Exhibit
          10.3

      

    

     

    [bracketed
      language to be included based on a determination by the Committee at the time
      of
      the grant.]

    


    DISCOVERY
      LABORATORIES, INC.

    2007
      LONG-TERM INCENTIVE PLAN

    STOCK
      OPTION AGREEMENT

    


    RECITALS

     

    A. The
      Board
      has adopted the Discovery Laboratories, Inc. 2007 Long-Term Incentive Plan
      (the
“Plan”) for the purpose of encouraging selected Employees, Directors and
      Consultants of the Company and its Subsidiaries to acquire a proprietary
      interest in the growth and performance of the Company, to generate an increased
      incentive to contribute to the Company’s future success and prosperity, thus
      enhancing the value of the Company for the benefit of its shareholders, and
      to
      enhance the ability of the Company and its Subsidiaries to attract and retain
      exceptionally qualified individuals upon whom, in large measure, the sustained
      progress, growth and profitability of the Company depend.

    


    The
      administrator of the Plan is a committee of the Board of Directors or its
      delegate (the “Committee”), as contemplated by Section 3 of the
      Plan.

    


    B. Participant
      is to render valuable Services to the Company (or Subsidiary), and this Award
      Agreement is executed pursuant to, and is intended to carry out the purposes
      of,
      the Plan in connection with the Company's grant of an option to
      Participant.

    


    C. All
      capitalized terms in this Stock Option Agreement (“Award Agreement”) shall have
      the meaning assigned to them in the attached Appendix or, if not otherwise
      defined in the Appendix, in the Plan.

    


    NOW,
      THEREFORE,
      it is
      hereby agreed as follows:

    


    1. Award
      of Option.
      The
      Company hereby grants to Participant, as of the Award Date, an option to
      purchase up to the number of Option Shares specified in the Notice of Award.
      The
      Option Shares shall be purchasable from time to time as specified in Paragraph
      4
      during the option term specified in Paragraph 2 at the Exercise Price set forth
      on the Notice of Award.

    


    2. Option
      Term.
      This
      option shall have the term set forth on the Notice of Award, up to a maximum
      term of ten (10) years measured from the Award Date and shall expire at the
      close of business on the Expiration Date set forth on the Notice of Award,
      unless sooner terminated in accordance with Paragraph 5 or 6.

    


    3. Limited
      Transferability.
      The
      option granted under this Award Agreement shall not be assignable, alienable,
      saleable, or transferable by Participant other than by will or by the laws
      of
      descent and distribution; provided, however, that, if a procedure shall be
      adopted by the Committee at any time, Participant may designate a beneficiary
      or
      beneficiaries to exercise the rights of Participant with respect to this option
      upon Participant’s death. The option granted under this Award Agreement shall be
      exercisable during Participant’s lifetime only by Participant or, if permissible
      under applicable law, by Participant’s guardian or legal representative. This
      option may not be pledged, alienated, attached, or otherwise encumbered, and
      any
      purported pledge, alienation, attachment, or encumbrance thereof shall be void
      and unenforceable against the Company or any affiliate of the Company.
      Notwithstanding the foregoing, if this option is designated a Non-Qualified
      Stock Option in the Notice of Award, then this option may, in connection with
      Participant's estate plan, be assigned, in whole or in part, during
      Participant's lifetime to one or more members of Participant's immediate family
      or to a trust established for the exclusive benefit of one or more such family
      members. The assigned portion shall be exercisable only by the person or persons
      who acquire a proprietary interest in the option pursuant to such assignment.
      The terms applicable to the assigned portion shall be the same as those in
      effect for this option immediately prior to such assignment and shall be set
      forth in such documents issued to the assignee as the Committee may deem
      appropriate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Dates
      of Exercise.
      This
      option shall vest and become exercisable for the Option Shares in one or more
      installments as specified in the Notice of Award. As the option becomes
      exercisable for such installments, those installments shall accumulate, and
      the
      option shall remain exercisable for the accumulated installments until the
      Expiration Date or sooner termination of the option term under Paragraph 5
      or
      6.

    


    5. Termination
      of Service.
      The
      option term specified in Paragraph 2 shall terminate (and this option shall
      expire and cease to be exercisable) prior to the Expiration Date should any
      of
      the following provisions become applicable:

    


    (a) If
      Participant's Service is terminated for any reason other than death, Disability
      or for Cause, then Participant shall have the right to exercise, in whole or
      in
      part, that portion of this option that was vested and exercisable on the date
      of
      termination of Service until the earlier
      of
      (i) three (3) months after termination of Service or (ii) the Expiration
      Date; and, to the extent that any portion of this option was not exercisable
      on
      the date of termination of Service, it will immediately terminate.

