Document:

Pristine Solutions Inc.: Exhibit 10.2 - Filed by newsfilecorp.com

License Agreement 

This agreement is entered into between the parties concerned on
the basis of equality and mutual benefit to develop business on terms and
conditions mutually agreed upon as follows:

	1. 	Contracting Parties 	 
	 	Supplier (Hereinafter called
      “party A”): 	Zhongshan Guangsheng Industry
      Co., LTD 
	 		Jinyi Industry District Dongfeng
      Town, Zhongshan City, 
	 		Guangdong Province,China. 
	 		TEL: (86)-760-23379303 FAX:
      (86)-760-22600556 
	 	  	 
	 	Distributor (Hereinafter called
      “party B”): 	Pristine Solutions Inc. 
	 		Attn: Christine Buchanan-Mckenzie
    
	 		Stettin Albert Town 
	 		Trelawny, Jamaica 
	 		Tel: (876) 386-7264 Fax: (876)
      972-1736 

Party A hereby appoints Party B, and the Party B hereby accepts
appointment to act as his sales Distributor for the country of Jamaica to sell
the product mentioned below exclusively for a period of 6 months.

	2. 	Products and Quantity or Amount 
	  	Commodity: ELECTRIC
      INSTANT WATER HEATER 
		
      It’s mutually agreed that Party B shall undertake to buy
      from Party A not less than 50 of the
      aforesaid products during the first six months from the effective date of
      this Agreement. It’s mutually agreed that Party A shall undertake to
      guarantee production to Party B not less then 50pcs
      of the aforesaid products during the first six months from the
      effective date of this Agreement. 

	  	
      

	3. 	
      Distributor’s Sales Territory 

		
      The sales territory designated hereto is the geographical
      area of Jamaica as well as the area mutually
      agreed upon for which Party B shall have sales responsibility and in which
    Party B will exert its effort for sales of the aforesaid products.  

	  	
      

	4. 	
      Terms of Sales 

		
      The quantities, prices and shipments of the commodities
      stated in this agreement shall be confirmed in each transaction, the
      particulars of which are to be specified in the sales confirmation signed
      by the two parties hereto. 

	5. 	
      Payment

		
      After confirmation of the order, Party B shall arrange
      30% deposit by T/T prior to production
      in favor of Party A within the time stipulated in the relevant
      sales confirmation. 70% balance paid against
      Delivery notice (Before Delivery).

	 	 	 	 
	6. 	
      Party B’s Responsibilities

		a. 	
      Generate and stimulate interests in the products and
      furnish information to Party A in regard to market trend and prospective
      purchasers of the aforesaid products.

		b. 	
      Participate in the sales promotion activities to benefit
      and improve sales of the aforesaid products and assist and advise Party A
      in this regards.

	 	 	 	 
	7. 	
      Party A’s Responsibilities

		a. 	
      Endeavor to maintain the delivery conditions on all
      orders accepted by the Party A.

		b. 	
      Provide Party B to the full extent, with sales, technical
      information and assistance regarding the aforesaid products.

		c. 	
      Keep Party B informed of specification or changes
      regarding the aforesaid products.

		d. 	
      Party A provides spare parts free supply on each order
      (1% of each order) to Party B.

		e. 	
      Party B will offer a One year warranty on the aforesaid
      products.

	 	 	 	 
	8. 	
      Delivery

		
      Unless otherwise specifically provided in the sales
      confirmation, Delivery of the products shall be F.O.B Zhongshan Port, and the date of the bill of
      landing shall be taken to be the date of delivery of the products. Party A
      shall not be liable for delays in delivery or failure to manufacture due
      to strikes, lock-outs, riots, civil commotions, insurrections, wars, acts
      of God, operation of law or any other causes beyond its control.

	 	 	 	 
	9. 	
      Warranty

		a. 	
      Party A hereby warrants to Party B that the Products
      delivered under this agreement will be free from defects in material and
      workmanship.

		b. 	
      Party A warrants further that:

	 	 	 	 
			i. 	
      Party A has full power, capacity and authority to execute
      and enter into this Agreement;

	 	 	 	 
			ii. 	
      The entering into of this Agreement by Party A and the
      implementation of its terms will not result in the breach of any other
      agreement to which Party A may be party;

	 	iii. 	
      Where the Commodity are supplied by reference to a
      sample, the Products will correspond with the sample;

	 	 	 	 
	 	iv. 	
      The Commodity will comply with all statutory requirements
      and regulations of the Territory relating to:

	 	 	 	 
	 		1. 	
      the safety, manufacture, packaging, labeling,
      transportation and sale of the Commodity; and

	 	 	 	 
	 		2. 	
      the nature, substance, quality, weight and measurement of
      the Commodity;

	 	c. 	
      Without prejudice to any other remedy, if any Commodity
      is supplied in breach of warranty or representation given by Party A,
      Party B may require Party A to supply replacement Commodity immediately
      with all duties paid by Part A, or Part B may issue a Debit Note for Part
      A with the landed cost of the defected goods evaluated at purchasing
      currency.

	 	 	 
	 	d. 	
      Party A indemnifies and keeps Praty B indemnified in full
      against all liability, loss, damages, injury, costs and expenses
      (including legal expenses) suffered directly or indirectly awarded against
      or incurred or paid by Praty B as a result of or in connection with Defect
      or fault or alleged defect or fault in the
Commodity:

	10. 	
    Duration & Termination 

	 	
      This Agreement shall be effective for an initial period
      of one (1) year from the date this
      agreement is signed. If either party wishes to extend this agreement, he
      shall notice in written not less than thirty (30) days
      prior to expiration date. This Agreement shall continue in
  effect from the effective date hereof until terminated as follows:  

	 	
		
    a. 
	
      By an Agreement in writing signed on behalf of the Party
      A by the President or a Vice-President of the company; 

		
    b. 
	
      By either party at will, with or without cause, upon
      three month’s notice in writing given by registered mail. 

		
    c. 
	
      Should party B fail to pass on his orders to party A in a
      period of 6 months for quantity of 50 pcs, Party A
      shall not bind himself to this agreement. And Party B will be responsible
      to pay Party A for the remaining of the year agreement’s order, unless a
      new agreement is settled by both parties 

	 	
     
	
     

	11. 	
    Arbitration 

	 	
      All disputes arising from the execution of this agreement
      shall be settled through friendly consultations. In case no settlement can
      be reached, the case in dispute shall then be submitted to the Foreign
      Trade Arbitration Commission of the China Council for the Promotion of
      International Trade for arbitration in accordance with its provisional
      rules of procedure. The decision made by this commission shall be regarded
      as final and binding upon both parties. Arbitration fees shall be borne by
      the losing party, unless otherwise awarded. 

