KOHLBERG
      CAPITAL CORPORATION

    


    AMENDED
      AND RESTATED 2006 EQUITY INCENTIVE PLAN

    


    1.    PURPOSE
      AND CERTAIN DEFINED TERMS

    


    The
      purpose of this Amended and Restated 2006 Equity Incentive Plan (the
“Plan”)
      is to
      advance the interests of the Company (as defined below) by providing for the
      grant to employees and officers of Share-based awards, including without
      limitation options to acquire Shares (as defined below) and, to the extent
      permitted by exemptive or other relief that may be granted by the Securities
      and
      Exchange Commission (the "Commission")
      or its
      staff, Restricted Shares (as defined below) and options to acquire Restricted
      Shares (collectively, the “Awards”).
      At
      all times during such periods as the Company qualifies or intends to qualify
      as
      a “business development company” under the Investment Company Act of 1940, as
      amended (the “1940
      Act”),
      the
      terms of the Plan shall be construed so as to conform to the share-based
      compensation requirements applicable to “business development companies” under
      the 1940 Act. Any employee or officer selected to receive an Award under the
      Plan is referred to as a “participant.”

    


    The
      following terms, when used in the Plan, will have the meanings and be subject
      to
      the provisions set forth below:

    


    “Affiliate”
means
      any corporation or other entity that stands in a relationship to the Company
      that would result in the Company and such corporation or other entity being
      treated as one employer under Section 414(b) or Section 414(c) of the
      Code, except that in determining eligibility for the grant of an Option by
      reason of service for an Affiliate, Sections 414(b) and 414(c) of the Code
      shall be applied by substituting “at least 50%” for “at least 80%” under
      Section 1563(a)(1), (2) and (3) of the Code and Treas.
      Regs. § 1.414(c)-2; provided, that to the extent permitted under
      Section 409A, “at least 20%” shall be used in lieu of “at least 50%”; and
      further provided, that the lower ownership threshold described in this
      definition (50% or 20% as the case may be) shall apply only if the same
      definition of affiliation is used consistently with respect to all compensatory
      stock options or stock awards (whether under the Plan or another plan). The
      Company may at any time by amendment provide that different ownership thresholds
      (consistent with Section 409A) apply. Notwithstanding the foregoing
      provisions of this definition, except as otherwise determined by the Board,
      a
      corporation or other entity shall be treated as an Affiliate only if its
      employees would be treated as employees of the Company for purposes of the
      rules
      promulgated under the Securities Act of 1933, as amended, with respect to the
      use of Form S-8.

    


    “Board”
means,
      prior to Conversion, the board of managers of the LLC and, at and after
      Conversion, the board of directors of the Corporation.

    


    “Company”
means,
      prior to Conversion, the LLC and, at and after Conversion, the
      Corporation.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Conversion”
means
      the conversion of the LLC, pursuant to Section 265 of the Delaware General
      Corporation Law and Section 216 of the Delaware Limited Liability Company Act,
      to the Corporation.

    


    “Corporation”
means
      Kohlberg Capital Corporation, a Delaware corporation.

    


    “LLC”
means
      Kohlberg Capital, LLC, a Delaware limited liability company.

    


    "Non-Employee
      Director Plan"
      means
      the Company's 2008 Non-Employee Director Plan, as amended from time to time.
      

    


    “Performance
      Criteria”
or,
      in
      the singular, “Performance
      Criterion,”
means
      specified criteria, other than the mere continuation of employment or the mere
      passage of time, the satisfaction of which is a condition for the grant,
      exercisability, vesting or full enjoyment of an Award. For purposes of Awards
      that are intended to qualify for the performance-based compensation exception
      under Section 162(m) of the Code, a Performance Criterion will mean an
      objectively determinable measure of performance relating to any or any
      combination of the following (measured either absolutely or by reference to
      an
      index or indices and determined either on a consolidated basis or, as the
      context permits, on a divisional, subsidiary, line of business, project or
      geographical basis or in combinations thereof): sales; revenues; assets;
      expenses; earnings before or after deduction for all or any portion of interest,
      taxes, depreciation, or amortization, whether or not on a continuing operations
      or an aggregate or per share basis; return on equity, investment, capital or
      assets; one or more operating ratios; borrowing levels, leverage ratios or
      credit rating; market share; capital expenditures; cash flow; stock price;
      stockholder return; sales of particular products or services; customer
      acquisition or retention; acquisitions and divestitures (in whole or in part);
      joint ventures and strategic alliances; spin-offs, split-ups and the like;
      reorganizations; or recapitalizations, restructurings, financings (issuance
      of
      debt or equity) or refinancings. A Performance Criterion and any targets with
      respect thereto determined by the Administrator need not be based upon an
      increase, a positive or improved result or avoidance of loss. To the extent
      consistent with the requirements for satisfying the performance-based
      compensation exception under Section 162(m) of the Code, the Board may
      provide in the case of any Award intended to qualify for such exception that
      one
      or more of the Performance Criteria applicable to such Award will be adjusted
      in
      an objectively determinable manner to reflect events (for example, but without
      limitation, acquisitions or dispositions) occurring during the performance
      period that affect the applicable Performance Criterion or
      Criteria.

