CHINA
      CLEAN ENERGY INC.


     

    2008
      EQUITY INCENTIVE PLAN

     

    
      	
            	1.	
              Purpose
                of the Plan.

            


    

     

    This
      2008
      Equity Incentive Plan (the “Plan”)
      is
      intended as an incentive, to retain in the employ of and as directors, officers,
      consultants, advisors and employees to China Clean Energy Inc., a Delaware
      corporation (the “Company”),
      and
      any Subsidiary of the Company, within the meaning of Section 424(f) of the
      United States Internal Revenue Code of 1986, as amended (the “Code”),
      persons of training, experience and ability, to attract new directors, officers,
      consultants, advisors and employees whose services are considered valuable,
      to
      encourage the sense of proprietorship and to stimulate the active interest
      of
      such persons in the development and financial success of the Company and its
      Subsidiaries.

     

    It
      is
      further intended that certain options granted pursuant to the Plan shall
      constitute incentive stock options within the meaning of Section 422 of the
      Code
      (the “Incentive
      Options”)
      while
      certain other options granted pursuant to the Plan shall be nonqualified stock
      options (the “Nonqualified
      Options”).
      Incentive Options and Nonqualified Options are hereinafter referred to
      collectively as “Options.”

     

    The
      Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule
      16b-3”)
      promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange
      Act”),
      and
      that transactions of the type specified in subparagraphs (c) to (f) inclusive
      of
      Rule 16b-3 by officers and directors of the Company pursuant to the Plan will
      be
      exempt from the operation of Section 16(b) of the Exchange Act. Further, the
      Plan is intended to satisfy the performance-based compensation exception to
      the
      limitation on the Company’s tax deductions imposed by Section 162(m) of the Code
      with respect to those Options for which qualification for such exception is
      intended. In all cases, the terms, provisions, conditions and limitations of
      the
      Plan shall be construed and interpreted consistent with the Company’s intent as
      stated in this Section 1.

     

    
      	
            	2.	
              Administration
                of the Plan.

            


    

     

    The
      Board
      of Directors of the Company (the “Board”)
      shall
      appoint and maintain as administrator of the Plan a Committee (the “Committee”)
      consisting of two or more directors who are (i) “Independent Directors” (as such
      term is defined under the rules of the NASDAQ Stock Market), (ii) “Non-Employee
      Directors” (as such term is defined in Rule 16b-3) and (iii) “Outside Directors”
(as such term is defined in Section 162(m) of the Code), which shall serve
      at
      the pleasure of the Board. The Committee, subject to Sections 3, 5 and 6 hereof,
      shall have full power and authority to designate recipients of Options and
      to
      determine the terms and conditions of the Option agreements (which need not
      be
      identical) and to interpret the provisions and supervise the administration
      of
      the Plan. The Committee shall have the authority, without limitation, to
      designate which Options granted under the Plan shall be Incentive Options and
      which shall be Nonqualified Options. To the extent any Option does not qualify
      as an Incentive Option, it shall constitute a separate Nonqualified Option.
      

     

    Subject
      to the provisions of the Plan, the Committee shall interpret the Plan and all
      Options granted under the Plan, shall make such rules as it deems necessary
      for
      the proper administration of the Plan, shall make all other determinations
      necessary or advisable for the administration of the Plan and shall correct
      any
      defects or supply any omission or reconcile any inconsistency in the Plan or
      in
      any Options granted under the Plan in the manner and to the extent that the
      Committee deems desirable to carry into effect the Plan or any Options. The
      act
      or determination of a majority of the Committee shall be the act or
      determination of the Committee and any decision reduced to writing and signed
      by
      all of the members of the Committee shall be fully effective as if it had been
      made by a majority of the Committee at a meeting duly held for such purpose.
      Subject to the provisions of the Plan, any action taken or determination made
      by
      the Committee pursuant to this and the other Sections of the Plan shall be
      conclusive on all parties.

