Document:

Exhibit 10.1

 

August 5, 2008

 

Steve
Saferin

Vice
President SGI, President of Properties Operating Group

1500
Bluegrass Lakes Parkway

Alpharetta,
Georgia

 

Dear
Steve:

 

As
part of its succession planning and review of executive employment contracts,
the Compensation Committee of the Board and Lorne Weil, CEO and Chairman of the
Board, have determined that a three year extension of the term of your
employment agreement is in the best interest of the Company.   Consequently, we propose the following
amendments to your existing employment agreement dated as of January 1,
2006 (and executed as of August 2, 2006) (the “2006 Agreement”), which,
except as amended hereby, will continue in full force and effect:

 

Section 2: The Term shall be extended through December 31, 2011.

 

Section 3:
Your duties will remain unchanged except that:

 

i)                                         From close of
business on January 16, 2009 through May 15, 2009, you will not be
required to keep office hours as the Company will provide you with a sabbatical
period during which you may travel (it being understood that you will maintain
electronic communication reasonably periodically during such period); and

 

ii)                                    Beginning January 1,
2011, on terms to be agreed between the parties, you may be requested or
request to transition your responsibilities from responsibility of the profit
and loss of the Properties division to strategic initiatives.

 

New Section 5X:  Payments in event of expiration of this
extended term on or after December 31, 2011:

 

In the event that this
Agreement expires on or after December 31, 2011, Executive will receive
Standard Termination Payments as defined in sub-section 5(a) of the 2006
Agreement and:

 

1

 

A.                                                              The non-equity
portion of Executive’s incentive compensation for the completed calendar year
during which the expiration occurs, payable if, as and when such bonuses are
awarded in the ordinary course in March of the subsequent year, subject to
payroll deductions; provided, however, that if and to the extent necessary to
comply with Section 409A(a)(2)(B)(i) of the Code, and applicable
administrative guidance and regulations, such payment shall be made in a lump
sum on the date that is six months plus one day following the applicable
expiration date; and

 

B.                                                                Except to the
extent otherwise provided at the time of grant under the terms of any equity
award made to Executive, all stock options, deferred stock, restricted stock
and other equity-based awards held by Executive, if termination on or after December 31,
2011 not for cause, will become fully vested and non-forfeitable (provided that
any such options will cease being exercisable upon the earlier of one year
after the expiration date of the 2006 Agreement (as amended hereby) and the
scheduled expiration date of such options), and, in all other respects, all
such options and other awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which the awards were granted.

 

Please
indicate your agreement to the foregoing by countersigning and returning an
original signed copy of this letter to me.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Scientific
  Games Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Chambrello

  
	
   

  	
   

  	
  Name:

  	
  Michael
  Chambrello

  
	
   

  	
   

  	
  Title:

  	
  President
  and Chief Operating Officer

  

 

Accepted
and Agreed to as of August 5, 2008:

 

	
  By:

  	
  /s/
  Steve Saferin

  	
   

  
	
   

  	
  Steve
  Saferin

  	
   

  

 

2Exhibit 10.1

 

SIMPSON MANUFACTURING CO., INC.

1994
STOCK OPTION PLAN

 

Adopted February 23,
1994

and
Amended through February 13, 2008

 

1.             PURPOSES.

 

(a)           The purpose of the Plan is to provide a
means by which selected Employees and Directors of and Consultants to the
Company, and its Affiliates, may be given an opportunity to purchase stock of
the Company.

 

(b)           The Company, by means of the Plan, seeks
to retain the services of persons who are now Employees or Directors of or
Consultants to the Company and its Affiliates, to secure and retain the
services of new Employees, Directors and Consultants, and to provide incentives
for such persons to exert maximum efforts for the success of the Company and
its Affiliates.