    


    (b) If
      Participant's Service is terminated on account of death (or if a Participant
      dies within ninety days following termination of employment due to Disability),
      then Participant's Beneficiary shall have the right to exercise, in whole or
      in
      part, that portion of this option that was vested and exercisable on the date
      of
      date until the earlier
      of (A)
      the first anniversary of the date of Participant’s death or (B) the Expiration
      Date; and, to the extent that any portion of this option was not exercisable
      on
      the date of termination of Service, it will immediately terminate.

    


    (c) If
      Participant's Service is terminated on account of Disability, then Participant
      or Participant’s Beneficiary shall have the right to exercise, in whole or in
      part, that portion of this option that was vested and exercisable on the date
      of
      Disability until the earlier
      of
      (i) ninety (90) days after termination of Service or (ii) the Expiration
      Date; and, to the extent that any portion of this option was not exercisable
      on
      the date of termination of Service, it will immediately terminate.

    


    (d) If
      Participant's Service is terminated for Cause or if Participant shall breach
      any
      post-Service duties to the Company or any post-Service covenants or agreements,
      including any confidentiality or non-competition and non-solicitation agreement,
      any unexercised portion of this option shall terminate immediately. Solely
      for
      the purposes of this Award Agreement, notwithstanding any notice period or
      cure
      period provided in any employment or other applicable agreement, if Participant
      is terminated for Cause, the date of termination shall be deemed to be the
      date
      as of which the Company issues a notice of termination to Participant (subject
      to any right that the Participant may have to cure). The right to exercise
      any
      vested and unexercised portion of this option shall be suspended during any
      such
      notice or cure period. Should the Company revoke any notice of termination
      based
      on Participant’s satisfactory cure under an employment or other applicable
      agreement, the Committee may reinstate the right to exercise this option under
      the original terms of this Award Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [(e)
      to
      be included in Award Agreements for non-employee directors only] 

    


    (e) If
      Participant’s Service is as a member of the Board (“Board Service”), in lieu of
      clauses (a) through (c) of this Paragraph 6, the following provisions shall
      apply:

    


    (i) The
      Participant (or, in the event of the Participant's death, the personal
      representative of the Participant's estate or the person or persons to whom
      this
      option is transferred pursuant to the Participant's will or in accordance with
      the laws of descent and distribution) may exercise that
      portion of this option that was vested and exercisable
      until
      the earlier of (A) twelve (12) months following the date of such cessation
      of Board Service, or (B) the Expiration Date.

    


    (ii) During
      the post−Board Service period, this option may not be exercised in the aggregate
      for more than the number of vested Shares for which the Option was exercisable
      at the time of the Participant's cessation of Board Service.

    


    (iii) Should
      the Participant cease to serve as a Board member by reason of death or
      Disability, then vesting under this option shall accelerate and this option
      shall become exercisable with respect to the total number of Option Shares
      subject to this option and may be exercised for any or all of those Option
      Shares until the earlier of (A) twelve (12) months following cessation of Board
      Service or (B) the Expiration Date.

    


    (iv) This
      option shall, immediately upon the Participant's cessation of Board Service
      for
      any reason other than death or Disability, terminate and cease to be outstanding
      to the extent the Option is not otherwise at that time exercisable for vested
      Shares.

    


