LIMONEIRA
COMPANY

      2010 OMNIBUS INCENTIVE
PLAN

      


      


      Section 1.   Purpose.   The
purposes of this Limoneira Company 2010 Omnibus Incentive Plan are to promote
the interests of Limoneira Company and its stockholders by (i) attracting
and retaining employees and directors of, and consultants to, the Company and
its Affiliates, as defined below; (ii) motivating such individuals by means
of performance-related incentives to achieve longer-range performance goals; and
(iii) enabling such individuals to participate in the long-term growth and
financial success of the Company.

      


      Section 2.   Definitions.   As used in
the Plan, the following terms shall have the meanings set forth
below:

      


      “Affiliate” shall mean any
entity (i) that, directly or indirectly, is controlled by, controls or is under
common control with, the Company or (ii) in which the Company has a significant
equity interest, in either case as determined by the Committee.

      


      “Award” shall mean any
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award, Performance Award, Other Stock-Based Award or Performance Compensation
Award made or granted from time to time hereunder.

      


      “Award Agreement” shall mean
any written agreement, contract, or other instrument or document evidencing any
Award, which may, but need not, be executed or acknowledged by a
Participant.

      


      “Board” shall mean the Board
of Directors of the Company.

      


      “Cause” as a reason for a
Participant’s termination of employment or service shall have the meaning
assigned such term in the employment, severance or similar agreement, if any,
between the Participant and the Company or an Affiliate.   If the
Participant is not a party to an employment, severance or similar agreement with
the Company or an Affiliate in which such term is defined, then unless otherwise
defined in the applicable Award Agreement, “Cause” shall mean: (i) the
intentional engagement in any acts or omissions constituting dishonesty, breach
of a fiduciary obligation, wrongdoing or misfeasance, in each case, in
connection with a Participant’s duties or otherwise during the course of a
Participant’s employment or service with the Company or an Affiliate; (ii) the
commission of a felony or the indictment for any felony, including, but not
limited to, any felony involving fraud, embezzlement, moral turpitude or theft;
(iii) the intentional and wrongful damaging of property, contractual interests
or business relationships of the Company or an Affiliate; (iv) the
intentional and wrongful disclosure of secret processes or confidential
information of the Company or an Affiliate in violation of an agreement with or
a policy of the Company or an Affiliate; (v) the continued failure to
substantially perform the Participant’s duties for the Company or an Affiliate;
(vi) current alcohol or prescription drug abuse affecting work performance;
(vii) current illegal use of drugs; or (viii) any intentional conduct contrary
to the Company’s or an Affiliate’s written policies or practices.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Change of Control” shall
mean the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of the Company to any “person” or “group”
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),
(ii) any person or group is or becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have “beneficial ownership” of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than fifty percent (50%)
of the total voting power of the voting stock of the Company, including by way
of merger, consolidation or otherwise or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors of the Company, then still in office, who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved, but excluding any director
whose initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) cease for any reason to constitute
a majority of the Board, then in office.

      


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

      


      “Committee” shall mean a
committee of the Board designated by the Board to administer the Plan and
composed of not less than two directors, each of whom is required to be a
“Nonemployee Director” (within the meaning of Rule 16b-3) and an “outside
director” (within the meaning of Section 162(m) of the Code) to the extent Rule
16b-3 and Section 162(m) of the Code, respectively, are applicable to the
Company and the Plan.   If at any time such a committee has not
been so designated, the Board shall constitute the Committee.

      


      “Company” shall mean
Limoneira Company, a Delaware corporation, together with any successor
thereto.

      


      “Covered Employee” shall mean
a “covered employee” as defined in Code Section 162(m)(3).

      


      “Effective Date” shall have
the meaning ascribed to it in Section 16(a).

      


      “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

      


      “Existing Plan” shall mean the
Limoneira Company Stock Grant Performance Bonus Plan.

      


      “Fair Market Value” shall
mean (i) with respect to any property other than Shares, the fair market value
of such property determined by such methods or procedures as shall be
established from time to time by the Committee and (ii) with respect to the
Shares, as of any date, (1) the closing sale price (excluding any “after hours”
trading) of the Shares as reported on the Nasdaq Stock Market for such date (or
if not then trading on the Nasdaq Stock Market, the closing sale price of the
Shares on the stock exchange or over-the-counter market on which the Shares are
principally trading on such date), or, if there were no sales on such date, on
the closest preceding date on which there were sales of Shares or (2) in the
event there shall be no public market for the Shares on such date, the fair
market value of the Shares as determined in good faith by the
Committee.

       

      
        
          
          

        

        
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      “Good Reason” as a reason for
a Participant’s termination of employment or service shall have the meaning
assigned such term in the employment, severance or similar agreement, if any,
between the Participant and the Company or an Affiliate.   If the
Participant is not a party to an employment, severance or similar agreement with
the Company or an Affiliate in which such term is defined, then unless otherwise
defined in the applicable Award Agreement, for purposes of this Plan, the
Participant shall not be entitled to terminate his or her employment or service
for Good Reason.

