BIOSANTE PHARMACEUTICALS, INC.
2008 STOCK INCENTIVE PLAN

1. Purpose of Plan.
 
The purpose of the BioSante Pharmaceuticals, Inc. 2008 Stock Incentive Plan (the
“Plan”) is to advance the interests of BioSante Pharmaceuticals, Inc.
(the “Company”) and its stockholders by enabling the Company and its
Subsidiaries to attract and retain qualified persons to perform services for the
Company and its Subsidiaries by providing an incentive to such individuals
through opportunities for equity participation in the Company, and by rewarding
such individuals who contribute to the achievement of the Company’s economic
objectives.

2. Definitions.
 
The following terms will have the meanings set forth below, unless the context
clearly otherwise requires:

2.1 “Board” means the Board of Directors of the Company.
 
2.2 “Broker Exercise Notice” means a written notice pursuant to which a
Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer or their nominee.
 
2.3 “Cause” means “cause” as defined in any employment or other agreement or
policy applicable to the Participant, or if no such agreement or policy exists,
will mean (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate
injury or attempted injury, in each case related to the Company or any
Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii)
any intentional and deliberate breach of a duty or duties that, individually or
in the aggregate, are material in relation to the Participant’s overall duties,
or (iv) any material breach of any employment, service, confidentiality,
non-compete or non-solicitation agreement entered into with the Company or any
Subsidiary.
 
2.4 “Change in Control” means an event described in Section 14.1 of the Plan;
provided, however, if under an Incentive Award that is subject to Section 409A
of the Code is triggered by a Change in Control, the term Change in Control will
mean a change in the ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company, as such term is
defined in Section 409A of the Code.
 
2.5 “Code” means the Internal Revenue Code of 1986, as amended (including, when
the context requires, all regulations, interpretations and rulings issued
thereunder).
 
2.6 “Committee” means the group of individuals administering the Plan, as
provided in Section 3 of the Plan.
 
2.7 “Common Stock” means the common stock of the Company, par value $0.0001 per
share, or the number and kind of shares of stock or other securities into which
such Common Stock may be changed in accordance with Section 4.3 of the Plan.
 
2.8 “Disability” means the disability of the Participant such as would entitle
the Participant to receive disability income benefits pursuant to the long-term
disability plan of the Company or Subsidiary then covering the Participant or,
if no such plan exists or is applicable to the Participant, the permanent and
total disability of the Participant within the meaning of Section 22(e)(3) of
the Code; provided, however, if distribution of an Incentive Award subject to
Section 409A of the Code is triggered by an Eligible Recipient’s Disability,
such term will mean that the Eligible Recipient is disabled as defined by
Section 409A of the Code and the regulations and rulings issued thereunder.
 
2.9 “Eligible Recipients” means (a) for the purposes of granting Incentive Stock
Options, all employees (including, without limitation, officers and directors
who are also employees) of the Company or any Subsidiary and (b) for the
purposes of granting Non-Statutory Stock Options and other Incentive Awards, all
employees (including, without limitation, officers and directors who are also
employees) of the Company or any Subsidiary and any non-employee directors,
consultants, advisors and independent contractors of the Company or any
Subsidiary
 
2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
2.11 “Fair Market Value” means, with respect to the Common Stock, as of any
date: (i) the closing sale price of the Common Stock at the end of the regular
trading session, as reported by The NASDAQ Stock Market, The New York Stock
Exchange, The American Stock Exchange or any national exchange on which the
Common Stock is then listed or quoted (or, if no shares were traded on such
date, as of the next preceding date on which there was such a trade); or (ii) if
the Common Stock is not so listed, admitted to unlisted trading privileges, or
reported on any national exchange or, the closing sale price as of such date at
the end of the regular trading session, as reported by OTC Bulletin Board or the
Pink Sheets LLC, or other comparable service (or, if no shares were traded or
quoted on such date, as of the next preceding date on which there was such a
trade or quote); or (iii) if the Common Stock is not so listed or reported, such
price as the Committee determines in good faith, and consistent with the
definition of “fair market value” under Section 409A of the Code.
 
2.12 “Incentive Award” means an Option, Stock Appreciation Right, Restricted
Stock Award, Stock Unit Award, Performance Award or Stock Bonus granted to an
Eligible Recipient pursuant to the Plan.
 
2.13 “Incentive Stock Option” means a right to purchase shares of Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an “incentive stock option” within the meaning of Section 422 of
the Code.
 
2.14 “Non-Statutory Stock Option” means a right to purchase shares of Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.
 
2.15 “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.
 
2.16 “Participant” means an Eligible Recipient who receives one or more
Incentive Awards under the Plan.
 
2.17 “Performance Award” means a right granted to an Eligible Recipient pursuant
to Section 10 of the Plan to receive an amount of cash, a number of shares of
Common Stock, or a combination of both, contingent upon achievement of specified
performance objectives during a specified period.  A Performance Award is also
commonly referred to as a “performance unit.”
 
2.18 “Previously Acquired Shares” means shares of Common Stock that are already
owned by the Participant or, with respect to any Incentive Award, that are to be
issued to the Participant upon the grant, exercise or vesting of such Incentive
Award.
 
2.19 “Restricted Stock Award” means an award of shares of Common Stock granted
to an Eligible Recipient pursuant to Section 8 of the Plan that are subject to
restrictions on transferability and/or a risk of forfeiture.
 
2.20 “Retirement” means termination of employment or service at age 55 or older
and completion of at least ten years of continuous service.
 
2.21 “Securities Act” means the Securities Act of 1933, as amended.
 
