EXHIBIT
      10.4


    

       


      SpatiaLight,
        Inc.

       

      2006
        Incentive Plan

       

      Adopted
        by the Board of Directors as of 

      May
        3,
        2006

       



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Contents

       

        
          

        

      

       

      
        	
                Article
                  1

              	
                Establishment,
                  Purpose, and Duration

              	
                1

              
	 	 	 
	
                Article
                  2

              	
                Definitions

              	
                1

              
	 	 	 
	
                Article
                  3

              	
                Administration

              	
                5

              
	 	 	 
	
                Article
                  4

              	
                Shares
                  Subject to the Plan and Maximum Awards

              	
                6

              
	 	 	 
	
                Article
                  5

              	
                Eligibility
                  and Participation

              	
                8

              
	 	 	 
	
                Article
                  6

              	
                Options

              	
                8

              
	 	 	 
	
                Article
                  7

              	
                Share
                  Appreciation Rights

              	
                10

              
	 	 	 
	
                Article
                  8

              	
                Restricted
                  Shares and Restricted Share Units

              	
                12

              
	 	 	 
	
                Article
                  9

              	
                Performance
                  Units/Performance Shares

              	
                14

              
	 	 	 
	
                Article
                  10

              	
                Other
                  Share-Based Awards

              	
                15

              
	 	 	 
	
                Article
                  11

              	
                Performance
                  Measures

              	
                16

              
	 	 	 
	
                Article
                  12

              	
                Nonemployee
                  Director Awards

              	
                18

              
	 	 	 
	
                Article
                  13

              	
                Dividend
                  Equivalents

              	
                19

              
	 	 	 
	
                Article
                  14

              	
                Beneficiary
                  Designation

              	
                19

              
	 	 	 
	
                Article
                  15

              	
                Rights
                  of Participants

              	
                19

              
	 	 	 
	
                Article
                  16

              	
                Change
                  of Control

              	
                19

              
	 	 	 
	
                Article
                  17

              	
                Amendment,
                  Modification, Suspension, and Termination

              	
                20

              
	 	 	 
	
                Article
                  18

              	
                Withholding

              	
                20

              
	 	 	 
	
                Article
                  19

              	
                Successors

              	
                21

              
	 	 	 
	
                Article
                  20

              	
                General
                  Provisions

              	
                21

              


      

      

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

      

       

      SpatiaLight,
        Inc.

      2006
        Incentive Plan

      


      
        	
                ARTICLE
                  1

              	
                ESTABLISHMENT,
                  PURPOSE, AND DURATION 

              


      

       

      1.1           Establishment.
        SpatiaLight, Inc., a New York corporation (the “Company”), establishes an
        incentive compensation plan to be known as the 2006 Incentive Plan (the “Plan”),
        as set forth in this document. 

       

      The
        Plan
        permits the grant of Nonqualified Options,
        Incentive
        Options, Share
        Appreciation Rights (SARs), Restricted Shares, Restricted Share Units,
        Performance Shares, Performance Units, and Other Share-Based Awards.


       

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

       

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

       

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

       

      ARTICLE
        2 DEFINITIONS

       

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

       

      2.1           “Affiliate”
shall
        have the meaning ascribed to such term in Rule 12b-2 of the General Rules
        and Regulations of the Exchange Act.

       

      2.2           “Annual
        Award Limit”
or
        “Annual
        Award Limits”
have
        the meaning set forth in Section 4.3.

       


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      


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

       

      2.4           “Award
        Agreement”
means
        either (i) a written agreement entered into by the Company and a Participant
        setting forth the terms and provisions applicable to an Award granted under
        this
        Plan, or (ii) a written statement issued by the Company to a Participant
        describing the terms and provisions of such Award.

       

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

       

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

       

      2.7           “Code”
means
        the U.S. Internal Revenue Code of 1986, as amended from time to
        time.

       

      2.8           “Committee”
means
        the committee designated by the Board to administer this Plan. The members
        of
        the Committee shall be appointed from time to time by and shall serve at
        the
        discretion of the Board and, unless otherwise determined by the Board, the
        Committee shall consist of no fewer than two directors, each of whom is (i)
        a
“Non-Employee Director” within the meaning of Rule 16b-3 (or any successor rule)
        of the Exchange Act, (ii) an “outside director” within the meaning of Section
        162(m) of the Code, and (iii) an “independent director” for purposes of the
        rules and regulations of the Nasdaq Stock Market, Inc. (“NASDAQ”).
        

       

      2.9           “Company”
means
        SpatiaLight, Inc., a New York corporation, and any successor thereto as provided
        in Article 20 herein. 

       

      2.10           “Covered
        Employee”
means
        a
        Participant who is a “covered employee,” as defined in Code Section 162(m) and
        the Treasury Regulations promulgated under Code Section 162(m), or any successor
        statute.

       

      2.11           “Director” means
        any
        individual who is a member of the Board of Directors of the
        Company.

       

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

       

      2.13           “Employee”
means
        any employee of the Company, its Affiliates, and/or its
        Subsidiaries.

       

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

       


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


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

       

      2.16           “Full
        Value Award” means
        an
        Award other than in the form of an ISO, NQSO, or SAR, and which is settled
        by
        the issuance of Shares.

