Document:

Exhibit
4.1

      

      
        
          	
                  

                	
                  Contract
      of XDLONG (China) Co., Ltd.

                

        

      

      
        

      

      *This
is an English Translation* 

       

      
        

      

      
         

        REGIONAL
GENERAL AGENCY AGREEMENT

         

        XIDELONG
(China) Co.Ltd (hereinafter referred to as “Party A” and ____________
(hereinafter referred to as "Party B") have made and entered into the Agreement
in respect of the franchise relationship between the two parties. Party B is
acting as Party A’s regional general franchisee to sell Party A’s sports and
leisure footwear and apparel products. This Agreement is made to further develop
the market of “XIDELONG” brand, standardize the operational environment of the
market, meet demands of the consumers, maintain the reputation of the brand and
to protect the rights and interests of the agency, and it is based on the
principles of free will, equality, mutual benefits and common development by the
two parties.

         

        I.  Franchise
Contents, Scope, Region and Term

         

        1.0 
Party A grants Party B as the regional general agency to sell sports and leisure
footwear and apparel products of "XIDELONG" brand in __________ (region) during
the term starting from ______and ending on_______. Party B shall be responsible
for daily management of its subsidiary distributors. If Party B fails to develop
the market within the specified period of time, Party A shall be entitled to
cancel the rights of Party B and to grant others as regional general
agency.

         

        1.1 
“Agent” in this Agreement refers to Party B’s rights granted by Party A to sell
"XIDELONG" sports and leisure footwear and apparel of Party A. Transactions
between the parties shall be deemed as those between a buyer and a
purchaser.

         

        
          1.2 
Credibility
guarantee deposit and restraints

        

         

        1.2.1   
Party B agrees to pay Party A RMB FIVE HUNDRED THOUSAND (RMB 500,000) as the
credibility guarantee deposit upon execution of this Agreement.

         

        1.2.2   
If Party B breaches the Agreement, Party A shall have the right to make
deductions of the credibility guarantee deposit according to its marketing
policies with the specific amount of deduction determined based on the specific
event and Party B shall not object to such deduction.

         

        1.2.3   
When Party B deals in “XIDELONG” brand products, it shall not deal in and sell
products of other brands in this Region or in the exclusive shops of “XIDELONG”
brand for any reason; otherwise, Party A shall have the right to terminate the
Agreement immediately with all economic losses incurred thereby borne by Party
B.

         

        1.2.4   
Party B shall report stock of the goods to Party A each month during the term
when it is dealing in “XIDELONG" brand products, which shall be supervised by
the Finance Department of Party A for better cooperation between both
parties.

         

        
          1.2.5   
If Party B reaches unsatisfactory performance in dealing in “XIDELONG" brand
products, Party

           

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          

          
            
              	
                      

                    	
                      Contract
      of XDLONG (China) Co., Ltd.

                    

            

          

          
            

          

          *This
is an English Translation* 

           

          
            

          

           

        

        A shall
have the right to directly develop the market thereof, and directly or jointly
operate in the market, or grants others to operate and manage
business.

         

        1.2.6   
Party B must abide by relevant sales procedures and marketing policies as agreed
in relevant agreements between Party A and Party B or between Party B and third
party retailers. Relevant agreements between Party B and third party retailers
shall adopt sample contracts agreed upon by Party A.

         

        1.2.7   
When Party B signs relevant distribution agreements with third party retailers,
it shall obtain the prior approval of Party A, and is not allowed to modify the
distribution agreements or to sign new distribution agreements without the prior
written consent of Party A. Such distribution agreements shall also be
terminated upon the termination of this Agreement.

         

        1.3 
Rights of Operation

         

        1.3.1   
Without prior written consent of Party A, Party B shall not, during the term of
this Agreement, transfer agency rights to a third party or open new exclusive
shops, halls and counters in the Region. Otherwise, the Agreement will be
terminated immediately and the credibility guarantee deposit will be
confiscated, and Party B shall not object to such actions.

         

        1.3.2   
If Party B does not observe the regulations of Party A on market management,
Party A shall be entitled to cancel Party B’s agency rights.

         

        1.3.3   
If Party B fails to reach sales targets for two consecutive years, Party A shall
be entitled to cancel Party B’s agency rights.

         

        1.3.4   
If Party B fails to pay Party A for three months consecutively, Party A shall
have the right to cancel Party B’s agency right, with losses incurred thereby to
be borne by Party B unilaterally.

         

        1.4 
Party B shall fulfill all its obligations under the Agreement as an independent
contracting party in its own name and for its own interests. No provision under
this Agreement shall constitute any relationship of employment, joint operation
or partnership between Party A and Party B. Party B has no right to act in the
name of Party A.

         

        
          II. 
Placement
of Order, Collection of Goods and Settlement Method

        

         

        2.1 
Placement of order and collection of goods

         

        2.1.1   
Party B shall place orders with Party A according to its actual demand and each
order placement must be confirmed and sent to Party A via fax with
signature.

         

        2.1.2   
If Party A has goods available in stock after it receives the fax, it shall
dispatch the goods in accordance with the order of Party B’s plan on the day of
placement or the following days. If Party A does not have goods in stock, it
will actively arrange for production thereof. Dispatch of goods within 25 to 30
days shall be deemed as normal (In case of special circumstances, dispatch shall
be made based on Party A’s actual arrangement. If Party B fails to pay for the
goods to Party A in a timely manner, losses so incurred by delayed dispatch of
goods shall be borne by Party B.)

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          

          
            
              	
                      

                    	
                      Contract
      of XDLONG (China) Co., Ltd.

                    

            

          

          
            

          

          *This
is an English Translation* 

           

          
            

          

           

        

        2.1.3   
After Party B has sent an order to Party A via fax, it shall not arbitrarily
cancel the order or change the code and quantity of the goods ordered;

         

        2.1.4   
Party B shall immediately examine whether the goods received conform to the
order upon delivery if the goods fail to conform to the order, it shall contact
Party A in writing within 48 hours after receipt of the goods and negotiate
solutions. Otherwise, the goods shall be deemed as accepted.

         

        2.1.5   
If Party A fails to dispatch the goods within 20 days after receipt of the
order, the order shall automatically become invalid; If Party B intends to
maintain the validity of the order, it shall separately send a fax to Party A to
confirm the order.

         

        2.1.6   
If Party A fails to dispatch goods in accordance with the order of Party B,
Party A shall be responsible for the mistake and solution thereto shall be
reached by both parties through negotiation.

         

        2.1.7   
Quantities of all the dispatched goods shall be based on delivery
order.

         

        2.1.8   
Party A shall be responsible for the dispatch of goods in accordance with the
type, quantity and time ordered by Party B; freight and transport risks shall be
borne by Party B.

         

        2.2 
Dispatch of Goods, Pricing and Settlement

         

        2.2.1   
If Party B fails to make payment or pick up goods in a timely manner, Party A
shall have the right to unilaterally terminate Party B’s Agency Agreement with
all liabilities incurred thereby borne by Party B.

