Document:

kl08053_ex10-1.htm

    
      

    

     

     

     

     

     

     

     

     

     

    KIDVILLE,
INC.

    

    2008 INCENTIVE COMPENSATION
PLAN

    
    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

     

     

     

    1.           Purpose                                                                                               1

    2.           Definitions                                                                                          1

    3.           Administration.                                                                                          6 

    4.           Shares
Subject to Plan.                                                                                     7

    5.           Eligibility                                                                                             8

    6.           Specific
Terms of Awards.                                                                                      
8

    7.           Certain
Provisions Applicable to Awards.                                                                          13

    8.           Code
Section 162(m) Provisions.                                                                                 
15 

    9.           Change
in Control.                                                                                         
16

    10.         General
Provisions.                                                                                        
18

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    

    

    KIDVILLE,
INC.

    2008
INCENTIVE COMPENSATION PLAN

    

    1. Purpose.  The
purpose of this 2008 INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist
KIDVILLE, INC., a Delaware corporation (the “Company”) and its
Related Entities (as hereinafter defined) in attracting, motivating, retaining
and rewarding high-quality executives and other employees, officers, directors,
consultants and other persons who provide services to the Company or its Related
Entities by enabling such persons to acquire or increase a proprietary interest
in the Company in order to strengthen the mutuality of interests between such
persons and the Company’s stockholders, and providing such persons with
performance incentives to expend their maximum efforts in the creation of
stockholder value.

     

    2. Definitions.  For
purposes of the Plan, the following terms shall be defined as set forth below,
in addition to such terms defined in Section 1 hereof and elsewhere
herein.

     

    (a) “Award”
means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award, Share granted as a bonus or in lieu of another Award, Dividend
Equivalent, Other Stock-Based Award or Performance Award, together with any
other right or interest, granted to a Participant under the Plan.

     

    (b) “Award
Agreement” means any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder.

     

    (c) “Beneficiary”
and
“Beneficial Ownership” means the person, persons, trust or trusts that
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant’s death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(b)
hereof.  If, upon a Participant’s death, there is no designated
Beneficiary or surviving designated Beneficiary, then the term Beneficiary means
the person, persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

     

    (d) “Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3 under
the Exchange Act and any successor to such Rule.

     

    (e) “Board”
means the Company’s Board of Directors.

     

    (f) “Cause”
shall, with respect to any Participant, have the meaning specified in the Award
Agreement.  In the absence of any definition in the Award Agreement,
“Cause” shall have the equivalent meaning or the same meaning as “cause” or “for
cause” set forth in any employment, consulting, or other agreement for the
performance of services between the Participant and the Company or a Related
Entity or, in the absence of any such agreement or any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform,
in a reasonable manner, his or her duties as assigned by the Company or a
Related Entity, (ii) any violation or breach by the Participant of his or her
employment, consulting or other similar agreement with the Company or a Related
Entity, if any, (iii) any violation or breach by the Participant of any
non-competition, non-solicitation, non-disclosure and/or other similar agreement
with the Company or a Related Entity, (iv) any act by the Participant of

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    dishonesty
or bad faith with respect to the Company or a Related Entity, (v) use of
alcohol, drugs or other similar substances in a manner that adversely affects
the Participant’s work performance, or (vi) the commission by the Participant of
any act, misdemeanor, or crime reflecting unfavorably upon the Participant or
the Company or any Related Entity.  The good faith determination by
the Committee of whether the Participant’s Continuous Service was terminated by
the Company for “Cause” shall be final and binding for all purposes
hereunder.

     

    (g) “Change in
Control” means a Change in Control as defined in Section 9(b) of the
Plan.

     

    (h) “Code”
means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations
thereto.

     

    (i) “Committee”
means a committee designated by the Board to administer the Plan; provided,
however, that if the Board fails to designate a committee or if there are no
longer any members on the committee so designated by the Board, or for any other
reason determined by the Board, then the Board shall serve as the
Committee.  The Committee shall consist of at least two directors, and
each member of the Committee shall be (i) a “non-employee director” within
the meaning of  Rule 16b-3 (or any successor rule) under the Exchange
Act, unless administration of the Plan by “non-employee directors” is not then
required in order for exemptions under Rule 16b-3 to apply to transactions under
the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the
Code and (iii) “Independent”.

     

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

     

    (k) “Continuous
Service” means the uninterrupted provision of services to the Company or
any Related Entity in any capacity of Employee, Director, Consultant or other
service provider.  Continuous Service shall not be considered to be
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entities, or any successor entities, in any
capacity of Employee, Director, Consultant or other service provider or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director, Consultant or
other service provider (except as otherwise provided in the Award
Agreement).  An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave.

     

    (l) “Covered
Employee” means the Person who, as of the end of the taxable year, either
is the principal executive officer of the Company or is serving as the acting
principal executive officer of the Company, and each other Person whose
compensation is required to be disclosed in the Company’s filings with the
Securities and Exchange Commission by reason of that person being among the
three highest compensated officers of the Company as of the end of a taxable
year, or such other person as shall be considered a “covered employee” for
purposes of Section 162(m) of the Code.

     

     

    
      
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    (m) “Deferred
Stock” means a right to receive Shares, including Restricted Stock, cash
measured based upon the value of Shares or a combination thereof, at the end of
a specified deferral period.

     

    (n) “Deferred Stock
Award” means an Award of Deferred Stock granted to a Participant under
Section 6(e) hereof.

     

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

     

    (p) “Disability”
means a permanent and total disability (within the meaning of Section 22(e) of
the Code), as determined by a medical doctor satisfactory to the
Committee.

     

    (q) “Dividend
Equivalent” means a right, granted to a Participant under Section 6(g)
hereof, to receive cash, Shares, other Awards or other property equal in value
to dividends paid with respect to a specified number of Shares, or other
periodic payments.

     

    (r) “Effective
Date” means the effective date of the Plan, which shall be the date on
which this Plan is approved by stockholders of the Company eligible to vote in
the election of directors, by a vote sufficient to meet the requirements of Code
Sections 162(m) (if applicable) and 422, applicable requirements under the rules
of any stock exchange or automated quotation system on which the Shares may be
listed on quoted, and other laws, regulations and obligations of the Company
applicable to the Plan.

     

    (s) “Eligible
Person” means each officer, Director, Employee, Consultant and other
person who provides services to the Company or any Related
Entity.  The foregoing notwithstanding, only employees of the Company,
or any parent corporation or subsidiary corporation of the Company (as those
terms are defined in Sections 424(e) and (f) of the Code, respectively), shall
be Eligible Persons for purposes of receiving any Incentive Stock
Options.  An Employee on leave of absence may be considered as still
in the employ of the Company or a Related Entity for purposes of eligibility for
participation in the Plan.

     

    (t) “Employee”
means any person, including an officer or Director, who is an employee of the
Company or any Related Entity.  The payment of a director’s fee by the
Company or a Related Entity shall not be sufficient to constitute “employment”
by the Company.

     

    (u) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules
thereto.

     

    (v) “Fair Market
Value” means the fair market value of Shares, Awards or other property as
determined by the Committee, or under procedures established by the
Committee.

     

    (w) “Good
Reason” shall, with respect to any Participant, have the meaning
specified in the Award Agreement.  In the absence of any definition in
the Award Agreement, “Good Reason” shall have the equivalent meaning or the same
meaning as “good reason” or “for good reason” set forth in any employment,
consulting or other agreement for the performance of services between the
Participant and the Company or a Related Entity or, in the absence of any

     

     

    
      
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    such
agreement or any such definition in such agreement, such term shall mean: (i)
the assignment to the Participant of any duties inconsistent in any material
respect with the Participant’s duties or responsibilities as assigned by the
Company or a Related Entity, or any other action by the Company or a Related
Entity which results in a material diminution in such duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
or a Related Entity promptly after receipt of notice thereof given by the
Participant; (ii) any material failure by the Company or a Related Entity to
comply with its obligations to the Participant as agreed upon, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company or a Related Entity promptly after receipt of
notice thereof given by the Participant; or (iii) the Company’s or Related
Entity’s requiring the Participant to be based at any office or location outside
of fifty miles from the location of employment or service as of the date of
Award, except for travel reasonably required in the performance of the
Participant’s responsibilities.

     

    (x) “Incentive Stock
Option” means any Option designated as an incentive stock option within
the meaning of Section 422 of the Code or any successor provision
thereto.

     

    (y) “Independent”,
when referring to either the Board or members of the Committee, shall have the
same meaning as used in the rules of the American Stock Exchange or any national
securities exchange on which any securities of the Company are listed for
trading, and if not listed for trading, by the rules of the American Stock
Exchange.

