EXHIBIT 4.1

                                   LION, INC.
                            2005 STOCK INCENTIVE PLAN

                                   SECTION 1.
                                     PURPOSE

         The purpose of this Plan is to continue to promote the growth and
prosperity of the Company and its Subsidiaries by providing Eligible Recipients
with an additional incentive to contribute to the Company's success, by
assisting the Company in attracting and retaining the best available personnel
for positions of substantial responsibility and by increasing the identity of
interests of Eligible Recipients with those of the Company's stockholders. The
Plan provides for the grant of Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, Restricted Stock Units and Stock Appreciation
Rights to aid the Company in obtaining these goals. This Plan is intended to
supplement the 1998 Stock Option Plan ("1998 Plan") maintained by the Company
pursuant to which equity awards may be granted to Eligible Recipients.

                                   SECTION 2.
                                   DEFINITIONS

As used in this Plan and any Stock Incentive Agreement, the following terms
shall have the following meanings:

2.1      BOARD means the Board of Directors of the Company.

2.2      CAUSE shall mean, with respect to any Participant who is a member of
the Board who is not an employee of the Company, a termination of employment or
service on the Board (by removal or failure of the Board to nominate the
Participant) whenever occasioned by (a) the willful and continued failure by the
Participant to substantially perform the Participant's duties with the Company
or a Subsidiary (other than any such failure resulting from the Participant's
incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to the Participant by the Board, which
demand specifically identifies the manner in which the Board believes the
Participant has not substantially performed the Participant's duties, or (b) the
willful engaging by the Participant in conduct which is demonstrably and
materially injurious to the Company or its Subsidiaries, monetarily or
otherwise. For purposes of this definition, no act, or failure to act, on the
Participant's part shall be deemed "willful" unless done, or omitted to be done,
by the Participant not in good faith and without reasonable belief that the
Participant's act, or failure to act, was in the best interest of the Company.

2.3      CHANGE OF CONTROL means any of the following:

         (a) any "person" as such term is used in Sections 13(d) and 14(d) of
         the Exchange Act, becomes the "beneficial owner" (as defined in Rule
         13d-3 under the Exchange Act), directly or indirectly, of securities of
         the Company representing 50% or more of the combined voting power of
         the Company's then outstanding securities; or

         (b) during any period of two (2) consecutive years (not including any
         period prior to the effective date of this Plan); individuals who at
         the beginning of such period constitute the Board, and any new member
         of the Board (other than a member of the Board designated

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         by a person who has entered into an agreement with the Company to
         effect a transaction described in subsections (a), (b) or (c) of this
         Section) whose election by the Company's shareholders was approved by a
         vote of at least two-thirds (2/3) of the members of the Board at the
         beginning of the period or whose election or nomination for election
         was previously so approved, cease for any reason to constitute at least
         a majority thereof; or

         (c) the shareholders of the Company approve a merger or consolidation
         of the Company with any other Company, other than (1) a merger or
         consolidation which would result in the voting securities of the
         Company outstanding immediately prior thereto continuing to represent
         (either by remaining outstanding or by being converted into voting
         securities of the surviving entity) more than 50% of the combined
         voting power of the voting securities of the Company or such surviving
         entity outstanding immediately after such merger or consolidation or
         (2) a merger or consolidation effected to implement a recapitalization
         of the Company (or similar transaction) in which no "person" (as herein
         defined) acquires more than 50% of the combined voting power of the
         Company's then outstanding securities; or

         (d) the shareholders of the Company approve a plan of liquidation,
         dissolution or winding up of the Company or an agreement for the sale
         or disposition by the Company of all or substantially all of the
         Company's assets.

2.4      CODE means the Internal Revenue Code of 1986, as amended.

2.5      COMMITTEE means the Compensation Committee of the Board or any other
committee appointed by the Board to administer the Plan, as specified in Section
5 hereof. Any such committee must be comprised entirely of Outside Directors who
are "non-employee directors" within the meaning of Rule 16b-3 under the Exchange
Act, and if the Company is a Listed Issuer, Outside Directors who are
"independent" as that term is defined by the applicable national securities
exchange or automated inter-dealer quotation system. If no Committee has been
established by the Board, then "Committee" refers to the Board as a whole.

2.6      COMMON STOCK means the common shares of the Company.

2.7      COMPANY means LION, Inc., a Washington corporation, and any successor
to such organization.

2.8      DISABILITY shall mean disability as determined by the Committee in its
sole and absolute discretion.

2.9      ELIGIBLE RECIPIENT means an Employee and/or a Key Person.

2.10     EMPLOYEE means any employee of the Company or any Subsidiary,
regardless of title or designation, as shall, in the determination of the
Committee, be eligible to receive Stock Incentives for the duties presently
being discharged by employee.

2.11     EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.

2.12     EXERCISE PRICE means the price that shall be paid to purchase one (1)
Share upon the exercise of an Option granted under this Plan.

2.13     FAIR MARKET VALUE of a Share on any date means the mean between the
highest and lowest reported selling prices on a national securities exchange of
a Share as reported in the

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appropriate composite listing for said exchange on such date, or, if no such
sales occurred on such date, then on the next preceding date on which a sale is
made. In the event the Shares are traded in the over-the-counter market, Fair
Market Value of a Share means the mean between the "high" and "low" quotations
in the over-the-counter market on such date, as reported by the National
Association of Securities Dealers through NASDAQ or, if no quotations are
available on such date, then on the next preceding date on which such quotations
are available. If the principal market for the Share is the NASD Electronic
Bulletin Board or other over-the-counter market other than Nasdaq NMS or Nasdaq
SmallCap of the Nasdaq Stock Market, its Fair Market Value shall be the mean
between the closing bid and asked quotations for the Share for the 20 trading
days last preceding the measurement date.

2.14     INSIDER means an individual who is, on the relevant date, an officer,
member of the Board or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.

2.15     INDEPENDENT DIRECTOR means a director who is determined to be
"independent" as that term is defined by the listing standards of the national
securities exchange or automated inter-dealer quotation system applicable to the
Company, as the same may be amended from time to time.

2.16     ISO means an option granted under this Plan to purchase Shares that is
intended by the Company to satisfy the requirements of Code Section 422 as an
incentive stock option.

2.17     KEY PERSON means (1) a member of the Board who is not an Employee or
(2) a consultant or advisor who is eligible to receive shares which are
registered on SEC Form S-8.

2.18     LISTED ISSUER means the Company's securities are listed on a national
securities exchange or listed in an automated inter-dealer quotation system of a
national securities association, not including the OTC Bulletin Board.

2.19     NQSO means an option granted under this Plan to purchase Shares which
is not intended by the Company to satisfy the requirements of Code Section 422.

2.20     OPTION means an ISO or a NQSO.

2.21     OUTSIDE DIRECTOR means a member of the Board who is not an Employee and
who qualifies as (1) a "non-employee director" under Rule 16b-3(b)(3) under the
1934 Act, as amended from time to time, and (2) if the Committee grants Stock
Incentives which qualify for the Performance-Based Exception, an "outside
director" under Code Section 162(m) and the regulations promulgated thereunder.

2.22     PARTICIPANT means an individual who receives a Stock Incentive
hereunder.

2.23     PERFORMANCE-BASED EXCEPTION means the performance-based exception from
the tax deductibility limitations of Code Section162(m).

