ex10_1.htm


    Capital
City Energy Group, Inc.

     

    2008
Incentive Plan

     

    


     

    Effective
March 11, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Article
      2. Definitions

              	
                5

              
	
                Article
      3. Administration

              	
                12

              
	
                Article
      4. Shares Subject to this Plan and Maximum Awards

              	
                13

              
	
                Article
      5. Eligibility and Participation

              	
                14

              
	
                Article
      6. Stock Options

              	
                14

              
	
                Article
      7. Stock Appreciation Rights

              	
                16

              
	
                Article
      8. Restricted Stock and Restricted Stock Units

              	
                17

              
	
                Article
      9. Performance Units/Performance Shares

              	
                19

              
	
                Article
      10. Cash-Based Awards and Other Stock-Based Awards

              	
                19

              
	
                Article
      11. Transferability of Awards

              	
                20

              
	
                Article
      12. Performance Measures

              	
                21

              
	
                Article
      13. Dividend Equivalents

              	
                22

              
	
                Article
      14. Beneficiary Designation

              	
                22

              
	
                Article
      15. Rights of Participants

              	
                22

              
	
                Article
      16. Change of Control

              	
                23

              
	
                Article
      17. Amendment, Modification, Suspension, and Termination

              	
                24

              
	
                Article
      18. Withholding

              	
                25

              
	
                Article
      19. Successors

              	
                25

              
	
                Article
      20. General Provisions

              	
                25

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      Capital
City Energy Group, Inc.

      2008
Incentive Plan


       

      Article
1. Establishment, Purpose, and Duration

       

      1.1          Establishment. Capital City
Energy Group, Inc., an Nevada corporation (hereinafter referred to as the “Company”), establishes an
incentive compensation plan to be known as the Capital City Energy Group, Inc.
2008 Incentive Plan
(hereinafter referred to as the “Plan”), as set forth in this
document.

       

      This Plan
permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Cash-Based Awards, and Other Stock-Based
Awards.

       

      This Plan
shall become effective upon shareholder approval (the “Effective Date”) and shall
remain in effect as provided in Section 1.3 hereof.

       

      1.2          Purpose of this Plan. The
purpose of this Plan is to provide a means whereby officers and other Employees,
directors and certain third party consultants develop a sense of proprietorship
and personal involvement in the development and financial success of the
Company, and to encourage them to devote their best efforts to the business of
the Company, thereby advancing the interests of the Company and its
shareholders. A further purpose of this Plan is to provide a means through which
the Company may attract able individuals to become officers, Employees or
directors and to provide a means whereby those individuals upon whom the
responsibilities of the successful administration and management of the Company
are of importance, can acquire and maintain stock ownership, thereby
strengthening their concern for the welfare of the Company.

       

      1.3          Duration of this Plan. Unless
sooner terminated as provided herein, this Plan shall terminate ten (10) years
from the Effective Date. After this Plan is terminated, no Awards may be granted
but Awards previously granted shall remain outstanding in accordance with their
applicable terms and conditions and this Plan’s terms and conditions.
Notwithstanding the foregoing, no Incentive Stock Options may be granted more
than ten (10) years after the earlier of (a) adoption of this Plan by the Board,
or (b) the Effective Date.

       

      Article
2. Definitions

       

      Whenever
used in this Plan, the following terms shall have the meanings set forth below,
and when the meaning is intended, the initial letter of the word shall be
capitalized.

       

      
        	
                2.1  

              	
                “Affiliate” shall mean
      any corporation or other entity (including, but not limited to, a
      partnership or a limited liability company), that is affiliated with the
      Company through stock or equity ownership or otherwise, and is designated
      as an Affiliate for purposes of this Plan by the
  Committee.

              


      

       

      
        	
                2.2  

              	
                “Annual Award Limit”
      or “Annual Award
      Limits” have the meaning set forth in Section
  4.1.

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	
                2.3  

              	
                “Award” means,
      individually or collectively, a grant under this Plan of Nonqualified
      Stock Options, Incentive Stock Options, SARs, Restricted Stock, Restricted
      Stock Units, Performance Shares, Performance Units, Cash-Based
      Awards, or
      Other Stock-Based Awards, in each case subject to the terms of this
      Plan.

              


      

       

      
        	
                2.4  

              	
                “Award Agreement” means
      either (i) a written agreement entered into by the Company and a
      Participant setting forth the terms and provisions applicable to an Award
      granted under this Plan, or (ii) a written or electronic statement issued
      by the Company to a Participant describing the terms and provisions of
      such Award, including any amendment or modification thereof. The Committee
      may provide for the use of electronic, internet or other non-paper Award
      Agreements, and the use of electronic, internet or other non-paper means
      for the acceptance thereof and actions thereunder by a
      Participant.

              


      

       

      
        	
                2.5  

              	
                “Beneficial Owner” or
      “Beneficial
      Ownership” shall have the meaning ascribed to such term in Rule
      13d-3 of the General Rules and Regulations under the
      Exchange Act.

              


      

       

      
        	
                2.6  

              	
                “Board” or “Board of Directors”
      means the Board of Directors of
  the Company.

              


      

       

      
        	
                2.7  

              	
                “Cash-Based Award” means
      an Award, denominated in cash, granted to a Participant as described in
      Article 10.

              


      

       

      
        	
                2.8  

              	
                “Cause” means, unless
      otherwise specified in an Award Agreement or in an applicable employment
      agreement between the Company and a Participant, with respect to any
      Participant, as determined by the Committee in its sole
      discretion:

              


      

       

      
        	
                (a)  

              	
                Willful
      failure to substantially perform his or her duties as an Employee (for
      reasons other than physical or mental illness) after reasonable notice to
      the Participant of that failure;

              


      

       

      
        	
                (b)  

              	
                Misconduct
      that materially injures the Company or any Subsidiary or
      Affiliate;

              


      

       

      
        	
                (c)  

              	
                Conviction
      of, or entering into a plea of nolo contendere to, a felony;
      or

              


      

       

      
        	
                (d)  

              	
                Breach
      of any written covenant or agreement with the Company or any Subsidiary or
      Affiliate.

              


      

       

      
        	
                2.9  

              	
                “Change of Control”
      means the occurrence of any of the following
  events:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any
      Person, or “group” as defined in section 13(d)(3) of the Securities
      Exchange Act of 1934, becomes, directly or indirectly, the Beneficial
      Owner of 20% or more of the combined voting power of the then outstanding
      securities of the Corporation that are entitled to vote generally for the
      election of the Corporation’s directors (the “Voting Securities”)
      (other than as a result of an issuance of securities by the Corporation
      approved by Continuing Directors, or open market purchases approved by
      Continuing Directors at the time the purchases are
      made).  However, if any such Person or “group” becomes the
      Beneficial Owner of 20% or more, and less than 30%, of the Voting
      Securities, the Continuing Directors may determine, by a vote of at least
      two-thirds of the Continuing Directors, that the same does not constitute
      a Change of Control;

              


      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (ii)

              	
                as
      the direct or indirect result of, or in connection with, a reorganization,
      merger, share exchange or consolidation (a “Business Combination”),
      a contested election of directors, or any combination of these
      transactions, Continuing Directors cease to constitute a majority of the
      Corporation’s Board of Directors, or any successor’s board of directors,
      within two years of the last of such
  transactions;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                the
      shareholders of the Corporation approve a Business Combination, unless
      immediately following such Business Combination, (1) all or substantially
      all of the Persons who were the Beneficial Owners of the Voting Securities
      outstanding immediately prior to such Business Combination Beneficially
      Own more than 60% of the combined voting power of the then outstanding
      voting securities entitled to vote generally in the election of directors
      of the Corporation resulting from such Business Combination (including,
      without limitation, a company which as a result of such transaction owns
      the Corporation through one or more Subsidiaries) in substantially the
      same proportions as their ownership, immediately prior to such Business
      Combination, of the Voting Securities, (2) no Person (excluding any
      employee benefit plan or related trust of the Corporation or the
      Corporation resulting from such Business Combination) Beneficially Owns
      30% or more of the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors of the
      Corporation resulting from such Business Combination, and (3) at least a
      majority of the members of the board of directors of the Corporation
      resulting from such Business Combination are Continuing
      Directors.

