Document:

ex4-1.htm

    Exhibit
4.1

    

    

     

    FORM
OF

    AMERICAN
BANK NOTE HOLOGRAPHICS, INC.

    INCENTIVE
STOCK OPTION PLAN

     

     

    1.   
Purpose.  The
purpose of the American Bank Note, Inc. Incentive Stock Option Plan (the "Plan")
is to advance the interests of American Bank Note Holographics, Inc. (the
"Company") by encouraging and enabling present and future key employees of the
Company and any parent or subsidiary to acquire a financial interest in the
Company through incentive stock options under the Plan.  The Company
believes that the Plan will also aid the Company and any parent or subsidiary in
attracting and retaining outstanding key employees and in stimulating the
efforts of such employees to work for the success of the Company.

     

    2.   
Administration.

     

    (a) General.
 The Plan shall be administered, construed and interpreted by a committee
(the "Committee") formed by the Board of Directors of the Company, or if no such
committee is established, then by the Board of Directors.  In the event
that there is not a Committee established at any time during the term of any
option granted hereunder, references herein to the Committee shall be
interpreted to be references to the Board of Directors.

     

    (b) Grant
of Options.  The Committee shall from time to time recommend the persons
who shall participate in the Plan and the extent of their participation.
 The Committee also shall recommend the price to be paid for shares upon
the exercise of options granted under the Plan, the period within which each
option may be exercised, and the terms and conditions of each individual Stock
Option Agreement by and between the Company and the holder of the option.
 The terms and conditions of each individual Stock Option Agreement shall
be consistent with the provisions of the Plan, but the Committee may
provide for such additional terms and conditions, not in conflict with the
provisions of the Plan, as it deems advisable.  All such recommendations by
the Committee shall be final upon approval of the Board of
Directors.

     

    (c) Interpretation
of Plan.  In interpreting the Plan, the Committee and Board of Directors
shall be governed by the principles and requirements of sections 421 and 422 and
related sections of the Internal Revenue Code of 1986, as amended ("the Code"),
and the Treasury Regulations applicable to incentive stock options and incentive
stock option plans.  A "parent corporation" is any corporation in an
unbroken chain of corporations ending with the Company if, at the time the
option is granted, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in the chain.  A
"subsidiary corporation" is any corporation in an unbroken chain of corporations
beginning with the Company if, at the time the option is granted, each of the
corporations, other than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.  Such
definition of parent corporation and subsidiary corporation shall be consistent
with the definition of such terms as set 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

    forth
in Code section 424.  All other terms used herein shall have and shall be
interpreted as having the meanings set forth in the applicable provisions of the
Code.  The interpretation and construction by the Committee of any
provision of or term used in the Plan or any option granted under the Plan and
any determination pursuant to any provision of the Plan or any such option shall
be final and conclusive, unless otherwise determined by the Board of Directors.
 No member of the Committee or Board of Directors shall be liable for any
action or determination made in good faith, and members of the Committee and
Board of Directors shall be entitled to indemnification and reimbursement
from time to time for expenses incurred in defense of such good faith action or
determination.

     

    3.    Eligibility.  Options
under the Plan may be granted to key officers and other key employees of the
Company or of one or more of any future parents or subsidiaries of the Company
who, in the opinion of the Committee, are contributing significantly to the
effective management and supervision of the business of the Company or its
parents or subsidiaries.  Options may be granted under the Plan only
to persons who are employed by the Company or one of its parents or subsidiaries
at the time of the grant.  The fact that an employee is a member of
the Board of Directors of the Company shall not make him ineligible for an
option grant unless his vote is required to secure a majority vote in favor of
the grant of his option.  For purposes of the Plan, a person to whom
an option is granted under the Plan shall be referred to as a
"Grantee".

     

    4.   
Shares
Subject to Plan.  The shares subject to the Plan shall be authorized
but unissued or treasury shares of the Company's common stock (the "Common
Stock").  Subject to readjustment in accordance with the provisions of
paragraph 6 of the Plan, the maximum number of shares of Common Stock for which
options may be granted under the Plan shall be equal to ten percent (10%) of the
outstanding Common Stock as of the date of approval by the shareholders, or
1,363,000 shares of Common Stock, and the adoption of the Plan by the Board of
Directors of the Company shall constitute a reservation of such shares of Common
Stock for issuance only upon the exercise of options granted under the
Plan.  In the event that any outstanding option granted under the Plan
for any reason expires or is terminated prior to the end of the period during
which options may be granted under the Plan, the shares of Common Stock
allocable to the unexercised portion of such option may again be subject in
whole or in part to any option granted under the Plan.

     

    5.   
Terms
and Conditions of Options. Options granted pursuant to the Plan shall be
evidenced by agreements (the "Stock Option Agreements") in such form as the
Committee and Board of Directors shall, consistent with the provisions of Code
sections 421 and 422 and related sections of the Code and applicable Treasury
Regulations, approve from time to time.  Such Stock Option Agreements
and the options evidenced thereby shall comply with and be subject to the
following terms and conditions:

     

    (a) Number
of Shares.  Each Stock Option Agreement shall state the total number of
shares of Common Stock to which it pertains.

     

    (b) Amount
Limitation.  A key employee may not be granted incentive stock options
which are exercisable for the first time in any one calendar year under the Plan
and any other incentive stock option plan of the Company or any parent or
subsidiary corporation of the Company, for the purchase of Common Stock with an
aggregate fair market value of more than one hundred thousand dollars ($100,000)
(valued as of the date of grant of the option).

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (c) Option
Price.  The option price for each option granted under the Plan shall be
the amount determined by the Board of Directors, upon the recommendation of the
Committee, but, subject to the provisions of paragraph 5(j) of the Plan, shall
not be less than one hundred percent (100%) of the fair market value of the
shares of Common Stock subject to the option on the date of grant of the
option. Notwithstanding the foregoing, the option price shall not be less than
one hundred ten percent (110%) of the fair market value of the shares of Common
Stock subject to the option on the date of grant of the option as to any Grantee
who at the time the option is granted, owned more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company.  The
date on which the Board of Directors approves the granting of an option shall be
considered the date on which such option is granted.  For purposes of the
Plan, the "fair market value" of the shares of Common Stock shall be the mean
between the high "bid" and the low "asked" prices of the common stock in the
over-the-counter market on the day on which such value is to be determined or,
if no shares were traded on such day, on the next preceding day on which shares
were traded, an reported. If the common Stock is not regularly traded in the
over-the-counter market but is registered on a national securities exchange, the
"fair market value" of the shares of Common Stock shall mean the closing price
of the Common Stock on such national securities exchange on the day on which
such value is to be determined or, if no shares were traded on such day, on the
next preceding day on which shares were traded, as reported by National
Quotation Bureau, Incorporated or other national quotation service.  If the
Common Stock is not regularly traded in the over-the-counter market or
registered in a national securities exchange the Committee shall determine the
fair market value of the common stock in good faith in accordance with Code
section 422(c)(1) and accompanying Treasury Regulations.