    


    “Restricted
      Shares”
means
      an award of Shares for so long as the Shares remain subject to restrictions
      requiring that they be forfeited to the Corporation if specified conditions
      are
      not satisfied. 

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Shares”
means,
      prior to Conversion, the common units of the LLC and, at and after Conversion,
      the common stock, $.01 par value per share, of the Corporation.

    


    “Shareholders”
means,
      prior to Conversion, the members of the LLC and, at and after Conversion, the
      shareholders of the Corporation.

    


    2.    ADMINISTRATION

    


    The
      Plan
      shall be administered by the Board unless and until it delegates administration
      to a committee as provided herein; provided that a "required majority," as
      defined in Section 57(o) of the 1940 Act, must approve each issuance of Awards
      and Dividend Equivalent Rights in accordance with Section 61(a)(3)(A)(iv) of
      the
      1940 Act. The Board shall have discretionary authority, subject to the express
      provisions of the Plan, (a) to grant Awards to such Eligible Persons (defined
      below in Section 5 hereof) as the Board may select; (b) to determine the time
      or
      times when Awards shall be granted and the number of Shares subject to each
      Award; (c) to determine the terms and conditions of each Award; (d) to
      prescribe the form or forms of any instruments evidencing Awards and any other
      instruments required under the Plan and to change such forms from time to time;
      (e) to adopt, amend, and rescind rules and regulations for the
      administration of the Plan; and (f) to interpret the Plan and to decide any
      questions and settle all controversies and disputes that may arise in connection
      with the Plan. Such determinations of the Board shall be conclusive and shall
      bind all parties. Subject to Section 9 hereof, the Board shall also have the
      authority, both generally and in particular instances, to waive compliance
      by a
      participant with any obligation to be performed by him or her under an Award,
      to
      waive any condition or provision of an Award, and to amend or cancel any Award
      (and if an Award is canceled, to grant a new Award on such terms as the Board
      shall specify), except that the Board may not take any action with respect
      to an
      outstanding Award that would adversely affect the rights of the participant
      under such Award without such participant’s consent. Nothing in the preceding
      sentence shall be construed as limiting the power of the Board to make
      adjustments required by Sections 4(d) and 6(i) hereof or by applicable law.
      In
      the case of any Award intended to be eligible for the performance-based
      compensation exception under Section 162(m) of the Internal Revenue Code of
      1986, as amended (the “Code”),
      the
      Board will exercise its discretion consistent with qualifying the Award for
      that
      exception.

    


    The
      Board
      may, in its discretion, delegate some or all of its powers with respect to
      the
      Plan to a committee (the “Committee”),
      in
      which event all references (as appropriate) to the Board hereunder shall be
      deemed to refer to the Committee. 

    


    Determinations,
      interpretations and constructions made by the Board in good faith shall not
      be
      subject to review by any person and shall be final, binding and conclusive
      on
      all persons. 

    


    3.    EFFECTIVE
      DATE AND TERM OF PLAN

    


    The
      Board, including a "required majority" as defined in Section 57(o) of the 1940
      Act, adopted the Plan on December 11, 2006 and amended and restated the Plan
      on
      February 5, 2008. The Plan shall become effective on the date on which it is
      approved by the Shareholders of the Company; provided, however, that the Plan
      shall not be effective (i) with respect to awards of Restricted Shares unless
      the Company has received an order of the Commission under Sections 6(c),
      57(a)(4) and 57(i) of the 1940 Act and Rule 17d-1 under the 1940 Act; and (ii)
      with respect to awards of Dividend Equivalent Rights unless the Company has
      received an order of the Commission that permits such Award or grant (the
      "Effective
      Date").
      

