MDWERKS,
INC.

2005 INCENTIVE COMPENSATION
PLAN

	
				
	















MDWERKS,
INC.
2005 INCENTIVE COMPENSATION
PLAN

1. Purpose.    The purpose of this MDWERKS,
INC. 2005 INCENTIVE COMPENSATION PLAN (the
‘‘Plan’’) is to assist MDwerks, Inc., a
Delaware corporation (the ‘‘Company’’) and
its Related Entities (as hereinafter defined) in attracting,
motivating, retaining and rewarding high-quality executives and other
employees, officers, directors, consultants and other persons who
provide services to the Company or its Related Entities by enabling
such persons to acquire or increase a proprietary interest in the
Company in order to strengthen the mutuality of interests between such
persons and the Company's shareholders, and providing such
persons with performance incentives to expend their maximum efforts in
the creation of shareholder
value.

2. Definitions.    For purposes of the
Plan, the following terms shall be defined as set forth below, in
addition to such terms defined in Section 1
hereof.

(a) ‘‘Award’’
means any Option, Stock Appreciation Right, Restricted Stock Award,
Deferred Stock Award, Share granted as a bonus or in lieu of another
award, Dividend Equivalent, Other Stock-Based Award or Performance
Award, together with any other right or interest, granted to a
Participant under the
Plan.

(b) ‘‘Award
Agreement’’ means any written agreement, contract
or other instrument or document evidencing any Award granted by the
Committee
hereunder.

(c) ‘‘Beneficiary’’
means the person, persons, trust or trusts that have been designated by
a Participant in his or her most recent written beneficiary designation
filed with the Committee to receive the benefits specified under the
Plan upon such Participant's death or to which Awards or other
rights are transferred if and to the extent permitted under Section
10(b) hereof. If, upon a Participant's death, there is no
designated Beneficiary or surviving designated Beneficiary, then the
term Beneficiary means the person, persons, trust or trusts entitled by
will or the laws of descent and distribution to receive such
benefits.

(d) ‘‘Beneficial
Owner’’ shall have the meaning ascribed to such
term in Rule 13d-3 under the Exchange Act and any successor to such
Rule.

(e) ‘‘Board’’
means the Company's Board of
Directors.

(f) ‘‘Cause’’
shall, with respect to any Participant have the meaning specified in
the Award Agreement. In the absence of any definition in the Award
Agreement, ‘‘Cause’’ shall have the
equivalent meaning or the same meaning as
‘‘cause’’ or ‘‘for
cause’’ set forth in any employment, consulting, or other
agreement for the performance of services between the Participant and
the Company or a Related Entity or, in the absence of any such
agreement or any such definition in such agreement, such term shall
mean (i) the failure by the Participant to perform, in a reasonable
manner, his or her duties as assigned by the Company or a Related
Entity, (ii) any violation or breach by the Participant of his or her
employment, consulting or other similar agreement with the Company or a
Related Entity, if any, (iii) any violation or breach by the
Participant of any non-competition, non-solicitation, non-disclosure
and/or other similar agreement with the Company or a Related Entity,
(iv) any act by the Participant of dishonesty or bad faith with respect
to the Company or a Related Entity, (v) use of alcohol, drugs or other
similar substances in a manner that adversely affects the
Participant’s work performance, or (vi) the commission by the
Participant of any act, misdemeanor, or crime reflecting unfavorably
upon the Participant or the Company or any Related Entity. The good
faith determination by the Committee of whether the
Participant’s Continuous Service was terminated by the Company
for ‘‘Cause’’ shall be final and binding
for all purposes
hereunder.

(g) ‘‘Change in
Control’’ means a Change in Control as defined
with related terms in Section 9(b) of the
Plan.

(h) ‘‘Code’’
means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and
regulations thereto.

(i) ‘‘Committee’’
means a committee designated by the Board to administer the Plan;
provided, however, that if the Board fails to designate a committee or
if there are no longer any 

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members on the committee so designated by the
Board, then the Board shall serve as the Committee. The Committee shall
consist of at least two directors, and each member of the Committee
shall be (i) a ‘‘non-employee
director’’ within the meaning of Rule 16b-3 (or any
successor rule) under the Exchange Act, unless administration of the
Plan by ‘‘non-employee directors’’ is not
then required in order for exemptions under Rule 16b-3 to apply to
transactions under the Plan, (ii) an ‘‘outside
director’’ within the meaning of Section 162(m) of the
Code, and (iii) ‘‘Independent.’’

(j) ‘‘Consultant’’
means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a
director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related
Entity.

(k) ‘‘Continuous
Service’’ means the uninterrupted provision of
services to the Company or any Related Entity in any capacity of
Employee, Director, Consultant or other service provider. Continuous
Service shall not be considered to be interrupted in the case of (i)
any approved leave of absence, (ii) transfers among the Company, any
Related Entities, or any successor entities, in any capacity of
Employee, Director, Consultant or other service provider, or (iii) any
change in status as long as the individual remains in the service of
the Company or a Related Entity in any capacity of Employee, Director,
Consultant or other service provider (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick
leave, military leave, or any other authorized personal leave.

(l) ‘‘Covered
Employee’’ means an Eligible Person who is a
‘‘covered employee’’ within the meaning of
Section 162(m)(3) of the Code, or any successor provision thereto.

(m) ‘‘Deferred
Stock’’ means a right to receive Shares,
including Restricted Stock, cash or a combination thereof, at the end
of a specified deferral period.

(n) ‘‘Deferred Stock
Award’’ means an Award of Deferred Stock granted
to a Participant under Section 6(e) hereof.

(o) ‘‘Director’’
means a member of the Board or the board of directors of any Related
Entity.

(p) ‘‘Disability’’
means a permanent and total disability (within the meaning of Section
22(e) of the Code), as determined by a medical doctor satisfactory to
the Committee.

(q) ‘‘Discounted
Option’’ means any Option awarded under Section
6(b) hereof with an exercise price that is less than the Fair Market
Value of a Share on the date of
grant.

(r) ‘‘Discounted Stock
Appreciation Right’’ means any Stock Appreciation
Right awarded under Section 6(c) hereof with an exercise price that is
less than the Fair Market Value of a Share on the date of
grant.

(s) ‘‘Dividend
Equivalent’’ means a right, granted to a
Participant under Section 6(g) hereof, to receive cash, Shares, other
Awards or other property equal in value to dividends paid with respect
to a specified number of Shares, or other periodic payments.

(t) ‘‘Effective
Date’’ means the effective date of the Plan,
which shall be October  , 2005.

(u) ‘‘Eligible
Person’’ means each officer, Director, Employee,
Consultant and other person who provides services to the Company or any
Related Entity. The foregoing notwithstanding, only employees of the
Company, or any parent corporation or subsidiary corporation of the
Company (as those terms are defined in Sections 424(e) and (f) of the
Code, respectively), shall be Eligible Persons for purposes of
receiving any Incentive Stock Options. An Employee on leave of absence
may be considered as still in the employ of the Company or a Related
Entity for purposes of eligibility for participation in the Plan.