       

      2.17           “Freestanding
        SAR”
means
        an SAR that is granted independently of any Options, as described in Article
        7.

       

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

       

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

       

      2.20           “Insider”
shall
        mean an individual who is, on the relevant date, an officer or Director of
        the
        Company, or a more than ten percent (10%) Beneficial Owner of any class of
        the Company’s equity securities that is registered pursuant to Section 12
        of the Exchange Act, as determined by the Board in accordance with
        Section 16 of the Exchange Act.

       

      2.21           “Nonemployee
        Director”
means
        a
        Director who is not an Employee.

       

      2.22           “Nonemployee
        Director Award” means
        any
        NQSO, SAR, or Full Value Award granted, whether singly, in combination, or
        in
        tandem, to a Participant who is a Nonemployee Director pursuant to such
        applicable terms, conditions, and limitations as the Board or Committee may
        establish in accordance with this Plan.

       

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

       

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

       

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

       

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

       


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


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

       

      2.28           “Performance-Based
        Compensation”
means
        compensation under an Award that satisfies the requirements of Section 162(m)
        of
        the Code and the applicable Treasury Regulations thereunder for certain
        performance-based compensation paid to Covered Employees.

       

      2.29           “Performance
        Measures”
means
        (i) those measures described in Section 11.3 hereof on which the performance
        goals are based, or (ii) such other measures that have been approved by the
        Company’s shareholders as contemplated by Article 11 of this Plan in order to
        qualify Awards as Performance-Based Compensation.

       

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

       

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

       

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

       

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

       

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

       

      2.35           “Plan”
means
        this 2006 Incentive Plan, as it may hereinafter be amended or
        restated.

       

      2.36           “Plan
        Year” means
        the
        Company’s fiscal year as may be in effect from time to time. The Company’s
        current fiscal year is the twelve month period beginning on January
        1st
        of a
        particular year and ending on December 31st
        of such
        year. 

       

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

       

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

       


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      2.39           “Share”
or
        “Shares”
means
        the Company’s common shares, par value $.01 per share. 

       

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

       

      2.41           “Subsidiary”
means
        any corporation, partnership, limited liability company, trust or other entity,
        whether domestic or foreign, in which the Company has or obtains, directly
        or
        indirectly, a proprietary interest. 

       

      2.42           “Tandem
        SAR”
means
        an SAR that is granted in connection with a related Option pursuant to Article
        7
        herein, the exercise of which shall require forfeiture of the right to purchase
        a Share under the related Option (and when a Share is purchased under the
        Option, the Tandem SAR shall similarly be canceled). 

       

      2.43           “Third
        Party Service Provider” means
        any
        consultant, agent, advisor, or independent contractor who renders services
        to
        the Company, a Subsidiary, or an Affiliate that (a) are not in connection
        with
        the offer and sale of the Company’s securities in a capital raising transaction,
        and (b) do not directly or indirectly promote or maintain a market for the
        Company’s securities.

       

      2.44           “Treasury
        Regulations”
means
        the regulations promulgated under the Code. 

       

      2.45           “Withholding
        Taxes” means
        any
        federal, state, local or foreign income taxes, withholding taxes, or employment
        taxes required to be withheld by law or regulations.

       

      
        	
                ARTICLE
                  3

              	
                ADMINISTRATION

              


      

       

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

       

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

       


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      3.3           Delegation. The
        Committee may delegate to one or more of its members or to one or more officers
        of the Company, and/or its Subsidiaries and Affiliates or to one or more
        agents
        or advisors such administrative duties or powers as it may deem advisable,
        and
        the Committee or any individual to whom it has delegated duties or powers
        as
        aforesaid may employ one or more individuals to render advice with respect
        to
        any responsibility the Committee or such individual may have under the Plan.
        The
        Committee may, by resolution, authorize one or more officers of the Company
        to
        do one or more of the following on the same basis as can the Committee: (a)
        designate Employees to be recipients of Awards; (b) designate Third Party
        Service Providers to be recipients of Awards; and (c) determine
        the size of any such Awards; provided, however, (i) the Committee shall not
        delegate such responsibilities to any such officer for Awards granted to
        an
        Employee that is considered an Insider; (ii) the resolution providing such
        authorization sets forth the total number of Awards such officer(s) may grant;
        and (iii) the officer(s) shall report periodically to the Committee regarding
        the nature and scope of the Awards granted pursuant to the authority delegated.
        Notwithstanding the foregoing, the Committee may not delegate to any officer
        the
        ability to take any action or make any determination regarding issues arising
        out of Code Section 162(m). 

       

      
        	
                ARTICLE
                  4

              	
                SHARES
                  SUBJECT TO THE PLAN AND MAXIMUM
                  AWARDS

              


      

       

      4.1           Number
        of Shares Available for Awards.
        Subject
        to adjustment as provided in Section 4.4 herein, the maximum number of Shares
        available for issuance to Participants under the Plan (the "Share
        Authorization") shall be equal to 5,000,000 Shares. Any Shares that are subject
        to Awards other then Options or Share Appreciation Rights shall be
        counted against this limit as two Shares for every Share awarded
        pursuant to such Awards.

