Document:

Exhibit 4.1

 

[Face of certificate]

 

	
  COMMON STOCK

  	
   

  	
   

  	
   

  	
  COMMON STOCK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  N U M B E R

  	
   

  	
  

  	
   

  	
  S H A R E S

  
	
   

  	
   

  	
   

  	
   

  
	
  VF

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INCORPORATED UNDER THE LAWS
  OF

  THE STATE OF DELAWARE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  SEE REVERSE FOR

  
	
   

  	
   

  	
   

  	
   

  	
  CERTAIN DEFINITIONS

  
	
  THIS CERTIFICATE IS TRANSFERABLE IN
CANTON, MA,
  JERSEY CITY, NJ OR

  NEW YORK, NY

  	
   

  	
   

  	
   

  	
  CUSIP 92342Y 10 9

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

THIS CERTIFIES THAT

 

 

 

 

is the record holder of

 

 

FULLY PAID AND NONASSESSABLE
SHARES OF COMMON STOCK, PAR VALUE OF $0.01 PER SHARE, OF

 

VeriFone
Holdings, Inc.

 

transferable on the books of the Corporation by the holder hereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid unless countersigned and
registered by the Transfer Agent and Registrar.

WITNESS the facsimile
signatures of its duly authorized officers.

 

Dated:

 

 

	
   

  	
   

  	
   

  
	
  SECRETARY

  	
   

  	
  CHAIRMAN AND CHIEF
  EXECUTIVE OFFICER

  

 

 

	
  COUNTERSIGNED AND REGISTERED:

  
	
  EQUISERVE TRUST COMPANY, N.A.

  
	
  TRANSFER AGENT

  	
   

  
	
  AND REGISTRAR 

  	
   

  
	
   

  	
   

  
	
  BY:

  	
   

  	
   

  
	
   

  	
  AUTHORIZED SIGNATURE

  	
   

  
				

 

 

[Reverse of certificate]

 

VeriFone Holdings, Inc.

 

The following abbreviations,
when used in the inscription on the face of this certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

	
  TEN COM

  	
  —

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT —

  	
   

  	
  Custodian

  	
   

  	
   

  
	
  TEN ENT

  	
  —

  	
  as tenants by the entireties

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	
   

  
	
  JT TEN

  	
  —

  	
  as joint tenants with right of

  	
   

  	
  under Uniform Gifts to Minors

  
	
   

  	
   

  	
  survivorship and not as tenants

  	
   

  	
  Act

  	
   

  
	
   

  	
   

  	
  in common

  	
   

  	
   

  	
  (State)

  
	
   

  	
   

  	
   

  	
  UNIF TRF MIN ACT —

  	
   

  	
  Custodian (until age      )

  
	
   

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  under Uniform Transfers

  
	
   

  	
   

  	
   

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  to Minors Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  
											

 

Additional abbreviations may
also be used though not in the above list.

 

FOR
VALUE RECEIVED, _________________________________ hereby sell, assign and
transfer unto

 

	
  PLEASE INSERT SOCIAL
  SECURITY OR OTHER

  IDENTIFYING NUMBER OF ASSIGNEE

  	
   

  
	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  (PLEASE PRINT OR TYPEWRITE
  NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   Shares 

  
	
  of the common stock represented by the within Certificate, and do
  hereby irrevocably constitute and appoint

  
	
   

  
	
   

  	
  Attorney

  
	
  to transfer the said stock on the books of the within named
  Corporation with full power of substitution in the premises.

  
	
   

  
	
  Dated

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  x

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  x

  	
   

  
	
   

  	
  NOTICE :

  	
  THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
  WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
  ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

  
	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
  THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
  INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
  UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
  PURSUANT TO S.E.C. RULE 17Ad-15.Exhibit 10.13

 

VERIFONE HOLDINGS, INC.

OUTSIDE
DIRECTORS’ STOCK OPTION PLAN

 

ARTICLE I

 

Purpose of Plan

 

The Outside Directors’
Stock Option Plan (the “Plan”) of VeriFone Holdings, Inc., a Delaware
corporation (the “Company”), adopted by the Board of Directors of the
Company on January      , 2005 (the “Approval
Date”), for members of the Board of Directors of Company who are not
employees of the Company or representatives of major stockholders of the
Company (such members of the Board, the “Outside Directors”), is
intended to advance the best interests of the Company and its Subsidiaries by
allowing the Outside Directors to acquire an ownership interest in the
Company.  The availability and offering
of stock options under the Plan also increases the Company’s ability to attract
and retain individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth, and profitability of the Company
depends.  By adopting the plan, the Board
wishes to create, during the ten-year term of the Plan, an equity-oriented
compensation plan for and to reward the Outside Directors who will contribute
to the growth of the Company.  The stock
options granted pursuant to this Plan will enable the Outside Directors to
share in the resulting increase in the equity value of the Company.  This Plan shall terminate on the tenth
anniversary of the Approval Date; no Option shall be granted, however, after
the third anniversary of the Approval Date.