2.22 “Stock Appreciation Right” means a right granted to an Eligible Recipient
pursuant to Section 7 of the Plan to receive a payment from the Company, in the
form of shares of Common Stock, cash or a combination of both, equal to the
difference between the Fair Market Value of one or more shares of Common Stock
and a specified exercise price of such shares.
 
2.23 “Stock Bonus” means an award of shares of Common Stock granted to an
Eligible Recipient pursuant to Section 11 of the Plan.
 
2.24  “Stock Unit Award” means a right granted to an Eligible Recipient pursuant
to Section 9 of the Plan to receive the Fair Market Value of one or more shares
of Common Stock, payable in cash, shares of Common Stock, or a combination of
both, the payment, issuance, retention and/or vesting of which is subject to the
satisfaction of specified conditions, which may include achievement of specified
performance objectives.  A Stock Unit Award when payable in shares of Common
Stock is also commonly referred to as a “restricted stock unit.”
 
2.25 “Subsidiary” means any entity that is directly or indirectly controlled by
the Company or any entity in which the Company has a significant equity
interest, as determined by the Committee, provided the Company has a
“controlling interest” in the Subsidiary as defined in Treas. Reg. Sec.
1.409A-1(b)(5)(iii)(E)(1).
 
2.26 “Tax Date” means the date any withholding tax obligation arises under the
Code for a Participant with respect to an Incentive Award.
 
3. Plan Administration.
 
3.1 The Committee.  The Plan will be administered by the Board or by a committee
of the Board.  So long as the Company has a class of its equity securities
registered under Section 12 of the Exchange Act, any committee administering the
Plan will consist solely of two or more members of the Board who are
“non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act
and who are “independent” as required by the listing standards of The NASDAQ
Stock Market (or other applicable exchange or market on which the Company’s
Common Stock may be traded or quoted).  Such a committee, if established, will
act by majority approval of the members (but may also take action by the written
consent of all of the members of such committee), and a majority of the members
of such a committee will constitute a quorum.   As used in the Plan, “Committee”
will refer to the Board or to such a committee, if established.  To the extent
consistent with applicable corporate law of the Company’s jurisdiction of
incorporation, the Committee may delegate to any officers of the Company the
duties, power and authority of the Committee under the Plan pursuant to such
conditions or limitations as the Committee may establish; provided, however,
that only the Committee may exercise such duties, power and authority with
respect to Eligible Recipients who are subject to Section 16 of the Exchange
Act.  The Committee may exercise its duties, power and authority under the Plan
in its sole and absolute discretion without the consent of any Participant or
other party, unless the Plan specifically provides otherwise.  Each
determination, interpretation or other action made or taken by the Committee
pursuant to the provisions of the Plan will be final, conclusive and binding for
all purposes and on all persons, and no member of the Committee will be liable
for any action or determination made in good faith with respect to the Plan or
any Incentive Award granted under the Plan.
 
3.2 Authority of the Committee.
 
(a) In accordance with and subject to the provisions of the Plan, the Committee
will have the authority to determine all provisions of Incentive Awards as the
Committee may deem necessary or desirable and as consistent with the terms of
the Plan, including, without limitation, the following:  (i) the Eligible
Recipients to be selected as Participants; (ii) the nature and extent of the
Incentive Awards to be made to each Participant (including the number of shares
of Common Stock to be subject to each Incentive Award, any exercise price, the
manner in which Incentive Awards will vest or become exercisable and whether
Incentive Awards will be granted in tandem with other Incentive Awards) and the
form of written agreement, if any, evidencing such Incentive Award; (iii) the
time or times when Incentive Awards will be granted; (iv) the duration of each
Incentive Award; and (v) the restrictions and other conditions to which the
payment or vesting of Incentive Awards may be subject.  In addition, the
Committee will have the authority under the Plan in its sole discretion to pay
the economic value of any Incentive Award in the form of cash, Common Stock or
any combination of both.
 
(b) Subject to Section 3.2(d) of the Plan, the Committee will have the authority
under the Plan to amend or modify the terms of any outstanding Incentive Award
in any manner, including, without limitation, the authority to modify the number
of shares or other terms and conditions of an Incentive Award, extend the term
of an Incentive Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award, accept the surrender
of any outstanding Incentive Award or, to the extent not previously exercised or
vested, authorize the grant of new Incentive Awards in substitution for
surrendered Incentive Awards; provided, however that the amended or modified
terms are permitted by the Plan as then in effect and that any Participant
adversely affected by such amended or modified terms has consented to such
amendment or modification.
 
(c) In the event of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, extraordinary dividend or divestiture
(including a spin-off) or any other similar change in corporate structure or
shares; (ii) any purchase, acquisition, sale, disposition or write-down of a
significant amount of assets or a significant business; (iii) any change in
accounting principles or practices, tax laws or other such laws or provisions
affecting reported results; (iv) any uninsured catastrophic losses or
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 or in management’s discussion and analysis of financial
performance appearing in the Company’s annual report to stockholders for the
applicable year; or (v) any other similar change, in each case with respect to
the Company or any other entity whose performance is relevant to the grant or
vesting of an Incentive Award, the Committee (or, if the Company is not the
surviving corporation in any such transaction, the board of directors of the
surviving corporation) may, without the consent of any affected Participant,
amend or modify the vesting criteria (including any performance objectives) of
any outstanding Incentive Award that is based in whole or in part on the
financial performance of the Company (or any Subsidiary or division or other
subunit thereof) or such other entity so as equitably to reflect such event,
with the desired result that the criteria for evaluating such financial
performance of the Company or such other entity will be substantially the same
(in the sole discretion of the Committee or the board of directors of the
surviving corporation) following such event as prior to such event; provided,
however, that the amended or modified terms are permitted by the Plan as then in
effect, including the limitations in Section 3.2(a) and 3.2(b).
 