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    No
      Awards
      shall be granted under the Plan after the completion of ten years from the
      date
      on which the Plan was adopted by the Board, but Awards previously granted may
      extend beyond that date.

    


    4.    SHARES
      SUBJECT TO THE PLAN

    


    (a) 
      Number
      of Shares.
      Subject
      to adjustment as provided in Section 4(d), the aggregate number of Shares that
      may be the subject of Awards granted under the Plan shall be 2,000,000. If
      any
      option Award granted under the Plan terminates without having been exercised
      in
      full, or upon exercise is satisfied other than by delivery of Shares, or if
      any
      Share Award is repurchased by the Company, the number of Shares as to which
      such
      Award was not exercised shall be available for future grants. 

    


    The
      maximum number of Shares for which any option Award may be granted to any person
      in any calendar year shall be 1,000,000. The maximum number of Shares that
      may
      be granted to any person under other Awards (if any and to the extent permitted
      under the 1940 Act) in any calendar year shall be 500,000. The foregoing
      provisions will be construed in a manner consistent with Section 162(m) of
      the
      Code (if applicable) and Section 61 of the 1940 Act.

    


    (b) 
      Shares
      to be Delivered.
      Shares
      delivered under the Plan shall be authorized but unissued Shares, or if the
      Board so decides in its sole discretion, previously issued Shares acquired
      by
      the Company and held in its treasury. Any Shares acquired by the Company will
      be
      acquired in accordance with the 1940 Act, including Section 23 of the 1940
      Act.
      No fractional Shares shall be delivered under the Plan. 

    


    (c)
      Limits
      on Number of Awards.
      The
      combined maximum amount of Restricted Stock that may be issued under the Plan
      will be 10% of the outstanding Shares on the effective date of the Plan, plus
      10% of the number of Shares issued or delivered by the Company (other than
      pursuant to compensation plans) during the term of the Plan. No one person
      shall
      be granted more than 25% of the Restricted Stock reserved for issuance under
      this Plan. The amount of voting securities that would result from the exercise
      of all of the Company's outstanding warrants, options and rights, together
      with
      any Restricted Shares issued pursuant to the Plan, at the time of issuance
      shall
      not exceed 25% of the outstanding voting securities of the Company, except
      that
      if the amount of voting securities that would result from the exercise of all
      the Company's outstanding warrants, options and rights issued to the Company's
      directors, officers and employees, together with any Restricted Shares issued
      pursuant to the Plan, would exceed 15% of the outstanding voting securities
      of
      the Company, the total amount of voting securities that would result from the
      exercise of all outstanding warrants, options and rights, together with any
      Restricted Shares issued pursuant to the Plan, at the time of issuance shall
      not
      exceed 20% of the outstanding voting securities of the Company. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) 
      Changes
      in Shares.
      In the
      event of a Share dividend, Share split or combination of Shares,
      recapitalization, or other change in the Shares, the number and kind of Shares
      or securities of the Company subject to Awards then outstanding or subsequently
      granted under the Plan, the exercise price of such Awards, the maximum number
      of
      Shares or securities that may be delivered under the Plan, and other relevant
      provisions shall be appropriately adjusted by the Board, whose determination
      shall be binding on all persons.

    


    The
      Board
      may also adjust the number of Shares subject to outstanding Awards, the exercise
      price of outstanding Awards, and the terms of outstanding Awards, to take into
      consideration material changes in accounting practices or principles,
      extraordinary dividends, consolidations or mergers (except those described
      in
      Section 6(i)), acquisitions or dispositions of securities or property, or any
      other event if it is determined by the Board that such adjustment is appropriate
      to avoid distortion in the operation of the Plan; provided, however, that the
      exercise price of options granted under the Plan will not be adjusted unless
      the
      Company receives an exemptive order from the Commission or written confirmation
      from the staff of the Commission that the Company may do so. References in
      the
      Plan to Shares will be construed to include any units, any stock or any other
      securities resulting from an adjustment pursuant to this Section
      4(d).