	12. 	
      Other terms & Conditions

		(1) Party A shall not supply the contracted
      commodity to any other buyer(s) in the above mentioned territory. Direct
      inquiries, if any, will be referred to party B.
		(2) For any business transaction between
      governments of both parties, party A may handle such direct dealing as
      authorized by party A’s government without binding himself to this
      agreement. Party B shall not interfere in such direct dealing nor shall
      party B bring forward any demand for compensation there from.
		(3) This agreement shall be subject to the terms
      and conditions in the sales confirmation signed by both parties
  hereto.

This agreement is signed on December 30, 2009 and is in
two originals; each party holds one.

	Party A: 	Party B: 
	  	  
	  	  
	/s/ Authorized Signatory 	/s/ Christine Buchanan-Mckenzie 
	(authorized signature) 	(authorized signature)Exhibit 10.1

 

BALLY TECHNOLOGIES, INC.

2010 LONG TERM INCENTIVE PLAN

 

The Bally Technologies, Inc. 2010 Long Term Incentive Plan (the “Plan”)
is an amendment and restatement of the Bally Technologies, Inc. 2001 Long
Term Incentive Plan and was established by the Board of Directors (the “Board”)
of Bally Technologies, Inc. (the “Company”) on October 1, 2009,
subject to approval by the Company’s stockholders at a meeting of the Company’s
stockholders or by written consent in accordance with the laws of the State of
Nevada, which approval must be obtained within twelve (12) months of the
adoption of this Plan by the Board.  The
Plan will continue in effect until terminated by the Board in accordance with
the terms of the Plan.

 

1.             PURPOSE OF THE PLAN

 

The Plan is intended to encourage stock ownership by directors,
employees and designated paid consultants of the Company and its subsidiaries
(collectively, the “Subsidiaries” and individually, a “Subsidiary”), in order
to increase their proprietary interest in the success of the Company and to
encourage them to remain in the employ of the Company or a Subsidiary.

 

Options granted under the Plan may be either Incentive Stock Options or
Nonstatutory Stock Options; the term “Option” when used hereinafter refers to
either Incentive Stock Options or Nonstatutory Stock Options, or both.  Restricted Stock and Restricted Stock Units
awarded under the Plan are subject to restrictions as determined in each
specific case by the Board or by a duly appointed committee of the Board (the “Committee”).  Stock Appreciation Rights and Incentive
Bonuses may also be granted under the Plan. 
The term “Award” when used hereinafter collectively refers to Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units awarded under
the Plan.

 

2.             ADMINISTRATION

 

Administration of the Plan.  The Plan is administered by the Board or, if
the Board so determines, by the Committee, provided that except as otherwise
provided below, in the case of Awards to directors or officers subject to Section 16
of the Securities Exchange Act of 1934 (the “Exchange Act”), the Committee has
exclusive responsibility for and authority to administer the Plan unless the
Board expressly determines otherwise. 
The membership of the Committee consists of not less than two members of
the Board and will be constituted, if possible, to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any successor rule (“Rule 16b-3”)
and with the requirements of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”). 
Duly authorized actions of the Committee constitute actions of the Board
for the purposes of the Plan and its administration.  The Board or the Committee, as applicable,
has authority in its sole discretion:

 

·                                          to determine
which directors, employees and consultants, to which of such directors,
employees and consultants, if any, Awards shall be granted hereunder and the
timing of any such Awards;

 

 

·                                          to grant Awards
to directors, employees and consultants and determine the terms and conditions
thereof, including the number of shares of Stock or amount of cash subject to
Awards and the exercise or purchase price of such shares and the circumstances
under which Awards become exercisable, vested or payable 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, or other factors;

 

·                                          to determine
the base price of any Stock Appreciation Right, the Incentive Stock Option
Price or the Nonstatutory Stock Option Price (both as defined below) of, and
the number of shares of Stock (as defined below) to be covered by, Stock
Appreciation Rights and Options granted under the Plan;

 

·                                          to establish
and verify the extent of satisfaction of any performance goals or other
conditions applicable to the grant, issuance, exercisability, vesting, payment
and/or ability to retain any Award;

 

·                                          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 holders of Awards
under this Plan;

 

·                                          to approve
corrections in the documentation or administration of any Award;

 

·                                          to require or
permit elections and/or consents under this Plan to be made by means of such
electronic media as the Committee may prescribe;

 

·                                          to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating
to it, and to define terms not otherwise defined herein; and

 

·                                          to make all
other determinations which the Board or Committee, as applicable, deem
necessary or advisable for the administration of the Plan.

 

Reserved Authority of the Board.  The Committee has all the powers and duties
set forth above, as well as any additional powers and duties that the Board may
delegate to it; provided, however, that the Board expressly retains the right (i) to
determine whether the shares of Stock reserved for issuance upon the exercise
and/or payment in respect of Awards granted under the Plan shall be issued
shares or unissued shares, (ii) to appoint the members of the Committee,
and (iii) to terminate or amend the Plan. 
The Board may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed, may fill
vacancies in the Committee, and may discharge the Committee.

 

2

 

3.             COMMON STOCK SUBJECT TO THE PLAN

 

Limitation on Number of Shares.  The number of shares which may be issued
pursuant to all Awards granted under the Plan is limited to an aggregate of
12,050,000 shares of the common stock, $.10 par value, of the Company (the “Stock”).  The shares reserved for issuance pursuant to
the Plan may consist either of authorized but previously unissued shares of
Stock, or of issued shares of Stock which have been reacquired by the Company,
as determined from time to time by the Board. 
If any Option or Stock Appreciation Right granted under the Plan
expires, terminates or is canceled for any reason without having been exercised
in full, or any other Award is forfeited for any reason, the shares of Stock
allocable to the unexercised portion of the Option or Stock Appreciation Right
or to the forfeited portion of the Award may again be made subject to an Option
or Award under the Plan.  Notwithstanding
the foregoing, Stock subject to an Award may not again be made available for
issuance under the Plan if such Stock is: (i) Stock that was subject to a
stock-settled Stock Appreciation Right and was not issued upon the net
settlement or net exercise of such Stock Appreciation Right; (ii) Stock
used to pay the exercise price of an Option; (iii) Stock delivered to or
withheld to pay the withholding taxes related to an Award; or (iv) Stock
repurchased on the open market with the proceeds of an Option exercise.