       

      4.2           Share
        Usage.
        Shares
        covered by an Award shall only be counted as used to the extent they are
        actually issued. Any Shares related to Awards which terminate by expiration,
        forfeiture, cancellation, or otherwise without the issuance of such Shares,
        are
        settled in cash in lieu of Shares, or are exchanged with the Committee’s
        permission, prior to the issuance of Shares, for Awards not involving Shares,
        shall be available again for grant under the Plan. The Shares available for
        issuance under the Plan may be authorized and unissued Shares or treasury
        Shares. 

       

      4.3           Annual
        Award Limits.
        Unless
        and until the Committee determines that an Award to a Covered Employee shall
        not
        be designed to qualify as Performance-Based Compensation, the following limits
        (each an “Annual Award Limit” and, collectively, “Annual
        Award Limits”)
        shall
        apply to grants of such Awards under the Plan: 

       

      (a)           Options:
        The
        maximum aggregate number of Shares subject to Options granted in any one
        Plan
        Year to any one Participant shall be 750,000
        Shares.

       

      (b)           SARs:
        The
        maximum number of Shares subject to Share Appreciation Rights granted in
        any one
        Plan Year to any one Participant shall be 750,000 Shares.

       


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      (c)           Restricted
        Shares or Restricted Share Units:
        The
        maximum aggregate grant with respect to Awards of Restricted Shares and/or
        Restricted Share Units in any one Plan Year to any one Participant shall
        be
        750,000.

       

      (d)           Performance
        Units or Performance Shares:
        The
        maximum aggregate Award of Performance Units and/or Performance Shares that
        any
        one Participant may receive in any one Plan Year shall be 750,000 Shares
        (if
        such Award is payable in Shares), or equal to the value of 750,000 Shares.
        For
        this purpose, to the extent an Award is payable in cash or property other
        than
        Shares, then such Award shall be treated as payable in such number of Shares
        having a value equal to the value of the cash or property (other than Shares)
        payable under such Award, determined as of the earlier of the date of vesting
        or
        payout.

       

      (e)           Other
        Share-Based Awards:
        The
        maximum aggregate grant with respect to Other Share-Based Awards pursuant
        to
        Section 10.2 in any one Plan Year to any one Participant shall be 750,000
        Shares.

       

      The
        above
        Annual Award Limits are intended to comply with Code Section 162(m) and the
        Treasury Regulations thereunder, and shall be applied and/or construed in
        such a
        way to ensure compliance with Code Section 162(m) and the Treasury Regulations
        thereunder. 

       

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

       

      The
        Committee, in its sole discretion, may also make appropriate adjustments
        in the
        terms of any Awards under the Plan to reflect or related to such changes
        or
        distributions and to modify any other terms of outstanding Awards, including
        modifications of performance goals and changes in the length of Performance
        Periods. The determination of the Committee as to the foregoing adjustments,
        if
        any, shall be conclusive and binding on Participants under the Plan.


       

      Subject
        to the provisions of Article 17, without affecting the number of Shares reserved
        or available hereunder, the Committee may authorize the issuance or assumption
        of benefits under this Plan in connection with any merger, consolidation,
        spin-off, split-off, split-up, acquisition of property or stock, or
        reorganization (collectively, a “Reorganization”) upon such terms and conditions
        as it may deem appropriate, subject to compliance with the ISO rules under
        Section 422 of the Code and the provisions of Section 409A of the Code, where
        applicable. Without limiting the foregoing, in the event of any Reorganization,
        the Committee or the Board may cause any Award outstanding as of the effective
        date of the Reorganization to be cancelled in consideration of a cash payment
        or
        alternate Award made to the holder of such cancelled Award equal in value
        to the
        fair market value of such cancelled Award; provided,
        however,
        that
        nothing in this Section 4.4 shall permit the repricing, replacing or regranting
        of Options or SARs in violation of Section 17.1 or the provisions of Section
        409A of the Code. 

       

       


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      
        	
                ARTICLE
                  5

              	
                ELIGIBILITY
                  AND PARTICIPATION

              


      

       

      5.1           Eligibility.
        Individuals eligible to participate in this Plan include all key Employees,
        Directors, and Third Party Service Providers.

       

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

       

      
        	
                ARTICLE
                  6

              	
                OPTIONS

              


      

       

      6.1           Grant
        of Options.
        Subject
        to the terms and provisions of the Plan, Options may be granted to Participants
        in such number, and upon such terms, and at any time and from time to time
        as shall be determined by the Committee, in its sole discretion; provided
        that ISOs may be granted only to eligible Employees of the Company or of
        any
        parent or subsidiary corporation (as permitted by Section 422 of the Code
        and
        the Treasury Regulations thereunder).

       

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

       

      6.3           Option
        Price.
        The
        Option Price for each grant of an Option under this Plan shall be as determined
        by the Committee and shall be specified in the Award Agreement. The Option
        Price
        shall be: (i) based on 100% of the FMV of the Shares on the date of grant
        or
        (ii) set at a premium to the FMV of the Shares on the date of
        grant.