 

(c)           The Company intends that the Options issued
under the Plan shall, in the discretion of the Board or any Committee to which
responsibility for administration of the Plan has been delegated pursuant to
subsection 3(c), be either Incentive Stock Options or Nonstatutory Stock
Options. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and in such form as issued
pursuant to section 6, and a separate certificate or certificates will be
issued for shares purchased on exercise of each type of Option.

 

2.             DEFINITIONS.

 

(a)           “Affiliate” means any parent corporation or
subsidiary corporation of the Company, whether now or hereafter existing, as
those terms are defined in Code sections 424(e) and (f), respectively, and
that qualifies as an eligible issuer of service recipient stock, as that term
is defined in Treasury Regulations section 1.409A-1(b)(5)(iii)(E).

 

(b)           “Board” means the Board of Directors of the
Company.

 

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

 

(d)           “Committee” means a Committee appointed by the Board
in accordance with subsection 3(c) of the Plan.

 

(e)           “Common Stock” means the common stock of the Company.

 

(f)            “Company” means Simpson Manufacturing Co., Inc.,
a Delaware corporation.

 

(g)           “Consultant” means any person, including an advisor,
engaged by the Company or an Affiliate to render consulting services and who is
compensated for such services; provided that the term “Consultant” shall not
include Directors who are paid only a director’s fee by the Company or who are
not compensated by the Company for their services as Directors.

 

(h)           “Continuous Status as an
Employee, Director or Consultant” means the employment or relationship as a Director or
Consultant is not interrupted or terminated. The Board, in its sole discretion,
may determine whether Continuous Status as an Employee, Director or Consultant
shall be considered interrupted in the case of: (i) any leave of absence
approved by the Board, including sick leave, military leave or any other
personal leave; or (ii) transfers between locations of the Company or
between the Company, Affiliates or their successors.

 

1

 

(i)            “Director” means a member of the Board.

 

(j)            “Employee” means any person, including Officers and
Directors, employed by the Company or any Affiliate of the Company.  Neither service as a Consultant or a Director
nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.

 

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

 

(l)            “Fair Market Value” means the value of the Common Stock as
determined in good faith by the Board and in a manner consistent with section
260.140.50 of Chapter 3 of Title 10 of the California Code of Regulations and
with Treasury Regulations section 1.409A-1(b)(5)(iv).

 

(m)          “Incentive Stock Option” means an Option intended to qualify as
an incentive stock option within the meaning of section 422 of the Code and the
regulations promulgated thereunder.

 

(n)           “Non-Employee Director” means a Director who satisfies the
requirements established from time to time by the Securities and Exchange
Commission for non-employee directors under Rule 16b-3.

 

(o)           “Nonstatutory Stock
Option” means an
Option not intended to qualify as an Incentive Stock Option.

 

(p)           “Officer” means a person who is an officer of the
Company within the meaning of section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

(q)           “Option” means a stock option granted pursuant to
the Plan.

 

(r)            “Option Agreement” means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  Each Option Agreement
shall be subject to the terms and conditions of the Plan.

 

(s)           “Optioned Stock” means the Common Stock of the Company
subject to an Option.

 

(t)            “Optionee” means an Employee, Director or
Consultant who holds an outstanding Option.

 

(u)           “Outside Director” means a member of the Board who satisfies
the requirements established from time to time for outside directors under
section 162(m) of the Code.

 

(v)           “Plan” means this Simpson Manufacturing Co., Inc.
1994 Stock Option Plan.

 

(w)          “Rule 16b-3” means Rule 16b-3 under the Exchange
Act or any successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.

 

(x)            “Securities Act” means the Securities Act of 1933, as
amended.

 

3.             ADMINISTRATION.

 

(a)           The Plan shall be administered by the
Board unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c).

