Document:

Exhibit 10.23

 

 Exhibit 10.23

Memorandum of Agreement of Employment of Edward
  J. Resch

September 11, 2002

Mr. Edward J. Resch

  1 Evergreen Lane

  Colts Neck, NJ 07722

Dear Ed:

On behalf of State Street, I am pleased to provide
  you with our revised offer of employment to you, subject to a satisfactory completion
  of references and legally required background investigation, as Executive Vice
  President, Chief Financial Officer. In this position, you will be reporting
  directly to David A. Spina, Chairman and Chief Executive Officer. Your compensation
  package will consist of the following:

	An annualized base salary of $500,000 paid
    on the 15th and the 30th of each month, less all applicable taxes.

    
	 A sign-on bonus of $1,000,000. Of this amount,
    $500,000 will be payable to you 30 days from your date of hire, and $500,000
    will be payable to you in February 2003.

    
	You will be eligible to participate in the
    Senior Executive Annual Incentive Plan starting in the 2003 plan year. Your
    ongoing annual incentive target will be 75% of base salary; actual payout
    will be based on corporate business results and your individual performance.

    
	An initial grant of 28,500 stock options
    to be awarded in September 2002, pending approval of the Executive Compensation
    Committee. Once these options are issued they will vest one-third (1/3) each
    year for a three-year period. The first third will vest in September 2003.
    These options will expire ten years from grant date.

    
	A grant of 14,000 restricted stock awards.
    These awards will vest a third each year over a three-year period beginning
    in December 2003.

    
	In December 2002 you will be eligible to
    receive a long-term incentive opportunity in the form of performance units
    (or an equivalent plan), valued at approximately $500,000 annually based on
    company performance and payable after December, 2004.

    
	Execution of a Change in Control (CIC) agreement
    within 30 days upon your joining the company. The agreement will have a single
    trigger and will cover base and bonus for three years.

    
	Severance benefits of up to two years of
    base salary and benefits. In addition, should a Change-in-Control occur within
    36 months of your date of hire, you will be eligible for an additional payment
    of one year’s base salary and target bonus. This additional severance
    provision will lapse at the completion of 36 months of service.

    
	Full relocation under our executive relocation
    program with temporary living arrangements for up to six months, as required.
    Please refer to the letter outlining relocation benefits, which was provided
    to you last week.

    
	Documents detailing our benefits have also
    been provided to you under separate cover.

    

Please note that this material does not constitute
  a contract of employment for a fixed term. Either you or the company may terminate
  your employment relationship at any time. This offer is contingent upon completion
  of normal background verification and your providing proof of eligibility for
  employment, which complies with the Immigration Reform and Control Act.

  

 

 Page 2

  September 11, 2002 

Upon your arrival, Pam Keel, Manager of Staffing Support, will work with you to complete the necessary paperwork prior to your start date. She will also talk with you about our Officer Orientation Program. In addition,
Boon Ooi, our Manager of Worldwide Compensation and U.S. Benefits, will meet with you to review the details of our health, welfare and pension plans, options for deferred compensation, and any questions you may have related to your overall
compensation and benefits. Boon is available for clarification of any questions you may have. He can be reached at 617-985-6348.

Your signature below will indicate that you do not have a competitive agreement with your current or past employers which conflicts with your employment at State Street and that you will not disclose to State Street
any proprietary information belonging to your current or past employer.

A copy of this letter is enclosed for your records. Please sign and return this letter to me in the enclosed envelope as soon as possible.

It is sincerely a pleasure to welcome you to State Street. I am confident that you will make a valuable contribution to the company. Please do not hesitate to call me at 617-664-1666, if I may be of any assistance to
you. Welcome!

