Document:

EX-10.1

     

    Exhibit
      10.1

    
 

    
      ANGIODYNAMICS,
      INC.

    2004
      STOCK AND INCENTIVE AWARD PLAN

    (As
      amended by the Board of Directors on August 15, 2006)

    
      
        

      

    1.     Purposes. The
      primary purposes of this Plan are (a) to provide competitive equity incentives
      that will enable the Company to attract, retain, motivate and reward persons
      who
      render services that benefit the Company or other enterprises in which the
      Company has a significant interest and (b) to align the interests of such
      persons with the interests of the Company's shareholders generally

    

    2.     Definitions.
      Unless
      otherwise required by the context, the following terms, when used in this Plan,
      shall have the meanings set forth in this Section 2.

    

    (a)     "Affiliate"
      means an affiliate as defined in Rule 12b-2 promulgated under Section 12 of
      the
      Exchange Act.

    

    (b)     "Allied
      Enterprise" means a business enterprise, other than the Company or a Subsidiary,
      in which the Committee determines the Company has a significant interest,
      contingent or otherwise. E-Z-EM, Inc. shall be deemed to be an Allied Enterprise
      while it is an Affiliate of the Company.

    

    (c)     "Appreciation-Only
      Award" means (i) Options and Stock Appreciation Rights the exercise price of
      which is equal to at least 100% of Fair Market Value on the date on which the
      Options or Stock Appreciation Rights are granted, and (ii) Linked Stock
      Appreciation Rights that are granted as an alternative to the related Option
      after the date of grant of such Option, the exercise price of which Stock
      Appreciation Rights is equal to at least 100% of Fair Market Value on the date
      on which such Option was granted. 

    

    (d)     "Award"
      means an award granted under this Plan in one of the forms provided for in
      Section 3(a).

    

    (e)     "Beneficiary"
      means a person or entity (including but not limited to a trust or estate),
      designated in writing by a Service Provider or other rightful holder of an
      Award, on such forms and in accordance with such terms and conditions as the
      Committee may prescribe, to whom such Service Provider's or other rightful
      holder's rights under the Plan shall pass in the event of the death of such
      Service Provider or other rightful holder. In the event that the person or
      entity so designated is not living or in existence at the time of the death
      of
      the Service Provider or other rightful holder of the Award, or in the event
      that
      no such person or entity has been so designated, the "Beneficiary" shall mean
      the legal representative of the estate of the Service Provider or other rightful
      holder, or the person or entity to whom the Service Provider's or other rightful
      holder's rights with respect to the Award pass by will or the laws of descent
      and distribution.

    

    (f)     "Board"
      or "Board of Directors" means the Board of Directors of the Company, as
      constituted from time to time.

    

    (g)     "Change
      in Control" means that any of the following events has occurred:

    

    (i)     any
      Person is or becomes the Beneficial Owner, directly or indirectly, of securities
      of the Company (not including in the securities beneficially owned by such
      Person any securities acquired directly from the Company or its Affiliates)
      representing more than 40% of

    
      
         

      

      
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    the
      combined voting power of the Company's then outstanding securities, excluding
      any Person who becomes such a Beneficial Owner in connection with a transaction
      described in clause (A) of paragraph (iii) below; or 

    

    (ii)     the
      following individuals cease for any reason to constitute a majority of the
      number of directors serving on the Board: individuals who, at the beginning
      of
      any period of two consecutive years or less (not including any period prior
      to
      the Effective Date), constitute the Board and any new director (other than
      a
      director whose initial assumption of office is in connection with an actual
      or
      threatened election contest, including but not limited to a consent
      solicitation, relating to the election of directors of the Company) whose
      appointment or election by the Board or nomination for election by the Company's
      shareholders was approved or recommended 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 such period or whose appointment, election or nomination for election was
      previously so approved or recommended; or

    

    (iii)    there
      is
      consummated a merger or consolidation of the Company or any Subsidiary with
      any
      other corporation, other than (A) a merger or consolidation which would result
      in the voting securities of the Company outstanding immediately prior to such
      merger or consolidation continuing to represent (either by remaining outstanding
      or by being converted into voting securities of the surviving entity or any
      parent thereof), in combination with the ownership of any trustee or other
      fiduciary holding securities under an employee benefit plan of the Company
      or
      any Subsidiary, at least 60% of the combined voting power of the securities
      of
      the Company or such surviving entity or any parent thereof outstanding
      immediately after such merger or consolidation, or (B) a merger or consolidation
      effected to implement a recapitalization of the Company (or similar transaction)
      in which no Person is or becomes the Beneficial Owner, directly or indirectly,
      of securities of the Company (not including in the securities beneficially
      owned
      by such Person any securities acquired directly from the Company or its
      Affiliates) representing more than 40% or more of the combined voting power
      of
      the Company's then outstanding securities; or

    

    (iv)     the
      shareholders of the Company approve a plan of complete liquidation or
      dissolution of the Company or there is consummated an agreement for the sale
      or
      disposition by the Company of all or substantially all of the Company's assets,
      other than a sale or disposition by the Company of all or substantially all
      of
      the Company's assets to an entity, at least 60% of the combined voting power
      of
      the voting securities of which are owned by shareholders of the Company in
      substantially the same proportions as their ownership of the Company immediately
      prior to such sale.

    

    For
      purposes of the foregoing provisions of this Section 2(g), 

    

    (A)     the
      term
      "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
      Exchange Act; 

    

    (B)     the
      term
      "Effective Date" shall mean the date on which the Plan is effective as provided
      in Section 11 hereof; and

    

    (C)     the
      term
      "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act,
      as
      modified and used in Sections 13(d) and 14(d) thereof, except that such term
      shall not include (i) the Company or any of its subsidiaries, (ii) a trustee
      or
      other fiduciary holding securities under an employee benefit plan of the Company
      or any of its Affiliates, (iii) an underwriter temporarily holding securities
      pursuant to an offering of such securities, or (iv) a

    
      
         

      

      
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    corporation
      owned, directly or indirectly, by the shareholders of the Company in
      substantially the same proportions as their ownership of stock of the
      Company.

    

    (h)     "Code"
      means the Internal Revenue Code of 1986, as amended and in effect from time
      to
      time. References to a particular section of the Code shall include references
      to
      any related Treasury Regulations and to successor provisions of the
      Code.

    

    (i)     "Committee"
      means the committee appointed by the Board of Directors to administer the Plan
      pursuant to the provisions of Section 12(a) below.

    

    (j)     "Common
      Stock" means common stock of the Company, par value $.01 per share.

    

    (k)     "Company"
      means AngioDynamics, Inc., a Delaware corporation, and, except for purposes
      of
      determining under Section 2(g) hereof whether or not a Change in Control has
      occurred, shall include its successors. 

    

    (l)     "Dollar-Denominated
      Awards" means Performance Unit Awards and any other Incentive Award the amount
      of which is based on a specified amount of money (other than an amount of money
      determined by reference to the Fair Market Value of a specified number of shares
      of Common Stock). Options and Stock Appreciation Rights are not
      Dollar-Denominated Awards.

    

    (m)     "Employee"
      means any person who is employed by the Company or a Subsidiary on a full-time
      or part-time basis, including an officer or director if he is so
      employed.

    

    (n)     "Exchange
      Act" means the Securities Exchange Act of 1934, as amended from time to
      time.

    

    (o)     "Fair
      Market Value" on a particular date means as follows:

    

    (i)     The
      mean
      between the high and low sale prices of a share of Common Stock on such date,
      as
      reported by the National Association of Securities Dealers, Inc. Automated
      Quotation System or such other system then in use with regard to the Common
      Stock or, if on such date the Common Stock is publicly traded but not quoted
      by
      any such system, the mean of the closing bid and asked prices of a share of
      Common Stock on such date as furnished by a professional market maker making
      a
      market in the Common Stock; or

    

    (ii)    If
      in (i)
      above, there were no sales on such date reported as provided above, the
      respective prices on the most recent prior day on which a sale was so
      reported.