    6. Special
      Acceleration of Option.
      Except
      as otherwise expressly provided in a Participant’s employment or other
      applicable agreement, which shall supersede the provisions of this Paragraph
      6
solely
      to the
      extent that the rights and privileges under such agreement, as determined by
      the
      Committee, in its discretion, are not reasonably likely to significantly
      diminish the rights and benefits that would otherwise be provided under this
      paragraph 6:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (a) In
      the
      event of a Corporate Transaction, vesting under this option shall automatically
      accelerate so that, immediately prior to the effective date of the Corporate
      Transaction, this option shall become exercisable with respect to the total
      number of Option Shares at the time subject to this option and may be exercised
      for any or all of those Option Shares. [However, vesting under this option
      shall
      not so accelerate if and to the extent: (i) this option is, in connection
      with the Corporate Transaction, either to be assumed by the successor
      corporation (or parent thereof) or to be replaced with a comparable option
      to
      purchase shares of the capital stock of the successor corporation (or parent
      thereof), or (ii) this option is to be replaced with a cash incentive program
      of
      the successor corporation which preserves the spread existing on any unvested
      Option Shares at the time of the Corporate Transaction (the excess of the Fair
      Market Value of those Option Shares over the aggregate Exercise Price payable
      for such Option Shares) and provides for subsequent pay-out in accordance with
      the same option vesting schedule set forth in the Notice of Award. The
      determination of comparability under clause (i) above shall be made by the
      Committee, and its determination shall be final, binding and conclusive.
      Notwithstanding the foregoing, the Committee shall have the discretion,
      exercisable at any time during the term of this Award Agreement, to provide
      for
      the automatic acceleration of all or a portion of this option upon the
      occurrence of a Corporate Transaction, whether or not this option is to be
      assumed or replaced in the Corporate Transaction.]

    


    (b) In
      the
      event Participant's Service is terminated by reason of an Involuntary
      Termination within eighteen (18) months following the effective date of any
      Corporate Transaction in which this option is assumed or replaced and does
      not
      otherwise accelerate, vesting under this option shall accelerate automatically
      and this option shall remain exercisable until the earlier of (i) the Expiration
      Date or (ii) the expiration of a one (1)−year period measured from the effective
      date of the Involuntary Termination.

    


    (c) If
      this
      option is assumed in connection with a Corporate Transaction, then this option
      shall be appropriately adjusted, immediately after such Corporate Transaction,
      to apply to the number and class of securities which would have been issuable
      to
      Participant in consummation of such Corporate Transaction had the option been
      exercised immediately prior to such Corporate Transaction, and appropriate
      adjustments shall also be made to the Exercise Price per Share, provided
      the
      aggregate Exercise Price shall remain the same.

    


    (d) Upon
      the
      occurrence of [ a Change in Control or ] [the termination of Participant's
      Service by reason of an Involuntary Termination within eighteen (18) months
      following the effective date of a Change in Control], vesting under
      this
      option shall
      accelerate automatically and this option shall become exercisable with respect
      to the total number of Shares at the time subject to this option and
shall
      remain exercisable until the earlier of (i) the Expiration Date or (ii) if
      applicable, the expiration of the a (1)−year period measured from the effective
      date of the Involuntary Termination.

    


    (e) This
      Award Agreement shall not in any way affect the right of the Company to adjust,
      reclassify, reorganize or otherwise change its capital or business structure
      or
      to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
      of its business or assets.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Repurchase
      Right.
      if
      at any
      time Participant’s Service is terminated for Cause or if Participant shall
      breach any post-termination covenants set forth in any written agreement between
      Participant and the Company, the Company may, in its discretion, for a period
      of
      one year after the termination for Cause or the actual discovery by the Company
      of the breach, as the case may be, and upon 10 (ten) days’ notice to
      Participant, (i) repurchase all or any portion of any Option Shares acquired
      by
      Participant upon Participant’s exercise of this option, and/or (ii) require
      Participant to repay to the Company the amount of any profits realized by
      Participant upon the sale or other disposition during the preceding three years
      of any Option Shares acquired by Participant upon Participant’s exercise of this
      option. The purchase price for any Shares repurchased by the Company pursuant
      to
      clause (i) of this Section 7 shall be the lesser of the price paid by
      Participant to acquire such Shares and the Fair Market Value thereof on the
      date
      of such purchase by the Company.

    


    8. Adjustment
      in Option Shares.
      Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the Company's
      receipt of consideration, appropriate adjustments shall be made to (i) the
      total
      number and/or class of securities subject to this option and (ii) the Exercise
      Price in order to reflect such change and thereby preclude a dilution or
      enlargement of benefits hereunder.

    


    9. Stockholder
      Rights.
      The
      holder of this option shall not have any stockholder rights with respect to
      the
      Option Shares until such person shall have exercised the option, paid the
      Exercise Price and become a holder of record of the purchased
      Shares.

    


    10. Manner
      of Exercising Option.

    


    (a) In
      order
      to exercise this option with respect to all or any part of the Option Shares
      for
      which this option is at the time exercisable, Participant (or any other person
      or persons exercising the option) must take the following actions:

    


    (i) Execute
      and deliver to the Company a Notice of Exercise for the Option Shares for which
      the option is exercised.

