Advanced Materials Group, Inc. 2007 Stock Incentive Plan


    Exhibit
      4.1

    ADVANCED
      MATERIALS GROUP, INC.

     

    2007
      STOCK INCENTIVE PLAN 

     

    


     

    SECTION
      1.  PURPOSE
      OF THIS PLAN

     

    1.1  Eligible
      Award Recipients.
      The
      persons eligible to receive Awards under the Advanced Materials Group, Inc.
      Stock Incentive Plan (the “Plan”)
      are
      the Employees, Consultants and Directors who are responsible for or contribute
      to the management, growth and success of Advanced Materials Group, Inc. (the
      “Company”)
      and
      its Affiliates. 

     

    1.2  General
      Purpose.
      The
      Company desires, by means of the Plan, to retain and attract Employees,
      Directors and Consultants who contribute to the Company’s success by their
      ability, ingenuity and industry, and to enable such Persons to participate
      in
      the long-term success and growth of the Company by giving them a proprietary
      interest in the Company through the granting of the following Awards: (i)
      Incentive Stock Options, (ii) Non-Qualified Stock Options, (iii) Restricted
      Shares and (iv) Stock Appreciation Rights. 

     

    SECTION
      2.  DEFINITIONS

     

    As
      used
      in this Plan, the following terms shall have the meanings set forth below unless
      the context requires otherwise:

     

    2.1  “Affiliate”
      shall
      mean any Parent Corporation or Subsidiary Corporation, whether now existing
      or
      hereafter established.

     

    2.2  “Award”
      shall
      mean the grant of a Stock Option, a Restricted Share or a Stock Appreciation
      Right pursuant to this Plan.

     

    2.3  “Award
      Agreement”
      shall
      mean the written agreement evidencing the terms and conditions of a grant of
      one
      or more Awards under this Plan to an Eligible Individual. Each Award Agreement
      shall be subject to the terms and conditions of the Plan and need not be
      identical.

     

    2.4  “Award
      Date”
      shall
      mean the date on which an Award is granted to an Eligible
      Individual.

     

    2.5  “Award
      Term”
      shall
      mean the maximum period during which a Participant may exercise, purchase,
      or
      otherwise benefit from an Award granted under this Plan.

     

    2.6  “Board”
      shall
      mean the Board of Directors of the Company, as the same may be constituted
      from
      time to time.

     

    2.7  “Cause”
      shall
      mean the occurrence of one or more of the following events, except as otherwise
      provided in the Award Agreement: the commission of fraud against the Company
      by
      the Participant, or the misappropriation, theft or embezzlement of the Company's
      assets by the Participant, or the performance by the Participant of illegal
      or
      fraudulent acts, criminal conduct, or willful misconduct materially injurious
      to
      the business of the Company, in each case as determined by the Board;
provided,
      however,
      that
      with respect to a Participant who is a party to a written employment or
      consulting agreement with the Company, which agreement contains a definition
      of
“for cause” or “cause” (or words of like import) for purposes of termination of
      employment or engagement thereunder by the Company, the term “Cause” means “for
      cause” or “cause” as defined in the most recent of such agreements then in
      effect. The determination of a Participant’s termination for “Cause” for
      purposes of this Plan shall be made in the sole and absolute discretion of
      the
      Plan Administrator.

     

    2.8  “Change
      in Control”
shall
      mean the occurrence of any one of the following events:

     

    (a) a
      sale,
      transfer or other conveyance of all or substantially all of the assets of the
      Company on a consolidated basis;

     

    (b) the
      acquisition of beneficial ownership (as such term is defined in Rule 13d-3
      promulgated under the Exchange Act) by any "person" (as such term is used in
      Sections 13(d) and 14(d) of the Exchange Act), directly or indirectly, of
      securities representing 50% or more of the total number of votes that may be
      cast for the election of directors of the Company; or

     

    (c) the
      failure at any annual or special meeting of the Company's stockholders held
      during the three-year period following a "solicitation in opposition" as defined
      in Rule 14a-6 promulgated under the Exchange Act, of a majority of the persons
      nominated by the Company in the proxy material mailed to shareholders by the
      management of the Company to win election to seats on the Board (such majority
      calculated based upon the total number of persons nominated by the Company
      failing to win election to seats on the Board divided by the total number of
      Board members of the Board as of the beginning of such three year period),
      excluding only those who die, retire voluntarily, are disabled or are otherwise
      disqualified in the interim between their nomination and the date of the
      meeting. 

     

    2.9  “Code” shall
      mean the Internal Revenue Code of 1986, as amended from time to time (or any
      successor to such legislation).

     

    2.10  “Committee” shall
      mean the Compensation Committee of the Board; provided, however, that in the
      event the Compensation Committee is not comprised solely of Outside Directors,
      then, with respect to any Performance-Based Award granted under this Plan to
      a
      Covered Employee, the Committee shall mean the two or more Outside Directors
      appointed by the Board to administer the Plan with respect to such Award.


     

    2.11  “Common
      Stock”
      shall
      mean the authorized shares of common stock of the Company, no par value,
as
      may be
      adjusted by the Board from time to time. Any adjustment to the par value of
      a
      share shall be incorporated herein without any need to otherwise amend the
      Plan.

     

    2.12  “Company”
      shall
      mean Advanced Materials Group, Inc., a corporation organized under the laws
      of
      the State of Nevada, and any successor thereto.

     

    2.13  “Consultant” shall
      mean any Person, including an advisor, (i) engaged by the Company or an
      Affiliate to render consulting or advisory services and who is compensated
      for
      such services or who provides bona
      fide
      services
      to the Company or an Affiliate pursuant to a written agreement; or
      (ii)
      who is a member of the board of directors of an Affiliate. However, the term
      “Consultant” shall not include either Directors who are not compensated by the
      Company for their services as a Director or Directors who are merely paid a
      director’s fee by the Company for their services as a Director.

     

    2.14  “Continuous
      Service” shall
      mean that the Participant’s service with the Company or an Affiliate, whether as
      an Employee, Consultant or Director, is not interrupted or terminated.
      Participant’s Continuous Service shall not be deemed to have terminated merely
      because of a change in the capacity in which Participant renders service to
      the
      Company or an Affiliate as an Employee, Consultant or Director or a change
      in
      the entity for which Participant renders such service, provided that there
      is no
      interruption or termination of Participant’s Continuous Service. For example, a
      change in status from an Employee of the Company to a Consultant of an Affiliate
      or a Director will not constitute an interruption of Continuous Service.
      Notwithstanding the foregoing, with respect to an Incentive Stock Option, an
      Employee’s Continuous Service shall be deemed to have terminated in the event of
      a change in capacity from an Employee to a Consultant or non-employee Director.
      The Plan Administrator shall determine, in its sole discretion, whether
      Continuous Service shall be considered interrupted in the case of any leave
      of
      absence approved by the Company, including sick leave, military leave or any
      other personal leave.

     

    2.15  “Covered
      Employee”
      shall
      mean the chief executive officer and the four (4) other highest compensated
      officers of the Company for whom total compensation is required to be reported
      to stockholders under the Exchange Act, as determined for purposes of Section
      162(m) of the Code.

     

    2.16  “Director”
      shall
      mean a member of the Board, whether an employee, former employee, Outside
      Director or other non-employee member.

     

    2.17  “Disability” shall
      mean the Participant’s permanent and total inability to engage in any
      substantial gainful activity by reason of any medically determinable physical
      or
      mental impairment which can be expected to result in death or which can be
      expected to last for a continuous period of not less than 12 months. The
      determination of a Participant’s “Disability” shall be made in the sole and
      absolute discretion of the Plan Administrator.