2.24     PERFORMANCE PERIOD shall mean the period during which a performance
goal must be attained with respect to a Stock Incentive which is performance
based, as determined by the Committee pursuant to Section 14.3 hereof.

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2.25     PLAN means this plan, the 2005 Stock Incentive Plan, as it may be
further amended from time to time.

2.26     QUALIFYING EVENT shall mean, with respect to a Participant, such
Participant's death, Disability or Retirement.

2.27     RESTRICTED STOCK AWARD means an award of Shares granted to a
Participant under this Plan which is subject to restrictions in accordance with
the terms and provisions of this Plan and the applicable Stock Incentive
Agreement.

2.28     RESTRICTED STOCK UNIT means a contractual right granted to a
Participant under this Plan to receive a Share (or cash equivalent) which is
subject to restrictions of this Plan and the applicable Stock Incentive
Agreement.

2.29     RETIREMENT shall mean, with respect to an Eligible Recipient, such
Eligible Recipient's (i) termination of employment or cessation of performing
services after attainment of age 55 and completion of at least fifteen (15)
years of service with the Company or Subsidiary, or (ii) termination of
employment or cessation of performing services after attainment of age 65 and
completion of at least five (5) years of service with the Company or Subsidiary.

2.30     SHARE means a share of Common Stock.

2.31     STOCK APPRECIATION RIGHT means a right granted to a Participant
pursuant to the terms and provisions of this Plan whereby the individual,
without payment to the Company (except for any applicable withholding or other
taxes), receives Shares, or such other consideration as the Committee may
determine, in an amount equal to the excess of the Fair Market Value per Share
on the date on which the Stock Appreciation Right is exercised over the exercise
price per Share noted in the Stock Appreciation Right, for each Share subject to
the Stock Appreciation Right.

2.32     STOCK INCENTIVE means an ISO, a NQSO, a Restricted Stock Award, a
Restricted Stock Unit or a Stock Appreciation Right.

2.33     STOCK INCENTIVE AGREEMENT means a document issued by the Company or a
Subsidiary to a Participant evidencing an award of a Stock Incentive.

2.34     SUBSIDIARY means any corporation in which more than fifty percent (50%)
of the voting stock is owned or controlled, directly or indirectly, by the
Company.

2.35     TEN PERCENT SHAREHOLDER means a person who owns (after taking into
account the attribution rules of Code Section 424(d)) more than ten percent
(10%) of the total combined voting power of all classes of shares of stock of
either the Company or a Subsidiary.

                                   SECTION 3.
                       SHARES SUBJECT TO STOCK INCENTIVES

         The total number of Shares that may be issued pursuant to Stock
Incentives under this Plan shall not exceed Five Million (5,000,000), of which
not more than Two Million, Five Hundred Thousand (2,500,000) may be used for
Restricted Stock Awards and Restricted Stock Units, each as adjusted pursuant to
Section 10. Such Shares shall be reserved, to the extent that the Company deems
appropriate, from authorized but unissued Shares, and from Shares which

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have been reacquired by the Company. To the extent permitted by applicable law
or regulation, if a Stock Incentive is canceled, forfeited, exchanged or
otherwise expires the Shares with respect to such Stock Incentive may become
available for reissuance under this Plan. Notwithstanding the preceding
sentence, no Participant may be granted any Stock Incentive covering an
aggregate number of Shares in excess of Two Hundred Thousand (200,000) in any
calendar year as adjusted pursuant to Section 10.

                                   SECTION 4.
                                 EFFECTIVE DATE

         The effective date of this Plan is June 23, 2005, which is the date on
which the shareholders of the Company originally approved the Plan.

                                   SECTION 5.
                                 ADMINISTRATION

         5.1      GENERAL ADMINISTRATION. This Plan shall be administered by the
Committee. The Committee, acting in its absolute discretion, shall exercise such
powers and take such action as expressly called for under this Plan. The
Committee shall have the power to interpret this Plan and, subject to the terms
and provisions of this Plan, to take such other action in the administration and
operation of the Plan as it deems equitable under the circumstances. The
Committee's actions shall be binding on the Company, on each affected Eligible
Recipient, and on each other person directly or indirectly affected by such
actions.

         5.2      AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Articles of Incorporation or Code of Regulations of the Company, and subject to
the provisions herein, the Committee shall have full power to select Eligible
Recipients who shall participate in the Plan, to determine the sizes and types
of Stock Incentives in a manner consistent with the Plan, to determine the terms
and conditions of Stock Incentives in a manner consistent with the Plan, to
construe and interpret the Plan and any agreement or instrument entered into
under the Plan, to establish, amend or waive rules and regulations for the
Plan's administration, and to amend the terms and conditions of any outstanding
Stock Incentives as allowed under the Plan and such Stock Incentives. Further,
the Committee may make all other determinations which may be necessary or
advisable for the administration of the Plan. The Committee may seek the
assistance of such persons as it may see fit in carrying out its routine
administrative functions concerning the Plan.

         5.3      DELEGATION OF AUTHORITY. The members of the Committee and any
other persons to whom authority has been delegated shall be appointed from time
to time by, and shall serve at the discretion of, the Board. The Committee may
appoint one or more separate committees (any such committee, a "Subcommittee")
composed of two or more Outside Directors of the Company (who may but need not
be members of the Committee) and may delegate to any such Subcommittee the
authority to grant Stock Incentives, and/or to administer the Plan or any aspect
of it. Notwithstanding any provision of this Plan to the contrary, the Board may
assume the powers and responsibilities granted to the Committee or other
delegate at any time, in whole or in part. Moreover, only the Committee may
grant Stock Incentives that may meet the Performance-Based Exception, and only
the Committee may grant Stock Incentives to Insiders that may be exempt from
Section 16(b) of the Exchange Act.

         5.4      DECISIONS BINDING. All determinations and decisions made by
the Committee pursuant to the provisions of this Plan and all related orders and
resolutions of the Committee

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shall be final, conclusive and binding on all persons, including the Company,
its shareholders, members of the Board, Eligible Recipients, Participants, and
their estates and beneficiaries.

                                   SECTION 6.
                                   ELIGIBILITY

         Eligible Recipients selected by the Committee shall be eligible for the
grant of Stock Incentives under this Plan, but no Eligible Recipient shall have
the right to be granted a Stock Incentive under this Plan merely as a result of
his or her status as an Eligible Recipient. Only Key Employees shall be eligible
to receive a grant of ISOs.

                                    SECTION 7
                            TERMS OF STOCK INCENTIVES

7.1      TERMS AND CONDITIONS OF ALL STOCK INCENTIVES

    (a)  GRANTS OF STOCK INCENTIVES. Subject to subsection (e) below, the
         Committee, in its absolute discretion, shall grant Stock Incentives
         under this Plan from time to time and shall have the right to grant new
         Stock Incentives in exchange for outstanding Stock Incentives;
         provided, however, the Committee shall not have the right to (1) lower
         the Exercise Price of an existing Option, (2) any action which would be
         treated as a "repricing" under generally accepted accounting
         principles, or (3) canceling of an existing Option at a time when its
         Exercise Price exceeds the fair market value of the underlying stock
         subject to such Option in exchange for another Option, a Restricted
         Stock Award, or other equity in the Company (except as provided in
         Sections 10 and 11). Stock Incentives shall be granted to Eligible
         Recipients selected by the Committee, and the Committee shall be under
         no obligation whatsoever to grant any Stock Incentives, or to grant
         Stock Incentives to all Eligible Recipients, or to grant all Stock
         Incentives subject to the same terms and conditions.