    

    In
      the
      case of an Incentive Stock Option, if the foregoing method of determining fair
      market value should be inconsistent with Section 422 of the Code, "Fair Market
      Value" shall be determined by the Committee in a manner consistent with Section
      422 of the Code and shall mean the value as so determined. 

    

    (p)     "General
      Counsel" means the General Counsel of the Company serving from time to
      time.

    

    (q)     "Incentive
      Award" means an amount of money that is paid or a number of shares of Common
      Stock that are issued, or a right to be paid an amount of money or to be issued
      a number of shares of Common Stock that is granted, subject to and in accordance
      with Section 5 and the other applicable provisions of the Plan. The term
      "Incentive Award" does not include Options or Stock Appreciation
      Rights.

    
      
         

      

      
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    (r)    "Incentive
      Stock Option" means an option, including an Option as the context may require,
      intended to meet the requirements of Section 422 of the Code.

    

    (s)    "Linked
      Stock Appreciation Rights" means Stock Appreciation Rights that are linked
      to
      all or any part of an Option, subject to and in accordance with Section 8(a),
      8(b) and the other applicable provisions of the Plan.

    

    (t)     "Non-Statutory
      Stock Option" means an option, including an Option as the context may require,
      which is not intended to be an Incentive Stock Option.

    

    (u)     "Option"
      means an option granted under this Plan to purchase shares of Common Stock.
      Options may be Incentive Stock Options or Non-Statutory Stock
      Options.

    

    (v)     "Performance-Based
      Compensation" means compensation that satisfies the requirements applicable
      to
      "performance-based compensation" under Code Section 162(m)(4)(C).

    

    (w)     "Performance
      Share Award" means a right granted subject to and in accordance with Section
      5
      and the other applicable provisions of the Plan (including, without limitation,
      Section 5.II., 5.II.(d), and 6(e)) to receive a specified number of shares
      of
      Common Stock, and/or an amount of money determined by reference to the Fair
      Market Value of a specified number of shares of Common Stock, at a future time
      or times if a specified performance goal is attained and any other terms or
      conditions specified by the Committee are satisfied. 

    

    (x)     "Performance
      Unit Award" means a right granted subject to and in accordance with Section
      5
      and the other applicable provisions of the Plan (including, without limitation,
      Section 5.II., 5.II.(d), and 6(e)) to receive a specified amount of money (other
      than an amount of money determined by reference to the Fair Market Value of
      a
      specified number of shares of Common Stock), or shares of Common Stock having
      a
      Fair Market Value equal to such specified amount of money, at a future time
      or
      times if a specified performance goal is attained and any other terms or
      conditions specified by the Committee are attained. 

    

    (y)     "Plan"
      means the AngioDynamics, Inc. Stock and Incentive Award Plan set forth in these
      pages, as amended from time to time.

    

    (z)     "Restricted
      Stock Award" means shares of Common Stock which are issued to a Service Provider
      in accordance with Section 5.I. and the other applicable provisions of the
      Plan
      subject to restrictions and/or forfeiture provisions specified by the Committee
      that will cease to apply at a future time or times if continued employment
      conditions and/or other terms and conditions specified by the Committee are
      satisfied. 

    

    (aa)     "Restricted
      Stock Unit Award" means shares of Common Stock that will be issued to a Service
      Provider at a future time or times subject to and in accordance with Section
      5.I. below and the other applicable provisions of the Plan if continued
      employment conditions and/or other terms and conditions specified by the
      Committee are satisfied. 

    

    (bb)     "SEC
      Rule
      16b-3" means Rule 16b-3 of the Securities and Exchange Commission promulgated
      under the Exchange Act, as such rule or any successor rule may be in effect
      from
      time to time.

    
      
         

      

      
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    (cc)     "Section
      16 Person" means a person subject to potential liability under Section 16(b)
      of
      the Exchange Act with respect to transactions involving equity securities of
      the
      Company.

    

    (dd)     "Service
      Provider" means a person who renders, has rendered or who the Committee expects
      to render services that benefit or will benefit the Company or a Subsidiary
      or
      an Allied Enterprise, in the capacity of employee, director, independent
      contractor, agent, advisor, consultant, representative or otherwise, and
      includes but is not limited to (i) Employees, (ii) personal service
      corporations, limited liability companies and similar entities through which
      any
      such person renders, has rendered or is expected to render such services, and
      (iii) members of the Board who are not Employees.

    

    (ee)     "Stock
      Appreciation Right" means a right granted subject to and in accordance with
      Section 8 and the other applicable provisions of the Plan. 

    

    (ff)     "Subsidiary"
      means a corporation or other form of business association of which shares (or
      other ownership interests) having more than 50% of the voting power are owned
      or
      controlled, directly or indirectly, by the Company; provided, however, that
      in
      the case of an Incentive Stock Option, the term "Subsidiary" shall mean a
      Subsidiary (as defined by the preceding clause) which is also a "subsidiary
      corporation" as defined in Section 424(f) of the Code.

    

    3.     Grants
      of Awards

    

    (a)     Subject
      to the provisions of the Plan, the Committee may at any time, and from time
      to
      time, grant the following types of awards to any Service Provider:

    

    (i)     Incentive
      Awards, which may but need not be in the form of Performance Share Awards,
      Performance Unit Awards, Restricted Stock Awards, or Restricted Stock Unit
      Awards; 

    

    (ii)     Options;
      and

    

    (iii)     Stock
      Appreciation Rights.

    

    Any
      provision above of this Section 3(a) to the contrary notwithstanding, the
      Committee may grant Incentive Stock Options only to Service Providers who are
      Employees.

    

    (b)     After
      an
      Award has been granted,

    

    (i)     the
      Committee may waive any term or condition thereof that could have been excluded
      from such Award when it was granted, and 

    

    (ii)     with
      the
      written consent of the affected participant, may amend any Award after it has
      been granted to include (or exclude) any provision which could have been
      included in (or excluded from) such Award when it was granted,

    

    and
      no
      additional consideration need be received by the Company in exchange for such
      waiver or amendment.

    

    (c)     The
      Committee may (but need not) grant any Award linked to another Award, including,
      without limitation, Options linked to Stock Appreciation Rights. Linked Awards
      may be granted as either alternatives or supplements to one another. The terms
      and conditions of any such linked Awards shall be determined by the Committee,
      subject to the provisions of the Plan.

    
      
         

      

      
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    (d)     No
      Service Provider shall acquire any rights in or to or with respect to any Award
      unless and until a written instrument signed by an officer of the Company and
      setting forth the terms and conditions of such Award is delivered to him and
      returned to the designated Company representative subscribed by the Service
      Provider within the time, if any, prescribed therefore by the Committee or
      its
      delegate. Any such instrument shall be consistent with this Plan and incorporate
      it by reference. Subscribing such instrument and returning it to the designated
      Company representative as aforesaid shall constitute the Service Provider's
      irrevocable agreement to and acceptance of the terms and conditions of the
      Award
      set forth in such instrument and of the Plan applicable to such
      Award.

    

    (e)     The
      Committee may grant Awards that qualify as Performance-Based Compensation,
      as
      well as Awards that do not qualify as Performance-Based Compensation. Any
      provision of the Plan to the contrary notwithstanding, the Plan shall be
      interpreted, administered and construed to permit the Committee to grant Awards
      that qualify as Performance-Based Compensation as well as Awards that do not
      so
      qualify, and any provision of the Plan that cannot be so interpreted,
      administered or construed shall to that extent be disregarded.

