Document:

Exhibit
      10.6

     

    BEACON
      POWER CORPORATION

     

    Restricted
      Stock Unit and Option Agreement

     

    This
      Restricted Stock Unit and Option Agreement (this “Agreement”),
      dated
      as of February 14, 2008 (the “Effective
      Date”),
      is by
      and between Beacon Power Corporation (the “Company”)
      and
      Matthew L. Lazarewicz (“Executive”),
      an
      executive officer of the Company.

     

    WHEREAS,
      this Agreement is intended to provide Executive compensation in the form of
      restricted stock units (or “RSUs”)
      that
      convert into shares of the Company’s common stock, $.01 par value per share (the
“Common
      Stock”);
      

     

    WHEREAS,
      this Agreement is also intended to provide Executive with a non-qualified stock
      option to purchase shares of the Common Stock pursuant to the terms and
      conditions set forth herein;

     

    NOW
      THEREFORE, it is agreed as follows:

     

    ARTICLE
      I. RESTRICTED
      STOCK UNIT AWARD

     

    1.1 Restricted
      Stock Unit Award.
      Subject
      to the terms and conditions of this Agreement and pursuant to the Company’s
      Third Amended and Restated 1998 Stock Incentive Plan (the “Plan”),
      the
      Company hereafter will grant RSUs to Executive in accordance with the vesting
      table set forth below. On each vesting date set forth below (each a
“Vesting
      Date”),
      the
      Company shall be considered to have awarded RSUs in the indicated amount to
      the
      Executive. 

    

      
        	
                % of total RSUs Vested

              	 	
                Vesting Date

              	 	
                RSUs Vesting

                on Vesting Date

              	 	
                Total RSUs Vested 

                to Date

              
	
                8.33%

              	 	
                March 31,
                  2008

              	 	
                947

              	 	
                947

              
	
                8.33%

              	 	
                June
                  30, 2008

              	 	
                947

              	 	
                1,894

              
	
                8.33%

              	 	
                September
                  30, 2008

              	 	
                947

              	 	
                2,841

              
	
                8.33%

              	 	
                December
                  31, 2008

              	 	
                947

              	 	
                3,788

              
	
                8.33%

              	 	
                March
                  31, 2009

              	 	
                947

              	 	
                4,735

              
	
                8.33%

              	 	
                June
                  30, 2009

              	 	
                947

              	 	
                5,682

              
	
                8.33%

              	 	
                September
                  30, 2009

              	 	
                947

              	 	
                6,629

              
	
                8.33%

              	 	
                December
                  31, 2009

              	 	
                947

              	 	
                7,576

              
	
                8.33%

              	 	
                March
                  31, 2010

              	 	
                947

              	 	
                8,523

              
	
                8.33%

              	 	
                June
                  30, 2010

              	 	
                947

              	 	
                9,470

              
	
                8.33%

              	 	
                September
                  30, 2010

              	 	
                947

              	 	
                10,417

              
	
                8.37%

              	 	
                December
                  31, 2010

              	 	
                949

              	 	
                11,366

              

      

    

     

    1.2 Conversion
      to Common Stock.
      Each
      vested RSU shall convert into one (1) share of Common Stock on the applicable
      Vesting Date; provided, that, if the applicable Vesting Date occurs during
      a
      period in which Executive is (a) subject to a lock-up agreement restricting
      Executive’s ability to sell Common Stock in the open market, (b) restricted from
      selling Common Stock in the open market because a trading window is not
      available, in the opinion of Company, or (c) trading is otherwise not
      appropriate, in the reasonable and good faith opinion of Company, such
      conversion of vested RSUs into shares of Common Stock shall be delayed until
      the
      date immediately following the expiration of the lock-up agreement or the
      opening of a trading window or confirmation by Company that trading is
      appropriate, as the case may be.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II. NON-QUALIFIED
      STOCK OPTION GRANT

     

    2.1 Grant
      of Option.
      The
      Company hereby grants Executive an option (the “Option”)
      to
      purchase, as a whole or in part, on the terms provided herein and in the Plan
      the shares (the “Shares”)
      of
      Common Stock at an exercise price per share, as set forth below:

    

      
        	
                Shares:

              	 	
                Exercise Price:

              	 
	
                102,426

              	 	
                $

              	
                1.25

              	 

      

    

    

    Unless
      earlier terminated, the Option shall expire one day before its 10th anniversary
      (the “Final
      Exercise Date”).
      It is
      intended that the Option shall be a non-qualified stock option.

    

    2.2 Vesting
      Schedule.
      Subject
      to the other terms of this Agreement regarding the exercisability of the Option,
      the Shares shall vest and become exercisable, as follows; provided, however,
      that as of each relevant Vesting Date, Executive’s employment with the Company
      has not terminated:

    

      
        	
                % of total Shares Vested

              	 	
                Vesting Date

              	 	
                Shares Vesting

                on Vesting Date

              	 	
                Total Shares Vested

                to Date

              
	
                8.33%

              	 	
                March
                  31, 2008

              	 	
                8,532

              	 	
                8,532

              
	
                8.33%

              	 	
                June
                  30, 2008

              	 	
                8,532

              	 	
                17,064

              
	
                8.33%

              	 	
                September
                  30, 2008

              	 	
                8,532

              	 	
                25,596

              
	
                8.33%

              	 	
                December
                  31, 2008

              	 	
                8,532

              	 	
                34,128

              
	
                8.33%

              	 	
                March
                  31, 2009

              	 	
                8,532

              	 	
                42,660

              
	
                8.33%

              	 	
                June
                  30, 2009

              	 	
                8,532

              	 	
                51,192

              
	
                8.33%

              	 	
                September
                  30, 2009

              	 	
                8,532

              	 	
                59,724

              
	
                8.33%

              	 	
                December
                  31, 2009

              	 	
                8,532

              	 	
                68,256

              
	
                8.33%

              	 	
                March
                  31, 2010

              	 	
                8,532

              	 	
                76,788

              
	
                8.33%

              	 	
                June
                  30, 2010

              	 	
                8,532

              	 	
                85,320

              
	
                8.33%

              	 	
                September
                  30, 2010

              	 	
                8,532

              	 	
                93,852

              
	
                8.37%

              	 	
                December
                  31, 2010

              	 	
                8,574

              	 	
                102,426

              

      

    

     

    The
      right
      of exercise shall be cumulative so that to the extent the Option is not
      exercised in any period to the maximum extent permissible it shall continue
      to
      be exercisable, as a whole or in part, with respect to all Shares for which
      it
      is vested until the earlier of the Final Exercise Date or the termination of
      the
      Option under this Agreement or the Plan.

    

    2.3 Exercise
      of Option.

    

    (a) Form
      of Exercise.
      Each
      election to exercise the Option shall be in writing, signed by Executive, and
      received by the Company at its principal office, accompanied by a copy of this
      Agreement and by payment in
      full
      as provided below. Executive may purchase less than the number of Shares covered
      by the Option, provided that no partial exercise of the Option may be for any
      fractional share or for fewer than 100 whole shares of Common Stock. Payment
      shall be as follows:

    

    (i) in
      cash
      or by check, payable to the order of the
      Company;

    

    (ii) in
      the
      sole discretion of the authorized administrator of the Plan, (A) delivery of
      an
      irrevocable and unconditional undertaking by a creditworthy broker to deliver
      promptly to the Company sufficient funds to pay the exercise price or (B)
      delivery by Executive to the Company of a copy of irrevocable and unconditional
      instructions to a creditworthy broker to deliver promptly to the Company cash
      or
      a check sufficient to pay the exercise price;

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    (iii) delivery
      of shares of Common Stock owned by Executive valued at fair market value, as
      determined in the sole discretion of the board of directors of the Company,
      which Common Stock was owned by Executive at least six months prior to such
      delivery;

    

    (iv) to
      the
      extent permitted by the authorized administrator of the Plan, in its sole
      discretion, by payment of such other lawful consideration as the authorized
      administrator of the Plan may determine; or

    

    (v) any
      combination of the above permitted forms of payment.

    

    A
      certificate or certificates for the Shares purchased shall be issued by the
      Company after the exercise of the Option and payment therefor, including the
      provision for any federal and state withholding taxes, and other applicable
      employment taxes.

    

    (b) Continuous
      Relationship with the Company Required.
      Except
      as otherwise provided in Article III, the Option may not be exercised unless
      Executive, at the time he exercises the Option, is, and has been at all times
      since the Effective Date, an employee of the Company or any parent or subsidiary
      of the Company as defined in Section 424(e) or (f) of the Internal Revenue
      Code
      of 1986, as amended (the “Code”).

    

    ARTICLE
      III. TERMINATION
      OF EMPLOYMENT

     

    3.1 Termination
      of Employment.
       

     

    (a)
       General.
      Except
      as indicated below in (b), if Executive terminates his employment for any
      reason, including by resignation, or if the Company terminates his employment
      with or without a Breach of Conduct (as defined below), Executive may retain
      all
      RSUs and Shares underlying the Option that have vested before the Termination
      Notice Date (as defined below). However, he will not be entitled to receive
      and
      shall forfeit any interest in RSUs and Shares underlying the Option that are
      scheduled to be vested after the Termination Notice Date.