         

        2.2.2   
If Party B’s failure to purchase goods from Party A lasts for three months,
Party A shall be entitled to terminate the Agreement with Party B liable for all
losses thereby incurred.

         

        2.2.3   
If Party B fails to receive the goods more than 10 days after Party A delivers
the goods; Party B shall consult Party A. Otherwise, all losses thereby incurred
shall be borne by Party B.

         

        2.2.4   
“XIDELONG" brand products are sold at flat retail prices in China, and are sold
to regional distributors at preferential wholesale prices based on retail
prices. Party A shall be entitled to adjust the preferential wholesale prices of
various kinds of products according to the market.

         

        2.2.5   
Payment for the goods shall be settled in the following two ways:

         

        
          	
                	
                  (1)

                	
                  With
      regard to old customers, payment for the goods shall be settled within
      four months after the goods are
dispatched.

                

        

         

        
          	
                	
                  (2)

                	
                  With
      regard to new customers, 30% of the price of the goods sold shall be paid
      within the month succeeding the month when the goods are dispatched. The
      remaining amount due shall be settled within three months thereafter.
      After the above-mentioned three months, the new customer shall be treated
      as an old customer.

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          
            	
                    

                  	
                    Contract
      of XDLONG (China) Co., Ltd.

                  

          

        

        
          

        

        *This
is an English Translation* 

         

        
          

        

         

        
          	
                	
                  (3)

                	
                  If
      Party B fails to settle corresponding payment for goods within the
      above-mentioned payment period, Party A shall have the right to demand
      that Party B pay the same at any time and also have the right to demand
      that Party B pay a penalty for the overdue amount at a monthly rate of 3‰
      of the overdue payment.

                

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          
            
              	
                      

                    	
                      Contract
      of XDLONG (China) Co., Ltd.

                    

            

          

          
            

          

          *This
is an English Translation* 

           

          
            

          

           

        

        
          III. 
Management
of Sales in Unauthorized Location

        

         

        3.1           If
goods are sold in unauthorized locations, a penalty of RMB TEN THOUSAND (RMB10,
000) will be imposed on the seller for each case upon discovery. Party B shall
withdraw goods sold in the unauthorized locations within seven days upon receipt
of notification from the head office. If Party B fails to perform so
immediately, the head office will purchase the very goods at a retail price and
all fees thereby incurred shall be borne by Party B. Party B shall notify the
head office upon it has received the notification from the head office. If Party
B fails to do so within two days, Party B will be deemed to have acknowledged
the above-mentioned wrongdoing and the penalty will be directly deducted from
the payment of the goods that have been paid by Party B or deducted from the
guarantee deposit. The penalty will be used for advertising in the location
where the wrongdoing of Party B has occurred.

         

        3.2           Where
Party B fails to follow regulations of the company on sales within the agreed
authorized location, Party A will stop dispatching all goods and any serious
damage shall be borne by Party B. Dispatching of goods will only be resumed
after the problem has been coordinated and solved. Party B shall pay off all
payments for the goods within one month, or it will be deemed as
default.

         

        3.3           Party
A will have no responsibility for shops which sell the goods in unauthorized
locations. Party B shall be responsible for such improper action with a penalty
of RMB FIVE HUNDRED (RMB 500) for each case.

         

        3.4           Party
B shall be completely liable for selling the goods in unauthorized locations if
it is confirmed to be conducted by itself or its distributors. If Party B fails
to perform according to the notifications of Party A, it shall be regarded as
disrupting market order on purpose and selling fake and low-quality products.
Party A shall have the right to appeal to the local Administration of Industry
and Commerce for resolution.

         

        3.5           Party
A marks the goods with a sales area code before dispatching. Accordingly Party B
shall make the goods with the district sequence codes for convenience of
recognition; otherwise, Party B shall be liable for all the sales disputes
arising therefrom.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              	
                      

                    	
                      Contract
      of XDLONG (China) Co., Ltd.

                    

            

          

          
            

          

          *This
is an English Translation* 

           

          
            

          

           

        

        
          IV. 
Document
Delivery and Information Feedback

        

         

        4.1           Party
A may send relevant documents and notifications by three ways: telephone, fax or
mailing. Party B shall implement Party A’s initiatives
conscientiously.

         

        4.2           Upon
attaining the right of agency, Party B shall collect market information of the
very Region, including market intelligence and promotional information, and
provide samples of other best-selling shoes, opinions of vendors and consumers
and sales and activities of main competitors in local markets, etc., which shall
be reported to Party A promptly.

         

        4.3           Party
A encourages Party B to make corresponding suggestions on the basis of full
understanding of the local market.

         

        4.4           Party
A carries out an incentive and penalty scheme according to Party B’s performance
of collecting market intelligence and implementation of Party A’s initiatives.
Shall Party B achieve a satisfactory performance, it will be rewarded at the end
of the year. Otherwise, a penalty will be deducted from the credibility
guarantee deposit, to which Party B shall not object.

         

        
          V. 
After-Sales
Services

        

         

        5.1           Party
B must keep improving its distribution network, actively create archives for the
distributors, and post the archives to Part B for record-keeping.

         

        5.2           Party
B shall convey relevant policies and guidelines of Party A to its own
distributors and distribute materials that are for promotion
purpose.

         

        5.3           Party
B shall handle customers’ complaints promptly and establish an after-sales
services archive. It shall also regularly conduct follow-up feedback
survey.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        
          
            	
                    

                  	
                    Contract
      of XDLONG (China) Co., Ltd.

                  

          

        

        
          

        

        *This
is an English Translation* 

         

        
          

        

         

        
          VI. 
Management
of Exclusive Sale

        

         

        6.1           Party
B shall adopt the centralized design solutions by Party A for the outside and
interior decoration of the exclusive stores, halls and counters whose colors,
style, fonts, internal layout, display of goods, management and services to be
in line with Party A’s brand and image.

         

        6.2           Party
B and its distributors shall employ managerial and sales personnel for the
exclusive shops, halls and counters of "XIDELONG" brand, based on criteria
provided by Party A. Employees shall wear “XIDELONG " uniforms designated by
Party A and employee name tags. The costs thereof shall be borne by Party
B.

         

        6.3           Party
A shall provide training of exclusive sales management and sales person for
Party B, which Party B shall accept. Training includes company’s philosophy,
culture, product information, skills to assist customers to purchase, display of
goods, window display and operation management. Expenses of training shall be
borne by Party B.

         

        6.4           Party
B shall enforce third party retailers follow the guidelines, procedures and
policies of Party A with regard to the operation of the business, which shall
take necessary measures to ensure.

         

        
          VII. 
Provisions on Props for Publicity,
Brand Building,
etc.

        

         

        7.1           Party
A will appropriately provide Party B with materials for publicity purposes
seasonally free of charge (newspaper, product’s introduction, props, ad video,
etc.); Party B shall make proposals on usage of the above-mentioned materials.
The proposals shall be filed for reference.