    

    (f)     The
      Plan
      is intended to enable the Committee to grant Options that qualify for the tax
      treatment applicable to incentive stock options under Section 422 of the Code,
      as well as Options and other Awards that do not qualify for such tax treatment.
      Any provision of the Plan to the contrary notwithstanding, the Plan shall be
      interpreted, administered and construed to enable the Committee to grant Options
      that qualify for the tax treatment applicable to incentive stock options under
      Section 422 of the Code as well as Options and other Awards that do not qualify
      for such tax treatment, and any provision of the Plan that cannot be so
      interpreted, administered or construed shall to that extent be
      disregarded.

    

    4.     Stock
      Subject to this Plan; Award Limits

    

    (a)     Subject
      to the provisions below of Sections 4(c) and 4(d) and Section 10, 

    

    (i)     the
      maximum aggregate number of shares of Common Stock which may be issued pursuant
      to Awards is 2,000,000 shares of Common Stock. Not more than 80% of such maximum
      aggregate number of shares may be issued pursuant to Options that are Incentive
      Stock Options; and 

    

    (ii)     the
      maximum number of shares of Common Stock with respect to which Options or Stock
      Appreciation Rights may be granted during any calendar year to any Employee
      or
      other Service Provider is 200,000 shares of Common Stock; and 

    

    (iii)     the
      maximum number of shares of Common Stock with respect to which any and all
      Awards other than Appreciation-Only Awards and Dollar-Denominated Awards may
      be
      granted in any one calendar year to any Employee or other Service Provider
      is
      100,000 shares of Common Stock; and 

    

    (iv)     no
      Employee or other Service Provider may receive more than $400,000 dollars (or
      the equivalent thereof in shares of Common Stock, based on Fair Market Value
      on
      the date as of which the number of shares is determined) in payment of
      Dollar-Denominated Awards that are granted to such Employee or other Service
      Provider in any one calendar year. 

    

    If,
      after
      any Award is earned or exercised, the issuance or transfer of shares of Common
      Stock or money is deferred, any amounts equivalent to dividends or other
      earnings during the deferral period (including shares which may be distributed
      in payment of any such amounts) shall be disregarded in applying the
      per

    
      
         

      

      
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    Employee
      or other Service Provider limitations set forth above in clauses (ii), (iii)
      and
      (iv) of this Section 4(a). If, in connection with an acquisition of another
      company or all or part of the assets of another company by the Company or a
      Subsidiary, or in connection with a merger or other combination of another
      company with the Company or a Subsidiary, the Company either (A) assumes stock
      options or other stock incentive obligations of such other company, or (B)
      grants stock options or other stock incentives in substitution for stock options
      or other stock incentive obligations of such other company, then none of the
      shares of Common Stock that are issuable or transferable pursuant to such stock
      options or other stock incentives that are assumed or granted in substitution
      by
      the Company shall be charged against the limitations set forth in this Section
      4(a) above. 

    

    (b)     Shares
      which may be issued pursuant to Awards may be authorized but unissued shares
      of
      Common Stock, or shares of Common Stock held in the treasury, whether acquired
      by the Company specifically for use under this Plan or otherwise, as the
      Committee may from time to time determine, provided, however, that any shares
      acquired or held by the Company for the purposes of this Plan shall, unless
      and
      until issued to a Service Provider or other rightful holder of an Award in
      accordance with the terms and conditions of such Award, be and at all times
      remain treasury shares of the Company, irrespective of whether such shares
      are
      entered in a special account for purposes of this Plan, and shall be available
      for any corporate purpose.

    

    (c)     Subject
      to Section 4(e) below, the maximum aggregate number of shares set forth in
      Section 4(a)(i) above shall be charged only for the number of shares which
      are
      actually issued under the Plan; if any shares of Common Stock subject to an
      Award shall not be issued to a Service Provider and shall cease to be issuable
      to a Service Provider because of the termination, expiration, forfeiture or
      cancellation, in whole or in part, of such Award or the settlement of such
      Award
      in cash or for any other reason, or if any such shares shall, after issuance,
      be
      reacquired by the Company because of a Service Provider's failure to comply
      with
      the terms and conditions of an Award, the shares not so issued, or the shares
      so
      reacquired by the Company, as the case may be, shall no longer be charged
      against the limitations provided for in Section 4(a)(i) above and may again
      be
      made subject to Awards. 

    

    (d)     Subject
      to Section 4(e) below, if the purchase price of shares subject to an Option
      is
      paid in shares of Common Stock in accordance with the provisions of clause
      (iv)
      of Section 7(b) below, or if shares of Common Stock that are issued or issuable
      pursuant to an Award are withheld by the Company in accordance with Section
      13(e) below in full or partial satisfaction of withholding taxes due in respect
      of the Award or the grant, exercise, vesting, distribution or payment of the
      Award, the number of shares surrendered to the Company in payment of the
      purchase price of the shares subject to the Option, or the number of shares
      that
      are withheld by the Company in payment of such withholding taxes, shall be
      added
      back to the maximum aggregate number of shares which may be issued pursuant
      to
      Awards under Section 4(a)(i) above, so that the maximum aggregate number of
      shares which may be issued pursuant to Awards under Section 4(a)(i) above shall
      have been charged only for the net number of shares that were issued by the
      Company pursuant to the Option exercise or the Award.

    

    (e)     If
      and to
      the extent that the General Counsel determines that Section 4(c) or Section
      4(d)
      above or Section 8(f) below shall cause the Company or the Plan to fail to
      satisfy any NASDAQ rules or listing standards that apply to the Company from
      time to time, or shall prevent Incentive Stock Options granted under the Plan
      from qualifying as Incentive Stock Options under Code Section 422, then to
      that
      extent (and only to that extent) Section 4(c), Section 4(d) or Section 8(f)
      shall be disregarded. 

    

    5.     Incentive
      Awards  

    

    I.     Generally.
      Incentive Awards shall be subject to the following provisions:

    
      
         

      

      
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    (a)     Incentive
      Awards may be granted in lieu of, or as a supplement to, any other compensation
      that may have been earned by the Service Provider prior to the date on which
      the
      Incentive Award is granted. The amount of an Incentive Award may be based upon
      (i) a specified number of shares of Common Stock or the Fair Market Value of
      a
      specified number of shares of Common Stock, or (ii) an amount not determined
      by
      reference to the Fair Market Value of a specified number of shares of Common
      Stock. Any Incentive Award may be paid in the form of money or shares of Common
      Stock valued at their Fair Market Value on the payment date, or a combination
      of
      money and such shares, as the Committee may provide. Performance Share Awards,
      Performance Unit Awards, Restricted Stock Awards and Restricted Stock Unit
      Awards are specific forms of Incentive Awards, but are not the only forms in
      which Incentive Awards may be made.

    

    (b)     Any
      shares of Common Stock that are to be issued pursuant to an Incentive Award,
      and
      any money to be paid in respect of an Incentive Award, may be issued or paid
      to
      the Service Provider at the time such Award is granted, or at any time
      subsequent thereto, or in installments from time to time, as the Committee
      shall
      determine. In the event that any such issuance or payment shall not be made
      to
      the Service Provider at the time an Incentive Award is granted, the Committee
      may but need not provide that, until such shares are issued or money is paid
      in
      respect of the Award or until the Award is forfeited, and subject to such terms
      and conditions as the Committee may impose, the Award shall earn amounts
      equivalent to interest, dividends or another investment return specified by
      the
      Committee, which amounts may be paid as earned or deferred and reinvested,
      and
      which amounts may be paid either in money or shares of Common Stock, all as
      the
      Committee may provide. 

