ex10-11.htm

Exhibit 10.11

    

      DEER
        VALLEY CORPORATION

      2007
        LONG TERM INCENTIVE PLAN

       

      SECTION
        1

      GENERAL

       

      1.1           Purpose.  The
        Deer Valley Corporation 2007 Long Term Incentive Plan (the
“Plan”) has been established by Deer Valley Corporation (the
        “Company”) to (i) attract and retain key management employees
        who are expected to make significant contributions to the success of the
        Company; (ii) motivate such key employees, by means of appropriate incentives,
        to achieve the Company’s long-range goals; (iii) provide incentive compensation
        opportunities that are competitive with those of other similar companies;
        (iv)
        provide incentive awards to its directors; and (v) further align such key
        employees’ and directors’ interests with those of the Company’s other
        shareholders, and thereby promote the long-term financial interests of the
        Company, including the growth in value of the Company’s equity and enhancement
        of long-term shareholder return.  Unless otherwise defined herein, all
        capitalized terms are defined in Section 8 herein.

       

      1.2           Participation.  Subject
        to the terms and conditions of the Plan, the Committee shall determine and
        designate, from time to time, from among the Eligible Employees or Eligible
        Directors or Consultants, those persons who will be granted one or more Awards
        under the Plan, and thereby become “Participants” or a
“Participant” in the Plan.  In the discretion of the
        Committee, a Participant may be granted any Award permitted under the provisions
        of the Plan and more than one Award may be granted to each
        Participant.  Awards may be granted as alternatives to or replacement
        of awards outstanding under the Plan, or any other plan or arrangement of
        the
        Company or a Related Company (including a plan or arrangement of a business
        or
        entity, all or a portion of which is acquired by the Company or a Related
        Company).

       

      Incentive
        Stock Option grants must be
        restricted to employees of the Company.  A Consultant shall not be
        eligible for the grant of a Stock Award if, at the time of grant, the Company
        concludes that a Form S-8 Registration Statement is not available to register
        the offer or sale of the Company’s securities to such Consultant under the
        Securities Act due to the nature of the services that the Consultant is
        providing to the Company, or because of any other rule governing the use
        of Form
        S-8.

       

      1.3           Name
        of Plan.  The name of this Plan shall be
        known as the Deer Valley Corporation 2007 Long Term Incentive Plan.

       

      1.4           Administration.

       

      (a)           Board
        Authority.  Although the Board has ultimate
        responsibility for administering the Plan, the Board has delegated the tasks
        of
        operating, administering and performing its duties under the Plan to the
        Committee.  Where this Plan specifies that an action is to be taken by
        the Board, only the Board may take that action or make that
        determination.  Where the Plan specifies that action is to be taken by
        the Committee, only the Committee may take that action or make that
        determination; provided that, if the Committee cannot act or make a
        determination, then the Board shall also be entitled to take such action
        or make
        such determination.  Only the Board or Committee may approve grants of
        Awards to executive officers or a Covered Employee.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (b)           Authority
        of Committee.  Subject to the express provisions of the
        Plan, the Committee has the authority to interpret the Plan; determine
        eligibility for and grant Awards; determine what type or combination of types
        of
        Awards may be granted; determine, modify or waive the terms and conditions
        of
        any Award (which need not be identical); determine the time or times at and
        which the conditions upon which the Awards may be exercised or become vested;
        prescribe forms, rules and procedures (which it may modify or waive); determine
        the times Awards are granted; provide Awards to employees of subsidiary
        corporations or non-U.S. citizens that are employed by the Company or a Related
        Company; determine whether, to what extent and under what circumstances Awards
        may be settled, paid or exercised in cash, shares, other securities, or other
        methods of payments that may be used to purchase shares or other property,
        or
        cancelled, forfeited or suspended; determine whether a transaction or event
        should be treated as a Change of Control, as well as the effect of a Change
        of
        Control; and otherwise do all things necessary to implement the
        Plan.

       

      Once
        a written agreement evidencing an
        Award hereunder has been executed by the Participant and approved by the
        Committee, the Committee may not, without the Participant’s consent, alter the
        terms of the Award so as to affect adversely the Participant’s rights under the
        Award, unless the Committee expressly reserved the right to do so in writing
        at
        the time of such delivery.  Subject to the rights under any existing
        Award, the Committee may modify, change, amend or cancel any Award to correct
        an
        administrative error.  The Board, in the exercise of this power, may
        correct any defect, omission or inconsistency in the Plan or in any Stock
        Award,
        in a manner and to the extent it shall deem necessary or expedient to make
        the
        Plan fully effective.

       

      In
        the case of any Award intended to be
        eligible for the performance-based compensation exception under Section 162(m)
        of the Code, the Board may modify the terms of the Plan or may create one
        or
        more subplans, in each case on such terms as it deems necessary or appropriate;
        provided, however, that no such action by the Board shall increase the total
        number of Shares issuable hereunder.  Except for the power to amend
        the Plan and except for determinations regarding Participants who are subject
        to
        Section 16 of the Exchange Act, and except as may otherwise be required under
        applicable listing standards for an exchange on which the Company’s common stock
        may be listed, the Board may delegate any or all of its duties, powers and
        authority under the Plan, pursuant to such conditions or limitations as the
        Board may establish to any officer or officers of the Company.

       

      1.5           Conditions
        on Awards.  The Committee shall have the discretion with
        respect to any Award granted under the Plan to establish upon its grant
        conditions under which (i) the Award may be later forfeited, canceled,
        rescinded, suspended, withheld or otherwise limited or restricted; or (ii)
        gains
        realized by the grantee in connection with an Award or an Award’s exercise may
        be recovered; provided that such conditions and their consequences
        are:

       

      (a)           clearly
        set forth in the grant agreement or other grant document; and

       

      (b)           fully
        comply with applicable laws.

       

      The
        Committee shall also be authorized to impose conditions that include, without
        limitation, refraining from undertaking actions which constitute a conflict
        of
        interest with the Company, or are prejudicial to the Company’s interests, or are
        in violation of any non-compete agreement or obligation, any confidentiality
        agreement or obligation, the Company’s applicable policies, its code
        of
        ethics (as in effect from time to time), or the terms and conditions of
        employment under an applicable employment or contractor
        agreement.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      The
        Committee shall also be authorized
        to impose such restrictions, conditions or limitations as it determines
        appropriate as to the timing and manner of any resales by a Participant or
        other
        subsequent transfers by the Participant of any shares of common stock issued
        as
        a result of or under a Stock Award, including, without limitation, (i)
        restrictions under an insider trading policy and (ii) restrictions as to
        the use
        of a specified brokerage firm for such resales or other transfers.

       

      1.6           Effect
        of Committee’s Decision.  All
        determinations, interpretations and constructions made by the Committee in
        good
        faith shall not be subject to review by any person and shall be final, binding
        and conclusive on all persons.  In carrying out the administration of
        the Plan, the Committee shall be authorized to designate Awards as an Incentive
        Stock Option or Non-Qualified Stock Option and whether the terms and conditions
        of an Award have been met and whether the Award or shares are subject to
        forfeiture or cancellation.  The Committee shall also be authorized to
        determine the form of any Award, agreement or other document related to this
        Plan and whether that document, including signatures, may be in electronic
        form.

       

      1.7           Composition
        of Committee. So long as the Company has
        registered and outstanding a class of equity securities under Section 12
        of the
        Exchange Act, the Committee shall consist solely of two or more Outside
        Directors, in accordance with Section 162(m) of the Code and/or solely of
        two or
        more Non-Employee Directors, in accordance with Rule 16b-3 of the Exchange
        Act.  If the Company’s shares are listed on a stock exchange, the
        Company shall appoint Committee members that comply with the listing rules
        and
        regulations of such stock exchange.

       

      1.8           Non-exclusivity
        of this Plan.  This Plan shall not limit
        the power of the Company or any Related Company to adopt other incentive
        arrangements including, for example, the grant or issuance of stock options,
        stock or other equity-based rights under other plans or compensation
        arrangements approved by the Company.