     

    (z) “Incumbent
Board” means the Incumbent Board as defined in Section 9(b)(ii) of the
Plan.

     

    (aa) “Option”
means a right granted to a Participant under Section 6(b) hereof, to purchase
Shares or other Awards at a specified price during specified time
periods.

     

    (bb) “Optionee”
means a person to whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan.

     

    (cc) “Other Stock-Based
Awards” means Awards granted to a Participant under Section 6(i)
hereof.

     

    (dd) “Participant”
means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible
Person.

     

    (ee) “Performance
Award” shall mean any Award of Performance Shares or Performance Units
granted pursuant to Section 6(h).

     

    (ff) “Performance
Period” means that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.

     

    (gg) “Performance
Share” means any grant pursuant to Section 6(h) of a unit valued by
reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including cash, 

     

     

    
      
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    Shares,
other property, or any combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the time
of such grant or thereafter.

     

    (hh) “Performance
Unit” means any grant pursuant to Section 6(h) of a unit valued by
reference to a designated amount of property (including cash) other than Shares,
which value may be paid to the Participant by delivery of such property as the
Committee shall determine, including cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.

     

    (ii) “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a
“group” as defined in Section 13(d) thereof.

     

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

     

    (kk) “Restricted
Stock” means any Share issued with the restriction that the holder may
not sell, transfer, pledge or assign such Share and with such risks of
forfeiture and other restrictions as the Committee, in its sole discretion, may
impose (including any restriction on the right to vote such Share and the right
to receive any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.

     

    (ll) “Restricted Stock
Award” means an Award granted to a Participant under Section 6(d)
hereof.

     

    (mm) “Rule
16b-3” means Rule 16b-3, as from time to time in effect and applicable to
the Plan and Participants, promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act.

     

    (nn) “Shares”
means the shares of common stock of the Company, par value $0.001 per share, and
such other securities as may be substituted (or resubstituted) for Shares
pursuant to Section 10(c) hereof.

     

    (oo) “Stock
Appreciation Right” means a right granted to a Participant under Section
6(c) hereof.

     

    (pp) “Subsidiary”
means any corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined voting power of
the then outstanding securities or interests of such corporation or other entity
entitled to vote generally in the election of directors or in which the Company
has the right to receive 50% or more of the distribution of profits or 50% or
more of the assets on liquidation or dissolution.

     

    (qq) “Substitute
Awards” means Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, Awards previously granted, or
the 

     

     

     

    
      
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    right or
obligation to make future Awards, by a company acquired by the Company or any
Related Entity or with which the Company or any Related Entity
combines.

     

    3. Administration.

     

    (a) Authority of the
Committee.  The Plan shall be administered by the Committee,
including the Board acting as the Committee.  The Committee shall have
full and final authority, subject to and consistent with the provisions of the
Plan, to select Eligible Persons to become Participants, grant Awards, determine
the type, number and other terms and conditions of, and all other matters
relating to, Awards, prescribe Award Agreements (which need not be identical for
each Participant) and rules and regulations for the administration of the Plan,
construe and interpret the Plan and Award Agreements and correct defects, supply
omissions or reconcile inconsistencies therein, and to make all other decisions
and determinations as the Committee may deem necessary or advisable for the
administration of the Plan.  In exercising any discretion granted to
the Committee under the Plan or pursuant to any Award, the Committee shall not
be required to follow past practices, act in a manner consistent with past
practices, or treat any Eligible Person or Participant in a manner consistent
with the treatment of other Eligible Persons or Participants.

     

    (b) Manner of
Exercise of Committee Authority.  The Committee, and not the
Board, shall exercise sole and exclusive discretion on any matter relating to a
Participant then subject to Section 16 of the Exchange Act with respect to
the Company to the extent necessary in order that transactions by such
Participant shall be exempt under Rule 16b-3 under the Exchange
Act.  Any action of the Committee shall be final, conclusive and
binding on all persons, including the Company, its Related Entities, Eligible
Persons, Participants, Beneficiaries, transferees under Section 10(b) hereof or
other persons claiming rights from or through a Participant, and
stockholders.  The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee.  The Committee
may delegate to officers or managers of the Company or any Related Entity, or
committees thereof, the authority, subject to such terms as the Committee shall
determine, to perform such functions, including administrative functions as the
Committee may determine to the extent that such delegation will not result in
the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to
Participants subject to Section 16 of the Exchange Act in respect of the Company
and will not cause Awards intended to qualify as “performance-based
compensation” under Code Section 162(m) to fail to so qualify.  The
Committee may appoint agents to assist it in administering the
Plan.

     

    (c) Limitation of
Liability.  The Committee and the Board, and each member
thereof, shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him or her by any officer or Employee, the
Company’s independent auditors, Consultants or any other agents assisting in the
administration of the Plan.  Members of the Committee and the Board,
and any officer or Employee acting at the direction or on behalf of the
Committee or the Board, shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.

     

     

    
      
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    4. Shares
Subject to Plan.

     

    (a) Limitation on
Overall Number of Shares Available for Delivery Under
Plan.  Subject to adjustment as provided in Section 10(c)
hereof, the total number of Shares reserved and available for delivery under the
Plan shall be Nine Million (9,000,000).  Any Shares that are subject
to Awards of Options or Stock Appreciation Rights shall be counted against this
limit as one (1) Share for every one (1) Share granted. Any Shares that are
subject to Awards other than Options or Stock Appreciation Rights shall be
counted against this limit as one and one-half (1.5) Shares for every one (1)
Share granted. Any Shares delivered under the Plan may consist, in whole or in
part, of authorized and unissued shares or treasury shares.

     

    (b) Application of
Limitation to Grants of Award.  No Award may be granted if the
number of Shares to be delivered in connection with such an Award exceeds the
number of Shares remaining available for delivery under the Plan, minus the
number of Shares deliverable in settlement of or relating to then outstanding
Awards.  The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example, in the case
of tandem or substitute awards) and make adjustments if the number of Shares
actually delivered differs from the number of Shares previously counted in
connection with an Award.

     

    (c) Availability of
Shares Not Delivered under Awards and Adjustments to Limits.

     

    (i) If any
Shares subject to an Award are forfeited, expire or otherwise terminate without
issuance of such Shares, or any Award is settled for cash or otherwise does not
result in the issuance of all or a portion of the Shares subject to such Award,
the Shares shall, to the extent of such forfeiture, expiration, termination,
cash settlement or non-issuance, again be available for Awards under the Plan,
subject to Section 4(c)(v) below.

     

    (ii) In the
event that any Option or other Award granted hereunder is exercised through the
tendering of Shares (either actually or by attestation) or by the withholding of
Shares by the Company, or withholding tax liabilities arising from such option
or other award are satisfied by the tendering of Shares (either actually or by
attestation) or by the withholding of Shares by the Company, then only the
number of Shares issued net of the Shares tendered or withheld shall be counted
for purposes of determining the maximum
number of Shares available for grant under the Plan.

     

    (iii) Substitute
Awards shall not reduce the Shares authorized for grant under the Plan or
authorized for grant to a Participant in any period.  Additionally, in
the event that a company acquired by the Company or any Related Entity or with
which the Company or any Related Entity combines has shares available under a
pre-existing plan approved by stockholders and not adopted in contemplation of
such acquisition or combination, the shares available for delivery pursuant to
the terms of such pre-existing plan (as adjusted, to the extent appropriate,
using the exchange ratio or other adjustment or valuation ratio or formula used
in such acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for delivery under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants
could

     

     

    
      
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    have been
made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees or
Directors prior to such acquisition or combination.

     

    (iv) Any Share
that again become available for delivery pursuant to this Section 4(c) shall be
added back as one (1) Share if such Shares were subject to Options or Stock
Appreciation Rights granted under the Plan, and as one and one-half (1.5) Shares
if such Shares were subject to Awards other than Options or Stock Appreciation
Rights granted under the Plan.

     

    (v) Notwithstanding
anything in this Section 4(c) to the contrary, but subject to adjustment as
provided in Section 10(c) hereof, the maximum aggregate number of Shares that
may be issued under the Plan as a result of the exercise of the Incentive Stock
Options shall be Nine Million (9,000,000) Shares.

     

    5. Eligibility.  Awards
may be granted under the Plan only to Eligible Persons.

     

    6. Specific
Terms of Awards.

     

    (a) General.  Awards
may be granted on the terms and conditions set forth in this Section
6.  In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section 10(e)), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of the Participant’s Continuous Service and
terms permitting a Participant to make elections relating to his or her
Award.  The Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under the Plan.  Except in cases in which the
Committee is authorized to require other forms of consideration under the Plan,
or to the extent other forms of consideration must be paid to satisfy the
requirements of Delaware law, no consideration other than services may be
required for the grant (as opposed to the exercise) of any Award.

