciation Rights, (b) reduce the price at which Options may be
        granted below the price provided for in Section 6 or (c) otherwise
        amend the Plan in any manner requiring stockholder approval by law or under
        the
        NASDAQ’s listing requirements. No amendment or alteration to the Plan or an
        Award or Award Agreement shall be made which would impair the rights of the
        holder of an Award, without such holder’s consent, provided that no such consent
        shall be required if the Committee determines in its sole discretion and
        prior
        to the date of any change of control that such amendment or alteration either
        is
        required or advisable in order for the Company, the Plan or the Award to
        satisfy
        any law or regulation or to meet the requirements of or avoid adverse financial
        accounting consequences under any accounting standard.

    

     

    18.  Miscellaneous

     

    (a)  No
      Liability of Company.
      The
      Company and any Subsidiary or affiliate which is in existence or hereafter
      comes
      into existence shall not be liable to a Participant or any other person as
      to:
      (i) the non-issuance or sale of Common Shares as to which the Company has been
      unable to obtain from any regulatory body having jurisdiction the authority
      deemed by the Company’s counsel to be necessary to the lawful issuance and sale
      of any Common Shares hereunder; and (ii) any tax consequence expected, but
      not
      realized, by any Participant or other person due to the receipt, exercise or
      settlement of any Award granted hereunder.

     

    (b)  Non-Exclusivity
      of Plan.
      Neither
      the adoption of this Plan by the Board nor the submission of this Plan to the
      stockholders of the Company for approval shall be construed as creating any
      limitations on the power of the Board or the Committee to adopt such other
      incentive arrangements as either may deem desirable, including without
      limitation, the granting of restricted stock or stock options otherwise than
      under this Plan or an arrangement not intended to qualify under Code
      Section 162(m), and such arrangements may be either generally applicable or
      applicable only in specific cases. 

     

    (c)  Governing
      Law.
      This
      Plan and any agreements or other documents hereunder shall be interpreted and
      construed in accordance with the laws of the Delaware and applicable federal
      law. 

     

    (d)  No
      Right to Employment, Reelection or Continued Service.
      Nothing
      in this Plan or an Award Agreement shall interfere with or limit in any way
      the
      right of the Company, its Subsidiaries and/or its affiliates to terminate any
      Participant’s employment, service on the Board or service for the Company at any
      time or for any reason not prohibited by law, nor shall this Plan or an Award
      itself confer upon any Participant any right to continue his or her employment
      or service for any specified period of time. Neither an Award nor any benefits
      arising under this Plan shall constitute an employment contract with the
      Company, any Subsidiary and/or its affiliates. 

     

    (e)  Unfunded
      Plan.
      The
      Plan is intended to be an unfunded plan. Participants are and shall at all
      times
      be general creditors of the Company with respect to their Awards. If the
      Committee or the Company chooses to set aside funds in a trust or otherwise
      for
      the payment of Awards under the Plan, such funds shall at all times be subject
      to the claims of the creditors of the Company in the event of its bankruptcy
      or
      insolvency.

     

    
      
        
        

      

      
        13

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