    

    (c)     Incentive
      Awards shall be subject to such terms and conditions, including, without
      limitation, restrictions on the sale or other disposition of the shares issued
      or transferred pursuant to such Award, and conditions calling for forfeiture
      of
      the Award or the shares issued pursuant thereto in designated circumstances,
      as
      the Committee may determine; provided, however, that upon the issuance of shares
      pursuant to any such Award, the recipient shall, with respect to such shares,
      be
      and become a shareholder of the Company fully entitled to receive dividends,
      to
      vote and to exercise all other rights of a shareholder except to the extent
      otherwise provided in the Award. In the case of a Restricted Stock Award, the
      recipient shall pay the par value of the shares to be issued pursuant to the
      Award unless such payment is not required by applicable law.

    

    II.     Performance
      Share Awards and Performance Unit Awards

    

    (a)     Subject
      to the terms and conditions of the Plan, the Committee may grant any Service
      Provider a Performance Share Award and/or a Performance Unit Award. The
      Committee may but need not provide that a specified portion of the Performance
      Share Award or Performance Unit Award will be earned if the specified
      performance goal applicable to the Award is partially attained. 

    

    (b)     Subject
      to Section 6(b) below, the specified performance goal applicable to a
      Performance Share Award or Performance Unit Award may but need not consist,
      without limitation, of any one or more of the following: completion of a
      specified period of employment with or other service that benefits the Company
      or a Subsidiary or an Allied Enterprise, achievement of financial or operational
      goals, and/or the occurrence of a specified circumstance or event. The
      performance goal applicable to Performance Share Awards and Performance Unit
      Awards, and the other terms and conditions of such awards need not be the same
      for each award or each Service Provider to whom an award is granted. A Service
      Provider may (but need not) be granted Performance Share Awards and Performance
      Unit Awards each year, and the performance period applicable to any such Award
      may overlap with one or more years included in the performance period applicable
      to any earlier- or later-granted Award. Subject to Section 6(d) below, the
      Committee may retain discretion to adjust the determinations of the degree
      of

    
      
         

      

      
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    attainment
      of the performance objectives applicable to Performance Share Awards and
      Performance Unit Awards.

    

    (c)     Subject
      to Section 6(e) below, the Committee may but need not provide that, if the
      Service Provider's death or disability or another circumstance or event
      specified by the Committee occurs before the performance goal applicable to
      a
      Performance Share Award or Performance Unit Award is attained, and irrespective
      of whether the performance goal is thereafter attained, the Performance Share
      Award or Performance Unit Award will be earned in whole or in part (as the
      Committee may specify). 

    

    (d)     The
      Committee may but need not provide for a Service Provider's Performance Share
      Award or Performance Unit Award to be forfeited in whole or in part if such
      Participant's employment by or other service that benefits the Company, a
      Subsidiary or an Allied Enterprise terminates for any reason before shares
      are
      issued or money is paid (as applicable) in full settlement of such Performance
      Share Award or Performance Unit Award. 

    

    (e)     Except
      as
      otherwise provided in the instrument evidencing a Performance Share Award or
      Performance Unit Award, Performance Share Awards and Performance Unit Awards
      may
      not be sold, transferred, pledged, assigned, or otherwise alienated or
      hypothecated, other than by will or by the laws of descent and distribution
      or
      to a Beneficiary.

    

    6.     Performance
      Measures and Other Provisions Applicable to Performance-Based Compensation
      Awards

    

    (a)     Awards
      that the Committee intends to qualify as Performance-Based Compensation shall
      be
      granted and administered in a manner that will enable such Awards to qualify
      as
      Performance-Based Compensation. 

    

    (b)     The
      performance goal applicable to any Award (other than an Appreciation-Only Award)
      that the Committee intends to qualify as Performance-Based Compensation shall
      be
      based on earnings per share, total shareholder return, or any one or more of
      the
      following performance measures on a consolidated Company, business unit or
      divisional level, or by product or product line, as the Committee may specify:
      net sales, net income, operating income, return on equity, return on capital,
      or
      cash flow. The Committee shall select the performance measure or measures on
      which the performance goal applicable to any such Award shall be based and
      shall
      establish the levels of performance at which such Award is to be earned in
      whole
      or in part. Any such performance measure or combination of such performance
      measures may apply to the Service Provider's Award in its entirety or to any
      designated portion or portions of the Award, as the Committee may specify.
      The
      foregoing performance measures shall be determined in accordance with generally
      accepted accounting principles ("GAAPs") to the extent that GAAPs define such
      performance measures, and otherwise shall be determined in accordance with
      any
      customary and reasonable definition the Committee approves. However,
      notwithstanding the preceding sentence, unless the Committee determines
      otherwise prior to payment of an Award to which this Section 6(b) applies,
      and
      subject to any exercise of "negative discretion" by the Committee,
      extraordinary, unusual or non-recurring items; discontinued operations; effects
      of accounting changes; effects of currency fluctuations; effects of financing
      activities (by way of example, without limitation, effect on earnings per share
      of issuing convertible debt securities); expenses for restructuring or
      productivity initiatives; non-operating items; effects of acquisitions and
      acquisition expenses; and effects of divestitures and divestiture expenses,
      any
      of which affect any performance goal applicable to such Award (including,
      without limitation, earnings per share but excluding total shareholder return)
      shall be automatically excluded or included in determining the extent to which
      the performance goal has been achieved, whichever will produce the higher Award.
      

    
      
         

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (c)     Any
      provision of the Plan to the contrary notwithstanding, but subject to Section
      6(e), Section 9 and Section 10 below, Awards to which Section 6(b) above applies
      shall (i) "be paid solely on account of the attainment of one or more
      preestablished, objective performance goals" (within the meaning of Treasury
      Regulation 1.162-27(e)(2) or its successor) over a period of one year or longer,
      which performance goals shall be based upon one or more of the performance
      measures set forth in Section 6(b) above, and (ii) be subject to such other
      terms and conditions as the Committee may impose. 

    

    (d)     The
      terms
      of the performance goal applicable to any Award to which Section 6(b) above
      applies shall preclude discretion to increase the amount of compensation that
      would otherwise be due upon attainment of the goal.

    

    (e)     An
      Award
      to which Section 6(b) above applies may be earned in whole or in part if the
      Service Provider's death or disability or a Change in Control or another
      circumstance or event specified by the Committee occurs before the performance
      goal applicable to the Award is attained, and irrespective of whether the
      performance goal applicable to the Award is thereafter attained, but only if
      and
      to the extent that (i) the Committee so provides with respect to such Award,
      and
      (ii) the Award will nevertheless qualify as Performance-Based Compensation
      if
      the performance goal applicable to such Award is attained and the Service
      Provider's death or disability, a Change in Control or any such other
      circumstance or event specified by the Committee does not occur. 

    

    7.     Options.  
       Options
      shall be subject to the following provisions and such other terms and
      conditions, consistent with the following provisions, as the Committee may
      provide in the instrument evidencing the Options:

    

    (a)     Subject
      to the provisions of Section 10, the purchase price per share shall be, in
      the
      case of an Incentive Stock Option, not less than 100% of the Fair Market Value
      of a share of Common Stock on the date the Incentive Stock Option is granted
      (or
      in the case of any optionee who, at the time such Incentive Stock Option is
      granted, owns stock possessing more than 10 percent of the total combined voting
      power of all classes of stock of his employer corporation or of its parent
      or
      subsidiary corporation, not less than 110% of the Fair Market Value of a share
      of Common Stock on the date the Incentive Stock Option is granted) and, in
      the
      case of a Non-Statutory Stock Option, not less than the par value of a share
      of
      Common Stock on the date the Non-Statutory Stock Option is granted. Subject
      to
      the foregoing limitations, the purchase price per share may, if the Committee
      so
      provides at the time of grant of an Option, be indexed to the increase or
      decrease in an index specified by the Committee.