(v) ‘‘Employee’’
means any person, including an officer or Director, who is an employee
of the Company or any Related Entity. The payment of a
director’s fee by the Company or a Related Entity shall not be
sufficient to constitute ‘‘employment’’ by
the Company.

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(w) ‘‘Exchange
Act’’ means the Securities Exchange Act of 1934,
as amended from time to time, including rules thereunder and successor
provisions and rules thereto.

(x) ‘‘Fair Market
Value’’ means the fair market value of Shares,
Awards or other property as determined by the Committee, or under
procedures established by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of a Share as of any given date
shall be the closing sale price per Share reported on a consolidated
basis for stock listed on the principal stock exchange or market on
which Shares are traded on the date as of which such value is being
determined or, if there is no sale on that date, then on the last
previous day on which a sale was reported.

(y) ‘‘Good
Reason’’ shall, with respect to any Participant,
have the meaning specified in the Award Agreement. In the absence of
any definition in the Award Agreement, ‘‘Good
Reason’’ shall have the equivalent meaning or the same
meaning as ‘‘good reason’’ or
‘‘for good reason’’ set forth in any
employment, consulting or other agreement for the performance of
services between the Participant and the Company or a Related Entity
or, in the absence of any such agreement or any such definition in such
agreement, such term shall mean (i) the assignment to the Participant
of any duties inconsistent in any material respect with the
Participant's position, authority, duties or responsibilities as
assigned by the Company or a Related Entity, or any other action by the
Company or a Related Entity which results in a material diminution in
such position, authority, duties or responsibilities, excluding for
this purpose any action not taken in bad faith and which is remedied by
the Company or a Related Entity promptly after receipt of notice
thereof given by the Participant, or any action taken with the consent
of the Participant; or (ii) any material failure by the Company or a
Related Entity to comply with its obligations to the Participant as
agreed upon, other than any failure not occurring in bad faith and
which is remedied by the Company or a Related Entity promptly after
receipt of notice thereof given by the Participant.

(z) ‘‘Incentive Stock
Option’’ means any Option intended to be
designated as an incentive stock option within the meaning of Section
422 of the Code or any successor provision thereto.

(aa) ‘‘Independent,’’
when referring to either the Board or members of the Committee, shall
have the same meaning as used in the rules of the American Stock
Exchange or any national securities market on which any securities of
the Company are listed for trading, and if not quoted or listed for
trading, by the rules of the American Stock
Exchange.

(bb) ‘‘Incumbent
Board’’ means the Incumbent Board as defined in
Section 9(b)(ii) of the Plan.

(cc) ‘‘Option’’
means a right granted to a Participant under Section 6(b) hereof, to
purchase Shares or other Awards at a specified price during specified
time periods.

(dd) ‘‘Optionee’’
means a person to whom an Option is granted under this Plan or any
person who succeeds to the rights of such person under this Plan.

(ee) ‘‘Option
Proceeds’’ means the cash actually received by
the Company for the exercise price in connection with the exercise of
Options that are exercised after the Effective Date of the Plan, plus
the maximum tax benefit that could be realized by the Company as a
result of the exercise of such Options, which tax benefit shall be
determined by multiplying (i) the amount that is deductible for Federal
income tax purposes as a result of any such option exercise (currently,
equal to the amount upon which the Participant's withholding tax
obligation is calculated), times (ii) the maximum Federal corporate
income tax rate for the year of exercise. With respect to Options, to
the extent that a Participant pays the exercise price and/or
withholding taxes with Shares, Option Proceeds shall not be calculated
with respect to the amounts so paid in
Shares.

(ff) ‘‘Other
Stock-Based Awards’’ means Awards granted to a
Participant under Section 6(i) hereof.

(gg) ‘‘Outside
Director’’ means a member of the Board who is not
an
Employee.

(hh) ‘‘Participant’’
means a person who has been granted an Award under the Plan which
remains outstanding, including a person who is no longer an Eligible
Person.

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(ii) ‘‘Performance
Award’’ shall mean any Award of Performance
Shares or Performance Units granted pursuant to Section
6(h).

(jj) ‘‘Performance
Period’’ means that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the
Committee with respect to such Award are to be
measured.

(kk) ‘‘Performance
Share’’ means any grant pursuant to Section 6(h)
of a unit valued by reference to a designated number of Shares, which
value may be paid to the Participant by delivery of such property as
the Committee shall determine, including cash, Shares, other property,
or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the
time of such grant or
thereafter.

(ll) ‘‘Performance
Unit’’ means any grant pursuant to Section 6(h)
of a unit valued by reference to a designated amount of property
(including cash) other than Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall
determine, including cash, Shares, other property, or any combination
thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such
grant or
thereafter.

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

(nn) ‘‘Related
Entity’’ means any Subsidiary, and any business,
corporation, partnership, limited liability company or other entity
designated by Board in which the Company or a Subsidiary holds a
substantial ownership interest, directly or
indirectly.

(oo) ‘‘Restricted
Stock’’ means any Share issued with the
restriction that the holder may not sell, transfer, pledge or assign
such Share and with such risks of forfeiture and other restrictions as
the Committee, in its sole discretion, may impose (including any
restriction on the right to vote such Share and the right to receive
any dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem
appropriate.

(pp) ‘‘Restricted
Stock Award’’ means an Award granted to a
Participant under Section 6(d) hereof.

(qq) ‘‘Rule
16b-3’’ means Rule 16b-3, as from time to time in
effect and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the
Exchange
Act.

(rr) ‘‘Shareholder
Approval Date’’ means the date on which this Plan
is approved shareholders of the Company eligible to vote in the
election of directors, by a vote sufficient to meet the requirements of
Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the
Exchange Act (if applicable), applicable requirements under the rules
of any stock exchange or automated quotation system on which the Shares
may be listed on quoted, and other laws, regulations and obligations of
the Company applicable to the
Plan.

(ss) ‘‘Shares’’
means the shares of common stock of the Company, par value $.001 per
share, and such other securities as may be substituted (or
resubstituted) for Shares pursuant to Section 10(c) hereof.

(tt) ‘‘Stock Appreciation
Right’’ means a right granted to a Participant
under Section 6(c) hereof.

(uu) ‘‘Subsidiary’’
means any corporation or other entity in which the Company has a direct
or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests
of such corporation or other entity entitled to vote generally in the
election of directors or in which the Company has the right to receive
50% or more of the distribution of profits or 50% or more
of the assets on liquidation or dissolution.