 

Adjustments of Number of Shares.  In the event of a change in the common stock
of the Company that is limited to a change in the designation thereof to “Capital
Stock” or other similar designation, or to a change in the par value thereof,
or from par value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change are deemed to be
the common stock for purposes of the Plan.

 

4.             ELIGIBILITY

 

Awards may be granted under the Plan to paid consultants, directors and
employees of the Company or a Subsidiary designated by the Board or the
Committee, provided that Incentive Stock Options may be awarded only to regular
full-time employees of the Company or a Subsidiary (including employees who
serve as officers or directors).  As used
in the Plan, “paid consultant” means a natural person who is an independent
contractor retained to perform continuing and substantial services for the
Company or any subsidiary, and designated as a paid consultant by the Board or
the Committee, except that no individual shall be designated a “paid consultant”
for purposes of this Plan if such individual is engaged in promoting or
maintaining a market in the securities of the Company, or in any other capacity
that would result in the Form S-8 registration statement being ineffective
as to any Awards made to such individual. 
Any person granted an Award under the Plan (a “Grantee”) remains
eligible to receive one or more additional grants thereafter, notwithstanding
that Options or Stock Appreciation Rights previously granted to such person
remain unexercised in whole or in part, or that the applicable restrictions on
any Restricted Stock or Restricted Stock Units issued to such person have not
lapsed.

 

5.             STOCK OPTIONS

 

In General.  The Plan authorizes the Board or the
Committee to grant Options that qualify as incentive stock Options pursuant to Section 422
of the Code (“Incentive Stock Options”), or Options that do not so qualify (“Nonstatutory
Stock Options”).  Each Option granted
under the Plan is evidenced by a written and executed Option agreement which
will

 

3

 

specify whether the Option granted therein is an Incentive Stock Option
or a Nonstatutory Stock Option.

 

Incentive Stock Options.  Each stock Option agreement covering an
Incentive Stock Option granted under the Plan and any amendment thereof, other
than an amendment to convert an Incentive Stock Option into a Nonstatutory
Stock Option, will conform to the following provisions and may contain other
terms and provisions consistent with the requirements of the Plan as the Board
or the Committee deem appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to an Incentive Stock Option (the “Incentive Stock Option Price”)
will be a stated price which is not less than the fair market value of such
share of Stock, determined in accordance with Section 11 below, or the par
value of such share if greater, as of the date such Incentive Stock Option is
granted; provided, however, that if an employee, at the time an Incentive Stock
Option is granted to him or her, owns stock representing more than 10 percent
of the total combined voting power of all classes of stock of the Company or of
the parent corporation (as defined in Section 424(e) of the Code), if
any, of the Company or of any of the Subsidiaries (or, under Section 424(d) of
the Code, is deemed to own stock representing more than 10 percent of the total
combined voting power of all such classes of stock, by reason of the ownership
of such classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor, or lineal descendent of such employee, or by or for
any corporation, partnership, estate or trust of which such employee is a
stockholder, partner or beneficiary), then the Incentive Stock Option Price of
each share of Stock subject to such Incentive Stock Option will be at least 110
percent of the fair market value of such share of Stock, as determined in
accordance with Section 11 below.

 

Term.  Incentive Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Incentive Stock Option, but in no event
is an Incentive Stock Option exercisable after the expiration of ten years from
the date of grant; provided, however, that an Incentive Stock Option granted to
any employee as to whom the Incentive Stock Option Price of each share of Stock
subject thereto is required to be 110 percent of the fair market value of the
share of Stock pursuant to the preceding paragraph will not be exercisable
after the expiration of five years from the date of grant.  Each Incentive Stock Option granted under the
Plan is also subject to earlier termination as provided in the Plan.

 

Exercise.  Generally under the Plan, Incentive Stock
Options may be exercised in whole or in installments, to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each Option.

 

Incentive Stock Options granted under the Plan are exercisable only by
delivery to the Company of written notice of exercise, which states the number
of shares with respect to which such Incentive Stock Option is exercised, the
date of grant of the Incentive Stock Option, the aggregate purchase price for
the shares with respect to which the Incentive Stock Option is exercised and
the effective date of such exercise, which date may not be earlier than the
date the notice is received by the Company nor later than the date upon which
the Incentive Stock Option expires.  The
written notice of exercise must be sent together with the full Incentive Stock
Option Price of the shares purchased, which may be paid in cash or in shares of
any class of issued and outstanding stock of the Company held by the Option
holder, whether preferred or

 

4

 

common, or partly in cash and partly in such shares of stock.  If any portion of the Incentive Stock Option
Price is paid in shares of stock of the Company, the shares will be valued at
their fair market value, as determined in accordance with Section 11
below, as of the effective date of exercise of the Incentive Stock Option.  The delivery of shares of stock upon exercise
of an Incentive Stock Option shall be subject to such restrictions as the Board
or the Committee may determine to be appropriate, including, without
limitation, a requirement that such shares be held by an agent designated by
the Company until sold or otherwise disposed of by the Option holder, to assure
that the Company is advised of any disposition of such shares by the Option
holder within two years of the date of grant of the Incentive Stock Option or
within one year after the date of exercise of the Incentive Stock Option.

 

In general, an Incentive Stock Option granted under the Plan remains
outstanding and is exercisable only so long as the person to whom the Incentive
Stock Option was granted remains an officer or employee of the Company, the
parent corporation, if any, of the Company, or any of the Subsidiaries.  All Incentive Stock Options granted under the
Plan are nontransferable, except by will or the laws of descent and
distribution, and are exercisable during the lifetime of the person to whom
granted only by such person (or his duly appointed, qualified, and acting
personal representative).

 

No Incentive Stock Option may be exercised as to fewer than 100 shares
of Stock at any one time without the consent of the Board or the Committee,
unless the number of shares to be purchased upon the exercise is the total
number of shares at the time available for purchase under the Incentive Stock
Option.

 

The Board or the Committee may also permit Grantees (either on a
selective or group basis) pay the Incentive Stock Option Price through
withholding of shares of Stock otherwise issuable upon exercise of the Option
and/or to simultaneously exercise Options and sell the shares of the Stock
thereby acquired pursuant to a “cashless exercise” arrangement or program
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any Option may be
used by the Company for general corporate purposes.  Any portion of an Option that is exercised
may not be exercised again.