      


      “Incentive Stock Option”
shall mean a right to purchase Shares from the Company that is granted
under Section 6 of the Plan and that is intended to meet the requirements of
Section 422 of the Code or any successor provision
thereto.   Incentive Stock Options may be granted only to
Participants who meet the definition of “employees” under Section 3401(c) of the
Code.

      


      “Negative Discretion” shall
mean the discretion authorized by the Plan to be applied by the Committee to
eliminate or reduce the size of a Performance Compensation Award; provided that the exercise of
such discretion would not cause the Performance Compensation Award to fail to
qualify as “performance-based compensation” under Section 162(m) of the
Code.   By way of example and not by way of limitation, in no
event shall any discretionary authority granted to the Committee by the Plan
including, but not limited to, Negative Discretion, be used to (a) grant or
provide payment in respect of Performance Compensation Awards for a Performance
Period if the Performance Goals for such Performance Period have not been
attained, or (b) increase a Performance Compensation Award above the maximum
amount payable under Section 4(a) or Section 11(d)(vi) of the
Plan.   In no event shall Negative Discretion be exercised by the
Committee with respect to any Option or Stock Appreciation Right (other than an
Option or Stock Appreciation Right that is intended to be a Performance
Compensation Award under Section 11 of the Plan).

      


      “Nonqualified Stock Option” shall mean a
right to purchase Shares from the Company that is granted under Section 6 of the
Plan and that is not intended to be an Incentive Stock Option.

      


      “Option” shall mean an
Incentive Stock Option or a Nonqualified Stock Option.

      


      “Other Stock-Based Award”
shall mean any right granted under Section 10 of the Plan.

      


      “Participant” shall mean any employee of,
or consultant to, the Company or its Affiliates, or nonemployee director who is
a member of the Board or the board of directors of an Affiliate, eligible for an
Award under Section 5 of the Plan and selected by the Committee to receive an
Award under the Plan.

      


      “Performance Award” shall
mean any right granted under Section 9 of the Plan.

      


      “Performance Compensation Award”
shall mean any Award designated by the Committee as a Performance
Compensation Award pursuant to Section 11 of the Plan.

       

      
        
          
          

        

        
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      “Performance Criteria” shall
mean the criterion or criteria that the Committee shall select for purposes of
establishing the Performance Goal(s) for a Performance Period with respect to
any Performance Compensation Award under the Plan.   The
Performance Criteria that will be used to establish the Performance Goal(s)
shall be based on the attainment of specific levels of performance of the
Company (or an Affiliate, division or operational unit of the Company) and shall be limited to the
following:   return on net assets, return on stockholders’
equity, return on assets, return on capital, revenue, average revenue per
subscriber, stockholder returns, profit margin, earnings per Share, net
earnings, operating earnings, free cash flow, earnings before interest, taxes,
depreciation and amortization, number of subscribers, growth of subscribers,
operating expenses, capital expenses, subscriber acquisition costs, Share price,
enterprise value, equity market capitalization or sales or market
share.   To the extent required under Section 162(m) of the Code,
the Committee shall, within the first ninety (90) days of a Performance Period
(or, if longer, within the maximum period allowed under Section 162(m) of the
Code), define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period.

      


      “Performance Formula” shall
mean, for a Performance Period, one or more objective formulas applied against
the relevant Performance Goals to determine, with regard to the Performance
Compensation Award of a particular Participant, whether all, some portion but
less than all, or none of the Performance Compensation Award has been earned for
the Performance Period.

      


      “Performance Goals” shall
mean, for a Performance Period, one or more goals established by the Committee
for the Performance Period based upon the Performance
Criteria.   The Committee is authorized at any time during the
first ninety (90) days of a Performance Period, or at any time thereafter (but
only to the extent the exercise of such authority after the first ninety (90)
days of a Performance Period would not cause the Performance Compensation Awards
granted to any Participant for the Performance Period to fail to qualify as
“performance-based compensation” under Section 162(m) of the Code), in its sole
discretion, to adjust or modify the calculation of a Performance Goal for such
Performance Period to the extent permitted under Section 162(m) of the Code in
order to prevent the dilution or enlargement of the rights of Participants, (a)
in the event of, or in anticipation of, any unusual or extraordinary corporate
item, transaction, event or development affecting the Company; or (b) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

      


      “Performance Period” shall
mean the one or more periods of time of at least one (1) year in duration, as
the Committee may select, over which the attainment of one or more Performance
Goals will be measured for the purpose of determining a Participant’s right to
and the payment of a Performance Compensation Award.

      


      “Person” shall mean any
individual, corporation, partnership, association, limited liability company,
joint-stock company, trust, unincorporated organization, government or political
subdivision.

      


      “Plan” shall mean this
Limoneira Company 2010 Omnibus Incentive Plan.

       

      
        
          
          

        

        
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      “Restricted Stock” shall mean
any Share granted under Section 8 of the Plan.

      


      “Restricted Stock Unit” shall
mean any unit granted under Section 8 of the Plan.

      


      “Rule 16b-3” shall mean Rule
16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any
successor rule or regulation thereto as in effect from time to
time.

      


      “SEC” shall mean the
Securities and Exchange Commission or any successor thereto and shall include
the Staff thereof.

