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person’s position, the level of the person’s performance, the person’s level of compensation,the assessed potential of the person and such additional factors as the Board or Committee shalldeem relevant to the accomplishment of the purposes of the Plan. The Board or Committee may alsoutilize guidelines set forth in other compensation plans of the Company in determining any mattersrelated to the grant of Options hereunder, provided that the use of such guidelines comports withapplicable law.     b. Allotment of Shares. Options granted hereunder may, at the discretion of the Boardor Committee, be: (i) Options which are intended to qualify as incentive stock options underSection 422 of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) Options which arenot intended so to qualify under Section 422 of the Code, or (iii) both of the foregoing, ifgranted separately, and not in tandem. Each Option granted under this Plan must be clearlyidentified as to its status as an incentive stock option or not. Options granted hereunder may beallotted to participants in such amounts, subject to the limitations specified in this Plan, as theBoard or Committee, in its sole discretion, may from time to time determine. In the case of Optionsintended to be incentive stock options, the aggregate Fair Market Value (determined at the time ofthe Options’ respective grants) (as defined below) of the shares with respect to which incentivestock options are exercisable for the first time by a participant hereunder during any calendaryear (under all plans taken into account pursuant to Section 422(d) of the Code) shall not exceed$100,000. Options hereunder not intended to qualify as incentive stock options under Section 422 ofthe Code may be granted to any Plan participant without regard to the Section 422(d) limitations.     c. Option Price. The exercise price of each share of stock covered by an optiongranted hereunder shall be equal to or greater than the Fair Market Value per share of theCompany’s Common Stock on the date of grant. If the stock is traded in the over-the-counter market,such Fair Market Value shall be deemed to be closing price on such day as reported by NASDAQ. Ifthe stock is traded on an exchange, such Fair Market Value shall be deemed to be the closing pricereported by that exchange on such day.     d. Time of Granting Options. The date of grant of an Option hereunder shall be thedate on which the Board or Committee makes the determination of granting such Option or such laterdate as shall be specified by the Board or Committee, provided, however that in the case of anoption (1) originally granted by a company to which the Company is a successor (by merger orotherwise) of the obligations of such option and (2) which the Company has elected to treat asbeing issuable under the Plan, the date of grant shall be the date on which such option wasoriginally granted by the predecessor company. Notice of the determination shall be given to eachofficer or key employee to whom an Option is so granted within a reasonable time after the date ofsuch grant.     e. Duration and Exercise of Options. The Option term shall be ten (10) years from thedate the Option is granted, except that such term shall be reduced with respect to any Option asoutlined below in the event of death or termination of employment or voluntary retirement of theoptionee; provided that in the case of a Change in Control, the expiration date and the dates onwhich any part of the Option shall be exercisable for all of the shares covered thereby may beaccelerated, such the Option shall expire not less than one month after consummation of suchmerger, consolidation, dissolution or liquidation, but the effectiveness of such acceleration, andany exercise of the Option pursuant thereto in excess of the number of shares for which it wouldhave been exercisable in the absence of such acceleration, shall be conditioned upon theconsummation of such merger, consolidation, dissolution or liquidation.     f. The exercise of any Option and the delivery of the optioned shares shall be contingent uponreceipt by the Company of the full exercise price and any amount required to be withheld by theCompany under applicable tax laws in connection with the exercise of the Option. The exercise pricemay be paid (i) in cash or by check, or (ii) through delivery of shares of Common Stock and/orfully vested, in-the-money options with an aggregate Fair Market Value on the date of exerciseequal to the exercise price of the shares being purchased, or (iii) through any combination of theforegoing methods. At any time when the Company is required to withhold any amount under applicabletax laws in connection with the exercise of an Option, the Company may, in its sole discretion,accept payment of the withholding amount in shares of Common Stock and/or fully vested,in-the-money options having a Fair Market Value on the date of exercise of the Option equal to theamount required to be withheld. No Option may be exercised after termination of employment of theoptionee except as hereinafter provided or as otherwise approved by the Board or the CompensationCommittee.     g. Unless the Board or Committee expressly states otherwise in the award agreement (as it maybe amended by mutual consent), Options shall be exercisable on a cumulative basis for 20% of theshares covered thereby on each of the first five anniversaries of the grant thereof. Unless theBoard or Committee expressly states otherwise in the award agreement, Options granted under thePlan may be exercised, if otherwise timely, (a) within three months after voluntary retirement(other than voluntary retirement by reason of disability) of the optionee at or after the age of 60years, if such voluntary retirement occurs on or after one year following the grant of any Option,and (b) within three months after voluntary retirement occurring at any age by reason ofdisability. Notwithstanding the foregoing, in the event that an optionee is terminated for cause,all existing options held by such optionee shall terminate immediately.     