CAPE
      COASTAL TRADING CORPORATION

    2005
      EQUITY INCENTIVE PLAN

    


    SECTION
      1.

    DEFINITIONS

     

    As
      used
      herein, the following terms shall have the meanings indicated
      below:

     

    	(a)  	
            “Administrator” shall
              mean the Board, a Committee, or one or more officers designated by
              the
              Board or Committee, as the case may be.

          


     

    	(b)  	
            “Affiliate”
              shall mean a Parent or Subsidiary of the
              Company.

          


     

    	(c)  	
            “Award”
              shall mean any grant of an Option or Restricted Stock
              Award.

          


     

    	(d)  	
            “Board”
              shall mean the Board of Directors of the
              Company.

          


     

    	(e)  	
            “Committee”
              shall mean a Committee of two or more directors who shall be appointed
              by
              and serve at the pleasure of the Board. If the Company’s securities are
              registered pursuant to Section 12 of the Securities Exchange Act of
              1934,
              as amended, then, to the extent necessary for compliance with Rule
              16b-3,
              or any successor provision, each of the members of the Committee shall
              be
              a “non-employee director.” Solely for purposes of this Section 1(a),
              “non-employee director” shall have the same meaning as set forth in Rule
              16b-3, or any successor provision, as then in effect, of the General
              Rules
              and Regula-tions under the Securities Exchange Act of 1934, as amended.
              Further, to the extent necessary for compliance with the limitations
              set
              forth in Internal Revenue Code Section 162(m), each of the members
              of the
              Committee shall be an “outside director” within the meaning of Code
              Section 162(m) and the regulations issued
              thereunder.

          


     

    	(f)  	
            “Common
              Stock”
              shall mean common stock, par value $.001 per share, of the Company
              (subject to adjustment as described in Section 12) reserved for Options
              and Restricted Stock Awards pursuant to this Plan.
              

          


     

    	(g)  	
            The
              “Company”
              shall mean Cape Coastal Trading Corporation, a Delaware
              corporation.

          


     

    	(h)  	
            “Fair
              Market Value”
              as of any date shall mean (i) if such stock is listed on the Nasdaq
              National Market, Nasdaq SmallCap Market, or an established stock exchange,
              the price of such stock at the close of the regular trading session
              of
              such market or exchange on such date, as reported by The
              Wall Street Journal
              or
              a comparable reporting service, or, if no sale of such stock shall
              have
              occurred on such date, on the next preceding day on which there was
              a sale
              of stock; (ii) if such stock is not so listed on the Nasdaq National
              Market, Nasdaq SmallCap Market, or an established stock exchange, the
              average of the closing “bid” and “asked” prices quoted by the OTC Bulletin
              Board, the National Quotation Bureau, or any comparable reporting service
              on such date or, if there are no quoted “bid” and “asked” prices on such
              date, on the next preceding date for which there are such quotes; or
              (iii)
              if such stock is not publicly traded as of such date, the per share
              value
              as determined by the Board, or the Committee, in its sole discretion
              by
              applying principles of valuation with respect to the Company’s Common
              Stock.

          


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	(i)  	
            The
              “Internal
              Revenue Code”
              or “Code”
              shall mean the Internal Revenue Code of 1986, as amended from time
              to
              time.

          


     

    	(j)  	
            “Option”
              means an incentive stock option or nonqualified stock option granted
              pursuant to the Plan.

          


     

    	(k)  	
            “Parent”
              shall mean any corporation which owns, directly or indirectly in an
              unbroken chain, fifty percent (50%) or more of the total voting power
              of
              the Company’s outstanding stock.

          


     

    	(l)  	
            The
              “Participant”
              means (i) an employee of the Company or any Affiliate to whom an incentive
              stock option has been granted pursuant to Section 9, (ii) a consultant
              or
              advisor to or director, employee or officer of the Company or any
              Affiliate to whom a nonqualified stock option has been granted pursuant
              to
              Section 10, or (iii) a consultant or advisor to, or director, employee
              or
              officer of the Company or any Affiliate to whom a Restricted Stock
              Award
              has been granted pursuant to Section 11.

          


     

    	(m)  	
            The
              “Plan”
              means the 2005 Equity Incentive Plan, as amended hereafter from time
              to
              time, including the form of Option and Award Agreements as they may
              be
              modified by the Administrator from time to
              time.