    


    5.    AWARDS;
      ETC.

    


    Persons
      eligible to receive Awards under the Plan (“Eligible
      Persons”)
      shall
      be those key employees and officers of the Company and, to the extent permitted
      by exemptive or other relief that may be granted by the Commission or its staff,
      employees of wholly-owned consolidated subsidiaries of the Company who, in
      the
      opinion of the Board, are in a position to make a significant contribution
      to
      the success of the Company and its subsidiaries. A subsidiary for purposes
      of
      the Plan shall be a corporation, limited liability company or other entity
      in
      which the Company owns, directly or indirectly, equity securities possessing
      50%
      or more of the total combined voting power of all classes of equity securities.
      Notwithstanding the foregoing, in the case of an Award that is an incentive
      option, an Eligible Person shall only be those employees of the Company or
      of a
“parent corporation” or “subsidiary corporation” of the Company as those terms
      are defined in Section 424 of the Code.

    


    In
      the
      case of an Award of Restricted Shares (to the extent such Awards are permitted
      by exemptive relief or other relief that may be granted by the Commission or
      its
      staff) that is intended to qualify as performance-based for the purposes of
      Section 162(m) of the Code, the Plan and such Award will be construed to the
      maximum extent permitted by law in a manner consistent with qualifying the
      Award
      for such exception. With respect to such Awards, the Board will pre-establish,
      in writing, one or more specific Performance Criteria no later than 90 days
      after the commencement of the period of service to which the performance relates
      (or at such earlier time as is required to qualify the Award as
      performance-based under Section 162(m) of the Code). The Performance Criteria
      so
      established shall serve as a condition to either the grant of the Award or
      the
      vesting of Shares subject to the Award, as determined by the Board. Prior to
      grant or vesting, as the case may be, the Board will certify whether the
      Performance Criteria have been attained and such determination will be final
      and
      conclusive. If the Performance Criteria with respect to the Award are not
      attained, no other Award will be provided in substitution. No Award of
      Restricted Shares that is intended to qualify as performance-based for the
      purposes of section 162(m) of the Code may be granted after the first meeting
      of
      the Shareholders of the Company held in 2010 until the Performance Criteria
      have
      been resubmitted to and reapproved by the Shareholders of the Company in
      accordance with the requirements of Section 162(m) of the Code, unless such
      grant is made contingent upon such approval.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.    TERMS
      AND
      CONDITIONS OF AWARDS 

    


    (a)
      Code
      Section 409A Exemption.
      Except
      as the Board otherwise determines, no option shall have deferral features,
      or
      shall be administered in a manner, that would cause such option to fail to
      qualify for exemption from Section 409A of the Code. Any option resulting in
      a
      deferral of compensation subject to Section 409A of the Code shall be construed
      to the maximum extent possible, as determined by the Board, consistent with
      the
      requirements of Section 409A of the Code.

    


    (b)
      Exercise
      Price of Options.
      The
      exercise price of each option shall be determined by the Board. The
      exercise price of an option will not be less than the current market value
      of,
      or if no such market value exists, the current net asset value of, the Shares
      as
      determined in good faith by the Board on the date of grant. Current market
      value
      shall be the closing price of the Common Stock on the NASDAQ Global Select
      Market on the date of grant.

    


    (c)
      Duration
      of Options.
      An
      option shall be exercisable during such period or periods as the Board may
      specify. The latest date on which an option may be exercised (the “Expiration
      Date”)
      shall
      be the date that is ten years from the date the option was granted or such
      earlier date as may be specified by the Board at the time the option is
      granted.

    


    (d)
      Exercise
      of Options.

    


    
      	 	
              (1)

            	
              An
                option shall vest or become exercisable at such time or times and
                upon
                such conditions as the Board shall specify. In the case of an option
                not
                immediately exercisable in full, the Board may at any time accelerate
                the
                time at which all or any part of the option may be exercised regardless
                of
                any adverse or potentially adverse tax consequences resulting from
                such
                acceleration.

            


    

    


    
      	 	
              (2)

            	
              Any
                exercise of an option shall be in writing, signed by the proper person
                and
                furnished to the Company, accompanied by (i) such documents as may
                be
                required by the Board and (ii) payment in full as specified below in
                Section 6(e) for the number of Shares for which the option is
                exercised.

