Document:

Unassociated Document

    

      Exhibit
        10.1

    

    
      THE
        2004 GUITAR CENTER, INC. INCENTIVE STOCK AWARD PLAN

       

      Guitar
        Center, Inc., a Delaware corporation, has adopted The 2004 Guitar Center,
        Inc.
        Incentive Stock Award Plan (the “Plan”),
        effective February 27, 2004, for the benefit of its eligible employees,
        consultants and directors. 

       

      The
        purposes of the Plan are as follows: 

      

        (1) 
To
          provide an additional incentive for directors, key Employees and Consultants
          (as
          such terms are defined below) to further the growth, development and financial
          success of the Company and its Subsidiaries by personally benefiting through
          the
          ownership of Company stock and/or rights which recognize such growth,
          development and financial success. 

         

        (2) 
To
          enable
          the Company and its Subsidiaries to obtain and retain the services of directors,
          key Employees and Consultants considered essential to the long range success
          of
          the Company by offering them an opportunity to own stock in the Company
          and/or
          rights which will reflect the growth, development and financial success
          of the
          Company. 

         

      

      
      

      ARTICLE
        I

      DEFINITIONS

       

      Wherever
        the following terms are used in the Plan they shall have the meanings specified
        below, unless the context clearly indicates otherwise. The singular pronoun
        shall include the plural where the context so indicates. 

      

        1.1 
             “Administrator”
shall
          mean the entity that conducts the general administration of the Plan as
          provided
          herein. With reference to the administration of the Plan with respect to
          Options
          granted to Non-Employee Directors, the term “Administrator”
shall
          refer to the Board. With reference to the administration of the Plan with
          respect to any other Award, the term “Administrator”
shall
          refer to the Committee unless the Board has assumed the authority for
          administration of the Plan generally as provided in Section 10.1. 

         

        1.2       
            “Award”
shall
          mean an Option, a Restricted Stock award, a Performance Award, a Dividend
          Equivalents award, a Deferred Stock award, a Stock Payment award or a Stock
          Appreciation Right which may be awarded or granted under the Plan (collectively,
          “Awards”). 

         

        1.3 
             “Award
          Agreement”
shall
          mean a written agreement executed by an authorized officer of the Company
          and
          the Holder which shall contain such terms and conditions with respect to
          an
          Award as the Administrator shall determine, consistent with the Plan.

         

        1.4    
                   “Award Limit” shall
          mean 500,000 shares of Common Stock, as adjusted pursuant to Section 11.4;
          provided, however, that solely with respect to Performance
          Awards granted pursuant to Section 8.2(b) and Dividend Equivalents granted
          pursuant to Section 8.3, Award Limit shall mean $6,000,000.” 

         

        1.5       
            “Board”
shall
          mean the Board of Directors of the Company. 

         

        1.6              
          “Change in Control” shall mean the occurrence of any of the following
          events: 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      (i)  the
        acquisition, directly or indirectly, by any “person” or “group” (as those terms
        are defined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and
        the
        rules thereunder) of “beneficial ownership” (as determined pursuant to Rule
        13d-3 under the Exchange Act) of securities entitled to vote generally in
        the
        election of directors (“voting securities”) of the Company that represent 50% or
        more of the combined voting power of the Company’s then outstanding voting
        securities, other than 

       

      (A)  an
        acquisition by a trustee or other fiduciary holding securities under any
        employee benefit plan (or related trust) sponsored or maintained by the Company
        or any person controlled by the Company or by any employee benefit plan (or
        related trust) sponsored or maintained by the Company or any person controlled
        by the Company, or 

       

      (B)  an
        acquisition of voting securities by the Company or a corporation owned, directly
        or indirectly, by the stockholders of the Company in substantially the same
        proportions as their ownership of the stock of the Company, or 

       

      (C)  an
        acquisition of voting securities pursuant to a transaction described in clause
        (iii) below that would not be a Change in Control under clause (iii);

       

      Notwithstanding
        the foregoing, neither of the following events shall constitute an “acquisition”
by any person or group for purposes of this clause (i): (x) a change in the
        voting power of the Company’s voting securities based on the relative trading
        values of the Company’s then outstanding securities as determined pursuant to
        the Company’s Certificate of Incorporation, or (y) an acquisition of the
        Company’s securities by the Company which, either alone or in combination only
        with the other event, causes the Company’s voting securities beneficially owned
        by a person or group to represent 50% or more of the combined voting power
        of
        the Company’s then outstanding voting securities; provided,
        however,
        that if
        a person or group shall become the beneficial owner of 50% or more of the
        combined voting power of the Company’s then outstanding voting securities by
        reason of share acquisitions by the Company as described above and shall,
        after
        such share acquisitions by the Company, become the beneficial owner of any
        additional voting securities of the Company, then such acquisition shall
        constitute a Change in Control; 

       

      (ii)  individuals
        who, as of the date hereof, constitute the Board (the “Incumbent
        Board”)
        cease
        for any reason to constitute at least a majority of the Board; provided,
        however,
        that
        any individual becoming a director subsequent to the date hereof whose election,
        or nomination for election by the Company’s stockholders, was approved by a vote
        of at least a majority of the directors then comprising the Incumbent Board
        shall be considered as though such individual were a member of the Incumbent
        Board, but excluding, for this purpose, any such individual whose initial
        assumption of office occurs as a result of an actual or threatened election
        contest with respect to the election or removal of directors or other actual
        or
        threatened solicitation of proxies or consents by or on behalf of a person
        other
        than the Board; 

       

      (iii)  the
        consummation by the Company (whether directly involving the Company or
        indirectly involving the Company through one or more intermediaries) of (x)
        a
        merger, consolidation, reorganization, or business combination or (y) a sale
        or
        other disposition of all or substantially all of the Company’s assets or (z) the
        acquisition of assets or stock of another entity, in each case, other than
        a
        transaction 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      (A)  which
        results in the Company’s voting securities outstanding immediately before the
        transaction continuing to represent (either by remaining outstanding or by
        being
        converted into voting securities of the Company or the person that, as a
        result
        of the transaction, controls, directly or indirectly, the Company or owns,
        directly or indirectly, all or substantially all of the Company’s assets or
        otherwise succeeds to the business of the Company (the Company or such person,
        the “Successor
        Entity”))
        directly or indirectly, at least 50% of the combined voting power of the
        Successor Entity’s outstanding voting securities immediately after the
        transaction, and

       

      (B)  after
        which more than 50% of the members of the board of directors of the Successor
        Entity were members of the Incumbent Board at the time of the Board’s approval
        of the agreement providing for the transaction or other action of the Board
        approving the transaction, and 

       

      (C)  after
        which no person or group beneficially owns voting securities representing
        50% or
        more of the combined voting power of the Successor Entity; provided,
        however,
        that no
        person or group shall be treated for purposes of this clause (C) as beneficially
        owning 50% or more of combined voting power of the Successor Entity solely
        as a
        result of the voting power held in the Company and the other entity prior
        to the
        consummation of the transaction; or 

       

      (iv)  a
        liquidation or dissolution of the Company. 

       

      For
        purposes of clause (i) above, the calculation of voting power shall be made
        as
        if the date of the acquisition were a record date for a vote of the Company’s
        shareholders, and for purposes of clause (iii) above, the calculation of
        voting
        power shall be made as if the date of the consummation of the transaction
        were a
        record date for a vote of the Company’s shareholders. 

       

      1.7  
           “Code”
shall
        mean the Internal Revenue Code of 1986, as amended. 

       

      1.8  
         
         “Committee”
shall
        mean the Compensation Committee of the Board, or another committee or
        subcommittee of the Board, appointed as provided in Section 10.1. 

       

      1.9  
           “Common
        Stock”
shall
        mean the common stock of the Company, par value $.01 per share. 

       

      1.10     
          “Company”
shall
        mean Guitar Center, Inc., a Delaware corporation. 

       

      1.11
          
        “Consultant”
shall
        mean any consultant or adviser if (i) the consultant or adviser renders bona
        fide services to the Company or any Subsidiary; (ii) the services rendered
        by
        the consultant or adviser are not in connection with the offer or sale of
        securities in a capital-raising transaction and do not directly or indirectly
        promote or maintain a market for the Company’s securities; and (iii) the
        consultant or adviser is a natural person who has contracted directly with
        the
        Company or any Subsidiary to render such services. 

       

      1.12
         
         “Deferred
        Stock”
shall
        mean Common Stock awarded under Article VIII of the Plan. 

       

      1.13
         
         “Director”
shall
        mean a member of the Board. 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

        Conformed
          as of May 10, 2007

         

      

      1.14
          
        “Dividend
        Equivalent”
shall
        mean a right to receive the equivalent value (in cash or Common Stock) of
        dividends paid on Common Stock, awarded under Article VIII of the Plan.

       

      1.15
         
         “DRO”
shall
        mean a domestic relations order as defined by the Code or Title I of the
        Employee Retirement Income Security Act of 1974, as amended, or the rules
        thereunder. 

       

      1.16
         
         “Employee”
shall
        mean any officer or other employee (as defined in accordance with Section
        3401(c) of the Code) of the Company or any Subsidiary. 

       

      1.17
         
         “Equity
        Restructuring”
shall
        mean a non-reciprocal transaction between the Company and its stockholders,
        such
        as a stock dividend, stock split, spin-off, rights offering or recapitalization
        through a large, nonrecurring cash dividend, that affects the shares of Common
        Stock (or other securities of the Company) or the share price of Common Stock
        (or other securities) and causes a change in the per share value of the Common
        Stock underlying outstanding Awards.

       

      1.18    
          “Exchange
        Act”
shall
        mean the Securities Exchange Act of 1934, as amended. 

       

      1.19     
          “Fair
        Market Value”
of
        a
        share of Common Stock as of a given date shall be (a) the closing price of
        a
        share of Common Stock on the principal exchange on which shares of Common
        Stock
        are then trading, if any (or as reported on any composite index which includes
        such principal exchange), on such date, or if shares were not traded on such
        date, then on the next subsequent date on which a trade occurs, or (b) if
        Common
        Stock is not traded on an exchange but is quoted on a quotation system, the
        mean
        between the closing representative bid and asked prices for the Common Stock
        on
        such date as reported by such quotation system, or if shares were not traded
        on
        such date, then on the next subsequent date on which a trade occurs, or (c)
        if
        Common Stock is not publicly traded on an exchange and not quoted on a quotation
        system, the Fair Market Value of a share of Common Stock as determined by
        the
        Administrator. 

       

      1.20     
          “Full-Value
        Award”
shall
        mean any Award under which a Holder may be issued shares of Common Stock
        without
        the Holder tendering consideration therefor in the form of Common Stock or
        cash
        at least equal to the Fair Market Value at the date of grant of the Common
        Stock
        issuable upon exercise or maturity of the Award.

       

      1.21    “Holder”
shall
        mean a person who has been granted or awarded an Award. 

       

      1.22     
          “Incentive
        Stock Option”
shall
        mean an option which conforms to the applicable provisions of Section 422
        of the
        Code and which is designated as an Incentive Stock Option by the Administrator.
        

       

      1.23     
          “Non-Employee
        Director”
shall
        mean a member of the Board who is not an Employee of the Company. 

       

      1.24     
          “Non-Qualified
        Stock Option”
shall
        mean an Option which is not designated as an Incentive Stock Option by the
        Administrator. 

       

      1.25     
          “Option”
shall
        mean a stock option granted under Article IV of the Plan. An Option granted
        under the Plan shall, as determined by the Administrator, be either a
        Non-Qualified Stock Option or an Incentive Stock Option; provided,
        however,
        that
        Options granted to Non-Employee Directors and Consultants shall be Non-Qualified
        Stock Options. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      1.26     
          “Performance
        Award”
shall
        mean a cash bonus, stock bonus or other performance or incentive award that
        is
        paid in cash, Common Stock or a combination of both, awarded under Article
        VIII
        of the Plan. 

       

      1.27     
          “Performance
        Criteria”
shall
        mean the following business criteria with respect to the Company, any Subsidiary
        or any division or operating unit thereof: (a) net income, (b) pre-tax income,
        (c) operating income, (d) after-tax cash flow, (e) earnings per share, (f)
        return on equity, (g) return on invested capital or assets, (h) cost reductions
        or savings, (i) funds from operations, (j) appreciation in the Fair Market
        Value
        of a share of Common Stock, (k) operating profit, (l) working capital and
        (m)
        earnings before any one or more of the following items: interest, taxes,
        depreciation or amortization or similar non-recurring items or adjustments;
        provided
        that
        each of the business criteria described in subsections (a) through (m) shall
        be
        determined in accordance with generally accepted accounting principles
        (“GAAP”).
        For
        each fiscal year of the Company, the Committee may provide for objectively
        determinable adjustments, as determined in accordance with GAAP, to any of
        the
        business criteria described in subsections (a) through (m) for one or more
        of
        the items of gain, loss, profit or expense: (i) determined to be extraordinary
        or unusual in nature or infrequent in occurrence, (ii) related to the
        acquisition or disposal of a segment of a business, (iii) related to a change
        in
        accounting principles under GAAP, (iv) related to discontinued operations
        that
        do not qualify as a segment of a business under GAAP, (v) attributable to
        the
        business operations of any entity acquired by the Company during the fiscal
        year; or (vi) related to impairment of goodwill. 

