Exhibit 4.1 Stock Incentive Plan


    
      
        

      

    

                                             

    EXHIBIT
      4.1

     

     

    


     

       
      COMMAND SECURITY CORPORATION

     

    
      	 	
              2005
                STOCK INCENTIVE PLAN

            


    

     ARTICLE
      I

     General

    


    1.1
      Purpose

    


    The
      Command Security Corporation 2005 Stock Incentive Plan (the "Plan")
      is designed to provide certain key persons, on whose initiative and

    efforts
      the successful conduct of the business of Command Security Corporation
(the
      "Company") depends, and who are responsible for the management, growth
      and

    protection
      of the business of the Company, with incentives to: (a) enter into and
      remain in the service of the Company or a Company subsidiary, (b) acquire
      a

    proprietary
      interest in the success of the Company, (c) maximize their performance
      and (d) enhance the long-term performance of the Company (whether

    directly
      or indirectly through enhancing the long-term performance of a Company
subsidiary
      ). The Plan is also designed to provide certain "performance-based"

    compensation
      to these key persons.

    


    1.2
      Administration

    


    (a)
      Administration by Committee; Constitution of Committee. The Plan shall
      be
      administered by the compensation committee of the Board of

    Directors
      of the Company (the "Board") or such other committee or subcommittee
      as the Board may designate or as shall be formed by the

    abstention
      or recusal of a non-Qualified Member (as defined below) of
      such
      committee (the "Committee"). The members of the Committee

    shall
      be
      appointed by, and serve at the pleasure of, the Board. While
      it
      is intended that at all times that the Committee acts in

    connection
      with the Plan, the Committee shall consist solely of Qualified
      Members, the number of whom shall not be less than two,

    the
      fact
      that the Committee is not so comprised will not invalidate any
      grant
      hereunder that otherwise satisfies the terms of the Plan.

    A
      "Qualified Member" is both a "non-employee director" within the meaning
      of Rule 16b-3 ("Rule 16b-3") promulgated under the

    Securities
      Exchange Act of 1934 (the "1934 Act") and an "outside director"
      within the meaning of section 162(m) of the Internal

    Revenue
      Code of 1986, as amended (the "Code"). If the Committee does not
      exist, or for any other reason determined by the Board, the

    Board
      may
      take any action under the Plan that would otherwise be the responsibility
      of the Committee.

    


      
       (b) Committee's
      Authority. The Committee shall have the authority (i) to exercise
      all of the powers granted to it under the Plan, (ii) to

    construe,
      interpret and implement the Plan and any Option Certificates
      executed pursuant to Section 2.1, (iii) to prescribe,

    amend
      and
      rescind rules and regulations relating to the Plan, including
      rules governing its own operations, (iv) to make all

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    determinations
      necessary or advisable in administering the Plan, (v) to
      correct any defect, supply any omission and reconcile any

    inconsistency
      in the Plan, and (vi) to amend the Plan to reflect changes
      in applicable law.

    


      
      (c) Committee
      Action; Delegation. Actions of the Committee shall be taken
      by
      the vote of a majority of its members. Any action may be

    taken
      by
      a written instrument signed by a majority of the Committee members,
      and action so taken shall be fully as effective as if it

    had
      been
      taken by a vote at a meeting. Notwithstanding the foregoing or
      any
      other provision of the Plan, the Committee or, pursuant to

    Section
      1.2(a), the Board, may delegate to one or more officers of the
      Company the authority to designate the individuals (other than

    such
      officer(s)), among those eligible to receive options pursuant to
      the
      terms of the Plan, who will receive options under the Plan

    and
      the
      size of each such option, to the fullest extent permitted under
      the
      New York Business Corporation Law (or any successor

    provision
      thereto).

    


      
      (d) Determinations Final. The determination of the Committee on all matters
      relating to the Plan or any Option Certificate shall be final,
      binding and conclusive.

    


      
      (e) Limit
      on
      Committee Members' Liability. No member of the Committee shall
      be
      liable for any action or determination made in good faith

    with
      respect to the Plan or any award thereunder.

    


       
      1.3 Persons Eligible for Awards

    


    The
      persons eligible to receive awards under the Plan are those officers,
      directors (whether or not they are employed by the Company), and

    executive,
      managerial, professional or administrative employees of, and consultants
      to, the Company and its subsidiaries (collectively, "key persons")

    as
      the
      Committee in its sole discretion shall select. No incentive stock option
may
      be
      granted to a person who is not an employee of the Company on the date
      of

    grant.

    


       
      1.4 Types of Awards Under Plan

    


    Awards
      may be made under the Plan in the form of (a) incentive stock options
      and (b) non-qualified stock options, as more fully set forth in
      Article

    II.
      The
      terms "award" and "option" mean either of the foregoing.

    


       
      1.5 Shares Available for Awards

    


       
      (a) Aggregate
      Number Available; Certificate Legends. The total number of shares
      of
      common stock of the Company ("Common Stock") with respect

    to
      which
      awards may be granted pursuant to the Plan shall not exceed the
      sum
      of 1,000,000 shares. Shares issued pursuant to the Plan may

    be
      authorized but unissued Common Stock, authorized and issued Common
      Stock held in the Company's treasury or Common Stock acquired

    by
      the
      Company for the purposes of the Plan. The Committee may direct
      that any stock certificate evidencing shares issued pursuant

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    to
      the
      Plan shall bear a legend setting forth such restrictions on transferability
      as may apply to such shares.