     

    In
      the
      event that for any reason the Committee is unable to act or if the Committee
      at
      the time of any grant, award or other acquisition under the Plan does not
      consist of two or more Non-Employee Directors, or if there shall be no such
      Committee, or if the Board otherwise determines to administer the Plan, then
      the
      Plan shall be administered by the Board, and references herein to the Committee
      (except in the proviso to this sentence) shall be deemed to be references to
      the
      Board, and any such grant, award or other acquisition may be approved or
      ratified in any other manner contemplated by subparagraph (d) of Rule 16b-3;
      provided,
      however,
      that
      grants to the Company’s Chief Executive Officer or to any of the Company’s other
      four most highly compensated officers that are intended to qualify as
      performance-based compensation under Section 162(m) of the Code may only be
      granted by the Committee. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
            	3.	
              Designation
                of Optionees and Grantees.

            


    

     

    The
      persons eligible for participation in the Plan as recipients of Options (the
      “Optionees”
or
      the
“Participants”)
      shall
      include directors, officers and employees of, and consultants and advisors
      to,
      the Company or any Subsidiary; provided that Incentive Options may only be
      granted to employees of the Company and any Subsidiary. In selecting
      Participants, and in determining the number of shares to be covered by each
      Option granted to Participants, the Committee may consider any factors it deems
      relevant, including, without limitation, the office or position held by the
      Participant or the Participant’s relationship to the Company, the Participant’s
      degree of responsibility for and contribution to the growth and success of
      the
      Company or any Subsidiary, the Participant’s length of service, promotions and
      potential. A Participant who has been granted an Option hereunder may be granted
      an additional Option or Options, if the Committee shall so
      determine.

     

    
      	
            	4.	
              Stock
                Reserved for the Plan.

            


    

     

    Subject
      to adjustment as provided in Section 8 hereof, a total of 2,000,000 shares
      of
      the Company’s common stock, par value $0.001 per share (the “Stock”),
      shall
      be subject to the Plan, which Stock shall be divided into following classes:
      (a)
      1,000,000 shares of “Par A Stock” and (b) 1,000,000 shares of “Par B Stock.” The
      maximum number of shares of Stock that may be subject to Options granted under
      the Plan to any individual in any calendar year shall conform to any
      requirements applicable to performance-based compensation under Section 162(m)
      of the Code, if qualification as performance-based compensation under Section
      162(m) of the Code is intended. The shares of Stock subject to the Plan shall
      consist of unissued shares, treasury shares or previously issued shares held
      by
      any Subsidiary of the Company, and such number of shares of Stock shall be
      and
      is hereby reserved for such purpose. Any of such shares of Stock that may remain
      unissued and that are not subject to outstanding Options at the termination
      of
      the Plan shall cease to be reserved for the purposes of the Plan, but until
      termination of the Plan the Company shall at all times reserve a sufficient
      number of shares of Stock to meet the requirements of the Plan. Should any
      Option expire or be canceled prior to its exercise or should the number of
      shares of Stock to be delivered upon the exercise of an Option be reduced for
      any reason, the shares of Stock theretofore subject to such Option may be
      subject to future Options under the Plan, except where such reissuance is
      inconsistent with the provisions of Section 162(m) of the Code where
      qualification as performance-based compensation under Section 162(m) of the
      Code
      is intended.

     

    
      	
            	5.	
              Terms
                and Conditions of Options.

            


    

     

    Options
      granted under the Plan shall be subject to the following conditions and shall
      contain such additional terms and conditions, not inconsistent with the terms
      of
      the Plan, as the Committee shall deem desirable:

     

    
      	
            	(a)	
              Option
                Price.
                

            


    

     

    (i) The
      purchase price of each share of Par A Stock purchasable under an Incentive
      Option shall be the greater of (i) $2.50 per share or (ii) 100% of the Fair
      Market Value (as defined below) of such share of Stock on the date the Option
      is
      granted; provided,
      however,
      that
      with respect to an Optionee who, at the time such Incentive Option is granted,
      owns (within the meaning of Section 424(d) of the Code) more than 10% of the
      total combined voting power of all classes of stock of the Company or of any
      Subsidiary, the purchase price per share of Stock shall be at least 110% of
      the
      Fair Market Value per share of Stock on the date of grant. The purchase price
      of
      each share of Par A Stock purchasable under a Nonqualified Option shall be
      the
      greater of (A) $2.50 per share and (B) 100% of the Fair Market Value of such
      share of Stock on the date the Option is granted. The exercise price for each
      Option shall be subject to adjustment as provided in Section 8
      below.