    

    (b)     The
      purchase price of shares subject to an Option may be paid in whole or in part
      (i) in money, (ii) by bank-certified, cashier's or personal check subject to
      collection, (iii) if so provided in the Option and subject to Section 402 of
      the
      Sarbanes-Oxley Act of 2002 as amended from time to time and subject to such
      terms and conditions as the Committee may impose, by delivering to the Company
      a
      properly executed exercise notice together with a copy of irrevocable
      instructions to a stockbroker to sell immediately some or all of the shares
      acquired by exercise of the option and to deliver promptly to the Company an
      amount of sale proceeds (or, in lieu of or pending a sale, loan proceeds)
      sufficient to pay the purchase price, or (iv) if so provided in the Option
      and
      subject to such terms and conditions as may be specified in the Option, in
      shares of Common Stock which have been owned by the optionee for at least six
      months or which were acquired on the open market and which are surrendered
      to
      the Company actually or by attestation. Shares of Common Stock thus surrendered
      shall be valued at their Fair Market Value on the date of exercise.

    

    (c)     Options
      may be granted for such lawful consideration, including but not limited to
      money
      or other property, tangible or intangible, or labor or services received or
      to
      be received by the Company, a

    
      
         

      

      
        10

        
          

        

      

      
        
        

      

    

    Subsidiary
      or an Allied Enterprise, as the Committee may determine when the Option is
      granted. The consideration for the grant of options may consist of the discharge
      of an obligation of the Company or an Affiliate. Subject to the foregoing and
      the other provisions of this Section 7, each Option may be exercisable in full
      at the time of grant or may become exercisable in one or more installments
      and
      at such time or times and subject to such terms and conditions, as the Committee
      may determine. Without limiting the foregoing, an Option may (but need not)
      provide by its terms that it will become exercisable in whole or in part upon
      the completion of specified periods of service or earlier achievement of one
      or
      more performance objectives specified therein, or that it will become
      exercisable only if one or more performance goals specified therein are
      achieved. The Committee may at any time accelerate the date on which an Option
      becomes exercisable, and no additional consideration need be received by the
      Company in exchange for such acceleration. Unless otherwise provided in the
      instrument evidencing the Option, an Option, to the extent it becomes
      exercisable, may be exercised at any time in whole or in part until the
      expiration or termination of the Option.

    

    (d)     Subject
      to Section 13(a) below, each Option shall be exercisable during the life of
      the
      optionee only by him or his guardian or legal representative, and after death
      only by his Beneficiary. Notwithstanding any other provision of this Plan,
      (i)
      no Option shall be exercisable after the tenth anniversary of the date on which
      the Option was granted, and (ii) no Incentive Stock Option which is granted
      to
      any optionee who, at the time such Option is granted, owns stock possessing
      more
      than 10 percent of the total combined voting power of all classes of stock
      of
      his employer corporation or of its parent or subsidiary corporation, shall
      be
      exercisable after the expiration of five (5) years from the date such Option
      is
      granted. If an Option is granted for a term of less than ten years, the
      Committee may, at any time prior to the expiration of the Option, extend its
      term for a period ending not later than on the tenth anniversary of the date
      on
      which the Option was granted, and no additional consideration need be received
      by the Company in exchange for such extension. Subject to the foregoing
      provisions of this Section 7(d), the Committee may but need not provide for
      an
      Option to be exercisable after termination of the Service Provider's employment
      or other service for any period and subject to any terms and conditions that
      the
      Committee may determine.

    

    (e)     An
      Option
      may, but need not, be an Incentive Stock Option; provided that the aggregate
      Fair Market Value (determined as of the time the option is granted) of the
      stock
      with respect to which Incentive Stock Options may be exercisable for the first
      time by any Employee during any calendar year (under all plans, including this
      Plan, of his employer corporation and its parent and subsidiary corporations)
      shall not exceed $100,000 unless the Code is amended to allow a higher dollar
      amount.

    

    (f)     Shares
      purchased pursuant to the exercise of an Option shall be issued to the person
      exercising the Option as soon as practicable after the Option is properly
      exercised. However, the Committee may (but need not) permit the person
      exercising an Option to elect to defer the issuance of shares purchased pursuant
      to the exercise of the Option on such terms and subject to such conditions
      and
      for such periods of time as the Committee may in its discretion provide. In
      the
      event of such deferral, the Committee may (but need not) pay the person who
      exercised the Option amounts equivalent to any dividends paid on or reinvested
      in such shares during the deferral period. Such amounts may be paid in cash
      or
      shares, as the Committee may provide. 

    

    (g)    The
      Committee shall not have the authority to reduce the exercise price of
      outstanding Options, except as permitted by Section 10 below (relating to
      adjustments for changes in capitalization and similar adjustments).

    

    (h)     No
      Employee shall make any elective contribution or employee contribution to the
      Plan (within the meaning of Treasury Regulation Section
      1.401(k)-1(d)(2)(iv)(B)(4) or a successor thereto) during the six months after
      the Employee's receipt of a hardship distribution from a plan of the
      Company

    
      
         

      

      
        11

        
          

        

      

      
        
        

      

    

    or
      a
      related party within the provisions of Code Sections 414(b), (c), (m) or (o)
      containing a cash or deferred arrangement under Section 401(k) of the Code.
      The
      preceding sentence shall not apply if and to the extent that the General Counsel
      determines it is not necessary to qualify any such plan as a cash or deferred
      arrangement under Section 401(k) of the Code.

    

    (i)     No
      option
      shall be exercisable unless and until the Company (i) obtains the approval
      of
      all regulatory bodies whose approval the General Counsel may deem necessary
      or
      desirable, and (ii) complies with all legal requirements deemed applicable
      by
      the General Counsel.

    

    (j)     An
      Option
      shall be considered exercised if and when written notice, signed by the person
      exercising the Option and stating the number of shares with respect to which
      the
      Option is being exercised, is received by the designated representative of
      the
      Company on a properly completed form approved for this purpose by the Committee,
      accompanied by full payment of the Option exercise price in one or more of
      the
      forms authorized in the instrument evidencing such Option and described in
      Section 7(b) above for the number of shares to be purchased. No Option may
      at
      any time be exercised with respect to a fractional share unless the instrument
      evidencing such Option expressly provides otherwise.

    

    8.     Stock
      Appreciation Rights.
      Stock
      Appreciation Rights shall be subject to such terms and conditions, not
      inconsistent with the Plan, as shall from time to time be determined by the
      Committee and to the following terms and conditions:

    

    (a)     Stock
      Appreciation Rights that are granted under the Plan may be linked to all or
      any
      part of an Option ("Linked Stock Appreciation Rights"), or may be granted
      without any linkage to an Option ("Free-Standing Stock Appreciation Rights").
      Linked Stock Appreciation Rights may be granted on the date of grant of the
      related Option or on any date thereafter, as the Committee may
      determine.

    

    (b)     Linked
      Stock Appreciation Rights may be granted either as an alternative or a
      supplement to the Option to which they are linked (the "related" Option). Linked
      Stock Appreciation Rights that are granted as an alternative to the related
      Option may only be exercised when the related Option is exercisable, and at
      no
      time may a number of such Linked Stock Appreciation Rights be exercised that
      exceeds the number of shares with respect to which the related Option is then
      exercisable. Upon exercise of Linked Stock Appreciation Rights that are granted
      as an alternative to an Option, the holder shall be entitled to receive the
      amount determined pursuant to Section 8(e) below. Exercise of each such Linked
      Stock Appreciation Right shall cancel the related Option with respect to one
      share of Common Stock purchasable under the Option. Linked Stock Appreciation
      Rights that are granted as a supplement to the related Option shall entitle
      the
      holder to receive the amount determined pursuant to Section 8(e) below if and
      when the holder purchases shares under the related Option or at any subsequent
      time specified in the instrument evidencing such Stock Appreciation
      Rights.

