CHINA
FIRE & SECURITY GROUP, INC

    2008
OMNIBUS LONG-TERM INCENTIVE PLAN

     

    China
Fire & Security Group, Inc., a Florida corporation (the “Company”), sets
forth herein the terms of its 2008 Omnibus Long-Term Incentive Plan (the
“Plan”), as follows:

     

    
      
        	
                1.

              	
                PURPOSE

              


      

    

     

    The Plan
is intended to enhance the Company’s and its Affiliates’ (as defined herein)
ability to attract and retain highly qualified officers, directors, key
employees and other persons, and to motivate such officers, directors, key
employees and other persons to serve the Company and its Affiliates and to
expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company.
To this end, the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units, unrestricted
stock and cash awards. Any of these awards may, but need not, be made as
performance incentives to reward attainment of annual or long-term performance
goals in accordance with the terms hereof. Stock options granted under the Plan
may be non-qualified stock options or incentive stock options, as provided
herein.

     

    
      
        	
                2.

              	
                DEFINITIONS

              


      

    

     

    For
purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

     

    2.1.        “Affiliate” means any company or other trade or
business that “controls,” is “controlled by” or is “under common control” with
the Company within the meaning of Rule 405 of Regulation C under the Securities
Act, including, without limitation, any Subsidiary.

     

    2.2.         “Annual Incentive
Award” means an Award made
subject to attainment of performance goals (as described in Section 13)
over a performance period of a duration as specified by the Designees or
Committee.

     

    2.3.         “Award” means a grant of an Option, Stock
Appreciation Right, Restricted Stock, Restricted Stock Unit, Unrestricted Stock,
or cash award, as determined by the Designees or Committee from time to time
under the Plan.

     

    2.4.         “Award
Agreement” means a written
agreement between the Company and a Grantee, or notice from the Company to a
Grantee, that evidences and sets out the terms and conditions of an
Award.

     

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

     

    2.6.         “Cause” means, as determined
by the Designees or Committee and unless otherwise provided in an applicable
agreement with the Company or an Affiliate at or before the Grant Date: (i)
engaging in any act, omission or misconduct that is injurious to the Company or
its Affiliates; (ii) gross negligence or willful misconduct in connection with
the performance of duties; (iii) conviction of a criminal offense (other than
minor traffic offenses); (iv) fraud, embezzlement or misappropriation of funds
or property of the Company or an Affiliate; (v) material breach of any term of
any employment, consulting or other services, confidentiality, intellectual
property or non-competition agreements, if any, between the Service Provider and
the Company or an Affiliate; (vi) the entry of an order duly issued by any
regulatory agency (including federal, state and local regulatory agencies and
self-regulatory bodies) having jurisdiction over the Company or an Affiliate
requiring the removal from any office held by the Service Provider with the
Company or prohibiting a Service Provider from participating in the business or
affairs of the Company or any Affiliate; or (vii) the revocation or threatened
revocation of any of the Company’s or an Affiliate’s government licenses,
permits or approvals, which is primarily due to the Service Provider’s action or
inaction and such revocation or threatened revocation would be alleviated or
mitigated in any material respect by the termination of the Service Provider’s
Services.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    2.7.         “Change in
Control” shall have the
meaning set forth in Section 15.2.

     

    2.8.         “Code” means the Internal Revenue Code of
1986, as now in effect or as hereafter amended.

     

    2.9.         “Committee” means the Compensation Committee of
the Board, or such other committee as determined by the Board. The Compensation
Committee of the Board may, in its discretion, designate a subcommittee of its
members to serve as the Committee (to the extent the Board has not designated
another person, committee or entity as the Committee) or to cause the Committee
to (i) consist solely of persons who are “Nonemployee Directors” as defined in
Rule 16b-3 issued under the Exchange Act, (ii) consist solely of persons who are
Outside Directors, or (iii) satisfy the applicable requirements of any stock
exchange on which the Common Stock may then be listed.

     

    2.10.       “Company” means China Fire & Security Group,
Inc., a Florida corporation, or any successor corporation.

     

    2.11.       “Common Stock” or
“Stock” means share of
common stock of the Company, par value $0.001 per share.

     

    2.12.       “Covered
Employee” means a Grantee
who is a “covered employee” within the meaning of Section 162(m)(3) of the
Code, as qualified by Section 13.4 herein.

     

    2.13. “Disability” means the Grantee is unable to perform
each of the essential duties of such Grantee’s position by reason of a medically
determinable physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous period of not less
than 12 months; provided, however, that, with respect to rules regarding
expiration of an Incentive Stock Option following termination of the Grantee’s
Service, Disability has the meaning as set forth in Section 22(e)(3) of the
Code.

     

    2.14.       “Designee” means one or more officers or
directors of the Company who are authorized by the Board to administer the Plan
before the Committee is formed.

     

    2.15.       “Effective
Date” means the date set
forth in Section
16.10
herein.

     

    2.16.       “Exchange
Act” means the Securities
Exchange Act of 1934, as now in effect or as hereafter
amended.

     

    2.17.       “Fair Market
Value” of a share of
Common Stock as of a particular date shall mean (i) the closing sale price
reported for a share of Common Stock on such date on the national securities
exchange or national market system on which such stock is principally traded, or
if such date is not a trading day, the trading day immediately preceding such
date on which a sale was reported, or (ii) if the shares of Common Stock are not
then listed on a national securities exchange or national market system, or the
value of such shares is not otherwise determinable, such value as determined by
the Board in good faith in its sole discretion (but in any event not less than
fair market value within the meaning of Section 409A).


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    2.18.       “Family
Member” means a person who
is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent,
grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including
adoptive relationships, of the applicable individual, any person sharing the
applicable individual’s household (other than a tenant or employee), a trust in
which any one or more of these persons have more than fifty percent of the
beneficial interest, a foundation in which any one or more of these persons (or
the applicable individual) control the management of assets, and any other
entity in which one or more of these persons (or the applicable individual) own
more than fifty percent of the voting interests.

     

    2.19.       “Grant
Date” means, as determined
by the Designees or Committee, the latest to occur of (i) the date as of
which the Designees or Committee approves an Award, (ii) the date on which
the recipient of an Award first becomes eligible to receive an Award under
Section 6 hereof, or (iii) such other date as may be specified by the
Designees or Committee in the Award Agreement.

