appas80108ex41.htm


    
      
        
          
            
              

            

          

          A.P.
            PHARMA, INC.

           

          2007
            EQUITY INCENTIVE PLAN 

           

          1.                 
Purposes of the Plan.

          The purpose of this Plan is to encourage
            ownership in A.P. Pharma, Inc., a Delaware corporation (the
“Company”), by key personnel whose long-term employment or
            other service relationship with the Company is considered essential to
            the
            Company’s continued progress and, thereby, encourage recipients to act in the
            stockholders’ interest and share in the Company’s success.

           

          2.                 
Definitions.

          As used herein, the following definitions
            shall apply: 

           

              (a)               
            “Administrator”  means the Board, any
            Committees or such delegates as shall be administering the Plan in accordance
            with Section 4 of the Plan. 

              (b)       
                    “Affiliate”  means any entity that is directly
            or indirectly controlled by the Company or any entity in which the Company
            has a
            significant ownership interest as determined by the Administrator. 

              (c)               
            “Applicable Laws”  means the
            requirements relating to the administration of stock option and stock
            award
            plans under U.S. federal and state laws, any stock exchange or quotation
            system
            on which the Company has listed or submitted for quotation the Common
            Stock to
            the extent provided under the terms of the Company's agreement with such
            exchange or quotation system and, with respect to Awards subject to the
            laws of
            any foreign jurisdiction where Awards are, or will be, granted under
            the Plan,
            the laws of such jurisdiction. 

              (d)            
               “Award”  means a Stock
            Award or Option granted in accordance with the terms of the Plan. 

              (e)               
            “Awardee”  means an Employee, Consultant
            or Director of the Company or any Affiliate who has been granted an Award
            under
            the Plan. 

              (f)                
            “Award Agreement”  means a Stock Award
            Agreement and/or Option Agreement, which may be in written or electronic
            format,
            in such form and with such terms and conditions as may be specified by
            the
            Administrator, evidencing the terms and conditions of an individual Award. 
Each Award Agreement is subject to the terms and conditions of the Plan.
            

              (g)               
            “Board”  means the Board of Directors of
            the Company. 

              (h)               
            “Cause” means, unless such term or an equivalent
            term is otherwise defined with respect to an Award by the Participant’s Award
            Agreement, any of the following:  (i) the Participant’s theft, dishonesty,
            willful misconduct, breach of fiduciary duty for personal profit, or
            falsification of any Company or Affiliate documents or records; (ii)
            the
            Participant’s material failure to abide by a Company’s or Affiliate’s code of
            conduct or other policies (including without limitation, policies relating
            to
            confidentiality and reasonable workplace conduct); (iii) the Participant’s
            unauthorized use, misappropriation, destruction or diversion of any tangible
            or
            intangible asset or corporate opportunity of the Company or an Affiliate
            (including, without limitation, the Participant’s improper use or disclosure of
            confidential or proprietary information); (iv) any intentional act by the
            Participant which has a material detrimental effect on the Company or
            an
            Affiliate’s reputation or business; (v) the Participant’s repeated failure
            or inability to perform any reasonable assigned duties after written
            notice from
            the Company or an Affiliate  (including, without limitation, habitual
            absence from work for reasons other than illness), and a reasonable opportunity
            to cure, such failure or inability; (vi) any material breach by the
            Participant of any employment or service agreement between the Participant
            and
            the Company or an Affiliate, which breach is not cured pursuant to the
            terms of
            such agreement; or (vii) the Participant’s conviction (including any plea of
            guilty or nolo contendere) of any criminal act involving fraud, dishonesty,
            misappropriation or moral turpitude, or which impairs the Participant’s ability
            to perform his or her duties with the Company or an Affiliate.

              (i)                 
            “Change in Control”  means, unless such
            term or an equivalent term is otherwise defined with respect to an Award
            by the
            Participant’s Award Agreement, the occurrence of any of the
            following:

                  i.         an
            Ownership Change Event or a series of related Ownership Change Events
            (collectively, a “Transaction”) in which the stockholders of the Company
            immediately before the transaction do not retain immediately after the
            Transaction, in substantially the same proportions as their ownership
            of shares
            of the Company’s voting stock immediately before the Transaction, direct or
            indirect beneficial ownership of more than fifty percent (50%) of the
            total
            combined voting power of the outstanding voting securities of the Company
            or
            such surviving entity immediately outstanding after the Transaction,
            or, in the
            case of an Ownership Change Event described in Section 2(bb)(iii), the
            entity to
            which the assets of the Company were transferred (the “Transferee”), as the case
            may be; or

                  ii.        the
            liquidation or dissolution of the Company.For purposes of the preceding
            sentence, indirect beneficial ownership shall include, without limitation,
            an
            interest resulting from ownership of the voting securities of one or
            more
            corporations or other business entities which own the Company or the
            Transferee,
            as the case may be, either directly or through one or more subsidiary
            corporations or other business entities.  The Board shall have the right to
            determine whether multiple sales or exchanges of the voting securities
            in the
            Company or multiple Ownership Change Events are related, and its determination
            shall be final, binding and conclusive.  The Board may also, but need not,
            specify that other transactions or events constitute a Change in Control.

           

              (j)                
            “Code”  means the United States Internal
            Revenue Code of 1986, as amended. 

              (k)               
            “Committee”  means the compensation
            committee of the Board or a committee of Directors appointed by the Board
            in
            accordance with Section 4 of the Plan. 

              (l)                 “Common
            Stock”  means the common stock of the
            Company. 

              (m)              
            “Company”  means A.P. Pharma, Inc., a
<?xml:namespace prefix = st1 ns =
            "urn:schemas-microsoft-com:office:smarttags" />Delaware corporation, or its
            successor.

              (n)               
            “Consultant” means any person (including an
            advisor or an employee of an entity) that is engaged by the Company or
            any
            Parent, Subsidiary or Affiliate, to render services and is compensated
            for such
            services.

              (o)               
            "Continuous Service" means that the
            Participant's service with the Company or an Affiliate, whether as an
            Employee,
            Director or Consultant, is not interrupted or terminated. A change in
            the
            capacity in which the Participant renders service to the Company or an
            Affiliate
            as an Employee, Consultant or Director or a change in the entity for
            which the
            Participant renders such service, provided that there is no interruption
            or
            termination of the Participant's service with the Company or an Affiliate,
            shall
            not terminate a Participant's Continuous Service; provided, however, if
            the Company for which a Participant is rendering services ceases to qualify
            as
            an "Affiliate," as determined by the Board in its sole discretion, such
            Participant's Continuous Service shall be considered to have terminated
            on the
            date such Company ceases to qualify as an Affiliate. To the extent permitted
            by
            law, the Board or the chief executive officer of the Company, in that
            party's
            sole discretion, may determine whether Continuous Service shall be considered
            interrupted in the case of: (i) any leave of absence approved by the Board
            or the chief executive officer of the Company, including sick leave,
            military
            leave or any other personal leave; or (ii) transfers between the Company,
            an Affiliate, or their successors. Notwithstanding the foregoing, a leave
            of
            absence shall be treated as Continuous Service for purposes of vesting
            in a
            Stock Award only to such extent as may be provided in the Company's leave
            of
            absence policy, in the written terms of any leave of absence agreement
            or policy
            applicable to the Participant, or as otherwise required by law.
  

              (p)               
            “Conversion Award”  has the meaning set
            forth in Section 4(b)(xii) of the Plan. 

              (q)               
            “Director”  means a member of the
            Board.

              (r)                
            “Effective Date” means the date of approval of the
            Plan by the stockholders of the Company in the manner and to the extent
            required
            by Applicable Laws. 

              (s)               
             “Employee”  means a regular,
            active employee of the Company or any Affiliate, including an Officer
            and/or
            Inside Director.  Within the limitations of Applicable Law, the
            Administrator shall have the discretion to determine the effect upon
            an Award
            and upon an individual's status as an Employee in the case of (i) any
            individual who is classified by the Company or its Affiliate as leased
            from or
            otherwise employed by a third party or as intermittent or temporary,
            even if any
            such classification is changed retroactively as a result of an audit,
            litigation
            or otherwise, (ii) any leave of absence approved by the Company or an
            Affiliate, (iii) any transfer between locations of employment with the
            Company or an Affiliate or between the Company and any Affiliate or between
            any
            Affiliates, (iv) any change in the Awardee's status from an Employee to a
            Consultant or Director, and (v) at the request of the Company or an
            Affiliate an Employee becomes employed by any partnership, joint venture
            or
            corporation not meeting the requirements of an Affiliate in which the
            Company or
            an Affiliate is a party. 