 

Nonstatutory Stock Options.  Each stock Option agreement covering a
Nonstatutory Stock Option granted under the Plan and any amendment thereof will
conform to the following provisions and may contain other terms and provisions
consistent with the requirements of the Plan as the Board or the Committee deem
appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to a Nonstatutory Stock Option (the “Nonstatutory Stock Option
Price”) will be a fixed price determined by the Board or the Committee at the
time of grant, which will not be less than the greater of the par value of such
share, or 100 percent of the fair market value of such share, determined in
accordance with Section 11 below, on the date of the grant of the
Nonstatutory Stock Option.

 

Term.  Nonstatutory Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Nonstatutory Stock Option, but in no event
is a Nonstatutory Stock Option exercisable after the expiration of

 

5

 

ten years from the time of grant. Each Nonstatutory Stock Option
granted under the Plan will also be subject to earlier termination as provided
in the Plan.

 

Exercise.  Generally, under the Plan, Nonstatutory Stock
Options may be exercised in whole or in installments to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each Option.

 

Nonstatutory Stock Options granted under the Plan are exercisable only
by delivery to the Company of written notice of exercise, which states the
number of shares with respect to which such Nonstatutory Stock Option is
exercised, the date of grant of the Nonstatutory Stock Option, the aggregate
purchase price for the shares with respect to which the Nonstatutory Stock
Option is exercised and the effective date of such exercise, which date may not
be earlier than the date the notice is received by the Company nor later than
the date upon which the Nonstatutory Stock Option expires.  The written notice of exercise must be sent
together with the full Nonstatutory Stock Option Price of the shares purchased,
which may be paid in cash or in shares of any class of issued and outstanding
stock of the Company held by the Option holder, whether preferred or common, or
partly in cash and partly in such shares of stock.  If any portion of the Nonstatutory Stock
Option Price is paid in shares of stock of the Company, the shares will be
valued at their fair market value, as determined in accordance with Section 11
below, as of the effective date of exercise of the Nonstatutory Stock Option.

 

In general, a Nonstatutory Stock Option granted under the Plan remains
outstanding and is exercisable only so long as the person to whom the
Nonstatutory Stock Option was granted remains either a director, employee or
paid consultant of the Company, the parent corporation, if any, of the Company,
or any of the Subsidiaries.  A person is
deemed to be a paid consultant only so long as he or she continues to perform
and be compensated for substantial services for the Company, the parent
corporation, if any, of the Company, or a Subsidiary, as to which the determination
of the Board or the Committee, as applicable, will be binding and
conclusive.  Unless the Board or
Committee determines otherwise, all Nonstatutory Stock Options granted under
the Plan will be nontransferable, except by will or the laws of descent and
distribution.

 

No Nonstatutory Stock Option may be exercised as to fewer than 100
shares at any one time without the consent of the Board or the Committee,
unless the number of shares to be purchased upon the exercise is the total
number of shares at the time available for purchase under the Nonstatutory
Stock Option.

 

The Board or the Committee may also permit Grantees (either on a
selective or group basis) to pay the Nonstatutory Stock Option Price through
withholding of shares of Stock otherwise issuable upon exercise of the Option
and/or to simultaneously exercise Options and sell the shares of the Stock
thereby acquired pursuant to a “cashless exercise” arrangement or program
selected by and approved of in all respects in advance by the Board or the Committee.  Payment instruments shall be received by the
Company subject to collection.  The
proceeds received by the Company upon exercise of any Option may be used by the
Company for general corporate purposes. 
Any portion of an Option that is exercised may not be exercised again.

 

6

 

6.             RESTRICTIONS APPLICABLE TO RESTRICTED STOCK

 

The Board or the Committee may place any restrictions it deems
appropriate on any shares of Stock awarded under this Section 6 (“Restricted
Stock”) to an employee, director or paid consultant; provided, however, that
shares of Restricted Stock awarded under this Section 6 are subject to
certain restrictions including the following:

 

Vesting.  In general, other than with respect to Awards
to directors who are not also employees of the Company, the grant, issuance,
retention, vesting and/or settlement of shares of Restricted Stock that is
based on performance criteria and level of achievement versus such criteria
will be subject to a performance period of not less than twelve months, and the
grant, issuance, retention, vesting and/or settlement of shares of Restricted
Stock that is based solely upon continued employment or service and/or the
passage of time may not vest or be settled in full prior to three years
following its date of grant, but may be subject to pro-rata vesting over such
period, except that the Committee may provide for the satisfaction and/or lapse
of all conditions under any such Award as set forth in Sections 12 and 13
below, and the Committee may provide that any such restriction or limitation
will not apply in the case of an Award that is issued in payment or settlement
of compensation that has been earned by the Grantee.  Any shares of Restricted Stock remaining subject
to forfeiture in accordance with the related vesting schedule are
hereinafter referred to as “Unvested Shares.” 
Notwithstanding anything in this Plan to the contrary, the performance
criteria for any Restricted Stock 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.

 

Delivery to Escrow.  Unless the Board or the Committee determines
otherwise, upon issuance of a certificate evidencing such shares the recipient
will be required to deliver the certificate, endorsed in blank or with a duly
executed stock power attached, to the Secretary of the Company, or such other
person or entity as the Board or the Committee may designate, to be held until
any vesting restrictions applicable thereto have lapsed or any Unvested Shares
have been forfeited.

 

Legend.  Unless the Board or the Committee determines
otherwise, each certificate evidencing Unvested Shares issued under the Plan
will bear a legend to the effect that such shares are subject to potential
forfeiture and may not be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of except in accordance with the terms of an agreement
between the issuer and the registered owner.

 

7.             RESTRICTED STOCK UNITS

 

The Committee may at any time and from time to time grant Restricted
Stock Units under the Plan in such amounts as it determines.  Each Restricted Stock Unit shall entitle the
Grantee to receive from the Company at the end of the vesting period applicable
to such unit one share of Stock, unless the Grantee elects in a timely fashion
prior to the end of the vesting period to defer the receipt of the shares of
Stock subject to the Award of Restricted Stock Units.  Each grant of Restricted Stock Units shall be
evidenced by an Award Agreement which shall specify the applicable restrictions
on such units including the following:

 

7

 

Vesting.  In general, other than with respect to Awards
to directors who are not also employees of the Company, the grant, issuance,
retention, vesting and/or settlement of shares of Stock underlying an Award of
Restricted Stock Units that is based on performance criteria and level of
achievement versus such criteria will be subject to a performance period of not
less than twelve months, and the grant, issuance, retention, vesting and/or
settlement of shares of Stock underlying an Award of Restricted Stock Units
that is based solely upon continued employment or service and/or the passage of
time may not vest or be settled in full prior to three years following its date
of grant, but may be subject to pro-rata vesting over such period, except that
the Committee may provide for the satisfaction and/or lapse of all conditions
under any such Award as set forth in Sections 12 and 13 below, and the
Committee may provide that any such restriction or limitation will not apply in
the case of an Award that is issued in payment or settlement of compensation
that has been earned by the Grantee.  Any
Restricted Stock Units that have not yet vested in accordance with the related
vesting schedule are hereinafter referred to as “Unvested Units.”  Notwithstanding anything in this Plan to the
contrary, the performance criteria for any Restricted Stock Units 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.