       

      6.4           Duration
        of Options.
        Each
        Option granted to a Participant shall expire at such time as the Committee
        shall
        determine at the time of grant; provided, however, no Option intended to
        qualify
        as an ISO shall be exercisable later than the tenth anniversary date of
        its grant. 

       

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

       


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


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

       

      A
        condition of the issuance of the Shares as to which an Option shall be exercised
        shall be the payment of the Option Price. The Option Price of any Option
        shall
        be payable to the Company in full either: (a) in cash or its equivalent;
        (b) by tendering (either by actual delivery or attestation) previously acquired
        Shares having an aggregate Fair Market Value at the time of exercise equal
        to
        the Option Price (provided that except as otherwise determined by the Committee,
        the Shares that are tendered must have been held by the Participant for at
        least
        six months prior to their tender to satisfy the Option Price or have been
        purchased on the open market); (c) by a combination of (a) and (b); or (d)
        any other method approved or accepted by the Committee in its sole discretion,
        including, without limitation, if the Committee so determines, (i) a cashless
        (broker-assisted) exercise or (ii) by “net settlement,” pursuant to which an
        Option is exercised and the Option Price due on such exercise is paid by
        surrendering a portion of the Shares which would otherwise be issued upon
        such
        exercise and which have an aggregate Fair Market Value at the time of exercise
        equal to the Option Price.

       

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

       

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

       

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

       

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

       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      6.9           Transferability
        of Options.

       

      (a)           Incentive
        Options.
        No ISO
        granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
        alienated or hypothecated, other than by will or by the laws of descent and
        distribution. Further, all ISOs granted to a Participant under this Article
        6
        shall be exercisable during his lifetime only by such Participant.

       

      (b)           Nonqualified
        Options.
        Except
        as otherwise provided in a Participant’s Award Agreement or otherwise determined
        at any time by the Committee, no NQSO granted under this Article 6 may be
        sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
        other than by will or by the laws of descent and distribution; provided that
        the
        Board or Committee may permit further transferability, on a general or a
        specific basis, and may impose conditions and limitations on any permitted
        transferability. Further, except as otherwise provided in a Participant’s Award
        Agreement or otherwise determined at any time by the Committee, or unless
        the
        Board or Committee decides to permit further transferability, all NQSOs granted
        to a Participant under this Article 6 shall be exercisable during his lifetime
        only by such Participant. With respect to those NQSOs, if any, that are
        permitted to be transferred to another individual, references in the Plan
        to
        exercise or payment of the Option Price by the Participant shall be deemed
        to
        include, as determined by the Committee, the Participant’s permitted
        transferee.

       

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

       

      6.11           Special
        ISO Rules for 10% Shareholders.
        If any
        Participant to whom an ISO is to be granted is, on the date of grant, the
        owner
        of Shares (determined using applicable attribution rules) possessing more
        than
        10% of the total combined voting power of all classes of equity securities
        of
        his or her employer (or of its parent or subsidiary), then the following
        special
        provisions will apply to the ISO granted to that Participant: 

       

      (a)           The
        Option Price per Share of the ISO will not be less than 110% of the Fair
        Market
        Value of the Shares underlying such ISO on the date of grant; and

       

      (b)           The
        ISO
        will not have a term in excess of 5 years from the date of grant. 

       

      
        	
                ARTICLE
                  7

              	
                SHARE
                  APPRECIATION RIGHTS

              


      

       

      7.1           Grant
        of SARs.
        Subject
        to the terms and conditions of the Plan, SARs may be granted to Participants
        at
        any time and from time to time as shall be determined by the Committee. The
        Committee may grant Freestanding SARs, Tandem SARs, or any combination of
        these
        forms of SARs. 

       


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


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

       

      The
        Grant
        Price for each grant of a Freestanding SAR shall be determined by the Committee
        and shall be specified in the Award Agreement. The Grant Price shall be:
        (i)
        based on 100% of the FMV of the Shares on the date of grant or (ii) set at
        a
        premium to the FMV of the Shares on the date of grant 

       

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

       

      7.3           Term
        of SAR.
        The
        term of an SAR granted under the Plan shall be determined by the Committee,
        in
        its sole discretion, and except as determined otherwise by the Committee
        and
        specified in the SAR Award Agreement, no SAR shall be exercisable later than
        the
        tenth anniversary date of its grant. 

       

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

       

      7.5           Exercise
        of Tandem SARs.
        Tandem
        SARs may be exercised for all or part of the Shares subject to the related
        Option upon the surrender of the right to exercise the equivalent portion
        of the
        related Option. A Tandem SAR may be exercised only with respect to the Shares
        for which its related Option is then exercisable.

       

      Notwithstanding
        any other provision of this Plan to the contrary, with respect to a Tandem
        SAR
        granted in connection with an ISO: (a) the Tandem SAR will expire no later
        than
        the expiration of the underlying ISO; (b) the exercise of the Tandem SAR
        may not
        have economic and tax consequences more favorable than the exercise of the
        ISO
        followed by an immediate sale of the underlying Shares, and the value of
        the
        payout with respect to the Tandem SAR may be for no more than  100% of the
        excess of the Fair Market Value of the Shares subject to the underlying ISO
        at
        the time the Tandem SAR is exercised over the Option Price of the underlying
        ISO; (c) the Tandem SAR may be exercised only when the Fair Market Value
        of the
        Shares subject to the ISO exceeds the Option Price of the ISO; (d) the Tandem
        SAR may be exercised only when the underlying ISO is eligible to be exercised;
        and (e) the Tandem SAR is transferable only when the underlying ISO is
        transferable, and under the same conditions. 