h. Unless the Board or Committee expressly states otherwise in the award agreement (as it maybe amended by mutual consent), if an optionee shall die while employed by the Company or withinthree months after voluntary retirement from employment with the Company, such Option may beexercised (to the extent that the optionee would have been entitled to do so at the date of hisdeath) by the legatees, personal representative or distributees of the optionee during the balanceof the term thereof, or within one year of the date of the optionee’s death, whichever is shorter.Notwithstanding
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anything to the contrary herein, for a period of six months commencing on the date of grant ofan Option hereunder to a participant, such participant may not sell any shares of Common Stockacquired upon exercise of such Option.**5. RECAPITALIZATION**     The aggregate number of shares of Common Stock which may be granted from time to timehereunder and the aggregate number of shares of Common Stock which may be granted to any one personshall be proportionately adjusted for any increase or decrease in the number of issued shares ofCommon Stock of the Company resulting from a subdivision or consolidation of shares or othercapital adjustment, or the payment of a stock dividend or other increase or decrease in suchshares, effected without receipt of consideration by the Company, if any; provided, however, thatany fractional shares resulting from any such adjustment shall be eliminated. In the event of achange in the Company’s Common Stock which is limited to a change in the par value thereof, or frompar value to no par value, without increase in the number of issued shares, the shares resultingfrom any such change shall be deemed to be Common Stock within the meaning of the Plan.**6. ASSIGNABILITY**     No Option granted hereunder shall be assignable except as specifically provided herein.Notwithstanding anything to the contrary herein, no Option granted hereunder shall be transferableby him or her except: (i) by will, (ii) by the laws of descent and distribution, or (iii) pursuantto a qualified domestic relations order as defined by the Code or in Title I of the EmployeeRetirement Income Security Act, or the rules thereunder. In the case of an Option intended to be anincentive stock option, such Option shall not be transferable by a participant other than by willor the laws of descent and distribution and during the optionee’s lifetime shall be exercisableonly by him or her. No Option, right, or privilege hereunder shall be subject to execution,attachment, or similar process. Upon any attempt so to transfer, assign, pledge, hypothecate orotherwise dispose of the Option, or of any right or privilege conferred thereby contrary to theprovisions hereof, or upon the levy of any attachment or similar process upon such Option, right orprivilege, the Option and such rights and privileges shall immediately become null and void.**7. LISTING AND REGISTRATION OF SHARES**     Each Option shall be subject to the requirement that if at any time the Board or Committeeshall determine, in its discretion, that the listing, registration, or qualification of the sharescovered thereby upon any securities exchange or under any state or federal law or the consent orapproval of any governmental regulatory body, is necessary or desirable as a condition of, or inconnection with, the granting of such Option or the issue or purchase of shares thereunder, suchOption may not be exercised in whole or in part unless and until such listing, registration,qualification, consent, or approval shall have been effected or obtained free of any conditions notacceptable to the Board or Committee.**8. EXPIRATION AND TERMINATION OF THE PLAN**     Options may be granted under the Plan at any time or from time to time as long as the totalnumber of shares optioned or purchased under this Plan does not exceed the number of shares ofCommon Stock specified in Section 3 hereof. The Plan may be abandoned or terminated at any time bythe Board or Committee except with respect to any Options then outstanding under the Plan. NoOption shall be granted pursuant to the Plan after ten years from the effective date of the Plan.**9. AMENDMENT OF PLAN**     The Board or Committee may at any time and from time to time modify and amend the Plan(including such form of option agreement) in any respect; provided, however, that no such amendmentshall: (a) increase (except in accordance with Section 5) the maximum number of shares for whichOptions may be granted under the Plan either in the aggregate or to any individual employee, or (b)reduce (except in accordance with Section 5) the minimum Option prices which may be establishedunder the Plan, or (c) extend the term or terms during which Options may be granted or exercised.The termination of any modification or amendment of the Plan shall not, without the consent of anemployee, affect his rights under an Option theretofore granted to him.**10. EFFECTIVE DATE OF THE PLAN**     The effective date of this Plan shall be upon its approval at the Company’s 2008 AnnualMeeting of Shareholders.
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