     

    The
      “Termination
      Notice Date”
means
      the date on which Executive resigns (or if earlier, the date on which Executive
      notifies Company that Executive will resign), or the date on which Company
      terminates the employment for or without a Breach of Conduct (or if earlier,
      the
      date on which the Company notifies Executive that employment will be so
      terminated). 

     

    (b) Special
      Rules for Options.
      In the
      case of termination of employment by reason of death, disability (as defined
      under the Executive's employment agreement), resignation or without Breach
      of
      Conduct, the vested Shares underlying the Option will expire if not exercised
      within 365 days after the Termination Notice Date. In the case of termination
      of
      employment for Breach of Conduct, all vested Shares underlying the Option will
      expire immediately on the written declaration of the authorized administrator
      of
      the Plan.

     

    Such
      declaration shall be communicated in writing to Executive. In addition, the
      Company may, in its sole discretion, by written notice, demand that any or
      all
      stock certificates for Shares acquired pursuant to the exercise of the Option,
      or any profit realized from the sale or transfer of such Shares, be returned
      to
      the Company within five days of receipt of such notice, and any exercise price
      paid by Executive shall be returned to Executive by the Company immediately
      thereafter, without interest. The Company shall be entitled to reimbursement
      of
      reasonable attorney fees and expenses incurred in seeking to enforce its rights
      under this paragraph.

    

    “Breach
      of Conduct”
shall
      mean activities which constitute a serious breach of conduct that, only if
      possible to cure as determined by the authorized administrator of the Plan
      in
      its sole discretion, is not cured within 30 days after receipt of written notice
      to Executive, including, but not limited to: (i) the disclosure or misuse of
      confidential information, trade secrets or other intellectual property of the
      Company or third parties who have disclosed such information, secrets or
      intellectual property to the Company or a company that controls, is controlled
      by or is under common control with the Company (collectively, an “Affiliate”),
      (ii)
      activities in violation of the policies of the Company or any Affiliate,
      including without limitation, the Company’s insider trading policy; (iii) the
      violation or breach of any material provision in any applicable contract or
      agreement between Executive and the Company (or an Affiliate), including, for
      example, a violation or breach which is grounds for discharge for cause; (iv)
      engaging in conduct relating to Executive’s employment for which either criminal
      or civil penalties have been sought; (v) engaging in activities which adversely
      affect or which are contrary or harmful to the interests of the Company or
      Affiliate, or (vi) in the event that Executive and Company have not signed
      a
      noncompetition agreement (which therefore otherwise would govern issues of
      noncompetition), engaging in competition with the Company or any Affiliate
      or
      soliciting their respective employees or customers on behalf of some other
      entity during employment or within one year following termination of employment
      with the Company or Affiliate. The determination of Breach of Conduct shall
      be
      determined by the authorized administrator of the Plan in good faith and in
      its
      sole discretion.

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV. GENERAL
      PROVISIONS

    

    4.1 Acquisition
      Events.
      Upon
      the occurrence of an Acquisition Event (as defined below), or the execution
      by
      the Company of any agreement with respect to an Acquisition Event, the
      authorized administrator of the Plan shall take any one or more of the following
      actions with respect to the RSUs and the Option: (i) provide that the RSUs
      and/or the Option shall be assumed, or equivalent equity compensation shall
      be
      substituted, by the acquiring or succeeding corporation (or an affiliate
      thereof); (ii) upon written notice to Executive, provide that any portion of
      the
      RSUs that are vested but not converted and/or any portion of the Shares
      underlying the Option that are vested but not exercised will become converted
      or
      exercisable, as the case may be, in full as of a specified time (the
“Acceleration
      Time”)
      prior
      to the Acquisition Event and will terminate immediately prior to the
      consummation of such Acquisition Event, except to the extent exercised by
      Executive between the Acceleration Time and the consummation of such Acquisition
      Event; (iii) in the event of an Acquisition Event under the terms of which
      holders of Common Stock will receive upon consummation thereof a cash payment
      for each share of Common Stock surrendered pursuant to such Acquisition Event
      (the “Acquisition
      Price”),
      provide that (A) the unvested RSUs shall terminate upon consummation of such
      Acquisition Event and Executive shall receive, in exchange therefor, a cash
      payment equal to the amount equal to the Acquisition Price multiplied by the
      number of shares of Common Stock subject to such unvested RSUs, (B) the Option
      shall terminate upon consummation of such Acquisition Event and Executive shall
      receive, in exchange therefor, a cash payment equal to the amount (if any)
      by
      which (x) the Acquisition Price multiplied by the number of shares of Common
      Stock subject to the Option (whether or not then convertible or exercisable),
      exceeds (y) the aggregate exercise price of the Option; and (iv) provide that
      the unvested RSUs and/or the Option (A) shall become exercisable, realizable
      or
      vested in full, or shall be free of all conditions or restrictions, as
      applicable to the Option, prior to the consummation of the Acquisition Event,
      or
      (B), if applicable, shall be assumed, or equivalent options shall be
      substituted, by the acquiring or succeeding corporation (or an affiliate
      thereof).

    

    An
      “Acquisition
      Event”
shall
      mean: (a) any merger or consolidation which results in the voting securities
      of
      the Company outstanding immediately prior thereto representing immediately
      thereafter (either by remaining outstanding or by being converted into voting
      securities of the surviving or acquiring entity) less than 50% of the combined
      voting power of the voting securities of the Company or such surviving or
      acquiring entity outstanding immediately after such merger or consolidation;
      (b)
      any sale of all or substantially all of the assets of the Company; or (c) the
      complete liquidation of the Company.

    

    4.2 Acceleration.
      The
      authorized administrator of the Plan may at any time provide that the Option
      shall become immediately exercisable in full or in part, that the Option may
      become exercisable in full or in part or free of some or all restrictions or
      conditions, or otherwise realizable in full or in part, as the case may
      be.

    

    4.3 Golden
      Parachute Payment Excise Tax Protection.
      In
      the
      event that the excise tax imposed by Section 4999 of the Code, (or any successor
      penalty or excise tax subsequently imposed by law) applies to any payments
      or
      benefits specifically paid or conferred only under this Agreement (the
“Excise
      Tax”),
      an
      additional amount shall be paid by the Company to the Executive equal to the
      amount of such Excise Tax (the “Gross
      Up Payment”);
      provided, however in no event shall the aggregate amount payable by the Company
      to Executive for any excise tax imposed by Section 4999 of the Code pursuant
      to
      this Agreement and all other agreements between the Company and Executive exceed
      $250,000. The Company and its advisers shall make the determination of the
      amount of the Gross Up Payment. To the extent that the amount of such Gross
      Up
      Payment exceeds the amount of Excise Tax actually paid by Executive, Executive
      shall promptly pay to the Company such excess amount.

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V. TRANSFERABILITY

     

    5.1 Nontransferability
      of Agreement, RSUs and the Option.
      This
      Agreement, the RSUs and the Option may not be sold, assigned, transferred,
      pledged or otherwise encumbered by Executive,
      either
      voluntarily or by operation of law, except by will or the laws of descent and
      distribution. Notwithstanding
      the foregoing, Executive’s transfer to a revocable trust that is solely for the
      benefit of Executive and Executive’s spouse and/or issue during Executive’s
      lifetime and transfer under such trust at Executive’s death to the trust’s
      intended beneficiaries shall not be deemed to be prohibited by the foregoing
      provisions. If any person other than Executive, Executive’s then current spouse,
      and Executive’s issue shall possess a vested interest in such trust during the
      lifetime of Executive, such interest shall not be recognized hereunder as giving
      such person any right to the benefit of any RSUs or the shares of Common Stock
      issuable upon conversion thereof. In such event the RSUs shall revest in
      Executive as if such transfer in trust had not occurred. During the lifetime
      of
      Executive, the RSUs and the Option shall be exercisable only by
      Executive.

     

    ARTICLE
      VI. MISCELLANEOUS

     

    6.1 Provisions
      of the Plan.
      This
      Agreement is subject to the provisions of the Plan, a copy of which Executive
      hereby acknowledges receiving with this Agreement.

    

    6.2 No
      Right to Continued Employment.
      This
      Agreement shall not confer upon Executive any right with respect to continuance
      of employment by the Company, nor shall it interfere in any way with the right
      of the Company to terminate Executive’s employment at any time. 

    

    6.3 No
      Right as Stockholder.
      Executive
      shall
      not be entitled to vote any shares of Common Stock that may be acquired through
      conversion of RSUs or the Shares underlying the Option to Common Stock, shall
      not receive any dividends attributed to such shares of Common Stock, and shall
      have no other rights of a stockholder with respect to the RSUs and/or the Option
      unless and until the Common Stock issuable upon conversion of the RSUs has
      been
      delivered to Executive or the Option is duly exercised by Executive and the
      Common Stock is issued.