              (t)                
            “Exchange Act”  means the Securities
            Exchange Act of 1934, as amended. 

              (u)               
            “Fair Market Value”  means, as of any
            date, the value of a share of Common Stock or other property as determined
            by
            the Administrator, in its discretion, or by the Company, in its discretion,
            if
            such determination is expressly allocated to the Company herein, subject
            to the
            following:

                  i.         If,
            on such date, the Common Stock is listed on a national or regional securities
            exchange or market system, including without limitation the Nasdaq Global
            Market, the Fair Market Value of a share of Common Stock shall be the
            closing
            price on such date of a share of Common Stock (or the mean of the closing
            bid
            and asked prices of a share of Common Stock if the stock is so quoted
            instead)
            as quoted on such exchange or market system constituting the primary
            market for
            the Common Stock, as reported in The Wall Street Journal or such other
            source as the Administrator deems reliable.  If the relevant date does not
            fall on a day on which the Common Stock has traded on such securities
            exchange
            or market system, the date on which the Fair Market Value shall be established
            shall be the last day on which the Common Stock was so traded prior to
            the
            relevant date, or such other appropriate day as shall be determined by
            the
            Administrator, in its discretion.

                  ii.        If,
            on such date, the Common Stock is not listed on a national or regional
            securities exchange or market system, the Fair Market Value of a share
            of Common
            Stock shall be as determined by the Administrator in good faith using
            a
            reasonable application of a reasonable valuation method without regard
            to any
            restriction other than a restriction which, by its terms, will never
            lapse.

              (v)               
            “Grant Date”  means, for all purposes,
            the date on which the Administrator approves the determination of grant
            of an
            Award, or such other date as is determined by the Administrator, provided
            that
            in the case of any Incentive Stock Option, the grant date shall be the
            later of
            the date on which the Administrator makes the determination granting
            such
            Incentive Stock Option or the date of commencement of the Awardee's employment
            relationship with the Company. 

              (w)              
            “Incentive Stock Option”  means an
            Option intended to qualify as an incentive stock option within the meaning
            of
            Section 422 of the Code and the regulations promulgated thereunder.


              (x)               
            “Inside Director” means a Director who is an
            Employee.

              (y)               
            “Nasdaq” means the Nasdaq
            Global Market or its successor. 

              (z)          
“Nonstatutory
            Stock Option” means an Option not
            intended to qualify as an Incentive Stock Option. 

              (aa)              
            “Officer”  means a person who is an
            officer of the Company within the meaning of Section 16 of the Exchange Act
            and the rules and regulations promulgated thereunder. 

              (bb)             
            “Option”  means a
            right granted under Section 8 to purchase a number of Shares at such
            exercise price, at such times, and on such other terms and conditions
            as are
            specified in the agreement or other documents evidencing the Option (the
“Option
            Agreement”).  Both Options intended to qualify as Incentive Stock Options
            and Nonstatutory Stock Options may be granted under the Plan. 

              (cc)           
              “Outside Director” means a Director who is
            not an Employee.

              (dd)             
            “Ownership Change Event” means the occurrence of
            any of the following with respect to the Company:  (i) the direct or
            indirect sale or exchange in a single or series of related transactions
            by the
            stockholders of the Company of more than fifty percent (50%) of the voting
            stock
            of the Company; (ii) a merger or consolidation in which the Company is
            a party;
            or (iii) the sale, exchange, or transfer of all or substantially all of the
            assets of the Company.

              (ee)              
            “Parent” means a “parent corporation,” whether now
            or hereafter existing, as defined in Section 424(e) of the Code, or any
            successor provision.

              (ff)              
             “Participant”  means the Awardee
            or any person (including any estate) to whom an Award has been assigned
            or
            transferred as permitted hereunder. 

              (gg)              
            “Plan”  means this A.P. Pharma, Inc.
            2007 Equity Incentive Plan. 

              (hh)              
            “Qualifying Performance Criteria”  shall
            have the meaning set forth in Section 13(b) of the Plan. 

              (ii)                
            “Restricted Stock Unit”  means a
            bookkeeping entry representing an amount equivalent to the Fair Market
            Value of
            one Share (or a fraction or multiple of such value), payable in cash,
            property
            or Shares.  Restricted Stock Units represent an unfunded and unsecured
            obligation of the Company, except as otherwise provided for by the
            Administrator. 

              (jj)               
            “Share”  means a share of the Common
            Stock, as adjusted in accordance with Section 14 of the Plan. 

              (kk)             
            “Stock Appreciation Right”  means a right
            to receive cash and/or shares of Common Stock
            based on a change in the Fair Market Value of a specific number of shares
            of
            Common Stock between the grant date and the exercise date granted under
            Section
            12. 

              (ll)                
            “Stock Award”  means
            an award or issuance of Shares, Restricted Stock Units, Stock Appreciation
            Rights or other similar awards made under Section 12 of the Plan, the
            grant, issuance, retention, vesting, settlement, and/or transferability
            of which
            is subject during specified periods of time to such conditions (including
            continued employment or performance conditions) and terms as are expressed
            in
            the agreement or other documents evidencing the Award (the “Stock Award
            Agreement”). 

              (mm)            
            “Subsidiary”  means any company (other
            than the Company) in an unbroken chain of companies beginning with the
            Company,
            provided each company in the unbroken chain (other than the Company)
            owns, at
            the time of determination, stock possessing 50% or more of the total
            combined
            voting power of all classes of stock in one of the other companies in
            such
            chain. 

              (nn)              
            “Termination of Continuous
            Service”  shall mean ceasing to be in Continuous Service as
            an Employee, Consultant or Director, as determined in the sole discretion
            of the
            Administrator.  However, for Incentive Stock Option purposes, Termination
            of Continuous Service will occur when the Awardee ceases to be an employee
            (as
            determined in accordance with Section 3401(c) of the Code and the
            regulations promulgated thereunder) of the Company or one of its
            Subsidiaries.  The Administrator shall determine whether any corporate
            transaction, such as a sale or spin-off of a division or business unit,
            or a
            joint venture, shall be deemed to result in a Termination of Continuous
            Service.


              (oo)             
            “Total and Permanent Disability”  shall have the
            meaning set forth in Section 22(e)(3) of
            the Code. 

           

          3.                 
Stock Subject to
            the Plan.

           

              (a)               
            Aggregate Limits.   Subject to the provisions
            of Section 14 of the Plan, the maximum aggregate number of Shares that may
            be sold or issued under the Plan is 3,000,000 shares of Common Stock. 
Shares subject to Awards granted under the Plan that are cancelled, expire
            or
            are forfeited shall be available for re-grant under the Plan.  If an
            Awardee pays the exercise or purchase price of an Award granted under
            the Plan
            through the tender or withholding of Shares, or if Shares are tendered
            or
            withheld to satisfy any Company withholding obligations, the number of
            Shares so
            tendered or withheld shall become available for re-issuance thereafter
            under the
            Plan.  The Shares subject to the Plan may be either Shares reacquired by
            the Company, including Shares purchased in the open market, or authorized
            but
            unissued Shares.  

           

              (b)              
            Code Section 162(m) Share
            Limits.   Subject to the provisions of Section 14 of the
            Plan, the aggregate number of Shares subject to Awards granted under
            this Plan
            during any calendar year to any one Awardee shall not exceed 300,000,
            except
            that in connection with his or her first commencing service with the
            Company or
            an Affiliate, an Awardee may be granted Awards covering up to an additional
            200,000 Shares during the year in which such service commences. 
Notwithstanding anything to the contrary in the Plan, the limitations
            set forth
            in this Section 3(b) shall be subject to adjustment under
            Section 14(a) of the Plan only to the extent that such adjustment will not
            affect the status of any Award intended to qualify as “performance based
            compensation” under Code Section 162(m).