     

    (d) Medium
and Time of Payment.  The Option price shall be payable upon the exercise
of an option in cash or by check or, if provided in the Stock Option Agreement,
in shares of Common Stock owned by the Grantee.  In the event that all or
part of the option price is paid in shares of Common Stock, the value of such
shares shall be equal to the fair market value of such shares on the date
of exercise of the option (determined as provided in paragraph 5(c) of the
Plan), and the Grantee shall deliver to the Company a certificate or
certificates representing such shares duly endorsed to the Company or
accompanied by a duly-executed separate instrument of transfer satisfactory to
the Committee.

     

    (e) Term
and Exercise. Except as set forth in paragraph 5(j) of the Plan, each option
granted under the Plan shall be exercisable by the Grantee only during a
term fixed by the Board of Directors upon recommendation of the Committee ending
not later than ten (10) years after the date of grant of the option. Options
granted under the Plan will either become vested and exercisable for up to 331⁄3%
of the total optioned shares upon each succeeding anniversary (until the option
is fully exercisable at the end of the third year) or, if immediately vested,
will be exercisable for restricted shares of Common Stock with restrictions
lapsing with respect to 331⁄3% of such shares upon each succeeding anniversary
(until the restrictions expire at the end of the third year).  The Board of
Directors, upon recommendation of the Committee, shall determine whether the
option shall be exercisable in full at any time during the term or in cumulative
or non-cumulative installments during the term.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

    (f) Method
of Exercise.  All options granted under the Plan shall be exercised by
written notice directed to the officer of the Company indicated in the Stock
Option Agreement at the Company's principal place of business.  Such
written notice shall specify the form of payment made by the Grantee or his
successor as provided by paragraph 5(d) of the Plan and shall be accompanied by
payment in full of the option price for the shares for which such option is
being exercised.  The Company shall make delivery of certificates
representing the shares for which an option has been exercised within a
reasonable period of time; provided, however, that if any law,
regulation or agreement required the Company to take any action with respect to
the shares for which an option has been exercised before the issuance thereof,
then the date of delivery of such shares shall be extended for the period
necessary to take such action.

     

    (g) Effect
of Termination of Employment or Death.

     

    (A) Termination
of Employment.  Except as otherwise provided in this subparagraph (A) or in
subparagraph (B) below, upon termination of the employment of any Grantee with
the Company or any parent or subsidiary corporation of the Company for any
reason, all options hold by the Grantee under the Plan shall immediately
terminate.  Whether military, government or other service or other leave of
absence shall constitute a termination of employment shall be determined in each
case by the Committee in its discretion, and any determination by the Committee
shall be final and conclusive.  The Board of Directors upon recommendation
of the Committee at its election may provide in any Stock Option Agreement that
the Grantee may exercise an option at any time within three (3) months after the
termination of employment of the Grantee with the Company or any parent or
subsidiary corporation then employing the Grantee (or within one (1) year after
the termination of such employment if such employment is terminated due to
the Grantee's permanent disability).  In no event, however, will the option
be exercisable after the expiration of the term of the option.  In
addition, exercise of the option following termination of the Grantee's
employment shall be subject to the following terms and conditions:  (i)
with respect to any and all installments of the option that had not become
exercisable at the time of termination of employment, the period of extension
shall not, unless otherwise provided in the Stock Option Agreement, operate
to permit such installment to become exercisable within such period; and (ii)
with respect to any installment of the option that had become exercisable at the
time of termination of employment, the period of extension shall not operate to
permit the exercise of such installment after the expiration of the period
within which such installment may be exercised.  For purposes of this
subparagraph (A), if any corporation ceases to be a parent or subsidiary of
the Company, the employment of any Grantee employed by such corporation shall be
deemed to have terminated unless such Grantee becomes an employee of the Company
or another parent or subsidiary of the Company simultaneously with or prior to
the time such corporation ceases to be a parent or subsidiary of the Company.
 For purposes of the Plan, "permanent disability" shall mean a permanent
disability as defined in Code section 22(e)(3).

     

    (B) Death.
 In granting any option under the Plan, the Board of Directors and
Committee may provide in the Stock Option Agreement representing such option
that in the event of the death of a Grantee at a time when an option in
exercisable by the Grantee, the Grantee's personal representatives, heirs or
legatees (the "Grantee's Successors") may exercise all or any portion of
such option held by the Grantee on the date of his death upon proof satisfactory
to the Company of their authority.  The Grantee's Successors must exercise
any such 

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    option
within twelve (12) months after the date of the Grantee's death and in any event
prior to the date of expiration of the option. Such exercise otherwise shall be
subject to the terms and conditions of the Plan; provided, however, that with respect to
any installment of the option that had not become exercisable on the date of the
Grantee's death, the period of extension shall not, unless otherwise provided in
the option Agreement, operate to permit such installment to become exercisable
within such period.

     

    (h) Nonassignability
of Option Rights.  No option shall be assignable or transferable by the
Grantee except by will or by the laws of descent and distribution. During the
lifetime of the Grantee, the option shall be exercisable only by the
Grantee.

     

    (i) Rights
as Stockholder. Neither the Grantee nor the Grantee's Successors shall have
rights an a stockholder of the Company with respect to shares of Common Stock
covered by the Grantee's option until the Grantee or the Grantee's Successors
become the holder of record of such shares.  Except as specified in
paragraph 6 of the Plan, no adjustment will be made for dividends or other
rights for which the record date is prior to the date on which shares are issued
upon exercise of an option.

     

    (j) No
Options in Certain Cases. Except as set forth in this paragraph 5(j), no options
shall be granted except within a period of ten (10) years after the effective
date of the Plan. In no event shall an option be granted to any person who, at
the time such option is granted, owns (as defined in Code section 422(b)(6))
stock possessing more than ten percent (10%) of the total combined voting power
or value of all classes of stock of the Company or of any parent or subsidiary
corporation of the Company unless (i) the option price under such option is not
less than one hundred and ten percent (110%) of the fair market value of the
shares of Common Stock subject to such option on the date of grant of such
option (determined as provided in paragraph 5(c) of the Plan) and (ii) the terms
of the Stock Option Agreement shall make such option expire on the date that is
no later than the fifth (5th) anniversary after the date on which the option is
granted.