      


      “Shares” shall mean the
common stock of the Company, $0.01 par value, or such other securities of the
Company (i) into which such common stock shall he changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of
shares or other similar transaction or (ii) as may be determined by the
Committee pursuant to Section 4(b) of the Plan.

      


      “Stock Appreciation Right”
shall mean any right granted under Section 7 of the Plan.

      


      “Substitute Awards” shall
have the meaning specified in Section 4(c) of the Plan.

      


      Section 3.   Administration.   a) The
Plan shall be administered by the Committee.   Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee shall
have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant and designate those
Awards which shall constitute Performance Compensation Awards; (iii) determine
the number of Shares to be covered by, or with respect to which payments,
rights, or other matters are to be calculated in connection with, Awards; (iv)
determine the terms and conditions of any Award; (v) determine whether, to what
extent, and under what circumstances Awards may be settled or exercised in cash,
Shares, other securities, other Awards or other property, or canceled,
forfeited, or suspended and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine whether,
to what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable
with respect to an Award (subject to Section 162(m) of the Code with respect to
Performance Compensation Awards) shall be deferred either automatically or at
the election of the holder thereof or of the Committee (in each case consistent
with Section 409A of the Code); (vii) interpret, administer or reconcile any
inconsistency, correct any defect, resolve ambiguities and/or supply any
omission in the Plan, any Award Agreement, and any other instrument or agreement
relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; (ix) establish and
administer Performance Goals and certify whether, and to what extent, they have
been attained; and (x) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.

      


      (b)   Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive, and binding upon all Persons, including the
Company, any Affiliate, any Participant, any holder or beneficiary of any Award,
and any stockholder.

       

      
        
          
          

        

        
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      (c)   The
mere fact that a Committee member shall fail to qualify as a “Nonemployee
Director” or “outside director” within the meaning of Rule 16b-3 and Section
162(m) of the Code, respectively, shall not invalidate any Award made by the
Committee which Award is otherwise validly made under the Plan.

      


      (d)   No
member of the Committee shall be liable to any Person for any action or determination
made in good faith with respect to the Plan or any Award hereunder.

      


      (e)   With
respect to any Performance Compensation Award granted to a Covered
Employee   under the Plan, the Plan shall be interpreted and
construed in accordance with Section 162(m) of the Code.

      


      (f)   The
Committee may delegate to one or more officers of the Company (or, in the case
of awards of Shares, the Board may delegate to a committee made up of one or
more directors) the authority to grant awards to Participants who are not
executive officers or directors of the Company subject to Section 16 of the
Exchange Act or Covered Employees.

      


      Section 4.   Shares
Available for Awards.

      


      (a)   Shares
Available.

      


      (i)   Subject
to adjustment as provided in Section 4(b), the aggregate number of Shares with
respect to which Awards may be granted from time to time under the Plan shall in
the aggregate not exceed, at any time, 100,000 Shares; provided, that the aggregate
number of Shares with respect to which Incentive Stock Options may be granted
under the Plan shall be 80,000.   The maximum number of Shares
with respect to which Options and Stock Appreciation Rights may be granted to
any Participant in any fiscal year shall be 20,000 and the maximum number of
Shares which may he paid to a Participant in the Plan in connection with the
settlement of any Award(s) designated as “Performance Compensation Awards” in
respect of a single Performance Period shall be 50,000 or, in the event such
Performance Compensation Award is paid in cash, the equivalent cash value
thereof.

      


      (ii)   Shares
covered by an Award granted under the Plan shall not be counted unless and until
they are actually issued and delivered to a Participant and, therefore, the
total number of Shares available under the Plan as of a given date shall not be
reduced by Shares relating to prior Awards that have expired or have been
forfeited or cancelled, and upon payment in cash of the benefit provided by any
Award, any Shares that were covered by such Award will be available for issue
hereunder.   Notwithstanding anything to the contrary contained
herein: (A) if Shares are tendered or otherwise used in payment of the exercise
price of an Option, the total number of Shares covered by the Option being
exercised shall reduce the aggregate limit described in Section 4(a)(i); (B)
Shares withheld by the Company to satisfy a tax withholding obligation shall
count against the aggregate limit described in Section 4(a)(i); and (C) the
number of Shares covered by a Stock Appreciation Right, to the extent that it is
exercised and settled in Shares, and whether or not Shares are actually issued
to the Participant upon exercise of the Stock Appreciation Right, shall be
considered issued or transferred pursuant to the Plan.   If,
under this Plan, a Participant has elected to give up the right to receive
compensation in exchange for Shares based on fair market value, such Shares will
not count against the aggregate limit described in Section 4(a)(i).

       

      
        
          
          

        

        
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      (b)   Adjustments.   Notwithstanding
any provisions of the Plan to the contrary, in the event that the Committee
determines in its sole discretion that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other corporate
transaction or event affects the Shares such that an adjustment is appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee shall
equitably adjust any or all of (i) the number of Shares or other securities of
the Company (or number and kind of other securities or property) with respect to
which Awards may be granted, (ii) the number of Shares or other securities of
the Company (or number and kind of other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award in consideration for the cancellation of such Award,
which, in the case of Options and Stock Appreciation Rights shall equal the
excess, if any, of the Fair Market Value of the Share subject to each such
Option or Stock Appreciation Right over the per Share exercise price or grant
price of such Option or Stock Appreciation Right.