              


      

       

      
        	
                 
      

              	
                For
      purposes of this Section 2.9, the following terms shall have the meanings
      set forth below:

              


      

      


      
        	
                 
      

              	
                (A)

              	
                Affiliate and
      Associate shall have the respective meanings ascribed to such terms
      in Rule 12b-2 of the General Rules and Regulations under the Exchange
      Act.

              


      

      


      
        	
                 
      

              	
                (B)

              	
                Beneficial
      Owner means that a Person shall be deemed the “Beneficial Owner” and
      shall be deemed to “beneficially own,” any
      securities:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                that
      such Person or any of such Person’s Affiliates or Associates owns,
      directly or indirectly;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                that
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to acquire (whether such right is exercisable
      immediately or only after the passage of time) pursuant to any agreement,
      arrangement or understanding (whether or not in writing) or upon the
      exercise of conversion rights, exchange rights, rights, warrants or
      options, or otherwise; provided, however, that, a Person shall not be
      deemed to be the “Beneficial Owner” of, or to “beneficially own,”
      securities tendered pursuant to a tender or exchange offer made by such
      Person or any such Person’s Affiliates or Associates until such tendered
      securities are accepted for purchase or
  exchange;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                that
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to vote, including pursuant to any agreement,
      arrangement or understanding, whether or not in writing; provided,
      however, that a Person shall not be deemed the “Beneficial Owner” of, or
      to “beneficially own,” any security under this subsection as a result of
      an agreement, arrangement or understanding to vote such security if such
      agreement, arrangement or understanding: (1) arises solely
      from

              


      

      
         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        
          
            	
                     
      

                  	
                     

                  	
                    a
      revocable proxy given in response to a public proxy solicitation made
      pursuant to, and in accordance with the applicable provisions of the
      General Rules and Regulations under the Exchange Act and (2) is not also
      then reportable by such Person on Schedule 13D under the Exchange Act (or
      any comparable or successor report);
or

                  


          

          
             

          

        

      

      
        	
                 
      

              	
                (iv)

              	
                that
      are beneficially owned, directly or indirectly, by any other Person (or
      any Affiliate or Associates thereof) with which such Person (or any of
      such Person’s Affiliates or Associates) has any agreement, arrangement or
      understanding (whether or not in writing), for the purpose of acquiring,
      holding, voting (except pursuant to a revocable proxy as described in ‘the
      proviso to subsection (iii) of this definition) or disposing of any voting
      securities of the Corporation provided, however, that notwithstanding any
      provision of this definition, any Person engaged in business as an
      underwriter of securities who acquires any securities of the Corporation
      through such Person’s participation in good faith in a firm commitment
      underwriting registered under the Securities Act of 1933, shall not be
      deemed the “Beneficial Owner” of, or to “beneficially own,” such
      securities until the expiration of forty days after the date of
      acquisition; and provided, further, that in no case shall an officer or
      director of the Corporation be deemed (1) the Beneficial Owner of any
      securities Beneficially Owned by another officer or director of the
      Corporation solely by reason of actions undertaken by such persons in
      their capacity as officers or directors of the Corporation; or (2) the
      Beneficial Owner of securities held of record by the trustee of any
      employee benefit plan of the Corporation or any Subsidiary of the
      Corporation for the benefit of any employee of the Corporation or any
      Subsidiary of the Corporation, other than the officer or director, by
      reason of any influences that such officer or director may have over the
      voting of the securities held in the
trust.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Continuing
      Directors means any member of the Corporation’s Board, while a
      member of that Board, and (i) who was a member of the Corporation’s Board
      prior to February 14, 2008, or (ii) whose subsequent nomination for
      election or election to the Corporation’s Board was recommended or
      approved by a majority of the Continuing
  Directors.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Person means
      any individual, firm, company, partnership or other
  entity.

              


      

       

      
        	
                 
      

              	
                (E)

              	
                Subsidiary
      means, with references to any Person, any company or other entity of which
      an amount of voting securities sufficient to elect a majority of the
      directors or Persons having similar authority of such company or other
      entity is beneficially owned, directly or indirectly, by such Person, or
      otherwise controlled by such
Person.

              


      

       

      
        	
                2.10  

              	
                “Code” means the U.S.
      Internal Revenue Code of 1986, as amended from time to time. For purposes
      of this Plan, references to sections of the Code shall be deemed to
      include references to any applicable regulations thereunder and any
      successor or similar provision.

              


      

       

      
        	
                2.11  

              	
                “Committee” means the
      Executive Compensation Committee of the Board or a subcommittee thereof,
      or any other committee designated by the Board to administer this Plan.
      The members of the Committee shall (i) be appointed from time to time by
      and shall serve at the discretion of the Board, and (ii) shall constitute
      “outside director” as defined in Section 162(m) of the Code and
      “non-employee directors” as defined in Section 16 of the Exchange
      Act.  If the Committee does not exist or cannot function for any
      reason, the Board 

              


      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   

                	
                  

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

                  

                


        

         

      

      
        	
                2.12  

              	
                “Company” or
      “Corporation” means Capital City Energy Group, Inc., a Nevada
      corporation, and any successor thereto as provided in Article 19
      herein.

              


      

       

      
        	
                2.13  

              	
                “Covered Employee” means
      any salaried Employee who is or
      may become a “covered employee,” as defined in Code Section 162(m), and
      who is designated, either as an individual Employee or class of Employees,
      by the Committee before the earlier of (i) ninety (90) days after the
      beginning of the Performance Period, or (ii) the date as of which
      twenty-five percent (25%) of the Performance Period has elapsed, as a
      “Covered Employee” under this Plan for such applicable Performance
      Period.

              


      

       

      
        	
                2.14  

              	
                “Effective Date” has the
      meaning set forth in Section 1.1.

              


      

       

      
        	
                2.15  

              	
                “Employee” means any
      individual performing services for the Company, an Affiliate, or a
      Subsidiary and designated as an employee of the Company, its Affiliates,
      and/or its Subsidiaries on the payroll records thereof.  An
      Employee shall not include any individual during any period he or she is
      classified or treated by the Company, Affiliate, and/or Subsidiary as an
      independent contractor, a consultant, or any employee of an employment,
      consulting, or temporary agency or any other entity other than the
      Company, Affiliate, and/or Subsidiary, without regard to whether such
      individual is subsequently determined to have been, or is subsequently
      retroactively reclassified as a common-law employee of the Company,
      Affiliate, and/or Subsidiary during such
period.

              


      

       

      
        	
                2.16  

              	
                “Exchange Act” means the
      Securities Exchange Act of 1934, as amended from time to time, or any
      successor act thereto.