     

    (b) Options.  The
Committee is authorized to grant Options to any Eligible Person on the following
terms and conditions:

     

    (i) Exercise
Price.  Other than in connection with Substitute Awards, the
exercise price per Share purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall not, in the case of Incentive
Stock Options, be less than 100% of the Fair Market Value of a Share on the date
of grant of the Option and shall not, in any event, be less than the par value
of a Share on the date of grant of the Option.  If an Employee owns or
is deemed to own (by reason of the attribution rules applicable under Section
424(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company (or any parent corporation or subsidiary corporation of the
Company, as those terms are defined in Sections 424(e) and (f) of the Code,
respectively) and an Incentive Stock Option is granted to such employee, the
exercise price of such Incentive Stock Option (to the extent required by the
Code at the time of grant) shall be no less than 110% of the Fair Market Value
of a Share on the date such Incentive Stock Option is granted.

     

     

    
      
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    (ii) Time and Method
of Exercise.  The Committee shall determine the time or times
at which or the circumstances under which an Option may be exercised in whole or
in part (including based on achievement of performance goals and/or future
service requirements), the time or times at which Options shall cease to be or
become exercisable following termination of Continuous Service or upon other
conditions, the methods by which the exercise price may be paid or deemed to be
paid (including in the discretion of the Committee a cashless exercise
procedure), the form of such payment, including, without limitation, cash,
Shares (including without limitation the withholding of Shares otherwise
deliverable pursuant to the Award), other Awards or awards granted under other
plans of the Company or a Related Entity, or other property (including notes or
other contractual obligations of Participants to make payment on a deferred
basis provided that such deferred payments are not in violation of the
Sarbanes-Oxley Act of 2002, or any rule or regulation adopted thereunder or any
other applicable law), and the methods by or forms in which Shares will be
delivered or deemed to be delivered to Participants.

     

    (iii) Incentive Stock
Options.  The terms of any Incentive Stock Option granted under
the Plan shall comply in all respects with the provisions of Section 422 of the
Code.  Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options (including any Stock
Appreciation Right issued in tandem therewith) shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code, unless the Participant has first requested, or
consents to, the change that will result in such
disqualification.  Thus, if and to the extent required to comply with
Section 422 of the Code, Options granted as Incentive Stock Options shall be
subject to the following special terms and conditions:

     

    (A)           the
Option shall not be exercisable for more than ten years after the date such
Incentive Stock Option is granted; provided, however, that if a Participant owns
or is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of the
Company (or any parent corporation or subsidiary corporation of the Company, as
those terms are defined in Sections 424(e) and (f) of the Code, respectively)
and the Incentive Stock Option is granted to such Participant, the term of the
Incentive Stock Option shall be (to the extent required by the Code at the time
of the grant) for no more than five years from the date of grant;
and

     

    (B)           The
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the Shares with respect to which Incentive Stock Options
granted under the Plan and all other option plans of the Company (and any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f) of the Code, respectively) that become exercisable
for the first time by the Participant during any calendar year shall not (to the
extent required by the Code at the time of the grant) exceed
$100,000.

     

    (c) Stock
Appreciation Rights.  The Committee may grant Stock
Appreciation Rights to any Eligible Person in conjunction with all or part of
any Option granted under the Plan or at any subsequent time during the term of
such Option (a “Tandem
Stock Appreciation Right”), or without regard to any Option (a “Freestanding Stock
Appreciation 

     

     

     

    
      
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    Right”), in each case
upon such terms and conditions as the Committee may establish in its sole
discretion, not inconsistent with the provisions of the Plan, including the
following:

     

    (i) Right to
Payment.  A Stock Appreciation Right shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one Share on the date of exercise over
(B) the grant price of the Stock Appreciation Right as determined by the
Committee.  The grant price of a Stock Appreciation Right shall not be
less than 100% of the Fair Market Value of a Share on the date of grant, in the
case of a Freestanding Stock Appreciation Right, or less than the associated
Option exercise price, in the case of a Tandem Stock Appreciation
Right.

     

    (ii) Other
Terms.  The Committee shall determine at the date of grant or
thereafter, the time or times at which and the circumstances under which a Stock
Appreciation Right may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time
or times at which Stock Appreciation Rights shall cease to be or become
exercisable following termination of Continuous Service or upon other
conditions, the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Shares will be delivered or
deemed to be delivered to Participants, whether or not a Stock Appreciation
Right shall be in tandem or in combination with any other Award, and any other
terms and conditions of any Stock Appreciation Right.

     

    (iii) Tandem Stock
Appreciation Rights. Any Tandem Stock Appreciation Right may be granted
at the same time as the related Option is granted or, for Options that are not
Incentive Stock Options, at any time thereafter before exercise or expiration of
such Option.  Any Tandem Stock Appreciation Right related to an Option
may be exercised only when the related Option would be exercisable and the Fair
Market Value of the Shares subject to the related Option exceeds the exercise
price at which Shares can be acquired pursuant to the Option.  In
addition, if a Tandem Stock Appreciation Right exists with respect to less than
the full number of Shares covered by a related Option, then an exercise or
termination of such Option shall not reduce the number of Shares to which the
Tandem Stock Appreciation Right applies until the number of Shares then
exercisable under such Option equals the number of Shares to which the Tandem
Stock Appreciation Right applies. Any Option related to a Tandem Stock
Appreciation Right shall no longer be exercisable to the extent the Tandem Stock
Appreciation Right has been exercised, and any Tandem Stock Appreciation Right
shall no longer be exercisable to the extent the related Option has been
exercised.

     

    (d) Restricted Stock
Awards.  The Committee is authorized to grant Restricted Stock
Awards to any Eligible Person on the following terms and
conditions:

     

    (i) Grant and
Restrictions.  Restricted Stock Awards shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, or as otherwise provided in this Plan,
covering a period of time specified by the Committee (the “Restriction
Period”).  The terms of any Restricted Stock Award granted
under the Plan shall be set forth in a written Award Agreement which shall
contain provisions determined by the Committee and not inconsistent with the
Plan.  The restrictions may lapse separately or in combination at such
times, under such circumstances (including based on achievement of performance
goals and/or future service requirements), in such installments or 

     

     

     

    
      
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    otherwise,
as the Committee may determine at the date of grant or
thereafter.  Except to the extent restricted under the terms of the
Plan and any Award Agreement relating to a Restricted Stock Award, a Participant
granted Restricted Stock shall have all of the rights of a stockholder,
including the right to vote the Restricted Stock and the right to receive
dividends thereon (subject to any mandatory reinvestment or other requirement
imposed by the Committee).  During the Restriction Period, subject to
Section 10(b) below, the Restricted Stock may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the Participant.

     

    (ii) Forfeiture.  Except
as otherwise determined by the Committee, upon termination of a Participant’s
Continuous Service during the applicable Restriction Period, the Participant’s
Restricted Stock that is at that time subject to a risk of forfeiture that has
not lapsed or otherwise been satisfied shall be forfeited and reacquired by the
Company; provided that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that forfeiture
conditions relating to Restricted Stock Awards shall be waived in whole or in
part in the event of terminations resulting from specified causes.

     

    (iii) Certificates for
Stock.  Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine.  If
certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical possession
of the certificates, and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.

     

    (iv) Dividends and
Splits.  As a condition to the grant of a Restricted Stock
Award, the Committee may require or permit a Participant to elect that any cash
dividends paid on a Share of Restricted Stock be automatically reinvested in
additional Shares of Restricted Stock or applied to the purchase of additional
Awards under the Plan.  Unless otherwise determined by the Committee,
Shares distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Shares or other property have been distributed.

     

    (e) Deferred Stock
Award.  The Committee is authorized to grant Deferred Stock
Awards to any Eligible Person on the following terms and
conditions:

     

    (i) Award and
Restrictions.  Satisfaction of a Deferred Stock Award shall
occur upon expiration of the deferral period specified for such Deferred Stock
Award by the Committee (or, if permitted by the Committee, as elected by the
Participant).  In addition, a Deferred Stock Award shall be subject to
such restrictions (which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee may
determine.  A Deferred Stock Award may be satisfied by delivery of
Shares, cash equal to the Fair Market Value of the specified number of Shares
covered by the Deferred Stock, or a combination thereof, as determined by the
Committee 

     

     

    
      
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    at the
date of grant or thereafter.  Prior to satisfaction of a Deferred
Stock Award, a Deferred Stock Award carries no voting or dividend or other
rights associated with Share ownership.