    


       
      (b) Adjustment
      Upon Changes in Common Stock. Upon certain changes in Common
      Stock, the number of shares of Common Stock available for

    issuance
      with respect to awards that may be granted under the Plan pursuant
      to Section 1.5(a), shall be adjusted pursuant to Section

    3.5(a).

    


      
      (c) Certain
      Shares to Become Available Again. Any shares of Common Stock that
      are
      subject to an award under the Plan and that remain unissued

    upon
      the
      cancellation or termination of such award for any reason whatsoever
      shall again become available for awards under the Plan.

    


      
      (d) Individual
      Limits. Except for the limits set forth in this Section 1.5(d)
      and in Section 2.2(e), no provision of this Plan shall be

    deemed
      to
      limit the number or value of shares with respect to which the
      Committee may make awards to any eligible person. Subject to

    adjustment
      as provided in Section 3.5(a), the total number of shares of
      Common
      Stock with respect to which awards may be granted to any

    one
      employee of the Company or a subsidiary during any one calendar year
      shall not exceed 500,000shares. Stock options granted and

    subsequently
      canceled or deemed to be canceled in a calendar year count
      against this limit even after their cancellation.

    


       
      1.6 Definitions of Certain Terms

    


      
      (a) The
      "Fair
      Market Value" of a share of Common Stock on any day shall be
      the
      closing price as reported for such day in The Wall Street

    Journal
      or, if no such price is reported for such day, the average of
      the
      high bid and low asked price of Common Stock as reported for

    such
      day.
      If no quotation is made for the applicable day, the Fair Market
      Value of a share of Common Stock
      on
      such day shall be determined in the manner set forth in the

    preceding
      sentence using quotations for the next preceding day for which
      there were quotations, provided that such quotations shall

    have
      been
      made within the ten (10) business days preceding the applicable
      day. Notwithstanding the foregoing, if deemed necessary

    or
      appropriate by the Committee, the Fair Market Value of a share of Common
      Stock on any day shall be determined by the Committee. In no

    event
      shall the Fair Market Value of any share of Common Stock be less
      than
      its par value.

    


    (b) The
      term "incentive stock option" means an option that is intended to
      qualify for special federal income tax treatment pursuant to

    sections
      421 and 422 of the Code as now constituted or subsequently amended,
      or pursuant to a successor provision of the Code, and which

    is
      so
      designated in the applicable Option Certificate. Any option that
      is
      not specifically designated as an incentive stock option

    shall
      under no circumstances be considered an incentive stock option.
      Any option that is not an incentive stock option is referred

    to
      herein
      as a "non-qualified stock option."

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     (c) A
      grantee shall be deemed to have a "termination of employment" upon (i)
      the
      date the grantee ceases to be employed by, or to provide

    consulting
      services for, the Company or any Company subsidiary, or any
      corporation (or any of its subsidiaries) which assumes the

    grantee's
      award in a transaction to which section 424(a) of the Code applies;
      or (ii) the date the grantee ceases to be a Board member,

    provided,
      however, that in the case of a grantee (x) who is, at the time
      of
      reference, both an employee or consultant and a Board

    member,
      or (y) who ceases to be engaged as an employee, consultant or
      Board
      member and immediately is engaged in another of such

    relationships
      with the Company or any Company subsidiary, the grantee
      shall be deemed to have a "termination of employment" upon

    the
      later
      of the dates determined pursuant to subparagraphs (i) and (ii)
      above. For purposes of clause (i) above, a grantee who

    continues
      his or her employment or consulting relationship with a Company
      subsidiary subsequent to its sale by the Company shall have

    a
      termination of employment upon the date of such sale. TheCommittee
      may in its discretion determine whether any leave of

    absence
      constitutes a termination of employment for purposes of the Plan
      and
      the impact, if any, of any such leave of absence on awards

    theretofore
      made under the Plan.

    


    (d)
      The
      terms
      "parent corporation" and "subsidiary corporation" shall have
      the
      meanings given them in sections 424(e) and (f) of the Code,

    respectively.

    


    (e)
      The
      term
      "employment" shall be deemed to mean an employee's employment
      with, or a consultant's provision of services to, the

    Company
      or any Company subsidiary and each Board member's service as a
      Board
      member.