 

(b)           The Board shall have the power, subject
to, and within the limitations of, the express provisions of the Plan:

 

(1)           To determine from time to time which of
the persons eligible under the Plan shall be granted Options; when and how each
Option shall be granted; whether an Option will be an Incentive Stock Option or
a Nonstatutory Stock Option; the terms and conditions of each Option granted
(which need not be 

 

2

 

identical),
including the time or times such Option may be exercised as a whole or in part;
and the number of shares for which an Option shall be granted to each such
person;

 

(2)           To grant Options under the Plan;

 

(3)           To construe and interpret the Plan and
Options granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Option Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective;
and

 

(4)           To amend the Plan as provided in section
11.

 

(c)           The Board may delegate administration of
the Plan to a Committee of the Board that will satisfy the requirements of rule 16b-3.  The Committee shall consist solely of two or
more Directors, each of whom is a Non-Employee Director and an Outside
Director, who shall be appointed by the Board. 
Subject to the foregoing, from time to time the Board may increase the
size of the Committee and appoint additional qualified members, remove members
(with or without cause) and appoint new members in substitution therefor, or
fill vacancies, however caused.  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.  The Board may abolish
the Committee at any time and revest in the Board the administration of the
Plan.  Notwithstanding anything in this
section 3 to the contrary, the Board or the Committee may delegate to a
committee of one or more members of the Board the authority to grant options to
eligible persons who are not then subject to section 16 of the Exchange Act.

 

4.             SHARES SUBJECT TO THE PLAN.

 

(a)           Subject to the provisions of section 10
relating to adjustments on changes in stock, the stock that may be sold
pursuant to Options shall not exceed in the aggregate 16,000,000 shares of the
Common Stock.  If any Option shall for
any reason expire or otherwise terminate, as a whole or in part, without having
been exercised in full, the stock not purchased under such Option shall revert
to and again become available for issuance under the Plan; provided, however,
that the maximum number of shares of Common Stock with respect to which Options
may be granted during a calendar year to any employee is 150,000 shares.

 

(b)           The stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or otherwise.

 

5.             ELIGIBILITY.

 

(a)           Incentive Stock Options may be granted
only to Employees.  Nonstatutory Stock
Options may be granted only to Employees, Directors or Consultants.

 

(b)           No person shall be eligible for the grant
of an Option if, at the time of grant, such person owns (or is deemed to own
pursuant to section 424(d) of the Code) stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Option is
at least 110 percent of the Fair Market Value of such stock at the date of
grant and the Option is not exercisable after the expiration of five years from
the date of grant.

 

6.             OPTION PROVISIONS.

 

Each Option shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate.  The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option Agreement or otherwise), except as
the Board may otherwise determine in the specific case, the substance of each
of the following provisions:

 

3

 

(a)           Term of Options. 
No Option shall be exercisable after the expiration of ten years from
the date it is granted.

 

(b)           Price.  The exercise
price of each Option shall be not less than 100 percent of the Fair Market
Value of the stock subject to the Option on the date the Option is granted.

 

(c)           Consideration. 
The purchase price of stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in
cash at the time the Option is exercised, or (ii) in the absolute
discretion of the Board or the Committee (which discretion may be exercised in
a particular case without regard to any other case or cases), at the time of
the grant or thereafter, (A) by the withholding of shares of Common Stock
issuable on exercise of the Option or delivery to the Company of other Common
Stock of the Company, (B) according to a deferred payment or other
arrangement (which may include, without limiting the generality of the
foregoing, the use of other Common Stock of the Company) with the person to
whom the Option is granted or to whom the Option is transferred pursuant to
subsection 6(d), or (C) in any other form of legal consideration that may
be acceptable to the Board.

 

In the case of any deferred payment arrangement,
interest shall be payable at least annually and shall be charged at the minimum
rate of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement, or if less, the maximum
rate permitted by law.