     

    (ii) Forfeiture.  Except
as otherwise determined by the Committee, upon termination of a Participant’s
Continuous Service during the applicable deferral period or portion thereof to
which forfeiture conditions apply (as provided in the Award Agreement evidencing
the Deferred Stock Award), the Participant’s Deferred Stock Award that is at
that time subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited; provided that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any individual
case, that forfeiture conditions relating to a Deferred Stock Award shall be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of any Deferred Stock Award.

     

    (iii) Dividend
Equivalents.  Unless otherwise determined by the Committee at
date of grant, any Dividend Equivalents that are granted with respect to any
Deferred Stock Award shall be either (A) paid with respect to such Deferred
Stock Award at the dividend payment date in cash or in Shares of unrestricted
stock having a Fair Market Value equal to the amount of such dividends, or (B)
deferred with respect to such Deferred Stock Award and the amount or value
thereof automatically deemed reinvested in additional Deferred Stock, other
Awards or other investment vehicles, as the Committee shall determine or permit
the Participant to elect.  The applicable Award Agreement shall
specify whether any Dividend Equivalents shall be paid at the dividend payment
date, deferred or deferred at the election of the Participant.  If the
Participant may elect to defer the Dividend Equivalents, such election shall be
made within 30 days after the grant date of the Deferred Stock Award, but in no
event later than 12 months before the first date on which any portion of such
Deferred Stock Award vests.

     

    (f) Bonus Stock and
Awards in Lieu of Obligations.  The Committee is authorized to
grant Shares to any Eligible Persons as a bonus, or to grant Shares or other
Awards in lieu of obligations to pay cash or deliver other property under the
Plan or under other plans or compensatory arrangements, provided that, in the
case of Eligible Persons subject to Section 16 of the Exchange Act, the amount
of such grants remains within the discretion of the Committee to the extent
necessary to ensure that acquisitions of Shares or other Awards are exempt from
liability under Section 16(b) of the Exchange Act.  Shares or Awards
granted hereunder shall be subject to such other terms as shall be determined by
the Committee.

     

    (g) Dividend
Equivalents.  The Committee is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to receive
cash, Shares, other Awards, or other property equal in value to the regular
dividends paid with respect to a specified number of Shares, or other periodic
payments.  Dividend Equivalents may be awarded on a free-standing
basis or in connection with another Award.  The Committee may provide
that Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Shares, Awards, or other investment
vehicles, and subject to such restrictions on transferability and risks of
forfeiture, as the Committee may specify.  Any such determination by
the Committee shall be made at the grant date of the applicable
Award.

     

     

    
      
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    (h) Performance
Awards.  The Committee is authorized to grant Performance
Awards to any Eligible Person payable in cash, Shares or other Awards, on terms
and conditions established by the Committee, subject to the provisions of
Section 8 if and to the extent that the Committee shall, in its sole discretion,
determine that an Award shall be subject to those provisions.  The
performance criteria to be achieved during any Performance Period and the length
of the Performance Period shall be determined by the Committee upon the grant of
each Performance Award.  Except as provided in Section 9 or as may be
provided in an Award Agreement, Performance Awards will be distributed only
after the end of the relevant Performance Period.  The performance
goals to be achieved for each Performance Period shall be conclusively
determined by the Committee and may be based upon the criteria set forth in
Section 8(b), or in the case of an Award that the Committee determines shall not
be subject to Section 8 hereof, any other criteria that the Committee, in its
sole discretion, shall determine should be used for that purpose.  The
amount of the Award to be distributed shall be conclusively determined by the
Committee.  Performance Awards may be paid in a lump sum or in
installments following the close of the Performance Period or, in accordance
with procedures established by the Committee, on a deferred basis.

     

    (i) Other Stock-Based
Awards.  The Committee is authorized, subject to limitations
under applicable law, to grant to any Eligible Person such other Awards that may
be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Shares, as deemed by the Committee to be
consistent with the purposes of the Plan.  Other Stock-Based Awards
may be granted to Participants either alone or in addition to other Awards
granted under the Plan, and such Other Stock-Based Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan.  The Committee shall determine the terms and conditions of
such Awards.  Shares delivered pursuant to an Award in the nature of a
purchase right granted under this Section 6(i) shall be purchased for such
consideration, (including without limitation loans from the Company or a Related
Entity provided that such loans are not in violation of the Sarbanes Oxley Act
of 2002, or any rule or regulation adopted thereunder or any other applicable
law) paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Shares, other Awards or other property, as the
Committee shall determine.

     

    7. Certain
Provisions Applicable to Awards.

     

    (a) Stand-Alone,
Additional, Tandem and Substitute Awards.  Awards granted under
the Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution or exchange for, any other Award
or any award granted under another plan of the Company, any Related Entity, or
any business entity to be acquired by the Company or a Related Entity, or any
other right of a Participant to receive payment from the Company or any Related
Entity.  Such additional, tandem, and substitute or exchange Awards
may be granted at any time.  If an Award is granted in substitution or
exchange for another Award or award, the Committee shall require the surrender
of such other Award or award in consideration for the grant of the new
Award.  In addition, Awards may be granted in lieu of cash
compensation, including in lieu of cash amounts payable under other plans of the
Company or any Related Entity, in which the value of Stock subject to the Award
is equivalent in value to the cash compensation (for example, Deferred Stock or
Restricted Stock), or in which the exercise price, grant price or purchase price
of the Award in the nature of a right 

     

     

    
      
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    that may
be exercised is equal to the Fair Market Value of the underlying Stock minus the
value of the cash compensation surrendered (for example, Options or Stock
Appreciation Right granted with an exercise price or grant price “discounted” by
the amount of the cash compensation surrendered), provided that any such
determination to grant an Award in lieu of cash compensation must be made in
compliance with Section 409A of the Code.

     

    (b) Term of
Awards.  The term of each Award shall be for such period as may
be determined by the Committee; provided that in no event shall the term of any
Option or Stock Appreciation Right exceed a period of ten years (or in the case
of an Incentive Stock Option such shorter term as may be required under Section
422 of the Code).

     

    (c) Form and Timing
of Payment Under Awards; Deferrals.  Subject to the terms of
the Plan and any applicable Award Agreement, payments to be made by the Company
or a Related Entity upon the exercise of an Option or other Award or settlement
of an Award may be made in such forms as the Committee shall determine,
including, without limitation, cash, Shares, other Awards or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis, provided that any determination to pay in installments or on a deferred
basis shall be made by the Committee at the date of grant.  Any
installment or deferral provided for in the preceding sentence shall, however,
be subject to the Company’s compliance with applicable law and all applicable
rules of the American Stock Exchange or any national securities exchange on
which the Company’s securities are listed for trading.  The settlement
of any Award may be accelerated, and cash paid in lieu of Shares in connection
with such settlement, in the discretion of the Committee or upon occurrence of
one or more specified events (in addition to a Change in
Control).  Installment or deferred payments may be required by the
Committee (subject to Section 10(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award Agreement) or permitted at the election of
the Participant on terms and conditions established by the
Committee.  The Committee may, without limitation, make provision for
the payment or crediting of a reasonable interest rate on installment or
deferred payments or the grant or crediting of Dividend Equivalents or other
amounts in respect of installment or deferred payments denominated in
Shares.

     

    (d) Exemptions from
Section 16(b) Liability.  It is the intent of the Company that
the grant of any Awards to, or other transaction by, a Participant who is
subject to Section 16 of the Exchange Act shall be exempt from Section 16(b)
pursuant to an applicable exemption (except for transactions acknowledged in
writing to be non-exempt by such Participant). Accordingly, if any provision of
this Plan or any Award Agreement does not comply with the requirements of Rule
16b-3, then applicable to any such transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 so that such Participant shall avoid liability under
Section 16(b).

     

    (e) Code Section
409A.

     

    (i) It is the
intention of the Company that Awards under the Plan shall comply with the
provisions of Section 409A of the Code, applicable Treasury Regulations and
other applicable administrative guidance, and the Plan shall be interpreted in
such manner.

     

     

    
      
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    (ii) With
respect to any Award that constitutes a “nonqualified deferred compensation
plan” under Section 409A of the Code (a “Section 409A Plan”),
any references herein to a termination of employment shall mean a separation
from service within the meaning of Section 409A and applicable Treasury
Regulations.

     

    8. Code
Section 162(m) Provisions.

     

    (a) Covered
Employees.  The Committee, in its discretion, may determine at
the time an Award is granted to an Eligible Person who is, or is likely to be,
as of the end of the tax year in which the Company would claim a tax deduction
in connection with such Award, a Covered Employee, that the provisions of this
Section 8 shall be applicable to such Award.

