ELECTRONIC
CONTROL SECURITY INC.

     

    2006
EQUITY INCENTIVE PLAN

     

    Section
1. Purpose of the Plan

     

    The
purpose of the Electronic Control Security, Inc. Equity Incentive Plan (the
"Plan") is to further the interests of Electronic Control Security, Inc. (the
"Company") and its shareholders by providing long-term performance incentives to
those key employees and consultants of the Company and its Subsidiaries who are
largely responsible for the management, growth and protection of the business of
the Company and its Subsidiaries.

     

    Section
2. Definitions

     

    For
purposes of the Plan, the following terms shall be defined as set forth
below:

     

    (a)
"Award" means any Option, Performance Unit, SAR (including a Limited SAR),
Restricted Stock, Stock granted as a bonus or in lieu of other awards, other
Stock-Based Award, Tax Bonus or other cash payments granted to a Participant
under the Plan.

     

    (b)
"Award Agreement" shall mean the written agreement, instrument or document
evidencing an Award.

     

    (c)
"Change of Control" means and includes each of the following: (i) the
acquisition, in one or more transactions, of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) by any person or entity or any
group of persons or entities who constitute a group (within the meaning of
Section 13(d)(3) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
Subsidiary, of any securities of the Company such that, as a result of such
acquisition, such person, entity or group either (A) beneficially owns (within
the meaning of Rule l3d-3 under the Exchange Act), directly or indirectly, more
than 50% of the Company's outstanding voting securities entitled to vote on a
regular basis for a majority of the members of the Board of Directors of the
Company or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Board; (ii) a change in the composition of the
Board of Directors of the Company such that a majority of the members of the
Board of Directors of the Company are not Continuing Directors; or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than 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) at least 50% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one or
more transactions) all or substantially all of the Company's
assets.

     

    Notwithstanding
the foregoing, the preceding events shall not be deemed to be a Change of
Control if, prior to any transaction or transactions causing such change, a
majority of the Continuing Directors shall have voted not to treat such
transaction or transactions as resulting in a Change of Control.

     

    (d)
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    (e) A
"Continuing Director" means, as of any date of determination, any member of the
Board of Directors of the Company who (i) was a member of such Board on the
effective date of the Plan or (ii) was nominated for election or elected to such
Board with the affirmative vote of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or
election.

     

    (f)
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time.

     

    (g) "Fair
Market Value" means, with respect to Stock, Awards, or other property, the fair
market value of such Stock, Awards, or other property determined by such methods
or procedures as shall be established from time to time by the Committee in good
faith and in accordance with applicable law. Unless otherwise determined by the
Committee, the Fair Market Value of Stock shall mean the mean of the high and
low sales prices of Stock on the relevant date as reported on the stock exchange
or market on which the Stock is primarily traded, or if no sale is made on such
date, then the Fair Market Value is the weighted average of the mean of the high
and low sales prices of the Stock on the next preceding day and the next
succeeding day on which such sales were made, as reported on the stock exchange
or market on which the Stock is primarily traded.

     

    (h) "ISO"
means any Option designated as an incentive stock option within the meaning of
Section 422 of the Code.

     

    (i)
"Limited SAR" means an SAR exercisable only for cash upon a Change of Control or
other event, as specified by the Committee.

     

    (j)
"Option" means a right granted to a Participant pursuant to Section 6(b) to
purchase Stock at a specified price during specified time periods. An Option may
be either an ISO or a nonstatutory Option (an Option not designated as an
ISO).

     

    (k)
"Performance Unit" means a right granted to a Participant pursuant to Section
6(c) to receive a payment in cash equal to the increase in the book value of the
Company during specified time periods if specified performance goals are
met.

     

    (l)
"Restricted Stock" means Stock awarded to a Participant pursuant to Section 6(d)
that may be subject to certain restrictions and to a risk of
forfeiture.

     

    (m)
"Stock-Based Award" means a right that may be denominated or payable in, or
valued in whole or in part by reference to the market value of, Stock,
including, but not limited to, any Option, SAR (including a Limited SAR),
Restricted Stock, Stock granted as a bonus or Awards in lieu of cash
obligations.