    

    6.4 Compliance
      with Law and Regulations.
      This
      Agreement and the obligation of the Company to issue, sell and deliver shares
      of
      Common Stock hereunder shall be subject to all applicable federal and state
      laws, rules and regulations and to such approvals by any government or
      regulatory agency as may be required. The Company shall not be required to
      issue
      or deliver any certificates for Shares or to remove restrictions from shares
      of
      Common Stock previously delivered until (a) the listing of such Shares on any
      stock exchange on which the Shares may then be listed, (b) all conditions have
      been met or removed to the satisfaction of the Company, (c) in the opinion
      of
      the Company’s counsel, all other legal matters in connection with the issuance
      and delivery of such shares have been satisfied, including any applicable
      securities laws and any applicable stock exchange or stock market rules and
      regulations, (d) Executive has executed and delivered to the Company such
      representations or agreements as the Company may consider appropriate to satisfy
      the requirements of any applicable laws, rules or regulations and (e) the
      completion of any registration or qualification of such Shares under any federal
      or state law, or any rule or regulation of any government body which the Company
      shall, in its sole discretion, determine to be necessary or advisable. Moreover,
      the Option and the RSUs may not be exercised or converted to Common Stock if
      its
      exercise or conversion, or the receipt of Shares pursuant thereto, would be
      contrary to applicable law. 

    

    6.5 Adjustment to
      Common Stock.
      In the
      event of any stock split, stock dividend, recapitalization, reorganization,
      merger, consolidation, combination, exchange of shares, liquidation, spin-off
      or
      other similar change in capitalization or event, or any distribution to holders
      of Common Stock other than a normal cash dividend, the number and class of
      securities each RSU shall be convertible into under this Agreement and the
      number of Shares underlying the Option shall be appropriately adjusted by
      Company to the extent the authorized administrator of the Plan shall determine,
      in good faith, that such an adjustment is
      necessary and appropriate. 

    

    6.6 Withholding.
      Executive shall pay to Company, or make provision satisfactory to Company for
      payment of, any taxes required by
      law to
      be withheld in connection with this Agreement no later than each Vesting Date
      upon which Company vests RSUs to Executive. No shares of Common Stock will
      be
      issued pursuant to the exercise of the Option unless and until Executive pays
      to
      the Company, or makes provision satisfactory to the Company for payment of,
      any
      federal, state or local withholding taxes required by law to be withheld in
      respect of the Option. Executive may satisfy such tax obligations by delivering
      to Company cash in the form of wire transfer or check and Company may, to the
      extent permitted by law, deduct any such tax obligations from any payment of
      any
      kind otherwise due to Executive. 

     

    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    

     

    6.7 Common
      Stock Reserved.
      Company
      shall at all times during the term of this Agreement reserve and keep available
      such number of shares of Common Stock as will be sufficient to satisfy the
      requirements of this Agreement. 

    

    6.8 Notices.
      Any
      notice hereunder to the Company shall be addressed to Beacon Power Corporation,
      Attn: Compensation Committee, 234 Ballardvale Street, Wilmington, MA 01887,
      and
      any notice hereunder to Executive shall be sent to the address reflected on
      the
      payroll records of the Company, subject to the right of either party to
      designate at any time hereafter in writing some other address.

    

    6.9 Delaware
      Law to Govern.
      This
      Agreement shall be construed and administered in accordance with and governed
      by
      the laws of the State of Delaware (without giving effect to any conflict or
      choice of laws provisions thereof that would cause the application of the
      domestic substantive laws of any other jurisdiction).

    

    6.10 Certain
      Special Rules. To the extent that this Agreement
      and the grant of the RSUs and the Option hereunder become subject to the
      provisions of Section 409A of the Code, the Company and Executive agree that
      the
      RSUs and the Option may be amended, modified, rescinded or substituted by the
      Company with an award of comparable economic value as required to maintain
      compliance with the provisions of Section 409A of the Code.

    

    6.11 Amendment
      of Agreement.
      Company
      may amend, modify or
      terminate this Agreement, provided that Executive’s consent to such action shall
      be required unless Company determines that the action, taking into account
      any
      related action, would not materially and adversely affect
      Executive.

    

    6.12 Successors
      and Assigns; No Third Party Beneficiaries.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and
      administrators of the parties hereto. There are no third party beneficiaries
      of
      this Agreement. 

    

    6.13 Entire
      Agreement.
      This
      Agreement and the Plan constitute the full and entire understanding and
      agreement of the parties with regard to the RSUs and the Option and supersede
      in
      their entirety all other prior agreements, whether oral or written, with respect
      thereto. 

    

    6.14 Severability;
      Titles and Subtitles; Gender; Singular and Plural; Counterparts;
      Facsimile.

     

    (a) In
      case
      any provision of this Agreement shall be invalid, illegal or unenforceable,
      the
      validity, legality and enforceability of the remaining provisions of this
      Agreement shall not in any way be affected or impaired thereby.

     

    (b) The
      titles of the sections and subsections of this Agreement are for convenience
      of
      reference only and are not to be considered in construing this
      Agreement.

     

    (c) The
      use
      of any gender in this Agreement shall be deemed to include the other genders,
      and the use of the singular in this Agreement shall be deemed to include the
      plural (and vice versa), wherever appropriate.

     

    (d) This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together constitute one instrument.

     

    (e) Counterparts
      of this Agreement (or applicable signature pages hereof) that are manually
      signed and delivered by facsimile transmission shall be deemed to constitute
      signed original counterparts hereof and shall bind the parties signing and
      delivering in such manner.

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument
      as of the Effective Date.

    

      
        	
                EXECUTIVE:

              	 	
                BEACON
                  POWER CORPORATION

              
	 	 	 
	
                By:

              	
                 
                  /s/ Matthew L. Lazarewicz

              	 	
                By:

              	
                 
                  /s/ F. William Capp

              
	
                Signature

              	 	
                Signature

              
	 	 	 
	
                Name:
                  Matthew L. Lazarewicz

              	 	
                Name:
                  F.
                  William Capp

              
	 	 	 
	
                Address:

              	 	
                Title:
                  President and Chief Executive
                  Officer

              

      

    

     

    
      
        
        

      

      
        -
          7
          -Unassociated Document

     

    
      DIET
        COFFEE, INC.

      2008
        CALIFORNIA STOCK INCENTIVE PLAN

       

      1.
           Purpose.    The
        purpose of the 2008 California Stock Incentive Plan of Diet Coffee, Inc.
        is to
        further align the interests of employees, directors and non-employee Consultants
        with those of the stockholders by providing incentive compensation opportunities
        tied to the performance of the Common Stock and by promoting increased ownership
        of the Common Stock by such individuals. The Plan is also intended to advance
        the interests of the Company and its stockholders by attracting, retaining
        and
        motivating key personnel upon whose judgment, initiative and effort the
        successful conduct of the Company’s business is largely dependent. 

       

      2.
           Definitions.    Wherever
        the following capitalized terms are used in the Plan, they shall have the
        meanings specified below: 

       

      “Affiliate”
        means
        (i) any entity that would be treated as an “affiliate” of the Company for
        purposes of Rule 12b-2 under the Exchange Act and (ii) any joint venture
        or
        other entity in which the Company has a direct or indirect beneficial ownership
        interest representing at least one-third (1/3) of the aggregate voting power
        of
        the equity interests of such entity or one-third (1/3) of the aggregate fair
        market value of the equity interests of such entity, as determined by the
        Committee.

       

      “Award”
        means an
        award of a Stock Option, Stock Award, or Restricted Stock Award granted under
        the Plan. 

       

      “Award
        Agreement”
        means a
        written or electronic agreement entered into between the Company and a
        Participant setting forth the terms and conditions of an Award granted to
        a
        Participant. 

       

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

       

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

       

      “Common
        Stock”
        means
        the Company’s common stock, $0.001 par value per share. 

       

      “Committee”
        means
        the Compensation Committee of the Board, or such other committee of the Board
        appointed by the Board to administer the Plan, or if no such committee exists,
        the Board. 

       

      “Company”
        means
        Diet Coffee, Inc., a Delaware corporation. 

      

      “Consultant”
        means
        any
        person which is a consultant or advisor to the Company and which is a natural
        person and who provides bona fide services to the Company which are not in
        connection with the offer or sale of securities in a capital-raising transaction
        for the Company, and do not directly or indirectly promote or maintain a
        market
        for the Company’s securities.

      

      “Date
        of Grant”
        means
        the date on which an Award under the Plan is made by the Committee, or such
        later date as the Committee may specify to be the effective date of an Award.
        

       

      “Disability”
        means a
        Participant being considered “disabled” within the meaning of Section
        409A(a)(2)(C) of the Code, unless otherwise provided in an Award Agreement.
        

       

      “Eligible
        Person”
        means
        any person who is a resident of the State of California and
        who is
        an employee of the Company or any Affiliate or any person to whom an offer
        of
        employment with the Company or any Affiliate is extended, as determined by
        the
        Committee, or any person who is a Non-Employee Director, or any person who
        is
        Consultant to the Company..

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended.