    

    (c)     Stock
      Appreciation Rights may be granted for such lawful consideration, including
      but
      not limited to money or other property, tangible or intangible, or labor or
      services received or to be received by the Company, a Subsidiary or an Allied
      Enterprise, as the Committee may determine when the Stock Appreciation Rights
      are granted. The consideration for the grant of Stock Appreciation Rights may
      consist of the discharge of an obligation of the Company or an Affiliate. .
      Subject to the foregoing and the other provisions of this Section 8, Stock
      Appreciation Rights may be exercisable in full at the time of grant or may
      become exercisable in one or more installments and at such time or times and
      subject to such terms and conditions, as the Committee may determine. Without
      limiting the foregoing, Stock Appreciation Rights may (but need not) provide
      by
      their terms that they will become exercisable in whole or in part upon the
      completion of specified periods of service or earlier achievement of one or
      more
      specified performance objectives, or that they will become exercisable only
      if
      one or more specified performance goals are achieved. The Committee may at
      any
      time accelerate the date on which Stock

    
      
         

      

      
        12

        
          

        

      

      
        
        

      

    

    Appreciation
      Rights become exercisable, and no additional consideration need be received
      by
      the Company in exchange for such acceleration. Unless otherwise provided in
      the
      Plan or the instrument evidencing the Stock Appreciation Rights, Stock
      Appreciation Rights, to the extent they become exercisable, may be exercised
      at
      any time in whole or in part until they expire or terminate.

    

    (d)     No
      Free-Standing Stock Appreciation Rights or Linked Stock Appreciation Rights
      that
      are granted as a supplement to the related Option shall be exercisable after
      the
      tenth anniversary of the date on which the Stock Appreciation Rights were
      granted, and no Linked Stock Appreciation Rights that are granted as an
      alternative to the related Option shall be exercisable after the related Option
      ceases to be exercisable. If the Committee grants Stock Appreciation Rights
      for
      a lesser term than that permitted by the preceding sentence, the Committee
      may,
      at any time prior to expiration of the Stock Appreciation Rights, extend their
      term to the maximum term permitted by the preceding sentence, and no additional
      consideration need be received by the Company in exchange for such extension.
      Subject to the foregoing provisions of this Section 8(d), the Committee may
      but
      need not provide for Stock Appreciation Rights to be exercisable after
      termination of the Service Provider's employment or other service for any period
      and subject to any terms and conditions that the Committee may
      determine.

    

    (e)    Upon
      exercise of Stock Appreciation Rights, the holder thereof shall be entitled
      to
      receive an amount of money, or a number shares of Common Stock that have a
      Fair
      Market Value on the date of exercise of such Stock Appreciation Rights, or
      a
      combination of money and shares valued at Fair Market Value on such date, as
      the
      Committee may determine, equal to the amount by which the Fair Market Value
      of a
      share of Common Stock on the date of such exercise exceeds the Exercise Price
      (as hereafter defined) of the Stock Appreciation Rights, multiplied by the
      number of Stock Appreciation Rights exercised; provided that in no event shall
      a
      fractional share be issued unless the instrument evidencing such Stock
      Appreciation Rights expressly provides otherwise. In the case of Linked Stock
      Appreciation Rights that are granted as an alternative to the related Option,
      the Exercise Price shall be the price at which shares may be purchased under
      the
      related Option. In the case of Linked Stock Appreciation Rights that are granted
      as a supplement to the related Option, and in the case of Free-Standing Stock
      Appreciation Rights, the Exercise Price shall be the Fair Market Value of a
      share of Common Stock on the date the Stock Appreciation Rights were granted,
      unless the Committee specified a different price when the Stock Appreciation
      Rights were granted (which shall not be less than the par value of the Common
      Stock). 

    

    (f)     Subject
      to Section 4(e) above, (i) the limitations set forth in Section 4(a)(i) above
      shall be charged only for the number of shares which are actually issued in
      settlement of Stock Appreciation Rights; and (ii) in the case of an exercise
      of
      Linked Stock Appreciation Rights that were granted as an alternative to the
      related Option, if the number of shares of Common Stock previously charged
      against such limitations on account of the portion of the Option that is
      cancelled in connection with such exercise in accordance with Section 8(b)
      exceeds the number of shares (if any) actually issued pursuant to such exercise,
      the excess may be added back to the maximum aggregate number of shares available
      for issuance under the Plan.

    

    (g)     Subject
      to Section 13(a) below, Stock Appreciation Rights shall be exercisable during
      the life of the Service Provider only by him or his guardian or legal
      representative, and after death only by his Beneficiary.

     

    (h)     The
      Committee shall not have the authority to reduce the exercise price of
      outstanding Stock Appreciation Rights, except as permitted by Section 10 below
      (relating to adjustments for changes in capitalization and similar
      adjustments).

    

    
      
         

      

      
        13

        
          

        

      

      
        
        

      

    

    9.     Certain
      Change in Control, Termination of Service, Death and Disability
      Provisions. 

    

    The
      Committee may at any time, and subject to such terms and conditions as it may
      impose:

    

    (a)    authorize
      the holder of an Option or Stock Appreciation Rights to exercise the Option
      or
      Stock Appreciation Rights (i) on and after a Change in Control, or (ii) after
      the termination of the participant's employment or other applicable service
      that
      benefits the Company or a Subsidiary or an Allied Enterprise, or (iii) after
      the
      participant's death or disability, whether or not the Option or Stock
      Appreciation Rights would otherwise be or become exercisable on or after any
      such event, provided that in no event may an Option or Stock Appreciation Rights
      be exercised after the expiration of their term;

    

    (b)     grant
      Options and Stock Appreciation Rights, which become exercisable only in the
      event of a Change in Control; 

    

    (c)     provide
      for Stock Appreciation Rights to be exercised automatically and only for money
      in the event of a Change in Control;

    

    (d)     authorize
      any Award to become non-forfeitable, fully earned and payable (i) upon a Change
      in Control, or (ii) after the termination of the Service Provider's employment
      with or other applicable service that benefits the Company or a Subsidiary
      or an
      Allied Enterprise, or (iii) after the Service Provider's death or disability,
      whether or not the Award would otherwise be or become non-forfeitable, fully
      earned and payable upon or after any such event; 

    

    (e)     grant
      Awards which become non-forfeitable, fully earned and payable only in the event
      of a Change in Control; and 

    

    (f)     provide
      in advance or at the time of a Change in Control for money to be paid in
      settlement of any Award in the event of a Change in Control, either at the
      election of the participant or at the election of the Committee.

