THE BROADBAND WIRELESS INTERNATIONAL CORPORATION 2004 STOCK COMPENSATION PROGRAM

 

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THE BROADBAND WIRELESS INTERNATIONAL CORPORATION 2004 STOCK COMPENSATION PROGRAM

 

      1. Purpose. This 2004 STOCK COMPENSATION PROGRAM (the "Program") is

intended to secure for The Broadband Wireless International Corporation, a

Nevada corporation (the "Company"), its subsidiaries, and its stockholders the

benefits arising from ownership of the Company's common stock (the "Common

Stock") by those selected individuals of the Company and its subsidiaries,

selected contractors and consultants, who will be, and who have been,

responsible for the future growth of such corporations. The Program is designed

to help attract and retain superior personnel for positions of substantial

responsibility with the Company and its subsidiaries, to provide individuals

with an additional incentive to contribute to the success of the corporations,

and to compensate those individuals who have previously contributed to the

success of the corporations.

 

      2. Elements of the Program. In order to maintain flexibility in the award

of stock benefits the program will consist of a several plans. The Program

Administrators are hereby authorized to periodically add plans to this program

consistent with this objective. The first part is the Stock Bonus Plan (Bonus

Plan) under which (i) common stock shares are granted to key employees and

consultants as a bonus for performing duties essential in the growth of the

company, either prospectively or prior to the date hereof. The second part is

the Stock Deferral Plan (Deferral) in which (i) payments of deferred

compensation in the form of shares of common stock (deferred payments) are

granted; and (ii) rights to receive cash or shares of common stock based on the

amount of income owed deferred (up to 1/3 of gross income). The third part is

the Executive Stock Bonus Option Plan (the "Executive Bonus Plan") under which

(i) units representing the equivalent of shares of Common Stock (the

"Performance Shares") are granted; (ii) payments of compensation in the form of

shares of Common Stock (the "Stock Payments") are granted; and (iii) rights to

receive cash or shares of Common Stock as a bonus, based on the performance of

the executive or Key Independent Contractor (Bonus Shares). The fourth part is

the Compensation Plan (the "Compensation Plan") under which common shares may be

issued, at their election, to employees, executives, and contractors in lieu of

cash payments for services rendered or to be rendered to the Company.

 

      3. Applicability of General Provisions. Unless any Plan specifically

indicates to the contrary, all Plans shall be subject to the General Provisions

of the Program set forth below.

 

      4. Administration of the Plans. The Plans shall be administered,

construed, governed, and amended in accordance with their respective terms.

 

                GENERAL PROVISIONS OF STOCK COMPENSATION PROGRAM

 

      Article 1. Administration. The Program shall be administered by the

Company's Board of Directors (the "Program Administrators"). The Program

Administrators shall hold meetings at such times and places as they may

determine and as necessary to approve all grants and other transactions under

the Program as required under Rule 16b-3(d) under the Exchange Act, shall keep

minutes of their meetings, and shall adopt, amend, and revoke such rules and

procedures as they may deem proper with respect to the Program. Any action of

the Program Administrators shall be taken by majority vote or the unanimous

written consent of the Program Administrators.

 

      Article 2. Authority of Program Administrators. Subject to the other

provisions of this Program, and with a view to effecting its purpose, the

Program Administrators shall have sole authority, in their sole and absolute

discretion, (a) to construe and interpret the Program; (b) to define the terms

used herein; (c) to determine the individuals to whom options and restricted

shares and rights to purchase shares shall be granted under the Program; (d) to

determine the time or times at which options and restricted shares, rights to

purchase shares or other awards shall be granted under the Program; (e) to

determine the number and type of shares or securities subject to each option,

restricted share, purchase right or other award, the duration of each award

 

 

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granted under the Program, and the price of any share purchase; (f) to determine

all of the other terms and conditions of options, restricted shares, purchase

rights and other awards granted under the Program; and (g) to make all other

determinations necessary or advisable for the administration of the Program and

to do everything necessary or appropriate to administer the Program; provided,

however, that the Board shall establish the price for all shares issued

hereunder. All decisions, determinations, and interpretations made by the

Program Administrators shall be binding and conclusive on all participants in

the Program (the "Plan Participants") and on their legal representatives, heirs

and beneficiaries.