	 	 	 	Sincerely,
	 	 	 	 
	 	 	           	/s/ Luis J. de Ocejo
	 	 	 	 
	 	 	 	Luis J. de Ocejo
	 	 	 	Executive Vice President
	 	 	 	Human Resources &
	 	 	 	Organizational Performance
	/s/ Edward J. Resch	 	 	TBD
	
	 	

	Edward J. Resch	9/16/02	 	Start Date
	 	 	 	 
	cc: David A. SpinaExhibit 10.1

                     ALPHARx, INC. 2003 STOCK INCENTIVE PLAN

This 2003 STOCK INCENTIVE PLAN (the "Plan") is hereby established and adopted
this 10th day of February, 2003 (the "Effective Date") by AlphaRx, Inc., a
Delaware corporation (the "Company").

                                    ARTICLE 1

                              PURPOSES OF THE PLAN

1.1 PURPOSES. The purposes of the Plan are (a) to enhance the Company's ability
to attract, motivate and retain the services of qualified employees, officers,
directors, consultants and other service providers (to the extent qualifying
under Article 3 hereof) upon whose judgment, initiative and efforts the
successful conduct and development of the Company's business largely depends,
and (b) to provide additional incentives to such persons or entities to devote
their utmost effort and skill to the advancement and betterment of the Company,
by providing them an opportunity to participate in the ownership of the Company
and thereby have an interest in the success and increased value of the Company.

                                    ARTICLE 2

                                   DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings
indicated:

2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board delegates
responsibility for any matter to the Committee, the term Administrator shall
mean the Committee.

2.2 AFFILIATED COMPANY. "Affiliated Company" means any "parent corporation" or
"subsidiary corporation" of the Company, whether now existing or hereafter
created or acquired, as those terms are defined in Sections 424(e) and 424(f) of
the Code, respectively.

2.3 BOARD. "Board" means the Board of Directors of the Company.

2.4 CAUSE. "Cause" means, with respect to the termination of a Participant's
employment, termination of such employment by the Company for any of the
following reasons:

(a) The continued refusal or omission by the Participant to perform any material
duties required of him by the Company if such duties are consistent with duties
customary for the position held with the Company;

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(b) Any material act or omission by the Participant involving malfeasance or
gross negligence in the performance of Participant's duties to, or material
deviation from any of the policies or directives of, the Company;

(c) Conduct on the part of Participant which constitutes the breach of any
statutory or common law duty of loyalty to the Company; or

(d) Any illegal act by Participant which materially and adversely affects the
business of the Company or any felony committed by Participant, as evidenced by
conviction thereof, provided that the Company may suspend Participant with pay
while any allegation of such illegal or felonious act is investigated.

2.5 CHANGE IN CONTROL. "Change in Control" shall mean (i) the acquisition,
directly or indirectly, by any person or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) of the beneficial
ownership of more than fifty percent (50%) of the outstanding securities of the
Company; (ii) 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; (iii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company;
(iv) a complete liquidation or dissolution of the Company; or (v) any reverse
merger in which the Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
merger.

2.6 CODE. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

2.7 COMMITTEE. "Committee" means a committee of two or more members of the Board
appointed to administer the Plan, as set forth in Section 7.1 hereof.

2.8 COMMON STOCK. "Common Stock" means the Common Stock, $0.0001 par value of
the Company, subject to adjustment pursuant to Section 4.2 hereof.

2.9 DISABILITY. "Disability" means permanent and total disability as defined in
Section 22(e)(3) of the Code. The Administrator's determination of a Disability
or the absence thereof shall be conclusive and binding on all interested
parties.

2.10 EFFECTIVE DATE. "Effective Date" means February 10th, 2003, which was the
date on which the Plan was originally adopted by the Board.

2.11 EXERCISE PRICE. "Exercise Price" means the purchase price per share of
Common Stock payable upon exercise of an Option.