          


     

    	(n)  	
            “Restricted
              Stock Award”
              shall mean any grant of restricted shares of Common Stock of the Company
              pursuant to Section 11 hereof.

          


     

    	(o)  	
            A
              “Subsidiary”
              shall mean any corporation of which fifty percent (50%) or more of
              the
              total voting power of outstanding stock is owned, directly or indirectly
              in an unbroken chain, by the Company.

          


     

    SECTION
      2.

    PURPOSE

     

    The
      Plan
      has been established to promote the interests of the Company, its Affiliates
      and
      its stockholders by (i) attracting and retaining exceptional employees,
      consultants and directors; (ii) motivating such employees, consultants and
      directors by means of performance-related incentives to achieve long-range
      performance goals; and (iii) enabling such employees, consultants and directors
      to participate in the long-term growth and financial success of the
      Company.

     

    It
      is the
      intention of the Company to carry out the Plan through the granting of Options
      which will qualify as “incentive stock options” under the provisions of Section
      422 of the Internal Revenue Code, or any successor provision, pursuant to
      Section 9 of this Plan, through the granting of Options that are nonqualified
      stock options pursuant to Section 10 of this Plan, and through the granting
      of
      Restricted Stock Awards pursuant to Section 11 of this Plan. With respect to
      incentive stock option options, adoption of this Plan shall be and is expressly
      subject to the condition of approval by the shareholders of the Company within
      twelve (12) months before or after the adoption of the Plan by the Board of
      Directors. Any incentive stock options granted after adoption of the Plan by
      the
      Board of Directors shall be treated as nonqualified stock options if shareholder
      approval is not obtained within such 12-month period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      3.

    EFFECTIVE
      DATE OF PLAN

     

    The
      Plan
      shall be effective as of the date of adoption by the Board of Directors, subject
      to approval by the shareholders of the Company as required in Section
      2.

     

    SECTION
      4.

    ADMINISTRATION

     

    The
      Plan
      shall be administered by the Board, by a Committee which may be appointed by
      the
      Board from time to time or by one or more officers designated by the Board
      or
      Committee (collectively referred to as the “Administrator”). Except as otherwise
      provided herein, the Administrator shall have all of the powers vested in it
      under the provisions of the Plan, including but not limited to exclusive
      authority (where applicable and within the limitations described in the Plan)
      to
      determine, in its sole discretion, whether an Award shall be granted; the
      individuals to whom, and the time or times at which, Awards shall be granted;
      the number of shares subject to each such Award; the option price; and any
      other
      terms and conditions of each Award. The Administrator shall have full power
      and
      authority to administer and interpret the Plan, to make and amend rules,
      regulations and guidelines for administering the Plan, to prescribe the form
      and
      condi-tions of the respective agreements evidencing each Award (which may vary
      from Participant to Participant) and to make all other determinations necessary
      or advisable for the administration of the Plan. The Administrator’s
      interpretation of the Plan, and all actions taken and determinations made by
      the
      Administrator pursuant to the power vested in it hereunder, shall be conclusive
      and binding on all parties concerned.

     

    No
      member
      of the Board or the Committee shall be liable for any action taken or
      determination made in good faith in connection with the administration of the
      Plan. In the event the Board appoints a Committee as provided hereunder, any
      action of the Committee with respect to the administration of the Plan shall
      be
      taken pursuant to a majority vote of the Committee members or pursuant to the
      written resolution of all Committee members.

     

    SECTION
      5.

    PARTICIPANTS

     

    The
      Administrator shall from time to time, at its discretion and without approval
      of
      the shareholders, designate those employees of the Company or any Affiliate
      to
      whom incentive stock options shall be granted pursuant to Section 9 of the
      Plan;
      those employees, officers, directors, consultants and advisors of the Company
      or
      of any Affiliate to whom nonqualified stock options shall be granted pursuant
      to
      Section 10 of the Plan; and those employees, officers, directors, consultants
      and advisors of the Company or any Affiliate to whom Restricted Stock Awards
      shall be granted pursuant to Section 11 of the Plan; provided, however, that
      consultants or advisors shall not be eligible to receive Awards hereunder unless
      such consultant or advisor renders bona fide services to the Company or
      Affiliate and such services are not in connection with the offer or sale of
      securities in a capital raising transaction and do not directly or indirectly
      promote or maintain a market for the Company’s securities. The Administrator may
      grant additional Awards under this Plan to some or all Participants then holding
      Awards or may grant Awards solely or partially to new Participants. In
      designating Participants, the Administrator shall also determine the number
      of
      shares of Common Stock subject to each Award. The Administrator from time to
      time designate individuals as being ineligible to participate in the
      Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      6.