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(vv) ‘‘Substitute
Awards’’ shall mean Awards granted or Shares
issued by the Company in assumption of, or in substitution or exchange
for, awards previously granted, or the right or obligation to make
future awards, by a company acquired by the Company or any Related
Entity or with which the Company or any Related Entity
combines.

3. Administration.

(a)    Authority
of the Committee. The Plan shall be administered by the
Committee, except to the extent the Board elects to administer the
Plan, in which case the Plan shall be administered by only those
directors who are Independent Directors, in which case references
herein to the ‘‘Committee’’ shall be deemed
to include references to the Independent members of the Board. The
Committee shall have full and final authority, subject to and
consistent with the provisions of the Plan, to select Eligible Persons
to become Participants, grant Awards, determine the type, number and
other terms and conditions of, and all other matters relating to,
Awards, prescribe Award Agreements (which need not be identical for
each Participant) and rules and regulations for the administration of
the Plan, construe and interpret the Plan and Award Agreements and
correct defects, supply omissions or reconcile inconsistencies therein,
and to make all other decisions and determinations as the Committee may
deem necessary or advisable for the administration of the Plan. In
exercising any discretion granted to the Committee under the Plan or
pursuant to any Award, the Committee shall not be required to follow
past practices, act in a manner consistent with past practices, or
treat any Eligible Person or Participant in a manner consistent with
the treatment of other Eligible Persons or
Participants.

(b) Manner of Exercise of
Committee Authority.    The Committee, and not the Board, shall
exercise sole and exclusive discretion on any matter relating to a
Participant then subject to Section 16 of the Exchange Act with
respect to the Company to the extent necessary in order that
transactions by such Participant shall be exempt under Rule 16b-3 under
the Exchange Act. Any action of the Committee shall be final,
conclusive and binding on all persons, including the Company, its
Related Entities, Participants, Beneficiaries, transferees under
Section 10(b) hereof or other persons claiming rights from or through a
Participant, and shareholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall
not be construed as limiting any power or authority of the Committee.
The Committee may delegate to officers or managers of the Company or
any Related Entity, or committees thereof, the authority, subject to
such terms as the Committee shall determine, to perform such functions,
including administrative functions as the Committee may determine to
the extent that such delegation will not result in the loss of an
exemption under Rule 16b-3(d)(1) for Awards granted to Participants
subject to Section 16 of the Exchange Act in respect of the Company and
will not cause Awards intended to qualify as
‘‘performance-based compensation’’ under
Code Section 162(m) to fail to so qualify. The Committee may appoint
agents to assist it in administering the
Plan.

(c) Limitation of Liability.    The
Committee and the Board, and each member thereof, shall be entitled to,
in good faith, rely or act upon any report or other information
furnished to him or her by any officer or Employee, the Company's
independent auditors, Consultants or any other agents assisting in the
administration of the Plan. Members of the Committee and the Board, and
any officer or Employee acting at the direction or on behalf of the
Committee or the Board, shall not be personally liable for any action
or determination taken or made in good faith with respect to the Plan,
and shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action or
determination.

4. Shares Subject to
Plan.

(a) Limitation on Overall Number of
Shares Available for Delivery Under Plan.    Subject to
adjustment as provided in Section 10(c) hereof, the total number of
Shares reserved and available for delivery under the Plan shall be
10,000,000. Any Shares delivered under the Plan may consist, in whole
or in part, of authorized and unissued shares or treasury
shares.

(b) Application of Limitation to Grants
of Award.    No Award may be granted if the number of Shares to
be delivered in connection with such an Award or, in the case of an
Award relating to 

5









Shares but settled only in cash (such as
cash-only Stock Appreciation Rights), the number of Shares to which
such Award relates, exceeds the number of Shares remaining available
for delivery under the Plan, minus the number of Shares deliverable in
settlement of or relating to then outstanding Awards. The Committee may
adopt reasonable counting procedures to ensure appropriate counting,
avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments if the number of Shares
actually delivered differs from the number of Shares previously counted
in connection with an Award.

(c) Availability
of Shares Not Delivered under Awards and Adjustments to Limits.


(i) If any Shares subject to an Award are
forfeited, expire or otherwise terminate without issuance of such
Shares, or any Award is settled for cash or otherwise does not result
in the issuance of all or a portion of the Shares subject to such Award
or award, the Shares shall, to the extent of such forfeiture,
expiration, termination, cash settlement or non-issuance, again be
available for Awards under the Plan, subject to Section 4(c)(v)
below.

(ii) In the event that any Option or
other Award granted hereunder is exercised through the tendering of
Shares (either actually or by attestation) or by the withholding of
Shares by the Company, or withholding tax liabilities arising from such
option or other award are satisfied by the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the
Company, then only the number of Shares issued net of the Shares
tendered or withheld shall be counted for purposes of determining the
maximum number of Shares available for grant under the Plan.

(iii) Shares reacquired by the Company on the open
market using Option Proceeds shall be available for Awards under the
Plan. The increase in Shares available pursuant to the repurchase of
Shares with Option Proceeds shall not be greater than the amount of
such proceeds divided by the Fair Market Value of a Share on the date
of exercise of the Option giving rise to such Option Proceeds.

(iv) Substitute Awards shall not reduce the Shares
authorized for grant under the Plan or authorized for grant to a
Participant in any period. Additionally, in the event that a company
acquired by the Company or any Related Entity or with which the Company
or any Related Entity combines has shares available under a
pre-existing plan approved by shareholders and not adopted in
contemplation of such acquisition or combination, the shares available
for delivery pursuant to the terms of such pre-existing plan (as
adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or
combination to determine the consideration payable to the holders of
common stock of the entities party to such acquisition or combination)
may be used for Awards under the Plan and shall not reduce the Shares
authorized for delivery under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants
could have been made under the terms of the pre-existing plan, absent
the acquisition or combination, and shall only be made to individuals
who were not Employees or Directors prior to such acquisition or
combination.

(v) Any Shares that again become
available for delivery pursuant to this Section 4(c) shall be added
back as one (1) Share.

(vi) Notwithstanding
anything in this Section 4(c) to the contrary and solely for purposes
of determining whether Shares are available for the delivery of
Incentive Stock Options, the maximum aggregate number of shares that
may be granted under this Plan shall be determined without regard to
any Shares restored pursuant to this Section 4(c) that, if taken into
account, would cause the Plan to fail the requirement under Code
Section 422 that the Plan designate a maximum aggregate number of
shares that may be issued.

5. Eligibility; Per-Person
Award Limitations.    Awards may be granted under the Plan only
to Eligible Persons. Subject to adjustment as provided in Section
10(c), in any fiscal year of the Company during any part of which the
Plan is in effect, no Participant may be granted (i) Options or Stock
Appreciation Rights with respect to more than 2,000,000 Shares or (ii)
Restricted Stock, Deferred Stock, Performance Shares and/or Other
Stock-Based Awards with respect to more than 2,000,000 

6









Shares. In addition, the maximum dollar value
payable to any one Participant with respect to Performance Units is (x)
$3,000,000 with respect to any 12-month Performance Period, and (y)
with respect to any Performance Period that is more than 12 months,
$3,000,000 multiplied by the number of full years in the Performance
Period.