    (b)  SHARES SUBJECT TO STOCK INCENTIVES. The number of Shares as to which a
         Stock Incentive shall be granted shall be determined by the Committee
         in its sole discretion, subject to the provisions of Section 3 as to
         the total number of Shares available for grants under the Plan, and to
         any other restrictions contained in this Plan.

    (c)  STOCK INCENTIVE AGREEMENTS. Each Stock Incentive shall be evidenced by
         a Stock Incentive Agreement executed by the Company or a Subsidiary,
         and may also be executed by the Participant or accepted by the
         Participant by electronic transmission, which shall be in such form and
         contain such terms and conditions as the Committee in its discretion
         may, subject to the provisions of the Plan, from time to time
         determine.

    (d)  DATE OF GRANT. The date a Stock Incentive is granted shall be the date
         on which the Committee (1) has approved the terms and conditions of the
         Stock Incentive Agreement, (2) has determined the recipient of the
         Stock Incentive and the number of Shares covered by the Stock Incentive
         and (3) has taken all such other action necessary to direct the grant
         of the Stock Incentive.

    (e)  DIVIDEND EQUIVALENTS. The Committee may grant dividend equivalents to
         any Participant. The Committee shall establish the terms and conditions
         to which the dividend equivalents are subject. Dividend equivalents may
         be granted only in connection with a Stock Incentive. Under a dividend
         equivalent, a Participant shall be entitled to receive

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         currently or in the future payments equivalent to the amount of
         dividends paid by the Company to holders of Common Stock with respect
         to the number of dividend equivalents held by the Participant. The
         dividend equivalent may provide for payment in Common Stock or in cash,
         or a fixed combination of Common Stock or cash, or the Committee may
         reserve the right to determine the manner of payment at the time the
         dividend equivalent is payable.

    (f)  DEFERRAL ELECTIONS. The Committee may permit or require Participants to
         elect to defer the issuance of Common Stock or the settlement of awards
         in cash under this Plan pursuant to such rules, procedures, or programs
         as it may establish from time to time. However, notwithstanding the
         preceding sentence, the Committee shall not, in establishing the terms
         and provisions of any Stock Incentive, or in exercising its powers
         under this Article, create any arrangement which would constitute an
         employee pension benefit plan as defined in ERISA Section 3(3) unless
         the arrangement provides benefits solely to one or more individuals who
         constitute members of a select group of management or highly
         compensated employees.

    (g)  CASH BONUS. The Committee may, in its absolute discretion, in
         connection with any grant of a Stock Incentive or at any time
         thereafter, grant a cash bonus, payable promptly after the date on
         which the Participant is required to recognize income for federal
         income tax purposes in connection with such grant of Stock Incentive,
         in such amounts as the Committee shall determine from time to time;
         provided, however, that in no event shall the amount of a Cash Bonus
         exceed the Fair Market Value of the related shares of Stock Incentive
         on such date. A cash bonus shall be subject to such conditions as the
         Committee shall determine at the time of the grant of such cash bonus.

7.2      TERMS AND CONDITIONS OF OPTIONS.

    (a)  GRANTS OF OPTIONS. Each grant of an Option shall be evidenced by a
         Stock Incentive Agreement that shall specify whether the Option is an
         ISO or NQSO, and incorporate such other terms as the Committee deems
         consistent with the terms of this Plan and, in the case of an ISO,
         necessary or desirable to permit such Option to qualify as an ISO. The
         Committee and/or the Company may modify the terms and provisions of an
         Option in accordance with Section 12 of this Plan even though such
         modification may change the Option from an ISO to a NQSO.

    (b)  DETERMINING OPTIONEES. In determining Eligible Recipient(s) to whom an
         Option shall be granted and the number of Shares to be covered by such
         Option, the Committee may take into account the duties of the Eligible
         Recipient, the contributions of the Eligible Recipient to the success
         of the Company, and other factors deemed relevant by the Committee, in
         connection with accomplishing the purpose of this Plan. An Eligible
         Recipient who has been granted an Option to purchase Shares, whether
         under this Plan or otherwise, may be granted one or more additional
         Options. If the Committee grants an ISO and a NQSO to an Eligible
         Recipient on the same date, the right of the Eligible Recipient to
         exercise one such Option shall not be conditioned on the Eligible
         Recipient's failure to exercise the other such Option.

    (c)  EXERCISE PRICE. Subject to adjustment in accordance with Section 10 and
         the other provisions of this Section, the Exercise Price shall be
         specified in the applicable Stock Incentive Agreement. With respect to
         each grant of an ISO to a Participant who is not a

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         Ten Percent Shareholder, the Exercise Price shall not be less than the
         Fair Market Value of a Share on the date the ISO is granted. With
         respect to each grant of an ISO to a Participant who is a Ten Percent
         Shareholder, the Exercise Price shall not be less than one hundred ten
         percent (110%) of the Fair Market Value of a Share on the date the ISO
         is granted. If a Stock Incentive is a NQSO, the Exercise Price for each
         Share shall not be less than the Fair Market Value of a Share on the
         date the NQSO is granted. Any Stock Incentive intended to meet the
         Performance-Based Exception must be granted with an Exercise Price not
         less than the Fair Market Value of a Share determined as of the date of
         such grant.

    (d)  OPTION TERM. Each Option granted under this Plan shall be exercisable
         in whole or in part at such time or times as set forth in the related
         Stock Incentive Agreement, but no Stock Incentive Agreement shall:

         (i)  make an Option exercisable prior to the date such Option is
              granted or after it has been exercised in full; or

         (ii) make an Option exercisable after the date that is (A) the seventh
              (7th) anniversary of the date such Option is granted, if such
              Option is a NQSO or an ISO granted to a non-Ten Percent
              Shareholder, or (B) the date that is the fifth (5th) anniversary
              of the date such Option is granted, if such Option is an ISO
              granted to a Ten Percent Shareholder. Options issued under the
              Plan may become exercisable based on the service of a Participant,
              or based upon the attainment (as determined by the Committee) of
              performance goals established pursuant to one or more of the
              performance criteria listed in Section 14. Any Option which
              becomes exercisable based on the attainment of performance goals
              must have its performance goals determined by the Committee based
              upon one or more of the performance criteria listed in Section 14,
              and must have the attainment of such performance goals certified
              in writing by the Committee in order to meet the Performance-Based
              Exception. A Stock Incentive Agreement may provide for the
              exercise of an Option after the employment of an Employee has
              terminated for any reason whatsoever, including the occurrence of
              a Qualifying Event. The Employee's rights, if any, upon
              termination of employment will be set forth in the applicable
              Stock Incentive Agreement.