(d) Notwithstanding any other provision of this Plan other than Section 4.3, the
Committee may not, without prior approval of the Company’s stockholders, seek to
effect any re-pricing of any previously granted, “underwater” Option or Stock
Appreciation Right by:  (i) amending or modifying the terms of the Option or
Stock Appreciation Right to lower the exercise price; (ii) canceling the
underwater Option or Stock Appreciation Right and granting either (A)
replacement Options or Stock Appreciation Rights having a lower exercise price;
(B) Restricted Stock Awards; or (C) Stock Unit Awards, Performance Awards or
Stock Bonuses in exchange; or (iii) repurchasing the underwater Options or Stock
Appreciation Rights and granting new Incentive Awards under this Plan.  For
purposes of this Section 3.2(d), Options and Stock Appreciation Rights will be
deemed to be “underwater” at any time when the Fair Market Value of the Common
Stock is less than the exercise price of the Option or Stock Appreciation Right.
 
(e) In addition to the authority of the Committee under Section 3.2(b) of the
Plan and notwithstanding any other provision of the Plan, the Committee may, in
its sole discretion, amend the terms of the Plan or Incentive Awards with
respect to Participants resident outside of the United States or employed by a
non-U.S. Subsidiary in order to comply with local legal requirements, to
otherwise protect the Company’s or Subsidiary’s interests, or to meet objectives
of the Plan, and may, where appropriate, establish one or more sub-plans
(including the adoption of any required rules and regulations) for the purposes
of qualifying for preferred tax treatment under foreign tax laws.  The Committee
shall have no authority, however, to take action pursuant to this Section 3.2(e)
of the Plan: (i) to reserve shares or grant Incentive Awards in excess of the
limitations provided in Section 4.1 of the Plan; (ii) to effect any re-pricing
in violation of Section 3.2(d) of the Plan; (iii) to grant Options or Stock
Appreciation Rights having an exercise price in violation of Section 6.2 or 7.2
of the Plan, as the case may be; or (iv) for which stockholder approval would
then be required pursuant to Section 422 of the Code or the rules of The NASDAQ
Stock Market (or other applicable exchange or market on which the Company’s
Common Stock may be traded or quoted).
 
4. Shares Available for Issuance.
 
4.1 Maximum Number of Shares Available; Certain Restrictions on Awards.  Subject
to adjustment as provided in Section 4.3 of the Plan, the maximum number of
shares of Common Stock that will be available for issuance under the Plan will
be the sum of:
 
(a) 2,000,000;
 
(b) the number of shares issued or Incentive Awards granted under the Plan in
connection with the settlement, assumption or substitution of outstanding awards
or obligations to grant future awards as a condition of the Company and/or any
Subsidiary(ies) acquiring, merging or consolidating with another entity; and
 
(c) the number of shares that are unallocated and available for grant under a
stock plan assumed by the Company or any Subsidiary(ies) in connection with the
merger, consolidation, or acquisition of another entity by the Company and/or
any of its Subsidiaries, based on the applicable exchange ratio and other
transaction terms, but only to the extent that such shares may be utilized by
the Company or its Subsidiaries following the transaction pursuant to the rules
and regulations of The NASDAQ Stock Market (or other applicable exchange or
market on which the Company’s Common Stock may be traded or quoted).
 
The shares available for issuance under the Plan may, at the election of the
Committee, be either treasury shares or shares authorized but unissued, and, if
treasury shares are used, all references in the Plan to the issuance of shares
will, for corporate law purposes, be deemed to mean the transfer of shares from
treasury.
 
Notwithstanding any other provisions of the Plan to the contrary, (i) no more
than 2,000,000 shares of Common Stock may be issued pursuant to the exercise of
Incentive Stock Options granted under the Plan; and (ii) no more than 250,000
shares of Common Stock may be issued or issuable under the Plan in connection
with the grant of Incentive Awards, other than Options or Stock Appreciation
Rights.  All of the foregoing share limits are subject, in each case, to
adjustment as provided in Section 4.3 of the Plan.  Incentive Stock Options
issued as a result of the Company’s assumption or substitution of like awards
issued by any acquired, merged or consolidated entity pursuant to applicable
provisions of the Code will not count towards the limit in clause (i).
 
4.2 Accounting for Incentive Awards.  Shares of Common Stock that are issued
under the Plan or that are potentially issuable pursuant to outstanding
Incentive Awards will be applied to reduce the maximum number of shares of
Common Stock remaining available for issuance under the Plan.  All shares so
subtracted from the amount available under the Plan with respect to an Incentive
Award that lapses, expires, is forfeited (including issued shares forfeited
under a Restricted Stock Award) or for any reason is terminated unexercised or
unvested or is settled or paid in cash or any form other than shares of Common
Stock will automatically again become available for issuance under the Plan;
provided, however, that (i) any shares which would have been issued upon any
exercise of an Option but for the fact that the exercise price was paid by a
“net exercise” pursuant to Section 6.4(b) of the Plan or the tender or
attestation as to ownership of Previously Acquired Shares pursuant to Section
6.4(a) of the Plan will not again become available for issuance under the Plan;
(ii) shares covered by a Stock Appreciation Right, to the extent exercised, will
not again become available for issuance under the Plan; and (iii) shares
withheld by the Company to satisfy any tax withholding obligation will not again
become available for issuance under the Plan.
 