 

All options granted under
the Plan and the issuance of any Shares upon the exercise of options are
intended to qualify for an exemption (the “Exemptions”) from
(i) the registration requirements under the Securities Act of 1933, as
amended (the “Act”), pursuant to Rule 701 of the Act, and (ii) the
qualification requirements under the California Corporate Securities Law of
1968, as amended (the “Blue Sky Law”), pursuant to Section 25102(o)
of the Blue Sky Law.  In the event that
any provision of the Plan would cause any option granted under the Plan to not
qualify for the Exemptions, the Plan shall be deemed automatically amended to
the extent necessary to cause all Options (as defined in Article IV
below) granted under the Plan to qualify for the Exemptions.

 

ARTICLE II

 

Definitions

 

For purposes of the Plan,
except where the context clearly indicates otherwise, the following terms shall
have the meanings set forth below:

 

“Affiliate” shall
mean, with respect to any Person, any other Person, which, directly or
indirectly, controls, is controlled by, or is under common control with such
Person.

 

“Board” shall mean
the Board of Directors of the Company.

 

 

“Cause” shall mean
(i) the commission of a felony or a crime involving moral turpitude or the
commission of any other act or omission involving material dishonesty, material
disloyalty, or fraud with respect to the Company or any of its Subsidiaries or
any of their customers or suppliers, (ii) conduct tending to bring the Company
or any of its Subsidiaries into public disgrace or disrepute, (iii) a
Participant’s failure (other than by reason of Disability) to carry out
effectively his or her duties and obligations as a member of the Board of the
Company, as determined in the reasonable judgment of the Board, (iv) gross
negligence or willful misconduct with respect to the Company, or (v) any
material breach of the agreement pursuant to which the Participant’s Options
were granted.

 

“Code” shall mean
the Internal Revenue Code of 1986, as amended, and any successor statute.

 

“Committee” shall
mean the committee of the Board that may be designated by the Board to
administer the Plan.

 

“Common Shares”
shall mean the Company’s common stock, par value $.01 per share, and any other
shares into which such stock may be changed or converted by reason of a
recapitalization, reorganization, merger, consolidation, or any other change in
the corporate structure or capital stock of the Company.

 

“Company” shall
mean VeriFone Holdings, Inc., a Delaware corporation and (except to the extent
the context requires otherwise) any subsidiary corporation of VeriFone
Holdings, Inc. as such term is defined in Section 424(f) of the Code.

 

“Date of Termination”
shall mean, with respect to any Participant, the effective date of the
termination of such Participant’s tenure as a member of the Board..

 

“Disability” shall
mean the inability, due to documented illness, accident, injury, physical or
mental incapacity, or other disability, of any Participant to carry out
effectively his or her duties and obligations as a member of the Board of the
Company for a period of at least 90 consecutive days or for shorter periods
aggregating at least 120 days (whether or not consecutive) during any twelve-month
period, as determined in the reasonable judgment of the Board.

 

“Expiration Date”
shall have the meaning set forth in Article VI.

 

“Fair Market Value”
of the Common Shares shall mean, as of the date in question, the officially-quoted
closing selling price of the stock (or if no selling price is quoted, the bid
price) on the principal securities exchange on which the Common Shares is the
listed for trading (including for this purpose the Nasdaq
National Market) (the “Market”) for the applicable trading day or, if
the Common Stock is not then listed or quoted on the Market, the Fair Market
Value shall be the fair value of the Common Shares, taking into account all
relevant factors determinative of value, as determined solely by the Board; provided,
however, that when shares received upon exercise of an Option are immediately
sold in the open market, the net sale price received may be used to determine
the Fair Market Value of any shares used to pay the exercise price or
withholding taxes and to compute the withholding taxes; provided
further, that in the

 

2

 

case of a Sale of
the Company, the Fair Market Value of the Common Shares shall be the price per
Common Share in such transaction, as solely determined by the Board.