       

      1.28     
          “Plan”
shall
        mean The 2004 Guitar Center, Inc. Incentive Stock Award Plan. 

       

      1.29     
          “Restricted
        Stock”
shall
        mean Common Stock awarded under Article VII of the Plan. 

       

      1.30     
          “Rule
        16b-3”
shall
        mean Rule 16b-3 promulgated under the Exchange Act, as such Rule may be amended
        from time to time. 

       

      1.31
         
         “Section
        162(m) Participant”
shall
        mean any key Employee designated by the Administrator as a key Employee whose
        compensation for the fiscal year in which the key Employee is so designated
        or a
        future fiscal year may be subject to the limit on deductible compensation
        imposed by Section 162(m) of the Code. 

       

      1.32
          
        “Securities
        Act”
shall
        mean the Securities Act of 1933, as amended. 

       

      1.33
          
        “Stock
        Appreciation Right”
or
        “SAR”
shall
        mean a stock appreciation right granted under Article IX of the Plan.

       

      1.34
         
         “Stock
        Payment”
shall
        mean (a) a payment in the form of shares of Common Stock, or (b) an option
        or
        other right to purchase shares of Common Stock, as part of a deferred
        compensation arrangement, made in lieu of all or any portion of the
        compensation, including without limitation, salary, bonuses and commissions,
        that would otherwise become payable to a key Employee or Consultant in cash,
        awarded under Article VIII of the Plan. 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      1.35
          
        “Subsidiary”
shall
        mean any subsidiary corporation within the meaning of Code Section 424(f)
        or any
        other entity of which a majority of the outstanding voting stock or voting
        power
        is beneficially owned directly or indirectly by the Company. 

       

      1.36
         
         “Substitute
        Award”
shall
        mean an Option granted under this Plan upon the assumption of, or in
        substitution for, outstanding equity awards previously granted by a company
        or
        other entity in connection with a corporate transaction, such as a merger,
        combination, consolidation or acquisition of property or stock; provided,
        however,
        that in
        no event shall the term “Substitute Award” be construed to refer to an award
        made in connection with the cancellation and repricing of an Option.

       

      1.37
         
         “Termination
        of Consultancy”
shall
        mean the time when the engagement of a Holder as a Consultant to the Company
        or
        a Subsidiary is terminated for any reason, with or without cause, including,
        but
        not by way of limitation, by resignation, discharge, death or retirement,
        but
        excluding terminations where there is a simultaneous commencement of employment
        with the Company or any Subsidiary. The Administrator, in its absolute
        discretion, shall determine the effect of all matters and questions relating
        to
        Termination of Consultancy, including, but not by way of limitation, the
        question of whether a Termination of Consultancy resulted from a discharge
        for
        good cause, and all questions of whether a particular leave of absence
        constitutes a Termination of Consultancy. Notwithstanding any other provision
        of
        the Plan, the Company or any Subsidiary has an absolute and unrestricted
        right
        to terminate a Consultant’s service at any time for any reason whatsoever, with
        or without cause, except to the extent expressly provided otherwise in writing.
        

       

      1.38
          
        “Termination
        of Directorship”
shall
        mean the time when a Holder who is a Non-Employee Director ceases to be a
        Director for any reason, including, but not by way of limitation, a termination
        by resignation, failure to be elected, removal, death or retirement. The
        Board,
        in its sole and absolute discretion, shall determine the effect of all matters
        and questions relating to Termination of Directorship with respect to
        Non-Employee Directors. 

       

      1.39
          
        “Termination
        of Employment”
shall
        mean the time when the employee-employer relationship between a Holder and
        the
        Company or any Subsidiary is terminated for any reason, with or without cause,
        including, but not by way of limitation, a termination by resignation,
        discharge, death, disability or retirement; but excluding (a) terminations
        where
        there is a simultaneous reemployment or continuing employment of a Holder
        by the
        Company or any Subsidiary, (b) at the discretion of the Administrator,
        terminations which result in a temporary severance of the employee-employer
        relationship, and (c) at the discretion of the Administrator, terminations
        which
        are followed by the simultaneous establishment of a consulting relationship
        by
        the Company or a Subsidiary with the former employee. The Administrator,
        in its
        absolute discretion, shall determine the effect of all matters and questions
        relating to Termination of Employment, including, but not by way of limitation,
        the question of whether a Termination of Employment resulted from a discharge
        for good cause, and all questions of whether a particular leave of absence
        constitutes a Termination of Employment; provided,
        however,
        that,
        with respect to Incentive Stock Options, unless otherwise determined by the
        Administrator in its discretion, a leave of absence, change in status from
        an
        employee to an independent contractor or other change in the employee-employer
        relationship shall constitute a Termination of Employment if, and to the
        extent
        that, such leave of absence, change in status or other change interrupts
        employment for the purposes of Section 422(a)(2) of the Code and the then
        applicable regulations and revenue rulings under said Section. 

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      ARTICLE
        II  

      SHARES
        SUBJECT TO PLAN 

       

      2.1  Shares
        Subject to Plan.

       

      (a)  The
        shares of stock subject to Awards shall be Common Stock, initially shares
        of the
        Company’s Common Stock. Subject to adjustment as provided in Section 11.4, the
        aggregate number of such shares which may be issued with respect to Awards
        granted under the Plan shall not exceed 4,300,000 shares; provided,
        however,
        that
        each share of Common Stock issued under the Plan pursuant to a Full-Value
        Award
        shall reduce the number of shares of Common Stock available for issuance
        under
        the Plan by one and ninety-five one hundredths (1.95) shares. 

       

      (b)  The
        maximum number of shares which may be subject to Awards granted under the
        Plan
        to any individual in any calendar year shall not exceed the Award Limit.
        To the
        extent required by Section 162(m) of the Code, shares subject to Options
        which
        are canceled continue to be counted against the Award Limit. 

       

      2.2  Add-back
        of Options and Other Rights.
        If any
        Option, or other right to acquire shares of Common Stock under any other
        Award
        under the Plan, expires or is canceled without having been fully exercised,
        or
        is exercised in whole or in part for cash as permitted by the Plan, the number
        of shares subject to such Option or other right but as to which such Option
        or
        other right was not exercised prior to its expiration, cancellation or exercise
        may again be optioned, granted or awarded hereunder, subject to the limitations
        of Section 2.1. Furthermore, any shares subject to Awards which are adjusted
        pursuant to Section 11.4 and become exercisable with respect to shares of
        stock
        of another corporation shall be considered cancelled and may again be optioned,
        granted or awarded hereunder, subject to the limitations of Section 2.1.
        If any
        shares of Restricted Stock are surrendered by the Holder or repurchased by
        the
        Company pursuant to Section 7.4 or 7.5 hereof, such shares may again be
        optioned, granted or awarded hereunder, subject to the limitations of Section
        2.1. Notwithstanding the provisions of this Section 2.2, under no circumstances
        may shares of Common Stock again be optioned, granted or awarded if (a) such
        shares of Common Stock have been delivered by the Holder or withheld by the
        Company upon exercise of any Award under the Plan in payment of the exercise
        price thereof or tax withholding thereon, (b) such shares of Common Stock
        that
        were subject to an Option or SAR are not issued upon the net settlement or
        net
        exercise of such Option or SAR, (c) such shares of Common Stock were repurchased
        on the open market with the proceeds of an Option exercise, or (d) such action
        would cause an Incentive Stock Option to fail to qualify as an incentive
        stock
        option under Section 422 of the Code. 

       

      ARTICLE
        III

      GRANTING
        OF AWARDS

       

      3.1  Award
        Agreement.
        Each
        Award shall be evidenced by an Award Agreement. Award Agreements evidencing
        Awards intended to qualify as performance-based compensation as described
        in
        Section 162(m)(4)(C) of the Code shall contain such terms and conditions
        as may
        be necessary to meet the applicable provisions of Section 162(m) of the Code.
        Award Agreements evidencing Incentive Stock Options shall contain such terms
        and
        conditions as may be necessary to meet the applicable provisions of Section
        422
        of the Code. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      3.2  Provisions
        Applicable to Section 162(m) Participants.

       

      (a)  The
        Committee, in its discretion, may determine whether an Award is to qualify
        as
        performance-based compensation as described in Section 162(m)(4)(C) of the
        Code.

       

      (b)  Notwithstanding
        anything in the Plan to the contrary, the Committee may grant any Award to
        a
        Section 162(m) Participant, including Restricted Stock the restrictions with
        respect to which lapse upon the attainment of performance goals which are
        related to one or more of the Performance Criteria and any performance or
        incentive award described in Article VIII that vests or becomes exercisable
        or
        payable upon the attainment of performance goals which are related to one
        or
        more of the Performance Criteria. 

       

      (c)  To
        the
        extent necessary to comply with the performance-based compensation requirements
        of Section 162(m)(4)(C) of the Code, with respect to any Award granted under
        Articles VII and VIII which may be granted to one or more Section 162(m)
        Participants, no later than ninety (90) days following the commencement of
        any
        fiscal year in question or any other designated fiscal period or period of
        service (or such other time as may be required or permitted by Section 162(m)
        of
        the Code), the Committee shall, in writing, (i) designate one or more Section
        162(m) Participants, (ii) select the Performance Criteria applicable to the
        fiscal year or other designated fiscal period or period of service, (iii)
        establish the various performance targets, in terms of an objective formula
        or
        standard, and amounts of such Awards, as applicable, which may be earned
        for
        such fiscal year or other designated fiscal period or period of service,
        and
        (iv) specify the relationship between Performance Criteria and the performance
        targets and the amounts of such Awards, as applicable, to be earned by each
        Section 162(m) Participant for such fiscal year or other designated fiscal
        period or period of service. Following the completion of each fiscal year
        or
        other designated fiscal period or period of service, the Committee shall
        certify
        in writing whether the applicable performance targets have been achieved
        for
        such fiscal year or other designated fiscal period or period of service.
        In
        determining the amount earned by a Section 162(m) Participant, the Committee
        shall have the right to reduce (but not to increase) the amount payable at
        a
        given level of performance to take into account additional factors that the
        Committee may deem relevant to the assessment of individual or corporate
        performance for the fiscal year or other designated fiscal period or period
        of
        service. 

       

      (d)  Furthermore,
        notwithstanding any other provision of the Plan or any Award which is granted
        to
        a Section 162(m) Participant and is intended to qualify as performance-based
        compensation as described in Section 162(m)(4)(C) of the Code shall be subject
        to any additional limitations set forth in Section 162(m) of the Code (including
        any amendment to Section 162(m) of the Code) or any regulations or rulings
        issued thereunder that are requirements for qualification as performance-based
        compensation as described in Section 162(m)(4)(C) of the Code, and the Plan
        shall be deemed amended to the extent necessary to conform to such requirements.
        

       

      3.3  Limitations
        Applicable to Section 16 Persons.
        Notwithstanding any other provision of the Plan, the Plan, and any Award
        granted
        or awarded to any individual who is then subject to Section 16 of the Exchange
        Act, shall be subject to any additional limitations set forth in any applicable
        exemptive rule under Section 16 of the Exchange Act (including any amendment
        to
        Rule 16b-3 of the Exchange Act) that are requirements for the application
        of
        such exemptive rule. To the extent permitted by applicable law, the Plan
        and
        Awards granted or awarded hereunder shall be deemed amended to the extent
        necessary to conform to such applicable exemptive rule. 

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Conformed
        as of May 10, 2007

       

      3.4  Consideration.
        In
        consideration of the granting of an Award under the Plan, the Holder shall
        agree, in the Award Agreement, to remain in the employ of (or to consult
        for or
        to serve as a Director of, as applicable) the Company or any Subsidiary for
        a
        period of at least one year (or such shorter period as may be fixed in the
        Award
        Agreement or by action of the Administrator following grant of the Award)
        after
        the Award is granted (or, in the case of a Non-Employee Director, until the
        next
        annual meeting of stockholders of the Company). 