    


    (ii) Pay
      the
      aggregate Exercise Price for the purchased Shares in one or more of the
      following forms:

    


    (A) cash
      or
      check made payable to the Company;

    


    (B) Shares
      held by Participant (or any other person or persons exercising the option)
      for
      the requisite period necessary to avoid a charge to the Company's earnings
      for
      financial reporting purposes and valued at Fair Market Value on the Exercise
      Date; or

    


    (C) provided
      that no restrictions against trading in the Shares are then in effect, as
      contemplated by Paragraph 11, through a special sale and remittance procedure
      pursuant to which Participant (or any other person or persons exercising the
      option) shall concurrently provide irrevocable instructions (I) to a
      Company-approved brokerage firm to effect the immediate sale of the purchased
      Shares and remit to the Company, out of the sale proceeds available on the
      settlement date, sufficient funds to cover the aggregate Exercise Price payable
      for the purchased Shares plus all applicable income and employment taxes
      required to be withheld by the Company by reason of such exercise and (II)
      to
      the Company to deliver the certificates for the purchased Shares directly to
      such brokerage firm in order to complete the sale. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Except
      to
      the extent the sale and remittance procedure is utilized in connection with
      the
      option exercise, payment of the Exercise Price must accompany the Notice of
      Exercise delivered to the Company in connection with the option
      exercise.

    


    (iii) Furnish
      to the Company appropriate documentation that the person or persons exercising
      the option (if other than Participant) have the right to exercise this
      option.

    


    (iv) Make
      appropriate arrangements with the Company (or Parent or Subsidiary employing
      or
      retaining Participant) for the satisfaction of all income and employment tax
      withholding requirements applicable to the option exercise.

    


    (b) As
      soon
      as practical after the Exercise Date, the Company shall issue to or on behalf
      of
      Participant (or any other person or persons exercising this option) a
      certificate for the purchased Option Shares, with the appropriate legends
      affixed thereto.

    


    (c) In
      no
      event may this option be exercised for any fractional shares.

    


    11. Compliance
      with Laws and Regulations.

    


    (a) The
      exercise of this option and the issuance of the Option Shares upon such exercise
      shall be subject to compliance by the Company and Participant with all
      applicable requirements of law relating thereto and with all applicable
      regulations of any stock exchange (or the Nasdaq National Market, if applicable)
      on which the Common Stock may be listed for trading at the time of such exercise
      and issuance.

    


    (b) The
      inability of the Company to obtain approval from any regulatory body having
      authority deemed by the Company to be necessary to the lawful issuance and
      sale
      of any Common Stock pursuant to this option shall relieve the Company of any
      liability with respect to the non-issuance or sale of the Common Stock as to
      which such approval shall not have been obtained. The Company, however, shall
      use its best efforts to obtain all such approvals.

    


    12. Successors
      and Assigns.
      Except
      to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this
      Award Agreement shall inure to the benefit of, and be binding upon, the Company
      and its successors and assigns and Participant and Participant's assigns and
      Beneficiaries.

    


    13. Notices.
      Any
      notice required to be given or delivered to the Company under the terms of
      this
      Award Agreement shall be in writing and addressed to the Company at its
      principal corporate offices. Any notice required to be given or delivered to
      Participant shall be in writing and addressed to Participant at the address
      indicated below Participant's signature line on the Notice of Award. All notices
      shall be deemed effective upon personal delivery or upon deposit in the U.S.
      mail, postage prepaid and properly addressed to the party to be
      notified.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14. Construction.
      This
      Award Agreement and the option evidenced hereby are made and granted pursuant
      to
      the Plan and are in all respects limited by and subject to the terms of the
      Plan. All decisions of the Committee with respect to any question or issue
      arising under the Plan or this Award Agreement shall be conclusive and binding
      on all persons having an interest in this option.

    


    15. Governing
      Law.
      The
      interpretation, performance and enforcement of this Award Agreement shall be
      governed by the laws of the State of Delaware without resort to that State's
      conflict-of-laws rules.

    


    16. Excess
      Shares.
      If the
      Option Shares covered by this Award Agreement exceed, as of the Award Date,
      the
      number of Shares which may without stockholder approval be issued under the
      Plan, then this option shall be void with respect to those excess Shares, unless
      stockholder approval of an amendment sufficiently increasing the number of
      Shares issuable under the Plan is obtained in accordance with the provisions
      of
      the Plan.