            


    

    


    
      	 	
              (3)

            	
              The
                Board shall have the right to require that the participant exercising
                the
                option remit to the Company an amount sufficient to satisfy any federal,
                state, or local withholding tax requirements (or make other arrangements
                satisfactory to the Company with regard to such taxes) arising in
                connection with the exercise of the option. If permitted by the Board
                and
                to the extent permitted under the 1940 Act, either at the time of
                the
                grant of the option or in connection with exercise, the participant
                may
                elect, at such time and in such manner as the Board may prescribe,
                to
                satisfy such withholding obligation by (i) delivering to the Company
                Shares owned by such individual having a fair market value equal
                to such
                withholding obligation, or (ii) requesting that the Company withhold
                from
                the Shares to be delivered upon the exercise a number of Shares having
                a
                fair market value equal to such withholding
                obligation.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (4)

            	
              If
                an option is exercised by the executor or administrator of a deceased
                participant, or by the person or persons to whom the option has been
                transferred by the participant’s will or the applicable laws of descent
                and distribution, the Company shall be under no obligation to deliver
                Shares pursuant to such exercise until the Company is satisfied as
                to the
                authority of the person or persons exercising the
                option.

            


    

    


    (e)
      Payment
      for and Delivery of Shares.
      Shares
      purchased upon exercise of an option under the Plan shall be paid for as
      follows: (i) in cash, check acceptable to the Company (determined in accordance
      with such guidelines as the Board may prescribe), or money order payable to
      the
      order of the Company, or (ii) if so permitted by the Board (which, in the case
      of an incentive option, shall specify such method of payment at the time of
      grant) and to the extent permitted by the 1940 Act and otherwise legally
      permissible, (A) by delivery of an unconditional and irrevocable undertaking
      by
      a broker to deliver promptly to the Company sufficient funds to pay the exercise
      price, or (B) by any combination of the permissible forms of payment.


    


    (f)
      Delivery
      of Shares.
      A
      participant shall not have the rights of a Shareholder with regard to Awards
      under the Plan except as to Shares actually received by him or her under the
      Plan.

    


    (g)
      Dividend
      Equivalents, Etc.
      To the
      extent permitted under the 1940 Act, the Board may provide for the payment
      of
      amounts in lieu of cash dividends or other cash distributions with respect
      to
      Shares subject to an Award; provided, however, that such grants must be approved
      by order of the Commission. 

    


    (h)
      Nontransferability
      of Awards.
      No
      option, Share, or other Award may be transferred other than by will or by the
      laws of descent and distribution, and during a participant’s lifetime an Award
      may be exercised only by him or her.

    


    (i)
      Mergers,
      etc.
      To the
      extent permitted under the 1940 Act, the following provisions shall apply in
      the
      event of a Covered Transaction (as defined below).

    


    
      	 	
              (1)

            	
              Subject
                to subparagraph (2) below, all outstanding Awards requiring exercise
                will
                terminate and cease to be exercisable, and all other Awards to the
                extent
                not fully vested (including Awards subject to conditions not yet
                satisfied
                or determined) will be forfeited, as of the effective time of the
                Covered
                Transaction (as defined in subparagraph (3) herein), provided
                that the Board may in its sole discretion on or prior to the effective
                date of the Covered Transaction take any (or any combination of)
                the
                following actions: (i) make any outstanding option exercisable in
                full,
                (ii) remove any performance or other conditions or restrictions on
                any
                Award and (iii) in the event of a Covered Transaction under the terms
                of
                which holders of the Shares of the Company will receive upon consummation
                thereof a payment for each such Share surrendered in the Covered
                Transaction (whether cash, non-cash or a combination of the foregoing),
                make or provide for a payment (with respect to some or all of the
                Awards),
                to the participant equal in the case of each affected Award to the
                difference between (A) the fair market value of a Share times the
                numbers
                of Shares subject to such outstanding Award (to the extent then
                exercisable at prices not in excess of the fair market value) and
                (B) the
                aggregate exercise price of all Shares subject to such outstanding
                Award,
                in each case on such payment terms (which need not be the same as
                the
                terms of payment to holders of Shares) and other terms, and subject
                to
                such conditions, as the Committee determines;
                or

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (2)

            	
              With
                respect to an outstanding Award held by a participant who, following
                the
                Covered Transaction, will be employed by or otherwise providing services
                to an entity which is a surviving or acquiring entity in the covered
                transaction or any affiliate of such an entity, the Board may at
                or prior
                to the effective time of the Covered Transaction, in its sole discretion
                and in lieu of the action described in subparagraph (1) above, arrange
                to
                have such surviving or acquiring entity or affiliate assume any Award
                held
                by such participant outstanding hereunder or grant a replacement
                Award
                which, in the judgment of the Board is substantially equivalent to
                any
                Award being replaced.