       

      3.5  At-Will
        Employment.
        Nothing
        in the Plan or in any Award Agreement hereunder shall confer upon any Holder
        any
        right to continue in the employ of, or as a Consultant for, the Company or
        any
        Subsidiary, or as a director of the Company, or shall interfere with or restrict
        in any way the rights of the Company and any Subsidiary, which are hereby
        expressly reserved, to discharge any Holder at any time for any reason
        whatsoever, with or without cause, except to the extent expressly provided
        otherwise in a written employment agreement between the Holder and the Company
        and any Subsidiary. 

       

      ARTICLE
        IV  

      GRANTING
        OF OPTIONS TO EMPLOYEES, CONSULTANTS AND NON-EMPLOYEE DIRECTORS

       

      4.1  Eligibility.
        Any
        Employee, Consultant or Director selected by the Committee pursuant to Section
        4.4(a)(i) shall be eligible to be granted an Option. Each Non-Employee Director
        of the Company shall be eligible to be granted Options at the times and in
        the
        manner set forth in Section 11.1. 

       

      4.2  Disqualification
        for Stock Ownership.
        No
        person may be granted an Incentive Stock Option under the Plan if such person,
        at the time the Incentive Stock Option is granted, owns stock possessing
        more
        than 10% of the total combined voting power of all classes of stock of the
        Company or any then existing Subsidiary or parent corporation (within the
        meaning of Section 424(e) of the Code) unless such Incentive Stock Option
        conforms to the applicable provisions of Section 422 of the Code. 

       

      4.3  Qualification
        of Incentive Stock Options.
        No
        Incentive Stock Option shall be granted to any person who is not an Employee
        of
        the Company or a Subsidiary that is a corporation. 

       

      4.4  Granting
        of Options to Employees, Consultants and Directors.
        

       

      (a)  The
        Committee shall from time to time, in its absolute discretion, and subject
        to
        applicable limitations of the Plan: 

       

      (i)  Determine
        which Employees are key Employees and select from among the key Employees,
        Consultants or Directors (including Employees, Consultants or Directors who
        have
        previously received Awards under the Plan) such of them as in its opinion
        should
        be granted Options; 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      (ii)  Subject
        to the Award Limit, determine the number of shares to be subject to such
        Options
        granted to the selected key Employees, Consultants or Directors; 

       

      (iii)  Subject
        to Section 4.3, determine whether such Options are to be Incentive Stock
        Options
        or Non-Qualified Stock Options and whether such Options are to qualify as
        performance-based compensation as described in Section 162(m)(4)(C) of the
        Code;
        and 

       

      (iv)  Determine
        the terms and conditions of such Options, consistent with the Plan; provided,
        however,
        that
        the terms and conditions of Options intended to qualify as performance-based
        compensation as described in Section 162(m)(4)(C) of the Code shall include,
        but
        not be limited to, such terms and conditions as may be necessary to meet
        the
        applicable provisions of Section 162(m) of the Code. 

       

      (b)  Upon
        the
        selection of a key Employee, Consultant or Director to be granted an Option,
        the
        Committee shall instruct the Secretary of the Company to issue the Option
        and
        may impose such conditions on the grant of the Option as it deems appropriate.
        

       

      (c)  Any
        Incentive Stock Option granted under the Plan may be modified by the Committee,
        with the consent of the Holder, to disqualify such Option from treatment
        as an
“incentive stock option” under Section 422 of the Code. 

       

      ARTICLE
        V

      TERMS
        OF OPTIONS

       

      5.1  Option
        Price.
        The
        price per share of the shares subject to each Option granted to Employees,
        Consultants and Directors shall be set by the Committee; provided,
        however,
        that
        such price shall be no less than 100% of the Fair Market Value of a share
        of
        Common Stock on the date the Option is granted, and: 

       

      (a)  In
        the
        case of Options intended to qualify as performance-based compensation as
        described in Section 162(m)(4)(C) of the Code, such price shall not be less
        than
        100% of the Fair Market Value of a share of Common Stock on the date the
        Option
        is granted; 

       

      (b)  In
        the
        case of Incentive Stock Options such price shall not be less than 100% of
        the
        Fair Market Value of a share of Common Stock on the date the Option is granted
        (or the date the Option is modified, extended or renewed for purposes of
        Section
        424(h) of the Code); and 

       

      (c)  In
        the
        case of Incentive Stock Options granted to an individual then owning (within
        the
        meaning of Section 424(d) of the Code) more than 10% of the total combined
        voting power of all classes of stock of the Company or any Subsidiary or
        parent
        corporation thereof (within the meaning of Section 424(e) of the Code), such
        price shall not be less than 110% of the Fair Market Value of a share of
        Common
        Stock on the date the Option is granted (or the date the Option is modified,
        extended or renewed for purposes of Section 424(h) of the Code). 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      5.2  Option
        Term.
        The
        term of an Option granted to an Employee, Consultant or Director shall be
        set by
        the Committee in its discretion; provided,
        however,
        that in
        the case of Incentive Stock Options (and Non-Qualified Stock Options granted
        on
        or after April 4, 2007), the term shall not be more than 10 years from the
        date
        the Option is granted, or five years from the date an Incentive Stock Option
        is
        granted if the Incentive Stock Option is granted to an individual then owning
        (within the meaning of Section 424(d) of the Code) more than 10% of the total
        combined voting power of all classes of stock of the Company or any Subsidiary
        or parent corporation thereof (within the meaning of Section 424(e) of the
        Code). Except as limited by requirements of Section 422 of the Code and
        regulations and rulings thereunder applicable to Incentive Stock Options,
        the
        Committee may extend the term of any outstanding Option in connection with
        any
        Termination of Employment or Termination of Consultancy of the Holder, or
        amend
        any other term or condition of such Option relating to such a termination;
        provided,
        however,
        that
        the term of an outstanding Option shall not be extended to a date which is
        more
        than 10 years from the date on which such Option was granted. 

       

      5.3  Option
        Vesting.

       

      (a)  The
        period during which the right to exercise, in whole or in part, an Option
        granted to an Employee or a Consultant vests in the Holder shall be set by
        the
        Committee and the Committee may determine that an Option may not be exercised
        in
        whole or in part for a specified period after it is granted; provided,
        however,
        that,
        unless provided for in the terms of the Award Agreement or otherwise, no
        Option
        shall be exercisable by any Holder who is then subject to Section 16 of the
        Exchange Act within the period ending six months and one day after the date
        the
        Option is granted. At any time after grant of an Option, the Committee may,
        in
        its sole and absolute discretion and subject to whatever terms and conditions
        it
        selects, accelerate the period during which an Option granted to an Employee
        or
        Consultant vests. 

       

      (b)  No
        portion of an Option granted to an Employee, Consultant or Director which
        is
        unexercisable at Termination of Employment, Termination of Consultancy or
        Termination of Directorship, as applicable, shall thereafter become exercisable,
        except as may be otherwise provided in the terms of a written agreement between
        the Company and the Employee, Consultant, or Director or by the Committee
        either
        in the Award Agreement or by action of the Committee following the grant
        of the
        Option. 

       

      (c)  To
        the
        extent that the aggregate Fair Market Value of stock with respect to which
        “incentive stock options” (within the meaning of Section 422 of the Code, but
        without regard to Section 422(d) of the Code) are exercisable for the first
        time
        by a Holder during any calendar year (under the Plan and all other incentive
        stock option plans of the Company and any parent or subsidiary corporation,
        within the meaning of Section 422 of the Code) of the Company, exceeds $100,000,
        such Options shall be treated as Non-Qualified Stock Options to the extent
        required by Section 422 of the Code. The rule set forth in the preceding
        sentence shall be applied by taking Options into account in the order in
        which
        they were granted. For purposes of this Section 5.3(c), the Fair Market Value
        of
        stock shall be determined as of the time the Option with respect to such
        stock
        is granted. 

       

      5.4  Substitute
        Awards.
        Notwithstanding the foregoing provisions of this Article V to the contrary,
        in
        the case of an Option that is a Substitute Award, the price per share of
        the
        shares subject to such Option may be less than the Fair Market Value per
        share
        on the date of grant, provided,
        that
        the excess of: 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (a)  The
        aggregate Fair Market Value (as of the date such Substitute Award is granted)
        of
        the shares subject to the Substitute Award; over 

       

      (b)  The
        aggregate exercise price thereof; does not exceed the excess of: 

       

      (c)  The
        aggregate fair market value (as of the time immediately preceding the
        transaction giving rise to the Substitute Award, such fair market value to
        be
        determined by the Committee) of the shares of the predecessor entity that
        were
        subject to the grant assumed or substituted for by the Company; over

       

      (d)  The
        aggregate exercise price of such shares. 

       

      5.5  Paperless
        Exercise.
        In the
        event that the Company establishes, for itself or using the services of a
        third
        party, an automated system for the exercise of Options, such as a system
        using
        an internet website or interactive voice response, then the paperless exercise
        of options by an Employee, Consultant or Director may be permitted through
        the
        use of such an automated system. 

       

      5.6  Substituting
        SARs.
        Only in
        the event the Company is not accounting for equity compensation under APB
        Opinion 25, the Committee shall have the ability to substitute, without
        receiving permission or consent from any holder of Options hereunder, SARs
        paid
        only in Common Stock (or SARs paid in Common Stock or cash at the Committee’s
        discretion) for outstanding Options; provided,
        the
        terms of the substituted Common Stock SARs are the same as the terms for
        the
        Options and the aggregate difference between the Fair Market Value of the
        underlying shares of Common Stock and the Grant Price of the SARs is equivalent
        to the aggregate difference between the Fair Market Value of the underlying
        shares of Common Stock and the exercise price of the Options. If, in the
        determination of the Committee after consultation with the Company’s auditors,
        this provision creates adverse accounting consequences for the Company, it
        shall
        be considered null and void. 

       

      ARTICLE
        VI

      EXERCISE
        OF OPTIONS 

       

      6.1  Partial
        Exercise.
        An
        exercisable Option may be exercised in whole or in part. However, an Option
        shall not be exercisable with respect to fractional shares and the Administrator
        may require that, by the terms of the Option, a partial exercise be with
        respect
        to a minimum number of shares. 

       

      6.2  Manner
        of Exercise.
        All or
        a portion of an exercisable Option shall be deemed exercised upon delivery
        of
        all of the following to the Secretary of the Company or his or her office:
        

       

      (a)  A
        written
        notice complying with the applicable rules established by the Administrator
        stating that the Option, or a portion thereof, is exercised. The notice shall
        be
        signed by the Holder or other person then entitled to exercise the Option
        or
        such portion of the Option; 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      (b)  Such
        representations and documents as the Administrator, in its absolute discretion,
        deems necessary or advisable to effect compliance with all applicable provisions
        of the Securities Act and any other federal or state securities laws or
        regulations. The Administrator may, in its absolute discretion, also take
        whatever additional actions it deems appropriate to effect such compliance
        including, without limitation, placing legends on share certificates and
        issuing
        stop-transfer notices to agents and registrars; 

       

      (c)  In
        the
        event that the Option shall be exercised pursuant to Section 11.2 by any
        person
        or persons other than the Holder, appropriate proof of the right of such
        person
        or persons to exercise the Option; and 

       

      (d)  Full
        cash
        payment to the Secretary of the Company for the shares with respect to which
        the
        Option, or portion thereof, is exercised. However, the Administrator may,
        in its
        discretion, (i) allow payment, in whole or in part, through the delivery
        of
        shares of Common Stock which have been owned by the Holder for at least six
        months, duly endorsed for transfer to the Company with a Fair Market Value
        on
        the date of delivery equal to the aggregate exercise price of the Option
        or
        exercised portion thereof; (ii) allow payment, in whole or in part, through
        the
        surrender of shares of Common Stock then issuable upon exercise of the Option
        having a Fair Market Value on the date of Option exercise equal to the aggregate
        exercise price of the Option or exercised portion thereof; (iii) allow payment,
        in whole or in part, through the delivery of property of any kind which
        constitutes good and valuable consideration; (iv) allow payment, in whole
        or in
        part, through the delivery of a full recourse promissory note bearing interest
        (at no less than such rate as shall then preclude the imputation of interest
        under the Code) and payable upon such terms as may be prescribed by the
        Administrator; (v) allow payment, in whole or in part, through the delivery
        of a
        notice that the Holder has placed a market sell order with a broker with
        respect
        to shares of Common Stock then issuable upon exercise of the Option, and
        that
        the broker has been directed to pay a sufficient portion of the net proceeds
        of
        the sale to the Company in satisfaction of the Option exercise price,
provided,
        that
        payment of such proceeds is then made to the Company upon settlement of such
        sale; or (vi) allow payment through any combination of the consideration
        provided in the foregoing subparagraphs (i), (ii), (iii), (iv) and (v). In
        the
        case of a promissory note, the Administrator may also prescribe the form
        of such
        note and the security to be given for such note. The Option may not be
        exercised, however, by delivery of a promissory note or by a loan from the
        Company when or where such loan or other extension of credit is prohibited
        by
        law, and payment in the manner prescribed by the preceding sentences shall
        not
        be permitted to the extent that the Administrator determines that payment
        in
        such manner may result in an extension or maintenance of credit, an arrangement
        for the extension of credit, or a renewal of an extension of credit in the
        form
        of a personal loan to or for any Director or executive officer of the Company
        that is prohibited by Section 13(k) of the Exchange Act or other applicable
        law.