6. Specific Terms of
Awards.

(a) General.    Awards may be
granted on the terms and conditions set forth in this Section 6. In
addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section 10(e)),
such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including
terms requiring forfeiture of Awards in the event of termination of the
Participant’s Continuous Service and terms permitting a
Participant to make elections relating to his or her Award. The
Committee shall retain full power and discretion to accelerate, waive
or modify, at any time, any term or condition of an Award that is not
mandatory under the Plan. Except in cases in which the Committee is
authorized to require other forms of consideration under the Plan, or
to the extent other forms of consideration must be paid to satisfy the
requirements of applicable law, no consideration other than services
may be required for the grant (but not the exercise) of any
Award.

(b) Options.    The Committee is
authorized to grant Options to any Eligible Person on the following
terms and conditions:


(i) Exercise
Price. Other than in connection with Substitute Awards, the
exercise price per Share purchasable under an Option shall be
determined by the Committee, provided that such exercise price shall
not, in the case of Incentive Stock Options, be less than 100%
of the Fair Market Value of a Share on the date of grant of the Option
and shall not, in any event, be less than the par value of a Share on
the date of grant of the Option. If an Employee owns or is deemed to
own (by reason of the attribution rules applicable under Section 424(d)
of the Code) more than 10% of the combined voting power of all
classes of stock of the Company (or any parent corporation or
subsidiary corporation of the Company, as those terms are defined in
Sections 424(e) and (f) of the Code, respectively) and an Incentive
Stock Option is granted to such employee, the exercise price of such
Incentive Stock Option (to the extent required by the Code at the time
of grant) shall be no less than 110% of the Fair Market Value a
Share on the date such Incentive Stock Option is granted.



(ii)    Time and Method of Exercise. The
Committee shall determine the time or times at which or the
circumstances under which an Option 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 Options shall cease
to be or become exercisable following termination of Continuous Service
or upon other conditions, the methods by which the exercise price may
be paid or deemed to be paid (including in the discretion of the
Committee a cashless exercise procedure), the form of such payment,
including, without limitation, cash, Shares, other Awards or awards
granted under other plans of the Company or a Related Entity, or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis provided that such
deferred payments are not in violation of the Sarbanes-Oxley Act of
2002, or any rule or regulation adopted thereunder or any other
applicable law), and the methods by or forms in which Shares will be
delivered or deemed to be delivered to
Participants.


(iii)    Incentive Stock
Options. The terms of any Incentive Stock Option granted
under the Plan shall comply in all respects with the provisions of
Section 422 of the Code. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock
Options (including any Stock Appreciation Right issued in tandem
therewith) shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under Section
422 of the Code, unless the Participant has first requested, or
consents to, the change that will result in such disqualification.
Thus, if and to the extent required to comply with Section 422 of the
Code, Options granted as Incentive Stock Options shall be subject to
the following special terms and
conditions:

(A) the Option shall not be
exercisable more than ten years after the date such Incentive Stock
Option is granted; provided, however, that if a Participant owns or is
deemed to own 

7









(by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power
of all classes of stock of the Company (or any parent corporation or
subsidiary corporation of the Company, as those terms are defined in
Sections 424(e) and (f) of the Code, respectively) and the Incentive
Stock Option is granted to such Participant, the term of the Incentive
Stock Option shall be (to the extent required by the Code at the time
of the grant) for no more than five years from the date of grant;
and

(B) The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of
the Shares with respect to which Incentive Stock Options granted under
the Plan and all other option plans of the Company (and any parent
corporation or subsidiary corporation of the Company, as those terms
are defined in Sections 424(e) and (f) of the Code, respectively)
during any calendar year exercisable for the first time by the
Participant during any calendar year shall not (to the extent required
by the Code at the time of the grant) exceed
$100,000.

(c) Stock Appreciation
Rights.    The Committee may grant Stock Appreciation Rights to
any Eligible Person in conjunction with all or part of any Option
granted under the Plan or at any subsequent time during the term of
such Option (a ‘‘Tandem Stock Appreciation
Right’’), or without regard to any Option (a
‘‘Freestanding Stock Appreciation Right’’),
in each case upon such terms and conditions as the Committee may
establish in its sole discretion, not inconsistent with the provisions
of the Plan, including the
following:

(i) Right to Payment.    A
Stock Appreciation Right shall confer on the Participant to whom it is
granted a right to receive, upon exercise thereof, the excess of (A)
the Fair Market Value of one Share on the date of exercise over (B) the
grant price of the Stock Appreciation Right as determined by the
Committee. The grant price of a Stock Appreciation Right shall not be
less than 100% of the Fair Market Value of a Share on the date
of grant, in the case of a Freestanding Stock Appreciation Right, or
less than the associated Option exercise price, in the case of a Tandem
Stock Appreciation Right.

(ii) Other
Terms.    The Committee shall determine at the date of grant or
thereafter, the time or times at which and the circumstances under
which a Stock Appreciation Right 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 Stock Appreciation
Rights shall cease to be or become exercisable following termination of
Continuous Service or upon other conditions, the method of exercise,
method of settlement, form of consideration payable in settlement,
method by or forms in which Shares will be delivered or deemed to be
delivered to Participants, whether or not a Stock Appreciation Right
shall be in tandem or in combination with any other Award, and any
other terms and conditions of any Stock Appreciation
Right.

(iii) Tandem Stock Appreciation
Rights.    Any Tandem Stock Appreciation Right may be granted at
the same time as the related Option is granted or, for Options that are
not Incentive Stock Options, at any time thereafter before exercise or
expiration of such Option. Any Tandem Stock Appreciation Right related
to an Option may be exercised only when the related Option would be
exercisable and the Fair Market Value of the Shares subject to the
related Option exceeds the exercise price at which Shares can be
acquired pursuant to the Option. In addition, if a Tandem Stock
Appreciation Right exists with respect to less than the full number of
Shares covered by a related Option, then an exercise or termination of
such Option shall not reduce the number of Shares to which the Tandem
Stock Appreciation Right applies until the number of Shares then
exercisable under such Option equals the number of Shares to which the
Tandem Stock Appreciation Right applies. Any Option related to a Tandem
Stock Appreciation Right shall no longer be exercisable to the extent
the Tandem Stock Appreciation Right has been exercised, and any Tandem
Stock Appreciation Right shall no longer be exercisable to the extent
the related Option has been
exercised.