      


      (c)   Substitute
Awards.   Awards may, in the discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or its Affiliates or a company acquired
by the Company or with which the Company combines (“Substitute
Awards”).   The number of Shares underlying any Substitute Awards
shall be counted against the aggregate number of Shares available for Awards
under the Plan.

      


      (d)   Sources of Shares Deliverable Under
Awards.   Any Shares delivered pursuant to an Award may
consist, in whole or in part, of authorized and unissued Shares or of treasury
Shares.

      


      Section 5.   Eligibility.   Any
employee of, or consultant to, the Company or any of its Affiliates (including
any prospective employee), or nonemployee director who is a member of the Board
or the board of directors of an Affiliate, shall be eligible to be selected as a
Participant.

      


      Section 6.   Stock Options.

      


      (a)   Grant.   Subject
to the terms of the Plan, the Committee shall have sole authority to determine
the Participants to whom Options shall be granted, the number of Shares to be
covered by each Option, the exercise price thereof and the conditions and
limitations applicable to the exercise of the Option.   The
Committee shall have the authority to grant Incentive Stock Options, or to grant
Nonqualified Stock Options, or to grant both types of
Options.   In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as may
be prescribed by Section 422 of the Code, as from time to time amended, and any
regulations implementing such statute.   All Options when granted
under the Plan are intended to be Nonqualified Stock Options, unless the
applicable Award Agreement expressly states that the Option is intended to be an
Incentive Stock Option.   If an Option is intended to be an
Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
Nonqualified Stock Option appropriately granted under the Plan; provided that such Option (or
portion thereof) otherwise complies with the Plan’s requirements relating to
Nonqualified Stock Options.   No Option shall be exercisable more
than ten years from the date of grant.

       

      
        
          
          

        

        
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      (b)   Exercise Price. The Committee
shall establish the exercise price at the time each Option is granted, which
exercise price shall be set forth in the applicable Award Agreement and which
shall not be less than the Fair Market Value per Share on the date of
grant.

      


      (c)   Exercise.   Each
Option shall be exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify in the
applicable Award Agreement.   The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities laws,
as it may deem necessary or advisable.

      


      (d)   Payment.   i)
No Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the aggregate exercise price therefore is received by the
Company.   Such payment may be made in cash, or its equivalent,
or (x) by exchanging Shares owned by the optionee (which are not the subject of
any pledge or other security interest and which have been owned by such optionee
for at least six months), or (y) subject to such rules as may be established by
the Committee, through delivery of irrevocable instructions to a broker to sell
the Shares otherwise deliverable upon the exercise of the Option and to deliver
promptly to the Company an amount equal to the aggregate exercise price or by a
combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company as of the date of such tender is at least
equal to such aggregate exercise price.

      


      (ii)   Wherever
in this Plan or any Award Agreement a Participant is permitted to pay the
exercise price of an Option or taxes relating to the exercise of an Option by
delivering Shares, the Participant may, subject to procedures satisfactory to
the Committee, satisfy such delivery requirement by presenting proof of
beneficial.   ownership of such Shares, in which case the Company
shall treat the Option as exercised without further payment and shall withhold
such number of Shares from the Shares acquired by the exercise of the
Option.

      


      Section
7.   Stock Appreciation
Rights.

      


      (a)   Grant.   Subject
to the provisions of the Plan, the Committee shall have sole authority to
determine the Participants to whom Stock Appreciation Rights shall be granted,
the number of Shares to be covered by each Stock Appreciation Right Award, the
grant price thereof and the conditions and limitations applicable to the
exercise thereof.   Stock Appreciation Rights with a grant price
equal to or greater than the Fair Market Value per Share as of the date of grant
are intended to qualify as “performance-based compensation” under Section 162(m)
of the Code.   In the sole discretion of the Committee, Stock
Appreciation Rights may, but need not, be intended to qualify as
performance-based compensation in accordance with Section 11
hereof.   Stock Appreciation Rights may be granted in tandem with
another Award, in addition to another Award, or freestanding and unrelated to
another Award.   Stock Appreciation Rights granted in tandem with
or in addition to an Award may be granted either before, at the same time as the
Award or at a later time No Stock Appreciation Right shall be exercisable more
than ten years from the date of grant.

       

      
        
          
          

        

        
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      (b)   Exercise and
Payment.   A Stock Appreciation Right shall entitle the
Participant to receive an amount equal to the excess of the Fair Market Value of
a Share on the date of exercise of the Stock Appreciation Right over the grant
price thereof (which shall not be less than the Fair Market Value on the date of
grant).   The Committee shall determine in its sole discretion
whether a Stock Appreciation Right shall be settled in cash, Shares or a
combination of cash and Shares.

      


      (c)   Other Terms and
Conditions.   Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at the grant of a
Stock Appreciation Right, the term, methods of exercise, methods and form of
settlement, and any other terms and conditions of any Stock Appreciation
Right.   The Committee may impose such conditions or restrictions
on the exercise of any Stock Appreciation Right as it shall deem
appropriate.