     

    (k) Miscellaneous
Provisions.  The Stock Agreements authorized under the Plan may contain
such Other Provisions, not inconsistent with the Plan or the applicable
provisions of the Code, as the Committee shall deem advisable.

     

    6.   
Adjustments.

     

    (a) Recapitalization. 
In the event that, after the effective date of the Plan, the outstanding shares
decreased or changed into or exchanged for a different number or kind of shares
or other shares or other securities of the Company by reason of a
recapitalization, reclassification, stock split-up, combination of shares, or
dividend payable in stock, appropriate adjustments shall be made by the
Committee in the number and kind of shares or other securities for which
options may be granted under the Plan. In addition, the Committee upon the
occurrence of such an event shall make appropriate adjustments in the number and
kind of shares or other securities as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, so that each Grantee's
proportionate interest shall be maintained as before the occurrence of such
event.  Such adjustment in outstanding options shall be made without change
in the total price applicable to the unexercised portion of each option and with
a corresponding

     

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    adjustment
in the option price per share. Any fractional shares resulting from any of the
foregoing adjustments under this subparagraph (a) shall be disregarded and
eliminated. Each such adjustment under this subparagraph (a) shall be made in
such a manner that such adjustment will not constitute a "modification" an
defined in Code section 424.  All adjustments made by the Committee unless
otherwise determined by the Board of Directors) under this subparagraph (a)
shall be final and conclusive.

     

    (b) Reorganization;
Liquidation.  If the Company shall be a party to any reorganization
involving a sale, merger or liquidation of the Company, outstanding options may
be exercised immediately prior to the consummation of such a transaction,
whether or not vested as of such date of consummation of such
transaction.

     

    7.   
Effective
Date and Termination of Plan.

     

    (a) Effective
Date.  The effective date of the Plan shall be 1998, the date of its
adoption by the Board of Directors of the Company, provided that the
stockholders of the Company (acting at a duly called meeting of the
stockholders) shall approve the Plan before 1998.

     

    (b) Termination.
 The Plan shall terminate ten (10) years after its effective date, but the
Board of Directors may terminate the Plan at any time prior to such date.
 Termination of the Plan shall not alter or impair any of the rights or
obligations under any option theretofore granted under the Plan unless the
Grantee shall so consent.

     

    8.   
Application
of Funds.  The proceeds received by the Company from the sale of
shares of Common Stock pursuant to options granted under the Plan will be used
for general corporate purposes.

     

    9.   
No
Obligation to Exercise Option. The granting of an option shall impose no
obligation upon the Grantee to exercise such option.

     

               
10.    Amendment.  The
Board of Directors of the Company by majority vote may at any time and from time
to time amend the Plan in such respects as it shall deem advisable in order that
options granted under the Plan shall be "incentive stock options" as defined in
Code section 422, or to conform to any change in the law, or for any other
purpose; provided,
however, that without
the approval of the stockholders of the Company, no such amendment shall
change:

     

    (a) The
maximum number of shares of Common Stock as to which options may be granted
under the Plan (except by operation of the adjustment provisions of the Plan);
or

     

    (b) The
date on which the Plan will terminate as provided by paragraph 7(b) of the Plan;
or

     

    (c) The
minimum option price as provided under paragraph 5(c) of the Plan, other than to
change the manner of determining the fair market value of the Common Stock to
conform with any provisions of the Code or Treasury Regulations thereunder
applicable to incentive stock options or if such change is necessitated by a
change in the manner in which Common Stock is traded; or

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (d) The
period during which options may be granted as provided in paragraph 5(j) of the
Plan (provided, however, that the Board of
Directors of the Company shall have the power set forth in paragraph 7(b) to
terminate the Plan) ; or

     

    (e) The
provisions of paragraph 3 of the Plan relating to the determination of employees
to whom options may be granted.

     

    Any
amendment to the Plan shall not, without the written consent of the Grantee,
affect such Grantee's rights under any option theretofore granted to such
Grantee.

     

     

    Executed
this _______ day of _________, 1998.

     

    
      	 
      	 
      
	 
      	
              American
      Bank Note Holographics, Inc.

            
	 
      	 
      
	 
      	 
      
	 
      	 By:	
                         

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	 
      

    

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    AMERICAN
BANK NOTE HOLOGRAPHICS, INC.

    INCENTIVE
STOCK OPTION AGREEMENT

    1998
GRANT

     

    As
of the _______ day of _______, 1998, and pursuant to its Incentive Stock Option
Plan (the "Plan"), American Bank Note Holographics, Inc., a Delaware corporation
(the "Company"), hereby grants to (the "Grantee") an option, exercisable for the
period and upon the terms hereinafter set out, to purchase _______ shares of the
Common Stock, par value $_______ per share ("Common Stock"), of the Company, at
an exercise price of $_______ per share, subject to adjustment as provided in
the Plan. Such exercise price represents at least 100% of the fair market value
of a share of the Common Stock at the Date of Grant (as hereinafter defined). In
the case of an individual who, at the time of the Date of Grant owns more than
10% of the total combined voting power of all classes of stock of the Company,
the above exercise price represents at least 110% of the fair market value of a
share of the Common Stock at the Date of Grant.

     

    1.   
TERM
OF OPTION. This option is granted as of the date first above written (sometimes
hereinafter called the "Date of Grant"), and will terminate and expire, to the
extent not previously exercised, at 5:00 p.m. (E.D.T. or E.S.T., as applicable)
on the tenth anniversary of the Date of Grant, or at such earlier time as may be
specified in the Plan.

     

    2.        RIGHT
TO EXERCISE. Subject to the applicable limitations set out in the Plan or as
otherwise set out in this Agreement, the Grantee shall have the right to
exercise the option as to 331/3 percent of the shares covered by this agreement
upon each succeeding anniversary of the Date of Grant. The amount of Common
Stock for which options may be exercised after such dates is cumulative; that
is, if the Grantee fails to exercise all of the options during any period set
forth above, then any options that were not exercised during such period may be
exercised during any subsequent period, until the termination of such options
pursuant to the terms of this Agreement and the Plan. Prior to issuance of any
shares of Common Stock, the Grantee shall:  (i) deliver an
investment representation and (ii) enter into any applicable stockholder's
agreement, as deemed necessary by the Board of Directors of the Company or such
Committee established by the Board of Directors (the "Committee").