 

      Article 3. Maximum Number of Shares Subject to the Program. Subject to the

provisions of Article 7, the maximum aggregate number of shares of Common Stock

subject to the Program shall be fifty million (50,000,000) shares. Subject to

the limitation contained in Section 2 of Part 1, the maximum number of shares of

common stock issueable pursuant to the Program to any single Program Participant

in any given fiscal year shall be 10,000,000 shares. The Board of Directors of

the Company shall make recommendations to the Program Administrators from time

to time with respect to the allocation of the shares reserved under the Program

for the directors, officers, employees and agents of the Company and its

subsidiaries. The shares of Common Stock issued under the Program may be

authorized but unissued shares, shares issued and reacquired by the Company or

shares purchased by the Company on the open market. If any of the options

granted under the Program expire or terminate for any reason before they have

been exercised in full, the un-purchased shares subject to those expired or

terminated options shall cease to reduce the number of shares available for

purposes of the Program. If the conditions associated with the grant of

restricted shares are not achieved within the period specified for satisfaction

of the applicable conditions, or if the restricted share grant terminates for

any reason before the date on which the conditions must be satisfied, the shares

of Common Stock associated with such restricted shares shall cease to reduce the

number of shares available for purposes of the Program.

 

      The proceeds received by the Company from the sale of its Common Stock

pursuant to the exercise of options, warrants or transfer of restricted shares,

shall be added to the Company's general funds and used for general corporate

purposes.

 

      Article 4. Eligibility and Participation. Officers, employees, directors

(whether employee directors or non-employee directors), and independent

contractors or agents of the Company or its subsidiaries who are responsible for

or contribute to the management, growth or profitability of the business of the

Company or its subsidiaries shall be eligible for selection by the Program

Administrators to participate in the Program and consultants or advisors of the

Company or its subsidiaries shall be eligible to receive awards under the

Program.

 

      The term "subsidiary" as used herein means any company, other than the

Company, in an unbroken chain of companies, beginning with the Company if, at

the time of any grant hereunder, each of the companies, other than the last

company in the unbroken chain, owns stock possessing more than 50% of the total

combined voting power of all classes of stock in one of the other companies in

such chain.

 

      Article 5. Effective Date and Term of Program. The Program became

effective February 17, 2004 upon its adoption by the Board of Directors of the

Company. The Program shall continue in effect for a term of 5 years unless

sooner terminated under Article 8 of these General Provisions.

 

      Article 6. Adjustments. If the outstanding shares of Common Stock are

increased, decreased, changed into, or exchanged for a different number or kind

of shares or securities through merger, consolidation, combination, exchange of

shares, other reorganization, recapitalization, reclassification, stock

dividend, stock split or reverse stock split, an appropriate and proportionate

adjustment shall be made in the maximum number and kind of shares as to which

options and restricted shares may be granted under this Program. A corresponding

 

 

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adjustment changing the number and kind of shares allocated to unexercised

options, restricted shares, or portions thereof, which shall have been granted

prior to any such change, shall likewise be made. Any such adjustment in

outstanding options shall be made without change in the aggregate purchase price

applicable to the unexercised portion of the option, but with a corresponding

adjustment in the price for each share or other unit of any security covered by

the option.

 

      Article 7. Termination and Amendment of Program. The Program shall

terminate five (5) years from the date the Program is adopted by the Board of

Directors, or, if applicable, the date a particular Plan is approved by the

stockholders, or shall terminate at such earlier time as the Board of Directors

may so determine. No options shall be granted and no stock shall be sold and

purchased under the Program after that date.

 

      Article 8. Prior Rights and Obligations. No amendment, suspension, or

termination of the Program shall, without the consent of the individual who has

received a bonus or Deferral option, alter or impair any of that individual's

rights or obligations under any option or restricted share granted or shares

sold and purchased under the Program prior to that amendment, suspension, or

termination.

 

      Article 9. Privileges of Stock Ownership. Notwithstanding the exercise of

any option granted pursuant to the terms of this Program, the achievement of any

conditions specified in any restricted share granted pursuant to the terms of

this Program or the election to purchase any shares pursuant to the terms of

this Program, no individual shall have any of the rights or privileges of a

stockholder of the Company in respect of any shares of stock issuable upon the

exercise of his or her option, the satisfaction of his or her restricted share

conditions or the sale, purchase and issuance of such purchased shares until

certificates representing the shares have been issued and delivered.