(d)    Restricted Stock
Awards. The Committee is authorized to grant Restricted
Stock Awards to any Eligible Person on the following terms and
conditions:

(i) Grant and
Restrictions.    Restricted Stock Awards shall be subject to such
restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may 

8









impose, or as otherwise provided in this Plan,
covering a period of time specified by the Committee (the
‘‘Restriction Period’’). The terms of any
Restricted Stock Award granted under the Plan shall be set forth in a
written Award Agreement which shall contain provisions determined by
the Committee and not inconsistent with the Plan. The restrictions may
lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals
and/or future service requirements), in such installments or otherwise,
as the Committee may determine at the date of grant or thereafter.
Except to the extent restricted under the terms of the Plan and any
Award Agreement relating to a Restricted Stock Award, a Participant
granted Restricted Stock shall have all of the rights of a shareholder,
including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee). During the Restriction
Period, subject to Section 10(b) below, the Restricted Stock may not be
sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the
Participant.

(ii) Forfeiture.    Except
as otherwise determined by the Committee, upon termination of a
Participant's Continuous Service during the applicable
Restriction Period, the Participant's Restricted Stock that is at
that time subject to a risk of forfeiture that has not lapsed or
otherwise been satisfied shall be forfeited and reacquired by the
Company; provided that the Committee may provide, by rule or regulation
or in any Award Agreement, or may determine in any individual case,
that forfeiture conditions relating to Restricted Stock Awards shall be
waived in whole or in part in the event of terminations resulting from
specified causes.

(iii) Certificates for
Stock.    Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name
of the Participant, the Committee may require that such certificates
bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, that the Company
retain physical possession of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted
Stock.

(iv) Dividends and
Splits.    As a condition to the grant of a Restricted Stock
Award, the Committee may require or permit a Participant to elect that
any cash dividends paid on a Share of Restricted Stock be automatically
reinvested in additional Shares of Restricted Stock or applied to the
purchase of additional Awards under the Plan. Unless otherwise
determined by the Committee, Shares distributed in connection with a
stock split or stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of forfeiture to
the same extent as the Restricted Stock with respect to which such
Shares or other property have been
distributed.

(e) Deferred Stock
Award.    The Committee is authorized to grant Deferred Stock
Awards to any Eligible Person on the following terms and
conditions:

(i) Award and
Restrictions.    Satisfaction of a Deferred Stock Award shall
occur upon expiration of the deferral period specified for such
Deferred Stock Award by the Committee (or, if permitted by the
Committee, as elected by the Participant). In addition, a Deferred
Stock Award shall be subject to such restrictions (which may include a
risk of forfeiture) as the Committee may impose, if any, which
restrictions may lapse at the expiration of the deferral period or at
earlier specified times (including based on achievement of performance
goals and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee may
determine. A Deferred Stock Award may be satisfied by delivery of
Shares, cash equal to the Fair Market Value of the specified number of
Shares covered by the Deferred Stock, or a combination thereof, as
determined by the Committee at the date of grant or thereafter. Prior
to satisfaction of a Deferred Stock Award, a Deferred Stock Award
carries no voting or dividend or other rights associated with Share
ownership.

(ii) Forfeiture.    Except
as otherwise determined by the Committee, upon termination of a
Participant's Continuous Service during the applicable deferral
period or portion thereof to which forfeiture conditions apply (as
provided in the Award Agreement evidencing the Deferred Stock Award),
the Participant's Deferred Stock Award that is at that time
subject to a risk of forfeiture that has not lapsed or otherwise been
satisfied shall be forfeited; provided that the Committee may provide,
by rule or regulation or in any Award Agreement, or may determine in
any individual case, that forfeiture conditions relating to a Deferred
Stock Award shall be waived in whole or in part in 

9









the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole
or in part the forfeiture of any Deferred Stock
Award.

(iii) Dividend
Equivalents.    Unless otherwise determined by the Committee at
date of grant, any Dividend Equivalents that are granted with respect
to any Deferred Stock Award shall be either (A) paid with respect to
such Deferred Stock Award at the dividend payment date in cash or in
Shares of unrestricted stock having a Fair Market Value equal to the
amount of such dividends, or (B) deferred with respect to such Deferred
Stock Award and the amount or value thereof automatically deemed
reinvested in additional Deferred Stock, other Awards or other
investment vehicles, as the Committee shall determine or permit the
Participant to elect.

(f) Bonus Stock and
Awards in Lieu of Obligations.    The Committee is authorized to
grant Shares to any Eligible Persons as a bonus, or to grant Shares or
other Awards in lieu of obligations to pay cash or deliver other
property under the Plan or under other plans or compensatory
arrangements, provided that, in the case of Eligible Persons subject to
Section 16 of the Exchange Act, the amount of such grants remains
within the discretion of the Committee to the extent necessary to
ensure that acquisitions of Shares or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Shares or Awards
granted hereunder shall be subject to such other terms as shall be
determined by the Committee.

(g) Dividend
Equivalents.    The Committee is authorized to grant Dividend
Equivalents to any Eligible Person entitling the Eligible Person to
receive cash, Shares, other Awards, or other property equal in value to
the dividends paid with respect to a specified number of Shares, or
other periodic payments. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee
may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional
Shares, Awards, or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture, as the
Committee may specify.

(h) Performance
Awards.    The Committee is authorized to grant Performance
Awards to any Eligible Person payable in cash, Shares, or other Awards,
on terms and conditions established by the Committee, subject to the
provisions of Section 8 if and to the extent that the Committee shall,
in its sole discretion, determine that an Award shall be subject to
those provisions. The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award.
Except as provided in Section 9 or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of
the relevant Performance Period. The performance goals to be achieved
for each Performance Period shall be conclusively determined by the
Committee and may be based upon the criteria set forth in Section 8(b),
or in the case of an Award that the Committee determines shall not be
subject to Section 8 hereof, any other criteria that the Committee, in
its sole discretion, shall determine should be used for that purpose.
The amount of the Award to be distributed shall be conclusively
determined by the Committee. Performance Awards may be paid in a lump
sum or in installments following the close of the Performance Period
or, in accordance with procedures established by the Committee, on a
deferred basis.

(i) Other Stock-Based
Awards.    The Committee is authorized, subject to limitations
under applicable law, to grant to any Eligible Person such other Awards
that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed
by the Committee to be consistent with the purposes of the Plan. Other
Stock-Based Awards may be granted to Participants either alone or in
addition to other Awards granted under the Plan, and such Other
Stock-Based Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan. The Committee shall
determine the terms and conditions of such Awards. Shares delivered
pursuant to an Award in the nature of a purchase right granted under
this Section 6(i) shall be purchased for such consideration (including,
without limitation, loans from the Company or a Related Entity provided
that such loans are not in violation of the Sarbanes Oxley Act of 2002,
or any rule or regulation adopted thereunder or any other applicable
law) paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Shares, other Awards or other
property, as the Committee shall determine.