       

      1.9           Unfunded
        Plan. This Plan shall be
        unfunded.  Although bookkeeping accounts may be established with
        respect to Participants, any such accounts will be used merely as a
        convenience.  The Company shall not be required to segregate any
        assets on account of this Plan, the grant of Awards, or the issuance of
        Shares.  The Company shall not be deemed to be a trustee of stock or
        cash to be awarded under this Plan.  Any obligations of the Company to
        any Participant shall be based solely upon contracts entered into under this
        Plan, such as an Award Agreement or Option Agreement.  No such
        obligations shall be deemed to be secured by any pledge or other encumbrance
        on
        any assets of the Company.  Neither the Company nor the Committee
        shall be required to give any security or bond for the performance of any
        such
        obligations.

       

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SECTION
          2

        OPTIONS


      

                     
        2.1           Definitions.  The
        grant of an “Option” entitles the Participant to purchase
        Shares at an exercise price established by the Committee.  Options
        granted under this Section 2 may be either Incentive Stock Options or
        Non-Qualified Stock Options, as determined in the discretion of the Committee
        and as designated at the time of grant.  An “Incentive Stock
        Option” is an Option that is intended to satisfy the requirements
        applicable to an “incentive stock option” described in Section 422(b) of the
        Code.  A “Non-Qualified Option” is an Option that is
        not intended to be an “incentive stock option”, as that term is described in
        Section 422 (b) of the Code.

       

      2.2           Exercise
        Price.  The “Exercise
        Price” of each Option granted under this Section 2 shall be established
        by the Committee or shall be determined by a method established by the Committee
        at the time the Option is granted; provided that the Exercise Price for any
        Incentive Stock Option shall not be less than ONE HUNDRED PERCENT (100%)
        of the
        Fair Market Value of a Share as of the Pricing Date (or, in the case of a
        Ten
        Percent Shareholder, the exercise price shall not be less than ONE HUNDRED
        TEN
        PERCENT (110%) of the Fair Market Value of a Share as of the Pricing
        Date).  For purposes of the preceding sentence, the “Pricing
        Date” shall be the date on which the Option is granted, except that the
        Committee may provide that: (i) the Pricing Date is the date on which the
        Committee specifies in the future will be the Pricing Date or the date on
        which
        a condition is satisfied if the Award is subject to the satisfaction of such
        condition; and (ii) if an Option is granted in tandem with, or in substitution
        for, an outstanding Award, the Pricing Date shall be the date of grant of
        such
        outstanding Award.

       

      2.3           Expiration
        Date.  The “Expiration
        Date” with respect to an Option means the date the Option is deemed to
        expire, as determined by the Committee at the time of the grant; provided,
        however, that the Expiration Date with respect to any Incentive Stock Option
        shall not be later than the earliest to occur of:

       

      (a)           the
        ten-year anniversary of the date on which the Option is granted;

       

      (b)           if
        the Participant’s date of termination occurs by reason of death or disability,
        the one-year anniversary of such date of termination;

       

      (c)           if
        the Participant’s date of termination occurs by reason of retirement, the one
        year anniversary of such date of termination;

       

      (d)           if
        the Participant’s date of termination occurs for reasons other than retirement,
        death or disability, the 90-day anniversary of such date of termination;
        subject, however, to the terms of the applicable option agreement approved
        by
        the Committee;

       

      (e)           if
        the Participant dies while the Option is otherwise exercisable, the Expiration
        Date may be later than the dates set forth above, provided that it is not
        later
        than the first anniversary of the date of death; and

       

      (f)           For
        any Incentive Stock Option that is granted to a Ten Percent Shareholder,
        the
        term of the Option may not exceed five years.

       

      2.4           Award
        Limits.  Although Incentive Stock Options may be granted
        only to employees, Non-Qualified Stock Options may be granted to directors,
        employees and consultants of the Company.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      2.5           Other
        Restrictions.  Incentive Stock Options
        and Non-Qualified Stock Options may be granted under the Plan in such numbers,
        at such prices and on such terms and conditions as the Committee shall
        determine, including the cancellation of existing options and issuance of
        a
        replacement option, provided that such options shall comply with and be subject
        to the following terms and conditions:

       

      (a)           Annual
        Grant Limitation.  No Participant shall be granted an
        Incentive Stock Option to the extent that the aggregate Fair Market Value
        of
        Shares made subject to such option (determined as of the date such option
        is
        granted) which are exercisable for the first time by an option holder during
        any
        one calendar year exceeds the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000),
        or
        such other limit as may be set by applicable law (the “Limitation
        Amount”).  Incentive Stock Options granted under the Plan and
        all other plans of the Company or affiliated entity shall be aggregated for
        purposes of determining whether the Limitation Amount has been
        exceeded.  The Committee may impose such conditions as it deems
        appropriate on an Incentive Stock Option to ensure that the foregoing
        requirement is met.  If any Incentive Stock Options that are granted
        under the Plan have an aggregate Fair Market Value that exceeds the Limitation
        Amount, the excess Options (according to the order in which they were granted)
        will be treated as Non-Qualified Stock Options to the extent permitted by
        law.

       

      (b)           Option
        Agreement.  All options granted under the Plan shall be
        evidenced by a written option agreement stating the number of Shares capable
        of
        being purchased upon its exercise and otherwise in such form as the Committee
        may periodically approve and containing such terms and conditions, including
        the
        period of exercise and whether in installments or otherwise, as shall be
        contained therein, which need not be the same for all options.

       

      (c)           Date
        of Grant.  The date on which an option grant is approved
        by the Committee shall be considered the date on which such option is granted
        (the “Date of Grant”), and shall be reflected in the option
        agreement.  All options under this Plan shall be granted within 10
        years of the date this Plan is adopted.

       

      (d)           Exercise
        Price.  Each option agreement shall state the purchase
        price of each Share capable of being acquired upon exercise of the option,
        which
        price shall be determined by the Committee with respect to each Option granted;
        provided that for any Incentive Stock Options granted under the Plan, the
        exercise price shall not be less than ONE HUNDRED PERCENT (100%) of the Fair
        Market Value of each such Share on the Date of Grant (or, in the case of
        any
        optionholder owning more than ten percent of the voting power of all classes
        of
        stock of the Company, not less than ONE HUNDRED AND TEN PERCENT (110%) of
        the
        Fair Market Value of the Shares on the Date of Grant).  In the event
        that Share prices are not published for the Date of Grant, such value shall
        be
        determined in accordance with such rules as may be established by the
        Committee.

       

      (e)           Option
        Exercise.  All options granted under the Plan become
        exercisable at such times and in such installments (which may be cumulative)
        as
        the Committee shall provide in the terms of each individual
        option.  All Options that have become exercisable from time to time
        may be exercised in whole or in part in accordance with the terms of the
        applicable option agreement; provided, however, that the Committee shall
        be
        authorized to require that any partial
        exercise be with respect to a minimum number of Shares.  No Option may
        have an expiration date that is more than ten years after its date of
        grant.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (f)           Forfeiture
        or Exercise of Option.  In the event that a Participant
        receiving Incentive Stock Options ceases his or her continuous service with
        the
        Company due to retirement, death, disability or other reason, all options
        shall
        be forfeited or exercised, as follows:

       

      (1)           In
        the event of a Participant’s termination of continuous service for reasons other
        than retirement, death or disability, any options that are not vested will
        be
        forfeited immediately in accordance with the terms of each option agreement
        and
        any Vested Option must be exercised before the 90-day anniversary of the
        date of
        termination (or such period of exercise that the terms of the applicable
        option
        agreement may permit).

       

      (2)           Upon
        the disability of a Participant, the Participant’s Vested Options shall be
        exercisable within one year (or such shorter period as the Code or the period
        of
        exercise that the terms of the applicable option agreement may permit) of
        the
        Participant’s date of disability.

       

      (3)           If
        the Participant dies while in the continuous service of the Company, the
        Participant’s estate, personal representative, or designated beneficiary shall
        have the right to exercise such Vested Options within one year of the
        Participant’s death (or such shorter period as the Code or period of exercise
        that the terms of the applicable option agreement may permit).

       

      (4)           Upon
        the retirement of a Participant, the Participant’s Vested Options must be
        exercised within one year (or such shorter period as the Code or period of
        exercise that the terms of the applicable option agreement may permit) of
        the
        Participant’s date of retirement.