2.12 FAIR MARKET VALUE. "Fair Market Value" on any given date means the value of
one share of Common Stock, determined as follows:

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(a) If the Common Stock is then listed or admitted to trading on a Nasdaq market
system or a stock exchange which reports closing sale prices, the Fair Market
Value shall be the closing sale price on the date of valuation on such Nasdaq
market system or principal stock exchange on which the Common Stock is then
listed or admitted to trading, or, if no closing sale price is quoted on such
day, then the Fair Market Value shall be the closing sale price of the Common
Stock on such Nasdaq market system or such exchange on the next preceding day on
which a closing sale price is quoted.

(b) If the Common Stock is not then listed or admitted to trading on a Nasdaq
market system or a stock exchange which reports closing sale prices, the Fair
Market Value shall be the average of the closing bid and asked prices of the
Common Stock in the over-the-counter market on the date of valuation.

(c) If neither (a) nor (b) is applicable as of the date of valuation, then the
Fair Market Value shall be determined by the Administrator in good faith using
any reasonable method of evaluation, which determination shall be conclusive and
binding on all interested parties.

2.13 INCENTIVE OPTION. "Incentive Option" means any Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.

2.14 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an Option
Agreement with respect to an Incentive Option.

2.15 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member of the
National Association of Securities Dealers, Inc.

2.16 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is not an
Incentive Option. To the extent that any Option designated as an Incentive
Option fails in whole or in part to qualify as an Incentive Option, including,
without limitation, for failure to meet the limitations applicable to a 10%
Stockholder or because it exceeds the annual limit provided for in Section 5.6
below, it shall to that extent constitute a Nonqualified Option.

2.17 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement" means an
Option Agreement with respect to a Nonqualified Option.

2.18 OFFEREE. "Offeree" means a Participant to whom a Right to Purchase has been
offered or who has acquired Restricted Stock under the Plan.

2.19 OPTION. "Option" means any option to purchase Common Stock granted pursuant
to the Plan.

2.20 OPTION AGREEMENT. "Option Agreement" means the written agreement entered
into between the Company and the Optionee with respect to an Option granted
under the Plan.

2.21 OPTIONEE. "Optionee" means a Participant who holds an Option.

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2.22 PARTICIPANT. "Participant" means an individual or entity who holds an
Option, a Right to Purchase or Restricted Stock under the Plan.

2.23 PURCHASE PRICE. "Purchase Price" means the purchase price per share of
Restricted Stock payable upon acceptance of a Right to Purchase.

2.24 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock issued
pursuant to Article 6 hereof, subject to any restrictions and conditions as are
established pursuant to such Article 6.

2.25 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase Restricted
Stock granted to an Offeree pursuant to Article 6 hereof.

2.26 SERVICE PROVIDER. "Service Provider" means a consultant or other person or
entity who provides services to the Company or an Affiliated Company and who the
Administrator authorizes to become a Participant in the Plan.

2.27 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the written
agreement entered into between the Company and the Offeree with respect to a
Right to Purchase offered under the Plan.

2.28 10% STOCKHOLDER. "10% Stockholder" means a person who, as of a relevant
date, owns or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of an Affiliated
Company.

                                    ARTICLE 3

                                   ELIGIBILITY

3.1 INCENTIVE OPTIONS. Subject to Section 3.4, officers and other key employees
of the Company or of an Affiliated Company (including members of the Board if
they are employees of the Company or of an Affiliated Company) are eligible to
receive Incentive Options under the Plan.

3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Subject to Section 3.4,
officers and other key employees of the Company or of an Affiliated Company,
members of the Board (whether or not employed by the Company or an Affiliated
Company), and Service Providers are eligible to receive Nonqualified Options or
Rights to Purchase under the Plan.

3.3 LIMITATION ON SHARES. In no event shall any Participant be granted Rights to
Purchase or Options in any one calendar year pursuant to which the aggregate
number of shares of Common Stock that may be acquired thereunder exceeds 150,000
shares.