     

    2.18  “Effective
      Date”
      shall
      mean the date on which the shareholders approved the Plan.

     

    2.19  “Eligible
      Individual”
      shall
      mean an Employee, Consultant or Director eligible to receive an Award under
      Section
      5
      of this
      Plan.

     

    2.20  “Employee” shall
      mean, for purposes of this Plan, a common-law employee of the Company or any
      Affiliate. Mere service as a Director or payment of a director’s fee by the
      Company or any Affiliate shall not be sufficient to constitute “employment” by
      the Company or an Affiliate.

     

    2.21  “Exchange
      Act”
      shall
      mean the Securities Exchange Act of 1934, as amended from time to time (or
      any
      successor to such legislation). 

     

    2.22  “Exercise
      Agreement”
      shall
      mean the written agreement delivered by Participant to the Plan Administrator
      to
      evidence such Participant’s exercise of rights provided under the applicable
      Award Agreement.

     

    2.23  “Exercise
      Date”
      shall
      mean the date set out in the Exercise Agreement on which Participant exercises
      those rights provided under the applicable Award Agreement.

     

    2.24  “Exercise
      Price”
      shall
      mean the consideration required, as determined by the Plan Administrator and
      set
      out in the Award Agreement, to be remitted upon exercise of an
      Award.

     

    2.25  “Expiration
      Date”
shall
      mean the date that is ten (10) years from the Effective Date, or, in the event
      the Plan is subsequently amended to make any change described in clause
      (iii) of subsection 13.1,
      the
      date that is ten (10) years from the date on which such amendment is approved
      by
      the Board, or if later, the date on which such amendment is approved by the
      shareholders of the Company.

     

    2.26  “Fair
      Market Value” shall
      mean, with respect to each Share,

     

    (a)
       If
      the
      Common Stock is listed on an established stock exchange or a national market
      system, including without limitation the Nasdaq National Market, the closing
      sales price for such stock (or the closing bid, if no sales were reported)
      as
      quoted on such exchange or system on the last market trading date immediately
      prior to the date of determination, as reported in The
      Wall Street Journal
      or such
      other source as the Plan Administrator, in its sole and absolute discretion,
      deems reliable; 

    


    (b)  If
      the
      Common Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, the mean of the high bid and low asked prices for
      the
      Common Stock on the last market trading day immediately prior to the date of
      determination; or

    


    (c)  In
      the
      absence of an established market for the Common Stock, the value established,
      in
      good faith, by the Board as of the determination date in accordance with the
      applicable regulations and guidance promulgated under Section 409A of the Code
      (or any successor provision thereto) and published in the Internal Revenue
      Bulletin.

    


    2.27  “Incentive
      Stock Option” shall
      mean any option to purchase Shares awarded pursuant to Section
      6
      of this
      Plan that qualifies as an “incentive stock option” pursuant to Section 422 of
      the Code (or any successor provision thereto).

     

    2.28  “Non-Qualified
      Stock Option” shall
      mean any option to purchase Shares awarded pursuant to Section
      6
      of this
      Plan that does not qualify as an Incentive Stock Option (including, without
      limitation, any option to purchase Shares originally designated, or intended
      to
      qualify, as an Incentive Stock Option but that does not, for any reason
      whatsoever, qualify as an Incentive Stock Option).

     

    2.29  “Outside
      Director”
shall
      have the meaning set forth in Section 162(m) of the Code (or any successor
      provision thereto).

     

    2.30  “Parent
      Corporation” shall
      mean any entity (other than the Company) in an unbroken chain of entities ending
      with the Company, provided each entity in the unbroken chain (other than the
      Company) owns, at the time of the determination, ownership interests possessing
      fifty percent (50%) or more of the total combined voting power of all classes
      of
      ownership interests in one of the other entities in such chain; provided,
      however, that with respect to an Award of an Incentive Stock Option, the term
      “Parent Corporation” shall refer solely to an entity that is taxed under Federal
      income tax laws as a corporation.

     

    2.31  “Participant”
      shall
      mean any Eligible Individual who has been granted and holds an Award granted
      pursuant to this Plan.

     

    2.32  “Performance-Based
      Award”
      shall
      mean an Award the benefit of which is paid solely on account of the attainment
      (as certified in writing by the Committee) of one or more objective performance
      goals, which are established by the Committee and approved by the shareholders
      of the Company in accordance with the requirements prescribed in Section 162(m)
      of the Code (or any successor provision thereto).

     

    2.33  “Person” shall
      mean an individual, partnership, joint venture, corporation, limited liability
      company, trust, estate or other entity or organization.

     

    2.34  “Plan”
      shall
      mean Advanced Materials Group, Inc. Stock Incentive Plan, as amended from time
      to time.

     

    2.35  “Plan
      Administrator” shall
      mean the Committee appointed by the Board to administer the Plan pursuant to
      subsection
      3.1
      hereof
      or, if no Committee has been appointed or is then serving, the Board.


     

    2.36  “Plan
      Year”
shall
      mean the period commencing on the first day of the Company’s taxable year and
      ending on the last day therewith, inclusive of both dates.

     

    2.37  “Purchase
      Price”
      shall
      mean the consideration required, as determined by the Plan Administrator and
      set
      out in the Award Agreement, to be remitted upon grant of an Award of Restricted
      Shares.

     

    2.38  “Restricted
      Shares” shall
      mean any Shares granted pursuant to Section
      7
      of this
      Plan that are subject to transferability restrictions and a substantial risk
      of
      forfeiture.

     

    2.39  “Restriction
      Period”
      shall
      mean the period during which Restricted Shares issued pursuant to Section
      7
      hereof
      are subject to transferability restrictions and a substantial risk of
      forfeiture.

     

    2.40  “Securities Act”
      shall
      mean the Securities Act of 1933, as amended from time to time (or any successor
      to such legislation).

     

    2.41  “Shares”
      shall
      mean shares of the Common Stock and any shares of capital stock or other
      securities hereafter issued or issuable upon, in respect of or in substitution
      or exchange for shares of Common Stock.

     

    2.42  “Stock
      Appreciation Right” shall
      mean any Award granted pursuant to Section
      8
      of this
      Plan for the right to receive cash or Shares with a Fair Market Value equal
      to
      the excess of the Fair Market Value of the aggregate number of Shares subject
      to
      such Stock Appreciation Right on the Exercise Date over the Fair Market Value
      of
      the aggregate number of Shares subject to such Stock Appreciation Right on
      the
      Award Date. 

     

    2.43  “Stock
      Option” shall
      mean any Incentive Stock Option or Non-Qualified Stock Option.

     

    2.44  “Subsidiary
      Corporation” shall
      mean any entity (other than the Company) in an unbroken chain of entities
      beginning with the Company, provided each entity (other than the last entity)
      in
      the unbroken chain owns, at the time of the determination, stock possessing
      fifty percent (50%) or more of the total combined voting power of all classes
      of
      ownership interests in one of the other entities in such chain; provided,
      however, that with respect to an Award of an Incentive Stock Option, the term
      “Subsidiary Corporation” shall refer solely to an entity that is taxed under
      Federal income tax laws as a corporation.

     

    2.45  “Ten
      Percent Shareholder”
      shall
      mean an individual who, at the time a Stock Option is granted pursuant to
Section
      6
      hereof,
      owns (or is deemed to own pursuant to Section 424(d) of the Code, or any
      successor provision thereto) stock possessing more than ten percent (10%) of
      the
      total combined voting power of all classes of stock of the Company or any
      Affiliate. 