4.3 Adjustments to Shares and Incentive Awards.  In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other similar change in the corporate structure or shares of the Company, the
Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) will make
appropriate adjustment (which determination will be conclusive) as to the number
and kind of securities or other property (including cash) available for issuance
or payment under the Plan and, in order to prevent dilution or enlargement of
the rights of Participants, (a) the number and kind of securities or other
property (including cash) subject to outstanding Incentive Awards, and (b) the
exercise price of outstanding Options and Stock Appreciation Rights.
 
5. Participation.
 
Participants in the Plan will be those Eligible Recipients who, in the judgment
of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries.  Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion.  Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.

6. Options.
 
6.1 Grant.  An Eligible Recipient may be granted one or more Options under the
Plan, and such Options will be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by the Committee in
its sole discretion.  The Committee may designate whether an Option is to be
considered an Incentive Stock Option or a Non-Statutory Stock Option.  To the
extent that any Incentive Stock Option (or portion thereof) granted under the
Plan ceases for any reason to qualify as an “incentive stock option” for
purposes of Section 422 of the Code, such Incentive Stock Option (or portion
thereof) will continue to be outstanding for purposes of the Plan but will
thereafter be deemed to be a Non-Statutory Stock Option.
 
6.2 Exercise Price.  The per share price to be paid by a Participant upon
exercise of an Option will be determined by the Committee in its discretion at
the time of the Option grant, provided that such price will not be less than
100% of the Fair Market Value of one share of Common Stock on the date of grant
(or 110% of the Fair Market Value of one share of Common Stock on the date of
grant of an Incentive Stock Option if, at the time the Incentive Stock Option is
granted, the Participant owns, directly or indirectly, more than 10% of the
total combined voting power of all classes of stock of the Company or any parent
or subsidiary corporation of the Company).   Notwithstanding the foregoing, to
the extent that Options are granted under the Plan as a result of the Company’s
assumption or substitution of options issued by any acquired, merged or
consolidated entity, the exercise price for such Options shall be the price
determined by the Committee pursuant to the conversion terms applicable to the
transaction.
 
6.3 Exercisability and Duration.  An Option will become exercisable at such
times and in such installments and upon such terms and conditions as may be
determined by the Committee in its sole discretion at the time of grant
(including without limitation (i) the achievement of one or more specified
performance objectives; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period); provided, however, that no Option may be exercisable after ten (10)
years from its date of grant (five years from its date of grant in the case of
an Incentive Stock Option if, at the time the Incentive Stock Option is granted,
the Participant owns, directly or indirectly, more than 10% of the total
combined voting power of all classes of stock of the Company or any parent or
subsidiary corporation of the Company).
 
6.4 Payment of Exercise Price.
 
(a) The total purchase price of the shares to be purchased upon exercise of an
Option will be paid entirely in cash (including check, bank draft or money
order); provided, however, that the Committee, in its sole discretion and upon
terms and conditions established by the Committee, may allow such payments to be
made, in whole or in part, by (i) tender of a Broker Exercise Notice; (ii) by
tender, or attestation as to ownership, of Previously Acquired Shares that are
acceptable to the Committee; (iii) by a “net exercise” of the Option (as further
described in paragraph (b), below);  or  (iv) by a combination of such methods.
 
(b) In the case of a “net exercise” of an Option, the Company will not require a
payment of the exercise price of the Option from the Participant 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 exercise price for the shares exercised under this
method. Shares of Common Stock will no longer be outstanding under an Option
(and will therefore not thereafter be exercisable) following the exercise of
such Option to the extent of (i) shares used to pay the exercise price of an
Option under the “net exercise,” (ii) shares actually delivered to the
Participant as a result of such exercise and (iii) any shares withheld for
purposes of tax withholding pursuant to Section 13.1 of the Plan.
 
(c) Previously Acquired Shares tendered or covered by an attestation as payment
of an Option exercise price will be valued at their Fair Market Value on the
exercise date.
 
6.5 Manner of Exercise.  An Option may be exercised by a Participant in whole or
in part from time to time, subject to the conditions contained in the Plan and
in the agreement evidencing such Option, by delivery in person, by facsimile or
electronic transmission or through the mail of written notice of exercise to the
Company at its principal executive office in Lincolnshire, Illinois and by
paying in full the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.4 of the Plan.
 
7. Stock Appreciation Rights.
 
7.1 Grant.  An Eligible Recipient may be granted one or more Stock Appreciation
Rights under the Plan, and such Stock Appreciation Rights will be subject to
such terms and conditions, consistent with the other provisions of the Plan, as
may be determined by the Committee in its sole discretion.  The Committee will
have the sole discretion to determine the form in which payment of the economic
value of Stock Appreciation Rights will be made to a Participant (i.e., cash,
shares of Common Stock or any combination thereof) or to consent to or
disapprove the election by a Participant of the form of such payment.
 
7.2 Exercise Price.  The exercise price of a Stock Appreciation Right will be
determined by the Committee, in its discretion, at the date of grant but may not
be less than 100% of the Fair Market Value of one share of Common Stock on the
date of grant.  Notwithstanding the foregoing, to the extent that Stock
Appreciation Rights are granted under the Plan as a result of the Company’s
assumption or substitution of stock appreciation rights issued by any acquired,
merged or consolidated entity, the exercise price for such Stock Appreciation
Rights shall be the price determined by the Committee pursuant to the conversion
terms applicable to the transaction.
 
7.3 Exercisability and Duration.  A Stock Appreciation Right will become
exercisable at such time and in such installments as may be determined by the
Committee in its sole discretion at the time of grant; provided, however, that
no Stock Appreciation Right may be exercisable after ten (10) years from its
date of grant.  A Stock Appreciation Right will be exercised by giving notice in
the same manner as for Options, as set forth in Section 6.5 of the Plan.
 