     

    2.20.       “Grantee” means a person who receives or holds
an Award under the Plan.

     

    2.21.       “Incentive Stock
Option” means an
“incentive stock option” within the meaning of Section 422 of the Code, or
the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.

     

    2.22.       “Non-Qualified Stock
Option” means an Option
that is not an Incentive Stock Option.

     

    2.23.       “Option”
means an option to
purchase one or more shares of Stock pursuant to the Plan.

     

    2.24.       “Option
Price” means the exercise
price for each share of Stock subject to an Option.

     

    2.25.       “Outside
Director” means a member
of the Board who is not an officer or employee of the Company or an Affiliate,
determined in accordance with the requirements of Section 162(m) of the
Code.

     

    2.26.        “Performance
Award” means an Award made
subject to the attainment of performance goals (as described in Section 13)
over a performance period of up to ten (10) years.

     

    2.27.       “Plan” means this China Fire & Security
Group,, Inc. 2008 Omnibus Long-Term Incentive Plan.

     

    2.28.       “PRC” means People’s Republic of China,
excluding Hong Kong, Macau and Taiwan.

     

    2.29.       “Purchase
Price” means the purchase
price for each share of Stock pursuant to a grant of Restricted Stock or
Unrestricted Stock.

     

    2.30.       “Reporting
Person” means a person who
is required to file reports under Section 16(a) of the Exchange
Act.

     

    2.31.       “Restricted
Stock” means shares of
Stock, awarded to a Grantee pursuant to Section 10
hereof.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    2.32.       “Restricted Stock
Unit” means a bookkeeping
entry representing the equivalent of shares of Stock, awarded to a Grantee
pursuant to Section 10 hereof.

     

    2.33.       “SAR Exercise
Price” means the per share
exercise price of a SAR granted to a Grantee under Section 9
hereof.

     

    2.34.       “Section
409A” shall mean
Section 409A of the Code and all formal guidance and regulations
promulgated thereunder.

     

    2.35.       “Securities
Act” means the Securities
Act of 1933, as now in effect or as hereafter amended.

     

    2.36.       “Separation from
Service” means a
termination of Service by a Service Provider, as determined by the Designees or
Committee, which determination shall be final, binding and conclusive; provided
if any Award governed by Section 409A is to be distributed on a Separation
from Service, then the definition of Separation from Service for such purposes
shall comply with the definition provided in
Section 409A.

     

    2.37.       “Service” means service as a Service Provider to
the Company or an Affiliate. Unless otherwise stated in the applicable Award
Agreement, a Grantee’s change in position or duties shall not result in
interrupted or terminated Service, so long as such Grantee continues to be a
Service Provider to the Company or an Affiliate.

     

    2.38.        “Service
Provider” means an
employee, officer or director of the Company or an Affiliate, or a consultant or
adviser currently providing services to the Company or an
Affiliate.

     

    2.39.       “Stock Appreciation
Right” or “SAR” means a
right granted to a Grantee under Section 9 hereof.

     

    2.40.        “Subsidiary” means any “subsidiary corporation” of
the Company within the meaning of Section 424(f) of the
Code.

     

    2.41.       “Termination
Date” means the date upon
which an Option shall terminate or expire, as set forth in Section 8.3
hereof.

     

    2.42.       “Ten Percent
Stockholder” means an
individual who owns more than ten percent (10%) of the total combined
voting power of all classes of outstanding stock of the Company, its parent or
any of its Subsidiaries. In determining stock ownership, the attribution rules
of Section 424(d) of the Code shall be applied.

     

    2.43.       “Unrestricted
Stock” means an Award
pursuant to Section 11 hereof.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        	
                3.

              	
                ADMINISTRATION
      OF THE PLAN

              


      

    

     

    3.1.        
General.

     


    The
Designees or Committee shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company’s certificate of
incorporation and bylaws and applicable law. The Designees or Committee shall
have full power and authority to take all actions and to make all determinations
required or provided for under the Plan, any Award or any Award Agreement, and
shall have full power and authority to take all such other actions and make all
such other determinations not inconsistent with the specific terms and
provisions of the Plan that the Designees or Committee deems to be necessary or
appropriate to the administration of the Plan. The interpretation and
construction by the Designees or Committee of any provision of the Plan, any
Award or any Award Agreement shall be final, binding and conclusive. Without
limitation, the Designees or Committee shall have full and final authority,
subject to the other terms and conditions of the Plan, to:

     

    (i)
designate Grantees;

     

    (ii)
determine the type or types of Awards to be made to a Grantee;

     

    (iii)
determine the number of shares of Stock to be subject to an Award;

     

    (iv)
establish the terms and conditions of each Award (including, but not limited to,
the Option Price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, and
any terms or conditions that may be necessary to qualify Options as Incentive
Stock Options);

     

    (v)
prescribe the form of each Award Agreement; and

     

    (vi)
amend, modify, or supplement the terms of any outstanding Award including the
authority, in order to effectuate the purposes of the Plan, to modify Awards to
foreign nationals or individuals who are employed outside the United States
to recognize differences in local law, tax policy, or custom.

     

    Notwithstanding
the foregoing, no amendment or modification may be made to an outstanding Option
or SAR that (i)  causes the Option or SAR to become subject to
Section 409A, (ii) reduces the Option Price or SAR Exercise Price,
either by lowering the Option Price or SAR Exercise Price or by canceling the
outstanding Option or SAR and granting a replacement Option or SAR with a lower
Option Price or SAR Exercise Price or (iii) would be treated as a repricing
under the rules of the exchange upon which the Company’s Stock trades, without,
with respect to item (i), the Grantee’s written prior approval, and with respect
to items (ii) and (iii), without the approval of the stockholders of the
Company, provided, that, appropriate adjustments may be made to outstanding
Options and SARs pursuant to Section 15.

     

    The
Company may retain the right in an Award Agreement to cause a forfeiture of the
gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any employment agreement,
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee. The Company may retain the
right in an Award Agreement to cause a forfeiture of the gain realized by a
Grantee, if the Grantee voluntarily terminates his employment with the Company.
Furthermore, the Company may annul an Award if the Grantee is terminated for
Cause as defined in the applicable Award Agreement or the Plan, as applicable.
The grant of any Award may be contingent upon the Grantee executing the
appropriate Award Agreement.