 

8.             STOCK APPRECIATION RIGHTS

 

The grant of Stock Appreciation Rights under the Plan is subject to the
following terms and conditions and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Board or
the Committee sets forth in the relevant Award agreement:

 

Stock Appreciation Rights.  A Stock Appreciation Right is an Award
granted with respect to a specified number of shares of Stock entitling the
Grantee to receive an amount equal to the excess of (a) the fair market
value of a share of Stock on the date of exercise over (b) the fair market
value of a share of Stock on the date of grant of the Stock Appreciation Right
(the “Base Price”) multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right has been exercised.  Fair market value is determined in accordance
with Section 11 below.

 

Grant.  A Stock Appreciation Right may be granted in
addition to any other Award under the Plan or in tandem with or independent of
any Nonstatutory Stock Option or Incentive Stock Option.

 

Date of Exercisability.  Unless otherwise provided in the Grantee’s
Award agreement in respect of any Stock Appreciation Right, a Stock
Appreciation Right may be exercised by the Grantee, in accordance with and
subject to all of the procedures established by the Board or the Committee, in
whole or in part at any time and from time to time during its specified
term.  Notwithstanding the preceding
sentence, in no event is a Stock Appreciation Right exercisable prior to the
exercisability of any Non-Qualified Stock Option or Incentive Stock Option with
which it is granted in tandem.  The Board
or the Committee may also provide, as set forth in the relevant Award
agreement, that some Stock Appreciation Rights will be automatically exercised
on one or more dates specified by the Board or the Committee.

 

8

 

Form of Payment.  Upon exercise of a Stock Appreciation Right,
payment may be made in cash, in Restricted Stock or in shares of unrestricted
Stock, or in any combination thereof, as the Board or the Committee, in its
sole discretion, determines and provides in the relevant Award agreement.

 

Tandem Grant.  The right of the Grantee to exercise a tandem
Stock Appreciation Right terminates to the extent the Grantee exercises the
Non-Qualified Stock Option or the Incentive Stock Option to which the Stock Appreciation
Right is related.

 

9.             INCENTIVE BONUSES

 

The grant of Incentive Bonuses under the Plan is subject to the
following terms and conditions and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Board or
the Committee sets forth in the relevant Award documentation:

 

Incentive Bonuses.  Each Incentive Bonus Award will confer upon
the Grantee the opportunity to earn a future payment tied to the level of
achievement with respect to one or more performance criteria established for a
performance period specified by the Committee.

 

Performance Criteria.  The Committee shall establish the performance
criteria and level of achievement versus these criteria that shall determine
the target, threshold and maximum amount payable under an Incentive Bonus,
which criteria may be based on financial performance and/or personal
performance evaluations.  The Committee
may specify the percentage of the target Incentive Bonus that is intended to
satisfy the requirements for “performance-based compensation” under Section 162(m) of
the Code.  Notwithstanding anything to
the contrary herein, the performance criteria for any portion of an Incentive
Bonus 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 Incentive Bonus 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 of any Incentive Bonus that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code.

 

Timing and Form of Payment.  The Committee shall determine the timing of
payment of any Incentive Bonus.  Payment
of the amount due under an Incentive Bonus may be made in cash, in Restricted
Stock or in shares of unrestricted Stock, or in any combination thereof, as the
Board or the Committee, in its sole discretion, determines.

 

Discretionary Adjustments.  Notwithstanding satisfaction of any
performance goals, the amount paid under an Incentive Bonus on account of
either financial performance or personal performance evaluations may, to the
extent specified in the Award documentation, be reduced, but not increased, by
the Committee on the basis of such further considerations as the Committee
shall determine.

 

9

 

10.          RIGHTS OF GRANTEES

 

Options; Stock Appreciation Rights.  No holder of an Option or Stock Appreciation
Right will be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to such Option or Stock
Appreciation Right unless and until his or her Option or Stock Appreciation
Right has been exercised pursuant to the terms thereof, the Company has issued
and delivered to the holder of the Option or Stock Appreciation Right the shares
of Stock as to which the holder has exercised his or her Option or Stock
Appreciation Right, and the holder’s name has been entered as a stockholder of
record on the books of the Company. 
Thereupon, such person shall have full voting and other ownership rights
with respect to such shares of Stock.

 

Restricted Stock.  Each recipient of a Restricted Stock Award is
deemed to be the registered owner of any Unvested Shares subject to such award,
notwithstanding that such shares may be subject to restrictions and possible
forfeiture under the terms of the agreement pursuant to which they were
received.  Unless and until all or a
portion of the Unvested Shares are forfeited in accordance with the terms of
such agreement, the recipient thereof will have full voting rights with respect
to such shares as well as the right to receive any and all distributions
thereon.

 

Restricted Stock Units.  No holder of a Restricted Stock Unit will be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to such Restricted Stock Unit unless
and until the Company has issued and delivered to the holder of the Restricted
Stock Unit the shares of Stock as to which the Award of Restricted Stock Units
has vested, and the holder’s name has been entered as a stockholder of record
on the books of the Company.  Thereupon,
such person shall have full voting and other ownership rights with respect to
such shares of Stock.

 

11.          DETERMINATION OF FAIR MARKET VALUE

 

For the purposes of the Plan, “fair market value” means the fair market
value of Stock, Awards or other property as determined in good faith by the Committee
or under procedures established by the Committee.  Unless otherwise determined by the Committee,
the fair market value of Stock as of any given date shall be the closing sale
price per share of Stock reported on a consolidated basis for securities listed
on the principal stock exchange or market on which Stock is traded on the date
as of which such value is being determined or, if there is no sale on the
principal stock exchange or market that day, then on the last previous day on
which a sale on the principal stock exchange or market was reported.
Notwithstanding anything herein to the contrary, the Board or the Committee may
determine the fair market value of a share of Stock on the basis of such
factors as it deems appropriate, consistent with Section 409A of the Code,
if it determines in good faith that the approach specified above does not
properly reflect the fair market value of such Stock.