       

      (5)           If
        the Participant is granted an Incentive Stock Option and changes his or her
        status to a Consultant, the Option will become a Non-Qualified Stock Option
        if
        the Option is not exercised within the three-month period beginning with
        the
        date of termination of employment with the Company for any reason other than
        death or disability (as defined in Section 22(e) of the Code).

       

      (g)           Mechanics
        of Exercise.  A person entitled to exercise any portion
        of an option granted under the Plan may exercise the same at anytime, either
        in
        whole or in part, by delivering written notice of exercise to the office
        of the
        Secretary of the Company or to such other location as may be designated by
        the
        Committee, specifying therein the number of Shares with respect to which
        the
        option is being exercised, which notice shall be accompanied by payment in
        full
        of the purchase price of the Shares being acquired.  If any adjustment
        has been effected so as to establish a right by an optionholder to acquire
        a
        fractional share, such fraction shall be rounded upward to the next whole
        number.

       

      (h)           Payment
        of Exercise Price.  The Committee may determine, in its
        sole discretion, the required or permitted forms of payment to purchase Shares
        upon exercise of an Option, subject to the following: (i) payment may be
        made
        wholly or partly in cash; (ii) through the delivery of Shares which have
        been
        outstanding for at least six months (unless the Committee approves a shorter
        period) and which have a Fair Market Value equal to the exercise price at
        the
time
        of
        exercise; (iii) by delivery of an unconditional and irrevocable undertaking
        by a
        licensed broker-dealer to deliver promptly to the Company sufficient funds
        to
        pay the exercise price and any tax withholding resulting from such exercise
        through a “cashless exercise” arrangement which permits the Participant to
        simultaneously exercise an option and sell the Shares thereby acquired and
        enable the third party to use the proceeds from such sale as payment for
        the
        exercise price of such option to the extent permitted by law; or (iv) by
        any
        combination of the foregoing permissible forms of payment.
         

        In
          no
          event shall a promissory note or other form of deferred consideration constitute
          a permissible form of payment.  If the Company extends or arranges for
          the extension of credit to a Participant under a cashless exercise procedure,
          no
          officer or director may participate in that cashless exercise
          procedure.

      

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      (i)           Investment
        Purpose.  Unless the Committee chooses to register or
        qualify the Shares under the Securities Act of 1933, as amended (the
“Act”), each option is granted on the express condition that
        the purchase of Shares upon an exercise thereof shall be made for investment
        purposes only and not with a view to their resale or further distribution
        unless
        such Shares, at the time of their issuance and delivery, are registered under
        the Act, or, alternatively, at some time following such issuance their resale
        is
        determined by counsel for the Company to be exempt from the registration
        requirements of the Act and of any other applicable law, regulation or
        ruling.  Any Shares so registered shall be promptly listed with each
        securities exchange through which any class of the Company’s capital stock or
        other securities are traded.

       

      (j)           Legal
        Conditions on Delivery of Shares.  The Company will not
        be obligated to deliver any Shares pursuant to the Plan or to remove any
        restrictions from Shares previously delivered under the Plan until the Company’s
        counsel has approved all legal matters in connection with the issuance and
        delivery of such Shares; if the Company’s 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 all conditions of the Award have been
        satisfied or waived.  If the sale of Shares has not been registered
        under the 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 such Act.  The Company may require
        that any certificates evidencing Shares issued under the Plan bear an
        appropriate legend reflecting any restriction on transfer applicable to such
        Shares.

       

      (k)           Vesting.  Each
        Option shall vest and become exercisable in accordance with the terms of
        the
        applicable option agreement.  All Incentive Stock Options granted
        under this Plan may not vest at a rate of not more than $100,000 in Fair
        Market
        Value of the Company’s shares (measured on the date of grant) during any
        calendar year.  For any Options that exceed this limitation, the
        excess options shall be treated as a Non-Qualified Stock Option.  The
        Committee shall be authorized to accelerate the exercise date of all or any
        part
        of the options granted to a Participant under the Plan.

       

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SECTION
        3

      OTHER
        STOCK AWARDS

       

      3.1           Definition.  A
        Stock Award is a grant of a right to receive Shares in the future, subject
        to
        the terms and conditions, including a risk of forfeiture, established by
        the
        Committee and shall be exercised in accordance with this Plan and the Award
        Agreement under which it is granted.

      3.2           Restricted
        Stock Awards.  Each Stock Award shall be subject to such
        conditions, restrictions and contingencies as the Committee shall
        determine.  These may include minimum vesting or service requirements
        and/or the achievement of certain Performance Measures.  The Committee
        may designate a single goal criterion or multiple goal standard  for
        performance measurement purposes, with the measurement based on individual
        or
        Company performance as compared with that of competitive companies, all at
        the
        discretion of the Committee.  Each such grant or sale may constitute
        an immediate transfer of the ownership of shares to the Participant in
        consideration of the performance of services, entitling such participant
        to
        voting, dividend and other ownership rights, but subject to the substantial
        risk
        of forfeiture and restrictions on transfer hereinafter referred to.

       

      3.3                      Other
        Terms and Conditions for Stock Awards.  If determined by
        the Committee, any Shares granted to a Participant under a Stock Award shall
        be
        represented by a stock certificate registered in the name of the Participant;
        provided, however, that:

       

      (a)           the
        Participant shall not be entitled to delivery of the stock certificate until
        any
        applicable vesting period during which certain restrictions established by
        the
        Committee shall have expired;

       

      (b)           the
        Company may either issue Shares subject to such restrictive legends and/or
        stop-transfer instructions as it deems appropriate or provide for retention
        of
        custody of the Shares during the applicable restriction period or vesting
        period
        imposed by the Committee under an Award;

       

      (c)           the
        Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
        dispose of the Shares during the applicable restriction period or vesting
        period, except that it may be transferred by assignment by the Participant
        to
        the extent provided in the applicable stock award agreement;

       

      (d)           a
        breach of the terms and conditions established by the Committee with respect
        to
        the Stock Award shall cause a forfeiture of the Stock Award, and any dividends
        withheld thereon;

       

      (e)           notwithstanding
        the foregoing, the Committee may provide in the applicable Award that no
        Shares
        be issued until the vesting or restriction period has lapsed and further
        determine whether the Shares will be issued in escrow and/or be legended
        and
        subject to restrictions including the forfeiture of all or a part of the
        Shares;

       

      (f)           Each
        such grant will provide that the Stock Award covered by such grant or sale
        will
        be subject to a “substantial risk of forfeiture” within the meaning of Section
        83 of the Code for a period of not less than one year to be determined by
        the
        Committee at the date of grant and may provide for the earlier lapse of such
        substantial risk of forfeiture in the event of a Change in Control;

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (g)           Each
        such grant will provide that during the period for which such substantial
        risk
        of forfeiture is to continue, the transferability of the Stock Award will
        be
        prohibited or restricted in the manner and to the extent prescribed by the
        Committee at the date of grant (which restrictions may include, without
        limitation, rights of repurchase or first refusal in the Company or provisions
        subjecting the Stock Award to a continuing substantial risk of forfeiture
        in the
        hands of any transferee);

       

      (h)           Any
        Stock Award may specify management objectives that, if achieved, will result
        in
        termination or early termination of the restrictions applicable to such Stock
        Award.  Each grant may specify in respect of such management
        objectives a minimum acceptable level of achievement and may set forth a
        formula
        for determining the number of shares on which restrictions will terminate
        if
        performance is at or above the minimum level, but fails short of full
        achievement of the specified management objectives;

       

      (i)           Any
        such grant of Shares may require that any or all dividends or other
        distributions paid thereon during the period of such restrictions be
        automatically deferred and reinvested in additional Shares, which may be
        subject
        to the same restrictions as the underlying award; and

       

      (j)           Each
        grant of restricted stock will be evidenced by an evidence of award and will
        contain such terms and provisions, consistent with this Plan, as the Committee
        may approve.  Unless otherwise directed by the Committee, all
        certificates representing shares of restricted stock will be held in custody
        by
        the Company until all restrictions thereon will have lapsed, together with
        a
        stock power or powers executed by the Participant in whose name such
        certificates are registered, endorsed in blank and covering such
        Shares.

       

      3.4           Payment
        for Stock Award.  A Participant shall not be required to
        make any payment for a Stock Award unless the Committee so
        requires.

