Document:

exv10w32

Exhibit 10.32

*PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Shell Trading

P.O. Box 4604

Houston, TX 77210-4604

VIA FACSIMILE 816-883-1001

March 6, 2008

Enerjex Kansas, Inc.

7300 West 110th Street, 7th Floor

Overland Park, KS 62210

	 	 	 
	Attention: Mr. Steve Cochennet, President

	 	STUSCO Purchase Contract No.: DEA081800
	 

	 	Enerjex Kansas, Inc. Contract No.: 
	 

	 	Contract Date: April 1, 2008

Dear Steve:

     This Agreement is made between Shell Trading (US) Company (STUSCO), “Buyer” and Enerjex
Kansas, Inc. (ENERJEX KANSAS), Seller whereby Seller agrees to sell and deliver and Buyer agrees to
purchase and receive crude oil or condensate under the terms and conditions set forth in Exhibit A
and the Conoco Inc.’s General Provisions dated January 1993 which are incorporated by reference.

     Please confirm by fax to (713) 246-8531, attention Sherry De Alba, that the above accurately
records the terms and conditions of our agreement. If a reply is not received within ten (10)
business days, it will constitute acceptance of the terms stated herein.

	 	 	 	 	 
	 	Very truly yours,

SHELL TRADING (US) COMPANY

 	 
	 	By:  	        /s/ Adam Shaffer
 	 
	 	 	Adam Shaffer 	 
	 	 	Crude Oil Acquisition 	 
	 

	 	 	 	 	 
	ENERJEX KANSAS, INC.	 	 
	 
	 	 	 	 
	By:

	 	        /s/ Steve Cochennet	 	 
	Title:

	 	 

President
	 	 
	Date:

	 	03/06/08	 	 

 

 

*THE PORTIONS OF THIS EXHIBIT A WHICH ARE MARKED WITH AN ASTERISK HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

EXHIBIT A

	 	 	 
	Enerjex Kansas Contact: Steve Cochennet

	 	STUSCO Contact: Adam Shaffer
	Phone: (816) 803-5551

	 	Phone: (713) 230-1917

ENERJEX KANSAS SALE AND DELIVERY TO STUSCO:

QUALITY

Kansas Sweet type Crude Oil.

QUANTITY

Equal to production from the leases listed on Attachment 1, approximately 250 Net U.S. Barrels per
Day.

DELIVERY

At the lease into STUSCO’s designated trucks.

PRICE

FINANCIAL TRANSACTION

The Financial Transactions are listed chronologically by the date the transaction was executed.
The barrels will be priced each month in the same chronological order as applicable.

EFFECTIVE 01 APRIL 2008 THROUGH 30 SEPTEMBER 2009.

Regarding crude production from lease listed on Attachment 1, referenced in STUSCO contract
DEA081800, the first 130 BPD in a given month will be priced at a fixed and flat price of $96.90,
less $* transportation cost = $* Net price.

EFFECTIVE 01 APRIL 2008 THROUGH 30 SEPTEMBER 2009.

REMAINING BALANCE WILL BE PRICED AT:

MAU

The price per barrel shall be the average of the daily settlement price for “Light Sweet Crude Oil”
Prompt Month future contracts reported by the New York Mercantile Exchange (NYMEX) from the first
day of the delivery month through and including the last day of the delivery month, including
weekends and holidays observed by NYMEX.

To the above price a discount of USD $* per Net U.S. barrel shall be applied as listed on
Attachment 1.

1

 

ADDITIONAL CONTRACTUAL ITEMS

PAYMENT:

Pay Terms DB: Paid to individual interest holders, excluding taxes, due on or before the 20th of
the month following the month of delivery.

TAX STATUS A: STUSCO is First (1ST) Purchaser, STUSCO will collect and remit.

TERM:

This Agreement shall commence on 01 April 2008 through 31 September 2009.

ASSIGNMENT:

The Contract shall extend to and be binding upon the successors and assigns of the Parties, but
neither this Contract nor any part, specifically including the right to receive payment, shall be
assigned or transferred by either Party or by law without the prior written consent of the other
Party which shall not be unreasonably withheld, and any assignment or transfer made by either Party
without the other Party’s written consent need not be recognized by and shall not be binding upon
the other Party.

LIMITATION OF LIABILITY:

In no event shall either party be liable for loss of profits or indirect, special, exemplary or
punitive, or consequential damages.

PRICE PROVISION

Shell Trading (US) Company reserves the right to modify the price of this contract following an
increase or decrease based on transportation costs. Price adjustments will be made on the
effective date of the change.

FIXED PRICE PROTECTION

If the parties enter into a Transaction with a Contract Price that is a fixed price, as opposed to
a Contract Price that floats based on industry postings, reference publications, or other external
market factors or indices, for a specified quantity of Crude Oil to be delivered at a specified
Delivery Point for the relevant period, such Fixed Price shall not be subject to change and shall
be deemed to be the first Crude Oil purchased during the applicable Month. If more than one Fixed
Price for different quantities of Crude Oil has been established in a particular Month, then the
first Crude Oil purchased during said Month shall be the first quantities for which a Fixed Price
was established, followed by any additional quantities in the order they were established. If for
any reason whatsoever, including without limitation, an event of Force Majeure or any other
circumstance that would excuse a party’s obligation to deliver or receive Crude Oil (other than a
breach or default by either party under this Contract), Seller delivers, or Buyer takes, less than
the full quantity of Crude Oil required to be delivered or taken at a Fixed Price during any Month
(a “Monthly Deficiency”), then (1) in the case when Buyer takes less than said full quantity of
Crude Oil, Buyer shall pay to Seller an amount equal to (a) such Monthly Deficiency (expressed in
barrel’s) multiplied by (b) the amount, if any, by which the Fixed Price exceeds the applicable
Spot Price (as defined below) for such Month and (2) in the case when Seller delivers less than
said full quantity of Crude Oil, Seller shall pay to Buyer an amount equal to (a) such Monthly
Deficiency (expressed in barrel’s) multiplied by (b) the amount, if any, by which the

2

 

applicable Spot Price for such Month exceeds the applicable Fixed Price. For purposes on this
Section only, “Spot Price” means the price specified in [Platt’s Market Report], as reported in the
first publication for the Month in which such Monthly Deficiency occurred, as adjusted (up or down,
as the case may be) by any incremental transportation costs or savings between the location of the
applicable listing and the Delivery Point(s); provided that, if there is no single published price
for such location, but there is a published range of prices, then the Spot Price shall be the
simple average of the high and low prices. If the above publication ceases to be published during
the term hereof, its successor publication shall be used.