 

      Article 10. Reservation of Shares of Common Stock. The Company, during the

term of this Program, will at all times reserve and keep available such number

of shares of its Common Stock as shall be sufficient to satisfy the requirements

of the Program. In addition, the Company will from time to time, as is necessary

to accomplish the purposes of this Program, seek or obtain from any regulatory

agency having jurisdiction any requisite authority in order to issue and sell

shares of Common Stock hereunder. The inability of the Company to obtain from

any regulatory agency having jurisdiction the authority deemed by the Company's

counsel to be necessary to the lawful issuance and sale of any shares of its

stock hereunder shall relieve the Company of any liability in respect of the

non-issuance or sale of the stock as to which the requisite authority shall not

have been obtained.

 

       Article 11. Tax Withholding. The exercise of any option or restricted

share granted or the sale and issuance of any shares to be purchased under this

Program are subject to the condition that if at any time the Company shall

determine, in its discretion, that the satisfaction of withholding tax or other

withholding liabilities under any state or federal law is necessary or desirable

as a condition of, or in connection with, such exercise or the delivery or

purchase of shares pursuant thereto, then in such event, the exercise of the

option or restricted share or the sale and issuance of any shares to be

purchased shall not be effective unless such withholding shall have been

effected or obtained in a manner acceptable to the Company. At the Company's

sole and absolute discretion, the Company may, from time to time, accept shares

of the Company's Common Stock subject to one of the Plans as the source of

payment for such liabilities.

 

      Article 12. Compliance with Law. It is the express intent of the Company

that this Program complies in all respect with all applicable provisions of

state and federal law, including without limitation, the State of Nevada

Corporations Code. It is the express intent of the Company that when any equity

security of the Company is registered pursuant to Section 12 of the Exchange

Act, this Program shall comply in all respects with applicable provisions of the

Rule

 

 

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16b-3 or Rule 16a-1(c)(3) under the Exchange Act in connection with any grant of

awards to, or other transaction by, a Plan Participant who is subject to Section

16 of the Exchange Act (except for transactions exempted under alternative

Exchange Act rules). Accordingly, if any provision of the Program or any

agreement relating to any award thereunder does not comply with Rule 16b-3 or

Rule 16a-1(c)(3) or any applicable section of the Nevada Corporations Code as

then applicable to any such transaction, such provision will be construed or

deemed amended to the extent necessarily to conform to the applicable

requirements of Rule 16b-3 or Rule 16a-1(c)(3) or such section of the Nevada

Corporations Code so that such Plan Participant shall avoid liability under

Section 16(b) and the Program shall comply with Section 25102(o) as then

applicable to any such transaction. Unless otherwise provided in any grant or

award to any person who is or may thereafter be subject to Section 16 of the

Exchange Act, the approval of such grant or award shall include the approval of

the disposition of the Company of Company equity securities for the purposes of

satisfying the payment of the exercise or purchase price or tax withholding

obligations related to such grant or award within the meaning of Rules

16a-1(c)(3) and 16b-3(e).

 

      Article 13. Indemnification. No Program Administrator, as that term is

defined in the Program, or any officer or employee of the Company or an

affiliate acting at the direction or on behalf of the Program Administrator

shall be personally liable for any action or determination taken or made in good

faith with respect to the Program, and shall, to the extent permitted by law, be

fully indemnified and protected by the Company with respect to any such action

or determination.

 

      Article 14. Death Beneficiaries. In the event of a Plan Participant's

death, all of such person's outstanding awards, including his or her rights to

receive any accrued but unpaid Stock Payments, will transfer to the maximum

extent permitted by law to such person's beneficiary. Each Plan Participant may

name, from time to time, any beneficiary or beneficiaries (which may be named

contingently or successively) as his or her beneficiary for purposes of this

Program. Each designation shall be on a form prescribed by the Program

Administrators, will be effective only when delivered to the Company, and when

effective will revoke all prior designations by the Plan Participant. If a Plan

Participant dies with no such beneficiary designation in effect, such person's

beneficiary shall be his or her estate and such person's awards will be

transferable by will or pursuant to laws of de scent and distribution applicable

to such person.

 

      Article 15. Unfunded Program. The Program shall be unfunded and the

Company shall not be required to segregate any assets that may at any time be

represented by awards under the Program. Neither the Company, its affiliates,

the Program Administrators, nor the Board shall be deemed to be a trustee of any

amounts to be paid under the Program nor shall anything contained in the Program

or any action taken pursuant to its provisions create or be construed to create

a fiduciary relationship between any such party and a Plan Participant or anyone

claiming on his or her behalf. To the extent a Plan Participant or any other

person acquires a right to receive payment pursuant to an award under the

Program, such right shall be no greater than the right of an unsecured general

creditor of the Company.