       

      3.5           Forfeiture
        Provisions.  In the event that a Participant terminates
        employment before the vesting period or restriction period has been met or
        has
        lapsed, such Stock Award will be forfeited; provided, however, that the
        Committee may provide for the proration or full payout of a Stock Award in
        the
        event of:

       

      (a)           a
        termination of employment because of normal retirement;

       

      (b)           with
        the consent of the Committee;

       

      (c)           death;

       

      (d)           total
        and permanent disability, as determined by the Committee; or

       

      (e)           a
        Change of Control has occurred, all subject to any other conditions as the
        Committee may determine or provide in an applicable Stock Award
        agreement.

       

      3.6           Acceleration.  The
        Committee shall have the discretionary power to accelerate the date on which
        restrictions lapse with respect to any Stock Award that has been outstanding
        for
        at least one year.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      3.7           Performance
        Shares.  The Committee may also
        authorize the granting of Performance Shares that will become payable to
        a
        Participant upon achievement of specified management objectives.  Each
        such grant may utilize any or all of the authorizations, and will be subject
        to
        all of the requirements, contained in the following provisions:

       

      (a)           Number
        of Shares.  Each grant will specify the
        number of Performance Shares to which it pertains, which number may be subject
        to adjustment to reflect changes in compensation or other factors; provided,
        however, that no such adjustment will be made in the case of a Participant
        where
        such action would result in the loss of the otherwise available exemption
        of the
        award under Section 162(m) of the Code.

       

      (b)           Performance
        Period.  The performance period with
        respect to each Performance Share will be such period of time (not less than
        two
        years), commencing with the date of grant as will be determined by the Committee
        at the time of grant which may be subject to earlier lapse or other
        modifications in the event of a Change in Control.

       

      (c)           Performance
        Measures.  Any grant of Performance
        Shares will specify management objectives which, if achieved, will result
        in
        payment or early payment of the award, and each grant may specify in respect
        of
        such specified management objectives a minimum acceptable level of achievement
        and will set forth a formula for determining the number of Performance Shares
        that will be earned if performance is at or above the minimum level, but
        falls
        short of full achievement of the specified management objectives.  The
        grant of Performance Shares will specify that, before the Performance Shares
        will be earned and paid, the Committee must certify that the management
        objectives have been satisfied.

       

      (d)           Payment
        of Award.  Each grant will specify the
        time and manner of payment of Performance Shares that have been
        granted.  Any grant may specify that the amount payable with respect
        thereto may be paid by the Company in cash, in common shares or in any
        combination thereof and may either grant to the Participant or retain in
        the
        Committee the right to elect among those alternatives.

       

      (e)           Maximum
        Award.  Any grant of Performance Shares
        may specify that the amount payable with respect thereto may not exceed a
        maximum specified by the Committee on the date of grant.

       

      (f)           Dividend
        Payments.  The Committee may, at or
        after the date of grant of Performance Shares, provide for the payment of
        dividend equivalents to the holder thereof on either a current or deferred
        or
        contingent basis, either in cash or in additional Shares.

       

      (g)           Award
        Agreement.  Each grant of Performance
        Shares will be evidenced by an evidence of award and will contain such other
        terms and provisions, consistent with this Plan, as the Committee may
        approve.

       

      3.8           Other
        Awards.

       

      (a)           Discretionary
        Awards.  The Committee may, subject to
        limitations under applicable law, grant to any Participant such other awards
        that may be denominated or payable in, valued in whole or in part by reference
        to, or otherwise based on, or related to, the Company’s Shares or factors that
        may influence the value of such Shares, including, without limitation, convertible
        or exchangeable debt securities, other rights convertible or exchangeable
        into
        Shares, purchase rights for Shares, awards with value and payment contingent
        upon performance of the Company or specified subsidiaries, affiliates or
        other
        business units thereof or any other factors designated by the Committee,
        and
        awards valued by reference to the book value of Shares or the value of
        securities of, or the performance of specified subsidiaries or affiliates
        or
        other business units of the Company.  The Committee shall determine
        the terms and conditions of such awards.  Shares delivered pursuant to
        an award in the nature of a purchase right granted under this Section 3.8
        shall
        be purchased for such consideration, paid for at such time, by such methods,
        and
        in such forms, including, without limitation, cash, common shares, other
        awards,
        notes or other property, as the Committee may determine.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (b)           Cash
        Awards.  Cash awards, as an element of
        or supplement to any other award granted under this Plan, may also be granted
        pursuant to this Section of this Plan.

       

      (c)           Bonus
        or Other Awards.  The Committee may
        grant Shares as a bonus, or may grant other awards in lieu of obligations
        of the
        Company or a subsidiary to pay cash or deliver other property under this
        Plan or
        under other plans or compensatory arrangements, subject to such terms as
        shall
        be determined by the Committee.

       

      (d)           Annual
        Grant to Non-Employee
        Directors.  Consistent with the terms of
        this Plan and as reflected in individual Award agreements, the Board may
        establish annual grant Awards or other Awards to Non-Employee Directors on
        such
        terms and conditions as it determines, including providing for director fee
        or
        retainer payments through the issuance of Awards and establish the timing
        of the
        effectiveness of such Awards.  Such Awards may also be made by
        establishing automatic annual grants that are made effective as of the election
        of directors after each annual shareholder meeting, in such amounts as the
        Board
        may determine from time to time.  To the extent that the Board amends,
        suspends or terminates such annual or periodic grants for Non-Employee
        Directors, no approval or consent of such Non-Employee Director shall be
        necessary to take such action with respect to Awards that have not yet been
        granted.

       

      3.9           Escrow
        of Stock Certificates.  To enforce any restrictions on
        Award Shares, the Committee may require their holder to deposit the certificates
        representing Award Shares, with stock powers or other transfer instruments
        approved by the Committee endorsed in blank, with the Company or an agent
        of the
        Company to hold in escrow until the restrictions have lapsed or
        terminated.  The Committee may also cause a legend or legends
        referencing the restrictions to be placed on the certificates.

       

      3.10           Repurchase
        Rights.

       

      (a)           General.  If
        a Stock Award is subject to vesting or other forfeiture conditions, the Company
        shall have the right, during such period after the Participant’s separation from
        service with the Company as is specified by the Committee in an Award Agreement
        to repurchase any or all of the Award Shares that were otherwise subject
        to
        forfeiture as of the date of that separation of service.  The
        repurchase price shall be such price as is determined by the Committee and
        set
        forth in the Award Agreement.  The repurchase price shall be paid in
        cash.

      
         

        (b)           Procedure.  The
          Company or its assignee may choose to give the Participant a written notice
          of
          exercise of its repurchase rights under this Section 3.10.  However,
          the Company’s failure to give such a notice shall not affect its rights to
          repurchase any Award Shares.  The Company must, however, tender the
          repurchase price during the period specified in the applicable Award Agreement
          in order to exercise such rights.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      SECTION
        4

      OPERATION
        AND ADMINISTRATION

      


      4.1           Effective
        Date.   This Plan shall be effective as of July 1,
        2007, subject to approval of the Company’s shareholders at its next annual
        meeting (the “Effective Date”).  No awards or grants
        may be made after the ten year anniversary of date that the shareholders
        of the
        Company approve this Plan, including any subsequent amendments or restatement
        of
        this Plan, unless terminated sooner by the Company’s Board of Directors pursuant
        to Section 7 herein.  Any Awards granted prior to the date of the
        termination of the Plan shall remain in effect as long as any Awards under
        it
        are outstanding; provided, however, that, to the extent required by the Code,
        no
        Incentive Stock Options may be granted under the Plan on a date that is more
        than ten years from the date the Plan is adopted or, if earlier, the date
        the
        Plan is approved by the Company’s shareholders.

       

      4.2           Limits
        on Award Under the Plan.

       

      (a)           Number
        of Shares.  Subject to adjustments provided for in
        Section 4.2(f) below relating to changes in the capitalization of the Company,
        a
        maximum of one million eight hundred thousand (1,800,000) Shares may be
        delivered in satisfaction of Awards under the Plan and, of that amount not
        more
        than one million (1,000,000) Shares may be issued as Incentive Stock
        Options.  For purposes of the preceding sentence, Shares that have
        expired, canceled in accordance with the terms of the applicable Award, or
        repurchased, and any Shares tendered in satisfaction of the exercise price
        or
        withheld by the Company to satisfy tax withholding requirements shall not
        be
        considered to have been delivered under the Plan.  If a Participant
        pays the exercise or purchase price of an Award through withholding of Shares
        or
        tender of Shares, or if Shares are withheld from the Award, the number of
        Shares
        so tendered or withheld shall become available for re-grant or re-issuance
        thereafter under the Plan following such tender or withholding of
        Shares.