TAX

The total purchase price paid to SELLER by BUYER for crude and/or condensate shall be calculated as
set forth in the Agreement. If Buyer is the first purchaser of the crude and/or condensate, BUYER
shall have the right to withhold from the total purchase price the amount of applicable production
and/or severance taxes and BUYER shall remit to the appropriate taxing authorities said taxes as
withheld from the payment. If the amount of production and/or severance taxes owed to the taxing
authorities is greater than the amount withheld and remitted by BUYER, SELLER agrees to reimburse
BUYER for any excess production and/or severance tax that is required to be remitted to the taxing
authorities.

OTHER TERMS AND CONDITIONS

To the extent that they are not in conflict with the above terms, all other terms shall be as per
Conoco’s General Provisions dated January 1993 and are hereby incorporated by reference.

All the Sections in the General Provisions shall apply except insofar as any such Section is
inconsistent with any of the specific terms herein. For the avoidance of doubt, any repetition
herein of any Section or part of such Section of the General Provisions shall be for emphasis only
and shall not by reason of such repetition exclude any other part of such Section or any other
Section, or any part thereof, of the General Provisions.

	 	 	 
	CONTRACTUAL CONTACT:
	NAME:

	 	Sherry De Alba
	TELEPHONE NO:

	 	713-230-3227
	FAX NO:

	 	713-246-8531
	 
	 	 
	CREDIT CONTACT:
	Counterparties (A-L)
	NAME:

	 	Saud Qazi
	TELEPHONE NO:

	 	713-230-7832
	FAX NO:

	 	713-230-7925
	EMAIL

	 	saud.qazi@shell.com
	 
	 	 
	Counterparties (M-Z) NAME:
	NAME:

	 	Steve Clarke
	TELEPHONE NO:

	 	713-767-5336
	FAX NO:

	 	713-230-7925
	EMAIL

	 	steve.s.clarke@shell.com

3

 

	 	 	 
	INVOICING CONTACT:
	NAME:

	 	Ken Currens
	TELEPHONE NO:

	 	713-230-3410
	FAX NO:

	 	713-230-5150
	EMAIL

	 	ken.currens@shell.com
	 
	 	 
	MSDS CONTACT:
	NAME: ST

	 	USCO HSE Department
	FAX NO:

	 	713-246-8941
	EMAIL:

	 	HSE-Shell-Trading -NA@SHELL.com

4

 

	 	 	 	 	 	 	 
	CUSTOMER NAME:

	 	ENERJEX KANSAS, INC
	 	SHELL TRADING (US) COMPANY
	STUSCO CONTRACT:

	 	DEA081800
	 	 
	AMENDMENT:

	 	000	 	 	 	ATTACHMENT 1
	EFFECTIVE:

	 	APRIL 01, 2008 THRU SEPTEMBER 30, 2009
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LEASE	 	LEASE	 	 	 	 	 	 	 	 	 	PRICE	 	PLUS/LESS	 	DECIMAL	 	PAYMENT	 	TAX
	HEADER	 	NUMBER	 	PROPERTY NAME	 	COUNTY	 	STATE	 	OPERATOR	 	BASIS	 	$//BBL.	 	INTEREST	 	TERMS	 	STATUS
	 
	0
	 	14849	 	EASTBURN, J	 	ANDERSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98855	 	BAILEY KREITLER	 	ANDERSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98856	 	JOHNSTON	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98857	 	DALTON	 	GREENWOOD	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98858	 	DYE	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98860	 	EAST KIMBELL	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98861	 	E R KIMBELL H O	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98862	 	OLD RHEA	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98864	 	ANDERBERG-SKAGGS	 	JOHNSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98865	 	THOREN	 	DOUGLAS	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98866	 	BURKS	 	JOHNSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98867	 	CARTER A	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98868	 	CARTER B	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98869	 	SCHLAGEL	 	JOHNSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98870	 	NEEDHAM	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98871	 	ORSER	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98872	 	DREHER	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98873	 	VOIGHTS	 	JOHNSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98874	 	HOWELL-FEE	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98875	 	RUSSELL	 	FRANKLIN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98876	 	WEIDEMIER	 	JOHNSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98877	 	BROWNRIGG A	 	LINN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98879	 	BROWNRIGG B	 	LINN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98880	 	SHIKLES	 	LINN	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98881	 	HOWELL-GORGES	 	MIAMI	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98882	 	ESTES	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98883	 	E R KIMBELL	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98884	 	N KNOX	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98885	 	RHEA A	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A
	0
	 	98886	 	SMITH-JOBE	 	WOODSON	 	KS	 	ENERJEX KANSAS, INC.	 	MAU	 	*	 	 	1.0000000	 	 	DB	 	A

 

			
	*	 	OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 

FINANCIAL TRANSACTION

The Financial Transactions are listed chronologically by the date the transaction was executed.
The barrels will be priced each month in the same chronological order as applicable.

EFFECTIVE 01 APRIL 2008 THROUGH 30 SEPTEMBER 2009.

Regarding crude production from lease listed above, referenced in STUSCO contract DEA081800. the
first 130 BPD in a given month will be priced at a fixed and flat price of $96.90, less $*
transportation cost = $* Net price.

 

			
	*	 	OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

EFFECTIVE 01 APRIL 2008 THROUGH 30 SEPTEMBER 2009.

REMAINING BALANCE WILL BE PRICED AT:

MAU

The price per barrel shall be the average of the daily settlement price for “Light Sweet Crude Oil”
Prompt Month future contracts reported by the New York Mercantile Exchange (NYMEX) from the first
day of the delivery month through and including the last day of the delivery month, including
weekends and holidays observed by NYMEX.

To the above price a discount of USD $* per Net U.S. barrel shall be applied as listed on
Attachment 1..