       

      6.3  Conditions
        to Issuance of Stock Certificates.
        The
        Company shall not be required to issue or deliver any certificate or
        certificates for shares of stock purchased upon the exercise of any Option
        or
        portion thereof prior to fulfillment of all of the following conditions:
        

       

      (a)  The
        admission of such shares to listing on all stock exchanges on which such
        class
        of stock is then listed; 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      (b)  The
        completion of any registration or other qualification of such shares under
        any
        state or federal law, or under the rulings or regulations of the Securities
        and
        Exchange Commission or any other governmental regulatory body which the
        Administrator shall, in its absolute discretion, deem necessary or advisable;
        

       

      (c)  The
        obtaining of any approval or other clearance from any state or federal
        governmental agency which the Administrator shall, in its absolute discretion,
        determine to be necessary or advisable; 

       

      (d)  The
        lapse
        of such reasonable period of time following the exercise of the Option as
        the
        Administrator may establish from time to time for reasons of administrative
        convenience; and 

       

      (e)  The
        receipt by the Company of full payment for such shares, including payment
        of any
        applicable withholding tax, which in the discretion of the Administrator
        may be
        in the form of consideration used by the Holder to pay for such shares under
        Section 6.2(d). 

       

      6.4  Rights
        as Stockholders.
        Holders
        shall not be, nor have any of the rights or privileges of, stockholders of
        the
        Company in respect of any shares purchasable upon the exercise of any part
        of an
        Option unless and until certificates representing such shares have been issued
        by the Company to such Holders and, except as otherwise provided herein,
        no
        adjustments shall be made for dividends or distributions of other rights
        for
        which the record date is prior to the date such certificates are issued.
        

       

      6.5  Exercise,
        Ownership and Transfer Restrictions.
        The
        Administrator, in its absolute discretion, may impose such restrictions on
        the
        exercise of an Option and the ownership and transferability of the shares
        purchasable upon the exercise of an Option as it deems appropriate. Any such
        restriction shall be set forth in the respective Award Agreement and may
        be
        referred to on the certificates evidencing such shares. The Holder shall
        give
        the Company prompt notice of any disposition of shares of Common Stock acquired
        by exercise of an Incentive Stock Option within (a) two years from the date
        of
        granting (including the date the Option is modified, extended or renewed
        for
        purposes of Section 424(h) of the Code) such Option to such Holder, or (b)
        one
        year after the transfer of such shares to such Holder. 

       

      6.6  Additional
        Limitations on Exercise of Options.
        Holders
        may be required to comply with any timing or other restrictions with respect
        to
        the settlement or exercise of an Option, or the sale of the shares of Common
        Stock acquired upon such exercise, including without limitation a window-period
        limitation, as may be imposed in the discretion of the Administrator or similar
        policies of the Company. 

       

      ARTICLE
        VII

      AWARD
        OF RESTRICTED STOCK 

       

      7.1  Eligibility.
        Subject
        to the Award Limit, Restricted Stock may be awarded to any Employee whom
        the
        Committee determines is a key Employee or any Consultant or Director who
        the
        Committee determines should receive such an Award. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      7.2  Award
        of Restricted Stock.
        

       

      (a)  The
        Committee may from time to time, in its absolute discretion: 

       

      (i)  Determine
        which Employees are key Employees and select from among the key Employees,
        Consultants or Directors (including Employees, Consultants or Directors who
        have
        previously received other awards under the Plan) such of them as in its opinion
        should be awarded Restricted Stock; provided,
        however,
        that
        any awards of Restricted Stock to Non-Employee Directors shall be determined
        by
        the Compensation Committee, or any successor committee thereto carrying out
        its
        responsibilities on the date of the granting of any Award; and 

       

      (ii)  Determine
        the purchase price, if any, and other terms and conditions applicable to
        such
        Restricted Stock, consistent with the Plan. 

       

      (b)  The
        Committee shall establish the purchase price, if any, and form of payment
        for
        Restricted Stock; provided,
        however,
        that
        such purchase price shall be no less than the par value of the Common Stock
        to
        be purchased, unless otherwise permitted by applicable state law. In all
        cases,
        legal consideration shall be required for each issuance of Restricted Stock.
        

       

      (c)  Upon
        the
        selection of a key Employee, Consultant or Director to be awarded Restricted
        Stock, the Committee shall instruct the Secretary of the Company to issue
        such
        Restricted Stock and may impose such conditions on the issuance of such
        Restricted Stock as it deems appropriate. 

       

      7.3  Rights
        as Stockholders.
        Subject
        to Section 7.4, upon delivery of the shares of Restricted Stock to the escrow
        holder pursuant to Section 7.6, the Holder shall have, unless otherwise provided
        by the Committee, all the rights of a stockholder with respect to said shares,
        subject to the restrictions in his or her Award Agreement, including the
        right
        to receive all dividends and other distributions paid or made with respect
        to
        the shares; provided,
        however,
        that in
        the discretion of the Committee, any extraordinary distributions with respect
        to
        the Common Stock shall be subject to the restrictions set forth in Section
        7.4.

       

      7.4  Restriction.
        All
        shares of Restricted Stock issued under the Plan (including any shares received
        by holders thereof with respect to shares of Restricted Stock as a result
        of
        stock dividends, stock splits or any other form of recapitalization) shall,
        in
        the terms of each individual Award Agreement, be subject to such restrictions
        as
        the Committee shall provide, which restrictions may include, without limitation,
        restrictions concerning voting rights and transferability and restrictions
        based
        on duration of employment with the Company, Company performance and individual
        performance; provided,
        however,
        that,
        the period during which the Restricted Stock is subject to such restrictions
        shall be for a period of at least three years from the date the Restricted
        Stock
        is awarded, or for a period of at least one year if such restrictions are
        based
        on Company performance; provided,
        further,
        that,
        unless the Committee otherwise provides in the terms of the Award Agreement
        or
        otherwise, no share of Restricted Stock granted to a person subject to Section
        16 of the Exchange Act shall be sold, assigned or otherwise transferred until
        at
        least six months and one day have elapsed from the date on which the Restricted
        Stock was issued; and provided,
        further,
        that,
        except with respect to shares of Restricted Stock granted to Section 162(m)
        Participants, by action taken after the Restricted Stock is issued, the
        Committee may, upon the occurrence of an extraordinary, non-recurring event
        (including without limitation, a Change in Control) on such terms and conditions
        as it may determine to be appropriate, remove any or all of the restrictions
        imposed by the terms of the Award Agreement. Restricted Stock may not be
        sold or
        encumbered until all restrictions are terminated or expire. If no consideration
        was paid by the Holder upon issuance, a Holder’s rights in unvested Restricted
        Stock shall lapse, and such Restricted Stock shall be surrendered to the
        Company
        without consideration, upon Termination of Employment or, if applicable,
        upon
        Termination of Consultancy with the Company. 

       

      
        
          
          

        

        
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      7.5  Repurchase
        of Restricted Stock.
        The
        Committee shall provide in the terms of each individual Award Agreement that
        the
        Company shall have the right to repurchase from the Holder the Restricted
        Stock
        then subject to restrictions under the Award Agreement immediately upon a
        Termination of Employment or, if applicable, upon a Termination of Consultancy
        between the Holder and the Company, at a cash price per share equal to the
        price
        paid by the Holder for such Restricted Stock. 

       

      7.6  Escrow.
        The
        Secretary of the Company or such other escrow holder as the Committee may
        appoint shall retain physical custody of each certificate representing
        Restricted Stock until all of the restrictions imposed under the Award Agreement
        with respect to the shares evidenced by such certificate expire or shall
        have
        been removed. 

       

      7.7  Legend.
        In
        order to enforce the restrictions imposed upon shares of Restricted Stock
        hereunder, the Committee shall cause a legend or legends to be placed on
        certificates representing all shares of Restricted Stock that are still subject
        to restrictions under Award Agreements, which legend or legends shall make
        appropriate reference to the conditions imposed thereby. 

       

      7.8  Section
        83(b) Election.
        If a
        Holder makes an election under Section 83(b) of the Code, or any successor
        section thereto, to be taxed with respect to the Restricted Stock as of the
        date
        of transfer of the Restricted Stock rather than as of the date or dates upon
        which the Holder would otherwise be taxable under Section 83(a) of the Code,
        the
        Holder shall deliver a copy of such election to the Company immediately after
        filing such election with the Internal Revenue Service. 

       

      ARTICLE
        VIII

      PERFORMANCE
        AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK, STOCK PAYMENTS

       

      8.1  Eligibility.
        Subject
        to the Award Limit, one or more Performance Awards, Dividend Equivalents,
        awards
        of Deferred Stock and/or Stock Payments may be granted to any Employee whom
        the
        Committee determines is a key Employee or any Consultant or Director whom
        the
        Committee determines should receive such an Award. 

       

      8.2  Performance
        Awards.
        

       

      (a)  Any
        key
        Employee, Consultant or Director selected by the Committee may be granted
        one or
        more Performance Awards. The value of such Performance Awards may be linked
        to
        any one or more of the Performance Criteria or other specific performance
        criteria determined appropriate by the Committee, in each case on a specified
        date or dates or over any period or periods determined by the Committee.
        In
        making such determinations, the Committee shall consider (among such other
        factors as it deems relevant in light of the specific type of award) the
        contributions, responsibilities and other compensation of the particular
        key
        Employee, Consultant or Director. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      (b)  Without
        limiting Section 8.2(a), the Committee may grant Performance Awards to any
        162(m) Participant in the form of a cash bonus payable upon the attainment
        of
        objective performance goals which are established by the Committee and relate
        to
        one or more of the Performance Criteria, in each case on a specified date
        or
        dates or over any period or periods determined by the Committee. Any such
        bonuses paid to 162(m) Participants shall be based upon objectively determinable
        bonus formulas established in accordance with the provisions of Section 3.2.
        The
        maximum amount of any Performance Award payable to a 162(m) Participant under
        this Section 8.2(b) shall not exceed the Award Limit with respect to any
        fiscal
        year of the Company. Unless otherwise specified by the Committee at the time
        of
        grant, the Performance Criteria with respect to a Performance Award payable
        to a
        162(m) Participant shall be determined on the basis of GAAP. 

       

      8.3  Dividend
        Equivalents.
        

       

      (a)  Any
        key
        Employee, Consultant or Director selected by the Committee may be granted
        Dividend Equivalents based on the dividends declared on Common Stock, to
        be
        credited as of dividend payment dates, during the period between the date
        a
        Stock Appreciation Right, Deferred Stock or Performance Award is granted,
        and
        the date such Stock Appreciation Right, Deferred Stock or Performance Award
        is
        exercised, vests or expires, as determined by the Committee. Such Dividend
        Equivalents shall be converted to cash or additional shares of Common Stock
        by
        such formula and at such time and subject to such limitations as may be
        determined by the Committee. 

       

      (b)  Any
        Holder of an Option who is an Employee, Consultant or Director selected by
        the
        Committee may be granted Dividend Equivalents based on the dividends declared
        on
        Common Stock, to be credited as of dividend payment dates, during the period
        between the date an Option is granted, and the date such Option is exercised,
        vests or expires, as determined by the Committee. Such Dividend Equivalents
        shall be converted to cash or additional shares of Common Stock by such formula
        and at such time and subject to such limitations as may be determined by
        the
        Committee. 

       

      (c)  Any
        Holder of an Option who is a Non-Employee Director selected by the Board
        may be
        granted Dividend Equivalents based on the dividends declared on Common Stock,
        to
        be credited as of dividend payment dates, during the period between the date
        an
        Option is granted and the date such Option is exercised, vests or expires,
        as
        determined by the Board. Such Dividend Equivalents shall be converted to
        cash or
        additional shares of Common Stock by such formula and at such time and subject
        to such limitations as may be determined by the Board. 