         

        7.2           When
Party B needs to make a backlight film for brand publicity, it shall send draft
design to the marketing center of Party A in writing via fax with the content
texts and other special requirements. The making of the backlight film will be
subject to Party A’s confirmation. After the backlight film has been put in
place, Party B shall make photograph and send to the marketing center of Party A
for filing.

         

        7.3           Party
B shall take part in promotional campaigns planned by Party A. Expenses of
gifts, prizes and publicity materials for the campaign shall be borne by Party
A. Other expenses shall be borne by Party B.

         

        7.4           Shall
Party A take part in or holds large-scale national or regional activities at the
Region of Party B (exhibition, marketing fair, negotiation, press conference,
etc. ), Party B should support Party A and coordinate with Party A with an
active manner.

         

        7.5           Shall
Party B need to publicize and promote the brand in the Region via television,
radio, scrolls, newspapers or other channels, it shall notify Party A of the
scheme and contents thereof 15 days in advance in writing. Party B can only
proceed after receipt of Party A’s written consent thereto. At the same time,
Party A shall be responsible for providing corresponding advertising
materials.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        
          
            	
                    

                  	
                    Contract
      of XDLONG (China) Co., Ltd.

                  

          

        

        
          

        

        *This
is an English Translation* 

         

        
          

        

         

        7.6           Expenses
of local TV ads, ads on vehicles, outdoor ads, etc. shall be borne by both
parties and the proportion of the expenses to be borne by each party shall be
separately negotiated by both parties according to the actual
situation.

         

        7.7           Any
form of publicity made by Party B shall be subject to the supervision and
inspection of Party A which shall have the right to demand Party B to
immediately cancel such ads if such ads are deemed to be against Party A. In
such case, Party B shall compensate Party A for various losses thereby
incurred.

         

        
          VIII.
Use
of Trademark

        

         

        8.1           The
“XIDELONG” trademark has been registered in the People’s Republic of China
(PRC). When Party B works as an agency of “XIDELONG” brand, it shall strictly
adhere to stipulations of “The Trademark Law of People’s Republic of China,” and
fully maintain the rights and interests of the registered trademark. When Party
B uses the “XIDELONG” trademark in its shop advertisement, window display,
posters and literature (generally referring to all things used to publicize,
introduce “XIDELONG” products) and other media, it shall use the wording and
font used in the “XIDELONG” trademark provided by Party A. Otherwise, Party A
shall be entitled to impose a penalty of between RMB TWO THOUSAND (RMB 2,000) to
RMB TEN THOUSAND (RMB 10,000) depending on the seriousness of the
case.

         

        8.2           Without
the consent of Party A, Party B shall not imprint the “XIDELONG” trademark or
company name of Party A on shoe boxes, trademarks or literature. If Party B
needs to make supporting advertising material, it shall make the material only
after receipt written approval of Party A. Samples thereof shall be sent to
Party A for filing; otherwise, Party A will impose a penalty of between RMB FIVE
THOUSAND (RMB 5,000) to RMB THIRTY THOUSAND (RMB 30,000), depending on severity
of the case. If it is very serious, the case will be passed to judicial
authorities.

         

        8.3           Party
B shall not use the name of “XIDELONG” in its company name or legal business
registration. Upon signing of this Agreement, Party B must remove the name of
“XIDELONG” by changing such enterprise name and/or its legal business
registration, shall it still contains. If the company name of any third party
retailer in the location for which Party B is responsible contains “XIDELONG” in
its enterprise name and/or its legal business registration, Party B shall make
every effort to urge such third-party retailer to remove such name within a
reasonable period of time by changing the enterprise name and changing
commercialist legal business registration.

         

        
          IX.
Confidentiality,
Prosecution of Fake Goods and Rights Protection

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        
          
            	
                    

                  	
                    Contract
      of XDLONG (China) Co., Ltd.

                  

          

        

        
          

        

        *This
is an English Translation* 

         

        
          

        

         

        9.1           All
materials provided by either party shall be kept confidential by the other
party. Any party violates this Article shall indemnify the other party twice as
much as the amount of loss thereby incurred to the other party. Party B’s
relevant sales materials and data shall not be disclosed without the consent of
Party A; otherwise, such behavior shall be deemed as divulgence of confidential
information.

         

        9.2           Any
plans of operation management and training provided by Party A to Party B, as
well as information and statements, etc. exchanged between the parties shall be
Party A’s internal secrets which shall not be disclosed to any person and shall
be used only as specified in the contact with Party A. Otherwise, Party B shall
be deemed to have divulged secrets and shall be liable for such
breach.

         

        9.3           Unless
Party B obtains the written consent of Party A, it shall not, after termination
of this Agreement,  disclose Party A’s internal secrets and materials
provided by Party A to any third party; otherwise, Party B shall indemnify Party
A for all losses thereby incurred. The Article of confidentiality shall be
binding on both parties after termination of this Agreement.

         

        9.4           All
relevant materials, data, schemes, etc. involved in the negotiating process of
the Agreement shall be proprietary technical secrets of Party A ,which shall be
kept confidential whether the Agreement is signed or not; the divulgence thereof
shall be deemed infringement.

         

        9.5           Party
B shall have the responsibility and obligation to protect the “XIDELONG”
trademark and seriously prosecute illegal behaviors including the making of fake
“XIDELONG” products.  If Party B detects fake “XIDELONG” products or
behaviors damaging to Party A’s brand image in its Region, Party B shall report
to Party A promptly and be commissioned by Party A to report such to state
industrial and business administration department and assist in handling
thereof.

         

        9.6           When
Party B suspends the right to work as an agent to sell the products of Party A,
Party B shall remove any material about brand image and ads of Party A in its
Region. Otherwise, Party A shall treat the failure as infringement and fake
agency. Party B shall be strictly prohibited to show or publicize any actions or
words against Party A in its Region; otherwise, Party B shall be responsible for
all losses thereby incurred and Party A shall be entitled to claim
indemnification against Party B for losses and damage to its
reputation.

         

        
          X.
Termination
of Agreement

        

         

        10.1           Where
both parties need to terminate the Agreement or the Agreement cannot be
performed due to special reasons, the Agreement may be terminated subject to the
consent of both parties reached through negotiation.

         

        10.2           When
the Agreement expires, Party A has the right to unilaterally decide to renew the
Agreement term for one additional year.

         

        10.3           If
Party B decides to terminate the Agreement or not renew the Agreement, it shall
inform Party A in writing at least three months in advance.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          
            	
                    

                  	
                    Contract
      of XDLONG (China) Co., Ltd.

                  

          

        

        
          

        

        *This
is an English Translation* 

         

        
          

        

         

        10.4           If
Party B requires terminating the Agreement earlier, Party A does not have to buy
back “XIDELONG” sports and leisure shoes and apparel which have not been sold by
Party B.