     

    2.46  “Termination
      Date” shall
      mean the date on which Participant’s Continuous Service with the Company (or any
      Affiliate) terminates due to death, Disability, voluntary termination, with
      or
      without Cause, or otherwise.

     

    SECTION
      3.  ADMINISTRATION
      OF THE PLAN

     

    3.1  Administration
      of Plan.
      The
      Plan
      shall be administered by the Committee, which shall be comprised of two or
      more
      members of the Board. In the event of a vacancy, the Board shall appoint another
      of its members to serve. All members of the Committee will serve at the pleasure
      of the Board and shall be authorized to act with respect to all matters relating
      to the administration of the Plan. The Committee will act by a majority of
      its
      members (or by unanimous vote if the Committee is comprised of two (2) members).
      To the extent a Committee appointed hereunder shall cease or no longer be
      authorized to act hereunder, the functions delegated to the Committee shall
      revert to the Board.

     

    3.2  Powers
      of the Plan Administrator. The
      Plan
      Administrator shall have the power, in its sole and absolute discretion, but
      subject to and within the limitations of, the express provisions of the
      Plan:

     

    (a)  To
      determine from time to time which Eligible Individuals shall be granted Awards
      under the Plan, provided that any Award granted to a member of the Committee
      shall be subject to the approval or ratification of the Board; 

     

    (b)  To
      determine when and how each Award shall be granted; what type or combination
      of
      types of Awards shall be granted; the provisions of each Award granted (which
      need not be identical), including the time or times when an Award may be
      exercised; the number of Shares with respect to which an Award shall be granted
      to each such Person; the Exercise Price or the Purchase Price for Shares under
      an Award; the terms, performance criteria or other conditions, vesting periods
      or any restrictions for an Award and any restrictions on Shares acquired
      pursuant to an Award; and any other terms and conditions of an Award that the
      Plan Administrator deems appropriate and as are not inconsistent with the terms
      of the Plan;

     

    (c)  To
      determine whether, to what extent, and under what circumstances, to allow
      alternative payment options to exercise Awards, or pay withholding taxes imposed
      upon the grant, exercise or vesting of any Award, and the terms and conditions
      of such payment options;

     

    (d)  To
      rely
      upon employees of the Company for such clerical and recordkeeping duties as
      may
      be necessary in connection with the administration of this Plan;

     

    (e)  To
      accelerate or defer (with the consent of the subject Participant) the vesting
      of
      any rights under an Award; 

     

    (f)  To
      establish, amend and revoke such rules and regulations as it may deem
      appropriate for the conduct of meetings and the proper administration of the
      Plan;

     

    (g)  To
      delegate to one or more Persons the right to act on its behalf in such matters
      as authorized by the Plan Administrator; 

     

    (h)  To
      construe and interpret the Plan and Award Agreements issued hereunder;


     

    (i)  To
      amend
      the Plan or an Award Agreement to the extent provided under Section
      13
      hereof.
      The Plan Administrator, in the exercise of this power, may correct any defect,
      omission or inconsistency in the Plan or in any Award Agreement, in a manner
      and
      to the extent it shall deem necessary or expedient to make the Plan fully
      effective; and

     

    (j)  To
      take
      any and all other actions that are deemed necessary or advisable by the Plan
      Administrator for the administration of the Plan.

     

    3.3  Effect
      of Plan Administrator’s Decision.
      All
      determinations, interpretations and constructions made by the Plan Administrator
      in good faith shall not be subject to review by any Person and shall be final,
      binding and conclusive on all Persons. Any member of the Committee or the Board
      acting as Plan Administrator, and any officer or Employee of the Company or
      any
      Affiliate acting at the direction of the Plan Administrator, 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 provided in subsection
      14.6
      hereof,
      be fully indemnified by the Company with respect to any such action or
      determination.

     

    SECTION
      4.  SHARES
      SUBJECT TO PLAN AND RELATED ADJUSTMENTS

     

    4.1  Share
      Reserve.
      Except
      as
      otherwise provided in this Section
      4,
      the
      maximum number of Shares that may be issued with respect to Awards granted
      pursuant to this Plan shall not exceed 34,000,000; provided, however, that
      the
      maximum number of Shares that may be issued upon exercise of Incentive Stock
      Options granted pursuant to this Plan shall not exceed 34,000,000 Shares. The
      Shares issued pursuant to this Plan may be authorized but unissued Shares or
      may
      be Shares acquired by the Company, including shares purchased by the Company
      on
      the open market for purposes of the Plan.

     

    4.2  Maximum
      Award to Eligible Individual.
      The
      maximum number of Shares with respect to which Awards may be granted to an
      Eligible Individual during any Plan Year shall not exceed ________________.
      For
      purposes of this subsection
      4.2,
      an
      Award that has been granted to an Eligible Individual during the Plan Year,
      but
      which is subsequently cancelled (including as the result of a repricing) will
      be
      counted against the maximum number of Shares with respect to which Awards may
      be
      granted to such Eligible Individual.

     

    4.3  Cancellation,
      Expiration, or Forfeiture of Award.
      To the
      extent that any Award granted pursuant to this Plan shall, on and after the
      Effective Date hereof, be forfeited, expire or be cancelled, in whole or in
      part, then the number of Shares subject to the Plan, as provided in subsection
      4.1,
      shall
      be increased by the portion of such awards so forfeited, expired or cancelled
      and such forfeited, expired or cancelled Shares may again be awarded pursuant
      to
      the provisions of this Plan. 

     

    4.4  Payment
      in Shares.
      If
      Shares are permitted to be delivered to the Company in full or partial payment
      of the Exercise Price, Purchase Price or the applicable withholding taxes
      imposed on any Award granted pursuant to this Plan, then the number of Shares
      available for future Awards granted pursuant to this Plan shall be reduced
      only
      by the net number of Shares issued under the applicable Award. 

     

    4.5  Repurchases
      of Shares. 
      If
      Shares issued in connection with any Award granted pursuant to this Plan shall,
      on and after the Effective Date, be repurchased by the Company, in whole or
      in
      part, then the number of Shares subject to the Plan pursuant to subsection
      4.1
      shall be
      increased by the portion of the Shares repurchased by the Company and such
      repurchased Shares may again be awarded pursuant to the provisions of this
      Plan.


     

    4.6  Issuance
      of Share Certificates. Prior
      to
      the issuance of Common Stock hereunder, whether upon grant, exercise, or
      purchase under the applicable Award, Participant shall submit the consideration,
      if any, required under the applicable Award Agreement; payment or other
      provision for any applicable tax withholding obligations; and all documents
      to
      be executed and delivered by Participant in accordance with the provisions
      of
      this Plan and the applicable Award Agreement or as may otherwise be required
      by
      the Company or the Plan Administrator, including, without limitation, with
      respect to Restricted Shares, a stock power, endorsed in blank, relating to
      the
      Shares covered by such Award. The Company will evidence the issuance of Shares
      hereunder by any means appropriate, including, without limitation, book-entry
      registration or issuance of a duly executed Share certificate in the name of
      Participant, provided that stock certificates evidencing Restricted Shares
      granted pursuant to this Plan shall be held in the custody of the Company or
      its
      duly authorized delegate until the restrictions thereon have lapsed. If
      certificates are issued, a separate certificate or certificates will be issued
      for Shares issued in connection with each type of Award granted to the
      Participant and, to the extent applicable, shall include a legend giving
      appropriate notice of the restrictions on the Shares.