              


      

       

      
        	
                2.17  

              	
                “Fair Market Value” or
      “FMV” means a
      price that is based on the opening, closing, actual, high, low, or average
      selling prices of a Share reported on the NASDAQ:OTC (“NASDAQ”) or other
      established stock exchange (or exchanges) on the applicable date, the
      preceding trading day, the next succeeding trading day, or an average of
      trading days, as determined by the Committee in its discretion. Unless the
      Committee determines otherwise, Fair Market Value shall be deemed to be
      equal to the average between the reported high and low selling price of a
      Share on the most recent date on which Shares were publicly traded. In the
      event Shares are not publicly traded at the time a determination of their
      value is required to be made hereunder, the determination of their Fair
      Market Value shall be made by the Committee in such manner as it deems
      appropriate. Such definition(s) of FMV shall be specified in each Award
      Agreement and may differ depending on whether FMV is in reference to the
      grant, exercise, vesting, settlement, or payout of an
    Award.

              


      

       

      
        	
                2.18  

              	
                “Grant Date” means the
      date an Award is granted to a Participant pursuant to the
      Plan.

              


      

       

      
        	
                2.19  

              	
                “Grant Price” means the
      price established at the time of grant of an SAR pursuant to Article 7,
      used to determine whether there is any payment due upon exercise of the
      SAR.

              


      

       

      
        	
                2.20  

              	
                “Incentive Stock Option”
      or “ISO”
      means an Option to purchase Shares granted under Article 6 to an
      Employee and that is designated as an Incentive Stock Option and that is
      intended to meet the requirements of Code Section 422, or any successor
      provision.

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                2.21  

              	
                “Insider” shall mean an
      individual who is, on the relevant date, an officer, or director of the
      Company, or a more than 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, as determined by the Board in
      accordance with Section 16 of the Exchange
  Act.

              


      

       

      
        	
                2.22  

              	
                “Net Income” means the
      consolidated net income before taxes for the Plan Year, as reported in the
      Company’s annual report to shareholders or as otherwise reported to
      shareholders.

              


      

       

      
        	
                2.23  

              	
                “Nonqualified Stock
      Option” or “NQSO” means
      an Option that is not intended to meet the requirements of Code
      Section 422, or that otherwise does not meet such
      requirements.

              


      

       

      
        	
                2.24  

              	
                “Option” means an
      Incentive Stock Option or a Nonqualified Stock Option, as described
      in Article 6.

              


      

       

      
        	
                2.25  

              	
                “Option Price” means the
      price at which a Share may be purchased by a Participant pursuant to an
      Option.

              


      

       

      
        	
                2.26  

              	
                “Other Stock-Based Award”
      means an equity-based or equity-related Award not otherwise
      described by the terms of this Plan, granted pursuant to Article
      10.

              


      

       

      
        	
                2.27  

              	
                “Participant” means any
      eligible individual as set forth in Article 5 to whom an Award is
      granted.

              


      

       

      
        	
                2.28  

              	
                “Performance-Based
      Compensation” means compensation under an Award that is intended to
      satisfy the requirements of Code Section 162(m) for certain
      performance-based compensation paid to Covered Employees. Notwithstanding
      the foregoing, nothing in this Plan shall be construed to mean that an
      Award which does not satisfy the requirements for performance-based
      compensation under Code Section 162(m) does not constitute
      performance-based compensation for other purposes, including Code Section
      409A.

              


      

       

      
        	
                2.29  

              	
                “Performance Measures”
      means measures as described in Article 12 on which the performance goals
      are based and which are approved by the Company’s shareholders pursuant to
      this Plan in order to qualify Awards as Performance-Based
      Compensation.

              


      

       

      
        	
                2.30  

              	
                “Performance Period”
      means the period of time during which the performance goals must be met in
      order to determine the degree of payout and/or vesting with respect to an
      Award.

              


      

       

      
        	
                2.31  

              	
                “Performance Share”
      means an Award under Article 9 herein and subject to the terms of
      this Plan, denominated in Shares, the value of which at the time it is
      payable is determined as a function of the extent to which corresponding
      performance criteria have been
achieved.

              


      

       

      
        	
                2.32  

              	
                “Performance Unit” means
      an Award under Article 9 herein and subject to the terms of this Plan,
      denominated in units, the value of which at the time it is payable is
      determined as a function of the extent to which corresponding performance
      criteria have been achieved.

              


      

       

      
        	
                2.33  

              	
                “Period of Restriction”
      means the period when Restricted Stock or Restricted Stock Units are
      subject to a substantial risk of forfeiture (based on the passage of time,
      the achievement of performance goals, or upon the occurrence of other
      events as determined by the Committee, in its discretion), as provided in
      Article 8.

              


      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	
                2.34  

              	
                “Person” shall have the
      meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
      used in Sections 13(d) and 14(d) thereof, including a “group” as defined
      in Section 13(d) thereof.

              


      

       

      
        	
                2.35  

              	
                “Plan” means this
      Capital City Energy Group, Inc. 2008 Incentive
      Plan.

              


      

       

      
        	
                2.36  

              	
                “Plan Year” means the
      calendar year.

              


      

       

      
        	
                2.37  

              	
                “Restricted Stock” means
      an Award granted to a Participant pursuant to Article
  8.

              


      

       

      
        	
                2.38  

              	
                “Restricted Stock Unit”
      means an Award granted to a Participant pursuant to Article 8, except no
      Shares are actually awarded to the Participant on the grant
      date.

              


      

       

      
        	
                2.39  

              	
                “Share” means a share of
      common stock of the Company, $0.001 par value per
      share.

              


      

       

      
        	
                2.40  

              	
                “Stock Appreciation
      Right” or “SAR” means an Award,
      designated as a SAR, pursuant to the terms of Article 7
      herein.

              


      

       

      
        	
                2.41  

              	
                “Subsidiary” means any
      corporation or other entity, whether domestic or foreign, in which the
      Company has or obtains, directly or indirectly, a proprietary interest of
      more than fifty percent (50%) by reason of stock ownership or
      otherwise.

              


      

       

      Article
3. Administration

       

      3.1          General. The Committee shall
be responsible for administering this Plan, subject to this Article 3 and the
other provisions of this Plan. The Committee may employ attorneys, consultants,
accountants, agents, and other individuals, any of whom may be an Employee, and
the Committee, the Company, and its officers and directors shall be entitled to
rely upon the advice, opinions, or valuations of any such individuals. All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Participants, the Company, and all other
interested individuals.

       

      3.2          Authority of the Committee.
The Committee shall have full and exclusive discretionary power to interpret the
terms and the intent of this Plan and any Award Agreement or other agreement or
document ancillary to or in connection with this Plan, to determine eligibility
for Awards and to adopt such rules, regulations, forms, instruments, and
guidelines for administering this Plan as the Committee may deem necessary or
proper. Such authority shall include, but not be limited to, selecting Award
recipients, establishing all Award terms and conditions, including the terms and
conditions set forth in Award Agreements, granting Awards as an alternative to
or as the form of payment for grants or rights earned or due under compensation
plans or arrangements of the Company, construing any ambiguous provision of the
Plan or any Award Agreement, and, subject to Article 17, adopting modifications
and amendments to this Plan or any Award Agreement, including without
limitation, any that are necessary to comply with the laws of the countries and
other jurisdictions in which the Company, its Affiliates, and/or its
Subsidiaries operate.