         

        10.5           If
any of the following circumstances occurs to Party B during the term of the
Agreement, Party A shall be entitled to terminate the Agreement:

         

        
          	
                   
      

                	
                  (1)

                	
                  Party
      B fails to fulfill its contractual obligations, including but not limited
      to, failure of Party B to secure observance of Party A’s sales policy and
      achievement of sales targets by third-party retailers. The failure of
      Party B to correct such non performance of obligations even after Party A
      has sent written notice thereof shall result in Party A’s taking back of
      the exclusive store operated by Party
B.

                

        

         

        
          	
                   
      

                	
                  (2)

                	
                  Party
      B is ordered to suspend operation or its business license is revoked by
      the government or is unable to operate normally or is on the verge of
      bankruptcy due to major debts; or a third party files a request of
      liquidation against Party B or Party B arranges for liquidation to realize
      the interests of its creditors according to relevant Chinese laws and
      regulations.

                

        

         

        10.6           If
the Agreement is terminated by Party A, not because of default of Party B, Party
A may propose to buy back “XIDELONG” sports and leisure footwear and apparel
which have not been sold by Party B at a discounted price at which they were
sold to Party B. The discount shall be calculated based on the duration of time
between the production time and the time of buy-back and the amount of discount
ranges from zero discount for products produced during the past three months to
100% discount for products manufactured one year ago.

         

        10.7           Subject
to provisions of this Article 10 under this Agreement, if Party B still has
“XIDELONG” sports and leisure footwear and apparel in stock after expiration of
the Agreement, it shall dispose of the products within [three months], and shall
not sell “XIDELONG” sports and leisure footwear and apparel after [three
months].

         

        
          XI.
Force
Majeure

        

         

        11.1           In
case of any event of force majeure, including but not limited to, objective
conditions which are unforeseen, unavoidable and uncontrollable and result in
the inability of performance or delayed performance of this Agreement, such as
earthquake, severe fire, floods, war, strike, acts of government, interruption
and discontinue of transport Means or other public utilities,accidents, etc. ,
the party Impacted from the aforesaid force majeure events shall inform the
other party promptly in writing of the conditions of the events and shall,
within 15 days, provide details of the events and reasons for failure or delay
in performance of the Agreement.

         

        11.2           With
regard to foreseeable natural disasters, the party concerned shall take
appropriate measures to ensure the performance of this Agreement ahead of time.
The party Impacted by the force majeure event has the responsibility of
minimizing the impact of such events on both parties to the lowest level
possible.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          

          
            
              	
                      

                    	
                      Contract
      of XDLONG (China) Co., Ltd.

                    

            

          

          
            

          

          *This
is an English Translation* 

           

          
            

          

           

        

        
          XII.
Miscellaneous

        

         

        12.1           The
Agreement is executed by the office of XIDELONG (China) Co. Ltd.

         

        12.2           Any
appendix hereto or any supplementary agreement of this Agreement shall
constitute part of this Agreement and shall be of the same legal
effect

         

        12.3           Any
amendment or addition to this Agreement shall be made in writing.

         

        12.4           Any
matter not covered in this Agreement shall be negotiated by both parties with
supplementary agreements signed by both parties. Should negotiation fail, an
application shall be filed to competent authority where the Agreement is
executed for mediation and arbitration. Should mediation arbitration fail,
action may be initiated in court where the Agreement is executed.

         

        12.5           Party
A has the right to interpret this Agreement.

         

        12.6           Confirmation
of invalidity of any of the provisions of this Agreement will not affect the
legal force of the remaining provisions hereof and the rights and obligations of
both parties.

         

        12.7           Breach
of this Agreement by Party B’s authorized agent shall be deemed a breach of this
Agreement by Party B.

         

        12.8           This
Agreement shall be made in duplicate with Party A and Party B holding one copy.
The two copies shall be equally authentic.

         

        12.9           This
Agreement takes effect after being signed and sealed by both
parties.

         

         

         

        
          	
                  Party
      A:  XIDELONG (China) Co. Ltd.

                	
                  Party
      B:

                
	
                  Address:
      XIDELONG Industrial Park, Chendai, Jinjiang City

                	
                  Address:

                
	
                  Authorized
      person:

                	
                  Authorized
      person:

                
	
                  Date
      signed:

                	
                  Date
      signed:Exhibit
10.1

     

    SONIC
SOLUTIONS

     

    2010
INDUCEMENT EQUITY COMPENSATION PLAN

     

    October
2010

     

    1.           Purposes of the
Plan.  The purposes of this Plan are to provide a material
inducement to an employee to enter into the employ of the Company and to promote
the success of the Company’s business.  Awards granted hereunder are
granted not under a shareholder approved plan but rather pursuant to a NASDAQ
inducement grant exception.

     

    2.           Definitions.  The
following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award
Agreement.  In the event a term is separately defined in an individual
Award Agreement, such definition shall supercede the definition contained in
this Section 2.

     

    (a)           “Administrator” means
the Board or the Compensation Committee.

     

    (b)           “Affiliate” and “Associate” shall have
the respective meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.

     

    (c)           “Applicable Laws”
means the legal requirements relating to the Plan and the Awards under
applicable provisions of federal securities laws, state corporate and securities
laws, the Code, the rules of any applicable stock exchange or national market
system, and the rules of any non-U.S. jurisdiction applicable to Awards granted
to residents therein.

     

    (d)           “Assumed” means that
pursuant to a Corporate Transaction either (i) the Award is expressly
affirmed by the Company or (ii) the contractual obligations represented by
the Award are expressly assumed (and not simply by operation of law) by the
successor entity or its Parent in connection with the Corporate Transaction with
appropriate adjustments to the number and type of securities of the successor
entity or its Parent subject to the Award and the exercise or purchase price
thereof which at least preserves the compensation element of the Award existing
at the time of the Corporate Transaction as determined in accordance with the
instruments evidencing the agreement to assume the Award.

     

    (e)           “Award” means the
grant of an Option, SAR, Restricted Stock, Restricted Stock Unit or other right
or benefit under the Plan.

     

    (f)          
 “Award
Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments
thereto.

     

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

     

    (h)           “Cause” means, with
respect to the termination by the Company or a Related Entity of the Grantee’s
Continuous Service, that such termination is for “Cause” as such term (or word
of like import) is expressly defined in a then-effective written agreement
between the Grantee and the Company or such Related Entity, or in the absence of
such then-effective written agreement and definition, is based on, in the
determination of the Administrator, the
Grantee’s:  (i) performance of any act or failure to perform any
act in bad faith and to the detriment of the Company or a Related Entity;
(ii) dishonesty, intentional misconduct or material breach of any agreement
with the Company or a Related Entity; or (iii) commission of a crime
involving dishonesty, breach of trust, or physical or emotional harm to any
person; provided, however, that with regard to any agreement that defines
“Cause” on the occurrence of or in connection with a Corporate Transaction or a
Change in Control, such definition of “Cause” shall not apply until a Corporate
Transaction or a Change in Control actually occurs.