     

    3.   
MANNER
OF EXERCISE OF THE OPTION. The option shall be exercised in the manner set forth
in the Plan. Options granted under this Agreement Plan will become vested and
exercisable for up to 331⁄3% of the total optioned shares upon each succeeding
anniversary (until the option is fully exercisable at the end of the third year)
or, if immediately vested, will be exercisable for restricted shares of Common
Stock with restrictions lapsing with respect to 331⁄3% of such shares upon each
succeeding anniversary (until the restrictions expire at the end of the third
year).

     

    4.   
TERMINATION
OF EMPLOYMENT. In all events where Grantee's employment by the Company and its
Affiliates is terminated, the options granted hereunder shall be governed by the
Plan.

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    5.    SUBJECT
TO PLAN. This option is subject to all the terms and conditions of the Plan, and
specifically to the power of the Committee to make interpretations of the Plan
and of options granted thereunder, and of the Board of Directors of the Company
to alter, amend, suspend or discontinue the Plan subject to the limitations
expressed in the Plan. By acceptance hereof, the Grantee acknowledges receipt of
a copy of the Plan and hereby accepts and agrees to be bound by all of its terms
and conditions as if it had been set out verbatim in this Agreement. In
addition, the Grantee recognizes and agrees that all determinations,
interpretations or other actions respecting the Plan may be made by a majority
of the Board of Directors of the Company or of the Committee, and that such
determinations, interpretations or other actions are final, conclusive and
binding upon all parties, including the Grantee, his heirs and
representatives.

     

    6.   
SHAREHOLDER
APPROVAL. Notwithstanding anything to the contrary contained herein or in the
Plan, this option is expressly conditioned on the Plan being approved by the
shareholders of the Company and may not be exercised until such approval has
been obtained.

     

    7.   
NOTICES.
Any notice, payment or communication required or permitted to be given by any
provision of this Agreement shall be in writing and shall be delivered
personally or sent by certified mail, return receipt requested, addressed as
follows: if to American Bank Note Holographics, Inc. [Address] Attention
President; if to Grantee, at the address set forth on the signature page hereto.
Each party may, from time to time, by notice to the other party hereto, specify
a new address for delivery of notices to such party hereunder. Any such notice
shall be deemed to be delivered, given, and received for all purposes as of the
date such notice is received or properly mailed.

     

    8.   
BINDING
EFFECT. Except as otherwise provided in this Agreement or in the Plan, every
covenant, term, and provision of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, legatees, legal
representatives, successors, transferees, and assigns.

     

    9.   
HEADINGS.
Section and other headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define or limit the
scope or intent of this Agreement or any provision hereof.

     

    10.   SEVERABILITY.
Every provision of this Agreement is intended to be severable. If any term or
provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity or legality of the
remainder of this Agreement.

     

    11.   GOVERNING
LAW. The laws of the State of New York shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the parties hereto.

     

     

    IN
WITNESS WHEREOF, this Agreement is executed as of the _______ day of ________,
1998.

     

    

    
      	 
      	 
      
	 
      	
              American
      Bank Note Holographics, Inc.

            
	 
      	 
      
	 
      	 
      
	 
      	By:	
               

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	 
      

    

     

    
 

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    The
undersigned Grantee hereby accepts the terms of the foregoing Incentive Stock
Option Agreement and the Plan.

     

    
      	By:  	
                       

            	
              Grantee

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              (address)

            	 
      

    

     

    The
undersigned spouse of ___________________________________________ is fully aware
of, understands and fully consents and agrees to the provisions of this
Agreement and its binding effect upon any community property or marital property
interest he or she may now or hereafter own in or with respect to the Common
Stock referred to in this Agreement, and agrees that the termination of his or
her marital relationship with the Grantee for any reason shall not have the
effect of removing the Common Stock from the coverage of this Agreement. Such
understanding, consent, and agreement of the undersigned are evidenced by his or
her execution of this Agreement as of the_______ day of ________,
1998.

     

    
      	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 By:   	
                      

            
	 
      	
              Spouse:

            

    

    
 

     

     

     

     

     

     10ex4-2.htm

     

    
      Exhibit
4.2

      

      

       

      AMENDMENT
TO THE

      AMERICAN
BANK NOTE HOLOGRAPHICS, INC.

      2000
STOCK INCENTIVE PLAN

       

       

      Pursuant
to Section 12 of the American Bank Note Holographics, Inc. 2000 Stock Incentive
Plan, as amended (the "Plan"), the second sentence of Section 7(d) of the Plan
is hereby amended in its entirety to read as follows:

       

      "Except
as otherwise determined by the Board, if a director's service on the Board
terminates for any reason other than death or Disability, then: (1) any portion
of an Option granted pursuant to this Section 7 that is not exercisable on the
date of termination shall immediately terminate, and (2) any portion of an
Option granted pursuant to this Section 7 that is exercisable on the date of
termination shall remain exercisable during the ninety (90) day period following
the date of termination or, if sooner, until the expiration of the stated term
thereof and, to the extent not exercised during such period, shall thereupon
terminate."

       

       

      IN
WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing amendment to the Plan was duly adopted by the Board of Directors of
the Company on May 24, 2005.

       

      
        	
                Dated:  May
      24, 2005

              	 
      
	 
      	 
      
	 
      	
                AMERICAN
      BANK NOTE HOLOGRAPHICS, INC.

              
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	

                /s/
      Alan Goldstein

              	
                 

              
	 
      	
                Secretary

              
	 
      	 
      
	 
      	 
      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      

       

      AMERICAN
BANK NOTE HOLOGRAPHICS, INC.

       

      2000
STOCK INCENTIVE PLAN

       

      (AS
AMENDED EFFECTIVE AUGUST 10, 2001)

       

       

      
        	
                1.

              	
                Purpose.  The
      purpose of the 2000 Stock Incentive Plan is to establish a flexible
      vehicle through which the Company can offer Options to purchase shares of
      Common Stock, including Incentive Stock Options and Non-Qualified Stock
      Options, to members of the Board, to officers and other employees of the
      Company and its Affiliates and to consultants and other independent
      contractors of the Company and its Affiliates with a view toward promoting
      the long-term financial success of the Company and enhancing stockholder
      value.

              

      

       

       

      
        	
                2.