    

    10.     Adjustment
      Provisions.
      In the
      event that any recapitalization, or reclassification, split-up, reverse split,
      or consolidation of shares of Common Stock shall be effected, or the outstanding
      shares of Common Stock shall be, in connection with a merger or consolidation
      of
      the Company or a sale by the Company of all or a part of its assets, exchanged
      for a different number or class of shares of stock or other securities or
      property of the Company or any other entity or person, or a spin-off or a record
      date for determination of holders of Common Stock entitled to receive a dividend
      or other distribution payable in Common Stock or other property (other than
      normal cash dividends) shall occur, (a) the maximum aggregate number and the
      class of shares or other securities or property that may be issued in accordance
      with Section 4(a)(i) above pursuant to Awards thereafter granted, (b) the
      maximum number and the class of shares or other securities or property with
      respect to which Options or Stock Appreciation Rights, or Awards other than
      Appreciation-Only Awards and Dollar-Denominated Awards, may be granted during
      any calendar year to any Employee or other Service Provider pursuant to Section
      4(a)(ii) or 4(a)(iii) above, (c) the number and the class of shares or other
      securities or property that may be issued or transferred under outstanding
      Awards, (d) the purchase price to be paid per share under outstanding and future
      Awards, and (e) the price to be paid per share by the Company or a Subsidiary
      for shares or other securities or property issued pursuant to Awards which
      are
      subject to a right of the Company or a Subsidiary to reacquire such shares
      or
      other securities or property, shall in each case be equitably adjusted; provided
      that with respect to Incentive Stock Options any such adjustments shall comply
      with Sections 422 and 424 of the Code.

    
      
         

      

      
        14

        
          

        

      

      
        
        

      

    

    11.     Effective
      Date and Duration of Plan.
      The Plan
      shall be effective on the date on which the shareholders of the Company approve
      it either (a) at a duly held stockholders' meeting, or (b) by the written
      consent of the holders of a majority of the securities of the Company entitled
      to vote, in accordance with any applicable provisions of the Delaware General
      Corporation Law. If the Plan is not so approved by shareholders, the Plan shall
      be null, void and of no force or effect. If so approved, Awards may be granted
      within ten years after the date of such approval by shareholders, but not
      thereafter. In no event shall an Incentive Stock Option be granted under the
      Plan more than ten (10) years from the date the Plan is adopted by the Board,
      or
      the date the Plan is approved by the shareholders of the Company, whichever
      is
      earlier.

    

    12.     Administration. 

    

    (a)    The
      Plan
      shall be administered by a committee of the Board consisting of two or more
      directors appointed from time to time by the Board. No person shall be appointed
      to or shall serve as a member of such committee unless at the time of such
      appointment and service he shall satisfy any director independence requirements
      then applicable to service on such committee under any NASDAQ rules or listing
      standards that apply to the Company at such time. Unless the Board determines
      otherwise, such committee shall also be comprised solely of "outside directors"
      within the meaning of Section 162(m)(4)(C)(i) of the Code and Treasury
      Regulation Section 1.162-27(e)(3), and "non-employee directors" as defined
      in
      SEC Rule 16b-3. 

    

    (b)     The
      Committee may establish such rules and regulations, not inconsistent with the
      provisions of the Plan, as it may deem necessary for the proper administration
      of the Plan, and may amend or revoke any rule or regulation so established.
      The
      Committee shall, subject to the provisions of the Plan, have full power and
      discretion to interpret, administer and construe the Plan and full authority
      to
      make all determinations and decisions thereunder including without limitation
      the authority and discretion to (i) determine the persons who are Service
      Providers and select the Service Providers who are to participate in the Plan,
      (ii) determine when Awards shall be granted, (iii) determine the number of
      shares and/or amount of money to be made subject to each Award, (iv) determine
      the type of Award to grant, (v) determine the terms and conditions of each
      Award, including the exercise price, in the case of an Option or Stock
      Appreciation Rights, and whether specific Awards shall be linked to one another
      and if so whether they shall be alternative to or supplement one another, (vi)
      make any adjustments pursuant to Section 10 of the Plan, and (vii) determine
      whether or not a specific Award is intended to qualify as Performance-Based
      Compensation. Without limiting the generality of the foregoing, the Committee
      shall have the authority to establish and administer performance goals
      applicable to Awards, and the authority to certify that such performance goals
      are attained, within the meaning of Treasury Regulation Section 1.162-27(c)(4).
      The interpretation by the Committee of the terms and provisions of the Plan
      and
      any instrument issued thereunder, and its administration thereof, and all action
      taken by the Committee, shall be final, binding and conclusive on the Company,
      its stockholders, Subsidiaries, Allied Enterprises, all participants and Service
      Providers, and upon their respective Beneficiaries, successors and assigns,
      and
      upon all other persons claiming under or through any of them.

    

    (c)    Members
      of the Board of Directors and members of the Committee acting under this Plan
      shall be fully protected in relying in good faith upon the advice of counsel
      and
      shall incur no liability except for gross or willful misconduct in the
      performance of their duties.

    

    13.   General
      Provisions. 

    

    (a)     No
      Award,
      including without limitation any Option or Stock Appreciation Rights, shall
      be
      transferable by the Service Provider or other rightful holder of such Award
      other than by will or the laws of descent and distribution or to a Beneficiary.
      The preceding sentence and any other provision of

    
      
         

      

      
        15

        
          

        

      

      
        
        

      

    

    the
      Plan
      to the contrary notwithstanding, the Committee may (but need not) permit a
      Service Provider to transfer any Award, other than an Incentive Stock Option
      or
      any other Award that is linked to an Incentive Stock Option, during his lifetime
      to such other persons and such entities and on such terms and subject to such
      conditions as the Committee may provide in the instrument evidencing such
      Award.

    

    (b)     Nothing
      in this Plan or in any instrument executed pursuant hereto shall confer upon
      any
      person any right to continue in the employment or other service of the Company
      or a Subsidiary or an Allied Enterprise, or shall affect the right of the
      Company or a Subsidiary or any Allied Enterprise to terminate the employment
      or
      other service of any person at any time with or without cause.

    

    (c)    No
      shares
      of Common Stock shall be issued or transferred pursuant to an Award unless
      and
      until all legal requirements applicable to the issuance or transfer of such
      shares have, in the opinion of the General Counsel, been satisfied. Any such
      issuance or transfer shall be contingent upon the person acquiring the shares
      giving the Company any assurances the General Counsel may deem necessary or
      desirable to assure compliance with all applicable legal
      requirements.

    

    (d)     No
      person
      (individually or as a member of a group) and no Beneficiary or other person
      claiming under or through him, shall have any right, title or interest in or
      to
      any shares of Common Stock (i) allocated, or (ii) reserved for the purposes
      of
      this Plan, or (iii) subject to any Award, except as to such shares of Common
      Stock, if any, as shall have been issued to him. 

     

    (e)    The
      Company and its Subsidiaries and any Allied Enterprises may make such provisions
      as they may deem appropriate for the withholding of any taxes which they
      determine they are required to withhold in connection with any Award. Without
      limiting the foregoing, the Committee may, subject to such terms and conditions
      as it may impose, permit or require any withholding tax obligation arising
      in
      connection with any Award or the grant, exercise, vesting, distribution or
      payment of any Award, up to the minimum required federal, state and local
      withholding taxes, including payroll taxes, to be satisfied in whole or in
      part,
      with or without the consent of the Service Provider or other rightful holder
      of
      the Award, by having the Company withhold all or any part of the shares of
      Common Stock that vest or would otherwise be issued or distributed at such
      time.
      Any shares so withheld shall be valued at their Fair Market Value on the date
      of
      such withholding.

    

    (f)     Nothing
      in this Plan is intended to be a substitute for, or shall preclude or limit
      the
      establishment or continuation of, any other plan, practice or arrangement for
      the payment of compensation or fringe benefits to directors, officers,
      employees, consultants or Service Providers generally, or to any class or group
      of such persons, which the Company or any Subsidiary now has or may hereafter
      lawfully put into effect, including, without limitation, any incentive
      compensation, retirement, pension, group insurance, stock purchase, stock bonus
      or stock option plan. A Service Provider may be granted an Award whether or
      not
      he is eligible to receive similar or dissimilar incentive compensation under
      any
      other plan or arrangement of the Company.