       

      7.6           Payment
        of SAR Amount.
        Upon
        the exercise of an SAR, a Participant shall be entitled to receive from the
        Company such number of Shares determined by multiplying:

       

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

       

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

       


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      Such
        product shall then be divided by the Fair Market Value of a Share on the
        date of
        exercise. The resulting number (rounded down to the next whole number) is
        the
        number of Shares to be issued to the Participant upon exercise of an SAR.
        

       

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

       

      7.8           Nontransferability
        of SARs.
        Except
        as otherwise provided in a Participant’s Award Agreement or otherwise determined
        at any time by the Committee, no SAR granted under the Plan may be sold,
        transferred, pledged, assigned, or otherwise alienated or hypothecated, other
        than by will or by the laws of descent and distribution. Further, except
        as
        otherwise provided in a Participant’s Award Agreement or otherwise determined at
        any time by the Committee, all SARs granted to a Participant under the Plan
        shall be exercisable during his lifetime only by such Participant. With respect
        to those SARs, if any, that are permitted to be transferred to another
        individual, references in the Plan to exercise of the SAR by the Participant
        or
        payment of any amount to the Participant shall be deemed to include, as
        determined by the Committee, the Participant’s permitted
        transferee.

       

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

       

      
        	
                ARTICLE
                  8

              	
                RESTRICTED
                  SHARES AND RESTRICTED SHARE
                  UNITS

              


      

       

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

       

      8.2           Restricted
        Shares or Restricted Share Unit Agreement.
        Each
        Restricted Share and/or Restricted Share Unit grant shall be evidenced by
        an
        Award Agreement that shall specify the Period(s) of Restriction, the number
        of
        Restricted Shares or the number of Restricted Share Units granted, and such
        other provisions as the Committee shall determine. Notwithstanding anything
        in
        this Article 8 to the contrary, delivery of Shares pursuant to an Award of
        Restricted Share Units (or an Award of Restricted Shares) shall be made no
        later
        than 2-1/2 months after the close of the Company’s first taxable year in which
        such Shares are no longer subject to a risk of forfeiture (within the meaning
        of
        Section 409A of the Code). 

       


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      8.3           Transferability.
        Except
        as provided in this Plan or an Award Agreement, the Restricted Shares and/or
        Restricted Share Units granted herein may not be sold, transferred, pledged,
        assigned, or otherwise alienated or hypothecated until the end of the applicable
        Period of Restriction established by the Committee and specified in the Award
        Agreement (and in the case of Restricted Share Units until the date of delivery
        or other payment), or upon earlier satisfaction of any other conditions,
        as
        specified by the Committee, in its sole discretion, and set forth in the
        Award
        Agreement or otherwise at any time by the Committee. All rights with respect
        to
        the Restricted Shares and/or Restricted Share Units granted to a Participant
        under the Plan shall be available during his lifetime only to such Participant,
        except as otherwise provided in an Award Agreement or at any time by the
        Committee. 

       

      8.4           Other
        Restrictions.
        The
        Committee shall impose such other conditions and/or restrictions on any
        Restricted Shares or Restricted Share Units granted pursuant to the Plan
        as it
        may deem advisable including, without limitation, a requirement that
        Participants pay a stipulated purchase price for each Restricted Share or
        each
        Restricted Share Unit, restrictions based upon the achievement of specific
        performance goals, time-based restrictions on vesting following the attainment
        of the performance goals, time-based restrictions, and/or restrictions under
        applicable laws or under the requirements of any stock exchange or market
        upon
        which such Shares are listed or traded, or holding requirements or sale
        restrictions placed on the Shares by the Company upon vesting of such Restricted
        Share or Restricted Share Units.

       

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

       

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

       

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

       

      “The
        sale
        or transfer of Shares of stock represented by this certificate, whether
        voluntary, involuntary, or by operation of law, is subject to certain
        restrictions on transfer as set forth in the SpatiaLight, Inc. 2006 Incentive
        Plan, and in the associated Award Agreement. A copy of the Plan and such
        Award
        Agreement may be obtained from SpatiaLight, Inc.” 

       

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

       


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      


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

       

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

       

      
        	
                ARTICLE
                  9

              	
                PERFORMANCE
                  UNITS/PERFORMANCE SHARES

              


      

       

      9.1           Grant
        of Performance Units/Performance Shares.
        Subject
        to the terms and provisions of the Plan, the Committee, at any time and
        from time to time, may grant Performance Units and/or Performance Shares
        to
        Participants in such amounts and upon such terms as the Committee shall
        determine.