       

      Any
        Shares covered by an Award granted under the Plan shall not be counted as
        used
        unless and until they are actually issued and delivered to a
        Participant.  If any Shares or Awards are repurchased by the Company
        prior to vesting, the Shares under such Award shall revert to and again become
        available for issuance under the Plan.

       

      (b)           Type
        of Shares.  Shares delivered by the Company under the
        Plan may be authorized but unissued Shares or previously issued Shares acquired
        by the Company and held in treasury.  No fractional Shares will be
        delivered under the Plan.

       

      (c)           Forfeiture
        of Options.  Any Shares granted under the Plan that are
        forfeited because of the failure to meet an Award contingency or performance
        condition shall again be available for delivery pursuant to new Awards granted
        under the Plan.  To the extent any Shares covered by an Award are not
        delivered to a Participant or beneficiary because the

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Award
        is
        forfeited or canceled, such Shares shall not be deemed to have been delivered
        for purposes of determining the maximum number of Shares available for delivery
        under the Plan.

       

      (d)           Use
        of Shares as Payment.  If the exercise price of any stock
        option granted under the Plan is satisfied by tendering Shares to the Company
        (by either actual delivery or by attestation), only the number of Shares
        issued
        net of the Shares tendered shall be deemed delivered for purposes of determining
        the maximum number of Shares available for delivery under the Plan.

       

      (e)           Substitution
        of Shares.  Shares delivered under the Plan in
        settlement, assumption or substitution of outstanding awards (or obligations
        to
        grant future awards) under the plans or arrangements of another entity shall
        not
        reduce the maximum number of Shares available for delivery under the Plan,
        to
        the extent that such settlement, assumption or substitution results from
        the
        Company or a Related Company acquiring another entity (or an interest in
        another
        entity).

       

      (f)           Adjustment
        of Number of Shares.  In the event of a corporate
        transaction involving the Company (including, without limitation, any stock
        dividend, forward or reverse stock split, extraordinary cash dividend,
        recapitalization, reorganization, merger, consolidation, split-up, spin-off,
        combination or exchange of Shares), then (A) the number of Shares reserved
        for
        issuance under this Plan, (B) the exercise price, base price or redemption
        price
        applicable to outstanding Awards, and (C) the number of Shares subject to
        outstanding Awards shall be proportionately adjusted, subject to any required
        action by the Board or the stockholders of the Company and compliance with
        applicable law.  Fractions of a Share will not be issued but will be
        paid in cash at the fair market value of such fraction of a share or will
        be
        rounded down to the nearest whole share, as determined by the Committee in
        its
        sole discretion.  Action by the Committee may include adjustment of:
        (i) the number and kind of Shares which may be delivered under the Plan;
        (ii)
        the number and kind of Shares subject to outstanding Awards; and (iii) the
        exercise price of outstanding Options; as well as any other adjustments that
        the
        Committee determines to be equitable.

       

      In
        the
        event of any change in the Shares subject to the Plan, or subject to or
        underlying any Award, by reason of any reorganization, recapitalization,
        merger,
        consolidation, spin-off, combination, exchange of shares or other corporate
        exchange, any distribution to stockholders of common stock other than regular
        cash dividends, or any transaction similar to the foregoing (but not including
        either a stock dividend or a stock split, which shall be addressed under
        Section
        4.2(f) above), the Committee in its sole discretion and without liability
        to any
        person may make such substitution or adjustment, if any, as it deems to be
        equitable to (i) the type, class(es) and maximum number of securities subject
        to
        the Plan pursuant to Section 4.2(a), (ii) the exercise price, base price
        or
        redemption price applicable to outstanding Awards, (iii) the type, class(es)
        and
        number of securities subject to outstanding Awards, or (iv) any other affected
        terms of any outstanding Awards.

       

      (g)           Vesting.  Without
        limiting the generality of Section 1.4, the Committee may determine the time
        or
        times at which an Award will vest (i.e., become free of forfeiture restrictions)
        or become exercisable and the terms on which an Award requiring exercise
        will
        remain exercisable.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Unless
        the Committee expressly provided otherwise, a Participant’s “employment or other
        service relationship with the Company and any Related Company” will be deemed to
        have ceased when the individual is no longer employed by or in a service
        relationship with the Company or any Related Company.  Except as the
        Committee otherwise determines, with respect to a Participant who is an employee
        of the Company or any Related Company, such Participant’s employment or other
        service relationship with the Company and any Related Company will not be
        deemed
        to have ceased during a military, sick or other bona fide leave of absence
        if
        such absence does not exceed 90 days or, if longer, so long as the Participant
        retains a right by statute or by contract to return to employment or other
        service relationship with the Company or any Related Company.  Unless
        the Committee determines otherwise, vesting of any Award under this Plan
        will be
        suspended during any unpaid leave of absence.

       

      4.3           Limit
        on Distribution.  Distribution of Shares or other amounts
        under the Plan shall be subject to the following:

       

      (a)           Compliance
        with Securities Laws.  Notwithstanding any other
        provision of the Plan, the Company shall have no liability to deliver any
        Shares
        under the Plan or make any other distribution of benefits under the Plan
        unless
        such delivery or distribution would comply with all applicable laws (including,
        without limitation, the requirements of the Act, and the applicable requirements
        of any securities exchange or similar entity).

       

      (b)           Issuance
        Without Certificates.  To the extent that the Plan
        provides for issuance of stock certificates to reflect the issuance of Shares,
        the issuance may be effected on a non-certificated basis, to the extent not
        prohibited by applicable law or the applicable rules of any stock
        exchange.

       

      4.4           Time
        of Exercise.  Options and Stock Awards
        shall be considered exercised when the Company (or its authorized agent)
        receives: (a) written (including electronic) notice of exercise from the
        person
        entitled to exercise the Option or Stock Award, (b) full payment, or provision
        for payment, in a form and method approved by the Administrator, for the
        Shares
        for which the Option or Stock Award is being exercised, and (c) if applicable,
        payment, or provision for payment, in a form approved by the Administrator,
        of
        all applicable withholding taxes due upon exercise. An Award may not be
        exercised for a fraction of a Share.

       

      4.5           Payment
        Shares. Subject to the overall limitation on the number of Shares
        that may be delivered under the Plan, the Committee may use available Shares
        as
        the form of payment for compensation, grants or rights earned or due under
        any
        other compensation plans or arrangements of the Company or a Related Company,
        including the plans and arrangements of the Company or a Related Company
        acquiring another entity (or an interest in another entity).

       

      4.6           Transferability.
        Except as otherwise provided by the Committee, Awards under the Plan are
        not
        transferable except (i) as designated by the Participant by will or by the
        laws
        of descent and distribution; or (ii) pursuant to a Domestic Relations Order
        entered by a court of competent jurisdiction or a court appointed guardian
        or
        that is appointed to act on behalf of the
        Participant.  Notwithstanding anything in this Section to the
        contrary, the Participant may transfer an option granted under this Plan
        to or
        for the benefit of his or her family members (including, without limitation,
        to
        a trust for the benefit of the Participant’s family members or to a partnership
        or limited family partnership or other entity established for the benefit
        of one
        or more members of the Participant’s family), subject to such limits as the
        Committee may establish.  Each
        transferee shall remain subject to all the terms and conditions applicable
        to
        the option prior to such transfer.   No Incentive Stock Option
        may be transferred by a Participant, unless such transfer is permitted under
        the
        provisions of Section 422 of the Code or any successor provision in the Code
        and
        approved by the Committee.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      4.7           Form
        and Time of Elections. Unless otherwise specified herein, each
        election required or permitted to be made by any Participant or other person
        entitled to exercise an option under the Plan, and any permitted modification,
        or revocation thereof, shall be in writing filed with the Committee at such
        times, in such form, and subject to such restrictions and limitations, not
        inconsistent with the terms of the Plan, as the Committee shall
        require.