     

    
      
         

      

      
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    (ii) The
      purchase price of each share of Par B Stock purchasable under an Incentive
      Option shall be the greater of (i) $3.00 per share or (ii) 100% of the Fair
      Market Value (as defined below) of such share of Stock on the date the Option
      is
      granted; provided,
      however,
      that
      with respect to an Optionee who, at the time such Incentive Option is granted,
      owns (within the meaning of Section 424(d) of the Code) more than 10% of the
      total combined voting power of all classes of stock of the Company or of any
      Subsidiary, the purchase price per share of Stock shall be at least 110% of
      the
      Fair Market Value per share of Stock on the date of grant. The purchase price
      of
      each share of Par B Stock purchasable under a Nonqualified Option shall be
      the
      greater of (A) $3.00 per share and (B) 100% of the Fair Market Value of such
      share of Stock on the date the Option is granted. The exercise price for each
      Option shall be subject to adjustment as provided in Section 8
      below.

     

    (iii) “Fair
      Market Value”
means
      the closing price on the final trading day immediately prior to the grant of
      the
      Stock on the principal securities exchange on which shares of Stock are listed
      (if the shares of Stock are so listed), or on the NASDAQ Stock Market or OTC
      Bulletin Board (if the shares of Stock are regularly quoted on the NASDAQ Stock
      Market or OTC Bulletin Board, as the case may be), or, if not so listed, the
      mean between the closing bid and asked prices of publicly traded shares of
      Stock
      in the over the counter market, or, if such bid and asked prices shall not
      be
      available, as reported by any nationally recognized quotation service selected
      by the Company, or as determined by the Committee in a manner consistent with
      the provisions of the Code. Anything in this Section 5(a) to the contrary
      notwithstanding, in no event shall the purchase price of a share of Stock be
      less than the minimum price permitted under the rules and policies of any
      national securities exchange on which the shares of Stock are listed.

     

    (b) Option
      Term.
      The
      term of each Option shall be fixed by the Committee, but no Option shall be
      exercisable more than ten years after the date such Option is granted and in
      the
      case of an Incentive Option granted to an Optionee who, at the time such
      Incentive Option is granted, owns (within the meaning of Section 424(d) of
      the
      Code) more than 10% of the total combined voting power of all classes of stock
      of the Company or of any Subsidiary, no such Incentive Option shall be
      exercisable more than five years after the date such Incentive Option is
      granted.

     

    (c) Exercisability.
      Subject
      to Section 5(j) hereof, Options shall vest and become exercisable as to
      one-twelfth (1/12) of the total number of shares subject to the Option every
      three months following the date of grant; and provided further that no Options
      shall be exercisable until such time as any vesting limitation required by
      Section 16 of the Exchange Act, and related rules, shall be satisfied if such
      limitation shall be required for continued validity of the exemption provided
      under Rule 16b-3(d)(3).

     

    Upon
      the
      occurrence of a “Change in Control” (as hereinafter defined), the Committee may
      accelerate the vesting and exercisability of outstanding Options, in whole
      or in
      part, as determined by the Committee in its sole discretion. In its sole
      discretion, the Committee may also determine that, upon the occurrence of a
      Change in Control, each outstanding Option shall terminate within a specified
      number of days after notice to the Optionee thereunder, and each such Optionee
      shall receive, with respect to each share of Company Stock subject to such
      Option, an amount equal to the excess of the Fair Market Value of such shares
      immediately prior to such Change in Control over the exercise price per share
      of
      such Option; such amount shall be payable in cash, in one or more kinds of
      property (including the property, if any, payable in the transaction) or a
      combination thereof, as the Committee shall determine in its sole
      discretion.