       

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

       

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

       

      9.4           Form
        and Timing of Payment of Performance Units/Performance Shares.
        Payment
        of earned Performance Units/Performance Shares shall be as determined by
        the
        Committee and as evidenced in the Award Agreement. Subject
        to the terms of the Plan, the Committee, in its sole discretion, may
        pay earned Performance Units/Performance Shares in the form of cash or in
        Shares (or in a combination thereof) equal to the value of the earned
        Performance Units/Performance Shares at the close of the applicable Performance
        Period, or as soon as practicable after the end of the Performance Period.
        Any
        Shares may be granted subject to any restrictions deemed appropriate by the
        Committee. The determination of the Committee with respect to the form of
        payout
        of such Awards shall be set forth in the Award Agreement pertaining to the
        grant
        of the Award. Notwithstanding anything in this Article 9 to the contrary,
        delivery of Shares, cash or other property pursuant to an Award of Performance
        Units/Performance Shares shall be made no later than 2-1/2 months after the
        close of the Company’s first taxable year in which delivery of such Shares, cash
        or other property is no longer subject to a risk of forfeiture (within the
        meaning of Section 409A of the Code). 

       


      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      


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

       

      9.6           Nontransferability.
        Except
        as otherwise provided in a Participant’s Award Agreement or otherwise determined
        at any time by the Committee, Performance Units/Performance Shares may not
        be
        sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
        other than by will or by the laws of descent and distribution. Further, except
        as otherwise provided in a Participant’s Award Agreement or otherwise determined
        at any time by the Committee, a Participant’s rights under the Plan shall be
        exercisable during his lifetime only by such Participant.

       

      
        	
                ARTICLE
                  10

              	
                OTHER
                  SHARE-BASED AWARDS

              


      

       

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

       

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

       

      10.3           Payment
        of Other Share-Based Awards.
        Payment, if any, with respect to an Other Share-Based Award shall be made
        in
        accordance with the terms of the Award, in cash or Shares as the Committee
        determines. Notwithstanding anything in this Article 10 to the contrary,
        delivery of Shares, cash or other property pursuant to an Other Share-Based
        Award shall be made no later than 2-1/2 months after the close of the Company’s
        first taxable year in which delivery of such Shares, cash or other property
        is
        no longer subject to a risk of forfeiture (within the meaning of Section
        409A of
        the Code). 

       


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      


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

       

      10.5           Nontransferability.
        Except
        as otherwise determined by the Committee, Other Share-Based Awards may not
        be
        sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
        other than by will or by the laws of descent and distribution. Further, except
        as otherwise provided by the Committee, a Participant’s rights under the Plan,
        if exercisable, shall be exercisable during his lifetime only by such
        Participant. With respect to those Other Share-Based Awards, if any, that
        are
        permitted to be transferred to another individual, references in the Plan
        to
        exercise or payment of such Awards by or to the Participant shall be deemed
        to
        include, as determined by the Committee, the Participant’s permitted
        transferee.

       

      
        	
                ARTICLE
                  11

              	
                PERFORMANCE
                  MEASURES

              


      

       

      11.1           General.

       

      (a)           Certain
        Awards granted under the Plan may be granted in a manner such that the Awards
        qualify as Performance-Based Compensation and thus are exempt from the deduction
        limitation imposed by Section 162(m) of the Code. Awards shall only qualify
        as
        Performance-Based Compensation if, among other things, at the time of grant
        the
        Committee is comprised solely of two or more “outside directors” (as such term
        is used in Section 162(m) of the Code and the Treasury Regulations
        thereunder).

       

      (b)           Awards
        intended to qualify as Performance-Based Compensation may be granted to
        Participants who are or may be Covered Employees at any time and from time
        to
        time, as shall be determined by the Committee. The Committee shall have complete
        discretion in determining the number, amount and timing of awards granted
        to
        each Covered Employee. 

       

      (c)           The
        Committee shall set performance goals at its discretion which, depending
        on the
        extent to which they are met, will determine the number and/or value of Awards
        intended to qualify as Performance-Based Compensation that will be paid out
        to
        the Covered Employees, and may attach to such Performance-Based Compensation
        one
        or more restrictions. 

       


      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      


      11.2           Other
        Awards.
        Either
        the granting or vesting of Awards intended to qualify as Performance-Based
        Compensation (other than Options and SARs) granted under the Plan shall be
        subject to the achievement of a performance target or targets, as determined
        by
        the Committee in its sole discretion, based on one or more of the performance
        measures specified in Section 11.3 below. With respect to such Performance-Based
        Compensation: 

       

      (a)           the
        Committee shall establish in writing (x) the objective performance-based
        goals
        applicable to a given period and (y) the individual Covered Employees or
        class
        of Covered Employees to which such performance-based goals apply no later
        than
        90 days after the commencement of such period (but in no event after
        25 percent of such period has elapsed);

       

      (b)           no
        Performance-Based Compensation shall be payable to or vest with respect to,
        as
        the case may be, any Covered Employee for a given period until the Committee
        certifies in writing that the objective performance goals (and any other
        material terms) applicable to such period have been satisfied; and

       

      (c)           after
        the establishment of a performance goal, the Committee shall not revise such
        performance goal or increase the amount of compensation payable thereunder
        (as
        determined in accordance with Section 162(m) of the Code) upon the attainment
        of
        such performance goal.