10








7. Certain Provisions
Applicable to Awards.

(a) Stand-Alone,
Additional, Tandem and Substitute Awards.    Awards granted under
the Plan may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution or exchange
for, any other Award or any award granted under another plan of the
Company, any Related Entity, or any business entity to be acquired by
the Company or a Related Entity, or any other right of a Participant to
receive payment from the Company or any Related Entity. 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 or award, the Committee shall require the surrender of
such other Award or award in consideration for the grant of the new
Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the
Company or any Related Entity, in which the value of Stock subject to
the Award is equivalent in value to the cash compensation (for example,
Deferred Stock or Restricted Stock), or in which the exercise price,
grant price or purchase price of the Award in the nature of a right
that may be exercised is equal to the Fair Market Value of the
underlying Stock minus the value of the cash compensation surrendered
(for example, Options or Stock Appreciation Right granted with an
exercise price or grant price
‘‘discounted’’ by the amount of the cash
compensation surrendered).

(b) Term of
Awards.    The term of each Award shall be for such period as may
be determined by the Committee; provided that in no event shall the
term of any Option or Stock Appreciation Right exceed a period of ten
years (or in the case of an Incentive Stock Option such shorter term as
may be required under Section 422 of the
Code).

(c) Form and Timing of Payment Under
Awards; Deferrals.    Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a
Related Entity upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Shares, other Awards or
other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Any installment or deferral
provided for in the preceding sentence shall, however, be subject to
the Company’s compliance with the provisions of the
Sarbanes-Oxley Act of 2002, the rules and regulations adopted by the
U.S. Securities and Exchange Commission thereunder, and all applicable
rules of the Nasdaq Stock Market or any national securities exchange on
which the Company’s securities are listed for trading and, if
not listed for trading on either the Nasdaq Stock Market or a national
securities exchange, then the rules of the Nasdaq Stock Market. The
settlement of any Award may be accelerated, and cash paid in lieu of
Shares in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events (in
addition to a Change in Control). Installment or deferred payments may
be required by the Committee (subject to Section 10(e) of the Plan,
including the consent provisions thereof in the case of any deferral of
an outstanding Award not provided for in the original Award Agreement)
or permitted at the election of the Participant on terms and conditions
established by the Committee. Payments may include, without limitation,
provisions for the payment or crediting of a reasonable interest rate
on installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in
Shares.

(d) Exemptions from Section 16(b)
Liability.    It is the intent of the Company that the grant of
any Awards to or other transaction by a Participant who is subject to
Section 16 of the Exchange Act shall be exempt from Section 16 pursuant
to an applicable exemption (except for transactions acknowledged in
writing to be non-exempt by such Participant). Accordingly, if any
provision of this Plan or any Award Agreement does not comply with the
requirements of Rule 16b-3 then applicable to any such transaction,
such provision shall be construed or deemed amended to the extent
necessary to conform to the applicable requirements of Rule 16b-3 so
that such Participant shall avoid liability under Section 16(b).

8. Code Section 162(m)
Provisions.


(a) Covered
Employees.    The Committee, in its discretion, may determine at
the time an Award is granted to an Eligible Person who is, or is likely
to be, as of the end of the tax year in which 

11









the Company would claim a tax deduction in
connection with such Award, a Covered Employee, that the provisions of
this Section 8 shall be applicable to such Award.

(b) Performance Criteria.    If an Award is
subject to this Section 8, then the lapsing of restrictions thereon and
the distribution of cash, Shares or other property pursuant thereto, as
applicable, shall be contingent upon achievement of one or more
objective performance goals. Performance goals shall be objective and
shall otherwise meet the requirements of Section 162(m) of the Code and
regulations thereunder including the requirement that the level or
levels of performance targeted by the Committee result in the
achievement of performance goals being ‘‘substantially
uncertain.’’ One or more of the following business
criteria for the Company, on a consolidated basis, and/or for Related
Entities, or for business or geographical units of the Company and/or a
Related Entity (except with respect to the total shareholder return and
earnings per share criteria), shall be used by the Committee in
establishing performance goals for such Awards: (1) earnings per
share; (2) revenues or margins; (3) cash flow;
(4) operating margin; (5) return on net assets,
investment, capital, or equity; (6) economic value added;
(7) direct contribution; (8) net income; pretax earnings;
earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings after interest expense and
before extraordinary or special items; operating income; income before
interest income or expense, unusual items and income taxes, local,
state or federal and excluding budgeted and actual bonuses which might
be paid under any ongoing bonus plans of the Company;
(9) working capital; (10) management of fixed costs or
variable costs; (11) identification or consummation of
investment opportunities or completion of specified projects in
accordance with corporate business plans, including strategic mergers,
acquisitions or divestitures; (12) total shareholder return; and
(13) debt reduction. Any of the above goals may be determined on
an absolute or relative basis or as compared to the performance of a
published or special index deemed applicable by the Committee
including, but not limited to, the Standard & Poor’s 500
Stock Index or a group of companies that are comparable to the Company.
The Committee may exclude the impact of an event or occurrence which
the Committee determines should appropriately be excluded, including
without limitation (i) restructurings, discontinued operations,
extraordinary items, and other unusual or non-recurring charges, (ii)
an event either not directly related to the operations of the Company
or not within the reasonable control of the Company’s
management, or (iii) a change in accounting standards required by
generally accepted accounting
principles.

(c) Performance Period; Timing For
Establishing Performance Goals. Achievement of performance
goals in respect of such Performance Awards shall be measured over a
Performance Period no shorter than 12 months and no longer than five
years, as specified by the Committee. Performance goals shall be
established not later than 90 days after the beginning of any
Performance Period applicable to such Performance Awards, or at such
other date as may be required or permitted for
‘‘performance-based compensation’’ under
Code Section
162(m).

(d) Adjustments. The
Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with Awards subject to this Section
8, but may not exercise discretion to increase any such amount payable
to a Covered Employee in respect of an Award subject to this Section 8.
The Committee shall specify the circumstances in which such Awards
shall be paid or forfeited in the event of termination of Continuous
Service by the Participant prior to the end of a Performance Period or
settlement of Awards.

(e) Committee
Certification.    No Participant shall receive any payment under
the Plan unless the Committee has certified, by resolution or other
appropriate action in writing, that the performance criteria and any
other material terms previously established by the Committee or set
forth in the Plan, have been satisfied to the extent necessary to
qualify as ‘‘performance based
compensation’’ under Code Section
162(m).

9. Change in
Control.


(a) Effect of
‘‘Change in Control.’’ Subject
to Section 9(a)(iv), and if and only to the extent provided in the
Award Agreement, or to the extent otherwise determined by the
Committee, upon the occurrence of a ‘‘Change in
Control,’’ as defined in Section 9(b):

12








(i) Any Option or Stock
Appreciation Right that was not previously vested and exercisable as of
the time of the Change in Control, shall become immediately vested and
exercisable, subject to applicable restrictions set forth in Section
10(a) hereof.