7.4 Grants in Tandem with Options.  Stock Appreciation Rights may be granted
alone or in addition to other Incentive Awards, or in tandem with an Option, at
the time of grant of the Option.  A Stock Appreciation Right granted in tandem
with an Option shall cover the same number of shares of Common Stock as covered
by the Option (or such lesser number as the Committee may determine), shall be
exercisable at such time or times and only to the extent that the related Option
is exercisable, have the same term as the Option and shall have an exercise
price equal to the exercise price for the Option.  Upon the exercise of a Stock
Appreciation Right granted in tandem with an Option, the Option shall be
canceled automatically to the extent of the number of shares covered by such
exercise; conversely, upon exercise of an Option having a related Stock
Appreciation Right, the Stock Appreciation Right shall be canceled automatically
to the extent of the number of shares covered by the Option exercise.
 
8. Restricted Stock Awards.
 
8.1 Grant.  An Eligible Recipient may be granted one or more Restricted Stock
Awards under the Plan, and such Restricted Stock Awards will be subject to such
terms and conditions, consistent with the other provisions of the Plan, as may
be determined by the Committee in its sole discretion.  The Committee may impose
such restrictions or conditions, not inconsistent with the provisions of the
Plan, to the vesting of such Restricted Stock Awards as it deems appropriate,
including, without limitation, (i) the achievement of one or more specified
performance objectives; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period.
 
8.2 Rights as a Stockholder; Transferability.  Except as provided in Sections
8.1, 8.3, 8.4 and 15.3 of the Plan, a Participant will have all voting,
dividend, liquidation and other rights with respect to shares of Common Stock
issued to the Participant as a Restricted Stock Award under this Section 8 upon
the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.
 
8.3 Dividends and Distributions.  Unless the Committee determines otherwise in
its sole discretion (either in the agreement evidencing the Restricted Stock
Award at the time of grant or at any time after the grant of the Restricted
Stock Award), any dividends or distributions (other than regular quarterly cash
dividends) paid with respect to shares of Common Stock subject to the unvested
portion of a Restricted Stock Award will be subject to the same restrictions as
the shares to which such dividends or distributions relate.  The Committee will
determine in its sole discretion whether any interest will be paid on such
dividends or distributions.
 
8.4 Enforcement of Restrictions.  To enforce the restrictions referred to in
this Section 8, the Committee may place a legend on the stock certificates
referring to such restrictions and may require the Participant, until the
restrictions have lapsed, to keep the stock certificates, together with duly
endorsed stock powers, in the custody of the Company or its transfer agent, or
to maintain evidence of stock ownership, together with duly endorsed stock
powers, in a certificateless book-entry stock account with the Company’s
transfer agent.
 
9. Stock Unit Awards.
 
An Eligible Recipient may be granted one or more Stock Unit Awards under the
Plan, and such Stock Unit Awards will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion.  The Committee may impose such restrictions or
conditions, not inconsistent with the provisions of the Plan, to the payment,
issuance, retention and/or vesting of such Stock Unit Awards as it deems
appropriate, including, without limitation, (i) the achievement of one or more
specified performance objectives; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period.
 
10. Performance Awards.
 
An Eligible Recipient may be granted one or more Performance Awards under the
Plan, and such Performance Awards will be subject to such terms and conditions,
if any, consistent with the other provisions of the Plan, as may be determined
by the Committee in its sole discretion, including, but not limited to, the
achievement of one or more specified performance objectives.

11. Stock Bonuses.
 
An Eligible Recipient may be granted one or more Stock Bonuses under the Plan,
and such Stock Bonuses will be subject to such terms and conditions, if any,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion, including, but not limited to, the achievement
of one or more specified performance objectives.

12. Effect of Termination of Employment or Other Service.  The following
provisions shall apply upon termination of a Participant’s employment or other
service with the Company and all Subsidiaries, except to the extent that the
Committee provides otherwise in an agreement evidencing an Incentive Award at
the time of grant or determines pursuant to Section 12.3 of the Plan.
 
12.1 Termination Due to Death, Disability or Retirement.  In the event a
Participant’s employment or other service with the Company and all Subsidiaries
is terminated by reason of death, Disability or Retirement:
 
(a) All outstanding Options and Stock Appreciation Rights then held by the
Participant will, to the extent exercisable as of such termination, remain
exercisable in full for a period of one year after such termination (but in no
event after the expiration date of any such Option or Stock Appreciation
Right).  Options and Stock Appreciation Rights not exercisable as of such
termination will be forfeited and terminate.
 
(b) All Restricted Stock Awards then held by the Participant that have not
vested as of such termination will be terminated and forfeited; and
 
(c) All outstanding but unpaid Stock Unit Awards, Performance Awards and Stock
Bonuses then held by the Participant will be terminated and forfeited.
 
12.2 Termination for Reasons Other than Death, Disability or Retirement. Subject
to Section 12.4 of the Plan, in the event a Participant’s employment or other
service is terminated with the Company and all Subsidiaries for any reason other
than death, Disability or Retirement, or a Participant is in the employ or
service of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the
Company (unless the Participant continues in the employ or service of the
Company or another Subsidiary):
 
(a) All outstanding Options and Stock Appreciation Rights then held by the
Participant will, to the extent exercisable as of such termination, remain
exercisable in full for a period of three months after such termination (but in
no event after the expiration date of any such Option or Stock Appreciation
Right).  Options and Stock Appreciation Rights not exercisable as of such
termination will be forfeited and terminate;
 
(b) All Restricted Stock Awards then held by the Participant that have not
vested as of such termination will be terminated and forfeited; and
 
(c) All outstanding but unpaid Stock Unit Awards, Performance Awards and Stock
Bonuses then held by the Participant will be terminated and forfeited.
 