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3.4 RESTRICTIONS. Notwithstanding anything contained in this Plan to the
contrary, including, without limitation, Sections 3.1 and 3.2 above, (i) no
Incentive Options shall be issued under the Plan; and (ii) no director or
officer of the Company or any Affiliated Company shall be eligible to receive
any Incentive Option, Nonqualified Option or Right to Purchase, or any right to
receive the same, pursuant to this Plan unless and until this Plan has been
approved by the affirmative vote of holders of a majority of the outstanding
shares of the Company's Common Stock.

                                    ARTICLE 4

                                   PLAN SHARES

4.1 SHARES SUBJECT TO THE PLAN. The number of shares of Common Stock that may be
issued under the Plan shall be 1,500,000. For purposes of this limitation, in
the event that (a) all or any portion of any Option or Right to Purchase granted
or offered under the Plan can no longer under any circumstances be exercised, or
(b) any shares of Common Stock are reacquired by the Company pursuant to an
Incentive Option Agreement, Nonqualified Option Agreement or Stock Purchase
Agreement, the shares of Common Stock allocable to the unexercised portion of
such Option or such Right to Purchase, or the shares so reacquired, shall again
be available for grant or issuance under the Plan.

4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding shares of
Common Stock are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company by
reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Option Agreements,
Rights to Purchase and Stock Purchase Agreements in order to preserve, as nearly
as practical, but not to increase, the benefits to Participants.

                                    ARTICLE 5

                                     OPTIONS

5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall be
evidenced by an Option Agreement which shall specify the number of shares
subject thereto, vesting provisions relating to such Option, the Exercise Price
per share, and whether the Option is an Incentive Option or Nonqualified Option.
As soon as is practical following the grant of an Option, an Option Agreement
shall be duly executed and delivered by or on behalf of the Company to the
Optionee to whom such Option was granted. Each Option Agreement shall be in such
form and contain such additional terms and conditions, not inconsistent with the
provisions of this Plan, as the Administrator shall, from time to time, deem
desirable, including, without limitation, the imposition of any rights of first
refusal and resale obligations upon any shares of Common Stock acquired pursuant
to an Option Agreement. Each Option Agreement may be different from each other
Option Agreement.

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5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock covered by each
Option shall be determined by the Administrator, subject to the following: (a)
the Exercise Price of an Incentive Option shall not be less than 100% of Fair
Market Value on the date the Incentive Option is granted, (b) the Exercise Price
of a Nonqualified Option shall not be less than 100% of Fair Market Value on the
date the Nonqualified Option is granted, and (c) if the person to whom an Option
is granted is a 10% Stockholder on the date of grant, the Exercise Price shall
not be less than 110% of Fair Market Value on the date the Option is granted.

5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be made upon
exercise of an Option and may be made, in the discretion of the Administrator,
subject to any legal restrictions, by: (a) cash; (b) check; (c) the surrender of
shares of Common Stock owned by the Optionee, which surrendered shares shall be
valued at Fair Market Value as of the date of such exercise; (d) the Optionee's
promissory note in a form and on terms acceptable to the Administrator; (e) the
cancellation of indebtedness of the Company to the Optionee; (f) the waiver of
compensation due or accrued to the Optionee for services rendered; (g) provided
that a public market for the Common Stock exists, a "same day sale" commitment
from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the Exercise Price directly to the Company; (h)
provided that a public market for the Common Stock exists, a "margin" commitment
from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to
exercise the Option and to pledge the 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 Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the Exercise Price directly to the Company; or (i) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable corporate law.

5.4 TERM AND TERMINATION OF OPTIONS. The term and termination of each Option
shall be as fixed by the Administrator, but no Option may be exercisable more
than ten (10) years after the date it is granted. An Incentive Option granted to
a person who is a 10% Stockholder on the date of grant shall not be exercisable
more than five (5) years after the date it is granted.

5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Administrator.

5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for "incentive
stock option" treatment under Section 422 of the Code, the aggregate Fair Market
Value (determined as of the time of grant) of the Common Stock shall not, with
respect to which Incentive Options granted under this Plan and any other plan of
the Company or any Affiliated Company become exercisable for the first time by
an Optionee during any calendar year, exceed $100,000.