(ii) Any restrictions, deferral
of settlement, and forfeiture conditions applicable to a Restricted
Stock Award, Deferred Stock Award or an Other Stock-Based Award subject
only to future service requirements granted under the Plan shall lapse
and such Awards shall be deemed fully vested as of the time of the
Change in Control, except to the extent of any waiver by the
Participant and subject to applicable restrictions set forth in Section
10(a) hereof.

(iii) With respect to any
outstanding Award subject to achievement of performance goals and
conditions under the Plan, the Committee may, in its discretion, deem
such performance goals and conditions as having been met as of the date
of the Change in Control.

(iv) Notwithstanding
the foregoing, if in the event of a Change in Control the successor
company assumes or substitutes for an Option, Stock Appreciation Right,
Restricted Stock Award, Deferred Stock Award or Other Stock-Based
Award, then each outstanding Option, Stock Appreciation Right,
Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award
shall not be accelerated as described in Sections 9(a)(i), (ii) and
(iii). For the purposes of this Section 9(a)(iv), an Option, Stock
Appreciation Right, Restricted Stock Award, Deferred Stock Award or
Other Stock-Based Award shall be considered assumed or substituted for
if following the Change in Control the award confers the right to
purchase or receive, for each Share subject to the Option, Stock
Appreciation Right, Restricted Stock Award, Deferred Stock Award or
Other Stock-Based Award immediately prior to the Change in Control, the
consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change in Control by holders
of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the
transaction constituting a Change in Control is not solely common stock
of the successor company or its parent or subsidiary, the Committee
may, with the consent of the successor company or its parent or
subsidiary, provide that the consideration to be received upon the
exercise or vesting of an Option, Stock Appreciation Right, Restricted
Stock Award, Deferred Stock Award or Other Stock-Based Award, for each
Share subject thereto, will be solely common stock of the successor
company or its parent or subsidiary substantially equal in fair market
value to the per share consideration received by holders of Shares in
the transaction constituting a Change in Control. The determination of
such substantial equality of value of consideration shall be made by
the Committee in its sole discretion and its determination shall be
conclusive and binding.

(b) Definition of
‘‘Change in Control.’’ Unless
otherwise specified in an Award Agreement, a ‘‘Change in
Control’’ shall mean the occurrence of any of the
following:

(i) The acquisition by any Person of
Beneficial Ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of
either (A) the then outstanding shares of common stock of the Company
(the ‘‘Outstanding Company Common Stock’’)
or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the ‘‘Outstanding Company Voting Securities)
(the foregoing Beneficial Ownership hereinafter being referred to as a
‘‘Controlling Interest’’); provided,
however, that for purposes of this Section 9(b), the following
acquisitions shall not constitute or result in a Change of Control: (v)
any acquisition directly from the Company; (w) any acquisition by the
Company; (x) any acquisition by any Person that as of the Effective
Date owns Beneficial Ownership of a Controlling Interest; (y) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Subsidiary; or (z) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) below;
or

(ii) During any period of two (2)
consecutive years (not including any period prior to the Effective
Date) individuals who constitute the Board on the Effective Date (the
‘‘Incumbent Board’’) cease for any reason
to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Effective Date
whose election, or nomination 

13









for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board;
or

(iii) Consummation of a reorganization,
merger, statutory share exchange or consolidation or similar corporate
transaction involving the Company or any of its Subsidiaries, a sale or
other disposition of all or substantially all of the assets of the
Company, or the acquisition of assets or stock of another entity by the
Company or any of its Subsidiaries (each a ‘‘Business
Combination’’), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals
and entities who were the Beneficial Owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than fifty percent (50%) of
the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business
Combination or any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest) beneficially owns, directly or
indirectly, fifty percent (50%) or more of the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority
of the members of the Board of Directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or

(iv) Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.

10. General
Provisions.


(a) Compliance With Legal and
Other Requirements.    The Company may, to the extent deemed
necessary or advisable by the Committee, postpone the issuance or
delivery of Shares or payment of other benefits under any Award until
completion of such registration or qualification of such Shares or
other required action under any federal or state law, rule or
regulation, listing or other required action with respect to any stock
exchange or automated quotation system upon which the Shares or other
Company securities are listed or quoted, or compliance with any other
obligation of the Company, as the Committee, may consider appropriate,
and may require any Participant to make such representations, furnish
such information and comply with or be subject to such other conditions
as it may consider appropriate in connection with the issuance or
delivery of Shares or payment of other benefits in compliance with
applicable laws, rules, and regulations, listing requirements, or other
obligations.

(b) Limits on Transferability;
Beneficiaries.    No Award or other right or interest granted
under the Plan shall be pledged, hypothecated or otherwise encumbered
or subject to any lien, obligation or liability of such Participant to
any party, or assigned or transferred by such Participant otherwise
than by will or the laws of descent and distribution or to a
Beneficiary upon the death of a Participant, and such Awards or rights
that may be exercisable shall be exercised during the lifetime of the
Participant only by the Participant or his or her guardian or legal
representative, except that Awards and other rights (other than
Incentive Stock Options and Stock Appreciation Rights in tandem
therewith) may be transferred to one or more Beneficiaries or other
transferees during the 

14









lifetime of the Participant, and may be
exercised by such transferees in accordance with the terms of such
Award, but only if and to the extent such transfers are permitted by
the Committee pursuant to the express terms of an Award Agreement
(subject to any terms and conditions which the Committee may impose
thereon). A Beneficiary, transferee, or other person claiming any
rights under the Plan from or through any Participant shall be subject
to all terms and conditions of the Plan and any Award Agreement
applicable to such Participant, except as otherwise determined by the
Committee, and to any additional terms and conditions deemed necessary
or appropriate by the
Committee.

(c) Adjustments.


(i) Adjustments
to Awards.    In the event that any extraordinary dividend or
other distribution (whether in the form of cash, Shares, or other
property), recapitalization, forward or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, share
exchange, liquidation, dissolution or other similar corporate
transaction or event affects the Shares and/or such other securities of
the Company or any other issuer such that a substitution, exchange, or
adjustment is determined by the Committee to be appropriate, then the
Committee shall, in such manner as it may deem equitable, substitute,
exchange or adjust any or all of (A) the number and kind of
Shares which may be delivered in connection with Awards granted
thereafter, (B) the number and kind of Shares by which annual
per-person Award limitations are measured under Section 5 hereof,
(C) the number and kind of Shares subject to or deliverable in
respect of outstanding Awards, (D) the exercise price, grant
price or purchase price relating to any Award and/or make provision for
payment of cash or other property in respect of any outstanding Award,
and (E) any other aspect of any Award that the Committee determines to
be appropriate.