     

    3.2.        
Deferral
Arrangement.

     

    The
Designees or Committee may permit or require the deferral of any Award payment
into a deferred compensation arrangement, subject to such rules and procedures
as it may establish and in accordance with Section 409A, which may include
provisions for the payment or crediting of interest or dividend equivalents,
including converting such credits into deferred Stock units.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3.        
No
Liability.

    


    No member
of the Board or of the Designees or Committee shall be liable for any action or
determination made in good faith with respect to the Plan, any Award or Award
Agreement.

     

    3.4.        
Book
Entry.

     

    Notwithstanding
any other provision of this Plan to the contrary, the Company may elect to
satisfy any requirement under this Plan for the delivery of stock certificates
through the use of book-entry.

     

    
      
        	
                4.

              	
                STOCK SUBJECT TO THE
      PLAN

              


      

    

     

    Subject
to adjustment as provided in Section 15 hereof, the
maximum number of shares of Stock available for issuance under the Plan shall be
2,000,000. All such
shares of Stock available for issuance under the Plan shall be available for
issuance pursuant to Incentive Stock Options. Stock issued or to be issued under
the Plan shall be authorized but unissued shares; or, to the extent permitted by
applicable law, issued shares that have been reacquired by the Company. The
maximum number of Common Stock that will be awarded to any one Grantee during
any calendar year shall not exceed 300,000.

     

    The
Designees or Committee may adopt reasonable procedures for making adjustments in
accordance with Section 15. If the Option
Price of any Option granted under the Plan, or if pursuant to Section 16.3 the
withholding obligation of any Grantee with respect to an Option or other Award,
is satisfied by tendering shares of Stock to the Company (by either actual
delivery or by attestation) or by withholding shares of Stock, the number of
shares of Stock issued net of the shares of Stock tendered or withheld shall be
deemed delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan. To the extent that an Award under
the Plan is canceled, expired, forfeited, settled in cash, settled by issuance
of fewer shares than the number underlying the Award, or otherwise terminated
without delivery of shares to the Grantee, the shares retained by or returned to
the Company will be available under the Plan; and shares that are withheld from
such an Award or separately surrendered by the Grantee in payment of any
exercise price or taxes relating to such an Award shall be deemed to constitute
shares not delivered to the Grantee and will be available under the Plan. In
addition, in the case of any Award granted in assumption of or in substitution
for an award of a company or business acquired by the Company or a Subsidiary or
Affiliate or with which the Company or a Subsidiary or Affiliate combines,
shares issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan.

     

    
      
        	
                5.

              	
                EFFECTIVE
      DATE, DURATION AND
      AMENDMENTS

              


      

    

     

    5.1.        
Term.

     

    The Plan
shall be effective as of the Effective Date and shall terminate on the ten
(10) year anniversary of the Effective Date, and may be terminated on any
earlier date as provided in Section 5.2.

     

    5.2.         Amendment and
Termination of the Plan.

     

    The Board
may, at any time and from time to time, amend, suspend, or terminate the Plan as
to any Awards which have not been made. An amendment shall be contingent on
approval of the Company’s stockholders to the extent stated by the Board,
required by applicable laws, regulations and rules, as amended, or required by
applicable stock exchange listing requirements. No Awards shall be made after
termination of the Plan. No amendment, suspension, or termination of the Plan
shall, without the consent of the Grantee, impair rights or obligations under
any Award theretofore awarded.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        	
                6.

              	
                AWARD ELIGIBILITY AND
      LIMITATIONS

              


      

    

     

    6.1.        
Service Providers and
Other Persons.

     

    Subject
to this Section 6,
Awards may be made to any Service Provider, including any Service Provider who
is an officer or director of the Company or of any Affiliate, as the Designees
or Committee shall determine and designate from time to time in its
discretion.

     

    6.2.       
Successive
Awards.

     

    An
eligible person may receive more than one Award, subject to such restrictions as
are provided herein.

     

    6.3.        
Stand-Alone,
Additional, Tandem, and Substitute Awards.

     

    Awards
may, in the discretion of the Designees or Committee, be granted either alone or
in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any Affiliate, or
any business entity to be acquired by the Company or an Affiliate, or any other
right of a Grantee to receive payment from the Company or any Affiliate. Such
additional, tandem, and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award, the
Designees or Committee shall have the right to require the surrender of such
other Award in consideration for the grant of the new Award. The Board shall
have the right, in its discretion, to make Awards in substitution or exchange
for any other award under another plan of the Company, any Affiliate, or any
business entity to be acquired by the Company or an Affiliate. In addition,
subject to the sole discretion of the Designees or Committee from time to time,
Awards may be granted in lieu of cash compensation, including in lieu of cash
amounts payable under other plans of the Company or any Affiliate, in which the
value of Stock subject to the Award is equivalent in value to the cash
compensation (for example, Restricted Stock Units or Restricted
Stock).

     

    
      
        	
                7.

              	
                AWARD
      AGREEMENT

              


      

    

     

    Each
Award shall be evidenced by an Award Agreement, in such form or forms as the
Designees or Committee shall from time to time determine. Without limiting the
foregoing, an Award Agreement may be provided in the form of a notice which
provides that acceptance of the Award constitutes acceptance of all terms of the
Plan and the notice. Award Agreements granted from time to time or at the same
time need not contain similar provisions but shall be consistent with the terms
of the Plan. Each Award Agreement evidencing an Award of Options shall specify
whether such Options are intended to be Non-Qualified Stock Options or Incentive
Stock Options, and in the absence of such specification such options shall be
deemed Non-Qualified Stock Options.

     

    
      
        	
                8.

              	
                TERMS AND CONDITIONS OF
      OPTIONS

              


      

    

     

    8.1.        
Option
Price.

     

    The
Option Price of each Option shall be fixed by the Designees or Committee and
stated in the related Award Agreement. The Option Price of each Incentive Stock
Option shall be at least the Fair Market Value of a share of Stock on the Grant
Date; provided,
however, that
(i) in the event that a Grantee is a Ten Percent Stockholder as of the
Grant Date, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than 110 percent of
the Fair Market Value of a share of Stock on the Grant Date, and (ii) with
respect to Awards made in substitution for or in exchange for awards made by an
entity acquired by the Company or an Affiliate, the Option Price does not need
to be at least the Fair Market Value on the Grant Date. In no case shall the
Option Price of any Option be less than the par value of a share of
Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.2.        
Vesting.