 

      Article 16. Choice of Law and Venue. The Program and all related documents

shall be governed by, and construed in accordance with, the laws of the State of

Nevada. Acceptance of an award shall be deemed to constitute consent to the

jurisdiction and venue of the state and federal courts located in Clark County,

State of Nevada for all purposes in connection with any suit, action or other

proceeding relating to such award, including the enforcement of any rights under

the Program or any agreement or other document, and shall be deemed to

constitute consent to any process or notice of motion in connection with such

proceeding being served by certified or registered mail or personal service

within or without the State of Nevada, provided a reasonable time for appearance

is allowed.

 

      Article 17. Arbitration. Any disputes involving the Program will be

resolved by arbitration in Clark County, Nevada before one (1) arbitrator in

accordance with the Commercial Arbitration Rules of the American Arbitration

Association.

 

 

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      Article 18. Program Administrators' Right. Except as may be provided in an

award agreement, the Program Administrators may, in their discretion, waive any

restrictions or conditions applicable to, extend or modify any period (including

any period in which an option or other exercisable award may be exercised,

subject to the requirements of the Code) applicable to, or accelerate the

vesting of, any award (other than the right to purchase shares pursuant to the

Stock Purchase Plan).

 

      Article 19. Termination of Benefits Under Certain Conditions. The Program

Administrators, in their sole and absolute discretion, may cancel any unexpired,

unpaid or deferred award (other than a right to purchase shares pursuant to the

Stock Purchase Plan) at any time if the Plan Participant is not in compliance

with all applicable provisions of the Program or any award agreement or if the

Plan Participant, whether or not he or she is currently employed by the Company

or one of its subsidiaries, acts in a manner contrary to the best interests of

the Company and its subsidiaries.

 

      Article 20. Conflicts in Program. In case of any conflict in the terms of

the Program, or between the Program and an award agreement, the provisions in

the Program which specifically grant such award shall control, and the

provisions in the Program shall control over the provisions in any award

agreement.

 

      Article 21. Information to Plan Participants. To the extent required by

applicable law, the Company shall provide Plan Participants with the Company's

financial statements at least annually.

 

      Article 22. Company's Right of Repurchase. In the event that a Plan

Participant's employment with or service to the Company is terminated for any

reason or any of its subsidiaries, the Company shall have the right, unless

waived by the Program Administrators at the time of any award or thereafter, to

repurchase all, of the securities that such Plan Participant has purchased or

has been awarded under the Program on the following terms:

 

            (a) Upon a Plan Participant's termination of employment with or

service to the Company or any of its subsidiaries, the Company shall have the

right for a period of ninety (90) days from the last day of employment or

service to repurchase all, of the securities awarded to or purchased by the Plan

Participant under the Program.

 

            (b) The Company shall notify the Plan Participant within ninety (90)

days of the last day of employment or service regarding the exercise of its

right of repurchase.

 

            (c) If the Company exercises its right of repurchase, the Company

will purchase the securities within thirty (30) days of delivery of the notice

of its election to purchase at the higher of (i) the Fair Market Value on the

Plan Participant's date of termination, or (ii) the Fair Market Value of such

securities on the date of the Company's notification of election to repurchase.

 

      Article 23. Lock-Up. To the extent requested by any managing underwriter

to the Company, the Plan Participants shall enter into such market lock-up,

escrow or other agreements as may be requested by such underwriter in connection

with any public offering of the Company's securities.

 

 

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                                     PART I

 

                BROADBAND WIRELESS CORPORATION STOCK BONUS PLAN

 

      Section 1. Purpose. The purpose of this Broadband Wireless International

Corporation Stock Bonus Plan (the "Bonus) is to promote the growth and general

prosperity of the Company by permitting the Company to grant registered shares

to help attract and retain superior personnel for positions of substantial

responsibility with the Company and its subsidiaries and to provide individuals

with an additional incentive to contribute to the success of the Company. The

Stock Bonus Plan is Part I of the Program. Unless any provision herein indicates

to the contrary, the Stock Bonus Plan shall be subject to the General Provisions

of the Program and terms used but not defined in this Stock Bonus Plan shall

have the meanings, if any, ascribed thereto in the General Provisions of the

Program.

 

      Section 2. Terms and Conditions. The terms and conditions of shares

granted under the Bonus Plan may differ from one another as the Program

Administrators shall, in their discretion, determine as long as all shares

granted under the Bonus Plan satisfy the requirements of the Stock Bonus Plan.