       

      “Fair
        Market Value”
        means
        the mean between the highest and lowest reported sales prices of the Common
        Stock on the New York Stock Exchange Composite Tape or, if not listed on
        such
        exchange, on any other national securities exchange on which the Company’s
        common stock is listed or on The Nasdaq Stock Market, or, if not so listed
        on
        any other national securities exchange or The Nasdaq Stock Market, then the
        average of the bid price of the Company’s common stock during the last five
        trading days on the OTC Bulletin Board immediately preceding the last trading
        day prior to the date with respect to which the Fair Market Value is to be
        determined. If the Company’s common stock is not then publicly traded, then the
        Fair Market Value of the Common Stock shall be the book value of the Company
        per
        share as determined on the last day of March, June, September, or December
        in
        any year closest to the date when the determination is to be made. For the
        purpose of determining book value hereunder, book value shall be determined
        by
        adding as of the applicable date called for herein the capital, surplus,
        and
        undivided profits of the Company, and after having deducted any reserves
        theretofore established; the sum of these items shall be divided by the number
        of shares of the Company’s common stock outstanding as of said date, and the
        quotient thus obtained shall represent the book value of each share of the
        Company’s common stock.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      “Incentive
        Stock Option”
        means a
        Stock Option granted under Section 6 hereof that is intended to meet the
        requirements of Section 422 of the Code and the regulations thereunder.

       

      “Non-Employee
        Director”
        means
        any member of the Board who is not an employee of the Company. 

       

      “Nonqualified
        Stock Option”
        means a
        Stock Option granted under Section 6 hereof that is not an Incentive Stock
        Option. 

       

      “Participant”
        means
        any Eligible Person who holds an outstanding Award under the Plan. 

       

      “Plan”
        means
        the 2008 California Stock Incentive Plan of the Company as set forth herein,
        as
        amended from time to time. 

      

      “Restricted
        Stock Award”
        means a
        grant of shares of Common Stock to an Eligible Person under Section 8 hereof
        that are issued subject to such vesting and transfer restrictions as the
        Committee shall determine and set forth in an Award Agreement. 

       

      “Service”
        means a
        Participant’s employment with the Company or any Affiliate or a Participant’s
        service as a Non-Employee Director with the Company, as applicable.

       

      “Stock
        Award”
        means a
        grant of shares of Common Stock to an Eligible Person under Section 7 hereof
        that are issued free of transfer restrictions and forfeiture conditions.
        

       

      “Stock
        Option”
        means a
        contractual right granted to an Eligible Person under Section 6 hereof to
        purchase shares of Common Stock at such time and price, and subject to such
        conditions, as are set forth in the Plan and the applicable Award Agreement.
        

       

      3.
           Administration. 

       

      3.1    Committee
        Members.    The
        Plan shall be administered by a Committee comprised of one or more members
        of
        the Board, or if no such committee exists, the Board.

       

      3.2    Committee
        Authority.    The
        Committee shall have such powers and authority as may be necessary or
        appropriate for the Committee to carry out its functions as described in
        the
        Plan. Subject to the express limitations of the Plan, the Committee shall
        have
        authority in its discretion to determine the Eligible Persons to whom, and
        the
        time or times at which, Awards may be granted, the number of shares, units
        or
        other rights subject to each Award, the exercise, base or purchase price
        of an
        Award (if any), the time or times at which an Award will become vested,
        exercisable or payable, the performance goals and other conditions of an
        Award,
        the duration of the Award, and all other terms of the Award. Subject to the
        terms of the Plan, the Committee shall have the authority to amend the terms
        of
        an Award in any manner that is not inconsistent with the Plan, provided that
        no
        such action shall adversely affect the rights of a Participant with respect
        to
        an outstanding Award without the Participant’s consent. The Committee shall also
        have discretionary authority to interpret the Plan, to make factual
        determinations under the Plan, and to make all other determinations necessary
        or
        advisable for Plan administration, including, without limitation, to correct
        any
        defect, to supply any omission or to reconcile any inconsistency in the Plan
        or
        any Award Agreement hereunder. The Committee may prescribe, amend, and rescind
        rules and regulations relating to the Plan. The Committee’s determinations under
        the Plan need not be uniform and may be made by the Committee selectively
        among
        Participants and Eligible Persons, whether or not such persons are similarly
        situated. The Committee shall, in its discretion, consider such factors as
        it
        deems relevant in making its interpretations, determinations and actions
        under
        the Plan including, without limitation, the recommendations or advice of
        any
        officer or employee of the Company or such attorneys, consultants, accountants
        or other advisors as it may select. All interpretations, determinations and
        actions by the Committee shall be final, conclusive, and binding upon all
        parties. 

       

      
        
           

        

        
          Page
            2 of
            12

          
            

          

        

        
           

        

      

       

      3.3    Delegation
        of Authority.    The
        Committee shall have the right, from time to time, to delegate to one or
        more
        officers of the Company the authority of the Committee to grant and determine
        the terms and conditions of Awards granted under the Plan, subject to the
        requirements of state law and such other limitations as the Committee shall
        determine. In no event shall any such delegation of authority be permitted
        with
        respect to Awards to any members of the Board or to any Eligible Person who
        is
        subject to Rule 16b-3 under the Exchange Act or Section 162(m) of the Code.
        The
        Committee shall also be permitted to delegate, to any appropriate officer
        or
        employee of the Company, responsibility for performing certain ministerial
        functions under the Plan. In the event that the Committee’s authority is
        delegated to officers or employees in accordance with the foregoing, all
        provisions of the Plan relating to the Committee shall be interpreted in
        a
        manner consistent with the foregoing by treating any such reference as a
        reference to such officer or employee for such purpose. Any action undertaken
        in
        accordance with the Committee’s delegation of authority hereunder shall have the
        same force and effect as if such action was undertaken directly by the Committee
        and shall be deemed for all purposes of the Plan to have been taken by the
        Committee. 

       

      4.
           Shares Subject to the Plan. 

       

      4.1    Maximum
        Share Limitations.    Subject
        to Section 4.3 hereof, the maximum aggregate number of shares of Common Stock
        that may be issued and sold under all Awards granted under the Plan shall
        be
        THIRTY THREE MILLION (33,000,000) shares. Shares of Common Stock issued and
        sold
        under the Plan may be either authorized but unissued shares or shares held
        in
        the Company’s treasury. To the extent that any Award involving the issuance of
        shares of Common Stock is forfeited, cancelled, returned to the Company for
        failure to satisfy vesting requirements or other conditions of the Award,
        or
        otherwise terminates without an issuance of shares of Common Stock being
        made
        thereunder, the shares of Common Stock covered thereby will no longer be
        counted
        against the foregoing maximum share limitations and may again be made subject
        to
        Awards under the Plan pursuant to such limitations. Any Awards or portions
        thereof that are settled in cash and not in shares of Common Stock shall
        not be
        counted against the foregoing maximum share limitations. 

       

      4.2    Adjustments.
           If
        there shall occur any change with respect to the outstanding shares of Common
        Stock by reason of any recapitalization, reclassification, stock dividend,
        extraordinary dividend, stock split, reverse stock split or other distribution
        with respect to the shares of Common Stock, or any merger, reorganization,
        consolidation, combination, spin-off or other similar corporate change, or
        any
        other change affecting the Common Stock, the Committee may, in the manner
        and to
        the extent that it deems appropriate and equitable to the Participants and
        consistent with the terms of the Plan, cause an adjustment to be made in
        (i) the
        maximum number and kind of shares provided in Section 4.1 hereof, (ii) the
        number and kind of shares of Common Stock, or other rights subject to then
        outstanding Awards, (iii) the exercise or base price for each share or other
        right subject to then outstanding Awards, and (iv) any other terms of an
        Award
        that are affected by the event. Notwithstanding the foregoing, in the case
        of
        Incentive Stock Options, any such adjustments shall, to the extent practicable,
        be made in a manner consistent with the requirements of Section 424(a) of
        the
        Code. 

      

      4.3
        Anti-Dilution.
        Notwithstanding anything contained in the Plan to cover the contrary, including
        any adjustments discussed in this Section 4, the maximum aggregate number
        of
        shares of Common Stock that may be issued and sold under all Awards granted
        under the Plan shall be anti-dilutive in the event of a reverse stock split
        by
        the Company and shall not result in any reduction in the number of shares
        available and authorized under the Plan at the effective time of such reverse
        stock split(s).

      

      5.
           Participation and Awards.

       

      5.1    Designations
        of Participants.    All
        Eligible Persons are eligible to be designated by the Committee to receive
        Awards and become Participants under the Plan. The Committee has the authority,
        in its discretion, to determine and designate from time to time those Eligible
        Persons who are to be granted Awards, the types of Awards to be granted and
        the
        number of shares of Common Stock or units subject to Awards granted under
        the
        Plan. In selecting Eligible Persons to be Participants and in determining
        the
        type and amount of Awards to be granted under the Plan, the Committee shall
        consider any and all factors that it deems relevant or appropriate.