 

			
	*	 	OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

PAYMENT TERMS

CI = BY STUSCO TO SELLER AFTER RECEIPT OF INV

DA = BY STUSCO TO SELLER

DB = BY STUSCO TO INDIVIDUAL INTEREST OWNERS

MX = BY STUSCO TO SELLER

TAX STATUS

A = STUSCO IS 1ST PURCHASER, STUSCO WILL COLLECT & REMIT

B = TO BE PAID BY SELLER

C = STUSCO WILL COLLECT AND REMIT APPLICABLE TAXES

D = TO BE PAID BY SELLER

E = PURCHASER REQUIRED TAXES ARE TO BE PAID BY STUSCOexv10w1

 

    Exhibit 10.1

 

 

    ECHO
    THERAPEUTICS, INC.

    2008 EQUITY INCENTIVE PLAN

 

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 
	
    Page

	 

	

    Section 1
    

	
 
	
    —
	
 
	
    PURPOSE
	
 
	
    1

	

    Section 2
    

	
 
	
    —
	
 
	
    DEFINITIONS
	
 
	
    1

	

    Section 3
    

	
 
	
    —
	
 
	
    ADMINISTRATION
	
 
	
    2

	

    Section 4
    

	
 
	
    —
	
 
	
    STOCK
	
 
	
    3

	

    Section 5
    

	
 
	
    —
	
 
	
    GRANTING OF AWARDS
	
 
	
    3

	

    Section 6
    

	
 
	
    —
	
 
	
    TERMS AND CONDITIONS OF OPTIONS
	
 
	
    3

	

    Section 7
    

	
 
	
    —
	
 
	
    RESTRICTED STOCK
	
 
	
    5

	

    Section 8
    

	
 
	
    —
	
 
	
    AWARD AGREEMENTS
	
 
	
    5

	

    Section 9
    

	
 
	
    —
	
 
	
    ADJUSTMENT IN CASE OF CHANGES IN COMMON STOCK
	
 
	
    6

	

    Section 10
    

	
 
	
    —
	
 
	
    CHANGE IN CONTROL
	
 
	
    6

	

    Section 11
    

	
 
	
    —
	
 
	
    CERTAIN CORPORATE TRANSACTIONS
	
 
	
    7

	

    Section 12
    

	
 
	
    —
	
 
	
    AMENDMENT OF THE PLAN AND OUTSTANDING AWARDS
	
 
	
    7

	

    Section 13
    

	
 
	
    —
	
 
	
    TERMINATION OF PLAN; CESSATION OF ISO GRANTS
	
 
	
    7

	

    Section 14
    

	
 
	
    —
	
 
	
    MISCELLANEOUS
	
 
	
    7

    

    i

 

    ECHO
    THERAPEUTICS, INC.

    2008 EQUITY INCENTIVE PLAN

 

    WHEREAS, Echo Therapeutics, Inc. (the “Company”)
    hereby wishes to adopt the Echo Therapeutics, Inc. 2008 Equity
    Incentive Plan (the “Plan”);

 

    NOW, THEREFORE, effective as of April 1, 2008, the Plan is
    hereby adopted under the following terms and conditions:

 

    Section 1 —
    PURPOSE

 

    The Plan is intended to provide a means whereby the Company may,
    through the grant of Awards to Employees, Consultants and
    Non-Employee Directors, attract and retain such individuals and
    motivate them to exercise their best efforts on behalf of the
    Company and of any Related Corporation.

 

    Section 2 —
    DEFINITIONS

 

    The following terms, when used herein, shall have the following
    meanings unless otherwise required by the context:

 

    (a) “Award” shall mean an ISO, an
    NQSO or shares of Restricted Stock awarded by the Company to an
    Employee, a Consultant or a Non-Employee Director.

 

    (b) “Award Agreement” shall mean a
    written document evidencing the grant of an Award, as described
    in Section 8.

 

    (c) “Board” shall mean the Board of
    Directors of the Company.

 

    (d) “Code” shall mean the Internal
    Revenue Code of 1986, as amended.

 

    (e) “Committee” shall mean a
    committee which consists solely of not fewer than two directors
    of the Company who shall be appointed by, and serve at the
    pleasure of, the Board (taking into consideration the rules
    under Section 16(b) of the Exchange Act and the
    requirements of Code § 162(m)). In the event a
    committee has not been established, the entire Board shall be
    the Committee.

 

    (f) “Common Stock” shall mean the
    common stock of the Company, par value $0.01 per share.

 

    (g) “Company” shall mean Echo
    Therapeutics, Inc., a Minnesota corporation.

 

    (h) “Consultant” shall mean an
    individual who is not an Employee or a Non-Employee Director and
    who has entered into a consulting arrangement with the Company
    or a Related Corporation to provide bona fide services
    that (i) are not in connection with the offer or sale of
    securities in a capital-raising transaction, and (ii) do
    not directly or indirectly promote or maintain a market for the
    Company’s securities.

 

    (i) “Employee” shall mean an
    officer or other employee of the Company or a Related
    Corporation.

 

    (j) “Exchange Act” shall mean the
    Securities Exchange Act of 1934, as amended.

 

    (k) “Fair Market Value” shall mean
    the fair market value of a share of Common Stock, arrived at by
    a determination of the Committee under a method that complies
    with Code § 422 (for ISOs) or Code § 409A
    (for NQSOs) and any rules and regulations under such sections,
    and that is adopted by the Committee. Fair Market Value shall be
    determined without regard to any “lapse restrictions,”
    as defined in Treas. Reg. § 1.83-3(i) or any successor
    thereto.

 

    (l) “Grantee” shall mean an
    Employee, a Consultant or a Non-Employee Director who has been
    granted an Award under the Plan.

 

    (m) “ISO” shall mean an Option
    which, at the time such Option is granted, qualifies as an
    incentive stock option within the meaning of Code
    § 422, unless the Award Agreement states that the
    Option will not be treated as an ISO.

 

    (n) “Non-Employee Director” shall
    mean a director of the Company who is not an Employee.

    

    1

 

    (o) “NQSO” shall mean an Option
    which, at the time such Option is granted, does not qualify as
    an ISO, whether or not it is designated as a nonqualified stock
    option in the Award Agreement.

 

    (p) “Option” shall mean an ISO or
    an NQSO, in either case which entitles the Grantee on exercise
    thereof to purchase shares of Common Stock at a specified
    exercise price.