       

      (d)  Dividend
        Equivalents granted with respect to Options intended to be qualified
        performance-based compensation for purposes of Section 162(m) of the Code
        shall
        be payable, with respect to pre-exercise periods, regardless of whether such
        Option is subsequently exercised. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      8.4  Stock
        Payments.
        Any key
        Employee, Consultant or Director selected by the Committee may receive Stock
        Payments in the manner determined from time to time by the Committee. The
        number
        of shares shall be determined by the Committee and may be based upon the
        Performance Criteria or other specific performance criteria determined
        appropriate by the Committee, determined on the date such Stock Payment is
        made
        or on any date thereafter. 

       

      8.5  Deferred
        Stock.
        Any key
        Employee, Consultant or Director selected by the Committee may be granted
        an
        award of Deferred Stock in the manner determined from time to time by the
        Committee. The number of shares of Deferred Stock shall be determined by
        the
        Committee and may be linked to the Performance Criteria or other specific
        performance criteria determined to be appropriate by the Committee, in each
        case
        on a specified date or dates or over any period or periods determined by
        the
        Committee. Common Stock underlying a Deferred Stock award will not be issued
        until the Deferred Stock award has vested, pursuant to a vesting schedule
        or
        Performance Criteria set by the Committee. Unless otherwise provided by the
        Committee, a Holder of Deferred Stock shall have no rights as a Company
        stockholder with respect to such Deferred Stock until such time as the Award
        has
        vested and the Common Stock underlying the Award has been issued. 

       

      8.6  Term.
        The
        term of a Performance Award, Dividend Equivalent, award of Deferred Stock
        and/or
        Stock Payment shall be set by the Committee in its discretion; provided,
        however,
        that
        notwithstanding anything in this Article VIII to the contrary, except as
        may be
        determined otherwise by the Committee in connection with the occurrence of
        an
        extraordinary, non-recurring event (including without limitation a Change
        in
        Control), the period over which any Performance Award, Dividend Equivalent,
        Deferred Stock and/or Stock Payment shall vest and/or be payable shall be
        no
        less than at least three years from the date the right to such Award is granted,
        or over a period of at least one year if such Award is linked to the Performance
        Criteria or other specific performance criteria determined appropriate by
        the
        Committee. 

       

      8.7  Exercise
        or Purchase Price.
        The
        Committee may establish the exercise or purchase price of a Performance Award,
        shares of Deferred Stock or shares received as a Stock Payment; provided,
        however,
        that
        such price shall not be less than the par value of a share of Common Stock,
        unless otherwise permitted by applicable state law. 

       

      8.8  Exercise
        Upon Termination of Employment, Termination of Consultancy or Termination
        of
        Directorship.
        A
        Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
        Payment is exercisable or payable only while the Holder is an Employee,
        Consultant or Director, as applicable; provided,
        however,
        that
        the Administrator in its sole and absolute discretion may provide that the
        Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
        Payment may be exercised or paid subsequent to a Termination of Employment
        following a “change of control or ownership” (within the meaning of Section
        1.162-27(e)(2)(v) or any successor regulation thereto) of the Company;
provided,
        further,
        that,
        except with respect to Performance Awards granted to Section 162(m)
        Participants, the Administrator in its sole and absolute discretion may provide
        that Performance Awards may be exercised or paid following a Termination
        of
        Employment, a Termination of Consultancy or a Termination of Directorship
        without cause, or following a Change in Control of the Company, or because
        of
        the Holder’s retirement, death or disability, or otherwise. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      8.9  Form
        of Payment.
        Payment
        of the amount determined under Section 8.2 or 8.3 above shall be in cash,
        in
        Common Stock or a combination of both, as determined by the Committee. To
        the
        extent any payment under this Article VIII is effected in Common Stock, it
        shall
        be made subject to satisfaction of all provisions of Section 6.3. 

       

      ARTICLE
        IX

      STOCK
        APPRECIATION RIGHTS 

       

      9.1  Grant
        of Stock Appreciation Rights.
        A Stock
        Appreciation Right may be granted to any key Employee, Consultant or Director
        selected by the Committee. A Stock Appreciation Right may be granted (a)
        in
        connection and simultaneously with the grant of an Option, (b) with respect
        to a
        previously granted Option, or (c) independent of an Option. A Stock Appreciation
        Right shall have a per share exercise price which is set by the Committee,
        which
        price shall be no less than 100% of the Fair Market Value of a share of Common
        Stock on the date the Stock Appreciation Right is granted. The term of a
        Stock
        Appreciation Right shall be set by the Committee, but shall not be more than
        10
        years from the date the Stock Appreciation Right was granted, and a Stock
        Appreciation Right shall be subject to other such terms and conditions not
        inconsistent with the Plan as the Committee shall impose and shall be evidenced
        by an Award Agreement. 

       

      9.2  Coupled
        Stock Appreciation Rights.
        

       

      (a)  A
        Coupled
        Stock Appreciation Right (“CSAR”)
        shall
        be related to a particular Option and shall be exercisable only when and
        to the
        extent the related Option is exercisable. 

       

      (b)  A
        CSAR
        may be granted to the Holder for no more than the number of shares subject
        to
        the simultaneously or previously granted Option to which it is coupled.

       

      (c)  A
        CSAR
        shall entitle the Holder (or other person entitled to exercise the Option
        pursuant to the Plan) to surrender to the Company unexercised a portion of
        the
        Option to which the CSAR relates (to the extent then exercisable pursuant
        to its
        terms) and to receive from the Company in exchange therefor an amount determined
        by multiplying the difference obtained by subtracting the Option exercise
        price
        from the Fair Market Value of a share of Common Stock on the date of exercise
        of
        the CSAR by the number of shares of Common Stock with respect to which the
        CSAR
        shall have been exercised, subject to any limitations the Committee may impose.
        

       

      9.3  Independent
        Stock Appreciation Rights.
        

       

      (a)  An
        Independent Stock Appreciation Right (“ISAR”)
        shall
        be unrelated to any Option and shall have a term set by the Committee. An
        ISAR
        shall be exercisable in such installments as the Committee may determine.
        An
        ISAR shall cover such number of shares of Common Stock as the Committee may
        determine; provided,
        however,
        that
        unless the Committee otherwise provides in the terms of the ISAR or otherwise,
        no ISAR granted to a person subject to Section 16 of the Exchange Act shall
        be
        exercisable until at least six months have elapsed from (but excluding) the
        date
        on which the Option was granted. The exercise price per share of Common Stock
        subject to each ISAR shall be set by the Committee. An ISAR is exercisable
        only
        while the Holder is an Employee or Consultant; provided,
        that
        the Committee may determine that the ISAR may be exercised subsequent to
        Termination of Employment, Termination of Consultancy or Termination of
        Directorship without cause, or following a Change in Control of the Company,
        or
        because of the Holder’s retirement, death or disability, or otherwise.

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      (b)  An
        ISAR
        shall entitle the Holder (or other person entitled to exercise the ISAR pursuant
        to the Plan) to exercise all or a specified portion of the ISAR (to the extent
        then exercisable pursuant to its terms) and to receive from the Company an
        amount determined by multiplying the difference obtained by subtracting the
        exercise price per share of the ISAR from the Fair Market Value of a share
        of
        Common Stock on the date of exercise of the ISAR by the number of shares
        of
        Common Stock with respect to which the ISAR shall have been exercised, subject
        to any limitations the Committee may impose. 

       

      9.4  Payment
        and Limitations on Exercise.
        

       

      (a)  Payment
        of the amounts determined under Section 9.2(c) and 9.3(b) above shall be
        in
        cash, in Common Stock (based on its Fair Market Value as of the date the
        Stock
        Appreciation Right is exercised) or a combination of both, as determined
        by the
        Committee. To the extent such payment is effected in Common Stock it shall
        be
        made subject to satisfaction of all provisions of Section 6.3 above pertaining
        to Options. 

       

      (b)  Holders
        of Stock Appreciation Rights may be required to comply with any timing or
        other
        restrictions with respect to the settlement or exercise of a Stock Appreciation
        Right, including a window-period limitation, as may be imposed in the discretion
        of the Committee. 

       

      (c)  Notwithstanding
        anything in this Article IX to the contrary, except as may be determined
        otherwise by the Committee in connection with the occurrence of an
        extraordinary, non-recurring event (including without limitation a Change
        in
        Control), the period over which any Stock Appreciation Right shall become
        exercisable shall be no less than at least three years from the date such
        Stock
        Appreciation Right is granted, or over a period of at least one year if the
        exercisability of such Stock Appreciation Right is linked to the Performance
        Criteria or other specific performance criteria determined appropriate by
        the
        Committee. 

       

      ARTICLE
        X

      ADMINISTRATION
        

       

      10.1  Compensation
        Committee.
        The
        Compensation Committee (or another committee or a subcommittee of the Board
        assuming the functions of the Committee under the Plan) shall consist solely
        of
        two or more Non-Employee Directors appointed by and holding office at the
        pleasure of the Board, each of whom is both a “non-employee director” as defined
        by Rule 16b-3 and an “outside director” for purposes of Section 162(m) of the
        Code. 

       

      10.2  Duties
        and Powers of Committee.
        It
        shall be the duty of the Committee to conduct the general administration
        of the
        Plan in accordance with its provisions. The Committee shall have the power
        to
        interpret the Plan and the Award Agreements, to adopt such rules for the
        administration, interpretation and application of the Plan as are consistent
        therewith, and to interpret, amend or revoke any such rules. Interpretations
        and
        rules with respect to Incentive Stock Options shall be consistent with the
        provisions of Section 422 of the Code. The Committee shall also have the
        power
        to amend any Award Agreement provided that the rights or obligations of the
        Holder of the Award that is the subject of any such Award Agreement are not
        affected adversely; provided, however, that without the approval of the
        stockholders of the Company, neither the Committee nor the Board shall authorize
        the amendment of any outstanding Option or SAR to reduce its exercise price.
        Notwithstanding anything contained herein, no Option or SAR shall be canceled
        and replaced with the grant of an Option or SAR having a lower exercise price
        or
        any other Award under this Plan, nor will any outstanding underwater Options
        or
        SARs under the Plan be purchased for cash without the approval of the
        stockholders of the Company. Grants or awards under the Plan need not be
        the
        same with respect to each Holder. In its absolute discretion, the Board may
        at
        any time and from time to time exercise any and all rights and duties of
        the
        Committee under the Plan except with respect to matters which under Rule
        16b-3
        or Section 162(m) of the Code, or any regulations or rules issued thereunder,
        are required to be determined in the sole discretion of the Committee.
        Notwithstanding the foregoing, the full Board, acting by a majority of its
        members in office, shall conduct the general administration of the Plan with
        respect to Awards granted to Non-Employee Directors. Any determination made
        by
        the Committee or the Board pursuant to this Section 10.2 shall be final,
        binding
        and conclusive. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      10.3  Committee
        Activities Governed by Bylaws.
        The
        Committee shall notice and convene its meetings, vote and otherwise conduct
        itself in accordance with the Company’s bylaws applicable to committees of the
        Board, as the same may be amended or modified from time to time in accordance
        with applicable law. 

       

      10.4  Compensation;
        Professional Assistance; Good Faith Actions.
        Members
        of the Committee shall receive such compensation for their services as members
        as may be determined by the Board. All expenses and liabilities which members
        of
        the Committee incur in connection with the administration of the Plan shall
        be
        borne by the Company. The Committee may, with the approval of the Board,
        employ
        attorneys, consultants, accountants, appraisers, brokers or other persons.
        The
        Committee, the Company and the Company’s officers and Directors shall be
        entitled to rely upon the advice, opinions or valuations of any such persons.
        All actions taken and all interpretations and determinations made by the
        Committee or the Board in good faith shall be final and binding upon all
        Holders, the Company and all other interested persons. No members of the
        Committee or Board shall be personally liable for any action, determination
        or
        interpretation made in good faith with respect to the Plan or Awards, and
        all
        members of the Committee and the Board shall be fully protected by the Company
        in respect of any such action, determination or interpretation. 

       

      10.5  Delegation
        of Authority to Grant Awards.
        The
        Committee may, but need not, delegate from time to time some or all of its
        authority to grant Awards under the Plan to a committee consisting of one
        or
        more members of the Committee or of one or more officers of the Company;
        provided,
        however,
        that
        the Committee may not delegate its authority to grant Awards to individuals
        (a)
        who are subject on the date of the grant to the reporting rules under Section
        16(a) of the Exchange Act, (b) who are Section 162(m) Participants, or (c)
        who
        are officers of the Company who are delegated authority by the Committee
        hereunder. Any delegation hereunder shall be subject to the restrictions
        and
        limits that the Committee specifies at the time of such delegation of authority
        and may be rescinded at any time by the Committee. At all times, any committee
        appointed under this Section 10.5 shall serve in such capacity at the pleasure
        of the Committee. 