 

10

 

12.          RETIREMENT, TERMINATION OF EMPLOYMENT OR DEATH OF
HOLDERS OF AWARDS

 

Retirement or Disability.  If a Grantee retires from employment with the
Company or any of its Subsidiaries as a result of normal retirement (that is,
termination of employment by the Grantee after he or she attains age sixty-five
(65)), or terminates employment or service with the Company after becoming “permanently
disabled” (as defined in the Bally Technologies, Inc. 401(k) Plan as
in effect on the date of adoption of the Plan by the Board), any restrictions
then applicable to his or her Award will lapse and it will thereafter be
exercisable (in the case of Options and Stock Appreciation Rights) or vested
and transferable (in the case of Restricted Stock and Restricted Stock Units) in
whole or in part, by the person to whom granted (or his or her duly appointed,
qualified, and acting personal representative) in the manner set forth in
Sections 5, 6, 7 and 8 above, at any time within the remaining term of the
Award, unless otherwise determined by the Board or the Committee at the time of
grant.

 

Other Termination of Service or Employment.  Except as determined by the Board or the
Committee at the time of grant, or as otherwise provided herein or in a Grantee’s
employment agreement, (a) if a person to whom Restricted Stock has been
awarded under the Plan ceases to be either a director, employee or paid
consultant of the Company or a Subsidiary, any Unvested Shares of Restricted
Stock held by the person are forfeited as of the last date he or she was either
a director, employee or paid consultant of the Company or a Subsidiary, (b) if
a person to whom Restricted Stock Units and/or an Incentive Bonuses have been
awarded under the Plan ceases to be either a director, employee or paid consultant
of the Company or a Subsidiary, the unvested portion, if any, of such Awards
held by the person are forfeited as of the last date he or she was either a
director, employee or paid consultant of the Company or a Subsidiary, and (c) if
a person to whom an Option or Stock Appreciation Right has been granted under
the Plan ceases to be either a director, employee or paid consultant of the
Company or a Subsidiary, such Option or Stock Appreciation Right will continue
to be exercisable or transferable to the same extent that it was exercisable on
the last day on which he or she was either a director, employee or paid
consultant for a period of 60 days thereafter, whereupon such Option or Stock
Appreciation Right will terminate and not be exercisable thereafter; provided,
however, that in the event of termination of employment, termination of service
as a paid consultant, or removal from office as a director for Cause (as
defined below), any such Option or Stock Appreciation Right will terminate ten
days after such termination of employment, service or removal from office
rather than 60 days thereafter. 
Notwithstanding the immediately preceding sentence, the term during
which an Option or Stock Appreciation Right may be exercised shall not in any
event extend beyond the remaining term of such Award as specified in connection
with the grant thereof.  No Award made
under the Plan will be affected by any change of duties or position of the
person to whom the Award was made or by any temporary leave of absence granted
to the person by the Company or any of its Subsidiaries.  For purposes of the Plan, “Cause” means (i) the
Grantee being convicted of a felony, (ii) the Grantee willfully committing
an act of embezzlement or malfeasance which is intended to materially enrich
himself or herself at the expense of the Company or any of its Subsidiaries or
is otherwise intended to materially harm the Company, or (iii) the Grantee
being rejected for an applicable license or approval by a gaming regulatory
authority having jurisdiction over the Company as a result of an explicit
finding of lack of suitability solely as a result of the Grantee’s commission
of a crime or an act of embezzlement or malfeasance.

 

11

 

Death.  Unless otherwise determined by the Board or
the Committee at the time of grant, (a) if a person to whom an Option or
Stock Appreciation Right has been granted under the Plan dies prior to the
expiration of the term of the Option or Stock Appreciation Right, the Option or
Stock Appreciation Right is exercisable by the estate of the Grantee, or by a
person who acquired the right to exercise such Option or Stock Appreciation
Right by bequest or inheritance from the Grantee, at any time within two years
after the death of the person and prior to the date upon which such Option or
Stock Appreciation Right expires as specified in connection with the grant
thereof, to the extent and in the manner exercisable by the Grantee at the date
of his or her death; (b) if a person to whom Restricted Stock has been
awarded under the Plan dies prior to the lapse of all restrictions applicable
to such Restricted Stock, any Unvested Shares held by such person on the date
of his or her death will be forfeited; and (c) if a person to whom Restricted
Stock Units and/or Incentive Bonuses have been awarded under the Plan dies, the
unvested portion, if any, of such Awards held by the person on the date of his
or her death will be forfeited.

 

Termination with Board Approval.  If a Grantee ceases to be either a director,
employee or paid consultant of the Company or a Subsidiary for any reason other
than removal for Cause, and the Board or the Committee expressly determines
that such termination of service or employment is in the best interests of the
Company, then an Option or Stock Appreciation Right awarded to the Grantee
under the Plan will be exercisable by the Grantee or by the estate of the
Grantee, by a person who acquired the right to exercise such Option or Stock
Appreciation Right by bequest or inheritance from the Grantee or otherwise, for
an additional period following termination of service or employment as
determined by the Board or the Committee but in no event later than the date
upon which such Option or Stock Appreciation Right would have expired absent
such termination of service or employment. 
Any such extended Option or Stock Appreciation Right will be exercisable
only to the extent and in the manner exercisable by the Grantee at the time of
such termination of service or employment.

 

Incentive Stock Options.  Notwithstanding anything herein to the
contrary or the provisions of any employment agreement, no Incentive Stock
Option shall be exercisable after the date that is (a) in the case of the
Grantee’s termination of employment for any reason other than death or
disability, three months following such termination of employment, or (b) in
the case of the Grantee’s termination of employment due to death or Total and
Permanent Disability (as defined in Code section 22(e)(3)), twelve months
following such termination of employment.

 

13.          ADJUSTMENTS

 

Changes in Capitalization.  In the event of any change in the number of
shares of the outstanding Stock of the Company by reason of a stock split,
stock dividend, combination or reclassification of shares, recapitalization, or
similar event, the Board or the Committee will adjust proportionally (a) the
number and kind of shares subject to the Plan, (b) the number and kind of
shares then subject to unexercised Options and Stock Appreciation Rights and
outstanding Awards of Restricted Stock and Restricted Stock Units and (c) the
per share Incentive Stock Option Price, Nonstatutory Stock Option Price or Base
Price (as the case may be) of unexercised Options and Stock Appreciation
Rights.  Any such adjustment will be made
without a change in the aggregate purchase price or aggregate Base Price of the
shares of the Stock subject to the unexercised portion of any Option or Stock
Appreciation Right.