12.3 Modification of Rights Upon Termination.  Notwithstanding the other
provisions of this Section 12, upon a Participant’s termination of employment or
other service with the Company and all Subsidiaries, the Committee may, in its
sole discretion (which may be exercised at any time on or after the date of
grant, including following such termination), except as provided in clause (ii),
below, cause Options or Stock Appreciation Rights (or any part thereof) then
held by such Participant to terminate, become or continue to become exercisable
and/or remain exercisable following such termination of employment or service,
and Restricted Stock Awards, Stock Unit Awards, Performance Awards or Stock
Bonuses then held by such Participant to terminate, vest or become free of
restrictions and conditions to payment, as the case may be, following such
termination of employment or service, in each case in the manner determined by
the Committee; provided, however, that any such action adversely affecting any
outstanding Incentive Award will not be effective without the consent of the
affected Participant (subject to the right of the Committee to take whatever
action it deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan).
 
12.4 Effects of Actions Constituting Cause.  Notwithstanding anything in the
Plan to the contrary, in the event that a Participant is determined by the
Committee, acting in its sole discretion, to have committed any action which
would constitute Cause as defined in Section 2.3 of the Plan, irrespective of
whether such action or the Committee’s determination occurs before or after
termination of such Participant’s employment with the Company or any Subsidiary,
all rights of the Participant under the Plan and any agreements evidencing an
Incentive Award then held by the Participant shall terminate and be forfeited
without notice of any kind.  The Company may defer the exercise of any Option,
the vesting of any Restricted Stock Award or the payment of any Stock Unit
Award, Performance Award or Stock Bonus for a period of up to forty-five (45)
days in order for the Committee to make any determination as to the existence of
Cause.
 
12.5 Determination of Termination of Employment or Other Service.
 
(a) The change in a Participant’s status from that of an employee of the Company
or any Subsidiary to that of a non-employee consultant, director or advisor of
the Company or any Subsidiary will, for purposes of the Plan, be deemed to
result in a termination of such Participant’s employment with the Company and
its Subsidiaries, unless the Committee otherwise determines in its sole
discretion.
 
(b) The change in a Participant’s status from that of a non-employee consultant,
director or advisor of the Company or any Subsidiary to that of an employee of
the Company or any Subsidiary will not, for purposes of the Plan, be deemed to
result in a termination of such Participant’s service as a non-employee
consultant, director or advisor with the Company and its Subsidiaries, and such
Participant will thereafter be deemed to be an employee of the Company or its
Subsidiaries until such Participant’s employment is terminated, in which event
such Participant will be governed by the provisions of this Plan relating to
termination of employment or service (subject to paragraph (a), above).
 
(c) Unless the Committee otherwise determines in its sole discretion, a
Participant’s employment or other service will, for purposes of the Plan, be
deemed to have terminated on the date recorded on the personnel or other records
of the Company or the Subsidiary for which the Participant provides employment
or other service, as determined by the Committee in its sole discretion based
upon such records.
 
(d) Notwithstanding the foregoing, if payment of an Incentive Award that is
subject to Section 409A of the Code is triggered by a termination of a
Participant’s employment or other service, such termination must also constitute
a “separation from service” within the meaning of Section 409A of the Code, and
any change in employment status that constitutes a “separation from service”
under Section 409A of the Code shall be treated as a termination of employment
or service, as the case may be.
 
12.6 Breach of Employment, Consulting, Confidentiality or Non-Compete
Agreements.  Notwithstanding anything in the Plan to the contrary and in
addition to the rights of the Committee under Section 12.4 of the Plan, in the
event that a Participant materially breaches the terms of any employment,
consulting, confidentiality or non-compete agreement entered into with the
Company or any Subsidiary (including an employment, consulting, confidentiality
or non-compete agreement made in connection with the grant of an Incentive
Award), whether such breach occurs before or after termination of such
Participant’s employment or other service with the Company or any Subsidiary,
the Committee in its sole discretion may require the Participant to surrender
shares of Common Stock received, and to disgorge any profits (however defined by
the Committee), made or realized by the Participant in connection with any
Incentive Awards or any shares issued upon the exercise or vesting of any
Incentive Awards.
 
13. Payment of Withholding Taxes.
 
13.1 General Rules.  The Company is entitled to (a) withhold and deduct from
future wages of the Participant (or from other amounts that may be due and owing
to the Participant from the Company or a Subsidiary), or make other arrangements
for the collection of, all amounts the Company reasonably determines are
necessary to satisfy any and all federal, foreign, state and local withholding
and employment-related tax requirements attributable to an Incentive Award,
including, without limitation, the grant, exercise or vesting of, or payment of
dividends with respect to, an Incentive Award or a disqualifying disposition of
stock received upon exercise of an Incentive Stock Option; (b) withhold cash
paid or payable or shares of Common Stock from the shares issued or otherwise
issuable to the Participant in connection with an Incentive Award; or (c)
require the Participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Incentive Award.  Shares of Common Stock issued or otherwise
issuable to the Participant in connection with an Incentive Award that gives
rise to the tax withholding obligation that are withheld for purposes of
satisfying the Participant’s withholding or employment-related tax obligation
will be valued at their Fair Market Value on the Tax Date.
 
13.2 Special Rules.  The Committee may, in its sole discretion and upon terms
and conditions established by the Committee, permit or require a Participant to
satisfy, in whole or in part, any withholding or employment-related tax
obligation described in Section 13.1 of the Plan by electing to tender, or by
attestation as to ownership of, Previously Acquired Shares, by delivery of a
Broker Exercise Notice or a combination of such methods.  For purposes of
satisfying a Participant’s withholding or employment-related tax obligation,
Previously Acquired Shares tendered or covered by an attestation will be valued
at their Fair Market Value on the Tax Date.
 