     

    (n) "SAR"
or "Stock Appreciation Right" means the right granted to a Participant pursuant
to Section 6(e) to be paid an amount measured by the appreciation in the Fair
Market Value of Stock from the date of grant to the date of exercise of the
right, with payment to be made in cash, Stock or as specified in the Award, as
determined by the Committee.

     

    (o)
"Subsidiary" shall mean any corporation, partnership, joint venture or other
business entity of which 50% or more of the outstanding voting power is
beneficially owned, directly or indirectly, by the Company.

     

    (p) "Tax
Bonus" means a payment in cash in the year in which an amount is included in the
gross income of a Participant in respect of an Award of an amount equal to the
federal, foreign, if any, and applicable state and local income and employment
tax liabilities payable by the Participant as a result of (i) the amount
included in gross income in respect of the Award and (ii) the payment of the
amount in clause (i) and the amount in this clause (ii). For purposes of
determining the amount to be paid to the Participant pursuant to the preceding
sentence, the Participant shall be deemed to pay federal, foreign, if any, and
state and local income taxes at the highest marginal rate of tax imposed upon
ordinary income for the year in which an amount in respect of the Award is
included in gross income, after giving effect to any deductions therefrom or
credits available with respect to the payment of any such
taxes.


    
      
         


      

      
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    Section
3. Administration of the Plan

     

    The Plan
shall be administered by shall be administered by the Board of Directors of the
Company or, at the discretion of the Board, by a committee composed of at least
two members of the Board. Any such committee designated by the Board, and the
Board itself acting in its capacity as administrator of the Equity Incentive
Plan, is referred to herein as the "Committee." Any action of the Committee in
administering the Plan shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, employees, Participants, persons
claiming rights from or through Participants and stockholders of the
Company.

     

    Subject
to the provisions of the Plan, the Committee shall have full and final authority
in its discretion (a) to select the key employees and consultants who will
receive Awards pursuant to the Plan ("Participants"), (b) to determine the type
or types of Awards to be granted to each Participant, (c) to determine the
number of shares of Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not limited to,
restrictions as to transferability or forfeiture, exercisability or settlement
of an Award and waivers or accelerations thereof, and waivers of or
modifications to performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine) and all other matters
to be determined in connection with an Award; (d) to determine whether, to what
extent, and under what circumstances an Award may be settled, or the exercise
price of an Award may be paid, in cash, Stock, other Awards or other property,
or an Award may be canceled, forfeited, or surrendered; (e) to determine
whether, and to certify that, performance goals to which the settlement of an
Award is subject are satisfied; (f) to correct any defect or supply any omission
or reconcile any inconsistency in the Plan, and to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the administration
of the Plan; and (g) to make all other determinations as it may deem necessary
or advisable for the administration of the Plan. The Committee may delegate to
officers or managers of the Company or any Subsidiary or to unaffiliated service
providers the authority, subject to such terms as the Committee shall determine,
to perform administrative functions and to perform such other functions as the
Committee may determine, to the extent permitted under Rule 16b-3, Section
162(m) of the Code and applicable law.

     

    Section
4. Participation in the Plan

     

    Participants
in the Plan shall be selected by the Committee from among the key employees,
consultants and directors of the Company and its Subsidiaries, provided,
however, that only key employees shall be eligible to receive ISOs under the
Plan.

     

    Section
5. Plan Limitations; Shares Subject to the Plan

     

    (a)
Subject to the provisions of Section 8(a) hereof, the aggregate number of shares
of common stock, par value $0.001 per share, of the Company (the "Stock")
available for issuance as Awards under the Plan shall not exceed 4,000,000
shares.

     

    (b)
Subject to the provisions of Section 8(a) hereof, the aggregate number of
Performance Units which may be awarded under the Plan shall not exceed 500,000.
If any Performance Units awarded under the Plan shall be forfeited or canceled,
such Performance Units shall thereafter be available for award under the
Plan.