     

    (i)          
 “Change in
Control” means a change in
ownership or control of the Company effected through either of the following
transactions:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    (i)           the
direct or indirect acquisition by any person or related group of persons (other
than an acquisition from or by the Company or by a Company-sponsored employee
benefit plan or by a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s shareholders which a majority of the Continuing
Directors who are not Affiliates or Associates of the offeror do not recommend
such shareholders accept, or

     

    (ii)         a
change in the composition of the Board over a period of thirty-six (36) months
or less such that a majority of the Board members (rounded up to the next whole
number) ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who are Continuing
Directors.

     

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

     

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

     

    (l)          
 “Company”
means Sonic Solutions, a California corporation, or any
successor corporation that adopts the Plan in connection with a Corporate
Transaction.

     

    (m)          “Compensation
Committee” means the Compensation Committee of the Board.

     

    (n)           “Consultant” means any
person (other than an Employee or a Director, solely with respect to rendering
services in such person’s capacity as a Director) who is engaged by the Company
or any Related Entity to render consulting or advisory services to the Company
or such Related Entity.

     

    (o)           “Continuing Directors”
means members of the Board who either (i) have been Board members
continuously for a period of at least thirty-six (36) months or (ii) have
been Board members for less than thirty-six (36) months and were elected or
nominated for election as Board members by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.

     

    (p)           “Continuous Service”
means that the provision of services to the Company or a Related Entity in any
capacity of Employee, Director or Consultant is not interrupted or
terminated.  In jurisdictions requiring notice in advance of an
effective termination as an Employee, Director or Consultant, Continuous Service
shall be deemed terminated upon the actual cessation of providing services to
the Company or a Related Entity notwithstanding any required notice period that
must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws.  A Grantee’s Continuous
Service shall be deemed to have terminated either upon an actual termination of
Continuous Service or upon the entity for which the Grantee provides services
ceasing to be a Related Entity.  Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence,
(ii) transfers among the Company, any Related Entity, or any successor, in
any capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as
otherwise provided in the Award Agreement).  Notwithstanding the
foregoing, except as otherwise determined by the Administrator, in the event of
any spin-off of a Related Entity, service as an Employee, Director or Consultant
for such Related Entity following such spin-off shall be deemed to be Continuous
Service for purposes of the Plan and any Award under the Plan.  An
approved leave of absence shall include sick leave, military leave, or any other
authorized personal leave.

     

    (q)           “Corporate
Transaction” means any of the following transactions, provided, however,
that the Administrator shall determine under parts (iv) and (v) whether multiple
transactions are related, and its determination shall be final, binding and
conclusive:

    
       

    

    (i)           a
merger or consolidation in which the Company is not the surviving entity, except
for a transaction the principal purpose of which is to change the state in which
the Company is incorporated;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (ii)     
    the sale, transfer or other disposition of all or
substantially all of the assets of the Company;

     

    (iii)         the
complete liquidation or dissolution of the Company;

     

    (iv)        any
reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in
which the Company is the surviving entity but (A) the shares of Common
Stock outstanding immediately prior to such merger are converted or exchanged by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than forty
percent (40%) of the total combined voting power of the Company’s outstanding
securities are transferred to a person or persons different from those who held
such securities immediately prior to such merger or the initial transaction
culminating in such merger, but excluding any such
transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction; or

     

    (v)         acquisition
in a single or series of related transactions by any person or related group of
persons (other than the Company or by a Company-sponsored employee benefit plan)
of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company’s outstanding securities but excluding any
such transaction or series of related transactions that the Administrator
determines shall not be a Corporate Transaction.

     

    (r)      
     “Director” means a
member of the Board or the board of directors of any Related
Entity.

     

    (s)           “Disability” means as
defined under the long-term disability policy of the Company or the Related
Entity to which the Grantee provides services regardless of whether the Grantee
is covered by such policy.  If the Company or the Related Entity to
which the Grantee provides service does not have a long-term disability plan in
place, “Disability” means that a Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by reason of
any medically determinable physical or mental impairment for a period of not
less than ninety (90) consecutive days.  A Grantee will not be
considered to have incurred a Disability unless he or she furnishes proof of
such impairment sufficient to satisfy the Administrator in its
discretion.

     

    (t)         
  “Employee” means any
person, including an Officer or Director, who is in the employ of the Company or
any Related Entity, subject to the control and direction of the Company or any
Related Entity as to both the work to be performed and the manner and method of
performance.  The payment of a director’s fee by the Company or a
Related Entity shall not be sufficient to constitute “employment” by the
Company.

     

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

     

    (v)           “Fair Market Value”
means, as of any date, the value of Common Stock determined as
follows:

     

    (i)           If
the Common Stock is listed on one or more established stock exchanges or
national market systems, including without limitation The Nasdaq Global Select
Market, The NASDAQ Global Market, or The NASDAQ Capital Market of The NASDAQ
Stock Market, LLC, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on the
principal exchange or system on which the Common Stock is listed (as determined
by the Administrator) on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;
 

    (ii)          If
the Common Stock is regularly quoted on an automated quotation system (including
the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market
Value shall be the closing sales price for such stock as quoted on such system
or by such securities dealer on the date of determination, but if selling prices
are not reported, the Fair Market Value of a share of Common Stock shall be the
mean between the high bid and low asked prices for the Common Stock on the date
of determination (or, if no such prices were reported on that date, on the last
date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (iii)
        In the absence of an
established market for the Common Stock of the type described in (i) and (ii),
above, the Fair Market Value thereof shall be determined by the Administrator in
good faith.

     

    (w)           “Grantee” means an
Employee who receives an Award under the Plan.

     

    (x)       
    “Non-Qualified Stock
Option” means an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

     

    (y)           “Officer” means a
person who is an officer of the Company or a Related Entity within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

     

    (z)        
   “Option” means an
option to purchase Shares pursuant to an Award Agreement granted under the
Plan.

     

    (aa)         “Parent” means a
“parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code.

     

    (bb)   
     “Plan” means this 2010
Inducement Equity Compensation Plan.

     

    (cc)         “Related Entity” means
any Parent or Subsidiary of the Company and any business, corporation,
partnership, limited liability company or other entity in which the Company or a
Parent or a Subsidiary of the Company holds a substantial ownership interest,
directly or indirectly.

     

    (dd)     
   “Replaced” means that
pursuant to a Corporate Transaction the Award is replaced with a comparable
stock award or a cash incentive program of the Company, the successor entity (if
applicable) or Parent of either of them which preserves the compensation element
of such Award existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same (or a more favorable) vesting
schedule applicable to such Award.  The determination of Award
comparability shall be made by the Administrator and its determination shall be
final, binding and conclusive.

     

    (ee)         “Restricted Stock”
means Shares issued under the Plan to the Grantee for such consideration, if
any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as
established by the Administrator.

     

    (ff)         
 “Restricted
Stock Units” means an Award which may be earned in whole or in part upon
the passage of time or the attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities or a
combination of cash, Shares or other securities as established by the
Administrator.