 

“Incentive Stock
Option” shall have the meaning set forth in Article V.

 

“Investors” shall
mean GTCR Fund VII, L.P., a Delaware limited partnership, and any other
investment fund managed by GTCR Golder Rauner, L.L.C.

 

“Nonqualified Stock
Option” shall have the meaning set forth in Article V.

 

“Option Agreement”
shall have the meaning set forth in Article VI.

 

“Options” shall
have the meaning set forth in Article IV.

 

“Outside Director”
shall have the meaning set forth in Article I.

 

“Participant”
shall mean any Outside Director who has been selected by the Board to
participate in the Plan.

 

“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, and a governmental entity or any department, agency, or political
subdivision thereof.

 

“Plan” shall have
the meaning set forth in Article I.

 

“Plan Year” shall
mean any 12-month period beginning on the Approval Date or any anniversary
thereof.

 

“Public Offering”
shall mean an initial public offering registered under the Act of equity
securities of the Company, as approved by the Board and the Investors.

 

“Sale of the Company”
means any transaction or series of transactions as a consequence of which any
Person or group of related Persons (other than the Investors and their
Affiliates) in the aggregate acquire(s) (i) capital stock of the Company
possessing the voting power (other than voting rights accruing only in the
event of a default, breach or event of noncompliance) to elect a majority of
the Company’s board of directors (whether by merger, consolidation,
reorganization, combination, sale or transfer of the Company’s capital stock,
shareholder or voting agreement, proxy, power of attorney or otherwise) or (ii)
all or substantially all of the Company’s assets determined on a consolidated
basis; provided that a Public Offering shall not constitute a Sale of
the Company.

 

“Shares” shall
have the meaning set forth in Article IV.

 

“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association, or business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other

 

3

 

Subsidiaries of
that Person or a combination thereof, or (ii) if a limited liability
company, partnership, association, or other business entity (other than a
corporation), a majority of partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes hereof, a Person
or Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association, or other business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association, or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association, or other business
entity.  For purposes hereof, references
to a “Subsidiary” of any Person shall be given effect only at such times
that such Person has one or more Subsidiaries, and, unless otherwise indicated,
the term “Subsidiary” refers to a Subsidiary of the Company.

 

“Treasury Regulations”
means the Federal income tax regulations, including any temporary of proposed
regulations, promulgated under the Code.

 

ARTICLE III

 

Administration

 

The Plan shall be
administered by the Committee; provided that if for any reason the
Committee shall not have been appointed by the Board, all authority and duties
of the Committee shall be vested in and exercised by the Board.  Subject to the limitations of the Plan, the
Committee shall have the sole and complete authority to (i) select
Participants, (ii) grant Options (as defined in Article IV below)
to Participants in such forms and amounts as it shall determine, (iii) impose
such limitations, restrictions, and conditions upon such Options as it shall
deem appropriate, (iv) interpret the Plan and adopt, amend, and rescind
administrative guidelines and other rules and regulations relating to the Plan,
(v) correct any defect or omission or reconcile any inconsistency in the Plan
or in any Option granted hereunder, and (vi) make all other determinations and
take all other actions necessary or advisable for the implementation and
administration of the Plan, subject to such limitations as may be imposed by
the Code on the grant of Incentive Stock Options or other applicable law.  The Committee’s determinations on matters
within its authority shall be conclusive and binding upon the Participants, the
Company, and all other Persons.  The
validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with applicable federal
and state laws and rules and regulations promulgated pursuant thereto.  No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such
member, by any other member of the Committee, or by any officer of the Company
in connection with the performance of duties under the Plan, except for such
person’s own willful misconduct or as expressly provided by statute.  All expenses associated with the
administration of the Plan shall be borne by the Company.  The Committee may, as approved by the Board
and to the extent permissible by law, delegate any of its authority hereunder
to such persons as it deems appropriate.