           

          4.                 
Administration of
            the Plan.

           

              (a)               
            Procedure.    

                  i.                 
            Multiple Administrative Bodies.    The Plan shall be
            administered by the Board, a Committee and/or their delegates. 

                  ii.               
            Section 162.    To the extent that the
            Administrator determines it to be desirable to qualify Awards granted
            hereunder
            as “performance-based compensation” within the meaning of Section 162(m) of
            the Code, Awards to “covered employees” within the meaning of
            Section 162(m) of the Code or Employees that the Committee determines may
            be “covered employees” in the future shall be made by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.


                  iii.              
            Rule 16b-3.    To the extent desirable to
            qualify transactions hereunder as exempt under Rule 16b-3 promulgated under
            the Exchange Act (“Rule 16b-3”), Awards to Officers and Directors shall be
            made by the entire Board or a Committee of two or more “non-employee directors”
within the meaning of Rule 16b-3. 

                  iv.             
            Other Administration.    The Board or a Committee may
            delegate to an authorized officer or officers of the Company the power
            to
            approve Awards to persons eligible to receive Awards under the Plan who
            are not
            (A) subject to Section 16 of the Exchange Act or (B) at the time
            of such approval, “covered employees” under Section 162(m) of the Code or
            (C) any other executive officer. 

                  v.               
            Delegation of Authority for the Day-to-Day Administration of the
            Plan.    Except to the extent prohibited by Applicable
            Law, the Administrator may delegate to one or more individuals the day-to-day
            administration of the Plan and any of the functions assigned to it in
            this
            Plan.  Such delegation may be revoked at any time.

                  vi.             
            Nasdaq.     The Plan will be administered in a
            manner that complies with any applicable Nasdaq or stock exchange listing
            requirements.   

           

              (b)              
            Powers of the Administrator.    Subject
            to the provisions of the Plan and, in the case of a Committee or delegates
            acting as the Administrator, subject to the specific duties delegated
            to such
            Committee or delegates, the Administrator shall have the authority, in
            its
            discretion: 

                  i.               to
            select the Employees, Consultants and Directors of the Company or its
            Affiliates
            to whom Awards are to be granted hereunder; 

                  ii.              to
            determine the number of shares of Common Stock to be covered by each
            Award
            granted hereunder; 

                  iii.             to
            determine the type of Award to be granted to the selected Employees,
            Consultants
            and Directors; 

                  iv.             to
            approve forms of Award Agreements for use under the Plan; 

                  v.              to
            determine the terms and conditions, not inconsistent with the terms of
            the Plan,
            of any Award granted hereunder.  Such terms and conditions include, but are
            not limited to, the exercise and/or purchase price (if applicable), the
            time or
            times when an Award may be exercised (which may or may not be based on
            performance criteria), the vesting schedule, any vesting and/or exercisability
            acceleration or waiver of forfeiture restrictions, the acceptable forms
            of
            consideration, the term, and any restriction or limitation regarding
            any Award
            or the Shares relating thereto, based in each case on such factors as
            the
            Administrator, in its sole discretion, shall determine and may be established
            at
            the time an Award is granted or thereafter; 

                  vi.             to
            correct administrative errors; 

                  vii.            to
            construe and interpret the terms of the Plan (including sub-plans and
            Plan
            addenda) and Awards granted pursuant to the Plan; 

                  viii.          
            to adopt rules and procedures relating to the operation and administration
            of
            the Plan to accommodate the specific requirements of local laws and
            procedures.  Without limiting the generality of the foregoing, the
            Administrator is specifically authorized (A) to adopt the rules and
            procedures regarding the conversion of local currency, withholding procedures
            and handling of stock certificates which vary with local requirements
            and
            (B) to adopt sub-plans and Plan addenda as the Administrator deems
            desirable, to accommodate foreign laws, regulations and practice;  

                  ix.             to
            prescribe, amend and rescind rules and regulations relating to the Plan,
            including rules and regulations relating to sub-plans and Plan addenda;


                  x.              to
            modify or amend each Award, including, but not limited to, the acceleration
            of
            vesting and/or exercisability, provided, however, that any such amendment
            is
            subject to Section 15 of the Plan and except as set forth in that Section,
            may not impair any outstanding Award unless agreed to in writing by the
            Participant; 

                  xi.             to
            allow Participants to satisfy withholding tax amounts by electing to
            have the
            Company withhold from the Shares to be issued upon exercise of an Option
            or
            vesting of a Stock Award that number of Shares having a Fair Market Value
            equal
            to the amount required to be withheld.  The Fair Market Value of the Shares
            to be withheld shall be determined in such manner and on such date that
            the
            Administrator shall determine or, in the absence of provision otherwise,
            on the
            date that the amount of tax to be withheld is to be determined.  All
            elections by a Participant to have Shares withheld for this purpose shall
            be
            made in such form and under such conditions as the Administrator may
            provide;


                  xii.            
            to authorize conversion or substitution under the Plan of any or all
            stock
            options, stock appreciation rights or other stock awards held by service
            providers of an entity acquired by the Company (the “Conversion Awards”). 
Any conversion or substitution shall be effective as of the close of
            the merger,
            acquisition or other transaction.  The Conversion Awards may be
            Nonstatutory Stock Options or Incentive Stock Options, as determined
            by the
            Administrator, with respect to options granted by the acquired entity;
            provided,
            however, that with respect to the conversion of stock appreciation rights
            in the
            acquired entity, the Conversion Awards shall be Nonstatutory Stock
            Options.  Unless otherwise determined by the Administrator at the time of
            conversion or substitution, all Conversion Awards shall have the same
            terms and
            conditions as Awards generally granted by the Company under the Plan;


                  xiii.          
            to authorize any person to execute on behalf of the Company any instrument
            required to effect the grant of an Award previously granted by the
            Administrator; 

                  xiv.          
            to impose such restrictions, conditions or limitations as it determines
            appropriate as to the timing and manner of any resales by a Participant
            or other
            subsequent transfers by the Participant of any Shares issued as a result
            of or
            under an Award, including without limitation,  (A) restrictions under
            an insider trading policy or under any other Company policy relating
            to Company
            stock and stock ownership and (B) restrictions as to the use of a specified
            brokerage firm for such resales or other transfers; 

                  xv.           
            to provide, either at the time an Award is granted or by subsequent action,
            that
            an Award shall contain as a term thereof, a right, either in tandem with
            the
            other rights under the Award or as an alternative thereto, of the Participant
            to
            receive, without payment to the Company, a number of Shares, cash or
            a
            combination thereof, the amount of which is determined by reference to
            the value
            of the Award; 

                  xvi.          
             to cause all outstanding Awards held by an Awardee to terminate
            immediately in their entirety (including as to vested Options) upon first
            notification to the Awardee of the Awardee’s Termination of Continuous Service
            for Cause.  If an Awardee’s Continuous Service with the Company is
            suspended pending an investigation of whether the Awardee shall be terminated
            for Cause, the Administrator has the authority to cause all the Awardee’s rights
            under all outstanding Awards to be suspended during the investigation
            period in
            which event the Awardee shall have no right to exercise any outstanding
            Awards.


                  xvii.        
            to determine whether and to what extent the vesting of Awards shall be
            tolled
            during any unpaid leave of absence.  In the event of military leave,
            vesting shall toll during any unpaid portion of such leave, provided
            that, upon
            an Awardee’s returning from military leave (under conditions that would entitle
            him or her to protection upon such return under the Uniform Services
            Employment
            and Reemployment Rights Act), he or she shall be given vesting credit
            with
            respect to Options to the same extent as would have applied had the Awardee
            continued to provide services to the Company throughout the leave on
            the same
            terms as he or she was providing services immediately prior to such leave. 


                  xviii.       
            to make all other determinations deemed necessary or advisable for administering
            the Plan and any Award granted hereunder. 

           

              (c)               
            Effect of Administrator's
            Decision.    All decisions, determinations and
            interpretations by the Administrator regarding the Plan, any rules and
            regulations under the Plan and the terms and conditions of any Award
            granted
            hereunder, shall be final and binding on all Participants and on all
            other
            persons.  The Administrator shall consider such factors as it deems
            relevant, in its sole and absolute discretion, to making such decisions,
            determinations and interpretations including, without limitation, the
            recommendations or advice of any officer or other employee of the Company
            and
            such attorneys, consultants and accountants as it may select. 