    


    Subject
to Section 8.3
hereof, each Option shall become exercisable at such times and under such
conditions (including without limitation performance requirements) as shall be
determined by the Designees or Committee and stated in the Award Agreement. For
purposes of this Section 8.2, fractional
numbers of shares of Stock subject to an Option shall be rounded down to the
next nearest whole number.

     

    8.3.        
Term.

     

    Each
Option shall terminate, and all rights to purchase shares of Stock thereunder
shall cease, upon the expiration of ten years from the Grant Date,
or under such circumstances and on such date prior thereto as is set forth in
the Plan or as may be fixed by the Designees or Committee and stated in the
related Award Agreement (the “Termination Date”).

     

    8.4.        
Separation
from Service.

     

    Except as
otherwise provided in an Award Agreement, if a Grantee’s employment with or
service to the Company or Affiliate terminates for any reason other than Cause,
(i) Options granted to such Grantee, to the extent that they are exercisable at
the time of such termination, shall remain exercisable for a period of not more
than 90 days after such termination (one year in the case of termination by
reason of death or Disability), on which date they shall expire, and (ii)
Options granted to such Grantee, to the extent that they were not exercisable at
the time of such termination, shall expire on the date of such termination. In
the event of the termination of a Grantee’s employment or service for Cause, all
outstanding Options granted to such Grantee shall expire on the date of such
termination. Notwithstanding the foregoing, no Option shall be exercisable after
the expiration of its term.

     

    8.5.         Limitations on
Exercise of Option.

     

    Notwithstanding
any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, (i) prior to the date the Plan is approved by the Board
and stockholders of the Company as provided herein or (ii) after the
occurrence of an event referred to in Section 15 hereof which
results in termination of the Option.

     

    8.6.         Method of
Exercise.

     

    An Option
that is exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal
office, on the form specified by the Company. Such notice shall specify the
number of shares of Stock with respect to which the Option is being exercised
and which exercise method shall be , determined by the Designees or Committees
solely in its discretion, and the Designees or Committee may approve payment in
whole or in part by an alternative method, including (i) by means of any
cashless exercise procedure approved by the Designees or Committee, (ii) in the
form of unrestricted shares of Stock already owned by the Grantee on the date of
surrender to the extent the shares of Stock having a Fair Market Value on the
date of surrender equal to the aggregate Option Price of the shares as to which
such Option shall be exercised, provided that, in the case of
an Incentive Stock Option, the right to make payment in the form of already
owned shares of Stock may be authorized only at the time of grant, or (iii) any
combination of the foregoing.

     

    8.7.         Rights of Holders of
Options.

     

    Unless
otherwise stated in the related Award Agreement, an individual holding or
exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock ) until the shares of Stock covered thereby are fully
paid and issued to him. Except as provided in Section 15 hereof, no
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date of such issuance.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    8.8.         Delivery of Stock
Certificates.

     

    Promptly
after the exercise of an Option by a Grantee and the payment in full of the
Option Price, such Grantee shall be entitled to the issuance of a stock
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option.

     

    8.9.         Transferability of
Options.

     

    Except as
provided in Section 8.10, during the
lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetence, the Grantee’s guardian or legal representative) may exercise an
Option. Except as provided in Section 8.10, no Option
shall be assignable or transferable by the Grantee to whom it is granted, other
than by will or the laws of descent and distribution.

     

    8.10.     
 Family
Transfers.

     

    If
authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of an Option which is not an Incentive Stock Option to any
Family Member. For the purpose of this Section 8.10, a “not for
value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or
(iii) a transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 8.10, any such
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Grantee in
accordance with this Section 8.10 or by will
or the laws of descent and distribution. Notwithstanding the foregoing, the
Designees or Committee may also provide that Options may be transferred to
persons other than Family Members. The events of termination of Service of Section 8.4 hereof shall
continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the
periods specified, in Section 8.4.

     

    8.11.      Limitations on
Incentive Stock Options.

     

    An Option
shall constitute an Incentive Stock Option only (i) if the Grantee of such
Option is an employee of the Company or any Subsidiary of the Company;
(ii) to the extent specifically provided in the related Award Agreement;
and (iii) to the extent that the aggregate Fair Market Value (determined at
the time the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000. This limitation
shall be applied by taking Options into account in the order in which they were
granted.

     

    
      	
              9.

            	
              TERMS
      AND CONDITIONS OF STOCK APPRECIATION
RIGHTS

            


    

     

    9.1.        
Right to
Payment.

     

    A SAR
shall confer on the Grantee a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one share of Stock on the date of
exercise over (ii) the SAR Exercise Price, as determined by the Designees
or Committee. The Award Agreement for an SAR shall specify the SAR Exercise
Price, which shall be fixed on the Grant Date. SARs may be granted alone or in
conjunction with all or part of an Option or at any subsequent time during the
term of such Option or in conjunction with all or part of any other Award. A SAR
granted in tandem with an outstanding Option following the Grant Date of such
Option may have a grant price that is equal to the Option Price.

     


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    9.2.        
Other
Terms.

     

    The
Designees or Committee shall determine at the Grant Date or thereafter, the time
or times at which and the circumstances under which a SAR may be exercised in
whole or in part (including based on achievement of performance goals and/or
future service requirements), the time or times at which SARs shall cease to be
or become exercisable following termination of Service or upon other conditions,
the method of exercise, whether or not a SAR shall be in tandem or in
combination with any other Award, and any other terms and conditions of any
SAR.

     

    9.3.        
Term of
SARs. The term of a SAR
granted under the Plan shall be determined by the Designees or Committee, in its
sole discretion; provided, however, that such term shall not exceed ten years.

     

    9.4.         Payment of SAR
Amount. Upon exercise of a
SAR, a Grantee shall be entitled to receive payment from the Company in an
amount determined by multiplying:

     

    (i) the
difference between the Fair Market Value of a Share on the date of exercise over
the SAR Exercise Price; by

    


    (ii) the
number of Shares with respect to which the SAR is exercised.

    


    SARs
shall be settled in cash or Stock of equivalent
value, as determined by the Designees or Committee and set forth in the Award
Agreement.

     

    
      	
              10.