       

      
        
          
          

        

        
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        Conformed
          as of May 10, 2007

         

      

      ARTICLE
        XI

      MISCELLANEOUS
        PROVISIONS 

       

      11.1  Grants
        of Awards to Non-Employee Directors.
        Notwithstanding anything herein to the contrary, the grant of any Award to
        a
        Non-Employee Director shall be made by the Board pursuant to a written
        non-discretionary formula established by the Compensation Committee of the
        Board, or any successor committee thereto carrying out its responsibilities
        on
        the date of grant of any such Award (the “Non-Employee
        Director Equity Compensation Policy”).
        The
        Non-Employee Director Equity Compensation Policy shall set forth the type
        of
        Award(s) to be granted to Non-Employee Directors, the number of shares of
        Common
        Stock to be subject to Non-Employee Director Awards, the conditions on which
        such Awards shall be granted, become exercisable and/or payable and expire,
        and
        such other terms and conditions as the Compensation Committee (or such other
        successor committee as described above) determines in its discretion.

       

      11.2  Not
        Transferable.
        

       

      (a)  No
        Award
        under the Plan may be sold, pledged, assigned or transferred in any manner
        other
        than by will or the laws of descent and distribution or, subject to the consent
        of the Administrator, pursuant to a DRO, unless and until such Award has
        been
        exercised, or the shares underlying such Award have been issued, and all
        restrictions applicable to such shares have lapsed. No Award or interest
        or
        right therein shall be liable for the debts, contracts or engagements of
        the
        Holder or his or her successors in interest or shall be subject to disposition
        by transfer, alienation, anticipation, pledge, encumbrance, assignment or
        any
        other means whether such disposition be voluntary or involuntary or by operation
        of law by judgment, levy, attachment, garnishment or any other legal or
        equitable proceedings (including bankruptcy), and any attempted disposition
        thereof shall be null and void and of no effect, except to the extent that
        such
        disposition is permitted by the preceding sentence. 

       

      (b)  During
        the lifetime of the Holder, only he or she may exercise an Option or other
        Award
        (or any portion thereof) granted to him or her under the Plan, unless it
        has
        been disposed of with the consent of the Administrator pursuant to a DRO.
        After
        the death of the Holder, any exercisable portion of an Option or other Award
        may, prior to the time when such portion becomes unexercisable under the
        Plan or
        the applicable Award Agreement, be exercised by his or her personal
        representative or by any person empowered to do so under the deceased Holder’s
        will or under the then applicable laws of descent and distribution.

       

      11.3  Amendment,
        Suspension or Termination of the Plan.
        Except
        as otherwise provided in this Section 11.3, the Plan may be wholly or partially
        amended or otherwise modified, suspended or terminated at any time or from
        time
        to time by the Administrator. However, without approval of the Company’s
        stockholders before or after the action by the Administrator, no action of
        the
        Administrator may be taken that would require approval by the Company’s
        stockholders as a matter of applicable law, regulation or rule, and in any
        event, without approval of the Company’s stockholders before or after the action
        by the Administrator, no action of the Administrator may be taken that would,
        except as provided in Section 11.4, increase the limits imposed in Section
        2.1
        on the maximum number of shares which may be issued under the Plan, change
        the
        class of Employees eligible to participate in the Plan or provide for additional
        material benefits under the Plan. No amendment, suspension or termination
        of the
        Plan shall, without the consent of the Holder, alter or impair any rights
        or
        obligations under any Award theretofore granted or awarded, unless the Award
        itself otherwise expressly so provides. No Awards may be granted or awarded
        during any period of suspension or after termination of the Plan, and in
        no
        event may any Award be granted under the Plan after the first to occur of
        the
        following events: 

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      (a)  The
        expiration of 10 years from the date the Plan is adopted by the Board; or
        

       

      (b)  The
        expiration of 10 years from the date the Plan is approved by the Company’s
        stockholders under Section 11.5. 

       

      11.4  Changes
        in Common Stock or Assets of the Company, Acquisition or Liquidation of the
        Company and Other Corporate Events.
        

       

      (a)  Subject
        to Section 11.4(e), in the event that the Administrator determines that other
        than an Equity Restructuring any dividend or other distribution (whether
        in the
        form of cash, Common Stock, other securities or other property), reorganization,
        merger, consolidation, combination, repurchase, liquidation, dissolution,
        or
        sale transfer, exchange or other disposition of all or substantially all
        of the
        assets of the Company, or exchange of Common Stock or other securities of
        the
        Company, issuance or warrants or other rights to purchase Common Stock or
        other
        securities of the Company or other similar corporate transaction or event,
        in
        the Administrator’s sole discretion, affects the Common Stock such that an
        adjustment is determined by the Administrator to be appropriate in order
        to
        prevent dilution or enlargement of the benefits or potential benefits intended
        to be made available under the Plan or with respect to an Award, then the
        Administrator shall, in such manner as it may deem equitable, adjust any
        or all
        of:

       

      (i)  The
        number and kind of shares of Common Stock (or other securities or property)
        with
        respect to which Awards may be granted or awarded (including, but not limited
        to, adjustments of the limitations in Section 2.1 on the maximum number and
        kind
        of shares which may be issued and adjustments of the Award Limit);

       

      (ii)  The
        number and kind of shares of Common Stock (or other securities or property)
        subject to outstanding Awards; and

       

      (iii)  The
        grant
        or exercise price with respect to any Award. 

       

      (b)  Subject
        to Sections 11.4(c) and 11.4(e), in the event of any transaction or event
        described in Section 11.4(a) or any unusual or nonrecurring transactions
        or
        events affecting the Company, any affiliate of the Company, or the financial
        statements of the Company or any affiliate, or of changes in applicable laws,
        regulations or accounting principles, the Administrator, in its sole and
        absolute discretion, and on such terms and conditions as it deems appropriate,
        either by the terms of the Award or by action taken prior to the occurrence
        of
        such transaction or event and either automatically or upon the Holder’s request,
        is hereby authorized to take any one or more of the following actions whenever
        the Administrator determines that such action is appropriate in order to
        prevent
        dilution or enlargement of the benefits or potential benefits intended to
        be
        made available under the Plan or with respect to any Award under the Plan,
        to
        facilitate such transactions or events or to give effect to such changes
        in
        laws, regulations or principles: 

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      (i)  To
        provide for either the purchase of any such Award for an amount of cash equal
        to
        the amount that could have been attained upon the exercise of such Award
        or
        realization of the Holder’s rights had such Award been currently exercisable or
        payable or fully vested or the replacement of such Award with other rights
        or
        property selected by the Administrator in its sole discretion; 

       

      (ii)  To
        provide that the Award cannot vest, be exercised or become payable after
        such
        event; 

       

      (iii)  To
        provide that such Award shall be exercisable as to all shares covered thereby,
        notwithstanding anything to the contrary in Section 5.3 or 5.4 or the provisions
        of such Award; 

       

      (iv)  To
        provide that such Award be assumed by the successor or survivor corporation,
        or
        a parent or subsidiary thereof, or shall be substituted for by similar options,
        rights or awards covering the stock of the successor or survivor corporation,
        or
        a parent or subsidiary thereof, with appropriate adjustments as to the number
        and kind of shares and prices; 

       

      (v)  To
        make
        adjustments in the number and type of shares of Common Stock (or other
        securities or property) subject to outstanding Awards, and in the number
        and
        kind of outstanding Restricted Stock or Deferred Stock and/or in the terms
        and
        conditions of (including the grant or exercise price), and the criteria included
        in, outstanding options, rights and awards and options, rights and awards
        which
        may be granted in the future; and 

       

      (vi)  To
        provide that, for a specified period of time prior to such event, the
        restrictions imposed under an Award Agreement upon some or all shares of
        Restricted Stock or Deferred Stock may be terminated, and, in the case of
        Restricted Stock, some or all shares of such Restricted Stock may cease to
        be
        subject to repurchase under Section 7.5 or forfeiture under Section 7.4 after
        such event.

       

      In
        the
        event of any Change in Control, each outstanding Option, Performance Award,
        Stock Appreciation Right, Dividend Equivalent, Stock Payment, Restricted
        Stock,
        or Deferred Stock award shall, immediately prior to the effective date of
        the
        Change in Control, automatically become fully exercisable for all of the
        shares
        of Common Stock at the time subject to such rights or fully vested, as
        applicable, and may, as applicable, be exercised for any or all of those
        shares
        as fully-vested shares of Common Stock. However, an outstanding Award shall
        not
        so accelerate if and to the extent: (i) such Award is, in connection with
        the
        Change in Control either to be assumed by the successor or survivor entity
        (or
        parent thereof) or to be replaced with a comparable right with respect to
        shares
        of the capital stock of the successor or survivor corporation (or parent
        or
        Subsidiary thereof) or (ii) the acceleration of exercisability of such Award
        is
        subject to other limitations imposed by the Committee (or the Board, in the
        case
        of Awards granted to Non-Employee Directors) at the time of grant. The
        determination of comparability of rights under clause (i) above shall be
        made by
        the Committee in its sole discretion (or the Board, in the case of Awards
        granted to Non-Employee Directors), and its determination shall be final,
        binding and conclusive. 

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      (c)  Subject
        to Sections 3.2, 3.3 and 11.4(e), the Administrator may, in its discretion,
        include such further provisions and limitations in any Award, agreement or
        certificate, as it may deem appropriate. 

       

      (d)  With
        respect to Awards which are granted to Section 162(m) Participants and are
        intended to qualify as performance-based compensation under Section
        162(m)(4)(C), no adjustment or action described in this Section 11.4 or in
        any
        other provision of the Plan shall be authorized to the extent that such
        adjustment or action would cause such Award to fail to so qualify under Section
        162(m)(4)(C), or any successor provisions thereto. No adjustment or action
        described in this Section 11.4 or in any other provision of the Plan shall
        be
        authorized to the extent that such adjustment or action would cause the Plan
        to
        violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or
        action
        shall be authorized to the extent such adjustment or action would result
        in
        short-swing profits liability under Section 16 or violate the exemptive
        conditions of Rule 16b-3 unless the Administrator determines that the Award
        is
        not to comply with such exemptive conditions. The number of shares of Common
        Stock subject to any Award shall always be rounded to the next whole number.
        

       

      (e)  The
        existence of the Plan, the Award Agreement and the Awards granted hereunder
        shall not affect or restrict in any way the right or power of the Company
        or the
        stockholders of the Company to make or authorize any adjustment,
        recapitalization, reorganization or other change in the Company’s capital
        structure or its business, any merger or consolidation of the Company, any
        issue
        of stock or of options, warrants or rights to purchase stock or of bonds,
        debentures, preferred or prior preference stocks whose rights are superior
        to or
        affect the Common Stock or the rights thereof or which are convertible into
        or
        exchangeable for Common Stock, or the dissolution or liquidation of the Company,
        or any sale or transfer of all or any part of its assets or business, or
        any
        other corporate act or proceeding, whether of a similar character or
        otherwise.

       

      (f)  In
        connection with the occurrence of any Equity Restructuring, and notwithstanding
        anything to the contrary in Section 11.4(a) and 11.4(b):

       

      (i)  The
        number and type of securities subject to each outstanding Award and the exercise
        price or grant price thereof, if applicable, will be proportionately adjusted.
        The adjustments provided under this Section 11.4(f)(i) shall be nondiscretionary
        and shall be final and binding on the affected Holder and the
        Company.

       

      (ii)  The
        Administrator shall make such proportionate adjustments, if any, as the
        Administrator in its discretion may deem appropriate to reflect such Equity
        Restructuring with respect to the aggregate number and kind of shares that
        may
        be issued under the Plan (including, but not limited to, adjustments of the
        limitations in Section 2.1 and the Award Limit). 

       

      11.5  Approval
        of Plan by Stockholders.
        The
        Plan will be submitted for the approval of the Company’s stockholders after the
        date of the Board’s initial adoption of the Plan, and any amendment to the Plan
        increasing the aggregate number of shares of Common Stock issuable under the
        Plan will be submitted for the approval of the Company’s stockholders after the
        date of the Board’s adoption of such amendment. Awards may be granted or awarded
        prior to such stockholder approval, provided that such Awards shall not be
        exercisable nor shall such Awards vest prior to the time when the Plan is
        approved by the stockholders, and provided further
        that if
        such approval is not obtained, all Awards previously granted or awarded under
        the Plan shall thereupon be canceled and become null and void. In addition,
        if
        the Board determines that Awards other than Options or Stock Appreciation
        Rights
        which may be granted to Section 162(m) Participants should continue to be
        eligible to qualify as performance-based compensation under Section 162(m)(4)(C)
        of the Code, the Performance Criteria must be disclosed to and approved by
        the
        Company’s stockholders no later than the first stockholder meeting that occurs
        in the fifth year following the year in which the Company’s stockholders
        previously approved the Performance Criteria. 