           

          5.                 
Eligibility.

          Awards may be granted to Employees,
            Consultantsand Directors of the Company or any of its Affiliates; provided
            that
            Incentive Stock Options may be granted only to Employees of the Company
            or of a
            Subsidiary of the Company. 

           

          6.                 
Term of Plan.

          The Plan shall become effective on the
            Effective Date.  It shall continue in effect for a term of ten
            (10) years from the later of the Effective Date or the date any amendment
            to add shares to the Plan is approved by stockholders of the Company
            unless
            terminated earlier under Section 15 of the Plan. 

           

          7.                 
Term of Award.

          The term of each Award shall be determined
            by
            the Administrator and stated in the Award Agreement.  In the case of an
            Option, the term shall be ten (10) years from the Grant Date or such
            shorter term as may be provided in the Award Agreement; provided that
            an
            Incentive Stock Option granted to an Employee who on the Grant Date owns
            stock
            representing more than ten percent (10%) of the voting power of all classes
            of
            stock of the Company or any Subsidiary shall have a term of no more than
            five
            (5) years from the Grant Date.

           

          8.                 
Options.

          The Administrator may grant an Option
            or
            provide for the grant of an Option, either from time to time in the discretion
            of the Administrator or automatically upon the occurrence of specified
            events,
            including, without limitation, the achievement of performance goals,
            the
            satisfaction of an event or condition within the control of the Awardee
            or
            within the control of others. 

           

              (a)      Option
            Agreement.    Each Option Agreement
            shall contain provisions regarding (i) the number of Shares that may be
            issued upon exercise of the Option, (ii) the type of Option, (iii) the
            exercise price of the Shares and the means of payment for the Shares,
            (iv) the term of the Option, (v) such terms and conditions on the
            vesting and/or exercisability of an Option as may be determined from
            time to
            time by the Administrator, (vi) restrictions on the transfer of the Option
            or the Shares issued upon exercise of the Option and forfeiture provisions,
            and
            (vii) such further terms and conditions, in each case not inconsistent with
            this Plan as may be determined from time to time by the Administrator.
            

           

              (b)      Exercise
            Price.    The per share exercise
            price for the Shares to be issued pursuant to exercise of an Option shall
            be
            determined by the Administrator, subject to the following: 

                  i.         In
            the case of an Incentive Stock Option, the per Share exercise price shall
            be no
            less than one hundred percent (100%) of the Fair Market Value per Share
            on the
            Grant Date; provided however, that in the case of an Incentive Stock
            Option
            granted to an Employee who on the Grant Date owns stock representing
            more than
            ten percent (10%) of the total combined voting power of all classes of
            stock of
            the Company or any Parent or Subsidiary, the per Share exercise price
            shall be
            no less than one hundred ten percent (110%) of the Fair Market Value
            per Share
            on the Grant Date. 

                  ii.        In
            the case of a Nonstatutory Stock Option, the per Share exercise price
            shall be
            no less than one hundred percent (100%) of the Fair Market Value per
            Share on
            the Grant Date.

                  iii.       Notwithstanding
            the foregoing, at the Administrator's discretion, Conversion Awards may
            be
            granted in substitution and/or conversion of options of an acquired entity,
            with
            a per Share exercise price of less than 100% of the Fair Market Value
            per Share
            on the date of such substitution and/or conversion. 

           

              (c)      Vesting
            Period and Exercise Dates.    Options
            granted under this Plan shall vest and/or be exercisable at such time
            and in
            such installments during the period prior to the expiration of the Option's
            term
            as determined by the Administrator.  The Administrator shall have the right
            to make the timing of the ability to exercise any Option granted under
            this Plan
            subject to continued employment, the passage of time and/or such performance
            requirements as deemed appropriate by the Administrator, or to grant
            fully
            vested Options.  At any time after the grant of an Option, the
            Administrator may reduce or eliminate any restrictions surrounding any
            Participant's right to exercise all or part of the Option. 

           

              (d)      Form
            of Consideration.    The Administrator
            shall determine the acceptable form of consideration for exercising an
            Option,
            including the method of payment, either through the terms of the Option
            Agreement or at the time of exercise of an Option.  Acceptable forms of
            consideration may include: 

                  i.         cash;
            

                  ii.        check
            or wire transfer (denominated in U.S. Dollars); 

                  iii.       subject
            to the Company's discretion to refuse for any reason and at any time
            to accept
            such consideration and subject to any conditions or limitations established
            by
            the Administrator, other Shares held by the Participant which have a Fair
            Market Value on the date of surrender equal to the aggregate exercise
            price of
            the Shares as to which said Option shall be exercised; 

                  iv.       consideration
            received by the Company under a broker-assisted sale and remittance program
            acceptable to the Administrator; 

                  v.        cashless
            “net exercise” arrangement pursuant to which the Company will reduce the number
            of Shares issued upon exercise by the largest whole number of Shares
            having an
            aggregate Fair Market Value that does not exceed the aggregate exercise
            price;
            provided that the Company shall accept a cash or other payment from the
            Participant to the extent of any remaining balance of the exercise price
            not
            satisfied by such reduction in the number of whole Shares to be issued;

                  vi.       such
            other consideration and method of payment for the issuance of Shares
            to the
            extent permitted by Applicable Laws; or 

                  vii.      any
            combination of the foregoing methods of payment.

           

              (e)      No
            Option (or Stock Appreciation Right) Repricings. Other than in connection
            with a change in the Company’s capitalization (as described in
            Section 14(a) of the Plan), a Repricing (as defined below) is prohibited
            without approval by the stockholder s of the Company. 

           

              “Repricing”
            means any of the following or any other action that has the same purpose
            and
            effect: (a) lowering the exercise price of an outstanding Option or Stock
            Appreciation Right granted under this Plan after it is granted;
            (b) any other action affecting an outstanding Option or Stock Appreciation
            Right granted under this Plan that is treated as a repricing under United
            States
            generally accepted accounting principles; (c) canceling an outstanding
            Option or Stock Appreciation Right granted under this Plan at a time
            when its
            exercise or purchase price exceeds the then fair market value of the
            stock
            underlying such outstanding Option or Stock Appreciation Right, in exchange
            for
            another Option or Stock Appreciation Right or a cash payment, unless
            the
            cancellation and exchange occurs in connection with a merger, consolidation,
            sale of substantially all the Company’s assets, acquisition, spin-off, spin-out,
            or other similar corporate transaction. 

           

          9.                 
Effect of Termination
            of Continuous Service on
            Awards

           

              (a)      Generally.    Unless
            otherwise provided for by
            the Administrator, upon an Awardee's Termination of Continuous Service
            other
            than as a result of circumstances described in Sections 9(b), (c), (d)
            and (e)
            below, all outstanding Awards granted to such Awardee that were vested
            and
            exercisable as of the date of the Awardee’s Termination of Continuous Service
            may be exercised by the Awardee until the earlier of (A) three (3) months
            following Awardee’s Termination of Continuous Service or (B) the expiration
            of the term of such Award; provided, however, that the Administrator
            may in the
            Award Agreement specify a period of time (but not beyond the expiration
            date of
            the Award) following Termination of Continuous Service during which the
            Awardee
            may exercise the Award as to Shares that were vested and exercisable
            as of the
            date of Termination of Continuous Service.  To the extent such a period
            following Termination of Continuous Service is specified, the Award shall
            automatically terminate at the end of such period to the extent the Awardee
            has
            not exercised it within such period. 

           

              (b)      Disability
            of Awardee.    Unless otherwise
            provided for by the Administrator, upon an Awardee's Termination of Continuous
            Service as a result of the Awardee's disability, including Total and
            Permanent
            Disability, all outstanding Awards granted to such Awardee that were
            vested and
            exercisable as of the date of the Awardee’s Termination of Continuous Service
            may be exercised by the Awardee until the earlier of (A) twelve (12)
            months
            following Awardee’s Termination of Continuous Service as a result of Awardee’s
            disability, including Total and Permanent Disability or (B) the expiration
            of the term of such Award.  If the Participant does not exercise such Award
            within the time specified, the Award (to the extent not exercised) shall
            automatically terminate. 