    STOCK

     

    The
      Common Stock to be issued under this Plan shall consist of authorized but
      unissued shares of Common Stock. Two million five hundred thousand (2,500,000)
      shares of Common Stock shall be reserved and available for Awards under the
      Plan; provided, however, that the total number of shares of Common Stock
      reserved for Awards under this Plan shall be subject to adjustment as provided
      in Section 12 of the Plan; and provided, further, that all shares of Common
      Stock reserved and available under the Plan shall constitute the maximum
      aggregate number of shares of Common Stock that may be issued through incentive
      stock options. In the event that (i) any outstanding Option or Restricted Stock
      Award under the Plan expires for any reason, (ii) any portion of an outstanding
      Option is terminated prior to exercise, or (iii) any portion of a Restricted
      Stock Award expires is terminated prior to the lapsing of any risks of
      forfeiture on such Award, the shares of Stock allocable to the unexercised
      portion of such Option or to the forfeited portion of such Restricted Stock
      Award shall continue to be reserved for Options and Restricted Stock Awards
      under the Plan and may be optioned or awarded hereunder.

     

    SECTION
      7.

    DURATION
      OF PLAN

     

    Incentive
      stock options may be granted pursuant to the Plan from time to time during
      a
      period of ten (10) years from the effective date as defined in Section 3.
      Nonqualified stock options and Restricted Stock Awards may be granted pursuant
      to the Plan from time to time after the effective date of the Plan and until
      the
      Plan is discontinued or terminated by the Board. Any incentive stock option
      granted during such ten-year period and any nonqualified stock option or
      Restricted Stock Award granted prior to the termination of the Plan by the
      Board
      shall remain in full force and effect until the expiration of the option or
      award as specified in the written stock option or restricted stock award
      agreement and shall remain subject to the terms and conditions of this
      Plan.

     

    SECTION
      8.

    PAYMENT

     

    Participants
      may pay for shares of Common Stock upon exercise of Options granted pursuant
      to
      this Plan with (i) cash, (ii) personal check, (iii) certified check, (iv)
      mature, previously-owned shares of the Common Stock valued at such Common
      Stock’s then Fair Market Value, (v) broker-assisted exercise, or (vi) such other
      form of payment as may be authorized by the Administrator; provided, however,
      that Optionee shall not be permitted to pay the option price in the form of
      a
      broker-assisted exercise or in the form of mature, previously-acquired shares
      of
      Common Stock until after the effective date of an initial public offering of
      the
      Common Stock; and provided, further, that Optionee shall not be permitted to
      pay
      the option price in the form of a broker-assisted exercise or in the form of
      mature, previously-acquired shares of Common Stock if payment in such form
      will
      cause the Company to recognize a compensation expense under generally accepted
      accounting principles. The Administrator may, in its sole discretion, limit
      the
      forms of payment available to the Participant and may exercise such discretion
      any time prior to the termination of the option granted to the Participant
      or
      upon any exercise of the option by the Participant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
      purposes of this Section 8, “mature, previously-acquired shares of Common Stock”
      shall include shares of Common Stock that were acquired by the Participant
      through an open-market purchase, or have been owned by the Participant for
      a
      minimum of six months at the time of exercise or for such other period of time
      as may be required by generally accepted accounting principles. “Broker-assisted
      exercise” means a written notice pursuant to which the Participant, upon
      exercise of a stock option, irrevocably instructs a broker or dealer to sell
      a
      sufficient number of shares or loan a sufficient amount of money to pay all
      or a
      portion of the exercise price of such option and/or any related withholding
      tax
      obligations and to remit such sums to the Company, and directs the Company
      to
      deliver stock certificates to be issued upon such exercise directly to such
      broker or dealer.

     

    With
      respect to payment in the form of Common Stock of the Company, the Administrator
      may require advance approval or adopt such rules as it deems necessary to assure
      compliance with Rule 16b-3, or any successor provision, as then in effect,
      of
      the General Rules and Regulations under the Securities Exchange Act of 1934,
      if
      applicable.

     

     SECTION
      9.