     

    (gg)         “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

     

    (hh)         “SAR” means a stock
appreciation right entitling the Grantee to Shares or cash compensation, as
established by the Administrator, measured by appreciation in the value of
Common Stock.

     

    (ii)           “Share” means a share
of the Common Stock.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (jj)           “Subsidiary” means a
“subsidiary corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code.

     

    3.           Stock Subject to the
Plan.

     

    (a)           Subject
to the provisions of Section 10, below, the maximum aggregate number of
Shares which may be issued pursuant to all Awards is 1,000,000
Shares.  Notwithstanding the foregoing, any Shares issued in
connection with Awards other than Options and SARs shall be counted against the
limit set forth herein as two (2) Shares for every one (1) Share issued in
connection with such Award (and shall be counted as two (2) Shares for every one
(1) Share returned or deemed not to have been issued from the Plan pursuant to
Section 3(b) below in connection with Awards other than Options and
SARs).  The Shares to be issued pursuant to Awards may be authorized,
but unissued, or reacquired Common Stock.

     

    (b)           Any
Shares covered by an Award (or portion of an Award) which is forfeited, canceled
or expires (whether voluntarily or involuntarily) shall be deemed not to have
been issued for purposes of determining the maximum aggregate number of Shares
which may be issued under the Plan.  Shares that actually have been
issued under the Plan pursuant to an Award shall not be returned to the Plan and
shall not become available for future issuance under the Plan, except that if
unvested Shares are forfeited, or repurchased by the Company at the lower of
their original purchase price or their Fair Market Value at the time of
repurchase, such Shares shall become available for future grant under the
Plan.

     

    4.           Administration of the
Plan.

     

    (a)           Plan
Administrator.

     

    (i)           Administration with Respect
to Officers.  With respect to grants of Awards to Employees who
are also Officers or Directors of the Company, the Plan shall be administered by
the Board or the Compensation Committee, which Compensation Committee shall be
constituted in such a manner as to satisfy the Applicable Laws and to permit
such grants and related transactions under the Plan to be exempt from
Section 16(b) of the Exchange Act in accordance with
Rule 16b-3.

     

    (ii)           Administration With Respect
to Other Employees.  With respect to grants of Awards to
Employees who are neither Directors nor Officers of the Company, the Plan shall
be administered by the Board or the Compensation Committee, which Compensation
Committee shall be constituted in such a manner as to satisfy the Applicable
Laws.

     

    (iii)           Administration
Errors.  In the event an Award is granted in a manner
inconsistent with the provisions of this subsection (a), such Award shall
be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

     

    (b)           Powers of the
Administrator.  Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

     

    (i)           subject
to Section 5 of the Plan, to select the Employees to whom Awards may be granted
from time to time hereunder;

     

    (ii)      
   to determine whether and to what extent Awards are granted
hereunder;

     

    (iii)         to
determine the number of Shares or the amount of other consideration to be
covered by each Award granted hereunder;

     

    (iv)        to
approve forms of Award Agreements for use under the Plan;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (v)         to
determine the terms and conditions of any Award granted hereunder;

     

    (vi)        
to amend the terms of any outstanding Award granted under the Plan, including as
provided in Section 10 below, provided that (A) any amendment that would
adversely affect the Grantee’s rights under an outstanding Award shall not be
made without the Grantee’s written consent, (B) the reduction of the base
appreciation amount of any SAR awarded under the Plan shall be subject to
shareholder approval, (C) the modification of the exercise price of any Option
awarded under the Plan shall be subject to shareholder approval, and
(D) canceling an Option or SAR at a time when its exercise price or base
appreciation amount (as applicable) exceeds the Fair Market Value of the
underlying Shares, in exchange for another Option, SAR, Restricted Stock, or
other Award or cash shall be subject to shareholder approval, unless the
cancellation and exchange occurs in connection with a Corporate
Transaction.  Notwithstanding the foregoing, canceling an Option
(other than an Option granted to an Officer or Director) or SAR in exchange for
another Option, SAR, Restricted Stock, or other Award with an exercise price,
purchase price or base appreciation amount (as applicable) that is equal to or
greater than the exercise price or base appreciation amount (as applicable) of
the original Option or SAR shall not be subject to shareholder
approval;

     

    (vii)     
  to construe and interpret the terms of the Plan and Awards,
including without limitation, any notice of award or Award Agreement, granted
pursuant to the Plan;

     

    (viii)     
 to grant Awards to Employees employed outside the United States on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Administrator, be necessary or desirable to further the purpose
of the Plan; and

     

    (ix)         to
take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

     

    The
express grant in the Plan of any specific power to the Administrator shall not
be construed as limiting any power or authority of the Administrator; provided
that the Administrator may not exercise any right or power reserved to the
Board.  Any decision made, or action taken, by the Administrator or in
connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

     

    (c)           Indemnification. In
addition to such other rights of indemnification as they may have as members of
the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related
Entity to whom authority to act for the Board, the Administrator or the Company
is delegated shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any claim, investigation, action, suit or proceeding, or in
connection with any appeal therein, 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 the Company) or paid
by them in satisfaction of a judgment in any such claim, investigation, action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct;
provided, however, that within thirty (30) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.

     

    5.           Eligibility.  Awards
may only be granted to Employees so long as the following requirements are met:
(a) the Employee was not previously an Employee or Director of the Company or
the Employee is returning to the employment of the Company following a bonafide
period of non-employment or non-service to the Company and (b) the grant of an
Award under the Plan is a material inducement to the Employee's decision to
enter into the employment of the Company. Notwithstanding the foregoing, an
Employee may be granted an Award in connection with a merger, acquisition or
similar transaction, to the extent permitted by the Nasdaq rules governing
stockholder approval of inducement equity compensation plans.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    6.           Terms and Conditions of
Awards.

     

    (a)           Types of Awards. The
Administrator is authorized under the Plan to award any type of arrangement to
an Employee that is not inconsistent with the provisions of the Plan and that by
its terms involves or might involve the issuance of (i) Shares,
(ii) cash or (iii) an Option, a SAR, or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and with an
exercise or conversion privilege related to the passage of time, the occurrence
of one or more events, or the satisfaction of performance criteria or other
conditions.  Such awards include, without limitation, Options, SARs,
sales or bonuses of Restricted Stock or Restricted Stock Units, and an Award may
consist of one such security or benefit, or two (2) or more of them in any
combination or alternative.

     

    (b)           Designation of
Award.  Each Award shall be designated in the Award
Agreement.