5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or transferable
except by will or the laws of descent and distribution, and during the life of
the Optionee shall be

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exercisable only by such Optionee; provided, however, that, in the discretion of
the Administrator, any Option may be assigned or transferred in any manner which
such Option is permitted to be assigned or transferred under the Code.

5.8 RIGHTS AS STOCKHOLDER. An Optionee or permitted transferee of an Option
shall have no rights or privileges as a Stockholder with respect to any shares
covered by an Option until such Option has been duly exercised and certificates
representing shares purchased upon such exercise have been issued to such
person.

                                    ARTICLE 6

                               RIGHTS TO PURCHASE

6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an Offeree
entitles the Offeree to purchase, for a Purchase Price determined by the
Administrator, shares of Common Stock subject to such terms, restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Such conditions may include, but are not limited to, continued
employment or the achievement of specified performance goals or objectives.

6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights with
respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted the Right to Purchase within ten (10) days (or such
longer or shorter period as the Administrator may specify) following the grant
of the Right to Purchase by making payment of the full Purchase Price to the
Company in the manner set forth in Section 6.3 hereof and by executing and
delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable. Each Stock Purchase Agreement may be different
from each other Stock Purchase Agreement.

6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions, payment of the
Purchase Price upon acceptance of a Right to Purchase Restricted Stock may be
made, in the discretion of the Administrator, by: (a) cash; (b) check; (c) the
surrender of shares of Common Stock owned by the Offeree that have been held by
the Offeree for at least six (6) months, which surrendered shares shall be
valued at Fair Market Value as of the date of such exercise; (d) the Offeree's
promissory note in a form and on terms acceptable to the Administrator; (e) the
cancellation of indebtedness of the Company to the Offeree; (f) the waiver of
compensation due or accrued to the Offeree for services rendered; or (g) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable corporate law.

6.4 RIGHTS AS A STOCKHOLDER. Upon complying with the provisions of Section 6.2
hereof, an Offeree shall have the rights of a Stockholder with respect to the
Restricted Stock purchased pursuant to the Right to Purchase, including voting
and dividend rights, subject to the terms, restrictions and conditions as are
set forth in the Stock Purchase Agreement. Unless the Administrator shall
determine otherwise, certificates evidencing shares of Restricted Stock shall

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remain in the possession of the Company in accordance with the terms of the
Stock Purchase Agreement.

6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement or by the Administrator.
In the event of termination of a Participant's employment, service as a director
of the Company or Service Provider status for any reason whatsoever (including
death or disability), the Stock Purchase Agreement may provide, in the
discretion of the Administrator, that the Company shall have the right,
exercisable at the discretion of the Administrator, to repurchase (i) at the
original Purchase Price, any shares of Restricted Stock which have not vested as
of the date of termination, and (ii) at Fair Market Value, any shares of
Restricted Stock which have vested as of such date, on such terms as may be
provided in the Stock Purchase Agreement.

6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall specify the
date or dates, the performance goals or objectives which must be achieved, and
any other conditions on which the Restricted Stock may vest.

6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by promissory
note, any cash dividends paid with respect to the Restricted Stock may be
applied, in the discretion of the Administrator, to repayment of such note.

6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be assignable or
transferable except by will or the laws of descent and distribution or as
otherwise provided by the Administrator.

                                    ARTICLE 7

                           ADMINISTRATION OF THE PLAN

7.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate such
responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee.