    TERMS
      AND CONDITIONS OF INCENTIVE STOCK OPTIONS

     

    Each
      incentive stock option granted pursuant to this Section 9 shall be evidenced
      by
      a written incentive stock option agreement (the “Option Agreement”). The Option
      Agreement shall be in such form as may be approved from time to time by the
      Administrator and may vary from Participant to Participant; provided, however,
      that each Participant and each Option Agreement shall comply with and be subject
      to the following terms and con-ditions:

     

    (a) Number
      of Shares and Option Price.
      The
      Option Agreement shall state the total number of shares covered by the incentive
      stock option. Except as permitted by Code Section 424(d), or any successor
      provision, the option price per share shall not be less than one hundred percent
      (100%) of the per share Fair Market Value of the Common Stock on the date the
      Administrator grants the option; provided, however, that if a Participant owns
      stock possessing more than ten percent (10%) of the total combined voting power
      of all classes of stock of the Company or of its Parent or any Subsidiary,
      the
      option price per share of an incentive stock option granted to such Participant
      shall not be less than one hundred ten percent (110%) of the per share Fair
      Market Value of the Common Stock on the date of the grant of the option. The
      Administrator shall have full authority and discretion in establishing the
      option price and shall be fully protected in so doing.

     

    (b) Term
      and Exercisability of Incentive Stock Option.
      The
      term during which any incentive stock option granted under the Plan may be
      exercised shall be established in each case by the Administrator. Except as
      permitted by Code Section 424(d), or any successor provision, in no event shall
      any incentive stock option be exercisable during a term of more than ten (10)
      years after the date on which it is granted; provided, however, that if a
      Participant owns stock possessing more than ten percent (10%) of the total
      combined voting power of all classes of stock of the Company or of its Parent
      or
      any Subsidiary, the incentive stock option granted to such Participant shall
      be
      exercisable during a term of not more than five (5) years after the date on
      which it is granted.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Option Agreement shall state when the incentive stock option becomes exercisable
      and shall also state the maximum term during which the option may be exercised.
      In the event an incentive stock option is exercisable immediately, the manner
      of
      exercise of the option in the event it is not exercised in full immediately
      shall be specified in the Option Agreement. The Administrator may acceler-ate
      the exercisability of any incentive stock option granted hereunder which is
      not
      immediately exercisable as of the date of grant.

     

    (c) Nontransferability.
      No
      incentive stock option shall be transferable, in whole or in part, by the
      Participant other than by will or by the laws of descent and distribution.
      During the Participant’s lifetime, the incentive stock option may be exercised
      only by the Participant. If the Participant shall attempt any transfer of any
      incentive stock option granted under the Plan during the Participant’s lifetime,
      such transfer shall be void and the incentive stock option, to the extent not
      fully exercised, shall terminate.

     

    (d) No
      Rights as Shareholder.
      A
      Participant (or the Participant’s successor or successors) shall have no rights
      as a shareholder with respect to any shares covered by an Option until the
      date
      of the issuance of a stock certificate evidencing such shares. No adjustment
      shall be made for dividends (ordinary or extraordinary, whether in cash,
      securities or other property), distributions or other rights for which the
      record date is prior to the date such stock certificate is actually issued
      (except as otherwise provided in Section 12 of the Plan).

     

    (e) Withholding.
      The
      Company or its Affiliate shall be entitled to withhold and deduct from future
      wages of the Participant all legally required amounts necessary to satisfy
      any
      and all withholding and employment-related taxes attributable to the
      Participant’s exercise of an incentive stock option or a “disqualifying
      disposition” of shares acquired through the exercise of an incentive stock
      option as defined in Code Section 421(b). In the event the Participant is
      required under the Option Agreement to pay the Company, or make arrangements
      satisfactory to the Company respecting payment of, such withholding and
      employment-related taxes, the Administrator may, in its discretion and pursuant
      to such rules as it may adopt, permit the Participant to satisfy such
      obligation, in whole or in part, by electing to have the Company withhold shares
      of Option Stock otherwise issuable to the Participant as a result of the
      exercise of the incentive stock option having a Fair Market Value equal to
      the
      minimum required tax withholding, based on the minimum statutory withholding
      rates for federal and state tax purposes, including payroll taxes, that are
      applicable to the supplemental income resulting from such exercise. In no event
      may the Company or any Affiliate withhold shares having a Fair Market Value
      in
      excess of such statutory minimum required tax withholding. The Participant’s
      election to have shares withheld for this purpose shall be made on or before
      the
      date the incentive stock option is exercised or, if later, the date that the
      amount of tax to be withheld is determined under applicable tax law. Such
      election shall be approved by the Board and otherwise comply with such rules
      as
      the Board may adopt to assure compliance with Rule 16b-3, or any successor
      provision, as then in effect, of the General Rules and Regulations under the
      Securities Exchange Act of 1934, if applicable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Other
      Provisions.
      The
      Option Agreement authorized under this Section 9 shall contain such other
      provisions as the Administrator shall deem advisable. Any such Option Agreement
      shall contain such limitations and restrictions upon the exercise of the Option
      as shall be necessary to ensure that such Option will be considered an
“incentive stock option” as defined in Section 422 of the Internal Revenue Code
      or to conform to any change therein.