       

      11.3           Performance
        Measures.
        Unless
        and until the Committee proposes for shareholder vote and the shareholders
        approve a change in the general Performance Measures set forth in this Article
        11, the performance goals upon which the payment or vesting of an Award to
        a
        Covered Employee that is intended to qualify as Performance-Based Compensation
        shall be limited to the following Performance Measures:

       

      (a)           Net
        earnings or net income (before or after taxes);

       

      (b)           Earnings
        per share;

       

      (c)           Net
        sales growth;

       

      (d)           Net
        operating profit;

       

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

       

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

       

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

       

      (h)           Gross
        or operating margins;

       

      (i)     
              Productivity ratios;

       


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      


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

      

        (k)          The
          consummation of one or more business acquisitions, combinations or similar
          transactions by or with the Company, its Subsidiaries or Affiliates;
          and

         

        (l)           The
          consummation of one or more financings (whether through borrowings, securities
          issuances or similar transactions) by or with the Company, its Subsidiaries
          or
          Affiliates.  

      

       

      Any
        Performance Measure(s) may be used to measure the performance of the Company,
        Subsidiary, and/or Affiliate as a whole or any business unit of the Company,
        Subsidiary, and/or Affiliate or any combination thereof, as the Committee
        may
        deem appropriate, or any of the above Performance Measures as compared to
        the
        performance of a group of peer companies, or published or special index that
        the
        Committee, in its sole discretion, deems appropriate, or the Company may
        select
        Performance Measure (j) above as compared to various stock market indices.
        

       

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

       

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

       

      11.6           Committee
        Discretion.
        In the
        event that applicable tax and/or securities laws change to permit Committee
        discretion to alter the governing Performance Measures without obtaining
        shareholder approval of such changes, the Committee shall have sole discretion
        to make such changes without obtaining shareholder approval. In addition,
        in the
        event that the Committee determines that it is advisable to grant Awards
        that
        shall not qualify as Performance-Based Compensation, the Committee may make
        such
        grants without satisfying the requirements of Code Section 162(m) and base
        vesting on Performance Measures other than those set forth in
        Section 11.1.

       

      
        	
                ARTICLE
                  12

              	
                NONEMPLOYEE
                  DIRECTOR AWARDS

              


      

       

      All
        Awards to Nonemployee Directors shall be determined by the Board. The terms
        and
        conditions of any grant to any such Nonemployee Director shall be set forth
        in
        an Award Agreement. 

       

       


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      
        	
                ARTICLE
                  13

              	
                DIVIDEND
                  EQUIVALENTS

              


      

       

      Any
        Participant selected by the Committee may be granted dividend equivalents
        based
        on the dividends declared on Shares that are subject to any Award, to be
        credited as of dividend payment dates, during the period between the date
        the
        Award is granted and the date the Award is exercised, vests or expires, as
        determined by the Committee. Such dividend equivalents shall be converted
        to
        cash or additional Shares by such formula and at such time and subject to
        such
        limitations as may be determined by the Committee (but subject to the provisions
        of Section 409A of the Code, if applicable).

       

      
        	
                ARTICLE
                  14

              	
                BENEFICIARY
                  DESIGNATION

              


      

       

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

       

      
        	
                ARTICLE
                  15

              	
                RIGHTS
                  OF PARTICIPANTS

              


      

       

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

       

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

       

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

       

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

       

      
        	
                ARTICLE
                  16

              	
                CHANGE
                  OF CONTROL

              


      

       

      In
        addition to the terms and conditions of this Plan, one or more Awards may
        be
        subject to the terms and conditions set forth in a written agreement between
        the
        Company and a Participant providing for different terms or provisions with
        respect to such Awards upon a “Change of Control” of the Company (as that term
        may be defined in such written agreement), including but not limited to
        acceleration of benefits, lapsing of restrictions, vesting of benefits and
        such
        other terms, conditions or provisions as may be contained in such written
        agreement; provided however,
        that
        such written agreement may not increase the maximum amount of such Awards.
        

       

       


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      


      
        	
                ARTICLE
                  17

              	
                AMENDMENT,
                  MODIFICATION, SUSPENSION, AND
                  TERMINATION

              


      

       

      17.1           Amendment,
        Modification, Suspension, and Termination.
        Subject
        to Section 17.3, the Committee may, at any time and from time to time,
        alter, amend, modify, suspend, or terminate the Plan and any Award Agreement
        in whole or in part; provided, however, that, without the prior approval of
        the Company’s shareholders and except as provided in Section 4.4, Options or
        SARs issued under the Plan will not be repriced, replaced, or regranted through
        cancellation, or by lowering the Option Price of a previously granted Option
        or
        the Grant Price of a previously granted SAR. Further, no amendment of the
        Plan
        shall be made without shareholder approval if shareholder approval is required
        by law, regulation, or stock exchange rule.

       

      17.2           Adjustment
        of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
        Events.
        The
        Committee may make adjustments in the terms and conditions of, and the criteria
        included in, Awards in recognition of unusual or nonrecurring events (including,
        without limitation, the events described in Section 4.4 hereof) affecting
        the
        Company or the financial statements of the Company or of changes in applicable
        laws, regulations, or accounting principles, whenever the Committee determines
        that such adjustments are appropriate in order to prevent unintended dilution
        or
        enlargement of the benefits or potential benefits intended to be made available
        under the Plan. The determination of the Committee as to the foregoing
        adjustments, if any, shall be conclusive and binding on Participants under
        the
        Plan. 