    


    (f)
      The
      term "cause" in connection with a termination of employment by reason
      of
      a dismissal for cause shall mean:

    


    (i) to
      the extent that there is an employment, severance or other agreement
      governing the relationship between the grantee and the

    Company
      or a Company subsidiary, which agreement contains a definition
      of "cause," cause shall consist of those acts or

    omissions
      that would constitute "cause" under such agreement;

    and
      otherwise,

    


    (ii)
      the
      grantee's termination of employment by the Company or an affiliate
      on account of any one or more of the following:

    


    A.
      grantee's
      willful and intentional repeated failure or refusal, continuing
      after notice that specifically identifies the breach(es)

    complained
      of, to perform substantially his or her material duties, responsibilities
      and obligations (other than a failure resulting from

    grantee's
      incapacity due to physical or mental illness or other reasons beyond
      the control

    of
      grantee), and which failure or refusal results in demonstrable direct
and
      material injury to the Company;

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    B.
      any
      willful and intentional act or failure to act involving fraud, misrepresentation,
      theft, embezzlement, dishonesty or moral turpitude

    (collectively,
      "Fraud") which results in demonstrable direct and material
      injury to the Company; and

    


    C.
      conviction
      of (or a plea of nolo contendere to) an offense which is a felony
      in
      the jurisdiction involved or which is a misdemeanor in the

    jurisdiction
      involved but which involves Fraud.

    


    For
      purposes of determining whether cause exists, no act, or failure to act,
      on
      grantee's part shall be deemed "willful" or "intentional" unless
      done,

    or
      omitted to be done, by grantee in bad faith, and without reasonable belief
      that
      his
      or her action or omission was in the best interests of the Company.

    


    Any
      rights the Company may have hereunder in respect of the events giving
rise
      to
      cause shall be in addition to the rights the Company may have under
      any

    other
      agreement with a grantee or at law or in equity. Any determination of
whether
      a
      grantee's employment is (or is deemed to have been) terminated for

    cause
      for
      purposes of the Plan or any award hereunder shall be made by the Committee
      in its discretion. If, subsequent to a grantee's voluntary
      termination

    of
      employment or involuntary termination of employment without cause, it is
discovered
      that the grantee's employment could have been terminated for cause,

    the
      Committee may deem such grantee's employment to have been terminated for
cause.
      A
      grantee's termination of employment for cause shall be effective as
      of

    the
      date
      of the occurrence of the event giving rise to cause, regardless of when
the
      determination of cause is made.

    


    ARTICLE
      II

    Awards
      Under the Plan

    


    2.1
      Certificates Evidencing Options

    


    Each
      award granted under the Plan shall be evidenced by a written certificate
      ("Option Certificate") which shall contain such provisions as the

    Committee
      may in its sole discretion deem necessary or desirable. By accepting
an
      award
      pursuant to the Plan, a grantee thereby agrees that the award shall
      be

    subject
      to all of the terms and provisions of the Plan and the applicable Option
Certificate.

    


    2.2
      Grant
      of Stock Options

    


    (a)
      Stock
      Option Grants. The Committee may grant incentive stock options and
      non-qualified stock options (collectively, "options") to

    purchase
      shares of Common Stock from the Company, to such key persons,
      and in such amounts and subject to such vesting and

    forfeiture
      provisions and other terms and conditions, as the Committee
      shall determine in its sole discretion, subject to the

    provisions
      of the Plan.

    


    (b)
      Option
      Exercise Price. Each Option Certificate shall set forth the amount
      (the "option exercise price") payable by the grantee to the

    Company
      upon exercise of the option evidenced thereby. The option exercise
      price per share shall be determined by the Committee in its

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    sole
      discretion; provided, however, that the option exercise price shall
      be
      at least 100% of the Fair Market Value of a share of Common

    Stock
      on
      the date the option is granted, and provided further that in
      no
      event shall the option exercise price be less than the par

    value
      of
      a share of Common Stock.

    


    (c)
      Exercise
      Period. Each Option Certificate shall set forth the periods during
      which the option evidenced thereby shall be exercisable,

    whether
      in whole or in part. Such periods shall be determined by the Committee
      in its sole discretion; provided, however, that no stock

    option
      shall
      be
      exercisable more than 10 years after the date of grant. (See
      the
      default exercise period provided for under Sections 2.3(a)

    and
      (b).)

    


    (d)
      Reload
      Options. The Committee may in its sole discretion include in any
      Option Certificate with respect to an option (the "original

    option")
      a provision that an additional option (the "reload option") shall
      be
      granted to the grantee if, pursuant to Section 2.3(e)(ii),

    the
      grantee delivers shares of Common Stock in partial or full payment
      of the exercise price of the original option. The reload

    option
      shall be for a number of shares of Common Stock equal to the number
      thus delivered, shall have an exercise price equal to the

    Fair
      Market Value of a share of Common Stock on the date of exercise of
      the
      original option, and shall have an expiration date no later

    than
      the
      expiration date of the original option. In the event that a Option
      Certificate provides for the grant of a reload option, such

    Option
      Certificate shall also provide that any shares that are delivered
      pursuant to Section 2.3(e)(ii) in payment of such exercise

    price
      shall have been held for at least six months (or such other period
      as
      the Committee may from time to time determine).