    


    17. Additional
      Terms Applicable to an Incentive Stock Option.
      The
      terms
      of any Incentive Stock Option granted under the Plan shall be designed to comply
      in all respects with the provisions of Sections 422 of the Code, or any
      successor provision
      thereto, and any regulations promulgated thereunder. Notwithstanding anything
      in
      this Section 17 to the contrary, Options designated as Incentive Stock
      Options shall not be eligible for treatment under the Code as Incentive Stock
      Options (and will be deemed to be Non-Qualified Stock Options) to the extent
      that either (1) the aggregate Fair Market Value of Shares (determined as of
      the time of grant) with respect to which such Options are exercisable for the
      first time by Participant during any calendar year (under all plans of the
      Company and any Subsidiary) exceeds $100,000, taking Options into account in
      the
      order in which they were granted, or (2) such Options otherwise remain
      exercisable but are not exercised within three (3) months of termination of
      employment (or such other period of time provided in Section 422 of the
      Code).

    


    18. Leave
      of Absence.
      The
      following provisions shall apply upon Participant's commencement of an
      authorized leave of absence:

    


    (a) The
      exercise schedule in effect under the Notice of Award shall be frozen as of
      the
      first day of the authorized leave, and this option shall not become exercisable
      for any additional installments of the Option Shares during the period
      Participant remains on such leave.

    


    (b) Should
      Participant resume active Employee status within sixty (60) days after the
      start
      date of the authorized leave, Participant shall, for purposes of the exercise
      schedule set forth in the Notice of Award, receive Service credit for the entire
      period of such leave. If Participant does not resume active Employee status
      within such sixty (60)-day period, then no Service credit shall be given for
      the
      period of such leave.

    


    (c) If
      this
      option is designated as an Incentive Stock Option in the Notice of Award, then
      the following additional provision shall apply:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) If
      the
      leave of absence continues for more than ninety (90) days, then this option
      shall automatically convert to a Non-Qualified Stock Option at the end of the
      three (3)-month period measured from the ninety-first (91st) day of such leave,
      unless Participant's reemployment rights are guaranteed by statute or by written
      agreement. Following any such conversion of this option, all subsequent
      exercises of this option, whether effected before or after Participant's return
      to active Employee status, shall result in an immediate taxable event, and
      the
      Company shall be required to collect from Participant the income and employment
      withholding taxes applicable to such exercise.

    


    (ii) In
      no
      event shall this option become exercisable for any additional Option Shares
      or
      otherwise remain outstanding if Participant does not resume Employee status
      prior to the Expiration Date of the option term.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    


    


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EXHIBIT
      I

    NOTICE
      OF EXERCISE

    


    


    I
      hereby
      notify Discovery Laboratories, Inc. (the "Company") that I elect to purchase
      _________ shares
      of
      the Company's Common Stock (the "Purchased Shares") at the option exercise
      price
      of $_________ per
      share
      (the "Exercise Price") pursuant to that certain option (the "Option") granted
      to
      me under the Company's 2007 Stock Incentive Plan on
      _________________ ,___ .

    


    Concurrently
      with the delivery of this Exercise Notice to the Company, I shall hereby pay
      to
      the Company the Exercise Price for the Purchased Shares in accordance with
      the
      provisions of my agreement with the Company (or other documents) evidencing
      the
      Option and shall deliver whatever additional documents may be required by such
      agreement as a condition for exercise. Alternatively, if I am eligible I may
      utilize the special broker-dealer sale and remittance procedure specified in
      my
      agreement to effect payment of the Exercise Price.

     

     

    
      
        	____________________	 	 	 
	
                Date

              	 	 	 
	 	 	 	 
	 	 	 
	
                 

              	 	
                Participant

              
	 	 	 	 
	
                 

              	 	
                Address:

              	 
	 	 	 	 
	 	 	 
	 	 	 	 
	
                Print
                  name in exact manner

              	 	 	 
	
                it
                  is to appear on the

              	 	 	 
	
                stock
                  certificate:

              	 	 
	 	 	 	 
	
                Address
                  to which certificate

              	 	 	 
	
                is
                  to be sent, if different

              	 	 	 
	
                from
                  address above:

              	 	 
	 	 	 	 
	 	 	 
	 	 	 
	
                Social
                  Security Number:

              	 	 
	 	 	 	 
	
                Employee
                  Number:

              	 	 


      

    

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    


    


    


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    APPENDIX

    


    The
      following definitions shall be in effect under the Award
      Agreement:


    Award
      Agreement
      shall
      mean this Stock Option Agreement.