              

              (c)      Death
            of Awardee.    Unless otherwise provided
            for by the Administrator, upon an Awardee's Termination of Continuous
            Service as
            a result of the Awardee's death, all outstanding Awards granted to such
            Awardee
            that were vested and exercisable as of the date of the Awardee’s death may be
            exercised until the earlier of (A) twelve (12) months following the
            Awardee's death or (B) the expiration of the term of such Award.  If
            an Award is held by the Awardee when he or she dies, such Award may be
            exercised, to the extent the Award is vested and exercisable, by the
            beneficiary
            designated by the Awardee (as provided in Section 16 of the Plan), the
            executor or administrator of the Awardee's estate or, if none, by the
            person(s)
            entitled to exercise the Award under the Awardee's will or the laws of
            descent
            or distribution; provided that the Company need not accept exercise of
            an Award
            by such beneficiary, executor or administrator unless the Company has
            satisfactory evidence of such person's authority to act as such.  If the
            Award is not so exercised within the time specified, such Award (to the
            extent
            not exercised) shall automatically terminate.  The Awardee’s service shall
            be deemed to have terminated on account of death if the Awardee dies
            within
            three (3) months (or such longer period as determined by the Administrator,
            in
            its discretion) after the Awardee’s Termination of Continuous Service.


              (d)      Termination
            for Cause.    The Administrator
            has the authority to cause all outstanding Awards held by an Awardee
            to
            terminate immediately in their entirety (including as to vested Awards)
            upon
            first notification to the Awardee of the Awardee’s Termination of Continuous
            Service for Cause in accordance with Section 4(b)(xvi) above.

           

              (e)      Other
            Terminations of Continuous
            Service.    The Administrator may provide in the
            applicable Award Agreement for different treatment of Awards upon Termination
            of
            Continuous Service of the Awardee than that specified above.

           

              (f)       Extension
            of Exercise Period.    The
            Administrator shall have full power and authority to extend the period
            of time
            for which an Award is to remain exercisable following an Awardee’s Termination
            of Continuous Service from the periods set forth in Sections 9(a), (b),
            (c), (d)
            and (e) above or in the Award Agreement to such greater time as the
            Administrator shall deem appropriate, provided that in no event shall
            such Award
            be exercisable later than the date of expiration of the term of such
            Award as
            set forth in the Award Agreement. 

           

              (g)      Extension
            if Exercise Prevented by
            Law.    Notwithstanding the foregoing, other than a
            termination for Cause, if a sale within the applicable time periods set
            forth in
            Section 9(a), (b), (c) and (e) above or in the Award Agreement is prevented
            by
            Section 18 below, the Award shall remain exercisable until thirty (30)
            days
            after the date the Awardee is notified by the Company that the Award
            is
            exercisable, but in any event no later than the Award expiration
            date.

           

              (h)      Extension
            if Subject to Section
            16(b).    Notwithstanding the foregoing, other than a
            termination for Cause, if a sale within the applicable time periods set
            forth in
            Section 9(a), (b), (c) and (e) above or in the Award Agreement would
            subject the
            Awardee to a suit under Section 16(b) of the Exchange Act, the Award
            shall
            remain exercisable until the earliest to occur of (i) the tenth
            (10th) day following the date on which a sale of shares by the
            Awardee would no longer be subject to suit, (ii) the one hundred ninetieth
            (190th) day after Awardee’s Termination of Continuous Service, or
            (iii) the Award expiration date.

           

          10.             
Incentive Stock Option
            Limitations/Terms.

           

              (a)      Eligibility.    Only
            employees (as determined
            in accordance with Section 3401(c) of the Code and the regulations
            promulgated thereunder) of the Company or any of its Subsidiaries may
            be granted
            Incentive Stock Options. 

           

              (b)      $100,000
            Limitation.    Notwithstanding the
            designation “Incentive Stock Option” in an Option Agreement, if and to the
            extent that the aggregate Fair Market Value of the Shares with respect
            to which
            Incentive Stock Options are exercisable for the first time by the Awardee
            during
            any calendar year (under all plans of the Company and any of its Subsidiaries)
            exceeds U.S. $100,000, such Options shall be treated as Nonstatutory
            Stock
            Options.  For purposes of this Section 10(b), Incentive Stock Options
            shall be taken into account in the order in which they were granted.  The
            Fair Market Value of the Shares shall be determined as of the Grant Date.
            

           

              (c)      Transferability.    An
            Incentive Stock Option
            may not be sold, pledged, assigned, hypothecated, transferred or disposed
            of in
            any manner by the Awardee otherwise than by will or the laws of descent
            and
            distribution, and, during the lifetime of such Awardee, may only be exercised
            by
            the Awardee.  If the terms of an Incentive Stock Option are amended to
            permit transferability, the Option will be treated for tax purposes as
            a
            Nonstatutory Stock Option.  The designation of a beneficiary by an Awardee
            will not constitute a transfer. 

              

              (d)      Exercise
            Price.    The per Share exercise
            price of an Incentive Stock Option shall be determined by the Administrator
            in
            accordance with Section 8(b)(i) of the Plan. 

              

              (e)      Other
            Terms.    Option Agreements evidencing
            Incentive Stock Options shall contain such other terms and conditions
            as may be
            necessary to qualify, to the extent determined desirable by the Administrator,
            with the applicable provisions of Section 422 of the Code. 

           

          11.             
Exercise of Award.    

              

              (a)      Procedure
            for Exercise. 

                  i.         Any
            Award granted hereunder shall be exercisable according to the terms of
            the Plan
            and at such times and under such conditions as determined by the Administrator
            and set forth in the respective Award Agreement. 

                  ii.        An
            Award shall be deemed exercised when the Company receives (A) written or
            electronic notice of exercise (in accordance with the Award Agreement)
            from the
            person entitled to exercise the Award; (B) full payment for the Shares with
            respect to which the related Award is exercised; and (C) payment of all
            applicable withholding taxes (if any). 

                  iii.       An
            Award may not be exercised for a fraction of a Share.

           

              (b)      Rights
            as a Stockholder.  The Company shall issue (or cause
            to be issued) such Shares as administratively practicable after the Award
            is
            exercised.  Shares issued upon exercise of an Award shall be issued in the
            name of the Participant or, if requested by the Participant, in the name
            of the
            Participant and his or her spouse.  Unless provided otherwise by the
            Administrator or pursuant to this Plan, until the Shares are issued (as
            evidenced by the appropriate entry on the books of the Company or of
            a duly
            authorized transfer agent of the Company), no right to vote or receive
            dividends
            or any other rights as a stockholder shall exist with respect to the
            Shares
            subject to an Award, notwithstanding the exercise of the Award.
 

           

          12.             
Stock Awards.    

           

              (a)      Stock
            Award Agreement.    Each Stock Award
            Agreement shall contain provisions regarding 

                  (i)   the
            number of Shares
            subject to such Stock Award or a formula for determining such number,
            

                  (ii)   the
            purchase price of the
            Shares, if any, and the means of payment for the Shares, 

                  (iii)   the
            performance criteria
            (including Qualifying Performance Criteria), if any, and level of achievement
            versus these criteria that shall determine the number of Shares granted,
            issued,
            retainable and/or vested, 

                  (iv)   such
            terms and conditions
            on the grant, issuance, vesting, settlement and/or forfeiture of the
            Shares as
            may be determined from time to time by the Administrator, 

                  (v)   restrictions
            on the
            transferability of the Stock Award and (vi) such further terms and
            conditions in each case not inconsistent with this Plan as may be determined
            from time to time by the Administrator. 

           

              (b)      Restrictions
            and Performance Criteria.    The
            grant, issuance, retention, settlement and/or vesting of each Stock Award
            or the
            Shares subject thereto may be subject to such performance criteria (including
            Qualifying Performance Criteria) and level of achievement versus these
            criteria
            as the Administrator shall determine, which criteria may be based on
            financial
            performance, personal performance evaluations and/or completion of service
            by
            the Awardee.  Unless otherwise permitted in compliance with the
            requirements of Code Section 162(m) with respect to an Award intended
            to comply
            as “performance-based compensation” thereunder, the Committee shall establish
            the Qualifying Performance Criteria applicable to, and the formula for
            calculating the amount payable under, the Award no later than the earlier
            of (a)
            the date ninety (90) days after the commencement of the applicable performance
            period, or (b) the date on which 25% of the performance period has elapsed,
            and
            in any event at a time when the achievement of the applicable Qualifying
            Performance Criteria remains substantially uncertain.