     

    SECTION
      5.  ELIGIBILITY

     

    5.1  Individuals
      Eligible to Participate.
      The
      Plan Administrator shall determine, within the limitations of the Plan, the
      Eligible Individuals to whom Awards are to be granted. In making such
      determination, as well as the determination of the terms of such Option, the
      Plan Administrator may consider the position and responsibilities of the
      Eligible Individual, the importance of such individual to the Company, the
      duties of such individual, the past, present and potential contributions of
      such
      individual to the growth and success of the Company and such other factors
      as
      the Plan Administrator may deem relevant in connection with accomplishing the
      purposes of this Plan.

     

    5.2  Evidence
      of Participation.
      Each
      Award granted to an Eligible Individual shall be evidenced by an Award
      Agreement, in such form as prescribed by the Plan Administrator and containing
      such terms and provisions as are not inconsistent with this Plan. The
      provisions of separate Award Agreements need not be identical, but each Award
      Agreement shall include (through incorporation of the provisions hereof by
      reference in the Award Agreement or otherwise) the substance of the terms of
      the
      Plan.
      Each
      Award will be deemed to have been granted as of the date on which the Plan
      Administrator has completed the action declaring the Award, which date shall
      be
      specified by the Plan Administrator in the applicable Award Agreement,
      notwithstanding any delay which may elapse in executing and delivering such
      Award Agreement. 

     

    SECTION
      6.  STOCK
      OPTIONS

     

    6.1  Grant
      of Stock Options.
      The
      Plan
      Administrator may, in its sole and absolute discretion, grant Stock Options,
      whether alone or in addition to other Awards granted pursuant to this Plan,
      to
      any Eligible Individual;
      provided, however, that Incentive Stock Options may only be granted to Employees
      and, provided further, that no Stock Option shall be issued in “tandem” with a
      Stock Appreciation Right if such issuance would result in a “deferral of
      compensation” under Section 409A of the Code.
      Each
      Eligible Individual so selected shall be offered a Stock Option to purchase
      the
      number of Shares determined by the Plan Administrator. The Plan Administrator
      shall specify in the Award Agreement the number of Shares subject to the Award,
      whether such Stock Option is an Incentive Stock Option or Non-Qualified Stock
      Option, and such other terms or conditions as the Plan Administrator shall,
      in
      its sole and absolute discretion, determine appropriate and which are not
      inconsistent with the terms of the Plan. 

     

    6.2  Award
      Term.
      No
      Stock
      Option shall be exercisable after the expiration of the Award Term determined
      by
      the Plan Administrator and set out in Participant’s Award Agreement.
      Notwithstanding any provision to the contrary, the Award Term of any Incentive
      Stock Option granted under this Plan shall not exceed ten (10) years from the
      Award Date, or, in the case of an Incentive Stock Option granted to a Ten
      Percent Shareholder, five (5) years from the Award Date. 

     

    6.3  Exercise
      Price. The
      Exercise Price of each Stock Option granted under this Section
      6
      shall be
      established by the Plan Administrator or shall be determined by a method
      established by the Plan Administrator as of the Award Date. Notwithstanding
      the
      foregoing, the Exercise Price of any Stock Option shall not be less than 100%
      of
      the Fair Market Value of a Share on the Award Date (or if greater, the par
      value
      of such Common Stock) or,
      in
      the case of an Incentive Stock Option granted to a Ten Percent Shareholder,
      110%
      of the Fair Market Value of a Share
      on the
      Award Date.

     

    6.4  Vesting
      of Stock Options.
      Except
      as
      may otherwise be provided in an Award Agreement, each Stock Option granted
      pursuant to this Plan may only be exercised to the extent that Participant
      is
      vested in such Stock Option. Except as otherwise provided under subsection
      12.2
      herein,
      each Stock Option shall vest separately in accordance with the vesting schedule
      determined by the Plan Administrator and set out in the applicable Award
      Agreement. Notwithstanding
      the foregoing, the Plan Administrator may accelerate the vesting schedule of
      any
      outstanding Stock Option to the extent the Plan Administrator determines, in
      its
      sole and absolute discretion, that such acceleration is not inconsistent with
      the purposes of this Plan. 

     

    6.5  Time
      and Manner of Exercise.
      Except
      to
      the extent otherwise provided in the applicable Award Agreement, each Stock
      Option may be exercised, in whole or in part, by submitting to the Plan
      Administrator an Exercise Agreement in the form prescribed by the Plan
      Administrator and duly executed by Participant (or, following Participant’s
      Disability or death, his legal representative, estate or heirs, as the case
      may
      be). Except as otherwise permitted by the Plan Administrator and expressly
      provided in the applicable Award Agreement, the Exercise Price and applicable
      tax withholding shall be paid in full at the time of exercise in a manner
      permitted under Section
      9
      herein.

     

    (a)  Termination
      of Continuous Service.
      Unless
      otherwise provided in the applicable Award Agreement, in the event Participant’s
      Continuous Service terminates for any reason (other than upon such Participant’s
      death or Disability, or for Cause), such Participant may thereafter exercise
      the
      vested portion of his Stock Option (to the extent that such Participant was
      entitled to exercise such Stock Option as of the Termination Date) but only
      within such period of time ending on the earlier of (i) the date ninety (90)
      days following such Participant’s Termination Date or (ii) the expiration of the
      Award Term under subsection 6.2.
      If,
      after termination, such Participant (or, following Participant’s Disability or
      death, his legal representative, estate or heirs, as the case may be) does
      not
      exercise Participant’s Stock Option within the time specified herein, the Stock
      Option shall terminate and will no longer be exercisable. 

     

    (b)  Death
      of Participant.
      Unless
      otherwise provided in the applicable Award Agreement, in the event Participant’s
      Continuous Service terminates by reason of such Participant’s death (or in the
      event such Participant dies within ninety (90) days following such Participant’s
      Termination Date), such Participant’s estate or heirs may thereafter exercise
      such Participant’s Stock Option (to the extent that such Participant was
      entitled to exercise such Stock Option as of the Termination Date) but only
      within such period of time ending on the earlier of (i) the first anniversary
      of
      such Participant’s Termination Date or (ii) the expiration of the Award Term
      under subsection
      6.2.
      If,
      after such Participant’s death, Participant’s estate or heirs have not exercised
      Participant’s Stock Option within the time specified herein, the Stock Option
      shall terminate and will no longer be exercisable.

     

    (c)  Disability
      of Participant.
      Unless
      otherwise provided in the applicable Award Agreement, in the event Participant’s
      Continuous Service terminates by reason of such Participant’s Disability, such
      Participant, or his legal representative, may thereafter exercise Participant’s
      Stock Option (to the extent that such Participant was entitled to exercise
      such
      Stock Option as of the Termination Date) but only within such period of time
      ending on the earlier of (i) the first anniversary of such Participant’s
      Termination Date or (ii) the expiration of the Award Term under subsection
      6.2.
      If,
      after termination, such Participant or his legal representative has not
      exercised Participant’s Stock Option within the time specified herein, the Stock
      Option shall terminate and will no longer be exercisable.

     

    (d)  Termination
      For Cause.
      Unless
      otherwise provided in the applicable Award Agreement, in the event Participant’s
      Continuous Service terminates for Cause, all Stock Options held by such
      Participant, whether or not vested, shall immediately terminate and will no
      longer be exercisable.