14. Change in Control.
 
14.1 A “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:
 
(a) the sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company;
 
(b) the approval by the stockholders of the Company of any plan or proposal for
the liquidation or dissolution of the Company;
 
(c) any person becomes after the effective date of the Plan the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of (A) 20% or more, but not 50% or more, of the combined voting
power of the Company’s outstanding securities ordinarily having the right to
vote at elections of directors, unless the transaction resulting in such
ownership has been approved in advance by the Continuity Directors, or (B) 50%
or more of the combined voting power of the Company’s outstanding securities
ordinarily having the right to vote at elections of directors (regardless of any
approval by the Continuity Directors);
 
(d) a merger or consolidation to which the Company is a party if the
stockholders of the Company immediately prior to effective date of such merger
or consolidation have “beneficial ownership” (as defined in Rule 13d-3 under the
Exchange Act), immediately following the effective date of such merger or
consolidation, of securities of the surviving corporation representing (A) more
than 50%, but less than 80%, of the combined voting power of the surviving
corporation’s then outstanding securities ordinarily having the right to vote at
elections of directors, unless such merger or consolidation has been approved in
advance by the Continuity Directors (as defined below), or (B) 50% or less of
the combined voting power of the surviving corporation’s then outstanding
securities ordinarily having the right to vote at elections of directors
(regardless of any approval by the Continuity Directors);
 
(e) the Continuity Directors cease for any reason to constitute at least a
majority of the Board; or
 
(f) any other change in control of the Company of a nature that would be
required to be reported pursuant to Section 13 or 15(d) of the Exchange Act,
whether or not the Company is then subject to such reporting requirements.
 
For purposes of this Section 14, “Continuity Directors” of the Company will mean
any individuals who are members of the Board on the Effective Date and any
individual who subsequently becomes a member of the Board whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the Continuity Directors (either by specific vote or by
approval of the Company’s proxy statement in which such individual is named as a
nominee for director without objection to such nomination).
 
14.2 Acceleration of Vesting.  Without limiting the authority of the Committee
under Sections 3.2 and 4.3 of the Plan, if a Change in Control of the Company
occurs, then, unless otherwise provided by the Committee in its sole discretion
either in the agreement evidencing an Incentive Award at the time of grant or at
any time after the grant of an Incentive Award: (a) all Options and Stock
Appreciation Rights will become immediately exercisable in full and will remain
exercisable in accordance with their terms; (b) all Restricted Stock Awards will
become immediately fully vested and non-forfeitable; and (c) any conditions to
the payment of Stock Unit Awards, Performance Awards and Stock Bonuses will
lapse.
 
14.3 Cash Payment.  If a Change in Control of the Company occurs, then the
Committee, if approved by the Committee in its sole discretion either in an
agreement evidencing an Incentive Award at the time of grant or at any time
after the grant of an Incentive Award, and without the consent of any
Participant affected thereby, may determine that: (i) some or all Participants
holding outstanding Options will receive, with respect to some or all of the
shares of Common Stock subject to such Options, as of the effective date of any
such Change in Control of the Company, cash in an amount equal to the excess of
the Fair Market Value of such shares immediately prior to the effective date of
such Change in Control of the Company over the exercise price per share of such
Options (or, in the event that there is no excess, that such Options will be
terminated); and (ii) some or all Participants holding Performance Awards will
receive, with respect to some or all of the shares of Common Stock subject to
such Performance Awards, as of the effective date of any such Change in Control
of the Company, cash in an amount equal the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control.
 
15. Rights of Eligible Recipients and Participants; Transferability.
 
15.1 Employment or Service.  Nothing in the Plan will interfere with or limit in
any way the right of the Company or any Subsidiary to terminate the employment
or service of any Eligible Recipient or Participant at any time, nor confer upon
any Eligible Recipient or Participant any right to continue in the employ or
service of the Company or any Subsidiary.
 
15.2 Rights as a Stockholder; Dividends.  As a holder of Incentive Awards (other
than Restricted Stock Awards), a Participant will have no rights as a
stockholder unless and until such Incentive Awards are exercised for, or paid in
the form of, shares of Common Stock and the Participant becomes the holder of
record of such shares.  Except as otherwise provided in the Plan or otherwise
provided by the Committee, no adjustment will be made in the amount of cash
payable or in the number of shares of Common Stock issuable under Incentive
Awards denominated in or based on the value of shares of Common Stock as a
result of cash dividends or distributions paid to holders of Common Stock prior
to the payment of, or issuance of shares of Common Stock under, such Incentive
Awards.
 
15.3 Restrictions on Transfer.
 
(a) Except pursuant to testamentary will or the laws of descent and distribution
or as otherwise expressly permitted by subsections (b) and (c) below, no right
or interest of any Participant in an Incentive Award prior to the exercise (in
the case of Options) or vesting or issuance (in the case of Restricted Stock
Awards and Performance Awards) of such Incentive Award will be assignable or
transferable, or subjected to any lien, during the lifetime of the Participant,
either voluntarily or involuntarily, directly or indirectly, by operation of law
or otherwise.
 