       

      4.8           Agreement
        With Company. At the time of an Award to a Participant under the
        Plan, the Committee may require a Participant to enter into an agreement
        with
        the Company (the “Agreement”) in a form specified by the
        Committee, agreeing to the terms and conditions of the Plan and to such
        additional terms and conditions, not inconsistent with the Plan, as the
        Committee may, in its sole discretion, prescribe.  The Committee need
        not require the execution of any such agreement by a Participant in which
        case
        acceptance of the Award by the Participant will constitute agreement to the
        terms of the Award.

       

      4.9           Documentation.  The
        Committee may also choose to document the evidence of its approval of an
        Award
        in the form of an agreement, certificate, resolution or other type or form
        of
        writing or other evidence approved by the Committee that sets forth the terms
        and conditions of the Award.  Evidence of an Award may also be
        delivered in an electronic medium and may be limited to a notation on the
        books
        and records of the Company and may include electronic signatures if approved
        by
        the Committee.  The Company may deliver by email or other electronic
        means (including posting on a web site maintained by the Company or by a
        third
        party under contract with the Company) all documents relating to the Plan
        or any
        Award thereunder (including without limitation, prospectuses required by
        the
        SEC) and all other documents that the Company is required to deliver to its
        security holders (including without limitation, annual reports and proxy
        statements).  Evidence required of Participant under the Plan may be
        by certificate, affidavit, document or other information which the person
        acting
        on it considers pertinent and reliable, and signed, made or presented by
        the
        proper party or parties.

       

      4.10           Limitation
        of Implied Rights.

       

      (a)           No
        Collateral or Secured Interest.  Neither a Participant
        nor any other person shall, by reason of the Plan, acquire any right in or
        title
        to any assets, funds or property of the Company or any Related Company
        whatsoever, including, without limitation, any specific funds, assets, or
        other
        property which the Company or any Related Company, in their sole discretion,
        may
        set aside in anticipation of a liability under the Plan. Each Participant
        shall
        have only a contractual right to the stock payable under the Plan, unsecured
        by
        any assets of the Company or any Related Company. Nothing contained in the
        Plan
        shall constitute a guarantee that the assets of such companies shall be
        sufficient to pay any benefits to any person.

       

      (b)           No
        Guarantee of Employment.  The Plan does not constitute a
        contract of employment, and the receipt of any Award or option grant will
        not
        give any employee the right to be retained in the employ of the Company or
        any
        Related Company, nor any right or claim to any benefit under the Plan, unless
        such right or claim has specifically accrued under the terms of the Plan.
        Except
        as otherwise provided in the Plan, no Award under the Plan shall confer
        upon the holder thereof any right as a shareholder of the Company prior to
        the
        date on which the individual fulfills all conditions for receipt of such
        rights.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      4.11           Action
        by Company or Related Company.  Any action required or
        permitted to be taken by the Company or any Related Company shall be by
        resolution of its Board, or by action of one or more members of the Board
        (including a committee of the Board) who are duly authorized to act for the
        Board, or (except to the extent prohibited by applicable law or applicable
        rules
        of any stock exchange) by a duly authorized officer of the Company.

       

      4.12           Change
        of Control.  Unless otherwise set forth in an applicable
        option agreement or Award agreement, upon a Change in Control the Committee
        may,
        in its discretion, revise, alter, amend or modify any option agreement or
        Award
        in any manner it deems appropriate.

       

      4.13           Leave
        of Absence.  A Participant will not
        cease to be an employee in the case of any leave of absence approved by the
        Company.  For an Incentive Stock Option, no such leave may exceed 90
        days unless reemployment upon expiration of such leave is guaranteed by statute
        or contract.  If reemployment upon expiration of a leave of absence
        approved by the Company is not so guaranteed, then three (3) months following
        the 91st day of such leave any Incentive Stock Option held by the Participant
        will cease to be treated as an Incentive Stock Option and will be treated
        for
        tax purposes as a Non-Qualified Stock Option.

       

       

      SECTION
        5

      TAXES

      


      5.1           Withholding.

       

      (a)           General.
        Regardless of any action the Company takes with respect to
        any or
        all income tax, social security, payroll tax, payment on account, other
        tax-related withholding or information reporting (“Tax-Related
        Items”), the Participant acknowledges and agrees that the ultimate
        liability for all Tax-Related Items legally due remains the Participant’s
        responsibility and that the Company (i) makes no representations nor
        undertakings regarding the treatment of any Tax-Related Items in connection
        with
        any aspect of an Award; and (ii) does not commit to structure the terms or
        any
        aspect of an Award granted hereunder to reduce or eliminate the Participant’s
        liability for Tax-Related Items.  The Company shall have no obligation
        to deliver Award Shares or release Award Shares from an escrow or permit
        a
        transfer of Award Shares until the Participant has satisfied those tax
        withholding obligations. The Participant accepts this requirement as a condition
        of her or her receipt of the Award. To the extent any payment in satisfaction
        of
        Awards is made in cash, the payment will be reduced by an amount sufficient
        to
        satisfy all tax withholding requirements.

       

      (b)           Method
        of
Payment. The
        Participant shall pay any required withholding using the forms of consideration
        described in Section 2.5(h).  If the Committee permits Shares to be
        withheld from the Award to satisfy applicable withholding obligations, the
        Fair
        Market Value of the Shares withheld, as determined as of the date of
        withholding, shall not exceed the amount determined by the applicable minimum
        statutory withholding rates to the extent the Committee determines such limit
        is
        necessary or advisable in light of generally accepted accounting
        principles.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                     
        5.2           Reporting
        of Dispositions. Any Participant that acquires
        Shares under an Incentive Stock Option shall promptly notify the Committee,
        following such procedures as the Committee may require, of the sale or other
        disposition of any of those Option Shares if the disposition occurs during:
        (a)
        the longer of two years after the grant date of the Incentive Stock Option
        and
        one year after the date the Incentive Stock Option was exercised, or (b)
        such
        other period as the Administrator has established.

       

      5.3           Compliance
        with Code Section 409A.  Notwithstanding any provision of
        this Agreement to the contrary, if one or more of the payments or benefits
        received or to be received by a Participant pursuant to an Award would
        constitute deferred compensation subject to Section 409A of the Code and
        would
        cause the Participant to incur any penalty tax or interest under Section
        409A of
        the Code or any regulations or Treasury guidance promulgated thereunder,
        the
        Company may reform such provision to maintain to the maximum extent practicable
        the original intent of the applicable provision without violating the provisions
        of Section 409A of the Code.  If no reasonably practicable reformation
        would avoid the imposition of any penalty tax or interest under Section 409A
        of
        the Code, no payment or benefit will be provided under the Award and the
        Award
        will be deemed null, void and of no force and effect, and the Company shall
        have
        no further obligation with respect to the Award or the failure to issue any
        Shares or other compensation hereunder.

       

      SECTION
        6

      COMMITTEE

      


      6.1           Administration.
        The authority to control and manage the operation and administration of the
        Plan
        shall be vested in a committee of the members of the Board who are “independent
        directors”, as determined under Rule 16b-3 of the Securities Exchange Act of
        1934 or any successor rule, Section 162(m) of the Code, and any rules and
        regulations of the stock exchange on which the Company’s Shares are
        listed.  The Board of Directors of the Company has designated the
        Compensation Committee of the Board, comprised of not less than two (2) members,
        to be responsible for administering the Plan.

       

      6.2           Selection
        of Committee. The Committee shall be selected by
        the Board.

       

      6.3           Powers
        of Committee. The authority to manage and control the operation and
        administration of the Plan shall be vested in the Committee, subject to the
        following:

       

      (a)           Grant
        of Awards.  Subject to the provisions of the Plan, the
        Committee will have the authority and discretion to select from among the
        Eligible Employees or Eligible Directors those persons who shall receive
        Awards,
        to determine the time or times of receipt, to determine the types of Awards
        and
        the number of Shares covered by the Awards, to establish the terms, conditions,
        performance criteria, restrictions, and other provisions of such Awards,
        and to
        cancel or suspend Awards. In making such Award determinations, the Committee
        may
        take into account the nature of services rendered by the individual, the
        individual’s present and potential contribution to the Company’s success and
        such other factors as the Committee deems relevant.