 

    (q) “Plan” shall mean the Echo
    Therapeutics, Inc. 2008 Equity Incentive Plan as set forth
    herein.

 

    (r) “Related Corporation” shall
    mean either a “subsidiary corporation” of the Company,
    as defined in Code § 424(f), or the “parent
    corporation” of the Company, as defined in Code
    § 424(e).

 

    (s) “Restricted Stock” shall mean
    Common Stock subject to restrictions determined by the Committee
    pursuant to Section 7.

 

    (t) “Termination of Service” shall
    mean (i) with respect to an Award granted to an Employee,
    the termination of the employment relationship between the
    Employee and the Company and all Related Corporations;
    (ii) with respect to an Award granted to a Consultant, the
    termination of the consulting or advisory arrangement between
    the Consultant and the Company and all Related Corporations; and
    (iii) with respect to an Award granted to a Non-Employee
    Director, the cessation of the provision of services as a
    director of the Company and all Related Corporations; provided,
    however, that if the Grantee’s status changes from
    Employee, Consultant or Non-Employee Director to any other
    status eligible to receive an Award under the Plan, the
    Committee (subject to Section 12) may provide that no
    Termination of Service occurs for purposes of the Plan until the
    Grantee’s new status with the Company and all Related
    Corporations terminates. For purposes of this subsection, if a
    Grantee is an Employee, Consultant or Non-Employee Director of a
    Related Corporation and not the Company, the Grantee shall incur
    a Termination of Service when such corporation ceases to be a
    Related Corporation, unless the Committee determines otherwise.
    A Termination of Service shall not be deemed to have resulted by
    reason of a bona fide leave of absence approved by the Committee.

 

    Section 3 —
    ADMINISTRATION

 

    The Plan shall be administered by the Committee. Each member of
    the Committee, while serving as such, shall be deemed to be
    acting in his or her capacity as a director of the Company. The
    Committee shall have full authority, subject to the terms of the
    Plan, to select the Employees, Consultants and Non-Employee
    Directors to be granted Awards under the Plan, to grant Awards
    on behalf of the Company, and to set the date of grant and the
    other terms of such Awards in accordance with the terms of the
    Plan. The Committee may correct any defect, supply any omission,
    and reconcile any inconsistency in the Plan and in any Award
    granted hereunder, in the manner and to the extent it deems
    desirable. The Committee also shall have the authority
    (i) to establish such rules and regulations, not
    inconsistent with the provisions of the Plan, for the proper
    administration of the Plan, and to amend, modify or rescind any
    such rules and regulations, (ii) to adopt modifications,
    amendments, procedures,
    sub-plans
    and the like, which may be inconsistent with the provisions of
    the Plan, as are necessary to comply with the laws and
    regulations of other countries in which the Company operates in
    order to assure the viability of Awards granted under the Plan
    to individuals in such other countries, and (iii) to make
    such determinations and interpretations under, or in connection
    with, the Plan, as it deems necessary or advisable. All such
    rules, regulations, determinations and interpretations shall be
    binding and conclusive upon the Company, its shareholders and
    all Grantees, upon their respective legal representatives,
    beneficiaries, successors and assigns, and upon all other
    persons claiming under or through any of them. Except as
    otherwise required by the bylaws of the Company or by applicable
    law, no member of the Board or the Committee shall be liable for
    any action or determination made in good faith with respect to
    the Plan or any Award granted under it. In addition to the
    Committee, subject to the restrictions in Sections 6 and 7
    below, and to the extent permitted by applicable law, the Board
    may delegate to one or more executive officers of the Company
    (who are also Board members) the power to grant Awards and
    exercise such other powers under the Plan as the Board may
    determine; provided, that the Board shall fix the maximum number
    of Awards to be granted by such executive officers and the
    maximum number of shares issuable to any one Participant
    pursuant to Awards granted by such executive officers.

    

    2

 

    Section 4 —
    STOCK

 

    The maximum aggregate number of shares of Common Stock that may
    be delivered under the Plan is 1,700,000 shares (which is
    also the maximum aggregate number of shares that may be issued
    under the Plan through ISOs), subject to adjustment, as
    described in Section 9. Shares delivered under the Plan may
    be authorized but unissued shares or reacquired shares, and the
    Company may purchase shares required for this purpose on the
    open market, from time to time, if it deems such purchase to be
    advisable. Further, the maximum number of shares with respect to
    which Awards may be granted to any Employee under the Plan may
    not exceed 425,000 Shares per fiscal year of the Company.

 

    If any Award expires, terminates for any reason, is cancelled,
    or is forfeited, the number of shares of Common Stock with
    respect to which such Award expired, terminated, was cancelled,
    or was forfeited, shall continue to be available for future
    Awards granted under the Plan. If any Option is exercised by
    surrendering Common Stock to the Company or by withholding
    Common Stock as full or partial payment, or if tax withholding
    requirements are satisfied by surrendering Common Stock to the
    Company or by withholding Common Stock, only the number of
    shares issued net of Common Stock withheld or surrendered shall
    be deemed delivered for purposes of determining the maximum
    number of shares that remain available for grant under the Plan.

 

    Section 5 —
    GRANTING OF AWARDS

 

    The Committee may, on behalf of the Company, grant to Employees,
    Consultants and Non-Employee Directors such Awards as it, in its
    sole discretion, determines are warranted. However, Consultants
    and Non-Employee Directors shall not be eligible to receive ISOs
    under the Plan. More than one Award may be granted to an
    Employee, Consultant or Non-Employee Director under the Plan.

 

    Section 6 —
    TERMS AND CONDITIONS OF OPTIONS

 

    Options shall include expressly or by reference the following
    terms and conditions as well as such other provisions as the
    Committee shall deem desirable that do not cause the Option to
    be subject to Code § 409A and that are not
    inconsistent with the provisions of the Plan and, for ISOs, Code
    § 422(b). The Board may delegate to a committee of the
    Board consisting of one or more Board members, who may be or
    include the Company’s Chief Executive Officer (the
    “CEO”) while the CEO is a member of the Board, the
    right to grant Options for compensation purposes, subject to the
    limits described in the last sentence of Section 3. Any
    such delegation to a separate committee of the Board shall be
    set forth in a resolution duly adopted by the Board.
    Notwithstanding the aforementioned, such committee of the Board
    may not grant an Option to the CEO if the committee is or
    includes the CEO.