              	
                Definitions.  For
      purposes of the Plan, the following terms shall have the following
      meanings:

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                "AFFILIATE"
      shall mean an affiliate within the meaning of Rule 12b-2 under the
      Exchange Act.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                "BOARD"
      shall mean the Board of Directors of the
  Company.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                "CAUSE"
      shall, except as otherwise determined by the Committee at the time of
      grant, have the following meaning: (i) in the case where there is no
      employment or consulting agreement between the participant and the Company
      or its Affiliates at the time of grant or where such an agreement exists
      but does not define "cause" (or words of like import), the participant's
      dishonesty, fraud, insubordination, willful misconduct, refusal to perform
      services, unsatisfactory performance of services or material breach of any
      written agreement between the participant and the Company or its
      Affiliates which breach is not cured within fifteen (15) days after
      written notice thereof, or (ii) in the case where there is an employment
      or consulting agreement between the participant and the Company or its
      Affiliates at the time of grant which defines "cause" (or words of like
      import), the meaning ascribed to such term (or words of like import) under
      such agreement.

              

      

       

       

      
        	
                 
      

              	
                (d)

              	
                "CHANGE
      IN CONTROL" shall mean:  (i) a consolidation or merger in which the
      Company is not the surviving corporation or which results in the
      acquisition of all or substantially all of the Company's outstanding
      shares of Common Stock by a single person or entity or by a group of
      persons and/or entities acting in concert, (ii) the sale or other
      disposition of all or substantially all of the Company's assets or (iii)
      the approval by the stockholders of the Company of a plan of complete
      liquidation or dissolution of the
Company.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                (e)

              	
                "CODE"
      shall mean the Internal Revenue Code of 1986, as
  amended.

              

      

       

       

      
        	
                 
      

              	
                (f)

              	
                "COMMITTEE"
      shall mean the committee appointed by the Board to administer the Plan
      pursuant to Section 3 or, if no such committee is appointed the
      Board.

              

      

       

       

      
        	
                 
      

              	
                (g)

              	
                "COMMON
      STOCK" shall mean the Company's common stock, par value
    $0.01.

              

      

       

       

      
        	
                 
      

              	
                (h)

              	
                "COMPANY"
      shall mean American Bank Note Holographics, Inc., a Delaware corporation,
      and any successor thereto.

              

      

       

       

      
        	
                 
      

              	
                (i)

              	
                "DISABILITY"
      shall mean, except as otherwise determined by the Committee at the time of
      grant, "permanent and total" disability within the meaning of Section
      22(e)(3) of the Code.

              

      

       

       

      
        	
                 
      

              	
                (j)

              	
                "EFFECTIVE
      DATE" shall mean the date on which the Plan was adopted by the Board,
      subject to the approval of the Company's stockholders within twelve (12)
      months of such date.

              

      

       

       

      
        	
                 
      

              	
                (k)

              	
                "EXCHANGE
      ACT" shall mean the Securities Exchange Act of 1934, as
      amended.

              

      

       

       

      
        	
                 
      

              	
                (l)

              	
                "FAIR
      MARKET VALUE" shall mean, as of any date, the closing sale price per share
      of Common Stock as published by the principal national securities exchange
      on which the Common Stock is traded on such date or, if there is no sale
      of Common Stock on such date, the average of the bid and asked prices on
      such exchange at the close of trading on such date, or if shares of
      the Common Stock are not listed on a national securities exchange on such
      date, the last reported trading price or, if none, the average of the bid
      and asked prices in the over-the-counter market at the close of trading on
      such date, or if the Common Stock is not traded on a national securities
      exchange or the over-the-counter market, the value of a share of the
      Common Stock on such date as determined in good-faith by the
      Committee.

              

      

       

       

      
        	
                 
      

              	
                (m)

              	
                "INCENTIVE
      STOCK OPTION" or "ISO" shall mean an Option that is intended to be an
      "incentive stock option" within the meaning of Section 422 of the
      Code.

              

      

       

       

      
        	
                 
      

              	
                (n)

              	
                "NON-EMPLOYEE
      DIRECTOR" shall mean any member of the Board who is not employed by the
      Company or any Parent or
Subsidiary.

              

      

       

       

      
        	
                 
      

              	
                (o)

              	
                "NON-QUALIFIED
      STOCK OPTION" or "NQSO" shall mean an Option that is not an Incentive
      Stock Option.

              

      

       

       

      
        	
                 
      

              	
                (p)

              	
                "OPTION"
      shall mean an Incentive Stock Option or a Non-Qualified Stock Option
      granted pursuant to the Plan.

              

      

       

       

      
        	
                 
      

              	
                (q)

              	
                "PARENT"
      shall mean any "parent corporation" of the Company within the meaning of
      Section 424(e) of the Code.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                (r)

              	
                "PLAN"
      shall mean this American Bank Note Holographics, Inc. 2000 Stock Incentive
      Plan, as amended from time to time.

              

      

       

       

      
        	
                 
      

              	
                (s)

              	
                "RETIREMENT"
      shall mean with respect to a participant's termination of employment or
      other service with the Company and its Affiliates, a termination of
      employment or other service with the Company and its Affiliates (at a
      time when Cause does not exist) by a participant who has attained:
       (i) at least age sixty-five (65), or (ii) such earlier age after age
      fifty-five (55) as approved by the Committee, in its sole
      discretion.

              

      

       

       

      
        	
                 
      

              	
                (t)

              	
                "SECURITIES
      ACT" shall mean the Securities Act of 1933, as
  amended.

              

      

       

       

      
        	
                 
      

              	
                (u)

              	
                "SUBSIDIARY"
      shall mean any "subsidiary corporation" of the Company within the meaning
      of Section 424 (f) of the Code.

              

      

       

       

      
        	
                 
      

              	
                (v)

              	
                "TEN
      PERCENT STOCKHOLDER" shall mean a person owning, at the time of grant,
      stock possessing more than ten percent (10%) of the total combined voting
      power of all classes of stock of the Company or any Parent or
      Subsidiary.

              

      

       

       

      
        	
                3.

              	
                Administration.