     

    (e)  Discretion
      of Plan Administrator.
      The
      Plan Administrator shall have the sole discretion, exercisable at any time,
      to
      extend the time during which a Stock Option is to remain exercisable following
      Participant’s Termination Date from the period otherwise in effect for that
      Stock Option and set forth in the Award Agreement to such greater period of
      time
      as the Plan Administrator shall deem appropriate; provided, however, that the
      period in which the Stock Option is exercisable shall not be extended to a
      date
      beyond the later of (i) the 15th
      day of
      the third month following the last date on which Participant would otherwise
      have been entitled to exercise the Stock Option under this subsection
      6.5,
      (ii)
      December 31st
      of the
      calendar year that includes the last date on which Participant would otherwise
      have been entitled to exercise the Stock Option under this subsection
      6.5,
      or
      (iii) thirty (30) days following the date on which the exercise of the Stock
      Option would no longer violate applicable securities laws. If the Plan
      Administrator extends the time during which an Incentive Stock Option will
      remain exercisable, then such extension shall be treated as the grant of a
      new
      Option as of the date of the extension.

     

    (f)  Payment
      In Lieu of Exercise.
      Notwithstanding any provision to the contrary herein, Participant (or, following
      Participant’s Disability or death, his legal representative, estate or heirs, as
      the case may be) may make a written request to the Plan Administrator to receive
      a cash payment in lieu of the issuance of Shares upon exercise of any one or
      more Options. Following receipt of Participant’s written request, the Plan
      Administrator shall determine, in its sole and absolute discretion, whether
      and
      under what conditions such cash payment may be made to Participant. Any cash
      payment made pursuant to this paragraph
      (f)
      shall be
      made in such manner as the Plan Administrator may deem appropriate and shall
      be
      equal to the Fair Market Value of the Shares that would otherwise have been
      issued under the applicable Option(s), less the aggregate Exercise Price and
      less applicable tax withholding. Notwithstanding the foregoing, the Plan
      Administrator shall have no obligation to make any cash payment requested under
      this paragraph
      (f)
      and a
      cash payment made hereunder shall not entitle another Participant to uniform
      treatment. A Participant whose request for a cash payment is denied may exercise
      his Option and receive Shares at the time and in the manner specified in the
      applicable Award Agreement. 

     

    (g)  Lapsed
      and Cancelled Stock Options.
      Nothing
      contained in this Plan will be deemed to extend the term of a Stock Option
      or to
      revive any Stock Option that has previously lapsed or been cancelled, terminated
      or surrendered. 

     

    6.6  Transferability
      of Option.
      

     

    (a)  Rights
      to Transfer.
      A Stock
      Option shall be transferable to the extent provided in the Award Agreement;
      provided, however, that an Incentive Stock Option shall not be transferable
      except by will or by the laws of descent and distribution and shall be
      exercisable during the lifetime of Participant only by Participant. If the
      Award
      Agreement does not provide for transferability, then the Stock Option shall
      not
      be transferable except by will or by the laws of descent and distribution,
      and
      shall be exercisable during the lifetime of Participant only by
      Participant.

     

    (b)  Evidence
      of Rights.
      The
      transferee of a Stock Option shall not be permitted to exercise the Stock Option
      unless and until such transferee has provided the Plan Administrator a copy
      of
      the will and/or such other evidence as the Plan Administrator determines
      necessary to establish the validity of the transfer.

     

    6.7  Qualification
      of Incentive Stock Options. 

     

    (a)  Shareholder
      Approval of Plan.
      To the
      extent shareholder approval of this Plan is required by Section 422 of the
      Code,
      no Eligible Individual shall be granted an Incentive Stock Option unless this
      Plan is approved by the shareholders of the Company within twelve (12) months
      before or after the date this Plan is adopted (or, if applicable, amended
      pursuant to clause (iii) of subsection
      13.1)
      by the
      Board.

     

    (b)  Fair
      Market Value Restrictions.
      To the
      extent that the aggregate Fair Market Value (determined on the Award Date)
      of
      Common Stock with respect to which Incentive Stock Options are exercisable
      for
      the first time by any Participant during any calendar year (under all plans
      of
      the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000),
      the Stock Options or portions thereof that exceed such limit (according to
      the
      order in which they were granted) shall be treated as Non-Qualified Stock
      Options.

     

    (c)  Termination
      of Authority to Issue Incentive Stock Options.
      Notwithstanding any provision of this Plan to the contrary, no Incentive Stock
      Option shall be granted to any Employee after the Expiration Date.

     

    (d)  Qualification
      of Incentive Stock Option.
      To the
      extent that a Stock Option designated as an Incentive Stock Option does not
      qualify as an Incentive Stock Option (whether because of its provisions, the
      failure of the stockholders of the Company to timely approve the Plan, or the
      time or manner of its exercise or otherwise) such Stock Option or the portion
      thereof that does not qualify as an Incentive Stock Option shall be deemed
      to
      constitute a Non-Qualified Stock Option under this Plan.

     

    (e)  Failure
      to Qualify.
      Notwithstanding any provision herein to the contrary, none of the Plan
      Administrator, the Company, any Affiliates, or the directors, officers or
      employees of the foregoing, shall have any liability to any Participant or
      any
      other Person if a Stock Option designated as an Incentive Stock Option fails
      to
      qualify as such at any time. 

     

    SECTION
      7.  RESTRICTED
      SHARES

     

    7.1  Grants
      of Restricted Shares.
      The
      Plan
      Administrator may, in its sole and absolute discretion, grant Restricted Shares,
      whether alone or in addition to other Awards granted pursuant to this Plan,
      to
      any Eligible Individual. Each Eligible Individual granted Restricted Shares
      shall execute an Award Agreement setting forth the terms and conditions of
      such
      Restricted Shares, including, without limitation, the Purchase Price, if any,
      the Restriction Period, and conditions of forfeitability, whether based on
      performance standards, period of service or otherwise. 

     

    7.2  Payment
      for Restricted Shares.
      Upon
      Participant’s acceptance of an applicable Award Agreement for Restricted Shares,
      Participant shall pay to the Company the Purchase Price, if any, for the
      Restricted Shares. Such Purchase Price may be paid in any manner permitted
      under
Section
      9
      herein
      and set forth in the applicable Award Agreement. The Purchase Price, if any,
      shall be determined by the Plan Administrator, in its sole and absolute
      discretion, and set forth in the applicable Award Agreement.

     

    7.3  Terms
      of Restricted Shares.

     

    (a)  Forfeiture
      of Restricted Shares.
      Subject
      to subsection
      7.3(b)
      herein,
      and except as otherwise provided in the applicable Award Agreement, all
      Restricted Shares shall be forfeited and returned to the Company and all rights
      of Participant with respect to such Restricted Shares shall terminate unless
      Participant satisfies the requirements of the Award Agreement, which may include
      requirements for continuation of service, performance, and such other terms
      and
      conditions as the Plan Administrator, in its sole and absolute discretion,
      shall
      determine applicable with respect to the Restricted Shares.

     

    (b)  Waiver
      of Forfeiture Period.
      Notwithstanding anything contained in this Section 7
      to the
      contrary, the Plan Administrator may, in its sole and absolute discretion,
      waive
      the Restriction Period and any other conditions set forth in the applicable
      Award Agreement under appropriate circumstances (which may include the death
      or
      Disability of Participant, or a material change in circumstances arising after
      the Award Date) and impose such terms and conditions (including forfeiture
      of a
      proportionate number of the Restricted Shares) as the Plan Administrator shall
      deem appropriate.

     

    7.4  Transferability
      of Restricted Shares 

     

    (a)  Rights
      to Transfer.
      An
      Award of Restricted Shares shall be transferable to the extent provided in
      the
      Award Agreement. If the Award Agreement does not provide for transferability,
      then the Restricted Shares shall not be transferable except by will or by the
      laws of descent and distribution.