     

    SECTION
      10.

    TERMS
      AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

     

    Each
      nonqualified stock option granted pursuant to this Section 10 shall be evidenced
      by a written nonqualified stock option agreement (the “Option Agreement”). The
      Option Agreement shall be in such form as may be approved from time to time
      by
      the Administrator and may vary from Participant to Participant; provided,
      however, that each Participant and each Option Agreement shall comply with
      and
      be subject to the following terms and conditions:

     

    (a) Number
      of Shares and Option Price.
      The
      Option Agreement shall state the total number of shares covered by the
      nonqualified stock option. Unless otherwise determined by the Administrator,
      the
      option price per share shall be one hundred percent (100%) of the per share
      Fair
      Market Value of the Common Stock on the date the Administrator grants the
      option.

     

    (b) Term
      and Exercisability of Nonqualified Stock Option.
      The
      term during which any nonqualified stock option granted under the Plan may
      be
      exercised shall be established in each case by the Administrator. The Option
      Agreement shall state when the nonqualified stock option becomes exercisable
      and
      shall also state the maximum term during which the option may be exercised.
      In
      the event a nonqualified stock option is exercisable immediately, the manner
      of
      exercise of the option in the event it is not exercised in full immediately
      shall be specified in the Option Agreement. The Administrator may acceler-ate
      the exercisability of any nonqualified stock option granted hereunder which
      is
      not immediately exercisable as of the date of grant.

     

    (c) Withholding.
      The
      Company or its Affiliate shall be entitled to withhold and deduct from future
      wages of the Participant all legally required amounts necessary to satisfy
      any
      and all withholding and employment-related taxes attributable to the
      Participant’s exercise of a nonqualified stock option. In the event the
      Participant is required under the Option Agreement to pay the Company or
      Affiliate, or make arrangements satisfactory to the Company or Affiliate
      respecting payment of, such withholding and employment-related taxes, the
      Administrator may, in its discretion and pursuant to such rules as it may adopt,
      permit the Participant to satisfy such obligation, in whole or in part, by
      delivering shares of the Common Stock or by electing to have the Company or
      Affiliate withhold shares of Common Stock otherwise issuable to the Participant
      as a result of the exercise of the nonqualified stock option having a Fair
      Market Value equal to the minimum required tax withholding, based on the minimum
      statutory withholding rates for federal and state tax purposes, including
      payroll taxes, that are applicable to the supplemental income resulting from
      such exercise. In no event may the Company or any Affiliate withhold shares
      having a Fair Market Value in excess of such statutory minimum required tax
      withholding. The Participant’s election to have shares withheld for this purpose
      shall be made on or before the date the nonqualified stock option is exercised
      or, if later, the date that the amount of tax to be withheld is determined
      under
      applicable tax law. Such election shall be approved by the Administrator and
      otherwise comply with such rules as the Administrator may adopt to assure
      compliance with Rule 16b-3, or any successor provision, as then in effect,
      of
      the General Rules and Regulations under the Securities Exchange Act of 1934,
      if
      applicable.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) Transferability.
      The
      Administrator may, in its sole discretion, permit the Participant to transfer
      any or all nonqualified stock options to any member of the Participant’s
“immediate family” as such term is defined in Rule 16a-1(e) promulgated under
      the Securities Exchange Act of 1934, or any successor provision, or to one
      or
      more trusts whose beneficiaries are members of such Participant’s “immediate
      family” or partnerships in which such family members are the only partners;
      provided, however, that the Participant cannot receive any consideration for
      the
      transfer and such transferred nonqualified stock option shall continue to be
      subject to the same terms and conditions as were applicable to such nonqualified
      stock option immediately prior to its transfer.