       

      (b)           Section
        162(m) Limits.  Subject to the provisions of the Plan,
        the Committee will have the authority and discretion to determine the extent
        to
        which Awards under the Plan will be structured to conform to the requirements
        applicable to performance-based compensation as described in Section 162(m)
        of
        the Code and to take such action, establish such procedures
        and impose such restrictions at the time such Awards are granted as the
        Committee determines to be necessary or appropriate to conform to such
        requirements.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (c)           Interpretation
        of Plan.  The Committee will have the authority and
        discretion to interpret the Plan, to establish, amend, and rescind any rules
        and
        regulations relating to the Plan, to determine the terms and provisions of
        any
        agreements made pursuant to the Plan and to make all other determinations
        that
        may be necessary or advisable for the administration of the Plan.

       

      (d)           Final
        Authority.  Any interpretation of the Plan by the
        Committee and any decision made by it under the Plan is final and
        binding.

       

      (e)           Time
        of Grant.  Except as otherwise expressly provided in the
        Plan, where the Committee is authorized to make a determination with respect
        to
        any Award, such determination shall be made at the time the Award is made,
        except that the Committee may reserve the authority to have such determination
        made by the Committee in the future (but only if such reservation is made
        at the
        time the Award is granted and is expressly stated in the Agreement reflecting
        the Award).

       

      (f)           Action
        by Committee.  In controlling and managing the operation
        and administration of the Plan, the Committee shall act by a majority of
        its
        then members, by meeting or by writing filed without a meeting. The Committee
        shall maintain and keep adequate records concerning the Plan and concerning
        its
        proceedings and acts in such form and detail as the Committee may
        decide.

       

      (g)           Delegation
        by Committee. Except to the extent prohibited by applicable law or
        the applicable rules of a stock exchange, the Committee may allocate all
        or any
        portion of its responsibilities and powers to any one or more of its members
        and
        may delegate all or any part of its responsibilities and powers to any person
        or
        persons selected by it. Any such allocation or delegation may be revoked
        by the
        Committee at any time.

       

      Notwithstanding
        anything to the
        contrary herein, if the Committee cannot act or make a determination, then
        the
        Board shall also be entitled to take such action or make such
        determination.

       

      6.4           Information
        to be Furnished to Committee.  The Company and Related
        Companies shall furnish the Committee with such data and information as may
        be
        required for it to discharge its duties. The records of the Company and Related
        Companies as to an employee’s or Participant’s employment, termination of
        employment, leave of absence, reemployment and compensation shall be conclusive
        on all persons unless determined to be incorrect. Participants and other
        persons
        entitled to benefits under the Plan must furnish the Committee such evidence,
        data or information as the Committee considers desirable to carry out the
        terms
        of the Plan.

       

      SECTION
        7

      AMENDMENT
        AND TERMINATION

      


      7.1           Amendment
        and Termination.  The Board may at any time amend,
        suspend, or terminate this Plan.

       

      7.2           Stockholder
        Approval.  The Company shall obtain the approval of the
        Company’s shareholders for any amendment to this Plan if shareholder approval is
        necessary to comply with any applicable law or with the requirements applicable
        to the grant of Awards intended to be Incentive Stock Options.  For
        Stock Awards to continue to be eligible to qualify as “performance-based
        compensation” under Code Section 162(m), the Company’s shareholders must
        re-approve the material terms of the performance goals included in the Plan
        by
        the date of the first stockholder meeting that occurs in the fifth year
        following the year in which the shareholders first approved the
        Plan.  The Board may also, but need not, require that the Company’s
        shareholders approve any other amendments to this Plan.

       

      7.3           Effect.  No
        amendment, suspension, or termination of this Plan, and no modification of
        any
        Award even in the absence of an amendment, suspension, or termination of
        this
        Plan, shall impair any existing contractual rights of any Participant unless
        the
        affected Participant consents to the amendment, suspension, termination,
        or
        modification.  Notwithstanding anything herein to the contrary, no
        such consent shall be required if the Committee determines, in its sole and
        absolute discretion, that the amendment, suspension, termination, or
        modification:  (a) is required or advisable in order for the Company,
        this Plan or the Award to satisfy applicable law, to meet the requirements
        of
        any accounting standard or to avoid any adverse accounting treatment, or
        (b) in
        connection with any transaction or event described in Section 4.2, is in
        the
        best interests of the Company or its shareholders.

       

      The
        Committee may, but need not, take
        the tax or accounting consequences to affected Participants into consideration
        in acting under this Section 7.3.  Those decisions shall be final,
        binding and conclusive.  Termination of this Plan shall not affect the
        Committee’s ability to exercise the powers granted to it under this Plan with
        respect to Awards granted before the termination of Shares issued under such
        Awards even if those Shares are issued after the termination.

      


      SECTION
        8

      DEFINED
        TERMS

      


      For
        purposes of the Plan, the terms listed below shall be defined as
        follows:

       

      (a)           Award.
        The term “Award” or “Awards” shall mean any award or benefit granted to any
        Participant made by the Committee under the Plan, including, without limitation,
        the grant of Options or Stock Awards.  The Committee shall determine
        the type or types of Awards to be made to each Participant under the Plan
        and
        shall approve the terms and conditions governing such Awards.  Awards
        may be granted singly, in compensation or in tandem so that the settlement
        or
        payment of one automatically reduces or cancels the other.  Awards may
        also be made in combination or in tandem with, in replacement of, as
        alternatives to, or as the payment form for, grants or rights under any other
        employee or compensation plan of the Company, including the Plan of any acquired
        entity.  Nothing in this Plan shall authorize the Committee to grant
        an automatic reload option that provides for the automatic award of additional
        stock options upon the exercise of such Awards.

       

      (b)           Board.
        The term “Board” shall mean the Board of Directors of the
        Company.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (c)           Change
        of Control. The term “Change of Control”
means in the event that:

       

      (1)           Any
        person (as such term is used in Section 13 of the Exchange Act and the rules
        and
        regulations thereunder and including any affiliate or associate of such person,
        as defined in Rule 12b-2 under said Exchange Act, and any person acting in
        concert with such person) directly or indirectly acquires or otherwise becomes
        entitled to vote more than fifty-five percent (50%) of the voting power entitled
        to be cast at elections for directors (“Voting Power”) of the
        Company; or

       

      (2)           There
        occurs any merger or consolidation of the Company, or any sale, lease or
        exchange of all or any substantial part of the consolidated assets of the
        Company and its subsidiaries to any other person or, in the case of a merger
        or
        consolidation, the holders of outstanding stock of the Company entitled to
        vote
        in elections of directors immediately before such merger or consolidation
        (excluding any affiliate) hold less than fifty percent (50%) of the Voting
        Power
        of the survivor of such merger or consolidation or its parent; or in the
        case of
        any such sale, lease or exchange, the Company does not own at least 50% of
        the
        Voting Power of the acquiring entity or person; or

       

      (3)           Individuals
        who, on the date this Plan is adopted by the Board, are members of the Board
        (the “Incumbent Board”) cease for any reason to constitute at
        least a majority of the members of the Board; provided, however, that
        if the appointment or election (or nomination for election) of any new Board
        member was approved or recommended by a majority vote of the members of the
        Incumbent Board then still in office, such new member shall, for purposes
        of
        this Plan, be considered as a member of the Incumbent Board.

       

      The
        term
        Change in Control shall not include a sale of assets, merger or other
        transaction effective exclusively for the purpose of changing the domicile
        of
        the Company.

       

      Notwithstanding
        the foregoing or any other provisions in this Plan, the definition of Change
        in
        Control (or any analogous term) in an individual written agreement between
        the
        Company or any Affiliate and the Participant shall supersede the foregoing
        definition with respect to Stock Awards subject to such agreement (it being
        understood, however, that if no definition of Change in Control or any analogous
        term is set forth in such an individual written agreement, the foregoing
        definition shall apply.

       

      (d)           Code.  The
        term “Code” means the Internal Revenue Code of 1986, as
        amended. A reference to any provision of the Code shall include reference
        to any
        successor provision of the Code.

       

      (e)           Covered
        Employee.  The term “Covered Employee”
means any person who is a covered employee
        within the meaning of Section
        162(m)(3) of the Code.