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Committee.
       The Plan shall be administered by a committee appointed by the Board
      or, if no such committee is appointed, the Board.  Notwithstanding
      the foregoing, the Plan shall be administered solely by the Board with
      respect to awards made to Non-Employee
  Directors.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                Authority
      of Committee.  Subject to the limitations of the Plan, the Committee,
      acting in its sole and absolute discretion, shall have full power and
      authority to:  (i) select the persons to whom awards shall be
      granted under the Plan, (ii) grant Options to such persons and prescribe
      the terms and conditions of such awards (including, but not limited to,
      the exercise or purchase price (if any), and any vesting or forfeiture
      conditions applicable thereto), (iii) interpret and apply the provisions
      of the Plan and of any agreement or other document evidencing an Option
      granted under the Plan, (iv) carry out any responsibility or duty
      specifically reserved to the Committee under the Plan, and (v) make any
      and all determinations and interpretations and take such other actions as
      may be necessary or desirable in order to carry out the provisions, intent
      and purposes of the Plan.  A majority of the members of the Committee
      shall constitute a quorum. The Committee may act by the vote of a majority
      of its members present at a meeting at which there is a quorum or by
      unanimous written consent.  The determinations of the Committee,
      including with regard to questions of construction, interpretation and
      administration, shall be final, binding and conclusive on all
      persons.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Indemnification.
       The Company shall indemnify and hold harmless each member of the
      Committee and the Board and any employee of the Company or its Affiliates
      who provides assistance with the administration of the Plan from and
      against any loss, cost, liability (including any sum paid in settlement of
      a claim 

              
	 	 	 

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	with
      the approval of the Board), damage and expense (including the advancement
      of reasonable legal and other expenses incident thereto) arising out of or
      incurred in connection with the Plan, unless and except to the extent
      attributable to such person's fraud or willful
  misconduct. 

      

       

       

      
        	
                4.

              	
                Eligibility.  Options
      may be granted under the Plan to any member of the Board (whether or not
      an employee of the Company or its Affiliates), to any officer or other
      employee of the Company or its Affiliates (including prospective officers
      and employees) and to any consultant or other independent contractor who
      performs or will perform services for the Company or its
      Affiliates.  Notwithstanding the foregoing, Incentive Stock
      Options may only be granted to persons who are employed by the Company or
      any Subsidiary or Parent at the time of grant.  In addition,
      Non-Employee Directors shall receive automatic grants of Non-Qualified
      Stock Options under the Plan.

              

      

       

       

      
        	
                5.

              	
                Available
      Shares.  Subject to adjustment as provided in Section 10, the
      maximum number of shares of Common Stock that may be issued under the Plan
      shall not exceed 1,350,000 shares and the maximum number of shares of
      Common Stock with respect to which Options may be granted under the Plan
      to any employee during any calendar year shall be 400,000
      shares.  In determining the number of shares that remain
      available for issuance under the Plan at any time, the following shares
      shall be deemed available:  (a) shares underlying any
      Option that terminates, expires or is canceled, and (b) shares that are
      withheld in order to satisfy the minimum tax withholding obligations
      associated with Options.  Shares of Common Stock available for
      issuance under the Plan may be either authorized and unissued or held by
      the Company in its treasury.  No fractional shares of Common
      Stock may be issued under the Plan.

              

      

       

       

      
        	
                6.

              	
                Discretionary
      Stock Options.

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Type
      of Options.  Subject to the provisions hereof, the Committee may
      grant ISOs and NQSOs to eligible personnel upon such terms and conditions
      as the Committee deems appropriate, provided that the Committee may only
      grant ISOs to employees of the Company or any Subsidiary
      or Parent.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                Option
      Term.  Unless sooner terminated, all Options granted pursuant to this
      Section 6 shall expire not more than ten (10) years after the date the
      Option is granted (or, in the case of an ISO granted to a Ten Percent
      Stockholder, not more than five (5)
years).

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Exercise
      Price.  The exercise price per share of Common Stock covered by an
      Option granted pursuant to this Section 6 shall be determined by the
      Committee at the time the Option is granted, provided that:  the
      exercise price per share of Common Stock covered by an Option may not be
      less than the Fair Market Value of the Common Stock at the time of grant
      (or, in the case of an ISO granted to a Ten Percent Stockholder, one
      hundred ten percent (110%) of the Fair Market Value of the Common Stock at
      the time of grant).

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                (d)

              	
                Vesting
      Conditions.  The Committee may establish such vesting conditions and
      other restrictions on the exercise of an Option and/or upon the
      disposition of the shares of Common Stock acquired upon the exercise of an
      Option as it deems appropriate. If the Committee provides, in its
      discretion, that an Option is exercisable upon the attainment of certain
      vesting conditions, the Committee may waive or accelerate such conditions
      on exercisability at any time, in whole or
  in part.

              

      

       

       

      
        	
                 
      

              	
                (e)

              	
                Exercise
      of Options.  An Option may be exercised by transmitting to the
      Company: (i) a notice specifying the number of shares to be purchased, and
      (ii) payment of the exercise price, together with the amount, if any,
      deemed necessary by the Committee to enable the Company to satisfy its
      minimum federal, state, foreign or other tax withholding obligations with
      respect to such exercise (unless other arrangements acceptable to the
      Committee are made with respect to the satisfaction of such withholding
      obligations).  The Committee may establish such rules and procedures
      as it deems appropriate for the exercise of Options.  The exercise
      price of shares of Common Stock acquired pursuant to the exercise of an
      Option may be paid in cash, certified or bank check and/or such other form
      of payment as may be permitted by the Committee from time to time,
      including, without limitation, shares of Common Stock which have been
      owned by the holder for at least six (6) months (free and clear of any
      liens and encumbrances).

              

      

       

       

      
        	
                 
      

              	
                (f)

              	
                Rights
      as a Stockholder. No shares of Common Stock shall be issued in respect of
      the exercise of an Option until full payment therefor has been made, and
      the applicable income tax withholding obligation has been satisfied or
      provided for.  The holder of an Option shall have no rights as a
      stockholder with respect to any shares covered by the Option until the
      date a stock certificate for such shares is issued to the holder.
       Except as otherwise provided herein, no adjustments shall be made
      for dividend distributions or other rights for which the record date is
      prior to the date such stock certificate is
  issued.

              

      

       

       

      
        	
                7.

              	
                Automatic
      Grants of Stock Options to Non-Employee
  Directors.

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Automatic
      Grants.  Without further action by the Board or the Company's
      stockholders, each individual who is appointed or elected to the Board as
      a Non-Employee Director on or after the Effective Date shall be granted an
      Option to purchase 25,000 shares of Common Stock on the first trading day
      following the date he or she commences service as a Non-Employee
      Director.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                Exercise
      Price. The exercise price per share covered by an Option granted
      pursuant to this Section 7 shall be equal to the Fair
      Market Value of the Common Stock on the date of
      grant.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Vesting
      Conditions.  Each Option granted pursuant to this Section 7 shall
      become exercisable, in cumulative increments, with respect to twenty (20%)
      percent of the shares initially covered thereby on each of the first five
      anniversaries of the date 

              
	 	 	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	of
      grant, provided that the optionee remains in continuous service as a
      director of the Company through each applicable vesting date.
       Notwithstanding the foregoing or anything herein to the contrary, if
      a participant's service as a director of the Company is involuntarily
      terminated in connection with, or in anticipation of, a Change in Control,
      each Option granted pursuant to this Section 7 shall immediately become
      fully exercisable. 