     

    (e) No
      Rights as Shareholder.
      A
      Participant (or the Participant’s successor or successors) shall have no rights
      as a shareholder with respect to any shares covered by a nonqualified stock
      option until the date of the issuance of a stock certificate evidencing such
      shares. No adjustment shall be made for dividends (ordinary or extraordinary,
      whether in cash, securities or other property), distributions or other rights
      for which the record date is prior to the date such stock certificate is
      actually issued (except as otherwise provided in Section 11 of the
      Plan).

     

    (f) Other
      Provisions.
      The
      Option Agreement authorized under this Section 10 shall contain such other
      provisions as the Administrator shall deem advisable.

     

    SECTION
      11.

    RESTRICTED
      STOCK AWARDS

     

    Each
      Restricted Stock Award granted pursuant to this Section 11 shall be evidenced
      by
      a written restricted stock agreement (the “Restricted Stock Agreement”). The
      Restricted Stock Agreement shall be in such form as may be approved from time
      to
      time by the Administrator and may vary from Participant to Participant;
      provided, however, that each Participant and each Restricted Stock Agreement
      shall comply with and be subject to the following terms and
      conditions:

     

    (a) Number
      of Shares.
      The
      Restricted Stock Agreement shall state the total number of shares of Common
      Stock covered by the Restricted Stock Award.

     

    (b) Risks
      of Forfeiture.
      The
      Restricted Stock Agreement shall set forth the risks of forfeiture, if any,
      which shall apply to the shares of Common Stock covered by the Restricted Stock
      Award, and shall specify the manner in which such risks of forfeiture shall
      lapse. The Administrator may, in its sole discretion, modify the manner in
      which
      such risks of forfeiture shall lapse but only with respect to those shares
      of
      Common Stock which are restricted as of the effective date of the
      modification.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Issuance
      of Restricted Shares.
      The
      Company shall cause to be issued a stock certificate representing such shares
      of
      Common Stock in the Participant’s name, and shall deliver such certificate to
      the Participant; provided, however, that the Company shall place a legend on
      such certificate describing the risks of forfeiture and other transfer
      restrictions set forth in the Participant’s Restricted Stock Agreement and
      providing for the cancellation and return of such certificate if the shares
      of
      Common Stock subject to the Restricted Stock Award are forfeited.

     

    (d) Rights
      as Shareholder.
      Until
      the risks of forfeiture have lapsed or the shares subject to such Restricted
      Stock Award have been forfeited, the Participant shall be entitled to vote
      the
      shares of Common Stock represented by such stock certificates and shall receive
      all dividends attributable to such shares, but the Participant shall not have
      any other rights as a shareholder with respect to such shares.

     

    (e) Withholding
      Taxes.
      The
      Company or its Affiliate shall be entitled to withhold and deduct from future
      wages of the Participant all legally required amounts necessary to satisfy
      any
      and all withholding and employment-related taxes attributable to the
      Participant’s Restricted Stock Award. In the event the Participant is required
      under the Restricted Stock Agreement to pay the Company or its Affiliate, or
      make arrangements satisfactory to the Company or its Affiliate respecting
      payment of, such withholding and employment-related taxes, the Administrator
      may, in its discretion and pursuant to such rules as it may adopt, permit the
      Participant to satisfy such obligations, in whole or in part, by delivering
      shares of Common Stock, including shares of Common Stock received pursuant
      to a
      Restricted Stock Award on which the risks of forfeiture have lapsed.
Such
      shares shall have a Fair Market Value equal to the minimum required tax
      withholding, based on the minimum statutory withholding rates for federal and
      state tax purposes, including payroll taxes, that are applicable to the
      supplemental income resulting from the lapsing of the risks of forfeiture on
      such Restricted Stock. In no event may the Participant deliver shares having
      a
      Fair Market Value in excess of such statutory minimum required tax withholding.
      The
      Participant’s election to deliver shares of Common Stock for this purpose shall
      be made on or before the date that the amount of tax to be withheld is
      determined under applicable tax law. Such election shall be approved by the
      Administrator and otherwise comply with such rules as the Administrator may
      adopt to assure compliance with Rule 16b-3, or any successor provision, as
      then
      in effect, of the General Rules and Regulations under the Securities Exchange
      Act of 1934, if applicable.