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      11.6  Tax
        Withholding.
        The
        Company shall be entitled to require payment in cash or deduction from other
        compensation payable to each Holder of any sums required by federal, state
        or
        local tax law to be withheld with respect to the issuance, vesting, exercise
        or
        payment of any Award. The Administrator may in its discretion and in
        satisfaction of the foregoing requirement allow such Holder to elect to have
        the
        Company withhold shares of Common Stock otherwise issuable under such Award
        (or
        allow the return of shares of Common Stock) having a Fair Market Value equal
        to
        the sums required to be withheld. Notwithstanding any other provision of
        the
        Plan, the number of shares of Common Stock which may be withheld with respect
        to
        the issuance, vesting, exercise or payment of any Award (or which may be
        repurchased from the Holder of such Award within six months after such shares
        of
        Common Stock were acquired by the Holder from the Company) in order to satisfy
        the Holder’s federal and state income and payroll tax liabilities with respect
        to the issuance, vesting, exercise or payment of the Award shall be limited
        to
        the number of shares which have a Fair Market Value on the date of withholding
        or repurchase equal to the aggregate amount of such liabilities based on
        the
        minimum statutory withholding rates for federal and state tax income and
        payroll
        tax purposes that are applicable to such supplemental taxable income.

       

      11.7  Loans.
        The
        Committee may, in its discretion, extend one or more loans to key Employees
        in
        connection with the exercise or receipt of an Award granted or awarded under
        the
        Plan, or the issuance of Restricted Stock or Deferred Stock awarded under
        the
        Plan. The terms and conditions of any such loan shall be set by the Committee.
        Notwithstanding the foregoing, no loan shall be made to an Employee under
        this
        Section to the extent such loan shall result in an extension or maintenance
        of
        credit, an arrangement for the extension of credit, or a renewal of an extension
        of credit in the form of a personal loan to or for any Director or executive
        officer of the Company that is prohibited by Section 13(k) of the Exchange
        Act
        or other applicable law. In the event that the Administrator determines in
        its
        discretion that any loan under this Section may be or will become prohibited
        by
        Section 13(k) of the Exchange Act or other applicable law, the Administrator
        may
        provide that such loan shall be immediately due and payable in full and may
        take
        any other action in connection with such loan as the Administrator determines
        in
        its discretion to be necessary or appropriate for the repayment, cancellation
        or
        extinguishment of such loan. 

       

      11.8  Forfeiture
        Provisions.
        Pursuant to its general authority to determine the terms and conditions
        applicable to Awards under the Plan, the Administrator shall, to the extent
        permitted by applicable law, have the right to provide, in the terms of Awards
        made under the Plan, or to require a Holder to agree by separate written
        instrument, that (a)(i) any proceeds, gains or other economic benefit actually
        or constructively received by the Holder upon any receipt or exercise of
        the
        Award, or upon the receipt or resale of any Common Stock underlying the Award,
        must be paid to the Company, and (ii) the Award shall terminate and any
        unexercised portion of the Award (whether or not vested) shall be forfeited,
        if
        (b)(i) a Termination of Employment, Termination of Consultancy or Termination
        of
        Directorship occurs prior to a specified date, or within a specified time
        period
        following receipt or exercise of the Award, or (ii) the Holder at any time,
        or
        during a specified time period, engages in any activity in competition with
        the
        Company, or which is inimical, contrary or harmful to the interests of the
        Company, as further defined by the Administrator or (iii) the Holder incurs
        a
        Termination of Employment, Termination of Consultancy or Termination of
        Directorship for cause. 

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      
         

        Conformed
          as of May 10, 2007

         

      

      11.9  Effect
        of Plan Upon Options and Compensation Plans.
        The
        adoption of the Plan shall not affect any other compensation or incentive
        plans
        in effect for the Company or any Subsidiary. Nothing in the Plan shall be
        construed to limit the right of the Company (a) to establish any other forms
        of
        incentives or compensation for Employees, Directors or Consultants of the
        Company or any Subsidiary, or (b) to grant or assume options or other rights
        or
        awards otherwise than under the Plan in connection with any proper corporate
        purpose including but not by way of limitation, the grant or assumption of
        options in connection with the acquisition by purchase, lease, merger,
        consolidation or otherwise, of the business, stock or assets of any corporation,
        partnership, limited liability company, firm or association. 

       

      11.10  Compliance
        with Laws.
        The
        Plan, the granting and vesting of Awards under the Plan and the issuance
        and
        delivery of shares of Common Stock and the payment of money under the Plan
        or
        under Awards granted or awarded hereunder are subject to compliance with
        all
        applicable federal and state laws, rules and regulations (including but not
        limited to state and federal securities law and federal margin requirements)
        and
        to such approvals by any listing, regulatory or governmental authority as
        may,
        in the opinion of counsel for the Company, be necessary or advisable in
        connection therewith. Any securities delivered under the Plan shall be subject
        to such restrictions, and the person acquiring such securities shall, if
        requested by the Company, provide such assurances and representations to
        the
        Company as the Company may deem necessary or desirable to assure compliance
        with
        all applicable legal requirements. To the extent permitted by applicable
        law,
        the Plan and Awards granted or awarded hereunder shall be deemed amended
        to the
        extent necessary to conform to such laws, rules and regulations. 

       

      11.11  Titles.
        Titles
        are provided herein for convenience only and are not to serve as a basis
        for
        interpretation or construction of the Plan. 

       

      11.12  Governing
        Law.
        The
        Plan and any agreements hereunder shall be administered, interpreted and
        enforced under the internal laws of the State of Delaware without regard
        to
        conflicts of laws thereof. 

       

      *
        * * * *
        *

       

      
        
          
          

        

        
          27Unassociated Document

    YTB
      INTERNATIONAL, INC.

    2007
      INDEPENDENT MARKETING REPRESENTATIVE

    FORM
      OF RESTRICTED STOCK AWARD

     

    WHEREAS,
      on
      _________, 2007, (the “Grant Date”) the Board of Directors of YTB International,
      Inc. (the “Board”) agreed to grant to_________
      (the
“Grantee”) a restricted stock award (the “Award”) in connection with the
      Grantee’s provision of services to YTB International, Inc. (the “Company”) as an
      Independent Marketing Representative (“IMR”) of the Company.

     

    NOW,
      THEREFORE, the
      Company and the Grantee, intending to be legally bound hereby, agree as
      follows:

     

    1.     Grant
      of Award. 

     

    (a)     Subject
      to the terms and conditions set forth below in this Agreement, the Grantee
      shall
      receive an Award of [__________] shares of Company common stock (the “Shares”).
      The Award shall vest according to Section 2 below.

     

    (b)     The
      Award
      shall be administered and interpreted by the Board. The Board may delegate
      its
      authority to a committee or subcommittee, which may consist of members of the
      Board. Unless otherwise specified in this Agreement, the term “Board” shall
      include any committee or subcommittee to which the Board has delegated such
      authority. 

     

    2.     Vesting
      of Award. 

     

    (a)     Except
      as
      otherwise provided in this Agreement, the number of Shares underlying the Award
      shall vest on the corresponding Vesting Date set forth below; provided, however,
      that the Grantee has retained his or her status at the Sales Director Level
      on
      such Vesting Date. 

     

    
      	
              Vesting
                Date

               

            	
              Number
                of Shares 

               

            
	
              Date
                of Grant

               

            	
              [32.24%
                of Shares]

               

            
	
              1st
                Anniversary of Date of Grant

               

            	
              [16.94%
                of Shares]

               

            
	
              2nd
                Anniversary of Date of Grant

               

            	
              [16.94%
                of Shares]

               

            
	
              3rd
                Anniversary of Date of Grant

               

            	
              [16.94%
                of Shares]

               

            
	
              4th
                Anniversary of Date of Grant

               

            	
              [16.94%
                of Shares]

               

            

    

    

     

    (b)     The
      unvested portion of the Award shall be immediately forfeited upon (i) the
      Grantee’s failure for any reason to maintain his status at the Sales Director
      Level; or (ii) the Company’s termination of the Grantee’s service relationship
      for Cause. All unvested Shares shall immediately become vested if the Company
      terminates the Grantee’s service relationship for any reason other than for
      Cause (excluding death or disability).

     

    (c)     For
      purposes of this Agreement, the following terms shall have the meaning set
      forth
      below:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

              (i)     Sales
      Director Level.     Unless
      otherwise determined by the Company, for purposes of this Agreement, the Grantee
      shall be treated as maintaining Sales Director Level at a particular Vesting
      Date if all of the following conditions are satisfied: (i) the Grantee has
      2,000
      or more Referring Travel Agents (“RTAs”) in the Grantee’s downline organization;
      (ii) the Grantee has increased the absolute number of RTAs in the Grantee’s
      downline since the prior applicable Vesting Date; (iii) since the prior
      applicable Vesting Date the Grantee has maintained either (a) their current
      balance level; or (b) the required balance level among Grantee’s
      downlines in
      accordance with Company policies; (iv) since the prior applicable Vesting Date
      the Grantee has held no less than eight RTA certification meetings and attended
      all Director meetings called by senior management; and (v) the Grantee has
      not
      become a representative for any other network marketing company.

     

              (ii)     Cause.
      Cause
      shall mean any of the following grounds for termination of the Grantee’s service
      relationship with the Company: (i) Grantee shall have been convicted of a
      felony; or (ii) Grantee engages in willful misconduct in the performance of
      service for the Company.

     

    3.     Delivery
      of Shares, Restrictions and Distributions.

     

    (a)     The
      Grantee may not assign, transfer, pledge, or otherwise dispose of (any such
      action being hereinafter referred to as a “Disposition”) any unvested Shares or
      rights under this Agreement. Any attempt to assign, transfer, pledge, or
      otherwise dispose of any unvested Shares or any rights under this Agreement
      contrary to the provisions hereof, and the levy of any execution, attachment,
      or
      similar process upon the unvested Shares, shall be null, void, and without
      effect and shall result in the immediate forfeiture to the Company without
      consideration of any unvested Shares. The Grantee understands that the Shares
      have not been registered under the Securities Act of 1933, as amended (the
      “Securities Act”), or registered or qualified under any state securities laws.
      Accordingly, notwithstanding the vesting of any shares provided in Section
      2 of
      this Agreement and the delivery to the participant of such Shares, the Grantee
      may not offer or sell the Shares absent (i) the registration of the resale
      of
      the Shares under the Securities Act and compliance with any registration,
      qualification or other applicable requirements of any applicable state
      securities laws, or (ii) the availability of an exemption from the registration
      requirements of the Securities Act and any applicable state securities law
      requirements. The Grantee further understands and agrees that (i) the Company
      is
      under no obligation to register or qualify the resale of the Shares under the
      Securities Act or any state securities law or to take any action which may
      be
      required by the Company to make an exemption from any such registration or
      qualification requirement available for any offer or sale of the Shares by
      the
      Grantee, and (ii) the Company may require, as a condition to any Disposition
      of
      the Shares by the Grantee, that the Grantee furnish to the Company an opinion
      of
      counsel satisfactory to the Company that such Disposition is exempt from the
      registration requirements of the Securities Act and in compliance with any
      applicable state securities law requirements. 

     

    (b)     Notwithstanding
      any other provision of this Agreement, the award, issuance, vesting and delivery
      to the Grantee of the Shares and any distributions thereon shall be subject
      to
      compliance with all applicable laws and regulations from time to time in effect
      and to compliance with the rules and regulations of any securities exchange
      on
      which securities of the Company may then be listed. The Grantee hereby agrees
      to
      take any action and consents to the taking of any action by the Company, with
      respect to the Shares awarded hereunder, necessary to achieve compliance with
      such laws, regulations and rules. Any determination by the Company with respect
      to the need for any action in order to achieve such compliance with laws,
      regulations or rules shall be final, binding and conclusive. 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)     The
      Grantee hereby agrees to indemnify the Company and hold it harmless from and
      against any and all damages or liabilities incurred by the Company (including
      liabilities for attorneys’ fees and disbursements) arising out of any breach by
      the Grantee of this Agreement, including, without limitation, any attempted
      disposition of the Shares by the Grantee in violation of this Agreement or
      applicable securities law requirements. 