    (e)  PAYMENT. Options shall be exercised by the delivery of a written notice
         of exercise to the Company, specifying the number of Shares with
         respect to which the Option is to be exercised accompanied by full
         payment for the Shares. Payment for shares of Stock shall be made in
         cash or, unless the Stock Incentive Agreement provides otherwise, by
         delivery to the Company of a number of Shares that have been owned and
         completely paid for by the holder for at least six (6) months prior to
         the date of exercise (i.e., "mature shares" for accounting purposes)
         having an aggregate Fair Market Value equal to the amount to be
         tendered, or a combination thereof. In addition, unless the Stock
         Incentive Agreement provides otherwise, the Option may be exercised
         through a brokerage transaction as permitted under the provisions of
         Regulation T applicable to cashless exercises promulgated by the
         Federal Reserve Board so long as the Company's equity securities are
         registered under Section 12 of the Exchange Act, unless prohibited by
         Section 402 of the Sarbanes-Oxley Act of 2002. Notwithstanding the
         foregoing, with respect to any Option recipient who is an Insider, a
         tender of shares or, if permitted by applicable law, a cashless
         exercise must (1) have met the requirements of an exemption under Rule
         16b-3 promulgated under the Exchange Act, or (2) be a subsequent
         transaction the terms of which were provided for in a transaction
         initially meeting the

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         requirements of an exemption under Rule 16b-3 promulgated under the
         Exchange Act. Unless the Stock Incentive Agreement provides otherwise,
         the foregoing exercise payment methods shall be subsequent transactions
         approved by the original grant of an Option. Except as provided in
         subparagraph (f) below, payment shall be made at the time that the
         Option or any part thereof is exercised, and no Shares shall be issued
         or delivered upon exercise of an Option until full payment has been
         made by the Participant. The holder of an Option, as such, shall have
         none of the rights of a shareholder.

    (f)  CONDITIONS TO EXERCISE OF AN OPTION. Each Option granted under the Plan
         shall vest and shall be exercisable at such time or times, or upon the
         occurrence of such event or events, and in such amounts, as the
         Committee shall specify in the Stock Incentive Agreement; provided,
         however, that subsequent to the grant of an Option, the Committee, at
         any time before complete termination of such Option, may accelerate the
         time or times at which such Option may vest or be exercised in whole or
         in part. In the absence of any designation in the Stock Incentive
         Agreement as to vesting at the time of grant the entire Option shall
         vest according to the following schedule:

                     NUMBER OF YEARS         PERCENTAGE OF TOTAL OPTION
                 FOLLOWING DATE OF GRANT         TO BE EXERCISABLE
                            1                           25%
                            2                           50%
                            3                           75%
                            4                           100%

         The Committee may impose such restrictions on any Shares acquired
         pursuant to the exercise of an Option as it may deem advisable. Unless
         otherwise provided in the applicable Stock Incentive Agreement, any
         vested option must be exercised within thirty (30) days of the
         Qualifying Event or other termination of employment of the Participant.

    (g)  TRANSFERABILITY OF OPTIONS. Except as otherwise provided below for
         NQSOs or in a Participant's Stock Incentive Agreement, no Option
         granted under the Plan may be sold, transferred, pledged, assigned or
         otherwise alienated or hypothecated, except upon the death of the
         holder Participant by will or by the laws of descent and distribution.
         Except as otherwise provided below for NQSOs or in a Participant's
         Stock Incentive Agreement, during the Participant's lifetime, only the
         Participant may exercise his Option unless the Participant is
         incapacitated in which case the Option may be exercised by the
         Participant's legal guardian, legal representative, or other
         representative whom the Committee deems appropriate based on applicable
         facts and circumstances. The determination of incapacity of a
         Participant and the identity of appropriate representative of the
         Participant to exercise the Option if the Participant is incapacitated
         shall be determined by the Committee.

         With respect to NQSOs, the Committee, at its discretion, may provide
         for transfer of an Option (other than an ISO), without payment of
         consideration, to the following family members of the Participant,
         including adoptive relationships: a child, stepchild, grandchild,
         parent, stepparent, grandparent, spouse, sibling, mother-in-law,
         father-in-law, son-in-law, daughter-in-law, brother-in-law,
         sister-in-law, niece, nephew, former spouse (whether by gift or
         pursuant to a domestic relations order), any person sharing the
         employee's household (other than a tenant or employee), a
         family-controlled partnership, corporation, limited liability company
         and trust, or a foundation in which family members heretofore described
         control the management of assets. Other transfers of

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         NQSOs may be permitted by the Committee, in its sole discretion. The
         assigned portion may only be exercised by the person or persons who
         acquire a proprietary interest in the Option pursuant to the
         assignment. The terms applicable to the assigned portion shall be the
         same as those in effect for the Option immediately prior to such
         assignment and shall be set forth in such documents issued to the
         assignee as the Committee may deem appropriate. A request to assign an
         Option may be made only by delivery to Company of a written stock
         option assignment request in a form approved by the Committee, stating
         the number of Options and Shares underlying Options requested for
         assignment, that no consideration is being paid for the assignment,
         identifying the proposed transferee, and containing such other
         representations and agreements regarding the Participant's investment
         intent and access to information and other matters, if any, as may be
         required or desirable by Company to comply with applicable securities
         laws.

    (h)  ISO TAX TREATMENT REQUIREMENTS. With respect to any Option that
         purports to be an ISO, to the extent that the aggregate Fair Market
         Value (determined as of the date of grant of such Option) of stock with
         respect to which such Option is exercisable for the first time by any
         individual during any calendar year exceeds one hundred thousand
         dollars ($100,000.00), to the extent of such excess, such Option shall
         not be treated as an ISO in accordance with Code Section 422(d). The
         rule of the preceding sentence is applied as set forth in Treas. Reg.
         Section 1.422-4 and any additional guidance issued by the Treasury
         thereunder. Also, with respect to any Option that purports to be an
         ISO, such Option shall not be treated as an ISO if the Participant
         disposes of shares acquired thereunder within two (2) years from the
         date of the granting of the Option or within one (1) year of the
         exercise of the Option, or if the Participant has not met the
         requirements of Code Section 422(a)(2).

7.3      TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

    (a)  GRANTS OF RESTRICTED STOCK AWARDS. Shares awarded pursuant to
         Restricted Stock Awards shall be subject to such restrictions as
         determined by the Committee for periods determined by the Committee.
         Restricted Stock Awards issued under the Plan may have restrictions
         which lapse based upon the service of a Participant, or based upon
         other criteria that the Committee may determine appropriate. The
         Committee may require a cash payment from the Participant in exchange
         for the grant of a Restricted Stock Award or may grant a Restricted
         Stock Award without the requirement of a cash payment. The Committee
         may grant Restricted Stock Awards that vest on the attainment of
         performance goals determined by the Committee based upon one or more of
         the performance criteria listed in Section 14, and must have the
         attainment of such performance goals certified in writing by the
         Committee in order to meet the Performance-Based Exception.

    (b)  VESTING OF RESTRICTED STOCK AWARDS. The Committee shall establish the
         vesting schedule applicable to Restricted Stock Awards and shall
         specify the times, vesting and performance goal requirements. Until the
         end of the period(s) of time specified in the vesting schedule and/or
         the satisfaction of any performance criteria, the Shares subject to
         such Stock Incentive Award shall remain subject to forfeiture.