    


    (e)
      Incentive
      Stock Option Limitation: $100,000 Limitation. To the extent
      that the aggregate Fair Market Value (determined as of the

    time
      the
      option is granted) of the stock with respect to which incentive
      stock options are first exercisable by any employee during

    any
      calendar year shall exceed $100,000, or such other amount as may be
      specified from time to time under section 422 of the Code, such

    options
      shall be treated as non-qualified stock options.

    


    (f)
      Incentive
      Stock Option Limitation: 10% Owners. Notwithstanding the provisions
      of paragraphs (d) and (e) of this Section 2.2, an

    incentive
      stock option may not be granted under the Plan to an individual
      who, at the time the option is granted, owns stock

    possessing
      more than 10% of the total combined voting power of all classes
      of stock of his or her employer corporation or of its parent

    or
      subsidiary corporations (as such ownership may be determined for purposes
      of section 422(b)(6) of the Code) unless (i) at the time

    such
      incentive stock option is granted the option exercise price is at
      least
      110% of the Fair Market Value of the shares subject thereto

    and
      (ii)
      the incentive stock option by its terms is not exercisable after
      the
      expiration of 5 years from the date it is granted.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3
      Exercise of Options

    


    Subject
      to the other provisions of this Article II, each option granted under
      the
      Plan shall be exercisable as follows:

    


    (a)
      Beginning
      of Exercise Period. Unless the applicable Option Certificate
      otherwise provides, an option shall become exercisable

    with
      respect to one quarter (1/4) of the shares subject to such option
      on
      each of the first four anniversaries of the date of grant.

    


    (b)
      End
      of
      Exercise Period. Unless the applicable Option Certificate otherwise
      provides, once an installment becomes exercisable, it

    shall
      remain exercisable until the earlier of (i) the tenth anniversary
      of the date of grant of the award or (ii) the expiration,
      cancellation or termination of the award.

    


    (c)
      Timing
      and Extent of Exercise. Unless the applicable Option Certificate
      otherwise provides, an option may be exercised from time

    to
      time
      as to all or part of the shares as to which such award is then
      exercisable.

    


    (d)
      Notice
      of
      Exercise. An option shall be exercised by the filing of a written
      notice with the Company or the Company's designated exchange

    agent
      (the "exchange agent"), on such form and in such manner as the Committee
      shall in its sole discretion prescribe.

    


    (e)
      Payment
      of Exercise Price. Any written notice of exercise of an option
      shall be accompanied by payment for the shares being

    purchased.
      Such payment shall be made: (i) by certified or official bank
      check (or the equivalent thereof acceptable to the Company or

    its
      exchange agent) for the full option exercise price; or (ii) with the
      consent of the Committee, by delivery of shares of Common Stock

    owned
      by
      the grantee (whether acquired by option exercise or otherwise,
      provided that if such shares were acquired pursuant to

    the
      exercise of a stock option, they were acquired at least six months
      prior to the option exercise date or such other period as the

    Committee
      may from time to time determine) having a Fair Market Value
      (determined as of the exercise date) equal to all or part of

    the
      option exercise price and a certified or official bank check (or the
      equivalent thereof acceptable to the Company or its exchange

    agent)
      for any remaining portion of the full option exercise price; or
      (iii)
      at the discretion of the Committee and to the extent

    permitted
      by law, by such other provision, consistent with the terms of
      the
      Plan, as the Committee may from time to time prescribe.

    


    (f)
      Delivery
      of Certificates Upon Exercise. Promptly after receiving payment
      of the full option exercise price, the Company or its

    exchange
      agent shall, subject to the provisions of Section 3.2, deliver
      to the grantee or to such other person as may then have the

    right
      to
      exercise the award, certificate or certificates for the shares
      of
      Common Stock for which the award has been exercised. If

    the
      method of payment employed upon option exercise so requires, and if
      applicable law permits, a grantee may direct the Company, or its

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    exchange
      agent, as the case may be, to deliver the stock certificate(s)
      to the grantee's stockbroker.

    


    (g)
      No
      Shareholder Rights. No grantee of an option (or other person having
      the right to exercise such award) shall have any of the

    rights
      of
      a shareholder of the Company with respect to shares subject
      to such award until the issuance of a stock certificate to

    such
      person for such shares. Except as otherwise provided in Section 1.5(b),
      no adjustment shall be made for dividends, distributions or

    other
      rights (whether ordinary or extraordinary, and whether in cash,
      securities or other property) for which the record date is

    prior
      to
      the date such stock certificate is issued.

    


    2.4 
      Termination of Employment; Death Subsequent to a Termination of Employment

    


    (a)
      General
      Rule. Except to the extent otherwise provided in paragraphs (b),
      (c)
      or (d) of this Section 2.4, a grantee who incurs a

    termination
      of employment may exercise any outstanding option on the following
      terms and conditions: (i) exercise may be made only to the

    extent
      that the grantee was entitled to exercise the award on the termination
      of employment date; and (ii) exercise must occur within

    three
      months after termination of employment but in no event after the
      original expiration date of the award.