 

(d)           Transferability. 
An Option shall not be sold, assigned, transferred, pledged, hypothecated
or otherwise disposed by the Optionee during his or her lifetime, whether by
operation of law or otherwise, other than by will or the laws of descent and
distribution applicable to such Optionee, or be made subject to execution,
attachment or similar process; provided that the Board may in its discretion at
the time of approval of the grant of an Option or thereafter permit an Option
to be transferred by an Optionee to a trust or other entity established by the
Optionee for estate planning purposes, and may permit further transferability,
or impose conditions or limitations on any permitted transferability.  An Option shall otherwise be exercisable
during the lifetime of the person to whom the Option is granted only by such
person.

 

(e)           Vesting.  The total
number of shares of stock subject to an Option may, but need not, be allotted
in periodic installments (which may, but need not, be equal).  An Option Agreement may provide that from
time to time during each of such installment periods, the Option may become
exercisable (“vest”) with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period or any prior period as to which the Option shall have become
vested but shall not have been fully exercised. 
An Option may be subject to such other terms and conditions on the time
or times when it may be exercised (which may be based on performance or other
criteria) as the Board may deem appropriate. 
The vesting provisions may vary among Options, but in each case will
provide for vesting of at least twenty percent per year of the total number of
shares subject to the Option.

 

(f)            Conditions On Exercise of Options and
Issuance of Shares.

 

(1)           Shares shall not be issued on exercise of
an Option unless the exercise of such Option and the delivery of such shares
pursuant thereto shall comply with all applicable laws and regulations,
including, without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder and the requirements of any stock exchange
on which the Common Stock may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

 

(2)           The Company may require any Optionee, or
any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising an Option, (1) to give written assurances
satisfactory to the Company as to the Optionee’s knowledge and experience in
financial and business matters or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory to
the Company stating that such person is acquiring the stock subject to the
Option for such person’s own account and not with any present intention of
selling or otherwise distributing the stock. 
The 

 

4

 

foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inapplicable if (i) the issuance of the shares on the exercise of the
Option has been registered under a then currently effective registration
statement under the Securities Act, or (ii) as to any particular
requirement, a determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, with
advice of its counsel, place such legends on stock certificates issued under
the Plan as the Company deems necessary or appropriate to comply with applicable
securities laws, including, but not limited to, legends restricting the
transfer of the stock.

 

(g)           Termination of Employment or Relationship
as a Director or Consultant.  If an
Optionee’s Continuous Status as an Employee, Director or Consultant terminates
(other than on the Optionee’s death or disability), the Optionee may exercise
his or her Option (to the extent that the Optionee shall have been entitled to
exercise it at the date of termination) but only within the period ending on
the earlier of (i) the ninetieth day after the termination of the Optionee’s
Continuous Status as an Employee, Director or Consultant (or such longer or
shorter period, which in no event shall be less than thirty days, specified in
the Option Agreement), or (ii) the expiration of the term of the Option as
set forth in the Option Agreement.  If,
after termination, the Optionee does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

 

(h)           Disability of Optionee. 
If an Optionee’s Continuous Status as an Employee, Director or
Consultant terminates as a result of the Optionee’s disability, the Optionee
may exercise his or her Option (to the extent that the Optionee shall have been
entitled to exercise it at the date of termination), but only within the period
ending on the earlier of (i) the first anniversary of such termination (or
such longer or shorter period, which in no event shall be less than six months,
specified in the Option Agreement), or (ii) the expiration of the term of
the Option as set forth in the Option Agreement.  If, at the date of termination, the Optionee
is not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan.  If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

 

(i)            Death of Optionee. 
If of an Optionee dies during, or within a period specified in the
Option after the termination of, the Optionee’s Continuous Status as an
Employee, Director or Consultant, the Option may be exercised (to the extent
that the Optionee shall have been entitled to exercise the Option at the date
of death) by the Optionee’s estate or by a person who shall have acquired the
right to exercise the Option by bequest or inheritance, but only within the
period ending on the earlier of (i) the one hundred eightieth day after
the first anniversary of the date of death (or such longer or shorter period,
which in no event shall be less than six months, specified in the Option
Agreement), or (ii) the expiration of the term of such Option as set forth
in the Option Agreement.  If, at the time
of death, the Optionee is not entitled to exercise his or her entire Option,
the shares covered by the unexercisable portion of the Option shall revert to
and again become available for issuance under the Plan.  If, after death, the Optionee’s estate or a
person who shall have acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.