       

      
        
           

        

        
          Page
            3 of
            12

          
            

          

        

        
           

        

      

       

      5.2    Determination
        of Awards.    The
        Committee shall determine the terms and conditions of all Awards granted
        to
        Participants in accordance with its authority under Section 3.2 hereof. An
        Award
        may consist of one type of right or benefit hereunder or of two or more such
        rights or benefits granted in tandem or in the alternative. In the case of
        any
        fractional share or unit resulting from the grant, vesting, payment or crediting
        of dividends or dividend equivalents under an Award, the Committee shall
        have
        the discretionary authority to (i) disregard such fractional share or unit,
        (ii)
        round such fractional share or unit to the nearest lower or higher whole
        share
        or unit, or (iii) convert such fractional share or unit into a right to receive
        a cash payment. To the extent deemed necessary by the Committee, an Award
        shall
        be evidenced by an Award Agreement as described in Section 11.1 hereof.

       

      6.
           Stock Options. 

       

      6.1    Grant
        of Stock Options.    A
        Stock Option may be granted to any Eligible Person selected by the Committee.
        Subject to the provisions of Section 6.8 hereof and Section 422 of the Code,
        each Stock Option shall be designated, in the discretion of the Committee,
        as an
        Incentive Stock Option or as a Nonqualified Stock Option. 

       

      6.2    Exercise
        Price.    The
        exercise price per share of a Stock Option shall not be less than 85 percent
        of
        the Fair Market Value of the shares of Common Stock on the Date of Grant,
        provided that the Committee may in its discretion specify for any Stock Option
        an exercise price per share that is higher than the Fair Market Value on
        the
        Date of Grant, except that the price shall not be less than 110 percent of
        the
        Fair Market Value in the case of any person who owns securities possessing
        more
        than 10 percent of the total combined voting power of all classes of securities
        of the Company.

       

      6.3    Vesting
        of Stock Options.    The
        Committee shall in its discretion prescribe the time or times at which, or
        the
        conditions upon which, a Stock Option or portion thereof shall become vested
        and/or exercisable, and may accelerate the vesting or exercisability of any
        Stock Option at any time, provided, however, that any Stock Option shall
        vest at
        the rate of at least twenty percent (20%) per year over five (5) years from
        the
        date the Stock Option is granted, subject to reasonable conditions as may
        be
        provided for in the Award Agreement. However, in the case of a Stock Option
        granted to officers, Non-employee Directors, managers or Consultants of the
        Company, the Stock Option may become fully exercisable, subject to reasonable
        conditions, at anytime or during any period established by the Company. The
        requirements for vesting and exercisability of a Stock Option may be based
        on
        the continued Service of the Participant with the Company or its Affiliates
        for
        a specified time period (or periods) or on the attainment of specified
        performance goals established by the Committee in its discretion. 

       

      6.4    Term
        of Stock Options.    The
        Committee shall in its discretion prescribe in an Award Agreement the period
        during which a vested Stock Option may be exercised, provided that the maximum
        term of a Stock Option shall be ten years from the Date of Grant. Except
        as
        otherwise provided in this Section 6 or as otherwise may be provided by the
        Committee, no Stock Option issued to an employee or a Non-Employee Director
        of
        the Company may be exercised at any time during the term thereof unless the
        employee or a Non-Employee Director Participant is then in the Service of
        the
        Company or one of its Affiliates. 

       

      6.5    Termination
        of Service.    Subject
        to Section 6.8 hereof with respect to Incentive Stock Options, the Stock
        Option
        of any Participant whose Service with the Company or one of its Affiliates
        is
        terminated for any reason shall terminate on the earlier of (A) the date
        that
        the Stock Option expires in accordance with its terms or (B) unless otherwise
        provided in an Award Agreement, and except for termination for cause (as
        described in Section 10.2 hereof), the expiration of the applicable time
        period
        following termination of Service, in accordance with the following: (1) twelve
        months if Service ceased due to Disability, (2) eighteen months if Service
        ceased at a time when the Participant is eligible to elect immediate
        commencement of retirement benefits at a specified retirement age under a
        pension plan to which the Company or any of its Affiliates had made
        contributions, (3) eighteen months if the Participant died while in the Service
        of the Company or any of its Affiliates, or (iv) three months if Service
        ceased
        for any other reason. During the foregoing applicable period, except as
        otherwise specified in the Award Agreement or in the event Service was
        terminated by the death of the Participant, the Stock Option may be exercised
        by
        such Participant in respect of the same number of shares of Common Stock,
        in the
        same manner, and to the same extent as if he or she had remained in the
        continued Service of the Company or any Affiliate during the first three
        months
        of such period; provided that no additional rights shall vest after such
        three
        months. The Committee shall have authority to determine in each case whether
        an
        authorized leave of absence shall be deemed a termination of Service for
        purposes hereof, as well as the effect of a leave of absence on the vesting
        and
        exercisability of a Stock Option. Unless otherwise provided by the Committee,
        if
        an entity ceases to be an Affiliate of the Company or otherwise ceases to
        be
        qualified under the Plan or if all or substantially all of the assets of
        an
        Affiliate of the Company are conveyed (other than by encumbrance), such
        cessation or action, as the case may be, shall be deemed for purposes hereof
        to
        be a termination of the Service. 

       

      
        
           

        

        
          Page
            4 of
            12

          
            

          

        

        
           

        

      

       

      6.6    Stock
        Option Exercise; Tax Withholding.    Subject
        to such terms and conditions as shall be specified in an Award Agreement,
        a
        Stock Option may be exercised in whole or in part at any time during the
        term
        thereof by notice in the form required by the Company, together with payment
        of
        the aggregate exercise price therefor and applicable withholding tax. Payment
        of
        the exercise price shall be made in the manner set forth in the Award Agreement,
        unless otherwise provided by the Committee: (i) in cash or by cash equivalent
        acceptable to the Committee, (ii) by payment in shares of Common Stock that
        have
        been held by the Participant for at least six months (or such period as the
        Committee may deem appropriate, for accounting purposes or otherwise) valued
        at
        the Fair Market Value of such shares on the date of exercise, (iii) through
        an
        open-market, broker-assisted sales transaction pursuant to which the Company
        is
        promptly delivered the amount of proceeds necessary to satisfy the exercise
        price, (iv) by a combination of the methods described above or (v) by such
        other
        method as may be approved by the Committee and set forth in the Award Agreement.
        In addition to and at the time of payment of the exercise price, the Participant
        shall pay to the Company the full amount of any and all applicable income
        tax,
        employment tax and other amounts required to be withheld in connection with
        such
        exercise, payable under such of the methods described above for the payment
        of
        the exercise price as may be approved by the Committee and set forth in the
        Award Agreement.

       

      6.7    Limited
        Transferability of Nonqualified Stock Options.    All
        Stock Options shall be nontransferable except (i) upon the Participant’s death,
        in accordance with Section 11.2 hereof or (ii) in the case of Nonqualified
        Stock
        Options only, for the transfer of all or part of the Stock Option to a
        Participant’s “family member” (as defined for purposes of the Form S-8
        registration statement under the Securities Act of 1933), as may be approved
        by
        the Committee in its discretion at the time of proposed transfer. The transfer
        of a Nonqualified Stock Option may be subject to such terms and conditions
        as
        the Committee may in its discretion impose from time to time. Subsequent
        transfers of a Nonqualified Stock Option shall be prohibited other than in
        accordance with Section 11.2 hereof. 

       

      6.8    Additional
        Rules for Incentive Stock Options. 

       

      (a)    Eligibility.
           An
        Incentive Stock Option may only be granted to an Eligible Person who is
        considered an employee for purposes of Treasury Regulation §1.421-7(h) with
        respect to the Company or any Affiliate that qualifies as a “subsidiary
        corporation” with respect to the Company for purposes of Section 424(f) of the
        Code. 

       

      (b)     Termination
        of Employment.    An
        Award of an Incentive Stock Option may provide that such Stock Option may
        be
        exercised not later than 3 months following termination of employment of
        the
        Participant with the Company and all Subsidiaries, or not later than one
        year
        following a permanent and total disability within the meaning of Section
        22(e)(3) of the Code, as and to the extent determined by the Committee to
        comply
        with the requirements of Section 422 of the Code. 

       

      (c)    Other
        Terms and Conditions; Nontransferability.    Any
        Incentive Stock Option granted hereunder shall contain such additional terms
        and
        conditions, not inconsistent with the terms of the Plan, as are deemed necessary
        or desirable by the Committee, which terms, together with the terms of the
        Plan,
        shall be intended and interpreted to cause such Incentive Stock Option to
        qualify as an “incentive stock option” under Section 422 of the Code. An Award
        Agreement for an Incentive Stock Option may provide that such Stock Option
        shall
        be treated as a Nonqualified Stock Option to the extent that certain
        requirements applicable to “incentive stock options” under the Code shall not be
        satisfied. An Incentive Stock Option shall by its terms be nontransferable
        other
        than by will or by the laws of descent and distribution, and shall be
        exercisable during the lifetime of a Participant only by such Participant.
        