     

    (c)           Conditions of
Award.  Subject to the terms of the Plan, the Administrator
shall determine the provisions, terms, and conditions of each Award including,
but not limited to, the Award vesting schedule, repurchase provisions, rights of
first refusal, forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment contingencies, and
satisfaction of any performance criteria.  The performance criteria
established by the Administrator may be based on any one of, or combination of,
the following: (i) increase in share price, (ii) earnings per share, (iii) total
shareholder return, (iv) operating margin, (v) gross margin, (vi) return on
equity, (vii) return on assets, (viii) return on investment, (ix) operating
income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii)
revenue, (xiv) expenses, (xv) earnings before interest, taxes and depreciation,
(xvi) economic value added, (xvii) market share and (xviii) other measures of
performance selected by the Administrator.  The performance criteria
may be applicable to the Company, Related Entities and/or any individual
business units of the Company or any Related Entity.  Partial
achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award
Agreement.

     

    (d)           Acquisitions and Other
Transactions.  The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or
obligations to grant future awards in connection with the Company or a Related
Entity acquiring another entity, an interest in another entity or an additional
interest in a Related Entity whether by merger, stock purchase, asset purchase
or other form of transaction.

     

    (e)           Deferral of Award
Payment.  The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer
receipt of consideration upon exercise of an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Grantee to
payment or receipt of Shares or other consideration under an
Award.  The Administrator may establish the election procedures, the
timing of such elections, the mechanisms for payments of, and accrual of
interest or other earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral
program.  If the vesting or receipt of Shares under an Award is
deferred to a later date, any amount (whether denominated in Shares or cash)
paid in addition to the original number of Shares subject to such Award will not
be treated as an increase in the number of Shares subject to the Award if the
additional amount is based either on a reasonable rate of interest or on one or
more predetermined actual investments such that the amount payable by the
Company at the later date will be based on the actual rate of return of a
specific investment (including any decrease as well as any increase in the value
of an investment).

     

    (f)
           Separate
Programs.  The Administrator may establish one or more separate
programs under the Plan for the purpose of issuing particular forms of Awards to
one or more classes of Grantees on such terms and conditions as determined by
the Administrator from time to time.

     

    (g)           Early
Exercise.  The Award Agreement may, but need not, include a
provision whereby the Grantee may elect at any time while an Employee, Director
or Consultant to exercise any part or all of the Award prior to full vesting of
the Award.  Any unvested Shares received pursuant to such exercise may
be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be
appropriate.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (h)           Term of
Award.  The term of each Award shall be the term stated in the
Award Agreement.  Notwithstanding the foregoing, the specified term of
any Award shall not include any period for which the Grantee has elected to
defer the receipt of the Shares or cash issuable pursuant to the
Award.

     

    (i)  
         Transferability of
Awards.  Awards shall be transferable (i) by will and by
the laws of descent and distribution and (ii) during the lifetime of the
Grantee, to the extent and in the manner authorized by the
Administrator.  Notwithstanding the foregoing, the Grantee may
designate one or more beneficiaries of the Grantee’s Award in the event of the
Grantee’s death on a beneficiary designation form provided by the
Administrator.

     

    (j)   
        Vesting of Restricted Stock
and Restricted Stock Units.  Awards of Restricted Stock and
Restricted Stock Units issued under the Plan shall vest and be released from the
risk of forfeiture over a period of no less than three (3) years measured from
the date of issuance of the Award.  Notwithstanding the foregoing,
Awards of Restricted Stock and Restricted Stock Units subject to
performance-based vesting may vest and be released from the risk of forfeiture
over a period of no less than one (1) year measured from the date of issuance of
the Award.

     

    (k)           Time of Granting
Awards.  The date of grant of an Award shall for all purposes
be the date on which the Administrator makes the determination to grant such
Award, or such other date as is determined by the Administrator.

     

    7.           Award Exercise or Purchase
Price, Consideration and Taxes.

     

    (a)           Exercise or Purchase
Price.  The exercise or purchase price, if any, for an Award
shall be as follows:

     

    (i)           In
the case of a Non-Qualified Stock Option, the per Share exercise price shall be
not less than one hundred percent (100%) of the Fair Market Value per Share on
the date of grant.

     

    (ii)          In
the case of SARs, the base appreciation amount shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of
grant.

     

    (iii)         In
the case of other Awards, such price as is determined by the
Administrator.

     

    (iv)        Notwithstanding
the foregoing provisions of this Section 7(a) in the case of an Award issued
pursuant to Section 6(d), above, the exercise or purchase price for the
Award shall be determined in accordance with the provisions of the relevant
instrument evidencing the agreement to issue such Award.
 

    (b)           Consideration.  Subject
to Applicable Laws, the consideration to be paid for the Shares to be issued
upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator.  In addition to any other types of
consideration the Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan the
following:

     

    (i)           cash;

     

    (ii)      
   check;

     

    (iii)         surrender
of Shares or delivery of a properly executed form of attestation of ownership of
Shares as the Administrator may require which have a Fair Market Value on the
date of surrender or attestation equal to the aggregate exercise price of the
Shares as to which said Award shall be exercised;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (iv)        with
respect to Options, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company sufficient funds
to cover the aggregate exercise price payable for the purchased Shares and
(B) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order
to complete the sale transaction;

     

    (v)         with
respect to Options, payment through a “net exercise” such that, without the
payment of any funds, the Grantee may exercise the Option and receive the net
number of Shares equal to (i) the number of Shares as to which the Option
is being exercised, multiplied by (ii) a fraction, the numerator of which
is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which
is such Fair Market Value per Share (the number of net Shares to be received
shall be rounded down to the nearest whole number of Shares); or

     

    (vi)        any
combination of the foregoing methods of payment.

     

    The
Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in
Section 4(b)(iv), or by other means, grant Awards which do not permit all
of the foregoing forms of consideration to be used in payment for the Shares or
which otherwise restrict one or more forms of consideration.

     

    (c)           Taxes.  No
Shares shall be delivered under the Plan to any Grantee or other person until
such Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of any non-U.S., federal, state, or local
income and employment tax withholding obligations.  Upon exercise or
vesting of an Award the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations, including, but not limited too, by
surrender of the whole number of Shares covered by the Award sufficient to
satisfy the minimum applicable tax withholding obligations incident to the
exercise or vesting of an Award (reduced to the lowest whole number of Shares if
such number of Shares withheld would result in withholding a fractional Share
with any remaining tax withholding settled in cash).

     

    (d)           “Net Exercise”
Matters.  For purposes of the Plan, if Shares subject to Awards
are surrendered in payment of the exercise price as provided in Section 7(b)
above or in payment of tax obligations, as provided in Section 7(c) above, those
Shares will be deemed issued pursuant to the Plan.

     

    8.           Exercise of
Award.

     

    (a)           Procedure for Exercise;
Rights as a Shareholder.

     

    (i)           Any
Award granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator under the terms of the Plan and
specified in the Award Agreement.

     

    (ii)
         An Award shall be
deemed to be exercised when written notice of such exercise has been given to
the Company in accordance with the terms of the Award by the person entitled to
exercise the Award and full payment for the Shares with respect to which the
Award is exercised, including, to the extent selected, use of the broker-dealer
sale and remittance procedure to pay the purchase price as provided in
Section 7(b)(iv).

     

    (b)           Exercise of Award Following
Termination of Continuous Service.