            	
              TERMS
      AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK
    UNITS

            


    

     

    10.1.       Restrictions.

     

    At the
time of grant, the Designees or Committee may, in its sole discretion, establish
a period of time (a “restricted period”) and any additional restrictions
including the satisfaction of corporate or individual performance objectives
applicable to an Award of Restricted Stock or Restricted Stock Units in
accordance with Section 13.1 and 13.2. Each Award of Restricted
Stock or Restricted Stock Units may be subject to a different restricted period
and additional restrictions. Neither Restricted Stock nor Restricted Stock Units
may be sold, transferred, assigned, pledged or otherwise encumbered or disposed
of during the restricted period or prior to the satisfaction of any other
applicable restrictions.

     

    10.2.       Restricted Stock
Certificates.

     

    The
Company shall issue stock, in the name of each Grantee to whom Restricted Stock
has been granted, stock certificates or other evidence of ownership representing
the total number of shares of Restricted Stock granted to the Grantee, as soon
as reasonably practicable after the Grant Date. The Designees or Committee may
provide in an Award Agreement that either (i) the Secretary of the Company
shall hold such certificates for the Grantee’s benefit until such time as the
Restricted Stock is forfeited to the Company or the restrictions lapse, or
(ii) such certificates shall be delivered to the Grantee, provided, however, that such
certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.3.       Rights of Holders of
Restricted Stock.

    


    Unless
the Designees or Committee otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Stock and the right to
receive any dividends declared or paid with respect to such Stock. The Designees
or Committee may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same
restrictions applicable to such Restricted Stock. All distributions, if any,
received by a Grantee with respect to Restricted Stock as a result of any stock
split, stock dividend, combination of shares, or other similar transaction shall
be subject to the restrictions applicable to the original Award.

     

    10.4.       Rights of Holders of
Restricted Stock Units.

     

    
      	 
      	
              10.4.1.

            	
              Settlement
      of Restricted Stock Units.

            


    

     

    Restricted
Stock Units may be settled in cash or Stock, as determined by the Designees or
Committee and set forth in the Award Agreement. The Award Agreement shall also
set forth whether the Restricted Stock Units shall be settled (i) within
the time period specified in Section 16.9.1 for short
term deferrals or (ii) otherwise within the requirements of
Section 409A, in which case the Award Agreement shall specify upon which
events such Restricted Stock Units shall be settled.

     

    
      	 
      	
              10.4.2.

            	
              Voting
      and Dividend Rights.

            


    

     

    Holders
of Restricted Stock Units shall have no rights as stockholders of the Company.
The Designees or Committee may provide in an Award Agreement that the holder of
such Restricted Stock Units shall be entitled to receive, upon the Company’s
payment of a cash dividend on its outstanding Stock, a cash payment for each
Restricted Stock Unit held equal to the per-share dividend paid on the Stock,
which may be deemed reinvested in additional Restricted Stock Units at a price
per unit equal to the Fair Market Value of a share of Stock on the date that
such dividend is paid to shareholders.

     

    
      	 
      	
              10.4.3.

            	
              Creditor’s
      Rights.

            


    

     

    A holder
of Restricted Stock Units shall have no rights other than those of a general
creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the
applicable Award Agreement.

     

    10.5.       Termination of
Service.

     

    Unless
the Designees or Committee otherwise provides in an Award Agreement or in
writing after the Award Agreement is issued, upon the termination of a Grantee’s
Service, any Restricted Stock or Restricted Stock Units held by such Grantee
that have not vested, or with respect to which all applicable restrictions and
conditions have not lapsed, shall immediately be deemed forfeited, and the
Grantee shall have no further rights with respect to such Award.

     

    10.6.       Purchase of
Restricted Stock.

     

    The
Grantee shall be required, to the extent required by applicable law, to purchase
the Restricted Stock from the Company at a Purchase Price equal to the greater
of (i) the aggregate par value of the shares of Stock represented by such
Restricted Stock or (ii) the Purchase Price, if any, specified in the
related Award Agreement. If specified in the Award Agreement, the Purchase Price
may be deemed paid by Services already rendered. The Purchase Price shall be
payable in a form described in Section 12 or, in the
discretion of the Designees or Committee, in consideration for past Services
rendered.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.7.       Delivery of
Stock.

    


    Upon the
expiration or termination of any restricted period and the satisfaction of any
other conditions prescribed by the Designees or Committee, the restrictions
applicable to shares of Restricted Stock or Restricted Stock Units settled in
Stock shall lapse, and, unless otherwise provided in the Award Agreement, a
stock certificate for such shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case
may be.

     

    
      
        	
                11.

              	
                TERMS AND CONDITIONS OF
      UNRESTRICTED STOCK
AWARDS

              


      

    

     

    The
Designees or Committee may, in its sole discretion, grant (or sell at par value
or such other higher purchase price determined by the Designees or Committee) an
Award of Unrestricted Stock to any Grantee pursuant to which such Grantee may
receive shares of Stock free of any restrictions (“Unrestricted Stock”) under
the Plan. Awards of Unrestricted Stock may be granted or sold as described in
the preceding sentence in respect of past Services rendered and other valid
consideration, or in lieu of, or in addition to, any cash compensation due to
such Grantee. Unless otherwise provided by the Designees or Committee, Awards of
Unrestricted Stock shall be paid within the time period specified in Section 16.9.1 for
short-term deferrals.

     

    
      
        	
                12.

              	
                FORM OF PAYMENT FOR OPTIONS,
      RESTRICTED STOCK AND STOCK APPRECIATION
  RIGHTS

              


      

    

     

    12.1.      General
Rule.

     

    Payment
of the Option Price for the shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company, except as provided in this Section 12.

     

    12.2.      Surrender of
Stock.

     

    To the
extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender to the Company of
shares of Stock, which shares shall be valued, for purposes of determining the
extent to which the Option Price or Purchase Price has been paid thereby, at
their Fair Market Value on the date of exercise or surrender.

     

    12.3.      Cashless
Exercise.

     

    With
respect to an Option only (and not with respect to Restricted Stock), to the
extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price may be made all or in part by delivery (on a form
acceptable to the Designees or Committee) of an irrevocable direction to a
licensed securities broker acceptable to the Company to sell shares of Stock and
to deliver all or part of the sales proceeds to the Company in payment of the
Option Price and any withholding taxes described in Section 16.3.