    


    (b)
      Dismissal
      for Cause; Resignation. If a grantee incurs a termination of
      employment as the result of a dismissal for cause, all options

    not
      theretofore exercised shall terminate upon the commencement of business
      on the date of the grantee's termination of employment.

    


    (c)
      Disability.
      If a grantee incurs a termination of employment by reason
      of
      a disability (as defined below), then any outstanding

    option
      shall be exercisable on the following terms and conditions: (i)
      exercise may be made only to the extent that the grantee was

    entitled
      to exercise the award on the termination of employment date;
      and
      (ii) exercise must occur by the earlier of (A) the first

    anniversary
      of the grantee's termination of employment, or (B) the original
      expiration date of the award. For this purpose "disability"

    shall
      mean: (x) except in connection with an incentive stock option, any
      physical or mental condition that would qualify a grantee for a

    disability
      benefit under the long-term disability plan maintained by the
      Company or, if there is no such plan, a physical or mental

    condition
      that prevents the grantee from performing the essential functions
      of the grantee's position (with or without reasonable

    accommodation)
      for a period of six consecutive months and (y) in connection
      with an incentive stock option, a disability described in

    section
      422(c)(6) of the Code. The existence of a disability shall be
      determined by the Committee in its absolute discretion.

    


    (d)
      Death.

    


    (i)
      Termination
      of Employment as a Result of Grantee's Death. If a grantee
      incurs a termination of employment as the result of

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    death,
      then any outstanding option shall be exercisable on the following
      terms and conditions: (A) exercise may be made only

    to
      the
      extent that the grantee was entitled to exercise the award
      on
      the date of death; and (B) exercise must occur by the

    earlier
      of (1) the first anniversary of the grantee's death, or
      (2)
      the original expiration date of the award.

    


    (ii)
      Death
      Subsequent to a Termination of Employment. If a grantee dies
      subsequent to incurring a termination of employment but

    prior
      to
      the expiration of the exercise period with respect to a
      stock
      option (as provided by paragraphs (a) or (c) above),

    then
      the
      award shall remain exercisable until the earlier to occur
      of
      (A) the first anniversary of the grantee's death or

    (B)
      the
      original expiration date of the award.

    


    (iii)
      Restrictions
      on Exercise Following Death. Any such exercise of an
      award
      following a grantee's death shall be made only by the

    grantee's
      executor or administrator or other duly appointed representative
      reasonably acceptable to the Committee, unless

    the
      grantee's will specifically disposes of such award, in which
      case such exercise shall be made only by the recipient

    of
      such
      specific disposition. If a grantee's personal representative
      or the recipient of a specific disposition

    under
      the
      grantee's will shall be entitled to exercise any award
      pursuant to the preceding sentence, such representative

    or
      recipient shall be bound by all the terms and conditions of the
      Plan
      and the applicable Option Certificate which would

    have
      applied to the grantee including, without limitation, the provisions
      of Sections 3.2.

    


    (e)
      Special
      Rules for Incentive Stock Options. No option that remains exercisable
      for more than three months following a grantee's

    termination
      of employment for any reason other than death (including death
      within three months after the termination of employment or

    within
      one year after a termination due to disability) or disability,
      or for more than one year following a grantee's

    termination
      of employment as the result of disability, may be treated
      as an incentive stock option.

    


    (f)
      Committee Discretion. The Committee may waive or modify the application
      of the foregoing provisions of this Section 2.4.

    


    2.5
      Transferability of Options

    


    Except
      as
      otherwise provided in an applicable Option Certificate evidencing
      an option, during the lifetime of a grantee, each option granted to
      a

    grantee
      shall be exercisable only by the grantee and no option shall be assignable
      or transferable otherwise than by will or by the laws of descent
      and

    distribution.
      The Committee may, in any applicable Option Certificate evidencing an
      option
      (other than an incentive stock option to the extent inconsistent
      with

    the
      requirements of section 422 of the Code applicable to incentive stock
options),
      permit a grantee to transfer all or some of the options to (A) the

    grantee's
      spouse, children or grandchildren ("Immediate Family Members"), (B) a


     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    trust
      or
      trusts for the exclusive benefit of such Immediate Family Members,
      or

    (C)
      other
      parties approved by the Committee in its absolute discretion. Following
      any such transfer, any transferred options shall continue to be

    subject
      to the same terms and conditions as were applicable immediately prior to
the
      transfer.

    


    2.6
      Right
      of Recapture

    


    If
      at any
      time after the date on which a grantee has been granted or become
      vested in an award pursuant to the achievement of performance goals ,
      the

    Committee
      determines that the earlier determination as to the achievement
      of the performance goals was based on incorrect data and that in

    fact
      the
      performance goals had not been achieved or had been achieved to a lesser
      extent than originally determined, then (i) any award or portion of
      an

    award
      granted based on such incorrect determination shall be forfeited, and (ii)
      any
      award
      or portion of an award that became vested based on such incorrect

    determination
      shall be deemed to be not vested.