    


    Award
      Date
      shall
      mean the date of grant of the option as specified in the Notice of
      Award.

    


    Beneficiary
      shall
      mean, in the event the Committee implements a beneficiary designation procedure,
      the person designated by Participant, pursuant to such procedure, to succeed
      to
      such person's rights under any outstanding awards held by Participant at the
      time of death. In the absence of such procedure or designation, the Beneficiary
      shall be Participant’s personal representative or the person or persons to whom
      the Award is transferred by will or the laws of descent and
      distribution.

    


    Board
      shall
      mean the Company's Board of Directors.

    


    Cause,
      with
      respect to any Employee or Consultant of the Company or a Subsidiary, shall
      have
      the meaning set forth in such person’s employment, consulting or other
      applicable agreement, or, in the absence of any such agreement or if such term
      is not defined in any such agreement, shall mean any one or more of the
      following, as determined by the Committee:

    


    
      	 	
              (i)

            	
              willful
                misconduct or gross negligence in the performance of such person’s duties;
                

            


    

    


    
      	 	
              (ii)

            	
              willful
                and continued failure or refusal to perform satisfactorily any duties
                reasonably requested in the course of such person’s employment by, or
                service to, the Company (other than a failure resulting from such
                person’s
                disability); or

            


    

    


    
      	 	
              (iii)

            	
              fraudulent,
                dishonest or other improper conduct engaged in by such person that
                causes,
                or has the potential to cause, harm to the Company or any of its
                Subsidiaries, or its or their business or reputation, including,
                without
                limitation, such person’s violation of any policies of the Company
                applicable to the such person, such person’s violation of laws, rules or
                regulations applicable to such person, criminal activity, habitual
                drunkenness or use of illegal
                drugs.

            


    

    


    


    Change
      in Control
      shall
      have the meaning, if any, set forth in a Participant’s employment, consulting or
      other applicable agreement, or, if such term is not defined in any such
      agreement, shall mean the occurrence of any of the following
      events:

    


    
      	 	
              (i)

            	
              the
                acquisition, directly or indirectly by any person or related group
                of
                persons (other than the Company or a person that directly or indirectly
                controls, is controlled by, or is under common control with, the
                Company),
                of beneficial ownership (within the meaning of Rule 13d-3 of the
                Securities Exchange Act of 1934, as amended) of securities possessing
                more
                than thirty-five percent (35%) of the total combined voting power
                of the
                Company’s outstanding securities;

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              a
                change in the composition of the Board over a period of thirty-six
                (36)
                consecutive months or less such that a majority of the Board ceases
                to
                consist of Incumbent Members, which term means members of the Board
                on the
                first day of such period and any person becoming a member of the
                Board
                subsequent to such date whose election or nomination for election
                was
                approved by two-thirds of the members of the Board who then comprised
                the
                Incumbent Directors; or

            


    

    


    
      	 	
              (iii)

            	
              the
                Company combines with another company and is the surviving corporation
                but, immediately after the combination, the shareholders of the Company
                immediately prior to the combination hold, directly or indirectly,
                by
                reason of their being stockholders of the Company, fifty percent
                (50%) or
                less of the voting stock of the combined
                entity.

            


    

    


    Code
      shall
      mean the Internal Revenue Code of 1986, as amended from time to
      time.

    


    Committee
      shall
      mean a committee of the Board, acting in accordance with the provisions of
      Section 3 of the Plan, designated by the Board to administer the
      Plan.

    


    Common
      Stock
      shall
      mean the Company's common stock.

    


    Consultant
      shall
      mean any person, including a Director, who is not an Employee and who is engaged
      by the Company (or a Subsidiary) to render services to or for the benefit of
      the
      Company and is compensated for such services.

    


    Corporate
      Transaction
      shall
      mean a liquidation of the Company, a sale of all or substantially all of the
      Company’s assets, or a merger, consolidation or similar transaction in which the
      Company is not the surviving entity or survives as a wholly-owned or
      majority-owned subsidiary of another entity.

    


    Director
      shall
      mean a member of the Board.

    


    Disability
      shall
      have the meaning set forth in Participant’s employment agreement or other
      similar agreement with the Company; provided,
      that,
      if such term is not defined in any such agreement or if Participant is not
      a
      party to any such agreement, then “Disability” shall mean a permanent and total
      disability, within the meaning of Section 22(e)(3) of the Code.