     

    For
      purposes of the Plan, unless otherwise defined in an employment agreement
      between the Company and the relevant Optionee, a Change in Control shall be
      deemed to have occurred if:

     

    (i) a
      tender
      offer (or series of related offers) shall be made and consummated for the
      ownership of 50% or more of the outstanding voting securities of the Company,
      unless as a result of such tender offer more than 50% of the outstanding voting
      securities of the surviving or resulting corporation shall be owned in the
      aggregate by the stockholders of the Company (as of the time immediately prior
      to the commencement of such offer), any employee benefit plan of the Company
      or
      its Subsidiaries, and their affiliates;

     

    
      
         

      

      
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    (ii) the
      Company shall be merged or consolidated with another corporation, unless as
      a
      result of such merger or consolidation more than 50% of the outstanding voting
      securities of the surviving or resulting corporation shall be owned in the
      aggregate by the stockholders of the Company (as of the time immediately prior
      to such transaction), any employee benefit plan of the Company or its
      Subsidiaries, and their affiliates;

     

    (iii) the
      Company shall sell substantially all of its assets to another corporation that
      is not wholly owned by the Company, unless as a result of such sale more than
      50% of such assets shall be owned in the aggregate by the stockholders of the
      Company (as of the time immediately prior to such transaction), any employee
      benefit plan of the Company or its Subsidiaries and their affiliates;
      or

     

    (iv) a
      Person
      (as defined below) shall acquire 50% or more of the outstanding voting
      securities of the Company (whether directly, indirectly, beneficially or of
      record), unless as a result of such acquisition more than 50% of the outstanding
      voting securities of the surviving or resulting corporation shall be owned
      in
      the aggregate by the stockholders of the Company (as of the time immediately
      prior to the first acquisition of such securities by such Person), any employee
      benefit plan of the Company or its Subsidiaries, and their
      affiliates.

     

    Notwithstanding
      the foregoing, if Change of Control is defined in an employment agreement
      between the Company and the relevant Optionee, then, with respect to such
      Optionee, Change of Control shall have the meaning ascribed to it in such
      employment agreement.

     

    For
      purposes of this Section 5(c), ownership of voting securities shall take into
      account and shall include ownership as determined by applying the provisions
      of
      Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange Act.
      In
      addition, for such purposes, “Person” shall have the meaning given in Section
      3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
      thereof; provided,
      however,
      that a
      Person shall not include (A) the Company or any of its Subsidiaries; (B) a
      trustee or other fiduciary holding securities under an employee benefit plan
      of
      the Company or any of its Subsidiaries; (C) an underwriter temporarily holding
      securities pursuant to an offering of such securities; or (D) a corporation
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportion as their ownership of stock of the
      Company.

     

    (d) Method
      of Exercise.
      Options
      to the extent then exercisable may be exercised in whole or in part at any
      time
      during the option period, by giving written notice to the Company specifying
      the
      number of shares of Stock to be purchased, accompanied by payment in full of
      the
      purchase price, in cash, or by check or such other instrument as may be
      acceptable to the Committee. As determined by the Committee, in its sole
      discretion, at or after grant, payment in full or in part may be made at the
      election of the Optionee (i) in the form of Stock owned by the Optionee (based
      on the Fair Market Value of the Stock which is not the subject of any pledge
      or
      security interest, (ii) in the form of shares of Stock withheld by the Company
      from the shares of Stock otherwise to be received with such withheld shares
      of
      Stock having a Fair Market Value equal to the exercise price of the Option,
      or
      (iii) by a combination of the foregoing, such Fair Market Value determined
      by
      applying the principles set forth in Section 5(a), provided that the combined
      value of all cash and cash equivalents and the Fair Market Value of any shares
      surrendered to the Company is at least equal to such exercise price and except
      with respect to (ii) above, such method of payment will not cause a
      disqualifying disposition of all or a portion of the Stock received upon
      exercise of an Incentive Option. An Optionee shall have the right to dividends
      and other rights of a stockholder with respect to shares of Stock purchased
      upon
      exercise of an Option at such time as the Optionee (i) has given written notice
      of exercise and has paid in full for such shares, and (ii) has satisfied such
      conditions that may be imposed by the Company with respect to the withholding
      of
      taxes.

     

    (e) Non-transferability
      of Options.
      Options
      are not transferable and may be exercised solely by the Optionee during his
      lifetime or after his death by the person or persons entitled thereto under
      his
      will or the laws of descent and distribution. The Committee, in its sole
      discretion, may permit a transfer of a Nonqualified Option to (i) a trust for
      the benefit of the Optionee, (ii) a member of the Optionee’s immediate family
      (or a trust for his or her benefit) or (iii) pursuant to a domestic relations
      order. Any attempt to transfer, assign, pledge or otherwise dispose of, or
      to
      subject to execution, attachment or similar process, any Option contrary to
      the
      provisions hereof shall be void and ineffective and shall give no right to
      the
      purported transferee.