 

      Each Bonus agreement shall provide to the recipient (the "Holder") the

transfer of a specified number of shares of Common Stock of the Company that

shall become non-forfeitable upon the execution of the Stock Bonus Plan

Agreement (Bonus Agreement). At the time that the bonus is granted, the Program

Administrators shall specify the service or performance conditions and the

period of duration over which the conditions apply.

 

      The Holder shall not have any rights with respect to such award, unless

and until such Holder has executed an agreement evidencing the terms and

conditions of the award (the " Stock Bonus Agreement"). Each individual who is

awarded shares shall be issued a stock certificate in respect of such shares.

Such certificate shall be registered in the name of the Holder.

 

      The transferability of this certificate and the shares of stock

represented hereby are subject to the terms and conditions (including

forfeiture) of the Broadband Wireless International Corporation Stock Bonus Plan

entered into between the registered owner and Broadband Wireless International

Corporation. Copies of such Plan and Agreement are on file in the offices of

Broadband Wireless International Corporation.

 

      The Program Administrators shall require that the stock certificates

evidencing such shares be held in the custody of the company until the

applicable conditions have been satisfied .

 

      Section 3. Transferability. Subject to the provisions of the Bonus Plan

Agreements, as may be set by the Program Administrators commencing on the grant

date, the Holder shall be permitted to sell, transfer, pledge, or assign shares

awarded under the Stock Bonus Plan.

 

      Section 4. Share Rights Upon Employment or Service. If a Holder terminates

employment or service with the company, any shares granted to him shall not be

forfeited by the Holder.

 

      Section 5. Stockholder Rights. The Holder shall have, with respect to the

shares granted, all of the rights of a stockholder of the Company, including the

right to vote the shares, and the right to receive any dividends thereon.

Certificates for shares of stock shall be delivered to the Holder promptly

after, and only after, the Bonus Plan Agreement shall be executed.

 

      Section 6. Compliance with Securities Laws. Shares shall not be issued

under the Stock Bonus Plan unless the issuance and delivery of the shares

pursuant thereto shall comply with all relevant provisions of foreign, state and

federal law, including, without limitation, the Securities Act of 1933, as

amended, and the Exchange Act, and the rules and regulations promulgated

 

 

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thereunder, and the requirements of any stock exchange upon which the shares may

then be listed, and shall be further subject to the approval of counsel for the

Company with respect to such compliance. The Program Administrators may also

require a Holder to furnish evidence satisfactory to the Company, including a

written and signed representation letter and consent to be bound by any transfer

restrictions imposed by law.

 

      Section 7. Continued Employment or Service. This agreement is not

contingent upon continued employment or service.

 

 

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    BROADBAND WIRELESS INTERNATIONAL CORPORATION STOCK BONUS PLAN AGREEMENT

 

      THIS AGREEMENT is made as of __________, _____, by and between Broadband

International Wireless Corporation a Nevada corporation (the "Company"), and

_______________________ (" Holder"):

 

      WHEREAS, the Company maintains the Broadband International Wireless

Corporation Stock Bonus Plan ("Stock Bonus Plan") under which the Program

Administrators grant shares of the Company's common stock, $0.0125 par value

("Common Stock") to employees and non-employees as the Program Administrators

may determine, subject to terms, conditions, or restrictions as they may deem

appropriate; and

 

      WHEREAS, pursuant to the Stock Bonus Plan, the Program Administrators have

awarded to Holder a stock bonus award conditioned upon the execution by the

Company and Holder of a Stock Bonus Plan Agreement setting forth all the terms

and conditions applicable to such award.

 

      NOW, THEREFORE, in consideration of termination of the Stock Option plan

entered into between Company and Holder and of the mutual promises and covenants

contained herein, it is hereby agreed as follows:

 

1. Award of Shares.

 

      Under the terms of the Stock Bonus Plan, the Program Administrators hereby

award and transfer to Holder a stock award on __________ ("Grant Date"),

covering shares of Common Stock ("Shares") subject to the terms, conditions, and

restrictions set forth in this Agreement. This transfer of Shares shall

constitute a transfer of such property in connection with Holder's performance

of service to the Company (which transfer is intended to constitute a "transfer"

for purposes of Section 83 of the Internal Revenue Code).

 

2. Stock Certificates.

 

      A stock certificate evidencing the Shares shall be issued in the name of

Holder as of the Grant Date. Holder shall thereupon be the shareholder of all

the Shares represented by the stock certificate. As such, Holder shall be

entitled to all rights of a stockholder of the Company, including the right to

vote the Shares and receive dividends and/or other distributions declared on

such Shares.