 

    (a) Number of Shares.  The Award
    Agreement shall state the number of shares of Common Stock to
    which the Option pertains.

 

    (b) Exercise Price.  The Award
    Agreement shall state the exercise price which shall be
    determined and fixed by the Committee in its discretion, but the
    exercise price shall not be less than the higher of
    100 percent (110 percent in the case of an ISO granted
    to a more-than-10-percent shareholder, as provided in
    subsection (i) below) of the Fair Market Value of a share
    of Common Stock on the date the Option is granted, or the par
    value thereof.

 

    (c) Term.  The term of each Option
    shall be determined by the Committee, in its discretion;
    provided, however, that the term of each ISO shall be not more
    than 10 years (five years in the case of a
    more-than-10-percent shareholder, as provided in
    subsection (i) below) from the date of grant of the ISO.
    Each Option shall be subject to earlier termination as provided
    in subsections (f), (g), and (h) below and in
    Section 11.

 

    (d) Exercise.  An Option shall be
    exercisable in such installments, upon fulfillment of such
    conditions (such as performance-based requirements), or on such
    dates as the Committee may specify. The Committee may accelerate
    the exercise date of an outstanding Option, in its discretion,
    if the Committee deems such acceleration to be desirable.

 

    Any exercisable Option may be exercised at any time up to the
    expiration or termination of the Option. Exercisable Options may
    be exercised, in whole or in part and from time to time, by
    giving notice of exercise to the Company at its principal
    office, specifying the number of shares to be purchased and
    accompanied by payment in

    

    3

 

    full of the aggregate exercise price for such shares. Only full
    shares shall be issued, and any fractional share which might
    otherwise be issuable upon exercise of an Option shall be
    forfeited.

 

    The Committee, in its sole discretion, shall determine from the
    following alternatives the methods by which the exercise price
    may be paid:

 

    (1) in cash or, if permitted by the Committee, its
    equivalent;

 

    (2) in shares of Common Stock previously acquired by the
    Grantee;

 

    (3) in shares of Common Stock newly acquired by the Grantee
    upon exercise of such Option (which shall constitute a
    disqualifying disposition in the case of an ISO);

 

    (4) by delivering a properly executed notice of exercise of
    the Option to the Company and a broker, with irrevocable
    instructions to the broker promptly to deliver to the Company
    the amount of sale or loan proceeds necessary to pay the
    exercise price of the Option;

 

    (5) if the Committee so determines, at the date of grant in
    the case of an ISO, or at or after the date of grant in the case
    of an NQSO, and if the Optionee thereafter so requests,
    (i) the Company will loan the Optionee the money required
    to pay the exercise price of the Option; (ii) any such loan
    to an Optionee shall be made only at the time the Option is
    exercised; and (iii) the loan will be made on the
    Optionee’s personal, negotiable, full recourse promissory
    note, bearing interest at the lowest rate which will avoid the
    imputation of interest under Code § 7872, with a
    pledge of the Common Stock acquired upon exercise, and including
    such other terms as the Committee may prescribe; or

 

    (6) in any combination of paragraphs (1), (2), (3),
    (4) and (5) above.

 

    In the event the exercise price is paid, in whole or in part,
    with shares of Common Stock, the portion of the exercise price
    so paid shall be equal to the aggregate Fair Market Value
    (determined as of the date of exercise of the Option) of the
    Common Stock used to pay the exercise price.

 

    (e) ISO Annual Limit.  The
    aggregate Fair Market Value (determined as of the date the ISO
    is granted) of the Common Stock with respect to which ISOs are
    exercisable for the first time by an Employee during any
    calendar year (counting ISOs under this Plan and under any other
    stock option plan of the Company or a Related Corporation) shall
    not exceed $100,000. If an Option intended as an ISO is granted
    to an Employee and the Option may not be treated in whole or in
    part as an ISO pursuant to the $100,000 limit, the Option shall
    be treated as an ISO to the extent it may be so treated under
    the limit and as an NQSO as to the remainder. For purposes of
    determining whether an ISO would cause the limitation to be
    exceeded, ISOs shall be taken into account in the order granted.

 

    (f) Termination of Service for a Reason Other Than
    Death or Disability.  If a Grantee’s
    Termination of Service occurs prior to the expiration date fixed
    for his or her Option for any reason other than death or
    disability, such Option may be exercised by the Grantee at any
    time prior to the earlier of (i) the expiration date
    specified in the Award Agreement, or (ii) three months
    after the date of such Termination of Service (unless the Award
    Agreement provides a different expiration date in the case of
    such a termination). Such Option may be exercised to the extent
    of the number of shares with respect to which the Grantee could
    have exercised it on the date of such Termination of Service, or
    to any greater extent permitted by the Committee, and shall
    terminate with respect to the remaining shares.

 

    (g) Disability.  If a Grantee
    becomes disabled (within the meaning of Code
    § 22(e)(3)) prior to the expiration date fixed for his
    or her Option, and the Grantee’s Termination of Service
    occurs as a consequence of such disability, such Option may be
    exercised by the Grantee at any time prior to the earlier of
    (i) the expiration date specified in the Award Agreement,
    or (ii) one year after the date of such Termination of
    Service (unless the Award Agreement provides a different
    expiration date in the case of such a termination). Such Option
    may be exercised to the extent of the number of shares with
    respect to which the Grantee could have exercised it on the date
    of such Termination of Service, or to any greater extent
    permitted by the Committee, and shall terminate with respect to
    the remaining shares. In the event of the Grantee’s legal
    disability, such Option may be exercised by the Grantee’s
    legal representative.

    

    4

 

    (h) Death.  If a Grantee’s
    Termination of Service occurs as a result of death prior to the
    expiration date fixed for his or her Option, or if the Grantee
    dies following his or her Termination of Service but prior to
    the expiration of the period determined under
    subsection (f) or subsection (g) above (including any
    extension of such period provided in the Award Agreement), such
    Option may be exercised by the Grantee’s estate, personal
    representative, or beneficiary who acquired the right to
    exercise such Option by bequest or inheritance or by reason of
    the death of the Grantee. Such post-death exercise may occur at
    any time prior to the earlier of (i) the expiration date
    specified in the Award Agreement, or (ii) one year after
    the date of the Grantee’s death (unless the Award Agreement
    provides a different expiration date in the case of death). Such
    Option may be exercised to the extent of the number of shares
    with respect to which the Grantee could have exercised it on the
    date of his or her death, or to any greater extent permitted by
    the Committee, and shall terminate with respect to the remaining
    shares.