     

    
      
         

      

      
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    (f) Termination
      by Death.
      Unless
      otherwise determined by the Committee, if any Optionee’s employment with or
      service to the Company or any Subsidiary terminates by reason of death, the
      Option may thereafter be exercised, to the extent then exercisable (or on such
      accelerated basis as the Committee shall determine at or after grant), by the
      legal representative of the estate or by the legatee of the Optionee under
      the
      will of the Optionee, for a period of one (1) year after the date of such death
      (or, if later, such time as the Option may be exercised pursuant to Section
      14(d) hereof) or until the expiration of the stated term of such Option as
      provided under the Plan, whichever period is shorter.

     

    (g) Termination
      by Reason of Disability.
      Unless
      otherwise determined by the Committee, if any Optionee’s employment with or
      service to the Company or any Subsidiary terminates by reason of Disability
      (as
      defined below), then any Option held by such Optionee may thereafter be
      exercised, to the extent it was exercisable at the time of termination due
      to
      Disability (or on such accelerated basis as the Committee shall determine at
      or
      after grant), but may not be exercised after ninety (90) days after the date
      of
      such termination of employment or service (or, if later, such time as the Option
      may be exercised pursuant to Section 14(d) hereof) or the expiration of the
      stated term of such Option, whichever period is shorter; provided,
      however,
      that,
      if the Optionee dies within such ninety (90) day period, any unexercised Option
      held by such Optionee shall thereafter be exercisable to the extent to which
      it
      was exercisable at the time of death for a period of one (1) year after the
      date
      of such death (or, if later, such time as the Option may be exercised pursuant
      to Section 14(d) hereof) or for the stated term of such Option, whichever period
      is shorter. “Disability” shall mean an Optionee’s total and permanent
      disability; provided,
      that if
      Disability is defined in an employment agreement between the Company and the
      relevant Optionee, then, with respect to such Optionee, Disability shall have
      the meaning ascribed to it in such employment agreement

     

    (h) Termination
      by Reason of Retirement.
      Unless
      otherwise determined by the Committee, if any Optionee’s employment with or
      service to the Company or any Subsidiary terminates by reason of Normal or
      Early
      Retirement (as such terms are defined below), any Option held by such Optionee
      may thereafter be exercised to the extent it was exercisable at the time of
      such
      Retirement (or on such accelerated basis as the Committee shall determine at
      or
      after grant), but may not be exercised after ninety (90) days after the date
      of
      such termination of employment or service (or, if later, such time as the Option
      may be exercised pursuant to Section 14(d) hereof) or the expiration of the
      stated term of such Option, whichever date is earlier; provided,
      however,
      that,
      if the Optionee dies within such ninety (90) day period, any unexercised Option
      held by such Optionee shall thereafter be exercisable, to the extent to which
      it
      was exercisable at the time of death, for a period of one (1) year after the
      date of such death (or, if later, such time as the Option may be exercised
      pursuant to Section 14(d) hereof) or for the stated term of such Option,
      whichever period is shorter.

     

    For
      purposes of this paragraph (h), “Normal
      Retirement”
shall
      mean retirement from active employment with the Company or any Subsidiary on
      or
      after the normal retirement date specified in the applicable Company or
      Subsidiary pension plan or if no such pension plan, age 65, and “Early
      Retirement”
shall
      mean retirement from active employment with the Company or any Subsidiary
      pursuant to the early retirement provisions of the applicable Company or
      Subsidiary pension plan or if no such pension plan, age 55.

     

    (i) Other
      Terminations.
      Unless
      otherwise determined by the Committee upon grant, if any Optionee’s employment
      with or service to the Company or any Subsidiary is terminated by such Optionee
      for any reason other than death, Disability, Normal or Early Retirement or
      Good
      Reason (as defined below), the Option shall thereupon terminate, except that
      the
      portion of any Option that was exercisable on the date of such termination
      of
      employment or service may be exercised for the lesser of ninety (90) days after
      the date of termination (or, if later, such time as the Option may be exercised
      pursuant to Section 14(d) hereof) or the balance of such Option’s term, which
      ever period is shorter. The transfer of an Optionee from the employ of or
      service to the Company to the employ of or service to a Subsidiary, or vice
      versa, or from one Subsidiary to another, shall not be deemed to constitute
      a
      termination of employment or service for purposes of the Plan.