     

    12.4.      Payment of
Exercising SAR Rights.

     

    In the
event that the SAR rights are granted to a Grantee, to the extent permitted by
law and to the extent the Award Agreement so provides, the payment of the SAR
amount may be made all or in part by cash or delivery of Stock of equivalent
value, at the sole discretion of the Designees or Committee, in payment of any
withholding taxes described in Section 16.3.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.5.      Other Forms of
Payment.

    


    To the
extent the Award Agreement so provides, as determined by the Designees or
Committee in its sole discretion, payment of the Option Price or the Purchase
Price may be made in any other form that is consistent with applicable laws,
regulations and rules.

     

    
      
        	
                13.

              	
                TERMS AND CONDITIONS OF
      PERFORMANCE AND ANNUAL INCENTIVE
AWARDS

              


      

    

     

    13.1.      Performance
Conditions.

     

    The right
of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be
specified by the Designees or Committee. The Designees or Committee may use such
business criteria and other measures of performance as it may deem appropriate
in establishing any performance conditions, and may exercise its discretion to
reduce the amounts payable under any Award subject to performance conditions,
except as limited under Sections 13.2 hereof in the
case of a Performance Award or Annual Incentive Award intended to qualify under
Code Section 162(m).

     

    
      	 
      	
              13.2.

            	
              Performance
      or Annual Incentive Awards Granted to Designated Covered
      Employees.

            


    

     

    If and to
the extent that the Designees or Committee determines that a Performance or
Annual Incentive Award to be granted to a Grantee who is designated by the
Designees or Committee as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Code Section 162(m), the
grant, exercise and/or settlement of such Performance or Annual Incentive Award
shall be contingent upon achievement of pre-established performance goals and
other terms set forth in this Section 13.2.

     

    
      	 
      	
              13.2.1.

            	
              Performance
      Goals Generally.

            


    

     

    The
performance goals for such Performance or Annual Incentive Awards shall consist
of one or more business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the Designees or
Committee consistent with this Section 13.2. Performance
goals shall be objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the requirement that
the level or levels of performance targeted by the Designees or Committee result
in the achievement of performance goals being “substantially uncertain.” The
Designees or Committee may determine that such Performance or Annual Incentive
Awards shall be granted, exercised and/or settled upon achievement of any one
performance goal or that two or more of the performance goals must be achieved
as a condition to grant, exercise and/or settlement of such Performance or
Annual Incentive Awards. Performance goals may differ for Performance or Annual
Incentive Awards granted to any one Grantee or to different
Grantees.

     

    
      	 
      	
              13.2.2.

            	
              Business
      Criteria.

            


    

     

    One or
more of the following business criteria for the Company, on a consolidated
basis, and/or specified subsidiaries or business units of the Company (except
with respect to the total stockholder return and earnings per share criteria),
shall be used exclusively by the Designees or Committee in establishing
performance goals for such Performance or Annual Incentive Awards:
(i) total stockholder return; (ii) such total stockholder return as
compared to total return (on a comparable basis) of a publicly available index
such as, but not limited to, the Standard & Poor’s 500 Stock Index;
(iii) net income; (iv) pretax earnings; (v) earnings before
interest expense, taxes, depreciation and amortization; (vi) pretax
operating earnings after interest expense and before bonuses, service fees, and
extraordinary or special items; (vii) operating margin;
(viii) earnings per share; (ix) return on equity; (x) return on
capital; (xi) return on investment; (xii) operating earnings;
(xiii) working capital; (xiv) ratio of debt to stockholders’ equity
and (xv) revenue.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      	 
      	
              13.2.3.

            	
              Timing
      for Establishing Performance Goals.

            


    

     

    Performance
goals shall be established not later than 90 days after the beginning of any
performance period applicable to such Performance or Annual Incentive Awards, or
at such other date as may be required or permitted for “performance-based
compensation” under Code Section 162(m).

     

    
      	 
      	
              13.2.4.

            	
              Settlement
      of Performance or Annual Incentive Awards; Other
  Terms.

            


    

     

    Settlement
of such Performance or Annual Incentive Awards shall be in cash, , SAR,
Restricted Stock, Restricted Stock Units, other Awards or other property, in the
discretion of the Designees or Committee. The Designees or Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Performance or Annual Incentive Awards. The Designees or Committee
shall specify the circumstances in which such Performance or Annual Incentive
Awards shall be paid or forfeited in the event of termination of Service by the
Grantee prior to the end of a performance period or settlement of Performance
Awards.

     

    13.3.      Written
Determinations.

     

    All
determinations by the Designees or Committee as to the establishment of
performance goals, the amount of any Performance Award pool or potential
individual Performance Awards and as to the achievement of performance goals
relating to Performance Awards, and the amount of any Annual Incentive Award
pool or potential individual Annual Incentive Awards and the amount of final
Annual Incentive Awards, shall be made in writing in the case of any Award
intended to qualify under Code Section 162(m). To the extent permitted by
Code Section 162(m), the Designees or Committee may delegate any
responsibility relating to such Performance Awards or Annual Incentive
Awards.

     

    13.4.     
Status of
Section 13.2 Awards Under Code Section 162(m).

     

    It is the
intent of the Company that Performance Awards and Annual Incentive Awards under
Section 13.2 hereof
granted to persons who are designated by the Designees or Committee as likely to
be Covered Employees within the meaning of Code Section 162(m) and
regulations thereunder shall, if so designated by the Designees or Committee,
constitute “qualified performance-based compensation” within the meaning of Code
Section 162(m) and regulations thereunder. Accordingly, the terms of Section 13.2, including
the definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. The foregoing notwithstanding, because the Designees or Committee
cannot determine with certainty whether a given Grantee will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Designees or Committee, at the time of grant of Performance Awards or an Annual
Incentive Award, as likely to be a Covered Employee with respect to that fiscal
year. If any provision of the Plan or any agreement relating to such Performance
Awards or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such
provision shall be construed or deemed amended to the extent necessary to
conform to such requirements.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                14.