 

4

 

ARTICLE IV

 

Limitation on Aggregate
Shares

 

The number of Common
Shares with respect to which options may be granted under the Plan (the “Options”)
and which may be issued upon the exercise thereof shall not exceed, in the
aggregate, 225,000 Common Shares (the “Shares”); provided that
the type and the aggregate number of shares which may be subject to Options
shall be subject to adjustment in accordance with the provisions of Section 6.9
below, and further  provided that to the extent any Options expire
unexercised or are canceled, terminated, or forfeited in any manner without the
issuance of Common Shares thereunder, such shares shall again be available
under the Plan; and provided  further that at no time shall the
total number of shares issuable upon exercise of all
outstanding options for the purchase of shares of the Company’s capital stock
and the total number of shares provided under any stock bonus or similar plan
of the Company (including, without limitation, Shares issuable
pursuant to the Plan) exceed a number of shares equal to 30% of the then
outstanding shares of the Company (as calculated in accordance with Rule
260.140.45 of the Blue Sky Law).  The
Shares available under the Plan may be either authorized and unissued shares, treasury shares, or a combination thereof,
as the Committee shall determine.

 

ARTICLE V

 

Awards

 

5.1                                 Options.  The Committee may grant Options to
Participants in accordance with this Article V.

 

5.2                                 Form
of Option.  Options granted under
this Plan shall be presumed to be nonqualified stock options (the “Nonqualified
Stock Options”) and are not intended to be incentive stock options within
the meaning of Section 422 of the Code or any successor provision (“Incentive
Stock Options”).  It is the Company’s
intent that Nonqualified Stock Options granted under the Plan not be classified
as Incentive Stock Options, and that any ambiguities in construction be
interpreted in order to effectuate such intent.

 

5.3                                 Exercisability. 
Options granted hereunder shall be exercisable at such times and under
such circumstances as determined by the Committee and as shall be permissible
under the terms of the Plan, and as specified in the Option Agreement.

 

5.4                                 Payment
of Exercise Price.  Options shall be
exercised in whole or in part by written notice to the Company (to the
attention of the Company’s Secretary) accompanied by payment in full of the
option exercise price.  Payment of the
option exercise price shall be made (i) in cash (including check, bank draft,
or money order), (ii) if approved by the Committee in connection with a Sale of
the Company, by delivery of a demand promissory note made by the Participant in
favor of the Company, (iii) by delivery of outstanding shares of Common Stock
that have been owned by the Participant for a minimum of six months and one day
with a Fair Market Value on the date of exercise equal to the aggregate
exercise price payable with respect to the options’ exercise, (iv) through a “same
day sale” commitment from a Participant and a broker-dealer that is a member of
the National Association of Securities Dealers, Inc. specified

 

5

 

by the Committee (the “NASD
Dealer”) whereby the Participant irrevocably elects to exercise the Option
and to sell a portion of the Option Shares so purchased to pay for the Option
Price and whereby the NASD Dealer irrevocably commits
upon receipt of such Option Shares to forward the Option Price directly to the
Company, (v) through a “margin” commitment from a Participant and the NASD Dealer reasonably acceptable to the Committee whereby
the Participant irrevocably elects to exercise such Participant’s Option and to
pledge the Option Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the Option Price, and whereby the NASD
Dealer irrevocably commits upon receipt of the Option Shares to forward the
Option Price to the Company, or (vi) by any combination of the foregoing.  The methods of payment set forth in clauses
(iii) through (v) above shall apply only if there is a public market for the
Common Shares.

 

5.5                                 Terms
of Options.  The term during which
each Option may be exercised shall be determined by the Committee, but, except
as otherwise provided herein, in no event shall an option be exercisable in
whole or in part, more than seven (7) years from the date it is granted.  All rights to purchase Shares pursuant to an
Option shall, unless sooner terminated, expire at the date designated by the
Committee.  The Shares constituting each
installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise requirements
as may be designated by the Committee. 
Unless otherwise provided herein or in the terms of the related grant, a
Participant may exercise an Option only if he or she is, and has continuously
since the date the Option was granted, been an Outside Director.  Prior to the exercise of an Option and
delivery of the Shares represented thereby, the Participant shall have no
rights as a stockholder with respect to any Shares covered by such outstanding
Option (including any dividend or voting rights).

 

5.6                                 Limitations
on Grants.

 

(a)                                  The
Committee may not grant an Option or Options to any Participant that would
permit such Participant to acquire, in the aggregate, 30,000 or more Shares
without the prior approval of a majority of the members of the Board.

 

(b)                                 The
Committee shall not grant any Option if, as a result of such grant or (assuming
that all other Options have been fully exercised) the exercise of such Option,
the Company would be required to register any of its equity securities under
the Act.

 

ARTICLE VI

 

General Provisions

 

6.1                                 Conditions
and Limitations on Exercise.  Except
as otherwise provided in this Plan, Options may be made exercisable in one or
more installments, upon the happening of certain events, upon the passage of a
specified period of time, upon the fulfillment of certain conditions, or upon
the achievement by the Company of certain performance goals, as the Committee
shall decide in each case when the Options are granted.