7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or authority
conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority: (a) to determine the persons
to whom, and the time or times at which, Incentive Options or Nonqualified
Options shall be granted and Rights to Purchase shall be offered, the number of
shares to be represented by each Option and Right to Purchase and the
consideration to be received by the Company upon the exercise thereof; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations
relating to the Plan; (d) to determine the terms, conditions and restrictions
contained in, and the form of, Option Agreements and Stock Purchase Agreements;
(e) to determine

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the identity or capacity of any persons who may be entitled to exercise a
Participant's rights under any Option or Right to Purchase under the Plan; (f)
to correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Option Agreement or Stock Purchase Agreement; (g) to
accelerate the vesting of any Option or release or waive any repurchase rights
of the Company with respect to Restricted Stock; (h) to extend the exercise date
of any Option or acceptance date of any Right to Purchase; (i) to provide for
rights of first refusal and/or repurchase rights; (j) to amend outstanding
Option Agreements and Stock Purchase Agreements to provide for, among other
things, any change or modification which the Administrator could have provided
for upon the grant of an Option or Right to Purchase or in furtherance of the
powers provided for herein; and (k) to make all other determinations necessary
or advisable for the administration of the Plan, but only to the extent not
contrary to the express provisions of the Plan. Any action, decision,
interpretation or determination made in good faith by the Administrator in the
exercise of its authority conferred upon it under the Plan shall be final and
binding on the Company and all Participants.

7.3 LIMITATION ON LIABILITY. No employee of the Company or member of the Board
or Committee shall be subject to any liability with respect to duties under the
Plan unless the person acts fraudulently or in bad faith. To the extent
permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the Plan.

                                    ARTICLE 8

                                CHANGE IN CONTROL

8.1 CHANGE IN CONTROL. In order to preserve a Participant's rights in the event
of a Change in Control of the Company (i) the time period relating to the
exercise or realization of all outstanding Options and Rights to Purchase shall
automatically accelerate immediately prior to consummation of such Change in
Control if the Administrator does not take the action described in subitem (C)
of this Section 8.1 and (ii) with respect to Options and Rights to Purchase, the
Administrator in its discretion may, at any time an Option or Right to Purchase
is granted, or at any time thereafter, take one or more of the following
actions: (A) provide for the purchase of each Option or Right to Purchase for an
amount of cash or other property that could have been received upon the exercise
of the Option or Right to Purchase had the Option been currently exercisable,
(B) adjust the terms of the Options and Rights to Purchase in a manner
determined by the Administrator to reflect the Change in Control, (C) cause the
Options and Rights to Purchase to be assumed, or new rights substituted
therefor, by another entity, through the continuance of the Plan and the
assumption of outstanding Options and Rights to Purchase, or the substitution
for such Options and Rights to Purchase of new options and new rights to
purchase of comparable value covering shares of a successor corporation, with
appropriate adjustments as to the number and kind of shares and Exercise Prices,
in which event the Plan and such Options and Rights to Purchase, or the new
options and rights to purchase substituted therefor, shall continue in the
manner and under the terms so provided or (D) make such other provision as the
Committee may consider equitable. If the Administrator does not take any of the
forgoing actions, all Options and Rights to Purchase shall

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terminate upon the consummation of the Change in Control and the Administrator
shall cause written notice of the proposed transaction to be given to all
Participants not less than fifteen (15) days prior to the anticipated effective
date of the proposed transaction.

                                    ARTICLE 9

                      AMENDMENT AND TERMINATION OF THE PLAN

9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or
terminate the Plan in such respects as the Board may deem advisable. No such
alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option Agreement or Stock Purchase Agreement without such
Participant's consent. The Board may alter or amend the Plan to comply with
requirements under the Code relating to Incentive Options or other types of
options which give Optionee more favorable tax treatment than that applicable to
Options granted under this Plan as of the date of its adoption. Upon any such
alteration or amendment, any outstanding Option granted hereunder may, if the
Administrator so determines and if permitted by applicable law, be subject to
the more favorable tax treatment afforded to an Optionee pursuant to such terms
and conditions.

9.2 PLAN TERMINATION. Unless the Plan shall theretofore have been terminated,
the Plan shall terminate on the tenth (10th) anniversary of the Effective Date
and no Options or Rights to Purchase may be granted under the Plan thereafter,
but Option Agreements, Stock Purchase Agreements and Rights to Purchase then
outstanding shall continue in effect in accordance with their respective terms.