              	
                REQUIREMENTS OF
      LAW

              


      

    

     

    14.1.      General.


    The
Company shall not be required to sell or issue any shares of Stock under any
Award if the sale or issuance of such shares would constitute a violation by the
Grantee, any other individual exercising an Option, or the Company of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations and the
laws and regulations of PRC. If at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of any shares
subject to an Award upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares hereunder, no shares of Stock may be
issued or sold to the Grantee or any other individual exercising an Option
pursuant to such Award unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Company, and any delay caused thereby shall in no way affect
the date of termination of the Award. Specifically, in connection with the
Securities Act, upon the exercise of any Option or the delivery of any shares of
Stock underlying an Award, unless a registration statement under such Act is in
effect with respect to the shares of Stock covered by such Award, the Company
shall not be required to sell or issue such shares unless the Designees or
Committee has received evidence satisfactory to it that the Grantee or any other
individual exercising an Option may acquire such shares pursuant to an exemption
from registration under the Securities Act. Any determination in this connection
by the Designees or Committee shall be final, binding, and conclusive. The
Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act. The Company shall not be
obligated to take any affirmative action in order to cause the exercise of an
Option or the issuance of shares of Stock pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until
the shares of Stock covered by such Option are registered or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction apply) shall be deemed conditioned upon the effectiveness
of such registration or the availability of such an exemption.

     

    14.2.      Rule
16b-3.

     

    During
any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
and the exercise of Options granted hereunder will qualify for the exemption
provided by Rule 16b-3 under the Exchange Act. To the extent that any provision
of the Plan or action by the Board or Designees or Committee does not comply
with the requirements of Rule 16b-3, it shall be deemed inoperative to the
extent permitted by law and deemed advisable by the Board, and shall not affect
the validity of the Plan. In the event that Rule 16b-3 is revised or replaced,
the Board may exercise its discretion to modify this Plan in any respect
necessary to satisfy the requirements of, or to take advantage of any features
of, the revised exemption or its replacement.

     

    
      
        	
                15.

              	
                EFFECT OF CHANGES IN
      CAPITALIZATION

              


      

    

     

    15.1.      Changes in
Stock.

     

    If the
number of outstanding shares of Stock is increased or decreased or the shares of
Stock are changed into or exchanged for a different number or kind of shares or
other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan shall be
adjusted proportionately and accordingly by the Company; provided that any such
adjustment shall comply with Section 409A. In addition, the number and kind
of shares for which Awards are outstanding shall be adjusted proportionately and
accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as
immediately before such event. Any such adjustment in outstanding Options or
SARs shall not change the aggregate Option Price or SAR Exercise Price payable
with respect to shares that are subject to the unexercised portion of an
outstanding Option or SAR, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price or SAR Exercise Price per share.
The conversion of any convertible securities of the Company shall not be treated
as an increase in shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (including an
extraordinary cash dividend but excluding a non-extraordinary dividend payable
in cash or in stock of the Company) without receipt of consideration by the
Company, the Company shall in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards
and/or (ii) the exercise price of outstanding Options and Stock
Appreciation Rights to reflect such distribution.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    15.2.      Definition of Change
in Control.

     

    Unless an
Award Agreement provides for a different meaning, a “Change in Control” shall
mean the occurrence of any of the following:

     

    
      
        
          	
                	
                  (i)

                	
                  Any ‘person’ (as such term is
      used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
      ‘beneficial owner’ (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Company representing more
      than fifty percent (50%)  of the total voting power represented by
      the Company’s then-outstanding voting securities, provided, however, that
      a Change in Control shall not be deemed to occur if an employee benefit
      plan (or a trust forming a part thereof) maintained by the Company,
      directly or indirectly, becomes the beneficial owner of more than fifty
      percent (50%) of the then-outstanding voting securities of the
      Company after such
acquisition; 

                


        

      

      
         

        
          	
                	
                  (ii)

                	
                  A majority of the members of the
      Board is replaced during any 12-month period commencing on the Effective
      Date, by directors whose appointment or election is not endorsed by a
      majority of the members of the Board prior to the date of the
      appointment; 

                


        

      

      
         

        
          	
                	
                  (iii)

                	
                  The consummation of a merger or
      consolidation of the Company with any other corporation, other than a
      merger or consolidation which would result in (a) the voting
      securities of the Company outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or being converted into
      voting securities of the surviving entity) at least fifty percent
      (50%) of the total voting power represented by the voting securities
      of the Company or such surviving entity outstanding immediately after such
      merger or consolidation; or (b) the directors of the Company
      immediately prior thereto continuing to represent at least fifty percent
      (50%) of the directors of the Company or such surviving entity
      immediately after such merger or consolidation;
      or 

                


        

      

      
         

        
          	
                	
                  (iv)

                	
                  The consummation of the sale or
      disposition by the Company of all or substantially all of the Company’s
      assets.

                


        

      

    

     

    Notwithstanding
the foregoing, if it is determined that an Award hereunder is subject to the
requirements of Section 409A, the Company will not be deemed to have undergone a
Change in Control unless the Company is deemed to have undergone a change in
control pursuant to the definition in Section 409A.

     

    15.3.      
Effect of
Change in Control; Corporate Transactions

     

    The
Designees or Committee shall determine the effect of a Change in Control upon
Awards, and such effect may be set forth in the appropriate Award Agreement.
 Unless an Award
Agreement explicitly provides otherwise, if the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or substantially all
of the Company’s assets other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the Designees or Committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the “Successor Board”), shall, as to outstanding Options and/or SARs,
either (i) make appropriate provision for the continuation of such Options
and/or SARs by substituting on an equitable basis for the Shares then subject to
such Options and/or SARs either the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) upon written
notice to the Grantees, provide that all Options and/or SARs must be exercised
(either to the extent then exercisable or, at the discretion of the Designees or
Committee or, upon a change of control of the Company, all Options and/or SARs
being made fully exercisable for purposes of this Section 15.3), within a
specified number of days of the date of such notice, at the end of which period
the Options and/or SARs shall terminate; or (iii) terminate all Options
and/or SARs in exchange for a cash payment equal to the excess of the Fair
Market Value of the Shares subject to such Options and/or SARs (either to the
extent then exercisable or, at the discretion of the Designees or Committee, all
Options and/or SARs being made fully exercisable for purposes of this Section
15.3) over the exercise price thereof.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    Unless an
Award Agreement explicitly provides otherwise, with respect to outstanding
grants of Restricted Stock, Restricted Stock Units and/or Unrestricted Stock,
the Designees or Committee or the Successor Board, shall either (i) make
appropriate provisions for the continuation of such grants of Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock by substituting on an equitable
basis for the Shares then subject to such Restricted Stock, Restricted Stock
Units and/or Unrestricted Stock either the consideration payable with respect to
the outstanding Shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity; or (ii) upon
written notice to the Grantees, provide that all grants of Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock must be accepted (to the extent
then subject to acceptance) within a specified number of days of the date of
such notice, at the end of which period the offer of the Restricted Stock,
Restricted Stock Units and/or Unrestricted Stock shall terminate; or (iii)
terminate all grants of Restricted Stock, Restricted Stock Units and/or
Unrestricted Stock in exchange for a cash payment equal to the excess of the
Fair Market Value of the Shares subject to such Restricted Stock, Restricted
Stock Units and/or Unrestricted Stock over the purchase price thereof, if any.
In addition, in the event of a Corporate Transaction, the Administrator may
waive any or all Company repurchase rights with respect to outstanding
Restricted Stock and/or Restricted Stock Units.