 

    (i) More-Than-10-Percent
    Shareholder.  If, after applying the
    attribution rules of Code § 424(d), the Grantee owns
    stock possessing more than 10 percent of the total combined
    voting power of all classes of stock of the Company or of a
    Related Corporation immediately before an ISO is granted to him
    or her, the exercise price for the ISO shall be not less than
    110 percent of the Fair Market Value of the optioned shares
    of Common Stock on the date the ISO is granted, and such ISO, by
    its terms, shall not be exercisable after the expiration of five
    years from the date the ISO is granted. The conditions set forth
    in this subsection shall not apply to NQSOs.

 

    Section 7 —
    RESTRICTED STOCK

 

    (a) General
    Requirements.  Restricted Stock may be issued
    or transferred for consideration or for no consideration, as
    determined by the Committee. If for consideration, payment may
    be in cash or check (acceptable to the Committee), bank draft,
    or money order payable to the order of the Company. The Board
    may delegate to a committee of the Board consisting of one or
    more Board members, who may be or include the CEO while the CEO
    is a member of the Board, the right to grant Restricted for
    compensation purposes, subject to the limits described in the
    last sentence of Section 3. Any such delegation to a
    separate committee of the Board shall be set forth in a
    resolution duly adopted by the Board. Notwithstanding the
    aforementioned, such committee of the Board may not grant
    Restricted Stock to the CEO if the committee is or includes the
    CEO.

 

    (b) Shareholder Rights.  Each
    Grantee who receives Restricted Stock shall have all of the
    rights of a shareholder with respect to such shares, subject to
    the restrictions set forth in subsection (c) below,
    including the right to vote the shares and receive dividends and
    other distributions. Any shares of Common Stock or other
    securities received by a Grantee with respect to a share of
    Restricted Stock as a stock dividend, or in connection with a
    stock split or combination, share exchange or other
    recapitalization, shall have the same status and be subject to
    the same restrictions as such Restricted Stock. Any cash
    dividends with respect to a Grantee’s Restricted Stock
    shall be paid to the Grantee at the same time as such dividends
    are paid to other shareholders. Unless the Committee determines
    otherwise, certificates evidencing shares of Restricted Stock
    will remain in the possession of the Company until such shares
    are free of all restrictions under the Plan and the Grantee has
    satisfied any federal, state and local tax withholding
    obligations applicable to such shares.

 

    (c) Restrictions.  Except as
    otherwise specifically provided in the Plan, Restricted Stock
    may not be sold, assigned, transferred, pledged, or otherwise
    encumbered or disposed of, and if the Grantee incurs a
    Termination of Service for any reason, must be offered to the
    Company for purchase for the amount paid for the shares of
    Common Stock, or forfeited to the Company if nothing was so paid.

 

    (d) Lapse of Restrictions.  The
    restrictions described in subsection (c) above shall lapse
    at such time or times, and on such conditions (such as
    performance-based requirements), as the Committee may specify.

 

    (e) Notice of Tax Election.  Any
    Grantee making an election under Code § 83(b) for the
    immediate recognition of income attributable to the award of
    Restricted Stock must provide a copy thereof to the Company
    within 10 days of the filing of such election with the
    Internal Revenue Service.

 

    Section 8 —
    AWARD AGREEMENTS

 

    Awards granted under the Plan shall be evidenced by Award
    Agreements in such form as the Committee shall from time to time
    approve, and containing such provisions as the Committee shall
    deem advisable that are not inconsistent with the provisions of
    the Plan, Code § 409A and, for ISOs, Code
    § 422(b). The Award Agreements

    

    5

 

    shall specify the type of Award granted. Each Grantee shall
    enter into, and be bound by, an Award Agreement as soon as
    practicable after the grant of an Award.

 

    Section 9 —
    ADJUSTMENT IN CASE OF CHANGES IN COMMON STOCK

 

    The following shall be adjusted to reflect any stock dividend,
    stock split, reverse stock split, spin-off, distribution,
    recapitalization, share combination or reclassification, or
    similar change in the capitalization of the Company:

 

    (a) The maximum number and type of shares under the limit
    set forth in Section 4; and

 

    (b) The number and type of shares issuable upon exercise or
    vesting of outstanding Options under the Plan (as well as the
    option price per share under outstanding Options); provided,
    however, that (i) no such adjustment shall be made to an
    outstanding ISO if such adjustment would constitute a
    modification under Code § 424(h), unless the Grantee
    consents to such adjustment, and (ii) no such adjustment
    shall be made to an outstanding Option if such adjustment would
    cause the Option to be subject to Code § 409A.

 

    In the event any such change in capitalization cannot be
    reflected in a straight mathematical adjustment of the number of
    shares issuable upon the exercise or vesting of outstanding
    Options, the Committee shall make such adjustments as are
    appropriate to reflect most nearly such straight mathematical
    adjustment. Such adjustments shall be made only as necessary to
    maintain the proportionate interest of Grantees, and preserve,
    without exceeding, the value of Awards. For purposes of this
    Section, Restricted Stock shall be treated in the same manner as
    issued shares of Common Stock not subject to restrictions.

 

    Section 10 —
    CHANGE IN CONTROL

 

    (a) Full Vesting.  Notwithstanding
    any other Section of this Plan, outstanding Restricted Stock
    shall become fully vested and outstanding Options shall become
    fully vested and exercisable upon a Change in Control unless the
    Award Agreement evidencing such Awards provides otherwise.
    However, this Section shall not increase the extent to which an
    Award is vested or exercisable if the Grantee’s Termination
    of Service occurs prior to the Change in Control.