    


    ARTICLE
      III

    Miscellaneous

    


    3.1
      Amendment of the Plan; Modification of Awards

    


    (a)
      Amendment
      of the Plan. Subject to Section 3.1(b), the Board may from time
      to
      time suspend, discontinue, revise or amend the Plan in any

    respect
      whatsoever, except that no such amendment shall materially impair
      any rights or materially increase any obligations under any

    award
      theretofore made under the Plan without the consent of the grantee
      (or, upon the grantee's death, the person having the right

    to
      exercise the award). For purposes of this Section 3.1, any action of
      the
      Board or the Committee that in any way alters or affects the

    tax
      treatment of any award or that in the sole discretion of the Board
      is
      necessary to prevent an award from being subject to tax

    under
      Section 409A of the Code shall not be considered to materially impair
      any rights of any grantee.

    


    (b)
      Shareholder
      Approval Requirement. Shareholder approval shall be required
      with respect to any amendment to the Plan (i) which

    increases
      the aggregate number of shares which may be issued pursuant
      to incentive stock options or changes the class of

    employees
      eligible to receive such options, (ii) which otherwise materially
      increases the benefits under the Plan, (iii) to the

    extent
      required by stock exchange rules, or (iv) to the extent the Board
      determines that shareholder approval is necessary to enable

    awards
      under the Plan to comply with Sections 422 or 162(m) of the Code.

    


    (c) Modification
      of Awards. The Committee may cancel any award under the Plan.
      The
      Committee also may amend any outstanding Option

    Certificate,
      including, without limitation, by amendment which would:
      (i) accelerate the time or times at which the award becomes

    vested
      and exercisable; (ii) waive or amend any goals, restrictions or
      conditions set forth in the Option Certificate; or (iii) waive or

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    amend
      the
      operation of Section 2.4 with respect to the termination of
      the
      award upon termination of employment, provided however, that

    no
      such
      amendment may lower the exercise price of an outstanding option.
      However, any such cancellation or amendment (other than an

    amendment
      pursuant to Section 3.5) that materially impairs the rights
      or
      materially increases the obligations of a grantee under an

    outstanding
      award shall be made only with the consent of the grantee (or,
      upon
      the grantee's death, the person having the right to

    exercise
      the award). Under no circumstances may the Committee modify an
      award
      in a manner that would cause the award to be subject to tax

    under
      Section 409A of the Code.

    


    3.2
      Consent Requirement

    


    (a)
      No
      Plan
      Action without Required Consent. If the Committee shall at any
      time
      determine that any Consent (as hereinafter defined) is

    necessary
      or desirable as a condition of, or in connection with, the granting
      of any award under the Plan, the issuance or purchase of

    shares
      or
      other rights thereunder, or the taking of any other action thereunder
      (each such action being hereinafter referred to as a

    "Plan
      Action"), then such Plan Action shall not be taken, in whole or
      in
      part, unless and until such Consent shall have been effected

    or
      obtained to the full satisfaction of the Committee.

    


    (b)
      Consent
      Defined. The term "Consent" as used herein with respect to any
      Plan
      Action means (i) any and all listings, registrations or

    qualifications
      in respect thereof upon any securities exchange or under
      any
      federal, state or local law, rule or regulation, (ii) any

    and
      all
      written agreements and representations by the grantee with respect
      to the disposition of shares, or

    with
      respect to any other matter, which the Committee shall deem necessary
      or desirable to comply with the terms of any such listing,

    registration
      or qualification or to obtain an exemption from the requirement
      that any such listing, qualification or registration be

    made
      and
      (iii) any and all consents, clearances and approvals in respect
      of a Plan Action by any governmental or other regulatory bodies.

    


    3.3
      Requirement of Notification Upon Disqualifying Disposition Under Section
      421(b) of the Code

    


    Each
      grantee of an incentive stock option shall notify the Company of any
disposition
      of shares of Common Stock issued pursuant to the exercise of such

    option
      under the circumstances described in section 421(b) of the Code (relating
to
      certain disqualifying dispositions), within 10 days of such
      disposition.

    


    3.4
      Withholding Taxes

    


    The
      Company shall be entitled to require as a condition of delivery of shares
      of
      Common Stock upon exercise of an option that the grantee remit to
      the

    Company
      an amount sufficient, in the opinion of the Company, to satisfy all federal,
      state and other governmental tax withholding requirements related

    thereto.
      With the approval of the Committee, which the Committee shall have sole


     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    discretion
      whether or not to give, the grantee may satisfy the foregoing condition
      by electing to have the Company withhold from delivery shares having a
value
      equal to the amount of tax to be withheld. Such shares shall be valued at
their
      Fair Market Value as of the date on which the amount of tax to be withheld
      is
      determined. Fractional share amounts shall be settled in cash. Such a
withholding
      election may be made with respect to all or any portion of the shares
      to
      be delivered pursuant to an award.