    

    (g)     The
      Company's obligation to issue shares of Common Stock or to pay money in respect
      of any Award shall be subject to the condition that such issuance or payment
      would not impair the Company's capital or constitute a breach of or cause the
      Company to be in violation of any covenant, warranty or representation made
      by
      the Company in any credit agreement to which the Company is a party before
      the
      date of grant of such Award.

    

    (h)    By
      accepting any benefits under the Plan, each Service Provider, and each person
      claiming under or through him, shall be conclusively deemed to have indicated
      his acceptance and ratification of, and consent to, all provisions of the Plan
      and any action or decision under the Plan by the Company, its agents and
      employees, and the Board of Directors and the Committee.

    
      
         

      

      
        16

        
          

        

      

      
        
        

      

    

    

    (i)     The
      validity, construction, interpretation and administration of the Plan and of
      any
      determinations or decisions made thereunder, and the rights of all persons
      having or claiming to have any interest therein or thereunder, shall be governed
      by, and determined exclusively in accordance with, the laws of the State of
      Delaware, but without giving effect to the principles of conflicts of laws
      thereof. Without limiting the generality of the foregoing, the period within
      which any action arising under or in connection with the Plan must be commenced,
      shall be governed by the laws of the State of Delaware, without giving effect
      to
      the principles of conflicts of laws thereof, irrespective of the place where
      the
      act or omission complained of took place and of the residence of any party
      to
      such action and irrespective of the place where the action may be brought.
      A
      Service Provider's acceptance of any Award shall constitute his irrevocable
      and
      unconditional waiver of the right to a jury trial in any action or proceeding
      concerning the Award, the Plan or any rights or obligations of the Service
      Provider or the Company under or with respect to the Award or the
      Plan.

    

    (j)     The
      use
      of the masculine gender shall also include within its meaning the feminine.
      The
      use of the singular shall include within its meaning the plural and vice
      versa.

    

    14.          
      Amendment
      and Termination.
      Subject
      to any applicable shareholder approval requirements of Delaware or federal
      law,
      NASDAQ rules or listing standards, or the Code, the Plan may be amended by
      the
      Board of Directors at any time and in any respect, including without limitation
      to permit or facilitate qualification of Options theretofore or thereafter
      granted (a) as Incentive Stock Options under the Code, or (b) for such other
      special tax treatment as may be enacted on or after the date on which the Plan
      is approved by the Board, provided that, without stockholder approval, no
      amendment shall increase the aggregate number of shares which may be issued
      under the Plan, or shall permit the exercise price of outstanding Options or
      Stock Appreciation Rights to be reduced, except as permitted by Section 10
      hereof. The Plan may also be terminated at any time by the Board of Directors.
      No amendment or termination of this Plan shall adversely affect any Award
      granted prior to the date of such amendment or termination without the written
      consent of the holder of such Award. 

    
 

     

    17AMENDMENT TO EMPLOYMENT AGREEMENT  (00127101).DOC

EXHIBIT 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT, is made as of the 23rd day of October, 2006, by and between ALLIED BANCSHARES, INC. AND ITS SUBSIDIARY, FIRST NATIONAL BANK OF FORSYTH COUNTY (hereinafter referred to collectively as the “Employer”), and RICHARD E. BELL (hereinafter referred to as the “Executive”).

W I T N E S S E T H:

WHEREAS, the parties heretofore entered into an Employment Agreement, dated as of July 25, 2003 (the “Agreement”); and

 WHEREAS, the parties desire to amend the Agreement as hereinafter provided.

NOW, THEREFORE, in consideration of the premises hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.

The Agreement is hereby amended by deleting clause (iv) of Section 4(a) thereof in its entirety, and substituting in lieu thereof the following:

(iv)

by the Executive for Good Reason upon delivery of a Notice of Resignation to the Employer within a 12-month period beginning on the date of a Change in Control;

2.

The Agreement is hereby further amended by deleting Section 4(e) thereof in its entirety, and substituting in lieu thereof the following:

(e)

If the Executive’s employment is terminated due to the Executive’s resignation based on a Change in Control pursuant to clause (iv) of Section 4(a), or if Executive’s employment is terminated by the Employer without cause within 12 months following the occurrence of a Change in Control, in addition to other rights and remedies available in law or equity, the Executive shall be entitled to the following:

(i)

Payment  to the Executive of an amount equal to 100% of the Executive’s then current monthly base salary for a period of twelve (12) months from the termination date. 

 

4

(ii)

All stock options and stock appreciation rights granted to the Executive shall become immediately exercisable and shall become 100% vested.

 

(iii)

Payment to the Executive of an amount equal to the Executive’s cost of COBRA health continuation coverage for the Executive under the Employer’s group health plan for a period of twelve (12) months from the termination date.

(iv)

Payment to the Executive for each vacation day not taken by the Executive during the calendar year in which occurs the termination date.    The amount payable for each such unused vacation day shall be determined based on the daily rate of the Executive’s base salary then in effect assuming two hundred  sixty (260) days in each year.

(v)

At the sole discretion of the Employer, the above described severance compensation described in paragraphs (i), (iii) and (iv) above may be paid to the Executive in a single lump sum payment within fifteen (15) days after the termination date, or alternatively, the Employer may elect to make such payments on the first day of each month for twelve months (12) months following the termination date.

3.

The Agreement is hereby further amended by deleting the phrase “so long as he is receiving compensation from the Employer, or for a period of 12 months following termination of the Executive’s employment pursuant to clause (vi) of Section 4(a), whichever period is longer” from the first sentence of Section 6 thereof and from the first sentence of Section 7 thereof.

4.

The Agreement is hereby further amended by deleting Section 9(a) in its entirety and substituting in lieu thereof the following:

(a)

No Solicitation of Customers.  During the Executive’s employment with the Employer, and for a period of 12 months following termination of the Executive’s employment pursuant to clause (iv) or (vi) of Section 4(a) or by the Employer without cause within a 12-month period following a Change of Control, the Executive shall not (except on behalf of or with the prior written consent of the Employer), either directly or indirectly, on the Executive’s own behalf, or in the service of or on behalf of others:  (A) solicit, divert, or appropriate to or for a Competing Business; or (B) attempt to solicit, divert, or appropriate to or for a Competing Business, any person or entity that: (i) was a customer of the Employer on Executive’s Date of Termination; and (ii) is either located in the Territory (as defined below), or is a person or entity with whom the Executive had 

5

material contact while working for Employer (irrespective of that customer’s geographic location).

5.

The Agreement is hereby further amended by deleting Section 9(b) in its entirety and substituting in lieu there of the following:

(b)

No Recruitment of Personnel.  During the Executive’s employment with the Employer and for a period of 12 months following termination of the Executive’s employment pursuant to clause (iv) or (vi) of Section 4(a) or by the Employer without cause within a 12-month period following a Change of Control, the Executive shall not, either directly or indirectly, on the Executive’s own behalf, or in the service of or on behalf of others:  (A) solicit, divert, or hire away; or (B) attempt to solicit, divert or hire away, to any Competing Business located in the Territory, any employee or consultant to the Employer, engaged or experienced in the Business, regardless of whether:  (i) the employee or consultant is full-time or temporary; (ii) the employment or engagement is pursuant to written agreement; or (iii) the employment is for a determined period or is at will.

6.

Except as specifically amended hereby, the Agreement is in all respects ratified and confirmed.

IN WITNESS WHEREOF, the undersigned have executed this Amendment to Employment Agreement on the date first above written.

ALLIED BANCSHARES, INC.

By:_______________________________________

President/CEO

FIRST NATIONAL BANK OF FORSYTH

COUNTY

By:_______________________________________

President

___________________________________(SEAL)

RICHARD E. BELL

6

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