       

      (d)    Disqualifying
        Dispositions.    If
        shares of Common Stock acquired by exercise of an Incentive Stock Option
        are
        disposed of within two years following the Date of Grant or one year following
        the transfer of such shares to the Participant upon exercise, the Participant
        shall, promptly following such disposition, notify the Company in writing
        of the
        date and terms of such disposition and provide such other information regarding
        the disposition as the Company may reasonably require. 

       

      
        
           

        

        
          Page
            5 of
            12

          
            

          

        

        
           

        

      

       

      6.9    Repricing
        Prohibited.    Subject
        to the adjustment provisions contained in Section 4.2 hereof, without the
        prior
        approval of the Company’s stockholders, evidenced by a majority of votes cast,
        neither the Committee nor the Board shall cause the cancellation, substitution
        or amendment of a Stock Option that would have the effect of reducing the
        exercise price of such a Stock Option previously granted under the Plan,
        or
        otherwise approve any modification to such a Stock Option that would be treated
        as a “repricing” under the then applicable rules, regulations or listing
        requirements. 

       

      7.
           Stock Awards. 

       

      7.1    Grant
        of Stock Awards.    A
        Stock Award may be granted to any Eligible Person selected by the Committee.
        A
        Stock Award may be granted for past services, in lieu of bonus or other cash
        compensation, as directors’ compensation or for any other valid purpose as
        determined by the Committee. A Stock Award granted to an Eligible Person
        represents shares of Common Stock that are issued without restrictions on
        transfer and other incidents of ownership and free of forfeiture conditions,
        except as otherwise provided in the Plan and the Award Agreement. The deemed
        issuance price of shares of Common Stock subject to each Stock Award shall
        not
        be less than 85 percent of the Fair Market Value of the Common Stock on the
        date
        of the grant. In the case of any person who owns securities possessing more
        than
        ten percent of the combined voting power of all classes of securities of
        the
        issuer or its parent or subsidiaries possessing voting power, the deemed
        issuance price of shares of Common Stock subject to each Stock Award shall
        be at
        least 100 percent of the Fair Market Value of the Common Stock on the date
        of
        the grant. The Committee may, in connection with any Stock Award, require
        the
        payment of a specified purchase price. 

       

      7.2    Rights
        as Stockholder.    Subject
        to the foregoing provisions of this Section 7 and the applicable Award
        Agreement, upon the issuance of the Common Stock under a Stock Award the
        Participant shall have all rights of a stockholder with respect to the shares
        of
        Common Stock, including the right to vote the shares and receive all dividends
        and other distributions paid or made with respect thereto. 

      

      8.    Restricted
        Stock Awards. 

       

      8.1    Grant
        of Restricted Stock Awards.    A
        Restricted Stock Award may be granted to any Eligible Person selected by
        the
        Committee. The deemed issuance price of shares of Common Stock subject to
        each
        Restricted Stock Award shall not be less than 85 percent of the Fair Market
        Value of the Common Stock on the date of the grant. In the case of any person
        who owns securities possessing more than ten percent of the combined voting
        power of all classes of securities of the issuer or its parent or subsidiaries
        possessing voting power, the deemed issuance price of shares of Common Stock
        subject to each Restricted Stock Award shall be at least 100 percent of the
        Fair
        Market Value of the Common Stock on the date of the grant. The Committee
        may
        require the payment by the Participant of a specified purchase price in
        connection with any Restricted Stock Award. 

       

      8.2    Vesting
        Requirements.    The
        restrictions imposed on shares granted under a Restricted Stock Award shall
        lapse in accordance with the vesting requirements specified by the Committee
        in
        the Award Agreement, provided that the Committee may accelerate the vesting
        of a
        Restricted Stock Award at any time. Such vesting requirements may be based
        on
        the continued Service of the Participant with the Company or its Affiliates
        for
        a specified time period (or periods) or on the attainment of specified
        performance goals established by the Committee in its discretion. If the
        vesting
        requirements of a Restricted Stock Award shall not be satisfied, the Award
        shall
        be forfeited and the shares of Common Stock subject to the Award shall be
        returned to the Company. 

       

      8.3    Restrictions.    Shares
        granted under any Restricted Stock Award may not be transferred, assigned
        or
        subject to any encumbrance, pledge, or charge until all applicable restrictions
        are removed or have expired, unless otherwise allowed by the Committee. Failure
        to satisfy any applicable restrictions shall result in the subject shares
        of the
        Restricted Stock Award being forfeited and returned to the Company. The
        Committee may require in an Award Agreement that certificates representing
        the
        shares granted under a Restricted Stock Award bear a legend making appropriate
        reference to the restrictions imposed, and that certificates representing
        the
        shares granted or sold under a Restricted Stock Award will remain in the
        physical custody of an escrow holder until all restrictions are removed or
        have
        expired. 

       

      
        
           

        

        
          Page
            6 of
            12

          
            

          

        

        
           

        

      

       

      8.4    Rights
        as Stockholder.    Subject
        to the foregoing provisions of this Section 8 and the applicable Award
        Agreement, the Participant shall have all rights of a stockholder with respect
        to the shares granted to the Participant under a Restricted Stock Award,
        including the right to vote the shares and receive all dividends and other
        distributions paid or made with respect thereto. The Committee may provide
        in an
        Award Agreement for the payment of dividends and distributions to the
        Participant at such times as paid to stockholders generally or at the times
        of
        vesting or other payment of the Restricted Stock Award. 

       

      8.5    Section
        83(b) Election.    If
        a Participant makes an election pursuant to Section 83(b) of the Code with
        respect to a Restricted Stock Award, the Participant shall file, within 30
        days
        following the Date of Grant, a copy of such election with the Company and
        with
        the Internal Revenue Service, in accordance with the regulations under Section
        83 of the Code. The Committee may provide in an Award Agreement that the
        Restricted Stock Award is conditioned upon the Participant’s making or
        refraining from making an election with respect to the Award under Section
        83(b)
        of the Code. 

       

      9.
           Change in Control. 

       

      9.1    Effect
        of Change in Control.    Except
        to the extent an Award Agreement provides for a different result (in which
        case
        the Award Agreement will govern and this Section 9 of the Plan shall not
        be
        applicable), notwithstanding anything elsewhere in the Plan or any rules
        adopted
        by the Committee pursuant to the Plan to the contrary, if a Triggering Event
        shall occur within the 12-month period beginning with a Change in Control
        of the
        Company, then, effective immediately prior to such Triggering Event, each
        outstanding Stock Option, to the extent that it shall not otherwise have
        become
        vested and exercisable, shall automatically become fully and immediately
        vested
        and exercisable, without regard to any otherwise applicable vesting requirement.
        

       

      9.2    Definitions 

       

      (a)    Cause.
           For
        purposes of this Section 9, the term “Cause” shall mean a determination by the
        Committee that a Participant (i) has been convicted of, or entered a plea
        of
        nolo contendere to, a crime that constitutes a felony under Federal or state
        law, (ii) has engaged in willful gross misconduct in the performance of the
        Participant’s duties to the Company or an Affiliate or (iii) has committed a
        material breach of any written agreement with the Company or any Affiliate
        with
        respect to confidentiality, noncompetition, nonsolicitation or similar
        restrictive covenant. Subject to the first sentence of Section 9.1 hereof,
        in
        the event that a Participant is a party to an employment agreement with the
        Company or any Affiliate that defines a termination on account of “Cause” (or a
        term having similar meaning), such definition shall apply as the definition
        of a
        termination on account of “Cause” for purposes hereof, but only to the extent
        that such definition provides the Participant with greater rights. A termination
        on account of Cause shall be communicated by written notice to the Participant,
        and shall be deemed to occur on the date such notice is delivered to the
        Participant. 

       

      (b)    Change
        in Control.    For
        purposes of this Section 9, a “Change in Control” shall be deemed to have
        occurred upon: 

       

      (i)
        the
        occurrence of an acquisition by any individual, entity or group (within the
        meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
        beneficial ownership (within the meaning of Rule 13d-3 promulgated under
        the
        Exchange Act) of a percentage of the combined voting power of the then
        outstanding voting securities of the Company entitled to vote generally in
        the
        election of directors (the “Company Voting Securities”) (but excluding (1) any
        acquisition directly from the Company (other than an acquisition by virtue
        of
        the exercise of a conversion privilege of a security that was not acquired
        directly from the Company), (2) any acquisition by the Company or an Affiliate
        and (3) any acquisition by an employee benefit plan (or related trust) sponsored
        or maintained by the Company or any Affiliate) (an “Acquisition”) that is thirty
        percent (30%) or more of the Company Voting Securities; 

       

      (ii)
        at
        any time during a period of two (2) consecutive years or less, individuals
        who
        at the beginning of such period constitute the Board (and any new directors
        whose election by the Board or nomination for election by the Company’s
        stockholders was approved by a vote of at least two-thirds (2/3) of the
        directors then still in office who either were directors at the beginning
        of the
        period or whose election or nomination for election was so approved) cease
        for
        any reason (except for death, Disability or voluntary retirement) to constitute
        a majority thereof;

       

      
        
           

        

        
          Page
            7 of
            12

          
            

          

        

        
           

        

      

       

      (iii)
        an
        Acquisition that is fifty percent (50%) or more of the Company Voting
        Securities; 

       

      (iv)
        the
        consummation of a merger, consolidation, reorganization or similar corporate
        transaction, whether or not the Company is the surviving company in such
        transaction, other than a merger, consolidation, or reorganization that would
        result in the Persons who are beneficial owners of the Company Voting Securities
        outstanding immediately prior thereto continuing to beneficially own, directly
        or indirectly, in substantially the same proportions, at least fifty percent
        (50%) of the combined voting power of the Company Voting Securities (or the
        voting securities of the surviving entity) outstanding immediately after
        such
        merger, consolidation or reorganization; 

       

      (v)
        the
        sale or other disposition of all or substantially all of the assets of the
        Company; 

       

      (vi)
        the
        approval by the stockholders of the Company of a complete liquidation or
        dissolution of the Company; or 

       

      (vii)
        the
        occurrence of any transaction or event, or series of transactions or events,
        designated by the Board in a duly adopted resolution as representing a change
        in
        the effective control of the business and affairs of the Company, effective
        as
        of the date specified in any such resolution. 