      


      Section 8.   Restricted
Stock and Restricted Stock Units.

      


      (a)   Grant.   Subject
to the provisions of the Plan, the Committee shall have sole authority to
determine the Participants to whom Shares of Restricted Stock and Restricted
Stock Units shall be granted, the number of Shares of Restricted Stock and/or
the number of Restricted Stock Units to be granted to each Participant, the
duration of the period during which, and the conditions, if any, under which,
the Restricted Stock and Restricted Stock Units may be forfeited to the Company,
and the other terms and conditions of such Awards.

      


      (b)   Transfer
Restrictions.   Shares of Restricted Stock and Restricted
Stock Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Stock, as provided in the Plan or
the applicable Award Agreements.   Unless otherwise directed by
the Committee, (i) certificates issued in respect of Shares of Restricted Stock
shall be registered in the name of the Participant and deposited by such
Participant, together with a stock power endorsed in blank, with the Company, or
(ii) Shares of Restricted Stock shall be held at the Company’s transfer agent in
book entry form with appropriate restrictions relating to the transfer of such
Shares of Restricted Stock.   Upon the lapse of the restrictions
applicable to such Shares of Restricted Stock, the Company shall, as applicable,
either deliver such certificates to the Participant or the Participant’s legal
representative or the transfer agent shall remove the restrictions relating to
the transfer of such Shares.

      


      (c)   Payment.   Each
Restricted Stock Unit shall have a value equal to the Fair Market Value of a
Share.   Restricted Stock Units shall be paid in cash, Shares,
other securities or other property, as determined in the sole discretion of the
Committee, upon the lapse of the restrictions applicable thereto, or otherwise
in accordance with the applicable Award Agreement.   Dividends
paid on any Shares of Restricted Stock shall be paid directly to the
Participant, withheld by the Company subject to vesting of the Restricted Stock
pursuant to the terms of the applicable Award Agreement, or may be reinvested in
additional Shares of Restricted Stock or in additional Restricted Stock Units,
as determined by the Committee in its sole discretion.

       

      
        
          
          

        

        
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      Section 9.   Performance
Awards.

      


      (a)   Grant.   The
Committee shall have sole authority to determine the Participants who shall
receive a “Performance Award”, which shall consist of a right which is (i)
denominated in cash or Shares, (ii) valued, as determined by the Committee, in
accordance with the achievement of such Performance Goals during such
Performance Periods as the Committee shall establish, and (iii) payable at such
time and in such form as the Committee shall determine.

      


      (b)   Terms and
Conditions.   Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance Goals
to be achieved during any Performance Period, the length of any Performance
Period, the amount of any Performance Award and the amount and kind of any
payment or transfer to he made pursuant to any Performance Award.

      


      (c)   Payment of Performance
Awards.   Performance Awards may be paid in a lump sum or
in installments following the close of the Performance Period as set forth in
the Award Agreement on the date of grant.

      


      Section 10.   Other
Stock-Based Awards.

      


      (a)   General.   The
Committee shall have authority to grant to Participants an “Other Stock-Based
Award”, which shall consist of any right which is (i) not an Award described in
Sections 6 through 9 above and (ii) an Award of Shares or an Award denominated
or payable in, valued in whole or in part by reference to, or otherwise based on
or related to, Shares (including, without limitation, securities convertible
into Shares), as deemed by the Committee to he consistent with the purposes of
the Plan; provided that
any such rights must comply, to the extent deemed desirable by the Committee,
with Rule 16b-3 and applicable law.   Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine the terms
and conditions of any such Other Stock-Based Award, including the price, if any,
at which securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan.

      


      (b)   Dividend
Equivalents.   In the sole discretion of the Committee, an
Award (other than Options or Stock Appreciation Rights), whether made as an
Other Stock-Based Award under this Section 10 or as an Award granted pursuant to
Sections 6 through 9 hereof, may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis; provided, that in the case of
Awards with respect to which any applicable Performance Criteria have not been
achieved, dividend equivalents may be paid only on a deferred basis, to the
extent the underlying Award vests.

      


      Section
11.   Performance
Compensation Awards.

      


      (a)   General.   The
Committee shall have the authority, at the time of grant of any Award described
in Sections 6 through 10 of the Plan (other than Options and Stock Appreciation
Rights), to designate such Award as a Performance Compensation Award in order to
qualify such Award as “performance-based compensation” under Section 162(m) of
the Code.

       

      
        
          
          

        

        
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      (b)   Eligibility.   The
Committee will, in its sole discretion, designate within the first ninety (90)
days of a Performance Period (or, if longer, within the maximum period allowed
under Section 162(m) of the Code) which Participants will be eligible to receive
Performance Compensation Awards in respect of such Performance
Period.   Designation of a Participant eligible to receive an
Award hereunder for a Performance Period shall not in any manner entitle the
Participant to receive payment in respect of any Performance, Compensation Award
for such Performance Period.   The determination as to whether or
not such Participant becomes entitled to payment in respect of any Performance
Compensation Award shall be decided solely in accordance with the provisions of
this Section 11.   Moreover, designation of a Participant
eligible to receive an Award hereunder for a particular Performance Period shall
not require designation of such Participant eligible to receive an Award
hereunder in any subsequent Performance Period and designation of one person as
a Participant eligible to receive an Award hereunder shall not require
designation of any other person as a Participant eligible to receive an Award
hereunder in such period or in any other period.