      

       

       

      
        	
                 
      

              	
                (d)

              	
                Effect
      of Termination of Service.  If a director's service on the Board is
      terminated due to his or her death or Disability, then:  (i) any
      portion of an Option granted pursuant to this Section 7 that is not
      exercisable on the date of termination shall immediately terminate, and
      (ii) any portion of an Option granted pursuant to this Section 7 that
      is exercisable on the date of termination shall remain exercisable by the
      optionee (or his or her representative or beneficiary) during the one year
      period following the date of termination or, if sooner, until the
      expiration of the stated term thereof, and, to the extent not exercised
      during such period, shall thereupon terminate.  If a director's
      service on the Board terminates for any reason other than death or
      Disability, then:  (1) any portion of an Option granted pursuant to
      this Section 7 that is not exercisable on the date of termination shall
      immediately terminate, and (2) any portion of an Option granted pursuant
      to this Section 7 that is exercisable on the date of termination shall
      remain exercisable during the ninety (90) day period following the
      date of termination or, if sooner, until the expiration of the stated term
      thereof and, to the extent not exercised during such period, shall
      thereupon terminate.

              

      

       

       

      
        	
                 
      

              	
                (e)

              	
                Transferability.
       All or a portion of any Option granted pursuant to this Section 7
      may be transferred to:  (i) the optionee's "family members" (as
      defined in General Instruction A to Form S-8 under the Securities
      Act)("Family Members"); (ii) a trust in which the Family Members have
      more than fifty percent (50%) of the beneficial interest; (iii) a
      foundation in which the Family Members and/or the optionee control the
      management of assets; or (iv) any other entity in which the Family Members
      and/or the optionee own more than fifty percent (50%) of the voting
      interests.

              

      

       

       

      
        	
                 
      

              	
                (f)

              	
                Transactions. 
      The provisions of Section 10 (as modified by this Section 7) shall apply
      to outstanding Options granted pursuant to this Section
  7.

              

      

       

       

      
        	
                 
      

              	
                (g)

              	
                Expiration.
       Except as otherwise provided herein, if not previously exercised,
      each Option granted pursuant to this Section 7 shall expire on the tenth
      anniversary of the date of grant.

              

      

       

       

      
        	
                8.

              	
                Non-Transferability.  No
      Options shall be transferable by a participant other than upon the
      participant's death to a beneficiary designated by the participant, or, if
      no designated beneficiary shall survive the participant, pursuant to the
      participant's will or by the laws of descent and
      distribution.  All Options shall be exercisable during a
      participant's lifetime only by the participant.  Any attempt to
      transfer any Option shall be void, and no such Option shall in any manner
      be liable for or subject to the debts, contracts, liabilities, engagements
      or torts of any person who shall be entitled to such Option, nor shall it
      be 

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	subject
      to attachment or legal process for or against such
      person.  Notwithstanding the foregoing pursuant to this Section
      8, the Committee may determine at the time of grant or thereafter that a
      NQSO granted pursuant to Section 6 is transferable by an optionee in whole
      or part to such persons, under such circumstances, and subject to such
      conditions as the Committee may prescribe from time to
    time. 
	 	 
	 	 
	
                9.

              	
                Effect
      of Termination of Employment or Service.  Except as otherwise
      provided herein or determined by the Committee at grant or, if no rights
      of the participant are thereby reduced, thereafter, and subject to earlier
      termination in accordance with the provisions hereof, the following rules
      shall apply with regard to Options (other than Options granted pursuant to
      Section 7 above) held by a participant at the time of his or her
      termination of employment or service with the Company and its
      Affiliates:

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Termination
      due to Death, Retirement or Disability.  Except as provided in
      Section 9(b) below, if a participant's employment or service terminates
      due to his or her death, Retirement or Disability, then:  (i) any
      Option held by the participant that is not exercisable on the date of
      termination shall immediately terminate, and (ii) any Option that is
      exercisable on the date of termination shall remain exercisable, to
      the extent exercisable on the date of termination, by the participant (or
      the participant's designated beneficiary or representative) during the one
      year period following the date of termination or, if sooner, until the
      expiration of the stated term thereof, and, to the extent not exercised
      during such period, shall thereupon
terminate.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                Termination
      for Cause or at a Time when Cause Exists.  If a participant's
      employment or service is terminated by the Company or an Affiliate for
      Cause or if, at the time of his or her termination, grounds for a
      termination for Cause exist, then any Option held by the participant
      (whether or not then exercisable) shall immediately terminate and cease to
      be exercisable.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Other
      Termination.  Except as provided in Section 9(a) or Section 9(b)
      above, if a participant's employment or service terminates for any reason
      or no reason, then:  (i) any Option held by the participant that
      is not exercisable on the date of termination shall immediately terminate,
      and (ii) any Option that is exercisable on the date of termination shall
      remain exercisable, to the extent exercisable on the date of termination,
      by the participant during the ninety (90) day period following the date of
      termination or, if sooner, until the expiration of the stated term
      thereof, and, to the extent not exercised during such period, shall
      thereupon terminate.

              

      

       

       

      
        	
                10.

              	
                Capital
      Changes; Transactions.

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Adjustments
      upon Changes in Capitalization.  f any change is made to the Common
      Stock by reason of any stock 'split, reverse stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the
      Company's receipt of consideration, appropriate adjustments shall be made
      to:  (i) the maximum number and/or class of securities available
      for issuance under the Plan, (ii) the

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	maximum
      number and/or class of securities with respect to which any employee may
      be granted Options under the Plan for any calendar year, (iii) the number
      and/or class of securities and the exercise price per share in effect
      under each outstanding Option (including, without limitation, outstanding
      Options granted to Non-Employee Directors pursuant to Section 7).
       Such adjustments to the outstanding Options are to be effected in a
      manner which shall preclude the substantial enlargement or dilution of
      rights and benefits under outstanding Options. 
	 	 	 