           

              (c)      Forfeiture.    Unless
            otherwise provided for
            by the Administrator, upon the Awardee's Termination of Continuous Service,
            the
            Stock Award and the Shares subject thereto shall be forfeited, provided
            that to
            the extent that the Participant purchased or earned any Shares, the Company
            shall have a right to repurchase the unvested Shares at such price and
            on such
            terms and conditions as the Administrator determines. 

           

              (d)      Rights
            as a Stockholder.    Unless otherwise
            provided by the Administrator in the Award Agreement, the Participant
            shall have
            the rights equivalent to those of a stockholder and shall be a stockholder
            only
            after Shares are issued (as evidenced by the appropriate entry on the
            books of
            the Company or of a duly authorized transfer agent of the Company) to
            the
            Participant.  Unless otherwise provided by the Administrator, a Participant
            holding Stock Units shall not be entitled to receive dividend payments
            or any
            credit therefor as if he or she was an actual stockholder. 

           

              (e)      Stock
            Appreciation Rights.   

                  i.         General.    Stock
            Appreciation Rights may be granted either alone, in addition to, or in
            tandem
            with other Awards granted under the Plan.  The Administrator
            may grant Stock Appreciation Rights to eligible
            Participants subject to terms and conditions not inconsistent with this
            Plan and
            determined by the Administrator.  The specific terms and conditions
            applicable to the Participant shall be provided for in the Stock Award
            Agreement.  Stock Appreciation Rights shall be exercisable, in whole or in
            part, at such times as the Administrator shall specify in the Stock Award
            Agreement.

                  ii.        Exercise
            of Stock Appreciation Right.    Upon the exercise of a
            Stock Appreciation Right, in whole or in part, the Participant shall
            be entitled
            to a payment in an amount equal to the excess of the Fair Market Value
            on the
            date of exercise of a fixed number of Shares covered by the exercised
            portion of
            the Stock Appreciation Right, over the Fair Market Value on the Grant
            Date of
            the Shares covered by the exercised portion of the Stock Appreciation
            Right (or
            such other amount calculated with respect to Shares subject to the Award
            as the
            Administrator may determine).  The amount due to the Participant upon the
            exercise of a Stock Appreciation Right shall be paid in such form of
            consideration as determined by the Administrator and may be in cash,
            Shares or a
            combination thereof, over the period or periods specified in the Stock
            Award
            Agreement.  A Stock Award Agreement may place limits on the amount that may
            be paid over any specified period or periods upon the exercise of a Stock
            Appreciation Right, on an aggregate basis or as to any Participant.  A
            Stock Appreciation Right shall be considered exercised when the Company
            receives
            written notice of exercise in accordance with the terms of the Stock
            Award
            Agreement from the person entitled to exercise the Stock Appreciation
            Right.

                  iii.       Nonassignability
            of Stock Appreciation Rights.    Except as
            determined by the Administrator, no Stock Appreciation Right shall be
            assignable
            or otherwise transferable by the Participant except by will or by the
            laws of
            descent and distribution.

           

          13.               
Other Provisions
            Applicable to
            Awards.    

           

              (a)      Non-Transferability
            of Awards.    Unless
            determined otherwise by the Administrator, an Award may not be sold,
            pledged,
            assigned, hypothecated, transferred, or disposed of in any manner for
            value
            other than by beneficiary designation, will or by the laws of descent
            or
            distribution.  Subject to Section 10(c), the Administrator may in its
            discretion make an Award transferable to an Awardee's family member or
            any other
            person or entity as it deems appropriate.  If the Administrator makes an
            Award transferable, either at the time of grant or thereafter, such Award
            shall
            contain such additional terms and conditions as the Administrator deems
            appropriate, and any transferee shall be deemed to be bound by such terms
            upon
            acceptance of such transfer. 

              

              (b)      Qualifying
            Performance Criteria.    For
            purposes of this Plan, the term “Qualifying Performance Criteria” shall mean any
            one or more of the following performance criteria, either individually,
            alternatively or in any combination, applied to either the Company as
            a whole or
            to a business unit, Affiliate or business segment, either individually,
            alternatively or in any combination, and measured either annually or
            cumulatively over a period of years, on an absolute basis or relative
            to a
            pre-established target, to previous years' results or to a designated
            comparison
            group, in each case as specified by the Administrator in the
            Award: (i) cash flow; (ii) earnings (including gross
            margin; earnings before interest and
            taxes; earnings before interest, taxes, depreciation and amortization;
            earnings
            before taxes; and net earnings); (iii) earnings
            per share; (iv) growth in earnings or earnings per share; (v) stock
            price; (vi) return on equity or average stockholders' equity;
            (vii) total stockholder return; (viii) return on capital;
            (ix) return on assets or net assets; (x) return on investment;
            (xi) revenue or growth in revenue; (xii) income or net income;
            (xiii) operating income or net operating income, in aggregate or per share;
            (xiv) operating profit or net operating profit; (xv) operating margin;
            (xvi) return on operating revenue; (xvii) market share;
            (xviii) contract awards or backlog; (xix) overhead or other expense
            reduction; (xx) growth in stockholder value relative to the moving average
            of the S&P 500 Index or a peer group index; (xxi) credit rating;
            (xxii) strategic plan development and implementation (including individual
            performance objectives that relate to achievement of the Company’s or any
            business unit’s strategic plan); (xxiii) improvement in workforce
            diversity; (xxiv) growth of revenue, operating income or net income;
            (xxv)
            efficiency ratio; (xxvi) ratio of nonperforming assets to total assets;
            and
            (xxvii) any other similar criteria.  The Committee may appropriately adjust
            any evaluation of performance under a Qualifying Performance Criteria
            to exclude
            any of the following events that occurs during a performance period:
            (A) asset write-downs; (B) litigation or claim judgments or
            settlements; (C) the effect of changes in tax law, accounting principles or
            other such laws or provisions affecting reported results; (D) accruals for
            reorganization and restructuring programs; (E) any gains or losses
            classified as extraordinary or as discontinued operations in the Company’s
            financial statements; and (F) mergers, acquisitions or
            divestitures.

           

              (c)      Certification.    Prior
            to the payment of any
            compensation under an Award intended to qualify as “performance-based
            compensation” under Section 162(m) of the Code, the Committee shall certify
            the extent to which any Qualifying Performance Criteria and any other
            material
            terms under such Award have been satisfied (other than in cases where
            such
            relate solely to the increase in the value of the Common Stock). 

              

              (d)      Discretionary
            Adjustments Pursuant to
            Section 162(m).    Notwithstanding satisfaction of
            any completion of any Qualifying Performance Criteria, to the extent
            specified
            at the time of grant of an Award to “covered employees” within the meaning of
            Section 162(m) of the Code, the number of Shares, Options or other benefits
            granted, issued, retainable and/or vested under an Award on account of
            satisfaction of such Qualifying Performance Criteria may be reduced by
            the
            Committee on the basis of such further considerations as the Committee
            in its
            sole discretion shall determine. 

           

              (e)      Tax
            Withholding Obligation.    As a condition
            of the grant, issuance, vesting, exercise or settlement of an Award granted
            under the Plan, the Participant shall make such arrangements as the
            Administrator may require for the satisfaction of any applicable federal,
            state,
            local or foreign withholding tax obligations that may arise in connection
            with
            such grant, issuance, vesting, exercise or settlement of the Award.  The
            Company shall not be required to issue any Shares under the Plan until
            such
            obligations are satisfied.  

           

              (f)       Compliance
            with Section
            409A.    Notwithstanding anything to the contrary
            contained herein, to the extent that the Administrator determines that
            any Award
            granted under the Plan is subject to Code Section 409A and unless otherwise
            specified in the applicable Award Agreement, the Award Agreement evidencing
            such
            Award shall incorporate the terms and conditions necessary for such Award
            to
            avoid the consequences described in Code Section 409A(a)(1), and to the
            maximum
            extent permitted under Applicable Law (and unless otherwise stated in
            the
            applicable Award Agreement), the Plan and the Award Agreements shall
            be
            interpreted in a manner that results in their conforming to the requirements
            of
            Code Section 409A(a)(2), (3) and (4) and any Department of Treasury or
            Internal
            Revenue Service regulations or other interpretive guidance issued under
            Section
            409A (whenever issued, the “Guidance”).  Notwithstanding anything to the
            contrary in this Plan (and unless the Award Agreement provides otherwise,
            with
            specific reference to this sentence), to the extent that a Participant
            holding
            an Award that constitutes “deferred compensation” under Section 409A and the
            Guidance is a “specified employee” (also as defined thereunder), no distribution
            or payment of any amount shall be made before a date that is six (6)
            months
            following the date of such Participant's “separation from service” (as defined
            in Section 409A and the Guidance) or, if earlier, the date of the Participant's
            death.