 

    (b) Definition.  “Change in
    Control” means the date on which any of the following
    events occur:

 

    (1) Any person (a “Person”), as such term is used
    in Sections 13(d) and 14(d) of the Exchange Act (other than
    (i) the Company
    and/or its
    wholly owned subsidiaries; (ii) any “employee stock
    ownership plan” (as that term is defined in Code
    § 4975(e)(7)) or other employee benefit plan of the
    Company and any trustee or other fiduciary in such capacity
    holding securities under such plan; (iii) any corporation
    owned, directly or indirectly, by the shareholders of the
    Company in substantially the same proportions as their ownership
    of stock of the Company; or (iv) any other Person who,
    within the one year prior to the event which would otherwise be
    a Change in Control, is an executive officer of the Company or
    any group of Persons of which he or she voluntarily is a part),
    is or becomes the “beneficial owner” (as defined in
    Rule 13d-3
    under the Exchange Act), directly or indirectly, of securities
    of the Company representing 50% or more of the combined voting
    power of the Company’s then outstanding securities;

 

    (2) During any two-year period after the effective date of
    this Plan, directors of the Company in office at the beginning
    of such period plus any new director (other than a director
    designated by a Person who has entered into an agreement with
    the Company to effect a transaction within the purview of
    paragraph (1) above or paragraph (3) below) whose
    election by the Board or whose nomination for election by the
    Company’s shareholders was approved by a vote of at least
    two-thirds of the directors then still in office who either were
    directors at the beginning of the period or whose election or
    nomination for election was previously so approved, shall cease
    for any reason to constitute at least a majority of the Board;

 

    (3) The consummation of (i) any consolidation or
    merger of the Company in which the Company is not the continuing
    or surviving corporation or pursuant to which the Company’s
    common stock would be converted into cash, securities
    and/or other
    property, other than a merger of the Company in which holders of
    common stock immediately prior to the merger have the same
    proportionate ownership of voting securities of the surviving
    corporation immediately after the merger as they had in the
    common stock immediately before;

    

    6

 

    or (ii) any sale, lease, exchange, or other transfer (in
    one transaction or a series of related transactions) of all or
    substantially all the assets or earning power of the
    Company; or

 

    (4) The Company’s shareholders or the Board shall
    approve the liquidation or dissolution of the Company.

 

    Section 11 —
    CERTAIN CORPORATE TRANSACTIONS

 

    In the event of a corporate transaction (such as, for example, a
    merger, consolidation, acquisition of property or stock,
    separation, reorganization, or liquidation), the surviving or
    successor corporation shall assume each outstanding Award or
    substitute a new award of the same type for each outstanding
    Award; provided, however, that, in the event of a proposed
    corporate transaction, the Committee may terminate all or a
    portion of the outstanding Awards, effective upon the closing of
    the corporate transaction, if it determines that such
    termination is in the best interests of the Company. If the
    Committee decides so to terminate outstanding Options, the
    Committee shall give each Grantee holding an Option to be
    terminated not less than seven days’ notice prior to any
    such termination, and any Option which is to be so terminated
    may be exercised (if and only to the extent that it is then
    exercisable under the terms of the Award Agreement and
    Section 10) up to, and including the date immediately
    preceding such termination. Further, the Committee may in its
    discretion accelerate, in whole or in part, the date on which
    any or all Awards become exercisable or vested (to the extent
    such Award is not fully exercisable or vested pursuant to the
    Award Agreement or Section 10).

 

    The Committee also may, in its discretion, change the terms of
    any outstanding Award to reflect any such corporate transaction,
    provided that (i) in the case of ISOs, such change would
    not constitute a “modification” under Code
    § 424(h), unless the Grantee consents to the change,
    and (ii) no such adjustment shall be made to an outstanding
    Option if such adjustment would cause the Option to become
    subject to Code § 409A.

 

    Section 12 —
    AMENDMENT OF THE PLAN AND OUTSTANDING AWARDS

 

    The Board, pursuant to resolution, may amend or suspend the
    Plan, and, except as provided below, the Committee may amend an
    outstanding Award in any respect whatsoever and at any time;
    provided, however, that the following amendments shall require
    the approval of shareholders:

 

    (1) A change in the class of employees eligible to
    participate in the Plan with respect to ISOs; and

 

    (2) Except as permitted under Section 9, an increase
    in the maximum number of shares of Common Stock with respect to
    which ISOs may be granted under the Plan.

 

    If the Fair Market Value of Common Stock subject to an Option
    has declined since the Option was granted, the Committee, in its
    sole discretion, may reduce the exercise price (or the amount
    over which appreciation is measured) of any (or all) such
    Option(s), or cancel any (or all) such Option(s) in exchange for
    cash or the grant of new Awards; provided that any such
    reduction or cancellation and re-grant does not cause the Option
    to become subject to Code § 409A. Except as provided
    in Section 11, no amendment or suspension of an outstanding
    Award shall (i) adversely affect the rights of the Grantee
    or cause the modification (within the meaning of Code
    § 424(h)) of an ISO, without the consent of the
    Grantee affected thereby, or (ii) cause an Option to become
    subject to Code § 409A.

 

    Section 13 —
    TERMINATION OF PLAN; CESSATION OF ISO GRANTS

 

    The Board, pursuant to resolution, may terminate the Plan at any
    time and for any reason. No ISOs shall be granted hereunder
    after the
    10th
    anniversary of the date the Plan was adopted or the date the
    Plan was approved by the shareholders of the Company, whichever
    was earlier. Nothing contained in this Section, however, shall
    terminate or affect the continued existence of rights created
    under Awards granted hereunder which are outstanding on the date
    the Plan is terminated and which by their terms extend beyond
    such date.

 

    Section 14 —
    MISCELLANEOUS

 

    (a) Effective Date.  This Plan
    shall become effective on April 1, 2008; provided, however,
    that if the Plan is not approved by the shareholders of the
    Company within 12 months before or after the date the Plan
    is adopted by the Board, all ISOs granted hereunder shall be
    null and void and no additional ISOs shall be granted hereunder.