    (c)  TERMINATION OF EMPLOYMENT. If the Participant's employment (or in the
         case of a non-employee, such Participant's service) with the Company
         and/or a Subsidiary ends before the Restricted Stock Awards vest, the
         Participant shall forfeit all unvested Restricted Stock Awards, unless
         the termination is a result of the occurrence of a Qualifying Event

                                       10
<PAGE>


         or the Committee determines that the Participant's unvested Restricted
         Stock Awards shall vest as of the date of such event; provided,
         however, the Committee may grant Restricted Stock Awards precluding
         such accelerated vesting in order to qualify the Restricted Stock
         Awards for the Performance-Based Exception.

    (d)  DEATH, DISABILITY AND RETIREMENT. In the event a Qualifying Event
         occurs before the date or dates on which Restricted Stock Awards vest,
         the expiration of the applicable restrictions (other than restrictions
         based on performance criteria set forth in Section 14) shall be
         accelerated and the Participant shall be entitled to receive the Shares
         free of all such restrictions. In the case of Restricted Stock Awards
         which are based on performance criteria set forth in Section 14, then
         as of the date on which such Qualifying Event occurs, the Participant
         shall be entitled to receive a number of Shares that is determined by
         measuring the selected performance criteria from the Company's most
         recent publicly available quarterly results that are available as of
         the date the Qualifying Event occurs; provided, however, the Committee
         may grant Restricted Stock Awards precluding such partial awards when a
         Qualifying Event occurs in order to qualify the Restricted Stock Awards
         for the Performance-Based Exception. All other Shares subject to such
         Restricted Stock Award shall be forfeited and returned to the Company
         as of the date on which such Qualifying Event occurs.

    (e)  ACCELERATION OF AWARD. Notwithstanding anything to the contrary in this
         Plan, the Committee shall have the power to permit, in its sole
         discretion, an acceleration of the expiration of the applicable
         restrictions or the applicable period of such restrictions with respect
         to any part or all of the Shares awarded to a Participant; provided,
         however, the Committee may grant Restricted Stock Awards precluding
         such accelerated vesting on order to qualify the Restricted Stock
         Awards for the Performance-Based Exception.

    (f)  NECESSITY OF STOCK INCENTIVE AGREEMENT. Each grant of a Restricted
         Stock Award shall be evidenced by a Stock Incentive Agreement that
         shall specify the terms, conditions and restrictions regarding the
         Shares awarded to a Participant, and shall incorporate such other terms
         and conditions as the Committee, acting in its sole discretion, deems
         consistent with the terms of this Plan. The Committee shall have sole
         discretion to modify the terms and provisions of Restricted Stock
         Awards in accordance with Section 12 of this Plan.

    (g)  TRANSFERABILITY OF RESTRICTED STOCK AWARDS. Except as otherwise
         provided in a Participant's Restricted Stock Award, no Restricted Stock
         Award granted under the Plan may be sold, transferred, pledged,
         assigned or otherwise alienated or hypothecated, except upon the death
         of the holder Participant by will or by the laws of descent and
         distribution.

    (h)  VOTING, DIVIDEND & OTHER RIGHTS. Unless the applicable Stock Incentive
         Agreement provides otherwise, holders of Restricted Stock Awards shall
         be entitled to vote and to receive dividends during the periods of
         restriction of their Shares to the same extent as such holders would
         have been entitled if the Shares were unrestricted Shares.

7.4      TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS.

    (a)  GRANTS OF RESTRICTED STOCK UNITS. A Restricted Stock Unit shall entitle
         the Participant to receive one Share at such future time and upon such
         terms as specified by the Committee in the Stock Incentive Agreement
         evidencing such award. Restricted Stock Units issued

                                       11
<PAGE>


         under the Plan may have restrictions which lapse based upon the service
         of a Participant, or based upon other criteria that the Committee may
         determine appropriate. The Committee may require a cash payment from
         the Participant in exchange for the grant of Restricted Stock Units or
         may grant Restricted Stock Units without the requirement of a cash
         payment. The Committee may grant Restricted Stock Units that vest on
         the attainment of performance goals determined by the Committee based
         upon one or more of the performance criteria listed in Section 14, and
         must have the attainment of such performance goals certified in writing
         by the Committee in order to meet the Performance-Based Exception.

    (b)  VESTING OF RESTRICTED STOCK UNITS. The Committee shall establish the
         vesting schedule applicable to Restricted Stock Units and shall specify
         the times, vesting and performance goal requirements. Until the end of
         the period(s) of time specified in the vesting schedule and/or the
         satisfaction of any performance criteria, the Restricted Stock Units
         subject to such Stock Incentive Award shall remain subject to
         forfeiture.

    (c)  TERMINATION OF EMPLOYMENT. If the Participant's employment with the
         Company and/or a Subsidiary ends before the Restricted Stock Units
         vest, the Participant shall forfeit all unvested Restricted Stock
         Units, unless the termination is a result of the occurrence of a
         Qualifying Event or the Committee determines that the Participant's
         unvested Restricted Stock Units shall vest as of the date of such
         event; provided, however, the Committee may grant Restricted Stock
         Units precluding such accelerated vesting on order to qualify the
         Restricted Stock Units for the Performance-Based Exception.

    (d)  DEATH, DISABILITY AND RETIREMENT. In the event a Qualifying Event
         occurs before the date or dates on which Restricted Stock Units vest,
         the expiration of the applicable restrictions (other than restrictions
         based on performance criteria set forth in Section 14) shall be
         accelerated and the Participant shall be entitled to receive the Shares
         free of all such restrictions. In the case of Restricted Stock Units
         which are based on performance criteria set forth in Section 14, then
         as of the date on which such Qualifying Event occurs, the Participant
         shall be entitled to receive a number of Shares that is determined by
         measuring the selected performance criteria from the Company's most
         recent publicly available quarterly results that are available as of
         the date the Qualifying Event occurs; provided, however, the Committee
         may grant Restricted Stock Units precluding such partial awards when a
         Qualifying Event occurs in order to qualify the Restricted Stock Units
         for the Performance-Based Exception. All other Shares subject to such
         Restricted Stock Units shall be forfeited and returned to the Company
         as of the date on which such Qualifying Event occurs.

    (e)  ACCELERATION OF AWARD. Notwithstanding anything to the contrary in this
         Plan, the Committee shall have the power to permit, in its sole
         discretion, an acceleration of the applicable restrictions or the
         applicable period of such restrictions with respect to any part or all
         of the Restricted Stock Units awarded to a Participant; provided,
         however, the Committee may grant Restricted Stock Units precluding such
         accelerated vesting on order to qualify the Restricted Stock Units for
         the Performance-Based Exception.

    (f)  NECESSITY OF STOCK INCENTIVE AGREEMENT. Each grant of Restricted Stock
         Unit(s) shall be evidenced by a Stock Incentive Agreement that shall
         specify the terms, conditions and restrictions regarding the
         Participant's right to receive Share(s) in the future, and shall
         incorporate such other terms and conditions as the Committee, acting in
         its sole discretion, deems consistent with the terms of this Plan. The
         Committee shall have sole

                                       12
<PAGE>


         discretion to modify the terms and provisions of Restricted Stock
         Unit(s) in accordance with Section 12 of this Plan.