     

    (b) Performance
Criteria.  If an Award is subject to this Section 8, then the
lapsing of restrictions thereon and the distribution of cash, Shares or other
property pursuant thereto, as applicable, shall be contingent upon achievement
of one or more objective performance goals.  Performance goals shall
be objective and shall otherwise meet the requirements of Section 162(m) of the
Code and regulations thereunder including the requirement that the level or
levels of performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.”  One or more of the
following business criteria for the Company, on a consolidated basis, and/or for
Related Entities, or for business or geographical units of the Company and/or a
Related Entity (except with respect to the total stockholder return and earnings
per share criteria), shall be used by the Committee in establishing performance
goals for such Awards: (1) earnings per share; (2) revenues or
margins; (3) cash flow; (4) operating margin; (5) return on net
assets, investment, capital, or equity; (6) economic value added;
(7) direct contribution; (8) net income; pretax earnings; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; earnings after interest expense and before extraordinary or
special items; operating income; income before interest income or expense,
unusual items and income taxes, local, state or federal and excluding budgeted
and actual bonuses which might be paid under any ongoing bonus plans of the
Company; (9) working capital; (10) management of fixed costs or
variable costs; (11) identification or consummation of investment
opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestitures;
(12) total stockholder return; (13) debt reduction; (14) market share;
(15) entry into new markets, either geographically or by business unit; (16)
customer retention and satisfaction; (17) strategic plan development and
implementation, including turnaround plans; and/or (18) the Fair Market Value of
a Share.  Any of the above goals may be determined on an absolute or
relative basis or as compared to the performance of a published or special index
deemed applicable by the Committee including, but not limited to, the Standard
& Poor’s 500 Stock Index or a group of companies that are comparable to the
Company.  In determining the achievement of the performance goals, the
Committee shall exclude the impact of any (i) restructurings, discontinued
operations, extraordinary items and other unusual or non-recurring charges, (ii)
event either not directly related to the operations of the Company or not within
the reasonable control of the Company’s management or (iii) change in accounting
standards required by generally accepted accounting principles.

     

    (c) Performance
Period; Timing For Establishing Performance Goals.  Achievement
of performance goals in respect of Performance Awards shall be measured over a

     

     

    
      
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    Performance
Period as specified by the Committee.  Performance goals shall be
established not later than 90 days after the beginning of any Performance Period
applicable to such Performance Awards, or at such other date as may be required
or permitted for “performance-based compensation” under Code Section
162(m).

     

    (d) Adjustments.  The
Committee may, in its discretion, reduce the amount of a settlement otherwise to
be made in connection with Awards subject to this Section 8, but may not
exercise discretion to increase any such amount payable to a Covered Employee in
respect of an Award subject to this Section 8.  The Committee shall
specify the circumstances in which such Awards shall be paid or forfeited in the
event of termination of Continuous Service by the Participant prior to the end
of a Performance Period or settlement of Awards.

     

    (e) Committee
Certification.  No Participant shall receive any payment under
the Plan that is subject to this Section 8 unless the Committee has
certified, by resolution or other appropriate action in writing, that the
performance criteria and any other material terms previously established by the
Committee or set forth in the Plan, have been satisfied to the extent necessary
to qualify as “performance based compensation” under Code Section
162(m).

     

    9. Change
in Control.

     

    (a) Effect of “Change
in Control.” Subject to Section 9(a)(iv), and if and only to the extent
provided in the Award Agreement, or to the extent otherwise determined by the
Committee, upon the occurrence of a “Change in Control,” as defined in Section
9(b):

     

    (i) Any
Option or Stock Appreciation Right that was not previously vested and
exercisable as of the time of the Change in Control, shall become immediately
vested and exercisable, subject to applicable restrictions set forth in Section
10(a) hereof.

     

    (ii) Any
restrictions, deferral of settlement and forfeiture conditions applicable to a
Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award
subject only to future service requirements granted under the Plan shall lapse,
and such Awards shall be deemed fully vested as of the time of the Change in
Control, except to the extent of any waiver by the Participant and subject to
applicable restrictions set forth in Section 10(a) hereof.

     

    (iii) With
respect to any outstanding Award subject to achievement of performance goals and
conditions under the Plan, the Committee may, in its discretion, deem such
performance goals and conditions as having been met as of the date of the Change
in Control.

     

    (iv) Notwithstanding
the foregoing or any provision in any Award Agreement to the contrary, if in the
event of a Change in Control the successor company assumes or substitutes for an
Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award
or Other Stock-Based Award, then each such outstanding Option, Stock
Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other
Stock-Based Award shall not be accelerated as described in Sections 9(a)(i),
(ii) and (iii).  For the purposes of this Section 9(a)(iv), an Option,
Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other
Stock-Based Award shall be considered assumed or substituted for if following
the Change in Control the Award confers the right to purchase or receive, for
each 

     

     

    
      
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    Share
subject to the Option, Stock Appreciation Right, Restricted Stock Award,
Deferred Stock Award or Other Stock-Based Award immediately prior to the Change
in Control, the consideration (whether stock, cash or other securities or
property) received in the transaction constituting a Change in Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such
consideration received in the transaction constituting a Change in Control is
not solely common stock of the successor company or its parent or subsidiary,
the Committee may, with the consent of the successor company or its parent or
subsidiary, provide that the consideration to be received upon the exercise or
vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Deferred
Stock Award or Other Stock-Based Award, for each Share subject thereto, will be
solely common stock of the successor company or its parent or subsidiary
substantially equal in fair market value to the per share consideration received
by holders of Shares in the transaction constituting a Change in
Control.  The determination of such substantial equality of value of
consideration shall be made by the Committee in its sole discretion, and its
determination shall be conclusive and binding.

     

    (b) Definition of
“Change in Control”.  Unless otherwise specified in an Award
Agreement, a “Change in Control” shall mean the occurrence of any of the
following:

     

    (i) The
acquisition by any Person of Beneficial Ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of
either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company
Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”) (the foregoing Beneficial Ownership hereinafter being
referred to as a “Controlling
Interest”); provided, however, that for
purposes of this Section 9(b), the following acquisitions shall not constitute
or result in a Change in Control:  (v) any acquisition directly from
the Company; (w) any acquisition by the Company; (x) any acquisition by any
Person that as of the Effective Date owns Beneficial Ownership of a Controlling
Interest; (y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Related Entity; or (z) any
acquisition by any entity pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii) below; or

     

    (ii) During
any period of two (2) consecutive years (not including any period prior to the
Effective Date) individuals who constitute the Board on the Effective Date (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 Effective Date 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; or

     

     

    
      
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    (iii) Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its Related Entities, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or equity of another entity by the Company or any
of its Related Entities (each a “Business
Combination”), in each case, unless, following such Business Combination,
(A) all or substantially all of the individuals and entities who were the
Beneficial Owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of the value of the then outstanding equity securities and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of members of the board of directors (or comparable
governing body of an entity that does not have such a board), as the case may
be, of the entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such entity resulting from such Business Combination or any Person that as of
the Effective Date owns Beneficial Ownership of a Controlling Interest)
beneficially owns, directly or indirectly, fifty percent (50%) or more of the
value of the then outstanding equity securities of the entity resulting from
such Business Combination or the combined voting power of the then outstanding
voting securities of such entity except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority of
the members of the Board of Directors or other governing body of the entity
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

     

    (iv) Approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

     

    10. General
Provisions.

     

    (a) Compliance With
Legal and Other Requirements.  The Company may, to the extent
deemed necessary or advisable by the Committee, postpone the issuance or
delivery of Shares or payment of other benefits under any Award until completion
of such registration or qualification of such Shares or other required action
under any federal or state law, rule or regulation, listing or other required
action with respect to any stock exchange or automated quotation system upon
which the Shares or other Company securities are listed or quoted, or compliance
with any other obligation of the Company, as the Committee, may consider
appropriate, and may require any Participant to make such representations,
furnish such information and comply with or be subject to such other conditions
as it may consider appropriate in connection with the issuance or delivery of
Shares or payment of other benefits in compliance with applicable laws, rules,
and regulations, listing requirements, or other obligations.

     

     

    
      
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    (b) Limits on
Transferability; Beneficiaries.  No Award or other right or
interest granted under the Plan shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party, or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution or to a Beneficiary upon the death
of a Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant or his
or her guardian or legal representative, except that Awards and other rights
(other than Incentive Stock Options and Stock Appreciation Rights in tandem
therewith) may be transferred to one or more Beneficiaries or other transferees
during the lifetime of the Participant, and may be exercised by such transferees
in accordance with the terms of such Award, but only if and to the extent such
transfers are permitted by the Committee pursuant to the express terms of an
Award Agreement (subject to any terms and conditions which the Committee may
impose thereon).  A Beneficiary, transferee, or other person claiming
any rights under the Plan from or through any Participant shall be subject to
all terms and conditions of the Plan and any Award Agreement applicable to such
Participant, except as otherwise determined by the Committee, and to any
additional terms and conditions deemed necessary or appropriate by the
Committee.