           

              (g)      Deferral
            of Award Benefits.    The
            Administrator may in its discretion and upon such terms and conditions
            as it
            determines appropriate permit one or more Participants whom it selects
            to (a)
            defer compensation payable pursuant to the terms of an Award, or (b)
            defer
            compensation arising outside the terms of this Plan pursuant to a program
            that
            provides for deferred payment in satisfaction of such other compensation
            amounts
            through the issuance of one or more Awards.  Any such deferral arrangement
            shall be evidenced by an Award Agreement in such form as the Administrator
            shall
            from time to time establish, and no such deferral arrangement shall be
            a valid
            and binding obligation unless evidenced by a fully executed Award Agreement,
            the
            form of which the Administrator has approved, including through the
            Administrator's establishing a written program (the “Program”) under this Plan
            to govern the form of Award Agreements participating in such Program.  Any
            such Award Agreement or Program shall specify the treatment of dividends
            or
            dividend equivalent rights (if any) that apply to Awards governed thereby,
            and
            shall further provide that any elections governing payment of amounts
            pursuant
            to such Program shall be in writing, shall be delivered to the Company
            or its
            agent in a form and manner that complies with Code Section 409A and the
            Guidance, and shall specify the amount to be distributed in settlement
            of the
            deferral arrangement, as well as the time and form of such distribution
            in a
            manner that complies with Code Section 409A and the Guidance. 


           

          14.             
Adjustments upon
            Changes in Capitalization, Dissolution, or Change
            In Control    

           

              (a)      Changes
            in Capitalization.    Subject to any
            required action by the stockholders of the Company, the number of shares
            of
            Common Stock covered by each outstanding Award, the number of shares
            of Common
            Stock which have been authorized for issuance under the Plan, but as
            to which no
            Awards have yet been granted or which have been returned to the Plan
            upon
            cancellation, forfeiture or expiration of an Award, the price per Share
            subject
            to each such outstanding Award and each of the share limits set forth
            in Section
            3(a) and 3(b), shall be proportionately adjusted for any increase or
            decrease in
            the number of issued shares of Common Stock resulting from a stock split,
            reverse stock split, stock dividend, combination or reclassification
            of the
            Common Stock, payment of a dividend or distribution in a form other than
            stock
            (excepting normal cash dividends) that has a material effect on the Fair
            Market
            Value of the shares of Common Stock, or any other increase or decrease
            in the
            number of issued shares of Common Stock effected without receipt of
            consideration by the Company; provided, however, that conversion of any
            convertible securities of the Company shall not be deemed to have been
“effected
            without receipt of consideration.” Such adjustment shall be made by the
            Administrator, whose determination in that respect shall be final, binding
            and
            conclusive.  Except as expressly provided herein, no issuance by the
            Company of shares of stock of any class, or securities convertible into
            shares
            of stock of any class, shall affect, and no adjustment by reason thereof
            shall
            be made with respect to, the number or price of shares of Common Stock
            subject
            to an Award. 

           

              (b)      Dissolution
            or Liquidation.    In the event of
            the proposed dissolution or liquidation of the Company, the Administrator
            shall
            notify each Participant as soon as practicable prior to the effective
            date of
            such proposed transaction.  To the extent it has not been previously
            exercised or the Shares subject thereto issued to the Awardee and unless
            otherwise determined by the Administrator, an Award will terminate immediately
            prior to the consummation of such proposed transaction. 

           

              (c)      Change
            in Control.    In the event there is a
            Change in Control of the Company, as determined by the Board or a Committee,
            the
            Board or Committee may, in its discretion, (i) provide for the assumption
            or
            substitution of, or adjustment (including to the number and type of Shares
            and
            exercise or purchase price applicable) to, each outstanding Award; (ii)
            accelerate the vesting of Options and terminate any restrictions on Stock
            Awards; and/or (iii) provide for termination of Awards as a result of
            the Change
            in Control on such terms and conditions as it deems appropriate, including
            providing for the cancellation of Awards for a cash or other payment
            to the
            Participant.

          For purposes
            of this
            Section 14(c), an Award shall be considered assumed, without limitation,
            if, at
            the time of issuance of the stock or other consideration upon a Change
            in
            Control, as the case may be, each holder of an Award would be entitled
            to
            receive upon exercise of the Award the same number and kind of shares
            of stock
            or the same amount of property, cash or securities as such holder would
            have
            been entitled to receive upon the occurrence of the transaction if the
            holder
            had been, immediately prior to such transaction, the holder of the number
            of
            Shares covered by the Award at such time (after giving effect to any
            adjustments
            in the number of Shares covered by the Award as provided for in Section
            14(a);
            provided that if such consideration received in the transaction is not
            solely
            common stock of the successor corporation, the Administrator may, with
            the
            consent of the successor corporation, provide for the consideration to
            be
            received upon exercise of the Award to be solely common stock of the
            successor
            corporation equal to the Fair Market Value of the per Share consideration
            received by holders of Common Stock in the transaction.  

          15.              
Amendment and Termination
            of the
            Plan.    

              (a)      Amendment
            and Termination.    The
            Administrator may amend, alter or discontinue the Plan or any Award Agreement,
            but any such amendment shall be subject to approval of the stockholders
            of the
            Company in the manner and to the extent required by Applicable Laws.  To
            the extent required to comply with Section 162(m), the Company shall
            seek
            re-approval of the Plan from time to time by the stockholders.  In
            addition, without limiting the foregoing, unless approved by the stockholders
            of
            the Company, no such amendment shall be made that would: 

                  i.                 
            materially increase the maximum number of Shares for which Awards may
            be granted
            under the Plan, other than an increase pursuant to Section 14 of the Plan;
            or 

           

                  ii.               
            reduce the minimum exercise prices at which Options may be granted under
            the
            Plan (as set forth in Section 8(b)); or

           

                  iii.        
            result in a Repricing (as defined in Section 8(e)) of Options or Stock
            Appreciation Rights; or 

           

                  iv.      
            change the class of persons eligible to receive Awards under the Plan.


           

              (b)      Effect
            of Amendment or Termination.    No
            amendment, suspension or termination of the Plan shall impair the rights
            of any
            Award, unless mutually agreed otherwise between the Participant and the
            Administrator, which agreement must be in writing and signed by the Participant
            and the Company; provided further that the Administrator may amend an
            outstanding Award in order to conform it to the Administrator’s intent (in its
            sole discretion) that such Award not be subject to Code Section
            409A(a)(1)(B).  Termination of the Plan shall not affect the
            Administrator's ability to exercise the powers granted to it hereunder
            with
            respect to Awards granted under the Plan prior to the date of such termination.
            

           

              (c)      Effect
            of the Plan on Other
            Arrangements.    Neither the adoption of the Plan by the
            Board or a Committee nor the submission of the Plan to the stockholders
            of the
            Company for approval shall be construed as creating any limitations on
            the power
            of the Board or any Committee to adopt such other incentive arrangements
            as it
            or they may deem desirable, including without limitation, the granting
            of
            restricted stock,  stock options or cash bonuses otherwise than under the
            Plan, and such arrangements may be either generally applicable or applicable
            only in specific cases.  The value of Awards granted pursuant to the Plan
            will not be included as compensation, earnings, salaries or other similar
            terms
            used when calculating an Awardee’s benefits under any employee benefit plan
            sponsored by the Company or any Subsidiary except as such plan otherwise
            expressly provides.

           

          16.              
Designation of
            Beneficiary.    

           

              (a)      An
            Awardee may file a written designation of a beneficiary who is to
            receive the Awardee's rights pursuant to Awardee's Award or the Awardee
            may
            include his or her Awards in an omnibus beneficiary designation for all
            benefits
            under the Plan.  To the extent that Awardee has completed a designation of
            beneficiary while employed with the Company, such beneficiary designation
            shall
            remain in effect with respect to any Award hereunder until changed by
            the
            Awardee to the extent enforceable under Applicable Law. 