            


    

    


    
      	 	
              (3)

            	
              For
                purposes of this Section 6(i), a “Covered
                Transaction”
                is a (i) Share sale, consolidation, merger, or similar transaction
                or
                series of related transactions in which the Company is not the surviving
                corporation or which results in the acquisition of all or substantially
                all of the Company’s then outstanding Shares by a single person or entity
                or by a group of persons and/or entities acting in concert; (ii)
                a sale or
                transfer of all or substantially all the Company’s assets, or (iii) a
                dissolution or liquidation of the Company. Where a Covered Transaction
                involves a tender offer that is reasonably expected to be followed
                by a
                merger described in clause (i) (as determined by the Board), the
                Covered
                Transaction shall be deemed to have occurred upon consummation of
                the
                tender offer.

            


    

    


    (j)
      No
      Grants in Contravention of the 1940 Act. At
      all
      times during such periods as the Company qualifies or intends to qualify as
      a
“business development company,” no Award may be granted under the Plan if the
      grant or terms of such Award would cause the Company to violate Section 61
      of
      the 1940 Act (or any other provision of the 1940 Act applicable to “business
      development companies”), and, if approved for grant, such an Award will be void
      and of no effect.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.    TERMINATION
      OF EMPLOYMENT

    


    (a)
      Unless the Board expressly provides otherwise, immediately upon the cessation
      of
      the participant’s employment or services an Award requiring exercise will cease
      to be exercisable and will terminate, and all other Awards to the extent not
      already vested will be forfeited, except that:

    


    
      	 	
              (1)

            	
              subject
                to (2) and (3) below, all vested options held by the participant
                immediately prior the cessation of the participant’s employment, to the
                extent then exercisable, will remain exercisable for the less of
                (i) a
                period of 90 days or (ii) the period ending on the latest date on
                which
                such option could have been exercised without regard to this Section
                7(a)(1), and will thereupon
                terminate;

            


    

    


    
      	 	
              (2)

            	
              all
                vested options held by a participant immediately prior to the
                participant’s death, to the extent then exercisable, will remain
                exercisable for the lesser of (i) the 180 day period ending following
                the
                participant’s death or (ii) the period ending on the latest date on which
                such option could have been exercised without regard to this Section
                7(a),
                and will thereupon terminate;

            


    

    


    
      	 	
              (3)

            	
              all
                options (whether or not vested) held by a participant immediately
                prior to
                the cessation of the participant’s employment for “Cause” will immediately
                terminate; for this purpose, “Cause”
                shall have the same meaning as provided in the employment agreement
                between the participant and the Company or its Affiliate, provided
                that if
                the participant is not a party to any such agreement, “Cause” shall mean
                (i) the participant’s chronic alcoholism or drug addiction; (ii) fraud,
                embezzlement, theft, dishonesty, or any deliberate misappropriation
                of any
                material amount of money or other assets or property of the Company
                or any
                of its Affiliates by the paragraph; (iii) willful failure to perform,
                or
                gross negligence in the performance of, the participant’s duties and
                responsibilities to the Company and its Affiliates; (iv) the participant’s
                material breach of any agreement between the participant and the
                Company
                or its Affiliates except where the breach is caused by incapacity
                or
                disability of the participant; (v) charge, indictment or conviction
                of, or
                plea of nolo contendere by, the participant to a felony or other
                crime
                involving moral turpitude; (vi) the participant’s material breach of his
                fiduciary duties as an officer, trustee, or director of the Company
                or any
                of its Affiliates; (vii) the participant’s willful refusal or failure to
                carry out a lawful and reasonable written directive of the Board
                or its
                designee, which failure or refusal does not cease within fifteen
                (15) days
                after written notice of such failure is given to the participant
                by the
                Company; or (viii) the participant willful misconduct which has,
                or could
                be reasonably expected to have, a material adverse effect upon the
                business, interests or reputation of the Company or any of its Affiliates;
                and

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (4)

            	
              Except
                as otherwise provided in an Award, after completion of the 90-day
                (or
                180-day) period, such Awards shall terminate to the extent not previously
                exercised, expired, or terminated. 

            


    

    


    No
      option
      shall be exercised or surrendered in exchange for a cash payment after the
      Expiration Date.