     

    (i) In
      the
      event that the Optionee’s employment or service with the Company or any
      Subsidiary is terminated by the Company or such Subsidiary for “cause” any
      unexercised portion of any Option shall immediately terminate in its entirety.
      For purposes hereof, unless otherwise defined in an employment agreement between
      the Company and the relevant Optionee, “Cause” shall exist upon a good-faith
      determination by the Board, following a hearing before the Board at which an
      Optionee was represented by counsel and given an opportunity to be heard, that
      such Optionee has been accused of fraud, dishonesty or act detrimental to the
      interests of the Company or any Subsidiary of Company or that such Optionee
      has
      been accused of or convicted of an act of willful and material embezzlement
      or
      fraud against the Company or of a felony under any state or federal statute;
      provided,
      however,
      that it
      is specifically understood that “Cause” shall not include any act of commission
      or omission in the good-faith exercise of such Optionee’s business judgment as a
      director, officer or employee of the Company, as the case may be, or upon the
      advice of counsel to the Company. Notwithstanding the foregoing, if Cause is
      defined in an employment agreement between the Company and the relevant
      Optionee, then, with respect to such Optionee, Cause shall have the meaning
      ascribed to it in such employment agreement.

     

    
      
         

      

      
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    (ii) In
      the
      event that an Optionee is removed as a director, officer or employee by the
      Company at any time other than for “Cause” or resigns as a director, officer or
      employee for “Good Reason” the Option granted to such Optionee may be exercised
      by the Optionee, to the extent the Option was exercisable on the date such
      Optionee ceases to be a director, officer or employee. Such Option may be
      exercised at any time within one (1) year after the date the Optionee ceases
      to
      be a director, officer or employee (or, if later, such time as the Option may
      be
      exercised pursuant to Section 14(d) hereof), or the date on which the Option
      otherwise expires by its terms; which ever period is shorter, at which time
      the
      Option shall terminate; provided,
      however,
      if the
      Optionee dies before the Options terminate and are no longer exercisable, the
      terms and provisions of Section 5(f) shall control. For purposes of this Section
      5(i), and unless otherwise defined in an employment agreement between the
      Company and the relevant Optionee, Good Reason shall exist upon the occurrence
      of the following:

     

    
      	 	
              (A)

            	
              the
                assignment to Optionee of any duties inconsistent with the position
                in the
                Company that Optionee held immediately prior to the
                assignment;

            


    

     

    
      	 	
              (B)

            	
              a
                Change of Control resulting in a significant adverse alteration in
                the
                status or conditions of Optionee’s participation with the Company or other
                nature of Optionee’s responsibilities from those in effect prior to such
                Change of Control, including any significant alteration in Optionee’s
                responsibilities immediately prior to such Change in Control;
                and

            


    

     

    
      	 	
              (C)

            	
              the
                failure by the Company to continue to provide Optionee with benefits
                substantially similar to those enjoyed by Optionee prior to such
                failure.

            


    

     

    Notwithstanding
      the foregoing, if Good Reason is defined in an employment agreement between
      the
      Company and the relevant Optionee, then, with respect to such Optionee, Good
      Reason shall have the meaning ascribed to it in such employment
      agreement.

     

    (j) Limit
      on Value of Incentive Option.
      The
      aggregate Fair Market Value, determined as of the date the Incentive Option
      is
      granted, of Stock for which Incentive Options are exercisable for the first
      time
      by any Optionee during any calendar year under the Plan (and/or any other stock
      option plans of the Company or any Subsidiary) shall not exceed
      $100,000.

     

    
      	
            	6.	
              Term
                of Plan.

            


    

     

    No
      Option
      shall be granted pursuant to the Plan on or after the date which is ten years
      from the effective date of the Plan, but Options theretofore granted may extend
      beyond that date.