 

6.2                                 Sale
of the Company.  In the event of a
Sale of the Company, the Committee may terminate all or any portion of any
Option not exercised in connection therewith.

 

6

 

6.3                                 Corporate
Transaction.  Unless the Options held
by a Participant are terminated in accordance with Section 6.2
above, after the consummation of any “Corporate Transaction” (as defined in
Treasury Regulation §1.424-1(a)(3))), if the requirements of Treasury
Regulation §1.424-1 would be met with respect to the substitution or assumption
of such Option assuming the Option were an incentive stock option as described
in Code §422, the corporation that is the employer of the Participant after
such Corporate Transaction or a related corporation (within the meaning of
Treasury Regulation §1.421-1(i)(2)) shall, by reason of the Corporate
Transaction, (i) substitute a new option for such Options or (ii) assume such
Options. If the requirements of Treasury Regulation §1.424-1 cannot be
satisfied even assuming the Option were an incentive stock option as described
in Code §422, then such Options shall automatically be terminated.

 

6.4                                 Written
Agreement.  Each Option granted
hereunder to a Participant shall be embodied in a written agreement (an “Option
Agreement”) which shall be signed by the Participant and by the Chief
Executive Officer of the Company for and in the name and on behalf of the Company
and shall be subject to the terms and conditions of the Plan prescribed in the
Option Agreement.

 

6.5                                 Listing,
Registration, and Compliance with Laws and Regulations.  Options shall be subject to the requirement
that, if at any time the Committee shall determine, in its discretion, that the
listing, registration, or qualification of the Common Shares subject to the
Options upon any securities exchange or under any state or federal securities
or other law or regulation, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to or in connection
with the granting of the Options or the issuance or purchase of Common Shares
thereunder, then no Options may be granted or exercised, in whole or in part,
unless such listing, registration, qualification, consent, or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee.  The holders of such Options
shall supply the Company with such certificates, representations, and information
as the Company shall request and shall otherwise cooperate with the Company in
obtaining such listing, registration, qualification, consent, or approval.  In the case of officers and other Persons
subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended, the Committee may at any time impose any limitations upon the exercise
of an Option that, in the Committee’s discretion, are necessary or desirable in
order to comply with such Section 16(b) and the rules and regulations
thereunder.  If the Company, as part of
an offering of securities or otherwise, finds it desirable because of federal
or state regulatory requirements to reduce the period during which any Options
may be exercised, then the Committee, may, in its discretion and without the
Participant’s consent, so reduce such period on not less than 15 days written
notice to the holders thereof.

 

6.6                                 Nontransferability.  Options may not be transferred other than by
will or the laws of descent and distribution and, during the lifetime of the
Participant, may be exercised only by such Participant (or his legal guardian
or legal representative).  In the event
of the death of a Participant, exercise of Options granted hereunder shall be
made only:

 

(i)                                     by
the executor or administrator of the estate of the deceased Participant or the
Person or Persons to whom the deceased Participant’s rights under the Option
shall pass by will or the laws of descent and distribution; and

 

7

 

(ii)                                  to
the extent that the deceased Participant was entitled thereto at the date of
his death, unless otherwise provided by the Committee in such Participant’s
Option Agreement.

 

6.7                                 Expiration
of Options.

 

(a)                                  Normal
Expiration.  In no event shall any
part of any Option be exercisable after the date of expiration thereof (the “Expiration
Date”), as determined by the Committee pursuant to Section 5.5
above.

 

(b)                                 Early
Expiration.  Except as otherwise
provided by the Committee in the Option Agreement, any portion of a Participant’s
Option that was not vested and exercisable on the such Participant’s Date of
Termination shall expire and be forfeited as of such date, and any portion of a
Participant’s Option that was vested and exercisable on such Participant’s Date
of Termination shall expire and be forfeited as of such date, except that: (i)
if a Participant ceases to be a member of the Board because such Participant
dies or becomes subject to any Disability, such Participant’s Option shall
expire six months after his or her Date of Termination, but in no event after
the Expiration Date, (ii) if a Participant ceases to be a member of the Board
because such Participant retires, such Participant’s Option shall expire 30
days after his or her Date of Termination, but in no event after the Expiration
Date, and (iii) if any Participant ceases to be a member of the Board other
than (x) due to death or Disability, (y) retirement or (z) for Cause, such
Participant’s Option shall expire 90 days after his or her Date of Termination,
but in no event after the Expiration Date.