    
      
         


      

      
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    No Award
may be granted if the number of shares to which such Award relates, when added
to the number of shares previously issued under the Plan and the number of
shares which may then be acquired pursuant to other outstanding, unexercised
Awards, exceeds the number of shares available for issuance pursuant to the
Plan. If any shares subject to an Award are forfeited or such Award is settled
in cash or otherwise terminates for any reason whatsoever without an actual
distribution of shares to the Participant, any shares counted against the number
of shares available for issuance pursuant to the Plan with respect to such Award
shall, to the extent of any such forfeiture, settlement, or termination, again
be available for Awards under the Plan; provided, however, that the Committee
may adopt procedures for the counting of shares relating to any Award to ensure
appropriate counting, avoid double counting, and provide for adjustments in any
case in which the number of shares actually distributed differs from the number
of shares previously counted in connection with such Award.

     

    Section
6. Awards

     

    (a)
General. Awards may be granted on the terms and conditions set forth in
this

     

    Section
6. In addition, the Committee may impose on any Award or the exercise thereof,
at the date of grant or thereafter (subject to Section 8(a)), such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms requiring forfeiture of Awards in the
event of termination of employment by the Participant; provided, however, that
the Committee shall retain full power to accelerate or waive any such additional
term or condition as it may have previously imposed. All Awards shall be
evidenced by an Award Agreement.

     

    (b)
Options. The Committee may grant Options to Participants on the following terms
and conditions:

     

    (i)
Exercise Price. The exercise price of each Option shall be determined by the
Committee at the time the Option is granted, but (except as provided in
Section

     

    7(a)) the
exercise price of any ISO shall not be less than the Fair Market Value (110% of
the Fair Market Value in the case of a 10% shareholder, within the meaning of
Section 422(c)(5) of the Code) of the shares covered thereby at the time the
Option is granted.

     

    (ii) Time
and Method of Exercise. The Committee shall determine the time or times at which
an Option may be exercised in whole or in part, whether the exercise price shall
be paid in cash or by the surrender at Fair Market Value of Stock, or by any
combination of cash and shares of Stock, including, without limitation, cash,
Stock, other Awards, or other property (including notes or other contractual
obligations of Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements, to the extent permitted by applicable law),
and the methods by which Stock will be delivered or deemed to be delivered to
Participants.

     

    (iii)
Incentive Stock Options. The terms of any Option granted under the Plan as an
ISO shall comply in all respects with the provisions of Section 422 of the Code,
including, but not limited to, the requirement that no ISO shall be granted more
than ten years after the effective date of the Plan.

     

    (c)
Performance Units. The Committee is authorized to grant Performance Units to
Participants on the following terms and conditions:


    
      
         


      

      
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    (i)
Performance Criteria and Period. At the time it makes an award of Performance
Units, the Committee shall establish both the performance goal or goals and the
performance period or periods applicable to the Performance Units so awarded. A
performance goal shall be a goal, expressed in terms of growth in book value,
earnings per share, return on equity or any other financial or other measurement
deemed appropriate by the Committee, or may relate to the results of operations
or other measurable progress of either the Company as a whole or the
Participant's Subsidiary, division or department. The performance period will be
the period of time over which one or more of the performance goals must be
achieved, which may be of such length as the Committee, in its discretion, shall
select. Neither the performance goals nor the performance periods need be
identical for all Performance Units awarded at any time or from time to time.
The Committee shall have the authority, in its discretion, to accelerate the
time at which any performance period will expire or waive or modify the
performance goals of any Participant or Participants. The Committee may also
make such adjustments, to the extent it deems appropriate, to the performance
goals for any Performance Units awarded to compensate for, or to reflect, any
material changes which may have occurred in accounting practices, tax laws,
other laws or regulations, the financial structure of the Company, acquisitions
or dispositions of business or Subsidiaries or any unusual circumstances outside
of management's control which, in the sole judgment of the Committee, alters or
affects the computation of such performance goals or the performance of the
Company or any relevant Subsidiary, division or department.

     

    (ii)
Value of Performance Units. The value of each Performance Unit at any time shall
equal the book value per share of the Company's Stock, as such value appears on
the consolidated balance sheet of the Company as of the end of the fiscal
quarter immediately preceding the date of valuation.