(b) A Participant will be entitled to designate a beneficiary to receive an
Incentive Award upon such Participant’s death, and in the event of such
Participant’s death, payment of any amounts due under the Plan will be made to,
and exercise of any Options or Stock Appreciation Rights (to the extent
permitted pursuant to Section 12 of the Plan) may be made by, such
beneficiary.  If a deceased Participant has failed to designate a beneficiary,
or if a beneficiary designated by the Participant fails to survive the
Participant, payment of any amounts due under the Plan will be made to, and
exercise of any Options or Stock Appreciation Rights (to the extent permitted
pursuant to Section 12 of the Plan) may be made by, the Participant’s legal
representatives, heirs and legatees.  If a deceased Participant has designated a
beneficiary and such beneficiary survives the Participant but dies before
complete payment of all amounts due under the Plan or exercise of all
exercisable Options or Stock Appreciation Rights, then such payments will be
made to, and the exercise of such Options or Stock Appreciation Rights may be
made by, the legal representatives, heirs and legatees of the beneficiary.
 
(c) Upon a Participant’s request, the Committee may, in its sole discretion,
permit a transfer of all or a portion of a Non-Statutory Stock Option, other
than for value, to such Participant’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, any person sharing such Participant’s household (other than a
tenant or employee), a trust in which any of the foregoing have more than fifty
percent of the beneficial interests, a foundation in which any of the foregoing
(or the Participant) control the management of assets, and any other entity in
which these persons (or the Participant) own more than fifty percent of the
voting interests.  Any permitted transferee will remain subject to all the terms
and conditions applicable to the Participant prior to the transfer.  A permitted
transfer may be conditioned upon such requirements as the Committee may, in its
sole discretion, determine, including, but not limited to execution and/or
delivery of appropriate acknowledgements, opinion of counsel, or other documents
by the transferee.
 
15.4 Non-Exclusivity of the Plan.  Nothing contained in the Plan is intended to
modify or rescind any previously approved compensation plans or programs of the
Company or create any limitations on the power or authority of the Board to
adopt such additional or other compensation arrangements as the Board may deem
necessary or desirable.
 
16. Securities Law and Other Restrictions.
 
Notwithstanding any other provision of the Plan or any agreements entered into
pursuant to the Plan, the Company will not be required to issue any shares of
Common Stock under this Plan, and a Participant may not sell, assign, transfer
or otherwise dispose of shares of Common Stock issued pursuant to Incentive
Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable
securities laws of a state or foreign jurisdiction or an exemption from such
registration under the Securities Act and applicable state or foreign securities
laws, and (b) there has been obtained any other consent, approval or permit from
any other U.S. or foreign regulatory body which the Committee, in its sole
discretion, deems necessary or advisable.  The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.

17. Compliance with Section 409A.
 
It is intended that the Plan and all Incentive Awards hereunder be administered
in a manner that will comply with the requirements of Section 409A of the Code,
or the requirements of an exception to Section 409A of the Code.  The Committee
is authorized to adopt rules or regulations deemed necessary or appropriate to
qualify for an exception from or to comply with the requirements of Section 409A
of the Code (including any transition or grandfather rules relating
thereto).  Notwithstanding anything in this Section 17 to the contrary, with
respect to any Incentive Award subject to Section 409A of the Code, no amendment
to or payment under such Incentive Award will be made unless and only to the
extent permitted under Section 409A of the Code.
 
18. Plan Amendment, Modification and Termination.
 
The Board may suspend or terminate the Plan or any portion thereof at any
time.  In addition to the authority of the Committee to amend the Plan under
Section 3.2(e) of the Plan, the Board may amend the Plan from time to time in
such respects as the Board may deem advisable in order that Incentive Awards
under the Plan will conform to any change in applicable laws or regulations or
in any other respect the Board may deem to be in the best interests of the
Company; provided, however, that no such amendments to the Plan will be
effective without approval of the Company’s stockholders if: (i) stockholder
approval of the amendment is then required pursuant to Section 422 of the Code
or the rules of The NASDAQ Stock Market (or other applicable exchange or market
on which the Company’s Common Stock may be traded or quoted); or (ii) such
amendment seeks to increase the number of shares authorized for issuance
hereunder (other than by virtue of an adjustment under Section 4.3 of the Plan)
or to modify Section 3.2(d) of the Plan.  No termination, suspension or
amendment of the Plan may adversely affect any outstanding Incentive Award
without the consent of the affected Participant; provided, however, that this
sentence will not impair the right of the Committee to take whatever action it
deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan.

19. Effective Date and Duration of the Plan.
 
The Plan will be effective as of June 12, 2008, or such later date on which the
Plan is initially approved by the Company’s stockholders (the “Effective
Date”).  The Plan will terminate at midnight on the day before the tenth (10th)
anniversary of the Effective Date, and may be terminated prior to such time by
Board action.  No Incentive Award will be granted after termination of the
Plan.  Incentive Awards outstanding upon termination of the Plan may continue to
be exercised, earned or become free of restrictions, according to their terms.

20. Miscellaneous.
 
20.1 Fractional Shares.  No fractional shares of Common Stock will be issued or
delivered under the Plan or any Award. The Committee will determine whether
cash, other Awards or other property will be issued or paid.
 
20.2 Governing Law.  Except to the extent expressly provided herein or in
connection with other matters of corporate governance and authority (all of
which shall be governed by the laws of the Company’s jurisdiction of
incorporation), the validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan
will be governed by and construed exclusively in accordance with the laws of the
State of Illinois, notwithstanding the conflicts of laws principles of any
jurisdictions.
 
20.3 Successors and Assigns.  The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
Participants.
 
20.4 Construction.  Wherever possible, each provision of the Plan and any
agreement evidencing an Incentive Award granted under the Plan will be
interpreted so that it is valid under the applicable law.  If any provision of
the Plan or any agreement evidencing an Incentive Award granted under the Plan
is to any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid.  The remainder of the Plan and the
Incentive Award agreement also will continue to be valid, and the entire Plan
and Incentive Award agreement will continue to be valid in other jurisdictions.