     

    (f) Nontransferability.
      No
      Restricted Stock Award shall be transferable, in whole or in part, by the
      Participant, other than by will or by the laws of descent and distribution,
      prior to the date the risks of forfeiture described in the Restricted Stock
      Agreement have lapsed. If the Participant shall attempt any transfer of any
      Restricted Stock Award granted under the Plan prior to such date, such transfer
      shall be void and the Restricted Stock Award shall terminate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) Other
      Provisions.
      The
      Restricted Stock Agreement authorized under this Section 11 shall contain such
      other provisions as the Administrator shall deem advisable.

     

    


    SECTION
      12.

    RECAPITALIZATION,
      SALE, MERGER, EXCHANGE OR LIQUIDATION

     

    In
      the
      event of an increase or decrease in the number of shares of Common Stock
      resulting from a stock split, reverse stock split, stock dividend, combination
      or reclassification of the Common Stock, or any other increase or decrease
      in
      the number of issued shares of Common Stock effected without receipt of
      consideration by the Company, the Board may, in its sole discretion, adjust
      the
      number of shares of Common Stock reserved under Section 6 hereof, the number
      of
      shares of Common Stock covered by each outstanding Award, and, if applicable,
      the price per share thereof to reflect such change. Additional shares which
      may
      become covered by the Award pursuant to such adjustment shall be subject to
      the
      same restrictions as are applicable to the shares with respect to which the
      adjustment relates.

     

    Unless
      otherwise provided in the Option or Restricted Stock Agreement, in the event
      of
      an acquisition of the Company through the sale of substantially all of the
      Company’s assets and the consequent discontinuance of its business or through a
      merger, consolidation, exchange, reorganization, reclassification, extraordinary
      dividend, divestiture or liquidation of the Company (collectively referred
      to as
      a “transaction”), the Board may provide for one or more of the
      following:

     

    


    (a) the
      equitable acceleration of the exercisability of any outstanding Options and
      the
      lapsing of the risks of forfeiture on any Restricted Stock Awards;

     

    (b) the
      complete termination of this Plan, the cancellation of outstanding Options
      not
      exercised prior to a date specified by the Board (which date shall give
      Participants a reasonable period of time in which to exercise the Options prior
      to the effectiveness of such transaction), and the cancellation of any
      Restricted Stock Awards for which the risks of forfeiture have not
      lapsed;

     

    (c) 
      that
      Participants holding outstanding Options shall receive, with respect to each
      share of Common Stock subject to such Options, as of the effective date of
      any
      such transaction, cash in an amount equal to the excess of the Fair Market
      Value
      of such Common Stock on the date immediately preceding the effective date of
      such transaction over the option price per share of such Options; provided
      that
      the Board may, in lieu of such cash payment, distribute to such Participants
      shares of Common Stock of the Company or shares of stock of any corporation
      succeeding the Company by reason of such transaction, such shares having a
      value
      equal to the cash payment herein;

     

    (d) 
      that
      Participants holding outstanding Restricted Stock Awards shall receive, with
      respect to each share of Common Stock subject to such Awards, as of the
      effective date of any such transaction, cash in an amount equal to the Fair
      Market Value of such Common Stock on the date immediately preceding the
      effective date of such transaction; provided that the Board may, in lieu of
      such
      cash payment, distribute to such Participants shares of Common Stock of the
      Company or shares of stock of any corporation succeeding the Company by reason
      of such transaction, such shares having a value equal to the cash payment
      herein;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e) the
      continuance of the Plan with respect to the exercise of Options which were
      outstanding as of the date of adoption by the Board of such plan for such
      transaction and provide to Participants holding such Options the right to
      exercise their respective Options as to an economically equivalent number of
      shares of stock of the corporation succeeding the Company by reason of such
      transaction; and

     

    (f) the
      continuance of the Plan with respect to Restricted Stock Awards for which the
      risks of forfeiture have not lapsed as of the date of adoption by the Board
      of
      such plan for such transaction and provide to Participants holding such Awards
      the right to receive an economically equivalent number of shares of stock of
      the
      corporation succeeding the Company by reason of such transaction.

     

    The
      Board
      may restrict the rights of or the applicability of this Section 12 to the extent
      necessary to comply with Section 16(b) of the Securities Exchange Act of 1934,
      the Internal Revenue Code or any other applicable law or regulation. The grant
      of an Award pursuant to the Plan shall not 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, exchange or
      consolidate or to dissolve, liquidate, sell or transfer all or any part of
      its
      business or assets.