     

    (d)
Restricted Stock. The Committee is authorized to grant Restricted Stock to
Participants on the following terms and conditions:

     

    (i)
Restricted Period. Restricted Stock awarded to a Participant shall be subject to
such restrictions on transferability and other restrictions for such periods as
shall be established by the Committee, in its discretion, at the time of such
Award, which restrictions may lapse separately or in combination at such times,
under such circumstances, or otherwise, as the Committee may
determine.

     

    (ii)
Forfeiture. Restricted Stock shall be forfeitable to the Company upon
termination of employment during the applicable restricted periods. The
Committee, in its discretion, whether in an Award Agreement or anytime after an
Award is made, may accelerate the time at which restrictions or forfeiture
conditions will lapse or remove any such restrictions, including upon death,
disability or retirement, whenever the Committee determines that such action is
in the best interests of the Company.

     

    (iii)
Certificates for Stock. Restricted Stock granted under the Plan may be evidenced
in such manner as the Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the Participant, such
certificates may bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock.

     

    (iv)
Rights as a Shareholder. Subject to the terms and conditions of the Award
Agreement, the Participant shall have all the rights of a stockholder with
respect to shares of Restricted Stock awarded to him or her, including, without
limitation, the right to vote such shares and the right to receive all dividends
or other distributions made with respect to such shares. If any such dividends
or distributions are paid in Stock, the Stock shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which the Stock has been distributed.

     

    (e) Stock
Appreciation Rights. The Committee is authorized to grant SARs to Participants
on the following terms and conditions:

     

    (i) Right
to Payment. An SAR shall confer on the Participant to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the Fair Market Value of
one share of Stock on the date of exercise over (B) the grant price of the SAR
as determined by the Committee as of the date of grant of the SAR, which grant
price (except as provided in Section 7(a)) shall not be less than the Fair
Market Value of one share of Stock on the date of grant.


    
      
         


      

      
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    (ii)
Other Terms. The Committee shall determine the time or times at which an SAR may
be exercised in whole or in part, the method of exercise, method of settlement,
form of consideration payable in settlement, method by which Stock will be
delivered or deemed to be delivered to Participants, whether or not an SAR shall
be in tandem with any other Award, and any other terms and conditions of any
SAR. Limited SARs may be granted on such terms, not inconsistent with this
Section 6(e), as the Committee may determine. Limited SARs may be either
freestanding or in tandem with other Awards.

     

    (f) Bonus
Stock and Awards in Lieu of Cash Obligations. The Committee is authorized to
grant Stock as a bonus, or to grant Stock or other Awards in lieu of Company or
Subsidiary obligations to pay cash or deliver other property under other plans
or compensatory arrangements; provided that, in the case of Participants subject
to Section 16 of the Exchange Act, such cash amounts are determined under such
other plans in a manner that complies with applicable requirements of Rule 16b-3
so that the acquisition of Stock or Awards hereunder shall be exempt from
Section 16(b) liability. Stock or Awards granted hereunder shall be subject to
such other terms as shall be determined by the Committee.

     

    (g) Other
Stock-Based Awards. The Committee is authorized, subject to limitations under
applicable law, to grant to Participants such other Stock-Based Awards in
addition to those provided in Sections 6(b) and (d) through (e) hereof, as
deemed by the Committee to be consistent with the purposes of the Plan. The
Committee shall determine the terms and conditions of such Awards. Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(g) shall be purchased for such consideration and paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, or other property, as the Committee shall
determine.

     

    (h) Cash
Payments. The Committee is authorized, subject to limitations under applicable
law, to grant to Participants Tax Bonuses and other cash payments, whether
awarded separately or as a supplement to any Stock-Based Award. The Committee
shall determine the terms and conditions of such Awards.