       

      (c)    Constructive
        Termination.    For
        purposes of this Section 9, a “Constructive Termination” shall mean a
        termination of employment by a Participant within sixty (60) days following
        the
        occurrence of any one or more of the following events without the Participant’s
        written consent (i) any reduction in position, title (for Vice Presidents
        or
        above), overall responsibilities, level of authority, level of reporting
        (for
        Vice Presidents or above), base compensation, annual incentive compensation
        opportunity, aggregate employee benefits or (ii) a request that the
        Participant’s location of employment be relocated by more than fifty (50) miles.
        Subject to the first sentence of Section 9.1 hereof, in the event that a
        Participant is a party to an employment agreement with the Company or any
        Affiliate (or a successor entity) that defines a termination on account of
        “Constructive Termination,” “Good Reason” or “Breach of Agreement” (or a term
        having a similar meaning), such definition shall apply as the definition
        of
“Constructive Termination” for purposes hereof in lieu of the foregoing, but
        only to the extent that such definition provides the Participant with greater
        rights. A Constructive Termination shall be communicated by written notice
        to
        the Committee, and shall be deemed to occur on the date such notice is delivered
        to the Committee, unless the circumstances giving rise to the Constructive
        Termination are cured within five (5) days of such notice. 

       

      (d)    Triggering
        Event.    For
        purposes of this Section 9, a “Triggering Event” shall mean (i) the termination
        of Service of a Participant by the Company or an Affiliate (or any successor
        thereof) other than on account of death, Disability or Cause, (ii) the
        occurrence of a Constructive Termination or (iii) any failure by the Company
        (or
        a successor entity) to assume, replace, convert or otherwise continue any
        Award
        in connection with the Change in Control (or another corporate transaction
        or
        other change effecting the Common Stock) on the same terms and conditions
        as
        applied immediately prior to such transaction, except for equitable adjustments
        to reflect changes in the Common Stock pursuant to Section 4.2 hereof.

       

      9.3    Excise
        Tax Limit.    In
        the event that the vesting of Awards together with all other payments and
        the
        value of any benefit received or to be received by a Participant would result
        in
        all or a portion of such payment being subject to the excise tax under Section
        4999 of the Code, then the Participant’s payment shall be either (i) the full
        payment or (ii) such lesser amount that would result in no portion of the
        payment being subject to excise tax under Section 4999 of the Code (the “Excise
        Tax”), whichever of the foregoing amounts, taking into account the applicable
        Federal, state, and local employment taxes, income taxes, and the Excise
        Tax,
        results in the receipt by the Participant, on an after-tax basis, of the
        greatest amount of the payment notwithstanding that all or some portion of
        the
        payment may be taxable under Section 4999 of the Code. All determinations
        required to be made under this Section 9 shall be made by Malone & Bailey,
        PLLC or any other accounting firm which is the Company’s outside auditor
        immediately prior to the event triggering the payments that are subject to
        the
        Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm
        to provide detailed supporting calculations of its determinations to the
        Company
        and the Participant. All fees and expenses of the Accounting Firm shall be
        borne
        solely by the Company. The Accounting Firm’s determinations must be made with
        substantial authority (within the meaning of Section 6662 of the Code). For
        the
        purposes of all calculations under Section 280G of the Code and the application
        of this Section 9.3, all determinations as to present value shall be made
        using
        120 percent of the applicable Federal rate (determined under Section 1274(d)
        of
        the Code) compounded semiannually, as in effect on December 30, 2004.

       

      
        
           

        

        
          Page
            8 of
            12

          
            

          

        

        
           

        

      

       

      10.
           Forfeirture Events. 

       

      10.1    General.
           The
        Committee may specify in an Award Agreement at the time of the Award that
        the
        Participant’s rights, payments and benefits with respect to an Award shall be
        subject to reduction, cancellation, forfeiture or recoupment upon the occurrence
        of certain specified events, in addition to any otherwise applicable vesting
        or
        performance conditions of an Award. Such events shall include, but shall
        not be
        limited to, termination of Service for cause, violation of material Company
        policies, breach of noncompetition, confidentiality or other restrictive
        covenants that may apply to the Participant, or other conduct by the Participant
        that is detrimental to the business or reputation of the Company. 

       

      10.2    Termination
        for Cause.    Unless
        otherwise provided by the Committee and set forth in an Award Agreement,
        if a
        Participant’s employment with the Company or any Affiliate shall be terminated
        for cause, the Company may, in its sole discretion, immediately terminate
        such
        Participant’s right to any further payments, vesting or exercisability with
        respect to any Award in its entirety. In the event a Participant is party
        to an
        employment (or similar) agreement with the Company or any Affiliate that
        defines
        the term “cause,” such definition shall apply for purposes of the Plan. The
        Company shall have the power to determine whether the Participant has been
        terminated for cause and the date upon which such termination for cause occurs.
        Any such determination shall be final, conclusive and binding upon the
        Participant. In addition, if the Company shall reasonably determine that
        a
        Participant has committed or may have committed any act which could constitute
        the basis for a termination of such Participant’s employment for cause, the
        Company may suspend the Participant’s rights to exercise any option, receive any
        payment or vest in any right with respect to any Award pending a determination
        by the Company of whether an act has been committed which could constitute
        the
        basis for a termination for “cause” as provided in this Section 10.2.

       

      11.
           General Provisions. 

       

      11.1    Award
        Agreement.    To
        the extent deemed necessary by the Committee, an Award under the Plan shall
        be
        evidenced by an Award Agreement in a written or electronic form approved
        by the
        Committee setting forth the number of shares of Common Stock or units subject
        to
        the Award, the exercise price, base price, or purchase price of the Award,
        the
        time or times at which an Award will become vested, exercisable or payable
        and
        the term of the Award. The Award Agreement may also set forth the effect
        on an
        Award of termination of Service under certain circumstances. The Award Agreement
        shall be subject to and incorporate, by reference or otherwise, all of the
        applicable terms and conditions of the Plan, and may also set forth other
        terms
        and conditions applicable to the Award as determined by the Committee consistent
        with the limitations of the Plan. Award Agreements evidencing Incentive Stock
        Options shall contain such terms and conditions as may be necessary to meet
        the
        applicable provisions of Section 422 of the Code. The grant of an Award under
        the Plan shall not confer any rights upon the Participant holding such Award
        other than such terms, and subject to such conditions, as are specified in
        the
        Plan as being applicable to such type of Award (or to all Awards) or as are
        expressly set forth in the Award Agreement. The Committee need not require
        the
        execution of an Award Agreement by a Participant, in which case, acceptance
        of
        the Award by the Participant shall constitute agreement by the Participant
        to
        the terms, conditions, restrictions and limitations set forth in the Plan
        and
        the Award Agreement as well as the administrative guidelines of the Company
        in
        effect from time to time. 

       

      11.2    No
        Assignment or Transfer; Beneficiaries.    Except
        as provided in Section 6.7 hereof, Awards under the Plan shall not be assignable
        or transferable by the Participant, except by will or by the laws of descent
        and
        distribution, and shall not be subject in any manner to assignment, alienation,
        pledge, encumbrance or charge. Notwithstanding the foregoing, the Committee
        may
        provide in the terms of an Award Agreement that the Participant shall have
        the
        right to designate a beneficiary or beneficiaries who shall be entitled to
        any
        rights, payments or other benefits specified under an Award following the
        Participant’s death. During the lifetime of a Participant, an Award shall be
        exercised only by such Participant or such Participant’s guardian or legal
        representative. In the event of a Participant’s death, an Award may to the
        extent permitted by the Award Agreement be exercised by the Participant’s
        beneficiary as designated by the Participant in the manner prescribed by
        the
        Committee or, in the absence of an authorized beneficiary designation, by
        the
        legatee of such Award under the Participant’s will or by the Participant’s
        estate in accordance with the Participant’s will or the laws of descent and
        distribution, in each case in the same manner and to the same extent that
        such
        Award was exercisable by the Participant on the date of the Participant’s death.