       

      17.3           Awards
        Previously Granted.
        Notwithstanding any other provision of the Plan to the contrary, and except
        to
        the extent necessary to avoid the imposition of additional tax and/or interest
        under Section 409A of the Code with respect to Awards that are treated as
        nonqualified deferred compensation, no termination, amendment, suspension,
        or
        modification of the Plan or an Award Agreement shall adversely affect
        in any material way any Award previously granted under the Plan, without
        the written consent of the Participant holding such Award. 

       

      
        	
                ARTICLE
                  18

              	
                WITHHOLDING

              


      

       

      The
        Company shall have the right to withhold from a Participant (or a permitted
        assignee thereof), or otherwise require such Participant or assignee to pay,
        any
        Withholding Taxes arising as a result of the grant of any Award, exercise
        of an
        Option or SAR, lapse of restrictions with respect to Restricted Shares or
        Restricted Share Units, or any other taxable event occurring pursuant to
        this
        Plan or any Award Agreement. If the Participant (or a permitted assignee
        thereof) shall fail to make such tax payments as are required, the Company
        (or
        its Affiliates or Subsidiaries) shall, to the extent permitted by law, have
        the
        right to deduct any such Withholding Taxes from any payment of any kind
        otherwise due to such Participant or to take such other action as may be
        necessary to satisfy such Withholding Taxes. In satisfaction of the requirement
        to pay Withholding Taxes, the Participant (or permitted assignee) may make
        a
        written election which may be accepted or rejected in the discretion of the
        Committee, (i) to have withheld a portion of any Shares or other payments
        then
        issuable to the Participant (or permitted assignee) pursuant to any Award,
        or
        (ii) to tender other Shares to the Company (either by actual delivery or
        attestation, in the sole discretion of the Committee, provided that,
        except
        as otherwise determined by the Committee, the Shares that are tendered must
        have
        been held by the Participant for at least six months prior to their tender
        to
        satisfy the Option Price or have been purchased on the open market), in either
        case having an aggregate Fair Market Value equal to the Withholding
        Taxes.

       

       


      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      


      
        	
                ARTICLE
                  19

              	
                SUCCESSORS

              


      

       

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

       

      
        	
                ARTICLE
                  20

              	
                GENERAL
                  PROVISIONS

              


      

       

      20.1           Forfeiture
        Events.

       

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

       

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

       

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

       


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      


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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      (a)           Determine
        which Affiliates and Subsidiaries shall be covered by the Plan;

       

      (b)           Determine
        which Employees, Directors, or Third Party Service Providers outside the
        United
        States are eligible to participate in the Plan;

       

      (c)           Modify
        the terms and conditions of any Award granted to Employees, Directors, or
        Third
        Party Service Providers outside the United States to comply with applicable
        foreign laws;

       


      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      


      (d)           Establish
        subplans and modify exercise procedures and other terms and procedures, to
        the
        extent such actions may be necessary or advisable. Any 

       

      subplans
        and modifications to Plan terms and procedures established under this Section
        20.9 by the Committee shall be attached to this Plan document as appendices;
        and

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      


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

       

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

       

      20.17           Indemnification. Each
        individual who is or shall have been a member of the Board, or a committee
        appointed by the Board, or an officer of the Company to whom authority was
        delegated in accordance with Article 3, shall be indemnified and held harmless
        by the Company against and from any loss, cost, liability, or expense that
        may
        be imposed upon or reasonably incurred by him in connection with or resulting
        from any claim, action, suit, or proceeding to which he may be a party or
        in
        which he may be involved by reason of any action taken or failure to act
        under
        the Plan and against and from any and all amounts paid by him in settlement
        thereof, with the Company’s approval, or paid by him in satisfaction of any
        judgement in any such action, suit, or proceeding against him, provided he
        shall
        give the Company an opportunity, at its own expense, to handle and defend
        the
        same before he undertakes to handle and defend it on his own behalf, unless
        such
        loss, cost, liability, or expense is a result of his own willful misconduct
        or
        except as expressly provided by statute.

       

      The
        foregoing right of indemnification shall not be exclusive of any other rights
        of
        indemnification to which such individuals may be entitled under the Company’s
        Certificate of Incorporation or Bylaws, as a matter of law, or otherwise,
        or any
        power that the Company may have to indemnify them or hold them
        harmless.

       

      20.18           Amendment
        to Comply with Applicable Law.
        It is
        intended that no Award granted under this Plan shall be subject to any interest
        or additional tax under Section 409A of the Code. In the event Code Section
        409A
        is amended after the date hereof, or regulations or other guidance is
        promulgated after the date hereof that would make an Award under the Plan
        subject to the provisions of Code Section 409A, then the terms and conditions
        of
        this Plan shall be interpreted and applied, to the extent possible, in a
        manner
        to avoid the imposition of the provisions of Code Section 409A. 

       


      
        
          
          

        

        
          24