 

6.8                                 Withholding
of Taxes

 

(a)                                  The
Company shall be entitled, if necessary or desirable, to withhold from any
Participant, from any amounts due and payable by the Company to such
Participant (or secure payment from such Participant in lieu of withholding),
the amount of any withholding or other tax due from the Company with respect to
any shares issuable under the Options, and the Company may defer the exercise
of the Options or the issuance of the Shares thereunder unless such taxes are
paid or the Company is indemnified to its satisfaction.

 

(b)                                 Notwithstanding
any provision of this Plan to the contrary, in connection with the transfer of
an Option to a transferee pursuant to Section 6.6 of the Plan, the
grantee shall remain liable for any withholding taxes required to be withheld
upon exercise of such Option by the transferee.

 

6.9                                 Adjustments.  In the event of a reorganization,
recapitalization, stock dividend, or stock split, combination or other
reclassification affecting the Common Shares, the Committee shall, in order to
prevent the dilution or enlargement of rights under outstanding Options, make
such adjustments in the number and type of shares authorized by the Plan, the
number and type of shares covered by outstanding Options, and the exercise
prices specified therein as may be determined to be appropriate and equitable.

 

6.10                           Rights
of Participants.  Nothing in this
Plan or in any Option Agreement shall interfere with or limit in any way the
right of the Board or its stockholders to remove any Participant’s membership
from the Board at any time in accordance with the Company’s

 

8

 

Certificate of Incorporation and Bylaws (with or
without cause), nor confer upon any Participant any right to continue as a
member of the Board for any period of time. 
No Person shall have a right to be selected as a Participant or, having
been so selected, to be selected again as a Participant.

 

6.11                           Amendment,
Suspension, and Termination of Plan. 
The Committee may suspend or terminate the Plan or any portion thereof
at any time and may amend it from time to time in such respects as the
Committee may deem advisable; provided that no such amendment shall be
made without stockholder approval to the extent such approval is required by
law, agreement, or the rules of any exchange upon which the Common Shares are
listed, and no such amendment, suspension, or termination shall impair the
rights of Participants under outstanding Options without the consent of the
Participants affected thereby.  No Option
shall be granted or Common Shares issued hereunder after 7 years from the date
this Plan is adopted or the date this Plan is approved by the shareholders,
whichever is earlier.

 

6.12                           Amendment,
Modification, and Cancellation of Outstanding Options.  The Committee may amend or modify any Option
in any manner to the extent that the Committee would have had the authority
under the Plan initially to grant such Option; provided that no such
amendment or modification shall impair the rights of any Participant under any
Option in a manner not contemplated hereby without the consent of such
Participant adversely affected thereby. 
With the Participant’s consent or as otherwise contemplated hereby, the
Committee may cancel any Option and issue a new Option to such Participant.

 

6.13                           Shareholder
Approval.  This Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months before
or after this Plan is adopted by the Committee. 
Any Option exercised before shareholder approval is obtained must be
rescinded if shareholder approval is not obtained within twelve (12) months
before or after the Plan is adopted. 
Shares issued upon the exercise of any such Option shall not be counted
in determining whether such approval is obtained.

 

6.14                           Indemnification.  In addition to such other rights of
indemnification as they may have as members of the Committee, the members of
the Committee and any person designated by the Committee to administer the Plan
shall be indemnified by the Company against all costs and expenses reasonably
incurred by them in connection with any action, suit, or proceeding to which
they or any of them may be party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit, or
proceeding; provided that any such Committee member shall be entitled to
the indemnification rights set forth in this Section 6.14 only if
such member has acted in good faith and in a manner that such member reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe that such conduct was unlawful, and further  provided that
upon the institution of any such action, suit, or proceeding a Committee member
shall give the Company written notice thereof and an opportunity, at its own
expense, to handle and defend the same before such Committee member undertakes
to handle and defend it on his or her own behalf.

 

9

 

6.15                           Information.  In accordance with Rule 260.140.46 of the
Blue Sky Law, Participants shall receive on an annual basis financial
statements of the Company unless such Participants’ duties in connection with
the Company assure such Participants access to equivalent information.

 

Adopted by the Board of Directors on January      ,
2005 and approved by the shareholders of the Company on January      ,
2005.

 

*                                         *                                         *                                         *

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]