       

      
        
           

        

        
          Page
            9 of
            12

          
            

          

        

        
           

        

      

       

      11.3    Deferrals
        of Payment.    The
        Committee may in its discretion permit a Participant to defer the receipt
        of
        payment of cash or delivery of shares of Common Stock that would otherwise
        be
        due to the Participant by virtue of the exercise of a right or the satisfaction
        of vesting or other conditions with respect to an Award. If any such deferral
        is
        to be permitted by the Committee, the Committee shall establish rules and
        procedures relating to such deferral in a manner intended to comply with
        the
        requirements of Section 409A of the Code, including, without limitation,
        the
        time when an election to defer may be made, the time period of the deferral
        and
        the events that would result in payment of the deferred amount, the interest
        or
        other earnings attributable to the deferral and the method of funding, if
        any,
        attributable to the deferred amount. 

       

      11.4    Rights
        as Stockholder.    A
        Participant shall have no rights as a holder of shares of Common Stock with
        respect to any unissued securities covered by an Award until the date the
        Participant becomes the holder of record of such securities. Except as provided
        in Section 4.2 hereof, no adjustment or other provision shall be made for
        dividends or other stockholder rights, except to the extent that the Award
        Agreement provides for dividend payments or dividend equivalent rights.

       

      11.5    Employment
        or Service.    Nothing
        in the Plan, in the grant of any Award or in any Award Agreement shall confer
        upon any Eligible Person any right to continue in the Service of the Company
        or
        any of its Affiliates, or interfere in any way with the right of the Company
        or
        any of its Affiliates to terminate the Participant’s employment or other service
        relationship for any reason at any time. 

       

      11.6    Securities
        Laws.    No
        shares of Common Stock will be issued or transferred pursuant to an Award
        unless
        and until all then applicable requirements imposed by Federal and state
        securities and other laws, rules and regulations and by any regulatory agencies
        having jurisdiction, and by any exchanges upon which the shares of Common
        Stock
        may be listed, have been fully met. As a condition precedent to the issuance
        of
        shares pursuant to the grant or exercise of an Award, the Company may require
        the Participant to take any reasonable action to meet such requirements.
        The
        Committee may impose such conditions on any shares of Common Stock issuable
        under the Plan as it may deem advisable, including, without limitation,
        restrictions under the Securities Act of 1933, as amended, under the
        requirements of any exchange upon which such shares of the same class are
        then
        listed, and under any blue sky or other securities laws applicable to such
        shares. The Committee may also require the Participant to represent and warrant
        at the time of issuance or transfer that the shares of Common Stock are being
        acquired only for investment purposes and without any current intention to
        sell
        or distribute such shares. 

       

      11.7    Tax
        Withholding.    The
        Participant shall be responsible for payment of any taxes or similar charges
        required by law to be withheld from an Award or an amount paid in satisfaction
        of an Award, which shall be paid by the Participant on or prior to the payment
        or other event that results in taxable income in respect of an Award. The
        Award
        Agreement may specify the manner in which the withholding obligation shall
        be
        satisfied with respect to the particular type of Award. 

       

      11.8    Unfunded
        Plan.    The
        adoption of the Plan and any reservation of shares of Common Stock or cash
        amounts by the Company to discharge its obligations hereunder shall not be
        deemed to create a trust or other funded arrangement. Except upon the issuance
        of Common Stock pursuant to an Award, any rights of a Participant under the
        Plan
        shall be those of a general unsecured creditor of the Company, and neither
        a
        Participant nor the Participant’s permitted transferees or estate shall have any
        other interest in any assets of the Company by virtue of the Plan.
        Notwithstanding the foregoing, the Company shall have the right to implement
        or
        set aside funds in a grantor trust, subject to the claims of the Company’s
        creditors or otherwise, to discharge its obligations under the Plan.

       

      11.9    Other
        Compensation and Benefit Plans.    The
        adoption of the Plan shall not affect any other share incentive or other
        compensation plans in effect for the Company or any Affiliate, nor shall
        the
        Plan preclude the Company from establishing any other forms of share incentive
        or other compensation or benefit program for employees of the Company or
        any
        Affiliate. The amount of any compensation deemed to be received by a Participant
        pursuant to an Award shall not constitute includable compensation for purposes
        of determining the amount of benefits to which a Participant is entitled
        under
        any other compensation or benefit plan or program of the Company or an
        Affiliate, including, without limitation, under any pension or severance
        benefits plan, except to the extent specifically provided by the terms of
        any
        such plan. 

       

      
        
           

        

        
          Page
            10
            of 12

          
            

          

        

        
           

        

      

       

      11.10    Plan
        Binding on Transferees.    The
        Plan shall be binding upon the Company, its transferees and assigns, and
        the
        Participant, the Participant’s executor, administrator and permitted transferees
        and beneficiaries. 

       

      11.11    Severability.
           If
        any provision of the Plan or any Award Agreement shall be determined to be
        illegal or unenforceable by any court of law in any jurisdiction, the remaining
        provisions hereof and thereof shall be severable and enforceable in accordance
        with their terms, and all provisions shall remain enforceable in any other
        jurisdiction. 

       

      11.12    Foreign
        Jurisdictions.    The
        Committee may adopt, amend and terminate such arrangements and grant such
        Awards, not inconsistent with the intent of the Plan, as it may deem necessary
        or desirable to comply with any tax, securities, regulatory or other laws
        of
        other jurisdictions with respect to Awards that may be subject to such laws.
        The
        terms and conditions of such Awards may vary from the terms and conditions
        that
        would otherwise be required by the Plan solely to the extent the Committee
        deems
        necessary for such purpose. Moreover, the Board may approve such supplements
        to
        or amendments, restatements or alternative versions of the Plan, not
        inconsistent with the intent of the Plan, as it may consider necessary or
        appropriate for such purposes, without thereby affecting the terms of the
        Plan
        as in effect for any other purpose. 

       

      11.13    Substitute
        Awards in Corporate Transactions.    Nothing
        contained in the Plan shall be construed to limit the right of the Committee
        to
        grant Awards under the Plan in connection with the acquisition, whether by
        purchase, merger, consolidation or other corporate transaction, of the business
        or assets of any corporation or other entity. Without limiting the foregoing,
        the Committee may grant Awards under the Plan to an employee or director
        of
        another corporation who becomes an Eligible Person by reason of any such
        corporate transaction in substitution for awards previously granted by such
        corporation or entity to such person. The terms and conditions of the substitute
        Awards may vary from the terms and conditions that would otherwise be required
        by the Plan solely to the extent the Committee deems necessary for such purpose.
        

       

      11.14
        Governing Law. The
        Plan
        and all rights hereunder shall be subject to and interpreted in accordance
        with
        the laws of the State of Delaware, without reference to the principles of
        conflicts of laws, and to applicable Federal securities laws. 

      

      11.15
        Financial Statements. All
        Participants shall receive the financial statements of the Company at least
        annually.  

      

      

      11.16 Performance
        Based Awards.    For
        purposes of Stock Awards and Restricted Stock Awards granted under the Plan
        that
        are intended to qualify as “performance-based” compensation under Section 162(m)
        of the Code, such Awards shall be granted to the extent necessary to satisfy
        the
        requirements of Section 162(m) of the Code. 

      

      11.17
        Stockholder Approval. The
        Plan
        must be approved by the stockholders by a majority of all shares entitled
        to
        vote within twelve (12) months after the date the Plan was adopted by the
        Board.
        Any Incentive Stock Options granted before stockholder approval is obtained
        shall be converted into Nonqualified Stock Options if stockholder approval
        is
        not obtained within twelve (12) months before or after the Plan was adopted.
        

       

      12.
           Effective Date; Amendment and Termination.

       

      12.1    Effective
        Date.    The
        Plan shall become effective following its adoption by the Board. The term
        of the
        Plan shall be ten (10) years from the date of adoption by the Board, subject
        to
        Section 12.3 hereof. 

       

      12.2    Amendment.
           
        The Board may at any time and from time to time and in any respect, amend
        or
        modify the Plan. The Board may seek the approval of any amendment or
        modification by the Company’s stockholders to the extent it deems necessary or
        advisable in its discretion for purposes of compliance with Section 162(m)
        or
        Section 422 of the Code, or exchange or securities market or for any other
        purpose. No amendment or modification of the Plan shall adversely affect
        any
        Award theretofore granted without the consent of the Participant or the
        permitted transferee of the Award. 

       

      
        
           

        

        
          Page
            11
            of 12

          
            

          

        

        
           

        

      

       

      12.3    Termination.
           The
        Plan shall terminate on the tenth anniversary of the date of its adoption
        by the
        Board. The Board may, in its discretion and at any earlier date, terminate
        the
        Plan. Notwithstanding the foregoing, no termination of the Plan shall adversely
        affect any Award theretofore granted without the consent of the Participant
        or
        the permitted transferee of the Award. 

       

      
        
           

        

        
          Page
            12
            of 12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]