       

      (f)           Committee.  The
        term “Committee” shall mean the members of the duly constituted
        Compensation Committee of the Company, consisting of independent members
        of the
        Board that satisfy the provisions of Rule 16b-3 of the Exchange Act and,
        if
        applicable, Section 162(m) of the Code, and any rules and regulations of
        the
        stock exchange on which the Company’s Shares are listed.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (g)           Consultant.  The
        term “Consultant” means any person, including an advisor
        engaged by the Company or a Related Party to render consulting or advisory
        services and who is compensated for such services.  However, the term
“Consultant” shall not include directors who are not compensated by the Company
        for their service as a director, and the payment of a director’s fee by the
        Company for services as a director shall not cause a director to be considered
        a
“Consultant” for purposes of the Plan.

       

      (h)           Disability.  The
        term “Disability” shall mean the inability of a Participant to
        engage in any substantial, gainful activity by reason of any medically
        determinable physical or mental impairment within the meaning of Section
        22(e)(3) of the Code.

       

      (i)           Domestic
        Relations Order.  The term “Domestic Relations
        Order” means a “domestic relations order” as defined in, and otherwise
        meeting the requirements of, Section 414(p) of the Code, except that reference
        to a “plan” in that definition shall be to this Plan.

       

      (j)           Effective
        Date.  The term “Effective Date” means
        the date the shareholders of the Company approve the Plan.  In the
        event the shareholders do not approve the Plan, the Plan shall be null and
        void
        and no terms of the Plan shall take effect.

       

      (k)           Eligible
        Employee or Eligible Director.  The term
“Eligible Employee” or “Eligible Director”
shall mean any employee
        or director of the Company or a Related Company that
        performs key services for such Company or a Related Company.  For any
        incentive stock options granted under the Plan, Eligible Employee must be
        deemed
        to be a key executive or management employee of the Company or a Related
        Company.

       

      (l)           Exchange
        Act.  The term “Exchange Act” means the
        Securities Exchange Act of 1934, as amended.

       

      (m)           Fair
        Market Value. For purposes of determining the “Fair Market
        Value” of a share of Stock, the following rules shall
        apply:

       

      (1)           Listed
        Stock.  If the Shares are traded on any established stock
        exchange or quoted on a national market system, Fair Market Value shall be
        the
        closing sales price for the Shares as quoted on that stock exchange or system
        for the date the value is to be determined (the “Pricing Date”)
        as reported in The Wall Street Journal or a similar
        publication.  If no sales are reported as having occurred on the
        Pricing Date, Fair Market Value shall be that closing sales price for the
        last
        preceding trading day on which sales of Shares are reported as having
        occurred.  If no sales are reported as having occurred during the five
        trading days before the Pricing Date, Fair Market Value shall be the closing
        bid
        for Shares on the Pricing Date (or on the last preceding date on which a
        closing
        bid for the Shares was made).  If Shares are listed on multiple
        exchanges or systems, Fair Market Value shall be based on sales or bid prices
        on
        the primary exchange or system on which Shares are traded or
        quoted.

       

      (2)           Stock
        Quoted by Securities Dealer.  If Shares are regularly
        quoted by a recognized securities dealer but selling prices are not reported
        on
        any established stock exchange or quoted on a national market system, Fair
        Market Value shall be the mean between the high bid and low asked prices
        on the
        Pricing Date.  If no prices are quoted for the Pricing
        Date, Fair Market Value shall be the mean between the high bid and low asked
        prices on the last preceding trading day on which any bid and asked prices
        were
        quoted.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (3)           No
        Established Market.  If Shares are not traded on any
        established stock exchange or quoted on a national market system and are
        not
        quoted by a recognized securities dealer, and unless otherwise required by
        applicable law, the Committee (following guidelines established by the Board
        or
        Committee) will determine Fair Market Value in good faith using any reasonable
        valuation method.  The Committee will consider the following factors,
        and any others it considers significant, in determining Fair Market
        Value:  (i) the price at which other securities of the Company have
        been issued to purchasers other than employees, directors, or consultants;
        (ii)
        the Company’s stockholder’s equity, prospective earning power, dividend-paying
        capacity, present value of future cash flows, and value of tangible and
        intangible assets, if any; and (iii) any other relevant factors, including
        the
        economic outlook for the Company and the Company’s industry, the Company’s
        position in that industry, the Company’s goodwill and other intellectual
        property, and the values of securities of other businesses in the same
        industry.

       

      (n)           Non-Employee
        Director.  The term “Non-Employee
        Director” means a Director who either (i) is not currently an employee
        or officer of the Company or its parent or a subsidiary, does not receive
        compensation, either directly or indirectly, from the Company or its parent
        or a
        subsidiary, for services rendered as a consultant or in any capacity other
        than
        as a Director (except for an amount as to which disclosure would not be required
        under Item 404(a) of Regulation S-K promulgated pursuant to the Securities
        Act
        (“Regulation S-K”)), does not possess an interest in any other transaction for
        which disclosure would be required under Item 404(a) of Regulation S-K, and
        is
        not engaged in a business relationship for which disclosure would be required
        pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered
        a
“non-employee director” for purposes of Rule 16b-3.

       

      (o)           Option
        Agreement.  The term “Option Agreement”
means a written agreement between the Company
        and an Optionholder evidencing the
        terms and conditions of an individual Option grant.  Each Option
        Agreement shall be subject to the terms and conditions of the Plan.

       

      (p)           Outside
        Director.  The term “Outside Director”
means a Director who either (i) is not a current
        employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated
        under Section 162(m) of the Code), is not a former employee of the Company
        or an
“affiliated corporation” who receives compensation for prior services (other
        than benefits under a tax-qualified retirement plan) during the taxable year,
        has not been an officer of the Company or an “affiliated corporation”, and does
        not receive remuneration from the Company or an “affiliated corporation,” either
        directly or indirectly, in any capacity other than as a Director or (ii)
        is
        otherwise considered an “outside director” for purposes of Section 162(m) of the
        Code.

       

      (q)           Participant.  The
        term “Participant” means those persons that have been granted
        an Option or Award by the Committee under the terms of the Plan.

       

      (r)           Performance
        Measures.  The term “Performance
        Measures” means those criteria established by the Committee to measure
        individual or Company performance, including
        relevant standards imposed to compare Company performance against the results
        of
        comparable companies and any individually designed and measurement standards
        selected by the Company.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (s)           Related
        Company or Related Companies. For purposes of this Agreement, the
        term “Related Company” means (i) any corporation, partnership, joint venture or
        other entity during any period in which it owns, directly or indirectly,
        at
        least fifty percent (50%) of the voting power of all classes of stock of
        the
        Company (or successor to the Company) entitled to vote; and (ii) any
        corporation, partnership, joint venture or other entity during any period
        in
        which at least a fifty percent voting or profits interest is owned, directly
        or
        indirectly, by the Company, by any entity that is a successor to the Company,
        or
        by any entity that is a Related Company by reason of clause (i) next
        above.

       

      (t)           Retirement.  The
        term “Retirement” means the age or years of service
        requirements established by the Committee to be used in determining the
        exercisability of any Option and vesting of such Option.

       

      (u)           Stock
        or Shares. The term “Stock” or
“Shares” shall mean Shares of common
        stock of the
        Company.

       

      (v)           Stock
        Award.  The term “Stock Award” is an
        award made in stock or denominated in units of stock.  All or part of
        any Stock Award may be subject to conditions established by the Committee,
        and
        set forth in the Award Agreement, which may include, but is not limited to,
        continuous service with the Company, achievement of specific business
        objectives, and other measurement of individual, business unit, or Company
        performance.

       

      (w)           Ten
        Percent Shareholder.  The term
“Ten Percent Shareholder” means is any person who,
        directly or
        by attribution under Section 424(d) of the Code, own shares possessing more
        than
        ten percent of the total combined voting power of all classes of stock of
        the
        Company or any Related Company on the date of grant.

       

      (x)           Vested
        Option.  The term “Vested Option” means
        an option that is not subject to forfeiture and may be exercised by the
        Participant in accordance with its terms.  For purposes of the Plan, a
        Vested Option may vest over a period of time in incremental amounts as
        determined on the basis of performance measures or completion of a period
        of
        service.