      


      (c)   Discretion of Committee with Respect
to Performance Compensation Awards.   With regard to a
particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type(s) of Performance
Compensation Awards to be issued, the Performance Criteria that will be used to
establish the Performance Goal(s), the kind(s) and/or level(s) of the
Performance Goals(s) is/are to apply to the Company and the Performance
Formula.   Within the first ninety (90) days of a Performance
Period (or, if longer, within the maximum period allowed under Section 162(m) of
the Code), the Committee shall, with regard to the Performance Compensation
Awards to be issued for such Performance Period, exercise its discretion with
respect to each of the matters enumerated in the immediately preceding sentence
of this Section 11(c) and record the same in writing.

      


      (d)   Payment of Performance Compensation
Awards.   ii) Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company on the last day
of a Performance Period to be eligible for payment in respect of a Performance
Compensation Award for such Performance Period.

      


      (ii)   Limitation.   A Participant shall be
eligible to receive payment in respect of a Performance Compensation Award only
to the extent that: (1) the Performance Goals for such period are achieved; and
(2) the Performance Formula as applied against such Performance Goals determines
that all or some portion of such Participant’s Performance Award has been earned
for the Performance Period.

      


      (iii)   Certification. Following the
completion of a Performance Period, the Committee shall meet to review and
certify in writing whether, and to what extent, the Performance Goals for the
Performance Period have been achieved and, if so, to calculate and certify in
writing that amount of the Performance Compensation Awards earned for the period
based upon the Performance Formula.   The Committee shall then
determine the actual size of each Participant’s Performance Compensation Award
for the Performance Period and, in so doing, may apply Negative Discretion, if
and when it deems appropriate.

      


      (iv)   Negative
Discretion.   In determining the actual size of an
individual Performance Award for a Performance Period, the Committee may reduce
or eliminate the amount of the Performance Compensation Award earned under the
Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgment, such reduction or elimination is
appropriate.

       

      
        
          
          

        

        
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      (v)   Timing of Award
Payments.   The Awards granted for a Performance Period
shall be paid to Participants as soon as administratively possible following
completion of the certifications required by this Section 11; provided that in no event
shall any Award granted for a Performance Period be paid later than the
fifteenth day of the third month following the end of such Performance
Period.

      


      (vi)   Maximum Award
Payable.   Notwithstanding any provision contained in the
Plan to the contrary, the maximum Performance Compensation Award payable to any
one Participant under the Plan for a Performance Period is 50,000 Shares or, in
the event the Performance Compensation Award is paid in cash, the equivalent
cash value thereof on the last day of the Performance Period to which such Award
relates.   Furthermore, any Performance Compensation Award that
has been deferred shall not (between the date as of which the Award is deferred
and the payment date) increase (i) with respect to Performance Compensation
Award that is payable in cash, by a measuring factor for each fiscal year
greater than a reasonable rate of interest set by the Committee or (ii) with
respect to a Performance Compensation Award that is payable in Shares, by an
amount greater than the appreciation of a Share from the date such Award is
deferred to the payment date.

      


      Section 12.   Amendment
and Termination.

      


      (a)   Amendments to the Plan. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or any portion thereof at any
time; provided that if
an amendment to the Plan that (i) would materially increase the benefits
accruing to Participants under the Plan, (ii) would materially increase the
number of securities which may be issued under the Plan, (iii) would materially
modify the requirements for participation in the Plan or (iv) must otherwise be
approved by the stockholders of the Company in order to comply with applicable
law or the rules of the Nasdaq Stock Market, or, if the Shares are not traded on
the Nasdaq Stock Market, the principal national securities exchange upon which
the Shares are traded or quoted, such amendment will be subject to stockholder
approval and will not be effective unless and until such approval has been
obtained; and provided,
further, that any such amendment, alteration, suspension, discontinuance
or termination that would impair the rights of any Participant or any holder or
beneficiary of any Award previously granted shall not be effective without the
written consent of the affected Participant, holder or beneficiary.

      


      (b)   Amendments to Awards. The Committee may waive
any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or
beneficiary of any Award previously granted shall not be effective without the
written consent of the affected Participant, holder or beneficiary.

      


      (c)   Adjustment of Awards Upon the
Occurrence of Certain Unusual or Nonrecurring
Events.   The Committee is hereby authorized to make
equitable adjustments in the terms and conditions of, and the criteria included
in, all outstanding Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4(b) hereof)
affecting the Company, any Affiliate, or the financial statements of the Company
or any Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

       

      
        
          
          

        

        
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      (d)   Repricing.   Except
in connection with a corporate transaction or event described in Section 4(b)
hereof, the terms of outstanding Awards may not be amended to reduce the
exercise price of Options or the grant price of Stock Appreciation Rights, or
cancel Options or Stock Appreciation Rights in exchange for cash, other awards
or Options or Stock Appreciation Rights with an exercise price or grant price,
as applicable, that is less than the exercise price of the original Options or
grant price of the original Stock Appreciation Rights, as applicable, without
stockholder approval.