           

              (b)      Such
            designation of beneficiary may be changed by the Awardee at any time
            by written notice.  In the event of the death of an Awardee and in the
            absence of a beneficiary validly designated under the Plan who is living
            at the
            time of such Awardee's death, the Company shall allow the executor or
            administrator of the estate of the Awardee to exercise the Award, or
            if no such
            executor or administrator has been appointed (to the knowledge of the
            Company),
            the Company, in its discretion, may allow the spouse or one or more dependents
            or relatives of the Awardee to exercise the Award to the extent permissible
            under Applicable Law or if no spouse, dependent or relative is known
            to the
            Company, then to such other person as the Company may designate. 

           

          17.              
No Right to Awards
            or to
            Employment.    

          No person shall have any claim or right
            to be
            granted an Award and the grant of any Award shall not be construed as
            giving an
            Awardee the right to continue in the employ or service of the Company
            or its
            Affiliates.  Further, the Company and its Affiliates expressly reserve the
            right, at any time, to dismiss any Employee, Consultant or Awardee at
            any time
            without liability or any claim under the Plan, except as provided herein
            or in
            any Award Agreement entered into hereunder. 

           

          18.              
Legal Compliance.    

          Subject to Section 22, Shares shall
            not be
            issued pursuant to the exercise of an Option or Stock Award unless the
            exercise
            of such Option or Stock Award and the issuance and delivery of such Shares
            shall
            comply with Applicable Laws and shall be further subject to the approval
            of
            counsel for the Company with respect to such compliance. 

           

          19.              
Reservation of
            Shares.    

          The Company, during the term of this
            Plan,
            will at all times reserve and keep available such number of Shares as
            shall be
            sufficient to satisfy the requirements of the Plan. 

           

          20.              
Notice.    

          Any written notice to the Company required
            by
            any provisions of this Plan shall be addressed to the Secretary of the
            Company
            and shall be effective when received. 

           

          21.              
Governing Law; Interpretation
            of Plan and
            Awards.

           

              (a)      This
            Plan and all determinations made and actions taken pursuant hereto
            shall be governed by the substantive laws, but not the choice of law
            rules, of
            the state of Delaware. 

           

              (b)      In
            the event that any provision of the Plan or any Award granted under
            the Plan is declared to be illegal, invalid or otherwise unenforceable
            by a
            court of competent jurisdiction, such provision shall be reformed, if
            possible,
            to the extent necessary to render it legal, valid and enforceable, or
            otherwise
            deleted, and the remainder of the terms of the Plan and/or Award shall
            not be
            affected except to the extent necessary to reform or delete such illegal,
            invalid or unenforceable provision. 

              (c)      The
            headings preceding the text of the sections hereof are inserted
            solely for convenience of reference, and shall not constitute a part
            of the
            Plan, nor shall they affect its meaning, construction or effect. 

              (d)      The
            terms of the Plan and any Award shall inure to the benefit of and be
            binding upon the parties hereto and their respective permitted heirs,
            beneficiaries, successors and assigns. 

              (e)      All
            questions arising under the Plan or under any Award shall be decided
            by the Administrator in its total and absolute discretion.  In the event
            the Participant believes that a decision by the Administrator with respect
            to
            such person was arbitrary or capricious, the Participant may request
            arbitration
            with respect to such decision.  The review by the arbitrator shall be
            limited to determining whether the Administrator's decision was arbitrary
            or
            capricious.  This arbitration shall be the sole and exclusive review
            permitted of the Administrator's decision, and the Awardee shall as a
            condition
            to the receipt of an Award be deemed to explicitly waive any right to
            judicial
            review. 

              (f)       Notice
            of demand for arbitration shall be made in writing to the
            Administrator within thirty (30) days after the applicable decision by the
            Administrator.  The arbitrator shall be appointed in accordance with the
            Commercial Rules of Dispute Resolution of the American Arbitration Association;
            provided, however, that the arbitration shall not be administered by
            the
            American Arbitration Association.  The arbitration shall be administered
            and conducted by the arbitrator pursuant to the Commercial Rules of Dispute
            Resolution of the American Arbitration Association.  The decision of the
            arbitrator on the issue(s) presented for arbitration shall be final and
            conclusive and may be enforced in any court of competent jurisdiction.
            

           

          22.              
Limitation on
            Liability.    

          The Company and any Affiliate which
            is in
            existence or hereafter comes into existence shall not be liable to a
            Participant, an Employee, an Awardee or any other persons as to: 

              (a)      The
            Non-Issuance of Shares.    The
            non-issuance or sale of Shares (including under Section 18 above) as
            to which
            the Company has been unable, or the Arbitration deems it infeasible,
            to obtain
            from any regulatory body having jurisdiction the authority deemed by
            the
            Company's counsel to be necessary to the lawful issuance and sale of
            any shares
            hereunder; and 

           

              (b)      Tax
            Consequences.    Any tax consequence
            realized by any Participant, Employee, Awardee or other person due to
            the
            receipt, vesting, exercise or settlement of any Option or other Award
            granted
            hereunder or due to the transfer of any Shares issued hereunder.  The
            Participant is responsible for, and by accepting an Award under the Plan
            agrees
            to bear, all taxes of any nature that are legally imposed upon the Participant
            in connection with an Award, and the Company does not assume, and will
            not be
            liable to any party for, any cost or liability arising in connection
            with such
            tax liability legally imposed on the Participant.  In particular, Awards
            issued under the Plan may be characterized by the Internal Revenue Service
            (the
“IRS”) as “deferred compensation” under the Code resulting in additional taxes,
            including in some cases interest and penalties.  In the event the IRS
            determines that an Award constitutes deferred compensation under the
            Code or
            challenges any good faith characterization made by the Company or any
            other
            party of the tax treatment applicable to an Award, the Participant will
            be
            responsible for the additional taxes, and interest and penalties, if
            any, that
            are determined to apply if such challenge succeeds, and the Company will
            not
            reimburse the Participant for the amount of any additional taxes, penalties
            or
            interest that result.

           

              (c)      Forfeiture.   
The
            requirement that Participant
            forfeit an Award, or the benefits received or to be received under an
            Award,
            pursuant to any Applicable Law.

           

          23.              
Indemnification.

          In addition to such other rights of
            indemnification as they may have as members of the Board or officers
            or
            employees of the Company or an Affiliate, members of the Board and any
            officers
            or employees of the Company or an Affiliate to whom authority to act
            for the
            Board or the Company is delegated shall be indemnified by the Company
            against
            all reasonable expenses, including attorneys’ fees, actually and necessarily
            incurred in connection with the defense of any action, suit or proceeding,
            or in
            connection with any appeal therein, to which they or any of them may
            be a party
            by reason of any action taken or failure to act under or in connection
            with the
            Plan, or any right granted hereunder, and against all amounts paid by
            them in
            settlement thereof (provided such settlement is approved by independent
            legal
            counsel selected by the Company) or paid by them in satisfaction of a
            judgment
            in any such action, suit or proceeding, except in relation to matters
            as to
            which it shall be adjudged in any such action, suit or proceeding that
            such
            person is liable for gross negligence, bad faith or intentional misconduct
            in
            duties; provided, however, that within sixty (60) days after the institution
            of
            such action, suit or proceeding, such person shall offer to the Company,
            in
            writing, the opportunity at its own expense to handle and defend the
            same.

           

          24.              
Unfunded Plan.    

          Insofar as it provides for Awards, the
            Plan
            shall be unfunded.  Although bookkeeping accounts may be established with
            respect to Awardees who are granted Stock Awards under this Plan, any
            such
            accounts will be used merely as a bookkeeping convenience.  The Company
            shall not be required to segregate any assets which may at any time be
            represented by Awards, nor shall this Plan be construed as providing
            for such
            segregation, nor shall the Company nor the Administrator be deemed to
            be a
            trustee of stock or cash to be awarded under the Plan.  Any liability of
            the Company to any Participant with respect to an Award shall be based
            solely
            upon any contractual obligations which may be created by the Plan; no
            such
            obligation of the Company shall be deemed to be secured by any pledge
            or other
            encumbrance on any property of the Company.  Neither the Company nor the
            Administrator shall be required to give any security or bond for the
            performance
            of any obligation which may be created by this Plan.