 

(j)            Exemptions. 
Notwithstanding subsections (g), (h) and (i) above, the Board
shall have the authority to extend the expiration date of any outstanding
Option in circumstances in which it deems such action to be appropriate
(provided that no such extension shall extend the term of an Option beyond the
date of expiration of the term of such Option as set forth in the Option
Agreement).

 

(k)           Early Exercise. 
The Option may, but need not, include a provision whereby the Optionee
may elect at any time while an Employee, Director or Consultant to exercise the
Option as to any part or all of the shares subject to the Option prior to the
full vesting of the Option.  Any unvested
shares so purchased shall be subject to a repurchase right in favor of the
Company, with the repurchase price to be equal to the original purchase price
of the stock, or to any other restriction the Board determines to be
appropriate; provided that the right to repurchase at the original purchase
price shall lapse at a minimum rate of twenty percent per year over five years
from the date the Option is granted and such right shall be exercised within
ninety days of 

 

5

 

termination of
employment for cash or cancellation of purchase money indebtedness for the
shares.  Should the right of repurchase
be assigned by the Company, the assignee shall pay the Company cash equal to
the difference between the original purchase price and the stock’s Fair Market
Value at the time of the assignment if the original purchase price is less than
such Fair Market Value.

 

(l)            Withholding.  To
the extent approved by the Board in the specific case, at the time of approval
of the grant of the Option or thereafter, the Optionee may satisfy any Federal,
state or local tax withholding obligation relating to the exercise of such
Option by any of the following means or by a combination of such means: (l) tendering
a cash payment; (2) authorizing the Company to withhold shares from the
shares of the Common Stock otherwise issuable to the Optionee as a result of
the exercise of the Option; or (3) delivering to the Company owned and
unencumbered shares of the Common Stock of the Company.  The value of shares withheld or delivered
shall equal the Fair Market Value of the shares on the day the Option is
exercised.

 

7.             COVENANTS OF THE COMPANY.

 

(a)           During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

 

(b)           The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of stock on exercise of
the Options; provided that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any Option or any stock
issued or issuable pursuant to any such Option. 
If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell
stock on exercise of such Options unless and until such authority is obtained.

 

8.             USE OF PROCEEDS FROM STOCK.

 

Proceeds from the sale of stock pursuant to Options
shall constitute general funds of the Company.

 

9.             MISCELLANEOUS.

 

(a)           Neither an Optionee nor any person to
whom an Option is transferred under subsection 6(d) shall be deemed to be
the holder of, or to have any of the rights of a holder with respect to, any
shares subject to such Option unless and until such person has satisfied all
requirements for exercise of the Option pursuant to its terms.  No adjustment will be made for dividends or
other rights for which the record date is prior to the date of satisfaction of
all such requirements.

 

(b)           Throughout the term of any Option, the
Company shall deliver to the holder of such Option, not later than 120 days
after the close of each of the Company’s fiscal years during the Option term, a
balance sheet and an income statement. 
This section shall not apply when issuance is limited to key employees
whose duties in connection with the Company assure them access to equivalent
information.

 

(c)           Nothing in the Plan or any instrument
executed or Option granted or other action taken pursuant thereto shall confer
on any Employee, Director, Consultant or Optionee any right to continue in the
employ of the Company or any Affiliate (or to continue acting as a Director or
Consultant) or shall affect the right of the Company or any Affiliate to
terminate the employment or relationship as a Director or Consultant of any
Employee, Director, Consultant or Optionee with or without cause.