 

3. Administration.

 

      The Program Administrators shall have full authority and discretion

(subject only to the express provisions of the Stock Bonus Plan) to decide all

matters relating to the administration and interpretation of the Stock Bonus

Plan and this Agreement. All such Program Administrators determinations shall be

final, conclusive, and binding upon the Company, Holder, and any and all

interested parties.

 

4. Right to Continued Employment or Service.

 

      Nothing in the Stock Bonus Plan or this Agreement shall confer on Holder

any right to continue in the employ of or service to the Company or, except as

may otherwise be limited by a written agreement between the Company and Holder,

in any way affect the Company's right to terminate Holder's employment or

service, at will, at any time without prior notice at any time for any or no

reason (whether by dismissal, discharge, retirement or otherwise).

 

 

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5. Amendment.

 

      This Agreement shall be subject to the terms of the Stock Bonus Plan as

amended, the terms of which are incorporated herein by reference. However, the

stock bonus award that is the subject of this Agreement may not in any way be

restricted or limited by any Stock Bonus Plan amendment or termination approved

after the date of the award without Holder's written consent.

 

6. Force and Effect.

 

      The various provisions of this Agreement are severable in their entirety.

Any determination of invalidity or unenforceability of any one provision shall

have no effect on the continuing force and effect of the remaining provisions.

 

7. Governing Law.

 

      This Agreement shall be construed and enforced in accordance with and

governed by the laws of the State of Nevada.

 

8. Successors.

 

      This Agreement shall be binding upon and inure to the benefit of the

successors, assigns, and heirs of the respective parties.

 

9. Notice.

 

      All notices, requests, demands, and other communications hereunder shall

be in writing and shall be deemed to have been duly given if delivered

personally or by certified mail, return receipt requested, as follows:

 

To Company:        Broadband Wireless International Corporation

                  8290 West Sahara, Suite 280

                  Las Vegas, NV 89117

                  Attn: Secretary

 

To Holder: _________________________

      ______________________________

      ______________________________

      ______________________________

 

 

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10. Incorporation of Plan by Reference.

 

      The Shares are awarded pursuant to the terms of the Plan, the terms of

which are incorporated herein by reference, and the Share award shall in all

respects be interpreted in accordance with the Plan. The Program Administrators

shall interpret and construe the Plan and this instrument, and its

interpretations and determinations shall be conclusive and binding on the

parties hereto and any other person claiming an interest hereunder, with respect

to any issue arising hereunder or thereunder.

 

      IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of

the date hereof.

 

BROADBAND WIRELESS INTERNATIONAL CORPORATION

a Nevada corporation

 

By: Dr. Ron Tripp

President

 

ACCEPTED AND AGREED TO

(Optionee)

By:

Name

 

 

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                                    PART II

 

                  BROADBAND WIRELESS INTERNATIONAL CORPORATION

                           STOCK DEFERRAL OPTION PLAN

 

      Section 1. Deferral Option Terms and Conditions. The purpose of this

Broadband Wireless International Corporation Stock Deferral Option Plan (the

"Deferral Option Plan") is to promote the growth and general prosperity of the

Company by permitting the Company to grant stock deferral rights ("Deferral

Option") to help attract and retain superior personnel for positions of

substantial responsibility with the Company and its subsidiaries and to provide

individuals with an additional incentive to contribute to the success of the

Company. The terms and conditions of Deferral Options granted under the Deferral

Option Plan may differ from one another as the Program Administrators shall, in

their discretion, determine in each agreement (the "Deferral Option Agreement").

Unless any provision herein indicates to the contrary, this Deferral Option Plan

shall be subject to the General Provisions of the Program, and terms used but

not defined in this Deferral Option Plan shall have the meanings, if any,

ascribed thereto in the General Provisions of the Program.

 

      Section 2. Duration of Deferral Options. Each Deferral Option and all

rights thereunder granted pursuant to the terms of the Deferral Option Plan

shall expire on the date determined by the Program Administrators as evidenced

by the Deferral Option Agreement, but in no event shall any Deferral Option

expire later than five (5) years from the date on which the Deferral Option is

granted. In addition, each Deferral Option shall be subject to early termination

as provided in the Deferral Option Plan.

 

      Section 3. Grant. Subject to the terms and conditions of the Deferral

Option Agreement, the Program Administrators may gran