     

    (d)     The
      Grantee agrees that any legends required or deemed necessary or appropriate
      by
      the Company under federal or state securities laws, may be placed on the
      certificate(s) representing the Shares. The following legend shall be placed
      on
      the Shares:

     

    NOTICE
      IS
      HEREBY GIVEN THAT THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE HELD
      SUBJECT TO, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, GIFTED OR
      OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH, THE TERMS, CONDITIONS AND
      RESTRICTIONS SET FORTH IN THE AGREEMENT BETWEEN YTB INTERNATIONAL, INC. AND
      THE
      GRANTEE (THE “AGREEMENT”), A COPY OF WHICH IS ON FILE AT THE OFFICE OF YTB
      INTERNATIONAL, INC. NO SUCH TRANSACTION SHALL BE RECOGNIZED AS VALID OR
      EFFECTIVE UNLESS THERE SHALL HAVE BEEN COMPLIANCE WITH THE TERMS AND CONDITIONS
      OF THE AGREEMENT. BY ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER
      (I) REPRESENTS AND WARRANTS THAT THE SHARES OF STOCK REPRESENTED HEREBY ARE
      BEING ACQUIRED FOR INVESTMENT FOR THE ACCOUNT OF THE HOLDER AND NOT WITH A
      VIEW
      TO THE RESALE OR OTHER DISTRIBUTION THEREOF AND (II) ACKNOWLEDGES THAT VIOLATION
      OF THE PROVISIONS OF THE AGREEMENT IS NOT ADEQUATELY COMPENSABLE BY MONETARY
      DAMAGES AND THAT, IN ADDITION TO OTHER RELIEF, THE TERMS THEREOF MAY BE
      SPECIFICALLY ENFORCED IN AN ACTION FOR INJUNCTIVE RELIEF. 

     

    IN
      ADDITION, THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR FOREIGN
      SECURITIES LAW (THE “ACTS”)
      AND
      MAY NOT BE TRANSFERRED BY THE HOLDER EXCEPT (1) PURSUANT TO A REGISTRATION
      STATEMENT OR OTHER APPROPRIATE REGISTRATION EFFECTIVE UNDER THE ACTS, OR (2)
      PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACTS AND
      THE
      DELIVERY OF A LEGAL OPINION BY COUNSEL FOR YTB INTERNATIONAL,
      INC. THAT REGISTRATION IS NOT REQUIRED.  

     

    (e)     The
      Grantee hereby authorizes the Company or its attorneys or other agents to retain
      custody of the certificates representing the unvested Shares awarded hereunder
      until such time as the Shares vest. As soon as practicable after the date on
      which any Shares vest, the Company will cause to be delivered to the Grantee
      (which delivery may be by the U.S. mail at the last address for the Grantee
      indicated in the Company’s records) such Shares registered in the name of the
      Grantee. Contemporaneously
      with the signing of this Agreement, the Grantee shall deliver to the Company,
      along with a signed copy of this Agreement, five (5) signed but undated copies
      of the stock power attached hereto as Exhibit A, executed in blank by the
      Grantee. The Company shall not be required to deliver any certificates for
      which
      such stock powers have not previously been received by it. 

     

    (f)     The
      Grantee further understands and agrees that until the Shares vest, any
      distributions with respect to unvested Shares shall be paid to and held by
      the
      Company under and subject to the terms of this Agreement. As soon as practicable
      after the date on which the Shares vest, the Company will cause to be paid
      or
      delivered to the Grantee (which payment or delivery may be by the U.S. mail
      at
      the last address for the Grantee indicated in the Company’s records), the
      distributions held by the Company with respect to such Shares, without interest
      thereon. In the event and at the time any Shares are forfeited to the Company
      as
      provided in Section 2, all distributions held by the Company with respect to
      such forfeited Shares shall be forfeited to and revert to the Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.     Change
      in Control. 

     

    (a)     Upon
      a
      Change in Control of the Company, the Board of Directors may, in its discretion,
      accelerate the vesting on all unvested Shares. 

     

    (b)     Upon
      a
      Change in Control where the Company is not the surviving corporation (or
      survives only as a subsidiary of another corporation), the Board may, in
      addition to any action taken pursuant to clause (a) above, take one or a
      combination of the following actions: (i) replace all outstanding Awards that
      are not vested with comparable Awards by the surviving corporation (or a parent
      or subsidiary of the surviving corporation), or (ii) exchange outstanding
      unvested Shares for a payment by the Company in cash. 

     

    (c)     For
      purpose of this Agreement, a “Change in Control” of the Company means the
      determination (which may be made effective as of a particular date specified
      by
      the Board) by the Board, made by a majority vote that a Change in Control has
      occurred, or is about to occur. Such a change shall not include, however, a
      restructuring, reorganization, merger, or other change in capitalization in
      which the persons who own an interest in the Company on the date hereof (the
      “Current Owners”) (or any individual or entity which receives from a Current
      Owner an interest in the Company through will or the laws of descent and
      distribution) maintain more than a 50% voting or economic interest in the
      resultant entity. Regardless of the vote of the Board or whether or not the
      Board votes, a Change in Control shall be deemed to have occurred as of the
      first day if any one or more of the following subsections shall have been
      satisfied:

     

    (i)     Any
      person (other than a person in control of the Company as of the effective date
      of this Agreement, or other than a trustee or other fiduciary holding securities
      under an Grantee benefit plan of the Company, or a company owned directly or
      indirectly by the stockholders of the Company in substantially the same
      proportions as their ownership of stock of the Company), becomes the beneficial
      owner, directly or indirectly, of securities of the Company representing more
      than thirty-five percent (35%) of the combined voting power of the Company’s
      then outstanding securities; 

     

    (ii)     individuals
      who, as of the effective date of this Agreement, constituted the Board (the
      “Incumbent Board”) cease for any reasons to constitute at least a majority of
      the Board; provided,
      that
      any person becoming a director subsequent to the effective date of this
      Agreement, whose election, or nomination for election by the Company’s
      shareholders, was approved by a vote of at least three quarters of the directors
      comprising the Incumbent Board (other than an election or nomination of an
      individual whose initial assumption of office is in connection with an actual
      or
      threatened election contest relating to the election of the directors of the
      Company) shall be, for purposes of this Agreement, considered as though such
      person were a member of the Incumbent Board, or

     

    (iii)     The
      stockholders of the Company approve:

     

    
      	
              (1)

               

            	
              A
                plan of complete liquidation of the Company; 

               

            
	
              (2)

               

            	
              An
                agreement for the sale or disposition of all or substantially all
                of the
                Company’s assets; or

               

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv)     A
      merger,
      consolidation, or reorganization of the Company with or involving any other
      company, other than a merger, consolidation, or reorganization that would result
      in the voting securities of the Company outstanding immediately prior thereto
      continuing to represent (either by remaining outstanding or by being converted
      into voting securities of the surviving entity) at least 50% of the combined
      voting power of the voting securities of the Company (or such surviving entity)
      outstanding immediately after such merger, consolidation, or
      reorganization. 

     

    5.     Grantee
      Rights.

     

    (a)     The
      grant
      of the Award shall not confer upon the Grantee any right to continue to provide
      service to the Company and shall not interfere in any way with the right of
      Company to terminate the Grantee’s relationship with the Company. 

     

    (b)     The
      rights granted pursuant to the Award shall not afford Grantee any rights or
      additional rights to compensation or damages in consequence of the loss or
      termination of his relationship with the Company for any reason whatsoever.
      

     

    (c)     Grantee
      shall not be entitled to any compensation or damages for any loss or potential
      loss which Grantee may suffer by reason of a forfeiture of the Award due to
      the
      termination of his relationship with the Company for any reason. 

     

    6.     Taxes.
      

     

    (a)     The
      Grantee acknowledges that any and all taxes, whether local, state, or federal,
      imposed as a result of this Award or any sums paid hereunder shall be borne
      by
      Grantee without reimbursement by the Company. 

     

    (b)     The
      Grantee understands that under Section 83 of the Internal Revenue Code of 1986,
      as amended (the “Code”), the fair market value of the Shares on the date any
      forfeiture restrictions applicable to such Shares lapse will be reportable
      as
      ordinary income on such lapse date. The Grantee understands that he may elect
      under Section 83(b) of the Code to be taxed at the Grant Date, rather than
      when
      such Shares ceases to be subject to such forfeiture restrictions. Such election
      must be filed with the Internal Revenue Service within thirty (30) days after
      the date of this Agreement. The form for making this election is attached as
      Exhibit B hereto. GRANTEE
      UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE THIRTY (30) DAY PERIOD
      WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE GRANTEE AS AND WHEN
      THE
      FORFEITURE RESTRICTIONS LAPSE.

     

    (c)     GRANTEE ACKNOWLEDGES
      THAT IT IS GRANTEE’S SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A
      TIMELY ELECTION UNDER SECTION 83(b),
      EVEN
      IF GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING
      ON
      HIS BEHALF.
      This
      filing should be made by registered or certified mail, return receipt requested,
      and Grantee must
      retain two (2) copies of the completed form for filing with his state and
      federal tax returns for the current tax year and an additional copy for his
      personal records.

     

    (d)     Grantee
      agrees to hold harmless and indemnify the Company, any member of its Board
      of
      Directors and any equity holder from any and all Federal, state, local,
      withholding or employment tax liability that may arise from this
      Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.     No
      Shareholder Rights. The
      Grantee shall not have any of the rights and privileges of a shareholder with
      respect to unvested Shares.

     

    8.     Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of Illinois applicable to agreements made and to be performed
      entirely within such State, without regard to the conflicts of law principles
      of
      such State.

     

    9.     Assignment
      and Transfers. The
      Company may without the consent of the Grantee assign all of its rights and
      obligations under this Agreement to a wholly-owned subsidiary, a newly created
      legal entity (or a partnership controlled by the Company), subsidiaries of
      the
      Company or to a successor in interest to the Company which shall assume all
      obligations and liabilities hereunder.

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused its duly authorized officers to execute and attest this
      Agreement, and the Grantee has executed this Agreement, effective as of the
      date
      first written above. 

    
      	 	 	 
	 	YTB
              INTERNATIONAL, INC. 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
J.
              Scott Tomer, President
	 	 

     

    I
      hereby
      accept the Award described in this Agreement, and I agree to be bound by the
      terms of the Agreement. I hereby further agree that all the decisions and
      determinations of the Board shall be final, binding, and
      conclusive.

     

     

     

    

 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IRREVOCABLE
      STOCK POWER

     

    FOR
      VALUE
      RECEIVED, the undersigned does (do) hereby sell, assign and transfer
      unto

     

    

     

    
      	
               

               

              YTB
                INTERNATIONAL,
                INC.

               

            	 
	 	
              (Social
                Security # or EIN)

               

            

    

     

    _____________
      Shares of the Common Stock, $.001 par value per share, of YTB INTERNATIONAL,
      Inc.
      (the “Company”), represented by Certificate(s) No. _____________ inclusive,
      standing in the name of the undersigned on the books of the
      Company.

    

     

    The
      undersigned does (do) hereby irrevocably constitute and appoint
      ___________________ as attorney-in-fact to transfer the said Shares of Common
      Stock on the books of the Company with full power of substitution.

     

    
      	 	 	 
	
              (Dated)

               

            	 	
              (Signature)

               

            
	 	 	
              (Print
                Name)

               

            

    

    

     

    In
      the
      presence of:

     

    

     

    ____________________________________________

     

    Note: The
      signature(s) on this Stock Power must correspond exactly with the name(s)
      appearing on the face of the Certificate(s)

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    EXHIBIT
      B

     

    SECTION
      83(b) ELECTION 

     

    

     

    Pursuant
      to Section 83(b) of the Internal Revenue Code of 1986 (the “Code”), I hereby
      elect to have the value of the restricted property described below taxed at
      the
      time of transfer. 

     

    1.     Taxpayer’s
      name, identification (social security) number and address:

     

    (a)     Name:
      
      
        

      
 

    (b)     Identification
      Number:  

      

    

    (c)     Address:  

      

    

     

      
        

      

       

      
        

      

       

    

     

    2.     Description
      of the restricted property:
        Shares
      of
      Common Stock of YTB INTERNATIONAL,
      Inc.

     

    3.     Date
      of transfer of the restricted property, and the taxable year for which this
      election is made:

    

    (a)     Date
      of transfer: January __, 2007

     

    (b)     Taxable
      year: Calendar Year Ended: 2007.

    

     

    4.     Nature
      of the restriction: The Shares of YTB INTERNATIONAL,
      Inc.
      Shares are subject to a four (4) year vesting period. 

     

    5.     Fair
      market value of the restricted property at the time of the transfer equals
      [$_____],
      determined without regard to any lapse restriction (as defined in Treas. Reg.
      §1.83-3(i)):

     

    6.     Amount
      paid for the restricted property: $0.00.

     

    7.     A
      copy of this statement is being furnished to YTB INTERNATIONAL,
      Inc...

     

    

     

    
      	 	 
	
              Signature
                of Taxpayer

               

            	
              Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]