     

    
      	
            	7.	
              Capital
                Change of the Company.

            


    

     

    In
      the
      event of any merger, reorganization, consolidation, recapitalization, stock
      dividend, or other change in corporate structure affecting the Stock, the
      Committee shall make an appropriate and equitable adjustment in the number
      and
      kind of shares reserved for issuance under the Plan and in the number and option
      price of shares subject to outstanding Options granted under the Plan, to the
      end that after such event each Optionee’s proportionate interest shall be
      maintained (to the extent possible) as immediately before the occurrence of
      such
      event. The Committee shall, to the extent feasible, make such other adjustments
      as may be required under the tax laws so that any Incentive Options previously
      granted shall not be deemed modified within the meaning of Section 424(h) of
      the
      Code. 

     

    
      
         

      

      
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    The
      adjustments described above will be made only to the extent consistent with
      continued qualification of the Option under Section 422 of the Code (in the
      case
      of an Incentive Option) and Section 409A of the Code.

     

    
      	
            	8.	
              Purchase
                for Investment/Conditions.

            


    

     

    Unless
      the Options and shares covered by the Plan have been registered under the
      Securities Act of 1933, as amended (the “Securities
      Act”),
      or
      the Company has determined that such registration is unnecessary, each person
      exercising or receiving Options under the Plan may be required by the Company
      to
      give a representation in writing that he is acquiring the securities for his
      own
      account for investment and not with a view to, or for sale in connection with,
      the distribution of any part thereof. The Committee may impose any additional
      or
      further restrictions on awards of Options as shall be determined by the
      Committee at the time of award.

     

    
      	
            	9.	
              Taxes.

            


    

     

    (a) The
      Company may make such provisions as it may deem appropriate, consistent with
      applicable law, in connection with any Options granted under the Plan with
      respect to the withholding of any taxes (including income or employment taxes)
      or any other tax matters.

     

    (b) If
      any
      Grantee shall make any disposition of shares of Stock issued pursuant to the
      exercise of an Incentive Option under the circumstances described in Section
      421(b) of the Code (relating to certain disqualifying dispositions), such
      Grantee shall notify the Company of such disposition within ten (10) days
      hereof.

     

    
      	
            	10.	
              Effective
                Date of Plan.

            


    

     

    The
      Plan
      shall be effective on January __, 2008; provided, however, that if, and only
      if,
      certain options are intended to qualify as Incentive Stock Options, the Plan
      must subsequently be approved by majority vote of the Company’s stockholders no
      later than January __, 2009, and further, that in the event certain Option
      grants hereunder are intended to qualify as performance-based compensation
      within the meaning of Section 162(m) of the Code, the requirements as to
      stockholder approval set forth in Section 162(m) of the Code are
      satisfied.

     

    
      	
            	11.	
              Amendment
                and Termination.

            


    

     

    The
      Board
      may amend, suspend, or terminate the Plan, except that no amendment shall be
      made that would impair the rights of any Participant under any Option
      theretofore granted without the Participant’s consent, and except that no
      amendment shall be made which, without the approval of the stockholders of
      the
      Company would:

     

    (a) materially
      increase the number of shares that may be issued under the Plan, except as
      is
      provided in Section 8;

     

    (b) materially
      increase the benefits accruing to the Participants under the Plan;

     

    (c) materially
      modify the requirements as to eligibility for participation in the
      Plan;

     

    (d) decrease
      the exercise price of an Incentive Option to less than 100% of the Fair Market
      Value per share of Stock on the date of grant thereof or the exercise price
      of a
      Nonqualified Option to less than 100% of the Fair Market Value per share of
      Stock on the date of grant thereof; or

     

    (e) extend
      the term of any Option beyond that provided for in Section 5(b).

     

    
      
         

      

      
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    (f) except
      as
      otherwise provided in Sections 5(d) and 8 hereof, reduce the exercise price
      of
      outstanding Options or effect repricing through cancellations and re-grants
      of
      new Options.

     

    Subject
      to the forgoing, the Committee may amend the terms of any Option theretofore
      granted, prospectively or retrospectively, but no such amendment shall impair
      the rights of any Optionee without the Optionee’s consent.