    


    3.5
      Adjustment Upon Changes in Common Stock

    


    (a)
      Shares
      Available for Options. In the event of any change in the number
      of
      shares of Common Stock outstanding by reason of any stock

    dividend
      or split, reverse stock split, recapitalization, merger, consolidation,
      combination or exchange of shares or similar

    corporate
      change, the maximum number of shares of Common Stock with respect
      to which the Committee may grant awards under Article II

    hereof,
      as described in Section 1.5(a), and the individual annual limit
      described in Section 1.5(d), shall be appropriately adjusted

    by
      the
      Committee. In the event of any change in the number of shares of
      Common
      Stock outstanding by reason of any other event or

    transaction,
      the Committee may, but need not, make such adjustments in
      the
      number and class of shares of Common Stock with respect to

    which
      awards: (i) may be granted under Article II hereof and (ii) granted
      to any one employee of the Company or a subsidiary during

    any
      one
      calendar year, in each case as the Committee may deem appropriate.

    


    (b)
      Outstanding
      Options -- Increase or Decrease in Issued Shares Without Consideration.
      Subject to any required action by the shareholders of

    the
      Company, in the event of any increase or decrease in the number of
      issued
      shares of Common Stock resulting from a subdivision or

    consolidation
      of shares of Common Stock or the payment of a stock dividend
      (but only on the shares of Common Stock), or any other

    increase
      or decrease in the number of such shares effected without receipt
      of consideration by the Company, the Committee shall

    proportionally
      adjust the number of shares of Common Stock subject to
      each
      outstanding option and the exercise price-per-share of

    Common
      Stock of each such option.

    


    (c)
      Outstanding
      Options -- Certain Mergers. Subject to any required action
      by
      the shareholders of the Company, in the event that the

    Company
      shall be the surviving corporation in any merger or consolidation
      (except a merger or consolidation as a result of which

    the
      holders of shares of Common Stock receive securities of another corporation),
      each option outstanding on the date of such merger or

    consolidation
      shall pertain to and apply to the securities which a holder
      of
      the number of shares of Common Stock subject to such

    option
      would have received in such merger or consolidation.

    


    (d)
      Outstanding
      Options -- Certain Other Transactions. In the event of (i)
      a
      dissolution or liquidation of the Company, (ii) a sale of all

    or
      substantially all of the Company's assets, (iii) a merger or consolidation
      involving the Company in which the Company is not the

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    surviving
      corporation or (iv) a merger or consolidation involving the
      Company in which the Company is the surviving corporation but

    the
      holders of shares of Common Stock receive securities of another corporation
      and/or other property, including cash, the Committee

    shall,
      in
      its absolute discretion, have the power to:

    


    A.
      cancel,
      effective immediately prior to the occurrence of such event,
      each option outstanding immediately prior to such event

    (whether
      or not then exercisable), and, in full consideration of such
      cancellation, pay to the grantee to whom such option was

    granted
      an amount in cash, for each share of Common Stock subject
      to such option equal to the excess of (x) the value, as

    determined
      by the Committee in its absolute discretion, of the property
      (including cash) received by the holder of a share of

    Common
      Stock as a result of such event over (y) the exercise price
      of
      such option; or

    


    B.
      provide
      for the exchange of each option outstanding immediately prior
      to
      such event (whether or not then exercisable) for an

    option
      on
      some or all of the property which a holder of the number
      of
      shares of Common Stock subject to such option would

    have
      received and, incident thereto, make an equitable adjustment
      as determined by the Committee in its absolute

    discretion
      in the exercise price of the option, or the number of shares
      or
      amount of property subject to the option or, if

    appropriate,
      provide for a cash payment to the grantee to whom such
      option was granted in partial consideration for the

    exchange
      of the option.

    


    (e)
      Outstanding
      Options -- Other Changes. In the event of any change in the
      capitalization of the Company or a corporate change other than

    those
      specifically referred to in Sections 3.5(b), (c) or (d) hereof,
      the Committee may, in its absolute discretion, make such

    adjustments
      in the number and class of shares subject to options outstanding
      on the date on which such change occurs and in the

    per-share
      exercise price of each such option as the Committee may consider
      appropriate to prevent dilution or enlargement of rights.

    In
      addition, if and to the extent the Committee determines it is appropriate,
      the Committee may elect to cancel each option

    outstanding
      immediately prior to such event (whether or not then exercisable),
      and, in full consideration of such cancellation, pay

    to
      the
      grantee to whom such option was granted an amount in cash, for
      each
      share of Common Stock subject to such option equal to the

    excess
      of
      (i) the Fair Market Value of Common Stock on the date of such
      cancellation over (ii) the exercise price of such option.

    


    (f)
      No
      Other
      Rights. Except as expressly provided in the Plan, no grantee
      shall have any rights by reason of any subdivision or

    consolidation
      of shares of stock of any class, the payment of any dividend,
      any increase or decrease in the number of shares of stock

    of
      any
      class or any dissolution, liquidation, merger or consolidation
      of the Company or any other corporation. Except as

    expressly
      provided in the Plan, no issuance by the Company of shares

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    of
      stock
      of any class, or securities convertible into shares of stock
      of
      any class, shall affect, and no adjustment by reason thereof
      shall be made with respect to, the number of shares of Common
      Stock subject to an award or the exercise price of any option.