    (g)  TRANSFERABILITY OF RESTRICTED STOCK UNITS. Except as otherwise provided
         in a Participant's Restricted Stock Unit Award, no Restricted Stock
         Unit granted under the Plan may be sold, transferred, pledged, assigned
         or otherwise alienated or hypothecated by the holder Participant,
         except upon the death of the holder Participant by will or by the laws
         of descent and distribution.

    (h)  VOTING, DIVIDEND & OTHER RIGHTS. Unless the applicable Stock Incentive
         Agreement provides otherwise, holders of Restricted Stock Units shall
         not be entitled to vote or to receive dividends until they become
         owners of the Shares pursuant to their Restricted Stock Units, and,
         unless the applicable Stock Incentive Agreement provides otherwise, the
         holder of a Restricted Stock Unit shall not be entitled to any dividend
         equivalents (as described in Section 7.1(e)).

7.5      TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

    (a)  GRANTS OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right shall
         entitle the Participant to receive upon exercise or payment the excess
         of the Fair Market Value of a specified number of Shares at the time of
         exercise, over a specified price. The specified price for a Stock
         Appreciation Right granted in connection with a previously or
         contemporaneously granted Option, shall not be less than the Exercise
         Price for Shares that are the subject of the Option. In the case of any
         other Stock Appreciation Right, the specified price shall not be less
         than one hundred percent (100%) of the Fair Market Value of the Shares
         at the time the Stock Appreciation Right was granted. If related to an
         Option, the exercise of a Stock Appreciation Right shall result in a
         pro rata surrender of the related Option to the extent the Stock
         Appreciation Right has been exercised.

    (b)  PAYMENT. Upon exercise or payment of a Stock Appreciation Right, the
         Company shall pay to the Participant the appreciation with Shares
         (computed using the aggregate Fair Market Value of Shares on the date
         of payment or exercise) as specified in the Stock Incentive Agreement
         or, if not specified, as the Committee determines. To the extent that a
         Stock Appreciation Right is paid with consideration other than Shares,
         it shall be treated as paid in Shares for purposes of Section 3.

    (c)  VESTING OF STOCK APPRECIATION RIGHTS. The Committee shall establish the
         vesting schedule applicable to Stock Appreciation Rights and shall
         specify the times, vesting and performance goal requirements. Until the
         end of the period(s) of time specified in the vesting schedule and/or
         the satisfaction of any performance criteria, the Stock Appreciation
         Rights subject to such Stock Incentive Award shall remain subject to
         forfeiture.

    (d)  DEATH, DISABILITY AND RETIREMENT. In the event a Qualifying Event
         occurs before the date or dates on which Stock Appreciation Rights
         vest, the expiration of the applicable restrictions (other than
         restrictions based on performance criteria set forth in Section 14)
         shall be accelerated and the Participant shall be entitled to receive
         the full value of the Stock Appreciation Right free of all such
         restrictions. In the case of Stock Appreciation Rights which are based
         on performance criteria set forth in Section 14, then as of the date on
         which such Qualifying Event occurs, the Participant shall be entitled
         to receive a value determined by measuring the selected performance
         criteria from the Company's most

                                       13
<PAGE>


         recent publicly available quarterly results that are available as of
         the date the Qualifying Event occurs. All other benefits under the
         Stock Appreciation Rights shall thereupon be forfeited and returned to
         the Company as of the date on which such Qualifying Event occurs.

    (e)  TRANSFERABILITY OF STOCK APPRECIATION RIGHTS. Except as otherwise
         provided in a Participant's Stock Incentive Agreement, no Stock
         Appreciation Right granted under the Plan may be sold, transferred,
         pledged, assigned or otherwise alienated or hypothecated, except upon
         the death of the holder Participant by will or by the laws of descent
         and distribution.

    (f)  SPECIAL PROVISIONS FOR TANDEM STOCK APPRECIATION RIGHTS. A Stock
         Appreciation Right granted in connection with an Option may only be
         exercised to the extent that the related Option has not been exercised.
         A Stock Appreciation Right granted in connection with an ISO (1) will
         expire no later than the expiration of the underlying ISO, (2) may be
         for no more than the difference between the exercise price of the
         underlying ISO and the Fair Market Value of the Shares subject to the
         underlying ISO at the time the Stock Appreciation Right is exercised,
         (3) may be transferable only when, and under the same conditions as,
         the underlying ISO is transferable, and (4) may be exercised only (i)
         when the underlying ISO could be exercised and (ii) when the Fair
         Market Value of the Shares subject to the ISO exceeds the exercise
         price of the ISO.


                                   SECTION 8.
                              SECURITIES REGULATION

         8.1      LEGALITY OF ISSUANCE. No Share shall be issued under this Plan
unless and until the Committee has determined that all required actions have
been taken to register such Share under the Securities Act of 1933 or the
Company has determined that an exemption therefrom is available, any applicable
listing requirement of any stock exchange on which the Share is listed has been
satisfied, and any other applicable provision of state, federal or foreign law,
including foreign securities laws where applicable, has been satisfied.

         8.2      RESTRICTIONS ON TRANSFER; REPRESENTATIONS; LEGENDS. Regardless
of whether the offering and sale of Shares under the Plan have been registered
under the Securities Act of 1933 or have been registered or qualified under the
securities laws of any state, the Company may impose restrictions upon the sale,
pledge, or other transfer of such Shares (including the placement of appropriate
legends on stock certificates) if, in the judgment of the Company and its
counsel, such restrictions are necessary or desirable to achieve compliance with
the provisions of the Securities Act of 1933, the securities laws of any state,
the United States or any other applicable foreign law. If the offering and/or
sale of Shares under the Plan is not registered under the Securities Act of 1933
and the Company determines that the registration requirements of the Securities
Act of 1933 apply but an exemption is available which requires an investment
representation or other representation, the participant shall be required, as a
condition to acquiring such Shares, to represent that such Shares are being
acquired for investment, and not with a view too the sale or distribution
thereof, except in compliance with the Securities Act of 1933, and to make such
other representations as are deemed necessary or appropriate by the Company and
its counsel. All Stock Incentive Agreements shall contain a provision stating
that any restrictions under any applicable securities laws will apply.

                                       14
<PAGE>


         8.3      REGISTRATION OF SHARES. The Company may, and intends to, but
is not obligated to, register or qualify the offering or sale of Shares under
the Securities Act of 1933 or any other applicable state, federal or foreign
law.

                                   SECTION 9.
                                  LIFE OF PLAN

         No Stock Incentive shall be granted under this Plan on or after the
earlier of:

         (a)      the tenth (10th) anniversary of the effective date of this
                  Plan (as determined under Section 4 of this Plan), or

         (b)      the date on which all of the Shares reserved under Section 3
                  of this Plan have (as a result of the exercise of Stock
                  Incentives granted under this Plan or lapse of all
                  restrictions under a Restricted Stock Award or Restricted
                  Stock Unit) been issued or are no longer available for use
                  under this Plan.

         This Plan shall continue in effect until all outstanding Stock
Incentives have been exercised in full or are no longer exercisable and all
Restricted Stock Awards or Restricted Stock Units have vested or been forfeited.