     

    (b)  Evidence
      of Rights.
      The
      transferee of an Award of Restricted Shares shall not be evidenced on the books
      and records of the Company unless and until such transferee has provided the
      Plan Administrator a copy of the will and/or such other evidence as the Plan
      Administrator determines necessary to establish the validity of the
      transfer.

     

    SECTION
      8.  STOCK
      APPRECIATION RIGHTS

     

    8.1  Grant
      of Stock Appreciation Rights.
      The
      Plan
      Administrator may, in its sole and absolute discretion, grant Stock Appreciation
      Rights, whether alone or in addition to other Awards granted pursuant to this
      Plan, to any Eligible Individual; provided, however, that no Stock Appreciation
      Right shall be issued alone, in addition to, or in “tandem” with any other Award
      if such issuance would result in a “deferral of compensation” under Section 409A
      of the Code. Each Eligible Individual so selected shall be offered a Stock
      Appreciation Right to receive cash or Shares with a Fair Market Value equal
      to
      the excess of the Fair Market Value of the aggregate number of Shares subject
      to
      such Stock Appreciation Right on the Exercise Date over the Fair Market Value
      of
      the aggregate number of Shares subject to such Stock Appreciation Right on
      the
      Award Date. The Plan Administrator shall specify in the Award Agreement the
      number of Shares subject to the Award and any conditions and restrictions as
      the
      Plan Administrator shall, in its sole and absolute discretion, determine
      appropriate and which are not inconsistent with the terms of the Plan.


     

    8.2  Award
      Term.
      No
      Stock
      Appreciation Right shall be exercisable after the expiration of the Award Term
      determined by the Plan Administrator and set out in Participant’s Award
      Agreement.

     

    8.3  Exercisability.
      A Stock
      Appreciation Right may only be exercised in the time and manner determined
      by
      the Plan Administrator and set out in the applicable Award Agreement.
      Notwithstanding the foregoing, the Plan Administrator may accelerate the time
      at
      which any outstanding Stock Appreciation Right may be exercised if the Plan
      Administrator determines, in its sole and absolute discretion, that such
      acceleration is not inconsistent with the purposes of this Plan. 

     

    8.4  Time
      and Manner of Exercise.
      Except
      to the extent otherwise provided in the applicable Award Agreement, each Stock
      Appreciation Right may be exercised, in whole or in part, by submitting to
      the
      Plan Administrator an Exercise Agreement in the form prescribed by the Plan
      Administration and duly executed by Participant (or, following Participant’s
      Disability or death, his legal representative, estate or heirs, as the case
      may
      be). The applicable tax withholding shall be paid in full at the time of
      exercise in a manner permitted under Section
      9 herein;
      provided, however, if the benefit is paid in cash, the Company shall, to the
      extent permitted under applicable law, have the right to withhold directly
      from
      such payment an amount equal to the applicable tax withholding obligation.
      Unless otherwise provided in the applicable Award Agreement, in the event
      Participant’s Continuous Service terminates, Participant (or,
      following Participant’s Disability or death, his legal representative, estate or
      heirs, as the case may be)
      may
      thereafter exercise his Stock Appreciation Right (to the extent that Participant
      was entitled to exercise such Stock Appreciation Right as of the Termination
      Date), to the same extent that Participant (or, following Participant’s
      Disability or death, his legal representative, estate or heirs, as the case
      may
      be) would be permitted to exercise a Stock Option following his Termination
      Date
      under subsection
      6.5
      above.

     

    8.5  Transferability.
      

     

    (a)  Rights
      to Transfer.
      A Stock
      Appreciation Right shall be transferable to the extent provided in the Award
      Agreement. If the Award Agreement does not provide for transferability, then
      the
      Stock Appreciation Right shall not be transferable except by will or by the
      laws
      of descent and distribution and shall be exercisable during the lifetime of
      Participant only by Participant. 

     

    (b)  Evidence
      of Rights.
      The
      transferee of a Stock Appreciation Right shall not be permitted to exercise
      the
      Stock Appreciation Right unless and until such transferee has provided the
      Plan
      Administrator a copy of the will and/or such other evidence as the Plan
      Administrator determines necessary to establish the validity of the
      transfer.

     

    8.6  Payment
      of Benefit.
      The
      Stock Appreciation Right may provide that the holder thereof will be paid for
      the value of the Stock Appreciation Right either in cash or in Shares, or a
      combination thereof, as determined in the sole and absolute discretion of the
      Plan Administrator and set forth in the applicable Award Agreement. The value
      of
      any fractional Shares shall be paid in cash.

     

    SECTION
      9.  PAYMENTS
      UNDER AWARDS

     

    9.1  Consideration
      for Shares.
      Except
      as otherwise provided in this Plan, consideration for Shares purchased under
      Awards may be submitted only in such amounts and at such intervals of time
      as
      specified in the applicable Award Agreement:

     

    (a)  by
      payment to the Company of the amount of such consideration by cash, wire
      transfer, certified check or bank draft; 

     

    (b)  upon
      approval of the Plan Administrator, in its sole and absolute
      discretion,

     

    (i)  by
      execution of a promissory note, to be submitted with a stock power, endorsed
      in
      blank relating to the Shares held as collateral for such note; 

     

    (ii)  by
      “cashless exercise”, pursuant to which the Company withholds from the Shares
      that would otherwise be issued upon exercise of an Award that number of Shares
      having a Fair Market Value equal to the Exercise Price for the Award;


     

    (iii)  through
      a
      broker-dealer acting on behalf of Participant if (i) the broker-dealer has
      received a fully and duly endorsed copy of the Award Agreement and a fully
      and
      duly endorsed notice of exercise or purchase, along with written instructions
      signed by Participant requesting that the Company deliver Shares to the
      broker-dealer to be held in a designated account on behalf of Participant;
      (ii)
      adequate provision has been made with respect to the payment of any withholding
      taxes due upon grant, exercise, or vesting; and (iii) the broker-dealer and
      Participant have otherwise complied with applicable securities laws;


     

    (iv)  through
      the delivery of that number of unrestricted Shares having a Fair Market Value
      equal to the Exercise Price for the Award and owned by Participant for more
      than
      six (6) months (or such shorter or longer period of time as is necessary to
      avoid a charge to earnings on the Company’s financial statements); 

     

    (v)  any
      combination of one or more methods described herein; or

     

    (vi)  any
      other
      consideration deemed acceptable by the Plan Administrator, in its sole and
      absolute discretion.

     

    Notwithstanding
      any provision herein to the contrary, Participant shall not be permitted to
      exercise an Incentive Stock Option pursuant to paragraphs (b)(ii) - (vi) above
      unless the Award Agreement specifically permits such method of exercise on
      the
      Award Date.

     

    9.2  Withholding
      Requirements.
      The
      amount, as determined by the Plan Administrator, of any federal, state or local
      tax required to be withheld by the Company due in connection with an Award
      must
      be submitted in such amounts and at such time as specified in the applicable
      Award Agreement: 

     

    (a)  by
      payment to the Company of the amount of such withholding obligation by cash,
      wire transfer, certified check or bank draft; 

     

    (b)upon
      approval of the Plan Administrator, in its sole and absolute
      discretion,

     

    (i)through
      the retention from the Shares that would otherwise be issued upon exercise
      of
      the Award of that number of Shares having a Fair Market Value equal to the
      minimum withholding obligation; or

     

    (ii)through
      the delivery of that number of unrestricted Shares having a Fair Market Value
      equal to the minimum withholding obligation and owned by Participant for more
      than six (6) months (or such shorter or longer period of time as is necessary
      to
      avoid a charge to earnings on the Company’s financial statements);
      or

     

    (c) pursuant
      to a written agreement between Participant and the Company authorizing the
      Company to withhold from such Participant’s regular wages the amount of such
      withholding tax obligation.