     

    (c) Adjustments.

     

    (i) Adjustments to
Awards.  In the event that any extraordinary dividend or other
distribution (whether in the form of cash, Shares or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Shares
and/or such other securities of the Company or any other issuer such that a
substitution, exchange, or adjustment is determined by the Committee to be
appropriate, then the Committee shall, in such manner as it may deem equitable,
substitute, exchange or adjust any or all of (A) the number and kind of
Shares which may be delivered in connection with Awards granted thereafter,
(B) the number and kind of Shares subject to or deliverable in respect of
outstanding Awards, (C) the exercise price, grant price or purchase price
relating to any Award and/or make provision for payment of cash or other
property in respect of any outstanding Award and (D) any other aspect of any
Award that the Committee determines to be appropriate.

     

    (ii) Adjustments in
Case of Certain Transactions.  In the event of any merger,
consolidation or other reorganization in which the Company does not survive, or
in the event of any Change in Control, any outstanding Awards may be dealt with
in accordance with any of the following approaches, as determined by the
agreement effectuating the transaction or, if and to the extent not so
determined, as determined by the Committee: (a) the continuation of the
outstanding Awards by the Company, if the Company is a surviving entity; (b) the
assumption or substitution for, as those terms are defined in Section 9(a)(iv)
hereof, the outstanding Awards by the surviving entity or its parent or
subsidiary; (c) full exercisability or vesting and accelerated expiration of the
outstanding Awards; or (d) settlement of the value of the outstanding Awards in
cash or cash equivalents or other property followed by cancellation of such
Awards (which value, in the case of Options or Stock Appreciation Rights, shall
be measured by the amount, if any, by which the Fair Market Value of a Share
exceeds the exercise or grant price of the Option or Stock Appreciation Right as
of the effective date of the transaction).  The Committee shall give
written notice to all Participants of any proposed 

     

     

    
      
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    transaction
referred to in this Section 10(c)(ii) a reasonable period of time prior to the
closing date for such transaction (which notice may be given either before or
after the approval of such transaction), in order that Participants may have a
reasonable period of time prior to the closing date of such transaction within
which to exercise any Awards that are then exercisable (including any Awards
that may become exercisable upon the closing date of such
transaction).  A Participant may condition his exercise of any Awards
upon the consummation of the transaction.

     

    (iii) Other
Adjustments.  The Committee (and the Board if and only to the
extent such authority is not required to be exercised by the Committee to comply
with Section 162(m) of the Code) is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards (including Performance
Awards, or performance goals relating thereto) in recognition of unusual or
nonrecurring events (including, without limitation, acquisitions and
dispositions of businesses and assets) affecting the Company, any Related Entity
or any business unit, or the financial statements of the Company or any Related
Entity, or in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of the
Committee’s assessment of the business strategy of the Company, any Related
Entity or business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a Participant, and any
other circumstances deemed relevant; provided that no such adjustment shall be
authorized or made if and to the extent that such authority or the making of
such adjustment would cause Options, Stock Appreciation Rights, Performance
Awards subject to Section 8(b) hereof to Participants designated by the
Committee as Covered Employees and intended to qualify as “performance-based
compensation” under Code Section 162(m) and the regulations thereunder to
otherwise fail to qualify as “performance-based compensation” under Code Section
162(m) and regulations thereunder.

     

    (d) Taxes.  The
Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a Participant,
amounts of withholding and other taxes due or potentially payable in connection
with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Company or any Related Entity and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award.  This authority shall
include authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a Participant’s tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.

     

    (e) Changes to the
Plan and Awards.  The Board may amend, alter, suspend,
discontinue or terminate the Plan, or the Committee’s authority to grant Awards
under the Plan, without the consent of stockholders or Participants, except that
any amendment or alteration to the Plan shall be subject to the approval of the
Company’s stockholders not later than the annual meeting next following such
Board action if such stockholder approval is required by any federal or state
law or regulation (including, without limitation, Code Section 162(m)) or the
rules of any stock exchange or automated quotation system on which the Shares
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to stockholders for approval;
provided that, without the consent of an affected Participant, no such Board
action may materially and adversely affect the rights of such Participant under

     

     

    
      
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    any
previously granted and outstanding Award.  The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted and any Award Agreement relating thereto, except
as otherwise provided in the Plan; provided that, without the consent of an
affected Participant, no such Committee or the Board action may materially and
adversely affect the rights of such Participant under such
Award.  Notwithstanding anything to the contrary, the Committee shall
be authorized to amend any outstanding Option and/or Stock Appreciation Right to
reduce the exercise price or grant price without the prior approval of the
stockholders of the Company.  In addition, the Committee shall be
authorized to cancel outstanding Options and/or Stock Appreciation Rights
replaced with Awards having a lower exercise price without the prior approval of
the stockholders of the Company.

     

    (f) Limitation on
Rights Conferred Under Plan.  Neither the Plan nor any action
taken hereunder or under any Award shall be construed as: (i) giving any
Eligible Person or Participant the right to continue as an Eligible Person or
Participant or in the employ or service of the Company or a Related Entity;
(ii) interfering in any way with the right of the Company or a Related
Entity to terminate any Eligible Person’s or Participant’s Continuous Service at
any time; (iii) giving an Eligible Person or Participant any claim to be
granted any Award under the Plan or to be treated uniformly with other
Participants and Employees; or (iv) conferring on a Participant any of the
rights of a stockholder of the Company including, without limitation, any right
to receive dividends or distributions, any right to vote or act by written
consent, any right to attend meetings of stockholders or any right to receive
any information concerning the Company’s business, financial condition, results
of operation or prospects, unless and until such time as the Participant is duly
issued Shares on the stock books of the Company in accordance with the terms of
an Award.  None of the Company, its officers or its directors shall
have any fiduciary obligation to any Participant with respect to any Awards
unless and until such Participant is duly issued Shares pursuant to the Award on
the stock books of the Company in accordance with the terms of an
Award.  Neither the Company nor any of the Company’s officers,
directors, representatives or agents is granting any rights under the Plan to
any Participant whatsoever, oral or written, express or implied, other than
those rights expressly set forth in this Plan or an Award
Agreement.

     

    (g) Unfunded Status
of Awards; Creation of Trusts.  The Plan is intended to
constitute an “unfunded” plan for incentive and deferred
compensation.  With respect to any payments not yet made to a
Participant or obligation to deliver Shares pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Participant any rights
that are greater than those of a general creditor of the Company; provided that
the Committee may authorize the creation of trusts and deposit therein cash,
Shares, other Awards or other property, or make other arrangements to meet the
Company’s obligations under the Plan.  Such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.  The trustee of such trusts may be authorized to dispose
of trust assets and reinvest the proceeds in alternative investments, subject to
such terms and conditions as the Committee may specify and in accordance with
applicable law.

     

    (h) Nonexclusivity of
the Plan.  Neither the adoption of the Plan by the Board nor
its submission to the stockholders of the Company for approval shall be
construed as creating 

     

     

    
      
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    any
limitations on the power of the Board or a committee thereof to adopt such other
incentive arrangements as it may deem desirable including incentive arrangements
and awards which do not qualify under Section 162(m) of the Code.

     

    (i) Payments in the
Event of Forfeitures; Fractional Shares.  Unless otherwise
determined by the Committee, in the event of a forfeiture of an Award with
respect to which a Participant paid cash or other consideration, the Participant
shall be repaid the amount of such cash or other consideration.  No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award.  The Committee shall determine whether cash, other Awards or
other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

     

    (j) Governing
Law.  The validity, construction and effect of the Plan, any
rules and regulations under the Plan, and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware without giving
effect to principles of conflict of laws, and applicable federal
law.

     

    (k) Non-U.S.
Laws.  The Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Related Entities may operate to assure the viability of the benefits from
Awards granted to Participants performing services in such countries and to meet
the objectives of the Plan.

     

    (l) Plan Effective
Date and Stockholder Approval; Termination of Plan.  The Plan
shall become effective on the Effective Date, subject to subsequent approval,
within 12 months of its adoption by the Board, by stockholders of the Company
eligible to vote in the election of directors, by a vote sufficient to meet the
requirements of Code Sections 162(m) (if applicable) and 422, applicable
requirements under the rules of any stock exchange or automated quotation system
on which the Shares may be listed or quoted and other laws, regulations, and
obligations of the Company applicable to the Plan.  Awards may be
granted subject to stockholder approval, but may not be exercised or otherwise
settled in the event the stockholder approval is not obtained.  The
Plan shall terminate at the earliest of (a) such time as no Shares remain
available for issuance under the Plan, (b) termination of this Plan by the
Board, or (c) the tenth (10th)
anniversary of the Effective Date.  Awards outstanding upon expiration
of the Plan shall remain in effect until they have been exercised or terminated,
or have expired.