    


    (b) In
      particular but not in limitation of the foregoing, the Board may provide in
      the
      case of any Award for post-termination exercise provisions different from those
      expressly set forth in this Section 7, including without limitation terms
      allowing a later exercise by a former employee (or, in the case of a former
      employee who is deceased, the person or persons to whom the Award is transferred
      by will or the laws of descent and distribution) as to all or any portion of
      the
      Award not exercisable immediately prior to termination of employment or other
      service, but in no case may an Award be exercised after the Expiration
      Date.

    


    8.    EMPLOYMENT
      RIGHTS

    


    Neither
      the adoption of the Plan nor the grant of Awards shall confer upon any
      participant any right to continue as an employee of the Company, its parent,
      or
      any subsidiary or affect in any way the right of the Company, its parent, or
      a
      subsidiary to terminate the participant’s relationship at any time. Except as
      specifically provided by the Board in any particular case, the loss of existing
      or potential profit in Awards granted under this Plan shall not constitute
      an
      element of damages in the event of termination of the relationship of a
      participant even if the termination is in violation of an obligation of the
      Company to the participant by contract or otherwise.

    


    9.    DISCONTINUANCE,
      CANCELLATION, AMENDMENT, AND TERMINATION

    


    The
      Board
      may at any time or times amend the Plan or any outstanding Award for any purpose
      which may at the time be permitted by law, and may at any time terminate the
      Plan as to any future grants of Awards; provided
      that,
      except as otherwise expressly provided in the Plan the Board may not, without
      the participant’s consent, alter the terms of an Award so as to affect adversely
      the participant’s rights under the Award, unless the Board expressly reserved
      the right to do so at the time of the Award. Any amendments to the Plan shall
      be
      conditioned upon Shareholder approval only to the extent, if any, such approval
      is required by law (including the Code), as determined by the
      Board.

    


    10.    LIMITATION
      OF LIABILITY 

    


    Notwithstanding
      anything to the contrary in the Plan, neither the Company, any subsidiary,
      nor
      the Board, nor any person acting on behalf of the Company, any subsidiary,
      or
      the Board, shall be liable to any participant or to the estate or beneficiary
      of
      any participant or to any other holder of an option by reason of any
      acceleration of income, or any additional tax, asserted by reason of the failure
      of an option to satisfy the requirements of Section 409A or by reason of Section
      4999 of the Code; provided, that nothing in this Section 10 shall limit the
      ability of the Board to provide by separate express written agreement with
      a
      participant for a gross-up payment or other payment in connection with any
      such
      tax or additional tax.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.    WAIVER
      OF
      JURY TRIAL

     

    By
      accepting an Award under the Plan, each participant waives any right to a trial
      by jury in any action, proceeding or counterclaim concerning any rights under
      the Plan and any Award, or under any amendment, waiver, consent, instrument,
      document or other agreement delivered or which in the future may be delivered
      in
      connection therewith, and agrees that any such action, proceedings or
      counterclaim shall be tried before a court and not before a jury. By accepting
      an Award under the Plan, each participant certifies that no officer,
      representative, or attorney of the Company has represented, expressly or
      otherwise, that the Company would not, in the event of any action, proceeding
      or
      counterclaim, seek to enforce the foregoing waivers.

    


    12.    LEGAL
      CONDITIONS ON DELIVERY OF SHARES

    


    The
      Company will not be obligated to deliver any Shares pursuant to the Plan or
      to
      remove any restriction from Shares previously delivered under the Plan until:
      (i) the Company is satisfied that all legal matters in connection with the
      issuance and delivery of such Shares have been addressed and resolved; (ii)
      if
      the outstanding Shares are at the time of delivery listed on any stock exchange
      or national market system, the Shares to be delivered have been listed or
      authorized to be listed on such exchange or system upon official notice of
      issuance; and (iii) all conditions of the Award have been satisfied or waived.
      If the sale of Shares has not been registered under the Securities Act of 1933,
      as amended (the “Securities
      Act”),
      the
      Company may require, as a condition to exercise of the Award, such
      representations or agreements as counsel for the Company may consider
      appropriate to avoid violation of the Securities Act. The Company may require
      that certificates evidencing Shares issued under the Plan bear an appropriate
      legend reflecting any restriction on transfer applicable to such Shares, and
      the
      Company may hold the certificates pending lapse of the applicable
      restrictions.