                                   ARTICLE 10

                            CANCELLATION & RECISSION

10.1 NON-COMPETITION. Unless an Option Agreement specifies otherwise, the
Administrator may cancel, rescind, suspend, withhold or otherwise limit or
restrict any unexpired, unpaid, or deferred Options at any time if the
Participant in nor in compliance with all applicable provisions of the Option
Agreement and the Plan, or if the Participant engages in any "Adverse Activity."
For purposes of this Section 10, "Adverse Activity" shall include: (i) the
disclosure to anyone outside the Company, or the use in other than the Company's
business, without prior written authorization from the Company, of any
confidential information or material relating to the business of the Company,
acquired by the Participant either during or after employment with the Company;
(ii) the failure or refusal to disclose promptly and to assign to the Company
all right, title and interest in any invention or idea, patentable or not, made
or conceived by the Participant during employment by the Company, relating in
any manner to the actual or anticipated business, research or development work
of the Company; or (iii) activity that results in termination of the
Participant's employment for Cause.

10.2 AGREEMENT UPON EXERCISE. Upon exercise, payment or delivery pursuant to an
Option Agreement, the Participant shall certify in a manner acceptable to the
Company that he or she is in compliance with the terms and conditions of the
Plan. In the event a Participant fails to comply with

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the provisions of paragraphs (i)-(iii) of Section 10.1 prior to, or during the
six (6) months after, any exercise, payment or delivery pursuant to an Option
Agreement, such exercise, payment or delivery may be rescinded within two years
thereafter. In the event of any such rescission, the Participant shall pay to
the Company the amount of any gain realized or payment received as a result of
the exercise, payment or delivery, in such manner and on such terms and
conditions as may be required, and the Company shall be entitled to set-off
against the amount of any such gain any amount owed to the Participant by the
Company.

                                   ARTICLE 11

                                 TAX WITHHOLDING

11.1 WITHHOLDING. The Company shall have the power to withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy any
applicable Federal, state, and local tax withholding requirements with respect
to any Options exercised or Restricted Stock issued under the Plan. To the
extent permissible under applicable tax, securities and other laws, the
Administrator may, in its sole discretion and upon such terms and conditions as
it may deem appropriate, permit a Participant to satisfy his or her obligation
to pay any such tax, in whole or in part, up to an amount determined on the
basis of the highest marginal tax rate applicable to such Participant, by (a)
directing the Company to apply shares of Common Stock to which the Participant
is entitled as a result of the exercise of an Option or as a result of the
purchase of or lapse of restrictions on Restricted Stock or (b) delivering to
the Company shares of Common Stock owned by the Participant. The shares of
Common Stock so applied or delivered in satisfaction of the Participant's tax
withholding obligation shall be valued at their Fair Market Value as of the date
of measurement of the amount of income subject to withholding.

                                   ARTICLE 12

                                  MISCELLANEOUS

12.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits under the
Plan may not be assigned or alienated, whether voluntarily or involuntarily. Any
unauthorized attempt at assignment, transfer, pledge or other disposition shall
be without effect.

12.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a voluntary
undertaking on the part of the Company and shall not be deemed to constitute a
contract between the Company and any Participant to be consideration for, or an
inducement to, or a condition of, the employment of any Participant. Nothing
contained in the Plan shall be deemed to give the right to any Participant to be
retained as an employee of the Company or any Affiliated Company or to interfere
with the right of the Company or any Affiliated Company to discharge any
Participant at any time.

12.3 APPLICATION OF FUNDS. The proceeds received by the Company from the sale of
Common Stock pursuant to Option Agreements and Stock Purchase Agreements, except
as otherwise provided herein, will be used for general corporate purposes.

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12.4 ANNUAL REPORTS. During the term of this Plan, the Company will furnish to
each Participant copies of annual financial reports that the Company distributes
generally to its stockholders.

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