                                   SECTION 10.
                                   ADJUSTMENT

         Notwithstanding anything in Section 12 to the contrary, (i) the number
of Shares reserved under Section 3 of this Plan, (ii) the limit on the number of
Shares that may be granted subject to Stock Incentives during a calendar year to
any individual under Section 3 of this Plan, (iii) the number of Shares subject
to Stock Incentives granted under this Plan, and (iv) the Exercise Price of any
Options and the specified exercise price of any Stock Appreciation Rights, shall
be adjusted by the Committee in an equitable manner to reflect any change in the
capitalization of the Company, including, but not limited to, such changes as
stock dividends or stock splits. Furthermore, the Committee shall have the right
to adjust (in a manner that satisfies the requirements of Code Section 424(a))
(x) the number of Shares reserved under Section 3, (y) the number of Shares
subject to Stock Incentives granted under this Plan, and (z) the Exercise Price
of any Options and the specified exercise price of any Stock Appreciation Rights
in the event of any corporate transaction described in Code Section 424(a) that
provides for the substitution or assumption of such Stock Incentives. If any
adjustment under this Section creates a fractional Share or a right to acquire a
fractional Share, such fractional Share shall be disregarded, and the number of
Shares reserved under this Plan and the number subject to any Stock Incentives
granted under this Plan shall be the next lower number of Shares, rounding all
fractions downward. An adjustment made under this Section by the Committee shall
be conclusive and binding on all affected persons and, further, shall not
constitute an increase in the number of Shares reserved under Section 3 or an
increase in any limitation imposed by the Plan.

                                   SECTION 11.
                        CHANGE OF CONTROL OF THE COMPANY

         11.1     GENERAL RULE FOR CHANGE OF CONTROL. Except as otherwise
provided in a Stock Incentive Agreement, if a Change of Control occurs, and if
the agreements effectuating the Change of Control do not provide for the
assumption or substitution of all Stock Incentives granted under this Plan, with
respect to any Stock Incentive granted under this Plan that is not so

                                       15
<PAGE>


assumed or substituted (a "Non-Assumed Stock Incentive"), the Committee, in its
sole and absolute discretion, may, with respect to any or all of such
Non-Assumed Stock Incentives, take any or all of the following actions to be
effective as of the date of the Change of Control (or as of any other date fixed
by the Committee occurring within the thirty (30) day period immediately
preceding the date of the Change of Control, but only if such action remains
contingent upon the effectuation of the Change of Control) (such date referred
to as the "Action Effective Date"):

         (a)      Accelerate the vesting and/or exercisability of such
Non-Assumed Stock Incentive; and/or

         (b)      Unilaterally cancel such Non-Assumed Stock Incentive in
exchange for:

                  (i)      whole and/or fractional Shares (or for whole Shares
                           and cash in lieu of any fractional Share) or whole
                           and/or fractional shares of a successor (or for whole
                           shares of a successor and cash in lieu of any
                           fractional share) that, in the aggregate, are equal
                           in value to the excess of the Fair Market Value of:

                           (I)      in the case of Options, the Shares that
                                    could be purchased subject to such
                                    Non-Assumed Stock Incentive less the
                                    aggregate Exercise Price for the Options
                                    with respect to such Shares;

                           (II)     in the case of Restricted Stock Units or
                                    Stock Appreciation Rights, Shares subject to
                                    such Stock Incentive determined as of the
                                    Action Effective Date (taking into account
                                    vesting), less the value of any
                                    consideration payable on exercise.

                  (ii)     cash or other property equal in value to the excess
                           of the Fair Market Value of

                           (I)      in the case of Options, the Shares that
                                    could be purchased subject to such
                                    Non-Assumed Stock Incentive less the
                                    aggregate Exercise Price for the Options
                                    with respect to such Shares or

                           (II)     in the case of Restricted Stock Units or
                                    Stock Appreciation Rights, Shares subject to
                                    such Stock Incentive determined as of the
                                    Action Effective Date (taking into account
                                    vesting) less the value of any consideration
                                    payable on exercise.

         (c)      In the case of Options, unilaterally cancel such Non-Assumed
Option after providing the holder of such Option with (1) an opportunity to
exercise such Non-Assumed Option to the extent vested within a specified period
prior to the date of the Change of Control, and (2) notice of such opportunity
to exercise prior to the commencement of such specified period. However,
notwithstanding the foregoing, to the extent that the recipient of a Non-Assumed
Stock Incentive is an Insider, payment of cash in lieu of whole or fractional
Shares or shares of a successor may only be made to the extent that such payment
(1) has met the requirements of an exemption under Rule 16b-3 promulgated under
the Exchange Act, or (2) is a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption
under Rule 16b-3 promulgated under the Exchange Act. Unless a Stock Incentive
Agreement provides otherwise, the payment of cash in lieu of whole or fractional
Shares or in lieu of whole or fractional shares of a successor shall be
considered a subsequent transaction approved by the original grant of an Option.

                                       16
<PAGE>


         11.2     GENERAL RULE FOR OTHER STOCK INCENTIVE AGREEMENTS. If a Change
of Control occurs, then, except to the extent otherwise provided in the Stock
Incentive Agreement pertaining to a particular Stock Incentive or as otherwise
provided in this Plan, each Stock Incentive shall be governed by applicable law
and the documents effectuating the Change of Control.

                                   SECTION 12.
                            AMENDMENT OR TERMINATION

         This Plan may be amended by the Committee from time to time to the
extent that the Committee deems necessary or appropriate; provided, however, no
such amendment shall be made absent the approval of the shareholders of the
Company if such amendment (a) increases the number of Shares reserved under
Section 3, except as set forth in Section 10, (b) extends the maximum life of
the Plan under Section 9 or the maximum exercise period under Section 7, (c)
decreases the minimum Exercise Price under Section 7, or (d) changes the
designation of Eligible Recipients eligible for Stock Incentives under Section
6. Shareholder approval of other material amendments (such as an expansion of
the types of awards available under the Plan, an extension of the term of the
Plan, or a change to the method of determining the Exercise Price of Options
issued under the Plan) may also be required pursuant to rules promulgated by an
established stock exchange or a national market system. An exchange of a later
granted Option for an earlier granted Option for any purpose, including, but not
limited to, the purpose of lowering the Exercise Price of such Option, and an
exchange of a later granted Stock Incentive for an earlier granted Stock
Incentive for any purpose, shall not be deemed to be an amendment to this Plan.
The Board also may suspend the granting of Stock Incentives under this Plan at
any time and may terminate this Plan at any time. The Company shall have the
right to modify, amend or cancel any Stock Incentive after it has been granted
if (I) the modification, amendment or cancellation does not diminish the rights
or benefits of the Stock Incentive recipient under the Stock Incentive
(provided, however, that a modification, amendment or cancellation that results
solely in a change in the tax consequences with respect to a Stock Incentive
shall not be deemed as a diminishment of rights or benefits of such Stock
Incentive), (II) the Participant consents in writing to such modification,
amendment or cancellation, (III) there is a dissolution or liquidation of the
Company, (IV) this Plan and/or the Stock Incentive Agreement expressly provides
for such modification, amendment or cancellation, or (V) the Company would
otherwise have the right to make such modification, amendment or cancellation by
applicable law.