       

      3.3          Delegation. The Committee may
delegate to one or more of its members or to one or more officers of the
Company, and/or its Subsidiaries and Affiliates or to one or more agents or
advisors such administrative duties or powers as it may deem advisable, and the
Committee or any individuals to whom it has delegated duties or powers as
aforesaid may employ one or more individuals to render advice with respect to
any responsibility the Committee or such individuals may have under this Plan.
The Committee 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      may,
by resolution, authorize one or more officers of the Company to do one or both
of the following on the same basis as can the Committee: (a) designate
Employees, directors or consultants to be recipients of Awards and (b) determine
the size of any such Awards; provided, however, (i) the Committee shall not
delegate such responsibilities to any such officer for Awards granted to an
Employee or director who is considered an Insider; (ii) the resolution providing
such authorization sets forth the total number of Awards such officer(s) may
grant; and (iii) the officer(s) shall report periodically to the Committee
regarding the nature and scope of the Awards granted pursuant to the authority
delegated.

       

      Article
4. Shares Subject to this Plan and Maximum Awards

       

      4.1          Number of Shares Available for
Awards.

       

      
        	
                 
      

              	
                (a)

              	
                Subject
      to adjustment as provided in Section 4.3, the maximum number of Shares
      available for issuance to Participants under this Plan on or after the
      Effective Date shall be 2,500,000 Shares (the “Share Authorization”),
      which shall consist of a number of shares not previously authorized for
      issuance under any plan.

              


      

       

      
        	
                 
      

              	
                (b)

              	
                Options: The maximum
      aggregate number of Shares subject to Options granted in any one Plan Year
      to any one Participant shall be 125,000 (“Annual Award
      Limit”).

              


      

       

      
        	
                 
      

              	
                (c)

              	
                The
      maximum number of Shares subject to all Awards (including Options) granted
      in any one Plan Year to any one Participant shall be
    250,000.

              


      

       

      4.2          Share Usage. Shares covered by
an Award shall only be counted as used to the extent they are actually issued.
Any Shares related to Awards which terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such Shares, are settled in
cash in lieu of Shares, or are exchanged with the Committee’s permission, prior
to the issuance of Shares, for Awards not involving Shares, shall be available
again for grant under this Plan. Moreover, if the Option Price of any Option
granted under this Plan or the tax withholding requirements with respect to any
Award granted under this Plan are satisfied by tendering Shares to the Company
(by either actual delivery or by attestation), or if an SAR is exercised, only
the number of Shares issued, net of the Shares tendered, if any, will be deemed
delivered for purposes of determining the maximum number of Shares available for
delivery under this Plan. The Shares available for issuance under this Plan may
be authorized and unissued Shares or treasury Shares.

       

      4.3          Adjustments in Authorized
Shares. In the event of any corporate event or transaction (including,
but not limited to, a change in the Shares of the Company or the capitalization
of the Company) such as a merger, consolidation, reorganization,
recapitalization, separation, partial or complete liquidation, stock dividend,
stock split, reverse stock split, split up, spin-off, or other distribution of
stock or property of the Company, combination of Shares, exchange of Shares,
dividend in kind, or other like change in capital structure, number of
outstanding Shares or distribution (other than normal cash dividends) to
shareholders of the Company, or any similar corporate event or transaction, the
Committee, in its sole discretion, in order to prevent dilution or enlargement
of Participants’ rights under this Plan, shall substitute or adjust, as
applicable, the number and kind of Shares that may be issued under this Plan or
under particular forms of Awards, the number and kind of Shares subject to
outstanding Awards, the Option Price or Grant Price applicable to outstanding
Awards, the Annual Award Limits, and other value determinations applicable to
outstanding Awards.

       

      The
Committee, in its sole discretion, may also make appropriate adjustments in the
terms of any Awards under this Plan to reflect or related to such changes or
distributions and to modify any other terms 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      of
outstanding Awards, including modifications of performance goals and changes in
the length of Performance Periods. The determination of the Committee as to the
foregoing adjustments, if any, shall be conclusive and binding on Participants
under this Plan.

       

      Subject
to the provisions of Article 17 and notwithstanding anything else herein to the
contrary, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance or assumption of benefits
under this Plan in connection with any merger, consolidation, acquisition of
property or stock, or reorganization upon such terms and conditions as it may
deem appropriate (including, but not limited to, a conversion of equity awards
into Awards under this Plan in a manner consistent with paragraph 53 of FASB
Interpretation No. 44), subject to compliance with the rules under Code Sections
422 and 424, as and where applicable.

       

      Article
5. Eligibility and Participation

       

      5.1          Eligibility. Individuals
eligible to participate in this Plan include all Employees, directors and third
party consultants.

       

      5.2          Actual Participation. Subject
to the provisions of this Plan, the Committee may, from time to time, select
from all eligible individuals, those individuals to whom Awards shall be granted
and shall determine, in its sole discretion, the nature of, any and all terms
permissible by law, and the amount of each Award.

       

      Article
6. Stock Options

       

      6.1          Grant of Options. Subject to
the terms and provisions of this Plan, Options may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as
shall be determined by the Committee, in its sole discretion.

       

      6.2          Award Agreement. Each Option
grant shall be evidenced by an Award Agreement that shall specify the Option
Price, the maximum duration of the Option, the number of Shares to which the
Option pertains, the conditions upon which an Option shall become vested and
exercisable, and such other provisions as the Committee shall determine which
are not inconsistent with the terms of this Plan. The Award Agreement also shall
specify whether the Option is intended to be an ISO or a NQSO.

       

      6.3          Option Price. The Option Price
for each grant of an Option under this Plan shall be determined by the Committee
in its sole discretion and shall be specified in the Award Agreement; provided,
however, the Option Price must be at least equal to one hundred percent (100%)
of the FMV of the Shares as determined on the Grant Date.

       

      6.4          Term of Options. Each Option
granted to a Participant shall expire at such time as the Committee shall
determine at the time of grant; provided, however, no Option shall be
exercisable later than the day before the tenth (10th)
anniversary date of its grant. Notwithstanding the foregoing, for
Nonqualified Stock Options granted to Participants outside the United States,
the Committee has the authority to grant Nonqualified Stock Options that have a
term greater than ten (10) years.

       

      6.5          Exercise of Options. Options
granted under this Article 6 shall be exercisable at such times and be
subject to such restric­tions and conditions as the Committee shall in each
instance approve, which terms and restrictions need not be the same for each
grant or for each Participant.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      6.6          Payment. Options granted under
this Article 6 shall be exercised by the delivery of a notice of exercise to the
Company or an agent designated by the Company in a form specified or accepted by
the Committee, or by complying with any alternative procedures which may be
authorized by the Committee, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the
Shares.

       

      A
condition of the issuance of the Shares as to which an Option shall be exercised
shall be the payment of the Option Price. The Option Price of any Option shall
be payable to the Company in full either: (a) in cash or its equivalent;
(b) by tendering (either by actual delivery or attestation) previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the Option Price (provided that except as otherwise determined by the Committee,
the Shares that are tendered must have been held by the Participant for at least
six (6) months (or such other period, if any, as the Committee may permit) prior
to their tender to satisfy the Option Price if acquired under this Plan or any
other compensation plan maintained by the Company or have been purchased on the
open market); (c) by a cashless (broker-assisted) exercise; (d) by a combination
of (a), (b) and/or (c); or (e) any other method approved or accepted by the
Committee in its sole discretion.