      


      Section
13.   Change of
Control.

      


      (a)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant, to the extent outstanding Awards granted under
this Plan are not assumed, converted or replaced by the resulting entity in the
event of a Change of Control, all outstanding Awards that may be exercised shall
become fully exercisable, all restrictions with respect to outstanding Awards
shall lapse and become vested and non-forfeitable, and any specified Performance
Goals with respect to outstanding Awards shall be deemed to be satisfied at
target.

      


      (b)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant or thereafter, to the extent outstanding Awards
granted under this Plan are assumed, converted or replaced by the resulting
entity in the event of a Change of Control, (i) any outstanding Awards that are
subject to Performance Goals shall be converted by the resulting entity as if
target performance had been achieved as of the date of the Change of Control,
(ii) each Performance Award or Performance Compensation Award with service
requirements shall continue to vest with respect to such requirements during the
remaining period set forth in the Award Agreement, and (iii) all other Awards
shall continue to vest (and/or the restrictions thereon shall continue to lapse)
during the remaining period set forth in the Award Agreement.

      


      (c)   Except
as otherwise provided in an Award Agreement or by the Committee in a written
resolution at the date of grant or thereafter, to the extent outstanding Awards
granted under this Plan are either assumed, converted or replaced by the
resulting entity in the event of a Change of Control, if a Participant’s
employment or service is terminated without Cause by the Company or an Affiliate
or a Participant terminates his or her employment or service with the Company or
an Affiliate for Good Reason (if applicable), in either case, during the two
year period following a Change of Control, all outstanding Awards held by the
Participant that may be exercised shall become fully exercisable and all
restrictions with respect to outstanding Awards shall lapse and become vested
and non-forfeitable.

       

      
        
          
          

        

        
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      (d)   Notwithstanding
anything in this Plan or any Award Agreement to the contrary, to the extent any
provision of this Plan or an Award Agreement would cause a payment of deferred
compensation that is subject to Section 409A of the Code to be made upon the
occurrence of (i) a Change of Control, then such payment shall not be made
unless such Change of Control also constitutes a “change in ownership”, “change
in effective control” or “change in ownership of a substantial portion of the
Company’s assets” within the meaning of Section 409A of the Code or (ii) a
termination of employment or service, then such payment shall not be made unless
such termination of employment or service also constitutes a “separation from
service” within the meaning of Section 409A of the Code.   Any
payment that would have been made except for the application of the preceding
sentence shall be made in accordance with the payment schedule that would have
applied in the absence of a Change of Control or termination of employment or
service, but disregarding any future service or performance
requirements.

      


      Section
14.   General
Provisions.

      


      (a)   Nontransferability.

      


      (i)   Each
Award, and each right under any Award, shall be exercisable only by the
Participant during the Participant’s lifetime, or, if permissible under
applicable law, by the Participant’s legal guardian or
representative.

      


      (ii)   No
Award may be sold, assigned, alienated, pledged, attached or otherwise
transferred or encumbered by a Participant otherwise than by will or by the laws
of descent and distribution, and any such purported sale, assignment,
alienation, pledge, attachment, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the designation
of a beneficiary shall not constitute a sale, assignment, alienation, pledge,
attachment, transfer or encumbrance.

      


      (b)   No Rights to Awards. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Participants, or holders or beneficiaries of
Awards.   The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant (whether or not such Participants are similarly
situated).

      


      (c)   Share Certificates. Shares or other
securities of the Company delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such
restrictions.

      


      (d)   Withholding.   iii)
A Participant may
he required to pay to the Company or any Affiliate, and the Company or any
Affiliate shall have the right and is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant the amount (in
cash, Shares, other securities, other Awards or other property) of any
applicable withholding taxes in respect of an Award, its exercise, or any
payment or transfer under an Award or under the Plan and to take such other
action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes.

       

      
        
          
          

        

        
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      (ii)   Without
limiting the generality of clause (i) above, a Participant may satisfy, in whole
or in part, the foregoing withholding liability by delivery of Shares owned by
the Participant (which are not subject to any pledge or other security interest
and which have been owned by the Participant for at least six (6) months) with a
Fair Market Value equal to such withholding liability or by having the Company
withhold from the number of Shares otherwise issuable pursuant to the exercise
of the option a number of Shares with a Fair Market Value equal to such
withholding liability.

      


      (e)   Award
Agreements.   Each Award hereunder shall he evidenced by
an Award Agreement which shall he delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the death, disability
or termination of employment or service of a Participant and the effect, if any,
of such other events as may he determined by the Committee.

      


      (f)   No Limit on Other Compensation
Arrangements.   Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing in effect other
compensation arrangements, which may, but need not, provide for the grant of
options, restricted stock, Shares and other types of Awards provided for
hereunder (subject to stockholder approval if such approval is required), and
such arrangements may be either generally applicable or applicable only in
specific cases.

      


      (g)   No Right to
Employment.   The grant of an Award shall not he construed
as giving a Participant the right to be retained in the employ of, or in any
consulting relationship to, or as a director on the Board or board of directors,
as applicable, of, the Company or any Affiliate.   Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or
discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan, any Award
Agreement or any applicable employment contract or agreement.