                                   SECTION 13.
                                  MISCELLANEOUS

         13.1     SHAREHOLDER RIGHTS. Except as provided in Section 7. 3 with
respect to Restricted Stock Awards, or in a Stock Incentive Agreement, no
Participant shall have any rights as a shareholder of the Company as a result of
the grant of a Stock Incentive pending the actual delivery of Shares subject to
such Stock Incentive to such Participant.

         13.2     NO GUARANTEE OF CONTINUED RELATIONSHIP. The grant of a Stock
Incentive to a Participant under this Plan shall not constitute a contract of
employment or other relationship with the Company and shall not confer on a
Participant any rights upon his or her termination of employment or relationship
with the Company in addition to those rights, if any, expressly set forth in the
Stock Incentive Agreement that evidences his or her Stock Incentive.

         13.3     WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company as a
condition precedent for the grant or fulfillment of any Stock Incentive, an
amount in Shares or cash sufficient to satisfy federal,

                                       17
<PAGE>


state and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of this Plan
and/or any action taken by a Participant with respect to a Stock Incentive.
Whenever Shares are to be issued to a Participant upon exercise of an Option or
Stock Appreciation Right, or satisfaction of conditions under a Restricted Stock
Unit, the Company shall have the right to require the Participant to remit to
the Company, as a condition of exercise of the Option or Stock Appreciation
Right, or as a condition to the fulfillment of the Restricted Stock Unit, an
amount in cash (or, unless the Stock Incentive Agreement provides otherwise, in
Shares) sufficient to satisfy federal, state and local withholding tax
requirements at the time of exercise. However, notwithstanding the foregoing, to
the extent that a Participant is an Insider, satisfaction of withholding
requirements by having the Company withhold Shares may only be made to the
extent that such withholding of Shares (1) has met the requirements of an
exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a
subsequent transaction the terms of which were provided for in a transaction
initially meeting the requirements of an exemption under Rule 16b-3 promulgated
under the Exchange Act. Unless the Stock Incentive Agreement provides otherwise,
the withholding of shares to satisfy federal, state and local withholding tax
requirements shall be a subsequent transaction approved by the original grant of
a Stock Incentive. Notwithstanding the foregoing, in no event shall payment of
withholding taxes be made by a retention of Shares by the Company unless the
Company retains only Shares with a Fair Market Value equal to the minimum amount
of taxes required to be withheld.

         13.4     NOTIFICATION IF DISQUALIFYING DISPOSITIONS OF ISO OPTIONS. If
a Participant sells or otherwise disposes of any of the Shares acquired pursuant
to an Option that is an ISO on or before the later of (1) the date two (2) years
after the date of grant of such Option, or (2) the date one (1) year after the
exercise of such Option, then the Participant shall immediately notify the
Company in writing of such sale or disposition and shall cooperate with the
Company in providing sufficient information to the Company for the Company to
properly report such sale or disposition to the Internal Revenue Service. The
Participant acknowledges and agrees that he or she may be subject to federal,
state and/or local tax withholding by the Company on the compensation income
recognized by Participant from any such early disposition, and agrees that he or
she shall include the compensation from such early disposition in his gross
income for federal tax purposes. Participant also acknowledges that the Company
may condition the exercise of any Option that is an ISO on the Participant's
express written agreement with these provisions of this Plan.

         13.5     TRANSFERS & RESTRUCTURINGS. The transfer of a Participant's
employment between or among the Company or a Subsidiary (including the merger of
a Subsidiary into the Company) shall not be treated as a termination of his or
her employment under this Plan. Likewise, the continuation of employment by a
Participant with a corporation which is a Subsidiary shall be deemed to be a
termination of employment when such corporation ceases to be a Subsidiary.

         13.6     GOVERNING LAW/CONSENT TO JURISDICTION. This Plan shall be
construed under the laws of the State of Washington without regard to principles
of conflicts of law. Each Participant consents to the exclusive jurisdiction and
venue of the state and federal courts located in King County, Washington for the
determination of all disputes arising from this Plan and waives any rights to
remove or transfer the case to another court.

         13.7     ESCROW OF SHARES. To facilitate the Company's rights and
obligations under this Plan, the Company reserves the right to appoint an escrow
agent, who shall hold the Shares owned by a Participant pursuant to this Plan.

                                       18
<PAGE>


                                   SECTION 14.
                              PERFORMANCE CRITERIA

         14.1     PERFORMANCE GOAL BUSINESS CRITERIA. Unless and until the Board
proposes for shareholder vote and shareholders approve a change in the general
performance measures set forth in this Section, the attainment of which may
determine the degree of payout and/or vesting with respect to Stock Incentives
to Key Employees and Key Persons pursuant to this Plan which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used by the Committee for purposes of such grants shall be chosen from among the
following: (a) earnings per share; (b) net income (before or after taxes); (c)
return measures (including, but not limited to, return on assets, equity or
sales); (d) cash flow return on investments which equals net cash flows divided
by owners equity; (e) earnings before or after taxes, depreciation and/or
amortization; (f) gross revenues; (g) operating income (before or after taxes);
(h) total shareholder return; (i) corporate performance indicators (indices
based on the level of certain services provided to customers); (j) cash
generation, profit and/or revenue targets; (k) growth measures, including
revenue growth, as compared with a peer group or other benchmark; and/or (l)
share price (including, but not limited to, growth measures and total
shareholder return). In setting performance goals using these performance
measures, the Committee may exclude the effect of changes in accounting
standards and non-recurring unusual events specified by the Committee, such as
write-offs, capital gains and losses and acquisitions and dispositions of
businesses.

         14.2     DISCRETION IN FORMULATION OF PERFORMANCE GOALS. The Committee
shall have the discretion to adjust the determinations of the degree of
attainment of the pre-established performance goals; provided, however, that
Stock Incentives which are to qualify for the Performance-Based Exception may
not be adjusted upward (although the Committee shall retain the discretion to
adjust such Stock Incentives downward).

         14.3     PERFORMANCE PERIODS. The Committee shall have the discretion
to determine the period during which any performance goal must be attained with
respect to a Stock Incentive. Such period may be of any length, and must be
established prior to the start of such period or within the first ninety (90)
days of such period (provided that the performance criteria are not in any event
set after 25% or more of such period has elapsed).

         14.4     MODIFICATIONS TO PERFORMANCE GOAL CRITERIA. In the event that
the applicable tax and/or securities laws and regulatory rules and regulations
change to permit Committee discretion to alter the governing performance
measures noted above without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Stock Incentives which shall not qualify for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements under Code Section 162(m) to qualify for the
Performance-Based Exception.

                                   SECTION 15.
                                NON-US PROVISIONS

         15.1     The Committee shall have the authority to require that any
Stock Incentive Agreement relating to a Stock Incentive in a jurisdiction
outside of the United States contain such terms as are required by local law in
order to constitute a valid grant under the laws of such jurisdiction. Such
authority shall be notwithstanding the fact that the requirements of the local
jurisdiction may be different from or more restrictive than the terms set forth
in this Plan. No

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<PAGE>


purchase or delivery of Shares pursuant to a Stock Incentive shall occur until
applicable restrictions imposed pursuant to this Plan or the applicable Stock
Incentive have terminated.


         Date approved by stockholders of the Company: June 23, 2005

                                        LION, Inc.


                                        --------------------------------------
                                        by:  Corporate Secretary


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