       

      Subject
to any governing rules or regulations, as soon as practicable after receipt of
written notification of exercise and full payment (including satisfaction of any
applicable tax withholding), the Company shall deliver to the Participant
evidence of book entry Shares, or upon the Participant’s request, Share
certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s).

       

      Unless
otherwise determined by the Committee, all payments under all of the methods
indicated above shall be paid in United States dollars.

       

      6.7          Restrictions on Share
Transferability. The Committee may impose such restrictions on any Shares
acquired pursuant to the exercise of an Option granted under this Article 6 as
it may deem advisable, including, without limitation, minimum holding period
requirements, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, or under any blue sky or state securities laws
applicable to such Shares.

       

      6.8          Termination of
Employment. Each Participant’s Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant’s
employment or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Options issued
pursuant to this Article 6, and may reflect distinctions based on the reasons
for termination.

       

      6.9          Notification of Disqualifying
Disposition. If any Participant shall make any disposition of Shares
issued pursuant to the exercise of an ISO under the circumstances described in
Code Section 421(b) (relating to certain disqualifying dispositions), such
Participant shall notify the Company of such disposition within ten (10) days
thereof.

       

      6.10          Vesting.  Each
Option granted pursuant to this Plan shall become exercisable at such times
and under such conditions as shall be determined by the Committee and stated in
an Award Agreement.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      Article
7. Stock Appreciation Rights

       

      7.1          Grant of SARs. Subject to the
terms and conditions of this Plan, SARs may be granted to Participants at any
time and from time to time as shall be determined by the Committee.

       

      Subject
to the terms and conditions of this Plan, the Committee shall have complete
discretion in determining the number of SARs granted to each Participant and,
consistent with the provisions of this Plan, in determining the terms and
conditions pertaining to such SARs.

       

      The Grant
Price for each grant of an SAR shall be determined by the Committee and shall be
specified in the Award Agreement; provided, however, the Grant Price on the
Grant Date must be at least equal to one hundred percent (100%) of the FMV of
the Shares as determined on the Grant Date.

       

      7.2          SAR Agreement. Each SAR Award
shall be evidenced by an Award Agreement that shall specify the Grant Price, the
term of the SAR, and such other provisions as the Committee shall
determine.

       

      7.3          Term of SAR. The term of an
SAR granted under this Plan shall be determined by the Committee, in its sole
discretion, and except as determined otherwise by the Committee and specified in
the SAR Award Agreement, no SAR shall be exercisable later than the tenth
(10th)
anniversary date of its grant. Notwithstanding the foregoing, for SARs granted
to Participants outside the United States, the Committee has the authority to
grant SARs that have a term greater than ten (10) years.

       

      7.4          Exercise of SARs. SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes.

       

      7.5          Settlement of SARs. Upon the
exercise of an SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:

       

      
        	
                 
      

              	
                (a)

              	
                The
      excess of the Fair Market Value of a Share on the date of exercise over
      the Grant Price; by

              


      

       

      
        	
                 
      

              	
                (b)

              	
                The
      number of Shares with respect to which the SAR is
    exercised.

              


      

       

      At the
discretion of the Committee, the payment upon SAR exercise may be in cash,
Shares, or any combination thereof, or in any other manner approved by the
Committee in its sole discretion. The Committee’s determination regarding the
form of SAR payout shall be set forth in the Award Agreement pertaining to the
grant of the SAR.

       

      7.6          Termination of Employment.
Each Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the SAR following termination of the Participant’s
employment with or provision of services to the Company, its Affiliates, and/or
its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all SARs issued
pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.

       

      7.7          Other Restrictions. The
Committee shall impose such other conditions and/or restrictions on any Shares
received upon exercise of an SAR granted pursuant to this Plan as it may deem
advisable or desirable. These restrictions may include, but shall not be limited
to, a requirement that the Participant hold the Shares received upon exercise of
an SAR for a specified period of time.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      7.8          Vesting. Each SAR granted
pursuant to this Plan shall become exercisable at such times and under such
conditions as shall be determined by the Committee and stated in an Award
Agreement.

       

      Article
8. Restricted Stock and Restricted Stock Units

       

      8.1          Grant of Restricted Stock or Restricted Stock Units.
Subject to the terms and provisions of this Plan, the Committee, at any time and
from time to time, may grant Shares of Restricted Stock and/or Restricted Stock
Units to Participants in such amounts as the Committee shall determine.
Restricted Stock Units shall be similar to Restricted Stock except that no
Shares are actually awarded to the Participant on the Grant Date.

       

      8.2          Restricted Stock or Restricted Stock
Unit Agreement. Each Restricted Stock and/or Restricted Stock Unit grant
shall be evidenced by an Award Agreement that shall specify the period(s) of
restriction, the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the Committee shall
determine.

       

      8.3          Other Restrictions. The
Committee shall impose such other conditions and/or restrictions on any Shares
of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as
it may deem advisable including, without limitation,  restrictions
based upon the achievement of specific performance goals, time-based
restrictions on vesting following the attainment of the performance goals,
time-based restrictions, and/or restrictions under applicable laws or under the
requirements of any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed on the Shares by
the Company upon vesting of such Restricted Stock or Restricted Stock
Units.

       

      To the
extent deemed appropriate by the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company’s possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied or lapse.

       

      Except as
otherwise provided in this Article 8, Shares of Restricted Stock covered by each
Restricted Stock Award shall become freely transferable by the Participant after
all conditions and restrictions applicable to such Shares have been satisfied or
lapse (including satisfaction of any applicable tax withholding obligations),
and Restricted Stock Units shall be paid in cash, Shares, or a combination of
cash and Shares as the Committee, in its sole discretion shall
determine.

       

      8.4          Certificate Legend. In
addition to any legends placed on certificates pursuant to Section 8.3,
each certificate representing Shares of Restricted Stock granted pursuant to
this Plan may bear a legend such as the following or as otherwise determined by
the Committee in its sole discretion:

       

      “The sale
or transfer of Shares of stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is subject to certain
restrictions on transfer as set forth in the Capital City Energy Group, Inc.
2008 Incentive
Plan, and in the associated Award Agreement. A copy of this Plan and such Award
Agreement may be obtained from Capital City Energy Group, Inc.”

       

      8.5          Voting Rights. Unless
otherwise determined by the Committee and set forth in a Participant’s Award
Agreement, to the extent permitted or required by law, as determined by the
Committee, Participants holding Shares of Restricted Stock granted hereunder may
be granted the right to exercise full voting rights with respect to those Shares
during the Period of Restriction. A Participant shall have no voting rights with
respect to any Restricted Stock Units granted hereunder.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      8.6          Termination of Employment.
Each Award Agreement shall set forth the extent to which the Participant shall
have the right to retain Restricted Stock and/or Restricted Stock Units
following termination of the Participant’s employment with or provision of
services to the Company, its Affiliates, and/or its Subsidiaries, as the case
may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock or
Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.

       

      8.7          Section 83(b) Election. The
Committee may provide in an Award Agreement that the Award of Restricted Stock
is conditioned upon the Participant making or refraining from making an election
with respect to the Award under Code Section 83(b). If a Participant makes an
election pursuant to Code Section 83(b) concerning a Restricted Stock Award, the
Participant shall be required to file promptly a copy of such election with the
Company.

       

      Article
9. Performance Units/Performance Shares

       

      9.1          Grant of Performance
Units/Performance Shares. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Performance
Units and/or Performance Shares to Participants in such amounts and upon such
terms as the Committee shall determine.  Performance Units/Performance
Shares that are earned (as described in Section 9.3) may be subject to vesting
requirements as set forth in the Applicable Award Agreement.