 

12

 

Merger Event.  In the event of any merger, spin-off,
split-off or other similar consolidation, reorganization or change affecting
any class of stock of the Company (a “Merger Event”) subject to Awards made
under the Plan, or any distribution (other than normal cash dividends) to
holders of the stock, fair and equitable adjustment will be made in good faith
by the Board or the Committee, including (without limitation) adjustments to
avoid fractional shares, in respect of (a) all unexercised Options or Stock
Appreciation Rights and (b) all then outstanding Awards of Restricted
Stock, Restricted Stock Units or Incentive Bonuses to give proper effect to
such event and preserve the value, rights and benefits of such Awards;
provided, however, that the Board or the Committee may, in the case of any
Merger Event pursuant to which the Company is not the surviving corporation and
pursuant to which the former holders of the Stock do not hold, directly or
indirectly, more than a majority of the voting securities of the resulting
entity immediately after the Merger Event or in connection with any acquisition
by any person of more than 50 percent of the outstanding shares of the Stock,
provide that each Option or Stock Appreciation Right holder will receive a cash
payment (in exchange for and in cancellation of such Option or Stock
Appreciation Right) equal to the difference (if greater than zero) between the
value of the per share consideration received by the holders of the Stock in
the Merger Event or the acquisition and the purchase price or Base Price of
such Option or Stock Appreciation Right, multiplied by the number of shares of
the Stock underlying such Option or Stock Appreciation Right (and if the
difference is equal to or less than zero, the Committee may provide that each
such holder will receive no payment, nor any other compensation, in exchange
for and in cancellation of any such Option or Stock Appreciation Right).
 In addition, in the event that (i) there occurs any Merger Event
pursuant to which all of the outstanding Stock held by the stockholders of the
Company is exchanged for any lawful consideration and (ii) within twelve
months following the date of such Merger Event, a Grantee’s employment or
service with the Company is terminated either by the Company without Cause or
by the Grantee for Good Reason (as defined below), then, effective immediately
prior to such termination of employment or service, all unvested and
unexercisable Options or Stock Appreciation Rights held by the Grantee on the
date on which his or her employment or service terminated will become 100
percent vested and exercisable, and all restrictions then applicable to Awards
of Restricted Stock and Restricted Stock Units held by the Grantee on the date
on which his or her employment or service terminated will lapse and such Awards
will thereafter be fully vested and transferable.  For purposes of the Plan, “Good Reason”
means, unless otherwise provided in a Grantee’s employment agreement, (x) a
material reduction in the Grantee’s base salary or (y) a material
reduction in the Grantee’s duties or responsibilities.

 

14.          MAXIMUM AWARDS

 

The following maximum annual and other amounts are subject to
adjustment under Section 13 above and are subject to the Plan maximum
under Section 3 above.  Each
individual Grantee may not receive in any fiscal year Awards of Options, Stock
Appreciation Rights, Restricted Stock and/or Restricted Stock Units exceeding
1,500,000 underlying shares of Stock. 
The maximum amount payable pursuant to that portion of an Incentive
Bonus granted in any fiscal year to any Grantee under this Plan that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall not exceed ten million dollars
($10,000,000).  No more than 1,400,000
shares of Stock may be granted as Awards of Restricted Stock or Restricted
Stock Units.  Notwithstanding the
foregoing, to the extent that the aggregate fair market value of stock
(determined at the time of grant of the 

 

13

 

Option) for which Incentive Stock Options first become exercisable by a
Grantee during a calendar year (under all Option plans of the Company) exceeds
$100,000, such Options shall be treated as Options that are not Incentive Stock
Options.

 

15.          QUALIFYING PERFORMANCE CRITERIA

 

General.  The Committee may establish performance
criteria and level of achievement versus such criteria that shall determine the
number of shares of Stock 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 any Award that is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Code.

 

Qualifying Performance Criteria.  For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, or derivations of such 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: (a) revenues; (b) earnings per share
(basic or diluted), earnings from operations, earnings before or after taxes,
earnings before or after interest, depreciation, amortization, incentives,
service fees or extraordinary or special items; (c) net income or net
income per common share (basic or diluted); (d) return on assets, return
on net assets, return on investment, return on capital, or return on equity; (e) cash
flow, free cash flow, cash flow return on investment, or net cash provided by
operations; (f) economic value created or added; (g) operating margin
or profit margin; (h) stock price, dividends or total stockholder return;
and (i) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration or value added, market share,
product development or introduction, geographic business expansion goals, cost
targets, debt reduction, customer satisfaction, employee satisfaction,
information technology, and goals relating to acquisitions or divestitures of
subsidiaries, affiliates or joint ventures. 
To the extent consistent with Section 162(m) of the Code, the
Committee (i) may 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 disposal of a segment of a business or related to a change in
accounting principle all as determined in accordance with accounting principles
generally accepted in the United States of America, 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 

 

14

 

or notes to the financial statements, and (ii) 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: (1) asset
write-downs, (2) litigation, claims, judgments or settlements, (3) the
effect of changes in tax law or other such laws or provisions affecting
reported results, (4) accruals for reorganization and restructuring
programs and (5) accruals of any amounts for payment under this Plan or
any other compensation arrangement maintained by the Company.

 

16.          MANNER OF GRANT

 

Nothing contained in the Plan or in any resolution adopted by the Board
or any committee thereof or by the stockholders of the Company with respect to
the Plan, except as provided in the Plan, will constitute the granting of an
Award under the Plan.  The granting of an
Award under the Plan is deemed to occur only upon the date on which the Board
or the Committee approves the grant of the Award.  Each Award granted under the Plan shall be
evidenced by a written agreement, in the form determined by the Board or the
Committee, signed by a representative of the Board or the Committee and the
recipient thereof.

 

17.          COMPLIANCE WITH LAWS AND REGULATIONS

 

The obligation of the Company to sell and deliver any shares of Stock
under the Plan is subject to all applicable laws, rules and regulations,
and the obtaining of all approvals by governmental agencies deemed necessary or
appropriate by the Board or the Committee. 
In general, the Board or the Committee may make such changes in the Plan
and include such terms in any Award agreement as may be necessary or
appropriate, in the opinion of counsel to the Company, to comply with the rules and
regulations of any governmental authority, or to obtain for employees granted
Incentive Stock Options the tax benefits under the applicable provisions of the
Code and the regulations thereunder.