      


      (h)   No Rights as
Stockholder. Subject to the
provisions of the applicable Award, no Participant or holder or beneficiary of
any Award shall have any fights as a stockholder with respect to any Shares to
be distributed under the Plan until he or she has become the holder of such
Shares.   Notwithstanding the foregoing, in connection with each
grant of Restricted Stock hereunder, the applicable Award shall specify if and
to what extent the Participant shall not be entitled to the rights of a
stockholder in respect of such Restricted Stock.

      


      (i)   Governing Law. The validity,
construction, and effect of the Plan and any rules and regulations relating to
the Plan and any Award Agreement shall be determined in accordance with the laws
of the State of Delaware, applied without giving effect to its conflict of laws
principles.

      


      (j)   Severability. If any provision of the
Plan or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform the
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall he stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

       

      
        
          
          

        

        
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      (k)   Other Laws. The Committee may
refuse to issue or transfer any Shares or other consideration under an Award if,
acting in its sole discretion, it determines that the issuance or transfer of
such Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of the
Exchange Act, and any payment tendered to the Company by a Participant, other
holder or beneficiary in connection with the exercise of such Award shall be
promptly refunded to the relevant Participant, holder or
beneficiary.   Without limiting the generality of the foregoing,
no Award granted hereunder shall be construed as an offer to sell securities of
the Company, and no such offer shall be outstanding, unless and until the
Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws.

      


      (l)   No Trust or Fund
Created.   Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person.   To the extent that any Person acquires a right to
receive payments from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured general creditor of
the Company or any Affiliate.

      


      (m)   No Fractional
Shares.   No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall he canceled, terminated, or otherwise eliminated.

      


      (n)   Deferrals.   In the event the Committee
permits a Participant to defer any Award payable in the form of cash, all such
elective deferrals shall be accomplished by the delivery of a written,
irrevocable election by the Participant on a form provided by the
Company.   All deferrals shall be made in accordance with
administrative guidelines established by the Committee to ensure that such
deferrals comply with all applicable requirements of Section 409A of the
Code.

      


      (o)   Headings. Headings are given to
the Sections and subsections of the Plan solely as a convenience to facilitate
reference.   Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Plan or any provision
thereof.

      


      Section
15.   Compliance
with Section 409A of the Code.

      


      (a)   To
the extent applicable, it is intended that this Plan and any grants made
hereunder comply with the provisions of Section 409A of the Code, so that the
income inclusion provisions of Section 409A(a)(1) of the Code do not apply to
the Participants.   This Plan and any grants made hereunder shall
be administered in a manner consistent with this intent.

       

      
        
          
          

        

        
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      (b)   Neither
a Participant nor any of a Participant’s creditors or beneficiaries shall have
the right to subject any deferred compensation (within the meaning of Section
409A of the Code) payable under this Plan and grants hereunder to any
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment.   Except as permitted under Section
409A of the Code, any deferred compensation (within the meaning of Section 409A
of the Code) payable to a Participant or for a Participant’s benefit under this
Plan and grants hereunder may not be reduced by, or offset against, any amount
owing by a Participant to the Company or any of its Affiliates.

      


      (c)   If,
at the time of a Participant’s separation from service (within the meaning of
Section 409A of the Code), (i) the Participant shall be a specified employee
(within the meaning of Section 409A of the Code and using the identification
methodology selected by the Company from time to time) and (ii) the Company
shall make a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the
Code) the payment of which is required to be delayed pursuant to the six- (6-)
month delay rule set forth in Section 409A of the Code in order to avoid taxes
or penalties under Section 409A of the Code, then the Company shall not pay such
amount on the otherwise scheduled payment date but shall instead pay it, with
interest, on the earlier of the first business day of the seventh month or
death.

      


      (d)   Notwithstanding
any provision of this Plan and grants hereunder to the contrary, in light of the
uncertainty with respect to the proper application of Section 409A of the Code,
the Company shall amend this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under
Section 409A of the Code.   In any case, a Participant shall he
solely responsible and liable for the satisfaction of all taxes and penalties
that may he imposed on a Participant or for a Participant’s account in
connection with this Plan and grants hereunder (.including
any taxes and penalties under Section 409A of the Code), and neither the Company
nor any of its Affiliates shall have any obligation to indemnify or otherwise
hold a Participant harmless from any or all of such taxes or
penalties.

      


      Section
16   Term of
the Plan.

      


      (a)   Effective
Date.   The Plan shall be effective as of the date of its
approval by the Board (the “Effective Date”), subject to approval of the Plan by
the stockholders of the Company.   No grants will be made under
the Existing Plan on or after the date the Plan is first approved by the
stockholders of the Company, except that outstanding awards granted under the
Existing Plan will continue unaffected following the Effective
Date.

      


      (b)   Expiration
Date.   No grant will be made under this Plan more than
ten (10) years after the Effective Date, but all grants made on or prior to such
date will continue in effect thereafter subject to the terms thereof and of this
Plan.

      


      


      * *
*

    

     

    
      
        
        

      

      
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