     

    SECTION
      13.

    SECURITIES
      LAW COMPLIANCE AND

    RESTRICTIONS
      ON TRANSFER

     

    No
      shares
      of Common Stock shall be issued pursuant to the Plan unless and until there
      has
      been compliance, in the opinion of Company’s counsel, with all applicable legal
      requirements, including without limitation, those relating to securities laws
      and stock exchange listing requirements. As a condition to the issuance of
      Common Stock to Participant, the Administrator may require Participant to (i)
      represent that the shares of Common Stock are being acquired for investment
      and
      not resale and to make such other representations as the Administrator shall
      deem necessary or appropriate to qualify the issuance of the shares of Common
      Stock as exempt from the Securities Act of 1933 and any other applicable
      securities laws, and (ii) represent that Participant shall not dispose of the
      shares of Common Stock in violation of the Securities Act of 1933 or any other
      applicable securities laws or any company policies then in effect.

     

    As
      a
      further condition to the grant of any stock option or the issuance of Common
      Stock to Participant, Participant agrees to the following:

     

    (a) In
      the
      event the Company advises Participant that it plans an underwritten public
      offering of its Common Stock in compliance with the Securities Act of 1933,
      as
      amended, and the underwriter(s) seek to impose restrictions under which certain
      shareholders may not sell or contract to sell or grant any option to buy or
      otherwise dispose of part or all of their stock purchase rights of the Common
      Stock underlying Awards, Participant will not, for a period not to exceed 180
      days from the prospectus, sell or contract to sell or grant an option to buy
      or
      otherwise dispose of any Award granted to Participant pursuant to the Plan
      or
      any of the underlying shares of Common Stock without the prior written consent
      of the underwriter(s) or its representative(s).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) In
      the
      event the Company makes any public offering of its securities and determines
      in
      its sole discretion that it is necessary to reduce the number of issued but
      unexercised stock purchase rights so as to comply with any state’s securities or
      Blue Sky law limitations with respect thereto, the Board of Directors of the
      Company shall have the right (i) to accelerate the exercisability of any Option
      and the date on which such Option must be exercised, provided that the Company
      gives Participant prior written notice of such acceleration, and (ii) to cancel
      any Options or portions thereof which Participant does not exercise prior to
      or
      contemporaneously with such public offering.

     

    (c) In
      the
      event of a transaction (as defined in Section 12 of the Plan), Participant
      will
      comply with Rule 145 of the Securities Act of 1933 and any other restrictions
      imposed under other applicable legal or accounting principles if Participant
      is
      an “affiliate” (as defined in such applicable legal and accounting principles)
      at the time of the transaction, and Participant will execute any documents
      necessary to ensure compliance with such rules.

     

    The
      Company reserves the right to place a legend on any stock certificate issued
      upon the exercise of an Option or upon the grant of a Restricted Stock Award
      pursuant to the Plan to assure compliance with this Section 13.

     

    SECTION
      14.

    AMENDMENT
      OF THE PLAN

     

    The
      Board
      may from time to time, insofar as permitted by law, suspend or discontinue
      the
      Plan or revise or amend it in any respect; provided, however, that no such
      revision or amendment, except as is authorized in Section 12, shall impair
      the
      terms and conditions of any Award which is outstanding on the date of such
      revision or amendment to the material detriment of the Participant without
      the
      consent of the Participant. Notwithstanding the foregoing, no such revision
      or
      amendment shall (i) materially increase the number of shares subject to the
      Plan
      except as provided in Section 12 hereof, (ii) change the desig-nation of the
      class of employees eligible to receive Awards, (iii) decrease the price at
      which
      Options may be granted, or (iv) materially increase the benefits accruing
      to Participants under the Plan, without the approval of the shareholders of
      the
      Company if such approval is required for compliance with the requirements of
      any
      applicable law or regulation. Furthermore, the Plan may not, without the
      approval of the shareholders, be amended in any manner that will cause incentive
      stock options to fail to meet the requirements of Section 422 of the Internal
      Revenue Code.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    SECTION
      15.

    NO
      OBLIGATION TO EXERCISE OPTION

     

    The
      granting of an Option shall impose no obligation upon the Participant to
      exercise such Option. Further, the granting of any Award hereunder shall not
      impose upon the Company or any Affiliate any obligation to retain the
      Participant in its employ for any period.