 

18.          TAX WITHHOLDING

 

The Company or Subsidiary for which services are performed by a
director, employee or paid consultant granted an Award under the Plan has the
right to deduct or otherwise effect a withholding of any tax (including,
without limitation, any FICA (employment) tax required to be withheld under
Chapter 21 of the Code, any income tax required to be withheld under
Chapter 24 of the Code, and any similar tax imposed under state, local, or
foreign law) required by federal, state, local or foreign laws to be withheld
or otherwise deducted and paid with respect to the grant, vesting or exercise
of any Award; or, in lieu of such withholding, to require that the Grantee or
person holding such Award pay to the Company or such Subsidiary in cash (or, at
the sole discretion of the Board or the Committee, in the form of shares of
Stock) the amount of any taxes required to be withheld or otherwise deducted
and paid by the Company or its Subsidiary in connection with the grant, vesting
or exercise of any Award.  The Company
may condition any delivery of stock certificates or other evidence of ownership
of shares of Stock on payment of the tax amounts referred to in this Section 18.

 

15

 

19.          CERTAIN LIMITATIONS ON AWARDS TO ENSURE COMPLIANCE WITH
CODE SECTION 409A.

 

For purposes of this Plan, references to an award term or event
(including any authority or right of the Company or a Participant) being
consistent with Code Section 409A shall mean that the term or event will
not cause the Participant to be liable for payment of interest or a tax penalty
under Code Section 409A. Other provisions of the Plan notwithstanding, the
terms of any award including any authority of the Company and rights of the
Participant with respect to the award, shall be limited to those terms permitted
under Code Section 409A, and any terms not permitted under Code Section 409A
shall be automatically modified and limited to the extent necessary to conform
with Code Section 409A. For this purpose, other provisions of the Plan
notwithstanding, the Company shall have no authority to accelerate
distributions relating to 409A Awards in excess of the authority permitted
under Code Section 409A, and any distribution subject to Code Section 409A(a)(2)(A)(i) (separation
from service) to a “key employee” as defined under Code Section 409A(a)(2)(B)(i),
shall not occur earlier than the earliest time permitted under Code Section 409A(a)(2)(B)(i).
Notwithstanding any other provisions of the Plan, the Company does not
guarantee to any Participant or any other person that any Award intended to be
exempt from Section 409A of the Code shall be so exempt, nor that any
Award intended to comply with Section 409A of the Code shall so comply,
nor will the Company indemnify, defend or hold harmless any individual with
respect to the tax consequences of any such failure.

 

20.          NO REPRICING WITHOUT STOCKHOLDER APPROVAL

 

Other than in connection with a change in the Company’s capitalization
(as described in Section 13 above) the Option Price or Base Price of an
Option or Stock Appreciation Right may not be reduced without stockholder
approval (including canceling previously awarded Options in exchange for cash,
other Awards, or Options or Stock Appreciation Rights with an exercise price
that is less than the exercise price of the original Award).

 

21.          NONEXCLUSIVITY OF THE PLAN

 

Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval has any impact on existing
qualified or nonqualified retirement, bonus or Option plans of the Company or
creates any limitations on the power of the Board to adopt any other incentive
arrangements that it may deem desirable, including, without limitation, the
granting of stock Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units or Incentive Bonuses otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

 

22.          AMENDMENT

 

The Board at any time, and from time to time, may amend the Plan,
subject to any required regulatory approval and subject to the limitation that,
except as provided above in Section 13, no amendment is effective unless
approved within 12 months after the date of the adoption of such amendment by
the affirmative vote of the holders of a majority of the shares of the Company’s
Voting Stock present in person or represented by proxy at a duly held meeting
at 

 

16

 

which a quorum is present (or by such greater vote as may be required
by applicable law, regulation or provision of the certificate of incorporation
or bylaws of the Company) if the amendment would, but for such approval,
prevent the issuance of Incentive Stock Options under the Plan or cause the
Plan to no longer comply with the requirements of Section 162(m) of
the Code.

 

Except as provided in Section 13 above, rights and obligations
under any Awards granted before amendment of the Plan may not be altered or
impaired by amendment of the Plan in any manner having a significant adverse
effect on a Grantee, except with the consent of the Grantee thereof.

 

23.          TERMINATION OR SUSPENSION

 

The Board at any time may suspend or terminate the Plan.  The Plan, unless sooner terminated, will
terminate on the 10th anniversary of its adoption by the Board or its approval
by the stockholders of the Company, whichever is earlier, but such termination
will not affect any Award theretofore granted. 
No Award may be granted under the Plan while the Plan is suspended or after
it is terminated.  In general, no rights
or obligations under any Award granted while the Plan is in effect will be
altered or impaired by suspension or termination of the Plan, except with the
consent of the person to whom the Award was granted.  Any Award granted under the Plan may be terminated
by agreement between the holder thereof and the Company and, in lieu of the
terminated Award, a new Award may be granted.

 

24.          MISCELLANEOUS

 

Nothing contained in the Plan (or in any written Award agreement)
obligates the Company or any Subsidiary to continue for any period to elect any
individual as a director or to employ an employee or consultant to whom an
Award has been granted, or interfere with the right of the Company or any
Subsidiary to vary the terms of the person’s service or employment or reduce
the person’s compensation.

 

25.          EXCULPATION AND INDEMNIFICATION

 

To the fullest extent permitted by applicable law and regulation, the
Company will indemnify and hold harmless the members of the Board and the
members of the Committee from and against any and all liabilities, costs, and
expenses incurred by them as a result of any act, or omission to act, in
connection with the performance of their duties, responsibilities, and
obligations under the Plan, other than such liabilities, costs and expenses as
may result from the gross negligence, bad faith, willful misconduct, or
criminal acts of such persons.

 

26.          GOVERNING LAW

 

The Plan and all actions taken thereunder are governed by and construed
in accordance with the laws of the State of Nevada, without reference to the
principles of conflict of laws thereof.

 

17

 

27.          UNFUNDED PLAN

 

The Plan is unfunded and the Company is not required to segregate any
assets in connection with any Awards under the Plan.  Any liability of the Company to any person
with respect to any Award under the Plan or any Award agreement is based solely
upon the contractual obligations that may be created as a result of the Plan or
any such Award or agreement.  No such
obligation of the Company will be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or
any Subsidiary.  Nothing contained in the
Plan or any Award agreement will be construed as creating in respect of any
Grantee (or beneficiary thereof or any other person) any equity or other
interest of any kind in any assets of the Company or any Subsidiary or creating
a trust of any kind or a fiduciary relationship of any kind between the
Company, any Subsidiary and/or any such Grantee, any beneficiary thereof or any
other person.

 

18

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