     

    Section
7. Additional Provisions Applicable to Awards

     

    (a)
Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan or any award granted under any other plan of the Company or any
Subsidiary, or any business entity acquired by the Company or any Subsidiary, or
any other right of a Participant to receive payment from the Company or any
Subsidiary. If an Award is granted in substitution for another Award or award,
the Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. Awards granted in addition to, or
in tandem with other Awards or awards may be granted either as of the same time
as, or a different time from, the grant of such other Awards or awards. The per
share exercise price of any Option, grant price of any SAR, or purchase price of
any other Award conferring a right to purchase Stock:

     

    (i)
granted in substitution for an outstanding Award or award, shall be not less
than the lesser of (A) the Fair Market Value of a share of Stock at the date
such substitute Award is granted or (B) such Fair Market Value at that date,
reduced to reflect the Fair Market Value at that date of the Award or award
required to be surrendered by the Participant as a condition to receipt of the
substitute Award; or


    
      
         


      

      
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    (ii)
retroactively granted in tandem with an outstanding Award or award, shall not be
less than the lesser of the Fair Market Value of a share of Stock at the date of
grant of the later Award or at the date of grant of the earlier Award or
award.

     

    (b)
Exchange and Buy Out Provisions. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, other
Awards (subject to Section 7(a)), or other property based on such terms and
conditions as the Committee shall determine and communicate to a Participant at
the time that such offer is made.

     

    (c)
Performance Conditions. The right of a Participant to exercise or receive a
grant or settlement of any Award, and the timing thereof, may be subject to such
performance conditions as may be specified by the Committee.

     

    (d) Term
of Awards. The term of each Award shall, except as provided herein, be for such
period as may be determined by the Committee; provided, however, that in no
event shall the term of any ISO, or any SAR granted in tandem therewith, exceed
a period of ten years from the date of its grant (or such shorter period as may
be applicable under Section 422 of the Code).

     

    (e) Form
of Payment. Subject to the terms of the Plan and any applicable Award Agreement,
payments or transfers to be made by the Company or a Subsidiary upon the grant
or exercise of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Stock, other Awards, or other
property (and may be made in a single payment or transfer, in installments, or
on a deferred basis), in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee. (Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installments or deferred payments.) The Committee, in its discretion, may
accelerate any payment or transfer upon a change in control as defined by the
Committee. The Committee may also authorize payment upon the exercise of an
Option by net issuance or other cashless exercise methods.

     

    (f) Loan
Provisions. With the consent of the Committee, and subject at all times to laws
and regulations and other binding obligations or provisions applicable to the
Company, the Company may make, guarantee, or arrange for a loan or loans to a
Participant with respect to the exercise of any Option or other payment in
connection with any Award, including the payment by a Participant of any or all
federal, state, or local income or other taxes due in connection with any Award.
Subject to such limitations, the Committee shall have full authority to decide
whether to make a loan or loans hereunder and to determine the amount, terms,
and provisions of any such loan or loans, including the interest rate to be
charged in respect of any such loan or loans, whether the loan or loans are to
be with or without recourse against the borrower, the terms on which the loan is
to be repaid and the conditions, if any, under which the loan or loans may be
forgiven.

     

    (g)
Awards to Comply with Section 162(m). The Committee may (but is not required to)
grant an Award pursuant to the Plan to a Participant who, in the year of grant,
may be a "covered employee," within the meaning of Section 162(m) of the Code,
which is intended to qualify as "performance-based compensation" under Section
162(m) of the Code (a "Performance-Based Award"). The right to receive a
Performance-Based Award, other than Options and SARs granted at not less than
Fair Market Value, shall be conditional upon the achievement of performance
goals established by the Committee in writing at the time such Performance-Based
Award is granted. Such performance goals, which may vary from Participant to
Participant and Performance-Based Award to Performance-Based Award, shall be
based upon the attainment by the Company or any Subsidiary, division or
department of specific amounts of, or increases in, one or more of the
following, any of which may be measured either in absolute terms or as compared
to another company or companies: revenues, earnings, cash flow, net worth, book
value, stockholders' equity, financial return ratios, market performance or
total stockholder return, and/or the completion of certain business or capital
transactions. Before any compensation pursuant to a Performance-Based Award is
paid, the Committee shall certify in writing that the performance goals
applicable to the Performance-Based Award were in fact
satisfied.


    
      
         


      

      
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    The
maximum amount which may be granted as Performance-Based Awards to any
Participant in any calendar year shall not exceed (i) Stock-Based Awards for
100,000 shares of Stock (whether payable in cash or stock), subject to
adjustment as provided in Section 8(a) hereof, (ii) 100,000 Performance Units,
(iii) a Tax Bonus payable with respect to the Stock-Based Awards described in
clause (i) and Performance Units described in clause (ii), and (iv) cash
payments (other than Tax Bonuses) of $1,000,000.