(ii) Adjustments in Case of
Certain Corporate Transactions.    In the event of any merger,
consolidation or other reorganization in which the Company does not
survive, or in the event of any Change in Control, any outstanding
Awards may be dealt with in accordance with any of the following
approaches, as determined by the agreement effectuating the transaction
or, if and to the extent not so determined, as determined by the
Committee: (a) the continuation of the outstanding Awards by the
Company, if the Company is a surviving corporation, (b) the assumption
or substitution for, as those terms are defined in Section 9(b)(iv)
hereof, the outstanding Awards by the surviving corporation or its
parent or subsidiary, (c) full exercisability or vesting and
accelerated expiration of the outstanding Awards, or (d) settlement of
the value of the outstanding Awards in cash or cash equivalents or
other property followed by cancellation of such Awards (which value, in
the case of Options or Stock Appreciation Rights, shall be measured by
the amount, if any, by which the Fair Market Value of a Share exceeds
the exercise or grant price of the Option or Stock Appreciation Right
as of the effective date of the transaction). The Committee shall give
written notice of any proposed transaction referred to in this Section
10(c)(ii) a reasonable period of time prior to the closing date for
such transaction (which notice may be given either before or after the
approval of such transaction), in order that Participants may have a
reasonable period of time prior to the closing date of such transaction
within which to exercise any Awards that are then exercisable
(including any Awards that may become exercisable upon the closing date
of such transaction). A Participant may condition his exercise of any
Awards upon the consummation of the
transaction.

(iii) Other
Adjustments.    The Committee (and the Board if and only to the
extent such authority is not required to be exercised by the Committee
to comply with Section 162(m) of the Code) is authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards (including Performance Awards, or performance goals relating
thereto) in recognition of unusual or nonrecurring events (including,
without limitation, acquisitions and dispositions of businesses and
assets) affecting the Company, any Related Entity or any business unit,
or the financial statements of the Company or any Related Entity, or in
response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view
of the Committee's assessment of the business strategy of the
Company, any Related Entity or business unit thereof, performance of
comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made
if and to the extent that such authority or the making of such
adjustment would cause Options, Stock Appreciation Rights, Performance
Awards granted pursuant to 

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Section 8(b) hereof to Participants
designated by the Committee as Covered Employees and intended to
qualify as ‘‘performance-based
compensation’’ under Code Section 162(m) and the
regulations thereunder to otherwise fail to qualify as
‘‘performance-based compensation’’ under
Code Section 162(m) and regulations
thereunder.

(d) Taxes.    The Company and
any Related Entity are authorized to withhold from any Award granted,
any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially
payable in connection with any transaction involving an Award, and to
take such other action as the Committee may deem advisable to enable
the Company or any Related Entity and Participants to satisfy
obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make
cash payments in respect thereof in satisfaction of a
Participant's tax obligations, either on a mandatory or elective
basis in the discretion of the
Committee.

(e) Changes to the Plan and
Awards.    The Board may amend, alter, suspend, discontinue or
terminate the Plan, or the Committee's authority to grant Awards
under the Plan, without the consent of shareholders or Participants,
except that any amendment or alteration to the Plan shall be subject to
the approval of the Company's shareholders not later than the
annual meeting next following such Board action if such shareholder
approval is required by any federal or state law or regulation
(including, without limitation, Rule 16b-3 or Code Section 162(m)) or
the rules of any stock exchange or automated quotation system on which
the Shares may then be listed or quoted), and the Board may otherwise,
in its discretion, determine to submit other such changes to the Plan
to shareholders for approval; provided that, without the consent of an
affected Participant, no such Board action may materially and adversely
affect the rights of such Participant under any previously granted and
outstanding Award. The Committee may waive any conditions or rights
under, or amend, alter, suspend, discontinue or terminate any Award
theretofore granted and any Award Agreement relating thereto, except as
otherwise provided in the Plan; provided that, without the consent of
an affected Participant, no such Committee or the Board action may
materially and adversely affect the rights of such Participant under
such Award.

(f) Limitation on Rights Conferred
Under Plan.    Neither the Plan nor any action taken hereunder
shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant
or in the employ or service of the Company or a Related Entity;
(ii) interfering in any way with the right of the Company or a
Related Entity to terminate any Eligible Person's or
Participant's Continuous Service at any time, (iii) giving
an Eligible Person or Participant any claim to be granted any Award
under the Plan or to be treated uniformly with other Participants and
Employees, or (iv) conferring on a Participant any of the rights
of a shareholder of the Company unless and until the Participant is
duly issued or transferred Shares in accordance with the terms of an
Award.

(g) Unfunded Status of Awards; Creation
of Trusts.    The Plan is intended to constitute an
‘‘unfunded’’ plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Shares pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the
creation of trusts and deposit therein cash, Shares, other Awards or
other property, or make other arrangements to meet the Company's
obligations under the Plan. Such trusts or other arrangements shall be
consistent with the ‘‘unfunded’’ status of
the Plan unless the Committee otherwise determines with the consent of
each affected Participant. The trustee of such trusts may be authorized
to dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Committee may
specify and in accordance with applicable
law.

(h) Nonexclusivity of the
Plan.    Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may
deem desirable including incentive arrangements and awards which do not
qualify under Section 162(m) of the Code.

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(i) Payments in the
Event of Forfeitures; Fractional Shares.    Unless otherwise
determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration,
the Participant shall be repaid the amount of such cash or other
consideration. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise
eliminated.

(j) Governing Law.    The
validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be determined
in accordance with the laws of the State of Delaware without giving
effect to principles of conflict of laws, and applicable federal
law.

(k) Non-U.S. Laws.    The Committee
shall have the authority to adopt such modifications, procedures, and
subplans as may be necessary or desirable to comply with provisions of
the laws of foreign countries in which the Company or its Subsidiaries
may operate to assure the viability of the benefits from Awards granted
to Participants performing services in such countries and to meet the
objectives of the Plan.

(l) Plan Effective
Date and Shareholder Approval; Termination of Plan.    The Plan
shall become effective on the Effective Date, subject to subsequent
approval, within 12 months of its adoption by the Board, by
shareholders of the Company eligible to vote in the election of
directors, by a vote sufficient to meet the requirements of Code
Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange
Act (if applicable), applicable requirements under the rules of any
stock exchange or automated quotation system on which the Shares may be
listed or quoted, and other laws, regulations, and obligations of the
Company applicable to the Plan. Awards may be granted subject to
shareholder approval, but may not be exercised or otherwise settled in
the event the shareholder approval is not obtained. The Plan shall
terminate at the earliest of (a) such time as no Shares remain
available for issuance under the Plan, (b) termination of this Plan by
the Board, or (c) the tenth anniversary of the Effective Date. Awards
outstanding upon expiration of the Plan shall remain in effect until
they have been exercised or terminated, or have expired.

Adopted October  ,
2005

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