    

    7

 

    (b) Rights.  Neither the adoption
    of the Plan nor any action of the Board or the Committee shall
    be deemed to give any individual any right to be granted an
    Award, or any other right hereunder, unless and until the
    Committee shall have granted such individual an Award, and then
    his or her rights shall be only such as are provided in the
    Award Agreement. Notwithstanding any provisions of the Plan or
    the Award Agreement with an Employee, the Company and any
    Related Corporation shall have the right, in its discretion but
    subject to any employment contract entered into with the
    Employee, to retire the Employee at any time pursuant to its
    retirement rules or otherwise to terminate his or her employment
    at any time for any reason whatsoever, or for no reason. A
    Grantee shall have no rights as a shareholder with respect to
    any shares covered by his or her Award until the issuance of a
    stock certificate to him or her for such shares, except as
    otherwise provided under Section 7(b) (regarding Restricted
    Stock).

 

    (c) Indemnification of Board and
    Committee.  Without limiting any other rights
    of indemnification which they may have from the Company and any
    Related Corporation, the members of the Board and the members of
    the Committee shall be indemnified by the Company against all
    costs and expenses reasonably incurred by them in connection
    with any claim, action, suit, or proceeding to which they or any
    of them may be a party by reason of any action taken or failure
    to act under, or in connection with, the Plan, or any Award
    granted hereunder, and against all amounts paid by them in
    settlement thereof (provided such settlement is approved by
    legal counsel selected by the Company) or paid by them in
    satisfaction of a judgment in any such action, suit, or
    proceeding, except a judgment based upon a finding of willful
    misconduct or recklessness on their part. Upon the making or
    institution of any such claim, action, suit, or proceeding, the
    Board or Committee member shall notify the Company in writing,
    giving the Company an opportunity, at its own expense, to handle
    and defend the same before such Board or Committee member
    undertakes to handle it on his or her own behalf. The provisions
    of this Section shall not give members of the Board or the
    Committee greater rights than they would have under the
    Company’s by-laws or the applicable law of the
    Company’s jurisdiction of incorporation.

 

    (d) Transferability;
    Registration.  No ISO or Restricted Stock
    shall be assignable or transferable by the Grantee other than by
    will or by the laws of descent and distribution. During the
    lifetime of the Grantee, an ISO shall be exercisable only by the
    Grantee or, in the event of the Grantee’s legal disability,
    by the Grantee’s guardian or legal representative. Except
    as provided in a Grantee’s Award Agreement, such limits on
    assignment, transfer and exercise shall also apply to NQSOs.

 

    If the Grantee so requests at the time of exercise of an Option
    or at the time of grant of Restricted Stock, the certificate(s)
    shall be registered in the name of the Grantee and the
    Grantee’s spouse jointly, with right of survivorship.

 

    (e) Deferrals.  The Committee may
    permit or require Grantees to defer receipt of any Common Stock
    issuable upon the lapse of the restriction period applicable to
    Restricted Stock, subject to such rules and procedures as it may
    establish, which may include provisions for the payment or
    crediting of interest, or dividend equivalents, including
    converting such credits into deferred Common Stock equivalents.
    In no event, however, shall such deferrals be permitted unless
    the Grantee’s Award Agreement specifically permits
    deferrals under this Section.

 

    (f) Listing and Registration of
    Shares.  Each Award shall be subject to the
    requirement that, if at any time the Committee shall determine,
    in its discretion, that the listing, registration, or
    qualification of the shares of Common Stock covered thereby upon
    any securities exchange or under any state or federal law, or
    the consent or approval of any governmental regulatory body, is
    necessary or desirable as a condition of, or in connection with,
    the granting of such Award or the purchase of shares of Common
    Stock thereunder, or that action by the Company, its
    shareholders, or the Grantee should be taken in order to obtain
    an exemption from any such requirement or to continue any such
    listing, registration, or qualification, no Option may be
    exercised, in whole or in part, and no Restricted Stock may be
    awarded, unless and until such listing, registration,
    qualification, consent, approval, or action shall have been
    effected, obtained, or taken under conditions acceptable to the
    Committee. Without limiting the generality of the foregoing,
    each Grantee or his or her legal representative or beneficiary
    may also be required to give satisfactory assurance that such
    person is an eligible purchaser under applicable securities
    laws, and that the shares purchased or granted pursuant to the
    Award shall be for investment purposes and not with a view to
    distribution; certificates representing such shares may be
    legended accordingly.

 

    (g) Withholding and Use of Shares to Satisfy Tax
    Obligations.  The obligation of the Company to
    deliver shares of Common Stock upon the exercise of any Option
    or upon the vesting of Restricted Stock shall be subject to

    

    8

 

    applicable federal, state, and local tax withholding
    requirements. If the exercise of any Option or the vesting of
    Restricted Stock is subject to the withholding requirements of
    applicable federal, state or local tax law, the Committee, in
    its discretion, may permit or require the Grantee to satisfy the
    federal, state
    and/or local
    withholding tax, in whole or in part, by electing to have the
    Company withhold shares of Common Stock (or by returning
    previously acquired shares of Common Stock to the Company);
    provided, however, that the Company may limit the number of
    shares withheld to satisfy the tax withholding requirements with
    respect to any Award to the extent necessary to avoid adverse
    accounting consequences. Shares of Common Stock shall be valued,
    for purposes of this subsection, at their Fair Market Value
    (determined as of the date the amount attributable to the
    exercise or vesting of the Award is includible in income by the
    Grantee under Code § 83). The Committee shall adopt
    such withholding rules as it deems necessary to carry out the
    provisions of this subsection.

 

    (h) Application of Funds.  Any cash
    received in payment for shares pursuant to an Award shall be
    added to the general funds of the Company. Any Common Stock
    received in payment for shares shall become treasury stock.

 

    (i) No Obligation to Exercise
    Option.  The granting of an Option shall
    impose no obligation upon a Grantee to exercise such Option.

 

    (j) Governing Law.  The Plan shall
    be governed by the applicable Code provisions to the maximum
    extent possible. Otherwise, the laws of the Company’s
    jurisdiction of incorporation shall govern the operation of, and
    the rights of Grantees under, the Plan, and Awards granted
    thereunder.

 

    (k) Unfunded Plan.  The Plan,
    insofar as it provides for Awards, shall be unfunded, and the
    Company shall not be required to segregate any assets that may
    at any time be represented by Awards under the Plan. Any
    liability of the Company to any person with respect to any Award
    under this Plan shall be based solely upon any contractual
    obligations that may be created pursuant to the Plan. No such
    obligation of the Company shall be deemed to be secured by any
    pledge of, or other encumbrance on, any property of the Company.

    

    9

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