    


    3.6
      Limitations Imposed by Section 162(m)

    


    Notwithstanding
      any other provision hereunder, if and to the extent that the
      Committee determines the Company's federal tax deduction in respect of
      an

    award
      may
      be limited as a result of section 162(m) of the Code, the Committee may
      take
      the following actions: The Committee may delay the exercise of such

    options
      and, in lieu of such exercise, the Committee shall credit the Fair Market
      Value of the Common Stock that would be payable to the grantee upon
      such

    exercise
      to a book account. The Committee may credit additional amounts to such
book
      account as it may determine in its sole discretion. The amounts credited
      to

    any
      such
      book account shall be paid to the grantee on the date that is six months
      after the grantee's termination of employment. Any book account
      created

    hereunder
      shall represent only an unfunded, unsecured promise by the Company
      to pay the amount credited thereto to the grantee in the

    future.
      The amount credited to any such book account shall not be transferable
      by the grantee other than by will or laws of descent and
      distribution.

    


    3.7
      Right
      of Discharge Reserved

    


    Nothing
      in the Plan or in any Option Certificate shall confer upon any grantee
      the right to continue employment with the Company or a subsidiary of
      the

    Company
      or affect any right which the Company or a subsidiary of the Company may
have
      to
      terminate such employment.

    


    3.8
      Nature of Payments

    


    (a)
      Consideration
      for Services Performed. Any and all grants of awards and
      issuances of shares of Common Stock under the Plan shall be in

    consideration
      of services performed for the Company by the grantee.

    


    (b)
      Not
      Taken
      into Account for Benefits. All such grants and issuances shall
      constitute a special incentive payment to the grantee and

    shall
      not
      be taken into account in computing the amount of salary or compensation
      of the grantee for the purpose of determining any

    benefits
      under any pension, retirement, profit-sharing, bonus, life insurance
      or other benefit plan of the Company or under any

    agreement
      between the Company and the grantee, unless such plan or agreement
      specifically otherwise provides.

    


    3.9
      Non-Uniform Determinations

    


    The
      Committee's determinations under the Plan need not be uniform and may
be
      made
      by it selectively among persons who receive, or who are eligible to

    receive,
      awards under the Plan (whether or not such persons are similarly situated).
      Without limiting the generality of the foregoing, the Committee
      shall

    be
      entitled, among other things, to make non-uniform and selective 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    determinations,
      and to enter into non-uniform and selective Option Certificates, as
      to (a)
      the persons to receive awards under the Plan, (b) the terms and provisions
      of awards under the Plan, and (c) the treatment of leaves of absence
pursuant
      to Section 1.6(c).

    


    3.10
      Other Payments or Awards

    


    Nothing
      contained in the Plan shall be deemed in any way to limit or restrict
      the Company from making any award or payment to any person under
      any

    other
      plan, arrangement or understanding, whether now existing or hereafter
      ineffect.

    


    3.11
      Headings

    


    Any
      section, subsection, paragraph or other subdivision headings contained
herein
      are for the purpose of convenience only and are not intended to
      expand,

    limit
      or
      otherwise define the contents of such subdivisions.

    


    3.12
      Effective Date and Term of Plan

    


    (a)
      Adoption;
      Shareholder Approval. The Plan was adopted by the Board as of
      July
      29, 2005, subject to approval by the Company's shareholders.

    All
      awards under the Plan prior to such shareholder approval are subject
      in their entirety to such approval. If such approval is not

    obtained
      prior to the first anniversary of the date of adoption of the
      Plan,
      the Plan and all awards thereunder shall terminate on that date.

    


    (b)Termination
      of Plan. Unless sooner terminated by the Board or pursuant
      to paragraph (a) above, the Plan shall terminate on the

    tenth
      anniversary of the adoption of the Plan by the Board, and no such
      options shall thereafter be granted under the Plan. All options

    granted
      under the Plan prior to the termination of the Plan shall remain
      in
      effect until such options

    have
      been
      satisfied or terminated in accordance with the terms and provisions
      of the Plan and the applicable Option Certificates.

    


    3.13
      Restriction on Issuance of Stock Pursuant to Awards

    


    The
      Company shall not permit any shares of Common Stock to be issued pursuant
      to Awards granted under the Plan unless such shares of Common Stock
      are

    fully
      paid and non-assessable, within the meaning of the New York Business
Corporation
      Law.

    


    3.14
      Deferred Compensation

    


    The
      Plan
      is intended to comply with the requirements of Section 409A of the
      Code
      so as not to be subject to tax under Section 409A, and shall be

    interpreted
      accordingly. After final guidance is issued by the Internal Revenue Service
      with respect to Section 409A, the Board will amend the Plan as
      necessary

    to
      ensure
      compliance with Section 409A.

    


    3.15
      Governing Law

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Except
      to
      the extent preempted by any applicable federal law, the Plan will
      be
      construed and administered in accordance with the laws of the State
      of

    New
      York,
      without giving effect to principles of conflict of
      laws.