       

      9.2          Value of Performance
Units/Performance Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the Grant Date. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the value and/or number of Performance Units/Performance Shares that may be
earned by the Participant.

       

      9.3          Earning of Performance
Units/Performance Shares. Subject to the terms of this Plan, after
the applicable Performance Period and vesting period have ended, the holder of
Performance Units/Performance Shares shall be entitled to receive payout on the
value and number of Performance Units/Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been
achieved.

       

      9.4          Form and Timing of Payment of
Performance Units/Performance Shares. Payment of earned and vested
Performance Units/Performance Shares shall be as determined by the Committee and
as evidenced in the Award Agreement. Subject to the terms of this
Plan, the Committee, in its sole discretion, may pay earned and vested
Performance Units/Performance Shares in the form of cash or in Shares (or in a
combination thereof).  Any Shares may be granted subject to any
restrictions deemed appropriate by the Committee. The determination of the
Committee with respect to the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the Award.

       

      9.5          Termination of Employment or
Provision of Services. Each Award Agreement shall set forth the extent to
which the Participant shall have the right to retain Performance Units and/or
Performance Shares following termination of the Participant’s employment with or
provision of services to the Company, its Affiliates, and/or its Subsidiaries,
as the case may be. Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Awards of Performance Units or
Performance Shares issued pursuant to this Plan, and may reflect distinctions
based on the reasons for termination.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      Article
10. Cash-Based Awards and Other Stock-Based Awards

       

      10.1          Grant of Cash-Based Awards.
Subject to the terms and provisions of the Plan, the Committee, at any time and
from time to time, may grant Cash-Based Awards to Participants in such amounts
and upon such terms as the Committee may determine.

       

      10.2          Other Stock-Based Awards. The
Committee may grant other types of equity-based or equity-related Awards not
otherwise described by the terms of this Plan (including the grant or offer for
sale of unrestricted Shares) in such amounts and subject to such terms and
conditions, as the Committee shall determine. Such Awards may involve the
transfer of actual Shares to Participants, or payment in cash or otherwise of
amounts based on the value of Shares and may include, without limitation, Awards
designed to comply with or take advantage of the applicable local laws of
jurisdictions other than the United States.

       

      10.3          Value of Cash-Based and Other
Stock-Based Awards. Each Cash-Based Award shall specify a payment amount
or payment range as determined by the Committee. Each Other Stock-Based Award
shall be expressed in terms of Shares or units based on Shares, as determined by
the Committee. The Committee may establish performance goals in its discretion.
If the Committee exercises its discretion to establish performance goals, the
number and/or value of Cash-Based Awards or Other Stock-Based Awards that will
be paid out to the Participant will depend on the extent to which the
performance goals are met.

       

      10.4          Payment of Cash-Based Awards and
Other Stock-Based Awards. Payment, if any, with respect to a Cash-Based
Award or an Other Stock-Based Award shall be made in accordance with the terms
of the Award, in cash or Shares as the Committee determines.

       

      10.5          Termination of Employment. The
Committee shall determine the extent to which the Participant shall have the
right to receive Cash-Based Awards or Other Stock-Based Awards following
termination of the Participant’s employment with or provision of services to the
Company, its Affiliates, and/or its Subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with each Participant,
but need not be uniform among all Awards of Cash-Based Awards or Other Stock-Based Awards
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination.

       

      Article
11. Transferability of Awards

       

      11.1          Transferability. Except as
provided in Section 11.2 below, during a Participant’s lifetime, his or her
Awards shall be exercisable only by the Participant. Awards shall not be
transferable other than by will or the laws of descent and distribution; no
Awards shall be subject, in whole or in part, to attachment, execution, or levy
of any kind; and any purported transfer in violation hereof shall be null and
void. The Committee may establish such procedures as it deems appropriate for a
Participant to designate a beneficiary to whom any amounts payable or Shares
deliverable in the event of, or following, the Participant’s death, may be
provided.

       

      11.2          Committee Action. The
Committee may, in its discretion, determine that notwithstanding Section 11.1,
any or all Awards (other than ISOs) shall be transferable to and exercisable by
such transferees, and subject to such terms and conditions, as the Committee may
deem appropriate; provided, however, no Award may be transferred for value (as
defined in the General Instructions to Form S-8).

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      Article
12. Performance Measures

       

      12.1          Performance Measures. The
performance goals upon which the payment or vesting of an Award to a Covered
Employee that is intended to qualify as Performance-Based Compensation shall be
limited to the following Performance Measures:

       

      
        	
                (a)  

              	
                Net
      earnings or Net Income (before or after
taxes);

              


      

      
        	
                (b)  

              	
                Earnings
      per share (basic or diluted);

              


      

      
        	
                (c)  

              	
                Net
      sales or revenue growth;

              


      

      
        	
                (d)  

              	
                Net
      operating profit;

              


      

      
        	
                (e)  

              	
                Return
      measures (including, but not limited to, return on assets, capital,
      invested capital, equity, sales, or
revenue);

              


      

      
        	
                (f)  

              	
                Cash
      flow (including, but not limited to, operating cash flow, free cash flow,
      cash flow return on equity, and cash flow return on
      investment);

              


      

      
        	
                (g)  

              	
                Earnings
      before or after taxes, interest, depreciation, and/or
      amortization;

              


      

      
        	
                (h)  

              	
                Gross
      or operating margins;

              


      

      
        	
                (i)  

              	
                Productivity
      ratios;

              


      

      
        	
                (j)  

              	
                Share
      price (including, but not limited to, growth measures and total
      shareholder return);

              


      

      
        	
                (k)  

              	
                Expense
      targets;

              


      

      
        	
                (l)  

              	
                Margins;

              


      

      
        	
                (m)  

              	
                Operating
      efficiency;

              


      

      
        	
                (n)  

              	
                Market
      share;

              


      

      
        	
                (o)  

              	
                Customer
      satisfaction;

              


      

      
        	
                (p)  

              	
                Working
      capital targets;

              


      

      
        	
                (q)  

              	
                Economic
      value added or EVA®
      (net operating profit after tax minus the sum of capital multiplied by the
      cost of capital);

              


      

      
        	
                (r)  

              	
                Health,
      safety and environmental performance;
and

              


      

      
        	
                (s)  

              	
                Corporate
      advocacy metrics.

              


      

      


      Any
Performance Measure(s) may be used to measure the performance of the Company,
Subsidiary, and/or Affiliate as a whole or any business unit of the Company,
Subsidiary, and/or Affiliate or any combination thereof, as the Committee may
deem appropriate, or any of the above Performance Measures as compared to the
performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company
may select Performance Measure (j) above as compared to various stock market
indices. The Committee also has the authority to provide for accelerated vesting
of any Award based on the achievement of performance goals pursuant to the
Performance Measures specified in this Article 12.

       

      12.2          Evaluation of Performance. The
Committee may provide in any such Award that any evaluation of performance may
include or exclude any of the following events that occurs during a Performance
Period: (a) asset write-downs, (b) litigation or claim judgments or settlements,
(c) the effect of changes in tax laws, accounting principles, or other laws or
provisions affecting reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
annual report to shareholders for the applicable year, (f) acquisitions or
divestitures, and (g) foreign exchange gains and losses. To the extent such
inclusions or exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      12.3          Adjustment of Performance-Based
Compensation. Awards that are intended to qualify as Performance-Based
Compensation may not be adjusted upward. The Committee shall retain the
discretion to adjust such Awards downward, either on a formula or discretionary
basis or any combination, as the Committee determines.