     

    (h)
Change of Control. In the event of a Change of Control of the Company, all
Awards granted under the Plan (including Performance-Based Awards) that are
still outstanding and not yet vested or exercisable or which are subject to
restrictions shall become immediately 100% vested in each Participant or shall
be free of any restrictions, as of the first date that the definition of Change
of Control has been fulfilled, and shall be exercisable for the remaining
duration of the Award. All Awards that are exercisable as of the effective date
of the Change of Control will remain exercisable for the remaining duration of
the Award.

     

    Section
8. Adjustments upon Changes in Capitalization; Acceleration in Certain
Events

     

    (a) In
the event that the Committee shall determine that any stock dividend,
recapitalization, forward split or Reverse Stock Split, reorganization, merger,
consolidation, spin-off, combination, repurchase or share exchange, or other
similar corporate transaction or event, affects the Stock or the book value of
the Company such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of Participants under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of shares of Stock which may thereafter be issued in connection
with Awards, (ii) the number and kind of shares of Stock issuable in respect of
outstanding Awards, (iii) the aggregate number and kind of shares of Stock
available under the Plan, (iv) the number of Performance Units which may
thereafter be granted and the book value of the Company with respect to
outstanding Performance Units, and (v) the exercise price, grant price, or
purchase price relating to any Award or, if deemed appropriate, make provision
for a cash payment with respect to any outstanding Award; provided, however, in
each case, that no adjustment shall be made which would cause the Plan to
violate Section 422(b)(1) of the Code with respect to ISOs or would adversely
affect the status of a Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.

     

    (b) In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding paragraph) affecting the Company or any Subsidiary, or in response to
changes in applicable laws, regulations, or accounting principles.
Notwithstanding the foregoing, no adjustment shall be made in any outstanding
Performance-Based Awards to the extent that such adjustment would adversely
affect the status of that Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.


    
      
         


      

      
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    Section
9. General Provisions

     

    (a)
Changes to the Plan and Awards. The Board of Directors of the Company may amend,
alter, suspend, discontinue, or terminate the Plan or the Committee's authority
to grant Awards under the Plan without the consent of the Company's stockholders
or Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company's stockholders within one year after such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the Stock
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to the stockholders for
approval; provided, however, that without the consent of an affected
Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted and any Award Agreement relating
thereto. The Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue, or terminate, any Award theretofore granted and any
Award Agreement relating thereto; provided, however, that without the consent of
an affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially and adversely affect
the rights of such Participant under such Award.

     

    The
foregoing notwithstanding, any performance condition specified in connection
with an Award shall not be deemed a fixed contractual term, but shall remain
subject to adjustment by the Committee, in its discretion at any time in view of
the Committee's assessment of the Company's strategy, performance of comparable
companies, and other circumstances, except to the extent that any such
adjustment to a performance condition would adversely affect the status of a
Performance-Based Award as "performance-based compensation" under Section 162(m)
of the Code.

     

    Notwithstanding
the foregoing, if the Plan is ratified by the stockholders of the Company at the
Company's 2006 Annual Meeting of Stockholders, then unless approved by the
stockholders of the Company, no amendment will: (i) change the class of persons
eligible to receive Awards; (ii) materially increase the benefits accruing to
Participants under the Plan, or (iii) increase the number of shares of Stock or
the number of Performance Units subject to the Plan.

     

    (b) No
Right to Award or Employment. No employee or other person shall have any claim
or right to receive an Award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any Subsidiary.

    


    (c)
Taxes. The Company or any Subsidiary is authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Stock or any payroll or other payment to a Participant amounts
of withholding and other taxes due in connection with any transaction involving
an Award, and to take such other action as the Committee may deem advisable to
enable the Company and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award. This
authority shall include authority to withhold or receive Stock or other property
and to make cash payments in respect thereof in satisfaction of a Participant's
tax obligations.


    
      
         


      

      
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