     

    If
      Participant elects to use and the Plan Administrator permits either method
      described in subsection
      9.2(b)
      herein
      in full or partial satisfaction of any withholding tax liability hereunder,
      the
      Company shall remit an amount equal to the Fair Market Value of the Shares
      so
      withheld or delivered, as the case may be, to the appropriate taxing
      authorities.

     

    SECTION
      10.  SHAREHOLDER
      RIGHTS

     

    No
      Person
      shall have any rights as a stockholder of the Company with respect to any Shares
      of Common Stock subject to an Award unless and until such Person becomes the
      holder of record of such Shares pursuant to subsection
      4.6
      hereof,
      and except as otherwise permitted by subsection
      12.1,
      no
      adjustment will be made for dividends or other distributions in respect of
      such
      Shares for which the record date is prior to the date on which such Person
      has
      become the holder of record. For these purposes, a Participant who receives
      a
      grant of Restricted Shares shall become a holder of record as of the Award
      Date
      or, if later, the date on which the applicable Purchase Price is paid, and
      shall
      thereafter be entitled to the voting and dividend rights appurtenant to such
      Shares.

     

    SECTION
      11.  COMPLIANCE
      WITH SECURITIES AND OTHER LAWS

     

    11.1  Securities
      Laws.
      Notwithstanding any other provision of this Plan, the Company shall not be
      obligated to sell or issue any Shares pursuant to any Award granted under this
      Plan unless (a) the Shares have been registered under applicable Federal
      securities law, (b) the prior approval of such sale or issuance has been
      obtained from any state regulatory body having jurisdiction to the extent
      necessary to comply with applicable state securities laws, (c) the Shares have
      been duly listed on such exchange in accordance with the procedures specified
      thereunder and (d) with respect to Participants subject to Section 16 of the
      Exchange Act, the Company determines that the Plan, the Award Agreement and
      the
      sale or issuance of Shares thereunder, comply with all applicable provisions
      of
      Rule 16b-3 of the Exchange Act (or any successor provision thereto). The Plan
      Administrator may modify or revoke all or any provision of an Award Agreement
      in
      order to comply with applicable federal and state securities laws and none
      of
      the Company, the Plan Administrator, or any Director, officer, employee, agent
      or representative thereof will have liability to any Person for refusing to
      issue, deliver or transfer any Award or any Share issuable in connection with
      such Award if such refusal is based upon the foregoing provisions of this
subsection
      11.1.
      

     

    11.2  Prohibition
      on Deferred Compensation.
      The
      Awards granted under this Plan are not intended to constitute a “deferral of
      compensation” subject to Section 409A of the Code (or a successor provision
      thereto). Notwithstanding the foregoing, or any provision of this Plan to the
      contrary, any Award issued hereunder that constitutes a deferral of compensation
      under Section 409A of the Code shall be modified or cancelled to comply with
      the
      requirements thereunder (or a successor provision thereto) and applicable
      guidance published in the Internal Revenue Bulletin.

     

    SECTION
      12.  ADJUSTMENTS
      UPON CHANGES IN SHARES

     

    12.1  Capitalization
      Adjustments.
      If any
      change is made in the Common Stock subject to the Plan, or subject to any Award,
      without the receipt of consideration by the Company (through merger,
      consolidation, reorganization, recapitalization, reincorporation, stock
      dividend, dividend in property other than cash, stock split, liquidating
      dividend, combination of Shares, exchange of Shares, change in corporate
      structure or other transaction not involving the receipt of consideration by
      the
      Company), the Plan shall be appropriately adjusted in the class(es) and maximum
      number of Shares available for issuance under the Plan pursuant to subsection
      4.1
      and
      available for issuance to an Eligible Individual pursuant to subsection
      4.2,
      and all
      outstanding Awards shall be appropriately adjusted in the class(es) and number
      of Shares and price per Share of Common Stock subject to such outstanding
      Awards. The Plan Administrator shall make such adjustments, and its
      determination shall be final, binding and conclusive. (The conversion of any
      convertible securities of the Company shall not be treated as a transaction
      “without receipt of consideration” by the Company).

     

    12.2  Change
      in Control.
      In the
      event of a Change in Control, unless the Plan Administrator determines
      otherwise, then with respect to Awards held by Participants whose Continuous
      Service has not terminated: 

     

    (a)  Notice
      and Acceleration.
      (i) The
      Plan Administrator shall provide each Participant written notice of such Change
      in Control, (ii) all outstanding Stock Options and Stock Appreciation Rights
      of
      such Participant shall automatically accelerate and become fully exercisable,
      and (iii) the restrictions and conditions on all outstanding Restricted Stock
      held by such Participant shall immediately lapse.

     

    (b)  Assumption
      of Grants.
      Upon a
      Change in Control where the Company is not the surviving corporation (or
      survives only as a subsidiary of another corporation), unless the Plan
      Administrator determines otherwise, all outstanding Stock Options and Stock
      Appreciation Rights that are not exercised shall be assumed by, or replaced
      with
      comparable options or rights, by the surviving corporation.

     

    (c)  Other
      Alternatives.
      Notwithstanding the foregoing, in the event of a Change in Control, the Plan
      Administrator may take one or both of the following actions: the Plan
      Administrator may (i) require that Participants surrender their outstanding
      Stock Options and Stock Appreciation Rights in exchange for a payment by the
      Company, in cash or Common Stock as determined by the Plan Administrator, in
      an
      amount equal to the amount by which the then Fair Market Value of the shares
      of
      Common Stock subject to the Participant’s unexercised Stock Options and Stock
      Appreciation Rights exceeds the Exercise Price of the Stock Options, or the
      Fair
      Market Value of the Stock Appreciation Rights on the Award Date, as applicable,
      or (ii) after giving Participants an opportunity to exercise their outstanding
      Stock Options and Stock Appreciation Rights, terminate any or all unexercised
      Stock Options and Stock Appreciation Rights at such time as the Plan
      Administrator deems appropriate. Such surrender or termination shall take place
      as of the date of the Change in Control or such other date as the Plan
      Administrator may specify.

     

    12.3  Liquidation.
      Notwithstanding any provision herein to the contrary, upon the liquidation
      or
      dissolution of the Company, all
      then
      outstanding Awards shall terminate immediately prior to such event. 

     

    SECTION
      13.  AMENDMENT
      AND TERMINATION

     

    13.1  Amendment
      of Plan.
      Notwithstanding
      anything contained in this Plan to the contrary, all provisions of this Plan
      may
      at any time, or from time to time, be modified or amended by the Board;
      provided, however, that no amendment or modification shall be made to the Plan
      that would (i) impair the rights of any Participant with respect to an
      outstanding Award issued to such Participant, unless the Participant impaired
      by
      the amendment or modification consents to such change in writing; (ii) expand
      the types of Awards available under the Plan or otherwise materially revise
      the
      Plan; or (iii) increase the number of Shares reserved for issuance under the
      Plan (other than in accordance with an adjustment pursuant to subsection
      12.1
      hereof),
      modify the class of Persons eligible to receive Awards under the Plan, or change
      the identity of the granting company or the Shares issued upon exercise of
      Incentive Stock Options, unless an amendment under (ii) or (iii) above is
      approved by the shareholders of the Company within twelve (12) months before
      or
      after such amendment. In addition, the Plan Administrator shall be authorized,
      to the same extent as the Board, to correct any defect, omission or
      inconsistency in the Plan in a manner and to the extent it shall deem necessary
      or expedient to make the Plan fully effective.