     

    (i)           An
Award may not be exercised after the termination date of such Award set forth in
the Award Agreement and may be exercised following the termination of a
Grantee’s Continuous Service only to the extent provided in the Award
Agreement.

     

    
      
        
        

      

      
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    (ii)         Where
the Award Agreement permits a Grantee to exercise an Award following the
termination of the Grantee’s Continuous Service for a specified period, the
Award shall terminate to the extent not exercised on the last day of the
specified period or the last day of the original term of the Award, whichever
occurs first.

     

    9.           Conditions Upon Issuance of
Shares.

     

    (a)           If
at any time the Administrator determines that the delivery of Shares pursuant to
the exercise, vesting or any other provision of an Award is or may be unlawful
under Applicable Laws, the vesting or right to exercise an Award or to otherwise
receive Shares pursuant to the terms of an Award shall be suspended until the
Administrator determines that such delivery is lawful and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.  The Company shall have no obligation to effect any
registration or qualification of the Shares under federal or state
laws.

     

    (b)           As
a condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any Applicable
Laws.

     

    10.         Adjustments Upon Changes in
Capitalization.  Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Award, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Awards have yet been granted or which have been
returned to the Plan, the exercise or purchase price of each such outstanding
Award, as well as any other terms that the Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares, or
similar transaction affecting the Shares, (ii) any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) any other transaction with respect
to Common Stock including a corporate merger, consolidation, acquisition of
property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without
receipt of consideration.”  In the event of any distribution of cash
or other assets to shareholders other than a normal cash dividend, the
Administrator shall also make such adjustments as provided in this Section 10 or
substitute, exchange or grant Awards to effect such adjustments (collectively
“adjustments”).  Any such adjustments to outstanding Awards will be
effected in a manner that precludes the enlargement of rights and benefits under
such Awards.  In connection with the foregoing adjustments, the
Administrator may, in its discretion, prohibit the exercise of Awards or other
issuance of Shares, cash or other consideration pursuant to Awards during
certain periods of time.  Such adjustment shall be made by the
Administrator and its determination shall be final, binding and
conclusive.  Except as the Administrator determines and as provided in
Section 4(b)(vi) above, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.

     

    11.         Corporate Transactions and
Changes in Control.

     

    (a)           Termination of Award to
Extent Not Assumed in Corporate Transaction.  Effective upon
the consummation of a Corporate Transaction, all outstanding Awards under the
Plan shall terminate.  However, all such Awards shall not terminate to
the extent they are Assumed in connection with the Corporate
Transaction.

     

    (b)           Acceleration of Award Upon
Corporate Transaction or Change in Control.

     

    (i)           Corporate
Transaction.  Except as provided otherwise in an individual
Award Agreement, in the event of a Corporate Transaction, for the portion of
each Award that is neither Assumed nor Replaced, such portion of the Award shall
automatically become fully vested and exercisable and be released from any
repurchase or forfeiture rights (other than repurchase rights exercisable at
Fair Market Value) for all of the Shares at the time represented by such portion
of the Award, immediately prior to the specified effective date of such
Corporate Transaction, provided that the Grantee’s Continuous Service has not
terminated prior to such date.  The portion of the Award that is not
Assumed shall terminate under subsection (a) of this Section 11 to the extent
not exercised prior to the consummation of such Corporate
Transaction.

     

    
      
        
        

      

      
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    (ii)    
     Change in
Control.  Except as provided otherwise in an individual Award
Agreement, in the event of a Change in Control (other than a Change in Control
which also is a Corporate Transaction), each Award which is at the time
outstanding under the Plan automatically shall become fully vested and
exercisable and be released from any repurchase or forfeiture rights (other than
repurchase rights exercisable at Fair Market Value), immediately prior to the
specified effective date of such Change in Control, for all of the Shares at the
time represented by such Award, provided that the Grantee’s Continuous Service
has not terminated prior to such date.

     

    12.         Effective Date and Term of
Plan.  The Plan shall become effective upon its adoption by the
Board.  It shall continue in effect for a term of ten (10) years
unless sooner terminated.

     

    13.         Amendment, Suspension or
Termination of the Plan.

     

    (a)           The
Board may at any time amend, suspend or terminate the Plan;

     

    (b)           No
Award may be granted during any suspension of the Plan or after termination of
the Plan.

     

    (c)           No
suspension or termination of the Plan (including termination of the Plan under
Section 12, above) shall adversely affect any rights under Awards already
granted to a Grantee.

     

    14.         Reservation of
Shares.

     

    (a)           The
Company, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     

    (b)           The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

     

    15.         No Effect on Terms of
Employment Relationship.  The Plan shall not confer upon any
Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or any
Related Entity to terminate the Grantee’s Continuous Service at any time, with
or without Cause, and with or without notice.  The ability of the
Company or any Related Entity to terminate the employment of a Grantee who is
employed at will is in no way affected by its determination that the Grantee’s
Continuous Service has been terminated for Cause for the purposes of this
Plan.

     

    16.         No Effect on Retirement and
Other Benefit Plans.  Except as specifically provided in a
retirement or other benefit plan of the Company or a Related Entity, Awards
shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Company or a Related Entity, and
shall not affect any benefits under any other benefit plan of any kind or any
benefit plan subsequently instituted under which the availability or amount of
benefits is related to level of compensation.  The Plan is not a
“Retirement Plan” or “Welfare Plan” under the Employee Retirement Income
Security Act of 1974, as amended.

     

    17.         Unfunded
Obligation.  Grantees shall have the status of general
unsecured creditors of the Company.  Any amounts payable to Grantees
pursuant to the Plan shall be unfunded and unsecured obligations for all
purposes, including, without limitation, Title I of the Employee Retirement
Income Security Act of 1974, as amended.  Neither the Company nor any
Related Entity shall be required to segregate any monies from its general funds,
or to create any trusts, or establish any special accounts with respect to such
obligations.  The Company shall retain at all times beneficial
ownership of any investments, including trust investments, which the Company may
make to fulfill its payment obligations hereunder.  Any investments or
the creation or maintenance of any trust or any Grantee account shall not create
or constitute a trust or fiduciary relationship between the Administrator, the
Company or any Related Entity and a Grantee, or otherwise create any vested or
beneficial interest in any Grantee or the Grantee’s creditors in any assets of
the Company or a Related Entity. The Grantees shall have no claim against the
Company or any Related Entity for any changes in the value of any assets that
may be invested or reinvested by the Company with respect to the
Plan.

     

    
      
        
        

      

      
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    18.         Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular.  Use of the term “or” is not
intended to be exclusive, unless the context clearly requires
otherwise.

     

    19.         Nonexclusivity of the
Plan.  Neither the adoption of the Plan by the Board, the
submission of the Plan to the shareholders of the Company for approval, nor any
provision of the Plan will be construed as creating any limitations on the power
of the Board to adopt such additional compensation arrangements as it may deem
desirable, including, without limitation, the granting of Awards otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
 

    
      
         

      

      
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