     

    15.4.      
Reorganization
Which Does Not Constitute a Change in Control.

     

    If the
Company undergoes any reorganization, merger, or consolidation of the Company
with one or more other entities which does not constitute a Change in Control,
any Option or SAR theretofore granted pursuant to the Plan shall pertain to and
apply to the securities to which a holder of the number of shares of Stock
subject to such Option or SAR would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price or SAR Exercise Price per share so
that the aggregate Option Price or SAR Exercise Price thereafter shall be the
same as the aggregate Option Price or SAR Exercise Price of the shares remaining
subject to the Option or SAR immediately prior to such reorganization, merger,
or consolidation. Subject to any contrary language in an Award Agreement, any
restrictions applicable to such Award shall apply as well to any replacement
shares received by the Grantee as a result of the reorganization, merger or
consolidation.

     

    15.5.      
Adjustments.

     

    Adjustments
under this Section 15 related to
shares of Stock or securities of the Company shall be made by the Designees or
Committee, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to
any such adjustment, and any fractions resulting from any such adjustment shall
be eliminated in each case by rounding downward to the nearest whole
share.

     

    15.6.      
No Limitations
on Company.

     

    The
making of Awards pursuant to the Plan shall not affect or limit in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                16.

              	
                GENERAL
      PROVISIONS

              


      

    

    


    16.1.      
Disclaimer of
Rights.

     

    No
provision in the Plan or in any Award Agreement shall be construed to confer
upon any individual the right to remain in the employ or service of the Company
or any Affiliate, or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the compensation or
other payments to any individual at any time, or to terminate any employment or
other relationship between any individual and the Company. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, no Award granted under the Plan shall
be affected by any change of duties or position of the Grantee, so long as such
Grantee continues to be a Service Provider, if applicable. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
Grantee or beneficiary under the terms of the Plan.

     

    16.2.      
Nonexclusivity
of the Plan.

     

    Neither
the adoption of the Plan nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any limitations upon the
right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
particular individuals), including, without limitation, the granting of stock
options as the Board in its discretion determines desirable.

     

    16.3.      
Withholding
Taxes.

     

    The
Company or an Affiliate, as the case may be, shall have the right to deduct from
payments of any kind otherwise due to a Grantee any federal, state, or local
taxes of any kind required by applicable laws, regulations or rules to be
withheld (i) with respect to the vesting of or other lapse of restrictions
applicable to an Award, (ii) upon the issuance of any shares of Stock upon
the exercise of an Option, or (iii) pursuant to an Award. At the time of
such vesting, lapse, or exercise, the Grantee shall pay to the Company or the
Affiliate, as the case may be, any amount that the Company or the Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation.
Subject to the prior approval of the Company or the Affiliate, which may be
withheld by the Company or the Affiliate, as the case may be, in its sole
discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of
Stock otherwise issuable to the Grantee or (ii) by delivering to the
Company or the Affiliate shares of Stock already owned by the Grantee. The
shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares
of Stock used to satisfy such withholding obligation shall be determined by the
Company or the Affiliate as of the date that the amount of tax to be withheld is
to be determined. A Grantee who has made an election pursuant to this Section 16.3 may satisfy
his or her withholding obligation only with shares of Stock that are not subject
to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.

     

    16.4.      
Captions.

     

    The use
of captions in this Plan or any Award Agreement is for the convenience of
reference only and shall not affect the meaning of any provision of the Plan or
any Award Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    16.5.      
Other
Provisions.

    


    Each
Award Agreement may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Designees or Committee, in its sole
discretion.

     

    16.6.      
Number and
Gender.

     

    With
respect to words used in this Plan, the singular form shall include the plural
form, the masculine gender shall include the feminine gender, etc., as the
context requires.

     

    16.7.      
Severability.

     

    If any
provision of the Plan or any Award Agreement shall be determined to be illegal
or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

     

    16.8.      
Governing
Law.

     

    The
validity and construction of this Plan and the instruments evidencing the Awards
hereunder shall be governed by the laws of the State of Florida, USA, without
regard to any choice of law principles thereof or of any other
jurisdiction.

     

    16.9.      
Section 409A.

     

    
      
        	
                 
      

              	
                16.9.1.

              	
                Short-Term
      Deferrals.

              


      

    

     

    For each
Award intended to comply with the short-term deferral exception provided for
under Section 409A, the related Award Agreement shall provide that such
Award shall be paid out by the later of (i) the 15th day of
the third month following the Grantee’s first taxable year in which the Award is
no longer subject to a substantial risk of forfeiture or (ii) the 15th day of
the third month following the end of the Company’s first taxable year in which
the Award is no longer subject to a substantial risk of forfeiture.

     

    
      
        	
                 
      

              	
                16.9.2.

              	
                Adjustments.

              


      

    

     

    To the
extent that the Board determines that a Grantee would be subject to the
additional 20% tax imposed on certain deferred compensation arrangements
pursuant to Section 409A as a result of any provision of any Award, to the
extent permitted by Section 409A, such provision shall be deemed amended to
the minimum extent necessary to avoid application of such additional tax. The
Board shall determine the nature and scope of such amendment.

     

    16.10.    Stockholder
Approval; Effective Date of Plan.

     

    The Plan
shall be effective upon the its approval by the Board and stockholders. . No
award that is intended to qualify as performance-based compensation within the
meaning of section 162(m) of the Code shall be effective unless and until the
Plan is approved by the stockholders of the Company.