       

      12.4          Committee Discretion. In the
event that applicable tax and/or securities laws change to permit Committee
discretion to alter the governing Performance Measures 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 Awards that
shall not qualify as Performance-Based Compensation, the Committee may make such
grants without satisfying the requirements of Code Section 162(m) and base
vesting on Performance Measures other than those set forth in
Section 12.1.

       

      Article
13. Dividend Equivalents

       

      Any
Participant selected by the Committee may be granted dividend equivalents based
on the dividends declared on Shares that are subject to any Award, to be
credited as of dividend payment dates, during the period between the date the
Award is granted and the date the Award is exercised, vests or expires, as
determined by the Committee. Such dividend equivalents shall be converted to
cash or additional Shares by such formula and at such time and subject to such
limitations as may be determined by the Committee.

       

      Article
14. Beneficiary Designation

       

      Each
Participant under this Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under this Plan is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid to or exercised by the
Participant’s executor, administrator, or legal representative.

       

      Article
15. Rights of Participants

       

      15.1          Employment. Nothing in this
Plan or an Award Agreement shall interfere with or limit in any way the right of
the Company, its Affiliates, and/or its Subsidiaries, to terminate any
Participant’s employment at any time or for any reason not prohibited by law,
nor confer upon any Participant any right to continue his employment for any
specified period of time.

       

      Neither
an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company, its Affiliates, and/or its Subsidiaries and,
accordingly, subject to Articles 3 and 17, this Plan and the benefits
hereunder may be terminated at any time in the sole and exclusive discretion of
the Committee without giving rise to any liability on the part of the Company,
its Affiliates, and/or its Subsidiaries.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      15.2          Participation. No individual
shall have the right to be selected to receive an Award under this Plan, or,
having been so selected, to be selected to receive a future Award.

       

      15.3          Rights as a Shareholder.
Except as otherwise provided herein, a Participant shall have none of the rights
of a shareholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.

       

      Article
16. Change of Control

       

      16.1 Change of Control of the
Company. Notwithstanding any other provision of this Plan to the
contrary, the provisions of this Article 16 shall apply in the event of a Change
of Control, unless otherwise determined by the Committee in connection with the
grant of an Award as reflected in the applicable Award Agreement.

       

      Upon a
Change of Control, except to the extent that another Award meeting the
requirements of Section 16.2 (a “Replacement Award”) is
provided to the Participant to replace such Award (the “Replaced Award”), all
then-outstanding Stock Options and Stock Appreciation Rights shall vest and
become exercisable in accordance with the provisions of the Award Agreement. The
treatment of any other Awards shall be as determined by the Committee in
connection with the grant thereof, as reflected in the applicable Award
Agreement.

       

      Except to
the extent that a Replacement Award is provided to the Participant, the
Committee may, in its sole discretion, determine that any or all
outstanding Awards granted under the Plan, whether or not exercisable, will be
canceled and terminated and that in connection with such cancellation and
termination the holder of such Award may receive for each Share subject to such
Awards a cash payment (or the delivery of shares of stock, other securities or a
combination of cash, stock and securities equivalent to such cash payment) equal
to the difference, if any, between the consideration received by shareholders of
the Company in respect of a Share of Common Stock in connection with such
transaction and the purchase price per share, if any, under the Award multiplied
by the number of Shares of Common Stock subject to such Award; provided that if
such product is zero or less or to the extent that the Award is not then
exercisable, the Awards will be canceled and terminated without payment
therefore.

       

      16.2          Replacement Awards. An Award
shall meet the conditions of this Section 16.2 (and hence qualify as a
Replacement Award) if: (i) it has a value at least equal to the value of the
Replaced Award as determined by the Committee in its sole discretion; (ii) it
relates to publicly traded equity securities of the Company or its successor in
the Change of Control or another entity that is affiliated with the Company or
its successor following the Change of Control; and (iii) its other terms and
conditions are not less favorable to the Participant than the terms and
conditions of the Replaced Award (including the provisions that would apply in
the event of a subsequent Change of Control). Without limiting the generality of
the foregoing, the Replacement Award may take the form of a continuation of the
Replaced Award if the requirements of the preceding sentence are satisfied. The
determination of whether the conditions of this Section 17.2 are satisfied shall
be made by the Committee, as constituted immediately before the Change of
Control, in its sole discretion.

       

      16.3          Termination of Employment.
Upon a termination of employment of a Participant occurring in connection with
or during the period of two (2) years after such Change of Control, other than
for Cause, (i) all Replacement Awards held by the Participant shall become fully
vested and (if applicable) exercisable and free of restrictions, and (ii) all
Stock Options and Stock Appreciation Rights held by the Participant immediately
before the termination of employment or termination of directorship that the


       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      Participant
held as of the date of the Change of Control or that constitute Replacement
Awards shall remain exercisable for not less than one (1) year following such
termination or until the expiration of the stated term of such Stock Option or
SAR, whichever period is shorter; provided, that if the applicable Award
Agreement provides for a longer period of exercisability, that provision shall
control.

       

      Article
17. Amendment, Modification, Suspension, and Termination

       

      17.1          Amendment, Modification, Suspension,
and Termination. Subject to Section 17.3, the Committee may, at
any time and from time to time, alter, amend, modify, suspend, or terminate
this Plan and any Award Agreement in whole or in part; provided, however,
that, without the prior approval of the Company’s shareholders and except as
provided in Section 4.3, Options or SARs issued under this Plan will not be
repriced, replaced, or regranted through cancellation, or by lowering the Option
Price of a previously granted Option or the Grant Price of a previously granted
SAR, and no material amendment of this Plan shall be made without shareholder
approval if shareholder approval is required by law, regulation, or stock
exchange rule.

       

      17.2          Adjustment of Awards Upon the
Occurrence of Certain Unusual or Nonrecurring Events. The Committee may
make adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.3 hereof) affecting the Company or
the financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent unintended dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Plan. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under this
Plan.

       

      17.3          Awards Previously Granted.
Notwithstanding any other provision of this Plan to the contrary (other than
Section 17.4), no termination, amendment, suspension, or modification of this
Plan or an Award Agreement shall adversely affect in any material way any
Award previously granted under this Plan, without the written consent of the
Participant holding such Award.

       

      17.4          Amendment to Conform to
Law.  Notwithstanding any other provision of this Plan to the
contrary, the Board of Directors may amend the Plan or an Award Agreement, to
take effect retroactively or otherwise, as deemed necessary or advisable for the
purpose of conforming the Plan or an Award Agreement to any present or future
law relating to plans of this or similar nature (including, but not limited to,
Code Section 409A), and to the administrative regulations and rulings
promulgated thereunder. By accepting an Award under this Plan, a Participant
agrees to any amendment made pursuant to this Section 17.4 to any Award granted
under the Plan without further consideration or action.

       

      Article
18. Withholding

       

      18.1          Tax Withholding. The Company
shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, the minimum statutory amount to satisfy
federal, 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.

       

      18.2          Share Withholding. With
respect to withholding required upon the exercise of Options or SARs, upon the
lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon


       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      the
achievement of performance goals related to Performance Shares, or any other
taxable event arising as a result of an Award granted hereunder, Participants
may elect, subject to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax withholding that could be imposed on the transaction. All
such elections shall be irrevocable, made in writing, and signed by the
Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.