 

(d)           To the extent that the aggregate Fair
Market Value (determined at the time of grant) of stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year under all plans of the Company and its Affiliates
exceeds $100,000, the Options or portions 

 

6

 

thereof in excess
of such limit (according to the order in which they are granted) shall be
treated as Nonstatutory Stock Options.

 

10.          ADJUSTMENTS ON CHANGES IN STOCK.

 

(a)           If any change is made in the stock
subject to the Plan, or subject to any Option (through merger, consolidation,
reclassification, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split or reverse stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or otherwise), the Plan and outstanding Options will be appropriately
adjusted by the Board in the class(es) and maximum number of shares subject to
the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding Options.

 

(b)           In the event of: (1) a merger or
consolidation in which the Company is not the surviving corporation or (2) a
reverse merger in which the Company is the surviving corporation but the shares
of the Common Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise then to the extent permitted by applicable law: (i) any
surviving corporation shall assume any Options outstanding under the Plan or
shall substitute similar options for those outstanding under the Plan, or (ii) such
Options shall continue in full force and effect.  If any surviving corporation refuses to
assume or continue such Options, or to substitute similar options for those
outstanding under the Plan, then such Options shall be terminated if not
exercised prior to such event.  In the
event of a dissolution or liquidation of the Company, any Options outstanding
under the Plan shall terminate if not exercised prior to such event.

 

11.          AMENDMENT OF THE PLAN.

 

(a)           The Board at any time or from time to
time shall have the right to amend, modify, suspend or terminate the Plan for
any reason; provided that the Company will seek stockholder approval for any
change if and to the extent required by applicable law, regulation or rule.

 

(b)           It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide Optionees with the maximum benefits provided or to be provided under
the Code and the regulations promulgated thereunder relating to Incentive Stock
Options or to cause the Plan or Incentive Stock Options granted under it to
comply therewith.

 

(c)           Rights and obligations under any Option
granted before amendment of the Plan shall not be altered or impaired by any
amendment of the Plan, unless (i) the Company requests the consent of the
person to whom the Option shall have been granted and (ii) such person
consents in writing.

 

12.          TERMINATION OR SUSPENSION OF THE PLAN.

 

(a)           The Board may suspend or terminate the
Plan at any time.  Unless sooner
terminated, the Plan shall terminate on May 28, 2012.  No Options may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

(b)           Rights and obligations under any Option
granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except with the consent of the person to
whom the Option shall have been granted.

 

13.          EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective as determined by the
Board, but no Options granted under the Plan shall be exercised unless and
until the Plan shall have been approved by the stockholders of the Company,
which approval shall be within twelve months before or after the date the Plan
is adopted by the Board, and, if required, an appropriate permit shall have
been issued by the Commissioner of Corporations of the State of California.

 

7

 

14.          COMPLIANCE WITH SECTION 16 OF
THE EXCHANGE ACT

 

It is the Company’s intent that the Plan comply in all
respects with Rule 16b-3.  If any
provision of this Plan is found not to be in compliance with Rule 16b-3,
that provision shall be deemed to have been amended or deleted as and to the
extent necessary to comply with Rule 16b-3, and the remaining provisions
of the Plan shall continue in full force and effect, without change.  All transactions under the Plan shall be
executed in accordance with the requirements of Section 16 of the Exchange
Act and the applicable regulations promulgated thereunder.

 

15.          COMPLIANCE WITH SECTION 409A OF
THE CODE

 

It is the Company’s intent that the Plan comply in all
respects with Code section 409A and the applicable regulations promulgated
thereunder.  If any provision of the Plan
is found not to be in compliance with Code section 409A and the applicable
regulations promulgated thereunder, that provision shall be deemed to have been
amended or deleted as and to the extent necessary to comply with Code section
409A and the applicable regulations promulgated thereunder, and the remaining
provisions of the Plan shall continue in full force and effect, without
change.  All transactions under the Plan
shall be executed in accordance with the requirements of Code section 409A and
the applicable regulations promulgated thereunder.

 

8

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