     

    (m) Validity of
Awards.  Any Award that satisfies the terms of the Plan shall
not be deemed invalid solely because any one or more members of the Committee is
not (i) a “non-employee director” within the meaning of  Rule 16b-3
(or any successor rule) under the Exchange Act, (ii) an “outside director”
within the meaning of Section 162(m) of the Code and (iii)
“Independent”.

     

    

    22JKHY 1995 NON-QUALIFIED STOCK OPTION PLAN

EXHIBIT 10.36

JACK HENRY & ASSOCIATES, INC.

1995 NON-QUALIFIED STOCK OPTION PLAN

(As Amended Effective May 9, 2008)

     Jack Henry & Associates, Inc. (the "Company"), a Delaware corporation, hereby formulates and adopts the following 1995 Non-Qualified Stock Option Plan (the "Plan") for non-employee directors of the Company.

     1.     Purpose.  The purpose of the Plan is to obtain for the Company the benefits of the additional incentive inherent in the ownership of Common Stock, $.01 par value per share, of the Company ("Common Stock"), by selected non-employee directors of the Company who are important to the success and the growth of the business of the Company, to help the Company retain the services of such persons, and to compensate such persons for their service on the Board of Directors.

     2.     Stock Option Committee.  The Board of Directors of the Company shall appoint from among its members a Non-Qualified Stock Option Committee (the "Committee"), consisting of no fewer than two directors, none of whom shall be eligible to participate under the Plan.  The Committee shall select one of its members as Chairman and shall adopt such rules and regulations as it shall deem appropriate concerning the holding of its meetings and the transaction of its business.  A majority of the whole Committee shall constitute a quorum, and the act of a majority of the members of the Committee shall be the act of the Committee.  Any member of the Committee may be removed at any time either with or without cause by resolution adopted by the Board of Directors of the Company; and any vacancy on the Committee may at any time be filled by resolution adopted by the Board of Directors.

     3.     Stock Subject to Options.  Subject to the provisions of paragraph 13, the number of shares of Common Stock subject at any one time to options granted under the Plan plus the number of such shares then outstanding pursuant to exercises of options granted under the Plan shall not exceed an aggregate of 1,200,000 shares.  If and to the extent that options granted under the Plan terminate or expire in accordance with paragraph 8 without having been exercised, new options may be granted with respect to the shares covered by such terminated or expired options, provided that the granting and terms of such new options shall in all respects comply with the provisions of the Plan.

     There shall be reserved at all times for sale under the Plan a number of shares of Common Stock (either authorized and unissued shares or shares held in the Company's treasury, or both) equal to the maximum number of shares which may be purchased pursuant to options granted or that may be granted under the Plan.

     Shares transferred by the Company upon the exercise of any option granted under the Plan may be shares of authorized and unissued Common Stock, shares of issued Common Stock held in the Company's treasury, or both.

     4.     Administration.  The Committee shall have the authority and responsibility, within the limitations of the Plan, as amended or modified from time to time, to calculate the "fair market value" of shares subject to grant in accordance with paragraph 7, the terms and provisions of the respective Option Agreements (which need not be identical), and to make all other determinations necessary or advisable for administering the Plan.

     Any or all powers and functions of the Committee may at any time and from time to time be exercised by the Board of Directors or the Executive Committee thereof; provided, however, that such powers and functions of the Committee may be exercised by the Board of Directors or the Executive Committee, as the case may be, only if, at the time of such exercise, a majority of the members of the entire Board of Directors or the Executive Committee, as the case may be, and a majority of the directors acting in the particular matter, are not eligible to participate under the Plan.

     5.     Eligible Participants.  Options may be granted under the Plan only to outside directors of the Company.  An "outside director" shall mean a director who is not at the time of the grant of any option under the Plan to him, nor at any time within one year prior thereto, an employee of the Company.  An outside director receiving any option under the Plan is hereinafter referred to as an "Optionee".

     6.     Grant of Options.

     (a)     Annual Grants.  On the third business day following the day of each annual meeting of the stockholders of the Company, each outside director shall automatically and without further action of the Board or the Committee be granted a non-statutory stock option (a stock option which does not qualify under Sections 422 or 423 of the Internal Revenue Code of 1986) to purchase 10,000 shares of Common Stock, subject to adjustment and substitution as set forth below.  If the number of shares then remaining available for the grant of stock options under the Plan is not sufficient for each outside director to be granted an option for 10,000 shares (or the number of adjusted or substituted shares), then each outside director shall be granted an option for a number of whole shares equal to the number of shares then remaining available divided by the number of outside directors, disregarding any fractions of a share.

     (b)     Grant Limitation.  Notwithstanding any other provision of this Plan, no outside director may be granted options to purchase more than 300,000 shares of Common Stock pursuant to the Plan.

     7.     Price.

     (a)     The option price of each share of Common Stock purchasable under any option granted under the Plan shall be 100% of the "fair market value" thereof at the time the option is granted.

     (b)     The option price shall become immediately due upon exercise of the option and shall be payable in one of the alternative forms specified below: (1) full payment by certified check payable to the Company; (2) full payment in shares of Common Stock having a fair market value on the Exercise Date (as such term is defined below) equal to the option price, which shares shall have been held for more than six months by the individual; (3) any combination of certified check payable to the Company and/or shares of Common Stock valued at fair market value on the Exercise Date, equal in the aggregate to the option price; or (4) by a "net exercise" arrangement pursuant to which the Company will not require a payment of the option price but will reduce the number of shares of common stock issued upon the exercise by the largest number of whole shares that has a fair market value on the Exercise Date that does not exceed the aggregate option price.  With respect to any remaining balance of the aggregate option price, the Company will accept a cash payment from the optionee.  For purposes of this subsection (b), the Exercise Date shall be the date on which written notice of the exercise of the option is delivered to the Company, together with payment of the option price for the purchased shares.

     (c)     The "fair market value" of a share on a particular date shall be: (1) if shares of Common Stock are listed on such date on one or more national securities exchanges or the National Market System of the National Association of Securities Dealers, Inc. ("NASD"), the last reported sale price of a share on such date as recorded on the composite tape system or on the National Association of Securities Dealers Automatic Quotation System ("NASDAQ"), or if no sale of Common Stock took place on such date, the last reported sale price of a share on the most recent day on which a sale of a share took place as recorded by such system or on such exchange, as the case may be; or (2) if Common Stock is not listed on such date on any national securities exchange or the National Market System of the NASD, the mean between the last closing bid and asked quotations of a share of Common Stock on such date (or if none, on the most recent date on which there were bid and asked quotations of a share), as reported by NASDAQ, the National Quotation Bureau, Incorporated, or other similar service selected by the Board of Directors or the Committee.

     8.     Exercisability, Vesting and Duration of Options.  No option granted under the Plan shall be exercisable until six months after the date of grant.  Subject to the foregoing, all options granted under the Plan shall be fully vested and exercisable after the fourth anniversary of the date of the director's first election or appointment to the Board of Directors of the Company (the "Initial Service Date").  For directors who have served less than four continuous years, and subject to the first sentence of this paragraph 8, options granted under the Plan shall vest and become exercisable as follows:

     (a)     with respect to 25% of the shares subject to option, after the expiration of one year from the Initial Service Date;

     (b)     with respect to 50% of the shares subject to option, after the expiration of two years from the Initial Service Date;

     (c)     with respect to 75% of the shares subject to option, after the expiration of three years from the Initial Service Date.

     Provided, however, that any option granted under the Plan shall become exercisable in its entirety upon the death, illness, disability or retirement of the Optionee; and provided further that no portion of any option not theretofore exercisable shall become exercisable following the removal or termination of the Optionee as a director of the Company, for any reason other than his or her death, illness, disability or retirement.

     The unexercised portion of any vested option granted under the Plan shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following: (i) the expiration of ten years from the date on which such option was granted; (ii) the expiration of one year following the issuance of letters testamentary or letters of administration to the executor or administrator of a deceased Optionee or Permitted Transferee (as defined in paragraph 10); or (iii) the surrender by the Optionee or Permitted Transferee to the Company of any such option (whether or not in exchange for any other option).