     

    It
      is the
      intention of the Board that the Plan comply strictly with the provisions of
      Section 409A of the Code and Treasury Regulations and other Internal Revenue
      Service guidance promulgated thereunder (the “Section
      409A Rules”)
      and
      the Committee shall exercise its discretion in granting awards hereunder (and
      the terms of such awards), accordingly. The Plan and any grant of an award
      hereunder may be amended from time to time (without, in the case of an award,
      the consent of the Participant) as may be necessary or appropriate to comply
      with the Section 409A Rules.

     

    
      	
            	12.	
              Government
                Regulations.

            


    

     

    The
      Plan,
      and the grant and exercise of Options hereunder, and the obligation of the
      Company to sell and deliver shares under such Options shall be subject to all
      applicable laws, rules and regulations, and to such approvals by any
      governmental agencies, national securities exchanges and interdealer quotation
      systems as may be required.

     

    
      	
            	13.	
              General
                Provisions.

            


    

     

    (a) Certificates.
      All
      certificates for shares of Stock delivered under the Plan shall be subject
      to
      such stop transfer orders and other restrictions as the Committee may deem
      advisable under the rules, regulations and other requirements of the Securities
      and Exchange Commission, or other securities commission having jurisdiction,
      any
      applicable Federal or state securities law, any stock exchange or interdealer
      quotation system upon which the Stock is then listed or traded and the Committee
      may cause a legend or legends to be placed on any such certificates to make
      appropriate reference to such restrictions.

     

    (b) Employment
      Matters.
      Neither
      the adoption of the Plan nor any grant or award under the Plan shall confer
      upon
      any Participant who is an employee of the Company or any Subsidiary any right
      to
      continued employment or, in the case of a Participant who is a director,
      continued service as a director, with the Company or a Subsidiary, as the case
      may be, nor shall it interfere in any way with the right of the Company or
      any
      Subsidiary to terminate the employment of any of its employees, the service
      of
      any of its directors or the retention of any of its consultants or advisors
      at
      any time.

     

    (c) Limitation
      of Liability.
      No
      member of the Committee, or any officer or employee of the Company acting on
      behalf of the Committee, shall be personally liable for any action,
      determination or interpretation taken or made in good faith with respect to
      the
      Plan, and all members of the Committee and each and any officer or employee
      of
      the Company acting on their behalf shall, to the extent permitted by law, be
      fully indemnified and protected by the Company in respect of any such action,
      determination or interpretation.

     

    (d) Registration
      of Stock.
      Notwithstanding any other provision in the Plan, no Option may be exercised
      unless and until the Stock to be issued upon the exercise thereof has been
      registered under the Securities Act and applicable state securities laws, or
      are, in the opinion of counsel to the Company, exempt from such registration
      in
      the United States. The Company shall not be under any obligation to register
      under applicable federal or state securities laws any Stock to be issued upon
      the exercise of an Option granted hereunder in order to permit the exercise
      of
      an Option and the issuance and sale of the Stock subject to such Option,
      although the Company may in its sole discretion register such Stock at such
      time
      as the Company shall determine. If the Company chooses to comply with such
      an
      exemption from registration, the Stock issued under the Plan may, at the
      direction of the Committee, bear an appropriate restrictive legend restricting
      the transfer or pledge of the Stock represented thereby, and the Committee
      may
      also give appropriate stop transfer instructions with respect to such Stock
      to
      the Company’s transfer agent.

     

    
      
         

      

      
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          8
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            	14.	
              Non-Uniform
                Determinations.

            


    

     

    The
      Committee’s determinations under the Plan, including, without limitation, (i)
      the determination of the Participants to receive awards, (ii) the form, amount
      and timing of such awards, (iii) the terms and provisions of such awards and
      (ii) the agreements evidencing the same, need not be uniform and may be made
      by
      it selectively among Participants who receive, or who are eligible to receive,
      awards under the Plawelln, whether or not such Participants are similarly
      situated.

     

    
      	
            	15.	
              Governing
                Law.

            


    

     

    The
      validity, construction, and effect of the Plan and any rules and regulations
      relating to the Plan shall be determined in accordance with the internal laws
      of
      the State of Delaware, without giving effect to principles of conflicts of
      laws,
      and applicable federal law.

     

     

    
      
         

      

      
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