       

      Article
19. Successors

       

      All
obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

       

      Article
20. General Provisions

       

      20.1          Forfeiture
Events.                                                

       

      
        	
                (a)  

              	
                The
      Committee may specify in an Award Agreement that the Participant’s rights,
      payments, and benefits with respect to an Award shall be subject to
      reduction, cancellation, forfeiture, or recoupment upon the occurrence of
      certain specified events, in addition to any otherwise applicable vesting
      or performance conditions of an Award. Such events may include, but shall
      not be limited to, termination of employment for Cause, termination of the
      Participant’s provision of services to the Company, Affiliate, and/or
      Subsidiary, violation of material Company, Affiliate, and/or Subsidiary
      policies, breach of noncompetition, confidentiality, or other restrictive
      covenants that may apply to the Participant, or other conduct by the
      Participant that is detrimental to the business or reputation of the
      Company, its Affiliates, and/or its
  Subsidiaries.

              


      

       

      
        	
                (b)  

              	
                If
      the Company is required to prepare an accounting restatement due to the
      material noncompliance of the Company, as a result of misconduct, with any
      financial reporting requirement under the securities laws, if the
      Participant knowingly or grossly negligently engaged in the misconduct, or
      knowingly or grossly negligently failed to prevent the misconduct, or if
      the Participant is one of the individuals subject to automatic forfeiture
      under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall
      reimburse the Company the amount of any payment in settlement of an Award
      earned or accrued during the twelve (12) month period following the first
      public issuance or filing with the United States Securities and Exchange
      Commission (whichever just occurred) of the financial document embodying
      such financial reporting
requirement.

              


      

       

      20.2          Legend. The certificates for
Shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer of such Shares.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      20.3          Gender and Number. Except
where otherwise indicated by the context, any masculine term used herein also
shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.

       

      20.4          Severability. In the event any
provision of this Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.

       

      20.5          Requirements of Law. The granting of Awards
and the issuance of Shares under this Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.

       

      20.6          Delivery of Title. The Company shall have
no obligation to issue or deliver evidence of title for Shares issued under this
Plan prior to:

       

      
        	
                (a)  

              	
                Obtaining
      any approvals from governmental agencies that the Company determines are
      necessary or advisable; and

              


      

       

      
        	
                (b)  

              	
                Completion
      of any registration or other qualification of the Shares under any
      applicable national or foreign law or ruling of any governmental body that
      the Company determines to be necessary or
  advisable.

              


      

       

      20.7          Inability to Obtain
Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

       

      20.8          Investment
Representations. The Committee may
require any individual receiving Shares pursuant to an Award under this Plan to
represent and warrant in writing that the individual is acquiring the Shares for
investment and without any present intention to sell or distribute such
Shares.

       

      20.9          Employees Based Outside of the United
States. Notwithstanding any provision of this Plan to the contrary, in
order to comply with the laws in other countries in which the Company, its
Affiliates, and/or its Subsidiaries operate or have Employees, the Committee, in
its sole discretion, shall have the power and authority to:

       

      
        	
                (a)  

              	
                Determine
      which Affiliates and Subsidiaries shall be covered by this
      Plan;

              


      

       

      
        	
                (b)  

              	
                Determine
      which Employees outside the United States are eligible to participate in
      this Plan;

              


      

       

      
        	
                (c)  

              	
                Modify
      the terms and conditions of any Award granted to Employees outside the
      United States to comply with applicable foreign
  laws;

              


      

       

      
        	
                 
      

              	
                (d)

              	
                Establish
      subplans and modify exercise procedures and other terms and procedures, to
      the extent such actions may be necessary or advisable. Any subplans
      and modifications to Plan terms and procedures established under this
      Section 21.9 by the Committee shall be attached to this Plan document as
      appendices; and

              


      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      
      

      
        	
                 
      

              	
                (e)

              	
                Take
      any action, before or after an Award is made, that it deems advisable to
      obtain approval or comply with any necessary local government regulatory
      exemptions or approvals.

              


      

       

      Notwithstanding the above, the
Committee may not take any actions hereunder, and no Awards shall be granted,
that would violate applicable law.

       

      20.10               Uncertificated Shares. To the
extent that this Plan provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may be effected on a
noncertificated basis, to the extent not prohibited by applicable law or the
rules of any stock exchange.

       

      20.11               Unfunded Plan. Participants shall have
no right, title, or interest whatsoever in or to any investments that the
Company, and/or its Subsidiaries, and/or its Affiliates may make to aid it in
meeting its obligations under this Plan. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
Participant, beneficiary, legal representative, or any other individual. To the
extent that any individual acquires a right to receive payments from the
Company, its Subsidiaries, and/or its Affiliates under this Plan, such right
shall be no greater than the right of an unsecured general creditor of the
Company, a Subsidiary, or an Affiliate, as the case may be. All payments to be
made hereunder shall be paid from the general funds of the Company, a
Subsidiary, or an Affiliate, as the case may be and no special or separate fund
shall be established and no segregation of assets shall be made to assure
payment of such amounts except as expressly set forth in this Plan.

       

      20.12               No Fractional Shares. No
fractional Shares shall be issued or delivered pursuant to this Plan or any
Award. The Committee shall determine whether cash, Awards, or other property
shall be issued or paid in lieu of fractional Shares or whether such fractional
Shares or any rights thereto shall be forfeited or otherwise
eliminated.

       

      20.13               Retirement and Welfare Plans.
Neither Awards made under this Plan nor Shares or cash paid pursuant to such
Awards may be included as “compensation” for purposes of computing the benefits
payable to any Participant under the Company’s or any Subsidiary’s or
Affiliate’s retirement plans (both qualified and non-qualified) or welfare
benefit plans unless such other plan expressly provides that such compensation
shall be taken into account in computing a Participant’s benefit.

       

      20.14               Deferred Compensation. No
deferral of compensation (as defined under Code Section 409A or guidance
thereto) is intended under this Plan. Notwithstanding this intent, if any Award
would be considered deferred compensation as defined under Code Section 409A and
if this Plan fails to meet the requirements of Code Section 409A with respect to
such Award, then such Award shall be null and void. However, the Committee may
permit deferrals of compensation pursuant to the terms of a Participant’s Award
Agreement, a separate plan or a subplan which meets the requirements of Code
Section 409A and any related guidance. Additionally, to the extent any Award is
subject to Code Section 409A, notwithstanding any provision herein to the
contrary, the Plan does not permit the acceleration or delay of the time or
schedule of any distribution related to such Award, except as permitted by Code
Section 409A, the regulations thereunder, and/or the Secretary of the United
States Treasury.

       

      20.15               Nonexclusivity of this Plan.
The adoption of this Plan shall not be construed as creating any limitations on
the power of the Board or Committee to adopt such other compensation
arrangements as it may deem desirable for any Participant.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      20.16               No Constraint on Corporate
Action. Nothing in this Plan shall be construed to: (i) limit, impair, or
otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right or
power to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets; or, (ii)
limit the right or power of the Company or a Subsidiary or an Affiliate to take
any action which such entity deems to be necessary or appropriate.

       

      20.17               Governing Law. The Plan and
each Award Agreement shall be governed by the laws of the State of Nevada,
excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan to the substantive law of
another jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under this Plan are deemed to submit to the exclusive
jurisdiction and venue of the federal or state courts of Nevada, to resolve any
and all issues that may arise out of or relate to this Plan or any related Award
Agreement.