    


    Employee
      shall
      mean any person treated as an employee (including officers and directors) in
      the
      records of the Company or any Subsidiary and who is subject to the control
      and
      direction of the Company or any Subsidiary with regard to both the work to
      be
      performed and the manner and method of performance.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exercise
      Date
      shall
      mean the date on which the option shall have been exercised in accordance with
      Paragraph 10 of this Award Agreement.

    


    Exercise
      Date
      shall
      mean the purchase price
      payable
      for Option Shares under this option, as specified in the Notice of
      Award.

    


    Expiration
      Date
      shall
      mean the date on which the option expires as specified in the Notice of
      Award.

    


    Fair
      Market Value
      per
      share of Common Stock on any relevant date shall be determined in accordance
      with the following provisions:

    


    
      	 	
              (i)

            	
              if
                the Shares are listed or admitted for trading on any United States
                national securities exchange, or if actual transactions are otherwise
                reported on a consolidated transaction reporting system, the last
                reported
                sale price of a Share on such exchange or reporting system, as reported
                in
                any newspaper of general circulation, or


            


    

    


    
      	 	
              (ii)

            	
              if
                clause (i) is not applicable, the mean of the high bid and low asked
                quotations for a Share as reported by the National Quotation Bureau,
                Incorporated if at least two securities dealers have inserted both
                bid and
                asked quotations for the Shares on at least five of the 10 preceding
                trading days; or

            


    

    


    
      	 	
              (iii)

            	
              if
                the information set forth in clauses (i) through (ii) above is unavailable
                or inapplicable to the Company (e.g., if the Shares are not then
                publicly
                traded or quoted), then the “Fair Market Value” of a Share shall be the
                fair market value (i.e., the price at which a willing seller would
                sell a
                Share to a willing buyer when neither is acting under compulsion
                and when
                both have reasonable knowledge of all relevant facts) of a Share
                on such
                date as the Committee in its sole and absolute discretion shall determine
                in a fair and uniform manner.

            


    

    


    Incentive
      Stock Option
      shall
      mean an option that is intended to meet the requirements of Section 422 of
      the
      Code

    


    Involuntary
      Termination
      shall
      mean the termination of the Service of any individual which occurs by reason
      of:

    


    
      	 	
              (i)

            	
              such
                individual’s involuntary dismissal or discharge by the Company for reasons
                other than Cause, or

            


    

    


    
      	 	
              (ii)

            	
              such
                individual’s voluntary resignation following (A) a change in his or her
                position with the Company (or Subsidiary employing such individual)
                which
                materially reduces such individual’s duties and responsibilities or the
                level of management to which such individual reports, (B) a reduction
                in
                such individual’s level of compensation (including base salary, fringe
                benefits and target bonus under any corporate performance-based bonus
                or
                incentive programs) by more than fifteen percent (15%) or (C) a relocation
                of such individual’s place of employment by more than fifty (50) miles,
                provided and only if such change, reduction or relocation is effected
                by
                the Company without such individual’s consent.


            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Non-Employee
      Director
      shall
      mean a Director who is not also an Employee.

    


    Non-Qualified
      Stock Option
      shall
      mean an option granted under this Award Agreement that is not intended to be
      an
      Incentive Stock Option.

    


    Notice
      of Award
      shall
      mean the Notice of Award of Stock Option accompanying the Award Agreement,
      pursuant to which Participant has been informed of the basic terms of the option
      evidenced hereby.

    


    Notice
      of Exercise
      shall
      mean the notice of exercise in the form attached hereto as Exhibit
      I.

    


    Option
      Shares
      shall
      mean the number of Shares subject to the option as specified in the Notice
      of
      Award.

    


    Participant
      shall
      mean the person to whom the option is granted as specified in the Notice of
      Award.

    


    Plan
      shall
      mean the Company's 2007 Long-Term Incentive Plan.

    


    Service
      shall
      mean Participant's performance of services for the Company (or any Subsidiary)
      in the capacity of an Employee, a Non-Employee Director or a
      Consultant.

    


    Shares
      shall
      mean the common shares of the Company and such other securities as may become
      the subject of Awards, or become subject to Awards, pursuant to an adjustment
      made under Section 4(b) of the Plan.

    


    Subsidiary
      shall
      mean a subsidiary company as defined in Section 424(f) of the Code (with the
      Company being treated as the employer corporation for purposes of this
      definition).