     

    13.2  Amendment
      of Award.
      The
      Plan Administrator may amend, modify or terminate any outstanding Award at
      any
      time prior to payment or exercise in any manner not inconsistent with the terms
      of this Plan; provided, however, that a Participant’s rights under the Award
      shall not be impaired by such amendment unless (i) the Plan Administrator
      requests the consent of such Participant and (ii) Participant consents in
      writing.

     

    13.3  Termination
      of Plan.
      The
      Board may suspend or terminate this Plan at any time, and such suspension or
      termination may be retroactive or prospective; provided that the termination
      of
      this Plan shall not impair or affect any Award previously granted hereunder
      and
      the rights of the holder thereof shall remain in effect until the Award has
      been
      exercised in its entirety or has expired or otherwise has been terminated by
      the
      terms of such Award. Absent any action by the Board to terminate or suspend
      the
      Plan, the Plan shall automatically terminate on the Expiration Date, provided
      that the provisions of this Plan regarding administration shall remain in effect
      until all issued and outstanding Awards have been exercised or otherwise have
      expired pursuant to their terms.

     

    SECTION
      14.  GENERAL
      PROVISIONS

     

    14.1  General
      Assets.
      The
      proceeds to be received by the Company upon payment of the Exercise Price or
      Purchase Price of any Award will constitute general assets of the Company and
      may be used for any proper purposes.

     

    14.2  No
      Assignment or Alienation.
      Any
      attempted assignment, transfer, pledge, hypothecation or other disposition
      of an
      Award or Shares issued in connection with an Award contrary to the provisions
      of
      this Plan, the applicable Award Agreement, or the levy of any execution,
      attachment or similar process upon an Award or Shares issued in connection
      with
      an Award shall be null and void and without effect. 

     

    14.3  No
      Limit on Other Compensation Arrangements. Nothing
      contained in this Plan shall prevent the Company from adopting or continuing
      in
      effect other compensation arrangements, and such arrangements may be either
      generally applicable or applicable only in specific cases.

     

    14.4  Tax
      Withholding.
      The Plan
      Administrator shall notify each Participant of any tax withholding obligations
      arising in connection with an Award. As a condition to Participant’s exercise of
      an Award and, if applicable, the issuance of Shares, Participant must satisfy
      the applicable withholding obligation as may be required by law in a manner
      permitted under Section
      9.2
      hereof.
      

     

    14.5  No
      Right to Employment or Continuation of Relationship. Nothing
      in this Plan or in any Award Agreement, nor the grant of any Award, shall confer
      upon or be construed as giving any Participant any right to remain in the employ
      of the Company or an Affiliate or to continue as a Consultant or non-employee
      Director. Further, the Company or an Affiliate may at any time dismiss a
      Participant from employment or terminate the relationship of any Consultant
      or
      non-employee Director with the Company or any Affiliate, free from any liability
      or any claim pursuant to this Plan, unless otherwise expressly provided in
      this
      Plan or in any Award Agreement. No Employee, Consultant or Director of the
      Company or any Affiliate shall have any claim to be granted an Award, and there
      is no obligation for uniformity of treatment of any Employee, Consultant or
      Director of the Company or any Affiliate, or of any Participant.

     

    14.6  Indemnification
      of Plan Administrator.
      The
      Company shall indemnify each present and future member of the Committee or the
      Board acting in its capacity as Plan Administrator, as well as any officer
      or
      Employee acting at the direction of the Plan Administrator or its authorized
      delegate, for all expenses (including the amount of judgments and the amount
      of
      approved settlements made with a view to the curtailment of costs of litigation,
      other than amounts paid to the Company itself) reasonably incurred by him in
      connection with or arising out of any action, suit, or proceeding in which
      he
      may be involved by reason of his performance of services in connection with
      the
      administration of this Plan, whether or not he continues to perform such
      services at the time of incurring such expenses; provided, however, that such
      indemnity shall not include any expenses incurred by such individual (a) in
      respect of matters as to which he shall be finally adjudged in any such action,
      suit, or proceeding to have been guilty of gross negligence or willful
      misconduct in the performance of his duties hereunder or (b) in respect of
      any
      matter in which any settlement is effected in an amount in excess of the amount
      approved by the Company on the advice of its legal counsel. The foregoing right
      of indemnification shall inure to the benefit of the heirs, executors, or
      administrators of an estate of each such member of the Committee and the Board,
      as well as any employee acting at the direction of the Plan Administrator or
      its
      authorized delegate, and shall be in addition to all other rights to which
      such
      member, officer or employee shall be entitled as a matter of law, contract,
      or
      otherwise.

     

    14.7  No
      Limitation Upon the Rights of the Company.
      The
      grant
      of an Award pursuant to this Plan shall not affect in any way the right or
      power
      of the Company to make adjustments, reclassifications, or changes of its capital
      or business structure; to merge, convert or consolidate; to dissolve or
      liquidate; or sell or transfer all or any part of its business or
      assets.

     

    14.8  No
      Fractional Shares. No
      fractional Shares shall be issued or delivered pursuant to this Plan. If an
      Award vests or becomes exercisable with respect to a fractional Share, such
      installment will instead be rounded to the next highest whole number of Shares,
      except for the final installment, which will be for the balance of the total
      Shares subject to the Award. If a fractional Share is granted under an Award,
      the Plan Administrator shall pay cash to Participant in an amount equal to
      the
      proportional Fair Market Value of such fractional Share in lieu of any such
      fractional Share, and any
      rights with respect to such fractional Share shall
      be
      cancelled, terminated and otherwise eliminated.

     

    14.9  GOVERNING
      LAW. TO
      THE
      EXTENT NOT OTHERWISE PREEMPTED BY FEDERAL LAW, THE VALIDITY, CONSTRUCTION AND
      EFFECT OF THIS PLAN AND ANY RULES AND REGULATIONS RELATING TO THIS PLAN SHALL
      BE
      DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA, WITHOUT GIVING
      EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

     

    14.10  Qualification
      of Plan.
      This
      Plan is not intended to be, and shall not be, qualified under Section 401(a)
      of
      the Code.

     

    14.11  Compliance
      within Jurisdiction.
      Notwithstanding any provision herein to the contrary, this Plan shall not be
      effective in any jurisdiction, and no Awards shall be granted to residents
      thereof, unless the Plan has been properly qualified under the applicable
      securities laws, if any, of such jurisdiction. 

     

    14.12  Severability.
      If any
      provision of this Plan or any Award is, or becomes, or is deemed to be, invalid,
      illegal or unenforceable in any jurisdiction or as to any individual or Award,
      or would cause this Plan or any Award to fail to comply under any law deemed
      applicable by the Plan Administrator, such provision shall be construed or
      deemed amended to conform to applicable law, or if it cannot be construed or
      deemed amended without, in the sole determination of the Plan Administrator,
      materially altering the intent of this Plan or the Award, such provision shall
      be stricken as to such jurisdiction, individual or Award and the remainder
      of
      this Plan and any such Award shall remain in full force and effect.

     

    14.13  Headings.
      Headings
      are given throughout this Plan solely as a convenience to facilitate reference.
      Such headings shall not be deemed in any way material or relevant to the
      construction or interpretation of this Plan or any provision
      thereof.

     

    14.14  Gender
      and Number.
      In
      construing the Plan, any masculine terminology herein shall also include the
      feminine, and the definition of any term herein in the singular shall also
      include the plural, except when otherwise indicated by the context.