     9.     Exercise of Options.  Options granted under the Plan shall be exercised by the Optionee (or by his executors or administrators, or Permitted Transferee, as provided in paragraph 10) as to all or part of the shares covered thereby, by the giving of written notice of the exercise thereof to the Company at its principal business office, specifying the number of shares to be purchased, specifying a business day, not less than 10 days nor more than 15 days from the date such notice is given, for the payment of the purchase price against delivery of the shares being purchased and specifying the method of payment of such purchase price.  Upon any exercise of an Option, the Optionee shall make appropriate arrangements with the Company to provide for the minimum amount of additional withholding required by applicable federal and state income tax and payroll laws, including payment of such taxes through delivery of Common Stock or by withholding  Common Stock to be issued under the Option, as provided in Section 17 hereof.

     Subject to the provisions of paragraph 18, the Company shall cause certificates for the shares so purchased to be delivered to the Optionee or his executors or administrators or Permitted Transferee at its principal business office, against payment of the full purchase price, on the date specified in the notice of exercise.

     10.     Non-Transferability of Options. For the first six months after the date of grant,  no option granted under the Plan shall be transferable by the Optionee other than by Will, or if the Optionee dies intestate by the laws of descent and distribution.  In the event of the Optionee's death, options held by him at death shall thereafter be exercisable, as provided in subparagraph 8(ii), by such person(s) entitled to do so under the Will of the Optionee or, if the Optionee shall fail to make testamentary disposition of the stock option or shall die intestate, by the legal representative of the Optionee.

     Options may be transferred during the lifetime of an Optionee, to any "Permitted Transferee".  "Permitted Transferee" shall include members of the immediate family of the Optionee, any trust established for the benefit of the Optionee or the Optionee's immediate family members, or any charity qualified
 under §501(c)(3) of the Internal Revenue Code. For this purpose, "immediate family member" shall mean the Optionee's spouse, children, step-children, grandchildren and step-grandchildren, and any partnership, corporation, limited liability company or other entity, all the beneficial interests in which are held by the Optionee or immediate family members. Permitted Transferees may only transfer options to other Permitted Transferees of the Optionee.  The Company may disregard any transfer of an option which has not been properly registered with the Company or its agents. In the event of the death of a Permitted Transferee who held options at death, such options shall thereafter be exercisable, as provided in subparagraph 8(ii), by such person(s) entitled to do so under the will of the Permitted Transferee, or if such holder shall fail to make testamentary disposition of the stock option or shall die intestate, by the legal representative of the Permitted Transferee.

     11.     Rights of Optionee.  Neither the Optionee nor his Permitted Transferees, executors or administrators shall have any of the rights of a stockholder of the Company with respect to the shares subject to an option granted under the Plan until certificates for such shares shall have been issued upon the exercise of such option.

     12.     Right to Terminate.  Nothing in the Plan or in any option granted under the Plan shall confer upon any Optionee the right to continue as a director of the Company or affect the right of the stockholders of the Company to terminate the Optionee as a director at any time, or the right of the Board of Directors to elect or remove directors, subject, however, to the provisions of Delaware law.

     13.     Adjustment of Shares.  If any change is made in the shares subject to the Plan or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination of shares, exchange of shares, issuance of rights to subscribe, or change in capital structure), appropriate adjustments or substitutions shall be made by the Committee in or for such shares (including adjustments in the maximum number of shares subject to the Plan and the number of such shares and price per share subject to the Plan and the number of such shares and price per shares subject to outstanding options) as the Committee in its sole discretion shall deem equitable to prevent dilution or enlargement of option rights; provided, however, that in the case of any transaction (or series of transactions carried out within a period of twelve consecutive months) in which the Company is consolidated or merged with another corporation (other than a subsidiary or other affiliated company of the Company), or in which substantially all of the properties or assets of the Company are acquired by another person, firm or corporation (other than one or more subsidiaries or other affiliated companies of the Company), and in which the stockholders of the Company receive, either directly or indirectly, as consideration, cash and/or non-equity securities or a package which does not include an amount of equity securities (as defined in Section 3(a)(11) of the Exchange Act) equal to more than 20% of the aggregate value of such package as conclusively determined by the Committee, the Committee shall, alternatively, have the right to terminate all then outstanding options (in which event such options  shall not be subject to the above described adjustments) by causing written notice of such termination to be given to each Optionee not less than 30 days prior to the date on which such consolidation, merger or acquisition is expected to become effective and, if applicable, the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such consolidation, merger or acquisition.  In providing such notice, the Board of Directors may, in its discretion, with respect to options, waive the restrictions on exercise pursuant to paragraph 8 and permit such option or options to become immediately exercisable.  Such notice shall be deemed duly given when delivered personally, or mailed first-class postage prepaid, to each Optionee at his address appearing in the records of the Company, and failure to give such notice to any Optionee, or any defect therein, shall not affect the termination of an option held by any other Optionee.

     14.     Amendment of the Plan.  The Board may, from time to time, but not more often than once every six months, amend or modify the Plan in all respects, except that without stockholder approval no such amendment or modification may (a) increase the total number of shares reserved for options thereunder (other than an increase merely reflecting an adjustment as described in paragraph 13), (b) change the option price from 100% of the "fair market value" on the date of grant, (c) change the class of outside directors eligible to receive options, or (d) extend the period of exercise beyond ten years from the date of grant.  Rights and obligations under any option previously granted under the Plan may not be altered or impaired by any such amendment or modification of the Plan except upon consent of the person to whom such option was granted.

     15.     Termination or Suspension of the Plan.  The Board of Directors may at any time suspend or terminate the Plan.  The Plan, unless sooner terminated, shall terminate at the close of business on November 30, 2005.  An option may not be granted while the Plan is suspended  or after it is terminated.  Rights and obligations under any option granted while the Plan is in effect shall not be altered or impaired by suspension or termination of the Plan, except upon the consent of the person to whom such option and right were granted.

     16.     Form of Agreements with Optionees.  Subject to the limitations of the Plan as amended or modified from time to time, every option granted under the Plan shall be in such form and shall contain such terms and conditions (which need not be identical) as the Committee, in its discretion, may determine.  The rights and obligations under any such form of option granted under the Plan shall not be altered or impaired, except upon consent of the person to whom such option and right were granted.

     17.     Withholding. 

     (a)     The Company's obligations to deliver shares of Common Stock upon the exercise of an Option shall be subject to the Optionee's satisfaction of all applicable federal, state and local income and other tax withholding requirements.

     (b)     The Optionee may pay all minimum required amounts of tax withholding, or any part thereof, by electing to transfer to the Company, or to have the Company withhold from the Common Stock otherwise issuable to the Optionee, Common Stock having a value not greater than the minimum amount required to be withheld under federal, state or local law or such lesser amount as may be elected by the Optionee.  The Committee may require that any shares transferred to the Company have been held or owned by the Optionee for a minimum period of time.  The value of Common Stock to be withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld is to be determined (the "Tax Date"), as determined by the Committee.  Any such elections by Optionee to have Shares withheld for this purpose must be made prior to the Tax Date, and shall be irrevocable.

     18.     Purchase for Investment.  If the Committee in its discretion determines that as a matter of law such procedure is or may be desirable, it may require the Optionee, upon any exercise of an option granted hereunder or any portion thereof and as a condition to the Company's obligation to deliver certificates representing the shares subject to exercise, to execute and deliver to the Company a written statement, in form satisfactory to legal counsel for the Company, representing and warranting that his purchase or receipt of shares of Common Stock upon exercise thereof shall be for his own account, for investment and not with a view to the resale or distribution thereof and that any subsequent offer for sale or sale of any such shares shall be made either pursuant to (a) a Registration Statement on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), which Registration Statement has become effective and is current with respect to the shares being offered and sold or (b) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Optionee shall, prior to any offer for sale or sale of such shares, obtain a favorable written option from counsel for or approved by the Company as to the availability of such exemption.

     The Company may endorse an appropriate legend referring to the foregoing restriction upon the certificate or certificates representing any shares issued or transferred to the Optionee upon exercise of any option granted under the Plan and may issue "stop transfer" instructions to its transfer agent in respect of such shares.

     19.     Listing of Shares and Related Matters.  If at any time the Board of Directors shall determine, in its sole discretion, that the listing, registration or qualification of the shares covered by the Plan upon any national securities exchange or market system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares under the plan, no shares will be delivered unless and until such listing, registration, qualification, consent or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Board of Directors.

     20.     Governing Law.  The Plan and all options which may be granted under the Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware from time to time obtaining.

     21.     Gender.  Unless the context of the Plan otherwise requires, the masculine, feminine or neuter gender each shall include the other genders and the singular shall include the plural.

     22.     Effective Date of Plan.  The Plan shall become effective upon approval by the affirmative vote of the holders of a majority of the Common Stock present in person or by proxy and entitled to vote at a duly called and convened meeting of such holders.

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