	 	 	 
	
                 
      

              	
                (b)

              	
                Change
      in Control.  Each Option outstanding at the time of a Change in
      Control that is not otherwise fully exercisable shall automatically
      accelerate so that each such Option shall, at least fifteen (15) days
      prior to the Change in Control, become fully exercisable (and the Board
      shall notify each participant of such acceleration at least
      fifteen (15) days prior to the Change in Control), provided that no
      acceleration of exercisability shall occur with respect to an outstanding
      Option if and to the extent such Option is, in connection with the Change
      in Control, to be assumed or otherwise continued in full force or
      effect by the successor entity (or parent thereof) pursuant to the terms
      of the Change in Control transaction.  Upon the consummation of the
      Change in Control, all outstanding Options shall terminate and cease
      to be outstanding, except to the extent assumed by the successor entity
      (or parent thereof) or otherwise expressly continued in full force and
      effect pursuant to the terms of the Change in Control transaction. 
      Each Option which is assumed (or is otherwise to continue in effect) in
      connection with a Change in Control shall be appropriately adjusted,
      immediately after such Change in Control, to apply to the number and class
      of securities which would have been issuable to the participant upon
      consummation of such Change in Control had the Option been exercised
      immediately prior to such Change in Control, provided the aggregate
      exercise price of an Option payable for such securities shall remain the
      same.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Fractional
      Shares.  In the event of any adjustment in the number of shares
      covered by an Option, any fractional shares resulting from such adjustment
      will be disregarded, and each such Option will cover only the number of
      full shares resulting from the
adjustment.

              

      

       

       

      
        	
                 
      

              	
                (d)

              	
                Determination
      of Board to be Final.  All adjustments under this Section 10
      shall be made by the Board, and its determination as to
      what adjustments shall be made, and the extent thereof, shall be
      final, binding and conclusive.

              

      

       

       

      
        	
                11.

              	
                Tax
      Withholding.  As a condition to the exercise of any award or the
      delivery of any shares of Common Stock pursuant to any Option or the lapse
      of restrictions on any shares of Common Stock, or in connection with any
      other event that gives rise to a federal or other governmental tax
      withholding obligation on the part of the Company or its
      subsidiaries:  (a) the Company may deduct or withhold (or cause
      to be deducted or withheld) from any payment or distribution to a
      participant whether or not pursuant to the Plan, and (b) the Company shall
      be entitled to require that the grantee remit cash to the Company (through
      payroll deduction or otherwise), in each case in an amount sufficient
      

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	in
      the opinion of the Company to satisfy such withholding
      obligation.  If the event giving rise to the withholding
      obligation involves a transfer of shares of Common Stock, then, unless the
      applicable award agreement provides otherwise, at the discretion of the
      Committee, the participant may satisfy the withholding obligation
      described under this Section 11 by electing to have the Company withhold
      shares of Common Stock (which withholding shall be at a rate not in excess
      of the statutory minimum rate) or by tendering previously-owned shares of
      Common Stock, in each case having a Fair Market Value equal to the amount
      of tax to be withheld (or by any other mechanism as may be required or
      appropriate to conform with local tax and other rules). 
	 	 
	 	 
	
                12.

              	
                Amendment
      and Termination.  The Board may amend or terminate the Plan at
      any time, provided that no such action may adversely affect the rights of
      the holder of any outstanding award without his or her
      consent.  Except as otherwise provided in Section 10, any
      amendment which increases the aggregate number of shares of Common Stock
      that may be issued under the Plan or modifies the class of employees
      eligible to receive Options under the Plan shall, to the extent required
      by applicable law, be subject to the approval of the Company's
      stockholders.  The Committee may amend the terms of any
      agreement or certificate made or issued hereunder at any time and from
      time to time provided that any amendment which would adversely affect the
      rights of the holder may not be made without his or her
      consent.

              

      

       

       

      
        	
                13.

              	
                Term
      of the Plan.  The Plan shall be effective on the Effective
      Date.  The Plan will terminate on the tenth anniversary of the
      Effective Date, unless sooner terminated by the Board.  The
      rights of any person with respect to an award made under the Plan that is
      outstanding at the time of the termination of the Plan shall not be
      affected solely by reason of the termination of the Plan and shall
      continue in accordance with the terms of the award (as then in effect or
      thereafter amended) and the Plan.

              

      

       

       

      
        	
                14.

              	
                Miscellaneous.

              

      

       

       

      
        	
                 
      

              	
                (a)

              	
                Documentation.
       Each Option granted made under the Plan shall be evidenced by a
      written agreement or other written instrument the terms of which shall be
      established by the Committee.  To the extent not inconsistent with
      the provisions of the Plan, the written agreement or other instrument
      evidencing an Option shall govern the rights and obligations of the
      participant (and any person claiming through the participant) with respect
      to the Option.

              

      

       

       

      
        	
                 
      

              	
                (b)

              	
                No
      Rights Conferred.  Nothing contained herein shall be deemed to give
      any individual any right to be retained in the employ or service of the
      Company or its Affiliates.

              

      

       

       

      
        	
                 
      

              	
                (c)

              	
                Governing
      Law.  The Plan shall be governed by the laws of the State of
      Delaware, without regard to its principles of conflicts of
      law.

              

      

       

       

      
        	
                 
      

              	
                (d)

              	
                Decisions
      and Determinations. All decisions or determinations made by the Board
      pursuant to the provisions hereof and, except to the extent rights or
      powers under 

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	the
      Plan are reserved specifically to the discretion of the Board, all
      decisions and determinations of the Committee shall be final, binding and
      conclusive.
	 	 	 
	 	 	 
	
                 
      

              	
                (e)

              	
                Severability. 
      In the event any provision of the Plan shall be held illegal or invalid
      for any reason, the illegality or invalidity shall not affect the
      remaining parts of the Plan, and the Plan shall be construed and enforced
      as if the illegal or invalid provision had not been
    included.

              

      

       

       

      
        	
                 
      

              	
                (f)

              	
                Requirements
      of Law.  The grant of awards and issuance of shares under the Plan
      shall be subject to compliance with all applicable laws, rules, and
      regulations, and to such approvals by any governmental agencies or
      national securities exchanges as the Committee deems necessary or
      desirable.

              

      

       

       

      Listing
and Other Conditions.  As long as the Common Stock is listed on a
national securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an Option shall
be conditioned upon such shares being listed on such exchange or
system.  If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to an Option is or
may in the circumstances be unlawful or result in the imposition of excise taxes
on the Company under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise with respect
to shares of Common Stock or Options, and the right to exercise any Option shall
be suspended until, in the opinion of said counsel, such sale or delivery shall
be lawful or shall not result in the imposition of excise taxes on the
Company.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]